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Dr. Karim Kobeissi
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Principles of Management
Dr. Karim KobeissiIslamic University of Lebanon - 2013
2Chapter
The EvolutionofManagement Theory
Learning Outcomes
• Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory.
• Explain the principle of job specialization and division of labor, and tell why the study of person-task relationships is central to the pursuit of increased efficiency.
Early Management in the Prehistory*
• Management has been practiced for thousands of years.
• Organized projects were directed by people responsible for planning, organizing, leading, and controlling.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 1-5
Classical Management Approaches (1911–1947)
The classical management approaches that emerged
around the turn of the twentieth century include :
1- The Scientific Management Theory
2- The Administrative Management Theory
The Scientific Management Theory Overview
The evolution of modern management began in the closing
decades of the nineteenth century, after the Industrial
Revolution had swept through Europe, and the United States.
Small workshops run by skilled workers who produced hand-
manufactured products (a system called crafts-style production)
were replaced by large factories. In these factories, hundreds or
even thousands of unskilled or semi-skilled employees
controlled the sophisticated machines that made products.
The Scientific Management TheoryJob Specialization and the Division of Labor
Adam Smith (named the father of the scientific management theory) observed that firms manufactured pins in one of two different ways:
- Craft-style—each worker did all steps (18 tasks).
- Production—each worker specialized in one step.
The Scientific Management TheoryJob Specialization and the Division of Labor
Adam Smith realized that increasing the level
of job- specialization resulted in much higher
efficiency and productivity:
• Breaking down the total job allowed for the division of
labor in which workers became very skilled
at their specific tasks.
The Scientific Management TheoryF. W. Taylor
• Taylor is best known for defining the techniques of scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
• Taylor believed that if the amount of time and effort that each worker expends to produce a unit of output (a finished good or service) can be reduced by increasing specialization and the division of labor, the production process will become more efficient.
The Scientific Management TheoryF. W. Taylor
• According to Taylor, the way to create the most efficient division of
labor could best be determined by scientific management
techniques, rather than intuitive knowledge.
• Based on his experiments and observations as a manufacturing
manager in a variety of settings, he developed four principles to
increase efficiency in the workplace:
The Scientific Management TheoryF. W. Taylor
Principle 1: Study the ways workers perform their tasks now and determine new methods to do them.
• Gather detailed time and motion
information.
• Try and experiment different methods to determine which is best in order to adopt it.
The Scientific Management TheoryF. W. Taylor
Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures.
• Teach the new adopted way to all workers performing the same task.
• These new methods further standardized and simplified jobs—essentially making jobs even more routine. In this way efficiency could be increased throughout an organization.
The Scientific Management TheoryF. W. Taylor
Principle 3: Carefully select workers
who possess skills and abilities that
match the needs of the task, and
train them to perform the task
according to the established rules
and procedures.
The Scientific Management TheoryF. W. Taylor
Principle 4: Establish a fair or
acceptable level of performance for
a task, and then develop a pay
system that provides a reward for
performance above the acceptable
level.
The Scientific Management Theory Frank and Lillian Gilbreth
Two famous followers of Taylor were Frank Gilbreth and Lillian Gilbreth, who refined Taylor’s analysis of work movements and made many contributions to time-and-motion study. Their aims were to:
(1) Break up and analyze every individual action necessary to perform a
particular task into each of its component actions.
(2) Find better ways to perform each component action.
(3) Reorganize each of the component actions so that the action as a
whole could be performed more efficiently—at less cost in time and
effort.
The Administrative Management Theory
Side by side with scientific managers studying the person-task mix to increase efficiency, other researchers were focusing on administrative management, the study of how to create an organizational structure that leads to high efficiency and effectiveness.
Two of the most influential views regarding the creation of efficient
systems of organizational administration were developed:
• The Theory of Bureaucracy.
• Fayol’s Model of Management.
The Administrative Management Theory The Theory of Bureaucracy
• Weber developed the principles of bureaucracy—a
formal system of organization and administration
designed to ensure efficiency and effectiveness.
• Weber described bureaucracy as an ideal rational
form of organization structure, especially for large
organizations.
The Administrative Management Theory The Theory of Bureaucracy
A bureaucratic system of administration is based on five principles:
• Principle 1: In a bureaucracy, a manager’s formal authority derives from
the position he or she holds in the organization.
• Principle 2: In a bureaucracy, people should occupy positions because of
their performance, not because of their social standing or personal
contacts.
• Principle 3: The extent of each position’s formal authority and task
responsibilities, and its relationship to other positions in an organization,
should be clearly specified.
