Principles of ManagementANEES HASSAN SCIENCE COLLEGE

HYDERABAD

Asghar Ali Narejo

Evolution of ManagementEvolution of Management

Management, as a concept as we know it today, is Management, as a concept as we know it today, is associated with ‘mass consumption’ – leading to production associated with ‘mass consumption’ – leading to production of ‘standardized’ goods in large volumes;of ‘standardized’ goods in large volumes;

Prior to the “Industrial Revolution”, man made devices were Prior to the “Industrial Revolution”, man made devices were in use in sizeable numbers – but often one of a kind and in use in sizeable numbers – but often one of a kind and crafted rather than manufactured crafted rather than manufactured Example: watches and clocks. However, many of the Example: watches and clocks. However, many of the

supportivesupportive processes can be traced to early roots: logistics, processes can be traced to early roots: logistics,

scheduling Example: boat building; automation. scheduling Example: boat building; automation. Example: printing.Example: printing.

The advent of the management as a science can therefore The advent of the management as a science can therefore be traced to late 18be traced to late 18thth /early 19 /early 19thth century. century.

Elements of modern management, with a focus on ‘man’ i.e. HR concepts first began to appear in the West around the same time: as a reaction to the harsh behaviour of autocratic

businessmen like Henry Ford. It evolved through ‘(labour) Welfare’, ‘Industrial Relations’, ‘Personnel Management’ to its current form. (Marxism was becoming a recognizable philosophy in Europe!);

as a need to utilize human resource better due the adverse supply-demand situation. Employment in the ‘industry’ had overtaken agricultural labour. This was aggravated in Europe, by WW I.

In the 20’s, Rationalization & Efficiency were the buzz-words (Taylor, Fayol etc.), calling for a scientific approach to selection and work allocation – the corner-stones of modern production management: Standardization of parts and work elements resulted in

ability to make work repetitive for individuals (‘do-ers’)

End of WW II brought in an era of un-sated demand, resulting in a boom for production activity – more of everything was required. Quantity backed by efficiency were the guiding principles: an era of ‘Optimization’ driven by suppliers’ choice rather than customers’ wants.

However, some people – notably Japan – restarted their devastated economy with different orientation: Quality. The key was true economy of all resources with the customer as the focal point – since they did not have the luxury of a surplus funded, hungry market.

By the late 60’s, demand tended to slow down and the growing competition gave customers greater choice – ‘quality’ as an important buying criterion emerged.

OPEC crisis in mid-70’s turned the world around on its head! Energy the prime mover of industrial world became very expensive. The demand boom faded – with customers demanding quality and lower prices and better service.

First inventions of ‘mass production’ were linked to textile First inventions of ‘mass production’ were linked to textile manufacturing (Spinning Jenny/ Hargreaves) – which combined manufacturing (Spinning Jenny/ Hargreaves) – which combined with use of water power (Arkwright), made a powerful social impact with use of water power (Arkwright), made a powerful social impact in the late 1700s; Watt’s steam engine completely revolutionized in the late 1700s; Watt’s steam engine completely revolutionized harnessing of mechanical powerharnessing of mechanical power for production (first to use were for production (first to use were cotton mills) and transport;cotton mills) and transport;

Poor Reliability of early machines led to the creation of machine Poor Reliability of early machines led to the creation of machine tools – the Lathe (Maudslay) in 1790, with which to turnouttools – the Lathe (Maudslay) in 1790, with which to turnout parts to parts to closer tolerances and fit. This led to creation of closer tolerances and fit. This led to creation of ‘interchangeable ‘interchangeable parts’parts’ – and the first uses were in manufacture of muskets and – and the first uses were in manufacture of muskets and pistols!pistols!

These were theThese were the triggers for triggers for ‘‘mass productionmass production’’: : mechanicalmechanical power & power & interchangeable partsinterchangeable parts; leading to production moving away from ; leading to production moving away from homes and craft-shops to work-shopshomes and craft-shops to work-shops//factories.factories.

By 1900 (in the West), By 1900 (in the West), nearly nearly everything was being produced by everything was being produced by

the factory system.the factory system.

Division of Labour: under this principle, work could be organized/grouped into a set of specific, related tasks – which were repetitive in nature. Man could be trained to perform this set of tasks only, so that efficiency of task performance was maximized. When extended throughout the organization, this took

the form of ‘Specialization’ - with the organization benefiting from the maximum use of specialist skills. Both economically and under supply-shortage conditions, this worked well.

