evolution of management chapter 1 &2
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The Evolution of Management Thinking
Why history?
• Management philosophies and organization forms change over time to meet new needs. Knowing the history will– give you a perspective– Provide sense of contect and environment– Enhance strategic thinking
• Some ideas and practices from the past are still relevant and applicable to management today
Management perspectives over time
CLASSICAL PERSPECTIVE
Scientific Management (F. Taylor)“The system rather than man should come first”
Bureaucratic Organizations (M. Weber)Rational way to manage
Administrative Principles( H. Fayol, Follett, C. Barnard)
Organizations are social
Scientific management: Efficiency is everything
Context & challenges
- Industrial revolution, division of labour (A. Smith)- factory system
- US civil war & unification of the country
- Mass transportation and railways between East & West
- Dev’t of national market: larger size
- Opportunity for economies of scale: growth pressure
- Conflicts with the labour force : skilled workers control all.
- Control and management processes inadequate to cope with this growth.
How to increase productivity? How to be more efficient?How to de-skill the labour?
SIMPLIFY THE PRODUCTION PROCESS
Time & Motion studies (Gilbreath) in order to establish standards and precise rules for production, selection of workers, training.
Fordism: Assemly line(process)
Results of Scientific Management
Bureaucratic organizations (Max Weber 1864-1920) : Impersonal entitiesContext and Challenges
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
Features: Rational way to manage
• Clear division of labour with clear definition of authority and responsibility
• Positions organized in a hierarchy of authority
• Formal record keeping
• Separation of ownership and management
• Strict rules and procedure
Administrative principles: A general perspective H. Fayol, Mary. F. Follett; Chester Barnard.
New managerial concepts introduced: • Fayol: the management functions.
– Unity of command- one commander – Division of work- specialisation – Unity of direction – grouping similar activities– Scalar Chain – chain of authority for everyone– Span of control- limit to supervision
• Follett: Ethics-power-empowerment• C. Barnard: Informal organizations- naturally
occuring groups. Organization is social. Mgt should treat employees well.
HUMANISTIC PERSPECTIVE
Human relations Movement
Human Resource Perspective
Humanistic perspective Movement: “Social scientific management”
Context and Challenges:• Classical management increased efficiency and
productivity but ignored social and human context.• 1929 Great Depression in USA. Wagner Act (1935)
about workers rights and unions. • Hawthorne studies, experimental studies : Positive
treatment and motivation links:• Emphasized understanding human behavior, needs, and
attitudes in the workplace
Human Resource management.
Human Relations Movement
Emphasized satisfaction of employees’
basic needs as the key to increased
worker productivity
Highly inspired by the results of Hawthorne
studies
Human relations Movement
Hawthorne studies by Elton Mayo
• Started in 1895• Four experimental & three control groups• Test pointed to factors other than illumination for
productivity
• Factor that increased output, Human Relations– Social norms determine behaviour at work– Group affects individual– Money is less a factor for productivity
Human Resource Perspective
Suggests jobs should be designed to meet higher-level
needs by allowing workers to use their full potential:
Motivation and leadership theories Maslow and hierarchy of needs
McGregor Theory X and Theory YSkinner: Operant conditioning
McClelland: Motivation theoriesHerzberg: Motivation theories
Hackman & Oldham Task/job characteristicsFiedler: leadership theories
Human Resource Perspective
Self-actualisation
Self-esteem
Social
Safety
Psysiological
MASLOW HIERARCHY OF NEEDS
Douglas McGregor Theory X & Y1906-1964
Theory X• Men dislike work –will
avoid it• Must be coerced,
controlled, directed, or threatened with punishment
• Prefer direction, avoid responsibility, little ambition, want security
Theory Y• Men do not dislike work• Self direction and self
control• Seek responsibility• Imagination, creativity
widely distributed• Intellectual potential only
partially utilized
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– OD – Organization Development
• Socio technical approaches- participative mgt• Structural approach – org design
Post-War management approaches
Managerial Science approach
More recent developments-
Systems Theory
Contingency View
Total Quality Management (TQM)
Management Science Perspective
• Emerged after WW II• Applied mathematics, statistics, and other
quantitative techniques to managerial problemsOperations Research – mathematical
modelingOperations Management – specializes in
physical production of goods or servicesInformation Technology – reflected in
management information systems
Contingency View of Management: Flexible approach
• Management is not universal and each situation is unique.
• No universal principles• Contingencies: Industry –technology- environment-
cultures- size: “Contingency for “goodness of fit” between environment and organization structure.
TQM: Total Quality Management (E. Deming)
• First time applied in Japan• Focuses on managing the total
organization to deliver quality to customers.
• Four significant elements are– Employee involvement– Focus on the customer– Benchmarking– Continuous improvement ( 0% defect)
•
Recent trends: Flexible solutionsInnovative management thinking
Learning organizations
Technology driven workplace
Knowledge management
Learning Organizations
OPEN INFORMATION
EMPOWEREDEMPLOYEES
TEAM BASEDSTRUCTURE
LEARNING ORGANIZATION
No ready remedies- innovative thinking
Everybody engaged in solving problem- empowerment
Continous change- information and transparency
Technology Driven Workplace: Example: E-commerce
Business-to-Consumer B2C Selling Products and
Services Online ( Dell)
Business-to-Business B2B Transactions Between
Organizations(supply chain)
Consumer-to-Consumer C2C Electronic Markets
Created by Web-Based Intermediaries (arabam.com)
Knowledge management
Technology offers and supports information gathering and disseminating. Examples of positive consequences:
- CRM- Customer Relationship Management (Turkcell)
- Outsourcing- Banks and credit cards- i.e. Call centers, leaflets- Other international examples
- Arup- Tetra Pak
The term “Knowledge management” (Peter Drucker)
According to Drucker: • There is NO one right organizational structure• There is NO one right way to manage people• Technical markets are NOT given• Management is NOT internally focused• Management scope is NOT defined legally:• Therefore, the management should seek to get
information and acquire knowledge, manage and use this knowledge in order to survive and succeed. For that to happen, the management should foster a culture of continuous learning and knowledge sharing.
On the overall ..
• All approaches may co-exist• All approaches are still valid in the
workplace• However, trends are towards more flexible
structures and balance between efficiency and effectiveness.
Focus on Efficiency
Focus on Learning
organizations
New organizational paradigms: Flexibility is the rule
Mechanistic
organizationsOrganic organizations
Learning organizations: experiment
risk taking
sharing knowledge
Full participation in problem solving
Less formalization
X-functional hierarchical teams
Iron CageDepartments
Highly formal
Little participation
Limited information network
General Trends in organizationsIndustrial
Labour
Predictable environment
Mass production
Routine technology
Hierarchical structures
Growth-efficiency-control
Centralised decision making
Post industrial
Knowledge
Uncertainty & Speed
Flexibility
Innovation
Networks/Horizontal
Outsourcing
Decentralization
What happened? Why this shift?
What forces organizations and management to change?
ECONOMICFORCES
POLITICAL FORCES
SOCIAL FORCES
MANAGEMENT & ORGANIZATIONS
Values, needs , standards of behavior
influence of political and legal institutions on people & organizations
forces that affect the availability, production, & distribution of a society’s resources among competing users
& TECHNOLOGICAL CHANGES......
External environment change
complexity
InStability/
diversity
Uncertainty curves
•Globalization
•Technology
•Economic /political turbulances
The biggest challenge: Increasing Uncertainty