management theories “classical & neoclassical … thougt.pdfmanagement theories “classical...

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Management Theories“Classical & Neoclassical Approaches”

Lecture 7.2

Colman McMahon

[email protected]

Knowledge Management

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Primary Texts

Modern Management

Tiernan, Morely, Foley, 2006 (3rd Ed)

A Primer on Organisational Behavior

Bowditch & Buono, 2007 (6th Ed)

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“Management”: Etymology

The verb “manage” comes from the Italian “maneggiare” (to handle — especially tools), which in turn derives from the Latin “manus” (hand).

The French word “mesnagement” (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries. [Oxford English Dictionary]

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The management process

1. Planning

3. Staffing

5. Controlling

4. Leading

2. Organising

Management

Source: “Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006, p.4

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Key Management Functions

Planning

The selection of goals and outlining the means to achieve them

Organising

Structuring, arranging and allocating resources and activities

Leading

Exerting formal or informal influence, and directing the activities of others

Controlling

Ensuring that plans are implemented as intended and that deviations are corrected

Coordinating

Synchronising and ensuring that events/activities occur as planned

Staffing

Hiring, training and retaining qualified, responsible and motivated people

Delegating

Assigning activities, tasks and responsibilities to individuals/groups

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Management Roles

The task or behaviour performed by managers to achieve organisation's goals:

Mintzberg's “10 Managerial Roles”:

1) Dissemenator

2) Disturbance handler

3) Entrepreneur

4) Figurehead

5) Leader

6) Liaison

7) Monitor

8) Negotiator

9) Resource allocator

10) Spokesperson

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So... how did we get to this point?

7,000 years history

Current State

Like most things in life... HISTORY

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Sociology of knowledge

Why a history lesson...?

Rationale underlying this historical perspective emerges from an area of study within sociology known as the sociology of knowledge

various theories and explanations of the world are in some measure social products

influenced by wider cultural, economic, political and technological forces

"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011,

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Management- a recent concept

Attempts to study management as a distinct and separate field... only the past 100 years approx. very recent in historic terms

Modern management thought can be analysed by examining the evolution of society as it has passed from:

Agrarian

Industrial

Postindustrial

Must examine the transitions that have revolutionised our society:

from a rural culture based on agriculture and the family

culture based on technology, industry and urban settings.

"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011,

5000 BC 4000 BC 3000 BC 2000 BC 1000 BC 1000 AD 2000 AD

7000 : 100

19001500

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Approaches to Management

Ancient Civilisation (“PreScientific”)

Sumerian, Egyptian, Roman, Adam Smith

Classical Approach (“Scientific”)

Taylor, Gantt, the Gilbreths, Weber, Fayol

Behavioural Approach

Maslow, Munterberg, Mayo, Follett, McGregor, Bernard, Owen

Quantitative/Management Science Approach

Statistical, mathematical, optimization

Contemporary Approach

Contingency/Situational Theorists

Systems Theorists

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This lecture's extent

Management Theories

Note: The year associated with each school of thought is the year that the approach began. The beginning of the next school of thought does note indicate the end of the previous one.


1700 & 1800s Industrial

Revolution

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Scientificmanagement

Structuralists(Bureaucracy)

Administrativemanagement

HumanRelations /Behavioural

Quantitative management

Organisational behaviour

Systems theory

TQM

Contingency theory

Organisational culture

Current and future

issues

EarlyPractices

Contemporary ApproachesClassical Approaches Neoclassical

Period Pre-1800s 1800s 1800-1930 1930-1960 1960s 1970-2010

Nature of Work Agrarian Industrial Post-industrial

Locus of work Farm/home Factory Office Cyberspace

Nature of work Physical: agriculture/crafts

Physical: Manufacturing

Social:services

Abstract: computer mediated

Key resource Land Machinery Knowledge

Management and organisation theory

Pre-scientific Classical Neoclassical Modern /Contemporary

Scientific management

Human relations Management Science


Behavioural Systems Theory

Administrative Theory

Contingency Theory

Organisational Behaviour

Assumptions about human nature

Economic person Social person Self-actualizingperson

Complexperson

Focus ofmanagerial control

Patterns of physical movement and precise ways of performing work

Patterns of social interaction Patterns of attention Patterns of connectivity

Role of management

Control employee behaviour Maintain employeesocial systems

Facilitate employee

development

Ensure organisation -wide integration

Facilitate inter-organisational collaboration

"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011, p.6.

