Evolution of Management Thought -Unit I B

8/13/2019 Evolution of Management Thought -Unit I B

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Invented high speed steel cutting tools andspent most of his life as a consulting

engineer Acknowledged as father of scientific

management Famous work entitled The Principles of

Scientific management published in 1911


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Replacing rules of thumb with science Obtaining harmony in group action

Achieving cooperation of human beings,rather than individualism

Working for maximum output Developing all workers to the fullest


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Father of modern management theory 14 Principles:

Authority and responsibility both arerelated

Unity of command receive orders from onesuperiors only

Scalar chain Chain of superiors fromhighest to the lowest ranks

Esprit de corps Union is strength


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Hawthrone studies Illumination was either increased or

decreased for a test group productivityimproved

But other factors were responsible for it Factors such as morale, satisfactory

interrelationships between the members of awork group

Phenomenon - Hawthrone effect


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Peter F Drucker - written generalmanagement topics

Keith Davis informal organisation W. Edward Demings and Joseph M Juran -

Quality of Japanese products Laurence Peter People get promoted to a

level where they are incompetent and nofurther promotion is possible


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William Ouchi best selling book Theory Z Thomas Peters and Robert waterman

characteristics of excellent companies


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1. Empirical Approach Studies experience through cases

Identifies successes and failures


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Managerial practice depends oncircumstances

Cause and effect depends on contingency i.esituation


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Management is seen as mathematicalprocesses Concepts, symbols and models

Logical process expressed in symbols


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Focus on the making of decisions, persons orgroup making decisions

Entire area of business activity, nature oforganisation structure, information decision,group decision making, value of decisionmakers, individual decision making andprocess of decision making


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Fundamental rethinking process analysis,radical redesign, dramatic results

Operations: Input transformation Output


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Broad applicability Systems have boundaries but they also

interact with external environment Interrelatedness of planning, organising, and

controlling in an organisation as well assubsystems


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Technical system has great effect on socialsystem

Focus on production, office operations andother areas with close relationships


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Concerned with both interpersonal and groupbehavioural aspects leading to a system of

cooperation


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Emphasis on behaviour of people in groups Study of group behviour patterns


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Focus on interpersonal behaviour, humanrelations, leadership and motivation


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The seven SS are: Strategy

Structure Systems Style Staff Shared values Skills


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Dependable satisfying products and services Attention to teamwork

Quality education Customer needs


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Draw knowledge from approaches above Integrates the approaches with science and

theory


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Planning involves selecting missions andobjectives and the actions to achieve them; it

requires decision making which is, choosingfrom the alternatives available the futurecourses of action


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Plans provide a rational approach to achievethe preselected objectives


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Its contribution to purpose and objectives Its primacy among the managers tasks

Its pervasiveness The efficiency of resulting plans


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1. Purposes or missions Identifies the basic function or task of an

enterprise Meaningful purpose Ex: Business Production and distribution of

goods and services University Teaching and research


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Mission Social purpose of producing anddistributing goods and services

Ex: Hall mark The social expressionbusiness


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Ends toward which activity is aimed Goals contribute to the attainment of

enterprise objective Ex: Objective to make profit by producing a

home entertainment equipment Goals Produce required number of

television design, quality, cost


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Determination of the long term objectives ofan enterprise

Adoption of courses of action Allocation of necessary resources Ex: Decide what kind of business Is it transportation or a paper manufacturer Purpose of strategies furnish a framework

for guiding, thinking and action


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General statement/guide or channel thinkingin decision making

Define an area within which decision is to bemade Helps to decide issues before they become

problems


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Exist on all levels of organisation Range from major to minor policies

Ex: University trained engineers Setting competitive prices Making policies consistent is difficult due to: a. seldom defined in writing b. Exact interpretation are too little c. Not easy to control policy


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Are plans that establish a required method ofhandling future activities

Guides to action Ex: Procedure for handling orders involve

sales department, finance, accounting,production department


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POLICY

To grant employeesvacations

PROCEDURES

To implement policy-provide for schedulingvacations to avoiddisruption of work


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Specific required actions or non actions,allowing no discretion

