Chapter-1Chapter-1

History and Evolution of History and Evolution of Management ThoughtManagement Thought

IntroductionIntroduction

Early Approaches to Early Approaches to managementmanagement

Robert Owen: Robert Owen:

Human Resource Management PioneerHuman Resource Management Pioneer

Charles Babbage: Inventor Charles Babbage: Inventor and Management Scientistand Management Scientist

Andrew Ure and Charles Andrew Ure and Charles Dupin: Management Dupin: Management Education PioneersEducation Pioneers

Henry Robinson Towne Henry Robinson Towne (1844 – 1924) (1844 – 1924)

Classical ApproachClassical Approach

Classical Management can be divided Classical Management can be divided into three separate schools:into three separate schools:

Scientific ManagementScientific ManagementAdministrative ApproachAdministrative ApproachBureaucratic approachBureaucratic approach

Scientific ManagementScientific Management

Some of the earliest advocates of Some of the earliest advocates of scientific management were:scientific management were:

Fredrick Winslow TaylorFredrick Winslow TaylorFrank and Lillian Gilbreth Frank and Lillian Gilbreth Henry GanttHenry Gantt

Frederick Winslow TaylorFrederick Winslow Taylor

Known as “father of Known as “father of scientific managementscientific management

Soldiering Problem: An Soldiering Problem: An InsightInsight

Workers indulge in soldiering Workers indulge in soldiering for three main reasons:for three main reasons:

1. Fear of loss of job incase 1. Fear of loss of job incase of increased productivityof increased productivity

2. Faulty wage systems2. Faulty wage systems

3. Outdated methods of 3. Outdated methods of working working

Cont..Cont..

Major Managerial practices that Major Managerial practices that emerged from Taylor’s Approach:emerged from Taylor’s Approach:

Piece-rate systemPiece-rate systemTime-and-motion studyTime-and-motion study

Frank and Lillian GilbrethFrank and Lillian Gilbreth

Frank Gilbreth – “Father Frank Gilbreth – “Father of motion study”of motion study”

Lillian Gilbreth associated Lillian Gilbreth associated with research pertaining with research pertaining to motion studyto motion study

Motion study: Motion study:

The way of finding best The way of finding best sequence and minimum sequence and minimum no. of motions.no. of motions.

- Classification Scheme- Classification Scheme

- Micro Motion Study- Micro Motion Study

Henry Gantt (1861-1919)Henry Gantt (1861-1919)

Task-and-bonus Task-and-bonus systemsystem

Gantt ChartGantt Chart

LimitationsLimitations

These principles focus on solutions of These principles focus on solutions of problems from engineering point of viewproblems from engineering point of view

Motivated primarily by desire for material Motivated primarily by desire for material gainsgains

Ignore human desire for job satisfactionIgnore human desire for job satisfaction

Administrative TheoryAdministrative Theory

Focus: coordination of internal Focus: coordination of internal activities of organizationsactivities of organizations

Henry Fayol (1841-1925)Henry Fayol (1841-1925)

Developed general Developed general theory of theory of

management.management.

Business Operations of an Business Operations of an OrganisationOrganisation

Acc. To Fayol, business operations of an Acc. To Fayol, business operations of an organization could be divided into 6 activities:organization could be divided into 6 activities:

Technical – Producing and manufacturing Technical – Producing and manufacturing productsproducts

Commercial - Buying, selling , exchangeCommercial - Buying, selling , exchange Financial – Search for optimal use of capitalFinancial – Search for optimal use of capital Security Activities - Protecting employees and Security Activities - Protecting employees and

propertyproperty Accounting Activities - Recording and taking stock Accounting Activities - Recording and taking stock

of cost, profits and liabilitiesof cost, profits and liabilities Managerial Activities - Planning, Organizing, Managerial Activities - Planning, Organizing,

Commanding, Coordinating, ControllingCommanding, Coordinating, Controlling

Managerial ActivitiesManagerial Activities

Principles of managementPrinciples of management

Division of work Division of work AuthorityAuthority DisciplineDiscipline Unity of commandUnity of command Unity of directionUnity of direction Subordination of Subordination of

individual interestindividual interest RemunerationRemuneration

CentralizationCentralization Scalar chainScalar chain OrderOrder EquityEquity Stability of tenureStability of tenure InitiativeInitiative Esprit de corps Esprit de corps

Bureaucratic ManagementBureaucratic Management Emphasized the need for Emphasized the need for

organizations to function organizations to function on a rational basison a rational basis

Observed practice of Observed practice of nepotism and nepotism and condemned it.condemned it.

