Presentation on theme: "Principles of Management"— Presentation transcript:
1 Principles of Management Week 2 – Management History
2 Development of Major Management Theories Exhibit 2.1
3 Historical Background Of Management Two major events“Wealth of Nations” by Adam Smithdivision of labor - breakdown of jobs into narrow and repetitive tasks increased productivityHierarchical control and management – managers think and workers workIndustrial Revolutionsubstitution of machine power for human powerlarge organizations required formal management1Adam Smith the father of Management2
4 Scientific Management 1F.W. Taylor - Principles of Scientific ManagementDevelop a science for each element of an individual’s work, which will replace the old rule-of-thumb method.Scientifically select and then train, teach, and develop the worker.Heartily cooperate with the workers so as toensure that all work is done effectively and efficiently.Divide work and responsibility almost equally between management and workers.Four assumptions: are they valid?One best way.Managers think and workers work.
5 General Administrative Theorists 2Henri Fayolconcerned with making the overall organization more effectivedeveloped theories of what constituted good management practiceproposed a universal set of management functions: Plan, Organize, Control, Leadpublished principles of management (next slide)
6 Division of work.Authority.Discipline.Unity of command.Unity of direction.Subordination of individual interest to the interests of the organization.Remuneration.Centralization.Scalar chain.Order.Equity.Stability of tenure of personnel.Initiative.Esprit de corps.
7 developed a theory of authority structures and relations Max Weberdeveloped a theory of authority structures and relationsBureaucracy - ideal type of organizationdivision of laborclearly defined hierarchydetailed rules and regulationsimpersonal relationships
9 Quantitative Approach 3Operations Research (Management Science)use of quantitative techniques to improve decision makingapplications of statisticsoptimization modelscomputer simulations of management activities
10 Behavioral School 4 study of the actions of people at work early advocateslate 1800s and early 1900sbelieved that people were the most important asset of the organizationideas provided the basis for a variety of human resource management programsE.g., selection, motivation, turnover
11 started in 1924 at Western Electric Company Hawthorne Studiesstarted in 1924 at Western Electric Companybegan with illumination studiesintensity of illumination not related to productivityElton Mayo - studies of job designrevealed the importance of social norms as determinants of individual work behaviorchanged the dominant view that employees were no different from any other machinesHawthorne experiment
12 Results from the Relay Assembly Test Room 15-min. rests + lunchSame + Sat. a.m. offStandardIn general, productivityincreased with each changein work conditions132124Same + 4:30 p.m. stopSame + 4 p.m. stop116Percentage of Standard OutputTwo 5-min. restsTwo 10-min. restsSix 5-min. rests15-min. rests + lunch108100Standard workconditions
13 The Systems Approach 5 System Defined Basic Types of Systems A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.Basic Types of SystemsClosed systemsAre not influenced by and do not interact with their environment (all system input and output is internal).Open systemsDynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.
15 Implications :Coordination of the organization’s parts is essential for proper functioning of the entire organization.The key to performance is to have good process.Organizations are not self-contained and, therefore, must adapt to changes in their external environment.Renewing driving licsence
16 The Contingency Approach 6Also 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.
17 Popular Contingency Variables Organization sizeRoutineness of task technologyEnvironmental uncertaintyIndividual differencesLabor market conditionsGovernment regulations and lawsRecruiting process of HSBC and CitibankExhibit 2.7
19 The drivers of change Technology Globalization Leverage capability Changing nature of work and relationsGlobalizationIncrease competitionIncrease choice/combination of resources & customersCulture issueHow many workers work in an assembly line in Toyota?Who made the IBM notebook?India write the program. Korean the screen.. Cut the costCX relocate the IS department, CLP relocate the Accounting department.An challenge for the managers.Keen competition. 100 companies today 98% will die in 10Years.