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Module 2
Development of Management thought Modern management approaches
Early management approaches
Industrial Revolution
Adam Smith division of labor Venetian business enterprises and their management practices
1400
1700
1800
1900- 1950
Post 1950
The Pre-modern Era
Ancient Massive Construction Projects
Egyptian pyramids Great Wall of China
Michelangelo, the Manager.
Adam Smith’s Contribution to the Field of Management
Wrote the Wealth of Nations (1776)
Advocated the economic advantages that organizations and society would reap from the division of labor: Increased productivity by increasing each worker’s skill and dexterity. Time saved that is commonly lost in changing tasks. The creation of labor-saving inventions and machinery.
The Industrial Revolution’s Influence on Management Practices
Industrial Revolution
Machine power began to substitute for human power
Improved and less costly transportation systems became available
Lead to mass production of economical goods
Created larger markets for goods.
Larger organizations developed to serve larger markets
Created the need for formalized management practices.
Classical Contributions
Classical Approach
The term used to describe the hypotheses of the scientific management theorists and the general istrative theorists. Scientific management theorists Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry Gantt General istrative theorists Henri Fayol and Max Weber
Development of Management thought
Evolution of management thought can be studied in three broad categories: Early classical approaches,represented management approaches (Scientific management, istrative management and Bureaucracy) Neoclassical approaches represented by human relations movement and behavioural approaches Modern management approaches represented by quantitative, systems and contingency approaches) .
Scientific Management
Fredrick W.Taylor (1856-1915) father of scientific management
–
An approach that emphasizes the scientific study of work in order to improve worker efficiency. Contributions by Taylor: Scientific task planning, Time and Motion study, Standardization, Differential Payment , functional foremanship.
Scientific Management Basics of Scientific Management ( 4 principles)
Each task must be scientifically designed so that it can replace the old, rule of thumb methods. Workers must be scientifically selected and trained so that they can be more productive . Bring the scientifically designed jobs and workers together so that there will be a match between them. Division of labor and cooperation between management & workers.
Scientific Management Taylor summed up his approach in these words: i. Science, not rule of thumb ii. Harmony, not discord iii. Cooperation , not individualism iv. Maximum output in place of restricted output v. Development of each man to his greatest efficiency vi. Equitable division of work
Scientific Management Limitations: i.
Exploitative device
ii.
Depersonalized work
iii.
Unpsychological
iv.
Undemocratic
v.
Antisocial
vi.
Unrealistic
Scientific Management Contributors
Frank and Lillian Gilbreth
Bricklaying efficiency improvements Time and motion studies (therbligs)
Henry Gantt
Incentive compensation systems Gantt chart for scheduling work operations
istrative Management Theory
Henry Fayol(1841-1925) developed this theory. Focuses on principles that can be used by managers to coordinate the internal activities of organizations. Explains the process of managing an organization from the top managerial perspective. Five functions to be performed by managers: planning, organizing, Commanding, Coordination, Controlling.
istrative Management Theory
Managers should apply 14 principles at the operational level:
Division of work
Authority and Responsibility
Discipline
Unity of Command
Unity of direction
Subordination of individual interest to the common good
istrative Management Theory
Remuneration of Personnel Order Centralization Scalar Chain Equity Stability of tenure Initiative Espirit de Corps
istrative Management Theory Limitations:
Lack of empirical evidence
Neglect of human factors
False assumptions
Pro-management bias
Historical significance
Human Relations Theory
Elton Mayo(1880-1949) contributed to this theory. It is a movement in management thinking and practice that emphasized satisfaction of employees’ basic needs as the key to increased worker productivity. Compensated the deficiencies in scientific management and istrative management. Gained popularity after studies of human behavior at work situations during 192433.
Human Relations Theory
Hawthorne Studies: A group of studies conducted at the Hawthorne plant of Western
Electric
company
whose
results ultimately led to the human relations view of management.
Illumination Experiment: Test group Vs Control
group,
Productivity.
Illumination
Vs
Human Relations Theory
Hawthorne Effect: The possibility that individuals singled out for a study may improve their performance simply because of the added attention they receive from the researchers, rather than because of any specific factors being tested. Bank wiring Experiment: Group norms influencing individual behavior Vs Economic incentives.
