[MG-En-lectures] [02] the Evolution of Management

8/10/2019 [MG-En-lectures] [02] the Evolution of Management

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Dan Lungescu, PhD, assistant professor

Irina Salan , PhD, assistant professor2014-2015

ManagementPart I: Introduction

Ch. 2. The evolution ofmanagement


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Course outline

Part I: Introduction

Part II: Planning

Part III: Organizing

Part IV: Leading

Part V: Controlling

Management


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Part I outline

Part I: Introduction

Ch. 1. Managers job

Ch. 2. The evolution of management

Ch. 3. Organizational environments

Ch. 4. Social responsibility and ethics

Management


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Learning objectivesAfter studying this chapter, you should be able to:

Identify several early innovative management practices andexplain the basic evolution of management theories.Trace the preclassical contributions to the field of management.Explain the major approaches within the classical viewpoint of

management.Describe the major developments contributing to theestablishment of the behavioral viewpoint .Explain the major approaches within the quantitative viewpoint .Discuss the relevance of systems theory and contingency theory

to the field of management.Explain how management in Japan influenced the emergingTheory Z viewpoint of management.Explain how current knowledge about management is the resultof innovative processes involving many management pioneers.


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Chapter 2 outline

A. The major viewpoints

B. Early management

C. The birth of management ideas

D. Classical viewpoint

E. Behavioral viewpoint

F. Quantitative viewpoint

G. Contemporary viewpoints


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A. The major viewpoints

Outline A. The major viewpoints

Management theory

Preclassicalcontributors

ScientificManagement

BureaucraticManagement

AdministrativeManagement

Earlybehaviorists

Hawthornestudies

HumanRelations

movement

Managementscience

Operationsmanagement

Managementinformation

systems

Systems theory

Contingencytheory

Emergingviews

Behavioralscience

approach

Classicalviewpoint

Behavioralviewpoint

Contemporaryviewpoints

Quantitativeviewpoint


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B. Early management

Key decisions were made by a central authority such as aking.Organizations managed on a basis of a ruler's divine right ,a church's use of dogma , or the military's use of discipline .Little need to develop and record a formal body ofmanagement.Early ideas of management tended to reappear or bereinvented sporadically in one culture after another.Political, religious, and economic beliefs did not allowbusiness organizations to develop to any degree.

Outline B. Early management

Before the Industrial Revolution (England, 18th century).Beginnings: thousands of years back in time.

Early management


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Early management (2)

Sumerians : used written rules and regulations for governance.Egyptians : used management practices to construct pyramids.Babylonians : used extensive set of laws and policies for governance.Greeks : used different governing systems for cities and state.Romans : used organization structure for communication and control.Chinese : used extensive organization structure for government agenciesand the arts.Venetians : organization design and planning concepts to control the seas.

Outline B. Early management (2)

3000BC

2500BC

2000BC

1500BC

1000BC

500BC

AD1

AD500

AD1000

AD1500

SumeriansEgyptians

BabyloniansGreeks

RomansChinese

Venetians


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Early management concepts

Outline B. Early management Early management concepts

Chinese bureaucracy (1000 BC) fully developed into ahierarchy of officials based upon a merit rating system.

Hierarchy

An Egyptian practice of allocating around 10 servants to each

supervisor.

Rule of ten

The Hebrews under Moses, then the ancient Roman army:the concepts of span of control and a hierarchy of authority.

Span of control. Hierarchy of authority

Ancient Greeks : Aristotle (in his Politics ) commented on thevalue of specialization of labor, departmentalization, anddelegation of authority, among other managerial concepts.

Specialization of labor. Departmentalization. Delegation


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Machiavelism

Outline B. Early management Machiavelism

An exposition on how to rule successfully by gaining and holdingpower .His comments on the nature of people reflects a set of assumptionswhich sounds like an early version of what was much later referredto as Theory X management.

Niccol Machiavelli: The Prince (1513)

Whoever desires to found a state and give it laws, must

start with the assumption that all men are bad and everready to display their vicious nature, whenever they may find

occasion for it.


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Cottage industry

Skilled non-agricultural work was performed by craft-workers

who, using relatively simple, all-purpose tools , produced anentire product , such as a chair or a watch, and sold it directlyto individual consumers.

