Major schools of management thought
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Major schools of management thought Major schools of management thought Document Transcript

  • Major Schools of Management Thought: The various approaches to the study of management as propounded by specialistsfrom different disciplines have come to be called the Schools of. Management Thought.The major schools of management theory are: 1. Management process schools; 2. Empirical School; 3. Human Behaviors or Human relations school; 4. Social School; 5. Decisions Theory school; 6. Mathematical or Quantitative Management School; 7. Systems Management school; 8. Contingency School. Management process school or the Operational approach: This school regards management as a process of .getting· things done through andwith people operating in organized groups. Henry Fayol is known as the Father of thisschool. According to this school management can best be studied in terms of the processthat it involves: Those subscribing to this school are of the view that managementprinciples are of universal application. This approach is also designated as TheTraditional Approach the Universal Approach or the Classical Approach. Thecontributors and thinkers belongs school are, William Newman, Summers, McFarland,Henry, J.D. Mooney, A.c. Railey, Lyndall Urwick and Harold Korntz.The empirical school or the management by customs school: This approach to management is, taken by scholars who identify management asthe study of experience, followed by efforts to generalize from the experience and transferthe knowledge to practitioners and students. Typically, this is done through. a CaseStudy approach or through the study of Decision Making, This school of thought believesthat by analyzing the experience of successful managers or the mistakes of poormanagers, we somehow learn about applying the most effective management techniques.The main contributors of this approach are Earnest Dale, Mooney and Raliey, Urwick andmany other management practitioners and Association like the American ManagementAssociation.The main features of this approach are1. Management is the study of managerial experiences,2. The managerial experience can be passed over to the practitioner and students.3. The techniques used in successful cases can be used by future managers,4. Theoretical research can be combined with practical experiences.The human relations approach (or) the human behaviors school This school takes particular note of psychological factors underlying the humanbehaviors in organized groups under the given situation. It is based upon the fact thatmanaging involves getting things done with and through people; therefore managementmust centred on inter-personal relations. This approach has been called the HumanRelations, Leadership or Behavioral Science approach. Exponents of this school ofthought seek to apply existing and newly developed theories, methods and techniques ofthe relevant social science to the study of intra and inter personal relations frompersonality dynamics to relations of cultures. The stress is on the people part ofmanagement and the understanding aspects of this the motivation of the individual andadherents of this school are heavily oriented towards psychology and sociology. The rangeof thought in this school are (a) the human relations and how manager can understandand use this relations (b) the manager as a leader and how he should lead others (c) astudy of group dynamics and inter-personal relationships. From the early 1930s and the Hawthorne experiments there has been a greatinterest in the human behaviors school. Human behaviour must be recognized as a keyand certainly it is one of the most important factors in executive development. There isgreat agreement on the point that human beings have goals and value for certain needsatisfying behaviors highly. We do find people exercising their material instincts, valuingjob security, striving for organisational and social acceptance and working for monetaryrewards which of course, can be used to satisfy many needs. The human behaviour school
  • of thought sometimes goes too far in insisting that people need to make happy so thatorganization can function effectively. Managers have to take a middle-of-the road position intheir approach to the human behaviour aspects of management. If they do a poor job theyshould be ensured demoted or disciplined in some manner. Without recognition andreward employees lack motivation to do a job. The social systems school This school of thought is closely related to the human behaviour or the humanrelations school of thought. It looks upon management as a social system i.e., as a systemof cultural inter-relation These can be formal organisational relationships or any kind of asystem of human relationships. Heavily sociological in nature, this approach tomanagement does what the study of sociology does; it identifies the nature of the culturalrelationships or various social groups and attempts to show them as a related and usuallyintegrated system. The spiritual father of this school was the late Chester Barnard whodeveloped a theory of co-operation. The focus of this school of thought is on the study ofthe organisation as a co-operative or collaparative