UNIT 2

Evaluation of Management Thoughts

Concept of Managerial Thoughts
Understanding the evolution of management thought is important as it helps
determine what management principles and practices work best for your team and
your organization. It can help you manage your team and workplace more effectively.
So, what is the meaning of evolution of management thought? To understand this, we
need to go back in time.

The Industrial Revolution in the early 19th century brought monumental changes in
the workplace. As factories were the primary source of employment, management
theorists studied the operations and workforce present on the factory floors. There
were times when the demand was high but the lack of productivity and efficiency
held workplaces back. The Industrial Revolution gave birth to multiple management
theories and concepts that developed over time and are still relevant today.

Tracing the Evolution of Management through Theories

Management theories help you study an organization, its corporate designs, structures
and behavior of individuals or groups. By studying the impact of internal and external
business environments, these theories provide a lens to address critical questions
about how a business works or operates. Management theories can be grouped under
three categories—classical theory, neoclassical theory and modern management
theory. Let’s take a look at the individual theories in detail:

1. Classical Theory Of Management

The theories that emerged under the classical evolution of management thought are:

1. Scientific Management
Fredrick Winslow Taylor, an engineer, proposed and developed the Scientific
Management Theory. He is also known as the Father of Scientific Management and
his school of thought came to be known as Taylorism. He introduced a scientific
approach to productivity, which meant that an increase in efficiency can lead to
higher productivity and profits. He believed that research-backed and standardized
procedures were necessary for effective management.

2. Administrative Management
Henry Fayol, a French mining engineer, laid down five functions and 14 principles of
management under the theory of Fayolism. This gave way to the school of
administrative management. He believed that these functions and principles can
guide managers to fulfill their responsibilities effectively and they should have the
liberty to determine how to use them.

2. Neoclassical Theory Of Management

The theories that emerged under the neoclassical evolution of management practices
are:

1. Human Relations Management

Developed by Elton Mayo, an Australian psychologist, the Human Relations Theory
of Management was proposed after a series of experiments, also known as
Hawthorne Studies or Hawthorne Experiments. This theory emerged as a response to
the criticism faced by the classical management theories, where social factors such as
human behavior and attitudes weren’t considered important.

2. Behavioral Management
Behavioral approaches to management set the pace for how modern workplaces build
an employee-friendly culture. Abraham Maslow, an American psychologist,
proposed the hierarchy of need, where employee need and expectations were
prioritized. The theory suggests that human relations and behavior are essential in
driving efficiency in teams and managing the workforce successfully.

3. Modern Theory Of Management

The theories that emerged with the modern evolution of management needs are:

1. Systems Approach
The Systems Theory of organization has its roots in biology and systems science.
This concept broke away from classical management theory that viewed
organizations as machines and moved toward a more holistic view that sees them as
networks of people, procedures and activities. Systems Theory allows for an
understanding of the connections between various parts of the organization and how
they interact with one another.

2. Contingency Approach
The Contingency Management Theory suggests that there isn’t any perfect way to
organize a business or corporation. The optimal solution lies in the situation that an
organization operates in. A business is contingent (depends) upon internal or external
environments.

It’s evident that in the long history of the evolution of management, the focus has
shifted from the structure and authority to the people behind the scenes. Many of
these principles hold relevance in modern workplaces even if society continues to
evolve. Practicing the principles of various management theories will not only bring
success to your organization but also improve your relationship with your team.
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Contribution of Fredrick Taylor

Historical Perspective

One of the earliest of these theorists was Frederick Winslow Taylor. He started the
Scientific Management movement, and he and his associates were the first people to
study the work process scientifically. They studied how work was performed, and
they looked at how this affected worker productivity. Taylor's philosophy focused on
the belief that making people work as hard as they could was not as efficient as
optimizing the way the work was done.

