Development of management thought - Prof. Smita.Verma


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School of management thought -evolution of management thoughts by various contributors all the approaches - early classical approach , neo classical approach and modern approach .

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Development of management thought - Prof. Smita.Verma

  2. 2. After studying this chapter ,you should be able to :-  Know the contributions of Robert Owen, Charles Babbage , F.W.Taylor .Henry Gnatt and the Gilbreths to scientific management .  Understand the principles of scientific management and also criticisms leveled against them .  Analyze the contribution contributions made by Henry Fayol and Max weber to administrative management . Henry Gnatt Robert Owen Charles Babbage F.W.Taylor
  3. 3. After studying this chapter ,you should be able to :-  Appraise the Fayol’s Principles of management and criticism leveled against them particularly due to globalization and information technology.  Comment on the contributions of Mark Parker follet ,Chester I Bernard and elton Mayo to Human Relations School .  Evaluate the contributions of human relation approach to management thought.  Understand the contributions of systems approach to management , Contingency approach to management , HRM approach and Management Science Approach to management. Mark Parker follet Chester I Bernard Elton MayoHenri Fayol
  4. 4. Various Approaches to management 1. Early Classical Approach represented by Scientific management , administrative management and bureaucracy . 2. Neo- Classical Approaches represented by human relations movement and behavioral approach . 3. Modern Approaches represented by Quantitative approach ,system approach and contingency approach .
  5. 5. Early Classical Approach 1. Scientific management 2. Administrative management 3. Bureaucracy .
  6. 6. Scientific Management The forerunners of scientific management theory are :- Robert Owen Charles Babbage F.W.Taylor Henry Gnatt
  7. 7. Robert Owen  Robert Owen was the manager of different cotton textile mills between 1800 and 1828 .  He was the first person to pay attention to labour welfare .  He suggested the change in the attitude of industrialist towards workers .  He worked to his maximum possible extent for the improvement in working conditions of workers.  He stated that men should not be treated as secondary and inferior to machines
  8. 8. Charles Babbage  Besides Robert Owen there were some scientists who thought of making improvements in the management by observing the scientific techniques ,prominent amongst them was Charles Babbage .  Charles Babbage a leading British mathematician at Cambridge university from 1828-1839 .  He studied and observed the problems that :-  Most of the factories in England and France used to work on the basis of estimates and imagination.  They were traditional rather than scientific minded
  9. 9. Charles Babbage Two Pioneering works of Babbage are  The differential Engine .  The Economy of Machinery and Manufacturers. He stated that the methods of science and mathematics could be applied to the solution of the factory’s problem
  10. 10. Contribution of Babbage  Babbage stressed that good machines and efficient workers do not ensure success in business .Good management that directs and controls machines and workers is the most crucial element in successful business .  He suggested that the use of time study techniques should be done along with division of labour .  He considered all aspects of contemporary management thinking – mutuality of interest between employees and employer ,production control ,incentive pay ,quality control ,wage and salary administration ,profit sharing ,operations research ,preventive maintenance and research and development . “ He wrote a premiere of management before the world is able to read it and he invented the computer before its time .”
  11. 11. Frederick Winslow Taylor  F.W.Taylor known popularly as the father of scientific management and classicist in management theory.  He was the first person who insisted on the introduction of scientific methods In management  He made for the first time the systematic study of management and evolved an orderly set of principles to replace the trial and error methods then in vogue.
  12. 12. Frederick Winslow Taylor  F.W.Taylor made a humble beginning by joining as an apprentice in a small machine –making shop in Philadelphia in the 1870s.Later he became a mechanist in 1878 at the Midvale Steel in Philadelphia (USA ). Afterwards he rose to the position of a machinist foreman .  He observed that workers were not enthusiastic and were doing as little as possible ,just adequate to maintain their job.
