The Historical Development of Management - Principles of Management - ثالث ثانوي

عبارت التعليم 1.2 The Historical Development of Management LEARNING OBJECTIVES Once you have completed this lesson, you should be able to: 1.2.1 Describe historical changes in management that led to the beginning of scientific management. 1.2.2 Describe four different philosophies that have been used to manage organizations. REALITY CHECK Opposing Views on Effective Management Abdullah and Omar are brothers who have twe very different ideas about management of the workforce in their father's factory in Juball. In Abdullah's view, effective management is all about set- ting strict, instructive rules in order to increase productivity. "You must give workers clear, firm instructions, assigning each individual a specialized task that is repeated continuously until they reach per- fection. Productive workers respond better to orders than personal choice." Omar, however, does not see it that way "That might work in theory," Omar contends "But you're forgetting to consider the views of the workers themselves. I think that a manager's role is to ensure that staff are motivated and fulfilled in their roles. This is the only way to make the workforce more productive. Workers get bored endlessly.daing repetitive tasks, without any autonomy or variation" What's Your Reaction? Do you agree most with Abdullah or Gmar? Do you think that adopting the same managenal approach is always appropriate for every work scenario? KEY TERMS The Four Industrial Revolutions Classical Management Administrative Management Behavioral Management Scentific Management Effinency Effectiveness Quality Management Lesson 1.2 The Historical Development of Management 25

ارت التعليم 26 LO 1.2.1 Management Through the Ages Every organized activity, or 'work', requires some form of management. This management is necessary in order to make decisions about how the work is performed. The type of questions asked by managers about the activity include: ■ What resources are needed to perform the work? ■ How and where will the resources be obtained? ■ Who will be responsible for various tasks? ■ How will it be determined if the work is satisfactory? Today, the smallest part-time businesses, the newest entrepreneurial business ventures, and the largest global corporations require manage- ment. Small business owners decide how much time to devote to their work, where to do the work, how much money must be invested, and how to price and market products and services. Entrepreneurs, with visions of creating the next revolutionary smartphone app or social media platform, develop business plans, secure investors, hire talented employees, and manage the growth of their businesses. Giant interna- tional businesses require managers to be familiar with the cultures and laws of many countries. These same managers need to be able to utilize the skills of diverse work teams. They also need to be prepared to man- age a large portfolio of products and compete with other businesses to satisfy the ever-changing demands of customers. The Earliest Forms of Management The first managers had to rely on their instincts, intuition, and expe- rience to decide how to organize work and operate their businesses. Some of the earliest civilizations organized large numbers of people to accomplish seemingly impossible tasks. These remarkable societies accomplished great feats of engineering and construction. They organ- ized vast agricultural enterprises and developed systems of commerce and finance. These efforts required planning and the management of people and other resources. Often the work involved large numbers of workers completing difficult tasks. In most cases the emphasis was on Chapter 1 Managers and Managing

عبارت التعليم getting the job done with little concern for the health and safety of the workers. Until the development of modern technology and machines began near the end of the seventeenth century, most work was performed using manual labor. Large-scale public projects were organized by a country's rulers and required massive numbers of laborers or vast amounts of resources to complete. On the other end of the spectrum, individuals and families worked to provide goods and services needed for everyday living. Small businesses developed in many societies as transportation and trade allowed people to specialize in their work. Whether working alone, in family groups, or operating large-scale pro- jects, management was required to plan and perform the work with the available resources. The Four Industrial Revolutions There have been four major phases in modern history in which new innovations have radically transformed industry and business practices. These are known as the Four Industrial Revolutions, and each phase can be identified by specific characteristic traits, as illustrated by the timeline in Figure 1-3. First Industrial Revolution 18 2019 Century Second Industrial Revolution Turn of 20" Century Third Industrial Revolution Like 20" Century Fourth Industrial Revolution 21" Bentury Industrial ■ Steam power Machines Mass production Technological Electrification Communications Railways Digital Digitization Μισταμεσονος από Supercomputers Automated Artificial intelligence • Virtual reality Internet of Things Figure 1-3 A Timeline of the Four Industrial Revolutions Modern history has undergone four distinct phases in technological devel opments that have transformed people's lives and the ways that businesses operate. Lesson 1.2 The Historical Development of Management 27

What benefits w business and society do you think factores have brought? The First Industrial Revolution (Industrial) During the eighteenth and nineteenth centuries, the invention of advanced machines allowed for the faster processing of raw materials. Machine power replaced human and animal power in the production process, leading to major business and social transformation. Factories began mass-producing goods using standardized processes. This era became known as the First Industrial Revolution. The Second Industrial Revolution (Technological) In the late nineteenth and early twentieth centuries, a Second Industrial Revolution occurred. This was characterized by electrification, and the rapid development of long-distance telecommunications and transport. In particular, the development of railways, the telegraph, and then the telephone made the world more interconnected. This significantly increased the speed and reliability of global logistics and communica tion The use of machines continued to increase in production lines. The Third Industrial Revolution (Digital) In the second half of the twentieth century, computers became increas- ingly more powerful. The invention and rapid development of microchips جارت التعليم 172 1464 28 Chapter 1 Managers and Managing

