Management Yesterday and Today Chapter two Management Yesterday and Today

Requirements for this chapter Learn about the evolvement of main management theories Understand and master the main management theories and their background Form your own understanding of management Describe the current trends and issues facing managers

Content of the chapter ★ evolvement of the Western management theories ★ current trends and issues of management

Development of management practice The Egyptian pyramids and great wall are good examples of early management practice Assembly line and accounting systems are other examples of management practice which is also common for today’s organization The industrial revolution can be thought of the most important pre-twentieth-century influence on management

Evolvement of the Western management theories Frederick W. Taylor The four principles of management: Develop 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 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.

Evolvement of the Western management theories Evaluation of scientific management theory this theory provides many ways for managers to improve working efficiency over emphasis on finding out the best way to do work makes the work intolerant

Evolvement of the Western management theories Henri Fayol The 14 principles of management: Division of work. Discipline. Unity of direction. Remuneration. Scalar chain. Equity. Initiative. Authority. Unity of command. Subordination of individual interests to the general interest. Centralization. Order. Stability. Esprit de corps.

Evolvement of the Western management theories Jobs broken down into simple, routine, and well-defined tasks Max Weber Positions organized in a hierarchy with a clear chain of command Managers career professionals, not owners of units they manage Division of labor Authority hierarchy Career orientation A bureaucracy should have Impersonality Formal selection Formal rules and regulations Uniform application of rules and controls, not according to personalities People selected for jobs based on technical qualifications System of written rules and standard operating procedures

Evolvement of the Western management theories Evaluation of general administrative theory provide a general understanding of organization and management emphasis on strict division of labor, adherence to formal rules and regulations, impersonal application of rules and controls may take away employees’ creativity and the organization’s ability to respond to dynamic environment

Evolvement of the Western management theories Organizational behavior theories Early advocates of OB Robert Owen Late 1700s Chester Barnard 1930s Hugo Munsterberg Early 1900s Mary Parker Follett Early 1900s Created field of industrial psychology—scientific study of people at work suggested using psychological tests for employee selection, learning theory concepts for employee training , and study of human behavior for employee motivation Concerned about deplorable working conditions proposed idealistic workplace argued that money spent improving labor was smart investment One of the first to recognize that organizations could be viewed from perspective of individual and group behavior Proposed more people-oriented ideas than scientific management followers Thought organizations should be based on group ethic Actual manger who thought organizations were social systems that required cooperation Believed manager’s job was tp communicate and stimulate employees’ high levels of effort First to argue that organizations were open systems

Evolvement of the Western management theories The Hawthorne studies ( Elton Mayo Western Electric Company, Cicero, Illinois) Main points of the theory: employees are “social human beings” there exist informal organization within the formal organization the new leading way: improving employees’ satisfaction

Evolvement of the Western management theories Evaluation of organizational behavior theory it believes people are the most important asset for an organization it has fundamental influence on the later development of management theories

Evolvement of the Western management theories Quantitative approach It involves the use of quantitative techniques to improve decision-making. At the beginning quantitative approach was used to solve military problems in World War Two. It contributes directly to management decision making in the areas of planning and controlling.

Evolvement of the Western management theories System approach It is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. As manager, you need to coordinate the work activities of the various parts of the organization and ensure that all the interdependent parts of the organization are working together so that the organizational goals can be achieved.

Evolvement of the Western management theories Contingency approach An approach that says that organizations are different, face different situations (contingencies), and require different ways of managing. Popular contingency variables Organization size Routineness of task technology Environmental uncertainty Individual differences

Current trends and issues of management Globalization Workforce diversity Ethics Customer orientation Innovation Entrepreneurship E-business

Current trends and issues of management Knowledge management and learning organizations Learning organization: an organization that has developed the capacity to continuously learn, adapt, and change. Knowledge management: cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance.

Current trends and issues of management Traditional organization Learning organization Attitude toward change If it’s working, don’t change it. If you aren’t changing it won’t be working for long. Attitude toward new ideas If it wasn’t invented here, reject it. If it was invented or reinvented here, reject it. Who’s responsible for innovation? Traditional areas such as R & D Everyone in organization Main fear Making mistakes Not learning; not adapting Competitive advantage Products and service Ability to learn, knowledge and expertise Manger’s job Control others Enable others

Current trends and issues of management Quality management A philosophy of management that is driven by continual improvement and responding to customer needs and expectations. Quality management is a departure form earlier management theories that were based on the belief that low costs were the only road to increased productivity.

Current trends and issues of management Intense focus on the customer. The customer includes not only outsiders who buy the organization’s products or services but also internal customers who interact with and serve others in the organization. Concern for continual improvement. Quality management is a commitment to never being satisfied. “Very good” is not good enough. Quality can always be improved. Process-focused. Quality management focuses work processes as the quality of goods and services is continually improved.

Current trends and issues of management Improvement in the quality of everything the organization does . Quality management uses a very broad definition of quality. It relates not only to the final product but also to how the organization handles deliveries, how rapidly it responds to complaints, how politely the phones are answered, and the like. Accurate measurement. Quality management uses statistical techniques to measure every critical variable in the organization’s operations. These are compared against standards or benchmarks to identify problems, trace them to their roots, and eliminate their causes.

Current trends and issues of management Empowerment of employees. Quality management involves the people on the line in the improvement process. Teams are widely used in quality management programs as empowerment vehicles for finding and solving problems.

Case Application

Management history Father of scientific management Frederick W. Taylor 1856-1915

Management history

Management history Henri Fayol 1841-1925 Max Web 1864-1920

Management history Quantitative method Information models Computer Statistics Optimization methods Information models Computer simulation