Schools of Business Management


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Schools of Business Management

  1. 1. Different School of Management Thoughts By Kartikey Symbiosis Law School
  2. 2. The Classical Management Perspective  The Classical Perspective on management emerged during the nineteenth & and early twentieth century
  3. 3. The Classical Management Perspective Scientific Management F.W. Taylor(Father of Scientific Management)  Introduced the concept of Scientific Management  Concerned with improving the performance of individual workers (i.e. operational efficiency)  Grew out of the industrial revolution's labor shortage at the beginning of the twentieth century 
  4. 4. The Classical Management Perspective Elements of Scientific Management  Time and Motion Study  Piece Work Pay System/ Differential Rate System  Fatigue study
  5. 5. The Classical Management Perspective Principles of Scientific Management: Replacing Rule of Thumb with Science Harmony in Group Action  Cooperation  Maximum Output  Development of workers 
  6. 6. Steps in Scientific Management
  7. 7. The Classical Management Perspective (cont’d) Henry Gantt  He was an early associate of Fredrick W. Taylor.  Developed other techniques, including the Gantt chart, to improve working efficiency through planning/scheduling
  8. 8. The Classical Management Perspective (cont’d  This is a Basic Gantt chart example. It shows tasks in a Security and Access Control project. Tasks are outlined in two sections. Each task uses a yellow triangle to indicate the start date of the task and a green down triangle to indicate the finish date of the task. Also shown on this schedule are the responsible subcontractors for the project (in the column labeled R-E-S-P).
  9. 9. The Classical Management Perspective Frank & Lillian Gilberth  Reduced the number of movements in bricklaying, resulting in increased output of 200%.  Both collaborated fatigue and motion studies
  10. 10. The Classical Management Perspective (Administrative Mgmt) Administrative Management  A theory that focuses on managing the total organization and not only on productivity of individual.
  11. 11. The Classical Management Perspective (Administrative Mgmt) Max Weber  He developed a theory of authority structures and relations Bureaucracy- ideal type of organization  Focused on:  division of labor  ‡ clearly defined hierarchy  ‡ detailed rules and regulations  ‡ impersonal relationships
  12. 12. Weber’s Ideal bureaucracy
  13. 13. Henri Fayol (1841-1925) Henri Fayol was a French mining engineer and management theorist. He developed the theory of Scientific Management. He studied at the mining school "Ecole Nationale Superieure des Mines" in SaintEtienne of France  He is well known as the father of modern management theory. Fayol started as an engineer at a mining company and he became its managing director in 1888. 
  14. 14. Henri Fayol (1841-1925) Fayol's contributions were first published in book titled "Administration Industrielle et Generale", in 1916.  He looked at the problems of managing an organisation from top management point of view.  He has used the term 'administration' instead of 'management'.  His contributions are generally termed as operational management or administrative management. 
  15. 15. Managerial Qualities According to Fayol a manager must have following qualities:  Physical (health, vigour, and address)  Mental (ability to understand and learn, judgement, mental vigour, and capability)  Moral (energy, firmness, initiative, loyalty, tact, and dignity)  Education (general acquaintance)  Technical (peculiar to the function being performed)  Experience (arising form the work).
  16. 16. The Classical Management Perspective (Administrative Mgmt ) Henry Fayol said, Activities could be divided into six groups: 1. Technical (related to product) 2. Commercial (buying, selling ) 3. Financial (Search for capital & use) 4. Security (protection of property and person) 5. Accounting (including statistics) 6. Management (P,O C)
  17. 17. Fayol’s 14 Principles for Organizational Design and Effective Administration 1. Division of Labor: allows for job specialization.  Fayol noted firms can have too much specialization leading to quality output and proper worker involvement. 2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command: Employees should have only one boss. 4. Line of Authority: a clear chain from top to bottom of the firm. 5. Centralization: the degree to which authority rests at the very top.
  18. 18. Fayol’s 14 Principles for Organizational Design and Effective Administration 6. Unity of Direction: One plan of action to guide the organization. 7. Equity: Treat all employees fairly in justice and respect. 8. Order: Each employee is put where they have the most value. 9. Initiative: Encourage innovation. 10. Discipline: obedient, applied, respectful employees needed.
  19. 19. Fayol’s 14 Principles for Organizational Design and Effective Administration 11. Remuneration of Personnel: The payment system contributes to success. 12. Stability of Tenure: Long-term employment is important. 13. General interest over individual interest: The organization takes precedence over the individual. 14. Esprit de corps: Share enthusiasm or devotion to the organization.
  20. 20. The Classical Management Perspective (Administrative Mgmt) Mary Parker Follet (1863-1933)  Stressed the importance of organizations establishing common goals to its employees.  Her Holistic´ model of control took into account not just individuals and groups, but the effects of environmental factors also. 
  21. 21. The Classical Management Perspective Today CONTRIBUTION:  Laid the foundation for later theoretical developments.  Identified management processes, functions, and skills.  Focused attention on management as a valid subject of scientific inquiry
  22. 22. The Classical Management Perspective Today Limitations :  More appropriate approach for use in traditional, stable, simple organizations.  Prescribed universal procedures that are not appropriate in some settings.  Employees viewed as tools rather than as resources
  23. 23. The Behavioral Management Perspective Hugo Munsterberg (1863±1916)  A German psychologist, considered the father of industrial psychology, wrote Psychology and Industrial Efficiency,´ a pioneering work in the practice of applying psychological concepts to industrial settings. 
