O slideshow foi denunciado.
Seu SlideShare está sendo baixado. ×
Próximos SlideShares
Management thought
Management thought
Carregando em…3

Confira estes a seguir

1 de 65 Anúncio

Mais Conteúdo rRelacionado

Semelhante a HSM-2.ppt (20)

Mais recentes (20)



  1. 1. 04/02/2023 HSM 2 by Dr Mesfin Addisse 1 UNIT 2:  History of Management Thought- The Evolution of Management Theory Learning Objectives :  Understand the historical context how the different management theories developed.  Distinguish the different approaches of management theory.
  2. 2. 04/02/2023 HSM 2 by Dr Mesfin Addisse 2 The History of Management Thought- …  Management and organizations are products of their historical and social times and places. Thus  the need to understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular times in history.  Let us compare different ages  Formal organizations existed for many centuries. such as:  The Greek and Roman armies,  The Roman Catholic Church,  Period of industrial revolution,  Early 1900’s
  3. 3. 04/02/2023 HSM 2 by Dr Mesfin Addisse 3 The History of Management Thought- … o Did we have similar management experience in Ethiopia and Africa?  The Axum monument  The Lalibela rock hewn churches is the result of systematically managed effort.  The Adwa battle  The Egypt’s great pyramids:  mobilized human and material resources mobilize 100,000  have to plan ,implement , ,coordinate , control and report. What is our problem then?
  4. 4. 04/02/2023 HSM 2 by Dr Mesfin Addisse 4 The History of Management Thought- … Our problem in terms of documentation.  They write, we did not .Still we do not.  Shall we?  Few times if we write (rather talk), based on what?  Two examples (Stoner) of attempts how to make organizations efficient and effective since long before terms such as management came into common usage:  Writings of Machiavelli and Sun Tzu considered as strategists
  5. 5. 04/02/2023 HSM 2 by Dr Mesfin Addisse 5 The History of Management Thought- … 'Machiavellian' is often used to describe cunning and manipulative opportunists .  Machiavelli was a great believer in the virtues of a republic. Machiavelli wrote in 1531  An organization is more stable if members have the right to express their differences and solve their conflicts within it  While one person can begin an organization, "it is lasting when it is left in the care of many and when many desire to maintain it."  A weak manager can follow a strong one, but not another weak one, and maintain authority.  A manager seeking to change an established organization "should retain at least a shadow of the ancient customs."
  6. 6. 04/02/2023 HSM 2 by Dr Mesfin Addisse 6 The History of Management Thought- …  The Art of War, written by the Chinese philosopher Sun Tzu more than 2,000 years ago. It was modified and used by Mao Zedong,  When the enemy advances. we retreat!  when the enemy halts we harass!  When the enemy seeks to avoid battle, we attack!  When the enemy retreats, we pursue! Today these rules are being used when planning a strategy to engage business competitors.
  7. 7. 04/02/2023 HSM 2 by Dr Mesfin Addisse 7 The Management Theories…. WHY STUDY MANAGEMENT THEORY?  A theory: is a coherent group of assumptions put forth to explain the relationship between two or more observable facts.  Theories are perspectives with which people make sense of their world experiences.  What will happen if we do not have theories?  Frustration  in dealing with other people, one has always to define even the most basic assumptions.
  8. 8. 04/02/2023 HSM 2 by Dr Mesfin Addisse 8 The Management Theories….  Thus theories:  provide a stable focus for understanding what we experience.  provide criteria for determining what is relevant.  help us to communicate efficiently and thus move to more complex relationships with other people.  Theories make it possible and challenge us to keep learning about our world.  Theories have boundaries and everything can not be covered by any one theory.  Thus there is a need for alternative theories and consideration of the consequences of adopting alternative beliefs as theories do not work or our theories no longer seem to "fit" our experience  The environment is changing.
  9. 9. 04/02/2023 HSM 2 by Dr Mesfin Addisse 9 The Management Theories….  Why evolution of Management Theory ?  Evolution of management theory because  it developed in bits and pieces over the years  so many people contributed to the theory and practice  As an academic study relatively new because before the 1900 it was only given in 3 universities unlike chemistry or astronomy.  Management has inter disciplinary nature: with different fields history geography , psychology , health, education and including religions etc.  Each discipline and professionals used, interpreted, and reformulated management according to their own perspective .
