 Different managers have different schools of thought.

 Frederick W. Taylor's theory is scientific.

 Henri Fayol's theory is administrative.
 Max Weber's theory is bureaucratic.
 Elton Mayo's theory is based in human relations.
 Ludwig von Bertalanffy's theory is systemic.
 Douglas McGregor's theory is based on different types of workers.
There's a lot more to managing a team than meets the eye. To properly lead a business, you need to appeal to
employees through numerous methods, including emotional and financial incentives. Employees in 2019 tend to enjoy
authentic managers who value them as people and professionals, whereas some of the original management theories
didn't value kindness or work-life balance.
Management is a constantly changing field, and it's both an art and a science. Most modern-day workplaces employ
multiple management theories to ensure optimal employee output. While many of these systems are hybrids of
multiple theories and strategies, there are a few famous strategies that have been studied by managers for decades.
Different managers have different schools of thought
Until the day computers can think, learn and feel emotions, humans will probably be the most complicated assets to
manage. We've come to expect error-free performance from a printer or fax machine, but you can't expect the same
thing from a human. On the other hand, there are many things that machines just aren't capable of, which makes
human assets irreplaceable. For this reason, proper management is vital to an organization's success.
"Proper management" is a tricky term, though. Not every employee, and certainly not every group of employees within
a company, responds the same way to certain managerial tactics. The best managers are able to use different styles
when dealing with different people, while still using one or two major guiding philosophies for leading a team. This can
make modern management challenging.
Theorists have long speculated on what type on management is best for humans in the professional setting. Their
management theories, or collections of ideas that provide the framework for effective management strategy, are
implemented in modern workplaces to motivate and bring out the best in employees.
It's common for managers to use more than one theory to achieve productivity or organizational goals. It is important
for managers to understand these different theories and know how to implement them, while also realizing past
management theories don't always tell the whole picture when it comes to effective leadership.

Here's more on the six most popular management theories discussed above in the infographic.

Scientific theory by Frederick W. Taylor

This one is a classic. Taylor's scientific theory poses some fascinating questions by diving deeper into the
efficiency of work processes. Taylor was an engineer, and he experimented in various ways to determine the most
efficient and effective ways to get tasks done.
On the surface, this theory held great value. The scientific theory aimed to make work more efficient.
Unfortunately, the theory had some major flaws as well.
Taylor created four principles of his scientific management theory. First, each task should be studied to
determine the most efficient way to do the task. This disrupts traditional work processes. Second, workers should be
matched to jobs that align with both their abilities and motivation. Third, workers should be monitored closely to
ensure they only follow best working practices. Fourth, managers should spend time training employees and planning
for future needs.
There are a few positives of this theory. Maximizing efficiency is a great idea. Assigning workers to jobs based
on their abilities and motivation levels is also an interesting idea that could have beneficial effects in some areas.
Major flaws in the theory include the de-emphasis on teamwork. An incredible focus on specific and individualized
tasks eliminates creative problem-solving and makes teamwork obsolete. The scientific management theory also
encourages micromanagement that could drive today's employees crazy.
Administrative theory by Henri Fayol
Fayol developed six functions of management that work in conjunction with 14 management principles. This
theory has a few core ideas that live on today, but you'll rarely find a workplace swearing by Fayol's 14 principles.
The six functions are as follows:
 Forecasting
 Planning
 Organizing
 Commanding
 Coordinating
 Controlling
Some people combine forecasting and planning into one function, simplifying the theory down to five functions.
The functions are straightforward, with Fayol saying managers need to plan for the future, organize necessary
resources, direct employees, work collaboratively and control employees to make sure everyone follows necessary
commands.
The 14 principles are as follows:
 Division of work – Employees should have complementary skill sets that allow them to specialize in certain
areas.
 Authority – Management needs authority to give employees orders. This authority must be agreed upon.
 Discipline – This gets to the idea of employees listening to commands and being disciplined in getting work
done. If a manager sets a deadline, an employee should have the discipline to meet it.
 Unity of command – Employees answer to their managers, and there aren't a bunch of unnecessary people
involved with the process. Going over your manager's head would be an example of breaking this principle.
 Unity of direction – Teams should be striving for common goals.
 Subordination of individual interests – The team comes before the individual.
 Remuneration – There are monetary and non-monetary versions of remuneration. Both are needed to
motivate employees.
 Centralization – There should be a balance between decision-making power. For example, a company's board
of directors should have a say, but the midlevel managers shouldn't be overpowered.
 Scalar chain – Each company should have clear hierarchical structures.
 Order – This refers mostly to cleanliness and organization within a workplace. An office shouldn't be
disgustingly messy.
 Equity – Employees should be treated well.
 Stability of tenure of personnel – This principle suggests that businesses should try to limit turnover and keep
employees around as they accumulate knowledge and improve.
 Initiative – Employees should share ideas and be rewarded for innovative thinking and taking on new tasks.
 Esprit de corps – Employee morale matters. This principle suggests that managers should work to keep
employees engaged and interested.
There are quality aspects of this theory. Remembering all 14 principles can be challenging and makes more sense
for a test on management than an entrepreneur running their business, but the principles apply in today's workforce.
Things like equity and remuneration are important aspects of management. Other principles, like scalar chain, aren't
always necessary. Some businesses find success without clear hierarchies, and the organizational setup depends largely
on the business and the size of the company.

