Download - Part I - Ch02 Evolution of Mgt ISBS
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
1/26
2
The Evolution ofManagement
Theory
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
2/26
The Evolution of Management Thought
Early classical approaches:Scientific management, Administrative management and
Bureaucracy
Neo classical approaches:
Human relations movement, Behavioural approach,
Social systems approach
Modern approaches:
Management Science/Mathematical or Quantitativeapproach, Systems theory and contingent theory, TQM,
MBO, Self Managed work teams, MBWA, Employee
Empowerment.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
3/26
Job Specialization
Adam Smith, 18th century economist, foundfirms manufactured pins in two ways:
Craft -- each worker did all steps.
Factory -- each worker specialized in one step.Smith found that the factory method hadmuch higher productivity.
Each worker became very skilled at one, specifictask.
Breaking down the total job allowed for thedivision of labor.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
4/26
Scientific ManagementDefined by Frederick Taylor in the beginning
of the twentieth century.
Focus:
Operational efficiency
The systematic study of the relationships
between people and tasks to redesign the
work for higher efficiency.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
5/26
Taylors Contributions
1. Time, Motion and Fatigue studies2. Differential payment and maximize output.
3. Replaced the rule of thumb with Science.
4. Separation of Planning and doing.
5. Functional foremanship
6. Scientific recruitment and training
7. Intimate and friendly cooperation between
management and workers.
8. Bring Standardization to work.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
6/26
The Gilbreths
Frank and Lillian Gilbreth refined Taylorsmethods.
Time and motion studies:
1. Broke down each motion or movementsinto separate action.
2. Reorganized each action.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
7/26
Henry Gantt
Clarity of financial incentives suggested byTaylor
Gantt chart - a forerunner to PERT, rated
employees publicly.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
8/26
Administrative Management
-Henry FayolIntroduced the elements of Management
Focus:
Achieving efficiency at the top level of
management.
Division of activities of a business enterprise into 6
groups: Accounting, Financial, Commercial,
Technical, Administrative/managerial and Security.
Managerial Training and Qualities: Physical,
Mental, Moral, Educational, Technical, Experience.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
9/26
Fayols 14 Principles
1. Division of Labor.2. Authority and
Responsibility
3. Unity of Command4. Discipline
5. Unity of Direction
7. Subordination ofindividual interestto general interest
7. Fair Remuneration8. Centralization
9. Scalar chain
10.Order
11.Equity
12.Stability of Tenure
13.Initiative.
14.Esprit de corps
i
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
10/26
Bureaucratic Management
-Max Weber
A formal system of organization and administrationto ensure effectiveness and efficiency. Its features
are:
Administrative Class
Hierarchy
Division of LaborOfficial rules and records
Impersonal relations not welcome.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
11/26
Bureaucratic Principles
A Bureaucracy
should have
Written rules
System of task
relationships
Hierarchy of
authority
Fair evaluation
and reward
Figure 2.1
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
12/26
Key Points of Bureaucracy
AuthorityPositions based on performance not social
contacts.
Duties of positions are clearly identified.
Lines of authority should be clearlyidentified.
Rules, Standard Operating Procedures(SOPs), & Norms
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
13/26
The Human Relations Movement
- The Hawthorne Studies (1924-1932)
-Elton MayoIllumination experiments
Relay assembly test room
Mass interviewing program
Bank wiring test room
Eventually, it appeared that the workersenjoyed the attention they received as part ofthe study and were more productive.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
14/26
Implications of Human Relations
ApproachEconomic rewards and productivity do not necessarily go
together (Illumination test)
If supervisors are friendly with workers the productivity
would increase (Relay assembly test room)
There exist an informal group within an organization and
it has its own leader who plans for everybody. (Bank
wiring test)
Group influence (Mass interviewing test)Communication is an important aspect of organization in
order to identify peoples attitudes, opinions and methods
of working and taking suitable actions (Mass Interviewing
test)
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
15/26
Behavioral Management and
Social Systems Approach
-Chester Barnard and Mary Parker FolletOrganization is a social system
Formal and Informal Organization.
Cooperation among members is necessary for achievement
of organizational objectives.
Acceptance theory of authority
Motivation
Leadership
organization equilibrium
Flexible organization structure
Participative and group decision making
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
16/26
Contributions of Peter DruckerManagement as a discipline and profession
Introduced Innovation as a management function.
Managerial Functions Objective setting, decisionmaking, motivating and organizing.
Organization Structure musti) be performance-based,
ii) Flat structure
iii)Conduct training and testing of future topmanagers
Three analyses : Activity, Decision, Relationsanalysis
Dynamic environment
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
17/26
Theory Y
Employee is not lazy
Must create worksetting to build
initiative
Provide authority toworkers
Theory X
Employee is lazy
Managers mustclosely supervise
Create strict rules& defined rewards
Theory X vs. Theory Y
-Douglas McGregorFigure 2.2
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
18/26
Structures
Mechanistic: Authority is centralized at thetop. (Theory X)
Employees closely monitored and managed.
Very efficient in a stable environment.Organic: Authority is decentralizedthroughout employees. (Theory Y)
Much looser control than mechanistic.
Managers can react quickly to changingenvironment.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
19/26
Management Science
Uses rigorous quantitative techniques tomaximize resources.
Quantitative management
Operations management
Total Quality Management (TQM
Management Information Systems (MIS
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
20/26
Organization-environment Theory
Systems Theory
An organization is a set of interdependentparts/subsystems: Task, Structure, People andTechnology.
Concept of holism- each of the interdependentparts cannot be accurately analyzed andunderstood alone unless along with the wholesystem.
A system can be either open or closed.An open system interacts with the environment.
A closed system is self-contained (closed loop).
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
21/26
The Organization as an Open System
InputStage
RawMaterials
Conversion
Stage
Machines
Human skills
Output
Stage
Goods
Services
Sales of outputs
Firm can then buy inputs
Figure 2.3
Environment
Environment
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
22/26
Contingency Theory
Assumes there is no one best way tomanage.
Results differ as situations differ.
Managers must be flexible to react toenvironmental changes and developback up plans.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
23/26
Other Management Styles
Employee empowerment
Self-managed work team (SMWT)
Management By Walking Around
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
24/26
Thank You
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
25/26
Assignment 1
( Submission date26th July 2011).Farm Equipment Limited (FEL) is engaged in manufacturing farm equipment ofdifferent types. It markets its equipment through a network of distributors locatednation-wide. Besides, it also exports its equipment to different countries. Thechairman of the company is quite satisfied with the performance of the company.One day, a meeting of distributors was held at the companys headquarters , inwhich the chairman also participated. After some discussion about some
distribution strategies, almost all distributors urged the chairman to introducesome new models to satisfy the changing demands of the customers. The chairmanwho had engineering background recognized the implications of distributorssuggestions but suggested that introduction of the new models would requireheavy investment in R&D. Further, changes in the highly automated productionline would be very costly. His argument was the company has been quite
successful even with a limited number of models. Therefore, instead ofintroducing new models, it would be more appropriate to cut the cost ofproduction of the existing models and reduce their price. After all, what customerswant is value for their money.. With this argument, the chairman decided not tointroduce new models but insisted to cut the cost and price of the existing models.However, he agreed to seek the opinion of a consultant to test the validity of his
decision.
-
7/31/2019 Part I - Ch02 Evolution of Mgt ISBS
26/26
Questions1.
It is often said that to be successful, an organizationmust be an open system. What management
implications, does this statement have and how can this
statement be applied in this case?
2. Suppose that you are required to work as a consultantto FEL, what suggestions will you give to the company
and why? What additional information will you require
from the company to make your suggestions?