Development of Management Thought [BBA 306] Unit 3 3.

1 Scientific Management: Scientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improvingeconomic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management. Its development began with Frederick Winslow Taylor in the 1880s and 1890s within the manufacturing industries. Its peak of influence came in the 1910s; by the 1920s, it was still influential but had begun an era of competition and syncretism with opposing or complementary ideas. Although scientific management as a distinct theory or school of thought was obsolete by the 1930s, most of its themes are still important parts of industrial engineering and management today. These include analysis; synthesis; logic; rationality; empiricism; work ethic; efficiency and elimination of waste; standardization of best practices; disdain for tradition preserved merely for its own sake or merely to protect the social status of particular workers with particular skill sets; the transformation of craft production into mass production; and knowledge transfer between workers and from workers into tools, processes, and documentation. The core ideas of scientific management were developed by Taylor in the 1880s and 1890s, and were first published in his monographs Shop Management (1903) and The Principles of Scientific Management (1911). While working as a lathe operator and foreman at Midvale Steel, Taylor noticed the natural differences in productivity between workers, which were driven by various causes, including differences in talent, intelligence, or motivations. He was one of the first people to try to apply science to this application, that is, understanding why and how these differences existed and how best practices could be analyzed and synthesized, then propagated to the other workers via standardization of process steps. He believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual at work, including via time and motion studies, which would tend to discover or synthesize the "one best way" to do any given task.[4]The goal and promise was both an increase in productivity and reduction of effort. Scientific management's application was contingent on a high level of managerial control over employee work practices. This necessitated a higher ratio of managerial workers to laborers than previous management methods. The great difficulty in accurately differentiating any such intelligent, detail-oriented management from mere misguided micromanagement also caused interpersonal friction between workers and managers, and social tensions between the bluecollar and white-collar classes.

Rahul Pratap Singh Kaurav

Page 1

Development of Management Thought [BBA 306] Unit 3 3.1.1 Evolution of Scientific Management: Dr. Frederick Winslow Taylor in a speech called "The Principles of Scientific Management" delivered on March 3, 1915 to the Cleveland Advertising Club exhorts his audience to take on a new, revolutionary view of the way work should get done. To combat the time-ingrained attitude of workmen throughout the world that "it is in their best interest to go slow instead of fast," Taylor proposes four principles of the scientific management of work. He asserts that even though the average businessman believes that if workers were to go fast, thus increasing efficiency resulting in a money saving decrease of workforce, just the opposite would be true. Taylor believes increasing the efficiency of the workman scientifically would increase the not only the opportunity for more work, but also the real wealth of the world, happiness, and all manner of worthwhile improvements in the life of the working person. For Taylor, increased workman output will result in improved quality of life. Taylor, a mechanical engineer, seeks to apply a positivistic, rational perspective to the inefficient work organization. A second "misfortune of industry" that impedes the progress of improving work is what Taylor refers to as the "soldiering" of the worker, which essentially means to make a show of work not necessarily doing one's best. The worker tries to balance the inner conflict he feels as a result of worry about job security versus expectations of productivity. Taylor says that the worker is not to blame for soldiering since, even if given the opportunity to work harder with greater output, the effect on the labor market is such that rate of pay is cut. What incentive does management have to pay a man more wages, even for greater output, when another man will accept less for, albeit, less output. Taylor believes that scientific management of work will alleviate the common work problems of inefficiency, slow rate of work, and decreased productivity. Logically, according to Taylors view, soldiering would disappear as workers productivity and security improved.

