Week 02: Lecture Notes

EVOLUTION OF MANAGEMENT
THOUGHT

Modern Management
School
1920-1950 System Approach
Neo-Classical Contingency approach
Management
1830-1930 School
Classical Human relations
management Behavioural
school
Scientific
Administrative
Bureaucratic
 2

THE CLASSICAL APPROACH

• Management is a process consisting of interrelated functions performed to
achieve the desired goals.
• Principles or guidelines can be derived from the experience of managers in
different organisations.
• These principles are basic truths that can be applied in different organisations
to improve managerial efficiency
• Managers can be developed through formal education and training.
• People are motivated mainly by the incentives and penalties. Therefore
managers use and control economic rewards.
• There should be no conflict between individuals and the organisation. In case
of conflict interest of organisation should prevail.
 3

USES OF CLASSICAL APPROACH

The classical approach offers a convenient framework for the
education and training of managers:

❖It focuses attention on what managers actually do.

❖It highlights the universal nature of management.
❖It provides the scientific basis for management practice. It also
provides a starting point for researchers to verify the validity and
improve the applicability of management knowledge.
 4

LIMITATIONS
❖ It offers a mechanistic framework that undermines the role of the
human factor
❖ The environmental dynamics and their effect on management
have been discounted.
❖ There is a positive danger in relying too much on past experience
because a principle or technique found effective in the past may
not fit in the future.
❖ It is based on over-simplified assumptions, and its principles are
ambiguous and contradictory.
 BUREAUCRACY – MAX WEBER
Division of
Work

Impersonal Rules and

Relations Regulations
Max Weber (1864-1920)

• A German social scientist, who analyzed the formation

and administration of public bureaucracies. Bureaucracy
• One of the oldest form of organisation
• Bureaucracy is a body of non-elected governing officials
or an administrative policy-making group. Record- Hierarchy of
keeping Authority

Technical
Competence
 6

ADVANTAGES OF BUREAUCRACY
• Specialization: Members are assigned a specialized task to perform

• Structure: Specifying the duties and responsibilities and reporting

relationships in a command hierarchy

• Rationality: A measure of objectivity is ensured by prescribing in advance the

criteria for decision making in routine situations.

• Predictability: Conformity to rules and roles in the structural framework bring

about order to cope with complexity.

• Democracy: Emphasis on qualification and technical competence; Officials

are guided by the prescribed rules, policies, and practices rather than by
patronage or other privilege treatment
 7

LIMITATIONS OF BUREAUCRACY
• Rigidity: Rules and regulations are often rigid and inflexible which encourages status quo and
resistance to change

• Goal displacement: Rules framed to achieve organizational objectives at each level become an
end in themselves. When individuals pursuing personal objective , overall objective of the
organization is neglected.
• Impersonality: Bureaucratic Organization stresses a mechanical way of doing things. Contractual
obligations are given primacy over human relations.

• Compartmentalization of activities: Jobs are divided into watertight categories which restrict
people from performing tasks that are capable of performing.

• Red tape refers to regulations or conformity to formal rules or standards claimed to be excessive,
rigid, or redundant, or to bureaucracy claimed to hinder or prevent action or decision-making.
Week 02: Lecture Notes

SCIENTIFIC MANAGEMENT – F.W. TAYLOR

➢ Fredrick Winslow Taylor (1856-1915), also known as the ‘Father
of scientific management’, proved with his practical theories that
a scientific method can be implemented in management.
➢ Taylor was an engineer and management scientist in USA. He
was sad to see the haphazard and wasteful ways of doing job.
➢ Taylor gave much concentration on the supervisory level of
management and performance of managers and workers at an
operational level.
➢ According to F.W. Taylor, “ Scientific management is the art of
knowing exactly what you want men to do and seeing that they
do it in the best and cheapest way”.
 2

PRINCIPLES OF SCIENTIFIC MANAGEMENT

Science, not rule of

thumb

Harmony not discord

Cooperation not
Individualism

Mental Revolution

Development of each
Individual to his greatest
efficiency
TECHNIQUES OF SCIENTIFIC MANAGEMENT
3

Time Study

Motion Study

Scientific Task Planning

Standardisation and Simplification

Differential Piece Rate System

Functional Foremanship
 4

FUNCTIONAL FOREMANSHIP

Functional Foremanship: According to Taylor, one supervisor cannot be an expert in all

aspects of work supervision. He suggested the system of functional foremanship in which
eight supervisors supervise a worker's job. Four of them are concerned with the planning
of work in the factory office and the other four are involved in the execution of work at the
shop floor.
 FUNCTIONAL FOREMANSHIP DUTIES 5

