Development of Management Thought [BBA 306] Unit 33.1 Scientific Management: Scientific management, also called Taylorism,...
Development of Management Thought [BBA 306] Unit 33.1.1 Evolution of Scientific Management: Dr. Frederick Winslow Taylor i...
Development of Management Thought [BBA 306] Unit 3The above chart illustrates Taylors four principles of scientific manage...
Development of Management Thought [BBA 306] Unit 33.2 Contribution of Henri Fayol: Todays managers have access to an amazi...
Development of Management Thought [BBA 306] Unit 36. Subordination of Individual Interests to the General Interest – The i...
Development of Management Thought [BBA 306] Unit 3He was closely involved in restructuring the management and organisation...
Development of Management Thought [BBA 306] Unit 33.4 Mary Parker FollettMary Parker Follett (1868–1933) was an American s...
Development of Management Thought [BBA 306] Unit 3most of her attention to writing for a wider public regarding what the s...
Development of Management Thought [BBA 306] Unit 3Effectiveness, is defined the usual way: as being able to accomplish the...
Development of Management Thought [BBA 306] Unit 3   •   The establishment and maintenance of the system of communication ...
Upcoming SlideShare
Loading in …5

Development of Business Thought Unit 3


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Development of Business Thought Unit 3

  1. 1. Development of Management Thought [BBA 306] Unit 33.1 Scientific Management: Scientific management, also called Taylorism, was a theoryof management that analyzed and synthesized workflows. Its main objective wasimprovingeconomic efficiency, especially labor productivity. It was one of the earliestattempts to apply science to the engineering of processes and to management. Itsdevelopment began with Frederick Winslow Taylor in the 1880s and 1890s withinthe manufacturing industries. Its peak of influence came in the 1910s; by the 1920s, it was stillinfluential but had begun an era of competition and syncretism with opposingor complementary ideas. Although scientific management as a distinct theory or school ofthought was obsolete by the 1930s, most of its themes are still important parts of industrialengineering and management today. These include analysis; synthesis;logic; rationality; empiricism; work ethic; efficiency and elimination ofwaste; standardization of best practices; disdain for tradition preserved merely for its own sakeor merely to protect the social status of particular workers with particular skill sets; thetransformation of craft production into mass production; and knowledge transfer betweenworkers and from workers into tools, processes, and documentation.The core ideas of scientific management were developed by Taylor in the 1880s and 1890s, andwere first published in his monographs Shop Management (1903) and The Principles of ScientificManagement (1911).While working as a lathe operator and foreman at Midvale Steel, Taylor noticed the naturaldifferences in productivity between workers, which were driven by various causes, includingdifferences in talent, intelligence, or motivations. He was one of the first people to try to applyscience to this application, that is, understanding why and how these differences existed andhow best practices could be analyzed and synthesized, then propagated to the other workersvia standardization of process steps. He believed that decisions based upon tradition and rulesof thumb should be replaced by precise procedures developed after careful study of anindividual at work, including via time and motion studies, which would tend to discover orsynthesize the "one best way" to do any given task.[4]The goal and promise was both anincrease in productivity and reduction of effort.Scientific managements application was contingent on a high level of managerial control overemployee work practices. This necessitated a higher ratio of managerial workers to laborersthan previous management methods. The great difficulty in accurately differentiating any suchintelligent, detail-oriented management from mere misguided micromanagement also causedinterpersonal friction between workers and managers, and social tensions between the blue-collar and white-collar classes.Rahul Pratap Singh Kaurav Page 1
