EVOLUTION OF MANAGEMENT THOUGHT

Evolution of management thought can be considered in five stages: 1. 2. 3. 4. 5. Pre-historical Organized Society Era of industrial Revolution Towards consolidation and codification Recent development

1. Pre-historical
Management is as old as man. In the villages of Euphrates valley, a type of management was evolved by the priests who were worshipped by the people, by virtue of their authority as representatives of God. The priests planned trade routes and organized the work of labourers, artisans soldiers and the traders.

2. Organized Society
Another contribution to the development of organization and management was by the Roman Catholic Church. The development of the hierarchy of authority. The specialization of activities along functional lines & the early use of the Staff device are striking examples of the principles of mgmt. developed by the Church.

The principles of management developed in this stage are

Develop sequence of activities and grouping of those activities.
Division of tasks to be performed and the determination of ranks and duties of persons who would perform those tasks, job description and determining the relationships. Performance appraisal through records.

3. Era of industrial Revolution

One noticeable trend of this period was the development of management thought concerned around Factory System.
Adam Smith (Division of Labour), Charles Babbage (Book-Economy of Machinery & Manufacture), Frank Gilbreth (Motion study), Henry Gantt (Gantt Chart), F.W. Taylor (Scientific Management)

 Fredrick Winslof Taylor called as FATHER OF SCIENTIFIC MANAGEMENT Scientific Management means knowing exactly what you want to do, seeing that they do it in the best and the cheapest way. The primary emphasis of scientific management on planning, standardizing (ie regularize) and improving human effort at operative level in order to maximize output with minimum input.

Principles of Scientific Management

Scientific Investigation in place of rule of thumb decision. Scientific Selection and training of workers Co-operation between Management and Labour. Maximum output in place of restricted output. Equal division of responsibility

Aims of Scientific Management :

Increase production Improved Quality Cost Reduction Elimination of wastage Right man for right work Incentive wages

The various contributions of Taylor are as follows He developed the principle of breaking a task (job) into elements for timing the same. Taylor suggested a wage incentive scheme known as Taylors differential piece rate system.

Taylors differential piece rate system

Wages are paid depending upon the quantity produced. Rate differentiate for below and above standard performance. Rate differential to be applied 80% of standard piece rate for below standard performance AND 120% of standard piece rate for above standard performance.

 Standard piece rate = Labour rate per hour / standard output per hour

Lower piece rate = Std. piece rate X 0.8 Higher piece rate = Std. piece rate X 1.20

 Taylor devoted his max. attention towards time studies and he established work standards. Taylor suggested that for increasing production rate, the work of each person should be planned at least one day in advanced and he shall be allotted a definite work to complete by a given time.

4. Towards consolidation and codification

Henry Fayol has been considered as real father of modern management. His conclusion was that all the work done in business enterprises can be divided into six groups: 1. Technical activities (Production, assemble) 2. Commercial activities (buying, selling, exchange) 3. Financial activities (search for optimum use of capital)

4. Security activities (protection of property and persons) 5. Accounting activities (stock taking, balance sheet, costs, statistics). 6. Managerial activities (planning, organizing, command, coordination & control)

Fayols Fourteen principles of Management

1. Division of work: Fayol has advocated division of work to take the advantage of specialization 2. Delegation of authority and responsibility: Proper delegation of authority & assignment of responsibility. 3. Unity of command: A subordinate should receive orders from one superior only. 4. Unity of direction : One unit & one plan for group of activities having the same objectives

5. Discipline : Discipline is necessary for the smooth running of the organization. 6. Subordination of individual interests to the general (group) interests : The interest of the organization is much before the interest of the individuals 7. Remuneration of personnel: Remuneration of employee should be fair and provide maximum possible satisfaction to employees and employers. 8. Centralization: Fayol referred to centralization in the context of authority. There should be one central point in the organization, which has powers to control overall work.

9. Scalar Chain :It is the chain of superior ranging

from the ultimate authority to the lowest level in the organization. 10. Order: It relates to the arrangement of things and people (4 Ms). 11. Equity : It has been pointed out that equity is the result of the combination of two factors Kindness and Justice.

12. Stability of tenure of personnel : No employee should be removed within a short period of time for the well being of the concern, since efficiency can only be achieved by having stable working force
13. Initiative : Employee should be given an opportunity to take some initiative in thinking and executing the plans. 14. Espirit de Corps (Union is strength): Union is strength to achieve teamwork and keep the moral of the workers high.

5. Modern development in Management Thought

Recently the management concepts are attracting mathematical analysis. Operation Research, Linear Programming, CPM & PERT, Software like ERP, SAP etc have been developed to device models as adds to decision making, forecasting, evaluation and controlling.