INSTITUTE OF MODERN SCIENCES & ARTS HYDERABAD

ASSIGNMENT History of Management & Functions of Management

Management
The term "Management" refers to the activities (and often the group of people) involved in the four general functions: planning, organizing, leading, and controlling. The term Management refers to the process of coordinating and integrating work activities so that they are completed efficiently and effectively with and through other people. Two components in this definition need to be discussed. These are terms efficiency, and efficientiveness. Efficiency Doing things right Getting the most output for the least inputs Effectiveness Doing the right things Attaining organizational goals

Effectiveness and Efficiency in Management

Historical Background of Management

Many fascinating examples from history illustrate how management has been practiced for thousands of years.

1.

Ancient Management
Organizations and managers have existed for thousands of years. The Egyptian pyramids and the Great Wall of China were projects of tremendous scope and magnitude, requiring the efforts of tens of thousands of people. How was it possible for these projects to be completed successfully? The answer is management. Regardless of the titles given to managers throughout history, someone has always had to plan what needs to be accomplished, organize people and materials,

lead and direct workers, and impose controls to ensure that goals were attained as planned. Examples of early management practices can also be seen by studying the Arsenal of Venice. Assembly lines, accounting systems, and personnel functions are only a few of the processes and activities used in business in the fifteenth century that are common to todays organizations as well.

Adam Smith

First in 1776 Adam Smith, published a classical economics doctrine The Wealth of Nations ,in which he argued brilliantly for the economic advantages that organizations and society would gain from the division of labor (the breakdown of jobs into narrow, repetitive tasks) would bring to organizations and society to increase the productivity of workers.

The Industrial Revolution is possibly the most important pre-twentiethcentury influence on management. The introduction of machine powers combined with the division of labor made large, efficient factories possible. Planning, organizing, leading, and controlling became necessary activities.

Industrial Revolution

Development of Major Management Theories 2.

Scientific Management
Scientific management is defined as the use of the scientific method to determine the one best way for a job to be done. A.

Fredrick Winslow Taylor (1856-1950)

Fredrick W. Taylor is known as the father of scientific management. He published Principles of Management in 1911 Taylors work at the Midvale and Bethlehem Steel companies stimulated his interest in improving efficiency. 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. Taylors gives four Principles of Management: 1. Develop a science for each element of an individuals work, which will replace the old rule-ofthumb method. 2. Scientifically select and then train, teach, and develop the worker. 3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers. B.

Frank and Lillian Gilbreth

Frank and Lillian Gilbreth were inspired by Taylors work and proceeded to study and develop their own methods of scientific management. Frank Gilbreth is probably best known for his experiments in reducing the number of motions in bricklaying. The Gilbreth were among the first to use motion picture films to study hand and body motions in order to eliminate wasteful motions. They also devised a classification scheme to label 17 basic hand motions called therbligs (Gilbreth spelled backward, with the th transposed).

How Do Scientific Management?

Todays

Managers

Use

Guidelines devised by Taylor and others to improve production efficiency are still used in todays organizations. However, current management practice is not restricted to scientific management practices alone. Elements of scientific management still used include: 1. Using time and motion studies to increase productivity. 2. Hiring the best qualified employees. 3. Designing incentive systems based on output

3.

General Administrative Theory

This group of writers, who focused on the entire organization, developed more general theories of what managers do and what constitutes good management practice. A.

Henri Fayol

Fayol was most prominent proponents of the general administrative approach.Henri Fayol, who was a contemporary of Frederick W. Taylor, was the managing director of a large French coal-mining firm. Fayol focused on activities common to all managers. He described the practice of management as distinct from other typical business functions. He stated 14 principles of management (fundamental or universal truths of management that that applied to all organizational situations

Fayols 14 Principles of Management: 1. Division of work. 2. Authority. 3. Discipline. 4. Unity of command. 5. Unity of direction. 6. Subordination of individual interests to the general interest. 7. Remuneration. 8. Centralization. 9. Scalar chain. 10. Order. 11. Equity. 12. Stability of tenure of personnel. 13. Initiative. 14. Esprit de corps.

B.

Max Weber was a German sociologist who wrote in the early twentieth century. Weber developed a theory of authority structures and described organizational activity based on authority relations. He described the ideal form of organization as a bureaucracy marked by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships.

Max Weber

Webers Ideal Bureaucracy

How Do Todays Managers Use General Administrative Theories?

Some current management concepts and theories can be traced to the work of the general administrative theorists. 1. The functional view of a managers job relates to Henri Fayols concept of management. 2. Webers bureaucratic characteristics are evident in many of todays large organizationseven in highly flexible organizations that employ talented professionals. Some bureaucratic mechanisms are necessary in highly innovative organizations to ensure that resources are used efficiently and effectively. 4.

