2. Learning Objectives
1. List relevant management
lessons from classical
managerial thinking
2. Explain management ideas
introduced by the human
resource approaches
3. What is the role of quantitative
analysis in management today?
4. What is unique about
contingency thinking and the
value chain in management?
3. Why look backwards?
Take the best forward
Don’t re-invent the wheel - update to reflect current conditions
Learn from past mistakes
"Experienceis that marvelous thing that enables you to recognize a
mistake when you make it again." (F. P. Jones)
Theories can be challenged
Past versus new approach
4. So theories….
Are an organised way of thinking about a subject.
Can help define concepts about the subject.
Organise definitions so that they do not contradict one
another.
Try to explain and predict on the basis of their concepts.
Can take emotion out of issues.
Are used unconsciously by most of us.
6. Management a Science?
• Fredrick Winslow Taylor, the “Father” of
scientific management publishes “The
Principles of Scientific Management” in
1911 where he advocates scientific
methods to define the “one best way” for a
job to be done:
• Putting the right person on the job
with the correct tools and
equipment.
• Having a standardised method of
doing the job.
• Providing an economic incentive to
the worker.
7. Scientific Management
•Scientific management emphasises careful selection and training of
workers, and supervisory support.
•The four guiding action principles are:
•1. Develop for every job a ‘science’ that includes standardised work
processes and conditions
•2. Carefully select workers with the right abilities for the job
•3. Carefully train and incentivise workers
•4. Support workers with carefully planned work.
8. Scientific Management
Today’s use of scientific
management:
Timeand motion studies to increase
productivity
Carefully
design jobs with efficient
work methods
Design incentive systems based on
output
Train workers to perform jobs at their
best
Train supervisors to support workers
so they can perform jobs to the best of
their abilities
9. Administrative Theorists
Henri Fayol
•Henri Fayol identified the following rules
or duties of management:
1.Foresight – complete a plan of action.
2.Organisation – provide and mobilise
resources.
3.Command – lead, select and evaluate
workers.
4.Coordination – fit diverse efforts
together.
5.Control – making sure things happen
according to plan.
10. Fayol’s a14 Principles
•Fayol also set forth number of ‘principles’ that
include:
•The scalar chain principle
•There should be a clear and unbroken line of
communication from the top to the bottom in the
organisation
•The unity of command principle
•Each person should receive orders from only one
boss
•The unity of direction principle
•One person should be in charge of all activities
that have the same performance objective
11. Max Weber
Bureaucracy - an “ideal”, rational
and efficient form of organisation
founded on logic, order and
legitimate authority
The defining characteristics are:
Clear division of labour
Clear hierarchy of authority
Formal rules and procedures
Impersonality
Careers based on merit
12. Hawthorne Studies
• Elton Mayo – Harvard professor from
Australia conducts studies of job design -
1924-1932
• Began as a scientific management experiment
with illumination studies
• Found the intensity of illumination was not
directly related to productivity
• The Hawthorne studies showed that people’s
feeling and relationships with co-workers, and
the ‘work group’, should be important to
management - contributed to the human
relations movement in management
• The Hawthorne effect: The tendency of
people singled out for special attention to
perform as expected.
13. Human Relations
Movement
Post-1940 - one of main moves in
management from theories that
emphasise move from external
control to internal motivation
(Maslow, McGregor, Vroom)
Maslow
Believed employees driven by
‘hierarchy of needs’ - Each must
be mostly satisfied before the next
level can be activated
Managers must understand where
an individual is in the hierarchy
and focus on satisfying needs at or
above that level.
14. Douglas McGregor
McGregor - X/Y attitude to
employees
X approach is one where
managers sees workers as
irresponsible, lazy and
needing constant control;
only incentives work are
material rewards (money) and
fear
Y where manager sees workers
as naturally seeking to make an
effort and seek responsibility;
rewards should be intrinsic to
job
15. Social-Reality
Mary Parker Follet and
administrative principles:
Organisations as ‘communities’
where individuals combine
their talents for a greater good
Making every employee an
owner creates feelings of
collective responsibility
Business problems involve a
wide variety of factors that
must be considered in
relationship to one another Mary Parker Follett - adult education,
leadership
16. Role of Quantitative
Approaches
• Management science (or
operations research)
–Describes the application of
mathematical techniques to
analyse and solve management
problems.
• Mathematical forecasting
–Makes future projections that
are useful in the planning
process.
• Inventory modelling
–Helps control inventories by
mathematically establishing
how much to order and when.
17. Role of Quantitative
Analysis
Application from military purposes
Includes application of statistics,
information and mathematical
models and computer simulations
Contributes directly to management
decision
making (planning and controlling).
The techniques use ‘economic’
decision criteria, such as costs,
revenues and return on investment
18. The contingency approach
Also sometimes called the
situational approach - Matching
responses to the unique problems
and opportunities posed by
different situations
There is no one universally
applicable set of management
principles (rules) by which to
manage organisations.
Organisations are individually
different, face different situations
(contingency variables), and require
different ways of managing.
19. Quality and performance
excellence
• Value chain
–The sequence of activities transforming materials into finished
products.
• Managers and workers in truly progressive organisations are quality
conscious.
• Every effort is made in total quality management (TQM) to build
quality into all aspects of operations — from initial acquisition of
resources, through the transformation processes and work systems, all
the way to ultimate product delivery to customers or clients.