Outline B. Early management Cottage industry

Merchants sent material to homes where the families spun, bleached,or dyed the cloth before returning it to the merchant to sell.

Cottage industry


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Industrial revolution

Outline B. Early management Industrial revolution

First workable steam engine (James Watt):

Muscle power replaced with machine power .Power engines housed in a central factory loca tion workers left cottages to go to work in factories.

Steam power lower production costs , expanded marketsfor more cheaply priced and more available goods.

Expanding market more workers , more machines , and alarger scale of production on a regular basis increasing

need to find methods of organizing and directing .Governing way of government, church, or militaryreplaced by a new philosophy: capitalism (laissez-faireeconomics).


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C. The birth of management ideas

Outline C. The birth of management ideas

Recognized the importance of human resources .Became interested in the working and living conditions of hisemployees upgraded streets, houses, sanitation,educational system.

Robert Owen (1771-1858, British entrepreneur)

The father of modern computing (first practical mechanicalcalculator and a prototype of modern computers); predictedthe specialization of mental work ; suggested profit sharing .

Charles Babbage (1792-1871, English mathematician)

Outlined the importance of management as a science andcalled for the development of management principles .

Henry R. Towne (1844-1924, American engineer)


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D. Classical viewpoint

Outline D. Classical viewpoint

A perspective on management that emphasizes finding ways tomanage work and organizations more efficiently.

Classical viewpoint

I. Scientific management (USA)

II. Bureaucratic management (Germany)

III. Administrative management (France)

Classical

organizationaltheory


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I. Scientific management

Outline D. Classical viewpoint I. Scientific management

An approach that emphasizes the scientific study of work methodsin order to improve worker efficiency.

Scientific management

1. Frederick Winslow Taylor [1856-1915]

2. Frank and Lillian Gilbreth [1868-1924 / 1878-1972]

3. Henry Laurence Gantt [1861-1919]

Major representatives:

4. Harrington Emerson [1853-1931]


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2. Frank & Lillian Gilbreth

Outline D. Classical viewpoint I. Scientific management 2. Frank & Lillian Gilbreth

Proposed using motion studies to streamlinethe bricklaying process.

Designed special scaffolding for different types

of jobs. Reduced the motions involved in bricklayingfrom 18 to 4 workers increased the numberof bricks laid per day from 1000 to 2700 withno increase in physical exertion.

Isolated 17 basic motions therblig s. Lillians doctoral thesis: The psychology of management a pioneer in this field.

Frank & Lillian Gilbreth


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3. Henry Laurence Gantt

Outline D. Classical viewpoint I. Scientific management 3. Henry L. Gantt

Worked with Taylor in several companies independent consultant.

Gantt chart : a graphic aid to planning,scheduling, and control.

A unique pay incentive system (not only for

workers but also for their supervisors).

Henry Laurence Gantt

Gantt chart software:

GanttProject (free)

Microsoft Project ConceptDraw PROJECT SmartDraw Gant Chart Software Project KickStart
http://www.ganttproject.biz/http://office.microsoft.com/en-us/project/fx100487771033.aspxhttp://www.conceptdraw.com/en/products/project/ap-gantt-charts.phphttp://www.smartdraw.com/specials/projectchart.asphttp://www.projectmanager.com/gantt-chart-software.phphttp://www.projectkickstart.com/products/project_kickstart.cfmhttp://www.projectkickstart.com/products/project_kickstart.cfmhttp://www.projectmanager.com/gantt-chart-software.phphttp://www.smartdraw.com/specials/projectchart.asphttp://www.conceptdraw.com/en/products/project/ap-gantt-charts.phphttp://office.microsoft.com/en-us/project/fx100487771033.aspxhttp://www.ganttproject.biz/


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Gantt chart: Excel file

Outline D. Classical viewpoint I. Scientific management 3. H.L. Gantt Excel Gantt chart

htt p://www.vertex42.com/ExcelTemplates/excel-gantt-chart.html
http://www.vertex42.com/ExcelTemplates/excel-gantt-chart.htmlhttp://www.vertex42.com/ExcelTemplates/excel-gantt-chart.htmlhttp://www.vertex42.com/ExcelTemplates/excel-gantt-chart.html


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II. Bureaucratic management

Outline D. Classical viewpoint II. Bureaucratic management

German economist and lawyer. One of the originators of sociology. Devoted his attention to the organization itself as an object of study. Did not directly deal withtask-level issues.

