Evolution of management thought

MBA 1st Christ

No Universally Accepted Theory of Management

There are several approaches to the theory and practice of management.
The universal process approach The operational approach The behavioral approach The systems approach The contingency approach The attributes of excellence approach

The Evolution of Management Thought & Patterns of Management Analysis

Frederick Taylor and Scientific Management Fayol, the Father of Modern Operational Management Theory Elton Mayo and F. Roethlisberger and the Hawthorne Studies Recent Contributors to Management Thought, including Peter Drucker

The Universal Process Approach

Universal Process Approach
Assumes all organizations require the same rational management process. Core management process remains the same regardless of the purpose of the organization.

The management process can be reduce to a set of separate functions and related principles.

Henri Fayols Universal Management Process

Fayol published Administration Industrielle et Gnrale in 1916.
Divided the managers job into five functions: Planning, organizing, command, coordination, and control. Developed 14 universal principles of management.

Fayol, the Father of Modern Management Theory

Authority and responsibility. Authority is a combination of official and personal factors. Unity of Command. Employees should receive orders from one superior only. Scalar Chain. A "chain of superiors" from the highest to the lowest ranks should be short-circuited when to follow it scrupulously would be detrimental. Esprit de Corps. This is the principle that "in union there is strength.

Henry Fayol 14 principles.

Division of work - to derive benefits from the principle of specialization. It helps in greater efficiency & systematic working. Authority & responsibility.- authority is he right to give orders, right to command & the power to extract obedience. responsibility is the obligation to perform work in the desired manner and accept ownership for the results of doing so.

Discipline it refers to strict adherence to rules formulated & procedures evolved.

14 principles contd.
Unity of command an employee should receive orders from one superior only for action. Unity of direction everyone should work together to accomplish the objectives. Subordination of individual interest to general interest. This is called the principle of cooperation. Remuneration. Centralization Scalar chain a chain of authority extends from the top to the bottom of the orgntn & should include every employee.

contd
Order this refers to arrangements of things & persons. Equity - means being fair dealings, accommodative or cooperative attitude of members in an undertaking. Stability of tenure of personnel- employees should be assured job security so that they will show keen interest , in the orgntn. Initiative - means & includes the freedom & capacity to think out original plans & execute them with independent discretion.

Spirit of cooperation.

Henri Fayols Universal Management Process (contd)

Lessons from the Universal Process Approach
The management process can be separated into interdependent functions. Management is a continuous process. Management is a largely, though not an entirely, rational process. The functional approach is useful because it specifies what managers should do.

The Operational Approach

Operational Approach
Describes the production-oriented area of management dedicated to improving efficiency, cutting waste, and improving quality. Covers the technical and quantitative approaches to management : Management science Operations research

Production management
Operations management

The Operational Approach (contd)

Frederick W. Taylors Scientific Management
Developing performance standards on the basis of systematic observations and experimentation. Standardization of work practices and methods reduce waste and increase productivity Time and task study of workers efforts to maximize productivity and output. Systematic selection and training of workers to increase efficiency and productivity. Differential pay incentives based on established work standards.

The Operational Approach (contd)

Lessons from the Operational Approach
A dedication to finding a better way is still important. Using scientific management doesnt dehumanize workers. Quality advocates, inspired by the scientific approach, have been right all along about the importance of quality and continuous improvement The operational approach fostered the development of operations management.

Taylors Followers
Frank and Lillian Gilbreth
Refined time and motion study methods for use in work simplification.

Henry L. Gant
Refined production control and cost control techniques. Developed the Gantt chart for work-scheduling of projects.

Early advocate of the importance of the human factor and the importance of customer service over profits.

The Quality Advocates

Walter A. Shewhart
Introduced the concept of statistical quality control.

Kaoru Ishikawa
Proposed a preventive approach to quality.

Developed fishbone diagram approach to problemsolving.

W. Edwards Deming
Based his 14 principles on reformed management style, employee participation, and striving for continuous improvement.

The Quality Advocates (contd)

Joseph M. Juran
Proposed the concept of internal customers, teamwork, partnerships with suppliers, and brainstorming. Developed Pareto analysis (80/20 rule) as a tool for separating major problems from minor ones.

Armand V. Feigenbaum
Developed the concept of total quality control.

Philip B. Crosby
Promoted the idea of zero defects (doing it right the first time).

TQM
Focuses on managing the total organization to deliver quality to customers. Four significant elements are
Employee involvement Focus on the customer

Benchmarking
Continuous improvement

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The Behavioral Approach

The Human Relations Movement
An effort to make managers more sensitive to their employees needs. Arose out the influences of the threat of unionization. the Hawthorne studies. the philosophy of industrial humanism.

The Human Relations Movement Pyramid

The Behavioral Approach (contd)

The Threat of Unionization
The Wagner Act of 1935 legalized unionmanagement collective bargaining, promoting the growth of unions and union avoidance by firms.

