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THE EVOLUTION OF THE ORGANIZATION AND MANAGEMENT THEORIES

THE EVOLUTION OF THE ORGANIZATION AND MANAGEMENT THEORIES. A theory is a coherent group of assumption put forth to explain the relationship between two or more observable facts and to provide a sound basis for predicting future events. Stoner: pg. 28 Why: Guide management decision.

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THE EVOLUTION OF THE ORGANIZATION AND MANAGEMENT THEORIES

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  1. THE EVOLUTION OF THE ORGANIZATION AND MANAGEMENT THEORIES AHAB/EVOLUTION/1102

  2. A theoryis a coherent group of assumption put forth to explain the relationship between two or more observable facts and to provide a sound basis for predicting future events. • Stoner: pg. 28 • Why: • Guide management decision. • Shape our view of organisation. • Make us aware of the business environment. • A source of new idea. AHAB/EVOLUTION/1102

  3. THE EMERGENCE OF M & O THEORIES The Neo-Human Relation Movement The Contingency Approach The System Approach The Quantitative School The Behavioral Sc School Classical Management Theories 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 Protes Movement (60s – 70s) Deming Lecture on Quality in Japan WW 11(1941-1945) Labour Shortage IBM PC Introduced) WW 1(1914-1918) The Great Depression AHAB/EVOLUTION/1102

  4. 1900s 1940s 1970s TRADITIONAL THEORIES MODIFICATION CONTEMPORARY EVOLUTION OF ORGANISATION AND MANAGEMENT THEORIES AHAB/EVOLUTION/1102

  5. Traditional/ ClassicalTheories Contemporary Approaches Modifications Scientific Management Management Science Efficient Task Performance System Approach Economic Technical Rationality Subsystem & Environment Bureaucratic Model Human Relation Authority & Structure Contingency View Behavourial Science Administrative Theory No Best Method -Situational Factors. Psychology, Sociology, etc. Universal Management Principles AHAB/EVOLUTION/1102

  6. Scientific Management Scientific Management F.W. Taylor (1856 – 1917) Using time study, broke job into components, design best and quickest method of performing each component. - Using differential rate system. AHAB/EVOLUTION/1102

  7. Scientific Management 4 Basic Principles: (i) The development of true science of management – best method for performing job. (ii) Scientific Selection of workers – skill and task allocation. (iii) Scientific education and development of worker. (iv) Intimate, friendly cooperation between management and labour. AHAB/EVOLUTION/1102

  8. Scientific Management • CONTRIBUTION OF SCIENTIFIC MANAGEMENT • Modern assembly line • His efficiency technique being adopted by many organisation. • Established job design, scientific selection and development of workers. • Fostered a rational approach to solving problems and laid groundwork for the professionalization of management. AHAB/EVOLUTION/1102

  9. Scientific Management • LIMITATION • Do not take into account the human and social aspects. • Emphasis on Productivity/Profit only. • Treat men like machine AHAB/EVOLUTION/1102

  10. Administrative management Theory Administrative management Theory by Henry Fayol (1804 – 1925) 1st to systematize organisation. Using scientific forecasting and proper method of management Macro Concept Focus on formal organisation structure that separate basic process of general management. AHAB/EVOLUTION/1102

  11. Administrative management Theory Management Process planning, organising, command, coordination and control. AHAB/EVOLUTION/1102

  12. Administrative management Theory Fayol’s 14 Principles • Division of work • Authority and Responsibility • Discipline • Unity of Command • Unity of Direction • Subordination of individual interest to general interest. • Remuneration of personnel. • Centralization. • Scalar of Chain : authority. • Order : orderly place in organisation. • Equity : equity and justice • Stability of tenure of personnel : adaptation • Initiative • Esprit de corps. AHAB/EVOLUTION/1102

  13. BUREAUCRATIC MODEL BUREAUCRATIC MODEL Max Weber (1864 – 1920) Stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. AHAB/EVOLUTION/1102

  14. BUREAUCRATIC MODEL Organisation – take the form of a Bureaucratic structure. BUREAUCRATIC MODEL RATIONAL-LEGAL AUTHORITY The right to exercise authority based on position. • position with power • compensation : fixed salary • hierarchy of authority • technical competence • governed by rules and regulations AHAB/EVOLUTION/1102

  15. BUREAUCRATIC MODEL DIMENSIONS OF BUREAUCRACY • Division of labour based on functional specialization • A well-defined hierarchy of authority; • A system of rules covering the rights and duties of position • A system of procedures for dealing with work situations; • An impersonality in interpersonal relations. • A system of promotion and selection for employment based on technical competence. AHAB/EVOLUTION/1102

  16. Contribution of Fayol’s and Weber’ Theories Much of their theories have been in use till today e.g. - Concept of management skill - Concept of identifiable principles for effective managerial behaviour - Made managers aware of the basic kinds of problems in any organisation. AHAB/EVOLUTION/1102

  17. Limitation • Appropriate for the past where environment was • relatively stable and predictable. • Today’s environments are more turbulent and impredictable. • Too general for today’s highly complex • organisation and specialization. AHAB/EVOLUTION/1102

  18. HumanRelationsMovement HumanRelationsMovement Mary Parker Follet - had considered workers as human Chester Bernard - social need - Psychological need Individual & Group Manager and subordinate relation Early attempt to discover the social and psychologicalfactor that would create effective human relation. AHAB/EVOLUTION/1102

