MANAGEMENT THEORIES

Major Approaches to
Management
D e v e lo p m e n t o f M a n a g e m e n t t h e o r ie s

P r e c la s s ic a l c o n tr ib u tio n s
( A d a m S m it h ,
T h e w e a lth o f N a tio n s , 1 7 7 6 )

T h e c la s s ic a l th e o r is ts

B e h a v io ra l S c h o o l
( H u m a n R e s o u r c e s A p p ro a c h )

Q u a lit a tiv e a p p ro a c h

R e c e n t y e a rs In te g r a tiv e a p p r o a c h

S c ie n t if ic M a n a g e m e n t
( F r e d e r ic T a y lo r )
( F r a n k a n d L ilia n G ilb e r t)
( H e n r y L G n a tt)

E a r ly a d v o c a t e s
( R o b e r t O w e n , H u g o M u n s te rb e r g ,
M a r y P a r k e r F o lle t t,
C h e s te r B a rn a r d )

O p e ra tio n s r e s e a rc h o r
M a n a g e m e n t S c ie n c e
C h a r le s 'T e x ' T h o r n t o n )
R o b e r t M c N a m a ra

P ro c e s s e s
( H a r o ld K o o n tz )

G e n e r a l a d m in is t r a tiv e th e o r ie s
( H e n r i F a y o l)
( M a x W e b e r)

H a w t h r o n e s tu d ie s
( E lt o n M a y o )

S y s te m s

H u m a n r e la t io n s m o v e m e n t
( D a le C a rn e g ie , A b r a h a m M a s lo w ,
D o u g la s M c G r e g o r)

C o n tin g e n c y

B e h a v io r a l s c ie n c e t h e o r is t
( F r e d F ie d le r , V ic to r V r o o m ,
E d w in L o c k e e tc )

Classical Theories
The classical approach to management (19001930) was the product of the first concentrated
effort to develop a body of management thought.
The
classical
approach
recommends
that
managers
continually
strive
to
increase
organizational efficiency in order to increase
production.
Can be classified in three main branches:
1. Scientific,
2. Administrative and
3.Bureaucratic Management

Scientific Management
Frederick W Taylor (1856-1915) is
commonly called the father of scientific
management because of the significance
of his contribution.
Frederick Taylor (mechanical engineer)
published
Principles
of
Scientific
Management (1911) one best way,
appropriate
selection
of
workers,
training, deployment and environment.

Taylors Principle
Develop a science for each element of an
individuals work to replace the old rule of thumb
method.
Scientifically select and then train, teach, and
develop the worker.
Heartily cooperate with the workers so as to ensure
that all work is done in accordance with the
principles of the science that has been developed.
Divide work and responsibility almost equality
between management and workers. Management
does all work for which it better suited than the
workers.

Contribution of Frank & Lillian

Gilbreth
Frank Gilbreth (1868-1924) and Lilian Gilbreth (1878-1972) were
also significant contributors to the scientific method. As a point of
interest, the Gilbreths focused on handicapped as well as normal
workers.
Like other contributors to the scientific method, they subscribed to
the idea of finding and using the best way to perform a job.
The primary investigative tools in the Gilbreths research were
motion study, which consist of reducing each job to the most basic
movements possible. Motion analysis is used today primarily to
establish job performance standards.
Frank and Lillian Gilbreth (used camera and micro-chronometer to
analyze the motions of brick laying; fatigue and motion studies).
They defined time and motion studies as the science of
eliminating wastefulness resulting from unnecessary, ill directed
and inefficient motion.

Henry L. Gantt (1861-1919)

Henry L Gantt (charts for planning and
monitoring, and the concept of group
incentives) Formed the basis of CPM, PERT
(project evaluation and review technique) and
Gantt Charts.
He focused on the importance of motivational
schemes by laying emphasis on rewards for
good work rather than penalties for poor work.
He advocated that provisions of rewards is
relatively more effective than threat of
penalties.

Scientific Management Era In

Perspective
The era was characterized by low
standard of living, labor intensive
working pattern, and financially
cheap environment.
Scientific management attempted to
raise the standard of living by way of
making workers more efficient and
productive and consequently adding
to their income.

General Administrative
Management
Grew out of need to find guidelines
for managing complex organizations
to prescribe the interventions in
Management.

Henry Fayol (1841-1925)

Henry Fayol (MD of a French Coal Company) described
management as the designated set of functions, and
unlike Taylor, concentrated on the managerial level.
Fayol was the first thinker to outline the desirable
qualities of a manager.
They are physical qualities, mental qualities, moral
qualities, proper education qualities, specialized
knowledge about some function and experiential
knowledge from past work.
Fayol described the practice of management as
something distinct from
Accounting, finance,
production and other typical business functions.

Fayols Principle of
Management

Division of Work.
Authority.
Discipline.
Unity of Command.
Unity of direction.
Subordination of individual interest to the general interest.
Remuneration.
Centralisation.
Scalar Chain.
Order.
Equity.
Stability of Tenure.
Initiative.
Espirit de corps.

