Week 3

Week 3
Management yesterday and today.
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Principle of Management

Malaysian Institute of Aviation TechnologyThe Purpose of this chapter
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-To demonstrate that a knowledge of management history can
help you understand contemporary management and practice.
-To show how they evolved to reflect the changing needs of
organisations and society as a whole

Malaysian Institute of Aviation Technology
Introduction
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Organised activities and management have existed for
thousand of years
The Egyptian pyramids and Great Wall of China (for
example) are evidence that projects of tremendous scope,
employing ten thousand of people, were undertaken well
before modern times.
The pyramids- the constructions of single pyramid
occupied thousands of people for several decades

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The Pyramid Construction
The Great Wall of China
projects of tremendous scope
employing tens of thousands of people
who told each worker what to
do?
who ensured enough stones at
site?
The answer is managers
Venetian early form of
business enterprise – 1400
(Venice)
warships were floated along
canals and each stop materials and
riggings were added to the ship.
Doesn’t it sound a lot like
cars “floating” along an assembly
line and components being
added to it?
The Venetians also had a
Historical Background of Management

Regardless of what managers were called at that time, someone
had to plan what was to be done, organise people and materials
to do it, and provide direction for the workers
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Management

Malaysian Institute of Aviation TechnologyHOW DID INDUSTRIAL REVOLUTION INFLUENCE
MANAGEMENT PRACTICE?
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Originating in the late 18th
Century Great Britain, the Revolution
had crossed the Atlantic to America by the end of the Civil War.
Machine power was rapidly substituted for human power. Using
machine, in turn made it economical to manufacture goods in
factories.
The advent of machine power, mass production, the reduced
transportation costs that followed the rapid expansion of the
railroads, and lack of governmental regulations also fostered the
development of big organisations.
Early 1900s, theory of management is developed.

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Adam Smith – doctrine titled “ The
wealth of nations” – 1776 ...
...org & society can gain from the division
of labour
...the breakdown of job into narrow
and respective tasks...
...concluded that division of labour
increased productivity by increasing each
worker’s skills... saving time lost in
changing tasks...creating labour-saving
inventions and machinery...
The Industrial
Revolution... started in 18th
century in GB... to
America...
Major contribution:
machine power substituted
human power.. in factory
more economical to make
goods
Two Significant Pre-Twentieth-Century Events

Malaysian Institute of Aviation TechnologyWhat was adam smith’s contribution to the field of
management?
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Division of labor
-The breakdown of jobs into narrow, repetitive tasks.
-Today, the general popularity of job specialisation – in service
jobs such as teaching and medicine as well as on assembly lines
in automobile plants – is undoubtedly due to the economic
advantages cited over 200 years ago by Adam Smith

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MANAGEMENT THEORIES 1990s
Quantitative Approach
General Administrative
Theorist
Scientific Management
Development of Major Management Theories

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•If one had to pinpoint the year that modern management
theory was born, one could make a strong case for 1911, the
year that Frederick Winslow Taylor’s The Principles of
Scientific Management was published.
•The book described the theory of scientific management
(widely accepted by managers throughout the world).
•Scientific management - the use of scientific method to define
“the one best way” for a job to be done.
•Could select the right people for the job and train them to do it
precisely
•To motivate worker, he favoured incentive ‘wage plans’.

28th January 200911
1911 – Principles of scientific management.
The use of scientific method to determine the ‘one best way’ for a job to
be done.
Frederick F. Taylor – 4 principle of management.
• develop a science for each element of an individual’s work, which
replace the old rule-of-thumb method.
• scientifically select and train workers (previously, workers chose their
own work and trained themselves as best they could
• Cooperate with workers to get them to perform work according to the
Principle science developed.
• Share responsibility between management and workers.

Who were the other major contributors to scientific
management?
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-Taylor’s Idea inspired others to study and develop methods of
scientific management.
-Frank and Lilian Gilbreth – studied work arrangement to eliminate
wasteful hand and body motion.
-Gilbreth – among the first to use motion picture film to study hand
and body motions.
-Introduce ‘Therbligs’- 17 basic hand motion
-The basis of today ‘time and motion’study
Gantt
-Expanded the scope of scientific management to encompass the
work of managers as well as that of operatives
-Creating a graphic bar chart that could be used by managers as a
scheduling device for planning and controlling work

