CHAPTER - 2

THE EVOLUTION OF MANAGEMENT THEORY

Why Study Management Theory
Theory: Coherent group of assumptions put forth to explain the relationship between two or more observable facts & to provide a sound basis for predicting future events.  Theories provide a stable focus for understanding what we experience. A theory provides criteria for determining what is relevant.  Theories unable us to communicate efficiently & thus move into more & more complex relationships with other people.  Theories make it possible – indeed, challenge us – to keep learning about our world.

 The Scientific Management Theory

 Classical Organization Theory
 The Behavioural Theory  The Management Science Theory  Recent Developments in Management Theory  The Systems Approach  The Contingency Approach

The Scientific Management Theory  Frederick W. Taylor  Henry L. Gantt  The Gilbreths .

& motivating workers . that sought to determine scientifically the best methods for performing any task. formulated by Frederick W.The Scientific Management Theory  A management Approach. training. .& for selecting. Taylor & others between 1890 & 1930.

3) The scientific education & development of the worker. 2) The scientific selection of workers. Taylor (1856-1915) rested his philosophy on four basic principles. 4) Intimate.Frederick W. . so that each worker would be given responsibility for the task for which he or she was best suited. Taylor Frederick W. friendly cooperation between management & labor. so that the best method for performing each task could be determined. 1) The development of a true science of management.

 Taylor believed that management & labor had a common interest in increasing productivity. . using a scientifically correct rate that would benefit both company & worker.  Differential Rate System – Plan given by Taylor in which he encouraged employers to pay more productive workers at a higher rate than others.  Taylor based his management system on production-line time studies.

 His critics objected to the “speed up” conditions that placed undue pressures on employees to perform at faster & faster levels.  The emphasis on productivity . As a result more workers joined unions.&. Contributions of Scientific Management Theory  Limitations of Scientific Management Theory –  Workers & Unions feared that working harder or faster would exhaust whatever work was available. profitability – led some managers to exploit both workers & customers. by extension. . causing layoffs.

plus an extra bonus if all the workers reached it.  Every worker’s progress was rated & recorded on individual bar charts – in black & red .  The Supervisor would earn a bonus for each worker who reached the daily standard. Gantt (1861-1919) abandoned Taylor’s Differential Rate system as having too little motivational impact. Gantt  Henry L.  Every worker who finished a day’s assigned work load would win a 50-cent bonus.Henry L. came up with a new idea.

 To them. .  Studied work to eliminate inefficient hand & body motions. the ultimate aim of scientific management was to help workers reach their full potential as human beings. Gilbreth (1878- 1972) conducted fatigue & motion studies.The Gilbreths  Frank B. Also experimented with the design & use of the proper tools & equipment for optimizing work performance.  According to them. (1868-1924) & Lillian M. motion & fatigue were intetwined – every motion that was eliminated reduced fatigue.

Barnard .Classical Organization Theory  Henry Fayol  Max Weber  Mary Parker Follett  Chester I.

Classical Organization Theory  An early attempt. to identify the principles & skills that underlie effective management. .  This theory grew out of the need to find guidelines for managing such complex organizations as factories. pioneered by Henri Fayol.

 Before Fayol. it was generally believed that “managers are born. not made”.Henri Fayol  Henri Fayol (1841-1925) is generally hailed as the founder of the classical management school.  He believed that sound management practice falls into certain patterns that can be identified & analyzed – drew up 14 principles of Management. .

The Hierarchy. Centralization. Authority. 12. 6. 8. Division of labour. Equity. 7. 9. Subordination of individual interests to the general interest. Remuneration. Unity of direction. .Fayol’s 14 Principles of Management 1. Esprit de corps. Initiative. 4. 5. Discipline. Unity of command. 13. Order. 3. 11. 10. 14. Stability of staff. 2.

 The theory stressed the need for a strictly defined hierarchy governed by clearly defined regulations & lines of authority.Max Weber  German Sociologist Max Weber (1864-1920) developed a theory of bureaucratic management.  Weber also believed that technical competence should be emphasized & that performance evaluations should be made entirely on the basis of merit.  He considered the ideal organization to be a bureaucracy whose activities & objectives were rationally thought out & whose divisions of labour were explicitly spelled out. .

She was a great believer of the power of the group where individuals could combine their diverse talent into something bigger. Human beings grew through their relationships with others in organization. She took for granted Taylor’s assertion that labor & management shared a common purpose as . She called management as “the art of getting things done through people”.Mary Parker Follett  Follett (1868-1933) was convinced that no one     could become a whole person except as a member of a group.

. some inside the organization & some across the organization’s border by adding organizational environment to her theory.  Her theory included a broader set of relationships. effects of environmental factors such as politics & economics were also considered. Other than individuals & groups.  She gave the idea that management meant more than just what was happening inside a particular organization.

