EVOLUTION OF

MANAGEMENT THOUGHT
MANAGEMENT THOUGHT PERIOD
EARLY CONTRIBUTIONS UPTP 19TH CENTURY

SCIENTIFIC MANAGEMENT 1900-30

ADMINISTRATIVE MANAGEMENT 1916-40

HUMAN RELATIONS APPROACH 1930-50

SOCIAL SYSTEM APPROACH 1940-50

DECISION THEORY APPROACH 1945-65

MANAGEMENT SCIENCE 1950-60

APPROACH
HUMAN BEHAVIOUR APPROACH 1950-70

SYSTEMS APPROACH 1960’S ONWARDS

CONGRUENCY APPROACH 1970’S ONWARDS

 EARLY CONTRIBUTIONS
CONTRIBUTION BY CHESTER BARNARD
 Organisations are social systems that require human
cooperation.
 Organisations are made up of people with interacting social
relationships.
 Managers major functions are to communicate & stimulate
subordinates to higher levels of efforts.
 Success depends upon cooperation among employees.
 External environment of organisation needs to be studied
(Customers, Investors, Suppliers etc)
 Managers should encourage development of informal
organisation to serve as a means of communication.
 4 elements of organisation:
 System of functionalisation
 System of effective incentives
 System of power
 System of logical decisions
 Bottom up authority
 Providing motivation through participation, power,
belongingness
 Responsible leadership
 SCIENTIFIC MANAGEMENT
 Given by Frederic Taylor (1856-1915)
 He was critical of management for poor performance of their
organizations.
 He was critical of workers for soldering on the job or
producing at less than the capacity.
 He scientifically determined how physical tasks should be
accomplished.
 It involved establishing proper sequence of tasks, the motions
to be performed, time required to complete the operations,
equipment to be used, selection of the persons with right
physical skills.
 He was concerned with efficiency of workers & optimum
utilization of resources.
DEFINITION:
Taylor, “Scientific management means knowing exactly what
you want men to do & seeing that they do it in the best &
cheapest way.”

PRINCIPLES OF SCIENTIFIC MANAGEMENT:

 Science, not rule of thumb

Jobs to be performed should be based upon scientific inquiry.

Rule of thumb does not involve thinking before doing.
 Harmony, not discord

 Cooperation, not individualism

 Maximum, not restricted output

 Separation of planning & operational works

 TECHNIQUES OF SCIENTIFIC
MANAGEMENT

 FUNCTIONAL FOREMANSHIP:
 Its basic objective is to separate planning functions from
executive functions
 It is the extension of the principle of specialization or division
of labour
 It requires specialists to guide, direct & control workers.
 Foreman should have intelligence, education, tacts etc
 FACTORY MANAGER

PLANNING INCHARGE PRODUCTION INCHARGE

INSTRUCTION
ROUTE TIME & COST DISCIPLINE
CARD
CLERK CLERK CLERK
CLERK

REPAIRS
SPEED BOSS GANG BOSS INSPECTOR
BOSS

WORKMAN
 STANDARDISATION OF WORK:
It indicates maximization of output through the use of
standard equipment, methods & processes. It also means the
establishment of norms, sizes, types, qualities, weights,
measures etc.
 SIMPLIFICATION OF WORK:
It means elimination of superfluous varieties, sizes &
dimensions.
 FATIGUE STUDY:
It determines amount & frequency of rest intervals in
completing a task.
 METHOD STUDY:
It deals with methods of performing a job. It advocates that the
best way to perform the task should be determined
 TIME STUDY:
It determines standard time taken to perform a well defined job
in the organization. Its objective is to determine number of
workers to be employed, to frame suitable incentive schemes
etc.
 MOTION STUDY:
It explains the movements of operators (employees) &
machines to perform a job so as to identify & eliminate their
unnecessary movements.
 DIFFERENTIAL WAGE SYSTEM:
To award wages to employees on the basis of their
performance. He suggested two types of wages for similar
work:
a) Higher wages for efficient workers
b) Lower wages for workers performing below the standards
 MENTAL REVOLUTION:
Taylor insisted on change in mental attitude of workers &
management towards each other. Feeling of suspicion against
each other is to be eliminated through motivation, efficiency &
discipline.
 OPERATIONAL MANAGEMENT

