Management

Yesterday and Today

 Historical Background
Organized endeavor practiced since long
involving Plan, Organize, Lead, Direct,
Impose

–Dates back when people attempted to

accomplish goals working together

–Pyramids / Great Wall / Taj Mahal

–Military Organization found managing

larger groups with techniques of leadership
 Cont
Adam Smith 1776 – The Wealth of Nation
brought concept of Division of Labor for
increased productivity by enhanced skill
saving time
–Breakdown of Jobs with Job specialization

Industrial Revolution during late 18th century

led substitute to Machine from Man
–Economic way to manufacturing
–Mass production
 Scientific Management
Studies during early 20th century with
work of Frederick Taylor , emphasized
thinking with rationality to make
organization and workers efficient

Taylor’s “Principles of Scientific

Management” in 1911 urged to create a
mental change among workers and
managers by defining clear guidelines
of improving production efficiency –
“one best way” for doing each job
 cont
Taylor’s Principles:
– Develop science of each element of individual’s work
– Scientifically select and then train to develop the worker
– Cooperate with workers to ensure all work is done as developed
– Divide work and responsibility equally between management and
workers
Frank and Lillian Gilbreths studied to eliminate
inefficient hand and body motions using motion
pictures of hand and body motions and invented a
device (microchronometer) recording worker’s motions
and the amount of time spent in each motion
Taylor and Gilbreths technique of improving
efficiency are used:
– Analyzing basic task of work
– Use time and motion study
– Eliminate wasted motions
– Hire best qualified worker for the job
– Design incentive system based on output
 General Administrative Theory
Henri Fayol from the perspective of entire
organization constituting good management practice
developed 14 principles of management:
– Division of work -specialization increase output making efficient
– Authority –managers must be able to give orders
– Discipline –employees must obey and respect rules of organization
– Unity of command - receive orders from one superior
– Unity of direction – single plan to guide managers and workers
– Subordination of individual interests to general interest
– Remuneration - Fair wage for the service
– Centralization – degree to which subordinates are involved in
decision making
– Scalar chain – the line of authority from top to lowest rank
– Order – people and materials in the right place at the right time
– Equity – kind and fair to subordinates
– Stability of tenure – replacement are available to fill vacancies
– Initiative – high levels of effort to carry out plans
– Team spirit – to build harmony and unity in the organization
 Bureaucracy
Max Weber in early 1900 developed theory of
authority structures and relations called bureaucracy
Bureaucracy – a form of organization;
– division of labor (jobs broken down into simple defined tasks)
– clearly defined hierarchy (positions with clear chain of command)
– Detailed rules and regulations (standard operating procedures)
– Impersonal relationships (Uniform application of rules)
– Career orientation (Managers as career professionals)
– Formal selection (selected for jobs on technical qualifications)
These days this model is regarded hindrance to
individual’s creativity, and organizations’ limit to
respond dynamic environment
However some of the bureaucratic mechanisms even
in flexible organizations of creative professionals as
Infosys, Cisco, are felt necessary to ensure resource
efficiency and effectivity
 Quantitative Approach
Use of quantitative techniques to
improve decision making as :
–Applying statistics
–Optimization models
–Information models
–Computer simulations
–Linear programming to improve resource
allocation
–Critical path scheduling analysis
 Cont
One of the area where Quantitative
techniques used was Total Quality
Management initiated by quality
experts as Edwards Deming and
Joseph Juran during 50s
Quality became major thrust during
80s and 90s both in business and public
agencies when Japanese organizations
started to outsmart US organizations
 Total Quality Management (TQM)
TQM –a philosophy to continual
improvement responding to customer needs
and expectation
Customers means all who interacts with
organization products and service internally
and externally
Continuous improvement is possible with
measurements requiring statistical techniques
measuring every critical variables in work
process
Measurements compared against standards
to correct
TQM a great departure from keeping costs
low to increase productivity
 Behavioral Approach
Management is to get works done with
people
Organizational Behavior has been the focus
of research on actions of people
–motivating,
–leading,
–building trust and team,
–managing conflict
Early advocates of OB approach led
foundation for selection, motivation, team
building –
–Robert Owen (Late 1700) - improving
labor and work place
–Hugo Munsterberg (Early 1900) –scientific
study of people at work, suggested
psychological tests for selection, learning
for training, human behavior for
motivation
 Cont
– Mary Parker Follet (Early 1900) –
perspective of individual and group
behavior, group ethics, proposed people
oriented ideas
– Chester Barnard (1930s) – organization as
social system requiring cooperation,
communicate and stimulate, organization as
open system
– Great Depression of 1930 forced Managers
to examine their job rather than production
with least cost in materials and labor
– Recently group effectiveness became key to
survival as Managers to think more on
Motivation, Group behavior and leadership
 Contemporary Approach
Coming to 60s researchers looked external
environment outside organization as system
approach and contingency approach departing
from early approach of internal concern of
managers in the organization
System theory as a set of interrelated and
interdependent parts arranged in a way to
have result of a unified whole
– Closed Systems do not interact with
environment
– Open systems –in organization takes
resources as inputs from the environment
and transform as process into output that
are distributed into environment
 Cont
System Approach envision Organizations
made up of interdependent factors as
individual, groups, attitudes, motives, formal
structure, goals, authority, status, interactions
and so on as a system ensuring all these are
working to unified goals
Systems approach implies that decisions /
action in one area affect others in the
organization
System Approach Recognize that
organizations are not self-contained but they
rely on environment for inputs and outlets for
output
 Contingency Approach
Early theorists relied on principles to
be universally applicable
It is realized changing situation
require different techniques and
approaches
Contingency approach is situational
as organizations are different requiring
different ways of managing facing
different situations
No simplistic rule to follow for
managers
Even units within organization differs
in size, goals, activities
 Cont
Situational or contingency variables
may be numerous but most widely used
are:
– Size of Organization differs with problem
of coordination
– Structures, leadership style and control
system of routine technologies differ from
customized technologies
– Best in stable environment may be
inappropriate in rapidly changing
unpredictable environment
– Individual differences for growth,
autonomy, expectations matters for job
design, leadership and motivation
 Class exercise
Many management theories/philosophies
exist in business circles today, which
theory would you adopt as a business
manager/owner in your organization,
justify your perspective and give reasons
why????