  2. 2. Development of Management Thought [BBA 306] Unit 33.1.1 Evolution of Scientific Management: Dr. Frederick Winslow Taylor in a speech called "ThePrinciples of Scientific Management" delivered on March 3, 1915 to the Cleveland AdvertisingClub exhorts his audience to take on a new, revolutionary view of the way work should getdone. To combat the time-ingrained attitude of workmen throughout the world that "it is intheir best interest to go slow instead of fast," Taylor proposes four principles of the scientificmanagement of work. He asserts that even though the average businessman believes that ifworkers were to go fast, thus increasing efficiency resulting in a money saving decrease ofworkforce, just the opposite would be true. Taylor believes increasing the efficiency of theworkman scientifically would increase the not only the opportunity for more work, but also thereal wealth of the world, happiness, and all manner of worthwhile improvements in the life ofthe working person. For Taylor, increased workman output will result in improved quality oflife.Taylor, a mechanical engineer, seeks to apply a positivistic, rational perspective to theinefficient work organization. A second "misfortune of industry" that impedes the progress ofimproving work is what Taylor refers to as the "soldiering" of the worker, which essentiallymeans to make a show of work not necessarily doing ones best. The worker tries to balancethe inner conflict he feels as a result of worry about job security versus expectations ofproductivity. Taylor says that the worker is not to blame for soldiering since, even if given theopportunity to work harder with greater output, the effect on the labor market is such that rateof pay is cut. What incentive does management have to pay a man more wages, even forgreater output, when another man will accept less for, albeit, less output. Taylor believes thatscientific management of work will alleviate the common work problems of inefficiency, slowrate of work, and decreased productivity. Logically, according to Taylor’s view, soldiering woulddisappear as workers’ productivity and security improved.3.1.2 Principles of Scientific Management:Rahul Pratap Singh Kaurav Page 2
  3. 3. Development of Management Thought [BBA 306] Unit 3The above chart illustrates Taylors four principles of scientific management. Taylor is careful toassert that scientific management is no new set of theories that have been untried, a commonmisunderstanding. He says that the process of scientific management has been an evolution,and in each case the practice has preceded the theory. Further, scientific management is inpractice in various industries: "Almost every type of industry in this country has scientificmanagement working successfully." (Shafritz p.69) According to Taylor, the workman, on theaverage, in those industries where scientific management has been introduced, has turned outdouble the output and been the beneficiary of many improvements in working conditions.Taylor’s principles of scientific management derive from the positivistic paradigm. Positivismattempts to view the world rationally, free of subjective values, applying logic and reductionismto the process of determining cause and effect. Taylor’s principles offer a method to gatherinformation about the work process and the worker. The selection and training workersaccording to a scientific approach attempts to bring together the worker and the gathered,codified knowledge about work engendering some form of teamwork between the manger andthe worker. Taylorism seeks a careful, objective approach to the way work is done based on arational, apparently scientific approach. Positivism applied to social theory perceives anorganization as a rational bureaucracy with an appropriate hierarchy. “Organizations were seenas machines and people were viewed as appendages to those machines” (Carlson, 1996, p. 20).Both organizations and people need to be carefully controlled and monitored. This examinationof the organization and the people in it is done through a rational, objective process thatreduces the functioning of the organization to a logical, scientific method that can bereplicated. Positivism cannot be applied to all organizations. Efficiency, impersonalrelationships, rationality and logic do not work well in social systems such as schools, which canbe unpredictable requiring flexibility, negotiation, and interactivity (p.21).According to Pfeffer in Shafritz and Ott (1996), the role of power in the decisionmaking processof the rational/bureaucratic organization is centralized, and control is exercised over goals so asto be consistent with rules of logic like Taylor’s scientific principles. Decisions are made toincrease efficiency in the Taylor model. Social systems such as schools often confrontambiguous situations requiring flexibility. There can be no “one best way.” When confrontedwith decision-making in a complex social organization, political power can be expected toinfluence coalitions and cause conflicting interests, create disorder, cause disagreement,bargaining, and struggle for position. All aforementioned effects of political power in a complexsocial organization are unacceptable and unthinkable in the rational model represented byTaylor.Rahul Pratap Singh Kaurav Page 3
  4. 4. Development of Management Thought [BBA 306] Unit 33.2 Contribution of Henri Fayol: Todays managers have access to an amazing array ofresources which they can use to improve their skills. But what about those managers who wereleading the way forward 100 years ago?Managers in the early 1900s had very few external resources to draw upon to guide anddevelop their management practice. But thanks to early theorists like Henri Fayol (1841-1925),managers began to get the tools they needed to lead and manage more effectively. Fayol, andothers like him, are responsible for building the foundations of modern management theory.3.2.1 Background: Henri Fayol was born in Istanbul in 1841. When he was 19, he began workingas an engineer at a large mining company in France. He eventually became the director, at atime when the mining company employed more than 1,000 people.Through the years, Fayol began to develop what he considered to be the 14 most importantprinciples of management. Essentially, these explained how managers should organize andinteract with staff.In 1916, two years before he stepped down as director, he published his "14 Principles ofManagement" in the book "Administration Industrielle et Generale." Fayol also created a list ofthe six primary functions of management, which go hand in hand with the Principles.Fayols "14 Principles" was one of the earliest theories of management to be created, andremains one of the most comprehensive. Hes considered to be among the most influentialcontributors to the modern concept of management, even though people dont refer to "The 14Principles" often today.The theory falls under the Administrative Management school of thought (as opposed to theScientific Management school, led by Fredrick Taylor).3.2.2 Fayols 14 Principles of Management: Fayols principles are listed below:1. Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.2. Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.4. Unity of Command – Employees should have only one direct supervisor.5. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.Rahul Pratap Singh Kaurav Page 4
  5. 5. Development of Management Thought [BBA 306] Unit 36. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.8. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.9. Scalar Chain – Employees should be aware of where they stand in the organizations hierarchy, or chain of command.10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans.14. Esprit de Corps – Organizations should strive to promote team spirit and unity.3.2.3 Fayols Six Functions of Management: Fayols six primary functions of management,which go hand in hand with the Principles, are as follows:1. Forecasting.2. Planning.3. Organizing.4. Commanding.5. Coordinating.6. Controlling.3.3 Oliver Sheldon’s Philosophy of Management: Oliver Sheldon (1894-1951) was a director ofthe Rowntree Company in York, in the UK, in the 1920s.Rahul Pratap Singh Kaurav Page 5
  6. 6. Development of Management Thought [BBA 306] Unit 3He was closely involved in restructuring the management and organisation of the growingconfectionery company at a stage where its growth meant by necessity it had to move awayfrom the personal, family-centred management of its founder, Joseph Rowntree, towards amore professional culture. Under the chairmanship of Josephs son, Seebohm, the companyadopted Sheldons proposals for a more functional style of organisation, but he tempered thiswith a belief, shared by the Rowntree firms senior managers, that industry existed for morethan the profit of shareholders. Sheldon held that good management was about more thantechnique - it should be concerned with human understanding. "The leadership of men calls forpatience, courage, and, above all, sympathy." Service to the community was the primary motiveand fundamental basis of industry.Consequently, Sheldon advocated a human relations style of management which placed theindividual in a human context involving a range of emotional and psychological needs. In this,he disagreed fundamentally with contemporaries such as Taylor, who saw economic need asbeing the primary motivator of workers. Anticipating later writers such as Mayo and Herzbergby some years, Sheldon argued that, while basic economic needs must be met, wider personaland community needs were equally important. Industry was key to shaping society and theleaders and managers of industry consequently had to work to ethical considerations whichwere greater than purely financial. While stressing the need for efficiency, he saw service anddemocracy as complementary to this - reflecting long established Rowntree practices,introduced by Joseph and extended by Seebohm Rowntree and Oliver Sheldon, such asensuring their workers were paid a "living wage", had decent working conditions and wereconsulted on and involved in decision making in the workplace. Both the firm and individualdirectors were closely involved in a range of community work, often motivated bytheirQuaker religious beliefs and/or their Liberal politics. In 1904, Joseph Rowntree gave awayhalf his personal fortune and almost two-thirds of the shares in the company to three Trusts topursue a range of charitable, social and political work. All three continue today in the forms ofthe Joseph Rowntree Charitable Trust, the Joseph Rowntree Foundation (which includes theJoseph Rowntree Housing Trust) and the Joseph Rowntree Reform Trust. All are still based inYork.Although with the passage of time, the Rowntree company was to change and develop in newways (particularly with new brands and marketing from the 1930s on), and in 1988 was boughtby Nestlé, it retained a tradition of good management throughout, in keeping with thephilosophy of its founder and those around him. Sheldon explored this in his 1924 book, "ThePhilosophy of Management", which demonstrated his twin concerns for sound business andethical practice when he stated: "The cost of building the Kingdom of Heaven will not be foundin the profit and loss accounts of industry, but in the record of every mans conscientiousservice."Rahul Pratap Singh Kaurav Page 6
