Theories of Management

Mrs. G.S.Vyas

College of Engineering Pune (COEP)

8/22/2011

Forerunners in Technical Education

Management
James L. Hayes says Management is getting things done through other people. Management is decision making. The Management Functions ( Luther Gulick) POSDCORB Planning Organising Staffing Directing Coordinating Reporting Budgeting
[Source: Management theory and Practice : Ernest Dale]

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Forerunners in Technical Education

Job Specialization and the Division of Labor Adam Smith (18th century economist)
Observed that firms manufactured pins in one of two different ways: Craft-styleeach worker did all steps. Productioneach worker specialized in one step. Realized that job specialization resulted in much higher efficiency and productivity Breaking down the total job allowed for the division of labor in which workers became very skilled at their specific tasks.

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Frederic Winslow Taylor

(Father of Scientific Management) Exact scientific knowledge and methods are everywhere, sooner or later sure to replace rule of thumb.

Scientific Management
The systematic study of the relationships between people and tasks for the purpose of redesigning the work process for higher efficiency. Defined by Frederick Taylor in the late 1800s to replace informal rule of thumb knowledge. Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done. Differential piece rate system Separation of planning and doing Functional foremanship

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Forerunners in Technical Education

Four Principles of Scientific Management

Principles to increase efficiency:
1. Study the ways jobs are performed now and determine new ways to do them. Gather detailed time and motion information. Try different methods to see which is best. 2. Codify the new methods into rules. Teach to all workers the new method. 3. Select workers whose skills match the rules. 4. Establish fair levels of performance and pay a premium for higher performance. Workers should benefit from higher output

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Problems with Scientific Management

Managers frequently implemented only the increased output side of Taylors plan.
Workers did not share in the increased output.

Specialized jobs became very boring, dull.

Workers ended up distrusting the Scientific Management method.

Workers could purposely under-perform.

Management responded with increased use of machines and conveyors belts.

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Frank and Lillian Gilbreth One best way: fewest motion

Speed work: speed work came not from hurrying but from reduction in the amount of work through the elimination of unnecessary motion. Wage rates : higher Modern motion study techniques Created flow process chart Therblings are:
Search Find Select Grasp Position Assemble Use Disassemble Inspect Transport loaded, moving hand or body with a load Pre-position Release load Transport empty Wait- unavoidable Rest- necessary for overcoming fatigue plan

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Elton Mayo ( Human Relations)

y If our social skills had advanced step by step with our technical skills, there would not have been another European war. Employee relations and administration 1880-1949 in general , was what he called the Rabble Hypothesis which must be abandoned. Good administration therefore is achieved by showing each individual that his self-interest is best served when he behaves as management wishes him to.
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 Mayo said, work is group activity, and in an Atomistic society such as we have at present in which traditional groupings and ties have weakened, the work group is especially important. Yet technological advances and changing conditions tend continually to disrupt the formal and informal working groups that form with in industry. HAWTHORNE EFFECT Department of Industrial Research at Harvard. Conclusion: employees would be happy and productive only if they could belong to a cohesive and stable work group that the sense of belonging was more important to them than anything else. It also focused management attention on the importance of first line supervision in the creation and preservation of morale.

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Mayo s Conclusions
Work is a group activity The social work of an adult is based on their work experiences Workers need recognition, security, and a sense of belonging A complaint is usually due to an employee s dissatisfaction with his or her status A worker s attitude is shaped from forces inside and outside of the work environment Informal groups in the workplace improve employees attitudes and productivity The change from an established society at home to an adaptive society at work can create disturbances in the workforce Group work must be planned and implemented
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Fayols Principles of Management

Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization leading to poor quality and worker dissatisfaction.

Authority and Responsibility

Fayol included both formal and informal authority resulting from special expertise.

Unity of Command
Employees should have only one boss.

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 Line of Authority
A clear chain of command from top to bottom of the firm.

Centralization
The degree to which authority rests at the top of the organization.

