• Present management is outcome of reactions and practices of
  management appeared in different periods
• Many theories, approaches and principles were developed in
  historical sequences
• Robert Owen made a significant contribution in staffing function
• Charles Babbage advocated idea of profit sharing, group decision
  making, division of labor and mechanization
• Hennery Robinson suggested team work for high productivity
• Henry Metcalfe developed system of controls for better
  administration

• Initial stage of development of management thought
• Focuses on efficiency and productivity through optimum use of
  resources
• Includes three approaches to management such as Scientific
  Management, Administrative Management and Bureaucratic
  Management
• These three were propounded on almost similar assumptions and
  were complementary to each other

• Means the organized study of work, analysis of work in micro level
  and systematic management of workers’ performance
• The philosophy which discards the conservative traditional methods
• F.W. Taylor, a mechanical engineer developed this theory as outcome
  of long experience, devotion and academic enhancement
• He suggested to develop the best scientific method by observations,
  experimentation and reasoning on facts and truth for doing each
  element of job
• Also called the ‘Taylor System or Taylorism’ he is known as ‘Father of
  Scientific Management’

• Science, not Rule of Thumb; suggest for applying scientific methods
• Harmony, not Discord; focuses on team spirit among the members
• Co-operation, not Individualism; essential for organizational goal
• Maximum Output, not Restricted; large scale production for optimum
  utilization of resources, more profit and benefit to stakeholders
• Scientific Selection and Development of Workers; ability and skill for
  each job should be scientifically specified
• Mental Revolution; changing the attitudes, beliefs and thought of
  employees and management towards each other

• Application of differential payment system(i.e. piece rate system)
• Focuses on optimum utilization of resources for high productivity
• Emphasis on large scale production to minimize unit production cost
• Scientific selection, training and development of employees
• Close relation, harmony and cooperation between employees and
  management
• Use of one best method for doing each job
• Financial incentives to motivate workers

• Neglects human aspects, regards it as parts of machines
• Only financial incentive is not sufficient to motivate workers
• More emphasis on technical aspects rather than other aspects
• Fails to address value of team work for productivity and efficiency
• ‘One best method’ suggested by Taylor may not be applicable in
  modern, dynamic and complex situation
• Expensive to develop and adopt scientific methods of production

• Henry Fayol, a French industrial and mining engineer is pioneer
• Focuses on identification of the best method to run an organization
  rather than a job
• Known as ‘father of general or administrative management’
• Age of 19 as mining engineer and later became director of company
• Developed 14 principles of management, gave unified concept of
  management, grouped business activities into six categories and
  published book of administrative management

Principles of Administrative Theory
1 Division of Work
2 Discipline
3 Unity of Command
4 Unity of Direction
5 Remuneration
6 Centralization
7 Scalar Chain
8 Order
9 Equity
10 Initiative
11 Subordination of individual interest to
the general interest
12 Authority and Responsibility
13 Stability of tenure of personnel
14 Esprit De Corps

Contributions of Administrative Management

• Proposes the clear ,definite and acceptable five functions of
  management; planning, organizing, commanding, coordinating and
  controlling
• Universally applicable principles of management
• Grouping of business activities into major six categories; technical,
  commercial, financial, security, accounting and managerial
• Introduction of management as a separate discipline
• Recognized the essential skills for managers such as physical, mental,
  moral, educational, technical, experience etc.
• Provides macro approach to management to deal with general
  problem
  

Limitations of Administrative Management

• Ignores human relation and behavior in organization only
  management oriented
• Fails to provide clear idea to apply principles as per situation
• Expensive and time consuming to bring in practice
• Principles developed by Fayol are only based on personal experience
• Does not consider the importance of informal structure or groups

• Refers to administrative system governing any large organization
• Max Weber, a political economist and sociologist, propounded this
• Contains major two element; hierarchical structure and clearly
  defined rules, regulations and procedures
• Characterized by division of labor, clear hierarchy, detailed rules and
  regulations, impersonal relation
• Acts as remedy to provide grounds for organizing group efforts

Principles of Bureaucratic Management

• Formal rules and procedures; no one can break the rules and
  procedures of the organization
• Functional specialization; jobs are assigned to persons on the basis of
  functional specialization
• Well defined hierarchy of authority; should be clear scalar chain of
  authority from top to bottom level, each superior controls the
  immediate subordinates and s/he is controlled by immediate superior
• Technical competence for employment; employees should be
  selected on the basis of technical qualification, skills and experience
  needed for the job
• Supervision by high authority; supervision by higher authority(i.e.
  superior) is necessary to solve problem, control and maintain
  discipline among workers
• Decisions should be recorded; all the decisions made by
  management should be recorded for future reference
• Impersonal relation; interpersonal relation among organizational
  members should be based on authority, hierarchy and rules to avoid
  discrimination, nepotism and favoritism

