Systematic Management Theory, Overview - Video & Lesson Transcript

Systematic Management: Theory, Overview. An error occurred trying to load this video. Try refreshing the page, or contact customer support. You must create an account to continue watching. Register to view this lesson. As a member, you'll also get unlimited access to over 75,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed. Already registered? Login here for access. You're on a roll. Keep up the good work! Just checking in. Are you still watching? 0:00 What Is Systematic Management? 2:10 Major Theorists 3:55 Five Functions of Management 4:55 Why Is It Important? 5:45 Lesson Summary. Want to watch this again later? Log in or sign up to add this lesson to a Custom Course. Recommended Lessons and Courses for You. Rebekiah has taught college accounting and has a master's in both management and business. What Is Systematic Management. Josie is a daycare worker. On any given workday, she has a small group of ten preschoolers to look after. Her coworker, Mary, has a second small group of ten preschoolers. Josie comes to work one Monday morning to quite the surprise. Poor Mary has suffered a fall over the weekend and has a broken leg. She will be out of work for several weeks. Josie is told by the daycare manager that the decision has been made to combine the groups. Instead of ten preschoolers, Josie will have 20. How will she manage ten more children, especially when the goal is to provide quality childcare for each one? She foresees a number of chaotic days until she can find a routine that works for her and the kids. Josie's current situation is a lot like management systems of the past. In the beginning of the 19th century, growth in business was centered on the manufacturing sector. Managers were faced with explosive demand. The increase in demand led to an increase in the labor pool. In a time where the focus was on machines and not on people, managers simply did not know the value of human capital. This, along with the fact that communication between those in charge and the workers was all but broken down, led to an organizational environment with no structure and in a constant state of disarray. It was during this period of time that the systematic approach to management was born. Systematic management is an approach to management that focuses on the management process rather than on the final outcome. The goals to this approach to management were: To create specific processes and procedures to be used in job task completion To ensure that organizational operations were economical To ensure that staffing was adequate for the needs of the organization To maintain suitable inventory so that the demands of consumers could be met To establish organizational controls. This type of management approach was the first to directly link orderly operations, human resource management, and communication to organizational success. Major Theorist. There are several key individuals who can be credited with the development of the systematic approach to management. Adam Smith was the earliest theorist to contribute to the idea of a need for a system in management. His book 'Wealth of Nations', published in 1776, brought about the initial belief that division of labor was the best way to increase productivity. Following Smith were four more theorists who added to the systematic approach. Robert Owens , a theorist in the early 1800s, strongly believed that human resources were much more important than the focus on machinery that existed during this time. He felt that a proper management system could place the needs of the employees above all else. Charles Babbage was the author of the book On the Economy of Machinery and Manufacturers. This book analyzed the state of manufacturing during the mid-1800s and gave suggestions to improve practices by the use of division of tasks. Henry Towne was the president of the Yale and Towne Manufacturing Company. During the late 1800s, he proposed the idea that management needed to be a separate field of study and that principles needed to be established to guide managers in various managerial situations. The last theorist to mention in the area of systematic management may very well be known as the father of the school of systematic management. His name is Henri Fayol , and he was a major player in the field of management theory. Fayol was a staunch supporter for managerial education. Having served many years in the field of management, he was well versed in what worked and didn't work, and felt that managers were not born. Instead, with training and education, they could be created. Unlock Content. Get access risk-free, just create an account. No obligation, cancel anytime. Select a subject to preview related courses: Five Functions of Management. Fayol proposed five functions of management that created a system. These functions are as follows: Planning - Making a plan of action for the organization. This is the most difficult of the five functions, and involves the entire organization. Organizing - A well-run organization must be organized so that it runs smoothly and efficiently. It requires breakdown of job functions into smaller units, with increased supervision and guidance for each one. Commanding - Taking charge of the organization in a way that is beneficial to all. Coordinating - Making sure that each department has what it needs to complete a task. Controlling - Making sure that policies and procedures are followed so that an efficient flow exists for consumers as well as producers. Fayol was able to establish and explain the need for systems and structure in a way that shaped the world of management that we still know today. Why Is It Important? If you remember from the beginning of the lesson, Josie has been given a big responsibility. She knows that there are 20 preschoolers who are looking to her to meet their needs. On top of that are 20 sets of parents that not only entrust Josie with the care of their children, but also expect her to perform at the top of her game. The only way that she can do this is to have a plan of action. She has to develop her own breakdown of what will and won't work in order to complete the task given to her in a manner that's beneficial for everyone involved. She needs to have a systematic approach to managing these kids. Without one, she may fail her given task, which will have detrimental effects on each person directly involved. That is the importance of systematic management. Lesson Summary. Systematic management is an approach to management that promotes the breakdown of job duties. It enables both management and employees to see small sections of the bigger picture. It also allows for more efficient planning, forecasting, and budgeting. This approach to management evolved throughout the late 1700s and early 1800s, but did not come to the forefront until the 1890s to 1900s. With the help of such historical theorists as Adam Smith, Robert Owen, Charles Babbage, Henry Towne and Henry Fayol , the concept of the systematic approach to management is now commonplace. It's the normal for those in management to devise a system and order of operations, and for employees to follow given guidelines. With the competition in business now being globally situated, systematic management is a much needed tool.