The Hawthorne Studies (1924)

The studys results that productivity was strongly affected by workers attitudes turned management toward the humanistic and realistic viewpoint of the social man model.

The Philosophy of Industrial Humanism

Elton Mayo
Believed emotional factors were more important determinants of productive efficiency than were physical and logical factors.

Mary Parker Follett

Advocated that managers become aware of how complex each employee is and how to motivate employees to cooperate rather than to demand performance from them.

The Philosophy of Industrial Humanism (contd)

Douglas McGregor
Developed Theory X and Theory Y Theory X: managements traditionally negative view of employees as unmotivated and unwilling workers.

Theory Y: the positive view of employees as energetic, creative, and willing workers.

McGregors Theories X and Y TABLE A.2

Organizational Behavior
Organization Behavior
A modern research-oriented approach seeking to discover the causes of work behavior and to develop better management techniques.

Lessons from the Behavioral Approach

People are the key to productivity. Success depends on motivated and skilled individuals committed to the organization.

Managerial sensitivity to employees is necessary to foster the cooperation needed for high productivity.

The Systems Approach

What is a System?
A collection of parts that operate interdependently to achieve a common purpose.

Systems Approach
Posits that the performance of the whole is greater that the sum of the performance of its parts. Analytic versus synthetic thinking: outside-in thinking versus inside-out thinking.

Seeks to identify all parts of an organized activity and how they interact.

The Systems Approach (contd)

Chester I. Barnards Early Systems Perspective
Wrote Functions of the Executive. Characterized all organizations as cooperative systems. Defined principle elements in an organization as willingness to serve. common purpose. communication. Strong advocate of business ethics.

General Systems Theory

General Systems Theory
An area of study based on the assumptions that everything is part of a larger, interdependent arrangement.

Levels of systems
Each system is a subsystem of the system above it. Identification of systems at various levels helps translate abstract systems theory into more concrete terms.

General Systems Theory (contd)

Closed Versus Open Systems
Closed system A self-sufficient entity. Open system Something that depends on its surrounding environment for survival. Systems are classified open (closed) by how much (how little) they interact with their environments.

General Systems Theory (contd)

New Directions in Systems Thinking: Organizational learning and knowledge management
Organizations are living and thinking open systems that learn from experience and engage in complex mental processes. Chaos theory
Every complex system has a life of its own, with its own rule book.

Complex adaptive systems

Complex systems are self-organizing.

The Contingency Approach

Contingency Approach
A research effort to determine which managerial practices and techniques are appropriate in specific situations. Different situations require different managerial responses. Can deal with intercultural feelings in which custom and habits cannot be taken for granted.

Systems View of Organizations

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Systems Approach to Management

The Contingency Approach (contd)

Contingency Characteristics
An open-system perspective How subsystems combine to interact with outside systems. A practical research orientation Translating research findings into tools and situational refinements for more effective management. A multivariate approach Many variables collectively account for variations in performance.

The Contingency Approach (contd)

Lessons from the Contingency Approach
Approach emphasizes situational appropriateness rather than rigid adherence to universal principles. Approach creates the impression that an organization is captive to its environment.

Approach has been criticized for creating the impression that an organization is a captive of its environment.

Contingency View of Management

Exhibit 2.6

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Attributes of Excellence: A Modern Unconventional Approach

Peter and Watermans Approach
Attacked conventional management theory and practice as outmoded in almost every dimension. Replaced conventional management terminology with new catch phrases.

Made key points with anecdotes and stories rather than quantifiable objective data and facts.

Attributes of Excellence: A Modern Unconventional Approach (contd)

A Critical Appraisal of the Excellence Approach
Raises more questions than it answers. Ignores the contingency approach to management. Relies heavily on unsupported generalizations. Fails to position management effectiveness as important to sustaining corporate excellence.

Lessons from the Excellence Approach

Reminded managers to pay close attention to the basics. Reminded managers of the importance of on-the-job experimentation.

Innovative Mgmt thinking

The learning organisation.- defined as one in which everyone is engaged in identifying & solving problems, enabling the orgnt to continuously experiment ,change, & improve, thus increasing its capacity to grow, learn & achieve its purpose.-- three characteristics are Team - based structure employee empowerment. Means unleashing the power & creativity of employees by giving them the freedom, resources, information & the skills to make decisions & perform effectively. Open information

Elements of a Learning Organization

Team-Based Structure

Learning Organization Empowered Employees Open Information

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Managing technology driven work place.

The shifting world of e- business; E- business, E- commerce( a narrower term referring specifically to business exchanges or transactions that occur electronically.) business to consumer, business-to-business, and consumer- to- consumer( web- based intermediaries.). Supply chain management managing the sequence of suppliers & purchasers, covering all stages of processing from obtaining raw material to distributing finished goods.

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

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