Rationalization of Management Theories and Practices

Compilation of the Required Graded Output

By : Marl Vincent L. Labitad, MPA

PhDM Student

Cebu Institute of Technology – University

Rationalization of Management – Labitad, Marl Vincent

Page 1
Management and Philosphy

What is this common ground between philosophy and management? Both deal with human
action, its quality of goal attainment and with the need for the coordination of human
actions. The governing of oneself and the governing of others is the central concern of
philosophical ethics and of political philosophy. Managing oneself and managing others is
the goal of management. To manage is a newer term then the term to govern and it also
includes a shift in the way governing is done. The first trace of the term “manager” is found in
Shakespeare’s play Love’s Labour’s Lost. It is not accidental that managing becomes a central
term with modern times and that it is first used in modernity by the great playwright of the
English language.

Management is governing without political power, is leading without recourse to political

or religious authority. Its legitimacy is functional: Management is justified by its function to
increase efficiency, not by the political good or the consent of those influenced by the
management. Its legitimacy is neither traditional nor consensual, it is functional. The idea
of management implies that the people managed feel that they win by being managed.

“More power comes more responsibilty.”

Jeremy Rifkin and later Peter Sloterdijk have compared the managers of the large
corporations to the great feudal lords of the middle ages. Like those, they possess, they say,
large semi-political power without being the government. Like the feudal lords they are not
subjected to political vote. This comparison is somewhat misleading since management is
subjected to strict functional control and to measurement by success in terms of turnover
and profits. Management will be fired if the figures are not good, a feature that the feudal
lords did not share. If the managers are successful in terms of creating value and profit they
might become almost unquestionable but they are still not feudal lords since their
governance is checked at least by their success.

If the top managers are very powerful they should be subjected to the duty to use their power
wisely. The idea that wisdom and power should be linked to each other is one of humankind’s
oldest ideas and ideals.

It might be even older then Western philosophy. It is found in Homer’s great epics but also in
the Indian Mahabharata. In Western philosophy, it has found its strongest
expression in Plato’s Republic. Plato claimed that as long as the philosophers do not become
kings, and the kings do not become philo- sophers there will be no end to the misery in the
commonwealth. Plato demands that the holder of political office and power should also be a
person searching for wisdom, a philosopher. It is Plato’s famous idea of the philosopher-king
that introduces the idea to philosophy that power should be led into a synthesis with
wisdom.

This postulate of the unification of wisdom and power can be translated, under
conditions of the present, into the postulate that the powerful manager or entrepreneur
should combine power, expertise, and wisdom, should become a philosopher-manager.

What Plato intended was the merging of political power and of prudence, cleverness, and
wisdom, that the powerful has also philosophical prudence and wisdom, an understanding
of human action and a theoretical knowledge of the deep structure of being.

This optimism that great political and economic power and philosophical wisdom should be
reconcilable is, as well, at the basis of the idea of a philosophy of
management. If we assume that great power, political or managerial, necessarily corrupts we
will not believe that the synthesis of a philosophy of management is possible as philosophers
assume who think that the philosopher is by his or her nature and training unable to take over
the part of the politician or manager. Immanuel Kant thought that there is a deformation
professionel on the side of the politician and man of practice as well as on the side of the
philosopher although it is not the same professional deformation on both sides.2 Their
professional deformation renders them both unable to take over each other’s role. The
politician is so much absorbed by power, politicking and clever maneuvers that he becomes
unable to the kind of disinterested, objective reasoning necessary for philosophy whereas
the philosopher who spends his life in the pursuit of universal philosophical truth is unable
for the politicking that is necessary for the participation in the public arena and for its
concern with the particular.

The new field of inquiry of the philosophy of management presupposes that the gap
between practice and theory, management and philosophy is not unbridgeable and that
practice can become philosophical and philosophy can become practical. Since managing
and governing as an activity presuppose cleverness, prudence, and wisdom or imply that
they can at least be improved in their performance by a synthesis of clever managerial
methods, ethical prudence, and philosophical wisdom the goal of
this new field is nothing that is alien either to philosophy or management. Both will be
improved in their own field by learning from each other.

There are in general three fields where philosophy becomes fruitful for the realms of reality
and the specialized disciplines of enquiry, the field of the ontology and epistemology of
realms of reality and of scientific inquiry, the field of the ethics of a field of reality and
inquiry, and a less general discipline the aesthetics and cultural theory of human action and
interaction in the social realm and in the arts. Philosophy questions and elucidates the
scientific methods of the particular fields of scientific theory and it investigates their ethical
foundations in the normative and cultural sense. Ethics is about the morals and culture of a
field of action, in our case the field of managerial action.

Management and the Ancient Connection

Sumer, located in what is today southern Iraq and the first urban-based civilization,
contained the genesis of management. Sumer had a flourishing merchant culture in which
goods such as grains, livestock, perfumes, and pottery were sold to customers. Rather than
bartering using one good or service, not money, to pay for another good or service, the
ancient Sumerians used ancient clay coins to pay. The sizes and shapes of coins represented
different amounts of currency and signaled the types of goods for which they could be
exchanged.

What made this level of trade and economic activity possible? The introduction of writing
made it possible for merchants to keep track of various trades. And the development of a
basic form of coins allowed for increased trade because a person wanting to obtain a good
or service no longer had to find another person who wanted exactly the good or service he
produced. Coordinating the activities of those who provided goods and those who wanted
to purchase them often required coordination, one of the main functions of a manager.

Two additional contributions to the early development of management came from the
Middle East. The idea of written laws and commands comes from the Babylonian king
Hammurabi (1810 BC–1750 BC).

The Code of Hammurabi was a listing of 282 laws that regulated a wide variety of behaviors,
including business dealings, personal behavior, interpersonal relations, and
punishments. Law 104 was one of the first instances of accounting and of the need for
formal rules for managers and owners. The code also set wages for doctors, bricklayers,
stonemasons, boatmen, herdsmen, and other labors. The code did not, however, include the
concept of incentive wages because it set wages at a fixed amount. The idea of incentives
would come from another, much later, Babylonian king, Nebuchadnezzar (605 BC–c. 562
BC), who gave incentives to cloth weavers for production. Weavers were paid in food, and
the more cloth they produced, the more food they were given.

The Code of Hammurabi is a well-preserved ancient law code, created between 1810 BC and
1750 BC in ancient Babylon. It’s a listing of 282 laws that regulated conduct on a wide variety
of behaviors, including business dealings, personal behavior, interpersonal relations, and
punishments. Law 104 was one of the first instances of accounting and the need for formal
rules for owners and managers.

The ancient Egyptians made great strides in the building of the great pyramids. The ancient
Egyptians were exceptional builders of canals, irrigation projects, and the pyramids, royal
tombs whose size and complexity exceeded what the Greeks and Romans were able to build
in later centuries. Although we are still uncertain about exactly how the pyramids were
constructed, we have some idea that the process required a great number and wide range
of slave laborers to construct them. Each laborer would have a different task. Some of the
laborers were stonecutters; others were required to push and pull gigantic blocks of stone;
still others were required to grease the stones to reduce friction. In this process, we see the
management principals of division of labor, coordination, and specialization. These groups
of workers were supervised by one individual. In figuring out how best to handle the huge
numbers of workers engaged in pyramid building, the ancient Egyptians also pioneered the
concept of span of control, that is, the number of workers that a manager controls directly.
Anticipating research on this issue in the far, far distant future, Egyptians found the ideal
number of workers per supervisor to be ten. In addition, there were various overseers, who
had the responsibility to compel workers to produce.

In Asia, the Chinese began to develop the idea of bureaucracy. Bureaucracy has roots in the
early dynasties but only became fully developed during the Han dynasty (206 BC–220 AD).
The idea was to train scholars in Confucian teachings and use those teachings to make
decisions. Unlike modern bureaucracies, this system was not formal but relied upon the
discretion of the scholars themselves. Another important development was the idea of
meritocracy because selection for and then promotion within a bureaucracy was based on a
test of Confucian teaching.

The Greeks (800 BC–400 BC) and Romans (500 BC–476 AD) added a number of important
steps in the development of management. Although neither empire was commercially
oriented, both Greeks and the Romans undertook a wide range of industrial projects, such
as roads and aqueducts, and established various guilds and societies that encouraged trade.
The Greeks continued to develop the idea of division of labor based on Plato’s recognition of
human diversity. The great Greek philosopher Socrates stressed the development of
managerial skills such as creating an atmosphere of information sharing and analysis. The
Romans’ contribution to management was standardization. Because the Romans needed to
administer a vast empire, they needed standardization of measures, weights, and coins.
Romans also saw the birth of the corporation, in that many Roman companies sold stocks to
the public.

Both Greece and Rome saw the continued pestilence of slavery, but due to economic
changes that made slavery financially unfeasible, workers were gaining some degree of
freedom. They still had masters who determined at what jobs they could work and how
those jobs should be done. After the collapse of the Roman Empire, there was a decline in
European trade. Scholars refer to this time as the Dark or Middle Ages (500 AD–1000 AD),
due its location between the classical world of the Greeks and Romans and the world of the
Renaissance. While there was little trade or economic development in Europe during this
period, trade flourished in the Muslim and Chinese worlds. Various travelers, such as 13th-
century Italian merchant and explorer Marco Polo, provided readers with tales and goods
from those booming societies.

The contributions of the following groups to modern management: Sumerians,

Babylonians, Egyptians, Chinese, Greeks, and Romans

We can track the concept of management from its development under the Sumerians. The
Sumerians provided the concepts of writing and record keeping that allowed for an urban
economy to develop, which in turn led to the establishment of small businesses. The
Egyptians helped to pioneer the ideas of specialization of labor, span of control, and
hierarchy of command. Sun Tzu developed subdivisions, various rankings of authority, and
coordination. The Greeks and Romans built forerunners of the modern corporation and
guilds.

Hammurabi

The Code of Hammurabi was a listing of 282 laws that regulated conduct on a wide variety of
behaviors, including business dealings, personnel behavior, interpersonal relations,
punishments and a wide variety of other outcomes.

Nebuchadnezzar

Nebuchadnezzar (605 BC–c. 562 BC) was a pioneer in the development of incentives in that
he gave greater rewards to workers who were productive.

Sun Tzu

Sun Tzu developed subdivisions, various rankings of authority, and the use of colors as
coordination between units.

“Antiquity” may be defined as the period in world history ending with the fall of Rome in
476 CE. Usually a study of Antiquity or ancient history would begin with the rise of the first
civilization in Sumer early in the fourth millennium BCE.

The study of Antiquity as it relates to the subject of management begins with the Uruk
culture in Sumer around 3500 BCE and then proceeds to a study of Sumer, Assyria,
Babylonia, Syria, Canaan/Israel, Egypt, Anatolia. Egypt, Iran, India, and China follow, and
finally the Aegean, Archaic, classical Greek, Hellenistic, and Roman polities, societies, and
economies may be analyzed.

“Management” in the context of Antiquity may be defined as the organization and supervision
of production, and as exchange in agriculture, manufacturing, and/or services such as public
administration of taxation systems or treasury.

