UNIT - 2

Evolution of Management Thought

Pre-Scientific Management Era
Pre-historic human settlements

 Administration of Mohenjodaro and Harappa cities

(2000 BC)

 Egyptian organization and administration

(1300 BC)

 Buddha Order (530 BC)

 Roman Catholic church management

 Military organization from historic times

Evolution Of Management Thought
 Pre-scientific Management Era
- Cottage industry, Barter system

 Industrial Revolution
- (18th century, England, Europe, U.S.A)
- Factories with steam power mechanization
- Rail road/steamer transportation
Classical school theory
(Traditional mechanistic approach)
A system based on rigid rules, regulations and procedures

Scientific Modern
Management Operational
Three F.W.
Bureaucracy
Max Managemen
Streams Taylor
Weber t theory
(1911) Henri
(1946)
Gantt, Fayol
Gilbreth (1916)
Elements of Classical Theory
 The Hierarchy
 Specialisation and division of labour
 The scalar principle
 Unity of command
 Departmentalisation
 Span of control
 Parity of authority and responsibility
 Centralization vs Decentralization
 Line and staff relationship
Scientific Management Era F.W.Taylor Theory
 Application of Scientific Method to optimise
productivity
 Frederick W. Taylor(1856-1915)
 Henry Gantt(1861-1919)
 Lillian GILBRETH (1878-1972)
 Scientific method comprised:-
• Observation
• Measurement
• Experimentation
• Inference
Summary of Scientific approach
 Science not rule of thumb.
 Harmony not discord.
 Co-operation not individualism.
 Maximum output in place of restricted output.
 Development of each man to his maximum efficiency

and prosperity.
 Equitable division of work and responsibility

between management and labour.

Critical analysis of Scientific management
Criticised on the following grounds
 1) Mechanistic approach that ignores human element,
devoid by human touch.

 2) Narrow view. Limited to efficiency on shop floor.

 3) Unrealistic assumptions of human’s only physical and

economic needs, overlooking social and esteem needs.

 4) Impracticable as all functions cannot be separated.

 5) Exploitation of labour. Increasing worker efficiency

and specialisation affect health and create monotony.
Max Weber- Bureaucracy Model
 A continuous organisation of official functions bound by rules-
impersonal relationships.
 Specific sphere of competence
- Functions as marked by division of work.
- Incumbent vested with authority.
- Necessary means of compulsion provided.
 Organisation to follow principles of hierarchy of control and
supervision.
 Persons to be trained in rules and norms.
 Administration to be separated from ownership of the enterprise.
 All acts, rules and decisions are formulated and recorded in
writing.
 Bureaucracy
 Specialisation  Rigidity
 Goal Displacement
 Structure
 Impersonal Relationship
 Rationality
 Compartmentalisation of
 Predictability activities
 Democratic  Paperwork
 Empire building
 Red Tape

ADVANTAGES LIMITATIONS
Administrative Management / Modern Operational
Management theory
 - Emphasises Role of the manager and the functions
of Management.
HENRI FAYOL [1841-1925]
 Fayols Principles of Management

• Division of work
• Authority and responsibility
• Discipline
• Unity of command
• Unity of direction
Contd.

• Subordination of individual to general interest.

• Remuneration of personnel.
• Centralization.
• Scalar chain.
• Order.
• Equity.
• Stability of tenure of personnel.
• Initiative.
• Espirit de corps.
Neo-Classical Theory / Human Relation Theory

 Based on knowledge of Psychology, Sociology and

Anthropology.
Human
Hawthorne Behavioural
Relations
Study(1924-33) science approach
Movement

●
Elton ●
Chester
Mayo Bernard ●
Likert, McGregor,
Maslow
●
F.J.Roeth [1886-
lisberger 1961]
Neo Classical Approach :Analysis in three parts
 1. Hawthorne Experiment (1924-32)
Elton Mayo and F.I.Roethlisberger are fathers of neo-
classical approach.
a) Illumination Experiment: Productivity of both groups
improved irrespective of no change or improvement in
illumination.
b) Relay Assembly Test Room Studies: Importance of socio-
psychological factors-
- Special attention.
- Recognition
- Sense of group pride and belonging.
-Worker-supervisor relationship.
Contd.

c) Mass Interview Programme:

 Opportunity to talk freely improved moral and

productivity.
d) Bank wiring Observation Room Study:
 Despite group incentives productivity did not improve

because the group members enforced their norms

within the group.
 Evaluation: - A landmark in evolution towards

humanising management. Attention towards social and

psychological needs, informal group, group dynamics,
motivation, morale and leadership.
Contd.

2.Human Relation Movement.

Socio-psychological approach to management. A

management practice concerned with integration of
people into work situation in a way that motivates them
to work together productively, cooperatively and with
satisfaction, to achieve organisational goals.
Four important Elements:
 The Individual
 The Work Group
 The Leader
 The Work Environment.
Contd.

Contributions:
 Highlights ‘human’ side of organisation.
 Meets social and psychological needs of people,

enhancing satisfaction, productivity.

 Focus on inter- personal relations.
 Focus on people management skills and leadership styles.

3. Behavioural Science Approach

Organisational Behaviour involves study of attitudes,
behaviour and performance of individuals and groups in
organisational setting for which the knowledge drawn
from psychology, sociology, anthropology is applied.
Main provision of Behavioral approach
 An organization is a socio-technical system.
 Individuals differ in their attitudes, perceptions and

values and react differently.

 Goals of members may differ from that of

organization
- fusion of the two is important.
 Informal groups are formed in organizations.
 Informal groups significantly influence attitudes and

behavior of individuals.
Main conclusions of Hawthorne Experiment
 The work group is not merely a techno-economic unit but also
a social system with its own culture.
 Workers are not simply motivated by money alone, but socio-
psychological factors are important.
 Social and psychological factors exercise a greater influence
on employee behavior than physical conditions of work.
 Informal groups are formed in workplace which greatly
influence individuals performance according to group norms.
 Workers respond to factors both inside and outside the
workplace.
 Complaints and criticism by employees are manifestation of
deeper dissatisfaction.
Douglas McGregor - Theory X & Y
 Managers take two distinctly different views of human
beings, Negative theory X and Positive theory Y, which
tends to mold their behaviour towards subordinates.
Theory X Assumption

 Employees inherently dislike work and, whenever

possible, will attempt to avoid it.
 They must be coerced, controlled, or threatened with

punishment to achieve desired goals.

 Employee will shirk responsibilities and seek formal

direction whenever possible.

 Workers place security above other factors and will

display little ambition.

Theory Y Assumptions
 Employees can view work as being as natural as rest
or play.
 Human beings will exercise self-direction and self-

control if they are committed to the objectives.

 The average person can learn to accept, even seek,

responsibility.
 Creativity- the ability to make good decisions- is

widely dispersed throughout the population.

Comparison of Classical & Neo-Classical Approach
BASIC CLASSICAL NEO-CLASSICAL

STRUCTURE Impersonal, mechanical Social system

BEHAVIOUR Product of rules and Product of feelings,

regulation attitude and sentiments

FOCUS On work and economic On small groups and

needs of workers human qualities of
employees
EMPHASIS On order and rationality On security and social
needs of workers
PRACTICES Authoritarian Democratic

RESULTS Work alienation, Happy employees trying

dissatisfaction. to produce more
The Quantitative Management Perspective

Management Science vs. Quantitative Management:

◦ Management Science focuses specifically on the

development of mathematical models.
◦ Quantitative Management applies quantitative
techniques to management.
Contd.

 Management Science &MIS:- Uses Mathematical

and Statistical approaches to
 solve management problems
 GEORGE DANTZIG Etc.
 DSS &ERP SYSTEMS

 Production and Operations Research:-Focuses

upon operation and control of production process that
transforms resources into finished goods and
services.
 JURAN
 W.EDWARDS DEMING
 Comparison between Human Relations and
Scientific Management
 Human Relations
1. No Universal Principles
2. Focus on people
3. No one best way
4. Man is a social animal.
5. Group dynamics, motivation, job
satisfaction.
6. Application of knowledge derived
from behavioural sciences.
7. Improvements in inter- personal
relation
 Scientific Management
1. Principles for universal application.
2. Focus on machines.
3. One best way to doing things.
4. Man is an economic animal.
5. Time and motion studies, functional
foremanship and wage incentive.
6. Application of knowledge of physical
science.
7. Improvements in productivity and
efficiency.
Decision Theory Approach

 This theory focuses on the making of

decisions, persons or groups making decisions
and the decision-making process. Some
theorists use decision making as a springboard
to study all enterprise activities. The
boundaries of study are no longer clearly
defined.
The Contingency approach

 The contingency approach suggests that

appropriate managerial behaviour in a given
situation depends on, or is contingent on, a
wide variety of elements. Stated differently,
effective managerial in one situation cannot
always be generalized to other situations
System Approach
A wholistic, integrated approach.( Trist, Katz, Kahn )

ENVIRONMENT

INP PROC OUT

UT ESSES PUTS
●
Men,Materi
●
Goals
●
Activities
al, Money ●
Sales/Pro
Technology
●
Operations
fits
●
TARGETS

ENVIRONMENT
 Understanding a System
System: an interrelated set of elements
functioning as a whole.

Types of Systems:
◦ Open System: an organisational system that
interacts with its environment.
◦ Closed System: an organisational system that
does not interact with its environment.
◦ Subsystem: a system within a broader system.
Contd.
Main Elements
 Organisation as a unified and purposeful system
consisting of several interconnected, interacting and
interdependent parts or subsystems.
 Sub-system influence each other and the system as

they are linked through goals, flow of authority,

resources etc.
 System has a boundary which separates it from the

environment. Employees are within whereas creditors

and customers are external.
Contd.
 Open system continually interacts with its external

environment whereas a closed system is self-contained

and isolated.

 A business organisation is a dynamic and open system

which draws input from environment, converts them
into output and delivers to the environment.

 System receives feedback from the environment based

on which changes are made within.

 After sometime a system may suffer from ENTROPY, a

negative energy unless organization is managed well.
An Integrative Framework of
Management Perspectives
Systems Approach Contingency Perspective

Recognition of internal Recognition of the situational

interdependencies. nature of management.
Recognition of environmental Response to particular
influences. characteristics of situation.

Effective Quantitative
 Classicaland efficientBehavioral
management Management
Management
Management Perspectives:
Perspective:
Perspectives: Insights for motivating
Techniques for
Methods for enhancing performance and
improving decision
efficiency and facilitating understanding individual
making, resource
planning, organizing, and behavior, groups and
allocation, and
controlling teams, and leadership
operations

 Effective and efficient management

Integrating Perspectives for Managers
 A complete understanding of management requires an
appreciation of, classical, behavioral, and quantitative
approaches.

 The systems and contingency perspectives can help

managers integrate the three approaches and enlarge
understanding of all three.
The Emergence of Modern Management Perspectives
McKinsey’s 7-s approach
7-S framework of McKinsey

 The 7-S framework of McKinsey is a Value

Based Management (VBM) model that
describes how one can holistically and
effectively organize a company. Together these
factors determine the way in which a
corporation operates.
 THE HARD S’s

 Strategy: the direction and scope of the company over

the long term.

 Structure: the basic organization of the company, its

departments, reporting lines, areas of expertise and
responsibility (and how they inter-relate).

 Systems: formal and informal procedures that govern

everyday activity, covering everything from management
information systems, through to the systems at the point
of contact with the customer (retail systems, call center
systems, online systems, etc).
 THE SOFT S’s
 Skills: the capabilities and competencies that exist
within the company. What it does best.

 Shared values: the values and beliefs of the company.

Ultimately they guide employees towards 'valued'
behavior.

 Staff: the company's people resources and how the are

developed, trained and motivated.

 Style: the leadership approach of top management and

the company's overall operating approach.
THANK YOU