You are on page 1of 71

CHAPTER THREE

EVOLUTION OF MANAGEMENT THOUGHTS


PREPARED BY: GAURAV BASNET

OVERVIEW OF CHAPTER
We can see how the world of management has evolved from the days of Scientific Management to the Administrative theorists to Behavioral Theory to the Behaviorists to Quantitative Management to systems and external issues to today.

LEARNING OBJECTIVES
1. Describes how the need to increase organizational efficiency and effectiveness
has guided the evolution of management theory.
2. Explains the principle of job specialization and division of labor , and tell why the study of person-task relationships is central to the pursuit of increased efficiency. 3. Identify the principles of administration and organization that underlie effective organizations.

4. Trace the changes in theories about how managers should behave to motivate and control employees.
5. Explain the contributions of management science to the efficient use of organizational resources. 6. Explain why the study of the external environment and its impact on an organization has become a central issues in management thought.

Different stages of management thought


Evolution of management thought may be divided into four stages 1. Pre-scientific management period. 2. Classical Theory (a) Scientific Management (b) Administrative Management (c) Bureaucratic Model 3. Neo-classical Theory or Behavior Approach 4. Modern Theory or Systems Approach

What is Scientific Management?

It is an art of knowing what exactly you want from your men to do & then seeing that is done in the best possible manner. In simple words, it is application of science to management.

History of Scientific Management


Late in the 19th century, major economic, technical, and cultural changes were taking place due to the impact of the industrial revolution and the organization of work. The industrial revolution and the application of machines to work changed the way goods were produced. Small workshops (crafts production) were replaced by large factories in which goods were made by sophisticated machines. Many managers in these factories were engineers unprepared for the social problems that occur when people work together in large groups. Their training was technical, not human focused or human sensitive. Managers began to focus on ways to increase the efficiency of the worker-task mix

Job Specialization & the Division of Labor


Adam Smith was one of the first writers to investigate the advantages of producing goods and services in factories. Smith identified two different types of manufacturing methods. a. One was similar to crafts-style production with each worker responsible for all the 18 tasks involved in producing a pin and could only make one or two at the most pins a day. b. The other had each worker perform only one or a few of the tasks and if there were 10 people working making pins they could produce 48,000 a day.

Contd.
Smith found that the performance of the factories using specialization was much greater. Smith concluded that increasing the level of job specialization the process by which a division of labor occurs as different workers specialize in different tasks over timeincreases efficiency. Using Smiths early observations, other managers began to investigate how job specialization could be improved to increase performance.

F.W. Taylor and Scientific Management


Frederick Winslow Taylor ( March 20,1856- March 21,1915) was an American engineer who sought to improve industrial efficiency. A management consultant in his later years, he is known as The Father of Scientific Management. He was one of the intellectual leaders of the efficiency movement and his ideas, broadly considered, were highly influential in the: Progressive Era. Frederick W. Taylor defined the techniques of scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase

Contd.
Taylor believed that by increasing specialization and the division of labor, the production process would become more efficient. This process of evaluation could best be determined using scientific management techniques rather than informal rule of thumb knowledge.

Taylor developed four principles to increase efficiency in the workplace.


Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge possessed by workers, and experiment with ways of improving the way tasks are performed to increase efficiency.

Contd.
i. One of Taylors main tools was a time and motion study. ii. He experimented to increase specialization; simplifying jobs and having each worker perform fewer, more routine tasks. Principle 2: Codify the new methods of performing tasks into written work rules and standard operating procedures. Principle 3: Carefully select workers so that they possess the skills and abilities that match the needs of the task and train them to perform the tasks according to the rules and procedures established in step 2. Principle 4: Establish a fair or acceptable level of performance for a task and then develop a pay system that provides a higher reward for performance above the acceptable level.

Contd.
Taylor believed that the industrial management of his day was amateurish, that management could be formulated as an academic discipline, and that the best results would come from the partnership between a trained and qualified management and a cooperative & innovative workforce . Each side needed the other, & there was no need for trade union. Mental Revolution: Acc. To Taylor, the workers & managers should have a complete new outlook; a mental revolution in respect to their mutual relations. Workers should be considered as a part of Organization. Employers shouldnt treat workers as mere wage earners.

