1.

Briefly explain the contributions of pre-classical management theorists and also

list who were the founders / theorists. 2. Briefly discuss the major contributions
of classical management theory and also list who were the founders / theorists. 3.
Identify the founders and discuss the major of contributions of neo-classical
management theory. 4. Identify the founders and Describe system theory,
Contingency Theory, the quantitative management theory briefly. 5. Discuss the
difference between Transformational Leadership and Transactional leadership.
2. Q1: What type of departmentation is recommended for the company? From
your Management Class, Provide your recommendation in detail. (Hint: You
need to provide a brief explanation the five bases of departmentation including
their advantages and disadvantages and propose the best bases of
departmentation that could be used for ABC Company by justifying your
reasons in detail). Q2: Provide the basic elements of Organizing the company
need to take in to consideration before implementing the chosen
departmentation.
1. Briefly explain the contributions of pre-classical management theorists and also list
who were the founders / theorists.
Contributions of Pre-Classical Management Theorists
Pre-classical management theorists made significant contributions to the field of management
by developing key principles and concepts that laid the foundation for modern management
practices. Here are some of their contributions:
1. Robert Owen: Owen emphasized the importance of treating workers well and creating a
positive work environment. He introduced the concept of welfare programs and advocated for
better working conditions.
2. Charles Babbage: Babbage introduced the concept of division of labor and specialization,
highlighting the benefits of breaking down tasks into smaller, more manageable parts.
3. Henri Fayol: Fayol developed the theory of management known as the "14 Principles of
Management." These principles include unity of command, division of work, and scalar
chain, among others. Fayol's work laid the groundwork for the development of modern
management principles.
4. Max Weber: Weber introduced the concept of bureaucracy, emphasizing the importance of
clear roles, rules, and procedures in organizations. He also highlighted the significance of
rationality and efficiency in management.
5. Frederick Taylor: Taylor is known as the father of scientific management. He focused on
improving efficiency and productivity through scientific methods, time and motion studies,
and the concept of "one best way" to perform tasks.
6. Frank and Lillian Gilbreth: The Gilbreths contributed to the field of management through
their work on motion studies and time management. They emphasized the importance of
eliminating unnecessary movements and optimizing work processes.
7. Hugo Munsterberg: Munsterberg is considered the father of industrial psychology. He
emphasized the importance of understanding human behavior and psychology in the
workplace, and how it impacts productivity and efficiency.
These pre-classical management theorists played a crucial role in shaping management
practices and theories that are still relevant today. Their contributions laid the foundation for
the development of classical management theories and paved the way for further
advancements in the field of management.
 Major Contributions of Classical
2.
Management Theory
Classical management theory emerged in the early 20th century and laid the
foundation for modern management practices. It focused on improving efficiency and
productivity in organizations. The major contributions of classical management
theory include:
1. Scientific Management: Developed by Frederick Taylor, scientific management
aimed to increase productivity by scientifically analyzing work processes. It
emphasized the use of time and motion studies to identify the most efficient ways of
performing tasks. Taylor's principles included selecting and training workers,
providing appropriate tools and incentives, and dividing work between managers and
workers.
2. Administrative Management: Henri Fayol is considered the founder of
administrative management. He proposed 14 principles of management, including
division of work, unity of command, and scalar chain. Fayol emphasized the
importance of managerial functions such as planning, organizing, commanding,
coordinating, and controlling. His principles provided a framework for effective
management practices.
3. Bureaucratic Management: Max Weber introduced the concept of bureaucracy as
a rational and efficient form of organization. Bureaucratic management emphasized
clear hierarchical structures, well-defined roles and responsibilities, standardized
procedures, and impersonal relationships. Weber believed that bureaucracy could
ensure fairness, efficiency, and predictability in organizations.
4. Classical Organizational Theory: Developed by Henri Fayol and Luther Gulick,
classical organizational theory focused on the structure and design of organizations.
It emphasized the importance of specialization, coordination, and span of control.
The principles of scalar chain, unity of direction, and unity of command were central
to this theory.
5. Hawthorne Studies: Conducted at the Western Electric Hawthorne Works, the
Hawthorne studies challenged the assumptions of classical management theory.
They revealed the significance of social and psychological factors in influencing
productivity. The studies highlighted the importance of employee motivation, job
satisfaction, and group dynamics in organizational performance.

