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CHAPTER 2

MANAGEMENT
HISTORY

HISTORY OF MANAGEMENT
DEVELOPMENT OF MAJOR MANAGEMENT
THEORIES
HISTORICAL BACK GROUND
1.
EARLY EXAMPLES OF MANAGEMENT
Egyptians pyramids, Great wall of China,
Qila Rohtaas.
2.
DIVISION OF LABOR, ADAM SMITH
He introduced job specialization, break
down of jobs in to specific repetitive tasks.
3.
INDUSTRIAL REVOLUTION
The advent of machine power, mass
production, and efficient transportation.

SIX MAJOR THEORIES OF
MANAGEMENT




Scientific Management
General Administrative Theorists
Quantitative Approach
Organizational Behavior (Early
Advocates, Hawthorne studies)
System Approach
Contingency Approach

Theory of Scientific
Management
Fredrick W Taylor (1856-1915)

Principles of Scientific Management by Frederick
Taylor in 1911.
He is considered to be the father of
Management.
He elaborated the use of scientific Methods to
determine the one best way for a job to be done.
Working At a Steel Company He witnessed many
inefficiencies. He sought to create mental
revolutions among the workers and management
by defining clear guidelines for improving
production efficiency.

Theory of Scientific Management contribution by Frank & Lilan  Frank was a contractor and gave up his career to Gilbreth study the scientific management. With the help of device wasted motion missed by the naked eye could be eliminated. They studied to eliminate the wasteful activities. which recorded the workers motion and amount of time.      Lilan his wife was a psychologist. They designed a device called microchronometer. They also worked on optimizing the work performance by designing the tools. Therbligs: A classification scheme for labeling 17 basic hand motions. .

train best qualified workers for the job and design incentive systems based on the out put. . They hire. Thus they are using the scientific management.TODAY’S MANAGER AND USE OF SCIENTIFIC MANAGEMNT    Managers analyze the basic work and tasks that must be performed. They use time and motion study to eliminate the wasteful activities.

teach and develop the worker. . Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the worker. which will replace the old rule of thumb method Scientifically select and then train.TAYLOR’S FOUR PRINCIPLES OF MANAGEMENT     Develop a science for each element of an individual’s work. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed.

.GENERAL ADMINISTRATIVE THEORY HENRY FAYOL AND MAX WEBER  The general Administrative theorists Writers who developed general theories of what managers do and what constitutes good management practice.

Taylor was concerned with first line managers and scientific methods while Fayol was concerned with activities of all the managers.HENRY FAYOL Principles of Management    Famous for his functions of Management. production etc. . This led him to devise 14 principles of management. government and even at home. His belief was that management is distinct from other typical business functions like accounting. and that the management was an activity common to all human endeavors in business.

3. Discipline: Every one must obey the rules that governs the organization. 4. 5. 2. Authority: Manager must be able to give the orders and authority gives them this right. Unity of Direction: The organization should have a single plan of action to guide managers and workers. Division of Work: Specialization increases out put by making employees more efficient. .FAYOLS 14 PRINCIPLES OF MANAGEMENT 1. Unity of Command: Every employee should receive orders from one superior.

. 8. Centralization: A degree to which the workers are involved in decision making. 7. Subordination of individual interests to the general interests.FAYOLS 14 PRINCIPLES OF MANAGEMENT 6. Remuneration: Workers must be paid a fair wage for their services. Scalar Chain: The line of authority from top management to lowest rank is called the scalar chain. 9.

11. . Stability of tenure of personnel: Management should provide orderly personnel planning and ensure that replacements are available to fill the vacancies.FAYOLS 14 PRINCIPLES OF MANAGEMENT 10. Order: People and material should be at right place at the right time. Equity: Managers should be kind and fair to their subordinates. 12.

Esprit De corps: Promoting team spirit will build harmony and unity within the organization.FAYOLS 14 PRINCIPLES OF MANAGEMENT 13. . 14. Initiative: Employees who are allowed to originate and carry out plans will exert high level of efforts.

Bureaucracy: He described an ideal form of organization as bureaucracy.MAX WEBER   A German sociologist who studied organizational activity. In early 1900’s he developed a theory of authority. structure and relations. a clearly defined hierarchy. . and impersonal relationship. A form of organization characterized by division of labor. detailed rules and regulations.

Although his attempt to BUREAUCRACY was an attempt to formulate an ideal prototype for organizations. impersonal application of rules takes away the creativity of employee and organization ability to change according to the dynamic environment. .How do Managers practice the General administrative theory    The functional view of Henry Fayol and 14 principles of management serve as frame reference of many management concepts. Weber theory didn’t got the much popularity. his model is not as popular today as it was in 20th century. The strict division of labor.

