MAJOR SCHOOLS OF MANAGEMENT THOUGHT

The schools of management thought are theoretical frameworks for the study of
management. Each of the schools of management thought are based on different assumptions about
human beings and the organizations for which they work. The study of management has progressed
since 19th century and different authors working towards this topic has different views and opinions
on what they believed is an important characteristics of good management practice. Different
writers has different numbers of schools of management, this paper will focus on five classes of
schools of management thought (1) the classical school, (2) the behavioural school, (3) the
quantitative or management science school, (4) the systems school, (5) and the contingency school.

MANAGEMENT Beginning
Emphasis
SCHOOLS Dates

CLASSICAL Managing workers and organizations more

SCHOOL efficiently.

Scientific
1880s
Management

Administrative
1940s
Management

Bureaucratic
1920s
Management

BEHAVIORAL Understanding human behavior in the

SCHOOL organization.

Human Relations 1930s

Behavioral Science 1950s

QUANTITATIVE Increasing quality of managerial decision-

SCHOOL making through the application of mathematical
and statistical methods.
Management Science 1940s

Operations
1940s
Management
 MANAGEMENT Beginning
Emphasis
SCHOOLS Dates

Management 1950s—
Information Systems 1970s

SYSTEMS SCHOOL 1950s Understanding the organization as a system that

transforms inputs into outputs while in constant
interaction with its' environment.

CONTINGENCY 1960s Applying management principles and processes

SCHOOL as dictated by the unique characteristics of each
situation.
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1. CLASSICAL SCHOOL

This is also called Operational Approach or Traditional School. The classical school of
thought generally concerns ways to manage work and organizations more efficiently. The
management process consists, planning, organising, directing and controlling in all the situations.
This School is a “Body of management thought based on the belief that employees have
only economical and physical needs, and that social needs and need for job-satisfaction either
don’t exist or are unimportant. Accordingly, this school advocates high specialization of labor,
centralized decision making, and profit maximization.” (www.businessdictionary.com)
There are three areas of study under the classical school:

- Scientific Management: Scientific management was introduced in an attempt to create

a mental revolution in the workplace. Advocators of this school of thought attempted
to raise labor efficiency primarily by managing the work of employees on the shop
floor. Frederick W. Taylor was its main proponent. Other major contributors were
Frank Gilbreth, Lillian Gilbreth, and Henry Gantt.

Scientific management has several major principles.

o First, it calls for the application of the scientific method to work in order to
determine the best method for accomplishing each task.
o Second, scientific management suggests that workers should be scientifically
selected based on their qualifications and trained to perform their jobs in the
optimal manner.
 o Third, scientific management advocates genuine cooperation between workers
and management based on mutual self-interest.
o Finally, scientific management suggests that management should take complete
responsibility for planning the work and that workers' primary responsibility
should be implementing management's plans. Other important characteristics
of scientific management include the scientific development of difficult but fair
performance standards and the implementation of a pay-for-performance
incentive plan based on work standards.

- Administrative Management: the classical administrative approach concentrates on the

total organization. The emphasis is on the development of managerial principles rather
than work methods. In contrast to scientific management, which deals largely with jobs
and work at the individual level of analysis, administrative management provides a
more general theory of management. Henri Fayol is the major contributor to this school
of management thought.

Henri Fayol a French industrialist was one of the most influential management thinkers
who developed one of the Classical Management Theory known as ‘Administrative
Management’. Scientific Management theory was concerned with increasing the
productiveness of the shop floor while his theory grew out of the need to find guidelines
to manage complex organisations like factories. An early effort pioneered by Fayol was
to identify the skills and principles that underlie effective management.

Fayol developed 14 principles of management which provides present-day managers

with guidelines on how he/she should organize his/her department and manage staff.

