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Major Schools of Management Thought:
       The various approaches to the study of management as propounded by specialists
from 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 and
with people operating in organized groups. Henry Fayol is known as the 'Father of this
school'. According to this school management can best be studied in terms of the process
that it involves: Those subscribing to this school are of the view that management
principles are of universal application. This approach' is also designated as 'The
Traditional Approach' the Universal Approach' or the 'Classical Approach'. The
contributors 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 as
the study of experience, followed by efforts to generalize from the experience and transfer
the knowledge to practitioners and students. Typically, this is done through. a 'Case
Study' approach or through the study of 'Decision Making', This school of thought believes
that by analyzing the       experience of successful managers or the mistakes of poor
managers, we somehow learn about applying the most effective management techniques.
The main contributors of this approach are Earnest Dale, Mooney and Raliey, Urwick and
many other management practitioners and Association like the American Management
Association.
The main features of this approach are
1. 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 human
behaviors in organized groups under the given situation. It is based upon the fact that
managing involves getting things done with and through people; therefore management
must centred on inter-personal relations. This approach has been called the 'Human
Relations', 'Leadership' or 'Behavioral Science' approach. Exponents of this school of
thought seek to apply existing and newly developed theories, methods and techniques of
the relevant social science to the study of intra and inter personal relations from
'personality dynamics' to 'relations of cultures'. The stress is on the 'people' part of
management and the 'understanding' aspects of this the motivation of the individual and
adherents of this school are heavily oriented towards psychology and sociology. The range
of thought in this school are (a) the human relations and how manager can understand
and use this relations (b) the manager as a leader and how he should lead others (c) a
study of group dynamics and inter-personal relationships.
       From the early 1930's and the Hawthorne experiments there has been a great
interest in the human behaviors school. Human behaviour must be recognized as a key
and certainly it is one of the most important factors in executive development. There is
great agreement on the point that human beings have goals and value for certain need
satisfying behaviors highly. We do find people exercising their material instincts, valuing
job security, striving for organisational and social acceptance and working for monetary
rewards 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 that
organization can function effectively. Managers have to take a middle-of-the road position in
their approach to the human behaviour aspects of management. If they do a poor job they
should be ensured demoted or disciplined in some manner. Without recognition and
reward employees lack motivation to do a job.
 The social systems school
       This school of thought is closely related to the human behaviour or the human
relations school of thought. It looks upon management as a social system i.e., as a system
of cultural inter-relation These can be formal organisational relationships or any kind of a
system of human relationships. Heavily sociological in nature, this approach to
management does what the study of sociology does; it identifies the nature of the cultural
relationships or various social groups and attempts to show them as a related and usually
integrated system. The spiritual father of this school was the late Chester Barnard who
developed a theory of co-operation. The focus of this school of thought is on the study of
the organisation as a co-operative or collaparative system. A social system is a unit or
entity consisting of various social sub-systems called the groups.
Decision theory school
       Decision theory approach concentrates on rational decisions - the selection of a
suitable course of action from various possible alternatives. This approach may deal with
the decisions itself or with the persons or organizational group who make the decision, or
with an analysis of the decision process. By expanding the view-point well beyond the
process of evaluating alternatives, many use the theory to examine the nature of
organisation structure; the psychological and social reactions of individuals and groups,
the development of basic information for decisions and the analysis of value considerations
with respect to goals, communication networks and incentives. The scientific approach to
decision-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 or
mathematical models' and process. We have the operations researchers or operations
management, or organisation, or planning or decision-making is a logical process· It can be
expressed in terms of mathematical symbols and relationship. This approach forces the
analyst to define a problem and allows for the insertion of symbols for unknown data
through logical methodology which provides a powerful tool for solving complex
phenomena.
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 (which
requires 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 business
structures, particularly in India. In United States, executives have turned increasingly to
use computer applications to solve these' problems. Some'· of these computer applications
include airline reservation systems, processing census reports, compiling technical
information into data banks, banking operations, machine processed accounting and
addressing for magazine subscriptions, total systems approaches to organizational needs
logistics 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 integrated
approach 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 and
inter-relatedness of the various sub-systems, from the point of view of the effectiveness of a
large 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, and
o.           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 is
a highly practice-oriented and action-packed discipline. Managerial decisions andactiol1s
initiatives are to be matters of pragmatism and not of principles. The environment of
organisations and managers is very complex, uncertain, ever changing and diverse. It is the
basic function of managers to analyze and understand the environments in which they
function before adopting their techniques, processes and practices. The choice of
approaches as also their effectiveness is contingent on the behavior and dynamics of
situational variables, there is no universally valid one best way of, doing things.