Concerned with designing a structure of authority-activity relationships which wouldfacilitate the attainment of organizational goals.

He developed the concept of bureaucracy as anideal type of organization .

Max Weber [1864-1920]

An approach that emphasizes the need for organizations to operatein a rational manner rather than relying on the arbitrary whims of owners and managers.

Bureaucratic management


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Max Weber

Outline D. Classical viewpoint II. Bureaucratic management Max Weber

Experience tends universally to show that the purelybureaucratic type of administrative organization [...] is, from

a purely technical point of view, capable of attaining thehighest degree of efficiency and is in this sense formally the

most rational known means of carrying out imperativecontrol over human beings. It is superior to any other form inprecision, in stability, in the stringency of its discipline, and in

its reliability

Did not invent the bureaucratic form of organization, merely described it in detail andshowed why it was superior to previous types of systems such as monarchies and dictatorships.

Contribution


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Bureaucracy

Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy

in detail

Standardized procedures (rule-following). Formal division of responsibility. Hierarchy. Impersonal relationships.

Core features of bureaucracy

In practice the interpretation and execution of policy can leadto informal influence.

The structure and set of regulations in place to control activity,usually in large organizations and government.

Bureaucracy


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Characteristics of bureaucracy

Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy Characteristics

Written rules and procedures specify the behaviors desired frommembers, facilitate coordination and ensure uniformity.

Formal rules and procedures

Rules, procedures, and sanctions are applied uniformly regardless of individual personalities and personal considerations.

Impersonality

Jobs are broken down into routine, well-defined tasks so thatmembers know what is expected of them and can becomeextremely competent at their particular subset of tasks.

Specialization of labor


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Characteristics of bureaucracy (2)

Outline D. Classical viewpoint II. Bureaucratic management Bureaucracy Characteristics (2)

Selection and promotion are based on the qualifications andperformance.

Career advancement based on merit

Multiple levels of positions, with carefully determined reportingrelationships among levels, provide supervision of lower offices by

higher ones.

Well-defined hierarchy


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III. Administrative management

Outline D. Classical viewpoint III. Administrative management

An approach that focuses on principles that can be used bymanagers to coordinate the internal activities of organizations.

Administrative management

1. Henry Fayol [1841-1925]

2. Chester Barnard [1886-1961]

Major representatives:


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Henri Fayol

Outline D. Classical viewpoint III. Administrative management Henri Fayol

French industrialist, mining engineer ManagingDirector of a large coal and iron company.

Focused on organization-level issues (problems facinggeneral managers in upper management positions).

1916: General and industrial management

[ Administration industrielle et gnrale ].

Henri Fayol [1841-1925]

1. Planning

2. Organizing3. Commanding4. Coordinating5. Controlling

Functions ofmanagement

1. Production

2. Financial3. Accounting4. Commercial5. Security6. Administrative

Enterprisesfunctions

[14 principles

within4 major areas ]

Principles ofmanagement


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Fayols 4 major areas

Outline D. Classical viewpoint III. Administrative management Henri Fa yol Areas

A hierarchy of authority.

Scalar process

A person could usually only control five or six people.

Span of control

Not only should jobs be broken down into their smallest components(specialization), but also an organization should be broken down into aseries of specialized departments.

Departmentalization

To allocate to the manager a staff person (or group) who was an expert in aspecialized area and could provide advice and counsel to the manager.

Line and staff


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Fayols principles of management

Outline D. Classical viewpoint III. Administrative management Henri Fa yol Principles

Encourages continuous improvement in skills and the development of improvements in methods.

Specialization of labor

The right to give orders and the power to exact obedience.

Authority

No slacking, bending of rules. The workers should be obedient andrespectful of the organization.

Discipline

Each employee has one and only one boss.

Unity of command

A single mind generates a single plan and all play their part in that plan.

Unity of direction


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Fayols principles of mg. (2)

Outline D. Classical viewpoint III. Administrative management Henri Fayol Principles (2)

When at work, only work things should be pursued or thought about.

Subordination of individual interests

Employees receive fair payment for services, not what the company can getaway with.

