1) Study the ways jobs are performed now and determine new ways to do them.

2) Codify the new methods into rules.

3) Select workers whose skills match the rules.

4) Establish fair levels of performance and pay a premium for higher performance.

• Managers frequently implemented only the increased output side of Taylor’s plan. Workers did not share in the increased output. • Specialized jobs became very boring, dull. Workers ended up distrusting the Scientific Management method. • Workers could purposely “under-perform.” Management responded with increased use of machines and conveyors belts.

Also studied worker-related fatigue problems caused by lighting, heating, and the design of tools and machines.

• Refined Taylor’s work and made many improvements to the methodologies of time and motion studies.

The concept of bureaucracy

Five principles of bureaucracy

1. Division of Labor: allows for job specialization. Fayol noted jobs can have too much specialization leading to poor quality and worker dissatisfaction. 2. Authority and Responsibility Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command Employees should have only one boss. 4. Line of Authority A clear chain of command from top to bottom of the firm. 5. Centralization The degree to which authority rests at the top of the organization. 6. Unity of Direction A single plan of action to guide the organization. 7. Equity The provision of justice and the fair and impartial treatment of all employees. 8. Order The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Fayol’s Principles of Management Administrative Mgnt Theory 15 Instructor: LTT Xuan 16 9. Initiative The fostering of creativity and innovation by encouraging employees to act on their own. 10. Discipline Obedient, applied, respectful employees are necessary for the organization to function. 11. Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success. 12. Stability of Tenure of Personnel Long-term employment is important for the development of skills that improve the organization’s performance. 13. Subordination of Individual Interest to the Common Interest The interest of the organization takes precedence over that of the individual employee. 14. Esprit de corps Comradeship, shared enthusiasm foster devotion to the common cause (organization).

- Suggested workers help in analyzing their jobs for improvements, the worker knows the best way to improve the job. • If workers have relevant knowledge of the task, then they should control the task

Theory X: assumes the average worker is lazy, dislikes work and will do as little as possible.

Theory Y: assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work

Sub Topic

Concept: A system that takes resources for its external environment and converts them into goods and services that are then sent back to that environment for purchase by customers.

+ Inputs: the acquisition of external resources. • Conversion: the processing of inputs into goods and services. • Output: the release of finished goods into the environment.

Sub Topic

• Authority is centralized at the top. (Theory X) • Employees are closely monitored and managed. • Can be very efficient in a stable environment.

• Authority is decentralized throughout the organization. (Theory Y) • Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment.