chapter two introduction to mgt

Rift valley university college, Department of Management

Lecture notes’: Introduction to Management

Compiled By: Zelalem L. Page | 1

CHAPTER 2

EVOLUTION OF MANAGEMENT THOUGHT

Application of management knowledge is as old as human civilization but development of

management thought and theory is relatively of recent origin. The construction and completion

of gigantic projects like Great Wall of China and Pyramids of Egypt, shows the use of

management abilities by the people of ancient world. At that time probably, there was a jungle of

management knowledge and people used it in their own way. Moses of Israel is advised by his

father-in-law to follow the principle of span of control. Socrates’ definition of management as a

skill separate from technical knowledge and experience is remarkably close to current

understanding of management.

The concept of management has been developed and practiced in early days in the Roman

Catholic Church, Government and military organization. The organizational hierarchy of

authority, functional specialization, staff specialists was operated by Roman Catholic Church in

a successful way. Management principles such as unity of command scalar principles, effective

communication had been plasticized in the administrative set up of army. Public administrators of

German and Austrian who are known as cumeralists designed the principles of functional

specialization, selection and training of administrators, simplification of administrative

procedures for effective administration of the state.

2.1 EARLY CONTRIBUTORS OF MANAGEMENT THOUGHT

(PRE-SCIENTIFIC MANAGEMENT ERA)

The period prior to F.W. Taylor was considered as management which was practices in terms of

highly individualistic art based on personal qualities. They laid down foundations for scientific

utilization on management. The early contributors to the management (Prescientific management

era) are: (a) Robert Owen, (b) Charles Babbage, (C) Henry Robinson Towne, (d) James Watt Jr.

and Mathew Robinson Boulton, and (e) Charles Dupin .

(a) Robert Owen (1771-1858); He has conducted experiments in the field of personnel management in

textile mills in Scotland during 1800-1828. He advocated that workers should be treated as human

beings. He has taken efforts to improve working conditions in the factory reduce working hours,




increase minimum wages, provide meal~ to employees, allocate education provision, housing and

other labor welfare facilities. His main contribution is that the effective and good personnel

management was essential part of manager's job since it pays dividends to the employer. Even though

he has specialized in the field of personnel but he has not designed any formal theory of management.

(b) Charles Babbage (1792-1871): He was a professor of Maths at Cambridge University from 1828 to

1839. He has suggested aspects like division of labor, work measurement, profit sharing and

engineering to improve the efficiency of management. He has invented mechanical calculator which

was called as "differential machine". He wrote a book titled "on the Economy of Machinery and

Manufactures" (1832). He has emphasized in improving efficiency through the application of maths

and science in the operation of factories.

2.2 Emergence (history) of management thought

To get the balance perspective of theory of management, it may be easier to place these concepts into

three categories.

(i) Classical or Traditional Approach

(a) Scientific Management Approach;

(b) Administrative Theory of Management

(c) Bureaucratic Organization Approach

(ii) Behavioral/Neo-classical Approach

(a) Human Relations Approach

(b) Behavioral Science Approach

(iii) Modern Management Approach

(a) Quantitative Approach

(b) System Approach

(c) Contingency Approach

These approaches can do little more than sketch some of the high spots in the emergence of

management thoughts.




1. Classical approach

The Classical Approach is one of the oldest approaches in management and is also known by 'various

names, i.e., Empirical, Functional and Management Process Approach. The classical theory represents

the traditional thoughts about organizations. It is based on the prototype industrial and military

organization. The theory concentrates on organization structure and their management. The classical

writers include Taylor, Fayol, Weber, Gullick, Urwick, Mooney and Reiley and others. They placed

emphasis on work planning the technical requirements, principles of management, formal structure,

and the assumption of rational and logical behavior. This theory incorporates three view points. (i)

Taylor view point, (ii) Fayol Administrative theory, (iii) Weber's Bureaucracy. All these writers

concentrated on structure and that is why their approach sometimes is characterized as 'structural

framework of organisation. F. W. Taylor insisted on application of scientific methods to the problems

of management. Fayol suggested fourteen principles of management and their universal application.

Max Weber introduced rationality in organization.

It is characterized by division of labour, specialization, structure, personnel, competence, etc.

Classical approach signifies from the following features:

(i) Organisation through division of labour, specialization, structure, scalar, functional processes and

span of control.

(ii) Management is the study of managerial experiences. If the experiences are studied and certain

generalizations are deducted there from, this \ will help the practicing managers.

(iii) Classical Approach treat organisation as a closed systems.

(iv) Formal organisation structure coordinate the activities .of the organisation.

They ignored the element of human beings.

(v) Principles and functions of management have universal application.

(vi) Scientific management emphasized efficiency of lower levels of organizations.

(vii) Work force were supposed to be rational economic force, they could be motivated through

economic incentives.

(viii) Classical approach emphasized on 'centralization of authority'.

(ix) This school is based on the close study of past managerial experience and cases, so formal




education and training is needed for developing managerial skills.

Limitations of Classical Theory

The classical approach suffers from several Limitations:

(i) The classical ignored the human relations aspects and undermines the role of human factor.

