Historical roots of contemporary management practices
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Transcript of Historical roots of contemporary management practices
Historical Roots of Contemporary Management
PracticesDr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
Professor
Historical Roots of Contemporary Management Practices
Up to the 20th century (pre-modern era) Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present The process approach
The systems approach
The contingency approach
Adam Smith’s Contribution to the Field of Management
The general popularity today of job specialization is undoubtedly due to Smith’s view about division of labor.
Division of labor is the breakdown of jobs into narrow, repetitive tasks.
Industrial Revolution’s Influence on Management Practices
Industrial Revolution has originated in late-18th-century in Great Britain, and crossed the Atlantic toAmerica by the end of the Civil War.
Because of the Industrial Revolution, machine powerwas rapidly substituted for human power, which made iteconomical to manufacture goods in factories.
With the development of big organizations, a formaltheory to guide managers running these organizationsefficiently and effectively was needed.
Evolution of Management Theory
18902000
Administrative Management
Behavioral Management
Scientific Management
Management Science
Org. Environment
1940
Scientific Management
Frederick Taylor was called as the father of Scientific management.
His book - The Principles of Scientific management was published in 1911.
Immediately, its contents became widely accepted by managers throughout the world.
Background of That Time
There were no clear concepts of responsibilities to workers and managers.
No effective work standards existed.
Management decisions were based on hunch and intuition.
Workers were placed on jobs with little or no concern for matching their abilities and aptitudes with the tasks required.
Managers and workers considered themselves to be in continual conflict - any gain by one would be at the expense of the other.
Taylor’s Four Principles of Management
Develop a scientific way for each element of an individual’swork, which replaces the old rule-of-thumb method.
Scientifically select and then train, teach, and develop theworker.
Heartily cooperate with the workers, so as to ensure that allwork is done in accordance with the scientific way that hasbeen developed.
Divide work and responsibility almost equally betweenmanagers and workers. Managers take over all work forwhich it is better fitted than the workers.
Problems of Scientific Management
Managers often implemented only the increased output side of Taylor’s plan. They did not allow workers to share in
increased output.
Specialized jobs became very boring, dull.
Workers ended up distrusting Scientific Management.
Workers could purposely “under-perform”
Management responded with increased use of machines.
The GilbrethsFrank and Lillian Gilbreth refined Taylor’s
methods. Made many improvements to time and
motion studies.
Time and motion studies: 1. Break down each action into components. 2. Find better ways to perform it. 3. Reorganize each action to be more
efficient. Gilbreths also studied fatigue problems, lighting,
heating and other worker issues.
General Administrative Theory
Henry Fayol’s contributionsHe argued that management was an activity
common to all human undertakings in business, ingovernment, and even in the home. He stated 14principles of management—fundamental or universaltruths.
Fayol’s 14 Principles of Management
1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of
Individual Interests to the
General Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of
Personnel
13. Initiative
14. Esprit de corps - a feeling
of pride and mutual loyalty
shared by the members of a
group.
Administrative Management
Seeks to create an organization that leads to both efficiency and effectiveness.
Max Weber developed the concept of bureaucracy.
A formal system of organization and administration to ensure effectiveness and efficiency.
Weber developed the Five principles shown in the following Figure.
Bureaucratic Principles
A Bureaucracy
should have
Written rules
System of task
relationships
Hierarchy of
authority
Fair evaluation
and reward
Weber’s Ideal Bureaucracy
Division of labor
Authority hierarchy
Formal selection
Formal rules and regulations
Impersonality
Career orientation
Key points of Bureaucracy
Authority 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 should know who reports to whom.
Rules, Standard Operating Procedures (SOPs) & Norms used to determine how the firm operates. Sometimes, these lead to “red-tape” and other
problems.
The Human Resources Approach
Hawthorne Studies
Human Relations Movement
- Dale Carnegie
- Abraham Maslow
- Douglas McGregor
Behavior Science/Behavioral Management
Behavioral Management
Focuses on the way a manager should personally manage to motivate employees.
