GM - ORGANIZATION THEORY

1. Evolution of Management Thought: An Introduction

2. Discussion Agenda
 Why learn about last few centuries?
 Management-Liberal arts/Science-practice and a discipline/Does it have
its own principles?
 Tracking the Evolution since Industrial revolution
 Evolution linked to current organization perspectives
 What is an organization?-Perspectives/Levels of Management
 What is Management?-Organization of work or Organization of
workers?/Functions of Management/What do managers do?
 Roles of Managers
 Skills needed by managers
 Approaches of Management-Do we need to change? Leadership &
Management?
 Do managers need to be socially responsible? Road to Sustainability-
Linked to Leadership?
 Researchable Areas?

3. Amit Gupta
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Management Ideas and practice throughout History

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Context of Evolution of Management Thinking
 Industrial Revolution, in modern history, is the process of change from an agrarian, handicraft economy to one
dominated by industry and machine manufacture
 The term Industrial Revolution was first popularized by the English economic historian Arnold Toynbee (1852–83) to
describe Britain’s economic development from 1760 to 1840
 Main features involved in the Industrial Revolution were technological, socioeconomic, and cultural
 The technological changes included the use of new basic materials, chiefly iron and steel, the use of new energy
sources, including both fuels and motive power, such as coal, the steam engine, electricity, petroleum, and
the internal-combustion engine, the invention of new machines, such as the spinning jenny and the power loom that
permitted increased production with a smaller expenditure of human energy, a new organization of work known as
the factory system, which entailed increased division of labour and specialization of function, important
developments in transportation and communication, including the steam locomotive, steamship, automobile,
airplane, telegraph, and radio, and the increasing application of science to industry. These technological changes
made possible a tremendously increased use of natural resources and the mass production of manufactured goods.

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Context of Evolution of Management Thinking (2/2)
 Economic changes that resulted in a wider distribution of wealth, the decline
of land as a source of wealth in the face of rising industrial production, and
increased international trade
 Sweeping social changes, including the growth of cities, the development of
working-class movements, and the emergence of new patterns of authority
 Cultural transformations of a broad order. Workers acquired new and
distinctive skills, and their relation to their tasks shifted; instead of being
craftsmen working with hand tools, they became machine operators, subject
to factory discipline

6. Amit Gupta 6
Navigating the Next Industrial Revolution

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Major Classification of Management Evolution

8. Major Management Approaches
 Classical Theories:1880-1920s: Scientific/Administrative/Bureaucratic:
Taylor/Gantt/Gilbreths/ Emerson/Fayol/Simon/Weber: Deductive Theories
 Neo Classical Theories:1920-1950s: Human Relations/Behavioural: Elton Mayo/
Roethlisberger/ Dickson/ Maslow/Mcgregor/Herzberg/Barnard Alderfer/Argyris/Bennis:
Deductive Theories
 Modern Management Theories:1956+ highlights the complexity of the organization as
well as individuals and the diversity of their needs, motives, aspirations and potential:
Systems-Barnard/Simon/Contingency-Lawrence & Lorsch/Management Science-
Synthesis period: Litchfield’s: Administrative Science Quarterly: Inductive Theories
 It is interesting to note that the classical theory was organization-centered with
emphasis on efficiency having process or functional approach based on deductive
evidence and descriptive research. Neoclassical theory had the person-centered
approach, was increasingly experimental and almost remained descriptive and
highly deductive

9. PROBLEMS AND CONFLICTS IN MANAGEMENT THEORIES
There are contradictory and conflicting arguments in management theories and
hence they are no more than proverbs. The problem is how a practitioner must
choose his approach.
Alternatively, is there any way to synthesis a unified management theory from
among the diffused theories or the jungle of approaches
Another basic problem of the management theory is to provide adequate
explanations and predictions in subject matter that is subjected to rapid and
extensive change. Management theories have to be dynamic and embrace a
number of upcoming subjects and concepts.
The applied science nature of management is that of separating the
managerial implications from non managerial implications when inputs are
taken from the
fields like organization theory, decision theory, personality theory, game
theory, information theory, communication theory, learning theory, group
theory and motivation theory.
The problem is to demonstrate and support conclusions applicable to

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11. Organization Perspectives
 Social-Psychological: Focus on individual and interpersonal
relations-Mayo Hawthorne Experiments?
 Structural level: Focus on the organization in general and
subdivisions-departments, teams, etc: Weber?/
Contingency Theory?
 Macro level: Organization as a player in relation to other
organizations and society

12. Primary Areas of Focus
 Focus on performance of tasks and activities: Scientific management/ Administrative theory/
Bureaucracy model-Taylor/Fayol-Coordination & Specialization/Weber-Social & historical
perspective/Simon-Administrative Behaviour-Economic Man v/s Administrative Man-Bounded
rationality ( satisficing)/ Gilbreths/Alfred Sloan & Chester Barnard
 Focus on motivation: Inner motivation/ Motivation theory based on rational factors/Follett
Expectancy theory-Vroom= ExIxV-Efforts-Success-Reward value-Psychological contract ?/MBO-
Drucker/ Rewards & Reinforcement-Skinner Motivation theory based on needs/Maslow/ Alderfer
ERG/ Mc Clelland-APA/ Herzbergs/ Self-Efficacy-Pygmalion/Golem Effect/McGregor
 Focus on adjustment to the surrounding environment: Strategy/ Organizational model with loose
couplings K.Weick/ Organizational learning/ The learning organization-Argyris and Senge/External
environment factors and five organization forms-Mintzberg
 Leadership & Change Management: Schein-Diagnosis/Continuum of leadership behaviour-
Tannenbaum-Schmidt/ Model for Situational Leadership-Hersey-Blanchard/ Leading Change-Kotter

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Individual View: Economic Man and Administrative Man

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The Motivational Model’s Process, Behavior & Performance

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Motivation and the Probability of Success

18. Skills of Managers

22. Controlling through Decision Making?-Simon

23. Approaches of management-Schools of
Management Thought….1/2
Empirical or Case approach: close study of past managerial experiences-
Contributors Earnest Dale, Mooney and Reiley, Urivick and other management
practitioners
Human Behavior Approach: considered a study of managers in practice
Social System Approach: management is the process of getting things done by
people, managers should understand human behavior. Emphasis is put on
increasing productivity through motivation and good human relations. Motivation,
leadership, communication, participative management and group dynamics are
the central core of this approach. real pioneer of this approach is Vilfredo
Pareto, a sociologist and later Chester Barnard
Socio-Technical Systems Approach:•The socio-technical systems approach of
management views an organization as a combination of 2 systems – a social
system and a technical system

24. Approaches of management-Schools of Management
Thought….2/2
Decision Theory Approach: Management is essentially decision-making
Management Science Approach: Mathematical or Quantitative Measurement
Approach
Systems Approach: system of mutually dependent parts, each of which may
include many subsystems.
Contingency or Situational Approach: Organizational action should be based on
the behaviour of action outside the system so that organization should be
integrated with the environment.
Operational Approach:Management is the study of what managers do. It
emphasises on management functions and various concepts and principles
involved in performing these functions

25. Do Managers need to be Socially Responsible?

26. Responses of Organizations

27. Strategic CSR-A Criteria Matrix: Road to Sustainability

28. Leadership & Management
With Leadership the organization does not experience over-control
where initiatives are stifled and innovation is difficult
With management, the organization will not be out of control in the
longer term
Managing the creative tension between the two is the crux of the
“learning organization”

29. Researchable Areas??
 Food for thought???