ORGANIZATION AND MANAGEMENT

1.3 Theory of Management

Er. Rajesh Bhattarai
Pashchimanchal Campus
Class: BME /BAME III/I
Chapter 1.3, 2078/02/03
1.3.1 Scientific Management Approach
 As a term Scientific Management was first used in USA in 1910 by
Louis Brandies. As a process, it was first visualized in UK in 1832 by
Charles Babbage.
 The utility of scientific methods to problems of management was first of
all introduced by F.W. Taylor in America (1856-1915). He is regarded as
a “Father of Scientific Management”.
 Taylor’s Theory was introduced in 1911
 He introduced scientific management principles replacing the rule of
thumb
 He simply applied scientific tools and methods to solve management
problems
 Scientific management may be defined as ‘art of knowing exactly what
is to be done and the best way of doing it”.
 By FW Taylor : “ Scientific management means knowing exactly what
you want to men to do and seeing that they do it in the best and cheapest
way”
2
1.3.1 Scientific Management Approach
It is the result of applying scientific knowledge and
the scientific methods to the various aspects of
management and the problems that arise from them. It
tries to make the best use of production resources
(Men, Materials, Machines, Money etc.)

3
 Principles of Scientific Management
Science, Not Rule of Thumb
 Rule of thumb decisions are based on personal judgements of the
manager
 Taylor insisted upon scientific method for every SMALL work
 Standard required time and standard output should be defined
 Help in saving time and human energy

Harmony , Not Discord Disagreement between people

 There should be harmony between the employees and
management
 Help in minimizing conflicts
 Helpful in creating healthy work environment.
Cooperation, Not Individualism
• Mutual Cooperation between
workforce
• Internal competition will turn
into healthy working
environment
• Management welcome the
suggestions given by employees
• Employees should resist
themselves from going on strikes
and making unnecessary
demands
Development of each and every person to his or her
greatest efficiency and prosperity
• Scientific Selection of employee
• Right man at right job
• Workers efficiency depends upon
proper training and selection
• Managers should always help ,
encourages and guide the
employees
Scientific Techniques
• Functional Foremanship
• Standardization and simplification of work
• Fatigue Study
• Method study
• Motion Study
• Differential Peace wage rate
• Mental Revolution
Functional Foremanship
• He advocated that specialization must be introduced in a factory
• Division of factory in two department: Planning department and
Production Department
• Experts in every department to guide the workers
Standardization& Simplification of work
• Standardization means maintaining
standard among size , type , weight,
measure and quality of the product
• Simplifications means eliminating
unnecessary diversity of product , size
and types
Advantages
• It is economical to have standardised
materials , tools and equipment's
• Operators can be trained easily
• Helps in achieving economies of large
scale production
• Reduce cost of production
Method Study
• Fine one best method of performing the job which maximizes the
profit
• All method should be tried first and then the best should be selected
Motion Study
•. • Observe an average worker when
he is performing a job by
determining his movements
• Differentiate between productive
and unproductive movements
• Cut down all unproductive and
wasteful movements
Time Study
• The standard time required to perform a job
• Setting up standard target for workers
• Determining the number of workers required to perform a job
• Categorizing the workers in efficient and inefficient categories
Fatigue Study
• Fatigue is generally caused by long working hours.
• It emphasis on:
The frequency of rest intervals
The duration of rest intervals
The no. of rest intervals
• This study aims at providing proper rest interval to the employee to
increase the effectiveness of the work.
Differential Piece Wage Rate
• Paying different rate of wage to efficient and inefficient employees.
• Extra wages paid to efficient employees will motivate both efficient
and inefficient employees.
• When payment given according to number of units produced, it will
automatically maximize the production
Mental Revolution
• Focuses on change in the
attitude of employees and
management towards each
other
• Both should realize their equal
importance in organization
• They should give full
cooperation for achieving goal
• Develop Positive thinking
among each other
Benefits of Scientific Management
1. Use of Scientific Method/ High Productivity .
2. Planning and control
3. Benefit from specialists
4. Benefit of specialization and standardization
5. Cooperation between management and workers.
6. Research (Time study/Motion Study/Fatigue study etc.)
7. Benefits to workers
8. Benefits to society
Criticism of Scientific Management
1. Scientific Management kills personal creativity and initiative.
2. It is undemocratic: Workers are treated as machine
3. Badly effect to health of workers/ Mentally stress/Monotonous work
4. Creates unemployment
5. Scientific management will disturb the solidarity of trade union.
1.3.2 Administrative Management Model
Administrative Management
Fayol’s Approach in 1916
1. Managerial Qualities & Training
2. Principle of Management
1. Division of Work
• According to Henri Fayol
specialization promotes
efficiency of the workforce
and increases productivity. In
addition, the specialization of
the workforce increases their
accuracy and speed.
• Division of work
• Importance equally for
technical and management
activities
2. Authority & Responsibility
• In order to get things done in an
organization, management has the
authority to give orders to the
employees. The responsibility can be
traced back from performance and it is
therefore necessary to make
agreements about this. In other words,
authority and responsibility go
together and they are two sides of the
same coin.
3. Discipline
• It is often a part of the core
values of a mission and vision in
the form of good conduct and
respectful interactions.
• The rules, regulations , policies
and procedures must be
honoured by all the members of
organization.
4. Unity Of Command
 In order to avoid confusion and conflict, each
individual should receive orders and
instructions only from one superior and should
be accountable to one superior only.
 Unity of command provided responsible
leadership, better guidance and direction , good
coordination and disciplined performance.
5. Unity Of Direction
• All members of an
organization must work
together to accomplish
common or same objectives.
Their efforts shall be directed
towards one common super
goal
6. Subordination of individual interest to
general interest
• The primary focus is on the
organizational objectives and
not on those of the individual.
This applies to all levels of the
entire organization, including
the managers.
• Common interest of the
organization is more
importance than individuals.
7. Remuneration
• The remuneration should be sufficient
to keep employees motivated and
productive.
• There are two types of remuneration
namely non-monetary and monetary
8. Centralization & Decentralization
• This depends on the volume and
size of an organization including its
hierarchy
• Centralization implies the
concentration of decision making
authority at the top management
(executive board). Sharing of
authorities for the decision-making
process with lower levels (middle
and lower management), is referred
to as decentralization
9. Scalar Chain
• An organization chart should
be prepared for better
communication and effective
coordination. It shows the
flow of authority and
responsibility from top to
bottom
10. Order
• “ A place for everything and
everything in its place” is a
best norm for material
management, which also
holds goods from
management of men also ,
that is, “a place for everyone
and everyone in his place”
11. Equity
• According to Henri Fayol, employees
must be treated kindly and equally.
Employees must be in the right place
in the organization to do things right.
Managers should supervise and
monitor this process and they should
treat employees fairly and impartially
12. Stability of Tenure
• Management strives to minimize
employee turnover and to have the
right staff in the right place.
• Security of income and employment is
a prerequisite of sound organization
and management.
13. Initiative
• This principle allows subordinates
to utilize their initiative. Initiative
is a freedom to think plan and to
execute.
• Initiative brings self confidence in
a worker which is essential for
improving efficiency of the
organization.
14. Esprit de Corps (Unity is strength)
• Management should not adhere
the principle of divide and rule
instead it should try to achieve
cooperation and team spirit in the
employees.
• Esprit de corps contributes to the
development of the culture and
creates an atmosphere of mutual
trust and understanding.
3. Elements /Functions Of Management
1.3.2 Administrative Management Approach
Contribution of Frank Gilbreth (father of motion study)
 He introduced process chart and concluded that fatigue
can be reduced considerably by allowing rest periods,
planning seating arrangement, improving working
conditions and by using principles of motion economy.

