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Historical Overview of Mgmt Thought

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Title: Historical Overview of Mgmt Thought


1
Historical Overview of Mgmt Thought
  • Units 3 - 6

1
2
Objective
  • Explain the importance of the evolution of
    management theories.
  • To understand how the historical theories still
    apply to contemporary management.

2
3
Historical Overview
  • Management practice has been around for thousands
    and thousand of years.
  • Evidence of the development and use of management
    principles prior to the 1800 is present but is
    meager.
  • Organized endeavors in antiquity such as
  • the building of the Egyptian Pyramids and
  • the Great Wall of China
  • are examples of structures that were overseen by
    people responsible for
  • planning, organizing, leading and control
    activities Robins and Murkeji, 1990

3
4
Historical Overview contd
  • Studying management history helps you to
    understand theory and practice as they are today.
  • Because current management concepts are the
    result of continual development, testing,
    modification, retesting and improvement of
    historical concepts.

5
Historical Overview contd
  • Management did not emerge as a formal discipline
    until about 1900,
  • mainly because of the advent of the Industrial
    Revolution Amrine, Ritchey and Hulley, 1975.
  • The series of events that brought into being the
    factory system
  • occurred from 1770 to the early 1800 and
  • was characterized by inventions that brought
    machine power in the factory.

5
6
The Evolution Of Management Thought
  • Theorists over the past century have developed
    numerous models to answer the same basic
    management question
  • What is the best way to manage a business
    enterprise or an organization?
  • The reason we continue to study those models
    today is that they still apply to the managers
    job.

6
7
No Universally Accepted Theory of Management
  • There are several approaches to the theory and
    practice of management.
  • The Classical School
  • The Behavioral approach
  • The Systems approach
  • The Contingency approach
  • The Mgmt Science/Decision Making Approach

7
8
These Approaches are Based on Different
Assumptions About
  • behavior of people in organizations,
  • key objectives of an organization,
  • types of problems faced, and
  • solutions to those problems.
  • Each approach has contributed to the evolution of
    modern mgmt thought can be used effectively in
    different circumstance.

8
9
1. Classical School (1890-1938)
  • Grew out of the need to find guidelines for
    managing complex organizations.
  • The writers include
  • F. Taylor, Gilbreth, Fayol, Weber, Urwick,
    Barnard.
  • They placed emphasis on
  • the planning of work,
  • the technical requirements of the organization,
    principles of management, and
  • Improving the organization structure as a means
    of increasing efficiency

9
10
1. Classical School contd.
  • Attention was given to
  • division of work
  • clear definition of duties responsibilities
  • specialization, and
  • coordination
  • Stresses the managers role in a strict hierarchy
    focuses on efficient consistent job
    performance,
  • is divided into three main branches namely
  • Scientific management, (Taylor, 1856-1915, F L
    Gilbreth, Gantt),
  • Administrative management, (Fayol 1841-1925) and
  • Bureaucratic management, (Weber, 1864-1920,
    Barnard 1886-1961, Urwick 1891-1983).

10
11
Scientific Mgmt / Operational Approach
  • Mgmt which conducts a business by standards
    established by facts gained through systematic
    observation experiment or reasoning.

11
12
Scientific Management Frederick W. Taylor
(1856-1915)
  • Arose out of the need to improve manufacturing
    productivity through more efficient utilization
    of physical human resources
  • focuses on individual worker-machine
    relationships in manufacturing plants.
  • Its philosophy is that management should be based
    on proven fact and observation, not on guesswork
    or hearsay.
  • Taylor believed that
  • increased productivity ultimately depended on
    finding ways to make workers more efficient.
  • One of his goals was to study and define
    precisely all aspects of the worker-machine
    relationship by using objective, scientific
    techniques.

