Management Theories: Evolution, Key Concepts, and Prominent Figures, Lecture notes of Business Ethics

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What Is Management?

 Management is a distinct

process of planning,

organizing, staffing, directing

and controlling (POSDICON),

performed to determine and

accomplished stated

objectives by the use of

human being and other

business resources.

Figure 2.1 The Meaning of Management

MEN

MONEY

MATERIALS

MACHINES

METHODS

MARKET

PLANNING ORGANIZING STAFFING

DIRECTING CONTROLLING

SOCIAL RESPONSIBILITY PROFIT

Basic Resources 6 M’s

FUNDAMENTAL FUNCTIONS THE PROCESS OF MANAGEMENT

OBJECTIVES END-RESULT

FUNCTIONS OF MANAGEMENT

O Planning O Refers to the formulation of objectives, programs, policies, procedures, rules and regulations, in order to achieve the goals of the business.

Rank and File Owner - Manager 1–

THINKING

DOING

100

0 Percentage of time spent on daily work activities

FUNCTIONS OF MANAGEMENT

O Grouping together of people, establishing relationship among them, and defining the authority and responsibility that the personnel have in the use of the company’s material resources to attain predetermined goals and objectives.

O The identification or grouping of work to be done, the delegation of authority and responsibility, and the establishment of relationships among them in order to use to maximum advantage the company’s material resources in the attainment of a common objective.

• Organizing

FUNCTIONS OF MANAGEMENT

O Involves motivation, leadership styles and approaches and communication.

• Directing
• Controlling

 The process of measuring and correcting the activities of subordinates and the company itself to assure conformity to plans.

MANAGEMENT

 It results in the accomplishment of objectives through the use of human efforts.

• As an art

• As a science

 It is a systematic body of knowledge. It gathers and analyzes facts and formulates general laws or principle from these facts.

• As an art and as a science

 Therefore, management seeks to integrate into a unified, coordinated whole the essential factors that make up an organization.

Evolution of Management Theories

• The Classical or Traditional School (built on principles)

 Principles of Management by Henri Fayol

− A graduate of mining engineer, Fayol was a French industrialist who was first to issue a complete statement on a theory of general management. − Started as a janitor in 1860 he rose to become the executive of a coal mining and iron foundry company. In 1888, he took over as a managing director & turned the company into financially sound organization. − Greatest contribution was his discussion of management principles and elements;

Evolution of Management Theories

14 Principles of Management by Fayol

1. Division of Work
   • Assignment of specialized jobs to various departments and/or positions.
2. Authority and Responsibility
   • Related and inseparable Authority - the power or right entrusted to make the work possible Responsibility - the duty or work assigned to a particular position
3. Unity of Command
   • Employees should receive orders from one superior/manager only
4. Subordination of Individual Interest to General Interest
   • Interest of one employee or group of employees should not prevail over the interest of business.

Figure 2.3 The Organization Pyramid

TOP MANAGEMENT (President / Vice-President

MIDDLE MANAGEMENT ( Department heads, Section Chiefs, Supervisors, etc.)

LOWER LEVEL OR RANK (Clerks, Messenger, Typist, etc.)

Evolution of Management Theories

14 Principles of Management by Fayol

8. Stability of Tenure
   • Unnecessary labor turnover could be the cause and the effect of bad management
9. “Esprit de Corps”
   • Explains that “in union there is strength”
   • Emphasize the need for teamwork and the importance of communication in obtaining it
10. Span of Control
    • The specific and limited number of subordinates that a manager can effectively handle and control determined by the optimum level of effective supervision.

Evolution of Management Theories

• The Classical or Traditional School (built on principles)

 Scientific Management by Frederick Taylor

− An apprentice with the Enterprise Hydraulic Works, he joined Midvale Steel Company as a laborer in 1878. In 6 short years he rose to Chief Engineer. − Usually called the “father of time study” − Believed that a “mental revolution” would have to take place before management and workers could see that their positions were compatible.

Evolution of Management Theories

Taylor’s Four Principles of Scientific Management

1. Develop a science for each element of a man’s work, to replace the old rule-of-thumb method.
2. Scientifically select and train the worker.
3. Heartily cooperate with the men to ensure that all the work done is in accordance with the principles of science develop for the work.
4. Divide the work and the responsibility equally between

management and the workers.

Evolution of Management Theories

• The Classical or Traditional School (built on principles)

 The Gilbreths and Motion Study

− Emphasized the ideal motions required to perform a job in an optional fashion. − Analyzed the work of stonemasons-skilled work, he noticed that each worker was soon got tired because he had to bend continually to pick up bricks which were arranged in a small pile before him. − Focused on increasing worker productivity through the reduction of wasted motion − Developed the microchronometer to time worker motions and optimize performance.

Evolution of Management Theories

• Human Relations School (emphasize on human element)

 The Hawthorne Studies

− A series of productivity experiments conducted at Western Electric from 1927 to 1932 by Elton Mayo and his associates. O Experimental findings O Productivity unexpectedly increased under imposed adverse working conditions. O The effect of incentive plans was less than expected. O Research conclusion O Social norms, group standards and attitudes more strongly influence individual output and work behavior than do monetary incentives.