Traditional & Contemporary

Issues & Challenges

Presented by:
Danish Mehmood Khawaja Khel
Roll No: 2019-MBA-02
Theory & Management:
What is Theory:
 A supposition or a system of ideas intended to explain something, especially one based on
general principles independent of the thing to be explained.
 a set of principles on which the practice of an activity is based.
Why Theory is important in Management?
 Managers develop their own theories because theory is basically a conceptual framework for
organizing knowledge and providing a blueprint for action, so by developing these theories
managers design a plan and strategy on which they work and run organizational activities
efficiently
Importance of History:
 Sometimes we try to understand why certain things happened in the past, or why particular
individuals who greatly affected the course of history acted in the manner that they did.
Examples of Management found in History:

 Stonehenge is a prehistoric monument in

Wiltshire, England, two miles (3 km) west of
Amesbury. It consists of a ring of standing stones,
with each standing stone around 13 feet (4.0 m)
high, seven feet (2.1 m) wide and weighing
around 25 tons. The stones are set within
earthworks in the middle of the most dense
complex of Neolithic and Bronze Age monuments
in England, including several hundred burial
mounds. Stonehenge is located in UK whose
construction heavily relied on management
functions where stones 're cuted 300 miles away
and then were brought to locations.
The Egyptian pyramids are one of the defining architectural
achievements of the ancient world. As an incredible feat of
engineering, Egyptologists are still discovering more about
these structures with each passing year.
The Egyptians used management functions of planning ,
organizing and controlling while construction of the great
Pyramids..
 The Wall of China, basically a collection of
walls is made of cement, rocks, bricks, and
powdered dirt. It was built to protect the north of
the empire of China from enemy attacks. It is the
longest structure humans have ever built. It is
about 21,196 kilometers (13,171 miles) long, 9.1
meters (30 feet) wide and 15 meters (50 feet)
high.

These are few of the examples of architecture

from the history which were designed by
applying management sciences, it was
impossible without great managerial skills like
Planning, Organizing, Decision Making,
Controlling and Leadership. So here its again
proved that how much important management
is for achieving goals.
 Need of Management?
Now here the question rises that why the dire need
of management was needed? What were the reason
which made the intellectuals uncomfortable and
they started to think about some solutions which
later known as Management.
In past years there was abundance of men
available for work, plenty of time with people to d
things , have limited but pure and effective
resources, have placed to execute their plans and
much more things were present but unfortunately
no theory, no science was there to use all available
resources efficiently and effectively, no planning
and initiatives for doing different things unless
required, no urge of development and improvement
without a dire need and in short a great
insufficiency of ideas, planning, organizing,
controlling was there which forced the intellectuals
of the time to think seriously to meet such
deficiencies as a consequences Management came
into existence.
MANAGEMENT AND ITS PIONEERS
Management and its PIONEERS
There are various people and intellectuals who have done different work at different times
and contributed in various forms for the development and improvement of this new subject to
which modern world called Management.
The initiators and other heroes who contributed in development of field of Management are:
 Adam Smith
 Robert Owen
 Charles Babbage
 Fredrick Taylor
 Henry Grant
 Frank & Lillian Gilberth
 Harrington Emerson
 Henry Fayol
 Max Weber, etc
Various Phases of Management
The Development and Progress of Management have shown various advancements,
modifications and addition of newer and redefined concepts of management with the passage
of time and have 4 major perspectives or phases.
 Early Management
 Classical Management Perspective
 Scientific Management
 Administrative Management
 Behavioral Management Perspective
Early Management and its Pioneers
The Heroes who contributed in development of this discipline of science at very early stage or
simply at initial stage by giving initial theories are Adam Smith , Robert Owen and Charles
Babbage.

 Adam Smith.
Smith, an Scottish political economist in his book ”Wealth of Nations”, published in
1776, established the "classical school" and with its publication, he became the father of
"liberal economics." Smith argued that market and competition should be the regulators of
economic activity and that tariff policies were destructive. The specialization of labor was the
mainstay of Smith's market system. According to Smith, division of labor provided managers
with the greatest opportunity for increased productivity.
 Robert Owen.
Robert Owens (1771–1858) was a successful Scottish entrepreneur and a utopian
socialist who sowed the first seeds of concern for the workers. He was repulsed by the working
conditions and poor treatment of the workers in the factories across Scotland. Owen became a
reformer. He reduced the use of child labor and used moral persuasion rather than corporal
punishment in his factories. He chided his fellow factory owners for treating their equipment
better than they treated their workers.
Owen deplored the evils of the division of labor and in his ideal system believed each
man would do a number of different jobs switching easily from one job to another. Additionally,
Owen hated the modern factory system, so he decided to revolutionize it. In 1813 he proposed
a factory bill to prohibit employment of children under the age of ten and to limit hours for all
children to 10 1 /2 hours per day with no night work. The bill became law six years later, but
was limited to cotton mills, reduced the age limit to nine, and included no provision for
inspections; therefore, the law had little impact.
 CHARLES BABBAGE.
Charles Babbage, well known as the originator of the concepts behind the present
day, had also made some contributions in the field of Management
Babbage's most successful book, On the Economy of Machinery and Manufacturers,
described the tools and machinery used in English factories. It discussed the economic
principles of manufacturing, and analyzed the operations; the skills used and suggested
improved practices.
Babbage believed in the benefits of division of labor and was an advocate of profit
sharing. He developed a method of observing manufacturing that is the same approach utilized
today by operations analysts and consultants analyzing manufacturing operations.
 Management Perspectives:
There exists 2 different perspectives or simply
two different type of point of views in filed of
management scientific management and
administrative management.
 Scientific Management
Concerned with improving the performance
of individual workers (i.e., efficiency).
Grew out of the industrial revolution’s labor
shortage at the beginning of the twentieth
century.
 Administrative Management
A theory that focuses on managing the total
organization.
 Scientific Management Theory
 Scientific management theory, also called classical management theory,
entered the mainstream in the early 1900s with an emphasis on
increasing worker productivity.
Developed by Frederick Taylor, the classical theory of
management advocated a scientific study of tasks and the workers
responsible for them. Although its goal was providing workers the tools
necessary for maximizing their efficiency and output, it is also criticized for
creating an "assembly-line" atmosphere, where employees do only menial
jobs. For this reason, it has fallen out of favor among many companies and
schools of thought, but could still be a valuable tool for your organization,
provided you carefully examine all of its principles. For example, the
scientific theory of management is considered better suited to businesses
based on repetitive tasks, such as a factory.
For better understanding of this theory we all have to understand these four
basic points:
 Company leadership should develop a standard method for doing each
job using scientific management.
 Workers should be selected for a job based on their skills and abilities.
 Work should be planned to eliminate interruptions.
 Wage incentives should be offered to increase output.
 Taylor’s 4 Principles of Scientific Management
 Replace rule-of-thumb work methods with methods based on a scientific
study of the tasks.
 Scientifically select, train, and develop each worker rather than passively
leaving them to train themselves.
 Cooperate with the workers to ensure that the scientifically developed
methods are being followed.
 Divide work nearly equally between managers and workers, so that the
managers apply scientific management principles to planning the work and
the workers actually perform the tasks.
Taylor concentrated more on productivity and productivity based
wages. He stressed on time and motion study and other techniques for
measuring work. Apart from this, in Taylor’s work, there also runs a strongly
humanistic theme. He had an idealist’s notion that the interests of workers,
managers and owners should be harmonized.
 Perceptions Broken
With the introduction of this scientific management theory the general mindset was transformed
and the stereotypes were broken which really helps in improving output and giving only a
required input which was essential
Before introduction of this theory, few misunderstandings were existing such that more
output mean working hard and doing only struggle but this theory corrected people that more
output need working smartly, efficiently and effectively, It doesn’t means that more output need
only hard work and efforts without any proper planning.
Before Scientific Management’ s Induction the wrong mind set was:
If we want more output we have to :
Work for long Hours, more Employees, More Resources will be required
But Scientific theory give new dimensions and way of thinking here that :
More output only demands Maintenance of standard and quality, Efficiency of workers and
division of tasks among employees
 Some Other Contributions in Management
Frank B. Gilbreth and Lillian M. Gilbreth:
Frank Gilbreth and his wife Lillian Gilbreth were contemporary of Taylor, but
they worked independently on time and motion study. They developed a
unique technique to compete work. Faster speed work however, did not refer
to hurrying with the work but economizing the time sequence by eliminating
unnecessary movements and exhausting motions and methods of
accomplishing a task.
Some important contributions of Gilbreth are:
 Development of Motion Study:
 Development of Chrono cyclographs
 Study of Fatigue
Henry Gantt
An early associate of Fredrick Taylor , later developed techniques, including
the Gantt chart, to improve working efficiency through planning/scheduling.
Harrington Emerson
Harrington Emerson emphasized on excelling and specializing in
managerial as well as operational activities.
Henry Fayol & Administrative Management Theory
 The Administrative Theory is based on the concept of departmentalization,
which means the different activities to be performed for achieving the
common purpose of the organization should be identified and be classified
into different groups or departments, such that the task can be
accomplished effectively.
 The administrative theory is given by Henri Fayol, who believed that more
emphasis should be laid on organizational management and the human
and behavioral factors in the management. Thus, unlike the scientific
management theory of Taylor where more emphasis was on improving the
worker’s efficiency and minimizing the task time, here the main focus is on
how the management of the organization is structured and how well the
individuals therein are organized to accomplish the tasks given to them.
Henri Fayol concluded that all industrial activities could be
subdivided in following six groups:
 Technical Activities
 Commercial Activities
 Financial Activities
 Accounting Activities
 Security
 Managerial or Administrative Activities

He have also given 14 principles of management which he

declared important for effective communication.
Merits and Demerits of Classic Management Theory

Merits:
 Laid the foundation for later theoretical developments.
 Identified management processes, functions, and skills.
 Focused attention on management as a valid subject of scientific inquiry.
Demerits
 More appropriate approach for use in traditional, stable, simple organizations.
 Prescribed universal procedures that are not appropriate in some settings.
 Employees viewed as tools rather than as resources.
 The Behavioral Management Perspective
 The behavioral management theory is often called the
human relations movement because it addresses the
human dimension of work. Behavioral theorists
believed that a better understanding of human
behavior at work, such as motivation, conflict,
expectations, and group dynamics, improved
productivity.

 The theorists who contributed to this school viewed

employees as individuals, resources, and assets to be
developed and worked with — not as machines, as in
the past. Several individuals and experiments
contributed to this theory.
 Elton Mayo and the Hawthorne studies

Elton Mayo's contributions came as part of the Hawthorne

studies, an experiment that rigorously applied classical
management theory only to reveal its shortcomings.
The Hawthorne experiment conducted at the Hawthorne
Works of the Western Electric Company in Chicago from 1924
to 1932. The study was conducted by a group of engineers
seeking to determine the relationship of lighting levels to
worker productivity. Surprisingly enough, they discovered that
worker productivity increased as the lighting levels decreased
— that is, until the employees were unable to see what they
were doing, after which performance naturally declined
. The Hawthorne Effect suggested that the attitude of employees
toward their managers affects the employees’ performance.
The Behavioral Management Perspective

The Human Relations Movement

Grew out of the Hawthorne studies.
Proposed that workers respond primarily to the
social context of work, including social
conditioning, group norms, and interpersonal
dynamics.
Assumed that the manager’s concern for
workers would lead to increased worker
satisfaction and improved worker performance.
 The Behavioral Management Perspective

 Abraham Maslow
Abraham Maslow, a practicing psychologist, developed one of the most
widely recognized need theories, a theory of motivation based upon a
consideration of human needs . His theory of human needs had three
assumptions:
 Human needs are never completely satisfied.
 Human behavior is purposeful and is motivated by the need for satisfaction.
 Needs can be classified according to a hierarchical structure of
importance, from the lowest to highest.
 The Behavioral Management Perspective

Douglas McGregor
 Douglas McGregor was heavily influenced by both the Hawthorne
studies and Maslow. He believed that two basic kinds of managers
exist. One type, the Theory X manager, has a negative view of
employees and assumes that they are lazy, untrustworthy, and
incapable of assuming responsibility. On the other hand, the Theory
Y manager assumes that employees are not only trustworthy and
capable of assuming responsibility, but also have high levels of
motivation.

 An important aspect of McGregor's idea was his belief that

managers who hold either set of assumptions can create
self‐fulfilling prophecies — that through their behavior, these
managers create situations where subordinates act in ways that
confirm the manager's original expectations.

 As a group, these theorists discovered that people worked for inner

satisfaction and not materialistic rewards, shifting the focus to the
role of individuals in an organization's performance