12
13
Scientific Management
  • Focused on
  • Developing performance standards on the basis of
    systematic observations and experimentation
  • Standardization of work practices and methods to
    reduce waste and increase productivity
  • Time and task study of workers efforts to
    maximize productivity and output
  • Systematic selection and training of workers to
    increase efficiency and productivity
  • Differential pay incentives based on established
    work standards

14
Taylor
  • used time and motion studies to determine the
    most efficient way to complete the task.
  • stressed the importance of hiring and training
    the proper worker to do that job.
  • advocated for
  • the standardization of tools,
  • the use of instruction cards to help workers
  • breaks to eliminate or reduce fatigue tiredness
    and
  • a differential pay system.
  • also suggested that management had the
    responsibility to support and help worker solve
    problems.

14
15
Taylors principles of scientific management
  • Develop a science for each element of an
    individual work, which replaces the old rule of
    thumb method
  • Establish standards with respects to methods and
    time for each task
  • Scientifically select and then train, train,
    teach and develop the worker.
  • (Previously, workers chose their own work and
    trained themselves as best they could)
  • Wage incentives should be an integral part of
    each job

16
Taylors principles of scientific management
  • Job specialization should be a part of each job
  • this specialization included mgmt, which he
    termed functional foremanship
  • Planning and scheduling of work

17
F.W. Taylor
  • Using similar approaches in other jobs, Taylor
    was able to define the best way of doing each
    job.
  • Overall, Taylor achieved consistent improvements
    in productivity in the range of 200 percent or
    more.
  • He reaffirmed the role of managers to
  • plan and control, and
  • of workers to perform as they were instructed.

17
18
Contributions of Scientific Mgmt
  • Made jobs and the management of these jobs more
    efficient and productive.
  • The concept of scientific analysis was introduced
    to the work place time and motion study.
  • Task and bonus plan is the foundation of many
    incentive plans today.
  • Use of standard hour
  • Amount of work a worker may normally be expected
    to do in an hour

18
19
Contributions of Scientific Mgmt
  • The concept of a management specialist was
    introduced through the role of functional
    foremanship.
  • Workers enjoyed a higher standard of living, more
    respect and improved job skills.
  • Suggestion that executives manage by exception

19
20
Contributions of Scientific Mgmt contd
  • Todays management topics that address issues
    such as
  • job design, incentives and goal setting,
  • all find their origin in scientific management
    approach.
  • One of the most famous examples of the
    application of scientific management is the
    factory Henry Ford built to manufacture model T
    cars.

20
21
Criticisms of Scientific Mgmt
  • It is a machine model.
  • worker was seen as an instrument of production
    which can be treated as any other tool to perform
    simple repetitive tasks. his was blamed for
    boredom apathy attendant quality problems.
  • had an authoritative leadership approach.
  • Trade unions thought that by mgmt setting
    standards piece rates, workers were being
    exploited, especially that workers participation
    was not emphasized.
  • was not concerned with the problems of senior
    executives, it concentrated on the shop floor
    problems.

21
22
Criticisms of Scientific mgmt contd
  • The motivational assumption of scientific
    management were simplistic.
  • Taylor ignored many social and psychological
    factors related to the job.
  • However, money is a powerful motivator.
  • The broader relationship between the firm and
    society was ignored.
  • The focus was on the internal operations of the
    firm, specifically the factory.

22
23
Other Contributors
  1. Frank Gilbreth (1868 - 1924)
  2. Lillian Gilbreth (1878 1972)
  3. Henry Gantt (1961 1919)

23
24
Frank Gilbreth (1868 - 1924)
  • studied work arrangements to eliminate wasteful
    hand and body motions.
  • He based his studies on a new tool motion
    pictures to carefully study the structure of the
    task.
  • he identified 18 individual motions that a
    bricklayer uses to lay bricks.
  • By changing the tasks structure he reduced the
    18 motions to 5, which resulted in more than 200
    increase in the workers productivity.
  • He developed a new way to stack bricks, and
    invented the SCAFOLD to reduce bending.
  • Todays industrial engineers have combined Frank
    Gilbreths methods with Taylors to redesign jobs
    for greater efficiency.