Human Relations Theory
Key Concepts: The individual-not only motivated by economic factors but also by social & psychological factors. The work group-workers find satisfaction in the member ship of social groups. Work environment-to be conducive for both organizational and personal growth. The leader-should climate.
provide
participative
The Human Relations Movement Pyramid
Human Relations Theory Criticisms:
Philosophy preaches collaboration not competition- psychology Concerned employees
only
Over concern productivity link
Anti individualistic
Not
a
with on
operative
happiness
scientifically
–
designed
Behavioral Approach
Developed as a natural evolution to Hawthorne Experiments. Hawthorne studies stressed on emotional elements to explain human behavior and performance. Behavioral approach emphasizes on scientific research as the basis for developing theories about human behavior in the organizations that can be used to develop practical guidelines for managers.
BEHAVORIAL MANAGEMENT
McGregor
McGregor’s The Human Side of Enterprize
Separated managers into two beliefs / styles 1.
Theory X Managers
2.
Believe employees generally dislike work, lack ambition, act irresponsibly, resist change and prefer to follow. Use classical directive “command and control” style
Theory Y Managers
Believe employees are willing to work, capable of self control and self direction, responsible and creative
Behavioral Approach
Contributors: Abraham Maslow, Chris Argyris,etc Also called as Human Resources approach. Contributions: Individual motivation, group behavior Foundation to HRM Job enrichment MBO Positive reinforcement
Behavioral Approach
Limitations:
Self actualizing view
Compatibility of individual & organization
Discounted the non human aspects of organization
Best of managing is humanizing organizations
Quantitative Approach
Features Offers quantitative aids to decision making, develops quantitative tools to assist in providing products and services. Managerial Choices depend on criteria such as costs, revenues, ROI, etc Emphasis on computers and their assistance in decision making alternatives. Promotes holistic view of factors influencing decision making
Quantitative Approach Eliminates subjective thinking in decision making Minimizes bias in decision making Aids in objective rational decision making. Limitations: All variables influencing decision can’t be identified. Less importance to human relationships Decision quality depends on the data inputted to the computer.
Systems Approach
Integrated approach to management problem solving and decision making Advocates: Chester Barnard, George Homans Key Concepts of this approach: System is a set of interdependent parts Concept of holism System can be open or closed System has a boundary
Systems Approach
Tries to solve problems by diagnosing them with in a frame work of inputs, transformation processes, outputs and feed back Good balance between the needs of various functional parts of the enterprise and goals of the firm as a whole. Conceptual frame work to understand organization is too abstract. Does not identify situational differences and factors
Environment
A D
B
E Sub-systems
C
System Approach
Environment
Contingency Approach
Also termed as Situational approach Based on the premise that situations dictate managerial action Advocates: Selznic, Woodward, James Thompson Appropriate managerial action depends on the particular parameters of the situation Spells out the relationship of the organization to its environment Concerned with structural adaptations of organizations to its task environment.
Contingency Approach
More pragmatic and action oriented. Integrates theory and practice in a systems framework Advocates the managers to develop skills for situational analysis Limitations:
Paucity of literature & Complex
Defies empirical testing
Reactive
Not holistic in nature
References
Principles of Management-P C Tripathi, P N Reddy; 3rd Edn.,TMH
Management-Stephen Robbins; 8th Edn.,PHI
Management-VSP Rao, V H Krishna; Excel
Essentials of Management-Koontz,Weihrich;5th Edn.,TMH
Management – James A F Stoner, R Edward Freeman, Daniel R Gilbert;6th Edn., PHI
Principles of management: a modern approach-Henry Albers, 4th Edn,,John Wiley & sons
Fundamentals of management-Donnelly, Gibson,Ivancevich , 10th Edn,.Irwin Mc Graw
Web References
www.12manage.com www.cliffsnotes.com www.swlearning.com www.gutenburg.org www.cheathouse.com en.wikipedia.org www.business.com www.businessmanagement.suite101.com www.greatmanagement.org unpan1.un.org www.harehall.co.uk
Development of Management thought Modern management approaches
Early management approaches
Industrial Revolution
Adam Smith division of labor Venetian business enterprises and their management practices
1400
1700
1800
1900- 1950
Post 1950
The Pre-modern Era
Ancient Massive Construction Projects
Egyptian pyramids Great Wall of China
Michelangelo, the Manager.
