Lecture 2 - The Evolution of Management - September 6 - 11 2010

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MAN1006: Introduction to Management(Groups~BBA1)

Lecture 2 – The Evolution of Management Lecturer: Oswy Gayle

Monday September 6, 2010 (1:00-3:00 p.m.)

University of Technology, JamaicaSchool of Business Administration

Module Resource

• What to do if you are not able to access the materials?

Speak to the SCIT Technicians

Test Alert !• Test # 1 is coming to a lecture theater

near you – start preparing

Format

• 35 Multiple choice

• 5 True or False

• Four (4) Essays to choose one (1)

Recap of Lecture 1

The Management Process and the Changing Paradigm of Management

Recap -Context• Management involves several process,

functions, skills and roles in order to be effective and efficient in any project/activity/job or business.

• Businesses all satisfy economic needs by offering goods and services to the public at a premium

Recap• There are driving forces in and outside the

organizations which are forcing it to manage more effectively

• Successful organizations don’t just happen... they are managed to be that way!

• Management is about coping with change and therefore, it is the process of tying the organization together so that it achieves its goals and objectives.

The Changing Dynamics of Organizations

Driving Forces1. Telecommunications2. Diversity of Workers3. Public consciousness4. Global marketplace5. Community of stakeholders6. The pace of knowledge

Driving Forces1. Telecommunications2. Diversity of Workers3. Public consciousness4. Global marketplace5. Community of stakeholders6. The pace of knowledge

What is Management? (cont’d) What is Management? (cont’d)

3. Management is the process of creating an environment through which order, efficiency, and effectiveness are achieved through appropriate planning, leadership, organizing and controlling so as to accomplish organizational goals and respond to its changing environments. (Gayle, 2009)

• There are four main functions of management

• Managers make decision and therefore need several skills to be able to do their roles at all levels of the organizational hierarchy.

• As our environment changes, so too the nature of Management which ultimately creates a New Workplace

Recap

Lecture 2 – The Evolution of Management -

Monday September 6, 2010

1. Context of the Lecture

2. Understand how historical forces influence the practice of management

3. Components of the classical and humanistic perspectives

4. Look at the management science perspective

5. A look at the systems theory, the contingency view and total quality management

6. The learning organization and the technology driven workplace

7. The Technology Driven Workplace and its impact on management

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Context• We are a product of history – our societies,

developments etc.

• If the Energies of the Universe is our first parent, then History is our second parent.

• We emerge from history – actually everything does. We are History Makers.

Context• The nature of business and management is

changing rapidly – A diskette is now a history lesson

• We should not forget the historical contexts that brought us where we are today.

• An understanding of past events not only impact our way going forward, but also, is the very foundation on which new management concepts are built.

The Importance of Historical Perspective

• Provides a context of the environment (opportunities and Problems)

• Helps us to look at the future through the lenses of the past – For the understanding of the present and future

• Develops an understanding of societal impacts and track changes via history

The Importance of Historical Perspective

(cont’d)

• Learn from others mistakes and use the best practices

• Achieves strategic thinking

• Improves conceptual skills

Where are we now? What next?

• How did we get to where we are today?

The Story before the Story

• Garden of Eden - ????????????????

• The Roman Empire - 27 BC to AD 235

• 3000 B.C.E – Sumerians and

Egyptians - The first government organizations

The Pyramid Era

• Some form of Management must have taken place• The Egyptian Pyramids are the oldest and only

surviving member of the ancient wonders. • Today there are about eighty (80) surviving

pyramids in Egypt, the three largest and best preserved of these being at Giza, near the city of Cairo.

• They were built at the beginning of what we call the Old Kingdom, starting around 2560BC (over 4,500 years ago!)

The Spread of Economic Prosperity

• 1400 - 1600 C.E. - The Renaissance Period

• 1560-1791 - Reformation or the French Revolution

• 1619 – 1838 - Slavery

• Mid-1700 – the world was relatively poor, with overall very low standards of living

The Spread of Economic Prosperity

• Up to 1800 most of the world was relatively even in terms of per capita income

• Britain used to get technology from China

• Then came the Industrial Revolution –

Why Britain/Europe?

• 1820 – The biggest gap of economic growth

– British society was relatively open

– Political liberty

– Became the leading centre for scientific revolution

– Geographical advantage to the rest of Europe– Remained Sovereign – Coal became a driver of economic prosperity

The Spread of Economic Prosperity

• And by 1850, England had become an economic titan.