24
25
Lillian Gilbreth - psychologist (1878 1972)
  • was more concerned with the human side of
    industrial engineering.
  • She championed the idea that workers
  • should have standard days,
  • scheduled rest breaks, and
  • normal lunch periods.
  • Her work influenced USA Congress to establish
    child labor laws and to develop rules for
    protecting workers from unsafe conditions.

25
26
Henry Gantt (1861 1919)
  • Developed the Gantt Chart for control systems in
    production scheduling.
  • Gantt charts are still widely used to plan
    project scheduling and have been adapted for
    computer scheduling applications.
  • He also established quota systems and bonuses for
    workers who exceeded their quotas.
  • His control systems coupled with bonuses that
    supplemented basic wage rates has produced a
    profound impact on current concepts like
    gain-sharing.

26
27
Administrative/Universal Approach (Henri Fayol
1841 1925).
  • Universal Process Approach
  • Assumes all orgs require the same rational mgmt
    process
  • Core management process remains the same
    regardless of the purpose of the organization.
  • The management process can be reduced to a set of
    separate functions and related principles.
  • Fayol wrote around the same time as Taylor.
    However, whereas
  • Taylor was concerned with management at the
    shop-floor level and used the scientific method.
  • Fayols attention was directed at the activities
    of all managers and wrote from personal
    experience.

27
28
General Administrative Theorists contd
  • Focused on the identification of major functions
    and principles that
  • managers could use to achieve superior levels of
    organizational performance.
  • Supporters of this approach
  • emphasized the perspective of senior managers
    within the organization and
  • believed that management was a profession and
    could be taught.
  • Fayol, a French industrialist practitioner
    identified 5 operating activities, 5 functions
    and 14 principles of management.

28
29
5 Key Operating Activities
  • Technical activities
  • ie. production
  • Commercial activities
  • buying and selling
  • Financial activities
  • ie. Securing capital
  • Security activities
  • Concerned with safeguarding property
  • Accounting activities
  • ie providing financial information

29
30
H. Fayols 5 Functions of Mgmt.
  • Fayol published Administration Industrielle et
    Générale in 1916.
  • He divided a managers job into five functions
  • Planning
  • Organizing
  • Command
  • Coordination
  • Control
  • He developed 14 universal principles of
    management.

30
31
(No Transcript)
32
Lessons from the Universal Process Approach
  • The management process can be separated into
    interdependent functions.
  • Management is a continuous process.
  • Management is a largely, though not an entirely,
    rational process.
  • The functional approach is useful because it
    specifies what managers should do.

33
Criticisms of Fayols Principles
  • Create the impression that the mgmt process is
    more rational and orderly than it really it.
  • Some critics
  • dismiss his principles as no more than advice
  • say his concepts reflect a rigidity and formalism
    which leads directly to inefficiencies of
    bureaucracy.

33
34
Contribution
  • Fayols functions of mgmt are still popular today
  • Emphasis of the organization chart and job
    specification.
  • His 14 principles can contribute to successful
    mgmt
  • Mgrs seeking to solve structuring problems would
    do well to use most Fayols basic concepts.

34
35
Max Weber (1864 -1920) and The Concept of
Bureaucracy.
  • a German social scientist felt organizations be
    made most efficient by having a
  • highly organized system,
  • rigid structure of authority, and
  • working according to a detailed set of
    procedures, rules and regulations
  • Bureaucratic management
  • provides a rational blueprint of how an entire
    organization should operate.
  • prescribes seven characteristics.
  • which represent a formal somewhat rigid method of
    managing

35
36
Characteristics of Bureaucratic Mgmt
  1. A Hierarchical Structure
  2. Division of Labor
  3. A system of rules and procedures
  4. Impersonality
  5. Stability of employment
  6. Separation of ownership
  7. Rationality

36
37
1. A Hierarchical Structure
  • Ranks jobs according to the amount of power and
    authority given to each level.
  • Typically, power and authority increases at each
    higher level, up to the top of the hierarchy.
  • According to Weber,
  • a well-defined hierarchy helps control the
    behavior of employees by
  • making clear to each exactly where he or she
    stands in relation to every other employee.