Much of this was an extension of trade/craft skill-groups organization (guilds) which was the hallmark of pre-industrial ‘production’.

Till the end of the 30’s, these fundamentals were refined, polished(e.g. Organization structures) and extended ( e.g. work-measurements) in a relentless focus on efficiency.

With WW II, a further need for reliability gave birth to the principles of sampling & inspection – statistical methods were introduced to regulate quality of output.

This brought to the forefront the philosophy and practice of Total Quality as the guiding force for manufacturing – later to spread into management of operations and enterprises: Central to this theme is the dominance of the

Customer; Customers were any person or person receiving goods and/or services – internal or external;

Quality was redefined as ‘fitness for use’ – elevated from the narrow confines of conformance to specifications;

Continuous improvement was the key to continuity and success against demands of customer and competition; importantly, everybody could contribute – quality is every- body’s business;

Particularly, for production, quality means best products at least cost – reduced waste of all resources, spawning a host of (linked) programs to conserve time, money & effort: Just – in – Time, SMED/OTED; Lean manufacturing; Q-circles/Kaizen/6-sigma; 5-S, TPM, DoE;

History of Management Thoughts

Traditional ViewpointTraditional Viewpoint

Behavioral ViewpointBehavioral Viewpoint

Systems ViewpointSystems Viewpoint

Contingency ViewpointContingency Viewpoint

Quality ViewpointQuality Viewpoint

18901890 19001900 19101910 19201920 19301930 19401940 19501950 19601960 19701970 19801980 19901990 20002000

Goals:Efficiency

Consistency

Administrative Management

Bureaucratic Management

ScientificManagement

Classical Management A set of Management Theories that focus

on the increasing the efficiency of the organization as a whole.

Scientific ManagementA Management prospective that focuses on

the rational Scientific Study of work situation to improve employee efficiency.

Contributors :1.Frederick W. Taylor2.Frank and Lillian Gilbreth3.Henry Gantt4.Harrington Emerson

Frederick W. Taylor (1856-1915)

He is known as the father of the Scientific Management sought one best way to accomplish the work task most efficiently.

Time and motion study The examination of the physical movements

and the time involved in completing task.Wrote book

Principles of Scientific Management

Frank and Lillian Gilbreth(1878-1972)

Bothe were an early advocates of Scientific Management and a pioneer of Motion Study, but are perhaps best known as the father and central figure of Cheaper by the Dozen.

Henry Gantt(1861 – 23 November 1919)

He was an American Mechanical Engineer and Management Consultant who is most famous for developing the Gantt Chart in the 1910s.

These Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate Highway system and continue to be an important tool in Project Management.

Harrington Emerson Harrington Emerson contributed to the systems efficiency focus of industrial engineering. His book Twelve Principles of Efficiency was classic. He discussed efficiency design of organization through 12 principles 1. Clearly defined ideals.2. Common sense3. Competent counsel4. Discipline5. The fair deal6. Reliable, immediate and adequate records7. Dispatching8. Standards and schedules9. Standardized conditions10. Standardized operations11. Written standard-practice instructions12. Efficiency-reward

Administrative ManagementA management approach that stresses the

functional aspects of the organization and management by planning, organizing, leading and controlling.

Contributors:1.Henry Fayol2.Max Weber3.Chester Barnard4.Lyndal Urwick and Luther Gulick

Henri Fayol (Istanbul, 29 July 1841–Paris, 19 November 1925)

He was a French mining engineer and director of mines who developed a general theory of business administration.

He and his colleagues developed this theory independently of scientific management but roughly contemporaneously.

He was one of the most influential contributors to modern concepts of management.

Functions of management

Management Principles: Developed by Henri Fayol: 

1. Specialization of labor. Specializing encourages continuous improvement in skills and the development of improvements in methods.

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

3. Discipline. No slacking, bending of rules.

4. Unity of command. Each employee has one and only one boss.

5. Unity of direction. A single mind generates a single plan and all play their part in that plan.

6. Subordination of Individual Interests. When at work, only work things should be pursued or thought about.

7. Remuneration. Employees receive fair payment for services, not what the company can get away with.

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

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

Conti…….

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

11.Equity. Equality of treatment (but not necessarily identical treatment)

12.Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.

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

14.Esprit de corps. Harmony, cohesion among personnel

Max Weber & Bureaucracy (1864-1920)

A management approach that emphasizes a structured organization in which positions and authority are defined according to formal rules.

According to Max Weber’s bureaucracy management authority is vested in the organizational position rather than in the particular person occupying that position.