system. A social system is a unit orentity consisting of various social sub-systems called the groups.Decision theory school Decision theory approach concentrates on rational decisions - the selection of asuitable course of action from various possible alternatives. This approach may deal withthe decisions itself or with the persons or organizational group who make the decision, orwith an analysis of the decision process. By expanding the view-point well beyond theprocess of evaluating alternatives, many use the theory to examine the nature oforganisation structure; the psychological and social reactions of individuals and groups,the development of basic information for decisions and the analysis of value considerationswith respect to goals, communication networks and incentives. The scientific approach todecision-making involves some of these factors 1. Define the problem; 2. Collect all relevant information; 3. Develop alternatives; 4. Examine all the alternatives and the solutions; 5. Test the solutions, (If you can make this possible): 6.Select a course of action. 7. Implement the action; 8. Evaluate the results of the action.The Mathematical school In this group, we have those theorists who see management as a system ormathematical models and process. We have the operations researchers or operationsmanagement, or organisation, or planning or decision-making is a logical process· It can beexpressed in terms of mathematical symbols and relationship. This approach forces theanalyst to define a problem and allows for the insertion of symbols for unknown datathrough logical methodology which provides a powerful tool for solving complexphenomena.The modem managers may normally face some of the following problems.(a) Increase in the size and the complexity of organization structures,(b) Increase in paperwork which stifle the ability to produce,(c) Communication problems created by (a) and (b);(d) The need for instantaneous management response in the decision-making areas (whichrequires up-to- date, accurate; comprehensive information),(e) Increase in demands on management with less budget, and(f) Increase in sheer number of people to be dealt with by government, and businessstructures, particularly in India. In United States, executives have turned increasingly touse computer applications to solve these problems. Some· of these computer applicationsinclude airline reservation systems, processing census reports, compiling technicalinformation into data banks, banking operations, machine processed accounting andaddressing for magazine subscriptions, total systems approaches to organizational needslogistics applications, issuance of payroll checks to large numbers of employees (i.e.,
  • Treasury department or large corporate applications) etc. Where a volume of paper reports or data is involved, computer applications can make the work more manageable. It is important for executives to think about certain very flat basic statements that are made about automation.The systems approach school This school is or recent origin having developed in later 1960 it is an integratedapproach which considers the management in its totality based on empirical data.According to this approach, attention must be paid to the overall effectiveness of a sub-system in isolation from the sub-system. The main emphasis is on the interdependence andinter-relatedness of the various sub-systems, from the point of view of the effectiveness of alarge system. Its essential features are as follows: A system has a number of sub-systems, parts and sub-parts, All the sub-systems, part and sub-parts arc mutually related to each other. This relationship is in the context of the whole and is very complex. A change in one part will effect changes in others; The systems approach emphasises the study of the various parts in their inter relationships rather than in isolation from each other; The systems approach to management brings out the complexity of a real life management problem much more sharply than any of the other approaches. It can be utilised by any other school of management thought. The boundary of a system may be classified into two parts: Closed system that has no environment, there is no outside systems which impinge on it or for which no outside systems are to be considered, ando. Open system that has an environment, that is, it possesses systems with which it relates, exchanges and communicates. The main contributors to this school of thought are Kenneth, Boulding, Johnson, Cast, Rosen Zweig and C. W. Churchman. Another important contributor Martin particularly in the area of management audit system. The contingency approach school of management The contingency approach to management emphasizes the fact that management isa highly practice-oriented and action-packed discipline. Managerial decisions andactiol1sinitiatives are to be matters of pragmatism and not of principles. The environment oforganisations and managers is very complex, uncertain, ever changing and diverse. It is thebasic function of managers to analyze and understand the environments in which theyfunction before adopting their techniques, processes and practices. The choice ofapproaches as also their effectiveness is contingent on the behavior and dynamics ofsituational