UNIT II –Evolution of Management

Therioes
• Classical Management theory: F. W. Taylor, Max
Weber, Fayol’s principles
• Behavioural school: Human Relations
movement and behavioural science approach
• System Approach
• Contingency Approach

Management concepts 1–1

 The Pre-modern Era
• Ancient massive construction projects
 Egyptian pyramids
 Great Wall of China
• Michelangelo the manager

Management concepts 1–2

 Adam Smith’s Contribution To The Field
Of Management
• Wrote the Wealth of Nations (1776)
 Advocated the economic advantages that
organizations and society would reap from the
division of labor:
 Increased productivity by increasing each worker’s skill
and dexterity.
 Time saved that is commonly lost in changing tasks.
 The creation of labor-saving inventions and machinery.

Management concepts 1–3

 The Industrial Revolution’s Influence On
Management Practices
• Industrial revolution
 Machine power began to substitute for human power
 Lead to mass production of economical goods
 Improved and less costly transportation systems
became available
 Created larger markets for goods.
 Larger organizations developed to serve larger
markets
 Created the need for formalized management practices.

Management concepts 1–4

 Management Perspectives Over Time

Management concepts
5
 Classical approach
• It Emphasizes organisational efficiency to
increase organisational success.

Management concepts 1–6

 Classical Contributions
• Classical approach
 Bureaucarcy
 Scientific management theorists
– Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry
Gantt
 General administrative theorists
– Henri Fayol and Max Weber

Management concepts 1–7

 Contd/-
 Max Weber (Germany)
 Bureaucracy: Ideal type of organization characterized
by division of labor, a clearly defined hierarchy, detailed
rules and regulations, and impersonal relationships

Management concepts 1–8

 Weber’s Ideal Bureaucracy
• Division of Labor
• Authority Hierarchy
• Formal Selection
• Formal Rules and Regulations
• Impersonality
• Career Orientation

Management concepts 1–9

Bureaucracy

Advantages Disadvantages
• Specialization • Rigidity
• Rationality • Impersonality
• Predictability • Compartmentalization of
• Democracy activities
• Red tape

Management concepts 1–10

 Frederick W. Taylor (1856- 1915)

• founder of scientific Management

• one of the first people to study the behavior and
performance of people at work
• was a manufacturing manager
• became a consultant and taught other managers
how to apply his scientific management techniques
• believed that by increasing specialization and the
division of labor, the production process will be more
efficient.

Management concepts 1–11

 Midvale experience
• At Midvale Steel Company, he found that
individual workers had their own notions about
work and different workers performed the same
task in different ways
• He realized that greater output was possible on
the part of the workers but most of them were
engaged in what he called ‘systematic
soldiering.’
• The solution: the first task of management was
to know what constituted a proper day’s work
• He conducted time studies at Midvale Steel
Company which proved of immense use to him

Management concepts 1–12

 Bethlehem Experiments – Pig-
Iron Handling
• Taylor was hired by the Bethlehem Steel Company to
increase the output of one of the larger machine shops
which had been a serious production bottleneck
• Conclusion: Periodic rests enabled a worker to produce
more than continuous work. By a systematic resting time
and improved methods average productivity was raised
from 12.5 tons to 47.5 tons per day.
• Taylor began selecting workers and training them in
handling pig-iron
• The original crew was 75, this reduced dramatically
• The earnings of the crew increased from USD1.15 to
USD 1.85 per man per day.
Management concepts 1–13
 Definition of scientific
management

• Scientific management is the art of knowing

exactly what you want your men to do and then
seeing that they do it in the best and cheapest
way.
F.W TAYLOR

Management concepts 1–14

 Scientific Management
• Frederick W. Taylor
 The Principles of Scientific Management (1911)
 Advocated the use of the scientific method to define the
“one best way” for a job to be done
 Believed that increased efficiency could be achieved
by selecting the right people for the job and training
them to do it precisely in the one best way.
 To motivate workers, he favored incentive wage
plans.
 Separated managerial work from operative work.

Management concepts 1–15

 Taylor’s Four Principles of Management
• Develop a science for each element of an individual’s work, which
replaces the old rule-of-thumb method.
• Scientifically select and then train, teach, and develop the worker.
(Previously, workers chose their own work and trained themselves
as best they could.)
• Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
• Divide work and responsibility almost equally between management
and workers. Management takes over all work for which it is better
fitted than the workers. (Previously, almost all the work and the
greater part of the responsibility were thrown upon the workers).

