Unit-1B DIFFERENT SCHOOLS OF MANAGEMENT THOUGHTS.pdf

DIFFERENT SCHOOLS OF
MANAGEMENT THOUGHTS
PREPARED BY PARICHITA BASU
1

Evaluation of management thought
The evolution of management thought is a process
that started in the early days of man. It began since
the period man saw the need to live in groups.
Mighty men were able to organize the masses, share
them into various groups. The sharing was done
accord to the masses' strength, mental capacities,
and intelligence
Since managers also supervise, management can
be interpreted to mean literally “looking over” – i.e.,
making sure people do what they are supposed to
do. ... Managers are, therefore, expected to ensure
greater productivity or, using the current jargon,
'continuous improvement'.
2

Schools Of management thought
3

Management Theories
4

CLASSICAL APPROACH
The classical management theory believes that
employees are strongly motivated by their
physical needs and more specifically, monetary
incentives. As such, organizations that
implement this management style often
incorporate regular opportunities for employees
to be rewarded for their productivity with
incentives.
The classical approach emphasized rationality
and making organizations and workers as
efficient as possible. Two major theories
comprise the classical approach: scientific
management and general administrative.
Definition (2): The classical approach is also
called Management Process, Functional, and
Empirical Approach.
5

Scientific Management by Taylor
 Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of
Scientific Management’ started his career as an operator and rose to the position of chief
engineer. He conducted various experiments during this process which forms the basis of
scientific management. It implies application of scientific principles for studying &
identifying management problems.
 According to Taylor, “Scientific Management is an art of knowing exactly what you want
your men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if
a work is analysed scientifically it will be possible to find one best way to do it.
 Hence scientific management is a thoughtful, organized, dual approach towards the job
of management against hit or miss or Rule of Thumb.
 According to Drucker, “The cost of scientific management is the organized study of work,
the analysis of work into simplest element & systematic management of worker’s
6

Principles of Scientific Management
 Development of Science for each part of
men’s job (replacement of rule of thumb)
 Scientific Selection, Training &
Development of Workers
 Co-operation between Management &
workers or Harmony not discord
 Division of Responsibility
 Mental Revolution
 Maximum Prosperity for Employer &
Employees
7

Techniques of Scientific Management
 Method Study:
The purpose of the outlined study is to find out one vigorous way of performing the job. There are different
ways of performing the job. To ascertain the best way, there are diverse parameters. Right from the
obtainment of raw materials until the ultimate product is presented to the consumer, every pursuit is part of
method research. Taylor devised the idea of the assembly line by applying the method study.
 Motion Study:
Motion study pertains to the study of movements like putting objects, lifting, changing positions and sitting
etc., which are moved while doing a conventional job. Random movements are solicited to be reduced so
that it takes less time to perform the job effectively.
 Time Study:
It circumscribes the conventional time taken to complete a well-defined job. Time regulating devices are
used for each part of the task. The standard time is set for the entirety of the task by taking different
readings. The course of time study will rely upon the frequency and volume of the task, the cycle time of the
process and time measurement costs.
 Fatigue Study:
A person is obliged to feel tired mentally and physically if she or he does not relax while working. The rest
periods will assist one to recover vitality and work again with the same capacity. This will result in improved
potency. Fatigue study tries to define the amount and regularity of rest intervals in accomplishing a task.
8

Criticism of Scientific Management
 Unemployment - Workers feel that management reduces employment opportunities from them through replacement of
men by machines and by increasing human productivity less workers are needed to do work leading to chucking out
from their jobs.
 Exploitation - Workers feel they are exploited as they are not given due share in increasing profits which is due to their
increased productivity. Wages do not rise in proportion as rise in production. Wage payment creates uncertainty &
insecurity (beyond a standard output, there is no increase in wage rate).
 Monotony - Due to excessive specialization the workers are not able to take initiative on their own. Their status is reduced
to being mere cogs in wheel. Jobs become dull. Workers loose interest in jobs and derive little pleasure from work.
 Weakening of Trade Union - To everything is fixed & predetermined by management. So it leaves no room for trade
unions to bargain as everything is standardized, standard output, standard working conditions, standard time etc. This
further weakens trade unions, creates a rift between efficient & in efficient workers according to their wages.
 Over speeding - the scientific management lays standard output, time so they have to rush up and finish the work in
time. These have adverse effect on health of workers. The workers speed up to that standard output, so scientific
management drives the workers to rush towards output and finish work in standard time.
 Expensive - Scientific management is a costly system and a huge investment is required in establishment of planning
dept., standardization, work study, training of workers. It may be beyond reach of small firms. Heavy food investment
leads to increase in overhead costs.
 Time Consuming - Scientific management requires mental revision and complete reorganizing of organization. A lot of
time is required for work, study, standardization & specialization. During this overhauling of organization, the work suffers.
9

