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MANAGEMENT HISTORY

MANAGEMENT HISTORY. MIM332E. What is management : getting things done through other people What can history tell us? Knowledge of management history can increase understanding of management theory and practice Earliest forms of Management:

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MANAGEMENT HISTORY

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  1. MANAGEMENT HISTORY MIM332E

  2. What is management: getting things done through other people What can history tell us? Knowledge of management history can increase understanding of management theory and practice Earliest forms of Management: Pyramids Great wall of China

  3. History & Management • Studying history is a way to achieve strategic thinking, see the big picture, and improve conceptual skills. • Before Industrial Revolution, organizational scale in economic undertakings was small. • Neverthless, there was still a need for management in the conduct of military campaigns, in household affairs, and in the administartion of government.

  4. The Near East: Priest-Ruler ■ One such divine king was the Babylonian Hammurabi, who received his right to rule and his code of laws from the sun god. In 2250 BC, Hammurabi issued a code of 282 laws, which governed business dealings, personal behavior, interpersonal relations, wages, punishments, and a host of other societal matters.

  5. The Near East: Priest-Ruler • Law 104, for examle, was the first mention of accounting. It dealt with the handling receipts and established an agency relationship between the merchant and the agent. • Law 229: “If a builder builds a house for a man and does not make its construction firm, and the house collapses, and causes the death of the owner, that builder shall be put to death.

  6. The Far East: Philosophical Foundations of Management • Chinese general Sun Tzu (600 BC): Structuring of army into subdivisions, gradations of rank among the officers, using gongs, flags, and signal fires for communications.

  7. The Far East: Philosophical Foundations of Management Planning for the battle: “If our forces are ten to the enemy’s one, surround them. If five to one, attack them. If twice as numerous, divide our army in two, one to meet the enemy in front and the other fall upon their rear. If equally matched, we can offer battle. If slightly inferior in number, we can avoid the enemy. If quite unequal in every way, we can flee from them.”

  8. The Far East: Philosophical Foundations of Management • Confucius (552-479 BC): Merit system Govenment offices should go to individuals of proven merit and ability. Merit exams, based on Confucian advice, began during the Han dynasty (206BC-220AD). Merit as a basis for selection would in time lead to merit rating (performance appraisal) for promotions. The Sung dynasty started a merit rating system around AD 962.

  9. The Far East: Philosophical Foundations of Management • There is evidence that the Chinese were familiar with the division of labor and the departmental form of organization as early as AD 1. An inscription on a rice bowl indicates that it was made in a government workshop in which there was a high degree of specilization of labor among the various artisans. The workshop was divided into three departments: accounting, security, and production.

  10. Egypt: The Rule of Ten • Egyptians were aware of limits to the number of people one manager could supervise. There was a ratio of about ten servants to each supervisor. There were distinctive dressing for managers and workers. The supervisors wore kilts or ropbes,while the latter were dressed so as to represent their trade or occupation.

  11. EVOLUTION OF MODERN MANAGEMENT 1. CLASSICAL APPROACHES 2. HUMAN RELATIONS APPROACHES 3. POST-1945 APPROACHES

  12. Classical Approaches to Management

  13. SCIENTIFIC MANAGEMENT • Underlying Assumptions • There is “One Best Way” to do a job • Workers are primarily motivated by increased earnings

  14. SCIENTIFIC MANAGEMENT 1. There is “One Best Way” to do a job • By applying scientific methods of analysis, it is possible to breakdown the work into tasks and subtasks and rearrange them into the most efficient method of working

  15. SCIENTIFIC MANAGEMENT 2. Workers are primarily motivated by increased earnings. By finding the best way of producing, productivity will rise and so workers should receive better wages. This is the basis of the argument that scientific management uses money as a motivator for workers.

