STAGES IN MANAGEMENT THOUGHT
I.
The Classical Theory of Management
1. Bureaucratic Model
2. Scientific Management
3. Process Management
II. The Neo-Classical Theory
1. Human Relations Movement
2. Behavioural Sciences Movement
III. The Modern Management Theories
1. Quantitative Approach
2. Systems Approach
3. Contingency Approach
EARLY APPROACHES TO MANAGEMENT
VARIOUS APPROACHES OF MANAGEMENT
• The Classical Approach ( traditionally accepted views) : This approach emphasizes
organizational efficiency to increase organizational success. It believes in functional relationship,
following of certain principles based on experience, a bureaucratic structure and reward-punishment
nexus.
• The neo-classical approach: It emphasizes human relations, individual as well as group relationships,
and social aspects. This approach was pioneered by Mayo and his associates. This was further extended
to behavioural sciences approach pioneered by Maslow, Chris Argyris, Douglas McGregor and Rensis
Likert.
• Modern management thought: It combines concepts of the classical school with social and natural
sciences. It basically emerged from systems analysis.
I. THE CLASSICAL THEORY OF MANAGEMENT
CONTRIBUTOR
PIONEERING
Robert Owen(1771-1858)
He is called as the father of ‘Modern Personnel
Management’. He advocated the necessity of concern
for the welfare of workers.
Charles Babbage(1792-1871)
As an inventor and a management scientist, he built
the practical mechanical calculator, which is
considered to be the basis of the modern computer.
Andrew Ure and Charles Duplin(1778-1857)
They emphasizes the necessity of management
education, which further paved the way to
professionalize management functions.
James Watt Jr. & Mathew Boulton (1796-1848)
Both of them were the sons of a distinguished inventor
of steam engine. They were managing solo Engineering
Foundary in Britain & developed a no. of management
techniques.
Henry Robinson Towne(1844-1924)
He emphasized the significance of skills in running a
business.
1. MAX WEBER (1864-1920) BUREAUCRATIC MODEL
A German Sociologist, was a teacher at Berlin University. He was the Chief exponent of
the Bureaucratic Model.
Characteristics of Weber’s ideal Bureaucracy:
• Work specification and division of labor
• Abstract rules and regulations:
• Impersonality of managers:
• Hierarchy of organization structure
2. F.W. TAYLOR’S SCIENTIFIC MANAGEMENT
He is called as the ‘Father of Scientific Management’ (1878).
He started his experiment with the concept of scientific management at Midvale Steel Co.
He saw that the employees were deliberately working at a pace slower than one capabilities.
He found three reasons behind it:
a) Fear of losing their jobs if they increase their output
b) Faulty wage systems
c) Outdated methods of working.
Two major managerial practices:

Piece-rate incentive system

Time-and-motion study
Principles of scientific
management
Elements of scientific
management
Replacement of Rule of Thumb
Work Study
Co-operation
Standardisation of Tools and Equipment
Development of Workers
Scientific Selection, Placement and Training
Maximum Output
Introduction of Functional Foremanship
Distribution of Work
Introducing Costing System
Mental Revolution
3. HENRY FAYOL’S ADMINISTRATIVE MANAGEMENT (1841-1925)
• He started his career as a junior engineer in a coal mine company in France and became its
General Manager in 1980.
• His contribution may be classified under three categories: classification of business activities,
functions of management, principles of management.
• It focused on principles that could be used by managers to coordinate the internal activities
of organizations.
14 PRINCIPLES OF MANAGEMENT
1. Division of labour: Division of work leads to specialisation resulting in higher output. This principle
recommends grouping of people as per their area of specialization. If people are specialized at their
work, they can perform their task better.
2. Authority: Managers must have the authority to issue orders and instructions to the subordinates. Yet ,
formal authority alone may not help to compel obedience from subordinates; managers must have the
expertise to exert personal authority.
3. Discipline: Discipline means respect for rules and agreements. People working in an organization need
to comply with rules and agreements that govern the organization. Without discipline results cannot be
achieved.
4. Unity of command: There should be one boss for one subordinate. Conflict will arise when one receives
order and instructions from multiple managers.
5. Unity of direction: All operations in an organization need to be directed towards one objective. Without
this achievement of goal cannot be ensured.
6. Subordination of individual interest to general interest: If there is a conflict between the individual goals
and organizational goals, preference should be given to organizational goals, i.e., individual goals should not
supersede the goals of the organization.
7. Remuneration: There should be a fair system of remuneration that ensures equal pay for equal work. It
should be fair to both employees and employers.
8. Centralisation: It refers to declining role of subordinates in the decision making. Though major decisions
are taken by the managers at the top level, but at the same time enough authority should be given to the
subordinates to do the jobs properly.
9. Scalar Chain (Hierarchy): This the line of authority running from top level to lower level of
management. It is also known as hierarchy of authority. It illustrated in the form of an
organizational chart clearly showing the structure of authority from the top management to
employees down the line.
10. Order: People and material should be in the right place at the right time. Fayol followed the
concept of ‘ A place for everything and everything in its place ‘. When human beings are kept at
the right place( right man at the right place) it is social order, and when non-human or material
resources are kept at the right place, it is material order.
11. Equity: Managers should be fair to their subordinates.
12. Stability of staff: Employee turnover should be less to ensure efficiency of an organization.
13. Initiative: Subordinates should have the freedom to conceive new ideas and do their task,
even though they commit mistakes.
14. Esprit de corps: ‘ Unity is strength’. People should work as a team to enjoy the benefits of
synergy.
II. NEO-CLASSICAL THEORY
1. Human Relations Movement
A. ELTON MAYO: He is recognized as the father of human relations approach. Mayo and his
associates conducted their study at Western Electric's Hawthorne Plant between 1927-1932,
to evaluate the attitude and psychological reaction of workers in on-the-job situation.
Hawthorne effect — workers’ attitudes toward their managers affect the level of workers’
performance.
Demonstrated the importance of understanding how the feelings, thoughts, and behavior of
work-group members and managers affect performance.
B. MARY PARKER FOLLETT:
She studied political science and economics at Harvard and Cambridge. She was
a social worker associated with educational, recreational and vocational
guidance centers.
She interpreted classical management principles in terms of human factor. Her
main concern was the efficient use of people.
She used the tool of psychology to answer various questions.
She had a reputation as a pioneer of human relations approach.
2. BEHAVIOURAL SCIENCES MOVEMENT
A. ABRAHAM MASLOW:
• An eminent U.S. psychologist, gave a
general theory of motivation known as
Need Hierarchy Theory. Human behavior is
goal-directed.
• The needs of individual serves as a driving
force in human behaviour. Therefore, a
manager must understand the “hierarchy
of needs”. Maslow has proposed “The Need
Hierarchy Model
• Once a need is satisfied, it declines in
importance and the next higher need is
activated
• There are opportunities for fulfillment off
the job and on the job in each of the five
levels of needs
B. DOUGLAS- McGregor:
He was a social psychologist and professor at Massachusetts Institute of Technology, U.S.A.
His famous works included: The Professional Manager, Leadership and Motivation, The Human Side of
Enterprise.
He is known for the development of a theory on Motivation, named as Theory X and Theory Y.
C. RENSIS LIKERT:
He was the Director of Institute of Social Sciences, Michigan, U.S.A.
He conducted extensive research for 14 years with the help of 40 researchers in the field of
leadership.
He classified management styles into the following categories:
i.
Exploitative Autocratic- no participation of workers
ii.
Benevolent Autocratic- no proper confidence in subordinates
iii.
Participative- subordinates are allowed to participate in decision making
iv.
Democratic- full confidence and meaningful participation by subordinates
D. CHESTER I BERNARD:
He was the President of New Jerray Bell Telephone Company. In his organization theory he
adopted a sociological approach and in dealings with the functions of executives, he emphasized
the importance of leadership and communication.
Contributions to Management Thought
1.
Theory of Formal Organisation
2.
Organisational Equilibrium
3.
Acceptance Theory of Authority
4.
Functions of the Executive
5.
Informal Organisation
E. PETER F. DRUCKER:
He was born in Vienna in 1909 and has varied experience. He served as newspaper
correspondent, an economist, a management consultant in different countries and was a
Professor of Philosophy and Politics, Professor of Management and Professor of Sciences.
Some of his most important contributions are as follows:
1.
Nature of Management
2.
Organisation
3.
Federalism
4.
Functions of Management
5.
Management by Objectives
6.
Futurity and Organisational Change
III. THE MODERN MANAGEMENT THEORIES
1.
QUANTITATIVE OR MATHEMATICAL APPROACH
This theory became an acceptable theory during world war II , when Britain wanted to solve the
problem of war. The problem was that the radar system did not perform well at field sites as it
performed at the testing stations. During the war managers, government officials, and scientists are
brought together to help the army to utilize the resources effectively. The experts solved many
logistic problems in the war. After the war, such techniques were used by the organizations to solve
their business problems. This school of thoughts uses statistics, optimization models, information
models, and computer simulation to solve business problems. It has various branches , such as
a) Management science b) Operations Management c) Management information system
Management Science approach: Also known as the operation research approach, which is applied in
the areas like capital budgeting, production scheduling, product strategy management, human
resource planning and inventory management.
The operations management approach: is primarily concerned with production management
and its related areas. This approach is helpful in decision making in the functional areas like
finance, marketing and human resource management.
The management information system approach focuses on designing and implementing
computer based information systems for use by management.
2. THE SYSTEMS THEORY APPROACH
The systems approach defines a system as a set of interrelated and interdependent parts
arranged in a manner that produces a unified whole. Societies are systems and so, too, are
computers, automobiles, organizations, and animal and human bodies.
Open System
• A system that takes resources for its external environment and transforms them
into goods and services that are then sent back to that environment where they
are bought by customers.
THE OPEN SYSTEM VIEW
Inputs: the acquisition of
external resources to produce
goods and services
Conversion: transforms the
inputs into outputs of finished
goods and services.
Output: the release of finished
goods and services to its
external environment.
Closed System
• A self-contained system that is not affected by changes in its external environment. The
organisation provides a boundary or a closes subset which separates it from other systems.
3. CONTINGENCY OR SITUATIONAL APPROACH
This was developed by J.W. Lorsch and P.R. Lawrence in 1970 who were critical of other
approaches presupposing ‘one best way to manage’. Management problems are different under
different situations and need to be tackled as per the demand of the situation. One best way of
doing may be useful for repetitive things but not for managerial problems.
A manager should study to find out the method that fits into the situation and helps in precise
realization of goals of the enterprise.
• There is no one best way to organize”
• The idea that the organizational structures and control systems manager choose depend on—
are contingent on—characteristics of the external environment in which the organization
operates.