ubmm1013 management principles

UBMM1013 MANAGEMENT PRINCIPLES

Topic 2 The Evolution of

Management Thinking

Learning Objectives

Understand how historical forces influence the practice of management.

Identify and explain major developments in the history of management thought.

Describe the major components of the classical and humanistic management perspectives.

Discuss the management science perspective and its current use in organizations.

Learning Objectives (contd.)

Explain the major components of systems theory, the contingency view, and total quality management.

Describe the learning organization and the changes in structure, empowerment, and information sharing that managers make to support it.

Discuss the technology-driven workplace and the role of outsourcing, supply chain management, enterprise resource planning, knowledge management systems, and customer relationship management.

Organization and Management

Organization is a collection of people working together in a division of labour to achieve a common purpose

Management is the attainment of organizational goals in an effective and efficient manner through four functions:

• planning • organizing• leading• controlling

Organization and Management

Management philosophies and organization forms change over time to meet new needs

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

A study of the past contributes to understanding both the present and the future

Forces Influencing Management and Organisations

Forces Influencing Management and Organisations

2.1 Social Forces2.2 Political Forces2.3 Economic Forces

Management and Organisations

Social Forces

2.1 Social Forces – aspects of a culture that guide and influence relationship among people. What do people values? What do people need? What are the standards of behavior among

people?

These forces shape the social contract which refer to the unwritten, common rules and perceptions about relationships among people and between employees and management

Social forces Social contract

Political Forces

2.2 Political Forces - influence of political and legal institutions on people & organizations

Political forces include basic assumptions underlying the political system such as the desirability of self-government, property rights, contract rights, The definition of justice The determination of innocence or guilt of

a crime

Economic Forces

2.3 Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users

The new emerging economy is based largely on ideas, information, and knowledge; supply chains have been revolutionized by digital technology

Management practices and perspectives vary in response to these social, political, and economic forces; during hard times, manager look for ideas to help them cope.

Forces Influencing Organizations and Management

Forces Influencing Organizations and Management

2.1 Social Forces2.2 Political Forces2.3 Economic Forces

Organisation and Management

Management practices and perspectives vary in response to these social, political, and economic forces; during hard times, manager look for ideas to help them cope.

Management Perspectives Over Time

Classical Perspective

The classical perspective emerged during the 19th and 20th centuries

The factory system of the 1800s had challenges: tooling plants, organizing managerial structure, training non-English speaking employees, scheduling complex manufacturing and

operations dealing with increased labor dissatisfaction

and resulting strikes These new problems demanded a new

perspective on coordination and control

Classical Perspective

Make organizations efficient operating machines

Rational, scientific approach to management The overall classical perspective as an

approach to management was very powerful and gave companies fundamental new skills for establishing high productivity and effective treatment of employees

This perspective contains three subfields:i. Scientific Managementii. Bureaucratic Organizations

iii. Administrative Principles

Classical Perspective

Scientific Management

BureaucraticOrganizations

AdministrativePrinciples

Scientific Management:

A subfield of the classical management perspective that emphasized scientifically determined changes in management practices as the solution to improving labour productivity

Scientific Management:

Frederick W. Taylor

Henri Gantt

Frank B and Lilian M. Gilbreath

known as the father of scientific management

Scientific Management: Taylor 1856-1915

Frederick W. Taylor – known as the father of scientific management

Emphasized scientific changes in management to improve labor productivity

Taylor suggested decisions based on rules of thumb and tradition be replaced with precise work procedures developed after study of the situation

Scientific Management

Henri Gantt developed the Gantt Chart – a bar graph that measures planned and completed work

Scientific Management

Frank B and Lilian M. Gilbreath pioneered time and motion study, which stressed efficiency and the best way to do a job

Frank is known for work with brick layers, but surgeons were able to save countless lives through the application of the time and motion study

Lilian pioneered the field of industrial psychology and made substantial contributions to human resource management

Bureaucracy Organizations

Max Weber 1864-1920

Prior to Bureaucracy Organizations European employees were loyal to a single

individual rather than to the organization or its mission

Resources used to realize individual desires rather than organizational goals

Systematic approach –looked at organization as a whole

A subfield of the classical management perspective that emphasized management on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal record-keeping and separation of management and ownership

Characteristic of Weberian Bureaucracy

Positions organized in a hierarchy of authority

Managers subject to Rules and procedures

that will ensure reliable predictable behavior

Personnel are selected and promoted based

on technical qualifications

Administrative acts and decisions recorded

in writing Management separate from the ownership of the organization

Division of labor with Clear definitions of

authority and responsibility

THE IDEAL BUREAUCRACY

Administrative Principles

Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard

Focus: A subfield of the classical management

perspective that focuses on the total organization rather than the individual worker, delineating the management functions of planning, organizing, commanding, coordinating and controlling.

