Evolution Of Management Thoughts 3c4559

Management Principles and Practices By

Why we study ‘Management’ ?

Managers are Often Wrong !

But ……. Never in Doubt !

“Management manages by making decisions

and by seeing that those decisions are implemented.”

– Harold S. Geneen

What is Management ?

Management ……..

Managing ‗Men‘ Tactfully

―Management is an art of getting things done through and with others in the formally organized groups‖ -Koontz and O'Donnell

―Management tells us what is to be

done and what is the best way to do that‖ - Frederick Winslow Taylor Father of Scientific Management

―Management is not the direction of goods, it is the development of people‖ -Lawrence Apple

Finally…..

Management is……….. ‗What Managers do !‘ -Stephen P. Robbins

Evolution of Management Thoughts

The verb manage comes from the Italian maneggiare (to handle — especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries. -Oxford English Dictionary.

Environmental Factors Influencing Management Thought • Economic Influences  The availability, production, and distribution of

resources within a society.

• Social Influences  The aspects of a culture that influence interpersonal

relationships.

• Political Influences  The impact of political institutions on individuals and

organizations.

Environmental Factors Influencing Management Thought (cont’d) • Technological Influences  The advances and refinements in any of the devices

that are used in conjunction with conducting business.

• Global Influences  The pressures to improve quality, productivity, and

costs as organizations attempt to compete in the worldwide marketplace.

Chronological Development of Management Perspectives

Classical Approach to Management Thought

• F. W. Taylor

1856-1915

• Henri Fayol

1841-1925

• Max Weber

1864-1920

Subfields of the Classical Perspective on Management Focuses on the individual worker’s productivity

Focuses on the functions of management

Focuses on the overall organizational system

Scientific Management: Taylor • Frederick W. Taylor (1856-1915)  Father of “Scientific Management. 

attempted to define ―the one best way‖ to perform every task through systematic study and other scientific methods.



believed that improved management practices lead to improved productivity.

 Three areas of focus: 

Task Performance



Supervision



Motivation

Task Performance • Scientific management incorporates basic expectations of management, including:  Development of work standards  Selection of workers

 Training of workers  of workers

Supervision • Taylor felt that a single supervisor could not be an expert at all tasks.  As a result, each first-level supervisor should be

responsible only workers who perform a common function familiar to the supervisor.  This became known as “Functional Foremanship.”

Motivation • Taylor believed money was the way to motivate workers to their fullest capabilities.  He advocated a piecework system in which worker’s

pay was tied to their output.  Workers

who met a standard level of production were paid a standard wage rate.

 Workers

whose production exceeded the standard were paid at a higher rate for all of their production output.

Taylor’s Four Principles of Scientific Management •

Scientifically study each part of a task and develop the best method of performing the task.

•

Carefully select workers and train them to perform the task by using the scientifically developed method.

•

Cooperate fully with workers to ensure that they use the proper method.

•

Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

Key Concepts of Scientific Management • Scientific Task Planning

• Time and Motion Studies • Standardization : Setting Standards for Performance

• Piece rate system: Discriminated Wages System • Functional Foremanship: Route Clerk, Instruction card clerk, cost and time clerk, gang boss etc.

Limitations of Scientific Management • Exploitative Device • Depersonalized Work: Pre-decided Methods of Work, Pre-Settled Things • Anti-Social: Workers are only economic tools • Unrealistic • Mechanical: Too much technical

“In the search of best, Taylor converted men into machines”

istrative Management: Fayol • Henri Fayol (1841–1925)  First recognized that successful managers had to

understand the basic managerial functions.  Developed a set of 14 general principles of

management.  Fayol’s managerial functions of planning, leading,

organizing and controlling are routinely used in modern organizations.

Six Groups of Activities of Industrial Undertaking

• Technical activities: Production, Manufacturing, adaptation • Commercial Activities: Buying, Selling, Exchange • Financial activities: Search of Optimum Use of Capital • Security Activities: Protection of Property and Person • ing Activities: stock-taking, balance sheets, costs, statistics • Managerial Activities: Planning, organization, command, coordination and control

Fayol‘s General Principles of Management 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction: One Manager-One Plan 6. Subordination of individual interest to the common good 7. Remuneration of personnel

8. 9. 10. 11. 12. 13. 14.

Centralization Scalar chain Order: Systematic Equity: Fair Behavior Stability Initiative Esprit de corps: Unity is Strength

Bureaucratic Management • Focuses on the overall organizational system. • Bureaucratic management is based upon:  Firm rules  Policies and procedures  A fixed hierarchy  A clear division of labor

Bureaucratic Management: Weber • Max Weber (1864–1920) A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behavior—the approach to management now referred to as “bureaucracy.” Division of labor Hierarchy of authority Rules and procedures Impersonality Employee selection and promotion

Weber’s Forms of Authority • Traditional authority  Subordinate obedience based upon custom or

tradition (e.g., kings, queens, chiefs).