Remuneration

Consolidation of management functions. Decisions are made from the top.

Centralization

Formal chain of command running from top to bottom of the organization,like military.

Chain of superiors (line of authority)

All materials and personnel have a prescribed place, and they must remainthere.

Order


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Fayols principles of mg. (3)

Outline D. Classical viewpoint III. Administrative management Henri Fayol Principles (3)

Equality of treatment (but not necessarily identical treatment).

Equity

Limited turnover of personnel. Lifetime employment for good workers.

Personnel tenure

Thinking out a plan and do what it takes to make it happen.

Initiative

Harmony, cohesion among personnel. It's a great source of strength in theorganization. For promoting esprit de corps, the principle of unity of command should be observed and the dangers of divide and rule and theabuse of written communication should be avoided.

Esprit de corps


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E. Behavioral viewpoint

Outline E. Behavioral viewpoint

Developed as a school of thought in reaction to the cold,impersonal work place of the Classical viewpoint (Traditionalmanagement - TM).

Behavioral viewpoint

Focused on technological and structural considerations.Classical theorists generally viewed individuals as mechanisms of production . They were primarily interested in finding ways fororganizations to use these productive mechanisms more efficiently .Dysfunctional consequences of TM:

Job dissatisfaction and low employee motivation. Displacement of organizational goals. Labor-management conflict. Inability to respond to changing conditions. Customer/client dissatisfaction.

Traditional management


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Behavioral viewpoint (2)

Outline E. Behavioral viewpoint (2)

A perspective on management that emphasizes the importance of attempting to understand the various factors that affect humanbehavior in organizations.

Behavioral viewpoint

I. The early behaviorists

II. The Hawthorne studies

III. The Human Relations movement

Development:

IV. The more contemporary behavioral science approach


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2. Mary Parker Follett

Outline E. Behavioral viewpoint I. Early behaviorists 2. Mary Parker Follett

American, political science. Social worker who became interested inemployment and workplace issues.

Focused on group dynamics in her work andwritings.

Pioneering ideas on power sharing , conflictresolution , integration of organizational systems .

Members of organizations are continuallyinfluenced by the groups within which theyoperates groups have the capacity to exercisecontrol over themselves and their own activities.

Mary Parker Follett [1868-1933]


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II. Hawthorne studies

Outline E. Behavioral viewpoint II. Hawthorne studies

A group of studies conducted at the Hawthorne plant of theWestern Electric Company during the late 1920s and early 1930swhose results ultimately led to the human relations view of management.

Hawthorne studies

1. The illumination studies

2. The relay assembly room tests

3. The interviewing program

Four key research projects:

4. The bank wiring room study


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1. The illumination studies

Outline E. Behavioral viewpoint II. Hawthorne studies 1. The illumination studies

Examining the effect of illumination on worker productivity.

Objective

Improved lighting led to improved performance.

Previous research

Illumination seemed to only have a minor influence on output. Other psychological variables were probably involved.

Failure (abandoned in 1927)

A new series of studies were begun in the relay assembl y test room .

Ending


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The illumination studies: results

Outline E. Behavioral viewpoint II. Hawthorne studies 1. The illumination studies : Results

amount of light reductionlow high

p r o

d u c t i v i t y

l o w

h i g h

control group: expected

experimental group: expected

control group: actual

experimental group: actual


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3. The interviewing program

Outline E. Behavioral viewpoint II. Hawthorne studies 3. The interviewing program

The founder of Human Relations movement . Professor at Harvard University. 1930: The interviewing program. 1933: The social problems of an industrialised civilization .

George Elton Mayo [1880-1949]

To get the workers to express what was on their minds to listen to theperson and summarize from time to time what had been said; no advicewas to be given. The average length of each interview was 1-1/2 hours.

The interviewer's job

1. Just talking about a problem appeared to act as an emotional release that seemed to make the workers feel better even though their situationhad not changed.

2. The worker should not be thought of as an isolated individual, but as amember of a group or groups.

Results


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Hawthorne studies: conclusions

Outline E. Behavioral viewpoint II. Hawthorne studies 4. The bank wiring room study

The reaction of people to the experiment itself instead of to the plannedchange.

Hawthorne effect

Social organization formed by employees to provide the social benefits notprovided by the company's formal organization.

