Management and Organizations PDF

MANAGEMENT AND ORGANIZATIONS DEVELOPMENT OF MANAGEMENT IDEAS CLASSICAL MANAGEMENT IDEAS WEEK 2 Asst. Prof. Dr. Birol BAYSAK  MANAGEMENT AND ORGANIZATIONS SOURCE MATERIALS & RECOMMENDED READING Kocel, T., (2003). Isletme Yoneticiligi. Beta Publicat...

MANAGEMENT AND ORGANIZATIONS DEVELOPMENT OF MANAGEMENT IDEAS CLASSICAL MANAGEMENT IDEAS WEEK 2 Asst. Prof. Dr. Birol BAYSAK  MANAGEMENT AND ORGANIZATIONS SOURCE MATERIALS & RECOMMENDED READING Kocel, T., (2003). Isletme Yoneticiligi. Beta Publications. Simsek, M. S., & Celik, A. (2015). Yonetim ve organizasyon. Egitim Bookstore. Kast, F. E., & Rosenzweig, J. E. (1974). Organization and management: A systems approach. McGraw-Hill. Robbins, S. P., De Cenzo D. A., Coulter, M. (2016). Fundamentals of Management. Pearson Kadri MİRZE, Introduction to Business, Literatur Publishing, 2002. 2  LEARNING OBJECTIVES Summarize the development of management theory and the key functions of management today Summarize the four principles of Frederick Taylor’s scientific management theory Summarize the contributions of Frank and Lillian Gilbreth to scientific management Summarize Henri Fayol’s contributions to the field of management theory Summarize the key functions of management today 3  LEARNING OBJECTIVES THE EVOLUTION OF MANAGEMENT THOUGHT AND CLASSICAL MANAGEMENT THOUGHT Pre-Scientific Management Era Classical Management and Organization Theory Scientific Management Theory Administrative Management Theory Bureaucratic Theory of Management 4  Introduction The period when management began to be studied systematically is referred to as Classical Management Thought. The foundational approach of Classical Management Thought, known as Scientific Management, is said to have begun with F. W. Taylor's 1911 publication of The Principles of Scientific Management https://www.youtube.com/watch?v=6n9ESF JTnHs&ab_channel=CharlieChaplin 5  Introduction After Taylor, Henri Fayol made significant contributions in this field, viewing management from a top-management perspective. The management approach that he outlined with his general principles is known as Henri Fayol’s Management Process Approach/Principles of Management. In this approach, Fayol, similar to the Scientific Management Approach, focused on the principles of efficiency and rationality and aimed to develop principles related to all areas of management. 6  Introduction The third approach within the Classical Management Approaches is Max Weber’s Bureaucracy Approach, developed by the German sociologist Max Weber. In this approach, Weber proposed a management model based on rational foundations rather than personal ones, and this model is called bureaucracy. Weber argued that this type of organization, characterized by rational authority embedded in a formal structure with continuity, would be more efficient and better able to adapt to change. 7  Pre Scientific Era / Ancient Era The Ancient Era begins with the discovery of writing and the keeping of written records around 3500 BCE. With the accumulation of experimental and practical knowledge being transformed into written principles and rules, a standardized order began to emerge in social life. The first example of this is the transition of hunter-gatherer societies to agricultural life. 8  Pre Scientific Era / Ancient Era The discovery of writing enabled the transmission of practical experiences to future generations, thereby ensuring cultural continuity. The establishment of a settled order brought about centralized governance, which facilitated the organization of activities such as agriculture, trade, taxation, and land distribution through central administration. 9  Pre Scientific Era / Ancient Era The earliest examples that can be associated with organizational formation and management understanding in the Ancient Era began around 3500 BCE with the civilizations of Mesopotamia. City-states, which became centers of various commercial activities, were the first social organizations in history where written laws were observed (Chadwick, 2005). In the Ancient Era, the concept of management began with city- states. City-states were organizations centered around a small core, surrounded by a larger agricultural area, and led by a figure who controlled social, economic, political, legal, and cultural activities. 10  Pre Scientific Era / Ancient Era The most distinctive feature of the ancient organizational structure was the presence of a vertical social organization system (Vernus, 2013). Documents related to organizations and organizational management from the ancient period indicate a distant and uneasy relationship between the leader and subordinates, with a lack of trust in superior- subordinate relationships, yet a necessity to remain connected to one another. 