  7. 7. Development of Management Thought [BBA 306] Unit 33.4 Mary Parker FollettMary Parker Follett (1868–1933) was an American social worker,consultant, and author of books on democracy, human relations, andmanagement. She worked as a management and political theorist,introducing such phrases as "conflict resolution," "authority andpower," and "the task of leadership."Follett was born into an affluent Quaker family in Massachusetts andspent much of her early life there. In 1898 she graduated fromRadcliffe College. Over the next three decades, she published severalbooks, including: • The Speaker of the House of Representatives (1896) • The New State (1918) • Creative Experience (1924) • Dynamic Administration (1941) (this collection of speeches and short articles was published posthumously)Follett suggested that organizations function on the principle of power "with" and not power"over." She recognized the holistic nature of community and advanced the idea of "reciprocalrelationships" in understanding the dynamic aspects of the individual in relationship to others.Follett advocated the principle of integration, "power sharing." Her ideas on negotiation,power, and employee participation were influential in the development of organizationalstudies. She was a pioneer of community centres.Mary Parker Follett (1868-1933) was a visionary and pioneering individual in the field of humanrelations, democratic organization, and management. Born in Massachusetts, in 1892 sheentered what would become Radcliffe College, the womens branch of Harvard. She graduatedfrom Radcliffe summa cum laude in 1898. Folletts intensive research into government while atRadcliffe was later published in her first book, The Speaker of the House of Representatives(1909), which was lauded (by, among others, Theodore Roosevelt) as the best study of thisoffice of government ever done.From 1900 to 1908, Follett devoted herself to social work in the Roxbury neighborhood ofBoston. In 1908 she became chairperson of the Womens Municipal Leagues Committee onExtended Use of School Buildings, and in 1911 she helped open the East Boston High SchoolSocial Center. She was instrumental in the formation of many other social centers throughoutBoston. Her experience in this area helped to transform her view of democracy. Follett laterserved as a member of the Massachusetts Minimum Wage Board, and in 1917 she became vice-president of the National Community Center Association. By this time, however, she had turnedRahul Pratap Singh Kaurav Page 7
  8. 8. Development of Management Thought [BBA 306] Unit 3most of her attention to writing for a wider public regarding what the social centers had taughther about democracy. In 1918 she published her second book, The New State, which isconcerned with the human nature of government, democracy, and the role of local community.In 1924, Follett published her third book, Creative Experience. This work addresses moredirectly the creative interaction of people through an on-going process of circular response.From this point until her death in 1933, Follett found her most enthusiastic audience in theworld of business. Admiration and respect for her work grew on both sides of the Atlantic, andshe became a leading management consultant. (Peter Drucker, who discovered Folletts work inthe 1950s, is said to have referred to Follett as his "guru.") Her various papers and speeches inthis context were published in 1942 by Henry Metcalf and Lionel Urwick in a book calledDynamic Administration. Another celebration of her work in this context is Mary Parker Follett:Prophet of Management, which was edited by Pauline Graham and published in 1995. In 1998,The New State was re-issued by Penn State Press, with a preface by Benjamin Barber. Abiography of Follett, written by Joan Tonn, a professor at the College of Management,University of Massachusetts, Boston, is expected to be published next year.Follett is increasingly recognized today as the originator, at least in the 20th century, of ideasthat are today commonly accepted as "cutting edge" in organizational theory and publicadministration. These include the idea of seeking "win-win" solutions, community-basedsolutions, strength in human diversity, situational leadership, and a focus on process. However,just as her ideas were advanced for her own time, and advanced