Evolution of Management Systems

DEFINITION OF MANAGEMENT

Management in businesses and organizations is the function that coordinates the efforts of people to accomplish goals and objectives by using available resources efficiently and effectively.

Management includes planning, organizing, staffing, leading or directing, and controlling an organization to accomplish the goal or target. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management is also an academic discipline, a social science whose objective is to study social organization.

Evolution of Management Systems

Bold text A management system is the framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives. After World War II, the reigning paradigm of product-oriented mass production had reached its peak. Examples of management systems at that time are linear assembly lines, organizational hierarchies of command, product quality control and mass consumption.

Soon afterwards, the Deming-Juran process-quality teachings spearheaded a new quality orientation (later referred to as Total quality management) and propelled Japan directly to the post-war process focus (process quality control, just-in-time, continuous improvement).  The US responded by a painful and prolonged product-to-process transformation, ultimately leveling the playing field again by the mid 1980s.

At the end of the 1980s, business process reengineering focused on the radical redesign of the production process through the reintegration of task, labor and knowledge. As a result, lean, flexible and streamlined production processes were created, capable of fast response and internet-based integration necessary for the upcoming phase of supply chains - business-to-business (B2B) – as well as demand chains – business-to-customer (B2C). 

In the above three stages of Evolution of Management Systems, the competitive advantage was derived almost exclusively from the internal resources of the firm. At the end of the 1980s, a radical fourth shift has occurred: the competitive advantage became increasingly derived from the external resources of the firm through the extended networks of suppliers and customers.

Figure 1 above refers to the basic scheme of production and service delivery process. It represents the traditional linear input-process-output management system. This system has been fixed and unchanging for centuries. The only change has been in terms of changing focus on individual components of the system, emphasizing different parts of this basic scheme.

Although the scheme itself (inputs → process → outputs) remains mostly unchallenged, there are some indications that this business model will undergo major restructurings in the future (in the emerging stages of Evolution of Management Systems). It will become disaggregated and distributed, subjected to non-linear modularity^[6] and bringing forth new ways of making things and delivering services. Then it will become reintegrated again, tying together globally distributed components into a unified recycling whole.

Henry Fayol and Frederick Winslow Taylor’s Contribution to Management Thought

Contribution of Henry Fayol On Management Thought

Industrial activities:

Fayol (1949) suggest that ―All activities to which industrial undertakings can be divided in to the sig groups:

A. Technical activities (Production, Manufacture);

B. Commercial activities (Buying, Selling and Exchange);

C. Financial activities (Search for and optimum use of capital);

D. Security activities (Protection of property and person);

E. Accounting activities (Stocktaking, Balance Sheet, Cost, Statistics);

F. Managementactivities (Planning, Organizing, Command, Coordination, Control).

Elements of Management:

Fayol‘s (1949) answer was unique at the time. The core of his contribution is his definition of management (To forecast and plan, to organize, to command, to coordinate and to control) as comprising five elements (Gulick and Urwick, 1937):

To forecast and plan:

Examining the future and drawing up the plan of operation;

To organize:

Building up the structure, material and human of the undertaking;

To command:

Maintaining activity among the personnel;

To coordinate:

Building together, unifying and harmonizing all activities and effort;

To control:

Seeing that everything occurs in conformity with established rules and expressed command.

General Principles of Management:

 Fayol (1949) summarizes a number of General Principles of Management on his own personal experience and observation, most become part of managerial know-how many are regarded as fundamentals tenets. Fayol outlines the fourteen principles:

Division of labor:

Concept of specialization at work;

 Authority:

The right to give order and the power to exact obedience;

Discipline:

Based on obedience and respect.

Unity of command:

Each employee should receive orders from only one superior;

Unity of direction:

One boss and one plan for a group of activities having the same objective;

Subordination of individual interest to the general interest:

To abolish the tendency of placing individual interest ahead of the group interest;

Remuneration:

Employees should receive fair payment of service.

Centralization:

Consolidation of management functions. Decisions are made from the top.

Scalar chain:

Formal chain of commanding run from the top to bottom of the organization;

Order:

All materials and personnel have a prescribed place, and they must be remained there;

Equity:

Resulted from kindness and justice;

Stability of tenure:

Limited turnover of personnel. Life time employment for good workers;

Initiative:

Call for individual zeal and energy in all efforts; and

Sprits de crops:

Stressed the building of harmony and unity within the organization. Fayol was a firm believer that if organizational leaders used his theories, including the 14 principles of management, they would be able to achieve performance excellence. For example, the principle of division of labor would help employees be more efficient by specializing in different tasks (Fayol,1949; Meier and Bohte, 2000). Rodrigues (2001) agreed that an organization‘s proper implementation of Fayol‘s 14 principles of management would lead to organizational efficiency and effectiveness. He especially supported the concept of continuous training of personnel. Training is important because it not only improves employees‘ skills, knowledge, and competencies, but it also enhances organizational capacity, capability and performance which are essential ingredients for organization effectiveness and are the foundation of an organization (Rodrigues, 2001).