In 1909, Taylor published "The Principles of Scientific Management." In this, he

proposed that by optimizing and simplifying jobs, productivity would increase. He
also advanced the idea that workers and managers needed to cooperate with one
another. This was very different from the way work was typically done in businesses
beforehand. A factory manager at that time had very little contact with the workers,
and he left them on their own to produce the necessary product. There was no
standardization, and a worker's main motivation was often continued employment, so
there was no incentive to work as quickly or as efficiently as possible.
Taylor believed that all workers were motivated by money, so he promoted the idea
of "a fair day's pay for a fair day's work." In other words, if a worker didn't achieve
enough in a day, he didn't deserve to be paid as much as another worker who was
highly productive.

With a background in mechanical engineering, Taylor was very interested in

efficiency. While advancing his career at a U.S. steel manufacturer, he designed
workplace experiments to determine optimal performance levels. In one, he
experimented with shovel design until he had a design that would allow workers to
shovel for several hours straight. With bricklayers, he experimented with the various
motions required and developed an efficient way to lay bricks. And he applied the
scientific method to study the optimal way to do any type of workplace task. As such,
he found that by calculating the time needed for the various elements of a task, he
could develop the "best" way to complete that task.

These "time and motion" studies also led Taylor to conclude that certain people could
work more efficiently than others. These were the people whom managers should
seek to hire where possible. Therefore, selecting the right people for the job was
another important part of workplace efficiency. Taking what he learned from these
workplace experiments, Taylor developed four principles of scientific management.
These principles are also known simply as "Taylorism".

Elements and Tools of Scientific Management

 Separation of planning and doing
 Functional Foremanship
 Job Analysis
 Standardization
 Scientific Selection and training of workers
 Financial Incentives
 Economy
 Mental Revolution
Principles of Scientific Management
 Replacing rule of thumb with science
 Harmony in group action
 Co-operation
 Maximum output
 Development of workers
 Allocate the work between managers and workers so that the managers spend their
time planning and training, allowing the workers to perform their tasks efficiently.

 Techniques of Scientific Management

1. Method Study:
The purpose of the outlined study is to find out one vigorous way of performing the
job. There are different ways of performing the job. To ascertain the best way, there
are diverse parameters. Right from the obtainment of raw materials until the ultimate
product is presented to the consumer, every pursuit is part of method research. Taylor
devised the idea of the assembly line by applying the method study.

2. Motion Study:
Motion study pertains to the study of movements like putting objects, lifting,
changing positions and sitting etc., which are moved while doing a conventional job.
Random movements are solicited to be reduced so that it takes less time to perform
the job effectively.

3. Time Study:
It circumscribes the conventional time taken to complete a well-defined job. Time
regulating devices are used for each part of the task. The standard time is set for the
entirety of the task by taking different readings. The course of time study will rely
upon the frequency and volume of the task, the cycle time of the process and time
measurement costs.

4. Fatigue Study:
A person is obliged to feel tired mentally and physically if she or he does not relax
while working. The rest periods will assist one to recover vitality and work again
with the same capacity. This will result in improved potency. Fatigue study tries to
define the amount and regularity of rest intervals in accomplishing a task.
Contribution of Elton Mayo
According to Trahair, Mayo "is known for having established the scientific study of
what today is called organizational behavior when he gave close attention to the
human, social, and political problems of industrial civilization." (p. 15). Mayo's work
helped to lay the foundation for the human relations movement.

His main contributions are discussed as follows:

1. Human Relations Approach:

Mayo is rightly called the father of human relations movement. His ideas were a
milestone and a turning point in human relations approach of the management. He
recognized the importance of human beings in management. He said that human
beings are complex and influential input into organizational performance. The social
and psychological needs of human beings cannot be ignored, if management wants to
enhance productivity.

2. Non-Economic Awards:
The earlier assumption was that workers will work more if they are offered more
monetary incentives. Taylor was the main proponent of this approach. Elton Mayo
said that the techniques of economic incentives were not only inadequate but also
unrealistic.

He was able to show that humane and respectful treatment, sense of participation and
belonging, recognition, morale, human pride and social interaction are sometimes
more important than pure monetary rewards.
3. Social Man:
Mayo developed a concept of ‘social man’. He said that man is basically motivated
by social needs and obtains his sense of identity through relationships with others. He
is more responsive to the social forces of the informal group rather than managerial
incentives and controls. He also related productivity to a social phenomenon.

