KM 7.2 Management Classical-Neoclassical

Knowledge Management ManagementTheories Classical&NeoclassicalApproaches
Lecture7.2
ColmanMcMahon colman.mcmahon@dit.ie
2011/12
Primary Texts
ModernManagement
Tiernan,Morely,Foley,2006(3rdEd)
APrimeronOrganisationalBehavior
Bowditch&Buono,2007(6thEd)
2011/12
Management: Etymology
TheverbmanagecomesfromtheItalianmaneggiare(tohandle especiallytools),whichinturnderivesfromtheLatinmanus(hand). TheFrenchwordmesnagement(latermnagement)influencedthe developmentinmeaningoftheEnglishwordmanagementinthe17thand 18thcenturies.[OxfordEnglishDictionary]
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The management process

1. Planning 2. Organising
Management
3. Staffing 5. Controlling
4. Leading
Source: Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006, p.4
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Key Management Functions
Planning
Theselectionofgoalsandoutliningthemeanstoachievethem
Organising
Structuring,arrangingandallocatingresourcesandactivities
Leading
Exertingformalorinformalinfluence,anddirectingtheactivitiesofothers
Controlling
Ensuringthatplansareimplementedasintendedandthatdeviationsarecorrected
Coordinating
Synchronisingandensuringthatevents/activitiesoccurasplanned
Staffing
Hiring,trainingandretainingqualified,responsibleandmotivatedpeople
Delegating
Assigningactivities,tasksandresponsibilitiestoindividuals/groups
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Management Roles
Thetaskorbehaviourperformedbymanagerstoachieveorganisation'sgoals:
Mintzberg's10ManagerialRoles: 1) Dissemenator 2) Disturbancehandler 3) Entrepreneur 4) Figurehead 5) Leader 6) Liaison 7) Monitor 8) Negotiator 9) Resourceallocator 10)Spokesperson
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So... how did we get to this point?
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Like most things in life... HISTORY

7,000 years history
Current State
Sociology of knowledge
Whyahistorylesson...?
Rationaleunderlyingthishistoricalperspectiveemergesfromanareaofstudywithin sociologyknownasthesociologyofknowledge
varioustheoriesandexplanationsoftheworldareinsomemeasuresocial products influencedbywidercultural,economic,politicalandtechnologicalforces
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"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011,
Management - a recent concept
Attemptstostudymanagementasadistinctandseparatefield...onlythepast 100years approx.veryrecentinhistoricterms Modernmanagementthoughtcanbeanalysedbyexaminingtheevolutionofsocietyasithas passedfrom:
Agrarian Industrial Postindustrial
Mustexaminethetransitionsthathaverevolutionisedoursociety:
fromaruralculturebasedonagricultureandthefamily culturebasedontechnology,industryandurbansettings.
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"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011,
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7000 : 100
5000 BC
4000 BC
3000 BC
2000 BC
1000 BC
1000 AD
2000 AD
1500
1900
Approaches to Management
AncientCivilisation(PreScientific)
Sumerian,Egyptian,Roman,AdamSmith
ClassicalApproach(Scientific)
Taylor,Gantt,theGilbreths,Weber,Fayol
BehaviouralApproach
Maslow,Munterberg,Mayo,Follett,McGregor,Bernard,Owen
Quantitative/ManagementScienceApproach
Statistical,mathematical,optimization
ContemporaryApproach
Contingency/SituationalTheorists SystemsTheorists
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Management Theories
Early Practices
Classical Approaches
1900 1910 1920
Neoclassical
1930 1940 1950 1960
Contemporary Approaches
1970 1980 1990 2000
1700 & 1800s Industrial Revolution
Administrative management
Quantitative management
Systems theory
Contingency theory
Current and future issues Organisational culture
Scientific management
Human Relations / Behavioural
Organisational behaviour
TQM
Structuralists (Bureaucracy)
This lecture's extent
Note: The year associated with each school of thought is the year that the approach began. The beginning of the next school of thought does note indicate the end of the previous one.
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Period Nature of Work Locus of work Nature of work
Pre-1800s Agrarian
1800s
1800-1930 Industrial Factory Physical: Manufacturing
1930-1960
1960s
1970-2010 Post-industrial Office Cyberspace Social: services Abstract: computer mediated
Farm/home Physical: agriculture/crafts
Key resource Management and organisation theory
Land Pre-scientific Classical
Machinery Neoclassical Modern / Contemporary
Knowledge
Human relations
Management Science
Behavioural
Systems Theory
Administrative Theory
Contingency Theory Organisational Behaviour
Assumptions about human nature
Economic person
Social person
Self-actualizing person
Complex person
Focus of managerial control
Patterns of physical movement and precise ways of performing work
Patterns of social interaction
Patterns of attention
Patterns of connectivity
Role of management
Control employee behaviour
Maintain employee social systems
Facilitate employee development
Ensure organisation -wide integration
Facilitate interorganisational collaboration
"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011, p.6.
Early Management thought
Attemptstounderstandanddevelopatheoryofmanagementcanbetracedbacktotheearliesteffortof mantoachievegoalsbyworkingingroups. Priortothebeginningofthe20thcentury,littlesystematicattentiongiventothedevelopmentofa bodyofknowledgeconcerningmanagementandorganization InancientGreek,Egyptian,andBiblicaltimes,therulingclassperceivedwork,commerce,andtradeas beingbeneaththeirdignity,somethingtobeaccomplishedbyslavesandlessthanrespectablecitizens Thus,2dominantthemescametocharacterizethesepreindustrialsocieties:
peoplehadarelativelyparochialviewoftherolethatmanagerscouldplayinorganizations, basicallyduetothestaticnatureofsociety(e.g.,individualswereboundtotheirsituationsin life;rulescouldnotbequestioned) theprevailingculturesheldanunfavourableviewofprofitmaking
Someattemptstodevelopmanagementpracticesduringthisera:
Socratesdiscussedtheuniversalityofmanagementprinciples Generallyspeaking,earlyeffortswerelargelysporadicand widelyscattered

