2918424 PPT of Thoeries of Mgnt

8/6/2019 2918424 PPT of Thoeries of Mgnt

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The Evolution of The Evolution of

Management TheoryManagement Theory

By: Sheeba Rehman

IMS-Noida


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Evolution of Management Theory


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J ob Specialization and the Division of J ob Specialization and the Division of

Labor Labor Adam Smith (18th century economist)Adam Smith (18th century economist)

Observed that firms manufactured pins in one of Observed that firms manufactured pins in one of two different ways:two different ways:

CraftCraft--stylestyle each worker did all steps.each worker did all steps.ProductionProduction each worker specialized in oneeach worker specialized in onestep.step.

Realized that job specialization resulted in muchRealized that job specialization resulted in muchhigher efficiency and productivityhigher efficiency and productivity

Breaking down the total job allowed for theBreaking down the total job allowed for thedivision of labor in which workers becamedivision of labor in which workers becamevery skilled at their specific tasks.very skilled at their specific tasks.


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F .W. Taylor and Scientific ManagementF .W. Taylor and Scientific Management

Scientific ManagementScientific Management

The systematic study of the relationshipsThe systematic study of the relationships between people and tasks for the purpose of between people and tasks for the purpose of

redesigning the work process for higher redesigning the work process for higher efficiency.efficiency.

Defined by F rederick Taylor in the late 1800sDefined by F rederick Taylor in the late 1800sto replace informal rule of thumb knowledge.to replace informal rule of thumb knowledge.

Taylor sought to reduce the time a worker Taylor sought to reduce the time a worker spent on each task by optimizing the way thespent on each task by optimizing the way thetask was done.task was done.


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F our Principles of Scientific ManagementF our Principles of Scientific Management

Principles to increase efficiency:Principles to increase efficiency:1.1. Study the ways jobs are performed now andStudy the ways jobs are performed now and

determine new ways to do them.determine new ways to do them.

Gather detailed time and motion information.Gather detailed time and motion information.Try different methods to see which is best.Try different methods to see which is best.

2.2. Codify the new methods into rules.Codify the new methods into rules.Teach to all workers the new method.Teach to all workers the new method.

3.3. Select workers whose skills match the rules.Select workers whose skills match the rules.4.4. Establish fair levels of performance and pay aEstablish fair levels of performance and pay a

premium for higher performance. premium for higher performance.

Workers should benefit from higher outputWorkers should benefit from higher output


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Problems with Scientific ManagementProblems with Scientific Management

Managers frequently implemented only theManagers frequently implemented only theincreased output side of Taylors plan.increased output side of Taylors plan.

Workers did not share in the increased output.Workers did not share in the increased output.

Specialized jobs became very boring, dull.Specialized jobs became very boring, dull.Workers ended up distrusting the ScientificWorkers ended up distrusting the ScientificManagement method.Management method.

Workers could purposely under Workers could purposely under- -perform. perform.Management responded with increased use of Management responded with increased use of machines and conveyors belts.machines and conveyors belts.


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Administrative Management TheoryAdministrative Management Theory

Administrative ManagementAdministrative Management

The study of how to create an organizationalThe study of how to create an organizationalstructure that leads to high efficiency andstructure that leads to high efficiency and

effectiveness.effectiveness.Max Weber Max Weber

Developed the concept of bureaucracy as aDeveloped the concept of bureaucracy as aformal system of organization and administrationformal system of organization and administrationdesigned to ensure efficiency and effectiveness.designed to ensure efficiency and effectiveness.


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WebersWebers

Principles of Principles of BureaucracyBureaucracy


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Webers F ive Principles of BureaucracyWebers F ive Principles of Bureaucracy

Authority is the power to hold people accountableAuthority is the power to hold people accountablefor their actions.for their actions.

Positions in the firm should be held based onPositions in the firm should be held based on

performance, not social contacts. performance, not social contacts.Position duties are clearly identified so that peoplePosition duties are clearly identified so that peopleknow what is expected of them.know what is expected of them.

Lines of authority should be clearly identified suchLines of authority should be clearly identified suchthat workers know who reports to who.that workers know who reports to who.

Rules, standard operating procedures (SOPs), andRules, standard operating procedures (SOPs), andnorms guide the firms operations.norms guide the firms operations.


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F ayols Principles of ManagementF ayols Principles of Management

Division of Labor: allows for job specialization.Division of Labor: allows for job specialization.F ayol noted jobs can have too muchF ayol noted jobs can have too muchspecialization leading to poor quality and worker specialization leading to poor quality and worker

dissatisfaction.dissatisfaction.Authority and ResponsibilityAuthority and Responsibility

F ayol included both formal and informalF ayol included both formal and informalauthority resulting from special expertise.authority resulting from special expertise.

Unity of CommandUnity of Command

Employees should have only one boss.Employees should have only one boss.


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F ayols Principles of Management (contd)F ayols Principles of Management (contd)

Line of AuthorityLine of Authority

A clear chain of command from top to bottom of A clear chain of command from top to bottom of the firm.the firm.

CentralizationCentralizationThe degree to which authority rests at the top of The degree to which authority rests at the top of the organization.the organization.

Unity of DirectionUnity of DirectionA single plan of action to guide the organization.A single plan of action to guide the organization.


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EquityEquityThe provision of justice and the fair andThe provision of justice and the fair andimpartial treatment of all employees.impartial treatment of all employees.

Order Order The arrangement of employees where they willThe arrangement of employees where they will be of the most value to the organization and to be of the most value to the organization and to provide career opportunities. provide career opportunities.

InitiativeInitiativeThe fostering of creativity and innovation byThe fostering of creativity and innovation byencouraging employees to act on their own.encouraging employees to act on their own.