Bureaucratic theory by Max Weber

Weber created the bureaucratic theory, which says an organization will be most efficient if it uses a
bureaucratic structure. Weber's ideal business uses standard rules and procedures to organize itself. He believed this
strategy was especially effective for large operations.
The theory includes the following five principles:
 Task specialization – Weber stressed the importance of each employee fulfilling a specific role within a
company.
 Hierarchy – Weber wanted each company to have a clear hierarchy within the organization.
 Formal selection – When selecting leaders, businesses view a person's qualifications. They should be appointed
to certain roles based on qualifications, which means they won't be elected by vote.
 Rules and requirements – These ensure everyone knows what's expected of them. Weber wanted business to
have uniform standards, and rules are essential to achieve this goal.
 Impersonal – The rules and regulations make a business structure impersonal. Promotions aren't about
emotions or personal ties, but rather performance.
Elements of this theory make sense. Some rules and standards are certainly necessary within every organization.
On the other hand, it's not easy to implement many of these ideas. The theory and practice don't line up. It's almost
impossible to keep emotions out of business decisions, and sometimes emotions are needed.
If your company offers three months of paternity leave, but a new mother has complications with her baby near the
end of those three months, some managers may offer another few weeks at home to care for the child. With Weber's
mindset, a manager would coldly ask her to return to work after three months like everyone else. Emotions shouldn't
always dictate decisions, but the best managers can relate to their employees on a personal level.
Human relations theory by Elton Mayo
In stark contrast to Weber's bureaucratic theory of management, the human relations theory emphasizes
relationships. Mayo believed that productivity increases when people feel like they are part of a team and valued by
their co-workers.
The human relations theory emphasizes praise and teamwork as motivational factors. This is basically the
opposite of the bureaucratic theory. While emphasizing personal factors is a good idea, there can be too much of a
good thing. Valuing relationships above all else can lead to tricky situations like office romances and promotions based
on personality rather than job accomplishments.
A happy medium between the bureaucratic theory and human relations theory might be a better goal for
managers. Some rules are necessary, but you shouldn't dehumanize employees either.
Systems theory by Ludwig von Bertalanffy
The systems theory of management believes that each business is a system, much like a living organism, with
numerous things going on to keep the operation rolling along. A business isn't just its CEO, and a person isn't just a
brain. A person needs its other organs and other key features to live. A business needs more than just a CEO to survive.
While the organism idea is a little extreme – most business operations aren't life-or-death endeavors – the analogy
applies. The systems theory says everything needs to work together for a business to succeed.
There is some truth to this theory, as businesses can benefit from getting different departments on the same page. If a
business's sales team is struggling, it can hurt the whole operation. On the other hand, a sales team struggling doesn't
necessarily hurt the accounting department. Many businesses have separate entities within their organization, so this
theory isn't completely accurate.

X&Y theory by Douglas McGregor

The X&Y theory of management assumes there are two different types of workers. Theory X workers lack
ambition and drive and need to be ordered around by bosses to do anything. Theory Y workers, on the other hand,
enjoy work and strive for self-fulfillment.
Both views of employees are a bit extreme, as most workers fall somewhere between X and Y. Employees don't
need to be ordered to do every task, but there is some need for discipline and rules for most employees. Many
employees do enjoy work, but it doesn't always come naturally and requires some encouragement at times. There
should be a middle ground for implementing this theory.
"This theory is largely considered to be obsolete today, as few managers begin from a starting position of being
highly polar or binary in terms of their management style being just one of two options at opposing ends of a spectrum,"
said Polly Kay, marketing manager at English Blinds.

The bottom line on management theories

Management theories popularized in the early to mid-1900s weren't perfect. That's unsurprising, as different
theories of management have gained steam in recent decades. Popular management theories from the past often
touch on important aspects of management but ignore other crucial points. When studying or implementing these
theories, it's important to know the pros and cons of each and how those might apply to your business, even if you
aren't directly using a certain style.
"In the real working world, few managers and business leaders consciously use management theories as rigid
frameworks to adhere to or as long-term guiding principles," said Kay. "That said, many do attempt to consciously
incorporate individual elements of their preferred management theories into their broader management style."
When it comes to implementing management theories, it's important to understand that no two employees or
businesses are the same. A certain style may offend one employee, while another employee may respond beautifully.
Management is both art and science, and being an effective manager requires more than an understanding of certain
theories. How they put them into practice is what separates good and bad managers.

Theory C: A New Theory of Management

With employee disengagement remaining at very high levels in America as well as globally, and growth in
significant new scientific findings that shed light on conditions necessary for human flourishing, it’s time to reconsider
management theory and our approach to maximizing the performance of individuals and organizations.
Accordingly, my colleagues and I recently submitted our paper titled “Theory C: Connection Culture as a New
Theory of Management” to an award-winning leadership journal. The paper is based on ideas presented in our work,
including our most recent book, Connection Culture: The Competitive Advantage of Shared Identity, Empathy and
Understanding at Work. We propose that the next step in the evolution of management theory is to develop an
organizational culture that helps people feel a sense of connection, community and unity through the cultivation of
attitudes, language and behavior that reflect universal character strengths. We refer to this approach as Theory C, or
Connection Culture Theory, and it can be taught with a simple, memorable and actionable 3V Leadership Model (Vision
+ Value + Voice = Connection). We consider it as the next evolution in management theory in that it incorporates what
has been learned over the last century (i.e. from Frederick Taylor’s scientific management through more recent
discoveries from research on emotional intelligence, stress, social neuroscience and positive psychology).

Now is the Time

In 2007, we introduced Connection Culture Theory in our first book Fired Up or Burned Out. Since then, we’ve
continued to closely follow developments in the science of connection and loneliness, and our clients and colleagues
in the profession have helped us advance Connection Culture Theory by identifying many examples and best
practices. This has resulted in an increasingly robust, integrated management theory.
Awareness of the importance of connection and the devastating effects of loneliness has been on the rise. Press
coverage of connection and loneliness has soared.
 In August of last year, there was extensive media coverage about Julianne Holt-Lunstad’s American Psychological
Association presentation of her meta-analytic research review that showed actual and perceived loneliness were
predictive of death and on par with smoking 15 cigarettes per day. Dr. Holt-Lunstad warned that chronic social
isolation and loneliness is becoming a greater public health hazard than obesity.
 In the fall, Harvard Business Review published “Work and the Loneliness Epidemic,” written by Dr. Vivek Murthy,
former U.S. Surgeon General. In his piece, Dr. Murthy called on organizations to make boosting social connections
a strategic priority.
 In mid-January, the U.K. received a flurry of media coverage for establishing a Minister of Loneliness to help
address its growing problem of chronic loneliness.
 Last week, bestselling author Johann Hari’s book Lost Connections was published. The book makes the case that
depression and anxiety are often caused by factors in one’s social environment. Lost Connections is sure to
become a blockbuster.