Administrative management- Henri
Fayol and Chester I. Barnard
 Whereas scientific management focused on the productivity of the individual worker, the
administrative theory focused on the total organization. Among the well-know contributors
to this theory were Lyndall Urwick, Chester Barnard, Alvin Brown, Henry Dennison, Oliver
Sheldon and Max Weber. However, the most notable of all contributors was Henry Fayol. His
book, General and Industrial Management, had a major impact on the emerging field of
management.
 Chester I. Barnard (1886-1961)-made significant contributions to management in his book,
The Functions of the Executive. One of his contributions was the concept of the informal
organization. Another significant contribution was the acceptance theory of authority,
which states that people have free will and can choose whether to follow management
orders. An order is accepted if the subordinate understands it, is able to comply with it, and
views it as appropriate given the goals of the organization.
10

Fayol’s 14 PrinciPles oF ManageMent
 1. Division of labor. Specialization of labor results in increased productivity. Both managerial and
technical work are amenable to specialization.
 2. Authority. Authority was defined by Fayol as the "right to give orders and the power to exact
obedience". It is needed to carry out managerial responsibilities.
 3. Discipline. Employees must respect the rules that govern the organization.
 4. Unity of command. Employees should receive orders from only one superior.
 5. Unity of direction. Each group of activities in an organization should be grouped together
under one head and one plan.
 6. Subordination of individual interests to the general interest The interests of one person should
not be placed before the interests of the organization as a whole.
 7. Remuneration. Compensation should be based on systematic attempt to reward good
performance.
11

 8. Centralization. The degree to which centralization or decentralization should be adopted depends on the
specific organization, but managers should retain final responsibility to do the tasks successfully.
 9. Scalar chain. A chain of authority should extend from the top to the bottom of the organization. This chain
implements the unity-of-command principle and allows the orderly flow of information.
 10. Order. Human and material resources must be in the right place at the right time.
 11. Equity. Employees should be treated as equally as possible.
 12. Stability of personnel. Successful firms usually had a stable group of employees.
 13. Initiative. Employees should have the freedom to take initiative.
 14. Esprit de corps. Managers should encourage a sense of unity of effort through harmony of interests
12

Gang Plank
 Fayol introduced the concept of Gang Plank in the principle of 'Scalar Chain' to
overcome the problem of delay in taking decisions for urgent matters.
 Gang plank refers to an arrangement in which two managers working at the same
level can communicate with each other directly for quick communication.
 GANG-PLANK is the term used in concern with the scalar chain. Scalar chain refers
to the chain of superiors ranging from the ultimate authority to the lowest level in the
organisation. It should be short-circuited and not carried to the extent it proves
detrimental to the organization, this concept is known as Gang-Plank. In this figure if T
wants to communicate with Y, usually message will move from T to O via S, R, Q and
P and from O it will come down to Y through U, V, W and X. But if it is essential to
communicate immediately a Gang-Plank (dotted line) may be created between T
and Y without weakening the chain of command.
13

Criticism
 Too formal: Fayol’s theory is said to be very formal. However, in any scientific and analytical study facts and observations have to be presented in a formal manner.
 Vague: Some of the concepts have not been properly defined. For example, the principle of division of work does not tell how the task should be divided. Again,
to say that an organization needs coordination is merely to state the obvious. In the words of Herbert Simon, administrative theory suffers from superficiality,
oversimplification and lack of realism.
 Inconsistency: Principles of administrative theory were based on personal experience and limited observations. There is too much generalizations and lack
empirical evidence. They have not been verified under controlled scientific conditions. Some of them are contradictory. For example, the unity of command
principle is incompatible with division of work. The theory does not provide guidance as to which principle should be given precedence over the other.
 Pro-management Bias: Administrative theory does not pay adequate attention to workers. Workers are treated as biological machines or inert instruments in the
work process.
 Historical value: Fayol’s theory was relevant when organizations operated in a stable and predictable environment. It seems less appropriate in the turbulent
environment of today. For example, present-day managers cannot depend entirely on formal authority and must use persuasion to get the work done. Similarly,
the theory views organizations as power centers and do not recognize the role of a democratic form of organization.
 He neglected the structural aspect and his treatment of the organization was considered defective.
 Peter Drucker, observes that some of the worst mistakes of organization-building have been committed by imposing a mechanistic model of an ‘ideal’ or
‘universal’ organization on a living business.
 The empirical base used by Fayol for generating a full-fledged theory of management is too narrow.
 He proceeded too theories functionalism on the basis of functions undertaken in a manufacturing company. It would be unrealistic to expect that the insights and
derivations from the mining organization would be equally applicable to the needs and challenges of other organizations.
 His model, functional structure rapidly becomes costly in terms of time and effort, and runs a high risk of misdirecting the energies of the organization away from
performance.
 His ideas have also been criticised by critics of the classical administrative theory for their value judgments involving ‘should’ or ‘ought’ statements, for lack of a
sufficient experimental basis and for their internal contradictions. Elaborating their criticisms, Barnard and Simon argue that a managerial organization cannot be
explained purely in terms of a set of principles about formal organization structure.
 Fayol have mostly ignored the social-psychological or emotional needs of the employees.
14

BUREAUCRATIC MANAGEMENT – MAX WEBER
(1884-1920)
 The German sociologist Max Weber (1864-1920) argued that bureaucracy constitutes the most
efficient and rational way in which human activity can be organized and that systematic
processes and organized hierarchies are necessary to maintain order, to maximize efficiency,
and to eliminate favoritism.
The 6 bureaucracy characteristics are:
 Task specialization (Specialization and Division of Labor)
 Hierarchical layers of authority
 Formal selection
 Rules and requirements
 Impersonal (Impersonality and Personal Indifference)
 Career orientatioN
15

 Weber defined such as ideal organization as follows:
 The administrative staff of the bureaucratic organisation are responsible for maintaining
coordinated activities of the members.
 Division of labour by financial specialisation
 A well defined hierarchy of authority
 Right adherence to procedures for orderly performance of tasks
 Rules for governing the work behaviours, rights and duties of employees
 Professionalization and training
 Legal authority and power
 Extensive use of written documents
 Good interpersonal relationship
 Assign work and hire personnel based on competence and expensive etc.
16

What Is a Bureaucratic Organization?
 A bureaucratic organization is a form of management that has a pyramidal command
structure. The bureaucratic organization is very organized with a high degree of formality
in the way it operates. Organizational charts generally exist for every department, and
decisions are made through an organized process. A strict command and control
structure is present at all times. Bureaucracies are meant to be orderly, fair and highly
efficient.
 Bureaucratic organizational structures have many layers of management, cascading
down from senior executives to regional managers to departmental managers - all the
way down to shift supervisors who work alongside frontline employees. So, authority is
centered at the top, and information generally flows from the top down. For example, a
senior executive may implement a new policy stating that employees must have all
overtime approved by management before actually working the overtime. The new
policy will go from the desk of the senior executive all the way down to the frontline
employees.
17

Characteristics of Bureaucratic
Organizations
 Rules and job responsibilities are written down and clearly stated
 Clear hierarchy of power is concentrated among a few high-ranking managers
 Appointments and promotions of officers are formal because these officers will be held
accountable
 Employees are hired based on their skills and knowledge, not because of favoritism or luck
 Salaries are tied to a pay-grade system
 Bureaucracies are unable or unwilling to adapt to changing conditions quickly
 Micro-managing is common
18