(ii) Classical viewed organisation as a closed system, i.e., having no interaction with external

environment.

(iii) Economic rewards assumed as the main motivator of work force. They have ignored non

monetary factors.

(iv) The classical principles are based on managerial experiences and their limited observations.

These are not empirical.

(v) Classical approach is based on over-simplified assumptions. Its principles are ambiguous and

contradictory.

(vi) This school emphasized on strict adherence to rules and regulations.

The scope for individual initiative is thus limited.

As discussed earlier, classical approach is based on three main pillows:

Scientific management, Administrative and Bureaucratic theory.

A. scientific management

Frederick Winslow Taylor is acknowledged as the "father of scientific management". Probably no

other person has had a greater impact on the early development of management. His experience as an

apprentice, a common labour, a foreman, a mechanic and then the chief Engineer gave opportunity to

know firsthand problems and attitudes of workers and to see the great possibilities for improving the

quality of management. Other contributors like Frank Gilbreth and Lilian Gilbreth Henry Gant,

Emerson also suggested the effective use of human beings in industrial organisation. They studied the

use of human beings as adjuncts to machines in performance of routine tasks. It was only Taylor who

gave concrete shape to the theory of scientific management.

He started his career as a labour in Midvale steel company in 1874 after discontinuing his study. After

that he was promoted as a mechanic, then he was appointed as the chief Engineer of the company

within six years. After obtaining the graduation in physics and mathematics and later on Master of

Engineering, he was employed by the Bethlehem steel company to increase output; which had been a

serious problem. He invented high speed steel cutting tools and spent most of his life as a consulting




Engineer. However, his major concern was to increase efficiency in production, not only to lower

costs but also to make possible increased pay for workers through their higher productivity.

Scientific management employs scientific methods to the problems of management. He defined

scientific management as the art of "Knowing exactly what you want men to do and then seeing that

how they do it in the best and the cheapest way' He advocated scientific task setting based on time and

motion study, standardization of materials, tools and working conditions, scientific selection and

training of workers and so on. But he was confined to management' at the top level. Most of his

experiments were carried out in Midvale steel company and Bethlehem steel company. The process of

initiation of experiment carried on Midvale steel company was based on 'time and motion study', and

further at Bethlehem also. However, he conducted experiments mainly on three functions to find out

the best way of working:

He explained the basic philosophy of management in the following terms:

1. Replacing rule of thumb methods with science,

2. Scientific selection and training of workers,

3. Co-operation of labour and management to accomplish work,

4. Working for maximum output, rather than restricted output.

5. A more equal division of responsibility between managers and workers.

Taylor adopted” differential piece rate plan” to motivate the workers for higher efficiency. According

to this plan, high wages in the form of incentive was provided to those workers who perform more

than standard work published the following works on the basis of experiments:

1. A Piece Rate System 1895

2. Shop Management 1903

3. On the Art of Cutting 1906.

4. Principles of Management 1911.

Later, he integrated his ideas into "The Principles of Scientific management," which was published

in 1911.

Mental revolution

Scientific management involves a complete mental revolution on the part of the working men

engaged in any particular establishment or industry, a complete mental change on the part of these

men as to their duties towards the work, towards their fellowmen, and towards their employers. It




involves equally: complete mental change on the part of those on the managements' front - the

foreman, the superiors, the superintendent, the owners, the Board of Directors- a complete mental

revolution on their part as to their duties towards their fellow workers in management, Taylor

advocated that without complete mental change on both the sides, scientific management does not

exist. The basic theme behind scientific management is to change the mental attitude of the workers

and the management towards each other. He advocated that:

(i) There is a change in the mental attitude of the workers, and

(ii) There is also a positive mental change in the attitude of management

He called the positive change in the attitude of workers and management as a revolution in

management. He called it 'Mental Revolution' which has three implications:

(i) Effort to increase in production;

(ii) Creation of mutual trust and confidence; and

(iii) Developing scientific attitude towards problems.

He suggested management to find out the best methods of doing various jobs and introduced

standardized materials, tools and equipment to reduced wastages. Management must create congenial

environment for optimum efficiency. Congenial environment should be created through the

cooperation of workers and management; and it is only the congenial atmosphere that brings out the

.maximum productivity.

Principles of Scientific Management

To put the philosophy of scientific management into practice, Taylor and his associates suggested the

following techniques:

1. Scientific· task planning: Scientific planning suggests series of separate operations and function

which are already determined by the management. How the task is performed? In what way? Who

performs it? What's the procedure of performing the task? It provides the answers to these

questions.

2. Functional foremanship: Taylor evolved functional foremanship to supervise and giving various

directions. In this system, eight persons direct the activities of workers, out of them four persons

are related with planning functions and the remaining four are concerned with operating level.

Functional foremanship involves the duties of: (i) Route clerk, (ii) Instruction and clerk, (iii) Time

and cost clerk, (iv) disciplinarian, (v) Speed boss, (vi) Inspector, (vii) Maintenance foreman, and




(viii) Gang boss.

3. Job Analysis: Work management has been suggested by Taylor. There is one best way of doing a

job which requires least movements, consequently less time and cost. He advocated the analysis of

work job with reference to:

(a) Time study: Every work/job requires standard time to carry out under Specific conditions.