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DisciplineDisciplineObedient, applied, respectful employees areObedient, applied, respectful employees arenecessary for the organization to function.necessary for the organization to function.

Remuneration of PersonnelRemuneration of PersonnelAn equitable uniform payment system thatAn equitable uniform payment system thatmotivates contributes to organizational success.motivates contributes to organizational success.

Stability of Tenure of PersonnelStability of Tenure of Personnel

LongLong--term employment is important for theterm employment is important for thedevelopment of skills that improve thedevelopment of skills that improve theorganizations performance.organizations performance.


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Subordination of Individual Interest to theSubordination of Individual Interest to theCommon InterestCommon Interest

The interest of the organization takes precedenceThe interest of the organization takes precedence

over that of the individual employee.over that of the individual employee.Esprit de corpsEsprit de corps

Comradeship, shared enthusiasm foster devotionComradeship, shared enthusiasm foster devotionto the common cause (organization).to the common cause (organization).


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Behavioral Management TheoryBehavioral Management Theory

Behavioral ManagementBehavioral Management

The study of how managers should behave toThe study of how managers should behave tomotivate employees and encourage them tomotivate employees and encourage them to

perform at high levels and be committed to the perform at high levels and be committed to theachievement of organizational goals.achievement of organizational goals.F ocuses on the way a manager should personallyF ocuses on the way a manager should personallymanage to motivate employees.manage to motivate employees.


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Behavioral ManagementBehavioral Management

Mary Parker F ollettMary Parker F ollett

An influential leader in early managerial theoryAn influential leader in early managerial theory

Held a horizontal view of power and authority inHeld a horizontal view of power and authority in

organizationsorganizationsSuggested workers help in analyzing their jobsSuggested workers help in analyzing their jobsfor improvementsfor improvements t the worker knows the besthe worker knows the bestway to improve the job.way to improve the job.

If workers have relevant knowledge of theIf workers have relevant knowledge of thetask, then they should control the task.task, then they should control the task.


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Management Science TheoryManagement Science Theory

An approach to management that uses rigorousAn approach to management that uses rigorousquantitative techniques to maximize the use of quantitative techniques to maximize the use of organizational resources.organizational resources.

Q uantitative managementQ uantitative management utilizes linear utilizes linear programming, modeling, simulation systems. programming, modeling, simulation systems.Op erations managementOp erations management techniques totechniques toanalyze all aspects of the production system.analyze all aspects of the production system.Total Q uality Management (T Q M)Total Q uality Management (T Q M) focusesfocuseson improving quality throughout anon improving quality throughout anorganization.organization.Management Information Systems (MIS)Management Information Systems (MIS)

provides information about the organization. provides information about the organization.


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Organizational Environment TheoryOrganizational Environment Theory

Organizational EnvironmentOrganizational Environment

The set of forces and conditions that operateThe set of forces and conditions that operate beyond an organizations boundaries but affect a beyond an organizations boundaries but affect amanagers ability to acquire and utilizemanagers ability to acquire and utilizeresources.resources.


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The OpenThe Open--Systems ViewSystems View

Open SystemOpen System

A system that takes resources for its externalA system that takes resources for its externalenvironment and converts them into goods andenvironment and converts them into goods and

services that are then sent back to thatservices that are then sent back to thatenvironment for purchase by customers.environment for purchase by customers.

Inputs: the acquisition of external resources.Inputs: the acquisition of external resources.

Conversion: the processing of inputs into goodsConversion: the processing of inputs into goodsand services.and services.

Output: the release of finished goods into theOutput: the release of finished goods into theenvironment.environment.


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The Organization as an Open SystemThe Organization as an Open System


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Other System ConsiderationsOther System Considerations

Closed systemClosed systemA system that is self A system that is self- -contained and thus notcontained and thus notaffected by changes occurring in its externalaffected by changes occurring in its externalenvironment.environment.Often undergoes entropy and loses its ability toOften undergoes entropy and loses its ability tocontrol itself, and fails.control itself, and fails.

SynergySynergy

Performance that results when individuals andPerformance that results when individuals anddepartments coordinate their actionsdepartments coordinate their actionsPerformance gains of the whole surpass thePerformance gains of the whole surpass thesum of the performance of the individualsum of the performance of the individual

components.components.


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Contingency TheoryContingency Theory

Contingency TheoryContingency TheoryThe idea that the organizational structures andThe idea that the organizational structures andcontrol systems manager choose depend oncontrol systems manager choose depend on arearecontingent oncontingent on characteristics of the externalcharacteristics of the externalenvironment in which the organization operates.environment in which the organization operates.Assumes there is no one best way to manage.Assumes there is no one best way to manage.

The environment impacts the firm andThe environment impacts the firm andmanagers must be flexible to react tomanagers must be flexible to react toenvironmental changes.environmental changes.

In rapidly changing organizational environments,In rapidly changing organizational environments,managers must find ways to coordinate differentmanagers must find ways to coordinate differentdepartments to respond quickly and effectively.departments to respond quickly and effectively.


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Contingency Theory of OrganizationalContingency Theory of Organizational

DesignDesign


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Mechanistic and Organic StructuresMechanistic and Organic Structures

Mechanistic StructureMechanistic StructureAuthority is centralized at the top. (Theory X)Authority is centralized at the top. (Theory X)Employees are closely monitored and managed.Employees are closely monitored and managed.

Can be very efficient in a stable environment.Can be very efficient in a stable environment.Organic structureOrganic structure

Authority is decentralized throughout theAuthority is decentralized throughout theorganization. (Theory Y)organization. (Theory Y)Tasks and roles are left ambiguous to encourageTasks and roles are left ambiguous to encourageemployees to react quickly to changingemployees to react quickly to changingenvironment.environment.

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