MANAGEMENT THEORY

MANAGEMENTTHEORIESThe Evolution of Management Theory Mala Sarat Chandra Twitter: @malachandraLearning Objectives Explain what a management theory is. Understand the evolution of management theories and their major contributions. 9/13/2013 Mala Sarat Chandra 2EVOLUTION OF MANAGEMENT THEORY 9/13/2013 Mala Sarat Chandra 3Classical Management School Scientific Administrative Bureaucratic Neo-Classical Management School Human Relations Behavioral Modern Management School Systems Contingency Organizational Humanism Management Science Evolution of Management Theory 1920-1950 1880 - 1930 9/13/2013 Mala Sarat Chandra 4THE CLASSICAL SCHOOL OF MANAGEMENT 1900 - 1930 9/13/2013 Mala Sarat Chandra 5Core Ideas 1. Application of science to the practice of management. 2. Development of basic management functions. 3. Articulation and application of specific principles of management. Evolved in response to the shift from handicraft to industrial production. Emphasis is on economic rationality of people and organizations; motivated by economic incentives, they make choices that yield the greatest monetary benefits. 9/13/2013 Mala Sarat Chandra 6Max Webber 1905 The Theory of Social and Economic Organization The Bureaucratic School of Management A major contribution is his bureaucracy theory, a formalized and idealized view of organizations, comprising 6 major principles. 1. A formal hierarchical structure. 2. Management by rules. 3. Organization by task competency. 4. Impersonal relationships. 5. A focused mission. 6. Employment based on technical qualifications. 9/13/2013 Mala Sarat Chandra 7Frederick Taylor 1911 Principles of Scientific Management The Scientific School of Management Proposed an objective and systematic method to identify the one best way to do a job using scientific selection and training methods; co-operation and clear division of responsibility between managers and workers; pay for performance. 9/13/2013 Mala Sarat Chandra 8Frank & Lillian Gilbreth 1912 - 1924 Time and Motion Studies Disciples of Frederick Taylor, their time and motion studies helped lay the foundations for Scientific Management the best possible way for a worker to complete a job. The expected results are employee satisfaction, productivity and efficiency. 9/13/2013 Mala Sarat Chandra 9Henry Gantt 1910 - 1915 Project Scheduling The Gantt Chart A protg and associate of Frederick Taylor, he designed a project scheduling model for increasing the efficiency of project execution and completion. 9/13/2013 Mala Sarat Chandra 10Henri Fayol 1916 Administration Industrielle et Generale The Administrative School of Management Managers need specific roles in order to manage work and workers. He enumerated 6 functions / roles of management. 1. Forecasting 4. Commanding 2. Planning 5. Coordinating 3. Organizing 6. Controlling These roles evolved into 14 principles of management. Division of work, Authority, Discipline, Unity of Command, Unity of Direction, Subordination of Interests, Remuneration, Centralization, Scalar Chain, Equity, Order, Stability of Tenure of Personnel, Initiative, Esprit de Corp. 9/13/2013 Mala Sarat Chandra 11Ford and Frederick Taylors Scientific Management http://www.youtube.com/watch?v=8PdmNbqtDdI 9/13/2013 Mala Sarat Chandra 12Summary: The Classical School of Management Scientific Concern for precise work methods Best way for jobs to be done Bureaucratic Impersonal view of organizations Formal structure, legitimate authority and competence of management Administrative Development of managerial principles Best way to organize all jobs in a business 9/13/2013 Mala Sarat Chandra 13Criticisms of The Classical School of Management No one is entirely driven by economic motivations. Peoples choices and behavior are dictated by other factors such as social needs, security and self- esteem. There is no such thing as the best way to do a job. Extreme division of labor tends to produce monotony and reduce overall skill levels. People are managed like machines. Introduction of newer machines led to job elimination. 9/13/2013 Mala Sarat Chandra 14THE NEO-CLASSICAL SCHOOL OF MANAGEMENT 1920 - 1950 9/13/2013 Mala Sarat Chandra 15Core Concepts Grew in reaction against the Scientific Theory of Management which emphasized standardization of jobs, processes and technologies to maximize economic return. Focus shifted to the human side of organizations. 1. The best way to motivate, structure and support employees. 2. The need for workers to find intrinsic value in their jobs. 3. The positive impact of social relationships on worker productivity. 9/13/2013 Mala Sarat Chandra 16Mary Parker Follet 1925 The Psychological Foundations of Business Administration Pioneered the notion of participative leadership. Suggests that organizations are communities involving networks of groups. Workers and managers equally share power and responsibility for decision making and therefore, their outcomes. She introduces many contemporary concepts such as leadership, motivation and empowerment. 9/13/2013 Mala Sarat Chandra 17The Hawthorne Studies http://www.youtube.com/watch?v=W7RHjwmVGhs 2:49 9/13/2013 Mala Sarat Chandra 18The Hawthorne Effect Productivity increases when workers believe that they are being observed closely. Employees perform better when managers and co-workers make them feel valued. Financial rewards are not necessarily conducive to increasing worker productivity. Workers care about self-fulfillment, autonomy, empowerment, social status and personal relationships with co-workers. 