Rationalizationof MGMT

Rationalization of Management Theories and Practices
Compilation of the Required Graded Output
By Mariae Khrisna B. Arreza

PhDM Student
CIT-U
Arreza, MK- Rationalization of Management Page 1 of 63

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 philosophers 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

controlling 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 perhaps 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 production. 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 businesses, 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 products. 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 ontology and epistemology of management and management theory,
the philosophy 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 USAGE

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 coordination 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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discussed-business-management/27888

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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.”).

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Rationalization of Management Theories and Practices

Compilation of the Required Graded Output

By Mariae Khrisna B. Arreza

Arreza, MK- Rationalization of Management Page 1 of 63

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

“More power comes more responsibilty.”

Arreza, MK- Rationalization of Management Page 2 of 63

Arreza, MK- Rationalization of Management Page 3 of 63

Management and the Ancient Connection

Arreza, MK- Rationalization of Management Page 4 of 63

Arreza, MK- Rationalization of Management Page 5 of 63

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

Arreza, MK- Rationalization of Management Page 6 of 63

Arreza, MK- Rationalization of Management Page 7 of 63

General Overviews and Introductory Works

Arreza, MK- Rationalization of Management Page 8 of 63

The University of Manchester defines management as “the process of dealing with or

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

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

Arreza, MK- Rationalization of Management Page 9 of 63

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

Arreza, MK- Rationalization of Management Page 10 of 63

This expansion of global connectivity has significantly diminished the potency of

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

Arreza, MK- Rationalization of Management Page 11 of 63

A resource by itself is nothing, it remains sterile until it is managed to provide the

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

Science can be described as a systematical body of knowledge based on proper

Arreza, MK- Rationalization of Management Page 12 of 63

The scientific management emphasis on both reducing the inefficiencies and on

In conclusion, management is an art as well as a science. It involves both the elements

Arreza, MK- Rationalization of Management Page 13 of 63

Arreza, MK- Rationalization of Management Page 14 of 63

According to Peter Drucker, "Management is a multi-purpose organ that manages business

Management is a managerial process

Management is a social process

Management takes place through people. The importance of human factor in

Management involves achieving results through the efforts of others:

Arreza, MK- Rationalization of Management Page 15 of 63

Management is a group activity

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

Management is all pervasive

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

Management is an art, science as well as a profession

Management aims at coordination of activities

Arreza, MK- Rationalization of Management Page 16 of 63

Management is different from ownership

Management is concerned with the management of business activities. Managers are

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

Management aims at achieving predetermined objectives

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

The essential elements/components of Management Process are four.

Arreza, MK- Rationalization of Management Page 17 of 63

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

Organizing is next to planning. It means to bring the resources (men, materials,

Arreza, MK- Rationalization of Management Page 18 of 63

Directing as a managerial function, deals with guiding and instructing people to do

Effective coordination and also integration of activities of different departments are

Arreza, MK- Rationalization of Management Page 19 of 63

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

Arreza, MK- Rationalization of Management Page 20 of 63

2. AUTHORITY AND RESPONSIBILITY

The issue of commands followed by responsibility for their consequences. Authority