Management theory and principles tend to be deterministic, while, the pace, pattern and
behavior of events defy and deterministic or dogmatic approaches. What is valid and good
in 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 management
Frederic Winslow Taylor gave up going and started his career shopfloor as a machinist in
1875. He studied engineering in a evening college and rose to the position of chief engineer
in his organisation. He invented high speed steel cutting tools and spent most of his life as
a 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. Taylor's 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. Taylor's 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 a
committee 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
 "Here's 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 of
the part of the working man engaged in any particular ,establishment or industry a
complete mental revolution on the as to their duties toward their work, toward their
fellowmen, and toward their employees and it involves the equally complete mental
revolution on the part of those on the management's side - the foreman, the
superintendent, the owner of the business, the board of directors - a complete mental
revolution 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 parties
under scientific management is that both sides take their eyes off the division of the
surplus as the all important matter, and together turn their Attention toward increasing
the size of the surplus which becomes so large that it is unnecessary to quarrel over how it
should be divided. They come to see that when they. ·stop pulling against one another, and
instead both turn and .push shoulder to shoulder in the same direction, the size of the
surplus created by their joint efforts is truly appreciable. They both realize that when they
substitute, 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 there
is ample room for a large increase in wages for the workmen and an equally great increase
in 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 company's
   highest prosperity.
   Taylor concentrated more on productivity and productivity based wages He stressed on
time and motion study and other techniques for measuring work. Apart from this in
Taylor's work there also runs a strongly humanistic theme. He had an idealist's notion that
the 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 a
Frenchman born in 1841 and was an engineer with a mining company. He improved the
company from a virtual bankrupt condition to high success. From his practical experience
he developed some techniques. He brought out some basic principles which he felt could
be used in all management situations
irrespective of the organisational framework.
        He wrote a book entitled 'General and Industrial management' in French which was
later on translated into English. It is now considered as one of the classics bf management
literature. The book mainly covers the aspects of the immutable and repetitive character of
the management process and the concept that management can be taught in the class
room or the work place. He also laid down the principles of management which he deemed
important 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 manager's 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 achieving
obedience, application, energy and the outward marks of respect", Fayol declares that
discipline requires good superiors at all levels, clear and fair agreements and judicious
application 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 .1ctivities
having ~he same objective must have one hand and one plan. As distinguished from the
principle of unity of command, Fayol perceives unity of direction as related to the
functioning of personnel.

6. Subordination of individual interest to general interest
      In any group the interest of the group should supersede that of the individual; when
these 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 fair
and afford the maximum satisfaction to employee and employer.
8. Centralization
       Although Fayol does not use the term 'Centralization of Authority' his principle
definitely refers to the extent to which authority is concentrated or' dispersed in an
enterprise. Individual circumstances will determine the degree of centralization that will
give the best over all yield.
9. Scalar Chain
      Fayol thinks of the scalar chain as a line of authority, a 'chain of superiors' from the
highest to the lowest ranks and held that, while it is an error of subordinate to depart
'needlessly' from lines of authority, the chain should be short-circuited when scrupulous
following of it would detrimental.
10. Order
      Breaking this principle into 'material order' and social order', Fayol thinks of it as
the 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 and
persons.
11. Equity
       Fayol perceives this principle 'as one of eliciting loyalty and devotion from
personnel by a combination of kindliness and justice in managers dealing with
subordinates.
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 of
command. Fayol here emphasizes the need for team-work and the importance of
communication in obtaining it.

Contribution by Peter F. Drucker - MBO
      Drucker is a highly respected management thinker. He is a prolific writer and has
published several books and articles on the management practices. He is so versatile that
there is hardly any area in management which is not touched by him. He has drawn
heavily from his consultancy experience spread over the last four to five decades. Drucker
perhaps is the only western management thinker who is admired by even the socialist
black countries also. His views on management may be summarised as follows
1. Management as a practice
      According to Drucker, management has two important functions; say innovation and
Marketing. 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 of
business as the creation of customer if understood and in the right way helps any
organisation to achieve success.
      Drucker's view on innovation is equally important for the emphasis they place on
new product development. He argues that "new products should drive out the existing
products", rather than the other way round. As such, he is against bureaucratic
management for it stifles the innovative spirit and the initiative among the people in the
organisation. He contents that modem organisations are knowledge based organisation and
describes the modem workers as knowledge workers considering their skills, and
innovative abilities.
2. Functions of management
     Drucker points out three basic functions of management. The actions of management
should contribute to:

I. The achievement of purpose and mission of the institution;
2. Make the work productive and the worker achieving; and
3. Effective management of social responsibilities.
 3. Objective setting
Drucker has attached great importance to objective setting. He has specified that
objectives should be set for all the key result areas of business. To make the objective
setting and their achievement more meaningful, he has given a new tool, what is
popularly known as 'Management by Objectives (MHO)'. MBO is regarded as one of his
most important contributions to the discipline of management. He has discussed the
concept in great detail in his book "'The practice of Management" (1954). MBO is a process
whereby superiors and subordinates jointly identify the common objective, set the results
that should be achieved by subordinates and assess the contribution of each individual. It
is 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 visualising
the future trends that affect the society. He visualised the concept of modern organisation
and its impact on the society several years ago. His views on the many facets of the
modem corporations have almost all become reality now. To put is in his own words, he
describes 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 positive
values 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 him
the status of 'a management guru'. His contributions have made tremendous impact on the
management practices all over the world. He is one of the few contemporary management
thinkers who is highly admired in Japan. Similarly the contributions of Peter's and
Waterman who extensively studied a few American companies known for their excellence in
modem management practices in so less significant. Mckingsly consultancy firm's
contribution of the "7S" model for the management of the firm and Edward Deming's
preachings on 'Quality Control' created tremendous impact on modem management all over
the world in the recent past. Michael Porter's work on competitive strategy turned a new
leaf in the strategic management area. His book on competitive strategy suggests the ways
and means that help organisations and nations to gain competitive edge.
Summary
      Though management has been in practice in some form or other since time
immemorial, the development of a systematic body of knowledge dates back to the last few
decades. Industrial revolution has immensely contributed for the development of
management thought. Over the years, it has drawn heavily from various disciplines like
economics, psychology, sociology, operations research and so on. The contributions of
prominent thinkers who have created an everlasting impact on management have been
discussed in this lesson in detail. An attempt is made to expose the learner to the historical
development of management over the years.
Questions
1. 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?
Major schools of management thought
Major schools of management thought

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Major schools of management thought

  • 1. Major Schools of Management Thought: The various approaches to the study of management as propounded by specialists from 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 and with people operating in organized groups. Henry Fayol is known as the 'Father of this school'. According to this school management can best be studied in terms of the process that it involves: Those subscribing to this school are of the view that management principles are of universal application. This approach' is also designated as 'The Traditional Approach' the Universal Approach' or the 'Classical Approach'. The contributors 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 as the study of experience, followed by efforts to generalize from the experience and transfer the knowledge to practitioners and students. Typically, this is done through. a 'Case Study' approach or through the study of 'Decision Making', This school of thought believes that by analyzing the experience of successful managers or the mistakes of poor managers, we somehow learn about applying the most effective management techniques. The main contributors of this approach are Earnest Dale, Mooney and Raliey, Urwick and many other management practitioners and Association like the American Management Association. The main features of this approach are 1. 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 human behaviors in organized groups under the given situation. It is based upon the fact that managing involves getting things done with and through people; therefore management must centred on inter-personal relations. This approach has been called the 'Human Relations', 'Leadership' or 'Behavioral Science' approach. Exponents of this school of thought seek to apply existing and newly developed theories, methods and techniques of the relevant social science to the study of intra and inter personal relations from 'personality dynamics' to 'relations of cultures'. The stress is on the 'people' part of management and the 'understanding' aspects of this the motivation of the individual and adherents of this school are heavily oriented towards psychology and sociology. The range of thought in this school are (a) the human relations and how manager can understand and use this relations (b) the manager as a leader and how he should lead others (c) a study of group dynamics and inter-personal relationships. From the early 1930's and the Hawthorne experiments there has been a great interest in the human behaviors school. Human behaviour must be recognized as a key and certainly it is one of the most important factors in executive development. There is great agreement on the point that human beings have goals and value for certain need satisfying behaviors highly. We do find people exercising their material instincts, valuing job security, striving for organisational and social acceptance and working for monetary rewards which of course, can be used to satisfy many needs. The human behaviour school
  • 2. of thought sometimes goes too far in insisting that people need to make happy so that organization can function effectively. Managers have to take a middle-of-the road position in their approach to the human behaviour aspects of management. If they do a poor job they should be ensured demoted or disciplined in some manner. Without recognition and reward employees lack motivation to do a job. The social systems school This school of thought is closely related to the human behaviour or the human relations school of thought. It looks upon management as a social system i.e., as a system of cultural inter-relation These can be formal organisational relationships or any kind of a system of human relationships. Heavily sociological in nature, this approach to management does what the study of sociology does; it identifies the nature of the cultural relationships or various social groups and attempts to show them as a related and usually integrated system. The spiritual father of this school was the late Chester Barnard who developed a theory of co-operation. The focus of this school of thought is on the study of the organisation as a co-operative or collaparative system. A social system is a unit or entity consisting of various social sub-systems called the groups. Decision theory school Decision theory approach concentrates on rational decisions - the selection of a suitable course of action from various possible alternatives. This approach may deal with the decisions itself or with the persons or organizational group who make the decision, or with an analysis of the decision process. By expanding the view-point well beyond the process of evaluating alternatives, many use the theory to examine the nature of organisation structure; the psychological and social reactions of individuals and groups, the development of basic information for decisions and the analysis of value considerations with respect to goals, communication networks and incentives. The scientific approach to decision-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 or mathematical models' and process. We have the operations researchers or operations management, or organisation, or planning or decision-making is a logical process· It can be expressed in terms of mathematical symbols and relationship. This approach forces the analyst to define a problem and allows for the insertion of symbols for unknown data through logical methodology which provides a powerful tool for solving complex phenomena. 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 (which requires 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 business structures, particularly in India. In United States, executives have turned increasingly to use computer applications to solve these' problems. Some'· of these computer applications include airline reservation systems, processing census reports, compiling technical information into data banks, banking operations, machine processed accounting and addressing for magazine subscriptions, total systems approaches to organizational needs logistics applications, issuance of payroll checks to large numbers of employees (i.e.,
  • 3. 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 integrated approach 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 and inter-relatedness of the various sub-systems, from the point of view of the effectiveness of a large 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, and o. 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 is a highly practice-oriented and action-packed discipline. Managerial decisions andactiol1s initiatives are to be matters of pragmatism and not of principles. The environment of organisations and managers is very complex, uncertain, ever changing and diverse. It is the basic function of managers to analyze and understand the environments in which they function before adopting their techniques, processes and practices. The choice of approaches as also their effectiveness is contingent on the behavior and dynamics of situational variables, there is no universally valid one best way of, doing things. Management theory and principles tend to be deterministic, while, the pace, pattern and behavior of events defy and deterministic or dogmatic approaches. What is valid and good in 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
  • 4. 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 management Frederic Winslow Taylor gave up going and started his career shopfloor as a machinist in 1875. He studied engineering in a evening college and rose to the position of chief engineer in his organisation. He invented high speed steel cutting tools and spent most of his life as a 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. Taylor's 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. Taylor's 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 a committee 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 "Here's 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 of the part of the working man engaged in any particular ,establishment or industry a complete mental revolution on the as to their duties toward their work, toward their fellowmen, and toward their employees and it involves the equally complete mental revolution on the part of those on the management's side - the foreman, the superintendent, the owner of the business, the board of directors - a complete mental revolution 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 parties under scientific management is that both sides take their eyes off the division of the surplus as the all important matter, and together turn their Attention toward increasing the size of the surplus which becomes so large that it is unnecessary to quarrel over how it should be divided. They come to see that when they. ·stop pulling against one another, and instead both turn and .push shoulder to shoulder in the same direction, the size of the surplus created by their joint efforts is truly appreciable. They both realize that when they substitute, 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 there is ample room for a large increase in wages for the workmen and an equally great increase in 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;
  • 5.  Developing all workers to the fullest extent possible for their own and their company's highest prosperity. Taylor concentrated more on productivity and productivity based wages He stressed on time and motion study and other techniques for measuring work. Apart from this in Taylor's work there also runs a strongly humanistic theme. He had an idealist's notion that the 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 a Frenchman born in 1841 and was an engineer with a mining company. He improved the company from a virtual bankrupt condition to high success. From his practical experience he developed some techniques. He brought out some basic principles which he felt could be used in all management situations irrespective of the organisational framework. He wrote a book entitled 'General and Industrial management' in French which was later on translated into English. It is now considered as one of the classics bf management literature. The book mainly covers the aspects of the immutable and repetitive character of the management process and the concept that management can be taught in the class room or the work place. He also laid down the principles of management which he deemed important 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 manager's 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 achieving obedience, application, energy and the outward marks of respect", Fayol declares that discipline requires good superiors at all levels, clear and fair agreements and judicious application 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 .1ctivities having ~he same objective must have one hand and one plan. As distinguished from the principle of unity of command, Fayol perceives unity of direction as related to the functioning of personnel. 6. Subordination of individual interest to general interest In any group the interest of the group should supersede that of the individual; when these 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 fair and afford the maximum satisfaction to employee and employer. 8. Centralization Although Fayol does not use the term 'Centralization of Authority' his principle definitely refers to the extent to which authority is concentrated or' dispersed in an enterprise. Individual circumstances will determine the degree of centralization that will give the best over all yield.
