Evolution of Management Theory | Lecture Series #15 | Industrial Organization and Management 🏭👷🏼‍

0:00 of here the evolution of management Theory the graph so we have here on the first before 1940s we have the Scientific Management followed by the administrative management and followed also by the Behavioral Management and management science and right now 2000s we have the organizational environment so what is the difference between these different management theories let's discuss it [Music] hello everyone how are you so I hope you are all doing well and great so for this discussion we will going to have our

0:47 discussion regarding the evolution of the management Theory okay so let's start with this topic evolution of management Theory so first of all we have deer a Scientific Management Theory when we say Scientific Management Theory this is actually the modern management that has begun in the late 1900s so organizations by that time were seeking ways to better satisfy customer needs and also Machinery was changing the way goods were produced managers had to increase the efficiency of the worker task mix by that time guys we have the so-called job specialization I hope you already discussed this on your pie on

1:32 your principles of industrial engineering regarding on the history I as far as I know this has been discussed there so job specialization during that time Adam Smith which is one of the well-known economists 18th century Economist actually found films manufactured pins in two ways the first one is to craft so each worker did all steps so from first step up to the last steps one worker does it in a group or in a set or batch of products and the other the other way is to is by the use of the factory we were in each worker specialized in one step for example we are doing a notebook

2:23 and the third worker is the one who will uh uh include the spring or kohen demon spring so you are having your specialized job well your Mastery that is what the factory setup is doing that is what we call the job specialization and and by that observation of Adam Smith he actually found that the factory method had much higher productivity the second way is actually producing more uh output okay so each worker became very skilled at one specific that's just like what I

3:09 have said before because specialization so breaking down the total job allowed for the division of labor uh we have here the evolution of management Theory the graph so we have here on the first before 1940s we have the Scientific Management followed by the administrative management and followed also by the Behavioral Management and management science and right now 2000s we have the organizational environment so what is

3:54 the difference between these different management theories let's discuss it now okay first one let's start with the scientific management of course scientific management is actually one of the proponents of this scientific management is the Frederick Taylor I hope you still recall who Frederick Taylor is from your pie subject so Taylor defined this Scientific Management late 1800s so scientific management is the systematic study of the relationships between people and tasks to redesign the work for higher efficiency so again the purpose is to redesign the world for higher efficiency we are always opting for higher efficiency and also of course

4:42 effectivity okay uh in this Scientific Management Taylor sought to produce the time a worker spent on each task by optimizing the way the test was done so take note of the term optimizing industrial engineering is actually well known in the idea of optimizing wherein we are maximizing all the valuable resources and minimizing all the non-value-added activities non-value added things non-value added resources okay so we have here the four principles of the Scientific Management the first principle is that study the way the job is performed now and determine new ways to do it so here on the first principle we are gathering our

5:27 data different details that is used in the time and motion study so I hope you are having some idea now with the time and motion anyway this will be tackled on your work study and measurement subject for the second year and this is actually one of the foreign for the second principle we have to

6:14 codify the new method into rules the method that has been formulated on the first principle must now be codified in our second principle so under this we need to teach to all workers okay so third principle select workers whose skills how much the rules set in step two because new methodology is nonsense if Engineering Management and our PE subject Staffing one of the Core Concepts of management Staffing third principles to increase efficiency

7:00 again select workers whose skills match the rules step in Step number two for the last principle of the Scientific Management we need to establish a fair level of performance and pay for higher performance no compensation and benefits where any worker should benefit from higher output output must Quality quality and quantity that is the principle of the fourth one default principles scientific management of course

7:46 100 of an implementation problems occur during this time managers often implemented only the increased output side of Taylor's plan which is they did not allow workers to share in increased output specialized job became very boring and dull yes they have we have their the Mastery but I think that is

8:32 and workers ended up distrusting Scientific Management Scientific Management so workers could now purposely underperformed feeling more you are useless organization you are only specialized in one skill and yet responded with increased use of machine you see during these times and services if your company is into

9:19 service so I hope you already have your idea with this husband and wife will Brett so defrock and Lillian gillibrat so they bought the refined tailors methods never find Long Nila foreign

