Approaches

EVOUTION OF MANAGEMENT THOUGHT: FROM PRE CLASSICAL

TO MODERN APPROACH

EARLEY APPROACHES TO MANAGEMENT

Robert Owen (1771-1858)

• Realized the significance of human resources

• Proposed legislative reform that would limit number of working hours and restrict

the use of child labor.

Charles Babbage (1792-1871)

• Advocated the concept of ‘division of labor’

• Devised the profit sharing plan

EARLEY APPROACHES TO MANAGEMENT (Cont.)

Andrew Ure (1778-1887) and Charles Duplin (1784-1873)

Emphasized the various principles and

concept of manufacturing

Henry R. Towne (1844-1924)

•Considered the management as a separate field of systematic study.

•Realized the importance of business skills to run the business.

APPROACHES OF MANAGEMENT

Classical Behavioral Quantitative Modern

Classical Approaches

Scientific Management

Bureaucratic management

Administrative Management

MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES

Behavioral Approach

Group Influence

Hawthorne Studies

Maslow’s Need Theory

Theory of X and Theory of Y

Model I Versus Model II Values

MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES (Cont)

Quantitative Approach

Management Science

Operations Management

Management Information System

MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES

Modern Approaches

The System Theory

Contingency Theory

Emerging Approaches: Theory of Z and Quality Management

MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES (Cont)

CLASSICAL APPROACH

Scientific Management

Contribution of Frederick Winslow Taylor (1856-

1915)

Identified the problem of ‘Soldiering’- practice of

employees deliberately work in slow pace than their capacities.

Major Reasons of soldiering:

• Workers feared that if production is increased, other workers would loss their jobs.

• Faulty wages system leads towards slow work pace.

• Use of outdated method leads towards loss of efforts.

Basic elements of scientific management by Taylor:

• Need for developing scientific way of performing each job.

• Training and preparing workers to perform that particular job.

• Establishing harmonious relations between management and workers.

CLASSICAL APPROACH (Cont.)

Two major managerial practice that emerged from Taylor’s approach

Price rate incentive system: Taylor felt that wage system one of the major reasons of soldiering. To solve this problem he introduced price rate incentive system. The aim of the system to reward the worker who produce maximum output.

Time motion study: Jobs are broken down into various task or motions and unnecessary motions are removed to find out the best way of doing a job.

CLASSICAL APPROACH (Cont.)

Contribution of Frank and Lillian Gilbreth

CLASSICAL APPROACH (Cont.)

Mainly involved in exploring new ways for eliminating unnecessary motions and

reducing work fatigue.

Contribution of Henry L. Gantt

Remembered for his work on the task and bonus system and Gantt chart.

Main principles of Gantt chart:

• If the worker completed the work fast, received bonus.

• Foremen would be paid bonus for every worker who reached the daily standard.

• If all the workers under foreman reached the daily standard, he would receive extra bonus.

CLASSICAL APPROACH (Cont.)

Limitations of Scientific Management

• Over emphasis on problem solving from engineering point of view.

• Over emphasis on economic and physical needs, overlooked the social needs of workers

• Ignored the human desire for job satisfaction

CLASSICAL APPROACH (Cont.)

Administrative Theory

Focused on principles that could be used by manager to coordinate the internal activities of organizations

Contribution of Henri Fayol:

He divided the business operations into six activities:

Technical, Commercial, Financial, Security, Accounting and Managerial.

Also introduced fourteen principles of Management:

Division of work, Authority and responsibility, Discipline, Unity of command, Unity of direction, Subordinate the individual interest to general interest, Remuneration, Centralization, Scalar chain, Order, Equity, Initiative & Espirit de corps (Sense of unity).

CLASSICAL APPROACH (Cont.)

Bureaucratic Management

“Bureaucracy” referred to organizations that operate on a ration basis.

Contribution of Weber

Bureaucratic organization should be highly structured, formal and impersonal in nature.

Four major characteristics of bureaucracy:

• Work Specialization and division of Labor

• Abstract rules and regulations

• Impersonality of managers

• Hierarchy of organization structure

CLASSICAL APPROACH (Cont.)

Limitation of Administrative and Bureaucratic Approach

• Lack of Human Approach

• Contradictory principles (e.g. specialization and unity of command)

• Emphasis on rules and regulations, lack of individual creativity and flexibility.

• Ignored important aspect of organizational behavior ( e.g. Leadership, motivation, group dynamics)

BHAVIORAL APPROACH

Emphasized the individual attitude, behaviors & group process and recognized the significance of behavioral process in the work place.

Mary Parker Follet (1868-1933)Emphasized group influence and advocated the concept of power

sharing

Elton Mayo (1880-1949)

Recognized the group and work place culture on job performance.

Conducted famous experiment on Hawthorne Plant on illumination, relay assembly, interview, bank wiring.

His findings contradicted with pre-conceived notions:

• Group is the key factor of job performance (not individual)

• Perceived meaning and importance of work determined the output of the job (not fatigue).

• Work place culture sets production (not management)

BHAVIORAL APPROACH (Cont.)

Abraham Maslow (1908-1970)

Proposed need hierarchy model

According to this model human needs occur in the following hierarchical manner:

1. Physiological needs

2. Safety or security needs

3. Belongingness or social need

4. Self esteem or status need

5. Self actualization need.

BHAVIORAL APPROACH (Cont.)

Douglas McGregor (1906-64)

According to him there are two extreme sets of belief that different managers have about their workers. One is Theory X and other is Theory Y.

Theory X belief incorporates the workers are lazy, little ambitious, dislike work, want to avoid responsibilities.

Theory Y belief incorporates the workers are creative, innovative, willing to take responsibilities.

Chris Argyris

Classified the organization into Model I and Model II based on the employees’ set of value.

Employees of Model I organization are manipulative and not wiling to take the risks.

Workers in Model II organization are open to learning and less manipulative.

QUANTITATIVE APPROACHES

This approach focuses on achieving organizational effectiveness through the application of mathematical and

statistical concepts

Management ScienceStresses the use of mathematical statistical methods for decision making

Operation ManagementDeals with effective ways of production and timely delivery of products and services

Management Information System

Focuses on designing and implementing computer based information system for business organization

MODERN APPROACHES TO MANAGEMENT

System Theory

Provides managers a new way of looking at an organization as a whole and as a part of external environment. According to this theory Organization has four major components: inputs, transformation process, outputs and feedback.

Contingency Theory

This theory is known as situational theory. According to this theory there is no best way to manage all the situations. This theory suggests the managers to use their practice according to the situation

EMERGING APPROACHES

William Ouchi

Z Theory:

• Providing job security to ensure loyalty and long term association.

• Job rotation to develop cross-functional skills.

• Participation of employees in the decision making process.

• Use of informal control in the organization along with explicit performance measure.