Founders/Theorists of Classical
Management Theory
The major founders/theorists of classical management theory are:
1. Frederick Taylor: Founder of scientific management.
2. Henri Fayol: Founder of administrative management.
3. Max Weber: Introduced bureaucratic management.
4. Luther Gulick: Contributed to classical organizational theory.
5. Elton Mayo: Conducted the Hawthorne studies.
These individuals made significant contributions to the development of classical
management theory, which continues to influence management practices today.
 3. Founders of Neo-Classical Management Theory
The Neo-Classical Management Theory, also known as the Human Relations Approach, was
developed as a response to the limitations of the Classical Management Theory. It
emphasized the importance of human factors in organizations and focused on improving
employee satisfaction and productivity.
The major contributors to the Neo-Classical Management Theory are:
1. Elton Mayo: Mayo conducted the famous Hawthorne Studies at the Western Electric
Hawthorne Works in Chicago. These studies highlighted the significance of social and
psychological factors in the workplace. Mayo's research showed that employees' attitudes,
relationships, and group dynamics greatly influenced their productivity.
2. Mary Parker Follett: Follett was a social worker and management consultant who emphasized
the importance of cooperation and collaboration in organizations. She advocated for the
integration of different departments and the use of participative decision-making processes.
Follett's ideas laid the foundation for modern concepts like teamwork and empowerment.
3. Chester Barnard: Barnard focused on the informal organization and the role of leadership in
achieving organizational goals. He emphasized the importance of effective communication,
cooperation, and the acceptance of authority within an organization. Barnard's work
highlighted the significance of managerial functions beyond planning and controlling.
Contributions of Neo-Classical Management Theory
The Neo-Classical Management Theory made several significant contributions to the field of
management:
1. Human Relations: The theory recognized the importance of human factors in organizations. It
emphasized the need to understand and address employees' social and psychological needs to
improve their motivation, job satisfaction, and productivity.
2. Employee Participation: Neo-Classical theorists advocated for involving employees in
decision-making processes. They believed that involving employees in decisions that affected
them would lead to increased commitment, job satisfaction, and better organizational
outcomes.
3. Informal Organization: The theory acknowledged the existence of informal groups and
networks within organizations. It recognized that these informal relationships could
significantly impact employee behavior and organizational performance. Managers were
encouraged to understand and leverage these informal networks to achieve organizational
goals.
4. Leadership and Communication: Neo-Classical theorists emphasized the role of leadership in
creating a positive work environment. They highlighted the importance of effective
communication, cooperation, and the acceptance of authority in achieving organizational
objectives.
5. Motivation and Job Satisfaction: The theory emphasized the role of motivation and job
satisfaction in improving employee performance. It recognized that satisfied and motivated
employees are more likely to be productive and contribute to the success of the organization.
Overall, the Neo-Classical Management Theory shifted the focus from a purely mechanistic
approach to a more human-centered approach. It highlighted the importance of understanding
and addressing the needs of employees to create a productive and harmonious work
environment.
4. Modern Management Theory: Quantitative, System and
Contingency Approaches to Management!
The Modern Period (1960 to present). After, 1960 management
thought has been turning somewhat away from the extreme human
relations ideas particularly regarding the direct relation between
morale and productivity. Present management thinking wishes
equal emphasis on man and machine.

ADVERTISEMENTS:

The modern business ideologists have recognized the social

responsibilities of business activities and thinking on similar lines.
During the period, the principles of management reached a stage of
refinement and perfection. The formation of big companies resulted
in the separation of ownership and management.

This change in ownership pattern inevitably brought in ‘salaried

and professional managers’ in place of ‘owner managers’. The giving
of control to the hired management resulted in the wider use of
scientific methods of management. But at the same time the
professional management has become socially responsible to
various sections of society such as customers, shareholders,
suppliers, employees, trade unions and other Government agencies.

Under modern management thought three streams of

thinking have beers noticed since 1960:
(i) Quantitative or Mathematical Approach

ADVERTISEMENTS:

(ii) Systems Approach.

(iii) Contingency Approach.

(I) Quantitative or Mathematical Approach or

Management Science Approach:
Mathematics has made inroads into all disciplines. It has been
universally recognised as an important tool of analysis and a
language for precise expression of concept and relationship.

Evolving from the Decision Theory School, the Mathematical School

gives a quantitative basis for decision-making and considers
management as a system of mathematical models and processes.
This school is also sometimes called, ‘ Operations Research” or
“Management Science School’. The main feature of this school is the
use of mixed teams of scientists from several disciplines. It uses
scientific techniques for providing quantitative base for managerial
decisions. The exponents of this school view management as a
system of logical process.