  24. 24. Neo-Classical Period Human relations Approach Behavioral Science Approach
  25. 25. Human relations Approach: The Hawthorne Studies Conducted by Elton Mayo and associates at Western Electric (1927±1932)  Illumination study.  Elton Mayo's studies grew out of preliminary experiments at the Hawthorne plant from 1924 to 1927 on the effect of light on productivity.  Those experiments showed no clear connection between productivity and the amount of illumination but researchers began to wonder what kind of changes would influence output. 
  26. 26. The Hawthorne Studies     Relay Assembly Test room. Mass Interview Program. Factors Studies: Impact of Working Hours, Resting Hour & Proportionate Compensation over Productivity The major finding of the study was that irrespective of the experimental manipulation, worker production seemed to improve continually. One reasonable conclusion is that the workers were happy to receive attention from the researchers who expressed an interest in them. Originally, the study was expected to last one year, but since the findings were inexplicable when the researchers tried to relate the worker's efficiency to manipulated physical conditions, the project was incrementally extended to five years.
  27. 27. Elton Mayo's Contribution  Bank Wiring observation Room  Factors: Impact of formally unmonitored work over productivity Findings:  The aptitudes of individuals are imperfect predictors of job performance. Although they give some indication of the physical and mental potential of the individual, the amount produced is strongly influenced by social factors. 
  28. 28. Elton Mayo's Contribution  Informal organization affects productivity. The researchers discovered a group life among the workers. The studies also showed that the relations that supervisors develop with workers tend to influence the manner in which the workers carry out directives.  Work-group norms affect productivity. The Hawthorne researchers recognized that work groups tend to arrive at norms of what is "a fair day's work.“ They provided the best systematic description and interpretation of this phenomenon.
  29. 29. Elton Mayo's Contribution  The workplace is a social system. The researchers came to view the workplace as a social system made up of interdependent parts. The worker is a person whose attitudes and effectiveness are conditioned by social demands from both inside and outside the work plant. Informal group within the work plant exercise strong social controls over the work habits and attitudes of the individual worker.
  30. 30. Elton Mayo's Contribution The need for recognition, security and sense of belongingness is more important in determining workers' morale and productivity than the physical conditions under which he works.
  31. 31. Behavioral Science Approach Emphasized individual attitudes and behaviors, and group processes.  Recognized the importance of behavioral processes in the workplace  Abraham Maslow :  Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy. 
  32. 32. Maslow’s hierarchy of needs
  33. 33. Douglas McGregor Th:  He Proposed Theory X and Theory Y concepts of managerial beliefs about people and work Theory X :  It assumes that workers have little ambition, dislike work, want to avoid responsibility, and need to be closely controlled
  34. 34. Theory Y  It assumes that workers can exercise selfdirection, accept and actually seek out responsibility, and consider work to be a natural activity
  35. 35. Chester Barnard’s contribution  In his youth, Barnard worked in a farm, then studied economics at Harvard University, earning money tuning pianos and operating a dance band. Harvard denied him a BA because of a technicality, but a number of universities later granted him honorary doctorates.
  36. 36. Barnard joined the American Telephone and Telegraph Company (now AT&T) in 1909. In 1927, he became president of the New Jersey Bell Telephone Company.  During the Great Depression, he directed the New Jersey state relief system .He was president of the United Service Organizations (USO), 1942-45 
  37. 37. Chester Barnard’s contribution Upon retiring from business, he served as president of the Rockefeller Foundation, 1948-52, and as chairman of the National Science Foundation, 1952-54.  End 1950s he was among the first members of the Society for General Systems Research 
  38. 38. Chester Barnard’s contribution Barnard looked at organizations as systems of cooperation of human activity, and noted that they are typically shortlived.  It is rare for a firm to last more than a century. Similarly most nations last for less than a century. 
  39. 39. The only organization that can claim a substantial age is the Roman Catholic Church.  According to Barnard, organizations are not long-lived because they do not meet the two criteria necessary for survival: effectiveness and efficiency. 
  40. 40. Effectiveness Effectiveness, is defined as being able to accomplish stated goals.  It is the ultimate objective of cooperative action .  It Cannot be achieved without cooperation from employees . 
  41. 41. efficiency He defined efficiency of an organization as the degree to which that organization is able to satisfy the motives of the individuals  If an organization satisfies the motives of its members while attaining its explicit goals, cooperation among its members will last. 
  42. 42. Functions of the Executive  Barnard's classic 1938 book Functions of the Executive discusses, as the title suggests, the functions of the executive, but not from a merely intuitive point of view, but instead deriving them from his conception of cooperative systems.
  43. 43. Authority and incentives Barnard summarized the functions of the executive as follows:  Barnard formulated two interesting theories: (a) authority (b) incentives. Both are seen in the context of a communication system grounded in seven essential rules:
  44. 44. Authority and incentives The channels of communication should be definite;  Everyone should know of the channels of communication;  Everyone should have access to the formal channels of communication; 
  45. 45. Authority and incentives Lines of communication should be as short and as direct as possible;  Competence of persons serving as communication centers should be adequate;  The line of communication should not be interrupted when the organization is functioning;  Every communication should be authenticated. 
  46. 46.  Thus, what makes a communication authoritative rests with the subordinate rather than with his superior. Barnard's perspective had affinities to that of Mary Parker Follett and was very unusual for his time, and that has remained the case down to the present day. He seemed to argue that managers should obtain authority by treating subordinates with respect and competence.
  47. 47. Incentives  As for incentives, he proposed two ways of convincing subordinates to cooperate: tangible incentives and persuasion. He gives great importance to persuasion, much more than to economic incentives.
  48. 48. Incentives He described general and as well as specific incentives such as :  Money and other material inducements;  Personal non-material opportunities for distinction;  Desirable physical conditions of work;  Ideal benefactions, such as pride of workmanship etc