Lecture 2, Unit 2, Week 2 Evolution of Management Thinking – Part 1 By: Dr. Obi Berko School of Management, University

1. Lecture 2, Unit 2, Week 2 Evolution of Management Thinking – Part 1 By: Dr. Obi Berko School of Management, University of Ghana

2. Lecture Outline Recap of the last lecture Management thinking Classical management Behavioral approach

3. Racal from Previous Lecture The commercial application and/or the usage of the term management started from the industrial revolution in the 16 & 17

4. Activity 1 What led to the introduction of management at the industrial revolution?

5. Implication of the Challenges from the Factory System led to the need for: role specification, careful selection, labour control and Improved welfare of the employees

6. Addressing the Factory Challenges 1) The call for factory consultants, industry experts and researchers to make recommendations and/or suggestions with regard to best practices to merchants 2) Hence the evaluation of management thinking

7. What is a Management Thinking? The “management thinking” implies management: Perspective philosophy, theory, school of thought, Assumption Hypothesis Postulation Conjecture

8. The Meaning of a theory, philosophy, perspective, etc • A thinking and/or theory is: a plan or scheme existing in the mind only, but based on principles verifiable by experiment or observation • Management theory, perspective therefore is the set of propositions (body of knowledge) stemming from a definable field of study which can be termed a science

9. Function of Theory 1) Makes prescription for practice – Just like the relationship between a doctor and a patient; 2)So whereas management theories act as prescriptions what managers actually do are termed as description

10. Function of a theory Cont.’ 3) theory claims to offer a best way of managing the behaviourof organizations in an efficient and effective manner

11. Evolution of Management Thinking Classical Approaches Systematic management (1890 – 1900) Scientific management (1900) Bureaucracy (1905) Administrative management (1910 – 1920) Human relations (1920) Quantitative management (1930 - 1940) Organizational behaviour (1940)

12. Contemporary Approaches 8) Systems theory (1945) 9) Contingency theory (1950 – 1960) 10) Current and future revolutionary (1965)

13. The Classical Perspective The classical perspective places an emphasis on managing organizations and work patterns more efficiently. It comprises three distinct approaches: • Scientific management, • Bureaucratic management, and • Administrative management.

14. 1) Scientific Management Scientific management asserts that the scientific assessment of work practices and methods can increase the efficiency of the workforce. Frederick Winslow Taylor (1856 – 1915), often known as the father of scientific management, had observed a phenomenon he called soldiering.

15. The four principles of scientific management • 1)Scientifically study each part of a task and developed the best method (including tools) for performing the task. • 2) Carefully select workers and train them to perform the task by using a scientifically-developed method. So scientific selection and training

16. Four Principles Cont.’ • 4) Divide the work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.

17. Activity 2 Could there by any criticisms against the scientific management philosophy if yes what are they?

18. 2) Bureaucratic Management Bureaucratic management is the branch of the classical perspective that emphasis the need for organizations to behave in a strict and well-ordered manner. Max Weber (1864 – 1920) is credited with developing the concept of bureaucracy in which an organization has clearly-defined roles and responsibilities, specialized tasks and functions, and promotion is based on seniority and achievement. Fundamental to the concept of bureaucratic management is the notion of job for life.

19. Weber’sIdeal-typeBureaucracy characteristics: • Specialization hierarchy Each area has a clearly-defined set of competencies, these are underpinned by a rigid series of super and subordinate relationships and found on the supervision of the lower ranks by the higher ones. • Impersonality Everyone is subject to a formal equity. Policies, procedures, rules and regulations are meted out uniformly and applied uniformly, regardless of individual considerations.

20. Rules • The organization establishes general rules which are to a greater or lesser degree stable and to greater or lesser degree comprehensive. Rules dictate those behaviors required from those within the organization. • Appointed officials • Selection and promotion are based on technical qualifications and on performance.

21. Specialization of labour • Jobs and tasks are broken down into well-defined routines such that employees become extremely competent in their particular task.

22. 3) Administrative Management Administrative management is by Henri Fayol(1841 – 1925), a French industrialist. These are based on 14 principles:

23. Activity 3 What are the possible limitations of the Bureaucratic management philosophy?

24. Administrative Management Henry Fayol 1841-1925 Efficient firm is based on 14 management principles

25. 1) Division of work – efficiencies can be achieved by the specialization of work practices from both technical and managerial perspectives, however, there are limits to the amount of work that can be divided up.

26. 2) Authority– there is a need for a system in which a person or people can direct the work of others and retain responsibility. These people gain authority based on qualifications and experience and use these power bases to give the orders that create obedience. 3) Discipline– if an organization is to be efficient it must be tightly controlled. Discipline is vital, albeit the manifestation of discipline is dependent on the organization's leaders.

27. 4) Unity in command – clear lines of responsibility requires that a person of lower rank should only receive orders from one person of senior rank. 5) Unity in direction – organizational success depends on being able to align all activities. There should be one leader and one plan which all should follow.

28. 6) Centralization– the degree to which an organization is centralized or decentralized will depend on the functions of that organization, but the structure should be devised to allow people to contribute to the best of their abilities. 7) Scalar chain – a linear hierarchy of authority should define the communication path through the organization. It should extend from the top of the organization to the bottom. Horizontal communication is permissible as long as managers are kept informed.

29. 8) Subordination of individual interest to general interest – the goals of organization are paramount and should not be influenced by the goals of one person or group. 9) Remuneration– pay should be fair to both the staff and the employers.

