Ch-1,Schools of Thought in Management

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Schools of Thought in

Management



W y now e ge o t e evo ut on o

management theories is important to

managers• Contributions in management came from

intellectuals with widely different

backgrounds, so no unified theory of

management

• So over a period of time, various approaches

for managerial analysis have been developed

• These approaches are widely known asapproaches/patterns/schools of management

thought



3

Time Line of Management Thought



Classical Management Theory

It arose because of the need to increase

productivity and efficiency. A theory that focused

on finding the “one best way” to perform and

manage tasks

• Classical Scientific School : Focused on themanufacturing environment

• Classical Administrative School : Emphasized the

flow of information and how organizations should

operate



• It developed during the Industrial Revolution

when new problems related to the factory system

began to appear. Managers were unsure of how

to train employees (many of them non-English

speaking immigrants) or deal with increased

labor dissatisfaction, so they began to testsolutions



Classical Scientific School

1. Charles Babbage

• In 1832, published On “the Economy of Machinery and

Manufactures”

• Concluded that definite management principles existed:

– with broad applications

– determined by experience

• Principle of “the division of labor amongst the persons who

perform the work”



2. Frederick W. Taylor

• The Father of Scientific Management

• Pursued four key goals:

– Develop a science of management

– Select workers scientifically

– Develop and train workers scientifically

– Create cooperation and group harmony between management and

labor

– Achieve maximum outputs

• Determined the quickest ways to perform tasks

• His primary concern was to raise productivity through greater

efficiency in production & increased pay for workers, by applyingscientific method



As an example,

• In 1898, Taylor calculated how much iron from rail

cars, Bethlehem Steel plant workers could beunloading if they were using the correct movements,tools, and steps.

• The result was an amazing 47.5 tons per day insteadof the mere 12.5 tons each worker had been

averaging.• In addition, by redesigning the shovels the workers

used, Taylor was able to increase the length of worktime and therefore decrease the number of peopleshoveling from 500 to 140.

• Lastly, he developed an incentive system that paidworkers more money for meeting the new standard.

• Productivity at Bethlehem Steel shot up overnight.



Taylor’s Four Principles of Management

1. Develop a science for each element of an individual’s

work, which replaces the old rule-of thumb method.2. Scientifically select and then train, teach, and develop the

worker. (Previously, workers chose their own work andtrained themselves as best they could.)

3. Heartily cooperate with the workers so as to ensure thatall work is done in accordance with the principles of thescience that has been developed.

4. Divide work and responsibility almost equally betweenmanagement and workers. Management takes over allwork for which it is better fitted than the workers.

(Previously, almost all the work and the greater part of theresponsibility were thrown upon the workers.)



3. Henry Gantt (1901)

• Invented the Gantt chart (type of bar chart forillustrating project schedule)

• Stressed the need for training

• Moved away from authoritarian management

• Advocated a bonus system to reward workers

• Called for scientific selection of workers

• Harmonious cooperation between labor andmanagement





Frank Gilbreth is probably best known for hisexperiments in reducing the number of motionsin bricklaying.

• Frank's early career as an apprentice bricklayer, hewas interested in standardization and methodstudy

• He watched bricklayers and saw that some workers

were slow and inefficient, while others were veryproductive

• He discovered that each bricklayer used a differentset of motions to lay bricks.

• Frank isolated the basic movements necessary to

do the job and eliminated unnecessary motions.• Workers using these movements raised their

output from 1,000 to 2,700 bricks per day.



Lessons from Classical Scientific Thinkers

Analyze everything

Teach effective methods to others

Plan responsibly

Constantly monitor workers

Control the work and the workers



How Do Today’s Managers Use Scientific

Management?

• Guidelines devised by Taylor and others toimprove production efficiency are still used in

today’s organizations. However, current

management practice is not restricted to

scientific management practices alone. Elements

of scientific management still used include:

• Using time and motion studies

• Hiring best qualified workers• Designing incentive systems based on output



Administrative Management began in the

1940s. Unlike scientific management,

administrative management focused largely

on jobs and work at the individual level of analysis. It provided a more general theory of

management.



Classical Administrative School

1. Henri Fayol

• Referred to as Father of modern management theory• Divided industrial activities into six groups:

technical,commercial,financial,security, accounting and managerial

• Recognized the need for teaching management

• Formulated 14 principles of management, such as authority &responsibility, unity of command, scalar chain etc.

• Believed specific management skills could be learned and taught

• Fayol’s universal management functions:

– Planning

– Organizing

– Leading

– Controlling



Fayol’s Fourteen Principles of

Management

1. Division of Work

2. Authority

3. Discipline

4. Unity of Command5. Unity of Direction

6. Subordination of Individual Interests tothe General Interest

7. Remuneration

8. Centralization

9. Scalar Chain

10.Order

11.Equity12.Stability of Tenure of

Personnel

13.Initiative

14.Esprit de Corps(teamwork)



2. Mary Parker Follett

• Focused on how organizations cope with conflict and

the importance of sharing goals• Emphasized the need to discover and enlist

individual and group motivation

• The first principle for individual and group success is

the “capacity for organized thinking”• Advocated principles of cooperative effort

Two core concepts:

• Reciprocal response (interaction where output is

more than participants can produce alone)• Integration of interests which depends on shared

power



3. Chester Barnard

• He is credited with developing the acceptance theoryof management, which emphasizes the willingness of employees to accept that managers have legitimateauthority to act. So argued that managers must gainacceptance for their authority

• Advocated the use of basic management principles

• Cautioned managers to issue no order that could not or

would not be obeyed• Decision making hinges on communication

• introduced the idea of the informal organization —cliques (exclusive groups of people) that naturally formwithin a company & provided necessary and vital

communication functions for the overall organization



4.Max Weber : Theory of Bureaucracy

• Weber developed a theory of authority structures

and described organizational activity based onauthority relations.

• He described the ideal form of organization as abureaucracy marked by

1. Division of Labor2. Authority Hierarchy

3. Formal Selection

4. Formal Rules and Regulations5. Impersonality

6. Career Orientation



How Do Today’s Managers Use General administrativeTheories?

Some current management concepts and theories canbe traced to the work of the general administrativetheorists.

• The functional view of a manager’s job relates to

Henri Fayol’s concept of management.• Weber’s bureaucratic characteristics are evident inmany of today’s large organizations—even in highlyflexible organizations that employ talentedprofessionals. Some bureaucratic mechanisms are

necessary in highly innovative organizations toensure that resources are used efficiently andeffectively.



Behavioral Management Theory




• When the behavioral concept began in the 1930s,

there was a global depression that brought an abruptshift from the fun-loving lifestyles of the Roaring 20s.

• As Socialists proclaimed the death of capitalism,Adolf Hitler was rising to power in Germany.

• Technology was still progressing as globalcommunication increased.

• Unfortunately, it was also the beginning of WorldWar II in 1939.

• The behavioral school focused on trying tounderstand the factors that affect human behavior atwork.




• Recognized employees as individuals with concrete,

human needs, as parts of work groups, and asmembers of a larger society

• Two Groups: Interpersonel Behaviour approach and

Group Behaviour approach

• Since management is process of getting things doneby people,managers should understand human

behaviour

• Emphasis is put on increasing productivity thru

motivation and good human relations

• Motivation,leadership,communication,participative

management & group dynamics are its central core



1. Robert Owen

•The father of modern personnel management

•The quality and quantity of workers’ output

influenced by conditions on and off the job

•Scottish businessman and reformer who advocatedfor better treatment of workers.

•Claimed that a concern for employees was

profitable for management and would relieve human

misery.



2. Abraham Maslow

• Needs-based theory of motivation – physiology

– security

– affiliation

– esteem

– self-actualization





The Hawthorne Studies were the most importantcontribution to the development of organizational behavior.

1. This series of experiments conducted from 1924 to the

early 1930s at the Western Electric Company Works inCicero, Illinois, were initially devised as a scientificmanagement experiment to assess the impact of changesin various physical environment variables on employeeproductivity.

• After Harvard professor Elton Mayo and his associates joined the study

as consultants, other experiments were included to look at redesigning jobs, make changes in workday and workweek length, introduce restperiods, and introduce individual versus group wage plans.

