FHTM

Delivered by:
musliha.ahmed@mnu.edu.mv

Session 3

Historical background and current

trends of management

SHORT VEDIO

http://www.youtube.com/watch?v=fF_YvY7jf
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This session is supposed to

cover:

Scientific management (Frederick W. Taylor,

Frank and Lillian Gilbreth);

General administrative theory (Henri Fayol,

Max Weber);

Quantitative approach to management

Scientific management (Frederick W. Taylor, Frank

and Lillian Gilbreth);

The management science school

provides managers with a scientific basis
for solving problems and making
decisions.

This approach arose out of a need to

improve manufacturing productivity
through more efficient use of physical
and human resources.

It grew from the pioneering work of five

people: Frederick W. Taylor, Frank and
Lillian Gilbreth, Henry Gantt, and
Harrington Emerson.

Frederick W.Taylor
Frederick Winslow Taylor (1856-1915), became known
as "the father of scientific management." He insisted
that management itself would have to change.
Taylor suggested that decisions based on rules of
thumb be replaced with precise procedures
developed after careful study of individual situations.
The essence of Taylor's scientific management can be
summarized in the following principles:

Develop a science for each element of a worker's job to

replace rules of thumb.
Job specialization should be a part of each job.
Ensure the proper selection, training, and development of
workers.
Planning and scheduling of the work are essential.
Standards with respect to methods and time for each task
should be established.
Wage incentives should be an integral part of each job.

These principles became the basic

guidelines for managing the work of
individuals. Taylor's approach had a
significant impact on American society; it
led to increases in productivity. His ideas
also stimulated others to continue the
formulation of management thought.

http://www.youtube.com/watch?v=8PdmNbq
tDdI

Frank Gilbreth (1868- 1924), Lillian Gilbreth

(1878-1972)

Frank and Lillian Gilbrethwere a husband-wife

team if industrial engineers. They produced
significant contributions in motion study and
work simplification.
With the use of motion picture cameras, the
Gilbreth's found the most efficient and
economical motions for each task, thus
reducing and upgrading production.
Working individually and together, Frank and
Lillian Gilbreth developed numerous techniques
and strategies for eliminating inefficiency.

Henry L. Gantt (1861-1919)

Contributions towardwork scheduling and

controlwere made byHarry L. Gannt. He
tried to improve systems or organizations
through task scheduling and reward
innovation. Essentially, Gantt's most famous
contribution was the Gannt chart, a system
of control and scheduling we still use today.

Harrington Emerson (1853-1931)

The principles of efficiency were further

developed byHarrington Emerson. He was
also a strong advocate of making a strict
distinction between line and staff roles in
organizations. Moreover, Emerson urged on
the use of statements of goals and
objectives for the total organization.

General administrative theory

(Henri Fayol, Max Weber);

On the 19th century, America was undergoing

rapid growth and expansion. Midwestern and
western lands were sparsely inhabited and
contained large quantities of untapped
minerals, forest reserves, and fertile farmland.

As the population moved westward, new

markets were opened for enterprises, and the
need for power, transportation, and
communication became critical.

With the development of rail systems and the

establishment of telegraph lines,
entrepreneurial activity was abundant and
highly competitive.

The need to develop management techniques that

would integrate technology, materials, and worker
activities in a productive and efficient manner was
a central concern during this period.

Because of these events in the United States and

the impact of the Industrial Revolution in Europe,
classical management theory evolved in an
effort to develop techniques that would solve
problems of organizational efficiency in the
production of goods and services.

Classical management theory can be divided into

two perspectives distinguished by the issues and
problems that they address.

One perspective, administrative theory, evolved

from a concern by both European and American
academicians and managers with the nature and
management of the total organization.

Issues and problems that they sought to address

focused on the technical efficiency of the
organization.

A second perspective, scientific management,

emerged primarily among American scholars and
managers and focused on issues involved in the
management of work and workers.

Administrative Theory
Administrative theory focuses on the
total organization and attempts to
develop principles that will direct
managers to more efficient activities.
Prominent writers in this perspective
were Henri Fayol, Max Weber, and
Chester Barnard.

Henri Fayol

Henri Fayol (1841-1925) was a French mining engineer

who spent many of his later years as an executive for a
French coal and iron combine. In 1916, as director of
the company, Fayol penned the book General and
Industrial Management.