 Given by Henry Fayol

 Also called administrative management
 He looked at problems of managing an organisation from top
management point of view.
 Major contributions of Fayol:
 To identify & classify business activities
 To identify management as a separate set of skills or functions
 To classify functions of management into 5 elements
 To develop universal principles of management
 To emphasize managerial qualities
CLASSIFICATION OF BUSINESS ACTIVITIES

 TECHNICAL ACTIVITIES: Production, Manufacturing

 COMMERCIAL ACTIVITIES: Buying, Selling, Exchange

 FINANCIAL ACTIVITIES: Optimum use of capital

 SECURITY ACTIVITIES: Protection of property & persons

 ACCOUNTING ACTIVITIES: Maintenance of accounts

 MANAGEMENT ACTIVITIES: POSDCoRB

ELEMENTS/FUNCTIONS OF MANAGEMENT:
 Forecasting & Planning

 Organising

 Commanding

 Coordinating

 Controlling
 FAYOL’S APPROACH OF STUDYING
MANAGEMENT
He has divided his approach into three parts:
 ELEMENTS OF MANAGEMENT:

 Forecasting & Planning

 Organising

 Commanding

 Coordinating

 Controlling

 MANAGERIAL QUALITIES & TRAINING:

-Physical -Mental
-Moral -Educational
-Technical -Experience
PRINCIPLES OF MANAGEMENT (14 PRINCIPLES):
1. DIVISION OF WORK: Work should be divided into small
tasks. Each employee should be trained in the job he has to
perform.
2. AUTHORITY & RESPONSIBILITY:
Authority = Official authority + Personal authority
3. DISCIPLINE:
4. UNITY OF COMMAND: An employee should receive
orders from one superior only
5. UNITY OF DIRECTION: Each group of activities having
same objective must have one head & plan
6. SUBORDINATION OF INDIVIDUAL INTEREST TO
GENERAL INTEREST: Reconcile individual interests with
group interests
7. REMUNERATION OF PERSONNEL: It should be fair &
provide maximum satisfaction to the employees
8. CENTRALISATION & DECENTRALISATION:
Individual circumstances will determine about the degree of
centralisation or decentralisation
9. SCALAR CHAIN: It means line of authority from highest to
lowest
10. ORDER: Arrangement of things & persons. Right man for
right job
11. EQUITY: Securing loyalty & devotion of employees by acts
of kindness & justice by manager. But use of force
whenever required
12. STABILITY OF TENURE OF PERSONNEL: Change
should be made only when it seems unavoidable
13. INITIATIVE: Means thinking out & execution of the plans
14. ESPIRIT DE CORPS: Need for teamwork
 HUMAN RELATIONS APPROACH
 Given by Elton Mayo (He conducted Hawthrone experiments)
 Earlier people were considered no different than machines
 No attention was paid on their behaviour & motivation
 Despite getting all the material benefits employees were
dissatisfied
 Mayo laid attention on human beings working in the
organisations
 He conducted four types of experiments on the workers:
 Illumination experiments
 Relay assembly test room experiment
 Mass interviewing program
 Bank wiring observation room experiments
 ILLUMINATION EXPERIMENT:
 It refers to amount of light at the work place.
 This experiment was conducted to know whether there is any
relationship between degree of illumination at the workplace
& the work output (efficiency) of the employees.
 No such relationship was found.
 RELAY ASSEMBLY TEST ROOM EXPERIMENT:
 The aim of this experiment was to determine the effect of
changes in various job conditions on group productivity.
 A group of two girls was chosen & was asked to choose four
more girls.
 Various conditions of job were changed like change in pay
scale, participation in decision making, time suited to them
etc.
 Result- Productivity increased.
 Later it was observed that even without these incentives
productivity had increased further.
 Result- Girls had developed a sense of belongingness &
stability to the organisation.
 MASS INTERVIEWING PROGRAM
 A large number of employees were interviewed from 1928-30
to know about their attitude towards company, wages,
supervision, leader, promotion etc.
 It was discovered that the workers’ behaviour was being
influenced by the group behaviour.
 BANK WIRING OBSERVATION ROOM EXPERIMENTS
 These experiments were conducted between 1931-1932.
 Purpose: To know about the impact of small group on individual
behaviour.
 Fourteen male workers were chosen.
 Their wages were based on average output of each worker &
bonus on average output of whole group.
 But it was found that workers were not interested in achieving
their targets.
 Reasons-
o Fear of unemployment
o Fear of raising the standards
o Protection of slower workers
o Satisfaction on the part of the management
 It was suggested that informal relations are very important.
 IMPLICATIONS OF HAWTHORNE EXPERIMENT
 Social factors in output: Impact of society on output.
 Group influence: No individual wants to go against the group.
 Conflicts: Conflicts between the interests of the group &
interests of the organisation should be matched.
 Leadership: Performance of the employees is affected by the
behaviour of the leader.
 Supervision: Supervisors also influence the employees.
 Communication: Management should discuss matters
concerning employees with them.
 MAX WEBER (1864-1920)
Three works of Weber:
• Definition of sociology- It is a science that attempts
interpretive understanding of social actions in order to arrive
at cause & effect relationship.
• Objectivity in social sciences- Absolute objectivity is not
possible.
• Protestant ethics & spirit of capitalism- Capitalism is the
pursuit of profits by means of continuous, rational, capitalistic
enterprise.
 BUREAUCRATIC MANAGEMENT
THOUGHTS OF WEBER
 What is authority & how subordinates accept the exercise of
authority by the superior?
 For its answer he gave three types of authorities:
 Charismatic leader’s authority: By virtue of some exceptional
innate qualities.
 Traditional or Rational authority: When a charismatic leader
dies & his son replaces him, authority becomes part of leader’s
role & not of his personality.
 Bureaucratic authority: It is most efficient form of authority. It
is rational because objectives of the organization are specific
& is legal because authority stems from clearly defined set of
rules, procedures & roles. It existed in ancient Egypt & ancient
Rome.
 Ideal type of Bureaucracy:
It is characterized by an elaborate hierarchical division of
labour directed by explicit rules applied by full time, life time
professionals who do not in any sense own the means of
administration or their jobs or the source of their funds & live
off a salary, not from income derived directly from
performance of their job.
 Features of Bureaucratic model:
 Clear separation between superior & subordinate.
 Division of labour based upon competence & functional
specialization.
 Clear divorce between personal & official matters.
 Clear system of rules, regulations & procedures.
 Hierarchy in position.
 TOP MANAGEMENT

