IV. Management Yesterday, Today, Tomorrow (Web)

8/8/2019 IV. Management Yesterday, Today, Tomorrow (Web)

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MANAGEMENT YESTERDAY AND TODAYMANAGEMENT YESTERDAY AND TODAY

Theories of ManagemenetTheories of Managemenet --

[email protected]

Rewards/Challenges ofRewards/Challenges of MModernodern MManageranager

The purpose of this lectureThe purpose of this lecture

The knowledge of management history will helpThe knowledge of management history will help

you understand contemporary management.you understand contemporary management.

It shows how the evolution of managementIt shows how the evolution of management

concepts reflect the changing needs ofconcepts reflect the changing needs of

organizations and society as a whole.organizations and society as a whole.


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Historical Background of ManagementHistorical Background of Management

Ancient ManagementAncient Management

Egypt (pyramids) and China (Great Wall)Egypt (pyramids) and China (Great Wall)Venetians (floating warship assembly lines)Venetians (floating warship assembly lines)

Adam SmithAdam Smith

PublishedPublished The Wealth of NationsThe Wealth of Nationsin 1776in 1776

Advocated the division of labor (job specialization) to increaseAdvocated the division of labor (job specialization) to increase

the productivity of workersthe productivity of workers

Industrial RevolutionIndustrial Revolution

Substituted machine power for human laborSubstituted machine power for human labor

Created large organizations in need of managementCreated large organizations in need of management

Development of Major Management TheoriesDevelopment of Major Management Theories

time

Major Approaches to ManagementMajor Approaches to Management

Scientific ManagementScientific Management

General Administrative TheoryGeneral Administrative Theory

Quantitative ManagementQuantitative Management

Organizational BehaviorOrganizational Behavior

Systems ApproachSystems Approach

Contingency ApproachContingency Approach


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Classical Management PerspectiveClassical Management Perspective

Includes bothIncludes both Scientific ManagementScientific Management (USA)(USA) -- Concerned withConcerned with

improving the performance of individual workers (i.e.,improving the performance of individual workers (i.e.,

efficiency).efficiency).

andand

GeneralGeneral AdministrativeAdministrative Theory (Europe)Theory (Europe) -- A theoryA theory

that focuses on managing the organization.that focuses on managing the organization.

Scientific ManagementScientific Management

Fredrick Winslow TaylorFredrick Winslow Taylor

TheThe fatherfather of scientific managementof scientific management

PublishedPublished Principles of Scientific ManagementPrinciples of Scientific Management(1911)(1911)

The theory of scientific managementThe theory of scientific management

Believed in selecting, training, teaching and developingBelieved in selecting, training, teaching and developing

workersworkers..

Using scientific methods to define theUsing scientific methods to define the one best wayone best way for afor a

job to be done:job to be done: Putting the right person on the job with the correct toolsPutting the right person on the job with the correct tools

and equipment.and equipment.

Having a standardized method of doing the job.Having a standardized method of doing the job.

Providing an economic incentive to the worker.Providing an economic incentive to the worker.

TaylorTaylors Four Principles of Managements Four Principles of Management

1. Develop a science for each element of an individuals work,which will replace the old rule-of-thumb method.

2. Scientifically select and then train, teach, and develop theworker.

3. Heartily cooperate with the workers so as to ensure that all

work is done in accordance with the principles of the sciencethat has been developed.

4. Divide work and responsibility almost equally betweenmanagement and workers. Management takes over all workfor which it is better fitted than the workers.


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Scientific Management (contScientific Management (contd)d)

Frank and Lillian GilbrethFrank and Lillian Gilbreth

Focused on increasing worker productivity throughFocused on increasing worker productivity throughthe reduction of wasted motionthe reduction of wasted motion

Developed the microchronometer to time workerDeveloped the microchronometer to time worker

motions and optimize work performancemotions and optimize work performance

Reduced number of movements in bricklaying,Reduced number of movements in bricklaying,

resulting in increased output of 200%resulting in increased output of 200%

Henry GanttHenry Gantt

Developed other techniques, including the GanttDeveloped other techniques, including the Gantt

chart, to improve working efficiency throughchart, to improve working efficiency through

planning/schedulingplanning/scheduling


Henri FayolHenri Fayol

WroteWrote General and Industrial ManagementGeneral and Industrial Management

Believed that the practice of management was distinctBelieved that the practice of management was distinct

from other organizational functionsfrom other organizational functions

Developed fourteen principles of management thatDeveloped fourteen principles of management that

applied to all organizational situationsapplied to all organizational situations

First to describe management as planning,First to describe management as planning,