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"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011
Sumerians of Mesopotamia
Earliestevidenceofthoughtsandideasinrelationto managementcanbetracedbacktotheSumeriansof Mesopotamia(5000BC)
(Mesopotamia:fromtwoGreekwords meaningthelandbetweentherivers,referring totheplacebetweentheTigrisandEuphrates rivers) TheareaofancientMesopotamiaestablished reservoirsandcanalstoirrigatefieldsofbarley, wheat,andpeas.Irrigationbeganasfarbackas 6000B.C.By5000B.C.Sumeriansconstructed complexirrigationnetworks,which,by3000 B.C.,leadthepopulationofSumertoincreaseto nearly100,000. TheearlySumeriancitiesheldlargebazaars, standingarmies,judicialcourts,organized religiousclasses,andscribeswhodeveloped writingandformaleducation.
Documentedtheformationoftheirgovernment, theirtaxgatheringsystemsandtheirconductof 2011/12 commerce
http://orthoscholar.wordpress.com/2011/04/29/notes-on-world-history-ancient-mesopotamia/
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Ancient Egyptians
Theclearestexampleofearlymanagementthoughtlies withtheancientEgyptians(40002000BC)whoused managerialskillstobuildvastpyramids(givingriseto thefirstrealnationstate)
100,000workers multitudeofskillsandtrades longtimeframe(30years)
Managershadtoplaninadvancethetypeandsizeof stonerequired,organiseavailablestaffandresources provideleadershipandfinally,controltheprocessto ensurethattheendresultmatchedtheoriginalplans. Egyptiansdevelopedmanagerialskillstoorganise humanlabourandfoundthebestwaytodelegatethe multitudeoftasksrequiredtocompletethe undertakingwasthroughhierarchy.
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Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006
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Ancient Greeks
Greekcivilisation(circa500300BC) developed:
anarmy anadministrationsystem separatecourts
Highlightedtheneedfordifferentmanagement functions EarlyGreekphilosophers,suchasSocrates differentiatedbetweenmanagementandother technicalfunctions
providefirstwrittenexampleofthe conceptthatmanagementwasaseparate specialistskill
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The Roman Empire
Romans(c300BC300AD)werefacedwiththe challengeofthemanagementandcontroloftheir conquestsoveravastarea Inordertoeffectivelymanagetheempire:
delegationofpower theScalarPrinciple(Fayol,slide60)of authority
eachpersonispartofonechainof commandthatextendsfromthetopto thebottomoftheorganisation
asystemofcommunicationbetweenthe outpostsandthecentralcommand
EnsuredRomanEmpirecouldmaintaincontrolover regionsduetoitstightorganisation
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Venice
EndoftheDarkAgescommercebeganto flourishintheMediterraneanregion (DarkAges:5th15thcenturiesAD,aperiodof intellectualdarknessinEuropefollowingthe collapseoftheRomanEmpire)
Venetianmercantilebusinessmenestablished someofthemostimportantmanagerialtoolsof today:
thelegalfoundationsofenterprise financialrecordswereformalisedinto doubleentrybookkeeping,first describedbyPacioli(1494) Machiavelli,authorofThePrince (1532),developedmanagementthought inrelationtothepoliticalorganisation
http://web.tiscalinet.it/scina/The%20maritime%20republics.htm
Prince(orleader)shouldbuilda cohesiveorganisation,bindinghis allieswithrewardsandmakingsure theyknewwhatwasexpectedofthem.

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Society - historic
Authoritywasstilllargelyviewedas restingwithtraditionalinstitutions
Productionwaspartofthesociallife withinthefamily,andthelabourforce composedoffarmersandcraftsmen
Cosimo (Medici) I the Great, founder of the Grand Duchy of Tuscany
Peasant Family Saying Grace Adriaen van Ostade, 1653
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The Enlightenment
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The Enlightenment & Society
Membersofsocietybegantoquestiontheexistingsocialorder,traditionalmeansofauthoritywere slowlyunderminedandeventuallygavewaytonewauthoritystructures&beliefs. Upuntilthe1700slargeorganisationsweremainlymilitary,politicalorreligious,notindustrial
Thesechangessetthestagefortheexaminationofmanagementpracticesandwaystoimprovethose activities.
arationalandlegalformoflegitimacyemerged
thoseinpoweraregrantedtheirauthoritybygeneralsetsofrulescreatedaspartof organizedhierarchies
individualshavepoweroverothersbasedonthepositionorroletheyholdinanorganization nottradition accessiontothisroleisbasedonwidelyknownandagreeduponrulesandpolicies,forminga rationalandlegal"basisforauthority.
Thisgradualshiftinthewayinwhichauthorityislegitimisedinsocietylaidthefoundationformodern formofcapitalism
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The Enlightenment & Production
Mostskilledworkwasperformedbycraft workers
workedalone usedsimpletools/methods clearlyidentifiablegoodssuchas watchesorclothing solddirectlytoindividualcustomers withinthelocalityofthecraft worker
Duringthe1700s,theUnitedStatesbegan tofocusmoreexplicitlyoneconomicsand profitability. Duringthe1800s,technological improvementsstartedtominimizetheneed foragriculturallabourandcreatedthebasis foracontinuoussystemof manufacturing...theIndustrialRevolution

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The Industrial Revolution
IndustrialRevolutionsignificantly changedpatternofofindustrialactivity
Watt'ssteamengine(1765) Arkwright'swaterframe(1769) Cartwright'spowerloom(1785)

