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History of Management

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History of Management - The practice of management emerged long time back and the management functions and process were the subjects of serious study over many decades. - Many practitioners and scholars studied and analyzed the management process. - On the basis of their analysis and study various management principles were developed. - Practitioners wrote the book to explain the factors behind their success. Similarly, professional from different field contributed a lot for the development of management. - Why Theory? Provides a conceptual framework for organizing knowledge and providing a blueprint for action. - Management theories, used to build organizations, and guide them toward their goals, are grounded in reality. - Most managers develop their own theories about how they should run their organizations. Why History? An awareness and understanding of historical developments in management are important. - Furthers the development of management practices. - Avoiding the mistakes of others in the past. The development of management thought can be divided as - Classical Management Schools: Scientific Management School Administrative Management School - Behavioral Management School - Management Science School - System Approach - Contingency Approach 1. Classical Management Schools - Industrial revolution led to emergence of industrialization in western countries. - Many big industries were established with the great potential of mass production. - But there was a little knowledge about the factory and their functioning. - Hence the need of management of such organization became important - The early approaches to the study of management concentrated themselves with the production system. - They believed that managers should concentrate their attention and energies on increasing efficiency of the production process. ...read more.


- It is rigid - It is time consuming. - Top management is always overloaded - Deeply rooted feeling of competition, rivalry, - Emergence of conflict - Only top management can have overall picture of the organization Chester Bernard (1864-1920) - Former president of New Jersey Bell Telephone Company - Wrote "The Functions of the Executive." - Proposed a theory of the acceptance of authority (by subordinates) as the source of power and influence for managers. - Outlined the role of the senior executive into three major parts * Formulating the purpose of the organization * Hiring key individuals and * Maintaining organization communications - The recognition of the existence of "informal organization" and "team" was the new and exciting idea proposed by Bernard. Potential Benefits of Bureaucracy - Efficiency - Consistency - Functions best when routine tasks are performed - Performance based on objective criteria - Most effective when * Large amounts of standard information have to be processed * The needs of the customer are known and are unlikely to change * The technology is routine and stable (e.g., mass production) * The organization has to coordinate the activities of employees in order to deliver a standardized service/product to the customer Potential Costs of Bureaucracy - Protection of authority - Slow decision making - Incompatible with changing technology - Incompatible with 21st century workers' values for freedom and participative management Mary Parker Follett ( 1868-1933) - was a social philosopher - Published a book Dynamic Organization in 1942 Contribution and Limitation of Administrative Management Theory Contribution � Foundation for management thoughts � Identified important management functions � Introduced management as a valid subject of scientific inquiry. ...read more.


Contribution and Limitations Contributions - Highlighted the importance of information - Conceptualized the interactions of various parts of the organization - Emphasized on paying attention to all parts for organizational effectiveness. Limitation - Abstract thinking - Does not provide specific guidelines on the functions and duties of managers. 5. The Contingency approach to management - Suggests that each organization is unique. - The idea that the organizational structures and control systems manager choose depend on-are contingent on-characteristics of the environment in which the organization operates. - Assumes there is no one best way to manage. � The environment impacts the firm and managers must be flexible to react to environmental changes. - In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively. - It suggest the managerial behavior depends on various situational factors such as Size technology, environmental uncertainty, individual uncertainty, individual differences, geographical spread of the organization, etc - Contributors of this theory were Tom Burns, G.M. Stalker, Paul Lawrence, and Jay Lorsch. - This theory started taking shape in the years of 1960. Contingency Theory of Organizational Design Mechanistic Structure * Authority is centralized at the top. (Theory X) * Employees are closely monitored and managed. * Can be very efficient in a stable environment. Organic structure * Authority is decentralized throughout the organization. (Theory Y) * Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment. Contribution and Limitations Contributions - Helped to modify various management concepts - Provided important turn in management Limitations - Failed to identify all important contingencies. (The situational characteristics are called contingencies) - May not be applicable to all managerial level and all managerial issues. ...read more.

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