1. Route Clerk: The route clerk lays down the sequence of operations to be followed for the
completion of a particular job. He decides the exact route through which every piece of work should
travel from machine to machine.
2. Instruction Card Clerk: To prepare detailed instructions according to which workers have to
perform their jobs. These instructions relate to matters like the speed of work, tools, and fixtures to
be used, technical specifications of work, etc.
3. Time and Cost Clerk: It frames the timetable for doing various jobs and maintains the records of
the cost of work.
4. Shop Disciplinarian: To enforce rules and regulations and maintain discipline among workers. He
deals with cases of unauthorized absence from duty, insubordination, violation of established rules
and regulations, etc.
5. Gang Boss: Concerned with all preliminary work before the actual operation. He has to assemble
the necessary tools and equipment and also arrange the facilities in the plant.
6. Speed Boss: To get the work completed in the specified time, he should see that the workers
operate at the right speed and follow the specifications laid down in advance.
7. Repair Boss: His job is to ensure that each worker keeps his machine clean and free from rust and
that he oils and treats the machine properly.
8. Inspector: It is the responsibility of the inspector to see that the work is performed following the
quality standards laid down by the office.
CRITICAL EVALUATION

Mechanistic
Approach

Unrealistic
Assumptions

Exploitation of
Labour
Week 02: Lecture Notes

ADMINISTRATIVE THEORY- HENRI FAYOL

1

One of the first and foremost contributors to administrative management theory was
Henri Fayol (1841-1925), a French industrialist. Fayol started his career as a mining
engineer and later became a chief executive. He published his famous book
Administrative Industrielle et Generale in 1916. It was published in English under the
title General and Industrial Management in 1949. Fayol's theory may be analysed
under the following heads:
Classification of Activities Fayol classified all business activities into six
categories:
(1)Technical (manufacturing or production of products)
(2)Commercial (buying, selling, and exchange)
(3)Financial (search for and optimum use of capital)
(4)Accounting (recording including statistics)
(5)Security (protection of persons and property)
(6)Managerial.
 2

FAYOL GAVE THE FOLLOWING GENERAL PRINCIPLES OF MANAGEMENT

Source: Administrative Industrielle et Generale by Henri Fayol (1916)

 3

SCALAR CHAIN & GANG-PLANK

Scalar Chain: Scalar chain refers to the
chain of superiors ranging from the
ultimate authority to the lowest level in
the organization. It should be short-
circuited and not carried to the extent it
proves detrimental to the organization.
To prevent the scalar chain bogging
down action. Fayol gave the concept of
‘gang-plank’.
 COMPARISON BETWEEN TAYLOR AND FAYOL
4

BASIS OF COMPARISON TAYLOR FAYOL

• Shop floor level analysis of • Top management analysis
1. Perspective
workers, activities of managers’ activities.
• Improving productivity • Improving overall
2. Focus through work administration through
simplification and general principles
standardization
3. Personality • Scientist • Practitioner
4. Results • Scientific observation and • Universal truths developed
measurement from personal experiences
5. Major contribution • Science of industrial • A systematic theory of
management management
• Micro-aspect management • Macro aspect management
6. Aspect studied of jobs of total organization
NEO-CLASSICAL OR BEHAVIORAL APPROACH 5

❖The classical management approach failed to recognize

people's overwhelming role in management.
❖Workers resist the formal and impersonal treatment,
overlooking their social and psychological needs
❖The resistance and the need to secure the willing
cooperation of workers led to the development of a neo-
classical approach.
❖The neo-classical approach may be analyzed in three parts,
namely: Human Behavioural
Hawthorne
Relations Science
Experiments
Movements Thinking
 HAWTHORNE EXPERIMENTS 6

George Elton Mayo (1880-1949) is the father of neo-classical approach. He

was the leader of the team which conducted the famous Hawthorne
Experiments. These were conducted during 1924-32 at a plant of the Western
Electric Company, Hawthorne, Chicago in USA.

Hawthorne experiments consists of 4 parts:

Relay
Illumination Assembly
Experiments Test Room
Study

Mass Bank Wiring

Interview Observation
Program Room Study
 CONCLUSION OF EXPERIMENTS 7

❖A workgroup is not merely a techno-economic unit. It is also a

social system with a culture of its own.
❖Workers are not merely rational economic beings motivated
simply by money.
❖Social and psychological factors exercise greater influence on
employee behavior than physical conditions.
❖Workers act or react not as individuals but as member of group.
The informal group has its own norms and beliefs
❖Complaints and criticism of employees are manifestations of
deeper satisfaction.
 8

HAWTHORNE EXPERIMENTS CRITICISM

Pro-management Bias
Clinical Bias
Unscientific
Doubtful Validity
True but Irrelevant
Too Obvious
No mention of trade unions
Week 02: Lecture Notes 1