ADVERTISEMENTS:

It can be expressed in terms of mathematical symbols and

relationships or models. Different mathematical and quantitative
techniques or tools, such as linear programming, simulation and
queuing, are being increasingly used in almost all the areas of
management for studying a wide range of problems.

The exponents of this school believe that all the phases of

management can be expressed in quantitative terms for analysis.
However, it is to be noted that mathematical models do help in the
systematic analysis of problems, but models are no substitute for
sound judgement.
Moreover, mathematics quantitative techniques provide tools for
analysis but they cannot be treated an independent system of
management thought. A lot of mathematics is used in the field of
physical sciences and engineering but mathematics has never been
considered as separate school even in these fields.

The contributions of mathematicians in the field of management are

significant. This has contributed impressively in developing orderly
thinking amongst managers. It has given exactness to the
management discipline. Its contributions and usefulness could
hardly be over-emphasized. However, it can only be treated as a tool
in managerial practice.

Limitations:
ADVERTISEMENTS:

There is no doubt that this approach helps in defining and solving

complex problems resulting in orderly thinking. But the critics of
this approach regard it as too narrow since it is concerned merely
with the development of mathematical models and solutions for
certain managerial problems.

This approach suffers from the following drawbacks:

(i) This approach does not give any weight age to human element
which plays a dominant role in all organisations.

(ii) In actual life executives have to take decisions quickly without

waiting for full information to develop models.

ADVERTISEMENTS:
(iii) The various mathematical tools help in decision making. But
decision making is one part of managerial activities. Management
has many other functions than decision-making.

(iv) This approach supposes that all variables to decision-making

are measurable and inter-dependent. This assumption is not
realistic.

(v) Sometimes, the information available in the business for

developing mathematical models are not upto date and may lead to
wrong decision-making.

Harold Knootz. Also observes that “it is too hard to see mathematics
as a separate approach to management theory. Mathematics is a
tool rather than a school.”

(ii) Systems Approach:

In the 1960, an approach to management appeared which tried to
unify the prior schools of thought. This approach is commonly
known as ‘Systems Approach’. Its early contributors include
Ludwing Von Bertalanffy, Lawrence J. Henderson, W.G. Scott,
Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.

ADVERTISEMENTS:

They viewed organization as an organic and open system, which is

composed of interacting and interdependent parts, called
subsystems. The system approach is to look upon management as a
system or as “an organised whole” made up of subsystems
integrated into a unity or orderly totality.
System approach is based on the generalization that everything is
inter-related and inter-dependent. A system is composed of related
and dependent element which, when in interaction, forms a unitary
whole. A system is simply an assemblage or combination of things
or parts forming a complex whole.

One of its most important characteristic is that it is composed of

hierarchy of sub-systems. That is the parts forming the major
systems and so on. For example, the world can be considered to be a
system in which various national economies are sub-systems.

ADVERTISEMENTS:

In turn, each national economy is composed of its various

industries, each industry is composed of firms; and of course, a firm
can be considered a system composed of sub-systems such as
production, marketing, finance, accounting and so on.

The basic features of systems approach are as under:

(i) A system consists of interacting elements. It is set of inter related
and interdependent parts arranged in a manner that produces a
unified whole.

(ii) The various sub-systems should be studied in their inter-

relationships rather, than in isolation from each other.

(iii) An organisational system has a boundary that determines

which parts are internal and which are external.

(iv) A system does not exist in a vaccum. It receives information,

material and energy from other systems as inputs. These inputs
undergo a transformation process within the system and leave the
system as output to other systems.

ADVERTISEMENTS:

(v) An organisation is a dynamic system as it is responsive to its

environment. It is vulnerable to change in its environment.

In the systems approach, attention is paid towards the overall

effectiveness of the system rather than the effectiveness of the sub-
systems. The interdependence of the sub-systems is taken into
account. The idea of systems can be applied at an organizational
level. In applying system concepts, organizations are taken into
account and not only the objectives and performances of different
departments (subsystems).

The systems approach is considered both general and specialized

systems. The general systems approach to management is mainly
concerned with formal organizations and the concepts are relating
to technique of sociology, psychology and philosophy. The specific
management system includes the analysis of organisational
structure, information, planning and control mechanism and job
design, etc.

As discussed earlier, system approach has immense possibilities, “A

system view point may provide the impetus to unify management
theory. By definitions, it could treat the various approaches such as
the process of quantitative and behavioural ones as sub-systems in
an overall theory of management. Thus, the systems approach may
succeed where the process approach has failed to lead management
out of the theory of jungle. ”
Systems theory is useful to management because it aims at
achieving the objectives and it views organization as an open
system. Chester Barnard was the first person to utilise the systems
approach in the field of management.

