Principles Of Management PDF

Principles of Management Dr. Alaa Gamie  Chapter two Evolution of Management Thoughts Learning objectives 1. Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory 2. Explain the principle of job specialization an...

Principles of Management Dr. Alaa Gamie  Chapter two Evolution of Management Thoughts Learning objectives 1. Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory 2. Explain the principle of job specialization and division of labor, and tell why the study of person-task relationships is central to the pursuit of increased efficiency 3. Identify the principles of administration and organization that underlie effective organizations 4. Trace the change in theories about how managers should behave to motivate and control employees Dr. Alaa Gamie  Overview The driving force behind the evolution of management theory is the search for better ways to use organizational resources to make goods and services. The evolution of modern management began in the closing decades of the 19th century, after the industrial revolution had swept through Europe and America Craft production  Large factories Many managers and supervisors in these workshops and factories were engineers who had only a technical orientation. They were unprepared for the social problems that occur when people work together in large groups in a factory or shop system. Dr. Alaa Gamie  The evolution of management theory how managers should lead Explain how and control their workforces external to increase performance. environment affects the way Identifying principles organizations and that will lead to the managers operate. creation of the most Develop analytical and efficient system of quantitative techniques organization and to help managers management. measure and control organizational matching people performance. and tasks to maximize efficiency Dr. Alaa Gamie Scientific Management theory Job specialization and division of labor Adam Smith (18th century economist) Observed that firms manufactured pins in one of two different ways: - Craft-style—each worker did all steps. - Production—each worker specialized in one step. Dr. Alaa Gamie Job specialization Smith concluded that increasing the level of job specialization — the process by which a division of labor occurs as different workers specialize in tasks— improves efficiency and leads to higher organizational performance Dr. Alaa Gamie  F. Taylor and scientific management “The systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency” Taylor (manufacturing manager) believed that if the amount of time and effort that each worker expends to produce a unit of output can be reduced by increasing specialization and the division of labor, the production process will become more efficient Dr. Alaa Gamie 4 principles to increase efficiency (Taylor, scientific management) Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed. Time-and-motion study, which involves the careful timing and recording of the actions taken to perform a particular task. Dr. Alaa Gamie 4 principles to increase efficiency (Taylor, scientific management) Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures Principle 3: Carefully select workers who possess skills and abilities that match the needs of the task and train them to perform the task according to the established rules and procedures. Principle 4: Establish a fair or acceptable level of performance for a task, and then develop a pay system that rewards performance above the acceptable level. Dr. Alaa Gamie  Administrative management theory “How to create an organizational structure and control system that leads to high efficiency and effectiveness” Organizational structure  is the system of task and authority relationships that controls how employees use resources to achieve the organization’s goals. Dr. Alaa Gamie  Dr. Alaa Gamie Administrative management theory Max Weber – Theory of bureaucracy Henri Fayol – Theory of Management  The theory of Bureaucracy Weber developed the principles of bureaucracy when Germany was undergoing its industrial revolution.  formal system of organization and administration designed to ensure efficiency and effectiveness. Dr. Alaa Gamie Dr. Alaa Gamie Authority  power to hold people accountable for their actions and to make decisions concerning the use of organizational resources. Authority gives managers the right to direct and control their subordinates’ behavior to achieve organizational goals Obedience is owed to a manager not because of any personal qualities— such as personality, wealth, or social status—but because the manager occupies a position that is associated with a certain level of authority and responsibility Dr. Alaa Gamie Some organizations and industries are still affected by social networks in which personal contacts and relations, not job-related skills, influence hiring and promotional decisions Dr. Alaa Gamie When the tasks and authority associated with various positions in the organization are clearly specified, managers and workers know what is expected of them and what to expect from each other. Moreover, an organization can hold all its employees strictly accountable for their actions when they know their exact responsibilities. Dr. Alaa Gamie Managers must create an organizational hierarchy of authority that makes it clear who reports to whom and to whom managers and workers should go if conflicts or problems arise. Dr. Alaa Gamie  Rules – formal written instructions that specify actions to be taken under different circumstances to achieve specific goals Standard Operating Procedures (SOPs) – specific sets of written instructions about how to perform a certain aspect of a task Norms – unwritten, informal codes of conduct that prescribe how people should act in particular situation Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 1) Division of labor: Job specialization and the division of labor should increase efficiency, especially if managers take steps to lessen workers’ boredom. 2) Authority and responsibilities: Fayol, however, went beyond Weber’s formal authority, which derives from a manager’s position in the hierarchy, to recognize the informal authority that derives from personal expertise, technical knowledge, moral worth, and the ability to lead and to generate commitment from subordinates. Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 3) Unity of command: employee should receive orders from, and report to, only one superior. 4) Line of authority: The length of the chain of command that extends from the top to the bottom of an organization should be limited. Fayol also pointed out that when organizations are split into different departments or functions, each with its own hierarchy, it is important to allow middle and first- line managers in each department to interact with managers at similar levels in other departments  Speed decision making Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 5) Decentralization: Authority should not be concentrated at the top of the chain of command 6) Line of direction: organization should have a single plan of action to guide managers and workers. Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 7) Equity: All organizational members are entitled to be treated with justice and respect. 8) Order: The arrangement of organizational positions should maximize organizational efficiency and provide employees with satisfying career opportunities. He recommended the use of organizational charts to show the position and duties of each employee and to indicate which positions an employee might move to or be promoted into in the future Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 9) Initiative : Managers should allow employees to be innovative and creative. 10) Discipline: Managers need to create a workforce that strives to achieve organizational goals  respectful relations between organizational members and reflects the quality of an organization’s leadership and a manager’s ability to act fairly and equitably Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 11) Remuneration of personal : The system that managers use to reward employees should be equitable for both employees and the organization 12) Stability of tenure of personal: Long-term employees develop skills that can improve organizational efficiency. Dr. Alaa Gamie  Fayol’s principles of management 14 principles to increase efficiency of the management process: 13) Subordination of individual to the common interest: Employees should understand how their performance affects the performance of the whole organization 14) Esprit de corps: Managers should encourage the development of shared feelings of comradeship, enthusiasm, or devotion to a common cause (Organizational culture) Dr. Alaa Gamie  Behavioral Management theory The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to achieving organizational goals. Dr. Alaa Gamie  The work Of Mary Follett She concerned that Taylor ignored the human side of the organization - workers in analyzing their jobs to identify better ways to perform tasks or should even ask workers how they felt about their jobs - “authority should go with knowledge”  Self managed team and empowerment - “cross-functioning” Dr. Alaa Gamie Hawthorne study Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932. Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased. Dr. Alaa Gamie Hawthorne study Hawthorne effect  —seemed to suggest that workers’ attitudes toward their managers affect the level of workers’ performance The significant finding was that each manager’s personal behavior or leadership approach can affect performance. Dr. Alaa Gamie Hawthorne study Human relation movement  supervisors be behaviorally trained to manage subordinates in ways that enhance their cooperation and increase their productivity Dr. Alaa Gamie  Theory X and theory Y Douglas McGregor proposed the two different sets of assumptions about workers that affect manager’s behavior Theory X assumes the average worker is lazy, dislikes work and will do as little as possible. Workers have little ambition and wish to avoid responsibility Managers must closely supervise and control through reward and punishment. Ex: Henry Ford Dr. Alaa Gamie  Theory X and theory Y 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. Managers should create an organization to stimulate the workers. manager’s role is not to control employees but to provide support and advice, to make sure employees have the resources they need to perform their jobs, and to evaluate them on their ability to help the organization meet its goals. Ex: Henri Fayol, Google, AppleDr. Alaa Gamie Dr. Alaa Gamie  Management science theory Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services. Quantitative management — utilizes linear and nonlinear programming, modeling, simulation. —to help managers decide, for example, how much inventory to hold at different times of the year, where to locate a new factory, and how best to invest an organization’s financial capital. IT offers managers new and improved ways of handling information so they can make more accurate assessments of the situation and better decisions. Operations management —techniques used to analyze any aspect of the organization’s productionDr.system Alaa Gamie  Management science theory Total Quality Management (TQM) —focuses on analyzing input, conversion, and output activities to increase product quality.. through sophisticated software packages and computer-controlled production Management Information Systems (MIS) — provides information vital for effective decision making. All these subfields of management science, enhanced by sophisticated IT, provide tools and techniques that managers can use to help improve the quality of their decision making and increase efficiency and effectiveness. Dr. Alaa Gamie  Organizational environment theory How managers control the organization’s relationship with its external environment. Organizational environment  Set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources. Dr. Alaa Gamie  The open-system view Open System  A system that takes resources for its external environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers. Dr. Alaa Gamie The open-system view Dr. Alaa Gamie  The open-system view How the various parts of a system work together to promote efficiency and effectiveness. “The whole is greater than the sum of its parts” An organization performs at a higher level when its departments work together rather than separately. Synergy , the performance gains that result from the combined actions of individuals and departments, is possible only in an organized system (Cross-functional teams) Dr. Alaa Gamie  Contingency theory “There is no one best way to organize” The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates. Dr. Alaa Gamie Dr. Alaa Gamie  Types of structures Mechanistic Structure Authority is centralized at the top. Emphasis is on strict discipline and order Employees are closely monitored and managed, tasks and roles are clearly specified. Can be very efficient in a stable environment because it allows managers to obtain inputs at the lowest cost, giving an organization the most control over its conversion processes and enabling the most efficient production with smaller expenditures Ex: MacDonald’s Dr. Alaa Gamie  Types of structures Organic Structure Authority is decentralized throughout the organization. Encourage employees to take responsibilities and act quickly to pursue scare resources Departments are encouraged to take a cross-departmental or functional perspective Works best when environment is unstable and rapidly changing Organic structure is generally more expensive to operate because it requires that more managerial time, money, and effort be spent on coordination. Ex: Apple Dr. Alaa Gamie