As we’ve shared our Connection Culture Theory, we’ve had respected leaders in the U.S. and around the world
encourage us that we are onto something important with Connection Culture Theory. Last year, I had a telephone
conversation with Alan Mulally, the CEO who led the turnaround of the Ford Motor Company. Alan told me that what
we wrote in Connection Culture really captured what happened at Ford. He said the “Connection > Culture > Thrive
Chain” that appears in the book and visually depicts Connection Culture Theory, represented the future of leadership
formation and continuing education, and that he was recommending the book to leaders he mentored.
Recently I spoke with the data scientist Veronica S. Smith, founder of data2insight, a data science consulting
firm. She shared with me how after years of working in organizations with cultures that were indifferent to the
humanity of people she decided to create the type of culture she wanted to work in by starting her own company.
Now, new employees of data2insight receive a copy of Connection Culture. They also read articles on Connection
Culture and discuss them in team meetings to help them stay connected as a team and avoid drifting toward
indifference.
If you’ve been following our work you know that Costco purchased copies of Connection Culture for its
warehouse managers worldwide and last August I spoke at Costco’s Annual Managers’ Meeting in Seattle. While
there, I heard a senior leader at Costco tell the audience of managers that “connection is at the heart of our culture at
Costco.” To further strengthen connection, Costco is encouraging its warehouse managers worldwide to train aspiring
supervisors by teaching them how to create connection cultures. After being in the top three for several years in a row,
Costco surpassed Google and was named America’s best “large employer” last year in a Forbes/Statista research study
of 30,000 employees.
Jay Morris, Vice President of Education and Executive Director for the Center for Excellence at Yale New Haven
Health, has encouraged us to boldly claim “Theory C.” He explained connection is much needed today because progress
that was made in valuing relationships in the workplace with the influence of National Training Laboratories (NTL)
during the second half of the 20th century was diminished in the late 1980s with the reengineering craze. He said the
3V Leadership Model was a natural step into this space and concluded his advice with these words: “If not you, then
who?”

How You Can Help

Please consider joining us in raising awareness of Theory C (Connection Culture Theory). If you’ve
read Connection Culture and like it, we would greatly appreciate it if you would post a review
on Amazon.com, BarnesandNoble.comand/or Goodreads.com. Purchase copies for your family members and
colleagues who would benefit from reading it so that they can more clearly understand what a healthy workplace
culture looks like and actions they can take to improve the culture they work in. To purchase signed copies
of Connection Culture, email me at [email protected].
Trainers/coaches can help by emailing me to let me know you are interested in becoming a certified Connection Culture
Trainer/Coach when we launch that program later this year.

Classification of Management Theories: 4 Schools of Thought

Management theories can be classified into four main schools of thought: 1. Pre-Scientific Management Theory 2.
Classical Theory 3. Behavioral Theory 4. Modern Management Theory.
1. Pre-Scientific Management Theories:
If we look at recorded history, a number of monumental examples of management can be traced. The Sumerian
civilization, Egyptian, Chinese, Greek and Roman civilizations represent significant practices in management.
 They represent management concepts that helped in smooth administration of these civilizations. Though
famous even today, they do not provide significant information about the way these civilizations were managed.
These concepts did not provide important insight into management of business (or economic) institutions. No
important techniques were available to solve organizational problems until the end of 15th century. It was in 1494 that
the technique of double entry book-keeping was introduced to maintain financial records of the business. In 1800s,
management theories developed as a systematic field of knowledge. Until formal management theories developed,
pre-scientific management theories contributed to the management thought.

Contribution made by some of the management thinkers is as follows:

1. Charles Babbage:
One of the early British thinkers on management, Babbage, was the forerunner of scientific management. His
work was closely related to that of Adam Smith (an economist), as he emphasized on work measurement, cost
determination, bonus plans and profit sharing specialization (dividing the work into various jobs) to increase managerial
efficiency. His findings are also reflected in Taylor’s scientific management. He introduced methods like work
measurement, cost determination, bonus plans and profit sharing to improve industrial productivity.
2. James Montgomery:
He was a textile owner-manager in Scotland. He focused on planning, organizing and controlling of business
and wrote management texts for their efficient working.
3. Robert Owens:
He was a textile entrepreneur and is known as the father of Personnel Management. His emphasis was not on
the process of industrialization or division of labor but on development of people. He advocated that workers should
be treated as human beings and their values and beliefs should be respected. If working conditions and needs of the
workers are satisfied, they work to achieve the organizational goals.
He advocated improving living conditions (both factory and domestic conditions) of employees by upgrading
the streets, houses, sanitation facilities etc. He also brought social and educational reforms for the employees.
He believed that higher wages for workers, participation in managerial decision-making and positive motivation can
increase productivity. His ideas on management to coordinate economic performance with human relations are found
in Hawthorne experiments also.
4. Andrew Ure:
He was an English industrialist and focused on educating managers through training and moral education to
make them contribute to organizational goals.
5. Charles Dupin:
He was an industrial educator in France. According to him, besides technical knowledge for contributing to
organizational output, managers also needed broader management skills to maximize industrial output. He emphasized
more on management education than technical education.

