Chapter 2 perspectives in management


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Chapter 2 perspectives in management

  1. 1. Chapter 2 Perspectives in Management ByAbhyuday Shah. 12/21/13 1
  2. 2. Management in Antiquity D Greeks C Babylonians G Venetians B Egyptians E Romans A Sumerians 3000 B.C. 2500 B.C. F Chinese 2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D.500 A.D.1000 A.D.1500 A Used written rules and regulations for governance E Used organized structure for communication and control B Used management practices to construct pyramids F Used extensive organization structure for government agencies and the arts C Used extensive set of laws and policies for governance G Used organization design and planning concepts to D Used different governing systems for cities and state 12/21/13 control the seas 1–2
  3. 3. Early Management Pioneers • Adam Smith – A renowned economist – Writer of the book – Wealth of Nations (1776) – Division of work for economic advantage – Increasing individual worker’s skill and dexterity 12/21/13 1–3
  4. 4. Early Management Pioneers • Robert Owen (1771–1858) –British industrialist who was one of the first managers to recognize the importance of human resources and the welfare of workers. 12/21/13 1–4
  5. 5. Early Management Pioneers • Charles Babbage (1792–1871) –English mathematician who focused on creating efficiencies of production through the division of labor, and the application of mathematics to management problems. 12/21/13 5
  6. 6. An Integrative Framework of Management Perspectives Systems Approach • Recognition of internal interdependencies • Recognition of environmental influences Classical Management Perspectives Methods for enhancing efficiency and facilitating planning, organizing, and controlling Contingency Perspective • Recognition of the situational nature of management • Response to particular characteristics of situation Behavioral Management Perspectives Insights for motivating performance and understanding individual behavior, groups and teams, and leadership Quantitative Management Perspectives Techniques for improving decision making, resource allocation, and operations Effective and efficient management 12/21/13 6
  7. 7. Approaches to Management theories: • Different approaches to management theories evolved • can be classified as: 1. Classical Theory a. Scientific management theory b. Administrative management theory 2. Behavioral Science Theory 3. Management Science Theory 4. Decision Theory 5. Systems Theory 6. Contingency Theory 12/21/13 7
  8. 8. 1. Classical Theory: • emerged in the early year of the twentieth century to increase efficiency and productivity due to evolution of large scale business. • constitutes the discipline & process of management in an organization. • also referred to as the traditional theory, • includes two different approaches i. scientific management ii. administrative management A. Scientific Management Theory: • developed to increase productivity through labor efficiency in the early 20th century. 12/21/13 8
  9. 9. 1. Classical Theory (contd.) : A. Scientific Management Theory (contd.) : • prominent contributors of scientific management theory were Frederick W. Taylor, Frank & Lillian Gilbert and Henry Gantt. • F.W. Taylor was the greatest contributor and played the dominant role. F.W.Taylor’s Scientific Management Theory: • F.W Taylor known as the “Father of Scientific Management”. • worked at the Midvale steel company, Philadelphia and Bethlehem Steel company, Pennsylvania. 12/21/13 9
  10. 10. 1. Classical Theory (contd.) : A. Scientific Management Theory (contd.) : F.W.Taylor’s Scientific Management Theory (contd.) : • Observed (in these companies) that production & pay were poor, inefficiency existed, wastage was high, workers put into job without matching their abilities and the workers used different techniques to perform the same work. • realized that work efficiency was low due to lack of order and system • This led him to come out with “The principle of scientific management” in 1911 A.D. in which the explained the principles of scientific management. • emphasized one best method of doing work to increase efficiency & productivity. 12/21/13 10
  11. 11. A. Scientific Management Theory (contd.) : F.W.Taylor’s Scientific Management Theory (contd.) Taylor’s Principles: concluded his studies by laying down certain principles : Standardization • referring to the speed & rate at which work should be done • Using standard & right equipments and tools for the jobs. • development of true science of doing work by studying the nature of work and replacing rule of thumb. Time and task study: • required to determine one best method of doing work. Systematic selection & Training: • scientific selection of employees and providing proper training and developing them to undertake the task assigned • not letting workers choose the work but rather placing 12/21/13 11
