Schools of Business Management

Different School of
Management Thoughts
By
Kartikey
Symbiosis Law School

The Classical
Management Perspective


The Classical Perspective on
management emerged during the
nineteenth & and early twentieth century

The Classical

Scientific Management
F.W. Taylor(Father of Scientific
Management)
 Introduced the concept of Scientific
Management
 Concerned with improving the performance of
individual workers (i.e. operational efficiency)
 Grew out of the industrial revolution's labor
shortage at the beginning of the twentieth
century


The Classical
Elements of Scientific Management


Time and Motion Study



Piece Work Pay System/ Differential Rate
System



Fatigue study

The Classical
Principles of Scientific Management:
Replacing Rule of Thumb with Science
Harmony in Group Action
 Cooperation
 Maximum Output
 Development of workers


Steps in
Scientific Management

The Classical Management
Perspective (cont’d)

Henry Gantt
 He was an early associate of Fredrick W.
Taylor.
 Developed other techniques, including the
Gantt chart, to improve working efficiency
through planning/scheduling

Schools of Business Management

Perspective (cont’d



This is a Basic Gantt chart example. It
shows tasks in a Security and Access
Control project. Tasks are outlined in two
sections. Each task uses a yellow triangle
to indicate the start date of the task and a
green down triangle to indicate the finish
date of the task. Also shown on this
schedule are the responsible subcontractors for the project (in the column
labeled R-E-S-P).

Perspective
Frank & Lillian Gilberth
 Reduced the number of movements in
bricklaying, resulting in increased output
of 200%.
 Both collaborated fatigue and motion
studies

Perspective (Administrative
Mgmt)
Administrative Management


A theory that focuses on managing the
total organization and not only on
productivity of individual.

The Classical
Management Perspective (Administrative
Mgmt)

Max Weber
 He developed a theory of authority structures
and relations Bureaucracy- ideal type of
organization
 Focused on:
 division of labor
 ‡ clearly defined hierarchy
 ‡ detailed rules and regulations


‡ impersonal relationships

Henri Fayol (1841-1925)
Henri Fayol was a French mining engineer
and management theorist. He developed
the theory of Scientific Management. He
studied at the mining school "Ecole
Nationale Superieure des Mines" in SaintEtienne of France
 He is well known as the father of modern
management theory. Fayol started as an
engineer at a mining company and he
became its managing director in 1888.


Henri Fayol (1841-1925)
Fayol's contributions were first published in book
titled "Administration Industrielle et Generale",
in 1916.
 He looked at the problems of managing an
organisation from top management point of
view.
 He has used the term 'administration' instead of
'management'.
 His contributions are generally termed as
operational management or administrative
management.


Managerial Qualities
According to Fayol a manager must have following
qualities:
 Physical (health, vigour, and address)
 Mental (ability to understand and learn,
judgement, mental vigour, and capability)
 Moral (energy, firmness, initiative, loyalty,
tact, and dignity)
 Education (general acquaintance)
 Technical (peculiar to the function being
performed)
 Experience (arising form the work).

The Classical
Management Perspective (Administrative Mgmt

)

Henry Fayol said,
Activities could be divided into six groups:
1. Technical (related to product)
2. Commercial (buying, selling )
3. Financial (Search for capital & use)
4. Security (protection of property and
person)
5. Accounting (including statistics)
6. Management (P,O C)

Fayol’s 14 Principles for Organizational
Design and Effective Administration
1. Division of Labor: allows for job specialization.


Fayol noted firms can have too much specialization leading
to quality output and proper worker involvement.

2. Authority and Responsibility: Fayol included
both formal and informal authority resulting from
special expertise.
3. Unity of Command: Employees should have only
one boss.
4. Line of Authority: a clear chain from top to
bottom of the firm.
5. Centralization: the degree to which authority
rests at the very top.

6. Unity of Direction: One plan of action to guide
the organization.
7. Equity: Treat all employees fairly in justice and
respect.
8. Order: Each employee is put where they have
the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful
employees needed.

11. Remuneration of Personnel: The payment
system contributes to success.
12. Stability of Tenure: Long-term employment
is important.
13. General interest over individual interest:
The organization takes precedence over the
individual.
14. Esprit de corps: Share enthusiasm or
devotion to the organization.

The Classical
Management Perspective (Administrative Mgmt)

Mary Parker Follet (1863-1933)
 Stressed the importance of organizations
establishing common goals to its
employees.
 Her Holistic´ model of control took into
account not just individuals and groups,
but the effects of environmental factors
also.


Perspective Today
CONTRIBUTION:
 Laid the foundation for later theoretical
developments.
 Identified management processes,
functions, and skills.
 Focused attention on management as a
valid subject of scientific inquiry

Perspective Today
Limitations :
 More appropriate approach for use in
traditional, stable, simple organizations.
 Prescribed universal procedures that are
not appropriate in some settings.
 Employees viewed as tools rather than as
resources

The Behavioral

Hugo Munsterberg (1863±1916)
 A German psychologist, considered the father of
industrial psychology, wrote Psychology and
Industrial Efficiency,´ a pioneering work in the
practice of applying psychological concepts to
industrial settings.


Neo-Classical Period
Human

relations Approach
Behavioral Science
Approach

Human relations Approach: The
Hawthorne Studies
Conducted by Elton Mayo and associates
at Western Electric (1927±1932)
 Illumination study.
 Elton Mayo's studies grew out of preliminary
experiments at the Hawthorne plant from 1924
to 1927 on the effect of light on
productivity.
 Those experiments showed no clear connection
between productivity and the amount of
illumination but researchers began to wonder
what kind of changes would influence output.


