Dr.

Kakoli Sen

Historical perspective
Classical approaches (1890 1930)
1. Systematic 2. 3. 4. 5.
Contemporary approaches (1940 2000+) Quantitative Management 2. Organizational Behavior 3. Systems Theory 4. Contingency theory
1.

Management Scientific Management Bureaucracy Administrative Management Human Relations

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The story of Henry Ford

Son of a poor Irish immigrant, Henry Ford was born in 1863

and grew up on a farm in rural Michigan Fascinated with machinery, could repair and improvise any machine. Started the Ford Motor Company in 1903. Cars were status symbols, Ford wanted to change that. Focused on high volume and low costs. Emphasized on efficiency, mechanization and breaking down jobs into smallest components. First model took 12.5 hours to roll off. In 1920, Ford was producing one model every minute. By 1925, a Ford car was rolling off every 5 seconds. This was happening due to the Assembly Line Production system introduced.
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The story of Henry Ford Contd

Facing problems of attrition due to pressure of more at

work, Ford doubled the wages to motivate people to work extra hard. When Henry Ford died in 1945, Ford was worth $600 million. He was the father of mass production and development of modern management theories. Ford was criticized for offering price as the only attractive option whereas General Motors offered plenty of choice such as Buick, Oldsmobile, Pontiac, Cadillac , Chevrolet etc. each car was distinctive and had price differential. However because of work efficiency, Ford was able to continually reduce its price, from $780 to $360 and was the highest selling car around World War 1.
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Scientific Management School

Between 1890 1930, Main studies by 1. F.W.Taylor, 2. Henry Gantt, 3. Frank and Lilian Gilbreth F.W.Taylor (1856- 1915) suggested that
1. 2.

3.
4.

there should be a best method for performing each task, each worker should be responsible for his own part of the work, there should be education and growth for worker and there should be friendly relation between management and labour

Time and Motion studies conducted to identify best method of work Introduced scientific methods of work efficiency and the concept of differential rate system / Piecemeal system Criticised for emphasis on productivity and profitability
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Henry Gantt 1861- 1919

Accomplice of Taylor, but rejected his idea of differential

rate system and suggested the idea of incentives for additional work. Each worker who finished his day load of work was given 50 cent as incentive, and the supervisor would earn bonus for each such worker. Each workers progress was displayed publicly in black, red etc. Originator of Gantt Chart, used for production processes. This also formed the basis of 2 more production charting devices such as CPM (by Du Pont) and PERT (by Navy)

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Frank and Lilian Gilbreth ( 1868-1972)

Collaborated on Time and Motion Studies further Recorded each action being made for a work and aimed at

reducing actions for helping workers reach full potential. Each action was called Therblig Argued that motion studies would increase morale as it demonstrated management concern for the worker.

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Classical Organisational Theory Schools

Administrative, Bureaucracy, Human Relations

Schools of thought. Main proponents

1.
2. 3. 4.

Henry Fayol Max Weber Mary Parker Follett Chester Barnard

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Administrative Theory
Henry Fayol (1841 -1925) suggested 14 principles of management such as

Division of Labour 2. Authority 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of individual interest to the common good 7. Remuneration
1.
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8. Centralisation 9. Hierarchy 10. Order 11. Equity

12. Stability of Staff

13. Initiative 14. Esprit De Corps

Max Weber, Mary Parker and Chester Barnard

Weber (German sociologist) suggested that goal oriented

big organisations should carefully regulate their activities through formal and hierarchical structures. Mary Parker suggested that management is the art of getting things done by others possible only by sharing a common purpose in a good organisational environment (both internal and external) Barnard proposed that people come to organisations to both pursue organisational as well as individual goals and that an organisation will work efficiently only if there is a balance between the two.
Suggested that managers must understand the employees

zone of indifference
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Human Relations School

Hawthorne Experiments conducted in Hawthorne plant of

GE during 1924-1933 by Professor Elton Mayo and team from Harvard University A series of experiments on test group and control group were conducted with changes in lighting etc. Results changed the idea of rational man to social man Theories on behavioral approaches like Maslows need hierarchy, Alderfers ERG theory, McGregors theory X & Y etc were developed.

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Classical Management theories A summary

Scientific Management theories improving the

productivity and efficiency of manual workers - Started with Adam Smith Wealth of Nations (1776) Division of Labour (F.W.Taylor, Gilbreths, Gantt) General administrative theories overall organization and how to make it more effective (Henri Fayol & Max Weber) Human Behavior Focus on people side of management (Robert Owen, Mary Parker Fowlett, Mayo etc.) Quantitative methods improvement through applying quantitative models (used for decision making, Forecasting, HR Accounting etc.)

Management Science School

Developed by Great Britain during the World War II.

With survival at stake, GB made its first OR team of

mathematicians, physicists, scientists and others to develop technical and mathematical solutions to combat US forces, also used early computers to perform multiple calculations Post the WWII, with the advancement of technology and computers, it helped in project management, inventory management, forecasting etc.

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Systems Approach

Projects organizations as a set of subsystems with different

objectives Key concepts : Subsystem Synergy Open and Closed Systems Flow (Information, money, material etc.) Feedback

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Contingency Approach
Contingency Approach developed by managers,

consultants and researchers Proposed that the managers task is to identify which technique, which situation, what time will suit best Dynamic engagement implies continuous change, growth, activity and engagement 6 different themes have emerged such as New Organisational Environments, Ethics and CSR, Globalisation, Re-engineering, Multiculturism and Quality Management

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Recent Contributors to Management Thought

Peter F. Drucker -Management thinker & writer (Known for concepts such as MBO/MBR (Participative Goalsetting), Knowledge Worker, Blue Collar Worker, Outsourcing, Non Profit Organisations) Edwards Deming (Quality principles) Peter Laurence (promotion to incompetence) William Ouchi (z theory)

Demings 14 Principles

Create constancy of purpose for improving products and services. Adopt the new philosophy. Cease dependence on inspection to achieve quality. End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier. Improve constantly and forever every process for planning, production and service. Institute training on the job. Adopt and institute leadership. Drive out fear. Break down barriers between staff areas. Eliminate slogans, exhortations and targets for the workforce. Eliminate numerical quotas for the workforce and numerical goals for management. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system. Institute a vigorous program of education and self-improvement for everyone. Put everybody in the company to work accomplishing the transformation.

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Characteristics of Excellent and Most Admired Companies (Peters & Waterman)

Oriented toward action

Learned about the needs of their customers

Promoted managerial autonomy and entrepreneurship Achieved productivity by paying close attention to the needs of their people Were driven by a company philosophy often based on the values of their leaders Focused on the business they knew best Had a simple organization structure with a lean staff Were centralized as well as decentralized, depending on appropriateness

Schools of Management Thought

School Scientific Management School Classical Organisational Theory Thought Sought to determine scientifically the best methods for performing a task, selecting, training and motivating workers To identify the principles and skills for effective management

Behavioral School

Management scholars with background in Sociology and Psychology proposed more effective ways to manage people
Approaching management problems by using mathematical techniques for modeling, analysis and solution

Management Science School

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Recent management thoughts

School Systems Approach Contingency Approach Thought Views organisation as a unified, directed system of inter-related parts Also called the situational approach, believes that the way of goal attainment may vary according to the situation. Believes that time and human relationships are forcing management to rethink traditional approaches to face rapid changes.

Dynamic Engagement Approach

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