Early Management Pioneers
• Adam Smith
– A renowned economist
– Writer of the book – Wealth of Nations (1776)
–Division of work for economic advantage
– Increasing individual worker’s skill and dexterity
• Robert Owen (1771–1858)
–British industrialist who was one of the first managers to recognize the importance of human resources and the
welfare of workers.
• Charles Babbage (1792–1871)
–English mathematician who focused on creating efficiencies of production through the division of labor, and the application of mathematics to management problems.
Approaches to Management theories:
• Different approaches to management theories evolved
It can be classified as:
1. Classical Theory
a. Scientific management theory
b. Administrative management theory
2. Behavioral Science Theory
3. Management Science Theory
4. Decision Theory
5. Systems Theory
6. Contingency Theory
1. Classical Theory:
• emerged in the early year of the twentieth century to increase efficiency and productivity due to evolution of large
• constitutes the discipline & process of management in an organization.
• also referred to as the traditional theory,
• includes two different approaches
i. scientific management
ii. administrative management
A. Scientific Management Theory:
Contributions of F.W Taylor
Principles of scientific management
ii. Fayol’s administrative management theory
Henry Fayol was born in 1841 as French. He is the industrialist who developed the administrative theory. He is also known as father of general management. He got his engineering degree and joined a French company as an junior executive in 1860 and senior executive in 1888. He published his classic book on general and industrial administration in 1928, which explained the first complete theory of management. He emphasized on 14 principles of general management and attempted to provide guidance and direction to other management.
Fayol’s management principles
Max Weber principle of bureaucratic theory
Principles of bureaucratic theory
Limitations of bureaucratic theory
Behavioral Management Theories
Behavioral Management Theories
Hugo Munsterbeg (1863-1916) is known as the “father of industrial psychology” and is as important for psychology students as F.W. Taylor is for management students.
He focused to provide a view of psychology’s practical applications. Munsterbeg believed that industry can be benefited by psychologists in three major areas:
- Seeking modern ways to hire the right person for the right job.
- Achieving optimum efficiency by identifying the psychological conditions.
- Finding methods to direct behavior of individual employees to be in harmony with the management’s objectives.
Mary Parker Follett (1868-1933) was the person who introduced the concepts of social Work Political Science. She identified:
- Working in groups is more important than working individually in any organization.
- That “power with” should be the principle of management-employee relation in the organization rather than “Power over”.
- Use of integration to resolve conflicts like providing a solution that offers mutual benefit to both of the parties involved in conflict.
- Integrative unity is the secret of success in an organization where different departments are present and working to achieve the same goal.
The Hawthorne Studies
A number of experiments done in Western Electrical Company, situated in Cicero, Illinois that are known as “Hawthorne Studies.” It is considered as the best historical contribution to the field of Organizational Behavior that provided a clear view of relation of working conditions to efficiency of employees and productivity. Industrial engineers at Western Electric started these studies in 1924 as an experiment of scientific management and the studies continued till 1930’s. They tried to identify that how different illumination levels affect worker productivity. Two groups were created, control group and experimental group. The engineers examined the experimental groups working in different lighting intensities; however, the control group was examined under a constant lighting intensity.
Keeping this working scenario in mind, everyone would think that output was related to lighting intensity. However, engineers found that there was something else that also contributed to the change in output. Initially, they increased the light in the experimental group and surprisingly, the output was increased in both groups. After that, when they decrease the light to almost moon light, the output was decreased in experimental group only. Thus, it was concluded that illumines lighting intensity was not the factor that directly relates to the group productivity. There was “something else” that needed to be identified, but the engineers were not able to find it.
After these great experiments done by engineers, the Western Electric Company, in 1927, invited Elton Mayo, professor at Harvard for consultation on the studies. It contributed to creating a long lasting relationship among employees of the company and Elton Mayo along with his associates. The relationship resulted in various interesting experiments, including job redesigning, changes in the length working day and working week, and individual versus group wage plans. One of the experiments was to examine how group piece work reward affected the group productivity. Hawthorne Studies was almost connected to traditions of scientific management, because it also focused on increase productivity by improving the methods and tools of work such as lighting.
The Hawthorne studies provided different findings:
- Initially, studies did not provide any evidence of correlation between work performance of individuals and change in lighting. In fact, work performance almost increased with any change in illumination lighting.
- After that in the second phase, the studies become apparent. They revealed that workers’ performance can be improved by just giving them the required attention not because of the factors that the study aimed to examine.
- In the third phase of studies, the focus was on group productivity and motivation of individuals.
- Ultimately, the Hawthorne studies provided a concept that the organization also has social aspects that, if given proper attention, can contribute to better performance or workers.
Human Relations Movement
The human relation movement was aimed at providing social skills to managers that they needed to make management-employee relation better.
Abraham Maslow (1908-1970) was the person who proposed motivation theory, which is based on three assumptions about human nature.
- The needs of human beings cannot be satisfied completely.
- Humans always strive to satisfy their needs, which are still unsatisfied.
