Evolution of Management

Every organization follows some or the other management principles in order to manage their resources so as to achieve maximum efficiency and productivity. But how these management principles come in to effect and most importantly on what basis these principles are designed to guide these organizations.

Dr. Mandi has explained the evolution of these management policies in more of a practical aspects which makes these theories easy to comprehend. So taking Dr. Mandi's explanation into words lets see and try to understand what these management principles or theories are, how they get evoluted over the course of time and how they effect an organization's overall management.

What do we mean by Management Theories?

Management theories are the set of general rules that guide the managers to manage an organization. Theories are an explanation to assist employees to effectively relate to the business goals and implement effective means to achieve the same.

How did current management theories developed?

People have been managing work for hundreds of years, and we can trace formal management ideas to the 1700s. But the most significant developments in management theory emerged in the 20th century. We owe much of our understanding of managerial practices to the many theorists of this period, who tried to understand how best to conduct business.

Evolution Of Management Theories:

The evolution of modern management began in the closing decades of the nineteenth
century, after the industrial revolution had swept through Europe, Canada,
and the United States. In the new economic climate, managers of all types of organizations—political, educational, and economic—were increasingly trying to
find better ways to satisfy customers’ needs.

Owners and managers of the new factories found themselves unprepared for
the challenges accompanying the change from small-scale crafts production to
large-scale mechanized manufacturing. This leads to the introduction of various management theories so as to search for new techniques to manage their organizations’
resources and to focus on ways to increase the efficiency.

General Management Theories:

There are four general management theories.

1. Frederick Taylor – Theory of Scientific Management.
2. Henri Fayol – Administrative Management Theory.
3. Max Weber - Bureaucratic Theory of Management.
4. Elton Mayo – Behavioral Theory of Management (Hawthorne Effect).

1. Frederick Taylor’s Theory of Scientific Management:

The systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

Taylor’s theory of scientific management aimed at, improving economic efficiency, especially labor productivity. Taylor had a simple view about, what motivated people at work, - money. He felt that, workers should get a, fair day's pay for a fair day's work, and that pay, should be linked to the amount produced. Therefore he introduced the, DIFFERENTIAL PIECE RATE SYSTEM, of paying wages to the workers.

Taylor's Differential Piece Rate Plan:

If Efficiency is greater than the defined Standard then workers should be paid 120 % of Normal Piece Rate.
If Efficiency is less than standard then workers should be paid 80% of Normal Piece Rate.

Principles of Scientific Management.

Four Principles of Scientific Management are:

1. Time and motion study: - Study the way jobs are performed and find new ways to do them.

2. Teach, train and develop the workman with improved methods of doing work. Codify the new methods into rules.

3. Interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.

4. Establish fair levels of performance and pay a premium for higher performance.

Application of Scientific Management:

Below is the video Henry Ford and Taylor revolutionized the car manufacturing with the application of Scientific management 

Taylor’s Scientific Management is not hard to recognize within the modern day workplace. The car and computer manufacturing plants, the work environments we go to everyday, the hospitals we are treated in and even some of the restaurants we might eat in, – almost all of them function more efficiently due to the application of Scientific Management. In fact, these methods of working seem so commonplace and so logical to a citizen of the modern world that it is almost impossible to accept that they were revolutionary only 100 years ago.

2. Henri Fayol’s Administrative Management Theory:

The study of how to create an organizational structure that leads to high efficiency and effectiveness.

Henri Fayol known as the Father Of Management laid down the 14 principles of Management.-

1. Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
2. Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command – Employees should have only one direct supervisor.
5. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
6. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
8. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
9. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
14. Esprit de Corps – Organizations should strive to promote team spirit and unity.

3. Max Weber’s Bureaucratic Theory Of Management:

Bureaucracy: A formal system of organization and administration designed to ensure efficiency and effectiveness.

Authority: The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

Weber made a distinction between authority and power. Weber believed that power educes obedience through force or the threat of force which induces individuals to adhere to regulations. According to Max Weber, there are three types of power in an organization:-

     a.) Traditional Power
     b.) Charismatic Power
     c.) Bureaucratic Power or Legal Power.

