Management Principles The historical development of management

What is Management? Generic term Changing behaviour and making things happen Formal authority over activities and performance of other people

What is management? Takes place in a structured organisational setting Directed towards achieving certain aims/objectives Achieved through the efforts of people Uses systems and procedures

Historical development Early 19 th century,craft/cottage industries: Skilled craftspeople High variety to meet individual customer needs Work from home/small workshops Low volumes Local production

Historical development Late 19 th century, move towards mass production High volume. Low variety Minimising components & products Parts made to standard design and used for different models Cost control Keeping prices down Employment of sales force and aggressive selling

Military influence At this time, the only large permanent organisation around was the army Command and control structure became the model for: Railways Steel mills Banking institutions Department stores

Command and control model Few at the top giving orders Many at the bottom obeying Remained the model for almost 100 years

World War 1 Large numbers of unskilled pre-industrial people had to be made productive workers in practically no time This led to the introduction of Scientific Management

Scientific Management – Fredrick Winslow Taylor ( ) Worked for Midvale Steel Co as shop superintendent in 1887 Observed workers using different and inefficient work methods Few worked at the speed they were capable of Workers thought that an increase in output would lead to redundancies Poor management enabled them to work slowly

5 principles of Scientific Management (Taylorism) 1. Clear division of tasks and responsibilities between management and workers 2. Use scientific methods to determine the best way of doing a job 3. Scientific selection of the person to do the newly designed job 4. Training the selected worker to perform the job in the specified way 5. Surveillance of workers through the use of hierarchies of authority and close supervision

Example - scientific approach to shovelling 1. Select two good steady workers 2. Get them to use large shovels on heavy material – total amount within a pre-set time is weighed and recorded 3. Shovel size is reduced – shovel load decreases but amount shovelled each day rises 4. Determine best weight per shovel load, identify correct size of shovel for all materials handled 5. Study actual movement of arms and legs 6. Produce correct method for each material and amount that should be shovelled per day per person

Increased productivity In 1898, Taylor was hired by the Bethlehem Steel Corporation to improve their work methods By employing scientific methods he achieved savings of $75,000 per annum at 1911 prices Increased workers’ wages by 60%

Taylor’s ‘deal’ ‘You do it my way, by my standards, at the speed I mandate, and in so doing achieve a level of output I ordain, and I’ll pay you handsomely for it, beyond anything you might have imagined. All you do is take orders, give up your way of doing the job for mine’ (Kanigel, 1997)

Criticisms of Taylor 1. Assumes motivation is linked to earnings 2. Neglects the personal and interaction aspects of performance 3. Neglects the reactions to being timed and closely supervised 4. Neglects the psychological needs of workers – destroys individuality 5. Neglects group pressures in raising production and morale

Criticisms continued Creates organisations that have difficulty adapting to changing circumstances Discourages initiative Creates mindless and unquestioning bureaucracy

Activity Working in small groups, identify 3 current organisations where scientific management principles are used. Give examples to illustrate your answer