HUMAN RELATION APPROACH

• Hawthorne experiments laid the foundations for human relations
movement in management. It is a socio-psychological approach to
management.
• According to Keith Davis, human relations is an area of management
practice concerned with integrating people into a work situation in a way
that motivates them to work together productively, cooperatively, and with
satisfaction and achieve organizational goals.
• Workers cannot be motivated by economic rewards alone; they require
social satisfaction at the workplace
• Employee counseling, participative decision making, cordial supervision,
job enrichment and other techniques have been suggested for keeping
workers happy and satisfied.
ELEMENTS OF HUMAN RELATIONS APPROACH 2

The The Work The Work

The Leader
Individual Group Environment
 3
COMPARISON

HUMAN RELATIONS SCIENTIFIC MANAGEMENT

• 1. No universal principles • 1. Principles for universal

• 2. Focus on people application
• 3. No one best way • 2. Focus on machines
• 4. Man is a social animal • 3. One best way of doing things
• 5. Group dynamics, • 4. Man is an economic animal
motivation, job satisfaction • 5. Time and motion studies,
• 6. Application of knowledge functional foremanship, and wage
derived from behavioural incentives
sciences • 6. Application of knowledge of
• 7. Improvements in inter- physical sciences
personal relations • 7. Improvements in productivity,
and efficiency
CONTRIBUTIONS OF HUMAN RELATIONS APPROACH

❖Human relations school has a moral justification. Employees are

human beings and they are entitled to be treated with respect
and dignity.
❖The human relations approach helps to satisfy the social and
psychological needs of employees.
❖Human relations school highlights the 'peopleside' of
organizations. It, therefore, avoids the imbalance caused by
over-emphasis on technical and administrative aspects.
❖Human relations school focuses attention on inter-personal
relations and dynamics of work groups.
❖It revolutionized management training by stressing people
management skills and managerial styles.
HUMAN RELATIONS APPROACH 5

CRITICISM

Unscientific

Anti-individualistic

Over-concern with
happiness

Negative view of
conflict
 BEHAVIOURAL SCIENCE APPROACH 6

❖ The human relations movement focused on interpersonal relations and

overlooked the wider subject of organizational behaviour. Organizational
behaviour involves the study of attitudes, behaviour and performance of
individuals and groups in organizational setting.

❖ Behavioural approach includes the issue of organizational behaviour. It is

also known as the human resource approach because it stresses the
development of human beings for the benefit of both the individual and the
organization.
❖ Knowledge is drawn from behavioral sciences i.e. psychology, sociology,
anthropology, etc., and it is applied to understand, explain and predict
behavior. Therefore it is a Behavioral Science Approach.
❖ Several sociologist and psychologists Abraham H. Maslow, Douglas
McGregor, Fedrick Herzberg, Rensis Likert, Keith Davis, and others have
significantly contributed to the development of this approach.
PROPOSITION OF BEHAVIORAL SCIENCE APPROACH 7

• An organization is a socio-technical system

• Individual differ in terms of their attitudes, perceptions, and
value system.
• People working in an organization have their needs and goals,
which may differ from organization's needs and goals
• People’s behavior as individual may be different from their
behavior as members of a group.
• Persons working together in an organization form their own
informal groups. Such groups have their own norms, culture and
communication system
• Informal groups exercise a significant influence on the attitude,
behavior and performance of the employees
 COMPARISON BETWEEN HUMAN RELATIONS AND BEHAVIOURAL 8
APPROACH

POINT OF COMPARISON HUMAN RELATIONS BEHAVIOURAL APPROACH

1. Focus 1. Focus on the individual, his 1. Focus on groups and group
needs and behaviour, behaviour, highlight group
Highlights interpersonal relationships.
relationships. 2. Based on movement
2. Based on Hawthorne human relations
2. Basis Experiments 3. Group dynamics, informal
3. Key Concepts 3. Motivation, morale, and job organization, and
satisfaction motivation through job
4. View of Conflict 4. Conflict in organizations is enrichment.
always destructive and can 4. Conflicts is not only
and should always be inevitable but may even be
minimized beneficial, cannot always be
5. Scope
5. Narrow resolved.
5. Wide
Week 02: Lecture Notes

SYSTEMS APPROACH
❖ Since 1950, researcher began to look at
organizations from a system view point. In
Environment
1951, Wiener’s pioneering work on cybernetics
developed concepts of system control by
information feedback.
❖ Later, Ludwig Von and Kenneth Boulding Transformation
Input Output
Process
evolved the General System Theory , which
consist of general principles for understanding
the physical, mechanical, biological and social
entities and their interrelationship.
Feedback
❖ A systems approach to management is a
framework that views an organization as a
complex system comprised of interconnected Figure: System View of Organization
and interdependent parts.
 FEATURES OF THE SYSTEMS APPROACH 2