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Early Management thought Attempts to understand and develop a theory of management can be traced back to the earliest effort of

man to achieve goals by working in groups.

Prior to the beginning of the 20th century, little systematic attention given to the development of a body of knowledge concerning management and organization

In ancient Greek, Egyptian, and Biblical times, the ruling class perceived work, commerce, and trade as being beneath their dignity, something to be accomplished by slaves and “lessthanrespectable” citizens

Thus, 2 dominant themes came to characterize these preindustrial societies:

people had a relatively parochial view of the role that managers could play in organizations, basically due to the static nature of society (e.g., individuals were bound to their situations in life; rules could not be questioned)

the prevailing cultures held an unfavourable view of profitmaking

Some attempts to develop management practices during this era:

Socrates discussed the universality of management principles

Generally speaking, early efforts were largely sporadic and widely scattered

"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011

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Early Management thought

Sumerians of Mesopotamia Earliest evidence of thoughts and ideas in relation to

management can be traced back to the Sumerians of Mesopotamia (5000BC)

(“Mesopotamia”: from two Greek words meaning “the land between the rivers,” referring to the place between the Tigris and Euphrates rivers)

The area of ancient Mesopotamia established reservoirs and canals to irrigate fields of barley, wheat, and peas. Irrigation began as far back as 6000 B.C. By 5000 B.C. Sumerians constructed complex irrigation networks, which, by 3000 B.C., lead the population of Sumer to increase to nearly 100,000.

The early Sumerian cities held large bazaars, standing armies, judicial courts, organized religious classes, and scribes who developed writing and formal education.

Documented the formation of their government, their taxgathering systems and their conduct of commerce http://orthoscholar.wordpress.com/2011/04/29/notes-on-world-history-ancient-mesopotamia/

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Ancient Egyptians The clearest example of early management thought lies

with the ancient Egyptians (40002000BC) who used managerial skills to build vast pyramids (giving rise to the first real nation state)

100,000 workers

multitude of skills and trades

long timeframe (30 years)

Managers had to plan in advance the type and size of stone required, organise available staff and resources provide leadership and finally, control the process to ensure that the end result matched the original plans.

Egyptians developed managerial skills to organise human labour and found the best way to delegate the multitude of tasks required to complete the undertaking was through hierarchy.

““Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

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Ancient Greeks Greek civilisation (circa 500300BC)

developed:

an army

an administration system

separate courts

Highlighted the need for different management functions

Early Greek philosophers, such as Socrates differentiated between management and other technical functions

provide first written example of the concept that management was a separate specialist skill


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The Roman Empire Romans (c300BC – 300AD) were faced with the

challenge of the management and control of their conquests over a vast area

In order to effectively manage the empire:

delegation of power

the Scalar Principle (Fayol, slide 60) of authority

each person is part of one chain of command that extends from the top to the bottom of the organisation

a system of communication between the outposts and the central command

Ensured Roman Empire could maintain control over regions due to its tight organisation


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Venice End of the Dark Ages commerce began to

flourish in the Mediterranean region

(Dark Ages: 5th15th centuries AD, a period of intellectual darkness in Europe following the collapse of the Roman Empire)

Venetian mercantile businessmen established some of the most important managerial tools of today:

the legal foundations of enterprise

financial records were formalised into doubleentry bookkeeping, first described by Pacioli (1494)

Machiavelli, author of “The Prince” (1532), developed management thought in relation to the political organisation

Prince (or leader) should build a cohesive organisation, binding his allies with rewards and making sure they knew what was expected of them.

http://web.tiscalinet.it/scina/The%20maritime%20republics.htm


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Society - historic Authority was still largely viewed as

resting with traditional institutions Production was part of the social life

within the family, and the labour force composed of farmers and craftsmen

Cosimo (Medici) I the Great, founder of the Grand Duchy of Tuscany

Peasant Family Saying GraceAdriaen van Ostade, 1653


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The Enlightenment

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The Enlightenment & Society

Members of society began to question the existing social order, traditional means of authority were slowly undermined and eventually gave way to new authority structures & beliefs.

