Management thoughts

Classical approach
• The main belief of this theory is workers only
have physical and economic needs.
• It doesn’t take into account social needs and job
satisfaction.
• Instead it advocates a specialisation of labour,
centralised leadership and decision making, and
profit maximization.
Contributors
The concept of scientific management was
introduced by Frederick Winslow Taylor (1856-
1915) in USA in the beginning of 20th century.

This concept was further carried on by Frank and

Lillian Gilbreth, hanry gantt, George Berth.

Scientific management is concered with knowing

exactly what employees must do in the organization
and then finding out that they are doing it in the
best and cheapest way.
• Taylor emphasized upon solving the managerial
problems in the scientific way hence he is called
as the “Father of scientific Management”

The Principles of scientific Management

1. Science not rule of thumb : this method rules
out the “trial and error methods” or “hit and
miss method”. Scientific method involves
finding out the best possible way and practice
to complete a work. And here emphasis is upon
standardisation.
2.Harmony not discord : this principle involves
maintaining harmony in between management and
workers I place of discord.
3. Cooperation not individualism: this principle
suggests that management should encourage
constructive suggestion from the workers and
reward the suggestions which helps in cost
reduction.
4. Development of each and every person: this
principles emphasises that there should be
scientific selection of workers, and work must be
assigned to them as per their physical, mental and
intellectual capabilities.
Development of workers requires training at the
workplace.
Techniques of Scientific management
F.W. Taylor has given the following techniques of
scientific management.

❑Functional foremanship
❑Standardization and simplification of work
❑Work study
❑Differential piece wage system
Functional foremanship
Taylor has proposed functional foremanship
technique for supervising workers.
✓functional foremanship means each worker is
going to be supervised by 8 supervisors.

✓4 supervisors supervising the planning asopect

and
✓Other 4 supervising the production work.
Functions of supervisors were as follows

