UNITII: MANAGEMENT THOUGHTS

2.0 Objectives
2.1 Introduction
2.2 Early Management Thought
2.3 The Classical Approach
2.4 Modern Management Approaches
2.5 The Quantitative Approach of Management Thought
2.6 Systems Approach of Management Thought
2.7 Modern approaches to management
2.8 Other Responsibility of Management
2.9 Summary
2.10 Questions

2.0 OBJECTIVES
After studying this chapter you will be able to -
State the stages of evolution of management.
Explain scientific management by F.W. Taylor
Discuss the concept of administrative management by Henry Fayol.
Describe Hawthorne experiment and MBO process by Elten Mayo

2.1 Introduction
Management is studied in business academics since earlier times and it is
considered as an integral part to understand business operations. People have
been changing and redesigning organizations for centuries. Though the 20th
century is noticeable in history as an 'Era of scientific management', still it does
not indicate that management tactics were not used in yester years. Many studies
indicated that Management theory evolved with "scientific" and "bureaucratic"
management that used measurement, procedures and routines as the basis for
operations. Firms developed hierarchies to apply standardized rules to the place
of work and penalized labour for violating rules. With the "human relations"
movement, companies emphasized individual workers. Modern management
theories, including system theory, contingency theory and chaos theory, focus
on the whole organization, with employees as a key part of the system. The
evaluation of management can be categorized in to different parts:

o Pre-Scientific Management Era (before 1880),

o Classical management Era (1880-1930),
o Neo-classical Management Era (1930-1950),
o Modern Management era (1950-on word).

Classical Management includes Scientific Management School, Administration

Management School, and Bureaucracy Management. Neo- classical
Management includes Human relation school and Behavioural Management
School. Modern Management includes Social system school, Decision theory
school, Quantitative Management School, System Management School, and
Contingency Management School.
EVOLUTION OF MANAGEMENT

Fig1

Evolution of management thought Fig2

Fig2
Pre – Historical Organized Industrial

Recent

Period society Revolution Consolidation Development

Villages - church
Management Administrative

Military as a science

Forecasting

Authority Controlling
Responsibility
Problem

solving

PERT

Division of CPM

Work
1.Pre= Historical Period:-

Management is as old as man. Awareness of needs & satisfaction of needs is the part &
parcel of management. In the ancient time in the villages, head of the village plans for the
villages. There was a good labor planning. Villages wereisolated. The basic needs in the
villages were satisfied by the persons in the villages. Responsibilities were distributed among
the people to satisfy the basic needs.

2. Organized Society:- (Church & Military)

The next contribution to the development of organization & management was by Roman
church. 1500 years ago Chinese ruler advised government about management of human
institutions. The German public gives contribution towards management thoughts. During
this period management techniques were largely developed in administrative military & state
administration.

3. Industrial Revolution:-

This period is known as the period of scientific management. It is proved that management
is related with enterprise & business. In this period lots of technological changes took
place. With the industrial revolution the question of traditional management appears. The
traditional management concept was replaced by professional management.

4. Towards Consolidation:- This stage mark the beginning of the work of

investigation of principles of management i.e. division of work, authority,
responsibility, discipline, scalar chain. These ideas were developed by ‘Henry Fayol’.

5. Recent Development:- Recently management concepts are based on mathematical analysis.

They are based on linear programming, operational research, PERT (Programme Evaluation
and Review Technique), CPM (Critical Path Method). These techniques are useful in decision
making, controlling, problem solving etc. In today’s competitive world these techniques are essential
for controlling the cost that is why management is called as a separate profession.

2.2 Early Management Thought

The period of 1700 to 1800 emphasizes the industrial revolution and the factory system
highlights the industrial revolution and the importance of direction as a managerial purpose.
Thus, the development of management theory can be recognized as the way people have
struggled with relationships at particular times in olden periods. Many economic theorists
during this period described the notion of management. Adam Smith and James Watt have
been recognized as two theorists who launched the world toward industrialization. Adam
Smith brought about the revolution in financial thought and James Watt's steam engine
provided cheaper power that revolutionized English commerce and industry. Both provided
the base for modern concepts of business management theory and practice. Adam Smith
explicated the concept of division of labour and Jacques Turgot described the importance of
direction and control. Smith stated that market and competition should be the controllers of
economic activity and that tax policies were destructive. The specialization of labour was the
basis of Smith's market system. According to Smith, division of labour provided managers
with the maximum opportunity for improved output. In the period of 1771–1858, Robert
Owens studied for concern for the workers. He was repulsed by the working conditions and
poor treatment of the workers in the factories across Scotland. Owen became a reformer. He
reduced the use of child labour and used ethical influence rather than physical punishment in
his factories. He reproached his fellow factory owners for treating their equipment better than
they treated their workers.
In quantitative approach of early management thought, Charles Babbage (1792–1871) is
recognized as the supporter of operations research and management science. Babbage's
scientific innovations are mechanical calculator, a versatile computer, and a punch-card
machine. His projects never became a commercial reality. However, Babbage is considered
the creator of the concepts behind the present day computer. The most popular book of
Babbage, On the Economy of Machinery and Manufacturers, described the tools and
machinery used in English factories. It discussed the economic principles of manufacturing,
and analyzed the operations and the skills used and suggested improved practices. Babbage
considered in the benefits of division of labour and was a supporter of profit sharing. He
developed a method of observing manufacturing that is the same approach utilized today by
operations analysts and consultants analysing manufacturing operations. Other theorists who
contributed in quantitative approach of early management thought were Robert Owen,
Andrew Ure and Charles Dupin, Henry Robinson Towne.
Another theorist Baptiste, explained the significance of planning. But management is
appeared as a different discipline in the second half of 19th century with the beginning of
Joint Stock Company. This type of enterprises separated management of business from their
ownership and gave emphasis to labour incompetence and improper systems of wage
payments. To resolve such problem, people began to identify management as a separate field
of study. During 20th century, Management has become more scientific discipline with
standard principles and practices.

