Organisation Behaviour

The Development of Management Theory
Up to the 20th century (pre-modern era) Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

Adam Smith’s Contribution to the Field of Management
The general popularity today of job specialization is undoubtedly due to Smith’s view about division of labor.
Division of labor is the breakdown of jobs into narrow, repetitive tasks.

Industrial Revolution’s Influence on Management Practices
Industrial Revolution has originated in late-18th-century Great Britain, and crossed the Atlantic to America by the end of the Civil War.
Because of the Industrial Revolution, machine power was rapidly substituted for human power, which made it economical to manufacture goods in factories.
With the development of big organizations, a formal theory to guide managers running these organizations efficiently and effectively was needed.

The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

Scientific Management
Frederick Taylor
Frederick Taylor was called as the father of Scientific management. His book The Principles of Scientific management was published in 1911. Immediately, its contents became widely accepted by managers throughout the world.

Background of That Time
There were no clear concepts of responsibilities to workers and managers.
No effective work standards existed.
Management decisions were based on hunch and intuition.
Workers were placed on jobs with little or no concern for matching their abilities and aptitudes with the tasks required.
Managers and workers considered themselves to be in continual conflict—any gain by one would be at the expense of the other.

Taylor’s Four Principles of Management
Develop a scientific way for each element of an individual’s work, which replaces the old rule-of-thumb method.
Scientifically select and then train, teach, and develop the worker.
Heartily cooperate with the workers so as to ensure that all work is done in accordance with the scientific way that has been developed.
Divide work and responsibility almost equally between managers and workers. Managers take over all work for which it is better fitted than the workers.

The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

General Administrative Theory
Herial Fayol’s contributions
He argued that management was an activity common to all human undertakings in business, in government, and even in the home. He stated 14 principles of management—fundamental or universal truths.
Max Weber’s contributions
Weber developed a theory of authority structures and described organizational activity on the basis of authority relations. He described an ideal type of organization that he called a bureaucracy, characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships.

Fayol’s 14 Principles of Management
Division of Work
Authority
Discipline
Unity of Command
Unity of Direction
Subordination of Individual Interests to the General Interest
Remuneration
Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit de corps

Weber’s Ideal Bureaucracy
Division of labor
Authority hierarchy
Formal selection
Formal rules and regulations
Impersonality
Career orientation

The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

The Human Resources Approach
Hawthorne Studies
Human Relations Movement
Dale Carnegie
Abraham Maslow
Douglas McGregor
Behavior Science

Hawthorne Studies
Time: 1924—the early 1930s
Place: Hawthorne plant in the Western Electric Company
Designer: Western Electric industrial engineers
Elton Mayo and his associates
Mayo’s Finding:
Behavior and sentiments are closely related.
Group influences significantly affect individual behavior.
Group standards establish individual worker output.
Money is less a factor in determining output than are group standards, group sentiments, and security.

Chapter Two The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

The Quantitative Approach
What are quantitative approaches?
The quantitative approach to management, sometimes referred to as operations research (OR) or management science. It includes applications of statistics, optimization models, information models, and computer simulations, linear programming, and so on, which can be used to solve management problems.

The Quantitative Approach
How have they contributed to current management practice?
In general, the quantitative approaches have contributed directly to management decision making, particularly to planning and control decisions.

Chapter Two The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

The Systems Approach
What’s the system approach?
Two basic types of the system: closed and open
Closed systems are not influenced by and do not interact with their environment. In contrast, an open system dynamically interacts with its environment.
An organization is an open system
The operating model in organizational systems

What’s the System Approach?
The system approach defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Societies are systems and so, too, are computers, automobiles, organizations, and animal and human bodies.

An Organization Is an Open System
An organization is a system that interacts with and depends upon its environment.
Organization’s stakeholders:any group that is affected by organizational decisions and policies. The manager’s job is to coordinate all stakeholders to achieve the organization’s goals.
Organizational survival often depends on successful interactions with the external environment.

The Operating Model in Organizational System

The Development of Management Theory
Up to the 20th century
Adam smith’s contribution to the field of management
Industrial revolution’s influence on management practices
In the early 20th century
Scientific management
General administrative theory
The human resources approach
The quantitative approach
From the later 20th century to the present
The process approach
The systems approach
The contingency approach

Four Popular Contingency Variables:
Organization size
Routineness of task technology
Environmental uncertainty
Individual differences