organizing, leading, and controllingorganizing, leading, and controlling

FayolFayols 14 Principles of Managements 14 Principles of Management

1.1. Division of workDivision of work

2.2. AuthorityAuthority

3.3. DisciplineDiscipline

4.4. Unity of commandUnity of command

5.5. Unity of directionUnity of direction

6.6. Subordination ofSubordination of

individual interestsindividual interests

to the generalto the general

interestinterest

7.7. RemunerationRemuneration

8.8. CentralizationCentralization

9.9. Scalar chainScalar chain

10.10. OrderOrder

11.11. EquityEquity

12.12. Stability of tenureStability of tenure

of personnelof personnel

13.13. InitiativeInitiative

14.14. Esprit de corpsEsprit de corps


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Max WeberMax Weber

Developed a theory of authority based on an idealDeveloped a theory of authority based on an idealtype of organization (bureaucracy)type of organization (bureaucracy) where hewhere he

emphasized:emphasized:

division of labordivision of labor -- predictability,predictability,

reliance on rules and regulationsreliance on rules and regulations -- rationality,rationality,

impersonality,impersonality,

iinflexibility/rigiditynflexibility/rigidity

employment based on expertiseemployment based on expertise -- technical competence,technical competence,

and hierarchy of authorityand hierarchy of authority

WeberWebers Ideal Bureaucracys Ideal Bureaucracy

Classical Management PerspectiveClassical Management PerspectiveTodayToday

ContributionsContributions

Laid the foundation for later developmentsLaid the foundation for later developments

Identified important management processes, functions, skillsIdentified important management processes, functions, skills

Focused attention on management as a valid subject ofFocused attention on management as a valid subject ofscientific inquiryscientific inquiry

LimitationsLimitations

More appropriate for traditional, stable, simple organizationsMore appropriate for traditional, stable, simple organizations

Prescribed universal procedures not appropriate in somePrescribed universal procedures not appropriate in some

settingssettings

In some cases, viewed employees as tools rather thanIn some cases, viewed employees as tools rather than

resourcesresources


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Quantitative Approach to ManagementQuantitative Approach to Management

Quantitative ApproachQuantitative Approach

Also calledAlso called operations researchoperations researchoror managementmanagementsciencescience

Evolved from mathematical and statistical methodsEvolved from mathematical and statistical methods

developed to solve WWII military logistics and qualitydeveloped to solve WWII military logistics and quality

control problemscontrol problems

Focuses on improving managerial decision making byFocuses on improving managerial decision making by

applying:applying:

Statistics, optimization models, information models, andStatistics, optimization models, information models, and

computer simulationscomputer simulations

Quantitative ManagementQuantitative Management PerspectivePerspectiveTodayToday


Developed quantitative techniques to assist in decision making.Developed quantitative techniques to assist in decision making.

Application of models has increased awareness and understandingApplication of models has increased awareness and understanding ofof

complex processes and situations.complex processes and situations.

Has been useful in the planning and controlling processes.Has been useful in the planning and controlling processes.


Cannot fully explain or predict behavior.Cannot fully explain or predict behavior.

Mathematical sophistication may come at the expense of other skiMathematical sophistication may come at the expense of other skills.lls.

Models may require unrealistic or unfounded assumptions.Models may require unrealistic or unfounded assumptions.

Behavioral ManagementBehavioral Management PerspectivePerspective

Organizational Behavior (OB)Organizational Behavior (OB)

The study of the actions of people at work; people areThe study of the actions of people at work; people are

the most important asset of an organizationthe most important asset of an organization

Early OB AdvocatesEarly OB Advocates

Robert OwenRobert Owen

Hugo MunsterbergHugo Munsterberg

Mary Parker FollettMary Parker Follett

Chester BarnardChester Barnard


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Early Advocates of OBEarly Advocates of OB

Experimental findingsExperimental findings Productivity unexpectedly increased under imposed

adverse working conditions. The effect of incentive plans was less than expected.

Workers established informal levels of acceptable

individual output. Over-producing workers were labeled rate busters andunder-producing workers were considered chiselers.

Research conclusionResearch conclusionSocial norms, group standards and attitudes more strongly

influence individual output and work behavior than domonetary incentives.

The Hawthorne StudiesThe Hawthorne Studies

Behavioral ManagementBehavioral Management PerspectivePerspective

Human Relations MovementHuman Relations Movement

perspective that workers respond primarily to the socialperspective that workers respond primarily to the social

context of workcontext of work

Abraham MaslowAbraham Maslow

posited a hierarchy of needsposited a hierarchy of needs

Douglas McGregorDouglas McGregor

proposed Theory X and Theory Y concepts ofproposed Theory X and Theory Y concepts of

managerial beliefsmanagerial beliefs


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Hierarchy of needsHierarchy of needs

Theory X

People do not like work and

try to avoid it.

People do not like work, so

managers have to control,

direct, coerce, and threaten

employees to get them to

meet organizational goals.

