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Development of Management Thought by Asst Prof. Jonlen DeSa

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Development of Management Thought by Asst Prof. Jonlen DeSa. A PPT on the evolution of various approaches & theories of Management.

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Development of Management Thought by Asst Prof. Jonlen DeSa

  1. 1. DEVELOPMENT OFDEVELOPMENT OF MANAGEMENT THOUGHTMANAGEMENT THOUGHT ASST PROF. JONLEN J. R. DESAASST PROF. JONLEN J. R. DESA
  2. 2. CONTENTS lassical Approaches to Management-Bureaucratic, Scientific, Administrative, Human Relations Approach. odern Approaches- Behavioral, Quantitative, Systems, Contingency. tyles of Management- Japanese, American, European.
  3. 3. *Management is as old as human civilization. *Management concepts and principles developed after the Industrial Revolution. *Various contributors to Management Theories, Concepts & Principles. *Management is an evolutionary concept. *Each of the schools of management thought are based on somewhat different assumptions about human beings and the organizations for which they work. *Each thought of school have come up with their own theories or concepts. They are based on various assumptions and differences/ disagreements do occur.
  4. 4. CLASSIFICATION OF MANAGEMENTCLASSIFICATION OF MANAGEMENT APPROACHESAPPROACHES
  5. 5. A. PRE-CLASSICAL APPROACH• Robert Owen: HRM Pioneer • Charles Babbage: Inventor & Management Scientist- Father of Modern Computing • Andrew Ure & Charles Dupin: Management Education Pioneers • Henry Robinson Towne
  6. 6. B. CLASSICAL APPROACH
  7. 7. CLASSICAL APPROACH  The classical school is the oldest formal school of management thought.  Its roots pre-date the twentieth century. The classical school of thought generally concerns ways to manage work and organizations more efficiently.  They form the foundation for the field of Management Thought.
  8. 8. CLASSICAL APPROACH • SCIENTIFIC MANAGEMENT focuses on the “one best way” to do a job. • ADMINISTRATIVE MANAGEMENT focuses on the manager & basic managerial functions. • BUREAUCRATIC MANAGEMENT focuses on the guidelines for structuring with formalization of rules, procedures and a clear division of labor.
  9. 9. 1.SCIENTIFIC MANAGEMENT- F.W. TAYLOR  F.W. TAYLOR- Father of Scientific Mgmt.  According to F.W. TAYLOR, “ scientific management is knowing exactly what you want men to do and seeing that they do it in the best and cheapest way”.  In 1898, Taylor joined Bethlehem Steel.  Taylor was a mechanical engineer who sought to improve industrial efficiency.  Working in the steel industry, Taylor had observed the phenomenon of workers' purposely operating well below their capacity, that is, soldiering. He attributed soldiering to three causes:
  10. 10.  The almost universally held belief among workers that if they became more productive, fewer of them would be needed and jobs would be eliminated.  Faulty wage system employed by the organization encouraged them to work at a slower pace.  Outdated methods of working handed down from generation to generation led to wasted efforts.
  11. 11. Taylor’s Principles of Scientific MgmtTaylor’s Principles of Scientific Mgmt
  12. 12. Techniques of Scientific Management
  13. 13. Other Contributors toOther Contributors to Scientific Management-Scientific Management- • FRANK B GILBRETH- Father of Motion Study. • LILLIAN M GILBRETH- Associated with Research to Motion Study. • Motion Study involves finding out the best sequence & minimum number of motions needed to complete a task. • Eliminate unnecessary motions & reduce fatigue. • “ therbligs”therbligs”- 17 hand motions • His work had great impact on medical surgery by drastically reducing the time patients spent on operating table. • He invented a device – ‘MICRO CHRONOMETER’ in order to record workers movement and the amount of time spend to done a job FRANK B GILBRETH & LILLIAN M GILBRETH Followers of Taylor
  14. 14. LIMITATIONS TO SCIENTIFIC MGMTLIMITATIONS TO SCIENTIFIC MGMT  Workers did not enjoy freedom of choice.  Payment based on performance was not supported by Trade Unions, Discrimination.  No bargaining for wages  Planning & Controlling in the hands of managers.  Lack of human approach  Tended to regard workers as uninformed and ignored their ideas for suggestions
  15. 15. 2. ADMINISTRATIVE MANAGEMENT2. ADMINISTRATIVE MANAGEMENT  Scientific Management focused on shop level activity or the lower level management, Administrative Management focuses on higher level managerial activities.  It is concerned with broad administrative principles applicable to the higher level functions.  Henry Fayol was the main contributor to Administrative Management.