  10. 10. 04/02/2023 HSM 2 by Dr Mesfin Addisse 10 The Management Theories. Why evolution.…. As a result with each new perspective have come new questions and assumptions ,  new research techniques ,  different technical jargons and  new conceptual frameworks. AS a result :  There is no universally accepted theory of management. i.e. there is yet no verified general theory or set of laws for management that we can apply to all situations.  Knowing the evolution help us to know how it was, how it is now and where it is heading  Despite the emerging new assumptions later ideas have not replaced earlier ones. Instead, each new school has tended to complement or coexist with previous ones.
  11. 11. 04/02/2023 HSM 2 by Dr Mesfin Addisse 11 The Management Theories. Why evolution.….  At the same time, each school has continued to evolve, and some have even merged with others. Example: The integrative approaches:  the systems approach,  the contingency approach,  the dynamic engagement approach. Different Approaches to management theory  SCIENTIFIC MANAGEMENT THEORY  THE CLASSICAL PERSPECTIVE  Operational approach
  12. 12. 04/02/2023 HSM 2 by Dr Mesfin Addisse 12 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL  Production-oriented field of management dedicated to improving efficiency and minimizing waste.  focuses on ways to improve the performance of individual workers (the only way to increase productivity was to increase the efficiency of workers.).  Frederick W. Taylor (1856-1915): father of the scientific management school.  To increase efficiency by scientifically designing jobs Major premises  there is always one best way and has to be discovered and put in action  workers job can be reduced to a science
  13. 13. 04/02/2023 HSM 2 by Dr Mesfin Addisse 13 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL: F. Taylor  Science of shoveling : based his management system on production-line time studies.  analyzed and timed steel workers' movements on a series of jobs. Using time study as his base.  broke each job down into its components and designed the quickest and best methods of performing each component.  established how much workers should be able to do with the equipment and materials at hand.  encouraged employers to pay more productive workers at a higher rate than others, using a "scientifically correct" rate that would benefit both company and worker.  Thus, workers were urged to surpass their previous performance standards to earn more pay. This is the differential rate system.
  14. 14. 04/02/2023 HSM 2 by Dr Mesfin Addisse 14 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL: F. Taylor …….  Frederick W. Taylor saw workers soldiering or deliberately working beneath their potential and designed a 4-step method to overcome this problem 1. breaking the job into its smallest pieces. 2. to select the most qualified employees to perform the job and train them to do it. 3. supervisors are used to monitor the employees to be sure they are following the methods prescribed. 4. continue in this fashion, but only use employees who are getting the work done.
  15. 15. 04/02/2023 HSM 2 by Dr Mesfin Addisse 15 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL: F. Taylor…..  In summary : the four principles are  Development of a true science management.  Scientific selection of workers.  Scientific education and development of workers.  Intimate, friendly cooperation between manager and labor.  According to Taylor  the success of these principles required "a complete mental revolution" on the part of management and labor.  Avoid quarrel over profits, and rather try to increase production because both (labor & management) had a common interest in increasing productivity.
  16. 16. 04/02/2023 HSM 2 by Dr Mesfin Addisse 16 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL : HENRY L. GANTT (1861-1919) worked with Taylor  Gantt reconsidered Taylor's incentive system.  Abandoned the differential rate system as having too little motivational impact.  Every worker who finished a day's assigned work load would win a 50-cent bonus.  Supervisor would earn a bonus for each worker who reached the daily standard, plus an extra bonus if all the workers reached it.  This would spur supervisors to train their workers to do a better job.  Every worker's progress was rated publicly and recorded on individual bar charts,--in black on days the worker made the standard, in red when he or she fell below it.
  17. 17. 04/02/2023 HSM 2 by Dr Mesfin Addisse 17 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL :Henry Gantt….  Gantt originated the "Gantt chart“-which is a way to schedule work or a charting system for production scheduling ”THE GILBRETHS”- Frank B. and Lillian M. Gilbreth (1868-1924 and 1878-1972)  a husband and wife team  helped to find more efficient ways for workers to produce output.  Work on fatigue and motion studies  focused on ways of promoting the individual worker's welfare.
  18. 18. 04/02/2023 HSM 2 by Dr Mesfin Addisse 18 The Management Theories: THE SCIENTIFIC MANAGEMENT SCHOOL : THE GILBRETHS… They believed  the ultimate aim of scientific management was to help workers reach their full potential as human beings.  Motion and fatigue were intertwined: every motion that was eliminated reduced fatigue.  important contribution in the field of bricklaying.  Raise worker morale for obvious physical benefit and because it demonstrated management’s concern for the worker.  changed an 18-step process into a 5-step process and  increased productivity by about 200 percent.
