Management Principles and Theories

8/9/2019 Management Principles and Theories

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Management Theories


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Classical Theory

o Inter-related functions

o

Guiding principleso Bureaucratic structure

o Reward-punishment nexus


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Classical Theory


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Bureaucracy

o Given by MAX WEBER, the German

Sociologist, through his work The Theory of

Social and Economic Organisation in 1920

o An organisation characterised by

rules, procedures, impersonal relations, and

elaborate and fairly rigid hierarchy of authority-

responsibility relationships


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Elements ofBureaucracy

o Hierarchy

o Division of work

o Rules, Regulations and Procedures

o Records

o Impersonal relationships

o Administrative class


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Administrative Theory

o Given by Henry Fayol, the French

Industrialist

o Most significant publication:

General and Industrial Management in

1916


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Administrative Theory

Functions of management originally given

by Fayol


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Principles of Management

o Division of Work

o Parity of Authority and Responsibility

o Discipline

o Unity of Command

o Unity of Direction


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o Subordination of Individual to General

Interest

o Fair Remuneration to Employees

o Centralisation and Decentralisation

o Scalar Chain

o Order


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o Equity

o Stability of Tenure of Personnel

o Initiative

o Esprit de Corps


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Scientific Management

o Given by Frederick W. Taylor

o F. W. Taylor regarded as Father of ScientificManagement

o Started in the Midvale Steel Company in USA

in the early 20th century and widely adopted

in Western European countries


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ManagementManagement

Science


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Principles ofScientific Management

o Development of a science for each element

of mans work

o Scientific selection, training and

development of workmen

o Close cooperation between workers and

management


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Principles ofScientific Management

o Division of responsibility between

management and workers

o Mental Revolution

o

Maximum prosperity for employers andemployees


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FunctionalForemanship


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Taylor Vs. Fayol

Basis of Difference Taylor Fayol

Perspective Operative and shop

floor level

Top level

oc s Technical side of

or

d inistrative side

of or

ttention Increasing

prod ctivity thro gh

or si plification,

ti e and otion

st dy

I proving overall

ad inistration by

observing certain

principles

N ber of s periors One or er, ore

specialised s periors

One or er, one

s perior


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Taylor Vs. Fayol

Basis of Difference Taylor Fayol

Techniques used Scientific

measurement of

work through

experimentation and

observation

Personal experiences

passed on in the

form of universal

principles of

management

Personality Scientist Practitioner

Major contribution Provided the basis

for accomplishments

on the shop floor

Produced a

systematic theory of

management which

can be studied,

analysed and applied


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Neo-Classical Theory

Emphasis on

discipline and

control

Social Aspects of

a workers job

were ignored

Human RelationsTheory

Modified classical

theory with insights

from behavioural

sciences like

psychology, sociology

and anthropology


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Neo-Classical Theory

o Gained popularity after famous studies of

human behaviour in work situations conducted

at Western Electric Company from 1924 to1933.

o Studies became known as the Hawthorne

Studies

o Elton Mayo, Founder ofHuman Relations

theory


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Employees makingtelephone relays

Test Group

Intensity of lightsystematically

varied

Control Group

Light was heldconstant

Hawthorne Experiments

o Illumination Experiment


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o Relay Assembly Experiments

Smallgroup ofworkers

(Test

Group)

changing thepay rules

Gi ingfrequent

reaks

Pro iding foodduring the

reaks

Shortening ofworkday and

workweek


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o Hawthorne Effect :

Workers awareness that they are part of the

experiment

Special attention and treatment given to

workers

No usual restrictions imposed


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o Hawthorne Effect :

Sympathetic supervision

Performance increased simply because of added

attention and not because of specific factors

being tested


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o Interviewing Programme

3 year long interview

Covering more than 21000employees

To find out the reasons for

increased productivity

Employees were allowed

to talk freely


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o Bank Wiring Room Experiment

Small group of workers in bank wiring room

Paid according to individual and groupperformance

Expected that productivity will increase


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o Bank Wiring Room Experiment

Group established its own standards ofoutput

Productivity decreased


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Features ofHuman Relations

o Strive to create a positive work environment

People can fulfill their own needs as well as

those of the organization

o The focus is on People

When people management simulates more and

better work, we have sound human relations


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Features ofHuman Relations

o The ultimate goal: To make workers more

productive

not just happier

Motivating people to peak performance


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Human Relations in Action

The Individual The Work Environment

The Work Group The Leader


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BehaviouralSciences Approach

o Applies the knowledge of behavioural

sciences psychology, sociology and

anthropology to manage people

o Contribution by a number of Behavioural

Scientists

Abraham Maslow

Chris Argyris


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Douglas McGregor

Rensis Likert


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Maslows NeedHierarchy


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o Behavioural Scientists emphasised on:

Strong humanist organisation

Management should deal with complex humanbeings in different ways

Self-direction, self-control, self-monitor,

creativity

People to be treated as assets


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Laid the foundation for a new discipline

Human Resource Management

Contributions to the understanding ofmotivation, group behaviour, inter-personal

relationships at work

Result of the approach job enrichment,

management by objectives, positive

reinforcement


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Human Relations Vs. HR Approach

Human Relations Human Resources

1) People need to be liked and

respected

1) In addition to this, they want

to contribute to the

accomplishment of objectives

2) Manager should explain his

plans to the subordinates and

discuss any objections they might

have

2) The manager should allow

participation in important

matters as well as routine ones

) Permitted to exercise self-

direction and self-control to

carry out plans within narrow

limits

) ontinually try to expand the

subordinates use of self-control

and self-direction


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Quantitative Approach

o Focuses on the use of mathematics,

statistics and information aids to support

managerial decision-making and

organisational effectiveness

o Three main branches have evolved over the

years:

Management Science


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Operations Management

Management Information Systems

o Offers quantitative aids to decision-making

Develops quantitative tools to assist in providingproducts and services

o Primary focus is on decision-making through

quantitative tools

Managerial choices in any situation depend on

criteria such as costs, revenues, return on

investment, impact on other areas etc.


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o Heavy emphasis is put on computers and

their processing capabilities

Final solutions to problems are reduced tomathematical formulae and these are subjected

to further analysis and processing to find viable

alternatives


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Systems Approach

o Big picture approach

o Attempts to view the organisation as a

single unified purposeful entity, composed

of interrelated parts

o Gives managers a way of looking at an

organisation as a whole rather than dealing

separately with various parts


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Systems Approach

o Job of a manager is to ensure that all parts

of the organisation are coordinated

internally


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SituationalApproach

o Management methods used in one

circumstance seldom work the same way in

otherso No single way is best for solving all

situations

o Appropriate managerial action depends on

the parameters of the situation

Management Principles and Theories

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