variables, there is no universally valid one best way of, doing things.Management theory and principles tend to be deterministic, while, the pace, pattern andbehavior of events defy and deterministic or dogmatic approaches. What is valid and goodin a particular situation need not be so in some other situation. Contingent thinking helps managers in several ways in performing their function of planning, organising, direction and control. It widens their horizons beyond the theory of management, its concepts, principles, techniques and methods. It helps them to broad base their approach from mere technique orientation to problem- situation orientation. It leads them to be sensitive, alert and adaptive to situation behavioral variables, while tailoring their approaches and styles. It guides them to adopt open system view points, to look at things and situations in an integrated and multi-dimensional manner and to get away from s contingency thinking enlarges the art of freedom of operation of managers. They are not handicapped by having to apply same methods, practices and process to diverse situations, they can think of innovating new approaches or a blend of known approaches on the basis of their compatibility and context. For example, different structural designs are valid for different strategic and tactical needs of organisations on the one hand and realities of the situations, one the other. This was demonstrated by
  • Joan Woodward in her research-studies. Another example, close supervision and control may be appropriate for some categories of employees and work situations, while general supervision will work better in some other situations. Contribution by F.W. Taylor - Scientific managementFrederic Winslow Taylor gave up going and started his career shopfloor as a machinist in1875. He studied engineering in a evening college and rose to the position of chief engineerin his organisation. He invented high speed steel cutting tools and spent most of his life asa consulting - engineer. Taylor is called "the father of scientific management". His experience from the bottom-most level in the organisation gave him an opportunity to know at first problems of the workers. Taylors principal concern was that of increasing efficiency in production, not only to lower costs and raise profits but also to make possible increased pay for workers through their higher productivity. Taylor saw productivity as the answer to both higher wages and higher profits and he believed that the application of scientific method, instead of custom and rule of thumb could yield this productivity without the expenditure of more human energy or effort. F.W. Taylors principles Taylor published a book entitled "The principles of Scientific Management" in 1911.But his ideas about scientific management are best expressed in his testimony before acommittee of the house of Representatives in 1912. He said as follows: "Scientific management is not any efficiency device, not a device of any kind for securing efficiency; nor is it may bunch or group of efficiency devices. It is not a new system of figuring costs; it is not a new scheme of paying men; it is not a piece work system; it is not a bonus system; it is not a premium system; it is no scheme for paying men; it is not holding a stop watch on a man and writing things down about him; it is not time study; it is not motion study, not an analysis of the movements of men; it is not the printing and loading & unloading of a ton or two of blanks on a set of men and saying "Heres your system; go and use it". It is not divided foremanship or functional foremanship; it is not any of the devices which the average man calls to mind when scientific management is spoken of…” Now, in its essence, Scientific management involves a complete mental revolution ofthe part of the working man engaged in any particular ,establishment or industry acomplete mental revolution on the as to their duties toward their work, toward theirfellowmen, and toward their employees and it involves the equally complete mentalrevolution on the part of those on the managements side - the foreman, thesuperintendent, the owner of the business, the board of directors - a complete mentalrevolution on their part as to their duties towards their fellow workers in the management,toward their workmen and toward all of their daily problems. The great mental revolution that takes place in the mental attitude of the two partiesunder scientific management is that both sides take their eyes off the division of thesurplus as the all important matter, and together turn their Attention toward increasingthe size of the surplus which becomes so large that it is unnecessary to quarrel over how itshould be divided. They come to see that when they. ·stop pulling against one another, andinstead both turn and .push shoulder to shoulder in the same direction, the size of thesurplus created by their joint efforts is truly appreciable. They both realize that when theysubstitute, friendly co-operation and mutual helpfulness of antagonism and strife they are,together able to make this surplus so enormously greater than it was in the past that thereis ample room for a large increase in wages for the workmen and an equally great increasein profits for the manufacturer". The fundamental principles that Taylor saw underlying the scientific approach to management may be summarized as follows:  Replacing rules of thumb with science (organized Knowledge);  Obtaining harn10ny in group action, rather than discord;  Achieving co-operation of human beings, rather than chaotic individualism;  Working for maximum output, rather than restricted output;
