DEVELOPMENT OF

MANAGEMENT THOUGHTS
STAGES IN MANAGEMENT THOUGHT
I. The Classical Theory of Management
1. Bureaucratic Model
2. Scientific Management
3. Process Management
II. The Neo-Classical Theory
1. Human Relations Movement
2. Behavioural Sciences Movement
III. The Modern Management Theories
1. Quantitative Approach
2. Systems Approach
3. Contingency Approach
 This approach
The Classical Approach ( traditionally accepted views) :
emphasizes organizational efficiency to increase organizational
success. It believes in functional relationship, following of certain
principles based on experience, a bureaucratic structure and
reward-punishment nexus.
 The neo-classical approach: It emphasizes human relations, individual as

well as group relationships, and social aspects. This approach was

pioneered by Mayo and his associates. This was further extended
to behavioural sciences approach pioneered by Maslow, Chris
Argyris, Douglas McGregor and Rensis Likert.
 Modern management thought: It combines concepts of the classical

school with social and natural sciences. It basically emerged from

systems analysis.

VARIOUS APPROACHES OF MANAGEMENT

Environmental Factors Influencing
Management Thought

Influences on
Management
Thought
Economic Political

Social Global

Technological
1. Economic Influences
◦ Relate to the availability, production, and distribution of resources
within a society.
2. Social Influences
◦ Relate to the aspects of a culture that influence interpersonal
relationships.
3. Political Influences
◦ Relate to the impact of political institutions on individuals and
organizations.
4. Technological Influences
◦ Relate to the advances and refinements in any of the devices that are
used in conjunction with conducting business.
5. Global Influences
◦ Relate to the pressures to improve quality, productivity, and costs as
organizations attempt to compete in the worldwide marketplace.
 I. The Classical THEORY OF
MANAGEMENT
CONTRIBUTOR PIONEERING
Robert Owen(1771-1858) He is called as the father of ‘Modern
Personnel Management’. He advocated the
necessity of concern for the welfare of
workers.

Charles Babbage(1792-1871) As an inventor and a management scientist,

he built the practical mechanical calculator,
which is considered to be the basis of the
modern computer.

Andrew Ure and Charles Duplin(1778-1857) They emphasizes the necessity of

management education, which further
paved the way to professionalize
management functions.
James Watt Jr. & Mathew Boulton (1796- Both of them were the sons of a
1848) distinguished inventor of steam engine.
They were managing solo Engineering
Foundary in Britain & developed a no. of
A German Sociologist, was a teacher at Berlin University. He was the
Chief exponent of the Bureaucratic Model.
Characteristics of Weber’s ideal Bureaucracy:
Work specification and division of labor
Abstract rules and regulations:
Impersonal relations of managers:
Hierarchy of organization structure
1. Max Weber (1864-1920) bureaucratic
model
 2. F.W. Taylor’s Scientific
management
He is called as the ‘Father of Scientific Management’ (1878).
He started his experiment with the concept of scientific
management at Midvale Steel Co.
He saw that the employees were deliberately working at a
pace slower than one capabilities.
He found three reasons behind it:
a)Fear of losing their jobs if they increase their output
b)Faulty wage systems
c)Outdated methods of working.

Two major managerial practices:

Piece-rate incentive system
Time-and-motion study
Principles of scientific management Elements of scientific management

Replacement of Rule of Thumb Work Study

Co-operation Standardisation of Tools and
Development of Workers Equipment
Maximum Output Scientific Selection, Placement and
Training
Distribution of Work
Introduction of Functional
Foremanship
Introducing Costing System
Mental Revolution
3. Henry Fayol’s administrative management
 He started his career as a junior engineer in a coal mine company in France and
became its General Manager in 1980.
(1841-1925)
 His contribution may be classified under three categories: classification of
business activities, functions of management, principles of management.
 It focused on principles that could be used by managers to coordinate the
internal activities of organizations.
1. Division
of labour: Division of work leads to specialisation resulting in
higher output. This principle recommends grouping of people as per their
area of specialization. If people are specialized at their work, they can
perform their task better.

2. Authority: Managers must have the authority to issue orders and

instructions to the subordinates. Yet , formal authority alone may not
help to compel obedience from subordinates; managers must have the
expertise to exert personal authority.

3. Discipline:
Discipline means respect for rules and agreements. People
working in an organization need to comply with rules and agreements
that govern the organization. Without discipline results cannot be
achieved.

14 Principles of management
4. Unity of command: There should be one boss for one subordinate. Conflict
will arise when one receives order and instructions from multiple managers.

5. Unity of direction: All operations in an organization need to be directed

towards one objective. Without this achievement of goal cannot be ensured.

6. Subordination of individual interest to general interest: If there is a

conflict between the individual goals and organizational goals, preference should
be given to organizational goals, i.e., individual goals should not supersede the
goals of the organization.