  19. THE HAWTHORNE EXPERIMENTS HumanRelationsMovement • - Westerm Electric’s Hawthorne Plant - Chicago • To study relationship between level of lighting in the work-place and workers productivity. • ‘Hawthorne effect’ Elton Mayo (1880 – 1949) The Hawthorne Effect: The possibility that workers who receive special attention will perform better simply because they received that attention. AHAB/EVOLUTION/1102

  20. HumanRelationsMovement Mayointroduced the concept of “Social man” – motivated by social need, on-the-job relationships, and responding more to work group pressure than to management control – was necessary to compliment the old concept of “rational man” motivated by personal economic needs. AHAB/EVOLUTION/1102

  21. HumanRelationsMovement Contribution of H.R. • Improved classical approach by stressing social needs. • Focus on workers – not on techniques.Emphasized management skill rather than technical skill. • Focus on group dynamics rather than individual. AHAB/EVOLUTION/1102

  22. HumanRelationsMovement Limitation • Assumming satisfied worker : to be more productive workers. • Social environment – only one of the several factors that influence productivity – • e.g. - salary level - culture - structure - interest . AHAB/EVOLUTION/1102

  23. The Behavioral Science School The Behavioral Science School • HR developed into BS • Introduced fields like: • Psychology • Sociology • Anthropology HR:Social man – motivated by desire for form relationships with others. AHAB/EVOLUTION/1102

  24. The Behavioral Science School BS:Argyris, Maslow, McGragor:- Self-actualizing – a more accurate concept to explain Human Motivation. “Complex man” No two people are exactly alike. AHAB/EVOLUTION/1102

  25. The Behavioral Science School CONSTRIBUTION OF BEHAVIOURAL SCIENCE • Enormous contributions to understanding of individual motivation, group behaviour interpersonel relationship at work and the importance of work to human beings. • Continue to contribute new insights in important areas as leadership, conflict, power, organizational change and communication. AHAB/EVOLUTION/1102

  26. The Behavioral Science School LIMITATIONS • Its potential not fully realized . • managers resist suggestion. • Model, theories and gargon are too • complicated and abstract to practicing • manager. • Difficult to interprete by practicing managers. AHAB/EVOLUTION/1102

  27. MANAGEMENT SCIENCE SCHOOL MANAGEMENT SCIENCE SCHOOL • Quantitative • Operation research • Formed during World War II by British to solve a number ofnew, complex problem in warfare. • Application of OR in the industry after the war to solveproblems related to planning and controlling in Management. AHAB/EVOLUTION/1102

  28. MANAGEMENT SCIENCE SCHOOL CONTRIBUTIONS In planning and controlling activities in development of product strategies, human resource development programme, product schedule etc. LIMITATIONS Mathematical basis of management is too complicated for practicing manager. Inadequate in dealing with sociology, psychology at work. AHAB/EVOLUTION/1102

  29. Environment A D B E Sub-systems C System Approach Environment AHAB/EVOLUTION/1102

  30. SYSTEM APPROACH DEFINITION OF SYSTEM “A system is defined as an organised, unitary whole composed of two or more interdependent parts, components, or subsystems and delineated by identifiable boundaries from its environmental suprasystem.” - (Kast + Rosenweig, pg. 103) AHAB/EVOLUTION/1102

  31. SYSTEM APPROACH THE SYSTEM APPROACH Concepts:- Subsystems Synergy Open and close systems System Boundary Flow Feedback AHAB/EVOLUTION/1102

  32. THE CONTINGENCY APPROACH • Situational Approach • It depends upon what – in what way • To identify which technique will, in particular situation, under particular circumstances and at a particular time – best contribute to the attainment of goals. • For Examples: • Unskilled workers – work simplification • Skilled workers – job enrichment might be effective. AHAB/EVOLUTION/1102

  33. THE NEO-HUMAN RELATIONS MOVEMENT • Is an Integrative approach that combines a positive view of Human nature with the scientific study of organisation to prescribe low effective managers should act in most circumstances. • It goes beyond contingency theory to propose how management should be out in most circumstance. • eg. Peters & Waterman“ Insearch of Excellence” study 43 “excellently manage” M). Companies. AHAB/EVOLUTION/1102

  34. They had been consistently profitable for over a 20-year period. Unusually successful inresponding tocustomers needs; Successful in rewarding work. Environment for their employees. Met their social and environment obligation effectively. They are “brilliant on the basics”. AHAB/EVOLUTION/1102

  35. PRINCIPLES 1.A set of new basics: • World class quality and services • Enhance responsiveness through increased flexibility and continuous • Short cycle innovation and improvement of all company’s products. • Must pursue “informal opportunism” must response to opportunity and challenges quickly as they arise. 2. To recognise people are the main enquire of any company – not the interchargable part of this corporate machine. (Stone : 49) AHAB/EVOLUTION/1102

  36. Traditional/ ClassicalTheories Contemporary Approaches Modifications Scientific Management Management Science Efficient Task Performance System Approach Economic Technical Rationality Subsystem & Environment Bureaucratic Model Human Relation Authority & Structure Contingency View Behavourial Science Administrative Theory No Best Method -Situational Factors. Psychology, Sociology, etc. Universal Management Principles AHAB/EVOLUTION/1102

  37. THE END AHAB/EVOLUTION/1102

  38. THANK YOU AHAB/EVOLUTION/1102

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