1. The Evolution of Management Thought

2. Agenda Classical Approach (1880-1920) Behavioural Approach (1930’s)
Contemporary Approaches ( ’s)
Emerging Practices (1990’s – 2000’s)

3. Classical Approach - Systematic Management
Adam Smith – 1776 – The Wealth of Nations
Advocate of systemization
Efficiency and Effectiveness
Division of Labor – breaking up a task into particular roles to improve/increase productivity.
Productivity
10 workers = 48,000 pins … 1 worker = 10 pins (What he observed)
Focused on defining duties and responsibilities
Led to Scientific Management

4. Classical Approach - Scientific Management
Scientific Management – Study of relationships between people and tasks to increase efficiency: F. W. Taylor.
How can management increase the level of worker productivity and motivation?
Philosophy:
One best way to do task ex: “How much load should I use”
Used money as incentive
Piece-rate System – Payment for amount of pieces/items produced
Benefits: Productivity did improve, increase in efficiency.
Problems: Oversimplification of Jobs, more work and same pay.

5. Classical Approach – Administrative Mgmt. Theory
Study of how to create organizational structure that leads to high efficiency and effectiveness
Henri Fayol
Philosophy
Management is a universal process – 14 Principles to ensure this.
Fit the person to the job
Workers should accept management’s decision without question.

6. Fayol’s Principles
Division of Labor: allows for job specialization to increase efficiency
2. Authority and Responsibility: included both formal and informal authority resulting from special expertise
3. Unity of Command: Employees should have only one boss (Not always the case now)
4. Line of Authority: a clear chain of command from top to bottom of the firm
5. Centralization: the degree to which authority rests at the very top. Decisions should be made by those at the top of the organization.
Formal Authority – Manager – Employee relationship. Manager has authority of employee b/c he or she is the employees boss.
Informal Authority – Authority over someone else because of particular knowledge you have. (You may still be in the same level at the organization) 6

7. Fayol’s Principles
6. Unity of Direction: one plan of action to guide organization
7. Equity: treat all employees fairly
8. Order: each employee is placed where they have the most value
9. Initiative: encourage innovation
10. Discipline: obedient, respectful employees needed 7

8. Fayol’s Principles
11. Remuneration of Personnel: the payment system contributes to success
12. Stability of Tenure: long term employment is important
13. General interest over individual interest: organization over individual. Do what’s best for organization not what’s best for ourselves in given situations.
14. Esprit de corps: share enthusiasm for organization 8

9. Administration Management Problems
Based on observations
Concerned primarily with the structure of the organization

10. The Behavioral Approach
1930’s
Philosophy: Change management emphasis from productivity to human element
Hawthorne Plant Studies – Elton Mayo
Study: Illumination will affect productivity.
Results of Hawthorne’s Plant Studies:
Higher and Lower Illumination – Productivity improved
No matter what was done, productivity increased. Why?
Cohesive Work Group Developed
Team Spirit – The environment is important
Management must create a stimulating work environment.

11. What is a Stimulating Work Environment?
What’s stimulating to one employee might not be stimulating to another.

12. Maslow’s Hierarchy of Needs
P.S: Importance of needs goes from bottom to top.

13. Theory X and Y Doug McGregor proposed 2 different worker assumptions
Theory X: Employees are lazy and they dislike work, so they need to be supervised closely. Managers will get their employees to work through coercion and incentives.
Theory Y: Employees are ambitious and their talents are underused in most companies. Managers believe employees want to do well at work.

14. Contemporary Approaches
1950’s-1980’s
Continue to question – should management be an art or science?

15. Contemporary Approaches
The Process Approach
Planning, Organizing, Leading, and Controlling
The Systems Approach – A set of independent parts working together to achieve a goal.
Contingency Management – There’s no one universal way to manage, because organizations and situations vary.

16. Emerging Management Practices
Organizational Culture
Team Building
Empowerment
Total Quality Management