Up until the 1700s large organisations were mainly military, political or religious, not industrial

These changes set the stage for the examination of management practices and ways to improve those activities.

a “rational” and “legal” form of legitimacy emerged

those in power are granted their authority by general sets of rules created as part of organized hierarchies

individuals have power over others based on the position or role they hold in an organization not tradition

accession to this role is based on widely known and agreedupon rules and policies, forming a “rational” and “legal" basis for authority.

This gradual shift in the way in which authority is legitimised in society laid the foundation for modern form of capitalism


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The Enlightenment & Production Most skilled work was performed by craft

workers

worked alone

used simple tools/methods

clearly identifiable goods such as watches or clothing

sold directly to individual customers within the locality of the craft worker

During the 1700s, the United States began to focus more explicitly on economics and profitability.

During the 1800s, technological improvements started to minimize the need for agricultural labour and created the basis for a continuous system of manufacturing... the Industrial Revolution


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The Industrial Revolution Industrial Revolution significantly

changed pattern of of industrial activity

Watt's steam engine (1765)

Arkwright's water frame (1769)

Cartwright's power loom (1785)

Transferred skills from the craft worker to the machine.

New machines required only an unskilled worker to insert raw materials and extract the finished good.

Eventually, fully automated machines were developed which no longer required worker input.

Such developments also made possible the establishment of largescale factories which stood in marked contrast to the local nature of craft work....

Watt's steam engine

Arkwright's water frame

Cartwright's power loom


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The modern way...

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Industrial Revolution - impacts

As a result of these advances, productivity began to increase steadily and industry started to feel the benefits of economies of scale (average unit cost of producing an item decreases as the volume of production increases)

Prices fell and consumption rose

Developments in transportation & communication further opened up new markets and promoted social growth.

Industry and commerce boomed

Organisations became increasingly large and complex

new management techniques had to be developed to cope with the challenges and opportunities presented by industrialisation

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The Industrial Revolution & Management Thought

Adam Smith “Wealth of Nations” (1776)

key to profitability lay in the specialisation of labour, whereby workers should be assigned a specific task to complete, ensuring a sharp division of labour

The Industrial Revolution resulted in an upsurge of systematic thought on the key managerial problems presented by industrialisation, namely:

Production

Efficiency

Cost savings


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“Management” EmergesA lasting product of the industrial revolution

Early managers tended operate on trial and error basis

Rapid industrialisation lead to much interest and debate on best management methods

This led to the emergence of management as a formal discipline... distinct from other technical areas

The evolution of management thought since the Industrial Revolution can be divided into:

1) Classical (< 1930s)

2) Modern (> 1930s)

Many approaches were developed simultaneously and have therefore affected one another, but some of the approached were developed as a direct response to some of the weaknesses of earlier approaches

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Management Theories



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000







Systems theory

TQM

Contingency theory


Current and future

issues



Revolution

EarlyPractices

Period Pre-1800s 1800s 1800-1930 1930-1960 1960s 1970-2010





Social:services










Contingency Theory




Complexperson




Role of management


Facilitate employee

development




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Classical Management

The Industrial Revolution

initiated by the inventions and technological improvements of the eighteenth century

led to changes not only in the workplace, but in nature of society as well

End of the 19th century and into the beginning of the 20th

social, economic, political, and technological environment

created the necessary conditions for the systematic assessment of management


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Industrialization Conceptually, industrialization occurs through 2 stages:

1) Development of an industrial infrastructure

Nationwide systems of transportation (initially canals and railroads)

Sources of relatively cheap power (coal & oil)

Technological innovations (steam engine, etc.)

