Evolution of management

Evolution of Management

Dr.T.Mangaleswaran

Senior Lecturer

Vavuniya Campus

Learning Outcomes

• Understand how historical forces influence the practice of management

• Identify and explain major developments in the history of management thoughts

• Describe the components of classical, humanistic, quantitative, & recent perspective

• Identify Contemporary management challenges

12/29/14 2PGDM1131-Contemporary Management

Why study Evolution?

• It has been the fastest growing discipline both in content and application over the last 50 years.

• People who ignore the past are destined (intended) to relive (remember) it.

• A person unaware of mistakes made by others is likely to repeat them.


Who contribute to Management discipline?

• Engineers• Sociologists• Psychologist• Anthropologists• Lawyers• Economists• Accountants• Mathematician• Political scientists• Philosophers


Management Perspectives

• Classical Perspective• Humanistic Perspective • Quantitative Perspective • Recent Perspectives– Systems Thinking – Contingency View – Qualitative approach– Technological driven workplace– Innovative Management Thinking



Classical Perspective: 3000 B.C.

• Rational, scientific approach to management – make organizations efficient operating machines

● Scientific Management● Bureaucratic Organizations● Administrative Principles

712/29/14 PGDM1131-Contemporary Management

Scientific ManagementContributors: Taylor, Frank and Gilbreth, and Henry L Gantt

Frederick Winslow Taylor 1856-1915

“Taylor’s theory that labour productivity could be improved by scientifically determined management practices earned him the status of Father of Scientific Management”.

General Approach• Developed standard method for performing each job.

• Selected workers with appropriate abilities for each job.

• Trained workers in standard method.

• Supported workers by planning work and eliminating interruptions.

• Provided wage incentives to workers for increased output.812/29/14 PGDM1131-Contemporary Management

Scientific Management cont…

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


The 4 Principles The 4 Principles 1. Study the way the job is performed now &

determine new ways to do it.– Gather detailed, time and motion information.– Try different methods to see which is best.

2. Codify the new method into rules.– Teach to all workers.

3. Select workers whose skills match the rules set in Step 2.

4. Establish a fair level of performance and pay for higher performance.– Workers should benefit from higher output.


Bureaucratic Organizations

• Max Weber 1864-1920• Prior to Bureaucracy Organizations

– European employees were loyal to a single individual rather than to the organization or its mission

– Resources used to realize individual desires rather than organizational goals


Max Weber (German Sociologist)

• He described goal oriented large organization as bureaucracy -- defined as an administrative system which is deliberately designed for accomplishment of large scale tasks through coordination of individual efforts in a rule bound, fair and efficient manner.

• It is characterized by clear division of labor, well trained personnel appointed on the basis of their competence, hierarchy, rules and regulations, rational power and impersonal relationships.

• Bureaucracy has been popularized for referring to government organizations.


13

Bureaucracy Organizations

Positions organized in a hierarchy of authority

Managers subject to Rules and procedures

that will ensure reliable predictable behavior

Personnel are selected and promoted based

on technical qualifications

Administrative acts and decisions recorded

in writing

Management separate from the ownership of the organization

Division of labor with Clear definitions of

authority and responsibility

Exhibit 2.3, p. 49


Administrative Principles• Contributors: Henri Fayol , Mary Parker, and Chester

I. Barnard• Henri Fayol – (1841-1925) broken the myth that

‘Managers are Born and not made. He insisted that management is a skill which can be taught.

• Focus: – Organization rather than the individual– Define the management functions of planning,

organizing, commanding, coordinating, and controlling


Fayol’s 14 PrinciplesFayol’s 14 Principles1. Division of Labor: allows for job specialization.

– Fayol noted firms can have too much specialization leading to poor quality and worker involvement.

2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise.

3. Unity of Command: Employees should have only one boss.

4. Line of Authority: a clear chain from top to bottom of the firm.

5. Centralization: the degree to which authority rests at the very top.


Fayol’s Principles cont…Fayol’s Principles cont… 6. Unity of Direction: One plan of action to guide the

organization.

7. Equity: Treat all employees fairly in justice and respect.

8. Order: Each employee is put where they have the most value.

9. Initiative: Encourage innovation.

10. Discipline: obedient, applied, respectful employees needed.


Fayol’s Principles cont…Fayol’s Principles cont…11. Remuneration of Personnel: The payment

system contributes to success.