9/13/2013 Mala Sarat Chandra 19Human Relations Theory of Management Elton Mayo 1933 The Human Poblems of an Industrial Civilization Fritz Roethlisberger 1939 Management and the Worker People are social beings, motivated by social needs. A sense of identity is derived from inter-personal relationships. Workers are more receptive to social forces of peer groups than monetary incentives and management controls. Workers respond positively to attention from management, co- workers and customers. The psychological needs of individuals significantly impact group performance. 9/13/2013 Mala Sarat Chandra 20Chester Barnard 1938 The Functions of the Executive Proposes the acceptance theory of authority, that organizational goals will be achieved and managerial authority will be accepted if workers believe that their individual needs are being met. 9/13/2013 Mala Sarat Chandra 21Behavioral Theory of Management The fulfillment of emotional needs of workers is important in achieving economic goals. Employee satisfaction and working conditions are important in achieving worker productivity. Workers are intrinsically motivated to work when they feel a sense of belonging and participate in decision making. Workers desire diverse and challenging work. 9/13/2013 Mala Sarat Chandra 22Abraham Maslow 1954 Motivation and Personality Self Actualization Esteem Social Safety Physiological Hierarchy of Needs Theory Working Conditions and Work hours Personal and financial security Collaboration, teamwork, work-life balance Recognition and Rewards Autonomy, Empowerment 9/13/2013 Mala Sarat Chandra 23Douglas McGregor 1960 Human side of Enterprise Theory X Managers Workers must be coerced and controlled to work towards organizational goals. Workers are inherently lazy, lack ambition and prefer to be directed rather than take responsibilities. Workers are self-centered and only care about themselves, not the organization. Workers dislike change and will resist it at all cost. Theory Y Managers Workers encouraged to develop their full potential will work towards achieving organizational goals. With appropriate incentives and support, workers will seek out and fulfill responsibilities on their own. Workers will apply their ingenuity, creativity and hard work to meet organizational goals. Caution: Self-Fulfilling Prophecy Workers behave as expected by managers due to the managers own behavior and actions. 9/13/2013 Mala Sarat Chandra 24Notable Contributors to the Behavioral School of Management (1) Chris Argyris 1957 Personality and Organization Fundamental conflicts between Individual and Organizational needs. Frederick Herzberg 1959 The Motivation to Work. Two-factor Theory. Kurt Lewin 1944 1951 Model of planned change: unfreeze, change, refreeze 9/13/2013 Mala Sarat Chandra 25Notable Contributors to the Behavioral School of Management (2) Rensis Likert 1967 The Human Organization Linking-pin model to bridge human relations and organizational structure George Homans 1950 The Human Group Extrapolates from a small group to understanding the social system. Warren Bennis 1961 The Planning of Change Foundation for planned organizational change and development. 9/13/2013 Mala Sarat Chandra 26Summary: Neo-Classical School of Management Behavioral School is a logical extension of the Human Resource School. They are largely concerned with motivation of workers. Workers are diverse in their needs and want challenging work, participative decision-making, self-direction and control. Managers must help workers deal with situational constraints and social aspects of organizational and environmental changes. 9/13/2013 Mala Sarat Chandra 27THE MODERN SCHOOL OF MANAGEMENT 9/13/2013 Mala Sarat Chandra 28Core Concepts Dealing with complexity is the core of modern management theory. Organizations, Workers, Environment and the interactions between them. It is a synthesis of several theories. Behavioral science, mathematics, statistics, operations / quantitative research and computing technologies. Management is an exercise in logic applied to situations. Situations can be measured. Computers have an increasing role to play. Application of management knowledge is extended to non- business areas. Education, government, health care and others. 9/13/2013 Mala Sarat Chandra 29The Quantitative School of Management Combines classical management theory and behavioral science through the use of statistical models and simulations. A major focus is on the process with which decisions are made, to ensure informed results. The quantitative school comprises Scientific Management Managers use of math and statistics for problem solving. Operations Management Managing the process of combining materials, workers and capital to produce goods and services. Management Information Systems Transforming historic, current and projected data from internal and external sources into useful, usable management information. Systems Management Theory Transforming inputs into outputs and receiving feedback. 9/13/2013 Mala Sarat Chandra 30The Systems School of Management 9/13/2013 Mala Sarat Chandra 31 The Environment in which the system operates. Environmental elements have the potential to affect all or part of the system Throughput The process of converting or transforming resources within the system into a product or service Input Resources from the environment Output The product or service exported to the environment Feedback from the environment used to change & grow Ludwig von Bertalanffy 1937 Allgemeine Systemlehre (General Systems Theory)Types of Systems Closed System Open System 9/13/2013 Mala Sarat Chandra 32 Systems and wholeness Guidelines for System Analysis 1. The focus of analysis is the whole, parts receive secondary attention. 2. Integration (interrelatedness of the many parts within the whole) is the key in wholeness analysis. 