Management History

IPE 3231

Afia Ahsan
Lecturer
MPE, AUST
 Early Thinking about Management
➢An organization is more stable if members have the right to express their
differences and solve their conflicts within it.

➢While one person can begin an organization, "it is lasting when it is left in the
care of many and when many desire to maintain it.

➢A weak manager can follow a strong one, but not another weak one, and
maintain authority.

➢ A manager seeking to change an established organization “should

retain at least a shadow of the ancient customs.

 Management Theory

We will focus on four well-established schools of management thought:

✓The Scientific Management School

✓The Classical Organization Theory School

✓The Behavioral School

✓The Management Science School

 The Scientific Management School

Frederick W. Taylor (1856-1915) rested his philosophy on four basic

principles:

✓The development of a true science of management, so that the best

method for performing each task could be determined.

✓The scientific selection of workers, so that each worker would be given

responsibility for the task for which he or she was best suited.

✓The scientific education and development of the worker.

✓Intimate, friendly cooperation between management and labor.

 Frederick W. Taylor

➢The success of the principles required "a complete mental revolution" on the
part of management and labor;

➢Rather than quarrel over profits, both sides should try to increase production;

➢Based his management system on production-line time studies;

➢Encouraged employers to pay more productive workers at a higher rate than

others;
 Henry L. Gantt

➢Gantt began to reconsider Taylor’s incentive system.

➢Abandoning the differential rate system, he came up with a new idea.

➢Every worker who finished a day's assigned workload would win a 50-cent
bonus.

➢The supervisor would earn a bonus for each worker who reached the daily
standard, plus an extra bonus if all the workers reached it.

➢Gantt originated a charting system for production scheduling; the “Gantt

Chart”.
 The Gilbreths
➢Frank B. and Lillian M. Gilbreth made their contribution to the scientific
management movement as a husband-and-wife team.

➢Collaborated on fatigue and motion studies and focused on ways of promoting

the individual worker's welfare.

➢Motion and fatigue were intertwined-every motion that was eliminated reduced
fatigue

➢Using motion picture cameras, they tried to find the most economical motions
for each task in order to upgrade performance and reduce fatigue.

➢Argued that motion study would raise worker morale.

 Classical Organization Theory School
➢Henri Fayol (1841-1925) is generally hailed as the founder of the classical
management school

➢Fayol believed that sound management practice falls into certain patterns that
can be identified and analyzed

➢he drew up a blueprint for a cohesive doctrine of management one that retains
much of its force to this day

➢Before Fayol, it was generally believed that “managers are born, not made.”

➢He suggested the use of verbal communication instead of formal, written

communication whenever possible.
 Fayol’s 14 PrinciPles oF ManageMent
Division of Labor: The more people specialize, the more efficiently they can
perform their work.

Authority: Managers must give orders so that they can get things done while their
formal authority gives them the right to command, managers will not always
compel obedience unless they have personal authority (such as relevant
expertise) as well.

Discipline: Members in an organization need to respect the rules and agreements

that govern the organization.
 Fayol’s 14 PrinciPles oF ManageMent
Unity of Command: Each employee must receive instructions from only one
person.

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 employees should not take precedence over the interests of the
organization as a whole.

Remuneration: Compensation for work done should be fair to both employers and
employees.
 Fayol’s 14 PrinciPles oF ManageMent
Centralization: Decreasing the role of subordinates in decision-making is
centralization; increasing their role is decentralization. The problem is to find the
proper degree of centralization in each case.

The Hierarchy: The line of authority in an organization often represented today

by the neat boxes and lines of the organization 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 at the right time, people,
in particular, should be in the jobs or positions they are most suited to.
 Fayol’s 14 PrinciPles oF ManageMent
Equity: Managers should be both friendly and fair to their subordinates.

Stability of Staff: A high employee turnover rate undermines the efficient

functioning of an organization.

Initiative: Subordinates should be given the freedom to conceive and carry out
their plans, even though some mistakes may result.

Esprit de Corps: Promoting team spirit will give the organization a sense of unity.
 The Behavioral School

The behavioral school emerged partly because the classical approach did not
achieve sufficient production efficiency and workplace harmony. To
managers' frustration, people did not always follow predicted or expected
patterns of behavior. Thus, there was increased interest in helping managers
deal more effectively, with the "people side" of their organizations. Several
theorists tried to strengthen classical organization theory with the insights of
sociology and psychology.
 The Hawthorne Experiments

➢Researchers divided the employees into test groups, who were subjected to
deliberate changes in lighting, and control groups, whose lighting remained
constant throughout the experiments.