• Its goal was to supply two-thirds of the globe with cotton spun, dyed, and woven in the industrial centers of northern England.

• England proudly proclaimed itself to be the "Workshop of the World," a position held until the end of the 19th century when Germany, Japan and United States overtook it.

The Spread of Economic Prosperity in England

• Scientific advances were dramatic

• New technologies coupled with coal power and market forces created the industrial revolution

• Now this changed the way people think, lived, worked and formed families etc.

• This level of technology started to spread abroad creating a wave of change all over the world (British-led Globalization)

2.Understand how historical forces influence the practice of management

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So, how did historical forces influenced the

practice of management ?

What (forces) influenced management thought?

Main forces

• Social

• Political

• Economic

Sub-force» Knowledge

What (forces) influenced management thought?

1. Social – aspects of culture that guides our behaviour (Generation X and Y)

Questions: What do people value? What do people need? What are the standards of behaviour?

Depression Era (up to 1945) [now age 65 and over]– Baby boomers (1946 to 1964 ) [now age 46 - 64]– Generation X (1965 to 1979) [now age 31 – 45)– Generation Y (1980 and 1984) [now age 26 - 30]

Generation Y (1985 – 1990) [ Now age 20 – 25]– Generation Z (1991 and before 2004) [now age 6 - 19]

What influences management thought? Gen X and Y Differences (cont’d)

a. Autonomy• X - give them direction, and then leave them to it • Y - questions, questions, questions

b. Loyalty• X - they are committed as everyone else working

there • Y - already working out their exit strategy

What influences management thought? (cont’d)

2. Political –influence of politics and legal institutions on people and organization

• The formation of the UN, IMF

• The need for self-government, property rights, contract rights, and justice

• The spread of capitalism has altered the business landscape Worldwide

• The growing interdependence amongst countries

What influences management thought? (cont’d)

3. Economic – availability, production and distribution of resources (now about ideas, information and knowledge)

• Formation of the WTO and other such agreements

• The economy of the United States and other developed countries is shifting with the sources of wealth, distribution and decision-making.

• The new emerging economy is based largely on ideas, information, and knowledge; supply chains have been revolutionized by digital technology.

What Evolution?

• What are we talking about?

• Evolution - how anything moves from one period or state to another and the fusion of those periods, states, ideas, thoughts, perspectives etc.

• For example - ska, rock steady, reggae, dancehall, what ever we have today.

Management Perspectives Over Time – The Story

1930Humanistic Perspective

19901890Classical 1940

1950

2000Systems Theory

2000

2010The Technology-Driven Workplace

1990

2010The Learning Organization

1970Contingency Views

2000

1980Total Quality Management

2000

1940Management Science Perspective

1990

20101870

1.Components of the classical and humanistic perspectives

2.Look at the management science perspectiveL E

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Theories and Perspectives that Contributed to the Field of Management

•A. Classical Perspective

• B. Humanistic Perspective

• C. Management Science Perspective

The Development of Management Thought

A.Classical Perspective – formal study of management began here

1800s• Industrial revolution (Europe)– The railways led to

economic change • Factory System (From Craftsmen to Machines)• Problems in the factory - tooling, training, structures, • Managers forced to find solutions• View Organization as a machine – efficiency –

bureaucracy.

Why the name classical?

A.Classical Perspective or Scientific managers?

B.Prescriptive nature of organizations – i.e. –

what is good for organizations

The Development of Management Thought

Classical Perspective - This perspective

contains three sub fields, each with a slightly

different emphasis:

A. Scientific management,

B. Bureaucratic organizations,

C. Administrative principles.

Contributors

• Many persons contributed to the development of management

• Practicing managers (Practitioners)– Experiences, theories and reflections

• Social Scientists (Researchers/Academics)

Taylorism• Scientific Management - this is

where some -one up there controls the lesser beings down there. Taylor was not for this view.

Classical Theory -

1. Scientific Management - Frederick W. Taylor (1856-1915) - American

• Scientific management - so named because the first set of managers were Engineers not trained managers

• Taylor turned to "science" as a solution to the inefficiencies and injustices of the period (Industrial Revolution). His idea of breaking a complex task into a sequence of simple subtasks was well received

• He suggested that they worked according to scientific laws. Management must takeover and perform much of the work which is now left to the men; almost every act of the workman should be preceded by one or more preparatory acts of the management which enable him to do his work better and quicker than he otherwise could.

Scientific Management (cont’d)• Taylor suggested decisions based on rules of thumb

and tradition be replaced with precise work procedures developed after careful study of the situation.