2.3 The Classical Approach

The classical approach is the earliest thought of management .The classical approach was
associated with the ways to manage work and organizations more efficiently. The classical
approach are categorized into three groups namely, scientific management, administrative
management, and bureaucratic management.
I. Scientific Management: Scientific management which is also referred to Taylorism or the
Taylor system is a theory of management that evaluates and synthesizes workflows, with the
aim of improving labour productivity. In other words, conventional rules of thumb are
substituted by accurate procedures developed after careful study of an individual at work.
Universal approaches of Scientific management are developed for Efficiency of workers,
Standardization of job roles/activities and Discipline - the role of managers and the business
hierarchy. The scientific management theory had an enormous impact on the business
industry at the beginning of the 20th century. Many big and victorious organizations, such as
McDonalds hamburger chain or call centres, utilised a modern version of scientific
management. Among famous theorist, Taylor's contribution in the area of scientific
management is invaluable. The components of scientific management are determination of
the task, planning, proper selection and training of workers improvement in methods,
modification of organization and mental revolution such as 'job specialization'. As a result, it
became more concerned with physical things than towards the people even though increased
the output. Scientific Management focuses on worker and machine relationships.
Organizational productivity can be increased by enhancing the competence of production
processes. The competence viewpoint is concerned with creating job that economizes on
time, human energy, and other productive resources. Jobs are planned so that each worker has
a specified, well controlled task that can be performed as instructed. Principle of scientific
management are replacement of old rule of thumb method, scientific selecting and training,
labour management co-operation, maximizes output, equal division of responsibility. There
are four scientific management systems such as develop a science for each element of the job
to replace old rule of thumb method, Scientifically select employees and then train them to do
the job as described in step, supervise employees to make sure they follow the prescribed
method for performing their job and continue to plan the work but use worker to actually get
the work done.
Taylor's Scientific Management: Academic records indicated that F.W. Taylor and his
colleagues developed the first systematic study in management. He initiated an innovative
movement in 1910 which is identified as scientific management. Frederick Taylor is known
as the father of Scientific Management and he published Principals of Scientific Management
in which he proposed work methods designed to boost worker productivity. Taylor asserted
that to succeed in these principles, it is necessary to transform completely the part of
management and labour. His philosophy was based on some basic principles. The first
principle is separation of planning and doing. In the pre-Taylor era, an employee himself used
to choose or plan how he had to do his work and what machines and equipment would be
necessary to perform the work. But Taylor divided the two functions of planning and doing,
he stressed that planning should be delegated to specialists. Second principle of Taylor's
management approach is functional foremanship. Taylor launched functional foremanship for
administration and direction. Under eight-boss-scheme of functional foremanship, four
persons like route clerk, instruction card clerk, time and cost clerk and disciplinarian are
associated with planning function, and the remaining four speed boss, inspector, maintenance
foreman, and gang boss are concerned with operating function. Third principle is elements of
scientific management. The main constituents of scientific management are work study
involving work important and work measurement using method and time study,
standardization of tools and equipment for workmen and improving working conditions,
scientific Selection, placement and training of workers by a centralized personal department.
Fourth principle is bilateral mental revolution. Scientific management involves a complete
mental change of employees towards their work, toward their fellow-men and toward their
employers. Mental revolution is also necessary on the part of management's side, the
foreman, the superintendent, the owners and board of directions. Fifth principle is financial
incentives. In order to encourage workers to give better performance, Taylor introduced
differential piece-rate system. According to Taylor, the wage should be based on individual
performance and on the position which a worker occupies. Economy is other principle of
management devised by Taylor. According to him, maximum output is achieved through
division of labour and specialization. Scientific Management concentrates on technical
aspects as well as on profit and economy. For this purpose, techniques of cost estimates and
control should be adopted. Taylor concluded that science, not rule of thumb, Harmony, not
discord, Cooperation and not individualism, Maximum output, in place of restricted output.
Mechanism:-

1. Separation of Planning & Doing:-

Before Taylor’s scientific management a worker used to plan about his work &
instruments necessary for that. Supervisors’ job was to see how the workers
were performing. This creates a lot of problems. So Taylor has separated
planning & doing authority.

2. Functional Foremanship:-

Separation of planning from doing resulted into development of supervision

system. In this system 8 persons were engaged, out of that 4 persons were
engaged in planning department. They are time & cost clerk, routine clerk,
instruction card clerk & disciplinarian. In production process 4 personnel were
engaged, they are speed boss, repair boss, supervisor & gang boss.

3. Job Analysis:-

It is related with finding out best way of doing. It means that least movements in
doing job. It will lead to complete production in less time & lesser cost. It
includes:-

A) Time Study:-
It means determining time required to complete a job in a particular time. The
movement which takes minimum time is the best one.

B) Motion study:-
It means study of movement while performing a job i.e. elimination of wasteful
movement in performing a job, only necessary movements are engaged.

C) Fatigue Study:-
It shows the amount & frequency of rest required, while completing the work. After certain
period of time workers feel fatigue & can’t work with full capacity.
Therefore they require rest in between. When rest is allowed they start working
with full capacity.

D) Standardization:-
As far as possible standardization should be maintained in respect of
instruments & tools, period of work, amount of work, working conditions, cost of
production etc. these all things are fixed in advance on the basis of job analysis.

E) Scientific Selection & Training of Workers:-

Taylor has been suggested that worker should be selected on scientific basis
taking into account their education, work experience, attitude & physical
strength.
F) Financial Incentives:-
Financial incentives help to motivate workers in maximum efforts. Higher wages
lead to increase in efforts. He applied differential piece rate system. According to
him workers have to complete the work within specified time and then only he
will get wages at higher rate per piece & one does not complete a job gets a
lower rate. Wages should be based on individual performance & not on the
position occupied.

G) Economy:-

Techniques of cost estimated & control should be adopted. Waste should be

controlled properly. Profit will be achieved with elimination of wastage. He
explained how resources are wasted.

H) Mental Revolution:-

Scientific management depends upon mutual co-operation between workers &

management. Taylor say’s great revolution takes place in the mental attitude of
two parties under scientific management. He has given systematic design of
work. Labour management, co-operation required a complete mental change on
the part of both parties. The workers have specific duties towards management
& vice-a-versa. The method of scientific investigation & knowledge should be
accepted by both parties.

Criticisms:-
In the beginning Taylor’s scientific management was considered as something
very unique. But after some time it was subjected to several criticism.

1) Taylor’s scientific management was related to production management. It takes

practical view of management & focuses attention only on the production
management. Taylor’s study of management has become the study of lower
level management. He stressed on efficiency on lower level. He has neglected
marketing, financial and decision making aspects completely.

2) Scientific management is applicable to large scale organization. It involves high

expenditure. It is a luxury for small scale organization. It involves research,
experiment & analysis. It is difficult for small scale organization.

3) It was also argued that devices of work analysis, time study & motion & fatigue
study can’t be applied in the practical life.

4) The idea of best way of doing a job was also criticized. Everyone has his own
natural style of work & he can give best only if he is allowed to work in his style.
The maximum efficiency will be attained by the group & not by individual worker.

5) Wages of workers are not increased in a direct proportion of productivity. It leads

to exploitation to workers.

6) People are not ready to use the word ‘scientific’. The scientific does not have
any significance. Management is a social science and not an exact science.

(ii) Administrative Management: Administrative Management emphasizes the manager and

the functions of management. The main objective of Administrative management is to
describe the management process and philosophy of management. In contradiction of
scientific management, which deals mainly with jobs and work at individual level of scrutiny,
administrative management gives a more universal theory of management.
Henry Fayol's Administrative Management (1841–1925): Henri fayol is known as the
father of modern Management. He was popular industrialist and victorious manager. Fayol
considered that good management practice falls into certain patterns that can be recognized
and analysed. From this basic perspective, he devised a blueprint for a consistent policy of
managers one that retains much of its force to this day. Fayol provided a broad analytical
framework of the process of management. He used the word Administration for Management.
Foyal categorized activities of business enterprise into six groups such as Technical,
Financial, Accounting, Security, and Administrative or Managerial. He stressed constantly
that these managerial functions are the same at every level of an organization and is common
to all firms. He wrote General and Industrial Management. His five function of managers
were plan, organize, command, co-ordinate, and control. Principal of administrative
management: 1.Division of labour, 2.Authority & responsibility, 3.Discipline, 4.Unity of
command, 5.Unity of direction, 6.Subordination of individual interests to general interest,
7.Remuneration of personnel, 8.Centralization, 9.Scalar chain, 10.Order, 11.Equity,
12.Stability of tenure, 13.Initiative and14 .Esprit de corps (union of strength). These 14
principles of management serve as general guidelines to the management process and
management practice. His principles of management are described below.

1. Division of work: This is the principle of specialization which is detailed by

economists as an important to efficiency in the utilization of labour. Fayol goes
beyond shop labour to apply the principle to all kinds of work, managerial as well as
technical.
2. Authority and responsibility: In this principle, Fayol discovers authority and
responsibility to be linked with the letter, the consequence of the former and arising
from the latter.
3. Discipline: This discipline denotes "respect for agreements which are directed at
achieving obedience, application, energy and the outward marks of respect". Fayol
declares that discipline requires good superiors at all levels, clear and fair agreement,
and judicious application of penalties.
4. Unity of command: This is the principle that an employee should receive orders from
one superior only.
5. Unity of direction: Fayol asserted that unity of direction is the principle that each
group of activities having the same objective must have one head and one plan. As
distinguished from the principle of unity of command, Fayol observes unity of
direction as related to the functioning of personnel.
6. Subordination of individual interest to general interest: In any group the interest of the
group should supersede that of the individual. When these are found to differ, it is the
function of management to reconcile them.
7. Remuneration of personnel: Fayol recognizes that salary and methods of payment
should be fair and give the utmost satisfaction to worker and boss.
 8. Centralization: Fayol principle of centralization refers to the extent to which authority
is concentrated or dispersed in an enterprise. Individual circumstances will determine
the degree of centralization that will give the best overall yield.
9. Scalar chair: Fayol believe of the scalar chair as a line of authority, a 'Chain of
Superiors" from the highest to the lowest ranks and held that, while it is an error of
subordinate to depart 'needlessly' from lines of authority, the chain should be short-
circuited when scrupulous following of it would be detrimental.
10. Order: Breaking this principle into 'Material order' and 'Social Order', Fayol thinks of
it as the simple edge of "a place for everything (everyone), and everything (everyone)
in its (his) place". This is basically a principle of organization in the arrangement of
things and persons.
11. Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from
personnel by a combination of kindliness and justice in managers dealing with
subordinates.
12. Stability of tenure of personnel: Finding that such instability is both the cause and
effect of bad management, Fayol indicated the dangers and costs of unnecessary
turnover.
13. Initiative: Initiative is envisaged as the thinking out and execution of a plan. Since it is
one of the "Keenest satisfactions for an intelligent man to experience", Fayol exhorts
managers to "Sacrifice Personal Vanity" in order to permit subordinates to exercise it.
14. Esprit de corps: This is the principle that 'union is strength' an extension of the
principle of unity of command. Fayol here emphasizes the need for teamwork and the
importance of communication in obtaining it.

