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The Evolution of Management Theory

Why study management theory?

Theories provide a stable focus for understanding what we experience Theories enable us to communicate efficiently and thus move into more and more complex relationships with other people They help us to keep learning about our world (When theories dont match our experiences, Globalizations, Internet)

Schools of Management
Scientific Management
Need to increase productivity

Classical Organization Theory School

Need to find guidelines for managing such complex organizations as factories

Human Relations Movement Emerged partly because the classical approach did not achieve sufficient production efficiency and workplace harmony The Behavioral School
Hawthorne Light House Experiments

The Management Science School

Approaching management problems through the use of mathematical techniques for their modeling, analysis and solution

The systems Approach

View of the organization as a unified, directed system of interrelated parts

The Contingency Approach

The Situational Approach

Scientific Management
Fredrick Winslow Taylor Was an American mechanical engineer who sought to improve industrial efficiency
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

Contributors to Scientific Management Theory

Henry L. Gantt Industrial Efficiency: Industrial efficiency can only be produced by the application of scientific analysis to all aspects of the work in progress. The industrial management role is to improve the system by eliminating chance and accidents. The Task And Bonus System: He linked the bonus paid to managers to how well they taught their employees to improve performance. The social responsibility of business: He believed that businesses have obligations to the welfare of society that they operate in. Abandoned the differential rate system as having too little motivational impact Every worker who finished a days assigned work load win a 50 cent bonus.

Contributors to Scientific Management Theory

The Gilberths Frank B. and Lillian M. Gilberth They saw their approach was more concerned with workers' welfare than Taylorism, which workers themselves often perceived as primarily concerned with profit. This difference led to a personal rift between Taylor and the Gilbreths which, after Taylor's death, turned into a feud between the Gilbreths and Taylor's followers. Collaborated on fatigue and motion studies and focused on ways of promoting the individual workers welfare.

Classical Organization Theory School

Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factories Max Weber Developed a theory of authority based on an ideal type of organization (bureaucracy) Emphasized rationality, predictability, German political impersonality, technical competence, economist and and authoritarianism. sociologist He stressed on technical competence and performance evaluations to be made entirely on the basis of merit.

14 principles of Henry Fayol

Division of work Authority Discipline Unity of command Unity of direction Subordination of the individual interest to the corporate good Remuneration

14 principles of Henry Fayol

Centralization/decentralization Scalar Order Equity Stability of tenure Initiative Esprit de corps

Human Relations Movement

Mary Parker Follett Built on the basis framework of the classical school She introduced many new elements especially in the area of human relations and organizational structure. She believed that no one could become a whole person except as a member of a group Human beings grew through their relationships with others in organizations (Believed in power of groups) She called management the art of getting things done through people. Her holistic model of control took into account not just individuals and groups but the effects of environmental factors as politics, economics and biology

Chester I. Barnard
People come together in formal organizations to achieve ends they cannot accomplish working alone. But as they pursue the organization's goals, they must also satisfy their individual needs Barnard taught that the three top functions of the executive were to 1. Establish and maintain an effective communication system, 2. Hire and retain effective personnel, and 3. Motivate those personnel.

Chester I. Barnard
Central thesis: An organization can operate efficiently and survive only when the organizations goals are kept in balance with the aims and needs of the individuals working for it. Bernard asked the managers to understand employees zone of indifference i.e. what the employee would do without questioning the managers authority The more activities that fell within an employee's zone of indifference, the smoother and more cooperative an organization would be.

Douglas McGregor
Theory X Theory Y


People always do not follow a predicted or expected patterns of behavior
The Hawthorne experiments

The Hawthorne Studies

A series of productivity experiments conducted at Western Electric (Bell Telephone Co.) from 1927 to 1932 (Elton Mayo) Relationship between lightning and productivity Experiment 1: Unequal lightning Experiment 2: Small groups in control rooms Higher wages, flexible work schedules and rest hours, shortened work day and week Experimental findings Productivity unexpectedly increased under observation

The Management Science School

Originated in Great Britain during World War - II Based on numbers Operations research teams consisting of Mathematicians, Physicians and other scientists) OR procedures were used for civil purposes after the World War II and were called the Management Science School Use of computers and communication devises helped to its popularity Criticism It pays less attention to relationships in the organizations It emphasis only the aspects of organization that can be captured in numbers, missing the importance of people and relationships.

The Systems Approach

What is a System? This approach views the organization as a unified, purposeful system composed of interrelated parts. It gives managers a way of looking at the organization as a whole and as a part of the larger, external environment It believes that activity of one segment of an organizations affects the other. Manufacturing Vs Marketing Systems managers grasp the importance of webs of business relationships
A collection of parts that operate interdependently to achieve a common purpose.

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 with their environment by taking in inputs and transforming them into outputs that are distributed into their environment.

The Contingency Approach

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.

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