10:04 second year okay uh time and motion studies one of their refinement grenade actions into components second they find better ways to perform it third they reorganize each action to be more efficient using third leagues using different operations chart using different uh what we call this using different charting we have their Simo chart we have the multi-activity chart in any chart that those all or will be discussed in your work and work studying measurement class so Gilbert also studied fatigue problems lighting Heating and other water issues in your subject the ergonomics

11:00 position when it comes to working positions awkward the awkward positions and it can actually let's walk into fatiguez so as I bought online productivity and efficiency so that is for the Scientific Management we're done with Scientific Management second let's have the administrative management so administrative management seeks to create an organization that leads to both efficiency and Effectiveness a universe okay

11:46 Target efficiency and Effectiveness so efficiency and Effectiveness I hope that discussed again it was a pie the difference between these two or in due to some administrative management we have maxed Weber we're an development bureaucracy okay so bureaucracy is a formal system of organization and administration to ensure Effectiveness and efficiency as a whole of the offset organization so this Max Weber developed the five principles shown in the next slide the bureaucratic principles so a bureaucracy should have first written rules all rules should be written known

12:33 black and white after two days after one week after a month workers that is not written to written rules next hierarchy of authority we should have a proper flow of authority from top to bottom so fair evaluation and the word here is a compensation and benefit if it must be fair to all employees as much as possible and of course if there is a reward there is also a punishment okay

13:25 but there must be a corresponding reward that is and lastly we have the system of test relationship no so every task must have their relationship with each other and that but continuously okay and efficient and effective young system all right now the key points in bureaucracy is that Authority is the power to hold people accountable for their actions so they they must have the Authority now positions in the film should be held based on performance not social contacts

14:16 after this modern times and it should be based service it should be based on performance that's social context next position Duties are clearly identified that's why we have this job description upon applying the HR device so it must be clearly identified sooner or later people should know what is expected of them skills you

15:05 organization from them okay next we have the lines of authority actually this is connected with the first one so lines of authority should be clearly identified who is your boss who is your who is your head who is your subordinate no so workers know who reports bypass okay next rules standard operating procedures and Norms used to determine how the firm operates sometimes this lead to red tape and other problems should be written and uh we have here also on this management Theory the Henry file which is a French mining engineer mining

15:51 executive author and director of Mines who developed a general theory of Business Administration that is often called federalism violism is a discussion nothing with administrative management Theory so we actually did a development principles administrative management we're in so here is the 14th principle first principle division of labor allows for job specializations Scientific Management that's why our topic is evolution of

16:36 management Theory and talking division of labor almost him with job specialization before allows for job specialization file noted films can have too much specialization leading to poor quality and worker involvement poor quality and worker involvement poor quality and worker involvement specialized no films noted can have too much specialization leading to property and work involvement in apartments

17:25 but still it can be good it can be bad no depends so Authority and responsibility failure included both formal and informal Authority this whole thing from special expertise and the third one is the unity of command by the way this Authority and responsibility or Muslims are bureaucracy now there must have the proper flow of commands from top to bottom and of course connected number the unity of command spare our employees should have only one boss is

18:51 should have only one first the management should assign only one boss per person or per worker and that is the unity of command line of authority a clear change no line of authority it is line of authority a clear chin from top to bottom of the film from the CEO down to the production supervisor to the line supervisor so that is the line of authority the fifth one centralization

19:37 the degree to which authority rests at the very top centralization now for the sixth one we have the unity of Direction one plan of action to guide the organization actually this is the reason why we have the planning now we have the shorter plan we have the medium term plan and we have the long-term plan including a short-term plan new manga weekly plans monthly plans and quarterly planning nothing one year by the national medium planning sooner or later

20:23 video presentations let's add here that is the right term a strategic plan of the organization as a whole seventh equity so here on equity the idea is to treat all the employees fairly Injustice and respect [Music] Equity number eight Order each employee is put where they have the most value again

21:13 nine ninth principle initiative to encourage Innovation so we'll even encourage your employees to innovate something if if you let them do the work and as long as the protocol is as long as the output is being made as long as the quality is still alive so for now let's have our 10th principle

