MANAGEMENT THEORY

&
PRACTICES

Chapter – 2
Development of Management Thought
 Chapter – 2
Development of Management Thought

Content:
2.1 Evolution of Management Thought
2.1.1 The Scientific Management School: F.W.Tylor
Contributions of Scientific Management 2.1.2 Theory-
Classical Organization Theory School-Fayol’s
Administrative Management
2.1.3 Bureaucratic Management-the Behavioral School-
Human Relations to the behavioral approach-the
quantitative school-attempts to integrate the schools-the
systems approach, the contingency approach.
2.1 Evolution of Management Thought:
I. Classical or Traditional Management Approach:
1. Scientific Management - F.W. Taylor
2. Administrative Theory of Management - Henri Fayol
3. Bureaucratic Organization - Max Weber

II. Behavioral or Neo-Classical Approach:

1. Human Relation Movement
2. Behavioral Science Approach

III. Modern Approach to Management:

1. Quantitative Approach
2. System Approach
3. Contingency Approach
I. Classical or Traditional Management Approach:
It has its roots in the basic concept of division of labor
and specialization and consists mainly of scientific
management developed by F.W. Taylor, administrative
theory of management by Henry Fayol and bureaucratic
organization by Max Weber.
12.1.1 The Scientific Management School: F.W.Tylor
Contributions of Scientific Management:
•Taylor’s approach aims at increasing the operational
efficiency of workers by solving their work related
problems, reducing in-efficiency and wastage,
improving their relation with management, and
developing a best way of doing things. Taylor expressed
the basic philosophy of scientific management in the
following terms:
i. Scientific Approach: For solving problems and
making decisions, the manager should adopt
scientific attitude and use scientific thinking and
methods. The ‘rule of thumb’ or ‘hit or miss’
approach should be replaced and problems
studied in all respects; required data should be
collected and analyzed for finding a solution.
Intuitive decisions should be substituted by
decisions based on facts.

ii. Harmony not discord: All the departments and

workers area a part of an organization. There
should be complete harmony or coordination in
their functioning and any kind of disagreement,
clash or conflict should not be allowed to crop in
iii.Cooperation, not individualism: Instead of
fostering individualism, importance of cooperative
group efforts should be recognized because if the
objectives of the organization are to be accomplished,
it would be possible not only on account of dynamic
and effective leadership of the individual manager but
the whole-hearted cooperation and commitment of all
employees. Credit should be given to all employees.

iv.Maximum, not restricted output: Production

should be carried out up to the maximum capacity
available in a unit. As production increases,
economies of scale set in and the cost per unit of
output will decrease. The policy of restricted output
should be treated as an outdated one.
v. Employee Development: For the prosperity of
individual workers as well as the organization, the
efficiency level of workers should be increased by
providing scientific training and developing their potential
abilities to the maximum.
2.1.2 Guide lines to the practice of management:

Taylor, based on his experience at the shop floor,

developed guide lines to the practice of management
which are as under:

