Theories/Principles of management:

Principle of management is the statement of fundamental truth, which guides manager to take
right decision in solving managerial problems in scientific and logical ways. They are developed
through the method of scientific experiments, observation of certain events faced by the
managers.

• Scientific management theory: Scientific mgmt. Theory is developed by

F.W Taylor. He is also known as “Father of Scientific Management”. This theory
believed that the work of increasing productivity efficiency can be accomplished by
developing the best way to work, emphasizing job specialization and standardization,
training, of right person for right job and maintaining good relationship between worker
and management.

Taylor derives this theory from various experiences, experiments, researches are translated to
eliminate problem such as inefficiency, and low production.

Principles of FW Taylor’s Scientific mgmt. theory

1. Science, not the Rule of Thumb - This rule focuses on increasing the efficiency of an
organization through scientific analysis of work and not with the ‘Rule of Thumb’
method. Taylor believed that even a small activity like loading paper sheets into boxcars
can be planned scientifically. This will save time and also human energy. This decision
should be based on scientific analysis and cause and effect relationships rather than ‘Rule
of Thumb’ where the decision is taken according to the manager’s personal judgement.

2. Harmony, not Discord -Taylor indicated and believed that the relationship between the
workers and management should be cordial and completely harmonious. Difference
between the two will never be beneficial to either side. Management and workers should
acknowledge and understand each other’s importance. Taylor also suggested the mental
revolution for both management and workers to achieve total harmony.

3. Cooperation not individualism-This technique involves a shift of attitude of management

and workers towards each other. Both should understand the value of each other and
work with full participation and cooperation. The aim of both should be to improve and
boost the profits of the organization. This demands a complete change in the outlook of
both the workers and management; both should have a sense of togetherness

4. Work-Study: Work-study means systematic and critical assessment of all the operational
functions in the organization. The main objective of the work-study is to improve
efficiency by making optimum utilization of resources.

 Method Study: It is a concern with finding ‘one best way’ of doing a job. The
main aim of this technique is to improve work methods to minimize the cost of
products and maximize the satisfaction of customers.
  Motion Study: This study refers to making a thorough analysis of various
motions being performed by a worker while he is doing a particular job. The main
purpose of motion study is to detect and eliminate unnecessary movement, and to
find out the best method of doing a particular job.
 Time Study: It is the technique that is used to determine the standard time taken
by a worker. It helps in determining how much work an employee should be able
to do in a given period.
 Fatigue Study: It refers to determining the amount and frequency of rest intervals
required in completing a work. Taylor suggested that a person gets tired when he
works continuously without a break. So, he must be provided with a rest interval
to regain his lost stamina.

5. . Development of Every Person to his Greatest Efficiency-The effectiveness of a

company also relies on the abilities and skills of its employees. Thus, implementing
training, learning best practices and technology, is the scientific approach to brush up the
employee skill. To assure that the training is given to the right employee, the right steps
should be taken at the time of selection and recruiting candidates based on a scientific
selection.

Contributions of scientific management

• The major contributions of scientific management theory to the field of management
include:

• It helps to increase production by using modern machines and tools, by planning and
controlling, and by optimum uses of resources.

• It seeks to minimize the cost of production, which increases the profit of the business
firm.

• Helps to increase work efficiency through proper consulting.

• Changes the attitudes of employees and employers toward the objectives of an

organization.

• This leads to greater economic prosperity and improves the living standards of people.

• Emphasize training and development of workers, which helps to increase output and
decrease material wastage and time.

Limitations of Scientific Management

Major limitations of scientific management are:

• It emphasizes too much on technical aspects of work by ignoring human interest.

• It only focuses on the employee’s primary needs in economic terms. It has not mentioned
the incentives besides the wages.
 • Employees are forced to work on the same task time and again leading to monotony.
Workers have no outside life.

• In the name of increasing efficiency workers are forced to speed up the process beyond
their capacity.

• Workers are not allowed to take initiative.

Administrative management Theory

Fayol's administrative management theory can be described as an approach to management and
increasing productivity by emphasizing organizational structure and human behavior.
Henry Fayol, also known as the “Father of Modern Management Theory.” The fourteen
principles of management created by Henri Fayol are explained below.

1. Division of Work: Division of Work means assigning the works of the org. to employees
based on their ability and efficiency. Henry believed that the division of work improves the
productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both
the managerial as well as a technical work level.

2. Authority and Responsibility: This principle states that there should be a balance between
authority and responsibility. If there is more authority than responsibility, the employees will get
frustrated. If there is more responsibility than authority, the manager will feel frustrated.

