 Management is predominantly a twentieth

century Phenomenon

 In the earlier years management could never

get attention of researchers

 The field of business in which management

concepts were applied were held extremely
low & unworthy of study
 Post world war I & II- created a situation
where people started of solution to problems
– where limited resources could be applies in
a better way

 Problems/Issues – Growing Competition,

Complexity of handling large Business
Organisation.

Hence the need for Systematic Principles &

Concepts was felt.
 There are so many theories of Management that’s why also
called jungle of Management.

1) The classical approach

2) The neo-classical approach
3) The modern approach.
The Classical Approach ( traditionally accepted views) :
This approach emphasizes organizational efficiency to
increase organizational success. It believes in functional
relationship, following of certain principles based on
experience, a bureaucratic structure and reward-
punishment nexus.

The classical school of thought developed in three

different directions
1. The Scientific management approach (Taylor),
2. The Administrative approach ( Fayol), and
3. The bureaucratic approach (Weber). Bureaucratic
approach also fall under administrative school of
thought.
The Neo-Classical Approach emphasizes human
relations, individual as well as group relationships,
and social aspects. This approach was pioneered by
Mayo and his associates. This was further extended
to behavioural sciences approach pioneered by
Maslow, Chris Argyris, Douglas McGregor and
Rensis Likert.

The quantitative approach and contingency

approach also form a part of the neo-classical
approach.
 Modern Management thought combines
concepts of the classical school with social
and natural sciences. It basically emerged
from systems analysis.
 With increase in size and complexity of organizations, the need for
systematic approach to management became inevitable. Attempts
were made to increase industrial production. Financial incentives
were viewed as important contributors to increase organizational
production.
Features of classical school of thought :
1. It involves some of the early works on management which provides
foundation to the modern management theory.
2. It attempts to find ways to increase output of workers.

3. Employees have strong economic needs which can be satisfied

through financial incentives.
4. It stresses on formal structure of jobs and work schedules to satisfy
organizational and individual needs.
5. It views organizations as closed system which do not interact with
the external environment.
6. It develops a set of management principles which are universally
applicable to all
 CLASSICAL SCHOOL OF THOUGHT

SCIENTIFIC ADMINISTRATIVE
SCHOOL(MANAGEMENT) SCHOOL(THEORY)

Frederick W. Taylor(1856-
Henri Fayol(1841-1925)
1915)
Development of Scientific General Theory of
Management. Management
Frank B. and L.M.
Gilbreth1868-1972) Max Weber(1868-1920)
Time and Motion studies Rules of Management
Henry L. Gantt(1861-1919) (Bureaucratic Approach)
The Gantt Chart

The classical viewpoint includes management theories that provide

foundation to the modern management theory
Scientific management is a classical approach that emphasizes the
scientific study of work methods to improve efficiency of workers.
Contributors to Scientific Management are F.W.Taylor, Henry L. Gantt,
Frank Gilbreth, Lillian Gilbreth and Harrington Emerson. Among all the
contributors to this school of thought, the contribution of Taylor is
thought to be the most important.

According to Taylor “Scientific Management is the substitution of exact

scientific investigations and knowledge for the old individual judgement or
opinion in all matters relating to the work done in the shop.”

TAYLORS SCIENTIFIC MANAGEMENT THEORY:

F.W.Taylor regarded as the father of scientific management, he developed
specific principles for this field. He started his experiment with the concept
of scientific management at Midvale Steel Co. He saw that the employees
were deliberately working at a pace slower than one capabilities. He found
three reasons behind it
a) Fear of losing their jobs if they increase their output
b) Faulty wage systems
c) Outdated methods of working.
He suggested some principles to overcome this problems.
These principles formed the basis of scientific management
theory.
1) Rule of thumb should be replaced with science : Trial and
error approach should not be used for taking decisions,
rather scientific way of working should be followed.
Scientific working involves use of organized knowledge,
precision and exactness as against rule of thumb which is
based on mere estimates.
2) There should be harmony and not discord in group action
: All the members of the organization should work as a
team. Conflicts should be solved by mutual discussion and
coordination and disagreements should be eliminated. All
group actions should be based on mutual understanding
so that group as a whole, contributes to organizational
output.
3) Cooperation not individualism : People should not
promote their individual interests at the cost of
organizational interest. They should cooperate with each
other, solve each other’s problems and work as a team to
achieve organizational goals.

