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The industrial revolution and rise of the factory (England, 1750)

Small entrepreneurial organization before industrial revolution Advances in technology fueled the Industrial Revolution in England

The invention of the steam power was particularly important Steam power enabled the opening of large textile mills where the cloth was made on powered looms

Industrial revolution (contd)

The introduction of factory led to the need to organize work through specialized tasks workers

Industrial revolution (contd)

The growth of factories also required the organization and supervision of workers Workers came to work in factories instead of working at home Small factories could be managed by the owners, but larger factories required hiring supervisors Supervisors were generally promoted from the ranks of workers due to their technical skills as well as there peacekeeping skills.

20th Century: Age of modern management

An era of great scientific advances, and of social change There was tremendous excitement about what the new century would bring

The Setting America at the turn of the 20th century

The typical worker has less than a 6th grade education in a population of 58 million, there were only about 15000 college graduates each year the industrial emphasis in the US was now on manufacturing rather than agriculture There was a surfeit of available labor.

when new problems related to the factory system began to appear.

Managers were unsure of how to train employees (many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so they began to test solutions. As a result, the classical management theory developed from efforts to find the one best way to perform and manage tasks.
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CLASSICAL SCHOOL OF MGMT EMERGED

As the companies grew, and as competition became more intense, managers needed new ways to cut costs and boost efficiency People needed better management theories and so the classical school of management emerged
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Classical Management Theory

Classical Management Theory
A theory that focused on finding the one best way to perform and manage tasks

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Classical Scientific School

Frederick W. Taylor

father of scientific management. He believed that organizations should study tasks and develop precise procedures.

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As an example, in 1898, Taylor calculated how much iron from rail cars Bethlehem Steel plant workers could be unloading if they were using the correct movements, tools, and steps. The result was an amazing 47.5 tons per day instead of the mere 12.5 tons each worker had been averaging.
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He also developed an incentive system that paid workers more money for meeting the new standard. Productivity at Bethlehem Steel shot up overnight. As a result, many theorists followed Taylor's philosophy when developing their own principles of management.

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Classical Scientific School

Frederick W. Taylor

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The Father of Scientific Management

Pursued four key goals:
Develop a science of management Select workers scientifically Develop and train workers scientifically Create cooperation between management and labor

Determined the quickest ways to perform tasks

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In 1920s business environment changed

People moved from farms to cities and become more depend on each other (social) Jobs became more specialized and interdependent Government become more involved in economic matters Reformers established minimum wage and encouraging trade unions

Hard work , individualism and maximizing profit questioned?-building blocks of classical mgmt!

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The Foundations Of Modern Management (contd)

The Behavioral School

The Hawthorne plant Studies-in 1927 (Western Electric Co) Harvard university researchers isolated employees and they change lunch brakes, ventilation , lightning etc

Researchers found

it was the social situations of the workers, not just the working conditions, that influenced behavior at work. performance depend on other factors than rate of pay and working conditions
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Hawthorne effect and changing environment

The researchers discover that the employees were feeling themselves special under observation-called Hawthorne effect! Employees behavior at work can not be programmed Companies started to make more R&D activities diversify and increase their product lines(produce different products)

forced them to set up separate divisions and empower lower level managers Motivate their employees
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The Human Relations Movement

Because of the Hawthorne findings and the other social changes taking place after World War II, managers started taking a much more people oriented approach to managing employees workers were not just givens in the system.

Workers have needs and desires that organizations have to accommodate.

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The Quantitative/Management Science School

The Management Science Approach

Operations Research/ Management Science

Seeks optimal solutions to management problems through research and the use of scientific analysis and tools. (e.g.) Industrial engineers solve inventory control problems.

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Systems Management Theory

Systems School
The theory that an organization comprises various parts that must perform tasks necessary for the survival and proper functioning of the system

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The Organization as a System

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Contingency Management Theory

Contingency School
A theory based on the premise that managers preferred actions or approaches depend on the variables of the situation they face

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Contingency Management Theory

Approaches depend on the variables of the situations Draws on all past theories in attempting to analyze and solve problems Is integrative Summarized as an it all depends device Tells managers to look to their experiences and the past and to consider many options before choosing Encourages managers to stay flexible
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