• In 1898, Taylor used the unloading of iron from rail cars and reloading finished steel to calculate the correct movements and tools needed to increase productivity.

• Taylor worked out an incentive system that paid each man $1.85 instead of $1.15 a day for meeting the new standard; productivity shot up.

Classical Theory -

Scientific Management - Frederick W. Taylor (1856-1915)

• Taylor further believed that the workload would be evenly shared between the workers and management with management performing the science and instruction and the workers performing the labor, each group doing "the work for which it was best suited."

• Develops standards for a job, selects workers with appropriate abilities, trains workers, supports workers and eliminates interruptions, and provides wage incentives. (more tons per day)

• Because scientific management ignored the social context and workers’ needs, it led to increased conflict and clashes between management and employees.

Scientific Management

Contributions• Demonstrated the importance of compensation for performance.• Initiated the careful study of tasks and jobs.• Demonstrated the importance of personnel and their training.

Criticisms• Did not appreciate social context of work and higher needs of

workers.• Did not acknowledge variance among individuals.• Tended to regard workers as uninformed and ignored their ideas

2. Bureaucratic Organizations

• Max Weber (1864-1920) - Germany• Published the theory of Social and

Economic Organizations

• A systematic approach developed in Europe that looked at the organization as a whole

• Max Weber (1864-1920) - introduced management on an impersonal, rational basis through defined authority and responsibility, formal recordkeeping, and separation of management and ownership.

• Weber’s organization was the bureaucracy: division of labor, hierarchy, rules and procedures, written decisions and promotion based on technical qualifications

3. Administrative principles

Contributors - Henri Fayol (1841-1925), Mary Parker, and Chester I. Barnard

•Henri Fayol (1841-1925) - French Engineer

•Focused on the total organization rather than the individual worker, define the management functions of planning, organizing, commanding (Leading), coordinating, and controlling.

3. Administrative principles

Contributors - Mary Parker Follett (1868 – 1993), and Chester I. Barnard

•Mary Parker Follett (American/Philosopher/management theorist) - Importance of common super-ordinate goals for reducing conflict in organizations and leadership

•Chester I. Barnard - Informal Organization; employees were not machines and that informal relationships are powerful forces that can help the organization.

Theories and Perspectives that Contributed to the Field of Management

• A. Classical Perspective

•B. Humanistic Perspective

• C. Management Science Perspective

Management Perspectives Over Time – The Story

1930Humanistic Perspective

19901890Classical 1940

1950

2000Systems Theory

2000

2010The Technology-Driven Workplace

1990

2010The Learning Organization

1970Contingency Views

2000

1980Total Quality Management

2000

1940Management Science Perspective

1990

20101870

The Development of Management –

B. Humanistic Theory

A group of perspectives that emphasized the understanding of human behavior, needs, and attitudes in the workplace contextSub-fields1. Human Relations Movement

2. Human Resources Perspective

3. Behavioral Sciences Approach

The Development of Management –

B. Humanistic Theory

Professor Elton Mayo (American) - • Human Relations Movement - Emphasized that

satisfaction of employees’ basic needs is the key to increased worker productivity

The Hawthorne Studies - The tests were to determine the effect of illumination on output; five tests pointed to the importance of factors other than illumination in affecting productivity.

The Development of Management –

B. Humanistic Theory

Human Relations Movement• Early interpretations agreed that human relations

not money caused increased output. Workers performed better when managers treated them positively.

• New data showed that money mattered, but productivity increased because of increased feelings of importance and group pride felt when selected for the project.

The Development of Management –

B. Humanistic Theory

2. Human Resources Perspective –

• Maintained an interest in worker participation and considerate leadership

• Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential (Abraham Maslow & Douglas McGregory)

Physiological

Safety

Belongingness

Esteem

Self-actualization

Abraham Maslow’s Hierarchy of Needs

Based on needs satisfaction

1908-1970

• Dislike work –will avoid it

• Must be coerced, controlled, directed, or threatened with punishment

• Prefer direction, avoid responsibility, little ambition, want security

• Do not dislike work• Self direction and self control• Seek responsibility• Imagination, creativity widely

distributed• Intellectual potential only

partially utilized

Douglas McGregor Theory X & Y

Theory X AssumptionsTheory Y Assumptions

1906-1964

The Development of Management –

B. Humanistic Theory

3. Behavioral Sciences Approach –

● Applies social science in an organizational context; Draws from economics, psychology, sociology, anthropology, and other disciplines;