. Barnard  Bernard (1886-1961) arrived at the central thesis – An enterprise can operate efficiently & survive only when organization’s goals are kept in balance with the aims & needs of the individuals working for it.  Bernard believed that individual & organizational purposes could be kept in balance if managers understood an employee’s zone of indifference (what the employee would accept).  To ensure its survival. the firm must use the informal groups (cliques) effectively even if they sometimes work at purposes that run counter to management’s objectives.Chester I.

he also focused on the role of the individual worker as “the basic strategic factor in organization”. Barnard also believed that executives had a duty to instill a sense of moral purpose in their employees. . he set the stage for the development of a great deal of current management thinking.  By focusing on Groups.  Although Bernard stressed the work of executive managers.

The Behavioral Theory 1) The Human Relations Movement 2) The Behavioral Science Approach .

 The Hawthorne Experiments – The Hawthorne studies began as an attempt to investigate the relationship between the level of lighting in the workplace & worker productivity.The Human Relations Movement  The Human Relations movement arose from early attempts to systematically discover the social & psychological factors that would create HR.  They decided that a complex chain of attitudes had touched off the productivity increases.  Elton Mayo (1880-1949) & some associates from Harvard became involved with these experiments. .

both the test & the control groups had developed a group pride that motivated them to improve their work performance. .  Sympathetic supervision had further reinforced their motivation. This phenomenon is known as the Hawthorne effect.  The researchers concluded that employees would work harder if they believed management was concerned about their welfare & supervisors paid special attention to them. Because they had been singled out for special attention.

group pressure was frequently a stronger influence on worker productivity than management demands. . The research also concluded that informal work group – the social environment of employees – have a positive influence on productivity.  For these reasons.

Behavioral Science Approach  The Behavioral Scientists brought 2 new     dimensions to the study of management & organization. They advanced an even more sophisticated view of human beings & their drives than did Mayo & his contemporaries. Maslow said. lower-level needs are routinely . self-actualization needs. Behavioral Scientists applied the methods of scientific investigation to the study of how people behaved in organization as whole entities. Maslow’s hierarchy of needs – Physical. Safety. ego.

 Even this model could not explain all the factors that may motivate people in the workplace. . these behavioral scientists argue is “complex person”. the effective manager is aware that no 2 people are exactly alike & tailors motivational approaches according to the individual’s needs.  McGregor –Distinguished 2 alternative basic assumptions about people & their approach to work.  The more realistic model of human motivation.  Using this model.

 Theory Y was an e. Theory Y manager – assume that people relish work & eagerly approach their work as an opportunity to develop their creative capacities. . of a “complex person” perspective. Theory X can be traced to the days of scientific management.g.

 Management Science School – Approaching management problems through the use of mathematical techniques for their modeling.  Operations research can be used for forecasting the future based on the past & the present. analysis. & solution of management problems.The Management Science School  Operations Research – Mathematical techniques for the modeling. missing the . Also called Management Science. & solution. analysis.  The criticism – management science promotes an emphasis on only the aspects of the organization that can be captured in numbers.

Recent Developments in Management Theory  The Systems Approach  The Contingency Approach  The Dynamic Environment Approach .

The Systems Approach  Rather than dealing separately with the various segments of an organization. in varying degrees. the systems approach to management views the organization as a unified.  Systems theory tells us that the activity of any segment of an organization affects.  The point of the systems approach is that managers cannot function wholly within the confines of the traditional organizational chart.  To do that they have to communicate not only . purposeful system composed of interrelated parts. the activity of every other segment. They must mesh their department with the whole enterprise.

And each system in turn may be a subsystem of a still larger whole. In organizational terms.  Synergy: The situation in which the whole is greater than its parts.  Open & Closed Systems: A system is considered an open system if it interacts with its environment. synergy means that departments that interact cooperatively are more productive than they would be if they operated in isolation.Some Key Concepts  Subsystems: Those parts making up the whole system. . it is considered a closed system if it does not.

flexible in an open system. materials & energy (including human energy) that enter & leave a system. allowing work procedures to be analyzed & corrected. It is rigid in a closed system.  Flow: Components such as information.  Feedback: The part of system control in which the results of actions are returned to the individual. System Boundary: The boundary that separates each system from its environment. .

The Flows & Feedback in an Open System External Environment Input (Resources) Land Equipment Building Technology Information Transformation or Conversion Process Output Goods Services Other Feedback .

 According to the contingency approach. the manager’s task is to identify which technique will. best contribute to the attainment of management goals. . under particular circumstances. in a particular situation.The Contingency Approach  The view that the management technique that best contributes to the attainment of organizational goals might vary in different types of situations or circumstances. & at a particular time. also called the situational approach.

Dynamic Engagement Theory  The view that time & human relationships are forcing management to rethink traditional approaches in the face of constant. rapid change. the scope of international & intercultural relationships is rapidly expanding.  As boundaries between cultures & nations are blurred & new communications technology makes it possible to think of the world as a “global village”. .