  • 6. 9. Scalar Chain Fayol thinks of the scalar chain as a line of authority, a 'chain of superiors' from the highest to the lowest ranks and held that, while it is an error of subordinate to depart 'needlessly' from lines of authority, the chain should be short-circuited when scrupulous following of it would detrimental. 10. Order Breaking this principle into 'material order' and social order', Fayol thinks of it as the 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 and persons. 11. Equity Fayol perceives this principle 'as one of eliciting loyalty and devotion from personnel by a combination of kindliness and justice in managers dealing with subordinates. 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 of command. Fayol here emphasizes the need for team-work and the importance of communication in obtaining it. Contribution by Peter F. Drucker - MBO Drucker is a highly respected management thinker. He is a prolific writer and has published several books and articles on the management practices. He is so versatile that there is hardly any area in management which is not touched by him. He has drawn heavily from his consultancy experience spread over the last four to five decades. Drucker perhaps is the only western management thinker who is admired by even the socialist black countries also. His views on management may be summarised as follows 1. Management as a practice According to Drucker, management has two important functions; say innovation and Marketing. 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 of business as the creation of customer if understood and in the right way helps any organisation to achieve success. Drucker's view on innovation is equally important for the emphasis they place on new product development. He argues that "new products should drive out the existing products", rather than the other way round. As such, he is against bureaucratic management for it stifles the innovative spirit and the initiative among the people in the organisation. He contents that modem organisations are knowledge based organisation and describes the modem workers as knowledge workers considering their skills, and innovative abilities. 2. Functions of management Drucker points out three basic functions of management. The actions of management should contribute to: I. The achievement of purpose and mission of the institution; 2. Make the work productive and the worker achieving; and 3. Effective management of social responsibilities. 3. Objective setting
  • 7. Drucker has attached great importance to objective setting. He has specified that objectives should be set for all the key result areas of business. To make the objective setting and their achievement more meaningful, he has given a new tool, what is popularly known as 'Management by Objectives (MHO)'. MBO is regarded as one of his most important contributions to the discipline of management. He has discussed the concept in great detail in his book "'The practice of Management" (1954). MBO is a process whereby superiors and subordinates jointly identify the common objective, set the results that should be achieved by subordinates and assess the contribution of each individual. It is 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 visualising the future trends that affect the society. He visualised the concept of modern organisation and its impact on the society several years ago. His views on the many facets of the modem corporations have almost all become reality now. To put is in his own words, he describes 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 positive values 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 him the status of 'a management guru'. His contributions have made tremendous impact on the management practices all over the world. He is one of the few contemporary management thinkers who is highly admired in Japan. Similarly the contributions of Peter's and Waterman who extensively studied a few American companies known for their excellence in modem management practices in so less significant. Mckingsly consultancy firm's contribution of the "7S" model for the management of the firm and Edward Deming's preachings on 'Quality Control' created tremendous impact on modem management all over the world in the recent past. Michael Porter's work on competitive strategy turned a new leaf in the strategic management area. His book on competitive strategy suggests the ways and means that help organisations and nations to gain competitive edge. Summary Though management has been in practice in some form or other since time immemorial, the development of a systematic body of knowledge dates back to the last few decades. Industrial revolution has immensely contributed for the development of management thought. Over the years, it has drawn heavily from various disciplines like economics, psychology, sociology, operations research and so on. The contributions of prominent thinkers who have created an everlasting impact on management have been discussed in this lesson in detail. An attempt is made to expose the learner to the historical development of management over the years. Questions 1. 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?