Modern communication systems (the telegraph)

Networks of financial institutions (banks, stock exchange, national currency)

Preparation of the labour force (education & technical training)

2) Creation of a capital goods sector

Machinery and plants that allow mass production of consumer goods & services

Eaton's stores and factories, Toronto"A Primer on Organisational Behavior" (6th Edition), James L Bowditch & Anthony F Buono, Wiley, 2011

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Industrialization Industrialisation: changed the nature of work

from farming and crafts to more complex forms of manufacturing and working with machines

The Classical school of management:

influenced by the wider social, economic, and technological forces that brought about the transition from an agrarian to an industrial society

believed human nature characterized people as rational, economic beings who would act to maximize their own selfinterests

Emerging focus on management dealt with:

1) how these new forms of industrial organization could be structured

2) how work could be delegated and coordinated

3) how people within these organizational structures could be motivated


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Management Theories



Contemporary ApproachesClassical Approaches

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000







Systems theory

TQM

Contingency theory


Current and future

issues

Neoclassical


Revolution

EarlyPractices

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Scientific Management

Concerned with the development of one, single best way of performing a task through the application of scientific methods

Focused the measurement and structure of an organisation's work, its classification, quantification, and rationalization


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Frederick Taylor The birth of scientific management is attributed

to Frederick Taylor (18651917)

Taylor's ideas were developed into two books:

"Shop Management" (1903)

"Principles of Scientific Management" (1911)

Taylor trained in the USA as an engineer. Joined Midvale Steel Company where he rose to rank of chief engineer

Firsthand experience at Midvale lead him to conclude that both productivity and pay were poor, operations were inefficient and wasteful, and relations between workers and management were antagonistic


Frederick Taylor (1865-1917)


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Scientific Management(Taylor)

Since people were viewed as rational, economic beings, it was reasoned that they would act on their own interests (and subsequently the organizations) if they understood “correct” work procedures and were rewarded for following them.

According to Taylor''s principle, the objective of management should be to secure the maximum prosperity for the employer coupled with the maximum prosperity of each employee (Taylor 1947).

Prosperity = not only monetary profit, but also development of each employees to the highest level the he/she was able

To achieve this, Taylor advocated that scientific methods should be used to analyse the one best way, scientifically, to do tasks.


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Taylor - Pig Iron 1898 Taylor employed as a consultant by Bethlehem

Steel Works Company

He applied his principled of scientific management. two processes:

1) handling of pig iron block onto railroad cars

2) shovelling fuel (sand, limestone, coal and iron ore) into blast furnaces.

Pigiron handling was a very physical job and the management at Bethlehem found they could do nothing to induce workers to work faster

Taylor studied the handlers over a period of time concluded with with better, less tiring work methods and frequent breaks, daily output could be quadrupled

Instituted a piecerate system: workers would be paid extra when the produced above a standard level of output. Results were staggering.

Output increased from 12.5 to 47.5 tons, but wages per day increased from $1.15 to $1.88 per day.

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Taylor - Shovelling Shovelling completed by groups of 5060 men

under a single foreman

Time and motion studies were used to establish single best:

way of shovelling

type of shovel used

Result of his study

a toolroom was created

written instructions given which tools were needed for day

Piecerate system was also introduced:

tons shovelled per day increased from 16 to 59

wages increased from $1.15 $1.88


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Taylor's 4 Principles Taylor's experience led him to develop 4 main principles which became the cornerstone of scientific

management:

1) The development of a true science of work

● Each task broken down into basic movements which could be timed to determine one best way of doing the task

2) The scientific selection and development of workers

● Importance of hiring and training the appropriate worker for the job with regard to physical and mental aptitudes

3) The coordination of workers and management in studying the science of work

● Cooperation to ensure the job, plans and principles all matched (standardised tools, instruction cards, etc.)

4) The division or work between management and the workforce

● Workers and those in management should do the tasks for which they were best equipped


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Other adopters Principles of scientific management widely accepted

Henry Ford's “Model T” factory

one of most famous examples


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Henry Gantt Henry Gantt (18611919)

contemporary of Taylor

Every worker should be entitled to a set wage rate with bonus if output was exceeded

This would allow supervisors to spend more time coaching less able workers

Left more room for initiative and discretion

Main contribution is a production scheduling aid referred to as the Gantt chart

a way of plotting work in progress against the calendar

remain the basis for modern scheduling techniques

“Organizing for Work” Henry Gantt (1919)

public domain (free download)

http://www.ganttchart.com/orgforwork.html


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Frank & Lillian Gilbreth Frank (18681924) and wife Lillian Gilbreth

(18781972)

concerned with the elimination of waste in his Boston construction company

tried to eliminate unnecessary hand movements

Lillian Glbreth continued their work

became a pioneering industrial psychologist

her interests lay in human factor and scientific selection, training and development of workers

early pioneer of human resource management

served as a professor of management at Purdue University


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Conclusion Taylor's Scientific management was widely accepted the world over

The piecerate pay system gained wide acceptance due to the link between effort and reward.

