Unit 3: Evolution of Management Thoughts

Scientific Management Principles:

Meaning
The term scientific management is the combination of two words i.e. scientific
and management. The word "Scientific" means systematic analytical and
objective approach while "management" means getting things done through
others. In simple words scientific management means application of principles
and methods of science in the field of management. "Scientific management is
the art of knowing best and cheapest way". It is the art of knowing exactly
what is to be done by whom it is to be done and what is the best and cheapest
way of doing it. Scientific methods and techniques are applied in the field of
management i.e., recruitment, selection, training, placement of workers and
methods of doing work in the best and cheapest way.

The Scientific management can be studied under the following heads:

●        Primary principles of scientific management as evolved by F.W. Taylor.

●        Secondary principles of scientific management.

Definitions of Scientific Management

The main definitions of scientific management are as follows:

According to Fredrick Winslow Taylor, "Scientific management means

knowing exactly what you want men to do and seeing that they do it in the
best and the cheapest way."

According to Harlow Person, "Scientific management characterizes that form

of organisation and procedure in purposive collective effort which rests on
 principles or laws derived by the process of scientific investigation and
analysis, instead of tradition or on policies determined empirically and casually
by the process of trial and error."

According to Jones, "Scientific management is a body of rules, together with

their appropriate expression in physical and administrative mechanism and
specialized executives, to be operated in coordination as a system for the
achievement of a new strictness in the control and process of production."

According to Lioyd, Dodd and Zynch, In broad outline "Scientific management

seeks to get the maximum from methods, men materials machines and
money and it controls the works of production from the location and layout of
the worker to the final distribution of the product."

According to Peter F. Drucker, " Scientific management is the organized study

of work, the analysis of work into its simplest element and the systematic
improvement of the workers".

Characteristics / Features of Scientific Management

The main characteristics or features of scientific management are as follows:

●        Approach:
It is a systematic, analytical and objective approach to solve
industrial problems.
●        Economy:
The basis of scientific management is economy. For implementing
economy, all the unnecessary elements of production are eliminated and a
sincere effort is made to achieve optimum production at the minimum cost.
●        A
Definite plan: The main characteristic of scientific management is that
before starting and work there must be a definite plan before as and the work
is to be done strictly according to that plan.
●        Discards
old methods: It discards the age old methods of rule of thumb and hit
or miss approaches.
●        Emphasis:
It lays emphasis on all factors of production, men, material and
technology.
●        Techniques:
It implies scientific techniques in methods of work, recruitment,
selection and training of workers.
●        Attempts:
It attempts to develop each man to his greatest efficiency and
prosperities.
●        Method:
It attempts to discover the best method of doing a work at the
cheapest cost.
●        A
definite Aim: It is another main characteristic of scientific management.
Scientific management is the process of organizing, directing, conducting and
controlling human activities. Hence there must be a definite aim before the
managers, so that the human activities be organized directed conducted and
controlled for achieving that aim or aims.
●        Changes
in attitude: It involves a complete change in the mental attitude of
workers as well as the management.
●        A
Set of Rules: There must be a set of rules in accordance with the laid plan
so that the objectives can be achieved. According to F.W. Taylor, It is no
single element but rather the whole combination that constitutes the scientific
management.

Harmony not Discord

Taylor emphasized that harmony rather than discord should be obtained in
group action. Harmony means that a group should work as a unit and
contribute to the maximum. Within it there should be mutual give and take
situation and proper understanding.
Co-operation not Individualism
Scientific management requires that parts of industrial body co-operate with
each other, scientific management is based on mutual confidence, co-
operation and goodwill. It requires a complete mental revolution on the part of
both workers and management. Taylor suggested "Substitution of war for
peace, hearty and brotherly co-operation for contention and strife,
replacement of suspicious watchfulness with mutual confidence of becoming
friends instead of enemies."

The Development of each man to his greatest efficiency and

prosperity
In order to maximize production all possible efforts are made to increase the
efficiency of workers. Workers are selected according to the nature of work. It
includes scientific training, scientific allotment of work, implementation of
incentive wage plan above all, development of workers to the fullest extent for
themselves and also for the companies highest prosperity. Scientific
management leads to the development of each worker to his greatest
efficiency and prosperity.

