evolution of management thoughts

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  • Management Principles and Practices By

  • Why we study Management ?

  • Managers are Often Wrong !

  • But . Never in Doubt !

  • Management manages by making decisions and by seeing that those decisions are implemented. Harold S. Geneen

  • What is Management ?

  • Management .. Managing MenTactfully

  • Management is an art of getting things done through and with others in the formally organized groups

    -Koontz and O'Donnell

  • Management tells us what is to be done and what is the best way to do that

    Frederick Winslow TaylorFather of Scientific Management

  • Management is not the direction of goods, it is the development of people-Lawrence Apple

  • Finally..

  • Management is..

    What Managers do !

    -Stephen P. Robbins

  • Evolution of Management Thoughts

  • The verb manage comes from the Italian maneggiare (to handle especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later mnagement) influenced the development in meaning of the English word management in the 17th and 18th centuries. -Oxford English Dictionary.

  • Environmental Factors Influencing Management ThoughtEconomic Influences The availability, production, and distribution of resources within a society.Social InfluencesThe aspects of a culture that influence interpersonal relationships.Political InfluencesThe impact of political institutions on individuals and organizations.

  • Environmental Factors Influencing Management Thought (contd)Technological InfluencesThe advances and refinements in any of the devices that are used in conjunction with conducting business.Global InfluencesThe pressures to improve quality, productivity, and costs as organizations attempt to compete in the worldwide marketplace.

  • Chronological Development of Management Perspectives

  • Classical Approach to Management ThoughtF. W. Taylor 1856-1915Henri Fayol 1841-1925Max Weber 1864-1920

  • Subfields of the Classical Perspective on ManagementFocuses on the individual workers productivityFocuses on the functions of managementFocuses on the overall organizational system

  • Scientific 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 PerformanceSupervisionMotivation

  • Task PerformanceScientific management incorporates basic expectations of management, including:Development of work standardsSelection of workersTraining of workersSupport of workers

  • SupervisionTaylor 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.

  • MotivationTaylor believed money was the way to motivate workers to their fullest capabilities.He advocated a piecework system in which workers pay was tied to their output.Workers who met a standard level of production were paid a standard wage rate.Workers whose production exceeded the standard were paid at a higher rate for all of their production output.

  • Taylors Four Principles of Scientific ManagementScientifically study each part of a task and develop the best method of performing the task.

    Carefully select workers and train them to perform the task by using the scientifically developed method.

    Cooperate fully with workers to ensure that they use the proper method.

    Divide work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

  • Key Concepts of Scientific Management Scientific Task Planning Time and Motion Studies Standardization : Setting Standards for Performance Piece rate system: Discriminated Wages SystemFunctional Foremanship: Route Clerk, Instruction card clerk, cost and time clerk, gang boss etc.

  • Limitations of Scientific Management Exploitative Device Depersonalized Work: Pre-decided Methods of Work, Pre-Settled Things Anti-Social: Workers are only economic tools Unrealistic Mechanical: Too much technical

    In the search of best, Taylor converted men into machines

  • Administrative Management: FayolHenri Fayol (18411925)First recognized that successful managers had to understand the basic managerial functions.Developed a set of 14 general principles of management.Fayols managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.

  • Six Groups of Activities of Industrial Undertaking Technical activities: Production, Manufacturing, adaptation Commercial Activities: Buying, Selling, Exchange Financial activities: Search of Optimum Use of Capital Security Activities: Protection of Property and PersonAccounting Activities: stock-taking, balance sheets, costs, statisticsManagerial Activities: Planning, organization, command, coordination and control

  • Fayols General Principles of ManagementDivision of workAuthority and responsibilityDisciplineUnity of commandUnity of direction: One Manager-One PlanSubordination of individual interest to the common goodRemuneration of personnelCentralizationScalar chainOrder: SystematicEquity: Fair BehaviorStabilityInitiativeEsprit de corps: Unity is Strength

  • Bureaucratic ManagementFocuses on the overall organizational system.Bureaucratic management is based upon: Firm rulesPolicies and proceduresA fixed hierarchyA clear division of labor

  • Bureaucratic Management: WeberMax Weber (18641920)A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behaviorthe approach to management now referred to as bureaucracy.Division of laborHierarchy of authorityRules and proceduresImpersonalityEmployee selection and promotion

  • Webers Forms of AuthorityTraditional authority Subordinate obedience based upon custom or tradition (e.g., kings, queens, chiefs).Charismatic authoritySubordinates voluntarily comply with a leader because of his or her special personal qualities or abilities (e.g., Martin Luther King, Gandhi).Rational-legal authoritySubordinate obedience based upon the position held by superiors within the organization (e.g., police officers, executives, supervisors).