3.1.2 Principles of Scientific Management:

Rahul Pratap Singh Kaurav

Page 2

Development of Management Thought [BBA 306] Unit 3 The above chart illustrates Taylor's four principles of scientific management. Taylor is careful to assert that scientific management is no new set of theories that have been untried, a common misunderstanding. He says that the process of scientific management has been an evolution, and in each case the practice has preceded the theory. Further, scientific management is in practice in various industries: "Almost every type of industry in this country has scientific management working successfully." (Shafritz p.69) According to Taylor, the workman, on the average, in those industries where scientific management has been introduced, has turned out double the output and been the beneficiary of many improvements in working conditions. Taylors principles of scientific management derive from the positivistic paradigm. Positivism attempts to view the world rationally, free of subjective values, applying logic and reductionism to the process of determining cause and effect. Taylors principles offer a method to gather information about the work process and the worker. The selection and training workers according to a scientific approach attempts to bring together the worker and the gathered, codified knowledge about work engendering some form of teamwork between the manger and the worker. Taylorism seeks a careful, objective approach to the way work is done based on a rational, apparently scientific approach. Positivism applied to social theory perceives an organization as a rational bureaucracy with an appropriate hierarchy. Organizations were seen as machines and people were viewed as appendages to those machines (Carlson, 1996, p. 20). Both organizations and people need to be carefully controlled and monitored. This examination of the organization and the people in it is done through a rational, objective process that reduces the functioning of the organization to a logical, scientific method that can be replicated. Positivism cannot be applied to all organizations. Efficiency, impersonal relationships, rationality and logic do not work well in social systems such as schools, which can be unpredictable requiring flexibility, negotiation, and interactivity (p.21). According to Pfeffer in Shafritz and Ott (1996), the role of power in the decisionmaking process of the rational/bureaucratic organization is centralized, and control is exercised over goals so as to be consistent with rules of logic like Taylors scientific principles. Decisions are made to increase efficiency in the Taylor model. Social systems such as schools often confront ambiguous situations requiring flexibility. There can be no one best way. When confronted with decision-making in a complex social organization, political power can be expected to influence coalitions and cause conflicting interests, create disorder, cause disagreement, bargaining, and struggle for position. All aforementioned effects of political power in a complex social organization are unacceptable and unthinkable in the rational model represented by Taylor.

Rahul Pratap Singh Kaurav

Page 3

Development of Management Thought [BBA 306] Unit 3 3.2 Contribution of Henri Fayol: Today's managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago? Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building the foundations of modern management theory.

3.2.1 Background: Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining company in France. He eventually became the director, at a time when the mining company employed more than 1,000 people. Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Essentially, these explained how managers should organize and interact with staff. In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in the book "Administration Industrielle et Generale." Fayol also created a list of the six primary functions of management, which go hand in hand with the Principles. Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of the most comprehensive. He's considered to be among the most influential contributors to the modern concept of management, even though people don't refer to "The 14 Principles" often today. The theory falls under the Administrative Management school of thought (as opposed to the Scientific Management school, led by Fredrick Taylor).

3.2.2 Fayol's 14 Principles of Management: Fayol's principles are listed below: 1. Division of Work When employees are specialized, output can increase because they become increasingly skilled and efficient. 2. Authority Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility. 3. Discipline Discipline must be upheld in organizations, but methods for doing so can vary. 4. Unity of Command Employees should have only one direct supervisor. 5. Unity of Direction Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.

Rahul Pratap Singh Kaurav

Page 4

Development of Management Thought [BBA 306] Unit 3 6. Subordination of Individual Interests to the General Interest The interests of one employee should not be allowed to become more important than those of the group. This includes managers. 7. Remuneration Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation. 8. Centralization This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance. 9. Scalar Chain Employees should be aware of where they stand in the organization's hierarchy, or chain of command. 10. Order The workplace facilities must be clean, tidy and safe for employees. Everything should have its place. 11. Equity Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate. 12. Stability of Tenure of Personnel Managers should strive to minimize employee turnover. Personnel planning should be a priority. 13. Initiative Employees should be given the necessary level of freedom to create and carry out plans. 14. Esprit de Corps Organizations should strive to promote team spirit and unity.

3.2.3 Fayol's Six Functions of Management: Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows: 1. Forecasting. 2. Planning. 3. Organizing. 4. Commanding. 5. Coordinating. 6. Controlling.

3.3 Oliver Sheldons Philosophy of Management: Oliver Sheldon (1894-1951) was a director of the Rowntree Company in York, in the UK, in the 1920s.