  19. 19. 04/02/2023 HSM 2 by Dr Mesfin Addisse 19 The Management Theories: THE CLASSICAL ORGANIZATION THEORY SCHOOL  Scientific management was concerned with increasing the productivity of the shop and the individual worker While  Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factories.  Administrative management focuses on managing the total organization. CLASSICAL ORGANIZATION THEORY SCHOOL  focuses on managing the total organization.  concerned with the entire range of managerial performance  comprehensive analysis of management involves studying the management function as a whole
  20. 20. 04/02/2023 HSM 2 by Dr Mesfin Addisse 20 The Management Theories: CLASSICAL ORGANIZATION THEORY SCHOOL : HENRI FAYOL Henri Fayol (1841-1925)  founder of the classical management school  organizational functions Vs the total organization  Taylor was basically concerned with organizational functions  Fayol was interested in the total organization.  Faith in scientific methods,  investigate managerial behavior and tried to systematize it.  believed that sound management practice falls into certain patterns that can be identified and analyzed.  From this basic insight, he drew up a blueprint for a cohesive doctrine of managers
  21. 21. 04/02/2023 HSM 2 by Dr Mesfin Addisse 21 The Management Theories: CLASSICAL ORGANIZATION THEORY SCHOOL : HENRI FAYOL…… Henry Fayol's universal approach assumes  that all organizations, regardless of purpose or size, require the same management process.  And this rational process can be reduced to separate functions and principles of management.  Fayol believed that management is a skill like any other- one that could be taught once its underlying principles were understood. Managers are nurtured than born (nature).  The first to identify the four management functions: planning, organizing, leading, and controlling.  he developed guidelines for managers to follow. These guidelines form fourteen principles for effective management.
  22. 22. 04/02/2023 HSM 2 by Dr Mesfin Addisse 22 Theories: CLASSICAL ORGANIZATION THEORY SCHOOL : Fayol’s 14 Principles of management 1.Division of Labor. The more people specialize, the more efficiently they can perform their work.  Effort and attention are focused on special portion of the task.  Work specialization is the best way to use human resource.  This principle is observed by the modern assembly line. 2.Authority. Managers must give orders so that they can get things done.  Authority and responsibility should be closely related. 3.Discipline. Members in an organization need to respect the rules and agreements that govern the organization.
  23. 23. 04/02/2023 HSM 2 by Dr Mesfin Addisse 23 Theories: CLASSICAL ORG. THEORY . : Fayol’s 14 Principles……  discipline results from good leadership at all levels of the organization, judiciously enforced penalties for the sake of promoting common efforts. 4.Unity of Command. Each employee must receive instructions from only one person. reporting to more than one manager, conflicts in instructions and confusion of authority 5.Unity of Direction. The entire organization should be moving toward a common objective, in a common direction.
  24. 24. 04/02/2023 HSM 2 by Dr Mesfin Addisse 24 Theories: CLASSICAL ORG. THEORY . : Fayol’s 14 Principles…… 6.Remuneration. Consideration of variables such as cost of living, success of the organization etc. to determine rate of payment to both employees and employers. 7.Subordination of Individual Interest to the Common Good. In any undertaking, the interests of employees should not take precedence over the interests of the organization as a whole. 8.Centralization. Decreasing the role of subordinates in decision making is centralization; increasing their role is decentralization.  Fayol believed that managers should retain final responsibility,  but should at the same time give their subordinates enough authority to do their jobs properly.
  25. 25. 04/02/2023 HSM 2 by Dr Mesfin Addisse 25 Theories: CLASSICAL ORG. THEORY . : Fayol’s 14 Principles……  The problem is to find the proper degree of centralization in each case. 9.The Hierarchy. Lower line managers should always inform upper level managers. 10.Order. To increase efficiency and coordination ,materials & people should be in the right place at the right time.  People, in particular, should be in the jobs or positions they are most suited to. 11.Equity. All employees should be treated equally. 12.Stability of Staff. Retaining productive employees should always be a high priority of management. A high employee turnover rate undermines the efficient functioning of an organization.
