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2012
O VERVIEW
Review of discussions from Lecture 2 : 09.09.2012 Overview of todays lecture: Discussion on remaining part of the lecture Experience sharing If time permit we shall discuss Human relations Management Theory which is an important aspecvt of Management theory
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W HAT IS M ANAGEMENT ?
Management is the process of designing and maintaining an environment in which individuals, working together in groups, accomplish efficiently selected aims.
Everybody (all managers) carries out managerial functions of planning, organizing, staffing, staffing and leading Applies to all kind of organizations Applies to managers at all levels All managers aim is to create surplus It is concerned with productivity that implies effectiveness and efficiency
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F UNCTIONS
OF
M ANAGEMENT
Staffing
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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The general popularity today of job specialization is undoubtedly due to Smiths view about division of labor.
Division of labor is the breakdown of jobs into narrow, repetitive tasks.
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Industrial Revolution has originated in late-18thcentury Great Britain, and crossed the Atlantic to America by the end of the Civil War. Because of the Industrial Revolution, machine power was rapidly substituted for human power, which made it economical to manufacture goods in factories. With the development of big organizations, a formal theory to guide managers running these organizations efficiently and effectively was needed.
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices
Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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S CIENTIFIC M ANAGEMENT
Frederick Taylor
Frederick Taylor was called as the father of Scientific management. His book The Principles of Scientific management was published in 1911. Immediately, its contents became widely accepted by managers throughout the world.
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B ACKGROUND T IME
OF
T HAT
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Develop a scientific way for each element of an individuals work, which replaces the old rule-ofthumb method. Scientifically select and then train, teach, and develop the worker. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the scientific way that has been developed. Divide work and responsibility almost equally between managers and workers. Managers take over all work for which it is better fitted than the workers.
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach
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14
5. Unity of Direction
6. Subordination of Individual Interests to the 13. Initiative General Interest 14. Esprit de corps 7. Remuneration
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Division of labor Authority hierarchy Formal selection Formal rules and regulations Impersonality
Career orientation
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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Douglas McGregor
Behavior Science
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H AWTHORNE S TUDIES
Time: 1924the early 1930s Place: Hawthorne plant in the Western Electric Company Designer: Western Electric industrial engineers
Elton Mayo and his associates
Mayos Finding:
Behavior and sentiments are closely related. Group influences significantly affect individual behavior. Group standards establish individual worker output. Money is less a factor in determining output than are group standards, group sentiments, and security.
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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T HE Q UANTITATIVE A PPROACH
What are quantitative approaches?
The quantitative approach to management, sometimes referred to as operations research (OR) or management science. It includes applications of statistics, optimization models, information models, and computer simulations, linear programming, and so on, which can be used to solve management problems.
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T HE Q UANTITATIVE A PPROACH
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T HINKING P ROBLEMS
What stimulated the classical approach (scientific management and general administrative theory)?
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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T HE S YSTEMS A PPROACH
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AN
An organization is a system that interacts with and depends upon its environment.
Organizations stakeholders:any group that is affected by organizational decisions and policies. The managers job is to coordinate all stakeholders to achieve the organizations goals.
Organizational survival often depends on successful interactions with the external environment.
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Input
Transformation
Output
Feedback
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T HE
SYSTEMS APPROACH
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Adam smiths contribution to the field of management Industrial revolutions influence on management practices Scientific management General administrative theory The human resources approach The quantitative approach The process approach The systems approach The contingency approach
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Organization size
Routineness of task technology Environmental uncertainty Individual differences
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P RACTICES
Whats the Taylors four principles of management? Whats the 14-principles of management?
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PREVIEW
Taylors Theory of Scientific Management Fayols Administrative Theory Webers Theory of Bureaucracy
The Hawthorne Studies Chester Barnard McGregors Theory X and Theory Y Likerts Systems Theory (Four Systems of Management) Blake and Moutons (Blake and McCanse) Managerial Grid
C LASSICAL VS . H UMANISTIC
Classical theories emphasized coercion, control, and punishment (FOCUS ON TASKS /PRODUCTION).
Maintain predictability and control Decision-making power at top of hierarchy Minimize input from lower-level employees Rely on science and rules to guide behavior Regulate communication to increase predictability and decrease misunderstandings Result:
Workers feel they have no control over their work situation Management does not care about their ideas Feelings and ideas of workers are unimportant
Humanistic theories were developed to promote the CONCERNS of the individual worker in an atmosphere that was too focused on production (FOCUS ON RELATIONAL & MAINTENANCE FUNCTIONS)
P RINCIPLES
OF
H UMAN R ELATIONS
T HEORY
Human relations theory is characterized by a shift in emphasis from TASK to WORKER Go beyond physical contributions to include creative, cognitive, and emotional aspects of workers Based on a more dyadic (two-way) conceptualization of communication. SOCIAL RELATIONSHIPS are at the heart of organizational behavior--effectiveness is contingent on the social well-being of workers Workers communicate opinions, complaints, suggestions, and feelings to increase satisfaction and production Origins (Hawthorne Studies & work of Chester Barnard) Human Relations School of Management - Elton Mayo (Harvard
O RIGINS
OF
Hawthorne Works of Western Electric Company 1924 - Chicago Research focus: Relation of quality and quantity of illumination to efficiency in industry Four Important Studies
T HE H AWTHORNE S TUDIES
The mere practice of observing peoples behavior tends to alter their behavior (Hawthorne Effect)
Relationships between workers and their supervisors are powerful Human interrelationships increase the amount and quality of worker participation in decision making
Demonstrated powerful influence of upward communication Workers were asked for opinions, told they mattered, and positive attitudes toward company increased
Not conducted with the appropriate scientific rigor necessary Too few subjects (N=5) No control groups Subjects replaced with more cooperative participants
T HE E MERGENCE
OF
C OMMUNICATION
Chester Barnard Considered a bridge between classical and human relations theories The Functions of the Executive (1938) Argues for . . . strict lines of communication - classical theory a human-based system of organization The potential of every worker and the centrality of communication to the organizing process Six Issues Relevant to Organizational Communication Formal vs. Informal Organization Cooperation Communication Incentives Authority Zone of Indifference
Formal Organization - a system of consciously coordinated activities or forces of two or more persons. (definite, structured, common purpose)
Persons are able to communicate with one another Willing to contribute action To accomplish a common purpose
Informal Organization - based on myriad interactions that take place throughout an organizations history.