2.3 Bureaucratic Management:

Bureaucratic management denotes to the perfect type of organization. Principal of

Bureaucracy include clearly defined and specialized functions, use of legal authority,
hierarchical form, written rules and procedures, technically trained bureaucrats, appointment
to positions based on technical expertise, promotions based on competence and clearly
defined career paths. The German sociologist, Max Weber recognized as father of modern
Sociology who appraised bureaucracy as the most logical and structure for big organization.
With his observation in business world, Weber summarized that earlier business firms were
unproductively managed, with decisions based on personal relationships and faithfulness. He
proposed that a form of organization, called a bureaucracy, characterized by division of
labour, hierarchy, formalized rules, impersonality, and the selection and promotion of
employees based on ability, would lead to more well-organized management. Weber also
argued that authoritative position of managers in an organization should be based not on
tradition or personality but on the position held by managers in the organizational hierarchy.
Max Weber (1864-1920) devised a theory of bureaucratic management that emphasized the
need for a firmly defined hierarchy governed by clearly defined regulations and lines of
authority. He considered the perfect organization to be a bureaucracy whose activities and
objectives were reasonably thought out and whose divisions of labour were clearly defined.
Weber also believed that technical capability should be emphasized and that performance
evaluations should be made completely on the basis of merit. Presently, it is considered that
bureaucracies are huge, impersonal organizations that put impersonal competence ahead of
human needs. Like the scientific management theorists, Weber sought to advance the
performance of socially important organizations by making their operations predictable and
productive. Although we now value innovation and flexibility as much as efficiency and
predictability, Weber's model of bureaucratic management evidently advanced the
development of vast corporations such as Ford. Bureaucracy was a particular pattern of
relationships for which Weber saw great promise. Although bureaucracy has been successful
for many companies, in the competitive global market of the 1990s organizations such as
General Electric and Xerox have adopted bureaucracy, throwing away the organization chart
and replacing it with ever-changing constellations of teams, projects, and alliances with the
goal of unleashing employee creativeness.
Chester I. Barnard: Chester Barnard (1886-1961) also devised components to classical theory
such as Follett that would be further developed in later schools. Barnard, who became
president of New Jersey Bell in 1927, used his work experience and his wide reading in
sociology and philosophy to devise theories about organizations. Barnard stated that people
join in formal organizations to accomplish such goals that cannot be fulfilled by working
alone. But as they follow the organization's goals, they must also gratify their individual
needs. Barnard came to conclusion that an enterprise can operate efficiently and survive only
when the organization's goals are kept in balance with the aims and needs of the individuals
working for it. Barnard denotes a principle by which people can work in stable and mutually
constructive relationships over time. Barnard believed that individual and organizations
purposes must be in balance if managers understood an employee's zone of indifference that
is, what the employee would do without questioning the manager's authority. Apparently, the
more activities that fell within an employee's zone of indifference the smoother and more
cooperative an organization would be. Barnard also believed that managers had a duty to
inspire a sense of moral purpose in their employees. To do this, they would have to learn to
think beyond their narrow self-interest and make an ethical promise to society. Although
Barnard emphasized the work of administrative managers, he also focused substantial
attention on the role of the individual employee as the basic strategic factor in organization.

2.4 Modern Management Approaches

Behavioral Approach: Numerous theorists developed the behavioural approach of
management thought as they observed weaknesses in the assumptions of the classical
approach. The classical approach emphasized efficiency, process, and principles. Some
management scholars considered that this thought ignored important aspects of organizational
life, particularly as it related to human behavior. Therefore the behavioral approach
concentrated on the understanding of the factors that affect human behavior at work. This is
an improved and more matured description of human relations approach. The various
theorists who have great contribution in developing principles of management in this are
Douglas Mc Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert.
Behavioural Scientists hold the classical approach as highly mechanistic, which finds to
degrade the human spirit. They choose more flexible organization structures and jobs built
around the capabilities and talent of average employees. The behavioural approach has based
the numerous principles.

1. Decision-making is done in a sub-optimal manner, because of practical and situational

constraints on human rationality of decision-making. The behaviourists attach great
weight age on participative and group decision-making.
2. Behavioural Scientists promote self-direction and control instead of imposed control.
3. Behavioural Scientists believe the organization as a group of individuals with certain
goals.
 4. Behavioural scientists perceive that the democratic-participative styles of leadership
are enviable, the autocratic, task oriented styles may also be appropriate in certain
situation.
5. Behavioural scientists propose that different people react differently to the same
situation. No two people are exactly similar and manager should tailor his attempts to
influence his people according to their needs.
6. Behavioural scientists identify that organizational variance and change are
predictable.

CONTRIBUTION OF ELTEN MAYO

(1880-1949) (HAWTHORNE EXPERIMENTS)

Elten Mayo can be called as the Founder of Human relations school. Mayo
conducted experiments at the Department of Industrial research of Harward.
Mayo was of the opinion that an individual is not very important, his personality
is important as a member of the group.
The human relations movement was evolved during 1920’s in the U.S.A. Elten
Mayo (1880-1949) laid the foundations for the human relations approach.
Hawthorne experiments was conducted from 1924 to 1932 at a plant of Western
Electric Company, Chicago was manufacturing Telephone System Bell. It employed
30,000 employees at the time of experiment. The experiment was conducted in 4
phases.

I] Illumination Experiment :- (Physical, conducting, lighting effect)

It was undertaken to find out how change in the level of light & physical factor
affects production. Higher illumination will help in increasing the production;
decrease in illumination will lead to decrease in production.

II] Relay Assembly Test Room:-

Under this study, two small groups of six female telephone relay assemblers
were put in separate rooms under close observation and control. Frequent
changes were made in working conditions such as working hours, rest periods,
hot lunch etc. Over the two years period, it was concluded that social or human
relationship among workers exercised greater influence on productivity of
workers than working conditions. This special attention and treatment given to
workers developed a sense of group pride and belongingness which motivated
them to increase their performance.

III] Mass Interview Program:-

During the course of experiment about 20,000 interviews were conducted from
1928 to 1930. For determination of employee’s attitude towards company such
as supervision, insurance plan, promotion, wages etc. & yes & no type of
questions were asked. During the course of interview it was discovered that
workers behaviour was influenced by group behavior.
 The programme indicated that productivity can be increased if people allowed
talking freely.

IV] Bank wiring observation room:-

This experiment was carried from 1931 to 1932 with a view to analysis
functioning of small group & its impact on individual behavior. The group was
formed consisting of 14 male members, 9 wire men & two inspectors. Hourly
wage rate was based on average output of each worker & bonus was based on
the productivity of group of workers.

It was found that the group has established its own standards of output and
social pressure was exercised.

The main conclusions of Hawthorne Experiments are as follows :

1) Social factor in output:- Worker is influenced by social factor & the behavior within the
group. Man is a social animal. Only monetary incentives are not sufficient to increase the
production but non-monetary incentives will also help to increase the production.
Means, behavior within the group will definitely increase the production. This
acts as a motivating factor.