37
38
2. Division of Labor
  • Specialization is necessary.
  • Functions of the job are defined and
    qualifications are to some extent specified.
  • Selection for employment promotion are directly
    related to technical competence.
  • Proven capacity in the execution of the job is
    the basis for for internal promotion.

38
39
3. A system of rules and procedures
  • Duties, rules, standards of performance and
    regulations are drawn up clearly.
  • The rules facilitate standardization equality
    of treatment
  • Administrative acts, decision and rules are
    formulated and recorded in writing and files are
    properly kept
  • Unity of command prevails

39
40
4. Impersonality
  • Officials are expected to carry out their duties
    without regard to personal considerations.
  • Operation of the rules will be without ill-will
    and or bias.
  • This characteristic guarantees fairness for all
    employees when it is assumed that
  • an impersonal superior does not allow subjective
    personal or emotional considerations to color his
    or her evaluations of subordinates.

40
41
5. Stability of employment
  • Employment is under the terms of a contractual
    relationship in which duties and rights are
    clearly stated.
  • The employee is offered a regular salary, some
    degree of security of tenure and the opportunity
    of promotion
  • Pension rights are offered to most categories of
    employees.

41
42
6. Separation of ownership
  • Managers should be completely separated from
    ownership of the means of production.
  • There should be complete separation between the
    office belonging to the organization and the
    personal property of the of the official.

42
43
7. Rationality
  • Running the organization logically and
    scientifically making decisions that promote
    achieving of organization's objectives.
  • Rational managers use the most efficient possible
    means to achieve the organisations objectives.
  • Rationality allows general organizational
    objectives to be broken down into more specific
    objectives for each part of the organization.

43
44
Benefits Of Bureaucracy
  • The bureaucratic systems strengths are
  • efficiency, consistency and predictability.
  • functions best when many routine tasks need to be
    done.
  • The lower level employees far removed from the
    top, execute their jobs by simply following the
    rules.
  • The mangers lack of direct observance of what the
    employees are doing is substituted by rules and
    regulations.
  • In order to bring efficiency, the output is of a
    standard nature.

44
45
Drawbacks of Bureaucracy
  • Rigid rules and red tape
  • The reliance on formal structure and procedures
    reduces
  • individual freedom, creativity and flexibility,
    fostering low motivation and high turnover among
    the best employees
  • Protection of authority
  • Managers may perform at minimum productivity,
    while protecting and expanding their own
    authority.
  • Knowledge and expertise is assumed to reside at
    the top

45
46
Drawbacks of Bureaucracy contd
  • Slow decision-making
  • Formality and ritual, delay decision making at
    every management level until
  • all red tape has been cleared,
  • insistence on power and status privileges has
    been satisfied and
  • any chance or error in judgment has been
    minimized.
  • Bureaucracies do not cope well with change.

46
47
Drawbacks of Bureaucracy contd
  • Incompatibility with changing technology.
  • Bureaucratic rules are much less useful when the
    nature of the task continually changes and new
    procedures and have to be experimented with
  • Incompatibility with professional values.
  • The professional sees authority as stemming from
    personal competence or technical knowledge not
    from bureaucratic authority related to
    hierarchical position.

47
48
Bureaucratic Approach is Effective When
  • large amounts of standard information or products
    have to be processed and an efficient processing
    method has been found
  • as in banks, insurance and manufacturing
    companies
  • the needs of the customer are known and are not
    likely to change.
  • the technology is routine and stable, so
    employees can be easily and quickly taught how to
    operate machines.

