The Evolution of Management Thought

The Evolution of Management Theories for Organization

Classical Approach

Classical Approach

Forms the foundation for the field of management

The schools for management thoughts are:
Scientific Management Administrative Theory Bureaucratic Management

CLASSICAL APPROACH
1. 2. SCIENTIFIC MANAGEMENT-F.W. TAYLOR Piece rate incentive system Time and motion study ADMINISTRATIVE THEORY- HENRY FAYOL Technical Commercial Financial Security Accounting managerial

CLASSICAL APPROACH
3. BUREAUCRATIC MANAGEMENT- MAX WEBER Work specialization and division of labor Abstract rules and regulations Impersonality of managers Hierarchy of organization structure

Scientific Management Theory

Taylors Theory of Scientific Management

Taylors Theory of Scientific Management

Frederick W Taylor (1856-1915)
The Father of Scientific Management Maximize worker capacity and profits PROBLEM: Get employees to work at their maximum capacity PRIMARY FOCUS: TASKS
http://www.northstar.k12.ak.us/schools/ryn/projects/inventors/taylor/taylor.ht ml

Systematic Soldiering
Deliberately working slowly as to avoid expanding more effort than deemed necessary Reasons
Reduction in workforce due to decreased need Piecework system of remuneration - raise production requirements without increasing pay Rule of thumb training methods - inefficient

Taylors Theory of Scientific Management

Elements of Scientific Management
Scientific design of every aspect of every task
Time and Motion Studies

Careful selection and training of every task Proper remuneration for fast and high-quality work
Maximize output - increase pay

Equal division of work and responsibility between worker and manager

Underlying Themes
Managers are intelligent; workers are and should be ignorant Provide opportunities for workers to achieve greater financial rewards Workers are motivated almost solely by wages Maximum effort = Higher wages Manager is responsible for planning, training, and evaluating

Taylors Theory of Scientific Management

Application in the Modern Workplace Assembly Line Plants as Prototypical Examples Prisoners of Taylorism System of Remuneration (quotas - commission) Re-Design - Reengineering Benchmarking Data are used to refine, improve, change, modify, and eliminate organizational processes Lean Manufacturing

Administrative Management Theory

Administrative Management Theory

Administrative Management The study of how to create an organizational structure that leads to high efficiency and effectiveness.

Fayols Administrative Theory

Fayols Administrative Theory

Henri Fayol (1841-1925)
General and Industrial Management Principles and Elements of Management - how managers should accomplish their managerial duties PRIMARY FOCUS: Management (Functions of Administration) More Respect for Worker than Taylor
Workers are motivated by more than money Equity in worker treatment

More PRESCRIPTIVE http://www.lib.uwo.ca/business/fayol.html

Fayols Administrative Theory

Five Elements of Management -- Managerial Objectives Planning Organizing Command Coordination Control Keep machine functioning effectively and efficiently Replace quickly and efficiently any part or process that did not contribute to the objectives

Fayols Administrative Theory

Fourteen Principles of Management (Tools for Accomplishing Objectives)
Division of work - limited set of tasks Authority and Responsibility - right to give orders Discipline - agreements and sanctions Unity of Command - only one supervisor Unity of Direction - one manager per set of activities Subordination of Individual Interest to General Interest Remuneration of Personnel - fair price for services Centralization - reduce importance of subordinates role Scalar Chain - Fayols bridge Order - effective and efficient operations Equity - kindliness and justice Stability of Tenure of Personnel - sufficient time for familiarity Initiative - managers should rely on workers initiative Esprit de corps - union is strength loyal members

Fayols Administrative Theory

Application in the Modern Workplace Fayols elements of management are recognized as the main objectives of modern managers Planning - more participatory Organizing - human relationships and communication Especially applicable for large organizations (military)

Bureaucratic Management Theory

Max Webers Theory of Bureaucracy

Webers Theory of Bureaucracy

Max Weber (1864-1920)
German Sociologist Principles and Elements of Management describe an ideal or pure form of organizational structure (general policy and specific commands PRIMARY FOCUS: Organizational Structure Worker should respect the right of managers to direct activities dictated by organizational rules and procedures More DESCRIPTIVE

Webers Theory of Bureaucracy

Max Weber ( 1864-1920) German sociologist He has given the bureaucratic model. He developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness. It is the most important means of controlling over human beings.

Webers Principles of Bureaucracy

Webers Principles of Bureaucracy

:Hierarchy of authority: Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.

In a bureaucracy, a managers formal authority derives from the position he

or she holds in the organization. Division of labour : There should be a division of labor based upon competence and functional specialization

Webers Principles of Bureaucracy

Impersonality: People should occupy positions because of their performance, not because of their social standing or personal contacts. Specified system of task and responsibility:

The extent of each positions formal authority and task responsibilities and its relationship to other positions should be clearly specified.

Webers Principles of Bureaucracy

Written rules of conduct Managers must create a well-defined system of rules, standard operating procedures, and norms so they so that they can effectively control behavior .