موارد الصليم and microprocessors made fast and powerful computation possible. The Third Industrial Revolution was charactenzed by the digitization of record keeping and the increased processing power of supercomputers for processing huge amounts of data ai high speeds. The Fourth Industrial Revolution (Automated) Today, in the twenty-first century, the world is currently undergoing a Fourth Industrial Revolution (sometimes referred to as "Industry 4.0'). This latest phase is characterized by automated intelligent systems. Everyday devices are able to communicate with one another elec tronically, make decisions and adjustments based on analysis of data, and leam new processes without the input of humans (the Internet of Things). Some examples of the Fourth Industrial Revolution include cloud computing, self-driving cars and the development of immersive virtual reality systems. ? CHECKPOINT How have the Four Industrial Revolutions changed the way work is done? NET KNOWLEDGE A student who is considering a future in management will need information to help make a career decision. The General Authonty for Statistics publishes a wide range of data on the labor market and industry-specific metrics. Go online and visit the General Authority for Statistics website https://www.stats.gov.sa Click or tap on the 'Data' menu, then go to the industry and Business' tab. What types of information are available that can help to inform a student's career plans? Choose a sector from the options and write down three pieces of useful data provided about it on the website. Lesson 1.2 The Historical Development of Management 29

LO 1.2.2 Changing Approaches to Management Managing is not easy. Determining the best ways to manage an organ ization has been an issue facing business leaders for nearly two cen turies. Business leaders and researchers began to study management practices shortly after the start of the First Industrial Revolution, and that study continues today. Several theories of management have been developed and tested. Among the most widely accepted are classical. management, administrative management, behavioral management, and most recently, scientific management. Classical Management Classical management was the first effort to apply scientific study to business activities. Classical management studies the way work is organized and the procedures used to perform a job in order to increase worker productivity. Work areas are arranged to make parts and materials readily accessible in order to speed up work. The most efficient employees are studied to identify the best assembly or work methods, which are then taught to other employees. Organizations using classical management may use experiments to try to develop ways to improve the organization of workspace and work procedures to increase efficiency Why have different theories of mamigement, developer التعليم 30 Chapter Managers and Managing a7a

حرارت التعليم A classical management approach believes that most workers would not choose the most productive methods of working, and would need clear instrue tions and close supervision to work effi- ciently. Using precise time and motion measurements, proponents of dassical management worked to identify the least number of steps, the most efficient layout of work, and the fastest work procedures to perform a task. The idea was developed of compensating employees using a piece rate where employees are paid based on the amount of work they produce. Classical management was widely accepted and implemented in businesses MANAGEMENT SKILLS Creativity Deativity not limited to flats. It is an impo- tant skill or managers. New ideas, new processes and new ledinology are all expresams of Crea tivity. Successful managers work to develop their own creativity and encourage geanvily IP oiners. Mariagers use team brainstorming sessions TO foster ideas Creativity alsuve qumes the belief that failure & lesuing experience Develop Your Skills Explain how unayefoxer way in 7 team over Tmanagement problem worldwide in the late 1800s and through the first two decades of the 1900s Administrative Management. While classical management experts focused on increasing worker pro- ductivity, another group of experts was concentrating on improving the overall management of growing businesses. Their ideas became known as: administrative management. Administrative management iden- tifies the most effective practices for organizing and managing a busi- ness. From administrative management came the concepts of having multiple levels of management, organizing businesses into specialized departments, and defining the type of work all managers must perform for an organization to operate effectively. Many of the characteristics identified by administrative management are still recognized in organizations today, including ■ Authority and responsibility-managers have the authority to assign tasks. They can delegate responsibility to others but must give the needed authority as well. Unity of command-each employee must receive direction Lesson 1.2 The Historical Development of Management 31

التعليم " 32 from only one manager to avoid conflicts and to maintain a clear line of authority. ■ Unity of purpose-the goals and direction of an organization must be clear and supported by everyone. ■ Adequate compensation-the wages and benefits for every employee should be fair and satisfactory to both the individual and the organization. ■ Team spirit-organizations should work to build good interper- sonal relationships, a sense of teamwork, and harmony. Behavioral Management The earliest approaches to management were directed at organizing work and creating efficient procedures. They had little concern for the effects of changes on employees. A group of management experts then began to focus on the relationship between managers and employees and developed the principles of behavioral management. Behavioral management is directed at organizational improvement through understanding employee motivation and behavior. Behavioral management is sometimes called human relations management. The focus of behavioral management is developing a work environ- ment in which workers believe they are a valuable part of the organ- ization so they are motivated to do their best. That is most likely to occur when there are positive relationships between managers and employees. This approach suggests that managers should find ways to improve working conditions and increase worker satisfaction, which will lead to better performance. Researchers found that when employees felt managers were.com- cerned about them and were attempting to improve working condi- tions, they were willing to work harder. Another important contribution to behavioral management is the development of Theory X and Theory Y: ■ Theory X managers think that employees will not work to their greatest potential without close supervision. Theory Y managers believe that employees will work hard if they are involved in decisions about their work and are assigned meaningful tasks. Chapter 1 Managers and Managing

