Historical Background Of Management PDF

CHAPTER 2 HISTORICAL BACKGROUND OF MANAGEMENT Words for thought: “Learning the past, makes it easier for us to understand the present and visualize the future” Learning Objectives  To understand how management theories develop  To understand the impact of the...

CHAPTER 2 HISTORICAL BACKGROUND OF MANAGEMENT Words for thought: “Learning the past, makes it easier for us to understand the present and visualize the future” Learning Objectives  To understand how management theories develop  To understand the impact of the environment to management thinking  To gain insights into new management approach The historical context of management thinking can be described in the following framework: The classical approaches The human resource/behavioral approaches The quantitative approaches The contingency approaches The system approach The learning organization approach The Quality Management approach Early Management Thought  Early ideas about management strategy ◦ Sun Tzu (770-476 B.C.), The Art of War  Early ideas about leadership ◦ Nicolò Machiavelli (1469-1527), The Prince  Early ideas about the design and organization of work ◦ Adam Smith, The Wealth of Nations  division of labor Sun Tzu, Art of War “Shang Chang Ru Zhan Chang” “The marketplace is a battlefield” Sun Tzu, 4th century BC The Evolution of Management Theory Contingency Approach Systems Theory (Comprehensive Analysis of Management) Management Approaches and the Environment GENERAL ENVIRONMENT ECONOMIC SOCIAL OPERATING ENVIRONMENT NEW ENTRANTS SUPPLIER INTERNAL ENVIRONMENT PRODUCTION TECHNOLOGY SUBSTITUTES STRUCTURE POLITICAL INPUTS COMPETITION TECHNOLOGY CUSTOMER LEGAL  The Classical Approach The classical approach (ca1890) to management is a management approach that emphasizes organizational efficiency to increase organizational success. Environment in ca1890 Industrial revolution Autocratic management was the norm “Science" as a solution to the inefficiencies and injustices of the period Idea of interchangeable parts The Classical Approach  Scientific Management ◦ Frederick W. Taylor ◦ Frank and Lillian Gilbreth ◦ Henry Gantt  Bureaucratic Management ◦ Max Weber  Administrative Management ◦ Henri Fayol Scientific Management  Advocates the use of scientific method to define the “one best way” to do a job  Involve a job science (job study) of how a job was perform to determine the ways to improve it and find the best possible way to accomplish the work Fredrick W. Taylor  Mechanical engineer who had noticed that the cause of inefficiency in their company (Midvale & Bethlehem Steel Company) is the used of different techniques to do the same job. Workers did their jobs their own way without clear and uniform specifications which leads to loose efficiency and performed below their own capacities. Taylor’s Four Principles of Scientific Management 1. Scientifically study each part of a task and develop the best method of performing the task. 2. Carefully select workers and train them to perform the task by using the scientifically developed method. 3. Cooperate fully with workers to ensure that they use the proper method. 4. Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly. Frank & Lilian Gilbreth  Introduce the concept of motion study which evaluate and analyze workers’ movement and motion to eliminate unnecessary and/or redundant motions. Bureaucratic Organization  Rational and efficient form of organization founded on logic, order and legitimate authority.  Advocates applying rules rigidly within an administrative system to remedy the prevalent deficiencies of the organization at that time that people were in the position of authority not because of their job-related capabilities but because of their social standing or privileged status in the society Key Characteristics of Weber’s Ideal Bureaucracy  Division(Specialization) of labor  Formal rules and procedures  Formal Selection  Impersonality  Well-defined hierarchy  Career advancement based on merit (career orientation)  Jobs broken down into simple, routine, and well defined tasks Managers are career professionals, Offices or positions are organized in hierarchy, not owner of the units they manage with a clear chain of command Division of Labor Career Orientation Authority Hierarchy A bureaucracy should have Impersonality Formal Selection Formal Rules & Regulations People selected for jobs based on technical qualification Uniform application of rules and controls, not according to personalities System of written rules and standard operating procedures Administrative Principles  Advocates documenting and understanding the experiences of successful manager as basis to described what good management practice is.  Fayol’s 14 Principles of Administrative Management 1. Division of work 8. Centralization 2. Authority 9. Scalar chain 3. Discipline 10. Order 4. Unity of command 11. Equity 5. Unity of direction 12. Stability and 6. Subordination of tenure individual interest 13. Initiative to the general interest 14. Esprit de corps 7. Remuneration lanning, Organizing, Commanding, Coordinating, Controlling The Human Resource (Behavioral) Approach to Management - The behavioral approach (ca 1910) to management is a management approach that emphasizes increasing organizational success by focusing on human variables (human needs, work groups and the role of social factors in the workplace) within the organization.  