  • Webers Three Types of AuthorityType DescriptionTraditional Subordinate obedience based upon custom or traditionCharismatic Subordinate obedience based upon special personal qualities associated with certain social reformers, political leaders, religious leaders, or organizational leadersRationallegal Subordinate obedience based upon the position held by superiors within the organization

  • Bureaucratic Hierarchical Power Structure

  • Classical versus Behavioral PerspectiveFocused on rational behavior Classical PerspectiveAcknowledged the importance of human behaviorBehavioral Perspectivevs.

  • Behavioral Approach to Management ThoughtMary Parker Follet1868-1933Elton Mayo1880-1949Douglas McGregor1906-1964Chester I Barnard1886-1961

  • Behavioral PerspectiveFollowed the classical perspective in the development of management thought.Acknowledged the importance of human behavior in shaping management style

  • Mary Parker Follett : Mother of Conflict Resolution Key to effective management was coordination.Managers needed to coordinate and harmonize group effort rather than force and coerce people.Management is a continuous, dynamic process.Best decisions would be made by people who were closest to the situation.

  • Follett on Effective Work GroupsFour principles of coordination to promote effective work groups:Coordination requires that people be in direct contact with one another.Coordination is essential during the initial stages of any endeavor.Coordination must address all factors and phases of any endeavor. Coordination is a continuous, ongoing process.

  • Management Thought by Follett Constructive conflictLaw of Situation: Orders through situation and by appropriate person who is in the situation to pass order to the right personGroup Activity: Group is ImportantLeadership for Integration Authority and Responsibility

  • Elton MayoConducted the famous Hawthorne Experiments.Hawthorne EffectProductivity increased because attention was paid to the workers in the experiment.Phenomenon whereby individual or group performance is influenced by human behavior factors.His work represents the transition from scientific management to the early human relations movement.

  • Hawthorne Experiments 1927-1932Elton Mayo, Harvard Business School Professor, examined the productivity and work conditions.

    -Effect of Fatigue and Monotony on Job Productivity(Rest Breaks, Work Hours, Temperature and Humidity)

  • Findings of Elton MayoChanging illumination (Lighting) for the test group, modifying rest periods, shortening workdays and varying incentive pay systems did not seem to explain changes in productivity. Mayo and his researchers then came to the conclusion that other factors were responsible for it.

  • Mayo found in general, that the improvement in productivity was due to such social factors as morale, satisfactory interrelationships between members of work group (a sense of belonging), and effective management-a kind of managing that would understand human behaviour, especially group behaviour and serve it through such interpersonal skills as motivating, counseling, leading, an communicating.

  • Hawthorne EffectThe mere act of showing people that you are concerned about them usually spurs them to better job performance

  • Douglas McGregorProposed 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.

  • Comparison of Theory X and Theory Y AssumptionsFactor Theory X Assumptions Theory Y AssumptionsEmployee attitude Employees dislike work and. Employees enjoy work and toward work will avoid it if at all possible.will actively seek it. Management view Employees must be directed,Employees are self-motivated of direction coerced, controlled, or threatenedand self-directed toward achieving to get them to put forth adequate effort. organizational goals. Employee view Employees wish to avoid responsibility; Employees seek responsibility; of direction they prefer to be directed and told what they wish to use their creativity, to do and how to do it. imagination, and ingenuity in performing their jobs. Management style Authoritarian style of management Participatory style of management

  • Chester I Barnard Felt that executives serve two primary functions:Must establish and maintain a communications system among employees.Must establish the objectives of the organization and motivate employees.Developed an acceptance theory of authority:Authority of a manager flows from the ability of subordinates to accept or reject an order from the manager once they:Comprehend what the order requires of them.Review the orders consistency with organization goals.Perceive a personal benefit in obeying the order.

