Module I

Chapter 1
Foundations of Management Theories
Classical Management Theory School

Contributions of:
•F.W. Taylor
•Henri Fayol
• Max Weber
• Mary Parker Follett
• Chester I. Barnard
CLASSICAL MANAGEMENT THEORIES

Classical Management Theory is based on the belief that workers

only have physical and economic needs.

It does not take into account social needs or job satisfaction, but
instead advocates a specialization of labor, centralized leadership
and decision-making, and profit maximization
The Scientific Management School

Contributions of:
• Taylor
• Gantt
• The Gilbreths
 The Scientific Management School
• It is a management approach which was aimed to scientifically
determine the best methods for performing any task & thereby
selecting, training and motivating workers.

• Contributors of the Theory:

- Frederick W. Taylor (1856-1915)
- Henry L. Gantt (1861-1919)
- Frank Gilbreth ( 1868-1924) & Lillian Gilbreth (1878-1972)
Scientific Management Era
Frederick W. Taylor (1856-1915)
 Fundamental Principles of Taylor’s Theory

• The best method for performing a particular task should be

accompanied by the development of a true science of
management.
• Workers should be selected scientifically, so that he/she is being
selected as the right candidate for the right job.
• Emphasis on scientific education & development of the worker.
• Intimate, friendly cooperation b/w the labor & the management.
SCIENTIFIC MANAGEMENT ERA
 Fundamental Principles of Taylor’s Theory

• Replacement of the rule of thumb (by scientific methods)

• Cooperation
• Development of workers
• Maximum Output
• Distribution of work
 Elements of Scientific Management

• Work Study (analyze work and eliminate unnecessary operations)

• Use of standardization (tools & equipments)
• Scientific selection, placement & training of workers
• Introduction of functional foremanship
• Introducing Costing system
• Mental Revolution (Change in worker attitudes)
APPLICATION OF SCIENTIFIC
MANAGEMENT IN FORD MOTORS
 Applications and take aways of Scientific management

• Maximum utilization of efforts, no wastage

• Scientific selection and training of people
• Emphasis on specialization
• Emphasis on Performance standards
• Use of incentives
Know ur Management Gurus…

Henry L. Gantt
(1861-1919)

Gantt Chart..
Know ur Management Gurus…
Frank Gilbreth ( 1868-1924) & Lillian Gilbreth (1878-1972)
 Contribution of The Gilbreths…

• Fatigue & motion studies

• Focus on promoting individual worker’s welfare.
• Emphasis on enabling workers to reach their full potential.
• Emphasis on employee motivation & physical well being of workers.
Know ur Management Gurus…

Henri Fayol
(1841-1925)
 Henri Fayol’s Theory…

• Henri Fayol (1841-1925) is considered as the founder of the classical

management school.

• The theory focuses mainly to identify the principles and skills that underlie
effective management.

• Introduced the famous “14-principles of Management” (administrative

theory/principle)

• Theory of its first kind to focus on Organizational Functions.

 Fayol’s 14-Principles of Management…

❑ Division of Labor
❑ Authority
❑ Discipline
❑ Unity of Command
❑ Unity of Direction
❑ Subordination of individual interest to the common good
❑ Remuneration
❑ Centralization
❑ The Hierarchy
❑ Order
❑ Equity
❑ Stability of staff
❑ Initiative
❑ Espirit de Corps (Team Spirit)
Theory of Bureaucracy
 Max Weber
(1864-1920)

Know ur Management
Gurus…
 Max Weber’s concept of Bureaucracy…

• Bureaucracy refers to an organization with a legalized formal & hierarchical

structure & also to the formal structural process within the same.

• Weber’s Model of bureaucratic management clearly advanced the formation of

huge corporations such as Ford.

• In the competitive Global market of the 1990s organizations like those of GE &
Xerox have become “Bureaucracy Busters”
 Max Weber’s concept of Bureaucracy…

• There is a clear separation between superior & subordinate

• There is a division of labor based upon competence & functional

specializations

• There is a system of rules, regulations and procedures

• There is a hierarchy in position based on legal authority & power

NEO-CLASSICAL THEORIES OF
MANAGEMENT
The neoclassical theory was an attempt at incorporating the
behavioral sciences into management thought in order to solve the
problems caused by classical theory practices.

