The Development Of Management Thinking Management Essay

Traditionally, the term “management” refers to the activities (and often the group of people) involved in the four general functions: planning, organizing, leading and coordinating of resources. Note that the four functions recur throughout the organization and are highly integrated. Emerging trends in management include affirmation that leading is different than managing, and that the nature of how the four functions are carried out must change to accommodate a new concept in management.

Development of Management thinking:

Over the past 100 years, management theories have changed and improved according to the mentalities, economic and social context and human expectations from the staff. Within a company, the leaders are people thinking in a long term view the future of the business. They set big aims and gain commitment with their staff; they represent the inspiration of the business. They make sure orders and tasks are well executed, so they think in a more short term view setting targets and objectives, look for maximizing resources, and help the employees to stay productive by motivating them.

Frederick W. Taylor and the Scientific Management (1856 – 1915)

The concept of the scientific management approach was introduced into the United States by Frederick W. Taylor considered the father of efficiency manufacturing, he developed an approach that encourages increasing production, improving employees’ working conditions and increasing earnings. His main involvement was to codify some principles earlier developed and used in well-managed European factories by stating them coherently and making them available to American factory managers. The heart of Taylor’s approach was to create a “mental revolution”, which assumed that managers would want to increase productivity and share those gains with the workers through easier work and improve material well being. Applying his philosophy on workers, he developed the following duties of professional managers:

To develop a science for each element of a worker’s job that would replace the old rule-of-thumb method.

Select, train, teach, and develop workers scientifically ( in the past, workers had chosen their own method of production and trained themselves as best they could)

Cooperate completely with employees to ensure that all work was accorded with the best available methods of operation.

Divide the work and responsibilities between management and workers.

Use incentive wages to motivate workers to produce more.

He developed an entire production and management system that was far ahead of its time. In fact, his contributions were partially responsible for the massive production systems during World War I and II. (http://www.businessweek.com)

Henry Fayol’s Administrative Management (1841 – 1925)

Administrative management focuses on the process of management concerned with setting goals and planning, organizing, commanding, coordinating, and controlling activities in such a manner that organizational objectives are achieved. Fayol’s most important contribution to management involved two fundamental concepts.

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The first one concerned the universality of basic management principles. These principles are applicable to all forms of organized human work. His second major concept was that there is a body of knowledge related to the functions of management that can, and should, be taught. This concept led to the development of a management discipline that can validly be taught at the college level. His ideas and concepts can be used as guidelines especially when using the contingency approach to management.

Max Weber and the bureaucracy (1864-1920)

Weber developed the concept of bureaucracy, whereby an organization is characterized as having specialized jobs, rigorous rules of behavior, clear-cut authority and responsibility relationships, employment and promotions based upon merit and seniority, and lifelong employment.

Douglas Mc Gregor’s theories X and Y – 1960.

Theory X and Theory Y are theories of human motivation given by Douglas McGregor in 1960s. In which work force is divided into two different types basing on their attitude towards work. X theory people are by nature lazy and they don’t complete the given task unless they are supervised. The Theory X manager tends to avoid work and just blame the outcome on others, which leads to the big industries not meeting the economies of scale.

In Y theory, management thinks their staff as active, ambitious, self-motivated, and exercise self-control. It is believed that these employees do work as a normal routine with ease. They have the problem solving abilities, given the problem these managers just take it understand it and accept responsibility in accomplishing the objective. Many people say Theory Y as a positive asset to the organization. They would allow a sharing of information between the subordinates which may lead to the growth of the organization.

The contingency approach

Experts agree that there is no best method of management. Instead, managers of today and the future will use the contingency approach, the assumption that different conditions and situations require the application of different management techniques. The contingency approach combines the best aspects of the other approaches, customizing management methods to different circumstances at any given time. Every management situation must be approached with an “it all depends” attitude. Contingency theorists attempt to explain what styles or approaches would best apply under different circumstances.