Secondary
principles of
scientific
management: Sta
ndardization of
Tools and
Equipments
Another principle of scientific management is the standardization of tools and
equipments. it is essential for the improvement of quality of products and also
for bringing about uniformity in the production of standard goods. As a matter
of fact, standardization should be maintained in respect of tools, equipments,
materials, period of work, working conditions, amount of work, cost of
production etc.

Scientific Selection and Training of Workers

Scientific management requires a radical change in the selection and training
or workers. They must be selected on a scientific basis. The old traditional
and absolute methods of selection of workers have to be replaced by the
scientific and modern methods. Taylor suggested that the workers should be
selected on scientific basis taking into account their educational background,
health, work experience, aptitude, physical, strength and I.Q. etc. Further,
proper training by qualified persons should be given according to their
capabilities and nature of work.

Experimentation and Scientific Investigation

The success of scientific management depends upon experimentation and
investigation. It involves analytical study, observation research,
experimentation and investigation. It is only through constant experimentation
and scientific investigation that one can find out the best and most efficient
methods of doing a work. It has been rightly said that experimentation and
investigation is the life-blood of scientific management.
Incentive Wage System
Taylor for the first time advocated an incentive wage system in the form of
differential piece wages instead of time wages. Under differential piece
system two wage rates are prescribed, i.e. one lower and the other higher.
Those who are unable to perform standard work within standard time are paid
wages at lower rate per unit. On the contrary, those who attain standard or
even more within the standard time are paid wages at higher rate per unit.
Thus, there is considerable difference in wages between those who attain and
those who do not attain standards.

Scientific Allotment of Task

Another important principle of scientific management is the scientific allotment
of task. Every job must be entrusted to the best available man according to his
aptitude and training for that specific job. As a matter of fact, every person,
however efficient he may be, cannot perform all the jobs efficiently. One has
to carefully fit "the man to the job", and "the job to the man". The principle of
'right job to the right person' should be implemented. A worker may perform
his task most efficiently provided it suits his inclination aptitude taste and
capability.

Frank and Lillian Gilbreth:- The Gilbreth used motion picture films to study
hand and body motions. Their concern was on “economy of movement “They
emphasized on the use of technique and methods to help workers in
developing their fullest potential trough training ,improved tools ,working
environment and standardize work method.
Willing H Leffingwell:- Leffingwell developed five principles of effective work.
They are: - i) planning at work ii) scheduling the work iii) executing the work iv)
measuring the work and v) rewarding the workers.
Henry L Gantt: Gant refined the production control and cost control
techniques. Gantt invent a technique of scheduling work which is also called
Gantt Chart. He was the first theorist to suggest management to pay attention
to service rather than profits.
 Harrington Emerson: Emerson not only focuses on efficiency and
productivity of work but, on the overall objectives cost accounting and the
function of staff department.

Contribution and limitation of scientific management

Contribution of Scientific Management:

1.      It promoted production through efficiency techniques. Productivity increased
through assembly line production method. Gantt chart representing flow of
work in still widely used for scheduling work.
2.      It facilitates job design thorough specialization and standardization of work.
3.      It gave importance to screening, selection, training and compensation of
workers for improving efficiency.
4.      It introduced rational and systematic method to solve management
problems .It replaced “rule of thumb” method of doing work by scientific
method.
 Limitation of Scientific Management:
1.      Exploitation of Workers: Taylor’s Scientific Management put unnecessary
pressures on the employees to perform the work faster. Importance was give
to productivity and profitability. This resulted in exploitation of the employees.
Therefore, many employees joined trade unions. This resulted in mistrust
between management and employees.
2.      Problem of unity of command: Taylor used functional foremanship. So the
workers have to report to eight bosses. This breaks the principles of unity of
command, where the workers have to report to only one boss. Lack of unity
command can create confusion and chaos in the organisation.
3.      Mechanical approach: Taylor approach was a mechanical approach. He gave
too much importance to efficiency. He did not consider the human element.
Taylor considered workers as robots, which could speed up the work at any
cost.
4.      Problems of separation of planning and doing: Taylor said to separate
planning from doing. In reality we cannot separate planning from doing. The
planners should also be engaged in doing then only they are able to make
realistic plans for the organisation.
5.      Individualistic approach: Taylor’s scientific management gives too much
importance to individual performance and not to group performance. However,
the success of an organisation depends not only on individual performance of
workers, but also on the group performance.
6.      Wrong assumption: Taylor assumed that workers are motivated only by
financial gains. However, in reality workers are motivated not financial
incentives but also by social need and personal egos.
7.      Narrow Application: Taylor’s scientific management has narrow application. It
can be applied only when the performance of the workers can be measured
quantitatively. It can be applied only for factories where the performance can
be measured quantitatively. It cannot be used in the service sector because in
this sector the performance of a person cannot be measured quantitatively.
 Administrative Management Principles:
This theory is concerned with management principles and function. It provided
the process approach to management. The major contributors of this theory
are Henry Fayol, Max Weber and L Urwick. This theory focuses on functions
and skills that are need for management. It consists of:

1.      Administrative management Theory (Fayol ‘s Theory)

2.      Bureaucracy Theory (Max Weber Theory)

1. Henri Fayol Theory of Management (Administrative Theory )

Fayol developed theory of management. According to him managerial

excellence is a technical ability and can be acquired. He developed theories
and principles of management which are universally accepted and make him
universalistic. He was pioneer of the formal education in management. He
stated that, management can be studied in terms of the management process.
Management consists of:

1.      Managerial Skill: It includes: i. Physical Skill ii) Mental Skill iii) Moral Skill iv)
Educational Skill v) Technical Skill vi) Experience
2.      Management Functions: It includes: i) Forecast and Plan ii) Organize iii)
Command iv) Coordinate
v) Control
3.      Business Activities: It includes : i) Technical ii) Commercial iii) Financial iv)

Security v) Accounting

vi) Managerial
4.      Principle of management : (See below)

Henry Fayol, a French industrialist, offered fourteen principles of management

for the first time in 1916. During the period of 1920-40 in the U.S. many
authors did hard work in developing and testing various principles of
management. Today, there is a very lengthly list of management principles
and it is not possible to give an exhaustive lot of these management
principles. Here, we are giving some important principles of management.

Henry Fayol's Principle of Management

Following are the fourteen principles of management developed by the Henry

Fayol:

Division of Work
According to Henry Fayol under division of work, "The worker always on the
same post, the manager always concerned with the same matters, acquire an
ability, sureness and accuracy which increases their output. In other words,
division of work means specialization. According to this principle, a person is
not capable of doing all types of work. Each job and work should be assigned
to the specialist of his job. Division of work promotes efficiency because it
permits an organizational member to work in a limited area reducing the
scope of his responsibility. Fayol wanted the division of work not only at
factory but at management levels also.

Authority and Responsibility

Authority and responsibility go together or co-existing. Both authority and
responsible are the two sides of a coin. In this way, if anybody is made
responsible for any job, he should also have the concerned authority. Fayol's
principle of management in this regard is that an efficient manager makes
best possible use of his authority and does not escape from the responsibility.
In other awards when the authority is exercised the responsibility. In other
awards when the authority is exercised the responsibility is automatically
generated.

Discipline
According to Henry Fayol discipline means sincerity about the work and
enterprise, carrying out orders and instructions of superiors and to have faith
in the policies and programmes of the business enterprise, in other sense,
discipline in terms of obedience, application, energy and respect to superior.
However, Fayol does not advocate warming, fines, suspension and dismissals
of worker for maintaining discipline.

These punishments are rarely awarded. A well disciplined working force is

essential for improving the quality and quantity of the production.
Unity of Command
A subordinate should take order from only one boss and he should be
responsible and accountable to him. Further he claimed that if the unit of
command is violated, authority is undermined, disciplined in danger, order
disturbed and stability threatened. The violation of this principle will face some
serious consequences. In this way, the principle of unity of command provides
the enterprise disciplined, stable and orderly existence. It creates harmonious
relationship between officers and subordinates, congenial atmosphere of
work. It is one of the Fayol's important essential principle of management.

Unity of direction
Fayol advocates "One head and one plan" which means that group efforts on
a particular plan be led and directed by a single person. This enables effective
co-ordination of individual efforts and energy. This fulfils the principles of unity
of command and brings uniformity in the work of same nature. In this way the
principle of direction create dedication to purpose and loyalty. It emphasizes
the attainment of common goal under one head.

Subordination of individual interests to general interests

The interest of the business enterprise ought to come before the interests of
the praise individual workers. In other words, principle of management states
that employees should surrender their personnel interest before the general
interest of the enterprise. Sometimes the employees due to this ignorance,
selfishness, laziness, carelessness and emotional pleasure overlook the
interest of the organisation. This attitude proves to be very harmful to the
enterprise.
Fair Remuneration to employees
According to Fayol wage-rates and method of their payment should be fair,
proper and satisfactory. Both employees and ex-employers should agree to it.
Logical and appropriate wage-rate and methods of their payment reduces
tension and differences between workers and management, create
harmonious relationship and a pleasing atmosphere of work. Further Fayol
recommends that residential facilities be provided including arrangement of
electricity, water and facilities.

