PIONEERING IDEAS IN MANAGEMENT THE BIRTH OF MANAGEMENT

PIONEERING IDEAS IN MANAGEMENT

THE BIRTH OF MANAGEMENT IDEAS EVOLUTION OF MANAGEMENT THEORIES • DEVELOPMENT OF MANAGEMENT AS FIELD OF KNOWLEDGE • MANAGEMENT THEORIES & PRINCIPLES STEMMED FROM THE INDUSTRIAL REVOLUTION [EARLY 1800 s] • WITH PROLIFERATION OF FACTORIES CAME WIDESPREAD NEED TO COORDINATE EFFORTS OF LARGE NUMBER OF PEOPLE • PEOPLE EMERGED WHO BEGAN TO THINK OF INNOVATIVE WAYS TO RUN FACTORIES MORE EFFECTIVELY • THIS GROUP ARE KNOWN AS PRECLASSICAL CONTRIBUTORS TO MANAGEMENT • FOCUSSED LARGELY ON PARTICULAR TECHNIQUES TO SOLVE SPECIFIC PROBLEMS

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

PRECLASSICAL CONTRIBUTORS ROBERT OWEN [1771 – 1858] (BRITISH ENTREPRENEUR) • • IMPORTANCE OF HUMAN RESOURCES WORKING & LIVING CONDITIONS OF EMPLOYEES – – • • COTTON MILL, NEW LANARK, SCOTLAND 400 TO 500 CHILDREN WORKING 13 HOUR DAYS OWEN TRIED TO IMPROVE LIVING CONDITIONS CHARLES BABBAGE UPGRADING STREETS, HOUSES, SANITATION, EDUCATION SYSTEM CONSIDERED TO BE A RADICAL BUT NOW VIEWS WIDELY ACCEPTED IDEAS LAID GROUNDWORK FOR ‘HUMAN RELATIONS MOVEMENT’ CHARLES BABBAGE [1792 – 1871] (ENGLISH MATHEMATICIAN) • • • ‘THE FATHER OF MODERN COMPUTING’ WORLD’S FIRST MECHANICAL CALCULATOR ‘ANALYTICAL ENGINE’ - BASIC ELEMENTS OF MODERN DAY COMPUTER WORK SPECIALIZATION – DEGREE TO WHICH WORK IS DIVIDED INTO VARIOUS JOBS RECOGNIZED NOT ONLY PHISICAL BUT MENTAL WORK COULD BE SPECIALIZED [ACCOUNTANTS] PROFIT SHARING PLAN THAT HAD TWO PARTS – BONUS AWARDED FOR USEFUL SUGGESTIONS – PORTION OF WAGES DEPENDENT ON FACTORY PROFITS

PRECLASSICAL CONTRIBUTORS HENRY R TOWNE [1844 – 1924] (PRESIDENT YALE & TOWNE) • • ARTICULATED NEED TO CONSIDER MANAGEMENT AS SEPARATE FIELD OF SYSTEMATIC INQUIRY ON PAR WITH ENGINEERING LANDMARK PAPER “THE ENGINEER AS AN ECONOMIST” – OBSERVED THAT GOOD ENGINEERING SKILLS & GOOD BUSINESS SKILLS RARELY COMBINED IN SAME INDIVIDUAL – BOTH SKILLS ARE NEEDED TO RUN AN ORGANISATION EFFECTIVELY – ESTABLISHMENT OF A SCIENCE OF MANAGEMENT – DEVELOPMENT OF PRINCIPLES THAT COULD BE APPLIED ACROSS MANAGEMENT SITUATIONS HENRY MARTYN ROBERT [late 1800 s] • BRIG GEN IN US ARMY [CIVIL ENGINEER] • MEETINGS WHERE NOTHING WAS SETTLED OR RESOLVED • COLLECTED INFORMATION OVER 7 YEARS ON HOW TO CONDUCT MEETINGS • PRODUCED 176 PAGE BOOK ON ‘RULES OF ORDER’ FOR CONDUCTING MEETINGS