Qualities of Manager:

According to Fayol (1949) the business requires a basis in the people who carry them out: a) Physical qualities; b) Mental qualities; c) Moral qualities; d) General education; e) Special knowledge of the function concerned; and f)Experience. Fayol draws the conclusion that the major ability required in the managerial function. However good technical or other ability may be, if the managerial function is week the business will not be succeed. He made a point that management is not being taught along with the technical subject because there is no theory of it to teach. An adequate theory is essential.

Managerial Duties of an Organization:

To organize a business is to provide it with everything useful for its functioning: raw materials, tools, capital, personnel. All these may be divided into two main sections, the material organization and the human organization. According to Fayol, manager concerned only with the human organization. Seemingly out of place, sixteen managerial duties of an organization follow the definition- Ensure that the plan is judiciously prepared and strictly carriedout; See that the human and material organization is consistent with the objective, resources, and requirements of the concern; Set up a single, competent energetic guiding authority; Harmonize activities and coordinate efforts; Formulate clear, distinct, precise decisions; Arrange for efficient selection-each department must beheaded by a competent, energetic man, each employee must be in that place where he can render greatest service; Define duties clearly; Encouraging a linking for initiative and responsibility; Have fair and suitable recompense for service rendered; Make use of sanctions against faults and errors; See the maintenance of discipline; Ensure that individual interests are subordinated to the general interest; Pay special attention to the unity of command; Supervise both material and human order; Have everything under control; and Fight against excess of regulations, red tape and proper control.

Command:

According to Fayol (1949), the purpose of command is to set the human organization in motion towards its objectives. Its objective is to get optimum return from all employees. To command effectively- The manager must know its employees; get rid of the incompetent; know the employer-employee agreements; Set a good example; periodically review organization; Use conferences with the subordinates to ensure unity of direction, delegate the details and establish esprit de corps. Fayol wrote as the practical man of business reflecting on his long managerial career and setting down the principles he had observed. His observation fit amazingly well into the currently developing would of management theory. Since all enterprise require managing, the formulation of a theory of management is necessary to its effective teaching (Weihrich H. and Koontz H., 1994).

Contribution of Frederick Winslow Taylor On Management Thought

Contribution of Frederic Winslow Taylor can be discussed into three phases:

1). Principles of Management;

 2). Mechanism of Management; and

3). Philosophy of Management.

 Principles of Management:

The fundamental principles that Taylor (1911) saw underlying the scientific approach to management are

The development of a scientific method of designing jobs to replace the old rule-of thumb methods; this involved gathering, classifying and tabulating data to arrive at the one best way‖ to perform a task or series of task.

The scientific selection and progressive teaching and development of employees; Taylors how the value of matching the job to the worker. He also emphasized the need the study worker strengths and weakness and to provide training to improve workers performance.

Bringing together of scientifically selected employees and scientifically developed methods for designing jobs; Taylor believed that new and scientific methods of job design should not merely be put before an employee; they also should be fully explained by management. He believed that employees would show little resistance to changes in methods if they understood the reasons for the change and they show a change for greater earnings for themselves.

Division of work resulting in an interdependence between management and the worker ;Taylor felt that if they were truly dependent on one another, than cooperation would naturally follow.

Mechanism of Management:

He put the right person on the job with the correct tools and equipment, had the worker follow his instruction exactly, and motivated the worker with an economic incentive of a significant higher daily wages. Based on his ground breaking studies of manual work using scientific principles, Taylor became known as the ―Father‖ of scientific management (Robins S. P., Coulter M. and Vohra N., 2010). Standardization, time and motion studies, functional foremanship, production planning and control, price wage system of payment on differential basis were the main ideas enunciated by Taylor.

Philosophy of Management:

Scientific management was a complete mental revolution for both management and employees towards their respective duties towards each other (Taylor, 1911). It was a new philosophy and attitude towards the use of human efforts. Thus Taylor advocated a philosophy of management under which management would undertake a basic responsibility of planning and control and prescribe the rules, laws and formulas to guide the actual operations by man and machines, so as to help employees to produce at lower cost to the employer and with more remuneration to themselves. Management should evolve laws of standard work and rules for work-measurement. Workers should be trained in advance in detail. Detailed instruction in writing should be issued to workers regarding the task to be done and methods to be used in completing the task. What, how and when the work is to be performed is to be included in management plan. Taylor shorted the management to motivate the personnel not merely by giving orders, show the authority etc. but by selecting, teaching and developing the workmen and heartily co-operating with them.