  •  Developing all workers to the fullest extent possible for their own and their companys highest prosperity. Taylor concentrated more on productivity and productivity based wages He stressed ontime and motion study and other techniques for measuring work. Apart from this inTaylors work there also runs a strongly humanistic theme. He had an idealists notion thatthe interests of workers, managers and owners should be harmonized,Contribution by Henry Fayol - Principles of Management Henry Fayol is claimed to be the real "father of modern management". He was aFrenchman born in 1841 and was an engineer with a mining company. He improved thecompany from a virtual bankrupt condition to high success. From his practical experiencehe developed some techniques. He brought out some basic principles which he felt couldbe used in all management situationsirrespective of the organisational framework. He wrote a book entitled General and Industrial management in French which waslater on translated into English. It is now considered as one of the classics bf managementliterature. The book mainly covers the aspects of the immutable and repetitive character ofthe management process and the concept that management can be taught in the classroom or the work place. He also laid down the principles of management which he deemedimportant for any organisation. The principles are as follows. 1. Division of Work This is the principle of specialization which is so well expressed by economists as being necessary to efficiency in the utilization of labour. Fayol goes beyond shop labour to apply the principles to all kinds of work, managerial as well as technical. 2. Authority and responsibility In this principle Fayol finds authority and responsibility to be related with the latter, the corollary of the former and arising from the latter. He conceives of authority as combination of official authority deriving from a managers official, position, and personal authority, "compounded of intelligence, experience, moral worth, past services etc.” 3. Discipline Holding that discipline is "respect for agreements which arc directed as achievingobedience, application, energy and the outward marks of respect", Fayol declares thatdiscipline requires good superiors at all levels, clear and fair agreements and judiciousapplication of penalties.4. Unit of command This is the principle that an employee should receive orders from one superior only.5. Unity of direction According to Fayol, unity of direction is the principle that each group of .1ctivitieshaving ~he same objective must have one hand and one plan. As distinguished from theprinciple of unity of command, Fayol perceives unity of direction as related to thefunctioning of personnel.6. Subordination of individual interest to general interest In any group the interest of the group should supersede that of the individual; whenthese are around to differ, it is the function of management to reconcile them.7. Remuneration of Personnel Fayol perceives that remuneration and methods of payment should be fairand afford the maximum satisfaction to employee and employer.8. Centralization Although Fayol does not use the term Centralization of Authority his principledefinitely refers to the extent to which authority is concentrated or dispersed in anenterprise. Individual circumstances will determine the degree of centralization that willgive the best over all yield.
  • 9. Scalar Chain Fayol thinks of the scalar chain as a line of authority, a chain of superiors from thehighest to the lowest ranks and held that, while it is an error of subordinate to departneedlessly from lines of authority, the chain should be short-circuited when scrupulousfollowing of it would detrimental.10. Order Breaking this principle into material order and social order, Fayol thinks of it asthe simple edge of a place for everything (everyone), and everything (everyone) in its (his)place". This is essentially, a principle of organization in the arrangement of things andpersons.11. Equity Fayol perceives this principle as one of eliciting loyalty and devotion frompersonnel by a combination of kindliness and justice in managers dealing withsubordinates.12. Stability of tenure of Personnel Finding that such instability is both the cause and effect of bad management.Fayol points out the dangers and costs of unnecessary turnover.13. Initiative Initiative is conceived as the thinking out and execution of a plan. Since it is one of the "keenest satisfactions for an intelligent man to experience," Fayol exhorts managers to "sacrifice personal vanity" in order to permit subordinates. to exercise it.14. Esprit de corps This is the principle that union is strength an extension of the principle of unity ofcommand. Fayol here emphasizes the need for team-work and the importance ofcommunication in obtaining it.Contribution by Peter F. Drucker - MBO