Centralization and Decentralization

There should be one central point in the organisation which exercises overall
direction and control of all the parts. But the degree of centralization of
authority should vary according to the needs of situation. According to Fayol
there should be centralization in small units and proper decentralization in big
organisation. Further, Fayol does not favor centralization or decentralization of
authorities but suggests that these should be proper and effective adjustment
between centralization and decentralization in order to achieve maximum
objectives of the business. The choice between centralization and
decentralization be made after taking into consideration the nature of work
and the efficiency, experience and decision- making capacity of the
executives.

Scalar chain
The scalar chain is a chain of supervisors from the highest to the lowest rank.
It should be short-circuited. An employee should feel the necessity to contact
his superior through the scalar chain. The authority and responsibility is
communicated through this scalar chain. Fayol defines scalar chain as "the
chain of superiors ranging from the ultimate authority to the lowest rank." The
flow of information between management and workers is a must. Business
opportunities must be immediately avoided of. so we must make direct contact
with the concerned employee. Business problems need immediate solution,
so we cannot always depend on the established scalar chain. It requires that
direct contact should be established. Order:
According to Fayol there should be proper, systematic and orderly
arrangement of physical and social factors, such as land, raw materials, tools
and equipments and employees respectively. As per view, there should be
safe, appropriate and specific place for every article and every place to be
used effectively for a particular activity and commodity. In other words,
principles that every piece of land and every article

should be used properly, economically and in the best possible way. Selection
and appointment of the most suitable person to every job. There should be
specific place for everyone and everyone should have specific place. This
principle also stresses scientific selection and appointment of employees on
every job. Equity
The principle of equality should be followed and applicable at every level of
management. There should not be any discrimination as regards caste, sex
and religion. An effective management always accords sympathetic and
human treatment. The management should be kind, honest and impartial with
the employees. In other words, kindness and justice should be exercised by
management in dealing with their subordinates. This will create loyalty and
devotion among the employees. Thus, workers should be treated at par at
every level.

Stability of use of personnel

Principle of stability is linked with long tenure of personnel in the organisation.
This means production being a team work, an efficient management always
builds a team of good workers. If the members of the team go on changing the
entire process of production will be disturbed. It is always in the interest of the
enterprise that its trusted, experienced and trained employees do not leave
the organisation. Stability of job creates a sense of belongingness among
 workers who with this feeling are encouraged to improve the quality and
quantity of work.

Initiative
Under this principle, the successful management provides an opportunity to its
employees to suggest their new ideas, experiences and more convenient
methods of work. The employees, who has been working on the specific job
since long discover now, better alternative approach and technique of work. It
will be more useful, if initiative to do so is provided to employees. In simple, to
ensure success, plans should be well formulated before they are
implemented.

Spirit of Co-operation (Spirit de crops)

In order to achieve the best possible results, individual and group efforts are
to be effectively integrated and coordinated. Production is a team work for
which the whole-hearted support and co-operation of the members at all
levels is required. Everyone should sacrifice his personal interest and
contribute his best energies to achieve the best results. it refers to the spirit of
loyalty, faithfulness on the part of the members of the group which can be
achieved by strong motivating recognition and importance of the members for
their valuable contribution, effective coordination, informal mutual social
relationship between members of the group and positive and constructive
approach of the management towards workers' welfare.

Contribution and Limitation of Administrative Management

Theory:

Contribution:
1.      This theory serves as the foundation for the study of management function of
planning, organizing, staffing , directing and controlling
2.      It serves as the guide for modern management behaviors. Limitations:
1.      This theory has limited application in the complex and dynamic environment.
Since it ignores the impact of environmental changes.

2.      This principle is mechanistic in nature, which cannot be applicable in modern

management.