The Administrative Management Theory The Theory of Bureaucracy
• Principle 4: Authority can be exercised effectively in an organization
when positions are arranged hierarchically, so employees know
whom to report to and who reports to them.
• Principle 5: Managers must create a well-defined system of rules,
standard operating procedures, and norms so that they can
effectively control behavior within an organization.
The Administrative Management Theory Fayol’s Model of Management
Henri Fayol identified five management
functions and 14 management
principles that he believed to be
essential to increasing the efficiency of
the management process.
Behavioral Management Theory
Behavioral Management is the
study of how managers
should behave to motivate
employees and encourage
them to perform at high
levels and be committed to
the achievement of
organizational goals.
Behavioral Management Theory Mary Parker Follett
Follett concerned that Taylor ignored the human side of the organization.
- Suggested workers help in analyzing their jobs.
- If workers have relevant knowledge of the task, then they should control the task.
Behavioral Management Theory The Hawthorne Effect
• Studies conducted at the Hawthorne Works of the Western Electric Company: – Researchers found that regardless
of whether the light levels were raised or lowered (characteristics of the work setting), worker productivity increased.
– Concluded that a manager’s behavior or leadership approach can affect worker’s level of performance (Hawthorne Effect).
Behavioral Management Theory Theory X and Theory Y
Douglas McGregor proposed the two different sets of assumptions about workers.
– Theory X assumes the average worker is lazy, dislikes work and will do as little as possible.• Managers must closely supervise and
control through reward and punishment.
Behavioral Management Theory Theory X and Theory Y
–Theory Y assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.
• Managers should allow workers greater latitude, and create an organization to stimulate the workers.
Management Science TheoryManagement science theory is a contemporary
approach to management that focuses on the use of rigorous quantitative techniques* to help managers make maximum use of organizational resources to produce goods and services.
• There are four branches of management science:
Management Science Theory1. Quantitative Management utilizes mathematical techniques—
such as linear and nonlinear programming, modeling, simulation, queuing theory, and chaos theory—to help managers decide, for example, how much inventory to hold at different times of the year.
2. Operations Management provides managers with a set of techniques that they can use to analyze any aspect of an organization’s production system to increase efficiency. IT, through the Internet and through growing B2B networks, is transforming the way managers handle the acquisition of inputs and the disposal of finished products.
Management Science Theory
3. Total Quality Management (TQM) focuses on analyzing an
organization’s input, conversion, and output activities to increase
product quality.
4. Management Information Systems (MISs) help managers design
systems that provide information about events occurring inside
the organization as well as in its external environment information
that is vital for effective decision making.
Organizational Environment Theory
An important milestone in the history of management thought
occurred when researchers went beyond the study of how
managers can influence behavior within organizations to
consider how managers control the organization’s relationship
with its external environment, or organizational environment
—the set of forces and conditions that operate beyond an
organization’s boundaries but affect a manager’s ability to
acquire and utilize resources.
Organizational Environment Theory The Open System View
– Organizations are open systems that are influenced by and interact with their environments.
• An open system— is a system that takes in resources from its external environment and converts or transforms them into goods and services that are sent back to that environment, where they are bought by customers.
• A closed system, is a self-contained system that is not affected by changes in its external environment. Organizations that operate as closed systems, that ignore the external environment, and that fail to acquire inputs are likely to experience entropy.
Organizational Environment Theory The Open System View
• Researchers using the open-systems view are also interested in
how the various parts of a system work together to promote
efficiency and effectiveness. Systems theorists like to argue that
the whole is greater than the sum of its parts; they mean that
an organization performs at a higher level when its departments
work together rather than separately. Synergy, the performance
gains that result from the combined actions of individuals and
departments, is possible only in an organized system.
Organizational Environment Theory The Contingency Theory
- The crucial message of the contingency theory is that there is no one best way to organize: The organizational structures and the control systems that managers choose depend on—are contingent on—characteristics of the external environment in which the organization operates.
• According to contingency theory, the characteristics of the environment affect an organization’s ability to obtain resources; and to maximize the likelihood of gaining access to resources, managers must allow an organization’s departments to organize and control their activities in ways most likely to allow them to obtain resources, given the constraints of the particular environment they face.
Organizational Environment Theory The Contingency Theory
- Managers can use a mechanistic structure or an organic structure. A mechanistic structure typically rests on Theory X assumptions, and an organic structure typically rests on Theory Y assumptions.
• Mechanistic Structure- An organizational structure in which authority is centralized, tasks and rules are clearly specified, and employees are closely supervised.
• Organic Structure- An organizational structure in which authority is decentralized to middle and first-line managers and tasks and roles are left ambiguous to encourage employees to cooperate and respond quickly to the unexpected.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 1-38