People prefer to be directed,to avoid responsibility, and to

want security; they have little

ambition.

Work is a natural part ofpeoples lives.

People are internally motivatedby commitment.

People are committed to goalsto the degree they receiverewards.

People will seek and accept

responsibility. People have the capacity to be

innovative.

People are bright, but mostlyunder-utilized.

Theory Y

Behavioral Management PerspectiveBehavioral Management PerspectiveTodayToday


Provided important insights into motivation, group dynamics, andProvided important insights into motivation, group dynamics, and otherother

interpersonal processes.interpersonal processes.

Focused managerial attention on these critical processes.Focused managerial attention on these critical processes.

Challenged the view that employees are tools and furthered the bChallenged the view that employees are tools and furthered the beliefelief

that employees are valuable resources.that employees are valuable resources.


Complexity of individuals makes behavior difficult to predict.Complexity of individuals makes behavior difficult to predict.

Many concepts not put to use because managers are reluctant to aMany concepts not put to use because managers are reluctant to adoptdopt

them.them.

Contemporary research findings are not often communicated toContemporary research findings are not often communicated to

practicing managers in an understandable form.practicing managers in an understandable form.


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The Systems ApproachThe Systems Approach

System DefinedSystem Defined

A set of interrelated and interdependent partsA set of interrelated and interdependent partsarranged in a manner that produces a unified whole.arranged in a manner that produces a unified whole.

Basic Types of SystemsBasic Types of Systems

Closed systemsClosed systems

Are not influenced by and do not interact with theirAre not influenced by and do not interact with their

environment (all system input and output is internal).environment (all system input and output is internal).

Open systemsOpen systems

Dynamically interact to their environments by taking in inputsDynamically interact to their environments by taking in inputs

and transforming them into outputs that are distributed intoand transforming them into outputs that are distributed into

their environments.their environments.

The Organization as an Open SystemThe Organization as an Open System

Rensis LikertRensis Likert

Exploitive authoritative system (1)Exploitive authoritative system (1)

In this type of management system the job of employees/subordinaIn this type of management system the job of employees/subordinatestes

is to abide by the decisions made by managers and those with ais to abide by the decisions made by managers and those with a

higher status than them in the organisation. The subordinates dohigher status than them in the organisation. The subordinates do notnot

participate in the decision making. The organisation is concerneparticipate in the decision making. The organisation is concernedd

simply about completing the work. The organisation will use fearsimply about completing the work. The organisation will use fear andand

threats to make sure employees complete the work set. There is nthreats to make sure employees complete the work set. There is noo

teamwork involved.teamwork involved.

Benevolent authoritative system (2)Benevolent authoritative system (2)

Just as in an exploitive authoritative system, decisions are madJust as in an exploitive authoritative system, decisions are made bye by

those at the top of the organisation and management. Howeverthose at the top of the organisation and management. However

employees are motivated through rewards (for their contribution)employees are motivated through rewards (for their contribution)

rather than fear and threats. Information may flow from subordinrather than fear and threats. Information may flow from subordinatesates

to managers but it is restricted toto managers but it is restricted to what management want to hearwhat management want to hear..


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Rensis LikertRensis Likert

Consultative system (3)Consultative system (3)

In this type of management system, subordinates are motivated byIn this type of management system, subordinates are motivated by

rewards and a degree of involvement in the decision making procerewards and a degree of involvement in the decision making process.ss.Management will constructively use their subordinates ideas andManagement will constructively use their subordinates ideas and

opinions. However involvement is incomplete and major decisionsopinions. However involvement is incomplete and major decisions areare

still made by senior management. There is a greater flow of infostill made by senior management. There is a greater flow of informationrmation

(than in a benevolent authoritative system) from subordinates to(than in a benevolent authoritative system) from subordinates to

management. Although the information from subordinate to managermanagement. Although the information from subordinate to manager isis

incomplete and euphemistic.incomplete and euphemistic.

Participative (group) system (4)Participative (group) system (4)

Management have complete confidence in their subordinates/employManagement have complete confidence in their subordinates/employees.ees.

There is lots of communication and subordinates are fully involvThere is lots of communication and subordinates are fully involved in theed in the

decision making process. Subordinates comfortably express opiniodecision making process. Subordinates comfortably express opinionsns

and there is lots of teamwork. Teams are linked together by peopand there is lots of teamwork. Teams are linked together by people, whole, who

are members of more than one team. Employees throughout theare members of more than one team. Employees throughout the

organisation feel responsible for achieving the organisationorganisation feel responsible for achieving the organisations objectives.s objectives.

Implications of the Systems ApproachImplications of the Systems Approach

Coordination of the organizationCoordination of the organizations parts iss parts is

essential for proper functioning of the entireessential for proper functioning of the entire

organization.organization.