Evaluation of Pre-Scientific Management Theories:

These theories were primarily related to the organizational environments. They focused on specific
organizational problems in specific ways. As each manager had his own way of viewing the organization, some
emphasized on production and others on human relations.
There was no single universally accepted management theory that could apply to all organizations at all times.
It was by the end of the 19th century that management became a systematic field of study. The early contributions
include those made by Taylor in the early 20th century as scientific management.
2. Classical Theory:
It is the oldest theory of management and is, therefore, called the traditional theory of management. The
classical viewpoint finds ways to manage business organizations effectively. It includes management theories that
provide foundation to the study of management. It is the first step towards the study of management as a distinct field
of study.
With increase in complexity of organizations, the need to have systematic approach to management became
inevitable. The focus was on industrial production. Financial incentives were considered important contributors to
organizational output.
Features:
1. It includes some of the early works on management which provide foundation to the modern management theory.
2. It attempts to find methods that 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 individual and organizational needs.
5. It views organizations as closed systems which do not interact with the external environment.
6. It develops a set of ‘management principles’ which universally apply to all organizations: business and non-business.
Three main theories that developed in the classical school of thought are:
a. Taylor’s Scientific Management Theory,
b. Fayol’s Classical Organization Theory and
c. Weber’s Bureaucracy Theory.
a. Taylor’s Scientific Management Theory:
During the beginning of the 20th century, skilled labor was scarce in the United States. This affected industrial
productivity. Efficiency of workers had to be increased and, thus, management thinkers worked on how to increase
labor efficiency to increase productivity. They thought of deleting or combining the operations of work.
 At that time, Frederick W. Taylor (1856-1915) introduced scientific management theory. Taylor is also known
as the father of Scientific Management. It was called scientific management because Taylor focused on solving
managerial problems in a scientific way.
Scientific management is the forerunner in the study of management. It developed because of the need to
increase productivity. To compensate for short supply of skilled labor at that time, this theory developed to increase
efficiency of the workers.
Taylor found that work was not being done scientifically in many organizations which led to wastage of human
and non-human resources. Time and work studies were not followed so that ‘how much work should be done in a day
and how much should be paid for each day’s work’ was not scientifically planned.
He felt that workers produced much less than what they could as they followed traditional methods of production. ‘Hit
and trial’ approach was used for combinations of work schedules. Scientific ways (or the best way) of work were not
adopted.
In this regard, Taylor was confronted with many questions:
1. Could the existing work schedule be reorganized by adding or deleting some of the operations?
2. Could the sequence of existing operations be changed?
3. Was there ‘one best-way’ of doing the work?
Taylor worked on these lines and provided scientific ways of doing the work. He conducted various experiments and
developed the theory of scientific management.
The theory focused on:
i. The best way of doing each task/job by eliminating operations that resulted in wastage of men and materials.
ii. Time and motion studies to find optimum time and nature of operations for successful completion of each task.
Taylor’s theory is based on experience in three companies:
i. Midvale Steel,
ii. Simonds Rolling Machine Company and
iii. Bethlehem Steel.

(i) Midvale Steel:

Taylor joined Midvale Steel as a worker and became its chief engineer in 6 years.
During his tenure at Midvale, he observed that workers did not work at their full capacity because of the following
reasons:
1. Wages were paid on daily basis so that workers were present in the factory but their output was low.
2. Workers feared to work fast because they thought that if they finished the work fast, they would be turned out by
the management or their wages would be lowered.
3. General methods of work were based on ‘Rule of Thumb’ or ‘Hit and Trial’. Scientific approach to work was not
followed.
(ii) Simonds Rolling Machine Company:
Taylor worked as management consultant in this company. In one of their projects, workers inspected bicycle
ball bearings. Management felt that since this work involved long hours and was also not innovative, efficiency was
low. Taylor studied and timed the movement of best workers and motivated and trained the rest of the workers to
improve their performance up to that level.
For this, he adopted the system of ‘differential rate’ and introduced improvements in their working schedule
including rest hours. This changed the quantity and quality of production, and workers’ earnings and management’s
profits, both rose up.
(iii) Bethlehem Steel:
At Bethlehem Steel, Taylor conducted two important experiments of Pig-iron Handling and Shoveling. In the Pig-iron
experiment, he studied the time and movement of workers who unloaded raw materials from the incoming railcars
and loaded finished goods on the outgoing ones. He observed that one worker could load about 12 ½ tons per day and
earn $1.15 each day. Taylor selected the most efficient worker, studied his time and motion and changed the way of
work.
He introduced rest periods during the long working hours and offered incentive plans to workers who achieved
the targeted performance. He set the target of 47 ½ tons per day and a wage rate of $ 1.85 per day for those who met
this standard. It was found that workers managed to meet this standard and loaded almost 48 tons of goods each day.
b. Henri Fayol’s Classical Organization Theory (Management Process Theory):
While Taylor emphasized on productivity at the shop level, Fayol focused on the organization as a whole. Fayol
was concerned with general management and control of the entire organization and not just supervision and control
of operations at lower levels of management. His focus was on management of the organization and not simply
individual jobs. 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 (1841-1925) worked with the French Coal and Iron Company as a junior executive and promoted as
director in the same company. He retired in 1918. There was a general belief at that time that ‘managers are born, not
made’, that is, only those who had inherent qualities of being a manager can become managers. Managers cannot be
made through formal knowledge and training.
This view was opposed by Fayol who said that managers need not necessarily be born; fundamental principles
underlying the managerial theory can be taught and, thus, managers can be made. He believed that “management
could be taught, once its underlying principles were understood and a general theory of management was formulated.”
His work on general management was first published in 1916 in French as General and Industrial Management. This
was translated in English in 1929 and then a second English translation was done in 1949 in the United States. His ideas
became famous in the field of management after his work was translated in English.