  26. 26. 04/02/2023 HSM 2 by Dr Mesfin Addisse 26 Theories: CLASSICAL ORG. THEORY . : Fayol’s 14 Principles…… 13.Initiative. Subordinates should be given the freedom to conceive and carry out their plans, even though some mistakes may result. Encourage employees to do through self direction. 14.Espirit de Corps. Promoting harmony and team spirit among members to give the organization a sense of unity. Even small factors should help to develop the spirit .  For example, the use of verbal communications instead of formal, written communication whenever possible. • Are managers born or made ?  Before Fayol, it was generally believed that "managers are born, not made."  Fayol insisted, management was a skill like any other-- one that could be taught once its underlying principles were understood.
  27. 27. 04/02/2023 HSM 2 by Dr Mesfin Addisse 27 Theories: CLASSICAL ORGANIZATION THEORY SCHOOL : MAX WEBER (1864-1920)  a German sociologist  emphasis how organizational resources are best utilized to attain goals  he stressed the need for a bureaucratic organization marked by clear division of labor, a strictly defined hierarchy of authority, governed by clearly defined regulations and lines of authority.  sought to improve the performance of organizations by making their operations predictable and productive. Main efforts of organizing efforts should include 1.detailed procedures and rules 2. a clearly outlined organizational hierarchy and 3. mainly interpersonal relationship between organizational members.
  28. 28. 04/02/2023 HSM 2 by Dr Mesfin Addisse 28 Theories: CLASSICAL ORG.. THEORY..: MAX WEBER ……. He named the management system that contains these components to be a bureaucracy.  Bureaucracy: he believed that in its pure form bureaucracy represented an ideal or completely rational form of organization.  Do people do the way Weber wanted it?  Many did not do what Weber wanted. Main concepts  A consistent system of abstract rules  any goal-oriented organization consisting of thousands of individuals would require the carefully controlled regulation of its activities,  a continuous organization of official functions bound by rules  a system of rules ensures a rational approach to organization a degree of uniformity and coordination
  29. 29. 04/02/2023 HSM 2 by Dr Mesfin Addisse 29 Theories: CLASSICAL ORG.. THEORY …: MAX WEBER ……. the rationale for rules is  manager can use them to eliminate uncertainty in the performance of tasks due to differences between various individuals.  A set of rules and regulations helps in providing the continuity and stability an organization needs. Positions arranged in a hierarchy  the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority.  The lower one is under the control of the higher office.  Authority of a supervisor based upon expert knowledge  Authority decreases/ diminishes with succeeding level below thus resulting chain of command.
  30. 30. 04/02/2023 HSM 2 by Dr Mesfin Addisse 30 Theories: CLASSICAL ORG.. THEORY…: MAX WEBER ……. Specialization and division of labor  activities and objectives were rationally thought out and divisions of labor were explicitly spelled out.  Tasks necessary to accomplish goals are divided into highly specialized jobs. Rationale  Job holders  became experts in their jobs  Are responsible for their performance  THUS: Manager knows the exact limits of each sphere of competence in order to avoid interfering in spheres of others  technical competence  technical competence should be emphasized for employment and that performance evaluations should be made entirely on the basis of merit. Thus promotions on the basis of seniority and achievement.
  31. 31. 04/02/2023 HSM 2 by Dr Mesfin Addisse 31 Theories: CLASSICAL ORG… THEORY…: MAX WEBER …….  Impersonal relationships:  emotional attachments have to be avoided in decision making  Many think of bureaucracies as vast, impersonal organizations that put impersonal efficiency ahead of human needs.  But: Weber's model of bureaucratic management clearly advanced the formation of huge corporations such as Ford.  Although bureaucracy has been successful for many companies,  General Electric and Xerox have become "bureaucracy busters," why?  throwing away the organization chart and  replacing it with ever-changing constellations of teams, projects, and alliances with the goal of unleashing employee creativity.
  32. 32. 04/02/2023 HSM 2 by Dr Mesfin Addisse 32 The Management Theories: THE BEHAVIORAL SCHOOL:  Successful management depends largely on managers’ ability to understand and work with people who have a variety of backgrounds, needs, perceptions and aspirations.  The behavioral school emerged from the human relations movement which is an effort to make managers more sensitive to their employees’ needs  the classical approach did not achieve the needed efficiency and workplace harmony, people did not always follow predicted or expected patterns of behavior.  Thus: The behavioral approach to management emphasizes increasing productivity through understanding of people and adapt the organization to them (the “people side” of their organization).
