Management thought

MANAGEMENT THOUGHT

ERWIN ABADDEPARTMENT OF HEALTH – FINANCE SERVICE

SCHOOLS OF MANAGEMENT THOUGHT

Classical School

Behavioral School

Modern Management School

Classical School

a. Scientific Management – focused on matching people and tasks to maximize efficiency.

b. Bureaucratic Management - ocused on the ideal form of organization

c. Administrative Management – focused on identifying principles that will lead to the creation of the most efficient system of organization and management

Scientific Management

arose because of the need to increase productivity and efficiency. The emphasis was on trying to find the best way to get the most work done by examining how the work process was actually accomplished and by scrutinizing the skills of the workforce.

Taylor & Scientific Management Experiment in Iron Foundry Shoveling Coal Standard Operating Procedure:

Hire the man with the shovel

New Idea: Use standardized shovels!!!

General Principles of Scientific Management

 1) There is one best way to perform a task2) Selection and training of workers3) Incentives should be provided for workers to use the "one best way"4) Managers and labor share work and responsibility.

Bureaucratic Management

MAX WEBER (1864-1920)

a German sociologist, was a teacher at Berlin University. He was a chief exponent of a bureaucratic model. Bureaucratic organization, in Weber’s views, is the most efficient form of organization.

According to Weber the major characteristics of bureaucracy are:

A well defined hierarchy Division of labor and specialization Rules and regulations Impersonal relationships between

managers and employees Records Competence

PRINCIPLE OF BUREAUCRACY

1. a manager’s formal authority derives from the position held within the organization.

2. people should occupy position because of their performance, not because of their personal contact.

3. The extent of each position’s formal authority and task responsibilities, and its relationship to other positions in an organization, should be clearly specified.

4. So that authority can be exercised effectively in an organization,

5. Manager must create a well-defined system of rules, standard operating procedures, and norm

BENEFITS OF BUREAUCRACY

1. The rules and procedure are decided for every work. It lead to consistency in employee behavior.

2. overlapping or conflicting job duties are eliminated.

3. The selection process and promotion procedure are based on merit and expertise.

4. The division of labor help workers in becoming experts in their job.

5. The organization does not suffer when some person leave it. If one person goes then some other occupies that place and the work does not suffer.

Administrative Management

Henri Fayol (1841-1925)

Functions of management1.to forecast and plan2.to organize3.to command4.to coordinate5.to control

Principles of Management

1. Division of Work2. Authority3. Discipline4. Unity of command5. Unity of direction6. Subordination of Individual Interests

to General Interest7. Remuneration of Personnel

Principles of Management

8. Centralization9. Scalar chain10.Order11.Equity12.Stability of Tenure of Personnel13.Initiative14.Esprit de Corps

Limitations of the Classical School of Management

Reliance on Experience Untested assumptions Failure to Consider The Informal

Organization Unintended Consequences Human Machinery Static Conditions

DISADVANTAGES OF BUREAUCRACY1. The system suffers from too much

of red tape and paper work.

2. The employees do not develop belongingness to the organization.

3. The excessive reliance on rules and regulation and adherence to these policies inhibit initiative and growth of the employee. They are treated like machine and not like individuals.

4. The employees become so used to the system, they resist to any change and introduction of new techniques of operations.

Behavioral School

• Neo-classical theory deals with the human factor. Elton Mayo pioneered the human relations to improve levels of productivity and satisfaction.

• This approach was first highlighted by the improvements known as ‘ Hawthrone Experiments’ conducted at Illionois plant of western electric company between 1927 and 1932.

• Neo-classical approach also causes ‘Behavioural Science Management’ which is a further refinement of human relations approach

Behavioral Era

PEOPLE SIDE OF ORGANIZATIONS

BIRTH OF THE PERSONNEL OFFICE

INDUSTRIAL PSYCHOLOGY

MAGNA CARTA OF LABOR

HUMAN RELATIONS

BEHAVIORAL SCIENCE

THEORISTS

• ABRAHAM MASLOW– Father of Humanistic

Psychology– Theory of Motivation/ Hierarchy

of needs: physiological, safety, social esteem, and self actualization

– Each step of the hierarchy must be satisfied before the next can be activated, and that once a need was substantially satisfied, it no longer motivated behavior.

– Self actualization, achieving one’s full potential, summit of a human being’s existence

Free up employees to unleash their full creative

and productive potential

DOUGLAS McGREGOR

THE MODERN MANAGEMENT SCHOOL

Modern management thought has evolved from older theories of management and years of management experience. Additionally, supporting and conflicting theories have been offered over the years leading to more confusion.

Decision theory approach The decision theory school focused on the

managerial decision making which, in its view, is the core management task, pervading all management functions.

Management science theory is an approach to management that focuses

on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.

PRODUCTION AND OPERATIONS MANAGEMENT

This school focuses on the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an identifiable area of management study after World War II. It uses many of the tools of management science.

Systems Approach

Views organization as a system composed of interconnected-and thus mutually dependent-sub-systems.

Sub-systems can have their own sub-sub-systems.

A system can be perceived as composed of some components, functions and processes (Albrecht, 1983)

Characteristics of Systems

Systems have structure, defined by components/elements and their composition;

Systems have behavior, which involves inputs, processing and outputs of material, energy, information, or data;

Characteristics of Systems

Systems have interconnectivity: the various parts of a system have functional as well as structural relationships to each other.

Systems may have some functions or groups of functions

Open versus closed systems. According to Ludwig von Bertlanffy, there are two basic types of systems: closed systems and open systems. Closed system are not influenced by and do not interact with their environments. Open systems interact with their environment. All organizations are open systems, although the degree of interaction may vary.

Contingency Approach

Based on the belief that there cannot be universal guidelines which are suitable for all situations. (Selznick, 1949; Burns and Lorsch, 1967)

Suggests that different environments require different organizational relationships for optimum effectiveness, taking consideration various social, legal, political, technical and economic factors. ( Hellriegel and Slocum, 1973)

Contingency Approach

Based on the belief that there cannot be universal guidelines which are suitable for all situations. (Selznick, 1949; Burns and Lorsch, 1967)

Suggests that different environments require different organizational relationships for optimum effectiveness, taking consideration various social, legal, political, technical and economic factors. ( Hellriegel and Slocum, 1973)

Contingency Approach

Four important ideas of Contingency are:1. There is no universal or one best way to manage 2. The design of an organization and its subsystems must 'fit' with the environment 3. Effective organizations not only have a proper 'fit' with the environment but also between its subsystems4. The needs of an organization are better satisfied when it is properly designed and the management style is appropriate both to the tasks undertaken and the nature of the work group.

Thank You