Principles of Management Lecture 2. Evolution of Management
The Egyptian pyramids and the Great Wall of China are proof that projects of tremendous scope, employing tens of thousands of people, were completed in ancient times.
The City of Venice in the 1400s was a major economic and trade center. Warehouse & inventory systems were used to keep track of materials, human resource, and accounting systems.
1776: Adam Smith: Wealth of Nations. He argued that there is a lot of economic advantage in the division of labour or job specialization.
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Industrial Revolution. It is more economical and efficient to manufacture goods in factories rather than at home. A manager was needed in the factories.Four Major Approaches:
- Classical
- Behavioural
- Quantitative
- Contemporary
Formal study of management began early in the 20thcentury.Emphasis on rationality; making workers and organizations efficient.
Classical theories: Scientific Management (F.W. Taylor; Frank & Lillian Gilbreth) & General Administrative Theory (Henri Fayol; Max Weber).
Scientific Management
Taylor is known as the “father” of scientific management.
The use of scientific methods to define the “one best way” for a job to be done.
Taylor worked at the Midvale and Bethlehem Steel companies in Pennsylvania. No work standards … took it easy on the job.
More than 2 decades spent in determining the one best way for jobs to be done.
Scientific Management
Taylor’s Scientific Management Principles:
1.Develop a science for each element of work
2.Scientifically select and then train, and develop the worker
3.Cooperate with workers to ensure that work is done according to the principles of science developed
4.Divide work and responsibility almost equally between management and workers
[Read: Taylor’s Pig Iron Experiment]
Frank and Lillian Gilbreth: Construction contractor & Psychologist.
Studied work to eliminate inefficient hand-and-body motions.
Invented the microchronometer.
General Administrative Theory
Focused on what managers do and constituted good management practice.
While Taylor was concerned with first-line managers, and the scientific method, Fayol was concerned with activities of all managers.
Developed the 14 principles of management (Henri Fayol):
•Division of work
•Authority
•Discipline
•Unity of Command
•Unity of Direction
•Remuneration
•Centralisation
•Scalar Chain
•Order
•Equity
•Stability of tenure of personnel
•Initiative
•Esprit de corps
•Subordination of individual interests to general interest
General Administrative Theory
Max Weber, a German sociologist; developed a theory of authority structures … bureaucracy.
Bureaucracy is a form of organization characterized by division of labour, clearly defined hierarchy, detailed rules and regulations, and impersonal relationships.
He recognized that the “ideal bureaucracy” did not exist in reality.
Bureaucracy and scientific management are alike in ideology; both emphasized rationality, predictability, impersonality, technical competence and authoritarianism.
Weber’s ideas were however less practical than Taylor’s.
Organizational Behaviour research has inspired what managers do today: motivating, leading, building trust, working with a team, managing conflict, etc.
Robert Owen
•Concerned about deplorable working conditions
•Money spent improving labour is smart investment
Hugo Munsterberg
•Pioneered industrial psychology
•Suggested the use of psychological tests
Chester Barnard
•Organizations are social systems that require cooperation
•Argued that organization sare open systems
Hawthorne Studies
Conducted at the Western Electric Company Works; initially started as a scientific management experiment.
Elton Mayo and associates …
When employees are given special attention, productivity is likely to change regardless of state of working conditions
Informal work groups, and social environment greatly influence productivity.
Stimulated an interest in human behavior in organisations.
The use of quantitative techniques to improve decision making. Also known as management science. Involves the use of statistics, computer simulations and quantitative echniques to management activities.
Total Quality Management: Management philosophy devoted to continual improvement and responding to customer needs and expectations.
Customer: Anyone who interacts with the organization’s products or services internally or externally.
Continual improvement: Possible only with accurate measures.
i.Intense focus on customer
ii.Concern for continual improvement
iii.Process focused
iv.Improvement in quality in everything the organization does
v.Accurate measurement
vi.Empowerment of employees
Two contemporary management perspectives: Systems & Contingency System: A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Open & Closed Systems.
Contingency (situational): Organizations are different, face different situations, and require different ways of managing.
Some contingency variables:
a.Organization size
b.Routineness of task technology
c.Environmental uncertainty
d.Individual differences