Development of management thought - Prof. Smita.Verma

DEVELOPMENT OF MANAGEMENT THOUGHT
Prof. SMITA.VERMA

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

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

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 .

Early Classical Approach
1. Scientific management
2. Administrative management
3. Bureaucracy .

Scientific Management
The forerunners of scientific management theory
are :-
Robert Owen Charles Babbage F.W.Taylor Henry Gnatt

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

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

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

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 .”

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.

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.

 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

 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 ).

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

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.

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

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.

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

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

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.

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 .

Standardization
 Taylor advocated the standardization of tools ,
instruments ,working hours ,working conditions
,quality of work , cost of production etc .

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

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.

 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 .

 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

 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

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 .

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

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..

 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.

 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.

 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.

 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.

 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.

 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.

 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

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

3 types of organisation
 Leader Oriented
 Tradition Oriented
 Bureaucratic

Neo- Classical Approaches
 Human relations movement
 Behavioral approach

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.

Father of Human Relation Approach Was Mr.Elton Mayo

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.

 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.

 Phase 1 :- Illumination Experiment
 Phase 2 :- Relay Assembly Test Group
 Phase 3 :- Interviewing Programme
 Phase 4 :- The Bank Wiring observation room
experiment

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.

 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.

 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.

 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.

 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
http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Hawthorne-
Experiments.html#ixzz1VAvIc6BU

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 :- http://www.library.hbs.edu/hc/hawthorne/07.html

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.

 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?

 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.

 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.

 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.

 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

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.

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.
 http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Hawthorne-
Experiments.html

Neo- Classical Approaches
 Behavioral approach

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.

Modern Approaches
 Quantitative approach ,
 System approach
 Contingency approach

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.

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.

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.

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.

Development of management thought - Prof. Smita.Verma

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Development of management thought - Prof. Smita.Verma