i. Scientific study and planning of work: Taylor has

suggested that the work to be assigned to and
performed by workers should be studied, analyzed and
planned as to determine the day’s fair work (standard of
work) for each worker. In relation to work, various
studies on its distinct aspects should be conducted such
as time, speed, fatigue, work and motion study to give
precise ideas to the workers on what is to be done and
how it can be done, efficiently.
ii. Scientific selection, placement and training: To
build up a team of efficient workers, Taylor realized that
selection should be made by using scientific methods. It
implies selection of workers for the job by tallying job
requirements with abilities and skills. Workers should be
given placement on the basis of capability and aptitude.
And, for developing the existing level of knowledge and
potential scientific training should be imparted to workers
on a regular basis.
iii. Standardization: Taylor suggested that the scheme
of standardization should be adopted in respect of trade
tools and equipments, raw material used by workers and
physical working conditions provided to them. Any
difference in the quality of raw materials, tools and
equipments may directly affect level of efficiency of
iv. Division of responsibility between management
and workers: Planning of work should be the
responsibility of managers. They should design work
standards by coordinating various studies, devise
incentive scheme for workers, disciplined them and
assign work to them. Whereas role of workers should be
confined to implementation of these plans. In this way
benefits of division of labor and specialization may be
secured.
v. Mental revolution: In order to get desired results of
scientific management there should be complete mental
revolution on the part of workers as well as
management. Mental revolution is a process of bringing
drastic changes in their attitude, outlook and behavioral
pattern in respect of their duties towards their fellow
workers and employers.
Similar kind of changes in outlook should also take place
among managers towards workers and their problems.
To bring the change in the mental attitude of both sides
Taylor, suggested scheme of workers participation in
management and sharing surplus as bonus.
vi. Wage incentives: Taylor suggested that incentive
should be directly linked with productivity. The worker
producing more should be given higher wages. For this
purpose he devised ‘differential piece rate plan’ which
implies different rates of wages for different levels of
efficiency of workers.
2.1.2 Theory-Classical Organization Theory
School-Fayol’s Administrative Management:
Fayol believed that manager’s job could be divided into
five functions namely planning, organizing, command, co-
ordination and control and these functions are got to be
performed by every manager.
Fayol claimed that planning, organizing, command,
coordination and control were basic and common
denominators for all managers in the process of
management.
Fayol’s Principles of Management:
• Division of work: To divide work among various
departments and employees according to required abilities
and skills as to get benefit of specialization.
• Authority and responsibility: Authority should
commensurate with responsibility. More authority may
result in mis-utilization or under-utilization of it.
• Discipline: It implies compliance with organizational
directives and rules, orders and instructions of superior and
to co-operation with fellow workers.
• Unity of Command: According to this principle, one
subordinate should get orders and instructions regarding his
work only from one superior.
•Unity of direction: All activities related towards common
goals should be included in single plan to be implemented by
particular manager.
•Subordination of individual’s interest to interest of
organization: In every work setting each employee should
sacrifice and subordinate his personal interest and goal for
accomplishing common goals of organization.
•Remuneration: Employees should be paid fairly and
reasonably in accordance with their contribution.
•Centralization: The relationship between centralization and
decentralization of authority is a matter of proportion and
optimum balance, which should be maintained according to
needs of organization.
•Scalar Chain: Line of authority from top to the lowest level
is established.
•Order: In order to facilitate smooth flow of work and
efficient use of resource material, machine tools, equipments
etc., as well as employees (human resource) should be in their
prescribed proper place and order.
•Equity: The principle of equity suggests that similar
treatment based on the principles of equity fairness and
impartiality should be assured to all employees working in
organization.
•Stability of tenure of personnel: Since, people need time to learn
their jobs, therefore they should not be allowed to move frequently
from one position to another.
•Initiative: Employees should be provided opportunities as to
develop and use initiative for solving work-related problems. Due
care should be taken specially for developing policies so as to
regulate decision making behavior of managers on the one hand
and on the other to provide them enough liberty for using their
personal skills and judgment.
•Esprit-de-crops: It implies to build team spirit among the
employees so that they work in harmonious manner with proper
mutual understanding as to make their respective contribution for
achieving goals.
2.1.3 Bureaucratic Management-the Behavioral
School-Human Relations to the behavioral
approach-the quantitative school-attempts to
integrate the schools-the systems approach, the
contingency approach.

According to Weber it is a more efficient form of

organization because it aims at high degree of precision,
efficiency, objectivity and rationality.

Prescribed procedure and set of rules strictly.

Characteristics of Bureaucratic Organization:
• Division of labour: To get benefits of specialization
principle of division of labor is followed in bureaucratic
organization. It implies to divide and assign activities to
various employee on the basis of their abilities, skills and
aptitude.
• Hierarchy of authority: All employees of bureaucratic
organizations are attached to each other in the relationship
of authority which lies on the position and which is rational
and legal in nature.
• Technical Competence: In this type of organization people
are hired and promoted on the basis of their technical
competence that is what they know about job. It is on the
basis of job requirements, they are selected and placed in
organization.
• Rigidity in compliance with procedures and framework
of rules: Prescribed procedure and set of rules strictly.
• Impersonality: No place of emotions, sentiments, and
personal attachment.
2.2 Behavioral or Neo-Classical Approach
• It is based on strong conviction that successful
management depends on manager’s ability to
understand work, as well as people with
different backgrounds, needs, values,
perceptions and personality. Thus in this
approach of management “human factor”
remains central focus and high pedestal in
organization.
1. Human Relation Movement
2. Behavioral Science Approach
1.Human Relation Movement
• Human relation movement was a remarkable
attempt on the part of management
practitioners for making managers more
sensitive to employee needs.
• Elton Mayo, Mary Parker, Follet, and Douglas
McGregor have been main contributors to this
movement.
Human Relation Factors
• Psycho-social system:
Psychologists - employee as an individual
Sociologists - employee’s interaction with others in a group
• Social man model:
‘economic man’ to ‘social man model’(recognition,
appreciation, self-respect, dignity, etc.).
• Optimistic outlook towards employees:
Provide opportunity, congenial interpersonal relationship,
sympathetic , friendly attitude, etc.
• Healthy organizational functioning:
No conflicts or clashes.
• Maximum contribution:
Interaction, fair and frank communication, etc.
• Motivation:
In terms of emotions beliefs, attitudes and habits.
• Sense of belongingness:
Employees importance, involvement in decision making
• Human relation approach:
High degree of satisfaction, motivation improved working
condition, style of supervision and sense of security.
The Hawthorne Studies

