1. Historical Perspective on Management Theories
Thursday, September 29, 2016
Chapter 2
Historical Perspective on Management Theories
References:
Organization Theory and Design (Richard L. Daft)
Organizational Theory, Design, and Change (Gareth R. Jones)
Management (W. Griffin)
Resource Person: Furqan-ul-haq Siddiqui

2. History
We are not makers of history. We are made by history Martin Luther King, Jr.
“Study the past if you would define the future” Confucius 
If one wants to run, he must learn how to walk.  If one wants to teach, he must learn.  If one wants to define the future, he must study the past. 

3. PREHISTORY
The Practice of Management Can be Traced Back Thousands of Years
Stonehenge (3000 BC) is located in the UK. Its construction heavily relied on management functions. Their stones are cutover 300 miles a way.
The Egyptians used management functions of planning, organizing, and controlling when they constructed the Pyramids. (1400 AD)
The Great Wall of China (6,400 km /4,000 miles) was built, rebuilt, and maintained between the 5th century BC and the 16th century to protect the northern borders of the Chinese Empire from Xiongnu.
Anno Domini (sometimes found in the irregular form Anno Domine), abbreviated as AD or A.D., and Before Christ, abbreviated as BC or B.C., are designations used to number years in the Julian and Gregorian calendars. The calendar era to which they refer is based on the traditionally reckoned year of the conception or birth of Jesus Christ, with AD denoting years after the start of this epoch, and BC denoting years before the start of this epoch. There is no year zero in this scheme, so the year AD 1 immediately follows the year 1 BC.

4. Slavery is a legal or economic system in which principles of property law are applied to humans allowing them to be classified as property, to be owned, bought and sold accordingly, and they cannot withdraw unilaterally from the arrangement.
While a person is a slave, the owner is entitled to the productivity of the slave's labour, without any remuneration.

5. CRAFT SYSTEM
Before the Industrial Revolution, productive economic activity was based upon a craft system consisting of small shops owned by master artisans. Artisans used to hire apprentice and once an apprentice of a craft had finished his apprenticeship, he would become a journeyman searching for a place to set up his own shop and make a living. After he set up his own shop, he could then call himself a master of his craft.

6. The Industrial Revolution
The Industrial Revolution was a period in the late 18th and early 19th centuries (The First Industrial Revolution, which began in the 18th century, merged into the Second Industrial Revolution around 1850).
Prior to the Industrial Revolution, which began in Britain in the late 1700s, manufacturing was often done in people’s homes, using hand tools or basic machines. Revolution marked a shift to powered, special-purpose machinery, factories and mass production. The iron and textile industries, along with the development of the steam engine, played central roles in the Industrial Revolution, which also saw improved systems of transportation, communication and banking.
Started from Britain and the changes subsequently spread throughout Europe, North America, and eventually the world.

8. THE CLASSICAL MANAGEMENT PERSPECTIVE
This perspective actually includes two different viewpoints: scientific management and administrative management.
Scientific Management (Taylorism/Taylor system)
During 1st few years of 19th century, businesses were expending and capital was available but labor was in short supply. Hence, managers began to search ways to use existing labor efficiently. Their work led to the development of SM which is Concerned with improving the performance of individual workers (i.e., efficiency). SM is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity to increase efficiency.
Frederick Taylor (1856–1915)- Considered the “Father of Scientific Management.”
. The core ideas of the theory were developed by Frederick Winslow Taylor in the 1880s and 1890s

9. Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual at work
Scientific Management was concerned with efficiency.  There were two aspects to this, Taylor realized.  The workers must have the correct tools, work plan, and environment to support their working as efficiently as possible; and the workers must want to work as efficiently as possible.
Taylor claimed to have conducted experiments in varying conditions.  For example, if the job was shoveling, a larger shovel blade could move more material in a single stroke, but it would also tire the men more.  Taylor gave the men shovels with smaller and smaller blades each day until the amount shoveled in a day began to fall.  Thus he determined the most efficient size of the tool for each task. Through studies such as these, Taylor was able to reduce the number of shovelers at the Bethlehem Steel Works, where he was then employed, from 500 to 140.
A rule of thumb is a principle with broad application that is not intended to be strictly accurate or reliable for every situation. It is an easily learned and easily applied procedure for approximately calculating or recalling some value, or for making some determination 7