  12. 12. A. Scientific Management Theory (contd.) : F. W.Taylor’s Scientific Management Theory (contd.) Taylor’s Principles (contd.) : Systematic selection & Training (contd.) : right person on the right job. Pay Incentives: • referring to the increment in the payroll in accordance with the amount of work done in order to increase productivity. ( paid according to piece produced) • employees motivated by economic incentives • greater pay for greater output and vice versa Cooperation between managers and operatives: • referring to harmony between the employer and employee to accomplish work by dividing the work scientifically and systematically. • managers involved in planning the work, determining the working procedure, time of doing work etc & supervising 12/21/13 12
  13. 13. A. Scientific Management Theory (contd.) : F.W. Taylor’s Scientific Management Theory (contd.) Taylor’s Principles (contd.) : Cooperation between managers and operatives (contd.): the employees • employees executing the plans as per the instructions • a mental revolution to be created by establishing understanding between employer and employees Taylor’s Followers: 1. Henry Gantt • One of the followers of F.W. Taylor • a mechanical engineer who worked as a close associate of Taylor at the Midvale steel company. 12/21/13 13
  14. 14. Scientific Management Theory (contd.) : Taylor’s Followers (contd.): 1. Henry Gantt • replaced Taylor’s differential piece rate system by combining a guaranteed day rate (minimum wage) with an above standard bonus. • however, known for originating a Graphic chart (Gantt Chart) as a scheduling device for planning & controlling work & this is his contribution to scientific management. • emphasized on the recognition of human factor and service rather than profits. 2.Frank and Lillian Gilbert • A team of husband and wife • Frank a construction contractor and Lillian a psychologist who too followed Taylor’s footsteps. 12/21/13 14
  15. 15. Scientific Management Theory (contd.) : Taylor’s Followers (contd.): 2.Frank and Lillian Gilbert • used motion pictures to study hand and body motion by use of micro chronometer that recorded the time to determine the time spent on motion in doing a task. • conducted motion and fatigue study with the (help of) brick layering experiment • suggested economical motion (decrease unnecessary motions) to upgrade performance of each individual. • Developed performance efficiency techniques (scientific training, selection & development) • Improved working conditions by redesigning various machines & tools to fit people thereby reducing fatigue. 12/21/13 15
  16. 16. Scientific Management Theory (contd.) : Contributions: developed performance efficiency techniques ( like scientific training, selection, development etc.) improved working conditions by redesigning various machines and tools to fit people for efficiency of work emphasized over specialization and standardization for smooth flow of work Limitations • viewed worker as undimensional beings interested in more money and motivated them i.e. Men were considered as machine. • Assumed that environment of organizations were predictable, stable & simple which is not realistic. • focuses on production, ignoring other sectors of management • no one best way of doing work 12/21/13 16
  17. 17. 2. Administrative Management Theory • also referred to as the universalist or functional approach • focuses on the management of total organizations effectively; especially larger organizations • assumes that management process remains the same across all organizations • Prominent administrative theorists are Henri Fayol and Max Weber Henri Fayol • A French engineer, an industrialist as well as a successful administrator in a French mining company • Published a book in 1916 A.D. that was translated into English in 1929, entitled “General and Industrial Administration” • conceptualizes management functions & principles for the successful management of all types of organizations 12/21/13 17
  18. 18. B. Administrative Management Theory i. Henri Fayol (Contd.) • believed that a manager's job could be divided into five functions planning organizing commanding essential for managerial success coordinating controlling • also stated a series of principles of management to guide managers resolve problems in a particular situation and carry out their functional duties. Functions of Management • Emphasized that all managers must perform functions as 12/21/13 18
  19. 19. B. Administrative Management Theory i. Henri Fayol (Contd.) Functions of Management 1. Planning Managers forecasting the events and developing an operating plan to guide future decisions 2. Organizing Determining appropriate combination of resources (machine, material and human) to accomplish task. 3. Commanding Directing the activities of subordinates through two-way communication 4. Coordinating Arranging and integrating group efforts towards unity of action 5. Controlling Ensuring actual activities are according to the plan set 12/21/13 19
  20. 20. B. Administrative Management Theory (contd.) i. Henri Fayol (Contd.) • activities to be accomplished in industrial organizations: 1. Technical: activities concerned with production. 2. Commercial: activities like buying,selling and exchange functions. 3. Financial: obtaining capital and optimum utilization of capital 4. Security: protection of persons and property. 5. Accounting: financial transactions recording. 6. Managerial: activities of management like planning, organizing, commanding and controlling 12/21/13 20
