Historical foundations of management

1. Historical foundations of management Dr. Bagus Nurcahyo Program Studi Manajemen Pemasaran Direktorat Program D3 Bisnis & Kewirausahaan BnR-Peng.Manajemen-Chap-4

2. Historical foundations of management • Study questions • What can be learned from classical management thinking? • What ideas were introduced by the human resource approaches? • What is the role of quantitative analysis in management? • What is unique about the systems view and contingency thinking? • What are continuing management themes of the 21st century? BnR-Peng.Manajemen-Chap-4

3. Major schools of management thought • Classical management approaches • Developing universal principles for use in various management situations. • Behavioural management (or human resource) approaches • Human needs, the work group and social factors in the workplace. BnR-Peng.Manajemen-Chap-4

4. Major schools of management thought • Quantitative management approaches • Use of mathematical techniques for management problem solving. • Modern approaches • Systems and contingency views of organisations. BnR-Peng.Manajemen-Chap-4

5. What can be learned from classical management thinking? • Classical approaches to management include: • Scientific management – emphasizes careful selection & training of workers, & supervisory support • Administrative principles – based on attempts to document & understand the experiences of successful managers • Bureaucratic organisation – is a rational & efficient organisation founded on logic, order & legitimate authority BnR-Peng.Manajemen-Chap-4

6. What can be learned from classical management thinking? • I. Scientific management (Frederick Taylor) “Father of scientific management” • Design jobs properly, standardised work processes and proper working conditions for every job. • Carefully select workers with the right abilities for the job. • Carefully train workers to do the job and provide proper incentives. • Support workers by carefully planning their work and removing obstacles. BnR-Peng.Manajemen-Chap-4

7. What can be learned from classical management thinking? • Scientific management (the Gilbreths) Frank & Lillian • Motion study • Science of reducing a job or task to its basic physical motions • Eliminating wasted motions improves performance. BnR-Peng.Manajemen-Chap-4

8. Scientific management • Henry Gantt’s contributions, which include: • (a) an innovative task andbonus wage scheme in which workers and supervisors received bonuses for exceeding standards; • (b) the Gantt chartwhich graphically depicts the scheduling of tasks required to complete a project. BnR-Peng.Manajemen-Chap-4

9. What can be learned from classical management thinking? • II. Administrative principles (Henri Fayol) • Rules of management • Foresight — to complete plan of action for the future • Organisation — to provide and mobilise resources to implement the plan • Command— to lead, select and evaluate workers to get the best work towards the plan • Coordination — to fit diverse efforts together, ensure information is shared and problems solved • Control— to make sure things happen according to plan and to take necessary corrective action. BnR-Peng.Manajemen-Chap-4

10. What can be learned from classical management thinking? • Administrative principles (Henri Fayol) • Key principles of management • Scalar chain - there should be a clear and unbroken line of communication from the top to the bottom of the organisation • Unity of command - each person should receive orders from only one boss. • Unity of direction - one person should be in charge of all activities that have the same performance objective BnR-Peng.Manajemen-Chap-4

11. What can be learned from classical management thinking? • Administrative principles (Mary Parker Follett) • - Her insights about groups and human cooperation include the following: • Groups are mechanisms through which individuals could combine their talents for a greater good. • Organisations as cooperating ‘communities’ of managers and workers • The manager’s job is to help people in the organisation cooperate and achieve an integration of interests. BnR-Peng.Manajemen-Chap-4

12. What can be learned from classical management thinking? • Administrative principles (Mary Parker Follett) • Forward-looking management insights • Employee ownership creates sense of collective responsibility (precursor of employee ownership, profit sharing and gain sharing). • Business problems involve a variety of interrelated factors (precursor of systems thinking). • Private profits relative to public good (precursor of managerial ethics and social responsibility). BnR-Peng.Manajemen-Chap-4