  13. 13.  Taylor formed opinions on the basis of his observations.  He had uncompromising nature and he never tried to satisfy his opponents because he was a man of firm convictions .  After leaving Midvale Factory ,he joined Bethlehem steel company : where he introduced scientific management but due to lot of strong opposition and his uncompromising nature he had to take termination from his services
  14. 14.  After resigning from Bethlehem in 1901 ,he wrote his pioneering work “ Shop Management “.  Beside this he wrote several other books and among them the pioneering work was Principles and Methods of Scientific Management ( 1911 ).
  15. 15. Principles Of Scientific Management 1. Time & Motion Study . 2. Science ,but not rule of thumb 3. Differential Payment . 4. Group Harmony . 5. Cooperation between workers and management . 6. Method study 7. Scientific Selection and Training . 8. Standardization . 9. Separation Of Planning from executive
  16. 16. Time & Motion Study  This study involves the following aspects :-  Observing the various motions ( movement )of workers at workplace .  Identifying the necessary and unnecessary movements in carrying out the work .  Elimination of unnecessary movements.  Observing the time required for each of the necessary movements with the help of a stop watch  Developing shorter and fewer motions and  Standardizing the motions and time . Thus ,this study developed the best way of doing the job ,replacing the old rule of thumb.
  17. 17. Science ,but not rule of thumb  Scientific Management suggests doing the work systematically .  Determining the work clearly and sequentially.  Standardization of motions and time for each motion .  Allotment of fair work to each worker .  Scientific Management eliminated the rule of thumb at the workplace
  18. 18. Differential Payment  F.W.Taylor suggested differential piece of rate system .  He fixed the standard level of production .  The Employees who produced less than the standard production received low piece rate.  Employees who produced above the standard production received higher piece rate .  Differential piece rates were introduced in order to motivate the employees to produce more than the standard level and enhance productivity.
  19. 19. Group Harmony  F.W.Taylor emphasized upon group harmony which can be achieved through satisfying the needs of the group members ,  Eliminating the dissatisfaction and frustration of the group members .  Maintaining the sound interpersonal relations among the group members and involving them in various group activities
  20. 20. Cooperation between workers and Management  F.W.Taylor advocated sound employer –Employee Relationship which resulted into cooperation between workers and management .  Sound Employer –Employee relations can be achieved in the following ways :-  Management should understand the workers ‘ needs and take steps to satisfy them .  Workers should understand the organizational requirements like increasing productivity ,sales , profitability etc and maximizing their contributions
  21. 21. Method Study  F.W.Taylor believed that a methodological and systematic movement of materials ensure fast movement of material in the factory .  Avoidance of unnecessary transportation of material from one stage to another stage of production ,reduction of distance from one machine to another machine ,reduction of transportation time etc.
  22. 22. Scientific Selection and Training  He suggested the scientific selection of employees based on job analysis and using various selection tests  He also suggested providing training and development facilities to all employees based on training needs.  This process helps the organization to exploit the employers’ potentialities and faculties for organizational success .
  23. 23. Standardization  Taylor advocated the standardization of tools , instruments ,working hours ,working conditions ,quality of work , cost of production etc .
  24. 24. Separation of Planning from Execution  Taylor advocated that planning function should be bifurcated from the execution functions  Taylor advocated that supervisors perform planning function whereas workers perform execution functions
  25. 25. To sum Up ,he stressed the following :-  Replacement of rule of thumb by science .  Achieving harmony in group action rather than discord .  Attaining maximum output in place of restricted output .  Scientific selection ,training and placement of workers  Development of all workers to the fullest extent possible for their own and their enterprise ‘s highest priority.
  26. 26.  The contribution of the “Scientific “ before “ Management “ was criticized since what actually is meant by scientific management is nothing but an approach to management.  His principles were mostly confined to production management .He ignored other functional areas of management like finance ,marketing ,personnel and accounting .  His functional foremanship violates the principle of unity of command .  Trade unionist criticized Taylor’s principles as the means to exploit workers due to the reason that wages of the workers were not increased in direct proportion to the increase in productivity .
