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  1. 1. EVOLUTION OFMANAGEMENT THOUGHT S.F.Chandra Sekhar PhD Professor & Chairperson - HR Siva Sivani Institute of Management http://www.ssim.ac.in
  2. 2. ELEMENTS OF HISTORY Dates People Events Places
  3. 3. TRENDS1880 1900 1920 1930 1940 1950 1960 Present----------Classical -------Human Relations ----------Systems ----------Contingency------
  4. 4. MANAGEMENT PERSPECTIVESOVER TIME Exhibit 2.1, p.44 2000 The Technology-Driven Workplace 2010 1990 The Learning Organization 2010 Total Quality Management 1980 2000 Contingency Views 1970 2000 Systems Theory 1950 2000Management Science Perspective 1940 1990 Humanistic Perspective 1930 19901870Classical 1890 1940 2010 4
  5. 5. CLASSICAL/SCIENTIFIC MGMTSCHOOL Originators : F.W.Taylor, Henri Fayol, Frank and Lillan Gilbreth Emphasis : Science, rationality F.W.Taylor (Father of Scientific Management, 1911). Propounded Scientific Management Principles.  Replacing Rules of Thumb with a true science of work  Achieving cooperation of human beings, rather than chaotic individualism  The scientific selection and progressive development of workmen  Working for maximum output rather than restricted output.
  6. 6. HENRI FAYOL Father of Modern Operational Management Theory, 1841-1925. French industrialist Propounded 14 universal management principles  Division of work for greater efficiency and productivity  Authority and responsibility  Discipline requires good superiors at all levels  Unity of command – orders from one boss  Unity of direction – commitment to same plan  Subordination of individual to the general interest  Remuneration -methods of pay should be fair and satisfactory to all  Centralization – extent to which authority is concentrated or dispersed  Scalar Chain – chain of superiors from highest to lowest  Order – arrangement of things and people  Equity – management should judge things and people with fairness  Stability of tenure – there ought to be proper training and settling down of the people, freedom from interference.  Initiative – to be encouraged to full  Exspirit De Corps – to build good team spirit and morale among workers.
  7. 7. HENRY GANTT Colleague of Taylor. He replaced old piece rate system of pay with a day-rate system. Concept of bonus for those who met and exceeded the target set. He developed a type of bar chart to show the time relation between the task achieved in comparison too the optimum target set.
  9. 9. FRANK AND LILLIAN GILBRETH Proponents of Motion Studies, 1917. Defined a motion study as “dividing work into most fundamental elements possible; studying these elements separately and in relation to one another; and from these studies elements, when timed, building methods of least waste.
  10. 10. MAX WEBER “theoryof bureaucracy,” thought an organization should be based on 5 principles:  Formal authority of managers  Jobs based on qualifications  Authority and responsibility clearly defined  Hierarchical positions  Rules and SOPs control organization
  11. 11. CONCLUDING REMARKS Achievements:  Brought formal and rational approach to management  Improved working practices that resulted in vast increase in productivity. Drawbacks :  Tasks were reduced to their simplest, smallest elements which led to boring, repetitive and monotonous.  Misconception that workers were only motivated by money.
  12. 12. HUMAN RELATIONS Originators: E.Durkheim, M.P.Follet, C.Barnard, E.Mayo, D.McGregor, A.Maslow, F.Herzberg. Emphasis : Micro Environment (needs, motivation and leadership ) Macro environment (social and technical systems analysis)
  13. 13. ELTON MAYO 1880-1949 Experimented and proved that the working conditions on levels of productivity at Hawthorne Plant of Western Electric Company, Chicago (1927- 32). Physical conditions like lighting, working conditions, length of work period, effect the output of workers. When these conditions were altered, production continued to increase. Interpretation : Close-nit social conditions among workers caused them to group together and produce output even in adverse conditions.