(http://www.scribd.com/doc/23835995/Organisational-Behaviour-Assignment-Management-theory-and-practice)

2. Time and Motion Study concept by F.W. Taylor:

In order to evaluate the industrial performance and the analysis of the time spent in going through the different motions of a job or series of jobs a concept of the scientific management approach was introduced into the United States by Frederick W. Taylor considered the father of efficiency manufacturing, who developed an approach that encourages increasing production, improving employees’ working conditions and increasing earnings. He is best known in the world of management for his study of time and motion. According to this method employee productivity standards can be established in which a complex task is broken into small and simple steps. The sequence of movements taken by the employee in performing those steps is carefully observed to detect and eliminate redundant or wasteful motion and precise time taken for each correct movement is measured. From these measurements production and delivery times and prices can be computed and incentive schemes can be devised.

He proposed four objectives of scientific management:

Replacing the old rule-of- thumb by developing a science for each element of a man’s work.

The management must select, train and develop the workers based on their efficiency instead of allowing them to choose their own task and train themselves as best they could.

The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures.

Sharing of work between workers and the management, each group taking over the work for which it is best fitted and can be done successfully and scientifically.

He developed a framework for organization like ‘incentive schemes for workers’, ‘task specialization’, ‘management by exception’, ‘finding the best practices’. His objectives and principles were implemented by many factories often increasing productivity by a factor of three or more. . Henry Ford applied Taylor’s principles in his automobile factories, and families began to perform their household tasks based on the results of time and motion studies.

Drawbacks of Scientific Management:

Scientific management had a positive effect on the industries and increased their productivity. But the basic duties of the employees towards work as skill, identifying the task and feedback were missing due to this management style. The workers don’t like being watched all the time and measuring their time by stopwatches, even there are cases where employees gone on strike where Taylorism has been tested.

2.1 Improvement of Time and Motion study by Gilbreth:

Frank and Lillian Gilbreth refined the Time and Motion study early in twentieth century with the purpose to eliminate unnecessary motions and to identify the best sequence of motions for maximum efficiency. Hence he preferred ‘Motion Study’ than Taylor’s ‘Time Study’. He studied the actions taken by workers at certain task with the aim of streamlining the processes involved. One of their most famous experiments involved analysing the work of bricklayers and significantly reducing the number of “operations” involved this change benefited both employers (increased productivity) and employee (decreased fatigue). He started with the building industry and observed that workers developed their own peculiar ways of working and no two used the same method. He also noted that individuals did not always use the same motions in the course of their work; these observations helped him to seek the best way to perform tasks.

Analysis:

When the evaluation of industrial performance is taken into account, analysis of the time spent in going through the different motions of a job or series of jobs. Time-and-motion studies were first instituted in offices and factories in the United States in the early 20th century. These studies came to be adopted on a wide scale as a means of improving the methods of work by subdividing the different operations of a job into measurable elements. Such analyses were, in turn, used as aids to standardization of work and in checking the efficiency of people and equipment and the mode of their combination. (http://www.businessdictionary.com/definition/time-and-motion-study.html)

3. Automobile manufacturer Henry Ford:

Ford Motor Company is an American multinational company incorporated in June 16 1903 by Automobile manufacturer Henry Ford in Detroit. They produce the famous brands Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin, and Volvo.

In 1908 he introduced Model T for $950. The Model T is the beginning of the Motor Age which served the purpose as a luxury item for the rich and essential transportation for the ordinary people. He revolutionized manufacturing by using innovative production techniques and realized huge gains in production implementing scientific management theory ‘Time and Motion Study’ developed by F.W. Taylor using constantly-moving assembly line, subdivision of labor and careful coordination of operations. This led to a change in production time of assembling his famous Model T car from 728 to 93 minutes thus the price was reduced to as low as $280. In 1900 the first commercial automobile – a delivery wagon was released also in 1932 he introduced “en-block” or one piece, V-8 engine. In 1942 he patented a plastic-bodied automobile car which is 30 percent lighter than the metal car.

3.1 Mass Production:

The method of producing goods in large quantities at low cost per unit is termed as Mass production existed in many industrialized nations back in eighteenth century. These mass produced goods are standardized by means of precision-manufactured, interchangeable parts. Basically it is a process governed by the factors like flow of materials through various stages of manufacturing, supervision of quality standards and division of labor to achieve high volumes. This concept was not fully utilized until Henry Ford refined it in early twentieth century. Ford’s success in producing the Model T automobile set the early standard for what mass production could achieve. With this Mass production became a dominant part of manufacturing in the world.