His work can be found in business even today and, therefore, Fayol is aptly called the father of modern management
theory. His theory can be understood under the following headings:
(a) Activities of a business:
Fayol divided business activities into six groups:
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 relates to:
(i) Keeping accounts such as Profit and Loss account and balance sheet,
(ii) Minimizing costs, and
(iii) Maintaining statistics.
6. Managerial:
It relates to functions performed by a manager. Fayol believed that first five activities of business (operating
activities) were followed in the organizations but they were lacking in managerial skill and, therefore, based his theory
on managerial activities of business organizations.
(b) Functions of a manager:
Fayol classified the following functions of managers:
1. Planning:
To determine goals of the organization and devise a course of action to achieve them.
2. Organizing:
To coordinate human and non-human resources of the organization to put the plans into action.
3. Commanding:
To direct and guide the workers to perform their duties well.
4. Coordinating:
To synthesize the resources and activities of the organization to achieve the goals.
5. Controlling:
To ensure that plans are effectively carried out and discrepancies are checked.
(c) Abilities of managers:
These refer to the skills of managers at different levels of the organization, like managerial skill, technical skill,
human skill etc.
These skills vary according to the:
1. Level at which managers work, and
2. Size of the organization.
According to the level: At higher levels, managers exercise more of managerial skills and at lower levels they
exercise more of technical skills. Top level managers perform managerial activities more than technical activities and
lower level managers perform more of technical work.
Importance of managerial ability increases as one moves up the hierarchy. Fayol, therefore, advocated sound
management principles that enhance the ability of top managers to manage the organization effectively.
According to size of the organization:
Managers at the same level perform duties of higher skills in a large-sized organization and lower skills in a
small-sized organization. For example, general managers of a large business have managerial skills but those of a small
business have technical skills along with managerial skills to achieve the organizational goals.
Fayol identified the qualities of managers as:
1. Physical – Health and vigor,
2. Mental – Ability to analyze, interpret and arrive at conclusions,
3. Moral – Willingness to accept responsibility, loyalty and dignity,
4. General education – Knowledge of overall affairs of the organization,
5. Special knowledge – Knowledge of a specific activity; technical, commercial or financial, and
6. Experience – Knowledge gained over a period of time while working in the specific functional area.
(d) Principles 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 and usually apply in most business
situations. They were considered as indispensable for every business and non-business organization. The word
‘principles’ was used by Fayol to describe their flexibility.
In his words, “I prefer the word principles in order to avoid any idea of rigidity, as there is nothing rigid or
absolute in administrative matters; everything is a question of degree. The same principle is hardly ever applied twice
in exactly the same way, because we have to allow for different and changing circumstances, for human beings who
are equally different and changeable, and for many other variable elements. The principles, too, are flexible and can
be adapted to meet every need; it is just a question of knowing how to use them.”
Significance of Administrative Management:
Fayol’s theory has greatly contributed to the modern management practices. His principles apply in the
managerial world. Managers are not born but can be made holds true as management theory is taught in various
management institutions.
Positive attributes of Fayol’s theory are:
1. Fayol pioneered in distinguishing management functions from other functions/ activities of a business.
2. He was the first to highlight the universality of management principles.
3. His contribution to management theory is the foundation to development of management thought. His
functions of management provide systematic understanding to the process of management. His theory is also
known as management process approach.
Limitations of Administrative Management:
Fayol’s theory has the following limitations:
1. This theory is not well suited to modern business organizations which operate in the fast changing
environment. In this process, they may not follow the principles of management at all times. The principle of
centralization, for example, where subordinates are not part of the decision-making process may not enable
the organizations to adapt to the changing environment. In fact, workers’ participation in management is the
feature of modern day organizations. The concept of universality of management, therefore, does not hold
true.
2. It over-emphasizes formal structure of the organization and ignores informal needs of the workers.
3. The impact of external environment is not taken into consideration. This theory was introduced when
environment was more or less stable. Contemporary management cannot work without active interaction of
organizations with the external environment. Despite the limitations, Fayol’s contribution to management is
important. Though not always applicable in every situation, his principles are generally in widespread use
today.
Comparison of Taylor’s and Fayol’s Theories:
Points of similarities:
Taylor’s and Fayol’s theories are similar to each other with respect to the following:
 1. Both the theories represent pioneering work in the study of management. They are the foundation to the study
of management.
2. Both Taylor and Fayol found ways to increase the output.
3. They emphasize on financial needs which can be satisfied through financial incentives.
4. They focus on formal jobs and work schedules to satisfy individual and organizational needs.
5. They view organizations as independent units with little or no interaction with the external environment.
6. They develop a set of management principles important for industrial progress.
7. Both the theories are developed on practical experience in their respective companies.
8. Both emphasize that managerial qualities can be acquired. Therefore, organizations should attempt to develop
these qualities.
Points of differences:
While Taylor focused on efficiency of operating workers, Fayol aimed at improving efficiency of the organization
as a whole. Fayol’s theory, therefore, has wider applicability.
The theories differ from each other on the following grounds:
1. Taylor is known as the father of scientific management while Fayol is known as the father of modern
management. He introduced the Administrative Management Theory.
2. Taylor emphasized on increasing productivity at the workers’ level while Fayol emphasized on managing the
organization as a whole.
3. Fayol’s principles of functional management focus on the entire enterprise while Taylor’s principles of scientific
management focus on a segment of the enterprise — operating level.
4. Taylor emphasized on organizational productivity through increase in worker’s efficiency while Fayol
emphasized on overall administration of the organization.