• Charismatic authority  Subordinates voluntarily comply with a leader

because of his or her special personal qualities or abilities (e.g., Martin Luther King, Gandhi).

• Rational-legal authority  Subordinate obedience based upon the position held

by superiors within the organization (e.g., police officers, executives, supervisors).

Weber‘s Three Types of Authority Type

Description

Traditional

Subordinate obedience based upon custom or tradition

Charismatic

Subordinate obedience based upon special personal qualities associated with certain social reformers, political leaders, religious leaders, or organizational leaders

Rational–legal

Subordinate obedience based upon the position held by superiors within the organization

Bureaucratic Hierarchical Power Structure

Classical versus Behavioral Perspective

vs.

Classical Perspective

Behavioral Perspective

Focused on rational behavior

Acknowledged the importance of human behavior

Behavioral Approach to Management Thought • Mary Parker Follet

1868-1933

• Elton Mayo

1880-1949

• Douglas McGregor

1906-1964

• Chester I Barnard

1886-1961

Behavioral Perspective

• Followed the classical perspective in the development of management thought.  Acknowledged the importance of human behavior in

shaping management style

Mary Parker Follett : Mother of Conflict Resolution • Key to effective management was coordination. • Managers needed to coordinate and harmonize group effort rather than force and coerce people. • Management is a continuous, dynamic process. • Best decisions would be made by people who were closest to the situation.

Follett on Effective Work Groups • Four principles of coordination to promote effective work groups: 1. Coordination requires that people be in direct with one another. 2. Coordination is essential during the initial stages of any endeavor. 3. Coordination must address all factors and phases of any endeavor.

4. Coordination is a continuous, ongoing process.

Management Thought by Follett • Constructive conflict

• Law of Situation: Orders through situation and by appropriate person who is in the situation to

order to the right person • Group Activity: Group is Important

• Leadership for Integration • Authority and Responsibility

Elton Mayo • Conducted the famous Hawthorne Experiments.  “Hawthorne Effect” 

Productivity increased because attention was paid to the workers in the experiment.



Phenomenon whereby individual or group performance is influenced by human behavior factors.

• His work represents the transition from scientific management to the early human relations movement.

Hawthorne Experiments 1927-1932 Elton Mayo, Harvard Business School Professor, examined the productivity and work conditions.

-Effect of Fatigue and Monotony on Job Productivity (Rest Breaks, Work Hours, Temperature and Humidity)

Findings of Elton Mayo ―Changing illumination (Lighting) for the test

group,

modifying

rest

periods,

shortening

workdays and varying incentive pay systems did

not seem to explain changes in productivity. Mayo and his researchers then came to the conclusion that other factors were responsible for it.‖

Mayo found in general, that the improvement in productivity was due to such social factors as

morale, satisfactory interrelationships between of work group (a sense of belonging), and effective management-a kind of managing that

would

understand

human

behaviour,

especially group behaviour and serve it through such

interpersonal

skills

as

motivating,

counseling, leading, an communicating.

Hawthorne Effect ―The mere act of showing people that you are concerned about them usually spurs them to better job performance‖

Douglas McGregor • Proposed the Theory X and Theory Y styles of management.  Theory X managers perceive that their subordinates

have an inherent dislike of work and will avoid it if at all possible.  Theory Y managers perceive that their subordinates

enjoy work and that they will gain satisfaction from performing their jobs.

Comparison of Theory X and Theory Y Assumptions

Factor

Theory X Assumptions

Theory Y Assumptions

Employee attitude toward work

Employees dislike work and. will avoid it if at all possible.

Employees enjoy work and will actively seek it.

Management view of direction

Employees must be directed, coerced, controlled, or threatened to get them to put forth adequate effort.

Employees are self-motivated and self-directed toward achieving organizational goals.

Employee view of direction

Employees wish to avoid responsibility; they prefer to be directed and told what to do and how to do it.

Employees seek responsibility; they wish to use their creativity, imagination, and ingenuity in performing their jobs.

Management style

Authoritarian style of management

Participatory style of management

Chester I Barnard • Felt that executives serve two primary functions:  Must establish and maintain a communications

system among employees.  Must establish the objectives of the organization and motivate employees.

• Developed an acceptance theory of authority:  Authority of a manager flows from the ability of

subordinates to accept or reject an order from the manager once they: Comprehend what the order requires of them.  Review the order‘s consistency with organization goals.  Perceive a personal benefit in obeying the order. 