3. Possible modifications in each part should be weighed in relation to possible effects on every other part. 4. Each part has a role to perform so the whole can accomplish its purpose. 5. The nature of the part and its function is determined by its position in the whole. 6. All analysis starts with the existence of the whole. Parts and their relationships should evolve to best suit the purpose of the whole. Source: Modern Management by Certo & CertoThe Management System It is an open system comprising parts such as organizational resources (capital, raw materials, workers), the production process, information systems, finished goods, that are needed to achieve the organizations goals. 9/13/2013 Mala Sarat Chandra 33 Input Process Output Customers Government Competitors Suppliers EnvironmentThe Contingency School of Management (1) 9/13/2013 Mala Sarat Chandra 34 Joan Woodward 1965 Industrial Organziation: Theory and Practice & P. Lawrence J.W. Lorsch 1967 Organization & Environment: Managing Differentiation and Integration Argued that technology and production systems were critical aspects of organizational design; advanced a contingency approach to organizing. Suggested that successful organizations match their structure to the nature of the environmentThe Contingency School of Management (2) 9/13/2013 Mala Sarat Chandra 35 Fred Edward Fiedler 1967 A Theory of Leadership Effectiveness Daniel Katz Robert Kahn 1966 The Psychology of Organizations Present a unified, open systems approach extending organizational theory beyond the boundaries of a single organization. Argued that leadership effectiveness is contingent upon two interacting factors, Leadership style and situational favourableness.Definition of an Organization An Organization is a social system comprising subsystems of resource variables, interrelated by various management policies, practices and techniques which interact with variables in the environment to achieve a set of goals or objectives. 9/13/2013 Mala Sarat Chandra 36 Source: A General Contingency Theory of Management, Luthans and Stewart (1977) SYSTEM PERFORMANCE Environmental ManagementResource ORGANIZATIONAL PERFORMANCE CRITERIASITUATIONAL Variables and relationships in a Contingency Model of the OrganizationCore Concepts What managers do depends on or is contingent on the situation at hand; it emphasizes an if- then relationship. If a particular situational variable exists, then managers are likely to take a particular action. Successful managers must consider the realities of the specific organizational circumstances they face when applying management concepts, principles, tools and techniques. Source: Modern Management by Certo & Certo Mala Sarat Chandra 37Challenges with the Contingency Approach 1. Perceiving organizational situations as they actually exist. 2. Choosing the management tactics best suited to those situations. 3. Competently implementing those tasks. 9/13/2013 Mala Sarat Chandra 38 Source: Modern Management by Certo & CertoSummary Three distinct Schools of Management Classical Process Neo-Classical People Modern Integrative - People, Process, Environment 9/13/2013 Mala Sarat Chandra 39Key Concepts: Definition of Management Management is the process of accomplishing an organizations goals by working with and through people, utilizing all the resources available to it. The Role of Management Mala Sarat Chandra 40Key Concepts: The Role of Management Planning Doing the right thing at the right time to accomplish organizational goals. Choose the tasks that need to be performed and decide when and how to perform those tasks. Organizing Creating a mechanism to put plans into action. Assign tasks to individuals and teams to accomplish the tasks required to accomplish organizational goals. Influencing Leading, motivating and directing an organizations members toward accomplishing organizational goals. Increase productivity of members in the accomplishment of organizational goals and to be responsive to changing needs of the organization. Control Establishing and tracking organizational performance standards. Gather and analyze appropriate performance metrics and compare against established standards. Make organizational changes needed to meet established standards. Mala Sarat Chandra 41Common Mistakes of Management Planning Not establishing goals and objectives for all important organizational areas. Making plans that are too risky. Not exploring enough viable alternatives for reaching goals and objectives. Organizing Not establishing the appropriate organization structure span of control, inter- departmental coordination, geographic balance. Influencing Not establishing lines of communications, communicating infrequently, managing rather than leading. Controlling Not tracking progress against goals, not establishing performance standards, tracking performance metrics, analyzing trends or using insights to drive improvements. Mala Sarat Chandra 42Management and Organizational Resources Organizational Resources People Money Raw Materials Capital Resources Production Process Finished Products Goods Services Inputs Outputs Mala Sarat Chandra 43Goal Achievement: Managerial Efficiency versus Effectiveness Goals not reached. Resources not wasted. Goals reached. Resources not wasted. Goals not reached. Resources wasted. Goals reached. Resources wasted. 9/14/2013 Mala Sarat Chandra 44 Ineffective Effective InefficientEfficientThe Management Framework Planning Vision and Mission Strategy Goals and Objectives Organizing Organization Design Culture Social Networks Leading Leadership Decision Making Communications Groups and Teams Motivation Controlling Systems and Processes Human Resources Mala Sarat Chandra 459/13/2013The Future of Management http://www.youtube.com/watch?v=K3-_IY66tpI Mala Sarat Chandra 46

