Principles of management+lecture two
- 1. Principles of Management Lecture Two The Schools of the Management Thought Why the study of management has been approached from different perspectives? Management is a broad and complex field of study, yet if we are to see what makes organizations successful, we must understand management thoroughly. Vast and complex management is an exciting area of investigation. Some researchers have focused on what individual workers and manager do, to gain insight into the process. Other researchers have concentrated on how people work with one another in organizations, and still others have analyzed the type and nature of decisions manager makes different contributions of writers on management resulted in different approaches to it “mgt .theory jungle”. The development of management theories has been characterized by differing believes about what managers do and how they should do it. This lecture presents the contributions of three approaches. Scientific management looked at management from the perspective of improving the productivity and efficiency of manual works. General administrative theorists were concerned with the overall organizational and how to make it more effective. Then the quantitative management theorists focused on developing and applying quantitative models to management practices. 1
- 2. MANAGEMENT Beginning Emphasis SCHOOLS Dates CLASSICAL SCHOOL Managing workers and organizations more efficiently. Scientific Management 1880s Administrative 1940s Management Bureaucratic 1920s Management BEHAVIORAL SCHOOL Understanding human behavior in the organization. Human Relations 1930s Behavioral Science 1950s QUANTITATIVE SCHOOL Increasing quality of managerial decision-making through the application of mathematical and statistical methods. Management Science 1940s Operations Management 1940s Management 1950s—1970s Information Systems SYSTEMS SCHOOL 1950s Understanding the organization as a system that transforms inputs into outputs while in constant interaction with its' environment. CONTINGENCY SCHOOL 1960s Applying management principles and processes as dictated by the unique characteristics of each situation. THE CLASSICAL SCHOOL 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 2
- 3. manage work and organizations more efficiently. Three areas of study that can be grouped under the classical school are scientific management, administrative management, and bureaucratic management. SCIENTIFIC MANAGEMENT. In the late 19th century, management decisions were often arbitrary and workers often worked at an intentionally slow pace. There was little in the way of systematic management and workers and management were often in conflict. Scientific management was introduced in an attempt to create a mental revolution in the workplace. It can be defined as the systematic study of work methods in order to improve efficiency. Frederick W. Taylor was its main supporter. Other major contributors were Frank Gilbreth, Lillian Gilbreth, and Henry Gantt. Scientific management has several major principles. First, it calls for the application of the scientific method to work in order to determine the best method for accomplishing each task. Second, scientific management suggests that workers should be scientifically selected based on their qualifications and trained to perform their jobs in the optimal manner. Third, scientific management advocates genuine cooperation between workers and management based on mutual self-interest. Finally, scientific management suggests that management should take complete responsibility for planning the work and that workers' primary responsibility should be implementing management's plans. Other important characteristics of scientific management include the scientific development of difficult but fair performance standards and the implementation of a pay-for-performance incentive plan based on work standards. ADMINISTRATIVE MANAGEMENT. Administrative management focuses on the management process and principles of management. In contrast to scientific management, which deals largely with jobs and work at the individual level of analysis, administrative management provides a more general theory of management. Henri Fayol is the major contributor to this school of management thought. He argued that management was a universal process consisting of functions, which he termed planning, organizing, commanding, coordinating, and controlling. He points that these are the principles of management that can improve an organization’s operation: 1. Division of work: specialization increases output by making employees more efficient. 2. Authority and responsibility: managers must be able to give orders, responsibility goes with authority. 3
- 4. 3. Discipline: employees must obey and respect the rules that govern the organization. 4. Unity of command: every employee should receive orders from only one superior. 5. Unity of direction: the organization should have a single plan of action to guide managers and workers. 6. Subordination of individual interests: the interests of any one employee or group of employees should not take precedence over the interests of the organization as whole. 7. Remuneration: workers must be paid a fair wage for their services. 8. Centralization: the degree to which subordinates are involved in decision making. 9. Scalar chain: the line of authority from top management to the lowest ranks is the scalar chain. 10. Order: order and materials should be in the right place at the right place at the right time. 11. Equity: managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel: management should provide orderly personnel planning and ensure that replacement is available to fill vacancies. 13. Initiative: employees who are allowed to originate and carry out plans will exert high levels of effort. 14. Espirit: promoting team spirit will build harmony and unity within the organization. BUREAUCRATIC MANAGEMENT. Bureaucratic management focuses on the ideal form of organization. Max Weber was the major contributor to bureaucratic management. Based on observation, Weber concluded that many early organizations were inefficiently managed, with decisions based on personal relationships and loyalty. He proposed that a form of organization, called a bureaucracy, characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more efficient management. Weber also contended that managers' authority in an organization should be based not on tradition or charisma but on the position held by managers in the organizational hierarchy. Bureaucracy has come to stand for inflexibility and waste, but Weber did not support or favor the excesses found in many bureaucratic organizations today. Weber's ideas formed the basis for modern organization theory and are still descriptive of some organizations. THE BEHAVIORAL SCHOOL The behavioral school of management thought developed, in part, because of perceived weaknesses in the assumptions of the classical school. The classical school emphasized efficiency, process, and principles. HUMAN RELATIONS. 4
