CHAPTER TWO

EMERGING OF MANAGEMENT THOUGHT

 Chapter objective

After a through study of this unit, you will be able to:

 Asses the significance of studying management thought
 Define management thought, theories and principles
 Understand the contribution of early antiquity to management thought


Understand the management school of thoughts.
 What is management theory?
 Theories are perspectives with which people makes sense of their world experience.
 A set of principles that explains or accounts for relationship between two/more
observable facts or events.
 But there is no universally accepted management theory.
 The school of management thought are the theoretical framework for the study of
management.
 Management theories in early period were not really theories, but some discrete practices
and experiences.
 Management theories in the present centuries are not totally free from certain
problems.
 For this purpose, a sound theoretical and conceptual framework is essential
for the theory to take the shape.
 The chaos caused by proliferation of management theories is aptly called ‘
the management theory jungle’ and a strong need for a unified and
integrated theory of management was felt a number of theoretical approaches
with varying hypothesis, assumptions, propositions have emerged.
 Management is an applied science; it lacks a coherent theoretical concepts of
its own.
 Evolvement of theories in management

 One of the keys to successful management is the ability to understand and apply modern
management principles and techniques effectively.
 Managers must develop an in-depth knowledge of part and present models, theories and
processes in order to manage effectively and intelligently.
 History of management extends to several thousand years in the past. But get prominence
in the late of 19th century as a formal discipline.
 The practice of management is as old as human race but its theories and conceptual
framework are of recent origin.
 Evolution and school of management thought

Neo-classical/
Pre-scientific Modern theory
management
Classical theory behavioral
theory
• Ancient • Scientific • Hawthorne • System
civilizations management experiment • Contingency
• Military • Administrative • Theory X & Y • Theory Z and
organizations • Bureaucratic model • Maslow’s TQM
• Writers i.e. C. • Quantitative
hierarchy
Babbage, J. Watt approach
• Industrial
revolution
 2.1 THE ERA OF CLASSICAL MANAGEMENT
I. The Scientific Theory of Management: Frederick W. Taylor
 The systematic study of relationships between people and tasks for the purpose of

redesigning the work process to increase efficiency.

 The process of approaching various aspects of organizations in a scientific manner using

scientific tools such as research, management, and analysis.

 It is the art of knowing what exactly you want from your men to do & then seeing

that it is done in best possible manner.

 In simple words it is just an application of science to management.

 Basic Assumption: People Are Rational

People will rationally consider the opportunities available to them and do whatever is
necessary to maximize their economic gain.
 Taylor’s Contribution To Management
 Frederick Winslow Taylor (20 March 1856-21 March 1915), widely known as F.
W. Taylor, was an American mechanical engineer who sought to improve
industrial efficiency.
 He is regarded as the father of scientific management, and was one of the first
management consultants.
 Develop a science for every job, including rules of motion, standardized work
implements, and proper working conditions.
 Carefully select workers with the right abilities for the job.
 Carefully train these workers and provide proper incentives.
 Provide these workers with the necessary support.

 Analyzing the work – One best way to do it.

 Principles Of Scientific Management
 Science not the rule of thumb: scientific investigation should be used for taking

managerial decisions instead of basing on opinion, institution or thumb rule.

 Harmony not discard/ cooperation between employers and employees: Harmonious

relationship between employees and employers. Cooperation of employees that

managers can ensure that work is carried in accordance with standards.
 Scientific selection of training and development: selection means to choose the
best employee according to the need. Their skill and experience must match the
requirement of the job.
• Scientific development refers to criteria for promotions, transfers etc.. So that
work is done with full efficiency.
 Division of work/responsibility: The responsibility of workers and management
should be properly divided & communicated so that they can perform them in an
effective way and should be reward for the same.
 Mental revolution: Acc. To Taylor, the workers and managers should have a
complete new outlook; a mental revolution in respect to their mutual relations.
 Workers should be considered as a part of Organization.
 Employers shouldn’t treat workers as mere wage earners.
Principles Of Management….
Or Taylor’s four principles of
management are;
1. The development of a true science.
2. The scientific selection of the
workman.
3. The scientific education and
development of the workman.
4. Intimate and friendly cooperation
between the management and the men.
o Taylor created planning departments, staffed
them with engineers, and gave them the
responsibility to:
1. Develop scientific methods for doing work.
2. Establish goals for productivity.
3. Establish systems of rewards for meeting the
goals.
4. Train the personnel in how to use the
methods and thereby meet the goals.
Four Principles Of Scientific Management To Increase
Efficiency