11  Pre Scientific Era / Ancient Era Collective labor was used as tools of organization and power in projects such as the Egyptian pyramids and the Sumerians' underground irrigation systems, and it was planned, implemented, supervised, and even compensated. Bureaucracy was used in ancient civilizations to ensure hierarchy and social control. 12  Pre Scientific Era / Ancient Era Traces of division of labor and specialization can be observed. During this period, an organizational model was developed that established a certain division of labor based on individual differences and capacities, rewarded success, and punished failure, with the goal of ensuring that everyone involved in the organizational system would benefit (Wren, 2005). The Babylonian Civilization during the Hammurabi era carries the first traces of Weber’s ideal type of bureaucratic organization. 13  EVALUATION OF MANAGEMENT THEORIES CLASSICAL APPROACH Scientific Management Theory (Frederick Winslow Taylor) and Gilbreths (Frank and Lillian) Administrative Management Theory ( Henry Fayol) Bureaucratic Theory of Management (Max Weber) NEO-CLASSICAL Hawthorne Studies (Elton Mayo) X and Y Theories (Dauglas Mc Gregor) MODERN APPROACH System Approach (Organization-Environment Theory) Contingency Approach 14  Classical Theories of Management Scientific Management Theory This approach was proposed by Frederick Winslow Taylor and focuses on analyzing work processes and determining the most efficient methods to increase worker productivity. This approach aims to establish detailed methods for workers to use their time more efficiently (less input more output) while performing their jobs. https://www.youtube.com/watch?v=8PdmNbqtDdI&ab_channel =ryngoksu 15  Classical Theories of Management Administrative Management Theory This theory of classical management is propounded by Henri Fayol, a French Industrialist. This theory focuses on improving organizational performance by synchronizing all the internal elements of organizations Fayol argued that there are five basic functions of management, which are planning, organizing, directing, coordinating, and controlling. 16  Classical Theories of Management Bureaucratic Theory of Management (Weber) The bureaucratic theory of classical management states that an ideal organization has a hierarchal structure, clear rules, and regulations, and proper division of rules. It emphasizes that an organization should have clear rules and regulations that must be followed by every organizational member in order to achieve the desired goals. A German Socialist, Max Weber is the propounder of the bureaucratic theory of management. Weber is strictly in opposition to traditional emotional attachments in the workplace. He rather highlighted impersonal relationships in the workplace. 17  SCIENTIFIC MANAGEMENT THEORY Modern management began in the late 19th century. Organizations were seeking ways to better satisfy customer needs. Machinery was changing the way goods were produced. Managers had to increase the efficiency of the worker-task mix 18  SCIENTIFIC MANAGEMENT THEORY FREDERICK W. TAYLOR Just over one hundred years ago Frederick Taylor published Principles of Scientific Management, a work that forever changed the way organizations view their workers and their organization. At the time of Taylor’s publication, managers believed that workers were lazy and worked slowly and inefficiently in order to protect their jobs. Taylor identified a revolutionary solution The remedy for this inefficiency lies in systematic management, rather than in searching for some unusual or extraordinary man. https://www.youtube.com/watch?v=8PdmNbqtDdI 19  SCIENTIFIC MANAGEMENT THEORY FREDERICK W. TAYLOR Defined by Frederick Taylor, late 1800’s. The systematic study of the relationships between people and tasks to redesign the work for higher efficiency. Taylor aimed to reduce the time a worker spent on each task by optimizing the way the task was done. https://www.youtube.com/watch?v=8Pd mNbqtDdI&ab_channel=ryngoksu 20  SCIENTIFIC MANAGEMENT THEORY Frederick Taylor’s Scientific Management Theory Scientific management is a management theory that analyzes work flows to improve economic efficiency, especially labor productivity “Taylorism” is: The first form of scientific management Sometimes called the “classical perspective” Still observed for its influence but no longer practiced exclusively Taylor was concerned with reducing process time and worked with factory managers on scientific time studies 21  SCIENTIFIC MANAGEMENT THEORY Four Principles of Taylor’s Scientific Management 1. Look at each job or task scientifically to determine the “one best way” to perform the job. This is a change from the previous “rule of thumb” method where workers devised their own ways to do the job. 2. Hire the right workers for each job, and train them to work at maximum efficiency. 