MIDDLE MANAGEMENT
MIDDLE MANAGEMENT

SUPERVISORY SUPERVISORY SUPERVISORY

SUPERVISORY
MANAGEMENT MANAGEMENT MANAGEMENT
MANAGEMENT
 IMPLICATIONS OF BUREAUCRACY

 Personally the office holders are free subject to the authority in

official obligations.
 Hierarchy of offices
 Sphere of competence
 Free selection into office
 Candidates appointed, not elected
 Remuneration fixed by salaries
 Office is the sole or primary occupation of incumbent
 BENEFITS OF BUREAUCRACY
 Consistency in employee behaviour as rules & procedures are
decided for every work.
 Duties & responsibilities are clearly defined.
 Selections & promotions are based upon merit.
 Division of labour helps workers in becoming experts in their
jobs.
DISADVANTAGES
 Too much of red tape & paper work.
 Employees don't develop belongingness to organization.
 Hinders initiative & growth of the employees.
 Resistance to change- As the employees become used to the
system.
 GILBRETHS

 Developed by Frank Bunker Gilberth & Lillian Evelyn Moller.

 Together they developed motion study.
 Tried to develop the best way to perform the tasks.
 Because of his efforts Frank reduced the number of motions
made in laying a brick from 18 to 4-5.
MOTION STUDY:
Frank Gilbreth, “It is the science of eliminating wastefulness
resulting from unnecessary, ill directed & inefficient motions.
The aim of motion study is to find & perpetuate the schemes
of least waste methods of labour.”
 Used motion pictures for studying work & workers.
 Developed micro motion study- Breaking down of work into
fundamental elements called THERBLIGS (Opposite of
GILBRETH)
 Used motion studies to find ways to simplify & speed a
worker’s task to help improve production, raising employer’s
profits.
 Lady Gilbreth helped in designing modern kitchens.
 Lady Gilbreth also helped in adapting her techniques for
handicapped.
THERBLIGS:
 They studied various movements of limbs of brick layers &
classified bodily movements into elements called
THERBLIGS-
Search, Find, Select, Grasp, Transport loaded, Position,
Assemble, Use, Dissemble, Inspect, Pre position, Release load,
Transport empty, Rest for overcoming fatigue, Unavoidable
delays, Avoidable delays, Plans
Tools of Motion Study:
 Process charts: charts to picturise movement of jobs.

