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Evolution of management theories

FAYOLS PRINCIPLE OF MANAGEMENT


Henry Fayol is a French Industrialist known as the real
father of modern management
Administration instead of management
Classified the activities of an industrial organization into
six groups:
Technical (relating to production)
Commercial (buying, selling and exchange)
Financial (Search for capital and its optimum use)
Security (protection of property and person)
Accounting (including statistics); and
Managerial (planning, organization, command,
coordination and control)
FAYOLS MANAGEMENT

Managerial qualities and Training

General principles of management, and

Elements of management
FAYOLS MANAGEMENT
Managerial qualities and Training
Fayol six types of qualities that a manager
requires physical, mental, moral, educational,
technical ,experience
The most important ability for a worker is
technical; the relative importance of
managerial ability increases as one goes up the
scalar chain, with insight becoming the most
important ability for top level executives
FAYOLS MANAGEMENT
Fayols principles of management:
Division of work
Authority
Discipline
Unity of command
Unity of direction
Subordination of individual interest to general
interest
Remuneration
FAYOLS MANAGEMENT
Centralization
Scalar chain
Order
Equity
Stability of tenure of personnel
Initiative
Esprit de corps
FAYOLS MANAGEMENT
Elements of management
Planning
Organization
Commanding
Coordination
Controlling.
Mc Kinseys 7-S approach

7-S framework for management analysis was

developed by the consulting firm of Mc Kinsey &

Company

Seven Ss are Strategy, Structure, Systems, Style,

Staff, Shared values and Skills.


Mc Kinseys 7-S approach
Strategy: Systematic action and allocation of resources to
achieve company objectives.
Structure: Organization structure and
authority/responsibility relationships.
Systems: Procedures and processes such as information
systems, manufacturing processes, budgeting and control
processes.
Style: The way management behaves and collectively spends
its time to achieve organizational goals.
Staff: The people in the enterprise and their socialization
into the organizational culture.
Shared values (super ordinate goals): The values shared by
the members of an organization that shape its destiny.
Skills: Distinctive capabilities of an enterprise.
The hard Ss
Strategy

Structure.

Systems
The soft Ss
Style/Culture:

Organizational culture

Management Style

Staff

Skills

Shared values
Contributions of Peter F. Drucker
Peter F. Drucker is a management consultant and Professor of

Management in the New York University

Considered as the father of modern management thought

Important books are: The Practice of Management, Managing by

Results, The effective executive, The Age of Discontinuity and

Management: Tasks, Responsibilities and Practices.


Contributions Of Peter .F .Drucker
Against bureaucratic management
Emphasized management with creative and
innovative characteristics.
Managers should not only have skills and
techniques but should have right perspective
putting the things into practice
Need to be good practitioners so that they can
understand the social and cultural
requirements of various organizations and
countries.
Contributions of Peter F. Drucker
Manager has three basic functions which he
must perform to enable the institution to make
its contributions for:
(I)The specific purpose and mission of the
institution
(II)Making work productive and the worker
achieving
(III)Managing social impacts and social
responsibilities
Contributions of Peter F. Drucker
Objective setting function in these areas:
Market standing, innovation, productivity,
physical and financial resources, profitability,
managerial performance and development of
worker performance and attitude, and public
responsibility.
Contributions of Peter F. Drucker
Replacement of bureaucratic structure
Three basic characteristics of an effective
organization structure.
(i)Enterprise should be organized for performance
(ii)It should contain the least possible number of
managerial levels
(iii) It must make possible the training and testing of
tomorrows top managers-giving responsibility to a
manager while still he is young.
Contributions of Peter F. Drucker
Three basic aspects in organizing:
Activity Analysis: Shows what work has to be performed,
what kind of work should be put together, and what
emphasis is to be given to each activity in the organization
structure.
Decision analysis: Takes into account the four aspects of
decision; the degree of futurity in the decision, the impact
of a decision over other functions, number of qualitative
factors that enter into it, and whether the decision is
periodically recurrent or rare. Such an analysis will
determine the levels at which the decision can be made
Contributions of Peter F. Drucker
Relation Analysis: Analysis helps in defining
the structure and also to give guidance in
manning the structure.

