EVOLUTION OF

MANAGEMENT THEORY

By
Dr.Bandana Nayak
 EVOLUTION OF
MANAGEMENT THEORY
• Classical Approach
• Human Relations Approach
• Behavioural Science or Neo-human
Relations Approach
• Quantitative Management Approach
• Systems Approach
• Contingency Approach
• Modern Approach
 Classical Approach
• Early Contributions – Kautilya’s
Contributions to Management (350-283 BC).
• Scientific Management - Frederick
Winslow Taylor (1856 - 1915)
• Administrative Management - Henry
Fayol (1841 – 1925 )
• Bureaucracy - Max Weber (1864- 1920)
Early Contributions (Kautilya’s
Contributions to Management
Kautilya has identified seven pillars for
effective state administration:
•The King (The Leader)
•The Minister (The Manager)
•The Country (The Market)
•The Fortified City (Head Office)
•The Treasury (The Finance)
•The Army (Your Team)
•The Ally ( The Friend/ Consultant)
 Scientific Management
• Science, Not rule of thumb: Develop
science for jobs to replace the rule of thumb
• Develop each and every person: Scientific
selection and training of employees
• Cooperation, Not Individualism: Proper
supervision to find the performance of
employees at work. Encourage constructive
suggestions.
• Harmony, Not Discord: Plan the work and
get it done through employees by redicing
conflict and increasing harmony.
functional foremanship
 Techniques of scientific
Management
• Functional Foremanship
• Standardization & Simplification of work
• Work study
• Differential Piece Wage system
 Administrative Management
• Division of work
• Authority
• Discipline
• Unity of command
• Unity of direction
• Subordination of individual interest to organisation’s interest
• Remuneration
• Centralisation
• Scalar chain
• Order
• Equity
• Stability of tenure
• Initiative
• Esprit de corps
 Henry Fayol’s industrial
activities
1. Technical (Production),
2. Commercial (Buying and Selling),
3. Financial (Optimum use of resources),
4. Security( Protection of person and property),
5. Accounting( Including statistics),
6. Managerial
( Planning, Organising, Command, Coordination
and Control)
 Bureaucracy
• Administrative class
• Division work
• Hierarchical authority structure –
Traditional authority
Charismatic authority
Rational / Legal authority
• Official rules
• Impersonal Relationships
• Official records
Human Relations Approach
Neo-Classical Approach
• Elton Mayo
Hawthorne experiment - 1927-1932
Started in Nov.1924
Test group and Control group
Conclusion - Importance of people and
their individual motivations for the
management of organisations
 Behavioural Science or Neo-
human Relations Approach
• Douglas McGregor
Theory X – Traditional assumptions about people:
1. Most people dislike work, and try to avoid it if possible.
2. Most people are unambitious; they avoid responsibility and
prefer to be directed.
3. Most people must be coerced and threatened with
punishment before they work. They are selfish and have
no concern for organizational objectives.
 Douglas McGregor
Theory Y – Modern assumptions about people:
1. People work as naturally as they play or take rest
2. People are self directed and self controlled
3. People are committed to organisation’s objective when
they are rewarded.
4. Average person can learn to seek responsibility.
5. People are capable of being innovative in solving
organisational problems.
6. People are wise, but their potentials are often under-
utilised in organisational conditions.
 Rensis Likert
• System – 1 Exploitative Autocrat – No
confidence on subordinate
• System – 2 Benevolent Autocrat - Some
confidence on subordinate
• System – 3 Participative - Substantial
confidence on subordinate
• System – 4 Democratic - Full confidence
on subordinate
 Chris Argyris
• Unintended consequences between the needs of
individual and needs of organisation give rise to
informal group organisation
• Stages of human growth in organisation
Dependency ( that was in childhood)
Maturity ( that was in adulthood )
Self-actualisation - where he set his own
goals and tried to achieve them
 Quantitative Management
Approach
• Developed by Prof. P.M.S.Blackett and his group
applied certain mathematical approaches to
logically solve war problems during World War
II.
• Presently used by Du Pont and General Electric
for selection of employees, plant locations and
planning for management.
• The approach mostly used for decision-making
and for economic effectiveness.
 Quantitative Management
Approach
• Management Science - This approach was mainly
focused on development of mathematical models for
problem solving.
Example - linear programming, game theory, time series
analysis and simulation models
• Operations management – This approach was less
mathematical and more of the nature of applied
management science.
Example - Economic Order Quantity, Determining the
minimum, maximum and re-order level of inventory.
 Social Systems Approach
• Developed by Chester I. Bernard
• Formal Organisation- comprised people
willing to work for a common goal. There is
conscious coordination and interaction for a
common purpose
• Informal Organisation - social interactions
that may not be for a common purpose
 Systems Approach
• Developed by Ludwig Von Bertalanffy in 1950
• Input-Process-Output-Feedback
• open system is a set of elements standing in
interaction with environment
• closed system does not interact with environment
• Transformation Process is the technology,
production system, administrative and control
system to convert input into output.
 Contingency Approach
• Developed by Burns and Stalker, Woodward,
Lawrence and Lorsch and Perrow.
• It is a combination of Traditional, Behavioural
and Social view points
• Managers use other view points to solve
problems relating to : :
Environment
Technology
Individual
 Modern Approach
• Peter F. Drucker was born in Vienna in 1909
• Management by Objective (MBO) in 1954
• Federalism - where the organisation will have
decentralised structure with centralised control
• Basic aspects of organising –
Activity analysis (identifying the right activity)
Decision analysis (analyzing the impact and quality
of a decision)
Relation analysis (understanding the organisation
structure).