30. 10) Order – this denotes good management practice, everything has its place and everything in its place. It also relates to the environment being conclusive to the activities taking place there. 11) Equity – all staff should be treated with a high and equitable level of kindness and patience. 12) Stability of personal tenure – task specialization takes an investment in training from the organization. High staff turnover therefore has larger resource implications. Turnover should therefore be kept at a minimum.

31. 13) Initiative – subordinate initiative should be encouraged and developed as far as is practicable. 14) Esprit de corps– harmony, strength and a cohesive corporate culture will foster organizational success.

32. Activity 4 Considering each of the administrative principles of organisation, what challenges to these principles can you indentify in modern methods of working?

33. Classical writers thought of organisations in terms of purpose & formal structure • Assumes all organizations require the same rational management process. • Emphasis was placed on the planning of work, technical requirements of the organisation, principles of management,

34. A clear understanding of the purpose of the organisation was essential to understand how the organisation works and how its working methods can be improved • Concerned with improving organisation structure as a means of increasing efficiency – span of control, division of work, etc.

35. Criticisms of the classical approach • Insufficient account taken of personality factors • Creates organisational structures where people can exercise only limited control over their work environment • Out-of-date approach

36. Activity 5 Try to provide a definition of ‘organisation’ and then describe what an organisation ‘looks like’. To what extent have your ideas been informed by principles of bureaucracy and classical management?

37. Activity 6 In the light of customer service characteristics of most Banks today (SC, Ecobank, etc.) example the use of teller machines and the delivery mechanisms of most fast food joints in the in Osu, Spinters Road and in western countries (e.g.McDonalds) can you say or agree with the assertion that a) Scientific management has come to stay with society? b ) Where and how have you experienced it?

38. Opposing Perspectives Though the approach sought to address the excesses of an arbitrary pattern of management it nonetheless incorporated an extremely negative view of human nature that was common at the time, one of the main elements being the idea of workers as simply parts in the much greater machine. So other opposing perspectives emerged.

39. 1) Human relations approach • Is based on the consideration of the social factors at work and the behaviour of employees within an organisation • Particular importance is paid to the informal organisation and the satisfaction of individuals’ needs through groups at work • Hawthorne experiments acted as a turning point in the development of the Human Relations movement

40. The Hawthorn experiments Possibly the most well-known events of the behaviourist period was that of the Hawthorn experiments. Headed by Elton mayo (1880 – 1974), a group of researchers from the Harvard University undertook a series of experiments at the western electricity company. The hawthorn experiments involved dividing employees into two groups, a test group and a control group.

41. Purpose 1) To establish one’ best level of lighting to be used in the factory. 2) Two groups had been established, as control group and an experimental group. The latter was subject to changes in lighting intensity whilst the control group continued to work in conditions that remained constant. It was expected that as the lighting conditions of the experiment group altered, so too would their levels of productivity

42. Results 1) Engineers saw productions continue to rise, only falling when the lighting was made so bad as to make work impossible. 2) Even more confusing, the output in the control group also increased despite no changes taking place in the levels of lighting.

43. Results Cont.’ 3) As a result of this a research group from Harvard was brought in to the factory to look into these strange result. 4) Over the next few years a series of experiments was conducted in which workers were subjected to changes in working hours, pay levels and rest periods.

44. Results: Researchers involved in the experiment concluded that it was not the changes in working conditions that affect output, but the fact that the workers involved in the studies had been chosen for special attention. The effect of this was to increase their morale and to motivate them to work and perform better. It was the fact that they were being studied that improved the levels of output.

45. Result Cont.’ The informal groups played important role Consequently the research began to focus on the role and behaviours of informal groups in work, those established by workers themselves, and attitudes of such groups. The first concerned the importance of informal groups within organisational structures.The studies demonstrated the need to see work as a co-operative activity rather than an individual one and the importance of the informal work group in performance levels.

46. Results The second proposition was that people have a strong need for recognition, security and belonging. The Hawthorne studies demonstrated that far from being purely economic, human beings’ work performance could be by their needs for security and recognition, and that informal groups could provide the sense for belonging they sought.

47. Human relations approach – the criticisms • Weak methodology of Hawthorne experiments, including failure to take sufficient account of environmental factors • Adoption of a management approach, a ‘unitary frame of reference’ and over simplification of theories • Insufficiently scientific and takes too narrow a view, ignoring the role of the organisation within society

48. The Behaviour Approach Focus: It extended the social man to the self actualized man Perspectives Abraham Maslow Douglas Mcgregor

49. Abraham Maslow’s Process Theory The best-known theory on motivation was developed by Abraham Maslow. According to Maslow, within every human being, a hierarchy of five needs exist. The first three are deficiencyneeds because they must be satisfied if the individual is to be healthy and secure. The last two are growth needs because they are related to the development and achievement of one’s potential. As each of these needs becomes substantially satisfied, the next higher need becomes dominant.

50. The Contents of Maslow’s Hierarchy Physiological--food, drink, shelter, sexual satisfaction, and other bodily requirements; Safety--security and protection from physical and emotional harm; Social--affection, belongingness, acceptance, and friendship; Esteem--internal factors such as self-respect, autonomy, achievement, and external factors such as status, recognition, and attention; Self-actualization--growth, achieving one’s potential, and self-fulfillment; the drive to become what one is capable of becoming.