Evolution of management thought
Evolution of Management Theories
1.The Classical theory of management
Scientific Management
•Bureaucratic Management
•Administrative Management
2.Neo-Classical Theory
•Human Relations
•Behavioral Science Approach
3.The Modern Management Theories
•Quantitative Approach
•System Approach
•Contingency Approach
•Operational Approach
Early approaches to Management
The Industrial Revolution, which began
in Europe in the mid-1700s, was the
starting point for the development of
management concepts and theories.
Classical Approach
Classical management can be divided into
three separate schools:-
Scientific management – F.W. Taylor
Administrative theory – Henry Fayol
Bureaucratic management – Max Weber
Overview of classical theories
Approach Rationale Focus
Scientific One best way to do Job level
management each job
Administrative One best way to put Organizati
principles an organization onal level
together
Bureaucratic Rational and Organizati
organization impersonal onal level
organizational
arrangements
Classical Approach
These views are labeled as classical
because they form the foundation for the
field of management thought.
Scientific management
Itis an approach that emphasizes the
scientific study of work methods to
improve the efficiency of workers.
It became popular in 1900s.
Scientific management
F.W. Taylor was known as the ‘father of
scientific management.’
Midvale Steel Co.
Soldiering
To counter the soldiering problem Taylor
developed the science of Management.
Four Principles of Scientific
Management
1) Study the ways jobs are performed now and
determine new ways to do them.
Gather detailed time and motion information.
Try different methods to see which is best.
BnR-Peng.Manajemen-Chap-05 12
Four Principles of Scientific
Management
2) Codify the new methods into rules.
Teach to all workers
the new method.
BnR-Peng.Manajemen-Chap-05 13
Four Principles of Scientific
Management
3) Select workers whose skills match the
rules.
4) Establish fair levels of performance and
pay a premium for higher performance.
Workers should benefit from higher output
BnR-Peng.Manajemen-Chap-05 14
F.W.Tayler’s Contribution(1856-1915)
Father of Scientific Management
Principles of F.W.Tayler’s Management
•Scientific task setting based on time, motion and fatigue study.
•Fitting the “right person for the right job” by proper selection, training
and placement of personnel.
•Improvement in work by
Standardisation of tools and equipment
Improvement in work environment
• Employers and employees should not feel that they are
exploiting each other(Mental revolution)
• Differential piece rate wage system to distinguish between
efficient and inefficient workers( Tayler’s Differential
Piece Rate Plan)
• Intelligent investigation and analysis of the different unit of
the business.
• Scientific study of each unit of the business.
• Separation of the planning and execution based on
specialisation.
Frank and Lillian Gilbreth
•He concentrated on Motion Study and suggested the
first definition-“motion study as the science of
eliminating wastefulness resulting from unnecessary, ill
directed and inefficient motions”
•He developed Process Chart-Over all picture of all
activities in a chart form.
BnR-Peng.Manajemen-Chap-05 17
Studied fatigue caused by lighting, heating, and
the design of tools and machines.
Time and motion studies
Breaking up each job action into its components.
Finding better ways to perform the action.
Reorganizing each job action to be more efficient.
Contributions of Henry L.Gantt
Worked with F.W.Tayler
He Improved Taylor’s differential piece
rate system
Task and Bonus Plan ((Provide extra
wages for extra work)
He developed the daily balance chart
(Gantt chart) output in one axis and
time on the other axis.
Humanistic approach and industrial
responsibility.
SCIENTIFIC MANAGEMENT
•F.W.Tayler- Father of Scientific Management
•Main contributors- F.W.Tayler, Frank Gilbreths,
Gantt
Principles of Scientific Management
Replacement of old rule of thumb method
Scientific selection and training
Labor-Management co-operation(mental revolution)
Maximum output
Equal division of responsibility
Techniques of Scientific Management
•Scientific task setting-fair day’s work
•Work study-method, time, fatigue and motion study
•Planning the task
•Standardisation
•Scientific selection and training
•Differential piece-wage plan
•Specialisation
Scientific management
The two major managerial practices that
emerged from Taylor’s approach :-
Piece-rate incentive system
Time-and-motion study
Criticism of Scientific Management
•Functional organization structure (An operator is controlled by
eight foremen)– In practice and violates unity of command.