Watt's steam engine
Transferredskillsfromthecraftworker tothemachine. Newmachinesrequiredonlyanunskilled workertoinsertrawmaterialsandextract thefinishedgood. Eventually,fullyautomatedmachines weredevelopedwhichnolongerrequired workerinput.
Arkwright's water frame
Suchdevelopmentsalsomadepossiblethe establishmentoflargescalefactories whichstoodinmarkedcontrasttothelocal natureofcraftwork.... 2011/12
Cartwright's power loom
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The modern way...
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Industrial Revolution - impacts
Asaresultoftheseadvances,productivity begantoincreasesteadilyandindustry startedtofeelthebenefitsofeconomiesof scale(averageunitcostofproducingan itemdecreasesasthevolumeofproduction increases)
Pricesfellandconsumptionrose
Developmentsintransportation& communicationfurtheropenedupnew marketsandpromotedsocialgrowth. Industryandcommerceboomed Organisationsbecameincreasinglylarge andcomplex
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newmanagementtechniques hadtobedevelopedtocopewith thechallengesandopportunities presentedbyindustrialisation
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The Industrial Revolution & Management Thought
AdamSmithWealthofNations(1776)
keytoprofitabilitylayinthe specialisationoflabour,whereby workersshouldbeassigneda specifictasktocomplete,ensuringa sharpdivisionoflabour
TheIndustrialRevolutionresultedinan upsurgeofsystematicthoughtonthekey managerialproblemspresentedby industrialisation,namely:
Production Efficiency Costsavings

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Management Emerges
A lasting product of the industrial revolution
Earlymanagerstendedoperateontrialanderrorbasis Rapidindustrialisationleadtomuchinterestanddebateonbestmanagementmethods Thisledtotheemergenceofmanagementasaformaldiscipline...distinctfromother technicalareas
TheevolutionofmanagementthoughtsincetheIndustrialRevolutioncanbedividedinto: 1) Classical(<1930s) 2) Modern(>1930s)
Manyapproachesweredevelopedsimultaneouslyandhavethereforeaffectedoneanother, butsomeoftheapproachedweredevelopedasadirectresponsetosomeoftheweaknesses ofearlierapproaches
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Management Theories
Early Practices
1900 1910 1920
Neoclassical
1930 1940 1950 1960
1970 1980 1990 2000
Systems theory
Contingency theory
TQM
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Pre-1800s Agrarian
1800s
1930-1960
1960s
Knowledge
Human relations
Management Science
Behavioural
Systems Theory
Economic person
Social person
Complex person
Role of management
Classical Management
TheIndustrialRevolution
initiatedbytheinventionsand technologicalimprovementsofthe eighteenthcentury ledtochangesnotonlyintheworkplace, butinnatureofsocietyaswell
Endofthe19thcenturyandintothebeginning ofthe20th
social,economic,political,and technologicalenvironment createdthenecessaryconditionsforthe systematicassessmentofmanagement
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Industrialization
Conceptually,industrializationoccursthrough2stages:
1) Developmentofanindustrialinfrastructure
Nationwidesystemsoftransportation(initially canalsandrailroads) Sourcesofrelativelycheappower(coal&oil) Technologicalinnovations(steamengine,etc.) Moderncommunicationsystems(thetelegraph) Networksoffinancialinstitutions(banks,stock exchange,nationalcurrency) Preparationofthelabourforce(education& technicaltraining)
2) Creationofacapitalgoodssector
Machineryandplantsthatallowmassproduction ofconsumergoods&services
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Eaton's stores and factories, Toronto
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Industrialization
Industrialisation:changedthenatureofwork fromfarmingandcraftstomorecomplexformsof manufacturingandworkingwithmachines TheClassicalschoolofmanagement:
influencedbythewidersocial,economic, andtechnologicalforcesthatbrought aboutthetransitionfromanagrariantoan industrialsociety believedhumannaturecharacterized peopleasrational,economicbeingswho wouldacttomaximizetheirownself interests
Emergingfocusonmanagementdealtwith: 1) howthesenewformsofindustrial organizationcouldbestructured 2) howworkcouldbedelegatedand coordinated 3) howpeoplewithintheseorganizational structurescouldbemotivated