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

CLASSICAL VIEWPOINT 1. SCIENTIFIC MANAGEMENT An approach that emphasizes the scientific study of work methods in order to improve worker efficiency FREDERICK WINSLOW TAYLOR [1856 – 1915] [PHILADELPHIA] • ‘THE FATHER OF SCIENTIFIC MANAGEMENT’ • “SOLDERING” – DELIBERATELY WORKING AT LESS THAN FULL CAPACITY – INCREASING PRODUCTIVITY WOULD CAUSE LOSS OF JOBS – FAULTY WAGE SYSTEMS • CUT INCENTIVE PAY WHEN WORKERS EXCEEDED STANDARDS • THIS MADE WORKERS RELUCTANT TO EXCEL – GENERAL METHODS OF WORKING & RULES OF THUMB HANDED DOWN OFTEN INNEFFICIENT • TAYLOR DEVELOPED SCIENCE OF MANAGEMENT BASED ON FOUR PRINCIPLES

CLASSICAL VIEWPOINT TAYLOR’S FOUR PRINCIPLES OF SCIENTIFIC MANAGEMENT 1. SCIENTIFICALLY STUDY EACH PART OF A TASK AND DEVELOP THE BEST METHOD FOR PERFORMING THE TASK – TIME & MOTION STUDY [ TIME STUDY] • • 2. 3. 4. BREAKING DOWN WORK TASKS INTO VARIOUS ELEMENTS OR MOTIONS ELIMINATING UNNESSARY MOTIONS DETERMINING THE BEST WAY TO DO THE JOB TIME EACH MOTION TO DETERMINE THE AMOUNT OF PRODUCTION EXPECTED / DAY CAREFULLY SELECT WORKERS AND TRAIN THEM TO PERFORM THE TASK BY USING THE SCIENTIFICALLY DEVELOPED METHOD COOPERATE FULLY WITH WORKERS TO ENSURE THAT THEY USE THE PROPER METHOD DIVIDE WORK AND RESPONSIBILITY SO THAT MANAGEMENT IS RESPONSIBLE FOR PLANNING WORK METHODS USING SCIENTIFIC PRINCIPLES AND WORKERS ARE RESPONSIBLE FOR EXECUTING THE WORK ACCORDINGLY

CLASSICAL VIEWPOINT 2. BUREAUCRATIC MANAGEMENT An approach that emphasizes the need for organizations to operate in a rational manner rather than relying on the arbitrary whims of owners and managers MAX WEBER [1864 – 1920] [GERMAN SOCIOLOGIST] • • • WEBER FORMULATED CHARACTERISTICS OF THE “IDEAL BUREAUCRACY” “BUREAUCRACY” BASED ON GERMAN buro, MEANING “OFFICE” LARGE ORGANISATIONS THAT OPERATED ON A RATIONAL BASIS PURPOSE WAS TO DEVELOP IDEAS TO UNDERSTAND LARGE ORGANIZATIONS WHEN CARRIED TO EXCESS “BUREAUCRACY” DENOTES RED TAPE & EXCESSIVE RULES

CLASSICAL VIEWPOINT MAJOR CHARACTERISTICS OF WEBER’S IDEAL BUREAUCRACY CHARACTERISTIC DESCRIPTION SPECIALIZATION OF LABOUR JOBS ARE BROKEN DOWN INTO ROUTINE, WELL DEFINED TASKS SO THAT MENBERS KNOW WHAT IS EXPECTED OF THEM AND CAN BECOME EXTREMELY COMPETENT AT THEIR PARTICULAR SUBSET OF TASKS FORMAL RULES & PROCEDURES WRITTEN RULES & PROCEDURES SPECIFYING THE BEHAVIOURS DESIRED FROM MEMBERS FACILITATE COORDINATION & ENSURE UNIFORMITY IMPERSONALITY RULES, PROCEDURES, AND SANCTIONS ARE APPLIED UNIFORMLY REGARDLESS OF INDIVIDUAL PERSONALITIES & PERSONAL CONSIDERATION WELL DEFINED HIERARCHY MULTIPLE LEVEL OF POSITIONS, WITH CAREFULLY DETERMINED REPORTING RELATIONSHIPS AMONG LEVELS, PROVIDE SUPERVISION OF LOWER OFFICES BY HIGHER ONES, A MEANS OF HANDLING EXCEPTIONS, AND THE ABILITY TO ESTABLISH ACCOUNTABILITY OF ACTIONS CAREER ADVANCEMENT BASED ON MERIT SELECTION & PROMOTION IS BASED ON THE QUALIFICAYIONS & PERFORMANCE OF MEMBERS