  33. 33. 04/02/2023 HSM 2 by Dr Mesfin Addisse 33 Theories: THE BEHAVIORAL SCHOOL: THE HUMAN RELATIONS MOVEMENT  describe the ways in which managers interact with their employees.  The human relations movement arose due to historical influences  Threat of unionization  THE HAWTHORNE studies  Philosophy of industrial Humanism THE HAWTHORNE studies/experiments.  The human relations movement grew out of a famous series of studies conducted at the Western Electric Company from 1924 to 1933, near Chicago.  The influence of different working conditions (temperature, working hours, etc.) on productivity.
  34. 34. 04/02/2023 HSM 2 by Dr Mesfin Addisse 34 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: THE HAWTHORNE…….  The Hawthorne Studies began as an attempt to investigate the relationship between the level of lighting in the workplace and worker productivity.  The results  When the test group's lighting was improved or lighting conditions were made worse, productivity tended to increase.  the control group's output also rose even though it experienced no changes in illumination a. Subjects enjoy working in the test room b. The new supervisory relationship during the study allowed the workers to be free to work with out fear. Sympathetic supervision had further reinforced their motivation. c. they know they are part of an important undertaking and subjects become friendly because they had been
  35. 35. 04/02/2023 HSM 2 by Dr Mesfin Addisse 35 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: THE HAWTHORNE……. singled out for special attention, both the test and the control groups had developed a group pride that motivated them to improve their work performance. d. special relationship with the controls  Conclusion  The researchers concluded that employees would work harder if they believed 1. management was concerned about their welfare and 2. supervisors paid special attention to them. This phenomenon was subsequently labeled the Hawthorne Effect.  Informal work groups-the social environment of employees have a positive influence on productivity.  associations and friendships with co-workers influenced by their shared antagonism toward their bosses, giving meaning to their working lives and provided some protection from management.  group pressure was a stronger influencer of productivity than management demands.
  36. 36. 04/02/2023 HSM 2 by Dr Mesfin Addisse 36 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: THE HAWTHORNE…….  To Mayo, then, the concept of "social man“  "social man"-motivated by social needs, wanting rewarding on-the-job relationships, and responding more to work-group pressures than to management control-was necessary to complement the old concept of "rational man" motivated by personal economic needs. MARY PARKER FOLLETT (1868-1933)  One of the contributors of the classical school theory  introduced many new elements especially in the area of human relations and organizational structure.
  37. 37. 04/02/2023 HSM 2 by Dr Mesfin Addisse 37 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: MARY PARKER FOLLETT (1868-1933)  Thus initiated and gave insight for the emerging behavioral and management science schools.  Follett was convinced that no one could become a whole person except as a member of a group; human beings grew through their relationships with others in organizations. Believing in relationships  management "the art of getting things done through people."  Address coordination and the power of the group, where individuals could combine their diverse talents into something bigger.
  38. 38. 04/02/2023 HSM 2 by Dr Mesfin Addisse 38 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: MARY PARKER FOLLETT…… Advice:-  How to establish and maintain coordination with in the organization by addressing human element and communication  Do not consider coordination through close supervision.  Rather Coordination can be attained easily through direct horizontal and person communication  When coordination problem exists it can be solved with speaking peer workers  Coordination should be major for planning process & maintaining coordination should be a continuing process  Continuing because existence of coordination today does not mean for tomorrow
  39. 39. 04/02/2023 HSM 2 by Dr Mesfin Addisse 39 Theories: The Behavioral School: THE HUMAN RELATIONS MOVEMENT: MARY PARKER FOLLETT……  Like Taylor  labor and management shared a common purpose  but the artificial distinction between managers and subordinates obscured this natural partnership.  Strong belief in the power of the group, where individuals could combine their diverse talents into something bigger.  OTHER CONTRIBUTION Follett's "holistic" model  management meant more than just what was happening inside a particular organization. Rather management must take  into account not just individuals and groups, but the effects of such environmental factors as politics, economics, and biology.  The model paved the way for management theory to include a broader set of relationships, some inside the organization and some across the organization's borders.
  40. 40. 04/02/2023 HSM 2 by Dr Mesfin Addisse 40 CHESTER I. BARNARD (1886-1961)  The Functions of the Executive.  used his work experience and his extensive reading in sociology and philosophy to formulate theories about organizations. Major elements of his views  A. 1. people come together in formal organizations to achieve ends they cannot accomplish working alone. 2. But as they pursue the organization's goals, they must also satisfy their individual needs. Thus his central thesis: An organization operate efficiently and survive only when  the organization’s goals are kept in balance with the aims and needs of the individuals working for it.
