ETCM BBA SEM-2 2021

Unit-1

Schools of Management Thoughts and Modern

Management

Q-1 Give the brief idea about management schools.

Ans.

❖ Introduction:

The purpose of studying various schools of management thought is to enable

you to recognize and appreciate how developments in the field of management
could contribute to current practices. An examination of these past and present
approaches can help to discover the strengths and weaknesses of current
managerial practices and finally enable you, as a potential manager of an
information centre, to choose appropriate management styles. During the brief

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history of management as a discipline a number of more or less separate schools

of management thought have emerged, some broad, some narrow in scope, and
some quite specialized. Each sees management from its own viewpoint; none is
comprehensive. These viewpoints can provide several perspectives. Firstly,
people are at the helm of affairs and people are of prime importance, in all
thinking about management. There have been different views about the nature
of people’s impact on organizations. Secondly, there were some historical
settings in which certain ideas and approaches developed. Similar conditions
may or may not be present today. Thirdly, there are many theories and
approaches to management and each has some utility and some limitations.
Hence, there is no single ‘best’ theory of management.

❖ History of Management Schools:

The history of management extends to several thousand years into the past.
However, it is only since the late 19th century, that management is considered a
formal discipline. In other words, the practice of management is as old as the
human race but its theories and conceptual frameworks are of recent origin. Yet
most of the contemporary management thoughts are a twentieth century
phenomenon.

Management ideas were also developed in China, Greek and Roman empires in
the Middle Ages. Venice, which was known for its fighting power and
production facilities, has been found to have used assembly-line techniques to
outfit galley ships to go to wars during the 15th century.

Later, in the Age of Enlightenment and Renaissance, change of societal values,

human worth and individual knowledge, ability, skill and accomplishments
were acknowledged, but these alone were not enough to be a manager.
Industrialism and the factory system of the early 19th century saw the use of
management skills, assembly line operation and costing systems.

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❖ Classification of Management Theories:

During the history of management a number of more or less separate schools of

management thought have emerged, and each sees management from its own
viewpoint. Thus there are many ways of classifying management theories.
Koontz’s has classified the management theories into the following six groups:

1. The Management Process school

2. The Empirical School

3. The Human Behavioural School

4. The Social System School

5. The decision Theory School

6. The Mathematical School

Adding one more style or approach of his own Evans discusses eleven basic
styles cited by Herbert hicks in his hooks “the management of organizations”
(1967). Again leaving the early perspectives, Hitt and others (1979) classify
management theories into three broad groups.

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(i) Classical
Management Theory

(ii) Neo Classical

Management Theory

(iii) Modern
Management Theory

Under each group a few schools of thought are identified. These three groups of
schools of management thought, are currently in vogue and found adequate for
the purpose.

Q-2 Explain Scientific Management Thoughts in detail.

Ans.

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It is an approach that focuses on improving the efficiency of the worker through

scientific way of working. Frederic Winslow Taylor is considered as a real
father of this approach. Other contributors were frank Gilbreth, Lillian Gilbreth
and Henry Gantt.

Taylor joined Midvale Steel Company - USA as a worker and become a

supervisor. His qualification was M.E. He has also worked at Bethelehan Steel
Company. He performed a number of experiments on improvingthe working
efficiency of the people. He has also written a book, “Scientific Management”
which includes his experiments and principles.

❖ Features of Scientific Management:

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1. Separation of planning from actual

doing work

2. Functional Foremanship

3. Job Analysis

4. Scientific Selction and training of

workers

5. Monetary Benefits

6. Economy & profit

7. Co-operation through mental revolution

1. Separations of Planning from actual doing work:

Taylor advocates that a worker should be free from planning aspects. Planning
task should be performed by supervisors and managers. A worker has to
concentrate on his performance at work. Earlier, the worker used to perform
both the tasks - planning and actual work. This created many problems and
difficulties for workers.

2. Functional Foremanship:

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Taylor wants to strengthen his first principle of separation of planning. That is

why he has formulated the functional foremanship. The foremanship was based
on specialization of different functions performed by workers and foreman.

3. Job analysis:

Taylor suggests the concepts of job analysis for finding out the time study
includes calculation of the exact time required to perform a job. He Suggested
the concept of time- motion and fatigue study for the purpose job analysis.

• Time study includes calculation of the exact time required to perform a

job. It will carry the calculation of determining the fair work for a
period.
• Motion study is involved in the study of movements performing a job. It
involves the study of eliminating unnecessary movements and
performing only necessity movements.
• Fatigue study is involved in deciding the rest time and the frequency of
rest period for workers. The purpose is to maximum efficiency from
worker's standardization.
• Standardization should be maintained with respect to work, time period,
resources and equipment's working conditions, etc.

4. Scientific selection and training of workers:

Taylor advocates that selection of workers should be made on a scientific basis

by considering their work experience, qualification skill and knowledge,
physical ability, etc. In addition to that, the superior should focus more on
worker's training for improving their efficiency.

5. Monetary benefits:

Taylor suggested that monetary benefits can be used as a source of motivation

for workers. He also provides a system of differential piece rate system. In this
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system, wages are provided on the basis of worker's performance and not on his
status and position in the organization.

6. Economy and Profit:

Taylor also gave due attention on the control technique for reducing costs and
wages for better economy and profits. Proper and efficient use of available
resources is also necessary.

7. Co-operation through mental revolution:

This is the most important feature of scientific management to establish co-

operation between management and workers. It is to be achieved by mental
revolution towards their duties / responsibilities, sub - ordinates, superiors and
management as a whole.

❖ Principles:

The principles of scientific management are:

1. Replacing rule of thumb with science:

Taylor advocates the work approach scientific way by standardization,

differential piece rate system etc. instead of rule of thumb (means work through
estimates).

2. Harmony:

Taylor gives more focus on group harmony in such a way that win - win
conditions can be developed among group members.

3. Co - operation:

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Taylor suggested that co - operation can only be achieved through mutual

understanding.

4. Maximum results:

Taylor emphasized on increasing the scale of the performance of the

organization, and remove the inefficiency in performance. In this way,
performance of the organisation will definitely improve.

5. Worker's Development:

Taylor suggested that development of workers can be possible through

scientific selection and through training.

Taylor, scientific management thought was being opposed by trade unions,

management and general public also. Managers thinking was that, this
approach is of old style of working. But with the same, this approach provides
a good direction to Henry Gantt, Frenk and Lillian Gilbreth, Edward and Carl
George Berth.

❖ Criticisms:

1. It is only concerned with technical and manufacturing aspects and not with
human aspects like health and physical fitness of the workers. It is concerned
with increasing the productivity of the workers. It does not touch areas like
sales, accounting, etc.

2. Financial incentives and wages are not matched with the techniques of
production. The methods used in manufacturing like motion study, time study
etc. were not tested scientifically.

Q-3 “Henry Fayol is considered as a real father of management.” – Explain

this statement with respect to Administrative Approach.

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Ans.

French industrialist Henry Fayol who is considered as a real father of modern

management provides "Administrative Approach" in his book Administration
Industrially at General '- 1916. This approach primarily focuses on principles
and practice that can be applicable for managers for better management of the
organizations.

(1) Science of Management:

Fayol has classified six activities for better organisation:

1. Technical: Production / Manufacturing

2. Commercial: Buying - selling - exchange

3. Financial: Search for capital with its better utilization

4. Security: It is concerned with property and person.

5. Accounting: Statistics, profit - loss, balance sheet.

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6. Managerial: Planning, organizing, directing and controlling

(2) Managerial Qualities and Training:

Fayol identified six qualities, required for the managers to be successful.

1. Physical (health)

2. Mental (Ability to learn, understand and making judgment)

3. Moral (energy, firmness, dignity)

4. Educational (qualification / basic knowledge to perform a job)

5. Technical (particular to the function being performed)

6. Experience (arising from the work)

With these qualities, Fayol also promotes management training with technical
abilities. For this purpose, he suggests that manager should apply fourteen
principles.

(3) Principles of Management:

According to Fayol, these 14 principles can be universally applied to the

organizations, irrespective of their type, size, functions and levels.

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1. Division of Work:

Fayol suggests that division of work requires at every levels of organization to

get the benefit of specialization, by the division of work. Employees will
properly concentrate on a same job. They learn the job properly, get confidence
and ability with accuracy which will improve the overall performance of the
organization.

2. Authority and Responsibility:

Managers need the authority to get the work done through others. Authority
means right to give orders and responsibility means obligations to obey orders.
The managers who possess the authority to get work done from others should

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also bear the responsibility for completion of work. That means – authority and
responsibility should be balanced.

3. Discipline:

All the employees should be in discipline in their service. It is an outcome of

effective leadership. Discipline means respect, obedience and good manners at
work. Self-discipline comes through individual nature and effective leader.
Command discipline comes through formal authority in terms of approved
policies, rules and regulations. For maintaining discipline, various terms are
used like termination, suspension, demotion etc.

4. Unity of command:

It means employees receive orders and commands from single authority. If the
employee receive the command from more than one authority, then he will get
confused that which command he has to follow. Taylor recommends multiple
command authority in his foremanship. But it will adversely affect discipline.

5. Unity of Direction:

It means that for performing a job, one manager one plan with the same
objective should be formulated. It provides better co-ordination among workers
and employees in the organization.

6. Subordination of individual to general interests:

For efficient management of an organization, individual interests should not

overcome organizational objectives and interests. For avoiding conflicts,
individual interests should be correlated to general interests. The main
responsibility is on the leader to create an exemplary conduct for others. The
leader should be honest and fair with good behavior for all the groups.
Employer and employee should work on a fair agreement.

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7. Remuneration of Personnel:

Remuneration standards of organization should be fair and satisfactory for all

the levels of employees. Fayol suggested that profit - sharing method should be
adopted for managers only. For other employees, non - financial rewards
should be provided.

8. Centralization:

Everything that goes down to reduce importance of sub-ordinates is called as

centralization. Increasing role of sub-ordinates is called as decentralization.
Fayol provide the difference between centralization and decentralization. For
small organisation, centralization is more preferable while in large scale
organisation, decentralization is more preferable.

9. Scalar Chain:

Scalar chain means the line of communication from top level to the lower level.
Fayol suggests that information should pass through all the stages and level of
the organisation. Superior should be well informed in advance.

10. Order:

This is related to proper arrangement of concerned resources. Materials should

be placed at the right place, with the right men at the right time for everyone.
All the requirements should be fulfilled in advance with constant balance
requirements and resources. In a large scale organization, it is difficult to
maintain this order flow.

11. Equity:

Manager should not act partially or unfairly while dealing with employees in
decisions making. It requires good understanding, knowledge and loyalty of

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employees towards the organization. Equity is a totally neutral approach and it

is fair and kind in dealing with employees.

12. Stability:

Employees should feel safe and stable in the organization. Employees should
not have contractual or short term employment in the organization. Sufficient
time should be given to the employees for understanding and getting used to
with the work / job. High labor turnover ratio affects the total productivity of
the organisation.

13. Initiative:

It is responsibility of the managers to encourage and motivate their employees

to take initiative. Some mistakes of employees should be tolerated to motivate
and create confidence in the employees. The employee should have freedom in
their working criteria under the organizational policy and discipline.

14. Espirit - De - Corps:

This principle develops team - spirit and promotes ‘union is strength’ among
employees. Fayol suggests the use of oral communication in internal
organizational matters instead of formal - written communication, whenever it
is possible.

❖ Limitations/ Criticism:

1. Some of the concepts and conditions are not properly verified by the
Fayol:

This approach lacks in scientific evidences. The application of management

concepts and practices are relative with respect to organisation, its type, scale
etc.

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2. Human factors are ignored:

In this approach, human factors like feelings, emotions etc are totally ignored. It
only focuses on organisational structure, policy, rules-regualtions and monetary
benefits.

3. Unrealistic Assumptions:

Fayol advocates that management principles and functions are universally

applied. He does not consider the factors, problems and situations which are
different from organisation to organisation.

4. Bias:

This approach is more concerned with what a manager should do rather than
developing common understanding of managerial behaviour. This approach
does not provide clear application of management principles.

5. Dynamic nature of environment:

Today the economic parameters are quite dynamic due to competition and
continuous changes. Therefore, in today’s dynamic era, only getting things done
through sub-ordinates is not sufficient.

Though, there are certain limitations of this approach, still it is considered as a

turning point in the history of modern management.

Q-4 What is the base for Neo-classical theory? Explain it in detail.

Ans. Introduction:

In the beginning of 20th Century, many management experts felt that the
classical thoughts are incomplete, as scientific management only focus on
workers and administrative approach on manager’s activities. The importance of

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employee relationships was not considered, social relations are totally ignored
and only focus was on discipline and control and not on motivation.

The human relations approach fill up this gap of classical theory and modify it
with psychology, sociology and anthropology. This theory becomes popular
especially when Hawthorn Experiments were conducted at Western Electric
Company (1924-35), Chicago. It includes –

[A] Hawthorne Experiments:

The Hawthorne plant is located at Chicago at General Electric Company (GE),

manufacturing bell of telephone system. Approx. 50,000 employees are working
at the plant. Before this experiments, it was found that though company
provided benefits like material benefit, pension plans and sickness benefits etc.
still employees felt dissatisfaction and productivity was not at standard level.

Efficiency experts were experiencing failure at G.E. in 1924. After that, the
company invited experts from National Academy of Science for productivity
study. They employed Elton Mayo, Whitehead, Roethlisberger and Dickson to
conduct productivity study. They conducted four studies, named:

1. Illumination Experiments

2. Relay Assembly Test Room Experiments

3. Interview Phase

4. Bank Wiring Observation Room Experiments

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[B] Human Relations Approach:

This behavior science approach developed from Hawthorne experiments and

suggests that there is a contribution of emotional feeling and human behavior in
organizational performance. It includes psychology, sociology and
anthropology for managing people. The experts believe that employees are
social beings so social relations will improve their job performance and
opportunity level.

Behaviour Researchers believes that the model of human needs and motivation
were not properly simplified and needs intensive investigations.

Contributors: Following are the behavioral scientists who had given their
contribution in behavior science.

(1) Abraham Maslow:

➢ Hierarchical structure of human needs.

➢ Motivational concepts
➢ For society after satisfying lower level needs (physiological, safety and
social) the higher level needs will arise (self-esteem and self.
actualization)

(2) Chris Argyris, Douglas Mcgregor, Rensis Likert:

➢ There is a need to modify the existing practices by restructuring and

redesigning working of employees so that they can satisfy their high
order needs.
➢ Employees are basically good, management should have humanize
working approach to stimulate their efficiency.
➢ Employees are the assets of the company. So the management should
have a trust and confidence in people. Employees should allow to
participate in the decision making process.
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➢ There must be self-evaluation and self-control mechanism for employees.

➢ Human relations approach indicates that organization is a group of people
and it is made up from their collective efforts.
➢ Behavioral scientists said that "As management means art of getting
things done through people. Therefore management should study the
human behavior context.
➢ This approach is also known as "Human Behaviour Approach" or
“Behaviour Science Approach."
➢ The main focus of this approach is on developing informal relations and
humanistic thinking instead of formal and conventional working
approach.

This approach can be divided into following areas:

1. Inter-personal Behaviour Approach:

This approach focuses mainly on studying individual way of working with

others.

2. Group Behaviour Approach:

This approach focuses on social relations and behavior study of organization as

a whole.

(1) Features:

✓ Managers should properly use various directing tools like motivation,

leadership, communication, etc. The decision made by managers should
be based on human behavior study.
✓ It is clear that the organizational objectives can be achieved only through
collective efforts of all employees. Therefore, managers have to make
decisions accordingly.

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✓ The productivity, confidence level and morale of the employees will rise
by good human relations at a workplace.

(2) Merits:

▪ For managerial development, human relations approach is highly

significant.
▪ This approach proves that employees are an important asset of an
organization.
▪ Human relations make an effective contribution in the achievement of
organizational objectives.
▪ Good human relations improve efficiency and effectiveness of
employees.
▪ Through this approach, managers may improve their efforts for in
satisfaction of his employees. It provides a leadership.

"Human relation is motivating people in order to develop teamwork which

effectively fulfills their need and achieves organization goals."

(3) Limitations:

▪ This approach is simple to understand but difficult to implement m (1)

regular practice.
▪ With human relation factors, other organization factors should also be
considered.
▪ The study and perception regarding human behavior analyze from few
experiences which cannot be universally applicable. In addition to that it
is difficult for anyone to forecast for human behavior.
▪ More focus on human relations and behavior study leads to inefficiency
and ignorance of work from the employee's side.
▪ The outcome of human relations is up to that particular place only. The
same outcome cannot be applied at other locations and situations.
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▪ This approach focuses only on behavior study and does not consider the
output and organizational performance.

Q-5 Critically evaluate the Contingency (Situational) Approach.

Ans. Modern Theory:

During 1950's management scholars pays more attention to organizational

theory. In 1959 symposium held by the foundation for research in human
behavior, Michigan has published a modern organizational theory. The
contributors were William Whste, Chrisl Argyris, E. Bakke, James March..
Jacob Maychak, Fiedler Anatol Rapoport. The concepts are-

❖ Contingency (Situational) approach:

It is an extension of System Approach:

This approach suggests that management actions are situation. The particular
action applied to one situation is up to that pay only. The same action cannot be
applied to other situations.

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▪ That is not being possible to work in one particular way for managing the
organization.
▪ Every organization differs from one to another w. r. t their way of
technology, managing, employees and external factors. Management
principles and methods are situational and relative. Manager, has to first
study the particular situation and then apply different approaches,
behavior, functions, systems, etc.
✓ Contributors of this Approach :

James Thomoson - Lawrence- Lorsch- Woodward-Selznik- Burns -

Stalker- Fieldler- Luthans- Stokker- Charler - Parreto.

Features:

(1) Management actions are completely situational with respect to internal and
external factors and systems (even sub-systems).

(2) Organization should properly integrate with external environment and

systems.

(3) Organizational actions differ from situation to situation. Therefore,

there are no common actions applicable to all organizations.

Advantages :

This approach provides a base to study complex phenomenon of organization

and its dynamic nature under different kind of situations. The advantages of this
approach are...

Actions of Managers rely entirely on situations and environmental factors.

"Contingency approach suggests that the internal functioning organizations

must be consistent with the demands of organization task, technology or

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external environment and the needs of its members the organization is to be

effective. "

-Lorsch and Lawrence

1. Contingency Approach designs appropriate solutions for particular

managerial actions w.r.t its internal and external variables.

2. This approach suggests that organisation as a whole relates with its external
and internal environments. Therefore, any of the system or sub-system can take
decisions on their own way. Organization needs to consider external
environments like political, legal, technological, economic etc. and relate it with
internal constraints/systems.

Limitations:

The limitations of Contingency Approach are:

(1) The Contingency Approach stress on "if and then" philosophy likewise, if
such things happen, then those steps will be taken. This is due to inadequacy of
content regarding Contingency Approach. Sufficient literature is not available
which can be justified with respect to all situations.

(2) This approach is simple to understand but difficult to put in practice. It is a

highly complex phenomenon and requires detailed analysis. Managers may take
short-cuts when he works under short time span.

(3) This approach is reactive and not proactive w.r.t a given situation. Manager
has to design the plans and policies in such a manner that environmental effects
should be as little as possible.

(4) This approach requires detailed study of various external and internal factors
affecting the organization. Therefore, empirical testing is difficult due to
complex representation of problems.

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Though, there are certain limitations of this approach, it creates barriers for
managers. But, in practice, managers have to make detailed study of situations
and accordingly take decisions. It requires great degree of logical analysis and
skill.

❖ System School Approach:

This approach was developed after 1950's. This approach• considered as an

integrated approach of management.

(A) Characteristics :

A system is a combination of various inter-related parts/components to form a

complex unity. The characteristics of system approach are:

(1) A system is a basic combination of various sub - system. Every sub system
is a combination of various parts of components. The system is a hierarchical
structure of sub-systems.

Example: Computer is a system of CPU, Monitor, Mouse board, Keyboard etc.

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(2) The various parts of sub-systems are mutually related to each other directly
or indirectly.

(3) For any system, the arrangement of parts is very important. Therefore,
every system has an individual identity which consist of arrangement of various
parts.

(4) Every system works in its own fixed boundary. For better management, it is
necessary to frame the boundaries of all the systems, because system and
environmental interactions depends on the boundary.

(B) Types of systems :

Open system includes feedback system to maintain the equilibrium.

Example, Any human body.

Open system can directly interact with environmental variables. Therefore, it is

considered as a dynamic and flexible system.

Close system do not have any interaction with the environment. They are self-
maintained system. They are based on machines and automation.

Example, All the types of machineries.

Every system converts input into output: Example, Production system

transferring raw materials into finished product.

(C) Implications:

➢ This approach advocates the integrated thinking of management a totality

and in sub-elements.
➢ This approach visualizes that in management, various forces influence in
an integrated manner.

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➢ This approach suggests that manager has to develop an ability to think in

integrated way for solving any problems.
➢ This approach provides an initiative for studying complexity of an
organization. It also gives the platform for conceptual understanding of
the organization.
➢ This approach develops team spirit (synergy) in the organization.
➢ This approach implies that various factors of environment affecting an
organization are inter-related.

(D) Limitations:

This approach is generally limited to large scale organizations that run various
departments and systems. Small-scale organizations generally run with one
owner and its own system. Therefore, this approach does not have universal
application.

➢ For managers, it is difficult to apply this approach in practice.

➢ Sometimes, if managers do not concentrate on framing systems, then
many systems they are developing will create complexity in the
organization.
➢ Sometimes this approach is highly expensive and creates many systems
which are difficult to manage.

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