Unit 2: Perspectives in Management

1st Semester

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
scale business.
• 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:

Related imageScientific management concept is one of the principles of management and is also known as classical theory. This principle is propounded by Fredrick Winslow Taylor (F.W Taylor) – the father of management. He was born in USA in 1856. He joined Midvale steel company where he worked as a machine shop worker for two years as gang boss for some years and as chief engineer at the age of 28.he also joined Bethlehem steel company where he served for a long time. Later he devoted his time to develop the concept of scientific management.
He noticed that there were much disorder and wastage of human as well as other resources at work place. The managers and staffs had no concept about systematic and efficient performance of task. And all were following traditional ways of doing work. So he tried to remove these problems through the development of new concept. Thus the scientific management concept was developed.

Contributions of F.W Taylor

While working in Midvale Company as a manager Taylor observed that employees were not performing as per their capacity of productivity. And he considered that this condition was occurring because of no care towards the waste. Taylor worked towards the experiments at his work place to increase the worker’s efficiency so that maximum output could be achieved by utilizing effort at maximum level.
1.   Scientific task setting:- Taylor observed that the management does not know exactly the works – pieces of work- volume of works- which are to be performed by the workers during a fixed period of time- which is called working day. In a working day how much work is to be dome by a worker but be fixed by a manager and the task should be set everyday. The process of task setting requires scientific technique. To make a worker do a quantity of work in a working day is called scientific task setting
2.   Differential payment system:- under this system, a worker received the piece rate benefit which will attract the workers to work more for more amount of wages and more incentives would be created to raise the standardization of output to promote the workers to produce more and perform more task than before and utilize waste time to earn more wages.
3.   Reorganization of supervision:- concepts of separation of planning and doing and functional foremanship were developed. Taylor opines that the workers should only emphasize in planning or in doing. There should be 8 foreman in which 4 are for planning and 4for doing. For planning they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian. And for doing they were speed boss, gang boss, repair boss and inspector.
4.   Scientific recruiting and training:-staffs and workers should be selected and employed on scientific basis. Management should develop and train every workers by providing proper knowledge and training to increase their skills and make them effective
5.  Economy:- efficient cost accounting system should be followed to control cost which can minimize the wastages and thoroughly reduced and thus eliminated.
6.     Mental revolution:- Taylor argued that both management and workers should try to understand each other instead of quarreling for profits and benefits which would increase production, profit and benefits.

Principles of scientific management

1.    Replacing the rule of thumb with science:-it requires scientific study and analysis of each element of job in order to replace the old rule of thumb approach. Only through scientific investigation and standardization better way of work can be developed. Scientific selection of employees requires that decisions to make on facts rather than on opinions and beliefs.
2.  Harmony in group activities:- in the past there was only discord. Taylor has emphasized harmony among employee and employer to attain common goals which could help to contribute to the maximum limit.
3.      Cooperation:- cooperation between management and labor is the major foundation of scientific management. It creates a sense of mutuality through which maximum prosperity can be guaranteed.
4.      Development of employees:- personnel management must be backed up by scientific selection of employees along with proper training to them. Efforts should be made to develop each employee to achieve efficiency and prosperity.
5. Division of responsibility:- introduction of functional foremanship made division of responsibility. Many foremen should be appointed out of which 4 for planning and 4 for doing. In planning they were route clerk, instruction cord clerk, time and cost clerk and disciplinarian. And for doing they were speed boss, gang boss, repair boss and inspector. This promoted division of work which promoted division of responsibility
6.   Maximum output:- Taylor was more concerned with continuous increase in production and productivity. It maximum output is derived from optimum utilization of resources than surely it will bring higher profits and better benefits to the employer and employees.