Route Clerk : determining the routes through which raw

materials have to pass.
Instruction card clerk: setting time table for performing
different operations of a job and specifying materials
and labour costs of each operation.
Disciplinarian: maintaining the proper discipline in the
workshop.
Speed boss: maintaining the planned speed of
production
Inspector: maintaining production quality.
Maintenance foreman: maintaining machines tools etc.
Gang boss: arranging machines tools materials etc
required for performing jobs.
❑Standardization and simplification of work
Standardization and simplification of work refers to
setting standards for every organizational activity to
maximize out puts and making work as simple as
possible by eliminating unnecessary diversity of
products.
❑Work study
It refers to the systematic, objective and critical
evaluation of work with the aim of identifying how
the work can be performed in the most desirable
way by standardizing and simplifying it.
Types of studies that have been undertaken
• Time study: the movement which takes
minimum time, is the best possible way to
accomplish the task.
• Motion study: eliminating wasteful
movements and performing only necessary
movements.
• Fatigue study: employees get mental as well
as physical fatigue , this study indicates the
amount and frequency of rest required in
completing the task.
❑Differential piece wage system
It is the system of wage payment in which
workers who achieves or exceeds production
target gets wages at higher end.
Contributions of Henry Gantt
Henry Gantt (1861-1919), a of USA is a post graduate
mechanical engineer.
Then he joined Midvale Steel Company, where Taylor
was working and Gantt written a book titled “work,
Wages and Profits”.
his contributions are as follows
❖Development of Gantt Chart: A Gantt chart is a
project management tool that illustrates work
completed over a period of time in relation to the
time planned for the work. A Gantt chart can include
the start and end dates of tasks, milestones,
dependencies between tasks, assignees, and more.
❖This chart has modern variation in the forms of
Critical Path Method (CPM) and Program Evaluation
and Review Technique(PERT)
❖Industrial Efficiency: according to Gantt industrial
efficiency can be increased only by the
application of scientific analysis to all aspects of
the work in progress. Accidents should be
eliminated.
❖Task and Bonus system: Gantt introduced the
concept of bonus on achieving the production
targets, he also introduced bonus for the
supervisor, based on the target achievement of
workers working under them and how well they
taught their workers to improve performance.
❖Social Responsibility of Business: Gantt believed
that business have obligations to the welfare of
the society in which they operate.
Contributions of Frank and Lillian Gilbreth :this
husband wife team of science and engineering
were engaged in various types of experiments to
contribute to the scientific management
movement, their major contributions are as follows
1. Motion study : .they conducted various studies to
identify movement required in doing work so as to
determine requirement of the least possible
movements in the work performance.
2. Fatigue Study : they conducted experiments to
identify the time by which workers felt fatigue and
their efficiency used to get down, they introduced
suitable time intervals of rest and rest period of
the workers were established.
3. Humanistic Approach : they advocated
humanistic approach towards workers. According
to them, the ultimate aim of scientific
management was to help workers to reach at their
full potential as human beings.
 Critical analysis of scientific management
• he scientific management theory focused
mainly on the financial and physical needs of
the workers, while ignoring the ego needs and
social status of the workers. Requires huge
capital: Setting up of work study, planning
department and training of workers involves
considerable amount of investment.
• Henry Fayol, also known as the Father of
Modern Management Theory, gave a new
perception on the concept of management.
He introduced a general theory that can be
applied to all levels of management and every
department. He envisioned maximising
managerial efficiency. Today, Fayol’s theory is
practised by the management to organise and
regulate the internal activities of an
organisation.
• The fourteen principles of management
created by Henri Fayol are explained below.
• 1.Division of Work
• Henri believed that segregating work in the
workforce amongst the workers will enhance
the quality of the product. Similarly, he also
concluded that the division of work improves
the productivity, efficiency, accuracy and
speed of the workers. This principle is
appropriate for both the managerial as well as
a technical work level.
• 2.Authority and Responsibility
• These are the two key aspects of
management. Authority facilitates the
management to work efficiently, and
responsibility makes them responsible for the
work done under their guidance or leadership.
• 3.Discipline
• Without discipline, nothing can be
accomplished. It is the core value for any
project or any management. Good
performance and sensible interrelation make
the management job easy and
comprehensive. Employees’ good behaviour
also helps them smoothly build and progress
in their professional careers.
• 4.Unity of Command
• This means an employee should have only one
boss and follow his command. If an employee has
to follow more than one boss, there begins a
conflict of interest and can create confusion.
• 5.Unity of Direction
• Whoever is engaged in the same activity should
have a unified goal. This means all the people
working in a company should have one goal and
motive which will make the work easier and
achieve the set goal easily.
• 6.Subordination of Individual Interest
• This indicates a company should work unitedly
towards the interest of a company rather than
personal interest. Be subordinate to the
purposes of an organisation. This refers to the
whole chain of command in a company.
• 7. Remuneration
• This plays an important role in motivating the
workers of a company. Remuneration can be
monetary or non-monetary. Ideally, it should
be according to an individual’s efforts they
have put forth.
• 8.Centralization
• In any company, the management or any
authority responsible for the decision-making
process should be neutral. However, this
depends on the size of an organisation. Henri
Fayol stressed on the point that there should
be a balance between the hierarchy and
division of power.
• 9.Scalar Chain
• Fayol, on this principle, highlights that the
hierarchy steps should be from the top to the
lowest. This is necessary so that every employee
knows their immediate senior also they should be
able to contact any, if needed.
• 10. Order
• A company should maintain a well-defined work
order to have a favourable work culture. The
positive atmosphere in the workplace will boost
more positive productivity.
• 11. Equity
• All employees should be treated equally and
respectfully. It’s the responsibility of a manager
that no employees face discrimination.
• 12.Stability
• An employee delivers the best if they feel secure in
their job. It is the duty of the management to offer job
security to their employees.
• 13. Initiative
• The management should support and encourage the
employees to take initiatives in an organisation. It will
help them to increase their motivation and morale.
• 14. Esprit de Corps
• It is the responsibility of the management to motivate
their employees and be supportive of each other
regularly. Developing trust and mutual understanding
will lead to a positive outcome and work environment.
• In conclusion, the 14 Principles of Management the
pillars of any organisation. They are integral for
prediction, planning, decision-making, process
management, control and coordination.
 Comparison of Taylor and Fayols contribution
Basis of comparision Taylor Fayol

perspective Shop floor level Higher management level

Focus Efficiency through work Overall efficiency by

simplification and observing certain
standardization principles

Orientation Production and Managerial functions

engineering

Results Scientific observation and Personal experiences

measurement translated into universal
truth

Overall contributions Basis for accomplishment Systematic theory of

on the production line management
 Bureaucratic
• Max Weber's theory of bureaucracy is an approach that
proposes a specific way to manage an organization. It
proposes that the most appropriate way to run an
organization is to structure it into a rigid hierarchy of
individuals governed by strict rules and regulations.
Max Weber listed six major principles of the bureaucratic
form as follows:
1.A formal hierarchical structure – In a bureaucratic
organization, each level controls the level below it. Also, the
level above it controls it. A formal hierarchy is the basis of
central planning and centralized decision-making.
2.Rules-based Management – The organization uses rules to
exert control. Therefore, the lower levels seamlessly execute
the decisions made at higher levels.
3.Functional Specialty organization – Specialists do the
work. Also, the organization divides employees into units
based on the type of work they do or the skills they possess.
4.Up-focused or In-focused Mission – If the mission of the
organization is to serve the stockholders, board, or any other
agency that empowered it, then it is up-focused. On the
other hand, if the mission is to serve the organization itself
and those within it (like generating profits, etc.), then it is in-
focused.
5.Impersonal – Bureaucratic organizations treat all
employees equally. They also treat all customers equally and
do not allow individual differences to influence them.
Employment-based on Technical Qualifications – Selection
as well as the promotion of employees is based on technical
qualifications and skills.
 criticism
• The rules are inflexible and rigid. Further, there is
too much emphasis on these rules and
regulations.
• Informal groups do not receive any importance.
In current times, informal groups play a huge role
in most business organizations.
• Typically, bureaucracy involves a lot of paperwork
which leads to a waste of time, money, and also
effort.
• The rules and formalities lead to an unnecessary
delay in the decision-making process.
• While Government organizations can benefit
from a bureaucratic structure, business
organization need quick decision-making and
flexibility in procedures. Therefore, it is not
suitable for the latter.
• While the technical qualifications of the
employee is an important aspect of his
promotion, a bureaucratic organization does not
consider the employee’s commitment and
dedication.
• There is limited scope for Human Resource
management.
• Coordinating and communicating is difficult.
 Behavioural Approach

Behavioral management theory is a management

concept that studies how productivity in an
organization can be managed by concentrating on
the things that motivate the workforce.
 The Hawthorne Experiments
• This experiment was conducted from 1924to
1932
• Elton Mayo played a major role in this
experiment
• It was conducted in 4 phases
1. Illumination Studies
2. Relay Assembly Test Room Experiment
3. Bank-Wiring Tests
4. The Interview Process
Illumination Studies
• There were two groups test group and control group
• The basic idea was to vary and record levels of
illumination in a test room with the expectation that as
lighting was increased, productivity would too. In another
test room, illumination was decreased, with the
correlating expectation that efficiency would decrease.
• When production increased in each test period,
researchers looked to other factors such as increased
supervision and a sense of competition that developed
between the test and control groups. But the one
conclusion the impressive team of industrial specialists
and academics discovered was the lack of a consistent
correlation between lighting levels and product output. No
further tests were planned originally, but researchers were
surprised at the unanticipated results.
In order to observe the impact of these other
factors, a second set of tests was begun before
the completion of the illumination studies on
April 25, 1987. The relay-assembly tests were
designed to evaluate the effect rest periods and
hours of work would have on efficiency.
 Relay Assembly Test Room Experiment
• n one of the studies, researchers chose two women as test
subjects and asked them to choose four other workers to join
the test group. Together the women worked in a separate
room over the course of five years (1927–1932) assembling
telephone relays.
• Output was measured mechanically by counting how many
finished relays each worker dropped down a chute. This
measuring began in secret two weeks before moving the
women to an experiment room and continued throughout the
study. In the experiment room they had a supervisor who
discussed changes with their productivity. Some of the
variables were:
• Giving two 5-minute breaks (after a discussion with them on
the best length of time), and then changing to two 10-minute
breaks (not their preference). Productivity increased, but when
they received six 5-minute rests, they disliked it and reduced
output.
• Providing food during the breaks.
• Shortening the day by 30 minutes (output went up);
shortening it more (output per hour went up, but
overall output decreased); returning to the first
condition (where output peaked).
• Changing a variable usually increased productivity,
even if the variable was just a change back to the
original condition. However, it is said that this is the
natural process of the human being adapting to the
environment, without knowing the objective of the
experiment occurring. Researchers concluded that the
workers worked harder because they thought that they
were being monitored individually.
Bank-Wiring Tests

