Finalized Thought Module

WOLKITE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS

CONTINUING EDUCATION PROGRAM
DEPARTMENT OF MANAGEMENT
MODULE OF
MANAGEMENT THOUGHT
MODULE CODE: MGMT-M1061
COURSE CODE: MGMT 1062
MAY: 2018
PREPARED BY:
Dereje Kefale (MBA)
Demelash Shalo (MPA)
EDITORS:
Fanuel Bosha (MBA)
MAY, 2018
Wolkite, Ethiopia
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Module Introduction
Dear students, first and for most you are warmly welcome to the course ‘Management
Thought’. In this course, you will learn the evolution and different schools of
management and the different theories contributing to the development of management.
This course gives you a sense of the structure of the academic ideas arising from the
classical and modern management as well as a practical awareness of the possible paths
their own studies may take. It also includes: Taylorism and Modern Management;
Management Specialization and Realist Theories; Leadership and New Forms of
Management; Yield management in Service Industries; Managing in a Different Culture;
The Relevance of Government and the Need for Public Services; and Past and
contemporary issues in the management of employees.
The main purpose of the course as well as the module is, therefore, to enables you to
have an understanding on:
 The development of management as a function in modern enterprises; differing

views of the managerial function
 Manufacturing in mass production environments; the nature and problems of

project management; and the special requirements of managing service industries
 Past and contemporary issues in the management of employees
 The changing context of employment and the future of work
In accordance, this module is composed of seven units with respective sections and
subsections. The first unit will introduce you to the evolution of management. In this unit,
you will learn rationale of studying management thought and early milestones in
management. The second unit deals with early contributors to scientific management.
Unit three deals with the era of classical management, Unit four focus on the human
relations movement; unit five deal with characteristics of modern approaches to
management; unit six acquaint you with the different theories of motivation. Likewise, the
final unit will explore the emerging trends in management.
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Table of contents
Module Introduction ....................................................................................... ii
UNIT ONE: EVOLUTION OF MANAGEMENT............................................ 1
Unit Introduction ............................................................................................ 1
1.1 What Is Theory? ........................................................................................................ 1

1.2 Management Theory's Role and Importance ............................................................ 2
1.3 Early Milestones in Management ............................................................................. 3
1.4 Practices in Management .......................................................................................... 6
1.5 Theories in Management........................................................................................... 7
1.6 Forces Backing Management Thoughts.................................................................... 8
Unit Summary ................................................................................................. 9
Self –Check Review Questions ...................................................................... 10
Reference: ..................................................................................................... 11
UNIT TWO: FORERUNNERS TO SCIENTIFIC MANAGEMENT ............. 12
Unit Introduction........................................................................................................... 12
2.1 The Early Management Pioneers ............................................................................ 13
2.1.1 Robert Owen (1771-1858) ............................................................................... 13
2.1.2 Charles Babbage (1792-1871) ......................................................................... 14
2.1.3 Captain Henry Metcalfe (1847-1917) .............................................................. 15
2.1.4 Henry Robinson Towne (1844-1924) .............................................................. 16
2.2. Forerunners of Modern Management .................................................................... 17
2.2.1 The Gilbreths (1868-1924 and 1878-1972) ..................................................... 17
2.2.2 Mary Parker Pollett (1968-1933) ..................................................................... 18
2.2.3 Chester. I. Barnard (1886-1961) ...................................................................... 19
2.2.4 Rensis Likert (1903-1972) ............................................................................... 19
2.2.5 Chris Argyris .................................................................................................... 20
Unit Summary ............................................................................................... 21
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References ..................................................................................................... 23
UNIT THREE: THE ERA OF CLASSICAL MANAGEMENT ...................... 24
Unit Introduction .......................................................................................... 24
3.1 Frederick W. Taylor: The Scientific Theory of Management ................................ 25

3.2 Henri Fayol: Principles of Administration.............................................................. 43
3.3 Max Weber: The Bureaucratic Theory ................................................................... 54
Unit Summary ............................................................................................... 67
Reference....................................................................................................... 70
UNIT FOUR: ELTEN MAYO: THE HUMAN RELATIONS APPROACH... 71
4.1 Social Disorganization and Social Malaise............................................................. 72

4.2 Social Disorganization and the Individual .............................................................. 73
4.3 Industry and Disorganization .................................................................................. 74
4.5 Mayo’s Empirical Studies ....................................................................................... 76
Unit Summary ............................................................................................... 82
Reference: ..................................................................................................... 84
UNIT FIVE: THE MODERN ERA ................................................................ 85
5.1. Characteristics of Modern Approaches to Management ........................................ 86

5.2. Systems Approach ................................................................................................. 87
5.3. The Quantitative Approach .................................................................................... 91
5.4 The Contingency/Situational Approach .................................................................. 93
5.5 Socio-Technical Approach...................................................................................... 95
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Unit Summary ............................................................................................... 96
Self-Check Review Questions........................................................................ 96
Reference: ..................................................................................................... 97
UNIT SIX: THEORIES OF MOTIVATION .................................................. 98
Motivation ..................................................................................................................... 99
6.1 The Concept of Motivation ..................................................................................... 99
6.2. Classification of Theories of Motivation ......................................................... 100
I. Early Theories of Motivation ............................................................................... 101
1. Maslow’s Need Hierarchy ............................................................................ 101
2. Herzberg’s Motivation-Hygiene Theory:...................................................... 104
3. Theory X and Theory Y” of Douglas McGregor ......................................... 107
4. The ‘Carrot and Stick’ Approach ................................................................. 109
II. Contemporary Theories of Motivation............................................................. 110
1. McClelland’s Achievement Motive.............................................................. 111
2. Expectancy Theory ....................................................................................... 112
3. Equity Theory ............................................................................................... 114
4. The Porter and Lawler Model ....................................................................... 115
5. Goal Setting Theory...................................................................................... 117
Unit summary .............................................................................................. 118
Self-Check Review Questions...................................................................... 118
UNIT SEVEN: THE EMERGING TRENDS IN MANAGEMENT .............. 120
Unit Introduction ........................................................................................ 120
7.1. Total Quality Management (TQM):..................................................................... 121

7.1.1 The Principal Tenets of Total Quality Management...................................... 121
7.1.2 Approaches to Implementation of TQM ........................................................ 124
7.1.4 Weakness of Total Quality Management ....................................................... 126
7.1.5 TQM in Ethiopian Public Service Organizations .......................................... 126
7.2. Six- Sigma............................................................................................................ 128
7.3. Theory Z............................................................................................................... 131
7.4 Business Process Reengineering (BPR)................................................................ 132
7.4.1 How Does BPR Differ from TQM? ............................................................... 133
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7.4.2 Reengineering and Organizational Change ................................................... 134
7.4.3 Is there a BPR Methodology? ........................................................................ 135
7.5 The balanced scorecard (BSC model)................................................................... 136
Unit Summary ............................................................................................. 139
Self-Check Review Questions...................................................................... 139
Reference: ................................................................................................... 141
Key Answer for self-check Exercise............................................................ 143
Answer for self-check Exercise Unit- One ................................................................. 143

Answer for self-check Exercise Unit- Two ................................................................ 143
Answer for self-check Exercise Unit- Three .............................................................. 145
Answer for self-check Exercise Unit- Four ................................................................ 147
Answer for self-check Exercise Unit- Five ................................................................. 148
Answer for self-check Exercise Unit- Six .................................................................. 148
Answer for self-check Exercise Unit- Seven .............................................................. 149
Bibliography: .............................................................................................. 151
Assignment .................................................................................................. 153
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UNIT ONE: EVOLUTION OF MANAGEMENT
Objectives of the Unit
After a thorough study of this unit, you will be able to:
 Understand what a theory mean
 Know management theory’s role and importance
 Develop know-how about historical evidences for the existence of management in

ancient times.
 Have a glimpse of theories in management
Unit Introduction
Dear students: Current management theory and practice did not just eventuate. It evolved
over many years. The evolution of the discipline of management has helped to develop a
body of knowledge about the practice of management.
The schools of management thought are theoretical frameworks for the study of
management. Each of the schools of management thought are based on somewhat
different assumptions about human beings and the organizations for which they work.
Since the formal study of management began late in the 19th century, the study of
management has progressed through several stages as scholars and practitioners working
in different eras focused on what they believed to be important aspects of good
management practice. Over time, management thinkers have sought ways to organize and
classify the voluminous information about management that has been collected and
disseminated.
1.1 What Is Theory?
The theories and principles of management makes it easier for us to understand

underlying processes and , on the basis , decide what we must do to function most
effectively as managers. Without theories all we have are intuition, hunches, and hope-
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all of which are of limited use in today’s increasingly complex organizations. In essence,
a theory is a principle or set of principles that explains or accounts for the relationship
between two or more observable facts or events. As managers, we will have at our
disposal many ways of looking at organizations and at the activities, performance, and
satisfaction of employees. Each of these ways may be more useful in dealing with some
problems than with others. For example, a management theory that emphasizes the
importance of a good work environment may be more useful in dealing with a high
employee turnover rate than with production delays. Because, there is no single,
universally accepted management theory, we must be familiar with each of the major
theories that currently coexist.
1.2 Management Theory's Role and Importance
Activity 1.1. What is the importance of studying management thought?
Management theory is important because it is the study of how to make all the people in
your organization more productive. If you are self-employed and have others working for
you, or you outsource certain jobs you are unable to do, then you know how hard it is to
find qualified competent professionals to provide you a service or work for you. You
want to maximize labor productivity and learning how to manage people is key.
The key to business management is to maximize productivity. However, while

management theory does aim towards getting a group of entities to achieve a certain goal,
it does not necessarily achieve in making people more productive towards this cause.
Times are shifting rapidly and the loss of key gurus, like Peter Drucker, in recent times,
bears certain implications. The key contribution in having management theory lies in
what has been achieved by the differing schools of thought within our history. This may
serve as a guide, but one must also bear in mind that management is not just a science,
but also an art.
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1.3 Early Milestones in Management
The history of management extends to several thousands of years in the past. However it
is only since the late 19th C, that management is considered as a formal discipline. In
other words, the practice of management is as old as human race but its theories and
conceptual frameworks are of recent origin. Historically, there were many evidences
indicating the existence of management in early human carriers. Some of the evidences
are:
 The exodus of Israelites (biblical evidence)
We find evidences of managerial thinking in the bible at about 1300BC.In this book,
Jotehro , the father in law of Moses, lectured Moses the following basic concepts:
 Delegation of authority through assignment of jobs. For this Jethro ordered Moses
to appoint rulers of 1000, of 100, of 50, and 10.
 Management by exception principle. Jethro told Moses that rulers should attend
all routine and recurring matters and only unusual and highly important problems
can be referred to him.
 Span of management based on ordinances and laws was exercised
 Moses also did magnificent jobs in personnel selection, training, and organizing
.He was a leader whose ability in government, law making, and human relations
made him worthy during the Hebrews and greatly influenced early civilization.
 The Ancient Egypt
 Structure: The Egyptians built great pyramids from 500-525BC. The pyramids were
built with a technology comparable with modern standards. This indicates a mute
testimony of the managerial and organizational abilities of the ancient Egypt. Egyptians
were understood the importance of planning, controlling, division of labor, and the use of
staff advise as a valuable means for constructing magnificent structures. They also
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appreciated values of spelling out job description and assignment of authority and
responsibility.
 Government: The study of Egyptian government in the old and middle kingdom
and in the new empire illustrates how they applied the principle of control. They
exercised a highly decentralized government from 2160- 1788BC and a highly
centralized government from 1530-1050BC.
 Babylonians (2000-1700BC)
The most significant contributions of the Babylonians was king Hammurabi’s code,
which contained 285 laws, to keep peace along the valley of Tigris and Euphrates. These
laws cover personal property, family, real state, and trade. The Babylonians recognized
some of the laws applicable to business and guide managerial decisions are the following:
 Development of control mechanism: If a merchant lend to an agent and the agent

returned to the merchant whatever the merchant had given to him and the merchant deny
receiving what the agent has given to him, that agent shall call the merchant to account in
the presence of God and witnesses and the merchant will give to him six fold the amount
he obtained.
 Introduced the concept of responsibility: “The mason who builds a house which
falls dawn and kills the inmate shall be put death.” “If a man hire a man to oversee his
farm and furnish him the seed grain and entrust him with oxen and contract with him to
cultivate the field and that man steal either the seed or the crop and found in his
possession shall cut off his fingers”
 Set minimum wage rate: “A man hiring a field laborer shall pay him 8 Guns of
grain per year.”
 Chinese
The Chinese also made contributions to management thought. One of the most famous is
found in the ancient records of Mencious and Chow written around 1100-500BC.It
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indicates that the Chinese were aware of certain principles bearing on planning,
organizing, directing, and controlling.
The constitution of Chow was a directory of all civil servants to the emperor through a
hierarchical relationship that extends from the prime Minster dawn to the household
servants with their specific jobs and responsibilities. The Chinese had also recognized the
need for methodological selection, staffing, and specialization of employees that was
carried out through their civil service system.
 Greeks
Greeks exhibited a real management skill and capacity in the operation of trading
companies. They introduced the science and an art of management. They recognized the
means to maximize output through the use of uniform methods and motion study. They
introduced standard motions, rhythm system of work and work tempos in harmony with
music. Individual such as Xenophon recognized management as a separate art in 400BC.
Socrates showed the universality of management, the importance of employee selection,
specialization of labor, and delegation of authority in 400BC. Pluto also described
specialization further in 350BC.
 Romans
Empire structure: Romans has been able to manage very large territory and people
during their time. They built such giant government and military structure that were so
successful and operated for so many years. They gained control over 50 million people
extending from Great Britain to Syria including Europe and Africa. They reinforced
decentralized government by centralized army as the most effective way to organize and
control the world’s first truly far-flung empire.
The most effective management was put forth by Diocletian’s reorganization of the
empire by abandoning the old organization. First, he divides the empire into 100
provinces. Then, each of these was grouped into one of the 13 dioceses. In turn, the
dioceses were grouped in to four major geographical divisions, which are accountable to
the emperor. Under this organization it was extremely difficult for any one to defy
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imperial authority. To further enhance his power, the emperor delegate only civil
governmental authority to the governors and military forces were stationed under his
control.
The Roman Catholic Church: This most effective formal organization in the western
civilization and it has survived the test of the time. The church has significant
contributions to management theories in the following areas:
Hierarchy of authority: An organizational structure had been designed and scalar chain
of command established from the pope through the bishops to the priests and the laity.
Specialization of activities along the functional lines and the development of the idea of
job descriptions: In the second century two management historians have noted, “the
bishop was the pastor, the presbyters constituted his council, and the deacons supervise
the poor and the sick.” This indicated that there had been assignment of certain tasks to
specific individuals in the church.
The staff concept was developed from the advisory services performed by various
individuals and committees. The concept of staff independence was also employed in the
Catholic Church. This is because many subordinates feel that bosses do not listen them.
1.4 Practices in Management
Objective of the topic
Dear Students: The purpose of this lecture is to demonstrate that knowledge of

management past history can help you better understand current management theory and
practice. Thus, in order to understand the theories and practices used today, it’s important
for management students to look at the evolution of management thought and practices.
The practice of management has always reflected historical times and societal conditions.
Introduction
Many current management concepts and practices can be traced to early management
theories. The practice of management has always reflected the times and social
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conditions, so many organizations are responding to technology breakthroughs and
developing Web-based operations. These new business models reflect today’s reality:
information can be shared and exchanged instantaneously anywhere on the planet. The
purpose of this chapter is to demonstrate that knowledge of management history can help
understand today’s management theory and practice.
Management’s Connection to Other Fields of Study
Management courses have a rich heritage from humanities and social science courses.
A. Anthropology—the study of societies, which helps us learn about humans, their

activities, and differences in fundamental values, attitudes, and behavior between people
in different countries and within different organizations.
B. Economics—concerned with the allocation, distribution of scare resources, and

understanding the changing economy, as well as the role of competition and free markets
in a global context.
C. Philosophy—examines the nature of things, particularly values and ethics.
D. Political Science—studies the behavior of individuals and groups within a political

environment, including structuring of conflict, allocating power in an economic system,
and manipulating power for individual self-interest.
E. Psychology—science that seeks to measure, explain, and sometimes change the

behavior of humans and other animals.
F. Sociology—the study of people in relation to their fellow human beings.
1.5 Theories in Management
Management theories in early period were not really theories, but some discrete practices
and experiences. For that matter management theories in the present centuries are not
totally free from certain problems. To become a theory, an experience or a practice needs
to undergo several modifications, synthesis and testes. For this purpose, a sound
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theoretical and conceptual framework is essential for the theory to take the shape. The
chaos caused by proliferation of management theories is aptly called ‘the management
theory jungle’ and a strong need for a unified and integrated theory of management was
felt a number of theoretical approaches with varying hypothesis, assumptions, and
propositions have emerged. Lack of adequate concept formation is considered a serious
drawback in the development of a unified and integrated management theory. Part of the
difficulty in the development of management concepts comes from the fact that
management is an applied science; it lacks coherent theoretical concepts of its own.
Management scholars have borrowed and applied concepts from other disciplines. Thus
management theories has evolved in a symbiotic relationship to its related and
supporting disciplines like Mathematics, statistics , behavioral science , depriving the
motivation to devise its own conceptual framework independent of related disciplines.
Moreover, management research has been kept psychologically and philosophically
closer to the practice than the theory.
1.6 Forces Backing Management Thoughts
Activity 1.2. Dear Students: what do you think is the challenges facing the study of
management?
Management thoughts have took birth/evolved under the anxiety of political, social and
economic forces. These are explained as follows:
1. Political Forces: Management thoughts have been shaped by the political forces
manifested through the administration of political institutions and government agencies.
The important political forces includes the political assumptions with respect to property
rights, contractual rights, concepts of justice, judicial processes and attitudes towards
governmental control versus laissez-faire. Legal processes which emanate from political
pressures, such as the Union Carbide disaster in Bhopal, have a tremendous impact on
management thinking and practice. Political pressures also define the interrelated rights
of consumers, suppliers, labour, owners, creditors and different segments of public.
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2. Social Forces: These evolve from the values and beliefs of a particular culture of
people. The needs, education, religion and norms of human behaviour dictate the
relations among people, which form social contracts. Social contracts, is that unwritten
but understood set of rules that govern the behaviour of the people in their day-to-day
interrelationships. The same happens between corporations and their constituents- labour,
investors, creditors, suppliers and consumers. These social contracts defined
relationships, responsibilities and liabilities that influence the development of
management thoughts. It gives the society a sense of order and trust in which human
affairs can be conducted in relative security and confidence.
3. Economic Forces: These forces determine the scarcity, transformation and distribution
of goods and services in a society. Every social institution competes for a limited amount
of human, financial, physical and information resources. This competition over scarce
resources allocates them to their most profitable use and is the motivator of technological
innovation by which resource availability can be maximized.
Unit Summary
Dear students: This chapter has gone through a great deal of concept of Management
thought; by defining theory and perspectives in the study of management. The key
contribution in having management theory lies in what has been achieved by the differing
schools of thought within our history. This may serve as a guide, but one must also bear
in mind that management is not just a science, but also an art.
The practice of management is as old as human race but its theories and conceptual
frameworks are of recent origin. Some of the evidences that indicate the existence of
management in early human carriers includes: the exodus of Israelites, the ancient Egypt ,
the Babylonians, Chinese, Greeks ,and Romans. More over the chapter discussed about
challenges which backs up the development management thought i.e. political, social and
economic forces.
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Self –Check Review Questions
Part I Multiple choice
1. Which one of the following is not the significant contribution of Roman Catholic
Church to the development of management theories?
A. Hierarchy of authority
B. Specialization of activities along the functional lines and the development of
the idea of job descriptions
C. The staff concept was developed from the advisory services performed by
various individuals and committees
D. All E. None of the above
2. Which one of the following is true about management theories?
A. Management theories in early period were not really theories, but some
discrete practices and experiences.
B. management theories in the present centuries are not totally free from certain
problems
C. Lack of adequate concept formation is considered a serious drawback in the
development of a unified and integrated management theory
D. management theories has evolved in a symbiotic relationship to its related
and supporting disciplines
E. All
3. What we could understood from Egyptian History?
A. testimony of the managerial and organizational abilities
B. the importance of planning, controlling, division of labor, and the use of staff
advise
C. values of job description and assignment of authority and responsibility.
D. Centralized and decentralized government

E. All
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Part II Discuss the following questions briefly
1. What does theory contribute to the practice of management?
2. Name and discuss the historical evidences that indicate the existence of
management in early human carriers?
3. What are the major road blocks in the development of unified and integrated
management theory?
Reference:
 Karam Pal (PhD), Management concepts and organizational behavior, module for
University of India, lecture notes, lesson # 01 subject code; MC-101
 Kootnz and O’ Donell, Principle of management
 J.S. Chandan, Management concept and Strategies
 Arun Kumar and R. Sharma Principles of Business Management
 Sherlerkar and Sherlerker, Principles of Management
 B.P. Singh, Business management and Organization
 Virtual University of Pakistan, principle of management, module mgt 503
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UNIT TWO: FORERUNNERS TO SCIENTIFIC MANAGEMENT
Unit Objectives
After completing this unit you will be able to:
 Identify the early management pioneers
 Enlist the contributions made by Robert Owen, Charles Babbage, and Captin
Metcalfe towards management
 Understand the contribution of forerunners of modern management to

management thought.
 Point out the latest thinkers on management
Unit Introduction
Dear Students: The story of the development of management is essentially the story of
mankind. Ideas about how to manage organizations have been around since time
immemorial. As pointed out by Stephen P. Robbins, “the Egyptian Payramids and the
Great wall of China are current evidence that projects of tremendous scope , employing
tens of thousands of people, were undertaken will before modern times.” The pyramids
are a particularly interesting example. The largest of the pyramid contained more than
two million stone blocks, each of which weighted seven tones. The construction work
went on far twenty years. More than 100,000 men were engaged to carry the blocks from
quarries (which were many miles away from the sites) and construct the pyramids.
Without proper planning, organizing and controlling such monumental projects would
not have been completed satisfactorily.
Early civilizations throughout the world provided concrete examples of the ancient
practice of management. Around 1750, England entered a period now referred to as the
Industrial Revolution. The essence of this revolution was the substitution of machine
power for human power, and it brought about remarkable changes in everyday life. The
invention of steam engine provided more efficient and cheaper power for ships, trains,
factories, and there by revolutionized commerce and industry. Steam power lowered
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production costs, reduced prices and expanded markets. Continuous innovations in the
field of science and technology lead to the emergence of factories and factories lead to
the need for management and organization.
2.1 The Early Management Pioneers
Activity 1.1 Students! Who are the early thinkers of management?
Dear Students: you have to know, the early management pioneers, who provided solid
mettle for constructing the sophisticated and elegant building of management, included
Robert Owen, Charles Babbage, Metcalfe, and Henry Towne.
2.1.1 Robert Owen (1771-1858)
During the early 1800s working and living conditions of workers were very poor. Child
workers of five or six years of age were commonplace. The standard day was thirteen
hours long. At that time Robert Owen was the manger of several cotton mills in Scotland.
He became concerned about the evils and inhumanity he saw in industrialization. He
therefore advocated “devoting more attention to the human beings”. He felt that the living
machine should be treated with kindness and supplied with sufficient quantities of the
necessities for life. He built better housing for his workers, provided company stores
where goods were available cheaply, reduced the working day to ten and half hours , and
refused to hire children below the age of ten years. He was mainly responsible for the
introduction of the British Factory Act of 1819.
Robert Owen’s contributions to management are:
 He advocated for a change in the attitude of industrialists toward workers
 He made all possible efforts to win the confidence of workers by improving

working conditions and extending several facilities like housing, producing good
to the workers at cheaper rates, etc.
 For increasing productivity, Owen instituted quite a few specific work procedures.
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 Owen has eliminated corporal punishment of children and strongly insisted on
their education.
 Owen has introduced a system of motivation for improving productivity in his

factory.
As a result of the above reforms, Owen has earned more than fifty percent return on
investment, in sharp contrast to the average return in the effective organizational
counterparts being only twenty percent. The essence of Owen’s experiments is that
“investment in human resources was more profitable than investments in machinery, and
other physical and material resources”
2.1.2 Charles Babbage (1792-1871)
Dear Students: A mathematical genius and a Cambridge professor, who it is said never
delivered a lecture, is best remembered as the inventor of the “analytical machine”(which
was the forerunner of the modern computer). In his book on the Economy of Machinery
and Manufacturers he stressed the importance of division of labor, suggested the idea of
profit sharing. Charles Babbage, after studying the conditions of various factories in UK
and France, he found that:
 Most of the workers and owners are guided purely by traditions, estimates, and
imagination.
 Owner-managers never analyze facts to take decisions, in spite of the fact that
facts are available
 The employees and owners were totally ignorant of the basic tools of science and
methods and hence their approach was highly unscientific.
Dear Students: Babbage has produced two outstanding books-(i) The Difference Engine,
and (ii) On the Economy of Machinery and Manufacturers: good machines and effective
workers do not automatically ensure success in business , but certainly , as Babbage
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contends “good management which directs and controls machines and workers is the
most indispensable element in successful business”
The two most valid contributions of Babbage to measurement are:
 He stressed the importance of division of labor on the basis of skills
 He emphasized the necessity of replacing the manual operations by machines. His

bone of contention is that “for lowering the expenses and increasing productivity,
it is essential to apply scientific principles to work processes”
Though, most frequently, F.W. Taylor is credited with the development of scientific
management, it was Babbage who was among the first few who laid the foundation for
formulating the scientific management.
One of the most interesting contributions of Babbage to the management is the invention
of the Analytical Engine, which is the forerunner of today’s digital computer. Babbage
was supervisory in the sense he could forecast the invention of the computer after five
decades. That is why Babbage is remembered as the originator of automated data
processing system. Babbage was a pioneer in operations research. His book on the
Economy of Machinery and Manufacturers provides a veritable mine of information
about the methods of manufacturing in the early nineteenth century. Babbage is also
credited with advocating the fundamental thinking which preceded the formulation of
scientific management.
2.1.3 Captain Henry Metcalfe (1847-1917)
Metcalfe was the well-noted manager of an army arsenal, who retired in 1893. Metcalfe
is credited with a book (1882) The Cost of Manufacturers and Administration of
Workshops: Public and Private. This book is appreciated and recognized as a fascinating
work on management. Metcalfe emphasized “new system of control” ; he visualized the
science of administration is based on principles that are evolved by recording
observations and experiences. Metcalfe asserts that the art of management should be
based on several recorded and accumulated observations which are presented
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systematically. Then, management should make certain cost estimates depending on these
observations. Of course, management should maintain only important and crucial
information and discard the redundant and superfluous information, records, charts, and
reports. Managers should prepare the details of work which then will be conveyed to
foremen and workers. Managers make two types of cards…Time cards and Material
cards. Metcalfe opines that the system of cards has the advantage of giving the workers
an assurance that good work done cheaply would be known as such and that a method
was provided by certain automatic actions of which their work would be surely gauged.
2.1.4 Henry Robinson Towne (1844-1924)
Towne, the co-founder member (as well as the president for long time) of the Yale and
Towne manufacturing company, certainly deserves a place in the list of those who can be
labeled as “pioneers” of management thought. Towne is largely appreciated for providing
solid structure to construct scientific management tower. Towne is an innovator in the
sense he tried to perform a happy marriage of business with engineering. He has
succeeded in motivating the engineers to study management. According to him a
manager should be (i) an administrator, (ii) an engineer, and (iii) a thorough statistician.
He wanted to see these three people in a single person- called manager.
To quote Towne “there are many good engineers, and there are also very good
businessman; but the two are rarely combined in a single person.” This combination of
qualities, together with at least some skill as an accountant, either one person or more, is
essential to the successful management of industrial work.
The main points of his intellectual thinking are:
 Engineers should inculcate cost-consciousness.
 There is a necessity for the people to assemble and create a platform for
exchanging their views and experiences on managing the organizations.
 All engineer-managers must be aware that management is a multi-faceted

concept.
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Thus, Towne’s main emphasis is on exchange of experience between workers, managers
of several different, yet related, organization.
2.2. Forerunners of Modern Management
Activity 2.2 what are the significant changes in modern management?
The forerunners of modern management includes Taylor, Fayol, Gilbreths, Weber, Mayo,
Barnard, McGregor, Likert, Argyris, etc. In this sub topic we will discuss about the
works of Gilbreths , Barnard ,Likert and Argyris. The work of Fayol, Weber , Mayo and
McGregor will be discussed in the upcoming chapters in detail.
2.2.1 The Gilbreths (1868-1924 and 1878-1972)
Frank and Lilian Gilbreth made significant contributions to the scientific management as
a husband and wife team through work on time and motion studies. After giving up his
contracting career Frank Gilbreth along with his psychologist-trained wife carefully
studied work arrangements in the factories to eliminate wasteful hand and body motions.
In order to optimize performance they also experimented in the design and use of tools
and equipment. Frank Gilbreth, especially in bricklaying work, developed a particular
technique that tripled the amount of work a bricklayer could do in a day. His success led
him to make motion and fatigue eliminate these evils in their home as well as in industry.
The Gilbreths used motion picture films to study hand and body motions. Through a
microchronometer they determined how long a worker spent enacting each motion. They
have identified seventeen units of motion whey they called therbligs. (Gilbreth spelled
backwards with the ‘th’ transposed) , in any activity. Whenever they shorten the time
needed for each. The Gilbreths also developed a three-position plan of promotion for
employees. According to this plan, an employee would perform his present job, prepare
for the next highest one, and train his successor all at the same time. Like Taylor,
Gilbreths achieved remarkable and important results. As pointed out by Hampton, “they
increased productivity and worker’s earnings at the same time that they reduced fatigue.”
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2.2.2 Mary Parker Pollett (1968-1933)
M.P.Follett was a social philosopher. She studies political science, history, law and
economics at Harvard and Cambridge. As a political scientist she examined the activities
of many organizations in England and the United States. Though she did not manage any
organization, her ideas had clear implications for management practice. Important
contributions of Follett to management thought may be summarized thus:
Constructive conflict. According to Follett conflict can be constructive. Conflict provides

new challenges to employees, brings out their abilities and talents and gives them
activities with interest and zest. The best way to resolve a conflict is to integrate the
parties involved in conflict and examine the ways of resolving the conflict in cooperative
manner.
Law of the situation. One person should not give orders to another person but should
agree to take the orders from the situation. The head of the production department does
not give orders to the head of marketing department, or vice versa. Each studies the
market and the final decision is arrived at depending on the market requirement.
Leadership. For achieving best results, management should not be autocratic. Leaders
should understand the importance of group activity and integrate the efforts of all to serve
a common purpose.
Authority and Responsibility. Follett argued that the concept of final authority residing in
the position of the chief executive should be replaced by the authority of function in
which an individual has final authority for allotted tasks. She pointed out that authority
belongs to the job and stays with the job.
Coordination principles. According to Follett coordination should be a continuous

process; it should start at an early stage. In other words, coordination should precede all
other functions; it should start before formulating plans and policies.
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2.2.3 Chester. I. Barnard (1886-1961)
He was the president of the New Jersey Bell Telephone company. In his famous book,
The Functions of the Executive, Barnard described organizations as social systems that
require human cooperation. He also introduced the concepts of informal organization,
status, and communication. According to Barnard, formal organization is a cooperative
system in which there are persons able to communicate with each other, and who are
willing to contribute toward a conscious common purpose. It is primary duty of a
manager to stimulate people to high levels of effort. Organizational success, thus,
depends on the manager’s ability to obtain cooperation form members. Additionally, it is
related to how effectively managers are able to satisfy the demands of investors,
suppliers, customers and other external constituencies. As Barnard contends,
management must regard itself in a new light-not just as an employer of resources, a
producer of goods and a maker of profit but also provider of fair wages and security and a
creator of an atmosphere conducive to the growth and development of the worker as an
employee and as a citizen.
2.2.4 Rensis Likert (1903-1972)
Rensis likert, Director of the Institute of Social Research, university of Michigan, wrote
two famous book; New Patterns of Management and Human Organization. According to
Likert, the traditional job-centered supervision is mainly responsible for low productivity
and poor morale of employees. He, therefore, advocated the employee-centered approach
where maximum participation would be given to operatives while setting goals and
making decisions. Likert is best known for his classification of management styles in to
four categories:
System1 (exploitative autocratic). Leaders have no confidence or trust in subordinates.

Subordinates are deprived of participation in decision making.
System 2 (benevolent autocratic). Management has condescending confidence in

subordinates just as a master has towards a servant.
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System 3 (Participative). Leaders have substantial but not total confidence in
subordinates. Participation is meaningful and employees are permitted to participation in
decisions affecting their lives.
System 4 (democratic). Participation is meaningful, as leaders have complete confidence

and trust in subordinate.
According to Likert, system 4 is an ideal management style and is associated with high
productivity, low costs and good labor relations. In an attempt to integrate individual and
organizational goals Likert developed the concept of ‘linking pin’. In this approach each
work group is integrated with the rest of the organization by means of persons who are
members of more than one group. Members with such overlapping membership are
known as ‘linking pins’. Accordingly, every employee acts as a linking pin for the units
above and below him. He is the leader for the lower level units and is a member in the
upper level unit.
2.2.5 Chris Argyris
Argyris is an eminent social scientist and professor of industrial Administration at Yale

University. Argyris is well known for his immaturity-maturity model of personality. His
basic argument is that formal organizations requires ‘behavior that tends to frustrate,
place in conflict and creat failure for, psychologically healthy individuals’. The
traditional, pyramid-tree organizations create childlike roles for employees; they are
encouraged to be passive, dependent and subordinate. To improve morale and
productivity, employees must be given more responsibility, authority, and increased
control over the decisions affecting their lives.
In addition to the management thinkers just discussed above, the modern scholars
include-Gary Dessler, Fulmer, Burrack, Dunham, Duncan, Edgar Huse, Albanese, Van
Fleet, Cummings, Scott, Mitchell, Carzo, Yanozans, Fred Fiedler, Gibson, Ivancewich,
Stoner, Glueck, Keith, Davis, Koontz, O’Donnel, Edger Schien, Kast and Rosenzwig,
and Longnecker. The list of modern management thinkers is almost never-ending.
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Unit Summary
The study of management as a discipline is relatively new, especially when compared

with other scientific disciplines. Yet, to truly understand current management thought, it
is necessary to examine the management thinkers. To these end, it is best to consider both
the early management pioneers and forerunners of modern management. The major early
management pioneers includes Robert Owen, Charles Babbage, Metcalfe, Henry
Robinson Towne. Forerunners of modern management theorists like Gilbreths, Mary
Parker Follett, Chester Barnard, and Rensis Likert made some initial contributions that
eventually led to the identification of management as an important field of inquiry.
Part I: choose the best answer for the following questions.
1. Which of the following don’t belongs to Owen’s contribution to management
A. introducing a system of motivation
B. eliminating negative reinforcement
C. improving working condition
D. the need for change in attitude of factory owners towards workers
E. none of the above
2. Charles Babbage work does not include:
A. He was among the first few who laid the foundation for formulating
scientific management
B. He invented analytical engine
C. He was a pioneer in operations research
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D. Emphasize on division of labor based on skill E. None of the above
3. Metcalfe asserts that the art of management should be based on several recorded and
accumulated observations which are presented systematically.
A. true B. False
4. Follett contribution to management thought includes all of the following but:
A. Conflict can be constructive
B. To get the most out of group work, management should be autocrat
C. Authority should belongs to the jobs and stays with the job.
D. All E. None
5. According to Rensis likert, system 4 is an ideal management style and is associated

with high productivity, low costs and good labour relations.
A. True B. False.
Part II: Discuss the following questions briefly
1. The early management pioneers provided a solid mettle for constructing the
sophisticated and elegant building of management. Do you agree?
2. Write a note on likert’s system 4 management theory
3. What is the major contribution of Henry Robinson Towne (as a management thinker)
to the development of management practice?
4. Pin point and elaborate the contribution of the Gilbreths to the development of
management theory
22
References
 Ernest Dale. “Management. Theory and Practices.” McGraw Hill Inc. New York,
1981
 Basu C. R., Business Organization and Management, 2nd Edition, Tata McGraw-
Hill Ltd.
 Brech, E. F. L., Organization: The Framework of Management, 2nd Edition,
Longman.
 Louis A. Allen, Management and Organisation, McGraw-Hill Kogakusha, Ltd.
 Laurie J. Mullins, Management and Organizational Behaviour, Pitman.
 Robbins Stephen P. and Mary Coulter, Management, 2002, Prentice Hall of India.
 Robbins Stephen P. and Decenzo David A., Fundamentals of Management, 3rd
Edition, Pearson Education Asia.
23
UNIT THREE: THE ERA OF CLASSICAL MANAGEMENT
Unit Objectives
After Completing this unit you will be able to:
 Explain the scientific management movement
 Understand Fayol’s contribution to management thought
 Understand the bureaucratic theory
Unit Introduction
The objective of scientific management was to discover the basic principles of motion
involved in the performance of physical tasks and then to determine the “one best way”
of performing a task. A major contributor to this approach was Frederic Taylor (1856-
1915).He saw scientific management as a “mental revolution” in which a scientific
approach could be brought to bear not only on the performance of physical task but on
all social problems.
Whereas Frederick Taylor (an American) emphasized for the scientific management so as
to produce maximum output for each worker, Max Weber ( a German) put more stress on
bureaucracy as a rational means of achieving efficiency, Henri Fayol ( a French man)
placed more emphasis on flexible principle of administration so as to produce maximum
output from an organization. He is credited to have developed a systematic theory of
administration, and is regarded as the father of modern management theory.
Among the pioneers of administrative thought, Max Weber (1864-1920), a German

sociologist, is regarded as the greatest scholar. He is the architect of the bureaucratic
model-an ideal-type bureaucracy. His analysis of the social and historical context of
administration and, more particularly, bureaucracy may well be Weber’s distinctive
contribution to the literature on public administration.
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3.1 Frederick W. Taylor: The Scientific Theory of Management
Eventful years
Frederick Taylor was born in Phladelphia (USA) on 22 march 1856 in to a family with
deep roots in American culture and strong religious heritage. Although Taylor was rather
austere in his personal life, sports were his extracurricular activity. His interest in
mechanical inventions was manifested in his sport activity. At the age of 16, he entered
Phillips Exeter Academy to prepare for the study of law ( he suffered from a vision
problem owing to studying too much by kerosene lamp) and passed the entrance
examination to Harvard University, but chose to become an apprentice machinist.
Taylor’s Major Works
1. Shop Management (1903): A paper entitled “A piece rate system” read to the
American Society of Mechanical Engineers.
2. The principle of Scientific Management (1911): This was written in 1909 but
published in 1911.
3. Testimony before the Special House Committee (1912): It consists largely of a

justification of his views of shop Management in light of public attack.
4. Scientific Management (1947): This is a volume containing the above three

documents, with a foreword by Harlow S. Person.
Developments of Taylor’s Shop System
Causes of inefficiency and Antagonism
The unifying theme of Taylor’s work is how to increase the “efficiency” of workers who
are naturally lazy. Taylor suggests three causes of inefficiency and antagonism:
1. A belief of the workers that any increase in output inevitably result in

unemployment.
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2. the defective system of management which restrict worker’s output because of ‘
systematic soldiering’
3. Inefficient rule-of –thumb effort-wasting method of work
Taylor blames both the management and the worker for inefficiency. Management,
Taylor charges, is deficient both in terms of its lack of knowledge as to what constitutes a
proper day’s work and in its indifference about proper management practices. The
workers contribute to the problem of inefficiency through “systematic soldiering” or the
purposeful and organized restriction of output. Taylor argues that under the best of
traditional managerial practices – initiative and incentive management –too much
responsibility is placed on the worker. Taylor contends that under initiative and incentive
management, a worker is simply hired and sent out to perform specified tasks with little
in the way of instruction or guidance from the management. The result is all too often
inefficiency. Taylor characterizes initiative and incentive management as a “lazy
manager’s philosophy”, in which management has shirked its primary responsibilities in
regard to job design.
3.1 Methods of Development of Shop System
Taylor conceived it to be the objective of Scientific Management to overcome these

shortcomings. He performed the first pioneering experiment at Midvale Steel Company
in the machine shop, and still more important experiments at Bethlehem Steel Works.
After long research and a serious of experiments, he developed high-speed cutting steel,
improved the design of machine tools, and set forth specific methods for the most
efficient use of the improved tools. In a more systematized form, these experiments led
him to the development of a coordinated system of “shop management”. From his shop
approach, he converted his views and concepts to a philosophy better known as scientific
management. Following are the methods involved in the development of his shop system:
i) Use of scientific research methods. Taylor proposes that mangers can use
scientific research methods to find out the best way to finish every piece of work.
According to him, stopwatch studies of various performances permitted the determination
26
of a reliable standard of output. In this way, Taylor feels that one could scientifically
discover ‘the one best method’ for finishing work in the shortest possible time.
ii) Standardization of tools and materials. Taylor maintains that average

output per man increases if management also standardizes tools in light of the need of
specific jobs. He contends that such technique as instruction cards, routing sequences,
material specifications, material-handling standards, and inventory control systems can
make standards of worker’s performance meaningful.
iii) Selection and training of workers. Taylor attaches great importance to

choosing the right man of the right job. He insists that management must give each
worker the formal training and specific instructions on precisely how to perform every
piece of work with the standardized tools and materials.
iv) Need for good supervision and working conditions. Taylor sees that need
for equally good supervision of a worker and his working conditions. From this need he
expands his concept of ‘functional foremanship’, with specialists employed in every
phase of supervision to ensure good work performance.
v) Payment in accordance with output. Taylor recognizes the need for a

system of paying workers in accordance with their output instead of the mere number of
hours worked. The essence of all these plans in the payment of bonuses and premiums of
workers who meet or exceed the defined task. Further, Taylor writes that “ each man in
the gang become far less efficient than when his personal ambition is stimulated”, he
should be paid in accordance with his individual output rather than the output of the
group to which he belongs.
Taylor maintains and attempts to demonstrate that through these combinations of

methods it would be possible to achieve dramatic increase in efficiency. However,
management alone can be responsible for carrying these methods into effect. Taylor
writes:
It is only through enforced standardization of methods, enforced adaptation of the best

implements and working conditions and enforced cooperation that this faster work can be
27
assured. And the duty of enforcing the adaptation of standards and of enforcing this
cooperation rests with the management alone.
In other words, management is first to make itself efficient before expecting efficiency
from the workers. Once the proper method has been discovered, workers are simply
responsible for executing the plan.
Concepts and Principles of Management

Taylor’s Concept of Management
Taylor views management as the process of getting things done by people operating
independently or in groups. According to George, Taylor’s approach to the managerial
problem is direct and simple:
define the problem, analyze the work situation in all its facets, apply measuring devices
to all facets capable of being measured, experiment by holding all aspects of the job
constant except one which would be varied, developed a guide or principle of
management form the observations and study, and finally , prove the validity of the
principle by subsequent application.
Taylor’s main thesis is that prosperity to the society can come only through the joint
endeavor of the management and labor in the application of scientific methods. He calls
for mental revolution on the part of both management and labor so that they might
cooperate in the spirit of work harmony with a view to improve their respective lots-
attaining high wages for labor and increased output at low costs for management.
Taylor observed that management is neglecting its functions and pushing the burden of
methods and output on labor. He declares that management must do the work of
planning, organizing, controlling, determining methods, and the like for which it is best
suited.
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3.2 Principle of Scientific Management
Taylor observes:
What the workmen want from their employer beyond any thing else is high wages and
what employers want from their workmen most of all is low labor cost of
manufacture…the existence or absence of these two elements forms the best index to
either good or bad management.
Taylor summarizes this approach in his famous statement of the principles of Scientific
Management. These Principles are:
1. Development of a science of management
2. Scientific selection, training and development of the works
3. Bringing science and the workers together
4. A uniform division of work and responsibility between management and workers
Development of a science of management.
Activity 3.1 dear students: what do we mean by Management Science?
In Taylor’s view, the incentive of higher wages for producing more output is vitiated by
being dependent on the initiative of workers as the employers have no idea how much
work can really be accomplished in a give period of time. This inadequacy can be
remedied by the development of a scientific analysis for each element of a man’s work
which replaces the old rule-of-thumb method. Taylor holds that the worker would receive
higher wages than the average worker would receive in the unscientific factories. If he is
unable to attain standard output, the worker will suffer a loss of income.
Scientific selection, training and development of the workers.
To enable the workman earn a high rate of pay, it is imperative that he be scientifically
selected to ensure that he possesses the requisite physical as well as mental qualities.
29
Taylor holds that it is the responsibility of management to train and develop workers and
place them in work situations so that they do “the highest, most interesting and most
profitable class of work”
Bringing science and the workers together. Close cooperation should exist between those
who plan the work (management) and those who do the work (workers), so that they
cooperate in the sprit of work harmony for improving the lots of both labor and the
management. Taylor holds that this process of securing cooperation causes the mental
revolution.
Bringing science and the workers together.
Close cooperation should exist between those who plan the work (management) and
those who do the work( workers) , so that they cooperate in the sprit of work harmony for
improving the lots of both labor and management. Taylor holds that this process of
securing cooperation causes the mental revolution.
A uniform division of work and responsibility between management and workers. And
finally management and workers should share equal responsibilities –with each sector
performing the work for which it is best suited. With this intimate cooperation, the
opportunities for discord and conflict are almost eliminated since the exercise of this
authority is not arbitrary.
Thus, under Scientific Management, science would replace the rule-of thumb, harmony
would replace discord, cooperation would replace individualism, maximum output would
replace restricted output and each man would be developed to his greatest efficiency and
prosperity.
In his quest for a science of management, Taylor discovered or implemented a serious of

innovations pertaining to the machinery of production, the organizational environment,
and the people who used the machines. Some of these developments include the
invention of mechanical devices, the development of cost accounting techniques,
machine-room layout and design, purchasing and store methods, tool standardization and
tool-room reorganization, and mnemonic classification systems.
30
Components of Scientific Management
Taylor’s scientific management comprises mainly three components:
1. Time-and-motion studies
2. Wage-incentive system
3. functional organization
Time motion studies
Activity 3.2 Dear students: Do you think time motion studies bring efficiency? How?
Taylor attributes nine-tenth of the problem of inefficiency to the management’s ignorance

as to the proper time required to perform a task. Accordingly, a primary task for scientific
management is to establish appropriate standards based on scientific investigations of
tasks performed using optimal methods rather than simple observations of actual
performance in the work place. The primary tool of analysis in these investigations is
time-and-motion studies. The general procedure employed in time-and-motion studies is
to break down physical activities in to their component parts, specify the optima routine
for the performance of each component part, and discover the most efficient method for
recombining the parts with the more complex task. For Taylor, the following steps are
involved in the time-and-motion studies:
1. the work is provided with the best implements
2. the task is divided in to elementary units
3. useless movements are discarded
4. The analyst studies a skilled workman performing the task with the help of the
stopwatch.
5. The elementary movements of the task are grouped in a proper sequence to

maximize overall efficient task performance.
6. The proper method of task performance is recorded and the time required to
perform the task is determined.
31
7. An allowance to extent of 20 to 27 percent should be added to the actual working
time to allow for unavoidable delays.
8. Allowance should be made for rest required for a worker to recover from body
fatigue.
The intent of time-and-motion study is to establish standards for the performance of a

task, accounting for the capacity, speed, and durability of the worker. Thus standards
established are to be accepted only conditionally. Those standards are not to be altered,
however, unless a new method of performing the task is discovered. This is required to
prevent arbitrary changes in standards as productivity increase.
Wage- Incentive System
As stated earlier, Taylor incentive system is based on the established standards of work
performance through time-and-motion studies. Under this the worker is assigned a
defined task with detailed instructions and a specified time allowed to perform the task.
When this has been accomplished, the worker is to be paid extraordinary wages for
performing the task in the allotted time and ordinary wages if the time allotment is
exceeded.
Taylor was against the method of award for day work, piecework, and task work with a
bonus or differential piecework. He also objected to gain-sharing plans, such as those
suggested by Towne and Halsey. In Taylor’s views, factors such as special incentives,
higher wages, shorter working hours, better working conditions, and individual reward
for the worker based on performance- all overshadow the importance of the specific
methods of payment.
Taylor would have incentive based on prior standards of work performance with each
worker rewarded on an individual bases and performance linked reward. Thus, under
Taylor’s incentive system, like other pay plans, success is rewarded by higher wages and
failure is penalized by financial loss.
32
Functional organization
Concept of functional foremanship. Taylor recognizes the need for good supervision of
worker. For this need he expands his concept of functional foremanship. Taylor felt that
under the previous practices a military type of organization had prevailed, stressing unity
of command at each level of the organization. Under this arrangement, foremen were
often hired on a contract basis and simply charged with getting the work done, with little
direction from the management. He found this arrangement to be deficient on two
accounts.
First, such an arrangement depends on undue amount of technical expertise from top
management. Second, it expects too much from the foreman and, as a result, effectively
precludes direct control by management over the workers. Consequently, Taylor proposes
both a decentralization of authority from general management and a centralization of
authority form the foreman. In the process, he divides the task previously performed by
the foreman and allocates them to a number of functional foremen.
The decentralization aspect of Taylor’s functional organization is the establishment of a

cadre of technical experts in position of power in the organization. Taylor introduces the
idea of functional foremanship under which workers would be responsible
simultaneously to eight different technical experts in positions of power in the
organization. This power is not to be vested in the top level of the organization but in a
planning department, and authority is to be exercised on the basis of knowledge, not mere
position. The experts in the planning department are to be relatively free from
bureaucratic controls exercised form above. Organizational executives are to confine
themselves to handling problems that not be handled in the planning department. Top
executives are to have a general knowledge of all the steps necessary in the
accomplishment of organizational activities. But operational control for top executives is
to be based on the exception principle.
In his system of management, Taylor favors the use of the exception principle, and lays
down that management reports should be condensed in to comparative summaries,
33
recording only the exceptions ( both good and bad) to past standards or averages. This
could help the manger in looking at the progress of his shop.
The planning department is assigned a wide range of functions including performing

time-and –motion studies, maintaining proper inventory levels, providing for the
maintenance of equipment, analyzing orders from the machines or work, and establishing
a system of classification for materials and equipment.
Foremen (planning). Of the eight functional foremen, only four are to be assigned the
planning department: the route clerk, the instruction card man, the time clerk and the
disciplinarian.
The route clerk has the responsibility to oversee the work flow, study specific jobs and
decide the best method of doing them, indicate the tools to be used , make a chart
showing the course of work through the shop, and determine the order in which various
jobs are to be performed.
The instruction card man is to study the drawings and worksheets made by the route
clerk, prepare detailed instructions for the performance of each operation, and show the
length of time required for each operation.
The time clerk would be responsible for preparing pay and written reports, reviewing
time cards to determine eligibility for bonuses, and allocating work costs to the proper
accounts.
The disciplinarian is to be responsible for reviewing disputes between workers and their
supervisors, hiring and firing, and looking in to other personnel issues.
Foremen (shop floor) the other four functional foremen- the gang boss, the speed boss,
the inspection foreman, and the repair boss-are to serve on the shop floor. These foremen
are to be responsible for the proper execution of the plan.
The gang boss is to ensure the job, organize the required machinery for the job, give
instruction cards to the workers , and route the worker through the shop.
34
The speed boss is to see to it that the job is performed in the prescribed fashion. In case
of failure, the speed boss is responsible for ascertaining the causes and demonstrating that
the work could be done in the allotted time.
The inspection foreman is to analyze the products and to ensure that they conform to
standards.
The repair boss is to be responsible for the adjustment, cleanliness, and general care of
the machines. In addition, the repair boss is to maintain a record of repairs and
maintenance.
Taylor recommends that planning functions must be given special status in the
organization so that at least the works could run smoothly.
Taylor’s preferred style of supervision for these functional foremen is to hold a plum for
the worker to climb after, crack the whip with an occasional touch of the lash, and work
shoulder to shoulder with the worker, pushing, teaching, guiding and helping. In other
words, the worker is expected to do what he is told. In his new style of organization,
Taylor is making the worker directly responsible to eight foremen. To avoid conflict,
Taylor requires that the duties of the various foremen be precisely defined so that none
interferes with the others. More important, Taylor argues that organizational hierarchy is
to be based on abilities, with each individual encouraged to rise to his highest level of
competence. Indeed, Taylor encourages a higher ratio of brain workers to hand workers.
Although these three components –time –and-motion studies, wage-incentive system, and
functional organization-are central to Taylor’s Scientific Management, yet these do not,
in his opinion, capture the essence of scientific management. For Taylor , Scientific
Management is more than a “serious of expedients to increase efficiency”. Instead,
Scientific Management requires a mental revolution on the part of both management and
workers.
Activity 3.3 dear students: Which one of the three scientific management components
are best to the organizational effectiveness?
35
3.3 Scientific Management
Industrial revolution, bright about primarily by the expansion of mechanical industries

coupled with scientific advances, led to managerial problems. In their quest for solutions,
the managers of industrial complexes started finding out management methods ( one of
the first management problems concerned wage systems). Management was becoming
‘things oriented’ instead of ‘firm oriented’ as it was in the past. The ground swell of
management as a separate enterprise was gathering momentum. Persons like Towne and
Metcalfe began to develop and apply a unified system of management. Towne called this
new philosophy of management a management of science, of precision. He is considered
to be the pioneer of scientific management.
The label, Scientific Managements instead of Taylor’s ‘task system’ term, was provided
by louis brandies in 1910. While using Taylor’s ideas, he contented in the Estern Rate
Case that without any increase in rates the railroads could maintain their profits by
introducing more efficient methods of operation. Taylor welcomed the more popular
nomenclature. Soon after, Taylor declared that “management is true science, resting up
on clearly defined laws, rules and principles.” The testimony to the effectiveness of
Taylor’s system led to the popularization of the term Scientific Management. One part of
his testimony before the Special House Committee is particularly appealing for its
statement of what Scientific Management is not.
Aims of Scientific Management
Proponents of scientific management, in particular Taylor, enunciated the following aims

of scientific management. The objectives of scientific management are as:
1. Gauge industrial tendencies and the market in order to regularize operations in a

manner which will conserve the investment, sustain the enterprise as an
employing agency, and assure continuous operation and employment.
2. Assure that employee not only continuous operating and employment by correct
gauging the market , but also to assure by planned and balanced operations a
continuous earning opportunity while on the payroll.
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3. Earn through a waste-saving management and processing technique, a large
income from a given expenditure of human and material energies, which shall be
shared through increased wages and profits by workers and management.
4. Make possible a higher standard of living as a result of increased income to

workers
5. Assure a happier home and social life to workers through removal, by increase of
income of many of the disagreeable and worrying factors in the total situation.
6. Assure healthful as well as individually and socially agreeable condition of work
7. Assure the highest opportunity for individual capacity through scientific ways of
work analysis and of selection , training, assignment, transfer and promotion of
workers.
8. Assure by training and instruction foremanship the opportunity for workers to

develop new and higher capacities, and eligibility for promotion to higher
positions.
9. Develop self-confidence and self-respect among workers through opportunity

afforded for understanding for one’s own work specifically , and of plans and
methods of work generally.
10. Develop self-expression and self-realization among workers through the

simulative influence of an atmosphere of research and valuation, through
understanding of plans and methods, and through the freedom of horizontal as
well as vertical contacts afforded by functional organization.
11. Build character through the proper conduct of work.
12. Promote justice through the elimination of discrimination in wage rates and else
where.
13. Eliminate factors of the environment which are irritating and the causes of
frictions, and to promote common understanding, tolerances and the sprit of team
work.
Impact of Scientific management
Activity 3.4 dear students: what do you think is the impact of scientific management in
the organizational performance?
Scientific management opened the way for improvement in successful ventures. It

brought about a more effective use of labor, material and managerial capabilities.
Taylor’s system of management, based on scientific principles, promoted a new culture
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and values in sharp contrasts to those existing at the time. Scientific management , for
example, placed emphasis on eliminating wastes in effort, materials, time and skills.
Taylor’s concept or organization under Scientific Management is thus on in which

harmony is ensured through close and intimate cooperation between management and the
workers. As Taylor put it:
The majority of men believed that the fundamental interest of employees and employers
are necessarily antagonistic. Scientific management, on the contrary, has for its very
foundation the firm convention that the interests of the two are one and the same: the
prosperity for the employer can not exist through a long period of years unless it is
accompanied by prosperity for the employee and vice versa.
Although Taylor stresses cooperation in the workplace, authority is not to be shared

equally by management and the workers.
For Taylor, management is a senior partner in a scientific enterprise in which knowledge

is to be enshrined as the ultimate master with management deriving it’s authority from
superior competence. Taylor simply believes the worker to be less competent.
Taylor sees the organization under scientific management as constituting a mutually

beneficial exchange with significant rewards accruing to both management and the
workers. The benefits to management are an increase in output with lower labor costs.
Similarly, the worker would receive higher compensation under scientific management.
Taylor contends that under scientific management workers would be given more
interesting work that would more fully develop their talents. Moreover, it would produce
not only a better worker but also a person who would be able to live better, save money,
and become more sober.
Rose argues that the concept of a fair day’s pay for a fair day’s work is not purely
technical matter. It is also a notion of social equity. Taylor was disdainful of the union
movement. Though he believes that unions play a useful role in relieving the worker of
the worst excesses of managerial practices, he argues that they foster the restriction of
output by making the work of the least efficient the standard of performance. In addition,
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Taylor accuses unions of employing abhorrent tactics. In his own words, “ the boycott,
the use of force or intimidation, and oppression of nonunion workmen by labor unions
are deniable, these acts of tyranny are thoroughly un-American and will not be tolerated
by the American people”. Taylor was in favor of establishment of a joint commission of
employers and workers to achieve productivity solve problems and redress grievances.
Relevance of Scientific Management
With Taylor’s work is subjected to a lot of criticism, it should be recognized that he was
writing at their time of industrial growth and emergence of complex organizations with
new forms of technology. His main concern was with the efficiency of both workers and
management. Taylor believed his scientific management techniques would improve
management –worker relations, and contribute to improved industrial efficiency and
productivity.
Drucker argues that the central theme of Taylors work was not inefficiency but the need
to substitute industrial welfare by industrial harmony. Taylor sought to do this through:
higher wages from increased output; the removal of physical strain from doing work the
wrong way; development of the workers and the opportunity for them to undertake tasks
they were capable of doing: and elimination of the boss by the duty of management to
help the worker.
Taylor, in developing scientific management, made enormous contributions to the

understanding of and prescription for, the management of organizations. Yet he is
probably better characterized as a synthesizer than an innovator. In dealing with
industrial unrest, scientific management promoted and called for a new look of
harmonious and whole-hearted cooperation in place of the old tendency toward rugged
individualism.
Further, scientific management, with its emphasis on research, planning , use of

standards, and cooperation, encouraged management to take decisions on the basis of the
laws of the situation instead of individual guess and intuition.
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The scientific management movement spread far beyond the boarders of the United
States, and gained wide recognition in Germany , England, France , Sweden and other
European countries. In Russia, immediately after the revolution of 1917. Lenin referred
to the Taylor system as “a combination of subtle brutality of bourgeois exploitation and a
number of its greatest scientific achievements”. He and Trotsky sponsored a state-lead
scientific management movement aimed at promoting labor discipline and higher
productivity.
In conclusion, the views and concepts generated by scientific management, though new
and radical at that time, are commonplace today and are accepted as standards for
managerial practices. And this acceptance in itself is indicative of total effect of scientific
management.
The principles of Taylor’s scientific approach to management appear to be vary relevant

today. Many of Taylor’s idea are accepted by present –day managers. We can still see
examples of Taylorism alive and well, and management practices based on the
philosophy of his ideas. Taylor gave a major impetus to the development of modern
management thinking.
A Critical Evaluation
Taylor is regarded as the founder of modern management thought. The ramification of his
ideas and their impact on the society are true of staggering dimensions. The principles of
scientific management and innovation he propounded in the last quarter of the 19th
century from the base of present management practices. Some regard him as the father of
all present-day management.
For labor, the Scientific Management resulted in better placement, more opportunities for
development, higher wages, better working conditions, etc. For management, it has
pointed the way to a more effective organization, an improved product, a better
workforce, a better profit position, and an improved image. Taylor’s five concepts-
research, standards, planning, control and cooperation- form the solid basis of every
successful organization.
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Criticism
Despite all this, Taylor’s ideas have been subjected to sever criticism.
Resistance from the trade unions. Taylor’s approach to management was resented by
the US trade unions who regarded it as a new means of intensifying the exploitation of
the working class and even, as one of the resolutions of the American Federation of
Labor called it, “a diabolical scheme for the reduction of the human being to the
condition of a mere machine”. The workers were being asked to behave like machines
and more mechanically in accordance with pre-ordained patterns.
Resentment from the managers. Taylor’s methods where not only resented by gang
bosses but also by higher ranks of the management. They heaped scorn on the rule-of-
thumb method. Those who scaled to high managerial positions, without the benefit of
higher education and training, become sensitive to Taylor’s charge that they were
unqualified to manage. It is interesting to note that Taylor was compelled to leave his first
position at the Midvale Steel Works because of friction with the company managers ,
and latter the anti-Taylor sentiment among operating chiefs did not favor him to keep his
job at Bethlehem Steel Works (the company terminated his services from 1 may 1901).
Problem of coordination .Taylor’s idea of functional foremanship represented a

practical application of the idea of specialization and the belief that each person’s work
should , as far as possible , be confined to a single coordination, role conflict , and unity
of command. The idea of functional foremanship appears not to have become very
popular and to have little application in practice.
Taylorism as management control. According to Braveman, Scientific Management

starts from the capitalist point of view and the adaptation of labor to the needs of capital.
He felt that Taylor’s conclusion was that workers should be controlled not only by the
giving of orders and maintenance of discipline, but also by removing from them any
decisions about the manner in which their work was to be carried out. By division of
labor , and by dictating precise stages and methods for every aspect of work performance
, management could gain control of the actual process of work.
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Congress committee’s investigation into Taylor’s methods. The ideas of scientific
management were also applied in the American Watertown Arsenal despite the lingering
doubts of the benefits of paying bonuses based on methods which reduces time taken to
finish a job. Also, the moulding workers reacted unfavorably to time-and-motion studies
and almost resorted to a strike. The strike at Watertown Arsenal lead to an investigation
of Taylor’s methods by a special Committee of the US House of Representatives in 1912
on the intervention of labor unions. The conclusion of the Committee was that scientific
management did provide some useful techniques and offered valuable organizational
suggestions but, gave production managers a dangerously high level of uncontrolled
power. Consequently, Taylor’s methods of time study were banned in defence
establishments by the Senate.
The Hoxie report. Taylorism also become the subject of special investigation by Prof.
Robert Hoxie for the US Commission on Industrial Relations. The Hoxie report arrived at
the conclusion that the approach of Taylor and his associates concentrated on the
mechanical and not on the human aspects of production. It also charged that the time
study and task-setting were “special sport of individual judgment and opinion, subject to
all the possibilities of diversity, inaccuracy and justice that arise from human prejudice.
Further, Taylor’s approach to selection of workers, determination of normal times, and
the fixing of allowances to be added for delays was regarded as largely arbitrary rather
than based on scientific decisions.
Other Criticisms. The classic Hawthorne investigations by Elton Mayo and other
research studies on human relations also reject the Taylor system. According to Mayo,
logical factors are far less important than emotional factors in determining productive
efficiency. Peter Drucker holds that the organization as conceived by Taylor becomes a
piece of poor engineering judged by the standards of human relations, as well as by those
of productive efficiency and output.
Behaviouralists such as Mayo, Follett, Sheldon, Barnard also rejects Taylor’s method o
Scientific Management as these are opposed to initiative and individual freedom of the
worker.
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Taylor is described as ‘catalytic’ in the development of the traditional management
school. Many of the practices and principles, of course had been suggested previously.
But Taylor’s genius lay in his “assimilation, conceptualization and application of these
ideas as a unified approach to effective management” in fairness of Taylor, it must be
said that his principles were often inadequately understood.
Socialists, following Lenin’s line, denounced Scientific Management as a form of

capitalist exploitation.
3.2 Henri Fayol: Principles of Administration
Eventful years
Henri Fayol (1841-1925) was born of a French bourgeois family in 1841. Beginning his
career in 1860 as a mining engineer in the Commentary mine pits of the SA
Commrnysty-Fourchambault, he had risen to the position of Managing Director in 1888,
which post he held until his retirement in 1918. His managerial talents pushed his
organization from the verge of bankruptcy to the pinnacle of glory as successful and
profitable organization.
With the translation of his classic Administration Industrielle et Genrale (1916) in

English in 1949, Henri Fayol rose into prominence in the field of management. It is a pity
that the original ‘administration’ was translated into English as ‘management’ and not
‘administration’. In 1921, Fayol was awarded a Noble prize for his research in
metallurgy. He died in 1925.
Fayol’s Major Works
Fayol published a dozen papers in mining engineering and geology areas. His important
works on administration includes:
1. General and Industrial management (1916): This work first appeared as

Adminstration Industrielle et Generale in the Bulletin of the Societe de l’ Industrie
Minerale in 1916. It was subsequently republished in France in 1925 and
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translated in to English first in 1922, and later in 1949 by constance Storrs, with
an introduction by L.Urwick.
2. The Administrative Theory of the state (1923): This publication is an address

presented to the international conference of Adminstrative Scienec at Brussels in
1923. It was translated by Sarah Greer and appeared in the collection, papers on
the Science of Adminstration, edited by L.Gulick and L. Urwick.
3. General Principle of Administration(1908): This paper appeared in Jubilee

Congress of the Societe de L’ Industrie Minerale.
It may be mentioned here that Fayol used the French word ‘administration’ which has
some how been translated as ‘ management’.
The first book, General and Industrial Management is organized in to four parts:
Part I : Necessity and Possibility of Teaching Management
Part II: Principles and Elements of Management
Part III: Personal Observations and Experience and
Part IV: lessons of the war
Approach to Administration
Activity 3.5 dear students: What is the difference between Management and
Administration?
No Distinction between Management and Public Administration
Although Fayol draws a distinction between government and administration, restricting

the concept ‘administration’ to a narrow sense, he uses it much more broadly and
identifies it with ‘management’. He asserts; “management plays a very important part in
the government of undertakings: of all undertakings, large or small, industrial,
commercial, political, religious and others”. Fayol observes that administration is an
44
activity common to all human undertakings, whether in the home, business, or
government. He notes further that all these undertakings require planning, organizing,
commanding, coordinating and controlling, and in order that these function properly, “all
must observe the same general principles”. General principles can be applied equally well
to public and private affairs. Fayol maintains that “there is no one doctrine of
administration for business and other for affairs of state; administrative doctrine is
essential”
The major task of organization, according to Fayol , is to develop the personnel so that
they are able to carry out the essential functions of an enterprise. He prefers to regard the
administrative structure as a ‘ body corporate’ and compares the administrative function
with the nervous system of an animal.
Essential Activities of an Industrial Undertaking
Fayol divide the total industrial undertaking into six separate activities, of which
administration is only one:
1. Technical( production, manufacture)
2. Commerce ( buying , selling , exchange)
3. Finance ( search for and optimum use of capital )
4. Security ( protection of property and person)
5. Accounting ( stocktaking , balance sheet, costs, statistics)
6. Administrative ( which operates only on personnel)
Elements of Administration
Fayol indicates that the last of these- the administrative activity is by far the most
important and deserves most attention. He develops this aspect further and indicates that
administration (administrative activity) is made up of five elements: planning, organizing,
commanding, coordinating, and controlling, and elaborates on each as follows:
45
I) Planning. It is an exercise of “examining the future and drawing up a plan of action”.
Fayol also states that unity, continuity, flexibility and precision are the broad features of a
good plan of action.
ii) Organizing. it means “building up a dual structure ( human and material) to achieve
the undertaking”. Further, Fayol indicates that the organizer or manager has 16
managerial or administrative duties to perform:
1. Ensure that the plan is judiciously prepared and strictly carried out.
2. See that the human and material organization is consistent with the objectives,
resources, and requirements of the concern.
3. Set up a single, competent, energetic building authority.
4. Harmonize activities and coordinate efforts
5. Formulate clear, distinct, precise decisions
6. Arrange for efficient selection of personnel-each department must be headed by a

competent, energetic man; each employee must be in that place where he can
render greatest service
7. Define duties clearly.
8. Encourage a linking for initiative and responsibility.
9. Have fair and suitable recompense for service rendered
10. Make use of sanctions against faults and errors.
11. See to the maintenance of discipline.
12. Ensure that individual interest are subordinated to the general interest
13. pay special attention to the unity of command
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14. Supervise both material and human order.
15. Have every thing under control
16. Fight against excess of regulations, red tape and paper control.
iii) Commanding. it implies maintaining activity among the personnel of the

organization. Fayol claims that the manager who has to command should:
1. have a thorough knowledge of his personnel
2. eliminate the incompetent
3. set a good example
4. be well versed in the agreements binding the business and its employees;
5. conduct periodic audits of the organization and use summarized charts to further
this; Fayol heavily emphasized organizational charts; and
6. Bring together his chief assistants by means of conferences, at which units of

direction and focusing of effort are provided for.
Human elements are of critical importance to adiminstration. Fayol suggests six types of
abilities which an administrator or a manager must possess. These are:
1. Physical qualities: health , vigour and appearance
2. Mental qualities: ability to learn and understand judgment, mental vigour and
adaptability.
3. Moral qualities: energy, initiative, willingness to accept responsibility, tact.
4. General education: general acquaintance with matters not belonging exclusively

to the function performed.
5. Special Knowledge: technical, commercial, managerial, etc.
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6. Experience: knowledge arising from the work involved.
iv) Coordinating. It consists of working together, and harmonizing all activities and
effort, Fayol recommends weekly meetings of department heads and liaison officers to
improve coordination.
v) Controlling. It consists of verifying whether everything occurs in conformity with the

plan adopted, the instructions issued and the principles established. The managerial
activities, as spelt out by Fayol are depicted in fig below
Need for Administrative Training
Fayol seems to be the first writer in pleading for administrative training of all employees
at all levels. Administrative ability cannot be developed through technical knowledge
alone. He writes: “everyone needs some concepts of administration; in the home, in
affairs of state, the need for administrative ability is in proportion to the importance of the
undertaking, and for individual people the need is everywhere greater in accordance with
the position occupied”.
Fayol becomes critical of civil engineering colleges in France for not including
administration in their syllabi. He suggests the teaching of administration even in primary
schools.
Flexible Principles of Administration
Fayol was determined to develop an administrative theory. With this view he propounded
14 principles of administration. He says that these principles are flexible and capable of
adaptation to every need. These are now described.
Division of Work: According to Fayol, specialization belongs to the natural order. The
division of work between the worker and the manager increases their output. The worker
always works on the same part, the manager always deals with the same matters. Thus
both of them acquire ability, sureness, and accuracy which increases their out put. Each
change of work brings in its train and adaptation, which reduces output ….yet division of
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work has its limits, which experience and a sense of proportion teach us may not be
exceeded.
Authority and responsibility. Fayol defines authority “as the right to give orders and
power to exact obedience”. While distinguishing ‘official’ authority (derives from the
office a person holds) from the ‘personal’ authority (based on his intelligence, experience
and personal abilities), Fayol is of the view that people in an organization seek more
authority and fear responsibility. This fear of responsibility paralyzes initiative. Hence, he
suggests that special steps must be taken to induce people to accept responsibility while
wielding authority. Responsibility is a corollary of authority.
Discipline. Discipline is essential for the smooth running of administration. To Fayol,

discipline is what leaders make it. He sees discipline in terms of ‘obedience’. Good
discipline is the result of (a) effective leadership, (b) a clear understanding between
management and workers regarding the organization’s rules, and (c) the judicious use of
penalties for infractions of the rules.
Unity of command. In contrast to Taylor’s functional authority, Fayol maintains that “an
employee should receive orders from one superior only”. According to him: “A body
with two heads in the social as in the animal sphere a monster and has difficulty in
surviving”. Emphasizing on the importance of unity of command, Fayol writes, “should
it (unity of command) be violated, authority is undermined, discipline is in jeopardy,
order disturbed and stability threatened”
Unity of direction. Fayol insists that there should be “one head and one plan for a group
of activities having the same objective.” For him, “unity of command cannot exist
without unity of direction, but does not flow from it.”
Subordination of individual interest to general interest. According to Fayol, “the interest

of one employee or group of employees should not prevail over that of the concern
(organization)”.
49
Remuneration. The remuneration for the services should be fair and reasonable. It must
be fair and satisfy the employer as a reasonable cost for services rendered and also the
employee as a means of livelihood and return for effort.
Centralization. According to Fayol , centralization belongs to the natural order. In large

organization, a serious of intermediaries was necessary. The share of initiative left to
intermediaries depends on the character of the manager on the reliability of his
subordinates and on the conditions of business. Whether decision-making is centralized
(to management) or decentralized (to subordinates) is a question of proper proportion.
The problem is to find the optimum degree centralization for each situation.
Scalar chain. Fayol points out the dangers of excessive formalism. He says: “it is an
error to depart needlessly from the line of authority, but it is an even greater one to keep
it when detriment to the business ensues”. Thus , if the rules of formal organization are
observed, communication between two subordinates in different departments may be
lengthy and complex. One can contact the other only by sending a message up a long
ladder of command and wait until it descends to its destination.
Order. Fayol says that the right man should be at the right place. He holds that
organizational orders demands “ precise knowledge of the human requirements and
resources of the concern and constant balance between these requirements and resources”
Equity. In discussing the principle of ‘equity’ , Fayol notes that workers aspire to “equity
and equality of treatment”. Further , he holds that the equity is the result of “the
combination of kindliness and justice”
Stability of tenure. Fayol favors stability of tenure of personnel to ensure smooth

running of an undertaking. He holds that “instability of tenure is at one and the same time
causes and effect of bad running”. In discussing this principle, Fayol deals more with
tenure as a technical prerequisite for learning a job than as an answer to inner emotional
needs.
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Initiative. Initiative consists of “thinking out a plan and ensuring its success”. Fayol
identifies initiative as great source of strength for business. To encourage initiatives,
superior officers must show much tact , and the readiness to sacrifice personal vanity.
Esprit de corps. Fayol also places emphasis on harmony among the personnel of the
concern. With a view of building a sense of harmony among the employees the manager
must himself show high personal integrity apart from setting a good example of moral
character. A manager should not follow the motto of ‘dived and rule’ . he maintains:
“Dividing enemy forces to weaken them is clever, but dividing one’s own team is a grave
sin against the business”. Fayol welcomes the trend for collective associations and for
competing firms to develop friendly relations and settle common interests by joint
agreement. Management must foster the morale of its employees.
Fayol concluded his entire discussion on administrative principles by observing: “ two

me it seems at the moment especially useful to endow management theory with a dozen
or so well established general principles. The foregoing principles are those to which I
have most often resorted”
Fayol and Taylor: A Comparison
Like Frederick Taylor, Henri Fayol was an engineer who passed his conclusions not on
scientific observations but on personal experience. Though they differed completely in
their approaches, the works of Taylor and Fayol were complementary. Fayol looked at
the administrative from top down, emphasizing managerial ability, and Taylor from the
bottom up, emphasizing the technical aspects of production. Taylor’s approach to
management dealt with specifics of job analysis, employees’ motions, and time standards
while Fayol viewed management as a teachable theory dealing with planning, organizing,
commanding, coordinating and controlling.
In recognizing the contributions of Taylor and Fayol , Gross comments that both might
be called the founders of modern administrative thought. George complements this view:
“Both were pioneers. Modern management thought owes a tremendous debt to each”.
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Criticism
Fayol’s ideas were subjected to severe criticism. Peter Drucker, a critics of Fayol’s
theory of functionalism, holds that some of the worst mistakes of organizational –
building have been committed by imposing a mechanistic model of an ‘ideal’ or
‘universal’ organization on a living business. The model is found to be deficient in
designing and logic as it presents a single dimension of management determining all
facets of organization around it.
Fayol’s base for building an administrative theory, not on scientific observations but on
personal experience in the mining firm, is too narrow. His effort of theory formulation on
the basis of his vast experience in a small organization is isolation of other complex and
public organizations may not generate a complete and comphrensive theory on
administration which would be equally applicable to contemporary organizations. It
prompts Peter Drucker to argue that anything more complex , more dynamic, or more
entrepreneurial than a typical mining firm of Fayol’s time demands performance
capacities, which the functional principles do not posses. In view of these limitations, it is
imperative that functionalism as principle should never be used in the design of
organizations that are complex and multidimensional in functions.
Contributions to the Human Relations School feel that Fayol has mostly ignored the
social-psychological or emotional needs of the employees. Some of Fayol’s principles of
management have been also criticized on the grounds of vagueness and contradiction. For
example, critics of the principle of unity of command deplor that it would be
dysfunctional to the organization to strengthen the hierarchy, based on this principle,
where the sense of unity is less, personal contact is limited and real difference of outlook
are desirable. Further, there is no consistency between the unity of command and unity of
direction principle. Fayol favors the need for more specialists in the planning and
direction of work but insists that their use be reconciled with the unity of command.
Urwick says on the subject: “when the principle is applied at higher levels where the
sense of unity is less, where personal contact is not so close and real difference of outlook
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and emphasis inevitable and desirable, the chief executive is apt to be overwhelmed with
problems of coordination”
Contribution
Henri Fayol is undoubtedly one of the great contributors to the development of

administrative thought. Though his contributions are more in the nature of theoretical
constructions of the administration, they have made scientific management more
meaningful. Concepts and principles of management, which he developed, constitute
Fayol’s original and unique contribution to the continuum of administrative thought.
According to George, Fayol’s General and Industrial Management is a singular and

significant contribution to the management thought in that it presented three
revolutionary aspects.
Concept of Universality of Management: the concept that management as a separate body

of knowledge is applicable to all forms of group activity.
First comprehensive theory of management. First complete and comprehensive theory

of management which could be applied to all endeavors.
Need for teaching management. The concept of teaching and developing management
curricula in colleges and universities.
Fayol was perhaps the first writer who developed a general approach to administration.
Fayol, as a top executive, looked at administration form top down, emphasizing
managerial ability and, therefore, gained a broader perspective than Frederick Taylor who
concerned primarily with the workers and technical aspects in production.
Fayol’s enunciations of flexible principles are widely applied today in planning and
developing company organization structure. Even Peter Drucker, a critic of Fayol’s
theory of functionalism , acknowledges that the latter’s functional organization is still the
best way to structure a small business, especially a small manufacturing business.
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Fayol’s ideas on human relations speak of his concern for employee’s development.
Gross puts it that “personnel is for Fayol the essence of organization”. Similarly , his
ideas on planning are still relevant. Fayol appears to be a pioneer in presenting a broad
conception of organizational and national planning.
3.3 Max Weber: The Bureaucratic Theory
Activity 3.6 dear students: What is the meaning of bureaucracy?
Eventful Years
Early life. Max Weber was born in Erfut, Thuringia, Germany, on 21 April 1864. His
father, Max Weber, Sr., was a prosperous right-wing politician whose governmental posts
included a seat in the Reichstag (German parliament). Weber’s mother, Helene
Fallenstein Weber, was a cultured woman belonging of the protestant faith and the
daughter of a well-to-do official. During pre-university schooling which ended in the
spring of 1882, Weber was known to possess exceptional talent but was perceived to lack
routine industry and moral maturity by his teachers.
In 1882 Weber commenced the study of economics , philosophy, and law at the
university of Heidelberg. After three semesters at Heidelberg, Weber moved to
Strassburg to serve a year in the military. Here, Weber, who would later become a
recognized authority on bureaucracy, rebelled against the “incredible waste of time
required to domesticate thinking beings in to machines responding to commands with
automatic precision”
In 1886 he took his first examination in law and three years later, completed his
Ph.D.thesis on the history of trading companies during the Middle Ages (1889)
In 1890 he passed his second examination in law. He habilitated himself in Berlin for
commercial, German, and Roman law with a treatise on what Marx once called “the
secret history of the Romans”, namely, The History of Agrarian Institutions
(1891).Weber was appointed as an instructor in law at university of Berlin.
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In the fall of 1894, Weber accepted a full professorship in Economics at Freiburg, and in
1896 he accepted a chair at the University of Heidelberg. Weber did not consider himself
to be a scholar, and although he chose an academic career, he held a regular academic
position for only five years.
Although he suffered repeated seatbacks, Weber published a book review in 1903, and by
1904 his writing productivity was returning to its pervious level. In the same year Weber
visited the United States where he delivered a paper and toured the country.
When the First World War began, Weber wanted to march along with army, but his
medical condition made this impossible, which was extremely painful to him. He was,
however, commissioned as a captain, in charge of establishing and running nine hospitals
in the Heidelberg area. In this position he experienced from the inside what had become a
central concept in his sociology: bureaucracy.
The Process of Rationalization
Max Weber was neither read nor well known in the United States and many Asian and
European countries until after the beginnings of the field of public administration.
Moreover, public administration was not his main focus of analysis. Weber focuses on
the concept of rationalization which he considers to be the constitutive element of
modern Western society. He places public administration in a broad social and historical
context and sees the processes of public administration as part of the more general
process of rationalization in modern Western societies. And second, Weber’s ideas
concern with patterns of domination.
Weber measures the degree of rationalization in society in two ways:
1. Positively, rationalization is measured by the extent to which ideas gain in

systematic coherence and consistency. Negatively, it is measured by the
displacement of magical element of thought.
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2. A related emphasis in Weber’s analysis is the concept of domination. To Weber,
emergence of rational societies depends on the way in which domination has been
exerted.
Further, Weber maintains that domination is a subset of the phenomenon of ‘power’. For
domination, it is believed that the ruler has the right to exercise power and the ruled have
a duty to obey. For Weber, there are two basic types of dominations: domination based
on constellations of interests manifested in religious and economic associations and
domination based on authority, manifested in the operations of the state and bureaucratic
organizations.
The legitimacy of domination based on authority is derived form three sources: charisma,
tradition, and legality/rationality.
Domination Based on Constellations of Interests.
Weber identifies domination within each religion with a particular status group of
religious leaders. For Hinduism, the status group is the hereditary case of Brahmis; for
Christianity, it is the urban bourgeoisie; and for Confucianism, it is government officials
with a literary education. Moreover, as is the case with all bureaucracies, there is a
democratic tendency in religions as they become bureaucratized, which fights against
status privileges. Weber’s examination of christianity focuses primarily on the protestant
sects and their relationship of capitalism. He emphasized that capitalism should be seen
as the result of a specific combination of political, economic and religious factors, and
not just the religious factor.
In discussing the relationship between Protestantism and capitalism, Weber argues that
modern capitalism presupposes the existence of a number of conditions: that there is
private ownership of the means of production; that formally free labor exists; that a
limited government allows the market to operate relatively freely; and that a system of
finances exists, particularly a money economy. Modern capitalism is seen in terms of
money calculation. Weber believes that capitalism represents the highest stage of
rationality in economic behavior. By ‘rational’, Weber means an economic system based,
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not on custom or tradition, but on systematic and deliberate adjustment of economic
means to attain pecuniary profit. He argues that the source of modern capitalism is
Protestantism. Protestantism gave positive spiritual and moral meaning to worldly
activities. The protestant sects joined the idea that the God blesses with riches those who
please him with a kind of religious conduct embodying the notion that honesty is the best
policy, or when you listen to God, He gives prosperity.
In his illustration of the doctrines of Calvinism (an offshoot of Lutheranism-one of the

protestant sects), Weber contended that the Calvinists believed that salvation is attained
by the performance of good deeds. Calvinists demanded a life of good works with no
place for the cycle of sin, repentance, and atonement. Calvinism sought to subject man to
the dictates of a supreme will and to bring man’s actions under constant self-control,
guided by ethical standards. The protestant asceticism holds that the individual needs
hard, continuous bodily or mental labor.
Weber holds that the religious roots of modern capitalism, led to the tenets of worldly
utilitarianism .from this he concludes that whereas the puritan wanted to work because it
was his ‘calling’, modern man is forced to work in the ‘iron cage’ of the new economic
order, and the pursuit of material goods control his life.
Domination Based on Authority
Domination based on authority is found in legal and bureaucratic relationships.

Obedience in systems of domination based on authority depends on the perception of
legitimacy.
Typology of Authority
(i) Legitimacy. Weber’s most widely acknowledged contribution to the study of

organization has been his theory of authority. He was concerned with the distribution of
power among the organizational positions in the bureaucratic structure. His concern was
as to why individual obey commands. To deal with this problem, Weber made a
distinction between power and authority.
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An organization, according to Weber, is a bureaucracy that sets norms and orders which
must be obeyed if the organization is to function effectively. To that extent, an
organization can rely on its power to make the individual obey. The exercise of power
has a major limitation. It keeps the subject, as he conforms, alienated. On the other hand,
when the exercise of power gets legitimation- that is, when the orders issued or rules set
conform to the values to which the subjects are committed- compliance will be more
effective. The subject will internalize the orders and rules.
Weber uses (i) the term ‘power’ to refer to the ability to force people to obey orders; (ii)
the term ‘legitimation’ to refer to acceptance of the exercise of power because it
conforms to the values held by the subjects; and (iii) the term ‘ authority’ to refer to the
combination of the two- that is , to power which is viewed as legitimation.
(ii) Authority. Under an authority system, orders are voluntarily obeyed by subordinates.
They see the issuing of orders by those in the superordinate role as ‘legitimat’. Weber’s
concept of authority is based on the legitimation and not on power. He asserts the there
are three sources of legitimacy for domination based on authority: charisma, tradition,
and legality/rationality. These are pure, or ‘ideal’ types and the bases of legitimacy
usually occur in mixtures in their historical manifestations.
Charismatic Authority
Charismatic authority rests on “devotion of the specific and exceptional sanctity, heroism
and exemplary character of an individual person….” In other words, the mode of
exercising authority is based on the personal qualities of the leader. Weber used the
Greek word ‘ charisma’ and defines it as the “qualities of an individual personality by
virtue of which he is set apart from ordinary men and treated as endowed with
supernatural, superhuman , or at least specifically exceptional power or qualities”.
Accordingly, charismatic authority is a form of rule over people to which they submit
because of their belief in the magical powers, revelations, or heroism of the leader.
Weber states that the pure type of charismatic authority appears only briefly in
comparison to a more enduring structures of traditional and legal-rational authority. This
is the position of the prophet, the warror chieftain, or political leader. In this type of
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authority, the question of succession arises on the death of the leader. Even if the leader
himself nominates his successor, he may not be accepted. The only basis of legitimacy is
personal charisma, so long as it receives recognition. Mahatma Gandhi, Jawaharla Nehur,
Gautam Buddha, Nelson Mandela, Abraham , Lincoln Lenin, Pope John Paul II, are some
examples of charismatic leaders.
The leader in charismatic authority is constrained only by his personal judgment, and he
is not governed by any formal method of adjudication. What ever organization exists is
composed of an aristocracy chosen on the basis of charismatic qualities. There is no
procedure for appointment, promotion, or dismissal, and there is no continuing
hierarchical assignment of tasks. Administration under charismatic authority, according
to Weber, is loose and unstable.
Traditional authority
Traditional authority is based on respect for the eternal past, in the rightness and
appropriateness of the traditional or customary way of doing things. It rests on “an
established belief in the sanctity of immemorial traditions and the legitimacy of the status
of those exercising authority under them”. The mode of exercising authority is based on
precedent and usage. New rules are not enacted, they are found. The ruler or a leader in
such a system has authority by virtue of the status that he has inherited, and the extent of
his authority is fixed by custom or usage.
Administration under traditional authority, according to Weber, tends to be irrational

because the development of rational regulations is impeded; there is likely to be no staff
with formal , technical training, and there is wide scope for the indulgence of personal
whims. Traditional authority is a regime of favourities with a shifting serious of tasks
and powers commissioned and granted by a leader through arbitrary decisions. Justice
under traditional authority is a mixture of constraints and personal discretion.
The organizational form under a traditional authority system can be either (i) patrimonial
or (ii) feudal. Under the patrimonial form, the officials are personal servants who depends
on their ruler for remuneration. But under the feudal form, the officials have much more
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authority with their own sources of income. Although Weber gives examples from the
historical past, his insight is equally applicable to modern organizations. Managerial
positions and appointments in private firms are still justified in terms of hereditary
transmission (from father to son) rather than on the basis of a rational ground.
Legal- Rational Authority
The legitimacy of legal- rational authority rests on “a belief in the legality of patterns of
normative rules and the right of those elevated to authority under such rules to issue
commands…..” under this system , obedience is to the rules. It is legal because authority
is exercised by means of a system of rules, norms and procedures, through the office
which an individual holds at a particular time. In administration, the legitimacy of legal-
rational authority rests on rules that are rationally established. Submission to authority is
based on an impersonal bond to a generally defined ‘duty of office’ and official duty is
fixed by rationally established norms. Thus the official does not exercise power in his
own rights; he is only a ‘trustee’ of an impersonal, compulsory institution. For such an
organization, Weber uses the term ‘bureaucracy’
As compared to legal authority, the other two types of authority place major obstacles in
a way of rational action. Thus, Weber refers to legal authority as legal-rational authority.
The main problem of charismatic leadership is one of succession. Weber maintains that,
when the personal authority of the charismatic leader is displaced by mechanisms or rules
of ascertaining the divine will, a routinization of charisma has taken place.
Regarding succession a successor is selected through established procedures, where the

forces of tradition and rationalization begin to take effect, and charisma is dissociated
from a person and embedded in an objective institutional structure. In the process, an
unstable structure of authority gives way to a more permanent traditional or legal-rational
structure of authority. With routinization, execution of received orders replaces personal
action. With the development of legal-rational authority , either through the
routionization of charisma or the breakdown of the privileges of traditional authority,
there is a certain ‘leveling’ influence with the recognition of authority treated as a source
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of legitimacy rather than as a consequence of authority. Thus , legitimacy in legal-
rational authority takes on some democratic overtones.
According to Weber, there are two major forms of domination based on authority; legal
structure and bureaucratic administration. Weber holds that law grows out of the usages
and conventions found in all societies. Law is differentiated from mere usage and
convention. However , it is distinguished by the presence of a staff, which may use
coercive power for its enforcement. Weber notes that not all legal orders are regarded as
authoritative. Legal authority exists only when the legal order is implemented and obeyed
in the belief that it is legitimate.
Weber suggests that to be effective as an organization, a modern organization structure

needs bureaucratic authority. Charismatic authority relations lack specialization or
stability. On the other hand, traditional authority relations are typically found in a diffuse
status structure, as for example, in an aristocracy. Thus, according to Weber,
bureaucracies are the social units most suited for modern organizations.
Kinds of rationality. Weber maintains that there are two kinds of rationality associated
with the creation of legal norms; substantive and formal. An act is substantively rational
if it is guided by principles such as those embodied in religious or ethical thought. An act
is formally rational when it is based on general rules. Conversely, an act is formally
irrational if guided by means beyond the control of reason (e.g., prophetic revelation or
order) and substantively irrational if based on emotional evaluations of single cases.
The Bureaucratic Structures: Characteristics
Activity 3.7 dear students: What do you think are the characteristics of bureaucratic
structure?
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Characteristics of the Ideal Type Bureaucracy
Weber identifies bureaucracy as the most rational and efficient form of the organization
devised by man. Bureaucracy is rational in what involves control based on knowledge; it
has clearly defined spheres of competence; it operates according to analyzable rules, and
has calculability in its operations. Bureaucracy is efficient because of its precisions,
speed, consistency, availability of records, continuity, and possibility of secrecy, unity,
rigorous coordination, and minimization of interpersonal friction, personnel costs, and
material costs. In Weber’s words, bureaucracy is “an administrative body of appointed
officials”, and “is, from a purely technical point of view, capable of attaining the highest
degree of efficiency and is , in this sense, formally the most rational known means of
carrying out imperative control over human beings. It is superior to any other from in
precision, in stability, in the stringency of its discipline, and in its reliability… It is
finally, superior both in intensive efficiency and in the scope of its operations, and is
formally capable of application to all kinds of administrative task”.
Weber analyzed bureaucracies not empirically but as ‘ideal type’ derived from the most
characteristic bureaucratic features of all known organizations. He identifies the main
characteristics of this type of organization as follows:
1. Bound by rules. A pure bureaucracy functions in accordance with abstract rules.

Although the bureaucrats may be immune form such rules in their personal affairs, there
is systematic control over their official actions. A system of rules facilitates
standardization and equality in the treatment of many cases. It also excludes the
intervention of personal discretion and emotions.
2. A sphere of competence. According to Weber, a specific sphere of competence

involves “ (a) a sphere of obligations to perform functions which have been marked off
as part of a systematic division of labor; (b) the provision of the incumbent with the
necessary authority to carry out these functions; (c) that the necessary means of
compulsion are clearly defined and their use is subject to definite conditions”.
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Thus, a systematic division of labor, power and responsibility defined byadministrative
regulations, are essential for the functioning of a rational organization. Not only must
each officeholder know his job and have the necessary authority to carry it out, but he
must also known the limits of his job, obligations and power so as not to undermine the
organizational structure.
3. Principle of hierarchy. Weber observes: “The organization of office follows

the principle of hierarchy; that is, each lower office is under the control and
supervision of a higher one”. This means that every subordinate in the
administrative hierarchy is accountable to his superior for his actions.
4. Need for specialized training. “The rules which regulate the conduct of an office
may be technical rules or norms. In both cases, if their application is to be fully rational,
specialized training is necessary. According to Weber, the root of the authority of the
bureaucrat is his knowledge and skill.
5. Impersonal detachment. “it is a matter of principle that the members of the

administrative staff should be completely separated form ownership of the means of
production or administration. There exists, further more, in principle, complete separation
of the property belonging to the organization, which is controlled within the spheres of
the office , and the personal property of the official”.
Further, there has to be a complete absence of appropriation of official position by the

office holder. Such a separation of office and officeholder would enhance organizational
efficiency, and prevent the office holder form misusing his positions. The ideal
administrator performs his function in a sprit of formalistic impersonality, that is, without
his personal interests and likes and dislikes coming into the picture.
6. Keeping records. Another principle of bureaucracy is that the “administrative

acts, decisions, and rules are formulated and recorded in writing”. Weber stresses the
need for maintaining a systematic interpretation of norms and enforcement of rules which
cannot be maintained through oral communication.
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7. Career service. Weber’s bureaucratic structure provides for (a) payment of
salaries in accordance with responsibility as well as social status; (b) promotions and
career advancement on the basis of both seniority and achievement; and (c) appeal and
grievance machinery. Service in a bureaucratic organization constitutes a career.
Consequently, the employees identify themselves with the organization, and this prompts
them to work for the organization’s productivity.
According to Weber, the bureaucratic form is “capable of attaining the highest degree of
efficiency”. Further, he says that the structure inherent in an organization makes the
bureaucratic form of administration a system far superior to any other as regards its
accuracy, stability, strict discipline, and reliability. Thus, Weber’s bureaucratic from of
organization creates conditions that make every official act only in accordance with the
“rational aims of the organization as a whole.”
8. The non-bureaucratic head. Organizations which Weber refers to as

bureaucracies have non-bureaucratic heads. The non-bureaucratic heads sets the
rules to be followed, and decisions which goals are to be served by the
administrative staff. Although the bureaucrats are recruited and appointed, the
non-bureaucratic or political head (president, prime Minister, the Chancellor) is
often elected or inherits his position. These political or non-bureaucratic heads
perform an important activity in helping to maintain the emotional commitment to
the rules of the organization.
Elements in Bureaucracy
In brief, the concept of bureaucracy contains several elements, including the following
(the officials):
a. are personally free and are subject to authority only with respect to their
impersonal official obligations:
b. are recognized in a clearly defined hierarchy of officers;
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c. each of them has a clearly defined sphere of competence…;
d. work entirely separated from ownership of the means of administration…:
e. are subject to strict and systematic discipline and control in the conduct of
the office”
In recent years Weber’s bureaucratic form of organization has become the subject of
some serious criticism. These include the following:
1. Blau says that Weber’s model explains that the social structure only through the
functions of its elements. It does not investigate into disturbances or ‘dysfunctions’ that
various elements produce in the structure of an organization. Blau points out that Weber
could not recognize that “…. The same factor that enhances efficiency in one respect
often threatens it in another: it may have both functional and dysfunctional
consequences”. He feels that a fresh look has to be taken at the concept of rational
administration. In a fast changing environment, “the attainment of organizational
objectives depends on perpetual change in the bureaucratic structure”. According to Blau,
efficiency in administration can be secured only when an individual is allowed to identify
with the purposes of the organization and to adapt his behavior to his perception of
changing circumstances.
Argyris also claims the bureaucracies restrict the psychological growth of the individual
and causes feelings of failure, frustration and conflict. He suggests that the organizational
environment should provide a significant degree of individual responsibility, self-control
, and an opportunity for individuals to apply their full abilities.
2. A close examination of Weber’s model shows that it contains some

contradictions.
(a) The two principles ‘Impersonal detachment and esprit de corps, which , according
to Weber, achieve administrative efficiency, are incompatible, since if the relations
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between the administrative staff are dictated by impersonal detachment , it becomes
difficult to see how an esprit de corps can emerge.
(b) Likewise, rigid adherence to the principle of hierarchical relations between the
superiors and subordinates gives rise to mutual suspicion as the latter tends to conceal
defects in their work and interfere with the upward flow of information.
(c) Similarly, there is a contradiction between the systems of promotion according to

seniority and according to merit, which again can not fail to reflect on the hierarchically
built relations.
(d) Philip Selznick, pointing to the division of functions, shows how sub units set out
goals of their own, which may contradict with the purposes of the organization as a
whole. Critics, like Gouldner feel that the Weberian model does not include the
orientation of members in relation to the rules in the organization. This model ignores the
human touch.
3. Weber’s bureaucratic form of organization based strictly on formalist structure is

criticized by Chester Barnard and Simon. According to Barnard, “informal organizations
are necessary to the operation of formal organizations”. Blau too maintains that “informal
relations and unofficial practices often contribute to efficient operation”
4. Selznick also draws attention to the vulnerability of bureaucracy’s goal

displacement. He criticizes the Weberian model for its neglect of the treatment of power
which a bureaucrat assumes in the organization whereby he is “increasingly preoccupied
with his own social position and in the end subverts the professed goal of the
organization by concentrating only on his own power positions”.
5. Mouzelis contends that Weber’s ideal –type bureaucracy is not necessarily

rational and efficient, and, consequently, its posited combination of bureaucratic
characteristics may not be “objectively possible”. More over, it is argued that the use of
ideal types alone does not accomplish Weber’s theory building objectives.
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6. LaPalombara belives that the Weberian Bureaucry “may be a less efficacious
instrument of economic change”. The bureaucratic model, developed by Weber,
predominates in the business practice of the capitalist world.
Unit Summary
Scientific management was introduced in an attempt to create a mental revolution in the

workplace. It can be defined as the systematic study of work methods in order to improve
efficiency. Frederick W. Taylor was its main proponent. In contrast to scientific
management, which deals largely with jobs and work at the individual level of analysis,
administrative management provides a more general theory of management. Henri Fayol
is the major contributor to this school of management thought.
Fayol was a management practitioner who brought his experience to bear on the subject
of management functions and principles. He argued that management was a universal
process consisting of functions, which he termed planning, organizing, commanding,
coordinating, and controlling. Fayol believed that all managers performed these functions
and that the functions distinguished management as a separate discipline of study apart
from accounting, finance, and production. Fayol also presented fourteen principles of
management, which included maxims related to the division of work, authority and
responsibility, unity of command and direction, centralization, subordinate initiative, and
team spirit.
Bureaucratic management focuses on the ideal form of organization. Max Weber was the
major contributor to bureaucratic management. Based on observation, Weber concluded
that many early organizations were inefficiently managed, with decisions based on
personal relationships and loyalty. He proposed that a form of organization, called a
bureaucracy, characterized by division of labor, hierarchy, formalized rules,
impersonality, and the selection and promotion of employees based on ability, would lead
to more efficient management. Weber also contended that managers' authority in an
organization should be based not on tradition or charisma but on the position held by
managers in the organizational hierarchy.
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1. Taylor’s major works include all but:
A. Shop management B. Principle of scientific management
C. New patterns of management and human organization
D. Testimony before the special house committee. E. None of the above
2. As to Taylor, methods of development of shop system includes:
A. use of scientific research methods B. Standardization of tools and materials
C. Selection and training of workers D. Payment in accordance with output

E. All
4. Time motion study of Taylor’s approach involves:
A. An allowance for rest and unavoidable delays
B. Dividing the task in to elementary units
C. Discarding useless movements
D. Providing good implements to the work E. All
5. Under Taylor’s incentive system; like other pay plans , success is rewarded by
higher wages and failure is penalized by financial loss.
A. true B. false
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6. As to Taylor concepts of functional foremanship, ____________is responsible to
ensure the job, organize the required machinery for the job, give instruction to
workers and route the worker through the shop.
A. Disciplinarian B. Gang boss C. Speed boss D. Inspection foreman E. none
7. Roadblocks to Taylor idea of scientific management emanates from:
A. Management B. Trade union C. Robert Hoxie D. Elton Mayo E. all
8. As to Taylor’s principle of administration, discipline in an organization is a

function of
A. Judicious use of penalties B. Effective leadership
C. clear understanding between management and workers regarding

organization’s rule D. All E. B and C
9. An employee should receive orders from one supervisor is related to

______principle.
A. unity of direction B. Centralization
C. Decentralization D. unity of command E. None
10. Fayol contribution to the development of management discipline includes all but:
A. universality of management
B. Coming up with comprehensive theory of management
C. pursued the need of teaching management in university curricula
D. All E. None of the above.
11. Briefly explain the aims of scientific management
69
12. Elaborate the administrative principle of stability of tenure.
13. What is Taylor’s concept of mental revolution?
14. Explain the basic features of bureaucracy?
15. What is the concept of functional foremanship of Taylor? What is the difference
between Taylor’s functional foremanship and Fayol’s unity of command?
Reference
 Meenakshi Gupta : Principle of Management, PHI learning limited, (2008)

New Delhi. ISBN:978-81-203-3527-1, pp 1-271.
 Andrew J. Dubrin : Essential of Management , (2010) Cengage learning Ltd,
ISBN:978-0-538-47823-3, pp 1-669.
 C. K. Prahalad : The Fortune AT The Bottom of the Pyramid, (2006) Pearson
Education Ltd, ISBN 0-13-187729-1.
 Jayanta K. Nanda : Management Thought, Sarup & Sons, (2006) New Delhi.
ISBN:81-7625-623-4, 1-313.
 L. M. Prasad (1995) : Principal and Practice of Management, Sultan Chand &
Son.
 “Introduction to Management” - Published by ICFAI center for Management
Research.
 http://www.businessdictionary.com
 http://www.investorwords.com
70
UNIT FOUR: ELTEN MAYO: THE HUMAN RELATIONS
APPROACH
Objective of the Unit
After a thorough study of this unit, you will be able to:
 Understand the major works of Elton Mayo
 Know the importance of Mayo’s empirical studies
 Understand the major findings of the Hawthorne Studies
 Explain the limitation of the Hawthorne studies
Unit Introduction
Dear Students: The classical writers gave importance and attention to the structure and
formal organization as they were more concerned with efficiency and productivity than
the relationship between the organization and its members. But during the 1920’s ,
greater attention began to be paid to the social factors at work and the human relations
movement came with the famous Hawthorne experiments (1924-32) at the Western
Electric Company in USA under the leadership of Elton Mayo (1880-1949). Mayo has
been called the founder of both the Human Relations Movement and of Industrial
sociology.
Eventful Years
Dear Students: George Elton Mayo was born on 26 December 1880 at Adelaide,
Australia. After early education at home, he entered Queen’s College at age twelve, St.
Peter’s College at age fourteen and the University of Adelaide in 1897, and later at
University of Edinburgh, Scotland to study medicine. Mayo’s interest in medicine was
never truly kindled; in 1907, he reentered the University of Adelaide where he studied
philosophy and psychology. On graduation in 1910, Mayo taught logic, ethics and
psychology, first at the University of Adelaide and then at the University of Queensland.
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In the succeeding years, Mayo developed an interest in the relationship between society
and individual problems, and became involved in the psychotherapeutic treatment of
shell-shocked soldiers of the First World War, in recognition of which he was made the
chairman of the Department of Philosophy at the University of Queensland in 1919. In
the year 1922, he moved to the United State where he first joined the faculty of the
Wharton School of Finance and Commerce of the University of Pennsylvania, and later
to the post of Professor of Industrial Research at the Graduate School of Business
Administration, Harvard University which post he held from 1926 to 1947. It was here
that Mayo started in 1927 the most intensive studies on human relations known as
“Hawthorne Studies” conducted at the Western Electric Company’s Hawthorne plant
near Chicago. The studies lasted more than five years (1927-1932). These ‘Hawthorne
studies’ become an historic landmark in administrative thought as they helped in
developing the Human Relations School. Mayo retired from Harvard in 1947 and
returned to England where he resided until his death in 1949.
Mayo was a balding, bespectacled, chain-smoking man of slight build, but with an
abundance of restless energy. Described by his associate F J. Roethlisberger as a “blithe
spirit” and “an adventurer in the realm of ideas”, Mayo was less a systematic thinker than
a sower of “seeds to be cultivated”.
Major Works
1. Democracy and Social Freedom (1919)
2. The Human Problems of an Industrial Civilization (1933)
3. The Social Problems of an Industrial Civilization (1945)
4. The Political Problems of an Industrial Civilization(1947)
4.1 Social Disorganization and Social Malaise
Activity 4.1 Dear Students: What do you think about social disorganization?
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For Mayo man is a social animal who finds a sense of identification and personal security
in cooperative relationships. Society itself constitutes a cooperative system, and a
civilized society is one that is based on the spontaneous and voluntary cooperation of its
members, rather than on force. Mayo asserts that modern society suffers from a
breakdown of the social routines of traditional society.
According to Mayo, the modern society is facing a condition of social disorganization.

Modern society, with its specialized logic and increased tempo of scientific and
technological change, has destroyed to routines of social interaction that fostered a sense
of unity and the sprit of collaboration in tradition societies. Mayo maintains that the
problem of social disorganization has been complicated by an economic theory that
emphasizes competition in the pursuit of individual self-interest. According to him,
economic theory, based on the 19th century concept of individualism, considers society to
be a collection of unrelated individuals motivated by hedonistic interests.
Mayo asserts that politics has thwarted society’s efforts to preserve its unity. The party
system, based on class consciousness and the obsessions of hate and fear, has divided
society into hostile camps. Mayo contends that political parties were established to
educate the public and thus give form to public opinion. But in reality, they have merely
become devices for winning elections as politicians appeal to the fears and hatreds of the
masses. In the process, the ideal of political liberty has been translated into the reality of
“servitude of all that is intellectually futile and emotionally base”.
4.2 Social Disorganization and the Individual
According to Mayo, the social disorganization attendant to the transition from the
traditional to a modern society has lead to personal disorganization. Social
disorganization deprives the individual of tradition sense of social understanding and
support. Mayo contends that in modern society socialization has been subordinated to
logic, but the logic developed has been inadequate to the task of promoting effective
social relationships.
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In conditions of social and personal disorganization, individuals in modern society will
exist in a state of anomie or plan less living, having been deprived of their sense of social
function. In the state of anomie, the individual is apt to be beset by reverie, or undirected
thinking, which determines his attitude towards life. These unacknowledged reveries are
then manifested in strange ideas and eccentric behavior. Mayo asserts that no one is
entirely free from the unreason produced by reverie and that the mentality of the average
individual suggests a mild form of manic-depressive psychosis characterized by solitude
and pessimism. Long trains of unacknowledged reveries lead, in turn , to compulsions or
obsessions in which individuals ‘over think’ situations and attribute their ills to a hostile
environment. This obsessive stage generates an incompetence to respond to social
situations. According to Mayo, social ills exacerbate personal ills. Obsessions prevent
fixed attention and create irrational motives. Irrationality engendered by obsession makes
the burden of decision the burden of possible sin, and, according to Mayo life may be
“made wretched and brought to nothing by irrationalities developed during a lifetime”.
4.3 Industry and Disorganization
According to Mayo, disorganization has also contributed to conflict and class

consciousness in industrial setting. Mayo considers the industrial organization to be a
fundamental social unit. The individual’s sense of meaning comes primarily from a trade
or profession that gives the individual worker the feeling that his or her work is socially
necessary. Yet in modern society, Mayo contends, occupation has been divorced from
social function, and social conflict has embittered relationships with industry.
Mayo argues that the “ great stupidity” of modern society is its disregard of the fact that
machine shop is a “potent agent of repression” and a “preservation of human energy”.
Similarly, Mayo considers unions to be a reactionary attempt to conserve human values
by “stalling’ and thus resisting change. In industry, work has been reduced to a
monotonous routine and the highly specialized procedures adopted have deprived work
of a sense of social function. Routine and monotonous work, in turn, lead to work being
performed in a state of ‘reverie’ with obsession impairing work performance. Work gains
in interest and dignity as an essential part of a social function.
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Thus, work is an exercise of skill best done in a social surrounding. Furthermore, Mayo
contends that the relationships among people in the work place are more important than
technical logic and the immediate material interests of the individual. He argues that
monotonous work , inadequate social conditions, and personal disorganization have
combined to yield discontent in industry. He observes that the modern industry has
violated non-logical social code ( which regulates the relations between persons and their
attitudes to one another) by insisting upon “a merely economic logic of production”. In
the factory this leads to less production. In the large community it leads to the social
disorganization taking the form of delinquency, suicide and obsessions. Mayo maintains
that problem of industrial civilization “is not that of the sickness of an acquisitive society;
it is that of the acquisitiveness of a sick society”.
4.4 A Summary of Mayo’s Social and Political Perspectives
1. Civilization has moved form a society of established customs and routines to

a society marked by disruptive social, scientific, and technological changes.
2. Logical responses have not been developed to cope with these social changes.
3. The problem of social disorganization has been complicated by an economic

theory that emphasizes competition in the pursuit of individual self-interest
and a political system that panders to the fears of the body politic.
Consequently, society has degenerated in to class warfare.
4. The social malaise is reflected in individual behavior in the form of

uncontrolled reveries and irrational obsessions which prevent adequate
adaptation to changing social conditions
5. The problem of personal disorganization is exacerbated in the industry where

work has been reduced to a monotonous routine and where technological
changes and specialized procedures have deprived work of a sense of social
function.
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Solution to the Social Malaise
Mayo is concerned with the condition of social disorganization in which irrational

responses have been substituted for previous traditions. He offers his own solution to the
problems of social and personal disorganization. He does not believe in socialism as a
solution. Nor are trade unions the solution to society’s ills. He also argues that industrial
democracy is not to cure. Popular palliatives, such as increased wages, vocational
adjustment and incentive schemes are also likely to be ineffective. Nor can improved
family life address the basic social problems. Social discipline beyond the family is
required if individuals are to develop a capacity for fitting into a social situation.
Mayo’s solution to social malaise lies in a combination of a restricted role for the state,
the return of control to ‘peripheral’ organizations, the creation of an administrative elite,
the acquisition of scientific knowledge, and the development of an educational process
appropriate to society’s needs and problems. He asserts that civilization breaks down
because of problems in administration and that democracy, unparticular, has failed to
realize the importance of administrative knowledge and skill.
Mayo attaches great importance to education. He asserts that the prime duty of education
is to emancipate people from fear through understanding. Education is a prelude to
adventure and should light up the imagination of youth. Mayo argues that one can
eliminate the eccentric from industry, but it is far better to eliminate eccentricities from
otherwise normal persons in industry by better education. Further, he assets that technical
advances is required to establish better standards of living vital to effective democracy.
The state can play a role, but it is necessarily a limited role because compulsion has never
succeeded in rousing eager and spontaneous cooperation. Mayo’s vision is an adaptive
society characterized by control from below by persons with skills in social relationships
and communication. The adaptive society would be based on an attitude of spontaneous
cooperation, and would be free from irrationality and obsession.
4.5 Mayo’s Empirical Studies
Activity 4.2 Dear Students: What do you know about Hawthorn Studies?
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The turning point in the development of the Human Relations Movement was the
Hawthorne experiments at the Western Electric Company in USA (1924-32) and the
subsequent publication of the research findings. Mayo focused attention on the behavior
of workers and their production capacities, keeping in view of all physiological, physical,
economic and psychological aspects. He called this approach the clinical method and
undertook a number of empirical studies.
The Western Electric Experiments
The departure point for the human relations perspective and much of the change that it
produced was the Western Electric Experiments conducted at the Hawthorne Work in
Cicero, Illinois form 1924-1932.
The researchers included people from the National Research Council, the Harvard
Business School, and the Massachusetts Institute of Technology.
There were four main phases to the Hawthorne experiments;
1. the illumination experiments
2. the relay assembly test room
3. the interviewing programme
4. the bank –wiring observation room
The illumination experiments (1924-27). Prior to the entry of Mayo and his followers
into the “Hawthorne studies”, a research project was already under way at the Western
Electric Company to determine the effect of illumination on the worker and his work.
Two groups (an experiment group and a control group) of workers had been separately
formed, and the lighting conditions for one had been varied and for the other held
constant. After two and a half years’ investigation, the investigators found no significant
differences in output between the two. The level of production was influenced, clearly, by
factors other than changes in physical conditions of work. This prompted a serious of
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other experiments investigating factors of worker’s productivity. Mayo and
Roethlisberger (the Harvard group) were invited for this purpose.
The Relay assembly test room. The first stage of their inquiry (conducted by Mayo and
his associates) was known as the Relay Assembly Test Room, in which six female
operatives engaged in assembling telephone relays, were placed in order to observe the
effect on their output and morale of various changes in the conditions of work. The
investigation was divided in 13 periods. During which the workers were subjected to a
serious of planned and controlled changes in their conditions of work , such as hours or
work, rest pauses and provisions of refreshments. The general environment conditions of
the test room were similar to those of the normal assembly line. During the investigation,
the observer adopted a friendly manner, consulting with the workers, listening to their
complaints, and keeping them informed of the investigation. Following these changes, a
continuous record of output was maintained. Almost without exception output rose with
each change introduced.
After charting these changes, the next stage was to return to the original conditions at the
beginning of the experiment. The operatives reverted to a 48 hours week, with no rest
pauses and no refreshment. Surprisingly, output increased to new heights. The general
upward trend was astonishing. To quote Mayo, “that the itemized changes experimentally
imposed- could not be used to explain the major changes-continually increased
production”. The explanation given was that the female operatives had greater freedom in
their work environment and since the supervisors took a personal interest in each girl,
they had become a social group. Mayo’s conclusion was that work satisfaction depends
largely on the informal social pattern of the work group. Where norms of cooperativeness
and productivity are established because of a feeling of importance, physical conditions
have little effect. This confirms the recognition of informal social groupings in
determining levels of output.
Taken as a whole, the human relations between workers and their supervisors and among
the workers are important influences on worker’s behavior at least “as important as
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physical work conditions and monetary incentives”. It is the view that many
commentators have hailed it as the “great illumination”.
The Interviewing Programme (1928-31): Human relations and sentiments. In 1928,

Mayo and his team started to study human attitudes and sentiments. For this purpose
employees were asked “to express frankly their likes and dislikes about their working
environment”. After interviewing over 21,000 of the 40,000 employees at the Hawthorne
plant, by adopting the ‘indirect approach’, it was found that “there was no simple and
direct relations between the complaint and object toward which the complaint was
directed”.
The interviewers were friendly and sympathetic. They adopted an impartial, non-
judgments approach and concentrated on listening. They did not take sides or offer
opinions but, whenever found necessary, explained company policy and details of , for
example, benefit schemes. The team concluded that the pre-occupation of the employee
with personal problems like family tragedies, sickness, etc. which Mayo has called
Pessimistic reveries in his early research, affected his performance in the industry. The
results of the investigation led the team to acclaim the project a success in three ways:
First, the employees “appreciated being recognized as individual who had valuable
comments to make”. They felt that they could freely express their views.
Second, the interviewing programme created a change in supervision also. The supervisor
felt that “these methods were being made the subject of research”.
Third, the interviewers felt that “they had acquired a new and improved way of
understanding and dealing with their fellowmen”. They found the social structure to be
“an intricate web of human relations bound together by a system of sentiments”
The interviewing programme was significant in giving an impetus to present-day

personnel management and the use of counseling interviews, and highlighting the need
for management to listen to workers’ feelings and problems.
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The bank-wiring observation room (1931-32): Social organization. The final stage of
the investigation of the study team was to analyze the group behavior in a non-
experimental situation. In November 1931, therefore, the team set up what become
known as the Bank-Wiring Observation Room where 14 men, 9wiremen, 3 soldiers and 2
inspectors- worked together for seven months under careful observation. The objects of
the study included the behavior of four supervisory officials( group leader, section
officer, assistant foreman, and foreman) who came into contact with the workers. It was
found that they restricted their output and deliberately held down their own wages. These
was in contrary to Taylor’s conception of worker’s behavior –that workers are lazy. The
group had a norm of output and this was not exceeded by any individual. The group had
developed its own code of behavior which clashed with that of management. Apparently,
this code was composed of solidarity on the part of the group against management.
The group as a whole held the idea that not too much not too little work should be done
in order to avoid rate busting and chiseling. An individual worker was required to refrain
form telling anything to the supervisor that would be detrimental to an associate. Further,
an individual should not attempt to maintain social distance or act officious. Therefore,
an individual’s status in the group was determined largely by his conformity to these
ideas. For such group, the introduction of technical innovations which impair the workers
status and efficiency, was resented. Both technologists and supervisors were seen as a
source of interference and constraint.
Major Findings of the Hawthorne Studies
In brief, the following are the major findings and generalizations of the Hawthorne
studies:
1. The output or the amount of work of a worker is not determined by his

physical capacity but by his social capacity.
2. Non-economic rewards and sanctions significantly affect the worker’s

behavior
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3. A worker often does not act or react to management as an individual but as
a member of groups.
4. Communication, participation, and leadership play a central role in

worker’s behavior.
Taken as a whole, the relations between workers and their supervisors and among the
workers have significant influences on the behavior of the workers. The significance of
the Hawthorne investigation lay in discovering the informal organization which it is now
felt exists in all organizations. It confirmed Mayo’s earlier view that what he calls the
‘rabble hypothesis’ about human behavior (that is, each individual pursues his own
rational self-interests) was false. Mayo emphasized that management must develop a new
concept of authority and foster a new social order based on the individual’s cooperative
attitude.
Limitation
They have failed in developing an integrated theory of management as they have

followed only the basic background lid down by classical theorists.
Their style was unethical as they use human beings as an experimental unit in a
laboratory.
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Unit Summary
The Hawthorne Experiments began in 1924 and continued through the early 1930s. One
of the major conclusions of the Hawthorne studies was that workers' attitudes are
associated with productivity. Another was that the workplace is a social system and
informal group influence could exert a powerful effect on individual behavior. A third
was that the style of supervision is an important factor in increasing workers' job
satisfaction. The studies also found that organizations should take steps to assist
employees in adjusting to organizational life by fostering collaborative systems between
labor and management. Such conclusions sparked increasing interest in the human
element at work; today, the Hawthorne studies are generally credited as the impetus for
the human relations school.
1. Major works of Mayo includes all but:
A. Democracy and social freedom
B. The social problems of an industrial civilization
C. The political problems of an industrial civilization
D. Necessity and possibility of teaching management
E. None of the above
2. Elton Mayo was more concerned with efficiency and productivity than relationship
between organization and members.
A. true B. False
3. Which one of the following is a correct sequence of what was conducted in

Hawthorne?
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A. Bank wiring observation room-----relay assembly test room experiment---- the
interviewing programme-------the illumination experiments
B. illumination experiments --------relay assembly test room experiment---- the

interviewing programme------- bank wiring observation room
C. relay assembly test room experiment -------the illumination experiments -------

-bank wiring observation room---- the interviewing programme
D. Illumination experiments----relay assembly test room experiment---- the

interviewing programme-------bank wiring observation room.
E. None of the above.
4. Which one of the following is not true about major findings of the hawthorne studies?
A. The performance of a worker is determined by his physical capabilities
B. None economic rewards significantly affect the worker’s behavior
C. A worker does not react to management as an individual
D. Communication, participation, and leadership play a central role in worker’s

behavior
E. None of the above.
5. Mayo asserts the solution of social malaise include the following except
A. the creation of an administrative elite
B. acquisition of scientific knowledge
C. development of appropriate educational process
D. all
E. None
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1. What are the major contributions of the Hawthorne experiments to the present –day
organizations?
2. What are the major limitations of the Hawthorne studies?
3. What are the major findings of Hawthorne experiments? Examine their significance
to the practicing managers?
Reference:
 Davis, Keith and Newstrom, John W. (1989). Human Behaviour at Work:
Organizational
 Behaviour. 3rd ed. New York: McGraw Hill Book Company.
 Homans G. C. (1958) The Human Group(New York: Harcout, Brace and World).
 Zelalem L. Introduction to Management: Lecture notes, Rift valley university
college, Department of Management.
 Elton Mayo, the Human Problems of an Industrial Civilization, Macmillan
Publishing Company, New York.
 Keith Davis, Human Behaviour at Work, Tata McGraw Hill, New Delhi.
 Earnest R. Hilgard and Gordon Power, Theories of Learning, Prentice Hall.
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UNIT FIVE: THE MODERN ERA
Objectives of this Unit
Dear Students: This unit will discuss issues related to the recent developments in
management theory. It will discuss the modern approaches to management such as the
systems approach, the quantitative approach, and contingency approach. Therefore, after
studying this unit, you will be able to:
 Identify the characteristics of modern approaches to management.
 Explain the systems approach in management
 Discuss the quantitative approach to management
 Define contingency approach
Unit Introduction
Dear Students: The recent development in management deals with theories such as
Systems Approach, Situational or Contingency theory, Quantitative approach and the
socio technical approach. The systems theory has had a significant effect on management
science and understanding organizations. A system is a collection of part unified to
accomplish an overall goal. If one part of the system is removed, the nature of the system
is changed as well. A system can be looked at as having inputs (e.g., resources such as
raw materials, money, technologies, and people), processes (e.g., planning, organizing,
motivating, and controlling), outputs (products or services) and outcomes (e.g.,
enhanced quality of life or productivity for customers/clients, productivity). Systems
share feedback among each of these four aspects of the system.
The situational or contingency theory asserts that when managers make a decision, they
must take into account all aspects of the current situation and act on those aspects that are
key to the situation at hand. Basically, it is the approach that “it depends”. For example, if
one is leading troops in Somalia, an autocratic style is probably best. If one is leading a
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hospital or University, a more participative and facilitative leadership style is probably
best.
5.1. Characteristics of Modern Approaches to Management
Activity 5.1 Dear students! What do understand about the characteristics of modern
approaches to management? Please write your idea on a sheet of paper before your
read the explanation below.
Modern theories tend to be based on the concept that the organization is a system which
has to adapt to changes in its environment. In modern theory, an organization is defined
as a designed and structured process in which individuals interact for objectives. The
contemporary approach to the organization is multidisciplinary, as many scientists from
different fields have contributed to its development, emphasizing the dynamic nature of
communication and importance of integration of individual and organizational interests.
Some of the notable characteristics of the modern approaches to the organization are:
 a systems viewpoint,
 a dynamic process of interaction,
 multilevelled and multidimensional,
 multimotivated,
 multidisciplinary,
 Multivariable, and adaptive.
Modern understandings of the organization can be broadly classified into:
 The systems approach,
 A contingency or situational approach
 Quantitative Approach
 Socio-technical theory
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5.2. Systems Approach
Activity 5.2 Dear students! What do mean by systems approach? Could you identify the
different element of system approach? What is mean by open and closed systems?
The systems approach views organization as a system composed of interconnected - and

thus mutually dependent - sub-systems. These sub-systems can have their own sub-sub-
systems. Thus, the organization consists of the following three basic elements:
(i) Components: There are five basic, interdependent parts of the organizing system,
namely:
 the individual,
 the formal and informal organization,
 patterns of behavior emerging from role demands of the organization,
 role comprehension of the individual, and
 the physical environment in which individuals work.
(ii) Linking processes: The different components of an organization are required to

operate in an organized and correlated manner. The interaction between them is
contingent upon the linking processes, which consist of communication, balance and
decision making.
 Communication is a means for eliciting action, exerting control and effecting

coordination to link decision centre in the system in a composite form.
 Balance is the equilibrium between different parts of the system so that they keep
a harmoniously structured relationship with one another.
 Decision analysis is also considered to be a linking process in the systems

approach.
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(iii) Goals of organization: The goals of an organization may be growth, stability and
interaction. Interaction implies how best the members of an organization can interact with
one another to their mutual advantage (we will discuss in detail about system approach in
the next section this unit).
The systems school began to have a strong impact on management thought in the 1960s
as a way of thinking about managing techniques that would allow managers to relate
different specialties and parts of the company to one another, as well as to external
environmental factors. The systems school focuses on the organization as a whole, its
interaction with the environment, and its need to achieve equilibrium. A system is
defined as a sum total of individuals, but inter-related parts (sub-systems), and is put
together according to a specific scheme or plan, to achieve the pre-stated objectives.
Every practicing manager knows from experience that whatever actions and decisions he
takes, in any particular area of activity, have results which extend well beyond that
specific activity. The impact of decisions in some cases affects the whole organization
and even external environment. A simple decision to throw out an inefficient, lazy
worker, for example, triggers off union activity which can in extreme situations, even
result in strike. The situation may become so hot that the union forces the neighboring
units also to join the strike. Thus when a manager takes a decision he never views its
impact in isolation but tries to understand and anticipate its repercussions on the entire
organization and the environment. The manager understands that his organization is a
totality of many, inter-related, inter-dependent parts, and put together for achieving the
organizational objectives. The importance of the systems concept to the manager is that it
helps him to identify the critical sub-systems in his organization and their inter-
relationships with each other and the environment.
A system can be closed or open. A closed system is self-sufficient and self-regulatory and
has no interaction with the environment in which it exists (see figure 5.1). The feedback
from the output triggers off a control mechanism which then regulates the input to bring
back the output to the desired level.
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Process
Input Output
Feedback
Corrective Action Control
Figure 5.1 A closed system
An open system is one which interacts with the environment in which it exists. Figure 5.2
illustrates an open system. All social systems are example of open systems (Dear
Students: remember that closed social systems are ideal because all social systems are
open). An organization is an open system and its sub-systems are its various divisions
and departments. But at the same time, it is a sub-system of the environment system
within which it operates. The environment itself consists of social, economic, political,
and legal sub-systems.
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Macro-environment: political, economical, social,
technological, legal etc.
Task environment: Competitors, union

Regulatory, Customers
Structure
Inputs: Outputs:
Task Technology
Material Product
Capital Service
Human
People
Organizational boundary
Figure 5.2 the components of organization system and its

interaction with the environment
The task of the organization is its mission, purpose or goal for existence. The people are
the human resource of the organization. The technology is the wide range of tools,
knowledge and/or techniques used to transform the inputs into outputs. The structure is
how work is designed at the micro level, as well as how departments, divisions and the
overall organization are designed at the macro level. In addition to these major internal
components of the organization as a system, there is organizations’ task environment
such as suppliers, customers and regulators. In simpler terms it is that part of external
environment which is relevant at present or expected enforceable future to the
organizations’ goal attainment.
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Activity 5.3
1. Discuss the concepts of modern approach to management.
2. Mention some of the notable characteristics of the modern approaches to the

organization
3. What is mean by socio-technical theory?
5.3. The Quantitative Approach
The quantitative school focuses on improving decision making via the application of
quantitative techniques. Its roots can be traced back to scientific management. The
quantitative theory of management emphasizes the use of mathematical and statistical
techniques in management and focuses on finding right answers to managerial problems,
which are solved through decision making.
The theory came into focus during and after World War II. The critical exigencies of War
necessitating the building of optimal solutions to militant and logistics problems, was
sought to be solved through mathematical model building by inter-disciplinary scientists.
They applied scientific research in their bid to find most suitable answers to problems of
strategic and tactical military operations and optimal decisions about the deployment of
military resources. Extensive application of Operations Research brought forth new
techniques like Linear Programming, Queuing theory, Game theory, Probability theory,
Sampling theory, critical path, Program evaluation and review technique, etc.
The theory stresses the importance of diverse decision situations and the means of
perfecting them. It precludes thumb rules or acting through intuition, but recommends the
process of optimal decision-making assembling accurate and reliable data with
quantitative precision and perfection.
How Do Today’s Managers use the quantitative approach?
The quantitative approach has contributed directly to management decision making in the
areas of planning and control. For instance, when managers make budgeting, scheduling,
quality control, and similar decisions, they typically rely on quantitative techniques. The
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availability of sophisticated computer software programs to aid in developing models,
equations, and formulas has made the use of quantitative techniques somewhat less
intimidating for managers, although they must still be able to interpret the results. The
quantitative approach, although important in its own way, has not influenced
management practice as much as the next one we’re going to discuss–organizational
behavior–for a number of reasons. These include the fact that many managers are
unfamiliar with and intimidated by quantitative tools, behavioral problems are more
widespread and visible, and it is easier for most students and managers to relate to real,
day-to-day people problems than to the more abstract activity of constructing quantitative
models.
Branches in the Quantitative Management Approach:
There are three main branches in the Quantitative Management Viewpoint:

management science, operations management, and management information systems.
1. Management science (or operations research as it has been called) is an approach

aimed at increasing decision effectiveness through the use of sophisticated
mathematical models and statistical methods. This is NOT a term to be used
synonymously with either the term “Scientific Management” described earlier
featuring Taylor and others or “The Science of Management,” a term that usually
refers broadly, to a deliberate, rational approach to management issues.
2. Operations Management is the function or field of expertise that is primarily

responsible for the production and delivery of an organization’s products and
services.
3. Management information systems (MIS) is the name often given to the field of
management that focuses on designing and implementing computer-based
information systems for use by management.
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5.4 The Contingency/Situational Approach
The situational approach is based on the belief that there cannot be universal guidelines
which are suitable for all situations. The contingency approach suggests that different
environments require different organizational relationships for optimum effectiveness,
taking into consideration various social, legal, political, technical and economic factors.
The contingency school focuses on applying management principles and processes as

dictated by the unique characteristics of each situation. It emphasizes that “there is no
one best way to manage” and that it depends on various situational factors, such as the
external environment, technology, organizational characteristics, characteristics of the
manager, and characteristics of the subordinates. Contingency theorists often implicitly or
explicitly criticize the classical school for its emphasis on the universality of management
principles; however, most classical writers recognized the need to consider aspects of the
situation when applying management principles.
The contingency school originated in the 1960s. It has been applied primarily to
management issues such as organizational design, job design, motivation, and leadership
style. For example, optimal organizational structure has been theorized to depend upon
organizational size, technology, and environmental uncertainty; optimal leadership style,
meanwhile, has been theorized to depend upon a variety of factors, including task
structure, position power, characteristics of the work group, characteristics of individual
subordinates, quality requirements, and problem structure, to name a few.
The main features of contingency approach are as:
(i) The contingency approach stresses that there is no one best style of leadership
which will suit every situation. The effectiveness of leadership style varies
from situation to situation. Therefore, according to this approach, management
is entirely situational.
(ii) Contingency Approach is action-oriented as it is directed towards the application
of systems concepts and the knowledge gained from other approaches. The
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contingency approach builds upon this perspective by following in detail on
the nature of relationships existing between these parts.
(iii)Contingency theory attempts to determine the predictable relationships between
situations, actions and outcomes.
(iv) Management should match or 'fit' its approach to the requirements of the
particular situation. Management has to exercise the action subject to
environmental changes.
(v) Contingency approach provides significant contribution in organizational design.
It suggests that no organizational design can be suitable for all situations,
rather, the suitable design is one determined, keeping in view the requirements
of environment, technology, risk and people.
Contingency approach is useful orientation in management. It emphasizes the

multivariate nature of organizations- and attempts to understand how organizations
operate under varying conditions in specific circumstances. This theory suggests
organization design and actions which are most appropriate for specific situation.
Critical evaluations
The primacy of contingency approach is challenged by several theorists. They argue, for
one thing, that the contingency approach does not incorporate all the aspects of systems
theory, and they hold that it has not yet developed to the point of which it can be
considered a true theory. Critics also argue that there is really not much that is new about
contingency approach. For example, even the classical theorists such as Fayol cautioned
that management principles must be flexible.
The contingency approach is also criticized on the ground that it is totally a practical
approach without being supported by required theoretical and conceptual framework. The
managers experience difficulty in analyzing situations in the absence of needed research
devices and generalizations for understanding behavior of the situation. Some of the
classical theorists forgot the pragmatic cautions of Fayol and others. Instead, they tried to
come up with "universal principles" that could be applied without the "it depends"
dimension. Managers applied the absolute principles by these theorists. Lastly, the
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considerations of environmental factors are necessary to develop an organizational design
and action. But, managers are certainly unaware of the environmental changes and could
not analyze the environmental factors properly. The theme of contingency approach that
management must be aware would work best in a particular situation in the absence of
certain methods, models and techniques that are relevant to appraise situation.
5.5 Socio-Technical Approach

It is not just job enlargement and enrichment which is important, but also transforming
technology into a meaningful tool in the hands of the users. The socio-technical systems
approach is based on the premise that every organization consists of the people, the
technical system and the environment. People (the social system) use tools, techniques
and knowledge (the technical system) to produce goods or services valued by consumers
or users (who are part of the organization's external environment). Therefore, equilibrium
among the social system, the technical system and the environment is necessary to make
the organization more effective.
Activity 5.2
1. Discuss the systems approach to management
2. Explain the components of systems approach
3. What is meant by contingency approach to management?
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Unit Summary
In this unit we introduced the systems concept which is useful concept for understanding
the operations of a firm by identifying the critical subsystems, their inter-linkages and
inter-dependence in the achievement of a common goal or sets of goals. There can be a
number of sub-systems within the system of a firm and the system is either close or open
to the external environment.
The quantitative approach emphasizes the application of quantitative tools in planning

and decision making. It enables managers thoroughly analyze existing and potential
problems and make decision based on predictable outcomes. The contingency approach
implies that there is no one best way to management. This in other words mean different
situations calls for different approaches and therefore there is no one best way of solving
problems for all kind of situations. In applying a contingency approach, managers need to
examine a given situation and adapt to fit a given context.
Self-Check Review Questions
Part I: Choose the best answer for the following questions.
1. Which one of the following is not the element of system approach?
A) Linking process B) goals of organization
C) Inputs (material or human resource) D) none of the above
2. ______ focuses on improving decision making via the application of quantitative

techniques.
A) Quantitative approach B) Contingency approach
C) Socio-technical approach D) System approach
3. Which one of the following is not the characteristics of modern approaches to

organization?
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A. a dynamic process of interaction,
B. multileveled and multidimensional,
C. multidisciplinary,
D. system view
E. none
4. An organization is defined as a designed and structured process in which individuals

interact for objectives.
A. True B. False
5. ________is based on the premise that every organization consists of the people, the
technical system and the environment
A) Quantitative approach B) Contingency approach
C) Socio-technical approach D) System approach
Part II: Discussion questions
1. Explain the open system in system approach theory of management.
2. Discuss the management approach that is commonly practiced in your

organization or any organization you are familiar with.
Reference:
 Basu C. R., Business Organization and Management, 2nd Edition, Tata McGraw-
Hill Ltd.
 Brech, E. F. L., Organization: The Framework of Management, 2nd Edition,
Longman.
 Louis A. Allen, Management and Organization, McGraw-Hill Kogakusha, Ltd.
 Laurie J. Mullins, Management and Organizational Behavior, Pitman.
 Robbins Stephen P. and Mary Coulter, Management, 2002, Prentice Hall of India.
 Robbins Stephen P. and Decenzo David A., Fundamentals of Management, 3rd
 Principles of Management – module for university of Pakistan MGT503
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UNIT SIX: THEORIES OF MOTIVATION
This unit will be dealt with the concept and different theories of motivation. It will
discuss the early and contemporary theories of motivation. Therefore, after studying this
unit, you will be able to:
 Understand the concept of motivation in an organizational context.
 Identify the different early theories of motivation
 Explain Maslow’s need hierarchy theory of motivation
 Differentiate different theories of motivation
 Have an overview about contemporary theory of motivation
Unit Introduction
Dear Students: Organizations cannot achieve their objectives unless their employees are
committed and willing to exert all their efforts in carrying out their works. However, all
people in organization don’t perform at an acceptable level. Some people perform better
than others and even the same person perform differently at different times. According to
Singh (2003), motivation is the forces within a person that affect his or her direction,
intensity and persistence of voluntary behavior. Direction refers to the fact that
motivation is goal oriented, not random. People are motivated to arrive at work on time,
finish a project a few hours early, or aim for many other targets. Intensity is the amount
of effort allocated to the goal. E.g. two employees might be motivated to finish their
project a few hours early (directional), but only one of them puts forth enough effort
(intensity) to achieve this goal.
In this unit, we will discuss the concept of motivation, the different theories of
motivation such as Maslow’s hierarchy of need, Herzberg motivation hygiene,
McClelland achievement motive, McGregor X and Y theories of motivation. Further,
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contemporary theories of motivations like expectancy theory, equity theory, and goal
setting theory of motivation will be discussed.
Motivation
Dear students! What do we mean by motivation? Could you able to identify some early
theories of motivation? Please try to write on a sheet of paper before you go through
the discussion below
Dear Students: Managers often ask two questions about motivation of employees: “what
motivates people?” and “How can I motivate people?” implicit in the first question is the
notion that motivation derives from the person, or is a state that originates within that
person. In the second question, the emphasis is placed on what the managers can do to
elicit motivation. In one sense, the first question is broader than and includes the second
question. By asking about the source of motivation one is asking for an understanding or
explanation of what is known psychologically about the tendency of people to expend
their energies. By asking how to motivate others, a manager is assuming (a) that one can
affect another’s behavior and (b) that one’s effect can override other effects on another’s
behavior.
6.1 The Concept of Motivation

Motivation is the energizing of human behavior, or it is the process of stimulating action.
It involves a complex combination of individual needs, derives, tensions, discomforts and
expectations. All behavior is in some way motivated. People have reasons for doing what
they do or for behaving in the manner that they do. Thus, human behavior is directed
toward certain goals and objectives. Such goal directed behavior revolves around the
desire for need satisfaction. ‘
Contributions of Elton Mayo to the Concept of Motivation
The work of Elton Mayo is famously known as “Hawthorne Experiments.” He conducted

behavioral experiments at the Hawthorne Works of the American Western Electric
Company in Chicago. He made some illumination experiments, introduced breaks in
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between the work performance and also introduced refreshments during the pause’s. On
the basis of this he drew the conclusions that motivation was a very complex subject. It
was not only about pay, work condition and morale but also included psychological and
social factors. Although this research has been criticized from many angles, the central
conclusions drawn were:
1. People are motivated by more than pay and conditions.
2. The need for recognition and a sense of belonging are very important.
3. Attitudes towards work are strongly influenced by the group.
A need is a physiological, psychological, or sociological want or desire that can be

satisfied by reaching a desired goal. Accordingly, motivation starts with an unsatisfied
need and derives behavior towards satisfaction. Thus, the process of motivation contains
three steps:
I. An unsatisfied need: - is the starting point in the process of motivation. It is

the deficiency of something within the individual, and the first link in the
chain of events leading to behavior.
II. Goal directed behavior: - the unsatisfied need causes tension (physical or
psychological) within the individual, leading the individual to engage in some
kind of behavior. Thus, goal-directed behavior revolves around the desire for
need satisfaction.
III. Need satisfaction: - achieving the goal satisfies the need, and the process of
motivation is complete.
6.2. Classification of Theories of Motivation

Dear Students: Based on the above steps theories of motivation are classified into
two categories
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I. Early Theories of Motivation
Motivation is a very challenging concept in understanding and changing human behavior.

Possibly the essence of the traditional view of people at work can be best appreciated by
a brief look at the work of Jeremy Bentham’s an English philosopher, whose ideas were also
developed in the early years of the Industrial Revolution, around 1800. Bentham’s view
was that all people are self-interested and are motivated by the desire to avoid pain and
find pleasure. Any worker will work only if the reward is big enough, or the punishment
sufficiently unpleasant. This view - the ‘carrot and stick’ approach - was built into the
philosophies of the age and is still to be found, especially in the older, more traditional
sectors of industry.
1. Maslow’s Need Hierarchy

Activity 6.1 Dear students! What are the different components of needs in the
hierarchy theory of Maslow? Please try to list them before you go through the
discussion below.
Maslow’s hierarchy of needs provides both a theory of human motives by classifying

basic human needs in a hierarchy and a theory of human motivation that links these needs
to general behavior. This theory of motivation is based on the following important
assumptions:
1. Each person’s needs are arranged in a hierarchy of importance, ranging from the
lowest need – physiological – to safety, love (social), esteem (ego), and finally, self-
actualization. This hierarchy of “prepotency” or urgency of satisfaction means that the
most urgent need will monopolize the individual’s attention while less pre-potent needs
are minimized, even forgotten.
2. Each person continually wanting, therefore, all needs are never fully satisfied. As soon
as one need is satisfied, its prepotency diminishes, and another need emerges to replace
it. This is never ending process, which services to motivate man to strive to satisfy his
needs.
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3. Once a need is fairly well satisfied, it no longer motivated behavior. A person is than
motivated by the next higher level of unsatisfied need, but he can be motivated in a
reverse direction is a lower-level need is threatened.
4. The needs are interdependent and overlapping. Since one need does not disappear
when another emerges, all needs tend to be partially satisfied in each area.
Self-actualization
Esteem
Social
Safety Need
Physiological Needs
Figure 6.1 Maslow’s Hierarchy of needs theory
Maslow viewed an individual’s motivation as a predetermined order of needs.

Physiological needs are the most imperative ones, but the psychological need for self-
actualization is highly important to each individual.
A. Physiological Needs
As mentioned before, physiological needs must be satisfied in order to sustain life.

Included in this level are air, food, water, sleep, mating, and temperature regulation.
These needs take precedence over other needs when frustrated. A person who lacks food,
safety, love, and esteem would probably seek food more strongly than anything else.
When a man is dominated by a certain need, his thoughts for the future also tend to
change. For an extremely cold man, his ideal can be defined as a place that is warm. He
may think he would be perfectly happy and never want anything else if he were
guaranteed warmth for the rest of his life. He defines life in terms of warmth. Everything
else is considered unimportant.
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B. Safety Needs
When physiological needs are relatively well satisfied, needs at the next higher level
emerge to dominate man’s behavior. These are the safety needs, expressed as desires for
protection against danger, threat, and deprivation. What has been said of the
physiological needs also holds true for these needs. Since every industrial employee is at
least partially dependent upon his employer, safety needs, expressed as a desire for
security, can also be very important.
C. Social Needs
When physiological and safety needs are relatively satisfied, social needs become the
major motivation of man’s behavior. It is a feeling of accomplishment and attainment,
and of being satisfied with one’s self.
Man will aspire for a place in his own group and will strive to achieve it. Attaining such a
place will become the most important thing in the world to him. Inspite of knowing of
these needs, managers often incorrectly assume that these needs and the resulting
informal organizations represent a threat to the objectives of the formal organization. By
fearing hostility and opposition from informal organizations, some managers attempt to
direct and control employee relationships in ways that frustrate the nature groupings of
their employees. These employees may then react by being resistant, antagonistic, and
uncooperative.
D. Esteem Needs
Esteem or ego needs- next above the lower-level needs of physiological, safety and social
–do not become motivators until the lower-level needs have been reasonably satisfied.
Unlike the lower-level needs, these are rarely completely satisfied. But once these needs
become important to an individual, he will continually seek satisfaction of them. The
typical industrial organizations, however, offers only limited opportunities for the
satisfaction of these needs at the lower levels of employment.
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Esteem needs consists of both self-esteem and the esteem of others. Self-esteem needs
include self-confidence, self-respect, competence, achievement, independence/
autonomy, and freedom. Satisfaction of these needs leads to feelings of worth, capability,
strength, and being useful and necessary in the world. Frustrating them leads to feelings
of inferiority, weakness, and helplessness. Need relating to the esteem of others include
needs for status, recognition, appreciation, importance, and prestige.
E. Self-actualization Needs
The emergency of self-actualization needs comes only after all other needs have been
satisfied. Self-actualization needs include the realization of one’s potentialities, self-
fulfillment, continued self-development, and being creative in the broadest sense of that
term. Even if all lower-level needs are satisfied, a person may experience discontent and
restlessness if he is not doing what he is best suited for. The form that these needs take
varies from person to person just as human personalities vary. Self-actualization needs
can be satisfied through one or any combination of athletics, politics, and academics, the
family, religion, hobbies, or business.
As each of these needs is substantially satisfied, the next need becomes dominant. From
the standpoint of motivation, the theory would say that although no need is ever fully
gratified, a substantially satisfied need no longer motivates. So if you want to motivate
someone, you need to understand what level of the hierarchy that person is on and focus
on satisfying those needs or needs above that level.
2. Herzberg’s Motivation-Hygiene Theory:

Frederick Herzberg has tried to modify Maslow’s need Hierarchy theory. His theory is also
known as two-factor theory or Hygiene theory. He stated that there are certain satisfiers
and dissatisfies for employees at work. Intrinsic factors are related to job satisfaction,
while extrinsic factors are associated with dissatisfaction. He devised his theory on the
question: “What do people want from their jobs?” He asked people to describe in detail,
such situations when they felt exceptionally good or exceptionally bad. From the
responses that he received, he concluded that opposite of satisfaction is not
dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily
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make the job satisfying. He states that presence of certain factors in the organization is
natural and the presence of the same does not lead to motivation. However, their non-
presence leads to demotivation. In similar manner there are certain factors, the absence of
which causes no dissatisfaction, but their presence has motivational impact.
Hygiene Factors
 Working conditions
 Job Security Normal
Dissatisfaction
 Interpersonal relationship Condition /no
with supervisor Motivation
 Salary
 Company policy and
administration
Absence Presence
Normal condition/ Motivational factors

No Dissatisfaction  Growth prospectus Motivation
 Job advancement/work itself
 Responsibility
 Recognition and Achievements
Figure 6.2 Herzberg’s Satisfiers and Dissatisfiers
*The factors to the top if absent, will lead to employee dissatisfaction while the factors to
the bottom if present, can lead to employee satisfaction and motivation.
The three important points about Herzberg model
I. The factors that were present when job satisfaction was produced were separate
and distinct from the factors that led to job dissatisfaction.
II. The opposite of job satisfaction is no job satisfaction – not job dissatisfaction.
III. Similarly, the opposite of job dissatisfaction is no job dissatisfaction – not job
satisfaction.
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The satisfiers relate to the content or nature of the job and describe the employee’s
relationship to what he does. These factors that lead to satisfaction include achievement,
recognition, and the intrinsic characteristics of the work itself, responsibility, and
advancement. When these factors fall below an acceptable level, they contribute very
little to job dissatisfaction. If job does not offer employee advancement, challenging
work, responsibility, recognition for a job well done, or the opportunity to complete a
task successfully, he will not necessarily be dissatisfied with it, but neither will he derive
any satisfaction from it.
Conversely, when feelings of unhappiness were reported, they were not brought about by
the absence of the satisfier factors, but by the absence of “dissatisfiers”, or extrinsic
factors. Herzberg called these factors “hygiene” factors “because they act in a manner
similar to the principles of mental hygiene. Hygiene operates to remove health hazards
from the environment of man. It is not curative; it is rather, a preventive.” Hygiene
factors describe the employee’s relationship to the context or environment in which
he/she performs his/her work. Therefore, satisfiers relate to what an employee does,
dissatisfiers to the environment in which he does it. Dissatisfiers include company policy
and administration, technical supervision, salary, interpersonal relations with the
supervisor, and working conditions. When the hygiene factors fall below what the
employee considers an acceptable level, he becomes dissatisfied. However, at or above
the acceptable level, dissatisfaction is removed. This absence of dissatisfaction leads only
to a neutral state, not to any degree of satisfaction.
Activity 6.2
Explain the five levels of persons need in the hierarch need model developed by
Maslow (physiological, safety, love (social), esteem, and self-actualization).
Discuss the similarities and difference between Maslow’s hierarch of need and
Herzberg Motivation-hygiene theory.
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3. Theory X and Theory Y” of Douglas McGregor
Quite contrary to the assumption of Maslow and Herzberg, McGregor (1967) worked
entirely on different hypothesis and sought an answer to motivation in the nature of man.
Theory X and Theory Y reflect McGregor’s efforts in understanding human motivation
vis-à-vis the nature of the person. Theory X assumes the human being as lazy, idle, and
indolent. Such a person is averse to any effort and would like to avoid any kind of
responsibility. They prefer being directed and avoid being independent decision maker.
They only work under direct control and threat of punishment. McGregor puts forth the
assumption of the animal nature prevalent in the mankind. The ‘Theory Y’ is in
contradiction with theory “X”. Theory Y projects the human being as a creative, open-
minded and energetic person for whom the work is as pleasant and natural as play.
Responsibility is a welcome concept and such people seek self regulatory behavior.
After viewing the way in which the manager dealt with employees, McGregor concluded
that a manager’s view of the nature of human beings is based on a certain grouping of
assumptions and that he or she tends to mold his or her behavior towards subordinates
according to these assumptions. The assumption of theory X, what is McGregor called
“traditional view of direction and control” are:
 Employees inherently do not like work and whenever possible, will attempt to
avoid it.
 Because employees dislike work, they have to be forced, coerced or threatened

with punishment, controlled, directed to achieve goals.
 Employees avoid responsibilities and do not work fill, formal directions are
issued.
 Most workers place a greater importance on security over all other factors and
display little ambition.
For McGregor, theory X may be true and may work simply because managers believe it
to be true and act as if it were true. He felt that theory X assumption were used in most
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industrial organizations, but that they were inadequate for the full utilization of each
worker’s potential.
In contrast under the assumptions of theory Y:
 Physical and mental effort at work is as natural as rest or play.
 External control and the threat of punishment are not the only means for bringing
about effort toward organizational objectives. People do exercise self-control and
self-direction and if they are committed to those goals. Commitment to objectives
is a function of the rewards associated with their achievement s
 Average human beings are willing to take responsibility and exercise imagination,
ingenuity and creativity in solving the problems of the organization.
 Under the condition of modern industrial life, the intellectual potentialities of the
average human being are only partially utilized. That is, the average human
being’s brainpower is only partly used.
On analysis of the assumptions it can be detected that theory X assumes that lower-order
needs dominate individuals and theory Y assumes that higher-order needs dominate
individuals. An organization that is run on Theory X lines tends to be authoritarian in
nature, the word “authoritarian” suggests such ideas as the “power to enforce obedience”
and the “right to command.” In contrast Theory Y organizations can be described as
“participative”, where the aims of the organization and of the individuals in it are
integrated; individuals can achieve their own goals best by directing their efforts towards
the success of the organization.
A word of caution concerning theory Y is that, the heavy emphasis on internal motivation
implies that all employees will be motivated by self-esteem and self-actualization needs
while on the job. This is not always true. Some people are uncomfortable with too much
freedom. Even if all workers did desire complete individual freedom, this desire may not
be compatible with organizational goals. In some cases it may be in direct opposition to
them. In addition, it can be suggested that it is erroneous to assume that workers seek to
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satisfy their esteem and self-actualization needs on the job. Many people find enough
satisfaction in raising a family, participating in community projects, or passing the time
with a hobby. Hence, theory Y proponents must be cautioned against imposing their will
on employees, just as they criticized theory X proponents for doing so.
Managers must remember that each of their employees is unique and should be
understood and treated as such. Therefore, external motivation should be flexible enough
to accommodate each unique person in the organization. People should not be forced to
fit into a rigid theory or into one manager’s viewpoint.
4. The ‘Carrot and Stick’ Approach
The various leading theories of motivation and motivators seldom make reference to the
carrot and the stick. This metaphor relates, of course, to the use of rewards and penalties
in order to induce desired behavior. It comes from the old story that to make a donkey
move, one must put a carrot in front of him or dab him with a stick from behind. At the
same time, in all theories of motivation, the inducements of some kind of ‘carrot’ are
recognized. Often this is money in the form of pay or bonuses. Even though money is not
the only motivating force, it has been and will continue to be an important one. The
trouble with the money ‘carrot’ approach is that too often everyone gets a carrot,
regardless of performance through such practices as salary increase and promotion by
seniority, automatic ‘merit’ increases, and executive bonuses not based on individual
manager performance. It is as simple as this: If a person put a donkey in a pen full of
carrots and then stood outside with a carrot, would the donkey be encouraged to come out
of the pen?
The ‘stick’, in the form of fear–fear of loss of job, loss of income, reduction of bonus,
demotion, or some other penalty–has been and continues to be a strong motivator. Yet it
is admittedly not the best kind. It often gives rise to defensive or retaliatory behavior,
such as union organization, poor-quality work, and executive indifference, failure of a
manager to take any risks in decision making or even dishonesty. But fear of penalty
cannot be overlooked. Whether managers are first-level supervisors or chief executives,
the power of their position to give or withhold rewards or impose penalties of various
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kinds gives them an ability to control, to a very great extent, the economic and social
well-being of their subordinates.
II. Contemporary Theories of Motivation
Contemporary motivation theories are dominated by three separate but interrelated

constructs: expectancy, value, and achievement goals. As defined in the early twenty-
first century, expectancy has to do with beliefs about ability (Can I do it?). Values are
concerned with preferences and desires (Do I want it?). And goals capture purpose or the
reasons for engaging in achievement activities (Why am I doing this?).
The dominant theme in contemporary motivation research revolves around beliefs about
ability as represented by attribution theory, self-efficacy theory, and learned helplessness
theory. Attribution theory has its origins in social psychology and is therefore especially
concerned with the situational determinants of motivation and with both self-perception
and the perception of others. Self-efficacy theory has emerged from a social learning
perspective and therefore has close ties with behavioral change. Learned helplessness
theory reflects the influence of clinical and personality psychology with its focus on
coping with failure and individual differences in a presumed motivational trait.
Unlike expectancy, which focuses on beliefs about ability, values are more directly
concerned with the perceived importance, attractiveness, or usefulness of achievement
activities. Achievement goals capture the reasons why a person engages in achievement
behavior, and two broad types have been identified. Students who pursue mastery goals
are oriented toward acquiring new skills or improving their level of competence. In
contrast, students who adopt performance goals are motivated by the intent to
demonstrate that they have adequate ability and avoid displaying signs that they have low
ability.
Activity 6.3
1. Mention the three steps of motivation.
2. McClelland developed a theory on three types of motivating needs. Discuss each

briefly.
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3. What do you understand by contemporary theories of motivation? Explain the
concepts of expectancy, value, and achievement goals
1. McClelland’s Achievement Motive
The study of motivation attracted some attention in the early part of the 19th century.
However, it becomes popular only with the work of William McDougal and Sigmund
Frued, and later with the development of theories of learning, it came to occupy a central
position. When psychology began its application to the field of education and industry, it
became evident that the motivation as a process is highly significant in teaching and
learning and for that matter doing any work and achieving excellence. However, inspite
of the relevance and popularity of the concept and its theories, there seems to a lot of
ambiguity around motivation and its applicability till McClelland published his work way
back in 1953. McClelland’s unique contribution lies in the fact that he extended the
relevance of motivation from the theoretical understanding and limited application in
animal laboratories or context dependent studies, to a general applicability in industry,
education and a wide range of areas and contexts.
In his research on achievement, David McClelland found that businessman, scientists,

and professionals all rate above average on achievement motivation. An achievement-
motivated businessman, for example, does not desire profit solely for the sake of profits.
He wants them because he has a strong desire for achievement. David McClelland has
developed a theory on three types of motivating needs:
i) Need for Power: - people for high need for power are inclined towards influence and
control. They like to be at the center and are good orators. They are demanding in nature,
forceful in manners and ambitious in life. They can be motivated to perform if they are
given key positions or power positions
ii) Need for Affiliation: - in this category are the people who are social in nature. They
try to affiliate themselves with individuals and groups. They are driven by love and faith.
They like to build a friendly environment around themselves. Social recognition and
affiliation with others provides them motivation.
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iii) Need for Achievement: - people are driven by the challenge of success and the fear
of failure. Their need for achievement is moderate and they set for themselves moderately
difficult tasks. They are analytical in nature and take calculated risks. Such people are
motivated to perform when they see at least some chances of success.
McClelland suggests that a person with high needs for achievement possesses certain
characteristics which allow him to work better in some situation than in others. These
characteristics of an achiever are:
 He prefers tasks in which he can take personal responsibility for the outcome
 He sets moderate goals and takes ”calculated risks”
He wants precise feedback concerning his success or failures
2. Expectancy Theory
Activity 6.4 Dear students! What you understand by expectancy and equity theory?
Please try to list your own answer on the sheet paper before you go through the
discussion below.
The most widely accepted an explanation of motivation has been by Victor Vroom. His
theory is commonly known as e theory. The expectancy theory argues that the strength of
a tendency to act in a specific way depends on the strength of an expectation that the act
will be followed by a given outcome and on the attractiveness of that outcome to the
individual. Expectancy theory says that an employee can be motivated to perform better
when there is a belief that the better performance will lead to good performance appraisal
and that this shall result into realization of personal goal in the form of some reward.
Therefore an employee’s motivation can be seen as:
Motivation = Valence x Expectancy.
Victor Vroom (proponent of this theory) looked at effective motivation not in a uniform
configuration of external motivators. Instead, motivation is the result of three major
factors.
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i) The first are the goals a person wants to achieve – that is the main emphasis and not the
internal state. No judgment is made about what needs may create the desire for these
goals.
ii) The second major factor affecting productivity is a relationship a person perceives
between productivity and personal goal achievement; can high productivity leady to
one’s goal achievement. If yes, then high productivity will be seen as desirable and
valuable.
iii) A final factor must also be considered, “To what extent can a person influence his/her
own productivity?” if an individual believes that there is a little or nothing he can do to
influence his output, his attempts to do so may be weak or nonexistent. Again, it is his
perception of ability to affect his productivity that counts.
Putting these factors together provides the basis of the Vroom model. An interpretation of
the model is shown in figure 6.3. It illustrates that all three factors are determinants of an
individual’s level of productivity, and it emphasizes the likelihood of differences in
motivational states among different persons.
Perceived ability influences one’s

own productivity level
Motivation to
produce is a Perceived relationship between
function of Productivity and goal achievement
Strength of desired goal achievement

and related reward
Figure 6.3 Vroom Model
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3. Equity Theory
As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about
the reward structure as being fair or unfair, relative to the inputs. People have a tendency
to use subjective judgment to balance the outcomes and inputs in the relationship for
comparisons between different individuals. Accordingly:
Outcomes by a person = Outcomes by another person

Inputs by a person Inputs by another person
Balance or Imbalance in the mind of individual
Rewards not Rewards that are Rewards more

Equitable Equitable than Equitable
Leave
Demotivation the job Normal Motivation
Reaction
Reduction in Quality and

Quantity of production
Figure 6.4 Model for equity theory
If people feel that they are not equally rewarded they either reduce the quantity or quality
of work or migrate to some other organization. However, if people perceive that they are
rewarded higher, they may be motivated to work harder.
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4. The Porter and Lawler Model
Lyman W. Porter and Edward E. Lawler developed a more complete version of

motivation depending upon expectancy theory.
Figure 6.5 The New Motivational Model (Porter - Lawler)
Actual performance in a job is primarily determined by the effort spent. But it is also
affected by the person’s ability to do the job and also by individual’s perception of what
the required task is. A person may exhibit a great amount of effort but perform very
poorly if the individual does not have a satisfactory level of ability. Similarly, a person
may have a great deal of ability but perform poorly if the individual does not try hard
enough. So performance is the responsible factor that leads to intrinsic as well as
extrinsic rewards. These rewards, along with the equity of individual leads to satisfaction.
Hence, satisfaction of the individual depends upon the fairness of the reward.
Figure 6.5 represents one work cycle. For example, picture a student writing a term
paper. The student expends high effort and has adequate abilities and understands how to
conduct a thorough library search. Performance on the term paper should be high.
Imagine that the student receives a grade of C on the well written and factually correct
paper. Satisfaction with the reward (the grade of C) will probably low. The resulting
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dissatisfaction will affect the value of reward and perceived effort-reward probability on
the next work cycle (terms paper). If the student believed that high effort was expended
on the first assignment and associates the grade with working at maximum ability it is
questionable whether similar effort will be expended on the next paper. However, an
argument can be advanced that the grade received may spur higher effort if the student
believes that trying harder will lead to a valued higher grade.
The guiding principles for properly rewarding workers to increase job effort are:
1. Tie valued and important reward to performance. This principle direct manager to
reward workers with something of value to them. Some workers would rather have time-
off or an extended vacation rather than a salary increase or bonus. Other workers perform
effectively only to have favorable supervisory attention directed toward them. Still others
work hard only to feel a sense of efficacy of competence from doing a good job. A
manager must not only reward workers with valued rewards but must insure that workers
associate these rewards with effective task performance. The timing or schedule of
rewards is important – the dictum of “rewarding worker immediately after they perform
well” is supported by a wealthy of psychological evidence. Industry commonly
distributes year-end bonuses with the intention of stimulating worker effort. What seems
to occur is that employees associate the bonus more with job attendance or tenure than
with job performance. The closer rewards can be linked to performance the more effect
the rewards will have on task effort.
2. Reward high performance better than low performance and make these rewards visible
to all to see. This principle suggests that the ineffective workers acknowledge that the
effective workers are being rewarded handsomely. Only in this way will the ineffective
worker clearly realize that rewards are actually tied to performance in the organization. A
common error in organizations involves the inequitable distribution of a blanket salary or
“across the board” increase or bonus. For instance, in a secretarial pool of eight
employees, three are of high performance, three are of average, and two are of poor
performers. A blanket salary increase (not a cost-of-living increase) is awarded to all
eight secretaries. Equity theory would predict that the high performing secretaries will
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reduce both work quality and work quantity in order to attain equity and to reduce tension
caused by feelings of underpayment. The task performance of average and poor
performers will be reinforced, resulting in continued poor performance because behavior
which is reinforced tends to be repeated.
5. Goal Setting Theory
Dear Students: Instead of giving vague tasks to people, specific and pronounced
objectives, help in achieving them faster. As the clarity is high, a goal orientation also
avoids any misunderstandings in the work of the employees. The goal setting theory
states that when the goals to be achieved are set at a higher standard than in that case
employees are motivated to perform better and put in maximum effort. It revolves around
the concept of “Self-efficacy” i.e. individual’s belief that he or she is capable of
performing a hard task.
A research conducted by House and Mitchell (1974) on the “path-goal theory” represents
more specific notions of assumptions, perceptions and feelings as they apply to
motivation. They summarize the theory by: M  VXE
Where M is an individual’s motivation to behave in a certain way; V is the values a

person holds for a reward or outcome which may come as the result of the behavior (his
or her assumption or belief about the reward); and E is the expectancy (a combination of
assumption and perception) that the reward will be achieved if the behavior is carried out.
The expectancy part of this formula for motivation can be thought of as the probability
that the person implicitly places on the event that the reward in question will be
forthcoming. Thus, according to the path-goal formula, high motivation depends both on
a person holding a potential reward or outcome high in his/her beliefs and on believing
the reward will be forthcoming.
Activity 6.5
1. Explain how the value given to reward by the employee affects employee’s
performance?
2. Discuss by giving example the equity and goal setting theories of motivation
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Unit summary
Motivation is a complex problem in organization because the needs, wants, and desire of
each worker differ. They differ because each worker is unique in his biological and
psychological makeup and in his learning experiences. Motivation is either internal or
external, depending on where the action is initiated. Internal motivation originates within
the individual and was explained by Maslow’s hierarchy of needs theory and
McClelland’s achievement motive. External motivation builds on internal motivation and
depends on the motivational assumptions and techniques used by the manager. They are
explained by the theories of McGregor and Herzberg. It was shown that the theories of
Maslow, McGregor, Herzberg, Vroom and others approach motivation from a different
perspective, but they all emphasize similar sets of relationships.
Porter and Lawler hypothesize that performance leads to satisfaction via rewards and
place the major responsibility on the individual for his motivation. Although many
contributions have been made, a definitive theory of motivation remains to be developed.
1. According to Herzberg’ theory of motivation, motivational factors include:-
A. Achievement B. Recognition C. Advancement D. all
2. Which one is different? Identify.
A. salary B. job security C. personal growth D. work conditions
3. Which one of the following is true about assumptions of theory X?

A. Physical and mental effort at work is as natural as rest or play.
B. External control and the threat of punishment are not the only means for
bringing about effort toward organizational objectives.
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C. Employees inherently do not like work and whenever possible, will attempt to
avoid it.
4. Which one of the following is true about the assumptions of Maslow’s need hierarchy
of motivation?
A. Each person’s needs are arranged in a hierarchy of importance, ranging from
the lowest need.
B. Each person continually wanting, therefore, all needs are never fully satisfied.
C. Once a need is fairly well satisfied, it no longer motivated behavior.
5. People are motivated by their beliefs about the reward structure as being fair or unfair,
relative to the inputs. This issue is stated by what theory?
A. Equity theory C. Goal setting theory
B. Expectancy theory D. carrot and stick approach
Part II: Discussion Questions
1. Explain Maslow’s hierarchy of needs.
2. Discuss on carrot and stick approach of motivation.
3. List and describe on the 3 steps of motivation.
Reference:
 McFardland, Dalton L. (1974). Management: Principles and Practices. 4th ed.

New York: Mac Millan Publishing.
 Tripathi, P C and Reddy, P N . (1991) Principles of Management 2nd ed. New

Delhi : Tata MacGraw Hill.
 Laurie J. Mullins, Management and Organisational Behaviour (2nded.), Pitman.

 Fred Luthans, Organisational Behaviour (8thed.), Irvin/Tata McGraw Hill.
 Stephen P. Robbins, Organisational Behaviour (9th ed.), Prentice Hall India.
 Stephen P. Robbins, Mary Coulter, 2012, Management, 11th edition, prentice,
New Jersey.
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UNIT SEVEN: THE EMERGING TRENDS IN MANAGEMENT
Dear Students! This chapter is meant to acquaint you with the basic concepts of the
emerging trends in management. It focuses on the total quality management, six-sigma,
theory Z, and business process re-engineering. Thus, after going through the details of the
unit, you will be able to:
 understand the principles and practices of TQM
 analyze theory Z and it basic assumptions
 assess the characteristics of Six-Sigma;
 appreciate BPR and how does it differ from TQM
 identify the five step-approach to BPR.
Unit Introduction
Unleashing a continuous improvement initiative of some kind has become the norm for a
large cross section of organizations throughout the world today. The aim is often to
reinvent themselves as a cut above competitors, fine-tuned to customer needs and adapt
to changes in business conditions. A number of techniques and approaches can be used to
support to this process such as: SWOT-analysis, right-sizing, organization analysis and
review, Total Quality Management, Six Sigma, Reengineering, and etc. nevertheless, at
the heart of each of these programs remains the ultimate object of achieving break
through by fundamentally changing the way business is executed.
Change is a process, which progress over a period of time. Whilst change itself always
carries with it improbability, the process of change should be managed by an effective
plan, unambiguous rules, processes, and systems. In this unit we will discuss TQM, Six
Sigma, Theory Z, and BPR.
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7.1. Total Quality Management (TQM):
Activity 7.1 Dear students! Have you ever noticed QM in your organization or any
other organization you are familiar with? Please, list down your idea before you go
through the unit.
Any quality approach used by an organization must be treated as an organization change.

Success in implementing TQM and receiving a return on investment depends upon
understanding, positioning and managing TQM as a large-scale organizational change.
TQM does impact almost an organization’s entire component (work, people, structure,
culture values etc.). TQM focuses on customer’s needs and demands that the manager be
primarily accountable to the customer. Beside customer service, the essential of quality
management call for accurate management, continuous improvement, work relationships
based on trust and team work, and the support of upper management.
According to Fred Luthans, “TQM is an organizational strategy with accompanying

techniques that deliver quality products and/or services to customers.” Anandaram
(2001) on his part, sees TQM as “an integrated organizational approach for delighting the
customers (both internal and external) by meeting their expectations on a continuous
basis through everyone involved with organization working on a continuous
improvement in all products, services along with proper problem solving methodology.”
7.1.1 The Principal Tenets of Total Quality Management
Successful implementation of TQM programs requires a good understanding of the

guiding principles or tenets. While these principles may appear in different forms based
on the perception of the subject matter by different people and scholars, there is a
meeting of these principles: customer satisfaction. The common principles or tenets are
however discussed below.
First and foremost, Quality in everything: TQM directs the focus of any quality
conscious organization to the culture of quality in everything it does. Therefore, the
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principle of quality in everything requires that total quality must manifestly be the highest
priority of organizations. Such quality culture must not only be in the people within the
organization, it must extend to its processes, products or services. There must also be
perfect fit of these three organizational elements. Quality ensures customer’s loyalty,
profit, growth and survival.
Second, Customer Focus: A total quality organization must think and act from the
customer’s point of view. In fact, an organization points out (must recognize) that the
purpose of all work and all efforts to make improvements is to serve the customers better.
The customer expects quality in every aspect of a service such as delivery time, price,
integrity, courtesy and respect, empathy, error free, dependability and satisfaction.
Thus, all organizational efforts and resources must be directed at satisfying both the
internal and external customers in the short and in the long run. This calls for
development of proper and clear customers profile indicating who they are, where they
are, what they need, when they need it and how they need it. It also calls for a monitoring
mechanism to identify changes in customer’s requirement. A good strategy for keeping
competitors at bay is to be ahead of your customers by exceeding his requirements.
Third, the customer is the ultimate determiner of Quality: A product may meet all
specifications. However, if it does not provide the customers with the performance they
wish – if it is too complex, or expensive, or unattractive – then the quality test has been
flunked. “Listen to and learn from customers.”
Fourth, Quality should be built into the product early in the production process
(upstream) rather than being added on at the end (downstream): Many products and
services go through the stages of design, production, inspection, reworking (for
products), and then response to consumer complaints. The early, upstream stages of
design and production are the crucial ones. If the product or service is designed to be easy
to produce, and if those producing it have the training and incentives to maintain
consistently high quality, then downstream inspections, reworking, and responses to
consumer complaints are unnecessary. This saves money, but more importantly, it makes
the customer much happier.
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Fifth, preventing variability is the key to producing high quality: Slippages in quality
arise from too much variation in the product or service. As products and services deviate
from a desired norm, their dependability drops rapidly. Because preventing variability is
the most important path to quality, TQM’s most important tools are process control
charts. Such charts are used to track quality by charting a product’s deviation from the
optimum; these deviations are then categorized and analyzed.
Sixth, Quality results from people working within systems, not individual efforts:
When quality drops, it is almost always the system that is wrong, not the people. Because
it is the system working through committed people that produces results, it is a grave
mistake to focus on individuals.
Seventh, Quality requires continuous improvement of inputs and processes: Quality is

not a static attribute; it is a constantly changing target because it represents a delighted
(not just satisfied) customer. As the customer’s expectations rise, so must the product’s
quality. What is a high quality product today will not be one tomorrow. This belief leads
to the principle of ‘continuous improvement’ – every month new ways of improvement
must be considered and implemented.
Moreover, this continuous improvement should be directed not at outputs but at inputs
and processes that the manager can control. The business manager should stop focusing
on the output measure of profits, because profit is a short – term measure that can lead to
cutting corners. The manager should focus instead, according to TQM, on improving
organizational processes and inputs in order to improve quality because increased quality
will lead to customer loyalty, and long – range profits will inexorably follow
Eight, Quality improvement requires strong worker participation: Because quality

depends upon the production workers doing it right the first time and upon constant
improvement of inputs and processes, which only workers know intimately, worker
participation in the on-going improvement process is crucial. Managers and workers
should work together ‘without fear’ – without worrying that each mistake discovered will
be punished. They also need to work ‘without barriers’ – using matrix – like structures
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and quality circles to break down communication barriers between hierarchical levels and
between functional units.
Ninth, employee empowerment: For TQM to be successful, employees must be given the
opportunity to plan and carry out their own duties. It ensures that employees have
independent thought thereby promoting creativity and initiative in the application of skill
and experiences.
Tenth, Quality requires total organizational commitment: Quality is achieved only

when managers create an organizational culture that focuses on consistently producing
quality products and then on improving them every period. If this total commitment flags,
quality will drop off rapidly, and the organization will inevitably begin to slip behind
competitors. TQM requires all members of an organization to constantly change in order
to improve, even after achieving what seems to be a high standard of performance.
Eleventh, Investment in Training: Quality education is another imperative for the

success of TQM. Both the senior and junior employees must be enlightened and educated
on what TQM is all about. Ignorance of the subject matter of TQM should not be allowed
to thrive in an organization which is customer oriented. Employee enlightenment ensures
better commitment and success of TQM programs. Training also leads to increased
efficiency.
7.1.2 Approaches to Implementation of TQM
TQM is a management philosophy requiring a radical departure from established old

system that emphasized output to a new system of customer orientation. The focus on
customer satisfaction requires different managerial systems with unique organizing
principles. Thus TQM involves a change process that must be carefully implemented. In
general, the success of any planned TQM program is contingent upon a number of steps
that must be taken.
i) Get top Management Commitment and Leadership: The starting point of any TQM
program is to obtain the total support and commitment of top management to the changes
required. This support is perhaps the most critical for success because other members
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derive inspiration from top management. Top management must embrace the philosophy
of TQM and integrate this into the corporate strategy and must be able and willing to
carry other members along the TQM path.
ii) Develop Shared Values, Vision and Mission of what change is required: Once the
commitment of top management is obtained, it should develop the values, vision and
mission of the organization that will ensure proper focus and alignment of organizational
activities.
Iii) Carry out a Staff Attitude Survey: TQM requires a positive attitude on the part of
staff. It requires a change of attitude from “business as usual” to culture of quality. There
is therefore the need to find out the basic values, attitudes and behavior of staff and
confirm if these are in line with a culture of continuous quality or whether changes must
be made.
iv) Identify the Needs of Customers: The goal of TQM is customer satisfaction and to
achieve this you have to know what your customers want. The requirements of both the
internal and external customers could be obtained through a customer survey. The survey
should identify the factors that are important to the customers, how you are performing
on those factors, how your competitors are performing and what customers think about
you.
v) Set Objectives and Targets: Targets must be specified, quantifiable, achievable and
time - bound. In addition, objectives must be measurable, clear and understandable.
vi) Set Responsibilities / Structures: Good organizational structure that is responsive to

quality needs must be put in place. Such a structure must avoid unnecessary layering that
encumbers on communication and response rates.
vii) Set up Measurements: The quality of output should be measured and analyzed in
order to reduce the number of errors. Records of complaints and customer satisfaction are
good indicators of how you are performing in improving quality.
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7.1.4 Weakness of Total Quality Management
One of the important hindrances of TQM is top management resistance. The resistance,
according to Feinberg is grounded on three opposing principles of managers which are:
managers know better, the customer is not always right and not everything is a process
(in the TQM sense of the word). The major effect of the interplay of these three
principles is lack of commitment and purposeful leadership which TQM requires.
Inadequate preparation before the introduction of TQM program is another reason for
failure. TQM is a process requiring solid foundation in terms of planning and preparation
for its implementation. Many organizations ‘rush’ into TQM program enthusiastically,
without the requisite foundation, unfortunately, such organizations do not have the
patient to sustain their initial enthusiasm. The inadequate empowerment of employees at
all levels through training and development may cause TQM program to fail.
A poor communication strategy is another cause of TQM failure. Effective

communication is a necessary requirement for any TQM program. Information must flow
from top-down, bottom-up and laterally or crisscrossed. Where such free flow of ideas
and information is lacking, TQM program is impaired.
Lack of performance measures to evaluate progress can also lead to TQM failure. TQM
requires the spirit of teamwork and effective coordination of organizational efforts to
ensure that people are not working at cross purposes. Where this is lacking, TQM
program is highly jeopardized.
7.1.5 TQM in Ethiopian Public Service Organizations
In its unmodified or orthodox form, TQM is strikingly ill-suited to Ethiopian public

service. The use of TQM in Ethiopian public service has several major problems:
insufficient modification for services; insensitivity to the problems of defining
governmental customers; inappropriate emphasis on inputs and processes; and demands
for top-level intensity that can rarely be met by the governmental culture.
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1) Services versus Products: TQM was originally designed for routine processes such as
manufacturing, yet most government agencies produce services rather than products.
TQM remains much more difficult to apply to services because services are more labor
intensive and they are often produced and consumed simultaneously. This makes
uniformity of output more difficult, and it means that the consumer will evaluate the
service not only on the result but also on the behavior and even the appearance of the
person delivering it.
2) The Problem of Defining the Public Service (Government) Customer: In business,

the company can define its target customers; in public agencies, defining the customer is
a difficult and politically controversial issue.
3) Focusing on Inputs and Processes: Government has traditionally paid relatively little
attention to outputs for many reasons: outputs are politically controversial and difficult to
measure; legislators are primarily concerned about inputs such as budgets; bureaucratic
prestige often accrues from control of inputs, especially personnel; and legal
requirements often demand constant attention to strict procedural rules.
4) The Problem; of Political Legitimacy and Government Culture: The most basic
public – private difference that impedes participatory approaches like TQM is the
representative theory of democracy itself and the government culture that it has produced.
Employees are not supposed to participate in decision-making or have autonomy in
traditional democratic theory. That theory holds that the people elect legislators which
make policy and chief executives who implement policy through appointed officials.
These officials’ roles are to carry out day-to-day implementation, not influence policy.
Moreover, the mass media now clearly dominates political communication, and
significant financial resources are required to finance campaigns today. Moreover, the
turnover of elected officials does not create an environment in which the day to day
management of agencies receives high priority from elected officials.
5) Problem of Performance Measurement: The public sector lacks a clear single

criterion, like profitability, by which agency performance can be measured. This makes
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performance measurement (at both individual and organizational level) in the public
sector much more difficult.
7.2. Six- Sigma
The central idea behind Six Sigma is that if you can measure how many "defects" you
have in a process, you can systematically figure out how to eliminate them and get as
close to "zero defects" as possible. A defect is defined as any process output that does not
meet customer specifications, or that could lead to creating an output that does not meet
customer specifications. To achieve Six Sigma Quality, a process must produce no more
than 3.4 defects per million opportunities (DPMO). An "opportunity" is defined as a
chance for nonconformance, or not meeting the required specifications. Six Sigma's main
objective is to deliver high performance, value and reliability to the customer.
Different scholars define Six Sigma differently:
The UK Department for Trade and Industry defines Six Sigma as: "A data-driven
method for achieving near perfect quality. Six Sigma analyses can focus on any element
of production or service, and has a strong emphasis on statistical analysis in design,
manufacturing and customer-oriented activities." June 2005.
Motorola Inc., who first developed the methodology in the mid-late1980 and who
provide extensive Six Sigma training and consultancy services, provide the following
definitions at three different levels:
 As a metric
 As a methodology
 As a management system
Essentially, Six Sigma is all three at the same time.
"...Six Sigma as a Metric: The term "Sigma" is often used as a scale for levels of
'goodness' or quality. Using this scale, 'Six Sigma' equates to 3.4 defects per one million
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opportunities (DPMO). Therefore, Six Sigma started as a defect reduction effort in
manufacturing and was then applied to other business processes for the same purpose."
"...Six Sigma as a Methodology: As Six Sigma has evolved, there has been less emphasis
on the literal definition of 3.4 DPMO, or counting defects in products and processes. Six-
Sigma is a business improvement methodology that focuses an organization on:
 Understanding and managing customer requirements
 Aligning key business processes to achieve those requirements
 Utilizing rigorous data analysis to minimize variation in those processes
 Driving rapid and sustainable improvement to business processes."
"...Six Sigma as Management System: Through experience, Motorola has learned that
disciplined use of metrics and application of the methodology is still not enough to drive
desired breakthrough improvements and results that are sustainable over time. For
greatest impact, Motorola ensures that process metrics and structured methodology are
applied to improvement opportunities that are directly linked to the organizational
strategy. When practiced as a management system, Six Sigma is a top-down solution to
help organizations to align their business strategy to critical improvement efforts.
General Electric (GE), the first large-scale adopters and advocates of Six Sigma after
Motorola, and considered by most experts to have been responsible for Six Sigma's
rapidly achieved high profile, provide the following definitions of Six Sigma:"...Six
Sigma is a highly disciplined process that helps us focus on developing and delivering
near-perfect products and services.
The Six Sigma Methodology
The six sigma includes two key methodologies; DMAIC and DMADV. DMAIC is aimed
at improving an existing business process. There are 5 important steps included in
DMAIC. They are:
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 D - define goals to improve the overall process between your company strategy
and your customer's demands.
 M - measure your current processes. Collect relevant data on your current

processes and then use this data as a baseline for future comparisons.
 A - analyze your relationship within the process and verify cause-and-effect

relationships. It is important to understand the relationship to determine factors
that can ensure you keep your company’s strategy in line with your customer’s
demands.
 I - improve the process. It is important to constantly improve and optimize the

process, using analysis and other techniques.
 C - control the future state process to ensure that any deviations from target are
corrected before they result in defects. It is important to ensure that you can
control and correct any variances, avoiding possibly costly defects and loss of
quality.
DMADV
The DMADV project methodology, also known as DFSS ("Design for Six Sigma"), is
used when creating a new product or process designs. Using DMADV for new projects
can usually result in a more predictable process and ultimately higher quality product.
 D-define design goals that are consistent with customer demands and the
enterprise strategy.
 M-measure and identify characteristics that are critical to quality (CTQs),

capabilities producing a product, production process capability, and risks.
 A-analyze to develop and design alternatives create a high-level design and

evaluate design capability to select the best design.
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 D - design details. It is important not only to design a product, but optimize the
design features. In order to fully optimize a design feature, you may be required to
create multiple designs or simulations.
 V - verify the design. Important steps to verifying a design include setting up pilot
runs and running a short production. This step also requires you to handover the
design to process owners.
7.3. Theory Z
Theory Z is not a McGregor idea and as such is not McGregor's extension of his XY
theory. Theory Z (“Group Involvement”) places more reliance on the attitude and
responsibilities of the workers, whereas McGregor's XY theory is mainly focused on
management and motivation from the manager's and organization’s perspective (please
refer back XY theory from unit six).
One of the most important pieces of this theory is that management must have a high
degree of confidence in its workers in order for this type of participative management to
work. Ouchi explains that the employees must be very knowledgeable about the various
issues of the company, as well as possessing the competence to make those decisions. He
also points out; however, that management sometimes has a tendency to underestimate
the ability of the workers to effectively contribute to the decision making process. But for
this reason, Theory Z stresses the need for the workers to become generalists, rather than
specialists, and to increase their knowledge of the company and its processes through job
rotations and constant training. Actually, promotions tend to be slower in this type of
setting, as workers are given a much longer opportunity to receive training and more time
to learn the ins and outs of the company's operations.
Basically, Theory Z promotes employee participation in decision-making, thereby

increasing their motivation and productivity. This management style emphasizes long
range planning, consensus decision making, and neutral worker-employee loyalty. Ouchi
concludes that Japanese managers got more out of their employees than U.S. managers
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because the whole structure of Japanese society encourages mutual trust and cooperation.
This management philosophy is based on the following assumptions:
1. Workers have a very well developed sense of order, discipline, and a moral
obligation to work hard, and a sense of cohesion with their fellow workers.
2. Long term, even life time, employment is expected by both managers and
employees. Employees need freedom and opportunity to "grow."
3. Subordinates are whole people at work (in contrast to being thought of as titles or
units of production). Management has a broad concern for subordinate welfare.
4. Open communication, both vertically and horizontally, is the norm. Cooperation,

not competition, is the basis for relationships within the company.
5. There is complete trust among groups and individuals because they all have the
same goals - the good of the organization.
6. Workers have a high need to be supported by the company, and highly value a
working environment in which such things as family, cultures and traditions, and
social institutions are regarded as equally important as the work itself.
7.4 Business Process Reengineering (BPR)
Activity 7.2 Dear students! What do you understand about BPR? How it could be
practiced in your organization?
Re-engineering has been a popular activity and another name for making major
organization-wide improvement. These are decisions by management based primarily on
cost reduction and service improvement. It is a breakthrough redesign and process
improvement. That is, it is more than just business process improvement and structural
re-organization.
Different scholars define BPR in different ways. The classic definition of BPR is given
by Michael Hammer and John Champy 1992. They define BPR as, “the fundamental
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rethinking and radical redesign of business process to achieve dramatic improvements in
critical, contemporary measures of performance, such as cost, quality, service and speed.”
From this definition it is clear that BPR is an ongoing, iterative process itself requiring
strong commitment and vision from senior management.
7.4.1 How Does BPR Differ from TQM?
Activity 7.3 Dear students: How does BPR differ from TQM? What is the relation
between BPR and IT?
Davenport observed that quality specialists tend to focus on incremental change and
gradual improvement of processes, while proponents of reengineering often seek radical
redesign and drastic improvement of processes. He notes that Quality management refers
to programs and initiatives that emphasize incremental improvement in work processes
and outputs over an open-ended period of time. In contrast, Reengineering, also known as
business process redesign or process innovation, refers to discrete initiatives that are
intended to achieve radically redesigned and improved work processes in a bounded time
frame. Contrast between the two is provided by Davenport:
Improvement (TQM) Innovation (BPR)
Level of change Incremental Radical
Starting Point Existing Process Clean Slate
Frequency of Change One-time/Continuous One-time
Time Required Short Long
Participation Bottom-Up Top-Down
Typical Scope Narrow, within functions Broad, cross-functional
Risk Moderate High
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Primary Enabler Statistical Control Information Technology
Type of Change Cultural Cultural/Structural
7.4.2 Reengineering and Organizational Change
Dear students: BPR involves the total creative rethinking of one or more of company’s
key business processes. Hammer, in his landmark book, identified common themes found
in reengineered processes. Some of these include:
a) Several jobs are combined into one. Work normally performed by a number of
specialists in different functional departments can be performed by one individual or
team.
b) Workers make real decision. They have a full grasp of the entire process and can
take responsibility if a customer is dissatisfied. Creativity, ability to work independently
and a sense of responsibility are required attributes of this “new worker.” Managers are
more as coaches than “bean counters.”
c) Work is performed where it makes the most sense. A product development team,
for example, instead of being spread out over multiple locations and departments is now
under one roof or group. When a team member makes design changes those changes are
immediately propagated to other team members for review.
d) Checks and controls are reduced, reconciliation and the associated overhead is
minimized. For example, in the case of Ford Motor Company invoices are no longer
reconciled with what is shipped because a shipment is not received unless it agrees with
the original invoice. Further, suppliers are not paid until their parts are actually used in
production, thus forcing the supplier to deliver quality and to be in tune with Ford’s
production schedules.
e) A case manager provides a single point of contact. When a customer calls with a
complaint, one person is responsible and takes ownership for the resolution of that
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complaint. BPR involves significant organizational change and that managing the change
process must therefore be critical to the success of such undertakings with all its major
implications.
Cultural Change: many of the BPR writers address the cultural issues in different ways
but all are highlight the importance of the human factors in BPR implementation. At best
cultural aspects are seen as an enabler to be directed towards the organization’s new
goals, at worst as an inhibitor, to be neutralized, for example, through forced or coerced
redundancies.
Changing Role of Employees: reengineering also needs change in the behavior of

