Schools of Thought in Management

Why knowledge of the evolution of management theories is important to managers

Contributions in management came from intellectuals with widely different backgrounds, so no unified theory of management So over a period of time, various approaches for managerial analysis have been developed These approaches are widely known as approaches/patterns/schools of management thought

Time Line of Management Thought

Classical Management Theory

It arose because of the need to increase productivity and efficiency. A theory that focused on finding the one best way to perform and manage tasks Classical Scientific School : Focused on the manufacturing environment Classical Administrative School : Emphasized the flow of information and how organizations should operate

 It developed during the Industrial Revolution when new problems related to the factory system began to appear. Managers were unsure of how to train employees (many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so they began to test solutions

Classical Scientific School

1. Charles Babbage
In 1832, published On the Economy of Machinery and Manufactures Concluded that definite management principles existed: with broad applications determined by experience Principle of the division of labor amongst the persons who perform the work

2. Frederick W. Taylor
The Father of Scientific Management Pursued four key goals:
Develop a science of management Select workers scientifically Develop and train workers scientifically Create cooperation and group harmony between management and labor Achieve maximum outputs

Determined the quickest ways to perform tasks His primary concern was to raise productivity through greater efficiency in production & increased pay for workers, by applying scientific method

As an example, In 1898, Taylor calculated how much iron from rail cars, Bethlehem Steel plant workers could be unloading if they were using the correct movements, tools, and steps. The result was an amazing 47.5 tons per day instead of the mere 12.5 tons each worker had been averaging. In addition, by redesigning the shovels the workers used, Taylor was able to increase the length of work time and therefore decrease the number of people shoveling from 500 to 140. Lastly, he developed an incentive system that paid workers more money for meeting the new standard. Productivity at Bethlehem Steel shot up overnight.

Taylors Four Principles of Management

1. Develop a science for each element of an individuals work, which replaces the old rule-of thumb method. 2. Scientifically select and then train, teach, and develop the worker. (Previously, workers chose their own work and trained themselves as best they could.) 3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers. (Previously, almost all the work and the greater part of the responsibility were thrown upon the workers.)

3. Henry Gantt (1901) Invented the Gantt chart (type of bar chart for
illustrating project schedule) Stressed the need for training

Moved away from authoritarian management Advocated a bonus system to reward workers Called for scientific selection of workers Harmonious cooperation between labor and management

4. Frank and Lillian Gilbreth (1900) The Gilbreths were among the first to use motion picture films to study hand-and-body motions in order to eliminate wasteful motions. Frank is known for time and motion studies Lillian an industrial psychologist, focused on the human aspects of work and the understanding of workers personalities and needs

Frank Gilbreth is probably best known for his experiments in reducing the number of motions in bricklaying. Frank's early career as an apprentice bricklayer, he was interested in standardization and method study He watched bricklayers and saw that some workers were slow and inefficient, while others were very productive He discovered that each bricklayer used a different set of motions to lay bricks. Frank isolated the basic movements necessary to do the job and eliminated unnecessary motions. Workers using these movements raised their output from 1,000 to 2,700 bricks per day.

Lessons from Classical Scientific Thinkers

Analyze everything

Teach effective methods to others

Constantly monitor workers

Plan responsibly

Control the work and the workers

How Do Todays Managers Use Scientific Management? Guidelines devised by Taylor and others to improve production efficiency are still used in todays organizations. However, current management practice is not restricted to scientific management practices alone. Elements of scientific management still used include: Using time and motion studies Hiring best qualified workers Designing incentive systems based on output

Administrative Management began in the 1940s. Unlike scientific management, administrative management focused largely on jobs and work at the individual level of analysis. It provided a more general theory of management.