Rules, SOPs and Norms

Rules formal written instructions that specify actions to be taken under different circumstances to achieve specific goals Standard Operating Procedures (SOPs) specific sets of written instructions about how to perform a certain aspect of a task

Norms unwritten, informal codes of conduct that prescribe how people should act in particular situations

Advantages and disadvantages

Advantages
No confliction among job duties Promotion is based on experience and merits. Employees are bound to follow rules and management process becomes easy Division of labour helps workers in becoming experts.

Disadvantages
System suffers from too much of red tape and paper work. Human factor is neglected due to excessive emphasis on rules Employees dont develop belongingness to the organization Employees resist change.

Webers Theory of Bureaucracy

Application in the Modern Workplace Large organizations guided by countless rules are bureaucracies Linked with inefficient, slow-moving organizations Organizations have several characteristics of bureaucracies

Behavioural Management Theory

Behavioral Management /Human relations approach

Behavioral Management
The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.

Behavioral Management
It was concerned that scientific management ignored the human side of the organization. It began with the Hawthorne experiments by Elton Mayo and important contributions have been made by Douglas Mc.Gregor

Features of the theory

An organization is more than a formal structure of positions. It is a system of interpersonal and intergroup relationships. Management must understand human behavior Higher motivation and productivity can be obtained through good human relations which can be developed through Leadership Communication Employee participation

Mary Parker Follet (1868-1933)

Power, according to Follet, was the ability to influence and bring about a change. Concept of integration, which involves finding a solution acceptable to all group members

Elton Mayo (1868-1933)

Pre-judgment Job performance depends on the individual worker Fatigue is the main factor affecting output. Management sets production standards Findings The group is the key factors in job performance Perceived meaning and importance of the work determining output. Workplace culture sets its own production standards.

Abraham Maslow
His theory rested on these assumptions.
Physiological needs; Safety or security needs Belongingness or social needs; Esteem or status needs Self actualization or self-fulfillment needs.

Maslows Need Hierarchy

Self actualization needs

Esteem needs

Social needs Safety needs

Physiological needs

Theory X and Theory Y

Douglas Mcgregor
Theory X Most People dislike work Most People must be coerced and threatened before they work. Most people prefer to be directed. They avoid responsibility and have little ambition. Theory Y Work is a natural activity like play. People are capable of self direction and self control People become committed to organizational objectives if they are rewarded in doing so.

Theory X and Theory Y

It is given by Douglas McGregor. He proposed the two different sets of assumptions about workers. In his book the Human side of enterprisestates that people can be managed in two ways.

Theory X and Theory Y

Theory X Assumptions :
The average worker is lazy, dislikes work and will do as little as possible and tries to escape it whenever possible Managers must closely supervise and control through reward and punishment. Many employees rank job security on top, and they have little or no aspiration/ ambition. Employees generally dislike responsibilities and move away from responsibilities. An average employee needs formal direction.

Theory X and Theory Y

Theory Y Assumptions:
Workers are not lazy, want to do a good job They view work as natural and enjoyable Employees are committed to objectives and exercise self control and self direction for their attainment. If the job is rewarding and satisfying, then it will result in employees loyalty and commitment to organization. They can learn and even seek responsibility. All people are capable of making creative and innovative decisions

Implications

The Hawthorne Studies

Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.

The Hawthorne Studies

Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

The Hawthorne Studies

Human Relations Implications Hawthorne effect workers attitudes toward their managers affect the level of workers performance

The Hawthorne Studies

Human relations movement advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity

The Hawthorne Studies

Implications Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task

The Hawthorne Studies

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

Management Science Theory

Management Science Theory

Contemporary approach to management that focuses on the use of quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.

Management Science Theory

Quantitative management utilizes linear and nonlinear programming, modeling, simulation, queuing theory etc. Operations management techniques used to analyze any aspect of the organizations production system.

Management Science Theory

Total Quality Management (TQM) focuses on analyzing input, conversion, and output activities to increase product quality. Management Information Systems (MIS) provides information vital for effective decision making.

Organization Environment Theory

Organizational Environment Theory

Organizational Environment The set of forces and conditions that operate beyond an organizations boundaries but affect a managers ability to acquire and utilize resources

Modern Approaches to Management

 Systems Theory Contingency Theory

Systems Theory
Inputs Resources

Transformation process

Outputs

Labor Materials Capital Machinery Information

Managerial and Technological Abilities Planning Organizing Staffing Leading Controlling Technology

Goods Services Profits and losses Employee satisfaction

Feedback

The Open-Systems View

Open System A system that takes resources from its external environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers.

The Open-Systems View

Inputs: the acquisition of external resources to produce goods and services Conversion: transforms the inputs into outputs of finished goods and services. Output: the release of finished goods and services to its external environment.

Systems
Synergy the performance gains that result from the combined actions of individuals and departments
Possible only in an organized system

Contingency Theory
Systems Viewpoint How the parts fits together Individual Group Traditional Organization viewpoint environment What managers do Behavioral Viewpoint Plan How managers influence Organize others Lead Interpersonal Roles Control Informational Roles Decisional Roles Contingency Viewpoint
Managers use of other view points to solve problems External environment Technology Individuals