Evolution of Management Thoughts

Overview

 Industrial Revolution (1700 – 1850)

 characterized by the replacement of man or

animal power with machine power and

technological innovations beckoning the

concept of Management
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 Further…
 Post 1950s –

 Identified the significance of Management

 Transition to a more scientific discipline with certain

standardized principles and practices

 Separating activity of managing business organizations from

their ownership

leading to problems of labor inefficiency & problems related to

wage payment

 As part of solving these problems, management got recognized

as a separate area of study

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 Evolution

Early Classical Neo-classical Modern

Approaches Approaches Approaches

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 Early Classical
Approaches

Scientific Administrative
Bureaucracy
Management Management

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 Scientific Management

 Proposed by F. W. Taylor, Father of Scientific

Management

Highlights

 Differential Payment system linking incentives with

production
High rate for exceeding standards
As a motivating tool

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 Further…

 Concept of supervision
– Workers work and foreman/supervisor plans
– Separating planning from actual working

Need for Scientific Recruitment and Training to

stimulate the workers to perform their best

Cooperation b/w management and labour for increasing

productivity

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 Limitations

 Emphasis on monetary incentives as motivating tool

 Dividing the task into too many minute activities lead to

confusions

 Ignores the significance of human variable

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 Followed by…
 Henry Gantt
- charting system for production control (control
chart)

 Frank and Lillian Gilbreth

- therbligs

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 Administrative Management

 Henri Fayol – Father of Administrative Management

theory

Highlights

 Stressing on administrative behaviour of management –

how to execute
 Realistic classification of Management functions into
planning, organizing, commanding, coordinating and
controlling
 Significance of administration in Management
 14 principles

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 Fayol’s 14 principles
 Division of work

- dividing the work/task into different categories and

assigning to specialists in the respective areas
- for increased efficiency

 Authority and Responsibility

- Authority – the power to instruct, get things done

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 Further…

- Power – positional & personal (leadership abilities,

experience)
- bearing responsibilities – duty consciousness

 Discipline

-obedience to authority, rules of service & norms of

performance
-good supervisors at all levels
-fair agreements between employer & employees
avoiding conflicts

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 Further…
 Unity of Command

– Each employee reporting to a single superior to avoid

conflicts in instructions

– More clarity to the employees in terms of their

responsibilities

 Unity of Direction

-Clear demarcation b/w individual and organizational goals

 Subordination of individual interest to General Interest

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 Further…
- Stressting more on general interest – organizational
objective of optimum returns against the individual
satisfaction

Remuneration

-Fair remuneration to be paid

-Depending on general business conditions, cost of living,

productivity of the employee and capacity of the firm

-Will in turn enhance productivity of organization

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 Further…
 Centralization

-The extent of distribution of authority

-Degree of centralization/ decentralization depending on
circumstances, size and nature of the organization etc.

 Scalar Chain

-Flow of communication according to hierarchy of authority

(through scalar chain)
-Communication only through proper channel; but can
go for a shorter one, if situation demands

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 Further…

 Order

-Orderliness in work with optimal resources

-Putting right things/person at the right place

 Equity

- Equality/fair treatment to employees

-avoid prejudices, personal likes and dislikes

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 Further…

 Job security

-this will lead to an increased motivation and sense of

belongingness in employees

 Initiative

- Encouraging employees to take initiative and be

innovative

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 Further…

 Esprit de Corps

- management should create team spirit in employees

- written communication to be emphasized on to avoid
misunderstandings

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 Limitations
 Too much concentration on individuals and small groups
leading to conflicts - b/w the goals of these groups &
that of the organization

 More specialized groups at one level will lead to an

increased expense & co-ordination problem

 Division of labor and specialization are contradictory and

difficult to manage simultaneously

 The theory overlooks the significance of social and

psychological needs of employees

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 Further…

 It is formulated under the assumption - an organization

is a closed system

 Does not talk about the significance of human relations

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 Bureaucracy
 Max Weber – Father of Administrative
Management theory

Highlights

– Systematic division of work

– Authority should be governed by standard rules
– Every employee should be trained – how to apply
rules
– Principle of Hierarchy

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 Limitations

 Overconformity to rules
– stick to the rule
– Slow decision making
– Fear of getting penalized acting as a
barrier

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 Neo-Classical
Approach

Human Behavioural
Relations
Movement Approach

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 Human Relations Movement
 Elton Mayo’s Hawthorne experiments
– Western Electric Company, Illinois (1927 – ’32)

Contributions

 An organization is a social system where workers also seek social

satisfaction

 No correlation b/w working conditions and production

 Non-financial rewards play a great role in motivating workers

 Employee-centered approach Vs task-centered leadership

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 Limitations

 Over emphasis on human relations

ignoring all other variables

 Over emphasis on rewards

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 Behavioural Approach
 Maslow, Mc Gregor, Kurt Lewin etc.

 Organization as group of individuals with certain goals

 Leadership – participative as well as autocratic and task-

oriented

 Designing motivating tools based on individual needs

 Conflicts and change are inevitable aspects

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 Modern
Approaches

Quantitative Systems Contingency

Approach Approach Approach

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Quantitative Approach / OR Approach

 Emphasizes on mathematical decision-making

 During World War II

– To find solutions at the war front – UK & US
– Operations Research teams – analyzing
operations

 Later developed as a problem-solving technique

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 Further…

This technique involves

 Constructing a mathematical model to simulate

the problem

 Identifying interrelated variables and analyzing

different possibilities

 Suggesting the most desired course of action

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 Systems Approach

 Chester Bernard, Herbert Simon et al.

 Integrated approach to management problems

Highlights

– Organization as a system composed of 4

interdependent parts – task, structure, people and
technology, which cannot perform in isolation

– Temporary physical boundaries for operating –

differentiating internal and external environments

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 Organization as an open system

Input
Output
Information, Transformation
Products,
Energy,
Ideas, Services
Materials

Environment

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 Contributions

 Combination of Classical & Neo-classical

approaches

 Studying a problem in a broader perspective –

micro and macro levels

 Advocates that a manager should be a generalist

too (along with specialized skills)

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 Contingency Approach
 Situation plays a great role in decision-making
– Managers need to identify the most desired option
according to situations

 Refutes against the universality of methods and

techniques

 A manager needs to develop situational sensitivity and

practical selectivity

 Complements other schools of management thought

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