7. Remuneration: There should be a fair system of remuneration that ensures

equal pay for equal work. It should be fair to both employees and employers.

8. Centralisation: It refers to declining role of subordinates in the decision

making. Though major decisions are taken by the managers at the top level, but
at the same time enough authority should be given to the subordinates to do the
jobs properly.
9. Scalar Chain (Hierarchy): This the line of authority running from top level to
lower level of management. It is also known as hierarchy of authority. It illustrated
in the form of an organizational chart clearly showing the structure of authority from
the top management to employees down the line.

10. Order: People and material should be in the right place at the right time. Fayol
followed the concept of ‘ A place for everything and everything in its place ‘. When
human beings are kept at the right place( right man at the right place) it is social
order, and when non-human or material resources are kept at the right place, it is
material order.

11. Equity: Managers should be fair to their subordinates.

12. Stability of staff: Employee turnover should be less to ensure efficiency of an
organization.
13. Initiative: Subordinates should have the freedom to conceive new ideas and do
their task, even though they commit mistakes.
14. Esprit de corps: ‘ Unity is strength’. People should work as a team to enjoy the
benefits of synergy.
 ii. Neo-classical theory
1. Human Relations Movement

A. ELTON MAYO: He is recognized as the father of human relations

approach. Mayo and his associates conducted their study at Western
Electric's Hawthorne Plant between 1927-1932, to evaluate the attitude
and psychological reaction of workers in on-the-job situation.
Hawthorne effect — workers’ attitudes toward their managers affect
the level of workers’ performance.
Demonstrated the importance of understanding how the feelings, thoughts,
and behavior of work-group members and managers affect performance.
2. Behavioural Sciences
Movement

A. ABRAHAM MASLOW:
An eminent U.S. psychologist,
gave a general theory of motivation
known as Need Hierarchy Theory.
Human behavior is goal-directed.
The needs of individual serves as a
driving force in human behaviour.
Therefore, a manager must
understand the “hierarchy of
needs”. Maslow has proposed “The
Need Hierarchy Model
Once a need is satisfied, it declines
in importance and the next higher
need is activated
There are opportunities for
fulfillment off the job and on the job
in each of the five levels of needs
B. DOUGLAS- McGregor:
He was a social psychologist and professor at Massachusetts Institute of Technology,
U.S.A.
His famous works included: The Professional Manager, Leadership and Motivation, The
Human Side of Enterprise.
He is known for the development of a theory on Motivation, named as Theory X and
Theory Y.
E. PETER F. DRUCKER:
He was born in Vienna in 1909 and has varied experience. He served as
newspaper correspondent, an economist, a management consultant in
different countries and was a Professor of Philosophy and Politics, Professor
of Management and Professor of Sciences.
Some of his most important contributions are as follows:
1.Nature of Management
2.Organisation
3.Functions of Management
4.Management by Objectives
5.Futurity and Organisational Change
1. QUANTITATIVE OR MATHEMATICAL APPROACH
This theory became an acceptable theory during world war II , when Britain
wanted to solve the problem of war. The problem was that the radar system did
not perform well at field sites as it performed at the testing stations. During the
war managers, government officials, and scientists are brought together to help
the army to utilize the resources effectively. The experts solved many logistic
problems in the war. After the war, such techniques were used by the
organizations to solve their business problems. This school of thoughts uses
statistics, optimization models, information models, and computer simulation to
solve business problems. It has various branches , such as
a) Management science b) Operations Management c) Management information
system
Management Science approach: Also known as the operation research approach,
which is applied in the areas like capital budgeting, production scheduling, product
strategy management, human resource planning and inventory management.

III. The Modern Management Theories

The operations management approach: is primarily concerned with
production management and its related areas. This approach is helpful in
decision making in the functional areas like finance, marketing and human
resource management.

The management information system approach focuses on designing

and implementing computer based information systems for use by
management.

2. THE SYSTEMS THEORY APPROACH

The systems approach defines a system as a set of interrelated and
interdependent parts arranged in a manner that produces a unified whole.
Societies are systems and so, too, are computers, automobiles,
organizations, and animal and human bodies.
3. CONTINGENCY OR SITUATIONAL APPROACH
This was developed by J.W. Lorsch and P.R. Lawrence in 1970 who were
critical of other approaches presupposing ‘one best way to manage’.
Management problems are different under different situations and need to
be tackled as per the demand of the situation. One best way of doing may
be useful for repetitive things but not for managerial problems.
A manager should study to find out the method that fits into the situation
and helps in precise realization of goals of the enterprise.
 There is no one best way to organize”
 The idea that the organizational structures and control systems manager
choose depend on—are contingent on—characteristics of the external
environment in which the organization operates.