  21. 21. B. Administrative Management Theory (contd.) i. Henri Fayol (Contd.) Principles of Management 1. Division of work • specialization to increase output. 2. Authority • the right flowing from responsibility. 3. Discipline • follow rules and regulations (being obedient). 4. Unity of command • report and receive orders from only one superior. 5. Unity of direction • similar activities grouped under one plan and directed by one superior. • efforts focused and coordinated in same direction 12/21/13 21
  22. 22. B. Administrative Management Theory (contd.) i. Henri Fayol (Contd.) Principles of Management 6. Subordination of individual interests to the general interest • organizational interest must be given priority over individual interest. 7. Remuneration • fair wage service to the employees (performance based) 8. Centralization • the final decision making power retained by the top level • maintaining balance between centralization and decentralization. 9. Scalar chain • flow of work authority and communication in a chain from top to bottom. 12/21/13 22
  23. 23. B. Administrative Management Theory (contd.) i. Henri Fayol (Contd.) Principles of Management 10. Order • resources kept in right place. 11. Equity • just and fair towards subordinates. • leads to devotion and loyal service 12. Stability of staffs • reducing high absenteeism and turnover of staffs.( as people need time to learn their jobs) 13. Initiative • employees taking initiative and being creative. 14. Esprit de corps • harmonious relation and promote team spirit 12/21/13 23
  24. 24. B. Administrative Management Theory (contd.) i. Henri Fayol (Contd.) Conclusion • argued management as a continuous process beginning with planning and ending with controlling • a framework for analyzing management process • theory is useful as it specifies what managers should do [but not why & how] • Fayol's concept is a skeleton that is to be fleshed out with concepts, techniques and situational refinements ii. Max Weber • A German sociologist who developed a theory of authority structure, the ideal model for management i.e. the bureaucracy approach 12/21/13 24
  25. 25. B. Administrative Management Theory (contd.) ii. Max Weber • Bureaucracy is efficient and effective way of – – – – division of labor, hierarchy of authority, framework of rules and regulations and impersonality • Recommended bureaucratic organization model for doing work in groups for large organization • however recognized that it didn't exist in reality 12/21/13 25
  26. 26. Max Weber’s Theory 12/21/13 26
  27. 27. B. Administrative Management Theory (contd.) ii. Max Weber Conclusion • Every systematically managed organization regardless of its size and purpose has to some extent a moderate degree of bureaucracy to enhance organizational efficiency • However, taken too very high bureaucracy can hinder efficiency far can hinder the efficiency • The bureaucratic system, however, is a very rigid system to be followed in practice 12/21/13 27
  28. 28. B. Administrative Management Theory (contd.) Contributions  Foundation for the development of other management theories  Identified important management aspects as a frame of reference and basis of management in organization Limitations  Prescribed universal procedures to be applied in organization ignoring the situation, complexity and environment in which organization operate  Ignored the human element in the organization and viewed them as tools. 12/21/13 28
  29. 29. Behavioral Perspective • Hawthorne Studies • Human Relations Movement • Emergence of Organizational Behavior 12/21/13 29
  30. 30. Behavioral Management Perspective • Behavioral Management – Emphasized individual attitudes and behaviors, and group processes, and recognized the importance of behavioral processes in the workplace. • Hugo Munsterberg (1863–1916) – A German psychologist, considered the father of industrial psychology, who advocated the practice of applying psychological concepts to employees selection and motivation industrial settings. • Mary Parker Follett (1868 –1933) – Recognized the importance of the role of human behavior in the workplace. 12/21/13 30
  31. 31. 2. Behavioral Science Theory (contd.) A. Human Relations Approach (contd.) The Hawthorne Studies (contd.)  Illumination Programme  Experiment carried out to study the relationship between the intensity of light and productivity over a selected group of employees  result showed illumination did not affect output  Relay Assembly Room Programme  Manipulation of physical surroundings to study the effect on productivity  working conditions changed to observe its effect on productivity  concluded that team feeling, recognition and social settings important for higher productivity 12/21/13 31
  32. 32. 2. Behavioral Science Theory (contd.) A. Human Relations Approach (contd.) The Hawthorne Studies (contd.)  Mass Interviewing Programme  20,000 workers interviewed to find out factors responsible for human behavior at work  social relations and interrelationship among employees influenced the group to enhance performance  Bank Wiring Observation Room Programme  to find out the functioning of small groups over individuals  importance of informal group highlighted that set their norms and protect the employees or workers 12/21/13 32