4. Organization as a Social System:

Mayo was of the view that informal relationships in the organization are more
effective than formal relationships. People form informal groups to give a bent to
their feelings and seek guidance for action from such groups.

Hawthorne Experiment by Elton Mayo

In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the
Harvard Business School were invited to join in the studies at the Hawthorne Works
of Western Electric Company, Chicago. The experiment lasted up to 1932. The
Hawthorne Experiment brought out that the productivity of the employees is not the
function of only physical conditions of work and money wages paid to
them. Productivity of employees depends heavily upon the satisfaction of the
employees in their work situation. Mayo’s idea was that logical factors were far less
important than emotional factors in determining productivity efficiency. Furthermore,
of all the human factors influencing employee behavior, the most powerful were
those emanating from the worker’s participation in social groups. Thus, Mayo
concluded that work arrangements in addition to meeting the objective requirements
of production must at the same time satisfy the employee’s subjective requirement of
social satisfaction at his work place.
4 Phases of Hawthorne Experiment

The term “Hawthorne” is a term used within several behavioral management theories
and is originally derived from the western electric company’s large factory complex
named Hawthorne works. Starting in 1905 and operating until 1983, Hawthorne
works had 45,000 employees and it produced a wide variety of consumer products,
including telephone equipment, refrigerators and electric fans. As a result, Hawthorne
works is well-known for its enormous output of telephone equipment and most
importantly for its industrial experiments and studies carried out. Between 1924 and
1932, a series of experiments were carried out on the employees at the facility. The
original purpose was to study the effect of lighting on workers’ productivity.

1. Illumination Studies

In the early 1920s Chicago’s Western Electric Hawthorne Works employed 12,000
workers. The plant was a primary manufacturer of telephones, and in 1924 the
company provided a site to cooperate with the NRC on a series of test room studies to
determine the relationship between illumination and worker efficiency. The basic
idea was to vary and record levels of illumination in a test room with the expectation
that as lighting was increased, productivity would too. In another test room,
illumination was decreased, with the correlating expectation that efficiency would
decrease. The electric power industry provided an additional impetus for these tests,
hoping to encourage industries to use artificial lighting in place of natural light.

2. Relay Assembly Test Room Experiment

In order to observe the impact of these other factors, a second set of tests was begun
before the completion of the illumination studies on April 25, 1987. The relay-
 assembly tests were designed to evaluate the effect rest periods and hours of work
would have on efficiency. Researchers hoped to answer a series of questions
concerning why output declined in the afternoon: Did the operators tire out? Did they
need brief rest periods? What was the impact of changes in equipment?

3. Bank-Wiring Tests

The bank-wiring tests began in November 1931. The foreman of the bank-wiring
department resisted the intrusion of observers into his work space and a bank-wiring
test room was set up. The test room housed nine wirers, three solderers, and two
inspectors. All were male between the ages of 20 and 25. Their job was to wire
conductor banks, a repetitive and monotonous task. The banks were one of the major
components of automatic telephone exchange. Between 3,000 and 6,000 terminals
had to be wired for a set of banks. The work was tiring and required the workers to
stand for long periods of time.

4. The Interview Process

Under Mayo and Roethlisberger’s direction, the Hawthorne experiments began to

incorporate extensive interviewing. The researchers hoped to glean details (such as
home life or relationship with a spouse or parent) that might play a role in
employees’ attitudes towards work and interactions with supervisors. From 1928 to
1930 Mayo and Roethlisberger oversaw the process of conducting more than 21,000
interviews and worked closely training researchers in interviewing practices.

Contribution of Henry Fayol to Management Thought

Henry Fayol (1841-1925) is rightly treated as the father of modern theory of general and
industrial management. The credit of suggesting the basic principles of management in
an orderly manner goes to Henry Fayol. After obtaining an engineering degree, Henry
Fayol, joined as chief executive in a coal mining company. He developed his
management principles and general management theory and published them in the form
of a book (in French) "General and Industrial Administration" in 1916. It was translated
into English in 1930. In due course of time, Henry Fayol came to be recognised as the
founder of modern management theory. His analysis of management process acts as the
foundation of the whole management theory and the present super-structure of
management has been built on it.