  16. 16. HENRI FAYOL  French mining engineer and a management theorist.  Started as an engineer at a mining company and became Director in 1888.  Viewed management as a profession that can be trained and developed.  First one to analyze the functions of management.  Made three major contributions to the theory of Management:  (A)A clear distinction b/n technical & managerial skills. (B)Identified functions constituting the management process. (C)Developed principles of management.  He was known as the “ Father of Modern Management”.
  17. 17. • Fayol described management as a scientific process built up of five immutable elements: Planning, Organizing, Commanding, Coordinating, Controlling •
  18. 18. Fayol’s 14 Principles of ManagementFayol’s 14 Principles of Management • DIVISION OF WORKDIVISION OF WORK • AUTHORITY & RESPONSIBILITYAUTHORITY & RESPONSIBILITY • DISCIPLINEDISCIPLINE • UNITY OF COMMANDUNITY OF COMMAND • UNITY OF DIRECTIONUNITY OF DIRECTION • SUBORDINATION OF INDIVIDUAL INTERST TO GENERALSUBORDINATION OF INDIVIDUAL INTERST TO GENERAL INTERESTINTEREST • REMUNERATIONREMUNERATION • CENTRALIZATIONCENTRALIZATION • SCALAR CHAINSCALAR CHAIN • ORDERORDER • EQUITYEQUITY • STABILITY OF TENURE OF PERSONNELSTABILITY OF TENURE OF PERSONNEL • INITIATIVEINITIATIVE • ESPIRIT DE CORPSESPIRIT DE CORPS
  19. 19. SCIENTIFIC MGMT VS ADMINISTRATIVESCIENTIFIC MGMT VS ADMINISTRATIVE MGMTMGMT  F.W. Taylor  Shop Floor Level Workers  Micro Aspect of Jobs  Improving productivity thru standardization & work simplification  Scientific Observation, Experimentation  Henri Fayol  Top Level Mgmt  Macro Aspect of whole orgn  Improving overall administration thru POM.  Universal truths developed from personal experiences. Scientific MgmtScientific Mgmt Administrative MgmtAdministrative Mgmt
  20. 20. 3.BUREAUCRATIC MANAGEMENT3.BUREAUCRATIC MANAGEMENT • Bureaucratic Management is an important school of classical management, emphasized the need for organizations to function on rational basis. • The term “bureaucracy” (derived from the German buro, meaning office) referred to organizations that operated on a rational basis. • During 1800’s, European Org. were managed on a personal, family-like basis. • Max Weber was the main contributor to Bureaucratic Management
  21. 21. Max weberMax weber • German theorist and sociologist. • Follower of General Administrative Theory proposed by Henry Fayol. • Introduced most of the concepts on Bureaucratic Organizations. • According to Weber, “a bureaucracy is a highly structured, formalized & impersonal organization” • It is a formal organization structure with a set of rules & regulations
  22. 22. FEATURESFEATURES  Division of Labour & Specialization  Hierarchy of Authority  System of formal Rules & Regulations  Procedures  Selection & Promotion based on technical competence  Impersonal Relationships  Official Record
  23. 23. LimitationsLimitations
  24. 24. 4. HUMAN RELATIONS APPROACH  Human Relations Approach is treated as neo- classical as they do not reject classical concepts but try to improve them.  Workers are not machines and managers should recognize them as social beings and treat them accordingly.  This approach tried to overcome the drawbacks of Classical Management.
  25. 25. ELTON MAYO & HUMAN RELATIONS  Elton Mayo- “ Father of the Human Relations Approach”. He focused on human relations in an organization.  He led the team which conducted a study at Western Electric Hawthorne Plant.  Experiment was conducted in 4 phases at Hawthorne Plant.  Also known as Hawthorne Experiments.  Experiments were conducted between 1924-1933. Many management thinkers and engineers were involved in conducting the experiments.
