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LessonOne

EvolutionofManagementTextEvolutionofManagementExercisesFurtherReadingCaseStudyofBoeingCompanyTerms

SynergyDelphianalysisProfile

Henri

FayolReferencesHistoryofManagementTheclassicalperiodThecontemporaryapproachestomanagementThreekeydirectionsformanagementtheory

TheEnd

HistoryofManagementAround1100B.C.Between350and400B.CTheRomansDuring

themedievaltimesTrial-and-errorAsaformaldisciplineEconomiesofscaleMassproductionTheclassicalperiodAdamSmithSystematicmanagementScientificmanagementAdministrativemanagementHumanrelationsBureaucracyThecontemporaryapproachestomanagement

TheclassicalapproachesdisadvantageQuantitativemanagementOrganizationalbehaviorSystemtheoryThecontingencyperspectiveAround1100B.C.TheChinesepracticedthefourmanagementfunctions―planning,organizingandstaffing,leading,andcontrolling.TheShangDynasty

(1523-1027BC)WasChina’sfirsthistoricaldynasty.TheShangcivilizationleftChina’searliest-knownwrittenrecords,intheformofinscriptionsetchedinobjectsofboneandbronze.TheinscriptionsdocumentthedynasticsuccessionoftheShangkings,aswellasmanyfeaturesoftheBronzeAgecultureoftheShang.TheShangstatewascenteredintheYellowRiverValleyoftheNorthChinaPlain.Between350and400B.C.TheGreeksrecognizedmanagementasaseparateartandadvocatedascientificapproachtowork.AncientGreece

CivilizationthatthrivedaroundtheMediterraneanSeafromthe3rdmillenniumtothe1stcenturyB.C.,knownforadvancesinphilosophy,architecture,drama,government,andscience.ThemostfamousperiodofancientGreekcivilizationiscalledtheClassicalAge,whichlastedfromabout480to323B.C.Thecity-statesfelltoRomanconquerorsin146bc.TheByzantineEmpirefelltotheOttomansin1453.

TheRomansDecentralizedthemanagementoftheirvastempirebothbeforeandafterthebirthofChrist.RomanEmpire

TheempireincludedlandsthroughouttheMediterraneanworld.TheempirelasteduntilGermanicinvasions,economicdecline,andinternalunrestinthe4thand5thcenturiesadendedRome’sabilitytodominatesuchahugeterritory.In44bcGaiusJuliusCaesar,theRomanleaderwhoruledtheRomanRepublicasadictator,wasassassinated.TheRomanRepublic,whichhadlastednearly500years,wasdead,nevertoberevived.Theempirewouldendureforanother500yearsuntilad476.During

themedievaltimes

TheVenetiansstandardizedproductionthroughtheuseofanassemblyline,buildingwarehousesandusinganinventorysystemtomonitorthecontents.Arowofworkersandmachinesalongwhichworkispasseduntilthefinalproductismade.Trial-and-errorThroughouthistorymostmanagersoperatedstrictlyonatrial-and-errorbasis.Thechallengesoftheindustrialrevolutionchangedthat.AsaformaldisciplineManagementemergedasaformaldisciplineattheturnofthecentury.EconomiesofscaleTheemergenceofeconomiesofscale―reductionsintheaveragecostofaunitofproductionasthetotalvolumeproducedincreases—drovemanagerstostriveforfurthergrowth.MassproductionTheopportunitiesformassproduction

createdbytheindustrialrevolutionspawnedintenseandsystematicthoughtaboutmanagementproblemsandissues—particularlyefficiency,productionprocessesandcostsavings.Themakingofgoodsinlargequantities,especiallybymachineryandwithdivisionoflabor.TheSystematicManagement

Itattemptedtobuildspecificproceduresandprocessesintooperationstoensurecoordinationofeffort.

ItsgoalsachievedwaysItsemphasisItsshortcomingItsgoalswereachievedthrough:

CarefuldefinitionofdutiesandresponsibilitiesStandardizedtechniquesforperformingthesedutiesSpecificmeansofgathering,handling,transmitting,andanalyzinginformation.Costaccounting,wage,andproductioncontrolsystemstofacilitateinternalcoordinationandcommunications.

Amethodofaccountingforthecostsofoperatingabusinessbyallocatingthesecoststothegoodsacompanyproducesortheservicesitrenders.

SystematicManagement’semphasisInternal

operationsManagerswerefreetofocusoninternalissuesofefficiency.Manymanagerswereorientedmoretowardthingsthantowardpeople.SystematicManagement’sshortcomingItfailedtoleadtowidespreadproductionefficiency.FrederickTaylorFrederickTaylorHisdiscoveriesTaylorFrederickWinslow

(1856-1915)Americanindustrialengineer,whooriginatedscientificmanagementinbusiness.WasborninGermantown,Pennsylvania.BeganworkingattheMidvaleSteelCompanyin1878.