  • Abraham Maslow 1908-1970

  • Physical NeedsNeed for SecurityNeed for Social RelationsNeed for Self EsteemSelf-ActualizationMaslows Hierarchy of Needs

  • Herbert A Simon (1916-2001)-Principles of Profit Maximisation and Cost Minimisation -Rationality in decision making -Bounded Rationality: The term used to designate rational choice that thanes intoaccount the cognitive limitation of both knowledge and cognitive capacity.

  • Decision Making An operational administrative decision should be correct and efficient, and it must be practical to implement with a set of co-ordinate means.

    The task of rational decision making is to select the alternative that results in the more preferred set of all the possible consequences.

  • Three Steps of Decision Making -The identification and listing of all the alternatives-The determination of all the consequences resulting from each of the alternatives-The comparison of the accuracy and efficiency of each of these sets of consequences.

  • Quantitative Approach or Management Science Approach

  • The Quantitative PerspectiveCharacterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. This approach has four basic characteristics:A decision-making focusDevelopment of measurable criteriaFormulation of a quantitative modelThe use of computers

  • The Quantitative Perspective (contd)Decision-Making FocusThe primary focus of the quantitative approach is on problems or situations that require direct action, or a decision, on the part of management.Measurable CriteriaThe decision-making process requires that the decision maker select some alternative course of action. The alternatives must be compared on the basis of measurable criteria.

  • The Quantitative Perspective (contd)Quantitative ModelTo assess the likely impact of each alternative on the stated criteria, a quantitative model of the decision situation must be formulated.ComputersComputers are quite useful in the problem-solving process.

  • Basic Structure of Systems

  • Systems PerspectiveAn approach to problem solving based on an understanding of the basic structure of systems.Environmental interactionOpen systems must interact with the external environment to survive.Closed systems do not interact with the environment.Synergy: when all subsystems work together making the whole greater than the sum of its parts.Entropy: the tendency for systems to decay over time.

  • The Organisation as a System

  • The Contingency PerspectiveA view that proposes that there is no one best approach to management for all situations.Asserts that managers are responsible for determining which managerial approach is likely to be most effective in a given situation.This requires managers to identify the key contingencies in a given situation.

  • Contingency View of Management

  • An Example of the Contingency PerspectiveJoan Woodwards ResearchDiscovered that a particular management style is affected by the organizations technology.Identified and described three different types of technology:Small-batch technologyMass-production technologyContinuous-process technology

  • Table 2.4 Production Technology ExamplesProduction TechnologyExamples Small-batch Custom fabrication machine shop, technology manufacturer of neon advertising signs, print shop specializing in personal business cards, trophy-engraving shop

    Mass-production Manufacturer of automobiles, manufacturer technology of refrigerators, manufacturer of hair dryers, manufacturer of pencils

    Continuous-process Oil refinery, flour mill, soft drink bottler, technology chemical processor

  • Information Technology and Management StyleInformation technology can facilitate the use of a particular management style.Facilitated by advanced computersQuantitative/ Systems PerspectivesClassical PerspectiveFacilitated by communications equipment

  • Future Issues: Diversity, Globalization, and QualityHeightened concern for diversity initiatives within the workplace and within managementAdoption of the concept of workers as decision makers, problem solvers, and team playersCreation of a focus on and commitment to the concept of quality.

  • Management in the 21st CenturyWilliam Ouchis Theory ZJapanese-style approach to management developed by William OuchiAdvocates 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.

  • Future Leaders Must:Be thoroughly schooled in the different management perspectives.Understand the various influences that will have a continuing effect on management thinkingBe 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.

  • Peter F Drucker (1909-2005)Management by Objectives: M.B.O.

    Druckers Approach towards management: Management is a dynamic, life-giving element in an organisation Management is a distinct, discipline and a social function Management should be creative and innovative in order to produce results. He opined that management is a great profession full of challenges

  • M.B.O. (Management by Objectives)Drucker stressed the importance of joint goal setting through Management by Objectives. He emphasized the importance of participative set goals that are tangible, verifiable and measurable. He wanted managers to focus on what must be accomplished (goals) rather than how it was to be accomplished (Methods)

  • Text Books and Reference Books Management-Stoner and FreemanEssentials of management Koontz and OdonellManagement - RobbinsManagement -GilbertManagement Today Principles and practice-Gene Burton & Manab ThakurManagement Principles and Practices: L M PrasadAdministrative Thinkers: D Ravindra Prasad, V Prasad, P Satyanarayana

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