In this book, Fayol classified the study of management

into several functional areas which are still commonly
used in executive training and corporate development
programs. The functional areas identified by Fayol are
planning, organizing, directing, coordinating, and
controlling.

Fayol set down specific principles for practicing managers to

apply that he had found useful during his years as a manager.
He felt these principles could be used not only in business
organizations but also in government, the military, religious
organizations, and financial institutions.

Fayol's principles were not meant to be exhaustive. Rather, his

aim was to provide managers with the necessary building
blocks to serve as guidelines for managerial activities. In sum,
the principles emphasize efficiency, order, stability, and
fairness. While they are now over a century old now, they are
very similar to principles still being applied by managers today.
The problem with Fayol's principles of management is knowing
when to apply them and how to adapt them to new situations.

Henri Fayol identified 14 principles of management:

1. Specialisation/division of labour
A principle of work allocation and specialisation in
order to concentrate activities to enable specialisation
of skills and understandings, more work focus and
efficiency.
2. Authority with corresponding responsibility
If responsibilities are allocated then the post holder
needs the requisite authority to carry these out
including the right to require others in the area of
responsibility to undertake duties. Authority stems
from:that ascribed from the delegation process (the job
holder is assigned to act as the agent of the high
authority to whom they report hierarchy) allocation
and permission to use the necessary resources needed
(budgets, assets, staff) to carry out the responsibilities.
selection - the person has the expertise to carry out
the responsibilities and the personal qualities to win
the support and confidence of others.

3.

Discipline
The generalisation about discipline is that discipline is
essential for the smooth running of a business and
without it - standards, consistency of action,
adherence to rules and values - no enterprise could
prosper.
4. Unity of commandThe idea is that an employee
should receive instructions from one superior only.
This generalisation still holds - even where we are
involved with team and matrix structures which
involve reporting to more than one boss - or being
accountable to several clients. The basic concern is
that tensions and dilemmas arise where we report to
two or more bosses. One boss may want X, the other
Y and the subordinate is caught between the devil
and the deep blue sea.
5. Unity of direction The unity of command idea of
having one head (chief executive, cabinet consensus)
with agree purposes and objectives and one plan for
a group of activities) is clear.

6. Subordination of individual interest to the general interest

Fayol's line was that one employee's interests or those of one group
should not prevail over the organisation as a whole. This would spark
a lively debate about who decides that the interests of the
organisation as a whole are. Ethical dilemmas and matters of
corporate risk and the behaviour of individual "chancers" are
involved here. Fayol's work - assumes a shared set of values by
people in the organisation - a unitarism where the reasons for
organisational activities and decisions are in some way neutral and
reasonable.
7. Remuneration
" the price of services rendered. " 1916The general principle is that
levels of compensation should be "fair" and as far as possible afford
satisfaction both to the staff and the firm (in terms of its cost
structures and desire for profitability/surplus).
8. Centralization

Centralisation for HF is essential to the organisation and a

natural consequence of organising. This issue does not go
away even where flatter, devolved organisations occur.
Decentralisation - is frequently centraliseddecentralisation !!! The modes of control over the actions
and results of devolved organisations are still matters
requiring considerable attention.

9. Scalar chain
The scalar chain of command of reporting
relationships from top executive to the ordinary
shop operative or driver needs to be
sensible,
clear and understood
10. Order
The level of generalisation becomes difficult with
this principle. Basically an
organisation
"should" provide an orderly place for each
individual member - who needs to see how their
role fits into the organisation and be confident,
able to predict the organisations behaviour
towards them. Thus policies, rules, instructions
and actions should be understandable and
understood. Orderliness implies steady
evolutionary movement rather than wild, anxiety
provoking unpredictable movement.

11. Equity
Equity, fairness and a sense of justice
"should"pervade the organisation - in principle and
practice.
12. Stability of tenure
Time is needed for the employee to adapt to
his/her
work and perform it effectively. Stability of tenure
promotes loyalty to the organisation, its purposes
and values.
13. Initiative
At all levels of the organisational structure, zeal,
enthusiasm and energy are enabled by people having
the scope for personal initiative. (Note:
Tom Peters
recommendations in respect of
employee
empowerment)
14. Esprit de corps
Here Fayol emphasises the need for building and
maintaining of harmony among the work force , team
work and sound interpersonal relationships.