48
49
Criticisms of Bureaucracy
  1. In practice it has become the epitome of
    inefficiency.
  2. Career orientation makes some interested in
    protection of their career than in dealing with
    clients.
  3. Rules often slow down the work of the
    organization red tape.
  4. Specialization leads to ignorance of even related
    tasks.
  5. Initiative may be stifled.
  6. Impersonal relations can lead to lack of
    responsiveness
  7. Lack of attention to the informal organization
  8. It restricts mental/emotional growth of the
    individual

49
50
The Legacy of The Classical Approach
  • Still provides insights into many management
    problems today
  • Scientific approach shows that
  • job design is critical to the efficiency
    effectiveness of an organization.
  • Mgrs should not assume that the way a job is
    being done is the best way.
  • Mgrs must reward performance
  • Webers concept of bureaucracy continues to define
    most organization structure today

50
51
The Legacy of The Classical Approach
  • Fayols guidelines are followed by almost all
    modern organizations.

51
52
Limitation of Classical Approach
  • It does not take human matters into account.
  • It does not consider how people fulfill the work
    roles given to them, instead
  • It tends to treat worker efficiency from a
    mechanical view point.

52
53
The Behavioral Approach
  • Human relations movement is concerned with
    increasing productivity by (Kreitner, 2007 p.
    41)
  • making mgrs more sensitive to employee needs, and
  • focusing on understanding the human element in an
    organization
  • ie individuals and groups and how they can be
    effectively and efficiently combined in a large
    organization.
  • Arose out of the influences of
  • The threat of unionization
  • The philosophy of industrial humanism
  • The Hawthorne studies

53
54
The Human Relations Movement
  • The Threat of Unionization
  • The Wagner Act of 1935 legalized union-management
    collective bargaining, promoting the growth of
    unions and union avoidance by firms.
  • The Hawthorne Studies (1924)
  • The studys results that productivity was
    strongly affected by workers attitudes
  • turned management toward the humanistic and
    realistic viewpoint of the social man model.

55
3. The Philosophy of Industrial Humanism
  • Elton Mayo (1880 1949)
  • The founder of both the human relations and
    industrial sociology school- Australian
  • Emotional factors were more important
    determinants of productive efficiency than were
    physical and logical factors.
  • Mary Parker Follett (1868 - 1933)
  • Managers should be aware of how complex each
    employee is and how to motivate employees to
    cooperate rather than to simply demand
    performance from them.

56
The Philosophy of Industrial Humanism
  • Douglas McGregor
  • Developed Theory X and Theory Y
  • Theory X Managements traditionally negative
    view of employees as unmotivated and unwilling
    workers
  • Theory Y The positive view of employees as
    energetic, creative, and willing workers

57
(No Transcript)
58
The Philosophy of Industrial Humanism
  • H. Munsterberg (1863 1916)
  • He argued for the scientific study of human
    behavior to identify general patterns and to
    explain individual differences.
  • He suggested the use of psychological tests to
    improve
  • employee selection,
  • the value of learning theory in the development
    of training methods, and to
  • understand what techniques are most effective for
    motivating workers.
  • Most of the current knowledge of selection
    techniques, employees training, job design and
    motivation are built on the work of Munsterberg

58
59
Mary Parker Follet
  • Managers should
  • have the desire to get employees to work harder
    and be aware that each employee is a complex
    collection of emotions beliefs and habits
  • Recognize the individuals motivation
  • Motivate performance rather than simply demanding
    it.

59
60
The Hawthorne Experiments
  • Human relations or behavioral approach was the
    first major approach to emphasize informal work
    relationship and worker satisfaction.
  • The approach emerged from a research project
    that
  • started as a scientific management study of
    seeking greater efficiency through,
  • improving the tools and methods of work in this
    case light.

60
61
The Hawthorne Experiments
  • Illumination studies (1924 1927)
  • Assembly Test Room studies (1927- 1929)
  • Interview studies (1928 1931)
  • Bank Wiring Observation Room
  • Personnel counseling programme (1936)

61
62
Discoveries of Mayo
  • The amount of work carried out by a worker is not
    determined by his or her physical capacity, but
    by his or her social capacity.
  • Non-economic rewards play a central role in
    determining the motivation and happiness of the
    worker.
  • The highest specialization is by no means the
    most efficient form of division of labor.
  • Workers do not react to management its norms and
    rewards as individuals, but as groups.