Developed

detailedsystemsintendedtogainmaximumefficiencyfrombothworkersandmachinesinthefactory.BecamejointdiscovereroftheTaylor-Whiteprocess,amethodoftemperingsteelin1898.

HismanagementmethodswerepublishedinThePrinciplesofScientificManagement

(1911).OnehomepageonTaylor

/facts/inventors/taylor.htm

Taylor’discoveriesProductionandpaywerepoor,inefficiencyandwastewereprevalent.

Managementdecisionswereunsystematicandnoresearchtodeterminethebestmeansofproductionexisted.ScientificManagement

Advocatedtheapplicationofscientificmethodstoanalyzeworkandtodeterminethe“onebestway”tocompleteproductiontasksefficiently.

FourprinciplesAdvantageDisadvantagesFourprinciplesofscientificmanagement

Developascientificapproachforeachelementofanindividual’sworktoreplacerule-of-thumbguidelines.Scientificallyselect,train,teach,anddevelopeachworkersothattherightpersonhastherightjob.Cooperatewithworkerstoensurethatthejobmatchesplansandprinciples.Ensureanequaldivisionofworkandresponsibilitybetweenmanagersandworker.Time-and-MotionstudiesTime-and-Motionstudies

Ataskwasdividedintoitsbasicmovements,anddifferentmotionsweretimedtodeterminethemostefficientwaytocompletethetask.Afterthe“onebestway”toperformthejobwasidentified.

Taylor’sScientificManagementadvantageProductivityandefficiencyinmanufacturingimproveddramaticallyTheconceptsofscientificmethodsandresearchwereintroducedtomanufacturingEmphasizedtheneedforcooperationbetweenmanagementandworkersTheconceptofamanagementspecialistgainedprominence

DisadvantagesIgnoredmanyjob-relatedsocialandpsychologicalfactorsbyemphasizingonlymoneyasaworkerincentive.Productiontaskswerereducedtoasetofroutine,machine-likeproceduresthatledtoboredom,apathy,qualitycontrolproblems.Abusetheirpowertosetthestandardsandthepiecerates,thusexploitingworkersanddiminishingtheirimportance.Didnothelpmanagersdealwithbroadexternalissues.Apaymentplaninwhichemployeesarepaidafixedamountofmoneyforeachunitofoutputproduced.TheAdministrativeManagement

Emphasizedtheperspectiveofseniormanagerswithintheorganization.Andarguedthatmanagement

wasaprofessionandcouldbetaught.HenriFayol5functionsofmanagementThe14principles5functionsofmanagement

PlanningOrganizingCommandingCoordinatingControlling.The14principles

DivisionofworkAuthorityDisciplineUnityofcommandUnityofdirectionSubordinationofindividualinteresttothegeneralinterestRemunerationCentralizationScalarchainOrderEquityStabilityandtenureofpersonnelInitiativeEspritdecorpsHumanRelations

Emphasizeinformalworkrelationshipsandworkersatisfaction.Stressprimarilyemployeewelfare,andcommunication.Socialneedshadprecedenceovereconomicneedsandtheinformalgroupexertedcontroloverthebehaviorofemployees.Gainthecooperationofthegroupandpromotejobsatisfactionandnormsconsistentwiththegoalsoftheorganization.BureaucracyMaxWeberFunctionThecontemporaryapproachestomanagementMaxWeberHebelievedbureaucraticstructurecouldeliminatethevariabilitythatresultswhenmanagersinthesameorganizationhavedifferentskills,experiences,andgoals.Headvocatedthattherolesthemselvesbestandardizedsothatpersonnelchangeswouldnotdisrupttheorganization.Emphasizedastructured,formalnetworkofrelationshipsamongspecializedpositionsinanorganization.Rulesandregulationsstandardizebehavior,andauthorityresidesinpositionsratherthaninindividuals.Theorganizationneednotrelyonaparticularindividual;butitwillrealizeefficiencyandsuccessbyfollowingtherulesinaroutineandunbiasedmanner.Bureaucracy’functionBureaucraciesareespeciallyimportantBureaucraticpositionsfosterspecializedskills,eliminatingmanysubjectivejudgmentsbymanagers.Iftherulesandcontrolsareestablishedproperly,bureaucraciesshouldbeunbiasedintheirtreatmentofpeople,bothcustomersandemployees.Quantitativemanagement

Helpsamanagermakeadecisionbydevelopingformalmathematicalmodelsoftheproblem.Computershavefacilitatedthedevelopmentofspecificquantitativemethods.

