mHistory of Management theories

mClassical School

mBehavioral school

mIntegration and Contingency school of Management

mOther Contemporary/ Modern theories of Management

m Management is Predominantly a Twentieth century
Phenomenon

m In the earlier years management could never get

attention of researchers

m The field of Business in which Management concepts

were applied were held extremely low & unworthy of
study

m Indifferent attitude of other social scientists

m Post World War I & II - created a situation where people
started of solution to problems ± where limited resources
could be applied in a better way

m Problems/ Issues ± Growing Competition, Complexity of

handling large Business Organizations

Hence the need for Systematic Principles & concepts was

felt
Increasing Competition -
r Technological Innovations & their dissemination in
Businesses
r Growing Technological Obsolescence
r Increase in Capital investment
r Freedom at national & international markets
r Increasing buyers
„

     

r Increasing size of Business organizations

r High degree of division of labour & specialization
r Increased government regulations & control to make
businesses more socially-oriented
r Organized labour union activities to put pressure on
the management
r Pressure of various other conflicting interest groups
     „
  

       
 


     
   

mergence of a variety of Approaches & orientations in
management -
1. Classical Approach ± Scientific/ Administrative /Operational
Management

2. Neo Classical Approach ± Human relations/ Social Systems

Approach/ Decision Theory Approach/ Management Science
Approach/ Human Behaviour Approach

3. Modern Approach ± Systems Approach/ Contingency Approach

÷ 
  
     
 

F.W Taylor Henri Fayol



Max Weber
m         


         
 
  

 

m    


 
 
     

  


  
    
 

 
 
m ising from the lowest to a high rank

" #  

$   
 

  „
%  
 ÷ „
 &

gave him a number of opportunities to understand the

problems and attitudes of workers and see the great
possibilities for improving the quality of Management

m Famous Work ± G  

÷ 

 
 !
m  
        
   

      
  
  

m  
'    (    


     (   



       
1. eplacing the decisions based upon tradition and old rule-of-
thumb with ÷     '    

 
  of an individual at work

2. Obtaining 
     and develop a standard

method for performing each job

) ÷  $    
   

 

*       
  of workers to the fullest extent

possible for their own and the company¶s highest prosperity
ë +$   
     # $ 

'

è. Sprit of immense   $    

 
  to ensure that tasks are carried out in
accordance with the scientifically devised procedures.
Support workers by planning their work and eliminating
interruptions

,          to allow

continuity and memory.

8. Managers
  #  to enable
reliable/predictable behavior.
Ñ. Management is different from ownership of the
organization. Positions placed in     
 
 

10. Provide     to workers for increased

output
m Henri Fayol, a French management theorist is referred to
as r


  
 
 
 r

m He was one of the most influential contributors to

modern concepts of management.

m Fayol's work has stood the test of time and has been
shown to be       
 
 
 
 .
m Based largely on his own management experience, he
developed his concept of administration

m He derived a*  

 
  that were
discussed in detail in his book - General and Industrial
Management, widely considered a foundational work in
classical management theory
a    - $ - The right to give orders/ issue
commands and the power to extract obedience. There should
be a balanced responsibility for this function

. ÷'  /

$  ± Specialization allows
individuals to build up experience and the continuous
improvement in skills. It gives way to higher productivity and
efficiency

) /  - The workers should be obedient and respectful of

the organization. The management should provide good
leadership. There should be no slacking, bending of rules
* 0 


  1 mployees should receive orders
from one superior. There should not be any conflicting
lines of command

ë 0 
  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

2 ÷$  
3  3  - When at work,
only things related to work should be pursued or thought
about
, -
  - mployees receive fair payment for
services, not what the company can get away with