11. Summing up, the Scientific Management is related to…
Develop a standard method for performing each job
Select workers with appropriate abilities for each job
Train workers in the standard method previously developed
Support workers by planning their work and eliminating interruptions.
Provide wage incentives to workers for increased output
SM boosted productivity but increased severe labor/management conflict, apathy, boredom, and wasted human resources.
Individuals are different from each other: the most efficient way of working for one person may be inefficient for another

12. Administrative Management Theory
Scientific management deals with the jobs of individual employees, administrative management focuses on managing the total organization. This theory is also named as Fayolism.
Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining engineer and director of mines
Wrote “General and Industrial Management.”
Helped to systematize the practice of management.
Was first to identify the specific management functions of planning, organizing, leading, and controlling.
Taylor's main focus was on the task, whereas Fayol was more concerned with management. 12

13. Division of work: Work should be divided among individuals and groups to ensure  that effort and attention are focused on special portions of the task.              
Authority: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority.                                      
Discipline: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.                                                                              
Unity of command: Workers should receive orders from only one manager.                                                                                              
Unity of direction: The entire organization should be moving towards a common objective in a common direction.                                                                                                      
Subordination of individual interests to the general interests: The interests of one person should not take priority over the interests of the organization as a whole.
Remuneration: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered before pay fixation. 
Centralization: The process of systematically retaining power and authority in the hands of higher-level managers while decentralization is the process of systematically delegating power and authority throughout the organization to middle and lower-level managers . The degree to which centralization or decentralization should be adopted depends on the specific organization.                                                                          
Scalar chain: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities.
Order: There is a place for everything and everything in its place. Proper scheduling of work and timetables to complete work is important.                                                                        
Equity: Fairness &impartiality                                                                                                    
Stability of tenure of personnel is a principle stating that in order for an organization to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organization. Consequently, an organization must take steps to obtain as much stability in its management and workforce as possible.
Initiative: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.                                                    
Espirit de corps: Management should encourage harmony and general good feelings among employees.

14. c. Weber’s Theory of Bureaucracy
A bureaucracy is "a body of non-elective government officials" and/or "an administrative policy-making group“.
Bureaucracy is an administrative system designed to accomplish large-scale administrative tasks by systematically coordinating the work of many individuals.
Max Weber (German Sociologist 1864 – 1920)
His theory of bureaucracy is based on a rational set of fixed rules & regulations & guidelines for structuring organizations.
Max Weber is believed to be one of the biggest influences in political science, philosophy and sociology. His biggest contribution was probably in the field of bureaucracy and how he tried to make the system more efficient and effective.

15. Features (Characteristics) Of Weber’s Bureaucracy:
Hierarchy
Each level controls the level below and is controlled by the level above. A formal hierarchy is the basis of central planning and centralized decision making.
Highest Office
High Office
High Office
Low Office
Low Office
Low Office
Lowest Office
Lowest Office
Lowest Office
Lowest Office

16. Legislative Relations
2. Division of Labor
Jobs are broken down into well defined tasks so members know what expected from them and hence they can become extremely competent at their tasks.
The provision of the incumbent with necessary authority to carry out these functions
Executive
Policy & Planning
Operations
Strategic Planning
Policy Development
Regional
Management
Special Projects
Legislative Relations
Office Staffing
Maintenance

17. 3. Consistency/ Impersonal Relations
Individuals are governed through the system of official authority and rules. Official positions are free from personal involvement, emotions and sentiments.
Not Special
Not Special
Not Special
Not Special
Not Special
Not Special
Not Special
Not Special
Not Special
Not Special

18. 4. Qualification
Officials are selected on basis of technical qualifications, appointed not elected, and compensated by salary.
How to manage
How to carry out duties
Knowledge of the rules
PhD
Master’s
Master’s
Bachelor’s
Bachelor’s
Bachelor’s
Associate’s
Associate’s
Associate’s
Associate’s

19. 5. Official Record:
Bureaucratic organization is characterized by maintenance of proper official records. The decisions and activities of the organization are formally recorded and preserved for future reference. Rules are stable and can be learned. Decisions are recorded in permanent files.

