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UNIT II –Evolution of Management Therioes

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1 UNIT II –Evolution of Management Therioes
Classical Management theory: F. W. Taylor, Max Weber, Fayol’s principles Behavioural school: Human Relations movement and behavioural science approach System Approach Contingency Approach Management concepts

2 The Pre-modern Era Ancient massive construction projects
Egyptian pyramids Great Wall of China Michelangelo the manager Management concepts

3 Adam Smith’s Contribution To The Field Of Management
Wrote the Wealth of Nations (1776) Advocated the economic advantages that organizations and society would reap from the division of labor: Increased productivity by increasing each worker’s skill and dexterity. Time saved that is commonly lost in changing tasks. The creation of labor-saving inventions and machinery. Management concepts

4 The Industrial Revolution’s Influence On Management Practices
Machine power began to substitute for human power Lead to mass production of economical goods Improved and less costly transportation systems became available Created larger markets for goods. Larger organizations developed to serve larger markets Created the need for formalized management practices. Management concepts

5 Management Perspectives Over Time
Management Perspectives Over Time Management concepts

6 Classical approach It Emphasizes organisational efficiency to increase organisational success. Management concepts

7 Classical Contributions
Classical approach Bureaucarcy Scientific management theorists Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry Gantt General administrative theorists Henri Fayol and Max Weber Management concepts

8 Contd/- Max Weber (Germany)
Bureaucracy: Ideal type of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships Management concepts

9 Weber’s Ideal Bureaucracy
Division of Labor Authority Hierarchy Formal Selection Formal Rules and Regulations Impersonality Career Orientation Management concepts

10 Bureaucracy Advantages Disadvantages Specialization Rationality
Predictability Democracy Rigidity Impersonality Compartmentalization of activities Red tape Management concepts

11 Frederick W. Taylor ( ) founder of scientific Management one of the first people to study the behavior and performance of people at work was a manufacturing manager became a consultant and taught other managers how to apply his scientific management techniques believed that by increasing specialization and the division of labor, the production process will be more efficient. Management concepts

12 Midvale experience At Midvale Steel Company, he found that individual workers had their own notions about work and different workers performed the same task in different ways He realized that greater output was possible on the part of the workers but most of them were engaged in what he called ‘systematic soldiering.’ The solution: the first task of management was to know what constituted a proper day’s work He conducted time studies at Midvale Steel Company which proved of immense use to him Management concepts

13 Bethlehem Experiments – Pig-Iron Handling
Taylor was hired by the Bethlehem Steel Company to increase the output of one of the larger machine shops which had been a serious production bottleneck Conclusion: Periodic rests enabled a worker to produce more than continuous work. By a systematic resting time and improved methods average productivity was raised from 12.5 tons to 47.5 tons per day. Taylor began selecting workers and training them in handling pig-iron The original crew was 75, this reduced dramatically The earnings of the crew increased from USD1.15 to USD 1.85 per man per day. Management concepts

14 Definition of scientific management
Scientific management is the art of knowing exactly what you want your men to do and then seeing that they do it in the best and cheapest way. F.W TAYLOR Management concepts

15 Scientific Management
Frederick W. Taylor The Principles of Scientific Management (1911) Advocated the use of the scientific method to define the “one best way” for a job to be done Believed that increased efficiency could be achieved by selecting the right people for the job and training them to do it precisely in the one best way. To motivate workers, he favored incentive wage plans. Separated managerial work from operative work. Management concepts

16 Taylor’s Four Principles of Management
Develop a science for each element of an individual’s work, which replaces the old rule-of-thumb method. Scientifically select and then train, teach, and develop the worker. (Previously, workers chose their own work and trained themselves as best they could.) Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers. (Previously, almost all the work and the greater part of the responsibility were thrown upon the workers). Management concepts

17 Separation of planning & doing Time and motion studies Standardization
Key Concepts of Scientific Management Separation of planning & doing Time and motion studies Standardization Differential piece rate system Functional foremanship Scientific selection & training Economy Bilateral mental revolution Management concepts

