EVOLUTION OF MANAGEMENT THOUGHT The concept of organisation and administration existed in Egypt in 1300 BC. In the field of business organisation, some contributions have come from Robert Owen, James Watt, Charles Babbage etc. Robert Owen- emphasised on personnel aspects in management and advocated a number of benefits to employers. It was unrecognized – two centuries ago. Central activity of our age and economy The Emergence of Management Thought can be classified under various schools of management and can be put into 3 broad categories as follows: The Classical Approach The Behavioural Approach The Quantitative Approach
A. CLASSICAL APPROACH It has 3 branches:I. Scientific ManagementII. Administrative PrinciplesIII. Bureaucratic OrganisationI. Scientific Management: Fredrick W. Taylor in his book “Scientific Management” criticised the method of traditional management which were composed of: a. Subjective or intuitive evaluation b. Jobs were performed by rule of thumb rather than standard times, methods or motives c. No efforts were made to introduce new techniques of management d. No formal techniques of skill and professional development existed. Training was under apprentice system e. Management was considered as a group of overall supervisors rather than a group performing unique duties.
I. SCIENTIFIC MANAGEMENT Frederick W. Taylor (1856 – 1915) Father of Scientific Management Raise productivity through greater efficiency in production and increased pay for workers, by applying the scientific method. His principles emphasize using science, creating group harmony and cooperation, achieving maximum output and developing workers.
PRINCIPLES OF F.W.TAYLOR1. Replacing rule of thumb with science: Rule of thumb emphasises estimation and Science denotes precision in determining any aspect of work.2. Harmony in group Action: There should be mutual give and take situation and proper understanding3. Co-operation4. Maximum Output5. Development of workers
SCIENTIFIC MANAGEMENT Henry L. Gantt Principles and concepts of F.W. Taylor was refined and enlarged Called for scientific selection of workers and “harmonious cooperation” between labour and management Developed the Gantt chart Stressed the need for training
SCIENTIFIC MANAGEMENT Frank and Lillian Gilbreth Frank is known primarily for his time and motion studies – motion and fatigue studies Lillian an industrial psychologist, focused on the human aspects of work and the understanding of workers’ personalities and needs Economical motion of bricklaying, shorthand symbols for analysts
Merits and Criticisms of Scientific ManagementMerits:a. More production and high profitsb. Job satisfactionc. Personality Developmentd. Higher standard of livingCriticisms:a. Unsuitable for small employeesb. Unemployment when machines replace labourc. Retarding human development i.e., workers are reduced to the status of machines and totally deprieved of thinking function.
II. ADMINSTRATIVE PRINCIPLES Henry Fayol (1841-1925) was a leading French industrialist and a successful manager. His life long experience, in the field of managing was reproduced in a monograph titled “Administration Industrial and Generale” in 1916 and translated into English in 1944 in U.S. Fayol’s classification of Managerial Functions:a. Planningb. Organisingc. Commandingd. Co-ordinatinge. Controlling
Fayol’s General Principles of Management Henry Fayol Father of Modern management theory Divided industrial activities into six groups a. Technical (related to production) b. Commercial (related to buying, selling or exchange) c. Financial (related to search for and optimum use of capital) d. Security (related to protection of properties & personnel of an enterprise) e. Accounting (related to record of business transactions) f. Managerial • Recognised the need for teaching management • Formulated the 14 principles of management
14 PRINCIPLES1. DIVISION OF WORK – To take advantage of specialisation, different workers for different jobs depending upon natural condition, skills etc.2. AUTHORITY AND RESPONSIBILITY – right to give orders and power to extract obedience3. DISCIPLINE – good supervisors at all level, clear and fair agreements between employees and employer, judicious application of penalties4. UNITY OF COMMAND – one superior to avoid conflict in instructions5. UNITY OF DIRECTION – complete identity between
14 PRINCIPLES6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST – more money, recognition, status etc7. REMUNERATION - should be fair – general business conditions, cost of living, productivity and capacity of the firm – efficiency and morale & fosters good relationship between employees and management8. CENTRALISATION – reservation of decision-making authority at top level of management. It is subject to the nature of the organisation how big/small it is.9. SCALAR CHAIN – means hierarchy of authority from the
14 PRINCIPLES10. ORDER – efforts – right place for everything and for the right man11. EQUITY – equality of fair treatment – combination of kindness and justice12. STABILITY OF TENURE OF PERSONNEL – to do more and better job13. INITIATIVE – freedom to think out and execute a plan – innovation => initiative14. ESPRIT DE CORPS – means team spirit – union is strength. Harmony and unity of staff – strength to the company
III. BUREACRATIC ORGANISATION Max Weber (1864-1920) is a German Social Scientist.Main characteristics of Weber’s bureaucratic model:i) A division of labour by functional specialisation i.e., each member performs his specialised job.ii) A well defined hierarchy of authorityiii) A system of rules covering the duties and rights of employersiv) A system of procedures for dealing with work situationsv) Impersonal relations between people i.e., there is no place for emotions, sentiments and personal attachment.