  26. 26. 4 EXPERIMENTS/ STUDIES
  27. 27. ELTON MAYOELTON MAYO • Western Electric Hawthorne PlantWestern Electric Hawthorne Plant
  28. 28. HAWTHORNE EXPERIMENTSHAWTHORNE EXPERIMENTS • A team was constituted led by Elton Mayo (psychologist), Whitehead and Roethlisberger(sociologists and company representative, William Dickson. The researchers set out to study the relationship between productivity and physical working conditions. • The 4 Phases:  Experiments to determine the effects of changes in illumination on productivity, illumination experiments (1924-27)  Experiments to determine the effects of changes in hours and other working conditions on productivity, relay assembly test room experiments(1927-28)  Conducting plant-wide interviews to determine worker attitudes and sentiments, mass interviewing programme(1928-30)  Determination and analysis of social organization at work, bank wiring observation room experiments(1931-32)
  29. 29. 1. ILLUMINATION EXPERIMENT
  30. 30. 1. ILLUMINATION EXPERIMENT  This was undertaken to find out how varying levels of illumination (amount of light at the workplace, a physical factor) affected the productivity.  The hypothesis was that with higher illumination, productivity would increase.  Since productivity of both groups increased, researchers concluded that group productivity was not directly linked to intensity of illumination.  Something besides lighting influenced their performance.
  31. 31. 2. RELAY ASSEMBLY ROOM TEST ROOM2. RELAY ASSEMBLY ROOM TEST ROOM EXPERIMENTEXPERIMENT
  32. 32. 2. RELAY ASSEMBLY ROOM TEST ROOM2. RELAY ASSEMBLY ROOM TEST ROOM EXPERIMENTSEXPERIMENTS  The experiment were designed to determine the effect of changes in various job conditions on group productivity as the illumination experiment could not establish relationship between intensity of illumination and production.  For this purpose, the researchers set up a relay assembly test room.
  33. 33. MAJOR FINDINGS  The incentive system was changed so that each girl’s extra pay was based on the other five rather than the output of larger group, say 100 workers or so. The productivity increased as compared to before.  Two five minute tests- one in the morning session and other I evening session were introduced which were increased to ten minutes. The productivity increased.  The rest period was increased to five minutes but the frequency increased. The productivity slightly decreased and the girls complained that frequent rest intervals affected the rhythm of the work.  The number of rest was reduced to two of ten minutes each, but in the morning, coffee or soup was served along with sandwich and in the evening, snack was provided. The productivity increased.  Changes in working hours and workday were introduced such as cutting an hour off the end of the day and eliminating Saturday work. The girls were allowed leave at 4:30pm instead of the usual 5:00pm and later at 4:00pm. The productivity increased. Absenteeism decreased, morale increased and less supervision was required.
  34. 34. 3. INTERVIEW PHASE3. INTERVIEW PHASE
  35. 35. 3. INTERVIEW PHASE3. INTERVIEW PHASE  During the course of experiments, about 20,000 interviews were conducted between 1928 and 1930 to determine employees’ attitudes towards company, supervision, insurance plans, promotions, and wages.  FINDINGSFINDINGS  A complain is not necessarily an objective recital of facts; it is a symptom of personal disturbance the cause of which may be deep seated.  The position or status of a worker in the company is reference from which the work assigns meaning and value to the events, objects, and features of his environment such as hours of work, wages, etc.  The social organization of the company represents a system of values from which the worker derives satisfaction or dissatisfaction according to the perception of his social status and expected social rewards.  The social demands of the worker are influenced by social experience in groups both inside and outside the work plant.
  36. 36. 4. BANK WIRING OBSERVATION ROOM4. BANK WIRING OBSERVATION ROOM EXPERIMENTS:EXPERIMENTS:
  37. 37. 4. BANK WIRING OBSERVATION ROOM4. BANK WIRING OBSERVATION ROOM EXPERIMENTSEXPERIMENTS  There experiments were carried on with a view to analyze the functioning of small group and its impact on individual behavior.  Workers were paid on the basis of performance.  Output was fairly constant, contrary to their expectation.  Group encouraged neither too much nor too little work.  Money was not a main incentive for them.  Group acceptance appeared to be more important to the worker than money.
  38. 38. THE REASONS FOR THIS OUTPUT:  Fear of unemployment: the basic reasoning of workers was that if there would be more production per head, some if the workers would be put out of employment .  Fear of raising the standards: most workers were convinced that once they had reached the standard rate of production, management would raise the standard of production reasoning that it must be easy to attain.  Protection of slower workers: The workers were friendly on the job as well as off the job. They appreciated the fact that they had family responsibility that required them to remain in the job. Since slower workers were likely to be retrenched, the faster workers protected them by not overproducing.  Satisfaction on the part of management: According to workers, management seemed to accept the lower production rate as no one was being fired or even reprimanded for restricted output.  The study suggested that informal relationships are an important factor in determining the human behavior. During the course of experiments, workers were counseled for good human relations in the company's plant. The counseling was in regard to supervision , employee relations, personal adjustments and management of employee relations.