● Doing research to find the best interview questions and best tests to select workers are examples

● The Field of Organizational Development was born

Theories and Perspectives that Contributed to the Field of Management

•A. Classical Perspective

• B. Humanistic Perspective

• C. Management Science Perspective

Management Perspectives Over Time – The Story

1930Humanistic Perspective

19901890Classical 1940

1950

2000Systems Theory

2000

2010The Technology-Driven Workplace

1990

2010The Learning Organization

1970Contingency Views

2000

1980Total Quality Management

2000

1940Management Science Perspective

1990

20101870

3. Management Science Perspective

• Emerged after WW II

• The frequency with which material and people had to move from place to place gave rise to several problems and opportunities after the war

• New Breed of Managers - former war-fighting personnel were used to manage businesses using those same techniques used in army combats

3. Management Science Perspective

• And so the application of mathematics, statistics, and other quantitative techniques to managerial problems grew.Operations Research – mathematical modelingOperations Management – specializes in physical

production of goods or servicesInformation Technology – reflected in management

information systems

The real birth of American-led Globalization or at least an increase

Recent Historical Trends

1. Systems Theory -

2. Contingency View -

3. Total Quality Management (TQM)

Recent Historical Trends

1. Systems Theory - A system is a set of interrelated parts that function as a whole to achieve a common purpose.

• A system functions by taking inputs from the external environment, transforming them, and then discharging the transformed input back into the environment.

Recent Historical Trends

1. Systems Theory - • 1960s – a group of theorists challenged the dominance of

psychology and human relations• The claim was that organizations are more than just about

human behaviour but a complex system of people, technology and tasks.

• The arguments were that human is not the only important considerations in achieving organizational effectiveness.

Systems View of Organizations

Exhibit 2.5, p. 58

2. Contingency View of Management

Exhibit 2.6, p. 59

• Grew out of the systems theory of management

• Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

•Management’s job is to search for important contingencies to include industry, technology, the environment, and international cultures

2. Contingency View of Management

Exhibit 2.6, p. 59

• It Depends on the following;

1. The external environment

2. Technological factors

3. Human skills and motivation

2. Contingency View of Management

1.The learning organization and the technology driven workplace

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3. Total Quality Management (TQM)

• TQM focuses on managing the total organization to deliver quality to customers.

• The ideas of W. Edwards Deming, "father of the quality movement” were scoffed at in America but embraced in Japanese which became an industrial world power.

What is a Learning Organization?

• One of the greatest challenges a current manager faces is to get employees to move with the change of time.

• And so the learning organization was out next stop, - A learning Organization is an organization in which everyone is engaged in identifying and solving problems, enabling the organization to continuously improve, and increase its capability

Elements of a Learning Organization

Learning Organization

Open Information

Empowered Employees

Team-Based Structure

The Technology Driven Workplace and its impact on

management

• What we have now is a technology invasion

• The online syndrome• Technology creating new technologies• New types of jobs been created• More jobs are now more “Knowledge

work”

Types of E-Commerce

Business-to-Consumer (B2C)Selling Products and

Services Online

Business-to-Business (B2B) Transactions Between

Organizations

Consumer-to-Consumer (C2C)

Electronic Markets Created by Web-Based

Intermediaries

Management Perspectives Over Time – The Story

1930Humanistic Perspective

19901890Classical 1940

1950

2000Systems Theory

2000

2010The Technology-Driven Workplace

1990

2010The Learning Organization

1970Contingency Views

2000

1980Total Quality Management

2000

1940Management Science Perspective

1990

20101870

Rap up

• We are history makers; we are living histories

• As we speak the world is changing

• An understanding of the past helps to assess what worked, how far we’ve come and for a good predictive future

• Studying the past contributes to understanding the present and future (Societal, Political and Economic)

Rap up

• The world was not always rich

• From the Garden of Eden to the technology driven office

• Different periods of history contributed to the development of the field of management

• Theories and Perspectives that Contributed to the Development of Management– A. Classical Perspective

– B. Humanistic Perspective

– C. Management Science Perspective

Rap up

●Systems Theory -

●Contingency View -

●Total Quality Management (TQM)

●The Learning Organization●The Technology Driven office

–Have the best life ever.

References

• Cole, G.A ( 1993) Management, Theory and Practice – GA

• Daft, R. & Marcic, D. (2007) Management: The New Workplace (7th edition)

• Websites: http://www.kernsanalysis.com/sjsu/ise250/history.htm