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FAG1007 FUNDAMENTAL OF MANAGEMENT Attendance:  Topic 3 MANAGEMENT AND ITS EVOLUTION Learning Outcomes After studying this chapter, you should be able to: Define theory and its evolution Management theories Describe the classical management perspectives.  Introduction Curren...

FAG1007 FUNDAMENTAL OF MANAGEMENT Attendance:  Topic 3 MANAGEMENT AND ITS EVOLUTION Learning Outcomes After studying this chapter, you should be able to: Define theory and its evolution Management theories Describe the classical management perspectives.  Introduction Current management theories are the product of early and studies conducted by prominent pioneers in management studies Organizations are shaped by management theories. Consequently, these theories have evolved due to the different types of challenges and opportunities faced by organizations. Theory is the idea that is the starting point for making a case or investigating. Theories are developed through speculations which then set out to prove something (scientific or social findings, or any other important field of interests). Evolution refers to the act or process or going from being simple/basic to complex/advanced (change process) Why study management theories? Theories is a group of assumptions put forth to explain the relationship between 2 or more observable facts. Clancy (1989) call such perspectives ‘invisible power’ to emphasize several crucial uses of theories (unseen ways in which we approach our world) Theories provide a table focus for comprehending what we experience. We are able to communicate efficiently through theories and move to more complex relationship Theories challenge us to keep learning about our world Environmental Factors Affect Management Thoughts GLOBAL INFLUENCES Global influence is the POLITICAL INFLUENCES blending of economic, social, Political influence is when political, legal and TECHNOLOGICAL political institutions exert technological influences that INFLUENCES pressure on individuals and affect the operations of organizations. Technological influences organizations. come in the form of new tools, equipment and ECONOMIC INFLUENCES computer software and SOCIAL INFLUENCES provide organizations the Social influences are about Economic influences are opportunity to keep up with about the distribution of the changing throughs and the state-of-the-art patterns in people that resources, their availability operations and they can and their consumption affect their relationships post challenges as well. with other people and within a society. organizations.  Role Of The Industrial Revolution And Evolution Of Management Theories The Industrial Revolution (1760-1850) was a fundamental change in the way goods were produced, from using human labour to using machines. Major transformations took place in England and had contributed towards many sets of changes and four of them were: 1. The introduction of new technology- machines invented, reducing the need for human labour. 2. The use of metals, minerals and energy- the use of aluminium, coal, copper and iron and the use of water, steam, electricity, gas and oil evolved. 3. The concentration of workers and factories- rural to urban migration, emergence of the factory system of production and mass production of goods. 4. The new methods of transportation-ships, from wooden ships to iron ships to ships made of steel; automobiles and trains.  These needs and changes caused earlier management theorists to come up with means to optimize business profits through executing tasks effectively. The growth of management concepts was needed to guide the growth of industrial manufacturing in the United States and Europe. Pre-classical theorists like Robert Owen and Charles Babbage made some initial contributions that eventually led to the identification of management as a field of inquiry and practice. This then led to other perspectives of management, namely the classical perspective, the behavioural perspective, the quantitative perspective, the systems perspective and finally the contingency perspective. Classical Management Perspectives One of the first management perspectives is the classical management theory. It was developed during the Industrial Revolution period when problems related to factory systems began to appear as they started to replace the older traditional cottage industry. One of the problems was how to mass produce products. The foundation to this perspective was a belief that men at work acted in a rational manner and mainly were driven by economic concerns. As a result, this perspective was developed to seek the one best way of performing and managing tasks since workers are anticipated to think rationally of opportunities made available to them and must attempt to do whatever possible to achieve high monetary and personal gains. Chronological Development Of Management Theories Contingency perspective System perspective Quantitative perspective Behavioural perspective Classical perspective 2000 1875 1900 1960 1975 onward Classical perspectives of management theories consist of the following: 1. Scientific management 2. Administrative management 3. Bureaucratic management. 1. Scientific management Assume that people are primarily motivated by economics gains Focus on an individual’s or a worker’s productive and its main objective is to improve efficiency, especially labour productivity. Frederick Winslow Taylor (1856-1915) Assume that people are primarily motivated by economic gains. Focus is placed on an individual's or a worker's productivity and its main objective is to improve economic efficiency, especially labour productivity. He believed that improved management practices would lead to improved productivity. As a manager at Midvale, Taylor observed that the factory did not have systematic practices. Cooperation between the managers and workers were non-existent. Inefficiency and wastage were also constant occurrences. Poorly equipped and inadequately trained workers were typically left on their own to determine how to go about their jobs. Frank and Lillian Gilbreth (1878-1972) Frank – specialize in time and motion studies in performing work. Better working conditions by improving efficiency and productivity. Lillian – specialize in better working conditions by improving efficiency and productivity. She suggested that: Better working conditions for workers de g. lunch breaks and rest periods for workers were introduced). Improved efficiency and productivity of workers e.g. abolishment of hazardous working conditions and child labour). Limitations for Scientific Management Working harder or faster - exhaust whatever work available, causing downsizings. Taylor only focusing on the time - emphasis on enhanced productivity by extension profitability It led to some managers exploitation towards workers and customers - result, more workers join unions, thus reinforcing pattern of suspicion and mistrust that changed labor management.  Administrative management Administrative management grew out of the need for principles and guidelines for determining how to manage systematically and effectively. The theory focused on basic management functions and the managers tasks within an organization. In addition, this theory regarded management as a profession that could be taught to people. Limitations for administrative management are : It is more suited for uncomplicated and stable organizations while today’s organizations operated in more volatile environments. This theory viewed workers as economic tools who worked in organizations with the purpose of aiding these organizations in achieving their goals. Henri Fayol (1841-1945) Engineer – becoming successful administrator Believed that managers needed to understand the basic management functions in order to be successful managers He divide the manager’s job into 5 functions (planning, organizing, commanding, coordinating and controlling) for management to be success. He developed 14 general Principles Of Management 1. Work division - Specialization of labour is necessary for organizational success. 2. Authority - The right to give orders must be accompanied by responsibility. 3. Discipline - Obedience and respect help to ease the operation of an organization. 4. Unity of command - Each employee should receive orders from only one superior. 5. Unity of direction - All organization members should coordinate and focus their efforts in the same direction. 6. Subordination of individual interests to the general interest - Management's biggest challenge is resolving the conflict between personal and organizational interests in favour of an organization. 7. Remuneration - Employees should be fairly paid based on contribution. 8. Centralization - The relationship between centralization and decentralization is a matter of proportion; an optimum balance for each organization is crucial. 9. Scalar chain - Subordinates should adhere to an official chain of command unless superiors authorize to liase 10. Order - Both material things and people should be in their proper places. 11. Equity - Fairness owing to kindness and justice will generate dutiful and loyal service. 12. Stability and tenure of personnel - Employees require to learn their jobs. 13. Initiative - One of the greatest satisfactions is formulating and executing a plan. 14. Esprit de corps - Harmonious effort among individuals Attendance: THANK YOU