EVOLUTION OF MANAGEMENT THEORY

Classical Approach Human Relations Approach Behavioural Science or Neo-human Relations Approach Quantitative Management Approach Systems Approach Contingency Approach Modern Approach

Classical Approach
Scientific Management Frederick Winslow Taylor (1856 - 1915)

Administrative Management Henry Fayol (1841 1925 )

Bureaucracy - Max Weber

(1864- 1920)

Scientific Management
Develop science for jobs to replace the rule of thumb Scientific selection and training of employees Supervision to find the performance of employees at work Plan the work and get it done through employees

Administrative Management
Division of work Authority Discipline Unity of command Unity of direction Subordination of individual interest to organisations interest Remuneration Centralisation Scalar chain Order Equity Stability of tenure Initiative Esprit de corps

Henry Fayols industrial activities

1. Technical (Production), 2. Commercial (Buying and Selling), 3. Financial (Optimum use of resources), 4. Security( Protection of person and property), 5. Accounting( Including statistics), 6. Managerial ( Planning, Organising, Command, Coordination and Control)

Bureaucracy
Administrative class Division work Hierarchical authority structure Traditional authority Charismatic authority Rational / Legal authority Official rules Impersonality Official records

Human Relations Approach Neo-Classical Approach

Elton Mayo Hawthorne experiment - 1927-1932 Started in Nov.1924 Test group and Control group Conclusion - Importance of people and their individual motivations for the management of organisations

Behavioural Science or Neohuman Relations Approach

Douglas McGregor Theory X Traditional assumptions about people:
1. Most people dislike work, and try to avoid it if possible. 2. Most people are unambitious; they avoid responsibility and prefer to be directed. 3. Most people must be coerced and threatened with punishment before they work. They are selfish and

have no concern for organizational objectives.

Douglas McGregor
Theory Y Modern assumptions about people: 1. People work as naturally as they play or take rest
2. People are self directed and self controlled 3. People are committed to organisations objective when they are rewarded. 4. Average person can learn to seek responsibility. 5. People are capable of being innovative in solving organisational problems. 6. People are wise, but their potentials are often underutilised in organisational conditions.

Rensis Likert
System 1 Exploitative Autocrat No confidence on subordinate System 2 Benevolent Autocrat - Some confidence on subordinate System 3 Participative - Substantial confidence on subordinate System 4 Democratic - Full confidence on subordinate

Chris Argyris
Unintended consequences between the needs of individual and needs of organisation give rise to informal group organisation Stages of human growth in organisation Dependency ( that was in childhood) Maturity ( that was in adulthood ) Self-actualisation - where he set his own goals and tried to achieve them

Quantitative Management Approach

Developed by Prof. P.M.S.Blackett and his group applied certain mathematical approaches to logically solve war problems during World War II. Presently used by Du Pont and General Electric for selection of employees, plant locations and planning for management. The approach mostly used for decision-making and for economic effectiveness.

Quantitative Management Approach

Management Science - This approach was mainly focused on development of mathematical models for problem solving. Example - linear programming, game theory, time series analysis and simulation models Operations management This approach was less mathematical and more of the nature of applied management science. Example - Economic Order Quantity, Determining the minimum, maximum and re-order level of inventory.

Social Systems Approach

Developed by Chester I. Bernard Formal Organisation- comprised people willing to work for a common goal. There is conscious coordination and interaction for a common purpose Informal Organisation - social interactions that may not be for a common purpose

Systems Approach
Developed by Ludwig Von Bertalanffy in 1950 Input-Process-Output-Feedback open system is a set of elements standing in interaction with environment closed system does not interact with environment Transformation Process is the technology, production system, administrative and control system to convert input into output.

Contingency Approach
Developed by Burns and Stalker, Woodward, Lawrence and Lorsch and Perrow. It is a combination of Traditional, Behavioural and Social view points Managers use other view points to solve problems relating to : : Environment Technology Individual

Modern Approach
Peter F. Drucker was born in Vienna in 1909 Management by Objective (MBO) in 1954 Federalism - where the organisation will have
decentralised structure with centralised control

Basic aspects of organising

Activity analysis (identifying the right activity) Decision analysis (analyzing the impact and quality of a decision) Relation analysis (understanding the organisation structure).