❖ An organization is a unified and purposeful system consisting of several interconnected,

interdependent, interactive parts.
❖ The parts or components of a system are called sub-systems. Each sub-system influences
the other sub-systems and the system as a whole.
❖ The position and function of each sub-system can be analyzed and understood only about
the other subsystems and the organization as a whole.
❖ Each sub-system derives strength from its association and interaction with the other sub-
systems. As a result, the collective contribution of the organization is greater than the
aggregate of individual contributions of its sub-systems. This is known as synergy.
❖ Every system has a boundary that separates it from its environment. The boundary
determines which parts are internal to the organization and which are external.
❖ Systems are of two types. An open system continually interacts with its environment (the
forces lying outside it) whereas a closed system is self-contained and isolated from the
environment.
❖ The reaction or response of the environment to the outputs is known as feedback.
Feedback is useful in evaluating and improving the functioning of the system.
 CONTRIBUTION OF SYSTEM APPROACH
3

➢ The systems approach examines inter-relationship and inter-dependencies

between different parts of an organization.

➢ The systems approach calls attention to the dynamic and adaptive nature of
organizations.

➢ The systems approach represents a balanced thinking on organization and

management. It indicates managers to avoid analyzing problems in isolation

➢ The systems approach stresses the dynamic and multidimensional nature of

organizations.
LIMITATIONS OF SYSTEMS
4

APPROACH

Lack of Unified Theory

Vague and Abstract- precise

relationship in sub-system

Narrow View of Organization

Environment Interface

Limited Application
 CONTINGENCY APPROACH

❖ The contingency approach is a relatively new approach to organization and

management and it is related to system approach.
❖ The belief that organizations are open systems widened the perspective further,
leading to the development of the contingency approach. It is also known as the
situational approach.
❖ It was developed by managers, consultants, and researchers who tried to apply the
concepts of earlier approaches to real-life situations.
❖ They found that the concepts and techniques effective in one situation failed to
work in another situation
❖ The contingency approach is based on the belief that there is no one best way to
tackle the management problem.
❖ The application of management principles and practices is contingent upon the
environment.
❖ It rejects the universality of management concepts.
 FEATURES OF THE
CONTINGENCY APPROACH
❖ Management is completely contingent on the specific circumstances.
The implementation and efficiency of every technique are dependent
on the specific circumstances.

❖ Management should align its strategy with the specific requirements

of the circumstance. To achieve effectiveness, management policies
and procedures must be responsive to changes in the environment.

❖ Given that the success of management relies on its capacity to adapt

to its surroundings, management must enhance its diagnostic abilities
to foresee and understand the changes in the environment.

❖ Managers should recognize that there is no universally optimal

approach to management. Management principles and procedures
mustn't be regarded as universally applicable.
 PRACTICAL UTILITY OF
CONTINGENCY APPROACH
❖ The contingency approach provides a clear view of the realities of the
managerial job.

❖ It expands managers' knowledge of management theory by introducing

them to various concepts, principles, and approaches.

❖ The contingency method does not imply that previous approaches'

empirical findings aren't valuable. Instead, it attempts to include them
and makes them dependent on the requirements of the given
circumstances.

❖ The approach accepts that organizations and their environment are too
dynamic to be always effectively managed in the same manner.

❖ The contingency approach acknowledges that the field of management

theory has not progressed to the extent that a definitive prescription for
the most effective approach to managing every situation is available.
CRITICISM OF CONTINGENCY APPROACH

❖ It adds confusion to the practice of management by

stressing that, it all depends on the situation.
❖ Some critics argue that the approach does not
incorporate all aspects of the systems theory. The
approach is very complex and suffers from paucity of
literature.
❖ There is nothing new in contingency theory because
even classical theorists like Fayol cautioned
managers to use principles in the light of changing
conditions.
❖ The contingency approach does not recognize the
influence of management concepts and practices on
the environment.
 COMPARISON

Systems Approach Contingency Approach

1. An organization is a goal-oriented, organic 1. Organizations and their environment are

type system consisting of interdependent and complex. The applicability and effectiveness
interacting subsystems. of any principle or technique is dependent
specific situations.

2. Provides a global theoretical model for 2.Provides operational tools and techniques
understanding organizations. for analyzing and solving problems

3. Treats all organizations alike irrespective of 3. Treats each organization and each situation
their size, culture and dynamics. unique entity of its own.

4. Suggests deterministic solutions of 4. Suggests a probable and flexible approach

problem to problems.

5. Main focus on the internal environment. 8. Main focus on the external environment of
organizations.