Evolution Of Management Thought

1. Evolution Of Management Thought

2. Evolution of management thought • Management practice is as old as human civilization when people started living together in groups. • The study of how managers achieve results is mainly twelfth century phenomenon . • In earlier year management could not get attention of researcher because management concept applied was held low. • World war I created the situation where people started thinking of limited resources can be utilized in better way. • After world war II increasing completion & complexity of managing large business orgenisation • In recent years there is change in various factor such as 1) technological innovation 2) freedom of national & international market 3) increasing size of business of orgenisation 4) pressure of various interest groups 4) government regulation • The above factor attracted the attention of wide variety of intellectuals economist ,psychologist , mathematician to study orgenisation & process through which these orgenisation could be more effective. • By studding business process they made recommendation accordingly , this led to the emergence of a variety of approaches in management.

3. Early Contribution made by some of the management thinkers:- • Robert Owen(1751-1858) • He carried out experiment in the area of personnel. • James Watt (1736-1819) & Boulton(1728-1809) • Both took charge of the management of the Soho engineering Foundry it is established in 1796 in great Britain • The y developed many management technique such planning & forecasting technique ,work-flow requirement ,calculation of cost & profit for each machine • Charles Babbage(1791-1854) • He has given contribution in economics division of labour & development • James Montgomery(1771-1854) • He was textile owner • He focused on the importance of planning ,organizing & controlling of business unit

4. Classical Theories1.Taylor’s Theory of Scientific Management • “scientific management is concerned with knowing exactly what you want men to do & then see in that they do it in the best & cheapest way” • He completed his Master Of Engineering • “The Father of Scientific Management” • Tools / Elements of scientific Management • Taylor conducted various experiments at this work place to find out how human being could be made more efficient by understanding the work & better method of doing the work. Experiment provided following features of scientific management. • Separation of planning & doing:-According to experiment he realized that planning should be left to the supervisor & worker should emphasis only operational work

5. 2.Functional foremanship:- Taylor evolved the concept of functional foremanship based on specialization function. eight person are involved to direct activities of worker . from that four are concerned with planning & other concern with doing aspect the work.

6. Job analysis:- • it is done for find out the one best way of doing the things • Time study involves the determination of time a movement take to complete • Motion study involves study of movements to complete the job & thereby eliminating wasteful or unnecessary movement • Fatigue study shows the amount & frequency of rest required in completing the work • Standardization:- • standardization should be maintained in respect of instruments & tools ,period of work, amount of work this is fixed on job analysis • Scientific selection & training of workers:- • selection should be on scientific basis taking into account their education ,work experience ,aptitude • Financial incentives:- • financial incentives can motivate worker to put in their maximum effort. • Taylor himself applied the concept of differential piece rate systems • He suggested that wages should be based on individuals performance & not on the position • Economy:- • consideration of economy & profit should be considered . • the economy & profit can achieved by making the resources more productive as well as eliminating wastage. • Mental revolution:- • scientific management depends on the mutual co-operation between management & workers. need of mental change in both parties from conflict to co-operation.

7. Principle of scientific management • Replacing rule of thumb with science:- replace old method of doing work with scientifically. • Time & motion study:-he observed that a number of movements of the worker at the work place were unnecessary & consequentially they were taking more time to do job than necessary. he proposed time & motion study .study involves following steps • Observing the motions of the worker at the work place • Indentifying necessary & unnecessary movements • Elimination of unnecessary movements • Observing time period required for each of the necessary movements • Developing shorter & fewer motion • Standardizing the motion & time 3. Harmony in group action:- • harmony suggest that their should be mutual give & take situation & proper understanding so that group as a whole contributing to the maximum. 4. Cooperation:- • scientific management is based on mutual confidence ,cooperation, & goodwill • Cooperation between management & worker can be developed through mutual understanding 5. Maximum output:- • Scientific management involves continuous increase in production & productivity instead of restricted production 6. Development of workers:- all workers should be given opportunity to improve to the fullest extent possible .

8. Features of scientific management:- • It was closely associated with the industrial revolution & the rise of large scale enterprise. • It is focused on job content division of labor , standardization , simplification & specialization & scientific approach towards orgenisation • Limitation of scientific management:- • It is concentrate only the technical aspect of production & ignore the human factors in the industry. • It is expensive system as it require appointments the large number of specialist for close & strict supervision • Not useful to deal with groups or teams

9. 2.Fayol's Administrative Theory • Known as father of modern management • He looked the problem of managing an orgenisation from top management view he used term administration instead of management • Classification of business activities:- • Technical (manufacturing & production) • Commercial(buying ,Selling & exchange) • Financial(search for optimum use of capital) • Security(protection of property & persons) • Accounting(including statistics) • Managerial(planning ,orgenisation ….) • Fayol has divided his approach of studying management into three parts • Managerial qualities & training • General principle of management • Elements of management

10. 1) Managerial Qualities & training • He is the first person to identify qualities required in a manager • According to fayol six type of qualities that a managers require. • Physical( health) • Mental (ability to understand & learn) • Moral (energy ,loyalty ,initiative ,dignity) • Educational (general acquaintance with matters ) • Technical • Experience

11. 2.General principles of management • Fourteen Principles of Management(Tools for Accomplishing Objectives) • Division of work:- • Specialization increases output by making employees more efficient. • Authority and Responsibility:- • in order to discharge the responsibility properly their should be equality of authority & responsibility. • Discipline:- • all employee of orgenisation should be disciplined. Discipline is obedience , application , energy , behaviour & outward mark of respect shown by employees.  Employees must obey and respect the rules that govern the organisation. Good discipline is the result of effective leadership. • Unity of command:- • Every employee should receive orders from only one superior. • Unity of direction:- • means each group of activities with the same objective must have one head & one plan. it provides better coordination among various activities to be undertaken by an orgenisation. Each group of organisational activities that have the same objective should be directed by one manager using one plan. • Subordination of individual interest to general interest:- • The interests of any one employee or group of employees should not take precedence over the interests of the organisation as a whole. • Remuneration : • payment is important motivator to employee. Workers must be paid a fair wage for their services

12. Centralization:- • Decreasing the role of subordinate in decision making is centralisation , increasing the role is decentralisation • Fayol said that manager should retain final responsibility but some time give some authority to subordinate to do their job • Scalar chain( line Authority):- • it suggest that each communication going up or coming down must flow through each position in the line of authority. The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed. Fayol has suggested that ‘gang plank’

13. Order:- • Materials & people should be in the right place at the right time . • Equity:- • it is the combination of justice & kindness . Treating employees well is important to achieve equity. Managers should be kind and fair to their subordinates • Stability of tenure of personnel:- • Employees work better if job security & career progress are assured to them. an insecure tenure & high rate of employee turnover will affect the orgenisation adversely. • Initiative:- • Manager should encourage the employee for taking initiative. • Esprit de corps:- • Promoting team spirit will build harmony and unity within the orgenisation.

14. 3. Elements of management • He said that management should be viewed as a process consisting of five elements • Planning • Orgenisation • Commanding • Coordination • controlling

15. Max Weber’s contribution to Management BUREAUCRACY. • he analyzed the functioning of church , government , military & business orgenisation he stated that bureaucratic structure is most efficient form of structure • Bureaucracy is an administrative system designed to accomplish large scale administrative tasks by systematically coordinating the work of many individuals.

16. Characteristics of bureaucratic orgenisation • Administrative class. • Bureaucratic orgenisation having administrative class for maintaining coordinative activities of the member Features of Administrative class. • People are paid and are whole time employees. • They receive salary and other perquisites normally based on their positions. • Their tenure in the organization is determined by the rules and regulations of the organization. • They do not have any proprietary interest in the organization. • They are selected for the purpose of employment based on their competence.