CLASSICAL VIEWPOINT 3. ADMINISTRATIVE MANAGEMENT An approach that focuses on principles that can be used by managers to coordinate the internal activities of organizations HENRI FAYOL [1841 – 1925] [FRENCH INDUSTRIALIST] – – • TRAINED AS MINING ENGINEER JOINED AS APPRENTICE IN COAL & IRON COMBINE ROSE TO TOP POSITION AS MD & STEERED THE COMPANY OUT OF SEVERE FINANCIAL CRISIS MANAGEMENT THEORIES FOR INDIVIDUALS WITH ADMINISTRATIVE RESPONSIBILITIES ATTEMPTED TO ISOLATE THE MAIN TYPES OF ACTIVITIES INVOLVED IN INDUSTRY IN FIVE MAJOR FUNCTIONS • – – PLANNING, ORGANIZING, COMMANDING, COORDINATING & CONTROLLING [SIMILARITY TO FOUR FUNCTIONS OF MANAGEMENT : PLANNING, ORGANIZING, LEADING & CONTROLLING]

FAYOL’S GENERAL PRINCIPLES OF MANAGEMENT 1 DIVISION OF WORK SPECILIZATION CAN RESULT IN EFFICIENCIES AND IS APPLICABLE TO BOTH MANAGERIAL AND TECHNICAL FUNCTIONS. YET THERE ARE LIMITATIONS TO HOW MUCH THAT WORK SHOULD BE DIVIDED 2 AUTHORITY IS THE RIGHT TO GIVE ORDERS AND THE POWER TO EXACT OBEDIENCE. IT DERIVES FROM FORMAL AUTHORITY OF THE OFFICE AND FROM PERSONAL AUTHORITY BASED ON FACTORS LIKE INTELLIGENCE AND EXPERIENCE. WITH AUTHORITY COMES RESPONSIBILITY 3 DISCIPLINE IS ABSOLUTELY NECESSARY FOR THE SMOOTH RUNNING OF AN ORGANIZATION, BUT THE STATE OF DISCIPLINE DEPENDS ESSENTIALLY ON THE WORTHINESS OF ITS LEADERS

FAYOL’S GENERAL PRINCIPLES OF MANAGEMENT 4 UNITY OF COMMAND AN EMPLOYEE SHOULD RECEIVE ORDERS FROM ONE SUPERIOR ONLY 5 UNITY OF DIRECTION ACTIVITIES AIMED AT THE SAME OBJECTIVE SHOULD BE ORGANIZED SO THAT THERE IS ONE PLAN AND ONE PERSON IN CHARGE 6 SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST THE INTEREST OF ONE EMPLOYEE OR GROUP SHOULD NOT PREVAIL OVER THE INTERESTS AND GOALS OF THE ORGANIZATION 7 REMUNERATION COMPENSATION SHOULD BE FAIR TO BOTH THE EMPLOYEE AND THE EMPLOYER 8 CENTRALIZATION THE PROPER AMOUNT OF CENTRALIZATION OR DECENTRALIZATION DEPENDS ON THE SITUATION. THE OBJECTIVE IS THE OPTIMUM USE OF THE CAPABILITIES OF PERSONNEL