•These studies began in 1924 in Western

Electric Plant in USA spread over a period of
eight years.
•A team of behavioral research scientists headed
by Elton Mayo was called upon from Harvard
for making rigorous studies.
1.The Illumination Experiments
The following are the various experiences conducted.
1.The Illumination Experiments:

The experiments were taken place between 1924 to 1927; to

assess the effect of illumination on employee output. For
this purpose, the female workers were separated into two
rooms. “The experimental” or “Test room” where
changes were to be introduced and the “The control room”
which was similar to the other in all respects except that in
this room illumination was constant, the idea being to find
out whether any change in lightning would affect production
in the test room.
It was found that when lightning in the experimental room
improved production registered an increase. When the light
was progressively raised to 24, 26 and 70 foot candles,
production went up proportionately. After a while, however
for no apparent reason, output soared in the control room as
well when no change at all had been made.

It revealed that productivity cannot be raised only by

improving physical working conditions but philosophy of
human relation was needed to provide better treatment to them
to raise their output.
2.The Relay Cable Assembly Test Room
Experiments:
This Experiments was conducted by Eltan Mayo and others
between 1927 and 1932. The purpose of the experiment was to
determine more accurately the effects of physical
environmental factors on productivity and in particular effects
of pauses, length of working day and method of payment.
A small group of six girls was selected and placed in a room.
Ingenious arrangements were made to record the rates of
production of the workers and the variations of the test factors.
In addition a record was kept of daily events, including their
conversations and other forms of interaction.
The girls too were informed and consulted about the changes
that were introduced in the experimental.
Following were the changes and resultant outcomes:
i. Two five minute rests- one in morning session and the other in the
evening session-were introduced which were increased to ten minutes.
The productivity increased.
ii. The rest period was reduced to five minutes but frequency was
increased. The productivity decreased slightly and the girls complained
that frequent rest intervals affected the rhythm of the work.
iii. The number of rest was reduced to two of ten minutes each, but in the
morning coffee or soup was served along with sandwich and in the
evening, snack was provided. The productivity increased.
iv. Changes in working hours and workday were introduced, such as
cutting an hour off the end of the day and eliminating Saturday work.
The girls were allowed to leave at 4.30 p.m. instead of usual 5.00 p.m.
and later at 4.p.m. Productivity increased.
 The following are the reasons for the better production,
according to the women those where interviewed.
1. Small group
2. Type of supervision
3. Earnings
4. Novelty of the situation
5. Interest in the experiment
6. Attention received in the test room
It revealed that physical environment may or may not increase
productivity rather more important than these conditions are
attitude of management, morale of the employees and other
socio-psychological factors like importance, involvement,
informal relations, etc.
3. Bank Wiring Observation Room Experiment
This experiment was conducted with a view to obtaining
more exact information about the informal groups within a
company. This experiment was conducted between the
period of 1931 to 1932, at the Hawthorne plant.
For this experiment, a sample of 14 workingmen was
selected, which included 9 workmen, 3 soldier men and 2
inspectors. (These workers were observed and interviewed
over a period of six and half months). The selected
workmen were moved to a special test room. No special
privileges were given to them. Their working conditions
were normal.
They continued to be responsible to their regular
supervisors. In addition an observer was stationed in the
test room to take note of what was going on and to keep
records. One interviewer, on the other hand remained an
outsider. The interviewer’s major function was to obtain
information about the workers attitudes, thoughts and
feelings.
The researchers determined that the informal groups
restricted output rather than lack of ability to produce. The
following evidence supports this condition.
1.The observer noted that all the men stopped work before
quitting time.
2. Most of the men admitted to the interviewer they could
easily turn out more work.
3. Ridicule (made fun of some one) and name calling were
the major sanctions utilized by the group to enforce this
restriction.
4. Workers were convinced that once they reached the
standard rate of production; management would raise the rate
of production by thinking it must be too easy to attain.
•It revealed that the existed informal group norms regulated
and affected the behavior of the employees.
•Further it proved the importance of small informal social
groups like cliques in organization.
4. Massive interviewing program

