Chapter 2- History of Management

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chapt2_1Classical theory

Otherwise known as traditional theory.  It incorporates three view point:

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Features/Characteristics of Classical approach

Following are the features of Classical approach:

  1. Concentration on the structure of the organization by emphasizing on division of labour and specialization, scalar, functional process and span of control.
  2. Ignored the role of human element by emphasis more on co-ordination of activities and organization structure.
  3. Treatment of organization as closed system. Ignored the role of the external environment.
  4. Based on Centralization of authority.
  5. Efficiency of the organization is directly related to individual efficiency .
  6. People at work could be motivated by economic reward. As they are supposed to be rational people.

Scientific Management Approach

Main contributors: Frederick W. Taylor, Henry L. Gantt, Franklin Gilbert, Lillian Gilbert and Harrington Emerson.

Frederick W. Taylor:

He launched movement on scientific management, hence been known as “Father of Scientific Management”.  Scientific management means applications of scientific methods to the problems of management. He advocated scientific task setting based on time and motion study, standardization of materials, tools and working conditions and so on. He laid emphasis on following principles:

  • Science, not rule of thumb
  • Harmony in group of action, rather than discord
  • Maximum output in place of restricted output.
  • Scientific selection and placement of workers
  • Almost equal division of work and responsibility between workers and management.

Basic idea of scientific management is mental revolution, which has three implications:

  • All out efforts for increase in production
  • Creation of the spirit of mutual trust and confidence; and
  • Inculcating and developing the scientific attitude towards problems.

Techniques for implementing scientific management:

  • Scientific task setting
  • Work study to simplify work and increase efficiency
  • Standardization of materials, tools equipment, costing etc
  • Scientific selection and training of workers
  • Differential piece-wage plan
  • Functional foremanship
  • Elimination of waste.

Criticism of scientific management:

  • Is production centered and does not consider the human element
  • Ignores social and psychological needs of the workers
  • Trade unionist regarded it the means of exploiting the workers as increase in the productivity did not lead to increase in wages.

 

Fayol’s Administrative Management

Also known as Management process, Administrative Management approach and also Functional approach. Henry Fayol defined management in terms of functions which led to creation of fourteen principles of management, which according to him has universal applicability. Henry Fayol is considered as “Father of modern theory of general and industrial management”.

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Fayol’s principles of Management:

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Criticism:

  1. Not applicable at all situations
  2. Theorist did not consider the external environment
  3. Fayol over emphasized the intellectual side of management

Bureaucracy

Max Weber contributed his views on bureaucracy to the management thought. His ideal bureaucracy has been designed to bring rationality and predictability of behavior in organizations.

He stated that there are three types of legitimate authority:

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Features:

  1. There is a proper delegation of authority
  2. Because of rules all actions are taken carefully and there is consistency of actions
  3. Behaviour of the employees are rational as they follow the rules and regulations.
  4. Leads to efficient organization.

Criticism:

  1. Rules bring in red tapism and could be the cause of inefficiency.
  2. Does not consider informal organization and inter-personal difficulties.
  3. Discourages innovation.
  4. It is a long process and layers of executive leading to unnecessary delays.

Review of classical theory:

Fundamental flaws of Classical theory are as follow:

  1. Narrow view of organization and over dependence on organization anatomy
  2. Assumption of closed system
  3. Assumptions about human behavior
  4. Economic rewards as Main motivator
  5. Lack of empirical verification
  6. Lack of universal application of principles
  7. Excessive emphasis on Rules and Regulations

Neo-Classical Theory

Neo-classical theory emphasizes more upon the human factor and importance of human element in an organization. Neo classical theory is based upon Hawthrone experiments conducted by Elton Mayo.

Basic tenets of neo-classical approach:

  1. Organisation is an social system
  2. Behaviour of individual depends upon the informal group he is part of.
  3. Social and psychological needs of employees has to be satisfied to improve motivation
  4. Welfare of workers
  5. Morale and productivity go hand in hand.

Findings of Hawthrone experiments:

  1. Every organization is a social system.
  2. Social environment in which the employee works affects his productivity.
  3. Informal organization exists among every formal organisation and is formally or informally affected by it
  4. Group dynamics: Workers often think and work as a member of the group, the group defines their behavior towards the work
  5. The informal leader sets and enforces the group norms.
  6. Two way communication is vital for effective functioning in an organization. Workers are more satisified when their opinions are heard and they are allowed to give feedback.
  7. When there arises conflict between organizational goals and group goals, it better solved through improvement in human relations.

Criticism:

  1. Lack of scientific validity
  2. Overemphasis on group
  3. Over-stretching of human relations
  4. Limited focus on work
  5. Over-stressing on socio-psychological factors
  6. Limited focus on work
  7. Conflict between individual goals and organizational goals.

Behavioral Science Approach

The knowledge drawn from behavioral science is applied to explain and predict human behavior.

Tenets of Behavioral science:

  1. Organisation is socio-technical system
  2. Individuals differ with regard to attitudes, perceptions and value systems. Their responses differ in different situations.
  3. People’s goal may differ from organsational goals and apt fusion between them is desirable.
  4. Many factors influence inter-personal and group behavior of people in organization.

Review of Behavioural Science approach:

  1. Study of human behavior has significant impact in management. Since a man is impacted by many psychological factors while working in an organization, its study is more important.
  2. Behavioural approach suggests how the knowledge of human behavior can be used in making people more effective in the organization.
  3. Behaviourist have enriched management theory with their contributions but have failed in developing integrated theory of management.
  4. While dealing with humans, exact prediction of the response/reaction is difficult.
  5. Behavioural guidelines though helpful and profitable, but are not complete, valid and applicable to all situations.

Quantitative Approach

Also called Mathematical, Operations Research or Management Science approach. This school uses scientific techniques to aid decision making. The techniques commonly used are Linear Programming, Critical Path Method, Programme Evaluation Review Technique, Games Theory, queuing Theory and Break Even Analysis.

Systems Approach

A systems viewpoint may provide the impetus to unify management theory . It could treat the various approaches, such as process, quantitative and bevioural ones, as subsystems in an overall theory of management. The systems approach may succeed where the process approach has failed to lead management out of the theory jungle.

Features of systems approach:

  1. Systems is goal- oriented
  2. Consists of many subsystems which are interdependent and interrelated.
  3. A system is engaged in processing of inputs to outputs
  4. An organization is open and dynamic system, and it has continuous interface with the external environment.
  5. A system has a boundary which seperates it from other systems.

 

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Features of systems Approach:

  1. Interdependent Subsystem
  2. Whole organization: systems approach provides the holistic approach with unified focus on organizational goals
  3. Synergy: Law of synergy states that the combined output of a system is more than the combined output of the parts.
  4. Multidisciplinary

Review of systems approach

  1. Acknowledges the environmental influence in the organization
  2. Represents balanced thinking on organization and management. It stresses importance of avoiding piecemeal approach by emphasizing the interrelationships in the organization
  3. Too abstract and vague, making it difficult to apply at practical situations.

Contingency Approach

Also known as situational approach. John Woodward began this approach in 1950s. The contingency theory stresses that there is no one best style of leadership which will suit every situation.  The effectiveness of one approach will differ in every situation.

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Evaluation of Contingency approach:

  1. Guides Managers to be adaptive to environmental variables
  2. Improvement over systems approach as it examines the relationship between organization and its environment.

Operational Approach

Koontz, O’Donnell and Weihrich advocated the operational approach to management. This approach recognizes that there is central core about managing which exists in management such as line and staff, patterns of departmentation, etc.

 

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