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General Administrative Theorists.
(Henri Fayol and Max Weber)
• Focus on the entire organisation.
• Describes what managers do and what are good management
practices.
• Henry Fayol – 14 principle of management.
• Division of works.
• Authority.
• Discipline.
• Unity of command.
• Unity of direction.
• Subordination of individual interests.
• Remuneration.
• Centralisation.
• Scalar chain.
• Order.
• Equity.
• Stability of the tenure of personnel.
• Initiative.
•

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General Administrative Theorists.
• Focus on the entire organisation.
• Authority structures and relations.
• Max Weber – Bureaucracy (theory of authority structures and described organisation activity
on the basis of authority relations).
• A form of organisation characterised by the division of labour, a clearly defined
Hierarchy, detailed rules and regulations and impersonal relationship.
A bureaucracy shud
Have ..
Career
Orientation.
Division of
Labours
Authority
Hierarchy.
Impersonality. Formal rules &
Regulation.
Formal
Selection.
Professional
Managers.
Uniform application
Of rules & controls.
SOPs
Based on
Technical
qualification
Clear chain
Of
Command
Well defined
Tasks

QUANTITATIVE APPROACH
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 The quantitative approach to management sometimes
referred to as operations research or management
science, evolved out of the development of mathematical
and statistical solutions to military problems during
World War II
 Eg: When the British had to get the maximum
effectiveness from their limited aircraft capability against
the massive forces of the German, they asked their
mathematicians to devise an optimum allocation model.

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Quantitative approach to Management.
Involves use of quantitative technique to improve decision making..
• Labeled as operations research or management science.
• Evolved out of the development of mathematical and statistical
solutions to military problems during WWII
• After the war, quantitative technique applied to business sector by
Whiz Kids (group of military officers) who joined Ford Motor in
mid-1940s began using quantitative technique to improve decision
making at Ford.
What exactly does the quantitative approach do?
- involves applications of statistics, optimisation models, computer
simulation etc.
Has contributed directly to management decision making in the
areas of planning and control.

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Quantitative approach to Management.
FOR INSTANCE :
Linear programming is a technique that managers can
use to improve resource allocation
Work scheduling can become more efficient as a result
of critical path scheduling analysis
Decision on determining optimum inventory levels
have been significantly influenced by the economic
order quantity model.

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Understanding organisational behaviour.
• The field of study concerned with the action of people at work.
• Early advocates:
• Robert Owen, Hugo Munsterberg, Mary Parker Follett and
Chester Barnard.
• Belief that people were the most important asset of the
organisation and should be managed accordingly.

Bachelor of Aviation Management19
OB
Early Advocate
Chester Barnard
Robert Owen
Mary Parker
Follett.
Hugo Munsterberg
• Working condition.
• Idealistic workplace.
• Investment in improving labour.
• Organisation as perspective of
individual and group behaviours.
• People oriented areas.
• Organisation based on group ethics.
• Industry psychology for
scientific study of people
at work.
• Using psychology test for
people selection, learning
theories etc.
• Organisation a social system.
• Manager’s job to communicate
& stimulate employees.
• Organisation is an open system.
Early Advocates of Organisational Behaviour.

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 The Hawthorne Studies.
 Western Electric engineers study the relationship of productivity
to light illumination in the factory.
 Invited Harvard Professor Elton Mayo to help solve the non
explainable results.
 Experiments includes job redesign, changes of work day and
work week length, introduction of rest period and individual versus
group wage plans.
 Mayo concluded that behaviour and sentiments are closely
related, that group influence significantly affect individual behaviour
and money is less a factor in determining group output than are
group standards, group sentiments and security.

 The Human Relation movement.
 Believed in the importance of employee satisfaction – satisfied
worker was believed to be a productive worker.
 Names associated to this movement are Dale Carnegie (How to
win friends..), Abraham Maslow (Hierarchy of needs), and Douglas
McGregor (Theory X – Theory Y).
 Believes are shaped by personal philosophies than by substantive
research evidence.

 The Behavioural Science Theorists.
Comprises of a psychologists and sociologists.
Relied on the scientific method for the study of organisational
behaviour.
Such psychologists are Fred Fiedler, Victor Vroom, Frederick
Herzberg, Edwin Locke, David McClelland and Richard Hackman.
Their works includes the understanding of leadership, employee
motivation and the design of jobs.
 Latest contributions includes the understanding of power,
conflict and organisation design insights by Jeffrey Pfeffer, Kenneth
Thomas and Charles Perrow.

