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History and Culture of Management. ( Lec:6,7,8,9). Asst. Prof. Management Science (USA), IMRAN HUSSAIN . Objectives. Management Approaches. Organizational culture. Managers Decision affected by culture. Specific and General environment. Management Approaches. Point No. 1… .
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History and Culture of Management (Lec:6,7,8,9) Asst. Prof. Management Science (USA), IMRAN HUSSAIN
Objectives • Management Approaches. • Organizational culture. • Managers Decision affected by culture. • Specific and General environment.
Management Approaches • Point No. 1…
Historical Background of Management • Ancient Management: • Egypt (pyramids) and China (Great Wall). • Adam Smith: • Published The Wealth of Nations in 1776 • Advocated the division of labor (job specialization) to increase the productivity of workers. • Industrial Revolution: • Substituted machine power for human labor. • Created large organizations in need of management.
Management Approaches • Scientific Management and General Administration. • Quantitative approach. • Behavioral approach. • Contemporary approach.
Scientific Management • Frank and Lillian Gilbreth: • Focused on increasing worker productivity through the reduction of wasted motion. • Developed the micro chronometer to time worker motions and optimize work performance. • How Do Today’s Managers Use Scientific Management? • Use time and motion studies to increase productivity. • Hire the best qualified employees. • Design incentive systems based on output.
F. W. Taylor Scientific Management: The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
Four Principles of Scientific Management • Study the way workers perform their tasks, gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed. • Time-and-motion study.
Continued… • Codify the new methods of performing tasks into written rules and standard operating procedures.
Continued… • 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.
Continued… • 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.
Problems with Scientific Management • Managers frequently implemented only the increased output side of Taylor’s plan. • Workers did not share in the increased output. • Specialized jobs became very boring, dull. • Workers ended up distrusting the Scientific Management method. • Workers could purposely “under-perform.” • Management responded with increased use of machines and conveyors belts.
The Gilbreths • Break up and analyze every individual action necessary to perform a particular task into each of its component actions. • Find better ways to perform each component action. • 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.
Administrative Management Theory • Administrative Management: • The study of how to create an organizational structure that leads to high efficiency and effectiveness.
General Administrative Theory • Henri Fayol: • Believed that the practice of management was distinct from other organizational functions • Developed principles of management that applied to all organizational situations. • Max Weber: • Developed a theory of authority based on an ideal type of organization (bureaucracy). • Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism.
Continued… • Max Weber: • Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness.
Weber’s Principles of Bureaucracy • A manager’s formal authority derives from the position he holds in the organization. • People should occupy positions because of their performance, not because of their social standing or personal contacts.
Continued… • The extent of each position’s formal authority and task responsibilities and it’s relationship to other positions should be clearly specified. • Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.
Continued… • Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .
Rules – formal written instructions that specify actions to be taken under different circumstances to achieve specific goals. Standard Operating Procedures (SOPs) – specific sets of written instructions about how to perform a certain aspect of a task. Norms – unwritten, informal codes of conduct that prescribe how people should act in particular situations. Rules, SOPs and Norms
Fayol’s Principles of Management • Division of Labor: • jobs can have too much specialization leading to poor quality and worker dissatisfaction. • Authority and Responsibility: • both formal and informal authority resulting from special expertise. • Unity of Command: • Employees should have only one boss.
Continued… • Line of Authority: • A clear chain of command from top to bottom of the firm. • Centralization: • The degree to which authority rests at the top of the organization. • Unity of Direction: • A single plan of action to guide the organization.
Continued… • Equity - The provision of justice and the fair and impartial treatment of all employees. • Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. • Initiative - The fostering of creativity and innovation by encouraging employees to act on their own.
Continued… • Discipline: • Obedient, applied, respectful employees are necessary for the organization to function. • Remuneration of Personnel: • An equitable uniform payment system that motivates contributes to organizational success.
Continued… • Stability of Tenure of Personnel: • Long-term employment is important for the development of skills that improve the organization’s performance. • Subordination of Individual Interest to the Common Interest: • The interest of the organization takes precedence over that of the individual employee.
Continued… • Esprit de corps (Team spirit): • Comradeship, shared enthusiasm foster devotion to the common cause organization.
2- Quantitative Approach • Total Quality Management. • Management Information Systems (MIS). • Operation Management. • Quantitative Management.
Management Science Theory • 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.
Continued… • Quantitative management: Utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory. • Operations management: Techniques used to analyze any aspect of the organization’s production system.
Continued… • Total Quality Management (TQM): Focuses on analyzing input, conversion, and output activities to increase product quality. • Management Information Systems (MIS): Provides information vital for effective decision making.
What is TQM • Total: (Made up of the whole) • Quality: (Degree of excellence a product) • Management: (Act, art, or manner of handling, controlling, directing, etc.)
Continued... • “TQM is not a destination, but a journey toward improvement.” (Hunt, Managing for Quality, 1991) • “Is the set of management processes and systems that create delighted customers through empowered employees, leading to higher revenue and lower cost.” (The Juran Institute, Inc.)
Continued... • “TQM is a management philosophy, a paradigm, a continuous improvement approach to doing business through a new management model.” • “A philosophy and a set of guiding principles that represent the foundation of a continuously improving organization.”
Continued... • Focuses on meeting owners’/customers’ needs, by providing quality services at a reasonable cost. • Focuses on continuous improvement. • Recognizes role of everyone in the organization. • View organization as an internal system with a common aim.
Continued... • Focuses on the way tasks are accomplished. • Emphasizes teamwork. • Application of Quantitative methods and Human Resources. • Combination of fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach.
Benefits of TQM • Greater Customer Loyalty. • Market Share Improvements. • Higher Stock Prices. • Reduced Service Cost. • Greater Productivity. • Higher Prices.
3- Behavioral Approach • Early advocates of Organizational Behavior. • The Hawthorne Studies.
Behavioral Management Theory • The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.
Behavioral Management • Mary Parker 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.
The Hawthorne Studies • Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.
Continued... • Worker productivity was measured at various levels of light illumination. • Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.
Continued... Human Relations Implications • Hawthorne effect— workers’ attitudes toward their managers affect the level of workers’ performance
Continued... • Human relations movement – advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity.
Continued... Implications: • Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task.
Continued... • Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance.
The Hawthorne Studies • A series of productivity experiments conducted at • Western Electric from 1924 to 1932. • Experimental findings: • Productivity unexpectedly increased under imposed adverse working conditions. • The effect of incentive plans was less than expected. • Research conclusion: • Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.
4- Contemporary approach • Systems Theory. • The Contingency Approach.
The Systems Approach • System Defined: • A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. • Basic Types of Systems: • Closed systems: • Are not influenced by and do not interact with their environment (all system input and output is internal). • Open systems: • Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.
