Welcome to our presentation about the evolution of management theories

This cartoon made in 1948 was sponsored by the A. P. Sloan Foundation

Few workmen Very Skilled and qualified Customized cars Workman : Director Manufacturer Salesman

Few workmen

Very Skilled and qualified

Customized cars

Workman :

Director

Manufacturer

Salesman

Disadvantages Manufacturing costs extremely high Maintenance and repair costs very high No Research and Development

Disadvantages

Manufacturing costs extremely high

Maintenance and repair costs very high

No Research and Development

Henri Fayol (1841-1925) One of the most influential contributors to modern concepts of management Father of modern operational management theory General and Industrial Management (1916)

One of the most influential contributors to modern concepts of management

Father of modern operational management theory

General and Industrial Management (1916)

Biography Educated at “Ecole des Mines” in St. Etienne Almost 60 years of experience as an engineer and Director at “Houilleres de Commentry” 1916: Publication of “General and Industrial Management”

Educated at “Ecole des Mines” in St. Etienne

Almost 60 years of experience as an engineer and Director at “Houilleres de Commentry”

1916: Publication of “General and Industrial Management”

Theory Fayol’s theory holds that there are five primary functions of management: (1) Planning: (2) Organizing: (3) Commanding: (4) Coordinating: (5) Controlling:

Fayol’s theory holds that there are five primary functions of management:

(1) Planning:

(2) Organizing:

(3) Commanding:

(4) Coordinating:

(5) Controlling:

Theory Modern management theories (e.g. Richard Daft) have reduced the five functions to four: (1) Planning (2) Organizing (3) Leading (4) Controlling

Modern management theories (e.g. Richard Daft) have reduced the five functions to four:

(1) Planning

(2) Organizing

(3) Leading

(4) Controlling

The Classical School of Management

Taylorism Taylor : a Quaker! Principles 1: Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. « the natural instinct and tendency of men is to take it easy » F.W.TAYLOR Principle 2 Scientifically select, train, and develop each employee rather than passively leaving them to train themselves. « they sould...do what they are told to do promptly and without asking questions or making suggestions » F.W. TAYLOR

Taylor : a Quaker!

Principles 1:

Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.

« the natural instinct and tendency of men is to take it easy » F.W.TAYLOR

Principle 2

Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.

« they sould...do what they are told to do promptly and without asking questions or making suggestions » F.W. TAYLOR

Taylorism Principle 3 Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task". Principle 4 Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks. « The Work of every workman is fully planned out by the management , each man receive complete written instructions ,... This task specifies not only what is to be done but also how it is to be done and the exact time allowed for doing it » F.W. TAYLOR

Principle 3

Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task".

Principle 4

Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

« The Work of every workman is fully planned out by the management , each man receive complete written instructions ,... This task specifies not only what is to be done but also how it is to be done and the exact time allowed for doing it » F.W. TAYLOR

Henry Ford (1863-1947) Father of modern assembly lines Mass production Model T automobile Prolific inventor (161 U.S. patents)

Father of modern assembly lines

Mass production

Model T automobile

Prolific inventor (161 U.S. patents)

Philosophy of Fordism Widespread prosperity and rise corporate profits How ? High wages allow the workers to purchase the output they produce. The idea : Convert workers into customers

Widespread prosperity and rise corporate profits

How ?

High wages allow the workers to purchase the output they produce.

The idea :

Convert workers into customers

Division of labor Distinctive division of labor allows complex tasks to be divided into several simple and repetitive one. Skilled labor is no more needed in the production.

Distinctive division of labor allows complex tasks to be divided into several simple and repetitive one.

Skilled labor is no more needed in the production.

Standardisation -Major issue of custom made cars : Each producers have their own parts and components. (even not the same metric system) -Ford invented a process to directly shape parts out of a quenched steel block. - Hand-made steel parts have to be recalibrate after beeing quenched.

