UBMM1013

MANAGEMENT PRINCIPLES

Topic 2
The Evolution of
Management
 Learning Objectives
0

l Understand how historical forces influence

the practice of management.
l Identify and explain major developments in
the history of management thought.
l Describe the major components of the
classical and humanistic management
perspectives.
l Discuss the management science
perspective and its current use in
 Learning Objectives
0
(contd.)

l Explain the major components of systems

theory, the contingency view, and total
quality management.
l Describe the learning organization and the
changes in structure, empowerment, and
information sharing that managers make to
support it.
l Discuss the technology-driven workplace
and the role of outsourcing, supply chain
management, enterprise resource planning,
 Organization and
Management
Organization is a collection of people working
together in a division of labour to achieve a common
purpose

Management is the attainment of organizational goals

in an effective and efficient manner through four
functions:
•planning
•organizing
•leading
•controlling
 Organization and
Management
l Management philosophies and
organization forms change over
time to meet new needs

l Some ideas and practices from

the past are still relevant and
applicable to management today

lA study of the past contributes to

understanding both the present
and the future
 Forces Influencing
Management and Organisations

2.1 Social Forces Management and

2.2 Political Forces Organisations
2.3 Economic Forces
 Social Forces

2.1 Social Forces – aspects of a culture that guide

and influence relationship among people.
l What do people values?
l What do people need?
l What are the standards of behavior among
people?

l These forces shape the social contract which

refer to the unwritten, common rules and
perceptions about relationships among people
and between employees and management

Social forces Social contract

 Political Forces

2.2 Political Forces - influence of political and

legal institutions on people & organizations

l Political forces include basic assumptions

underlying the political system such as
l the desirability of self-government,
l property rights,
l contract rights,
l The definition of justice
l The determination of innocence or guilt of
a crime
 Economic Forces

2.3 Economic Forces - forces that affect the

availability, production, & distribution of a
society’s resources among competing users

l The new emerging economy is based largely

on ideas, information, and knowledge;
supply chains have been revolutionized by
digital technology

l Management practices and perspectives

vary in response to these social, political,
and economic forces; during hard times,
manager look for ideas to help them cope.
 Forces Influencing
Organizations and Management

2.1 Social Forces Organisation and

2.2 Political Forces Management
2.3 Economic Forces

Management practices and perspectives vary in response

to these social, political, and economic forces; during hard
times, manager look for ideas to help them cope.
Management Perspectives
Over Time
 Classical Perspective

l The classical perspective emerged during the

19th and 20th centuries
l The factory system of the 1800s had challenges:
l tooling plants,
l organizing managerial structure,
l training non-English speaking employees,
l scheduling complex manufacturing and
operations
l dealing with increased labor dissatisfaction
and resulting strikes
l These new problems demanded a new
perspective on coordination and control
 Classical Perspective

l Make organizations efficient operating

machines
l Rational, scientific approach to management
l The overall classical perspective as an
approach to management was very powerful
and gave companies fundamental new skills
for establishing high productivity and
effective treatment of employees
l This perspective contains three subfields:
i. Scientific Management
ii. Bureaucratic Organizations
iii. Administrative Principles
 Classical Perspective

Scientific Bureaucratic Administrative

Management Organizations Principles
 Scientific Management:

A subfield of the classical

management perspective that
emphasized scientifically
determined changes in
management practices as the
solution to improving labour
productivity
 Scientific Management:

known as the father of

l Frederick W. Taylor scientific management

l Henri Gantt

l Frank B and Lilian M. Gilbreath

 Scientific Management:
Taylor 1856-1915

l Frederick W. Taylor – known as the father

of scientific management

l Emphasized scientific changes in

management to improve labor productivity

l Taylor suggested decisions based on rules

of thumb and tradition be replaced with
precise work procedures developed after
study of the situation
 Scientific Management