  14. 14. MAYO’S EXPERIMENTS  Illumination Studies - 1924- 1927  Relay Assembly Test Experiments - 1927-1929  Relay Assembly Room #2 - 1928- 1929  Mica Splitting Test Group - 1928- 1931  Plant Interview Program - 1925- 1932  Bank Wiring Observation Group - 1931-1932
  15. 15. MARY PARKER FOLLET & CHESTERBARNARD MPF -1868-1933 CB- 1938 They stressed the importance of group working which is superior to individual working. Concepts like participation cooperation, communication, coordination, authority sharing were supported by them
  16. 16. DOUGLAS MCGREGOR 1960 Proposed assumptions about people in general namely theory ’X’ and Theory ‘Y’. Theory X  People do not like work and try to avoid it  So managers control, coerce and threaten.  People prefer to be directed, avoid responsibility, wants security and have little ambition
  17. 17.  Theory Y  People do not naturally dislike work ( work is natural part of life)  Internally motivated to reach objectives committed  Committed to goals to the degree that they receive personal rewards  Seek and accept responsibility under favorable conditions  Have capacity to be innovative in problem solving  People are bright , but under most conditions their potential is underutilized.
  18. 18. THEORY J AND THEORY Z ? I think you need to learn on your own Who is William Ouchi?.
  19. 19. SYSTEM SCHOOL OF MANAGEMENT THOUGHT Originator : Not clearly known Emphasis : People, Structure, Technology and environment as interacting elements which comprise an organization Achievements: 1.Management considers all the four variables as a cohesive whole and not as separate items. 2.Drawn attention to importance of planning which is vital for successful performance in organization 3.Achievement of plan depends on monitoring actual result against planned results and correcting any deviations
  20. 20. SYSTEMS THEORY Key concepts Organization is viewed as a managed system Management must interact with the environment Organizational goals must address effectiveness and efficiency Organizations contain a series of subsystems There are many avenues to the same outcome Synergies enable the whole to be more than the sum of the parts Contributions - Unknown Recognized the importance of the relationship between the organization and the environment Limitations Does not provide specific guidance on the functions of managers
  21. 21. CONTINGENCY SCHOOL Contributors : J.Woodward (1965), Thompson (1967), Lorsch & Lawence (1970). Emphasis : Management style and organization structure should reflect and change with the chancing environment the company finds itself in.  There is no one best way of management  The most appropriate method of management will change overtime as circumstances of org.change.  Factors like size and technology influence organization structure.
  22. 22. Managers have always asked questions such as “ What is the right thing to do? Should we have a mechanistic or an organic structure? A functional or divisional structure? Wide or narrow spans of management? Tall or flat organizational structures? Simple or complex control and coordination mechanisms? Should we be centralized or decentralized? Should we use task or people oriented leadership styles? What motivational approaches and incentive programs should we use?"
  23. 23. Mechanistic OrganicIndividual specialization: Joint Specialization: Employees work separately Employees work together and and specialize in one task coordinate tasks Complex integrating mechanisms:Simple integrating mechanisms: task forces and teams are primary Hierarchy of authority well-defined integrating mechanismsCentralization: Decentralization: Decision-making kept as high as Authority to control tasks is delegated. possible. Most communication lateral Most communication is vertical.Standardization: Mutual Adjustment: Extensive use made of rules & Face-to-face contact for coordination. Standard Work process tends to be Operating Procedures unpredictableMuch written communication Much verbal communicationInformal status in org based on size of Informal status based on perceived empire brilliance Organization is network of persons orOrganization is a network of positions, teams. People work in different corresponding to tasks. Typically each capacities person corresponds to one task simultaneously and over time
  24. 24.  J.Woodward (1965)  Supported from her research found that technology effects on organizational structure Thompson (1967)  Long linked – production lines, differential departmentation  Mediating – the customer groups, like financial agencies, borrowers, advertising agencies  Intensive – involves application of a variety of technologies to the solution of problems in organization (ex. Space programme agencies, ICUs) ,
  25. 25.  Lorsch & Lawence (1970).  Relation between organization and environment and successful organization continue to structure according to environmental demands  Formality of structure  Goal orientation (market targets, not goals)  Term (short and long)  IPR
  26. 26. CONTINGENCYPERSPECTIVE Key concepts Situational contingencies influence the strategies, structures, and processes that result in high performance There is more than one way to reach a goal Managers may adapt their organizations to the situation Contributions Identified major contingencies Argued against universal principles of management Limitations Not all important contingencies have been identified Theory may not be applicable to all managerial issues
  27. 27.  economies of scale - reductions in the average cost of a unit production as the total volume produced increases