Time study involves the determination of time a Movement takes to complete. .

(b) Motion Study: Motion study involves the study of movement of both the workers and machines

so as to identify wasteful movements and performing only necessary movements.

(c) Fatigue Study: The fatigue study shows the time and frequency of. Rest. On the basis of this,

management should provide appropriate rest at appropriate intervals to increase the efficiency of

workers.

4. Differential piece rate system: He advocated that there is direct link between, remuneration and

productivity for motivating employees. Taylor applied differential piece-rate system which is of

highly motivating technique. Different piece rate system adopted on workers :

(a) Low rate for those who fail-to achieve the standard output; and

(b) Higher rate for those achieving or exceeding the standard output.

The rate should be based on individual performance and on the position which he occupies. He

stressed for scientific determination of remuneration for workers.

5. Standardization: Standardization helps to simplify work, to ensure uniformity of operations and

to facilitate companions of efficiency. Standards are laid down regarding work, materials, tools

and techniques, time, working conditions, etc. These things should be fixed in advance on the

basis of observations.

6. Scientific selection and training: Workers should be selected on scientific basis, and their

education, experience; aptitude, strengths, etc.

7. Cooperation between management and workers: Scientific management succeeds through the

cooperation between management and workers. There should be a mental change to cooperate

with each other and to find out the way out of problem through scientific methods. Scientific

management depends upon the cooperation of these two. Taylor termed this cooperation as a

Mental Revolution.




Critical Evolution of Scientific Management

Scientific Management was more concerned about the activities at operation level in the organisation,

rather than total functions. Similarly, they emphasized physiological variables affecting human

behavior at work-place, both in terms at work efficiency and methods of motivation. As such, the

scientific management is more relevant to mechanization and automation-technical aspect of

efficiency. Even the mental change of both management and workers could be sought to achieve

maximum production. So, scientific management has been criticized broadly on the following fronts:

1. Scientific management is a mechanic aspect as it ignores the human element in the organisation.

Workers are treated as mere extensions of machines devoid of any feeling and emotion. Taylor and

his associates treated workers as factors of production, as there is no value of their social and

psychological needs.

2. Scientific management focused mainly on efficiency at the operation! Shop level, as a

consequence organisation or industry has the importance on the areas of operational level. In this

sense, it also denotes as a field of industrial engineering.

3. Scientific management emphasized that planning function should be

4. Separated from actual performance and should be given to specialists. This is impracticable.

Planning cannot be fully separated from doing, because you are doing on planned basis; and if

there is any change takes place, you also try to absorb these changes in work. Planning and doing

are two sides of the same job.

5. Scientific management advocated functional foremanship to bring specialization in the

organisation. But this is not applicable in practice as the worker cannot carry out instructions from

eight foremen. This violates the principles of unity of command.

6. The approach of scientific management is criticized that it advocates close Supervision and control

as to get maximum contribution. But this practice has limited use and only applicable in a limited

way at shop floor.

7. This approach also advocates that standards are laid down regarding everything in the

organisation. However, standardization helps to simplify of every task/activity brings out

uniformity in operations -and helps to increase productivity. • .




8. Workers are forced to do the standard work, and they are motivated to pay more if they achieve the

Standard. So in the name of increasing efficiency, workers are forced to speed up their functions,

i.e., exploitation. And this also is not a type of motivation. They perform the least standard, they

have degraded and vice-versa. They force the workers to work hard, and this is clearly

exploitation.

Finally, Taylor made a long-lasting contribution in management. Taylor was the first pioneer in

introducing scientific management reasoning to the discipline of management. Many of the

contributions provide the basis of modern management. Really, scientific management provides a

basic input to enliven the theories, approaches which give reasoning to management. Simply, Taylor

laid the foundation of modern management as a science.

(B) Administrative management Approach

It was Henry Fayol who, for the first time, studied the functions and principles of management in a

systematic manner. He defined management in terms of certain functions and then laid down

fourteen principles of management which are universally applicable.

Henry Fayol was a French mining engineer turned chief administrator in a large French mining and

metallurgical company. It is in four parts of which the first part deals with classification of business

activities as technical activities (manufacturing or production), commercial activities (buying,

selling and exchange), financial activities (raising and optimum use of capital), accounting

activities, security services, and managerial activities. Henry Fayol was the first person who

emphasized managerial organisation and process. Fayol tried to develop a theory of management.

He discussed the principles of management and recommended teaching in management.

Organizational Activities

Henry Fayol found that industrial activities could be divided into six groups, or classified all

operations into six ways:

i) Technical (production),

ii) Commercial (buying, selling and exchanging),

iii) Financial

iv) Accounting (balance sheet, costing, records)




Principles of Management

Fayol listed fourteen principles, based on his experience. However, the list is not exhaustive. They are

summarized in the perspective. He noted that these principles are flexible, and not absolute, and must

be usable regardless of changing and special conditions. These principles are as follows:

1. Division of labour: Fayol advocated division of work to take the advantage of specialization. This

is the specialization that managers consider necessary for efficiency in the use of labour. Fayol

applies this principle to all kinds of work.