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Management Theories
Early Practices
1900 1910 1920
Neoclassical
1930 1940 1950 1960
1970 1980 1990 2000
Systems theory
Contingency theory
TQM
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Scientific Management
Concernedwiththedevelopmentof one,singlebestwayofperforminga taskthroughtheapplicationof scientificmethods Focusedthemeasurementand structureofanorganisation'swork, itsclassification,quantification,and rationalization
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Frederick Taylor
Thebirthofscientificmanagementisattributed toFrederickTaylor(18651917) Taylor'sideasweredevelopedintotwobooks:
"ShopManagement"(1903) "PrinciplesofScientificManagement" (1911)
TaylortrainedintheUSAasanengineer. JoinedMidvaleSteelCompanywhereherose torankofchiefengineer FirsthandexperienceatMidvaleleadhimto concludethatbothproductivityandpaywere poor,operationswereinefficientandwasteful, andrelationsbetweenworkersand managementwereantagonistic
Frederick Taylor (1865-1917)
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Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006 "A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011
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(Taylor)
Sincepeoplewereviewedasrational, economicbeings,itwasreasonedthatthey wouldactontheirowninterests(and subsequentlytheorganizations)ifthey understoodcorrectworkprocedures andwererewardedforfollowingthem. AccordingtoTaylor''sprinciple,the objectiveofmanagementshouldbeto securethemaximumprosperityforthe employercoupledwiththemaximum prosperityofeachemployee(Taylor 1947). Prosperity=notonlymonetaryprofit,but alsodevelopmentofeachemployeesto thehighestlevelthehe/shewasable
Toachievethis,Tayloradvocatedthat scientificmethodsshouldbeusedto analysetheonebestway,scientifically,to dotasks. 2011/12 Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006
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Taylor - Pig Iron
1898TayloremployedasaconsultantbyBethlehem SteelWorksCompany Heappliedhisprincipledofscientificmanagement. twoprocesses:
1)handlingofpigironblockontorailroad cars 2)shovellingfuel(sand,limestone,coaland ironore)intoblastfurnaces.
Pigironhandlingwasaveryphysicaljobandthe managementatBethlehemfoundtheycoulddo nothingtoinduceworkerstoworkfaster Taylorstudiedthehandlersoveraperiodoftime concludedwithwithbetter,lesstiringworkmethods andfrequentbreaks,dailyoutputcouldbe quadrupled Institutedapieceratesystem:workerswouldbe paidextrawhentheproducedaboveastandard levelofoutput.Resultswerestaggering.
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Outputincreasedfrom12.5to47.5tons,butwages perdayincreasedfrom$1.15to$1.88perday.
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Taylor - Shovelling
Shovellingcompletedbygroupsof5060men underasingleforeman Timeandmotionstudieswereusedtoestablish singlebest:
wayofshovelling typeofshovelused
Resultofhisstudy
atoolroomwascreated
writteninstructionsgivenwhichtools wereneededforday
Pieceratesystemwasalsointroduced:
tonsshovelledperdayincreasedfrom 16to59 wagesincreasedfrom$1.15$1.88
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Taylor's 4 Principles
Taylor'sexperienceledhimtodevelop4mainprincipleswhichbecamethecornerstoneofscientific management: 1) Thedevelopmentofatruescienceofwork
Eachtaskbrokendownintobasicmovementswhichcouldbetimedtodetermineone bestwayofdoingthetask
2) Thescientificselectionanddevelopmentofworkers
Importanceofhiringandtrainingtheappropriateworkerforthejobwithregardto physicalandmentalaptitudes
3) Thecoordinationofworkersandmanagementinstudyingthescienceofwork
Cooperationtoensurethejob,plansandprinciplesallmatched(standardisedtools, instructioncards,etc.)
4) Thedivisionorworkbetweenmanagementandtheworkforce
Workersandthoseinmanagementshoulddothetasksforwhichtheywerebest equipped
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Other adopters
Principlesofscientificmanagementwidelyaccepted
HenryFord'sModelTfactory
oneofmostfamousexamples
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Henry Gantt
HenryGantt(18611919)
contemporaryofTaylor
Everyworkershouldbeentitledtoasetwagerate withbonusifoutputwasexceeded
Thiswouldallowsupervisorstospendmore timecoachinglessableworkers Leftmoreroomforinitiativeanddiscretion
Maincontributionisaproductionschedulingaid referredtoastheGanttchart
awayofplottingworkinprogressagainst thecalendar remainthebasisformodernscheduling techniques
OrganizingforWorkHenryGantt(1919)
publicdomain(freedownload) http://www.ganttchart.com/orgforwork.html
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Frank & Lillian Gilbreth
Frank(18681924)andwifeLillianGilbreth (18781972)
concernedwiththeeliminationof wasteinhisBostonconstruction company triedtoeliminateunnecessaryhand movements
LillianGlbrethcontinuedtheirwork
becameapioneeringindustrial psychologist herinterestslayinhumanfactorand scientificselection,trainingand developmentofworkers earlypioneerofhumanresource management servedasaprofessorofmanagement atPurdueUniversity

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Conclusion
Taylor'sScientificmanagementwaswidelyacceptedtheworldover
Thepieceratepaysystemgainedwideacceptanceduetothelinkbetweeneffortandreward. Scientificmanagementinstilledasenseofcooperationbetweenworkersandmanagement
Criticisms:
Linkbetweeneffortandmonetaryrewardassumesworkermotivatedsolelybymoney
workermotivationisfarmorecomplex:involvesjobrelatedsocialandpsychological factorswhichTaylorignored
Byadvocatingonesinglebestwayofcompletingtasks,workactivitiesfrequentlybecame routineandmachinelikewhichledtoboredomandapathyamongtheworkforce Tradeunionsstronglyopposedscientificmanagementtechniques
viewedpieceratesystemasareturnto"sweatshop"exploitationoflabourand frequentlyresultedinlayoffs
Ignoredtheroleofseniormanagementwithintheorganisation Failedtodealwiththerelationshipbetweentheorganisationandtheenvironment
competitionandregulation,especiallyatseniorleveloftheorganisation
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Final word
Criticismsaside... Taylorandscientificmanagementformallyestablishedmanagementasaspecialistarea
introducedscientificanalysistotheworkplace providedaframeworkforsolvingmanagerialproblemsofefficiencyandproductivity
Taylor(1947)saidhisaimwasatoshiftfocusfrom:
thedivisionofthesurplusastheallimportantmatter to
increasingthesizeofthesurplusinthefirstplace
(lumpoflabourfallacy)
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Early Practices
Management Theories
1900 1910 1920
Neoclassical
1930 1940 1950 1960
1970 1980 1990 2000
Systems theory
Contingency theory
TQM
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Structuralist School
TheStructuralistschoolusedaninductiveapproach(seenext2slides)initsstudy oforganizations
incontrasttothedeductiveapproachtakenbytheUniversalists
Membersofthisschoolexaminedmanydifferentorganizationsto empirically determinethecommonstructuralelementsthatcharacterizedhoworganizations actuallyoperate
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UR In O T DE
logic, 2 distinct methods of reasoning: deductive and inductive approaches
Deductive reasoning works from the "general" to the "specific"
This is also called a "top-down" approach.
Inductive reasoning works from observation(s) toward generalizations and theories
This is also called a bottom-up approach.
Theory Hypothesis Observation Confirmation
Theory Hypothesis Pattern Observation
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http://www.personal.kent.edu/~rmuhamma/Algorithms/MyAlgorithms/DeductInduct.htm
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UR O T DE
Examples Deductive vs. Inductive
An example of a deductive argument: 1) All men are mortal 2) Socrates is a man 3) Therefore, Socrates is mortal
The following is an example of probabilistic reasoning, which is a type of weak induction:
90% of humans are right-handed. Joe is a human. Therefore, Joe is probably righthanded.
Also,
All of the swans we have seen are white. All swans are white.
http://en.wikipedia.org/wiki/Deductive_reasoning
http://en.wikipedia.org/wiki/Inductive_reasoning
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Bureaucracy
Max Weber
MaxWeber(18641920)German sociologist
Wroteatturnoncenturybutonly translatedintoEnglishin1920s
Concentratedonhowtostructure organisationsforsuccess
(whereasTaylorwasfocusedon problemsofeffectivelymanagingan organisation)
Outlinedkeyelementsofanidealformof structurewhichhebelievedwould promoteefficiencyandcalledit "Bureaucracy"