  27. 27.  Despite of all the criticism against the Taylor’s Scientific management the techniques advocated by him were further refined by his followers like Henry Gantt , M . Gilbert . Henry Gnatt
  28. 28.  He had modified the Taylor’s incentive system.  He abandoned the differential rate system as it had too little motivational impact and introduced 50% bonus to those workers who could complete a day’s work .  He also introduced bonus to supervisors for each worker who could complete a day’s work and additional bonus, if the worker reached it ,with a view to enable the supervisors to train their workers to do a better job .  He also built upon Owen’s idea of rating an employee’s work publically Henri Gnatt
  29. 29. Administrative management
  30. 30. Henry Fayol  Henri Fayol (Istanbul, 29 July 1841–Paris , 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration.  He and his colleagues developed this theory independently of Scientific management .  He was one of the most influential contributors to modern concepts of management .
  31. 31. Fayolism  He proposed that there were six primary functions of management and 14 principles of management.  Functions of management proposed by Fayol were  Forecasting  Planning  Organizing  Commanding  Coordinating  Monitoring
  32. 32. Fayol’s Principles of Management  Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialization increases output by making employees more efficient.  Authority. Managers must be able to give orders. Authority gives them this right..
  33. 33. Fayol’s Principles of Management  Discipline.  Employees must obey and respect the rules that govern the organization.  Good discipline is the result of effective leadership,  Clear understanding between management and workers regarding the organization's rules  The judicious use of penalties for infractions of the rules.
  34. 34. Fayol’s Principles of Management  Unity of command. Every employee should receive orders from only one superior.  Unity of direction. Each group of organizational activities that have the same objective should be directed by one manager using one plan.
  35. 35. Fayol’s Principles of Management  Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole.
  36. 36. Fayol’s Principles of Management  Remuneration. Workers must be paid a fair wage for their services.  Centralization. Centralization refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralization for each situation.
  37. 37. Fayol’s Principles of Management  Scalar chain ( Hierarchy )  The line of authority from top management to the lowest ranks represents the scalar chain.  Communications should follow this chain. However, if following the chain creates delays, cross- communications can be allowed if agreed by all parties and superiors are kept informed.
  38. 38. Fayol’s Principles of Management  Order. People and materials should be in the right place at the right time.  Equity. Managers should be kind and fair to their subordinates.  Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.
  39. 39. Fayol’s Principles of Management  Initiative. Employees should be allowed to originate and carry out plans.  Esprit de corps. Promoting team spirit will build harmony and unity within the organization
  40. 40. Max Weber (1864-1920)  The Weberian bureaucracy has its origin in the works by Max Weber (1864-1920),  He had contributed immensely to the study of bureaucracy and administrative literatures, during the mid 1800s and early 1900s.  He discussed intensely on subject-matters, such as, specialization of job-scope, merit system, uniform principles, structure and hierarchy. “ Bureaucratic administration means fundamentally domination through knowledge “.— Max Weber
  41. 41. 3 types of organisation  Leader Oriented  Tradition Oriented  Bureaucratic
  42. 42. Neo- Classical Approaches  Human relations movement  Behavioral approach
  43. 43. Human Relation Approach  The theme of Human Relations approach says that :- i) The Organizational Situation should be viewed in social terms as well as in economic and technical terms ii ) The Social process of group behavior can be understood in terms of clinical method analogous to the doctor’s diagnosis of human organism.
  44. 44. Father of Human Relation Approach Was Mr.Elton Mayo
  45. 45. Hawthorne Experiments  The Hawthorne experiments were groundbreaking studies in human relations that were conducted between 1924 and 1932 at Western Electric Company's Hawthorne Works in Chicago.  Originally designed as illumination studies to determine the relationship between lighting and productivity, the initial tests were sponsored by the National Research Council (NRC) of the National Academy of Sciences.  In 1927 a research team from the Harvard Business School was invited to join the studies after the illumination tests drew unanticipated results.