Henri Fayol 1841-1925

Division of labor Authority Discipline Unity of

command Unity of direction Subordination of

individual interest

Remuneration

Division of labor Authority Discipline Unity of

command Unity of direction Subordination of

individual interest

Remuneration

Centralization

Scalar chain Order Equity Stability and

tenure of staff

Initiative Esprit de

corps

Centralization

Scalar chain Order Equity Stability and

tenure of staff

Initiative Esprit de

corps

14 General Principles of Management

Mary Parker Follett 1868-1933

Importance of common super-ordinate goals for reducing conflict in organizations Popular with businesspeople of her day Overlooked by management scholars Contrast to scientific management Reemerging as applicable in dealing with

rapid change in global environment

Leadership – importance of people vs. engineering techniques

Chester Barnard 1886-1961

Informal Organization

Acceptance Theory of Authority

Chester Barnard 1886-1961

Informal Organization Cliques Naturally occurring social groupings Argued that organizations are not

machines and informal relationship are powerful forces that can help the organization if properly managed

Chester Barnard 1886-1961

Acceptance Theory of AuthorityFree willCan choose to follow management

orders and acceptance can be critical to success

Management Perspectives Over Time

Humanistic Perspective

A management perspective that emerged around the late 19th century

Emphasized understanding human behavior, needs, and attitudes in the workplace

Mary Parker Follett and Chest Barnard advocated a more humanistic perspective on management that emphasized:

Importance of understanding human behaviors

Needs and attitudes in the workplaceSocial interactions and group processes

Humanistic Perspective

The HumanRelations

Movement

The HumanResources

Perspective

The Behavioral

Sciences Approach

Human Relations Movement

Truly effective control comes from within

the individual worker rather than from strict,

authoritarian control

Emphasized satisfaction of employees’

basic needs as the key to increased worker

productivity

Human Relations Movement

Hawthorne Studies

Started in 1895 Four experimental & three control groups Five different tests Test pointed to factors other than

illumination for productivity 1st Relay Assembly Test Room experiment,

was controversial, test lasted 6 years Interpretation, money not cause of

increased output Factor that increased output, Human

Relations

Human Resource Perspective

Suggests jobs should be designed to meet higher-

level needs by allowing workers to use their full

potential

The human resources perspective combines

prescription for design of job tasks with theories of

motivation

2 best known contributors:

Douglas McGregor

( 1906- 1964)

Abraham Maslow (1906-

1970)

Physiological

Safety

Belongingness

Esteem

Self-actualization

Abraham Maslow’s Hierarchy of Needs

Based on needs satisfaction

1908-1970

Abraham Maslow (1906-1970), a psychologist, suggested a hierarchy of needs because he observed that problems usually stemmed an inability to satisfy needs

Dislike work –will avoid it Must be coerced,

controlled, directed, or threatened with punishment

Prefer direction, avoid responsibility, little ambition, want security

Do not dislike work Self direction and

self control Seek responsibility Imagination,

creativity widely distributed

Intellectual potential only partially utilized

Douglas McGregor Theory X & Y

Theory X Assumptions Theory Y Assumptions

1906-1964

Behavioral Sciences Approach

Applies social science in an organizational context

Draws from economics, psychology, sociology, anthropology, and other disciplines

Understand employee behavior and interaction in an organizational setting

One set of management techniques based in the behavioral sciences approach is OD – Organization Development

Other concepts that grew out of the Behavioral Sciences Approach include matrix organizations, self-managed teams, and ideas about corporate culture

Management Science Perspective

Emerged after WW II Applied mathematics, statistics, and

other quantitative techniques to managerial problems

Operations

Managemen

t

Operations

Research

Information

Technology

Operations Research

Operations Research

It consist of mathematical model building and other applications of quantitative techniques to managerial problems

Operations Management

Operations Management

specializes in physical production of goods or services using quantitative techniques to solve manufacturing problems

e.g. forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation and break-even analysis

Information Technology

Information Technology

reflected in management information systems

These are designed to provide relevant information to managers in a timely and cost-efficient manner

e.g. intranet, extranet, software programs.

Management Perspectives Over Time

Recent Historical Trends

Systems View of Organizations

System Theory

System Theory

A system theory is a set of interrelated parts that function as a whole to achieve a common purpose.

A system functions by acquiring inputs from the external environment, transforming them in some way and discharging outputs back to the environment.

Components of system theory include: Inputs Transformation Process Outputs Feedback Environment

System Theory

Five components in System Theory:

a) Inputs Inputs are the material, human, financial or

information resources used to produce goods and services.

b) Transformation process The transformation process is management’s

use of production technology to change the inputs into outputs.

c) Outputs Outputs include the organization’s products and

services.

System Theory

Five components in System Theory:

d) Feedback Feedback is knowledge of the results that

influence the selection of inputs during the next cycle of the process.

e) Environment The environment surrounding the organization

includes the social, political and economic forces.

Contingency View of Management

Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

Total Quality Management (TQM)

A concept that focuses on managing the total organisation to deliver quality to customers

The approach infuses quality values throughout every activity, with front-line workers intimately involved in the process

4 significant elements of TQM are: Employment involvement – requires company-wide

participation in quality control. Focus on customer – find out what customer wants. Benchmarking – a process whereby companies find out

how others do something better and imitate or improve it.

Continuous improvement – the implementation of small, incremental improvements in all areas of the organization on an ongoing basis.

The Learning Organization

In the learning organization, everyone identifies and solves problems enabling continuous experiment change, and Improvement

Thus increasing its capacity to grow, learn and achieve its purpose

The essential idea is problem solving, as opposed to efficiency,

e.g. understanding customer needs

Elements of a Learning Organization

Learning Organization

Open Information

Empowered Employees

Team-Based Structure

The Technology-Driven Workplace

Business-to-Consumer (B2C) Selling Products and

Services Online

Business-to-Business (B2B) Electronic transactions Between Organizations

Consumer-to-Consumer (C2C)

Electronic Markets Created by Web-Based

Intermediaries

Types of E-Commerce

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