Management concepts 1–16

 Key Concepts of Scientific Management

 Separation of planning & doing

 Time and motion studies
 Standardization
 Differential piece rate system
 Functional foremanship
 Scientific selection & training
 Economy
 Bilateral mental revolution
Management concepts
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 Separation of planning & doing
• Before Taylor’s scientific management, the
worker himself used to decide how to work and
what instruments were necessary. Thus, he
planned and did the work also.
• Taylor emphasized that planning function should
be separate from actual performance and should
be given to specialists or managers who should
perform it in a scientific way.

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Time Study
Technique enabling manager to ascertain standard
time taken for performing a specified job.

Technique based on study of an average worker

having reasonable skill and ability.

Taylor maintained that Fair day’s work should be

determined through observations, experiment and
analysis by keeping in view an average worker.

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19
Motion Study
Movement of body and limbs required to perform a
job are closely observed.

purpose - To eliminate useless motions and

determine the best way of doing the job.

Motion study increases the efficiency and

productivity of workers by cutting down all wasteful
motions.

Management concepts
20
 Functional Foremanship

Technique developed to improve the quality of work as single

supervisor may not be an expert in all the aspects of the work.

Therefore workers are to be supervised by specialist

foreman.

The scheme of functional foremanship is an extension of

principle of specialization at the supervisory level.

Management concepts
21
Management concepts
22
Standardization
Standardization is a means of achieving economics of
production.

It seems to ensure -
•The line of product is restricted to predetermined type,
form, design, size, weight, quality. etc
•There is manufacture of identical parts and components.
•Quality & standards have been maintained.
•Standard of performance are established for workers at
all levels.

Management concepts
23
Differential Piece Wage Plan

This tech of wage payment is based on efficiency of worker.

The efficient workers are paid more wages than inefficient one.

This system is a source of incentive to workers who try

improving their efficiency in order to get more wages.

It also encourages inefficient workers to improve their

performance and achieve their standards.

It leads to mass production which minimizes cost and maximizes

profits.

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Scientific selection & training: Each
worker must be scientifically selected (on the basis
of education, experience and aptitude) trained and
developed rather than passively leaving them to
train themselves.

Economy: While applying scientific

management, not only scientific and technical
aspects should be considered but consideration
should be given to profit and economy. Cost
estimates and control techniques should be used.

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 Bilateral mental revolution:
This principle states that there should be
cooperation between the management and the
workers. For this, a mental change in both
parties is necessary. They should move from
conflict towards cooperation

Management concepts
26
Evaluation of Taylor
• The idea of separating planning from doing has been criticized.

• Functional foreman ship meant multiplicity of command. This

violates the principle of unity of command.

• The concept of mental revolution never materialized.

• The concept of time and motion and differential piecework

system of wages are based on “economic man” assumption. In
reality, man has other needs also, namely, social and
psychological.

• People do not work individually but are guided by group norms

and expectations.
Management concepts
27
 Implementation Problems
• Rather than sharing • Managers did not care
performance gains with about the workers’ well
workers through bonuses, beings
only increased the amount • Workers withheld job
of work that each worker knowledge to protect their
was expected to do. jobs and pay.
• Unhappy workers: more • Workers develop informal
work but same pay; work rules that discourage
increase in performance high performance .
meant fewer jobs and
greater layoffs; dissatisfied
with monotonous and
repetitive jobs.

Management concepts 1–28

Organizational Responses and
Results
• Increased mechanization of the work process.
Example: Henry Ford introduced moving conveyor belts in
factory. Machine imposed pace to push employees to
perform at higher levels.

• The combination of 2 management practices: 1)

achieving the right mix of worker task specialization and
2) linking people and tasks by the speed of the production
line =savings in cost and increase in output.

• Introduction to ethical issues in work places.

Management concepts 1–29

 Scientific Management Contributors
• Frank and Lillian Gilbreth
 Bricklaying efficiency improvements
 Time and motion studies (therbligs)
• Henry Gantt
 Incentive compensation systems
 Gantt chart for scheduling work operations

Management concepts 1–30

Advantages of scientific
management
To the employer;
• Higher productivity
• Lower cost of production
• Better utilisation of resources
• Improved quality of work.
To the employee;
• Improvement in working condition.
• Higher earnings
• Better skills through training
Advantages of scientific
management
• To the society;
• Higher standard of living
• Better employee employer relations
• Improvement in work methods
 Administrative Management
• General administrative theorists
 Writers who developed general theories of what
managers do and what constitutes good management
practice
 Henri Fayol (France)
 Fourteen Principles of Management: Fundamental or
universal principles of management practice

Management concepts 1–33

 Fayol’s Fourteen Principles of Management

• Division of work • Centralization

• Authority • Scalar chain
• Discipline • Order
• Unity of command • Equity
• Unity of direction • Stability of tenure of
personnel
• Subordination of the
individual • Initiative
• Remuneration • Esprit de corps

Management concepts 1–34

 Human Resources Approach
• Robert Owen
 Claimed that a concern for employees was profitable
for management and would relieve human misery.
• Hugo Munsterberg
 Created the field of industrial psychology—the
scientific study of individuals at work to maximize their
productivity and adjustment.