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The acquisition of managerial competence, and effectiveness in the following key areasproblem solving,

administration,

human resource management,organizational leadership.

getting things done with the aid of people and other resourcesthe art, or science, of achieving goals through peoplelooking overthe process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims (Koontz and Weihrich 1990, p. 4)

The Classical theory of management Neo-Classical TheoryModern Management TheoriesScientific Management Human Relations System Approach Bureaucratic Management Behavioral Science Approach Quantitative Approach Administrative Management Contingency ApproachOperational Approach

2. 3.The Welcome to PresentationThe Evolution of Management TheoriesGroup-02Presenter, ASIF IQBAL ID-120The driving force behind the evolution ofThe driving force behind the evolution of management theory is the search formanagement theory is the search for better ways to utilize organizationalbetter ways to utilize organizational resources.resources.1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Scientific Management Theory Behavioral Management Theory Management Science Theory Organizational Environment Theory The Evolution of Management TheoryEvolution of modernEvolution of modern management began in themanagement began in the late nineteenth century,late nineteenth century, after the industrialafter the industrial revolution.revolution. Mechanization changed systemsMechanization changed systems like crafts production into largelike crafts production into large scale manufacturing.scale manufacturing.Next Presenter, ANUP ROY ID-1501.1.The Classical theoryThe Classical theory of Managementof ManagementDEFINITION OF CLASSICALAPPROACH Classical approach is the oldest formal school of thought which began around 1900 and continued into the 1920s. Its mainly concerned with the increasing the efficiency of workers and organizations based on management practices, which were an outcome of careful observation. Classical approach mainly looks for the universal principles of operation in the striving for economic efficiency. Classical approach includes scientific, administrative & bureaucratic management.one best way to do a job. SCIENTIFIC MANAGEMENT focuses on theMAJOR CONTRIBUTORS FREDERICK WINSLOW TAYLOR (1856-1915) FRANK GILBERTH (1868-1924) & LILLIAN GILBERTH(1878-19720)Scientific Management F.W. Taylors Contribution (1856-1915) Frederick Taylor, known as the father of Scientific Management, Published Principals of Scientific Management , in which he proposed work methods designed to increase worker productivity. Scientific Management focuses on worker and machine relationships. Organizational productivity can be increased by increasing the efficiency of production processes.The Main Things Taylor Noticed for InefficiencyPrinciples of Scientific ManagementBasic Idea of Scientific ManagementGeneral approach Selected workers with appropriate abilities for each job Trained workers in standard method. Supported workers by planning their work and eliminating interruptions. Provided wage incentives to workers for increased output.CriticismContributions of Gilbreths : Scientific study of management should include both analysis and synthesis Analysis-Breaking down a task into its essential elements Synthesisinclude necessary element for efficient work and eliminate other elements. He concentrated on Motion Study and suggested the first definition-motion study as the science of eliminating wastefulness resulting from unnecessary, ill directed and inefficient motions He developed Process Chart-Over all picture of all activities in a chart form.Contributions of Henry L. Gantt : Worked with F.W. Taylor.Worked with F.W. Taylor. He Improved TaylorsHe Improved Taylors differential piece rate system Task and Bonus Plandifferential piece rate system Task and Bonus Plan (Provide extra wages for extra work).(Provide extra wages for extra work). He developed the daily balance chart (Gantt chart) output in one axis and timeHe developed the daily balance chart (Gantt chart) output in one axis and time on the other axis.on the other axis. Humanistic approach and industrial responsibility.Humanistic approach and industrial responsibility.Next Presenter, Prosenjit Tarafdar ID-151BUREAUCRATIC MANAGEMENT Max Weber (1864-1920).Max Weber (1864-1920). Rules and regulations to eliminate managerialRules and regulations to eliminate managerial inconsistencies.inconsistencies. AuthorityAuthority is the power to hold people accountable foris the power to hold people accountable for their actions.their actions. Positions in the firm should be held based onPositions in the firm should be held based on performanceperformance not social contacts.not social contacts. Position duties are clearly identified.Position duties are clearly identified. People shouldPeople should know what is expected of them.know what is expected of them. Lines of authorityLines of authority should be clearly identified.should be clearly identified. Workers know who reports to who.Workers know who reports to who.Bureaucratic Principles A BureaucracyA Bureaucracy should haveshould have Written RulesWritten RulesWritten RulesWritten Rules System of taskSystem of task relationshipsrelationships Hierarchy ofHierarchy of authorityauthority Fair evaluationFair evaluation and rewardand rewardBureaucratic CharacteristicsBureaucratic Characteristics 1) Division of work1) Division of work 2) Hierarchy of position2) Hierarchy of position 3) Rules and regulations3) Rules and regulations 4) Impersonal conduct4) Impersonal conduct 5) Staffing5) Staffing 6) Technical competence6) Technical competence 7) Official records7) Official recordsADMINISTRATIVE MANAGEMENTADMINISTRATIVE MANAGEMENT Henri Fayol (1841-1925) Father of modern managementHenri Fayol (1841-1925) Father of modern management Introduced pyramidal form of organization.Introduced pyramidal form of organization. Management consist 6 types of activities : 1) Technical Activities (Production, Manufacturing)1) Technical Activities (Production, Manufacturing) 2) Commercial Activities (Purchasing, Selling and Exchange)2) Commercial Activities (Purchasing, Selling and Exchange) 3) Financial Activities (Optimum use of capital)3) Financial Activities (Optimum use of capital) 4) Security (Protection of property and persons)4) Security (Protection of property and persons) 5) Accounting (Stock taking, Balance sheet, costing, statistics)5) Accounting (Stock taking, Balance sheet, costing, statistics) 6) Managerial (Planning, organizing, coordinating and controlling)6) Managerial (Planning, organizing, coordinating and controlling)HENRI FAYOLSHENRI FAYOLS 1414 PRINCIPLESPRINCIPLES 1) Division