EVOLUTION OF MANAGEMENT THOUGHT

S.F.Chandra Sekhar PhD

Professor & Chairperson - HRSiva Sivani Institute of Management

http://www.ssim.ac.in

ELEMENTS OF HISTORY

Dates People Events Places

TRENDS

1880

1900

1920

1930

1940

1950

1960

Present

----------Classical

-------Human Relations

----------Systems

----------Contingency------

MANAGEMENT PERSPECTIVES OVER TIME

4

1930Humanistic Perspective 1990

1890Classical 1940

1950 2000Systems Theory

20002010The Technology-Driven Workplace

19902010The Learning Organization

1970Contingency Views 2000

1980Total Quality Management 2000

1940Management Science Perspective 1990

2010

1870

Exhibit 2.1, p.44

CLASSICAL/SCIENTIFIC MGMT SCHOOL

Originators : F.W.Taylor, Henri Fayol, Frank and Lillan Gilbreth

Emphasis : Science, rationality F.W.Taylor (Father of Scientific Management,

1911). Propounded Scientific Management Principles. Replacing Rules of Thumb with a true science of

work Achieving cooperation of human beings, rather

than chaotic individualism The scientific selection and progressive

development of workmen Working for maximum output rather than restricted

output.

HENRI FAYOL Father of Modern Operational Management Theory, 1841-

1925. French industrialist Propounded 14 universal management principles

Division of work for greater efficiency and productivity Authority and responsibility Discipline requires good superiors at all levels Unity of command – orders from one boss Unity of direction – commitment to same plan Subordination of individual to the general interest Remuneration -methods of pay should be fair and satisfactory to

all Centralization – extent to which authority is concentrated or

dispersed Scalar Chain – chain of superiors from highest to lowest Order – arrangement of things and people Equity – management should judge things and people with

fairness Stability of tenure – there ought to be proper training and settling

down of the people, freedom from interference. Initiative – to be encouraged to full Exspirit De Corps – to build good team spirit and morale among

workers.

HENRY GANTT

Colleague of Taylor. He replaced old piece rate system of pay with a day-rate system. Concept of bonus for those who met and exceeded the target set. He developed a type of bar chart to show the time relation between the task achieved in comparison too the optimum target set.

SAMPLE CHART

FRANK AND LILLIAN GILBRETH Proponents of Motion Studies, 1917. Defined a motion study as “dividing work into

most fundamental elements possible; studying these elements separately and in relation to one another; and from these studies elements, when timed, building methods of least waste.

MAX WEBER

“theory of bureaucracy,” thought an organization should be based on 5 principles: Formal authority of managers Jobs based on qualifications Authority and responsibility clearly defined Hierarchical positions Rules and SOPs control organization

CONCLUDING REMARKS

Achievements:Brought formal and rational approach to

management Improved working practices that resulted

in vast increase in productivity. Drawbacks :

Tasks were reduced to their simplest, smallest elements which led to boring, repetitive and monotonous.

Misconception that workers were only motivated by money.

HUMAN RELATIONS

Originators: E.Durkheim, M.P.Follet, C.Barnard, E.Mayo, D.McGregor, A.Maslow, F.Herzberg.

Emphasis : Micro Environment (needs, motivation and leadership ) Macro environment (social and technical systems analysis)

ELTON MAYO

1880-1949 Experimented and proved that the working

conditions on levels of productivity at Hawthorne Plant of Western Electric Company, Chicago (1927-32).

Physical conditions like lighting, working conditions, length of work period, effect the output of workers. When these conditions were altered, production continued to increase.

Interpretation : Close-nit social conditions among workers caused them to group together and produce output even in adverse conditions.

MAYO’S EXPERIMENTS

Illumination Studies - 1924-1927

Relay Assembly Test Experiments - 1927-1929

Relay Assembly Room #2 - 1928-1929

Mica Splitting Test Group - 1928-1931

Plant Interview Program - 1925-1932

Bank Wiring Observation Group - 1931-1932

MARY PARKER FOLLET & CHESTER BARNARD

MPF -1868-1933CB- 1938They stressed the importance of

group working which is superior to individual working.