3.Discipline: This principle states that discipline is required for any organization to run
effectively. In order to have disciplined employees, managers need to build a culture of mutual
respect. There should be a set of organizational rules, regulation, and structures in place that
should be met by everyone.

4. Unity of Command: This principle states that it should be a clear chain of command in the
organization. The employees should be clear on whose instructions to follow. According to
Fayol, an employee should receive orders from only one manager. If an employee works under
two or more managers, then authority, discipline, and stability are threatened. Moreover, this will
cause a breakdown in management structure and cause employees to burn out.

5. Unity of Direction: This means all the people working in a company should have one goal and
motive which will make the work easier and achieve the set goal easily.

6. Subordination of Individual Interest: This indicates a company should work unitedly towards
the interest of a company rather than personal interest. Be subordinate to the purposes of an
organization. This refers to the whole chain of command in a company.

7. Remuneration: This plays an important role in motivating the workers of a company.

Remuneration can be monetary or non-monetary. Ideally, it should be according to an
individual’s efforts they have put for.

8. Centralization: Fayol suggests that the manager has to give enough authority to employees to
carry out their assigned task by keeping ultimate responsibility himself.
9. Scalar Chain: Employees should know where they stand in the organization's hierarchy and
who to speak to within a chain of command. Fayol suggested the now-familiar organization chart
as a way for employees to see this structure clearly.

10. Order: A company should maintain a well-defined work order to have a favorable work
culture. The positive atmosphere in the workplace will boost more positive productivity.

11. Equity: Managers should be fair to all employees through a "combination of kindliness and
justice." Only then will the team "carry out its duties with... devotion and loyalty."

12. Stability: An employee delivers the best if they feel secure in their job. It is the duty of the
management to offer job security to their employees.

13. Initiative: “Initiative is one of the keenest satisfactions for an intelligent “.According to this
principle the manager should give his subordinates complete freedom to take initiative for
planning and implementation within their scope of authority and discipline.

14. Esprit de Corps: It is the responsibility of the management to motivate their employees and
be supportive of each other regularly. Developing trust and mutual understanding will lead to a
positive outcome and work environment.

Contributions of Administrative management Theory

 This theory proposes five management functions as the terms of planning, organizing,
directing, coordinating and controlling.
 Fayol divi.ded the range of activities undertaken within an industrial undertaking into six
types: -technical, commercial, financial, security, accounting, managerial activities.

 This theory provides fourteen universally applicable principles of management.

 This theory also advocates various skills and knowledge in manager to operate
organization like physical, mental, moral, educational, technical and work related.

Limitations of Administrative Management theory

 This theory does not give much attention to the problems of the workers

 These principles cannot be applied universally in all situation.

 Worker are treated as machine rather than human .

 This theory has limited application for complex and dynamic business environment.

The Bureaucratic theory of management:

 The Max Weber theory of bureaucracy is a part of classical management theory.
This Weber’s bureaucracy is an improved version of the traditional structures of an
organization. In bureaucratic management, all members of the organization are treated
equally and division of labor is clearly defined.
Principles of Bureaucracy
There are specific features of Max Weber’s bureaucracy, which are also known as Max Weber’s
six principles of bureaucracy.
1. Hierarchical structure: In bureaucratic organizational structures, there are many hierarchical
positions. Managers are organized into hierarchical layers, where each layer of management is
responsible for its staff and overall performance.
2. Functional Specialty: The basic principles is that employees are selected on the basis of technical
skills and competences, which have been acquired through training, education and experience.
Work must be done by specialists.
3. Formal selection: Employees of a bureaucratic organization are selected on the basis of their
expertise. This helps in the deployment of the right people in the right positions and thereby
optimally utilizing human resources.
4. Clearly defined rules and regulations: Formal rules and regulation are required to ensure
uniformity, so that employees know exactly what is expected of them. As well as top level
management decision should be made under clearly define rule.
5. Purposely Impersonal: The idea is to put employees and customers on the same level, eliminate
bias, ignore persuasion and personal difference. Bureaucratic organizations treat all employees
equally. They also treat all customers equally and do not allow individual differences to influence
them.
6. Career Orientation: The principle of Career Orientation in ideal bureaucracy is that every employee
has a unique set of skills. It’s the employer’s responsibility to match their employees with the jobs that
best suit them. This principle thus states that organization should ensure for personal growth working of
employee in the organization.
Contribution of Bureaucratic theory
 This model is useful to manage organization like government, army multinational
organization.
 Decision can be made rationally based on clear rules and regulation
 The rules and regulations are well defined and employee duties and privileges are
indicated
 The high level of Division of Labor and Specialization
Limitations of Bureaucratic theory

 The high level of Division of Labor and Specialization.