Criticism of ( F.W.Taylor)
Taylors principles called for extreme specialization among workers, which many managers considered impractical & overly complex. Some critics even opposed that Taylors ideas were not entirely original- that he appears to have borrowed heavily from an unpublished manuscript by his associate Morris L. Cooke, and that results of some of his experiments may have been more fiction than fact. Taylors principles are considered an attempt to impose order wherever he could coz he was anti towards labor unions, his intense search for perfection in work, and his view that workers were lazy in their works show his own feelings of insufficiency.

Criticism of Scientific Management


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).

Cont..
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 & inefficient 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.

Cont..
Employers Viewpoint 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.

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 fixing of organization, the work suffers.

Contribution by Gantt
Henry Lawrence Gantt (USA, 1861 - 1919): H.L Gantt was born in 1861. He graduated from John Hopkins College. For some time, he worked as a draftsman in an iron foundry. In 1884, he qualified as a mechanical engineer at Stevens Institute. In 1887, he joined the Midvale Steel Company. Soon, he became an assistant to F.W Taylor . He worked with Taylor from 1887 - 1919 at Midvale Steel Company. He did much consulting work on scientific selection of workers and the development of incentive bonus systems. He emphasized the need for developing a mutuality of interest between management and labor.

o Henry Gantt developed the Gantt chart, which is used for scheduling multiple overlapping tasks over a time period. o He focused on motivational schemes, emphasizing the greater effectiveness of rewards for good work ( rather than penalties for poor work). o He developed a pay incentive system with a guaranteed minimum wage bonus systems for a people on fixed wages.
Gantt made four important contributions to the concepts of management: 1. The Gantt chart: The most important project management tool until today. It provides a graphic mechanism of planning, controlling work & recording the progress of workers toward the task standard. Gantt chart compares actual to planned performance. Gantt chart is a daily chart which graphically presented the process of work by showing machine operations, man hour performance, deliveries, effected and the work in arrears.

Cont..
2. Task-and-bonus plan for remunerating workers indicating a more humanitarian approach. This plan was aimed at providing extra wages for extra work besides guarantee of minimum wages. Under this system of wage payment, if a worker completes the work laid out for him, he is paid a definite bonus in addition to his daily minimum wages. On the other hand, if a worker does not complete his work, he is paid only his daily minimum wages. There was a provision for giving bonus to supervisors, if workers under him were able to earn such bonus by extra work. 3. Psychology of employee relations indicating management responsibility to teach and train workers. In his paper "Training Workmen in Habits of Industry and Cooperation", Gantt pleaded for a policy of preaching and teaching workmen to do their work in the process evolved through pre-thinking of management.

Cont..
4. Gantt laid great emphasis on leadership . He considered management as leadership function. He laid stress on the importance of acceptable leadership as the primary element in the success of any business. Gantt's contributions were more in the nature of improvements rather than fundamental concepts. They made scientific management more humanized and meaningful to devotees of

Contribution by Gilbreths
Frank (USA, 1867 - 1924) and Lillian (U.S.A, 1878 - 1912): The ideas of Taylor were also strongly supported and developed by the famous husband and wife team of Frank and Lillian Gilbreth. They became interested in wasted motions in work. After meeting Taylor, they combined their ideas with Taylor's to put scientific management into effect. They made pioneering effort in the field of motion study and laid the entire foundation of our modern applications of job simplification, meaningful work standards and incentive wage plans. Mrs. Gilbreth had a unique background in psychology and management and the couple could embark on a quest for better work methods. Frank Gilbreth is regarded as the father of motion study. He is responsible for teaching in the minds of managers the questioning frame of mind and the search for a better way of doing things.

Gilbreth's contributions to management thought are quite considerable. His main contributions are: (a) The one best way of doing a job is the way which involves the fewest motions performed in an reachable area and in the most comfortable position. The best way can be found out by the elimination of inefficient and wasteful motions involved in the work. (b) He emphasized that training should be given to workers from the very beginning so that they may achieve competence as early as possible. (c) He suggested that each worker should be considered to occupy three positions - (i) the job he held before promotion to his present position, (ii) his present position, and (iii) the next higher position. The part of a worker's time should be spent in teaching the man below him and learning from the man above him. This would help him qualify for promotion and help to provide a successor to his current job. (d) Frank and Lillian Gilbreth also gave a thought to the welfare of the individuals who work for the organization. (e) Gilbreth also developed methods for avoiding wasteful and unproductive movements. He laid down how workers should stand, how his hands should move and so on.