Criticism of bureaucratic school of
management
 The emphasis only on rules and regulations.
 There will be unnecessary delays in decision-making due to formalities and rules of
Bureaucratic Organization.
 Coordination and communication hampered because of too much formality and rules.
 Bureaucracy involves a lot of paperwork and has just too much level of authority which
results in a lot of wastage of time, effort and money. Not ideal for efficiency.
 Because of its too much formality, a Bureaucratic approach is not suitable for business
organizations. The bureaucratic model may be suitable for government organizations.
 Too much importance is given to the technical qualifications of the employees for promotion
and transfers. Dedication and commitment of the employee are not considered.
19

Neoclassical approach ( behavioural
approach)
 The Neo-Classical approach was evolved over many years because it was found that
classical approach did not achieve complete production efficiency and workplace
harmony. Managers still encountered difficulties and frustrations because people did not
always follow predicted or rational patterns of behaviour. Thus, there was increased interest
in helping managers deal more effectively with the ‘people side’ of their organisation.
The basic features of neoclassical approach are:
 (i) The business organisation is a social system.
 (ii) Human factor is the most important element in the social systeects a modification over
classical theories.
 (iii) It revealed the importance of social and psychological factors in determining worker
productivity and satisfaction.
 (iv) The behaviour of an individual is dominated by the informal group of being a member.
 (v) The aim of the management is to develop social and leadership skills in addition to
technical skills. It must be done for the welfare of the workers.
 (vi) Morale and productivity go hand-to-hand in an organization.
20

HawtHorne’s exPeriMent
 The Hawthorne effect refers to a tendency in some individuals to alter their behavior in response to their awareness
of being observed. This phenomenon implies that when people become aware that they are subjects in an
experiment, the attention they receive from the experimenters may cause them to change their conduct.
Key Takeaways: Hawthorne Effect
 The Hawthorne effect refers to the increase in performance of individuals who are noticed, watched, and paid
attention to by researchers or supervisors.
 In 1958, Henry A. Landsberger coined the term ‘Hawthorne effect’ while evaluating a series of studies at a plant
near Chicago, Western Electric’s Hawthorne Works.
 The novelty effect, demand characteristics and feedback on performance may explain what is widely perceived
as the Hawthorne effect.
 Although the possible implications of the Hawthorne effect remain relevant in many contexts, recent research
findings challenge many of the original conclusions concerning the phenomenon.
There are 4 separate experiments in Hawthorne Studies:
 Illumination Experiments (1924-1927)
 Relay Assembly Test Room Experiments (1927-1932)
 Experiments in Interviewing Workers (1928- 1930)
 Bank Wiring Room Experiments (1931-1932)
21

Illumination Experiment
The first and most influential of these studies is known as the “Illumination Experiment”,
conducted between 1924 and 1927 (sponsored by the National Research Council).
The company had sought to ascertain whether there was a relationship between productivity
and the work environments (e.g., level of lighting in a factory). During the first study, a group of
workers who made electrical relays experienced several changes in lighting. Their performance
was observed in response to the minutest alterations in illumination.
What the original researchers found was that any change in a variable, such as lighting levels,
led to an improvement in productivity. This was true even when the change was negative, such
as a return to poor lighting.
However, these gains in productivity disappeared when the attention faded (Roethlisberg &
Dickson, 1939). The outcome implied that the increase in productivity was merely the result of a
motivational effect upon the company’s workers (Cox, 2000).
Their awareness of being observed had apparently led them to increase their output. It seemed
that increased attention from supervisors could improve job performance.
22

Relay assembly experiments
In one of the studies, researchers chose two women as test subjects and asked them to choose four other workers to join the test
group. Together the women worked in a separate room over the course of five years (1927–1932) assembling telephone relays.
Output was measured mechanically by counting how many finished relays each worker dropped down a chute. This measuring
began in secret two weeks before moving the women to an experiment room and continued throughout the study. In the
experiment room they had a supervisor who discussed changes with their productivity. Some of the variables were:
Giving two 5-minute breaks (after a discussion with them on the best length of time), and then changing to two 10-minute breaks
(not their preference). Productivity increased, but when they received six 5-minute rests, they disliked it and reduced output.
Providing food during the breaks.
Shortening the day by 30 minutes (output went up); shortening it more (output per hour went up, but overall output decreased);
returning to the first condition (where output peaked).
Changing a variable usually increased productivity, even if the variable was just a change back to the original condition. However,
it is said that this is the natural process of the human being adapting to the environment, without knowing the objective of the
experiment occurring. Researchers concluded that the workers worked harder because they thought that they were being
monitored individually.
Researchers hypothesized that choosing one's own coworkers, working as a group, being treated as special (as evidenced by
working in a separate room), and having a sympathetic supervisor were the real reasons for the productivity increase. One
interpretation, mainly due to Elton Mayo,[10] was that "the six individuals became a team and the team gave itself wholeheartedly
and spontaneously to cooperation in the experiment." (There was a second relay assembly test room study whose results were not as
significant as the first experiment.)
23