2) Group Influence:- Worker forms a group in the organization means, they develop
informal relationship. They try to change their behavior & manager is considered as a
part & parcel for that group & not as a manager.

3) Leadership:- Leadership is important for directing group behavior. But the formal
relationship is not accepted by the workers. Informal relationship which is express in relay
assembly test room & bank wiring observation room is lead to increase the efficiency of the
workers.
4) Supervision:- Supervision is important for determining efficiency of output but
friendly supervision helps to increase the productivity of the workers in the organization.
5) Communication:- In every organization communication is very important. Workers
participation in the process of decision making helps in increasing the productivity. Workers
must communicate freely with managers to explain their problem. Better understanding
between manager & workers develops positive attitude.
Criticism:- 1). It is based on social relationship.
2) Human behavior at work place.
3) With many people of the organization. They believe that happy
workers are productive workers. This is not always true.
4) With the passage of time both managers & workers begin to realize
disadvantage of the situation.
5) When decisions are made secretly is important which is not possible in the
Hawthorne experiment.
However, human relationship approach should not be totally neglected. Human
Psychology is basically sound & should be properly understood to talk freely.
Approach of Mary parker Follett: Mary Parker Follett (1868-1933) developed
classic structure of the classical school. However, she initiated many new elements
particularly in the area of human relations and organizational structure. In this, she introduced
trends that would be further developed by the talented behavioural and management science
schools. Follett was persuaded that no one could become a whole person except as a member
of a group. Human beings grew through their relationships with others in organizations. In
fact, she explained management as "the art of getting things done through people." She took
for granted Taylor's statement that labour and management shared a common purpose as
members of the same organization, but she considered that the artificial difference between
managers and subordinates is vague in this natural partnership. She believed in the power of
the group, where individuals could combine their diverse talents into something bigger.
Moreover, Follett's "holistic" model of control took into account not just individuals and
groups, but the effects of such environmental factors as politics, economics, and biology.
Follett's model was significant precursor of the idea that management meant more than just
what was happening inside a particular organization.
Maslow's theory of self-actualization: His theory is recognized as Hierarchy of Needs. It is
illustrated in a pyramid and elucidates the different levels and importance of human's
psychological and physical needs. It can be used in business by managers to better understand
employee motivation. The general needs in Maslow's hierarchy include physiological needs
(food and clothing), safety needs (job security), social needs (friendship), self-esteem, and
self-fulfilment or actualisation. Maslow's Hierarchy of Needs relates to organizational theory
and behaviour because it explores a worker's motivation. Some people are prepared to work
just for money, because of friends, or the fact that they are respected by others and
recognized for their good work. The final level of psychological development that can be
achieved when all basic and mental needs are fulfilled and the "actualization" of the full
personal potential takes place. In the organizational situation, if an employee's lower need on
the hierarchy is not met, then the higher ones are ignored. For example, if employees are
worried that they will be fired, and have no job security, they will be concerned about
friendship and respect.
Douglas McGregor theory of management suggested that there is need to motivate employees
through authoritative direction and employee self-control and he introduced the concept of
Theory X and Y. Theory X is a management theory focused more on classical management
theory and assumes that workforce need a high amount of supervision because they are
inherently lazy. It presupposes that managers need to motivate through coercion and
punishment. Theory Y is a management theory that assumes employees are determined, self-
motivated, exercise self-control, and generally enjoy mental and physical work duties. Theory
Y is in line with behavioural management theories. Theory X and Theory Y relates to
Maslow's hierarchy of needs in how human behaviour and motivation is the main priority in
the workplace in order to maximize output. Theory X: The theory that employees are
inherently lazy and irresponsible and will tend to avoid works unless closely supervised and
given incentives, contrasted with Theory Y. Theory Y: The theory that employees are capable
of being ambitious and self-motivated under suitable conditions, contrasted with Theory X.
An influential theorist in behaviour approach of management thought was Likert. His
principles based on four System such as supportive relationships between organizational
members, multiple overlapping structures, with groups consisting of superiors and their
subordinates, group problem solving by consensus within groups and overlapping
memberships between groups by members who serve as linking pins.
Human Relations Approach: The human rationalists which is also denotes to neo-
classicists, focused as human aspect of business. These theorists emphasize that organization
is a social system and the human factor is the most vital element within it.
There are numerous basic principles of the human relations approach that are mentioned
below:

1. Decentralization: The concept of hierarchy employed by classical management

theorists is replaced with the idea that individual workers and functional areas (i.e.,
departments) should be given greater autonomy and decision-making power. This
needs greater emphasis on lateral communication so that coordination of efforts and
resources can occur. This communication occurs via informal communication
channels rather than the formal, hierarchical ones.
2. Participatory Decision-Making: Decision-making is participatory in the sense that
those making decisions on a day-to-day basis include line workers not normally
considered to be "management." The greater sovereignty afforded individual
employees and the subsequent reduction in "height" and increase in span of control of
the organizational
3. structure requires that they have the knowledge and ability to make their own
decisions and the communication skill to coordinate their efforts with others without a
nearby supervisor.
4. Concern for Developing Self-Motivated Employees: The importance on a system of
decentralized and autonomous decision-making by members of the organization
necessitates that those members be extremely "self-motivated". Goal of managers in
such an organization is to design and implement organizational structures that reward
such self-motivation and autonomy. Another is to negotiate working relationships
with subordinates that foster effective communication in both directions.

Therefore, the human relations approach implies modifications in the structure of the
organization itself, in the nature of work, and in the association between manager and
assistant. Each of these changes depends upon assumptions about the individual, the
organization, and communication, just like any other theory of organizations. Elton Mayo and
others conducted experiments that was known as Hawthorne experiments and explored
informal groupings, informal relationships, patterns of communication, and patterns of
internal leadership. Elton Mayo is usually popular as father of Human Relations School. The
human relationists, advocates the several factors after conducting Hawthorne experiments
which are mentioned below.