Concepts like participation cooperation, communication, coordination, authority sharing were supported by them

DOUGLAS MCGREGOR

1960 Proposed assumptions about people in

general namely theory ’X’ and Theory ‘Y’.

Theory XPeople do not like work and try to avoid itSo managers control, coerce and threaten.People prefer to be directed, avoid

responsibility, wants security and have little ambition

Theory YPeople do not naturally dislike work ( work

is natural part of life) Internally motivated to reach objectives

committedCommitted to goals to the degree that

they receive personal rewardsSeek and accept responsibility under

favorable conditionsHave capacity to be innovative in problem

solvingPeople are bright , but under most

conditions their potential is underutilized.

THEORY J AND THEORY Z ?

I think you need to learn on your own Who is William Ouchi?.

SYSTEM SCHOOL OF MANAGEMENT THOUGHT

Originator : Not clearly known Emphasis : People, Structure, Technology

and environment as interacting elements which comprise an organization

Achievements: 1.Management considers all the four

variables as a cohesive whole and not as separate items.

2.Drawn attention to importance of planning which is vital for successful performance in organization

3.Achievement of plan depends on monitoring actual result against planned results and correcting any deviations

SYSTEMS THEORY

Organization is viewed as a managed systemManagement must interact with the environmentOrganizational goals must address effectiveness and efficiencyOrganizations contain a series of subsystemsThere are many avenues to the same outcomeSynergies enable the whole to be more than the sum of the

parts

Recognized the importance of the relationship between the organization and the environment

Does not provide specific guidance on the functions of managers

Key concepts

Limitations

Contributions - Unknown

CONTINGENCY SCHOOL Contributors : J.Woodward (1965),

Thompson (1967), Lorsch & Lawence (1970).

Emphasis : Management style and organization structure should reflect and change with the chancing environment the company finds itself in.There is no one best way of managementThe most appropriate method of

management will change overtime as circumstances of org.change.

Factors like size and technology influence organization structure.

Managers have always asked questions such as “

What is the right thing to do? Should we have a mechanistic or an organic structure? A functional or divisional structure? Wide or narrow spans of management? Tall or flat organizational structures? Simple or complex control and coordination

mechanisms? Should we be centralized or decentralized? Should we use task or people oriented leadership

styles? What motivational approaches and incentive programs

should we use?"

Mechanistic Organic

Individual specialization:Employees work separatelyand specialize in one task

Joint Specialization:Employees work together and coordinate tasks

Simple integrating mechanisms:Hierarchy of authority well-defined

Complex integrating mechanisms:task forces and teams are primaryintegrating mechanisms

Centralization:Decision-making kept as high as possible.Most communication is vertical.

Decentralization:Authority to control tasks is delegated.Most communication lateral

Standardization:Extensive use made of rules & StandardOperating Procedures

Mutual Adjustment:Face-to-face contact for coordination.Work process tends to be unpredictable

Much written communication Much verbal communication

Informal status in org based on size of empire

Informal status based on perceived brilliance

Organization is a network of positions, corresponding to tasks. Typically each person corresponds to one task

Organization is network of persons orteams. People work in different capacitiessimultaneously and over time

J.Woodward (1965) Supported from her research found that

technology effects on organizational structure Thompson (1967)

Long linked – production lines, differential departmentation

Mediating – the customer groups, like financial agencies, borrowers, advertising agencies

Intensive – involves application of a variety of technologies to the solution of problems in organization (ex. Space programme agencies, ICUs)

,

Lorsch & Lawence (1970). Relation between organization and

environment and successful organization continue to structure according to environmental demands Formality of structure Goal orientation (market targets, not goals) Term (short and long) IPR

CONTINGENCY PERSPECTIVE

Situational contingencies influence the strategies, structures, and processes that result in high performance

There is more than one way to reach a goalManagers may adapt their organizations to the situation

Identified major contingenciesArgued against universal principles of management

Not all important contingencies have been identifiedTheory may not be applicable to all managerial issues

Key concepts

Limitations

Contributions

economies of scale - reductions in the average cost of a unit production as the total volume produced increases