3.      This theory ignores the importance of human behaviors.

Comparison between
Taylor’s and Fayol’s
Principles.
Max Weber (1864-1920), who was a German sociologist, proposed different
characteristics found in
effective bureaucracies that would effectively conduct decision-making,
control resources, protect workers and accomplish organizational goals. Max
Weber's model of Bureaucracy is oftentimes described through a simple set of
characteristics, which will be described in this article.
Max Weber's work was translated into English in the mid-forties of the
twentieth century, and was oftentimes interpreted as a caricature of modern
bureaucracies with all of their shortcomings. However, Weber's work was
indented to supplant old organizational structures that existed in the earlier
periods of industrialization. To fully appreciate and understand the work of
Max Weber, one therefore has to keep the historic context in mind, and not
"just" see his work as a caricature of bureaucratic models.
Below, some characteristics of the bureaucratic model are presented. Each
characteristic is described in relation to which traditional features of
administrative systems they were intended to succeed.
Fixed division of labor
The jurisdictional areas are clearly specified, and each area has a specific set
of official duties and rights that cannot be changed at the whim of the leader.
This division of labor should minimize arbitrary assignments of duties found in
more traditional structures, in which the division of labor was not firm and
regular, and in which the leader could change duties at any time.

Hierarchy of offices
Each office should be controlled and supervised by a higher ranking office.
However, lower offices should maintain a right to appeal decisions made
higher in the hierarchy.
This should replace a more traditional system, in which power and authority
relations are more diffuse, and not based on a clear hierarchical order.

Rational-legal authority
A bureaucracy is founded on rational-legal authority. This type of authority
rests on the belief in the "legality" of formal rules and hierarchies, and in the
right of those elevated in the hierarchy to posses authority and issue
commands. Authority is given to officials based on their skills, position and
authority placed formally in each position.
This should supplant earlier types administrative systems, where authority
was legitimized based on other, and more individual, aspects of authority like
wealth, position, ownership, heritage etc.
Creation of rules to govern performance
Rules should be specified to govern official decisions and actions. These
formal rules should be relatively stable, exhaustive and easily understood.
This should supplant old systems, in which rules were either ill-defined or
stated vaguely, and in which leaders could change the rules for conducting
the daily work arbitrarily.

Separation of personal from official property and rights

Official property rights concerning e.g. machines or tools should belong to the
office or department - not the officeholder. Personal property should be
separated from official property.
This should supplant earlier systems, in which personal and official property
rights were not separated to the needed extent.

Selection based on qualifications

Officials are recruited based on qualifications, and are appointed, not elected,
to the office. People are compensated with a salary, and are not compensated
with benefices such as rights to land, power etc.
This should supplant more particularistic ways of staffing found in more
traditional systems, where officials were often selected due to their relation
with the leader or social rank. Benefices such as land, rights etc. were also
common ways of compensating people, which was to be replaced by a
general salary matching qualifications.

Clear career paths

Employment in the organizations should be seen as a career for officials. An
official is a full-time employee, and anticipates a lifelong career. After an
introduction period, the employee is given tenure, which protects the
employee from arbitrary dismissal.
This should supplant more traditional systems, in which employees' career
paths were determined by the leader, and in which employees lacked the
security of tenure.

Max Weber viewed these bureaucratic elements as solutions to problems or

defects within earlier and more traditional administrative systems. Likewise,
he viewed these elements as parts of a total system, which, combined and
instituted effectively, would increase the effectiveness and efficiency of the
administrative structure.
The bureaucratic structure would to a greater extent protect employees from
arbitrary rulings from leaders, and would potentially give a greater sense of
security to the employees.
Additionally, the bureaucratic structure would create an opportunity for
employees to become specialists within one specific area, which would
increase the effectiveness and efficiency in each area of the organization.
Finally, when rules for performance are relatively stable, employees would
have a greater possibility to act creatively within the realm of their respective
duties and sub-tasks, and to find creative ways to accomplish rather stable
goals and targets.

Criticisms of Bureaucracy Theory

Bureaucratic organisation is a very rigid type of organisation. It does not give
importance to human relation. It is suitable for government organisation. It is
 also suitable for organisation s where change is very slow. It is appropriate for
static organization.
Bureaucratic organisation is criticized because of the following reasons:
1.      Too much emphasis on rules and regulation .The rules and regulations are
rigid and inflexible.
2.      No importance is given to informal groups. Nowadays, informal groups play
an important role in all business organization.
3.      Bureaucracy involves a lot of paper work. The result in lot of wastage of time,
effort and money.
4.      There will be unnecessary delay in decision making due to formalities and
rules.
5.      Bureaucratic model may be suitable for government organisation. But it is not
suitable for business organisation because business organisation believe in
quick decision making and flexibility in procedures.
6.      Too much importance is given to the technical qualification of the employees
for promotion and transfers. Dedication and commitment of the employee is
not considered.

