Management Theory: Evolution - Mamta Prasad

MANAGEMENT Evolution
THEORY --- Mamta Prasad

Click to edit Master title style
EVOLUTION OF
MANAGEMENT
THEORY
2
2
INTRODUCTION
• Management is the discipline which has
not evolved out of “magic
from
box”, different
many backgrounds
people from
ranging
engineers to psychologists and from
academicians
contributed to thetofield ofpractitioners have
management.
3
3
WHY STUDY
MANAGEMENT THEORY?
• Coherent group of assumptions put forth to
explain the relationship between two or
more observable facts and to provide a
sound basis for predicting future events
4
4
• It provide a stable focus for understanding what
we experience
• Enable us to communicate efficiently and thus
move into more and more complex relationships
with other people (imagine the frustration you
would encounter with other people, you always
had to define even the most basic assumption you
make about the world in which you live.)
5
• Theories Make it possible-indeed, challenge
us-to keep learning about our world
• By definition, theories have boundaries; there
is only so much that can be covered by any
one theory.
• Once we are aware of this, we are better able
to ask ourselves if there are alternative ways
of looking at the world.
6
Click to edit MasterOF
EVOLUTION titleMANAGEMENT
style THEORIES
1.The Classical theory of management
a) Scientific Management
b) Bureaucratic Management
c) Administrative Management
2.Neo-Classical Theory
a) Human Relations
b) Behavioral Science Approach
3.The Modern Management Theories
a)Quantitative Approach
b)System Approach
c)Contingency Approach
d)Operational Approach
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DEVELOPMENT OF MANAGEMENT THOUGHT
• Impact of Industrial
Revolution.
8
F.W.TAYLOR’S
CONTRIBUTION(1856-1915)
•Father of Scientific Management Principle F.W.Tayler’Management
1) Scientific task setting based on time, motion and fatigue study.
2) Fitting the “right person for the right job” by proper selection, training and placement of personnel.
3) Improvement in work by
i. Standardisation of tools and equipment
ii. Improvement in work environment
4) Employers and employees should not feel that they are exploiting each other(Mental revolution)
5) Differential piece rate wage system to distinguish between efficient and inefficient workers( Tayler’s
Differential Piece Rate Plan)
6) Intelligent investigation and analysis of the different unit of the business.
7) Scientific study of each unit of the business.
8) Separation of the planning and execution based on specialisation.
9
CONTRIBUTIONS OF
•GILBRETHS
Scientific study of management should include both analysis and synthesis
• Analysis- Breaking down a task into its essential elements
Synthesis – include necessary element for efficient work and eliminate other
elements.
• He concentrated on Motion Study and suggested the first definition-“motion study
as the science of eliminating wastefulness resulting from unnecessary, ill directed
and inefficient motions”
• He developed Process Chart-Over all picture of all activities in a chart form.
Contributions of Henry L.Gantt

• Worked with F.W.Tayler
• He Improved Taylor’s differential piece rate system Tas k and Bonus Plan
(Provide extra wages for extra work) output in one axis and time
• on
He the
developed
other axis.
the daily balance chart (Gantt chart)
• Humanistic approach and industrial responsibility.
10
SCIENTIFIC
MANAGEMENT
• F.W.Tayler- Father of Scientific Management
• Main contributors- F.W.Tayler, Frank Gilbreths, Gantt
• Impact of Industrial Revolution
Principles of Scientific Management