- 5. The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of researchers participated in the studies, including Clair Turner, Fritz J. Roethlisberger, and Elton Mayo, whose respective books on the studies are perhaps the best known. One of the major conclusions of the Hawthorne studies was that workers' attitudes are associated with productivity. Another was that the workplace is a social system and informal group influence could exert a powerful effect on individual behavior. A third was that the style of supervision is an important factor in increasing workers' job satisfaction. The studies also found that organizations should take steps to assist employees in adjusting to organizational life by fostering collaborative systems between labor and management. Such conclusions sparked increasing interest in the human element at work; today, the Hawthorne studies are generally credited as the drive for the human relations school. According to the human relations school, the manager should possess skills for diagnosing the causes of human behavior at work, interpersonal communication, and motivating and leading workers. The focus became satisfying worker needs. If worker needs were satisfied, wisdom held, the workers would in turn be more productive. Thus, the human relations school focuses on issues of communication, leadership, motivation, and group behavior. BEHAVIORAL SCIENCE. Behavioral science and the study of organizational behavior emerged in the 1950s and 1960s. The behavioral science school was a natural progression of the human relations movement. It focused on applying conceptual and analytical tools to the problem of understanding and predicting behavior in the workplace. However, the study of behavioral science and organizational behavior was also a result of criticism of the human relations approach as simplistic and manipulative in its assumptions about the relationship between worker attitudes and productivity. The study of behavioral science in business schools was given increased confidence by the 1959 Gordon and Howell report on higher education, which emphasized the importance to management practitioners of understanding human behavior. The behavioral science school has contributed to the study of management through its focus on personality, attitudes, values, motivation, group behavior, leadership, communication, and conflict, among other issues. Some of the major contributors to this school include Douglas McGregor, Frederick Herzberg, Renais Likert, and Ralph Stogdill, although there are many others. THE QUANTITATIVE SCHOOL 5
- 6. The quantitative school focuses on improving decision making via the application of quantitative techniques. Its roots can be traced back to scientific management. MANAGEMENT SCIENCE AND MIS. Management science uses mathematical and statistical approaches to solve management problems. It developed during World War II as strategists tried to apply scientific knowledge and methods to the complex problems of war. Industry began to apply management science after the war. George Dantzig developed linear programming, an algebraic method to determine the optimal allocation of scarce resources. Other tools used in industry include inventory control theory, goal programming, queuing models, and simulation. The advent of the computer made many management science tools and concepts more practical for industry. Increasingly, management science and management information systems (MIS) are intertwined. MIS focuses on providing needed information to managers in a useful format and at the proper time. Decision support systems (DSS) attempt to integrate decision models, data, and the decision maker into a system that supports better management decisions. PRODUCTION AND OPERATIONS MANAGEMENT. This school focuses on the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an special area of management study after World War II. It uses many of the tools of management science. Major areas of study within operations management include capacity planning, facilities location, facilities layout, materials requirement planning, scheduling, purchasing and inventory control, quality control, computer integrated manufacturing, just-in-time inventory systems, and flexible manufacturing systems. SYSTEMS SCHOOL The systems school focuses on understanding the organization as an open system that transforms inputs into outputs. This school is based on the work of a biologist, Ludwig von Bertalanffy, who believed that a general systems model could be used to unite science. The systems school began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems school focuses on the organization as a 6
- 7. whole, its interaction with the environment, and its need to achieve balance. General systems theory received a great deal of attention in the 1960s, but its influence on management thought has diminished somewhat. It has been criticized as too abstract and too complex. However, many of the ideas inherent in the systems school formed the basis for the contingency school of management. CONTINGENCY SCHOOL The contingency school focuses on applying management principles and processes as dictated by the unique characteristics of each situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organizational characteristics, characteristics of the manager, and characteristics of the subordinates. The contingency school originated in the 1960s. It has been applied primarily to management issues such as organizational design, job design, motivation, and leadership style. For example, optimal organizational structure has been theorized to depend upon organizational size, technology, and environmental uncertainty; optimal leadership style, meanwhile, has been theorized to depend upon a variety of factors, including task structure, position power, characteristics of the work group, characteristics of individual subordinates, quality requirements, and problem structure, to name a few. 7