A more concise definition may be the process of “getting work done through people.”
Studying management in the ancient world presents unique problems. The boundaries
between public and private sectors are often highly fluid, and exchanges often took place
for motives other than profit. Modern business models involving risk, productivity, and
investment calculations are hard to apply. Until the 1990s the general consensus of business
schools held that the study of management was relevant only since 1800. This view is
challenged by Morgen Witzel, who maintains that management has been both thought
about and practiced for at least five thousand years. In support of Witzel’s argument, this
article maintains that management has a much more extensive history than previously
thought, and such a history offers valuable lessons for current management. Ancient
Phoenician, Egyptian, Chinese, Greek, and Roman culture are examined. Organizing people
to complete a task, essentially the task of managers, has long been a point of interest for
scholars, merchants, philosophers, and rulers. The examination of several ancient societies
and their management practices moves the dialogue past simply the origins of scientific
management and toward a more holistic understanding of current management theory and
practices. Understanding the transition from the strictly hierarchical royal businesses of the
ancient Near East to the more entrepreneurial practices of the Greeks and the advent of the
first firms in Rome will enable a broader and deeper understanding of the current
managerial field.

General Overviews and Introductory Works

Near Eastern and Asian management models were more hierarchical than those that later
arose in the classical world. In the former, among cultures such as the Egyptian, Assyrian,
Tyrian, and Carthaginian, the boundaries between those who managed and those who were
managed were very clear; the same is true in China. Those boundaries were less clear in
Greece and Rome. Any brief survey of ancient business must be highly selective, focusing on
those civilizations that are the best documented with archaeology and literature. Even a
selective approach will illuminate management and organizational trends that emerged over
centuries, moving from the highly centralized business models of the Phoenician, Egyptians,
and Chinese to the more entrepreneurial model used by the Greeks, and ending with the
family model propagated by the Romans. Moore and Lewis 2009, Roberts 2011, and Witzel
2012 provide a strong general overview of their respective topics and together form the
research basis for much of this article. Other sources supply the needed detail for specific
sections of the discussion. Moore and Lewis 2009 makes a useful guide for analyzing
business practices in many of the ancient civilizations. Witzel 2012 focuses solely on
management thought and less on the actual nature of business in the ancient world.
The definition was created by the American Management Association: “It is the act of
getting things done through others and having them do it willingly.” In short, management
is getting work done through other people.

The University of Manchester defines management as “the process of dealing with or con-
trolling things or people.” Various dictionaries give similar oneline definitions, which may
have sufficed in the past, but in today’s complex organizational structures with
environments of rapidly growing technology, remote work places, and globalization, we can
easily question those simple definitions.

The most difficult part for any manager is how to deal with people. Who are these people in
the typical, modern workplaces? Their diversity has never been greater. Spread across the
globe and representing a wide range of different national, cultural, and subcultural
perspectives, they carry with them an enormous amount of baggage or blessings unique to
their group, and often divergent from others. For example, imagine the difficulties
experienced by an English-speaking manager from the USA or Europe in managing the work
production or quality of a Chinese-speaking employee in China, where the manufacturing
production normally takes place. The manager would face challenges associated with
differences in time zones, language, cultural expectations and norms, plus unfamiliarity with
the work environment, social issues, and a host of other factors per- haps as yet unknown.

Compared with related fields like sociology, economics or psychology, management is a

relatively new field the Academy of Management, the biggest academic association in
management, was established between the two world wars.

Management research, by nature, is interdisciplinary, drawing from multiple fields in

humanities and social sciences and often bringing them together to generate novel
contributions to research.

Most of the organizations at present think differently, strive to break old molds and
methodologies in terms of future competitive survival. Today’s managers realize they face
sometimes difficult challenges due to diversity and geo- graphic separation, and struggle to
maintain profitability under often severe competition. Globalization took root in managing
engineering and technology innovations and corresponding tasks,
where resources were available at a fair price. That is how many businesses and
organizations became global entities; it was in response to the need of the hour.

Management practices of getting work done through other people have existed as long as
humans have socially interacted. Managers and leaders evolved their methods in solving
technical problems and increasing pro- duction. However, a paradigm shift in management
philosophy and meth- odology is paramount in adapting to the changing environments
associated with growing technology and further globalization.

The role of the manager in organizations is quite different today than what it was at the turn
of the twenty-first century. Technological advances greatly assisted globalization in terms of
the functioning of virtual busi- nesses, offices, and the quality of human resources. This
brings up a question about what would be the complexity in future management,
particularly say after a decade or so. Managers will have to deal with information systems
that guide them with data acquisition and data analysis.

In a marketplace with intense competition, it is crucial to find ways to address challenges

involved in finding time to invent and innovate new product ideas, develop, design and
manufacture, and market new prod- ucts. Managing businesses in complex environments in
the decades to come includes assuming a larger responsibility and thinking of common
collective goals, rather than individual pursuits. Having this common, more holistic
understanding among managers can help to respond the challenges and changes to come.

The act of defining quality management is bound to survive and evolve, even as the idea of a
paradigm shift in management philosophy undergoes major transformations in the future.

How management might transform, evolve, and shape up in the next decade and beyond is
a subject of conjec- ture; there are too many unknowns and unknowable parameters to
specifi- cally predict how management will ultimately change. In this context, among the
many changes associated with the unprecedented democratization of information and
access to a vast diversity of knowledge resulting from the information and communication
revolution, one profound change stands out: The ubiquitous access to information and
knowledge resulting from the advent of the Internet, coupled with rapidly expanding
broadband connectivity.
The shackles imposed on information and knowledge for centuries by the elites in all
civilizations, who wielded them as powerful weapons on the uninformed, were broken by
technological advances.

This expansion of global connectivity has significantly diminished the potency of having
exclusive access to information and knowledge. The reality today in the modern, corporate
world is that the CEO and the lowest rung worker have the same access to same public
knowledge base. This means it is no longer a prized attribute of the elite, because in theory
and in practice, and amongst many societies around the world, distinctions based on access
have been erased. This even playing field has led to the role of management undergoing
unprecedented change. The remarkable proliferation of social media has created the
democratization of access in previously inaccessible sectors for the average citizen. An
ordinary citizen’s ability to directly address the most powerful and inaccessible person, such
as the president or prime minister of a country via Twitter or Facebook, has created a unique
information led dynamic, where it is becoming increasingly difficult to tell who is managing
whom.

Philosophy and management theory is the field of cultural practice and aesthetics that is
linked to customs and habits but also goes beyond them to the question what is
aesthetically and culturally a superior solution or aesthetically good. Philosophy as cultural
and aesthetic theory is a powerful tool to increase the cultural and aesthetic expertise of
management.

Philosophy must be interested in improving the performance of both, philosophy and

management, by the study of the philosophy of management. The relevance that philosophy
can have for management goes beyond management ethics or business ethics. In the
interaction between philosophy and management, there are three central fields,
management ethics, the cultural philosophy of management and of management culture,
and the onto- logy and epistemology of management and management theory, the philo-
sophy of science of management theory.

One link between power and wisdom is the idea of the common good, the idea that power
must serve the common good wisely. From the idea that the common good is one or the link
between power and wisdom, it can be derived that it is the manager’s duty to realize the
common good of the firm wisely.
Cultural philosophy becomes relevant for the management of the cultural value and the
aesthetics of consumer goods in satiated markets since the cultural surplus value of goods
becomes more and more the decisive comparative advantage of the firm. Its cultural
branding in a market that expects a cultural surplus of goods requires the creation of
experiences and their expression in a product in which the recipient or consumer can
recognize his or her own experiencing.

A resource by itself is nothing, it remains sterile until it is managed to provide the results. A
result is the consequence of purposeful activity, which is management. A manager must
therefore, plan, organize, direct and coordinate activities to convert the
sterile and inert resources into product resources. Management is therefore, the action of
getting things done through people. It means optimizing the use of human and material
resources for the attainment of desired objectives. In its effort to fulfill its functions of
planning, organizing, leading and controlling, the field of management has borrowed
extensively from different disciplines namely psychology, sociology, mathematics and
decision sciences.

Management as an art

Management is considered as an art rather than science mainly because managerial is

personal profession and intuitive. Therefore, management is an art, simple because
managing requires certain skills which are a personal possession of the managers. In
additional, management is an art of getting things done through others in dynamic and
mostly non-repetitive situations. The resources of men, machine and money have to be
coordinated against several constraints to achieve given objectives in the most efficient
manner. This requires skill.

Management as a science

Science can be described as a systematical body of knowledge based on proper findings and
exact principles and is capable of verification. It is a reservoir of fundamental truths and its
findings apply in all the situations. Science is knowledge as of facts and principles;
knowledge gained by systematic study or observation and experimentation. The methods
used in scientific inquiries are systematic and empirical. Moreover, information can be
ordered and analyzed and the result or
findings of scientific studies are cumulative. Based on this, management is a science because
it has developed some systematized knowledge.
Like other sciences management has also developed certain principles, laws and
generalization which are universal in nature and applicable wherever the efforts of the
people are to be coordinated. Managers often use a specific body of knowledge consisting
of principles, generalization, approaches and concepts to apply in certain situations. These
principles of management have been developed an formulated on the basis of observation,
research, analysis and experimentation and also based on the relationship of cause and
effect like other sciences. Furthermore, management deals with people and it is very difficult
to predict their behavior accurately.

Management empirical studies the man and the factors affecting him to understand human
behavior in the work place. It is therefore a behavioral science. Managers when faced with
managerial problems usually expect that there is a rational an objective way to determine
the correct course of action. Lastly, early management researchers subscribed to the vision
of managers as scientists. The scientific management movement was the primary drive of
this perspective.

The scientific management emphasis on both reducing the inefficiencies and on

understanding the psychology of workers, changed managers and employee attitudes
towards the practice of management. This is evident with the development of early scientific
theories of management such as the classical and scientific management theory by Fredrick
Taylor, neoclassical approach, Weber’s Theory of Bureaucracy, behavioural approach and
others which emphasized the scientific approach to management.

In conclusion, management is an art as well as a science. It involves both the elements of art
and science. It is considered an art because managing requires application of certain skills
and a science because it has an organized body of knowledge which contains certain
universal truths. The science provides the knowledge and the art deals with the application
of knowledge and skills. According to the American society of mechanical Engineers,
management is the art and science of preparing, organizing and directing human efforts to
control the forces and utilize the material of nature for the benefit of men
Management Thought

Management is defined as the art of getting things done by making the best use of available
resources. Over the passing centuries, organisational structure has undergone radical
changes, and simultaneously the process of management as well. Hence, several theories
were propounded over centuries which were considered crucial for understanding business
operations. These, when clubbed together, are called Management Thought.

Management thought has evolved over the centuries and can be classified as follows:

1. Classical School
2. Behavioural School
3. Quantitative School
4. Systems School
5. Contingency School

The Classical School of Management Thought refers to the pre Scientific Management
Period (before 1880) whose cornerstone belief was that employees have solely physical and
economical needs. Social needs such as career growth, job satisfaction, work-life balance are
non-existent and therefore, not important. Hence, this management thought practiced
division and specialisation of labour, organisational hierarchy and centralised decision
making process and focused on profit maximisation.

The 3 pillars of Classical school were Scientific Management Theory by F.W. Taylor,
Administrative Theory by Henry Fayol and Bureaucratic Management by Max Weber.

With the human relations movement, the management thought started changing and this
led to the Behavioural School, which focused on individual employees. It was aimed at
understanding the human behaviour in an organisational setting. This was followed by the
Quantitative School which relied heavily on application of Operations Management and
Management Information Systems. During the period of 1940s to 1970s, the focus was
shifted to use of statistical and mathematical models for increasing accuracy and
effectiveness of managerial decision making. The Systems School and Contingency School of
Management thought became popular in the latter half of 20th century. The systems school
modelled the organisation as a system for transforming inputs into outputs. The
organisation is affected by both internal and
external factors and seeks to achieve equilibrium. It was considered too complex but laid
the foundation of Contingency School of management thought, which considers that there
is no one best way of management. Hence, application of management principles has to
vary as per the situation at hand. It is determined on the basis of several factors like position-
power, organisational hierarchy and task structure.