The concept holds that managers interact differently with their employees depending on which of the theories they accept. Theory Z was developed from these ideas, and focuses on the employee's well-being and loyalty to the com- pany by providing a job for life. This promotes high productivity along with high employee morale and satisfaction Scientific Management As the economy expanded and as challenges emerged, same business leaders around the world recognized that their operating prac tices were not good for either employees.or businesses They were interested in learning how businesses could be run more effectively and efficiently. They began to examine ways to improve business practices, and to pass on that knowledge to the people who were run- ning the business. Those efforts to improve business management led to the beginning of scientific management. Management Matters Involvement Equals Profits stuily of Fortune 1000 compare found that the use of employee Involvement has a ne return on investment than other management approaches. Involvement works béalisé em- ployees are often in the best position to cenutv problems and of solutions. They quickly spont quality sarul waste Experemployees find effective shortaits and atlier ways to save time Employee involvement most effective when businesses follow three guidelines Improvements should not lead to job loss Karaiment employees Employees should benefill from savings ar Increases in profits ⚫ Businesses should publicly recognize employees to the improvements they What Do You Think? Why might strmie amployees te velar tant to get involvert when test abled by the manner The concept of scientific management was introduced in the early twentieth century by Frederick Taylor, who asserted that data could be used to improve the efficiency and effectiveness of an organization. Scientific management is the careful, objective study of manage- ment decisions and procedures in order to improve the operation of businesses and organizations. Efficiency is a measure of productivity in comparison to the effort put in. For example, an efficient assembly line in a factory will produce the maximum amount of goods with the minimum steps in the process or in the shortest timeframe. Efficiency is often linked to reducing costs. Effectiveness is a measure of how successful something is at achieving its outcome. However, efficiency ودارت التعليم Lesson 1.2 The Historical Development of Management 33

التعليم 34 and effectiveness are not the same thing A process for settling insur- ance claims might be very effective, but it may not be the most efficient in terms of time and cost. The practice of quality management, which relates to efficiency and effectiveness, is one element of modem busi ness to have developed out of scientific management. Quality management is a total commitment by everyone in an organization to improve the quality of procedures and products by reducing waste, errors, and defects. Quality management involves using facts and data to make decisions and continually looking for ways to make improvements. Training, participation, and commitment are hallmarks of quality management. The four main components of the quality management process are quality planning, quality assurance, quality control, and quality improve- ment, as described below: ■ Step 1: Quality planning is the first stage of the process, when a commitment is made to setting a quality standard. ■ Step 2: Quality assurance is the second stage in which desired. standards of quality are set and a process of checks is put in place Step 3: Quality control is the next stage in which the actual standards of quality are compared against the desired level set in step 2. ■ Step 4: Quality improvement is the final stage of the process in which improvements are made in order to meet the desired quality Quality management is addressed in further detail in Chapter 3, with discussions on control standards and the control process. ? CHECKPOINT What are the key differences among the four theories of management? Chapter 1 Managers and Managing

ودارت التعليم 12 Assessment UNDERSTAND MANAGEMENT CONCEPTS Determine the best answer for each of the following questions. 1. The First Industrial Revolution began primarily because of a. lame numberof people unsble to find work the growth of compormons c the inverman of machines allowing fm Fiste proieving of rom 'motero d. monovels vang practices to improve aroductivity of emproves 2. The first attempt to apply scientific study to the management of businesses was a. behavinal management by diral moragment qualll management d. admirate manageme THINK CRITICALLY Answer the following questions as completely as possible. 3. Why did management become so important to businesses as a result of the Four Industrial Revolutions? 4. Why might employees not like to work in a business where managers use classical management? Lesson 1.2 The Historical Development of Managemunt 35

FOCUS ON Innovation Putting Employees First What kind of company would put employees first? Of course, the wel- fare of employees is a fundamental duty and concem of any business. Yet many Saudi companies are going one step further, actively putting the em- powerment of their staff at the forefront of their growth strategies. This approach follows the simple idea that effective teamwork and motivated employees build a great company. One of the telecommunication companies, for example, introduced an "Employee First" initiative designed to empower staff. By granting em- ployees greater responsibility and accountability, the initiative sought to In- stall a productive culture based on shared values, that would ultimately be reflected in the company's output. Likewise, Saudi Aramco is committed to Investing in its people via a range of professional development programs. including Geoscience Train, Upstream Professional Development Center, and the Young Leaders Advisory Board. According to the Saudi Aramco website, "Our success is a result of facing challenges head-on with de- termination, persistence, and inovative thinking, which is made possible through our unique training programs." These examples are reflective of a wider international effort to improve work environment empowerment. In one such example, the results of a company's employee empowerment program have been outstanding. Em- ployee retention rates doubled in an industry where highly skilled employ- ees change jobs regularly to increase their pay. At the same time, sales, profits, and the company's stock price climbed Think Critically 1. Do you agree or disagree with the management philosophy of putting employees first? Why or why not? اعلام 2. Would you like to work as a manager in that type of company? Why or why not?