Historical Background of Management Ancient Management Egypt pyramids

Historical Background of Management • Ancient Management Ø Egypt (pyramids) Ø China (Great Wall) • Adam Smith Ø Published “The Wealth of Nations” in 1776 v Advocated the division of labor (job specialization) to increase the productivity of workers • Industrial Revolution Ø Substituted machine power for human labor Ø Created large organizations in need of management Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 1

Major Approaches to Management • 1. CLASSICAL APPROACH • (i) Scientific Management (ii) General Administrative Theory 2. QUANTITATIVE APPROACH 3. BEHAVIORAL APPROACH • 4. CONTEMPORARY APPROACH • Copyright © 2005 Prentice Hall, Inc. All rights reserved. (i) Systems Theory (ii) The Contingency Approach 2– 2

1. Classical approach – (i) Scientific Management • Fredrick Winslow Taylor Ø The “father” of scientific management Ø Published Principles of Scientific Management (1911) v The theory of scientific management: – Using scientific methods to define the “one best way” for a job to be done • Putting the right person on the job with the correct tools and equipment • Having a standardized method of doing the job • Providing an economic incentive to the worker Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 3

Scientific Management (cont’d) • Frank and Lillian Gilbreth Ø Focused on increasing worker productivity through the reduction of wasted motion Ø Developed the microchronometer to time worker motions and optimize performance. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 4

(ii) General Administrative Theorists • Henri Fayol Ø Believed that the practice of management was distinct from other organizational functions Ø Developed fourteen principles of management that applied to all organizational situations • Max Weber- German sociologist • Developed a theory of authority structures and relations based on an ideal type of organization (bureaucracy) • Bureaucracy—a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. •

Fayol’s 14 Principles Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 6

2. Quantitative Approach to Management • Quantitative Approach Ø Also called operations research or management science Ø Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems Ø Focuses on improving managerial decision making by applying: v Statistics, optimization models, information models, and computer simulations Ø The quantitative approach has contributed directly to management decision making in the areas of planning and control. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 7

• Quality Management • A quality revolution swept through both the business and public sectors during the 1980 s and 1990 s. • The generic term used to describe this revolution was total quality management, or TQM for short. • Inspired by the total quality management (TQM) ideas of Deming and Juran. • TQM: A philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectations • Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 8

• Quality Management (contd. . ) Ø Continual improvement isn’t possible without accurate measurements, which require statistical techniques that measure every critical variable in the organization’s work processes. Ø Customers include both internal and external, including employees, suppliers and consumers Ø TQM is different from earlier management approaches which believed keeping costs low was the only way to increase productivity and thus compromising on quality. • Ø The Japanese demonstrated that it was possible for the highestquality manufacturers to be among the lowest-cost producers. Quality is not directly related to cost.

3. Behavioral approach • Organizational Behavior (OB) • The study of the actions of people at work; people are the most important asset of an organization. • Much of what currently makes up the field of human resources management and contemporary views on motivation, leadership, trust, teamwork, and conflict management have come out of organizational behavior research. • • Early OB Advocates Ø Robert Owen Ø Hugo Munsterberg Ø Mary Parker Follett Ø Chester Barnard Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 10

The Hawthorne Studies • A series of productivity experiments conducted at Western Electric from 1927 to 1932. • Experimental findings Ø Productivity unexpectedly increased under imposed adverse working conditions. Ø The effect of incentive plans was less than expected. • Research conclusion Ø The preliminary findings were that behavior is not merely physiological but also psychological. Ø Group factors significantly affect individual behavior, group standards establish individual worker output, and that money is less a factor in determining output than are group standards and group attitudes. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 11

4. Contemporary approach – (i) The Systems Approach • System Defined Ø A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. • Basic Types of Systems Ø Closed systems v Are not influenced by and do not interact with their environment (all system input and output is internal) Ø Open systems v Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 12

Implications of the Systems Approach • Coordination of the organization’s parts is essential for proper functioning of the entire organization. • Decisions and actions taken in one area of the organization will have an effect in other areas of the organization. • Organizations are not self-contained and, therefore, must adapt to changes in their external environment. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 13

(ii) The Contingency Approach • Contingency Approach Defined Ø Also sometimes called the situational approach. Ø There is no one universally applicable set of management principles (rules) by which to manage organizations. Ø Organizations are individually different, face different situations (contingency variables), and require different ways of managing. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 2– 14