Fayol is the first management thinker who provided the conceptual framework of the
functions of management in his book “General and Industrial Management. The
functions of management according to Fayol are,
1. Planning
2. Organising
3. Staffing
4. Commanding
5. Coordinating
6. Controlling
Fayol divided general and industrial management into following six groups:
1. Technical activities (production, manufacture, adaptation).
2. Commercial activities (buying, selling and exchange).
3. Financial activities (search for and optimum use of capital).
4. Security activities (protection of property and persons).
5. Accounting activities (stock taking, balance sheet, cost, and statistics).
6. Managerial activities (planning, organizing, command, coordination and control).
The fourteen principles of management created by Henri Fayol are explained
below.

1. Division of Work-

Henri believed that segregating work in the workforce amongst the worker will enhance
the quality of the product. Similarly, he also concluded that the division of work
improves the productivity, efficiency, accuracy and speed of the workers. This principle
is appropriate for both the managerial as well as a technical work level.

2. Authority and Responsibility-

These are the two key aspects of management. Authority facilitates the management to
work efficiently, and responsibility makes them responsible for the work done under
their guidance or leadership.

3. Discipline-

Without discipline, nothing can be accomplished. It is the core value for any project or
any management. Good performance and sensible interrelation make the management
job easy and comprehensive. Employees good behaviour also helps them smoothly build
and progress in their professional careers.

4. Unity of Command-

This means an employee should have only one boss and follow his command. If an
employee has to follow more than one boss, there begins a conflict of interest and can
create confusion.
5. Unity of Direction-

Whoever is engaged in the same activity should have a unified goal. This means all the
person working in a company should have one goal and motive which will make the
work easier and achieve the set goal easily.

6. Subordination of Individual Interest-

This indicates a company should work unitedly towards the interest of a company rather
than personal interest. Be subordinate to the purposes of an organization. This refers to
the whole chain of command in a company.

7. Remuneration-

This plays an important role in motivating the workers of a company. Remuneration can
be monetary or non-monetary. However, it should be according to an individual’s efforts
they have made.

8. Centralization-

In any company, the management or any authority responsible for the decision-making
process should be neutral. However, this depends on the size of an organization. Henri
Fayol stressed on the point that there should be a balance between the hierarchy and
division of power.

9. Scalar Chain-

Fayol on this principle highlights that the hierarchy steps should be from the top to the
lowest. This is necessary so that every employee knows their immediate senior also they
should be able to contact any, if needed.
10. Order-

A company should maintain a well-defined work order to have a favourable work

culture. The positive atmosphere in the workplace will boost more positive productivity.

11. Equity-

All employees should be treated equally and respectfully. It’s the responsibility of a
manager that no employees face discrimination.

12. Stability-

An employee delivers the best if they feel secure in their job. It is the duty of the
management to offer job security to their employees.

13. Initiative-

The management should support and encourage the employees to take initiatives in an
organization. It will help them to increase their interest and make then worth.

14. Esprit de Corps-

It is the responsibility of the management to motivate their employees and be supportive

of each other regularly. Developing trust and mutual understanding will lead to a
positive outcome and work environment.

Contribution of Peter Druker

Peter Drucker was born in Vienna in 1909. He lived through World War I and witnessed
the fear and destruction people lived with on a daily basis. This had a profound impact
on his life and future career. He studied law at Frankfurt University, where he began
writing for the city newspaper, Der Frankfurter General-Anzeiger. During this time he
received his Ph.D. in international law.
In 1943, Peter Drucker began his own consulting business which allowed him to work
with companies like IBM and Procter & Gamble. He realized that the two most
important things for a business to achieve were innovation and marketing.

Drucker taught that management is a liberal art and is about much more than
productivity. To be an effective manager you must understand things like psychology,
science, religion, and the other things that go into that subject.