20. 6. Devotion to Purpose/Duty
Devotion is to your work and role, not to person above you.
“[official] is not considered the personal servant of a ruler”.
Devoted to Bureau Management
Devoted to Division Management
Devoted to Division Management
Devoted to Planning
Devoted to Policy
Devoted to Region
Devoted to Project
Devoted to Schmoozing
Devoted to Office
Devoted to Toilets

21. 7. Advancement and Seniority
The official is a full-time employee and looks forward to a life-long career. Advancement is on the bases of performance.
Promoted here 6 months ago
(and don’t know what the Hell I’m doing)
Promoted here 7 years ago
Promoted here 17 years ago
Started here 25 years ago

22. THE BEHAVIORAL MANAGEMENT PERSPECTIVE
Unlike the classical management perspective, the behavioral management perspective placed more emphasis on individual attitudes and behaviors and on group processes and recognized the importance of behavioral processes in the work place.
Proposed that workers respond primarily to the social context of the workplace, including social conditioning, group norms, and interpersonal dynamics.
Hugo Munsterberg (1863–1916)
A German psychologist, considered the father of industrial psychology, wrote “ Psychology and Industrial Efficiency,” a pioneering work in the practice of applying psychological concepts to industrial settings.
He suggested that psychologists could make valuable contributions to managers in the area of employee selection & motivation

23. a. The Hawthorne Studies
Hawthorne Works of the Western Electric Company;
The Hawthorne Studies refers to a series of studies conducted from 1924 to 1932 at the Hawthorne Works of the Western Electric Company. The study was initiated to investigate how the level of lighting would affect employee fatigue and performance. The researchers conducted an experiment in which they systematically measured employee productivity at various levels of illumination. However, no matter whether the lighting was raised or lowered, productivity increased. The researchers were puzzled and invited Elton Mayo to assist them. Eventually, they found that the employees were responding to the increased attention from the researchers.
The Hawthorne Effect suggested that the attitude of employees toward their managers affects the employees’ performance.
he General Electric Company, or GE (NYSE: GE), is a multinational American technology and services conglomerate incorporated in the State of New York.[5] In terms of market capitalization as of September 30, 2008, GE is the world's tenth largest company. In the 1960s, aspects of U.S. tax laws and accounting practices led to a rise in the assembly of conglomerates. GE, which was a conglomerate long before the term was coined, is arguably the most successful organization of this type

24. The Human Relations Movement
Grew out of the Hawthorne studies.
Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance.
Abraham Maslow
Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy.
Douglas McGregor
Proposed Theory X and Theory Y concepts of managerial beliefs about people and work.

25. Maslow’s Hierarchy of Needs

27. Organizational Behavior
A contemporary field focusing on behavioral perspectives on management.
Draws on psychology, sociology, anthropology, economics, and medicine.
the study of human races, origins, societies, and cultures.

28. QUANTITATIVE MANAGEMENT PERSPECTIVE
Applies quantitative techniques to management
Emerged during World War II to help the Allied forces manage logistical problems.
Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems.
Management Science
Focuses on the development of representative mathematical models to assist with decisions.
Operations Management
Practical application of management science to efficiently manage the production and distribution of products and services. 31

29. THE CONTINGENCY APPROACH
The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates.
Assumes there is no one best way to manage.
The environment impacts the firm and managers must be flexible to react to environmental changes.
In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively.

30. An Integrative Framework of Management Perspectives
Contingency Approach
Recognition of the situational nature of management. Response to particular characteristics of situation.
Classical Management
Perspectives:
Methods for enhancing efficiency and facilitating planning, organizing, and controlling
Behavioral Management Perspectives:
Insights for motivating performance and understanding individual behavior, groups and teams, and leadership
Quantitative
Management
Perspective:
Techniques for improving decision making, resource allocation, and operations
Effective and efficient management