Contributions of Bureaucratic Management

• This model is useful to manage big and complex organization
• Chain of command is beneficial to maintain superior-subordinates
  relationship and fix responsibility
• Functional specialization and technical competence support
  productivity and improve efficiency
• Clearly defined rules and procedures are helpful for smooth
  functioning of organization
• Impersonal relation facilitates to prevent biasness among members
• Recorded decisions facilitates future planning and policies

Limitations of Bureaucracy Theory

• Very rigid rules and formalities(i.e. red tapism) can brings inflexibility
• Lengthy and time consuming procedures are tedious and monotony
• Ignores informal personal relation, i.e. neglects humanities
• Lacks effective communication due to formal rules and regulation
• Lacks innovation and creativity due to over dependency on rules and
  regulations
• can not be changed with complex and dynamic business environment

• Based on classical perspective and also known as neo-classical theory
  of management
• Identified the value of human aspect and group behavior rather than
  one best method, structures, rules of classical approach
• Proposed humanistic and people oriented ideas in the organization as
  human relation and behavioral approach

Human Relation Movement: Hawthorne Studies
Elton Mayo and his associates conducted series of
research studies at the Hawthorne plant of Western Electric
Company, major experiments are as follows-

• Illumination Experiments; measuring impact of lighting on
  productivity of workers; changing light in experimental group
  and constant in control group but in both condition
  productivity increased; informal social relations among
  workers was reason
• Relay assembly test room experiments; determining effect of
  changing working conditions on productivity; six women employees
  of relay assembly were isolated in a room and changed working
  condition like shorter working hours, rest periods; but productivity
  increased when these changes were withdrawn ;factors responsible
  for productivity were special attention, friendly supervision etc.
• Mass interviewing program; about 21000 workers were interviewed
  over 3 years to determine their attitude and work behavior; direct
  questions were asked in 1st phase and indirect interviews were taken
  in 2nd phase where employees were made free to talk; informal
  relations, autonomy, psychological needs had greater impact
• Bank wiring observation room experiment; a small group of
  14 male workers was formed to explore the impact of
  informal group norms and financial incentives on
  productivity; it was expected that highly efficient workers
  would bring pressure on less efficient workers to increase
  output but they established their own standard of output;
  informal group norms had greater impact on productivity
  rather than financial incentives

Contributions of Behavioral Perspective

• Shifted the focus of technical aspect to the human and social side of
  the organization
• Emphasis on informal and personal relationship among employees
• Identified the importance of non-financial incentives to motivate
• Highlighted the importance of team work, friendly supervision,
  autonomy for better performance and behavior of employees
• Identified the value of respect, dignity, special attention on employee
  efficiency
• Provide many motivational theories to motivate and retain employees
  

Limitations of Human Relation and Behavioral
Theory

• Gives more emphasis on human aspects rather than work
• Difficult to understand complex human behavior by managers so
  assumptions of theories are vague
• Informal and personal relationship in organization may minimize the
  morale and discipline of formal organizational structure
• Fails to consider the environmental and situational factors
• Experiments were conducted under controlled situations, findings
  may not be applicable in real practice

• An improved and mature version of human relation theory
  and concerned with scientific analysis and understanding of
  human behavior in organization
• Provides important insights into importance of motivation,
  group dynamics and interpersonal relationship in
  organizations
• Abraham Maslow, Douglas McGregor, Frederic Herzberg etc.
  are major contributors

• Physiological Needs; basic human needs essential for survival;
  includes food, shelter, air, clothing etc. fulfilled by reasonable
  remuneration
• Safety Needs; related to economic, physical and job security; become
  pro-dominant after satisfying basic needs; includes permanent job,
  protection against accidents, diseases, security in old age and risk
• Social Needs; feeling loved and accepted by others; includes need for
  belongingness, love, affection, care and friendship; emotional
  relationship drives human behavior and can motivate such people by
  providing chance to interact with each other, developing team etc.

• Ego/Esteem Needs; high order needs and related to prestige and
  status of person; when satisfied they produce feelings of confidence
  and worth; includes power, dignity, recognition, appreciation etc.
  fulfilled by providing challenging jobs, authority and autonomy,
  opportunity for leading etc.
• Self-actualization needs; highest level of needs and concerned with
  achieving a person’s mission of life; may be described as the full
  utilization of capabilities and potentialities; are unique in nature and
  can never be fully satisfied; satisfied by providing challenging jobs,
  encouraging creativity, autonomy