2. Authority and responsibility: The authority and responsibility are related, with the later arising

from the former. He finds authority is being official and personal factor. Authority is generally

derived from manager's position and because of manager's personal competency to solve problems

in the organisation. Responsibility arises out of assigning the work.

3. Discipline: Discipline is the obedience, application, energy, behavior, and outward mark of respect

shown by employees. It also implies compliance with organizational directives and rules, orders

and instructions of superior and to co-operation with fellow workers. Fayol observed that

discipline is what leaders make it. He declared that discipline requires good superiors at all levels.

4. Unity of command: Unity of command means that employees should receive orders from one

superior only. The principle is useful in the clarification of authority-responsibility relationships.

It helps in maintaining disciplines, controlling their activities, fixing responsibility and not allows

overriding their track.

5. Unity of direction: Unity of Direction means one unit and one plan.' Each group of activities with

same objective must have one head and one plan. It relates to the organisation of the "body

corporate" rather then to individual. All activities of the organisation should be directed towards a

definite way.

6. Subordination a/individual to general interest: Organization’s interest is above the individual

interest. And when there is conflict between the two, the common interest must prevail or

management must reconcile them.

7. Remuneration: Employees should be paid fairly and reasonably in accordance with their

contribution. Remuneration and method of payment should be fair and afford the maximum

possible satisfaction to employees and employer.

8. Centralization: Fayol refers to the extent to which authority is-centralized or decentralized. This




pattern is determined by individual circumstances and should be based on optimum utilization of

all faculties of the personnel. Centralization refers to the reservation of authority at the top level.

But he referred that how much authority is dispersed or concentrated to achieve the objective

effectively.

9. Scalar chain: These should be clear line of authority from the top level to the lowest level, which,

while not to be departed from needlessly, should be short-circuited only in special circumstances

when its rigid following would be detrimental to the organisation. It is known as scalar chain

because all employees are attached to it in the relationship of superior and subordinate.

10. Order: This is essentially a principle of organisation in the arrangement of things and people.

Human as well as material resources should be in their prescribed proper place and order.

11. Equity: Employees should be assured to be treated on the basis of principle of equality, fairness

and impartiality. Loyalty and devotion should be elicited from personnel by a combination of

kindness and justice on the part of managers when dealing with subordinates.

12. Stability of Tenure: Stability should be provided to employees accustomed to new work and

succeeding in doing it will. Fayol finds that unnecessary tenure is both the cause and effect of bad

management.

13. Initiative: Employees should be provided an opportunity as to' develop and use initiative for

solving work-related problems. Initiative increases zeal and energy on the part of human beings.

Fayol exhorts managers to "sacrifice personal vanity" in order to allow to do it.

14. Esprit-de-corps: It emphasizes the need for team work and the importance of communication in

obtaining it. It implies to build team spirit among the employees so that they work with proper

mutual understanding as to make their respective contribution for achieving goals.

Fayol regarded the elements of management as its functions-planning, organizing, commanding,

coordinating and controlling. Fayol perceived that management should be viewed as a process

consisting of five elements:

(i) Planning; (ii) Organizing; (iii) Commanding; (iv) Coordinating (v) Controlling.

He observes that planning is the most important function and a failure to plan properly leads to

inefficiency in the organisation. Creation of organizational structure and commanding is necessary to

execute the plan. Coordination integrates the activities, controlling asks whether everything is

proceeding according to plan. Fayol had emphasized that these principle is applicable everywhere.




Since all the organizations require managing, it follows that formulation of a theory of management is

necessary for effective teaching of the subject.

C) Bureaucratic Organisation

The next important form of classical approach is bureaucratic approach of organisation. This

contribution has been given by a German sociologist Max Weber.? This particular form of

organisation is well known in government and military organizations. Every type of organisation

possesses some features of bureaucracy in some form; that is ranging between, 'Line organizations’ to

'free form organisation'. It aims at high degree of precision, efficiency, objectivity and rationality in

the organisation to make it more efficient. Weber's theory recognizes rational-legal authority as the

most important in the organisation. However, Weber's contention is that there are three types of

legitimate authority in the organisation': (i) Rational legal authority; (ii) Traditional authority; (iii)

Charismatic authority.

•Weber's contention is based on the display of rational legal authority. The model of bureaucracy

suggested by Weber is based on the following features:

(i) Division of work: It implies to divide and assign activities to various employees on the basis of

their abilities, skills and aptitudes to' get the benefit of specialization. Work should be

divided and assigned to each employee in the organisation to achieve high degree of

precision.

(ii) Hierarchy of authority: The bureaucratic structure is hierarchical in nature. All employees in

bureaucratic organisation are attached to hierarchy of authority which is rational and

legal in nature.

(iii) Rigidity in rules and regulations: Management standardizes operations and decisions.

Management prescribes procedure and set rules and regulations in bureaucratic

organisation to regulate and control working behaviour of employees. They must be in

compliance with procedures and framework of rules.

(iv) Impersonality: The decisions are entirely governed by rules and regulations and are totally

impersonal. The employees have very formal and functional in relationship among

them. They have the official relationship.

