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Management Yesterday and Today

? 2007 Prentice Hall, Inc. All rights reserved. . 2?2. Historical Background of Management. Ancient ManagementEgypt (pyramids) and China (Great Wall)Venetians (floating warship assembly lines)Adam SmithPublished ?The Wealth of Nations" in 1776Advocated the division of labor (job specialization)

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Management Yesterday and Today

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    1. © 2007 Prentice Hall, Inc. All rights reserved. Management Yesterday and Today Chapter 2

    2. © 2007 Prentice Hall, Inc. All rights reserved. 2–2 Historical Background of Management Ancient Management Egypt (pyramids) and China (Great Wall) Venetians (floating warship 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

    3. © 2007 Prentice Hall, Inc. All rights reserved. 2–3 Modern Organizations The industrial revolution. Big organizations have begun to emerge in late 19th century. The invention of steam engine and power converted society and worklife. Mass production & consumption needs . Formation of big cities. Coordination of labor.

    4. © 2007 Prentice Hall, Inc. All rights reserved. 2–4 Major Approaches to Management Scientific Management General Administrative Theory Quantitative Management Organizational Behavior Systems Approach Contingency Approach

    5. © 2007 Prentice Hall, Inc. All rights reserved. 2–5 Classical & Neoclassical Theories of Management CLASSICAL Scientific Management School-Taylor Administrative School-Fayol Bureaucratic School-Weber NEOCLASSICAL Behavioral School – Mayo, Barnard, Follet

    6. © 2007 Prentice Hall, Inc. All rights reserved. 2–6 Scientific Management School F.W.Taylor (founder) Focused on how to manage the work by using scientific methodology in the book named “principles of scientific management” which was published in 1911. Henry Gantt, Frank and Lilian Gilbert were the followers of Taylor. How to increase work performance??

    7. © 2007 Prentice Hall, Inc. All rights reserved. 2–7 TAYLORISM – An Exercise Assume that you are an entrepreneur who is trying to enter office furnitures production sector. You will organize your production with a certain amount of capital. You decide to produce chairs.

    8. © 2007 Prentice Hall, Inc. All rights reserved. 2–8 TAYLORISM – An Exercise

    9. © 2007 Prentice Hall, Inc. All rights reserved. 2–9 ANSWER: Job Simplification It is possible to teach an ordinary worker not the whole but a piece of the job within a small amount of time.

    10. © 2007 Prentice Hall, Inc. All rights reserved. 2–10 Exhibit 2–2 Taylor’s Four Principles of Management

    11. © 2007 Prentice Hall, Inc. All rights reserved. 2–11 Scientific Management (cont’d) Frank and Lillian Gilbreth Focused on increasing worker productivity through the reduction of wasted motion Developed the microchronometer to time worker motions and optimize work performance How Do Today’s Managers Use Scientific Management? Use time and motion studies to increase productivity Hire the best qualified employees Design incentive systems based on output

    12. © 2007 Prentice Hall, Inc. All rights reserved. 2–12 Henri Fayol (Administrative Theory) He was the representative of scientific management in Europe. A book named “General & Industrial Management” was published in 1916. Functions of management. 14 principles of management (unity of direction, unity of command)

    13. © 2007 Prentice Hall, Inc. All rights reserved. 2–13 Exhibit 2–3 Fayol’s 14 Principles of Management

    14. © 2007 Prentice Hall, Inc. All rights reserved. 2–14 Max Weber (Theory of Bureaucracy) Laws which govern the behaviors of the individuals in the organization. Rational form of the authority. Existence of an office hierarchy in the organization. Written communication. Recruitment according to specialization.

    15. © 2007 Prentice Hall, Inc. All rights reserved. 2–15 Exhibit 2–4 Weber’s Ideal Bureaucracy

    16. © 2007 Prentice Hall, Inc. All rights reserved. 2–16 BEHAVIORAL SCHOOL (Hawthorne Studies) Social aspect of organizational life was not a subject of classical theories of management. Elton Mayo from Harvard University conducted a research activity in Hawthorne Electric Plant in 1924 to research effect of physical conditions on productivity.

    17. © 2007 Prentice Hall, Inc. All rights reserved. 2–17 HAWTHORNE STUDIES Research activities had been conducted between 1924-1930. Researchers tested the effects of; Lightning Heating Job breaks Physical arrangements; on productivity, But, they could not found any relation between.

    18. © 2007 Prentice Hall, Inc. All rights reserved. 2–18 HAWTHORNE STUDIES It was determined that, social factors have an important effect on performance. Performance levels increased after the interviews with the managers. Hawthorne Effect: People under observation change their behaviors according to the situation. Hawthorne studies were a milestone for behavioral approaches in management.