o Division of work: Division of work and specialization produces more and better work
with the same effort.
o Authority and responsibility: Authority is the right to give orders and the power to exact
obedience. A manager has official authority because of her position, as well as personal
authority based on individual personality, intelligence, and experience. Authority
creates responsibility.
o Discipline: Obedience and respect within an organization are absolutely essential.
Good discipline requires managers to apply sanctions whenever violations become
apparent.
o Unity of command: An employee should receive orders from only one superior.
o Unity of direction: Organizational activities must have one central authority and one
plan of action.
o Subordination of individual interest to general interest: The interests of one employee
or group of employees are subordinate to the interests and goals of the organization.
 o Remuneration of personnel: Salaries — the price of services rendered by employees —
should be fair and provide satisfaction both to the employee and employer.
o Centralization: The objective of centralization is the best utilization of personnel. The
degree of centralization varies according to the dynamics of each organization.
o Scalar chain: A chain of authority exists from the highest organizational authority to
the lowest ranks.
o Order: Organizational order for materials and personnel is essential. The right materials
and the right employees are necessary for each organizational function and activity.
o Equity: In organizations, equity is a combination of kindliness and justice. Both equity
and equality of treatment should be considered when dealing with employees.
o Stability of tenure of personnel: To attain the maximum productivity of personnel, a
stable work force is needed.
o Initiative: Thinking out a plan and ensuring its success is an extremely strong
motivator. Zeal, energy, and initiative are desired at all levels of the organizational
ladder.
o Esprit de corps: Teamwork is fundamentally important to an organization. Work teams
and extensive face‐to‐face verbal communication encourages teamwork.

- Bureaucratic Management: This area focuses on the ideal form of organization. Max
Weber was the major contributor to bureaucratic management. Based on observation,
Weber concluded that many early organizations were inefficiently managed, with
decisions based on personal relationships and loyalty He believed that performance
evaluation should entirely be made on the basis of merit and that technical competence
should be emphasized on. The key elements of a bureaucracy are defined by Weber as:
A clear chain of command within a well-defined hierarchy where the top post holders
have the authority and the right to control the lower post holders; Specialisation of skills
and division of labour, where every employee will have the authority and essential
expertise to finish a particular task; In writing, accurate and complete rules and
regulations, to control and govern all decisions, activities and situations; Impersonal
relationships between employees and managers, with clear duties of personnel and
statements of the rights; And all the decisions regarding selection, recruitment and
promotion will be made on the basis of technical competence. The framework Weber
provided for his theory of Bureaucratic Management advanced the formation of many
huge corporations such as Ford. (www.lehren.org; Stoner et al, 1996; Cole, 2004)

2. BEHAVIORAL SCHOOL

The behavioral school focused on trying to understand the factors that affect human
behavior at work. Behavioral theorists believed that a better understanding of human behavior at
work, such as motivation, conflict, expectations, and group dynamics, improved productivity. This
approach was stimulated by a number of writers and theoretical movements. There are two braches
contributed to behavioral school: The Human Relation Movement and The Behavioral Science
Approach.

- Human Relation Movement: The human relations movement grew from the Hawthorne
studies. A series of experiments that rigorously applied classical management theory
only to reveal its shortcomings. One of the major conclusions of the Hawthorne studies
was that workers' attitudes are associated with productivity. Another was that the
workplace is a social system and informal group influence could exert a powerful effect
on individual behavior. A third was that the style of supervision is an important factor
in increasing workers' job satisfaction. The studies also found that organizations should
take steps to assist employees in adjusting to organizational life by fostering
collaborative systems between labor and management. Such conclusions sparked
increasing interest in the human element at work; today, the Hawthorne studies are
generally credited as the impetus for the human relations school.

According to the human relations school, the manager should possess skills for
diagnosing the causes of human behavior at work, interpersonal communication, and
motivating and leading workers. The focus became satisfying worker needs. If worker
needs were satisfied, wisdom held, the workers would in turn be more productive. Thus,
the human relations school focuses on issues of communication, leadership,
motivation, and group behavior.

- Behavioral Science: While human relations theorists take simple view of human
behaviour (they focus on interpersonal relations), behavioural theorists take complex
view of the work situation (they focus on the performance of individuals and groups).
The approach focuses not on individual behaviour (human relations approach) but on
group behaviour and relationship amongst different groups affected by varied social
and cultural beliefs. Some behavioural scientists, like Maslow and McGregor believe
that more than a ‘social man’, worker is a ‘self-actualizing man’. Generally, workers
want their lower-order needs to be satisfied before higher-order needs (ego and self-
actualization), but there are people who work for higher-order needs even at the cost of
their job security.

