Development of management

thought
Management thought refers to the theories that guide
management of people in the organisations
Initially, these theories developed out of practical
experience of managers in the industrial enterprises.
Later on, they borrowed ideas from other fields of
study like science, anthropology, sociology etc.
Management theories
Pre-scientific theories

Classical theories
a. Taylor’s scientific management theory
b. Fayol’s administrative theory
c. Weber’s bureaucracy theory

Behavioral theories
a. Human relations theory
b. Behavioral science theory

Modern management theories

a. Quantitative theory
b. Systems theory
c. Contingency theory
d. Operational theory
Pre-scientific Management
Theories
Important contributions are made by
- Charles Babbage
- James
- Robert
- Andrew
- Charles
- Henry Robinson
- James Watt and Mathew Robinson
- Captain Henry
These theories solved specific organizational problems but
these are not universally accepted theories that can be
applied to all organisations
Classical theories
They represent early works on management and
focus on increasing industrial output by providing
financial incentives to employees. The classical
approach was developed through three main streams:
Scientific management, Administrative theory and
Bureaucracy
Taylor’s scientific theory
Taylor developed his theory on the basis of his work
experience in three companies: Midvale Steel works,
Simond Rolling mills and Bethlehem Steel company.
He is regarded as Father of Scientific Management.
He focused on finding the best way to do the job by
eliminating wastage of men and material. He
developed time and motion studies to find optimum
time and nature of operations for successful
completion of tasks.
He also introduced differential wage rate system to
pay more to productive workers.
Principles of Taylor’s theory
Rule of thumb should be replaced with science
There should be harmony, not discord in group
actions.
Cooperation, not individualism
Maximum output, not restricted output
Development of workers to their fullest capacity.
Techniques of scientific
management given by Taylor
Time study
Motion study
Scientific task planning
Standardization and simplification
Differential piece rate system
Functional foremanship
High speed steel
Evaluation of Taylor’s theory

