principals of management - mba week2

8/13/2019 Principals of Management - MBA Week2

1/50

MBA503: Week 2

The historical origins ofmanagement thought

Dr Sardana Islam Khan


2/50

Learning Objectives

After this lecture and readings, students should beable to:

Compare and contrast the contribution of the majorhistorical movements in management theory

Critically analyse the advantages anddisadvantages of each perspective

Demonstrate an understanding of the relevance of

these historical developments to currentmanagement theory and practice


3/50


4/50

Changing ideas about Management


5/50

Classical theories of

Management

Scientific Management

and

Administrative Theories (inc Bureaucracy)


6/50

Mass transportation


7/50

Automated production [Factory System]

Professor Andrew Ure in thePhilosophy of Manufacturing [1835]wrote:

The principle of the factory systemthen is, to substitute mechanical

science for hand skill, and thepartition of a process into its essentialconstituents, for the division orgraduation of labour among artisans.On the handicraft plan, labour moreor less skilled was usually the most

expensive element of production....but on the automatic plan, skilledlabour gets progressivelysuperseded, and will, eventually, bereplaced by mere overlookers ofmachines.


8/50

Labour


9/50

A journey back in time .

Rapid industrialisation brought a number ofmanagement problems in the 1880s: Small, ad hoc factories grew to large plants

Increasing consumerism (mass production) Worker wages were low

Craft based work eroded by machines

High numbers of immigrant labour and ex-ruralpeople (shift from country to city)

Conflicts emerged between owners and workers

Rise in unionism


10/50

Problems for the owners of capital

Organisational inefficiencies

Careless safety

Arbitrary supervision Rising conflict and industrial unrest

Soldering (time-wasting)

Question: How can this be managed in anefficient and effective way?


11/50


12/50

Examples

Midvale Steel Works (1878): used timed motion studies paid workers by the piece rather than by the hour Identified the one best way' to do work coordinated supplies and tools from a central office to rationalise factory

operations Bethlehem Steel (1898-1901):

studied simple job of loading pig iron Identified the need to select proper worker for the job of lifting the 92-lb

pig bar

paid worker (Schmidt) $1.85 a day rather than $1.15 - earning 60%higher wage for loading 380% more pig iron improved cutting tools with slide rests and with small amounts of

tungsten and chromium to remove 300% more metal.

Kanigel, R. (1997) The One Best Way: Frederick Winslow Taylor and the Enigma of

Efficiency.New York: Viking.


13/50

Implications of Taylorism

Separation of skilled and unskilled work

Narrowed craft based work

Productivity improved [basis of Fordism]

Problems with boredom, repetition

Criticised as a means of control Argued to promote deskilling (Braverman):

a crime against humanity

deskilled the craft workers by splitting their traditional

crafts into many small parts, and redesigned the worksuch that anyone could do any number of the small parts.

removing craft pride, and the sense of oneself as aworker trained in an ancient skill

political consequence of weakening working classconsciousness


14/50


15/50

Example: Formula 1

Strict division of labour

Scientific measurement and formulae

Maximum efficiency (service vehicle in 7 seconds)


16/50

Efficiency

18 crew can service thevehicle in 7 seconds

Estimated that 1 crewmember would take 323seconds to service thevehicle

Which is the mostefficient method? If you can guarantee

demand, division of labourwill provide you with betterefficiency and effectiveness

# of Crew onproject

Salary /day Cars serviced

/day

1 $160 83/day

18 individuals $2880 1494/day

18, DoL $2880 3857/day


17/50

The Administrative Theorists

Concerned with the overall effectiveness of theorganisation:

Focus on principles to guide the management of the

entire organisation, to achieve specific goals

Key theorists:

Max Weber (Bureaucratic Organisations)

Mary Parker Follett (Administrative Principles)

Henri Fayol (Administrative Principles)


18/50

Fayol14 principles of management

Fayol was concerned universaltruths about management (that

could be taught to make peoplebetter managers)

The practice of management wasdistinct from other organisationalfunctions, such as accounting,production etc

Fayol, writing from his personalexperiences, identified 14principles about the practice ofmanagement.


19/50

Mary Parker Follett

Founder of Organisational

Behaviour movement

Discussed the importance of: Groups and teams

Human cooperation

Organisation as a community

Profit sharing

Role of managers to facilitate

cooperation and harmonywithin the workplace


20/50

Webers theory of Bureaucracy

Weber was interested in how large,administrative organisations (such asGovernment departments) could be managed,

to achieve both efficiency and effectiveness

Key ideas:

an ideal type of organisation (a hypothetical

construction) based on the idea of legitimate authority of

managers (reflected in the structure, processes and

procedures of the organisation)


21/50

Main characteristics

Specialised division of labour

Hierarchy

High levels of formalisation: rules, proceduresand decisions are codified

Impersonality: workers selected on the basisof technical qualifications which are

objectively assessed Promotion based on achievement or seniority

Management and ownership of organisation

are separate


22/50


23/50

The Humanistic

Perspective

The Human RelationsMovement


24/50

Human Relations Movement

Organisations are systems ofinterdependent human beings

Importance of basing management onunderstanding of human motivation

Recognition of conflict between needs of

individuals and management oforganisations


25/50


26/50

Hawthorne StudiesPhase 1

Researchers (Roethlisberger et al) set upexperimental work rooms and groups to study theimpact of changing working conditions on productivitylevels

Hypothesised that productivity would fall as workconditions became more oppressive: Vary levels of illumination (lighting) in the factory

the length of the work day

the length of the work week

the introduction of breaks during the day

Found that productivity improved regardless of whatspecific changes were introduced


27/50

Preliminary Conclusions

Employees worked harder because they were part ofthe experiment and they wanted to do the bestthey couldfor the researchers and the company

Greater productivity resulted from the positiveinterpersonal relationships and unusual level ofsupervisor attentionpresent in the experimentalgroup at every phase of the research

The experiment led to closer working relations whichincreased worker confidence and trust insupervisors.