  39. 39. CONTRIBUTIONS OF HAWTHORN EXPERIMENTS  It laid the foundation for Human Relations Movement. PRE-JUDGMENTS FINDINGS Job Performance depends on the individual worker. The Group is the key factor in job performance. Fatigue is the main factor affecting output. Perceived meaning & importance of the work determine output. Management sets production standards. Workplace culture sets its own production standards.
  40. 40. CRITICISM/ LIMITATIONS  The Hawthorne researchers did not give sufficient attention to the attitudes that people bring with them to workplace.  The Hawthorne plant was not a typical plant because it was a thoroughly unpleasant place to work. Therefore, the results could not be valid for others.  The findings & conclusions reached were questionable.  Relationship made between the satisfaction of workers and productivity was too simple.
  41. 41. C. MODERN APPROACHES  Modern Management Theories indicate refinement & extension of classical theories.  Introduced after 1950.  Modern theories take into account changing situations, human resource, systems etc.
  42. 42. 1.BEHAVIOURAL APPROACHES1.BEHAVIOURAL APPROACHES  Its an extension of Human Relations Approach.  Study of Attitudes, Behavior, Performance & Importance of Groups in Organizations  Attribution  Stress on democracy rather than autocracy.  Motivation is important, managers have to be sensitive to the needs of employees.
  43. 43. BEHAVIOURAL APPROACHESBEHAVIOURAL APPROACHES
  44. 44. A. GROUP INFLUENCES  MARY P. FOLLET  POWER WITHIN not POWER OVER  Gave importance to Functioning of Groups.
  45. 45. b. NEEDS HIERARCHY-ABRAHAM MASLOWb. NEEDS HIERARCHY-ABRAHAM MASLOW
  46. 46. C. THEORY X & THEORY Y-C. THEORY X & THEORY Y- DOUGLAS MCGREGORDOUGLAS MCGREGOR  D. McGregor developed 2 assumptions about human beings.  Theory XTheory X- Negative Assumptions  Theory Y- Positive Assumptions  Assumptions that managers have about their employees.  Theory X is based on traditional assumptions about people (employees).  Theory Y is based on modern or progressive or professional approach.
  47. 47. ASSUMPTIONS OF THEORY X.  The average human being is inherently lazy by nature and desires to work as little as possible. He dislikes the work and will like to avoid it, if he can.  He avoids accepting responsibility and prefers to be led or directed by some other.  He is self-centered and indifferent to organizational needs.  He has little ambition, dislikes responsibility, prefers to be led but wants security.  He is not very intelligent and lacks creativity in solving organizational problems.  He by nature resists to change of any type.  In the case of such employees, self-motivation is just not possible. They will work only when there is constant supervision on them. A manager has to persuade, punish or reward such workers in order to achieve organizational goals.
  48. 48. ASSUMPTIONS OF THEORY Y.  Work is as natural as play, provided the work environment is favorable. Work may act as a source of satisfaction or punishment. An average man is not really against doing work.  People can be self-directed and creative at work if they are motivated properly.  Self-control on the part of people is useful for achieving organizational goal. External control and threats of punishment alone do not bring out efforts towards organizational objectives.  People have capacity to exercise imagination and creativity.  People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organizations.  An average human being learns under proper conditions. He is also willing to accept responsibility.  The intellectual capacity of an average human being is utilised partially under the conditions of modern industrial life.
  49. 49. D. TWO FACTOR THEORY- FREDRICKD. TWO FACTOR THEORY- FREDRICK HEZBERGHEZBERG  2OO Engineers & Accountants were studied to find out the extent of satisfaction & dissatisfaction with their jobs.  Recall instances of Satisfaction & Dissatisfaction.  Satisfaction Job Content (Motivators)  Dissatisfaction Job Context (Hygiene Factors)  Herzberg Concluded:  Presence of good job content factors led to Satisfaction  Absence of good job context factors led to Dissatisfaction
  50. 50. 2. QUANTITATIVE APPROACH2. QUANTITATIVE APPROACH  It is also known as Mathematical Approach.  The Quantitative Management Approach emerged during WWII.  The approach makes use of Mathematics, Statistics, Computer Simulations, Operational Models for Decision Making.  These Quantitative tools are known as Operations Research Techniques.
