HISTORY OF MANAGEMENT

Assuming you are the manager in charge of a loan processing department. Describe how would you research this issue , using each of the following management approach : Scientific theory general administrative quantitative approach Behavioral approach System theory Contingency Approach

Development of Major Management Theories

Management Theories
Historical Background Scientific Management Quantitative Approach Systems Approach Contingency Approach

Early Examples of Management

Early Advocates Hawthorne Studies

Adam Smith
Industrial Revolution

: To reap the business opportunities of fastest growing retail segment, our bank has implemented a unique sale & delivery model known as Retail Loan Factory, which is based on assembly line principle for speedy disposal of retail loan applications. Presently we have 35 Retail loan factories at various locations of the country. We offer following product to our retail segment borrowers :
Retail Segment

Fredrick Winslow Taylor The father of scientific management :

1. Develop a science for each element of an individuals work. 2. Scientifically select and then train, teach, and develop employees. 3. Heartily cooperate with employees to get work done using scientific methods. 4. Divide work and responsibility almost equally between management and workers.

How Do Todays Managers Use Scientific Management?

What contribution did fredrick taylor made ----------->

Use time and motion studies to increase productivity Hire the best qualified employees Design incentive systems based on output

Administrative Management Theory

What did Henri Fayol contribute to Management Theory Administrative Management The study of how to create an organizational structure that leads to high efficiency and effectiveness.

Henri Fayol (1841-1925 )

First complete theory of management 14 principles of management Guidelines for effective management First to talk about the 5 functions of management (Planning, organizing, command, coordination, control)

Fayols Principles of Management

Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization leading to poor quality and worker dissatisfaction.

Authority and Responsibility

Fayol included both formal and informal authority resulting from special expertise.

Fayols Principles of Management

Unity of Command
Employees should have only one boss.

Line of Authority A clear chain of command from top to bottom of the firm. Centralization The degree to which authority rests at the top of the organization. Unity of Direction A single plan of action to guide the organization.

Fayols Principles of Management (contd)

Equity The provision of justice and the fair and impartial treatment of all employees. Order The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Initiative The fostering of creativity and innovation by encouraging employees to act on their own.

Fayols Principles of Management (contd)

Discipline Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel An equitable uniform payment system that motivates contributes to organizational success. Stability of Tenure of Personnel Long-term employment is important for the development of skills that improve the organizations performance.

Fayols Principles of Management (contd)

Subordination of Individual Interest to the Common Interest
The interest of the organization takes precedence over that of the individual employee.

Esprit de corps
Comradeship, shared enthusiasm foster devotion to the common cause (organization).

Behavioral Management Theory

Why was Human Relation Movement Important to Management History Behavioral Management
The study of how managers should behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals. Focuses on the way a manager should personally manage to motivate employees.

Management Science Theory

What Stimulated Quantitative Approach An approach to management that uses rigorous quantitative techniques to maximize the use of organizational resources. Quantitative managementutilizes linear programming, modeling, simulation systems.

Management Science Theory

What Stimulated Quantitative Approach Operations managementtechniques to analyze all aspects of the production system. Total Quality Management (TQM) focuses on improving quality throughout an organization. Management Information Systems (MIS)provides information about the organization.

A Manager Dilemma
Milton Kim is the Managing Director of xyz investment & Securities company in Seoul. He is trying to introduce western style business practices in a country that values consensus and compromise. Concepts such competition, innovation , risk and performance pay incentive are viewed with apprehension and concern. Yet Kim is working to transform South korea growing but traditional rigid securities industry by using these concepts in managing his company.

A Manager Dilemma
Although he emphasize that any changes
are being phased in gradually, he is discovering how hard it can be to adopt global business standards in a society that does not see any need to change. How can kim use what we know about system and contingency approaches to Management as he tries to fundamentally change the way he Manages?

Organizational Environment Theory

Organizational Environment
The set of forces and conditions that operate beyond an organizations boundaries but affect a managers ability to acquire and utilize resources. System Approach- it defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole

The Organization as an Open System

Figure 2.4

Implications of the Systems Approach

Coordination of the organizations parts is essential for proper functioning of the entire organization Decisions and actions taken in one area of the organization will have an effect on other areas of the organization Organizations are not self-contained and, therefore, must adapt to changes in their external environment

Contingency Theory
Contingency Theory The idea that the organizational structures and control systems manager choose depend onare contingent on characteristics of the external environment in which the organization operates. Assumes there is no one best way to manage.

Contingency Theory
Contingency Theory :
The environment impacts the firm and managers must be flexible to react to environmental changes. In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively.

Quiz
1 In the ___________approach to management , managerial practice depends on circumstances A systems B Contingency or situational C. Mc Kinsey's 7-S framework D. Empirical or case

Quiz

2 Which of the following theories gives managers a new way of looking at an organization as a whole and as a part of the larger external environment? A Contingency theory B Theory Z and quality management C Systems theory D Theory X and Theory Y ;

Quiz
3 Under which system does a worker's wage increase in proportion to the output produced? A Time-and-motion study B Piece-rate incentive system C Micro motion study D Gantt Chart

 4 According to the systems theory planning, organizing, leading controlling and technology come under _________ component of an organizational system. a. Inputs b. Transformation process c. Outputs , d. Feedback from environment

Quiz
5 Fayol outlined 14 principles of management. One of them, ________, states that each employee must receive instruction about a particular operation from only one person. A Unity of direction B Discipline C Unity of command D Centralization

Quiz
6 Decreasing the role of subordinate in decision-making is known A Decentralization B Stabilization C Centralization D Organization

7 Which method approach is pure logic and expresses management concepts as mathematical symbols? A Contingency approach B Management science approach C Operational opproach D System approach

8 The __________________refers to the delivery by one individual to another of the right to act, to make decisions, to requisition resources and to perform other tasks in order to fulfill job responsibilities.
A B C D Centralization of power Delegation of authority Centralization of authority Delegation of responsibility

 9 Which one of the following is not one of the principles of management?

A B C D Division of work Remuneration Equity Well defined hierarchy

10 Which of the following system consists of sets of interacting elements operating without any exchange with the environment in which it exists?
A B C D Flexible Open Closed Standard