28/50

Hawthorne StudiesPhase 2

Conclusions of initialresearch heavilycriticised, because of themethodology and validity

of conclusions based onresearch findings

Enter Elton Mayo: Australian psychologist

Headed a research team

from Harvard University Conducted a further series

of experiments from 1927-1932


29/50

Attitude test: Relay Assembly workers

Working conditions were changed in order todetermine the variation in output of 6 womenengaged in assembling a telephone

Note: boring and repetitive work, similar toworking conditions in Taylors Scientific

Management factory.


30/50

Relay Assembly Line

The groups assembledtelephone relayssmall,intricate mechanismscomposed of about forty

separate parts Assembled by the young

women seated alone ata bench

Relays weremechanically countedwhen finished


31/50

Normal working conditions

Conditions:

A forty-eight hour week

Six week day including Saturdays

No rest pauses

Output:

Each women produced 2,400 relays a week.


32/50

Experimental conditions

1. Piece-work for eight weeks

Output

2. Two 5 minute rest pauses, morning and

afternoon, for 5 weeks Output

3. Rest pauses lengthened to 10 minutes each.

Output sharply

4. Six 5 minute pauses were introduced

Output fell slightly (complaints that work rhythm broken)


33/50

Experimental conditions

5. Return to 2 rest pauses, with one free hotmeal supplied by Company

Output

6. 4.30 pm finish instead of 5.00 pm

Output

7. 4.00 pm finish

Output remained the same


34/50

Back to normal working conditions

Returned to conditions of the beginning ofthe experiment:

Work on Saturday

48 hour week

No rest pauses

No piece work

No free meal

Output was the highest ever recordedaveraging 3000 relays a week for each

worker.


35/50

Bank wiring observation room

14 men involved in banks of wiring7300connections expected per day (norm was 6000)

Informal group norms determined output level - less

than they were capable of producing Relations between employees influenced by group

dynamics

Conclusion that group or social pressures could bestronger than financial incentives as a factor inproductivity


36/50

The impact of the findings

Shift from emphasis on economic factors tosocial and human factors in organisations

Attention to:

The role of harmony and conflict Human motivation

Importance of leadership and supervisorydevelopment

Recognition of the Hawthorne effect: Being singled out, made to feel important increased

individuals productivity


37/50

Revised Conclusions

Work is a group activity

Informal, primary groups were discovered

Groups exert strong influence over individuals

Group co-operation determines productivity

Co operation can be elicited through thespecial attention of supervisors

Importance for managers of interpersonalskills as well as skills in control and planning

Productivity increases because of social

factors


38/50

The Human Relations School

Emphasis on the workers feelings and attitudes

about work and their work situation:

A satisfied worker will be a more productive worker

Productivity based on motivation

Job satisfaction

Cooperation between supervisors and workers

Developing both the social and technical skills ofmanagers


39/50

Are all satisfied employees productive?

Work by Douglas McGregor challenged view that a satisfiedworker is a productive worker. He identified two sets ofassumptions that drive worker behaviour

Theory X [assumptions]: Average human being has intense dislike for work and will avoid it

Therefore, people must be coerced, controlled, directed or threatened towork

Preference to be directed, avoid responsibility, low ambition

Security important

Theory Y is a more modern view of employees: Work is enjoyed and important element of life

People will exercise self-direction and self control

People are committed to organisations

People generally are imaginative, creative

Employee potential is only partly utilised


40/50

Quantitative Management



41/50

4. Management Science

Also called operations research orquantitative approach

Application of quantitative techniques toimprove managerial decision-making

Applications include: Optimization models

Linear programming

Information models

Computer simulations

Critical path scheduling analysis


42/50

The story so far

There are 4 Schools of Thought, each with:

a different focus

different advice for managers on how to increase

performance (efficiency and/or effectiveness)

conflicting advice for managers on how toincrease performance

Question: How can these ideas bereconciled?


43/50

Systems theoryA unifying paradigm



44/50

5. Systems theory

In the late 1960s, the systems approach began

to influence management thinking

Systems theory recognises:

the interdependency of internal organisationalactivities

the interdependency of the organisation and its

external environment uses biology as a metaphor for understanding

organisations


45/50

Systems theory: an example


46/50

Systems theory


47/50

Contingency theory

Application of systems thinking tomanagement

Contingency theory refutes universalistic,

one size fits allapproaches to management Suggests that managers must recognise and

respond to situational variables as they arise

-there is no one best way to manage

Explains the success and failure of certainapproaches (such as Scientific Management)


48/50

Implications for management

Contingency theory tells us that not allorganisations should be managed in the sameway. Consider the:

type of production process (or production system) characteristics of the technical system

optimal structure for the organisation

type of employees (professional, skilled (or semi),

unskilled) characteristics of the environment (stable, turbulent or

complex).


49/50

Summary

Scientific management production efficiency:

Concentrated on worker movements

Administrative theorists administrative

effectiveness: Fair and impartial decision-making

Humanistic perspective the social context of work:

Focus on the impact of socialisation on labour efficiency

Later theories attempted to integrate the vast anddisparate bodies of knowledge:

Contingency theory (based on systems theory)

Best management practice depends on context


50/50

Next week

The Business Environment

and

The Learning Organisation


principals of management - mba week2

Documents