Bank wiring room experiments
The purpose of the next study was to find out how payment incentives would affect
productivity. The surprising result was that productivity actually decreased. Workers
apparently had become suspicious that their productivity may have been boosted to
justify firing some of the workers later on. The study was conducted by Elton Mayo and
W. Lloyd Warner between 1931 and 1932 on a group of fourteen men who put together
telephone switching equipment. The researchers found that although the workers were
paid according to individual productivity, productivity decreased because the men
were afraid that the company would lower the base rate. Detailed observation of the
men revealed the existence of informal groups or "cliques" within the formal groups.
These cliques developed informal rules of behavior as well as mechanisms to enforce
them. The cliques served to control group members and to manage bosses; when
bosses asked questions, clique members gave the same responses, even if they were
untrue. These results show that workers were more responsive to the social force of their
peer groups than to the control and incentives of management.
24

The Interview Process
Under Mayo and Roethlisberger’s direction, the Hawthorne experiments began to incorporate extensive interviewing. The researchers hoped to glean
details (such as home life or relationship with a spouse or parent) that might play a role in employees’ attitudes towards work and interactions with
supervisors. From 1928 to 1930 Mayo and Roethlisberger oversaw the process of conducting more than 21,000 interviews and worked closely training
researchers in interviewing practices. Mayo and Roethlisberger’s methodology shifted when they discovered that, rather than answering directed
questions, employees expressed themselves more candidly if encouraged to speak openly in what was known as nondirected interviewing. “It
became clear that if a channel for free expression were to be provided, the interview must be a listening rather than a questioning process,” a
research study report noted. “The interview is now defined as a conversation in which the employee is encouraged to express himself freely upon any
topic of his own choosing.”
Interviews, which averaged around 30 minutes, grew to 90 minutes or even two hours in length in a process meant to provide an emotional release.
You always want to feel appreciated and taken into consideration from your boss or any other higher authority you are working with. This can create a
trusting circle between both. Just like when you are supposed to learn from your teacher the materials she is giving you and at the same time you ask
her for her advice on your personal life and start telling her what is going on with you in your daily life. You will feel a close relationship that connects
you with the teacher and you will start to listen to her more and take into consideration what she is giving you as materials because there is a trust
circle between both.
The resulting records, hundreds and hundreds of pages in which employees disclose personal details of their day to day lives, offer an astonishingly
intimate portrait of the American industrial worker in the years leading to and following the Depression. In a pre-computer age, thousands of
comments were sorted into employees’ attitudes about general working conditions, specific jobs, or supervisors and among these categories into
favorable and unfavorable comments used to support interpretations of the data. Both workers’ and supervisors’ comments would aid in the
development of personnel policies and supervisory training, including the subsequent implementation of a routine counseling program for employees
Roethlisberger discovered that what employees found most deeply rewarding were close associations with one another, “informal relationships of
interconnectedness,” as he called them. “Whenever and where it was possible,” he wrote, generated them like crazy. In many cases they found them
so satisfying that they often did all sorts of non logical thingsÃ¢ ‚¬ ¦in order to belong. In Mayo’s broad view, the industrial revolution had shattered
strong ties to the workplace and community experienced by workers in the skilled trades of the 19th century. The social cohesion holding democracy
together, he wrote, was predicated on these collective relationships, and employees’ belief in a sense of common purpose and value of their work.
25