1. Study the way workers perform their tasks, gather all the informal job
knowledge that workers posses, and experiment with ways of improving how
tasks are performed.
2. Codify the new methods of performing tasks into written rules and standard
operating procedures.
3. Carefully select workers who possess skills and abilities that match the needs of
the task, and train them to perform the task according to the established rules and
procedures.
4. Establish a fair or acceptable level of performance for a task, and then develop a
pay system that provides a reward for performance above the acceptable level.
 Problems With Scientific
Criticisms Management
 Managers frequently implemented only the
o Employer centered
increased output side of Taylor’s plan.
o Alienation of workers to society
• Workers did not share in the increased output.
o Reduced opportunity to workers
 Specialized jobs became very boring, dull.
o Denied “human community” in
• Workers ended up distrusting the Scientific
workplace/ dehumanizes the worker
Management method.
o Neglected the environment (a
 Workers could purposely “under-perform.”
closed system view)
 Management responded with increased use of

machines and conveyors belts.

How Do Today’s Managers Use Scientific Management
1. It was important because it could raise countries’ standard of
living by making workers more productive and efficient.
2. Also it’s important to remember that many of the tools and
techniques developed by the scientific management practitioners are
still used in organizations today.
ii. Henri Fayol: Principles of Administration

 Henri Fayol is claimed to be the real father of modern management. He was

a Frenchman born in 1841 and was working as an engineer with a mining

company.

 From his practical experience, he developed some techniques. He brought

out some 14 basic management principles, which he felt, could be used in

all management situations, irrespective of the organizational framework.

 According to Henri Fayol specialization promotes efficiency of the

workforce and increases productivity.

• In addition, the specialization of the workforce increases their accuracy and

speed.
 HENRI FAYOL’S 14 PRINCIPLES OF MANAGEMENT

2. Authority
1. Division Of Work
 The right to issue commands, along with
 Specialization allows the individual to
which must go the balanced
build up experience, and to continuously
responsibility for its function.
improve his skills. Thereby he can be more
productive. 4. Unity Of Command

3. Discipline  Every employee should receive orders

from only one superior. There should be

 Obedience to authority, adherence to the
a clear-cut chain of command
rules of service and norms
5. Unity of Direction
 People engaged in the same kind of activities
must have the same objectives in a single plan.
This is essential to ensure unity and coordination
in the enterprise. Unity of command does not
exist without unity of direction but does not
necessarily flows from it.
6. Subordination of individual interest
 Management must see that the goals of the firms
are always paramount. Organizational interests
are more important than those of the individuals.
7. Remuneration
 The remuneration paid to the employees of the
firm should be fair.
 It should be based on general business conditions,
cost of living, productivity and efficiency of the
concerned employees and the capacity of the firm
to pay.
8. Centralization (Or Decentralization)
 This is a matter of degree depending on the
condition of the business and the quality of its
personnel.
9. Scalar chain (Line of Authority)
 Scalar chain refers to the number of levels in
the hierarchy from the ultimate authority to the
lowest level in the organization.
 The orders or communications should pass
through proper channels of authority along the
scalar chain.
 It should not be over-stretched and consist of
too-many levels.
 A hierarchy is necessary for unity of direction.
But lateral communication is also fundamental,
as long as superiors know that such
communication is taking place.
10. Order
13. Initiative
 The management should observe the principle
of 'right place for everything and for every  Allowing all personnel to show their initiative in
man.’
 Both material order and social order are
some way is a source of strength for the
necessary. The former minimizes lost time and organization. Initiative is to think and implement
useless handling of materials. The latter is
achieved through organization and selection. a plan.
11. Equity 14. Esprit de Corps
 In running a business a ‘combination of
 Management must foster the morale of its
kindliness and justice’ is needed. It requires
managers to be free from all prejudices, employees. This means team strength. He further
personal likes or dislikes.
suggests that: “real talent is needed to coordinate
12. Stability of Tenure of Personnel
 Employees work better if job security and
effort, encourage keenness, use each person’s
career progress are assured to them. An insecure abilities, and reward each one’s merit without
tenure and a high rate of employee turnover will
affect the organization adversely. arousing possible jealousies and disturbing
harmonious relations.”
 Henri Fayol's management theory is a simple model of how management interacts with personnel.
 Fayol's management theory covers concepts in a broad way, so almost any business can apply his theory of
management.
 Today the business community considers Fayol's classical management theory as a relevant guide to
productively managing staff.
 The management theory of Henri Fayol includes 14 principles of management. From these principles, Fayol
concluded that management should interact with personnel in five basic ways in order to control and plan
production/ Fayol's definition of management roles and actions distinguishes between Five Elements:

1. Planning. According to Fayol's theory, management must plan and schedule every part of industrial processes.

2. Organizing. Henri Fayol argued that in addition to planning a manufacturing process, management must also
make certain all of the necessary resources (raw materials, personnel, etc.) came together at the appropriate time
of production.

3. Commanding. Henri Fayol's management theory states that management must encourage and direct
personnel activity.

4. Coordinating. According to the management theory of Henri Fayol, management must make certain that
personnel works together in a cooperative fashion.

5. Controlling. The final management activity, according to Henri Fayol, is for the manager to evaluate and
ensure that personnel follow management's commands.
iii. Max Weber: The Bureaucratic Theory: 1864-1920
 An organization is viewed as a type of social relationship that has regulations enforced,
o Has a few people at the top, making decisions and a chain of middle managers and lower-level
people below them carrying out specific functions.
 Max Weber analyzed bureaucracy as the most logical and rational structure for large organizations.
 Orders come from top down in a manner mimicking the military creating consistency and precision.
 Rules rather than people form the basis of an organization.
 Efficiency in bureaucracies comes from:
1. clearly defined and specialized functions;
2. use of legal authority;
3. hierarchical form;
4. written rules and procedures
5. technically trained bureaucrats
6. appointment to positions based on technical expertise
7. promotions based on competence
8. clearly defined career paths.
 Bureaucratic Principles
Written rules

