1. PRINCIPLES OF MANAGEMENT-MGT 211 (6) Chap 02 Spring 2016

2. Traditional and Contemporary Issues and Challenges The role of theory and history in management:  Theory is a conceptual framework for organizing knowledge and providing a blueprint for action.  History: Understanding the historical context of management provides a sense of heritage and can help managers avoid the mistakes of others.

3. The Practice of Management Can Be Traced Back Thousands of Years  The Egyptians used management functions of planning, organizing, and controlling when they constructed the pyramids.  Observe the next slide Figure 2.1, it will illustrate a few of the most important management breakthroughs and practices over the last 4000 years:

4. Figure 2.1: Management in Antiquity

5. The Three Traditional Management Perspectives The Classical Management Perspective:  Ideas of the early 20th century theorists and managers converged with the emergence and evolution of large-scale business and management practice.  This perspective actually includes two different viewpoints: scientific management and administrative management

6. Definition: Classical Perspective  “Classical approach of management professes the body of management thought based on the belief that employees have only economical and physical needs and that the social needs & need for job satisfaction either does not exist or are unimportant. Accordingly it advocates high specialization of labour, centralized decision making & profit maximization.”

7.  Classical approach is the oldest formal school of thought which began around 1900 and continued into the 1920s.  Its mainly concerned with the increasing the efficiency of workers and organizations based on management practices, which were an outcome of careful observation.  Classical approach mainly looks for the universal principles of operation in the striving for economic efficiency.  Classical approach includes scientific & administrative Classical Approach Frederick Taylor The Gilberths Henry Gantt Scientific Management Henry Fayol Administrative Management

8. There are basically two types of viewpoints  SCIENTIFIC MANAGEMENT focuses on the “one best way” to do a job. (Individual Worker)  ADMINISTRATIVE MANAGEMENT focuses on the manager & basic managerial functions(Total Organization.)

9. Scientific Management  Scientific management was a theory of management that analyzed and workflows, with the objective of improving labor productivity management of a business, industry, or economy, according to principles of efficiency derived from experiments in methods of work and production, especially from time-and-motion studies- (mass noun)

10. Steps in Scientific Management 1. Develop a science for each element of the job. 2. Scientifically select employees and then train them to do the job. 3. Supervise employees to make sure they follow prescribed methods. Continue to plan the work, but use workers to get the work done.

11. Steps in Scientific Management

12. Administrative Management  Administrative management theory attempts to find a rational way to design an organization as a whole. The theory generally calls for a formalized administrative structure, a clear division of labor, and delegation of power and authority to administrators relevant to their areas of responsibilities.

13. The Classical Management Perspective Today  Contributions  Laid the foundation for later theoretical developments.  Identified management processes, functions, and skills.  Focused attention on management as a valid subject of scientific inquiry.  Limitations  More appropriate approach for use in traditional, stable, simple organizations.  Prescribed universal procedures that are not appropriate in some settings.  Employees viewed as tools rather than as resources.

14. Classical Management in today’s world  The ideas Classical Theorists have presented still have many applications in the management of today's organisations but with some modifications. Managers of today are facing many internal challenges which are similar to the ones faced by the managers during earlier periods. Like Taylor's concern for increase productivity of workers is still shared by managers. The Scientific Management theory is still relevant, even today but it is not as popular as it was in the past. The job design it presented is still widely used in industries today and has made most of the industrial work repetitive, tedious, menial and depressing, and can be noted for example in fast-food restaurants like KFC and McDonald and in assembly lines of automobile manufacturers. McDonald's divides its operation into a number of tasks such as operating a deep fryer or cooking operation, supervising and assign people to perform the tasks. The modern mass automobile assembly lines pour out finished merchandises faster than Taylor could have ever thought off or imagined. In addition to this, the efficiency techniques of Scientific Management ate used in the training of Surgeons.

15. What is Behavioral Management ?  Behavioral management focuses on individual attitudes, behaviors and group processes, and it recognizes the importance of behavioral process in the workplace.  The behavioral management perspective was stimulated by a number of writers and theoretical movements.

16. Hawthorne Studies  In the 1920s Elton Mayo, a professor of Industrial Management at Harvard Business School, and his protégé Fritz J. Roethlisberger led a landmark study of worker behavior at Western Electric, the manufacturing arm of AT&T. Unprecedented in scale and scope, the nine-year study took place at the massive Hawthorne Works plant outside of Chicago and generated a mountain of documents, from hourly performance charts to interviews with thousands of employees. Harvard Business School’s role in the experiments represented a milestone in the dawn of the human relations movement and a shift in the study of management from a scientific to a multi-disciplinary approach.

17. The Hawthorne Plant

18. Western Electric Company- Manufacturing Unit of AT&T

19. Why it was done? * The Hawthorne studies were conducted in order to find out the role of human resource in increasing the production of an organization. * The studies were also to see if individuals improve an aspect of their behavior in response to their awareness of being observed.

20. Illumination Studies Took place from 1924-1927 Was funded by General Electric Conducted by The National Research Council (NRC) of the National Academy of Sciences with engineers from MIT Measured Light Intensity vs. Worker Output Result : – Higher worker productivity and satisfaction at all light levels – Worker productivity was stopped with the light levels reached moonlight intensity. Conclusions: – Light intensity has no conclusive effect on output – Productivity has a psychological component Concept of “Hawthorne Effect” was created

21. The Behavioral Management Perspective  Unlike the classical management perspective, the behavioral management perspective placed more emphasis on individual attitudes and behaviors and on group processes and recognized the importance of behavioral processes in the work place.  Focuses on employee motivation and job satisfaction  Elton Mayo’s Study at General Electric’s Factory

22. The Human Relations Movement  Proposed that workers respond primarily to the social context of the workplace, including social conditioning, group norms, and interpersonal dynamics.  Maslow’s Hierarchy of Needs  McGregor’s Theory X and Theory Y

23. Organizational Behavior  Human behavior in organizations is complex.  The field of organizational behavior draws from a broad, interdisciplinary base of psychology, sociology, anthropology, economics, and medicine.  There are two theories on how employees behave:

24. Behavioral Theory on How Employees Behave Toward Work Theory X Assumptions:  Employees dislike work.  Employees are irresponsible.  Employees lack ambition.  Employees resist change.

25. Another Theory on How Employees Behave Theory Y Assumptions:  Employees are willing to work.  Employees are self directed.  They accept responsibility.  Employees are creative.  They are self-controlled.

26. The Quantitative Management Perspective Management Science vs. Quantitative Management:  Management Science focuses specifically on the development of mathematical models.  Quantitative Management applies quantitative techniques to management.  (see Table 2.4)

28. Operations Management Operations management techniques are generally concerned with helping the organization produce products or services more efficiently.

29. The Systems Perspective of Organizations Inputs from the environment: material inputs, human inputs, financial inputs, and information inputs. Transformation Process: technology, operating systems, administrative systems, and control systems Outputs into the environment: products/services, profits/losses, employee behaviors, and information outputs Feedback

30. Concepts  Synergy: two or more subsystems working together may often be more successful then working alone.  Entropy: a normal process leading to system decline.  Universal perspective: tempting to identify one best way.  Contingency perspective: depending on e lements in that situation.

31. Understanding a System System: an interrelated set of elements functioning as a whole. Types of Systems:  Open System: an organizational system that interacts with its environment.  Closed System: an organizational system that does not interact with its environment.  Subsystem: a system within a broader system.