Scientific management instilled a sense of cooperation between workers and management

Criticisms:

Link between effort and monetary reward assumes worker motivated solely by money

worker motivation is far more complex: involves jobrelated social and psychological factors which Taylor ignored

By advocating one single best way of completing tasks, work activities frequently became routine and machinelike which led to boredom and apathy among the workforce

Trade unions strongly opposed scientific management techniques

viewed piecerate system as a return to "sweat shop" exploitation of labour and frequently resulted in layoffs

Ignored the role of senior management within the organisation

Failed to deal with the relationship between the organisation and the environment

competition and regulation, especially at senior level of the organisation


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Final word Criticisms aside...

Taylor and scientific management formally established management as a specialist area

introduced scientific analysis to the workplace

provided a framework for solving managerial problems of efficiency and productivity

Taylor (1947) said his aim was a to shift focus from:

the division of the surplus as the allimportant matter

to

increasing the size of the surplus in the first place

(“lumpoflabour” fallacy)


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Management Theories



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000







Systems theory

TQM

Contingency theory


Current and future

issues



Revolution

EarlyPractices

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Structuralist School

The Structuralist school used an inductive approach (see next 2 slides) in its study of organizations

in contrast to the deductive approach taken by the Universalists

Members of this school examined many different organizations to empirically determine the common structural elements that characterized how organizations actually operate


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In logic, 2 distinct methods of reasoning:deductive and inductive approaches

Deductive reasoning works from the "general" to the "specific"

This is also called a "top-down" approach.

Inductive reasoning works from observation(s) toward generalizations and theories

This is also called a “bottom-up” approach.

http://www.personal.kent.edu/~rmuhamma/Algorithms/MyAlgorithms/DeductInduct.htm

Theory

↓

Hypothesis

↓

Observation

↓

Confirmation

Theory

↑

Hypothesis

↑

Pattern

↑

Observation

DETOUR

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ExamplesDeductive vs. Inductive

An example of a deductive argument:

1) All men are mortal

2) Socrates is a man

3) Therefore, Socrates is mortal

The following is an example of probabilistic reasoning, which is a type of weak induction:

90% of humans are right-handed.

Joe is a human.

Therefore, Joe is probably right-handed.

Also,

All of the swans we have seen are white.

All swans are white.

http://en.wikipedia.org/wiki/Inductive_reasoninghttp://en.wikipedia.org/wiki/Deductive_reasoning

DETOUR

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Bureaucracy

Max Weber Max Weber (18641920) German

sociologist

Wrote at turn on century but only translated into English in 1920s

Concentrated on how to structure organisations for success

(whereas Taylor was focused on problems of effectively managing an organisation)

Outlined key elements of an ideal form of structure which he believed would promote efficiency and called it "Bureaucracy"

Max Weber (1864-1920)


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Bureaucracy

6 Main Elements1) Division of Labour

● tasks divided and delegated to specialists to that responsibility and authority were clearly defined

2) Hierarchy

● positions organised in a hierarchy of authority from top to bottom, with authority centralised at the top

3) Selection

● employees recruited on the basis of technical qualifications rather than favouritism

4) Career orientation

● managers were viewed as professionals pursuing careers rather than having ownership in the organisation

5) Formalisation

● organisations was subject to formal rules and procedures in relation to performance

6) Impersonality

● rules and procedures were applied uniformly to all employees


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Bureaucracy

Advantages

Division of labour increased efficiency and expertise due to continued repetition of the task.

Allowed chain of command to develop

Formal selection meant employees hired on merit and expertise and no other criteria would be used

Career orientation ensured career professionals would give the organisation a degree of continuity in operations

Rules and procedures controlled employee performance, increasing efficiency

Impersonality ensured rules were applied across the board without bias


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Bureaucracy

Disadvantages

Extensive rules and procedures can sometimes become ends in themselves

Promotes stability but over time can become very rigid

Rules and procedures are blindly applied to all situations even though they may not be the most appropriate

Delegation of authority can lead to situations where the goals of the work group become more important than organisational goals, adversely affecting organisation in the long run.