Unity of Direction
A single plan of action to guide the organization.

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 Equity
The provision of justice and the fair and impartial treatment of all employees.

Order
The arrangement of employees where they will be of the most value to the organization and to provide career opportunities.

Initiative
The fostering of creativity and innovation by encouraging employees to act on their own.

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 Discipline Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success. Stability of Tenure of Personnel - Long-term employment is important for the development of skills that improve the organizations performance. Subordination of Individual Interest to the Common Interest The interest of the organization takes precedence over that of the individual employee. Esprit de corps Comradeship, shared enthusiasm foster devotion to the common cause (organization).
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Difference between Henri Fayol and Frederick Winslow Taylor

Taylor viewed management processes from the bottom up, while Fayol viewed it from the top down. Fayol wrote that "Taylor's approach differs from the one we have outlined in that he examines the firm from the "bottom up." he starts with the most elemental units of activity -- the workers' actions -- then studies the effects of their actions on productivity, devises new methods for making them more efficient, and applies what he learns at lower levels to the hierarchy.
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Application of the 14 Principles

Change and Organization Decision-making Skills can be used to improve the effectiveness of a manager Understanding the management can be seen as a variety of activities which can be listed and grouped

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Douglas McGregor
Theory X
Average human being dislikes work:
Most employees must be controlled and threatened before they will perform to the expectations Humans like to be directed, dislikes responsibility, and wants job security This lead to most organizations using tough management
Bad form of management because the employee needs the opportunity to fulfill their goals This led employees to dislike their work
1906 1964 Theory X and Theory Y

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Theory Y
Physical and mental effort at work are very natural Employees will be proactive if they are committed to the company and if the job is satisfying Most employees learn to seek out responsibility Imagination, creativity, and ingenuity can be used to solve work problems Employees are not used to their full capacity

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Theory X versus Theory Y

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Behavioral Management
Mary Parker Follett
An influential leader in early managerial theory Held a horizontal view of power and authority in organizations Suggested workers help in analyzing their jobs for improvementsthe worker knows the best way to improve the job. If workers have relevant knowledge of the task, then they should control the task.
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Management Science Theory

An approach to management that uses rigorous quantitative techniques to maximize the use of organizational resources.
Quantitative managementutilizes linear programming, modeling, simulation systems. Operations managementtechniques to analyze all aspects of the production system. Total Quality Management (TQM)focuses on improving quality throughout an organization. Management Information Systems (MIS) provides information about the organization.
Source: PowerPoint Presentation by Charlie Cook
Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.

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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.

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The Open-Systems View

Open System
A system that takes resources for its external environment and converts them into goods and services that are then sent back to that environment for purchase by customers. Inputs: the acquisition of external resources. Conversion: the processing of inputs into goods and services. Output: the release of finished goods into the environment.
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The Organization as an Open System

Source: Copyright McGraw-Hill. All rights reserved.

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The Organization and Its Environment

Copyright 2005 Prentice Hall, Inc. All rights reserved. 8/22/2011 ``

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Other System Considerations

Closed system
A system that is self-contained and thus not affected by changes occurring in its external environment. Often undergoes entropy and loses its ability to control itself, and fails.

Synergy
Performance that results when individuals and departments coordinate their actions Performance gains of the whole surpass the sum of the performance of the individual components.

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Contingency Theory
Contingency Theory
The idea that the organizational structures and control systems manager choose depend onare contingent oncharacteristics of the external environment in which the organization operates. Assumes there is no one best way to manage. The environment impacts the firm and managers must be flexible to react to environmental changes. In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively.
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Contingency Theory of Organizational Design

Source: Copyright McGraw-Hill. All rights reserved.

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Mechanistic and Organic Structures

Mechanistic Structure
Authority is centralized at the top. (Theory X) Employees are closely monitored and managed. Can be very efficient in a stable environment.

Organic structure
Authority is decentralized throughout the organization. (Theory Y) Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment.
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