62
63
Mayos Conclusions
  • Behavior and sentiments were closely related,
  • group influence significantly affected individual
    behaviors,
  • group standards established individual worker
    output, and
  • money was less, a factor in determining output
    than group standards, group sentiments

63
64
Contributions of Hawthorne Studies
  • Placed a concern for people into the main stream
    of mgmt thought.
  • Recognition that the
  • Feelings, attitudes, background, need social
    relationships of people are crucial to effective
    mgmt and
  • That efficiency and productivity in business
    require a better utilization of human resources.

64
65
Contributions of Hawthorne Studies
  • Called for a new mix of managerial skills,
    namely
  • Diagnostic skills
  • understanding new behavior
  • Interpersonal skills
  • counseling, motivating, leading and communication
  • Technical skills

65
66
Criticisms of The Hawthorne Studies
  • Methodology failure of investigates to
    sufficient account of environmental factors.
  • Major flaws in the study included changing
    several factors at the same time.

66
67
Lessons from the Behavioral Approach
  • People are the key to productivity.
  • Success depends on motivated and skilled
    individuals committed to the organization.
  • Managerial sensitivity to employees is necessary
    to foster the cooperation needed for high
    productivity.

67
68
The Human Relations Movement
  • emphasized the role of communication,
    participation and leadership
  • assumed that the most satisfying organization
    would be the most efficient
  • pointed out that workers would not be happy in
  • cold, formal, rational orgs that only satisfied
    their economic needs.
  • Happy employees would be cooperative and thus
    increase organization efficiency
  • It pointed to a perfect balance between the
    organizations goals and the workers needs

68
69
The Human Relations Movement
  • emphasized the importance of
  • communication between ranks,
  • explaining to the lower participants the reasons
    why a particular course of action was taken,
  • lower ranks participation in decision making,
    particularly in matters that affect directly.

69
70
Criticisms
  • It did not have a full view of the organization
  • It viewed the factory as a family, rather than
  • a power struggle among groups with conflicting
    interests
  • Eg
  • Supportive supervision and good human relations
    may not automatically lead to higher morale or
    even better job performance.

70
71
The Systems Approach
  • A system is
  • an association of interrelated and interdependent
    parts.
  • An organization is a system with many departments
    that are linked by people working together.
  • The systems viewpoint of management represents an
    approach to solving problems by
  • diagnosing them within a framework of what are
    called the systems inputs,
  • transformation processes, and
  • outputs, in the light of feedback.

71
72
Chester I. Barnards Early Systems Perspective
  • He saw organizations as social systems that
    require employee cooperation if they are to be
    effective.
  • He viewed organizations as made up of people who
    have interacting social relationships.
  • As such, the managers major roles were to
    communicate and stimulate subordinates to high
    levels of effort.
  • Barnard saw that a major part of an
    organizations success depended on maintaining
    good relations with its personnel.

72
73
Chester I. Barnards Early Systems Perspective
contd
  • Successful management depends on maintaining
    good relations with people outside the
    organization, and
  • others with whom managers deal regularly.
  • By recognizing the organizations dependence on
    investors, suppliers, customers and other outside
    interests, he introduced the idea that
  • managers have to examine the organizations
    external environment and
  • adjust its internal structure to maintain a
    balance between the two.

73
74
General Systems Theory
  • Is based on the assumptions that everything is
    part of a larger, interdependent arrangement
  • Levels of systems (Kreitner 2007, p.45)
  • Each system is a subsystem of the system above
    it.
  • Identification of systems at various levels helps
    translate abstract systems theory into more
    concrete terms.

74
75
Levels of Living Systems (Kreitner 2007, p.46)
75
76
General Systems Theory (contd)
  • Closed Versus Open Systems
  • Closed system
  • A self-sufficient entity
  • Open system
  • Something that depends on its surrounding
    environment for survival
  • Systems are classified as open / closed by how
    much / how little they interact with their
    environments.

