1. Management Yesterday and Today
Chapter 2
Management Yesterday and Today
Instructor: Tasawar Javed

2. Historical Background of Management
Ancient Management
Egypt (pyramids) and China (Great Wall)
Venetians (floating warship assembly lines)
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
Instructor: Tasawar Javed

3. Exhibit 2–1 Development of Major Management Theories
Instructor: Tasawar Javed

4. Major Approaches to Management
Scientific Management
General Administrative Theory
Quantitative Management
Organizational Behavior
Systems Approach
Contingency Approach
Instructor: Tasawar Javed

5. Instructor: Tasawar Javed
CLASSICAL THEORISTS
‘This viewpoint emphasises efficiently managing work and organisations. It comprises three different management approaches: scientific, administrative and bureaucratic.’
Classical theorists emphasised the efficient management of work and organisations. It is called ‘classical’ because it includes early works and contributions comprising the core of the management field.
Early theorists concentrated on specific solutions to specific problems and were uncoordinated. These included increased productive efficiency and mechanisation and the call for the development of management principles.
Further discussion can be found on page 34.
Instructor: Tasawar Javed

6. Instructor: Tasawar Javed
CLASSICAL THEORISTS
Scientific management
F. W. Taylor, F. & L. Gilbreth, H. Gantt
Bureaucratic management
M. Weber
Administrative management
H. Fayol, C. Barnard
Pages 34-39
Instructor: Tasawar Javed

7. Scientific Management
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.
Instructor: Tasawar Javed

8. Exhibit 2–2 Taylor’s Four Principles of Management
Develop a science for each element of an individual’s 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.
Instructor: Tasawar Javed

9. SCIENTIFIC MANAGEMENT
Frank & Lillian Gilbreth
Time and motion studies
Human implications of Scientific Management
Henry Gantt
Pay incentives
Gantt chart
These three people were advocates of Scientific Management contemporary to Taylor. Frank Gilbreth developed detailed work methods while his academic wife Lillian developed the theoretical aspects of these approaches.
Henry Gantt was a close associate of Taylor and contributed the graphic aid for planning, scheduling and control known as the Gantt chart, along with unique pay incentive approaches to encourage efficiency and productivity in workers.
Further discussion can be found on page 36.
Instructor: Tasawar Javed

10. Scientific Management (cont’d)
Frank and Lillian Gilbreth
Focused on increasing worker productivity through the reduction of wasted motion
Developed the microchronometer to time worker motions and optimize work 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
Instructor: Tasawar Javed

11. General Administrative Theory
Henri Fayol
Believed that the practice of management was distinct from other organizational functions
Developed fourteen principles of management that applied to all organizational situations
Max Weber
Developed a theory of authority based on an ideal type of organization (bureaucracy)
Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism
Instructor: Tasawar Javed

12. Exhibit 2–3 Fayol’s 14 Principles of Management
Division of work.
Authority.
Discipline.
Unity of command.
Unity of direction.
Subordination of individual interests to the general interest.
Remuneration.
Centralization.
Scalar chain.
Order.
Equity.
Stability of tenure of personnel.
Initiative.
Esprit de corps.
Instructor: Tasawar Javed

13. BUREAUCRATIC MANAGEMENT
Weber’s Ideal Bureaucracy
Specialisation of labour
Formal rules & procedures
Impersonality
Well-defined hierarchy
Advancement on merit
Weber believed that the irrational behaviour of owners, managers and administrators (such as nepotism and class bias) impeded the effective functioning of organisations. His idea of a ‘rational’ approach to management outlined how an organisation might function effectively. N.B. the term ‘bureaucracy’ has come to describe the negative aspects of large, rule-based organisations, but this was not the sense in which Weber used the term.
Further discussion can be found on pages
Instructor: Tasawar Javed

14. Exhibit 2–4 Weber’s Ideal Bureaucracy
Instructor: Tasawar Javed

15. ADMINISTRATIVE MANAGEMENT
Organising
Planning
Commanding
Henri Fayol
Page 39
Controlling
Co-ordinating
Instructor: Tasawar Javed

16. QUANTITATIVE MANAGEMENT VIEWPOINT
‘Focused on mathematics, statistics and information aids supporting managerial decision making and organisational effectiveness.’
The Quantitative Management viewpoint emerged during the Second World War and was a response to the logistical problems encountered from the sheer size of logistical problems encountered in coordinating and controlling the resources of the allied countries. It is a technical and rational approach that focuses on the use of mathematics, statistics and information as aids to supporting managerial decision making.
Further discussion can be found on page 45.
Instructor: Tasawar Javed

17. Quantitative Approach to Management
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
Instructor: Tasawar Javed

18. QUANTITATIVE MANAGEMENT VIEWPOINT
Management science
‘Approach aimed at increasing decision effectiveness through use of sophisticated mathematical models and statistical methods.’
Operations management
‘Function or field of expertise primarily responsible for managing production and delivery of an organisation’s products and services.’
Management information systems
‘Field of management focused on designing and implementing computer- based information systems for use by management.’
Pages 45-46
Instructor: Tasawar Javed

19. Understanding Organizational Behavior
Organizational Behavior (OB)
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
Instructor: Tasawar Javed

