THE HISTORY OF MANAGEMENT (Chapter 1) Session 2

Management in the Early Ages Management has been practiced for a long time and has existed for thousands of years. History has proof that projects of tremendous scope, employing numerous people, were completed. The Egyptian pyramids The Great Wall of China The city of Venice (major economic and trade center in the 1400s)

Job Specialization Adam Smith wrote ‘The Wealth of Nations’ (1776) The book talked about Division of Labor (or Job Specialization) and the economic advantages that organization and society would gain from this. Breaking down jobs into narrow and repetitive tasks. Division of Labor increased productivity by increasing each worker`s skill and dexterity, saving time lost in changing tasks.

Industrial Revolution Started in the late 18th century Machine power was substituted for human power It became more economical to manufacture goods in factories rather than at home These large efficient factories needed “managers” to-forecast demand, ensure supplies, assign tasks to people, direct daily activities and so on Not much guidance available to managers

Major Approaches to Management

Classical Approach (1911-1947) 1. The Scientific Management Frederick Winslow Taylor- “Father” of scientific management. Develop “one best way” for a job to be done. Productivity could be increased by putting the right person on the job with the correct tools and equipment, having the workers follow instructions exactly Microchronometer- detect wasted motion and eliminate it.

Classical Approach (1911-1947) 2. General Administrative Theory Henry Fayol`s attention was directed at the activities of all managers. Focused on what managers did and what constituted good management practice. Fayol developed 14 principles of management that could be applied to all organizational situations and taught in schools. Fayol`s 14 Principles of Management are given in the following slide

Classical Approach (1911-1947) 3. Bureaucracy Weber a German sociologist studied and developed a theory of authority structures He called the ideal type of organization: bureaucracy An organization characterized by division of labor, clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. The following slide shows what Weber thought to be was an ideal bureaucracy.

Weber: Bureaucracy (The ideal type)

Behavioral Approach (Late1700s-1950s) Since management if about people, this area researches the actions (Behaviour) of people at work. Known as organizational behaviour (OB) 1. Hawthorne Studies wanted to see what led to increase in group productivity results indicated that the incentive plan had less effect on a worker’s output group pressure, acceptance, and security had more Concluded that social norms and group standards were key determinants of individual work behavior.

Quantitative Approach (1940s-1950s) The use of quantitative techniques to improve decision making. Applying statistics, optimization models, computer simulations, and other quantitative techniques to management activities. The airline industry innovated a unique boarding process called “reverse pyramid” Has saved at least 2 minutes in boarding time 1. Total quality management (TQM) is a management philosophy devoted to continual improvement and responding to customer needs and expectations.

Contemporary Approach (1960s-Present) Earlier approaches focused on managers` concerns inside the organization. During this time researchers began to look at the external environment outside the organization. 2 contemporary management perspectives are part of this approach. 1. System: a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. i.e. Closed and Open System.

Open System

Contemporary Approach (1960s-Present) 2. Contingency: This approach is also known as situational approach which says that organizations are different, face different situations (Contingencies) and require different ways of managing. “if, then” approach.