Advantages of scientific management :-
To employees
a.       Better utilization of resources through scientific techniques
b.      Scientific selection and training of employees leads to better workforce which ensures increase in efficiency
c.       Harmonious relationship between the workers and the management
d.      Standardization of tools, materials, techniques , equipments for increasing efficiency
e.      Reduction of production cost
To workers
a.       Opportunity for scientific training and development to increase skills knowledge and competency
b.      Better working conditions
c.       Application of scientific methods and techniques in better working conditions to reduce fatigue
d.      Higher wages to the workers for higher productivity
To society
a.       People get better quality products at lower cost
b.      Increase productivity in the country by utilizing resources properly
c.       Improve standard of living of people through better products
d.      Scientific investigation promotes technological development
Limitations of scientific management: –
a.       It is based upon one best way and is applicable for simple organizations than that for today’s dynamic and complex organization
b.      It focuses on individual performance than group efforts and divides the workers into efficient and inefficient categories
c.       It is focused on specialization and repetition of jobs to increase the productivity which reduces innovation and creativity and promotes monotony
d.      It neglects human factor because it motivates workers to work for monetary benefits rather than human resource development and resources
e.      There is no scope for creativity of employees because they are developed by manager which promotes frustration.

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 Image result for fayol’s administrative management theoryknown 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

1)      Division of work: – This principle implies on dividing the total task into compact jobs and thus allocating them to different individuals which promotes specialization and efficiency in both technical and managerial level. It helps to acquire speed and accuracy in performance.
2)      Authority and responsibility: – Authority means to give order and power to exert obedience whereas responsibility means obligations to perform work in the manner directed and desired. Authority and responsibility are co existed and leads to responsive behavior and efficiency.
3)      Discipline :- Discipline implies obedience, respect and establishment and regulations which are essential for smooth running of all organizations for good supervision and built in system of reward an punishment
4)      Unity of command: – Subordinates should receive orders from single superior at a time and all subordinates should be accountable to that superior. More superior leads to confusion, delay and so on.
5)      Unity of direction: – One plan must be formulated for a group of activity and all the related activities should be put under one group show that efforts of managers of a single group can be directed towards achievement of common goal.
6)      eSpirit de corps : – This term comprises of two principles namely union is strength and team spirit is most essential. There should be cooperation and team work among members of the organization. The managers should always make effort to ensure harmony among the subordinates.
7)      Equity: – Subordinates should be treated with justice, equity and kindness so that there can not be nepotism and favoritism while selection of workers, treating the workers which helps to promote friendly environment between superior between superior and subordinates.
8)      Centralization: – It implies concentration of authority at the top level. No hard fast rules can be laid down regarding the extension of authority to be retained at the top level. Centralization and decentralization should be proportionately decided.
9)      Scalar chain: – It refers to chain of superior ranging from top to low ranks in a management. It determines the clear line of authority from top to bottom linking managers at all levels. All communication should flow the established chain of command.
10)   Order: – It refers to arrangement of resources in the organization. It implies right place for everything. It stresses upon proper utilization of physical, natural, capital and organizational resources.
11)   Stability of tenure: – It takes time to learn and get a job therefore a reasonable time should be provided to all employees for securing better results and guarantee of service. Stability of employees promotes team work, loyalty to the organization
12)   Initiative: – It means eagerness to initiate action in work related matters without being asked to do so .it is a powerful motivator of human behavior and is a source of strength for the organization.
13)   Remuneration of personnel:- The remuneration payable to employees should be fair and reasonable .management must ensure a fair reward for the work and decide the equitable method of calculating wages
14)   Superiority of organizational interest: – Personal interest must be discarded and general interest must be maintained. Organization is bigger than an individual .therefore the interest of the organization must prevail upon the interest of an individual.

Max Weber principle of bureaucratic theory

Max Weber a German sociologist propounded the theory called principle of bureaucracy – a theory related to authority structure and relations in the 19th century. According to him, bureaucracy is the formal system of organization and administration designed to ensure efficiency and effectiveness. He suggested an ideal model for management as bureaucratic approach. He, in the book the theory of social and economic organizations, explained the basic principles of bureaucracy. He gave emphasis on division of labor, hierarchy, detailed rules and impersonal relations.