of work (or Labor)1) Division of work (or Labor) 2) Authority & Responsibility2) Authority & Responsibility 3) Discipline3) Discipline 4) Unity of command4) Unity of command 5) Unity of direction5) Unity of direction 6) Subordination of individual to general interest6) Subordination of individual to general interest 7) Remuneration7) Remuneration 8) Centralization of authority8) Centralization of authority 9) Scalar chain or Line of authority9) Scalar chain or Line of authority 10) Order10) Order 11) Equity of treatment11) Equity of treatment 12) Stability of workers12) Stability of workers 13) Initiative13) Initiative 14) Team spirit (Espirit de crops)14) Team spirit (Espirit de crops)Next Presenter, Shahinur AktarShahinur Aktar ID-175NEO-CLASSICALNEO-CLASSICAL THEORYTHEORY1. Human Relations1. Human Relations Human relations management emerged in the 1920s and dealtHuman relations management emerged in the 1920s and dealt with the human aspects of organizations.with the human aspects of organizations. It has been referred to as the neo-classical school because itIt has been referred to as the neo-classical school because it was initially a reaction to the shortcoming of the classicalwas initially a reaction to the shortcoming of the classical approaches to management.approaches to management. The human relations movement began with the HawthorneThe human relations movement began with the Hawthorne studies.studies.There are four major phases to the Hawthorne studies:There are four major phases to the Hawthorne studies: The illumination experiment: Tried to determine whether betterThe illumination experiment: Tried to determine whether better lighting would lead to increased productivity.lighting would lead to increased productivity. The real assembly group experimentsThe real assembly group experiments The interviewing program andThe interviewing program and The bank wiring group studies.The bank wiring group studies.2. Behavioral Science Approach2. Behavioral Science Approach The behavioral approach did not always increase productivity.The behavioral approach did not always increase productivity. Thus, motivates and leadership techniques became a topic ofThus, motivates and leadership techniques became a topic of great interest.great interest. The human resources school understands that employees areThe human resources school understands that employees are very creative and competent, and that much of their talent isvery creative and competent, and that much of their talent is largely untapped by their employers.largely untapped by their employers. Employee want meaningful work; they want to contribute; theyEmployee want meaningful work; they want to contribute; they want to participate in decision making and leadershipwant to participate in decision making and leadership functions.functions. Main contributors- Maslow, F. Herz berg & D. Mc Gregor.Main contributors- Maslow, F. Herz berg & D. Mc Gregor.Nature of management principle:Nature of management principle: FlexibilityFlexibility Universal applicationUniversal application Principal are relative not absolutePrincipal are relative not absolute Based on situationBased on situation General statement.General statement.Next Presenter, Amzad Hossain ID-212The Modern ManagementThe Modern Management TheoriesTheories1. Quantitative Approach Main contributorsTaylor, Gilbreths,Main contributorsTaylor, Gilbreths, Gantt, Newman & Joel Dean.Gantt, Newman & Joel Dean. Management is concerned with problemManagement is concerned with problem solving and it must make use ofsolving and it must make use of mathematical tools and techniques for themathematical tools and techniques for the purpose.purpose. The different factors involved inThe different factors involved in management can be quantified andmanagement can be quantified and expressed in the form of equations.expressed in the form of equations. Management problems can be described inManagement problems can be described in mathematical models.mathematical models. Operation research, mathematical tools,Operation research, mathematical tools, simulation and model building are the basicsimulation and model building are the basic methodologies developed by this approach.methodologies developed by this approach.2. System Approach Main contributors Johnson, Church man,Main contributors Johnson, Church man, Kenneth, Boulding & Rosen ZweigKenneth, Boulding & Rosen Zweig Related to organization system is defined as AnRelated to organization system is defined as An established arrangement of components whichestablished arrangement of components which leads to accomplish of particular objectives as perleads to accomplish of particular objectives as per planplan All organizations are open system.All organizations are open system.Next Presenter, Riead Piyas ID-1463. Contingency Approach3. Contingency Approach Main contributorsJohn Woodward, Fiedler, Lorsch &Main contributorsJohn Woodward, Fiedler, Lorsch & Lawrence.Lawrence. The latest approach to management which interactThe latest approach to management which interact the various approaches to management is known asthe various approaches to management is known as the contingency approach.the contingency approach. The work of Joan Woodward in the 1950s marked theThe work of Joan Woodward in the 1950s marked the beginning of this approach in management.beginning of this approach in management. Contingency school states that management isContingency school states that management is situational & the study of management lies insituational & the study of management lies in identifying the important variables in theidentifying the important variables in the situation.situation. It recognizes that all the subsystem of theIt recognizes that all the subsystem of the environment are interconnected andenvironment are interconnected and interrelated.interrelated. By studying their interrelationship, theBy studying their interrelationship, the management can find solution to specificmanagement can find solution to specific situation.situation.4. Operational Approach Main contributors- Koontz, ODonnell andMain contributors- Koontz, ODonnell and Weihrich.Weihrich. It regards management as a universallyIt regards management as a universally applicable body of knowledge that can beapplicable body of knowledge that can be brought to bear at all levels of managing and inbrought to bear at all levels of managing and in all types of enterprise.all types of enterprise. It recognizes that the actual problems whichIt recognizes that the actual problems which managers face and the environment in whichmanagers face and the environment in which they operate may vary between differentthey operate may vary between different enterprises and levels.enterprises and levels.THANK YOU !

