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HISTORICAL
DEVELOPMENT OF OB
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The Industrial Revolutions Influence
On Management Practices
Industrial revolution
Machine power began to substitute for humanpower
Lead to mass production of economical goods
Improved and less costly transportation systemsbecame available
Created larger markets for goods.
Larger organizations developed to serve largermarkets
Created the need for formalized management practices.
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The advent of modern industry
resulted in:
Long hours of work
Exploitation of woman and children
No compensation for injury
Machineries were not fenced
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Evolution of ManagementThought
Organizational Behavior
Human Relations
Hawthorne Studies
Era of Scientific Management
Era of Welfarism
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ERA OF WELFARISM
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ERA OF WELFARISM- ROBERT OWEN
Father of Welfare and Co-operativeMovement
A Paternalistic attitude towards
employeesHe introduced a form of MentalRevolution in the people
The workers are not treated ascommodities instead they weretreated as people with flesh and blood
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He improved the working conditionsand developed a spirit of co-operationamong the workers and management
giving importance to their safety,welfare and security
He introduced housing facilities and
also provided education to workersand children
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ERA OF SCIENTIFIC MANAGEMENT
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CHARLES BABBAGE
A Mathematician in CambridgeUniversity
He found out a Mathematicalcalculator in that he concealed ananalytical machine and later thiscame to be the first modern digitalcomputer
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He is known in Management forpublishing a book in 1832 titled
On the Economy of Machines andManufactures
In the book he proposed usingscientific method in analyzingbusiness problems
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He pointed out the importance ofeconomic analysis in locatingfactories,
Use of skill differentials in wagepayment plans
Concept of division of labour wasintroduced
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Frederick.Winslow.Taylor
Father of Scientific Management
Advocated the use of the scientific method to definethe one best way for a job to be done
Believed that increased efficiency could be
achieved by selecting the right people for thejob and training them to do it precisely in theone best way.
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Four principles ofScientific Management
1. Develop a science for each element of anindividuals work, which replaces the old rule-of-thumb method.
2. Scientifically select and then train, teach, anddevelop the worker. (Previously, workers chose
their own work and trained themselves as bestthey could.)
3. Heartily cooperate with the workers so as toensure that all work is done in accordance with
the principles of the science that has beendeveloped.
4. Divide work and responsibility almost equallybetween management and workers. (Previously,almost all the work and the greater part of the
responsibility were thrown upon the workers.)
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Scientific Management
Key Features
Introduction of standardized procedures includingtask completion times
Emphasizes the productivity of the individualworker
The search for the most appropriate andstandardized method of performing a task
Introduction of financial incentives to motivate staff
Ensure full control of employees by supervisorsand managers
Separated managerial work from operative work.
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F.W.Taylor conducted
2 important studies
Work Study
Time Study and Motion Study
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According to F.W.Taylor
Each operation is a science
Harmony of group action rather thandiscord
Max. output using multi skilled workers
Ratebusters
Scientific selection for training and
placement of workersTaylor devised an incentive scheme ie.,Fair Days Work and Fair Days Pay
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Limitation
There is denial of human approach
Workers are considered as cogs ofthe wheel
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Henry.L.Gantt
He proposed the idea of Bonus for theworker for achieving the daily std
To monitor progress of operations Gantt
devised a simple charting system the GanttChart
He improved upon Taylors system ofdifferential wage payment and brought out
Task and bonus Wage systemIn this incentive plan all are given minimumincentive and special sympathy for underprivileged
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The Scientific Management approachconcerned itself with productionefficiency at the blue-collar level of anorganisation and at that time anotherbody of thought developed
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HENRI FAYOL
An engineer in French MiningCompany
He viewed management as ateachable theory dealing withPlanning, Organizing, Commanding,Co-ordinating and Controlling
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Industrial activities - 6 groups
Technical
Commercial
FinancialSecurity
Accounting
Managerial
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Fayols Fourteen Principles of
Management
Division of work (Specialization)AuthorityDisciplineUnity of CommandUnity of direction
Subordination of individual interest to the generalinterestRemuneration of personnelCentralizationScalar Chain
OrderEquityStability of tenure of personnelInitiativeEsprit de Corps
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Hawthorne Studies
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Hawthorne studies- Elton Mayo
(1924-1932)
The real beginning of applied research inthe area of OB started with Hawthorneexpts
In 1924, a group of Professors fromHarvard Business School began an enquiryinto the human aspects of work andworking conditions at the Hawthorne plantof Western electric Company, Chicagowhich was engaged in producing bells andother electrical equipments for telephoneindustry
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The study provided new insights intogroup norms and behaviors
Hawthorne Studies have thrown lightinto, how characteristics of the worksetting affected worker fatigue and
performance
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Series of experiments
Illumination study (Illumination &Productivity)
Relay assembly test room (Change in
working hours and workingconditions)
Mass interviewing prog (worker
attitude and sentiments)Bank wiring observation room (Socialaspect on work organisation)
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The Hawthorne Studies
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Illumination studies
Illumination studies constituted thefirst step of experiments
Designed to test the effect of lightingintensity on worker productivity
For the study the population weredivided into experimental group and
control group
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Lighting was decreased in the experimentalgroup and the conditions of lighting werekept constant for the control group tofindout whether lighting has any impact onproductivity
The researchers were surprised to discoverthat productivity increased roughly at thesame rate in both the groups
The performance in the experimental group
declined only when a light of moon lightintensity was given, where they complainedthat they could hardly see anything
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Relay Assembly Test Room Study
The study involved 5 women whoassembled electrical relays in therelay assembly test room
The researcher made certain changesin the work conditions
They changed the usual supervisor
arrangement from the scene
The workers were asked to follow thedirections of the researchers
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The workers were given privileges like
To leave their work situation withoutpermission
Free mid-morning lunch
A five day work week
Generally, productivity increased overthe period of study, regardless of howthe factors were manipulated
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Mass interviewing programme
Investigate connection betweensupervisory practices and
employee moraleEmployees expressed their ideas
and feelings (e.g., likes anddislikes)
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Bank wiring observation room
A group of 14 men who wired telephonebanks was observed in a standard shopcondition
An observer was stationed in the room withinstructions to take continuous notes on theworkers actions
The observer was not allowed to giveorders or get involved in conversations withthe workers
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The observer noted that the workershad established an informal dailynorm of 6600 units per person even
though some of the workers are ableto excel the target
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The incentive system was that themore the worker produced, the moremoney the worker could earn
The best producers will be laid offlast, and thus they could be moresecure by producing more
In the face of the managementrationale, almost all the workersrestricted output
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The norms the group establishedwere a number of don'ts
Dont be a rate buster,
Dont be a chiseler
To enforce these they used variousnorms
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Social ostracism, ridicule, and namecalling, were the things used by thegroup to enforce restriction
Binging was one game used wherebyratebusters were disturbed
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Thus the covert organisationprevalent in the formal organisationsurfaced
Social groups can influenceproduction and individual workbehavior
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The Hawthorne Studies
Demonstrated the importance ofunderstanding how the feelings, thoughts,and behavior of work-group members and
managers affect performance
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Hawthorne Effect
Hawthorne effect
Social norms or standards of the
group are the key determinants ofindividual work behavior.