-Major issue of custom made cars : Each producers have their own parts and components. (even not the same metric system)

-Ford invented a process to directly shape parts out of a quenched steel block.

- Hand-made steel parts have to be recalibrate after beeing quenched.

Optimize the working space Typically similar machinery are installed one next to another. Ford rearrange them into the correct sequence to follow the production patern. Various parts of the production process are linked together by a moving conveyor belt : "Bring the work to the workers."

Typically similar machinery are installed one next to another.

Ford rearrange them into the correct sequence to follow the production patern.

Various parts of the production process are linked together by a moving conveyor belt : "Bring the work to the workers."

Disadvantages Advantages

A pure product of the MIT… Graduated in electrical engineering in 1895, at 20 Member of ΔΥ fraternity Founded in 1950 the School of Industrial Management Alfred P. Sloan (1875-1966)

A pure product of the MIT…

Graduated in electrical engineering

in 1895, at 20

Member of ΔΥ fraternity

Founded in 1950 the School

of Industrial Management

… & A selfmade man, 1937-1956 1923-1946 1918 1916 1899 1895

Sloan’s Management approach

Establishing annual styling changes Impeding alternative transports to car Pricing discrimination Market segmentation Sloan’s Marketing approach planned obsolescence monopolysing

Establishing annual styling changes

Impeding alternative transports to car

Pricing discrimination

Market segmentation

Sloan’s pricing discrimination Quantity Price / Quality Supplyer Consumer Mkt $!

15 Brands #1 Manufacturer for 76 Years 1930-2006 The 25 Millionth car in 1945 The 50 Millionth car in 1955 The 75 Millionth car in 1962 The 100 Millionth car in 1967 #2 Manufacturer in 2007 after

Toyota Production System A production system was developed between 1948 and 1975 for Toyota Motor company by: Taiichi Ohno, Shigeo Shingo Eiji Toyoda

A production system was developed between 1948 and 1975 for Toyota Motor company by:

Taiichi Ohno,

Shigeo Shingo

Eiji Toyoda

Difficulties for the company : Small market with high competition Poor consumers

Difficulties for the company :

Small market with high competition

Poor consumers

Aim Eliminate all muni, mura, muda (overburden, inconsistency , waste) from the operation to stay competitive.

Eliminate all muni, mura, muda (overburden, inconsistency , waste) from the operation to stay competitive.

Toyota Production System House

Just in time production Created by the founder of Toyota : Sakichi Toyoda, his son Kiichiro Toyoda and the engineer Taiichi Ohno. Based on the 7 wastes: over-production motion (of operator or machine) waiting (of operator or machine) conveyance processing itself inventory (raw material) correction (rework and scrap)

Created by the founder of Toyota : Sakichi Toyoda, his son Kiichiro Toyoda and the engineer Taiichi Ohno.

Based on the 7 wastes:

over-production

motion (of operator or machine)

waiting (of operator or machine)

conveyance

processing itself

inventory (raw material)

correction (rework and scrap)

Jidoka TPS emphasizes the participation of all employees. Toyota organized their workers by forming teams Each team has a leader who also works on the line Teams are responsible for : Training to do many specialized tasks. Housekeeping and minor equipment repair.

TPS emphasizes the participation of all employees.

Toyota organized their workers by forming teams

Each team has a leader who also works on the line

Teams are responsible for :

Training to do many specialized tasks.

Housekeeping and minor equipment repair.

Product defects must be discovered as soon as possible. Workers are responsible for the discover of defects. Workers are able to stop the entire line by pulling a cord (Jidoka). Workers are controlling machine’s work. Jidoka

Product defects must be discovered as soon as possible.

Workers are responsible for the discover of defects.

Workers are able to stop the entire line by pulling a cord (Jidoka).

Workers are controlling machine’s work.

Global Warming Financial crisis Energy crisis Unemployment …

Global Warming

Financial crisis

Energy crisis

Unemployment

…