Ubmm1013 Management Principles

UBMM1013 MANAGEMENT PRINCIPLES

Topic 2 The Evolution of Management

Learning Objectives l Understand

0

how historical forces influence the practice of management. l Identify and explain major developments in the history of management thought. l Describe the major components of the classical and humanistic management perspectives. l Discuss the management science perspective and its current use in

Learning Objectives l Explain

(contd.)

0

the major components of systems theory, the contingency view, and total quality management. l Describe the learning organization and the changes in structure, empowerment, and information sharing that managers make to support it. l Discuss the technology-driven workplace and the role of outsourcing, supply chain management, enterprise resource planning,

Organization and Management Organization is a collection of people working together in a division of labour to achieve a common purpose Management is the attainment of organizational goals in an effective and efficient manner through four functions: •planning •organizing •leading •controlling

Organization and Management l Management

philosophies and organization forms change over time to meet new needs

l Some

ideas and practices from the past are still relevant and applicable to management today

lA

study of the past contributes to understanding both the present and the future

Forces Influencing Management and Organisations

2.1 2.2 2.3

Social Forces Political Forces Economic Forces

Management and Organisations

Social Forces 2.1 Social Forces – aspects of a culture that guide and influence relationship among people. l What do people values? l What do people need? l What are the standards of behavior among people? l

These forces shape the social contract which refer to the unwritten, common rules and perceptions about relationships among people and between employees and management

Social forces

Social contract

Political Forces

2.2 Political Forces - influence of political and legal institutions on people & organizations l

Political forces include basic assumptions underlying the political system such as l the desirability of self-government, l property rights, l contract rights, l The definition of justice l The determination of innocence or guilt of a crime

Economic Forces 2.3 Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users l

The new emerging economy is based largely on ideas, information, and knowledge; supply chains have been revolutionized by digital technology

l

Management practices and perspectives vary in response to these social, political, and economic forces; during hard times, manager look for ideas to help them cope.

Forces Influencing Organizations and Management

2.1 2.2 2.3

Social Forces Political Forces Economic Forces

Organisation and Management

Management practices and perspectives vary in response to these social, political, and economic forces; during hard times, manager look for ideas to help them cope.

Management Perspectives Over Time

Classical Perspective l

l

l

The classical perspective emerged during the 19th and 20th centuries The factory system of the 1800s had challenges: l tooling plants, l organizing managerial structure, l training non-English speaking employees, l scheduling complex manufacturing and operations l dealing with increased labor dissatisfaction and resulting strikes These new problems demanded a new perspective on coordination and control

Classical Perspective l

l l

l

Make organizations efficient operating machines Rational, scientific approach to management The overall classical perspective as an approach to management was very powerful and gave companies fundamental new skills for establishing high productivity and effective treatment of employees This perspective contains three subfields: i. Scientific Management ii. Bureaucratic Organizations iii. Administrative Principles

Classical Perspective

Scientific Management

Bureaucratic Organizations

Administrative Principles

Scientific Management: A subfield of the classical management perspective that emphasized scientifically determined changes in management practices as the solution to improving labour productivity

Scientific Management: l Frederick

W. Taylor

known as the father of scientific management

l Henri

Gantt

l Frank

B and Lilian M. Gilbreath

Scientific Management: Taylor 1856-1915 l

Frederick W. Taylor – known as the father of scientific management

l

Emphasized scientific changes in management to improve labor productivity

l

Taylor suggested decisions based on rules of thumb and tradition be replaced with precise work procedures developed after study of the situation

Scientific Management

l

Henri Gantt developed the Gantt Chart – a bar graph that measures planned and completed work

Scientific Management l

Frank B and Lilian M. Gilbreath pioneered time and motion study, which stressed efficiency and the best way to do a job

l

Frank is known for work with brick layers, but surgeons were able to save countless lives through the application of the time and motion study

l

Lilian pioneered the field of industrial psychology and made substantial contributions to human resource management

Bureaucracy Organizations l

Max Weber 1864-1920

l

Prior to Bureaucracy Organizations l European employees were loyal to a single individual rather than to the organization or its mission l Resources used to realize individual desires rather than organizational goals

l

Systematic approach –looked at organization as a whole

l

A subfield of the classical management perspective that emphasized management on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping and separation of management and ownership

Characteristic of Weberian Bureaucracy

Division of labor with Clear definitions of authority and responsibility Positions organized in a hierarchy of authority

Personnel are selected and promoted based on technical qualifications

THE IDEAL BUREAUCRACY

Administrative acts and decisions recorded in writing

Management separate from the ownership of the organization

Managers subject to Rules and procedures that will ensure reliable predictable behavior

Administrative Principles l

Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard

l

Focus: l A subfield of the classical management perspective that focuses on the total organization rather than the individual worker, delineating the management functions of planning, organizing, commanding, coordinating and controlling.