  41. 41. 04/02/2023 HSM 2 by Dr Mesfin Addisse 41 BARNARD……..  B. Principle how workers can work in stable and mutually beneficial relationships over time.  In formal organizations to meet their personal goals people form informal groups such as cliques.  For its survival, an organization must use these informal groups effectively, even if they sometimes work at purposes that run counter to management’s objectives.  recognition of the importance and universality of this "informal organization" was a major contribution to management thought. C.  individual and organizations purposes could be kept in balance if managers understood an employee's zone of indifference :  what the employee would do without questioning the manager's authority.
  42. 42. 04/02/2023 HSM 2 by Dr Mesfin Addisse 42 BARNARD……..  the more activities fell within an employee's zone of indifference (what the employee would accept), the smoother and more cooperative an organization would be.  Executives had a duty  to instill a sense of moral purpose in their employees.  to learn to think beyond their narrow self-interest and make an ethical commitment to society.  D. role of the individual worker as "the basic strategic factor in organization. E.  organization is the cooperative enterprise of individuals, working together as groups  he set the stage for the development of a great deal of current thinking.  Today companies are increasingly using teams as the building blocks of the organization. Because
  43. 43. 04/02/2023 HSM 2 by Dr Mesfin Addisse 43 BARNARD……..  Today companies are increasingly using teams as the building blocks of the organization. Because  teams generally are self-managing, supervisory roles are limited.  Management provides direction by giving each team a common purpose and holds the teams accountable for measurable performance goals. F. Acceptance of authority  Organizational chart  the source of authority is not determined by a decree (Order) from the formal organization  but by weather or not authority is accepted by those existing under the authority .  Authority exists and exact obedience only if it is accepted.
  44. 44. 04/02/2023 HSM 2 by Dr Mesfin Addisse 44 BARNARD…….. Authority is accepted 1.if an individual understand the order being communicated 2. if an individual believes the order is consistent with the purpose of the organization 3. if an individual sees the order is compatible with his/her personal interests 4. if an individual is physically and mentally able to comply with order.
  45. 45. 04/02/2023 HSM 2 by Dr Mesfin Addisse 45 BARNARD…….. According to Bernard To increase acceptance of authority managers follow certain guidelines :  formal channels of communication used by the manager and are familiar to all members  each member has a formal organizational channel to receive orders  line of communication is direct between manager and employee  the chain of command is used to issue orders  manager possesses adequate communication skill  managers use formal communication lines only for organizational purposes  a command is authenticated as coming from a manager
  46. 46. 04/02/2023 HSM 2 by Dr Mesfin Addisse 46 THE MANAGEMENT SCIENCE SCHOOL Management science focuses specifically on using scientific methods and mathematical techniques to the development of mathematical models. These models help organizations to try out various activities with the use of a computer. Modeling can help managers locate the best way to do things
  47. 47. 04/02/2023 HSM 2 by Dr Mesfin Addisse 47 The Management Science School…. History: World War II, Great Britain and then USA. Formation of Operational Research (OR) Team to solve complex problems in Warfare using leading scientists. The teams used computers to perform the thousands of calculations involved in mathematical modeling. After the war Complicated industrial and transportation and communication technologies brought problems that could not be solved easily by conventional/usual means. Thus OR specialists to help managers come up with answers to these new problems.
  48. 48. 04/02/2023 HSM 2 by Dr Mesfin Addisse 48 The Management Science School…. OR procedures were formalized into the management science school. The management science school gained popularity through two postwar phenomena.  The development of high-speed computers and of communications among computers provided the means for tackling complex and large-scale organizational problems. Robert McNamara implemented a management science approach at Ford Motor Company in the 1950s and 1960s, Where "crunching the numbers" is the central way that management decisions are reached and justified; a mixed team of specialists analyze the problem and propose a course of action to management (see below).
  49. 49. 04/02/2023 HSM 2 by Dr Mesfin Addisse 49 The Manag.. Science Sch…. Robert McNamara…..  1.Observe the system  2. based on the observation the team constructs a mathematical model that shows, in symbolic terms, all relevant factors bearing on the problem and how they are interrelated. And consequences of chaining the system can be predicted  3. deducing/assuming/reasoning: use the model to deduce how the system will behave under conditions that have not been observed but could be observed if the changes were made  By changing the values of the variables in the model (such as increasing the cost of raw materials) and analyzing the different equations of the model with a computer, the team can determine the effects of each change.
