PRINCIPLES OF MANAGEMENT

(EVOLUTION OF MANAGEMENT THOUGHTS)

Prof. Alankar Trivedi

 EARLY THINKING
Management practice is as old as human civilization when people
started living together in groups.
But earlier, the need for a systematic study of management was not
felt due to the beliefs that management is art and managers are born
and not made.
The situation started changing with the beginning of 20 th century,
specially after world war I and world war II – better utilization of
limited resources.
Growing competition & complexity of managing business
Other classification of management thought and
approaches
• Scientific Management
Classical • Administrative/Operational
Approach management

• Human relations approach

• Social system approach
Neoclassical • Decision theory approach
Approach • Management Science approach
• Human behaviour approach

Modern • System Approach – 1960 Onwards

• Contingency Approach
Approach
Evolution of Management Thoughts
1. Early Contributions – Up to 19th Century
2. Scientific Management – 1900-1930
3. Administrative Management – 1916 -1940
4. Human Relations Approach – 1930 -1950
5. Social Systems Approach – 1940-1950
6. Decision Theory Approach – 1945 -1965
7. Management Science Approach – 1950 - 1960
8. Human Behavior Approach- 1950 - 1970
9. System Approach – 1960 Onwards
10. Contingency Approach – 1970 Onwards
1. Early Contributions
Contributions in the field of management came from variety of sources.
The concept of organisation and administration existed in Egypt in 1300
BC
Kautilya has offered sound principles of state administration in 320
B.C.
Roman Catholic church introduced the concept of staff personnel in
church administration which was further carried on by military
organization
In the field of business organizations, contributions came from Robert
Owen, James Watt, Charles Babbage and Henry Town.
By the end of 19th century, a stage was set for taking systematic study of
management and beginning was made by Taylor in the early part of 20 th
century.
2. Scientific Management
 The concept of scientific management
was introduced by Frederick Taylor in
USA in the beginning of 20th century.
Taylor’s contribution to management
Frederick Winslow Taylor (20 March 1856-21 March 1915), widely
known as F. W. Taylor, was an American mechanical engineer who
sought to improve industrial efficiency.
He is regarded as the father of scientific management, and was one
of the first management consultants.
He is sometimes called as

“Father of Scientific Management”.

What is Scientific Management?
According to Taylor, “Scientific Management is concerned with
knowing exactly what you want men to do and then see in that they
do in the best and cheapest way”

In simple words it is just an application of science to management.

Features of Scientific Management
Separation of Planning and Doing
Functional Foremanship
Job Analysis
Best way of doing things – Time, Motion & Fatigue studies
Standardization
Scientific Selection and Training of Workers
Financial Incentives
Economy
Elimination of wastage & good utilization of resources to earn profit
Mental Revolution
Conflict to co-operation
Principles of Scientific Management
1. Replacing Rule of Thumb with Science
2. Harmony in Group Action
3. Cooperation
4. Maximum Output
5. Development of Workers
1. Replacing Rule of Thumb with Science
This principle says that we should not get stuck in a set routine
with the old techniques of doing work, rather we should be
constantly experimenting to develop new techniques which make
the work much simpler, easier and quicker.
2. Harmony in Group Action
As per this principle, such an atmosphere should be created in the
organisation that labour (the major factor of production) and management
consider each other indispensable.
Taylor has referred to such a situation as a ‘Mental Revolution’. Taylor
firmly believed that the occurrence of a mental revolution would end all
conflicts between the two parties and would be beneficial to both of
them.
3. Cooperation
According to this principle, all the activities done by different people
must be carried on with a spirit of mutual cooperation.
Taylor has suggested that the manager and the workers should
jointly determine standards.
This increases involvement and thus, in turn, increases
responsibility.
In this way we can expect miraculous results.
4. Maximum Output
Scientific management involves
continue increase in production
and productivity instead of
restricted production either by
management or by workers.
5. Development of Workers
According to this principle, the efficiency of each and every person
should be taken care of right from his selection.
A proper arrangement of everybody’s training should be made.
It should also be taken care that each individual should be allotted
work according to his ability and interest.
Such a caring attitude would create a sense of enthusiasm among
the employees and a feeling of belongingness too.
 3. Administrative Management
Henry Fayol – French Industrialist
Father of Modern operational management
His contribution is termed as operational
management / Administrative management

Fayol looked at problems of managing an

organization from top management point of
view
Fayol divided his approach of studying management into
three parts

Management

Managerial General
Elements of
Qualities & Principles of
Management
Training Management

Physical, Mental, Planning,

Moral, 14 Principles Organization,
Education, Commanding,
Technical, Coordination &
Experience Controlling
Henri Fayol’s 14 Principles Of Management
 Division of Work: Specialization allows the
individual to build up experience, and to
continuously improve his skills. Thereby he can be
more productive.