. Work schedule can be more efficient by using critical path scheduling analysis. Linear programming is a technique used by the managers to improve the resource allocation decisions.QUANTITAVE APPROACH TO MANAGEMENT     This refers to use of quantitative techniques to improve decision making. optimization models. information models and computer simulations to management activities. It involves applications of statistics.

Famous are ROBERT McNAMARA and Charles Tex Thornton.IMPORTANT CONTRIBUTION TO QUANTITATIVE APPROACH TO MANAGEMENT     Quantitative approach evolved out the development of mathematical and statistical solutions to military problems during world war-II. . After the war many techniques used to solve military problems were used in businesses. The group of military men who introduced this technique were called “Whiz Kid”.

computers to build models and make analysis. It is used in budgeting. scheduling and quality control.HOW DO MANAGERS USE QUANTITATIVE TECHNIQUES     It directly contributes to the area of planning and control. However behavioral problems are more evident and widespread and it is easier for the Managers to relate day to day people problem than to constructing abstract quantitative models. . They use statistical techniques.

leadership. This study provides the basis for human resource management as well as contemporary view of motivation. . teamwork and conflict management. This provided foundation of such management practices like employee selection procedures. trust.ORGANIZATIONAL BEHAVIOR APPROACH     This field of study is concerned with the actions (behavior) of people at work. The early advocates of this study believed that people were the most important asset of the organization and should be managed accordingly. employee work teams and organization management techniques. employee motivation programs.

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The productivity increased in both groups even when the light level was decreased. . They concluded that the productivity was not related to light level. The studies were designed by electrical engineers at Western Electric Company as scientific management. that group influences significantly individual behavior. The group standards affect the individual output. They invited Prof Mayo of Harvard to study as consultant. The productivity decreased of the experimental group when the level of light was decreased to moonlit night. group attitude and group security. The experimental group was exposed to different light levels and the control group worked under constant light levels. They wanted to examine effects of different light level at workers productivity. Mayo concluded that behavior and attitudes are closely related. it was something else they did not know.HAWTHRONE STUDIES         A series of studies during 1920s and 1930s that provided new insights into individual and group behavior. Money is less a factor in determining output than group standards.

leadership. group behavior and developments. .HOW TODAY’S MANAGERS USE THE BEHAVIORAL APPROACH   This approach has largely shaped today’s organization. This provided the foundation of motivation.

.THE SYSTEM APPROACH    SYSTEM: is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. OPEN SYSTEMS: The systems which dynamically interact with their environment. CLOSED SYSTEMS: The system which are not influenced by or do not interact with their environment.

Technology. takes inputs (Raw Material. Capital.EXAMPLE OF AN OPEN SYSTEM   An organization from an open system perspective. Then it transforms or processes these inputs into outputs which are again distributed into environment. . Human resources. information) from the environment.

The Managers coordinate the work activities of the various parts of the organization and ensure that all the interdependent parts are working together. An organization is not self contained in system approach. Each department performance depends the performance of other. it has to interact with its environment. .The system approach and Managers     The system researchers envisioned the organization as being made of interdependent and interrelated factors.

.CONTINGENCY APPROACH   An approach (also called situation approach) which says that organizations are different face. different situations (contingencies) and require different ways of managing. Different and changing situations require managers to use different approaches and techniques.

Routineness of Task technology: To achieve its goals. Individual differences: Individual differs in terms of desire.     Organization size: As size increases so the problems of coordination. leadership style and control systems that differs from those required by customized or no routine technologies. tolerance of ambiguity. an organization uses technology. Routine technologies require organizational structures. expectation.POPULAR CONTINGENCY VARIABLES. . These factors are important when managers select motivation techniques and leadership style. Environmental uncertainty: The dynamic environments influence the management process. autonomy.

work and goals.The contingency approach and Managers  Organizations and even units within the organizations are diverse in the size. . It is surprising to find universally applicable management rules that would work in all situations.

CURRENT TRENDS AND ISSUES Changing the way managers do their jobs         GLOBLIZATION ETHICS WORKFORCE DIVERSITY ENTERPRENEURSHIP E-BUSINESS KNOWLEDGE MANGEMENT LEARNING ORGANIZATION QUALITY MANAGEMENT .

The openness of globalization has made countries more vulnerable to conflicts over political and cultural issues. . The Globalization can be controversial. McDonalds sell their hamburgers in China and south Asia. Regardless of all the problems the managers of all sizes of organizations and types around the world have to face the challenges of operating in the global market. There are significant from globalization and the world has become a global village. German firm Mercedes building their cars in Pakistan and India.GLOBALIZATION      Management is no longer constrained by National borders.