18 Separation of planning & doing
Before Taylor’s scientific management, the worker himself used to decide how to work and what instruments were necessary. Thus, he planned and did the work also. Taylor emphasized that planning function should be separate from actual performance and should be given to specialists or managers who should perform it in a scientific way. Management concepts

19 Time Study Technique enabling manager to ascertain standard time taken for performing a specified job. Technique based on study of an average worker having reasonable skill and ability. Taylor maintained that Fair day’s work should be determined through observations, experiment and analysis by keeping in view an average worker. Management concepts

20 Motion Study Movement of body and limbs required to perform a job are closely observed. purpose - To eliminate useless motions and determine the best way of doing the job. Motion study increases the efficiency and productivity of workers by cutting down all wasteful motions. Management concepts

21    Functional Foremanship
                                                                          Technique developed to improve the quality of work as single supervisor may not be an expert in all the aspects of the work. Therefore workers are to be supervised by specialist foreman. The scheme of functional foremanship is an extension of principle of specialization at the supervisory level. Management concepts

22 Management concepts

23 Standardization Standardization is a means of achieving economics of production. It seems to ensure - The line of product is restricted to predetermined type, form, design, size, weight, quality. etc There is manufacture of identical parts and components. Quality & standards have been maintained. Standard of performance are established for workers at all levels. Management concepts

24 Differential Piece Wage Plan
This tech of wage payment is based on efficiency of worker. The efficient workers are paid more wages than inefficient one. This system is a source of incentive to workers who try improving their efficiency in order to get more wages. It also encourages inefficient workers to improve their performance and achieve their standards. It leads to mass production which minimizes cost and maximizes profits. Management concepts

25 Scientific selection & training: Each worker must be scientifically selected (on the basis of education, experience and aptitude) trained and developed rather than passively leaving them to train themselves. Economy: While applying scientific management, not only scientific and technical aspects should be considered but consideration should be given to profit and economy. Cost estimates and control techniques should be used. Management concepts

26 Bilateral mental revolution:
This principle states that there should be cooperation between the management and the workers. For this, a mental change in both parties is necessary. They should move from conflict towards cooperation Management concepts

27 Evaluation of Taylor The idea of separating planning from doing has been criticized. Functional foreman ship meant multiplicity of command. This violates the principle of unity of command. The concept of mental revolution never materialized. The concept of time and motion and differential piecework system of wages are based on “economic man” assumption. In reality, man has other needs also, namely, social and psychological. People do not work individually but are guided by group norms and expectations. Management concepts

28 Implementation Problems
Rather than sharing performance gains with workers through bonuses, only increased the amount of work that each worker was expected to do. Unhappy workers: more work but same pay; increase in performance meant fewer jobs and greater layoffs; dissatisfied with monotonous and repetitive jobs. Managers did not care about the workers’ well beings Workers withheld job knowledge to protect their jobs and pay. Workers develop informal work rules that discourage high performance . Management concepts

29 Organizational Responses and Results
Increased mechanization of the work process. Example: Henry Ford introduced moving conveyor belts in factory. Machine imposed pace to push employees to perform at higher levels. The combination of 2 management practices: 1) achieving the right mix of worker task specialization and 2) linking people and tasks by the speed of the production line =savings in cost and increase in output. Introduction to ethical issues in work places. Management concepts

30 Scientific Management Contributors
Frank and Lillian Gilbreth Bricklaying efficiency improvements Time and motion studies (therbligs) Henry Gantt Incentive compensation systems Gantt chart for scheduling work operations Management concepts

31 Advantages of scientific management
To the employer; Higher productivity Lower cost of production Better utilisation of resources Improved quality of work. To the employee; Improvement in working condition. Higher earnings Better skills through training

32 Advantages of scientific management
To the society; Higher standard of living Better employee employer relations Improvement in work methods