22:00 the discipline so obedient applied respectful employees needed so we must all have the discipline and I hope it is very self-explanatory discipline for the 11th principle we have the remuneration of personnel so the payment system or the compensation and benefits contributes to success of human rewards and incentives the performance is outstanding efficiency API or the key performance so you reward them something it can be a reward or financial reward additional

22:46 percentage from their salary or it can be a token of appreciation it can be a certificate it can be a trophy a medal no so that's it so it can be promotion that's the 11th principle number 12 stability of 10 euro so when we say stability of tenure this is actually a security of your job long-term employment is important since safe the job and secure the job in your organization so that is the stability of

23:31 tenure that's why we have this regularization incorporate world you know around six months if okay you can be regularized government so that's it not the stability of the newer so for the 13th one and general interest over individual interest so the organization takes precedence over the individual individual interests general interest it can have a conflict

24:19 achievement of your a company vision and mission statement now for the 14th one we have this print Decor again this is read as Spirit Decor this is actually uh the sharing of enthusiasm or Devotion to the organization you must be passionate with your job you must love your organization so for you to be able to have the harmonious relationship together with other employees and other workers inside your organization so that's what that is what the spectacle means no we're done with administrative management let's move on now with the behavioral side of management the Behavioral Management Theory now when we

25:05 say Behavioral Management this actually focuses on the way a manager should personally manage to motivate employees again focuses on the way a manager should personally manage to motivate employees now we have here this see Mary Parker fully so Mary is an American social worker Management Consultant philosopher and Pioneer in the fields of organizational Theory and organizational behavior so actually along with Dylan Gilbert she was one of the two great women management experts in the early days of classical management Theory Mary Parker the simary Parker yeah of

25:54 course influential leader during this managerial Theory early managerial Theory He suggests she further she suggested workers help in analyzing their jobs for improvements operations so the worker knows the best way to improve the job just like what I have

26:41 said before now if workers have the knowledge of the task then they should control the task and not to control nothing that they can also control the task but rather they can actually very helpful improvements a specific tasks now we also have here the dog last McGregor so douglasma Gregor is a famous management professor in the field of personal development and motivational theory so he is best known for his development of the theory X and Theory why a leadership theory on two different leadership styles so what this Theory X

27:26 and what is this Theory why what do you think is the difference between Theory X and Theory Y [Music] okay so here x and Theory way basically Douglas McGregor proposed the two different sets of worker assumptions Theory X this Theory assumes the average worker is lazy worker dislikes work

28:16 and will do as little as possible management regarding the worker okay assumptions must Loosely supervise and control through reward and Punishment closed monitoring and management dito no um no

29:05 the Assumption here on this theory is that workers are not lazy what they want to do a good job with the organization and the job itself will determine if the worker likes the work so this mindset management output then yeah

29:50 by that time so that is the theory why sabidito managers should allow the worker great latitude and create an organization to stimulate the worker so dito hindisha closely monitoring supervision now we have here the summary Theory X employee is lazy managers must lose the supervised So in theory X create strict rules and you find my words it's a theory why employee is not lazy a new assumption must create work setting to build initiative from the

30:37 worker not to improve to create something to innovate and to provide authority to workers that is for Theory why now we have here William OG here Dr William is actually an American professor and author in the field of business management best known for identifying a style of management which he termed Theory Z uh my wife so we are Dr Williams research the cultural differences between Japan and USA the United States

31:22 of America and honest research USA culture emphasizes the individual and managers tend to feel workers follow the theory X model USA cultures American culture more likely theorex management while in the Japanese culture Japanese Japanese World corporate world expects to work or committed to the organization they are expecting that the worker is passionate with their job they are expecting that the worker is loyal with their job no they are committed to the organization first and thus behave

32:08 differently from the American workers research to Dr William no no for the Theory Z this actually combines parts of both the USA and the Japan structure managers stress long-term employment or long-term employment against security of and your young regularization you you will you will be you will feel safe no months or years from now that is the security of the new long-term employment work group and