Quantitative Approach to Management

The quantitative approach to management, sometimes known as operations research or management science, uses quantitative techniques to improve decision making. This approach focuses on improving managerial decision making by applying: Statistics, optimization models, information models, and computer simulations. Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems A.

Important Contributions
1.

2.

The quantitative approach originated during World War II as mathematical and statistical solutions to military problems were developed for wartime use. As often happens after wartime, methods that were developed during World War II to conduct military affairs were applied to private industry following the war. For instance, a group of military officersthe Whiz Kidsused quantitative methods to improve decision making at Ford Motor Company in the mid-1940s.

1. 2.

How Do Todays Managers Quantitative Approach?

Use

the

The quantitative approach has contributed most directly to managerial decision making, particularly in planning and controlling. The availability of sophisticated computer software programs has made the use of quantitative techniques more feasible for managers.

Toward Behavior

Understanding

Organizational

The field of study concerned with the actions (behaviors) of people at work is organizational behavior. Organizational behavior (OB) research has contributed much of what we know about human resources management and contemporary views of motivation, leadership, trust, teamwork, and conflict management.

A.

Early Organizational Behavior Advocates

Four individualsRobert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester Barnardwere early advocates of the OB approach. Their ideas served as the foundation for employee selection procedures, motivation programs, work teams, and organization-environment management techniques.

Early Advocates of OB B.

The Hawthorne Studies

The most important contribution to the development of organizational behavior. A series of productivity experiments conducted at Western Electric from 1927 to 1932s.At Western Electric Companys Hawthorne Works in Cicero, Illinois, were initially devised as a scientific management experiment to assess the impact of changes in various physical and environmental influences of the workplace (e.g. brightness of lights, humidity) and later, moved into the psychological aspects (e.g. breaks, group pressure, working hours, managerial leadership). The ideas that this team developed about the social dynamics of groups in the work setting had lasting influence - the collection of data, labor-management relations, and informal interaction among factory employees. After Harvard professor Elton Mayo and his associates joined the study as consultants, other experiments

were included to look at redesigning jobs, make changes in workday and workweek length, introduce rest periods, and introduce individual versus group wage plans. o Four General conclusions were drawn from the Hawthorne studies: The aptitudes of individuals are imperfect predictors of job performance. Although they give some indication of the physical and mental potential of the individual, the amount produced is strongly influenced by social factors. Although not without criticism (concerning procedures, analyses of findings, and the conclusions), the Hawthorne Studies stimulated interest in human behavior in organizational settings. Informal organization affects productivity. The Hawthorne researchers discovered a group life among the workers. The studies also showed that the relations that supervisors develop with workers tend to influence the manner in which the workers carry out directives. Work-group norms affect productivity. The Hawthorne researchers were not the first to recognize that work groups tend to arrive at norms of what is "a fair day's work," however, they provided the best systematic description and interpretation of this phenomenon. The workplace is a social system. The Hawthorne researchers came to view the workplace as a social system made up of interdependent parts.

How Do Todays Managers Use the Behavioral Approach?

1. The behavioral approach assists managers in designing jobs that motivate workers, in working with employee teams, and in facilitating the flow of communication within organizations. 2. The behavioral approach provides the foundation for current theories of motivation, leadership, and group behavior and development.

5.

The Systems Approach

During the 1960s researchers began to analyze organizations from a systems perspective based on the physical sciences.

A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. The two basic types of systems are open and closed.

System

An open system dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.

Open Systems

A closed system is not influenced by and does not interact with

Closed Systems

its environment (all system input and output is internal). The Organization as an Open System

Implications of the Systems Approach

1. Using the systems approach, managers envision an organization as a body with many interdependent parts, each of which is important to the well-being of the organization as a whole. 2. Managers coordinate the work activities of the various parts of the organization, realizing that decisions and actions taken in one organizational area will affect other areas. 3. The systems approach recognizes that organizations are not self-contained; they rely on and are affected by factors in their external environment.

6.

The Contingency Approach

Also sometimes called the situational approach. The contingency approach recognizes that different organizations require different ways of managing.

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1. There

is no one universally applicable management principles (rules) by which to organizations. 2. Organizations are individually different, face situations (contingency variables), and require ways of managing.

set of manage different different

Popular Contingency Variables Organization size As size increases, so do the problems of coordination. Routineness of task technology Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or non-routine technologies. Environmental uncertainty What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment. Individual differences Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations.

Current Trends And Issues

After the study of the history and development of management theories, need to understand how current concepts and practices are changing the way managers do their jobs today. A. Globalization. Organizational operations are no longer limited by national borders. Managers throughout the world must deal with new opportunities and challenges inherent in the globalization of business. 1. Working with people from different cultures 2. Coping with anticapitalist backlash 3. Movement of jobs to countries with low-cost labor B. Ethics. Cases of corporate lying, misrepresentations, and financial manipulations have been widespread in recent years. Managers of firms such as Enron, ImClone, Global Crossing, and Tyco International have placed their own self-interest ahead of other stakeholders welfare. 1. While most managers continue to behave in a highly ethical manner, abuses suggest a need to upgrade ethical standards. 2. Ethics education is increasingly emphasized in college curricula today.