Federalism

Management by objective
Systems Thinking
A system is a set of interrelated parts that function as a

whole to achieve a common purpose

Subsystems are parts of a system, such as an

organization, that depend on one another.

Systems thinking is the ability to see both the distinct

elements of a system or situation and the complex and

changing interaction among those elements


Systems Approach
A perspective for viewing problems than a
school of thought
Organization is a system or an entity of
interrelated parts ,one part of system effects
the other automatically
E.g. : Offering low compensation to job
candidates will affect product quality
(Low quality employees accept low wages-
produce low quality goods)
Systems Approach
Organization is an open system one that interacts
with environment
It transforms input into output supplies to outside
world
Outputs are perceived as valuable ,organization
prosper and survive
Feedback loop indicates that acceptance of the
outputs by society gives the organization new
inputs for revitalization and expansion
Managers can benefit from by recognizing that
whatever work they undertake should contribute
something of value to external people (such as
customers and clients).
Systems Approach
Systems theory concepts for managers:
Entropy : The tendency of a system to run down and die
if it does not receive fresh inputs from its environment
Synergy : Whole is greater than the sum of the parts.
When the various parts of an organization work together,
they can produce much more than working
independently.
E.g:Product developers at Cadillac thought about
building a luxury sports utility vehicle called the Escalade.
The developers consulted immediately with
manufacturing, engineering, purchasing, and dealers to
discuss the feasibility of their idea. Working together, the
units of the organization produced a successful product
launch in a tightly competitive market.
Contingency approach
What works in one setting might not work in
another
Managers response to a situation depends on
identifying key contingencies in an organizational
situation
Eg :The organizational structure that is effective
for an internet company such as Google would
not be successful for a large auto manufacturer
such as Ford.
Contingency approach
Business organizations are open and adaptive
system
Open and adaptable systems approach which is
called contingency or situational approach can be
adjusted to the demands of changing
environmental situations
Recognizing all subsystems of an organization
and supra system of environment, are
interconnected and interrelated, and by analyzing
their interrelationships, it helps the management
in finding solutions to specific situations.
Contingency approach
It states that the pattern of management is
influenced by a number of interrelated internal
and external factors, and there is no one best
theory of management or organization. The
situation decides the pattern of organization
and management
E.g. : Financial incentives ,Managerial styles
Total Quality Management
Focuses on managing the total organization to
deliver better quality to customers
High-quality values throughout every activity
within a company, with front-line workers
intimately involved in the process
Four aspect are :
Employee involvement, focus on the customer,
benchmarking, and continuous improvement,
often referred to as kaizen.
TQM is not a quick fix, but companies such as
General Electric, Texas Instruments, Procter &
Gamble, and DuPont achieved astonishing results
in efficiency, quality, and customer satisfaction
through total quality management.
Contemporary Management Tool
Customer Relationship Management
Using the latest information technology to keep in close touch
with customers and to collect and manage large amounts of
customer data.
Helping employees and managers act on customer insights,
make better decisions, and provide superior customer service
EG :Wells Fargo company has successfully implemented CRM
into their firm. The Wholesale Banking division of Wells Fargo
has almost 300 different products and services, with many
business customers who use a range of products. Giving
customers flawless experience .
Amazon has also seen great success through its customer
proposition. It has implemented personal greetings,
collaborative filtering, and more for the customer. They also
used CRM training for the employees to see up to 80% of
customers repeat.
Contemporary Management Tool
Outsourcing
Contracting out selected functions or activities to other
organizations that can do the work more cost efficiently
Supply Chain management
Managing the sequence of suppliers and purchasers,
covering all stages of processing from obtaining raw
materials to distributing finished goods to consumers.
A network of multiple businesses and individuals that are
connected through the flow of products or services.
E.g.Walmart managers have invested in an efficient
supply chain that electronically links farmers and small
manufacturers directly to the stores, maximizing value for
both ends

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