76
77
Lessons From The System Approach
  • Mgrs have greater appreciation for the importance
    of seeing the whole picture
  • Open-systems thinking encourages awareness of
    both internal external realities.
  • The systems approach also works to integrate
    various mgmt theories.
  • Critics say
  • the systems approach is nice in theory, but
  • short on facts and practical advice.

77
78
The Contingency Approach
  • Contingency Approach
  • A research effort to determine which managerial
    practices and techniques are appropriate in
    specific situations
  • Different situations require different managerial
    responses.
  • It deals with intercultural feelings in which
    custom and habits cannot be taken for granted.

78
79
The Contingency Approach (contd)
  • Lessons from the Contingency Approach
  • it emphasizes situational appropriateness, rather
    than
  • rigid adherence to universal principles.
  • Critics say
  • It creates the impression that an organization is
    captive to its environment

79
80
Mgmt Science Approach
  • The study of complex systems of people, money,
    equipment and procedures, with the
  • goal of understanding them and improving their
    effectiveness (Bittel Ramsey, 1985)
  • Studies are conducted through
  • the use of scientific method, utilizing tools and
    knowledge from the physical, mathematical and
    behavioral sciences.
  • Its ultimate purpose is to provide the mgr with a
    sound, scientific and quantitative basis for
    decision making.

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Mgmt Science Approach contd
  • The quantitative techniques include
  • simulation forecasting, inventory modeling,
    network modeling and break-even analysis.
  • The major area of application is in the
    production and operations management to solve
    problems of scheduling and budgeting and
    maintenance of inventory levels.

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Limitations
  • The models neglect non-quantifiable factors such
    as subjective, political and behavioral issues
    and in consequence, the important human element
    is left out.
  • This approach may not be suitable for no-routine
    or unpredictable management decisions.

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Contemporary Mgmt a Synthesis
  • Contemporary management is a synthesis of the
    five approaches to management
  • Classical
  • Behavioral
  • Systems
  • Contingency, and
  • Management science / decision making approach

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Contemporary Mgmt a Synthesis contd
  • Scientific management
  • provides a means for competing more effectively
    with foreign firms.
  • Firms are placing renewed emphasis on job design,
    making products simpler, and
  • scientifically examining the workplace to improve
    work functions.

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Contemporary Mgmt a Synthesis contd
  • Behavioral approach
  • Chester Barnard's concern for communication and
    cooperation and
  • Douglas McGregor's belief in participation to
    improve both effectiveness and efficiency can be
    seen throughout business today.
  • Managerial sensitivity to employees is necessary
    to foster the cooperation needed for high
    productivity
  • Emotional factors were a more important
    determinant of productive efficiency than
    physical and logical factors were

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Contemporary Mgmt a Synthesis contd
  • Systems approach
  • is also being used more than ever, as a problem
    solving approach. Organisations build complex
    models to evaluate the impact of their decisions
    on other Stakeholders.
  • Contingency approach
  • more and more managers are practicing contingency
    theory management.
  • they examine the variables in a problem - solving
    situation and then make decisions based on
    experience, and knowledge

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Contemporary Mgmt a Synthesis contd
  • Management science approach
  • Both managers and operating employers are
    increasingly using management science techniques
    in their efforts to become more competitive and
    make better decisions

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Japanese Mgmt Practices
  • Embody many aspects of the 5 approaches to
    management.
  • Japanese mgrs have refined some techniques and
    practices, and
  • have imitated many of the more desirable aspects
    of American management philosophy.
  • The Japanese have been so successful with their
    management approaches that they have come to
    dominate many foreign markets.

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Japanese Mgmt Practices contd
  • Are based on several important principles
  • Participative management
  • Job design
  • Quantitative methods
  • Effectiveness and efficiency
  • Increasing productivity through group decision
    making
  • Holistic treatment of employees, who are seen as
    interchangeable parts.
  • Cooperation and harmony in the workplace.