Informal organization

Workers are not so much driven by pay and working conditions as bypsychological needs which can be satisfied by belonging to a work group.

People feel more positive about their work when they have a chance toparticipate in decisions regarding that work.

Concern by the supervisor for the workers' needs and recognition of theircontribution to the production process make workers feel more positiveabout the organization and more willing to perform at a high level.

Main contributions


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III. Human Relations movement

Outline E. Behavioral viewpoint III. Human relations movement

1. Emphasis was placed on building more collaborative andcooperative relationships between supervisors and workers.

2. Managers now needed social skills in addition to technical skills.3. Managers required a better understanding of how to make

workers feel more satisfied with their jobs.

Directions provided by the Hawthorne studies

1. Abraham Maslow

2. Douglas McGregor


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1. Abraham Maslow

Outline E. Behavioral viewpoint III. Human relations movement 1. Abraham Maslow

American, Ph.D. in psychology, chairman of thepsychology department at Brandeis University.

The theory of the hierarchy of needs 3assumptions about human nature:1. Human beings have needs that are never

completely satisfied .2. Human action is aimed at fulfilling the needs

that are unsatisfied at a given point in time .

3. Needs fit into a somewhat predictablehierarchy , ranging from basic to higher-levelneeds.

Abraham Maslow [1908-1970]

physiological

safety

belongingness

esteem

self-actualization


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2. Douglas McGregor

Outline E. Behavioral viewpoint III. Human relations movement 2. Douglas McGregor

Ph.D. at Harvard, professor of industrialmanagement at the Massachusetts Institute of Technology.

He developed the concept of Theory X versusTheory Y , a dichotomy dealing with the possibleassumptions that managers make about workers.

These 2 theories describe managers attitudestowards employees, and not employee behavior!

Douglas McGregor [1906-1964]

Theory X assumptions

Theory Y assumptions


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Theory X assumptions

1. The average person dislikes work and will try to avoid it.

2. Most people need to be coerced , controlled , directed , and

threatened with punishment to get them to work towardorganizational goals.

3. The average person wants to be directed , shunsresponsibility , has little ambition , and seeks security above

all.

Outline E. Behavioral viewpoint III. Human relations movement 2. D. McGregor Theory X


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Theory Y assumptions

1. Most people do not inherently dislike work; the physical and

mental effort involved is as natural as play or rest .2. People will exercise self-direction and self-control to reach goals

to which they are committed; external control and threat ofpunishment are not the only means for ensuring effort towardgoals.

3. Commitment to goals is a function of the rewards available,particularly rewards that satisfy esteem and self-actualizationneeds.

4. When conditions are favorable, the average person learns notonly to accept but also to seek responsibility .

5. Many people have the capacity to exercise a high degree ofcreativity and innovation in solving organizational problems.

6. The intellectual potential of most individuals is only partiallyutilized in most organizations.

Outline E. Behavioral viewpoint III. Human relations movement 2. D. McGregor Theory Y


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IV. Behavioral science approach

Outline E. Behavioral viewpoint IV. Behavioral science approach

An approach that emphasizes scientific research as the basis fordeveloping theories about human behavior in organizations thatcan be used to establish practical guidelines for managers.

Behavioral science

Frederick Herzberg [19232000]

Takes a holistic view of behavior by considering individual, group,and organization processes.

Organizational behavior

d k b


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Frederick Herzberg

Outline E. Behavioral viewpoint IV. Behavioral science approach Frederick Herzberg

American psychologist.

2 major contributions:1. Work enrichment.2. Two factor theory (Motivator-hygiene theory; 1959).

Frederick Herzberg [19232000]

2 kinds of factors:1. Motivator factors: increase satisfaction (achievement,

recognition, work itself, responsibility, promotion, growth).2. Hygiene factors: decrease dissatisfaction (pay and benefits,

company policy and administration, relationships with co-workers, physical environment, supervision, job security).

Two factor theory


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F. Quantitative viewpoint

Outline F. Quantitative viewpoint

Focuses on the use of mathematics, statistics, and information aidsto support managerial decision making and organizationaleffectiveness.

