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Transcript of Management thought
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Principles of Management
EVOLUTION OF MANAGEMENT THOUGHT
EVOLUTION OF MANAGEMENT THOUGHT
TOPIC TOPIC
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Figure Chronological Development of Management Perspectives
2–2
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CLASSICAL• SCIENTIFIC• ADMINISTRATI
VE• BEUROCRACY
NEO -CLASSICAL• Hawthrone
Experiments• Human
Relations Movement
• Behavioural Sciences Thinking
MODERN• QUANTITATIV
E• SYSTEM• CONTINGENC
Y
MANAGEMENT APPROACHES
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Figure Subfields of the Classical Perspective on Management
2–4
Focuses on the Focuses on the individual worker’s individual worker’s
productivityproductivity
Focuses on the Focuses on the functions of functions of managementmanagement
Focuses on the Focuses on the overall overall
organizational organizational systemsystem
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5Scientific Management: TaylorFrederick W. Taylor (1856-1915)
▫Father of “Scientific Management.
attempted to define “the one best way” to perform every task through systematic study and other scientific methods.
believed that improved management practices lead to improved productivity.
▫Three areas of focus:
Task Performance
Supervision
Motivation2–5
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6Task Performance : Scientific management incorporates basic expectations of management, including:▫Development of work standards▫Selection of workers▫Training of workers▫Support of workers
2–6
Supervision: Taylor felt that a single supervisor could not be an expert at all tasks.
– As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor.
– This became known as “Functional Foremanship.”
Motivation: Taylor believed money was the way to motivate workers to their fullest capabilities.
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Principles1. Science – No rule of thumb.2. Harmony, not discord.3. Co-operation not Individualism.4. Maximum output not restricted.5. Development of each man to his best
capacity and ability.6. Maximum prosperity of employees,
coupled with maximum prosperity of Orgn.
‘Mental Revolution’Eyes off division of surplus, rather focus on
increasing the size of surplus
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Techniques..
• Time Study (work Measurement)• Motion Study• Method Study• Fatigue Study• Differential wage rate system• Scientific task planning• Standardization + Simplification• Functional Foremanship
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Steps in Scientific Management
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Develop a sciencefor each element ofthe job to replace oldrule-of-thumb methods
Scientifically selectemployees and thentrain them to do the jobas described in step 1
Supervise employeesto make sure theyfollow the prescribedmethods for performingtheir jobs
Continue to plan the work, but use workers to get the work done
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Figure 1.3
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Administrative Management: FayolHenri Fayol (1841–1925)
▫First recognized that successful managers had to understand the basic managerial functions.
▫Developed a set of 14 general principles of management.
▫Fayol’s managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.
2–11
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Administrative Theory Henry Fayol (1841-1925) Father of Adminstrative Management
His Contributions…o 6 Business Activitieso 5 Management Functionso 14 PrinciplesBusiness Activities1.Technical2.Commercial3.Financial Operating activities of
business4.Accounting 5.Security6.Managerial Activity Most Neglected
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13Fayol’s PrinciplesFayol’s PrinciplesHenri Fayol, developed a set of 14
principles:1. Division of Labor: allows for job
specialization. Fayol noted firms can have too much
specialization leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one boss.
4. Line of Authority: a clear chain from top to bottom of the firm.
5. Centralization: the degree to which authority rests at the very top.
6. Unity of Direction: One plan of action to guide the organization.
7. Equity: Treat all employees fairly in justice and respect.
2–13
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Fayol’s PrinciplesFayol’s Principles8. Order: Each employee is put where they
have the most value. 9. Initiative: Encourage innovation.10. Discipline: obedient, applied, respectful
employees needed.
11. Remuneration of Personnel: The payment system contributes to success.
12. Stability of Tenure: Long-term employment is important.
13. General interest over individual interest: The organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.
2–14
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Bureaucratic Management
Focuses on the overall organizational system.
Bureaucratic management is based upon: Management responsibilititiesare based on a person’s demonstrated ability to hold the positionBest suitable person fills a particular
position in a bureaucratic organization
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Bureaucracy Max Weber (1864-1920) A German Social Scientist
PrinciplesPrinciplesoDivision of workoRules and RegulationsoHierarchy of AuthorityoTechnical CompetenceoRecord Keepingo Impersonal Relations
Legitimate Authority
Charismatic
Rational
Traditional
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Key points of BureaucracyKey points of BureaucracyAuthority is the power to hold people
accountable for their actions.
Positions in the firm should be held based on performance not social contacts.
Position duties are clearly identified. People should know what is expected of them.
Lines of authority should be clearly identified. Workers know who reports to who.
Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates. Sometimes, these lead to “red-tape” and other
problems.
2–17
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Experiments conducted at a plant at Western Electric Company.
Illumination Experiment Relay Assembly Test room studies Mass Interview Bank wiring observation room study
Conclusion-1.A work group- not a techno economic unit but a
social system2.Workers not only rational economic beings motivated
by money, but also respond to work conditions3.Social+Psychological factors exercise greater control
on employee behaviour.
A) Hawthrone ExperimentsGeorge Elton Mayo (1880-1949)Father of Neo-Classical Approach
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B) Human Relations Approach
Pertains to motivating people in orgn to develop team work which effectively fulfills their needs and leads to achieving organisational goals.