➢When the test group’s lighting was improved, productivity tended to

increase.

➢But, when lighting conditions were made worse, there was also a tendency
for productivity to increase in the test group.

➢The control group's output also rose over the course of the studies, even
though it experienced no changes in illumination.
 The Hawthorne Experiments
➢In a new set of experiments, a small group of workers was placed in a separate
room and a number of variables were altered:

✓Wages were increased;

✓Rest periods of varying length were introduced;

✓The workday and workweek were shortened;

✓Allowed the groups to choose their own rest periods;

➢Performance tended to increase over time, but it also rose and fell erratically.

➢Elton Mayo and his associates decided that a complex chain of attitudes had
touched off the productivity increases.
 The Hawthorne Experiments
➢The researchers concluded that:

✓Employees would work harder if they believed management was concerned about
their welfare and supervisors paid special attention to them.

✓Informal work groups-the social environment of employees-have a positive

influence on productivity.

➢To Mayo, then, the concept of social man-motivated by social needs, wanting on-
the-job relationships, and responding more to work-group pressures than to
management control-was necessary to complement the old concept of rational
man motivated by personal economic needs.
 The Management Science School

➢At the beginning of World War II, the British formed the first operational research (OR)
teams by pooling the expertise of mathematicians, physicists, and other scientists.

➢The teams used early computers to perform the thousands of calculations involved in
mathematical modeling.

➢Over the years, OR procedures were formalized into what is now more generally called
the management science school.

➢The development of high-speed computers and of communications among computers

provided the means for tackling complex and large-scale organizational problems.
 The Management Science School
➢Robert McNamara implemented a management science approach at Ford
Motor Company in the 1950s and 1960s.

➢“Crunching the numbers” became the central way for management decisions.

➢The management science approach to solving a problem begins when a

mixed team of specialists from relevant disciplines is called in to analyze the
problem and propose a course of action to management.

➢With sophisticated mathematical models, and computers to crunch the

numbers, forecasting the future based on the past and present became a
popular activity.
 The Management Science School
➢At the same time, the management science school pays less attention to
relationships per segment in organizations.

➢Mathematical modeling tends to ignore relationships as data, emphasizing

numerical data that can be relatively easily collected or estimated.

➢The criticism is thus that management science promotes an emphasis on only

the aspects of the organization that can be captured in numbers, missing the
importance of people and relationships.
Recent Developments in Management Theory

➢The longer we use a given theory, the more comfortable we become with it and
the more we tend to not seek out alternative theories unless events force us to
change.

➢Three additional perspectives on management theory that can grow in

importance:

✓The systems approach

✓The contingency approach

✓The dynamic engagement approach

 The Systems Approach
➢The system approach to management views the organization as a unified, purposeful
system composed of interrelated parts.

➢Gives managers a way of looking at the organization as a whole and as a part of the
larger, external environment.

➢Tells us that the activity of any segment of an organization affects, in varying degrees, the
activity of every other segment.

➢ Systems-oriented production managers make scheduling decisions only after they have
identified the impact of these decisions on other departments and on the entire
organization.

➢Managers cannot function wholly within the confines of the traditional organization
chart; they must mesh their department with the whole enterprise.
 The Contingency Approach
➢The contingency approach is sometimes called the situational approach.

➢Was developed by managers, consultants, and researchers who tried to apply the
concepts of the major schools to real-life situations.

➢The manager’s task is to identify which technique will, in a particular situation,

under particular circumstances, and at a particular time, best contribute to the
attainment of management goals.

➢If the workers are unskilled and training opportunities and resources are limited,
work simplification would be the best solution.
 Entering an Era of Dynamic Engagement

➢Dynamic implies continuous change, growth, and activity;

➢Engagement implies intense involvement with others;

➢The term dynamic engagement best expresses the vigorous way today's most
successful managers focus on human relationships and quickly adjust to
changing conditions over time.

➢Six different themes of management theory are emerging under the umbrella
that we call dynamic engagement.
 Entering an Era of Dynamic Engagement

➢New Organizational Environments

➢Ethics and Social Responsibility

➢Globalization and Management

➢Inventing and Reinventing Organizations

➢Cultures and Multiculturalism

➢Quality
Thank You