The Evolution of Management TheoryThe Evolution of Management Theory

Scientific Management TheoryScientific Management Theory

Scientific Management is defined as the Scientific Management is defined as the systematic study of the relationships systematic study of the relationships between people and tasks for the purpose between people and tasks for the purpose of redesigning the work process for higher of redesigning the work process for higher efficiency.efficiency.

Fredrick W.Taylor is known as the father of Fredrick W.Taylor is known as the father of Scientific Management.Scientific Management.

Scientific ManagementScientific Management

Defined by Frederick Taylor in the late Defined by Frederick Taylor in the late 1800’s 1800’s

Wanted to replace “rule of thumb”Wanted to replace “rule of thumb”

Sought to reduce the time a worker Sought to reduce the time a worker spent on each task by optimizing the spent on each task by optimizing the way the task was done.way the task was done.

Four Principles Of Scientific Four Principles Of Scientific Management Management

Every job be broken into its elements and a Every job be broken into its elements and a scientific method established to perform each scientific method established to perform each element.element.

Specialization of labor- Workers should be Specialization of labor- Workers should be scientifically selected with right attitudes & ability scientifically selected with right attitudes & ability and properly trained to perform the work.and properly trained to perform the work.

Management should cooperate with workers to Management should cooperate with workers to that all work is performed with scientific that all work is performed with scientific principles.principles.

Scientific distribution of work between Scientific distribution of work between managers and workers.managers and workers.

Causes of CriticismCauses of Criticism

Emphasized on rationality, efficiency and Emphasized on rationality, efficiency and standardization and ignored the role of standardization and ignored the role of individual and groups in the organization.individual and groups in the organization.

The basic assumption of this approach The basic assumption of this approach was that most of the people are motivated was that most of the people are motivated by economic rewards and did not consider by economic rewards and did not consider job satisfaction and self actualization of an job satisfaction and self actualization of an employee.employee.

Administrative Management TheoryAdministrative Management Theory

Administrative ManagementAdministrative Management

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

Administrative Management TheoryAdministrative Management Theory

Max WeberMax Weber Developed the concept of bureaucracy as a Developed the concept of bureaucracy as a

formal system of organization and formal system of organization and administration designed to ensure efficiency administration designed to ensure efficiency and effectiveness. and effectiveness.

Weber’s Principles of BureaucracyWeber’s Principles of Bureaucracy

Rules, SOPs and NormsRules, SOPs and Norms

RulesRules – formal written instructions that – formal written instructions that specify actions to be taken under different specify actions to be taken under different circumstancescircumstancesStandard Operating Procedures (SOPs)Standard Operating Procedures (SOPs) – specific sets of written instructions about – specific sets of written instructions about how to perform a certain aspect of a taskhow to perform a certain aspect of a taskNormsNorms – unwritten, informal codes of – unwritten, informal codes of conduct that prescribe how people should conduct that prescribe how people should act in particular situationsact in particular situations

Fayol’s Principles of ManagementFayol’s Principles of Management

Division of LaborDivision of Labor: allows for job specialization. : allows for job specialization. jobs can have too much specialization jobs can have too much specialization

leading to poor quality and worker leading to poor quality and worker dissatisfaction.dissatisfaction.

Authority and ResponsibilityAuthority and Responsibility both formal and informal authority resulting both formal and informal authority resulting

from special expertise.from special expertise.

Unity of CommandUnity of Command Employees should have only one boss.Employees should have only one boss.

Line of AuthorityLine of Authority A clear chain of command from top to bottom A clear chain of command from top to bottom

of the firm.of the firm.

CentralizationCentralization The degree to which authority rests at the top The degree to which authority rests at the top

of the organization.of the organization.

Unity of DirectionUnity of Direction A single plan of action to guide the A single plan of action to guide the

organization.organization.

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

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

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

DisciplineDiscipline Obedient, applied, respectful employees are Obedient, applied, respectful employees are

necessary for the organization to function.necessary for the organization to function.

Remuneration of PersonnelRemuneration of Personnel An equitable uniform payment system that An equitable uniform payment system that

motivates contributes to organizational motivates contributes to organizational success.success.

Stability of Tenure of PersonnelStability of Tenure of Personnel Long-term employment is important for the Long-term employment is important for the

development of skills that improve the development of skills that improve the organization’s performance.organization’s performance.