4 „ ' 1 Consolidation of management

functions. Decisions are made from the top

5 „
÷  " 
 & - A hierarchy is
necessary for the unity of direction. It refers to the formal
chain of command running from top to bottom of the
organization. But it should not be over-stretched or
consist of too many levels
a  6 ± Social as well as material order is necessary.
Both should stand at their prescribed places

aa %7 ± In a running business a combination of

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

a.     ± mployees 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
a) 3  ± Allowing all personal to show their initiative
in some way is a source of strength for the organization

a* %    ± There should be harmony and

cohesion/ consistency/commonality among personnel
r It's a great source of strength in the organization.
r Fayol stated that for promoting esprit de corps, the principle of
unity of command should be observed along with teamwork,
avoiding the dangers of divide and rule
m Some of these ideas may seem self-evident today, but can be seen as
being revolutionary in Fayol's time

m Until today, his principles remain important as they continue to have a

significant impact on current managerial thinking

m Fayol's main contribution was the idea that management was not a
talent related to genetic hereditary, but a skill that could be taught.
(doesn¶t flow down from generations but can be learned)

m He created a system of ideas that could be applied to many areas of

management and laid down basic rules for managing large
organizations
m One of the most profoundly influential thinkers of the
twentieth century
m Born in Germany, became a lawyer, politician, scholar,
political economist & sociologist
m He founded/ co-founded a number of academic
disciplines -
r public administration, organizational theory, modern study of sociology
r He is often regarded as one of the 'founding fathers' of sociology
m  $ disliked that many uropean
organizations were managed on a ³personal´
family-like basis

m mployees were loyal to individual supervisors

rather than to the organization
m ationalization in sociology of religion, government,
organizational theory/ behavior

m Analysis of bureaucracy in conomy & Society is still

central to the modern study of organizations

m His most well-known contributions are often referred to

as the 'Weber Thesis'.
m Organizations should be managed impersonally and that authority
should not be based on someone¶s personality

m Important to have a formal organizational structure, where specific

rules were followed

m Should be something that was part of a person's job and passed

from individual to individual as one person left and another took
over "

   &

This non-personal, objective form of organization was called a

$
a +  '    
 

Structure & set of regulations in place to control activity

. -  $ -1   

Standardized procedure that dictates the execution of most

or all processes within the body, formal division of powers,
hierarchy, and relationships

) 
In practice the interpretation & execution of policy can lead
to informal influence
m Bureaucratic structure is the most 

  form of
organizational structure for all types of organizations

m Most -  means of carrying out imperative control

over human beings

  ÷' ( (   -(

3
      ( „
 
a 
  „
r Coordination
r Whole-time employees
r Payment of salaries based on the positions/levels
r Tenure is determined by the rules & regulations of the
organization
r Selection of employees based on their competence

. 6

 -   

r Standard operating procedures govern all organizational
activities to provide certainty, uniformity & facilitate
coordination
)   
  
r Positions structured - Permits the higher positions to
supervise & control the lower positions
r Serves as lines of communication & Delegation of Authority
r Clear chain of command facilitates control & order throughout
the organization
r Offices with same amount of authority, with different kinds of
functions, operating in different areas of competence
r g. Government organizations

   

        
   

   $ 

  '
* /
   ÷'
r All responsibilities in an organization are specialized so that
each employee has the necessary expertise to do a particular
task
r Sphere of obligation to perform functions
r nsures that no work is left uncovered

ë 3
    $
   


 
r Managers should maintain an impersonal relationship with
employees so that favoritism & personal prejudice do not
influence decisions
r Decisions governed by rational factors
2 6

 - 
r A bureaucracy needs to maintain complete files regarding all
its activities

, „
 
r Not ³who you know,´ should be the basis for all decisions
made in hiring, job assignments, & promotions in order to
foster ability and merit as the primary characteristics of a
bureaucratic organization
r consistent patterns of recruitment and stable linear careers
r formal and informal networks that connecting employees
r flows of information and cooperation
1. Hit by  

   6'

2. Too many     led to their misuse/

contradiction

3. Decision-making became very slow

* „  ÷
#/ 
 - Delay in change, evolution

and adaptation of old procedures to new circumstances.
Not aware of its own mistakes & limitations
ë 3 
 ± Bureaucratic Structure    

 . Human behiavour is neglected. No room for
flexibility & innovation
è. Superior-subordinate relationships turned against
congenial organizational climate.   