Three integrative frameworks have evolved that can help you
organise and better understand the subject matter of management.
These are the process, systems and contingency approaches.
 Process approach: the performance of planning, organising,
leading, and controlling avtivities is seen as circular and continous.
 Systems approach: recognise the interdependency of internal
organisational activities and of the organisation and its environment.
Contingency approach: recognising and responding to situational
variables as they arise.
Studying Management Today

How can system approach integrate
management concepts
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The system approach defines a system as a set of interrelated
and interdependent parts arranged in a manner that produces a
unified whole
Societies are system and so, too, are computers,
automobiles, organisations, animals and human bodies.
Two basic type of system – open and close
Open system – a system that dynamically interact with its
environment
Close system - a system that is not influenced by and does
not interact with its environment

Organisations and its environment
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Stakeholders – any group that is affected by organisational decisions
and policies

 Current trends and issues.
 Globalisation.
 Workforce diversity.
 Entrepreneurship.
 Managing in an e-business world.
 Needs for innovation and flexibility.
 Quality management.
 Learning organisations and knowledge management.
 Workplace spirituality.

 Workforce Diversity:
 A workforce that is more heterogeneous in terms of gender,
race, ethnicity, age an other characteristics that reflect differences.
 Entrepreneurship.
 The process whereby an individual or a group of individuals uses
organised efforts and means to pursue opportunities to create value
and grow by fulfilling wants and needs through innovation and
uniqueness, no matter what resources re currently controlled.

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 E-Business (internet based enterprise):
• A comprehensive term describing the way an organisation does its work by
using electronic (internet based) linkages with its key constituencies in order to
efficiently and effectively achieve its goals.
• It includes developing strategies for running internet based companies;
improving communication between employees, customers and suppliers, and
collaborating with partners to electronically coordinate design and production.
• E-organisation refers to applications of e business concepts to all organisations.
(eg: hospital, school, museum, government agency, military)
E- commerce:
• Any form of business exchange or transaction in which the parties interact
electronically.
• e.g: presenting products on website and filling orders

All transactions
between companies
and government
organisation
Electronic markets
Formed by web
Based
Auctions.
Electronic
Retailing
All transactions
between a company
and its suppliers.
.
Type of E-Commerce
Transactions.

E-Business
Enhanced
Total
E-Business
E-Business
Enabled.
.
Organisation’s entire work processes revolve
around e-business model.
E-Business tools and applications used
within traditional organisation
E-Business unit with traditional organisation
Categories of E-Business Involvement.

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 Total Quality Management:
 A philosophy of management that is driven by customer needs and
expectations and that focuses on continual improvement of work
processes.
 What is it?
 Intense focus on the customer.
 Concern for continual improvement.
 Process focused.
 Improvement in the quality of everything the organisation does.
 Accurate measurement.
 Empowerment of employees.

 Learning organisation:
 An organisation that has developed the capacity to continuously
learn, adapt and change.
 Knowledge management:
 Cultivating a learning culture in which organisational members
systematically gather knowledge and share it with others in the
organisation to achieve better performance.

Traditional Organisations Learning Organisations
Attitude towards change. If it is working, don’t change it. If you are not changing, it won’t
be working for long.
Attitude towards new idea. If it wasn’t invented here, reject
it.
If it was invented or reinvented
here, reject it.
Who’s responsible for
innovation?
Traditional areas such as R&D Everyone in the organisation.
Main fear Making mistakes Not learning, not adapting
Competitive advantage Products and service Ability to learn, knowledge and
expertise.
Manager’s job To control others To enable others.
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 Workplace spirituality.
 A recognition of an inner life that nourishes and is
nourished by meaningful work that takes place in the
context of community.

 Management is connected to other fields of study….
 Management history allow us to understand the theory and practice
better..
 Important pre twentieth century contribution..
 Scientific management ..
 Henry Fayol …
 Quantitative approach…
Process, system and contingency approach…
 Current trend and issues.
Summary:

Motivating your self.
• Time Journal.
• To Do List.
• Keep on telling your inner self that you are the best manager.

To Do List.
Important.
Not
Important.
Due Soon. Not Due Soon.
1 2
3 4

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1. Identify the ways in which technology is
changing the manager’s job and
organisational success.
 Give an example of one company and
 discuss.
ASSIGNMENT WEEK 3
(in group)
Due: 5th
Feb 2013

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