1. Bzupages.com MANAGEMENT: Management History ?

2. Bzupages.com Historical Background of Management Ancient Management – Egypt (pyramids) and China (Great Wall) – Venice-Venetians (floating warship assembly lines along the canals and materials were added to the ship) – Taj Mahal is also a tangible evidence. Adam Smith – Published “The Wealth of Nations” in 1776 Advocated the division of labor (job specialization) to increase the productivity of workers For e.g. Pins, Restaurant, football players etc

3. Bzupages.com Industrial Revolution – Started in 18 th Century when Substituted machine power for human labor – Created large organizations in need of management – Needed “someone” to ensure that enough material was on hand to make products, to assign tasks to people, direct daily activities

4. Bzupages.com EARLY ERA’S EXAMPLES Egyptian Pyramids Massive Stone design Built 5000 years ago 2.3 million stone blocks More than 100,000 workers for 20 years Purpose: This was basically built for a king tomb.

5. Bzupages.com GREAT CHINA WALL 688 BC to 1644 AD First 300 years – 500km Total 6000 km Renovation took 200 years Purpose: –To mark Territories –To defend areas and To protect silk road,i.e Business Road.

6. Bzupages.com Exhibit 2–1Development of Major Management Theories

7. Bzupages.com Major Approaches to Management Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach

8. Bzupages.com Elephant and blind men SideWall Trunk Snake Leg Tree Tail Rope Same elephant but each observes depends where he stands. The four approaches are limited view of a larger animal.

9. Bzupages.com Scientific Management Fredrick Winslow Taylor (1856-1915) – 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.

10. Bzupages.com 1-Study each part of the task scientifically, and develop a best method to perform it. 2- Carefully select workers and train them to perform a task using the scientifically developed method. 3- Cooperate fully with workers to ensure they use the proper method. 4- Divide work and responsibility so management is responsible for planning work methods using scientific principles. Taylor’s Four Principles of Scientific Management

11. Bzupages.com Scientific Management (cont’d) Frank and Lillian Gilbreth – Focused on increasing worker productivity through the reduction of wasted motion ( hand-and-body motions) and way of reducing task fatigue. – Developed the proper use of tools and equipment for optimizing work performance – They invented a device called a microchromometer that recorded a worker’s motions and the amount of time spent doing each motion.

12. Bzupages.com 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

13. Bzupages.com ADMINISTRATIVE VIEW OF MANAGEMENT Henri Fayol (1841-1925)Henri Fayol (1841-1925) a successful French industrialist, developed theory to be taught to individual who had administrative responsibilities. Within “managerial activities” Fayol identified five functions: Planning,Organizing,Commonding,Co-ordinating and Controlling.Henri Fayol is considered the father of “modern management”

14. Bzupages.com – Believed that the practice of management was distinct from other organizational functions –Developed fourteen principles of management that applied to all organizational situations Henri Fayol

15. Bzupages.com Exhibit 2–3Fayol’s 14 Principles of Management 1.Division of work. 2.Authority. 3.Discipline. 4.Unity of command. 5.Unity of direction. 6.Subordination of individual interests to the general interest. 7.Remuneration. 8.Centralization. 9.Scalar chain. 10.Order. 11.Equity. 12.Stability of tenure of personnel. 13.Initiative. 14.Esprit de corps.

16. Bzupages.com Fayol’s 14 Principles of Management published in 1949 1.Division of Work Specialization increases output by making employees more efficient, i.e specialized work should be divided. 2. Authority Managers must be able to give order. Authority gives them this right. Along with authority, however, goes responsibility. Managers must be able to give order. Authority gives them this right. Along with authority, however, goes responsibility. 3.Discipline Employees must obey and respect the rules that govern the organization. Employees must obey and respect the rules that govern the organization.

17. Bzupages.com 4. Unity of Command An employee should receive orders from one superior only. 5. Unity of direction. The organization should have a single plan of action to guide managers and workers. 6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole

18. Bzupages.com 7. Remuneration Workers must be paid a fair wage for their services. Workers must be paid a fair wage for their services. 8. Centralization This term refers to the degree to which subordinates are involved in decision making. This term refers to the degree to which subordinates are involved in decision making. 9. Scalar Chain The line of authority from top mgt to the lowest ranks is scalar chain. The line of authority from top mgt to the lowest ranks is scalar chain.

19. Bzupages.com Fayol’s 14 Principles of Management 10. Order People and materials should be in the right place at the right time. 11. Equity Managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

20. Bzupages.com Fayol’s 14 Principles of Management 13. Initiative Employees who are allowed to originate and carry out plans will exert high levels of effort. Employees who are allowed to originate and carry out plans will exert high levels of effort. 14. Esprit de corps Promoting team spirit will build harmony and unity within the organization. Promoting team spirit will build harmony and unity within the organization.

21. Bzupages.com 2. General Administrative Theories Bureaucratic Management Bureaucratic Management Max Weber (1864-1920) a German sociologist coined the term “Bureaucracy” Max Weber (1864-1920) a German sociologist coined the term “Bureaucracy” defined as a form of organization marked by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships Characteristics of Weber’s ideal bureaucracy Characteristics of Weber’s ideal bureaucracy Specialization of a labor Specialization of a labor Formalization of rules and procedures Formalization of rules and procedures Formalization of the career advancement process to be based on merit Formalization of the career advancement process to be based on merit

22. Bzupages.com Exhibit 2–4Weber’s Ideal Bureaucracy

23. Bzupages.com Quantitative Approach to Management  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

24. Bzupages.com Understanding Organizational Behavior  Organizational Behavior (OB)  The study of the actions (behavior) of people at work called OB; people are the most important asset of an organization  Early OB Advocates  Robert Owen  Hugo Munsterberg  Mary Parker Follett  Chester Barnard

25. Bzupages.com Exhibit 2–5Early Advocates of OB

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

27. Bzupages.com The Systems Approach  System Defined  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.

28. Bzupages.com Exhibit 2–6The Organization as an Open System

29. Bzupages.com Implications of the Systems Approach  Coordination of the organization’s 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.

30. Bzupages.com The Contingency Approach Contingency Approach Defined – 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.

31. Bzupages.com It would be surprising to find universally applicable management rules that would work in all situations( depends on the situation). The primary value of the CA is that it stresses that there are no SIMPLISTIC or UNIVERSAL rules for managers to follow. More than 100 different variables have been identified. The 4 popular Contingency variables are:

32. Bzupages.com Exhibit 2–7Popular 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 nonroutine 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.