1. Social system: The organization in general is a social system consists of numerous

interacting parts. The social system established individual roles and establishes norms
that may differ from those of formal organization.
2. Social environment: The social climate of the job affects the workers and is also
affected.
3. Informal organization: The informal organization does also exist within the frame
work of formal organization and it affects and is affected by the formal organization.
4. Group dynamics: At the place of work, the workers often do not act or react as
individuals but as members of group. The group plays an important role in
determining the attitudes and performance of individual workers.
5. Informal leader: There is an appearance of informal leadership as against formal
leadership and the informal leader sets and enforces group norms.
 6. Non-economic reward: Money is an encouraging element but not the only motivator
of human behaviour. Man is diversely motivated and socio psychological factors act
as important motivators.

Contingency Approach: This approach of management thought focuses on management

principles and concepts that have no general and universal application under all conditions.
Joan Woodward in the 1950s has contributed to develop this approach in management.
Contingency school states that management is situational and the study of management
recognize the important variables in the situation. It distinguishes that all the subsystem of the
environment are interconnected and interrelated. By studying their interrelationship, the
management can find resolution to specific situation. Theorists stated that there is not
effective way of doing things under all business conditions. Methods and techniques which
are extremely effective in one situation may not give the same results in another situation.
This approach proposes that the role of managers is to recognize best technique in particular
situation to accomplish business goals. Managers have to develop situational understanding
and practical selectivity. Contingency visions are applicable in developing organizational
structure, in deciding degree of decentralization, in motivation and leadership approach, in
establishing communication and control systems, in managing conflicts and in employee
development and training. The contingency approach is associated with applying
management principles and processes as dictated by the sole characteristics of each situation.
It depends on various situational factors, such as the external environment, technology,
organizational characteristics, characteristics of the manager, and characteristics of the
subordinates. Contingency theorists often implicitly or explicitly disapprove the classical
approach as it focuses on the universality of management principles.

2.5 The Quantitative Approach of Management Thought

The quantitative approach aimed at enhancing the process of decision making through the use
of quantitative techniques. It is evolved from the principles of scientific management.

1. Management Science (Operations Research): Management science which is also

known as operations research utilized mathematical and statistical approaches to
resolve management issues. It was developed during World War II as strategists
attempted to apply scientific knowledge and methods to the intricate troubles of war.
Industry started to apply management science after the war. The introduction of the
computer technology made many management science tools and concepts more
practical for industry
2. Production and Operations Management: This approach emphasizes the operation
and control of the production process that changes resources into manufactures goods
and services. This approach is emerged from scientific management but became a
specific area of management study after World War II. It uses many of the devices of
management science. Operations management underlines productivity and quality of
both manufacturing and service organizations. W. Edwards Deming exercised a great
influence in developing contemporary ideas to improve productivity and quality.
Major areas of study within operations management include capacity planning,
facilities location, facilities layout, materials requirement planning, scheduling,
purchasing and inventory control, quality control, computer integrated manufacturing,
just-in-time inventory systems, and flexible manufacturing systems.
2.6 Systems Approach of Management Thought
The systems approach deals with the thoroughly understanding the organization as an open
system that converts inputs into outputs. The systems approach has great impact on
management thought in the 1960s. During this period, thinking about managing practices
allowed managers to relate different specialties and parts of the company to one another, as
well as to external environmental factors. The system approach focuses on the organization as
a whole, its communication with the environment, and its need to achieve equilibrium.
System approach

To summarize, there are important theories of Management and each theory has distinct role
to knowledge of what managers do. Management is an interdisciplinary and global field that
has been developed in parts over the years. Numerous approaches to management theory
developed that include the universal process approach, the operational approach, the
behavioural approach, the systems approach, the contingency approach and others. F W
Taylor, Adam Smith, Henry Fayol, Elton Mayo and others have contributed to the
development of Management concept. The classical management approach had three major
categories that include scientific management, administrative theory and bureaucratic
management. Scientific management highlighted the scientific study of work methods to
improve worker efficiency. Bureaucratic management dealt with the characteristics of an
perfect organization which operates on a rational basis. Administrative theory explored
principles that could be used by managers to synchronise the internal activities of
organizations. The behavioral approach emerged mainly as an outcome of the Hawthorne
studies. Mary Parker Follet, Elton Mayo and his associates, Abraham Maslow, Douglas
McGregor and Chris Argyris were main players of this school.
2.7 Modern APPROACHES TO MANAGEMENT

Peter Drucker explained his theory on managerial problems. He has written the most
important book, ‘Practice of Management’ & another one is ‘The effective executive
Management’.

He has explained the responsibilities & practice by the management & his
thoughts are as follows:-
1) Nature of Management:- Peter Drucker is against bureaucratic management & he
emphasized the

Main object and skills of Managers. Effective management is lead towards innovation. It
includes development of new ideas with old one for betterment of organization. For that he
treated management as a profession & as a discipline. As a discipline management has its
own tools, skill & techniques for achievement of goals. He has also explained management as
a practice rather than science. Management is result oriented, with characteristic of
creativity and Innovation. He emphasized that manager should not have only technical skills
but conceptual skills also.
2. Management Function:- According to Peter Ducker : a) Management comes into
existence for specific purpose whether it is hospital, educational institute, transport, etc.
b) Making work productive & workers active
c) Managing social responsibility.
Apart from these functions management has to perform several functions such
as setting of objectives, decision making, motivation, etc. It covers 8 areas such
as innovation, productivity, physical resources, financial resources, profitability,
and managerial performance, attitude of management & public responsibility of
management.

3) Management by Objectives (M.B.O):-

He introduced this concept in 1955. It also means management by result. M.B.O. included
planning, setting, standard performance calculation (appraisal) & motivation. According to
him it is not only a technique but it is a philosophy of managing. Now-a-days this concept has
become more popular.

Management by objectives: (MBO)

Meaning:-

According to George “MBO is the process where superior & managers of an

organization jointly defines it’s common goals, each individual area of responsibility in the
term of results expected by him & use their measures as a guide for operating the unit &
assuming contribution of each of its members.”