12. Stability of Tenure: Long-term employment is important.

13. General interest over individual interest: The organization takes precedence over the individual.

14. Esprit de corps: Share enthusiasm or devotion to the organization.


18

Humanistic Perspective

Emphasized understanding human behavior, needs, and attitudes in the workplace

●Human Relations Movement

●Human Resources Perspective

●Behavioral Sciences Approach


Human Relations Movement

•Emphasized satisfaction of employees’ basic needs as the key to increase worker productivity.

•Contributor: Elton Mayo established relationship between social environment and work output


Hawthorne Studies(Western Electric Co. 1924 – 33)

• Ten year study• Four experimental & three control groups• Five different tests• Test pointed to factors other than illumination for

productivity• 1st Relay Assembly Test Room experiment, was controversial,

test lasted 6 years• Interpretation, money not cause of increased output• Factor that increased output, Human Relations

• These studies established that employees were different from the machines and would need to be treated differently and deferentially (respectfully).


21

Human Resource Perspective

•Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential.•Worker Participation and considerate leadership•Contributors: Maslow and Douglas McGregor


22

Physiological

Safety

Belongingness

Esteem

Self-actualization

Abraham Maslow’s Hierarchy of Needs

Based on needs satisfaction

1908-1970

l


23

• 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 Assumptions Theory Y Assumptions

1906-1964


Behavioral Sciences Approach

• Applies social science in an organizational context

• Draws from economics, psychology, sociology, anthropology, and other disciplines– Understand employee behavior and interaction in

an organizational setting– Organization Development (OD)

24

Sub-field of the Humanistic Management Perspective


Quantitative Perspective

• Emerged after World War II• Applied mathematics, statistics, and other

quantitative techniques to managerial problemsOperations Research – mathematical modeling

Operations Management – specializes in physical production of goods or services

Information Technology – reflected in management information systems


Systems Thinking

• An organized enterprise does not exist in vacuum and is dependent on external environment.

• Two basic types of systems are closed and open

• An open system interacts with the environment.

• A closed system is self-contained (independent)

• Synergy: performance gains of the whole surpass the components.– Synergy is only possible in a coordinated

system.12/29/14 26PGDM1131-Contemporary Management


Contingency View• Early management contributors gave us principles

of management and organization that they generally assumed to be universally acceptable. Later research have found exceptions.

• Management, like life itself, is not based on simplistic principles. Contingency approach is a product of the integration of various management theories modulated by the situational variables.

• Since organizations are diverse, one size does not fit all. Four important variables are, Organization size, Routineness of Task Technology, Environmental Uncertainty and individual differences.


29

Contingency View of Management

Exhibit 2.6, p. 59

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


Qualitative Approach

• Quality school is the most current and is worldwide

• The quality movement is strongly associated with Japanese companies.

• Degree of excellence of a product or service provides.

• Contributors: Juran, Philip Crosby &Deming.


Total Quality Management (TQM)• During 1980s and into 1990s, TQM focuses on

managing the total organization to deliver better quality to customers.

• Elements: employee involvement, focus on customer, benchmarking and continuous improvement

• TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services.


Technology –Driven workplace

• Popular recent trend1) Customer Relationship Management (CRM)

2) Outsourcing

3) Supply Chain Management

• Techniques are related to the shift to technology –driven workplacec.

• Today , many employees perform much of their work on computers, virtual teams, connected electronically.


Innovative Management

• Managers are looking for new techniques and approaches that adequately respond to customers needs and the demands of the environment.

• Managers tend to look for fresh ideas to help them cope during difficult times.

• Recent challenges: tough economy, volatile stock market, environmental and organizational crises, war and terrorism etc…


Contemporary Management Challenges

• Erratic (unpredictable) economy• Management of Diversity (variety)• Technological Advancement • Globalization• Ethics and social responsibility• Quality


Conclusions

In view of the discussions so far, management has started to become less based on the conceptualization of classical theory of management and the typical military command and control, and more on facilitation and support of collaborative activity. Now management deals with the complexities of human interaction to achieve organizational or group goals in an effective and efficient manner.


Thank you

• Question and Discussion


Business

Evolution of management