  46. 46. Hawthorne Experiments  Two additional series of tests, the relay-assembly tests and the bank-wiring tests, followed the illumination tests.  The studies assumed the label Hawthorne experiments or studies from the location of the Western Electric plant. Concluded by 1932, the Hawthorne studies, with emphasis on a new interpretation of group behavior, were the basis for the school of human relations.
  47. 47. Hawthorne Experiments  Phase 1 :- Illumination Experiment  Phase 2 :- Relay Assembly Test Group  Phase 3 :- Interviewing Programme  Phase 4 :- The Bank Wiring observation room experiment
  48. 48. Illumination Experiment  In the early 1920s Chicago's Western Electric Hawthorne Works employed 12,000 workers. The plant was a primary manufacturer of telephones, and in 1924 the company provided a site to cooperate with the NRC on a series of test room studies to determine the relationship between illumination and worker efficiency.
  49. 49. Illumination Experiment  The basic idea was to vary and record levels illumination in a test room with the expectation that as lighting was increased, productivity would too. In another test room, illumination was decreased, with the correlating expectation that efficiency would decrease.
  50. 50. Illumination Experiment  The electric power industry provided an additional force for these tests, hoping to encourage industries to use artificial lighting in place of natural light.  The Illuminating Engineering Society's Committee on Research also supported the tests and cooperated with the NRC. From the fall of 1924 to the spring of 1927, three series of tests were conducted and carefully monitored.
  51. 51. Illumination Experiment  Three departments at the Hawthorne plant were involved—relay assembling, coil winding, and inspection. Workers were notified of the tests in order to attempt to control interference from human factors.  When production increased in each test period, researchers looked to other factors such as increased supervision and a sense of competition that developed between the test and control groups.
  52. 52. Illumination Experiment  NRC representatives and the engineers involved drew several conclusions.  First, illumination was one factor in output but not the most important. More important to the tests was the realization there was not a simple answer to the issue of illumination and worker productivity and that other factors that were not controlled presented a problem with the test results—the issue of human factors. In retrospect, researchers from the NRC and the Illuminating Engineering Society (which together formed the Committee on Industrial Lighting) stated they were not surprised by the test results. They even predicted that other factors would affect the results, but their mandate was to isolate other variables, and the Hawthorne studies continued. Read more: Hawthorne Experiments Experiments.html#ixzz1VAvIc6BU
  53. 53. The Interview Process  Under Mayo and Roethlisberger’s direction, the Hawthorne experiments began to incorporate extensive interviewing.  The researchers hoped to glean details (such as home life or relationship with a spouse or parent) that might play a role in employees’ attitudes towards work and interactions with supervisors.  From 1928 to 1930 Mayo and Roethlisberger oversaw the process of conducting more than 21,000 interviews and worked closely training researchers in interviewing practices.  “The interview is now defined as a conversation in which the employee is encouraged to express himself freely upon any topic of his own choice.” Source :-
  54. 54. RELAY-ASSEMBLY TESTS  A small group of workers were placed in a separate room and a number of variables were altered –like wages were increased ,rest periods of varying lengths were introduced ,the workday and the work week were shortened .  The supervisors ,who acted as observers ,also allowed the groups to choose their own rest periods and members of their own groups and to involve in decision making regarding suggested changes .  Performance tended to increase over the period but it also increased and decreased erratically.
  55. 55. RELAY-ASSEMBLY TESTS  In order to observe the impact of these other factors, a second set of tests was begun before the completion of the illumination studies on April 25, 1987.  The relay-assembly tests were designed to evaluate the effect rest periods and hours of work would have on efficiency.  Researchers hoped to answer a series of questions concerning why output declined in the afternoon: Did the operators tire out? Did they need brief rest periods? What was the impact of changes in equipment? What were the effects of a shorter work day? What role did worker attitudes play?