Rahul Pratap Singh Kaurav

Page 5

Development of Management Thought [BBA 306] Unit 3 He was closely involved in restructuring the management and organisation of the growing confectionery company at a stage where its growth meant by necessity it had to move away from the personal, family-centred management of its founder, Joseph Rowntree, towards a more professional culture. Under the chairmanship of Joseph's son, Seebohm, the company adopted Sheldon's proposals for a more functional style of organisation, but he tempered this with a belief, shared by the Rowntree firm's senior managers, that industry existed for more than the profit of shareholders. Sheldon held that good management was about more than technique - it should be concerned with human understanding. "The leadership of men calls for patience, courage, and, above all, sympathy." Service to the community was the primary motive and fundamental basis of industry. Consequently, Sheldon advocated a human relations style of management which placed the individual in a human context involving a range of emotional and psychological needs. In this, he disagreed fundamentally with contemporaries such as Taylor, who saw economic need as being the primary motivator of workers. Anticipating later writers such as Mayo and Herzberg by some years, Sheldon argued that, while basic economic needs must be met, wider personal and community needs were equally important. Industry was key to shaping society and the leaders and managers of industry consequently had to work to ethical considerations which were greater than purely financial. While stressing the need for efficiency, he saw service and democracy as complementary to this - reflecting long established Rowntree practices, introduced by Joseph and extended by Seebohm Rowntree and Oliver Sheldon, such as ensuring their workers were paid a "living wage", had decent working conditions and were consulted on and involved in decision making in the workplace. Both the firm and individual directors were closely involved in a range of community work, often motivated by theirQuaker religious beliefs and/or their Liberal politics. In 1904, Joseph Rowntree gave away half his personal fortune and almost two-thirds of the shares in the company to three Trusts to pursue a range of charitable, social and political work. All three continue today in the forms of the Joseph Rowntree Charitable Trust, the Joseph Rowntree Foundation (which includes the Joseph Rowntree Housing Trust) and the Joseph Rowntree Reform Trust. All are still based in York. Although with the passage of time, the Rowntree company was to change and develop in new ways (particularly with new brands and marketing from the 1930s on), and in 1988 was bought by Nestl, it retained a tradition of good management throughout, in keeping with the philosophy of its founder and those around him. Sheldon explored this in his 1924 book, "The Philosophy of Management", which demonstrated his twin concerns for sound business and ethical practice when he stated: "The cost of building the Kingdom of Heaven will not be found in the profit and loss accounts of industry, but in the record of every man's conscientious service."

Rahul Pratap Singh Kaurav

Page 6

Development of Management Thought [BBA 306] Unit 3 3.4 Mary Parker Follett Mary Parker Follett (18681933) was an American social worker, consultant, and author of books on democracy, human relations, and management. She worked as a management and political theorist, introducing such phrases as "conflict resolution," "authority and power," and "the task of leadership." Follett was born into an affluent Quaker family in Massachusetts and spent much of her early life there. In 1898 she graduated from Radcliffe College. Over the next three decades, she published several books, including:

The Speaker of the House of Representatives (1896) The New State (1918) Creative Experience (1924) Dynamic Administration (1941) (this collection of speeches and short articles was published posthumously)

Follett suggested that organizations function on the principle of power "with" and not power "over." She recognized the holistic nature of community and advanced the idea of "reciprocal relationships" in understanding the dynamic aspects of the individual in relationship to others. Follett advocated the principle of integration, "power sharing." Her ideas on negotiation, power, and employee participation were influential in the development of organizational studies. She was a pioneer of community centres. Mary Parker Follett (1868-1933) was a visionary and pioneering individual in the field of human relations, democratic organization, and management. Born in Massachusetts, in 1892 she entered what would become Radcliffe College, the women's branch of Harvard. She graduated from Radcliffe summa cum laude in 1898. Follett's intensive research into government while at Radcliffe was later published in her first book, The Speaker of the House of Representatives (1909), which was lauded (by, among others, Theodore Roosevelt) as the best study of this office of government ever done. From 1900 to 1908, Follett devoted herself to social work in the Roxbury neighborhood of Boston. In 1908 she became chairperson of the Women's Municipal League's Committee on Extended Use of School Buildings, and in 1911 she helped open the East Boston High School Social Center. She was instrumental in the formation of many other social centers throughout Boston. Her experience in this area helped to transform her view of democracy. Follett later served as a member of the Massachusetts Minimum Wage Board, and in 1917 she became vicepresident of the National Community Center Association. By this time, however, she had turned

Rahul Pratap Singh Kaurav

Page 7

Development of Management Thought [BBA 306] Unit 3 most of her attention to writing for a wider public regarding what the social centers had taught her about democracy. In 1918 she published her second book, The New State, which is concerned with the human nature of government, democracy, and the role of local community. In 1924, Follett published her third book, Creative Experience. This work addresses more directly the creative interaction of people through an on-going process of circular response. From this point until her death in 1933, Follett found her most enthusiastic audience in the world of business. Admiration and respect for her work grew on both sides of the Atlantic, and she became a leading management consultant. (Peter Drucker, who discovered Follett's work in the 1950's, is said to have referred to Follett as his "guru.") Her various papers and speeches in this context were published in 1942 by Henry Metcalf and Lionel Urwick in a book called Dynamic Administration. Another celebration of her work in this context is Mary Parker Follett: Prophet of Management, which was edited by Pauline Graham and published in 1995. In 1998, The New State was re-issued by Penn State Press, with a preface by Benjamin Barber. A biography of Follett, written by Joan Tonn, a professor at the College of Management, University of Massachusetts, Boston, is expected to be published next year. Follett is increasingly recognized today as the originator, at least in the 20th century, of ideas that are today commonly accepted as "cutting edge" in organizational theory and public administration. These include the idea of seeking "win-win" solutions, community-based solutions, strength in human diversity, situational leadership, and a focus on process. However, just as her ideas were advanced for her own time, and advanced when people wrote about them decades after her death, they remain too often unrealized. We recognize them as an inspirational and guiding ideal for us today, at the beginning of the 21st century. It is the intention and the design of the Foundation's programs to continue the effort to bridge ideal and practice in a continuous process that gives rise to true freedom.

