Historical Background of Management

Major Approaches To Management

Classical Approaches

Scientific

GeneralAdministrative

Panel 2.1: The Historical Perspective

Classical Viewpoint

Emphasis on ways to manage work more efficiently

Scientific Management

Emphasized scientific study of work methods to improve productivity of individual workers

Proponents: Frederick W. Taylor Frank & Lillian Gilbreth

Administrative Management

Concerned with managing the entire organization

Proponents: Henry Taylor Max Weber

Behavioral science approach

Relies on scientific research for developments theory to provide practical manager tools

Behavioral Viewpoint

Emphasis on importance of understanding human behavior & motivating & encouraging employees toward achievement

Early Behaviorists

Proponents: Hugo Munsterberg, Elton Mayo

Human Relations Movement

Proposed better human relations could increase worker productivity Proponents: Abraham Maslow

Douglas McGregor

Quantitative Viewpoint

Applies quantitative techniques to management

Operations Management

Focuses on managing the production and delivery of an organization’s products or services more effectively

Management Science

Focuses on using mathematics to aid in problem solving and decision making

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Scientific Management

Scientific Management: emphasized the scientific study of work methods to improve the productivity of individual workers

Two of its chief proponents were Frederick W. Taylor, & Frank and Lillian Gilbreth

Scientific Management

• Credit for Scientific Management goes to Frederick Taylor who was hired by Midvale Steel company in the US in 1878.

• Taylor discovered that production and pay were poor ,inefficiency and waste were prevalent ,and most companies had unused potential .

• He concluded that management decisions were unsystematic and no efforts were made to determine the best means of production

Scientific Management

• The Taylor introduced Scientific Management (he is called the Father of Scientific Management ) which recommended the application of scientific methods to analyze work and to determine the methods to complete the tasks efficiently

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Principles of Scientific Management

• Workers are essentially economic beings • Workers should be developed to their

maximum potential • Competitive pay system• Cooperation between managers and workers• Organizational and individual goals should be

compatible•

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Scientific management

Study jobs systematically with a view to improving the way tasks are performed

Select the best employees for the various jobs.Train the employees in the most efficient methods Offer incentives (higher wages) to the most able

employees and use piece-rate system of payment to encourage greater effort.

Use rest pauses to combat fatigueEntrust to supervisor the task of ensuring that

employees are using the prescribed methods

Scientific Management

The ideas of scientific Management dramatically increased productivity across all industries ,and they are still important today.

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Administrative Management

Administrative Management: concerned with managing the total organization

Among the pioneering theorists were Henry Fayol & Max Weber

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Henry Fayol and the Functions of Management

Planning You set goals and

decide how to achieve them

Organizing

You arrange tasks, people, & other

resources to accomplish the work

LeadingYou motivate, direct &

otherwise influence people to work hard to achieve the organization’s goals

ControllingYou monitor performance, compare it with goals and take corrective action as

needed

Henry Fayol was the first to systematize management management behavior– he was the first to identify the major functions of management: planning, organizing, leading, controlling, as well as coordinating

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Fayal's 14 Principles of Management

1. Division of labor-Divide work into specialized tasks and assign responsibilities to specific individuals.

2. Authority -Delegate authority along with responsibility

3. Discipline Make expectations clear and punish violators

Fayal's 14 Principles of Management

4-Unity of commandEach employee has one and only one boss

5-Unity of Direction- Employees efforts should be focused on achieving organization’s direction.

6-Subordination of Individual interest to the general interest When at work, only work things should be pursued or thought about.

Fayal's 14 Principles of Management

• RemunerationEmployees receive fair payment for services,

• Centralization- Decisions are made from the top.

• Scalar Chain(line of authority). Formal chain of command running from top to bottom of the organization, like military

• Order-All materials and personnel have a prescribed place, and they must remain there.

Fayal's 14 Principles of Management

• Equity-Equality of treatment • Stability and tenure of personnel-Promote

employee loyalty and longevity

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

Fayal's 14 Principles of Management

• Esprit de corps-Promote a unity of interest between employees and management

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Max Weber & the Rationality of Bureaucracy

: • To Weber, a bureaucracy(Successful implement the actions of an organization of any size in achieving its purpose.) was a rational, efficient ideal organization based on principles of logic—he felt good organizations should have five bureaucratic features

Max Weber & the Rationality of Bureaucracy

• Labor is divided with clear definitions of authority and responsibility.

• Positions are organized in a hierarchy of authority ,with each position under the authority of a higher one

Max Weber & the Rationality of Bureaucracy

• Rules and regulations determine and standardize behavior

• Administrative acts and decisions are recorded in writing

• Management is separate from ownership in any organization.

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Classical bureaucracyMax Weber, 1947

• Hierarchy of authority• Rights and duties are attached to the various

positions • Division of labour• Rules and procedures• Documentation in which info is recorded in written

form • Technical competence• Separation of ownership from control

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The Problem with the Classical Viewpoint

The classical viewpoint tends to be too mechanistic: it tends to view humans as cogs within a machine, not taking into account the importance of human needs

Behavioral Management Theory

Thhe

Human Relations Management

Human Resource Perspective

Behavioral Science Approach

Human Relations ManagementHawthorne Studies

• Hawthorne studies was conducted at the western Electric Company in the US between 1924-1932

• Elton Mayo was a professor of Industrial Research at the Harvard School of Business Administration

• He is called the ‘Father of human relations movement .’

