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Management Thoughts

Prof. B. K. Sundaray

Early Management Pioneers


Robert Owen (1771 1858)
British industrialist who was one of the first managers to recognize the importance of human resources and the welfare of workers.

Charles Babbage (1792 1871)


English mathematician who focused on creating efficiencies of production through the division of labor, and the application of mathematics to management problems.

Classical Management Theory

Classical Management Theory

A theory that focused on finding the one best way to perform and manage tasks

Main Features
Management is viewed as a systematic network of interrelated functions Functions, principles and skills of management are considered universal Formal education and training is emphasized for developing managerial skills Emphasis is placed on economic efficiency and formal organisation structure People are motivated by economic gains

Classical Perspective on Management


Focuses on the individual workers productivity

Focuses on the functions of management

Focuses on the overall organizational system

Scientific Management
Key concepts
 Concerned with improving the performance of individual workers (i.e., efficiency)  used scientific methods to determine the one best way  emphasized study of tasks, selection and training of workers, and cooperation between workers and management

Contributions
improved factory productivity and efficiency introduced scientific analysis to the workplace piece rate system equated worker rewards and performance

Limitations
simplistic motivational assumptions workers viewed as parts of a machine potential for exploitation of labor

Contributions from The Theorists


Frederick Taylor (1856 1915) Considered the Father of Scientific Management. Replaced old rule-of-thumb methods by applying science Scientific selection, training and development of workers Division of responsibility between management and workers Supervise and motivate workers for higher productivity Create cooperation between management and workers

Frank Gilbreth Specialized in time and motion studies to determine the most efficient way to perform tasks. Lillian Gilbreth A strong proponent of better working conditions as a means of improving efficiency and productivity. Favored standard days with scheduled lunch breaks and rest periods for workers. Henry Gantt Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling. Harrington Emerson Advocated job specialization in both managerial and operating jobs.

Administrative Management
Key concepts
Focuses on managing the whole organization rather than individuals. executives formulate the organization s purpose, secure employees, and maintain communications managers must respond to changing developments

Contributions
viewed management as a profession that can be trained and developed emphasized the broad policy aspects of top-level managers offered universal managerial prescriptions

Limitations
universal prescriptions need qualifications for contingencies

Contributions from The Theorists


Henri Fayol (1841 1925)
 Believed specific management skills could be learned and taught  First recognized that successful managers had to understand the basic managerial functions.  Developed a set of 14 general principles of management.  Fayol s managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.

Fayol s 14 Principles of Management


Division of work Authority Discipline Unity of command Unity of direction Subordination of individual interest to the general interest Remuneration

Centralization Scalar chain Order Equity Stability and tenure Initiative Esprit de corps

Bureaucratic Management
Focuses on the overall organizational system. Bureaucratic management is based upon:
Firm rules Policies and procedures A fixed hierarchy A clear division of labor

Bureaucratic Management
Max Weber (1864 1920)
A German sociologist and historian who envisioned a system of management that would be based upon impersonal and rational behavior the approach to management now referred to as bureaucracy.
Division of labor Hierarchy of authority Rules and procedures Impersonality Employee selection and promotion

Classical versus Behavioral Perspective


vs.

Classical Perspective
Focused on rational behavior

Behavioral Perspective
Acknowledged the importance of human behavior

Behavioral Management Perspective


An organisation is a socio-technical system A wide range of factors influence interpersonal and group behaviour of people There should a fusion between organisational goals and human needs Several differences in personalities, attitudes, perceptions and values of employees exist and influence their behaviour and performance Some degree of conflict may be inevitable and even desirable in organisations

Behavioral Management Perspective


Emphasized individual attitudes and behaviors, and group processes, and recognized the importance of behavioral processes in the workplace. Acknowledged the importance of human behavior in shaping management style Is associated with:
Elton Mayo Mary Parker Follett Abraham Maslow Douglas McGregor Rensis Likert

Elton Mayo(1927 1932)


He and his associates the famous Hawthorne Experiments at Western Electric Company  Illumination experiments  Relay assembly test room experiment  Mass interviewing programme  Bank wiring observation Workers relationship with each other and their relationship with their supervisor affect their performance

Mary Parker Follett


Concluded that a key to effective management was coordination. Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people. Believed that management is a continuous, dynamic process. Felt that the best decisions would be made by people who were closest to the situation.