3.5 Chester I. Barnard Chester Irving Barnard (18861961) was a telecommunications executive and author of Functions of the Executive, an influential 20th century management book, in which Barnard presented a theory of organization and the functions of executives in organizations. Chester Barnard looked at organizations as systems of cooperation of human activity, and was worried about the fact that they are typically rather short-lived. Firms that last more than a century are rather few, and the only organization that can claim a substantial age is the Catholic Church. According to Chester Barnard, this happens because organizations do not meet the two criteria necessary for survival: effectiveness and efficiency.
Rahul Pratap Singh Kaurav Page 8

Development of Management Thought [BBA 306] Unit 3 Effectiveness, is defined the usual way: as being able to accomplish the explicit goals. In contrast, his notion of organizational efficiency is substantially different from the conventional use of the word. He defines efficiency of an organization as the degree to which that organization is able to satisfy the motives of the individuals. If an organization satisfies the motives of its participants, and attains its explicit goals, cooperation among them will last. Two of his theories are particularly interesting: the theory of authority and the theory of incentives. Both are seen in the context of a communication system that should be based in seven essential rules:

The Channels of communication should be definite Everyone should know of the channels of communication Everyone should have access to the formal channels of communication Lines of communication should be as short and as direct as possible Competence of persons serving as communication centers should be adequate The line of communication should not be interrupted when organization is functioning Every communication should be authenticated

Thus, what makes a communication authoritative rests on the subordinate rather than in the boss. Thus, he takes a perspective that was very unusual at that time, close to that of Mary Parker Follett, and is not that usual even today. One might say that managers should treat workers respectfully and competently to obtain authority. In the theory of incentives, he sees two ways of convincing subordinates to cooperate: tangible incentives and persuasion. He gives great importance to persuasion, much more than to economic incentives. He described four general and four specific incentive. The specific inducements were: 1. Material inducements such as money 2. Personal non-material opportunities for distinction 3. Desirable physical conditions of work 4. Ideal Benefactions, such as pride of workmanship etc. The book 'Functions of the Executive' is complex, not light reading. His main objective, as indicated by the title, is to discuss the functions of the executive, but not from a merely intuitive point of view, but deriving them from a conception of cooperative systems based on previous concepts. Barnard ends by summarizing the functions of the executive (the title of the book) as being:

Rahul Pratap Singh Kaurav

Page 9

Development of Management Thought [BBA 306] Unit 3

The establishment and maintenance of the system of communication The securing of the essential services from individuals The formulation of the organizational purpose and objectives

Key concepts of Chester Barnard's Studies Importance of an Individual's behaviour Felt other theorists had underestimated the variability of individual behaviour and impact of this on organizational effectiveness. Compliance Concept of "zone of indifference" - orders must be perceived in neutral terms to be carried out without conscious questioning of authority. Incentives,can be used to expand zone, but material incentives alone limited in their ability to effect compliance - need also use status, prestige, personal power. Communication Central concept - decision-making processes depend on communications, he described characteristics and focussed on importance of communication in informal organisation Other points Organisations made up of individual humans with individual motivations. Every large organization includes smaller, less formal groupings whose goals need to be harnessed to those of the whole - this is managements responsiblity. Management efficiency vs. effectiveness Authority only exists in so far as the people are willing to accept it 3 basic principles for ensuring effectiveness of comms *everyone should know what the channels of communication are *everyone should have access to a formal channel of communications *lines of communication should be as short and direct as possible Managers key tasks are to set up systems to motivate employees towards the organisation's goals - individuals working to a common purpose rather than by authority - real role of Chief Exec is to manage the values of the organisation.

Rahul Pratap Singh Kaurav

Page 10