4) Maximum output, not restricted output : People should

not restrict production. They should increase the output
and share the benefits of increased output with the
management.

5) Development of workers to their fullest capacity :

Development of workers through formal education,
training and motivation will enable them to give their best
to organizational output. Which will benefit both the
organization and workers. Training should be provided at
the work place so that workers learn about new
technologies and methods of working.
1. Taylor’s theory gained wide popularity in the managerial world, in both
business and non-business world. It introduced better management
through scientific methods such as work study, incentive plans,
introduction of rest hours etc

2. It introduced techniques of time and motion studies to increase workers

contribution. Standards are decided using time and motion study.

3. Time study: It helps in the determination of time required, duly defining

the art of recording, analysing and synthesizing the time elements of
each operation.

4. Motion study: on the other hand, involves the study of movements in

doing a job in parts. It eliminates wasteful movements and retain only
the necessary one. Thus it makes a job simple, easier and better.

5. Differential Rate System: This system requires workers to perform at

some pre-decided standard rate to earn their basic wages. If workers
are able to produce more, then in addition to their base rate they get
incentives on the number of excess units produced over and above the
standard units.
6. It emphasized on scientific selection, education and development of
workers, so that problem solving is not based on random decision-
making. It advocated selection of workers on the basis of job
requirement. Training methods were also scientifically designed to
develop workers to perform the jobs they are best suited for.

7. He identified planning and execution of plans as two distinct jobs.

8. He advocated mental revolution on the part of both employers and

employees. This revolution changed the attitude of management and
workers towards their work.
1. Taylor focused only on physical and economic needs of
workers. He overlooked the importance of social and ego
needs that affect their behaviour. Taylor viewed workers
as mere factor of production and not as human being
with social and emotional ties.
2. His theory was opposed by workers and labour unions
as they felt that scientific ways would increase
production but reduce the work force
3. Focus on scientific ways of performing the job can make
work monotonous so that workers work along pre
defined lines of action and lose interest in their jobs.
This results in worker resentment and increased labour
absenteeism.
Administrative theory, another part of the classical school of thought,
focuses on principles to coordinate the internal activities in an
organization. The contribution of Henri Fayol is thought to be the
most important.

While Taylor emphasized on productivity of workers at the shop

level, Fayol focused on managing the organization as a whole. Fayol
was concerned with general management and overall control of the
organization and not with supervision and control of operation at
lower level of management. His work was thus related more to the
top level of management. He was regarded as the first person to
systematize the administrative approach to management.

Fayol classified the business operations of an organization into six

activities and then outlined 14 principles of management.
 Six activities are
1. Technical : It relates to production and manufacturing of goods.
2. Commercial : It relates to buying raw materials and selling or
exchanging the finished goods
3. Financial : It relates to search, acquisition and optimum use of
financial resources.
4. Security : It relates to protecting human and non-human
resources.
5. Accounting : It concerned with costs, profits, and liabilities,
maintaining balance sheets, and compiling statistics.
6. It relates to functions performed by a manager.
Activities of a Business

Technical Commercial Financial Security Accounting Managerial

Planning Organizing Commanding Coordinating Controlling

 The French industrialist Fayol , through his work, “ General and Industrial
Management”(1949) explained that satisfactory results can be achieved
with scientific forecasting and proper methods of management. Fayol
listed fourteen principles of management based purely on his
experience. He described these principles as flexible and not exhaustive.
They can be changed according to situations. The principles too, are
flexible can be adapted to meet every need; It is just a question of
knowing how to use them. These 14 principles are

1. Division of labour : Division of work leads to specialisation resulting in

higher output. This principle recommends grouping of people as per
their area of specialization. If people are specialized at their work, they
can perform their task better.

2. Authority : Managers must have the authority to issue orders and

instructions to the subordinates. Yet , formal authority alone may not
help to compel obedience from subordinates; managers must have the
expertise to exert personal authority.