Drucker observed that often managers would try to take charge of everything. This was
usually out of a desire for control or the belief that they were the only person who could
accomplish a task correctly. Because of this, he advocated strongly for the
decentralization of management. He taught that managers needed to delegate tasks to
empower their employees.

6 Major Contributions of Peter Drucker to Management

Some of the major contributions of Peter Drucker are as follows: 1. Nature of

Management 2. Management Functions 3. Organisation Structure 4. Federalism 5.
Management by Objectives 6. Organizational Changes.

Throughout his career, Peter Drucker wrote 39 books where he coined several terms
which are still used today. “Knowledge worker” is one of the many terms coined by
Peter Drucker. A knowledge worker is someone whose job involves handling or using
information. He was one of the first people to foresee our society’s shift to a knowledge
society.

In his 1954 book “The Practice of Management”, Peter Drucker coined the term
“management by objectives” or MBO. MBO compares the performance of employees to
the typical standards required for that position. The belief behind MBO is that if
employees help determine the standards, they will have more incentive to fulfill them.
1. Nature of Management:
Drucker is against bureaucratic management and has emphasised management with
creative and innovative characteristics. The basic objective of management is to read
towards innovation. The concept of innovation is quite broad. It may include
development of new ideas, combining of old and new ideas, adaptation of ideas from
other fields or even to act as a catalyst and encouraging others to carry out innovation.

He has treated management as a discipline as well as profession. As a discipline,

management has its own tools, skills, techniques and approaches. However, management
is more a practice rather than a science. Thus, Drucker may be placed in ’empirical
school of management’.

2. Management Functions:
According to Drucker, management is the organ of its institution. It has no functions in
itself, and no existence in itself. He sees management through its tasks. Accordingly,
there are three basic functions of a manager which he must perform to enable the
institution to make its contribution for:

(i) the specific purpose and mission of the institution whether business, hospital or
university;

(ii) making work productive and the worker achieving; and

(iii) managing social impacts and social responsibilities.

3. Organisation Structure:
Drucker has decried bureaucratic structure because of its too many dysfunctional effects.
Therefore, it should be replaced. He has emphasised three basic characteristics of an
effective organisation structure.
(i) Enterprise should be organised for performance;

(ii) it should contain the least possible number of managerial levels;

(iii) it must make possible the training and testing of tomorrow’s top managers—
responsibility to a manager while still he is young.

He has identified three basic aspects in organising activity analysis, decision analysis,
and relation analysis. An activity analysis shows what work has to be performed, what
kind of work should be put together, and what emphasis is to be given to each activity in
the organisation structure.

4. Federalism:
Drucker has advocated the concept of federalism. Federalism refers to centralised
control in decentralised structure Decentralised structure goes far beyond the delegation
of authority. It creates a new constitution and new ordering principle. He has emphasised
the close links between the decisions adopted by the top management on the one hand
and by the autonomous unit on the other.

This is just like a relationship between federal government and state governments. In a
federal organisation, local managements should participate in the decision that set the
limits of their own authority. Federalism has certain positive values over other methods
of organising.

These are as follows:

(i) It sets the top management free to devote itself to its proper functions;

(ii) It defines the functions and responsibilities of the operating people;

(iii) It creates a yardstick to measure their success and effectiveness in operating jobs;
and

(iv) It helps to resolve the problem of continuity through giving the managers of various
units education in top management problems and functions while in an operating
position.

5. Management by Objectives:
Management by objectives (MBO) is regarded as one of the important contributions of
Drucker to the discipline of management. He introduced this concept in 1954. MBO has
further been modified by Schleh which has been termed as management by results’.
MBO includes method of planning, setting standards, performance appraisal, and
motivation.

According to Drucker, MBO is not only a technique of management but it is a

philosophy of managing. It transforms the basic assumptions of managing from
exercising cattalo to self-control. Therefore, in order to practice MBO, the organisation
must change itself MBO has become such a popular way of managing that today t is
regarded as He most modern management approach. In fact, it has revolutionalised the
management process.