Taylor (Father of Scientific Management):

1. The aim is to increase production at the shop level.
2. The focus is on improving output through work simplification and standardization.
3. The theory studies management from bottom to top.
4. It is based on scientific observation and measurement.
5. It covers narrow perspective of management theory.
Fayol (Father of Principles of Management):
1. The aim is to increase overall production of the organization.
2. The focus is on developing principles that can be applied to coordinate internal activities of the organization.
3. Management is viewed from top to bottom.
4. It is based on personal experience later translated into universal truth.
5. It has wider perspective and, therefore, wider applicability.
c. Weber’s Bureaucracy Theory:
Max Weber (1864-1920), a German sociologist, made significant contribution in the fields of management,
economics, philosophy and sociology. In the field of management, his most significant contribution is his work on
bureaucratic management.
At the time when managers had traditional authority (authority by virtue of a particular class by birth) or
charismatic authority (authority by virtue of appeal and social power), Weber propagated the need for organizations
to be managed in a more rational manner. He introduced rational-legal authority system (rather than charismatic and
traditional authority) to manage business organizations.
The system was rational because organizations with formal authority-responsibility structures aimed to achieve
a set of pre-determined goals. It was legal because authority was exercised by a person not by virtue of his appeal, class
or reference but by position in the organization and was bound by a system of well- defined 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. Weber evolved an ideal type of bureaucracy which was a superior form of
organization with features of efficiency, objectivity, unity, discipline etc.
Contribution of Classical Theory to Management Thought:
1. Classical theory was the first to focus on management as a separate field of study.
2. It provided a groundwork for development of later theories. It highlighted basic organizational problems to the
management.
3. Many principles (job specialization and scientific methods of work) and functions of management of the
classical theory hold true even today.
 4. It provides a set of management principles and functions based on experiments and scientific methods which
can be applied to a large number of business and non-business organizations.
Limitations of Classical Theory:
1. This theory originated when organizations had stable and simple structures. They had very little interaction
with the environment. The modern organizations are complex and changing in form and, therefore, do not fully
comprehend the principles of classical theories. The theory was, therefore, more practical in the past than in
the present.
2. The principles of management are not universally applicable in the organizations today. The ‘universality of
concepts’ does not always hold good. The principle of unity of command, for example, does not apply in
organizations where jobs are highly specialized. There is extensive division of work and people receive orders
from various functional heads.
3. Employees are viewed as tools rather than resources for contributing to management objectives. Their social
and psychological needs are altogether ignored.
4. The focus of theory is more on task than people; human behavior and desires are ignored.
5. Monetary rewards are more important than non-monetary rewards. This is not always true. Non-monetary
rewards like status, power, recognition etc. can be more powerful than money in many cases.
6. Initiative and creativity of employees are totally ignored. Overemphasis on rules made these rules an end.
People strictly followed rules forgetting why these rules were framed.
3. Behavioral Theory:
Management thinkers of this approach focused on human relations and attributed organizational success to:
1. Organizational goals, and
2. Satisfaction of personal needs of human beings.
When principles of classical theory were put to practice, the responses at the work place were not very positive.
When researchers tried to analyze human behavior at work, they found that classical theorists viewed people as means
of production and suggested ways to increase production. But unfortunately, managers could not achieve the targets
of production as people at the work place did not always behave rationally. The focus was on mechanical side of the
organization and human side of the organization was totally ignored.
In behavioral theory, the focus shifted from workplace conditions to human side of the organization. The focus
changed from job to workers who performed those jobs. ‘Production-oriented’ approach was substituted by ‘people-
oriented’ approach. Behavioral theory is a “perspective on management that emphasizes the importance of attempting
to understand the various factors that affect human behavior in organizations.”
It recognizes that employees’ behavior is not affected by job conditions alone. Internal reactions to the job
situation also affect their behavior.
Two main theories which promote this idea are:
a. Human Relations Theory
b. Behavioral Science Theory
a. Human Relations Theory:
This theory analyses the impact of ‘what is achieved, how it is achieved and why it is achieved on people in the
organizations’ (Terry and Franklin). The approach emphasizes that “management does not do, it gets others to do”.
When focus of management is human beings and human relations, it boosts the morale of employees and productivity
and efficiency of the organizations increase.
“Human relations refer to the ways in which managers interact with their subordinates.” Managers should
know the factors that motivate the employees so that good human relations are developed in the organizations.
The theory considers organization as social system that looks after socio-psychological needs of the workers. It
looks beyond rewarding employees by financial incentives alone. Workers have to feel satisfied at the work place and,
therefore, managers adopt participative decision making, job enrichment, cordial work relationships etc. This will
promote individual goals, provide them work satisfaction and positively contribute to organizational goals.
Evaluation:
1. The human relations theory focused on promoting organizational efficiency through satisfaction of social and
psychological needs of workers more than other needs.
2. Workers are part of the group where informal rather than formal communication and leadership are more
effective.
3. Managers get better results by changing their management style; participative approach is better than
authoritarian approach; managerial skills are more important than technical skills.
4. Financial incentives are not always as rewarding as non-financial incentives in affecting the human behavior.
Limitations:
This theory suffers from the following weaknesses:
(i) Design of the theory:
The theory is based on experiments on a group of people which is not representative of the general population.
Social and psychological needs are not always as important as emphasized upon. They are secondary to physiological
needs and unless workers are satisfied with their pay packages and working conditions, they are not motivated to work
for their social needs.
(ii) Analysis of the theory:
It analyses group dynamics and decision-making as more important variables than unity of command to
increase productivity. This may not always hold true.
(iii) Interpretation of the theory:
It over-emphasizes the fact that objectives can be achieved if cordial relations are maintained in the
organization. Differences of opinion amongst people can also generate new ideas and innovations.
(iv) Human relations philosophy:
It says that informal groups satisfy workers and promote productivity which is not always true. It is proved
empirically that informal groups at the work place is a very simple assumption about workers’ contribution to their
jobs. Factors like motivation, communication and leadership also contribute to organizational efficiency. These factors
are considered in the behavioral science theory.
(v) Scientific method and human relations approach:
Human relations approach is not based on scientific methods. Workers are viewed as mere means to contribute
to organizational goals. The needs they want to fulfill through work and work environment are ignored.
