Evolution of Management Chapter 1&2

7/31/2019 Evolution of Management Chapter 1&2

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The Evolution of Management

Thinking


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Why history?

Management philosophies and organization

forms change over time to meet new needs.

Knowing the history will

give you a perspective Provide sense of contect and environment

Enhance strategic thinking

Some ideas and practices from the past are stillrelevant and applicable to management today


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Management perspectives over time


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CLASSICAL PERSPECTIVE

Scientific Management(F. Taylor)The system rather than man should come first

Bureaucratic Organizations (M. Weber)Rational way to manage

Administrative Principles( H. Fayol, Follett, C. Barnard)

Organizations are social


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Scientific management:Efficiency iseverything

Context & challenges

- Industrial revolution, division oflabour (A. Smith)- factory system

- US civil war & unification of thecountry

- Mass transportation and railwaysbetween East & West

- Devt of national market: largersize

- Opportunity for economies ofscale: growth pressure

- Conflicts with the labour force :skilled workers control all.

- Control and managementprocesses inadequate to copewith this growth.

How to increase productivity?How to be more efficient?How to de-skill the labour?

SIMPLIFY THEPRODUCTION PROCESS

Time & Motion studies (Gilbreath)in order to establish standards andprecise rules for production,selection of workers, training.

Fordism: Assemly line(process)


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Results ofScientific Management

Contributions

Initiated the careful study of tasks and jobs.

Demonstrated the importance of personnel and their training.

Finally, the mass production and economies of scale attained. Tasksare simplified- costs are down. Planned and predictable production.

Criticisms Did not appreciate social context of work and higher needs of workers.

Did not acknowledge variance among individuals.

Tended to regard workers as uninformed and ignored their ideas

But: limited range of products- social problems because of allienationof workers- I am a part of the process and machine

BROKE UP WHEN...

Technology became more complex

New markets, new trend


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Bureaucratic organizations (Max

Weber 1864-1920) : Impersonal entities

Context and Challenges

European employees were loyalto a single individual ratherthan to the organization or its

mission

Resources used to realizeindividual desires rather thanorganizational goals

Features: Rational way tomanage

Clear division of labour withclear definition of authority and

responsibility

Positions organized in ahierarchy of authority

Formal record keeping

Separation of ownership andmanagement

Strict rules and procedure

Ad i i t ti i i l A l


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Administrative principles: A general

perspectiveH. Fayol, Mary. F. Follett; Chester Barnard.

New managerial concepts introduced:

Fayol: the management functions. Unity of command- one commander

Division of work- specialisation

Unity of direction grouping similar activities

Scalar Chain chain of authority for everyone

Span of control- limit to supervision

Follett: Ethics-power-empowerment

C. Barnard: Informal organizations- naturallyoccuring groups. Organization is social. Mgtshould treat employees well.


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HUMANISTIC PERSPECTIVE

Human relations Movement

Human Resource Perspective


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Human Relations Movement

Emphasized satisfactionof employees

basic needs as the key to increased

worker productivity

Highly inspired by the results ofHawthorne

studies

Human relations Movement


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Hawthorne studies by Elton Mayo

Started in 1895

Four experimental & three control groups

Test pointed to factors other than illumination for

productivity

Factor that increased output, Human Relations

Social norms determine behaviour at work Group affects individual

Money is less a factor for productivity


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Self-actualisation

Self-esteem

Social

Safety

Psysiological

MASLOW HIERARCHY OF NEEDS


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Douglas McGregor Theory X & Y

1906-1964

Theory X

Men dislike workwill

avoid it

Must be coerced,controlled, directed, or

threatened with

punishment

Prefer direction, avoid

responsibility, little

ambition, want security

Theory Y

Men do not dislike work

Self direction and self

control Seek responsibility

Imagination, creativity

widely distributed

Intellectual potential onlypartially utilized


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Behavioral Sciences Approach