• The purpose of the next study was to find out how

payment incentives would affect productivity. The
surprising result was that productivity actually
decreased. Workers apparently had become suspicious
that their productivity may have been boosted to justify
firing some of the workers later on.[11] The study was
conducted by Elton Mayo and W. Lloyd
Warner between 1931 and 1932 on a group of fourteen
men who put together telephone switching equipment.
The researchers found that although the workers were
paid according to individual productivity, productivity
decreased because the men were afraid that the
company would lower the base rate..
• Detailed observation of the men revealed the
existence of informal groups or "cliques" within
the formal groups. These cliques developed
informal rules of behavior as well as mechanisms
to enforce them. The cliques served to control
group members and to manage bosses; when
bosses asked questions, clique members gave the
same responses, even if they were untrue. These
results show that workers were more responsive
to the social force of their peer groups than to
the control and incentives of management
 The Interview Process
• Under Mayo and Roethlisberger’s direction, the Hawthorne experiments
began to incorporate extensive interviewing. The researchers hoped to
glean details (such as home life or relationship with a spouse or parent)
that might play a role in employees’ attitudes towards work and
interactions with supervisors. From 1928 to 1930 Mayo and
Roethlisberger oversaw the process of conducting more than 21,000
interviews and worked closely training researchers in interviewing
practices.
• Mayo and Roethlisberger’s methodology shifted when they discovered
that, rather than answering directed questions, employees expressed
themselves more candidly if encouraged to speak openly in what was
known as nondirected interviewing. “It became clear that if a channel
for free expression were to be provided, the interview must be a
listening rather than a questioning process,” a research study report
noted. “The interview is now defined as a conversation in which the
employee is encouraged to express himself freely upon any topic of his
own choosing.”
Interviews, which averaged around 30 minutes, grew
to 90 minutes or even two hours in length in a process
meant to provide an emotional release.
Roethlisberger discovered that what employees found
most deeply rewarding were close associations with
one another, “informal relationships of
interconnectedness,” as he called them. “Whenever
and where it was possible,” he wrote, generated them
like crazy. In many cases they found them so satisfying
that they often did all sorts of non logical things in
order to belong.
In Mayo’s broad view, the industrial revolution had
shattered strong ties to the workplace and community
experienced by workers in the skilled trades of the
19th century.
Drucker came up with the SMART system for
companies to set goals that are specific,
measurable, achievable, realistic, and time-
related. In the Peter Drucker Management
Theory , Drucker argued that customers should
be highly valued, and servicing their interests
will make a business profitable.
Drucker encouraged creative rather than bureaucratic
management and insisted that managers should, above
all else, be leaders. Rather than setting strict hours and
discouraging innovation, he opted for a more flexible,
collaborative approach.
At the core of Drucker’s management theory lie the
concepts of decentralization, knowledge work (in fact,
he coined the term “knowledge worker”), management
by objectives (MBO), and the SMART goal method.
• Decentralization means that managers should
empower employees by delegating tasks.
• MBO involves superiors and their subordinates
working together to set common goals, identify
employees’ areas of expertise and define measurable
expected results.
The SMART method means that those goals
need to be specific, measurable, achievable,
relevant, time-specific and recorded.

The essence of Duckers theory is Delegate

power equitably.
 Michel Porter
• Through expectancy theory, Porter codified
the major factors that affect an employee's
motivation to perform. He stated that
numerous factors fuel an employee's efforts
to reach an organizational goal, including the
expectation that performance will yield
positive rewards and that rewards will match
effort.
Porter's 5 forces are:

• Competition in the industry

• Potential of new entrants into the industry
• Power of suppliers
• Power of customers
• Threat of substitute products1
• Competition in the Industry
The first of the Five Forces refers to the number
of competitors and their ability to undercut a
company. The larger the number of competitors,
along with the number of equivalent products
and services they offer, the lesser the power of a
company.
• Potential of New Entrants Into an Industry
A company's power is also affected by the force
of new entrants into its market. The less time
and money it costs for a competitor to enter a
company's market and be an effective
competitor, the more an established company's
position could be significantly weakened.
• Power of Suppliers
The next factor in the Porter model addresses
how easily suppliers can drive up the cost of
inputs. It is affected by the number of suppliers
of key inputs of a good or service, how unique
these inputs are, and how much it would cost a
company to switch to another supplier. The
fewer suppliers to an industry, the more a
company would depend on a supplier.
• Power of Customers
The ability that customers have to drive prices
lower or their level of power is one of the Five
Forces. It is affected by how many buyers or
customers a company has, how significant each
customer is, and how much it would cost a
company to find new customers or markets for
its output.
Threat of Substitutes
• The last of the Five Forces focuses on
substitutes. Substitute goods or services that
can be used in place of a company's products
or services pose a threat. Companies that
produce goods or services for which there are
no close substitutes will have more power to
increase prices and lock in favorable terms.
When close substitutes are available,
customers will have the option to forgo buying
a company's product, and a company's power
can be weakened.
 C K Prahalad
• Prahalad helped save the Dutch company
Philips. He served as advisor to CEO Jan
Timmer and he designed operation Centurion,
which took 2 to 3 years, to help save Philips. C.
K. Prahalad became particularly known for the
work he conducted with Gary Hamel.
 Chester Barnard
• Chester Barnard adopted sociological
approach. In dealing with the functions of
executives, he stressed the importance of
leadership and communication. Barnard
divided organization into formal and informal.
He said that informal organization is an
important part of formal organization.
• In his 1938 book, The Functions of the
Executive, a book he wrote based on lectures
he gave at Lowell Institute (Boston) in the
1930s, he discusses the theory of organization
(what he called “cooperative system”) and
the need for an organization to reach internal
“equilibrium” and stability and confront
external environmental forces ,Barnard may
be the first architect of a general theory of
collective action
• Barnard (1938) argued that “willingness of persons to
contribute efforts to the cooperative system is
indispensable” (p. 84). Such willingness to contribute may
fluctuate within and among individuals and requires
commitment and cooperation between co-workers to
achieve a common goal, even if the organization is
informal. The supportive workplace environment that
allows such cooperation would be termed years later by
McGregor as Theory Y. Keeping cooperative spirit can be
achieved by management by offering
objective incentives and by using persuasion to change
people’s minds (Wren & Greenwood, 1998). The premise is
that employees will contribute if they feel that their
personal goals align with those of the company.
• The effectiveness of an organization, according to Barnard,
depends on the ability of the organization to satisfy the
needs of the individuals in the organization and provide
them with opportunities for cooperation.
 Contribution of Rensis Likert to
management
founded the theory of participative
management, which is used to engage
employees in the workplace. Likert's
contributions in psychometrics, research
samples, and open-ended interviewing have
helped form and shape social and organizational
psychology.
He conducted extensive research for fourteen years
with the help of 40 researchers in the field of
leadership. His famous writings included: New
Patterns of Management (1961), Human
Organisation (1967)
• He was of the opinion that traditional job-
oriented supervision was the cause of low
productivity and low morale. He emphasised
participative management in the field of decision-
making. He divided management styles into the
following categories:
• (i) Exploitative Autocratic:
• There is no participation of workers because
these leaders have no confidence in them.
• Benevolent Autocratic:
• There is no proper confidence in subordinates
and the relationship is that of a master and
servant.
iii) Participative:
• The subordinates are allowed to participate in
decisions involving their lives. Leader does not
have full confidence in them.
(iv) Democratic:
• In this style, the confidence in subordinates is
full and they meaningfully participate in
decision-making.
• In order to integrate individual and
organisational goals, Likert developed the
concept of ‘linking pin’. There are certain
persons who are members of more than one
group.
These persons act as ‘linking pin’; they are the
leaders for the lower groups and act as
members of the upper groups. This model has
upward orientation and decision-making scale
having 51 items for evaluating leadership styles
of individual leaders.
• Consultants at McKinsey & Company
developed the 7S Framework or model in the
late 1970s to aid managers in addressing
difficulties of change in the organization. It
was developed and also used during the
research work of two bestselling books “The
Art of Japanese Management” and “In Search
of Excellence”.
• Strategy,
• Structure,
• Systems,Shared
• Values,
• Skills,
• Style,
• And Staff.
• Strategy
• “Strategy” is formulated plans for the
organization to reach identified goals. A
strategy is the plan to develop long-term
advantages.➡️ iedunote.com/mckinsey-7s-
framework
• Structure
• The hierarchical setting or an organizational
structure where and authority and
responsibility, relationships are well-defined.
• Structure embodies the reporting and
accountability relationships within an
organization. The structure must support the
strategy.
• System
• “System’s” refers to the procedures and
processes that staff members engage in such
as information systems, manufacturing
processes, budgeting and control processes;
to get the job done. The system refers to the
routines, procedures activities necessary to
carry out the operations of the organization.
• Style
• “Style” indicates leadership techniques of
management. The way the management
behaves to achieve organizational goals.
Leadership can be exercised in the
organization in many ways. Style refers to the
leadership pattern in the organization.
• Staff
• “Staff” refers to the number and types of
employees within the organization.The people
and their capabilities create advantages for
the organization. A talent pool and
qualitatively superior competencies are the
intangible assets on which strategy rides.➡️
iedunote.com/mckinsey-7s-framework
• Shared Values
• “Shared Values” is the joining center of
McKinsey’s model. It refers to the values the
members of the organization share. The
superordinate goals or shared values signify
what we stand for and are the glue that holds
the organization together.
• Skills
• “Skills” refer to the distinctive capabilities of
personnel.As you see, The McKinsey 7S
Framework shows the multiplicity
interconnected of elements that define an
organization’s ability to change.