• Hygiene Factors; are external to job and also called dissatisfiers or maintenance
  factors; do not motivate workers but the absence cause dissatisfaction so must
  be maintained; involves compensation, job security, organizational policies,
  leadership, working condition, labor relation etc. can be compared with lower
  level needs of Maslow’s need hierarchy
• Motivating factors; related to job contents and also known as satisfiers or
  motivators; presence of these factors create high level of motivation and
  satisfaction but their absence do not cause dissatisfaction; involves recognition,
  achievement, advancement, personal growth, responsibility etc. can be
  compared with higher level needs of Maslow’s need hierarchy

• A management professor, developed the theory X and Y with two
  assumptions about human behavior
• Theory X; represents a negative view about people like naturally
  people are lazy, have low ambition, dislike work, avoid
  responsibility, require close direction and direct control
• Theory Y; represents positive view about people; assumes that
  people are more optimistic and ambitious, self-directed and
  motivated, self- controlled and creative, enjoy the work as playing
  and eating, highly responsible and committed to organizational
  goal

• Concerned with developing and applying mathematics, statistics and
  other quantitative tools for solving managerial problems
• Assumes managerial problems can be described in terms of
  mathematical symbols and data
• Originated during second world war for best use of limited resources
  and proved an effective mean for maximizing resources
• Linear programming, game theory, sampling theory etc. are
  quantitative theories for resource allocation and problem solving

Contributions of Management Science Theory

• Believes on logical process for maximizing productivity and
  managerial efficiency
• Facilitates the production and operation management
• Focuses on application of computer and IT in field of management
• Encourages solving managerial problems objectively
• Facilitates the replacement of intuition by factual data and logical
  analysis
• Advocates participation in the decision making process

Limitations of Management Science Theory

• Does not deal with quality and human aspect of organization
• Very complex approach and assumptions may not be realistic
  in the reality
• All the data and information may not be reliable and valid
• Gives more emphasis on technical aspects
• Not appropriate for organizing, staffing and leading function

• Herbert Simon, an American political scientist, main contributor
• Looks management as a decision making process and managers as
  decision makers
• Rational decisions can be made based on reliable data and formal
  process
• Managers have reliable and sufficient data for making decisions
• Suggest formal decision making process with steps- defining
  problem, identifying alternatives, evaluating and comparing
  alternatives and selecting the best alternative

Contributions of Decision Theory

• Provides proper guideline to take quick and rational decisions
• Special attention towards participative decision making process
• Emphasizes the importance of informal decision on formal decisions
• Focuses the importance of information management, mathematical
  tools and techniques for effective decision

Limitations of Decision Theory

• Fails to give overall concept of management
• Ignores human aspects in organization
• Can not be applied in human nature functions like organizing, staffing
  and leading
• Fails to consider impact of situation on decision making
• Very complex, managers rarely have perfect information

• May be defined as a set of interrelated and interdependent parts
  working together as a network (body)
• Assumes an organization as an open system which interact with
  environment
• An organization is a system composed of four parts such as people,
  task, structure and technology
• Organizational system has four major components; inputs,
  processing, output and feedback

• Inputs; gets inputs such as human, financial, physical and
  informational resources from the environment
• Processing; inputs go through processing where they are planned,
  organized, directed and controlled to meet objectives
• Output; product or result of the system; goods, services, profits, goal
  achievement, satisfaction
• Feedback; providing response or reaction about system by connecting
  the output to its inputs
• Environment; system regularly interact with its environment; works
  under the influence of environment

Contributions of System Theory

• Considers the impact of environment in management and
  organization
• Takes organization as an integrated body of various components and
  subsystems
• Provides conceptual framework for viewing an organization
• Gives equal importance to both internal and external context of an
  organization
• Provides a good basis for planning, executing and controlling

Limitations of System Theory

• Does not consider human factors of an organization
• Very abstract and vague so can not be easily applied in practice
• Fails to specify the nature of interaction and interdependence
  between organization and its environment
• Not relevance to small organization
• Fails to provide specific guidelines and tools of management to
  managers

• Situational approach was developed in 1970s as a practical approach to
  management
• Assumes no one best method /way to solve managerial problem
• Management is situational in nature hence no plans, structures, leadership
  styles will fit in all situation and people
• Managers must understand the uniqueness and complexity of each
  situation
• Suggest ‘if-then’ model to management with dependent variable if and
  independent variable then
• Organizational size, nature of task and technology, environmental
  uncertainty, individual differences are major contingency variables

Contributions of Contingency Theory

• Suggest managers to think in analytical, critical and multi-dimensional
  ways
• Enables managers becoming innovative and creative
• Integrates different school of thoughts and applies as per situation
• Applicable in planning, organizing, leading functions
• Managers have more freedom in decision making
• Makes managers more sensitive and alert about situations

Limitations of Contingency Theory

• Ignores the universality of principles
• costly and time consuming to analyze situations
• Fails to consider the human behavior in an organization
• Not applicable for all types of managerial issues
• Fails to enlist all contingency variables