•It revealed that informal relationship, social and

psychological needs and the attitude of employees have
definite influence on their working behavior.
2. Behavioral Science Approach

The term behavioral science approach may be

defined as systematic as well as scientific analysis of
human behavior with a view to determine causes of
working behavior of an individual.
Assumptions of Behavioral Science Approach

• Socio-technical system:
Individuals and their interpersonal and social relationship.
• Integration of goals:
Individual goals with organizational goals.
• Conflict:
Shaping of individuals’ and managers’ behaviours during
conflict resolution.
• Individual differences:
Motivation process in tune with individual differences.
•Behavioral approach: This approach in terms of
satisfaction, morale, motivation, sensitivity of manager to
employee needs, etc.
•Behavioral Scientists: Different approaches by behavioral
scientists like Douglas McGregor, Abraham Maslow, Chester
Barnard, Renis Likert and Herbert Simmon, etc.
S. No. Human Relation Movement Behavioral Science Approach
1. Human relation approach is solely confined to the Behavioral science approach aims at studying and
concepts of humanization and socialization of analyzing human behavior systematically. This approach
organization by recognizing human side of it. is broader and more inclusive in nature.
1. Advocates of human relation approach strongly Behavioral approach assumes that organization is ‘socio-
believe that organization is ‘socio- technical’ system stressing on both individual’s
psychological’, system emphasizing on social interpersonal and social relationship and technique,
and psychological needs of individuals working methods and procedures used by them for performing
in organization. assigned jobs.
1. Human relation approach in fact mainly Behavioral science approach recognizes individual
concerned with human aspect involved in difference in terms of background, personality, values,
organization and considers all individuals as a goals and aspirations paving way for devising different
human being. motivational process for them.
1. Human relationists advocate that satisfaction Behavioral scientists reject this assumption and believe
provided to employees by giving economic that there are wide ranging variables which affect working
incentive, improving their working conditions behavior of employees.
will lead to higher productivity
1. Human relation approach is based on the Behavioral science approach realizes that conflicts are
assumption that conflicts and clashes should be bound to crop in and to some extent they produce
totally removed as they appear. constructive effect, especially on managers.
1. Human relation approach seems to be more Behavioral scientists were more concerned about
limited in scope and areas because it only deals technological aspects of job design, group dynamics,
with a set of economic, social and psychological leadership, communication and motivation which provide
needs and physical working conditions which broad base to this approach.
contribute to higher efficiency.
The quantitative school-attempts to integrate the
schools-the systems approach, the contingency
approach:
Modern Approach to Management

1. Quantitative Approach
2. System Approach
3. Contingency Approach
 1. Quantitative Approach:
•The quantitative approach aims at achieving high
degree of precision, perfection and objectivity by
encouraging the use of mathematical and statistical
tools for solving complex problems.
•Dividing problem into small simple components
•Gathering required information on each component
•Analysis of data so collected
•Finding out solution to problem in hand
2. System Approach:
•The term system may be defined as a set of
interrelated and interacting components assembled in
a particular sequence as to produce some results.
These components may also be viewed as sub-systems
of larger system.
•For instance individual firm is a sub-system of
industry which is sub-system of business, which is
further sub-system of larger economic system and
which is again a part of broader socio-economic
system of the country which falls within international
system.
3. Contingency Approach

•This principles is subject to appropriateness of the

situation.

•This approach makes it quite clear that instead of

relying too much on preconceived and prejudged
assumptions, differences in the situations should be
taken into account and accordingly management
package should be designed and implemented.
…learning never ends
the journey of excellence
continues…

Thank You