Thursday 20 September 2012

1. Thursday 20 September 2012 Operations and Production Management Professor Robert Shaw School of Management Guangdong University of Foreign Studies

2. Thursday 20 September 2012 Today (Session 3) Course arrangements Your email Proposed session dates and times – speak up if there are any problems (Sue can help with this) Any problems? Lecture: The History of Operations Management Theory 3. Skills development: Overview of skills that are relevant to OPM Approach to enquiry / topic / problem Basics of report production

3. This is a proposal – it is not certain yet

4. Lecture: A history of management theory Purpose of this lecture Management theory for operations and production management Evolution of management theory Major schools of thought Some key theorists

5. 1 Purpose of this lecture To provide an overview of key ideas in management To place these ideas into a meaningful framework or context To show how and why management theory has evolved To acquaint you with some of the key theorists in the Western traditions of management To ask what is the relevance of Western theory to China

6. 2 Management theory for OPM Management theory almost always directed at OPM Some specialist theories which do not concern us, for example, marketing management, public policy management, portfolio management (stocks /shares) What is the place/situation of theories about HR? Either Integral to OPM Or Somehow stand alone

7. 3Evolution of management theory Historical context - Key events Technological advances (industrialisation) Wars Mobilisation of working people (unions, protests) The development of purposes Efficient production Management and/or organisation of people Technological innovation Quality of lives In the workplace In society as a whole Sustainability Of businesses Of government services Of society

10. 4Major schools of thought Various ways that people have classified groupings of management theory Some key terms you should know

11. Classical Schools of Management One of the first schools of management thought, the classical management theory, developed during the Industrial Revolution when new problems related to the factory system began to appear. Managers were unsure of how to train employees (many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so they began to test solutions. As a result, the classical management theory developed from efforts to find the “one best way” to perform and manage tasks. This school of thought is made up of two branches: classical scientific and classical administrative, described in the following sections.

12. Behavioral Management Theory As management research continued in the 20th century, questions began to come up regarding the interactions and motivations of the individual within organizations. Management principles developed during the classical period were simply not useful in dealing with many management situations and could not explain the behavior of individual employees. In short, classical theory ignored employee motivation and behavior. As a result, the behavioral school was a natural outgrowth of this revolutionary management experiment.

13. Quantitative School of Management During World War II, mathematicians, physicists, and other scientists joined together to solve military problems. The quantitative school of management is a result of the research conducted during World War II. The quantitative approach to management involves the use of quantitative techniques, such as statistics, information models, and computer simulations, to improve decision making. This school consists of several branches, described in the following sections.

14. Contingency School of Management The contingency school of management can be summarized as an “it all depends” approach. The appropriate management actions and approaches depend on the situation. Managers with a contingency view use a flexible approach, draw on a variety of theories and experiences, and evaluate many options as they solve problems.

15. Quality School of Management The quality school of management is a comprehensive concept for leading and operating an organization, aimed at continually improving performance by focusing on customers while addressing the needs of all stakeholders. In other words, this concept focuses on managing the total organization to deliver high quality to customers.

16. Management in the Future Modern management approaches respect the classical, human resource, and quantitative approaches to management. However, successful managers recognize that although each theoretical school has limitations in its applications, each approach also offers valuable insights that can broaden a manager's options in solving problems and achieving organizational goals. Successful managers work to extend these approaches to meet the demands of a dynamic environment.

17. 5 Key theorists Selection of important theorists For each: Who? When? Why? Who or what influenced them, their goals, concerns, purposes Key works (title, date) Their theory or key ideas Strengths of the theory / ideas Weaknesses of the theory / ideas Influence on others

18. The important theorists Machiavelli Fayol Taylor Weber Follett Maslow Drucker Hofstede Mintzberg Senge

19. Machiavelli The Mandrake is a satirical play by Italian Renaissance writer Niccolò Machiavelli. Its tale of the corruption of Italian society was written while Machiavelli was in exile, allegedly having plotted against the Medici.

20. Fayol The man who believes workers should talk!

21. FayolFourteen principles Division of work Delegation of Authority Discipline Chain of commands Congenial workplace Interrelation between individual interests and common organizational goals Compensation package Centralization Scalar chains Order Equity Job Guarantee Initiatives Team-Spirit or Esprit de corps.

22. FayolElements of management Planning: creating a plan of action for the future, determining the stages of the plan and the technology necessary to implement it. Organizing: Once a plan of action is designed, managers need to provide everything necessary to carry it out; including raw materials, tools, capital and human resources Command: Managers need to implement the plan. They must have an understanding of the strengths and weaknesses of their personnel. Coordination: High-level managers must work to "harmonize" all the activities to facilitate organizational success. Communication is the prime coordinating mechanism. Control: The comparison of the activities of the personnel to the plan of action, it is the evaluation component of management.

24. Frederick Winslow Taylor Born 1856 Died 1915 (age 59) American Educated in France and Germany 1878 machine shop laborer at Midvale Steel Works Mechanical engineer The founder of “scientific management” – the analysis of workflows to improve efficiency, particular labour efficiency. The efficiency movement Three major works: A Piece Rate System (1895) Shop Management (1903) The Principles of Scientific Management (1911)

26. Frederick Winslow Taylor

28. The four objectives of management under scientific management were as follows: 1. The development of a science for each element of a man's work to replace the old rule-of-thumb methods. 2. The scientific selection, training and development of workers instead of allowing them to choose their own tasks and train themselves as best they could. 3. The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures. 4. The division of work between workers and the management in almost equal shares, each group taking over the work for which it is best fitted instead of the former condition in which responsibility largely rested with the workers. Self-evident in this philosophy are organizations arranged in a hierarchy, systems of abstract rules and impersonal relationships between staff.