He feels that the executive must steer through by keeping a balance

between conflicting forces and events. A high order of responsible
leadership makes the executives effective. H. Simon viewed
organization as a complex system of decision making process.
Evaluation of System Approach:
ADVERTISEMENTS:

The systems approach assists in studying the functions of complex

organisations and has been utilised as the base for the new kinds of
organisations like project management organisation. It is possible
to bring out the inter-relations in various functions like planning,
organising, directing and controlling. This approach has an edge
over the other approaches because it is very close to reality.

This approach is called abstract and vague. It cannot be easily

applied to large and complex organisations. Moreover, it does not
provide any tool and technique for managers.

(iii) Contingency or Situational Approach:

The contingency approach is the latest approach to the existing
management approaches. During the 1970’s, contingency theory
was developed by J.W. Lorsch and P.R. Lawrence, who were critical
of other approaches presupposing one best way to manage.
Management problems are different under different situations and
require to be tackled as per the demand of the situation.
One best way of doing may be useful for repetitive things but not for
managerial problems. The contingency theory aims at integrating
theory with practice in systems framework. The behaviour of an
organisation is said to be contingent on forces of environment.
“Hence, a contingency approach is an approach, where behaviour of
one sub-unit is dependent on its environment and relationship to
other units or sub-units that have some control over the sequences
desired by that sub- unit.”

Thus behaviour within an organisation is contingent on

environment, and if a manager wants to change the behaviour of
any part of the organization, he must try to change the situation
influencing it. Tosi and Hammer tell that organization system is not
a matter of managerial choice, but contingent upon its external
environment.

Contingency approach is an improvement over the systems

approach. The interactions between the sub-systems of an
organisation have long been recognised by the systems approach.
Contingency approach also recognises that organisational system is
the product of the interaction of the sub systems and the
environment. Besides, it seeks to identify exact nature of inter-
actions and inter-relationships.

ADVERTISEMENTS:

This approach calls for an identification of the internal and external

variables that critically influence managerial revolution and
organisational performance. According to this, internal and external
environment of the organisation is made up of the organisational
sub-systems. Thus, the contingency approach provides a pragmatic
method of analysing organisational sub-systems and tries to
integrate these with the environment.

Contingency views are ultimately directed towards suggesting

organisational designs situations. Therefore, this approach is also
called situational approach. This approach helps us to evolve
practical answers to the problems remanding solutions.

Kast and Rosenzweig give a broader view of the contingency

approach. They say, “The contingency view seeks to understand the
inter-relationships within and among sub-systems as well as
between the organization and its environment and to define
patterns of relationships or configurations of variables contingency
views are ultimately directed toward suggesting organization
designs and managerial actions most appropriate for specific
situations.

Features of Contingency Approach:

Firstly, the contingency approach does not accept the universality of
management theory. It stresses that there is no one best way of
doing things. Management is situation, and managers should
explain objectives, design organisations and prepare strategies,
policies and plans according to prevailing circumstances. Secondly,
managerial policies and practices to be effective, must adjust to
changes in environment.

Thirdly, it should improve diagnostic skills so as to anticipate and

ready for environmental changes. Fourthly, managers should have
 sufficient human relations skill to accommodate and stabilise
change.

Finally, it should apply the contingency model in designing the

organization, developing its information and communication
system, following proper leadership styles and preparing suitable
objectives, policies, strategies, programmes and practices. Thus,
contingency approach looks to hold a great deal of promise for the
future development of management theory and practice.

Evaluation:
This approach takes a realistic view in management and
organisation. It discards the universal validity of principles.
Executives are advised to be situation oriented and not stereo-
typed. So executives become innovative and creative.

On the other hands, this approach does not have theoretical base.
An executive is expected to know all the alternative courses of action
before taking action in a situation which is not always feasible

5. Transformational Leadership vs Transactional Leadership

Transformational leadership and transactional leadership are two distinct leadership styles
with different approaches and outcomes. Here are the key differences between the two:

Transformational Leadership
Transformational leadership focuses on inspiring and motivating followers to achieve their
full potential and exceed their own expectations. Leaders who adopt this style often have a
long-term vision and seek to create positive change within their organization. They inspire
their followers by setting high expectations, providing support and encouragement, and
acting as role models. Transformational leaders also emphasize personal growth and
development, fostering a sense of trust and loyalty among their followers.
Key characteristics of transformational leadership include:
 Visionary: Transformational leaders have a clear vision and communicate it effectively to
their followers.
 Inspirational: They inspire and motivate their followers through their own enthusiasm and
passion.
 Intellectual Stimulation: They encourage creativity and innovation, challenging their
followers to think critically and solve problems.
 Individualized Consideration: Transformational leaders show genuine concern for the
needs and development of each follower, providing personalized support and guidance.
Transactional Leadership
Transactional leadership, on the other hand, focuses on maintaining stability and achieving
specific goals through a system of rewards and punishments. Leaders who adopt this style
emphasize the exchange relationship between themselves and their followers. They set clear
expectations, establish performance goals, and provide rewards or punishments based on the
achievement of those goals. Transactional leaders primarily focus on managing tasks and
ensuring compliance with established procedures and standards.
Key characteristics of transactional leadership include:
 Contingent Rewards: Transactional leaders provide rewards, such as recognition,
promotions, or bonuses, in exchange for meeting performance expectations.
 Management by Exception: They monitor performance closely and intervene only when
deviations from expected standards occur.
 Active Management by Exception: Leaders actively search for and address problems or
errors.
 Passive Management by Exception: Leaders intervene only when problems become
significant or when requested by followers.
Key Differences
The main differences between transformational and transactional leadership can be
summarized as follows:
 Focus: Transformational leadership focuses on inspiring and motivating followers, while
transactional leadership focuses on achieving specific goals and maintaining stability.
 Approach: Transformational leaders use charisma, vision, and personal relationships to
inspire and empower followers, while transactional leaders use rewards and punishments to
motivate and control followers.
 Long-term vs Short-term: Transformational leadership is more focused on long-term goals
and creating positive change, while transactional leadership is more focused on short-term
goals and maintaining the status quo.
 Employee Development: Transformational leaders prioritize the personal growth and
development of their followers, while transactional leaders focus on task completion and
compliance.
 Leadership Style: Transformational leadership is seen as more empowering and
participative, while transactional leadership is seen as more directive and transactional.
In summary, while both transformational and transactional leadership have their merits,
transformational leadership is often associated with higher levels of employee satisfaction,
commitment, and performance, as it fosters a sense of purpose and personal growth.
Transactional leadership, on the other hand, can be effective in situations that require clear
expectations and immediate results.
Departmentation Recommendation for ABC Company
 To determine the most suitable departmentation for ABC Company, we can consider the five
common bases of departmentation:
1. Functional Departmentation: This involves grouping activities by functions such as
marketing, finance, and production. It offers specialization and efficiency but may lead to a
lack of focus on products.
2. Product Departmentation: Grouping activities based on the company's different products or
product lines. This allows for a focus on specific products but may result in duplication of
functions.
3. Customer Departmentation: Grouping activities based on customer segments. This can lead
to better understanding and service for specific customer groups but may result in duplication
of efforts.
4. Geographical Departmentation: Grouping activities based on the location of the company's
operations. This can lead to better adaptation to local markets but may result in a lack of
coordination.
5. Process Departmentation: Grouping activities based on the production process. This can
lead to efficiency in production but may result in a lack of focus on products or customers.
Considering ABC Company's need to make each product competitive and evaluate product
managers based on their market performance, Product Departmentation seems most
suitable. This would allow the company to focus on each product category (Trucks,
Automobiles, Vans) and allocate resources accordingly. Each product manager can then be
responsible for the performance of their specific product line, aligning with the company's
strategy.
Basic Elements of Organizing a Company Before Implementing Departmentation
Before implementing departmentation, a company needs to consider several basic elements to
ensure effective organization. These elements include:
 Strategy: Align departmentation with the company's overall strategy and goals to ensure that
each department contributes to the organization's success.
 Clarity of Purpose: Clearly define the purpose and objectives of each department to avoid
overlap or duplication of efforts.
 Communication Channels: Establish clear communication channels between departments to
facilitate coordination and collaboration.
 Authority and Responsibility: Clearly define the authority and responsibility of each
department to avoid conflicts and ensure accountability.
 Resource Allocation: Allocate resources such as budget, personnel, and technology to each
department based on their specific needs and functions.
 Coordination Mechanisms: Implement mechanisms for inter-departmental coordination to
ensure smooth workflow and synergy between different departments.
 Flexibility: Design the departmentation structure to be flexible and adaptable to changes in
the business environment.
By considering these elements, a company can organize itself effectively before
implementing departmentation, leading to improved efficiency and performance.