Adam Smith’s Contribution to the Field of Management
Wrote the Wealth of Nations (1776)
Advocated the economic advantages that organizations and society would reap from the division of labor: Increased productivity by increasing each worker’s skill and dexterity. Time saved that is commonly lost in changing tasks. The creation of labor-saving inventions and machinery.
The Industrial Revolution’s Influence on Management Practices
Industrial Revolution
Machine power began to substitute for human power
Improved and less costly transportation systems became available
Lead to mass production of economical goods
Created larger markets for goods.
Larger organizations developed to serve larger markets
Created the need for formalized management practices.
Classical Contributions
Classical Approach
The term used to describe the hypotheses of the scientific management theorists and the general istrative theorists. Scientific management theorists Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry Gantt General istrative theorists Henri Fayol and Max Weber
Development of Management thought
Evolution of management thought can be studied in three broad categories: Early classical approaches,represented management approaches (Scientific management, istrative management and Bureaucracy) Neoclassical approaches represented by human relations movement and behavioural approaches Modern management approaches represented by quantitative, systems and contingency approaches) .
Scientific Management
Fredrick W.Taylor (1856-1915) father of scientific management
–
An approach that emphasizes the scientific study of work in order to improve worker efficiency. Contributions by Taylor: Scientific task planning, Time and Motion study, Standardization, Differential Payment , functional foremanship.
Scientific Management Basics of Scientific Management ( 4 principles)
Each task must be scientifically designed so that it can replace the old, rule of thumb methods. Workers must be scientifically selected and trained so that they can be more productive . Bring the scientifically designed jobs and workers together so that there will be a match between them. Division of labor and cooperation between management & workers.
Scientific Management Taylor summed up his approach in these words: i. Science, not rule of thumb ii. Harmony, not discord iii. Cooperation , not individualism iv. Maximum output in place of restricted output v. Development of each man to his greatest efficiency vi. Equitable division of work
Scientific Management Limitations: i.
Exploitative device
ii.
Depersonalized work
iii.
Unpsychological
iv.
Undemocratic
v.
Antisocial
vi.
Unrealistic
Scientific Management Contributors
Frank and Lillian Gilbreth
Bricklaying efficiency improvements Time and motion studies (therbligs)
Henry Gantt
Incentive compensation systems Gantt chart for scheduling work operations
istrative Management Theory
Henry Fayol(1841-1925) developed this theory. Focuses on principles that can be used by managers to coordinate the internal activities of organizations. Explains the process of managing an organization from the top managerial perspective. Five functions to be performed by managers: planning, organizing, Commanding, Coordination, Controlling.
istrative Management Theory
Managers should apply 14 principles at the operational level:
Division of work
Authority and Responsibility
Discipline
Unity of Command
Unity of direction
Subordination of individual interest to the common good
istrative Management Theory
Remuneration of Personnel Order Centralization Scalar Chain Equity Stability of tenure Initiative Espirit de Corps
istrative Management Theory Limitations:
Lack of empirical evidence
Neglect of human factors
False assumptions
Pro-management bias
Historical significance
Human Relations Theory
Elton Mayo(1880-1949) contributed to this theory. It is a movement in management thinking and practice that emphasized satisfaction of employees’ basic needs as the key to increased worker productivity. Compensated the deficiencies in scientific management and istrative management. Gained popularity after studies of human behavior at work situations during 192433.
Human Relations Theory
Hawthorne Studies: A group of studies conducted at the Hawthorne plant of Western
Electric
company
whose
results ultimately led to the human relations view of management.
Illumination Experiment: Test group Vs Control
group,
Productivity.
Illumination
Vs
Human Relations Theory
Hawthorne Effect: The possibility that individuals singled out for a study may improve their performance simply because of the added attention they receive from the researchers, rather than because of any specific factors being tested. Bank wiring Experiment: Group norms influencing individual behavior Vs Economic incentives.