Abraham Maslow 1908-1970

Maslow’s Hierarchy of Needs Self-Actualization

Need for Self Esteem

Need for Social Relations

Need for Security

Physical Needs

Herbert A Simon (1916-2001) -Principles of Profit Maximisation and Cost

Minimisation -Rationality in decision making

-Bounded Rationality: The term used to designate rational choice that thanes into the

cognitive limitation of both knowledge and cognitive capacity.

Decision Making ―An operational istrative decision should

be correct and efficient, and it must be practical to implement with a set of co-ordinate means.‖

The task of rational decision making is to select

the alternative that results in the more preferred set of all the possible consequences.

Three Steps of Decision Making -The identification and listing of all the alternatives -The determination of all the consequences resulting from each of the alternatives -The comparison of the accuracy and efficiency of

each of these sets of consequences.

Quantitative Approach or Management Science Approach

The Quantitative Perspective • Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. • This approach has four basic characteristics: 1. A decision-making focus 2. Development of measurable criteria 3. Formulation of a quantitative model

4. The use of computers

The Quantitative Perspective (cont’d) • Decision-Making Focus  The primary focus of the quantitative approach is on

problems or situations that require direct action, or a decision, on the part of management.

• Measurable Criteria  The decision-making process requires that the

decision maker select some alternative course of action.  The alternatives must be compared on the basis of measurable criteria.

The Quantitative Perspective (cont’d) • Quantitative Model  To assess the likely impact of each alternative on the

stated criteria, a quantitative model of the decision situation must be formulated.

• Computers  Computers are quite useful in the problem-solving

process.

Basic Structure of Systems

Systems Perspective • An approach to problem solving based on an understanding of the basic structure of systems.  Environmental interaction 

Open systems must interact with the external environment to survive.



Closed systems do not interact with the environment.

 Synergy: when all subsystems work together making

the whole greater than the sum of its parts.  Entropy: the tendency for systems to decay over time.

The Organisation as a System

The Contingency Perspective • A view that proposes that there is no one best approach to management for all situations.  Asserts that managers are responsible for

determining which managerial approach is likely to be most effective in a given situation.  This requires managers to identify the key

contingencies in a given situation.

Contingency View of Management

An Example of the Contingency Perspective • Joan Woodward‘s Research  Discovered that a particular management style is

affected by the organization’s technology.  Identified and described three different types of technology: Small-batch technology  Mass-production technology  Continuous-process technology 

Table 2.4

Production Technology Examples

Production Technology

Examples

Small-batch technology

Custom fabrication machine shop, manufacturer of neon advertising signs, print shop specializing in personal business cards, trophy-engraving shop

Mass-production technology

Manufacturer of automobiles, manufacturer of refrigerators, manufacturer of hair dryers, manufacturer of pencils

Continuous-process technology

Oil refinery, flour mill, soft drink bottler, chemical processor

Information Technology and Management Style • Information technology can facilitate the use of a particular management style. Classical Perspective

Quantitative/ Systems Perspectives

Facilitated by communications equipment

Facilitated by advanced computers

Future Issues: Diversity, Globalization, and Quality • Heightened concern for diversity initiatives within the workplace and within management • Adoption of the concept of workers as decision makers, problem solvers, and team players • Creation of a focus on and commitment to the concept of quality.

Management in the 21st Century • William Ouchi‘s Theory Z  Japanese-style approach to management developed

by William Ouchi  Advocates

trusting employees and making them feel like an integral part of the organization.

 Based

on the assumption that once a trusting relationship with workers is established, production will increase.

Future Leaders Must: • Be thoroughly schooled in the different management perspectives.

• Understand the various influences that will have a continuing effect on management thinking • Be aware of how key business environment variables relate to their organization. • Know which elements to select from the various management perspectives that are appropriate for their situation. • Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete.

Peter F Drucker (1909-2005) Management by Objectives: M.B.O. Drucker‘s Approach towards management: - Management is a dynamic, life-giving element in an organisation - Management is a distinct, discipline and a social function - Management should be creative and innovative in order to produce results. He opined that management is a great profession full of challenges

M.B.O. (Management by Objectives) Drucker stressed the importance of t goal

setting through ‗Management by Objectives‘. He emphasized the importance of participative set

goals

that

are

tangible,

verifiable

and

measurable. He wanted managers to focus on what must be accomplished (goals) rather than how it was to be accomplished (Methods)

Text Books and Reference Books • Management-Stoner and Freeman • Essentials of management – Koontz and Odonell • Management - Robbins • Management -Gilbert • Management Today – Principles and practiceGene Burton & Manab Thakur • Management Principles and Practices: L M Prasad • istrative Thinkers: D Ravindra Prasad, V Prasad, P Satyanarayana