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Principles of Management

MANAGEMENT: YESTERDAY AND TODAY

MANAGEMENT: YESTERDAY AND TODAY

Lecture 4Lecture 4

22–2

Figure Chronological Development of Management Perspectives

32–3

Figure Subfields of the Classical Perspective on Management

Focuses on the Focuses on the individual worker’s individual worker’s

productivityproductivity

Focuses on the Focuses on the functions of functions of managementmanagement

Focuses on the Focuses on the overall overall

organizational organizational systemsystem

42–4

Scientific Management: TaylorFrederick W. Taylor (1856-1915)

– Father of “Scientific Management.

• attempted to define “the one best way” to perform every task through systematic study and other scientific methods.

• believed that improved management practices lead to improved productivity.

– Three areas of focus:

• Task Performance

• Supervision

• Motivation

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Task Performance : Scientific management incorporates basic expectations of management, including:– Development of work standards– Selection of workers– Training of workers– Support of workers

Supervision: Taylor felt that a single supervisor could not be an expert at all tasks.

– As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor.

– This became known as “Functional Foremanship.”

Motivation: Taylor believed money was the way to motivate workers to their fullest capabilities.

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Steps in Scientific Management

Develop a sciencefor each element ofthe job to replace oldrule-of-thumb methods

Scientifically selectemployees and thentrain them to do the jobas described in step 1

Supervise employeesto make sure theyfollow the prescribedmethods for performingtheir jobs

Continue to plan the work, but use workers to get the work done

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Figure 1.3

72–7

Administrative Management: FayolHenri Fayol (1841–1925)

– First recognized that successful managers had to understand the basic managerial functions.

– Developed a set of 14 general principles of management.

– Fayol’s managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.

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Fayol’s PrinciplesFayol’s PrinciplesHenri Fayol, developed a set of 14 principles:

1. Division of Labor: allows for job specialization. • Fayol noted firms can have too much specialization

leading to poor quality and worker involvement.2. Authority and Responsibility: Fayol included both

formal and informal authority resulting from special expertise.

3. Unity of Command: Employees should have only one boss.

4. Line of Authority: a clear chain from top to bottom of the firm.

5. Centralization: the degree to which authority rests at the very top.

6. Unity of Direction: One plan of action to guide the organization.

7. Equity: Treat all employees fairly in justice and respect.2–8

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Fayol’s PrinciplesFayol’s Principles8. Order: Each employee is put where they have the

most value.

9. Initiative: Encourage innovation.

10. Discipline: obedient, applied, respectful employees needed.

11. Remuneration of Personnel: The payment system contributes to success.

12. Stability of Tenure: Long-term employment is important.

13. General interest over individual interest: The organization takes precedence over the individual.

14. Esprit de corps: Share enthusiasm or devotion to the organization.

2–9

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Bureaucratic Management

Focuses on the overall organizational system.

Bureaucratic management is based upon: – Firm rules– Policies and procedures– A fixed hierarchy– A clear division of labor

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Key points of BureaucracyKey points of Bureaucracy

Authority is the power to hold people accountable for their actions.

Positions in the firm should be held based on performance not social contacts.

Position duties are clearly identified. People should know what is expected of them.

Lines of authority should be clearly identified. Workers know who reports to who.

Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates.

• Sometimes, these lead to “red-tape” and other problems.

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122–12

Behavioral Perspective

Followed the classical perspective in the development of management thought.– Acknowledged the importance of human

behavior in shaping management style– Is associated with:

• Mary Parker Follett

• Elton Mayo

• Douglas McGregor

• Chester Barnard

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Mary Parker Follett

Concluded that a key to effective management was coordination.

Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people.

Believed that management is a continuous, dynamic process.

Felt that the best decisions would be made by people who were closest to the situation.

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Elton MayoConducted the famous Hawthorne Experiments.

At Western Electric Co. during 1924-1932.

“Hawthorne Effect”• Productivity increased because attention was paid to the

workers in the experiment.• Phenomenon whereby individual or group performance is

influenced by human behavior factors.

Actually, it appears that the workers enjoyed the attention they received as part of the study and were more productive.

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Maslow’s Hierarchy of Needs

Five levels– Physiological – hunger, thirst, shelter, sex– Safety – security and protection– Social – affection, interpersonal relationships– Esteem – self-respect, achievement status– Self-actualization – achieving full potential

Usually thought in the form of a pyramid

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Maslow’s Hierarchy of Needs

SA

Esteem Needs

Social Needs

Security Needs

Physiological Needs

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Douglas McGregor

Proposed the Theory X and Theory Y styles of management.

– Theory X managers perceive that their subordinates have an inherent dislike of work and will avoid it if at all possible.

– Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.

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192–19

The Quantitative Perspective

Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving.

This approach has four basic characteristics:1. A decision-making focus

2. Development of measurable criteria

3. Formulation of a quantitative model

4. The use of computers

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Contemporary Management Theory

The Systems Perspective– A system is an interrelated set of elements

functioning as a whole. An organization as a system is composed of four elements:

• Inputs (material and/or human resources)

• Transformation processes (technical and managerial processes)

• Outputs (products and services)

• Feedback (reactions from the environment)

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The Integrated Systems Model

FeedbackFeedback

InputsInputsFrom theFrom theenvironment:environment:HumanHumanMaterialMaterialFinancialFinancialInformationInformation

ProcessingProcessingTransformationTransformationprocess:process:TechnologyTechnologyOperating systemsOperating systemsAdministrative Administrative systemssystemsControl systemsControl systems

OutputsOutputsInto the Into the environmentenvironmentProductProductServicesServicesProfit/lossProfit/lossEmployee behaviorEmployee behaviorInformationInformation

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Systems Perspective

Open systems interact with one another and other environments

Closed systems do not interact with their environment

Subsystems recognizes the importance of subsystems because of their interdependence

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Systems Perspective

Synergy– Subsystems are more successful working

together than working alone. The whole, working together, is greater than the sum of its parts.

Entropy – A natural process leading to system decline

which can be avoided through

organizational change and renewal.

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The Contingency Perspective

The Contingency Perspective suggests that universal theories cannot be applied to organizations because each organization is unique – what works in one situation may not work in another

– This requires managers to identify the key contingencies in a given situation.

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An Integrative Framework of Management Perspectives

Systems Approach• Recognition of internal

interdependencies• Recognition of

environmental influences

Contingency Perspective• Recognition of the situational

nature of management• Response to particular

characteristics of situation

ClassicalManagementPerspectivesMethods forenhancingefficiency andfacilitating planning,organizing, andcontrolling

BehavioralManagementPerspectivesInsights for moti-vating performanceand understandingindividual behavior,groups and teams,and leadership

QuantitativeManagementPerspectivesTechniques forimproving decisionmaking, resourceallocation, andoperations

Effective and efficient management

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Management in the 21st Century

William Ouchi’s Theory Z

– Japanese-style approach to management developed by William Ouchi

• Advocates trusting employees and making them feel like an integral part of the organization.

• Based on the assumption that once a trusting relationship with workers is established, production will increase.

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Future Leaders Must:

Be thoroughly schooled in the different management perspectives.

Understand the various influences that will have a continuing effect on management thinking

Be aware of how key business environment variables relate to their organization.

Know which elements to select from the various management perspectives that are appropriate for their situation.

Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete.