Module 2

Development of Management
thought
Modern
management
approaches

Early management
approaches

Industrial Revolution

Adam Smith
division of labor
Venetian business
enterprises and
their management
practices

1400

1700

1800

1900- 1950

Post 1950

The Pre-modern Era

Ancient Massive Construction

Projects

Egyptian pyramids
Great Wall of China

Michelangelo, the Manager.

Adam Smiths Contribution

to the Field of Management

Wrote the Wealth of Nations (1776)

Advocated the economic advantages

that organizations and society would
reap from the division of labor:
Increased productivity by increasing each
workers skill and dexterity.
Time saved that is commonly lost in
changing tasks.
The creation of labor-saving inventions and
machinery.

The Industrial Revolutions Influence

on Management Practices

Industrial Revolution

Machine power began to substitute for

human power

Improved and less costly transportation

systems became available

Lead to mass production of economical goods

Created larger markets for goods.

Larger organizations developed to serve

larger markets

Created the need for formalized management

practices.

Classical Contributions

Classical Approach

The term used to describe the

hypotheses of the scientific
management theorists and the
general administrative theorists.
Scientific management theorists
Fredrick W. Taylor, Frank and Lillian
Gilbreth, and Henry Gantt
General administrative theorists
Henri Fayol and Max Weber

Development of Management
thought

Evolution of management thought can be studied in

three broad categories:
Early classical approaches,represented management
approaches (Scientific management, administrative
management and Bureaucracy)
Neoclassical approaches represented by human
relations movement and behavioural approaches
Modern management approaches represented by
quantitative, systems and contingency approaches) .

Scientific Management

Fredrick W.Taylor (1856-1915)

father of scientific management

An approach that emphasizes the

scientific study of work in order to
improve worker efficiency.
Contributions by Taylor: Scientific
task planning, Time and Motion
study, Standardization, Differential
Payment , functional foremanship.

Scientific Management
Basics of Scientific Management
( 4 principles)

Each task must be scientifically designed

so that it can replace the old, rule of
thumb methods.
Workers must be scientifically selected
and trained so that they can be more
productive .
Bring the scientifically designed jobs and
workers together so that there will be a
match between them.
Division of labor and cooperation
between management & workers.

Scientific Management
Taylor summed up his approach in these
words:
i.
Science, not rule of thumb
ii.
Harmony, not discord
iii.
Cooperation , not individualism
iv.
Maximum output in place of restricted
output
v.
Development of each man to his
greatest efficiency
vi.
Equitable division of work

Scientific Management
Limitations:
i.

Exploitative device

ii.

Depersonalized work

iii.

Unpsychological

iv.

Undemocratic

v.

Antisocial

vi.

Unrealistic

Scientific Management
Contributors

Frank and Lillian Gilbreth

Bricklaying efficiency improvements

Time and motion studies (therbligs)

Henry Gantt

Incentive compensation systems

Gantt chart for scheduling work
operations

Administrative Management
Theory

Henry Fayol(1841-1925) developed this

theory.
Focuses on principles that can be used by
managers to coordinate the internal
activities of organizations.
Explains the process of managing an
organization from the top managerial
perspective.
Five functions to be performed by
managers:
planning,
organizing,
Commanding, Coordination, Controlling.

Administrative Management
Theory

Managers should apply 14 principles

at the operational level:

Division of work

Authority and Responsibility

Discipline

Unity of Command

Unity of direction

Subordination of individual interest to the

common good

Administrative Management
Theory

Remuneration of Personnel
Order
Centralization
Scalar Chain
Equity
Stability of tenure
Initiative
Espirit de Corps

Administrative Management
Theory
Limitations:

Lack of empirical evidence

Neglect of human factors

False assumptions

Pro-management bias

Historical significance

Human Relations Theory

Elton Mayo(1880-1949) contributed to this

theory.
It is a movement in management thinking
and practice that emphasized satisfaction
of employees basic needs as the key to
increased worker productivity.
Compensated the deficiencies in scientific
management
and
administrative
management.
Gained popularity after studies of human
behavior at work situations during 192433.

Human Relations Theory

Hawthorne Studies: A group of studies

conducted at the Hawthorne plant of
Western

Electric

company

whose

results ultimately led to the human

relations view of management.

Illumination Experiment: Test group Vs

Control

group,

Productivity.

Illumination

Vs

Human Relations Theory

Hawthorne Effect: The possibility that

individuals singled out for a study may
improve their performance simply
because of the added attention they
receive from the researchers, rather
than because of any specific factors
being tested.
Bank wiring Experiment: Group norms
influencing individual behavior Vs
Economic incentives.

Human Relations Theory

Key Concepts:
The individual-not only motivated by
economic factors but also by social &
psychological factors.
The work group-workers find satisfaction in
the member ship of social groups.
Work environment-to be conducive for both
organizational and personal growth.
The leader-should
climate.

provide

participative

The Human Relations Movement

Pyramid

Human Relations Theory

Criticisms:

Philosophy preaches collaboration not

competition- psychology
Concerned
employees

only

Over
concern
productivity link

Anti individualistic

Not

with
on

operative

happiness

scientifically

designed

Behavioral Approach

Developed as a natural evolution

to Hawthorne Experiments.
Hawthorne studies stressed on
emotional elements to explain
human
behavior
and
performance.
Behavioral approach emphasizes
on scientific research as the basis
for developing theories about
human
behavior
in
the
organizations that can be used to
develop practical guidelines for
managers.

BEHAVORIAL MANAGEMENT

McGregor

McGregors The Human Side of

Enterprize

Separated managers into two beliefs /

styles
1.

Theory X Managers

2.

Believe employees generally dislike work, lack

ambition, act irresponsibly, resist change and prefer
to follow.
Use classical directive command and control style

Theory Y Managers

Believe employees are willing to work, capable of

self control and self direction, responsible and
creative

Behavioral Approach

Contributors: Abraham Maslow, Chris Argyris,etc

Also called as Human Resources approach.
Contributions:
Individual motivation, group behavior
Foundation to HRM
Job enrichment
MBO
Positive reinforcement

Behavioral Approach

Limitations:

Self actualizing view

Compatibility of individual & organization

Discounted the non human aspects of

organization

Best of managing is humanizing

organizations

Quantitative Approach

Features
Offers quantitative aids to decision making,
develops quantitative tools to assist in
providing products and services.
Managerial Choices depend on criteria such
as costs, revenues, ROI, etc
Emphasis
on
computers
and
their
assistance in decision making alternatives.
Promotes holistic view of factors influencing
decision making

Quantitative Approach
Eliminates subjective thinking in decision
making
Minimizes bias in decision making
Aids in objective rational decision making.
Limitations:
All variables influencing decision cant be
identified.
Less importance to human relationships
Decision quality depends on the data
inputted to the computer.

Systems Approach

Integrated approach to management

problem solving and decision making
Advocates: Chester Barnard, George
Homans
Key Concepts of this approach:
System is a set of interdependent
parts
Concept of holism
System can be open or closed
System has a boundary

Systems Approach

Tries to solve problems by

diagnosing them with in a frame
work of inputs, transformation
processes, outputs and feed back
Good balance between the needs
of various functional parts of the
enterprise and goals of the firm as
a whole.
Conceptual
frame
work
to
understand organization is too
abstract.
Does not identify situational
differences and factors

Environment

A
D

E
Sub-systems

System Approach

Environment

Contingency Approach

Also termed as Situational approach

Based on the premise that situations
dictate managerial action
Advocates: Selznic, Woodward, James
Thompson
Appropriate managerial action depends on
the particular parameters of the situation
Spells out the relationship of the
organization to its environment
Concerned with structural adaptations of
organizations to its task environment.

Contingency Approach

More pragmatic and action oriented.

Integrates theory and practice in a
systems framework
Advocates the managers to develop skills
for situational analysis
Limitations:

Paucity of literature & Complex

Defies empirical testing

Reactive

Not holistic in nature

References

Principles of Management-P C Tripathi, P N Reddy; 3rd

Edn.,TMH

Management-Stephen Robbins; 8th Edn.,PHI

Management-VSP Rao, V H Krishna; Excel

Essentials of Management-Koontz,Weihrich;5th Edn.,TMH

Management James A F Stoner, R Edward Freeman, Daniel R

Gilbert;6th Edn., PHI

Principles of management: a modern approach-Henry Albers,

4th Edn,,John Wiley & sons

Fundamentals of management-Donnelly, Gibson,Ivancevich ,

10th Edn,.Irwin Mc Graw

Web References

www.12manage.com
www.cliffsnotes.com
www.swlearning.com
www.gutenburg.org
www.cheathouse.com
en.wikipedia.org
www.business.com
www.businessmanagement.suite101.com
www.greatmanagement.org
unpan1.un.org
www.harehall.co.uk