Strict division of labour can lead to routine and boring jobs where workers feel apathetic and demotivated.

The extensive rules can lead to the establishment among workers of a minimum acceptable standard as laid down by the rules, above which workers will not go


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Bureaucracy

Conclusion Success of Weber's ideas evidenced throughout the world

ideas gained widespread acceptance as soon as translated in 1920s and 1930s.

Bureaucracy is both rational and efficient

Became extensively used in largescale organisations

allowed such organisations to perform the many routine activities necessary for survival

Is particularly popular for public organisations and civil servicetype organisations

However, organisations need to avoid being controlled by it

Enormous influence (along with Taylor) and is still relevant particularly for organisations operating in a stable environment


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Management Theories



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000







Systems theory

TQM

Contingency theory


Current and future

issues



Revolution

EarlyPractices

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Administrative management Focus on senior management and the policy

issues faced by them

Offer "universal principles of management"

Most important contributor was Henri Fayol (18411925), a French mining engineer

realised that managing an enterprise required a host of skills apart from technical ones.

In 1916 produced Administraion Industrielle et Generale (published in English 1930s “General and Industrial Management”).

Established him as the pioneer of European management in the early 1900s

Fayol commonly known as the "father of modern management"

Henri Fayol (1841-192)


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Business activities – 6 areasFayol

Fayol focused on the problems faced by the senior executive in managing an organisation

Concluded that all business activities could be divided into 6 essential areas:

1) Technical

● production and manufacturing

2) Commercial

● buying, selling and exchange

3) Financial

● funding and using capital

4) Security

● guarding property

5) Accounting

● costing and stock taking

6) Managerial

● planning, organising, controlling““Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

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Fayol believed the 6 groups were interdependent and all needed to be running effectively for the organisation to prosper.

Inclusion of management as a separate business activity with five functions gained Fayol widespread recognition

MANAGERIAL

PlanningOrganisationCommand

Co-ordinationControl

BUSINESS ACTIVITIES

SECURITY

TECHNICAL

ACCOUNTING

FINANCE

COMMERCIALFayol's business activities


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14 basic principles of managementFayol

In addition to the five management functions...


1) Division of labour: divide work into specialised tasks and assign responsibility to individuals

2) Authority: Equal delegation of responsibility and authority

3) Discipline: Establish clear expectations and penalties

4) Unity of command: Each employee should report to one supervisor

5) Unity of direction: Employee efforts should be guided to achieve organisational goals

6) Subordination of individual interest to general: Group interests should not precede the

general interests of the group

7) Remuneration: Equitable rewards for work

8) Scalar chain: Lines of authority and communications from the highest to the lowest level

9) Order: Order tasks and material to support organisation direction

10) Stability of tenure: Minimise turnover to ensure loyalty of personnel

11) Equity: Treat employees fairly

12) Initiative: Employees should have freedom and discretion

13) Esprit de corps: Unity of interest between management and workers

14) Centralisation: Decide the importance of superior and subordinate roles

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Administrative management

Chester Barnard Chester Barnard (18861961)

"The Functions of the Executive" (1938)

Highlighted the importance of:

the mission and purpose of the organisation

hiring specialists having an effective

communications system


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Mary Parker Follet Mary Parker Follet (18681935)

"The Dynamic Administration" (published 1941, after her death)

emphasised the changing situations faced by managers

pointed out all managers want flexibility

distinguished between motivation of individuals and groups


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Lyndall Urwick Lyndall Urwick (18911983)

"Elements of Administration" (1947)

Influenced by the humane management policy he saw while working at "Rowntree" (Quakers)

Emphasised the social responsibility of mangers toward employees

acted as a trail blazer for many of the HR policies we have today

10 principles for good organisation:

focused on responsibility job definition spans of control


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Conclusion Has had an enormous influence on successive generations of managers

Key contributions of administrative management are that it recognised management as a profession much like medicine or law in which people could be trained or developed

Advocates of administrative management offered recommendations based on their personal experience of managing large organisations

They focused on seniorlevel managers and the policy issues faced by them

Finally... offered universal principles of management:

pbelieved to work in all situations.