Applies social science in an organizationalcontext

Draws from economics, psychology,

sociology, anthropology, and otherdisciplines

Understand employee behavior andinteraction in an organizational setting

OD Organization Development Socio technical approaches- participative mgt

Structural approach org design


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Post-War managementapproaches

Managerial Science approach

More recent developments-

Systems Theory

Contingency View

Total Quality Management(TQM)


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Management Science Perspective

Emerged after WW II

Applied mathematics, statistics, and otherquantitative techniques to managerial

problemsOperations Research mathematical

modeling

Operations Management specializes inphysical production of goods or services

Information Technology reflected inmanagement information systems

C i Vi f M


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Contingency View of Management:

Flexible approach

Management is not universal and each situation is

unique.

No universal principles

Contingencies: Industrytechnology- environment-cultures- size: Contingency for goodness offit

between environment and organization structure.


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TQM: Total Quality Management

(E. Deming)

First time applied in Japan

Focuses on managing the totalorganization to deliver quality to

customers. Four significant elements are

Employee involvement

Focus on the customer Benchmarking

Continuous improvement ( 0% defect)


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Recent trends: Flexible solutions

Innovative management thinking

Learning organizations

Technology driven workplace

Knowledge management


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Learning Organizations

OPENINFORMATION

EMPOWEREDEMPLOYEES

TEAM BASEDSTRUCTURE

LEARNINGORGANIZATION

No ready remedies- innovative thinking

Everybody engaged in solving problem- empowerment

Continous change- information and transparency


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Technology Driven Workplace:

Example: E-commerce

Business-to-ConsumerB2C

Selling Products and

Services Online ( Dell)

Business-to-Business B2B

Transactions Between

Organizations(supply chain)

Consumer-to-ConsumerC2C

Electronic Markets

Created by Web-Based

Intermediaries (arabam.com)


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Knowledge management

Technology offers and supports information gatheringand disseminating. Examples of positiveconsequences:

- CRM- Customer Relationship Management (Turkcell)

- Outsourcing

- Banks and credit cards

- i.e. Call centers, leaflets

- Other international examples

- Arup

- Tetra Pak


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The term Knowledge management(Peter Drucker)

According to Drucker:

There is NO one right organizational structure

There is NOone right way to manage people

Technical markets are NOT given

Management is NOTinternally focused

Management scope is NOTdefined legally:

Therefore, the management should seek to getinformation and acquire knowledge, manage and use

this knowledge in order to survive and succeed. For thatto happen, the management should foster a culture ofcontinuous learning and knowledge sharing.


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On the overall ..

All approaches may co-exist

All approaches are still valid in theworkplace

However, trends are towards more flexiblestructures and balance between efficiencyand effectiveness.

Focus onEfficiency

Focus onLearning

organizations

N i ti l di


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New organizational paradigms:

Flexibility is the rule

Mechanistic

organizationsOrganic

organizations

Learning organizations:experiment

risk taking

sharing knowledge

Full participation in problem

solving

Less formalization

X-functional hierarchical teams

Iron CageDepartments

Highly formal

Little participation

Limited information network


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General Trends in organizations

Industrial

Labour

Predictable environment

Mass production

Routine technology

Hierarchical structures

Growth-efficiency-control

Centralised decision making

Post industrial

Knowledge

Uncertainty & Speed

Flexibility

Innovation

Networks/Horizontal

Outsourcing

Decentralization


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What happened?

Why this shift?


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What forces organizations and

management to change?

ECONOMICFORCES

POLITICALFORCES

SOCIALFORCES

MANAGEMENT &ORGANIZATIONS

Values, needs ,

standards of behavior

influence of politicaland legal institutionson people &organizations

forces that affect theavailability, production,

& distribution of asocietys resourcesamong competingusers

& TECHNOLOGICAL CHANGES......


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External environment change

complexity

InStability/

diversity

Uncertainty curves

Globalization

Technology

Economic /politicalturbulances

The biggest challenge: Increasing Uncertainty

Documents

Evolution of Management Chapter 1&2