According to Henry Fayol, "To manage is to forecast and to plan, to organise, to command, to
coordinate and to control".

According to Peter Drucker, "Management is a multi-purpose organ that manages business and
manages managers and manages workers and work”.

According to Harold Koontz, "Management is the art of getting things done through and with
people in formally organized groups”.

According to Mary Parker Fallett, "Management is the art of getting things done through
people".

Management is a managerial process

Management is a process and not merely a body of individuals. Those who perform this
process are called managers. The managers exercise leadership by assuming authority and
direct others to act within the organisation.

Management is a social process

Management takes place through people. The importance of human factor in management
cannot be ignored. A manager's job is to get the things done with the support and
cooperation of subordinates.

Management is action-based

Management is always for achieving certain objectives in terms of sales, profit, etc. It is a
result-oriented concept and not merely an abstract philosophy. It gives importance to
concrete performance through suitable actions. It is an action based activity.

Management involves achieving results through the efforts of others:

Management is the art of getting the things done through others. Managers are expected to
guide and motivate subordinates and get the expected performance from them.
Management acts as an activating factor.

Management is a group activity

Management is not an isolated individual activity but it is a collective activity or an activity of

a group. It aims at using group efforts for achieving objectives. Managers manage the
groups and coordinate the activities of groups functioning in an organisation.

Management is intangible

Management is not directly visible but its presence is noticed in the form of concrete results.
Management is intangible. It is like invisible spirit, which guides and motivates people
working in a business unit. Management is like government, which functions but is not
visible in physical form.

Management is all pervasive

Management is comprehensive and covers all departments, activities and employees.

Managers operate at different levels but their functions are identical. This indicates that
management is a universal and all pervasive process.

Management is an art, science as well as a profession

Management is an art because certain skills, essential for good management, are unique to
individuals. Management is a science because it has an organised body of knowledge.
Management is also a profession because it is based on advanced and cultivated knowledge.

Management aims at coordination of activities

Coordination is the essence of management. It gives one clear direction to the whole
organisation and brings unity and harmony in the whole business unit. For such
coordination, effective communication at all levels is essential.
Management is innovative

Management techniques are dynamic and innovative. They need to be adjusted as per the
requirements of the situations. Another manager need not repeat the decisions of one
manager. Similarly, a manager has to change his decisions under different situations.

Management is different from ownership

Management is concerned with the management of business activities. Managers are not
the owners but they manage the business on behalf of the owners. Separation of ownership
and management is a special feature of modem business organisation.

Management is dynamic

Business is influenced by changes in economic, social, political technological and human

resource. Management adjusts itself to the changing atmosphere making suitable forecasts
and changes in the policies. Hence, management is treated as a dynamic activity.

Management aims at achieving predetermined objectives

Management is a meaningful activity. All organisations are essentially groups of individuals

formed for achieving common objectives. An Organisation exists for the attainment of
specific objectives.

FUNCTIONS OF MANAGEMENT

The essential elements/components of Management Process are four.

1. Planning

2. Organising

3. Directing and

4. Controlling.
In addtion to the elements,

1. Motivating

2. Co-coordinating

3. Staffing and

4. Communicating.

The elements in the management process are actually the basic functions of management
these functions constitute the management process in practice. Management process is in
fact, management in practice. This process suggests what a manager is supposed to, do or
the basic functions that he has to perform while managing the job assigned to him.

PLANNING

Planning is the primary function of management. It involves determination of a course of

action to achieve desired results/objectives. Planning is the starting point of management
process and all other functions of management are related to and dependent on planning
function. Planning is the key to success, stability and prosperity in business. It acts as a tool
for solving the problems of a business unit. Planning plays a pivotal role in business
management It helps to visualize the future problems and keeps management ready with
possible solutions.

ORGANIZING

Organizing is next to planning. It means to bring the resources (men, materials, machines,
etc.) together and use them properly for achieving the objectives. Organization is a process
as well as it is a structure. Organizing means arranging ways and means for the execution of
a business plan. It provides suitable administrative structure and facilitates execution of
proposed plan. Organizing involves different aspects such as depart mentation, span of
control delegation of authority, establishment of superior-subordinate relationship and
provision of mechanism for co-ordination of various business activities
STAFFING

Staffing refers to manpower required for the execution of a business plan. Staffing, as
managerial function, involves recruitment, selection, appraisal, remuneration and
development of managerial personnel. The need of staffing arises in the initial period and
also from time to time for replacement and also along with the expansion and diversification
of business activities. Every business unit needs efficient, stable and cooperative staff for the
management of business activities. Manpower is the most important asset of a business
unit. In many organisations, manpower planning and development activities are entrusted
to personnel manager or HRD manager. 'Right man for the right job' is the basic principle in
staffing.

DIRECTING (LEADING)

Directing as a managerial function, deals with guiding and instructing people to do the work
in the right manner. Directing/leading is the responsibility of managers at all levels. They
have to work as leaders of their subordinates. Clear plans and sound organisation set the
stage but it requires a manager to direct and lead his men for achieving the objectives.
Directing function is quite comprehensive. It involves Directing as well as raising the morale
of subordinates. It also involves communicating, leading and motivating. Leadership is
essential on the part of managers for achieving organisational objectives.

COORDINATING

Effective coordination and also integration of activities of different departments are

essential for orderly working of an Organisation. This suggests the importance of
coordinating as management function. A manager must coordinate the work for which he is
accountable. Co-ordination is rightly treated as the essence of management. It may be
treated as an independent function or as a part of organisms function. Coordination is
essential at all levels of management. It gives one clear-cut direction to the activities of
individuals and departments. It also avoids misdirection and wastages and brings unity of
action in the Organisation. Co-ordination will not come automatically or on its own Special
efforts are necessary on the part of managers for achieving such coordination.
CONTROLLING

Controlling is an important function of management. It is necessary in the case of individuals

and departments so as to avoid wrong actions and activities. Controlling involves three
broad aspects: (a) establishing standards of performance, (b) measuring work in progress
and interpreting results achieved, and (c) taking corrective actions, if required. Business
plans do not give positive results automatically. Managers have to exercise effective control
in order to bring success to a business plan. Control is closely linked with other managerial
functions. It is rightly treated as the soul of management process. It is true that without
planning there will be nothing to control It is equally true that without control planning will
be only an academic exercise Controlling is a continuous activity of a supervisory nature.

MOTIVATING

Motivating is one managerial function in which a manager motivates his men to give their
best to the Organisation. It means to encourage people to take more interest and initiative
in the work assigned. Organisations prosper when the employees are motivated through
special efforts including provision of facilities and incentives. Motivation is actually inspiring
and encouraging people to work more and contribute more to achieve organisational
objectives. It is a psychological process of great significance.

COMMUNICATING

Communication (written or oral) is necessary for the exchange of facts, opinions, ideas and
information between individual’s and departments. In an organisation, communication is
useful for giving information, guidance and instructions. Managers should be good
communicators. They have to use major portion of their time on communication in order to
direct, motivate and co-ordinate activities of their subordinates. People think and act
collectively through communication. According to Louis Allen, "Communication involves a
systematic and continuing process of telling, listening and understanding”.
14 PRINCIPLES OF MANAGEMENT DESCRIBED BY HENRI FAYOL

1. DIVISION OF WORK

The specialization of the workforce according to the skills a person, creating specific
personal and professional development within the labour force and therefore increasing
productivity; leads to specialization which increases the efficiency of labour. By separating a
small part of work, the workers speed and accuracy in its performance increases. This
principle is applicable to both technical as well as managerial work.

2. AUTHORITY AND RESPONSIBILITY

The issue of commands followed by responsibility for their consequences. Authority means
the right of a superior to give order to his subordinates; responsibility means obligation for
performance. This principle suggests that there must be parity between authority and
responsibility. They are co-existent and go together, and are two sides of the same coin.

3. DISCIPLINE

Discipline refers to obedience, proper conduct in relation to others, respect of authority, etc.
It is essential for the smooth functioning of all organizations.

4. UNITY OF COMMAND

This principle states that every subordinate should receive orders and be accountable to one
and only one superior. If an employee receives orders from more than one superior, it is
likely to create confusion and conflict. Unity of Command also makes it easier to fix
responsibility for mistakes.

5. UNITY OF DIRECTION

All those working in the same line of activity must understand and pursue the same
objectives. All related activities should be put under one group, there should be one plan of
action for them, and they should be under the control of one manager. It seeks to ensure
unity of action, focusing of efforts and coordination of strength.
6. SUBORDINATION OF INDIVIDUAL INTEREST

The management must put aside personal considerations and put company objectives first.
Therefore the interests of goals of the organization must prevail over the personal interests
of individuals.

7. REMUNERATION

Workers must be paid sufficiently as this is a chief motivation of employees and therefore
greatly influences productivity. The quantum and methods of remuneration payable should
be fair, reasonable and rewarding of effort.

8. THE DEGREE OF CENTRALIZATION

The amount of power wielded with the central management depends on company size.
Centralization implies the concentration of decision making authority at the top
management. Sharing of authority with lower levels is called decentralization. The
organization should strive to achieve a proper balance.

9. SCALAR CHAIN

Scalar Chain refers to the chain of superiors ranging from top management to the lowest
rank. The principle suggests that there should be a clear line of authority from top to bottom
linking all managers at all levels. It is considered a chain of command. It involves a concept
called a "gang plank" using which a subordinate may contact a superior or his superior in
case of an emergency, defying the hierarchy of control. However the immediate superiors
must be informed about the matter

10. ORDER

Social order ensures the fluid operation of a company through authoritative procedure.
Material order ensures safety and efficiency in the workplace.

11. EQUITY

Employees must be treated kindly, and justice must be enacted to ensure a just workplace.
Managers should be fair and impartial when dealing with employees.
12. STABILITY OF TENURE OF PERSONNEL

The period of service should not be too short and employees should not be moved from
positions frequently. An employee cannot render useful service if he is removed before he
becomes accustomed to the work assigned to him.

13. INITIATIVE

Using the initiative of employees can add strength and new ideas to an organization.
Initiative on the part of employees is a source of strength for the organization because it
provides new and better ideas. Employees are likely to take greater interest in the
functioning of the organization.

14. ESPRIT DE CORPS

This refers to the need of managers to ensure and develop morale in the workplace;
individually and communally. Team spirit helps develop an atmosphere of mutual trust and
understanding. These can be used to initiate and aid the processes of change, organization,
decision making, skill management and the overall view of the management function.

SCIENTIFIC MANAGEMENT

Fredrick Winslow Taylor commonly known as ‟Father of ScientificManagement‟ started his

career as an operator and rose to the position of chief engineer. He conducted various
experiments during this process which forms the basis of scientific management. It implies
application of scientific principles for studying & identifying management problems.

According to Taylor, Scientific Management is an art of knowing exactly what you want your
men to do and seeing that they do it in the best and cheapest way‖. In Taylors view, if a work
is analysed scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of
management against hit or miss or Rule of Thumb.
According to Drucker, The cost of scientific management is the organized study of work, the
analysis of work into simplest element & systematic management of worker‘s performance
of each element.

