Evolution of Evolution of Management ThoughtManagement Thought

OrganizationOrganization

A structured social system consisting A structured social system consisting of groups of individuals working of groups of individuals working together to meet some agreed-on together to meet some agreed-on objectivesobjectives

Early PracticesEarly PracticesAdam SmithAdam Smith

Scottish philosopher

Wrote ‘Causes of Wealth of Nations’

Proposed ‘Division of Labour’

Job specializationJob specializationJob specializationJob specialization Adam Smith, 18th century economist, found firms Adam Smith, 18th century economist, found firms

manufactured pins in two ways:manufactured pins in two ways: Craft Craft -- each worker did all steps. -- each worker did all steps. Factory Factory -- each worker specialized in one step.-- each worker specialized in one step.

Smith found that the factory method had much Smith found that the factory method had much higher productivity.higher productivity. Each worker became very skilled at one, specific Each worker became very skilled at one, specific

task.task. Breaking down the total job allowed for the division Breaking down the total job allowed for the division

of labor.of labor.

Charles BabbageCharles Babbage

British Mathematics professor

Wrote ‘On the Economy of Machinery and Manufactures’

Proposed advantages of division of labour:

•Reduces the time needed for learning a job

•Reduces waste of material

•Attainment of high skill levels

•Matching skills and abilities with jobs

Robert OwenRobert Owen

Welsh entrepreneur

Recognised how factory work was demeaning to employees

The Classical EraThe Classical Era

Scientific Management- Scientific Management- Frederick Frederick TaylorTaylor

Develop a science for each element of an Develop a science for each element of an individual’s workindividual’s work

Scientifically select, train, teach and Scientifically select, train, teach and develop workerdevelop worker

Cooperation with workersCooperation with workers Divide work responsibility equally between Divide work responsibility equally between

management and workersmanagement and workers

GilbrethsGilbreths

Frank and Lillian Gilbreth refined Taylor’s Frank and Lillian Gilbreth refined Taylor’s methods.methods.Made many improvements to time and Made many improvements to time and

motion studies.motion studies. Time and motion studies:Time and motion studies:

1. 1. Break down each actionBreak down each action into components.into components.2. 2. Find better waysFind better ways to perform it.to perform it.3. 3. Reorganize each actionReorganize each action to be more to be more

efficient.efficient. Gilbreths also studied fatigue problems, Gilbreths also studied fatigue problems,

lighting, heating and other worker issues.lighting, heating and other worker issues.

Hawthorne studiesHawthorne studies

- Study conducted in Hawthorne plant of - Study conducted in Hawthorne plant of General Electric Company, ChicagoGeneral Electric Company, Chicago

- - Mayo, Roethlisberger, Dickson, Mayo, Roethlisberger, Dickson, WhiteheadWhitehead

Illumination experiment (1924-27)Illumination experiment (1924-27)Relay room experiment (1927-28)Relay room experiment (1927-28)Mass interviewing (1928-30)Mass interviewing (1928-30)Bank wiring observation (1931-32)Bank wiring observation (1931-32)

Implications of Hawthorne Implications of Hawthorne ExperimentExperiment

Social factors in outputSocial factors in outputGroup InfluenceGroup InfluenceConflictsConflictsLeadershipLeadershipSupervisionSupervisionCommunicationCommunication

Classical Organization TheoryClassical Organization Theory

Administrative TheoryAdministrative TheoryFrench industrialist Henry FayolFrench industrialist Henry FayolProposed that a manager plans, Proposed that a manager plans,

organizes, directs, controls and organizes, directs, controls and coordinatescoordinates

14 principles of management 14 principles of management including division of labor, authority, including division of labor, authority, scalar chain, unity of command, scalar chain, unity of command, initiativeinitiative

Fayol’s 14 principlesFayol’s 14 principles

1.1. Division of workDivision of work

2.2. AuthorityAuthority

3.3. DisciplineDiscipline

4.4. Unity of commandUnity of command

5.5. Unity of directionUnity of direction

6.6. Subordination of individual interest to the Subordination of individual interest to the general interestgeneral interest