FAYOL’S GENERAL PRINCIPLES OF MANAGEMENT 9 SCALAR CHAIN A SCALAR [HIERARCHICAL] CHAIN OF AUTHORITY EXTENDS FROM THE TOP TO THE BOTTOM OF AN ORGANIZATION AND DEFINES THE COMMUNICATION PATH. HOWEVER, HORIZONTAL COMMUNICATION IS ALSO ENCOURAGED AS LONG AS THE MANAGERS IN THE CHAIN ARE KEPT INFORMED 10 ORDER MATERIALS SHOULD BE KEPT IN WELL CHOSEN PLACES THAT FACILITATE ACTIVITIES. SIMILARLY, DUE TO GOOD ORGANIZATION & SELECTION, THE RIGHT PERSON SHOULD BE IN THE RIGHT PLACE 11 EQUITY EMPLOYEES SHOULD BE TREATED WITH KINDNESS & JUSTICE 12 STABILITY OF PERSONNEL TENURE BECAUSE TIME IS REQUIRED TO BECOME EFFECTIVE IN NEW JOBS, HIGH TURNOVER SHOULD BE PREVENTED 13 INITIATIVE MANAGERS SHOULD ENCOURAGE & DEVELOP SUBORDINATE INITIATIVE TO THE FULLEST 14 Esprit de Corps SINCE UNION IS STRENGTH, HARMONY & TEAMWORK ARE ESSENTIAL

CLASSICAL VIEWPOINT ADMINISTRATIVE MANAGEMENT CHESTER BARNARD [1886 – 1961] [MASSACHUSETTS] ACCEPTANCE THEORY OF AUTHORITY A theory that argues that authority does not depend as much on “persons of authority” who give orders as on the willingness to comply of those who receive the orders • Basis that authority flows from the bottom to the top employees are more willing to accept directions from a manager if they 1. 2. 3. 4. Understand the communication See the communication as consistent with the purposes of the organization Feel that the actions indicated are in line with their needs and those of other employees View themselves as mentally & physically able to comply

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

BEHAVIORAL VIEWPOINT A perspective on management that emphasizes the importance of accepting to understand the various factors that affect human behavior in Organizations EARLY BEHAVIORISTS HUGO MUNSTERBERG [1863 – 1916] [GERMANY] – Ph D IN PSY & MEDICAL DEGREE – 1892 SET UP PSY LAB AT HARVARD • PSYCHOLOGISTS CAN HELP INDUSTRY – IDENTIFY INDIVIDUALS BEST SUITED FOR PARTICULAR JOB – IDENTIFY PSY CONDITIONS UNDER WHICH INDIVIDUALS WOULD DO BEST WORK – DEVELOP STRATEGIES THAT WOULD INFLUENCE EMPLOYEES TO BEHAVE IN WAYS COMPATIBLE WITH MANAGEMENT INTERESTS • THUS ESTABILISHED THE FIELD OF ‘INDUSTRIAL PSYCHOLOGY’

BEHAVIORAL VIEWPOINT EARLY BEHAVIORISTS MARY PARKER FOLLETT [1868 – 1933] – POLITICAL SCIENCE FROM RADCLIFFE COLLEGE – SOCIAL WORKER WITH INTEREST IN EMPLOYMENT & WORKPLACE ISSUES • • • GREATER SIGNIFICANCE TO THE FUNCTIONING OF GROUPS MEMBERS OF ORGANIZATIONS ARE CONTINUOUSLY INFLUENCED BY GROUPS WITHIN GROUPS HAVE THE CAPACITY TO EXERCISE CONTROL OVER THEMSELVES AND THEIR OWN ACTIVITIES [GENERAL MOTORS’ SATURN PLANT : MOST OF THE WORK IS DONE BY TEAMS THAT HAVE NO TRADITIONAL BOSS] • • • ORGANISATIONS SHOULD OPERATE ON THE PRINCIPLE OF “POWER WITH” RATHER THAN “POWER OVER” POWER SHOULD BE A JOINTLY DEVELOPED, COOPERATIVE CONCEPT, INVOLVING EMPLOYEES & MANAGERS WORKING TOGETHER “POWER WITH” CONCEPT : RESOLVING CONFLICE THROUGH INTEGERATION [FINDING A SOLUTION THAT WOULD SATISIFY BOTH PARTIES]

