MANAGEMENT Historical Background of Management Ancient Management Egypt (pyramids) and China (Great Wall) Venetians (floating warship

ip assembly lines) Adam Smith Published The Wealth of Nations in 1776 Advocated the division of labor (job specialization) to increase the productivity of workers Industrial Revolution Substituted machine power for human labor Created large organizations in need of management What is Management? All managers work in organizations Organizations collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes COMMON CHARACTERISTICS OF ORGANIZATIONS structure Goal People Resources include people, skills, know-how and experience, machinery, raw materials, computers and IT, patents, financial capital, and loyal customers and employees Managers The people responsible for supervising the use of an organizations resources to meet its goals DEFINITION OF MANAGEMENT According to the management guru Peter Drucker, Organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives Expansion of Definition Weihrich and Koontz: As Managers people carry out the managerial function of Planning Organizing Leading/Directing Controlling

What is Management? An art more than a science General to Particular

Four Functions of Management (Fayol) 1. Planning 2. Organizing 3. Directing/Leading 4. Controlling

EVOLUTION OF MANAGEMENT THOUGHT 1. CLASSICAL APPROACH There are 3 classical approaches to management; 1. Scientific Management 2. Administrative Principles 3. Bureaucratic Organization

All 3 Classical Approaches share a common assumption: People at work act in a rational manner that is primarily driven by economic concerns Workers are expected to rationally consider opportunities made available to them and do whatever necessary to achieve the greatest personal and monetary gain

CENTRALIZING - decisions are primarily made from the top CONTROL - organizations must have a clear, formal chain of command running from the top to the bottom of the organization ORDER - there is a place for everything and all things should be in there place EQUITY - managers should be kind and fair PERSONNEL TENURE - unnecessary turnover is to be avoided, and there should be lifetime employment for good workers INITIATIVE - undertake work with zeal and energy ESPRIT DE CORPS - work to build harmony and cohesion among personnel What can we learn from Fayol? He believed that ... Management can be taught Management can be seen as a variety of activities or actions that can be worked on in order to improve ones managerial skill set Bureaucratic Organization Max Weber developed the idea of the Bureaucracy because he felt that many organizations largely failed to reach their performance potential A BUREAUCRACY is an ideal, intentionally rational, and very efficient form of organization, based on principles of logic, order, and legitimate authority. Characteristics of Bureaucratic Organizations CLEAR DIVISION OF LABOR - jobs are well defined, and workers become highly skilled at their job CLEAR HIERARCHY OF AUTHORITY authority and responsibility are well defined for each position, and each position reports to a higher level FORMAL RULES written guidelines direct behavior and decisions in jobs, and written files are kept for historical record IMPERSONALITY rules and procedures are impartially and uniformly applied, with no special treatment CAREERS BASED ON MERIT workers are selected and promoted on ability and performance

Scientific Management careful selection and training of workers and supervisory support with an emphasis on improving efficiency 4 Action Principals: 1. Develop rules of motion, standardized work implements, and proper working conditions for every job 2. Carefully select workers with the right abilities for the job 3. Carefully train workers and provide proper incentives 4. Support workers by carefully planning their work and removing obstacles Administrative Principles: BOR - specialization of work will result in continuous improvement in skills and methods AUTHORITY - managers and workers need to understand that managers have the right to give orders DISCIPLINE - behavior needs to be grounded in obedience and derived from respect UNITY OF COMMAND - each employee should have one, and only one manager UNITY OF DIRECTION - the leader generates a single plan, and all play their part in executing it SUBORDINATION OF INDIVIDUAL INTERESTS while at work, only work issues should be undertaken or considered REMUNERATION - all should receive fair payment for their work; employees are valuable and not simply an expense

The term bureaucracy is now often used with negative connotations Some possible disadvantages of bureaucracy include: Excessive paperwork or red tape Slowness in handling problems Rigidity in the face of shifting needs Resistance to change Employee apathy (a state of indifference) 2. BEHAVIORAL APPROACH

Group influence plays an important role in the decisions made by individuals The HAWTHORNE EFFECT is the tendency of people who are singled out for special attention to perform as expected merely because of the expectations created by the situation Set the stage for what has now developed into the field of ORGANIZATIONAL BEHAVIOR; the study of individuals and groups in organizations THEORY OF HUMAN NEEDS Physiological needs Safety or security needs Belongingness or social needs; Esteem or status needs Self actualization or self-fulfillment needs. - Maslows theory implies that managers who help people satisfy their important needs at work will achieve productivity

There are 4 behavioral approaches to management; The Hawthorne Studies Maslows Theory of Human Needs McGregors Theory X and Theory Y All 4 Behavioral Approaches share a common assumption; People at work are assumed to seek satisfying social relationships, respond to group pressures and search for personal fulfillment Hawthorne Studies A series of productivity experiments conducted at Western Electric from 1927 to 1932. Experimental findings Productivity unexpectedly increased under imposed adverse working conditions. The effect of incentive plans was less than expected. Research conclusion Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives. Lessons Learned Peoples feelings, attitudes and relations with coworkers affected their work

THEORY X and Y

MATURITY- IMMATURITY THEORY People progress from a stage of immaturity and dependence to a state of maturity and independence. Model I and Model II organization analysis. Model I organization are manipulative Model II organization are open to learning 3. QUANTITATIVE APPROACH It includes the application of statistics, optimization models, information models and computer simulations. More specifically, this approach focuses on achieving organizational effectiveness. Three main branches: Management Science Operations Management and

Management Information Systems. Quantitative Approach Also called operations research or management science Evolved from mathematical and statistical methods developed to solve WWII military logistics and quality control problems Focuses on improving managerial decision making by applying: Statistics, optimization models, information models, and computer simulations 4. MODERN APPROACH TO MANAGEMENT