(v) Technical competence: Human resources in the organisation are employed or selected on the basis




of technical competence, that is, what they know about the job. It is on the basis of job

requirements; they are selected and placed in the organisation.

Weber's ideal bureaucracy has been designed to bring rationality and predictability of behavior in the

organisation. It reduces subjectivity, because people have impersonal and formal relationship and they

have to comply with rules and regulations. Hierarchy of authority also helps to maintain discipline.

Division of labour leads to specialization' and rationality brings effectiveness in decision making. This

form of organisation helps to gain the following advantages:

i) Rationally efficient form of organisation,

ii) Reduces subjective judgment,

iii) Specialization,

iv) Effective decision-making,

v) Consistency of actions,

vi) Allocation of task according to competency, and

vii) Maintaining discipline in the organisation.

However, this approach is not free from negative connotations. These are as follows:

i) Bureaucratic model does not consider informal organisation and does not prescribe personal

relationship; so, this is insensitive to the needs of the individual.

ii) That which is based on rationality perhaps finds very limited applicability in practice and often it

becomes the epitome of inefficiency.

iii) Bureaucratic organisation encourages red-tapism; inordinate delay in decision-making, goal

displacement and finally lack of initiative and positive motivation may result in inefficiency in such

organizations.

2. Behavioral or Neo- classical approach

The Neo-classical approach was evolved over many years; because it was found that classical

approach did not achieve complete production efficiency and workplace harmony. Managers still

encountered difficulties and frustrations because people did not always follow predicted or rational

patterns of behavior. Thus, there was increased interest in helping managers deal more effectively

with the 'people side' of their organisation. The neo-classical theory reflects a modification over

classical theories. The neo-classical approach recognizes the primacy of psychological and social




aspects of the workers as an individual and his relations within and among groups and the

organisation. It gained importance after the World War I, particularly in the wake of the "Hawthorne

experiments" at Western Electric Company by Elton Mayo during 1924 to 1932. So, Elton Mayo is

generally recognized as the father of the Human Relations Movement. The basic features of neo-

classical approach are:

i) The business organisation is a social system.

ii) Human factor is the most important element in the social system.

iii) It revealed the importance of social and psychological factors in determining worker

productivity and satisfaction.

iv) The behavior of an individual is dominated by the informed group of which he is a member.

v) The aim of the management is to develop social and leadership skills in addition to technical

skills. It must be done for the welfare of the workers.

Hawthorne experiment

A famous series of studies of human behavior in work situations was conducted at the Western

Electric Company from 1924 to 1933. In 1927, a group of researchers led by Elton Mayo and Fritz J.

Roethlisberger9 at the Harvard Business School were invited to join at Western Electric's Hawthorne

plant near Chicago. The studies began as an attempt to investigate the relationship between the level

of lighting in the workplace and the productivity of workers.

This initial experiment carried out over a period of three years sought to determine the effects of

different levels of illumination on worker's productivity. The results of the experiments were

ambiguous. When the test group's lighting conditions were improved, productivity tended to increase

just as expected, although the increase was erratic. But there was a tendency for productivity to

continue to increase when the lighting conditions were made worse, besides lighting was influencing

the worker's performance, as the work group was not able to maintain relationship between

illumination and productivity.

In the second set of experiments, a smaller group of six female telephone operators was put under

close observation and control. Frequent changes were made in working conditions such as hours of

work, lunch break, rest periods, etc. Again the results were ambiguous, as performance tended to

increase even when the improvements in working conditions were withdrawn. It was found that socio-

psychological factor exercised a greater influence on productivity and working conditions.




The third set of experiment attempted to understand how group norms affect group effort and output.

It was noted that the informal organisation of workers controlled the norms established by the groups

in respect of each member's output. The researcher concluded that informal work groups have a great

influence on productivity.

In the subsequent experiments, Mayo and his associates decided that financial incentives, when these

were offered, were not causing the productivity improvements. The researchers concluded that

employees would work hard if they believed management was concerned about their welfare, and

supervisors paid special attention to them. This phenomenon was subsequently labeled as the

Hawthorne Effect.

These findings concerning human behaviors at work focused on the worker as an individual and

considered the importance of caring for his feelings and understanding the dynamics of informal

organisation of workers. The view point of Hawthorne Effect thus gave birth to human relations

movement and provided the thrust toward democratization of organizational power structures and

participative management. It ushered in an era of organizational humanism.

(a) Human Relation Movement

Hawthorne experiment led to the development of human. Relations approach. It revealed the

importance of social and psychological factors in determining workers, productivity and satisfaction.

This movement is marked by informal grouping, informal relationship and leadership Pattern of

communication and philosophy of industrial humanism. The values of human relationists are

exemplified in the work of Douglas McGregor and Abraham Meslow.10

Human relation approach is a

social psychological approach and suggests business enterprise is a social system in which group

norms play a significant role. Financial incentive was less of a determining factor on a workers output

than were group pressure and acceptance and the concomitant security. It ushered an era of

organizational humanism: Managers would no longer consider the issue of organisation design

without including effects on work groups,

employees' attitudes, and manager-employee relationships. Elton Mayo, Mary Parker Follett and

Douglas McGregor, Roethlisberger, Dickson, Dewey and Lewin, etc were the main contributors that

led to the development of Human Relations Movement. The human relations movement marked by the

following factors:

1. This movement viewed organisation as a social system composed of numerous interacting parts, in




which groups norms exercise a significant influence on the behavior and performance of

individuals.