BEHAVIORAL VIEWPOINT HAWTHORNE STUDIES – GROUP OF STUDIES CONDUCTED AT HAWTHORNE PLANT OF WESTERN ELECTRIC COMPANY DURING LATE 1920’s TO EARLY 1930’s – RESULTS ULTIMATELY LED TO THE HUMAN RELATIONS VIEW OF MANAGEMENT : A BEHAVIORAL APPROACH THAT EMPHASIZED CONCERN FOR THE WORKER – Three sets of Studies HAWTHORNE EFFECT The possibility that individuals singled out for a study may improve their performance simply because of the added attention they receive from the researchers, rather than because of any specific factors being tested IMPACT OF THE HAWTHORNE STUDIES “NO OTHER THEORY OR SET OF EXPERIMENTS HAS STIMULATED MORE RESEARCH & CONTROVERSY NOR CONTRIBUTED MORE TO A CHANGE IN MANAGEMENT THINKING THAN THE HAWTHORNE STUDIES AND THE HUMAN RELATIONS MOVEMENT THEY SPAWNED”

BEHAVIORAL VIEWPOINT HUMAN RELATIONS MOVEMENT – HAWTHORNE RESEARCH SET THE STAGE FOR INTENSE INTEREST IN SOCIAL DIMENSIONS OF HUMAN BEHAVIOR IN ORGANISATIONS – KEY TO PRODUCTIVITY APPEARED TO LIE IN SHOWING GREATER CONCERN FOR WORKERS – EMPHASIS WAS IN BUILDING MORE COLLABORATIVE & COOPERATIVE RELATIONSHIPS BETWEEN SUPERVISORS & MANAGERS – MANAGERS NOW NEEDED SOCIAL SKILLS IN ADDITION TO TECHNICAL SKILLS ABRAHAM MASLOW [1908 – 1970] – DOCTORATE IN PSYCHOLOGY FROM UNIV OF WISCONSIN – CHAIRMAN OF PSYCHOLOGY DEPT AT BRANDEIS UNIV THEORY OF MOTIVATION [BASED ON THREE ASSUMPTIONS] • • HUMAN BEINGS HAVE NEEDS THAT ARE NEVER COMPLETELY SATISIFIED HUMAN ACTION IS AIMED AT FULFILLING THE NEEDS THAT ARE UNSATISIFIED AT A GIVEN POINT IN TIME NEEDS FIT INTO A PREDICITABLE HIERARCHY RANGING FROM BASIC, LOWER & HIGHER LEVEL HIERARCHY OUTLINED BY MASLOW – – – • PHYSIOLOGICAL [LOWEST] SAFETY BELONGINGNESS ESTEEM SELF ACTUALIZATION [HIGHEST] [requirement to develop our capabilities & reach our full potential] WORKERS HAVE NEEDS BEYOND THE BASIC REQUIREMENT OF EARNING MONEY

BEHAVIORAL VIEWPOINT DOUGLAS MCGREGOR [1906 – 1964] – – – • DOCTORATE AT HARVARD PROFESSOR OF INDUSTRIAL MANAGEMENT AT MIT PRESIDENT OF ANTIOCH COLLEGE FOR 6 YEARS THEORY X & THEORY Y : POSSIBLE ASSUMPTIONS THAT MANAGERS MAKE ABOUT WORKERS SUCH ASSUMPTIONS EXERT A HEAVY INFLUENCE ON HOW MANAGERS OPERATE • THEORY X ASSUMPTIONS 1 THE AVERAGE PERSON DISLIKES WORK & WILL TRY TO AVOID IT 2 MOST PEOPLE NEED TO BE COERCED, CONTROLLED, DIRECTED & THREATENED WITH PUNISHMENT TO GET THEM TO WORK TOWARD ORGANIZATIONAL GOALS 3 THE AVERAGE PERSON WANTS TO BE DIRECTED, SHUNS RESPONSIBILITY, HAS LITTLE AMBITION & SEEKS SECURITY ABOVE ALL THEORY Y ASSUMPTIONS 1 MOST PEOPLE DO NOT INHERENTLY DISLIKE WORK, THE PHYSICAL & MENTAL EFFORT INVOLVED IS AS NATURAL AS PLAY OR REST 2 PEOPLE WILL EXERCISE SELF-DIRECTION & SELF-CONTROL TO REACH GOALS TO WHICH THEY ARE COMMITTED; EXTERNAL CONTROL &THREATOF PUNISHMENT ARE NOT THE ONLY MEANS FOR ENSURING EFFORT TOWARDS GOALS 3 COMMITMENT TO GOALS IS A FUNCTION OF THE REWARDS AVAILABLE, PARTICULARLY REWARDS THAT SATISFY ESTEEM & SELF-ACTUALIZATION NEEDS 4 WHEN CONDITIONS ARE FAVOURABLE, THE AVERAGE PERSON LEARNS TO NOT ONLY ACCEPT BUT ALSO TO SEEK RESPONSIBILITY 5 MANY PEOPLE HAVE THE CAPACITY TO EXERCISE A HIGH DEGREE OF CREATIVITY & INNOVATION IN SOLVING ORGANIZATIONAL PROBLEMS 6 THE INTELLECTUAL POTENTIAL OF MOST INDIVIDUALS IS ONLY PARTIALLY UTILIZED IN MOST ORGANIZATIONS