3. Monitor worker performance, and provide instruction and training when needed. 4. Divide the work between management and labor so that management can plan and train, and workers can execute the task efficiently. 22  SCIENTIFIC MANAGEMENT THEORY You might think that a century-old theory wouldn’t have any application in today’s fast-paced, technology-driven world. Example; organizational charts, performance evaluations, quality measurements and metrics, and sales and/or production goals. Pay per piece, use of appropriate tools for the job, assigning people according to the job, and using time effectively. The fundamental philosophy of scientific management is efficiency! A human being is seen as a data or machine. 23  SCIENTIFIC MANAGEMENT THEORY Practice Question ? What is the main focus of Frederick Winslow Taylor's scientific management approach? A) Empowering employees to make decisions B) Reducing costs by outsourcing labor C) Standardizing work processes for increased efficiency D) Encouraging creativity and innovation in the workplace 24  SCIENTIFIC MANAGEMENT THEORY Practice Question ? Who is considered the founder of scientific management? A) Max Weber B) Frederick Winslow Taylor C) Henri Fayol D) Peter Drucker E) Adam Smith 25  SCIENTIFIC MANAGEMENT THEORY Practice Question ? In summary, which of the following best describes Frederick Taylor’s theory that production and profits will be maximized by: a) Selecting and training management to enforce production quotas. b) Paying the workers “a fair wage for a fair day’s work.” c) Analyzing how to do the job, selecting the right person for the job and providing training, planning and management oversight. d) Encouraging employees to develop their own best way to perform a given job 26  Scientific Management Frank and his wife Lillian studied work to eliminate inefficient hand-and-body motions. The Gilbreths also experimented with the design and use of the proper tools and equipment for optimizing work performance. Also, as parents of 12 children, the Gilbreths ran their household using scientific management principles and techniques. 27  Scientific Management Frank is probably best known for his bricklaying experiments. By carefully analyzing the bricklayer’s job, he reduced the number of motions in laying exterior brick from 18 to about 5, and in laying interior brick from 18 to 2. Using Gilbreth’s techniques, a bricklayer was more productive and less exhausted at the end of the day. https://www.youtube.com/watch?v=lDg9REg kCQk&ab_channel=BodilyInteractive 28  SCIENTIFIC MANAGEMENT THEORY The Gilbreths used scientific insights to develop a study method based on the analysis of work motions They filmed the details of a worker’s activities while recording the time it took for them to complete those activities Philosophical divide between Taylor and the Gilbreths’ Taylor focused on reducing process time Gilbreths tried to make overall process more efficient by reducing the motions involved, and felt they were more concern for workers’ welfare then Taylor 29  How Today’s Managers Use Scientific Management Many of the guidelines and techniques Taylor and the Gilbreths devised for improving production efficiency are still used in organizations today. When managers analyze the basic work tasks that must be performed, use time-and-motion study to eliminate wasted motions, hire the best-qualified workers for a job, or design incentive systems based on output, they’re using the principles of scientific management. 30  ADMINISTRATIVE MANAGEMENT THEORY Henri Fayol Henri Fayol worked as a mining engineer and began his work on management structures after an event he perceived to be a failure of management structure. When a horse broke its leg and nobody at the mine had the authority to purchase a new one, the mine was shut down. Fayol’s book General and Industrial Management describes five duties of management and fourteen principles Fayol felt could guide management. 31  ADMINISTRATIVE MANAGEMENT THEORY Fayol’s Five Duties of Management Foresight: Create a plan of action for the future. Organization: Provide resources to implement the plan. Command: Select and lead the best workers through clear instructions and orders. Coordinate: Make sure the diverse efforts fit together through clear communication. Control: Verify whether things are going according to plan and make corrections where needed. 32  ADMINISTRATIVE MANAGEMENT THEORY Fayol’s 14 Principles Henri Fayol, developed a set of 14 principles: Division of Work: Assign each employee a task that they can become proficient at. Productivity increases as employees become more skilled, assured and efficient. Example: In a hospital, there are staff with different tasks such as doctors, nurses, technicians. Authority and Responsibility: The principle that managers have the authority to give orders and take responsibility. Example: A project manager can tell his team what to do and be responsible for the success or failure of the project. 