The premise of this inclusion was based on the idea that the role
of management is to use employees to get things done in
organizations
 Neoclassical Organization Theory
• The neoclassical theorists gained their reputation by attacking the
classical theories.
– Important source of the power and politics, organizational culture, and
systems theory.
• Herbert Simon.
– Bounded rationality and satisficing.
– Programmed and unprogrammed decision-making.
– Management information systems.
 Neoclassical Organization Theory
• The impact of sociology.
– Philip Selznick – Organizations are made up of individuals whose
goals and aspirations may not coincide with the organization’s.
 The Human Relations Movement

What do we mean by Human Relations

• Human relations is frequently used as a general term to describe the

ways in which managers interact with their employees or recruits
• When “employee management” stimulates more and better work, the
organization can be said to have effective human relations
 The Hawthorne Experiments…

Elton Mayo
(1880-1949)
 Hawthorne Studies….
• The human relations movement grew out of a famous series of
studies conducted at the Western Electric Company (at the
Hawthorne Plant near Chicago) from 1924 to 1933
 The Hawthorne Effect…

The possibility that workers who receive special attention

would perform better simply because they received that
attention
 Conclusion of Hawthorne Studies
• Impact of social factors
• Informal groups
• Leadership
• Communication
• Balanced approach in management
CASE STUDY: RAMESH’S DILEMMA
 Case Study
Ramesh was at the brink of the end of his
career as an Operations manager in a leading
Iron & Steel manufacturing PSU. Being a
diligent engineer he believed in doing things
systematically as per strict process
guidelines and directives. He hardly had
concern for people working under him and
used to say “its just waste of time & money.”
Anita Srivastava, an experienced HR
manager joined this organization and
recommended the MD to introduce an
organic work culture & environment in
this company. Her philosophy was
participation, team work, benevolent
work environment & learning from one
another.
Case Study

Although the new HR practice was

implemented, people like Mr. Ramesh
found it difficult to adjust with the new
culture. He said “Her ideology is not my
cup of tea”.
Case Study

Qs 1. What kind of management principles did Ramesh follow?

Qs 2. What kind of work philosophy did Ms. Anita liked to have?
Qs 3. Is there any way Mr. Ramesh could adjust with the new work
culture?
 Behavioral School of thoughts

A group of management scholars trained in sociology,

psychology, and related fields, who use their diverse knowledge
to propose more effective ways to manage people in
organizations
 Approaches to the study of Management
HR Productivity
Contingency
Approach Approach
Approach
(supportive approach)

OB & Mgt
Principles

Systems Interactionalism
Approach Approach
 Business Environment ORGN. PROCESS Business Environment

Inputs Orgn. Strategy, Desired Outputs Output

Goals Processes
• Manpower • Product
• Material • Services
• Money • Quality Expectations
• Market
• Machine
• Mechanism
Process; Operations

Feedback
Systems Approach
 Universal vs Contingency Approach of OB
Organizational Universal approach
The one best way of
Problems or Situations Responding
determine

Organizational problems Elements of the Contingency ways of

Or situations must be Situation, which then Responding
Evaluated in terms of Suggest…

Contingency approach
Interactionalist Approach
Individual

Behaviour

Situation
Behavioral Science School of Thoughts
 Behavioral Science Approach
• Application of sophisticated research methods related to social
sciences comprising of the study of psychology, sociology and
anthropology

• Emphasis on the behavior of human beings & their drives on

individual as well as organizational performance.
Pioneers of Behavioral Science approach….

Abraham Harold
Maslow:

• Born in the year 1908; passed

away 1970
• Famous for Motivation theory:
“Hierarchy of needs”
Frederick Herzberg:

• Famous for “2 factor hygiene & Motivation

Theory”
• Frederick Herzberg's book 'The Motivation
to Work', written with research colleagues
B Mausner and B Snyderman in 1959, first
established his theories about motivation
in the workplace
Douglas McGregor:

• Born in the year 1906; passed

away 1964
• Famous for “Theory X Theory Y”
concept of Motivation.
The Management Science School
 Case Approach
Case
Situation
Failures Success

Why?

Features:
• To study experience through cases
• To identify successes & failures

Limitations:
• Situations are all different
• Limited value for development of Management Theory
 The Management Science School
• The management Science School emphasizes upon approaching
management problems through the use of mathematical techniques
for their modeling, analysis, and solutions.

YES

E = F ( Xi, Yi )
NO
 YES
E = F ( Xi, Yi )

NO

Management Science Approach

Features:
• Managing is seen as mathematical processes, concepts, symbols &
models.
• Looks at management as purely logical process, expressed in
mathematical symbols & relationships.

Limitations:
• Pre-occupation with mathematical models.
• Many aspects in managing cannot be modeled.
• Mathematics is an useful tool, but hardly a school or an approach to
management.