• The researchers concluded that social norms or groupstandards were key determinants of individual workbehavior.

• Although not without criticism (concerning procedures,analyses of findings, and the conclusions), the HawthorneStudies stimulated interest in human behavior inorganizational settings.



Behavioral Management Theory Results

Managers discover…

• What employees want from work

• How to enlist cooperation and commitment

• How to unleash talents, energy, and creativity



How Do Today’s Managers Use the Behavioral

Approach?

1.The behavioral approach assists managers in

designing jobs that motivate workers, in

working with employee teams, and in

facilitating the flow of communication withinorganizations.

2.The behavioral approach provides the

foundation for current theories of motivation,

leadership, and group behavior anddevelopment.



Quantitative Management Theory



Quantitative Management Theory

– Evolved out of the development of mathematical

and statistical solutions to military problemsduring World War II.

– Involves the use of statistics, optimization models,information models, and computer simulations toimprove management decision making for

planning and control.

• Emphasized mathematical approaches tomanagement problems

• Applied to every aspect of business

• But many aspects in management cannot bemodeled



How Do Today’s Managers Use the Quantitative

Approach?

1.The quantitative approach has contributedmost directly to managerial decision making,

particularly in planning and controlling.

2.The availability of sophisticated computer

software programs has made the use of

quantitative techniques more feasible for

managers.



Systems Management Theory



When the systems concept began in the 1950s, thedecade echoed the return of conservative values

and the return to the 1920s-type consumer society.

There was a high rate of unionization in industry andmost of the technology supported the Cold War.

During this time, most of the earlier internalAmerican problems such as women’s rights and civilrights were now suppressed as Americans settledinto suburban life; however, suppressing these social

issues would have a significant impact on the 20thCentury.



Systems Management Theory

• The theory that an organization comprises

various parts that must perform tasks necessary

for the survival and proper functioning of the

system• Systems concepts have broad applicability

• Systems have boundaries but still interact with

external environment





1. Chester Barnard

• The task of managers is to maintain a system of

cooperative effort in a formal organization.

• Suggested a comprehensive social systems

approach to managing.



The Organization as a System





• The Contingency Approach

– Replaces more simplistic systems and integrates

much of management theory.

• Four Contingency Variables

– Organization size (coordination)

– Routineness of task technology (task complexity

dictates structure)

– Environmental uncertainty (change management)

– Individual differences (managerial styles ,motivational techniques, and job design

A few of the major contributors are Fred Fiedler,Joan Woodward, and Paul Lawrence



Popular Contingency Variables

• Organization size

• As size increases, so do the problems of coordination.

• Routineness of task technology

• Routine technologies require organizational structures,

leadership styles, and control systems that differ from

those required by customized or non-routine

technologies.• Environmental uncertainty

• What works best in a stable and predictable environment

may be totally inappropriate in a rapidly changing and

unpredictable environment.

• Individual differences• Individuals differ in terms of their desire for growth,

autonomy, tolerance of ambiguity, and expectations.



Management Theory Jungle

• Variety of approaches to management analysis

• Great amount of research

• Great no. of differing views

• Resulted in much confusion as to what

management is?• What management theory and Science are?

• How managerial events should be analysed?

• Harold Koontz defined this situation as “ themanagement theory jungle”





9. Cooperative Social Systems Approach

10. Group Behaviour Approach11. Interpersonel Behaviour Approach

12. McKinsey’s 7-S framework

13. TQM Approach

14. Management Process/Operational Approach



Role of Managers

Planning• Selecting missions and objectives as well as the

actions to achieve them,which requires decision

making

• No real plan exists untill a decision-a

commitment of human or material resources-has

been made



Organizing

• Establishing an intentional structure of roles forpeople to fill in an organization

Staffing

• Involves filling and keeping filled the positions in theorganization structure

• Done by identifying workforcerequirements,inventoring the people available, and

recruiting,selecting,placing,promoting,appraising,planning the careers of,compensating,training bothcandidates and current jobholders



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Ch-1,Schools of Thought in Management