Classical Administrative School

1. Henri Fayol
Referred to as Father of modern management theory Divided industrial activities into six groups: technical,commercial,financial,security, accounting and managerial Recognized the need for teaching management Formulated 14 principles of management, such as authority & responsibility, unity of command, scalar chain etc. Believed specific management skills could be learned and taught Fayols universal management functions: Planning Organizing Leading Controlling

Fayols Fourteen Principles of Management

1. Division of Work 2. Authority 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of Individual Interests to the General Interest 7. Remuneration 8. Centralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13. Initiative 14. Esprit de Corps (teamwork)

2. Mary Parker Follett Focused on how organizations cope with conflict and the importance of sharing goals Emphasized the need to discover and enlist individual and group motivation The first principle for individual and group success is the capacity for organized thinking Advocated principles of cooperative effort Two core concepts: Reciprocal response (interaction where output is more than participants can produce alone) Integration of interests which depends on shared power

3. Chester Barnard He is credited with developing the acceptance theory of management, which emphasizes the willingness of employees to accept that managers have legitimate authority to act. So argued that managers must gain acceptance for their authority Advocated the use of basic management principles Cautioned managers to issue no order that could not or would not be obeyed Decision making hinges on communication introduced the idea of the informal organization cliques (exclusive groups of people) that naturally form within a company & provided necessary and vital communication functions for the overall organization

4.Max Weber : Theory of Bureaucracy

Weber developed a theory of authority structures and described organizational activity based on authority relations. He described the ideal form of organization as a bureaucracy marked by 1. Division of Labor 2. Authority Hierarchy 3. Formal Selection 4. Formal Rules and Regulations 5. Impersonality 6. Career Orientation

How Do Todays Managers Use General administrative Theories? Some current management concepts and theories can be traced to the work of the general administrative theorists. The functional view of a managers job relates to Henri Fayols concept of management. Webers bureaucratic characteristics are evident in many of todays large organizationseven in highly flexible organizations that employ talented professionals. Some bureaucratic mechanisms are necessary in highly innovative organizations to ensure that resources are used efficiently and effectively.

Behavioral Management Theory

Behavioral Management Theory

When the behavioral concept began in the 1930s, there was a global depression that brought an abrupt shift from the fun-loving lifestyles of the Roaring 20s. As Socialists proclaimed the death of capitalism, Adolf Hitler was rising to power in Germany. Technology was still progressing as global communication increased. Unfortunately, it was also the beginning of World War II in 1939. The behavioral school focused on trying to understand the factors that affect human behavior at work.

Behavioral Management Theory

Recognized employees as individuals with concrete, human needs, as parts of work groups, and as members of a larger society Two Groups: Interpersonel Behaviour approach and Group Behaviour approach Since management is process of getting things done by people,managers should understand human behaviour Emphasis is put on increasing productivity thru motivation and good human relations Motivation,leadership,communication,participative management & group dynamics are its central core

1. Robert Owen The father of modern personnel management The quality and quantity of workers output influenced by conditions on and off the job Scottish businessman and reformer who advocated for better treatment of workers. Claimed that a concern for employees was profitable for management and would relieve human misery.

2. Abraham Maslow Needs-based theory of motivation

physiology security affiliation esteem self-actualization

3. Hugo Munsterberg (1912) : Application of psychology to industry and management 4. Walter Dill Scott ( 1910,1911) : Application of psychology to advertising,marketing & personnel 5. Vilfredo Pareto : Father of Social systems approach to organization and management 6. Elton Mayo 7. Douglas McGregor s Theory X and Theory Y

The Hawthorne Studies were the most important contribution to the development of organizational behavior. 1. This series of experiments conducted from 1924 to the early 1930s at the Western Electric Company Works in Cicero, Illinois, were initially devised as a scientific management experiment to assess the impact of changes in various physical environment variables on employee productivity.
After Harvard professor Elton Mayo and his associates joined the study as consultants, other experiments were included to look at redesigning jobs, make changes in workday and workweek length, introduce rest periods, and introduce individual versus group wage plans.

The researchers concluded that social norms or group standards were key determinants of individual work behavior. Although not without criticism (concerning procedures, analyses of findings, and the conclusions), the Hawthorne Studies stimulated interest in human behavior in organizational settings.