  16. Taylor’s Five Principles of Management • Develop standard methods for performing each job • Select workers with appropriate abilities for each job • Train workers in standard methods • Support workers & eliminate interruptions • Provide wage incentives 6

  17. ADMINISTRATIVE PRINCIPLES • Henry Fayol – French Mining Engineer • concerned with making the overall organization more effective • developed theories of what constituted good management practice • proposed a universal set of management functions • published principles of management • fundamental, teachable rules of management

  18. Fayol’s 14 Principles of Management • Division of Work • Authority • Discipline • Unity of Command • Unity of Direction (One Boss) • Subordination of Interests • Remuneration

  19. Fayol’s 14 Principles of Management • Centralization • Scalar Chain (Clear Boxes) • Order • Equity • Stability of Personnel • Initiative • Esprit De Corps

  20. Centralization and Decentralization DEGREE OF CENTRALIZATION DEGREE OF DECENTRALIZATION Judging by the size of the desk, where do decisions get made? Which organization looks more appealing to you?

  21. BUREAUCRATIC ORGANIZATIONS • A systematic approach that looked at the organizations as a whole is the bureaucratic organizations approach, developed by the German theorist Max Weber. • During the late 19th century many business organizations were still managed on a ‘personal’, familiy-like basis. Employees were loyal to a single individual rather than to the organization or its mission.

  22. BUREAUCRATIC ORGANIZATIONS • Principles of Bureaucracy • A manager’s formal authority derives from the position he or she holds in the organiztion • People should occupy positions because of their performance, not because of their social standing or personal contacts • The extend of position’s formal authority and task responsibilities, and its relationship to other positions in an organization, should be clearly specified. • So that authority can be exercised effectively in an organization, positions should be arranged hierarhically, so employees know whom to report and who reports to them. • Managers must create a well-defined system of rules, standard operating procedures, and norms so that they can effectively control behavior within an organization.

  23. Division of Labor Authority Rational-Legal Hierarchy Max Weber’s Bureaucracy Career Orientation Formal Selection Impersonal Rationality Rules and Regulations

  24. United Parcel Service UPS specializes in the delivery of small packages. Why has the Brown Giant been so successful? One important reason is the concept of bureaucracy. UPS is bound up in rules and regulations. There are safety rules for drivers, loaders, clerks, and managers. Strict dress codes are enforced- no beards; hair cannot touch the collar; mustaches must be trimmed evenly; and no sideburns. Rules specify cleanliness standards for buildings and other properties.

  25. United Parcel Service (cont.) No drinking or eating is permitted at employee desks. Every manager is given bound copies of policy books and expected to use them regularly. UPS also has a well-defined division of labor. Each plant consists of specialized drivers, loaders, clerks, washers, sorters, and maintenance personnel. UPS thrives on written records. Daily worksheets specify performance goals and work output. Daily employee quotas and achievements are reported on a weekly and monthly basis.

  26. United Parcel Service • Technical qualification is the criterion for hiring and promotion. The UPS policy book says the leader is expected to have the knowledge and capacity to justify the position of leadership. Favoritism is forbidden. The bureaucratic model works just fine at UPS, “the tightest ship in the shipping business.”

  27. Board of Directors Chief Executive Production Department Marketing & Sales Department Accounting & Finance Department Personnel Department Quality Department Health & Safety BUREAUCRATIC ORGANIZATIONS

  28. HUMAN RELATIONS APPROACH • Hawthorne Studies • started in 1924 at Western Electric Company • began with illumination studies • intensity of illumination not related to productivity • Elton Mayo – studies of job design • looked at the importance of social norms as determinants of individual work behavior • changed the view of workers as machines

  29. Hawthorne Studies • This research began as an attempt to investigate how the level of lighting or illumination affect worker performance. • The researchers found that regardless of whether they raised or lowered the level of illumination, productivity increased. • It was found that employees performed better when managers treated them in a positive manner.

  30. POST-1945 APPROACHES • System Theory • Contingency Theory • Total Quality Management

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