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ลำดับตอนที่ #4 : [[R.S.]]Business Management::Chapter.2::12.9.11

Review Sheet of Business Management for

Chapter 2 Test* 12.Sep.2011

Chapter.2 :: The Management Movement [[Page.30]]

2-1 The Evolution of Management [[Page.32]]

-          Changes in technology, communication, and transportation made the Industrial Revolution possible.

·         Advances in manufacturing processes allowed new products to be created.

·         Other factors such as telegraph, cable lines, advances in transportation, construction of canals & roads, and improvement in design of steamships also helped improve opportunities for industry.

-          The captains of industry that created enormous business empires dominated and shaped the U.S. economy include: John D. Rockefeller (oil), James B. Duke (tobacco), Andrew Carnegie (steel), J.P. Morgan (banking), and Cornelius Vanderbilt (steamships and railroads).

·         Most of the great entrepreneurs of the 19^th and early 20^th centuries started with few resources and grew bigger later on

-          A monopoly occurs when one party maintains total control over a type of industry.

·         The captains of industry of the 19^th century drove competitors out of business and created giant companies that maintained monopolies in their industries.

·         John D. Rockefeller, for example, lowered his oil prices to force his competitors to sell our or join forces with him. He combined dozen of companies he owned into a single trust, or giant industrial monopoly.

-          By about 1870, government decided to begin regulating business.

·         In 1887 Congress passed the Interstate Commerce Act, the first major piece of regulatory legislation. It forced railroads to publish their rates and forbade them to change rates without notifying the public.

·         In 1890, Congress passed the Sherman Antitrust Act, which made it illegal for companies to create monopolies.

-          In response to the need for management, many new ideas about productivity and motivation were developed in the late 19^th century and early 20^th century.

-          In 1874, Frederick Winslow Taylor went to work at Midvale Steel Company and was able to come up with scientific management principles.

·         Scientific management seeks to increase productivity and make work easier by carefully studying work procedures and determining the best methods for performing particular tasks.  

1.       Jobs should be designed according to scientific rules. Employers should gather, classify, and tabulate data in order to determine the “one best way” of performing a task or series of tasks.

2.       Employees should be selected and trained according to scientific methods. Employers should study worker strengths and weaknesses and match workers to jobs. They should also train employees in order to improve their performance

3.       The principles of scientific management should be explained to workers.

4.       Management and workers should be interdependent so that they coorperate

-          During the 1920s, researchers began to look at the relationship between working conditions and productivity. At the Hawthorne plant of Western Electric in Cicero, Illinois, researchers had conducted experiment by testing many different levels of lighting as well as other factors. However, the result was that whatever variable was changed, productivity increased.

·         Researchers concluded that productivity rose because workers worked harder when they received attention.

·         This phenomenon, in which change of any kind increases productivity, has since been known as the “Hawthorne effect.”

-          Abraham H. Maslow also came up with another important idea about management. According to him, all people have five basic types of needs:

·         Individuals fulfill lower-level needs (physical needs) before seeking to fulfill high-level needs (self actualization).

·         This is hierarchy of needs which is Maslow’s grouping and ordering of physical, security, social, status, and self-fulfillment needs.

ð  Physical needs = food, water, air, sleep, wages, salary, physical working conditions

ð  Security needs = freedom from physical, psychological, or financial claim, insurance, retirement benefits, job security

ð  Social needs = need to talk to others, express feelings of friendship, accept and be accepted by others, opportunities for co-workers to socialize with one another

ð  Status needs = self-esteem and esteem in which one is held by others, signs of recognition that are visible to others like job titles, private offices, awards, promotions

ð  Self-fulfillment needs = need to realize one’s own potential, opportunities to be creative at work, involvement in decision making process

2-2 The Development of Modern Management [[Page.42]]

-          In the 1960s, MIT Professor Douglas McGregor identified 2 types of management style, which he called Theory X and Theory Y.

·         Theory X assumes that people are basically lazy and will avoid working if they can. To make sure that employees work, Theory X managers impose strict rules and make sure that all important decisions are made only by them.

·         Theory Y assumes that people find satisfaction in their work. Theory Y managers believe that people will work productively if put in the right environment and they also give more freedom to their employees than do Theory X managers. They let their employees make mistakes and encourage creativities.

-          Centralization refers to the concentration of power among a few key decision makers. In the early 20^th century, decisions at most large American companies were made by a small group of senior managers. These companies often ran into problems

-          Decentralization is the process by which decisions are made by managers at various levels within an organization.

-          In the 1950s, W. Edwards Deming used mathematics to help solve problems of quality control. He came up with total quality management (TQM), a system of management based on involving all employees in a constant process of improving quality and productivity by improving how they work.

·         This approach, which has been widely adopted by American businesses, focuses on totally satisfying both customers and employees.

·         Deming emphasized the maintenance of high quality standards.

-           Many companies in a variety of industries have developed TQM programs and most have found that the performance of their companies improved.

·         To improve quality, management involved every employee in the company.

·         Employees are ensured that they are committed to quality in different ways too

-          To try to find out why Japanese companies were so successful, researchers tried to identify ways in which Japanese companies differed from American companies.

·         They found, for example, that Japanese managers encouraged more employee participation in decision making and also showed deeper concern for the personal well-being of their employees more than did American managers.

-          In the 1980s, William Ouchi, a management researcher, developed a new theory of management, known as Theory Z.

·         Theory Z is a business management theory that integrats Japanese and American business practices. It incorporates the Japanese emphasis on collective decision making and concern for employees with the American emphasis on individual responsibility.

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