Principles of  bureaucratic theory

1)   Job specialization: – Jobs are divided into simple, routine and fixed category based on competence and functional specialization.
2)    Authority hierarchy: – Officers are organized in a n hierarchy in which higher officer controls lower position holders i.e. superior controls subordinates and their performance of subordinates and lower staff could be controlled.
3)    Formal selection: – All organizational members are to be selected on the basis of technical qualifications and competence demonstrated by training, education or formal examination.
4)    Formal rules and regulations: – To ensure uniformity and to regulate actions of employees, managers must depend heavily upon formal organizational rules and regulations. Thus, rules of law lead to impersonality in interpersonal relations.
5)  Impersonality: – Rules and controls are applied uniformly, avoiding involvement with personalities and preferences of employees. Nepotism and favoritism are not preferred.
6)      Career orientation: – Career building opportunity is offered highly. Life long employment and adequate protection of individuals against arbitrary dismissal is guaranteed. Here managers are professional officials rather than owners units they manage. They work for a fixed salaries and pursue their career within the organization.

Limitations of bureaucratic theory

1)   Informal relationship is not considered: – It does not consider the informal relationships between individuals working in the organizations.
2)      Outdated system: – Its system of control and authority are outdated which can’t work in such a changed
environment.
Behavioral Management Theories Human Relations Approach

Behavioral Management Theories

There are number of theories of management and behavioral management theories are also one of them. At the time of the boom of industrialization, the total focus of managers was on increasing efficiency of workers and productivity. How employees felt was completely ignored, no manager even bothered to notice the working conditions.  Later managers realized that organizations do not improve by only increasing the efficiency of workers and productivity. Work environment also affects behavior of workers that ultimately affects the total productivity. Many people contributed their thoughts on organizational behavior (OB), from which Robert OwenMary Parker FollettHugo Munsterbergand Chester Barnard are prominent figures. Understanding OB also help managers to understand management, motivation, teamwork, leadership and Conflicts of Management in better ways.

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:

  1. Seeking modern ways to hire the right person for the right job.
  2. Achieving optimum efficiency by identifying the psychological conditions.
  3. 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:

  1. Working in groups is more important than working individually in any organization.
  2. That “power with” should be the principle of management-employee relation in the organization rather than “Power over”.
  3. Use of integration to resolve conflicts like providing a solution that offers mutual benefit to both of the parties involved in conflict.
  4. 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:

  1. 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.
  2. 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.
  3. In the third phase of studies, the focus was on group productivity and motivation of individuals.
  4. 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.

  1. The needs of human beings cannot be satisfied completely.
  2. Humans always strive to satisfy their needs, which are still unsatisfied.
  3. The priority of needs can be sorted into a hierarchy that range from basic, lower-level needs to higher level needs:
    1. Physiological (lowest)
    2. Safety
    3. Belongingness or social
    4. Esteem
    5. 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.

  1. 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.
  2. 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.
  3. 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.

  1. 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.
  2. 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

  1. Behavioral Management viewpoint reveals that group dynamics, communication, motivation and leadership are of great importance for managers.
  2. Provides a clear view that behavioral studies can be applied practically.
  3. Provides findings about various other disciplines including psychology, management, anthropology, sociology, and economics.
  4. 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

Of the three major schools of management thought, the quantitative management theory is the most modern. The quantitative management theory was not fully developed until World War II. During the war, managers, government officials, and scientists came together in England and the United States to help the military deploy its resources more efficiently and effectively.Decisions regarding troop, equipment, and submarine deployment were all solved through statistical and mathematical analysis.This theory is concerned with applying quantitative management tools focusing on decision making, economic effectiveness, mathematical models, and the use of computers. There are many branches of the quantitative approach and they include: Management Science, Operations Management and Management Informational Systems (Gareth et al, 2004).
(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.

Integrating Perspectives

• 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
• Subsystem
• Synergy
• System boundary
• Flow
• Feedback
• 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
Technology
• 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.

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