Historical Foundations of Management

It gives executives a way of thinking, a way of searching for patterns and understanding trends. It provides a context or environment in which to interpret current problems.

Forces: Social, political, economic

Why is history Important?

Management and Organization• Social Forces:– The aspect of culture that guide and influence relationship

among people – their values, needs and standard of behaviors ( Sindhi Values, American Culture, African Culture)

• Political Forces:– The influence of political and legal institution on

organization and people ( Courts, Company Reg.Act 1973, Labor Law)

• Economic Forces:– Allocation of Resources, Employment, Inflation etc

Historical Background Of Management

• Organizations Have Existed for Thousands of Years– testifies to the existence of early management practice

• ability to create the Pyramids, Great Wall of China

• Significant Pre-Twentieth-Century Events– Wealth of Nations - Adam Smith

• division of labor - breakdown of jobs into narrow and repetitive tasks increased productivity

– Industrial Revolution • substitution of machine power for human power• large organizations required formal management

Development Of Major Management Theories

HistoricalBackground Scientific

ManagementGeneralAdministrativeTheorists

QuantitativeApproach

Management Theories

IndustrialRevolution

Adam Smith

Early Advocates

Hawthorne Studies

OrganizationalBehavior

Early Examplesof Management

Management Approaches

• Classical• Humanistic• Management Science• Recent Trends– Systems Theory– Contingency View– Total Quality Management

First Perspective:

CLASSICAL

Classical Perspective

• Emerged during the 19th and 20th centuries• Factory systems appearing in 1800’s• Problems:– Tooling the plants– Organizing managerial structure– Training employees (many immigrants)– Scheduling complex manufacturing operations– Increased labor dissatisfaction; strikes

Classical Approaches

• Scientific Management– Frederick Winslow Taylor (1856-1915) – Henry Gantt– Frank B. and Lillian M. Gilbreth

• Bureaucratic Organizations– Max Weber (1864-1920)

• Administrative Principles– Henri Fayol (1841-1925)– Mary Parker Follett (1868 – 1933)– Chester I. Barnard (1886-1961)

Scientific Management

Classical Perspective

Frederick Taylor, Engineer Father of Scientific Management

• Problem in labor productivity lies with poor

management practices, not labor.

• Manner of change can be determined only by scientific

study.

• Replace rules of thumb and tradition with precise

procedures developed after careful study.

• Work with Bethlehem Steel plant in 1898

Henry Gantt

• Gantt Chart – a bar graph that measures planned and

completed work along each stage of production by

time elapsed.

Frank B. Gilbreth(1868 – 1924)

• Pioneered time and motion study

• Stressed efficiency; “one best way” to do work.

• Early work with bricklayers

• Greatest impact on medical surgery by drastically

reducing the time patients spent on the operating

table.

Lillian M. Gilbreth1878-1972

• Widowed in 1924 with 12 children, ages 2 – 19.

• “First Lady of Management”

• Pioneered in the field of industrial psychology and

made substantial contributions to human resource

management.

Bureaucratic Organizations

Classical Perspective

Max Weber, German Theorist

• Envisioned organizations managed on an impersonal, rational basis.

• An organization based on rational authority would be more

efficient and adaptable to change.

• Employee selection and advancement based on competence.

• Rely on rules and written records for continuity.

• Manager relies on legal power of his/her position instead of

personality.

EXHIBIT 2.4: WEBER’S IDEAL BUREAUCRACY

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Administrative Principles

Classical Perspective

Henri Fayol, French Engineer

• General and Industrial Management

• Proposed 14 general principles of management

– Unity of command (one supervisor)

– Division of work (specialization)

– Unity of direction (group similar activities)

– Scalar chain (chain of authority)

Mary Parker Follett

• Trained in philosophy and political science

• Stressed the importance of people rather than engineering

techniques

• “Don’t Hug Your Blueprints”

• Analyzed dynamics of management-organization interactions

• Addressed ethics, power and leadership

• Proposed concept of empowerment

Chester I. Barnard

• Studied Economics at Harvard; no degree

• President of New Jersey Bell in 1927

• Proposed the concept of the informal organization

• Includes cliques and naturally occurring social groupings

• Acceptance theory of authority – people have free will and

can choose whether to follow management orders.