20. Instructor: Tasawar Javed
Exhibit 2–5 Early Advocates of OB
Instructor: Tasawar Javed

21. BEHAVIOURAL THEORISTS
Human relations movement
Abraham Maslow
Hierarchy of needs
Douglas McGregor
Theory X & Y
The Human Relations movement within the Behavioural approach to management suggested that the key to productivity was for managers to show a greater concern for the degree of personal satisfaction that workers had in their jobs and the creation of more collaborative/co-operative relationships between supervisor and worker.
Further discussion can be found on pages
Instructor: Tasawar Javed

22. MASLOW’S HIERARCHY OF NEEDS
Self-actualisation
Esteem
Social
Page 43
Safety
Physiological
Instructor: Tasawar Javed

23. Capable of self-direction Can make good decisions
McGREGOR’S THEORY X & Y
THEORY X
THEORY Y
Work is natural
Work avoiding
Need to control
Capable of self-direction
Avoid responsibility
Seek responsibility
Pages 43-44
Workers seek security
Can make good decisions
Instructor: Tasawar Javed

24. Instructor: Tasawar Javed
The Hawthorne Studies
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.
Instructor: Tasawar Javed

25. CONTEMPORARY VIEWPOINTS
Systems theory
‘Approach based on the idea that organisations can be visualised as systems.’
Contingency theory
‘Viewpoint arguing that appropriate managerial action depends on the particular parameters of the situation.’
Contemporary approaches may be viewed as additional to the Classical, Behavioural and Quantitative approaches although they have not yet attained the status of enduring viewpoints. They are regarded as contemporary innovations in thinking.
Further discussion can be found on pages
Instructor: Tasawar Javed

26. Instructor: Tasawar Javed
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.
Instructor: Tasawar Javed

27. Exhibit 2–6 The Organization as an Open System
Instructor: Tasawar Javed

28. 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.
Instructor: Tasawar Javed

29. CONTEMPORARY VIEWPOINTS
Theory Z
‘Concept combining positive aspects of American and Japanese management into a modified approach aimed at increasing managerial effectiveness while remaining compatible with the norms and values of American society and culture.’
Page 48
Instructor: Tasawar Javed

30. 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.
Instructor: Tasawar Javed

31. Exhibit 2–7 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 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.
Instructor: Tasawar Javed

32. Current Trends and Issues
Globalization
Ethics
Workforce Diversity
Entrepreneurship
E-business
Knowledge Management
Learning Organizations
Quality Management
Instructor: Tasawar Javed

33. Current Trends and Issues (cont’d)
Globalization
Management in international organizations
Political and cultural challenges of operating in a global market
Working with people from different cultures
Coping with anticapitalist backlash
Movement of jobs to countries with low-cost labor
Ethics
Increased emphasis on ethics education in college curriculums
Increased creation and use of codes of ethics by businesses
Instructor: Tasawar Javed

34. Exhibit 2–8 A Process for Addressing Ethical Dilemmas
Step 1: What is the ethical dilemma?
Step 2: Who are the affected stakeholders?
Step 3: What personal, organizational, and external factors are important to my decision?
Step 4: What are possible alternatives?
Step 5: Make a decision and act on it.
Instructor: Tasawar Javed

35. Current Trends and Issues (cont’d)
Workforce Diversity
Increasing heterogeneity in the workforce
More gender, minority, ethnic, and other forms of diversity in employees
Aging workforce
Older employees who work longer and do not retire
The increased costs of public and private benefits for older workers
An increasing demand for products and services related to aging.
Instructor: Tasawar Javed

36. Current Trends and Issues (cont’d)
Entrepreneurship Defined
The process of starting new businesses, generally in response to opportunities.
Entrepreneurship process
Pursuit of opportunities
Innovation in products, services, or business methods
Desire for continual growth of the organization
Instructor: Tasawar Javed

37. Current Trends and Issues (cont’d)
E-Business (Electronic Business)
The work preformed by an organization using electronic linkages to its key constituencies
E-commerce: the sales and marketing aspect of an e-business
Categories of E-Businesses
E-business enhanced organization
E-business enabled organization
Total e-business organization
Instructor: Tasawar Javed

38. Exhibit 2–9 Categories of E-Business Involvement
Instructor: Tasawar Javed

39. Current Trends and Issues (cont’d)
Learning Organization
An organization that has developed the capacity to continuously learn, adapt, and change.
Knowledge Management
The cultivation of a learning culture where organizational members systematically gather and share knowledge with others in order to achieve better performance.
Instructor: Tasawar Javed

40. Exhibit 2–10 Learning Organization versus Traditional Organization
Instructor: Tasawar Javed

41. Current Trends and Issues (cont’d)
Quality Management
A philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectations
Inspired by the total quality management (TQM) ideas of Deming and Juran
Quality is not directly related to cost
Poor quality results in lower productivity
Instructor: Tasawar Javed

42. CONTEMPORARY VIEWPOINTS
Total Quality Management (TQM)
‘Approach highlighting collective responsibility for product and service quality, and encouraging individuals to work together to improve quality.’
Pages 48-50
Instructor: Tasawar Javed

43. Exhibit 2–11 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.
Instructor: Tasawar Javed