Evolution of management

Evolution of manageentCH-2

Evolution of management Early Contribution Scientific Management Administrative Theory Bureaucracy Theory Human Relation Management Social System Approach Decision Theory Approach

Early Contribution

Adam Smith(1723-1790)- Father of “Liberal Economics” Focus on Market and competition analysis for economic

conditions Specialized Labour And Division of labour leads to Increased Productivities. Rise to the Human Capital. Job Security.

CHARLES BABBAGE(1792-1871)

Benefits of division of labor. Advocate of profit sharing. Developed a method of

observing manufacturing. Focused on Skills used and

suggested for improved practices.

ROBERT OWENS(1771-1858)

Sowed the first seeds of concern for the workers. Advocated better working conditions and better

treatment for worker. Reduced the used of child labour. Focused of Moral persuasion rather corporal

punishment in factories. Opposed evils of the division of labor and his

ideal system believed each man would do a number of different jobs switching easily from one job to another.

Scientific management

FREDERICK W. TAYLOR[1856-1956]- Father of Scientific Management Used time study for Division of Task. Introduced complementary piece-rate incentive

system. Focused on Best method of performing each task. Scientific Selection of worker. Scientific Education and development of Worker. Emphasized on Individual worker not the group.

Criticism of Scientific ManagementWorkers Viewpoint- Unemployment - Workers feel that management reduces employment

opportunities from them through replacement of men by machines. Exploitation - Workers feel they are exploited as they are not given due

share in increasing profits which is due to their increased productivity. Wages do not rise in proportion as rise in production.

Over speeding - The scientific management lays standard output, time so they have to rush up and finish the work in time. These have adverse effect on health of workers.

Employer’s Viewpoint- Expensive - Scientific management is a costly system and a huge

investment is required in establishment of planning dept., standardization, work study, training of workers.

Time Consuming - Scientific management requires mental revision and complete reorganizing of organization.

HENRY Gantt(1861-1919)

Designed graphic aids for management called “Gantt charts”.

For Standard performance “BLACK” and for below performance “RED”

Like Taylor, Gantt also focused on the scientific study of tasks, movements, working conditions, and worker cooperation.

also focused on the connection between the involvement of management and financial interests.

THE GILBRETH(1868-1924, 1878-1972)

Unique contributions to the advancement of motion study, fatigue study and work simplification.

Humanistic approach to the problems of management.

Utilized the principles of psychology and the application of experimental results to improve industrial procedures.

Improving methods while lowering costs and paying higher wages.

Administrative Theory HENRI FAYOL(1841-1925)- Fayol took a top-down approach to management by focusing on

managerial practices to increase efficiency in organizations. The major difference between Fayol and Taylor is Fayol's concern with

the "human" and behavioral characteristics of employees and his focus on training management instead of on individual worker efficiency.

Fayol stressed the importance and the practice of forecasting and planning in order to train management and improve workplace productivity.

Fayol is also famous for putting forward 14 principles of management and the five elements that constitute managerial responsibilities.

Fayol's 14 Principles of Management Division of Work Authority Discipline Unity of Command Unity of Direction Subordination of

Individual Interest Remuneration Centralization

Scalar Chain Order Equity Stability of Tenure

of Personnel Initiative Esprit de Corps

Bureaucratic Management Theory

Bureaucracy-Bureaucracies are all around us. This form of organization, which is comprised of non-elected officials who implement rules, is not only common in the public sector but in the business world as well.

Examples of bureaucracies in the public sector include the Social Security Administration, Environmental Protection Agency and public universities.

Bureaucracy is an administrative system designed to accomplish large-scale administrative tasks by systematically coordinating the work of many individuals.

Weber has observed three types of power in organizations: traditional, charismatic and rational-legal or bureaucratic.

He has emphasized that bureaucratic type of power is the ideal one.

Max weber(1864-1920)

Max Weber Principle of Bureaucratic Theory-

Job specialization Authority hierarchy Formal selection Formal rules and regulations  Impersonality Career orientation

Mary Parker Follett (September 3, 1868 – December 18, 1933) 

Prophet of Management/"Mother of Modern Management" 1. Conflict resolution through Integration (i.e., identifying and meeting

each party's underlying and often compatible need, as opposed to attempting to meet the frequently-incompatible expressed desire of each) often results in a win-win situation.

2. In Mary Parker Follett leadership theory, genuine power is not "coercive" ("power over") but "coactive" ("power with").

3. True leaders, according to Follett's theory, "create group power, rather than expressing personal power.“

Transformational Leadership

Human Relations Management  ELTON MAYO(1880-1949) AND THE HAWTHORNE STUDIES- This theory stressed on formal structure. George Elton Mayo was in charge of certain experiments on human

behavior carried out at the Hawthorne Works of the General Electric Company in Chicago between 1924 and 1927.

His research findings have contributed to organization development in terms of human relations and motivation theory.

He found that work satisfaction depended to a large extent on the informal social pattern of the work group. Where norms of cooperation and higher output were established because of a feeling of importance, physical conditions or financial incentives had little motivational value.

People will form work groups and this can be used by management to benefit the organization.

Cont..

Elements of human relation theory Individual: – According to this theory each person bring his own

set of attitudes and skills to the job. The workers production depends upon the human relation at the work and not the physical or the economic conditions.

Informal organization - It recognizes the existence and influence of informal organization. It is a sect of work relationships that grow out of the mutual interaction of persons working together over a long period of time.

Participative management - He advocated participation of workers in decision making with regard to their working conditions.

Hawthorne Experiment Conclusions

Psychological Contract Interest in Workers Work is a Group Activity Social Aspect of Work Recognize Workers CommunicationConclusion The traditional view of how to motivate employees is that you offer monetary rewards (pay

increases, bonuses etc) for work completion. However the Hawthorne experiments may suggest that motivation can be improved through improving working relationships and social interaction.

Behavioural Management Theory Abraham Maslow

(Need Hierarchy Theory)-Theory of Motivation

McGregor X & Y Theory

Contingency Theory A contingency theory is an organizational theory that claims that there

is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation.

A contingent leader effectively applies his own style of leadership to the right situation.

Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances

There is no one best way of organizing. The appropriate form depends on the kind of task or environment one is dealing with.

Management must be concerned, above all else, with achieving alignments and good fits

Different types or species of organizations are needed in different types of environments

Contingency Model

System Approach

Systems theory is one of the dominant organizational theories in management today. It treats an organization as either an open or closed system. A system is a set of distinct parts that form a complex whole. A closed system is not affected by its environment, while an open system is.

Cont..

Synergy Interdependence Interconnections

– within the organization – between the organization and the environment

Organization as ORGANISM “A set of elements standing in inter-relations”

Decision Theory approach decision making process. Decisions are made through rationale

choice among different altenatives available. It is a choince making activity and choice determines our activity.Decision theories have expanded their area of theory building in the decision making process to the study of decisions, decision-maker, and the enviroment of decision-maker.

Whatever a manager does, he does through making decisions. Hence, decision making is central to managing. Simon developed the administrative model of decision making which describes how decisions are actually made. Managers are often faced with uncertainity and nonprogrammed decision making situation. Simon's decision model is based on two concepts 

(1) bounded rationality and (2) satisficing.

The manager who seeks to take logical and rationaleapproach to decision can follow the following six steps:

1. Recognize and define the decision situation2. Identify appropriate alternatives3. Evaluate each alternative4. Select the best alternative5. Implement the alternative, and6. Evaluate the results and follow up.