Max Weber (1864-1920)
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Bureaucracy
6 Main Elements
1) DivisionofLabour
tasksdividedanddelegatedtospecialiststothatresponsibilityandauthoritywereclearly defined
2) Hierarchy
positionsorganisedinahierarchyofauthorityfromtoptobottom,withauthoritycentralisedat thetop
3) Selection
employeesrecruitedonthebasisoftechnicalqualificationsratherthanfavouritism
4) Careerorientation
managerswereviewedasprofessionalspursuingcareersratherthanhavingownershipinthe organisation
5) Formalisation
organisationswassubjecttoformalrulesandproceduresinrelationtoperformance
6) Impersonality
rulesandprocedureswereapplieduniformlytoallemployees
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Bureaucracy
Advantages
Divisionoflabourincreasedefficiencyandexpertiseduetocontinuedrepetitionofthetask. Allowedchainofcommandtodevelop Formalselectionmeantemployeeshiredonmeritandexpertiseandnoothercriteriawould beused Careerorientationensuredcareerprofessionalswouldgivetheorganisationadegreeof continuityinoperations Rulesandprocedurescontrolledemployeeperformance,increasingefficiency Impersonalityensuredruleswereappliedacrosstheboardwithoutbias
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Bureaucracy
Disadvantages
Extensiverulesandprocedurescansometimesbecomeendsinthemselves Promotesstabilitybutovertimecanbecomeveryrigid Rulesandproceduresareblindlyappliedtoallsituationseventhoughtheymaynotbethe mostappropriate Delegationofauthoritycanleadtosituationswherethegoalsoftheworkgroupbecome moreimportantthanorganisationalgoals,adverselyaffectingorganisationinthelongrun. Strictdivisionoflabourcanleadtoroutineandboringjobswhereworkersfeelapathetic anddemotivated. Theextensiverulescanleadtotheestablishmentamongworkersofaminimumacceptable standardaslaiddownbytherules,abovewhichworkerswillnotgo
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Bureaucracy
Conclusion
SuccessofWeber'sideasevidencedthroughouttheworld
ideasgainedwidespreadacceptanceassoonastranslatedin1920sand1930s.
Bureaucracyisbothrationalandefficient Becameextensivelyusedinlargescaleorganisations
allowedsuchorganisationstoperformthemanyroutineactivitiesnecessaryfor survival
Isparticularlypopularforpublicorganisationsandcivilservicetypeorganisations However,organisationsneedtoavoidbeingcontrolledbyit Enormousinfluence(alongwithTaylor)andisstillrelevantparticularlyfororganisations operatinginastableenvironment
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Early Practices
Management Theories
1900 1910 1920
Neoclassical
1930 1940 1950 1960
1970 1980 1990 2000
Systems theory
Contingency theory
TQM
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Focusonseniormanagementandthepolicy issuesfacedbythem Offer"universalprinciplesofmanagement" MostimportantcontributorwasHenriFayol (18411925),aFrenchminingengineer
realisedthatmanaginganenterprise requiredahostofskillsapartfrom technicalones.
In1916producedAdministraionIndustrielleet Generale(publishedinEnglish1930sGeneral andIndustrialManagement).
Establishedhimasthepioneerof Europeanmanagementintheearly 1900s Fayolcommonlyknownasthe"father ofmodernmanagement"

Henri Fayol (1841-192)
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Business activities 6 areas

Fayol
Fayolfocusedontheproblemsfacedbytheseniorexecutiveinmanaginganorganisation Concludedthatallbusinessactivitiescouldbedividedinto6essentialareas: 1) Technical
productionandmanufacturing buying,sellingandexchange fundingandusingcapital guardingproperty costingandstocktaking planning,organising,controlling

2) Commercial
3) Financial
4) Security
5) Accounting
6) Managerial
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Fayolbelievedthe6groupswereinterdependentandallneededtoberunningeffectivelyfor theorganisationtoprosper. InclusionofmanagementasaseparatebusinessactivitywithfivefunctionsgainedFayol widespreadrecognition

COMMERCIAL
Fayol's business activities
FINANCE
BUSINESS ACTIVITIES
TECHNICAL
ACCOUNTING
SECURITY
MANAGERIAL Planning Organisation Command Co-ordination Control

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14 basic principles of management

