Principles of Management Session. 2 Management Yesterday & Today USMAN SADIQ (Ph.D. Scholar)

Our expectations? Hard work Honesty Responsible attitude

AFTER STUDYING THIS CHAPTER YOU SHOULD BE ABLE TO: Historical Background Of Management. Classical Approach. Quantitative Approach. Behavioral Approach. Contingency/Contemporary Approach

Major Approaches Of Management Historical Background Contemporary Approach Classical Behavioral Quantitative Early Examples of Management Adam Smith Industrial Revolution Early Advocate Hawthorn Studies Scientific Management System Approach General Administration Contingency Approach Organization Behavior

Industrial Revolution 1- Historical Background Ancient Management Adam Smith Industrial Revolution

Industrial Revolution Ancient Management Egypt (pyramids) China (Great Wall) Adam Smith Published “The Wealth of Nations” in 1776 Advocated the division of labor (job specialization) to increase the productivity of workers Industrial Revolution Substituted machine power for human labor Created large organizations in need of management

Scientific Management 2- Classical Approach Scientific Management General Administrative Theory The first studies of management, which emphasized rationality and making organizations and workers as efficient as possible.

Scientific Management Classical Approach Scientific Management An approach that involves using the scientific method to determine the “One Best Way” for a job to be done.

Fredrick Winslow Taylor The “father” of scientific management Published Principles of Scientific Management (1911) 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

Frank and Lillian Gilbreth Focused on increasing worker productivity through the reduction of wasted motion Developed the micro chronometer to time worker motions and optimize performance. How Do Today’s Managers Use Scientific Management? Use time and motion studies to increase productivity Hire the best qualified employees Design incentive systems based on output

General Administrative Theory An Approach to management that focuses on describing what mangers do and what constitutes good management practice.

Henri Fayol Believed that the practice of management was distinct from other organizational functions like Finance, Production, Distribution, and other typical business functions.

Fayal's 14 Principles of Management Developed fourteen principles of management that applied to all organizational situations. Division of labor. Authority. Discipline. Unity of command. Unity of direction. Subordination of individual interests to the general interests. Remuneration. Centralization. Scalar chain. Order. Equity. Stability. Initiative. Esprit de corps.

Max Weber. Developed a theory of authority structures and relation in 1900s,called bureaucracy. Bureaucracy. A form of organization characterized by division of labor ,a clear defined hierarchy, detailed rules and regulations, and impersonal relationships.

Weber’s Ideal Bureaucracy

3- Quantitative Approach Also called operations research or 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 3-

Quality Management A philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectations

What is Quality Management? Intense focus on the customer. Concern for continual improvement Process-focused. Improvement in the quality of everything. Accurate measurement. Empowerment of employees.

Organization Behavior Behavioral Approach Early Advocates Hawthorne studies Organization Behavior 4-

Early Advocates The study of the actions of people at work; people are the most important asset of an organization

Early Advocates of OB

Hawthorne studies A series of studies during the 1920s and 1930s that provided new insights into individual and group behavior

A series of productivity experiments conducted at Western Electric from 1927 to 1932. Experimental findings Productivity unexpectedly increased under imposed adverse working conditions. The effect of incentive plans was less than expected. Research conclusion Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.

Organizational Behavior The field of study concerned with the actions (behavior) of people at work.

Contemporary Approach System Approach Contingency Approach 5-

System Approach A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.

Basic Types of Systems 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.

The Organization as an Open System

Contingency Approach A management approach which says that organization are different, face different situations (contingencies), and require different ways of managing

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.

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