Quantitative viewpoint

1. Management science (operations research)

2. Operations management

3. Management information systems

Three main branches have evolved:


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G C i i


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G. Contemporary viewpoints

Outline G. Contemporary viewpoints

Major innovations in ways of thinking about management.Contemporary viewpoints

Two of the most important contemporary viewpoints :I. Systems theory

II. Contingency theory

Today: III. Emerging views

I S h


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I. Systems theory

Outline G. Contemporary viewpoints I. Systems theory

An approach based on the notion that organizations can bevisualized as systems.

Systems theory

A set of interrelated parts that operate as a whole in pursuit of common goals.

System

1. Inputs2. Transformation processes3. Outputs4. Feedback

Organizational systems components

O i i l


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Organizational systems components

Outline G. Contemporary viewpoints I. Systems theory Organizational systems components

The various human, material, financial, equipment, andinformational resources required to produce goods and services.

Inputs

The organizations managerial and technological abilities that areapplied to convert inputs into outputs.

Transformation processes

The products, services, and other outcomes produced by theorganization.

Outputs

Information about results and organizational status relative to theenvironment.

Feedback


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S t th d t


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System theorys advantages

It can analyze systems at different levels .It provides a framework for assessing how well the variousparts of an organization interact to achieve a commonpurpose .It emphasizes that a change in one part of the system mayaffect other parts .It considers how an organization interacts with itsenvironment the factors outside the organization thatcan affect its operations an organization needs tooperate as an open system .

Outline G. Contemporary viewpoints I. Systems theory System theorys advantages

O t


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Open systems

Outline G. Contemporary viewpoints I. Systems theory Open systems

A system that operates in continual interaction with itsenvironment.

Open system

A system that does little or no interacting with its environment andreceives little feedback.

Closed system

1. Negative entropy.2. Differentiation.3. Synergy.

3 major characteristics of open systems

O t h t i ti


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Open systems characteristics

Outline G. Contemporary viewpoints I. Systems theory Open systems Characteristics

The ability to bring in new energy, in the form of inputs andfeedback from the environment, in order to delay or arrest entropy.

Negative entropy

The tendency of open systems to become more complex.

Differenciation

The tendency of systems to decay over time.

Entropy

The ability of the whole to equal more than the sum of its parts.

Synergy

II C ti g th


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II. Contingency theory

Outline G. Contemporary viewpoints II. Contingency theory

A viewpoint that argues that appropriate managerial actiondepends on the particular parameters of the situation.

Contingency theory

The contingency approach applies particularly in such areas as: Environmental factors. Strategy.

Organizational design. Technology. Leadership.

Areas of contingency

Contingenc theor (2)


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Contingency theory (2)

Outline G. Contemporary viewpoints II. Contingency theory (2)

Universal view

Same managerialprinciples apply toevery situation.

Contingency view

Appropriate managerial actiondepends on the situation.

Situation2

Situation3Situation

1

III Emerging views


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III. Emerging views

Outline G. Contemporary viewpoints III. Emerging views

Management is a complex endeavor Innovative approaches are constantly needed to help advance theknowledge base Some new approaches develop into major viewpoints whenresearch and managerial practice show that they are effective.

Everging views

An approach that focuses on aspects of management in Japan thatmay be appropriate for adoption in the United States.

Japanese management

Theory Z


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Theory Z

Outline G. Contemporary viewpoints III. Emerging views Theory Z

A concept that combines positive aspects of American and Japanesemanagement into a modified approach aimed at increasing USmanagerial effectiveness while remaining compatible with thenorms and values of American society and culture.

Theory Z

Author: William Ouchi [born 1943]

Companies that have adopted aspects of Theory Z:General Motors, Ford, Hewlett-Packard, Intel

Theory Z (2)


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Theory Z (2)

Type A (American)

Short-term employmentIndividual DMIndividual responsibilityRapid evaluation andpromotion

Explicit, formalized controlSpecialized career pathSegmented concern

Type J (Japanese)

Lifetime employmentConsensual DM

Collective responsibilitySlow evaluation and

promotion

Implicit, informal controlNonspecialized career pathHolistic concern

Type Z (modified American)

Long-term employmentConsensual decision making

Individual responsibilitySlow evaluation and promotionImplicit, informal control with

explicit, formalized measuresModerately specialized career pathHolistic concern, including family

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[MG-En-lectures] [02] the Evolution of Management