UNIT 2 – Development of

Business and Management

Different Approaches towards
Managment
• Management theories and approaches in evolution….

1. Scientific management theory

2. Administrative theory
3. Bureaucratic theory
4. Human relations/behavioral theory
5. Quantitative/Qualitative theory
6. Contingency theory
General Administrative Theory
Henri Fayol from the perspective of entire organization constituting good management practice developed 14
principles of management:
Division of work -specialization increase output making efficient
Authority –managers must be able to give orders
Discipline –employees must obey and respect rules of organization
Unity of command - receive orders from one superior
Unity of direction – single plan to guide managers and workers
Subordination of individual interests to general interest
Remuneration - Fair wage for the service
Centralization – degree to which subordinates are involved in decision making
Scalar chain – the line of authority from top to lowest rank
Order – people and materials in the right place at the right time
Equity – kind and fair to subordinates
Stability of tenure – replacement are available to fill vacancies
Initiative – high levels of effort to carry out plans
Team spirit – to build harmony and unity in the organization
 Bureaucracy
Max Weber in early 1900 developed theory of authority structures and relations called bureaucracy
Bureaucracy – a form of organization;
division of labor (jobs broken down into simple defined tasks)
clearly defined hierarchy (positions with clear chain of command)
Detailed rules and regulations (standard operating procedures)
Impersonal relationships (Uniform application of rules)
Career orientation (Managers as career professionals)
Formal selection (selected for jobs on technical qualifications)
These days this model is regarded hindrance to individual’s creativity, and organizations’ limit to
respond dynamic environment
However some of the bureaucratic mechanisms even in flexible organizations of creative
professionals as Infosys, Cisco, are felt necessary to ensure resource efficiency and effectivity
 Quantitative Approach
Use of quantitative techniques to improve decision making
as :
Applying statistics
Optimization models
Information models
Computer simulations
Linear programming to improve resource allocation
Critical path scheduling analysis
 Total Quality Management (TQM)

TQM –a philosophy to continual improvement

responding to customer needs and expectation
Customers means all who interacts with organization
products and service internally and externally
Continuous improvement is possible with
measurements requiring statistical techniques
measuring every critical variables in work process
Measurements compared against standards to
correct
TQM a great departure from keeping costs low to
increase productivity
 TQM Principles
• Intense focus on the
customer
• Concern for continual
improvement
• Process focused
• Improvement in the quality
of everything the
organization does
• Accurate measurement
• Empowerment of
employees
 Eg.
• In 2006, Dell had to announce a worldwide recall of certain
models of laptops that contained defective batteries.
• Renouncement in 2008 again
• 22nd jan, 2020, Toyota Motor Corp said on Tuesday that it
will recall 3.4 million vehicles worldwide because of an
electronic defect that can result in airbags not deploying in
crashes.
• The recall, which includes 2.9 million vehicles in the United
States, covers 2011-19 Corolla, 2011-13 Matrix, 2012-18
Avalon and 2013-18 Avalon Hybrid vehicles and is tied to a
report of one fatal crash.
 Behavioral Approach
Management is to get works done with people
Organizational Behavior has been the focus of research on actions of people
motivating,
leading,
building trust and team,
managing conflict
Early advocates of OB approach led foundation for selection, motivation,
team building –
Robert Owen (Late 1700) - improving labor and work place
Hugo Munsterberg (Early 1900) –scientific study of people at work, suggested psychological tests for
selection, learning for training, human behavior for motivation
 Cont
Mary Parker Follet (Early 1900) – perspective of individual and group
behavior, group ethics, proposed people oriented ideas
Chester Barnard (1930s) – organization as social system requiring
cooperation, communicate and stimulate, organization as open system
Great Depression of 1930 forced Managers to examine their job rather
than production with least cost in materials and labor
Recently group effectiveness became key to survival as Managers to
think more on Motivation, Group behavior and leadership
Organization as an open system
 Contingency Approach
Early theorists relied on principles to be universally applicable
It is realized changing situation require different techniques and
approaches
Contingency approach is situational as organizations are different
requiring different ways of managing facing different situations
No simplistic rule to follow for managers
Even units within organization differs in size, goals, activities
Situational or contingency variables may be numerous but most
Cont
widely used are:
Size of Organization differs with problem of coordination
Structures, leadership style and control system of routine technologies
differ from customized technologies
Best in stable environment may be inappropriate in rapidly changing
unpredictable environment
Individual differences for growth, autonomy, expectations matters for job
design, leadership and motivation
 Case Study
• Fast Forwarding Blockbuster