Procedure may be looked upon as a sequenceof rules Rule may not be a part of procedure Ex: No smoking rule Handling of orders - Procedure Rule allows no deviation


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Are a complex of goals, policies, procedurestask assignments, steps to be taken and

other elements necessary to carry out a givencourse of action Ex: 5 year program to improve quality

standard Morale of workers in manufacturing

department


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Ex: Investing in new jets involve million ofdollars for purchase of aircraft, spare parts


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Is a statement of expected results expressedin numerical terms

Expressed in financial terms in labour hours,units of product, machine hours Capital expenditure, cash flow To make in advance for a week or 5 years Necessary for control


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Types: Variable/flexible budget according to level

of output Program budgets Agency develops detailed

programs Zero base budget Combination of both As programs started from Base Zero


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Being aware ofopportunity

Setting objectives orgoals

Considering planning

premises

Identifyingalternatives

Comparing alternatives

Choosing an alternative

Formulating supportingplans

Numberizing plans bymaking budgets


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1. Being aware of opportunities Aware of opportunities within the

organisation and external environment Preliminary look at future opportunities Know strength and weakness What problems to solve, why? what to gain Setting objectives depends on awareness


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Objectives for entire enterprise For each subordinate work unit

For long term/short term Specify end results what is to be done Give direction to the major plans Objectives form a hierarchy Managers should contribute their ideas


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Assumptions about the environment in whichthe plan is to be carried out

Forecasting in premising Kinds of markets? Volume of sales, prices, products, costs, wage

rates, tax rate, technical development,

dividend, expansion


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Examine alternative courses of action Reduce the number of alternatives analyse

Mathematical techniques and computer used Discover fruitful possibilities


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Examine strong and weak points Some suit the companys long range

objectives So many variables and limitations to be

considered Evaluation is difficult with simple problems


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Real point of decision making Decide to follow several courses rather than

one best course


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Required to support the basic plan


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Numberize the plans and convert them intobudgets

Represent the sum total of income andexpenses Each department have its own budgets


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Set important standards against whichplanning progress can be measured

Ex: Apply the planning steps in preparing forcollege


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Objectives were defined as the importantends toward which organisational and

individual activities are directed Verifiable objectives At the end of the

period it should be possible to determinewhether or not the objective has been

achieved


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Objectives form a hierarchy as well asnetwork

Multiple goals that are sometimesincompatible and may lead to conflictswithin the organisation, within the group andeven within individuals


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1. Purpose of the society 2. Mission of the business

3. Overall objectives 4. More specific objectives (KRA key Result

areas) 5. Division objectives 6.Department and unit objectives 7.Individual objectives


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Objectives must be verifiable Verifiable to achieve a return on investment

of 12% at the end of the current year Non verifiable to make a reasonable profit Quantitative/qualitative objectives Not be too long Present a challenge, indicate priorities,

promote personal and professional growthand development


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Refer to determination of purpose Allocation of resources


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Strategies and policies are closely related,framework for plans, basis of operational

plans, affect all areas of managing


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1. Inputs goal inputs 2. Enterprise profile determine where the

company is?, Where is should go? 3. Orientation of Top managers Enterprise profile shaped by people Give orientation Examine their values, preferences, attitudes


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4. purpose and major objectives End pointsactivities directed

5. external environment Present and futureenvironment assessed Environment scanned economic, social,

political, legal, geographic factors


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6. Internal environment SWOT Analysis Audit resources, production, marketing,

procurement, human and financial resources 7. Development of alternative strategies Specialise or concentrate Ex: Korean Hyundai company produced

lower priced cars, diversify and extendoperation


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8. Evaluation and choice of strategies Consider risks involved, timing, reaction of

competitors Ex: IBM reduced the price of PCs in reaction

to apples computer


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9. medium and short range planning,implementation and control

Implementation of the plan during allphases of the process,

control monitor the performance Feedback


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10. Consistency and contingency Testing for consistency, preparing for

contingency plans, key aspect of strategicplanning

Evolution of Management Thought -Unit I B

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