17. 2. Hierarchy. • Hierarchy is a system of ranking various positions. • Lower office subject to control and supervision by the higher office. • No office is left uncontrolled. • Hierarchy serves lines of communication & delegation of authority . communication should pass through each position. • Authority given from immediate superior to subordinate. • There are offices with same amount of authority but with different kinds of functions operating in different areas of competence

18. 3. Division of work. • Work of the orgenisation is divided on the basis of specialization to take the advantage of division of labor. • It tries to ensure that each office has clearly defined area of competence within orgenisation. • Each official knows the area in which he operates & the areas in which he must abstain from action so that he does not overstep the boundary between his role & others 4. Official Rules. • formal written instructions that specify actions to be taken under different circumstances • Administrative process is continuous and governed by official rules. • Rules for uniformity and coordination of efforts. • Rules provide stability, continuity and predictability.

19. 5. Impersonal relationships. • Relationship among individuals are governed through the system of official authority and rules. • Reward should given on the basis of efficiency • Personal preferences , emotion should not influence the functioning of orgenisation . • Decision are governed by rational factor rather than personal factor. 6. Official Record. • Bureaucratic orgenisation is characterized by maintenance of proper official records. • Activities and decisions recorded and preserved for future reference. • Official record used as encyclopedia of various activities performed by the people .

20. Problems /limitations in Bureaucracy. • Invalidity of Bureaucratic assumptions. • Rules become the source of inefficiency because of too much emphasis on rules ,their misuse , & people’s lack of interest from rules.. • inflexible organizational hierarchy works against efficiency. • Impersonal approach cannot be adopted always because people have feelings ,emotions & sentiments which affects decision making. thus people cannot work according to rule . 2. Goal Displacement. • Goal displacement(dislocation) occurs when resources are used for purpose other than for which the orgenisation exists. • People are judged on the basis of observance of rules and not results. • Expenditure becomes criterion instead of results. • Ex –performance is judged on expenditure not on result achieved through expenditure

21. 3. Unintended (accidental)consequence. • Trained incapacity means person is trained at the matter from a single point of view thus he does not see beyond his training & tries to correlate the matter with total situation on the basis of his training. • Conflict between professionals and bureaucrats because professional work according to their discipline for efficiency while bureaucrats try to emphasize rules & regulation. • Conflict between orgenisation & individuals, some rules are of bureaucracy are against human nature . 4. Inhuman organization. • It is inhuman and denies man’s needs. • It is incompatible with the development of mature personality. • It promotes traditional values. • It does not consider the informal organization and interpersonal difficulties. • It is ineffective in confused environment. • Bureaucracy works against the basic nature of human behaviour.

22. 5. Closed system Perspective. • Bureaucratic orgenisation has closed system perspectives • A closed system is self contained and self maintaining. • It is generally inflexible and static. • No allowance for adapting to changes in environment. • It is suitable in highly static and predictable environment. • It ignore external condition & makes no allowances for adapting to change in the environment • Open system perspective is more suitable for management of modern day orgenisation while bureaucratic orgenisation has closed perspectives.

23. Behavioral :HR Approach • Developed by George Elton Mayo called as father of Human Relation Approach • He is born 1880in Australia • He is founder & father of modern sociological psychological industrial research • Earlier we studied scientific management which focused on the mechanical & physiological variables of orgenisational functioning were tested in the field of increase the efficiency • No positive response to work behaviour of human being • They discovered real cause of human behaviour was something more than physiological variable • The human relation approach of management focus attention on human being in the orgenisation . • Conducted experiment in Hawthorne plant in between 1927-1932 • Theory assume that happy workers are productive workers

24. Hawthorne experiments • Hawthorne plant of the general electric company , Chicago , manufacturing telephone system bell • 30000 employee at time experiments • Company asked to national academy of science to investigate the problems of low productivity • Team was constituted led by Elton Mayo (psychologist) whitehead & Roethlisberger(sociologist) & company representative William Dickson. • They conducted research in four phase • Experiments to determine the effect of change in illumination on productivity, illumination experiments 1924-27 • Experiment to determine the affect of change in hours & other working conditions on productivity ,relay assembly test room experiment 1927-28 • Conducting plant-wide interview to determine worker attitude & sentiment ,mass interviewing program 1928-30 • Determination & analysis of social orgenisation at work ,bank wiring observation room experiments 1931-32

