Mod 2
The Historical Context of Management
Sumerians - used written rules and regulations for governance
Egyptians - used management practices to construct pyramids
Babylonians - used extensive set of law and policies for governance
Greeks - used different governing Systems for cities and state
Romans - used organized structure for communication and control
Chinese - used extensive organization structure for government agencies and the arts
Venetians - used organization design and planning concepts to the control the seas
Adam Smith – Scottish philosopher
Father of Modern economics / concept of free market / famous
for his book : The Wealth of Nations in 1776 (let the market dictate for itself)
Robert Owen– Welsh industrialist and social reformist
Recognized the importance of human resources and the welfare of workers. He believed working people deserved kinder treatment. He thought if all people had a better quality of life, it would create a better, happier society
Charles Babbage – English mathematician and
mechanical engineer. Father of Computing / Focused on creating
production efficiencies through division of labor, and application of mathematics to management problems.
Industrial Revolution steam engine, the age of science and mass production, and the rise of digital technology, and currently, automation/ IoT /cloud computing, / AI / 3D printing / big data
Substituted machine power for human labor
Major Approaches to Management
Classical Management Perspective - workers only have physical and economic needs
Scientific Management - Concerned with improving the performance of individual workers
efficiency
Grew out of the industrial revolution’s labor shortage.
General Administrative Management - Focuses on managing the total organization rather than individuals.
Steps in Scientific Management
Frederick Winslow Taylor – American mechanical engineer; Father of scientific management
Using scientific methods to define the “one best way” for a job to be done; reduction of waste/increase production and efficiency; objective is to improve labor productivity
Putting the right person on the job with the correct tools and equipment
Having a standardized method of doing the job
Providing an economic incentive to the worker
Frank Gilbreth and Lillian Gilbreth
American engineers
Advocate of Scientific Management & Pioneer of Motion Study and Analysis /Time & Motion Study ECRS/ ASME Symbols/ 5S
increase productivity while reducing fatigue thus increasing profit
Both developed techniques and strategies for eliminating inefficiency.
Frank reduced bricklaying movements, resulting in increased output of 200%.
General Administrative Theory
Henri Fayol – French mining engineer
Identified the specific management functions of planning, organizing, leading, and controlling.
Max Weber – German sociologist; His Theory of Bureaucracy is based on a rational set of guidelines for structuring organizations.
discourage creativity and collaboration in the workplace, and oppose flexibility and risk.
stressed strict rules and a firm distribution of power.
Fayol’s 14 Principles of Management
Division of Work - specialization increases output by making employees more efficient.
Authority - managers must be able to give orders and authority gives them this right
Discipline - employees must obey and respect the rules govern by organization
Unity of Command - every employees receive orders to one superior
Unity of DIrection - organization should have single plan of action
Subordination of individual interest to general interest - interest of any one employee should not take precedence over the interest of the organization as a whole
Remuneration - workers must be paid fair wages for their service
Centralization - degree to which subordinates are involved in the decision making
Scalar chain - line of authority from top management to lowest ranks
Order - People and materials should be in the right place at the right time
Equity - managers should be kind and fair to subordinates
Stability of tenure of personnel - management should provide orderly personnel planning and ensure that replacements are available to fill vacancies
Initiative - employees are allowed to originate and carry out plans exert high level of efforts
Esprit de corps - promoting team spirit and build harmony and unity
The Quantitative Management Perspective
Quantitative Management aka Management Science
Helped Allied forces manage logistical problems during World War II.
Focuses on decision making, economic effectiveness, mathematical models, and use of computers to solve quantitative problems such as Linear Programming, Simulation, Queuing Theory
Operations Management is the practical application of management science to efficiently manage the production and distribution of products and services, e.g., Forecasting
Behavioral Management Perspective or Human Relations Movement
Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics.
Employees are motivated not only by financial reward but also by a range of social factors (e.g. praise, a sense of belonging, feelings of achievement and pride in one's work).
Assumed that the manager’s concern for workers would lead to increased worker satisfaction and
improved worker performance.people are the most important asset of an organization
Hugo Munsterberg
German American Psychologist
In 1913 he published his most influential work, Psychology and Industrial Efficiency, a book that was popular with American managers seeking to increase efficiency.
matching worker abilities to job requirements.
He believed that psychology possessed the tools to create that match by determining the psychological traits required for any job and using mental tests to identify suitable workers.