ADMINISTRATIVE MANAGEMENT THEORIES

Henry Fayol was the most important exponent of this theory. The pyramidal form, scalar principle, unity of command, exception principle, span of control and departmentalization are some of the important concepts set forth by Fayol and his followers like Mooney and Reiley, Simon, Urwick, Gullick etc. Henry Fayol is known as Father of Administrative Management. Like Socrates, Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation. Some writers continue to associate him with F.W. Taylor, his theories deal with the organisation of production costs. According to Claude George ( 1968), a primary difference between Fayol & Taylor was that Taylor viewed management process from the bottom up, while Fayol viewed them from the top bottom

Contribution by Henry Fayol


Henry Fayol (France, 1841 - 1925): Henry Fayol was born in 1941 at Constantinople in France. He graduated as a mining engineer in 1860 from the National School of Mining. After his graduation, he joined a French Coal Mining Company as an Engineer. After a couple of years, he was promoted as manager. He was appointed as General Manager of his company in 1888. At that time, the company suffered heavy losses and was nearly bankrupt. Henry Fayol succeeded in converting his company from near bankruptcy to a strong financial position and a record of profits and dividends over a long period.

Concept of Management ( Acc. Fayol)


Henry Fayol is also considered as the father of modern theory of general and industrial management. He divided general and industrial management into 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, organization, command, coordination and control.

These six functions had to be performed to operate successfully any kind of business. He, however, pointed out that the last function i.e., ability to manage, was the most important for upper levels of managers. The process of management as an ongoing managerial cycle involving planning, organizing, directing, co-ordination, and controlling, is actually based on the analysis of general management by Fayol. Hence, it is said that Fayol established the pattern of management thought and practice. Even today, management process has general recognition.

Fayols Principles of Management


1. Division of work: Division of work or specialization alone can give maximum productivity and efficiency. Both technical and managerial activities can be performed in the best manner only through division of labor and specialization. 2. Authority and Responsibility: The right to give order is called authority. The obligation to accomplish is called responsibility. Authority and Responsibility are the two sides of the management coin. They exist together. They are complementary and mutually interdependent. 3. Discipline: The objectives, rules and regulations, the policies and procedures must be honored by each member of an organization. There must be clear and fair agreement on the rules and objectives, on the policies and procedures. There must be penalties(punishment) for non-obedience or indiscipline. No organization can work smoothly without discipline - preferably voluntary discipline.

4. Unity of Command: In order to avoid any possible confusion and conflict, each member of an organization must received orders and instructions only from one superior (boss). 5. Unity of Direction: All members of an organization must work together to accomplish common objectives. 6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is also called principle of co-operation. Each shall work for all and all for each. General or common interest must be supreme in any joint enterprise. 7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator for good performance. Exploitation of employees in any manner must be eliminated. Sound scheme of remuneration includes adequate financial and nonfinancial incentives.

8. Centralization: There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided. 9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all members of the organization from the top to the bottom. Scalar denotes steps. 10. Order: Fayol suggested that there is a place for everything. Order or system alone can create a sound organization and efficient management.
11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint collaboration.

12. Stability of Tenure : A person needs time to adjust himself with the new work and demonstrate efficiency in due course. Hence, employees and managers must have job security. Security of income and employment is a pre-requisite of sound organization and management. 13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is strength. But unity demands cooperation. Pride, loyalty and sense of belonging are responsible for good performance. 14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial planning and execution of predetermined plans.

The Theory of Bureaucracy.

Max Weber (1864-1920) a well known German sociologist coined the term bureaucracy to apply to the ideal of large organizations operating on a rational basis . Webers original definition was much different than the definition of government red tape and unprofessional usually associated with the term bureaucracy "today. The timing of Webers contributions is a little confusing. Although he was a contemporary of Taylor and others described as classical contributors, Webers works werent translated into English until the 1940s. Bureaucratic Model is preferred where change is not anticipated or where rate of change can be established. It is followed in government departments and in large business organizations.

Contribution by Max Weber ( 1864-1920)


A bureaucratic system of administration is based on five principles: Principle 1: In a bureaucracy, a managers formal authority derives from the position he or she holds in an organization. i. Authority is the legitimate power to hold people accountable for their actions. ii. Authority gives managers the legal right to direct and control their subordinates behavior. iii. In a bureaucratic system, compliance is owed to a manager because the manager occupies a position of authority and responsibility. .

Principle 2: In a bureaucracy, Weber believed that people should occupy positions based on their performance rather than on social level or personal contacts. Principle 3: Weber argued that the extent of each positions formal authority and task responsibilities, and its relationship to other positions in an organization, should be clearly specified . i. When tasks and authority are clearly specified, managers and workers clearly know what is expected of them. ii. All employees are more accountable for their actions when each person knows exactly his or her responsibilities.