3. Discipline : Discipline means respect for rules and agreements. People

working in an organization need to comply with rules and agreements
that govern the organization. Without discipline results cannot be
achieved.
Discipline can be brought by a) effective leadership, guidance and
motivation. B) good supervision at all levels, and c) clear and fair
agreement with employees.

iv) Unity of command : There should be one boss for one subordinate.
Conflict will arise when one receives order and instructions from
multiple managers.

v) Unity of direction : All operations in an organization need to be

directed towards one objective. Without this achievement of goal cannot
be ensured.

vi) Subordination of individual interest to general interest : If there is a

conflict between the individual goals and organizational goals,
preference should be given to organizational goals, i.e., individual goals
should not supersede the goals of the organization.

vii) Remuneration : There should be a fair system of remuneration that

ensures equal pay for equal work. It should be fair to both employees
and employers.

viii) Centralisation : It refers to declining role of subordinates in the

decision making. Though major decisions are taken by the managers at
the top level, but at the same time enough authority should be given to
the subordinates to do the jobs properly.
ix) Scalar Chain (Hierarchy) : This the line of authority running from top
level to lower level of management. It is also known as hierarchy of
authority. It illustrated in the form of an organizational chart clearly
showing the structure of authority from the top management to
employees down the line.

x) Order : People and material should be in the right place at the right
time. Fayol followed the concept of ‘ A place for everything and
everything in its place ‘. When human beings are kept at the right
place( right man at the right place) it is social order, and when non-
human or material resources are kept at the right place, it is
material order.

xi) Equity : Managers should be fair to their subordinates.

xii) Stability of staff : Employee turnover should be less to ensure

efficiency of an organization.
xiii) Initiative : Subordinates should have the freedom to conceive new
ideas and do their task, even though they commit mistakes.
xiv) Esprit de corps : ‘ Unity is strength’. People should work as a team
to enjoy the benefits of synergy.
Positive attributes of Fayol’s theory are summarised below :

1. Fayol is first to distinguishing management functions from other

functions/activities of a business.
2. His contribution to management theory provided foundation to
development of management thought. The functions of management
developed by him provide systematic understanding to the process
of management.
This theory contributed by Max Weber, which falls under the
administrative school of thought, emphasizes authority structures.
According to Weber, a bureaucracy is highly structured, formalized,
and impersonal organization. He has advocated the necessity of a
formal organization structure with set rules and regulations. He
identified a set of characteristics of large organizations which
helped in their rational operation. Such organizations were known as
bureaucratic organizations.
Characteristics Description
Specialization of labour Jobs are broken down into routine
well defined tasks co that
members of the organization know
what is expected from them and
they can become competent
enough to perform a particular
task.
Formal rules and procedures
Impersonality
Well defined hierarchy
Career advancement based on
merit
Well defined hierarchy
Career advancement based on
merit
Multiple levels of positions must
be designed carefully keeping in
mind the reporting relationships
among levels. This should provide
for supervision, handling of
exceptions, and ability to
establish accountability of actions.
Selection and promotion should be
based on the qualification and
performance of members.
 Behavioural Theories
The behavioural school of management
emphasizes the human element in an
organization. It put more importance on
individual attitude and behaviour and on
group processes.
Mary Parker Follett : Was the pioneer of the behavioural approach to
management. Follett was a social worker and studied issues related
to working conditions of employees. She believed in group
behaviour and mutuality of interests between employers and
employees. She recognized the significance of the human elements
and attributed greater significance to the functioning of groups in
the workplace. The critical role of managers should be to bring
constructive change in the organization, following the principle of
‘power with’ rather than ‘power over’.
Major Contributor to the Behavioural School
Contributors Contributions
Mary Parker Group influences in the workplace
Elton Mayo Effect of human motivation on
productivity and output
Abraham Maslow Relates human motivation to a hierarchy
of needs
Douglas McGregor Emphasizes human characteristics-
theory X and theory Y and the
corresponding style of leadership
Chris Argyris Human and organizational development-
model I and model II
 WHAT CONTRIBUTIONS DID MARY PARKER FOLLETT MAKE TO
MANAGEMENT