  50. 50. 04/02/2023 HSM 2 by Dr Mesfin Addisse 50 The Manag.. Science Sch…. Robert McNamara…..  4. Testing : test the model by performing an experiment on the actual system to see if the effects of change predicted using the model actually occur when the changes are made.  Eventually, the management science team presents management with an objective basis for making a decision.  Importance  Management science forecasts the future based on the past and present  Managers can now deal with the "what if the future looks like this?“ questions that previous management theories could not handle.
  51. 51. 04/02/2023 HSM 2 by Dr Mesfin Addisse 51 The Manag.. Science Sch…. Robert McNamara…..  Limitations  Mathematical modeling tends to ignore relationships  Emphasis on only the aspects of the organization that can be captured in numbers, missing the importance of people and relationships.
  52. 52. 04/02/2023 HSM 2 by Dr Mesfin Addisse 52 INTEGRATING THE MANAGEMENT THEORIES THE SYSTEM APPROACH  A system is a number of interdependent parts functioning as a whole for some purpose.  The main premise /assertion/idea/basis of system theory is :  to understand fully the operation of an entity it must be viewed as a system.  the activity/modification of any segment of an organization affects, in varying degrees, the activity of every other segment. i.e. interrelatedness  each part has a role that helps the whole to function
  53. 53. 04/02/2023 HSM 2 by Dr Mesfin Addisse 53 INTEGRATING….. THE SYSTEM…  To modern management the importance is  Analysis is based on research data  Addressees interrelatedness and interdisciplinary among components of organization.  because System theory integrates various specialized fields so as the system as whole can be better understood.  Systems approach to management views  the organization as a unified, purposeful system composed of interrelated parts. THUS  Systems oriented managers make decisions only after they have identified the impact of these decisions on other departments and on the entire organization.
  54. 54. 04/02/2023 HSM 2 by Dr Mesfin Addisse 54 INTEGRATING….. THE SYSTEM…  SUBSYSTEMS  Are the parts that make up the whole of a system  Interdependent subsystems such as production, finance, and human resources etc.  Each system in turn may be a subsystem of a still larger whole.  Thus a department is a subsystem of a plant, which may be a subsystem of a company, which in turn may be a subsystem of a conglomerate or an industry, which again is a subsystem of the national economy, which is a subsystem of the world system.  Interdependent subsystems such as production, finance, and human resources work toward synergy.  SYNERGY: as separate departments within an organization cooperate and interact, they become more productive than if each were to act in isolation.
  55. 55. 04/02/2023 HSM 2 by Dr Mesfin Addisse 55 INTEGRATING….. THE SYSTEM… Types of systems 1.OPEN SYSTEM: constantly interacting with the environment. 2. Closed system: not influenced and not interact with the environment.  All organizations interact with their environment, but the extent to which they do so varies.  SYSTEM BOUNDARY. Each system has a boundary that separates it from its environment.  In a closed system, the system boundary is rigid;  in an open system, the boundary is more flexible.  What are interrelated parts of a management system?
  56. 56. 04/02/2023 HSM 2 by Dr Mesfin Addisse 56 INTEGRATING….. THE SYSTEM… Types…..  Management system composed of interrelated parts:  Organizational input  organizational process  organizational output  flow.  A system has flows of information, materials, and energy (including human energy). These  enter the system from the environment as inputs (material or human resources),  undergo transformation processes within the system (operations that alter them: technological and managerial processes),  exit the system as outputs (products or services),  Feedback: reactions from the environment. Feedback is the key to system controls.
  57. 57. 04/02/2023 HSM 2 by Dr Mesfin Addisse 57 INTEGRATING….. THE SYSTEM… Types…..  With the systems approach managers  cannot function confined to organization chart  must mesh/connect their department with the whole organization /employees and departments  have to communicate also with other organizations as well.  System theory does  emphasize the dynamic and interrelated nature of organizations and the management task.  provides a framework to plan actions and anticipate both immediate and far reaching consequences  allows to understand unanticipated consequences as they develop  Entropy is the process that leads to decline.