Principle 4: Weber stated that to exercise authority effectively in an organization, positions should be arranged hierarchically so that employees know who to report to and who reports to them. Principle 5: Weber argued that it is very important that managers create a well-defined system of rules, standard operating procedures, and norms so that they can effectively control behavior within an organization. i. Rules are formal written instructions that specify actions that should be taken under different circumstances to achieve specific goals. ii. Standard operating procedures (SOPs) are very specific sets of written instructions about how to perform a certain aspect of a task. iii. Norms are unwritten, informal codes of conduct that govern how people should act.

iv. Rules, SOPs, and norms provide behavioral guidelines that increase the performance of a bureaucratic system. Weber believed that use of these principles would establish a bureaucratic system of management designed to improve organizational performance, if properly managed. However, if bureaucracies are not managed well, problems can result. a. Rules may become so burdensome that decision-making becomes slow and inefficient. b. Managers often rely too much on rules to solve problems and not enough on their own skills and judgment

THE NEO-CLASSICAL THEORY

Neo-classical Theory is built on the base of classical theory. It modified, improved and extended the classical theory. Classical theory concentrated on job content and management of physical resources whereas, neoclassical theory gave greater emphasis to individual and group relationship in the workplace. The neo- classical theory pointed out the role of psychology and sociology in the understanding of individual and group behaviour in an organization

Contribution by Elton Mayo( 1880- 1949)


George Elton Mayo (Australia, 1880 - 1949): Elton Mayo was born in Australia. He was educated in Logic and Philosophy at St. Peter's College, Adelaide. He led a team of researchers from Harvard University, which carried out investigation in human problems at the Hawthorne Plant of Western Electrical Company at Chicago. They conducted some experiments (known as Hawthorne Experiments) and investigated informal groupings, informal relationships, patterns of communication, patterns of informal leadership etc. Elton Mayo is generally recognized as the father of Human Relations School. Other prominent contributors to this school include Roethlisberger, Dickson, Dewey, Lewin etc.

Hawthorne Experiments
1. Illumination experiment: To find out the effect of illumination on workers productivity. Conclusion: it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity. 2. Relay Assembly test room experiments : To find out the effects of changes in working conditions and hours. Conclusion: The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity.

Contd..
3. Mass Interviewing programme : To find out worker attitudes & sentiments. Conclusion: The findings confirmed the importance of social factors at work in the total work environment. 4. Bank wiring observation room experiments: To find social aspect of work organisation. Conclusion: The findings of the study are:(i) Each individual was restricting output. (ii) The group had its own "unofficial" standards of performance. (iii) Individual output remained fairly constant over a period of time. (iv) Informal groups play an important role in the working of an organization.

Contribution of The Hawthorne Study


Elton Mayo and his associates conducted their studies in the Hawthorne plant of the western electrical company, U.S.A., between 1927 and 1930. According to them, behavioral science methods have many areas of application in management. The important features of the Hawthorne Experiment are:1. A business organization is basically a social system. It is not just a techno-economic system. 2. The employer can be motivated by psychological and social wants because his behaviour is also influenced by feelings, emotions and attitudes. Thus economic incentives are not the only method to motivate people. 3. Management must learn to develop co-operative attitudes and not rely merely on command.

4.Participation becomes an important instrument in human relations movement. In order to achieve participation, effective two-way communication network is essential. 5. Productivity is linked with employee satisfaction in any business organization. Therefore management must take greater interest in employee satisfaction. 6. Group psychology plays an important role in any business organization. We must therefore rely more on informal group effort. 7. The neo-classical theory emphasizes that man is a living machine and he is far more important than the inanimate machine. Hence, the key to higher productivity lies in employee morale. High morale results in higher output.

