Major Approaches to Management

MANAGEMENT
Schools of Thought

LPS

Egyptian Pyramids Buddhist Vihara

(Monastery)

Nalanda
Mahavihara

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 Buddhist Vihara Industrial Revolution
(Division of Work) British
I. PERMANENT OFFICERS

A. Connected with the commissariat

i. Bhandagarika (storeroom keeper)
ii. Kappiya-karaka (officer assigned to
determine what is and is not allowable; he
converted gifts of money into "goods“)
iii. Bhattuddesaka (apportioner of food)
iv. Yagu-bhajaka (distributor of congee)
v. Phala-bhajaka (distributor of fruit)
vi. Khajjaka-bhajaka (distributor of solid food)
II. TEMPORARY OFFICERS
A. Navakammika (superintendent of
buildings - including repairs)
B. Kathina-vattharaka (distributor of
robes)
C. Salaka-gahapaka (receiver of voting
tickets)

B. Connected with chambers, wardrobe III. MISCELLANEOUS OFFICERS

i. Senasana-panhapaka (assigner of lodgings)
ii. CTvara-patiggahaka (receiver of robes) A. Panlya-varika (officer in charge of
iii. CIvara-bhajaka (distributor of robes) drinks)
iv. Satiya-gahapaka (receiver of bathing clothes) B. Bhajana-varika (officer in charge of
v. Patta-gahapaka (receiver of alms bowls) vessels)
vi. Appamattaka-vissajjaka (disposer of trifles) C. Upadhivara (steward)
D. Parisanda-varika (officer in charge
C. Superintendents of groves)
i. Aramika-pesaka (supdt of workers) E. Mundasenasana-varika (officer of
ii. Samanera-pesaka (supdt of novices) lodgings not in use)

Industrial Revolution Adam Smith

Economic Political Social Changes (1723-1790)
ECONOMIC Expansion of world trade
Factory system
Mass production of goods
Industrial capitalism
 “The Father of Economics'' or ''The Father of Capitalism”
Increased standard of living  Scottish economist, philosopher and author as well as a moral
Unemployment
philosopher, a pioneer of political economy.
POLITICAL Decline of landed aristocracy
Growth and expansion of democracy  He laid the foundations of classical free market economic theory.
Increased government involvement in society
Increased power of industrialized nations
 Pioneered concepts of “Division of Labour” and “Invisible Hand”.
Nationalism and imperialism stimulated  “The Wealth of Nations” is his magnum opus and the first modern
Rise to power of businesspeople
work of economics.
SOCIAL Development and growth of cities
Improved status and earning power of women
Increase in leisure time
Population increases
Problems – economic insecurity, increased deadliness of war, urban slums…
Science and research stimulated

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Scientific Management
The systematic study of the relationships between people and tasks for the The Evolution of Management Theory
purpose of redesigning the work process for higher efficiency.

Administrative Management
The study of how to create an organizational structure that leads to high
efficiency and effectiveness.

Behavioral Management
The study of how managers should behave to motivate employees and
encourage them to perform at high levels and be committed to the
achievement of organizational goals. Focuses on the way a manager should
personally manage to motivate employees.

Management Science Theory

An approach to management that uses rigorous quantitative techniques to
maximize the use of organizational resources.

Organizational Environment
The set of forces and conditions that operate beyond an organization’s
boundaries but affect a manager’s ability to acquire and utilize resources.

Frederick Winslow Taylor

Capitalist
Philosophers
(1856-1915)
Taylor
(USA)
Taylor Follett Barnard  “The Father of Scientific Management”.
 Worked at the Midvale Steel Company. From shop clerk up to the
chief engineer.
 Worked as a consultant for different factories.
Mayo Maslow McGregor  Increased efficiency & productivity (work design).
 Decreased cost (production control).

Deming McNamara Simon

 Wrote the book “The principles of scientific management” (1911).
 First person to make systematic attempt to improve both quality
and work life in factories.
Sloan Chandler Drucker

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 Principles of Scientific Management
Taylor
Gathering of knowledge
“…gathering together of the great mass of traditional knowledge which, in the
past, has been in the heads of the workmen…”
Selection and development of workmen
“...the scientific selection of the workman and his progressive development…”
Bringing together the science and the man
“Offer him a plum, something that is worthwhile… Whenever a man will not do
what he ought, make him do it or let him get out.”
The division of work
“Under the old scheme almost all the work was done by the workmen. Under
the new…one of those sections is handed over to management…”
(From a talk given by F.W. Taylor in 1915 in Cleveland)
Fayol’s 14 Principles of Management
Henri Fayol
Principles
1. Division of work. Specialization increases output by making employees more
efficient.
2. Authority. Managers must be able to give orders, and authority gives them this
right.
3. Discipline. Employees must obey and respect the rules that govern the
organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide
managers and workers.
6. Subordination of individual interests to the general interest. The interests of
any one employee or group of employees should not take precedence over the
interests of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
Henri Fayol
(1841-1925)
Henri Fayol
 “Father of Administrative Management Theory.”
 He was a French mining engineer. Later he turned out to be a
leading industrial and successful manager.
 He wrote a monograph in French in 1916 titled “General and
Industrial Administration”.
 Developed a general theory of business administration that is often
called Fayolism - a theory of management that analyzed and
synthesized the role of management in organizations.
Fayol’s 14 Principles of Management
Principles
8. Centralization. This term refers to the degree to which subordinates are
involved in decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks
the scalar chain.
10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel. Management should provide orderly
personnel planning and ensure that replacements are available to fill
vacancies.
13. Initiative. Employees allowed to originate and carry out plans will exert high
levels of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within
the organization.
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 Max Weber Weber’s Bureaucracy:
(1864-1920) Characteristics
Bureaucracy: A form of organization characterized by
Max Weber Max Weber
division of labor, a clearly defined hierarchy, detailed rules
 “Founder of the Bureaucratic Theory” and regulations, and impersonal relationships

 He was a German sociologist, philosopher, jurist, and political

economist.
 His ideas profoundly influenced social theory and social research.
Weber is often cited, with Émile Durkheim and Karl Marx, as among
the three founders of sociology.
 Authored: “The Protestant Ethic and the Spirit of Capitalism”, 1905
 Hinduism in India, like Confucianism in China, was a barrier for
capitalism. The Indian caste system made it very difficult for
individuals to advance in the society beyond their caste [“Hinduismus
und Buddhismus”, 1916]

Early Organizational Behaviour Advocates Mary Parker Follett

(1868-1933)
Follett

 “The Mother of Post-Scientific Management”.

Robert Owen
 Defined management as ”the art of getting things done through
Hugo
Munstenberg people”.
 She recognizes that informal systems exist within firms and
that they are not entirely negative as Taylor saw them. She
rejected the concept that position and formal authority were
effective in getting the best results.
 Her thesis, “The Speaker of the House of Representatives”.
She applied to Harvard but denied entrance to the university
on the basis that she was a woman.
Barnard  First women ever invited to address the London School of
Economics, spoke on cutting-edge management issues.
 US President Theodore Roosevelt sought her advice as his
Follett personal consultant on managing NGOs.

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  Held a horizontal view of power and authority in organizations.
Chester Barnard
(1886 – 1961)
 Suggested workers help in analyzing their jobs for improvements - the
Follett Barnard
worker knows the best way to improve the job.
 “The Philosopher King of American Management”
 If workers have relevant knowledge of the task, then they should control
the task.
 He worked as President, New Jersey Bell Telephone (later AT&T).
 Saw the down-side of Taylor’s division of labor approach as it removed
social bonds and created individualists.
 Author of Functions of the Executive, in which he presented a theory
 Committed to participatory democracy and the empowerment of of organization and the functions of executives in organizations.
workers.
 Critical of Taylor, suggesting that his ideas ignore democratic principles.  He looked at organizations as systems of cooperation of human
activity, and was worried about the fact that they are typically rather
 Believed in co-operation of managers and employees.
short-lived.
 “Management is a responsible discharge of necessary functions, not the
privilege of elites.”
 Firms that last more than a century are rather few, and the only
organization that can claim a substantial age is the Catholic Church.

“The theory of authority” and Elton Mayo

“The theory of incentives”. (1880 - 1949)
Mayo
Barnard

 Both the theories are seen in the context of a communication system

that should be based in some essential rules:
 Everyone should know of the channels of communication
 Everyone should have access to the formal channels of communication
 Lines of communication should be as short and as direct as possible.
 What makes a communication authoritative rests on the subordinate
rather than in the boss. One might say that managers should treat
workers respectfully and competently to obtain authority.
 There are two ways of convincing subordinates to cooperate: tangible
incentives and persuasion. He gives great importance to persuasion,
much more than to economic incentives.
 The Founder of the Human Relations Movement.
 He is known for his research including the Hawthorne Studies,
and his book The Social Problems of an Industrialised
Civilization (1933).
 The research he conducted under the Hawthorne Studies of the
1930s showed the importance of groups in affecting the
behaviour of individuals at work.
 It was not Mayo who conducted the practical experiments but
his employees, Roethlisberger and Dickinson.

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 Hawthorne Effect
Mayo
Maslow
 The Hawthorne studies at Western Electric in Chicago examined the
effects of human factors on productivity.
 Quite by accident, the researchers discovered two surprising but
fundamental principles that added a new dimension to the theory of
management and organization.
 We tend to get what we evaluate, which is to say that people who
know they are the subjects of study tend to behave according to
what they believe the researchers want to see. This is the
Hawthorne Effect.
 Formal bureaucracy notwithstanding, an informal organization is at
work controlling work flow and productivity.
Abraham Maslow (1908 - 1970)
Douglas McGregor (1906 - 1964)
McGregor
Maslow:
 Member of the Chicago dynasty of psychologists and sociologists
 Published theory of human motivation in 1943
 Known as a humanistic psychologist - Humanists focus upon potentials.
McGregor:
 Management professor at the MIT Sloan School of Management
 His book, The Human Side of Enterprise (1960)
 Identified an approach of creating an environment within which
employees are motivated via authoritative, direction and control or
integration and self-control.

Maslow: Hierarchy of Needs Douglas McGregor

Theory X and Theory Y
Maslow McGregor

Douglas proposed the two different sets of assumptions about workers.

Theory X assumes the average worker is lazy, dislikes work and will do
as little as possible.
• Managers must closely supervise and control through reward and
punishment.
Theory Y assumes workers are not lazy, want to do a good job and the
job itself will determine if the worker likes the work.
• Managers should allow workers greater latitude, and create an
organization to stimulate the workers.

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 Quality Management W. Edwards Deming
CHARACTERISTIC: (1900 - 1993)
Deming

1. Intense focus on the customer. The customer includes outsiders who buy the
organization’s products or services and internal customers who interact with and serve others  “Father of the Japanese post-war industrial revival” and regarded as
in the organization.
2. Concern for continual improvement. Quality management is a commitment to never the leading “quality guru” in USA.
being satisfied. “Very good” is not good enough. Quality can always be improved.
 Statistician, Allied Mission to Observe the Greek Elections (1946)
3. Process focused. Quality management focuses on work processes as the quality of
and services is continually improved.
 Consultant in sampling to the Government of India (1947; 1971)
4. Improvement in the quality of everything the organization does. This relates to the
final product, how the organization handles deliveries, how rapidly it responds to complaints,  Teacher and consultant to Japanese industry, through the Union of
how politely the phones are answered, and the like.
5. Accurate measurement. Quality management uses statistical techniques to measure Japanese Scientists and Engineers (1950-55, 1965)
critical variable in the organization’s operations. These are compared against standards to
identify problems, trace them to their roots, and eliminate their causes.  Member of the United Nations Sub-Commission on Statistical
6. Empowerment of employees. Quality management involves the people on the line in the Sampling (1947-52)
improvement process. Teams are widely used in quality management programs as
empowerment vehicles for finding and solving problems.  Lecturer, London School of Economics (1964)
Total quality management (TQM): a philosophy of management that is driven by
continuous improvement and responsiveness to customer needs and expectations

1. Create and communicate to all employees a statement of the aims and purposes
of the company. Herbert A. Simon
2. Adapt to the new philosophy of the day; industries and economics are always
(1916 - 2001)
changing. Deming Simon

3. Build quality into a product throughout production.

4. End the practice of awarding business on the basis of price tag alone; instead, try
a long-term relationship based on established loyalty and trust.
5. Work to constantly improve quality and productivity.
6. Institute on-the-job training.
7. Teach and institute leadership to improve all job functions.
8. Drive out fear; create trust.
9. Strive to reduce intradepartmental conflicts.
10. Eliminate exhortations for the work force; instead, focus on the system and morale.
11. (a) Eliminate work standard quotas for production. Substitute leadership methods
for improvement. (b) Eliminate MBO. Avoid numerical goals. Alternatively, learn the
capabilities of processes, and how to improve them.
12. Remove barriers that rob people of pride of workmanship
13. Educate with self-improvement programs.
14. Include everyone in the company to accomplish the transformation.
 Nobel Prize winner in 1978 (for his contributions to economic thought).
 American political scientist whose research ranged across the fields of
cognitive psychology, computer science, public administration,
economics, management, and philosophy of science. A professor at
Carnegie Mellon University.
 Simon was not only a polymath, but a truly innovative thinker. He was
among the founding fathers of several of today's most important scientific
domains, including Artificial Intelligence, information processing,
decision-making, problem-solving, attention economics, organization
theory, complex systems, and computer simulation of scientific discovery.
 He coined the terms “bounded rationality” and “satisficing”,

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 Decision-Making Alfred Sloan (1875 - 1966)
Sloan
Simon
 “Inventor of the Modern Corporation”

 President (1923), and Chairman of the Board (1937) of General Motors.

 Credited with establishing annual styling changes, from which came the
concept of planned obsolescence.

 Sloan invented the multidivisional firm, which came to be regarded as

the best way to organize large corporations.

 Famous quotes: "The business of business is business.“ “A car for

every purse and purpose.”

 Ford dominated its market with the invention of the assembly line. Then
Sloan invented new business models and management methods that
catapulted GM into the top spot.

Alfred DuPont Chandler, Jr. (1918 - 2007) Robert S. McNamara

Chandler (1916 - 2009 )
McNamara

 Chandler is a professor of business history at Harvard Business

School, who has written extensively about the scale and the
management structures of modern corporations.
 Chandler began looking at large-scale enterprise in the early 1960s.
His book, “Strategy and Structure”, found that managerial organization
developed in response to the corporation's business strategy.
 The thesis of “The Visible Hand” is that, counter to popular dogma
regarding how capitalism functions, administrative structure and
managerial coordination replaced Adam Smith's "invisible hand"
(market forces) as the core developmental and structuring impetus of
modern business.
 His career spanned academia, private enterprise, government, and
humanitarian service
 Professor at Harvard Business School in the early 1940s
 Executive at Ford Motor Company for 15 years, became its
President in 1960
 Secretary of Defense for 7 years under presidents John Kennedy
and Lyndon Johnson
 President of the World Bank for 13 years

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 The 11 lessons Peter F. Drucker
(From “The Fog of War”) (1909 - 2005)
Drucker
McNamara
 Drucker was born in Austria and after finishing
1) empathize with your enemy;
school he went to Germany, first working in
2) rationality will not save us; banking and then in journalism. The rise of
3) there is something beyond oneself; Nazism forced him to leave Germany.
 Moved permanently to USA, where he became
4) maximise efficiency;
a university professor as well as a freelance
5) proportionality should be a guideline in war; writer and business guru.
6) get the data;  From 1971 to his death he was the Clarke
Professor of Social Science and Management
7) belief and seeing are both often wrong;
at Claremont Graduate University.
8) be prepared to re-examine your reasoning;  He made famous the term “knowledge worker”
9) in order to do good you may have to engage in evil; and is thought to have unwittingly ushered in
the knowledge economy, which effectively
10) never say never; and
challenges Karl Marx's world-view of the
11) you cannot change human nature. political economy.

Drucker

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 Contemporary Approaches Industrial Revolution
Timeline
 System: a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole
 Closed systems: systems that are not influenced by and do not
interact with their environment
 Open systems: systems that interact with their environment

Industrial Revolution Contingency Approach:

Timeline Popular Contingency Variables
A management approach that recognizes organizations as different,
which means they face different situations (contingencies) and
require different ways of managing
SELECT VARIABLES:
Organization Size. As size increases, so do the problems of coordination. The type
of organization structure appropriate for an organization of 50,000 employees is
likely to be inefficient for an organization of 50 employees.
Routineness of Task Technology. To achieve its purpose, an organization uses
technology. Routine technologies require organizational structures, leadership
styles, and control systems that differ from those required by customized or
nonroutine technologies.
Environmental Uncertainty. The degree of uncertainty caused by environmental
changes influences the management process. What works best in a stable and
predictable environment may be totally inappropriate in a rapidly changing and
unpredictable environment.
Individual Differences. Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations. These and other individual
differences are particularly important when managers select motivation techniques,
leadership styles, and job designs.

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 Contingency Management

Selected Contributors to Management Theory

 Contingency refers to the choice of an alternative course of action.
 Contingency management has become synonymous with
situational management.
 “The effectiveness of a given management pattern is contingent
upon multitudinous factors and their interrelationship in a particular
situation.” This means that the application of various management
tools and techniques must be appropriate to the particular situation,
because each situation presents unique problems.
 A contingency approach is especially applicable in intercultural
dealings, where customs and habits cannot be taken for granted.

Bestsellers
How to Avoid the Quick-Fix Mentality in Management

To avoid the quick-fix mentality, managers should:

I. Remain current with literature in the field, particularly with journals that
translate research into practice.
II. Ensure that concepts applied are based on science or, at least, on
some form of rigorous documentation, rather than purely on advocacy.
III. Be willing to examine and implement new concepts, but first do so
using pilot tests with small units.
IV. Be skeptical when simple solutions are offered; analyze them
thoroughly.
V. Constantly anticipate the effects of current actions and events on
future results.

Source: Michael A. Hitt and R. Duane Ireland, “Peters and Waterman Revisited: The Unended Quest for Excellence,”
Academy of Management Executive, Vol. 2, no. 2, (May 1987): p. 96

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