Bureaucratic Management (18641924)

Max Weber (German Sociologist) described goal oriented
large organization as bureaucracy -- defined as an
administrative system which is deliberately designed for
accomplishment of large scale tasks through coordination
of individual efforts in a rule bound, fair and efficient
manner.
It is characterized by clear division of labor, well trained
personnel appointed on the basis of their competence,
hierarchy (clear career path), rules and regulations,
rational power (traditional / charismatic) and impersonal
relationships.
Although the term bureaucracy has been popularized for
referring to government organizations, it is being
practiced in virtually every large and formal organization

 Max Weber (1864-1924) was the first of

management theorists who developed a
theory of authority structures and
relations based on an ideal type of
organization he called a bureaucracy a
form of organization characterized by
division of labor, a clearly defined
hierarchy, detailed rules and regulations,
and impersonal relationships.

Webers ideal Bureaucracy

Division of labor
Authority / Hierarchy
Formal Selection
Formal rules and regulations
Impersonality
Career Orientation

Neoclassical Approach to Management

Behavioural School ( Human Relation Approach)

This school of thought emerged in 1920 in reaction to

the limitations of the classical theories that ignored the
human
aspects
in
organizations.
The
main
characteristics are:
1. Employees are social beings and hence could not
respond to purely rational rules, chain of authority and
economic incentives.
2. Employees bring their social needs along with them to
the organization; consequently, effective management
required a more human oriented approach.
3. Emphasis is required on the social needs, drives and
attitudes of individuals to motivate them to perform to
their true potential.

Major contributors to the approach

The proponents recognized the importance of

human factor in success of organizations. Four
individuals stand out:
1. Robert Owen: Scottish businessman, committed to
releasing the suffering of the working class; banned
child labor, regulated work hours and improved
working conditions; showing concern for labor
welfare was a profitable management initiative.
2. Hugo Munsterberg: Created the discipline of
industrial psychology; substantially contributed to
our current knowledge of selection technique,
training, job design and motivation.

Major Contribution Contd..

3. Mary Parker Follett: Propounded that no one could
become a whole person except as a member of a group.
Defined Management as the art of getting things
done. Her holistic model took into account not only
individuals and groups but also politics, economics and
biology. It was forerunner of the idea that management was
not internally focused and is affected by external
environment.
4. Chester Barnard: President of New Jersey Bell Telephone
Co. viewed organizations as social systems that require
nurturing. People come to join the organization to achieve
the objectives they can not accomplish alone. There
needs to be sync between the organization and individual
goals. Adjustments need to be made to attain equilibrium;
managers need to understand employees zone of
indifference.

Hawthorne Studies
The Hawthorne studies were a series of experiments
conducted at the Western Electric Company (USA) between
1927 and 1932 that provided new insights into individual
and group behavior (Griffin R W, 2006).
The research, originally sponsored by General Electric, was
conducted by Elton Mayo and his associates. The studies
focused on behavior in the workplace.
Elton Mayo established relationship between social
environment (redesign of job, changes in work day and
work week length, rest periods, individual versus group pay
etc) and work output through a series of experiments known
as Hawthorne Studies (Illumination experiment, Relay
assembly test room study, Bank wiring room study etc).

 He concluded that behavior and sentiments

were closely related, that group influences
significantly affected individual behavior,
group standards established individual worker
output and money was less a factor in
determining
output
than
were
group
standards, group sentiments and security.
These studies established that employees
were different from the machines and
would need to be treated differently and
deferentially.

HR Approach - Human Relations

Movement
Taking a clue from the Hawthorne Experiments several theorists
conducted research in the field of interpersonal and social
relations among the members of the organization.
The members had unshakable optimism about peoples capabilities
and strongly believed that a satisfied worker was more productive.
Three stalwarts of this group are:
1. Dale Carnegie : Believed that way to success was through
winning the cooperation of the people.
2. Abraham Maslow : Propounded the theory of need hierarchy
(physiological, safety, social, esteem, and self actualization;
lower level needs must be satisfied first).
3. Douglas McGregor: Best known for his two sets of assumptions
about human nature. (Theory X - motivated by external stimuli,
Theory Y inherently motivated; manager replacing the boss)

HR Approach - Behavioral Science

Theorists
A group of psychologists and sociologists (Fred Fiedler,
Victor Vroom, Richard Hackman etc), carefully attempted to
keep their personal beliefs out of their work and relied on
the scientific methods for the study of organizational
behavior.
They have made significant contributions to our current
understanding of leadership, employee motivation, job
design etc.
This approach came to be known as behavioral approach. It
is extended and improved version of human relations
movement. It is multidimensional and interdisciplinary the
application of knowledge drawn from behavioral sciences
(Psychology,
sociology,
anthropology,
etc)
to
the
management problems.