25. Illumination Experiments • Experiments carried out for varying levels illumination (amount of light at the workplace) affected the productivity. • Hypothesis is set that higher illumination productivity would increase • Two groups are created first group is experimental group will work in varying intensities of illumination . second group continued with constant intensities of illumination called as control group • Researcher found that increased illumination ,increase in productivity of both the group when illumination decreased the production of both groups continued to increasing • The production is decreased when illumination decreased to moonlight level i.e. the below the normal level • Conclusion:- illumination did not affect on productivity • Human factor was important in determining productivity

26. Relay assembly test room experiments • Two girls are chosen . and asked them to chose four girls as co-worker • Work is assemble the telephone relays. • Output depend upon speed & continuity with which girls worked. • Experiments started with change in sequence with duration of each change in four to twelve weeks • Before each change was introduced the girls were consulted they were given opportunity to express their viewpoints to supervisor. Following are some changes & resultant outcome • the incentive system was changed so that each girl extra pay based on other five rather than output .so increased productivity • Two five minute rest one in morning & another evening session increased to ten minute ,the productivity increased. • The rest time reduced to five minute but frequency increased , productivity decreased slightly & girls complained that frequent rest interval affect the rhythm of work • No of rest reduced to two of ten minute each but breakfast & snacks are given in morning & evening .productivity increased • Change in working hours & workday were introduced ,girls allowed to leave 4.30 pm instead of 5.00 pm productivity increased • As change introduced moral improved , absenteeism decreased less supervision • Researcher decided that revert back to original position surprisingly productivity increased • There is change in attitude of the girl toward work ,they developed fallings of stability & sense of belongingness.

27. Mass interviewing programme:- • 20000 interviews conducted to know attitude of employee towards company supervision , Insurance plans ,promotion & wages • Findings • Employee satisfaction or dissatisfaction only as the employee comes to view them from his personal situation. • Personal situation depends upon personal preference involving sentiments ,desire & interest of the person & the social reference • The social orgenisation of the company represents a system of values from which the worker derives satisfaction or dissatisfaction according to the perception of his social status & expected social rewards • The social demands of the worker influenced by social experience in group both inside & outside the work plant. • Conclusion:- workers behaviour was being influenced by group behaviour

28. Bank wiring observation method • Experiments carried out to find out the functioning of small group & its impact on individual behaviour • Group of 14 male from that nine wireman three solder men & two inspector • Hourly wage rate & bonus depends upon group output • Hypothesis was that to earn more worker produce more & for taking bonus they would help each other but hypothesis did not hold valid • Worker have decided target themselves which was lower than company target • Following reason for restricted output • Fear of unemployment • Fear of raising the standards • Protection of slower workers • Satisfaction on the part of management • According worker management seemed to accept lower production rate as no one is fired or even given warning • Conclusion • Informal relationship are an important factor in determining the human behaviour

29. Implication / findings of Hawthorne experiments • Social factor in output • Orgenisation is social system , social factor determine the output & efficiency in the orgenisation. • Group influence • Group determine the norm of behaviour of members • Management cannot deal with worker as individuals but as member of work group subject to the influence of the group. • Conflict • Informal relation of worker create group & there is conflict between group & employee • Conflict because of incompatible objectives of the two. • Leadership • Leadership is important for directing group behaviour • In some areas informal leader is more important in directing group behaviour • Supervision • Supervision is an important aspect in determining efficiency & output • Friendly to workers , attentive genuinely concerned supervision affect the productivity favorably. • Communication • Through communication worker can explained the rationality of a particular action

30. Systems approach • This system approach to management is a concept which views a company as an interconnected purposive system that consist several business sections. • This approach aims at identifying the nature of relationship among various component of the organization • A system is an assemblage of thing connected or interrelated so as to form a complex unity • Basic part of a system • input:- raw material ,information • process:- a mechanical process is carried on to convert the shape or form of raw material • Output:-goods ,services • Feedback & environment:-