Henri Fayol 1841-1925 14 General Principles of Management Division of labor Authority Discipline Unity of command Unity of direction Subordination of individual interest Remuneration

Centralization Scalar chain Order Equity Stability and tenure of staff x Initiative x Esprit de corps x x x x x

Mary Parker Follett 18681933 l

Importance of common super-ordinate goals for reducing conflict in organizations l Popular with businesspeople of her day l Overlooked by management scholars l Contrast to scientific management l Reemerging as applicable in dealing with rapid change in global environment

l

Leadership – importance of people vs. engineering techniques

Chester Barnard 18861961

Informal Organization

Acceptance Theory of Authority

Chester Barnard 18861961 Informal Organization l Cliques l Naturally occurring social groupings l Argued that organizations are not machines and informal relationship are powerful forces that can help the organization if properly managed

Chester Barnard 18861961 Acceptance Theory of Authority l Free will l Can choose to follow management orders and acceptance can be critical to success

Management Perspectives Over Time

Humanistic Perspective l

A management perspective that emerged around the late 19th century

l

Emphasized understanding human behavior, needs, and attitudes in the workplace

l

Mary Parker Follett and Chest Barnard advocated a more humanistic perspective on management that emphasized: lImportance

of understanding human

behaviors lNeeds and attitudes in the workplace lSocial interactions and group processes

Humanistic Perspective

The Human Relations Movement

The Human Resources Perspective

The Behavioral Sciences Approach

Human Relations Movement lTruly

effective control comes from within the

individual worker rather than from strict, authoritarian control lEmphasized

satisfaction of employees’ basic

needs as the key to increased worker productivity

Human Relations Movement Hawthorne Studies l l l l l l l

Started in 1895 Four experimental& three control groups Five different tests Test pointed to factors other than illumination for productivity 1st Relay Assembly Test Room experiment, was controversial, test lasted 6 years Interpretation, money not cause of increased output Factor that increased output, Human Relations

Human Resource Perspective lSuggests

jobs should be designed to meet higher-level

needs by allowing workers to use their full potential lThe

human resources perspective combines

prescription for design of job tasks with theories of motivation l2

best known contributors: Abraham Maslow

Douglas McGregor

(1906-1970)

( 1906- 1964)

Abraham Maslow’s Hierarchy of Needs 1908-1970

Abraham Maslow (1906-1970), a psychologist, suggested a hierarchy of needs because he observed that problems usually stemmed an inability to satisfy needs

Selfactualization Esteem Belongingness Safety Physiological

Based on needs satisfaction

Douglas McGregor Theory X & Y 1906-1964 Theory X Assumptions l l

l

Dislike work –will avoid it Must be coerced, controlled, directed, or threatened with punishment Prefer direction, avoid

Theory Y Assumptions l l

l l

Do not dislike work Self direction and self control Seek responsibility Imagination, creativity widely

Behavioral Sciences Approach l

Applies social science in an organizational context

l

Draws from economics, psychology, sociology, anthropology, and other disciplines Understand employee behavior and interaction in an organizational setting l One set of management techniques based in the behavioral sciences approach is OD – Organization Development l

l

Other concepts that grew out of the Behavioral Sciences Approach include matrix organizations, self-managed teams, and ideas about corporate

Management Science Perspective l Emerged

after WW II l Applied mathematics, statistics, and other quantitative techniques to managerial problems Operations Operations

Information

Research

Technology

Management

Operations Research

Operations Research

l

It consist of mathematical model building and other applications of quantitative techniques to managerial problems

Operations Management Operations Management l

specializes in physical production of goods or services using quantitative techniques to solve manufacturing problems

l

e.g. forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation and break-even analysis

Information Technology Information Technology l

reflected in management information systems

l

These are designed to provide relevant information to managers in a timely and costefficient manner

l

e.g. intranet, extranet, software programs.

Management Perspectives Over Time

Recent Historical Trends

System Theory Systems View of Organizations

System Theory l

l

l

A system theory is a set of interrelated parts that function as a whole to achieve a common purpose. A system functions by acquiring inputs from the external environment, transforming them in some way and discharging outputs back to the environment. Components of system theory include: l Inputs l Transformation Process l Outputs l Feedback l Environment

System Theory Five components in System Theory: a) Inputs l Inputs are the material, human, financial or information resources used to produce goods and services. b) Transformation process l The transformation process is management’s use of production technology to change the inputs into outputs. c) Outputs l Outputs include the organization’s products and services.

System Theory Five components in System Theory: d) Feedback l Feedback is knowledge of the results that influence the selection of inputs during the next cycle of the process. e) Environment l The environment surrounding the organization includes the social, political and economic forces.

Contingency View of Management

Successful resolution of organizational problems is thought to depend on managers’ identification of key variations in the situation at hand

Total Quality Management (TQM) l

A concept that focuses on managing the total organisation to deliver quality to customers

l

The approach infuses quality values throughout every activity, with front-line workers intimately involved in the process

l

4 significant elements of TQM are: l Employment involvement – requires company-wide participation in quality control. l Focus on customer – find out what customer wants. l Benchmarking – a process whereby companies find out how others do something better and imitate or improve it. l Continuous improvement – the implementation of small,

The Learning Organization l

In the learning organization, everyone l identifies and solves problems l enabling continuous experiment l change, and l Improvement

l

Thus increasing its capacity to grow, learn and achieve its purpose

l

The essential idea is problem solving, as opposed to efficiency,

l

e.g. understanding customer needs

Elements of a Learning Organization Team-Based Structure

Learning Organization Empowered Employees

Open Information

The Technology-Driven Workplace Types of E-Commerce Business-to-Consumer (B2C) Selling Products and Services Online

Business-to-Business (B2B) Electronic transactions Between Organizations

Consumer-to-Consumer (C2C) Electronic Markets Created by Web-Based Intermediaries

0

Thank You