7.      There is difficulty in coordination and communication.

8.      There is limited scope for human resources .(HR)

Behavioural Science Theory:

Behavioural Science Theory includes human relation and behavioural science
movement. It modified improved and extended the classical theory. Classical
theory concentrated on job content and management of physical resources,
where as behavioural science theory gave greater emphasis to man behind
the machine and stressed the importance of individual as well as group
relationship.
a.       Chester Barnad: Barnad argued that people join organization to satisfy
some of their personal objectives. Organization should therefore, satisfy such
personal goals, of employees, while pursuing organizational goals. An
organization can sustain and survive only when it strikes a balance between
their personal and organizational goals.
b.      Mary Parker Follett: Follet propounded democratic and participatory theory
of management. She pointed out the need for the concept of group and
association to be introduced in the practice of management. She advocates
the democratization of the work force.

c.       Elton W. Mayo (The Hawthorne Studies): The study conducted by Elton

Mayo and his associates between 1927-1932 at Western Electric’s Hawthorne
Plant dramatically impacted the prevailing thought of management .They
experimented the effect of illumination on work productivity. In that study, two
groups: i) controlled and ii) experiment groups were formed to find out the
effect of bright and dim light. The control group work without change in lighting
and the experiment group worked in fluctuating lighting condition. The result
showed that there is no relation between illumination and performance. In
other words, productivity of both groups increased. Thus, the study concluded
that the human element (more specifically relation among workers) is
important in the workplace. This study discovered the effect of group norms
and standard on individual behaviour. In another experiment Mayo revealed
that productivity improved by change in working conditions as length of rest
time, duration of work, presence or absence of free lunch etc.

d.      Maslow’s Hierarchy of Needs:

Maslow’s Hierarchy of Needs (Abraham Maslow): Maslow hypothesized that
within every human being, there exists a hierarchy of five needs.

a.       Physiological: Includes hunger, thirst, shelter, sex and other bodily needs.

b.      Safety: Security and protection from physical and emotional harms.

c.       Social: Affection, belongingness, acceptance and friendship.
d.      Esteem: Internal factor such as self respect, autonomy and achievement and
external factors such as status, recognition and attention.
e.       Self- actualization: Drive to become what one is capable of becoming:
includes growth, achieving one’s potential and self fulfillment.

Maslow separated the five needs into higher

and lower orders.

1.      Lower order needs: The needs that are satisfied externally and lower order
needs, such physiological needs, and safety needs.
2.      Higher order needs: The needs that are satisfied internally, such as social,
esteem and self- actualization needs.

e.       McGregor’s Theory X and Theory Y:

Douglas McGregor invented the Theory X and Theory Y, also known as “hard
guy, soft guy” approaches of managing people in the organization. It states
that, people’s commitment to work in organization is influenced by
assumptions managers make about people. One set of assumption is called
theory X, which describes employees with relatively negative view. And
another set of assumption is called theory Y, which describe employees
positively.
 McGregor’s Theory X and Theory Y

Theory X (Traditional View) Theory Y (Contemporary View)

1. The average person does not  inherently

1. The average person dislikes work inherently. dislike work but depending on condition
may find work to be satisfying or

punishment.

2. The average person will avoid work if he or she can.

2. People will exercise self-direction and self-

control to achieve organizational objectives

under certain conditions.

3. Most people must be coerced, controlled or 3.People will seek to attain their firm’s
threatened with punishment to get them to objectives if there are sufficient rewards
provided.

work       toward     the      achievement             of

organizational goals.

4. The average person prefers to direct to avoid 4.Under proper conditions the average

responsibility. individual will seek responsibility.

5. The average individual has relatively little ambition 5.The capacity to use imagination and

and wants security above all. originality is widely found in the people.

Contribution and Limitation of Behavioural Theory:

Contributions:
1.      This theory shifted the focus of management to the human side of
organization. The “rational man” of scientific became “social man” in the
human relation theory.
2.      Social Setting and groups are important for productivity. Workers respond to
pressures of informal work groups.

3.      Non-Financial rewards such as recognition and appreciation are important for

worker productivity.
4.      Needs influence behavior. Unfulfilled needs influence productivity in
organization.