 Authority & Responsibility : The right to issue

commands, along with which must go the
balanced responsibility for its function.

 Discipline : Employees must obey, but this is

two-sided: employees will only obey orders if
management play their part by providing good
leadership.
 Unity of Command : Each worker should have only
one boss with no other conflicting lines of
command.

 Unity of Direction : People engaged in the same

kind of activities must have the same objectives in
a single plan. This is essential to ensure unity and
coordination in the enterprise. Unity of command
does not exist without unity of direction but does not
necessarily flows from it.

 Subordination of individual interest :

Management must see that the goals of the firms
are always paramount.
 Remuneration : Payment is an important motivator
although by analyzing a number of possibilities, Fayol points
out that there is no such thing as a perfect system.

 Centralization (Or Decentralization) : This is a matter of

degree depending on the condition of the business and the
quality of its personnel.

 Scalar chain (Line of Authority) : A hierarchy is necessary

for unity of direction. But lateral communication is also
fundamental, as long as superiors know that such
communication is taking place. Scalar chain refers to the
number of levels in the hierarchy from the ultimate
authority to the lowest level in the organization. It should
not be over-stretched and consist of too-many levels
 Order: Both material order and social order are
necessary. The former minimizes lost time and
useless handling of materials. The latter is achieved
through organization and selection.

 Equity : In running a business a ‘combination of

kindliness and justice’ is needed. Treating
employees well is important to achieve equity.

 Stability of Tenure of Personnel : Employees

work better if job security and career progress are
assured to them. An insecure tenure and a high rate
of employee turnover will affect the organization
adversely.
 Initiative : Allowing all personnel to show their
initiative in some way is a source of strength
for the organization. Even though it may well
involve a sacrifice of ‘personal vanity’ on the
part of many managers.

 Esprit de Corps : Management must foster the

morale of its employees. He further suggests
that: “real talent is needed to coordinate effort,
encourage keenness, use each person’s
abilities, and reward each one’s merit without
arousing possible jealousies and disturbing
harmonious relations.”
 4. Human Relation Approach
The Human Relation Approach was born out of a reaction to classical
approach . (His contribution is termed as operational management /
Administrative management. )
The essence of human relations contributions is contained in two points:
Organisational situation should be viewed in social terms as well as in
economic and technical terms and
The social process of group behaviour can be understood in terms of
clinical method analogous to the doctor’s diagnosis of the human
organism.
5. Management Science approach
It is also known as mathematical or quantitative measurement
approach.
It visualizes management as a logical entity, the action of which can
be expressed in terms of mathematical symbols, relationships, and
measurement data.
6. SYSTEMS APPROACH
System Defined
A set of interrelated and interdependent parts arranged in a manner
that produces a unified whole.
Basic Types of Systems
Closed systems
Are not influenced by and do not interact with their environment (all system
input and output is internal).
Open systems
Dynamically interact to their environments by taking in inputs and
transforming them into outputs that are distributed into their environments.
 Figure 2.4
2-28
CONCEPTS
• Sub system
• Synergy
• Open or Close system
• System Boundary –
• Internal & External

• Flow
• Feedback
IMPLICATIONS OF SYSTEMS APPROACH
Coordination of the organization’s parts is essential for
proper functioning of the entire organization.
Decisions and actions taken in one area of the organization
will have an effect in other areas of the organization.
Organizations are not self-contained and, therefore, must
adapt to changes in their external environment.
7.CONTINGENCY APPROACH
Also sometimes called the situational approach.
There is no one universally applicable set of management
principles (rules) by which to manage organizations.
Organizations are individually different, face different situations
(contingency variables), and require different ways of managing.
Managers are require to identify which technique will In a
particular situation, under particular circumstances at particular
time is suitable.
 Contingency Theory

Figure 2.5
2-32
 Systems vs. Contingency Theory
Systems Theory Contingency Theory
 Organisation-environment relationship not  Spells out the relationship of organiation to
explained clearly. its environment clearly.
 Takes a general view of organisational  Takes a specific view of how the
variables (technical, social, personal, organisation adjusts to its environmental
structural, external). demands. Mainly concerned with structural
 Considers all organisations to be similar. adaptations of organisation to its task
 Vague and complex. environment.
 Emphasises the synergistic effect of  Each organisation is unique.
organisations and recognises the external  More pragmatic and action-oriented.
inputs.  Relates environment to specific organisation
 Merely outlines interdependencies among structure and design. It integrates theory with
systems and sub-systems. practise in a systems framework.
 Tries to identify nature of inter-dependencies
between various parts of an organisation, and
their impact on various other things.