Identified characteristics Identified characteristics of Bureaucracy.of Bureaucracy.

Bureaucracy derived Bureaucracy derived from German word from German word buroburo, , meaning office.meaning office.

A highly structured, A highly structured, formulized and formulized and impersonal organization.impersonal organization.

Characteristics of Weber’s Characteristics of Weber’s BureaucracyBureaucracy

Work specializationWork specializationAbstract rules and regulationsAbstract rules and regulations Impersonality of ManagersImpersonality of ManagersHierarchy of organization structureHierarchy of organization structure

Advantages of Bureaucratic Advantages of Bureaucratic ManagementManagement

Help remove ambiguities and Help remove ambiguities and inefficiencies that characterize many inefficiencies that characterize many organizations.organizations.

Undermine the culture of patronage Undermine the culture of patronage that he saw in conflict with the that he saw in conflict with the principle of unity if controlprinciple of unity if control

Limitations of Bureaucratic Limitations of Bureaucratic Management and Administrative Management and Administrative

theorytheory Principles inapplicable to today's complex Principles inapplicable to today's complex

organizations.organizations. Fayol’s principle of specialization in conflict with Fayol’s principle of specialization in conflict with

principle of unity of control.principle of unity of control. Principle characteristics of bureaucracy destroy Principle characteristics of bureaucracy destroy

creativity and flexibility to respond to complex creativity and flexibility to respond to complex changes in global environment.changes in global environment.

Classical Theorists ignored important aspects of Classical Theorists ignored important aspects of organizational behavior.organizational behavior.

Failed to consider impact of external and internal Failed to consider impact of external and internal environment upon employee behavior in environment upon employee behavior in organizations.organizations.

Behavioral ApproachBehavioral Approach

Emphasis on Human ElementEmphasis on Human Element

Mary Parker Follet: Focus on Mary Parker Follet: Focus on Group InfluencesGroup Influences

Human ElementHuman Element GroupsGroups Power SharingPower Sharing IntegrityIntegrity

Elton Mayo: Focus on Human Elton Mayo: Focus on Human RelationsRelations

Hawthorne Experiment: Hawthorne Experiment: four phasesfour phases

Illumination Illumination ExperimentsExperiments

Relay Assembly Test Relay Assembly Test Room ExperimentRoom Experiment

Interview PhaseInterview Phase Bank wiring Bank wiring

observation room observation room experimentexperiment

Contributions of the ExperimentContributions of the Experiment

PrejudgmentsPrejudgments Job performance Job performance

depends on the depends on the individual workerindividual worker

Fatigue is the main Fatigue is the main factor affecting factor affecting outputoutput

Management sets Management sets production production standardsstandards

FindingsFindings The group is the key The group is the key

factor in job factor in job performanceperformance

Perceived meaning Perceived meaning and importance of and importance of the work determine the work determine outputoutput

Workplace culture Workplace culture sets its own sets its own production standardproduction standard

CriticismsCriticisms

Analysis supported by little evidenceAnalysis supported by little evidenceRelationship between satisfaction Relationship between satisfaction

and productivity- too simplisticand productivity- too simplisticFailed to focus attention on the Failed to focus attention on the

attitudes of employeesattitudes of employees

What is Human What is Human Relations Approach?Relations Approach?