  33. 33. The Hawthorne Studies (1927–1932) • Conducted by Elton Mayo and associates at Western Electric – Illumination study—workplace lighting adjustments affected both the control and the experimental groups of production employees. – Group study—implementation of piecework incentive plan caused production workers to establish informal levels of acceptable individual output. • Over-producing workers were labeled “rate busters” and underproducing workers were considered “chiselers.” – Interview program—confirmed the importance of human behavior in the workplace. – Bank Wiring Observation Room Program 14 workers were formed into a work group and observed for seven months 12/21/13 33
  34. 34. 2. Behavioral Science Theory (contd.) A. Human Relations Approach (contd.) The Hawthorne Studies’ conclusion: • Productivity was much affected by the attitudes of the worker (Relationship between members of a work group and between members and their supervisors) rather than working condition and incentive plan (like hours of work, wage incentives, etc.) • the informal work group formed at the work places, determined the worker behavior by setting the group norms, standard worker output, hierarchy of member, creating group security and group sentiments, thereby exercising strong control over the behavior of the workers • emphasized more on humanistic and realistic view of social man from economic man • Group or social factors played a dominant and significant role in the functioning of the organization in achieving their goals, since it provided the members the feeling of acceptance and dignity and satisfied employees 12/21/13 34
  35. 35. Behavioral Management Perspective (cont’d) • Human Relations Movement – Grew out of the Hawthorne studies. – Proposed that workers respond primarily to the social context of work, including social conditioning, group norms, and interpersonal dynamics. – Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance. 12/21/13 35
  36. 36. The Human Relations View of Management 12/21/13 Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permissions. 36
  37. 37. Behavioral Management Perspective (cont’d) • Abraham Maslow – Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy. • Douglas McGregor – Proposed Theory X and Theory Y concepts of managerial beliefs about people and work. 12/21/13 37
  38. 38. Need Hierarchy Theory • Unlimited needs – when one need is fulfilled, another arises • Unfulfilled needs creates anxiety which leads to motivation • Needs arise in order – Classification of needs: 12/21/13 38
  39. 39. Classification of Needs: Desire to become what one is capable of Self respect, autonomy, etc. Affection, acceptance, friendship Physical, financial, psychological Food, shelter, clothing, sex, maternal need. 12/21/13 39
  40. 40. Theory X and Theory Y • Developed by Douglas McGregor • Theory X Assumptions – People do not like work and try to avoid it. – People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals. – People prefer to be directed, to avoid responsibility, and to want security; they have little ambition. Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. 12/21/13 40
  41. 41. Theory X and Theory Y (cont’d) • Theory Y Assumptions – People do not dislike work; work is a natural part of their lives. – People are internally motivated to reach objectives to which they are committed. – People are committed to goals to the degree that they receive rewards when they reach their objectives. – People seek both seek responsibility and accept responsibility under favorable conditions. – People can be innovative in solving problems. – People are bright, but under most organizational conditions their potentials are underutilized. 12/21/13 41
  42. 42. Two Factor Theory • Developed by – Frederick Herzberg for work motivation. • Hygiene Factors = Dissatisfaction vs no Dissatisfaction • Motivation Factors = No satisfaction vs Satisfaction 12/21/13 42
  43. 43. Organizational Behavior • A contemporary field focusing on behavioral perspectives on management. – Draws on psychology, sociology, anthropology, economics, and medicine. • Important topics in organizational behavior research: – – – – – 12/21/13 Job satisfaction and job stress Motivation and leadership Group dynamics and organizational politics Interpersonal conflict The structure and design of organizations 43
  44. 44. Behavioral Management Perspective…Today • Contributions – Provided important insights into motivation, group dynamics, and other interpersonal processes. – Focused managerial attention on these critical processes. – Challenged the view that employees are tools and furthered the belief that employees are valuable resources. 12/21/13 44
  45. 45. Behavioral Management Perspective…Today (cont’d) • Limitations – Complexity of individuals makes behavior difficult to predict. – Many concepts not put to use because managers are reluctant to adopt them. – Contemporary research findings are not often communicated to practicing managers in an understandable form. 12/21/13 45