Analysis:

Ford always dreamt of producing an inexpensive car for great multitude. His strong determination made him study and observe the current production environment for five years and changed with his innovative idea of brining the new technology of mass production into manufacturing. For which he divided the task into smaller parts and devised the assembly line that delivered parts moving by hooks, overhead chains, or moving platforms to workers in the exact order needed for production to form the whole thing. Another important thing added to mass production system was the willingness to find the resourceful labor to work the assembly line. With the increase in efficiency brought the reduced cost per unit thus maximizing the profits of the organization. He soon doubled the labor wages and made 3 shifts a day with 8 hours per shift. Henry Ford became famous in automobile industry and soon became a world celebrity in shortest time with his unique idea of mass production into manufacturing. (http://www.answers.com/topic/mass-production)

4. using of Gantt’s chart in controlling production activities:

Henry Laurence Gantt (1861-1919) developed “Gantt charts” around 1920’s used to show the pictorial representation of the duration of tasks against actual progression of time. Gantt charts are useful in planning, scheduling and monitoring of project’s progress. The key factor for any organization is to plan for its future. One such tool is Gantt charts which aid in short term planning. Gantt charts are bar graphs with time on the horizontal axis and the resources scheduled on the vertical axis.

Gantt chart has many managerial uses helping to control the production activities:

Managers can use it as a summary overview of how organizational resources are being employed.

We can detect facts in which resources are consistently contributing to productivity and which are hindering it.

Managers can use the Gantt chart to help coordinate organizational resources. The chart can show which resources are not being used during specific periods, thereby allowing managers to schedule those resources for work on other production efforts.

Realistic worker output standards can be obtained from the chart.

Gantt charts are useful when the production process is fairly simple and the activities aren’t interrelated.

Mainly it is used to assess the progress on the project; this progress when compared with the expectations can help the management to take the corrective actions if needed.

4.1 Improvements to Gantt Charts:

Gantt charts does not support the following steps, if these can overcome then it is the best graphical tool to be represented for senior executive team in the organization to make instant decisions on the project progression.

Gantt Charts does not contain any information about the interrelationship of tasks to be performed such as can two tasks be performed simultaneously or with a gap of certain time etc therefore this is considered as a main draw back in implementing this technique.

For larger or complicated projects the graph becomes extremely long and unwieldy.

If there are numerous activities in a project the Gantt charts does not give the flexibility to implement a step by step task in identifying the critical and non critical tasks with the objective of preventing time frame problems.

Comparison of progress of two projects cannot be shown.

(http://www.pathways.cu.edu.eg/subpages/training_courses/planning_controlling/Chapter2.htm)

5. Globalization:

Globalization is an interaction and integration among the people, companies, and governments of different nations, a process given by international fair trade and investment and aided by information technology. It has effects on the environment, culture, political systems, economic development and prosperity, and human physical well-being in and around the world.

5.1 Impacts of Globalization:

The impact of globalization has been fair enough on the developing countries as people feel that it is a great force bringing the world closer together. It is mostly driven by corporations with the aim to seek maximum profits involving cheap labor. Free flow of information, ideas, technologies, goods, services and people led to economic integration through globalization.

The production base of a developing company increases due to capital flow across countries. Thus foreign capital inflow is playing an important role in the development of economy leading to employment opportunities in most of the countries.

It is allowing access to technology in developing countries thus eliminating poverty worldwide.

At the same time outsourcing is creating negative impacts by increasing jobs to the developing country and taking away jobs from the country that out sources.

Globalization is bringing westernization thus weakening the religious strength of a country.

Companies have setup industries causing pollution in countries with poor regulation of pollution.

The increase in prices has reduced the government’s ability to sustain social welfare schemes in developed countries.

(http://business.mapsofindia.com/globalization/impact.html)

6. Carter Goodrich’s idea of “Frontier of control”:

Carter Goodrich an economist known for promoting his idea of “Frontier of control”.

