Taylors scientific management theory

• Scientific management theory is an objective approach that leads

to economic efficiency and workflow productivity in an
organization. Frederick Winslow Taylor, the father of scientific
management theory, used it as a management practice in the
manufacturing sector back in the late 19th century
• The scientific theory of management changed how
organizations perceived workers as lazy and who work, but
inefficiently, for earning income. 
• Frederick Winslow Taylor, who formulated the scientific
management theory, came up with a solution for the
inefficiency by observing worker productivity through
scientific methods.
Taylor proposed an empirical observation of how employees in an
organization worked. And in his research, he focused on the routine
tasks of the employees. Then, in his management methods, he would
look into the equipment or technology used and try to customize it
for the worker’s ease of use. 

Principles of Scientific Management

1.First Principle – Replace the “rule of thumb” with science and

standardization
There should only be one method of working. It must be defined
scientifically. According to Taylor, the best way to do a job must be
determined beforehand in a scientific fashion. If workers have
devised their own ways of working, it will not lead to productivity. 
The ‘ways of working’ here refer to the tools used. These tools
must be standardized and that will remove the factor of bad
working conditions. 
2.Second Principle – The Right Person for the Job
For any job, the management should hire the right person for
the right job. That worker should have the necessary skills to
perform the tasks to fruition. The management should also hire
a worker knowing they will have challenges too. For that,
training workers would be required once they are selected. Then
the worker should be introduced to standardized tools for their
work process. 
3.Third Principle – Proper Division of Work Between Workers and
Managers
Functions of management, planning,organising,controlling and
directing, must be adopted by the organization. The worker who
is assumed to be able to work should not be assumed to know
and apply these facets of management. By assigning the worker
with the correct workload, there can be a better mutual
understanding between two parties, and will further eliminate
uncertainties in the future. 
4.Fourth Principle – Collaboration Between Workers
and Managers
Workers and managers should work in harmony,
according to this principle. It is the responsibility of the
management to create a healthy environment for the
workers by eliminating distrust. For that, there should
be clear communication and development of team
spirit. 
Goals of Scientific Management
• Scientific management theory aims to increase
efficiency so that revenue is increased. This can be
achieved through the following goals. 
• Improving productivity by standardizing tools to
achieve a high production rate.
• Ensuring quality is consistent in products through
research and quality control.
• Introducing cost control techniques to minimize the
cost of production
• Making sure consumers find a regular supply of goods
 Elements or Techniques of Scientific Management
Theory
1. Work Study:
According to International Labour Office “Work study is a term used to
embrace the techniques of method study and work measurement which
are employed to ensure the best possible use of human and material
resources in carrying out specified activity.
“In simple words, work study is related to analysing the work to be
performed by eliminating unnecessary operations and finding out the
quicker way of doing it. Work study eliminates wasteful and unnecessary
operations, reduces effort and increases productivity.
2. Standardization of Tools and Equipment:
Standardization of tools and equipment was an important element of scientific
management. Taylor wanted to use only ‘the best way of doing the work. Proper
tools and equipment are essential for increasing the efficiency and speed of work

3. Scientific Selection, Placement and Training:

The efficiency and quality of work is linked to the kind of persons selected for
taking up different jobs. Taylor wanted a radical change in the methods and
procedures of selecting workers. Workers should be selected by considering their
education, experience and attitude towards work. The placement of workers
should be such that only the most suitable persons are assigned the work.
Placement should be on the basis of merit rating which indirectly implies, ‘round
pegs in round holes’. Workers should be given training to make them suitable for
the jobs. Orientation training should also be imparted to prepare them to meet
new challenges.
4. Development of Functional Foremanship:

Taylor pleaded the concept of functional foremanship. He felt that

workers and factory executives should be freed from the burden of
planning and designing. Functional foremanship is the extension of the
principle of specialization or division of labour to the sphere of
management.
According to Taylor the two functions of planning and doing should be
separated. The planning section should concentrate on planning the
task and issuing instructions to the workers for implementing them.
Taylor suggested eight functional specialists, the first four attached
with planning work and the next four with actual implementation or
execution of the plan.
Functional Foremanship
 Those involved in planning are:
Those involved in planning are:
(i) Route Clerk – to lay down the sequence of operations
(ii) Instruction Card – Clerk lay down the exact method of doing the work
(iii) Time and Cost Clerk – to keep records of time spent by different workers
on different jobs and prepare the cost sheets
(iv) Shop Disciplinarian-to deal with cases of breach of discipline and
absenteeism.
The foremen involved in actual implementation of work are:
(i) Gang Boss – to assemble and set up various equipments and tools
(ii) Speed boss – to ensure that machines are run at optimum desired
speed
(iii) Repairs boss-ensure regular cleaning, servicing and repair of machines.
(iv) Inspector-to ensure that the workers perform their work as per desired
quality.
 Management by Objectives(MBO)
• The term was first popularized by peter drucker in his book The practice of
management in 1954
• Also called PRIDE(Performance result and individual development),it is defined as
setting goals fir all managerial activities which emphasizes on achievement of
results expressed interms of objectives. Objectives must be time
bound,specific,realistic,qualitative or measurable .
• Management by objectives (MBO) is a process in which a manager and an employee
agree on specific performance goals and then develop a plan to reach them.
• It is designed to align objectives throughout an organization and boost employee
participation and commitment.
• There are five steps: Define objectives, share them with employees, encourage
employees to participate, monitor progress, and finally, evaluate performance and
reward achievements.
• Critics of MBO argue that it leads to employees trying to achieve the set goals by
any means necessary, often at the cost of the company.
 4 Basic principal of MBO
• Unity of management action is more likely to occur when there is
pursuit of common objective.
• The greater the focus on result on a time scale, the greater the
likelihood of achieving them
• The greater the participation in setting meaningful work with
accountable result, the greater the motivation for completing it.
• Progress can only be measured to evaluate and so there can
always be scope for improvement.
 Processes of MBO
1. Goals
Goals are the most important and fundamental elements of the MBO
management process. They are set for all contributors of the organization
including managers, employees, CEO, team leaders, and other contributors.
They make them all responsible for their part of contribution and everybody in
the organization has a sense of what he/she is supposed to do to fit into the big
picture. It means that there is no confusion left and everybody knows their
responsibilities.
2. Objectives
Objectives are also the most important elements of the MBO process. They are
set for the organization or we can say for work. Objectives are the target that each
contributor has to chase by using his/her goals.
Objectives also help evaluate the performance of contributors. If contributors
have easily achieved the objectives in a defined period of time, then managers try
to make them challenging yet motivating to further improve their performance.
3. Performance Reviews
Performance reviews help managers to evaluate the weaknesses and
strengths of their employees so they can open a channel of communication
to appreciate the performance or fix the errors. This element also opens up
brainstorming sessions for both managers and employees so they can fix the
problems or modify the objectives (if possible).
Features of MBO
• After defining MBO, the principles of MBO, and how it works, we are now
able to list out the main features of the MBO system. Following are the most
important features of the MBO.
• MBO is a philosophy, not a technique that provides a path to organizational
success. It means MBO is not just limited to a certain area, but it is a
philosophy that fits every aspect of management.
• Managers and employees define the objectives of the
organization or individuals by working together to set a
target that is to be chased later.
• Later, these defined objectives become the scale of
evaluation on which managers evaluate the performance of
their employees.
• Every contributor has a clear sense of what he/she is
supposed to do.
• MBO defines what is to be achieved instead of how it is to
be achieved.
• It is a result-oriented managerial approach.
 Advantages of MBO
• Personalized Objectives: MBO allows employees to set their personal objectives
according to their competencies, skillset, and strengths. This allows self-growth
and skill development.
• Responsibility: As each working staff sets his/her objectives, it makes them
responsible to achieve their goals as they have set their own goals. This sense of
responsibility also brings royalty to the organization.
• Communication: MBO opens a communication channel between the top
management and the employees. This communication channel allows to remove
any ambiguities and makes the objectives crystal clear.
• Efficiency: As the MBO objectives are clear and time-bound, it helps improve
productivity and the efficiency of the operational units.
• Continuous Support: Unlike other management techniques, MBO provides a
mechanism of continuous support throughout the MBO cycle. Mangers
continuously provide feedback, reviews, guidance, and monitoring to remove
any issue that arises in the working environment.
• Sense of Importance: Through proper appraisal and reward process,
MBO gives the employees a sense of importance and realizes them
that the organization values their work and they are an important
asset to the firm.
• Unity of Goals: MBO introduces a common goal throughout the
organization which means unity of goals.
• Measurement of Performance: MBO provides a mechanism for the
measurement of performance for each individual in the organization.
• Resource Optimization: MBO process helps resource optimization
because only those who are competent use only required resources.
It means resources are allocated according to the goals.
• Clear Expectations: As the objectives are measurable, attainable, and
time-bound, it means end goals and expectations are clear-cut from
day one when goals are set.
 Disadvantages of MBO 
• Goal Settings and Organizational Culture: Sometimes MBO seems limited
when it comes to goals settings. For example, what should be the nature
of goals? Long-term or short-term? Quality-oriented or quality-oriented?
Moreover, MBO focuses only on goals and objectives rather than the
culture of the organization.
• Time Consuming: The whole process of goal settings, appraisal, reviews,
monitoring, and evaluation takes a lot of time and paperwork.
• Goals-Oriented: MBO focuses more on goals and objectives rather than
the actual action plan and a course of action.
• Faulty Evaluation Process: Sometimes managers try to evaluate
employees from their perspective and competencies rather than the
employees’ skillset. It means there are chances that an incompetent
manager may involve in the evaluation process.
• Too Much Expectation: Sometimes managers expect too much from the
employees and treat employees like ideal employees without leaving any
room for mistakes. This may lead to several issues and clashes between
management and the working unit.
• Limited Growth: As the employees play a part to set goals as per their skill
set. It leaves little room for self-growth because the employees,
sometimes, are not willing to try out new and creative ideas rather they
stick to old methodologies.
• Negative Competition: Although superiors reward employees for their
efforts and goals achievement, it may create negative competition among
the other employees where everyone tries to the best by hook or by
crook.
 DEPARTMENTATION
• Grouping homogeneous activities into one organizational unit on the basis of
special and continuous nature of activities is called departmentation. The
appropriate division of organizational activities into departments for the
purposes of administration has been one of the fundamental concerns of
management.
• Departmentation may be defined as the process of forming departments or
grouping activities of an organization into a number of separate units for the
purpose of efficient; functioning. This term vary a great deal between different
organizations. For example, Planning and Organizing in business undertakings,
terms are division, department and section; in Government these are called
branch, department and section; in military, regiment, battalion, groups and
company. The impact of departmentation is a delineation of executive
responsibilities and a grouping of operating activities. Every level in the
hierarchy below the apex is departmentalized and each succeeding lower level
involves further departmental differentiation.
 Need for Departmentation
The necessity of departmentation arises because of the anxiety on the part
of management to achieve the organizational goals through coordinated
efforts of the individuals working in the organization. More specifically it is
necessitated by the following considerations.
i) Departmentation permits an organization to take advantage of specialization.
ii) Departmentation enables each person to know the role he is expected to
play in the total activities of the company.
iii) Departmentation facilitates communication, coordination and control and
contributes to the organizational success.
iv) Departmentation provides a platform around which the loyalties of
organizational members may be built.
v) It enables a manager to locate the sources of information, skills and
competence to take certain vital managerial decisions.
 Basis of Departmentation
Functional Departmentation
• The most common form of grouping activities prevalent almost in every
enterprise is the functional departmentation. The word function refers to the
principal activities of an enterprise. It may be defined as any task involved in
the performance of activities of an enterprise that can be clearly
distinguished to any other task. In a manufacturing organization, the
important functions are production, sales, finance, and personnel.
Functional departmentation may also be carried out at the lower levels
of the organization.
• For example, activities in the marketing department may be classified and
grouped into marketing research, sales and advertising. In other words, the
process of functional differentiation may take place through successive levels
in the hierarchy. The process can continue as long as there exists a sound
base for further differentiation.
 CEO