break-evenanalysis.Organizationsapplythesetechniquesinmanyareas,includingproduction,qualitycontrol,marketing,humanresources,finance,distribution,planning,andresearchanddevelopment.Organizationalbehavior

Studiesandidentifiesmanagementactivitiesthatpromoteemployeeeffectivenessthroughanunderstandingofthecomplexnatureofindividual,group,andorganizationalprocesses.Organizationalbehaviordrawsfromavarietyofdisciplines,includingpsychologyandsociology,toexplainthebehaviorofpeopleonthejob.TheoryXandTheoryYDouglasMcGregorMarkedthetransitionfromhumanrelationsTheoryX

Managersassumeworkersarelazyandirresponsibleandrequireconstantsupervisionandexternalmotivationtoachieveorganizationalgoals.

TheoryY

Managersassumeemployeeswanttoworkandcandirectandcontrolthemselves.Managerswhoencourageparticipationandallowopportunitiesforindividualchallengeandinitiativewouldachievesuperiorperformance.

Theclassicalapproachesdisadvantage

Ignoredtherelationshipbetweentheorganizationanditsexternalenvironmentandusuallystressedoneaspectoftheorganizationoritsemployeesattheexpenseofotherconsiderations.

SystemsTheory

Providesawaytointerpretorganizations.

Takesaholisticviewoftheentireorganizationalsystemandstressesprocess.Includeopenversusclosedsystems,efficiencyandeffectiveness,subsystems,equifinality,andsynergyThisconceptstatesthattherearemanyavenuestothesameoutcome,i.e.manydifferentcombinationsofsubsystems,ideas,andmethodscanleadtothesamegoal.

Thecontingencyperspective

Avarietyoffactors,bothinternalandexternaltothefirm,mayaffecttheorganization’sperformance.Thereisno“onebestway”tomanageandorganize,becausecircumstancesvary.Threekeydirectionsformanagementtheory

GlobalinterdependenceThesearchforexcellenceThequalityrevolutionMiddleAges

Lastedfromaboutad350toabout1450.Atthebeginning,thewesternhalfoftheRomanEmpirebegantofragmentintosmaller,weakerkingdoms.Duringthistime,theprecursorsofmanymoderninstitutions.InventedbypeopleduringtheRenaissance,aperiodofculturalandliterarychangeinthe14th,15th,and16thcenturies.TheadjectivemedievalcomesfromtheLatinwordsforthisterm,medium(middle)andaevum(age).InventoryAdetailed,itemizedlist,report,orrecordofthingsinone'spossession,especiallyaperiodicsurveyofallgoodsandmaterialsinstock.Stocksofgoodsormaterialsoftenarelocatedatpointswherethereisachangeintherateandunitofmovement.Inventoriesrepresentaninvestmentthattheownerhopestosell.

Costsassociatedwithholdinginventories,includinginterestonthemoneyinvestedintheinventory,storagecosts,andrisksofdeterioration,obsolescence,andshrinkage.Shrinkage

Inventory“shrinkage”isthetermthatacknowledgesandmeasuresthefactthatmostinventoryrecordsshowmoregoodshaveenteredaninventorythancanbefound.TrialandErrorAmethodofreachingacorrectsolutionorsatisfactoryresultbytryingoutvariousmeansortheoriesuntilerrorissufficientlyreducedoreliminated.Problem-solvingactivity:

emphasizessimpletrialanderror

requiressomedegreeofinsightTheindividualproceedsmainlybyexploringandmanipulatingelementsoftheproblemsituationinanefforttosortoutpossibilitiesandtorunacrossstepsthatmightcarryhimclosertothegoal.NotnecessarilyovertEconomiesofscaleTheloweringofcoststhroughtheproductionoflargervolume.WhatAreEconomiesOfScale?

TheStagesOfIndustryGrowth

DoesSizeReallyMatter?

AdamSmith

(1723-1790)AnInquiryintotheNatureandCausesoftheWealthofNations

(国民财富的性质和原因的研究)TheoryofMoralSentiments

道德情操论(1759).BorninKirkcaldy,ScotlandEducatedattheuniversitiesofGlasgowandOxford.From1748to1751Gavelecturesonrhetoricandbelles-lettresinEdinburgh.ContributedmuchtothedevelopmentofSmith'sethicalandeconomictheories.SeealsoThematicEssay:BritishPoliticalandSocialThought.WealthofNationsRepresentsthefirstseriousattemptinthehistoryofeconomicthoughttodivorcethestudyofpoliticaleconomyfromtherelatedfieldsofpoliticalscience,ethics,andjurisprudence.Itembodiesapenetratinganalysisoftheprocesseswherebyeconomicwealthisproducedanddistributedanddemonstratesthatthefundamentalsourcesofallincome.Thecentralthesis

Introduction:

AdamSmith'sLife:

TheSpiritoftheAge:

TheWealthofNations:

Quotes.