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Elton Mayo & the Supposed Hawthorne Effect

• Elton Mayo and his colleagues conducted studies at Western Electric’s Hawthorne Plant and began with an investigation to see if different lighting affected workers’ productivity

Hawthorne studies

The Hawthorne project involved three sets of studies

Illumination Studies

The Relay Assembly Room Study

The Bank Wiring Room

Illumination Studies

• Illumination studies constituted the first set of experiments and took place between 1924 and 1927

• Experiment -Lighting was decreased • Result-The researches concluded that factors

other than lighting were at work

Experiment

• The first study was conducted by a group of engineers seeking to determine the relationship of lighting levels to worker productivity. Surprisingly enough, they discovered that worker productivity increased as the lighting levels decreased

The Relay Assembly Room study

• A few years later, a second group of experiments began. Harvard researchers Mayo and F. J. Roethlisberger supervised a group of five women in a bank wiring room. They gave the women special privileges, such as the right to leave their workstations without permission, take rest periods, enjoy free lunches, and have variations in pay levels and workdays. This experiment also resulted in significantly increased rates of productivity.

The Bank Wiring Room Study

• For this study a group of 14men who wired telephone banks was observed in a standard shop condition

• An observer was stationed in the room with instructions to take continuous note’s on the workers actions .

• The observer were not allowed to give orders or to get involved in conversations with the workers .

The Bank wiring Room Study

• The researches concluded that the behavioral norms set by the work group had a powerful influence over the productivity of the group.

• The power of the peer group and the importance of group influence on individual behavior and productivity were confirmed in the bank wiring room.

Human Resource Approach

• The Human relations approach highlighted the impact of behavior on performance .Interpersonal behavior has its impact on satisfaction which in turn may lead to improved performance .

• Abraham Maslow and Douglas Ac Greg or .Their contribution form the human resource approach

Maslow Hierarchy Of Needs

• Self-Actualization • Esteem Needs • Social Needs • Safety Needs • Physiological Needs

Behavioral Science Approach

• Psychologist ,sociologists and others began studying people at work .The behavioral science approach believes that an individual is motivated to work for many reasons in addition to making money and forming interpersonal relationships.

Behavioral Science Approach

• The principals of behavioral science approach are being practiced in every organization and behavioral science as a course more popularly known as Organization Behavior.

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Panel 2.2: The contemporary perspective: Three Viewpoints

The System Viewpoint

Regards the organization as a system of interrelated parts that operate together to achieve a

common purpose

The Contingency Viewpoint

Emphasizes that a manager’s approach should vary according to—I.e. be contingent on—the individual and

environmental situation

The Quality Management Viewpoints

Three approaches

Quality Control

Strategy for minimizing errors by managing each state of production

Proponent: Walter Stewart

Quality Assurance

Focuses on the performance of workers urging employees to strive for “zero defects”

Total Quality Management

Comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction

Proponents: W. Edward Deming

Joseph M. Juran

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Systems Approach (60-70s)

A system is set of interrelated and interdependent parts arranged in a manner that produces a unified whole

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Open and Closed Systems

Open System continually interacts with its environment

Closed System has little interaction with its

environment; it receives very little feedback from

the outside

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The Systems Viewpoint

The Systems Viewpoint regards the organization as a system of interrelated parts

By adopting this perspective you can look at your organization in two ways

1. A collection of subsystems—parts making up the whole system

2. A part of the larger environment

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The Four Parts of a System

Inputs

The people, money, information, equipment, and materials required to produce and organization’s goods or services

Outputs

The products, services, profits, losses, employee

satisfaction or discontent, and the like

that are produced by the organization

Transformational Processes

The organization’s capabilities in management and technology that are applied to converting inputs to outputs

Feedback

Information about the reaction of the

environment to the outputs that affect the

inputs

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Contingency approach

The contingency approach sometimes called the situational approach says that organizations are different ,face different situations ,and require different ways of managing.

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Contingency approach

• A good way to describe contingency• If this is the way my situation is then

this is the best way for me to manage in this situation

• This approach is intuitively logical because organizations and even units within the same organization differ-in terms of size ,goals , work activities.

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The Contemporary Perspective: The Contingency Viewpoint

The Contingency

Viewpoint emphasizes that a manager’s approach should vary according to—that is, be contingent on—the individual and the environmental situation

Contingency approach

• The Primary value of the contingency approach is that it stresses that there are no simplistic or universal rules for managers to follow

Quantitative Approach

• The Quantitative approach evolved from mathematical and statistical solutions developed for military problems during word war II.

• After the war was over , many of these techniques used for military problems were applied to business

Quantitative Approach

• One group of military officers ,nicknamed the whiz kids joined Ford Motor Company in the mid -1940s and immediately began using statistical methods and Quantitative models to improve decision making

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The Contemporary Perspective: The Quality Management Viewpoint

The Quality Management Viewpoint includes quality control, quality assurance, and total quality management

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Total Quality Management: Creating an Organization

Dedicated to Continuous Improvement

• Total Quality Management is a comprehensive approach—led by top managers and supported throughout the organization—dedicated to continuous quality improvement, training and customer satisfaction

Four Components of TQM:

1. Make Continuous Improvement a Priority

2. Get Every Employee Involved

3. Listen to and Learn from Customers and Employees

4. Use Accurate Standards to Identify and Eliminate Problems