Fayol
Inadditiontothefivemanagementfunctions...
1) Division of labour: divide work into specialised tasks and assign responsibility to individuals 2) Authority: Equal delegation of responsibility and authority 3) Discipline: Establish clear expectations and penalties 4) Unity of command: Each employee should report to one supervisor 5) Unity of direction: Employee efforts should be guided to achieve organisational goals 6) Subordination of individual interest to general: Group interests should not precede the general interests of the group 7) Remuneration: Equitable rewards for work 8) Scalar chain: Lines of authority and communications from the highest to the lowest level 9) Order: Order tasks and material to support organisation direction 10) Stability of tenure: Minimise turnover to ensure loyalty of personnel 11) Equity: Treat employees fairly 12) Initiative: Employees should have freedom and discretion 13) Esprit de corps: Unity of interest between management and workers 14) Centralisation: Decide the importance of superior and subordinate roles
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Chester Barnard
ChesterBarnard(18861961)
"TheFunctionsoftheExecutive" (1938) Highlightedtheimportanceof:
themissionandpurposeofthe organisation hiringspecialists havinganeffective communicationssystem
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Mary Parker Follet
MaryParkerFollet(18681935)
"TheDynamicAdministration" (published1941,afterherdeath) emphasisedthechanging situationsfacedbymanagers pointedoutallmanagerswant flexibility distinguishedbetweenmotivation ofindividualsandgroups
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Lyndall Urwick
LyndallUrwick(18911983)
"ElementsofAdministration"(1947)
Influencedbythehumane managementpolicyhesawwhile workingat"Rowntree"(Quakers)
Emphasisedthesocialresponsibilityof mangerstowardemployees actedasatrailblazerformanyofthe HRpolicieswehavetoday 10principlesforgoodorganisation:
focusedonresponsibility jobdefinition spansofcontrol
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Conclusion
Hashadanenormousinfluenceonsuccessivegenerationsofmanagers Keycontributionsofadministrativemanagementarethatitrecognisedmanagementasa professionmuchlikemedicineorlawinwhichpeoplecouldbetrainedordeveloped Advocatesofadministrativemanagementofferedrecommendationsbasedontheirpersonal experienceofmanaginglargeorganisations Theyfocusedonseniorlevelmanagersandthepolicyissuesfacedbythem Finally...offereduniversalprinciplesofmanagement:
pbelievedtoworkinallsituations.
Maincriticism:
universalprinciplesdonottakeaccountofvariationsintheenvironment, technologyorpersonnel,whichmayrequirealternatesolutions
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Classical approaches Summary
Variousclassicalapproachestothestudyofmanagementlaidthefoundationsfor themanagementoforganisationsthatstillexisttoday Theapproachessoughttoprovidemanagerswith skillsandtechniquestoconfront theimportantissuesofthetime:productivityandefficiency Focusedonbasicmanagerialfunctions:coordinationofworkandsupervision Concentratedontheformalaspectsoftheorganisation Inhindsight,someoftheapproachestakea simplisticviewoftheneedsand interestsofworkersandfailtoaddresstheimportantissueoftheroleofthe externalenvironmentindeterminingsuccess. Themoremodernapproachestothestudyofmanagementattempttofurtherthese basicconceptsandovercomekeycriticisms....
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Classical approaches: a summary

Schoolofthought: Scientific management: 1898presentday Proponents: Contribution: Limitations: Simplisticviewof motivationand ignoredtheroleof theexternal environment
Taylor,Ganttandthe Applicationof Gilbreths scientificprinciples tothestudyofwork throughworkstudies andincentives
Bureaucracy: 1920spresentday
Weber
Bureaucratic structureemphasising efficiencyand stability
Ignoredthehuman elementandtherole oftheexternal environment Ignored environmental differences
Administrative management: 1916presentday
Fayol,Follet,Barnard Universalprinciples andUrwick ofmanagementfor seniorexecutives
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Pre-1800s Agrarian
1800s
1930-1960
1960s
Knowledge
Human relations
Management Science
Behavioural
Systems Theory
Economic person
Social person
Complex person
Role of management
Early Practices
Management Theories
1900 1910 1920
Neoclassical
1930 1940 1950 1960
1970 1980 1990 2000
Systems theory
Contingency theory
TQM
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Neoclassical Management
Human relations (behavioural)
Taylor'sproposedtheoryofScientificManagement,oftenmetwithantagonismandhostility.
Taylordefendedhisprinciplesonthebasisofamentalrevolutionthatwould (hopefully)takeplaceintheattitudesofmanagementandlabour Inessence,Taylorfeltthatbothsideswouldrecognizetheneedforcooperationand theimportanceofscientificinvestigationratherthanindividualjudgementasthe basisforstructuringworkassignments.
Critics,however,arguedthatwhilemanagementmightseektostandardizeskillsand methods,itcouldnotexpectperfectlystandard,emotionlessbehaviourfromitsemployees. Asearlyasthe1920s,anumberofsocialcriticsbegantopointoutthepotentiallyharmful effectsoftryingtostandardizepeopleaswellasjobs. AlthoughmanyofthebasictenetsofClassicalmanagementtheory(e.g.,formalstructure, divisionoflabor)werenotdirectlychallenged,criticismwasfocusedonthoseindividual managersandtheoristswhoappearedtotreatemployeesaslittlemorethanmere appendagestomachines

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A touch of this...
Charlie Chaplin Modern Times 1936
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Emergedinthe1920sand1930sfromaresearchstudythatbeganasascientificmanagement applicationtodeterminetheimpactofworkingconditionsonhumanperformance
endedupdiscoveringtheeffectofthehumanfactoronproductivity
Incontrasttopreviousapproaches...
concentratedonthehumansideofmanagement soughttounderstandhowpsychologicalandsocialfactorsinteractedwiththe workenvironmentininfluencingperformance builtontheideasandconceptsdevelopedbythepreviousthinkers,mostnotably GanttandtheGilbreths'scientificmanagement
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Recognitionthatworkershadsocialneedsled tonewsetofassumptionsabouthumannature
socialconsiderationswerenowseenas theprimemotivatorofbehaviourand workperformance(not$$) socialrelationshipsinworkwould compensateforthelossofintrinsicvalue andmeaningstrippedthroughincreasing mechanization
TwomainsourcesofNeoclassicaltheory: 1) HumanRelationsSchoolsociologists andsocialpsychologistsconcernedwith interactionandrelationswithingroups 2) BehavioralSchoolpsychologistswho focusedonindividualbehaviour