2. The movement emphasized that apart from economic needs, the employees have other social and

psychological needs such as recognition, affiliation, appreciation, self-respect, etc.

3. The group determines the norms of behaviour for the group member and thus exercises a great

influence on the attitudes and performance of workers. Group Dynamics at the workplace become a

major force.

4. The human relations approach was focused on teaching people-management skills, as opposed to

technical skills.

5. This approach strongly believed that there should be no conflicts or clashes in the organisation;

and if it arises, it must be removed through improvement of human relations in the

organisation.

6. They consider that informal organisation does also exist within the framework of formal

organisation and it affects and is affected by the formal Organisation.

7. According to his approach, managers should understand human relations.

Managers began thinking in terms of group processes and group rewards to supplement their former

concentration on the individual worker. The study of human behavior and human interactions has

assumed much Significance as a result of this approach. .

Criticism of Human Relations Approach

No doubt, this approach has provided many new ideas in managing the organisation, but this is not

free from certain limitations:

1. Human relations approach cannot be treated as complete package to deal with human being

effectively, because no attempt had been made for studying and analyzing human behavior

systematically and scientifically.

2. The human relations approaches undermine the role of economic incentives in motivation and

give excessive stress on social and psychological factors. In actual practice, financial incentive

plays a crucial rule to motivate employers.

3. The human relations approach presented a negative view of conflict between organizational and




individual goals. It views these conflicts as destructive. The positive aspects of conflicts such as

overcoming weaknesses and generation of innovative ideas are ignored.

4. The human relationists drew conclusions from Hawthorne experiments which were clinical

based, rather than scientific. The experiments focused on a particular group chosen for study

which did not represent the entire work force.

5. The human relations approach did not give adequate focus on work. It puts all the emphasis on

interpersonal relations and on the informal group.

It tends to overemphasize the socio-psychological aspects at the cost of structural and technical

aspects.

6. The human relations approach over emphasized on group Dynamics. But in actual practice,

group and group norms, in formal process exercise a light influence in organisation functioning.

Behavioral Science Approach

Mayo and his colleagues pioneered the use of the scientific method in their studies of people in the

work environment. .Later researchers were more rigorously trained in the social sciences (psychology,

sociology, and anthropology) and used more sophisticated research methods. Thus, these later

researchers became known as 'behavioural scientists'. Several sociologists and psychologists, e.g.,

A.H. Maslow, Douglas McGregor, Argyris, F. Herzberg, Rensis Likert, Kurt Lewin, Keith Davis and

others have made significant contributions to the development of this approach. Sciences. It focuses on

human behavior in organizations and seeks to promote verifiable propositions for scientific

understanding of human behavior in organisation behavior and stresses the development of human

beings for the benefit of both the individual and the organisation. It is broad based and consisted of

multiple concepts such as motivation, leadership, communication, group Dynamics, job redesign,

organizational change and development, impact of technology on jobs, etc. It highlights the group and

group relationships broadly which is the focus point of this theory to judge the group behavior in the

organisation. The main propositions of this approach are as follows:

1. Behavioral Science Approach is an inter-disciplinary approach and integrates the knowledge

drawn from different disciplines for the study of human behavior.

2. This approach advocates that an organisation is a socio-technical system which consists of

individuals and their interpersonal and social relationship with each other, and another side it




consists of various techniques, methods and procedures used by them for performing jobs.

3. Behavioral Approach recognizes individual differences in terms of their personality, goals, beliefs,

values and perception. Therefore, these matters are important for the organisation in case of

motivation.

4. Behavioral Approach -recognizes goal conflicts in the organisation and suggests reconciliation of

the goals of the individuals and the organisation for the effectiveness and efficiency of the

organization.

5. This approach emphasized on informal group which exercise a significant influence on the

attitudes, behavior and performance of employees.

6. Behavioral Science approach stressed upon groups, group behavior and group dynamics. Workers

have their own informal groups and they have their own norms, cultures and communication

system.

7. This is broad based and consists of multiple concepts such as motivation, leadership,

communication, change and development, group dynamics, jobs redesign; etc.

Behavioral approach provided a new insight to human behavior. It integrates the different knowledge

of different fields for the scientific study of human behavior for the benefits of both the individual and

the organisation.

3. Modern approach

Recent development took place in management theories after 1930. It perhaps Chester I. Bernard,

who in 1938, provided a comprehensive explanation of the modem view of management and

organisation. He considers the individual, organisation suppliers and customers as a part of the

environment. Ten years later Weiner's pioneering work on cybernetics developed concepts of systems

controlled by information feed back. It is important note that with the passage of time, the viewpoints

have been changed or modified. Each major contributor brought new knowledge, awareness, and tools

and techniques to understand the organisation better. In Modern era, we are rich than even before in

terms of our knowledge about approaches to understand organizations better.