One of the earliest writers to recognize that organizations could be viewed

from the perspective of individual and group behaviour was Mary Parker
Follett. Follett was a social philosopher whose ideas had clear
implications for management practice. She thought that organizations
should be based on a group ethic rather than on individualism.
Individual potential, she argued, remained as potential until released
through group association. The manager’s job was to harmonize and
coordinate group efforts – the notion of “power with” rather than “power
over” employees. Managers and workers should view themselves as
partners – as part of a common group. Follett’s humanistic ideas
influenced the way we look at motivation, leadership, power, and
authority.

Elton Mayo : He is recognized as the father of human relations approach.

Mayo and his associates conducted their study at Western Electrict’s
Hawthorne Plant between 1927-1932, to evaluate the attitude and
psychcological reaction of workers in on-the-job situation. Their
experiments were carried out in four phases.
1) Illumination experiment 2) Relay assembly test room experiments
3) Interview phase 4) Bank wiring observation room
experiment.
Scholars generally agree that the Hawthorne studies, under the leadership
of Elton Mayo, had a dramatic impact on the direction of management
thought. Mayo concluded that behaviour and sentiments are closely
related, that group influences significantly affects individual behaviour,
that group standards establish individual worker output, and that money
is less a factor in determining output than are group standards, group
sentiments and security.
1) Illumination experiments : This experiment involved manipulation of
illumination for one group of workers, called test group and comparing
their productivity and performance with another group for whom
illumination was not manipulated, called controlled group. In the first
spell of experiment, for the test group, productivity and performance
improved. However it did not last long. In fact the control group’s
performance also rose in between with the alteration in lighting
conditions for the test group, even though for the control group there
was no change in the lighting conditions. With such contradictory
results, researchers concluded that intensity of illumination was not
related to productivity of workers. There had to be something besides
illumination which influenced the performance of the workers in Western
Electric Company.
2) Relay assembly test room experiment : This set of experiments was
conducted under the guidance of Elton Mayo. The researchers selected
six women employees of the relay assembly test room, and were put in a
separate room. In the test room, a number of variables were altered, like
increased wages and rest period, shortened workday and workweek etc.
In addition the sample workers were given the freedom to leave their
workstation without permission and were also given special attention.
Productivity increased during the study period. Such results led the
researcher to believe that better treatment of subordinates made them
more productive. They highlighted the significance of social relations.
Workers would perform better if management looked after their welfare
and supervisors paid special attention to them. This condition was later
labeled as the Hawthorne effect.

3) INTERVIEW PHASE : In this phase of the experiments, about 21000

people were interviewed. The purpose of the interviews was to explore
the attitude of workers in depth. The conclusions that emerged were.
a) A complaint is not necessarily an objective of recital of facts; it may also
reflect personal disturbance of cause of which may be deep rooted.
b) All objects, persons, and events carry some social meaning. They relate
to employee’s satisfaction or dissatisfaction.
c) Workers’ personal situations are the results of configurations of
relationships, involving sentiments, desires, and interest. Such relational
variables, when related to the worker’s own past and present
interpersonal relations, result in their personal situation.
d) Workers assign meaning to their status in the organization and give
value to events, objects, and specific features of their environment
d) Workers derive satisfaction or dissatisfaction from the social status
of an organization. This means that they also look for social
rewards, associating them with an organization.
e) Workers’ social demands are influenced by social experiences in
groups, both inside and outside the workplace.

4) BANK WIRING OBSERVATION ROOM EXPERIMENT

 In this experiment there were fourteen participants including
wiremen, solder men and inspectors.
 There was no change in the physical working conditions.
 Sample workers were paid based on an incentive pay plan, relating
their pay to output. They had the opportunity to earn more by
increasing the output.
 However, it was observed that the output was constant at a certain
level.
 Analysis of the results showed that the group encourages neither
too much nor too little work.
 They enforce ‘a fair day’s work’ on their own. Group norms,
therefore more important to the worker than money.
 This study, thus provided, some insight into informal social relations
within groups.