Mary Parker Follett, an influential leader in early managerial theory Suggested workers’ help in analyzing their jobs
for improvements. The worker knows the best way to improve the
job. If workers have the knowledge of the task, then
they should control the task.
Hawthorne Studies Time: 1924—the early 1930s
Place: Hawthorne plant in the Western Electric Company
Designer: Western Electric industrial engineers
Elton Mayo and his associates
Mayo’s Finding:
Individuals improve or modify an aspect of their behavior in response to their awareness of being observed. Behavior and sentiments are closely related.
Group influences significantly affect individual behavior.
Group standards establish individual worker output.
Money is less a factor in determining output than are group standards, group sentiments, and security.
Dale Carnegie’s Contribution
One of the core ideas in his books is that it is possible to change other people's behavior by changing one's behavior toward them.
How to Win Friends and Influence People
Maslow’s Hierarchy of Needs
Self-
actualization
Esteem
Belongingness
Security
PhysiologyFood
Achievement
Status
Friendship
Stability
Job
Friends
Pension
Base
NEEDSGeneral Examples Organizational Examples
jobChallenging
title
at work
plan
salary
Theory X and Y Douglas McGregor proposed the two different sets
of worker assumptions.
Theory X: Assumes the average worker is lazy, dislikes work and will do as little as possible.
Managers must closely supervise and control through reward and punishment.
Theory Y: Assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.
Managers should allow the worker great latitude, and create an organization to stimulate the worker.
Theory X vs Theory Y
Theory Y
Employee is not lazy
Must create work setting to build initiative
Provide authority to workers
Theory X
Employee is lazy
Managers mustclosely supervise
Create strict rules & defined rewards
Theory Z
Emphasizes: Long-term employment
Slow career development
Moderate specialization
Group decision making
Individual responsibility
Informal control over the employee
Concern for workers
Japanese Theory Z:Characteristics of a Theory Z
organisation – Ouchi
Long-term employment, often for a lifetime
Relatively slow process of evaluation and promotion
Development of company-specific skills & moderately specialised career path
Japanese Theory Z:Characteristics of a Theory Z organisation – Ouchi (contd.)
Implicit, informal control mechanisms supported by explicit, formal measures
Participative decision-making but individual ultimate responsibility
Broad concern for the welfare of subordinates & co-workers as a natural part of a working relationship & informal relationships among people
The Quantitative Approach
The quantitative approach to management, sometimes referred to as, operations research (OR) or management science.
It includes applications of statistics, optimization models, information models, and computer simulations, linear programming, and so on, which can be used to solve management problems.
In general, the quantitative approaches have contributed directly to management decision making, particularly to planning and control decisions.
Systems Approach
The system approach defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
Societies are systems and so, too, are computers, automobiles, organizations, and animal and human bodies.
An Organization Is an Open System
An organization is a system that interacts with and depends upon its environment.
- Organization’s stakeholders: any group that is affected by organizational decisions and policies.
- The manager’s job is to coordinate all stakeholders to achieve the organization’s goals.
Organizational survival often depends on successful interactions with the external environment.
The Operating Model in Organizational System
Input Transformation Output
Feedback
Contingency Approach
Assumes there is no one best way to manage. The environment impacts the organization
and managers must be flexible to react to environmental changes.
The way the organization is designed & control systems selected, depend on the environment.
Technological environments change rapidly, so must managers.
Four Popular Contingency Variables
Organization size
Routineness of task technology
Environmental uncertainty
Individual differences
MCKINSEY’S 7S FRAMEWORK
THE HARD S’sStrategy: the direction and scope of the company
over the long term.
Structure: the basic organization of the company, its departments, reporting lines, areas of expertise and responsibility (and how they inter-relate).
Systems: formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call center systems, online systems, etc).
THE SOFT S’sSkills: the capabilities and competencies that exist
within the company: what it does best.
Shared values: the values and beliefs of the company: ultimately they guide employees towards 'valued' behavior.
Staff: the company's people resources and how they are developed, trained and motivated.
Style: the leadership approach of top management and the company's overall operating approach.