Chester Barnard

People should continuously communicateand cooperate with one another

Acceptance theory of authority holds that employees have free wills and, thus, choose whether to follow management’s orders. Employees will follow orders if they:

1. Understand what is required

2. Believe the orders are consistent with organization goals

3. See positive benefits to themselves in carrying out the orders

Lyndal Urwick and Luther GulickThe worked together and designed it

according to acronym POSDCORB.1.Planning2.Organizing 3.Staffing 4.Directing5.Coordinating6.Reporting 7.BudgetingTheir work was an important step in principles of

Scientific Management with the thinking of Weber and Fayol.

Mary Parker Follett(1868-1933)

Her theory of management encouraged a fair hearing of disputes and saw diversity of opinion as a positive, not negative factor, for which she is sometimes remembered as the "mother of conflict resolution".

M

anagers need to

comm

unicate with

workers

Managers need to establish good working relationships with employees

Goal:Improve

Coordination

Goal:Improve

Coordination

Hawthorne StudiesStudies of how characteristics of the work

setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.Worker productivity was measured at

various levels of light illumination.Researchers found that regardless of

whether the light levels were raised or lowered, worker productivity increased.

Human Relation MovementA management prospective that views

employees as responding to the interpersonal processes within the work unit.

Hierarchy of Needs TheoryThe great American psychologist Abraham

Maslow was responsible for developing the now famous hierarchy of needs. He proposed that human beings have built in needs that are arranged in order of importance, similar to a pyramid with the most basic needs forming the base.

The first four levels are referred to as deficit needs, meaning that most people are only really aware of them if they are not being met - in other words, if there is a deficit!

Theory X ('Authoritarian Management' Style)

1. The average person dislikes work and will avoid it he/she can.

2. Therefore most people must be forced with the threat of punishment to work towards organizational objectives.

3. The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.

Theory - y ('Participative Management' Style)Effort in work is as natural as work and play.People will apply self-control and self-direction in the pursuit of organizational objectives, without external control or the threat of punishment.Commitment to objectives is a function of rewards associated with their achievement.People usually accept and often seek responsibility.The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population.In industry the intellectual potential of the average person is only partly utilized.

Theory Z

Maslow's Theory Z , presented in Maslow on Management, presupposes that people, once having reached a level of economic security, strive for a life steeped in values, a work life where the person would be able to create and produce.

Behavioral Science MovementA school of Management thought that stresses scientific research about human behavior to guide management practice.Organizational BehaviorThe study of the effect that organizations have on their members and of the effect that members have on their organization.Quantitative Management.A management prospective that applies mathematical techniques, statistical tools, and information aids to management situation.Management ScienceA quantitative management prospective that applies mathematical models to management situations.Operations ManagementA management approach that uses quantitative techniques to improve the productivity and efficiency of goods or services production.Management Information SystemManagement tools that focuses on the collection, processing, and transmitting of information to support management functions

System TheoryA contemporary management perspective

that views organization as functioning system within the environment.

System A group of inter related components that

function as a whole to achieve common goal.Systems viewpoint:

An approach to solving problems by diagnosing them within a framework of transformation processes, outputs, and feedback

InputsHuman, physical,

financial, and information

resources

TransformationProcess

OutputsProducts

andservices

Feedback Loops

Basic Systems View of Organizations

System Types

1. Closed system: • Limits its interactions with the environment

(e.g., stamping department in GM assembly plant)

2. Open system: • Interacts with the external environment (e.g.,

marketing department)

The Contingency Approach

What managers do in practice depends on a given set of circumstances – a situation.

The Contingency view Point Management practices should be consistent with the requirements of

the external environment, the technology used to make a product or provide a service, and capabilities of the people who work for the organization.

Uses concepts of the traditional, behavioral and system viewpoints

External environment—stable or changing

Technology—simple or complex

People—ways they are similar and different from each other

Behavioral ViewpointHow managers influence others; Informal group Cooperation among employees Employee’s social needs

Systems ViewpointHow the parts fit together.

Inputs Transformations Outputs

Traditional ViewpointWhat managers do:

Plan Organize Lead Control

Contingency ViewpointManagers’ use of other viewpoints to solve problems involving:

External environment Technology Individuals

Contingency Viewpoint: Draws onOther Viewpoints, As Necessary

Keeping Smile……………Asghar Ali Narejo

Contact: 0300-3141046E-mail: asghar_204u@yahoo.com

ANEES HASSAN SCIENCE COLLEGEHYDERABD