1) Replacement of old rule of thumb method
2) Scientific selection and training
3) Labor-Management co-operation(mental revolution)
4) Maximum output
5) Equal division of responsibility
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TECHNIQUES OF SCIENTIFIC
MANAGEMENT
1) Scientific task setting-fair day’s work
2) Work study-method, time, fatigue and motion study
3) Planning the task
4) Standardisation
5) Scientific selection and training
6) Differential piece-wage plan
7) Specialisation
12
CRITICISM OF SCIENTIFIC
MANAGEMENT
 Functional organization structure (An operator is controlled by eight
foremen)– In practice and violates unity of command.
 It concentrated on production management and ignores the area of
Finance, Marketing, Accounting and Personnel.
 Workers objected Tayler’s Differential piece wage plan because wages of
workers are not increased in direct proportion to the increase in
productivity.
 It undermined the human factor in industry. It resulted in monotony of
job, loss of initiative, wage reductions, job insecurity etc.
13
BUREAUCRATIC
Click to edit Master title styleMANAGEMENT
• Max Weber(1864-1920)
• Rules and regulations to eliminate managerial
inconsistencies
Characteristics
1) Division of work
2) Hierarchy of position
3) Rules and regulations
4) Impersonal conduct
5) Staffing
6) Technical competence
7) Official records
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ADMINISTRATIVE
Click to edit Master title style MANAGEMENT
• Henri Fayol (1841-1925) Father of modern management
•Introduced pyramidal form of organisation. Management consist
6 types of activities
1) Technical Activities(Production, Manufacturing)
2) Commercial Activities(Purchasing, Selling and Exchange)
3) Financial Activities(Optimum use of capital)
4) Security(Protection of property and persons)
5) Accounting (Stock taking, Balance sheet, costing, statistics)
6) Managerial (Planning, organizing, coordinating and controlling)
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PRINCIPLES OF MANAGEMENT
(HENRI FAYOL’S 14 PRINCIPLES)
 It implies list of current management practices
1) Division of work(or Labor)
2) Authority & Responsibility
3) Discipline
4) Unity of command
5) Unity of direction
6) Subordination of individual to general interest
7) Remuneration
8) Centralisation of authority
9) Scalar chain or Line of authority
10) Order
11) Equity of treatment
12) Stability of workers
13) Initiative
14) Team spirit (Espirit de crops) 16
NEO-CLASSICAL THEORY
1.Human Relations
 Elton Mayo- Founder of Human Relations.
 He conducted on experiment on Hawtrone plant of
western electric company and concluded that
production efficiency of workers depends
emotional factors. upon
 Happy & satisfied employees trying to increase production.
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Click to edit Master title style SCIENCE APPROACH
2.BEHAVIORAL
• Main contributors - Maslow, F.Herz berg & D.Mc Gregor

• Application of behavioral science such as psychology, sociology &
anthropology to the study of human relationship.
1) Organisation is basically a social system and not just techno- economical
system.
2) Individuals may behave differently under different situations.
3) Attempts should be made to connect organisational goals & human needs.
4) Management must develop social skills in addition to technical skill. Man
to man relationship, team spirit & group harmony should be given top
preference by management.
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MODERN MANAGEMENT
THEORIES
Quantitative
•Approach
Main contributors – Taylor, Gilbreths, Gantt, Newman &Joel
Dean.
1) Management is concerned with problem solving and it must make use of
mathematical tools and techniques for the purpose.
2) The different factors involved in management can be quantified and
expressed in the form of equations which can be solved with the help of
mathematical tools.
3) Management problems can be described in mathematical models.
4) Operation research, mathematical tools, simulation and model building are
the basic methodologies developed by this approach.
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2.SYSTEM
APPROACH
• Main contributors – Johnson, Church man, Kenneth, Boulding & Rosen
Zweig
• Related to organisation system is defined as – “An established arrangement
of components which leads to accomplish of particular objectives as per
plan”
• All organisations are open system.
20
3. CONTINGENCY
APPROACH
• Main contributors – John Woodward, Fiedler, Lorsch
& Lawrence.
• Management is situational & main objective of management is
to identify the important variables in the situations.
• 3 Major parts of overall conceptual frame work
for contingency management
1. Environment
2. Management concepts, principles & techniques.
3. Contingent relationship between (1)&(2) above.
21
4. OPERATIONAL
APPROACH
• Main contributors- Koontz, O’Donnell and Weihrich
• It regards management as a universally applicable body of knowledge that can be brought
to bear at all levels of managing and in all types of enterprise.
• It recognizes that the actual problems which managers face and the environment in which
they operate may vary between different enterprises and levels.
22
SCHOOLS OF MANAGEMENT
THOUGHT
Scientific Management School
Classical Organization Theory school
Behavioral School
Management Science School
The System Approach
The Contingency Approach 23

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SCIENTIFIC
MANAGEMENT
THEORY
• A management approach, formulated by
Frederick W Taylor and others between
1890 and 1930, that sought to determine
scientifically thebest methods
for performing any task, and selecting,
for
training, and motivating workers.
• The theory said that the only way to
expand productivity was to raise the
efficiency of workers.
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FREDERICK W TAYLOR
(1856-1915)
• Time and Motion
• study
The Development of a true science of management, so that
the best method for performing each task could be determine.
• The Scientific selection of workers, so that each worker would
be given responsibility for the task for which he or she was best
suited.
• The Scientific education and development of the worker
• Intimate, friendly cooperation between management and
labor
• Differential rate system : Frederick W. Taylor’s compensation
system involving the payment of higher wages to more efficient
workers. 25
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• Rather than quarrel over profits, both side
should try to increase production; by so
doing, he believed, profits would rise to
such an extent that labor and management
would no longer have to fight over them.
• In short, Taylor believed that management
and labor had a common interest in
increasing productivity.
26
THE
GILBRETH
S:
• Frank B. and Lillian M. Gilbreth (1868-1924 and 1878-1972)
made their contribution to the scientific
management
movement as a husband and wife team.
• Lillian and Frank collaborated on Fatigue And Motion Studies
and focus on ways of promoting the individual worker’s
welfare.
• To them, the ultimate aim of scientific management was to
help workers reach their full potential as human beings.
27
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THERE
Click to edit CONTRIBUTION
Master title style
• Fatigue And Motion Study

