 Management thought refers to the theories

that guide management of people in the

organisations
 Initially, these theories developed out of
practical experience of managers in the
industrial enterprises. Later on, they
borrowed ideas from other fields of study
like science, anthropology, sociology etc.
 Pre-scientific theories

 Classical theories
a. Taylor’s scientific management theory
b. Fayol’s administrative theory
c. Weber’s bureaucracy theory

 Behavioral theories
a. Human relations theory
b. Behavioral science theory

 Modern management theories

a. Quantitative theory
b. Systems theory
c. Contingency theory
d. Operational theory
 Important contributions are made by
- Charles Babbage
- James Montgomery
- Robert Owen
- Andrew Ure
- Charles Dupin
These theories solved specific organizational
problems but these are not universally accepted
theories that can be applied to all organisations
 Represent early works on management and
focus on increasing industrial output by
providing financial incentives to employees.
 Developed through three main streams:
Scientific management, Administrative
theory and Bureaucracy
 Taylor is regarded as Father of Scientific
Management.
 Focused on finding the best way to do the
job by eliminating wastage of men and
material.
 Developed time and motion studies to find
optimum time and nature of operations for
successful completion of tasks.
 Introduced differential wage rate system to
pay more to productive workers.
 Rule of thumb should be replaced with
science
 There should be harmony, not discord in
group actions.
 Cooperation, not individualism
 Maximum output, not restricted output
 Development of workers to their fullest
capacity.
 Time study
 Motion study
 Scientific task planning
 Standardization and simplification
 Differential piece rate system
 Functional foremanship
 Better management through scientific methods
 Discovered true capacity of workers
 Scientific selection of workers
 Mental revolution on the part of employers and
employees.
Limitations
 Unrealistic assumptions
 Mechanistic approach
 Exploitation of labour
 Impracticable
 Narrow view
 Fayol focused on managing the organisation
 His theory revolves around