Drucker is a highly respected management thinker. He is a prolific writer and haspublished several books and articles on the management practices. He is so versatile thatthere is hardly any area in management which is not touched by him. He has drawnheavily from his consultancy experience spread over the last four to five decades. Druckerperhaps is the only western management thinker who is admired by even the socialistblack countries also. His views on management may be summarised as follows1. Management as a practice According to Drucker, management has two important functions; say innovation andMarketing. He has treated management as a discipline as well as a profession. For him,management is more a practice. It is always goal oriented His comment on the purpose ofbusiness as the creation of customer if understood and in the right way helps anyorganisation to achieve success. Druckers view on innovation is equally important for the emphasis they place onnew product development. He argues that "new products should drive out the existingproducts", rather than the other way round. As such, he is against bureaucraticmanagement for it stifles the innovative spirit and the initiative among the people in theorganisation. He contents that modem organisations are knowledge based organisation anddescribes the modem workers as knowledge workers considering their skills, andinnovative abilities.2. Functions of management Drucker points out three basic functions of management. The actions of managementshould contribute to:I. The achievement of purpose and mission of the institution;2. Make the work productive and the worker achieving; and3. Effective management of social responsibilities. 3. Objective setting
  • Drucker has attached great importance to objective setting. He has specified thatobjectives should be set for all the key result areas of business. To make the objectivesetting and their achievement more meaningful, he has given a new tool, what ispopularly known as Management by Objectives (MHO). MBO is regarded as one of hismost important contributions to the discipline of management. He has discussed theconcept in great detail in his book "The practice of Management" (1954). MBO is a processwhereby superiors and subordinates jointly identify the common objective, set the resultsthat should be achieved by subordinates and assess the contribution of each individual. Itis viewed more as a philosophy than as a tool or technique to achieve the objectives.4. Orientation towards justice Drucker is a great visionary and futurologist. He was ahead of others in visualisingthe future trends that affect the society. He visualised the concept of modern organisationand its impact on the society several years ago. His views on the many facets of themodem corporations have almost all become reality now. To put is in his own words, hedescribes the present age as the age of discontinuity’.5. Federalism Drucker has advocated the concept of federalism, Federalism according to him,involves centralized control in a decentralized structure. Federalism has certain positivevalues over other methods of organising. These are as follows: It sets the top management free to devote itself to major policy formulation and strategy development It defines the functions and responsibilities of the operating people, It creates yardsticks to measure twin success and effectiveness in operating jobs; and It helps to resolve the problem of continuity through giving education to the managers of various units while in all operating position. Ducker’s realistic way of looking at the organisations and society has earned himthe status of a management guru. His contributions have made tremendous impact on themanagement practices all over the world. He is one of the few contemporary managementthinkers who is highly admired in Japan. Similarly the contributions of Peters andWaterman who extensively studied a few American companies known for their excellence inmodem management practices in so less significant. Mckingsly consultancy firmscontribution of the "7S" model for the management of the firm and Edward Demingspreachings on Quality Control created tremendous impact on modem management all overthe world in the recent past. Michael Porters work on competitive strategy turned a newleaf in the strategic management area. His book on competitive strategy suggests the waysand means that help organisations and nations to gain competitive edge.Summary Though management has been in practice in some form or other since timeimmemorial, the development of a systematic body of knowledge dates back to the last fewdecades. Industrial revolution has immensely contributed for the development ofmanagement thought. Over the years, it has drawn heavily from various disciplines likeeconomics, psychology, sociology, operations research and so on. The contributions ofprominent thinkers who have created an everlasting impact on management have beendiscussed in this lesson in detail. An attempt is made to expose the learner to the historicaldevelopment of management over the years.Questions1. What do you think their recommendations would be?2. Can you think of any new problems that acceptance of either solution, or of both solutions, might cause?3.What would you yourself do?