l Henri Gantt developed the Gantt Chart – a bar

graph that measures planned and completed
work
 Scientific Management

l Frank B and Lilian M. Gilbreath pioneered

time and motion study, which stressed
efficiency and the best way to do a job

l Frank is known for work with brick layers,

but surgeons were able to save countless
lives through the application of the time and
motion study

l Lilian pioneered the field of industrial

psychology and made substantial
contributions to human resource
management
 Bureaucracy Organizations

l Max Weber 1864-1920

l Prior to Bureaucracy Organizations

l European employees were loyal to a single
individual rather than to the organization or its
mission
l Resources used to realize individual desires rather
than organizational goals

l Systematic approach –looked at organization as a

whole

l A subfield of the classical management perspective

that emphasized management on an impersonal,
rational basis through such elements as clearly
defined authority and responsibility, formal record-
keeping and separation of management and
ownership
Characteristic of Weberian Bureaucracy

Division of labor
with Clear definitions of
authority and responsibility

Positions organized
Personnel are selected in a hierarchy of authority
and promoted based
on technical
qualifications

THE IDEAL
BUREAUCRACY

Managers subject to
Administrative acts Rules and procedures
and decisions recorded that will ensure reliable
in writing Management separate predictable behavior
from the ownership
of the organization
 Administrative Principles

l Contributors: Henri Fayol, Mary Parker, and

Chester I. Barnard

l Focus:
l A subfield of the classical management
perspective that focuses on the total
organization rather than the individual
worker, delineating the management
functions of planning, organizing,
commanding, coordinating and
controlling.
Henri Fayol 1841-1925

14 General Principles of Management

Division of labor x Centralization

Authority x Scalar chain
Discipline x Order
Unity of
x Equity
command
Unity of direction
x Stability and
tenure of staff
Subordination of
x Initiative
individual interest
x Esprit de
Remuneration
corps
Mary Parker Follett 1868-
1933
l Importance of common super-ordinate goals
for reducing conflict in organizations
l Popular with businesspeople of her day
l Overlooked by management scholars
l Contrast to scientific management
l Reemerging as applicable in dealing with
rapid change in global environment

l Leadership – importance of people vs.

engineering techniques
 Chester Barnard 1886-
1961

Informal Acceptance
Organization Theory of
Authority
 Chester Barnard 1886-
1961

Informal Organization
l Cliques
l Naturally occurring social groupings
l Argued that organizations are not
machines and informal relationship
are powerful forces that can help the
organization if properly managed
 Chester Barnard 1886-
1961

Acceptance Theory of Authority

l Free will
l Can choose to follow management
orders and acceptance can be critical
to success
Management Perspectives
Over Time
 Humanistic Perspective

l A management perspective that emerged around

the late 19th century

l Emphasized understanding human behavior,

needs, and attitudes in the workplace

l Mary Parker Follett and Chest Barnard advocated

a more humanistic perspective on management
that emphasized:

lImportance of understanding human

behaviors
lNeeds and attitudes in the workplace
lSocial interactions and group processes
 Humanistic Perspective

The Human The Human The

Relations Resources Behavioral
Movement Perspective Sciences
Approach
Human Relations Movement

lTruly effective control comes from within the

individual worker rather than from strict,
authoritarian control

lEmphasized satisfaction of employees’ basic

needs as the key to increased worker
productivity
 Human Relations Movement

Hawthorne Studies

l Started in 1895
l Four experimental& three control groups
l Five different tests
l Test pointed to factors other than
illumination for productivity
l 1st Relay Assembly Test Room experiment,
was controversial, test lasted 6 years
l Interpretation, money not cause of
increased output
l Factor that increased output, Human
Relations
Human Resource Perspective
lSuggests jobs should be designed to meet higher-level
needs by allowing workers to use their full potential
lThe human resources perspective combines
prescription for design of job tasks with theories of
motivation
l2 best known contributors:

Abraham Maslow Douglas McGregor

(1906-1970) ( 1906- 1964)
 Abraham Maslow’s Hierarchy of Needs
1908-1970

Abraham Maslow
(1906-1970), a
psychologist, Self-
suggested a actualization
hierarchy of needs
because he Esteem
observed that
Belongingness
problems usually
stemmed an inability Safety
to satisfy needs
Physiological

Based on needs satisfaction

 Douglas McGregor Theory X
& Y 1906-1964
Theory X Assumptions
l Dislike work –will avoid it
l Must be coerced,
controlled, directed, or
threatened with
punishment
l Prefer direction, avoid
Theory Y Assumptions
l Do not dislike work
l Self direction and
self control
l Seek responsibility
l Imagination,
creativity widely
 Behavioral Sciences
Approach
l Applies social science in an organizational
context

l Draws from economics, psychology, sociology,

anthropology, and other disciplines

l Understand employee behavior and interaction

in an organizational setting
l One set of management techniques based in
the behavioral sciences approach is OD –
Organization Development

l Other concepts that grew out of the Behavioral

Sciences Approach include matrix organizations,
self-managed teams, and ideas about corporate
 Management Science
Perspective
l Emerged after WW II
l Applied mathematics, statistics, and
other quantitative techniques to
managerial problems

Operations Operations Information

Research Management Technology
 Operations Research

Operations Research

l It consist of mathematical model building and

other applications of quantitative techniques to
managerial problems
 Operations Management

Operations Management

l specializes in physical production of goods or

services using quantitative techniques to solve
manufacturing problems

l e.g. forecasting, inventory modeling, linear and

nonlinear programming, queuing theory,
scheduling, simulation and break-even analysis
 Information Technology

Information Technology

l reflected in management information systems

l These are designed to provide relevant

information to managers in a timely and cost-
efficient manner

l e.g. intranet, extranet, software programs.

Management Perspectives
Over Time

Recent Historical
Trends
 System Theory

Systems View of Organizations

 System Theory
l A system theory is a set of interrelated parts that
function as a whole to achieve a common
purpose.
l A system functions by acquiring inputs from the
external environment, transforming them in
some way and discharging outputs back to the
environment.
l Components of system theory include:
l Inputs
l Transformation Process
l Outputs
l Feedback
l Environment
 System Theory

Five components in System Theory:

a) Inputs
l Inputs are the material, human, financial or
information resources used to produce goods
and services.
b) Transformation process
l The transformation process is management’s
use of production technology to change the
inputs into outputs.
c) Outputs
l Outputs include the organization’s products and
services.
 System Theory

Five components in System Theory:

d) Feedback
l Feedback is knowledge of the results that
influence the selection of inputs during the next
cycle of the process.
e) Environment
l The environment surrounding the organization
includes the social, political and economic
forces.
 Contingency View of
Management

Successful resolution of organizational problems is

thought to depend on managers’ identification of key
variations in the situation at hand
 Total Quality Management
(TQM)
l A concept that focuses on managing the total organisation
to deliver quality to customers

l The approach infuses quality values throughout every

activity, with front-line workers intimately involved in the
process

l 4 significant elements of TQM are:

l Employment involvement – requires company-wide
participation in quality control.
l Focus on customer – find out what customer wants.
l Benchmarking – a process whereby companies find out
how others do something better and imitate or improve
it.
l Continuous improvement – the implementation of small,
The Learning Organization

l In the learning organization, everyone

l identifies and solves problems
l enabling continuous experiment
l change, and
l Improvement

l Thus increasing its capacity to grow, learn and

achieve its purpose

l The essential idea is problem solving, as

opposed to efficiency,

l e.g. understanding customer needs

 Elements of a Learning
Organization
Team-Based Structure

Learning
Organization
Empowered Open
Employees Information
 0

The Technology-Driven
Types of E-Commerce
Workplace
Business-to-Consumer (B2C)
Selling Products and
Services Online

Consumer-to-Consumer
Business-to-Business (B2B) (C2C)
Electronic transactions Electronic Markets
Between Organizations Created by Web-Based
Intermediaries
Thank You