Better management through scientific methods

Discovered true capacity of workers
Scientific selection of workers
Mental revolution on the part of employers and employees.
In addition to Taylor, several other persons like Henry L Gantt,
Harington Emerson, Frank Gilbreth and Lillian Gilbreth also
supported and contributed in scientific management
movement.
Limitations
Unrealistic assumptions
Mechanistic approach
Exploitation of labour
Impracticable
Narrow view
Fayol’s Administrative theory
Fayol focused on managing the organisation as a
whole rather than lower levels of organisation only
His theory revolves around
-Activities of a business: Technical, commercial,
financial, security, accounting and managerial
-Functions of a manager : Planning / organizing /
commanding /coordinating/ controlling.
- Abilities of managers: Physical, Mental, Moral,
General education, special knowledge and Experience
- Principles of management
Principles of management
Division of work
Authority and responsibility
Unity of command
Unity of direction
Discipline
Subordination of individual interest to general interest
Remuneration
Centralization
Scalar chain
Order
Equity
Stability of tenure of personnel
Initiative
Espirit-de-corps
Evaluation of Fayol’s Theory
His principles are widely accepted in business and
non-business world.
He pioneered in highlighting the principles of
management
Criticism
Too formal
Vague
Inconsistency
Pro-management bias
Historical value
 Taylor and Fayol – A comparison
Basis of comparison Taylor Fayol
Aim To increase production at To increase overall
the shop level production of the
organization
Focus On improving workers’ On improving overall
output through work administration through
simplification and general principles
standardization
Management View From bottom to top From top to bottom
Results Scientific observation and Universal truths developed
measurement from personal experiences
Personality Scientist Practitioner
Major contribution Science of industrial A systematic theory of
management management
Perspective Narrow Wider
Aspects studied Micro aspect-management Macro aspect-management
of jobs of total organaization
Max Weber’s Bureaucracy theory
Max Weber(1864-1920), a German sociologist
introduced the rational-legal authority system/model
to manage the business organizations. His model is
characterized by
- Division of work
- Rules and regulations
- Hierarchy of authority
- Technical competence
- Record keeping
- Impersonal relations
Evaluation of Weber’s theory
Advantages
Rationality leads to efficiency
Leads to optimum utilization of resources
Depersonalization leads to equal treatment of all the workers
Facilitates growth of large scale organizations
Limitations
Ignores the sentiments of human beings
Hampers human creativity and innovativeness
Ignores the role of informal organizations
Strict rules make the organizations procedure- oriented rather than goal-
oriented
Written rules and regulations deny the benefits of open communication
Views organizations as closed systems with little or no interaction with the
environment.
Behavioural theories
These theories focus on organisational goals along
with satisfaction of human needs.
People- oriented approach substituted the
production- oriented approach
Two important theories:
- Human relations theory
- Behavioural science theory
Human relations theory
Elton Mayo, the father of Human relation approach
focuses on increasing organizational productivity by
increasing the morale of workers
Results were obtained through experiments:
- Test room studies
(a) Illumination experiment
(b) Relay assembly room experiment
- Interviewing studies
- Observation studies
Results of the experiment
Informal groups are important complements to
formal groups
Work is considered as a group activity and not as
operations performed by individuals.
Social and psychological factors influence employee
behaviour and productivity more than physical work
conditios
Evaluation of the theory
Focus on organizational efficiency through satisfactionof
social and psychological needs of the workers
Participative management is better than authoritarian
management.
Design of the theory: social needs are secondary to
physiological needs
Analysis of the theory: group dynamics may not be as
important as emphasized upon.
Interpretation of the theory: cordial relations are over
emphasized . Conflict of opinion also generates new ideas
Human relations philosophy: informal relations are as
important as formal motivation, communication and
leadership styles
Behavioural science theory
It applies scientific vision to human relations theory
Concepts from Psychology, Sociology and
Anthropology are applied to study human behaviour
Psychology – Study of individual behaviour
Sociology – Study of human behaviour in groups
Anthropology - Study of human behaviour as
individuals and members of groups
Concepts from various disciplines are tested before
applying them in business organisations.
Continued……………..
Several sociologists and psychologists like Abraham
Maslow, Federick Herzberg, MC Gregor, Douglas,
Rensis , Kurt , Keith davis, Charles , George and
others have made significant contribution to
the development of this approach.
This approach is an extension and improvement of
human relations movement. As this approach
suggested that individuals differ in their attitudes,
perceptions, their needs and goals also differ from
organisation’s needs and goals. So the need is to
achieve fusion between organisation’s goals and
human needs.
Human relations theory and
Behavioural science theory- A
comparison
Human relations
1.Focus on individual behaviour and
needs.
2.Emphasizes on interpersonal
relationships.
3. Views worker as ‘social man’
4. Always views group conflict as a
negative force.
5. Views organisation as a social system
6.Emphasis on motivation, morale, and
job satisfaction
6. Narrow scope as based on
Hawthrone experiment
Behavioural Approach
Focus on groups and group behaviour
Emphasizes on group relationships.
Views worker as ‘self actualising man’
Views group conflict as a source ofnew
ideas and innovations.
Views organisation as a socio-technical
system
6.Emphasis on group dynamics and
informal organisation structure
Wide scope as based on Human
relations movement.
Modern management theories
These theories are responsive to environment changes
They view organisations as dynamic open systems having
multiple objectives
Management is multi-disciplinary and draws knowledge from
various fields to solve complex business problems
These theories include:
- Quantitative theory
- Systems theory
- Contingency theory
- Operational theory
Quantitative theory
It uses the services of quantitative specialists to apply
inter-disciplinary techniques to solve business
problems
It includes:
- Management science: it uses mathematical models
like PERT, CPM, Simulation etc. to solve business
problems.
- Operations management: It applies quantitative
techniques of inventory management, statistical
quality control etc. to manage the production and
delivery of goods and services
Evaluation of Quantitative
theory
It uses quantifiable data to frame mathematical
models and handles complex decision- making
problems
It uses comprehensive information through
computers which could not otherwise have been
available
Limitations
- It cannot be applied to study human behaviour as it
cannot be predicted through mathematical equations
- The models may be used more for analysing the
results than used for making decisions
Systems Approach
As per this approach organisation is viewed from a
systems point of view.
The main elements of systems approach are as
follows:
Organisation as a purposeful system consisting of
several interconnected and interdependent parts.
The parts or components of a system are called sub-
systems.
The position and function of each subsystem can be
analyzed and understood only in relation to the other
sub-systems and to the organisation as a whole.
Feedback is useful in evaluating and improving the
functioning of the system.
contingency approach
A contingency approach to management is
based on
the theory that management effectiveness is
contingent, or dependent, upon the interplay
between the application
of management behaviors and specific
situations. In other words, the way you manage
should change depending on the
circumstances.
Operations Management
Theory
Operations Management Theory refers
to the strategies used in structuring and
administering business practices to
create the highest level of efficiency in
an organization. The ability to convert
materials and labor into goods and
services in the most efficient way
possible is what maximizes profits.