Ppm module 2

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BIMTECH FOUNDATION COURSE : PPM JUNE 2012 BIMTECH FOUNDATION COURSE : PPM JUNE 2012 1 Principles and Practices of Management Dr. P. Nayak Dr. P. Nayak Professor Professor

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Transcript of Ppm module 2

  • 1. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 11 Principles and Practices of Management Dr. P. NayakDr. P. Nayak ProfessorProfessor

2. Working alonedo everythingWorking alonedo everything yourselfyourself 3. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 33 MODULE 2MODULE 2 Principles of ManagementPrinciples of Management Historical Evolution ofHistorical Evolution of Management Theory & PracticeManagement Theory & Practice Scientific Management, Fayols 14 Principles,Scientific Management, Fayols 14 Principles, Hawthorne Experiment, Systems Approach,Hawthorne Experiment, Systems Approach, Contingency ApproachContingency Approach 4. Principle?Principle? Fundamental Statement or truthFundamental Statement or truth providing a guide to thought orproviding a guide to thought or action.action. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 44 5. 08/09/1308/09/13 55 Early Thoughts about ManagementEarly Thoughts about Management Bible*Bible* Managers need to delegate authority inManagers need to delegate authority in large organizationslarge organizations Only unusual or exceptional decisionsOnly unusual or exceptional decisions should flow back up the hierarchy forshould flow back up the hierarchy for resolutionresolution Pyramid shape organization StructurePyramid shape organization Structure Example Example Roman Catholic ChurchRoman Catholic Church ------------------------ **1445 B.C1445 B.C.. 6. Early Thoughts aboutEarly Thoughts about ManagementManagement The Vedas*The Vedas* Modern Management and AncientModern Management and Ancient Vedic Management Discover :Vedic Management Discover : Eternal Vision in the ManagementEternal Vision in the Management The Fabrics of Immortality in theThe Fabrics of Immortality in the ManagementManagement -------------------------------------------------------------------------------- **1200-900 BC: Rig Veda;1200-900 BC: Rig Veda; Then around 300 B.C. the Vedas were written down inThen around 300 B.C. the Vedas were written down in the form we have them today.the form we have them today. The Vedas are the collection of mantras. The word Veda is derived from the SanskritThe Vedas are the collection of mantras. The word Veda is derived from the Sanskrit root root VIDVID which means knowledge, hence the Vedas are the which means knowledge, hence the Vedas are the books of Purebooks of Pure Knowledge.Knowledge. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 66 7. The VedasThe Vedas TheThe RigvedRigvedaa, containing hymns to be, containing hymns to be recited by therecited by the hothot;; TheThe YajurvedaYajurveda,, containing formulas to becontaining formulas to be recited by therecited by the adhvaryuadhvaryu or officiating priest;or officiating priest; TheThe SamavedaSamaveda,, containing formulas to becontaining formulas to be sung by thesung by the udgtudgt.. The fourth is theThe fourth is the AtharvavedaAtharvaveda, a collection, a collection of spells and incantations, apotropaicof spells and incantations, apotropaic charms and speculative hymns.charms and speculative hymns.[8][8] BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 77 8. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 88 Early Thoughts about ManagementEarly Thoughts about Management Sun TzuSun Tzu Another classic work that offers insights to modernAnother classic work that offers insights to modern managers ismanagers is The Art of WarThe Art of War written by the Chinesewritten by the Chinese philosopher Sun Tzu more than 2000 years ago.philosopher Sun Tzu more than 2000 years ago. Sun TzuSun Tzus dictums are as follows:s dictums are as follows: When the enemy advances, we retreat!When the enemy advances, we retreat! When the enemy halts, we harass!When the enemy halts, we harass! When the enemy seeks to avoid battle, we attack!When the enemy seeks to avoid battle, we attack! When the enemy retreats, we pursue!When the enemy retreats, we pursue! ________________________________________________________ Although these rules were meant to guide military strategy, theyAlthough these rules were meant to guide military strategy, they have been used when planning a strategy to engage businesshave been used when planning a strategy to engage business competitors .competitors . 9. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 Early Thoughts about ManagementEarly Thoughts about Management Machiavelli(1469-1527)Machiavelli(1469-1527) Early StrategistsEarly Strategists Although the adjective machiavellian is often used toAlthough the adjective machiavellian is often used to describe cunning and manipulative opportunities,describe cunning and manipulative opportunities, Machiavelli was a great believer in the virtues of aMachiavelli was a great believer in the virtues of a Republic.Republic. He described certain principles in his bookHe described certain principles in his book DiscoursesDiscourses written in 1531 which can bewritten in 1531 which can be adapted to apply to the management ofadapted to apply to the management of organizations today.organizations today. ______________________________________________ Niccol Machiavelli-Niccol Machiavelli-Niccol di Bernardo dei Machiavelli was anNiccol di Bernardo dei Machiavelli was an Italian historian, diplomat, philosopher, humanist and writer basedItalian historian, diplomat, philosopher, humanist and writer based in Florence during the Renaissancein Florence during the Renaissance.. 10. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 1010 Machiavellis ContributionsMachiavellis Contributions An organization is more stable if members haveAn organization is more stable if members have the right to express their differences and resolvethe right to express their differences and resolve their conflicts within it.their conflicts within it. While one person can begin an organization,While one person can begin an organization, it isit is lasting when it is left in the care of many andlasting when it is left in the care of many and when many desire to maintain itwhen many desire to maintain it.. A weak manager can follow a strong one, but notA weak manager can follow a strong one, but not another weak one, and maintain authority.another weak one, and maintain authority. A manager seeking to change an establishedA manager seeking to change an established organization,organization, should retain at least a shadow ofshould retain at least a shadow of the ancient customsthe ancient customs.. 11. 08/09/1308/09/13 1111 Early Thoughts about ManagementEarly Thoughts about Management Adam Smith (1776)Adam Smith (1776) Economic Advantages from Division of LaborEconomic Advantages from Division of Labor Example:Example: Pin FactoryPin Factory Henry Ford:Henry Ford: introducedintroduced assembly lineassembly line toto the manufacture of carthe manufacture of car Example:Example: General MotorsGeneral Motors can producecan produce automobiles at a lower cost by breaking jobs upautomobiles at a lower cost by breaking jobs up into a number of smaller tasks.into a number of smaller tasks. 12. 1212 Evolution ...Evolution ... School of Scientific ManagementSchool of Scientific Management Frederick W. Taylor & 4 Principles ofFrederick W. Taylor & 4 Principles of Scientific Management.Scientific Management. Henri Fayol & 14 Principles ofHenri Fayol & 14 Principles of OrganizationOrganization Henry L. Gantt, and Frank and LillianHenry L. Gantt, and Frank and Lillian GilbrethGilbreth Max Weber and BureaucracyMax Weber and Bureaucracy Ralf Davis and Rational PlanningRalf Davis and Rational Planning BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 13. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 1313 Evolution ofEvolution of Scientific Management TheoryScientific Management Theory This theory arose in part from the need toThis theory arose in part from the need to increase productivity.increase productivity. In the US especially, skilled labour was in shortIn the US especially, skilled labour was in short supply at the beginning of the 20th century.supply at the beginning of the 20th century. The only way to expand productivity was to raiseThe only way to expand productivity was to raise the efficiency of workers.the efficiency of workers. 14. 1414 Frederick W. Taylor (1856-1915)Frederick W. Taylor (1856-1915) 1911-published1911-published Principles of ScientificPrinciples of Scientific ManagementManagement Beginning of serious theory building in theBeginning of serious theory building in the field of management & organizationfield of management & organization Created the foundation for IndustrialCreated the foundation for Industrial Engineering or Production ManagementEngineering or Production Management BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 15. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 1515 Frederick W. Taylor: Four Basic Principles:Frederick W. Taylor: Four Basic Principles: 1.1.The development of a true science ofThe development of a true science of management, so that the best method formanagement, so that the best method for performing each task could be determined.performing each task could be determined. 2.2.The scientific selection of workers, so thatThe scientific selection of workers, so that each worker would be given responsibilityeach worker would be given responsibility for the task for which he or she was bestfor the task for which he or she was best suited.suited. 3.3.The scientific education and development ofThe scientific education and development of the worker.the worker. 4.4.Intimate, friendly cooperation betweenIntimate, friendly cooperation between management and labour.management and labour. 16. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 1616 Frederick W. Taylor (contd.)Frederick W. Taylor (contd.) He asserted that the success of theseHe asserted that the success of these principles requiredprinciples required a complete mentala complete mental revolutionrevolution on the part of management andon the part of management and labour.labour. He believed thatHe believed that management and labourmanagement and labour had ahad a common interest in increasingcommon interest in increasing productivityproductivity.. He also devised a compensation systemHe also devised a compensation system called thecalled the differential rate systemdifferential rate system involving the Payment of higher wages toinvolving the Payment of higher wages to more efficient workers.more efficient workers. 17. 1717 LimitationLimitation His research work focused onHis research work focused on organizing work at the lowestorganizing work at the lowest level of organization only-level of organization only- appropriate to the managerialappropriate to the managerial job of a supervisorjob of a supervisor BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 18. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 1818 Henri Fayol (1841-1925)Henri Fayol (1841-1925) The founder of theThe founder of the ClassicalClassical Management SchoolManagement School not because henot because he was the first to investigatewas the first to investigate managerial behaviour, but becausemanagerial behaviour, but because he was the first to systematize it.he was the first to systematize it. 19. 1919 Henri Fayols ContributionsHenri Fayols Contributions Fayol wrote principles ofFayol wrote principles of organisations based on hisorganisations based on his experience, at the same time Taylorexperience, at the same time Taylor wrote his research based principleswrote his research based principles Fayols principles are applicable toFayols principles are applicable to all managers where as Taylorall managers where as Taylor focused on shop level managementfocused on shop level management BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 20. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2020 FayolFayols 14 Principles of Managements 14 Principles of Management 1.1. Division of Labour:Division of Labour: The moreThe more people specialize, the more efficientlypeople specialize, the more efficiently they can perform their work, e.g.,they can perform their work, e.g., modern assembly line.modern assembly line. 2.2. AuthorityAuthority:: Besides formal authority,Besides formal authority, managers must have personalmanagers must have personal authority to compel obedience.authority to compel obedience. 3.3. DisciplineDiscipline:: Members in anMembers in an organization need to respect theorganization need to respect the rules and agreements that governrules and agreements that govern the organizationthe organization 21. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2121 4.4. Unity of CommandUnity of Command:: Each employeeEach employee must receive instructions from onlymust receive instructions from only one person.one person. 5.5. Unity of DirectionUnity of Direction:: Operations withinOperations within the organization having the samethe organization having the same objective should be directed by onlyobjective should be directed by only one manager.one manager. 6.6. Subordination of individualSubordination of individual interest to the common good.interest to the common good. 7.7. Remuneration:Remuneration: Compensation forCompensation for work done should be fair to bothwork done should be fair to both employees and employers.employees and employers. 22. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2222 8.8. Centralization:Centralization: Managers should retainManagers should retain final responsibility but at the same timefinal responsibility but at the same time give the subordinates enough authority togive the subordinates enough authority to do their jobs properly. The problem is todo their jobs properly. The problem is to find the proper degree of centralization infind the proper degree of centralization in each case.each case. 9.9. Hierarchy:Hierarchy: The line of authority in anThe line of authority in an organization runs in order of rank fromorganization runs in order of rank from top management to the lowest level oftop management to the lowest level of the enterprise.the enterprise. 10.10.Order:Order: Materials and people should be inMaterials and people should be in the right place at the right time.the right place at the right time. 23. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2323 11.11.Equity:Equity: Managers should be bothManagers should be both friendly and fair to their subordinates.friendly and fair to their subordinates. 12.12.Stability of StaffStability of Staff:: A high employeeA high employee turnover rate undermines the efficientturnover rate undermines the efficient functioning of an organizationfunctioning of an organization 13.13.InitiativeInitiative:: Subordinates should beSubordinates should be given the freedom to conceive and carrygiven the freedom to conceive and carry out their plans, even though someout their plans, even though some mistakes may result.mistakes may result. 14.14.Esprit de CorpsEsprit de Corps:: Promoting team spiritPromoting team spirit will give the organization a sense ofwill give the organization a sense of unity.unity. 24. 2424 Max Webers contribution:Max Webers contribution: BureaucracyBureaucracy German SociologistGerman Sociologist Ideal-type Organization structureIdeal-type Organization structure Characteristics of BureaucracyCharacteristics of Bureaucracy Division of laborDivision of labor A clear authority hierarchyA clear authority hierarchy Formal selection proceduresFormal selection procedures Detailed rules and regulationsDetailed rules and regulations Impersonal relationshipsImpersonal relationships It is a design prototype for theIt is a design prototype for the structure of most of todays largestructure of most of todays large organizationsorganizations BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 25. 2525 Ralph C. Daviss Contribution:Ralph C. Daviss Contribution: Rational PlanningRational Planning Structure is the logical outcome of theStructure is the logical outcome of the organizations objectives.organizations objectives. Primary objective of the business firm isPrimary objective of the business firm is economic service.economic service. It survives by providing economic value,It survives by providing economic value, generated through its activities.generated through its activities. Rational planning offers a simple and straightRational planning offers a simple and straight forward model for designing an organizationsforward model for designing an organizations objectives.objectives. The objectives, in logical fashion, determine theThe objectives, in logical fashion, determine the development of structure, flow of authority anddevelopment of structure, flow of authority and other relationships.other relationships. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 26. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2626 Henry L. Gantt (contd.)Henry L. Gantt (contd.) He also originated a charting system forHe also originated a charting system for production scheduling: theproduction scheduling: the Gantt chartGantt chart,, still in use today.still in use today. It also formed the basis for two chartingIt also formed the basis for two charting devices which were developed to assist indevices which were developed to assist in planning, managing and controllingplanning, managing and controlling complex organizations:complex organizations: Critical Path Method (CPM), originated by DuCritical Path Method (CPM), originated by Du PontPont Program Evaluation and Review TechniqueProgram Evaluation and Review Technique (PERT), developed by the Navy(PERT), developed by the Navy 27. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2727 Henry L. Gantt (1861-1919)Henry L. Gantt (1861-1919) He worked with Taylor but began to reconsiderHe worked with Taylor but began to reconsider Taylor's incentive system as having too littleTaylor's incentive system as having too little motivational impact.motivational impact. He came up with a new idea:He came up with a new idea: Every worker who finished a dayEvery worker who finished a dayss assigned workload would win a 50-assigned workload would win a 50- cent bonus.cent bonus. Further, the supervisor would earn aFurther, the supervisor would earn a bonus for each worker who reachedbonus for each worker who reached the daily standard, plus an extrathe daily standard, plus an extra bonus if all the workers reached thebonus if all the workers reached the standard.standard. 28. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 2828 The Gilbreths: Frank B. & Lillian M.The Gilbreths: Frank B. & Lillian M. Gilbreth (1868-1924 & 1878-1972)Gilbreth (1868-1924 & 1878-1972) They collaborated onThey collaborated on fatigue and motion studiesfatigue and motion studies and focussed on ways of promoting the individualand focussed on ways of promoting the individual workerworkers welfare.s welfare. To them, the ultimate aim of scientific managementTo them, the ultimate aim of scientific management was towas to help workers reach their full potential ashelp workers reach their full potential as human beingshuman beings.. In their conception, motion and fatigue wereIn their conception, motion and fatigue were intertwined - every motion that was eliminatedintertwined - every motion that was eliminated reduced fatigue.reduced fatigue. They argued that motion study would raise workerThey argued that motion study would raise worker morale because of its obvious physical benefits andmorale because of its obvious physical benefits and because it demonstrated managementbecause it demonstrated managements concern fors concern for the worker.the worker. 29. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 2929 Contributions of ScientificContributions of Scientific Management TheoryManagement Theory The efficiency techniques of scientificThe efficiency techniques of scientific management theory have beenmanagement theory have been applied to modern assembly line andapplied to modern assembly line and to many tasks in non-industrialto many tasks in non-industrial organizations (e.g., fast-food service)organizations (e.g., fast-food service) and increased their efficiency.and increased their efficiency. 30. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 3030 Limitations of Scientific Management TheoryLimitations of Scientific Management Theory Workers and unions began to oppose thisWorkers and unions began to oppose this approach because they feared that workingapproach because they feared that working harder or faster would exhaust whateverharder or faster would exhaust whatever work was available causing layoffs.work was available causing layoffs. His critics objected to theHis critics objected to the speed upspeed up conditions that placed undue pressures onconditions that placed undue pressures on employees to perform at faster and fasteremployees to perform at faster and faster levels.levels. The emphasis on productivity and byThe emphasis on productivity and by extension profitability led some managers toextension profitability led some managers to exploit both workers and customers.exploit both workers and customers. 31. 3131 EvolutionEvolution ...... Human Relation/Human Relation/BehavioralBehavioral SchoolSchool Elton Mayo and the Hawthorne StudiesElton Mayo and the Hawthorne Studies Chester Barnard and CooperativeChester Barnard and Cooperative SystemsSystems Douglas McGregor and Theory X -Douglas McGregor and Theory X - Theory YTheory Y Warren Bennis and the Death ofWarren Bennis and the Death of BureaucracyBureaucracy BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 32. 