PRINCIPLES OF SCIENTIFIC MANAGEMENT

1. Development of Science for each part of men’s job (replacement of rule of thumb)

a. This principle suggests that work assigned to any employee should be observed, analyzed
with respect to each and every element and part and time involved in it

b. This means replacement of odd rule of thumb by the use of method of enquiry, investigation,
data collection, analysis and framing of rules.

c. Under scientific management, decisions are made on the basis of facts and by the application
of scientific decisions.

2. Scientific Selection, Training & Development of Workers

a. There should be scientifically designed procedure for the selection of workers.

b. Physical, mental & other requirement should be specified for each and every job.

c. Workers should be selected & trained to make them fit for the job.

d. The management has to provide opportunities for development of workers having better

capabilities.

e. According to Taylor efforts should be made to develop each employee to his greatest level
and efficiency & prosperity.

3. Co-operation between Management & workers or Harmony not discord a.

Taylor believed in co-operation and not individualism.

b. It is only through co-operation that the goals of the enterprise can be achieved efficiently.

c. There should be no conflict between managers & workers.

d. Taylor believed that interest of employer & employees should be fully harmonized so as

to secure mutually understanding relations between them.

4. Division of Responsibility

a. This principle determines the concrete nature of roles to be played by different level of
managers & workers.

b. The management should assume the responsibility of planning the work whereas workers
should be concerned with execution of task.

c. Thus planning is to be separated from execution.

5. Mental Revolution

a. The workers and managers should have a complete change of outlook towards their mutual
relation and work effort.

b. It requires that management should create suitable working condition and solve all problems
scientifically.

c. Similarly workers should attend their jobs with utmost attention, devotion and carefulness.
They should not waste the resources of enterprise.

d. Handsome remuneration should be provided to workers to boost up their moral.

e. It will create a sense of belongingness among worker.

f. They will be disciplined, loyal and sincere in fulfilling the task assigned to them.

g. There will be more production and economical growth at a faster rate.

6. Maximum Prosperity for Employer & Employees

a. The aim of scientific management is to see maximum prosperity for employer and employees.

b. It is important only when there is opportunity for each worker to attain his highest efficiency.

c. Maximum output & optimum utilization of resources will bring higher profits for the
employer & better wages for the workers.

d. There should be maximum output in place of restricted output. e. Both managers & workers
should be paid handsomely.
TECHNIQUES/TOOLS OF SCIENTIFIC MANAGEMENT THEORY

1. Performance Standards

F.W. Taylor found out that there were no scientific performance standards. No one knew
exactly how much work a worker should do in one hour or in one day. The work was fixed
assuming rule of thumb or the amount of work done by an average worker. Taylor
introduced Time and Motion Studies to fix performance standards. He fixed performance
standards for time, cost, and quality of work, which lead to uniformity of work. As a result,
the efficiency of the workers could be compared with each other.

2. Differential Piece Rate System

Taylor observed that workers did as little work as possible. He felt that under existing wage
system, an efficient worker gained nothing extra. So, Taylor used the differential piece (unit)
rate system. Under differential piece rate system, a standard output was first fixed. Then
two wage rates were fixed as follows :-

• Low wage rate was fixed for those workers who did not produce the standard output.

• Higher wage rate was fixed for those workers who produced the standard output or
whoproduced more than the standard output.

• Differential piece-rate system

3. Functional Foremanship

Taylor started "Functional Foremanship". Here, 8 foremen (lower level manager or

supervisor) are required to supervise the workers. This is because one foremen cannot be an
expert in all the functions.

Taylor's functional foremanship consists of two groups of supervisors :

At the Planning Level or Office Level. At the Doing Level or Factory Level.

(a) At the Planning Level :-

Taylor separated planning from doing. At the planning level there were four supervisors. They
are :- Time and Cost Clerk : This boss prepares the standard time for completing the work and
cost of doing that work.
Route Clerk : This boss makes the exact route (way) through which each product has to travel
from a raw-material to a finished product.

Discipline Clerk : This boss looks after the discipline and absenteeism problems in the
organisation. Instruction Card Clerk : The boss gives instructions about how to do a particular
work.

(b) At the Doing Level :

At the doing level there were also four supervisors. They are :

Gang Boss : He is responsible for setting up the machines and tools and for direct supervision of
workers.

Speed Boss : He is responsible for maintaining a proper speed of work.

Repair Boss : He is responsible for the repairs and maintenance of machines.

Inspector Boss : He is responsible for maintaining the quality of production.

4. Mental Revolution

Taylor introduced the concept of "Mental Revolution". He said that the management and
workers should have a positive attitude towards each other. This will result in close
cooperation between them. This will increase productivity and profits.

5. Time Study

Time study means to record the time taken for doing each part of a job. The full job is first
observed and analysed. Then it is divided into different elements (parts). Later the time
taken for doing each part of the job is recorded. This is done by using a stop clock. Time
study helps the management to know exactly how much time it will take to do a particular
job. This helps the management to fix the amount of work to be done by each worker in one
hour or in one day. That is, management can fix a standard output of work for a certain
period of time.

Taylor advised all managers to do time study. This will prevent the workers from passing
time, working slowly and doing less work. Time study helps to increase the productivity of
the organisation.
6. Fatigue and Motion Study

Frank and Lillian Gilbreth introduced fatigue and motion studies. Fatigue and motion studies
find out and remove unnecessary and wasteful movements while doing the job.

According to the Gilbreths, fatigue (tiredness) and motion (movements or actions) are
interlinked. Every motion that is removed will reduce fatigue. Using cameras, they studied
workers (masons) doing common jobs like bricklaying. They found that the workers do many
wasted motions while doing their work. This resulted in fatigue. So, the Gilbreths asked the
workers to stop all unnecessary motions and to do only the motions which were necessary
for doing the job. They reduced the bricklayers' motions from 18 to 5. This also reduced the
fatigue of the bricklayers. Therefore, productivity of workers increased.

7. Gantt Charts

Henry Gantt invented the Gantt chart. This chart shows the planned work and the
completed work at each stage of production. It also shows the time taken to do the work.

• Gantt chart is the basis for following two concepts :-

• The Critical Path Method (CPM), and

• The Program Evaluation Review Technique (PERT).

CRITICISM OF SCIENTIFIC MANAGEMENT

Although it is accepted that the scientific management enables the management to put
resources to its best possible use and manner, yet it has not been spared of severe criticism.

WORKERS VIEWPOINT

1. Unemployment Workers feel that management reduces employment opportunities from

them through replacement of men by machines and by increasing human
productivity less workers are needed to do work leading to chucking out from their jobs.

2. Exploitation Workers feel they are exploited as they are not given due share in increasing
profits which is due to their increased productivity. Wages do not rise in proportion as rise in
production. Wage payment creates uncertainty & insecurity (beyond a standard output,
there is no increase in wage rate).

3. Monotony Due to excessive specialization the workers are not able to take initiative on
their own. Their status is reduced to being mere cogs in wheel. Jobs become dull. Workers
loose interest in jobs and derive little pleasure from work.

4. Weakening of Trade Union To everything is fixed & predetermined by management. So it

leaves no room for trade unions to bargain as everything is standardized, standard output,
standard working conditions, standard time etc. This further weakens trade unions, creates
a rift between efficient & in efficient workers according to their wages.

5. Over speeding The scientific management lays standard output, time so they have to rush
up and finish the work in time. These have adverse effect on health of workers. The workers
speed up to that standard output, so scientific management drives the workers to rush
towards output and finish work in standard time.

EMPLOYER’S VIEW POINT

1. Expensive – Scientific management is a costly system and a huge investment is required

in establishment of planning dept., standardization, work study, training of workers. It may
be beyond reach of small firms. Heavy food investment leads to increase in overhead costs.

2. Time Consuming – Scientific management requires mental revision and complete

reorganizing of organization. A lot of time is required for work, study, standardization &
specialization. During this overhauling of organization, the work suffers.
DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION

Management is a doing function because managers get work done under their supervision.

Administration is a thinking function because plans & policies are determined under it.

On the basis of
FUNCTIONS

On the basis
of USAG
HAWTHORNE EXPERIMENTS

The Hawthorne effect is named after what was one of the most famous experiments (or,
more accurately, series of experiments) in industrial history. It marked a sea change in
thinking about work and productivity. Previous studies, in particular Frederick Taylor's
influential ideas, had focused on the individual and on ways in which an individual's
performance could be improved. Hawthorne set the individual in a social context,
establishing that the performance of employees is influenced by their surroundings and by
the people that they are working with as much as by their own innate abilities.

The experiments took place at Western Electric's factory at Hawthorne, a suburb of Chicago,
in the late 1920s and early 1930s. They were conducted for the most part under the
supervision of Elton Mayo, an Australian-born sociologist who eventually became a
professor of industrial research at Harvard.

4 PHASES OF HAWTHORNE EXPERIMENTS

1. Illumination Experiments

2. Relay Assembly Test Room Experiments

3. Mass Interviewing Programme

4. Bank Wiring Observation Room Experiment.

1. ILLUMINATION EXPERIMENTS- Illumination experiments were undertaken to find out

how varying levels of illumination (amount of light at the workplace, a physical factor)
affected the productivity. The hypothesis was that with higher illumination, productivity will
increase. In the first series of experiments, a group of workers was chosen and placed in two
separate groups. One group was exposed to varying intensities of illumination. Since this
group was subjected to experimental changes, it was termed as experimental group.
Another group, called as control group, continued to work under constant intensities of
illumination. The researchers found that as they increased the illumination in the
experimental group, both groups increased production. When the intensity of illumination
decreased, the production continued to increase in both the groups. The production in the
experimental group decreased only when the illumination was decreased to the level of
moonlight. The decrease was due to light falling much below the normal level. Thus, it was
concluded
that illumination did not have any effect on productivity but something else was interfering
with the productivity. At that time, it was concluded that human factor was important in
determining productivity but which aspect was affecting, it was not sure. Therefore, another
phase of experiments was undertaken.

2. RELAY ASSEMBLY TEST ROOM EXPERIMENTS - Relay assembly test room experiments
were designed to determine the effect of changes in various job conditions on group
productivity as the illumination experiments could not establish relationship between
intensity of illumination and production. For this purpose, the researchers set up a relay
assembly test room two girls were chosen.

These girls were asked to choose for more girls as co-workers. The work related to the
assembly of telephone relays. Each relay consisted of a number of parts which girls
assembled into finished products. Output depended on the speed and continuity with which
girls worked. The experiments started with introducing numerous changes in sequence with
duration of each change ranging from four to twelve weeks.

An observer was associated with girls to supervise their work. Before each change was
introduced, the girls were consulted. They were given opportunity to express their
viewpoints and concerns to the supervisor. In some cases, they were allowed to take
decisions on matters concerning them.

FOLLOWING WERE THE CHANGES AND RESULTANT OUTCOMES:

1. The incentive system was changed so that each girl’s extra pay was based on the other
five rather than output of larger group, say, 100 workers or so. The productivity increase as
compared to before.

2. Two five- minute rests one in the morning session and other in evening session were
introduced which were increased to ten minutes. The productivity increased.

3. The rest period was reduced to five minutes but frequency was increased. The
productivity decreased slightly and the girls complained that frequent rest intervals affected
the rhythm of the work.