Features of Bureaucracy:

1. Division of Labor.
2. Formal Hierarchical Structure.
3. Selection based on Technical Expertise.
4. Management by Rules.
5. Written Documents.
6. Only Legal Power is Important.
7. Formal and Impersonal relations.

Competing Values Framework

         
                   "We’re looking for new innovative ways of doing things..."

                           "We are a highly collaborative organization..."

                                    " Our work is dictated by process..."

                                            " Our staff is goal-oriented..."

Most of us have likely made or mostly heard at least one of these statements, each of which are indicative of an implicit value contained within our organizations’ cultures. The issue, however, is that some of these values are in opposition to each other. So, while we may have said these things, hopefully it was not in the same breath.

Welcome to the world of the Competing Values Framework

A tool that allows organizations to assess their internal culture.

The contemporary definition of organizational culture (OC) includes :

- What is valued,

- The dominant leadership style,

- The language and symbols,

- The procedures and routines, and

- The definitions of success that characterizes an organization.

OC represents the values, underlying assumptions, expectations, collective memories, and definitions present in an organization.

Cameron and Quinn (1999) have developed one of the most influential and extensively used models in the area of organizational culture research built upon a theoretical model called the "Competing Values Framework (CVF)."

This framework refers to whether an organization has a predominant internal or external focus and whether it strives for flexibility and individuality or stability and control.

In addition the framework authors generated an "Organizational Culture Assessment Instrument (OCAI)" which is used to identify the organizational culture profile based on the core values, assumptions, interpretations, and approaches that characterize organizations.

The four quadrants of the following matrix represent each of the “competing values” (or the dominant culture types) within an organization.

The YELLOW “collaborate” quadrant represents values like loyalty, communication and human development.

The BLUE “compete” quadrant whose focus is on goal achievement, customer-focus and profitability. This is at odds with the values inherent in the Yellow section.

The RED “control” quadrant emphasize consistency, policies and process.

The GREEN “create” quadrant, which is all about innovation, agility and vision. This is in opposition to the Red quadrant

 An additional take on the tensions inherent in the framework can be found along its axes.

The horizontal axis maps an organization’s focus, with the quadrants on the left focusing primarily inside the organization and those on the right looking externally at customers and the outside environment.

The Vertical axis maps where decisions are made. The bottom quadrants represent a more hierarchical culture where control rests with the management.

In the top quadrants you’ll find a more distributed leadership in which employees are more empowered to make decisions

There is no recipe for the perfectly plotted organizational diagram. In fact, the organization’s shape should not be a constant. The idea is that as an organization grows and changes, so too must these competing values.

The more organizations seek to be agile and innovative (Green), the more they must let go of some control and consistency (Red). If they are looking to move more quickly and focus more externally (Blue), they will not be able to be as collaborative an organization (Yellow).

Plotting the points in the quadrants, however, is only part of the process – the easy part. The framework is best used as the starting point for discussion. For some organizations, the team came together to compare and discuss the mapped values. The tool gave them a common language that allowed them to talk in a neutral way about the current state of our culture and what values and characteristics the organization needed to move ahead. This allowed folks at all levels to feel comfortable voicing their opinion. 

In the video below, National Arts Strategies (NAS) President and CEO, Russell Willis Taylor talk about his experience using the Competing Values Framework.

 

My digital CV

Hello all..

So here's my video CV.

All Izz Well for these 3 idiots

 So we were introduced to yet another concept of management in the most different way as possible by Dr. Mandi. He intrigued us by making us realize that how real life situations can be associated with the organizations and what lessons are to be learnt from them. 
Dr. Mandi came up with the simple idea of 3 idiots crossing the valley. 

The situation - 

No of people: 3

Valley gap: 2 footsteps. We have to help the 3 idiots to cross the valley. But how can they do that.
They have only one rod with the help of which they can cross the valley.

Solution:

They hold the rod together with the gap between each two of them is one footstep and they simply walk by.  The picture below demonstrates it. Surprised? Does going get this easy? 