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 Advantages:

• I. It is a very simple, natural and logical way of

grouping activities.
• II. It promotes specialization and expertise in
various functional areas and experts can be
employed.
• III. It facilitates co-ordination both within the
function and at the inter-departmental level.
• IV. It generates a high degree of centralisation at
the level of chief executive.
 Disadvantages:

(i) It may lead to internal frictions among the

various departmental heads as one department
may ignore the interest of the other,
(ii) In functional departmentation, men are experts
of these areas of function only. This hinders the
development of all-round managers.
(iii) It leads to excessive centralization and delay in
decision making.
Product Departmentation
This type of departmentation is made by the large-scale
business unit. A single business unit may manufacture and sell
different types of products. Then, each type of product or
service is allocated to a separate department. Functionalized
units for each product are created within the general structure
of the organization. Manufacturing, sales, finance and personnel
functions are arranged separately for each type of product. Each
department is responsible for manufacturing a product and
selling it to customers. Grouping of all activities are planned in
advance within each product section. The co-ordination function
is performed by the top management.
 Advantages:
(I) It ensures better customer service.
(ii) Unprofitable product lines can be easily determined.
iii) It solves the co-ordination problem of functional
departments.
(iv) It makes control effective.
(v) It assists in the development of all-round managerial
talent.
(vi) It is flexible as a new product division can be easily
added.
 Disadvantages:

(i) It is expensive because of duplication of

service functions in various product divisions.
(ii) It may not be linked by customers and dealers
who have to deal with different salesmen of
the same enterprise for different products.
(iii) It may cause difficulty in apportioning general
expenses incurred by the enterprise as a whole.
Territorial/Geographical Departmentation
This method of departmentation may be suitable
for a business unit which is wholly dispersed. The
business activities are grouped in area-wise and
each area is in charge of a single person. The local
persons are appointed as salesmen in each area. It
will help the business unit to increase the sales. The
reason is that the local person is familiar with the
local language, the culture and preferences of the
customers.
 Advantages:
• i) It enables an enterprise to cater to the needs of
local people in a satisfactory manner.
• (ii) It enables a concern to make use of locational
advantages.
• (iii) It facilitates effective control.
• (iv) It facilitates effective co-ordination of
activities within an area.
• (v) It assists in the development of all-round
managerial talent.
 Disadvantages:

(i) It is an expensive method of creating

departments and over head costs are also
increased,
(ii) It leads to duplication of activities which
creates confusion and involves costs,
(iii) Co-ordination among various territorial
divisions may become difficult.
Customer Wise Departmentation:
A business house may be divided into a number of departments
on the basis of customers it serves, viz., large and small
customers ; industries and ultimate buyers ; government and
other customers. The peculiar advantage of customer wise
departmentation is that it ensures full attention to different
types of customer and their different needs, tastes and
requirements can be read effectively. However, it may not be
possible to group all activities of an enterprise on the basis of
customers. In fact,the activities may be classified or grouped on
such basis. But there may be problems of co-ordination with
other departments. There may not be enough work, at times, in
case of certain types of Customers. This may lead to idle capacity.
 Process or Equipment Wise Departmentation:
An enterprise where production is carried through different
processes may adopt process wise departmentation to
enable continuous flow of production. Similarly, where work
is carried on machines which are common, departments
may be created on the basis of equipments, such as milling
departments, grinding departments, lathe department etc.
The main advantage of this method is that it avoids
duplication of equipment in various activities. Moreover,
specialized people can be engaged to work on specialized
equipments and departments.
  Combined or Composite Method of Departmen­tation:
In practice, it may not be advisable to create
departments on the basis of any one of the above
mentioned methods. An enterprise may have to
combine two or more of the methods of
departmentaton to make best use of all of them.
Such a method is known as combined or composite
method of departmentation.
Different Types of Organizational Structures
It depend upon size of org,product being manufactured and nature of problems being faced.

What is Formal Organization?

  Formal organization is that type of organization structure where the authority and
responsibility are clearly defined. The organization structure has a defined
delegation of authority and roles and responsibilities for the members.
The formal organization has predefined policies, rules, schedules, procedures and
programs. The decision making activity in a formal organization is mostly based on
predefined policies.
Formal organization structure is created by the management with the objective of
attaining the organizational goals.

There are several types of formal organization based on their

structure, which are discussed as follows:
1. Line Organization
2. Line and Staff Organization
3. Functional Organization
Line Organization: Line organization is the simplest organization structure and it also happens to be the oldest
organization structure. It is also known as Scalar or military or departmental type of organization.
In this type of organizational structure, the authority is well defined and it flows vertically from the top to
the hierarchy level to the managerial level and subordinates at the bottom and continues further to the
workers till the end.
There is a clear division of accountability, authority and responsibility in the line organization structure. So It
is called vertical line of Auth.
One of the most common examples of line organization is small businesses with the owner overseeing daily
operations

Advantages of Line organization

1. Simple structure and easy to run

2. Instructions and hierarchy clearly defined
3. Rapid decision making
4. Responsibility fixed at each level of the organization
Disadvantages of Line organization:
1. It is rigid in nature
2. It has a tendency to become dictatorial.
3. Each department will be busy with their work
instead of focusing on the overall
development of the organization.
Line and Staff Organization: Line and staff organization is an
improved version of the line organization. In line and staff
organization, the functional specialists are added in line. The staff
is for assisting the line members in achieving the target effectively.
Advantages of Line and Staff organization
1. Easy decision making as work is divided.
2. Greater coordination between line and staff workers.
3. Provides workers the opportunity for growth.
Disadvantages of Line and Staff Organisation
1. Conflict may arise between line and staff members due to the
improper distribution of authority.
2. Staff members provide suggestions to the line members and
decision is taken by line members, it makes the staff members feel
ignored.
Functional Organization: Functional organization structure is the type of
organization where the task of managing and directing the employees is arranged
as per the function they specialize. In a functional organization, there are three
types of members, line members, staff members and functional members.

Advantages of Functional organization

1. Manager has to perform a limited number of tasks which improves the accuracy
of the work.
2. Improvement in product quality due to involvement of specialists.

Disadvantages of Functional organization

1. It is difficult to achieve coordination among workers as there is no one to manage
them directly.
2. Conflicts may arise due to the members having equal positions.