33  ADMINISTRATIVE MANAGEMENT THEORY Fayol’s 14 Principles Henri Fayol, developed a set of 14 principles: Unity of Command: Employees should have only one boss. The principle that each employee is subordinate to only one manager. Example: An accountant reports only to the accounting manager and does not listen to instructions from another manager. Line of Authority-Scalar Chain: a clear chain from top to bottom of the firm. Employees should know where they stand in the organization's hierarchy and who to speak to within a chain of command. For example, in a company, the general manager may have the highest authority, and below it may be line managers, team leaders, and employees. In this case, the Line of Authority starts from the general manager and goes down Centralization: The principle of whether decision making will be done at the center or locally. Example: An international company can delegate authority to local managers for each country’s operations or direct them from the center. 34  ADMINISTRATIVE MANAGEMENT THEORY Practice Question ? Which one is an example of the Unity of Command principle? A) An accountant reports only to the accounting manager and does not listen to instructions from another manager. B) In a company, the general manager may have the highest authority, and below it may be line managers, team leaders, and employees. C) An international company can delegate authority to local managers for each country’s operations or direct them from the center. D) In a company where decisions are made locally instead of a decision- making center, each employee can receive instructions from multiple managers. 35  ADMINISTRATIVE MANAGEMENT THEORY Fayol’s 14 Principles Unity of Direction: The principle that managers act in accordance with a common goal. Example: Even if a company has different departments such as marketing, sales, production, etc., the company’s vision and mission are the same. Equity: Treat all employees fairly in justice and respect. Order: Each employee is put where they have the most value. (The right man in the right place) For example, if a person working in the accounting department of a company is sent to the sales department, both he and the company will suffer. Initiative: Encourage innovation. Discipline: Respectful employees needed. 36  ADMINISTRATIVE MANAGEMENT THEORY Fayol’s 14 Principles Remuneration of Personnel: The principle that employees receive fair and satisfactory wages according to their work. Example: There should be a reasonable difference between the wages of an engineer and a cleaner. Stability of Tenure: Long-term employment is important. General interest over individual interest: This indicates a company should work unitedly towards the interest of a company rather than personal interest. Esprit de corps: It is the responsibility of the management to motivate their employees and be supportive of each other regularly. Developing trust and mutual understanding will lead to a positive outcome and work environment. 37  BUREAUCRATIC MANAGEMENT MAX WEBER Seeks to create an organization that leads to both efficiency and effectiveness. Max Weber developed the concept of bureaucracy. A formal system of organization and administration to ensure effectiveness and efficiency. Weber developed the 6 principles in the next figure 38  General Administrative Theory Bureaucracy: a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. 39  General Administrative Theory 40  How Today’s Managers Use General Administrative Theory Several of our current management ideas and practices can be directly traced to the contributions of general administrative theory. For instance, the functional view of the manager’s job can be attributed to Fayol. His 14 principles serve as a frame of reference from which many current management concepts; such as managerial authority, centralized decision making, reporting to only one boss, and so forth; have evolved. 41  How Today’s Managers Use General Administrative Theory Weber’s bureaucracy was an attempt to formulate an ideal prototype for organizations. Although many characteristics of Weber’s bureaucracy are still evident in large organizations, his model isn’t popular today. Many managers feel that a bureaucratic structure hinders individual employees’ creativity and limits an organization’s ability to respond quickly to an increasingly dynamic environment. However, even in flexible organizations of creative professionals, such as Google, Samsung, General Electric, bureaucratic mechanisms are necessary to ensure that resources are used efficiently and effectively. 42 Thank you for your participation