Principles of Management

Lecture 4

MANAGEMENT: YESTERDAY AND TODAY

Figure

Chronological Development of Management Perspectives

22
2

Figure

Subfields of the Classical Perspective on Management

Focuses on the individual workers productivity

Focuses on the functions of management

Focuses on the overall organizational system

23
3

Scientific Management: Taylor

Frederick W. Taylor (1856-1915)
Father of Scientific Management.
attempted to define the one best way to perform every task through systematic study and other scientific methods.
believed that improved management practices lead to improved productivity.

Three areas of focus:

Task Performance
Supervision Motivation
24
4

Task Performance : Scientific management incorporates basic expectations of management, including:

Development of work standards Selection of workers Training of workers Support of workers

Supervision: Taylor felt that a single supervisor could not be

an expert at all tasks.
As a result, each first-level supervisor should be responsible only workers who perform a common function familiar to the supervisor.

This became known as Functional Foremanship.

Motivation: Taylor believed money was the way to

motivate workers to their fullest capabilities.
25
5

Steps in Scientific Management

1 Develop a science for each element of the job to replace old rule-of-thumb methods

2 Scientifically select employees and then train them to do the job as described in step 1

3 Supervise employees to make sure they follow the prescribed methods for performing their jobs

4 Continue to plan the work, but use workers to get the work done

Figure 1.3
6

Administrative Management: Fayol

Henri Fayol (18411925)
First recognized that successful managers had to understand the basic managerial functions.
Developed a set of 14 general principles of management. Fayols managerial functions of planning, leading, organizing and controlling are routinely used in modern organizations.
27
7

Fayols 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. 6. Unity of Direction: One plan of action to guide the organization. 7. Equity: Treat all employees fairly in justice and respect.
28
8

Fayols Principles
8. Order: Each employee is put where they have the most value. 9. Initiative: Encourage innovation. 10. Discipline: obedient, applied, respectful employees needed.

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.
29
9

Bureaucratic Management
Focuses on the overall organizational system. Bureaucratic management is based upon:
Firm rules Policies and procedures A fixed hierarchy A clear division of labor

210
10

Key points of Bureaucracy

Authority is the power to hold people accountable for their actions.
Positions in the firm should be held based on performance not social contacts.

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.

211
11

Behavioral Perspective
Followed the classical perspective in the development of management thought.
Acknowledged the importance of human behavior in shaping management style Is associated with:
Mary Parker Follett Elton Mayo Douglas McGregor Chester Barnard
212
12

Mary Parker Follett

Concluded that a key to effective management was coordination. Felt that managers needed to coordinate and harmonize group effort rather than force and coerce people. Believed that management is a continuous, dynamic process. Felt that the best decisions would be made by people who were closest to the situation.
213
13

Elton Mayo

Conducted the famous Hawthorne Experiments. At Western Electric Co. during 1924-1932. Hawthorne Effect
Productivity increased because attention was paid to the workers in the experiment. Phenomenon whereby individual or group performance is influenced by human behavior factors.

Actually, it appears that the workers enjoyed the attention they received as part of the study and were more productive.

214
14

Maslows Hierarchy of Needs

Five levels

Physiological hunger, thirst, shelter, sex Safety security and protection Social affection, interpersonal relationships Esteem self-respect, achievement status Self-actualization achieving full potential

Usually thought in the form of a pyramid

15

Maslows Hierarchy of Needs

SA

Esteem Needs
Social Needs

Security Needs
Physiological Needs
16

Douglas McGregor
Proposed the Theory X and Theory Y styles of management.
Theory X managers perceive that their subordinates have an inherent dislike of work and will avoid it if at all possible. Theory Y managers perceive that their subordinates enjoy work and that they will gain satisfaction from performing their jobs.
217
17

218
18

The Quantitative Perspective

Characterized by its use of mathematics, statistics, and other quantitative techniques for management decision making and problem solving. This approach has four basic characteristics:
1. A decision-making focus 2. Development of measurable criteria 3. Formulation of a quantitative model 4. The use of computers
219
19

Contemporary Management Theory

The Systems Perspective A system is an interrelated set of elements functioning as a whole. An organization as a system is composed of four elements:
Inputs (material and/or human resources) Transformation processes (technical and managerial processes) Outputs (products and services) Feedback (reactions from the environment)
20

The Integrated Systems Model

Inputs
From the environment:
Human Material Financial Information

Processing
Transformation process:
Technology Operating systems Administrative systems Control systems

Outputs
Into the environment
Product Services Profit/loss Employee behavior Information

Feedback
Developed by N. Zaidi 21

Systems Perspective
Open systems interact with one another and

other environments
Closed systems do not interact with their

environment
Subsystems recognizes the importance of

subsystems because of their interdependence

Developed by N. Zaidi 22

Systems Perspective
Synergy

Subsystems are more successful working together than working alone. The whole, working together, is greater than the sum of its parts.

Entropy
A natural process leading to system decline which can be avoided through organizational change and renewal. Developed by N. Zaidi

23

The Contingency Perspective

The Contingency Perspective suggests that

universal theories cannot be applied to organizations because each organization is unique what works in one situation may not work in another
This requires managers to identify the key contingencies in a given situation.

24

An Integrative Framework of Management Perspectives

Systems Approach Recognition of internal interdependencies Recognition of environmental influences Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling Contingency Perspective Recognition of the situational nature of management Response to particular characteristics of situation Behavioral Management Perspectives Insights for motivating performance and understanding individual behavior, groups and teams, and leadership Quantitative Management Perspectives Techniques for improving decision making, resource allocation, and operations

Effective and efficient management 25

Management in the 21st Century

William Ouchis Theory Z
Japanese-style approach to management developed by William Ouchi
Advocates trusting employees and making them feel like an integral part of the organization. Based on the assumption that once a trusting relationship with workers is established, production will increase.

226
26

Future Leaders Must:

Be thoroughly schooled in the different management perspectives. Understand the various influences that will have a continuing effect on management thinking Be aware of how key business environment variables relate to their organization. Know which elements to select from the various management perspectives that are appropriate for their situation.

Be adaptable to change such that future conditions and developments do not quickly render their chosen approaches obsolete.
227
27