Classical & Neo Classical Theories

Submitted By
Abhay Kpkoti
Submitted To
Mr Udit Pandey
Two Schools Of Thought
1. Classical Management (1800-1930)
Administrative Theory (Henry Fayol)
Scientific Management (Federick Taylor, Frank and
Lillian Gilbreth, Henry Gantt-Gantt Chart)
Structuralism School (Max Weber-bureaucracy)

2. Neoclassical Management and Organization Theory
(1930-1960s)
Human Relations School (Human Relations/Hawthorne
Experiments)
Behavioral School (Abraham Maslow, Douglas McGregor,
Rensis Likert, Chris Argyris, Frederick Herzberg, David
McClelland)
Historical Scenario
Machines

Productivity Consumer Cost


Demand Factories/ Workers


Best Possible Methord?
Issues related to Workers
Coloration between Humans & Machines
Lack of training
Large number of people working together
Authority Structures required.
Standard Operating Procedures
BIGGER BUSINESS WERE FACING BIGGER
PROBLEMS
Best Possible Method?

To manage is to forecast and plan, to
organize, co-ordinate and to control
Henry Fayol
Henry Fayols Administrative Theory
Father of Modern Management.
French CEO, Kamobol.
The success of an enterprise depends upon on
the admistrative ability of the its leaders to
manage people instead of its technical ability.
Many of these Principles have become common
knowledge today, but then they were insights.
Book written Management theory and
practice

Frederick Taylor
In the past the man has been first; in
the future the system must be first
Taylors Scientific Management
On June 23, 1903 Fredric Taylor spoke to a room
full of engineers on the topic ONE OF THE
BIGGEST THREAT TO AMERICAN SOCIETY
National Efficiency: far more significant than any
other problem faced then-optimum level
Book Principles of Scientific Management
One Word- Efficiency
Every Act could be reduced to a science.
Significance of human effort-
Social Incentive - Soldering
Economic Incentive- Fair days Work



Primary Objective of Management
Maximum Prosperity
Mutually Benefit Relationship
The Management should assume more
responsibility.
One perfect method was required instead of
many

Principle of Scientific Management
Established clear rules on how the work is to be
performed
Select, train & develop workers
Cooperate with workers & ensure that work was
being performed at previous conditions.
Equal distribution of the work & responsibility
between worker & administration
Eg- Fast Food Establishments

Henry Ford
Earlier-
Vulcan Motor Company- 2months for one car
Later-
1908- Ford set out to make new market , the work
is done.
Influenced by Fayol & Taylor
Eg- Wheel Making was broken down to 100 steps
Still 200 cars a day.

In the first assembly line of the world,
the car was dragged through a rope by
a few men, as the other workers
worked on it
This led to high labour dissatisfaction,
& high turnover ration only after a
month of its installment
In an assembly line , there could be
no soldering. The pace of the plant
was decided by the administration
Since Henry ford now was making
enough money, he rose the pay for
wokers ,5$ a day, which was quite a lot
in that time. New workers joined in.
Assembly Line
Max Weber
Webers Bureaucracy
Exercise of control on the basis of knowledge
Administrative models Monarchy
German Sociologist
Ideal System
Management based on the basis of rational legal
authority was more efficient than one based on
favoritism , Nepotism.
Against subjective nature of Monarchy
Loyal towards Supervisor & not towards
Organisation

Characteristics of Bureaucracy
A well defined hierarchy of command.
Management by rules & regulation
Division of labor & work specialization
Managers should maintain interpersonal
relationship with employees
Competence, & not personality is the basis of
job appointment
Formal written records

Examples Of Bureaucratic Organizations

Department of Motor Vehicles
Prisons
Police departments
Colleges and universities

Neoclassical Management and
Organization Theory
Human Relation Management
Hawthorne Studies
Maslow Need Hierarchy
Herzberg two factor theory

Human Relation Management
Huge shift from classical theories
Not only about Equipment, technology or
efficiency.
Employees Social , Personnel, Initiative
Motivational
Situation can be optimized.
Want to Succeed attitude-The workers will then
find a way
Psychological Relationships in the work force.
Principles of Human Relations
Approach


Need recognition and appreciation in workers
Workers are human beings & not machines
An organisation works not only through formal relations,
but also through informal relations
Workers need a high degree of job security and job
satisfaction.
Workers want good communication from the managers.
Members do not like conflicts and misunderstandings.
Workers want freedom
Employees would like to participate in decision making,
Hawthorne Background
40,000 workers.
Working condition = Difficult
No benefits
Pension Plan in 1906
Vacations one week after five years
Progressive Place to work
Good Wages

Objective To check the impact of illumination of
Workers Productivity.
Conducted by Elton Mayo
Result- Output went up among the experiment class
& continued to go up even when no lights.
Called of by National Assembly, Mayo Pesisted.
First Study on attitudes of the workers.
Mayo conducted other experiment related to
workers participation, initiative & motivation.
Productivity went up by 30%
Industrial History of working.
First Interviewing features
Industry have never got the peoples natural worth



Maslow
Researcher
Basic levels satisfied first to get to the higher
needs.
People are of which need hierarchy.
Maslows Hierarchy of Needs

Two Factor theory
Developed by Frederick Herzberg.
500 Accountants.
Extreme Dissatisfaction (Hygiene)- Benefits,
Pay, Job Security in workplace
Extreme Satisfaction(Motivational)-
Recognition, Achievements, advancements,
challenging work, fulfilling
Two factor Theory
Theory X & Theory Y
Given by McGregor
In 1960
Human Side Enterprise
Your management style is strongly influenced
by your beliefs and assumptions about what
motivates members of your team
Understanding your assumptions about
employees motivation can help you learn to
manage more effectively.

Theory X
Theory X assumes that employees are naturally unmotivated and dislike
working, and this encourages an authoritarian style of management.
According to this view, management must actively intervene to get things
done. This style of management assumes that workers:

Dislike working.

Avoid responsibility and need to be directed.

Have to be controlled, forced, and threatened to deliver what's needed.

Need to be supervised at every step, with controls put in place.

Need to be enticed to produce results; otherwise they have no ambition
or motivation to work.


Theory Y
Theory Y shows a participation style of management that is
de-centralized. It assumes that employees are happy to
work, are self-motivated and creative, and enjoy working
with greater responsibility. It assumes that workers:

Take responsibility and are motivated to fulfill the goals
they are given.

Seek and accept responsibility and do not need much
direction.

Consider work as a natural part of life and solve work
problems imaginatively.