4. The number of rest was reduced to two of ten minutes of each, but in the morning, coffee
or soup was served along with the sandwich and in the evening, snack was provided. The
productivity increased.
5. Changes in working hours and workday were introduced, such as cutting an hour off the
end of the day and eliminating Saturday work. The girls were allowed to leave at 4.30 p.m.
instead of usual 5.00 p.m. and later at 4.00 p.m. productivity increased.

As each change was introduced, absenteeism decreased, morale increased, and less
supervision was required. It was assumed that these positive factors were there because of
the various factors being adjusted and making them more positive. At this time, the
researchers decided to revert back to original position, that is, no rest and other benefits.
Surprisingly, productivity increased further instead of going down.

This development caused a considerable amount of redirection in thinking and the result
implied that productivity increased not because of positive changes in physical factors but
because of the change in girls’ attitudes towards work and their work group.

They developed a feeling of stability and a sense of belongings. Since there was more
freedom of work, they developed a sense of responsibility and self-discipline. The
relationship between supervisor and workers became close and friendly.

3. MASS INTERVIEWING PROGRAMME:

During the course of experiments, about 20,000 interviews were conducted between 1928
and 1930 to determine employees’ attitudes towards company, supervision, insurance plans,
promotion and wages. Initially, these interviews were conducted by means of direct
questioning such as “do you like your supervisor?” or “is he in your opinion fair or does he
have favorites?” etc.

This method has disadvantage of stimulating antagonism or the oversimplified ‘yes’ or ‘no’
responses which could not get to the root of the problem, the method was changed to non-
directive interviewing where interviewer was asked to listen to instead of talking, arguing or
advising. The interview programme gave valuable insights about the human behaviour in the
company.
SOME OF THE MAJOR FINDINGS OF THE PROGRAMME WERE AS FOLLOWS:

1. A complaint is not necessarily an objective recital of facts; it is a symptom of personal

disturbance the cause of which may be deep seated.

2. Objects, persons or events are carriers of social meanings. They become related to
employee satisfaction or dissatisfaction only as the employee comes to view them from his
personal situation.

3. The personal situation of the worker is a configuration, composed of a personal

preference involving sentiments, desires and interests of the person and the social reference
constituting the person’s social past and his present interpersonal relations.

4. The position or status of worker in the company is a reference from which the worker
assigns meaning and value to the events, objects and features of his environment such as
hours of work, wages, etc.

4. The social organisation of the company represents a system of values from which the
worker derives satisfaction or dissatisfaction according to the perception of his social status
and the expected social rewards.

5. The social demands of the worker are influenced by social experience in groups both
inside and outside the work plant.

During the course of interviews, it was discovered that workers’ behaviour was being
influenced by group behaviour. However, this conclusion was not very satisfactory and,
therefore, researches decided to conduct another series of experiments. As such, the
detailed study of a shop situation was started to find out the behaviour of workers in small
groups.

4. BANK WIRING OBSERVATION ROOM EXPERIMENT:

These experiments were conducted to find out the impact of small groups on the
individuals. In this experiment, a group of 14 male workers were formed into a small work
group. The men were engaged in the assembly of terminal banks for the use in telephone
exchanges.
The work involved attaching wire with switches for certain equipment used in telephone
exchanges. Hourly wage for each worker was fixed on the basis of average output of each
worker. Bonus as also payable on the basis of group effort.

It was expected that highly efficient workers would bring pressure on less efficient workers
to increase output and take advantage of group incentive plan. However, the strategy did
not work and workers established their own standard of output and this was enforced
vigorously by various methods of social pressure. The workers cited various reasons for this
behaviour viz. fear of unemployment, fear of increase in output, desire to protect slow
workers etc.

The Hawthorne experiments clearly showed that a man at work is motivated by more than
the satisfaction of economic needs. Management should recognise that people are
essentially social beings and not merely economic beings. As a social being, they are
members of a group and the management should try to understand group attitudes and
group psychology.

THE FOLLOWING WERE THE MAIN CONCLUSIONS DRAWN BY PROF. MAYO ON THE BASIS
OF HAWTHORNE STUDIES:

1. Social Unit: A factory is not only a techno-economic unit, but also a social unit. Men are
social beings. This social characteristic at work plays an important role in motivating people.
The output increased in Relay Room due to effectively functioning of a social group with a
warm relationship with its supervisors.

2. Group Influence: The workers in a group develop a common psychological bond uniting
them as £ group in the form of informal organisation. Their behaviour is influenced by these
groups. Pressure of a group, rather than management demands, frequently has the
strongest influence on how productive workers would be.

3. Group Behaviour: Management must understand that a typical group behaviour can
dominate or even supersede individual propensities.

4. Motivation: Human and social motivation can play even a greater role than mere
monitory incentives in moving or motivating and managing employee group.
5. Supervision: The style of supervision affects worker’s attitude to work and his
productivity. A supervisor who is friendly with his workers and takes interest in their social
problems can get co-operation and better results from the subordinates.

6. Working Conditions: Productivity increases as a result of improved working conditions in

the organisation.

7. Employee Morale: Mayo pointed out that workers were not simply cogs, in the
machinery, instead the employee morale (both individual and in groups) can have profound
effects on productivity.

8. Communication: Experiments have shown that the output increases when workers are
explained the logic behind various decisions and their participation in decision making brings
better results.

9. Balanced Approach: The problems of workers could not be solved by taking one factor
i.e. management could not achieve the results by emphasizing one aspect. All the things
should be discussed and decision be taken for improving the whole situation. A balanced
approach to the whole situation can show better results.

CRITICISM OF HAWTHORNE STUDIES / EXPERIMENTS

The Hawthorne Experiments are mainly criticised on the following grounds :-

Lacks Validity : The Hawthorne experiments were conducted under controlled situations.
These findings will not work in real setting. The workers under observation knew about the
experiments. Therefore, they may have improved their performance only for the
experiments.

More Importance to Human Aspects : The Hawthorne experiments gives too much
importance to human aspects. Human aspects alone cannot improve production. Production
also depends on technological and other factors.

More Emphasis on Group Decision-making : The Hawthorne experiments placed too much
emphasis on group decision-making. In real situation, individual decision-making cannot be
totally neglected especially when quick decisions are required and there is no time to consult
others.
Over Importance to Freedom of Workers : The Hawthorne experiments gives a lot of
importance to freedom of the workers. It does not give importance to the constructive role
of the supervisors. In reality too much of freedom to the workers can lower down their
performance or productivity.

A system in simple terms is a set of interrelated parts. It is a group of interrelated but

separate elements working towards a common purpose. The arrangement of elements must
be orderly, there must be proper communication facilitating interaction between the
elements and finally the interaction should lead to achieve a common goal. The organization
transforms input into a variety of outputs and offers the same to the external environment
in the form of products good and services. Sale of the output provides the necessary energy
(feedback) to the system cycle.

The system approach provides a unified focus to organizational efforts. A major contribution
of the system approach results from its strong emphasis on the interrelatedness or
mutuality of the parts of an organization. Another important benefit of system theory lies in
its treatment of the organization as an open system. A close system imports something from
the environment and exports something into the environment.

Ludwig von Bertalanffy is called the Father of System Approach.

“In order to understand an organized whole, we must know both the parts as well as the
relation between them.” - Sir Ludwig von Bertalanffy,

FEATURES OF SYSTEM APPROACH TO MANAGEMENT

Open or closed systems : Systems may be either open or closed:

An open system is one, which depends on the outside environment for survival. A closed
system does not interact with the environment.

Subsystem : The full system is made up of many parts. Each of these parts is called a
subsystem. A system may be a subsystem of a larger system. For e.g. A department is a
subsystem of a plant. A plant is a subsystem of a company.
Synergy : Synergy means that the whole is greater than the sum of its parts. In an
organization, when different departments co-operate and interact, they become more
productive. This is called synergy.

Defined boundaries : Each system has a boundary that separates it from its environment. In
case of a closed system, the system boundary is rigid. However, in an open system, the
boundary is flexible. A business organization, has boundaries with many external systems
like creditors, suppliers, customers, government agencies, etc. The system is inside the
boundary, the environment is outside the boundary.

Feedback mechanism : A system can adjust itself to the changing environment through the
feedback mechanism. Feedback helps the system to find out and correct its mistakes.

Multidisciplinary : Management system uses information from many disciplines such as

psychology, sociology, ecology, economics, mathematics, statistics, operations research,
systems analysis, etc. Therefore, it is multidisciplinary in nature.

Consideration of whole system : No part of the system can be fully studied and understood
without properly understanding all of its parts. So instead of dealing separately with
different parts of one organization, the manager must study the entire organization as a
whole. For example, in order to understand the working of the finance, production or
marketing department, he/she must understand the company as a whole. It is because the
activity of any one part of the company affects the activity of its every other part.

Input-output system : A business organization is an input-output system. Inputs consist of

human, physical and financial resources obtained from the environment. These resources are
converted into outputs of products and services.

THE CONTRIBUTIONS OF SYSTEM APPROACH TO MANAGEMENT:

• Under a system approach, managers have a good view of the organization.

• It gives importance to the interdependence of the different parts of an organization and

its environment.

• It foretastes consequences and plan actions.

• Systems thinking warn managers against adopting piecemeal approach to the problem
solving.

CONTINGENCY APPROACH OF MANAGEMENT

The contingency approach believes that it is impossible to select one way of managing that
works best in all situations like promoted by Taylor. Their approach is to identify the
conditions of a task (scientific management school), managerial job (administrative
management school) and person (human relations school) as parts of a complete
management situation and attempt to integrate them all into a solution which is most
appropriate for a specific circumstance. Contingency refers to the immediate (contingent or
touching) circumstances.

The manager has to systematically try to identify which technique or approach will be the
best solution for a problem which exists in a particular circumstance or context.

The contingency approach seeks to apply to real life situations ideas drawn from various
schools of management thought. They claim that no one approach is universally applicable
and different problems and situations require different approaches. Managers must try to
find the approach that is the best for them in a certain given situation, so they can achieve
their goals.

It is important to note that the contingency approach stresses the need for managers to
examine the relationship between the internal and external environment of an organization.
Critics of the contingency approach have blamed it to lack theoretical foundation and are
basically intuitive. Managers today are advised to analyze a situation and use ideas from the
various schools of thought to find an appropriate combination of management techniques
to meet the needs of the situation.

BUREAUCRATIC MANAGEMENT AND ITS CHARACTERISTICS.

Max Weber contributed the theory of bureaucracy to the management thought. He used
the word; bureaucracy to the specific king of administrative organization whose
characteristics are given below; Max Weber‘s main contribution to management is his
theory of authority structure and his description of organizations based on the nature
of authority relations within them. It was Weber‘s contention that there are there types of
legitimate authority which run as follows:

• Rational legal authority - Obedience is owed to a legally established position or rank within
the hierarchy of a business, military unit, government, and so on.

• Traditional authority- People obey a person because he belongs to certain class or

occupies a position traditionally recognized as possessing authority, such as a royal family.

• Charismatic authority - Obedience is based on the followers‘ belief that a person has some
special power or appeal.

CHARACTERISTICS OF BUREAUCRACY

A bureaucratic organization shows the following characteristics:

• Division of work- There is a high degree of division of work at both the operative and
administrative levels. This leads to specialization of work

• Hierarchy of positions- There is a hierarchy of authority in the organization. Each lower

position is under the control of a higher one. Thus, there is unity of command.