Contributions-1.Moral Justification2.Satisfy social and psychological needs to
increase productivity.3.Highlights the people side of orgn.4.A true concern for workers5.Focuses attention on inter-personal
relations + Dynamics6.Stressed on training of people management
skills and managerial styles.
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C) Behavioural Science Approach
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Behavioral Perspective
Followed the classical perspective in the development of management thought.▫Acknowledged the importance of human
behavior in shaping management style▫Is associated with:
Mary Parker Follett Elton Mayo Douglas McGregor Chester Barnard
2–21
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Mary Parker Follett
Concluded that a key to effective management was coordination.
Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people.
Believed that management is a continuous, dynamic process.
Felt that the best decisions would be made by people who were closest to the situation.
2–22
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Elton MayoConducted the famous Hawthorne Experiments.
At Western Electric Co. during 1924-1932.“Hawthorne Effect”
Productivity increased because attention was paid to the workers in the experiment.
Phenomenon whereby individual or group performance is influenced by human behavior factors.
Actually, it appears that the workers enjoyed the attention they received as part of the study and were more productive.
2–23
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Maslow’s Hierarchy of Needs•Five levels
▫Physiological – hunger, thirst, shelter, sex▫Safety – security and protection▫Social – affection, interpersonal relationships▫Esteem – self-respect, achievement status▫Self-actualization – achieving full potential
•Usually thought in the form of a pyramid
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Maslow’s Hierarchy of Needs
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SA
Esteem Needs
Social Needs
Security Needs
Physiological Needs
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Douglas McGregor
Proposed the Theory X and Theory Y styles of management.
▫Theory X managers perceive that their subordinates have an inherent dislike of work and will avoid it if at all possible.
▫Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.
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The Quantitative Perspective
Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving.
This approach has four basic characteristics:1.A decision-making focus2.Development of measurable criteria3.Formulation of a quantitative model4.The use of computers
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Contemporary Management Theory
•The Systems Perspective▫A system is an interrelated set of
elements functioning as a whole. An organization as a system is composed of four elements: Inputs (material and/or human resources) Transformation processes (technical and
managerial processes) Outputs (products and services) Feedback (reactions from the
environment)
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Developed by N. Zaidi
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The Integrated Systems Model
FeedbackFeedback
InputsInputsFrom theFrom theenvironment:environment:HumanHumanMaterialMaterialFinancialFinancialInformationInformation
ProcessingProcessingTransformationTransformationprocess:process:TechnologyTechnologyOperating systemsOperating systemsAdministrative Administrative systemssystemsControl systemsControl systems
OutputsOutputsInto the Into the environmentenvironmentProductProductServicesServicesProfit/lossProfit/lossEmployee behaviorEmployee behaviorInformationInformation
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Systems Perspective
• Open systems interact with one another and other environments
• Closed systems do not interact with their environment
• Subsystems recognizes the importance of subsystems because of their interdependence
Developed by N. Zaidi
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Systems Perspective
• Synergy▫Subsystems are more successful
working together than working alone. The whole, working together, is greater than the sum of its parts.
•Entropy ▫A natural process leading to system
decline which can be avoided through organizational change and
renewal.
Developed by N. Zaidi
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Systems Approach• Attempts to explain organisational
behaviour by analysing the structure of orgn.
• It was a result of those orgns that were trying to adapt to the rapid change in business environment.
Features-1. Unified and purposeful system2. Each inter-related parts and subsystems.3. Each system has a boundary- Internal or External4. Open system Vs. Closed systems5. A business enterprise as a open system
(Draws Inputs- convert into output- sends to environment)
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Contigency Approach
•Was developed by managers, consultants and researcher who tried to apply the concept of earlier approaches to real life situations.
‘ There is no best way to tackle the problem of management. The
application of management principles and practices is contingent upon the
environment’
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Best solution is one which is Best solution is one which is responsive to the pecularities of a responsive to the pecularities of a given situation.given situation.Features1.Mgt is situational.2.Should match or fit its approach to the
requirements of a particular situation.3.Mgt’s success depends on its ability to cope
with its env, it should sharpen its diagonistic skills so as to anticipate and comprehend the environmental change.
4.Mgrs should understand that there is no best way to manage.
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The Contingency Perspective•The Contingency Perspective suggests
that universal theories cannot be applied to organizations because each organization is unique – what works in one situation may not work in another
▫This requires managers to identify the key contingencies in a given situation.
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An Integrative Framework of Management Perspectives
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Systems Approach• Recognition of internal
interdependencies• Recognition of
environmental influences
Contingency Perspective• Recognition of the situational
nature of management• Response to particular
characteristics of situation
ClassicalManagementPerspectivesMethods forenhancingefficiency andfacilitating planning,organizing, andcontrolling
BehavioralManagementPerspectivesInsights for moti-vating performanceand understandingindividual behavior,groups and teams,and leadership
QuantitativeManagementPerspectivesTechniques forimproving decisionmaking, resourceallocation, andoperations
Effective and efficient management
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Management in the 21st CenturyWilliam Ouchi’s Theory Z
▫Japanese-style approach to management developed by William Ouchi
Advocates trusting employees and making them feel like an integral part of the organization.
Based on the assumption that once a trusting relationship with workers is established, production will increase.
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Future Leaders Must:
Be thoroughly schooled in the different management perspectives.
Understand the various influences that will have a continuing effect on management thinking
Be aware of how key business environment variables relate to their organization.
Know which elements to select from the various management perspectives that are appropriate for their situation.
Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete.
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