-Activities of a business
-Functions of a manager
-Abilities of managers:
-Principles of management
 Division of work
 Authority and responsibility
 Unity of command
 Unity of direction
 Discipline
 Subordination of individual interest to general interest
 Remuneration
 Centralization
 Scaler chain
 Order
 Equity
 Stability of tenure of personnel
 Initiative
 Espirit-de-corps
 His principles are widely accepted in
business and non-business world.
 He pioneered in highlighting the principles of
management
Criticism
 Too formal
 Vague
 Inconsistency
 Historical value
Basis of comparison Taylor Fayol
Aim To increase production at To increase overall
the shop level production of the
organization
Focus On improving workers’ On improving overall
output through work administration through
simplification and general principles
standardization
Management View From bottom to top From top to bottom
Results Scientific observation and Universal truths developed
measurement from personal experiences
Major contribution Science of industrial A systematic theory of
management management
Perspective Narrow Wider
Aspects studied Micro aspect-management Macro aspect-management
of jobs of total organaization
 Max Weber introduced the rational-legal
authority system/model to manage the
business organizations. His model is
characterized by
- Division of work
- Rules and regulations
- Hierarchy of authority
- Technical competence
- Record keeping
- Impersonal relations
 Advantages of specialization
 Rationality leads to efficiency
 Leads to optimum utilization of resources
 Depersonalization leads to equal treatment of all the
workers
 Facilitates growth of large-scale organizations
Limitations
 Ignores the sentiments of human beings
 Hampers human creativity and innovativeness
 Ignores the role of informal organizations
 Strict rules make the organizations procedure- oriented
rather than goal- oriented
 Written rules and regulations deny the benefits of open
communication
 Views organizations as closed systems with little or no
interaction with the environment.
 These theories focus on organisational goals
along with satisfaction of human needs.
 Shift in focus from workplace conditions to
human side of the organisation
 People- oriented approach substituted the
production- oriented approach
 Two important theories:
- Human relations theory
- Behavioural science theory
 Elton Mayo, the father of Human relation
approach focuses on increasing
organizational productivity by increasing the
morale of workers
 Informal groups are important complements
to formal groups
 Social groups are more important than
financial incentives to motivate the workers
 Worker is a social man rather than rational
man motivated by financial incentives
 Work is considered as a group activity and
not as operations performed by individuals.
 Social and psychological factors influence
employee behaviour and productivity more
than physical work conditions
 Focus on organizational efficiency through satisfaction of
social and psychological needs of the workers
 Workers are an important part of the informal groups
 Participative management is better than authoritarian
management
Limitations
They relate to
 Design of the theory: social needs are secondary to
physiological needs
 Analysis of the theory: group dynamics may not be as
important as emphasized upon
 Interpretation of the theory: cordial relations are over
emphasized . Conflict of opinion also generates new ideas
 Human relations philosophy: informal relations are as
important as formal motivation, communication and
leadership styles
 It applies scientific vision to human relations
theory
 Concepts from Psychology, Sociology and
Anthropology are applied to study human
behaviour
 Psychology – Study of individual behaviour
 Sociology – Study of human behaviour in groups
 Anthropology - Study of human behaviour as
individuals and members of groups
 Concepts from various disciplines are tested
before applying them in business organisations.
 Several sociologists and psychologists like
Abraham Maslow, Federick Herzberg, MC Gregor,
Douglas, Rensis Likert, Kurt Lewin, Keith davis,
Charles Angris,George Homans and others have
made significant contribution to the
development of this approach.
 This approach is an extension and improvement
of human relations movement. As this approach
suggested that individuals differ in their
attitudes, perceptions, their needs and goals also
differ from organisation’s needs and goals. The
need is to achieve fusion between organisation’s
goals and human needs.
Human relations
1. Focus on individual behaviour
and needs.
2. Emphasizes on interpersonal
relationships.
3. Views worker as ‘social man’
4. Always views group conflict as
a negative force.
5. Views organisation as a social
system
6.Emphasis on motivation,
morale, formal organisation
system and job satisfaction
6. Narrow scope as based on
Behavioural Approach
Focus on groups and group
behaviour
Emphasizes on group
relationships.
Views worker as ‘self actualising
man’
Views group conflict as a source
of new ideas and innovations.
Views organisation as a socio-
technical system
6.Emphasis on group dynamics,
formal organisation structure and
motivation through job
enrichment
Wide scope as based on Human
 These theories are responsive to environment changes
 They view organisations as dynamic open systems having
multiple objectives
 Management is multi-disciplinary and draws knowledge
from various fields to solve complex business problems
 They forecast environment changes through scientific
techniques and discount them to the present business
situations
 These theories include:
- Quantitative theory
- Systems theory
- Contingency theory
 It uses the services of quantitative specialists
to apply inter-disciplinary techniques to
solve business problems
 It includes:
Management science: It uses mathematical
models like PERT, CPM, games theory etc. to
solve business problems
Operations management: It applies
quantitative techniques of inventory
management, statistical quality control etc.
to manage the production and delivery of
goods and services
 -Management information system: It uses
computer based information to make
business decisions
 It uses quantifiable data to frame
mathematical models and handles complex
decision- making problems
 It uses comprehensive information through
computers which could not otherwise have
been available
Limitations
- It cannot be applied to study human
behaviour as it cannot be predicted through
mathematical equations
- The models may be used more for analysing
the results than used for making decisions
- All the variables affecting the business
decisions cannot be quantified in numeric
terms
- It may land up making satisfying decisions
rather than optimum decisions because of
constraints of time and cost to collect the
relevant data.
 It takes a broad view of the organisation and
views it as an entity composed of different
parts
 The parts are the sub-systems of the
organisation and help to achieve goals of the
larger system
 It considers the impact of near and future
environment on organisational activities
 It deals with different fields of study to deal
with different components of society
 Sub-system : each part of the bigger whole
is a sub-system
 Synergy : the sum of parts is less than that
of a whole
 Open and Closed system : An open system
actively interacts with the environment ant
the closed system has very little interaction
with the environment. Practically all
organisations are open systems
 System boundary : it is the boundary that
seperates it from the environment. It is
flexible in case of open system and non-
flexible in case of closed system
 Flow : it represents movement of inputs
from the environment to the system and
outputs from the system to the environment
 Feedback : it helps in knowing the response
of the environment to the organisational
outputs
 It is not an independent theory of
management
 It applies management principles depending
on the situation as there is no single solution
to all kinds of problems
 If workers are skilled, participative style or
behavioural management theory is adopted
 If workers are unskilled, classical
management principles are more appropriate
 Management is situational in nature and
applies ‘if’ and ‘then’ approach to
management
 It is an integration of different schools of
thought
 It is practical in nature as it finds solutions after
analysing the problems
 It is adaptive in nature and does not presume a
pre-designed organisation structure
Limitations
 It does not follow the concept of universality of
principles
 What this theory asserts was said by Fayol also.
It therefore adds nothing new to the
management thought.