Main criticism:

universal principles do not take account of variations in the environment, technology or personnel, which may require alternate solutions


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Classical approachesSummary

Various classical approaches to the study of management laid the foundations for the management of organisations that still exist today

The approaches sought to provide managers with skills and techniques to confront the important issues of the time: productivity and efficiency

Focused on basic managerial functions: coordination of work and supervision

Concentrated on the formal aspects of the organisation

In hindsight, some of the approaches take a simplistic view of the needs and interests of workers and fail to address the important issue of the role of the external environment in determining success.

The more modern approaches to the study of management attempt to further these basic concepts and overcome key criticisms....


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School of thought: Proponents: Contribution: Limitations:

Scientific management:1898present day

Taylor, Gantt and the Gilbreths

Application of scientific principles to the study of work through work studies and incentives

Simplistic view of motivation and ignored the role of the external environment

Bureaucracy:1920spresent day

Weber Bureaucratic structure emphasising efficiency and stability

Ignored the human element and the role of the external environment

Administrative management:1916present day

Fayol, Follet, Barnard and Urwick

Universal principles of management for senior executives

Ignored environmental differences

Classical approaches: a summary


Period Pre-1800s 1800s 1800-1930 1930-1960 1960s 1970-2010





Social:services










Contingency Theory




Complexperson




Role of management


Facilitate employee

development




2011/12 68

Management Theories



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000







Systems theory

TQM

Contingency theory


Current and future

issues



Revolution

EarlyPractices

2011/12 69

Taylor's proposed theory of Scientific Management, often met with antagonism and hostility.

Taylor defended his principles on the basis of a “mental revolution” that would (hopefully) take place in the attitudes of management and labour

In essence, Taylor felt that both sides would recognize the need for cooperation and the importance of scientific investigation rather than individual judgement as the basis for structuring work assignments.

Critics, however, argued that while management might seek to standardize skills and methods, it could not expect perfectly standard, emotionless behaviour from its employees.

As early as the 1920s, a number of social critics began to point out the potentially harmful effects of trying to standardize people as well as jobs.

Although many of the basic tenets of Classical management theory (e.g., formal structure, division of labor) were not directly challenged, criticism was focused on those individual managers and theorists who appeared to treat employees as little more than mere appendages to machines


Neoclassical Management

Human relations (behavioural)

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Charlie Chaplin“Modern Times”

1936

A touch of this...

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Human relations (behavioural) Emerged in the 1920s and 1930s from a research study that began as a scientific management

application to determine the impact of working conditions on human performance

ended up discovering the effect of the human factor on productivity

In contrast to previous approaches...

concentrated on the human side of management

sought to understand how psychological and social factors interacted with the work environment in influencing performance

built on the ideas and concepts developed by the previous thinkers, most notably Gantt and the Gilbreths' scientific management


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Recognition that workers had social needs led to new set of assumptions about human nature

social considerations were now seen as the prime motivator of behaviour and work performance (not $$)

social relationships in work would compensate for the loss of intrinsic value and meaning stripped through increasing mechanization

Two main sources of Neoclassical theory:

1) Human Relations School sociologists and social psychologists concerned with interaction and relations within groups

2) Behavioral School psychologists who focused on individual behaviour



Human relations (behavioural)

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Human relations

"The Hawthorne Studies" Harvard researchers: Elton Mayo and

Fritz Roethlisberger

Employed in 1927 by the Western Electric Company to study the effect of physical conditions on worker productivity and efficiency

Western Electric (now AT&T Technologies) manufactured equipment for the telephone industry

19241932 series of studies carried out commonly known as "The Hawthorne Studies"

Chronicled in "Management and the Worker" (1939)

One of the most important watersheds in the evolution of management thought

Hawthorne Works (Tower) - Hawthorne, IL


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Human relations - "The Hawthorne Studies"1) The Illuminating Experiments 1924-7

Experiments conducted in several departments employingfemale workers

Designed to determine how the level of lighting affectedworker output (assumed that better lighting would increaseoutput)

Two groups were isolated

Light levels kept constant in one room

Systematically changed in another

Results showed productivity increase in both groups

Researchers concluded no causeandeffect between illumination and productivity

Increase was caused by fact workers were aware of being observed

Phenomenon was called the Hawthorne Effect whereby workers were more influenced by psychological factors (observation) than physical and logical factors (illumination)