System of task A Bureaucracy Hierarchy of

relationships should have authority

Fair evaluation
and reward
Principles Of The Theory Of Bureaucracy: Developed By Max Weber (1864-
1920), A German Professor Of Sociology.
Principle 1:
 In a bureaucracy, a manager’s formal authority
derives from the position he or she holds in the
organization.
 Authority - the power to hold people accountable
for their actions and to make decisions in reference
to the use of organizational resources.
In today’s business models, this type of theory is
not very common. Nowadays, we see more of an
informal authority approach in which there is
personal expertise, technical knowledge, moral
worth, and the ability to lead and to generate
commitment from subordinates, without the use of
this absolute power from one individual.
Principle 2:
 In a bureaucracy, people should occupy positions
because of their performance, not because of their
social standing.
 Some organizations and industries are still affected
by social networks in which personal contacts and
relations, not job-related skills, influence hiring and
promotional decisions. The old ways, of not what you
know, but who you know, are still around in today’s
society, but it can only get you so far. In today’s
business world, what you know and educational
knowledge, play a very important part in moving up the
corporate latter and being able to maintain a managerial
position requires the utilization of staying current on up
to date techniques and information.
Principle 3:
 The extent of each position’s formal authority and
task responsibilities, and its relationship to other
positions in the organization should be clearly
specified.
 When the task and authority associated with various
positions in the organization are clearly specified,
managers and workers know what is expected of them
and what to expect from each other.
Most organizations should and are clearly defining task
and position responsibilities. Job descriptions should
include all facets of an employee held position.
Clarification of one’s job expectations is essential for
all five business functions in order to manage and
maintain a high level, and measurable level of success
for all organizations.
Principle 4:
 Authority can be exercised effectively in an
organization when positions are arranged hierarchically,
so employees know whom to report to and who reports
to them.
 Managers must create an organizational hierarchy of
authority that makes it clear who reports to whom and to
whom managers and workers should go if conflicts or
problems arise.
Today’s business models utilize the initiative factor in
which employees are given the ability to act on their
own, without direction from a superior. This
empowerment of employees relieves the stress of
constant supervision and allows supervisors and
managers to concentrate more on other administrative
duties. The balance between a vertical and horizontal
organizational structure is more widely used in today’s
business models.
Principle 5:
 Managers must create a well defined system of rules, standard operating procedures,
and norms so that they can effectively control behavior within an organization.
 Standard Operating Procedures (SOPs) are specific sets of written instructions about
how to perform a certain aspect of a task.
Most companies have SOPs and require employees to learn and follow them. We have
seen how in addition to following rules and regulations, many organizations have
allowed for creativity and innovation to supersede the common way of conducting
business where it was once said, “rules are rules and they could never be broken”.
Guidelines are needed and common sense is always important, but have an open line
of communication to new ideas and thoughts is essential in today’s business society.
 Characteristics Of The Bureaucratic Model
Fixed division of labor and
specialization
 All responsibilities in an organization are
specialized, with each area having a
specific set of official duties and rights.
 Employees in the area have the expertise
to carry out the task
 In hospital, specific parts of patient care
(the job) are assigned to different
individuals or groups
 Eg nurses, dieticians, laboratory
workers, and doctors all provide a part
of care which the patient needs
Hierarchy of offices
 Employees are organized and ranked
according to their degree of authority
within the organization.
 Top positions administer and control the
lower positions.
 However, lower offices should maintain a
right to appeal decisions made higher in
the hierarchy.
 Each hierarchy has its own sphere of
competence, allowing for a clear chain of
command, control and order organization.
 Eg the hospital director/superintendant and the
chief matron/nurse manager are the top most
hospital haerarchies, while patient attendants
and cleaners are at the bottom.
 Characteristics Of The Bureaucratic Model
Rational-legal authority
 Authority is given to officials based on their
skills and formal positions given to them and not
on individual aspects of authority like wealth,
position, ownership, heritage etc. Management is
separated from the ownership of the organization-
career official work for a salary and do not own
what they administer.
Creation of rules to govern performance
 Rules and procedures guide all daily
organizational activities. They should be easily
understood and leaders should not change them
anyhow. Administrative acts and decisions are
recorded in writing.
 Eg. procedure and policy manuals prescribe
types of behaviour for performing a procedure
to policies to be followed. These will also act
as guidelines when taking disciplinary actions
against an employee.
Separation of personal from official property and
rights
 Officials do not own the resources necessary for the
performance of their assigned functions but are
accountable for their use. Official and private business
and income are strictly separated. Offices or resources
cannot be inherited, sold, etc.
Selection based on qualifications
 Officials are recruited based on professional
qualifications, not on their relation with the leader or
social rank , and are appointed, not elected, to the office.
People are compensated with fixed salaries which
should match with their qualifications and not with
benefits such as rights to land, power.
Clear career paths
 Employment in the organizations should be seen as a
career for officials. Their work is rewarded by prospects
of career advancement and promotion is granted
according to seniority and/or achievement. After an
introduction period, the employee is given tenure, which
protects the employee from unwarranted dismissal.
Characteristics Of The Bureaucratic Model…..

 Bureaucracy
Hierarchy

Division of Labor

Consistency

Qualification

Professional–Private Separation

Devotion to Purpose

Advancement / Seniority
  Authority and its flow

HIERARCHY  subordination

 “Such a system offers the

Highest Office
governed the possibility of
appealing the decision of a
High Office High Office lower office to its higher
authority”
Low Office Low Office Low Office

Lowest Office Lowest Office Lowest Office Lowest Office

DIVISION OF LABOR  Specialization

 Separation of roles and

Executive duties
 “’higher’ authority [is not]
Policy &
Operations
Planning authorized to take over the
business of the ‘lower’”
Strategic Policy Regional
Planning Development Management