Abraham Maslow (1908-1970)


Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy. Physiological need Safety need Social need Esteem need Self actualization need

Douglas McGregor (1906-1964)


Proposed the Theory X and Theory Y styles of management.
Theory X assumes the average worker is lazy, dislikes work and will do as little as possible.
Workers have little ambition and wish to avoid responsibility Managers must closely supervise and control through reward and punishment. Theory Y assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work. Managers should allow workers greater latitude, and create an organization to stimulate the workers.

Rensis Likert (1903-1972)


Focused on leadership Suggested on employee-centered leadership and maximum participation of workers in the decision making process Classified management styles into 4 categories: Exploitative Autocratic  Benevolent Autocratic  Participative  Democratic

Quantitative Management Theory


Quantitative Quantitative School School
Emphasized mathematical approaches to Emphasized mathematical approaches to management problems management problems

Management Science

The study of complex systems of people, money, equipment, and procedures, with the goal of improving their effectiveness

Evolution:
Emerged during World War II to help the Allied forces manage logistical problems. Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems. An approach to management that uses mathematics, statistics, and other quantitative techniques for management decision making to maximize the use of organizational resources. Contributions: Developed sophisticated quantitative techniques to assist in decision making. Application of models has increased our awareness and understanding of complex processes and situations. Has been useful in the planning and controlling processes. Limitations: Quantitative management cannot fully explain or predict the behavior of people in organizations. Mathematical sophistication may come at the expense of other managerial skills. Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability.

Systems Approach
Views the organization as a system of interrelated parts that function in a holistic way to achieve a common purpose. Systems theory concepts that affect management thinking:
 Open and closed systems  Subsystems  Synergy  Entropy

The Systems Perspective of Organizations

Inputs
material inputs, human inputs, financial inputs, and information inputs

Transformation process
technology, operating systems, administrative systems, and control systems

Outputs
products/services, profits/losses, employee behaviors, and information outputs

Feedback

Contingency Theory
Suggests that each organization is unique. The appropriate managerial behavior for managing an organization depends (is contingent) on the current situation in the organization. States that there is no one best way to manage an organization.
 Because what works for one organization may not work for another  Situational characteristics (contingencies) differ  Managers need to understand the key contingencies that determine the most effective management practices in a given situation

The Contingency Perspective


Problem or Situation

Important Contingencies

Solution or Action A

Solution or Action B

Solution or Action C

Modern Thoughts
Peter F. Drucker
Management is an important and life giving element in an organisation Believed in practical experience in management Introduced Management by Objective (MBO) Identified three basic aspect of organising, namely activity analysis, Decision analysis and Relation analysis.

Theory Z (William Ouchi)


Tenure of employment Type of decision making Fixation of responsibility Career advancement Concern for employees Career objective

Advocates trusting employees and making them feel like an integral part of the organization. Based on the assumption that once a trusting relationship with workers is established, production will increase.

Total Quality Management (TQM)


An organization-wide approach that focuses on quality as an overarching goal. The basis of this approach is the understanding that all employees and organizational units should be working harmoniously to satisfy the customer.
 Meeting customer s requirements  Continuous improvement of quality  Develop openness and trust among employees

Deming s PDCA cycle

The Learning Organization


The management approach based on an organization anticipating change faster than its counterparts to have an advantage in the market over its competitors. There are two ways organizations can learn:
Experimental learning External learning

Modern Management Issues and Challenges (Theories)


Acute labor shortages in high-technology job sectors and an oversupply of less skilled labor An increasingly diverse and globalized workforce The need to create challenging, motivating, and flexible work environments The effects of information technology on how people work The complex array of new ways of structuring organizations Increasing globalization of product and service markets The renewed importance of ethics and social responsibility The use of quality as the basis for competition The shift to a predominately service-based economy

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