Evolution of management thought
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Transcript of Evolution of management thought
Evolution of Management Thought
A structured social system consisting of groups of individuals working together to meet some agreed-on objectives
Organization
Early Practices-Adam Smith
•Scottish philosopher
•Wrote ‘Causes of Wealth of Nations’
•Proposed ‘Division of Labour’
Adam Smith, 18th century economist, found firms manufactured pins in two ways: Craft -- each worker did all steps. Factory -- each worker specialized in one step.
Smith found that the factory method had much higher productivity. Each worker became very skilled at one, specific
task.Breaking down the total job allowed for the
division of labor.
Job specializationJob specialization
Charles Babbage•British Mathematics professor
•Wrote ‘On the Economy of Machinery and Manufactures’
•Proposed advantages of division of labour:
•Reduces the time needed for learning a job
•Reduces waste of material
•Attainment of high skill levels
•Matching skills and abilities with jobs
Robert OwenWelsh entrepreneur
Recognised how factory work was demeaning to employees
Scientific Management- Frederick TaylorDevelop a science for each element of an
individual’s workScientifically select, train, teach and
develop workerCooperation with workersDivide work responsibility equally
between management and workers
The Classical Era
Frank 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.
Gilbreths
- Study conducted in Hawthorne plant of General Electric Company, Chicago
- Mayo, Roethlisberger, Dickson, Whitehead
Illumination experiment (1924-27)Relay room experiment (1927-28)Mass interviewing (1928-30)Bank wiring observation (1931-32)
Hawthorne studies
Social factors in outputGroup InfluenceConflictsLeadershipSupervisionCommunication
Implications of Hawthorne Experiment
Administrative TheoryFrench industrialist Henry FayolProposed that a manager plans, organises,
directs, controls and coordinates14 principles of management including
division of labour, authority, scalar chain, unity of command, initiative
Classical Organisation Theory
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest to the general interest
7. Remuneration
Fayol’s 14 principles
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability and tenure
13. Initiative
14. Esprit de corps
Fayol’s 14 principles
Max WeberProposed Structural Theory
Described bureaucratic structure
• Division of labour
• clearly defined hierarchy,
• detailed rules and regulations and
• impersonal relationships
Formal rules regulationsDivision of labourHierarchical structureAuthority structureLifelong commitment
Social Man Theory
Mary Parker Follett
Emphasised on group ethics
Manager must coordinate group efforts
Chester BarnardSocial Systems Theory
Organisations made up of people who have interacting social relationship
They communicate
Success depends on maintaining good relations
Described organisations as a complex network of decisional process
Decision process comprises: i) intelligent activity ii) design activity iii) choice activity
Bounded rationalityAdministrative man : simplification,
satisficing approachOrgaisational Communication
Herbert Simon
Nature of management as innovative and creative
Manager has to act as administrator, entrepreneur, set objectives etc.
Organisation structure to facilitate effective functioning
MBO
Peter Drucker
Structuring of an organization into departments or units on the basis of type of work performed
A functional manager is a person who has management authority over an organizational unit - such as a department - within a business or company
Functional Management
AuthoritativeParticipativeFree-reinPseudo autocratic
Management Styles
Leaner organisationsOutsourcingContingent workforce
New forms of organisation
Virtual corporationsHighly flexible, temporary organisations formed by a group of companies to exploit a specific opportunity
Socio-technical approachManagement scienceHuman relations approachSystems approachContingency approach
Approach
Considers relationships inside and outside the organization.The environment consists of forces,
conditions, and influences outside the organization.
Systems theory considers the impact of stages:Input: acquire external resources.Conversion: inputs are processed into goods
and services.Output: finished goods are released into the
environment.
Systems approach
An open system interacts with the environment. A closed system is self-contained.
Systems approach
Uses rigorous quantitative techniques to maximize resources.Quantitative management: utilizes linear
programming, modeling, simulation systems.Operations management: techniques to
analyze all aspects of the production system.Total Quality Management (TQM): focuses on
improved quality.Management Information Systems (MIS):
provides information about the organization.
Management Science
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.
Contingency Theory