Contribution of Gantt
He developed a Gantt chart which is still used as a
scheduling technique to have a immediate comparison
between the planned work and the actual progress of the
work. So as to enable the management to take corrective
action if there is a significant deviation.

39
1.3.3 Behavioral Management Approach

 Scientific Management Theory concentrated on physical resources rather

than human resources. Prof. Elton Mayo has stated that an organization is
essentially a social system and not merely techno-economic system.
 Knowledge of human nature can solve many problems of management.
 He stressed that successful human relations approach can easily create
harmony in an organization, higher employee satisfaction and therefore
higher operational efficiency and productivity.
 Contributors: Abraham Maslow, Douglas McGregor, Frederick Herzberg,
Kurt Lewin, Keith Davis, Chris Argyris, George Homans etc.

40
1.3.2Behavioral Management Approach
A.H. Maslow developed a need hierarchy to explain
human behavior within an organization. The knowledge
of individual and group behavior enables to develop
suitable work atmosphere or situations which can increase
productivity as well as employee satisfaction.

Behavioral approaches have clearly pointed out that job

conditions and the job itself are the motivators that can
satisfy the needs of both employees and the
organization.

These motivators are recognition, sense of belonging,

challenging job, independence, participation
achievement, enlargement and enrichment of job itself.
41
Behavioural Management Approach
The area of managerial application of behavioural management methods are :
1. The business organization is basically a social system and not just technical economic system.
2. The individual is not only motivated by economic incentive but by social and psychological
factors because his behaviour is affected by feelings, sentiments and attitudes.
3. Group has a dominant role to determining the attitudes and performance of individual workers
4. The human relations emphasized democratic rather than authoritarian leadership pattern
5. Motivated workers are key to productivity.
6. It is important to develop effective communication between various levels.
7. Management required effective social skill as well as technical skills.
8. Conflict in inevitable
1.3.3Behavioral Management Approach
Elements of Behavioral Theory
i. The Individual: This theory stressed that individual
difference must be recognized. Each individual has feelings,
emotions, perception and attitudes; and ever changing
psychology.
ii. Work Group: The management must recognize the
importance of informal organization (work group) and it must
be integrated intelligently with formal organization. This
theory recognizes the vital effect of group psychology and
behavior on motivation and productivity.
iii. Participative management: This theory advocated worker
participation in management. It allows labor to participate in
decision making and problem solving primarily to increase
productivity.