The Hawthorne Studies (Elton Mayo and Fritz Roethlisberger)
Conducted at Hawthorne Plant of Western Electric in Illinois
The Hawthorne studies showed that people's work performance is dependent on social issues and job satisfaction, and that monetary incentives and good working conditions are generally less important in improving employee productivity than meeting individuals' need and desire to belong to a group
Mayo Management theory states that employees are motivated far more by relational factors such as attention and camaraderie than by monetary rewards or environmental factors such as lighting, humidity, etc.
Elton Mayo’s (Harvard Professor) work was a turning point in the development of management thought. His work challenged the basic postulates of the classical approach. His studies revealed the overwhelming significance of human and social factors in industry. He is rightly called the 'Founder of the Human Relations Approach' to management.
Illumination study - Lighting adjustments affected both control and experimental groups of employees.
Group study - Incentive plan caused workers to establish informal levels of individual output.
Behavioral Management Theorists
Abraham Maslow
American psychologist with Jewish parents
advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy.
What a man can be, he must be. This need we call self-actualization.
Maslow’s Hierarchy of Needs
Douglas McGregor
MIT professor and author of the highly influential book "The Human Side of Enterprise”
Proposed Theory X and Theory Y concepts
of managerial beliefs about people and work.Theory X Assumptions (Douglas McGregor)
People do not like work and try to avoid it.
People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals.
People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.
Theory Y Assumptions
People do not naturally dislike work; work is a natural part of their lives.
People are internally motivated to reach objectives to which they are committed.
People are committed to goals to the degree that they receive personal rewards when they reach their objectives.
People will both seek and accept responsibility under favorable conditions.
People have the capacity to be innovative in solving organizational problems.
People are bright, but under most organizational conditions their potential is underutilized.
Henry Mintzberg
Canadian academic and author on business and management
Dr. William Ouchi
popularized during the Asian economic boom of the 1980s.
'Theory Z’ - Japanese Management Style - focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job.
The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. "This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making" (Ouchi, 1981). Ouchi shows that the results show lower turn-over, increased job commitment, and dramatically higher productivity
Organizational Behavior (OB)
Is the study of how humans, individuals and groups, interact within an organization and how these interactions affect an organization’s performance toward its goals.
The field examines the impact of various factors on behavior within an organization.
Focuses on behavioral perspectives.
Draws on psychology, sociology, anthropology, economics, and medicine.
Important OB research topics:
Job satisfaction and job stress
Motivation and leadership
Group dynamics and organizational politics
Interpersonal conflict
The structure and design of organizations
The Systems Approach & Its Concepts
first initiated by Ludwing Von Bertalanfty
Systems approach is a management perspective which advocates that any business problem should be seen as a whole which is made up of a hierarchy of sub-systems.
System – a collection of elements that are inter-related and interdependent, arranged in a manner that produces a unified whole.
Subsystems
A system within another system that is important due to its interdependence on other sub-systems within the organization.
It sees all departments and subsystems as contributing factors for the overall organization. Overall success of organizations is seen as a whole and not success of one department over the other.
Systems Perspective Concepts
Synergy (1+1 = 3)
Subsystems are more successful working together in than working alone.
The whole system (subsystems working together as one system) is more productive and efficient than the sum of its parts.
Entropy
Is a process in which an organizational system declines due to failing to adjust to change in its environment.
Is avoided through change and renewal.
The Contingency Perspective
Sometimes called the Situational Approach
Contingency Perspective
Suggests each organization is unique.
Appropriate managerial behavior depends (is contingent) on current situation in the organization.
There is no one universally applicable set of management principles (rules) by which to manage organizations.
Universal Perspectives
Include classical, behavioral, and quantitative approaches
Attempt to identify “one best way” to manage organizations
Contemporary Management Issues and Challenges
Globalization of product and service markets
An increasingly diverse and globalized workforce
An emphasis on ethics and social responsibility
The use of quality as the basis for competition
The shift to a predominately service-based economy
Meeting the challenges of a recovering economy
Creating new organizational structures to provide challenging, motivating, and flexible work environments
The effects of new information technology on how work is done in an organization
Management History Module
Describe some early management examples
Explain the various theories in the classical approach
Discuss the development and uses of the behavioral approach
Describe the quantitative approach
Explain the various theories in the contemporary approach
The Importance of History
An awareness and understanding of historical developments in management are important.
Furthers development of management practices.
Avoids mistakes of others in the past.
The Systems Approach & Its Concepts
Closed systems
Are not influenced by and do not interact with their environment (all system input and output is internal)
Open systems
Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments