PAPER-I (Unit-II) (SUMMARY OF THE CLASS NOTES)
Dr. O.P. Minocha
Professor of Public Administration
From the Directors Desk
these are the summary
of class lectures of and analysis of the
Paper-I (Unit-Il), They comprise of description
dealt topics. To get the essence of the topics at least two readings of the entire material is required. You are also required to remember the context of the lecture so as to get the broader view. These notes will be further supplemented the topic. by printed booklets to explain the details of
HRISHIKESH B. KULKARNI Director KAI'ZER EDUCATION GROUP
Theories of Administration
1. Circumstances which led to the origin of theories 2. 3. 4. Growth of the "Theories of Administration" EW. Taylor Henri Fayol
THEORIES OF ADMINISTRATION
Circumstances which led to the origin of theories
1. With the dawn of modern era, new organizations came. The impact of Industrial Revolution was complexity of work, so the demand for efficiency came. Demand for principles came, that resulted in advocating large nwnber of theories, In the case of bureaucracy, prior to bureaucratic model of Max Weber, "rule of men " existed, and then "rule of law" was advocated. Mass production, marketing & efficiency was the concern, this resulted in bringing new school of thoughts. This brought "management revolution" which is the by-product of Industrial Revolution. Management r~olution sup_p_!_emented Industrial the Revolution. People from different backgrounds. Practitioners, teachers & scholars contributed to the administration in theoretical and empirical manner. Also people from different backgrounds like science, ~w, com uter licience, artificial intelligence, etc. all were concerned with efficiency but gave different views therefore theories of management may have different jargons, but aim was efficiency. The management theories are described provably as, 5 blind men describing the elephant.
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Growth of the "Theories Administration"
F.W. Taylor father of Scientific Management considered that an organization is a well structured organization only if it is based on logical & proven principles. This will bring efficiency in the organization. It is to be noted that Henri Fayol brougnt the concept of Administrative Management. (Neoclassical school of thought) which was principle oriented. Weber's Bureaucratic theory is applicable to all large organizations but is more relevant to public organizations. All these schools combined together is the Structural school, or Classical school or Mechanical school of thought. All focus on preconceived methods. In 1920's relevance of Structural School was due to:
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Stages in the growth of an Organization Refugee problem after World War Issue of Welfare of employee Rise of trade unions world wide (India tr~de union Monitoring Information movement started in 192M Technology, e-governance With the advent of Welfare state movement and '" (4) October revolution, 1917, erstwhile USSR the role of ~ c human in organization was rethought so the structural ~ .:: school of thought was challenged and efficiency y de ends on human factor, man behind the machine need E: t::l to be given importance. ;.; This led to the emergence of Human Relation ~ School. Skill was re laced_Qy will, structure was § <.> replaced by human factor. Scholars of Sociology & ~ Public Administration questioned the ignoring of 15 "human being" in an organization. Hawthorne ~ ·0 experiment by Elton Mayo gave impetus to this school S of thought. "-l Human Relation expanded and gave base to Behavioural School. Behavioural School of thought, also called as Neo-Human Relation. Structure & Behaviour cannot exist without one another. This gave Growth rise to Systems School of Thought, in which system was looked as a convergence of structure and behaviour. Explanation of the various stages in the growth of It started somewhere in 1970's. Prior to that, with the Organization advent of computer, decision making school of thoughts • Stage-I: Small organizations emerged. Prior to Taylor, emerged with the use of Artificial Intelligence then came Fayol & Max Weber, organizations were run on the E!!JpiricalSchool of Thought. It deals with how to peJ_~~lity, rule of thumb and intuition, in an generalise theory. Instead of Grand theory, broad unscientific way. • Stage-2: Large organizations emerged. Systematic generalization based on the practical ground reality e.g. way of work was followed as given by Gulick & case study, learning through simulation was done. Riggs Urwick, Mooney & Reiley also Human Relation was & Barnard contributed in it. Lastly the New Management coupled. Whole Scientific bureaucratic organization School ofthought came. Computer researchers, Software became dysfunctional. This brought discontentment. engineers contributed in it. "New" due to modern Bureaucracy failed miserably. technologies. • Stage-3: As bureaucracy failed demand for 3D's Conclusion: We can reject all schools, Ultimately (Democratise, Decentralise, De-bureaucratize) New Management School does not indicate the principles intensified. But do to lack of coordination and control of forming organization, it talks only about modern ization in the democratic, decentralized setup- corruption of organization. Theories were not propounded, only became a gig_antic problem. methods were given. Empirical school gives method of • Stage-4: To deal corruption openness & study of organization and not principles. Decision making trans~renc became the need of hour. Using tells only the importance of decision making through technology ethics and morality in administration can artificial intelligence, so we are left with only two main be incorporated and efficiency can be brought. So school, Structural and Human Relation. Thus between wide spread use oflnformation Technology (IT), and two opposite theories all other theories oscillate. Most e-govemance started. organization theories have followed dialectic process of But over use of Information Technology, e-governance change. Dialectic path means thesis then antithesis, then also create problems like cyber crime, hacking, multi crore scams etc. So in the present scenario issues like synthesis, this slowly becomes new thesis. cyber licensing setting up cyber office to control cyber crime, are to be thought about. Theories foUow a dialectic process of change - But other problems like at micro level unemployment as represented below: emerge because of the existing digital divide. Also information safety and security is a challenge we want transparency but not nakedness. Also overuse of Information Technology is leading to isolation and psychological problems. -I. 2. 3.
Scientific AntithesiS ~ 'Thesis
With the to the need Management. to strengthen
dawn of last century mass production led for efficiency that brought Scientific Scientific Management started in America capitalism i.e. create wealth for the nation
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scientific management. This is reflected in various reports like 1st ARC, nnd ARC,S & 6th Pay Commission focus on efficiency in India. Fulton Committee (1968) of UK talked about need for scienti c management. lnAmerica Hoover Commission 1929, 1937 both advocated for Scientific }1anagement. Owing to failure of Bureaucracy, new public management that is renewal of Scientific management is taking place. In modern era as the concern for efficiency increases use of Scientific Management principles also increases. Also there is wider use of O&M techniques.
and the organizations. To deal problems between organizations it replaced adhosicm, by logical principles. Though started in America it travelled to other parts of the world having same model of industry. Initially USSR was against the theory, as the theory was pro-capital yet due to the necessity of mass production unwillingly it was compelled to bring rationalization by scientific management. Thus entire scientific management is universal in nature. Application of Scientific Management World Wide: All developing countries advocate the need for
F. W. Taylor was born in 1856. In 1878 he joined as a labour in Midvale Steel Company and became Chief Engineer in 1884. Taylors contribution the development of Scientific Management was recorded in his papers. They areA Piece-Rate System (1895); Shop Management (1903); The Art of Cutting Metals (1906)& The Principles of Scientific Management. Slowly and gradually he became the Chief Engineer. Having engineering background he looked & observed the defects in organization which led to his theory of "Principles of Scientific Management". In 1911, he wrote papers an various principles. His methodology was scientific, he never advocated grand theory only wanted to replace adhocism. On this account he was summoned by the Congress Committee to give reasons. He gave a philosophy to arrive at the best way of doing things. He is known for "Mental Revolution". He observed that there was lack-of standardization of methods that is lack of definin _the job content. The goal of management remains to optimize output. Also decision should be based on rationality so he replaced rule of thumb. He advocated that if there is no incentive scheme lack of relationship between the work &;the worker may arise. Also mismatch between human potential and the job was given concern. Moreover military type of organizations existed at that time where multiple functions were done by the manager (He wanted to replace generalist by specialist). Thus there were conflicts between managers and workers which resulted into strikes. Therefore he wanted to change the entire setup by choosing scientific principles. Using moder~n techniques of work flow, work measurements and all other factors he formulated time & motion studies. He gave importance to standardization of environment: also. Piece rate system - linking the salaried output. Standard output to get salary. This was outstanding contribution to the principles of wage payment. Output oriented salary structure - Performance linked salary (As recommended by 2nd ARC and Pay Commission ). He advocated need for scientific training, scientific selection, advocating right men for the right job. Ability and aptitude according to him was of due importance. He facilitated socially acceptable environment for workers. According to him "Mental revolution" deals with the efficiency of workers and depends on the involvement of both management and workers. He wanted to bring cordial relation between the workers & the managers. All this tells about Human factor ofTaylor. Functional Foreman: 8 functional foreman with are: 4 Planning foreman -I Executive foreman
1. 2. 3. 4. Order of work & route clerk The instruction card clerk The time & cost clerk Shop disciplinarian 1. 2. 3. 4. Executive functional boss Gang boss Repair boss Speed boss
Foreman at supervisory
He indicated that decisions should be taken on well laid principles. Managers should apply Scientific Management to take decision at all levels. In broad philosophy of management, he focuses on applying scientific management to increase productivity & efficiency. This science should be learned and practiced by all the organizations.
Application of Taylor
1. 2. 3. His thought has become Taylorism His ideas were used by various committee in various countries like UK, USA & others We have very important techniques like O&M (Railway efficiency unit, O&M unit of post office of budget management all are applying scientific management principle)
Since 3E's (Efficiency, Equity, Economy) were the concern, people wanted to utilize & apply his principles widely, there by diluting the line between private & public. He was against adhocism, irrational ways of work and gave importance to logical principles. Cooperationalism was focused rather than individualism. Restrictive output was eliminated by maximization of output through the use of scientific management Initially organizations were based on unscientific principles. Then principles like d~ation & hierarchy came. But small organization dj4 not needed delegation. Conclusion: Under Scientific Management a revolution began as "Taylorism" world wide. This movement guided the structure of organization and trained the managers to deal organizational problems. Owing to the changing role of state, Taylor is relevant in public organization even today.
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1. 2. 3. 4. 5. 6. 7. 8. 9.
• • Financial function - Finance, making profits. Security function - Security of life & property of employees. Earlier security was not given importance, but off-late started. Own knowledge has to be secured for own use. Today securitY-is very Important. - ccounting function - Accounting function explaining ~as been done, deals with responsiveness. Accounting not only financial but wider in nature. Accounting means render an
Henri Fayol Why Taylor called as Father of Scientific management Fayol as universalist Fayol as functionalist Importance of training Activities under managerial function POCCC, POSDCoRB Attributes of manager Major Contribution What Taylorism was to America, Fayolism was to France. He was born in 1841 of a French middle class family. He was a graduate in mining engineering. He joined a mining company as a mining engineer at the age of 19 years and became Managing Director of that company. He demonstrated the utility a/principles and advocated those principles which were universally applicable. He wanted a discipline to be formulated for the managers. He said "Leaders are not born they are made." He had a liberal education & belonged to upper middle class, unlike Taylor.
Management function - Common to all function like c~tQry system in our body. Some managerial - function is required in all above functions. So we study various kinds of management. ill modern organization at highest level there is plural executive and work is divided horizontally based on area of speciality. And to coordinate these activities CEO or MD exist H. Fayol talked about horizontal functioning at the top level according to area of administration. He used the word "manager". He gave importance to training. He believed a person can be converted into a leader through training. Developing potential and capacity building such aspect wer_e giv@ importance, he also gave importance to administrative skills. Distinction between administration and management was done. Previous Fayol Focused on process and method. Administrative Task •
Taylor and Fayol are supplementary and complementary to each other. Separately they are only
half. Complete organization theory contains description of both. ill totality structural school consists of both Taylor & Fayol. Taylor was more concerned about scientific principle as he looked the organization from lower level (down trodden). Fayollooked the organization from above that is managerial level. Taylor was giving ideas on solving problems and did not advocated "Grand Theory". He was more practical whereas Fayol was critical & was building universal principles. Fayol gives theoretical dimension and Taylor given practical dimension of running an organization. Fayol deals with managerial techniques and Taylor deals with worker ~ techniques. Thus Fayol and Taylor are not only complementary but also supplementary to each other. Why Taylor is called as father of Scientific Management Majority of thinker of the world knew about Taylor before Fayol. As Fayol initial writings were in French and translated in English very late in 1929. The Primary reason why Taylor is called as father of Scientific Management is that Taylor was more scientific in orientation. Fayol was experience oriented. Thus Taylor was given the title "Father". Fayol was influenced by "Adam" who spoke about efficiency. He spoke about "Cartel". Mutual work can result in efficiency and bring economy. Fayol as Universalist - Certain management is common to all, applicable universally. Management is universal in all human activity, like church, hospital or running house.
At top level Administrative issues expand and Technical task shrink. At the bottom technical task expand & administrative task shrink (as shown in the diagram). This gives rise to generalist and specialist role. While looking at the administration from wholistic angle is generalist view. A good administrator is one who is both generalist and specialiSt.;.._----
Activities under Managerial Function
Planning -It deals with what is going to happen ip future. It is vision oriented. It includes estimate of demand & supply forecasting. Organising - The process of building organization output may be organizing.
Division of work Allocation of responsibility Defining duty Supervising Building authority-subordinate Proper selection Proper training Proper placement
Fayol as Functionalist
• Technical function - Common functions exist everywhere, but there are some technical functions also. Technical means line activity that is main task for which the organization exist. Like the task of imparting knowledge by universities. Commercial function - Marketing, selling, imparting services.
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Commanding - means giving direction, imparting knowledge setting role model, setting process of communication. Creating initiative. 4. Coordinating - means Harmonizing, resolving dispute. The most important role of manager in "coordination". This is also behavioural in nature as coordination is used to remove inter-personal problems between employees. 5. Controlling - deals with monitoring. Gullick & Urwick gave seven function of administration as POSDCoRB. Administration according to Fayol encompasses POCCC. 3.
Division of workIResponsibility
Accountability and control
between the principles
Comparison between POCCC & POSDCORB
Planning Organising Commanding Coordinating Planning 0, S (Organising, Staffing) Directing Coordinating __.-Reporting Controlling ~Budg(!ting
Attributes of Manager
Fayol indicated activities, qualities likeI. Physical health: Appearance, Vigour, Stamina 2. Mental adaptability: It -deal~th aRtitude and. interest 3. Ethical and moral dimension: firmness & willingness to accept responsibility. (Very difficult to judge done through police verification) 4. General education: general studies, awareness, acquaintance with matters not belonging exclusively to function performed. 5. Specialized ~ledge ofthe function being handled. 6. Job expgience This determines "job s ecification" basically covered under KSA (Knowledge, Skill, Attitude)
Discipline: In every formal organization thereare certain norms of behaviour. Discipline is expected behaviour done in discharging the duty. Adhering to these norms is called discipline. Discipline brin__gecorum-. d Order: means to maintain and do things in certain sequence in a logistic way, which will lead to harmony & efficiency. Sequence includes time, place, and energy. If the order is not followed energy time as well as money are wasted. Unity of Command: It is the cornerstone of efficiency. Under this subordinate should receive command, or instruction that should come from one head only. Otherwise it lead to confusion, lack of coordination. Criticism: These principles needs modification in light of the complexities, of modem organizations Modification in these principle is demanded. Unity of command may not be practiced today.
Board of Director
e.g.(i) for violation of unity of command
Major Contribution Fourteen Principles of Fayol
of Fa yo I
Head of Department
Fayol was f~G.inated_by Adam Smith who gave importance to efficiency. In modem era we are moving towards multifunction as uniform function brings boredom. 1. Division of work : Total task T = tl + t2 ... tn is divided among 'n' employees and each have clear task. Nature of work is defined. Gullick & Urwick specifies the generic bases of division is departmentalization. 2. Authority & responsibility: Based on division of work we ctllocate responsibly and to discharge responsibility there must be an authority. Responsibility is nothing but a moral and sometime legal duty done in the best possible manner. Explanation: General responsibility is welfare. Specific responsibility is no crime. Responsible is answerable Responsive is proactive and sensitive Once a duty is given to discharge it, coequal and coterminous authority must be given. In general practice, power is not given so people are not able to discharge functions, so need is to give matching authority with responsibility.
e.g.(2) duality of command
Health Secretary Various Schemes run by rntre
Rural Secretary Agriculture Secretary
Unity of command was also discussed by Taylor as functional command. Thus unity of command is still valid but in specific area like agriculture. Unity of Direction: Direction is goal oriented, vision oriented. It needs clarity of purpose. Certain degree of agreement in organization to follow the goal is needed. This is called unity of direction.
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7. Centralization: Certain activities need to be concentrated in one hand to ensure coordination. Power is concentrated at centre to deal centralized activities, but local level activities are dealt by the state. Thus centralization is needed in policy formulation, rule making, setting objective, budgeting and in monitoring activities. Importance of note sheet: In any government organization everyone in the note sheet, contribute in decision making who are present in the hierarchy. Fayol suggested gank plank. Equity: Dealing people with certain justice stability of tenure ensuring continuity and remove insecurity. Average tenure of District Collector is ten month. Max Weber advocated permanency. Subordination of individual interest to the general interest general will is not sum total of all the interest. Hierarchy: Is distribution of work vertically. It connects organization in a line from top to bottom, it is a connectivity between various functionary. It is like a chain or thread which interconnects the organization from top to bottom denoted by: Critical assessment of Scientific Management: Criticism came from labours, managers, also from people belonging to psychology, sociology back ground and from group of people favouring H. Simon. WorkersPerspective:Workers were highly critical of Scientific Management as the entire school did not gave recognition to workers. There was no mention of collective bargaining & trade union worker's rights. Workers were losing control over production, so they started revolt against capitalism. Workers participation in the work was ignored. Workers became subject of evaluation. Marxian Perspective: The entire Scientific school was a primitive tool to strengthen industrial polyarchy. Managers perspective: They believed that management cannot be a science, it cannot be a preconceived method. Managers were loosing autonomy. They argued; mangers were even successful in past, when there was no scientific management. They felt too much importance were given to the workers under scientific management which was not needed. It brought about conflict between owners & managers and between managers and workers. The owner & manager conflict came up as the owners started doubting the capabilities of managers, and managers felt that the owners wanted to apply the principles of Fa yo I only to earn profit.
According to Simon principles are contrary in nature. It is very difficult to balance them. Most of the principles are utopian and normative. Good enough can be achieved but scientific management advocated "one best principle" and good is the enemy of best. Simon also questioned the, validity rationality & reliability of principles. AccordingtoBarnard organization is a cooperative system a social institution where informal organization playa vital role in running the administration. Informal organizations determine the social norms and govern the working style. Structural theory gave no importance to informal organization Barnard emphasized that authority is not possessed but authority is based on 'acceptance'. The Human Relation School believed that organization is a human endeavour, a human effort. This school focused the importance of 'human' in the organization which was neglected by the structural school. The structural school looked at the organization in a closed way and failed to respond the needs of people facing the aftermath of 1st World War. Every theory has its own limitations. Initially the organizations were based on institutions and unscientific ways. With the growth of organizations first step was to make them scientific, second step was to give importance to human factor. Thus theories revolve in ABCD that is A - Authoritative style B - Benevolent style C - Consultative style D - Delegating style The movement is from A to B to C to D Conclusion: Taylor in brief, combined theory & practice, thought and experiment, doing & teaching all in one person & in one life. His Scientific Management had a major influence on the growing reforms & economy movements in Public Administration. • ••
10. Subordination of individual interest to general interest. The interest of one employee or group should not prevail over that of the total organisation. II. Remuneration of personnel: The remuneration paid for services rendered should be fair & afford satisfaction to both personnel & the firm. 12. Stability of tenure of personnel: Suitable condition should be created to minimize turnover. 13. Initiative: It is inbuilt that if you centralize it curbs innovation. To neutralize ill-effects of centralization. Some authority is given to lower level employees to become their own judge. Taking initiative is called multi skilling. Two things are included in it : i) Dividing work leads to monotony so to create variety multiple works are created in the job. Job content should be multi type, this will create responsiveness. ii) Modem organization believe in using resources in optimum way this is done by allowing employees to do best what they can Multi shifting. 14. Espirit de corps: Sense of cooperation, team building. These principles today might have got modified due to present complexities. No organization can function without adhering to these principles. Hierarchy was used by Fayol as "Scalar Principle". This facilitates the work, control and supervision. It reduces span of control. It is a process to facilitate delegation of power. It establishes a chain of communication which also result in unity of command. It also result in participative decision making, it builds up moral and motivation.
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