• Individual Workers Welfare
• To Raise Workers Morale
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HENRY
Click to edit Master GANTT L.
title style
(1861-1919):
Limitation of Taylor’s incentive system
DR S aving less motivational impact
New idea
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CLASSICAL
ORGANIZATION
• To identify the Principles & skills that underlie
effective management.
• Scientific management was concerned with
increasing the productivity and individual
workers this theory provides guidelines for
managing such a complex organization.
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ADMINISTRATIVE
MANAGEMENT
FAYOL'S PRINCIPLES OF MANAGEMENT
Began his career as an Engineer in a
Mining Company.
Later became the Managing Director of
the company.
He formulated fourteen principles
of management.
He has been rightly called the “Father of 32
HENRI FAYOL (1841-
1925):
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17
 Division of Work.
Work should be divided into small

tasks. Each task should be assigned to
a specific employee.
 Authority and Responsibility.
Authority means right to give orders

to the subordinates.
Responsibility means obligation to
perform the work in the manner desired
and directed by the authority.
 Discipline
Discipline is essential for the

smooth running of all organisations.It
means respect for authority.
 Unity of Command
It states that an employee

should
receive orders from one superior only.
 Unity of Direction
It states that the activities

which have a common objective must be
grouped together and must be under one
head.
 Subordination of individual interest
to general interest.
The business enterprises is superior

to individuals. When individuals work in a
group ,group interest should prevail
over that of each individual.
 Remuneration of Personnel.
Remuneration of work done must

be fair and reasonable. Employees should
be honest and sincere.
 CENTRALISATION AND
DECENTRALISATION
Centralisation refers to concentration
of authority at one place or one level in
the organisation.
Decentralisation means dispersal
of authority to the lower levels in the
organisation.
41
 Scalar Chain
It refers to the line of authority or the

chain of superiors starting from the highest
and moving towards the lowest rank.
 Order
It means have a place for everything and

keep everything in its place.
Order has two components:

(i)Material order: It means having place for all
materials and keeping them in their right
place.
(ii)Social order: It means right man is assigned
for the right job.
 Equity
It implies being just and loyal to

all concerns and superiors should be
impartial while dealing with their
subordinates.
 Stability of tenure of the Personnel
This principle states that

employees should not be removed from
their positions frequently.
 Initiative
Employees at all levels should be

allowed to take initiative in work
related matters.
 Espirit de corps.
“Union is strength” is a well

accepted principle. The contribution of a
team is far better than that of individuals.
MAX WEBER: (PRONOUNCED AS
VAY-
• A German sociologistBAR):
(1864-1920)
studied
whoorganizational activity. He developed
theory of authority structures and relations.
Weber described an ideal type of
organization he called a bureaucracy- a form
of organization characterized by division
labor, a clearly defined hierarchy, details
rules and regulations and impersonal
relationships.
48
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WEBER’S IDEAL
BUREAUCRACY
49
2 -33 49
CHESTER BARNARD
(1886-1961)
• An enterprise can operate efficiently and survive only
when the organization’s goal are kept in balance with
the aims and needs of the individuals working for it.
• According to him people come together in formal
organizations to achieve ends they can not accomplish
working alone.
• Zone of indifference (area of acceptance)
• Individual and organizational purpose kept in balance
if manager understood an employee’s ZoI.
• What the employee can do without questioning the
manager’s authority.
50
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MARY P
ARKER
FOLLETT
• She introduce new element, specially in the new area
of human relation and organizational structure.
• Follett was convinced that no one could become a
whole person except as a member of a group;
• Human relationship with others in organization.
• She called Management as “art of getting things
done through people”
• Follett’s “holistic” model of control took into account not
just individuals and groups, but the effect of such
environment factors as politics, economic, and biology.
• In her model she gave an idea that management meant
more than just what was happening inside a particular
organization.
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BEHAVIOURAL
• SCHOOL
A group of management scholars trained in
sociology, psychology, and related fields, who
use their diverse knowledge to propose more
effective ways to manage people in
organization.
• This school evolved in recognition of the
importance of human behavior.
• How managers interact with other employees
or recruits.
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52
Click to edit Master titleELTON
style
• MAYO:
Hawthorne effect
• The possibility that workers who receive
special attention will perform better because
they received special attention
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A MASLOW’S
THEORY
Self-
Actualization
Esteem
Social
Safety
Physiological (basic)
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DOUGLAS
MCGREGOR:
• McGregor’s argument was that management
had been ignoring the facts about people. It
believes the Theory X to be truer while
Theory Y is more truly representative of
most people.
•  Models such as Theory X and Theory Y are

