week 3

Week 3

Management yesterday and today.

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Principle of Management

Malaysian Institute of Aviation TechnologyThe Purpose of this chapter

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-To demonstrate that a knowledge of management history can help you understand contemporary management and practice.

-To show how they evolved to reflect the changing needs of organisations and society as a whole

Malaysian Institute of Aviation Technology

Introduction

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Organised activities and management have existed for thousand of yearsThe Egyptian pyramids and Great Wall of China (for example) are evidence that projects of tremendous scope, employing ten thousand of people, were undertaken well before modern times. The pyramids- the constructions of single pyramid occupied thousands of people for several decades


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The Pyramid ConstructionThe Great Wall of China

projects of tremendous scopeemploying tens of thousands of peoplewho told each worker what to do?who ensured enough stones at site?

The answer is managers

Venetian early form of business enterprise – 1400 (Venice)warships were floated along canals and each stop materials and riggings were added to the ship.Doesn’t it sound a lot like cars “floating” along an assembly line and components being added to it?The Venetians also had a warehouse and an inventory system to monitor its contents, personnel functions ...

Historical Background of Management

Regardless of what managers were called at that time, someone had to plan what was to be done, organise people and materials to do it, and provide direction for the workers

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Management

Malaysian Institute of Aviation TechnologyHOW DID INDUSTRIAL REVOLUTION INFLUENCE MANAGEMENT PRACTICE?

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Originating in the late 18th Century Great Britain, the Revolution had crossed the Atlantic to America by the end of the Civil War. Machine power was rapidly substituted for human power. Using machine, in turn made it economical to manufacture goods in factories. The advent of machine power, mass production, the reduced transportation costs that followed the rapid expansion of the railroads, and lack of governmental regulations also fostered the development of big organisations. Early 1900s, theory of management is developed.


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Adam Smith – doctrine titled “ The wealth of nations” – 1776 ...

...org & society can gain from the division of labour...the breakdown of job into narrow and respective tasks...

...concluded that division of labour increased productivity by increasing each worker’s skills... saving time lost in changing tasks...creating labour-saving inventions and machinery...

The Industrial Revolution... started in 18th century in GB... to America...

Major contribution:machine power

substituted human power.. in factory

more economical to make goods

Two Significant Pre-Twentieth-Century Events

Malaysian Institute of Aviation TechnologyWhat was adam smith’s contribution to the field of management?

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Division of labor-The breakdown of jobs into narrow, repetitive tasks.

-Today, the general popularity of job specialisation – in service jobs such as teaching and medicine as well as on assembly lines in automobile plants – is undoubtedly due to the economic advantages cited over 200 years ago by Adam Smith


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MANAGEMENT THEORIES 1990s

Quantitative Approach

General AdministrativeTheorist

Scientific Management

Development of Major Management Theories

Malaysian Institute of Aviation TechnologyScientific Management

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•If one had to pinpoint the year that modern management theory was born, one could make a strong case for 1911, the year that Frederick Winslow Taylor’s The Principles of Scientific Management was published. •The book described the theory of scientific management (widely accepted by managers throughout the world). •Scientific management - the use of scientific method to define “the one best way” for a job to be done. •Could select the right people for the job and train them to do it precisely •To motivate worker, he favoured incentive ‘wage plans’.


28th January 200911

Scientific Management

1911 – Principles of scientific management.The use of scientific method to determine the ‘one best way’ for a job to be done.

Frederick F. Taylor – 4 principle of management.• develop a science for each element of an individual’s work, which replace the old rule-of-thumb method. • scientifically select and train workers (previously, workers chose their own work and trained themselves as best they could• Cooperate with workers to get them to perform work according to the Principle science developed. • Share responsibility between management and workers.

Malaysian Institute of Aviation TechnologyWho were the other major contributors to scientific management?

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-Taylor’s Idea inspired others to study and develop methods of scientific management.