 

Learnings from this exercise:

1) Concept of Super Teams & Self Manager Teams:  
Super Teams or High performance teams is a concept which has been successfully adopted by many big corporations like GE, Krafts food, Boeing etc. It can be defined as a group of 3 to 30 workers drawn from different areas of a corporation to solve problems faced daily. The valley crossing exercise had many characteristics of a super team like:

• Participative leadership – different from the tradition approach of a authoritarian team leader.

• Open and clear communication – Communication is the key to crossing valley effectively.

• Mutual trust – Every person needed to trust each other completely especially when their feet was off the ground.

• Managing conflict – dealing with conflict openly and transparently and not allowing grudges to build up and destroy team morale

• Clear goals – The goals were clear, defined and each member in the team fully understood the gravity of the problem.

• Defined roles and responsibilities – each team member understands what they must do (and what they must not do) to demonstrate their commitment to the team and to support team success. Furthermore the roles and  responsibilities keep on changing depending on the situation. 

• Coordinative relationship – the bonds between the team members allow them to seamlessly coordinate their work to achieve both efficiency and effectiveness

• Positive atmosphere – an overall team culture that is open, transparent, positive, future-focused and able to deliver success.

2) Task Interdependence - 
 It is the extent to which a group's work requires its members to interact with one another. We see that in the valley crossing exercise it is of utmost importance to be interdependent on each other so as to mitigate the risk and achieve the task at hand. This also has brings lot of perspectives to the Team performance in reality. What I have observed is that the interdependence increases as we go higher up the corporate ladder. As a worker or low level employee, we can usually get away with completing the task without much interdependence (even though effectively using the team's collective strength may increase productivity). But as we go to strategic level, it is almost impossible to go about a task without the expertise/skill/opinion of your team mates.  Thus Interdependence and its effective usage is crucial for a manager.

3) The Flip side: Quite often we come across people who get their tasks done by their team mates. One of the flip side of team work is that our efforts may go unrecognised or even worse credited to the wrong person. In a competitive and performance oriented environment like ours, it is important to see through these ploys. Some of the good work practises that I have found in good team players in my previous organization includes:

• Pro actively helping members in need.
• Properly communicating the work done to superiors.
• Pro actively using the teams strength for overcoming problems.
• Effective participation in meetings and team events etc.

These are some of the learnings from this exercise.

 

3 Monks - Learnings for the organizations

Plot Summary of the film :

There was a small temple on a mountain and a little monk in the temple. His daily routine was shouldering water, chanting sutras,  adding water to the holy water bottle on the table honoring the Goddess of Mercy, and watching over the mice from stealing food at night. His life was smooth and comfortable. Soon after, a tall monk came. He drank half of the jar’s water as soon as he arrived at the temple, so the little monk asked him to fetch water. The tall one thought it was unfair for him to fetch water alone, so he asked the young one to do it together. They could only carry one bucket a time, and they would only feel content when the bucket was placed in the middle of the shoulder pole. Anyway, they still had water to drink in this way. Then, a fat monk came. He wanted to drink, but there was no water in the jar. The short monk and the tall one asked him to fetch water by himself. He carried a bucket of water, and drank it up immediately. From then on, nobody would fetch water, so they had no water. Everyone chanted his own sutras and knocked his own wooden fish. As nobody would add water to the holy water bottle, the plant in the bottle withered soon. At night, a mouse came out stealing, but everyone pretended not to see it. As a result, the mouse was so rampant that it knocked over the candle holder and caused a fire. Only thus did the three monks make a concerted effort to put out the fire, and finally awaken. After that, they started hanging together and the temple never lacked water again. 

 

There are many important learnings from the Movie:

1.) Importance of having Work Systems :
 Initially the 3 monks were unwilling to get even 1 bucket of water. But later on they by arranging the pulley system and bringing in the automation they could easily fetch the water. Also they were able to utilize the strengths of every monk to run the process smoothly.