    19. © 2007 Prentice Hall, Inc. All rights reserved. 2–19 Understanding Organizational Behavior Organizational Behavior (OB) The study of the actions of people at work; people are the most important asset of an organization Early OB Advocates Robert Owen Hugo Munsterberg Mary Parker Follett Chester Barnard

    20. © 2007 Prentice Hall, Inc. All rights reserved. 2–20 Quantitative Approach to Management 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

    21. © 2007 Prentice Hall, Inc. All rights reserved. 2–21 The Systems Approach System Defined A set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Basic Types of Systems Closed systems Are not influenced by and do not interact with their environment (all system input and output is internal). Open systems Dynamically interact to their environments by taking in inputs and transforming them into outputs that are distributed into their environments.

    22. © 2007 Prentice Hall, Inc. All rights reserved. 2–22 Exhibit 2–6 The Organization as an Open System

    23. © 2007 Prentice Hall, Inc. All rights reserved. 2–23 Implications of the Systems Approach Coordination of the organization’s parts is essential for proper functioning of the entire organization. Decisions and actions taken in one area of the organization will have an effect in other areas of the organization. Organizations are not self-contained and, therefore, must adapt to changes in their external environment.

    24. © 2007 Prentice Hall, Inc. All rights reserved. 2–24 The Contingency Approach Contingency Approach Defined Also sometimes called the situational approach. There is no one universally applicable set of management principles (rules) by which to manage organizations. Organizations are individually different, face different situations (contingency variables), and require different ways of managing.

    25. © 2007 Prentice Hall, Inc. All rights reserved. 2–25

    26. © 2007 Prentice Hall, Inc. All rights reserved. 2–26 Current Trends and Issues Globalization Ethics Workforce Diversity Entrepreneurship E-business Knowledge Management Learning Organizations Quality Management

    27. © 2007 Prentice Hall, Inc. All rights reserved. 2–27 Current Trends and Issues (cont’d) Globalization Management in international organizations Political and cultural challenges of operating in a global market Working with people from different cultures Coping with anticapitalist backlash Movement of jobs to countries with low-cost labor Ethics Increased emphasis on ethics education in college curriculums Increased creation and use of codes of ethics by businesses

    28. © 2007 Prentice Hall, Inc. All rights reserved. 2–28 Exhibit 2–8 A Process for Addressing Ethical Dilemmas

    29. © 2007 Prentice Hall, Inc. All rights reserved. 2–29 Current Trends and Issues (cont’d) Workforce Diversity Increasing heterogeneity in the workforce More gender, minority, ethnic, and other forms of diversity in employees Aging workforce Older employees who work longer and do not retire The increased costs of public and private benefits for older workers An increasing demand for products and services related to aging.

    30. © 2007 Prentice Hall, Inc. All rights reserved. 2–30 Current Trends and Issues (cont’d) Entrepreneurship Defined The process of starting new businesses, generally in response to opportunities. Entrepreneurship process Pursuit of opportunities Innovation in products, services, or business methods Desire for continual growth of the organization

    31. © 2007 Prentice Hall, Inc. All rights reserved. 2–31 Current Trends and Issues (cont’d) E-Business (Electronic Business) The work preformed by an organization using electronic linkages to its key constituencies E-commerce: the sales and marketing aspect of an e-business Categories of E-Businesses E-business enhanced organization E-business enabled organization Total e-business organization

    32. © 2007 Prentice Hall, Inc. All rights reserved. 2–32 Exhibit 2–9 Categories of E-Business Involvement

    33. © 2007 Prentice Hall, Inc. All rights reserved. 2–33 Current Trends and Issues (cont’d) Learning Organization An organization that has developed the capacity to continuously learn, adapt, and change. Knowledge Management The cultivation of a learning culture where organizational members systematically gather and share knowledge with others in order to achieve better performance.

    34. © 2007 Prentice Hall, Inc. All rights reserved. 2–34 Exhibit 2–10 Learning Organization versus Traditional Organization

    35. © 2007 Prentice Hall, Inc. All rights reserved. 2–35 Current Trends and Issues (cont’d) Quality Management A philosophy of management driven by continual improvement in the quality of work processes and responding to customer needs and expectations Inspired by the total quality management (TQM) ideas of Deming and Juran Quality is not directly related to cost Poor quality results in lower productivity

    36. © 2007 Prentice Hall, Inc. All rights reserved. 2–36 Exhibit 2–11 What is Quality Management?

    37. © 2007 Prentice Hall, Inc. All rights reserved. 2–37 Terms to Know division of labor (or job specialization) Industrial Revolution scientific management therbligs general administrative theory principles of management bureaucracy quantitative approach organizational behavior (OB) Hawthorne Studies system closed systems open systems contingency approach workforce diversity entrepreneurship e-business (electronic business) e-commerce (electronic commerce) intranet learning organization knowledge management quality management

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