-Frank and Lilian Gilbreth – studied work arrangement to eliminate wasteful hand and body motion. -Gilbreth – among the first to use motion picture film to study hand and body motions.-Introduce ‘Therbligs’- 17 basic hand motion-The basis of today ‘time and motion’study

Gantt-Expanded the scope of scientific management to encompass the work of managers as well as that of operatives-Creating a graphic bar chart that could be used by managers as a scheduling device for planning and controlling work


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General Administrative Theorists. (Henri Fayol and Max Weber)

• Focus on the entire organisation.• Describes what managers do and what are good management practices. • Henry Fayol – 14 principle of management.

• Division of works. • Authority.• Discipline. • Unity of command.• Unity of direction.• Subordination of individual interests.• Remuneration.• Centralisation.• Scalar chain.• Order.• Equity.• Stability of the tenure of personnel.• Initiative.• Esprit de corps.


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General Administrative Theorists.

• Focus on the entire organisation.• Authority structures and relations. • Max Weber – Bureaucracy (theory of authority structures and described organisation activityon the basis of authority relations).

• A form of organisation characterised by the division of labour, a clearly defined Hierarchy, detailed rules and regulations and impersonal relationship.

A bureaucracy shudHave ..

Career Orientation.

Division ofLabours

AuthorityHierarchy.

Impersonality. Formal rules &Regulation.

FormalSelection.

ProfessionalManagers.

Uniform applicationOf rules & controls.

SOPs

Based onTechnical

qualification

Clear chainOf

Command

Well defined Tasks


QUANTITATIVE APPROACH

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The quantitative approach to management sometimes referred to as operations research or management science, evolved out of the development of mathematical and statistical solutions to military problems during World War II

Eg: When the British had to get the maximum effectiveness from their limited aircraft capability against the massive forces of the German, they asked their mathematicians to devise an optimum allocation model.


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Quantitative approach to Management.Involves use of quantitative technique to improve decision making..

• Labeled as operations research or management science. • Evolved out of the development of mathematical and statistical

solutions to military problems during WWII• After the war, quantitative technique applied to business sector by

Whiz Kids (group of military officers) who joined Ford Motor in mid-1940s began using quantitative technique to improve decision making at Ford.

What exactly does the quantitative approach do? - involves applications of statistics, optimisation models, computer

simulation etc.

Has contributed directly to management decision making in the areas of planning and control.


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Quantitative approach to Management.FOR INSTANCE :

Linear programming is a technique that managers can use to improve resource allocation

Work scheduling can become more efficient as a result of critical path scheduling analysis

Decision on determining optimum inventory levels have been significantly influenced by the economic order quantity model.


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Understanding organisational behaviour.

• The field of study concerned with the action of people at work. • Early advocates:

• Robert Owen, Hugo Munsterberg, Mary Parker Follett and Chester Barnard.• Belief that people were the most important asset of the organisation and should be managed accordingly.


Bachelor of Aviation Management19

OBEarly Advocate

Chester Barnard

Robert Owen

Mary ParkerFollett.

Hugo Munsterberg

• Working condition.• Idealistic workplace. • Investment in improving labour.

• Organisation as perspective of individual and group behaviours.• People oriented areas.• Organisation based on group ethics.

• Industry psychology for scientific study of peopleat work.• Using psychology test for people selection, learning theories etc.

• Organisation a social system.• Manager’s job to communicate & stimulate employees.• Organisation is an open system.

Early Advocates of Organisational Behaviour.


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The Hawthorne Studies. Western Electric engineers study the relationship of productivity to light illumination in the factory. Invited Harvard Professor Elton Mayo to help solve the non explainable results. Experiments includes job redesign, changes of work day and work week length, introduction of rest period and individual versus group wage plans. Mayo concluded that behaviour and sentiments are closely related, that group influence significantly affect individual behaviour and money is less a factor in determining group output than are group standards, group sentiments and security.



The Human Relation movement. Believed in the importance of employee satisfaction – satisfied worker was believed to be a productive worker. Names associated to this movement are Dale Carnegie (How to win friends..), Abraham Maslow (Hierarchy of needs), and Douglas McGregor (Theory X – Theory Y). Believes are shaped by personal philosophies than by substantive research evidence.



