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Evolution of Management
Thought
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Why History?
◦ An awareness and understanding of important
historical developments in management are also
important to contemporary managers in furtheringthe development of management practices and in
avoiding the mistakes of others in the past.
The Importance of Theory and History
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• Management Through the Ages
The Historical Context of Management
3000 B.C. 2500 B.C.
A Sumerians F Chinese
B Egyptians
C Babylonians
D Greeks
G Venetians
E Romans
2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D. 1500A.D.500 A.D. 1000
A Used written rules and regulations for governance
B Used management practices to construct pyramids
C Used extensive set of laws and policies for governance
D Used different governing systems for cities and state
E Used organized structure for communication and control
F Used extensive organization structure for governmentagencies and the arts
G Used organization design and planning concepts to
control the seas
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Time Line of Management Thought
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Classical Management Theory
Classical
Management
Theory
A theory that focused on finding the
“one best way” to perform and
manage tasks
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Classical Management Theory
Classical
Scientific
School
Focused on the manufacturing
environment
Classical
Administrative
School
Emphasized the flow of information
and how organizations should
operate
Classical
Bureaucratic
School
Emphasized on rules, systems and
procedures
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Classical Scientific School
Scientific Management
Frederick W. Taylor
The father of Scientific Management
– the 1st Efficiency Expert.
A philosophy and set of management
practices that are based on fact andobservation, not on guesswork
Cl i l S i ifi S h l
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Classical Scientific School
▼ Techniques
• Scientific task planning- Min. time reqd. to do
a job
• Time and Motion studies- Time, Motion and
Fatigue• Standardisation- Set standards for the task,
materials, work methods, quality, time and
cost.
• Differential piece wage plan
• Functional foremanships- Plan the work for
employees and help for results
Frederick W. Taylor
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▼ Key Principles:1. Science not rule of thumb- What, how, when, where and by whom
(replacement of odd rule of thumb by the use of method of enquiry,
investigation, data collection, analysis and framing of rules)
2. Harmony not discord3. Co-operation not individualism
4. Maximum output in place of restricted output
5. Development of each man to his greatest efficiency and prosperity
6. Equitable division of work and responsibility between
management and labour.
Frederick W. Taylor
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Frank and Lillian Gilbreth refined Taylor’s methods and suggested Conservation and
Saving
– 1. Breaking down each action into individual
components. – 2. Find better ways to perform the action.
– 3. Reorganize each action to be more efficient.
– 4. Protecting workers from unsafe working conditions.
Classical Scientific School
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Henry L. GanttHow to increase worker’s efficiency?
“The essential difference between the best systemof today and those of the past are the manner inwhich the tasks are scheduled, and the manner
in which their performance is rewarded”
Scheduling InnovationGantt Chart – scheduling summary of work
Rewarding Innovation Bonus in addition to the piece rate if they exceeded theirdaily production quota
On time = Bonus, Good Performance = Reward
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Problems associated with ScientificManagement – Managers often gave attention only to increasing
output – They did not allow workers to share in the benefits of
increased output.
– Specialized jobs became very boring & dull.
– Workers ended up distrusting Scientific Management.
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Classical Administrative School
▼ Believed specific management skills could be
learned and taught
▼Fayol’s universal management functions:
– Planning
– Organizing
– Leading
–Controlling
Henri Fayol
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Principles of Management
Henri Fayol (1841-1925)Management principles are statements of fundamental truth. These principles serve as guidelines for
decisions and actions of managers.
His 14 principles are:
1. Division of Work –Specialize in specific tasks
2. Authority and responsibility – Right to give orders and toexpect obedience
3. Discipline –
Obey & respect rules.4. Unity of command – Orders from only one superior
5. Unity of direction – One manager one plan
6. Subordination of individual interests to the commoninterest – Workers need to understand how their behavior
affects the performance of the organization7. Remuneration of personnel – an equitable system of
rewarding employees
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8. Order – arranging jobs to permit efficiency
9. Centralization – The concentration of authority at the topand decreasing the role of sub. In DM.
10. Scalar Chain – Chain of authority from top to bottomthrough all communications flow.
11. Equity – Fair in treatment.
12. Initiative –
allowing workers to be creative and innovativein their work
13. Stability of tenure of personnel – the need to keepemployees for a long time to take advantage of their skillsand knowledge
14. Esprit de corps –
Union is Strength
Cl i l B ti S h l
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• Hierarchy –
Way of ranking positions in descendingorder
• Division of Work- Dividing total work in to specialisedtask
• Rules, Regulations and Procedures• Records
• Impersonal Relationships- Employees are evaluatedaccording to rules and objective data
• No room for personal emotions• Rationality—the use of the most efficient means
available to accomplish a goal
Classical Bureaucratic School
Max Weber (1864-1920): Principles of Bureaucracy
The Theory of Bureaucracy: Max Weber – a formal system of organization
designed to ensure efficiency and effectiveness.
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Potential Benefits of Bureaucracy
Efficiency
Consistency Functions best when routine tasks are performed
Performance based on objective criteria
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Behavioral Management Theory
Behavioral
School/Neo-Classical
Recognized employees as individuals
with concrete, human needs, as parts
of work groups, and as members of a
larger society and emphasized on
psychology, human sentiments andsocial values
1.Human relation/Hawthorne
studies
2.Behavioral approach
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Human RelationsTheory
Hawthorne Experiments-Elton Mayo and Others
The Hawthorne Studies
Studies of how characteristics of the work setting affected workerfatigue and performance at the Hawthorne Works of the WesternElectric Company from 1924-1932.
–Observation of two groups of employees making telephone relays todetermine the levels of illumination
Working conditions and productivity – Worker productivity was measured at various levels of light illumination.
– Researchers found that regardless of whether the light levels were raisedor lowered, worker productivity increased.
–The Bank Wiring Observation Room Experiment
Analyzed the group influence and social relationships in a workgroup
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Employees are
motivated by social
needs and associationwith others
Employees’ performance
is more a result of peer
pressure thanmanagement’s incentives
and rules
Managers need to involve
subordinates in coordinating their
work to improve efficiency.Happy employees are productive
workers
Employees want to participate
in decisions that affect them.Special attention causes people
to increase their efforts(Known as
Hawthorne effect)
Lessons from the Hawthrone Studies
Behavioral Viewpoint
Managers need to involve
subordinates in coordinating their
work to improve efficiency.Happy employees are productive
workers
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2-21
Human RelationsTheoryTheory X and Theory Y: Douglas McGregor
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Quantitative Management Theory
The use of quantitative techniques to
maximize use of resources (OperationsManagement, Total Quality Management(TQM), and Management InformationSystems (MIS)
• Mathematical approaches to management
problems• Developed during World War II
• Mathematical models are used to simulatechanges
• Computers are essential• Applied to every aspect of business
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– Operations management —techniques used to
analyze all aspects of the production system
– Total Quality Management (TQM) —focuses on
analyzing input, conversion, and output activitiesto increase product quality
– Management Information Systems (MIS) —
It focuses on designing and implementing
computer based information systems
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Systems Management Theory
Systems
School
It tries to solve problems bydiagnosing them within a framework
of inputs, transformation processes,
outputs and feedback.
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The Organization as a System
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Contingency Management Theory
Contingency
School
It argues that appropriate managerialaction depends on the particular
parameters of the situation.
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Quality Management Theory
Quality
School
The essence of the quality of anyoutput is its ability to meet the needs
of the person or group