Human Relations Theory
Key Concepts: The individual-not only motivated by economic factors but also by social & psychological factors. The work group-workers find satisfaction in the member ship of social groups. Work environment-to be conducive for both organizational and personal growth. The leader-should climate.
provide
participative
The Human Relations Movement Pyramid
Human Relations Theory Criticisms:
Philosophy preaches collaboration not competition- psychology Concerned employees
only
Over concern productivity link
Anti individualistic
Not
a
with on
operative
happiness
scientifically
–
designed
Behavioral Approach
Developed as a natural evolution to Hawthorne Experiments. Hawthorne studies stressed on emotional elements to explain human behavior and performance. Behavioral approach emphasizes on scientific research as the basis for developing theories about human behavior in the organizations that can be used to develop practical guidelines for managers.
BEHAVORIAL MANAGEMENT
McGregor
McGregor’s The Human Side of Enterprize
Separated managers into two beliefs / styles 1.
Theory X Managers
2.
Believe employees generally dislike work, lack ambition, act irresponsibly, resist change and prefer to follow. Use classical directive “command and control” style
Theory Y Managers
Believe employees are willing to work, capable of self control and self direction, responsible and creative
Behavioral Approach
Contributors: Abraham Maslow, Chris Argyris,etc Also called as Human Resources approach. Contributions: Individual motivation, group behavior Foundation to HRM Job enrichment MBO Positive reinforcement
Behavioral Approach
Limitations:
Self actualizing view
Compatibility of individual & organization
Discounted the non human aspects of organization
Best of managing is humanizing organizations
Quantitative Approach
Features Offers quantitative aids to decision making, develops quantitative tools to assist in providing products and services. Managerial Choices depend on criteria such as costs, revenues, ROI, etc Emphasis on computers and their assistance in decision making alternatives. Promotes holistic view of factors influencing decision making
Quantitative Approach Eliminates subjective thinking in decision making Minimizes bias in decision making Aids in objective rational decision making. Limitations: All variables influencing decision can’t be identified. Less importance to human relationships Decision quality depends on the data inputted to the computer.
Systems Approach
Integrated approach to management problem solving and decision making Advocates: Chester Barnard, George Homans Key Concepts of this approach: System is a set of interdependent parts Concept of holism System can be open or closed System has a boundary
Systems Approach
Tries to solve problems by diagnosing them with in a frame work of inputs, transformation processes, outputs and feed back Good balance between the needs of various functional parts of the enterprise and goals of the firm as a whole. Conceptual frame work to understand organization is too abstract. Does not identify situational differences and factors
Environment
A D
B
E Sub-systems
C
System Approach
Environment
Contingency Approach
Also termed as Situational approach Based on the premise that situations dictate managerial action Advocates: Selznic, Woodward, James Thompson Appropriate managerial action depends on the particular parameters of the situation Spells out the relationship of the organization to its environment Concerned with structural adaptations of organizations to its task environment.
Contingency Approach
More pragmatic and action oriented. Integrates theory and practice in a systems framework Advocates the managers to develop skills for situational analysis Limitations:
Paucity of literature & Complex
Defies empirical testing
Reactive
Not holistic in nature
References
Principles of Management-P C Tripathi, P N Reddy; 3rd Edn.,TMH
Management-Stephen Robbins; 8th Edn.,PHI
Management-VSP Rao, V H Krishna; Excel
Essentials of Management-Koontz,Weihrich;5th Edn.,TMH
Management – James A F Stoner, R Edward Freeman, Daniel R Gilbert;6th Edn., PHI
Principles of management: a modern approach-Henry Albers, 4th Edn,,John Wiley & sons
Fundamentals of management-Donnelly, Gibson,Ivancevich , 10th Edn,.Irwin Mc Graw
Web References
www.12manage.com www.cliffsnotes.com www.swlearning.com www.gutenburg.org www.cheathouse.com en.wikipedia.org www.business.com www.businessmanagement.suite101.com www.greatmanagement.org unpan1.un.org www.harehall.co.uk
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