 FAYOL VS TAYLOR

 Attempts have been made to compare and contrast the work of Fayol and Taylor. The works of  Fayol and Taylor are essentially complementary. Both believed that proper management of personnel and other resources was the key organizational success. Both use scientific approach to management. Berdayes (2002) suggests that the following are ideas of Fayol and Taylor that unite their work:

Work processes, organizational structures, and an emphasis on a hierarchical division of labor. Creation of the concept of the organization as a whole (Fayol delineated clear lines of authority into a conceptual and functional unity, and similarly Taylor emphasized formalization of work processes into a total organization).

Emphasis on formal rationality by supporting scientific techniques, order, and efficiency. The role of managers is to work with and encourage their workers. Taylor (1947)

Indicated that managers should work along with the workers, helping, encouraging, and  smoothing  the way for them. However, he also sought to change their mental attitudes and  behaviors on  the basis of scientific principles so as to improve operational efficiency. Along  this  same line, Fayol  (1949)  noted  that  need  to determine their workers abilities, encourage and train them, and reward enthusiasm, initiative and success. there major difference was in their orientation. Fayol stressed the management of organization while Taylor stressed the management of operative work. Fayol wrote during the same time period as Taylor. Fayol attention was directed as the activities of all managers while Taylor was concerned with first line managers and the scientific method, Fayol wrote from personal experience as he was the managing director of a large French coal-mining firm.

Comparison between Henry Fayol and Frederick Winslow Taylor

Basis of Comparison Henry Fayol Frederick Winslow Taylor

1. Perspective Top management Shop floor level

2. Focus Improving overall administration through general principles Improving productivity through work simplification and standardization

3. Personality Practitioner Scientist

4. Results Universal truths developed from personal experiences Scientific observation and measurement

5. Major Contribution A systematic theory of management Science of industrial management Fayol observed management from the top down while Taylor worked at management from the bottom up. Fayol was a top manager and was obviously in a better position than Taylor to observe the functions of a manager. 

Fayol‘s main concern was to improve the management of total organization while Taylor concentrated on improving the management of jobs. There for Fayol‘s administrative theory has a wider application than Taylor‘s Scientific Management.

 CONCLUSIONS 

Henry Fayol made outstanding contribution to management thought. He made a clear distinction between operational activities and managerial activities. He clearly specified the functions of management by a systematic analysis of management process. This isolation and analysis of management as a separate discipline was his original contribution to the body of management theory. Fayol firmly advocated that management should be formally taught. He also highlighted the universal characteristics of management principles. He was father of management principles many of which have stood the test of time. He developed a framework for further study and research. One of the greatest contributions of Fayol is that his ideas pave the way for developing the theory of management. However Fayol‘s works has been criticized on several counts-

Firstly, his theory is said to be too formal. Secondly, he did not pay adequate attention to worker. Thirdly, there is vagueness and superficiality about some of his terms and conditions. Fourthly, he hinted at but did not elaborate that management can and should be taught. Despite of these limitations, Fayol made a unique and outstanding contribution to management theory.

Taylor‘s ideas, research and recommendations brought into focus technological, human, and organizational issues in industrial management. Benefits of Taylorism included wider scope for specialization, accurate planning, timely delivery, standardized methods, better quality, lesser costs, minimum wastages of materials, time and energy and cordiall relationship between the management and workmen. Worker earned more wages, employees saved their cost, turned out larger and better output and customer got in lighted with planning and doing. Taylor improved management methods by emphasizing the concept of work measurement. He developed the techniques of measure quantities, designed wage incentive scheme and lacked the problems of organizing complex.

References

F.W.Taylor, Scientific Management ( 1911), Harper Brothers, New York

Mildred Golden Pryor and Sonia Taneja (2010), Henri Fayol, practitioner and  theoretician revered and reviled, Journal of Management History Vol. 16 No. 4, pp. 489-503, Emerald Group Publishing Limited http://en.wikipedia.org/wiki/Scientific_management. Retrieved July 24, 2013.

Fayol, H. (1949),General and Industrial Management, Sir Isaac Pitman & Sons, London(translated by Constance Storrs).

Parker, L.D. and Ritson, P. (2005), “Revisiting Fayol: anticipating contemporary management, British Journal of Management, Vol. 16, pp. 175-94.

Bakewell, K.G.B. (1993), Information: the seventh management function,  Information andSecurity Management Journal, Vol. 1 No. 2, pp. 29-33.

Wren,  D.A. (1972), The Evaluation of Management Thought, The Ronald Press, New York. NY. Breeze,

J.D. (1985), Harvest from the archives: the search for Fayol and Carlioz, Journal of Management, Vol. 11 No. 1, pp. 43-54.

Robbins, S.P., Bergman, R., Stagg, I. and Coulter, M. (2000), Management,  2nd ed., Prentice-Hall, Sydney.

Armstrong, M. (1990), Management Process and Function, Short Run Press, Exeter.