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Scientific Management Theory

Frederick Winslow TaylorFather of Scientific ManagementEngineer and manager expertProposed a set of technique to increase efficiency and productivity of each worker.

The entrepreneur, as a manager, controls the human and non-human resources in such a way that goals are attained. Many concepts, skills and approaches have been scrutinized relating to management. These developed into management theories proposed by individuals who tested them to explain the possible circumstances of economic growth.These theories are the following:1.Scientific Management Theory.Frederick Winslow Taylor (1856-1915), theFather of Scientific Management, assumed that labor is not the cause of mostproblems in business and it is only the management which can provide solutionsto the problems of the business.This theory involved the combination of labor and management to attain the common benefit, a classification based on how to increase production efficiency, lower costs, raise profits and increase workers' salaries through increased productivity. This employs the basic formula to scientific proposals in management through setting up knowledge, compatibility through group accomplishment, participation and progress of employees and achieving the highest production.2.Behavioral Management Theory.This theory as stated by Robert Owens, is thatmanagement must have concern on the worker's condition which affects thequality and quantity of his work.Mary Parker Follet is the psychologist who first applied psychology to business. She recommended the effort of teaching the social services principles to business settings.Douglas Mc Gregor recommended his very well known Theory X and Theory Y, illustrating the assessment of a manager on his employees, which deals with the belief that people do not like to work. They must be guided and forced to work towards the awareness of organizational objectives. This theory states that certain types of people avoid responsibilities and thus have little ambitions in life.In theory Y, it is based on the presumption that people take their prospect jobs as part of their lives.Consequently, their jobs motivate them to perform well in their trade to realize goals, particularly if rewards are given.3.Contingency Management TheoryThe contingency theories focus on the following:1. legal aspects2. cultural considerations3. emerging field of public administrationThis management theory attempts to explain the operation of the system by assessing the factors in a given situation. This theory solves the problem by analyzing, recording prevailing conditions, classifying applicable causes of action, recognizing the effect of each action and selecting the best results.4. SystemManagement TheoryThis theory deals with a system as a group in relation to the operation in achieving desired objectives and functions according to design. Every system is self-contained by an input, a process and an output. A company is an example of the system. The manager must take a look at the organization which helps establish and achieve the purposes and goals of the company. He or she also sees the external, which involves customers, general suppliers and the government. In short, the activity starts from receiving the raw materials up to the delivery of finished products to the customers.5. Social ManagementTheoryThis theory considers the system of management as a system of cultural interrelationship. It is also a social interaction dealing with other people, as well as, cultural relationships. The managers accommodate the small groups into a complete social system. In relation to this theory, it applies the management in behavioral science.For example, as part of a company's socialization program, the company sponsors an outing for the company staff. This get-together parties give opportunities for employees and company officials to mingle with one another. Through this interaction, the manager solves various limitations posed by the workers' social and cultural differences by comforting them to promote a closer and more open relationship.6. Quantitative Management TheoryThis theory expresses mathematical models and measurable data. This emphasizes the creation of models, which state specific assumptions, purposes and necessity. The quantitative explanations of the condition of assumptions, purposes and problems become the foundation for decision-making. The customers' attitudes, ideas, assessment and familiar use of certain goods or products can be mathematically calculated and quantified. There are some methods to certify the data by means of games, probability and sampling, simulation, and linear programming. In order words, this theory advocates the use of mathematical procedures to management problems

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TAYLORISM

Scientific management Theory also known as TaylorismManagement theory that analyzes the work flows to improve economic efficiency labor productivityImportant components of scientific management includes:AnalysisSynthesisLogicRationalityEmpiricismWork ethicsEfficiencyElimination of waste, and standardized best practice.

How to increase efficiencyStudy the way the job is performed.Codify the methods into new rules.Establish the best worker for the task.Establish a fair level of performance.Pay for higher performance.

He proposed that by optimizing and simplifying jobs, productivity would increase. He also advanced the idea that workers and manager needed to cooperate with one another.Taylor believed that all workers were motivated by money, so he promoted the idea of A FAIR DAYS PAY FOR A FAIR DAYS WORK.Was dominant in manufacturing industries in the 1880s and 1890s.Best known from 1910 to 1920, but in the 1920s, competing management theories and methods emerged, rendering scientific management largely obsolete by the 1930s. however, many of the themes of the scientific management are still seen in industrial engineering and management today.

TIME STUDIESSignificant part of Taylorism. Taylor was concerned with reducing process time and worked with factory managers on scientific time studies. At its most basic level, time studies involve breaking down each job into components parts, timing each element, and rearranging the parts into the most efficient method of working. By counting and calculating, Taylor sought to transform a management into a set of calculated and written techniques.

FOUR PRINCIPLES OF SCIENTIFIC MANAGEMENTReplace working by RULE OF THUMB or simple habit and common sense and instead use the scientific method to study work and determine the most efficient way to perform specific task.Rather than simply assign workers to just any job. MATCH workers to their jobs based on the capability and motivation and train them at maximum efficiency.Monitor workers performance and provide instruction and supervision to ensure that they are using the most efficient ways of working. Allocate the work between the managers and workers so that the managers spend their time planning and training allowing the workers to perform their tasks efficiently.