 

 
7. Not allowing people to  

 , as
everything must be as is written by the law

%

 $
‡Governments,
‡Armed forces,
‡corporations,
‡non-governmental organizations (NGOs),
hospitals,
‡courts,
‡Ministries
‡Schools & Colleges
 
 -  
r Organizational situation should be
viewed in all social, economic &
technical terms
r Analysis of the human factor in
organizations

lton Mayo (psychologist) oethlisberger (sociologist)

m   ÷ 

 

McGragor Maslow
m A group of researchers undertook a series of
experiments at the Hawthorne Plant for the General
lectric Company in the 1Ñ20s. They set out to study
the   $    
  

m The experiments were conducted on factory workers to

study the effects of lighting/ illumination on worker
productivity
r Intensive & systematic Analysis of the Human factor through
experiments
m It was found that productivity almost always increased
initially after a change in illumination, but later returned to
normal levels. Over a period of time changes in
illumination had no measurable effect
m The experiment was about to be declared as a failure
when a second set of experiments began supervised by
Harvard University professors, ' - $ 
% 
m They experimented on other types of changes in the
working environment like ±
r  
r 
     $

$
  
 
r   
$   

m The researchers reported that they had accidentally found

a way to increase productivity
m The effect was an important milestone in industrial and
organizational psychology & organizational behavior
m It was found that     
  
   had little motivational value

  
       
 

   
    

 

      
$   
 

  
m They concluded that people's work performance is
dependent on both     8 $   

m A tension/rift between ±

 G 1 9 
 
 9

 G 1 9 
  


 9

could lead to conflict within organizations

m %

  
  ± Managing with the ability to understand

human behavior, group behavior and interpersonal skills ±
motivating, counseling, leading and communicating

m The phenomenon arising from the fact that µpeople are noticed¶ has
been known as the G



a ÷ 
   6
r Organization is influenced by social norms
r Social characteristics determine the output &
efficiency
r Work groups provide
     


  
 
  
 to increase
output

. :  3
  1 Formation of informal groups.
r Workers are social beings ± norms & behaviours
r Groups formed to overcome shortcomings of formal
relationships
* „
 
r Between organization & groups, due to
incompatible objectives
r Maladjustment of workers
r Adjust of the individual in the organizational
structure

ë „

 
r Better understanding between management &
workers

2 +  ÷
r Means to direct a group behaviour
r Determining efficiency & output
m These studies greatly added to our knowledge of 

$    '  and created pressure for
management to change the traditional ways of managing
human resources

m The Human elations Movement pushed managers toward

gaining   
  

 ' in solving organization problems

m The Movement also fostered a
     

 
      
   
 8   " 

&
1. The Hawthorne researchers did not give much
attention to attitudes of people at workplace. They did
not recognize forces like Class consciousness, role of
unions, etc.

2. Looked upon the worker as a means to an end and not

an end in himself. They assume acceptance of the
management¶s goals & look on the worker as the one
to be manipulated by the management
1. Motivated by many needs
2. Logical thinking not possible always
3. Interdependent - our behavior is often shaped by the
social context
4. Informal work group is a major factor in determining
attitudes & performance of individual workers
5. Management is only one factor affecting behavior; the
informal group often has a stronger impact
è. Job roles are more complex than job descriptions.
People act in many different ways not covered by job
descriptions
7. There is no automatic correlation between individual &
organizational needs
8. Communication channels cover both logical/economic
aspects of an organization and feelings of people
Ñ. Teamwork is essential for cooperation and sound
technical decisions
10. Leadership should be modified to include concepts of
human relations
11. Job satisfaction will lead to higher job productivity
12. Management requires effective social skills, not just
technical skills