 Applications of laws of motion economy: such laws suggest

ways to do work with minimum fatigue & time. Eg; Both
hands should work & rest at the same time, All tools &
materials should be located within normal grasp area.
 Preparation of Questionnaires: for getting various suggestions
for improving work.
 Analysis of THERBLIGS: Bodily movements are analyzed to
find better methods of doing work.
 Micro Motion Study: study of very small elements of motion
with the help of cameras & time devices.
Benefits of Motion Study:
 Efficiency

 Production increase

 Cost reduction

 Wages

 Price

 Working conditions
Disadvantages of Motion Study:
 Monotony: Boredom because of similar type of work.

 Affects initiative

 Efficiency: Does not take into consideration differences in

efficiency level.
 Standards: Set standards might not be achievable.
 CONTRIBUTION OF LIKERT

 Classified organizations into 4 management systems:

 Primitive Authoritarian:
 Management uses threat & fear
 Top down communication
 Superiors & subordinates are distant
 Benevolent Authoritarian:
 Management uses rewards
 Policy decisions come from top
 Some prescribed decisions may be delegated
 Consultative:
 Management offers rewards & occasional punishments
 Big decisions come from top
 Involvement in decision making
 Some trust & teamwork exists
 Participative:
 Management encourages group participation & involvement in
setting high performance goals
 Communication flows in all directions & is open & frank
 Superiors & subordinates are close
 High productivity & better industrial relations
Likert advocated this system.
Features of effective management:
 Motivation to work must be fostered by modern principles &
techniques.
 Employee’s own needs, interests, desires must be maintained
& enhanced.
 Organization with effective work group must be built.

 Mutual support & respect among different groups.

Principles of participative system:

 Apply fully the principles of supportive relationships.

 Build an organization of tightly knit, highly motivated work

groups.
 Set high goals for efficiency & productivity.
MASLOW’S THEORY (NEED HIERARCHY THEORY)

Self
Actualization
needs

Esteemed needs

Social/Belonging needs

Safety & security needs

Physiological needs
 DOUGLAS MC GREGOR
 His theory is based upon Maslow’s hierarchy of needs.
 He grouped hierarchy into lower order needs (theory X) &
higher order needs (theory Y)
 He suggested that management could use either set of needs to
motivate employees but better results could be gained by
theory Y.
 People in the organization could be managed in two ways:
 Negative- Category X
 Positive- Category Y

Assumptions of Theory X (Authoritarian Management Style):

 Average human being has inherent dislike of work & will
avoid it if he can.
 Most people must be controlled & threatened before they will
work hard enough.
 Average human prefers to be directed & dislikes
responsibility.
 Man needs more than financial rewards at work. He wants an
opportunity to fulfill himself.
 But theory X does not give this opportunity.

 Employees don't work till formal directions are given.

 Most people prefer security over other things.

 Workers need to be supervised closely.

 Money motivates the employees.

Assumptions of Theory Y (Participative Management Style):

 Expenditure of physical & mental effort in work is as natural
as play or rest.
 Man will direct himself if he is committed to the aims of the
organization.
 If the job is satisfying, the result will be commitment to the
organization.
 Imagination, creativity can be used to solve work problems.
 In modern industrial life, intellectual potential of an average
man is partially utilized.
 People do exercise self control, self direction if they are
committed to those goals.
 Management assumes that employees are self motivated.
 Managers try to remove the barriers that prevent workers from
fully actualizing their potential.
 Satisfaction of doing a good job is a strong motivation.
 HERZBERG’S THEORY
 Also called Motivation- Hygiene theory or a Two factor
theory.
 People have two types of needs:
 Needs as animals to avoid pain- Hygiene
 Needs as humans to grow psychologically- Motivation
 Motivation Factors: Achievements, Recognition, Work itself,
Responsibility, Advancement, Personal growth.
 Hygiene Factors or Maintenance Factors: Status, Security,
Relationship with subordinates, Personal life, Relationship
with peers, Salary, Work conditions, Relationship with
supervisor, Company policy & administration, Supervision.
 CONTRIBUTION OF HENRY GANTT
 He advocated that total program goals should be regarded as
series of interrelated derivative plan that people could
comprehend & follow.
 Based on it he identified the relationship among different
activities required to complete a program.
 Task A (Manufacturing Engine) 1 2

