Contemporary Management NEW ERA OF MANAGEMENT LECTURE 2 Dr. Mohamed Hesham Mansour

“I forget what I was taught, I only remember what I’ve learnt.”

The Evolution of Management Thinking Chapter 2

WHY HISTORY MATTERS TO MANAGERS? A study of the past contributes to understanding both the present and the future??!!!

Historical Perspective Provides a context or environment Develops an understanding of societal impact Achieves strategic thinking Improves conceptual skills Social, political, and economic forces have influenced organizations and the practice of management

Management Perspectives Over Time Exhibit 2.1, p.44 2000 2010 The Technology-Driven Workplace 1990 2010 The Learning Organization 1980 Total Quality Management 2000 1970 Contingency Views 2000 1950 2000 Systems Theory 1940 Management Science Perspective 1990 1930 Humanistic Perspective 1990 1890 Classical 1940 2010 1870

Classical Perspective: 3000 B.C. The Factory system in the 1800s Rational, scientific approach to management – make organizations efficient operating machines Scientific Management Bureaucratic Organizations Administrative Principles

Scientific Management: Taylor 1856-1915 “In the past the man has been first. In the future, the system must be first” Correct movements, tools and sequencing instead of rule-of-thumb General Approach Developed standard method for performing each job. Selected workers with appropriate abilities for each job. Trained workers in standard method. Supported workers by planning work and eliminating interruptions. Provided wage incentives to workers for increased output. Henry Gantt

Scientific Management: Frank& Lillian Gilbreth 1868-1924 “Time and motion study” General Approach Efficiency. The one best way to do work. Brick layers versus surgical operating table. First lady of management with12 children. Cheaper by the dozen Industrial psychology& HR.

Scientific Management Contributions Demonstrated the importance of compensation for performance. Initiated the careful study of tasks and jobs. Demonstrated the importance of personnel and their training. Criticisms Did not appreciate social context of work and higher needs of workers. Did not acknowledge variance among individuals. Tended to regard workers as uninformed and ignored their ideas

Bureaucracy Organizations Max Weber 1864-1920 Prior to Bureaucracy Organizations European employees were loyal to a single individual rather than to the organization or its mission Resources used to realize individual desires rather than organizational goals Systematic approach –looked at organization as a whole

Bureaucracy Organizations Division of labor with Clear definitions of authority and responsibility Personnel are selected and promoted based on technical qualifications Positions organized in a hierarchy of authority Managers subject to Rules and procedures that will ensure reliable predictable behavior Administrative acts and decisions recorded in writing Management separate from the ownership of the organization Exhibit 2.3, p. 49

Administrative Principles Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard 1841-1925 Focus: Organization rather than the individual Delineated the management functions of planning, organizing, commanding, coordinating, and controlling

Henri Fayol 1841-1925 Division of labor Authority& Responsibility 14 General Principles of Management Division of labor Authority& Responsibility Discipline Unity of command Unity of direction Subordination of individual interests Remuneration Centralization Scalar chain Order Equity Stability and tenure of staff Initiative Esprit de corps

Ethics - Power - Empowerment Mary Parker Follett 1868-1933 Importance of common super-ordinate goals for reducing conflict in organizations Popular with businesspeople of her day Overlooked by management scholars Her ideas served as a contrast to scientific management and are reemerging as applicable for modern managers in dealing with rapid change in global environment Leadership – importance of people vs. engineering techniques Ethics - Power - Empowerment

Chester Barnard 1886-1961 Informal Organization Cliques Naturally occurring social groupings Organizations are not machines Acceptance Theory of Authority Free will Can choose to follow management orders

Humanistic Perspective Emphasized understanding human behavior, needs, and attitudes in the workplace Human Relations Movement Human Resources Perspective Behavioral Sciences Approach

Human Relations Movement- OB Emphasized satisfaction of employees’ basic needs as the key to increased worker productivity DAIRY FARM VIEW OF MANGEMENT

Hawthorne Studies “Is it light or something else” Ten year study Four experimental & three control groups Five different tests Test pointed to factors other than illumination for productivity 1st Relay Assembly Test Room experiment, was controversial, test lasted 6 years Elton Mayo Interpretation: money was not the cause of increased output Factor that increased output, Human Relations

Human Resources Perspective Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential

Based on needs satisfaction Abraham Maslow’s Hierarchy of Needs 1908-1970 Self-actualization Esteem Belongingness Safety Physiological Based on needs satisfaction

Douglas McGregor Theory X & Y 1906-1964 Theory X Assumptions Theory Y Assumptions Dislikes work& will avoid it Must be coerced, controlled, directed, or threatened with punishment Prefers direction, avoid responsibility, little ambition, want security Do not dislike work Self direction and self control Seeks responsibility Imagination, creativity widely distributed Intellectual potential only partially utilized

Douglas McGregor Theory X & Y Few companies today still use Theory X Many are trying Theory Y techniques Experiential Exercise: Theory X and Theory Y Scale

Behavioral Sciences Approach Sub-field of the Humanistic Management Perspective Applies social science in an organizational context Draws from economics, psychology, sociology, anthropology, and other disciplines Understand employee behavior and interaction in an organizational setting OD – Organization Development

Management Science Perspective Emerged after WW II Applied mathematics, statistics, and other quantitative techniques to managerial problems Operations Research – mathematical modeling Operations Management – specializes in physical production of goods or services Information Technology – reflected in management information systems

Recent Historical Trends Systems Theory Contingency View Total Quality Management (TQM)

Systems View of Organizations Exhibit 2.5, p. 58

Systems View of Organizations Open systems VS closed systems- interactions Entropy- run down and die Synergy- 1+1=3 Subsystems- dependency Exhibit 2.5, p. 58

Contingency View of Management Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

Total Quality Management - TQM W. Edwards Deming Focuses on managing the total organization to deliver quality to customers Employee involvement Customer focus Benchmarking Continuous improvement

Elements of a Learning Organization Team-Based Structure Learning Organization Empowered Employees Open Information Exhibit 2.7, p. 61

Types of E-Commerce Business-to-Consumer B2C Selling Products and Services Online Consumer-to-Consumer C2C Electronic Markets Created by Web-Based Intermediaries Business-to-Business B2B Transactions Between Organizations Exhibit 2.8, p. 63

Assignment # 2 (GROUPS) (21/02/2010) Prepare and present chapter 3 “The environment and corporate culture”

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