Special Legislative
Office Staffing Maintenance
Projects Relations
  Rules regulate all matters
CONSISTENCY “abstractly.”
 i.e. no one is special

Not Special  Management

 Duties
Not Special Not Special
 The “Governed”

Not Special Not Special Not Special

Not Special Not Special Not Special Not Special

QUALIFICATION  Training and qualification

is the number one

PhD
requisite.
 How to manage

Master’s Master’s  How to carry out duties

 Knowledge of the rules

Bachelor’s Bachelor’s Bachelor’s

Associate’s Associate’s Associate’s Associate’s

SEPARATION OF
PROFESSIONAL &  The bureau is
PRIVATE separate from the
“private domicile of
Orders filtering
of web surfing the official”
 resources
Always makes Loves work as a  time
personal calls on break from the
personal cell phone family

I certainly DID NOT Loves being able Wouldn’t even

use my office’s copier
to print these notes for to leave work at THINK of
you home stealing pens

Never uses Glad s/he doesn’t Treats company car Wouldn’t even THINK
photocopier for have to live in this much better than of stealing rubber
own tax forms cubicle personal POS cleaning gloves
DEVOTION TO
PURPOSE/DUTY  Devotion is to your work and

role, not to person above you.

Devoted to
Bureau
Management  “[official] is not considered

Devoted to Devoted to the personal servant of a

Division Division
Management Management
ruler”
Devoted to Devoted to Devoted to
Planning Policy Region

Devoted to Devoted to Devoted to Devoted to

Project Schmoozing Office Toilets
ADVANCEMENT AND
SENIORITY  The unspoken
Promoted here 6 agreement...
months ago
(and don’t know what the
Hell I’m doing)
1. you hang around

Promoted here 2. you climb the ladder

7 years ago
3. you get taken care of
Promoted here
17 years ago
 Salary and Pension

Started here 25
years ago
Advantages of bureaucratic approach:
 Protects employees from unfair rulings
from leaders which gives a greater sense
of security to the employees.
 Creates an opportunity for employees to
become specialists within one specific
area, increasing the effectiveness and
efficiency in each area of the
organization.
 Creativity and stability are promoted
within their respective duties and sub-
tasks
Disadvantages of bureaucratic approach:
 It is difficult to determine who is responsible for having
made the decision, creating a feeling of powerlessness
amongst employees. There is diffusion of responsibility
and subsequent refusal to make a decision. Eg To get
something done you need 6 different approvals on 6
different forms and each refusing to give approval until
the other 5 have given theirs
 Organizational structure is too inflexible to effect
necessary changes efficiently. It is too difficult to
determine specific individual contribution to successful
patient care outcome. The top bottom hierarchy does
not utilize specialized lower level to make decisions in
their field of specialty
 Overspecialization, makes individuals not aware of
larger consequences of their actions. Not allowing
people to use common sense, as everything must be as
is written by the law. There is rigidity making decision-
making slow or even impossible when facing some
unusual case, and similarly delaying change and
evolution
 2.2 Elten Mayo: The Human Relations Approach
 Although many in industry were quick to embrace the classic theoretical approach, its implementation
commonly left employees unfulfilled.
 The Hawthorne Studies only served to raise further questions concerning the employee’s role in the
organization.
 These events then set the stage for the emergence of another organizational communication approach: the
Human Relations (HR) approach.
Classical Approach Doesn’t:
 Account for individual needs of employees
 Non-financial reward
 Social interaction
• The Behaviorists Took Management Another Step Forward
• They focused on employees
• As individuals
• As parts of work groups
• As persons with needs to be met by the organization
 Making A Case For Human Needs: The Hawthorne Studies
 The Hawthorne Studies entail a research program conducted by Elton Mayo and his
colleagues at the Western Electric Plant in Cicero, Illinois from 1927 to 1932.
 The plant’s manager asked Mayo and his team of researchers to help increase employee
morale and overall productivity at the Hawthorne Plant.
 Their findings asserted that employee morale and productivity improved when workers were
allowed to interact and an overseer was present.
 Influenced transitions from classical approach to human relations approach
 Hawthorne Studies
 Mayo interested in how changes in work environment would impact productivity
 Hawthorne Effect
 The more attention given to someone, the more likely their behavior will change
 Social factors influence productivity