3232 Elton Mayo: Harvard PsychologistElton Mayo: Harvard Psychologist Hawthorne studies undertaken at Western ElectricHawthorne studies undertaken at Western Electric Companys Hawthorne Works PlantCompanys Hawthorne Works Plant near Chicagonear Chicago from 1924 to 1933from 1924 to 1933 examined:examined: Effect of various illumination levels on workerEffect of various illumination levels on worker productivityproductivity Employees divided into two groups (testEmployees divided into two groups (test group and control group) and the level ofgroup and control group) and the level of lighting was manipulated.lighting was manipulated. Productivity decreased when illumination intensityProductivity decreased when illumination intensity reduced to that of moonlight.reduced to that of moonlight. The results were ambiguous showing thatThe results were ambiguous showing that something other than lighting was influencingsomething other than lighting was influencing the workersthe workers performance.performance. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 33. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 3333 The Hawthorne ExperimentsThe Hawthorne Experiments Effects of a Group piecework pay system onEffects of a Group piecework pay system on group productivitygroup productivity Wages and rest periods were increased;Wages and rest periods were increased; performance tended to increase over time, but itperformance tended to increase over time, but it also rose and fell erratically.also rose and fell erratically. Wage incentive plan was less of a determiningWage incentive plan was less of a determining factor on a workers output than groupfactor on a workers output than group pressure and acceptance and the concomitantpressure and acceptance and the concomitant securitysecurity Social norms of the group were the keySocial norms of the group were the key determinants of individual work behaviordeterminants of individual work behavior 34. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 3434 The Hawthorne Experiments (contd.)The Hawthorne Experiments (contd.) It was inferred that workers who receiveIt was inferred that workers who receive special attention will perform betterspecial attention will perform better simply because they received thatsimply because they received that attention, which acted as a motivator. Aattention, which acted as a motivator. A phenomenon labeled as thephenomenon labeled as the HawthorneHawthorne effecteffect.. The researchers also concluded thatThe researchers also concluded that informal work groups - the socialinformal work groups - the social environment of employees - have aenvironment of employees - have a positive influence on productivitypositive influence on productivity.. 35. 3535 Hawthorne studiesHawthorne studies Ushered in an era of organizationalUshered in an era of organizational humanismhumanism Organization design should includeOrganization design should include effects on work groups, employeeeffects on work groups, employee attitudes, and manager-employeeattitudes, and manager-employee relationships.relationships. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 36. 3636 Chester Barnard:Chester Barnard: Cooperative SystemsCooperative Systems Merged the ideas of Taylor, Fayol andMerged the ideas of Taylor, Fayol and Weber with the results from theWeber with the results from the Hawthorne studies: ConclusionHawthorne studies: Conclusion Organizations are cooperativeOrganizations are cooperative systemssystems (His book:(His book:Functions of the ExecutivesFunctions of the Executives)) Challenged the classical view thatChallenged the classical view that authority flowed from the top downauthority flowed from the top down by arguing thatby arguing that authority should beauthority should be defined in terms of the response ofdefined in terms of the response of the subordinatethe subordinate..BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 37. 3737 Chester Barnard:Chester Barnard: Cooperative SystemsCooperative Systems Introduced the role of informalIntroduced the role of informal organization to organization theoryorganization to organization theory Major role of the manager to facilitateMajor role of the manager to facilitate communication and to stimulatecommunication and to stimulate subordinate to high levels of effort.subordinate to high levels of effort. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 38. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 3838 Chester I. Barnard (1886-1961)Chester I. Barnard (1886-1961) According to him, people come together in formalAccording to him, people come together in formal organizations to achieve ends they cannotorganizations to achieve ends they cannot accomplish working alone.accomplish working alone. An enterprise can operate efficiently and survive onlyAn enterprise can operate efficiently and survive only when the organizationwhen the organizations goals are kept in balances goals are kept in balance with the aims and needs of the individuals workingwith the aims and needs of the individuals working for it.for it. His recognition of the importance and universality ofHis recognition of the importance and universality of thethe informal organizationinformal organization was a major contributionwas a major contribution to management thought.to management thought. He proposed the concept ofHe proposed the concept of zone of indifferencezone of indifference,, i.e., what the employee would do withouti.e., what the employee would do without questioning the managerquestioning the managers authority. The mores authority. The more activities that fell within this, the smoother and moreactivities that fell within this, the smoother and more cooperative an organization would be.cooperative an organization would be. 39. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 3939 Mary Parker Follett (1868-1933Mary Parker Follett (1868-1933)) She introduced many new elements in theShe introduced many new elements in the classical school in the area of humanclassical school in the area of human relations and organization structure.relations and organization structure. She called managementShe called management the art of gettingthe art of getting things done through peoplethings done through people.. She was a great believer in the power of theShe was a great believer in the power of the group, where individuals could combine theirgroup, where individuals could combine their diverse talents into something bigger.diverse talents into something bigger. Her holistic model of control took intoHer holistic model of control took into account not just individuals and groups, butaccount not just individuals and groups, but the effects of environmental factors also.the effects of environmental factors also. 40. 4040 Douglas Mc Gregor: Theory X & YDouglas Mc Gregor: Theory X & Y Theory X:Theory X: 4 Assumptions by Managers4 Assumptions by Managers 1.1. Employees inherently dislike work, and whenEmployees inherently dislike work, and when ever possible will attempt to avoid it.ever possible will attempt to avoid it. 2.2. They must be coerced, controlled orThey must be coerced, controlled or threatened with punishment to achievethreatened with punishment to achieve desired goals.desired goals. 3.3. They will shirk responsibilities and seek formalThey will shirk responsibilities and seek formal direction whenever possible.direction whenever possible. 4.4. Most workers place security above allMost workers place security above all other factors associated with work andother factors associated with work and will display little ambition.will display little ambition. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 41. 4141 Douglas Mc Gregor: Theory X-Theory YDouglas Mc Gregor: Theory X-Theory Y Theory YTheory Y:: 4 Assumptions:4 Assumptions: 1.1. Employees can view work asEmployees can view work as being as natural as rest or play.being as natural as rest or play. 2.2. They will exercise self-directionThey will exercise self-direction and self-control if they areand self-control if they are committed to the objectivescommitted to the objectives 3.3. The average person can learn toThe average person can learn to accept responsibilityaccept responsibility 4.4. Creativity-ability to make goodCreativity-ability to make good decisions-is widely disperseddecisions-is widely dispersed through out the populationthrough out the population BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 42. 4242 Warren Bennis:Warren Bennis: Death of BureaucracyDeath of Bureaucracy Strong humanistic ThemeStrong humanistic Theme Replaced Bureaucracy byReplaced Bureaucracy by decentralized and democratic structure,decentralized and democratic structure, flexible group andflexible group and influence based on authority-expertiseinfluence based on authority-expertise BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 43. 4343 ......EvolutionEvolution Contingency MovementContingency Movement Herbert Simon and Principles BacklashHerbert Simon and Principles Backlash Katz and Kahns EnvironmentalKatz and Kahns Environmental PerspectivePerspective BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 44. 4444 Contingency MovementContingency Movement A synthesis of the conflictA synthesis of the conflict between Classical school andbetween Classical school and Human Relation SchoolHuman Relation School Rationality basedRationality based Theorists argued that properly alignedTheorists argued that properly aligned structure to its contingency variablesstructure to its contingency variables would facilitate the achievement of thewould facilitate the achievement of the organization goals.organization goals. Implementation of the wrong structureImplementation of the wrong structure could threaten the organizationscould threaten the organizations survival.survival. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 45. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 4545 The Contingency ApproachThe Contingency Approach Attainment of organizational goalsAttainment of organizational goals might vary in different types ofmight vary in different types of situations or circumstances; alsosituations or circumstances; also called thecalled the situational approachsituational approach.. Organizations-as vehicles forOrganizations-as vehicles for achieving goalsachieving goals Developed by managers, consultantsDeveloped by managers, consultants and researchers who tried to applyand researchers who tried to apply the concepts of the major schools tothe concepts of the major schools to real-life situationsreal-life situations 46. 4646 Herbert Simons contributionHerbert Simons contribution In 1940 he recognized thatIn 1940 he recognized that contingency approach would gain itscontingency approach would gain its momentum in the 1960s.momentum in the 1960s. He argued that organization theoryHe argued that organization theory needed to go beyond superficial andneeded to go beyond superficial and oversimplified principles to a study ofoversimplified principles to a study of the conditions under which competingthe conditions under which competing principles were applicableprinciples were applicable BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 47. 