BEHAVIORAL VIEWPOINT BEHAVIORAL SCIENCE APPROACH An approach that Emphasizes scientific research as the basis for developing theories about human behavior in organizations that can be used to establish practical guidelines for managers • • • DRAWS ON FINDINGS FROM A VARIETY OF DISCIPLINES, INCLUDING MANAGEMENT, PSYCHOLOGY, SOCIOLOGY, ANTHROPOLOGY & ECONOMICS CONCEPTS ARE THOROUGHLY TESTED IN BUSINESS ORGANISATIONS & SOMETIMES ALSO IN LABORATORY SETTINGS BEFORE ANNOUNCED AS VIABLE APPROACHES EXAMPLE OF USEFUL OUTCOMES OF BEHAVIORAL SCIENCE RESEARCH IS THE IDEA – THAT INDIVIDUALS PERFORM BETTER WITH CHALLENGING, BUT ATTAINABLE GOALS THAN THEY DO WITHOUT GOALS – GOALS MUST BE SPECIFIC & MEASURABLE – “I want to get 85% in my management course this semester” RATHER THAN A VAGUE “I want to do well in my course this semester” • GOAL SETTING LEADS TO BETTER PERFORMANCE

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

QUANTITATIVE MANAGEMENT VIEWPOINT • • • QUANTITATIVE MANAGEMENT VIEWPOINT EMERGED DURING WW II FOCUSES ON THE USE OF MATHEMATICS, STATISTICS & INFORMATION AIDS TO SUPPORT MANAGEMENT DECISION MAKING & ORGANIZATIONAL EFFECTIVENESS THREE MAIN BRANCHES – MANAGEMENT SCIENCE – OPERATIONS MANAGEMENT – MANAGEMENT INFORMATION SYSTEMS MANAGEMENT SCIENCE An approach aimed at increasing decision effectiveness through the use of sophisticated mathematical models & statistical methods [OPERATIONS RESEARCH Another name commonly used for management science] – OPERATIONS RESEARCH TOOLS : linear programming, queuing or waiting-line models and routing or distribution models – eg, AVON - Statistical methods to analyze the implications of offering heavy product discounts to generate larger orders

QUANTITATIVE MANAGEMENT VIEWPOINT OPERATIONS MANAGEMENT The function, or field of expertise, that is primarily responsible for managing the production & delivery of an organization’s products & services – Inventory management, work scheduling, production planning, facilities location & design and quality assurance – Raw materials, scheduling employees, storing & shipping final product – eg, Seeq Technology [Silicon Valley maker of microchips] – Sudden glut in 128 k EPROM Chip caused price to plummet from $15 to $2 [per chip cost $5] – Company had to rethink its production process, improve inventory management & lower machine maintenance costs MANAGEMENT INFORMATION SYSTEMS The field of management that focuses on designing & implementing computer-based information systems for use by management – Such systems turn raw data into information useful to management – Large amounts of information