 Task B (Manufacturing Steering) 3 4

 But the chart does not depict relationship between different
tasks (Eg Task A & B here)
 This problem was solved through CPM & PERT.
 Activity 1 2 3 4 5
Purchasing Land

Construction

Applying for electricity

connection

Month
It Represents actual time being consumed in
completing the task.
 OPERATIONS RESEARCH/
MATHEMATICAL SCHOOL/DECISION
THEORY/MANAGEMENT SCIENCE
 Under it managing is seen as mathematical processes,
concepts, symbols & models.
 Here management is seen as logical process expressed in
mathematical symbols & relationships.
 FEATURES:
 It offers quantitative aids to decision making eg.
Programming, Decision tree, Game theory etc.
 Focus on rational decision making.
 Develops orderly thinking in management.
 Techniques are used in cash flow management, inventory
management etc.
OPERATIONS MANAGEMENT:
It is the function that is responsible for managing the
production & delivery of an organization’s products &
services.
MANAGEMENT SCIENCE:
This approach tries to increase decision effectiveness through
the use of sophisticated models & statistical methods. Eg:
Goal Programming, LPP, Inventory Management etc.

STEPS IN THE APPLICATION OF OPERATIONS

RESEARCH
 QUANTIFIABLE FACTORS RELATED TO FUNCTIONING OF
BUSINESS SYSTEM, DEFINED IN MATHEMATICAL
LANGUAGE

MATHEMATICAL EXPRESSIONS ARE FORMULATED THAT DESCRIBE

INTER RELATIONS OF ALL
VARIABLES & PARAMETERS

OPTIMUM SOLUTION IS DETERMINED ON THE BASIS OF VARIOUS EQUATIONS OF MODEL

SOLUTION VALUE OF MODEL TESTED AGAINST ACTUAL OBSERVATIONS

SOLUTION IS PUT TO WORK

ROLE IN BUSINESS:
 Use of analytical & objective decision making approach.

 Provides solution to various business problems.

 Proper deployment of resources (Through CPM & PERT)

 Helpful in inventory planning.

LIMITATIONS:
 Does not provide solution to all management problems.

 No importance to human relations.

 Data required is not readily available.

 Inaccurate data leads to wrong decisions.

 SYSTEMS APPROACH

SYSTEM:
“It is a set of elements that are independent but related &
function as a whole for some specific purpose.”

“It is an organized unitary whole, composed of two or more

interdependent parts, where the whole contains identifiable
boundaries from its environment.”
OPEN SYSTEM Vs CLOSED SYSTEM
 Open System: Some systems are open with respect to certain
elements or processes. Here the elements or the processes can
flow into out of the system.
 Closed System: Some systems are closed with respect to
certain elements or processes. Here the elements don't leave
the system.
STEPS IN SYSTEMS APPROACH:
 Define the company as a system.

 Establish system objectives (Performance criteria)

 Identify wider systems (Environment)

 Create formal sub systems

 Integrate subsystems with the whole system.

MAJOR CONCEPTS UNDERLYING THE SYSTEMS
APPROACH (FOUR CONCEPTS):

 SPECIALIZATION: A system is divided into small

components allowing more specialized concentration on each
component.
 GROUPING: To avoid generating complexity, group related
disciplines.
 COORDINATION: Coordinate interaction among groups.
 EMERGENT PROPERTIES: Emergent properties in a system
are to be studied.
SUB SYSTEM:
The parts that make up the whole of a system are called sub
systems.

TYPES/CLASSIFICATION OF SUBSYSTEMS:
 Goal subsystem: Individual & group goals

 Technical subsystem: tools, equipment, skills

 Structural subsystem: authority layers, relationships

 Managerial subsystem: managers who plan, lead, control

 Psychosocial subsystem: psychological & social factors

influencing people at work
SYSTEM BOUNDARY:
Each system has a boundary that separates it from its
environment. In a closed system it is rigid & in an open
system it is flexible.
MC KINSEY’S 7 S APPROACH / FRAMEWORK

Structure

Systems
Shared values

Mc Kinsey’s 7 s Approach

Style
Strategy

Skills Staff
Benefits:
 It helps in viewing interrelationship of strategy formulation &
implementation.
 It helps in linking chosen strategy to variety of activities that
affect implementation of the strategy.