MERITS AND DEMERITSOF BUREAUCRACYMERITS: 1. Specialisation 2. No overlapping of duties as duties and responsibilities are clearly defined 3. Systematic and orderly functioning 4. Efficient functioning because of technical competenceDEMERITS: 1. Too much paper work 2. Lack of flexibility 3. No place for human consideration 4. Lack of initiative
B. BEHAVIOURAL APPROACH The traditionalists emphasised on physical – technical aspects of managing and little attention was paid to human factors. The human relation approach seeks to examine and analyse the impact of the human factor towards more effective management. The various behavioural scientists include: Hugo Munsterberg Walter Dill Scott Max Weber Vilfredo Pareto Elton Mayo and F. J. Roethlisberger
Human Relations Approach Human Relations was given more importance by Elton Mayo who conducted an experiment, which formed the basis for this approach called as Hawthorne Experiments.HAWTHORNE EXPERIMENTS: 1. Hawthorne Experiments are conducted at the Hawthorne Plant of the Western Electric Company, U.S.A., during 1924-32. 2. The experiments were conducted by an eminent team of researchers from the Harvard Business School, under the leadership of Elton Mayo, who is the father of Human Relations School. 3. The basic purpose motivating these experiments was whether physical facilities like raw materials, machinery, technology etc were the factors responsible for human efficiency or were there certain other factors more
BEHAVIOURAL SCIENCES Elton Mayo and F. J. Roethlisberger Famous studies at the Hawthorne plant of Western Electric Company on the influence of social attitudes and relationships of work groups on performance. Four different types of experiments were conducted in this regard.
HAWTHORNE EXPERIMENTS Illumination Experiments – Level of Illumination. Relay Assembly Test Room – Break, Supervisor, Working time. Mass Interviewing Programme – Social relations inside the organisation had an unmistakable influence on their attitude and behaviours.
Positive Contributions of Hawthorne Experimentsi. An organisation is a SOCIAL SYSTEM; with a culture on its own.ii. INFORMAL GROUPS have a serious impact on worker’s productivity.iii. FRIENDLY SUPERVISION has a favourable influence on human efficiency at work.iv. FREE FLOW OF COMMUNICATION, in the organisation makes for good human relations.
Limitations of Hawthorne Experimentsi. Experiments were not conducted in a scientific manner. There was no system involved in selecting the work, workers and the environment.ii. The Hawthorne plant was not a typical plant as it was a thoroughly unpleasant place to work. Therefore, the results could not be valid for others.iii. The experimented workers did not exhibit their natural work-behaviour because they felt that they are more important to others and induced them to demonstrate unusual work behaviour – HAWTHORNE EFFECT.
MODERN MANAGEMENT THOUGHT Peter F. Drucker: Very prolific writer on many general management topics. W. Edwards Deming: Introduced quality control in Japan. Laurence Peter: Observed that eventually people get promoted to a level they are incompetent. William Ouchi: Discussed selected Japanese managerial practices adapted in the US environment. Thomas Peters & Robert Waterman: Identified
SYSTEMS APPROACH Stress one aspect at the expense of others. Difficult to which aspect is most useful and appropriate in a given situation. Needed – one broad, detailed, conceptual framework that can help a manager diagnose and decide which tool or a combination of tools will be best do the job – system approach.
KEY CONCEPTS A system is a set of interdependent parts – task, structure, people and technology. Central to the systems approach is the concept of “holism” – relation of interdependence. A system can either be open or closed – open system: interacts with the environment
KEY CONCEPTS Every system has a boundary • Where it ends and other system begins. • Separates the parts of the system from the environment. • Protects the transformation process from the vagaries of its environment.
CONTINGENCY Attempts to integrate various schools of thoughts. No universal applicability under all conditions. Managers can identify the technique that will, in a particular situation best contribute to the attainment of management goals. Therefore they should develop situational sensitivity and practical selectivity.
CONTINGENCY Designing organisational structure, degree of centralisation, information decision systems, motivational and leadership approach, establishing communication and control systems etc.