4747 Daniel Katz and Robert KahnDaniel Katz and Robert Kahn Promoted Open system perspective toPromoted Open system perspective to organization theory in their book:organization theory in their book: The Social Psychology of OrganizationsThe Social Psychology of Organizations Environment-Structure RelationshipEnvironment-Structure Relationship BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 48. BIMTECH FOUNDATION COURSE : PPM JUNE 2012BIMTECH FOUNDATION COURSE : PPM JUNE 2012 4848 Recent Developments in ManagementRecent Developments in Management TheoryTheory The Systems ApproachThe Systems Approach Organization as a unified, directed systemOrganization as a unified, directed system of interrelated parts.of interrelated parts. The activity of any segment of anThe activity of any segment of an organization affects, in varying degrees,organization affects, in varying degrees, the activity of every other segment.the activity of every other segment. Managers cannot function wholly withinManagers cannot function wholly within the confines of the traditional organizationthe confines of the traditional organization chart. They must mesh their departmentchart. They must mesh their department with the whole enterprisewith the whole enterprise 49. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 4949 Some Key Concepts of Systems Approach:Some Key Concepts of Systems Approach: SubsystemsSubsystems:: Parts making up the wholeParts making up the whole systemsystem SynergySynergy:: Situation in which the whole isSituation in which the whole is greater than its parts. The departments thatgreater than its parts. The departments that interact cooperatively are more productive thaninteract cooperatively are more productive than they would be if they operated in isolation.they would be if they operated in isolation. System boundarySystem boundary:: The boundary thatThe boundary that separates each system from its environment.separates each system from its environment. FlowFlow:: Components such as information,Components such as information, material and energy that enter / leave amaterial and energy that enter / leave a system.system. FeedbackFeedback:: The part of system control in whichThe part of system control in which the results of actions are returned to thethe results of actions are returned to the individual allowing work procedures to beindividual allowing work procedures to be analyzed and correctedanalyzed and corrected 50. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 5050 Dynamic Engagement ApproachDynamic Engagement Approach It emphasizes the intensity of modernIt emphasizes the intensity of modern management relationships and themanagement relationships and the intensity of time pressures that governintensity of time pressures that govern these relationships.these relationships. Todays most successful managers focusTodays most successful managers focus on human relationships and quickly adjuston human relationships and quickly adjust to changing conditions over time.to changing conditions over time. 51. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 5151 Dynamic Engagement ApproachDynamic Engagement Approach New Organizational EnvironmentsNew Organizational Environments:: AnAn organizationorganizations environment is as environment is a complex dynamic web of peoplecomplex dynamic web of people interacting with each otherinteracting with each other.. Thus,Thus, managers must not only pay attention to theirmanagers must not only pay attention to their own concerns but also understand what isown concerns but also understand what is important to other managers both within theirimportant to other managers both within their organization and at other organizations.organization and at other organizations. Ethics and Social ResponsibilityEthics and Social Responsibility:: ThisThis approach moves ethics from the fringe ofapproach moves ethics from the fringe of management theory to the heart of it.management theory to the heart of it. 52. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 5252 Globalization and ManagementGlobalization and Management:: Managers facing the 21st century mustManagers facing the 21st century must think of themselves as global citizens.think of themselves as global citizens. It is aIt is a borderlessborderless world where managersworld where managers treat all customers as equidistant fromtreat all customers as equidistant from their organizationstheir organizations Cultures and MulticulturalismCultures and Multiculturalism:: VariousVarious perspectives and values that people ofperspectives and values that people of different cultural backgrounds bring to theirdifferent cultural backgrounds bring to their organizations are not only a fact of life but aorganizations are not only a fact of life but a significant source of contributionssignificant source of contributions 53. BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 5353 Inventing & Reinventing OrganizationsInventing & Reinventing Organizations:: Ways to unleash the creative potential ofWays to unleash the creative potential of their employeestheir employees Reengineering the corporationReengineering the corporation, i.e. when, i.e. when an organization conducts a significantan organization conducts a significant reassessment of what it is all about.reassessment of what it is all about. Quality:Quality: TQM should be in every managerTQM should be in every managerss vocabularyvocabulary 54. Thank youThank you BIMTECH FOUNDATION COURSE : PPMBIMTECH FOUNDATION COURSE : PPM JUNE 2012JUNE 2012 5454