Week 03 Management History PDF

WEEK 03 MANAGEMENT HISTORY Lecture Outline ❑Lecture Learning Objectives ❑Lecture Delivery ❑Post-Class Readings 1 MANAGEMENT HISTORY CHAPTER 2 2 LEARNING OBJECTIVES ✓ To describe some early ma...

WEEK 03 MANAGEMENT HISTORY Lecture Outline ❑Lecture Learning Objectives ❑Lecture Delivery ❑Post-Class Readings 1 MANAGEMENT HISTORY CHAPTER 2 2 LEARNING OBJECTIVES ✓ To describe some early management examples. ✓ To explain the various theories 3 MANAGEMENT HISTORY 4 EARLY MANAGEMENT Management is as old as human civilization when people started living together in groups. Every human group requires management, and the history of human being is full of organizational and behavioral activities because human being is the ‘social animal’. For thousands of years, organized endeavors directed by people responsible for planning, organizing, leading, and controlling activities have existed. 5 EARLY MANAGEMENT - EXAMPLES The Egyptian Pyramid The City of Venice The Great Wall of China 6  Wonder how the management concept was applicable to ancient times! 1. Who told each worker what to do? 2. Who ensured that there would be enough stones at the site to keep EARLY MANAGEMENT - workers busy? EXAMPLE 7  EARLY MANAGEMENT - EXAMPLE The answer is: Manager. But the question is Why? 8 EARLY MANAGEMENT Someone had to: ✓ plan what was to be done; ✓ organize people and materials to do it; ✓ make sure those workers got the work done, and ✓ impose some controls to ensure that everything was done as planned. 9 HISTORICAL BACKGROUND 10  ADAM SMITH In 1776, Adam Smith published The Wealth of Nations. In his book, Smith argued the economic advantages that organizations and society would gain from the division of labor (or job specialization). Division of Labor - breaking down jobs into narrow and repetitive tasks. The Pin industry example. 11  ADAM SMITH Smith concluded that division of labor increased productivity by: ✓ increasing each worker’s skill and dexterity; ✓ saving time lost in changing tasks, and ✓ creating laborsaving inventions and machinery. Job specialization continues to be popular. 12 INDUSTRIAL REVOLUTION 13 INDUSTRIAL REVOLUTION In the late 18th century, machine power was substituted for human power – A point in history named as Industrial Revolution. It became more economical to manufacture goods in factories rather than at home. But who was to look after these large efficient factories? 14  That someone was ‘Manager’. Managers were needed to: ✓ forecast demand; ✓ ensure that enough material was on hand to make products; ✓ assign tasks to people; ✓ direct daily activities, and so INDUSTRIAL REVOLUTION forth. 15 MAJOR APPROACHES TO MANAGEMENT THEORY 16 CLASSICAL APPROACH The formal study of management didn’t begin until early in the twentieth century. These first studies of management are often called the ‘Classical Approach’. The Classical Approach emphasized rationality and making organizations and workers as efficient as possible. 17 CLASSICAL APPROACH Theory Name Significant Contributors Frederick Winslow Taylor Scientific Management Frank and Theory Lillian Gilbreth 18 CLASSICAL APPROACH Theory Name Significant Contributors Henri Fayol General Administrative Theory Max Weber 19  Fredrick Winslow Taylor The “father” of scientific management. Published Principles of Scientific Management (1911) SCIENTIFIC MANAGEMENT 20 SCIENTIFIC MANAGEMENT THEORY ❑Using scientific methods to define the “one best way” for a job to be done: Putting the right person on the job with the correct tools and equipment. Having a standardized method of doing the job. Providing an economic incentive to the worker. 21  TAYLOR’S SCIENTIFIC MANAGEMENT PRINCIPLES Principle Principle Description # 1 Reduction rule of Develop a science for each element of an individual’s thumb with work, which will replace the old rule-of-thumb method science which is just accurate guide based on experience and practice rather than theory. 2 Harmony in Scientifically select and then train, teach, and develop the group action worker. 3 Cooperation Heartily cooperate with the workers so as to ensure that all between work is done in accordance with the principles of the management science that has been developed. and worker 4 Development of Divide work and responsibility almost equally between workers through management and workers. Management takes over all Scientific work for which it is better fitted than the workers. selection and training 22 MAJOR APPROACHES TO MANAGEMENT THEORY 23  SCIENTIFIC MANAGEMENT Frank and Lillian Gilbreth Focused on increasing worker productivity through the reduction of wasted motion. Developed the microchronometer to time worker motions and optimize work performance. 24 SCIENTIFIC MANAGEMENT How Do Today’s Managers Use Scientific Management? Use time and motion studies to increase productivity; Hire the best qualified employees; Design incentive systems based on output. 