Dates&EventsDuringSmith'sLife.

ThecentralthesisIsbestemployedfortheproductionanddistributionofwealthunderconditionsofgovernmentalnoninterference,orlaissez-faire,andfreetrade.Theproductionandexchangeofgoodscanbestimulated,andaconsequentriseinthegeneralstandardoflivingattained,onlythroughtheefficientoperationsofprivateindustrialandcommercialentrepreneursactingwithaminimumofregulationandcontrolbygovernments.DetailedsystemsThesesystemsreliedontimeandmotionstudies,whichhelpdeterminethebestmethodsforperformingataskintheleastamountoftime.HenriFayol

(1841-1925)AFrenchengineeranddirectorofmines,waslittleknownoutsideFranceMovedintoresearchgeologyandin1888joined,ComambaultasDirector.OnretirementhepublishedAcomprehensivetheoryofadministration.

Earlycontributortoaclassicaloradministrativemanagementschoolofthought.Espritdecorps

GroupspiritSenseofunionandofcommoninterestsandresponsibilitiesinsomegroup.ComradeshipWeberMax

(1864-1920)Germaneconomistandsocialhistorian,knownforhissystematicapproachtoworldhistoryandthedevelopmentofWesterncivilization.WasbornApril21,1864,inErfurt,andeducatedattheuniversitiesofHeidelberg,Berlin,andGöttingen.HeldprofessorshipsineconomicsattheuniversitiesofFreiburg(1894),Heidelberg(1897),andMunich(1919).HewaseditoroftheArchivfürSozialwissenschaftundSozialpolitik,theGermansociologicaljournal,forsomeyears.WeberMaxChallengedbytheMarxisttheoryofeconomicdeterminism.

Hisbest-knownworks-

TheProtestantEthicandtheSpiritofCapitalism

TheReligionsoftheEast

series,inwhichhepostulatedthattheprevailingreligiousandphilosophicalideasintheEasternworldpreventedthedevelopmentofcapitalisminancientsocieties.BureaucracyAdministrationofagovernmentchieflythroughbureausordepartmentsstaffedwithnon-electedofficials.2)Managementoradministrationmarkedbydiffusionofauthorityamongnumerousofficesandadherencetoinflexiblerulesofoperation.3)Aprofessionalcorpsofofficialsorganizedinapyramidalhierarchyandfunctioningunderimpersonal,uniformrulesandprocedures.MathematicalmodelEitheroftwodecidedlydifferentkindsofmathematicalrepresentation.Physicalmathematicalmodelsincludereproductionsofplaneandsolidgeometricfiguresmadeofcardboard,wood,plastic,orothersubstances.Modelsofconicsections,curvesinspace,orthree-dimensionalsurfacesofvariouskindsmadeofwire,plaster,orthreadstrungfromframes.

Modelsofsurfacesofhigherorderthatmakeitpossibletovisualizeabstractmathematicalconcepts.MathematicalmodelAnyrealsituationinthephysicalandbiologicalworld,issubjecttoanalysisbymodelingifitcanbedescribedintermsofmathematicalequations.Optimizationandcontroltheorymaybeusedtomodelindustrialprocesses,trafficpatterns,sedimenttransportinstreams,andothersituations.MathematicalmodelInformationandcommunicationtheorymaybeusedtomodelmessagetransmission,linguisticcharacteristics,andthelike.Dimensionalanalysisandcomputersimulationmaybeusedtomodelatmosphericcirculationpatterns,stressdistributioninengineeringstructures,thegrowthanddevelopmentoflandforms,andahostofotherprocessesinscienceandengineering.Break-evenanalysisIsatechniquewidelyusedbyproductionmanagementandmanagementaccountants.Itisbasedoncategorisingproductioncostsbetweenthosewhichare"variable"andthosethatare"fixed"TheBreak-EvenChartFixedCosts

Arenotdirectlyrelatedtothelevelofproductionoroutput.Inthelongtermfixedcostscanalter-perhapsasaresultofinvestmentinproductioncapacityorthroughthegrowthinoverheadsrequiredtosupportalarger,morecomplexbusiness.Examplesoffixedcosts:

-Rentandrates

-Depreciation

-Researchanddevelopment

-Marketingcosts-AdministrationcostsVariableCosts

Whichvarydirectlywiththelevelofoutput.Theyrepresentpaymentoutput-relatedinputssuchasrawmaterials,directlabour,fuelandrevenue-relatedcostssuchascommissio

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