The Behavioural Science Theorists.Comprises of a psychologists and sociologists. Relied on the scientific method for the study of organisational behaviour.Such psychologists are Fred Fiedler, Victor Vroom, Frederick Herzberg, Edwin Locke, David McClelland and Richard Hackman.Their works includes the understanding of leadership, employee motivation and the design of jobs. Latest contributions includes the understanding of power, conflict and organisation design insights by Jeffrey Pfeffer, Kenneth Thomas and Charles Perrow.



Three integrative frameworks have evolved that can help you organise and better understand the subject matter of management. These are the process, systems and contingency approaches.

Process approach: the performance of planning, organising, leading, and controlling avtivities is seen as circular and continous. Systems approach: recognise the interdependency of internal organisational activities and of the organisation and its environment.Contingency approach: recognising and responding to situational variables as they arise.

Studying Management Today

Malaysian Institute of Aviation TechnologyHow can system approach integrate management concepts

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The system approach defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified wholeSocieties are system and so, too, are computers, automobiles, organisations, animals and human bodies. Two basic type of system – open and closeOpen system – a system that dynamically interact with its environmentClose system - a system that is not influenced by and does not interact with its environment


Organisations and its environment

25Stakeholders – any group that is affected by organisational decisions and policies



Current trends and issues. Globalisation. Workforce diversity. Entrepreneurship. Managing in an e-business world. Needs for innovation and flexibility. Quality management. Learning organisations and knowledge management. Workplace spirituality.



Workforce Diversity: A workforce that is more heterogeneous in terms of gender, race, ethnicity, age an other characteristics that reflect differences. Entrepreneurship. The process whereby an individual or a group of individuals uses organised efforts and means to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources re currently controlled.


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E-Business (internet based enterprise):• A comprehensive term describing the way an

organisation does its work by using electronic (internet based) linkages with its key constituencies in order to efficiently and effectively achieve its goals.

• It includes developing strategies for running internet based companies; improving communication between employees, customers and suppliers, and collaborating with partners to electronically coordinate design and production.

• E-organisation refers to applications of e business concepts to all organisations. (eg: hospital, school, museum, government agency, military)

E- commerce:• Any form of business exchange or transaction in which

the parties interact electronically.• e.g: presenting products on website and filling orders



All transactions between companies

and government organisation

Electronic marketsFormed by web

BasedAuctions.

ElectronicRetailing

All transactions between a company

and its suppliers.

.

Type of E-Commerce Transactions.



E-BusinessEnhanced

TotalE-Business

E-BusinessEnabled.

.

Organisation’s entire work processes revolve around e-business model.

E-Business tools and applications used within traditional organisation

E-Business unit with traditional organisation

Categories of E-Business Involvement.


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Total Quality Management: A philosophy of management that is driven by customer needs and expectations and that focuses on continual improvement of work processes. What is it? Intense focus on the customer. Concern for continual improvement. Process focused. Improvement in the quality of everything the organisation does. Accurate measurement. Empowerment of employees.



Learning organisation: An organisation that has developed the capacity to continuously learn, adapt and change. Knowledge management: Cultivating a learning culture in which organisational members systematically gather knowledge and share it with others in the organisation to achieve better performance.


Traditional Organisations Learning Organisations

Attitude towards change. If it is working, don’t change it. If you are not changing, it won’t be working for long.

Attitude towards new idea. If it wasn’t invented here, reject it.

If it was invented or reinvented here, reject it.

Who’s responsible for innovation?

Traditional areas such as R&D Everyone in the organisation.

Main fear Making mistakes Not learning, not adapting

Competitive advantage Products and service Ability to learn, knowledge and expertise.

Manager’s job To control others To enable others.

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Workplace spirituality. A recognition of an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.



Management is connected to other fields of study…. Management history allow us to understand the theory and practice better.. Important pre twentieth century contribution.. Scientific management .. Henry Fayol … Quantitative approach…Process, system and contingency approach… Current trend and issues.

Summary:


Motivating your self.

• Time Journal.

• To Do List. • Keep on telling your inner self that you are the best manager.



To Do List.

Imp

ort

ant.

No

tIm

po

rtan

t.

Due Soon. Not Due Soon.

1 2

3 4


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1. Identify the ways in which technology is changing the manager’s job and organisational success.

Give an example of one company and

discuss.

ASSIGNMENT WEEK 3 (in group)

Due: 5th Feb 2013