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

CONTEMPORARY VIEWPOINTS SYSTEMS THEORY An approach based on the notion that organizations can be visualized as systems SYSTEM A set of interrelated parts that operate as a whole in pursuit of common goals MAJOR COMPONENTS An organizational system has four major components 1. • INPUTS are the various human, material, financial, equipment, & informational resources required to produce goods & services 2. TRANSFORMATION PROCESSES are the organization’s managerial & technological abilities that are applied to convert inputs into outputs 3. OUTPUTS ore the products, services & other outcomes produced by the organization 4. FEEDBACK is information about results & organizational status relative to the environment Systems can be open or closed – – Open System. A system that operates in continual interaction with its environment Closed System. A system that does little or no interacting with its environment & receives little feedback

A SYSTEMS VIEW OF ORGANIZATIONS RESOURCES • HUMAN • • MATERIALS EQUIPMENT FINANCIAL INFORMATIONAL INPUTS MANAGERIAL & TECHNOLOGICAL ABILITIES OUTCOMES • • • PRODUCTS & SERVICES • PROFITS & LOSSES • EMPLOYEE GROWTH & SATISFACTION PLANNING ORGANIZING LEADING CONTROLLING TECHNOLOGY TRANSFORMATION PROCESSES OUTPUTS FEEDBACK FROM THE ENVIRONMENT INFORMATION ABOUT • RESULTS • ORGANIZATIONAL STATUS ITM 14 AUG 2007

CONTEMPORARY VIEWPOINTS CONTINGENCY THEORY – – If universal Principles could be found then becoming a good Manager would involve learning these principles & how to apply them Researchers found that some classical principles [Fayol’s unity of command - each person should report to only one boss] could sometimes be violated with positive results CONTINGENCY THEORY A viewpoint that argues that appropriate managerial action depends on the particular parameters of the situation – – Rather than seeking universal principles that apply to every situation Contingency Theory attempts to identify CONTINGENCY principles that prescribe actions to take depending on the characteristic of the situation UNIVERSAL VIEW Same managerial principles apply to every situation CONTINGENCY VIEW Appropriate managerial action depends on the situation Situation 3 Situation 1 Situation 2

EMERGING VIEWS THEORY Z • Combines the positive aspects of American & Japanese Management into a modified approach aimed at increasing managerial effectiveness [in the US] TYPE A Short Term Employment Individual Decision Making Individual Responsibility Rapid Evaluation & Promotion Explicit Formalized Control Specialized Career Path Segmented Concern TYPE Z Long Term Employment Consensual Decision Making Individual Responsibility Slow Evaluation & Promotion Implicit, Informal Control with Explicit, Formalized Measures Moderately Specialized Career Path Holistic Concern, Including Family TYPE J Lifetime Employment Consensual Decision Making Slow Evaluation & Promotion Implicit, Informal Control Nonspecialized Career Path Holistic Concern TOTAL QUALITY MANAGEMENT [TQM] is a management system that is an integral part of an organization’s strategy and is aimed at continually improving product and service quality so as to achieve high levels of customer satisfaction & build strong customer loyalty

MAJOR VIEWPOINTS IN THE DEVELOPMENT OF MODERN MANAGEMENT THEORY PRECLASSICAL CONTRIBUTERS CLASSICAL VIEWPOINT BEHAVIORAL VIEWPOINT QUANTITATIVE VIEWPOINT CONTEMPORARY VIEWPOINT SCIENTIFIC MANAGEMENT EARLY BEHAVIORISTS MANAGEMENT SCIENCE SYSTEMS THEORY BUREAUCRATIC MANAGEMENT HAWTHORNE STUDIES OPERATIONS MANAGEMENT CONTINGENCY THEORY ADMINISTRATIVE MANAGEMENT HUMAN RELATIONS MOVEMENT MANAGEMENT INFORMATION SYSTEMS EMERGING VIEWS BEHAVIORAL SCIENCE APPROACH

CONCLUSION • • CHAPTER OUTLINE LEARNING OBJECTIVES CHAPTER SUMMARY OPENING CASE 1 : FORD OPENING CASE 2 : FORD EDSEL QUESTIONS FOR DISCUSSION & REVIEW DISCUSSION QUESTIONS MANAGEMENT EXERCISE – 1 Self Assessment Exercise – 2 Problems at the Ice Cream Plant • CONCLUDING CASE STUDY – 1 Ford Motor Charges Ahead into Globalization – 2 Siemens is grooming a new Generation of Managers

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