29. Taylor’s framework for each organization was: Clear delineation of authority Responsibility Separation of planning from operations Incentive schemes for workers Management by exception Task specialization

30. Three assumptions underlying Taylor’s work were: The presence of a capitalist system and a money economy, where companies in a free market have as their main objective the improvement of efficiency and the maximization of profit; The Protestant work ethic, that assumes people will work hard and behave rationally to maximize their own income, putting the perceived requirements of their organization before their own personal objectives and goals; That an increased size is desirable in order to obtain the advantages of the division of labor and specialization of tasks.

31. Max Weber Born 1864, Prusia Died 1920, Múnich German philosopher, sociologist and political economist Theory of Social and Economic Organization (1947) Principles and Elements of Management - describe an ideal or pure form of organizational structure (general policy and specific commands Focus on organizational structure Worker should respect the “right” of managers to direct activities dictated by organizational rules and procedures

32. Max Weber –theory of bureaucracy Bureaucracy allows for the optimal form of authority - “rational authority” Three types of Legitimate Authority Traditional Authority - past customs; personal loyalty Charismatic Authority - personal trust in character and skills Rational Authority - rational application of rules or laws

33. Max Weber –theory of bureaucracy Tenets of Bureaucracy Rules Specified sphere of competence Hierarchy Specialized Training Workers do not own technology No entitlement to “official position” by incumbent Everything written down Maintenance of “ideal type” - bureaucracy

34. Max Weber –theory of bureaucracy Application in the Modern Workplace Large organizations guided by countless rules are bureaucracies Linked with inefficient, slow-moving organizations Organizations have several characteristics of bureaucracies

35. Mary Parker Follett Born 1868, Massachestts Denied a doctorate at Harvard because she was female Died 1833 American psychologist, social worker and consultant Main works The Speaker of the House of Representatives (1896) The New State (1918) Creative Experience (1924) Dynamic Administration (1942)

36. Mary Parker Follett

37. Maslow Born Died Psychologist Studied exemplary people, not those with problems 1954 Motivation and Personality

39. Peter Drucker Born 1909 Vienna, Jewish parents Educated University of Frankfurt Two of his books were banned by the Nazi Party Left Germany to work London, 1933 Naturalised US citizen 1943 Died 2002 California Writer, professor of management, consultant Early work on General Motors, book The Concept of the Corporation 1959 - Coined the term “knowledge worker" and later in his life considered knowledge worker productivity to be the next frontier of management.

41. Decentralization and simplification. Druckerdiscounted the command and control model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to produce too many products, hire employees they don't need (when a better solution would be outsourcing), and expand into economic sectors that they should avoid. • The concept of "Knowledge Worker" in his 1959 book "The Landmarks of Tomorrow".Sincethen, knowledge-based work has become increasingly important in businesses worldwide. • The prediction of the death of the "Blue Collar" worker. A blue collar worker is a typical high school dropout who was paid middle class wages with all benefits for assembling cars in Detroit. The changing face of the US Auto Industry is a testimony to this prediction. • The concept of what eventually came to be known as "outsourcing. He used the example of front room and a back room of each business: A company should be engaged in only the front room activities that are core to supporting its business. Back room activities should be handed over to other companies, for whom these are the front room activities. • The importance of the non-profit sector, which he calls the third sector (private sector and the Government sector being the first two.) Non-Government Organizations (NGOs) play crucial roles in countries around the world. • A profound skepticism of macroeconomic theory. Drucker contended that economists of all schools fail to explain significant aspects of modern economies.

42. Respect of the worker. Drucker believed that employees are assets and not liabilities. He taught that knowledgeable workers are the essential ingredients of the modern economy. Central to this philosophy is the view that people are an organization's most valuable resource, and that a manager's job is both to prepare people to perform and give them freedom to do so. • A belief in what he called "the sickness of government." Drucker made nonpartisan claims that government is often unable or unwilling to provide new services that people need or want, though he believed that this condition is not inherent to the form of government. The chapter "The Sickness of Government"inhis book The Age of Discontinuity formed the basis of New Public Management. • The need for "planned abandonment." Businesses and governments have a natural human tendency to cling to "yesterday's successes" rather than seeing when they are no longer useful. • A belief that taking action without thinking is the cause of every failure. • The need for community. Early in his career, Drucker predicted the "end of economic man" and advocated the creation of a "plant community“ where an individual's social needs could be met. He later acknowledged that the plant community never materialized, and by the 1980s, suggested that volunteering in the nonprofit sector was the key to fostering a healthy society where people found a sense of belonging and civic pride. • The need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value. This concept of management by objectives forms the keynote of his 1954 landmark The Practice of Management. • A company's primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company's continued existence. • A belief in the notion that great companies could stand among humankind's noblest inventions.

43. Hofstede Next week!

44. Mintzberg Next week!

45. Peter Senge Next week!

46. End of the lecture Here begins your SKILLS development for the session.

47. Skills developed in this courseBasic skills for Operations and Production Management professional(The skills of enquiry / research / problem solving) • Identification of an issue / research topic / problem • Refinement and definition of the issue / research topic / problem (often formulated as a questions) • Recognise the different kinds of questions • Scientific questions • Practical questions • Moral questions • Research online • Come to understand your question • Gain relevant information • Formulate your response to the question • Plan your writing • Structure (report format) • What to include • Write , re-write, re-write: writing is how you think • Check your spelling, grammar, paragraph structure, referencing

48. Your task for the weekAcademic papers on Operations and Production Management We are learning to conduct research, step-by-step Study for the test. No email this week unless you want to ask a question(shaw@porirua.net“OPM” in subject line).