  56. 56. RELAY-ASSEMBLY TESTS  Hawthorne engineers led by George Pennock were the primary researchers for the relay-assembly tests, originally intended to take place for only a few months.
  57. 57. RELAY-ASSEMBLY TESTS  Six women operators volunteered for the study and two more joined the test group in January 1928. They were administered physical examinations before the studies began and then every six weeks in order to evaluate the effects of changes in working conditions on their health.
  58. 58. RELAY-ASSEMBLY TESTS  The women were isolated in a separate room to assure accuracy in measuring output and quality, as temperature, humidity, and other factors were adjusted.  The test subjects constituted a piece-work payment group and efforts were made to maintain steady work patterns.
  59. 59. RELAY-ASSEMBLY TESTS  The Hawthorne researchers attempted to gain the women's confidence and to build a sense of pride in their participation.  An observer was introduced into the test room to keep accurate records, maintain cordial working conditions, and provide some degree of supervision.  Researchers tentatively concluded that performance and efficiency improved because of the rest periods, relief from monotonous working conditions, the wage incentive, and the type of supervision provided in the test environment
  60. 60. BANK-WIRING TESTS  Final stage of the studies was the bank-wiring tests, which began in November 1931.  The foreman of the bank-wiring department resisted the intrusion of observers into his work space and a bank-wiring test room was set up.  The test room housed nine wirers, three soldiers, and two inspectors. All were male between the ages of 20 and 25. Their job was to wire conductor banks, a repetitive and monotonous task.
  61. 61. BANK-WIRING TESTS  The banks were one of the major components of automatic telephone exchange. Between 3,000 and 6,000 terminals had to be wired for a set of banks.  The work was tiring and required the workers to stand for long periods of time.  Pay incentives and productivity measures were removed, but a researcher was placed into the test room as an observer and the workers were interviewed.  The purpose of the bank-wiring tests was to observe and study social relationships and social structures within a group, issues raised by two other significant members of the research team, W. Lloyd Warner and William J. Dickson.  Experiments.html
  62. 62. Neo- Classical Approaches  Behavioral approach
  63. 63. Behavioral Approach, Management Theory  Like the other approaches to management, the behavioral approach has evolved gradually over many years.  Advocates of the behavioral approach to management point out that people deserve to be the central focus of organized activity.  They believe that successful management depends largely on a manager’s ability to understand and work with people who have a variety of backgrounds, needs, perceptions, and aspirations.  The progress of this humanistic approach from the human relations movement to modern organizational behavior has greatly influenced management theory and practice.
  64. 64. Modern Approaches  Quantitative approach ,  System approach  Contingency approach
  65. 65. System approach  Systems approach to management developed after 1950. Many pioneers during as E.L Trist, AK Ria, F.E. Kast, and R.A Johnsm have made significant contributions to this approach.  The systems approach looks upon the management as a ‘System’ of as an organized whole make up of sub-systems integrated into a unity.
  66. 66. System approach  The attention should be given so overall effectiveness of the system rather than effectiveness of any sub-system in isolation.  It emphasizes the inter-relatedness and inter- dependence of all activities within an organization.  It is based on system analysis.  It attempts to identify the nature of relationships of various parts of the system.
  67. 67. System approach  A system is a set of inter-connected elements or component parts to achieve certain goals. An organisation is viewed by the modern authors as an op0en system. An organisation as a system has five basic parts:  Input,  Process,  Output,  Feedback and  Environment.
  68. 68. Contingency approach  Contingency approach advocates that managerial actions and organizational design must be appropriate to the given situation and a particular action is valid only under certain conditions.  There is no one best approach to management and it all depends on the situation.  Managerial action is contingent upon external environment. There is no one best approach for all situations.  Contingency theory attempts to analyze and understand these interrelationships with a view towards taking the specific managerial actions necessary to deal with the issue.  This approach is both analytical and situational, with the purpose of developing a practical answer to the question at hand.