  51. 51. DEFINITION  ‘The quantitative approach involves the use of quantitative techniques to improve decision making. This approach has also been labeled operations research. It includes applications of statistics, information models, and computer simulations.’
  52. 52. 3 BRANCHES OF QUANTITATIVE APPROACH3 BRANCHES OF QUANTITATIVE APPROACH
  53. 53. MANAGEMENT SCIENCE  The management science approach stresses the use of mathematical models and statistical methods for decision-making.  Another name commonly used for management science is operations research.  Recent advances in computers have made it possible to use complex mathematical and statistical models in the management of organizations.
  54. 54.  Management science techniques are widely used in the following areas:  Capital budgeting and cash flow management  Production scheduling  Development of product strategies  Planning for human resource development programs  Maintenance of optimal inventory levels
  55. 55.  Various mathematical tools like the waiting line theory or queuing theory, linear programming, the program evaluation review technique (PERT), the critical path method (CPM), the decision tree theory, the simulation theory, the probability theory, sampling, time series analysis etc. have increased the effectiveness of managerial decision-making.  To apply a quantitative approach to decision-making, individuals with mathematical, statistical, engineering, economics and business background skills are required.  Since one person cannot have all these skills the quantitative method requires a team approach to decision-making.  This approach has been criticized for its overemphasis of mathematical tools.
  56. 56. OPERATIONS MANAGEMENT  Operations management deals with the effective management of the production process and the timely delivery of an organization’s products and services.  Operations management is concerned with: (i) inventory management, (ii) work scheduling, (iii) production planning, (iv) facilities location and design, and (v) quality assurance.  The tools used by operations managers are forecasting, inventory analysis, materials requirement planning systems, networking models, statistical quality control methods, and project planning and control techniques.
  57. 57. MANAGEMENT INFORMATION SYSTEMS  Management information systems focuses on designing and implementing computer-based information systems for business organizations.  In simple terms, the MIS converts raw data into information and provides the needed information to each manager at the right time, in the needed form.
  58. 58. QUANTITATIVE APPROACHQUANTITATIVE APPROACH  Decision Making in Planning & Controlling.  Solving Problems.  Popularized Electronic Data Processing.  Used in capital budgeting, production scheduling, inventory control.  Underrates Human element in Management.  Unrealistic Assumptions.  Management is only Decision Making. CONTRIBUTIONS LIMITATIONS
  59. 59. 3.SYSTEMS APPROACH  A system is a set of interacting or interdependent components forming an integrated whole. It is a complex whole formed from related parts: a combination of related parts organized into a complex whole.  The Systems approach gives mangers a new way of looking at an organization as a whole and as part of the external environment.  In systems approach, there is a lot of combination or bringing things together.  Systems approach was advocated by Chester Barnard, George Homans, Philip Selznick, Hebert Simon.  Systems approach is used to study the functions of complex organizations
  60. 60. FEATURES  A system has a number of sub-systems, parts & sub-parts. It is a combination of all sub- systems/parts.  All sub-systems/ parts are related to each other. A change in one part will effect the others.  Systems approach emphasizes the study of the various parts and their inter-relationships.  This approach can be used by any other school of management thought.
  61. 61. 4 Major Components4 Major Components
  62. 62. 2 MAIN TYPES OF SYSTEMS
  63. 63. 4. CONTINGENCY APPROACH4. CONTINGENCY APPROACH  Also known as Situational Approach.Situational Approach.  It has been developed to adapt to the changing situations of the organizations.  There is no single principle to manage all the situations in an organization. Hence “ one best way of doing things” doesn’t hold true in Situation Approach.  Today’s world is uncertain, any situation or contingency may arise and hence management should always have a plan to deal with the same.  Importance of Plan B
  64. 64.  According to the Contingency Approach, the manager should identify, “which technique will, in a particular circumstance, and at a particular time, best contribute to the attainment of management goals”.  The essence of this approach is that managers should identify the situations, interpret them and apply the approach which suits the situation the best.