33 Administrative Management
General administrative theorists Writers who developed general theories of what managers do and what constitutes good management practice Henri Fayol (France) Fourteen Principles of Management: Fundamental or universal principles of management practice Management concepts

34 Fayol’s Fourteen Principles of Management
Division of work Authority Discipline Unity of command Unity of direction Subordination of the individual Remuneration Centralization Scalar chain Order Equity Stability of tenure of personnel Initiative Esprit de corps Management concepts

35 Human Resources Approach
Robert Owen Claimed that a concern for employees was profitable for management and would relieve human misery. Hugo Munsterberg Created the field of industrial psychology—the scientific study of individuals at work to maximize their productivity and adjustment. Management concepts

36 Human Resources Approach
Mary Parker Follett Recognized that organizations could be viewed from the perspective of individual and group behavior. Chester Barnard Saw organizations as social systems that require human cooperation. Expressed his views in his book The Functions of the Executive (1938). Management concepts

37 Elton Mayo Father of Human Relations Approach
Conducted a series of experiments at the Hawthrone plant of the western Electric Company. Management concepts

38 Hawthorne Studies Conducted in late 1920’s
Western Electric Hawthorne plant Showed importance of the individual in the workplace Showed the presence of a social system in the workplace 26

39 Hawthorne studies defined
A series of experiments in which the output of the workers was observed to increase as a result of improved treatment by their managers. Named for their site, at the Western Electric Company plant in Hawthorne, Illinois.

40 Hawthorne Studies A series of studies done during the 1920s and 1930s that provided new insights into group norms and behaviors Hawthorne effect Social norms or standards of the group are the key determinants of individual work behavior. Changed the prevalent view of the time that people were no different than machines. Management concepts

41 Hawthorne studies defined
A series of experiments in which the output of the workers was observed to increase as a result of improved treatment by their managers. Named for their site, at the Western Electric Company plant in Hawthorne, Illinois.

42 Hawthorne Studies: Workplace Lighting
Originally intended to examine effects of lighting on productivity Scientific management proposed that physical conditions affect productivity Result: Productivity increased regardless of lighting level Conclusion: Increased productivity was due to workers’ receiving attention 27

43 Illumination Studies The first illumination study was made in three departments The illumination level in each department was increased at stated intervals Puzzling results Increased production did not correspond with increased lighting Reduced production did not correspond with reduced lighting

44 Illumination Studies The second illumination study utilized a test group and a control group. Illumination intensities were varied in the test group and compared to the control group. Both groups showed increases in production rates that were not only substantial but also nearly identical.

45 Illumination Studies The third illumination study reduced the lighting for the test group and held the control group constant. Efficiency of both groups increased. Production rates increased in the test group until the light became so poor that the workers complained.

46 Illumination Studies Conclusions:
Employee output was not necessarily related to lighting conditions, and Too many variables had not been controlled in the experiments.

47 Hawthorne Studies: Piecework Pay
Examined effects of group piecework pay system on productivity Workers under piecework system should produce as much as possible Scientific management assumes that people are motivated only by money Result: Production less than maximum Conclusion: Social pressure caused workers to produce at group-norm level 28

48 Human Relations Movement
Based on a belief in the importance of employee satisfaction—a satisfied worker was believed to be a productive worker. Advocates were concerned with making management practices more humane. Dale Carnegie Abraham Maslow Douglas McGregor Management concepts

49 Social Events That Shaped Management Approaches
Classical approach Desire for increased efficiency of labor intensive operations Human resources approach The backlash to the overly mechanistic view of employees held by the classicists. The Great Depression. The quantitative approaches World War II Management concepts

50 The Systems Approach Defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole Closed system : a system that is not influenced by and does not interact with its environment Open system: a system that dynamically interacts with its environment Stakeholders: any group that is affected by organizational decisions and policies Management concepts

51 The Contingency Approach
The situational approach to management that replaces more simplistic systems and integrates much of management theory Four popular contingency variables Organization size Routineness of task technology Environmental uncertainty Individual differences Management concepts

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