13. What can be learned from classical management thinking? • III. Bureaucratic organisation (Max Weber) • Bureaucracy • An ideal, intentionally rational and very efficient form of organisation. • Based on principles of logic, order and legitimate authority. BnR-Peng.Manajemen-Chap-4

14. Characteristics of bureaucratic organisations: Clear division of labor Clear hierarchy of authority Formal rules and procedures Impersonality Careers based on merit. Possible disadvantages of bureaucracy: Excessive paperwork or ‘red tape’ Slowness in handling problems Rigidity in the face of shifting needs Resistance to change Employee apathy. What can be learned from classical management thinking? BnR-Peng.Manajemen-Chap-4

15. What ideas were introduced by the human resource approaches? • Behavioural management (or human resource) approaches include: • Hawthorne Studies • Maslow’s theory of human needs • McGregor’s Theory X and Theory Y • Argyris’s theory of adult personality. BnR-Peng.Manajemen-Chap-4

16. What ideas were introduced by the human resource approaches? • I. Hawthorne Studies conducted by Elton Mayo • Initial study examined how economic incentives and physical conditions at workplace affected worker output • No consistent relationship found BnR-Peng.Manajemen-Chap-4

17. What ideas were introduced by the human resource approaches? • Hawthorne Studies • 2. Relay assembly test-room studies • Manipulated physical work conditions to assess impact on output • Designed to minimise the ‘psychological factors’ of previous experiment • Group atmosphere and participative supervision accounted for increased productivity. BnR-Peng.Manajemen-Chap-4

18. What ideas were introduced by the human resource approaches? • Hawthorne Studies • 3.Employee attitudes, interpersonal relations and group processes • Some things satisfied some workers but not others. • People restricted output to adhere to group norms. • Lessons of the Hawthorne Studies • People’s feeling, attitude & relationships with co-workers influence performance • Hawthorne effect — people who are singled out for special attention perform as expected. BnR-Peng.Manajemen-Chap-4

19. What ideas were introduced by the human resource approaches? • II. Maslow’s theory of human needs • A need is a physiological or psychological deficiency a person feels compelled to satisfy. • Need levels • Physiological • Safety • Social • Esteem • Self-actualisation. BnR-Peng.Manajemen-Chap-4

20. What ideas were introduced by the human resource approaches? • Maslow’s theory of human needs • Deficit principle • People act to satisfy “deprived” needs CONTRARY a satisfied need is not a motivator of behaviour. • Progression principle • A need becomes a motivator once the preceding lower-level need is satisfied. BnR-Peng.Manajemen-Chap-4

21. McGregor’s Theory X assumes that workers: dislike work lack ambition are irresponsible resist change prefer to be led. McGregor’s Theory Y assumes that workers are: willing to work capable of self-control willing to accept responsibility imaginative and creative capable of self-direction. What ideas were introduced by the human resource approaches?III. Douglas McGregor BnR-Peng.Manajemen-Chap-4

22. What ideas were introduced by the human resource approaches? • McGregor’s Theory X and Theory Y • Managers create self-fulfilling prophecies.(that is, through their behaviour they create situations where subordinates act to confirm their expectations) • How do managers create positive self – fulfilling prophecy? BnR-Peng.Manajemen-Chap-4

23. What ideas were introduced by the human resource approaches? • IV. Chris Argyris’s theory of adult personality • Classical management principles and practices discourage worker independence and are inconsistent with the mature adult personality. • Management should accommodate the mature personality. BnR-Peng.Manajemen-Chap-4

24. What ideas were introduced by the human resource approaches? • Argyris’s theory of adult personality • Management practices consistent with the mature adult personality: • Increasing task responsibility • Increasing task variety • Using participative decision making. BnR-Peng.Manajemen-Chap-4

25. 1.Management science (operations research) foundations Scientific application of mathematical techniques to management problems Techniques and applications include: Mathematical forecasting - for making future projections that are useful in the planning process. Inventory modeling - for helping to control inventories by establishing how much to order and when Linear programming - for determining how to best allocate scarce resources among competing uses What is the role of quantitative analysis in management? BnR-Peng.Manajemen-Chap-4