- The priority of needs can be sorted into a hierarchy that range from basic, lower-level needs to higher level needs:
- Physiological (lowest)
- Belongingness or social
- Self-actualization (highest and not everyone is capable of achieving it)
Douglas McGregor (1906-1964) provided a view of the Theory X and Theory Y dichotomy. These theories tell how managers make assumptions about workers and what the effect of these assumptions is on the behavior of the employee.
- Theory X, managers assume that workers always remain lazy and do not put their complete efforts in their performance; therefore, they need to be pushed. Workers have no or just a little ambition, and mostly focus on their security needs. This kind of manager thinks that these assumptions are true and they treat workers accordingly.
- Theory Y managers assume that workers have self-control and do not deliberately put less effort in the work. They can be innovative and creative and in a general manner, their needs are higher than the needs met on the job. These kinds of managers then treat their subordinates as if their assumptions are true.
- Workers are assumed to work sometimes at a higher capacity and sometimes at lower capacity like all of us.
The Behavioral Science Approach
The behavioral management theories depend on scientific research in order to develop any theory about human behavior at any workplace that could be helpful to make practical guidelines for employees at managerial levels.
- It overall emphasis to develop helpful tools that managers could use to improve workers’ performance. Behavioral science does not depend on mathematical certainty, because it is about behavior of humans that is very difficult to predict. It does not conclude that the scientific approach cannot be practical or its findings have less importance in the studies of human behavior in an organization.
- In that connection, setting a goal for an individual can be the best example, where the individual finds it attainable; however, it is not too easy.
Contributions of the Behavioral Management Viewpoint
- Behavioral Management viewpoint reveals that group dynamics, communication, motivation and leadership are of great importance for managers.
- Provides a clear view that behavioral studies can be applied practically.
- Provides findings about various other disciplines including psychology, management, anthropology, sociology, and economics.
- Shades light upon the importance of employees of an organization as a precious human asset rather than passive tools.
The behavioral management theories focus on the importance of human behavior. It can also be considered as a part of scientific management because it also focuses on increasing efficiency of workers that result in maximum productivity. However, behavioral management theorists do not take it as a part of scientific management, but managers can combine these ideas with those of F.W. Taylor. Humans are an important asset of an organization and if they work in a good environment and are motivated by their managers, will work more happily. It is human nature that if a person praises their work, then they will work with more passion and try to make it even better. Hawthorne studies also provide this view that making work environment better will help workers to perform better.
The Quantitative Management Theory
(a) Management Science
The term management scienceappears to be related to scientific management, the approach developed by Taylor and others early in this century. But the two have little in common and should not be confused.
Management science focuses specifically on the development of mathematical and statistical models. A mathematical model is a simplified representation of a system, process, or relationship.
At its most basic level, management science focuses on models, equations, and similar representations of reality. In recent years with the advent of the personal computer, management science techniques have become increasingly sophisticated. For example, motor manufacturers such as Toyota use realistic computer simulations to study collision damage to cars. These simulations give them precise information and avoid the costs of “crashing” so many test cars.
(b) Operations Management
Operations management is somewhat less mathematical and statistically sophisticated than management science and can be applied more directly to managerial situations. Operations management is a form of applied management science.
Operations management techniques are generally concerned with helping the organization produce its products or services more efficiently and can be applied to a wide range of problems. Thus, it will deal with decisions like plant layout, plant location, inventory control and distribution of finished goods. For example, Linear programming (which involves computing simultaneous solutions to a set of linear equations) helps Air Lines plan their flight schedules. Other operations management techniques include queuing theory, breakeven analysis, and simulation. All of these techniques and procedures apply directly to operations, but they are also helpful in such areas as finance, marketing, and human resource management.
• Systems Perspective
• Contingency Perspective
System Perspective (Theory)
• A system is a set of inter-related and interdependent parts, arranged in such a way that produces a unified whole.
Elements of Systems Theory
• Goal Orientation
• System boundary
• Open or closed
Contributions of system theory:
– Provides conceptual framework for meaningful analysis and management of an organization
– Emphasis on interrelations- interdependence
– Helps in problem solving
– It integrates various management theories by emphasizing on physical aspect, behavioral aspect, and environmental aspect
Limitations of Systems Theory
• Too abstract and difficult to apply
• Does not offer tools and techniques
• It does not offer unified body of knowledge.
Contingency Perspective (Theory)
• The theory focuses on situational factors.
• Main logic behind the theory:
– There is no one best method in all different situations
• The best method to solve a problem varies according to situation.
• Every organization is unique.
• There are four contingency variables that determine management Practice:
Four Contingency Variables
• Organization size
• Routineness of Task
• Environmental Uncertainty
• Individual Differences
Contributions of Contingency Theory:
• Encourages innovation in problem solving
• Requires the use of analytical, critical, and multidimensional techniques
• Increased freedom to managers
• Required managers to be more sensitive and alert
Limitations of Contingency Theory
• Ignores universally applicable principles
• Fails to enlist all contingency variables
• Focuses only on situation and not on tools and resources
• It ignores human behavioral aspects.