  46. 46. Quantitative Perspectives Management Science Operations Management
  47. 47. Quantitative Perspectives • Developed during World War II • Mathematicians, Physicists, and Other Scientists helped in war techniques • Quantitative approach to management involves use of quantitative techniques like: – Statistics – Information models – Computer simulations etc. 12/21/13 Quantative and Integrating Perspective 47
  48. 48. Management Science • Primarily concerned with decision making. • Emphasis on application of mathematics and statistics for decision making and problem solving. Techniques of Management Science: • Linear Programming • Game Theory • Sampling Theory • Probability Theory • Simulation etc. 12/21/13 Quantative and Integrating Perspective 48
  49. 49. Operations Management Theory • Concerned with managing the process of converting the inputs (raw-materials) into outputs (finished products) • Concerned with quality, customer service and competition. Techniques of Operations Management: • Quality Control • Total Quality Management • Just In Time Technique • Six sigma etc. 12/21/13 Quantative and Integrating Perspective 49
  50. 50. Quantitative Management Perspective • Contributions – Developed sophisticated quantitative techniques to assist in decision making. – Application of models has increased our awareness and understanding of complex processes and situations. – Has been useful in the planning and controlling processes. 12/21/13 Quantative and Integrating Perspective 50
  51. 51. Quantitative Management Perspective • Limitations – Quantitative management cannot fully explain or predict the behavior of people in organizations. – Mathematical sophistication may come at the expense of other managerial skills. – Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability. 12/21/13 Quantative and Integrating Perspective 51
  52. 52. Integrating Perspectives • Systems Perspective • Contingency Perspective 12/21/13 Quantative and Integrating Perspective 52
  53. 53. System Perspective (Theory) • A system is a set of inter-related and interdependent parts, arranged in such a way that produces a unified whole. Feedback of System 12/21/13 Quantative and Integrating Perspective 53
  54. 54. Elements of Systems Theory • • • • • • • Goal Orientation Subsystem Synergy System boundary Flow Feedback Open or closed 12/21/13 Quantative and Integrating Perspective 54
  55. 55. Contributions and Limitations • Contributions of system theory: – Provides conceptual framework for meaningful analysis and management of an organization – Emphasis on interrelations- interdependence – Helps in problem solving – It integrates various management theories by emphasizing on physical aspect, behavioral aspect, and environmental aspect 12/21/13 Quantative and Integrating Perspective 55
  56. 56. Limitations of Systems Theory • Too abstract and difficult to apply • Does not offer tools and techniques • It does not offer unified body of knowledge. 12/21/13 Quantative and Integrating Perspective 56
  57. 57. Contingency Perspective (Theory) • The theory focuses on situational factors. • Main logic behind the theory: – There is no one best method in all different situations • The best method to solve a problem varies according to situation. • Every organization is unique. • There are four contingency variables that determine management Practice: 12/21/13 Quantative and Integrating Perspective 57
  58. 58. Four Contingency Variables • Organization size • Routineness of Task Technology • Environmental Uncertainty • Individual Differences 12/21/13 Quantative and Integrating Perspective 58
  59. 59. Contributions and Limitations: • Contributions of Contingency Theory: • Encourages innovation in problem solving • Requires the use of analytical, critical, and multidimensional techniques • Increased freedom to managers • Required managers to be more sensitive and alert 12/21/13 Quantative and Integrating Perspective 59
  60. 60. Limitations of Contingency Theory • Ignores universally applicable principles • Fails to enlist all contingency variables • Focuses only on situation and not on tools and resources • It ignores human behavioral aspects. 12/21/13 Quantative and Integrating Perspective 60
  61. 61. Emerging Management Issues and Challenges • • • • • • • • • • Globalization Development of Environmentalism Quality and Productivity Ethics and social responsibility Workforce diversity Innovation and change Empowerment of employees Knowledge management Technological development Multicultural effects 12/21/13 Quantative and Integrating Perspective 61
  62. 62. Chapter 2: Outline • • • • • • Precursors: – Management in Antiquity – Early Management Pioneers Classical Perspective: – Scientific Management: F.W. Taylor – Administrative Management: Hanri Fayol – Bureaucracy : max Weber Behavioral Perspective: – Hawthorne studies, Human Relations Movement, Organizational Behavior Quantitative Perspective: – Decisional Theory and Management Science and Operation Science Theory Integrating Perspective: – System and Contingency Perspective Emerging Management Issues and Challenges 12/21/13 62
  63. 63. Thank You Chapter Finish 12/21/13 Quantative and Integrating Perspective 63