Chapter 2: Management Past & Present

The evolution of management theories can be broken down to six main schools of thought.
1. Classical School of Management Thought
2. Behavioural ...
3. Quantitative ...
4. Systems ...
5. Contingency ...
6. Quality ...
We ought to use the best and reject the obsolete contributions of each theory. Be selective

If you read the lecture 1 course notes, you'll see the Professor broke it down to three components: Classical, Behavioural, and Strategic School of Management thought. That broader view is also valid.

To summarize, the Classical ideas focused on the manufacturing environment (small scale), the Behavioural ideas focused on the people-aspect of the manufacturing environment, and the Strategic ideas focused on improving the industry (macro scale).

1. Classical School uses scientific method approach to study work & work flows.
1- Classic Scientific School - focused on manufacturing environment
2- Classic Administrative School - focused on flow of info & how org should operate
Assessment:
-1 led to boring, inhumane, repetitive work. Modern factories now depend on employees' creativity, backed by managers who serve as teachers, coaches, servants.
-2 led to the development of the bureaucratic system, essentially is management by rules and it's purposely impersonal. Rigid bureaucratic system, unresponsive decision making, and lack of commitment among workers led to to strangled economic system. These limitations led to the development of the Behavioural School of thought.
People:
Charles Babbage (break down labor into small tasks that are quick to learn/master)
Fred Taylor (developed 14 general principles of management)
Henri Fayol (claimed skills can be learned and taught)
Mary Follett (goal sharing among managers)
Max Weber (developed Bureaucratic system with his Six Major Rules)

2. Behavioural School viewed people as assets, not expenses. It's limitations lie in its complexity.
People:
Robert Owen (claimed quantity/quality of output is influenced by conditions on/off the job)
Elton Mayo (his Hawthorne Studies made aware of worker social needs like engagement)
Douglas McGregor ( emphasized what matters was how people were treated and valued in work settings)

3. Quantitative School used a mathematical approach to management problems. A facet of this school is OR/MS. OR tools include inventory control models, break even analysis, production scheduling, and production routing. The drawbacks observed of this management practice was long term investment, esp R&D, was neglected.

4. Systems School shifts the paradigm of how organizations are viewed to a more holistic approach. They envision employees, groups, tasks as interrelated parts of an organic whole. Related to (5),(6). The org's system and subsystems interact with external systems and subsystems to ideally create increased effectiveness through synergy.
Limitations stem from fear due to system complexity. ie. Paralysis - manager become overly cautious and refuse to act until they...(contact every source, conduct lots of analysis, ask reviews from top management, etc). And time constraints don't allow for that.

5. Contingency School promoted experimental & creative approaches to solving problems. "Think outside the box". Diversity in the workplace was seen as a plus, and employees stayed flexible and considered fallback positions when solving problems, meeting challenges, and taking advantage of opportunities.

6. Quality School is said to have integrated (2),(3),(4),(5),(6). Kaizen, reengineering, ERP, EAI, CRM concept and technologies have been introduced to emphasize on incremental success, (org cannot rest after any achievement), and on redesigning business processes to the ever changing business environment.
ERP - Enterprise Resource Planning, (integrates all depts & functions onto single comp sys)
EAI - Enterprise Application Integration (ties together business's sys together, including supply chain).
CRM - Customer Relationship Management

Definitions:
Kaizen - Japanese business term meaning incremental, continuous improvement for people, product, processes
Operations Research / Management Science - Uses (eng, math, psych, management) for informed decision making. Uses Management information systems (MIS) as well.
Complexity Theory - Emphasizes ways how factory resembles ecosystem, responding to natural laws to find best possible soln to problems. It also suggests an organization needs an element of chaos to survive -> Chaos theory. Chaos theory claims under the right conditions, chaotic systems organize into well-ordered states.