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"The Hawthorne Studies"2) Relay Assembly Room Experiments 1927-32

RATR Experiments designed to study the effects of rest breaks, workday length, refreshments and incentive payments on productivity

Phase I

Six skilled women were selected and placed in a test room without their normal supervisor

An observer was placed in the test room to record observations and to create a friendly relaxed atmosphere

Various changes were introduced with the women's knowledge and consent

Result: output increase


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Human relations - "The Hawthorne Studies"2) Relay Assembly Room Experiments 1927-32

Phase II

Women returned to their original conditions (a 48hour, 6day week no refreshments, no incentives, and no pauses) by withdrawing the concessions... output increased!

Mayo concluded the unintentionally the research team had changed the human relations of the work group under observation.

They found the test room was significantly different to their regular departments in 4 main ways:

1)absence of formal in the test room made more open and friendly and workers enjoyed being the centre of attention

2) test room was less controlled than regular work groups and the women actually participated in decisions affecting the job

3)group formation resulted in a cohesive group which was loyal and cooperative

4) the attitudes of the women were different as they no longer felt part of a large department subject to managerial control but felt involved which affected their job satisfaction


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Human relations - "The Hawthorne Studies"3) The Bank Wiring Observation Room

Experiments 1931-32

The BWOR Experiments involved 14 men who were kept in their naturalwork setting (i.e. nonexperimental) with an observer but with no changesin their working conditions.

The aim of the study was to analyse the behaviour of the work group and how it functioned

Observation & interviewing showed that the group had wellestablished “norms” (rules of behaviour)

Results showed that the men restricted their output

They had their own idea of what constituted a “fair day’s work” and employees who exceeded the agreed daily output were called ‘rate busters’ and those producing below it were called ‘rate chisellers’

“Norms” were enforced by the group through sarcasm and ‘binging’ (group member hit another on the arm to show displeasure)

Group members were united in their opposition to management and were indifferent to the financial incentives offered for higher output.


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Human relations - "The Hawthorne Studies"Conclusion

The important contribution made by the Hawthorne Studies was that:

social needs took precedence over economic needs and that the

‘informal’ organisations existed in addition to the ‘formal’ organisation

informal work group could exert control over employee behaviour & performance

Mayo argued that managers should focus on:

Motivation

Communications

Employee welfare

... to gain the cooperation of the group and promote job satisfaction and norms consistent with the goals of the organisation

In recent years doubt has been cast on the authenticity of a “Hawthorne Effect” with researchers arguing that we have naively taken on board the assumption, when in reality the evidence does not support its existence.

There is no doubt that the Hawthorne Studies played a monumental role in the development of managerial thought by voicing concerns about the role human beings play in the organisation. ““Modern Management" Tiernan, Morely, Foley. 3rd Edition, 2006

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Human relations

Abraham Maslow Another key contributor to the human relations

approach to management was Abraham Maslow.

Maslow (1943) was concerned with the issue of worker motivation and sought to explain how workers could be motivated to achieve higher performance.

Will cover Maslow in “Motivation”lectures


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Neoclassical approachesSummary

Neoclassical perspective argues that there is a dimension of organizational reality that is not contained in the formal, structural orientation of the classical school the behaviour of groups and individuals within the organization.

Insights of the neoclassical doctrine thus added to our understanding of the complexity of organizations

Criticized for not integrating the varied facets of human behaviour that occur in organizations and, like the classical school, for being shortsighted and incomplete

Additionally, its view of relevant environmental forces is quite narrow by today’s standards

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School of thought: Proponents: Contribution: Limitations:

Human relations: 1927present day

Mayo, Roethlisberger and Maslow

Importance of social and psychological factors in influencing work performance

Ignored the role of the formal work group and worker rationality

Neoclassical approaches: a summary


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Management ThoughtLayers beginning to build up in 20th century

19401900s

A lot to come...!

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Next time...

Contemporary Approaches:● Quantitative management● Organisational behaviour

● Systems theory● Contingency theory

● Total Quality Management (TQM)● Organisational culture

● Current and future issues

management theories “classical & neoclassical … thougt.pdfmanagement theories “classical...

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