Management concepts 1–35

 Human Resources Approach
• Mary Parker Follett
 Recognized that organizations could be viewed from
the perspective of individual and group behavior.
• Chester Barnard
 Saw organizations as social systems that require
human cooperation.
 Expressed his views in his book The Functions of the
Executive (1938).

Management concepts 1–36

 Elton Mayo
• Father of Human Relations Approach
• Conducted a series of experiments at the
Hawthrone plant of the western Electric
Company.

Management concepts 1–37

Hawthorne Studies

¨ Conducted in late 1920’s

¨ Western Electric Hawthorne plant
¨ Showed importance of the
individual in the workplace
¨ Showed the presence of a social
system in the workplace
Hawthorne studies defined
• A series of experiments in which the output of
the workers was observed to increase as a
result of improved treatment by their managers.
• Named for their site, at the Western Electric
Company plant in Hawthorne, Illinois.
 Hawthorne Studies
• A series of studies done during the 1920s and
1930s that provided new insights into group
norms and behaviors
 Hawthorne effect
 Social norms or standards of the group are the key
determinants of individual work behavior.
• Changed the prevalent view of the time that
people were no different than machines.

Management concepts 1–40

Hawthorne studies defined
• A series of experiments in which the output of
the workers was observed to increase as a
result of improved treatment by their managers.
• Named for their site, at the Western Electric
Company plant in Hawthorne, Illinois.
Hawthorne Studies: Workplace Lighting

• Originally intended to examine effects of

lighting on productivity
 Scientificmanagement proposed that physical
conditions affect productivity
• Result: Productivity increased regardless of
lighting level
• Conclusion: Increased productivity was due to
workers’ receiving attention
 Illumination Studies

• The first illumination study was made in three

departments
• The illumination level in each department
was increased at stated intervals
• Puzzling results
 Increased production did not correspond with
increased lighting
 Reduced production did not correspond with
reduced lighting
 Illumination Studies

• The second illumination study utilized a test

group and a control group.
• Illumination intensities were varied in the test
group and compared to the control group.
• Both groups showed increases in production
rates that were not only substantial but also
nearly identical.
 Illumination Studies

• The third illumination study reduced the

lighting for the test group and held the
control group constant.
• Efficiency of both groups increased.
• Production rates increased in the test group
until the light became so poor that the
workers complained.
 Illumination Studies

• Conclusions:
 Employee output was not necessarily related to
lighting conditions, and
 Too many variables had not been controlled in
the experiments.
Hawthorne Studies: Piecework Pay

¨ Examined effects of group piecework pay system

on productivity
¨ Workers under piecework system should produce
as much as possible
¨ Scientific management assumes that people are
motivated only by money
¨ Result: Production less than maximum
¨ Conclusion: Social pressure caused workers to
produce at group-norm level
 Human Relations Movement
• Based on a belief in the importance of employee
satisfaction—a satisfied worker was believed to
be a productive worker.
• Advocates were concerned with making
management practices more humane.
 Dale Carnegie
 Abraham Maslow
 Douglas McGregor

Management concepts 1–48

 Social Events That Shaped Management
Approaches
• Classical approach
 Desire for increased efficiency of labor intensive
operations
• Human resources approach
 The backlash to the overly mechanistic view of
employees held by the classicists.
 The Great Depression.
• The quantitative approaches
 World War II

Management concepts 1–49

 The Systems Approach
• Defines a system as a set of interrelated and
interdependent parts arranged in a manner that
produces a unified whole
 Closed system : a system that is not influenced by
and does not interact with its environment
 Open system: a system that dynamically interacts
with its environment
 Stakeholders: any group that is affected by
organizational decisions and policies

Management concepts 1–50

 The Contingency Approach
• The situational approach to management that
replaces more simplistic systems and integrates
much of management theory
• Four popular contingency variables
 Organization size
 Routineness of task technology
 Environmental uncertainty
 Individual differences

Management concepts 1–51