It is new dynamic concept. It is different from traditional management concept. This

concept gives advantages of co-operation and was introduced by Peter Drucker. It is a
technique in the hands of management.

Process of M.B.O.:

The M.B.O approach is result oriented approach & based on the idea of
effective participation of all the members for achieving objectives. It includes following
steps:-

1) Defining Job:-

Every employee is asked to define his job with the necessary details. The
supervisor is also asked to do the same exercise independently. The job
specifies the responsibilities of the each personnel for attainment of goals. It is
finalized in the joint meeting of superior & sub-ordinates.

2) Setting Objectives:-

In this stage the objectives to be achieved are decided by all concern parties &
key results areas are also finalized. They are prepared on proper background for
further action & results are achieved by the staff. In this process long term &
short term objectives are finalized.

3) Developing Action Plan:-

Such action plan is based on objectives & useful for suitable follow up for
achieving objectives. The action plan gives clean direction to concern parties &
brings unity in the whole organization. Action plan is prepared jointly.

4) Conducting Periodical View:- Periodical view is useful for execution of action plan. Such
review suggests
actual performance of the plan. If there is any deviation remedial action can be
taken.
5) Performance Appraisal:- M.B.O. provides as a tool for performance appraisal to superiors.
It helps to improve the performance of staff in future. Appraisal need to be done with trust &
confidence.
6) Achieving the Objectives:- The important aspect of M.B.O. is to achieve the objectives
within the definite limits. These are achieved with participation of old. For this
understanding, communication & co-operation is required.

Fig Process of MBO

Advantages:-
1) Result Oriented Approach: - MBO is result oriented philosophy. MBO is highly
practical approach to management.
 2) Clarity of Goals: - MBO is goal setting method, in which the desired results are
identified in anticipation of performance. All problematic areas are highlighted.

3) High Morale of Employee: - Participation of superiors & clarity of goals help to

increase the moral of employees in the organization. There is two way communications.

4) Effective Planning: - M.B.O. program shares planning process. Planning process is

standardized toward action plan.

5) It Facilitate Control: - Since objectives are determined for achieving goals, better control
over the performance can be done. Each individual performance is calculated & it is
compared with standard one.

6) It facilitates Personal Leadership: - MBO helps individual manager to develop skills for
personal leadership in the area of planning, controlling & organizing.

Limitations of M.B.O.: -

1) It is time consuming process: -

M.B.O includes setting of objectives & responsibility with careful consideration for every
action. Therefore it is time consuming process.
2) It increases paper work: -
Written communication e.g. policy, manual, instruction cards, questionnaire &
reporting increases paper work.
3) It creates organizational problem: -
Participation of subordinate in setting objectives will create problem between superior &
subordinate.
4) Problem of goal setting: -
M.B.O can function successfully only when measurable objectives are jointly set & they are
agreed by all. Problems can be raise if objects are not set properly
with particular responsibility.

5)Conflicting objectives: - Sometime an individual’s goals may be conflicting with

others. In such a situation individual follows the path that is suitable for him. This tendency
may result in lack of co-ordination. In different departments objectives cannot be co- ordinate
together so the attainment becomes difficult.

6) Secret can’t be maintained: - As M.B.O involves participation of superior & sub-ordinate,

it is very difficult to maintain secrecy. Some important matters should be kept with top
level management, because sometimes it is dangerous for the organization when there is
leakage of information.

7) It is reward punishment approach: - M.B.O creates excess pressure on all executives.

It is based on reward punishment philosophy. It carries tension on the minds of manager.

2.8 Other Responsibility of Management

Social Responsibility and Managerial Ethics

Social Responsibility
Social responsibility denotes differentiating right from wrong and doing the right thing. It
means being a good corporate inhabitant. Social responsibility is management's obligation to
make choices and take actions that contributes to the well-being and interests of society as
well as the organization. The concept of CSR is a new phenomenon in the corporate world,
the theoretical structure reveals that this concept is developed since many decades. Windsor
stated that during 1920, some business leaders hold the idea of responsibility and
responsiveness practices (Windsor 2001). Experts describe that social responsibilities can be
defined as the obligation of management towards the society and others concerned. The issue
of social responsibility highlighted to public standing as a result of highly-publicized events
such as the fall down of Enron and the James Hardie asbestos scandal in Australia.Buy
These Notes in PDFFormat

Executives of organizations are more concerned to develop moral values in business

