Management Yesterday and Today

Learning Objectives
Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach
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Historical Background of Management Major Approaches to Management

Historical Background of Management

Adam Smith
Published The Wealth of Nations in 1776 Advocated the division of labor (job specialization) to increase the productivity of workers Division of Labor: Breakdown of jobs into narrow and repetitive tasks Pin Industry Example
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Historical Background of Management

Industrial Revolution -18th century
Substituted machine power for human labor Created large organizations in need of management Machine power, Mass production and efficient transportation Economical ways of production
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Major Approaches to Management

Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach
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Scientific Management
The use of Scientific methods to determine one best way for a job to be done.
Fredrick W. Taylor Frank and Lillian Gilbreth
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Scientific Management
F. W. Taylor Father of Scientific Management
Published Principle of Scientific Management in 1911. Pig Iron Experiment (o/p is increased from 12.5 tons to 48 tons per day)
Putting the right person on the right job with correct tools and equipment Standardize the method of doing job Providing economic incentive to the worker (based on o/p).
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Scientific Management
Taylors Four Principles of Management

Develop a science for each element of an individuals work, which will replace the old rule-of-thumb method. Scientifically select and then train, teach, and develop the worker. 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. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers.

MGTSC 211: PRINCIPLES OF MANAGEMENT

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Scientific Management
Frank and Lillian Gilbreth
Focused on increasing workers productivity through the reduction of wasted motions (movements). Michrchronometer- recording workers motions and amount of time spent doing each motion Therbings precise way of analyzing workers hand movements.
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Scientific Management
How do todays managers use scientific management?
Use time and motion studies to increase productivity Hire the best qualified employees Design incentive systems based on output
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General Administrative Theory

Developed more general theories of what managers do and what constitutes good management practice.
Henry Fayol Max Weber
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General Administrative Theory

Henry Fayol Father of Administrative Management
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14 Principles of management Classification of business activities

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General Administrative Theory

Technical Commercial Financial
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Security

Accounting

Managerial

Business Activities
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General Administrative Theory

Division of Work Authority and Responsibility Subordination of individual interest Discipline Unity of Command
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Unity of Direction

Remuneration

Centralization

Scalar Chain

Order

Equity

Stability of Staff

Initiative

Espirit de corps

14 Principles of Management

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General Administrative Theory

Max Weber
Developed theory of authority structures and relations Described an ideal type of organization (bureaucracy) Bureaucracy : a form of organization characterized by division of labor, clear defined hierarchy, detailed rules and regulations and impersonal relationships
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General Administrative Theory

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Quantative Approach
It involves the use of quantative techniques to improve decision making Operations Research (Management Science) Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems Focuses on improving managerial decision making by applying:
Statistics, optimization models, information models, and computer simulations
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Organizational Behavior
Organizational Behavior (OB)
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The study of the actions of people at work; People are the most important asset of an organization

Early OB Advocates
Robert Owen Hugo Munsterberg Mary Parker Follett Chester Barnard

The Hawthorne Studies

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Early Advocates of OB
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The Hawthorne Studies

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A series of productivity experiments conducted at Western Electric from 1927 to 1932 Elton Mayo Illumination Experiment
Productivity unexpectedly increased under imposed adverse working conditions Illumination intensity was not directly related to group productivity.

Incentive Pay System

The effect of incentive plan was less than expected

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The Hawthorne Studies

Research Conclusion
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Social norms, group standards and attitudes were the key determinants of individual output and work behavior than do monitory incentives.

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The Systems Approach

System Defined
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A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Closed systems
Are not influenced by and do not interact with their environment (all system input and output is internal).

Open systems
Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.

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The Systems Approach

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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 in other areas of the organization. Organizations are not self-contained and, therefore, must adapt to changes in their external environment.
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Contingency Approach
Also sometimes called the situational approach. There is no one universally applicable set of management principles (rules) by which to manage organizations. Organizations are individually different, face different situations (contingency variables), and require different ways of managing.
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