employees, their mindset, attitudes etc. Hammer & Champy’s “New World of Work” is
very much addressed to those that survive BPR, change their behavior and are self
managed. They shall be rewarded with more fulfilling work. They also advocate for
‘empowering staff’, encouraging ‘team working’, and developing a ‘communications
program’.
Changing Role of Leaders: despite a reduction in managerial layers there is still a role
for leaders: “the leader’s primary role is to act as visionary and motivator… from the
leader’s convictions and enthusiasm, the organization derives the spiritual energy that it
needs to embark on a voyage into the unknown … ambition, restlessness and intellectual
curiosity are the hallmarks of the reengineering leader”.
Work Redesign: reengineering leads to several changes in the job characteristics of

employees Mainly because of two reasons: 1) reengineering requires employees to use a
wider variety of skills to perform their jobs; and 2) reengineering typically results in
downsizing and short term periods of understaffing. However, any attempt to change jobs
frequently very often leads to a diminution or even a reversal of anticipated outcomes.
7.4.3 Is there a BPR Methodology?
The BPR methodology comprises of:
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i) Developing the Business Vision and Process Objectives: BPR is driven by a business
vision which implies specific business objectives such as Cost Reduction, Time
Reduction, Output Quality improvement, QWL (Quality of Work
Life)/Learning/Empowerment.
ii) Identify the Processes to be Redesigned: Most firms use the High- Impact approach
which focuses on the most important processes or those that conflict most with the
business vision. Lesser number of firms uses the Exhaustive approach that attempts to
identify all the processes within an organization and then prioritize them in order of
redesign urgency.
iii) Understand and Measure the Existing Processes: For avoiding the repeating of old
mistakes and for providing a baseline for future improvements.
iv) Identify IT Levers: Awareness of IT capabilities can and should influence process
design.
v) Design and Build a Prototype of the New Process: The actual design should not be
viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with
successive iterations. The metaphor of prototype aligns the BPR approach with quick
delivery of results, and the involvement and satisfaction of customers.
Why BPR Projects Fail?
Studies show that most of the BPR projects fail. Biggest obstacles that reengineering
faces are: (i) Lack of sustained management commitment and leadership; (ii) Unrealistic
scope and expectations; and (iii) Resistance to Change.
7.5 The balanced scorecard (BSC model)
Objective setting is not an isolated process. As has already been discussed there is a need
for managers to know the key criteria by which their performance against objectives will
be measured. There is a clear link between setting objectives and the setting of
performance measures. The balanced scorecard (Kaplan and Norton, 1992, 1993) is an
136
approach that more clearly links these two activities. Kaplan and Norton suggest that a
balanced set of objectives should be created and at the same time a coherent set of
performance measures should be developed alongside them.
At the core of the balanced scorecard approach is the belief that managers have to
be able to look at a business from four key perspectives:
1. Customer perspective: How customers see a business is critical, but financial
measures alone do not provide this view. Customers are generally concerned with,
quality, performance, service and time. For each of these categories the organization
should develop objectives and performance measures. Obviously how these categories
are defined has to be from the customer’s perspective. This will allow the organization to
track how customers view the business overtime.
2. Internal perspective: Managers have to identify the critical internal processes that
will allow them to satisfy customer needs. Identifying the processes that are important to
customer satisfaction allows managers to identify the functions and competencies in
which they need to excel.
3. Innovation and learning perspective: An organization’s ability to create value is
inextricably linked to its capacity to continually improve through innovation and
learning.
4. Financial perspective: This allows the organization to see how the business looks
from the shareholders point of view. This financial performance measures the success,
not only of an organization’s strategy, but also of its implementation.
The balanced scorecard widens the view managers have of the business rather
than concentrating purely on financial criteria. For each of these perspectives the
organization has to create distinct objectives and at the same time develop the
accompanying performance measures. This process also forces managers to understand
many complex relationships and to surmount some of the traditional functional barriers
that hamper strategic development (see Figure).
137
Figure: The balanced scorecard (Source: Adapted from Kaplan and Norton, 1992, 1993)
The balanced scorecard approach also addresses one other potential problem that
of ensuring consistency between objectives. This can be difficult in practice
because objectives are formed in a range of areas, at different levels and on
different time scales (effectively objectives are formed both horizontally and
vertically through the organization).
138
Unit Summary
The challenge of implementing the change process is as immense as the challenge of

creating innovative business process solutions. “Change brings renewal…but change
brings destructions as well. To the extent it generates fear and cynicism, it not only halts
progress, it takes us backward.” Implementing process change requires a powerful
combination of “soft” skills and “hard” skills: Soft skills include leadership, coalition
building, internal sales and communication, conflict management; and hard skills include
strategic planning, project management, and organizational alignment. Incorporation of
both these hard and soft skills will help to win widespread support for process changes
and methodologies to execute the solution effectively.
1. Which one of the following is not the principle of TQM?
A. Quality in everything
B. customers focus
C. Continuous improvement
D. none of the above
2. The starting point of any TQM program is
A. Set up measurement B. set responsibility
C. Get top management commitment D. investment in training
3. Which one is the weakness of TQM?
A. Top management resistance
139
B. inadequate preparation
C. poor communication
D. All of the above
4. Sigma is a business improvement methodology that focuses an organization on:
A. Understanding and managing customer requirements

B. Aligning key business processes to achieve those requirements
C. Utilizing rigorous data analysis to minimize variation in those processes
D. Driving rapid and sustainable improvement to business processes.
E. All
5. Which one of the following is true statement?
A. Six Sigma is a data-driven method for achieving near perfect quality.

B. TQM does impact almost an organization’s entire component
C. Theory Z places more reliance on the attitude and responsibilities of the
workers
D. BPR is an ongoing, iterative process itself requiring strong commitment
and vision from senior management.
E. All
Part II: Discussion Questions
1. Discuss the TQM in Ethiopian public Service.
2. What kind of role does BPR play in bringing about change in organizations?
Illustrate with reference to an organization where this process was used and was
successful.
140
Reference:
 Aubrey, Charles A., and Falkins, Patricia K., 1988, Team Work: Involving people
in Quality and productivity improvement, Quality Press: NY
 Beckhard, Richard and Harris, Rellben T., 1977, organizational transitions:

Managing Complex Change, Eddison-Wisley publishing company
 Chandler, Alfred D., Jr., 1962, Strategy and Structure, the M.I.T. Press ,
Cambridge
 Hammer, Michael and Champy, James, 1993, reengineering the corporation,

Harper Business, New York
 Oakland, J.S., 1989, total quality management, Heinmann professional, London
 Fred Wthons, organizational behavior, McGraw Hills
141
142
Key Answer for self-check Exercise
Answer for self-check Exercise Unit- One
Part I Multiple choice key answer
1. E
2. E
3. E
Part II Discussion key Answers
1. Theory is a principle or set of principles that explains or accounts for the relationship
between two or more observable facts or events. Management theory is important
because it is the study of how to make all the people in your organization more
productive. Beside to this theory is used as a guide line for decision making and other
major activities of management function.
2. It is obvious that management is practiced as far as the creation of human being. The
history of Babylon, Israel (Mosses), the Roman Empire, Greek, China and the like
triggers the practice of management.
3. The major forces which may backing management thought are: political forces
manifested through the administration of political institutions and government agencies,
social forces like the values and beliefs of a particular culture of people and economic
forces which determine the scarcity, transformation and distribution of goods and
services in a society.
Answer for self-check Exercise Unit- Two

Part I Multiple Choice answer Key Answer
1. E
2. E
3. A
4. E
5. A
143
Part II Discussion key Answers
1. Yes. The early management pioneer like Robert Owen, Charles, Metcalfe and
Henry Towne has contributed much on construction of solid mettle on
management concept in providing virtual framework of:
- Analytical machine contributed by Charles Babbage
- Qualities human resource is worth investing than machine by Robert Owen
- New system of control including time card and material card provided by
Metcalfe
- Henry Towne main emphasis is on exchange of experience between workers,
managers of several companies and different places.
2. Likert is best known for his classification of management styles in to four
categories:
System1 (exploitative autocratic). Leaders have no confidence or trust in

subordinates. Subordinates are deprived of participation in decision making.
System 2 (benevolent autocratic). Management has condescending confidence in

subordinates just as a master has towards a servant.
System 3 (Participative). Leaders have substantial but not total confidence in

subordinates. Participation is meaningful and employees are permitted to participation
in decisions affecting their lives.
System 4 (democratic). Participation is meaningful, as leaders have complete

confidence and trust in subordinate.
3. The main points of his intellectual thinking are:
 Engineers should inculcate cost-consciousness.
 Thee is a necessity for the people to assemble and create a platform for
exchanging their views and experiences on managing the organizations.
144
 All engineer-managers must be aware that management is a multi-faceted
concept.
4. Gilbreths had contributed in
- working on time and motion studies

- elimination of wasteful hand and body motions
- developed a particular technique that tripled the amount of work a bricklayer
could do in a day
Answer for self-check Exercise Unit- Three

1. E
2. E
3. E
4. A
5. B
6. E
7. D
8. D
9. E
Part II Discussion Key Answers
14. The main aims of scientific management are:
a) Gauge industrial tendencies and the market in order to regularize operations.

Assure that employee not only continuous operating and employment by correct
gauging the market , but also to assure by planned and balanced operations a
continuous earning opportunity while on the payroll.
b) Earn through a waste-saving management and processing technique.
145
c) Assure a happier home and social life to workers through removal, by increase
of income of many of the disagreeable and worrying factors in the total situation.
d) Assure healthful as well as individually and socially agreeable condition of

work.
e) Assure the highest opportunity for individual capacity through scientific ways
of work analysis and of selection, training, assignment, transfer and promotion of
workers.
f) Develop self-confidence and self-respect among workers.
g) Develop self-expression and self-realization among workers.
h) Build character through the proper conduct of work.
i) Promote justice through the elimination of discrimination in wage rates and

elsewhere.
j) Eliminate factors of the environment which are irritating and the causes of
frictions, and to promote common understanding, tolerances and the spirit of team
work.
15. Fayol favors stability of tenure of personnel to ensure smooth running of an

undertaking. He holds that “instability of tenure is at one and the same time
causes and effect of bad running”. In discussing this principle, Fayol deals more
with tenure as a technical prerequisite for learning a job than as an answer to inner
emotional needs.
16. Taylor saw scientific management as a “mental revolution” in which a scientific
approach could be brought to bear not only on the performance of physical task
but on all social problems.
17. The main characteristics of bureaucratic organization are: Bound by rules, A
sphere of competence, Impersonal detachment, Keeping records, Career service
and The non-bureaucratic head.
146
18. Taylor recognizes the need for good supervision of worker. For this need he
expands his concept of functional foremanship. Taylor felt that under the previous
practices a military type of organization had prevailed, stressing unity of
command at each level of the organization. Under this arrangement, foremen were
often hired on a contract basis and simply charged with getting the work done,
with little direction from the management. In contrast to Taylor’s functional
authority, Fayol maintains that “an employee should receive orders from one
superior only”. According to him: “A body with two heads in the social as in the
animal sphere a monster and has difficulty in surviving”.
Answer for self-check Exercise Unit- Four

1. E
2. B
3. B
4. A
5. E
1. Mayo emphasized that management must develop a new concept of authority and
foster a new social order based on the individual’s cooperative attitude.
2. The major limitation of the Hawthorne study are: They have failed in developing an
integrated theory of management as they have followed only the basic background laid
down by classical theorists and their style was unethical as they use human beings as an
experimental unit in a laboratory.
3. The major findings and generalizations of the Hawthorne studies: The output or the
amount of work of a worker is not determined by his physical capacity but by his social
capacity, Non-economic rewards and sanctions significantly affect the worker’s behavior,
A worker often does not act or react to management as an individual but as a member of
147
groups and Communication, participation, and leadership play a central role in worker’s
behavior. The significance of the Hawthorne investigation lay in discovering the informal
organization which it is now felt exists in all organizations. It confirmed Mayo’s earlier
view that what he calls the ‘rabble hypothesis’ about human behavior (that is, each
individual pursues his own rational self-interests) was false.
Answer for self-check Exercise Unit- Five

1. D
2. A
3. E
4. A
5. C
1. An open system is one which interacts with the environment in which it exists. The
environment itself consists of social, economic, political, and legal sub-systems which
may have an impact on the organization.
2. An organization may have different management approach. In different situation it

may follow different approach of management like contingency, quantitative, system
approach and the like which are suitable for it to achieve its stated objective.
Answer for self-check Exercise Unit- Six

1. D
2. C
3. C
4. D
5. A
148
1. Maslow’s hierarchy of needs provides both a theory of human motives by

classifying basic human needs in a hierarchy and a theory of human motivation
that links these needs to general behavior. Maslow viewed an individual’s
motivation as a predetermined order of needs.
2. The various leading theories of motivation and motivators seldom make reference
to the carrot and the stick. This metaphor relates, of course, to the use of rewards
and penalties in order to induce desired behavior. It comes from the old story that
to make a donkey move, one must put a carrot in front of him or dab him with a
stick from behind. At the same time, in all theories of motivation, the inducements
of some kind of ‘carrot’ are recognized. Often this is money in the form of pay or
bonuses. Even though money is not the only motivating force, it has been and will
continue to be an important one.
3. I. An unsatisfied need: - is the starting point in the process of motivation. It
is the deficiency of something within the individual, and the first link in the chain
of events leading to behavior.
II. Goal directed behavior: - the unsatisfied need causes tension (physical or
psychological) within the individual, leading the individual to engage in some
kind of behavior. Thus, goal-directed behavior revolves around the desire for need
satisfaction.
III. Need satisfaction: - achieving the goal satisfies the need, and the process
of motivation is complete.
Answer for self-check Exercise Unit- Seven

1. D
2. C
3. D
4. E
5. E
149
1. In its unmodified or orthodox form, TQM is strikingly ill-suited to Ethiopian

public service. The use of TQM in Ethiopian public service has several major
problems: insufficient modification for services; insensitivity to the problems of
defining governmental customers; inappropriate emphasis on inputs and
processes; and demands for top-level intensity that can rarely be met by the
governmental culture.
2. Theory Z is not a McGregor idea and as such is not McGregor's extension of his
XY theory. Theory Z (“Group Involvement”) places more reliance on the attitude
and responsibilities of the workers, whereas McGregor's XY theory is mainly
focused on management and motivation from the manager's and organization’s
perspective. One of the most important pieces of this theory is that management
must have a high degree of confidence in its workers in order for this type of
participative management to work.
3. Studies show that most of the BPR projects fail. Biggest obstacles that
reengineering faces are:
(i) Lack of sustained management commitment and leadership;
(ii) Unrealistic scope and expectations; and
(iii) Resistance to Change.
150
Bibliography:
 Andrew J. Dubrin : Essential of Management , (2010) Cengage learning Ltd,
ISBN:978-0-538-47823-3, pp 1-669.
 Arun Kumar and R. Sharma, Principles of Business Management
 Aubrey, Charles A., and Falkins, Patricia K., 1988, Team Work: Involving people in
Quality and productivity improvement, Quality Press: NY
 B.P. Singh, Business management and Organization
 Basu C. R., Business Organization and Management, 2nd Edition, Tata McGraw-Hill
Ltd.
 Beckhard, Richard and Harris, Rellben T., 1977, organizational transitions: Managing
Complex Change, Eddison-Wisley publishing company
 Brech, E. F. L., Organization: The Framework of Management, 2nd Edition,
Longman.
 Brech, E. F. L., Organization: The Framework of Management, 2nd Edition,C. K.
Prahalad : The Fortune AT The Bottom of the Pyramid, (2006) Pearson Education
Ltd, ISBN 0-13-187729-1.
 Chandler, Alfred D., Jr., 1962, Strategy and Structure, the M.I.T. Press , Cambridge
 Davis, Keith and Newstrom, John W. (1989). Human Behaviour at Work:
Organizational Behaviour. 3rd ed. New York: McGraw Hill Book Company Delhi :
Tata MacGraw Hill.
 Earnest R. Hilgard and Gordon Power, Theories of Learning, Prentice Hall.
 Elton Mayo, the Human Problems of an Industrial Civilization, Macmillan Publishing
Company, New York.
 Ernest Dale. 1981 “Management. Theory and Practices.” McGraw Hill Inc. New
York,
 Fred Luthans, Organisational Behaviour (8thed.), Irvin/Tata McGraw Hill.
 Hammer, Michael and Champy, James, 1993, reengineering the corporation, Harper
Business, New York Hill Ltd.
 Homans G. C. (1958) The Human Group(New York: Harcout, Brace and World).
 http://www.businessdictionary.com
 http://www.investorwords.com
151
 ICFAI, “Introduction to Management” - Published by center for Management
Research.
 J.S. Chandan, Management concept and Strategies
 Jayanta K. Nanda : Management Thought, Sarup & Sons, (2006) New Delhi.
ISBN:81-7625-623-4, 1-313.
 Karam Pal (PhD), Management concepts and organizational behavior, module for
University of India, lecture notes, lesson # 01 subject code; MC-101
 Keith Davis, Human Behaviour at Work, Tata McGraw Hill, New Delhi.
 Kootnz and O’ Donell, Principle of management
 L. M. Prasad (1995) : Principal and Practice of Management, Sultan Chand & Son.
 Laurie J. Mullins, Management and Organisational Behaviour (2nded.), Pitman.
 Louis A. Allen, Management and Organisation, McGraw-Hill Kogakusha, Ltd.
 McFardland, Dalton L. (1974). Management: Principles and Practices. 4th ed.
 Meenakshi Gupta : Principle of Management, PHI learning limited, (2008) New
Delhi. ISBN:978-81-203-3527-1, pp 1-271.New York: Mac Millan Publishing.
 Oakland, J.S., 1989, total quality management, Heinmann professional, London
 Principles of Management – module for university of Pakistan MGT503
 Robbins Stephen P. and Decenzo David A., Fundamentals of Management, 3rd
 Robbins Stephen P. and Mary Coulter, Management, 2002, Prentice Hall of India.
 Sherlerkar, Principles of Management
 Stephen P. Robbins, Mary Coulter, 2012, Management, 11th edition, prentice, New
Jersey.
 Stephen P. Robbins, Organisational Behaviour (9th ed.), Prentice Hall India.
 Tripathi, P C and Reddy, P N . (1991) Principles of Management 2nd ed. New
 Virtual University of Pakistan, principle of management, module mgt 503
 Zelalem L., Introduction to Management: Lecture notes, Rift valley university
college, Department of Management.
152
WOLKITE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
CONTINUING EDUCATION PROGRAM
DEPARTMENT OF MANAGEMENT
Module Code: MGMT-M1061
Course Name: Management Thought
Course Code: (MGMT 1062)
Course Credit: 3hrs (5ECTS)
Assignment
Instructions:
This booklet has Four parts. Part I consists of 10 true/false questions, Part II consists of
10 multiple-choice questions. Part III consists of 10 matching questions and Part IV
consists of 5 discussion questions and all of the questions are compulsory and will be
marked. Thus, you are expected to submit to the Department directly. Dear student, it is
obligatory for you to strictly observe and follow specific instructions supplied for each of
the three parts included in this booklet and requirements of every question. You are
strongly recommended not to attempt the questions prior to a thorough study of the
course material and attempting review questions provided therein.
Name: ______________________________________________
Id. No.: ______________________________________________
College: ________________________________________
Department: ________________________________________
153
Part I
Instruction: Say true or false for the following questions (1 point each)
__________1.The Z theory promotes Employee participation in decision making, thereby

increasing their motivation and productivity.
__________2.Taylor characterizes initiative and incentive management as a “lazy

worker’s philosophy”.
__________3.Although Taylor stresses cooperation in the workplace; authority is not to

be shared equally by management and the workers.
__________4.BPR is an organizational strategy with accompanying techniques that

deliver quality of products and service to the customer.
__________5.Fayol holds that “instability of tenure is at one and the same time causes
and effect of smooth running”.
__________6.Weber maintains that domination is a subset of the phenomenon of

‘power’.
__________7.Bureaucratic management focuses on the ideal form of organization.
__________8.Elton Mayo was more concerned with relationship between organization

and members than efficiency and productivity.
__________9.The socio-technical systems approach is based on the premise that every

organization consists of the people, the technical system and the environment.
__________10.The situational approach is based on the belief that there cannot be

universal guidelines which are suitable for all situations.
154
Part II:
Instructions: Choose the best answer for the following questions (1 point
each)
______1. Taylor’s major works include all but:
A. Shop management
B. Principle of scientific management
C. Old patterns of management and human organization
D. Testimony before the special house committee. E. None of the above
_____2. As to Taylor, methods of development of shop system include:
A. use of scientific research methods
B. Standardization of tools and materials
C. Selection and training of workers
D. Payment in accordance with output E. All
____3. Time motion study of Taylor’s approach involves:
A. An allowance for rest and unavoidable delays
B. Dividing the task in to elementary units
C. Discarding useless movements
D. Providing good implements to the work E. All
____4. Which one of the following is the obstacle of implementing BPR?

A. Resistance to Change
B. Unrealistic scope and expectations
155
C. Lack of incentive
D. All
E. None of the above
____5. Charles Babbage work does not include:
A. He was among the first few who laid the foundation for formulating scientific
management
B. He invented analytical engine
C. He was a pioneer in operations research
D. Emphasize on division of labor based on skill E. None of the above
____6. An employee should receive orders from one supervisor is related to

______principle.
A. unity of direction
B. Centralization
C. Decentralization
D. Unity of command E. None
____7. Fayol contribution to the development of management discipline includes all but:
A. universality of management
B. Coming up with comprehensive theory of management
C. pursued the need of teaching management in university curricula
D. All E. None of the above.
____8. Which one of the following is a not major finding of the Hawthorne Studies?
A. The output or the amount of work of a worker is not determined by his social
capacity but by his physical capacity.
156
B. Non-economic rewards and sanctions significantly affect the worker’s
behavior
C. A worker often does not act or react to management as an individual but as a

member of groups.
D. Communication, participation, and leadership play a central role in worker’s

behavior.
E. None
____9.Which one of the following is a correct sequence of what was conducted in

Hawthorne studies?
A. Bank wiring observation room-----relay assembly test room experiment---- the

interviewing program-------the illumination experiments
B. Illumination experiments --------relay assembly test room experiment---- the
interviewing program------- bank wiring observation room
C. The illumination experiments --------bank wiring observation room----relay
assembly test room experiment ------- the interviewing program-------bank
wiring observation room.
D. None of the above.
____10. ______ focuses on improving decision making via the application of quantitative
techniques.
A) Quantitative approach
B) Contingency approach
C) Socio-technical approach
D) System approach
157
Part III
Instructions: Match the following terms with their respective

explanation (0.5 point)
a. Feudal form g. Initiative

b. Authority system h. Order
c. Charismatic authority i. Unity of direction
d. Traditional authority j. Experiment
e. Legal-rational authority k. Unity of command
f. Equity l. Special knowledge
___________ 1.The officials have much more authority with their own sources of income
___________2.Orders are voluntarily obeyed by subordinates
___________3.The leader is constrained only by his personal judgment
___________4.The mode of exercising authority is based on precedent and usage.
___________5.Obedience is to the rules
___________6.The result of “the combination of kindliness and justice”
___________7.Great source of strength for business
___________8.The right man should be at the right place
___________9.One head and one plan for a group of activities having the same objective
___________10.Knowledge arising from the work involved.
158
Part IV:
Instructions: discussion the following questions (1 point each)
1. Compare and contrast Taylor and Fayol approaches to management.

2. Explain on management Theory and its significant.
3. Compare and contrast Equity and Expectancy theory.
4. Discuss on the concepts of Total quality management and its weaknesses
5. Discuss on the systems approach to management with their components?
159

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WOLKITE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

 The development of management as a function in modern enterprises; differing

 Manufacturing in mass production environments; the nature and problems of

 Past and contemporary issues in the management of employees

 The changing context of employment and the future of work

Module Introduction ....................................................................................... ii

UNIT ONE: EVOLUTION OF MANAGEMENT............................................ 1

Unit Introduction ............................................................................................ 1

1.1 What Is Theory? ........................................................................................................ 1

Self –Check Review Questions ...................................................................... 10

UNIT TWO: FORERUNNERS TO SCIENTIFIC MANAGEMENT ............. 12

Self –Check Review Questions ...................................................................... 21

UNIT THREE: THE ERA OF CLASSICAL MANAGEMENT ...................... 24

Unit Introduction .......................................................................................... 24

3.1 Frederick W. Taylor: The Scientific Theory of Management ................................ 25

Self –Check Review Questions ...................................................................... 68

UNIT FOUR: ELTEN MAYO: THE HUMAN RELATIONS APPROACH... 71

Unit Introduction .......................................................................................... 71

4.1 Social Disorganization and Social Malaise............................................................. 72

Self –Check Review Questions ...................................................................... 82

UNIT FIVE: THE MODERN ERA ................................................................ 85

Unit Introduction .......................................................................................... 85

5.1. Characteristics of Modern Approaches to Management ........................................ 86

Self-Check Review Questions........................................................................ 96

UNIT SIX: THEORIES OF MOTIVATION .................................................. 98

Unit Introduction .......................................................................................... 98

Self-Check Review Questions...................................................................... 118

UNIT SEVEN: THE EMERGING TRENDS IN MANAGEMENT .............. 120

Unit Introduction ........................................................................................ 120

7.1. Total Quality Management (TQM):..................................................................... 121

Self-Check Review Questions...................................................................... 139

Reference: ................................................................................................... 141

Key Answer for self-check Exercise............................................................ 143

Answer for self-check Exercise Unit- One ................................................................. 143

Assignment .................................................................................................. 153

Objectives of the Unit

After a thorough study of this unit, you will be able to:

 Understand what a theory mean

 Know management theory’s role and importance

 Develop know-how about historical evidences for the existence of management in

 Have a glimpse of theories in management

1.1 What Is Theory?

The theories and principles of management makes it easier for us to understand

1.2 Management Theory's Role and Importance

Activity 1.1. What is the importance of studying management thought?

The key to business management is to maximize productivity. However, while

 The exodus of Israelites (biblical evidence)

 Span of management based on ordinances and laws was exercised

 The Ancient Egypt

 Development of control mechanism: If a merchant lend to an agent and the agent

1.4 Practices in Management

Objective of the topic

Dear Students: The purpose of this lecture is to demonstrate that knowledge of

Management’s Connection to Other Fields of Study

A. Anthropology—the study of societies, which helps us learn about humans, their

B. Economics—concerned with the allocation, distribution of scare resources, and

C. Philosophy—examines the nature of things, particularly values and ethics.

D. Political Science—studies the behavior of individuals and groups within a political

E. Psychology—science that seeks to measure, explain, and sometimes change the

F. Sociology—the study of people in relation to their fellow human beings.

1.5 Theories in Management

1.6 Forces Backing Management Thoughts