  65. 65. MANAGEMENT STYLESMANAGEMENT STYLES
  66. 66. A. JAPANESE STYLE OF MANAGEMENT  Japan has adopted managerial practices/styles which are quite different from those of other economically advanced countries in the western world.  Japan is one of the leading industrial nations in the world.  There are 3 common Japanese management practices. Lifetime employment “ Nenko” Consensus decision making “ Ringi” Unique position of quality circles
  67. 67. 1. Lifetime Employment (‘Nenko’):  Important feature of Japanese style of management is lifetime employment for permanent employees, great concern for the individual employee, and emphasis on seniority  Large majority of employees in Japan spend their working life period with a single enterprise.  This gives security and a feeling of belonging among the employees.  In addition, it brings harmony of an employee with the company, stronger loyalty with the company.
  68. 68.  Merits: 1. It avoids warfare among competing firms in the labour market. 2. Labour turnover and cost of hiring are minimized 3. A high sense of commitment and loyalty to the firm is developed. 4. Job hopping is a taboo in Japan. 5. An employee leaving the jobs frequently is treated as bad worker. He also loses benefits of seniority and starts at the bottom.  Demerits: 1. This concept adds to the business costs as the employees are kept on the payroll of the company even when there maybe insufficient work. 2. Companies find it difficult to maintain close relations with a large number of lifetime workers as the numbers keep increasing. 3. Along with the lifetime employment the seniority system is another management practice followed in Japan. This seniority system provides privileges for older employees with many years of service with the company.
  69. 69. 2. Consensus on decision-making in Japan:  It is collective and democratic.  It is based on the idea that new changes and new concepts should come primarily from the lower levels of management.  The lower level employees prepare proposals for higher level personnel.  The supervisor at the higher level simply do not just accept or reject the proposal submitted. They prefer to have communication with the workers who submitted the proposal  The supervisor tactfully questions them, make suggestions and encourages subordinates to think more and prepare improved proposals for consideration at the higher level
  70. 70.  Japanese management uses decision-making by consensus or consensus decision making (“Ringi”) in order to deal with everyday problems  Lower level employees initiate an idea and submit it to the next higher level.  Benefits: a) It results in dispersion of actual decision making to lower levels of management b) It facilitates corporate harmony and prevents conflicts c) It allows inputs from lower level of management d) It improves commitment to implementing decisions  Limitations: 1. The decision making process becomes slow 2. Optimum allocation of resources becomes difficult
  71. 71. 3. Unique Positions of Quality Circles:  The concept of quality circles (also called Quality Control Circles) is popular and used extensively as management practice in Japan.  Quality is given the first priority & maximum attention.  Here, workers from one department form a small unofficial group. The group meets frequently, study their problems/ difficulties for remedial measures.  In addition, other problems such as cost control, quality improvement, elimination of wastages are discussed in group meetings and finally proposals are submitted to higher level management for consideration and approval.  The quality circles operate on voluntary basis but get due support from the management.  Innumerable quality control circles are at work in Japanese industry today. They contribute substantially for improvements in quality and productivity.
  72. 72. 4. Job rotation/ non-specialized career paths 5. Collective group relationship (“Omikoshi”) 6. Paternalistic human concern 7. Profit based compensation system 8. Democratic management 9. Emphasis on training 10. Slow evaluation and seniority- based promotions 11. Focus on self-discipline and harmony (No internal competition) 12. Company unions 13. Ethical conduct 14. Employee Involvement 15. Employee Workforce
  73. 73. B. AMERICAN STYLE OF MANAGEMENTB. AMERICAN STYLE OF MANAGEMENT  The American Style of Management is completely different from the Japanese Style of Management.  Key features include:  Hire & Fire Policy  Use & Throw Approach  Individualism  Short term Employment
  74. 74. FEATURES OF AMERICAN STYLE OF MANAGEMENT 1) Individualistic approach is more predominant in the American management style. 2) Managerial decisions are mostly made by the top level management in USA 3) Employees in USA do not take initiative in assisting the management 4) Information within the organization do not flow in all directions
  75. 75. 5) Employees in the USA strive for individual achievements and rewards and are not interested in group achievements or rewards. 6) Individual work is the culture of American firms whereas teamwork is the culture of Japanese firms. 7) Employees in USA prefer close supervision on their work and are not interested in empowerment. 8) The concept of lifetime employment is not favored by the management in USA. Employment in USA is for a short duration.
  76. 76. 9) American companies follow mechanistic approach or “use and throw” policy in managing people. 10) American companies follow short term and pure business oriented approach in managing business. 11) American multinationals follow above noted managerial practices in many other countries where they open branches, offices, subsidiaries and so on.