So as we see that as the organizations grow its important to have well established processes to facilitate the smooth flow of information, money, material and man-power in the organizations.
For example - Toyota has become the world leader in motor manufacturing company because of its work methods. The Just In Time(JIT) methodology revolutionized the manufacturing process.

2.) Importance of team Work :

At first, the Three Monks succumb to their personal pride which interferes with the performance of daily tasks, each of them believing that the other two should be the ones to go downhill to fetch water. When a fire breaks out, however, they understand how silly they have been and work together to save the temple. From this, it is evident that in an organization and in a team, its important to take personal ego out of the equation and to perform the duty at hand for the greater good.

 

3.) Standardization:

Standardization is the process of developing and implementing technical standards. The goals of right standardization can be to help with independence of single suppliers (commoditization), compatibility, interoperability, safety, repeatability, or quality.

When the two monks were travelling to fetch the water in a bucket they tried to do lessen their load by pushing the bucket on the other monk's side. This lead to fight between the two. Then finally they resolved the dispute by marking on the stick. But again the question came that how to do the marking. So devised a standard method by using a scale.

Company like McDonald's, the largest restaurant chain company(sales wise), has over 14,157 restaurants in US alone and more than 34,000 restaurants worldwide. It is able to operate so efficiently because of its work methods which are followed across the world in all their restaurants.

4.) Crisis Management -
There are situations in the organizations whemn situation seems out of control. During such crisis situations organizations should be able to channelize their resources properly. Every member should work in unison to overcome the crisis.
As in the story the monks worked together to extinguish the fire.

5.) Establishing a common Mission: 
An organization can start only with a trenchant mission. An organization without a clear cut mission could end up in a state of imbroglio. A mission provides the lifeline to sustainability. It establishes the company's purpose of being today and aspiration of tomorrow. A clear mission offers organizations a pragmatic lens for every day decision-making.
The monks had the common mission of filling water. They learnt to achieve it by team-work, helping each other, diving the work appropriately among themselves.

6.) Participative management:
Participatory management is the practice of empowering employees to participate in organizational decision making. . This is usually accomplished by providing employees with ample opportunities to become involved in the processes of setting goals, making suggestions, improving company operations, and solving problems. The basic premise for participative management is to shift the burden of decision making from the sole shoulders of managers and supervisors onto the entirety of the company.
This was practised when the two monks resolved the dispute of carrying water bucket by marking on the stick. But again the question came that how to do the marking. So devised a standard method by using a scale.Also, one monk was measuring the stick and the other was marking. This lead to the end of authoritative approach.

7.) Bringing Innovation to the system 
The organizations are required to evolve continuously. To stand tall in the market all the time its necessary to keep Innovating. Innovation helps the companies to differentiate themselves from the competition.

In this movie, the monks brought innovation by installing the pulley system to fetch the water from lake.

Similarly Apple is one company which stands tall on the grounds of its path-breaking  innovation. The advent of i-phones with touch screens ushered in a new era of smart phones. And all the mobile manufacturing companies were forced to adapt to the new innovation brought by Apple so as to stay relevant in the market.

8. Productivity :

Productivity is Important. Productivity is about how well an organization converts resource inputs into goods or services. Workplace productivity is about how firms can utilize labor and skills, innovation, technology and organizational structure to improve the quantity and quality of their output.

Basically it's about exploring all the ways that can make a working environment more effective & efficient.

Why is productivity important?

• Basis for improvements in real incomes and economic well-being.

• Monetary policy (inflationary pressures)

• Fiscal policy (financing of health, education, welfare)

• Slow productivity growth = conflicting demands for distribution of income more likely

One example of highly productive company is Walmart. It is a remarkably innovative exploiter of the latest technologies, enabling it to run its huge retail network highly productively, and providing its 20 million or so daily customers both low prices and a wide variety of products. It is the nation's largest company, representing 2.3 percent of the gross domestic product and employing 1.5 million workers. Moreover, it is a remarkably innovative exploiter of the latest technologies, enabling it to run its huge retail network highly productively, and providing its 20 million or so daily customers both low prices and a wide variety of products.