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Principles of Management
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To Appreciate our Subject:
To appreciate what Management
is today, we need to look back at
its past...
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Exhibit 2.1
Development of Major ManagementTheories
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Historical Background Of
Management Significant Pre-Twentieth-Century Events
Wealth of Nations-Adam Smith
division of labor- breakdown of jobs into narrowand repetitive tasks increased productivity
Hierarchical control and managementmanagers think and workers work
Industrial Revolution
substitution of machine power for human power
large organizations required formal management
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Scientific Management
F.W. Taylor- Principles of ScientificManagement use of scientific methods to define the one best way for a job
to be done
perspective of improving the productivity and efficiency ofmanual workers
Having a standardized method of doing the job.
Providing an economic incentive to the worker.
Economic Man
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4 Principles of Scientific
Management (1911) Develop a science
of work
Divide andstandardize jobs
Train workers & $$$
Support workers byplanning their work
E.g. assembly-line
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General Administrative Theorists
Henri Fayol
concerned with making the overall
organization more effective
developed theories of what constitutedgood management practice
proposed a universal set of managementfunctions: plan, Organize, Control, Lead
publishedprinciples of management
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Exhibit 2.3
Fayols 14 Principles of Management
1. Division of work.
2. Authority.
3. Discipline.
4. Unity of command.
5. Unity of direction.
6. Subordination of
individual interestto the interests of
the organization.
7. Remuneration.
8. Centralization.
9. Scalar chain.
10. Order.
11. Equity.
12. Stability of tenure
of personnel.
13. Initiative.
14. Esprit de corps.
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General Administrative Theorists
(cont.) Max Weber
developed a theory of authority
structures and relations Bureaucracy- ideal type of
organization
division of labor clearly defined hierarchy
detailed rules and regulations
impersonal relationships
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EXHIBIT 2.4: WEBERS IDEAL
BUREAUCRACY
2-12
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Quantitative Approach To
Management Operations Research (Management Science)
use of quantitative techniques to improve
decision making applications of statistics
optimization models
computer simulations of management
activities Linear programming- improves resource
allocation decisions
Critical-path scheduling analysis- improves
work scheduling
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Behavioral School
study of the actions of people at work
early advocates
late 1800s and early 1900sbelieved that people were the most
important asset of the organization
ideas provided the basis for a variety ofhuman resource management programs
employee selection
employee motivation
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Hawthorne Studies
started in 1924 at Western Electric Company
began with illumination studies
intensity of illumination not related toproductivity
Elton Mayo- studies of job design
revealed the importance of social norms asdeterminants of individual work behavior
changed the dominant view that employees were
no different from any other machines
Organizational Behavior (cont.)
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Hawthorne Studies
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The Systems ApproachSystem Defined
A set of interrelated and interdependent partsarranged in a manner that produces a unified whole.
Basic Types of Systems Closed systems
Are not influenced by and do not interact with theirenvironment (all system input and output is internal).
Open systems Dynamically interact to their environments by taking in inputs
and transforming them into outputs that are distributed intotheir environments.
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ABC Organization
Organizational task
100 marbles (20 are
red) Paddle with 50 holes
Performance indicatorminimum red marblescollected
Hire and fire decisionbased on
performance
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Performance Results
Day1 Day2 Day3 Day4 Total
Mary 9 8 16 6 39
Bruce 7 8 14 12 41
Mike 12 12 7 5 36
Sue 7 8 13 10 38
Tony 8 7 5 13 33Me 9 10 6 6 31
Total 52 53 61 52 218
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Performance Results
Day1 Day2 Day3 Day4 Total
Mary 9 8 16 6 39 Fired
Bruce 7 8 14 12 41 Fired
Mike 12 12 7 5 36
Sue 7 8 13 10 38 Fired
Tony 8 7 5 13 33Me 9 10 6 6 31
Total 52 53 61 52 218
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Organizations Process
Order Entry
Credit Checking
Inventory Allocation
Packing
Shipping
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Exhibit 2.6
The Organization as an OpenSystem
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Implications of the Systems
ApproachCoordination of the organizations parts isessential for proper functioning of the
entire organization.The key to performance is to have goodprocess.
Organizations are not self-contained and,therefore, must adapt to changes in theirexternal environment.
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The Contingency Approach
Contingency Approach Defined
Also sometimes called the situational approach.
There is no one universally applicable set ofmanagement principles (rules) by which tomanage organizations.
Organizations are individually different, facedifferent situations (contingency variables),and require different ways of managing.
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Exhibit 2.7
Popular Contingency Variables
Organization size
Routineness of task technology
Environmental uncertainty Individual differences
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V.S.
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Total Quality Management
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US Companies World Market Share
0
1020
30
40
50
6070
80
90
100
Cameras Copiers VTRs Autos TVs
1970
1985
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Xerox Return of Assets (ROA)
26
3
17
73 8479
Business
Success
Crisis of
SurvivalOperations
Deployment
Years
%
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Rule 1:Quality, Quality, Quality
Rule 2:System, System, System
Rule 3:Improvement,Improvement, Improvement
Rule 4:Right the First Time
Rule 5:Taking Full Responsibility
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Management Paradigm Shift
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Management Paradigm Shift
From professional standards to meetingcustomers expectation
Individual to systems and processes
Department to multi-disciplinary team
Reactive to pro-active CQI
Experience to clinical protocol
Supervisor oriented to empowerment
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And where do we go fromhere?
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The drivers of change Technology
Leverage capability
Change the nature of work and relations
Globalization Increase competition Increase choice/combination of resources & customers
Deregulation and democratization Increase customer choice
Politicize of business & management Rights of employees
Rights of customers and citizens
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Whatre changed in management practices
Organization structure - flatter, smaller, team andnetworked
Recruitment - Staff recruited for contribution to thecompany rather than doing a job
DevelopmentSpecialization AND transferable skills ANDcontinuous learning are required
MotivationFocus on intrinsic motivation & developmentof competencies
Supervision - Staff as self-monitoring professionals, Bossas coach & resource person
Careers - Spiral & boundaryless
The success formula = (#) * 2 ($) * 3 (output) !
New mindsetfor work and management
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How to manage ?
Planning
Organizing
Leading
Controlling
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The Great Debate! Is Management an
Art ? Is Management a
Science?
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