Outcome of Human Relations

Movement
1. Individuals desire to continuously associate with his
fellow workers significantly affects performance
2. Scientific management in its original form (Robotization
of the work force) not accepted. Social understanding
and social skills are equally important.
3. The working group informally determines the output
level (dependent upon fair days work) that an individual
worker would produce in a given timeframe.
4. Fair and transparent management
collaborative and cooperative atmosphere.

can

foster

5. Rather than just adding to the overall compensation

through production linked incentives, management needs
to improve the overall quality of life of the workers

The Quantitative Approach The Management

Science School (OR Procedures)
During the World War II, the British brought in the
concept of Operational Research.
Post
World
War
II,
management
included
applications of Statistics, Optimization Models,
Information Models and Computer, Simulations
Linear Programming etc.
They have been useful tools to decision making in
planning and control.
Use of such tools have added to the confidence
limits to the management planning and projections.
Important contributors were Robert McNamara
(Ford Motors) and Charles Tex Thornton.

 It involves applying statistics, optimisation

models, information models, computer
simulatins and other quantitative
techniques to management activities.
Linear Programming can be used to improve
resource allocation decisions.
Work Scheduling can be done using critical
path scheduling analysis.
The EOQ model helps determining optimum
inventory levels.

Total Quality Management

(TQM)
A quality revolution swept through
both the business & public sectors in
the 1980s and 1990s.
It was inspired by small group of
quality experts, the most famous
being W. Edwards Deming and Joseph
M. Juran.
It was enthusiastically embraced by
Japanese organisations.

Focus of TQM Philosophy

Intense focus on customer.

Concern for continual improvement.
Process Focused.
Improvement in the quality of
everything the organisation does.
Accurate Measurement.
Empowerment of Employees.

Recent Years Towards

Integration
Theories are powerful influences. The longer we
use a given theory, the more comfortable we
become with it and more we tend not to seek out
newer pastures unless forced.
The days were changing fast and regular efforts
were made to synthesize to customize
requirements. This explains why modern
management theory is really a rich mosaic of many
theories that have endured over the past century.
Concern with developing a unifying framework of
management began in right earnest in early 60s.

Recent Years:1.Process or Operational

approach
Harold Koontz in his article management theory
jungle advocated that each approach had
something to offer to the management theory
and the actual practice should synthesize various
view points.
The approach recognizes that there is a
central
core
of
knowledge
about
management that is pertinent only to the
field of management.
The process approach, originally introduced by
Fayol, is based on the management functions.
The performance of these functions planning,
organizing, controlling and leading should be
seen as a seamless activity of management.

The interactive nature of Management proces

Planning
Use logic &
methods to think through
goals & actions

Organizing

Controlling

Allocate work,
authority & resources
to achieve organizational
goals

Make sure the

organization is moving
towards its objectives

Leading
Direct, influence & motivate
employees to perform
essential tasks

Recent Years 2:Systems

Approach

System Theory is a basic theory in the physical sciences but had never
been applied to organized human efforts.
In 1938, Chester Bernard, a telephone company executive, first write in
his book, The Functions of an Executive, that an organisation functioned
as a cooperative system.
A system is a interrelated and interdependent parts arranged in a
manner that produces a unified whole.
Closed syetems are not influenced by and donot interact with the
environment, whereas the open system is influenced by and interact with
the environment.
An organized enterprise does not exist in vacuum and is
dependent on external environment. Open systems recognize that
no organization is self contained; they would sink if they ignore external
environment, goal inputs of claimants (supplier relation, govt
regulations).
The job of the manager is to ensure that all parts of the organization are
internally coordinated. In addition open system recognizes that
organizations are not self contained and can not survive if they ignore
external environment.

External (micro) customers, suppliers, creditors, distributors dealers; though outside the
Influence of the 0organization, can be influenced by them

Global

Ecosystem

Global
External (macrobeyond influence of the org)
Competition
Labor

Money

Economic

Business
organization
Socio Cultural

Materials
Equipments
Internal
Demographic

Technological

Political /
Legal

Global

Constituents of Business Environment

Recent Years: 3.Contingency Approach

(Situational Approach)
Early management contributors gave us
principles of management and organization that
they generally assumed to be universally
acceptable.
Later
research
have
found
exceptions.
Management, like life itself, is not based
on
simplistic
principles.
Contingency
approach is a product of the integration of
various management theories modulated by
the situational variables. Since organizations
are diverse, one size does not fit all.
A contingency approach to management is
intuitively logical.

Contingency Variables
Four important variables are:
Organization size: As size increases, so do the problems
of coordination.
Routine-ness of Task Technology: Routine technologies
require organisational structures, leadreship styles and
control systems that differ from those required by
customised or non-routine technologies.
Environmental Uncertainty: The degree of uncertainity
caused by environmental changes influences the
management process.
Individual differences: Individuals differ in terms of their
desire for growth, autonomy, tolerance of ambiguity and
expectations.

Current Issues:

Workforce Diversity
Ethics
Stimulating Innovation and change
Total Quality Management
Re-engineering
Empowerment and teams
Bimodal Workforce
Downsizing
Contingent Workers

Conclusion
In view of the discussions so far,
management has started to become
less based on the conceptualization of
classical theory of management and the
typical military command and control,
and more on facilitation and support of
collaborative activity.
Now management deals with the
complexities of human interaction to
achieve organizational or group goals in
an effective and efficient manner.