Indefinite
Structure less No definite subdivisions of personnel Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organization
Cooperation
Necessary component of formal organization The expression of the net satisfactions or dissatisfactions experienced or anticipated by each individual in comparison with those experienced or anticipated through alternative opportunities Critical to cooperation The most universal form of human cooperation, and perhaps the most complex, is speech The most likely reason for the success of cooperation and the reason for its failure System of communication: known, formal channels which are as direct (short) as possible, where the complete line of communication is used, the supervisory heads must be competent, the line of communication should not be interrupted, and every communication should be authenticated.
Communication
Incentives
Should be available Not discussed in detail Associated with securing cooperation for organizational members The interrelationship among the originator of the communication, the communication itself, and the receiver Authority of position OVER Authority of Leadership (knowledge & ability). Marks the boundaries of what employees will consider doing without question, based on expectations developed on entering the organization.
Authority
Barnard drew attention away from formal organizational structures toward communication, cooperation, and the informal organization. His work was integrated by other theorists in the human relations movement.
T HEORY X
AND
Articulated basic principles of human relations theory The Human Side of Enterprise (1960, 1985) To understand human behavior, one must discover the theoretical assumptions upon which behavior is based Especially interested in the behavior of managers toward workers Every managerial act rests on assumptions, generalizations, and hypotheses--that is to say, on theory . . . Theory and practice are inseparable. Two Objectives: Predict and control behavior Tap Unrealized potential
Theory X - Classical Theory
T HEORY X
AND
Three Assumptions
The average human being has an inherent dislike of work and will avoid it. Most people must be coerced, controlled, directed, and threatened with punishment The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, wants security.
Physical and mental effort in work is similar to play / rest. External control and the threat of punishment are not the only strategies Commitment to objectives is a function of the rewards associated with their achievement
The average human being learns, under proper conditions, not only to accept but to seek responsibility
The capacity to exercise a high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely distributed in the population Intellectual potentialities of the average human being are underutilized
A more positive perspective of human nature The KEY to control and quality production is commitment to organizational objectives
Cost-reduction sharing for organizational members - sharing the economic gains from improvements in organizational performance Effective participation - a formal means of providing opportunities to every member of the organization to contribute ideas for improving organizational effectiveness.
Must be implemented appropriately Wastes time and undermines managerial power? Magic formula for every organizational problem? CONCERN for RELATIONSHIPS in the organization. As the need to increase commitment grows, so does the need to develop strong, communication-based relationships among organizational members, particularly between supervisor and subordinate.
Difficult to adopt principles of human relations theory -- misapplications and misunderstandings of both classical theory and human relations theory led to Human Resources Theory The key element to Human Relations Theory, participation, was used only to make workers feel as if they were part of the organizational decision-making processes Key to classical and human relations theory is compliance with managerial authority Workers are told that they are important but were not treated as such Major Distinctions between Human Resources and Human Relations Theory
All people (not just managers) are reservoirs of untapped resources - manager responsibility to tap physical and creative resources Many decisions can be made more effectively and efficiently by workers most directly involved with their consequences
Relationship between employee satisfaction and performance - improved satisfaction and morale contribute back to improved decision making and control
Increased satisfaction is related to the improved decision making and self-control that occurs due to participation that is genuinely solicited and heard Two prevalent Human Resources Theories
Management is crticial to all organizational activities and outcomes Continuum that ranges from more classically oriented system to one based on human resources theory Of all the tasks of management, managing the human component is the central and most important task High producing departments and organizations tend toward System IV; low producing units favor System I
System IV - Participative
B LAKE
AND
Stresses interrelationship between production (task) and people Managements main purpose is to promote a culture in the organization that allows for high production at the same time that employees are fostered in their professional and personal development Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59) FOCUS: Mangers Assumptions about CONCERN for PEOPLE and CONCERN for PRODUCTION Concern for PEOPLE
Degree of personal commitment to ones job Trust-based accountability (vs. obedience-based accountability) Self-esteem for the individual Interpersonal relationships with co-workers Use of people and technology to accomplish organizational tasks Concern for is not about quantity or quality
Assessment instrument does not represent personality traits of the manager -instead, indicate a specific orientation to production and people
B LAKE
AND
Authority Compliance (9,1) Classical theory Country Club (1,9) Informal grapevine Impoverished (1,1) Laissez-faire Middle-of-the-Road (5,5) Compromise (carrot & stick) Team (9,9) Human Resources Approach Promote the conditions that integrate creativity, high productivity, and high morale through concerted team action
SUMMARY
The principles of human resources theory attempt to integrate the concern for production from classical theory with the concern for the worker from human relations theory -- more effective and satisfying!