PRINCIPLES OF MANAGEMENT

CH.2 Managing: History and Current Thinking

Faculty: Maira Akhtar

3 BASIC APPROACHES TO MANAGEMENT:

Classical Approach Behavioral Approach Management Science Approach

OTHER APPROACHES: The Contingency Approach The Systems Approach

THE CLASSICAL APPROACH

THE CLASSICAL APPROACH

Pioneers of Management Study “recommends that managers continually

strive to increase organizational efficiency to increase production”

Find the ‘one best way’ Lower-level analysis: done by studying the

jobs of workers at the lower levels of organization, how the task situation can be structured to get the highest production from workers.

Comprehensive Analysis: studying the management function as a whole.

FREDERICK W. TAYLOR

Gave the concept of ‘Scientific Management’ – increase worker efficiency by scientifically designing jobs, his basic premise was that every job had one best way to do it and that this way should be discovered and put into operation.

Bethlehem steel Co. Assumption that any workers work could be

reduced to a science Astounding results and increase in efficiency

and production Pioneered the Piece-Rate System

GILBRETHS:

‘Motion Study’ – reducing each job to the most basic movements possible

Each movement/motion is studied to determine how much time the movement takes and how necessary it is to performing the job

Inefficient/unnecessary movements are eliminated

HENRY L.GANTT:

Interested in increasing worker efficiency Current tasks and piece rates were set

according to what had been done in the past, or on somebody’s OPINION of what workers should do.

This led to inefficient tasks and unsatisfactory piece rates

Gantt said this OPINION should be substituted by EXACT SCIENTIFIC KNOWLEDGE

Sought to improve systems/organizations through task-scheduling innovation and the rewarding of innovation

Gantt Charts: Still the scheduling tool most commonly used by modern managers. This chart shows what work was scheduled for specific time periods, how much of this work has been completed, and by whom it was done.

Rewarding Innovation: You should be more humane, do not be a slave-driver. When you ask someone to perform work, make it to their advantage to do so, do not ask unreasonable or impossible.

Gave the concept of a ‘Bonus’ pay in addition to piece rate, for exceeding the daily production quota.

Believed in worker compensation that corresponded to overproduction (bonus)

HENRI FAYOL: Comprehensive Analysis Pioneer of Administrative Theory He gave the FUNCTIONS OF MANAGEMENT –

Planning, Organizing, Commanding, Coordinating, and Controlling.

Gave 14 General Principles of Management:1. Division of Work2. Authority (and Responsibility)3. Discipline4. Unity of Command

5.Unity of Direction6. Subordination of individual interests to the

general interests7. Remuneration8. Centralization (/Decentralization)9. Scaler Chain10. Order11. Equity12. Stability of Tenure of Personnel13. Initiative14. Espirit de corps

.

LIMITATIONS OF CLASSICAL APPROACH:

Did not emphasize human variables, did not take into account differences in characters, and such things as leadership, motivation, conflict and communication.

THE BEHAVIORAL APPROACH

Emphasizes increasing production through an understanding of people.

If managers understand their people and adapt their organizations to them, organizational success will usually follow.

The Hawthorne Studies The Human Relations Movement

THE HAWTHORNE STUDIESR Conducted at the Hawthorne (Chicago) Works of

the Western Electric Company between 1924 - 1932

PHASE 1: The Relay Assembly Test Room Experiments:

Studied productivity under different working conditions, specifically lighting

Determine relationship between intensity of lighting and worker efficiency

Two test groups, light intensity varied for one, held constant for the other

RESULT: Productivity increased in both conditions WHY?

WHY? - subjects found it enjoyable - New supervisory relationship – free, no fear - realized they were part of an important study - became friendly as a group

CONCLUSION: human factors within an organization could significantly influence production.

PHASE 2: The Bank Wiring Room Experiment: To analyze the social relationships in a work

group. Focused on the effect of group piecework

incentives on a group of men Harder group worked as a whole – the more pay

each member would receive Believed workers would encourage one another to

work harder They were wrong The faster workers were pressured to slow down They were more concerned with increasing group

solidarity rather than earning more CONCLUSION: social groups in organizations could

effectively exert pressure to influence individuals to disregard monetary incentives.

Result of both phases of Hawthorne Studies:

Managers realized the importance and influence of the HUMAN VARIABLE.

HUMAN RELATIONS MOVEMENT: Sparked by Hawthorne studies A people-oriented approach to management Enhance org success by building relationships

with ppl When management stimulates high productivity

and commitment to the organization and its goals, human relations are said to be effective, and vice versa.

Human Relations Skill: ability to work with people in a way that enhances organizational success

MANAGEMENT SCIENCE APPROACH Suggests that managers can best improve their

organizations using the scientific method and mathematical techniques to solve organizational problems.

WW II – OR groups – Operations Research groups\ Dictates that scientists:- Observe- Construct- Deduce- Test

FOUR characteristics of situations in which management science techniques are applied:

The management problems studies are so complicated that managers need help in analyzing a large number of variables.

A management science application generally uses economic implications (eg.sales,profit) as guidelines for making a particular decision

The use of mathematical models to investigate the business situation is typical in management science application

Computers are often used in this analysis and are very valuable to management science

THE CONTINGENCY APPROACH: What managers do in practice depends upon, or is

contingent upon, a given set of circumstances, that is , dependent upon certain situations

Emphasizes “ïf-then”relationships Outlines the best management methods for

different situations No one best way to solve all management

problems in an organization, but ONE BEST WAY TO SOLVE A PARTICULAR PROBLEM OR SITUATION

THE SYSTEM APPROACH: To fully understand the operation of an entity, the entity

must be viewed as a system System: A number of interdependent parts functioning as a

whole for some purpose Two types of systems: Closed and Open Concept of system as a WHOLE is very important – you must

first b aware of how each part functions and the interrelatedness of each part, before you can make modifications to the parts which benefit the system as a whole

Management System comprises of a number of parts including organizational input, organizational process and organizational output. These function interdependently to achieve a purpose – organizational objectives

Management system is an open system – One that interacts with its environment.