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Human relations
"The Hawthorne Studies"
Harvardresearchers:EltonMayoand FritzRoethlisberger Employedin1927bytheWesternElectric Companytostudytheeffectofphysical conditionsonworkerproductivityand efficiency
WesternElectric(nowAT&T Technologies)manufactured equipmentforthetelephoneindustry 19241932seriesofstudiescarried outcommonlyknownas"The HawthorneStudies"
Hawthorne Works (Tower) - Hawthorne, IL
Chronicledin"Managementandthe Worker"(1939) Oneofthemostimportantwatershedsin theevolutionofmanagementthought

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1) The Illuminating Experiments 1924-7
Human relations - "The Hawthorne Studies"
Experimentsconductedinseveraldepartmentsemploying femaleworkers Designedtodeterminehowtheleveloflightingaffected workeroutput(assumedthatbetterlightingwouldincrease output) Twogroupswereisolated
Lightlevelskeptconstantinoneroom Systematicallychangedinanother
Resultsshowedproductivityincreaseinbothgroups Researchersconcludednocauseandeffectbetweenilluminationandproductivity Increasewascausedbyfactworkerswereawareofbeingobserved PhenomenonwascalledtheHawthorneEffectwherebyworkersweremoreinfluencedby psychologicalfactors(observation)thanphysicalandlogicalfactors(illumination)
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2) Relay Assembly Room Experiments 1927-32
"The Hawthorne Studies"
RATRExperimentsdesignedtostudythe effectsofrestbreaks,workdaylength, refreshmentsandincentivepayments onproductivity
PhaseI
Sixskilledwomenwereselectedandplacedinatestroomwithouttheirnormalsupervisor
Anobserverwasplacedinthetestroomtorecordobservationsandtocreatea friendlyrelaxedatmosphere Variouschangeswereintroducedwiththewomen'sknowledgeandconsent
Result:outputincrease
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2) Relay Assembly Room Experiments 1927-32
PhaseII
Womenreturnedtotheiroriginalconditions(a48hour,6dayweeknorefreshments,no incentives,andnopauses)bywithdrawingtheconcessions...outputincreased!
Mayoconcludedtheunintentionallytheresearchteamhadchangedthehuman relationsoftheworkgroupunderobservation.
Theyfoundthetestroomwassignificantlydifferenttotheirregular departmentsin4mainways: 1) absenceofformalinthetestroommademoreopenand friendlyandworkersenjoyedbeingthecentreofattention 2) testroomwaslesscontrolledthanregularworkgroupsandthe womenactuallyparticipatedindecisionsaffectingthejob 3) groupformationresultedinacohesivegroupwhichwasloyal andcooperative 4) theattitudesofthewomenweredifferentastheynolongerfelt partofalargedepartmentsubjecttomanagerialcontrolbut feltinvolvedwhichaffectedtheirjobsatisfaction
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3) The Bank Wiring Observation Room Experiments 1931-32
TheBWORExperimentsinvolved14menwhowerekeptintheirnatural worksetting(i.e.nonexperimental)withanobserverbutwithnochanges intheirworkingconditions. Theaimofthestudywastoanalysethebehaviouroftheworkgroupandhowitfunctioned Observation&interviewingshowedthatthegrouphadwellestablishednorms(rulesof behaviour) Resultsshowedthatthemenrestrictedtheiroutput
Theyhadtheirownideaofwhatconstitutedafairdaysworkandemployees whoexceededtheagreeddailyoutputwerecalledratebustersandthoseproducing belowitwerecalledratechisellers Normswereenforcedbythegroupthroughsarcasmandbinging(group memberhitanotheronthearmtoshowdispleasure) Groupmemberswereunitedintheiroppositiontomanagementandwere indifferenttothefinancialincentivesofferedforhigheroutput.

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Conclusion
TheimportantcontributionmadebytheHawthorneStudieswasthat:
socialneedstookprecedenceovereconomicneedsandthatthe informalorganisationsexistedinadditiontotheformalorganisation informalworkgroupcouldexertcontroloveremployeebehaviour&performance
Mayoarguedthatmanagersshouldfocuson:
Motivation Communications Employeewelfare ...togainthecooperationofthegroupandpromotejobsatisfactionandnorms consistentwiththegoalsoftheorganisation
InrecentyearsdoubthasbeencastontheauthenticityofaHawthorneEffectwith researchersarguingthatwehavenaivelytakenonboardtheassumption,wheninreality theevidencedoesnotsupportitsexistence.
ThereisnodoubtthattheHawthorneStudiesplayedamonumentalroleinthedevelopment ofmanagerialthoughtbyvoicingconcernsabouttherolehumanbeingsplayinthe 2011/12 78 Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006 organisation.
Human relations
Abraham Maslow
Anotherkeycontributortothehumanrelations approachtomanagementwasAbrahamMaslow. Maslow(1943)wasconcernedwiththeissueofworker motivationandsoughttoexplainhowworkerscould bemotivatedtoachievehigherperformance. WillcoverMaslowinMotivationlectures
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Neoclassical approaches Summary
Neoclassicalperspectivearguesthatthereisadimensionoforganizationalreality thatisnotcontainedintheformal,structuralorientationoftheclassicalschoolthe behaviourofgroupsandindividualswithintheorganization .
Insightsoftheneoclassicaldoctrinethusaddedtoourunderstandingofthe complexityoforganizations
Criticizedfornotintegratingthevariedfacetsofhumanbehaviourthatoccurin organizationsand,liketheclassicalschool,forbeingshortsightedandincomplete Additionally,itsviewofrelevantenvironmentalforcesisquitenarrowbytodays standards
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Neoclassical approaches: a summary