Second Perspective:

Humanistic

Humanistic Perspective

• Human Relations Movement– Hawthorne Studies (1927-1932), Western Electric

Hawthorne Works in Chicago– CIL, Thomas Edison, Honorary Chair, 1924-1927– Elton Mayo, Harvard Business School examined

productivity and work conditions• Human Resources Perspective– Abraham Maslow (1908-1970)– Douglas McGregor (1906-1964)

• Behavioral Sciences Approach

The Hawthorne Effect

• The rewards you reap when you pay attention to

people. The mere act of showing people that you’re

concerned about them usually spurs them to better

job performance.

• When people spend a large portion of their time at

work, they must have a sense of belonging, of being

part of a team.

Hawthorne Studies

• 1895 – struggle develops between manufacturers of gas and

electric lighting fixtures for control of the residential and

industrial market.

• More light results in more productivity, they say

• 6 year Study Result: Money was not the cause of the

increased output. Employees’ output increased sharply when

managers treated them in a positive manner.

The Human Relations Movement

Humanistic PerspectiveThe human relations school of thought considers that

truly effective control comes from within the individual workers rather than from strict, authoritarian control.

The Human Resources Perspective

Humanistic Perspective

Abraham Maslow, Psychologist

• Observed that patients’ problems stemmed from inability to satisfy

their needs.

• Proposed a hierarchy of needs

– Physiological needs

– Safety

– Belongingness

– Esteem

– Self-actualization

• Basis for motivational techniques

Douglas McGregor, College President

• Challenged assumptions about human behavior based

on his experiences as a manager, consultant, his training

as a psychologist, and Maslow’s work.

• Theory X and Theory Y

• Workers are best described by Theory Y

• Take advantage of the imagination and intellect of all

employees.

Behavioral Sciences Approach

Humanistic Perspective

Behavioral Sciences Approach

• It is based on scientific methods and study.

• Draws from sociology, psychology, anthropology,

economics and other disciplines to understand

employee behavior and interaction in an organizational

setting.

• Impacts motivation, communication, leadership and

human resource management.

Third Perspective:

Management Science

Management Science Perspective

• World War II created sophisticated tools for modern global

warfare.

• Applies mathematics, statistics and other quantitative techniques

to management decision-making and problem-solving.

• Operations Research

• Operations Management

• Management Information Systems

Fourth Perspective: Emerging Trends

Systems TheoryContingency View

Total Quality Management (Deming)

Systems Theory

• A set of interrelated parts that function as a whole to achieve a common purpose.– Inputs– Transformation process– Outputs– Feedback– Environment

System Theory : Current Theories

• System: A set of related parts that work together in order to achieve a common objective

• Open System: A system that interact with external environment

• Close System: A system that does not interact with environment.

• Entropy: A tendency of system to run down or die

• Synergy: In organization every department depends upon each other

• Subsystems: Parts of system that depend upon each other.

Contingency View

• Universalist View (classical perspective) – management

concepts are universal

• Case View – Each situation is unique.

• Contingency View – A manager’s response depends on

identifying key variables in an organizational situation. What

works in one setting may not work in another. Contingencies

include the environment, industry, technology and

international cultures.

Total Quality Management

• Shift from inspection approach to quality control emphasizing

employee involvement in the prevention of quality problems.

• Managing the total organization to deliver quality to customers.

• Significant Elements of TQM

– Employee involvement

– Focus on the customer

– Benchmarking

– Continuous improvement

Dr. W. Edwards Deming (1900-1993)

“Father of Quality Movement”

• Developed theory and methods to improve the

quality an dependability of manufactured products.

• Application of his work in Japan sparked the

Japanese Industrial Miracle-the transformation of

Japanese business

EXHIBIT 2.9: LEARNING ORGANIZATION VERSUS TRADITIONAL ORGANIZATION

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Current Trends And Issues • Learning Organizations and Knowledge Management

– Learning Organization - one that has developed the capacity to continuously learn, adapt, and change

– create learning capabilities throughout the organization• understanding that knowledge is an important resource

– Knowledge Management - involves cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance

– managers must transform themselves from bosses to team leaders• learn to listen, motivate, coach, and nurture

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