Max Weber

Max Weber (1864-1920) was born to a wealthy family with

strong political ties in Germany. As a sociologist, editor,
consultant to government, and author, Weber experienced
the social upheaval brought on by the Industrial Revolution
and saw the emerging forms of organization as having
broad implications for managers and society. Adhering to a
perspective that viewed society as becoming increasingly
rational in its activities, Weber believed that organizations
would become instruments of efficiency if structured
around certain guidelines. In order to study this movement
towards "rationality" of organizations, Weber constructed
an ideal type, termed a bureaucracy that described an
organization in its most rational form.

Because of the emphasis on efficiency that had developed

around the turn of the 20th century, many management
scholars and practitioners interpreted Weber's writings on
bureaucracy as a prescription for organizing. Weber,
however, was more interested in developing his
bureaucratic type as a method for comparing
organizational forms across societies. While he did not
believe any organization would perfectly conform to the
dimensions that compose his bureaucratic model, Weber
felt that some organizations would come closer than
others. The closer to the bureaucratic type, the more
rational society was becoming, and it was Weber's interest
in the rationality of social life that directed his attention to
the study of organizations.

1.

2.

3.
4.

5.

6.
7.

8.

Weber not only enumerated the characteristics of

bureaucracybut also analyzed the forms of authority in
organizations:
Rulification & routinization - effort-saving rules and equal
treatment
Specific spheres of competence - clear division of labor,
specialization
The principle of hierarchy - leave no office uncontrolled
Expertise of office holders - managers to have technical
training
Written record-keeping - everything to be recorded & filed,
red tape
Charismatic - an appeal to emotions and affections, charisma
Traditional - the sanctification of tradition, habit
Rational-legal - valuation of something because it embodies
an ultimate value or a disinterested, professional attitude of
valuation toward a thing for its own sake

Quantitative Approach to Management

The advent of World War II introduced a

new set of problems related to the
practice of management. Submarine
warfare was introduced, as was the
massive deployment of airplanes as a
means of attack. These developments
made the conduct of war more complex
and reduced the margin of error that
one could afford militarily.

With Great Britain confronting the

prospect of defeat, the British formed
an operations research team consisting
of mathematicians, physicists, and
other experts to develop methods for
countering the German offensive.

The team was able to develop

sophisticated mathematical models
that could simplify scenarios of attack
and counterattack and thus reduce
tactical errors by military commanders.
These models, based on mathematical
equations, were credited with assisting
the British military in effectively staving
off the German attack.

After World War II was over, interest in

the application of operations research
technology to industry began to
emerge. This interest was accelerated
by advances in computer technology
that increased the speed with which
many of the complicated mathematical
models could be solved. In particular,
operations research models were
applied to solve production problems.

Mathematical models were used to

simulate a production problem,
bringing to bear all the relevant factors
affecting that problem. The values of
these factors could be changed to
develop different scenarios in the
search for a solution.

For example, a manager might be

interested in the effect that delays in
shipments of raw materials have on the cost
of producing a good. By changing this
variable in the equation, production costs
under different scenarios can be estimated
and managers can then make moreinformed decisions on how to deal with this
problem situation.

While operations research has provided

management with a valuable tool in the
planning and control of production
activities, mathematical models have yet to
account effectively for human behaviors.
The difficulty, of course, is that the human
factor is not as easily quantified as
inanimate phenomena.

Quantitative Theory of Management

The quantitative Theory of management

emphasizes the use of mathematical and
statistical techniques in management and
focuses on finding right answers to
managerial problems, which are solved
through decision making. The theory is based
on Operations Research as its main technique.
Quantitative Theory is also referred as
mathematical approach, decision theory
approach, operations research approach and
management science approach.

The theory came into focus during and after

World War II. The critical exigencies of War
necessitating the building of optimal solutions
to militant and logistics problems, was sought
to be solved through mathematical model
building by inter-disciplinary scientists. They
applied scientific research in their bid to find
most suitable answers to problems of
strategic and tactical military operations and
optimal decisions about the deployment of
military resources.

Extensive application of Operations

Research brought forth new techniques like
Linear Programming, Queuing theory, Game
theory, Probability theory, Sampling theory,
critical path, Program evaluation and review
technique, etc.

The theory stresses the importance of

diverse decision situations and the
means of perfecting them. It precludes
thumb rules or acting through intuition,
but recommends the process of optimal
decision-making assembling accurate
and reliable data with quantitative
precision and perfection.