when people wrote aboutthem decades after her death, they remain too often unrealized. We recognize them as aninspirational and guiding ideal for us today, at the beginning of the 21st century. It is theintention and the design of the Foundations programs to continue the effort to bridge idealand practice in a continuous process that gives rise to true freedom.3.5 Chester I. BarnardChester Irving Barnard (1886–1961) was a telecommunications executiveand author of Functions of the Executive, an influential 20th centurymanagement book, in which Barnard presented a theory of organization andthe functions of executives in organizations.Chester Barnard looked at organizations as systems of cooperation ofhuman activity, and was worried about the fact that they are typically rathershort-lived. Firms that last more than a century are rather few, and the onlyorganization that can claim a substantial age is the Catholic Church.According to Chester Barnard, this happens because organizations do not meet the two criterianecessary for survival: effectiveness and efficiency.Rahul Pratap Singh Kaurav Page 8
  9. 9. Development of Management Thought [BBA 306] Unit 3Effectiveness, is defined the usual way: as being able to accomplish the explicit goals. Incontrast, his notion of organizational efficiency is substantially different from the conventionaluse of the word. He defines efficiency of an organization as the degree to which thatorganization is able to satisfy the motives of the individuals. If an organization satisfies themotives of its participants, and attains its explicit goals, cooperation among them will last.Two of his theories are particularly interesting: the theory of authority and the theory ofincentives. Both are seen in the context of a communication system that should be based inseven essential rules: • 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 • 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 organization is functioning • Every communication should be authenticatedThus, what makes a communication authoritative rests on the subordinate rather than in theboss. Thus, he takes a perspective that was very unusual at that time, close to that of MaryParker Follett, and is not that usual even today. One might say that managers should treatworkers respectfully and competently to obtain authority.In the theory of incentives, he sees two ways of convincing subordinates to cooperate: tangibleincentives and persuasion. He gives great importance to persuasion, much more than toeconomic incentives. He described four general and four specific incentive.The specific inducements were:1. Material inducements such as money2. Personal non-material opportunities for distinction3. Desirable physical conditions of work4. Ideal Benefactions, such as pride of workmanship etc.The book Functions of the Executive is complex, not light reading. His main objective, asindicated by the title, is to discuss the functions of the executive, but not from a merelyintuitive point of view, but deriving them from a conception of cooperative systems based onprevious concepts.Barnard ends by summarizing the functions of the executive (the title of the book) as being:Rahul Pratap Singh Kaurav Page 9
  10. 10. Development of Management Thought [BBA 306] Unit 3 • The establishment and maintenance of the system of communication • The securing of the essential services from individuals • The formulation of the organizational purpose and objectivesKey concepts of Chester Barnards StudiesImportance of an Individuals behaviourFelt other theorists had underestimated the variability of individual behaviour and impact ofthis on organizational effectiveness.ComplianceConcept of "zone of indifference" - orders must be perceived in neutral terms to be carried outwithout conscious questioning of authority. Incentives,can be used to expand zone, butmaterial incentives alone limited in their ability to effect compliance - need also use status,prestige, personal power.CommunicationCentral concept - decision-making processes depend on communications, he describedcharacteristics and focussed on importance of communication in informal organisationOther pointsOrganisations made up of individual humans with individual motivations. Every largeorganization includes smaller, less formal groupings whose goals need to be harnessed to thoseof the whole - this is managements responsiblity.Management efficiency vs. effectivenessAuthority only exists in so far as the people are willing to accept it3 basic principles for ensuring effectiveness of comms*everyone should know what the channels of communication are*everyone should have access to a formal channel of communications*lines of communication should be as short and direct as possibleManagers key tasks are to set up systems to motivate employees towards the organisationsgoals - individuals working to a common purpose rather than by authority - real role of ChiefExec is to manage the values of the organisation.Rahul Pratap Singh Kaurav Page 10