Published on September 28, 2014
1 Principles of Management TTOOPPIICC EVOLUTION OF MANAGEMENT THOUGHT EVOLUTION OF MANAGEMENT THOUGHT
2 Figure Chronological Development of Management Perspectives 2–2
3 MANAGEMENT APPROACHES CLASSICAL • SCIENTIFIC • ADMINISTRATIV E • BEUROCRACY NEO -CLASSICAL • Hawthrone Experiments • Human Relations Movement • Behavioural Sciences Thinking MODERN • QUANTITATIVE • SYSTEM • CONTINGENCY
4 Figure Subfields of the Classical Perspective on Management 2–4 FFooccuusseess oonn tthhee iinnddiivviidduuaall wwoorrkkeerr’’ss pprroodduuccttiivviittyy FFooccuusseess oonn tthhee ffuunnccttiioonnss ooff mmaannaaggeemmeenntt FFooccuusseess oonn tthhee oovveerraallll oorrggaanniizzaattiioonnaall ssyysstteemm
5 Scientific Management: Taylor Frederick 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 2–5
Task Performance : Scientific 6 management incorporates basic expectations of management, including: ▫ Development of work standards ▫ Selection of workers ▫ Training of workers ▫ Support of workers 2–6 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.
Principles 1. Science – No rule of thumb. 2. Harmony, not discord. 3. Co-operation not Individualism. 4. Maximum output not restricted. 5. Development of each man to his best capacity and ability. 6. Maximum prosperity of employees, coupled with maximum prosperity of Orgn. ‘Mental Revolution’ Eyes off division of surplus, rather focus on increasing the size of surplus
Techniques.. • Time Study (work Measurement) • Motion Study • Method Study • Fatigue Study • Differential wage rate system • Scientific task planning • Standardization + Simplification • Functional Foremanship
Steps in Scientific Management 9 1 2 3 4 Develop a science for each element of the job to replace old rule-of-thumb methods Scientifically select employees and then train them to do the job as described in step 1 Supervise employees to make sure they follow the prescribed methods for performing their jobs Continue to plan the work, but use workers to get the work done Figure 1.3
11 Administrative Management: Fayol Henri 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. 2–11
Administrative Theory Henry Fayol (1841-1925) Father of Adminstrative Management His Contributions… o 6 Business Activities o 5 Management Functions o 14 Principles Business Activities 1. Technical 2. Commercial 3. Financial Operating activities of business 4. Accounting 5. Security 6.Managerial Activity Most Neglected
13 Fayol’s Principles Henri 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. 2–13
14 Fayol’s Principles 8. 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. 2–14
15 Bureaucratic Management Focuses on the overall organizational system. Bureaucratic management is based upon: Management responsibilitities are based on a person’s demonstrated ability to hold the position Best suitable person fills a particular position in a bureaucratic organization 2–15
Bureaucracy Max Weber (1864-1920) A German Social Scientist PPrriinncciipplleess oDivision of work oRules and Regulations oHierarchy of Authority oTechnical Competence oRecord Keeping oImpersonal Relations Legitimate Authority Charisma tic Tradition Rational al
17 Key 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. 2–17
A) Hawthrone Experiments George Elton Mayo (1880-1949) Father of Neo-Classical Approach Experiments conducted at a plant at Western Electric Company. Illumination Experiment Relay Assembly Test room studies Mass Interview Bank wiring observation room study Conclusion- 1. A work group- not a techno economic unit but a social system 2.Workers not only rational economic beings motivated by money, but also respond to work conditions 3.Social+Psychological factors exercise greater control on employee behaviour.
B) Human Relations Approach Pertains to motivating people in orgn to develop team work which effectively fulfills their needs and leads to achieving organisational goals. Contributions- 1.Moral Justification 2.Satisfy social and psychological needs to increase productivity. 3.Highlights the people side of orgn. 4.A true concern for workers 5.Focuses attention on inter-personal relations + Dynamics 6.Stressed on training of people management skills and managerial styles.
C) Behavioural Science Approach
21 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 2–21
22 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. 2–22
23 Elton Mayo Conducted 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. 2–23
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 24
Maslow’s Hierarchy of Needs 25 SA Esteem Needs Social Needs Security Needs Physiological Needs
26 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. 2–26
28 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 2–28
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) 29
Developed by N. Zaidi 30 The Integrated Systems Model FFeeeeddbbaacckk IInnppuuttss FFrroomm tthhee eennvviirroonnmmeenntt:: HHuummaann MMaatteerriiaall FFiinnaanncciiaall IInnffoorrmmaattiioonn PPrroocceessssiinngg TTrraannssffoorrmmaattiioonn pprroocceessss:: TTeecchhnnoollooggyy OOppeerraattiinngg ssyysstteemmss AAddmmiinniissttrraattiivvee ssyysstteemmss CCoonnttrrooll ssyysstteemmss OOuuttppuuttss IInnttoo tthhee eennvviirroonnmmeenntt PPrroodduucctt SSeerrvviicceess PPrrooffiitt//lloossss EEmmppllooyyeeee bbeehhaavviioorr IInnffoorrmmaattiioonn
Systems Perspective Developed by N. Zaidi • 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 31
Systems Perspective Developed by N. Zaidi • 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. 32
Systems Approach • Attempts to explain organisational behaviour by analysing the structure of orgn. • It was a result of those orgns that were trying to adapt to the rapid change in business environment. Features- 1. Unified and purposeful system 2. Each inter-related parts and subsystems. 3. Each system has a boundary- Internal or External 4. Open system Vs. Closed systems 5. A business enterprise as a open system (Draws Inputs- convert into output- sends to environment)
Contigency Approach • Was developed by managers, consultants and researcher who tried to apply the concept of earlier approaches to real life situations. ‘ There is no best way to tackle the problem of management. The application of management principles and practices is contingent upon the environment’
Best solution is one wwhhiicchh iiss rreessppoonnssiivvee ttoo tthhee ppeeccuullaarriittiieess ooff aa ggiivveenn ssiittuuaattiioonn.. Features 1.Mgt is situational. 2.Should match or fit its approach to the requirements of a particular situation. 3.Mgt’s success depends on its ability to cope with its env, it should sharpen its diagonistic skills so as to anticipate and comprehend the environmental change. 4.Mgrs should understand that there is no best way to manage.
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. 37
An Integrative Framework of Management Perspectives 38 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 Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling Behavioral Management Perspectives Insights for moti-vating performance and understanding individual behavior, groups and teams, and leadership Quantitative Management Perspectives Techniques for improving decision making, resource allocation, and operations Effective and efficient management
39 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. 2–39
40 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. 2–40
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