31. Features of system:- • A systems is combination of parts ,subsystems . • Parts & subparts of a systems are mutually related to each other. any change in one part may affect other part also • A system is not simply the totality of parts and subparts but their arrangement is more important. • The boundary of systems classifies it in to two parts closed system & open system • System transforms inputs into output. this transformation process is essential for the survival of system. • A system can be identified because it has a boundary, the boundary classified in two parts closed system & open system • all living organism are open system while all non-living system are closed system

32. Open & closed system:- • All living organism are open system while all non living systems are closed system. • Closed systems are those that have no interaction with environment. open system are those that interact with their environment. • Closed systems are self-contained and self-maintaining as they do no interact with the environment. open systems import energy & export output • Closed system are generally mechanical ex-automatic watch. open systems are affected by environmental factors and they have adjusted according to environment. • Open system have feedback mechanism that helps them to maintain equilibrium • The classification of various system into closed system & open system is not very proper.

33. Features of management as system/system approach with reference to management • Under system approach ,management is regarded as system .when system concept applied to management • Management as social systems • Management as system consist of many subsystem which are integrated to constitute an entity. • Management as open system • Adaptive • Dynamic • Mgmt move towards growth & expansion by preserving some of the energy • It is not that internal processing process that determine the effectiveness of management but also how it interacts with changing environment • Probabilistic • Mgmt is probabilistic in nature not deterministic. • The outcome can be assigned only probability not certainty • It has same characteristics at same level • Multilevel & multidimensional • Mgmt has both macro & micro approach. • Orgenisation can interact with other orgenisation & the economy at various level in any ways • Multivariable • It involves taking into account many variables simultaneously. so many variables are interrelated & interdependent. • An integrated approach • Mgmt tries to integrate the various factor to find out the reason behind a phenomenon .

34. Limitation of system approach • Abstract ( theoretical) approach • System approach is too theoretical • Approach fails to give brief relationship among the orgenisation & other orgenisation in society • System approach fails to bring out precisely relationship among orgenisation& society • Lack of universality • System approach lacks universality and its percepts cannot be applied to all orgenisation. • These suitable for large orgenisation but are not suitable for small orgenisation. • The role of theory is not to prescribe action for particular category of orgenisation • This approach does not offer anything new . the manager solving problem as a network of interrelated element & interaction between inside & outside environment. • Looking these shortcoming they tried to modify system approach & then emergence of contingency or situational approach

35. Contingency or Situational approach • According contingency approach there cannot be particular action which will be suitable for all situation. • System approach does not adequately predict out the precise relationship between orgenisation & its environment. • Contingency approach try to fill this gap by suggesting what should be done in response to an event in the environment . • Contingency approach suggest an active interrelationship between the variable in situation & the managerial action plan. • Situational approach suggest that situational management implies that what a manager does depends on given situation & contingency approach suggest that an active relationship between the variable in situation & managerial action • Contingency approach takes into account not only given situation but also influence of given solution on behaviour pattern of an orgenisation. • Features • Orgenisation action should be based on the behaviour of action outside the system so that orgenisation should be integrated with the environment • No action can universal .it varies from situation to situation .

36. Implication of contingency approach • It is sophisticated approach to understand the increasing complexity of orgenisation. • This approach directed towards suggesting orgenisational design & managerial action most appropriate to specific situation. • management is entirely situational & there is nothing like universal principle of management or one best way of doing a particular thing. what manager do depends on the circumstances & environment. • suggest suitable alternative for those managerial action which are generally dependent upon external & internal environment such as organizational design ,decision system ,leadership in this cases action alternative cannot be arranged but have to identify & adjust according to situation • Contingency approach suggest that orgenisation interact with its environment , Orgenisation has to modify & adjust the action subject to various forces like social , political , technical & economic

37. limitations of contingency approach:- • Inadequate literature:- • This approach cannot offer much assistance to the practice of management. • It is not clear that certain action should taken under different situation • Complex:- • This approach when we put in to practice ,this become very complex . • Determination of situation in which managerial action is to be taken it involves analysis of large data • Difficult empirical/experimental testing • Testing become difficult due to the involvement of too many variable • Reactive not proactive:- • It suggest that managers can do in a given situation • Manager are responsible to manage the environment in a such way that they avoid undesirable aspect of environment.