Early Advocates: · Concerned about deplorable working conditions · Proposed idealistic workplace · Argued that money spent improving labor was smart investment · Actual manager who thought organizations were social systems · Pioneer in the field of industrial that required cooperation psychology – scientific study of people at · Believed manager’s job was to Robert Owen work communicate and stimulate Late 1700s · Suggested using psychological test for employees’ high levels of effort employee selection, learning theory · First to argue that organizations were concepts for employee training and study open systems of human behavior for employee motivation Chester Bernard Early Advocates of Hugo Munsterberg 1930's Behavioral Approach Early 1900s Mary Parker Follet Early 1990s · One of the first to recognize that organizations could be viewed from perspective of individual and group behavior · Proposed people oriented ideas than scientific management followers · Thought organizations should be based on group ethic Mary Parker Follet  Advocates that organization should be based on a group ethic rather than individualism which means that managers’ job was to harmonize and coordinate group efforts. Manager and workers should view themselves as partners. Hawthorne Effect: The discovery that paying special attention to employees motivates them to put greater effort into their jobs. (from the Hawthorne management studies, performed from 1924 – 1932 at Western Electric Company’s plant near Chicago) Maslow’s Hierarchy of Needs Implies that managers who can help his subordinates satisfy their important need Self-Actualizationat work will achieve productivity Need for Self Esteem Need for Social Relations Need for Security Physiological Needs McGregor’s Theory X and Theory Y  Leaders and managers who hold Theory X assumptions believe that employees are inherently lazy and lack ambition. ◦ A negative perspective on human behavior.  Leaders and managers who hold Theory Y assumptions believe that most employees do not dislike work and want to make useful contributions to the organization. ◦ A positive perspective on human behavior. Argyris’s Theory of Personality and Organization  Belief that managers who treat people positively and as a responsible adults will achieve productivity\  Advice to expand job responsibilities, allow more task variety and adjust supervisory styles to allow more participation and promote better human relations. The Quantitative (Management) Science Approach The management science approach (ca1940) is a management approach that emphasizes the use of the scientific method and quantitative techniques to increase Environment organizationalinsuccess. ca1940 Application of OR in solving complex problems in warfare (WWII) Significant technological and tactical breakthroughs Interest in manufacturing and selling after WWII  The Contingency Approach The contingency approach (ca 70’s) to Management is a management approach that Emphasizes that what managers do in practice depends on a given set of circumstances--a situation. Environment in ca1970’s” Emergence of new companies “Apple” Emergence of new products, “IBM PC” The System Approach The system approach (ca 50’s-60’s) to management is a management approach based on general system theory--the theory that to understand fully the operation of an entity, the entity must be viewed as a Environment in ca1950’s to 60’s” system. Growing This quality requires consciousness understanding the Total Quality Management interdependence of its parts. The Learning Organization Approach The learning organization approach to management is the management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors. From “The Fifth Discipline” by Peter Senge, 1990 Managerial Approach to Learning Organization  Managers must create an environment conducive to learning  Managers encourage the exchange or information among organization members  Managers promote ◦ systematic problem solving ◦ Experimentation ◦ learning from experiences and past history ◦ learning from experience of others ◦ transferring knowledge rapidly throughout the organization From “The Fifth Discipline” by Peter Senge, 1990 Building a Learning Organization  System Thinking ◦ Every organization member understands his or her own job and how the jobs fit together to provide finals products to the customer  Shared vision ◦ All organization members have a common view of the purpose of the organization and a sincere commitment to accomplish the purpose  Challenging of the mental models ◦ Organization members routinely challenge the the way business is done and the thought processes people use to solve organizational problems From “The Fifth Discipline” by Peter Senge, 1990 Building a Learning Organization  Team learning ◦ Organization members work together, develop solution to new problems together, and apply the solutions together. ◦ Working as teams rather than than individuals will help the organization gather collective force to achieve organizational goals  Personal mastery ◦ All organization members are committed to gaining a deep and rich understanding of their work ◦ Such an understanding will help organizations to reach important challenges that confront them From “The Fifth Discipline” by Peter Senge, 1990 Learning Organization Approach System thinking (Systems Approach) Personal mastery Shared Vision (Theory Z/Behavioral) Building a Learning (Chaordic Organization) Organization Challenging of Team Learning Mental models (Theory Z/Behavioral) (Classical/Management science) Quality Management Approach o focused on consistently meeting customer requirements and enhancing their satisfaction. It is aligned with an organization's purpose and strategic direction (ISO9001:2015). It is expressed as the organizational goals and aspirations, policies, processes, documented information and resources needed to implement and maintain it. 1. Give an example of an organization that you are a part of. 2. Discuss your function, role and skills that has an impact to the organization 3. Current trend/s and issue/s you or your organization is/are facing. 4. Solutions made in number 3 5. In 1 whole short bond paper, hand written