1. Adam smith argued the economic advantages that organizations and
society would gain from the division of labor, which is breakdown of jobs into narrow and repetititve tasks.
2. Starting in late eighteenth century when machine power was substituted for human power, it became more economical to manufactor goods in factories than at homes. The factories needed managers to forecast demand, ensure that enough material was on hand to make products, assign tasks to people, and direct daily activities.
Classical Approach These classical approaches emphasized rationality and making organizations and workers as efficient as possible.
1. Scientific Management theory: There are two theories for scientific management. a. Frederick W. Taylor theory: He uses scientific methods to define one best way for a job to done: Scientifically study each part of a task and develop the best method of performing the task. Scientifically select and then train, teach, and develop the worker. Heartily cooperate with the workers. Divide the work and responsibilities equally between the management and workers. b. Frank and Lillian gilbreth: Focused on increasing worker productivity through the reduction of wasted motion, this is why they developed the microchronometer to time workers motions and optimize work performance. It is still used today where they use time and motion study to eliminate wasted motion and hire the best-qualified workers for a job or design an incentive system based on output.
2. General Administrative theory: looking at management from the perspective of the entire organization. This approach focuses more on what managers do and what constituted good management practice. Most notable behind it are henri fayol and max weber. a. Henri Fayol: focuses more on all managers, developed 14 principles of management which are rules of management that could be applied at all situations. 1) Divison of work: specialization increases output by making employees more efficient 2) Authority: managers must be able to give orders and authority give them this right 3) Discipline: employees must obey and respect the rules 4) Unity of command: receiving orders from only one supervisor 5) Unity of direction: organization must have a single plan of action to guide manager and workers. 6) Subordination of individual interests to the general interest: the interests of any one employee or group of employees should not have priority over the interests of the organization as a whole 7) Remuneration: workers must be paid a fair wage for their services 8) Centeralization: the degree to which subordinates are involved in decision making 9) Scalar chain: the line of authority from top management to the lowest ranks 10) Order: people and material should be in the right place at the right time 11) Equity: managers should be kind and fair to their subordinates 12) Stability of tenure of personnel: management should provide orderly personnel planning and ensure that replacements are available to fill vacancies 13) Initiative: employees who are allowed to originate and carry out plans will exert high levels of effort. 14) Esprit de corps: Promoting team spirit will build harmony and unity within the organization.
b. Max Weber: he developed a theory of authority structures and relations based on an ideal type of organization he called a bureaucracy, a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. It is not used as it was before, many managers feel that a bureaucratic structure hinders individual employees creativity and limits the organizations ability to respond to increasingly dynamic environments.
A bureaucracy should have: Division of labor: jobs broken down into simple routine and well defined tasks where everyone is specialized. Authority hierarchy: positions organized in a hierarchy with a clear chain of command Formal selection: people are selected for jobs based on technical qualification Formal rules and regulations: system of written rules and standard operating procedures Impersonality: uniform application of rules and controls. Not according to personalities Career orientation: managers are career professionals not owners of units they manage.
Quantitative approach
It evolved from mathematical and statistical solutions developed for military problems during WWII. It involves applying statistics, optimization models, information models, computer simulations, and other quantitative techniques to management activities to improve decision making.
Total Quality management: A philosophy that devotes to continual improvement and responding to customer needs and expectation.
1) Intense focus on the customer: includes the outsider people who buy the products or services and internal people who interact and serve others in the organization. 2) Concern for continual improvement: it means that no matter how good it is, quality should ALWAYS be imporved. 3) Process focused: it focuses on work processes as the quality of goods are being improved. 4) Improvement on the quality of everything the organization does: relates to final product, how they handle delivery, how they respond to customers, how they answers phones politely. 5) Accurate measurements: the use of statistical techniques to measure every critical variable in the organizations operations. Identify problems, trace their roots, and eliminate the causes. 6) Empowerment of the employees: involves the people on the line in te improvement process.
The quantitative approach contributes directly to management decision-making in the areas of planning and control.
Behavioral Approach A field that researches the actions of people at work. Where it is believed that people were the most important assets of the organization and should be managed accordingly. Social norms or group standard, or security s are the key determinants of individual work behavior and his output. Employees should feel the sense of belonging and not always motivated by incentives. It has provided the foundation for our current theories of motivation, leadership, group behavior and development, and other behavioral approaches.
Contemporary Approaches Concerns on what was happening in the external environement outside the boundaries of the organization. There are two perspectives that take part of this approach:
1) System theory: a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. There are two types of systems, opened and closed. Closed systems: not influenced by and do not interact with their environment. Open systems: are influenced by and do interact with their environment. An example of open system is when an organization takes inputs from the environment such as raw materials, human resources, capital, technology, information, etc. and transform it in its system by enforcing it in its employees work activities, management activities, technology and operations methods. After the transforming process these organizations make these inputs into outputs such as products and services, financial results, information, human results. In our days, this is called a system.
Collabration between two departments are necessary to know what the customer wants and to be able on creating the products customers want.
In systems approach decision and actions in one are will affect the other are. And they are not self-contained; they rely on the environment for essential inputs.
2) Contingency approach: organizations are different, face different situations, and require different ways of managing. It says that there is no one universally applicable set of management principles by which to manage organizations. The contingency variables are: Organization size Routineness of task technology Environmental uncertainty Individual differences