5.      Theory Y assumptions get people’s commitment to work. Limitations:

1.      This Theory gives overemphasis on human variable.
2.      Human behaviour is complex and is studied from a variety of viewpoints. This
complicates the problem for a manager trying to use insights from the
behavioural sciences.

3.      Human behaviour cannot be predicted. This limits the practical application of

this theory.
4.      Focus on symbolic reward may not always be effective on motivating the
staffs.
The Decision Theory:
Herbert Simon, Luther Gulik and Lyndall Urwick have been the major
contributor to this management thought. This theory focuses on managerial
decisions. Decisions are made through rational choice among different
 alternative available. It is a choice making activity and choice determines our
activity.
Herbert Simon’s (One of the major contributors of decision theory) model is
based on two concepts
a.       Bounded rationality: rational decision making is constrained by limitation of
knowledge, resource etc.
b.      Satisficing: Maximization is not possible in decision making .Decision make
should “satisfice” and achieve the satisfactory outcome administrative man
always satisfice.
This theory advocates that decision making should be rational. The rational
approach to decision making should involves the following steps:
a.       Define the problems
b.      Identify relevant alternatives
c.       Evaluate the alternatives.
d.      Select the best course of action

e.       Implement the action

f.       Evaluate the result of the action Contribution and Limitation of

Decision Theory Contribution:
1.      In the field of management the decision theory provides guidelines for
manager to make decision and solve problems.
2.      This theory provides the “science” of improved organizational decision
making through quantitative methods.
3.      The theory makes the path for studying the process by which administrative
organization makes decisions.
Limitations:
1.      It does not take a total view of management. Its scope is limited.
2.      Sometimes it is difficult to claim whether a decision finalize the action or
commence the action.

Management Science Theory

The management science theory applies statistical and mathematical
technique to solve complex problem in business. It focuses on solving
technical rather than human behaviour problem. It used the techniques like
linear programming, economic order quantity (EOQ), game theory, queuing
theory etc to solve the problem. With the development of computer technology
and other source of communicate media there has been high impact of
management science theory in the business world to make decision and solve
complex problems.
Currently, there are three main branches of management science. They are:-
a.       Quantitative management: It utilizes mathematical techniques such as linear
programming, modeling, queuing theory, etc to help managers make right
decisions.
b.      Operation management (Operation Research): It provides managers with a
set of techniques that they can use to utilize an organization’s production
system to increase efficiency.

c.       Management Information System: It helps manager design information

systems that provide information about events occurring within and outside an
organization.

Contribution and Limitation of Management Science

Theory:
Contributions:
1.      This theory provides a new way to think about the complex managerial
problems of the future and prescribes basis to manage these problems
proactively.
 2.      This theory enhances managers understanding of overall organizational

processes. Limitations:
1.      This theory ignores the importance of people, relationships and other non-
quantifiable factors.

2.      The assumptions used for quantifying decision making do not match the real

world situations.
3.      This theory is not substitute of management functions. It prescribes a limited
number of tools for the specific use in solving problems.

The System Theory

During the 1960, management researcher began to analyze organization from
a systems perspective, a concept taken from physical science. A system is a
combination of two or more interrelated or interdependent parts in a whole
unit. A system is an established arrangement of components which leads to
attainment of particular objectives according to plan. The two basic types of
systems are closed system (which do not interact with their environment) and
open system (which dynamically interact with their environment).
Business Organization are perceive as open adaptive system. Any organism
can be considered as an energy system which has inputs, transformation
process and outputs. In general, the term system is applied to any activity or
any collection of facts, ideas or principles which are so arranged as to present
a united a whole. All operation of system will be methodical, thorough and
regular and above all as per plan to achieve set objectives. In business many
division and departments are organized on functional bases and all act as
coordinated whole to achieve the basic objectives of the firm. E.g. the inputs
for a university would be students, teaching materials, books, money and so
on. The transformation process would consist of lectures, seminars,
assignments, research, study, discussion, counseling etc. The output would
be educated, cultured and discipline individuals ready to enter the real world
of business or employment.
The major features of system are:
1.      Every system is always focusing on a goal.
2.      A particular system has some subsystem .Each subsystem interact with each
other.
3.      System may be open or close.
4.      There is always a unity of action in each and every subsystem to achieve an
overall system goal.

5.      System always has a boundary, which separate it from environment.

6.      System depends upon the flow of information in and outside its boundary.
7.      The emphasis is given to the effective feedback for system function control.