43
Advantages
1. Study of human behavior most critical for managerial success:
• It concentrates on a study of human behaviour; which is the most critical
single factor-responsible for management success/failure.
2. Contribution to management:
• Behavioural sciences approach has made significant contribution to
management in the fields of group dynamics, motivation, communication and
leadership.
3. Basis of organisational behavior:
• Behavioural sciences approach is basis of a new management discipline-called
organisational behaviour. Some of the outstanding concepts of organisational
behaviour like, informal groups, attitudes, personality, perception, individual
and group behaviour etc. are a gift of behavioural sciences approach.

•
Limitations
1. Over-emphasis on behavioural aspect:
Behavioural sciences approach over-emphasizes on behavioural aspect. In fact,
in management, there are many things more important than human
behaviour; which are ignored by behavioural sciences approach.
2. Unpredictability of human behavior:
Behavioural sciences approach recommends a study of human behaviour;
which is difficult to understand. Ever-changing human psychology makes
human behaviour unpredictable. Behavioural sciences approach offers no
techniques for predicting human behaviour.
3. Findings not universally applicable:
Findings of behavioural sciences approach are not applicable universally to all
enterprises operating in different social, religious and cultural backgrounds.

•
• Scientific
• Scientific Mgnt.
• Research on techno-economic
• Motivating by monetary
• Informal organ.
• Behavioral
• Behavioral Mgnt.
• Focus on Techno-social
• Non monetary
(communication/Psychological)
• Emphasis on informal org.
1.3.4 Modern Management Theories

Modern management theories started after 1950. There are main three
streams under the modern management theory:
i. Quantitative approach to management.
ii. System approach to management.
iii. Contingency approach to management.

47
i) Quantitative approach to management
This approach has been given by C.W. Churchman and his coordinators.
Under this approach the manager is suggested to solve the problems through
‘mathematical statistics’. The basic approach is the construction of a quantitative
model.
Importance tool for precise expression of concept and management problem
convert to mathematical model.
Essential features of quantitative approach:
a. Management must make use of mathematical tools and techniques (e.g.. Use of
equations) for problem solving.
b. Operational research, mathematical tools, simulation and model building are the
basic methodologies developed by this approach. It has helped the management
in systematizing thinking.
c. Management problems can be described in mathematical models.

48
ii) System approach to management
The system approach is the recent contribution to
management thought developed in the late 1960s.
The prominent contributors to this approach are Kenneth,
Boulding, Johnson, Rosen Zweig and Churchman. In relation to
organization, system is defined as, ‘an established arrangement
of components which leads to accomplishment of particular
objectives as per plan’.
PLAN INPUTS PROCESS
1. Objectives 1. Information Conversion of
2. Policies (Technology) inputs to outputs
3. Procedures 2. Energy (motive (Men-Machine
4. Programs power) system) OUTPUT
5. Schedules 3. Materials or 1. Product
6. Methods Goods 2. Service

49
System Approach
• This approach studies the Subsystems
organization in tatality • Technical Subsystem
• The subsystems within the • Supportive Subsystem
system are interrelated, not
isolated • Maintenance Subsystem
• Changes to one parts of the • Adaptive Subsystem
system directly or indirectly • Managerial Subsystem
influence the other parts
• System in a where all the
components and subsystems are
interdependent on each others.
• Dynamic Systems
iii) Contingency approach to management

The major contributors to this thought are Joan Woodward, Fiedler, Lorsch and
Lawrence. The contingency approach to management is based upon the fact
there is no one best way to handle any of the managerial problems.
The application of management principles and practices should be appropriate to
specific situations (existing circumstances) in order to achieve best possible result.
Process, behavioral, quantitative and systems tools of management should be
applied situationally.

There are three major parts of the overall conceptual framework for contingency
management:
a. Environment.
b. Management concepts, principles and techniques.
c. Contingent relationship between a) and b) above

51
Contingency approach to management
• All organizations are unique (No exact model)
• A structure suitable for one unit may not be suitable for another
• Contingency approaches suggests that “One size doesn't fit all”
• The manager should take decisions according to the present
circumstances instead of principles.
Characteristics of modern management
thought
• The system approach (Input/Process/Output/Environment/Feedback).
• Dynamic nature (Interaction within Org. strucuture/Changing Structure)
• Multi-disciplinary(Psychology/Sociology/Math/Economics/Research)
• Multivariable in thought(Intelligent planning and control/Changing Envt.)
• Multi-motivated in action.(Various Stockholders)
• Multi-level and Multi-dimensional.(Important of subsystem)
• Adaptive (Continuously adjust to changing conditions)
• It is probabilistic in approach(Uncertainity events, Forecasting & Planning)

53
 Home Assignment for Chapter 1.3
1. What is the main essence of scientific management theory?
Explain how is this theory different from behavioral management
theory?
2. Describe the advantages and disadvantages of scientific
management theory.
3. What are the Fayol’s principles of management?
4. Compare and contrast the different theories of management.
5. Describe the following
i. Quantitative Management theory
ii. System approach to management
iii. Contingency approach to management

54