37
 The role that Mayo had in the development of management is usually associated with his
discovery of;
• Social man and the need for this in the work place.
• Mayo found that workers acted according to sentiments and emotion.
• He felt that if you treated the worker with respect and tried to meet their needs than they
would be a better worker for you and both management and the employee would benefit.
• The Hawthorne Studies (or Hawthorne Experiments) were conducted from 1927 to 1932 at
the Western Electric Hawthorne Works in Cicero, Illinois (a suburb of Chicago)
o The experiments
• There were four main phases to the Hawthorne experiments:
• The illumination experiments
• The relay assembly test room
• The interviewing program
• The bank wiring observation room
 1.THE ILLUMINATION EXPERIMENTS:
Variations In Light Levels
The workers were divided into two
groups

A. experiment group B. control group

Performance Recording Device

2.The relay assembly test room:
Determine the effect of changes in various job conditions on group productivity

The experiment was divided

into 13 periods during which
the workers were subjected
to a series of planned and
controlled changes to their:

A. Conditions of work
B. Hours of work
C. Rest pauses
D. Provision of refreshments

Women in the Relay Assembly

 3.The interviewing program:
insights about the human behaviour in the company.

20,000 interviews

A. An impartial and non-

judgmental approach
B. Concentrated on
listening
it was discovered that workers’
behaviour was being influenced by
group behaviour.
Interviews
period

30 min 90 min
Factory Cabling Department
4.The bank wiring observation room: Determination and analysis of
social organisation at work
• to find out the impact of small groups on the individuals. 

14 men

The group developed it’s own pattern of informal social relations

and norms of what constituted proper behaviour

Group pressures on individual workers were stonger than financial

incentives offered by management
o Mayo’s conclusion:
 That satisfaction must depend to a large extent on informal social relationships
• In the group
• Between workers and their managers
 Satisfaction at work influences production
 Group pressures on individual workers were stronger than financial incentives offered by
management
 The group thought that if they increased production, the management would raise the
standard level of piece rate
Benefits of the research:
 One of the most important social science investigations into ‘humanising’ work
 Emphasised the importance of:
 The ‘informal’ organisation
 Wider social needs
 Group values and norms, in influencing behaviour at work
 2.3 THE MODERN ERA
a. Systems Approach
 The systems approach stresses that managers should view an organization as a set of
interdependent parts, such as people, structure, tasks, and technology, that try to attain
diverse objectives in a changing environment.
 A system is defined as a unified whole or set of interrelated and interacting elements/components.
 The application of systems theory to management has made it easier for managers to see the
organization as an entity of interrelated parts.
 It also has helped to integrate the contributions of the schools that dominated early
management thought.
 A system is an entity composed of interdependent parts each of which contributes to the
characteristics of the whole
 A system consists of several components or subsystems which depend on each other.
 A system processes input into outputs. Therefore, each system consists of boundaries,
components, interactions between components, inputs and outputs.
 It views organization as a system composed of interconnected - and mutually
dependent - sub-systems.
Components: There are five basic, interdependent parts of the organizing system,
namely:
 The individual
 The formal and informal organization
 Patterns of behavior emerging from role demands of the organization,
 Role comprehension of the individual, and
 The physical environment in which individuals work.

 Linking processes: components of an organization are required to operate in an organized and