LimitationsLimitations

The approach says very little about The approach says very little about positive motivationpositive motivation

It does not provide enough focus on It does not provide enough focus on workwork

It tends to be very vagueIt tends to be very vague

Abraham MaslowAbraham Maslow

Three assumptions:Three assumptions: Needs are never Needs are never

completely fulfilledcompletely fulfilled Through over actions Through over actions

we satisfy our we satisfy our unsatisfied needsunsatisfied needs

Hierarchical of needsHierarchical of needs 1. Physiological Needs1. Physiological Needs 2. Safety or security 2. Safety or security

needsneeds 3. Social Needs3. Social Needs 4. Self Fulfillment 4. Self Fulfillment

NeedsNeeds

Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

Douglas McGregorDouglas McGregor

Challenging Challenging Traditional Traditional

Assumptions about Assumptions about EmployeesEmployees

Theory X and Theory YTheory X and Theory Y

Chris Argyris: Matching Human and Chris Argyris: Matching Human and Organizational DevelopmentOrganizational Development

Three major Three major contributions:contributions:

Maturity-Maturity-Immaturity TheoryImmaturity Theory

Integration and Integration and Organizational Organizational GoalsGoals

Model I and Model Model I and Model IIII

Quantitative ApproachQuantitative Approach

Quantitative ApproachQuantitative Approach

Emerged during World War IIEmerged during World War II Includes:Includes:Application of statisticsApplication of statisticsOptimization modelsOptimization models Information ModelsInformation ModelsComputer SimulationsComputer Simulations

Branches of quantitative Branches of quantitative approach:approach:

Management ScienceManagement ScienceOperations ManagementOperations ManagementManagement Information SystemManagement Information System

Management ScienceManagement Science

Need for management science???Need for management science???

Areas of usage:Areas of usage: Capital Budgeting and cash flow managementCapital Budgeting and cash flow management Production SchedulingProduction Scheduling Development of product strategiesDevelopment of product strategies Planning for human resource development Planning for human resource development

programsprograms Maintenance of optimal inventory levelsMaintenance of optimal inventory levels Aircraft SchedulingAircraft Scheduling

Operations ManagementOperations Management

Operations Management:Operations Management:

Applied form of management science.Applied form of management science.Concerned with:Concerned with: Inventory ManagementInventory ManagementWork SchedulingWork SchedulingProduction PlanningProduction PlanningFacilities, location and designFacilities, location and designQuality assuranceQuality assurance

Management Information Management Information SystemSystem

Focus: Designing and Focus: Designing and implementing computer implementing computer

based information systembased information system

Modern Approaches To Modern Approaches To ManagementManagement

Modern Approaches To ManagementModern Approaches To Management

System TheorySystem Theory

This system approach gives manager a This system approach gives manager a new way of looking at an organization as a new way of looking at an organization as a whole and as a part of the larger, external whole and as a part of the larger, external environmentenvironment

Two types of systems:Two types of systems: Open System- which interacts with its Open System- which interacts with its

environmentenvironment Closed System – which does not interact Closed System – which does not interact

with its environmentwith its environment

Contingency theoryContingency theory

Also known as situational theory.Also known as situational theory.According to this theory, there is no According to this theory, there is no

one best way manage all situationsone best way manage all situationsDeveloped by managers, consultants Developed by managers, consultants

and researchers who tried to apply and researchers who tried to apply the concepts of the major schools of the concepts of the major schools of management thought to real life management thought to real life situation.situation.

Emerging Approaches in Emerging Approaches in Management ThoughtManagement Thought

William Ouchi, William Ouchi, conducted research on conducted research on both American and both American and Japanese management Japanese management approaches and outlined approaches and outlined a new theory called a new theory called theory Z.theory Z.

Theory ZTheory Z

Involves providing job security to Involves providing job security to employees.employees.

Ensures job rotation of employees to Ensures job rotation of employees to develop their cross-rotational skills.develop their cross-rotational skills.

Advocates participation of employees in the Advocates participation of employees in the decision making processdecision making process

Emphasizes on use of informal control in Emphasizes on use of informal control in organization.organization.

Shows concern for employee’s wellbeingShows concern for employee’s wellbeing Lays emphasis on their training and Lays emphasis on their training and

developmentdevelopment

Thank YouThank You