He was born in 1897 in New Jersey, graduated in economics and awarded fellowship to visit United Kingdom to study labour problems. He was supervised by the economist Henry Clay and Tawney. Clay promoted Goodrich to study phenomenon of workers control of Industry. Goodrich wrote up his research and published it as “The Frontier of Control: A study in British Workshop Politics”.

The scientific management claims a mutual interest between capital and labour; workers and managers, exploitation attempts by employers to gain control of the labour process. So Carter thought that there should be a need to build up Management – Worker relations and developed “The Frontier of Control”.

7. Matrix Organization Structure:

The Matrix Organization is to combine the benefits of pure functional and product organizational structure. This structure is identically suited for construction and project driven companies. In this kind of structure staff has to report to two bosses, one being the head of the department in which they are working i.e. functional structure and the other being the leader or the coordinator of the project i.e. depicting the product structure. This structure helps the organization to run smoothly according to the projects that have to be completed by the employees at a given point of time. The organizational structure starts from the General Manager of the company and drills down to heads of production, research and development and marketing departments etc. The activities of the staff on each project are effectively coordinated by all levels of management. Information sharing is mandatory and the available information is exchanged across the departments. Each member of the staff is clearly defined with the functions of the departments they are coordinating with and also the accountability is expected from every link in the chain for its smooth functioning. (http://www.visitask.com/matrix-organization.asp)

7.1 Circumstances requiring a Matrix Organizational Structure:

If the organization is small then the entrepreneur can make quick decisions, but suppose the organization is growing big then there is an unexpected delay in making decisions thus leading to inability in management therefore a change in structure is needed.

The traditional structure was to divide the organization into functional areas such as marketing, sales, finance, production etc where each department has many layers to reflect distribution of responsibility and authority. This kind of structure is more suitable for single product firms and failed due to its inability to change and meet new demands.

Then the Divisional structure was adopted in most of the companies reducing the management layers. Within each division marketing, production and other staff would work on the same projects. This also resulted as a failure due to lack of co-ordination if division grow too large and higher costs as activities such as marketing will be replicated in many divisions.

Finally the modern companies are adapting to Matrix structure, this approach involves organizing the management of task along lines that cross normal departmental boundaries. Each team member can end up with two bosses and once the project is finished the team will be disbanded or moved to other projects. It has the following advantages:

Key personnel in the organization are shared thus reducing the project cost.

The problems related to the project are handled by the project manager at the low level without the interference of the senior management team.

There is a better balance between time, cost and performance.

(http://www.revisionguru.co.uk/business/design.htm).

7.2 Example of Matrix Structure adapted by Starbucks:

Starbucks Company was founded in 1971 in Seattle. They are the world’s leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim.  Approximately 35 million customers visit a Starbucks coffeehouse each week.

Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment primarily through its company-operated retail stores.  In addition to sales Starbucks sells whole bean coffees through a specialty sales group and supermarkets.

Organizational Structure:

Starbucks used the design of a matrix configuration by combining divisional and functional structures.

Chief Executive

IT Dept

Marketing Dept

Purchase Dept

Finance Dept

Finance Dpt Head

IT Dept Head

Marketing Dpt Head

Purchase Dpt Head

Project Lead A

Project Lead B

Manager

Manager

Supervisor

Supervisor

Staff

Staff

Description:

Say Starbucks is handling two projects A and B monitored by the project leads, Manager and a Supervisor. Project leads and Manager in turn report to the head of the divisional departments involved in the project who in turn report to the Chief Executive.

Manager handles functional responsibilities needed for the staff like the infrastructure, salaries, promotions and dealing with the clients. Whereas the Project lead is responsible for the project specification, in time completion of the project, testing and publishing of the project. The teams are temporarily formed and will be dismantled once the completion of the project.

8. Conclusion:

Management theories strongly influence today’s management practices, but this will not determine the fact that a manager is competent or not in his job. In nowadays context, especially currently with the credit crunch, a manager not only needs to respond to his team need, he needs to prevent it. He doesn’t only need to motivate them in their work, but to imply them at work as if it was in their private life; he needs to make them feel like part of the company’s big family.

Every manager must think innovatively for the progress of the organization and follow the best aspects, customizing management methods to different circumstances at any given time.