25 GENERAL ADMINISTRATIVE THEORY It offered the perspective of entire organization. It described what managers do and what constituted good management practice. The two most prominent theorists behind the general administrative approach were: 1. Henri Fayol 2. Max Weber 26  Henri Fayol Often called ‘The Father of Modern Management’. He offered a Management Point-of-View to look at the problems of GENERAL ADMINISTRATIVE managing. THEORY 27  Henri Fayol Believed that the practice of management was distinct from other organizational functions. Developed principles of management that applied to all GENERAL ADMINISTRATIVE organizational situations. THEORY 28  In addition to his 5 management functions, Fayol also developed 14 principles that are still used today. GENERAL ADMINISTRATIVE THEORY 29 FAYOL’S 14 PRINCIPLES OF MANAGEMENT 1. Division of work; 7. Remuneration; 2. Authority; 8. Centralization; 3. Discipline; 9. Scalar chain; 4. Unity of command; 10. Order; 5. Unity of direction; 11. Equity; 6. Subordination of 12. Stability of tenure of individual interests to personnel; the general interest; 13. Initiative; 14. Esprit de corps. 30 31  Max Weber Developed a theory of authority based on an ideal type of organization (bureaucracy). Emphasized rationality, predictability, impersonality, technical GENERAL competence, and ADMINISTRATIVE authoritarianism. THEORY 32 WEBER’S BUREAUCRACY 33 MAJOR APPROACHES TO MANAGEMENT THEORY 34 QUANTITATIVE APPROACH TO MANAGEMENT Also called operations research or management science. Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems. Focuses on improving managerial decision making by applying: Statistics, optimization models, information models, and computer simulations. Quantitative techniques are also frequently used in total quality management. 35 TOTAL QUALITY MANAGEMENT (TQM) TQM is a management philosophy devoted to continual improvement and responding to customer needs and expectations. Continual improvement isn’t possible without accurate measurements, which require statistical techniques that measure every critical variable in the organization’s work processes. The term customer includes anyone who interacts with the organization’s product or services internally or externally. 36 WHAT IS QUALITY MANAGEMENT? Intense focus on the customer; Concern for continual improvement; Process-focused; Improvement in the quality of everything; Accurate measurement; Empowerment of employees. 37 MAJOR APPROACHES TO MANAGEMENT THEORY 38 BEHAVIORAL APPROACH TO MANAGEMENT Managers get things done by working with people. This explains why some writers have chosen to look at management by focusing on the organization’s people. Here emerges a field named ‘Organizational Behavior’. 39 UNDERSTANDING ORGANIZATIONAL BEHAVIOR The study of the actions of people at work; people are the most important asset of an organization. Much of what managers do today when managing people - motivating, leading, building trust, working with a team, managing conflict, and so forth has come out of OB research. 40 EARLY ADVOCATES OF OB 41  A series of productivity experiments conducted at Western Electric from 1924 to 1932. Elton Mayo & THE HAWTHORNE STUDIES associates. 42  Experimental findings Productivity unexpectedly increased under imposed adverse working conditions. The effect of THE HAWTHORNE incentive plans was STUDIES less than expected. 43  THE HAWTHORNE STUDIES Research conclusion Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives. 44 MAJOR APPROACHES TO MANAGEMENT THEORY 45 CONTEMPORARY APPROACH TO MANAGEMENT Most of the earlier approaches focused on managers’ concerns inside the organization. Starting in the 1960s, management researchers began to look at what was happening in the external environment outside the boundaries of the organization. There are two contemporary management perspectives 1. Systems theory; 2. Contingency theory. 46 SYSTEMS THEORY Systems theory is a basic theory in the physical sciences but had never been applied to organized human efforts. It wasn’t until the 1960s that management researchers began to look more carefully at systems theory and how it related to organizations. 47  The System A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. THE SYSTEMS APPROACH 48 BASIC TYPES OF SYSTEMS Closed systems Are not influenced by and do not interact with their environment (all system input and output is internal). Open systems Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments. 49 THE ORGANIZATION AS AN OPEN SYSTEM 50 IMPLICATIONS OF THE SYSTEMS APPROACH Coordination of the organization’s parts is essential for proper functioning of the entire organization. Decisions and actions taken in one area of the organization will have an effect in other areas of the organization. Organizations are not self-contained and, therefore, must adapt to changes in their external environment. 51  CONTINGENCY APPROACH Also sometimes called the situational approach. There is no one universally applicable set of management principles (rules) by which to manage organizations. Organizations are individually different, face different situations (contingency variables), and require different ways of managing. 52  Organization size As size increases, so do the problems of coordination. Routineness of task technology Routine technologies require organizational structures, leadership styles, and control systems that differ from those POPULAR CONTINGENCY required by customized or non-routine technologies. VARIABLES 53  Environmental uncertainty What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment. Individual differences Individuals differ in terms of their desire for growth, autonomy, tolerance of POPULAR CONTINGENCY ambiguity, and VARIABLES expectations. 54 55 MANAGEMENT HISTORY 56