correlated manner.
 linking processes consist of communication, balance and decision making.
o Communication: is a means for eliciting action, exerting control and effecting coordination to link
decision centre in the system in a composite form.
o Balance: is the equilibrium between different parts of the system to keep a harmoniously structured
relationship with one another.
o Decision analysis: is considered to be a linking process in the systems approach.
 The System Approach: Open and Closed Systems
 There are two major types of systems, closed and open.
 An open system is characterized by interaction with the external environment.
 Managers are concerned primarily with open systems because all organizations are open
systems. All organizations are dependent on the world outside themselves for survival.
• Energy, information, and material are exchanged with the environment through the
system's permeable boundaries.
• The system is not self-sufficient but dependent on energy, information, and materials from
outside. In addition, the open system has the capacity to adapt to changes in the external
environment and must do so to continue operating.
 A closed system has firm, fixed boundaries; its operation is relatively independent of the
environment outside the system.
• A watch is a familiar example of a closed system. The interdependent parts of a watch
move continuously and precisely once the watch is wound or a battery is inserted. As long
as the watch has sufficient energy stored within it, its system is independent of the
external environment.
b. The Contingency Approach
 The contingency approach stresses that the appropriateness of various man­agement techniques
is determined by the situation.
• Because there are so many factors in both the organization and the environment, there is no single
"best" way to manage.
• The most effective technique in a particular case is the one most appropriate for that situation.
 The contingency approach tries to match specific techniques or concepts of managing to
the specific situation at hand in order to attain organizational objectives most effectively.
 The contingency approach focuses on situational differences both between and within
organizations.
 It tries to determine what the significant variables of the situation are and how they
influence organizational effectiveness.
 It emphasizes that “there is no one best way to manage” and that it depends on various
situational factors
 The methodology of the contingency approach can be expressed as a four-step process.
 The Four-step process in contingency approach
1. The manager must become familiar with the tools of
the management profession that have proven effective.
 These include understanding the management process,
individual and group behavior, systems analysis,
techniques for planning and control, and quantitative
decision-making techniques.
2.Every management concept and technique has both
advantages and disadvantages, or trade-offs, when
applied to a specific situation.
 The manager must be able to predict the probable
consequences, both good and bad, of applying a given
technique or concept. To give a simple example,
offering to double the salary of all employees in
exchange for added work would probably increase
their motivation considerably, at least temporarily.
Traded off against this are the added costs, which may
cause the organization to go broke.
3.The manager needs to be able to
interpret the situation properly.
 It must be determined correctly which
factors are most important in a given
situation and what effect changing one
or more of these variables would
probably have.
4.The manager must be able to match
the specific techniques with the fewest
potential drawbacks to the specific
situation,
• thereby attaining organizational
objectives in the most effective way
under the existing circumstances.
c. The Quantitative Approach
 The quantitative approach to management is management by the numbers. It
began during World War II with emphasizes the use of mathematical and
statistical techniques to finding right answers to managerial problems, which
are solved through decision making/efforts to find mathematical and
statistical solutions to military problems.
 Quantitative decision-making is the use of mathematical methods and data
analysis, as the means to analyze and help make educated decisions about
complex problems.
 The theory stresses the importance of diverse decision situations and the
means of perfecting them.
 It recommends the process of optimal decision-making assembling accurate
and reliable data with quantitative precision and perfection.
 The quantitative approach includes such things as:

 Computer simulations: What will the company’s payroll look like in 10 years if it gives

everyone a 10 percent raise every year?

 Optimization models: What’s the best price the company can charge for its new product, to

maximize profit but not scare away potential customers? (Optimization means to make a
system or design as effective as possible.)
 Critical-path analysis: How long will it really take to get the new product to market, with

separate teams working on different parts of the project all at the same time?

 Techniques such as these are now standard practice in management, especially in making

planning and control decisions.

 Business re-engineering/BPR; BSC; Redesigning’ Reengineering…..

 SELF ASSESSMENT QUESTIONS
1. Provide a note on various management thoughts and approaches which are mainly applicable or appropriate in
present context.

2. Critically examine and explain how political; social; economic; and technological forces contributed to
evolved lessons in management thoughts.

3. Weber’s ideal bureaucracy suggested strict adherence to rules and regulations, this lead to redtapism in the
organization. Discuss how strict adherence to rules and regulations causes poor work environment.

4. Classical theory viewed organization as closed system in which environmental dynamics and their effect on
management have been discounted. Provide your professional critics on this view and justify why it is relevant
or irrelevant in the contemporary world.

5. Why is it important for every manager to understand the many different management theories that have been
develop? Describe various School of Thoughts prevalent from time to time. Which school of management
thoughts makes the most sense to you? Why?
END OF CHAPTER
TWO