21. Conclusion
•Historical approaches to management reflect
contexts that produce the same systems today
•Classical, behavioural and quantitative
approaches err in attempting to find one best way
to manage
•The contingency approach is only possible when
managers are fully aware of modern contextual
challenges and a full range of management
methods
22. Homework
• Prepare for tutorial discussion - read outline on the
course website - read the ‘strawberry generation’ on
page 260 of your textbook
• Consider if you will be absent for any tutorial in the
coming months and inform your tutor
• Make sure you have read Chapters 1 & 4 for the quiz
• Try the practice quiz if you have not done so already
(Course Extras > Week > Student Activities >
Multiple Choice Quiz)
Notes de l'éditeur
For example, the theory of who is suitable to be a leader? Height? Looks? Assertiveness? Theory of the week -
Taylor ’s history Privileged family Dropped out of Harvard and chose to work as a tradesman in a machine shop - rose to become an engineer and then to be an independent ‘consulting engineer for management’ 1899 - Bethlehem Steel - too many ‘pigs’ of iron - excess needed to be loaded for the brief Spanish-American War Loading was heavy and sweaty job - 12.5 tons per man per day Concerned with worker efficiency - applied Science - timed the process - said it could be 47.5 tons per man per day Story of Schmidt - selected as most suitable - gave him a 60% wage rise if he followed the ‘college man’s’ orders to load 47.5 tons a day. Productivity improvement - he made it....proof of the value of scientific management. Publishes the “ Principles of Scientific Management ” in 1911 - Beginnings of modern management Led to fame and respectability - claimed that his methods could save railroad companies a million dollars a day - headlines Even Lenin thought scientific management was the way to go
Develop a science for each job element -- Job Analysis Select and Train Cooperation to ensure all work done in accordance with scientific principles Division of labour increases productivity by increasing each worker ’s skill, dexterity, saves time, creates labour saving inventions and machinery
Problem with Taylor - the 47.5 tons was measured with 12 burly Hungarians over a one hour period - equivalent to timing a marathon by judging times over 100m dash Next day when the Hungarians were ordered to lift 47.5 tons a day they refused, and Taylor had them fired. Then they chose seven men, five turned up for the trials, av 32 tons each Next day - two were too exhausted to work, and by the afternoon of the second day, two more had dropped out. One guy left - Henry Noll - loaded the 45.75 tons - Noll represents the mythical Schmidt Implementation - a few could do it over a few days only - program was abandoned after two years - Taylor walked away with over 2.5 million (in today ’ s terms) in consulting fees Treating workers like machines Criticism from Labour Unions The lesson? Some theorists make ridiculous claims - sells books, makes the author famous, earns millions for consultants, but rarely do the results live up to the promises
Henri Fayol, Born in 1841, died in 1925; A French engineer and CEO; Although the title is translated as Administration in English, Fayol himself argued in his 1949 forward to the English translation of his book that it would be better termed management. There was no such word in French at that time. He wrote at the same time as Taylor but while Taylor focussed on management at the shop floor level, Fayol ’s attention was directed to the activities of all managers. Fayol described the practice of management as a separate function as distinct from other business functions such as accounting, finance, production etc. He argued that management was an activity common to all human activity in business and at home and it was something that could be taught to all.
Fayol ’ s 14 principles of management PRINCIPLES 1-7 are: 1. Division of work - The same as Adam Smith ’s “division of labour” Specialisation increases output by making employees more efficient . 2. Authority - Managers must give orders and accept responsibility. 3. Discipline - Derives from effective leadership, clear understanding of rules, and judicious use of penalties for infractions. 4. Unity of command - Every employee should receive orders from only one superior. - broken by some organisational structures where you report to two bosses. 5. Unity of direction - Each group of activities that have the same objective should be directed by one manager using one plan. 6. Subordination of the individual to the group - The interests of the organisation as a whole must take precedence over other interests. 7. Remuneration - Workers must be paid a fair wage for their services.
Example of impersonality - selection of a staff member for GUPSA
A series of productivity experiments conducted at Western Electric from 1927 to 1932. Findings Productivity unexpectedly increased under imposed adverse working conditions.The effect of incentive plans was less than expected. Relay Assembly Test - separate room - 6 women Extra pay due to group production - good social atmosphere with birthdays, cookies, cakes - Adeline and Irene started to complain - removed from room and replaced by impoverished Jennie and Mary (rate buster) - productivity rose markedly - 35% higher than base level - tried out more breaks, no breaks - little difference Conclusion Social norms, group standards and attitudes were the major influence on individual output and work behavior, more so than monetary incentives - although the workers actually earned almost double what they could normally earn on the factory floor. This was during the Great Depression. Mayo became famous, but again, the hype outgrew the actual science.
Maslow Five needs theory Each must be mostly satisfied before the next level can be activated Managers must understand where an individual is in the hierarchy and focus on satisfying needs at or above that level. Based his theory on his work experience and factory observations
Cultural factors and values/ beliefs of Managers plays a role in their management style.
The Whizz Kids ( a group of military officers who joined the Ford Motor Co.) began using statistical methods. Eg. Budgeting, Scheduling, Quality Control Eg. Material Resource Planning - in manufacturing - production planning and inventory control A consultants trick - baffle the managers with numbers and formulas - pareto principle - 20% of clients produce 80% of your income, 20% of business units produce 80% of income
A contingency approach is logical because organisations and even units within the same organisation are diverse in size, goals, work and the like.