Administrative Management Theory: Fayols Principle

Henri FayolRecognized as the real father of modern management theoryHe believed that with scientific forecasting and proper methods of management, satisfactory results were inevitable.Management was not personal talent but skill.Fayol focused on improving management efficiency.

KEY POINTSFayol took a TOP DOWN approach to management by focusing on the managerial practices to increase efficiency in organizations. His writing provided guidance to managers on how to accomplish their managerial duties and the practices in which they should engage.The major difference between Fayol and Taylor is Fayolisms concern with the human and behavioral characteristics of employees and Fayols focus on training management instead of focusing on the individual worker efficiency. Fayol stressed the importance and the practice of forecasting and planning in order to train management and improve workplace productivity.

TERMSScalar chains- the line of authority form top management to the lowest ranks represent the scalar chain. Communications should follow this chain. Fayolism- focused on managerial practices that could minimize understanding and increase efficiency in organizations.Top-down perspective- focusing on the big picture first then moving to smaller items, Fayol focused in improving upper management first and move to improving the efficiency of workersFAYOLS 14 PRINCIPLES

One of the earliest theories of management to be created and remains one of the most comprehensive. Hes considered to be among the most influential contributors to the modern concept of management.Not absolute but flexible and can be applied in any setting.Division of work- the more people specialized, the more efficiently they can perform their work.Authority- managers need to be able to give orders so that they can get things done.Discipline- members in an organization need to respect the rules and agreement that govern the organization. Unity of command- each employee must receive his or her instructions about a particular operation from one person. If an employee was responsible to more than one superior, conflict in instructions and confusion of authority would result.Unity of direction- those operations within the organization that have the same objective should be directed by only one manager using one plan.

Subordination of individual interest to the common good- in any undertaking, the interests of the employees should not take precedence over the interests of the organization as a wholeRemuneration- compensation for work done should be fair to both employees and employers.Centralization or decentralization decreasing the role of the subordinates in decision making is centralization; increasing their role is decentralization. Managers, although retaining final responsibility need to give their subordinates enough authority to do their jobs properly. The hierarchy- the line of authority in an organization, often represented today by the neat boxes and lines of the organizational chart, runs in order of rank from top management to the lowest level of the enterprise.Order- materials and people should be in the right place and right time. People in particular should be in jobs or positions most suited for them. Equity- managers should be both friendly and fair to their subordinates.Stability of staff- a high employee turnover rate is not good for the efficient functioning of an organization. Initiative- subordinates should be given the freedom to conceive and carry out their plans, even when some mistakes result.Team-spirit or spirit de corpd- promoring team spirit will give the organization a sense of unity. One way to achieve this spirit is to use verbal communications whenever possible instead of formal written communications.

HENRI FAYOL CLASSIFIED THE BUSINESS ACTIVITIES INTO:

TechnicalCommercialFinancialAccountingSecurityManagerial activities

Five Functions of ManagementPrevoyance Organizing CommandingCoordinatingControlling

CRITICISMManagement Oriented TheoryLack Of Importance To Informal OrganizationConcepts Borrowed Form Military ScienceMechanical Approach

Behavioral Management TheoryIt was developed in response to the need to account employee for behavior and motivation

THEORISTS:

Elton MayoAn Australian psychologist who joined the Harvard Business School faculty in 1926Worked with Fritz Roethlisberger, William Dickson, and others to formulate theories concerning the factors that increased human motivation and satisfaction which were later to become the foundations of the human relations movement in managementIn 1927, Mayo and his team were called in to assist in the interpretation of the results and to conduct further experiments as needed

Contribution of the Study:Workers were not so much driven by pay and working conditionGiving workers responsibility for decisions concerning the task, whether as individuals or in a group, was a stimulus to treat the task as more importantRecognition by superiors made workers feel than they were making a unique and important contribution to the organizationThe workplace is a social system. The Hawthorne researchers came to view the workplace as a social system made up of interdependent parts

Hawthorne studyOpened the study of management to a whole new arena of ideas from the social sciences that had previously been ignored

Mary Parker FolletA pragmatist who believed that conflict was neither good nor bad.Hypothesized that managers could resolve conflict in one of four ways:One side giving One side forcing the other to submitCompromiseIntegration

Douglas McGregorSelf- fulfilling prophesiesthrough behavior of workers the manager creates a situation where workers acts in ways that confirm the managers original expectation

Chris Argyrisargued that an overemphasis on control by managers encouraged workers to become passive and dependent and to shirk responsibility that will result to frustration and dissatisfaction in the workplaceAbraham Maslowmost noted for suggesting a theory that humans are motivated by needs that exist in a hierarchy

3 Assumptions of Human Needs TheoryHumans are never completely satisfiedHuman behavior is purposeful and is motivated by the need for satisfactionNeeds can be classified according to a hierarchical structure of importance, from the lowest to the highest

Elements essentially ignored in classical managementSocial needs of individualGroup processesSubordinate-superior relationship