•It concentrated on production management and ignores the area
of Finance, Marketing, Accounting and Personnel.
•Workers objected Tayler’s Differential piece wage plan
•because wages of workers are not increased in direct proportion
to the increase in productivity.
•It undermined the human factor in industry. It resulted in
monotony of job, loss of initiative, wage reductions, job insecurity
etc.
Limitations of scientific management
Scientific management focus on problems
at operational level.
People are motivated only by material
gains.
Itignored human desire for job
satisfaction.
Administrative Theory
Itfocused on principles that could be used
by managers to coordinate internal
activities of organization.
Henry Fayol – French
According to Fayol, the business
operations of an organization could be
divided into 6 activities
Administrative Theory
The 6 activities are :-
Technical
Commercial
Financial
Security
Accounting
Managerial
Fayol’s 14 principles of Management
Division of work
Authority and responsibility
Discipline
Unity of command
Unity of direction
Subordination of the individual interest to
the general interest.
Fayol’s 14 principles of Management
Remuneration
Centralization
Scalar chain
Order
Equity
Stability of tenure of personnel
Initiative
Espirit de corps
Bureaucratic Management
Max Weber
Major characteristics of Bureaucracy
Hierarchy of organization
Work specialisation and division of
labour
Formal Selection
Carrer Orientation
Rules and regulations
Limitations of bureaucratic and
administrative management
Not universally accepted principles.
Bureaucracy destroyed individual
creativity and flexibility.
Important aspects of O.B. was ignored.
External and internal environment
ignored.
Behavioral Approach
The behavioural school of management
emphasized what the classical theorists
ignores – The human element.
Elton Mayo : Focusing on Human
Relations
Father of the Human Relations Approach
Western Electric’s Hawthorne Plant
Elton Mayo : Focusing on Human
Relations
The experiments were conducted in four
phases:
Illumination experiment
Relay assembly test room experiment
Interview phase
Bank wiring observation room
experiment
Contributions of Hawthorne studies
The group is the key factor in job
performance
Perceived meaning and importance of the
work determine output
Workplace culture sets its own production
standards
Criticism of Hawthorne studies
Criticsfelt that the conclusions were
supported by little evidence.
The relationship made between
satisfaction of workers and productivity
was too simple.
The studies failed to focus on the atitudes
if employees.
Abraham Maslow : Hierarchy of needs
People are motivated by a hierarchy of
needs
His theory had three assumptions
All of us have needs which are never
fulfilled
Through our actions we try to fulfill our
unsatisfied needs
Needs can be classified into 5 types
Abraham Maslow : Hierarchy of needs
According to Maslow, once needs at a
specific level have been satisfied, they no
longer act as motivators of behaviour.
Then individual strives to fulfill needs at
the next level.
Douglas McGregor : Theory X and
Theory Y
These theories reflect two extreme sets of
belief that different managers have about
their workers.
Theory X represents an essentially
negative view.
Theory Y reflects a more positive view.
Chris Argris : Matching human and
organizational development
Maturity –immaturity theory
Model I and Model II
Model I – Employees are manipulative
and not willing to take risks
Quantitative approach
1.Management science
Another name for it is operations research
2. Operations management
3. Management information systems
Modern approaches to management
1. Systems approach
Organizations cannot exist in isolation
Four major components – Inputs,
transformation process, output and
feedback
Open and closed systems
Modern approaches to management
2. Contingency theory
Situational theory
Emerging Approaches in Management Thoughts
William Ouchi – theory Z
Conducted research on both American and
Japanese management approaches
TheoryZ involves providing job security to
employees to ensure their loyalty
Quality management