1. Quantitative Approach

2. Systems Approach

3. Contingency Approach

A. Quantitative Approach

The approach gained the prominence after the world war II, when British formed the operational

research team-group of mathematicians, physicists and other scientists who were brought together to

solve problems and operations. These groups were expected to develop optimal decisions about

deployment of military resources. This approach is also known as 'Management Science Approach,

Mathematical Approach, Decision Theory approach, or Operations Research.

It is based on the approach of scientific management. It offers a systematic and scientific analysis

and solutions to the problems faced by managers. Today management Science Approach to solving a

problem begins when a mixed team of specialists from relevant disciplines is called to analyses the

problems and propose a course of action to management. The team constructs a mathematical model

to simulate the problem. The model shows, in symbolic terms, all the relevant factors that bear on the

problem and how they are interrelated. Eventually, management science team presents management

with a rational basis for making a decision. The techniques commonly used for solving mathematical

problems in decision-making are Linear programming, critical path method, PERT Games Theory,

Queuing theory, Break Even Analysis, etc. Simply, operation Research is regarded as the application

of scientific methods and mathematical models for solving problems. The basic postulates of

Operation Research Method are as:

i) Management is regarded as a problem-solving mechanism with the help of mathematical tools and

techniques.

ii) Management problems can be described in quantitative or mathematical symbols, data

and relationship.

iii) The different variables in management can be quantified and related to equation which can

be solved. .

iv) It covers decision making, system analysis, and some aspect of human behavior.

v) The team uses the basic mathematical models; operation research mathematical tools, simulation,

games theory, PERT, CPM to solve the problems.




Uses and Limitations of Quantitative Approach

The techniques of management science are a well-established part of the problem solving armory of most

large organizations. Management Science techniques are used in such activities as capital budgeting and

cash flow management, production, scheduling, development of product strategies, planning for human

resource development, optimum inventory levels, etc. The development of techniques has contributed

significantly in developing orderly thinking in management and the study of various problems and

talking optimum or best solutions to the problem. It provides a rational basis of decision making. It has

been used as a planning and controlling tool in management.

Quantitative Approach suffers from the limitations in spite of widespread use of many problems:

i) This approach is focused on decision-making and ignored other functions of management.

ii) Management Science Approach are too complicated for ready understanding the concept and

language of the problem and implementation.

iii) Management Scientists feel that they have not achieved their full potential of solving management

problems because of their remoteness from and lack of awareness of the problem and constraints

actually faced, by managers.

iv) it does not consider the human element in the organisation.

v) The approach is based on unrealistic assumptions, e.g., all related variables are measurable and

have a functional relationship.

On the whole, due to these constraints, the quantitative approach has very limited application that only

in respect of decision-making and problem-solving.

B. Systems Approach

In the nineteenth century, modem theories of organisation and management have been developed.

The perspective here is to provide a systems view point In 1951, Weiner's pioneering work on

cybernetics developed concepts of systems control by information feed back. He described on

adaptive system mainly dependent upon measurement and correctional through feedback. The

Systems Approach to management attempts to view the organisation as a unified, purposeful system

composed of interrelated parts. The systems Approach gives managers a way of looking at an

organisation as a whole and a part of the larger environment. Systems Theory tells us that the activity

any part of an organisation affects the activity of every other part. It is integrating approach which

considers the management in its totality. A system is defined as the assemblage of things connected




or interdependent, so as form a complex unity, a whole composed of parts in orderly arrangement

according to plan. This has been defined as 'an organized of complex whole, an assemblage or

combination of things or parts forming a complex unitary whole.23

The world is considered to be a

system in which various nation economy are sub-systems. In turn, each national economy is

composed of various industry, each industries is composed of firms, and of course, each, firms is

composed of various components such as production, finance, marketing, etc. Thus, each system

consists of several such systems and, in turn, each sub system further is composed of various

components or sub-units; which are interrelated or interdependent each other. The main elements of

Systems Approach are as:

(i) An organisation is a unified and integrative system consisting of several interrelated and

interdependent parts. It gives a manager a way looking at the organisation as a whole.

(ii) A system is considered an open system because it interacts with environment. All

organizations interact with their environment. It gets various resources from the

environment and transforms them into out· puts desired by the environment.

(iii) The parts that make-up the whole of a system are called sub-systems.

And each system in turn may be a sub-system of a still larger whole. All these sub-systems are

functionally interacting and interdependent.

(iv) Each system has a boundary that separates it from its environment. The boundaries are more

flexible in an open environment. It maintains the clear and proper relationship between the

system and its environment. The system boundary is rigid in closed system. The boundary of a

system classifies it into two parts: (i) open system, (ii) closed system.

(v) Management as a system is dynamic which suggests that equilibrium in the organisation is always

changing. The survival arid growth in a dynamic environment demands an adaptive system

which can continuously adjust to changing environment. Management tends to bring changes in

the sub-systems of the organisation to cope up with the environmental challenges.

(vi) Systems Approach follows the law of synergy. Synergy means that the whole is greater than the

sum of its parts. In organizational terms, it means that as separate departments within an

organisation cooperate and interact, they become more productive than if each had acted in

isolation. The parts of a system become more productive when they interact with each other.