26. What is the role of quantitative analysis in management? • Queuing theory - for allocating service personnel or workstations to minimise customer waiting time and service cost • Network models - for breaking large tasks into smaller components to allow for better analysis, planning, and control of complex projects. • Simulations - for developing models of problems so different solutions under various assumptions can be tested. BnR-Peng.Manajemen-Chap-4

27. What is the role of quantitative analysis in management? • Quantitative analysis today • Use of staff specialists to help managers apply techniques • Software and hardware developments have expanded potential quantitative applications to managerial problems. • Good managerial judgement and appreciation for human factors must accompany use of quantitative analysis. BnR-Peng.Manajemen-Chap-4

28. What is unique about the systems view and contingency thinking? According to the modern approaches to management: - people have multiple and varied needs and talents that change over time - thereforeorganisation & managers should respond to individual differences with a wide variety of managerial strategies and job opportunities BnR-Peng.Manajemen-Chap-4

29. What is unique about the systems view and contingency thinking? • Systems thinking • System • Collection of interrelated parts that function together to achieve a common purpose • Subsystem • A smaller component of a larger system • Open system • An organisation that interacts with its environments in the continual process of transforming resource inputs into outputs. BnR-Peng.Manajemen-Chap-4

30. What is unique about the systems view and contingency thinking? • Contingency thinking • Tries to match managerial responses with problems and opportunities unique to different situations • No ‘one best way’ to manage, managers need to understand situational differences & respond to them in appropriate ways • Most appropriate way to manage depends on the situation. • IF = THEN BnR-Peng.Manajemen-Chap-4

31. What are continuing management themes of the 21st century? • 1.Quality and performance excellence • Managers and workers in progressive organisations are quality conscious. • Total quality management (TQM) • Comprehensive approach to continuous quality improvement for a total organisation • Creates context for the value chain (a specific sequence of activities that transform raw materials into a finished good or services) BnR-Peng.Manajemen-Chap-4

32. What are continuing management themes of the 21st century? • Eight attributes of performance excellence: • Bias towards action - making timely decisions and getting things done • Closeness to the customer - knowing customer needs and valuing customer satisfaction. • Autonomy and entrepreneurship - supporting innovation, change, and risk taking. BnR-Peng.Manajemen-Chap-4

33. Productivity through people - valuing human resources as keys to quality and performance. • Hands-on and value-driven - having a clear sense of organisational purpose. • Sticking to the knitting - focusing resources and attention on what the organisation does best. • Simple form and lean staff - minimising levels of management and staff personnel. • Simultaneous loose-tight properties - allowing flexibility while maintaining control. BnR-Peng.Manajemen-Chap-4

34. What are continuing management themes of the 21st century? • 2.Global awareness • Pressure for quality and performance excellence is created by a highly competitive global economy. • Has fostered increasing interest in new management concepts: • Process reengineering – process redesign • Virtual organisations • Agile factories • Network firms • Adoption of Theory Z management practices. BnR-Peng.Manajemen-Chap-4

35. What are continuing management themes of the 21st century? • Theory Z – describes a management framework emphasising long-term employment & teamwork, attention to career planning , employee involvement, that are found in the Japanese models. BnR-Peng.Manajemen-Chap-4

36. What are continuing management themes of the 21st century? • 3. Learning organisation • Contemporary businesses must learn to become learning organisations. • These are organisations operating with values and systems that result in continuous change and improvement based on the lessons of experience. BnR-Peng.Manajemen-Chap-4

37. What are continuing management themes of the 21st century? • Learning organisation success depends on: • culture that emphasises information, teamwork, empowerment, participation and leadership • special leadership qualities • The 21st century manager must be: • a global strategist • a master of technology • an effective politician • an inspiring leader. BnR-Peng.Manajemen-Chap-4