• Rules and regulations- The rules, regulations and procedures are clearly laid down by the
top administration. Their benefits are as under:

• Impersonal conduct- There is impersonality of relationships among the organizational

members. The decisions are entirely guided by rules and regulations and are totally
impersonal. There is no room for emotions and sentiments in this type of structure

• Staffing- The personal are employed by a construal relationship between the employee
and employer. The employees get salary every month which is based on the job they
handle and also the length of service.

• Technical competence- The bureaucrats and neither elected nor inherited, but they are
appointed thorugh selection. Promotions in bureaucracies are also based on technical
qualifications and performance
CLASSICAL PERSPECTIVE OF MANAGEMENT

The Empirical School seeks to generalize the nature of management based on the
experience of successful managers. The basic theme of this assumption is that if a particular
business operation is successful, or if a particular problem was effectively tackled by
application of a particular strategy, then the methods of strategies through which success
was achieved by the managers could be equally effectively used by others in the case of
similar business situations in future.

The basic principles laid down by the Classical School may be summed up as follows:

1. Scalar chain: It is the fore-runner of the hierarchy principle under which authority flows
from the top to the bottom level managerial positions.

2. Unity of command: It lays down that each individual should only receive orders from one
hierarchical superior.

3. Exception: It emphasizes, maximum delegation of authority such that the superior is

required to intervene only is the case of non-routine, exceptional tasks.

4. Span of control :- It advocates that each superior should only have a manageable
number of subordinates to direct and control

5. Specialization: It emphasizes differentiation of organizational activities based on

objectives, processes, location, clients, etc.

6. Scientific method: It advocates the use of experimental methods to develop sound

organizational and management methods.
Griseri (2013) explains the importance of the field by saying that “It is not too much of an
exaggeration to say that we live in a managed world” While that seems to be true, since we
have no basis for comparison, it might be wise to recognise explicitly how profoundly and
fundamentally challenging the concept of a “managed world” is to the inherited way of
thinking about society.

The corporatist structure, which may be central for the dominance of management, was not
considered central by Adam Smith. In developing his economic philosophy, he was generally
quite skeptical on the few occasions in which he discussed joint-stock enterprises. Further
discussion of this background might help underline for students how fundamental and
important the study of philosophy of management is for our current world. Griseri says that
philosophy is not to be evaluated by the conclusions it reaches but by the processes it takes
to reach them.

Henry Fayol and Frederick Winslow Taylor made outstanding contribution to

development of management thought. Fayol wrote as a practical man of business reflecting
on his long managerial career and setting drown the principles he had observed. He clearly
specified the functions of management by a systematic analysis of management process.
This isolation and analysis of management as a separate discipline was his original
contribution to the body of management theory. He was father of management principles
many of which have stood the test of time. Frederick W. Taylor was a pioneer who
propounded principles of Scientific Management. Taylor worked in different capacities in
steel industry saw the urgent necessity for elimination of wastages rampant in industrial
organization. He observed that the only way to attract wastages and achieve efficiency to
apply method of science to the field of management. They both applied scientific methods
to the problems of management. Their work was essentially complementary; different in
their approach was merely reflection of their different careers. If we call Taylor the “Father
of Scientific Management”, it would be fair to describe Fayol as the “Father of
Management”.

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 historical links. It is best to consider not only management
pioneers' management theories, but also the contextual and environmental factors that
helped to clarify the developmental process behind the theories. Therefore, management
pioneers may be easily placed along a historical timeline.
Using the work of Daniel Wren as a guide, the following categories are employed:
(1) early management thought;
(2) the scientific management era;
(3) the social man era; and
(4) the modern era.

EARLY MANAGEMENT THOUGHT:

THE ECONOMIC FACET

Adam Smith and James Watt have been identified as the two men most responsible for
destroying the old England and launching the world toward industrialization. Adam Smith
brought about the revolution in economic thought and James Watt's steam engine provided
cheaper power that revolutionized English commerce and industry. In doing so, they also
laid the foundation for modern notions of business management theory and practice.

ADAM SMITH.
Adam Smith (1723–1790) was a Scottish political economist. His Wealth of Nations, published
in 1776, established the "classical school" and with its publication, he became the father of
"liberal economics." Smith argued that market and competition should be the regulators of
economic activity and that tariff policies were destructive. The specialization of labor was
the mainstay of Smith's market system. According to Smith, division of labor provided
managers with the greatest opportunity for increased productivity.

JAMES WATT AND MATTHEW BOULTON.

James Watt (1736–1819), aided by Matthew Boulton (1728–1809), and building on the work
of his predecessors, developed his first workable steam engine in 1765. Together the
partners founded the engineering firm of Boulton, Watt, and Sons.
Recognized as Watt's greatest breakthrough, in 1971 he developed a steam engine with
rotary, rather than the traditional up-and-down, movement. This made the engine more
adaptable to factory uses as the engine replacing water wheel power for grinding grain,
driving textile machines, and operating bellows for iron works.
Steam power lowered production costs, lowered prices, and expanded markets. In 1800 the
sons of Boulton and Watts took over the management of the company and
instituted one of the first complete applications of scientific management. In this plant there
is evidence of market research, including machine layout study involving workflow,
production standards, cost accounting, employee training, employee incentives, and
employee welfare programs.

EARLY MANAGEMENT THOUGHT: MANAGEMENT PIONEERS IN THE FACTORY SYSTEM

The division of labor, combined with the advances in technology, provided the economic
rationale for the factory system. However, the factory system brought new problems for
owners, managers, and society. Four management pioneers proposed solutions for coping
with the pressures of the new large-scale industrial organizations. They were Robert Owens,
Charles Babbage, Andrew Ure, and Charles Dupin.

ROBERT OWENS.
Robert Owens (1771–1858) was a successful Scottish entrepreneur and a utopian socialist
who sowed the first seeds of concern for the workers. He was repulsed by the working
conditions and poor treatment of the workers in the factories across Scotland. Owen
became a reformer. He reduced the use of child labor and used moral persuasion rather than
corporal punishment in his factories. He chided his fellow factory owners for treating their
equipment better than they treated their workers.
Owen deplored the evils of the division of labor and in his ideal system believed each man
would do a number of different jobs switching easily from one job to another. Additionally,
Owen hated the modern factory system, so he decided to revolutionize it. In 1813 he
proposed a factory bill to prohibit employment of children under the age of ten and to limit
hours for all children to 10 1 /2 hours per day with no night work. The bill became law six
years later, but was limited to cotton mills, reduced the age limit to nine, and included no
provision for inspections; therefore, the law had little impact.
Feeling frustrated in his attempts to reform Britain, Owen traveled to America in 1824. He
continued on to New Harmony, Indiana, where he had purchased a large plot of land. New
Harmony was the first and most famous of sixteen U.S.-based Owenite communities
appearing between 1825 and 1829. None, however, lasted more than a few years as full-
fledged socialist communities.
CHARLES BABBAGE.
Charles Babbage (1792–1871) is known as the patron saint of operations research and
management science. Babbage's scientific inventions included a mechanical calculator (his
"difference engine"), a versatile computer (his "analytical engine"), and a punch-card
machine. His projects never became a commercial reality; however, Babbage is considered
the originator of the concepts behind the present day computer.
Babbage's most successful book, On the Economy of Machinery and Manufacturers,
described the tools and machinery used in English factories. It discussed the economic
principles of manufacturing, and analyzed the operations; the skills used and suggested
improved practices.
Babbage believed in the benefits of division of labor and was an advocate of profit sharing.
He developed a method of observing manufacturing that is the same approach utilized
today by operations analysts and consultants analyzing manufacturing operations.

ANDREW URE AND CHARLES DUPIN.

Andrew Ure (1778–1857) and Charles Dupin (1784–1873) were early industrial educators. Ure
provided academic training at Anderson's College in Glasgow for managers in the early
factory system. He published a text in 1835 that dealt mainly with the technical problems of
manufacturing in the textile industry, but also dealt with problems of managing.
Obviously pro-management, Ure advocated an "automatic plan" to provide harmony and to
keep any individual worker from stopping production. He was a defender of the factory
system and believed workers must recognize the benefits of mechanization and not resist its
introduction.
Dupin was a French engineer and professor who pioneered industrial education in France.
He is credited with having a great influence on the writings of Henri Fayol. Dupin published
Discours sur le Sort Des Ouvriers, translated Discourse on the Condition of the Workers, in
1831. This manuscript included concepts such as time study and the need to balance
workloads after introducing division of labor. He wrote of the need for workers to receive
concise instructions and the need to discover and publish the best way to perform work with
the least amount of worker energy.
THE SCIENTIFIC MANAGEMENT ERA
Since management relied heavily on engineers for advice in the new factories, it is not
surprising that associations of engineers were some of the first to examine and write about
management problems. The American Society of Mechanical Engineers (ASME) was
founded in 1880 and was one of the first proponents of the search for scientific
management.

HENRY TOWNE
Henry Towne, president of the Yale and Towne Manufacturing Company, began applying
systematic management practices as early as 1870. In 1866 he wrote a paper, The Engineer
as an Economist, that suggested that ASME become a clearinghouse for information on
managerial practices, since there was no management association.
Towne also published several papers and a book, Evolution of Industrial Management, on
the use of "gain sharing" to increase worker productivity. In his last book Towne contrasted
the status of scientific management in 1886 and in 1921, noting the establishment of
industrial management courses, and crediting Frederick Taylor as the apostle of the scientific
movement.

FREDERICK A. HALSEY.
Frederick A. Halsey was another engineer who wrote papers presented to ASME outlining
his ideas about wages. He attacked the evils of profit sharing and proposed a special
"premium plan" for paying workers based on time saved. Halsey proposed incentives based
on past production records, including a guaranteed minimum wage and a premium for not
doing work. Halsey's plan, along with Taylor's ideas on piece rates, had a major influence in
the United States and Great Britain on the design of pay schemes.

HENRY METCALFE.
Another early application of the scientific principles of management occurred when Captain
Henry Metcalfe developed a system of controls that he applied to the management of the
Frankford Arsenal. In 1885, Metcalfe published The Cost of Manufactures and the
Administration of Workshops, Public and Private. This book is considered a pioneer work in
the area of management science.
DANIEL MCCALLUM.
Unlike many industries, the rail-road industry forced managers to develop special ways of
managing a labor force that was dispersed over a wide geographical area. Daniel McCallum
(1815–1878) became general superintendent of the Erie Railroad in 1854. He developed
principles of management that included discipline, division of labor, detailed job
descriptions, promotion and pay based on merit, frequent and accurate reporting of worker
performance, and a clearly defined chain of command.
McCallum also designed a formal organizational chart and a sophisticated information
management system using the telegraph. His system and rules, however, ran afoul of the
militant union and he resigned after a six-month strike. Later, McCallum successfully ran the
Northern railroads during the Civil War. He also served as a management consultant for
several railroads after the war.

FREDERICK TAYLOR.
Probably the most famous management pioneer of all is Frederick W. Taylor (1856– 1915),
the father of scientific management. Taylor rose from common laborer to chief engineer in
six years, and completed a home study course to earn a degree in mechanical engineering in
1883.
In trying to overcome soldiering by the workers, Taylor began a scientific study of what
workers ought to be able to produce. This study led to the beginnings of scientific
management. Taylor used time studies to break tasks down into elementary movements,
and designed complementary piece-rate incentive systems.
Taylor believed management's responsibility was in knowing what you want workers to do
and then seeing that they do it in the best and cheapest way. He developed many new
concepts such as functional authority. In other words, Taylor proposed that all authority was
based on knowledge, not position. He wrote Shop Management in 1903, became the
president of the American Society of Mechanical Engineers in 1906, and was a widely
traveled lecturer, lecturing at Harvard from 1909 to 1914.
In 1911, Taylor published Principles of Scientific Management in 1911. Its contents would
become widely accepted by managers worldwide. The book described the theory of
scientific management. Scientific management was defined as methods aimed at
determining the one best way for a job to be done.
During this same period organized labor waged an all-out war on Taylorism resulting in a
congressional investigation. In February of 1912, however, the committee reported finding
no evidence to support abuses of workers or any need for remedial legislation.
Taylor did not neglect the human side of work, as often suggested. He simply emphasized
the individual worker not the group. Taylor called for a revolution that would fuse the
interests of labor and management into a mutually rewarding whole.