(vii) Feedback is the key to system controls. As operation of the system proceeds, information is




feedback to the appropriate people or perhaps to a computer so that the work can be assessed and, if

necessary, corrected. (Viii) Management as a discipline draws and integrates knowledge from various

disciplines and schools of thought like psychology, sociology, anthropology, mathematics, operation

research, and so on.

Evaluation: System theory calls attention to the dynamic and interrelated nature of organizations and

the management task. Thus, systems theory provides understand unanticipated consequences as they

may develop.

In spite these significant points, the systems approach are not free form limitations:

(i) The systems approach cannot be considered a unified theory of organisation. This is in no way a

unified body of thought. Systems approach fails to take a comprehensive study to analyze the

organizations from different angles.

(ii) The systems approach has failed to specify the nature of interactions and inter dependencies

between an organisation and its external environment. (iii) The systems approach has failed to

spell out the precise relationship between various sub-systems.

(iv) The systems approach does not provide action framework applicable to all types of organizations

(v) The systems approach does not offer any tools or techniques for analysis and synthesis of the

system and environment.

C. Contingency Theory

Contingency Approach shares a common ancestry with socio-technical system theories. The latest

approach of management which integrates the various approaches is known as 'contingency' or

'situational' approach. 'Charles Kindleberger specified upon what it depends, and in what ways. "It

depends' is an appropriate response to the important questions in management. Management theory

attempts to determine the predictable relationships between situation, actions, and outcomes. It focuses

on the interdependence of the various factors involved in managerial situation. The early beginnings

can be found in the studies of Burns and Stalker in 1950 which examines what happens to the

behaviour of organisation members as a consequence of technological changes. Joan Woodward

analyzed the influence of technology on organisation structure. She found that span of control;

interpersonal relationships, participation and other structural aspects differed to technology used.

Lawrence and Lorsch (1967) attempted to explain the internal states and processes is an organisation




according to their external environment. Jay Galbraith revealed that the amount of information

required by an organisation depended on the level of uncertainties, interdependence and adaptation

mechanisms. Tom Bums, G.W. Stalker, Joan Woodward, James Thompson, Paul Lawrance, Jay

Galbraith and other pioneers made significant contribution to the contingency theory.

The contingency approach was developed by managers, consultants, and researches who tried to apply

the concepts of the major schools to real-life situations. They found that methods that were effective

in one situation would not work in other situations.

According to contingency approach, then, the task of managers is to identify which technique will, in

a particular situation, under particular circumstances, and at a particular time, best contribute to the

attainment of management goals. The basic theme of the contingency approach is that there is no

single best way of managing application in all situations. The application of management principles

and practices should be contingent upon the existing circumstances. Functional, behavioral,

quantitative and systems tool of management should be applied situationally. Management should

deal with different situations in different ways. There cannot be a particular management action or

design which will be appropriate for all situation .Contingency Approach is based on generalizations

of 'if and 'then'. 'If” represents environmental variables which are interdependent. 'Then' represents

management variables which are dependent on the environment.

The main features of contingency approach are as:

(i) The contingency approach stresses that there is no one best style of leadership which will suit

every situation. The effectiveness of leadership style varies from situation to situation.

Therefore, according to this approach, management is entirely situational.

(ii) Contingency Approach is action-oriented as it is directed towards the application of systems

concepts and the knowledge gained from other approaches. The contingency approach builds

upon this perspective by following in detail on the nature of relationships existing between these

parts.

(iii) Contingency theory attempts to determine the predictable relationships between situations, actions

and outcomes.

(iv) Management should match or 'fit' its approach to the requirements of the particular situation.

Management has to exercise the action subject to environmental changes.

(v) Contingency approach provides significant contribution in organizational design. It suggests that




no organizational design can be suitable for all situations, rather, the suitable design is one

determined, keeping in view the requirements of environment, technology, risk and people.

Contingency approach is useful orientation in management. It emphasizes the multivariate nature of

organizations- and attempts to understand how organizations operate under varying conditions in

specific circumstances. This theory suggests organisation design and actions which are most

appropriate for specific situation.

Critical evaluations

The primacy of contingency approach is challenged by several theorists. They argue, for one thing,

that the contingency approach does not incorporate all the aspects of systems theory, and they hold

that it has not yet developed to the point of which it can be considered a true theory. Critics also argue

that there is really not much that is new about contingency approach. For example, even the classical

theorists such as Fayol cautioned that management principles must be flexible.

The contingency approach is also criticized on the ground that it is totally a practical approach without

being supported by required theoretical and conceptual framework. The managers experience

difficulty in analyzing situations in the absence of needed research devices and generalizations for

understanding behavior of the situation. Some of the classical theorists forgot the pragmatic cautions

of Fayol and others. Instead, they tried to come up with "universal principles" that could be applied

without the "it depends" dimension. Managers applied the absolute principles by these theorists.

Lastly, the considerations of environmental factors are necessary to develop an organizational design

and action. But, managers are certainly unaware of the environmental changes and could not analyze

the environmental factors properly. The theme of contingency approach that management must be

aware would work best in a particular situation in the absence of certain methods, models and

techniques that are relevant to appraise situation.