Schoolofthought: Humanrelations: 1927presentday Proponents: Contribution: Limitations: Ignoredtheroleof theformalwork groupandworker rationality
Mayo,Roethlisberger Importanceofsocial andMaslow andpsychological factorsininfluencing workperformance
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Layers beginning to build up in 20th century
Management Thought
hod s
Adm inis trati on
met
ture
1900s
Scie ntifi c
1940
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Peo ple
Stru c
A lot to come...!
82
Next time...
Contemporary Approaches:
Quantitative management Organisational behaviour Systems theory Contingency theory Total Quality Management (TQM) Organisational culture Current and future issues
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Knowledge Management ManagementTheories Classical&NeoclassicalApproaches

TheverbmanagecomesfromtheItalianmaneggiare(tohandle especiallytools),whichinturnderivesfromtheLatinmanus(hand). TheFrenchwordmesnagement(latermnagement)influencedthe developmentinmeaningoftheEnglishwordmanagementinthe17thand 18thcenturies.[OxfordEnglishDictionary]

The management process

Key Management Functions

So... how did we get to this point?

Like most things in life... HISTORY

varioustheoriesandexplanationsoftheworldareinsomemeasuresocial products influencedbywidercultural,economic,politicalandtechnologicalforces

Management - a recent concept

Attemptstostudymanagementasadistinctandseparatefield...onlythepast 100years approx.veryrecentinhistoricterms Modernmanagementthoughtcanbeanalysedbyexaminingtheevolutionofsocietyasithas passedfrom:

Agrarian Industrial Postindustrial

1700 & 1800s Industrial Revolution

Current and future issues Organisational culture

Human Relations / Behavioural

This lecture's extent

Period Nature of Work Locus of work Nature of work

1800-1930 Industrial Factory Physical: Manufacturing

1970-2010 Post-industrial Office Cyberspace Social: services Abstract: computer mediated

Farm/home Physical: agriculture/crafts

Key resource Management and organisation theory

Land Pre-scientific Classical

Machinery Neoclassical Modern / Contemporary

Contingency Theory Organisational Behaviour

Assumptions about human nature

Focus of managerial control

Patterns of physical movement and precise ways of performing work

Patterns of social interaction

Control employee behaviour

Maintain employee social systems

Facilitate employee development

Ensure organisation -wide integration

Facilitate interorganisational collaboration

Early Management thought

peoplehadarelativelyparochialviewoftherolethatmanagerscouldplayinorganizations, basicallyduetothestaticnatureofsociety(e.g.,individualswereboundtotheirsituationsin life;rulescouldnotbequestioned) theprevailingculturesheldanunfavourableviewofprofitmaking

Socratesdiscussedtheuniversalityofmanagementprinciples Generallyspeaking,earlyeffortswerelargelysporadicand widelyscattered

Early Management thought

Earliestevidenceofthoughtsandideasinrelationto managementcanbetracedbacktotheSumeriansof Mesopotamia(5000BC)

Documentedtheformationoftheirgovernment, theirtaxgatheringsystemsandtheirconductof 2011/12 commerce

Early Management thought

Theclearestexampleofearlymanagementthoughtlies withtheancientEgyptians(40002000BC)whoused managerialskillstobuildvastpyramids(givingriseto thefirstrealnationstate)

100,000workers multitudeofskillsandtrades longtimeframe(30years)

Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

Early Management thought

anarmy anadministrationsystem separatecourts

Highlightedtheneedfordifferentmanagement functions EarlyGreekphilosophers,suchasSocrates differentiatedbetweenmanagementandother technicalfunctions

providefirstwrittenexampleofthe conceptthatmanagementwasaseparate specialistskill

Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

Early Management thought

The Roman Empire

Romans(c300BC300AD)werefacedwiththe challengeofthemanagementandcontroloftheir conquestsoveravastarea Inordertoeffectivelymanagetheempire:

delegationofpower theScalarPrinciple(Fayol,slide60)of authority

eachpersonispartofonechainof commandthatextendsfromthetopto thebottomoftheorganisation

Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

Early Management thought

EndoftheDarkAgescommercebeganto flourishintheMediterraneanregion (DarkAges:5th15thcenturiesAD,aperiodof intellectualdarknessinEuropefollowingthe collapseoftheRomanEmpire)

Venetianmercantilebusinessmenestablished someofthemostimportantmanagerialtoolsof today:

thelegalfoundationsofenterprise financialrecordswereformalisedinto doubleentrybookkeeping,first describedbyPacioli(1494) Machiavelli,authorofThePrince (1532),developedmanagementthought inrelationtothepoliticalorganisation

Prince(orleader)shouldbuilda cohesiveorganisation,bindinghis allieswithrewardsandmakingsure theyknewwhatwasexpectedofthem.

Productionwaspartofthesociallife withinthefamily,andthelabourforce composedoffarmersandcraftsmen

Cosimo (Medici) I the Great, founder of the Grand Duchy of Tuscany

Peasant Family Saying Grace Adriaen van Ostade, 1653

The Enlightenment & Society

Membersofsocietybegantoquestiontheexistingsocialorder,traditionalmeansofauthoritywere slowlyunderminedandeventuallygavewaytonewauthoritystructures&beliefs. Upuntilthe1700slargeorganisationsweremainlymilitary,politicalorreligious,notindustrial

individualshavepoweroverothersbasedonthepositionorroletheyholdinanorganization nottradition accessiontothisroleisbasedonwidelyknownandagreeduponrulesandpolicies,forminga rationalandlegal"basisforauthority.