The behavioural scientists motivate people according to their need perceptions. They
believe that people differ with respect to their needs, values, attitudes and perceptions
and, therefore, act differently in similar situations. Managers understand these needs
and values, satisfy them through motivators and synchronize their individual goals with
organisational goals.
3. QUANTITATIVE SCHOOL

The quantitative school of management strives to combine classic management theory and
behavioral science through the uses of statistical models and simulations. There are three areas
under quantitative school: Management Science, Operations Management and Management
Information System.

- Management Science: “Management science is an approach that aims at increasing

decision effectiveness through the use of sophisticated mathematical models and
statistical methods.” Management science also known as operations research uses
mathematical models such as linear programming, PERT, CPM, games theory,
probability, sampling theory, capital budgeting, financial structure theories and
symbols to solve organisational problems.

Whenever management has a problem, it calls a team of experts from relevant

disciplines which analyses business problems and frames a mathematical model by
collecting the relevant data (like cost of machine, cost of raw material, selling price of
the product etc.) and tries to maximise the output and minimise the cost, Computers
have simplified application of these models to deal with various problem-solving
situations.

- Operations Management: This school focuses on the operation and control of the
production process that transforms resources into finished goods and services.
Operations management is the function, or field of expertise, that is primarily
responsible for managing the production and delivery of an organisation’s products and
services.” In operations management, people use quantitative techniques of forecasting,
inventory analysis, statistical quality control methods, networking models etc. in areas
such as inventory management, production planning, designing the production process,
purchasing raw materials, storing and selling the final products and similar areas in
manufacturing units.

- Management Information System: MIS is the field of management that focuses on

designing and implementing computer-based information systems for use by
management.” Large amount of information is quickly processed (conversion of raw
data into useful information) to make useful business decisions.

4. SYSTEMS SCHOOL:

The systems school focuses on understanding the organization as an open system that
transforms inputs into outputs. It began to have a strong impact on management thought in the
1960s as a way of thinking about managing techniques that would allow managers to relate
different specialties and parts of the company to one another, as well as to external environmental
factors. The systems school focuses on the organization as a whole, its interaction with the
environment, and its need to achieve equilibrium.

System means a complex whole, a set of connected parts or an organised body of things. It is a
set of parts or things which perform common functions. Rather than analysing parts of the
organisation independently, systems theory views the organisation as a whole which operates in
the larger external environment. According to Fred Luthans, “A system view point may provide
the impetus to unify management theory. By definition it could meet the various approaches,
such as the process, quantitative and behavioural ones, as subsystems in an overall theory of
management.”

This theory views organisation as a whole which operates in the external environment and has
internal environment consisting of departments (production, marketing, finance etc.), inter-
related to each other in a manner that input-output conversion is done most efficiently. Firms
have departments that work as sub-systems, e.g., production, marketing, finance, personnel etc.
These departments are inter-dependent and inter-related. If any sub-system stops working,
complete working of the organisation comes to a halt.

The systems approach, thus, views organisation as a single, integrated system of sub-systems. “It
is a set of inter-related parts that operate as a whole in pursuit of common goals. The systems
approach as applied to organisations is based largely on work in biology and the physical
sciences.”

5. CONTINGENCY SCHOOL:

The contingency school focuses on applying management principles and processes as

dictated by the unique characteristics of each situation. It emphasizes that there is no one best
way to manage and that it depends on various situational factors, such as the external
environment, technology, organizational characteristics, characteristics of the manager, and
characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize
the classical school for its emphasis on the universality of management principles; however,
most classical writers recognized the need to consider aspects of the situation when applying
management principles.

According to classical theory, if management wants to get the best out of workers, it should
increase wages or relax working conditions. The behavioural school of thought emphasises on
human needs to maximise their contribution to organisational output. Contingency approach is
synthesis of the two. It does not advocate either of the two to be universally applicable. It
depends on the situation.Contingency theory is a viewpoint that argues that appropriate
managerial action depends on the particular parameters of the situation. Hence, rather than
seeking universal principles that apply to every situation, contingency theory attempts to identify
contingency principles that prescribe actions to be taken depending on the characteristics of the
situation.

This approach does not advocate ‘universality of management principles’. Management

concepts, principles and theories depend purely on the situation. There is no best style of
management. Management style changes with changes in environmental factors. Managers
analyse the external environment, their strengths and weaknesses, managerial concepts in the
light of environmental factors and choose a concept or theory that best fits the situation.
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