HENRY GANTT.
Henry Gantt (1861–1919) worked with Taylor at the Midvale Steel Company and was
considered a Taylor disciple. Gantt felt the foreman should teach the workers to be
industrious and cooperative which, in turn, would facilitate the acquisition of all other
knowledge.
Gantt also designed graphic aids for management called Gantt charts using horizontal bars
to plan and control work. Similar to Taylor, Gantt called for the scientific study of tasks,
movements, working conditions, and worker cooperation. He also focused on the
connection between the involvement of management and financial interests.

FRANK GILBRETH.
Frank Gilbreth (1868–1924) and Lillian Gilbreth (1878–1972) were a husband and wife team
that brought many significant contributions, as well as color, to scientific management.
Frank began working at age seventeen as an apprentice bricklayer, and later became a chief
superintendent and independent contractor. Frank's early work parallels Taylor's and, in
later years, Frank formed his own management consulting company, which was closely
associated with scientific management methods.
Frank Gilbreth published a series of books describing the best way of laying bricks, handling
materials, training apprentices, and improving methods while lowering costs and paying
higher wages.
In 1907, Frank Gilbreth met Frederick Taylor and soon became one of Taylor's most devoted
advocates. Frank turned his attention away from construction, and extended his interest in
motion study (similar to Taylor's time study) to the general field of management.
In order to supplement the human eye, Gilbreth used motion picture cameras, lights, and
clocks calibrated in fractions of minutes to create "micromotion" study. Gilbreth also
developed a list of seventeen basic motions he called "therbligs" (Gilbreth spelled
backwards) to help analyze any worker movement. Unfortunately, the partnership of Frank
and Lillian came to an end in 1924 when Frank died of a heart attack. Lillian continued their
work through motion study seminars and consulting, later becoming a professor of
management at Purdue University (1935–1948).
LILLIAN GILBRETH.
Dr. Lillian Gilbreth, known as the first lady of management, played an important role in
Frank's research and made many contributions of her own. Lillian pursued a degree in
psychology, and in addition to her marriage and family of twelve, she assisted Frank with his
work. Lillian's thesis-turned-book, The Psychology of Management, is one of the earliest
contributions to understanding the human side of management.
Lillian faced many incidents of discrimination during her life, including the fact that her book
could only be published if her initials were used so readers would not know she was a
woman. Dr. Gilbreth's work was always more management than psychology. Her work
illustrated concern for the worker and attempted to show how scientific management
would benefit the individual worker, as well as the organization. Lillian wrote about
reduction of worker fatigue, how to retool for disabled veteran workers returning to the
workplace, and how to apply principles of scientific management to the home.

HARRINGTON EMERSON.
Harrington Emerson (1853–1931) was educated in Germany and symbolized a new breed of
"efficiency engineers" who were bringing new methods of time and cost savings to
American industry. Emerson practiced his system as general manager of the Burlington
Railroad, but saw the need for applications of his system in other industries.

The Engineering Magazine published a series of articles by Emerson in 1908 and 1909 that
were later issued as a single volume. To Emerson, organization was one of the greatest
problems that led to inefficiency. Emerson embraced the general staff concept where each
firm was to have a chief of staff and four major sub groupings of staff under him: one for
employees, one for machines, one for materials, and one for methods. Staff advice was
available to all levels and focused on planning.
Emerson made other contributions in the areas of cost accounting and in setting standards
for judging workers and shop efficiency. In 1913, Emerson published Twelve Principles of
Efficiency. This publication became a landmark in the history of management thought.
Harrington Emerson achieved renown in his time and his legacy lives on today.
MORRIS COOKE.
While Taylor, the Gilbreths, Gantt, and Emerson were working with industrial enterprises,
Morris Cooke (1872–1960) was extending the gospel of efficiency in non-industrial
organizations. Cooke focused his attention on educational and municipal organizations.
Cooke conducted a study of administration in educational organizations funded by the
Carnegie Foundation for the Advancement of Teaching. The resulting study was a bombshell
in the academic world. Cooke's findings included, among other things, widespread use of
inbreeding (hiring your own graduates), inefficient committee management, autonomous
departments working against university coordination, and pay based on tenure.
In 1911, Cooke was selected as director of public works and brought scientific management
to the governance of Philadelphia. In four years he saved the city over $1 million in garbage
collection costs alone. Cooke wrote Our Cities Awake (1918) to put forth his case for using
scientific management for better-managed municipalities.
Cooke became a close friend of Samuel Gompers, president of the American Federation of
Labor, and tried to bring labor and management together in a time when they were
becoming more antagonistic.

HUGO MUNSTERBERG.
While the efficiency engineers studied mechanical efficiency, the industrial psychologists
studied human efficiency, with the same goal in mind of improving productivity. The father
of industrial psychology was Hugo Munsterberg (1863–1916). In 1892, Munsterberg
established his psychological laboratory at Harvard, which was to become the foundation
stone in the industrial psychology movement.
Munsterberg published Psychology and Industrial Efficiency (1913), which included theories
directly related to Taylor's scientific management. The book contained three parts. Part one,
the "best possible man," was a study of the demand jobs made on people, and the
importance of finding people whose mental capabilities made them well-matched for the
work. Part two, the "best possible work," described the psychological conditions under
which the greatest output might be obtained from every worker. Part three, the "best
possible effect," examined the necessity of creating the influences on human needs that
were desirable for the interests of business.
Munsterberg's proposals were based on his own evidence from studies involving telephone
operators, trolley drivers, and naval officers.
WALTER DILL SCOTT.
Walter Dill Scott (1869–1955) taught at Northwestern University from 1901 to 1920 and then
served as president of the university for nineteen years. Scott was interested in employee
attitudes and motivation in production and devised a system, adopted by the army, for
classifying personnel and testing officer candidates. In fact, he was awarded the
Distinguished Service Medal for his work.
From March 1910 till October 1911, Scott wrote a series of articles entitled The Psychology of
Business later published in System magazine. These articles were based on actual business
cases and represented one of the earliest applications of the principles of psychology to
motivation and productivity in industry.

THE EMERGENCE OF ADMINISTRATIVE THEORY

HENRI FAYOL
Two contributors to the administrative theory of management are Henri Fayol (1841– 1925)
and Max Weber (1864–1920). Both wrote during the scientific management era in America,
but neither was accorded the full measure of his contribution until some decades after his
death. Fayol was trained as a mining engineer and became the managing director of a coal-
mining and iron foundry combine. From his own experience, he formulated and wrote
papers about his ideas of administrative theory as early as 1900. His first mention of the
"elements" of administration came in a book published in 1916. However, America was not
thoroughly exposed to Fayol's theory until the book was translated in 1949 and entitled
General and Industrial Management. Fayol identified the major elements or functions of
management as planning, organization, command, coordination, and control. Planning and
organization received the majority of his attention in his writings. Fayol believed that
management could be taught, that managerial ability was sorely needed as one moved up
the ladder, and that management was a separate activity applicable to all types of
undertakings.Fayol's fourteen principles of management included: division of labor,
authority, discipline, unity of command, unity of direction, subordination of individual
interests to the general interest, remuneration, centralization, scalar chain, order, equity,
stability of tenure of personnel, initiative, and espirit de corps (morale).
MAX WEBER
The work of Max Weber (1864–1920) runs chronologically parallel to that of Fayol and Taylor.
Weber was a German intellectual with interests in sociology, religion, economics, and
political science. He was a professor, editor, government consultant, and author. Weber
used the concept of "bureaucracy" as an ideal organizational arrangement for the
administration of large-scale organizations. His work was not translated into English until
1947.
Weber's concept of the best administrative system was actually similar to Taylor's. Some of
Weber's essential elements included division of labor, and chain of command. He also
believed that selection should be based on technical qualifications, officials'/ managers'
appointments should be based on qualifications, managers should not be owners, and
impersonal and uniform rules should be applied.

PETER DRUCKER.
Peter Drucker (b. 1909) made an enduring contribution to understanding the role of
manager in a business society. Unlike the previous Fayolian process texts, Drucker
developed three broader managerial functions: (1) managing a business; (2) managing
managers; and (3) managing workers and work. He proposed that in every decision the
manager must put economic considerations first. Drucker recognized that there may be
other non-economic consequences of managerial decision, but that the emphasis should still
be placed on economic performance.

THE SOCIAL MANERA

The behavioral school of management thought began late in the scientific management era,
but did not achieve large-scale recognition until the 1930s. The real catalyst for the
emergence of the behavioral school was a series of research studies conducted at the
Hawthorne plant of Western Electric between 1924 and 1932. This research became known
as the Hawthorne experiments.

ELTON MAYO AND THE HAWTHORNE STUDIES.

Elton Mayo (1880–1949) joined the Harvard faculty in 1926 as associate professor of
industrial research, and two years later was asked to work with Western Electric, as part of
the Harvard research group, to continue the Hawthorne studies.
Mayo was intrigued by the initial results of the early illumination studies that showed output
had increased upon changes in illumination either brighter or darker but no
one knew why. Mayo believed the increased output came from a change in mental attitude
in the group as the workers developed into a social unit.
Other experiments included the piecework experiment, the interviewing program, and the
bank wiring room experiments. From these experiments the Mayoists concluded that
employees have social needs as well as physical needs, and managers need a mix of
managerial skills that include human relations skills.

MARY PARKER FOLLETT

Another contributor to the behavioral school of thought was Mary Parker Follett. Follett
(1868–1933) was trained in philosophy and political science, and became interested in
vocational guidance and the emerging field of social psychology. She had an international
reputation as a political philosopher and in 1924 published Creative Experience, a book that
was widely read by businessmen of the day.
Follett advocated a business philosophy that embraced integration as a way to reduce
conflict without compromise or domination. She also proposed the "law of the situation,"
where parties agree to take their orders from the situation instead from an individual.
Another facet of her philosophy focused on coordination as a fundamental principle of
organization. Follett believed the primary leadership task was to define the purpose of the
organization and integrate that purpose with individual and group purposes. In other words,
she thought that organizations should be based on a group ethic rather than individualism.
Thus, managers and employees should view themselves as partners rather than adversaries.

CHESTER BARNARD.
Chester Barnard (1886–1961) was a self-made scholar who attended Harvard on a
scholarship, but never graduated because he lacked a laboratory science course. He joined
the AT&T system in 1909 and became the president of New Jersey Bell in 1927. Barnard's
best known work, The Functions of the Executive (1938), was a collection of eight lectures in
which he described a theory of organizations in order to stimulate others to examine the
nature of cooperative systems. Looking at the disparity between personal and
organizational motives, Barnard described an "effective-efficient" dichotomy. According to
Barnard, effectiveness deals with goal achievement, and efficiency is the degree to which
individual motives are satisfied. He viewed formal organizations as integrated systems
where cooperation, common purpose, and communication are universal elements, whereas
the informal organization provides
communication, cohesiveness and maintenance of feelings of self-worth. Barnard also
developed the "acceptance theory of authority" based on his idea that bosses only have
authority if subordinates accept that authority.