  77. 77. C. EUROPEAN STYLE OF MANAGEMENT  Professional management is one feature of European management style.  European countries are closer to America and the management style of European countries is closer to the American style.  Every European country has socio-economic and cultural background and the management styles introduced in these countries differ from one another in certain respects. However there are some common features of these management styles.  Managers of European countries manage business and employees in different ways as per tradition and cultural background. Yet there are some commonalities among European managers.
  78. 78.  Changes have also taken place in management styles and practices of European countries.  In France: there is heavy involvement of government in economic and social activities. The relationship between government and industry is close.  The impact of management style of USA is visible in the management style of France. French managers are supportive to European union.  The management practices in France are changing due to globalization and global outlook.  The managerial style in Germany is characterized by considerable use of authority.
  79. 79.  Common Features of European style of management are: 1) European managers think of themselves as being more people oriented than US Managers. 2) The European managers perceived that the US management style is more top-down, whereas in Europe, the European firms make negotiations with workers/unions and also with subsidiaries. 3) European managers are operating between the extremes of short term profit orientation of American managers and long term growth of Japanese managers
  80. 80. 4) European managers have developed skills in managing international diversity. Managing across borders is achieved more through people than through structures and procedures. The ability of European managers to speak several languages facilitates the “people approach” 5) European managers are not favourable to traditional management approach but are supportive to professional management. They also favour flexible approach to management process.
  81. 81. DISTINCTIONSDISTINCTIONS
  82. 82. JAPANESE V/S EUROPEAN MANAGEMENT STYLES Japanese Management Style European Management Styles Management Approach: the management approach in Japan is favorable to group/ collective and democratic management. The management approach among European countries is individualistic but is favorable to employees. European managers are people oriented. Decision making mechanism: it is participative and employees participate in the decision making process freely. It is favorable to negotiations with workers/unions and subsidiaries while taking policy decisions. However, less participative as compared to Japanese management. Uniformity: management style in Japan is uniform as it covers only one country Management style in Europe is not uniform as many countries with different socio-economic-cultural backgrounds are involved.
  83. 83. Employee participation: such participation is substantial and is regarded as unique feature of Japanese management. Workers are encouraged to participate in management through suitable platforms created. Limited participation of employees in the form of negotiations with workers and unions. Obedience of workers is expected to the decisions taken by the management Life time employment: the concept is supported in Japanese management Life time employment concept is absent among European countries but managers show concern for subordinates and “use and throw” approach is not given much importance as in the case of USA Supportive to: management style in Japan is favorable to prosperity of Japan European management style is supportive to European union and expansion of global trade.
  84. 84. JAPANESE VS. AMERICANJAPANESE VS. AMERICAN STYLE OF MANAGEMENTSTYLE OF MANAGEMENT Japanese style of management American style of management Management approach: group/ collective/ democratic approach is predominant in management style in Japan Individualistic approach is predominant in American management style Decision making: decision-making is treated as a team activity. There is interaction and participation of both top and lower level employees in decision making process. Collective decision mechanism are encouraged Decision are mostly by top management and are pushed downward. Individual decision making is a normal practice. However, at present, American software companies have practicing group decision making. Information service: information moves freely in all directions within the business unit. Information flows in a specific direction through a particular channel decided
  85. 85. Employee participation: employees are encouraged to participate in management through quality circles. Their suggestions are given due respect. As a result, employees volunteer to assist the management. Employees are not encouraged to participate in the management. They also do not volunteer to assist management on their own. They take up new assignment of work only when formally given. Employee attitude: employees strive for group/ team achievements and rewards Employees strive for individual achievements and rewards. Work culture: teamwork is the culture of Japanese firms. Individual work is the culture of the American firms. Empowerment: Japanese employees prefer empowerment American employees prefer close supervision Promotion: slow/ gradual evaluation of employees and promotion to higher positions Rapid evaluation and promotions
  86. 86. Career opportunities/ paths: non specified career paths but career opportunities are provided to employees Specialized career paths software industry in USA encourages multi- career paths to their employees. Responsibility: collective responsibility concept is accepted at the management Individual responsibility concept is accepted at the management level Life time employment Hire and fire policy Humanistic approach to management Mechanistic approach to management. Use and throw policy.
  87. 87. SUMMARYSUMMARY

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