Subordination of Individual Interest to the Subordination of Individual Interest to the Common InterestCommon Interest The interest of the organization takes The interest of the organization takes

precedence over that of the individual precedence over that of the individual employee.employee.

Esprit de corpsEsprit de corps This is the principle of “union of This is the principle of “union of

strength” & extension of unity of strength” & extension of unity of command for establishing team work.command for establishing team work.

Behavioral Management TheoryBehavioral Management Theory

Mary Parker FollettMary Parker Follett Concerned that Taylor ignored the Concerned that Taylor ignored the

human side of the organizationhuman side of the organizationSuggested workers help in analyzing their Suggested workers help in analyzing their jobsjobs

If workers have relevant knowledge of the If workers have relevant knowledge of the task, then they should control the tasktask, then they should control the task

Behavioral Management TheoryBehavioral Management Theory

The Hawthorne Studies of Elton Mayo:The Hawthorne Studies of Elton Mayo:

Hawthorne studies were conducted at Western Hawthorne studies were conducted at Western Electric’s Hawthorne plant near Chicago to Electric’s Hawthorne plant near Chicago to determine the effect of better physical facilities determine the effect of better physical facilities on worker output. on worker output.

This studies discovered that when workers were This studies discovered that when workers were given special attention by management, the given special attention by management, the productivity increased irrespective of actual productivity increased irrespective of actual changes in the working conditions.changes in the working conditions.

Theory X and Theory YTheory X and Theory YDouglas McGregor proposed the two different sets Douglas McGregor proposed the two different sets

of assumptions about workers.of assumptions about workers.

Theory XTheory X Theory X assumes the average worker is lazy, Theory X assumes the average worker is lazy,

dislikes work and will do as little as possible.dislikes work and will do as little as possible.

Managers must closely supervise and Managers must closely supervise and control through reward and punishment.control through reward and punishment.

Theory YTheory Y Theory Y assumes workers are not lazy, Theory Y assumes workers are not lazy,

want to do a good job and the job itself want to do a good job and the job itself will determine if the worker likes the will determine if the worker likes the work.work.

Managers should allow workers greater Managers should allow workers greater latitude, and create an organization to latitude, and create an organization to stimulate the workers.stimulate the workers.

Management Science TheoryManagement Science Theory

An approach to management that uses An approach to management that uses rigorous quantitative techniques to rigorous quantitative techniques to maximize the use of organizational maximize the use of organizational resources.resources. Quantitative managementQuantitative management — — utilizes utilizes

linear programming, modeling, linear programming, modeling, simulation systems and chaos theory.simulation systems and chaos theory.

Operations managementOperations management ——techniques techniques used to analyze all aspects of the used to analyze all aspects of the production system.production system.

Total Quality Management (TQM)Total Quality Management (TQM) ——focuses on analyzing input, conversion, focuses on analyzing input, conversion, and output activities to increase product and output activities to increase product quality.quality.

Management Information Systems Management Information Systems (MIS) (MIS) — p— provides information vital for rovides information vital for effective decision making.effective decision making.

Organizational Environment TheoryOrganizational Environment Theory

Organizational Environment –Organizational Environment – The set of forces and conditions that The set of forces and conditions that operate beyond an organization’s operate beyond an organization’s boundaries but affect a manager’s ability boundaries but affect a manager’s ability to acquire and utilize resourcesto acquire and utilize resources

The Open-Systems ViewThe Open-Systems View

Open SystemOpen System A system that takes resources for its A system that takes resources for its

external environment and converts them external environment and converts them into goods and services that are then into goods and services that are then sent back to that environment for sent back to that environment for purchase by customers.purchase by customers.

Contingency TheoryContingency Theory““There is no “one best way” to organize”There is no “one best way” to organize”

The idea that the organizational structures The idea that the organizational structures and control systems manager choose and control systems manager choose depend ondepend on—are contingent on——are contingent on—characteristics of the external environment characteristics of the external environment in which the organization operates.in which the organization operates.

Type of StructureType of StructureMechanistic Structure

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

Organic StructureOrganic Structure Authority is decentralized throughout the Authority is decentralized throughout the

organization. (Theory Y)organization. (Theory Y) Control is much looserControl is much looser Reliance on shared norms is greaterReliance on shared norms is greater Works best when environment is Works best when environment is

unstable and rapidly changingunstable and rapidly changing