BEHAVIOR AND MOTIVATION

Behaviordefined as the way how a person conduct themselves towards othersFactors: Self-fulfillment, Autonomy an Empowerment, Social Status, Personal relationship with co-workersMotivationthe internal process that directs enduring behavior/inspiredFactors for being motivated: Position, Pay and Stability, Benefits, Incentives and Rewards, interesting working assignments, common beliefs and valuesFactors are met the results are the following:Positive feedbackGood communicationGood working conditionInvolvement in decision-makingCommon goal settingGood leader-worker relationshipContributions of the behavioral viewpoint:Emphasize managerial importance of such factors as communication, group dynamics, motivation and leadersHighlights the importance of an organizations member as active human resources rather than passive tools

System theory System it is a collection of interrelated parts acting together to achieve some goal which exists in the environmentset of object working together with relationship between the objects and their attributes related to each other and to the environmenttherefore, system is simple terms in respect to management, it is a set of different independent parts working together in interrelated manner to accomplish a set of objectives

1950- General System Theory (founded by Ludwig von Bertalanffy)Focuses on the relations between the parts rather than reducing an entity such as the human body into its parts or elements (e.g. organs or cells), systems theory focuses on the arrangement of and relations between the parts how they work together as a whole.This often referred to as a holistic approach to understanding phenomena

Elements of System approachAn organization is a unified and purposeful system consisting of several interconnected, interacting and independent partsThe parts of the system are called SUB-SYSTEM. Each sub-system influences the other sub-systems and the system as a wholeThe position and function of each sub-system can be analyzed and understood only in relation to other sub-system and to organization as a whole.Each sub-system derives its strength by its association and interaction with other sub-system. As a result, the collective contribution of the organization is greater than the aggregate of the individual contributions of its sub-system. This is known as SYNERGY.Each system has a BOUNDARY that separates it from its environment. The boundary determines which parts are internal to the organization and which are external.The reaction or response of the environment to the output is known as feedback. FEEDBACK is useful in evaluating and improving the function of the system.Organization operates on the principle that they have several alternative ways of doing the same thing or achieving the same goal.

BASIC INPUT-OUTPUT MODEL (INPUT-THROUGHPUT-OUTPUT MODEL)

Organization as a system:

Receives input, transforms it through Process for Output and operates in an environment** The task of the manager is to transform these inputs to outputs through the major functions of management which entail planning, organizing, staffing, directing, and controlling.CLASSIFICATION OF SYSTEMSOpen system-- an open system actively interacts with its environment and by interacting with other system, it tries to establish exchange relationshipClosed Systemself-contained andisolated fromthe environmentA non-adaptive system Does not receive inputs often from the systems and does not trade with the outside world

ADVANTAGESIt aims at meaningful analysis of organization and their managementIt facilitated the interaction between organization and its environmentIt guides managers to avoid analyzing problems in isolation and to develop an integrated approachDISADVANTAGESOver-conceptualThe approach does not recognize the differences in systemsSystems philosophy does not specify the nature of interactions and inter-dependenciesUnpractical: it cannot be easily and directly applied to practical problems

MBO

MANAGEMENT BY OBJECTIVES

PERFORMANCE APPRAISALManagement by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization.The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management.Objectives can be set in all domains of activities (production, services, sales, R&D, human resources, finance, information systems etc.).Some objectives are collective, for a whole department or the whole company, others can be individualized.

MBOSTEPS FOR MBOAppraise PerformanceCorporate Strategic goalsDepartmental goalsIndividual goalsSTEP 1: SET GOALSSTEP 4: APPRAISE OVERALL PERFORMANCEAction Plans

Review Progress & Take Corrective ActionSTEP 2: DEVELOP PLANSSTEP 3: REVIEW PROGRESS42Set goals not day to day but rather goals that answer at least a portion of the where are we going question and then are linked with other goals

Plans Steps required

Review make sure plan is working; Is corrective action necessary either in the plan or the execution?

CAUTION: Dont get locked into PREDETERMINED behavior or sacrifice QUALITY to MEET goalCascading of organizational goals and objectives Specific objectives for each team memberParticipative decision making Explicit time period Performance evaluation & feedback

Principle of MBOIn an MBO, good goals are SMART goals:

S S specific U M measurable C WORK A achievable HAVE E R result oriented S T time-related S

OBJECTIVE SETTING

All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives. Rewards are given to individuals on the basis of how close they come to reaching their goals.MBO Strategy : Three Basic PartsImproves employee motivationImproves communication in the organisationFlags up and highlights training needs required to achieve objectivesImproves overall performance and efficiencyAttainment of goals can lead to the satisfaction of Maslows higher order needs

ADVANTAGES OF MBOMay demotivate staff if targets are too high and unrealistic, also if imposed rather than agreedRequires the cooperation of all employees to succeedCan be bureaucratic and time consuming (meetings, feedback)Can encourage short-term rather a more focused long-term growthObjectives may go out of date and can restrict staff initiative and creativitySetting targets for certain specialised employees may be difficult

DISADVANTAGES OF MBOLack of top management commitment and follow through on MBO.

Employees negative beliefs about managements sincerity in its efforts to include them in the decision-making process.

SOURCES OF MBO FAILURESTHANK YOU