32:56 organizational Focus so those are the characteristics of Theory Z so more likely combination of theory X and Theory Y now foreign focused on increasing employee loyalty to the company by providing a job for life like what I have said before with a strong focused on the well-being of the employee both on and off the job according to all cheat Theory Z management tends to promote stable Employment High productivity and high employee morale and satisfaction so for me no personally I like this Theory

33:42 because I believe that there's no such thing as the best way of management talaga now it all depends on who the management are who are the workers who or what rather what is your product what is the field of your business the nature of business and many other factors so that's why management yes okay so we're done with Behavioral Management let's now move on to management Science Now management science is actually a rigorous quantitative techniques to

34:27 maximize resources type of management so quantitative techniques meaning before you create your decision basis numbers data that is your basis and actually management science is one of your major subjects when when you goes third year you know that is the so-called operations research so that is operations research one operations research two and I'm one of those professors handing that subject okay we're here in the management science we have the quantitative management that utilizes linear programming different modeling techniques simulation systems different algorithms so here we believe that all

35:15 things in this world especially in the corporate world is actually following some specific algorithm and we are basing our decision in those quantitative methodologies and those quantitative techniques that is the management science theory so we also have here the OM where the operations management which is a techniques to analyze all aspects of the production system you have your production system subject around fourth year and the tqm or in your curriculum that is the quality management system qms in your subject this is actually a one of the branches of management science that focused on improving the

36:01 quality of the goods and services that your corporation or your organization is offering lastly we have the Mis or what we call the management information systems wherein this actually provides information about the organization so in layman's term this is the database you know of or the system technical system that that actually consolidates all the data and information regarding your day-to-day operation that is for management science lastly we have the organizational environment now with the organization environment Theory considers the relationships inside and outside the

36:48 organization the environment consists of forces conditions and influences outside the organization management is given the fact now they we have there here actually the external factors that is affecting our organization so therefore nothing and with our decisions with our managerial decisions now systems theory considers

37:35 the impact of stages what are those stages the input stage the conversion stage and the output stage when we say input stage acquired external resources organization that will be the input and it will actually be processed going into goods and services stage and the last stage is the output stage we're in Finnish goods are released into the environment so the whole cycle is you know so systems considerations that an open system interacts with the

38:23 environment a closed system is self-contained closed systems often undergo entropy and lose the ability to control itself and fails you must be an open system and Synergy so if you're an open system we can perform a Synergy performance gains of the whole surpassed the component so Synergy is only possible in a well coordinated system a well-coordinated system is actually a

39:09 system that is working hand on hand efficiently that is it the Synergy now the organization as an open system we have here the input stage or develop materials going into conversion stage were in gumagame machines human skills and any other uh things processes and systems to convert specific input into an output we're in goods and services and the sales of outputs firm can then buy inputs the proceeds of our goods and services can actually purchase another

39:57 input then conversion stage then output then now this is the organization the modeling of the organization asked and open system okay now we have already contingency theory if you recall our graph before valasha dito no contingency Theory now actually the reason is that when we see contingency Theory this actually assumes that there is no one best way to manage just like what I have said before one of the best scientific management invests organizations

40:46 uh management science something like that now there's no such thing as one best way dial this is a subjective study and the environment impacts the organization the outside force the external Force you will tackle this on strum Strategic Management impacts the organization and managers must be flexible to react to environmental changes NASA managers you internally and externally the way the organization is designed control system selected depend on the environment

41:32 assumptions contingency Theory so technological environments change rapidly so must managers organizations okay so structures when it comes to contingent Security

42:18 First is the mechanistic when we say mechanistic Authority is centralized at the top this is on Theory X employees are closely monitored and managed just like what we have tackled before very efficient in a stable environment the second structure is the organic or the theory why the authority here is decentralized throughout the employees loser control than mechanistic managers can react quickly to changing environment and that actually ends up my presentation my for dearly students I hope you learned something post or the evolution of management

43:04 theory is in this world except change that's why even in management decisions even in management styles we also have this Evolution not just in technology not just in science and engineering but rather in the Management Field also okay so I hope to learn something from this discussion see you on our next discussion keep safe always enjoy the rest of the day enjoy the rest of the

43:51 week thank you guys bye [Music] foreign [Music]