The Hawthorne Studies






Relay Assembly Test room.
Mass Interview Program.
Factors Studies: Impact of Working Hours, Resting
Hour & Proportionate Compensation over Productivity
The major finding of the study was that irrespective of
the experimental manipulation, worker production
seemed to improve continually.
One reasonable conclusion is that the workers were
happy to receive attention from the researchers who
expressed an interest in them. Originally, the study was
expected to last one year, but since the findings were
inexplicable when the researchers tried to relate the
worker's efficiency to manipulated physical conditions,
the project was incrementally extended to five years.

Elton Mayo's Contribution



Bank Wiring observation Room



Factors:
Impact
of
formally
unmonitored work over productivity

Findings:
 The aptitudes of individuals are
imperfect
predictors
of
job
performance. Although they give some
indication of the physical and mental
potential of the individual, the amount
produced is strongly influenced by social
factors.




Informal organization affects productivity.
The researchers discovered a group life among
the workers. The studies also showed that the
relations that supervisors develop with workers
tend to influence the manner in which the
workers carry out directives.



Work-group norms affect productivity.
The Hawthorne researchers recognized that
work groups tend to arrive at norms of what is
"a fair day's work.“ They provided the best
systematic description and interpretation of this
phenomenon.



The workplace is a social system. The
researchers came to view the workplace as a
social system made up of interdependent parts.
The worker is a person whose attitudes and
effectiveness are conditioned by social demands
from both inside and outside the work plant.
Informal group within the work plant exercise
strong social controls over the work habits and
attitudes of the individual worker.

The

need for recognition,
security and sense of
belongingness is more
important in determining
workers' morale and
productivity than the physical
conditions under which he
works.

Behavioral Science Approach
Emphasized individual attitudes and
behaviors, and group processes.
 Recognized the importance of behavioral
processes in the workplace
 Abraham Maslow :
 Advanced a theory that employees are
motivated by a hierarchy of needs that
they seek to satisfy.


Douglas McGregor Th:


He Proposed Theory X and Theory Y concepts of
managerial beliefs about people and work

Theory X :
 It assumes that workers have little ambition,
dislike work, want to avoid responsibility, and
need to be closely controlled

Theory Y


It assumes that workers can exercise selfdirection, accept and actually
seek out responsibility, and consider work
to be a natural activity

Chester Barnard’s contribution


In his youth, Barnard worked in a farm,
then studied economics at Harvard
University, earning money tuning pianos
and operating a dance band. Harvard
denied him a BA because of a technicality,
but a number of universities later granted
him honorary doctorates.

Barnard joined the American Telephone
and Telegraph Company (now AT&T) in
1909. In 1927, he became president of
the New Jersey Bell Telephone Company.
 During the Great Depression, he directed
the New Jersey state relief system .He
was president of the United Service
Organizations (USO), 1942-45


Upon retiring from business, he served as
president of the Rockefeller Foundation,
1948-52, and as chairman of the National
Science Foundation, 1952-54.
 End 1950s he was among the first
members of the Society for General
Systems Research


Barnard looked at organizations as
systems of cooperation of human activity,
and noted that they are typically shortlived.
 It is rare for a firm to last more than a
century. Similarly most nations last for less
than a century.


The only organization that can claim a
substantial age is the Roman Catholic
Church.
 According to Barnard, organizations are
not long-lived because they do not meet
the two criteria necessary for survival:
effectiveness and efficiency.


Effectiveness
Effectiveness, is defined as being able to
accomplish stated goals.
 It is the ultimate objective of cooperative
action .
 It Cannot be achieved without cooperation
from employees .


efficiency
He defined efficiency of an organization as
the degree to which that organization is
able to satisfy the motives of the
individuals
 If an organization satisfies the motives of
its members while attaining its explicit
goals, cooperation among its members will
last.


Functions of the Executive


Barnard's classic 1938 book Functions of
the Executive discusses, as the title
suggests, the functions of the executive,
but not from a merely intuitive point of
view, but instead deriving them from his
conception of cooperative systems.

Authority and incentives
Barnard summarized the functions of the
executive as follows:
 Barnard formulated two interesting
theories:
(a) authority
(b) incentives.
Both are seen in the context of a
communication system grounded in seven
essential rules:

The channels of communication should be
definite;
 Everyone should know of the channels of
communication;
 Everyone should have access to the formal
channels of communication;


Lines of communication should be as short and
as direct as possible;
 Competence of persons serving as
communication centers should be adequate;
 The line of communication should not be
interrupted when the organization is functioning;
 Every communication should be authenticated.




Thus, what makes a communication
authoritative rests with the subordinate
rather than with his superior. Barnard's
perspective had affinities to that of Mary
Parker Follett and was very unusual for his
time, and that has remained the case
down to the present day. He seemed to
argue that managers should obtain
authority by treating subordinates with
respect and competence.

Incentives


As for incentives, he proposed two ways
of convincing subordinates to cooperate:
tangible incentives and persuasion. He
gives great importance to persuasion,
much more than to economic incentives.

Incentives
He described general and as well as
specific incentives such as :
 Money and other material inducements;
 Personal non-material opportunities for
distinction;
 Desirable physical conditions of work;
 Ideal benefactions, such as pride of
workmanship etc

Schools of Business Management

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