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  • 1. Evolution of ManagementEvolution of Management ThoughtThought
  • 2. OrganizationOrganization A structured social system consisting ofA structured social system consisting of groups of individuals working together togroups of individuals working together to meet some agreed-on objectivesmeet some agreed-on objectives
  • 3. Early PracticesEarly Practices Adam SmithAdam Smith Scottish philosopher Wrote ‘Causes of Wealth of Nations’ Proposed ‘Division of Labour’
  • 4. Job specializationJob specialization  Adam Smith, 18th century economist, found firmsAdam Smith, 18th century economist, found firms manufactured pins in two ways:manufactured pins in two ways:  CraftCraft -- each worker did all steps.-- each worker did all steps.  FactoryFactory -- each worker specialized in one step.-- each worker specialized in one step.  Smith found that the factory method had much higherSmith found that the factory method had much higher productivity.productivity.  Each worker became very skilled at one, specific task.Each worker became very skilled at one, specific task.  Breaking down the total job allowed for the division ofBreaking down the total job allowed for the division of labor.labor.
  • 5. Charles BabbageCharles Babbage British Mathematics professor Wrote ‘On the Economy of Machinery and Manufactures’ Proposed advantages of division of labour: •Reduces the time needed for learning a job •Reduces waste of material •Attainment of high skill levels •Matching skills and abilities with jobs
  • 6. Robert OwenRobert Owen Welsh entrepreneur Recognised how factory work was demeaning to employees
  • 7. The Classical EraThe Classical Era Scientific Management-Scientific Management- Frederick TaylorFrederick Taylor  Develop a science for each element of anDevelop a science for each element of an individual’s workindividual’s work  Scientifically select, train, teach and developScientifically select, train, teach and develop workerworker  Cooperation with workersCooperation with workers  Divide work responsibility equally betweenDivide work responsibility equally between management and workersmanagement and workers
  • 8. GilbrethsGilbreths  Frank and Lillian Gilbreth refined Taylor’sFrank and Lillian Gilbreth refined Taylor’s methods.methods. Made many improvements to time and motionMade many improvements to time and motion studies.studies.  Time and motion studies:Time and motion studies: 1.1. Break down each actionBreak down each action intointo components.components. 2.2. Find better waysFind better ways to perform it.to perform it. 3.3. Reorganize each actionReorganize each action to be moreto be more efficient.efficient.  Gilbreths also studied fatigue problems, lighting,Gilbreths also studied fatigue problems, lighting, heating and other worker issues.heating and other worker issues.
  • 9. Hawthorne studiesHawthorne studies - Study conducted in Hawthorne plant of- Study conducted in Hawthorne plant of General Electric Company, ChicagoGeneral Electric Company, Chicago -- Mayo, Roethlisberger, Dickson, WhiteheadMayo, Roethlisberger, Dickson, Whitehead Illumination experiment (1924-27)Illumination experiment (1924-27) Relay room experiment (1927-28)Relay room experiment (1927-28) Mass interviewing (1928-30)Mass interviewing (1928-30) Bank wiring observation (1931-32)Bank wiring observation (1931-32)
  • 10. Implications of HawthorneImplications of Hawthorne ExperimentExperiment Social factors in outputSocial factors in output Group InfluenceGroup Influence ConflictsConflicts LeadershipLeadership SupervisionSupervision CommunicationCommunication
  • 11. Classical Organization TheoryClassical Organization Theory Administrative TheoryAdministrative Theory French industrialist Henry FayolFrench industrialist Henry Fayol Proposed that a manager plans,Proposed that a manager plans, organizes, directs, controls andorganizes, directs, controls and coordinatescoordinates 14 principles of management including14 principles of management including division of labor, authority, scalar chain,division of labor, authority, scalar chain, unity of command, initiativeunity of command, initiative
  • 12. Fayol’s 14 principlesFayol’s 14 principles 1.1. Division of workDivision of work 2.2. AuthorityAuthority 3.3. DisciplineDiscipline 4.4. Unity of commandUnity of command 5.5. Unity of directionUnity of direction 6.6. Subordination of individual interest to the generalSubordination of individual interest to the general interestinterest 7.7. RemunerationRemuneration
  • 13. Fayol’s 14 principlesFayol’s 14 principles 8.8. CentralizationCentralization 9.9. Scalar chainScalar chain 10.10. OrderOrder 11.11. EquityEquity 12.12. Stability and tenureStability and tenure 13.13. InitiativeInitiative 14.14. Esprit de corpsEsprit de corps
