HISTORICAL DEVELOPMENT OF OB

The Industrial Revolutions Influence On Management Practices

Industrial revolution
Machine power began to substitute for human power
Lead to mass production of economical goods

Improved and less costly transportation systems became available

Created larger markets for goods.

Larger organizations developed to serve larger markets

Created the need for formalized management practices.

The advent of modern industry resulted in:

Long hours of work Exploitation of woman and children No compensation for injury Machineries were not fenced

Evolution of Management Thought

Organizational Behavior Human Relations

Hawthorne Studies

Era of Scientific Management

Era of Welfarism

ERA OF WELFARISM

ERA OF WELFARISM- ROBERT OWEN

Father of Welfare and Co-operative Movement A Paternalistic attitude towards employees He introduced a form of Mental Revolution in the people The workers are not treated as commodities instead they were treated as people with flesh and blood

He improved the working conditions and developed a spirit of co-operation among the workers and management giving importance to their safety, welfare and security He introduced housing facilities and also provided education to workers and children

ERA OF SCIENTIFIC MANAGEMENT

CHARLES BABBAGE A Mathematician in Cambridge University He found out a Mathematical calculator in that he concealed an analytical machine and later this came to be the first modern digital computer

He is known in Management for publishing a book in 1832 titled On the Economy of Machines and Manufactures In the book he proposed using scientific method in analyzing business problems

He pointed out the importance of economic analysis in locating factories, Use of skill differentials in wage payment plans Concept of division of labour was introduced

Frederick.Winslow.Taylor
Father of Scientific Management
Advocated the use of the scientific method to define the one best way for a job to be done

Believed that increased efficiency could be achieved by selecting the right people for the job and training them to do it precisely in the one best way.

Four principles of Scientific Management

1. Develop a science for each element of an individuals work, which replaces the old rule-ofthumb method. 2. Scientifically select and then train, teach, and develop the worker. (Previously, workers chose their own work and trained themselves as best they could.) 3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. (Previously, almost all the work and the greater part of the responsibility were thrown upon the workers.)

Scientific Management Key Features

Introduction of standardized procedures including task completion times Emphasizes the productivity of the individual worker The search for the most appropriate and standardized method of performing a task Introduction of financial incentives to motivate staff Ensure full control of employees by supervisors and managers Separated managerial work from operative work.

F.W.Taylor conducted 2 important studies

Work Study
Time Study and Motion Study

According to F.W.Taylor
Each operation is a science Harmony of group action rather than discord Max. output using multi skilled workers Rate busters Scientific selection for training and placement of workers Taylor devised an incentive scheme ie., Fair Days Work and Fair Days Pay

Limitation
There is denial of human approach Workers are considered as cogs of the wheel

Henry.L.Gantt
He proposed the idea of Bonus for the worker for achieving the daily std To monitor progress of operations Gantt devised a simple charting system the Gantt Chart He improved upon Taylors system of differential wage payment and brought out Task and bonus Wage system In this incentive plan all are given minimum incentive and special sympathy for under privileged

The Scientific Management approach concerned itself with production efficiency at the blue-collar level of an organisation and at that time another body of thought developed

HENRI FAYOL
An engineer in French Mining Company He viewed management as a teachable theory dealing with Planning, Organizing, Commanding, Co-ordinating and Controlling

Industrial activities - 6 groups

Technical Commercial Financial Security Accounting Managerial

Fayols Fourteen Principles of Management

Division of work (Specialization) Authority Discipline Unity of Command Unity of direction Subordination of individual interest to the general interest Remuneration of personnel Centralization Scalar Chain Order Equity Stability of tenure of personnel Initiative Esprit de Corps

Hawthorne Studies

Hawthorne studies- Elton Mayo (1924-1932)

The real beginning of applied research in the area of OB started with Hawthorne expts In 1924, a group of Professors from Harvard Business School began an enquiry into the human aspects of work and working conditions at the Hawthorne plant of Western electric Company, Chicago which was engaged in producing bells and other electrical equipments for telephone industry

The study provided new insights into group norms and behaviors Hawthorne Studies have thrown light into, how characteristics of the work setting affected worker fatigue and performance

Series of experiments
Illumination study (Illumination & Productivity) Relay assembly test room (Change in working hours and working conditions) Mass interviewing prog (worker attitude and sentiments) Bank wiring observation room (Social aspect on work organisation)

The Hawthorne Studies

Illumination studies
Illumination studies constituted the first step of experiments Designed to test the effect of lighting intensity on worker productivity For the study the population were divided into experimental group and control group

Lighting was decreased in the experimental group and the conditions of lighting were kept constant for the control group to findout whether lighting has any impact on productivity The researchers were surprised to discover that productivity increased roughly at the same rate in both the groups The performance in the experimental group declined only when a light of moon light intensity was given, where they complained that they could hardly see anything

Relay Assembly Test Room Study

The study involved 5 women who assembled electrical relays in the relay assembly test room The researcher made certain changes in the work conditions They changed the usual supervisor arrangement from the scene The workers were asked to follow the directions of the researchers

The workers were given privileges like To leave their work situation without permission Free mid-morning lunch A five day work week Generally, productivity increased over the period of study, regardless of how the factors were manipulated

Mass interviewing programme

Investigate

connection between supervisory practices and employee morale Employees expressed their ideas and feelings (e.g., likes and dislikes)

Bank wiring observation room

A group of 14 men who wired telephone banks was observed in a standard shop condition An observer was stationed in the room with instructions to take continuous notes on the workers actions The observer was not allowed to give orders or get involved in conversations with the workers

The observer noted that the workers had established an informal daily norm of 6600 units per person even though some of the workers are able to excel the target

The incentive system was that the more the worker produced, the more money the worker could earn The best producers will be laid off last, and thus they could be more secure by producing more In the face of the management rationale, almost all the workers restricted output

The norms the group established were a number of don'ts Dont be a rate buster, Dont be a chiseler To enforce these they used various norms

Social ostracism, ridicule, and name calling, were the things used by the group to enforce restriction Binging was one game used whereby rate busters were disturbed

Thus the covert organisation prevalent in the formal organisation surfaced Social groups can influence production and individual work behavior

The Hawthorne Studies

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

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Hawthorne Effect
Hawthorne effect Social norms or standards of the group are the key determinants of individual work behavior.