Despite the shortcomings, hawthorne studies are important contributors to the study of social factors on
industrial production. It pioneered in changing the managerial focus from task to people. Workers should be treated as
human beings and not as hired labor. People have to be treated with dignity and respect. Their values and beliefs have
to be respected. John G. Adair comments: “No other theory or set of experiments has stimulated more research and
controversy nor contributed more to a change in management thinking than the Hawthorne Studies and the human
relations movement they spawned.”
b. Behavioral Science Theory:
Human relations theory lacked scientific vision to the study of human behavior. This was considered in the
behavioral science theory. Elton Mayo and other researchers applied scientific methods to study human behavior at
their work place.
While human relations theorists take simple view of human behavior (they focus on interpersonal relations),
behavioral theorists take complex view of the work situation (they focus on the performance of individuals and groups).
The approach focuses not on individual behavior (human relations approach) but on group behavior and relationship
amongst different groups affected by varied social and cultural beliefs.
They adopt concepts from various disciplines and test them in business organizations and laboratories before
they are accepted as management theories. Behavioral science theorists take wider view of organizational behavior.
They apply the concepts of social sciences or behavioral science (Psychology, Sociology and Anthropology) to
understand the behavior of human beings.
Psychology is the study of individual human behavior. Sociology is the study of human behavior in groups.
Anthropology is the study of human behavior as individuals and members of groups. Thus, these researchers came to
be known as behavioral scientists rather than ‘human relations theorists’.
This theory is, thus called the behavioral science theory. “The behavioral science approach emphasizes on
scientific research as the basis for developing theories about human behavior in organizations that can be used to
develop practical guidelines for managers.”
Some behavioral 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 behavioral 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 organizational goals.
Features:
1. It emphasises on participative and group decision-making rather than individual decision-making.
2. It emphasises on self-direction and self-control rather than control by managers.
3. It suggests positive measures to improve the performance of sub-standard workers rather than taking negative
actions against them.
4. It considers organisation as a group of individuals and identifies the reasons why individuals join groups and
factors that influence the group behaviour. Informal groups and group norms are considered important.
5. Behaviour of people is different as members of group than as individuals.
6. While working together, people form informal groups which have their own norms. Group norms have
powerful influence over organisational efficiency.
7. It introduces the concept of ‘complex man’ over ‘social man’ with varied needs. According to behavioural
scientists, human behaviour is need-based and, therefore, people react differently to different situations.
8. It appreciates conflict in the organisation. Conflict of opinion is considered desirable for human development.
The sociological approach to behavioural science theory recognises interaction amongst people of social
groups, their cultural relations and coordinates organisational activities with social and cultural values of
members of groups. It accepts that informal organisation co-exists with formal organisation (characterised by
formal leadership and well-defined authority- responsibility relationships).
The theory also asserts that since people do not react to same situation in the same way, general principles of
management cannot always be applied to organisations. Managers should create social and friendly environment at
the work place, allow participative decision-making and integrate individual goals with organisational goals so that
employees cooperate with managers as a group to increase productivity.
Contributors:
Sociologists like Blake, Selznick, Durkheim, Pareto, Dalton and many others have also contributed to
sociological aspect of the behavioural theory.
Evaluation:
Behavioural scientists have scientifically contributed to the human element; their needs and working
environment, interpersonal relationships, group behaviour and need for motivation, leadership and communication in
guiding organisational behaviour and solving group conflicts. It satisfies social and psychological needs of employees,
emphasises on interpersonal relations and group dynamism.
 Though this approach has significantly contributed to management theory, it is not always practical to deal
with human behaviour the way the theory suggests because of the complex nature of human beings. Human nature is
not predictable, it is not guided by the same motivational forces.
Group norms may not always supersede organisational norms, group decision-making may not always be
better than individual decision-making and social or human relations approach may not always be better than technical
aspects of work.
4. Modern Management Theory:
With increasing complexities of organisations, modern management theory developed as a synthesis of
quantitative theory, systems theory, contingency theory and operational theory of management.
The modern management thought is characterised by the following features:
1. Management is responsive to environmental changes. Successful organisations adapt to environmental
changes as part of the management practices.
2. Business organisations are dynamic institutions composed of inter-related divisions and sub-divisions.
3. Firms have multiple objectives. Managers balance economic and non-economic objectives and maximise the
interests of diverse groups of stakeholders like shareholders, customers, suppliers etc.
4. Management is multi-disciplinary in nature. It draws knowledge from various disciplines and synthesizes it to
solve managerial problems.
5. Management is future oriented. It forecasts environment through scientific techniques and discounts it to
make decisions in the present. Effective forecasts reduce risk and increase organisation’s adaptability to
changing environmental variables.
a. Quantitative Theory:
It became an acceptable theory during World War II when Britain had to solve the problems of war (Researchers
wanted to increase the efficiency of bombing and find procedures for detecting enemy supplies). The problem was that
the radar system did not perform well at field sites as it performed at the testing stations. On-site scientific observation
was, thus, called during actual operation.
The problem was studied by P.M.S. Blackett, a Nobel laureate of the University of Manchester. To examine
several perspectives of the problem and solve complex problems of war, Blackett assembled a team of people from
different streams like Mathematics, Physics, Statistics, Engineering and Economics.
This team was known as Operations Research (OR) team. It composed of an astrophysicist, two mathematical
physicists, a general physicist, two mathematicians, three physiologists, a surveyor and an Army officer. Specialised
knowledge of members of this team helped the British solve their problems.
Subsequently, when Americans entered the war, the US military services also formed an OR team based on
models similar to those of the British and applied quantitative methods for effective utilisation of scarce resources.
Mathematicians, engineers, physicists, psychologists and others were recruited to assist the task of military decision-
making. Besides improvements in the movements of radar, activities such as anti-submarine operations, aerial mining
of the sea, ship maneuvers under aerial attack and statistical analysis of bomb damage were also studied.
After the war was over, the quantitative specialists found jobs in business organisations and applied the inter-
disciplinary techniques of OR to industries. Large corporations and government agencies designed research activities
to deal with operational problems similar to research efforts directed to product development and marketing.
Operations research is “the application of scientific methods to problems arising from operations involving