Behavioral Management Theory Results

Managers discover

What employees want from work

How to enlist cooperation and commitment How to unleash talents, energy, and creativity

How Do Todays Managers Use the Behavioral Approach? 1.The behavioral approach assists managers in designing jobs that motivate workers, in working with employee teams, and in facilitating the flow of communication within organizations. 2.The behavioral approach provides the foundation for current theories of motivation, leadership, and group behavior and development.

Quantitative Management Theory

Quantitative Management Theory

Evolved out of the development of mathematical and statistical solutions to military problems during World War II. Involves the use of statistics, optimization models, information models, and computer simulations to improve management decision making for planning and control.

Emphasized mathematical approaches to management problems Applied to every aspect of business But many aspects in management cannot be modeled

How Do Todays Managers Use the Quantitative Approach? 1.The quantitative approach has contributed most directly to managerial decision making, particularly in planning and controlling. 2.The availability of sophisticated computer software programs has made the use of quantitative techniques more feasible for managers.

Systems Management Theory

When the systems concept began in the 1950s, the decade echoed the return of conservative values and the return to the 1920s-type consumer society. There was a high rate of unionization in industry and most of the technology supported the Cold War. During this time, most of the earlier internal American problems such as womens rights and civil rights were now suppressed as Americans settled into suburban life; however, suppressing these social issues would have a significant impact on the 20th Century.

Systems Management Theory

The theory that an organization comprises various parts that must perform tasks necessary for the survival and proper functioning of the system Systems concepts have broad applicability Systems have boundaries but still interact with external environment

Defines a system as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole
Closed system : a system that is not influenced by and does not interact with its environment Open system: a system that dynamically interacts with its environment Stakeholders: any group that is affected by organizational decisions and policies

1. Chester Barnard The task of managers is to maintain a system of cooperative effort in a formal organization. Suggested a comprehensive social systems approach to managing.

The Organization as a System

Contingency Management Theory

A theory based on the premise that managers preferred actions or approaches depend on the variables of the situation they face Approaches depend on the variables of the situations Draws on all past theories in attempting to analyze and solve problems Is integrative Summarized as an it all depends device Tells managers to look to their experiences and the past and to consider many options before choosing Encourages managers to stay flexible

 The Contingency Approach

Replaces more simplistic systems and integrates much of management theory.

Four Contingency Variables

Organization size (coordination) Routineness of task technology (task complexity dictates structure) Environmental uncertainty (change management) Individual differences (managerial styles , motivational techniques, and job design A few of the major contributors are Fred Fiedler, Joan Woodward, and Paul Lawrence

Popular Contingency Variables Organization size

As size increases, so do the problems of coordination.

Routineness of task technology

Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or non-routine technologies.

Environmental uncertainty
What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment.

Individual differences
Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations.

Management Theory Jungle

Variety of approaches to management analysis Great amount of research Great no. of differing views Resulted in much confusion as to what management is? What management theory and Science are? How managerial events should be analysed? Harold Koontz defined this situation as the management theory jungle

14 Approaches
1. 2. 3. 4. 5. 6. 7. 8. Empirical/Case Approach Managerial Roles Approach Contingency or situational Approach Mathematical or Management Science Decision theory Approach Reengineering Approach Systems Approach Sociotechnical Systems Approach

9. Cooperative Social Systems Approach 10. Group Behaviour Approach 11. Interpersonel Behaviour Approach 12. McKinseys 7-S framework 13. TQM Approach 14. Management Process/Operational Approach

Role of Managers
Planning Selecting missions and objectives as well as the actions to achieve them,which requires decision making No real plan exists untill a decision-a commitment of human or material resources-has been made

Organizing Establishing an intentional structure of roles for people to fill in an organization Staffing Involves filling and keeping filled the positions in the organization structure Done by identifying workforce requirements,inventoring the people available, and recruiting,selecting,placing,promoting,appraising,pla nning the careers of,compensating,training both candidates and current jobholders

Leading Influencing people so that they will contribute to organizational and group goals Controlling Measuring and correcting individual and organizational performance to ensure that events conform to plans