operations. Social responsibility can be explained as "the obligation of the firm to use its
resources in ways to benefit society, through committed participation as a member of society,
taking into account the society at large and improving the welfare of society at large
independent of direct gains of the company" (Weile et al., 2001). Many experts have shown
the significance of Social responsibility in boosting the performance of private sector firms.
Business professionals, government bureaucrats, and researchers are inclined to execute the
doctrine of corporate social responsibility in business operations. Basically, business scholars
and corporate senior executives sincerely work for organization to maximize revenue for
stakeholders. But scenario is changed in business culture today. Corporate must think for
public interest and behave in socially responsible manner. Lantos stated that social
responsibility approach consists of three components which include ethical, philanthropic and
strategic (2001). Companies strive to survive by the resourceful use of the factors of
production and other facilities of the culture. This process puts organizations in an
interdependent relation with the government, the community at large and the environment.
Such interdependence gives rise to a series of broader responsibilities to society in general
(Mullins, 2005). Mullins further demonstrates that the social responsibilities are both internal
and external to the organizations. Social responsibilities of companies towards their workers
extend beyond the terms and conditions of the contract to include justice in treatment,
democratic functioning of the organisation, training in new skills and technologies, effective
personnel and employment relations policies and practices, and provision of social and
leisure facilitates (Mullins, 2005).
Social responsibility approach has some dimension which includes human resources
management, health and working in safe environment, adjustment to changing situations and
smooth management of environmental impact and natural resources. Externally, this
approach considers local communities, business, collaborators, contractors and customers,
human rights and global environmental issues. Briefly, social responsibility has positive
affiliation with the social structure which is an essential factor in improving the economy of
country.
Many business experts assert that social standard influence greatly in decision making on
major issues for business. Palmer and Hartley argue that there is a major basis for business
organizations to behave in a socially responsible manner. Philosophically, organization
maintains moral values to serve consumer and other social institutions such as educational
and the religious institutions. Practically, organizations must consider society values, to
survive in competitive business world. Business organizations plan strategies for
manufacturing products and develop ethical standards according to customer's requirement
which is the most instantaneous, powerful and targeted stakeholder. It is a hot issue whether
the customer makes appropriate choice in purchasing the goods and services from a company.
Although the social responsibility is advantage for social and business organizational, but
scholars argue for and against business social responsibility. In an organization, the managers
must adopt strategies of social responsibility. Firms have a moral commitment to help society
to deal with its problems and to contribute for its welfare. It is the moral practice to do by the
business organizations. A measurement should be made of whether the organization is doing
such activities as producing goods and services that people need, creating jobs for society,
paying fair wages, and ensuring worker protection. Social responsibility to workers extends
beyond terms and conditions of the formal contract of employment and gives recognition to
the workers as a human being. People today have more expectations of the quality of working
life, include justice in treatment, opportunities for consultation and participation, training in
new skill and technologies, effective personal and industrial relations policies, and provision
of social and leisure facilities. Organization should be given due consideration to the design
of work organization and job satisfaction, make very reasonable effort to give security of
employment, and provide employment opportunities for marginal groups. Even successful
companies took initiative for creating moral cultures and system by involving individual
employees in corporate affairs. By providing or supporting some benefits to the workforce
can lead to good communities in the business organizations. Good communication in the
internal business leads to avoid miss understanding of each other.
To summarise, social responsibility is explained in management literature as the obligation
and commitment of managers to take necessary steps to guard and improve society's welfare
along with protecting their own interest.

Managerial Ethics

Ethics is the symbols of moral principles and values that direct the behaviour of a person or
group with respect to what is right or wrong. Ethics sets standards as to what is good or bad
in conduct and decision making. Ethics deals with inner values that are a part of business
culture and forms decisions concerning social responsibility with respect to the external
environment. A moral issue is present in a situation when the actions of a person or
organization may hurt or benefit others. Ethics can be more evidently understood when
compared with behaviours governed by laws and by free choice. The main purpose of
developing in organization is to enhance workplace behaviour ethics and ethics in leadership.
Ethics and ethical reasoning are essential quality of any business culture. Basically, ethics are
concerned with human action. It can be considered as philosophy, philosophical thinking
about morality, moral problems and moral judgements. Ethics can also be described as a
study of what is good or right for human beings, what goals people ought to pursue and what
actions they ought to perform.

Theorists have different outlook about ethics in organization

Utilitarian view define that ethical decision are made on the basis of their outcome. A
utilitarian approach to morality explains that no moral act or rule is intrinsically right or
wrong. Rather, the rightness or wrongness of an act or rule is solely a matter of the overall
non-moral good such as pleasure, happiness, health, knowledge, or satisfaction of individual
desire, produced in the consequences of doing that act or following that rule. In sum,
according to utilitarianism, morality is a matter of the non-moral good produced that results
from moral actions and rules, and moral duty is instrumental, not intrinsic. Morality is a
means to some other end, it is in no way an end in itself.
Right view respects and protects individual liberties and privilege. This theory of ethics
denotes that there are certain fundamental civil, political and economic rights that merit
protection or respect because they pertain to the dignity of the human person. Each person
has a basic right to be respected and treated as a free and equal rational person capable of
making his or her own decisions.
Theory of justice view reveals that managers impose and enforce rules fairly and impartially.
Central to this effort is an account of the circumstances of justice, inspired by David Hume,
and a fair choice situation for parties facing such circumstances, similar to some of Immanuel
Kant's views. Principles of justice are sought to guide the conduct of the parties.
Numerous factors affect Ethical Behaviour in company. There is stage of moral development
devised by Kohlberg. Stage one is pre-conventional, rule following. Stage two that is
Conventional, living up to expectations of others. Stage three referred to Principled,
following self-chosen path and respecting others. Another factor is individual characteristics
such as values, knowing right from wrong, ego strength, and the power of person's
convictions. Structural factors such as an organisation's structure affects people's ethical
behaviour. Organizational culture is made up of the values and norms shared by people
working for an organization. A strong culture will exert more influence than a weak one.
Issue intensity refers to how important an issue is. Ethics concern an individual's moral
judgements about right and wrong. Decisions taken within an organisation may be made by
individuals or groups and influenced by the culture of the company.
organizational factor that affect ethical and unethical behaviour( Robbins, 2005)

It has been demonstrated in studies that Ethics are process of analysing actions according to
moral principal of values.
It is shown in literature that principled behaviour and social responsibility can bring
considerable benefits to a business. If properly managed; these attributes may attract
customers to the firm's products, thereby boosting sales and profits, make workers want to
stay with the business, reduce labour income and therefore increase efficiency, attract more
employees to work for the business, reduce recruitment costs and facilitate the company to
get the most capable workforce and invite investors and keep the company's share price high,
thereby protecting the business from takeover.
2.8 Summary: Scientific Management focuses on works and machine relationship. It is
developed by F.Y. Taylor. He is known as the Father of Scientific Management.
Administrative Management emphasizes the Manager and the functions of
management. Henri Fayol (1841-1925) known as the Father of Modern Management.
Behavioral or human relations management emerged in 1920 and dealt with
the human aspects of organizations. Elton Mayo, known as Father of Hawthrone
Studies. The Hawthorne studies are significant because they demonstrated the
importance influence of human factor on worker productivity.
It includes psychology, sociology, Law and Journalism. Ducker’s contributions have made
tremendous impact on the management practices. He has developed solutions to number of
managerial problems.
2.9 QUESTIONS

1. What is Scientific Management? Explain the mechanisms of scientific

Management?

2. What are the basic principles of Administrative Management?

3. Explain the difference between Taylor and Fayol thoughts.

4. Describe Elton Mayo and his Hawthorne Experiment.

5. Explain process of MBO given by Peter Drucker