integrated systems of people, machines and materials.” It involves knowledge of inter-disciplinary research team to
provide optimum operating solutions. “The quantitative management viewpoint focuses on the use of mathematics,
statistics and information aids to support managerial decision-making and organisational effectiveness.”
b. Systems Theory:
The theories discussed so tar (classical, behavioural and quantitative) focus on one aspect of the organisation;
‘task’, ‘people’ or ‘mathematical decision-making’. They apply under definite set of assumptions. The systems approach
takes broader view of management where the organisation is viewed as a whole, unified and purposeful entity
composed of different parts.
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.
It assumes that each part bears relationship with every other part of the organisation and, therefore, manager
should view the organisation as a whole consisting of several inter-related parts. This theory provides new thinking to
the study of organisations and management. It identifies simultaneous variations of mutually dependent variables of
the organisation.
System means a set of inter-related parts. 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 organisation itself is a sub-system of the larger environment. Thus, the concept works like a spiral where
each inner circle affects and is affected by the outer circle. Inner circle is a system in itself and a sub-system of its outer
circle.
In the context of the economy as a whole, with various firms operating in it, this circle can be represented as:
 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.”
c. Contingency Theory:
The contingency viewpoint developed in 1950s when a research team headed by Joan Woodward, an industrial
sociologist, studied 100 British firms of different sizes producing different products. Better performing companies were
compared with average or below- average performing companies to know the reasons why they performed better.
It was concluded that difference in performance of those companies was not because of principles of classical
theories but because of better technology to produce goods. This developed a theory that ‘appropriate actions by
managers often depend on (or are contingent on) the situation’.
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.
If workers are skilled, participative style of management or behavioural theory can be effective but if workers
are unskilled or their physiological needs are more important than the higher-order needs (self-actualisation needs),
classical theory will be more appropriate.
“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.”
Each organisation is unique, each problem is unique, each decision is unique and, therefore, the way of tackling
every situation is also unique. Every decision or solution depends upon the variables that affect the situation. Different
situations call for different decisions. There is no best way of doing things universally in all situations.
The theory developed when managers applied principles of management to different problem- solving
situations and concluded that these principles could not be universally applied to all the situations. With increasing
complexity of organisations where management has become a multi-disciplinary area which takes into account the
impact of psychological, sociological, behavioural, technical and other sciences, no single solution exists to all kinds of
problems.
Various principles, mathematical tools like statistics and operations research are situational or contingent in
nature. They depend on the particular situation. An international economist, Charles Kindleberger said that answer to
any problem in Economics could never be given positively, rather the answer was ‘It depends’.
This applies to management theory also. According to this approach, “the task of managers is to identify which
technique will, in a particular situation, under particular circumstances, and at a particular time, best contribute to the
attainment of management goals.” Past experience and experience of other firms also help in solving managerial
problems.
This theory is an extension of systems theory. It believes that organisation is an open system which
continuously interacts with external environment (consisting of parties outside the organisation).
While the internal environment consists of sub-systems or departments of the organisation, external
environment consists of social, political, economic, legal and technological factors that affect its working.
According to this theory, managers take note of both these environments to solve various business problems.
The contingency approach considers three important constraints that affect decisions within the organisations:
(i) Technological constraints:
Different organisations require different technology. Some organisations (like iron and steel manufacturing
units) require expensive technology which cannot be easily changed to meet the changing demands and to that extent,
have limited capacity to adapt to the external environment. Depending on the type of technology used for producing
goods in
1. Unit or small batches
2. Masses or large batches
3. Continuous process
elements of organisation (span of control, delegation, centralisation, decision-making etc.) have to be designed in
different ways.
(ii) Task constraints:
These constraints arise from the nature of work performed by employees. If employees perform simple,
methodical, repetitive tasks, management style is objective in nature, that is, based on policies, standards and rules. If
workers perform complex and non-repetitive tasks, management style is subjective in nature, that is, based on
judgment, intuition and innovativeness. Managers should know variation in tasks (more or less) while applying the
contingency theory.
(iii) Human constraints:
Competence of workers and factors that motivate them to work also affect the management style. If workers
are motivated only by economic rewards, their lower-order needs are strong. Managers usually adopt authoritative
style of leadership, vertical chain of communication and no involvement of employees in the decision-making process.
If higher-order needs of workers are strong, managers adopt participative style of leadership. Employees participate in
the decision-making process and communication is both vertical and horizontal. Keeping these constraints in mind,
contingency approach relates organisation’s internal environment with the external environment. It assesses the
impact of environmental factors on the organisation and vice versa and arrives at the best solution to the problem in
the prevailing situation.
Thus, 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.
d. Operational Theory:
“The operational approach to management theory and science draws together the pertinent knowledge of
management by relating it to the managerial job that managers do. It tries to integrate the concepts, principles, and
techniques that underlie the task of managing.”
Since managerial concepts apply at all levels of management in all kinds of organisations, business or non-
business, this theory manages different situations by taking the best from theories (classical, behavioural, systems,
quantitative etc.) in different schools of thought and unifies them into one theory. Rather than applying one approach,
it picks up the best and relevant aspects of different theories that can practically apply to a given situation.
Since management is a complex task that involves relationships amongst variables that affect internal and
external organisational environment, managerial knowledge must be an integration of pertinent knowledge from
different schools of management thought.
Operational theory is also regarded as the management process school of thought where management process
is considered as a set of management functions (planning, organising, actuating and controlling) which distinguish
managers from non-managers. The emphasis on these functions varies with the actual situation. Managers seek
knowledge of other theories with process framework as central management functions to be performed.
This theory has practical application today. “Since the activities of a manager are basic, the process school
provides an excellent framework not only for the study of management using this fundamental approach but also for
using valuable contributions offered by other schools of management. The goal is to take the best from what is available
in management thought and work it into a single theory.”