Decisions and actions taken in one area of theDecisions and actions taken in one area of the

organization will have an effect in other areas oforganization will have an effect in other areas of

the organization.the organization.

Organizations are not selfOrganizations are not self--contained and,contained and,therefore, must adapt to changes in theirtherefore, must adapt to changes in their

external environment.external environment.

The Contingency ApproachThe Contingency Approach

Contingency Approach DefinedContingency Approach Defined

Also sometimes called theAlso sometimes called the situational approach.situational approach.

There is no one universally applicable set ofThere is no one universally applicable set of

management principles (rules) by which to managemanagement principles (rules) by which to manage

organizations.organizations.

Organizations are individually different, face differentOrganizations are individually different, face different

situations (contingency variables), and requiresituations (contingency variables), and require

different ways of managing.different ways of managing.


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Popular Contingency VariablesPopular Contingency Variables

Organization size

As size increases, so do the problems of coordination.

Routineness of task technology

Routine technologies require organizational structures,leadership styles, and control systems that differ from

those required by customized or nonroutine technologies.

Environmental uncertainty

What works best in a stable and predictable environmentmay be totally inappropriate in a rapidly changing andunpredictable environment.

Individual differences

Individuals differ in terms of their desire for growth,autonomy, tolerance of ambiguity, and expectations.

Current Trends and IssuesCurrent Trends and Issues

GlobalizationGlobalization

EthicsEthics

EE--businessbusiness

Knowledge ManagementKnowledge Management

Learning OrganizationsLearning Organizations

Current Trends and Issues (contCurrent Trends and Issues (contd)d)

GlobalizationGlobalization

Management in international organizationsManagement in international organizations

Political and cultural challenges of operating in aPolitical and cultural challenges of operating in a

global marketglobal market

Working with people from different culturesWorking with people from different cultures

Coping with anticapitalist backlashCoping with anticapitalist backlash

Movement of jobs to countries with lowMovement of jobs to countries with low--cost laborcost labor

EthicsEthics

Increased emphasis on ethics education in collegeIncreased emphasis on ethics education in college

curriculumscurriculums

Increased creation and use of codes of ethics byIncreased creation and use of codes of ethics by

businessesbusinesses


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A Process for Addressing Ethical DilemmasA Process for Addressing Ethical Dilemmas

Step 1: What is the ethical dilemma?

Step 2: Who are the affected stakeholders?

Step 3: What personal, organizational, andexternal factors are important tomy decision?

Step 4: What are possible alternatives?

Step 5: Make a decision and act on it.


Entrepreneurship DefinedEntrepreneurship Defined

The process of starting new businesses, generally inThe process of starting new businesses, generally in

response to opportunities.response to opportunities.

Entrepreneurship processEntrepreneurship process

Pursuit of opportunitiesPursuit of opportunities

Innovation in products, services, or business methodsInnovation in products, services, or business methods

Desire for continual growth of the organizationDesire for continual growth of the organization


EE--Business (Electronic Business)Business (Electronic Business)

The work preformed by an organization usingThe work preformed by an organization using

electronic linkages to its key constituencieselectronic linkages to its key constituencies

EE--commerce: the sales and marketing aspect of an ecommerce: the sales and marketing aspect of an e--

businessbusiness

Categories of ECategories of E--BusinessesBusinesses

EE--business enhanced organizationbusiness enhanced organization

EE--business enabled organizationbusiness enabled organization

Total eTotal e--business organizationbusiness organization


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Categories of ECategories of E--Business InvolvementBusiness Involvement


Learning OrganizationLearning Organization

An organization that has developed the capacity toAn organization that has developed the capacity to

continuously learn, adapt, and change.continuously learn, adapt, and change.

Knowledge ManagementKnowledge Management

The cultivation of a learning culture whereThe cultivation of a learning culture where

organizational members systematically gather andorganizational members systematically gather and

share knowledge with others in order to achieveshare knowledge with others in order to achieve

better performance.better performance.

Learning Organization versus Traditional OrganizationLearning Organization versus Traditional Organization


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Terms to KnowTerms to Know

division of labor (or jobdivision of labor (or job

specialization)specialization)

scientific managementscientific management

general administrative theorygeneral administrative theory

principles of managementprinciples of management

bureaucracybureaucracy

quantitative approachquantitative approach

organizational behavior (OB)organizational behavior (OB)

Hawthorne StudiesHawthorne Studies

systemsystem

closed systemsclosed systems

open systemsopen systems

contingency approachcontingency approach

entrepreneurshipentrepreneurship

ee--business (electronicbusiness (electronic

business)business)

ee--commerce (electroniccommerce (electronic

commerce)commerce)

intranetintranet

learning organizationlearning organization

knowledge managementknowledge management

Documents

IV. Management Yesterday, Today, Tomorrow (Web)