Contribution by Chester Barnard


Chester Barnard (1886 1961): The president of New Jersey Bell Telephone Company, introduced the idea of the informal organization cliques (exclusive groups of people) that naturally form within a company. He felt that these informal organizations provided necessary and vital communication functions for the overall organization and that they could help the organization accomplish its goals. Barnard felt that it was particularly important for managers to develop a sense of common purpose where a willingness to cooperate is strongly encouraged. He contributed the following theories to management which are very helpful even today. They are; (i) The theory of authority. & (ii) The theory of incentives. Both theory are seen in the context of a communication system that are based in some essential rule:

Contd..
(a) Everyone should know of the channels of communication. ( b) Everyone should have access to the formal channels of communication. ( c ) Lines of communication should be as short and as direct as possible. Lets see the theories: (i) The theory of authority: In the theory of authority he states that; for a communication from a boss to a subordinate to be authoritative, it must meet the following four conditions: 1. It has to be understood by the subordinate. 2. It should be possible to the subordinate to obey. 3. The subordinate has to see no incompatibility between the communication & his/her own goals. 4. The subordinate has to see no incompatibility between the communication & the objectives of the organization.

Contd..
(ii) The theory of incentives: Barnard sees two ways of convincing subordinates to cooperate: (a) Tangible incentives, & (b) Persuasion. He gives great importance to persuasion, much more than to economic incentives.

Contributions by Maslow

According to Maslow's theory, all needs have a certain priority. Needs of one level must at least partially fulfilled before a person can realize higher needs.

The first four needs are what Maslow called deficiency needs or Dneeds: the individual does not feel anything if they are met, but feel anxious if they are not met. They cease to be motivating if you get them. Needs beyond the D-needs are being needs or B-needs. When fulfilled, they do not go away; rather, they motivate further. The first need is formed by physiological needs, including the biological requirements for food, water, air, shelter and Clothes. Once the physiological needs are met, an individual can concentrate on the second level i.e.; The need for Safety and security. Included here are the need for arrangement, order, security and certainty . The third level is the need for love and belonging ( social needs). Included here are the needs for friends and companions, a supportive family, identification with a group, and an intimate relationship.

The fourth level is the in esteem needs. This includes both recognition from other people that results in feeling of prestige,acceptance,and status, and self-esteem that results in feelings of acceptability, competence, and confidence. Lack of satisfaction of the esteem needs results in discouragement and feeling of inferiority. Finally, individuals have a need for self actualization or a desire for self-fulfillment, which is an urge by individual for self-development, creativity and job satisfaction. It is called growth motivation ( in contrast to deficit motivation). People who have reached self-actualization will sometimes experience a state as divine existence, in which they become aware of not only their own fullest potential, but the fullest potential of human beings at large.

Contribution by Likert
Dr. Likert has conducted much research on human behavior within organizations, particularly in the Industrial situation. He has examined different types of organizations and leadership styles. He asserts that to achieve maximum profitability, good labour relations and high productivity, every organization must make optimum use of their human assets.

Four systems by Likert:


1. The exploitive- authoritative system, where decisions are imposed on subordinates , where motivation is characterized by threats, where high levels of management have great responsibilities but lower levels have virtually none , where there is very little communication and no joint teamwork.

2. The benevolent- authoritative system, where leadership is by a superior form of master-servant trust, where motivation is mainly by rewards, where managerial personnel feel responsibility but lower levels do not , where there is little communication and relatively low team work.

3. The consultative system , where leadership is by superiors who have substantial but not complete trust in their subordinates , where motivation is by rewards and some involvement, where a high proportion of personnel, especially those at the higher levels feel responsibility for achieving organization goals , where there is some communication ( both vertical and horizontal) and a moderate amount of teamwork.

4. The participative-group system, which is the optimum solution, where leadership is by superiors who have; complete confidence in their subordinates, where motivation is by economic rewards based on goals which have been set in participation, where personnel at all levels feel real responsibility for the organizational goals , where there is much communication, and a substantial amount of cooperative teamwork . This fourth system is the one which is ideal for the profit oriented and human-concerned organizations.

Contribution by Frederick Herzberg


Frederick Herzberg ( 1923-2000) was the first one to show that satisfaction and dissatisfaction at work always arose from different factors. He proposed the two factor theory of human motivation in the workplace. According to his theory people are influenced by two factors: (i) Satisfaction and No Satisfaction are a result of motivation factors. (ii) Dissatisfaction and No Dissatisfaction is a result of Hygiene factors. Herzbergs research proved that people will strive to achieve hygiene needs because they are unhappy without them, but once satisfied the effect soon wears off- i.e. satisfaction is temporary.

Herzberg argued that there are two distinct human needs shown. First, there are physiological needs that can be fulfilled by money, for example, to purchase food and shelter. Second, there is the psychological need to achieve and grow, and this need is fulfilled by activities that cause one to grow.