THE MODERN ERA: TOTAL QUALITY MANAGEMENT

A quality revolution swept through the business sector during the latter part of the
twentieth century. The universal term used to describe this phenomenon was "total quality
management" or TQM. This revolution was led by a small group of quality gurus, the most
well-known were W. Edwards Deming (1900–1993) and Joseph Juran (b. 1904).

W. EDWARDS DEMING.
Deming, an American, is considered to be the father of quality control in Japan. In fact,
Deming suggested that most quality problems are not the fault of employees, but the
system. He emphasized the importance of improving quality by suggesting a five-step chain
reaction. This theory proposes that when quality is improved, (1) costs decrease because of
less rework, fewer mistakes, fewer delays, and better use of time and materials; (2)
productivity improves; (3) market share increases with better quality and prices; (4) the
company increases profitability and stays in business; and (5) the number of jobs increases.
Deming developed a 14-point plan to summarize his teachings on quality improvement.

JOSEPH M. JURAN.
Joseph Juran's experience led him to conclude that more than 80 percent of all quality
defects are caused by factors within management's control. He referred to this as the
"Pareto principle." From this theory, he developed a management trilogy that included
quality planning, control, and improvement. Juran suggested that an area be selected which
has experience chronic quality problems. It should be analyzed, and then a solution is
generated and finally implemented. The quality work of Joseph Juran and W. Edwards
Deming changed the way people looked at business.
THE MODERN ERA: CONTEMPORARY MANAGEMENT HISTORIANS

The following group of individuals have proven themselves to be great teachers and
intellectual leaders in matters of fundamental concern to management history. Their
leadership and research have contributed greatly to our understanding of the evolution of
management.

ARTHUR BEDEIAN.
Arthur Bedeian, a management professor at Louisiana State University, is a management
historian with universal interests. He has written on a variety of management-related topics,
many of which fall within the area of management history. Bedeian has made several
significant contributions to management history. These include his research into specific
areas of inquiry such as scientific management and his bibliographic investigations and
memoriams. However, perhaps his most important contribution to the field is his editorship
of the four volumes of the Management Laureates: A Collection of Autobiographical Essays.

ALFRED BOLTON.
Alfred Bolton was born in Canada in 1926. At the age of fifty-four, he began work on his
doctorate at Nova University. It was during this time that he developed an interest in
management history. His most significant contribution to the body of management history
knowledge is his work with Ron Greenwood regarding the Hawthorne study participants.
The work resulting from this collaborative effort has provided a unique glimpse into the
groundbreaking experiments at Western Electric.

DANIEL WREN.
Daniel Wren (b. 1932) is considered one of the leading authorities on the history of
management thought. He is one of the most prolific writers in this field. His textbook, The
Evolution of Management Thought, focuses on describing management history by providing
a conceptual framework for understanding the evolution of management. Both his research
and teaching in this area have led many to consider Wren as one of the management history
gurus of the twentieth century.
Management is as inherent in the composition of industry as Labour. By virtue of its
functions, moreover, it is that element in industry which, whatever changes may come, will
be charged with the piloting of the ship through the waters of change. A firmly established
body of management, therefore, is the greatest safeguard against disruptive change.

Looking immediately ahead, the two major forces making for change, with which
management has to deal, are Labour and Science. The greater the changes these forces
portend, the greater the responsibility of management for the safe pilotage of the vessel.
The activities of these two forces indicate most surely that the sea which has to be traversed
in the years ahead will be far from placid. Labour, viewed either as an organized entity or as
a heaving, throbbing movement of the times, is wedded to progress. Chafing at the
restrictions of economic logic, it grounds its faith upon a profound moral reconstruction of
society. It steps forward into the future, deeply assured that, despite the abstractions of
economists, statisticians and politicians, the days to come will witness a revision of the
ethical principles of our social order. It is convinced by neither argument nor experience. It
clings to its faith in a new world of justice; it thinks upon the moral plane. It trusts to
progress, primarily and fundamentally, not because progress means more material
advantages and a wider and higher field for human intelligence, but rather because it
promises a state of society in which the principles governing the form and conduct of
society shall be founded upon neither expediency nor force but upon what is morally right.
Amid the whirling of widely divergent movements and manifold philosophies, its ultimate
goal is clearly established. Its discontent is neither of mind nor of body, but of spirit. It
demands a constant impulse to go forward, it resents every setback and hindrance.

Science is similarly imbued with the forward-looking mind. It subjects every established
precedent to dispassionate research. It is continually amending our methods both of
manufacture and of management. It impels us to a higher and still higher standard of
efficiency. It installs method in the place of chaos, laws in the place of “rule-of-thumb,”
knowledge in the place of ignorance. It sifts our experience, analyses our practices, and puts
to new purpose our energies. It devises machines for our manual work, new methods for our
procedure in management, new forms of our organization. It experiments, compares, tests,
standardizes, organizes and re- builds. It regards no standard as final, no method as ideal, no
sphere as sacred. It applies its
analytical process to both the things and the men of production. Without partiality, it
marshals facts, discovers principles, and unhesitatingly applies them. It improves quality,
decreases cost, designs products, and effects economies. It holds efficiency to be not the
negative virtue of eliminating what is wasteful, but the positive virtue of building up what is
the best. In its own sphere, it spells as great an era of change and progress as does the
restless mentality of Labour in the sphere of human relations. Neither is content with the
status quo; both insist upon growth and renovation.

As for the forces outside industry, a greater exercise of regulatory activity by the State, a
greater concern on the part of all grades of the community in the conduct of industry, a
steady uplift of the general intelligence, a more menacing assault upon our industrial
supremacy as a nation, and a greater complication, or, alternatively, prodigious disruption of
the powers of finance—these, in their effect upon industry, promise at least no stagnation,
no respite from the strain of progressive change. Amid the waters, blown stormy by the
blast of all these forces, management stands at the helm of industry. Labour may bring
about a change in its composition and relations;

Science in its methods and materials, but neither can change its functions. The man at the
wheel may be replaced, may be put under a new authority, may be regarded differently by
the crew, and may work with different instruments in a different way, but the functions
performed remain constant, essential under every conceivable circumstance. It is important,
therefore, that we should devise a philosophy of management, a code of principles,
scientifically determined and generally accepted, to act as a guide, by reason of its
foundation upon ultimate things, for the daily practice of the profession. The adoption of
this or that principle in this or that plant will avail but little. Management must link up all its
practitioners into one body, pursuing a common end, conscious of a common purpose,
actuated by a common motive, adhering to a corporate creed, governed by common laws of
practice, sharing a common fund of knowledge. Without this not only have we no guarantee
of efficiency, no hope of concerted effort, but also no assurance of stability.

It may be a fitting conclusion, therefore, to state as concisely as possible a suggested

codification of such a philosophy, not with any hope that it will be adopted as it stands, but
rather that it may form a concrete beginning, in the criticism and explanation, elaboration
and amendment of which some acceptable creed may be ultimately arrived at which shall
govern the practice of management in the future.
Management, as a comprehensive division of industry, is to be distinguished on the one
hand from Capital, and, on the other hand, from Labour. It is divisible into three main parts
—

ADMINISTRATION, which is concerned in the determination of corporate policy, the

coordination of finance, production and distribution, the settlement of the compass of the
organization, and the ultimate control of the executive;

MANAGEMENT proper, which is concerned in the execution of policy, within the limits set up
by Administration, and the employment of the organization for the particular objects set
before
it; and

ORGANIZATION, which is the process of so combining the work which individuals or groups
have to perform with the faculties necessary for its execution that the duties, so formed,
provide the best channels for the efficient, systematic, positive and co-ordinated application of
effort.

Management, while maintaining industry upon an economic basis, to achieve the object for
which it exists by the development of efficiency—both personal or human efficiency, in the
workers, in the managerial staff, and in the relations between the two, and impersonal
efficiency, in the methods and material conditions of the factory.

Such efficiency is, in general, to be developed by Management. Firstly, through the

treatment of all features in every field of industry by the scientific method of analysis and
the synthetical use of established knowledge, with the object of determining standards of
operative and managerial practice; the application of the accepted sciences to those
features of industry to which they are applicable; and the gradual formation and subsequent
elaboration of a science of management, as distinct from those accepted sciences which, in
practice, it employs; and

Secondly, through the development of the human potentialities of all those who serve
industry, in a co-operation consequent upon the common acceptance of a definite motive
and ideal in industry, and through the pursuit of that policy, as affecting the human agent in
production, which a social responsibility to the community imposes.

Efficiency in management by these general means is, in the first instance, dependent upon a
structure of organization, based upon a detailed analysis of the work to be done and the
faculties requisite for doing it, and built up on the principle of
combining related activities in such a way as to allow for the economical practice,
progressive development, and constant co- ordination of all such activities.

Apart from Finance, which is primarily concerned in the provision and usage of Capital, and
Administration which determines the field and ultimately controls and coordinates the
activities of Management proper, the various activities of Management proper are divisible,
on the above principle, into the following functions—

Firstly, those functions essential to the inception of manufacture

DESIGN (Purchasing), or that group of activities which determines the final character of the
product and specifies and provides the material for its manufacture; and

EQUIPMENT, or that group of activities which provides and maintains the necessary means of
production.

Secondly, the function dealing with the actual production, i.e. with all those activities
whereby skill and effort are applied to the transformation of the material into the finished
product. This function may broadly be described as MANUFACTURE.

Thirdly, those functions comprising the work necessary to facilitate the manufacture of the
product

TRANSPORT, or that group of activities which connects up the various units of production,
stores or moves the material between the processes of manufacture, and provides the
means of transportation for each function; PLANNING, or that group of activities which
determines the volume and progress of work;

COMPARISON, or that group of activities which analyses the work of each function and
compares the records of its activities with the scientific standards set up for each function;

LABOUR, or that group of activities concerned in the application and maintenance of the
human agent in production, and the promotion of cooperation between all engaged in
production.

Fourthly, those functions comprising the work necessary for the distribution of the product
SALES PLANNING, or that group of activities which determines, according to the data
available, the policy and methods of distribution; and

SALES EXECUTION, or that group of activities which disposes of and actually distributes the
product.

The use of the scientific method to ensure the most economical utilization of the impersonal
factors or, of the personal factors regarded purely as productive units—in industry, involves
in particular Firstly, the development of research and accuratemeasurement in each branch
of activity which management undertakes or controls, followed by experiments upon or
deductions from the data established by such research; Secondly, the preparation and use of
precise definitions and statements of what actually constitutes each item of work in each
function; Thirdly, the determination, after the analysis of the constituent parts of any activity
and their synthetical reconstruction, of reference and working standards, both for
manufacture and for management, representing, for the present, a justifiable and precise
appraisement of desirable achievement; and Fourthly, the institution of the necessary
supervision, authority, and machinery to ensure the application of, adherence to, and
improvement upon such standards, the measurement of actual practice by such standards,
and their utilization for planning the most economical mode of production and
management.
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free judgment of reason.” (Translation by P.K. Original: “Daß Könige philosophieren oder
Philosophen Könige würden, ist nicht zu erwarten, aber auch nicht zu wünschen: weil
der Besitz der Gewalt das freie Urteil der Vernunft unvermeidlich verdirbt.”).