The Evolution Of Management Theory Chapter 2 j1720

The Evolution of Management Theory

The Evolution of Management Theory The Evolution of Management can be divided into 3 parts: 1. Early Classical Approaches: Scientific Management ,istrative management ,and Bureaucracy. 2. Neo- classical Approaches: Human Relations Management and Behavioral Management. 3. Modern Approaches: Management approaches, system approaches and contingency approaches

Evolution of Management Theory Org. Environment

Management Science

Behavioral Management

istrative Management Scientific Management 1890

1940

2000

Scientific Management Theory  The term “ Scientific management” was coined by Louis Brandies”(1910)  It was Frederick W. Taylor who used the term to give a complete and systematic explanation of scientific methods and techniques for promoting the organizational efficiency and economy. Hence, he came to be known as the “ Father of Scientific Management”.

  1. 2. 3. 4.

Scientific management is also known as “ Taylorism”. Books by Taylor: A Piece Rate System (1895) Shop Management (1903) Art of cutting Metals(1906) Principles of Scientific Management(1911)

Other Scientific management thinkers were Frank and Lillian Gilbreth, Henry Gantt etc.

Taylor's Contribution Taylor based his theory of Scientific management based on three assumptions: 1. The organizational functioning can be improved with the application of scientific methods. 2. A good worker is one who does not initiate action, but accepts the order of the management. 3. Every worker is an ‘ economic man', that is, he is motivated by monetary factors.

Principles of Scientific Management 1.

2. 3.

4.

Develop a science for each element of a man’s work, which replaces the old “rule-of-thumb method. By this ‘one best way ‘ of doing a thing can be decided and the standard output can be determined. Scientifically select and then train ,teach and develop workmen Management should fully cooperate with workers, so as to ensure that the work is done in accordance with the scientific principles developed for this purpose. There must be equal division of work and responsibility between management and workmen .

Techniques 1. 2. 3. 4. 5.

Functional Foremanship Motion study Time study Differential piece rate plan Exception Principle

Taylor’s Followers Henry L. Gantt:  Gantt Chart: He designed a chart on which progress of work could be plotted continuously against time. It serves as a planning and controlling device.  Habits of Industry  Minimum wage based incentive system.

 A GANTT chart is a type of bar chart that illustrates a project schedule.  GANTT charts have become a common technique for representing the phases and activities of a project work breakdown structure.  It was introduced by Henry Gantt around 1910 – 1915.

Frank and Lillian Gilbreth  They laid the foundation of modern motion and time study techniques. They invented ‘Therbligs’,as the elemental units of work.  They invented the’ Flow Process chart’ to help in the elimination of unnecessary steps in an operation. Hence, their system was called as ‘ speed work’.

Criticism of Scientific Management Theory

istrative Management

The major exponents of this theory are Henry Fayol, Luther Gulick , Lyndall Urwick , Mary Follet and many more. This theory reached its zenith in 1937 when the Papers on the Science of istration, by Gulick and Urwick was Published.

Fayol’s Principles  Henri Fayol, developed a set of 14 principles: 1. Division of Labor: allows for job specialization.  Fayol noted firms can have too much specialization leading to poor quality and worker involvement. 2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command: Employees should have only one boss. 4. Line of Authority: a clear chain from top to bottom of the firm. 5. Centralization: the degree to which authority rests at the very top.

Fayol’s Principles 6. Unity of Direction: One plan of action to guide the organization. 7. Equity: Treat all employees fairly in justice and respect. 8. Order: Each employee is put where they have the most value. 9. Initiative: Encourage innovation. 10. Discipline: obedient, applied, respectful employees needed.

Fayol’s Principles 11. Remuneration of Personnel: The payment system contributes to success. 12. Stability of Tenure: Long-term employment is important. 13. General interest over individual interest: The organization takes precedence over the individual. 14. Esprit de corps: Share enthusiasm or devotion to the organization.

Bureaucratic Management

istrative Management  Seeks to create an organization that leads to both efficiency and effectiveness.  Max Weber developed the concept of bureaucracy. 

A formal system of organization and istration to ensure effectiveness and efficiency.

Bureaucratic Principles Written rules

System of task relationships

A Bureaucracy should have

Fair evaluation and reward

Hierarchy of authority

Key points of Bureaucracy Authority is the power to hold people able for their actions. Positions in the firm should be held based on performance not social s. Position duties are clearly identified. People should know what is expected of them. Lines of authority should be clearly identified. Workers know who reports to who. Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates.  Sometimes, these lead to “red-tape” and other problems.

Behavioral Management

The Human Relations Movement

 The Hawthorne studies ( 1924-1932) formed the basis for the rise of Human Relations theory. These theories shook the foundations of classical approach, that is, the concept of economic man and the role of structure of formal organization.  These studies were conducted in the Western Electric company at Hawthorne ( near Chicago- USA) by HBS under the guidance of Prof. Elton Mayo.

Contd.. The studies were conducted in the following four stages: 1. Illumination Experiment(1924-27) 2. Relay Assembly test room experiment( 1927) 3. Mass Interviewing Programme(1928-31) 4. Bank Wiring Experiment(1931-32)

Management Science

Management Science  Uses rigorous quantitative techniques to maximize resources. Quantitative management: utilizes linear programming, modeling, simulation systems. Operations management: techniques to analyze all aspects of the production system. Total Quality Management (TQM): focuses on improved quality. Management Information Systems (MIS): provides information about the organization.

Organization-Environment Theory  Considers relationships inside and outside the organization.  The environment consists of forces, conditions, and influences outside the organization.  Systems theory considers the impact of stages: Input: acquire external resources. Conversion: inputs are processed into goods and services. Output: finished goods are released into the environment.

Systems Considerations  An open system interacts with the environment. A closed system is selfcontained.  Closed systems often undergo entropy and lose the ability to control itself, and fails.  Synergy: performance gains of the whole sur the components.  Synergy is only possible in a coordinated system.

The Organization as an Figure 2.4 Open System Input Stage

Conversion Stage

Output Stage

Raw Materials

Machines

Goods Services

Human skills

Sales of outputs Firm can then buy inputs

Contingency Theory  Assumes there is no one best way to manage.  The environment impacts the organization and managers must be flexible to react to environmental changes.  The way the organization is designed, control systems selected, depend on the environment.  Technological environments change rapidly, so must managers.