Evolution of Management

By Asst. Prof. Shaili Mishra

Development of Management Thought
• Management thought refers to the theories that
guide management of people in the
organisations.
• Initially, these theories developed out of practical
experience of managers in the industrial
enterprises. Later on, they borrowed ideas from
other fields of study like science, anthropology,
sociology etc.
 Management theories
• Pre-scientific theories
• Classical theories
a. Taylor’s scientific management theory
b. Fayol’s administrative theory
c. Weber’s bureaucracy theory

• Behavioral theories
a. Human relations theory
b. Behavioral science theory

• Modern management theories

a. Quantitative theory
b. Systems theory
c. Contingency theory
d. Operational theory
Pre-scientific Management
Theories
• Important contributions are made by
- Charles Babbage
- James Montgomery
- Robert Owen
- Andrew Ure
- Charles Dupin
- Henry Robinson Towne
- James Watt and Mathew Robinson Boulton Watt
- Captain Henry Metcafe

These theories solved specific organizational problems but

these are not universally accepted theories that can be
applied to all organisations
 Classical theories

• They represent early works on management

and focus on increasing industrial output by
providing financial incentives to employees.
The classical approach was developed through
three main streams:
– Scientific management,
– administrative theory
– Bureaucracy
 Taylor’s scientific theory
• Taylor developed his theory on the basis of his work
experience in three companies: Midvale Steel works,
Simond Rolling mills and Bethlehem Steel company.
He is regarded as Father of Scientific Management.
• He focused on finding the best way to do the job by
eliminating wastage of men and material. He
developed time and motion studies to find optimum
time and nature of operations for successful
completion of tasks.
• He also introduced differential wage rate system to
pay more to productive workers.
 Principles of Taylor’s theory

• Rule of thumb should be replaced with science

• There should be harmony, not discord in group
actions.
• Cooperation, not individualism
• Maximum output, not restricted output
• Development of workers to their fullest capacity.
Techniques of scientific
management given by Taylor
• Time study
• Motion study
• Scientific task planning
• Standardization and simplification
• Differential piece rate system
• Functional foremanship
•
1. Work Study:

• Work study implies an organized, objective,

systematic, analytical and critical assessment of
the efficiency of various operations in an
enterprise.
• Work-Study includes the following techniques:
• (а) Method Study:
• (b) Motion Study:
• (c) Time Study or Work Measurement:
• (d) Fatigue Study:
 (а) Method Study:
• to know the best method of doing a particular
job
• It helps in reducing the distance travelled by
materials, and brings improvement in
handling, transporting, inspection and storage
of raw materials and goods.
 (b) Motion Study:
• Motion study is a technique which involves close
observations of the movement of body
• It is the study of the movement of an operator or a
machine to eliminate useless motions and find out the
best method of doing a particular job.
• The purpose of motion study is
– (i) to find and eliminate wasteful motions among the
workers,
– (ii) to design the best methods of doing various operations.
It leads to increase the efficiency of workers by reducing
fatigue and manual labour. It results in higher production
and productivity.
 (c) Time Study or Work
Measurement:
• Time study is the technique of observing and
recording the time required by a workman of
reasonable skills and ability to perform each
element of the tasks in a job
• The purpose of time study is to scientifically
determine the standard time for doing a job
under given condition.
 (d) Fatigue Study:
• Fatigue, physical or mental, has an adverse
effect on the worker’s health and efficiency.
• Fatigue is generally caused by long working
hours without rest pauses, repetitive
operations, excessive specialisation, and poor
working conditions.
 2. Standardisation of Tools and
Equipments:
• Efforts should be made to provide
standardised working environment and
methods of production to the workers.
• Standardisation would help to reduce spoilage
and wastage of materials, improve quality of
work, reduce cost of production and reduce
fatigue among the workers.
 3. Scientific Task Setting:

• It is essential to set a standard task which an

average worker source does during a working
day. Taylor called it a fair day’s work.
• He emphasized the need for fixing a fair day’s
work because it will prevent the workers from
doing work much below their capacity. The
standard task will act as a norm before the
workers. If no standard is set, the workers will
work below his capacity.
 4. Scientific Setting of Wage Rates:

• Taylor suggested the differential piece- wage

system. Under this system, higher rates are
offered to those workers who produce more
than the standard quantity.
• Taylor was of the view that the efficient
workers should be paid, from 30% to 100%
more than the average workers.
 5. Scientific Selection and Training:

• The management should design scientific

selection procedure so that right men are
selected for the right jobs.
• The first step in scientific selection is determining
the jobs for which workers are required.
• After that the most appropriate qualification,
training, experience and the level of efficiency for
the requisite post are determined.
• Employees are selected according to pre-
determined standards in an impartial way.
 6. Functional Foremanship:

• Functional foremanship is a form, of

organisation which involves supervision of a
worker by several specialist foremen.
• For instance, matters relating to speed of
work and repairs of machinery will be
supervised by the speed boss and the repair
boss respectively.
 Criticisms:-
• 1) Taylor’s scientific management was related to production
management. It takes practical view of management &
focuses attention only on the production management.
Taylor’s study of management has become the study of lower
level management. He stressed on efficiency on lower level.
He has neglected marketing, financial and decision making
aspects completely.
•
2) Scientific management is applicable to large scale
organization. It involves high expenditure. It is a luxury for
small scale organization. It involves research , experiment &
analysis. It is difficult for small scale organization.
3) It was also argued that devices of work analysis, time study &
motion & fatigue study can’t be applied in the practical life.
4) The idea of best way of doing a job was also criticized. Everyone
has his own natural style of work & he can give best only if he
is allowed to work in his style.The maximum efficiency will be
attained by the group & not by individual worker.
5) Wages of workers are not increased in a direct proportion of
productivity. It leads to exploitation to workers.
6) People are not ready to use the word ‘scientific’. The scientific
does not have any significance. Management is a social
science and not an exact science.
 CONTRIBUTION OF HENRY FAYOL
(ADMINISTRATIVE MANAGEMENT)
• Henry Fayol has been considered as the real father of
modern management. He was a French industrialist
and graduated as a mining engineer in 1860. In 1908,
Fayol contributed his famous “functional approach”
to the management literature.
• Fayol’s writings were first published in 1908 in
French, but up to 1918, it was not translated into
English. His ideas wee accepted after his death in
1925.
•Fayol found that activities of industries should be divided
into 6 group’s i.e
• Technical (production)
• Commercial (buying, selling and exchange)
• Financial (optimum use of capital)
• Security (protection of property)
• Accounting (including statistics)
• Managerial (all functions of management)
• Fayol also stressed that managers should possess
physical, mental, moral, educational and technical
qualities to conduct operations of a business enterprise.
• While giving management principles Fayol has
emphasized on two things:-
i. The principles of management can be followed in every
organization.
ii. These principles are not fixed. They are flexible.
• He has listed certain fundamental principles which are to
be adopted by managers in dealing with sub-ordinates.
• These 14 principles are world wide applicable.
1) Division of Work(specialization):-
2) Authority & Responsibility:-
3) Discipline:-
4) Unity of Command:-
5) Unity of Direction:-
6) Subordination of individual interest to general
interest:-
7) Remuneration:-
8) Order:-
9) Centralization:-
10) Scalar Chain: - (Straight line & Command)
11) Stability of Tenure:-
12) Equity:-
13) Initiative:-
14) Espirit De Corps:-
 1) Division of Work(specialization):-

• A business activity carried out by small scale

may be managed & controlled by proprietor.
As business expands, activities grow & need
more people to control those activities.
Organization is jointly managed by a group of
person. Fayol has advocated division of work
to take the advantage of specialization.
 2) Authority & Responsibility:-

• Authority represents a power enjoyed by a

person of his position in the organization. It may
be for taking decision, spending money or in
many other ways. Responsibility is obligation
created upon a person for the use of authority,
which is entrusted to him. These two terms are
co-related. Fayol suggested that there must be
balance between authority & responsibility.
 3) Discipline:-

• All the personnel serving in an organization

must follow discipline. Discipline is obedience,
application of behavior & energy shown by an
employee. Discipline may be self employed or
command discipline. Discipline can be
obtained lower remuneration, dismissal,
demotion of position. While applying such
circumstances proper proof should be taken
into account.
 4) Unity of Command:-

•
Each employee should receive order from
single superior. In the organization structure it
should be clearly stated that who is
responsible to whom? & who should receive
order from whom?
• 5) Unity of Direction:-
According to this principle each group of
activity with some objective must have
one head. There is a difference between unity
of command & unity of direction.
Direction is concerned with planning & unity
of command is concerned with
reporting.
• 6) Subordination of individual interest to general
interest:-
In an organization individual interest should not
be given any importance. The manager should
always keep organizational interest before him &
should determine such policies which will be
beneficial to entire group & not just few
personnel. It is responsibility to management to
create common understanding between all.
• 7) Remuneration:-
Every employee must be paid an adequate remuneration
for his services. Remuneration should be fair & should
provide maximum satisfaction to person who is working in
the organization. Personal factors such as demand for labor,
position of the labor & competition as well as cost of living
index should be taken into account.
• General Economic Conditions should be considered while
deciding the remuneration of an employee. In any case
exploitation of the worker should
be avoided.
• 8) Order:-
Fayol has suggested that at one position one person
should be appointed. Each person must have
appropriated position in organization.
•
9) Centralization:-
It means the extent to which authority should be
concentrated in the hands of top level management. It
may be centralized or decentralized. There are
limitations of complete centralization & complete
decentralization. Therefore, there should be proper
balance between this two.
• 10) Scalar Chain: - (Straight line & Command)
It shows the straight line of authority from highest level
to lower level for communication. Scalar chain is the
extract of organization chart & shows the responsibility
or position of everybody in an organization.
• 11) Stability of Tenure:-
Effort must be made to keep the employee
stuck to organization so that the labour
turnover can be low by keeping check on
administrative cost of organization. Care must
be taken to satisfy the staff otherwise there
will be bad effect & loss of labour.
• 12) Equity:-
Equity is combina tion of justice & kindness; equity in
treatment & behavior is liked by everyone & it brings
loyalty in the organization.

• 13) Initiative:-
Within the limits of authority & discipline manager
should encourage their employees for taking initiative.
Initiative is concern with thinking. Thinking leads
to execution of plan. Initiative increases energy on the
part of human being.
• 14) Espirit De Corps:-
This is a French term. It means manager is like a captain of a
team who is responsible to maintain high moral between all
workers. It may be possible by effective communication
among all persons in organization. His understanding &
differences in opinions should not be harmful. The best way
of taking such situation is to establish dialogue between
parties. Participation of workers in the process of decision
making is important.