session 2 evolution of management thought

8/3/2019 Session 2 Evolution of Management Thought

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Evolution of Management

Thought



Why History?

◦ An awareness and understanding of important

historical developments in management are also

important to contemporary managers in furtheringthe development of management practices and in

avoiding the mistakes of others in the past.

The Importance of Theory and History



• Management Through the Ages

The Historical Context of Management

3000 B.C. 2500 B.C.

A Sumerians F Chinese

B Egyptians

C Babylonians

D Greeks

G Venetians

E Romans

2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D. 1500A.D.500 A.D. 1000

A Used written rules and regulations for governance

B Used management practices to construct pyramids

C Used extensive set of laws and policies for governance

D Used different governing systems for cities and state

E Used organized structure for communication and control

F Used extensive organization structure for governmentagencies and the arts

G Used organization design and planning concepts to

control the seas



4

Time Line of Management Thought



Classical Management Theory

Classical

Management

Theory

A theory that focused on finding the

“one best way” to perform and

manage tasks



6

Classical Management Theory

Classical

Scientific

School

Focused on the manufacturing

environment

Classical

Administrative

School

Emphasized the flow of information

and how organizations should

operate

Classical

Bureaucratic

School

Emphasized on rules, systems and

procedures



Classical Scientific School

Scientific Management

Frederick W. Taylor

The father of Scientific Management

– the 1st Efficiency Expert.

A philosophy and set of management

practices that are based on fact andobservation, not on guesswork

Cl i l S i ifi S h l



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▼ Techniques

• Scientific task planning- Min. time reqd. to do

a job

• Time and Motion studies- Time, Motion and

Fatigue• Standardisation- Set standards for the task,

materials, work methods, quality, time and

cost.

• Differential piece wage plan

• Functional foremanships- Plan the work for

employees and help for results

Frederick W. Taylor



▼ Key Principles:1. Science not rule of thumb- What, how, when, where and by whom

(replacement of odd rule of thumb by the use of method of enquiry,

investigation, data collection, analysis and framing of rules)

2. Harmony not discord3. Co-operation not individualism

4. Maximum output in place of restricted output

5. Development of each man to his greatest efficiency and prosperity

6. Equitable division of work and responsibility between

management and labour.

Frederick W. Taylor



Frank and Lillian Gilbreth refined Taylor’s methods and suggested Conservation and

Saving

– 1. Breaking down each action into individual

components. – 2. Find better ways to perform the action.

– 3. Reorganize each action to be more efficient.

– 4. Protecting workers from unsafe working conditions.




Henry L. GanttHow to increase worker’s efficiency?

“The essential difference between the best systemof today and those of the past are the manner inwhich the tasks are scheduled, and the manner

in which their performance is rewarded”

Scheduling InnovationGantt Chart – scheduling summary of work

Rewarding Innovation Bonus in addition to the piece rate if they exceeded theirdaily production quota

On time = Bonus, Good Performance = Reward



Problems associated with ScientificManagement – Managers often gave attention only to increasing

output – They did not allow workers to share in the benefits of

increased output.

– Specialized jobs became very boring & dull.

– Workers ended up distrusting Scientific Management.



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Classical Administrative School

▼ Believed specific management skills could be

learned and taught

▼Fayol’s universal management functions:

– Planning

– Organizing

– Leading

–Controlling

Henri Fayol



Principles of Management

Henri Fayol (1841-1925)Management principles are statements of fundamental truth. These principles serve as guidelines for

decisions and actions of managers.

His 14 principles are:

1. Division of Work –Specialize in specific tasks

2. Authority and responsibility – Right to give orders and toexpect obedience

3. Discipline –

Obey & respect rules.4. Unity of command – Orders from only one superior

5. Unity of direction – One manager one plan

6. Subordination of individual interests to the commoninterest – Workers need to understand how their behavior

affects the performance of the organization7. Remuneration of personnel – an equitable system of

rewarding employees



8. Order – arranging jobs to permit efficiency

9. Centralization – The concentration of authority at the topand decreasing the role of sub. In DM.

10. Scalar Chain – Chain of authority from top to bottomthrough all communications flow.

11. Equity – Fair in treatment.

12. Initiative –

allowing workers to be creative and innovativein their work

13. Stability of tenure of personnel – the need to keepemployees for a long time to take advantage of their skillsand knowledge

14. Esprit de corps –

Union is Strength

Cl i l B ti S h l



• Hierarchy –

Way of ranking positions in descendingorder

• Division of Work- Dividing total work in to specialisedtask

• Rules, Regulations and Procedures• Records

• Impersonal Relationships- Employees are evaluatedaccording to rules and objective data

• No room for personal emotions• Rationality—the use of the most efficient means

available to accomplish a goal

Classical Bureaucratic School

Max Weber (1864-1920): Principles of Bureaucracy

The Theory of Bureaucracy: Max Weber – a formal system of organization

designed to ensure efficiency and effectiveness.



Potential Benefits of Bureaucracy

Efficiency

Consistency Functions best when routine tasks are performed

Performance based on objective criteria



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Behavioral Management Theory

Behavioral

School/Neo-Classical

Recognized employees as individuals

with concrete, human needs, as parts

of work groups, and as members of a

larger society and emphasized on

psychology, human sentiments andsocial values

1.Human relation/Hawthorne

studies

2.Behavioral approach



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Human RelationsTheory

Hawthorne Experiments-Elton Mayo and Others

The Hawthorne Studies

Studies of how characteristics of the work setting affected workerfatigue and performance at the Hawthorne Works of the WesternElectric Company from 1924-1932.

–Observation of two groups of employees making telephone relays todetermine the levels of illumination

Working conditions and productivity – Worker productivity was measured at various levels of light illumination.

– Researchers found that regardless of whether the light levels were raisedor lowered, worker productivity increased.

–The Bank Wiring Observation Room Experiment

Analyzed the group influence and social relationships in a workgroup



Employees are

motivated by social

needs and associationwith others

Employees’ performance

is more a result of peer

pressure thanmanagement’s incentives

and rules

Managers need to involve

subordinates in coordinating their

work to improve efficiency.Happy employees are productive

workers

Employees want to participate

in decisions that affect them.Special attention causes people

to increase their efforts(Known as

Hawthorne effect)

Lessons from the Hawthrone Studies

Behavioral Viewpoint

Managers need to involve

subordinates in coordinating their

work to improve efficiency.Happy employees are productive

workers



2-21

Human RelationsTheoryTheory X and Theory Y: Douglas McGregor



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Quantitative Management Theory

The use of quantitative techniques to

maximize use of resources (OperationsManagement, Total Quality Management(TQM), and Management InformationSystems (MIS)

• Mathematical approaches to management

problems• Developed during World War II

• Mathematical models are used to simulatechanges

• Computers are essential• Applied to every aspect of business



2-23

– Operations management —techniques used to

analyze all aspects of the production system

– Total Quality Management (TQM) —focuses on

analyzing input, conversion, and output activitiesto increase product quality

– Management Information Systems (MIS) —

It focuses on designing and implementing

computer based information systems



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Systems Management Theory

Systems

School

It tries to solve problems bydiagnosing them within a framework

of inputs, transformation processes,

outputs and feedback.



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The Organization as a System



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Contingency Management Theory

Contingency

School

It argues that appropriate managerialaction depends on the particular

parameters of the situation.



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Quality Management Theory

Quality

School

The essence of the quality of anyoutput is its ability to meet the needs

of the person or group

session 2 evolution of management thought

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