. managers need an approach to deal with complexities associated with the ethical dilemmas that arise. As managers our decisions affect others or some one is likely to be affected from our decisions.ETHICS    RULES AND PRINCIPLES THAT DEFINE THE RIGHT OR WRONG CONDUCT. In today’s changing work place.

Who are the people likely to be impacted by my decision. IMPORTANT FACTORS: What Personal. 5. organizational factors are important to my decision. They need to step back and think about what issue is at stake here. 3. WHO ARE THE AFFECTED STAKE HOLDERS.A PROCESS OF ADDRESSING THE ETHICAL DILEMMAS 1. 2. MAKE A DECISION AND ACT ON IT: This process can help the managers to help to assess the ethical dilemma and seek the best possible course of action. POSSIBLE ALTERNATIVES: Managers has to identify and evaluate different course of actions keeping in mind that each have different effects on the stake holder. . WHAT IS THE ETHICAL DILEMMA: The Managers should make sure that they understand the ethical dilemma that arise. 4.

An other problem of 21st century for the managers to coordinate the work efforts of diverse organizational members in accomplishing the organizational goals. . ethnicity. race.WORK FORCE DIVERSITY   A work force that is more heterogeneous in terms of gender. age and other characteristics that reflect differences.

It involves in discovering the opportunities and resources to exploit them. 3.com). . 2. Growth: Continuous growth through pursuit of opportunities and innovations. no matter what resources the entrepreneur currently has.ENTERPRENEURSHI P    1. Innovation: Introducing the new things and services. Three important dimensions of entrepreneurship Pursuit of opportunities (Jeff Bezos of Amazon. A process whereby an individual or group of individuals uses organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness.

and partners) in order to efficiently and effectively achieve it goals. Like Dell are engaged in ecommerce because they sell items over the internet.Managing in E-Business World    E-Business: A comprehensive term describing the way an organization does its work by using electronics (internet based) linkages with its key constituencies( employees. Intranet: An internal organizational communication system that uses internet technology and is accessible only by organizational employees. E -Commerce:. managers. clients. suppliers.Basically sale and marketing components of E-Business. customers. .

Total Business Organization Organization’s entire work processes revolve around ebusiness model. .CATEGORIES OF E-BUSINESS INVOLVEMENT E-Business Enhanced Organization E-Business within Traditional Organization E-Business Enabled Organization. E-Business tools and applications used within traditional organization.

while maintaining traditional structure. . Sears a chain of physical retail stores world wide uses also internet division to expand business not to replace the traditional way of generating revenue.E-Business Enhanced Organization   A traditional organization that sets up ebusiness capabilities usually e-commerce. They use internet to enhance traditional ways of doing business.

They use websites to interact with customers. . They use intranet for internal communication system and is only available to the employees of the organization. suppliers and employees etc.E-Business enabled organization    Type of organization uses internet to perform its traditional business functions better but not to sell any thing.

Their whole existence revolves around internet . Com.com. Yahoo.Total E-Business Organization  Amazon.

Part of manager’s responsibilities is to learning capabilities throughout the organization from lowest level to highest level and in all areas. adapt and change.Knowledge management and Learning Organizations   Organizations of 21st century must be able to learn and respond quickly. manage the organization’s knowledge base and make needed changes. . Learning Organization: An organization that has developed the capacity to continuously learn. These organizations will be lead by managers who can effectively challenge conventional wisdom.

WHO’S RESPONSIBLE FOR INNOVATION? Traditional are such as R&D Every one in organization MAIN FEAR COMPETETIVE ADVANTAGE Making Mistakes Not learning .TRADITIONAL LEARNING ORGANIZATION ORGANIZATION ATTITUDE TOWARD CHANGE If it’s is working don’t change it. reject it. Not adapting. Ability to learn. reject it. Products and services. knowledge and expertise. MANAGER’S JOB Control Others Enable others. ATTITUDE TOWARD If it was invented NEW IDEAS here. . If you are not changing it won’t be working for long. If it was invented or reinvented here.

.KNOWLEDGE MANAGEMENT  Cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance.

.QUALITY MANAGEMENT  A philosophy of management that is driven by continual improvement and responding to customer needs and expectations.

4. 3. 5. 2. CONCERN FOR CONTINUAL IMPROVEMENT. PROCESSED FOCUSED.WHAT IS TQM (TOTAL QUALITY MANAGEMENT) 1. 6. INTENSE FOCUS ON THE CUSTOMER. EMPOWERMENT OF EMPLOYEES. ACCURATE MEASUREMENT. IMPROVEMENT IN THE QUALITY OF EVERYTHING THAT THE ORGANIZATION DOES. .