6. Organizational Changes:
Drucker has visualised rapid changes in the society because of rapid technological
development. Though he is not resistant to change, he feels concerned for the rapid
changes and their impact on human life. Normally, some changes can be absorbed by the
organisation but not the rapid changes.

Since rapid changes are occurring in the society, human beings should develop
philosophy to face the changes and take them as challenges for making the society
better. This can be done by developing dynamic organizations which are able to absorb
changes much faster than static ones. Drucker’s contributions have made tremendous
impact on the management practices. His contributions have been recognised even by
the management thinkers of Socialist Bloc.

Indian Management Ethos

JRD TATA

Jehangir Ratanji Dadabhoy Tata (29 July 1904 – 29 November 1993) was
an Indian aviator, industrialist, entrepreneur and chairman of Tata Group.

Born into the Tata family of India, he was the son of noted businessman Ratanji
Dadabhoy Tata and his wife Suzanne Brière. His mother was the first woman in India to
drive a car and, in 1929, he became the first licensed pilot in India. He is also best
known for being the founder of several industries under the Tata Group, including Tata
Consultancy Services, Tata Motors, Titan Industries, Tata Salt, Voltas and Air India. In
1983, he was awarded the French Legion of Honour and in 1955 and 1992, he received
two of India's highest civilian awards the Padma Vibhushan and the Bharat Ratna. These
honours were bestowed on him for his contributions to Indian industry.

When Tata was in tour, he was inspired by his friend's father, aviation pioneer Louis
Blériot, the first man to fly across the English Channel, and took to flying. On 10
February 1929, Tata obtained the first license issued in India.[9] He later came to be
known as the "Father of Indian civil aviation". He founded India's first commercial
airline, Tata Airlines in 1932, which became Air India in 1946, now India's national
airline. He and Nevill Vintcent worked together in building Tata Airlines. They were
also good friends. In 1929, J. R. D. became one of the first Indians to be granted a
commercial's license. In 1932 Tata Aviation Service, the forerunner to Tata Airline and
Air India, took to the skies.[citation needed] That same year he flew the first commercial mail
flight to Juhu, in a de Havilland Puss Moth.[10]

The first flight in the History of Indian aviation lifted off

from Drigh in Karachi to Madras with J. R. D. at the controls of a Puss on 15 October
1932.[11] J. R. D. nourished and nurtured his airline baby through to 1953, when the
government of Jawaharlal Nehru nationalised Air India. It was a decision J. R. D. had
fought against tooth and nail.[citation needed]

He joined Tata Sons as an unpaid apprentice in 1925. In 1938, at the age of 34, Tata was
elected Chairman of Tata Sons making him the head of the largest industrial group in
India. He took over as Chairman of Tata Sons from his second cousin Nowroji
Saklatwala. For decades, he directed the huge Tata Group of companies, with major
interests in steel, engineering, power, chemicals and hospitality. He was famous for
succeeding in business while maintaining high ethical standards – refusing to bribe
politicians or use the black market.

Under his chairmanship, the assets of the Tata Group grew from US$100 million to over
US$5 billion. He started with 14 enterprises under his leadership and half a century later
on 26 July 1988, when he left, Tata Sons was a conglomerate of 95 enterprises which
they either started or in which they had controlling interest.

He was the trustee of the Sir Dorabji Tata Trust from its inception in 1932 for over half a
century. Under his guidance, this Trust established Asia's first cancer facility, the Tata
Memorial Centre for Cancer, Research and Treatment, Bombay in 1941. He also
founded the Tata Institute of Social Sciences (TISS, 1936), the Tata Institute of
Fundamental Research (TIFR, 1945), and the National Center for Performing Arts.
Support of emergency powers in 1975[edit]

Tata was also controversially supportive of the declaration of emergency powers by

Prime Minister, Indira Gandhi, in 1975. He is quoted to have told a reporter of
the Times, "Things had gone too far. You can't imagine what we've been through here—
strikes, boycotts, demonstrations. Why, there were days I couldn't walk out of my house
into the streets. The parliamentary system is not suited to our needs."