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3. Organizations are taking a more active role in creating and using codes of ethics, ethics training programs, and ethical hiring procedures. C. Workforce Diversity Refers to a workforce that is heterogeneous in terms of more gender, race, ethnicity, age, and other characteristics that reflect differences. 1. Workforce diversity is a global issue. 2. The assimilation (melting pot) model used before the early 1980s has been replaced by the recognition and celebration of differences. 3. Accommodating diverse groups of people by addressing different lifestyles, family needs, and work styles is a major challenge for todays managers. 4. Wise managers value diversity as an asset in bringing a broad range of viewpoints and problem-solving skills to an organization. D. Entrepreneurship Is the process whereby an individual or group of individuals use organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has. Entrepreneurship process Three important themes stand out in this definition: a. The pursuit of opportunities b. Innovation in products, services, or business methods c. Desire for continual growth of the organization Managing in an E-Business World E-business (electronic business) is a comprehensive term describing the way an organization does its work by using electronic (Internet-based) linkages with its key constituencies in order to efficiently and effectively achieve its goals. While critics questioned the viability of Internet-based companies (dot-coms) after the high-tech implosion in 2000 and 2001, E-business is here to stay. E-commerce (electronic commerce) is the sales and marketing component of e-business.

E.

o Categories of E-Business
a.

b.

An e-business enhanced organization uses the Internet to enhance (expand, not replace) its traditional ways of doing business. This type of organization sets up e-business capabilities (usually e-commerce). An e-business enabled organization uses the

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c.

Internet to enable the company to perform its traditional business functions more efficiently and effectively, but it does not sell products or services on the Internet. A total e-business organization is made possible by, and revolves around, the Internet.

Categories of E-Business

F. Learning Organizations. An organization that has developed the capacity to continuously learn, adapt, and change. G. Knowledge Organizations. Knowledge management involves cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance. I. Quality Management. 1. Quality management is a philosophy of management that is driven by continual improvement and response to

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2. 3.

customer needs and expectations. Total Quality Management inspired by a small group of quality experts, including W. Edwards Deming, who was one of its chief, proponents. Total Quality Management represents a counterpoint to earlier management theorists who believed that low costs were the only road to increased productivity.

4.

The objective of quality management is to create an organization committed to continuous improvement in work processes.

Functions of Management

Management operates through various functions, often classified as planning, organizing, leading/motivating, and controlling. The position that managers provide in planning, organizing, leading and controlling is an essential responsibility in any business. A manager must organize these functions in order to reach company goals and maintain a competitive advantage. Putting these plans into action requires forming groups as underlings must be directed to complete the plan, and the plan's development must be directed by control. In order for these practices to succeed in an operational manner, an understanding must be reached concerning the basics in which these practices are in relationship to the business structure.

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Management Functions

Planning
Planning is the primary managerial activity that involves defining the organizations goals and systematically making decisions about the goals and activities that an individual, a group, a work unit, or the overall organization will pursue in the future. Establishing an overall strategy for achieving those goals. Developing plans for organizational work activities.

Examples of planning are strategic planning, business planning, project planning, Staffing planning, advertising and promotions planning, etc Types of planning Informal: not written down, short-term focus; specific to an organizational unit. Formal: written, specific, and long-term focus, involves shared goals for the organization.

Organizing
Is establishing the internal organizational structure of the organization. The focus is on division, coordinating human, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders. Examples are organizing new departments, human resources, office and file systems, re-organizing businesses, etc

Staffing
Is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.

Leading/Motivating:

Exhibiting leadership and motivational skills in order to encourage others to play an effective part in achieving plans and ensure willing participation in the organization on the parts of workers. Organizational success is determined by the quality of leadership that is exhibited. "A leader can be a manager, but a manager is not necessarily a

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leader," says Gemmy Allen (1998). Leadership is the power of persuasion of one person over others to inspire actions towards achieving the goals of the company. Those in the leadership role must be able to influence/motivate workers to an elevated goal and direct themselves to the duties or responsibilities assigned during the planning process. Leadership involves the interpersonal characteristic of a manager's position that includes communication and close contact with team members. Examples are establishing strategic direction (vision, values, mission and / or goals) and championing methods of organizational performance management to pursue that direction.

Controlling/Monitoring
The organization's systems, processes and structures to reach effectively and efficiently reach goals and objectives. This includes ongoing collection of feedback, and monitoring and adjustment of systems, processes and structures accordingly. Examples include use of financial controls, policies and procedures, performance management processes, measures to avoid risks etc.

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