  58. 58. 04/02/2023 HSM 2 by Dr Mesfin Addisse 58 INTEGRATING THE MANAGEMENT THEORIES THE CONTINGENCY APPR0ACH The answer to any really engrossing question in economics is: ”It depends”. The task of the economist, is to specify upon what it depends, and in what ways. The Contingency Appr0ach/The Situational Approach  why methods highly effective in one situation failed to work in other situations?  Results differ because situations differ; a technique that works in one case will not necessarily work in all cases.  The contingency approach emphasized that  what managers do in practice depends or is contingent upon a given set of circumstances situation. ’’if-then’’ relationship. If this situational variable exist this is what the manager will do.  Example- experienced/skilled versus inexperienced workers
  59. 59. 04/02/2023 HSM 2 by Dr Mesfin Addisse 59 INTEGRATING….. THE SYSTEM… Types….. The premise is  Although there is probably no one best way to solve a management problem in any one organization, there probably is one best way to solve any given management problem in any one organization.  What are the challenges / problems in implementing the contingency approach?  perceiving organizational situation as they exist  to Identify which technique will,  under particular circumstances,  at particular time, best contribute to the attainment of management goals.
  60. 60. 04/02/2023 HSM 2 by Dr Mesfin Addisse 60 INTEGRATING….. THE SYSTEM… Types…..  Then how does the contingency approach represent an important turn in modern management theory?  It portrays/ describes each set of organizational relationships in its unique circumstances.  Unique situation  The contingency approach provides a framework for integrating the knowledge of management thought.  HOW?  It allows the use of management practices using traditional, behavioural, and systems view points independently or in combination to deal with various circumstances.  It calls for fitting the structure of the organization to various possible or chance events.
  61. 61. 04/02/2023 HSM 2 by Dr Mesfin Addisse 61 INTEGRATING THE MANAGEMENT THEORIES THE DYNAMIC ENGAGEMENT APPROCH  The dynamic engagement approach recognizes that an organization's environment is changing fast.  Dynamic  opposite of static  continuous change, growth, and activity  Engagement  the opposite of detachment  intense involvement with others.  AN ERA OF DYNAMIC ENGAGEMENT. WHY? (The need to have new ways of thinking about relationships and time.) 1.Boundaries between cultures and nations are blurred and 2. New communications technology makes the world a "global village," 3.The scope of international and intercultural relationships is rapidly expanding.
  62. 62. 04/02/2023 HSM 2 by Dr Mesfin Addisse 62 INTEGRATING …..THE DYN. ENGA. ….  Six different themes  new organizational environments  ethics and social responsibility  globalization and management  inventing and reinventing organizations  cultures and multiculturalism  Quality  NEW ORGANIZATIONAL ENVIRONMENTS  According to The dynamic engagement approach  an organization's environment is not composed of a set of fixed, impersonal forces.  is a complex, dynamic web of people interacting with each other.  Thus in addition to their own concerns,  understand what is important to other managers both within their and at other organizations.  The theory of competitive strategy,  managers can influence conditions in an industry when they interact as rivals, buyers, suppliers.
  63. 63. 04/02/2023 HSM 2 by Dr Mesfin Addisse 63 ETHICS AND SOCIAL RESPONSIBILITY  Important ethical concepts  Focus on values and excellence  values that guide people in their organizations,  the organization culture that embodies those values,  and the values held by people outside the organization.  managers must exercise moral courage by placing the value of excellence at the top of their agendas.  WHAT DOES SOCIAL RESPONSIBILITY IMPLIE ?  GLOBALIZATION AND MANAGEMENT  Easy connection even to the remotest corners  managers are global citizens  a "borderless" world where managers treat all customers as "equidistant" from their organizations.
  64. 64. 04/02/2023 HSM 2 by Dr Mesfin Addisse 64 INVENTING AND REINVENTING ORGANIZATIONS Search for ways to unleash the creative potential of employees and themselves Issues for managers to rethink about the traditional standard organization structures "Liberation management" challenges the kinds of rigid organization structures that inhibit people's creativity.  CULTURES AND MULTICULTURALISM  various perspectives and values that people of different cultural backgrounds bring to ones organizations are not only a fact of life but a significant source of contributions.  QUALITY  Total Quality Management (TQM) : to provide products and services that are responsible to strong customer and competitive standards.
  65. 65. 04/02/2023 HSM 2 by Dr Mesfin Addisse 65 INVENTING AND REINVENTING ORGANIZATIONS  QM emphasizes achieving customer satisfaction by providing high quality goods and services.  Reengineering the organization redesigns the processes that are crucial to customer satisfaction.