  • 14. Max WeberMax Weber Proposed Structural TheoryProposed Structural Theory DescribedDescribed bureaucraticbureaucratic structurestructure • Division of laborDivision of labor • clearly defined hierarchy,clearly defined hierarchy, • detailed rules anddetailed rules and regulations andregulations and • impersonal relationshipsimpersonal relationships
  • 15. Formal rules regulationsFormal rules regulations Division of laborDivision of labor Hierarchical structureHierarchical structure Authority structureAuthority structure Lifelong commitmentLifelong commitment
  • 16. Social Man TheorySocial Man Theory Mary Parker Follett Emphasised on group ethics Manager must coordinate group efforts
  • 17. Chester BarnardChester Barnard Social Systems Theory Organisations made up of people who have interacting social relationship They communicate Success depends on maintaining good relations
  • 18. Herbert Simon  Described organisations as a complex network of decisional process  Decision process comprises: i) intelligent activity ii) design activity iii) choice activity  Bounded rationality  Administrative man : simplification, satisficing approach  Orgaisational Communication
  • 19. Peter Drucker Nature of management as innovative and creative Manager has to act as administrator, entrepreneur, set objectives etc. Organisation structure to facilitate effective functioning MBO
  • 20. Functional ManagementFunctional Management Structuring of an organization intoStructuring of an organization into departments or units on the basis of typedepartments or units on the basis of type of work performedof work performed AA functional managerfunctional manager is a person who hasis a person who has management authority over anmanagement authority over an organizational unit - such as a departmentorganizational unit - such as a department - within a business or company- within a business or company
  • 21. Management StylesManagement Styles AuthoritativeAuthoritative ParticipativeParticipative Free-reinFree-rein Pseudo autocraticPseudo autocratic
  • 22. New forms of organizationNew forms of organization Leaner organizationsLeaner organizations OutsourcingOutsourcing Contingent workforceContingent workforce
  • 23. Virtual corporationsVirtual corporations Highly flexible, temporary organizationsHighly flexible, temporary organizations formed by a group of companies to exploitformed by a group of companies to exploit a specific opportunitya specific opportunity
  • 24. Socio-technical approachSocio-technical approach Management scienceManagement science Human relations approachHuman relations approach Systems approachSystems approach Contingency approachContingency approach
  • 25. Systems approachSystems approach  Considers relationships inside and outsideConsiders relationships inside and outside the organization.the organization.  The environment consists of forces, conditions,The environment consists of forces, conditions, and influences outside the organization.and influences outside the organization.  Systems theory considers the impact ofSystems theory considers the impact of stages:stages: Input:Input: acquire external resources.acquire external resources. Conversion:Conversion: inputs are processed into goods andinputs are processed into goods and services.services. Output:Output: finished goods are released into thefinished goods are released into the environment.environment.
  • 26. Systems approachSystems approach An open system interacts with theAn open system interacts with the environment. A closed system isenvironment. A closed system is self-contained.self-contained.
  • 27. Management ScienceManagement Science  Uses rigorous quantitative techniques toUses rigorous quantitative techniques to maximize resources.maximize resources. Quantitative management:Quantitative management: utilizes linearutilizes linear programming, modeling, simulation systems.programming, modeling, simulation systems. Operations management:Operations management: techniques to analyze alltechniques to analyze all aspects of the production system.aspects of the production system. Total Quality Management (TQM):Total Quality Management (TQM): focuses onfocuses on improved quality.improved quality. Management Information Systems (MIS):Management Information Systems (MIS): provides information about the organization.provides information about the organization.
  • 28. Contingency TheoryContingency Theory  Assumes there is no one best way toAssumes there is no one best way to managemanage  The environment impacts the organization andThe environment impacts the organization and managers must be flexible to react tomanagers must be flexible to react to environmental changes.environmental changes.  The way the organization is designed, controlThe way the organization is designed, control systems selected, depend on the environment.systems selected, depend on the environment.  Technological environments change rapidly,Technological environments change rapidly, so must managers.so must managers.