also called paradigms.
55
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CONT
D…
• There will be differences among people, so a
few will be fit in the Theory X. Nearly all
employees, however, have some potential for
growth in their capabilities and
demonstrated performance.
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THEOR
YX
• According to McGregor, a traditional view of
motivation that holds that work is distasteful
to employee, who must be motivated by
force, money, or praise.
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THEORY X
ASSUMPTIONS
• The typical person dislikes work and will

avoid it if possible.
• The typical person lacks responsibility, has
little ambition, and seeks security above all.
• Most people must be forced, controlled and
threatened with punishment to get them to
work
58
58
THEOR
YY
• According to McGregor, the assumption that
people are inherently motivated to work and
do a good job.
59
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THEORY Y ASSUMPTIONS
• Work is as natural as play or rest.
• People are not inherently lazy. They have
become that way as a result of experience.
• People will exercise self-direction and self-control in
the service of objectives to which they
committed.
are
• People have potential. Under proper conditions they
learn to accept and seek responsibility. They have
imagination, ingenuity, and creativity that can be
applied to work.
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60
Click to edit MasterSYSTEM
title style
• A set of things working together as parts

ofan interconnecting network.
• A system is a prescribed and
repetitious
usually way of carrying out an activity or
a set of activities.
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45
SYSTEM
• APPROACH
A system may be defined as a goal-oriented
organism that is composed of interrelated in
such a way that the total system is greater
than the sum of its parts. The system may be
viewed as consisting of four basic elements-
inputs, outputs, transformation process and
feedback. Inputs are processed to achieve the
desired output.
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THE
Click to edit ORGANIZATION
Master title style AS
AN OPEN SYSTEM
Exhibit 2.6
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63
KEY CONCEPTS
• Subsystems : those parts making up the
whole system.
• Synergy : 1+1 > 2
• Open system : a system that interacts with
its environment.
• Close system : a system that does not
interact with its environment
• System boundary : the boundary that
separates each system from its environment.
It is rigid in a closed system, flexible in an
open system. 64
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THE CONTINGENCY
Click to edit Master title style 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; also called the
situational approach.
65
65
Click to edit Master title styleCONT
D…
• The Contingency approach was developed
managers, consultants, and researchers who tried to
by
apply the concepts of the major schools to real life
situations.
• According to the contingency approach the manager
task is to identify which technique will be “in
particular
a under particular
circumstances,
situation, and at particular time”,
contribute
a to the attainmentBest
of management
goals.
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DYNAMIC ENGAGEMENT
APPROACH
The •view that time and human relationship are
forcing management to rethink tradition approach in the face of

constant, rapid
• change.
The term Dynamic Engagement best expresses other vigorous way
today’s most successful managers focus on human a relationship and
quickly adjust to changing conditions over time.
•
The management has come limelight after 1990s.
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MANAGEMENT Evolution

THEORY --- Mamta Prasad

Contributions of Henry L.Gantt

Principles of Scientific Management

• Main contributors - Maslow, F.Herz berg & D.Mc Gregor

Classical Organization Theory school

Management Science School

The System Approach

The Contingency Approach 23

• Fatigue And Motion Study

DR S aving less motivational impact

Work should be divided into small

Authority means right to give orders

Discipline is essential for the

It states that an employee

It states that the activities

The business enterprises is superior

Remuneration of work done must

It refers to the line of authority or the

It means have a place for everything and

Order has two components:

It implies being just and loyal to

This principle states that

Employees at all levels should be

“Union is strength” is a well

•  Models such as Theory X and Theory Y are

• The typical person dislikes work and will

• A set of things working together as parts

forcing management to rethink tradition approach in the face of

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