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Excellence in Mgmt
  • An approach in which characteristics of excellent
    firms are used as models for other firms
  • Thomas J. Peters and Robert H. Waterman suggest
    that
  • financially successful companies possess certain
    characteristics that result in excellence.
  • The set of characteristics is based on
  • information gathered from interviews and
    questionnaires, and
  • on secondary data obtained principally from
    thirty-three leading U.S companies.

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Excellence in Mgmt contd
  • Characteristics that result in excellence
  • Fleet-of-foot
  • successful companies rely on a few bright people
    to experiment for a while with cheap prototypes,
    testing out ideas on a few intimate customers.
  • Simple form and lean staff
  • the innovative, fleet-of-foot operation is only
    possible because the company superstructure of
    top-level executives is kept lean, and
  • the organisation structure is simple and flexible

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Excellence in Mgmt contd
  • Autonomy and entrepreneurship
  • It is necessary to have enough innovative people
    and they must be given the autonomy to operate
    freely.
  • This demands mutual trust and a willingness to
    accept a reasonable number of mistakes.
  • Close to customers
  • customers are colleagues, part of the business
    and first among equals.
  • They serve through informing management what
    their needs are, and
  • how well they are, or are not, being satisfied.
  • Listening to them is often the spark that fires
    innovation.

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Excellence in Mgmt contd
  • Simultaneous loose-tight properties
  • most managers are used to conventional, rigid,
    hierarchical structures, in which they exercise
    tight control.
  • Top managers of successful companies
  • concentrate only on those things that must be
    centrally determined, and
  • as much responsibility and authority as possible
    is placed wherever it can best be exercised.
  • Instead of communication barriers that exist in
    some traditional companies, there is
  • a lively human interaction between the conductor
    and the players.

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Excellence in Mgmt contd
  • Sticking to the knitting
  • ensuring that everyone is playing the same tune,
    or
  • engaging only in ventures in which the company
    has complete competence.
  • Productivity through people
  • The way people make use of the equipment
    provided, will determine the quality and
    productivity.  

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Excellence in Mgmt contd
  • Hands-on, value driven
  • managers who spend nearly all of them time in
    seclusion of their offices, relating only to a
    few individuals who are directly responsible to
    them.
  • There are also managers who spend very little of
    their time in that way.
  • They prefer to be out visiting operational units,
    RD laboratories, customers suppliers, gaining
    direct knowledge of all kinds.
  • Through their 'walking the floor" they are able
    continuously to
  • express to employees in words and actions, the
  • vision and values of the company.
  • Peters and Austin's MBWA is what is most needed
    in times of rapid change and uncertainty.

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Excellence in Mgmt contd
  • The excellence characteristics are often viewed
    as the way to manage.
  • Peters and waterman found that successful
    companies
  • avoid management science approaches, and
  • emphasize "softer' issues such as closeness to
    the customer and the importance of innovation.

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Limitations
  • The Peters and Waterman study has been criticized
    for not being very systematic.
  • Only successful companies were studied.
  • It is possible that unsuccessful companies had
    similar characteristics.
  • Moreover, several of the firms included in the
    study subsequently experienced financial or
    market difficulties.

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Strength
  • The excellence approach in which these
    characteristics are used as a model, changed
    management significantly

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Summary
  • Management is an interdisciplinary and
    international field that has evolved over the
    years.
  • The operational approach has evolved from
    scientific management to operations management.
  • Quality advocates teach the strategic importance
    of high-quality goods and services.
  • Management has turned to the human factor in the
    human relations movement and organizational
    behavior approach.

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Summary (contd)
  • Under the systems approach, modern organizations
    are viewed as open systems.
  • The contingency approach stresses situational
    appropriateness rather than universal principles.
  • A quick-fix is unlikely to solve an
    organizations unique problems.

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The End
  • Unit 3 - 6

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