Motivation Needs Achievement Recognition Advancement The work itself Responsibility Personal Growth

Hygiene Needs Job security Company policy Relationship with supervisor, peers Work conditions Salary Personal life

Contribution by McGregor
In his 1960 book, The Human Side of Enterprise, Douglas McGregor proposed two theories which helped to view employee motivation. He avoided descriptive labels and simply called the theories, Theory X and Theory Y.

Theory X Humans inherently dislike working & will try to avoid it if they can.

Theory Y People view work as being as natural as play and rest.

People dislike work they have to be forced by mgmt. & threatened so they work hard enough.
Average employees want to be directed. People dont like responsibility. Average humans are clear & unambiguous & want to feel secure at work. Authoritarian, and Hard management approach should be used.

Provided people are motivated, they will be self-directing to the aims of the organization,
Job satisfaction is key to engaging employees & ensuring their commitment. People learn to accept responsibility & seek responsibility. People are imaginative & creative. Their creativity should be used to solve problems at work. Participative and Soft management approach should be used.

Management Science Approach


Management science approach also known as mathematical/ quantitative approach, visualizes management as a logical entity, the action of which can be expressed in the mathematical terms. The management sciences order is to use rational, systematic, science based techniques to inform and improve decisions of all kinds. Of course the techniques of management science are not restricted to business applications but may be applied to military, medical, public administration, political groups or community groups.

Features of Management Approach:


1. Management is regarded as problem solving mechanism with the help of mathematical tools. 2. Management activities can be measured 3. Covers decision making, system analysis & some aspects of human behavior. 4. Mathematical tools , models are basic methodologies to solve managerial problems.

Operational Approach
Operational approach regards the management as a universally applicable body of knowledge that can be brought to bear at all the levels of managing & in all types of enterprises. This approach recognizes that application of science by a insightful practioner must take this into account in designing practical problem solutions. This approach is also known as management process approach.

Features of Operational approach


1. Emphasis on management function & principles involved in performing functions. 2. Mgmt. functions are universal in nature irrespective of the type of organization. 3. Conceptual framework of mgmt. can be constructed on the basis of analysis of mgmt. process. 4. Central core of managing revolves round Planning, Organizing, Leading and Controlling.

Decision Theory Approach


Decision theory is concerned with how real or ideal decision makers make or should make decisions, and how optimal decisions can be reached. This approach looks at the basic problem of management around decision making and selection of suitable course of action out of given alternatives. The major emphasis of this approach is that decision- making is the job of every manager. The manager is a decision-maker & organization is a decision-making unit. The basic problem in managing is to make rational decision.

Features of Decision theory approach


Management is essentially decision making. Members of organisation are decision makers & problem solvers Quality of decisions affects the organizational effectiveness. All factors affecting decision-making are area of study for managers. Other factors affecting the decisions are processes, information systems, social & psychological aspects of decision makers.

System Approach

The systems theory approach is based on the notion that organizations can be visualized as systems of interrelated parts or subsystems that operate as a whole in pursuit of common goals. This will be discussed in more detail in the next session. The major components of a system are: a. Inputs: the various human, materials, financial, equipment, and informational resources required to produce goods and services. b. Transformation processes: the organizations managerial and technological abilities that are applied to convert inputs into outputs. c. Outputs: the products, services, and other outcomes produced by the organization. d. Feedback: information about results and organizational status relative to its environment.

The 7-S Mckinsey model


7-S model is better known as Mckinsey 7-S. This is because the two persons who developed this model. Tom Peters and Robert Waterman, have been consultants at McKinsey & Co at that time. They published their 7-S Model in their article Structure Is Not Organization (1980) and in their books :The Art of Japanese Management (1981) and In search of Excellence (1982).

The 3-Ss across the top of the model are described as Hard Ss:
Strategy: The direction and scope of the company over the long term Structure: The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they inter-relate). Systems: Formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customers.

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed :Soft Ss by McKinsey:
Skills: The capabilities and competencies that exist within the company. What it does best? Shared values: The values and believes of the company. Ultimately they guide employees towards valued behaviour. Staff: The companys people resources and how thy are developed trained, and motivated. Style: The leadership approach of top management and the companys overall operating approach.

In change processes, many organizations focus their efforts on hard Ss. They care less for the soft Ss. However, that most successful companies work hard at these soft Ss. The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate culture and value. The 7-S model is a valuable tool to initiate change processes and to give them direction. A helpful application is to determine a current state of each element and to compare this with the ideal state. Base in this it is possible to develop action plns to achieve the intended state.