Session 3 - Evolution of Management Thought - Part 01.pptx

1 Evolution of Management Thought MGT 1131_Management Process Batch 24.1 Ms. Aushadharie Kaushalya Ms. Dilki Hansika NSBM Green University - Department of Management  Identify the key contributo...

1 Evolution of Management Thought MGT 1131_Management Process Batch 24.1 Ms. Aushadharie Kaushalya Ms. Dilki Hansika NSBM Green University - Department of Management  Identify the key contributors At the end of the session, the IDENTIF to the development of students are expected to; Y management thought. DESCRI Describe and evaluate BE AND different approaches/schools EVALUA of management thought. TE Discuss the relevance of different approaches/schools DISCUS of management thought in S the present context of management.  What is Management Theory? A management theory is a systematic statement ,based on observations, of how management process might best occur, given stated underlying principles. There is no single universally accepted and practiced management theory, instead there are many different Management approaches. Management principles are statements of fundamental truth which provide guidelines for managerial decision-making and action. The principles are derived on the basis of observation and analysis of experimental studies.  Management Theory 2016 2019 System Observat Managem Underli atic ion ent ned Statem Based Process Principl Nature/ent Features of Management Principles es Evolutionary, Dynamic nature of principles Limited application Concentration of human behavior Relativity, Relative principles of management Flexibility Universality  Evolution of Management Infographic Style Theory 1. CLASSICAL APPROACH Scientific Management Theory Administrative Management Theory Bureaucratic Management theory 2. BEHAVIOURAL APPROACH 3. HUMAN RELATIONS MOVEMENT 4. SYSTEMS APPROACH 5. SITUATIONAL/CONTINGENCY APPROACH  1.Classical Approach (1800 – 1900’s) Classical approach to management stresses the manager’s role in a formal hierarchy of authority and focuses on the tasks, machines, and systems needed to accomplish the task efficiently. Following major managerial contributions can be discussed under the classical approach. Classical Approach Administrativ Scientific e Bureaucratic Management Management Theory Theory Theory  1.Classical Approach a) Scientific Management Theory This theory focuses on the improvement of operational efficiencies through the systematic and scientific study of work methods, tools, and performance standards. It’s is believed that there is always a best standardized method of work for which the workers can be trained scientifically. Focuses on the efficiency of a task at a micro level - looked and focused on the tasks of the organization, to make sure the tasks are performed in an efficient manner. F. W. Taylor Frank Gilbreth Lillian Gilbreth Henry Gantt (1856-1915) (1868-1924) (1878-1972) (1861-1919)  1.1 Classical Approach - Scientific Management Theory Reasons for Labour Inefficiency and Low Productivity in Organizations Existed in late 19th and Early 20th Century Soldiering: The systematic slowdown of work by laborers beyond the natural tendency of human to “take it easy and work at a slow, easy gait”. Rule of Thumb: Conventional methods of work brought from experience and generations were applied, without due concern on their efficiency. Lack of concern for working conditions, Work methods, better use of tools and equipment, motivation of employees.  1.1 Classical Approach - Scientific Management Theory The Assumptions of Scientific Management Economic rational man-Work is just a mean for economic needs of the employees and they work merely for monetary rewards. One best method of work-It is implied by the search for a “science” that there is a “one best method of work” for a given job. Workers have the potential of doing any work prescribed by the science- Physiological and psychological limitations of the workers do not apply for the development of a “science” for work.  1.1 Classical Approach - Scientific Management Theory Principles of Scientific Management Develop a standard method or “science” for performing each job to replace old rule of thumb. Scientifically select employees and train them to do the job as described in the “science”. Supervise employees to make sure they follow the prescribed methods for performing their jobs. Tie the work performance of employees with their economic rewards.  1.2 Classical b) Administrative Management Approach Theory Administrative Management theory focuses on the improvement of productivity of the entire organization, at a holistic, Macro level. The difference between Scientific Management school and Administrative school is that former concentrated on the improvement of efficiency of micro work elements mainly in industrial organizations, while latter’s focus was on the improvement of efficiency of entire organization. Fayol’s Three Henri Fayol Aspects of (1841-1925) Management Key Contributor to the The Activities The Functions The Principles Administrative Management of an of of Theory Organization Management Management  1.2 Classical Approach - Administrative Management Theory a. The Activities of an Organization 1. Technical activities (Production, Manufacturing) 2. Commercial activities (Buying and selling) 3. Financial activities (Search for and best use of capital) 4. Security activities (Safeguarding property and people) 5. Accounting activities (Recording financial information) 6. Managerial activities (Planning, organizing, commanding ,coordinating and controlling)  1.2 Classical Approach - Administrative Management Theory b. The Functions of A major contribution is Management that Fayol devised the “functional definition of management”, which states that management is “to forecast (to plan), to organize, to command, to co-ordinate and to control.. 1. Plan: Planning is looking ahead. According to Fayol, drawing up a good plan of action is the hardest of the five functions of management. 2. Organize: The organizational structure with a good division of functions and tasks is of crucial importance. 3. Command: Return from all employees will be optimized if they are given concrete instructions with respect to the activities that must be carried out by them. 4. Co-ordinate: When all activities are harmonized, the organization will function better. 5. Control: By verifying whether everything is going according to plan, the  1.2 Classical Approach - Administrative Management Theory c. Fayol’s 14 Principles of 1. Division of Management 8. Authority Labour 2. Discipline 9. Unity of Command 10. Subordination of 3. Unity of Direction Individual Interest to the Common Goal 4. Remuneration 11. Centralization 5. The Hierarchy 12. Order 6. Equity 13. Stability of Staff 7. Initiative 14. Esprit de Corps  1.2 Classical Approach - Administrative Management Theory c. Fayol’s 14 Principles of 1. Management Division of labor: The more people specialize , the more efficiently they can perform their work. 2. Authority: Formal authority gives managers right to command. 3. Discipline: Members in an organization need to respect the rules that govern the organization. 4. Unity of command: Each employee must receive instructions from only one boss. 5. Unity of direction: Only one manager using one plan should direct those operations within the organization that have the same objective. 6. Remuneration: Compensation for work done should be fair to both employees  1.2 Classical Approach - Administrative Management Theory c. Fayol’s 14 Principles of Management 8. Scalar chain : There should be a clear line in thecont… area of authority (from top to bottom and all managers at all levels). 9. Order: Materials and people should be in the right place at the right time. People should be in right positions or jobs. 10. Equity: Managers should be fair to their subordinates. 11. Stability of staff: Management strives to minimize employee turnover and to have the right staff in the right place. 12. Subordination of individual interest to the common goal: The interests of employees should not take precedence over the interest of the organization as a whole. 13. Initiative: Employees should be allowed to express new ideas. 14. Esprit de corps :Promoting team spirit give the organization a sense of unity.  1.3 Classical c) Bureaucratic Management Approach Theory This theory stressed the need for a strictly defined hierarchy governed by clearly defined rules and regulations and line of authority in an organization. Managers do not like the word “bureaucracy” as it brings to mind frustration and waste. But bureaucracy would allow for orderly and systematic management of large groups of people. In the modern world it is not used much as it creates frustration, fear and takes theMax employee Weber creativity away. (1864-1920) Key Contributor to the Bureaucratic Management Theory  1.3 Classical Approach - Bureaucratic Management Theory Characteristics of a Bureaucratic Organization Positions arranged in a Clearly defined authority hierarchy Selection based on Division of labour technical qualifications A set of impersonal and Strict adherence to a clear logical rules and routine chain of command