 The professional skills of the personnel for promotion and transfers are given too much
significance. The dedication and commitment of the worker are not considered.
 It emphasizes efficiency at the cost of human needs means this theory does not prioritize
on human sentiments and relations.
Human relation and Behavior science theory of management:
 Robert Owen, Elton Mayo, Chester Bernard, and Mary Parker Follet are the main contributors to this
human relations and behavioral science management theory. According to them, management should give
greater emphasis on human and social factors along with specialization in job design.

1. Human Relations Theories: Elton Mayo and Fritz Roethlisberger of the Harvard Business School were
invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago. The
experiment was during 1922-1932. The Hawthorne Experiment brought out that the productivity of the
employees is not the function of only physical conditions of work and money wages paid to
them. Productivity of employees depends heavily upon the satisfaction of the employees in their work
situation. The human relations theory of management is based on the following studies.
1. Illumination Experiment: The Illumination Experiment was one of the initial studies conducted
during the Hawthorne Study. It aimed to investigate the impact of lighting levels on worker
productivity. Researchers altered the intensity of lighting in the work environment and observed
its effects on employee performance. Surprisingly, they found that regardless of whether the
lighting was increased or decreased, worker productivity improved. This unexpected result led
them to realize that the workers’ perception of being observed and valued played a more
significant role in productivity than the actual lighting conditions.
2. Relay Assembly Test Room Experiment: In this experiment, a group of female workers was
isolated in a separate test room, away from the regular factory floor. The researchers introduced
changes to their working conditions, such as rest periods and piece-rate wages. Interestingly, the
productivity of the workers improved regardless of the changes made. This outcome led the
researchers to understand that the workers’ sense of being part of a special group and receiving
attention contributed to increased motivation and performance.
3. Mass Interviewing Program: The Mass Interviewing Program involved conducting interviews
with a large number of employees to gather their opinions and feedback about their work
environment. The researchers aimed to understand the workers’ attitudes and perceptions toward
their jobs. The interviews revealed that the workers valued social interactions, job satisfaction,
and a sense of belonging in their workplace. This finding further emphasized the significance of
social factors in influencing employee motivation and productivity.
4. Bank Wiring Observation Room Experiment: In this experiment, a group of male workers in a
bank wiring room was observed and studied. The researchers noted the effects of different
payment schemes and incentives on their performance. They found that the workers developed
their informal social norms, like group cooperation and peer pressure, which significantly
influenced their work output. This study highlighted the importance of group dynamics and social
interactions in shaping individual behavior and performance.
 The following were the main conclusions drawn by Prof. Mayo by Hawthorne studies:
1. Social Unit: A factory is not only a techno-economic unit but also a social unit. Men are social
beings. This social characteristic at work plays a major role in motivating people. The output
increased in Relay Room due to the effective functioning of a social group with a warm relationship
with its supervisor
2. Group Influence: The workers in a group develop a common psychological bond uniting them as
the panel in the form of informal organization. Their behavior is influenced by these groups. The
pressure of a group, rather than management demands, frequently has the strongest influence on how
productive workers would be.
3. Group Behavior: Management must understand that a typical group behaviour can dominate or
even substitute individual behavior.
4. Motivation: Human and social motivation can play even a greater role than little monitory
incentives in moving or motivating and managing employee group.
5. Supervision: The style of control affects worker's attitude to work and his productivity.
A supervisor who is friendly with his employees and takes an interest in their social problems can get
co-operation and better results from the subordinates.
6. Working Conditions: Productivity increases as a result of improved working conditions in the
organization.
7. Employee Morale: Mayo pointed out that workers were not simply cogs, in the machinery. Instead,
the employee morale (both individual and in groups) can have profound effects on productivity.
8. Communication: Experiments have shown that the output increases when workers have explained
the logic behind various decisions and their participation in decision-making brings better results.
9. Balanced Approach: The problems of employees could not be solved by taking one factor, i.e.
management could not achieve the results by emphasizing one aspect. All the things should be
discussed, and a decision is made for improving the whole situation. A balanced approach to the
whole situation can show better results

2.Behavioral Science Perspectives:

There are many perspectives which deal with behavioral aspects to workers and their
productivity. Behavioral science theories of management include Maslow’s hierarchy of needs, two-
factor theory, Theory X & Theory Y, Theory Z, and theory of participative management.
1. Maslow’s Hierarchy of Needs
Maslow’s Hierarchy of Needs is a motivational theory proposed by Abraham Maslow, categorizing
human needs into five levels: physiological, safety, love and belonging, esteem, and self-actualization.
According to the theory, lower-level needs must be fulfilled before higher-level needs become relevant.
For instance, meeting basic physiological needs like food and shelter takes priority over self-actualization
goals.
2. Two Factory Theory
The two-factor theory, also called Herzberg’s motivation-hygiene theory, explains job satisfaction and
dissatisfaction in the workplace. It involves two sets of factors: motivation factors (e.g., recognition,
achievement) leading to satisfaction, and hygiene factors (e.g., salary, working conditions) preventing
dissatisfaction.Addressing hygiene factors prevents unhappiness, while motivation factors inspire
employees. Both factors operate independently. Managers should focus on intrinsic motivators and meet
employees’ basic needs to create a fulfilling work environment. This theory emphasizes job enrichment,
empowerment, and improved organizational performance.
3. Theory Z
Theory Z is a management approach blending American and Japanese philosophies, focusing on job
security, consensual decision-making, and individual responsibility within a cohesive group. It
emphasizes teamwork, employee well-being, and informal control with formal assessments. Theory Z
fosters loyalty, job satisfaction, and productivity while encouraging employees to be generalists with
specialized career responsibilities.
4. Theory X and Theory Y
Theory X and Theory Y are management theories developed by Douglas McGregor. Theory X is based
on the assumptions that employees don't really want to work, lack ambition, only work to collect a
paycheck, and need constant supervision. Theory Y is based on the assumptions that employees want to
work, want to take responsibility, and do not need much supervision.
Contribution of human Relation and Behavioral Science Perspectives
• To create a positive work environment, managers should care about their employee’s well-being
and happiness.
• Being open and listening to employees’ ideas and concerns fosters a cooperative and productive
atmosphere.
• Understanding what motivates employees can boost job satisfaction.
• Employees working together often produce better results.
• Giving employees autonomy and involving them in decision-making increases their sense of
ownership and commitment to their work.
• When employees feel valued and supported, their morale increases, resulting in higher
productivity and better overall performance.
Limitation of human Relation and Behavioral Science Perspectives

The Decision Theory:

Herbert Simon, Luther Gulik, and Lyndall Urwick have been the major contributor to this management
thought. This theory focuses on managerial decisions. Decisions are made through rational choice among
different alternatives available. It is a choice-making activity and choice determines our activity.
Herbert Simon’s (One of the major contributors of decision theory) model is based on two concepts

a. Bounded rationality: rational decision making is constrained by the limitation of knowledge,

resource, etc.
b. Satisficing: Maximization is not possible in decision making. The decision makes should
“satisfice” and achieve the satisfactory outcome administrative man always satisfice.

This theory advocates that decision making should be rational. The rational approach to decision making
should involve the following steps:

a. Define the problems

b. Identify relevant alternatives
c. Evaluate the alternatives.
d. Select the best course of action
e. Implement the action
f. Evaluate the result of the action

Contribution and Limitation of Decision Theory:

Contribution:

1. In the field of management the decision theory provides guidelines for the manager to make a
decision and solve problems.
2. This theory provides the “science” of improved organizational decision making through
quantitative methods.
3. The theory makes the path for studying the process by which administrative organization makes
decisions.

Limitations:

1. It does not take a total view of management. Its scope is limited.

2. Sometimes it is difficult to claim whether a decision finalizes the action or commence the action.

Management Science Theory,

Management Science Theory, also known as the Quantitative Approach, is a problem-solving approach
that uses mathematical and statistical methods to tackle complex business challenges. It’s like having a
toolbox filled with mathematical tools to fix intricate problems in an organization. Management Science
Theory is all about crunching numbers and analyzing data. The theory employs various techniques such
as linear programming, queuing theory, game theory, and more, to optimize processes and decision-
making.
With the help of computers and advanced communication tools, the impact of Management Science
Theory on businesses has grown significantly.

Contributions of management Science theory

• This theory leads to more informed and optimized decision-making, like finding the most
efficient route to reach a destination.
• Management Science Theory aids in resource allocation, ensuring resources like manpower,
inventory, and finances are used optimally.
• Management Science Theory provides a proactive approach to problem-solving. Businesses can
anticipate and address potential issues using predictive analysis and optimization techniques, like
fixing a machine before it breaks down.
Limitation of management Science theory
• The theory often relies on unrealistic assumptions and simplifications to create mathematical
models.
• Approach tends to prioritize quantitative methods over other qualitative aspects. This may lead to
overlooking critical human and social factors, like employee motivation and organizational
culture.
• Management Science Theory is most effective in well-structured and repetitive environments. It
may not be suitable for dealing with uncertain and dynamic situations, where factors are
constantly changing.