Evolution of Management Theory


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Evolution of Management Theory

  1. 1. MN 1020Assignment 1 Name: Thushan Dharmawardana Index no: 101414G Submission date: 01/09/2011
  2. 2. The Evolution of Management TheoryIt was an era where so many alterations in the world Economy took place. In the closing decadesof the 19th century there was a quest of seeking innovative ways to increase organizationalefficiency and effectiveness. The Scientific Management Theory initiated on the basis of that. Inthis period of time crafts production was substituted by large factories in which a lot of technicalrevolutions have been taking place. The owners and managers were not capable of coping tothese challenges therefore they hunted for advanced techniques to overcome this situation. As asolution the concepts of Job Specialization and division of labour came about. In this scenarioworkers who specialized in their respective tasks became more skilled.The Scientific Management TheoryFredrick W. Taylor was the architecture of the concept Scientific Management, “The systematicstudy of relationships between people and tasks for the purpose of redesigning the work processto increase efficiency”. It was believed that the most effective and efficient division of labourcould best be determined by the concept of Scientific Management. There were four coreprinciples in this concept. Investigation and experimentation on organization performance Codification of new methods/standards Selection of employees according to codified standards Establishing a level of performance and a pay system with rewards101414G Page 1
  3. 3. In 1910 most of the organizations were using this concept but selectively. Even though therewas an increase in performance some disputes about this concept lead to an increase in tradeunion involvement. There were some major issues in this concept. Availability of fewer jobs Job dissatisfaction Distrust among employees and employers.Some organizations redesigned the principles according to their vision. For example introductionof moving conveyer belts in Henry Ford’s factory can be taken in to consideration. Howeverthese approaches were not able to solve the emerged issues. Nevertheless Taylor’s work had alasting effect on management production systems.Frank Gilbreth and Lillian Gilbreth who were the successors of Taylor studied how the workingenvironment influences the performance of the employees. They made a heavy contribution intime-and-motion study. They demonstrated that by following arrangements organizations cansolve their issues effectively.  Breaking up each job action into its components.  Finding better ways to perform the action.  Reorganizing each job action to be more efficientAdministrative Management TheoryResearchers attempted to discover how to create an organizational structure that leads to highefficiency and effectiveness. Theory of Bureaucracy was developed by Max Weber as asuccession of these researches. Bureaucracy is basically a formal system of organization andadministration designed to ensure efficiency and effectiveness. There were several principles inthis theory.101414G Page 2
  4. 4. Division of Labour Career Authority Orientation Hierachy Bureaucracy should have Formal Impersonality Selection Formal Rules and regulationsWeber identified several factors there should be in a bureaucracy system. Simultaneously HenryFayol identified 14 principles that should be vital to increasing the efficiency of the managementprocess according to his perspective.These studies of Fayol and Weber laid the foundation of modern management theory.Behavioural Management TheoryThis is the study of how managers should behave in order to motivate employees and encouragethem to strive towards high levels of performance as an organization. In the previous theory therewasn’t a major concern about the employee viewpoint. Thus Mary Farker Follett explained whyit is important to think about the human side of management.According to the studies of Follett managers should behave as coaches and facilitators –not asmonitors and supervisors and the importance of direct inter communication between managers ofdifferent departments to make speedy decisions. She also promoted the concept of “crossfunctioning” which has been used in a great scale at present.Hawthorne effect is the discovery that a manager’s behaviour and leadership approach canaffect the level of performance of employees. From this study emerged the concept of humanrelations movement. It is basically how the supervisors should be behaviourally trained to spiceup worker’s motivation, cooperation and increase their productivity.Informal organization isone of the implications of Hawthorne effect. This is the system of behavioural rules and normsthat come out in a group. The study of factors that have an impact on how individuals and groupsreact to in organizations has been identified as the organizational behaviour.101414G Page 3
  5. 5. Apart from these mentioned here the most significant approach was developed by DouglasMcGregor. He supposed two different sets of assumptions which were named as Theory X andTheory Y. Theory X Theory Y people people Dislike work like to work need force to Can be self make them disciplined work like to be will accept directed responsibility motivated motivated mainly by under right money conditions little highly creativity creativeManagement Science TheoryThis is a modern extension of Scientific Management Theory in this approach describes howprecise quantitative techniques can be used in order to make the best use of organizationalresources.101414G Page 4
  6. 6. Quantitative Management Management Management Operations Information Science Management Systems Theory Total Quality ManagementQuantitative management emphasises on how arithmetic can be manipulated to achieve bestpractises in inventory and financial capital control.Operations management presents a set of techniques that can be utilized to improve productionefficiencyTotal quality management focuses on the art of how the whole can be managed to achieveexcellence.Management information systems provide the managers with adequate information aboutinternal and external events of an organization to effective decision making.Organizational Environment TheoryThis is the set of conditions and forces that functions externally to the organization but affect amanger’s capability to acquire and utilize resources. This clearly stresses on how important it isto study the environment.The open systems theory and contingency theory developed in 1960 ascertains the importance ofthe importance of studying the environment.The Open –Systems ViewThis is a system where external resources are acquired and converted into goods and servicesthen sent back to customers for purchasing. And the cycle carries on. This system is considered101414G Page 5
  7. 7. as an open system. Organizations which use a closed system are likely to experience entropy,the tendency of a system to lose its ability to control itself and thus to dissolve and collapse.Contigency TheoryIt discloses that there is no best way to organize therefore characteristics of the environmentaffect an organization’s ability to obtain resources.Types of structuresAbove describes the differences between the structures. In conclusion managers in a Mechanisticstructure can obtain inputs at a lower cost preferably in a stable environment and managers in anorganic environment can react more quickly in a rapidly changing environment.These contributions constructed the foundation of modern management theories.References: Contemporary Management fifth editionGareth R. Jones, Texas A & M University -- College StationJennifer M. George, Rice University101414G Page 6