7.7. RemunerationRemuneration

Fayol’s 14 principlesFayol’s 14 principles

8.8. CentralizationCentralization

9.9. Scalar chainScalar chain

10.10. OrderOrder

11.11. EquityEquity

12.12. Stability and tenureStability and tenure

13.13. InitiativeInitiative

14.14. Esprit de corpsEsprit de corps

Max WeberMax WeberProposed Structural Proposed Structural TheoryTheory

Described Described bureaucratic bureaucratic structurestructure

• Division of laborDivision of labor

• clearly defined clearly defined hierarchy,hierarchy,

• detailed rules and detailed rules and regulations andregulations and

• impersonal impersonal relationshipsrelationships

Formal rules regulationsFormal rules regulationsDivision of laborDivision of laborHierarchical structureHierarchical structureAuthority structureAuthority structureLifelong commitmentLifelong commitment

Social Man TheorySocial Man Theory

Mary Parker Follett

Emphasised on group ethics

Manager must coordinate group efforts

Chester BarnardChester Barnard

Social Systems Theory

Organisations made up of people who have interacting social relationship

They communicate

Success depends on maintaining good relations

Herbert Simon

Described organisations as a complex network of decisional process

Decision process comprises: i) intelligent activity ii) design activity iii) choice activity

Bounded rationality Administrative man : simplification,

satisficing approach Orgaisational Communication

Peter Drucker

Nature of management as innovative and creative

Manager has to act as administrator, entrepreneur, set objectives etc.

Organisation structure to facilitate effective functioning

MBO

Functional ManagementFunctional Management

Structuring of an organization into Structuring of an organization into departments or units on the basis of type departments or units on the basis of type of work performedof work performed

A A functional managerfunctional manager is a person who is a person who has management authority over an has management authority over an organizational unit - such as a organizational unit - such as a department - within a business or department - within a business or companycompany

Management StylesManagement Styles

AuthoritativeAuthoritativeParticipativeParticipativeFree-reinFree-reinPseudo autocraticPseudo autocratic

New forms of organizationNew forms of organization

Leaner organizationsLeaner organizationsOutsourcingOutsourcingContingent workforceContingent workforce

Virtual corporationsVirtual corporations

Highly flexible, temporary Highly flexible, temporary organizations formed by a group of organizations formed by a group of companies to exploit a specific companies to exploit a specific opportunityopportunity

Socio-technical approachSocio-technical approachManagement scienceManagement scienceHuman relations approachHuman relations approachSystems approachSystems approachContingency approachContingency approach

Systems approachSystems approach

Considers relationships inside and Considers relationships inside and outside the organization.outside the organization. The environment consists of forces, The environment consists of forces,

conditions, and influences outside the conditions, and influences outside the organization.organization.

Systems theory considers the impact of Systems theory considers the impact of stages:stages:Input:Input: acquire external resources.acquire external resources.Conversion:Conversion: inputs are processed into inputs are processed into

goods and services.goods and services.Output:Output: finished goods are released into the finished goods are released into the

environment.environment.

Systems approachSystems approach

An open system interacts with An open system interacts with the environment. A closed the environment. A closed system is self-contained.system is self-contained.

Management ScienceManagement Science

Uses rigorous quantitative techniques to Uses rigorous quantitative techniques to maximize resources.maximize resources.Quantitative management:Quantitative management: utilizes linear utilizes linear

programming, modeling, simulation systems.programming, modeling, simulation systems.Operations management:Operations management: techniques to techniques to

analyze all aspects of the production system.analyze all aspects of the production system.Total Quality Management (TQM):Total Quality Management (TQM): focuses on focuses on

improved quality.improved quality.Management Information Systems (MIS):Management Information Systems (MIS):

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

Contingency TheoryContingency Theory

Assumes there is no one best way to Assumes there is no one best way to managemanage

The environment impacts the organization and The environment impacts the organization and managers must be flexible to react to managers must be flexible to react to environmental changes.environmental changes.

The way the organization is designed, control The way the organization is designed, control systems selected, depend on the environment.systems selected, depend on the environment.

Technological environments change rapidly, Technological environments change rapidly, so must managers.so must managers.