Topic 2.

The Evolution of Management Thinking
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. Forces Influencing Management and Organisations: Social Forces, Political Forces, Economic Forces. Social Forces – aspects of a culture that guide and influence relationship among people. What do people values? What do people need? What are the standards of behavior among people? These forces shape the social contract which refer to the unwritten, common rules and perceptions about relationships among people and between employees and management Political Forces - influence of political and legal institutions on people & organizations. Political forces include basic assumptions underlying the political system such as the desirability of selfgovernment, property rights, contract rights, The definition of justice, The determination of innocence or guilt of a crime. Economic Forces - forces that affect the availability, production, & distribution of a society’s resources among competing users. The new emerging economy is based largely on ideas, information, and knowledge; supply chains have been revolutionized by digital technology. 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 The classical perspective emerged during the 19th and 20th centuries. The factory system of the 1800s had challenges: ➢ tooling plants, ➢ organizing managerial structure, ➢ training non-English speaking employees, ➢ scheduling complex manufacturing and operations ➢ dealing with increased labor dissatisfaction and resulting strikes These new problems demanded a new perspective on coordination and control, 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: a) Scientific Management ➢ A subfield of the classical management perspective that emphasized scientifically determined changes in management practices as the solution to improving labour productivity. Frederick W. Taylor – known as the father of scientific management

➢ Emphasized scientific changes in management to improve labor productivity ➢ Taylor suggested decisions based on rules of thumb and tradition be replaced with precise work procedures developed after study of the situation ➢ Henri Gantt developed the Gantt Chart – a bar graph that measures planned and completed work ➢ Frank B and Lilian M. Gilbreath pioneered time and motion study, which stressed efficiency and the best way to do a job ➢ 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 ➢ Lilian pioneered the field of industrial psychology and made substantial contributions to human resource management b) Bureaucratic Organizations Max Weber 1864-1920, Prior to Bureaucracy Organizations i) European employees were loyal to a single individual rather than to the organization or its mission ii) Resources used to realize individual desires rather than organizational goals iii) Systematic approach –looked at organization as a whole 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 record-keeping and separation of management and ownership c) Administrative Principles Contributors: Henri Fayol, Mary Parker, and Chester I. Barnard Focus: 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. 14 General Principles of Management

Importance of common super-ordinate goals for reducing conflict in organizations

➢ Popular with businesspeople of her day ➢ Overlooked by management scholars ➢ Contrast to scientific management ➢ Reemerging as applicable in dealing with rapid change in global environment Leadership – importance of people vs. engineering techniques Chester Barnard 1886-1961: Informal Organization ➢ Cliques ➢ Naturally occurring social groupings ➢ Argued that organizations are not machines and informal relationship are powerful forces that can help the organization if properly managed Acceptance Theory of Authority ➢ Free will ➢ Can choose to follow management orders and acceptance can be critical to success

Humanistic Perspective A management perspective that emerged around the late 19th century, Emphasized understanding human behavior, needs, and attitudes in the workplace. Mary Parker Follett and Chest Barnard advocated a more humanistic perspective on management that emphasized: ➢ Importance of understanding human behaviors ➢ Needs and attitudes in the workplace Human Relations Movement ➢ Truly effective control comes from within the individual worker rather than from strict, authoritarian control ➢ Emphasized satisfaction of employees’ basic needs as the key to increased worker productivity Hawthorne Studies ➢ Factor that increased output, Human Relations

➢ Suggests jobs should be designed to meet higher-level needs by allowing workers to use their full potential ➢ The human resources perspective combines prescription for design of job tasks with theories of motivation ➢ 2 best known contributors: ➢ 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 Theory X Assumptions ➢ Dislike work –will avoid it ➢ Must be coerced, controlled, directed, or threatened with punishment ➢ Prefer direction, avoid responsibility, little ambition, want security Theory Y Assumptions ➢ Do not dislike work ➢ Self direction and self control ➢ Seek responsibility ➢ Imagination, creativity widely distributed ➢ Intellectual potential only partially utilized. Behavioral Sciences Approach ➢ Applies social science in an organizational context ➢ Draws from economics, psychology, sociology, anthropology, and other disciplines ➢ Understand employee behavior and interaction in an organizational setting ➢ One set of management techniques based in the behavioral sciences approach is OD – Organization Development ➢ Other concepts that grew out of the Behavioral Sciences Approach include matrix organizations, self-managed teams, and ideas about corporate culture Management Science Perspective ➢ Emerged after WW II

➢ Applied mathematics, statistics, and other quantitative techniques to managerial problems Operations Research: It consist of mathematical model building and other applications of quantitative techniques to managerial problems Operations Management: specializes in physical production of goods or services using quantitative techniques to solve manufacturing problems, e.g. forecasting, inventory modeling, linear and nonlinear programming, queuing theory, scheduling, simulation and breakeven analysis Information Technology: reflected in management information systems. These are designed to provide relevant information to managers in a timely and cost-efficient manner, e.g. intranet, extranet, software programs.

System Theory

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: a) Inputs: Inputs are the material, human, financial or information resources used to produce goods and services.

b) Transformation process:The transformation process is management’s use of production technology to change the inputs into outputs. c) Outputs:Outputs include the organization’s products and services. d) Feedback:Feedback is knowledge of the results that influence the selection of inputs during the next cycle of the process. e) Environment: 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) A concept that focuses on managing the total organisation to deliver quality to customers. The approach infuses quality values throughout every activity, with front-line workers intimately involved in the process. 4 significant elements of TQM are: ➢ Employment involvement – requires company-wide participation in quality control. ➢ Focus on customer – find out what customer wants. ➢ Benchmarking – a process whereby companies find out how others do something better and imitate or improve it. ➢ Continuous improvement – the implementation of small, incremental improvements in all areas of the organization on an ongoing basis.

The Learning Organization In the learning organization, everyone identifies and solves problems, enabling continuous experiment, change, and Improvement. Thus increasing its capacity to grow, learn and achieve its purpose. The essential idea is problem solving, as opposed to efficiency, e.g. understanding customer needs. The Technology-Driven Workplace Types of E-Commerce