Conclusion of the Hawthorne experiments
 Workers productivity: the productivity of the workers id depended on social and psychological
factors and good physical working conditions are not sufficient to increase their productivity.
 Participation in decision-making: the performance of the employees will improve if they
allowed to participate in the decision making affecting their interests.
 Informal relations: the behaviour and performance of the workers is more influenced by informal
relations rather than formal relations.
 Interest in welfare: employees of the organisation will work with more efficiency when they find
that management of the organisation is interested in their welfare.
 Performance improvement: the performance of the employees of any organisation is going to
improve when they observe that they are treated with respect and dignity by their managers.
 Satisfaction of social and psychological needs: performance cannot be increased only on the
basis of financial incentives. Social and psychological needs must also be satisfied in order to
increase productivity.
 Communication: good communication between the superiors and subordinate can improve
the relations and the productivity of the subordinates.
 Freedom of workers: special attention and freedom to express their views will improve the
performance of the workers.
26

Systems approach
 The systems approach of management states that organizations represent a complex collection of various
components that work together to reach a common goal. An organization is made up of numerous subsystems,
such as different departments. Managers using this theory examine how these subsystems interact with and affect
one another, rather than analyzing them separately. They must also consider their surrounding environment and
external factors that influence or affect these systems. The systems approach further defines an organization by
dividing it into different components. These components demonstrate how different parts of the organization work
together toward a common goal:
 Inputs: Inputs represent the factors that are needed to create goods and services. For example, inputs may include
raw materials, capital, technology or information.
 Transformational process: Transformational processes represent the activities or abilities that convert the
organization's inputs into outputs. For example, these processes may include employees' work tasks or operational
activities.
 Outputs: Outputs represent the results produced by an organization. These outputs may include products, services
and financial results, such as profits.
 Feedback: Feedback represents information related to the organizations' outcomes or outputs. Leaders can use
this information to influence or make decisions related to the organization's inputs.
 In the systems approach, management staff members develop goals and processes that support their
organization's overall objectives and performance. For example, department managers can look to the
department above them in the hierarchy to determine their department's purpose and priorities. They may
implement deadlines for their team that ensure that the other department can begin and complete its necessary
tasks. Aligning their department's activities with the next department's goals can help processes run more smoothly
and efficiently throughout the organization.
27

Contingency approach
 The contingency management approach states that there is not just one management
approach that fits every organization. It believes that the optimal management style
depends on the situation. Leaders who utilize this theory do not adopt a single
management style and instead must identify and use different styles for different
situations. As a result, these leaders also develop additional traits and skills that ensure
they can employ various management approaches effectively. The use of diverse styles
can help make these leaders more flexible and adaptable in the workplace.
 This theory outlines three variables that it believes influence an organization's structure:
the organization's size, the technology it uses and the leadership styles. An effective
manager understands these factors and how they may impact performance. For
example, a small organization may represent more flexibility and less separation between
departments, whereas a large organization may be more complex and divided.
Managers in smaller organizations can have more control over processes due to their
flexibility and potentially make changes to them more easily.
28

Operational approach theory
 An operational approach is an approach that is borrowed from Bridgman’s work; this approach attempts to
bring together the knowledge of management that is related to functions of management. The operational
approach brings together management concepts, principles and techniques in the management practice
(Fleet et al. 76). According to Koontz and Weihrich, management involves designing and maintaining a working
environment where individuals or people working in groups achieve their objectives efficiently.
 This means that management cannot be successful without a strategic plan, proper coordination of activities
and direction, as well as a reasonable control of decision-making processes; therefore, managers should be
equipped with skills in managerial competence as well as effectiveness in human resource management,
administration, problem-solving and leadership (Koontz and Weihrich 243).
 Deming and McGregor are the founders of modern management which applies the operational approach.
Deming is known to influence the Japanese post-war economic miracle. He suggested the creation of
constancy to improve products and services and advised Japan to cease mass inspection dependency and
built quality together with price (Homans 46).
 He emphasized on training for management and adoption of leadership that is aimed at guiding people to do
their best at work, ensure effective communication, discouraging fear and removing barriers between staffs
and their departments and create adversarial relationships. He also encouraged the use of annual appraisal
and objectives by the management and education for self-improvement. H also emphasized that the top
management should commit themselves to the improvement of quality and productivity.
29

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