MO: Topic 2

Management History Module Overview

Learning Objectives

  • Objective 1: Describe some early management examples within a historical context.

  • Objective 2: Explain the various theories in the classical approach to management.

  • Objective 3: Discuss the development and applications of the behavioral approach.

  • Objective 4: Describe the quantitative approach to management.

  • Objective 5: Explain various theories in contemporary management approaches.

Early Examples of Management

  • Historical Significance:

    • Construction of the Egyptian pyramids and the Great Wall of China serve as early examples of large-scale management, involving thousands of workers.

Historical Background (3000BC - 1776)

  • 1776:

    • Publication of Adam Smith’s "The Wealth of Nations."

    • Introduced the concept of division of labor (job specialization) which breaks down jobs into narrow, repetitive tasks.

  • Industrial Revolution:

    • Late 18th century marked a shift where machine power replaced human labor, making factory manufacturing more economical than home-based production.

Major Approaches to Management

  • Classical Approaches

    • Scientific Management

    • General Administrative Theory

    • Behavioral Approach

  • Quantitative Approach

  • Contemporary Approaches

Classical Approach (1911 - 1947)

  • Overview: Focuses on rationality and maximizing efficiency for organizations and workers.

  • Fredrick Winslow Taylor:

    • Known as the "father" of scientific management.

    • Scientific Management Defined:

    • Utilizes the scientific method to identify the "one best way" to perform a job.

  • Classical Approaches include various theories aimed at maximizing organizational efficiency. Two main categories are:

    • Scientific Management: Developed by Frederick Winslow Taylor, it focuses on efficiency by finding the "one best way" to perform tasks through scientific methods.

    • General Administrative Theory: Articulated primarily by Henri Fayol, it emphasizes management functions and principles that can be applied across different organizational contexts.

Example of Classical Approach

  • An example of the Scientific Management approach can be seen in a assembly line production. Imagine a car manufacturing facility:

    • Each worker is assigned a specific task, such as installing brakes or assembling engines, to enhance efficiency through job specialization (division of labor).

    • Workers receive training for their specific roles to improve their skills and speed.

    • Management uses time and motion studies to determine the most efficient way to complete these tasks, optimizing both production speed and worker performance.

Principles of Taylor's Scientific Management (Exhibit MH-2)

  1. Develop a science for each element of work to eliminate the rule-of-thumb method. (The rule-of-thumb method is an informal technique used to make decisions or estimates based on practical experience rather than a scientific approach. It often involves general guidelines or experience-based practices rather than definitive calculations or analysis. In the context of management, this method may lead to inefficiencies as it lacks the precision and structured methodology provided by scientific management approaches. Frederick Winslow Taylor’s scientific management sought to eliminate reliance on rule-of-thumb methods by developing a science for each element of work, ensuring that tasks are performed in the most efficient way possible.)

  2. Scientifically select and train workers to enhance performance.

  3. Cooperate with workers to ensure alignment with the developed work principles.

  4. Balance work and responsibilities between management and workers, ensuring each handles tasks suiting their skills.

Therbligs

  • Definition:

    • A classification scheme developed by Frank and Lillian Gilbreth, used to label basic hand and body motions in the performance of tasks.

General Administrative Theory

  • Focus: Describes managerial functions and defines good management practices.

  • Henri Fayol:

    • Developed 14 Principles of Management applicable across various scenarios.

Fayol's 14 Principles of Management (Exhibit MH-3)

  1. Division of Work: Enhances efficiency through specialization.

  2. Authority: Essential for managers to give orders, which comes with authority.

  3. Discipline: Adherence to organizational rules must be respected.

  4. Unity of Command: Employees must only report to one superior.

  5. Unity of Direction: A single action plan should guide the organization.

  6. Subordination of Individual Interests to the general interest: Collective interests should precede individual aspirations.

  7. Remuneration: Fair compensation for employees is required.

  8. Centralization: Involves the degree of subordinate participation in decision-making.

  9. Scalar Chain: Hierarchical line of authority from top management to the bottom.

  10. Order: Ensuring correct placement of personnel and materials (Ppl & materials should be in the right place & at the righ time.)

  11. Equity: Managers should be impartial and fair.

  12. Stability of Tenure of Personnel: Continuous recruitment planning ensures personnel stability.

  13. Initiative: Encouraging employees to take charge boosts effort levels.

  14. Esprit de Corps: Promoting team spirit fosters organization unity.

Max Weber and Bureaucracy

  • Definition: A form of organization characterized by:

    • Division of labor: tasks are divided into specific roles

    • Defined hierarchy: a clear structure of authority

    • Detailed rules and regulations: operate under a set of established rules that guide operations & personal conduct within the organization

    • Impersonal relationships: to ensure that interactions are focused on professional duties rather than personal connections, fostering a more efficient work environment.

Behavioral Approach (Late 1700 - 1950s)

  • Organizational Behavior (OB): The study of how people act within work settings.

  • Notable Advocates:

    • Robert Owen

    • Hugo Munsterberg

    • Mary Parker Follett

    • Chester Barnard

Hawthorne Studies

  • A series of studies in the 1920s and 1930s that yielded important insights into worker behavior.

    • Key Implication: Workers' feelings and sentiments directly influence performance.

Quantitative Approach (1940s - 1950s)

  • Also known as Management Science.

  • Definition: The application of quantitative techniques to improve management decision-making capabilities.

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Contemporary Approaches (1960s - Present)

Systems Approach

  • Definition of Systems: An assembly of interrelated parts functioning together as a unified entity.

    • Actions in one area affect others within the organization.

  • Process Stages:

    • Input stage | Transformation process | Output stage

    • Inputs (resources) sourced from the environment are processed into outputs.

Open vs. Closed Systems

  • Closed System: Does not interact or receive influence from its environment.

  • Open System: Interacts with and is influenced by external environments.

Contingency Approach

  • This approach acknowledges differences among organizations.

    • Each organization faces unique circumstances (contingencies) that necessitate diverse management strategies.

    • Core Tenet: There is no singular best methodology for organization management.

Review of Learning Objectives

  1. Early management examples include the Egyptian pyramids and the Great Wall of China, demonstrating large-scale organization skills.

  2. Classical approach theories include Scientific Management by Taylor and General Administrative Theory articulated by Fayol.

    • Featured principles emphasize efficiency, authority, and collective interests over individual ones.

  3. The behavioral approach demonstrates the importance of people in organizational success, as exemplified by the Hawthorne Studies.

  4. The Quantitative approach applies statistical methods and models for enhanced decision-making.

  5. Contemporary approaches include Systems and Contingency approaches, focusing on the interactions and responses to unique organizational challenges.

Terms to Know

  • Division of Labor (Job Specialization)

  • Industrial Revolution: from human labour to machines

  • Classical Approach: Scientific Management & General Administrative Theory

  • Scientific Management: “one best way” to do things effectively

  • General Administrative Theory: the 14 functions and rules

  • 14 Principles of Management: e.g. Unity of Command

  • Bureaucracy

  • Organizational Behavior (OB): how ppl behave at work settings

  • Quantitative Approach

    • Utilizes mathematical and statistical techniques to analyze data and make informed management decisions.

  • Management Science

  • Hawthorne Studies: That the worker’s feelings and sentiments will affect their work

  • System: one part of the system will affect the whole operation

  • Closed Systems: will not be affected by external environment

  • Open Systems: will be affected

  • Contingency Approach: acknowlege that every organization is different, cant apply one solution to all