Evolution Of Management & Approaches to Management

I. Pre-Classical Contributions

A number of individuals in the pre-classical period of the middle and late 1800s offered ideas

that laid the groundwork for subsequent, broader inquiries into the nature of management.
Among the principal pre-classical contributors are Robert Owen, Charles Babbage ,Andrew Ure
and Charles Duplin and Henry R Towne.

ROBERT OWEN (1771-1858): A successful British entrepreneur was well ahead of his time in

recognizing the importance of human resources. He became particularly interested in the

working and living conditions of his employees while running a cotton mill in New Lanark,
Scotland. As was common, the mill employed 400 to 500 young children, who worked 13-hour
days that included 1 hour off for meals. Although his business partners resisted some of his
ideas, Owen tried to improve the living condition of the employees by upgrading streets, houses,
sanitation and the educational system in New Lanark. At the time, Owen was considered to be
radical, but today his views are widely accepted. His ideas laid the groundwork for the human
relations movement. He is considered as a pioneer in the field of human resource management
process. He advocated the necessity of concern for the welfare of workers.

CHARLES BABAGE (1792-1871): An English mathematician is widely known as the father of

modern computing. His projects produced the world‘s first practical mechanical calculator and
an analytical engine that had the basic element of a modern day computer. Difficulties in
directing his various projects, however, helped him to explore new ways of doing things. In the
process, he made direct contributions to management theory.

Babbage was enthralled with the idea of work specialization, the decree to which work was

divided into various jobs. He recognized that not only physical work but mental work as well

could be specialized.

Babbage also devised a profit- sharing plan that had two parts, a bonus that was awarded for

useful suggestions and a portion of wages that was depended on factory profit.

Andrew Ure (1778-1857) and Charles Duplin (1784-1873):

They emphasized the necessity of management education, which paved the way for professionals

manning the management positions.

Henry Robinson Towne (1844-1924):

On reviewing the contributions of pre-classical theorists, it is clear that their emphasis was more
on developing some specific techniques to solve some identified problems. Because of their
obvious technical background, they could not think of management as a separate field. By and
large, they integrated management with their respective areas of specialization. It was Andrew
Ure, Charles Duplin, and Henry Robinson Towne who laid the foundations of the management
theories that ultimately shaped the management thoughts as we see today. Henry R. Towne
outlined the importance of management as a science and called for the development of

management principles.

II. Classical Approach:

The classical theory signifies the beginning of the systematic study of management organization.
It is often called the traditional theory. It can be traced historically to the 19th century prototype

industrial and military organizations. Several writers contributed to the classical thought in the
early years of the 20th century. They include Taylor, Fayol, Weber.

The classical theory incorporates three viewpoints:

(1) Taylor’s Scientific Management

(2) Fayol’s Administrative Management; and

(3) Weber’s Ideal Bureaucracy (an organization based on rules and regulations, formal relations,
specialization, etc.). All the three concentrated on the structure of organisation for greater
efficiency.

Salient features of classical approach are as follows:

1. The classical theory laid emphasis on division of labour and specialization, structure, scalar
and

functional processes and span of control. Thus, they concentrated on the anatomy of formal
organization.

2. The classical theorists emphasis organization structure for co-ordination of various activities.
They

ignored the role of human element.

3. The classical theory ignored the impact of external environment on the working of the

organization. Thus, it treated organizations as closed systems.

4. The efficiency of the organization can be increased by making each individual efficient.

5. The integration of the organization is achieved through the authority and control of the central

mechanism. Thus, it is based on centralization of authority.

6. There is no conflict between the individuals and the organization. In case of any conflict, the

interests of the organization should prevail.

7. The people at work could be motivated by the economic rewards as they were supposed to be

‘rational economic persons’.

II (a) Scientific Management Approach :

The impetus for the scientific management approach came from the first industrial revolution.

Because it brought about such an extraordinary mechanization of industry, this revolution

necessitated the development of new management principles and practices. The main
contributors

Notes to scientific management were Frederick W. Taylor, Henry L. Gantt, Frank Gilbreth,
Lillian

Gilbreth and Harrington Emerson.

F.W. Taylor (1865-1915) was the first person who insisted on the introduction of scientific
methods in management. He launched a new movement during the last decade of 19th century
which is known as ‘Scientific Management’. That is why, Taylor is regarded as the father of
scientific management. Taylor was an American engineer who responded to the challenges of
management around the turn of the century. During that period, productivity was very low,
labour became extremely dissatisfied and industries had to face frequent strikes and lockouts.
Taylor’s contribution was a system based on science whereby lower labour cost could be
achieved simultaneously with higher wages. He suggested the change in the mental attitudes of
the workers and the management to bring harmony in the industry. Scientific management means
application of scientific methods to the problems of management. Taylor advocated scientific
task setting based on time and motion study, standardization of materials, tools and working
conditions, scientific selection and training of workers and so on. It is to be noted that Taylor’s
thinking was confined to management at the shop level. However, he demonstrated the
possibility and significance of the scientific analysis of the various aspects of management.

To sum up, he laid emphasis on the following principles:

1. Science, not rule of thumb.

2. Harmony in group action, rather than discord.

3. Maximum output in place of restricted output.

4. Scientific selection, training and placement of the workers.

5. Almost equal division of work and responsibility between workers and managers

The basic idea behind the principles of scientific management is to change the mental

attitudes of the workers and the management towards each other. Taylor called it ‘Mental

Revolution’ which has three implications:

1. all out efforts for increase in production;

2. creation of the spirit of mutual trust and confidence; and

3. inculcating and developing the scientific attitude towards problems.

Taylor suggested that management should try to find the best methods of doing various

jobs and introduce standardized materials, tools and equipment so that wastages are
reduced. The management should select right types of people and give them adequate

training so as to increase the quantity and quality of production. It must create congenial

working conditions for optimum efficiency of the workers. It should perform the decision-

making function and should always try to give maximum cooperation to the workers to

ensure that work is done according to the scientific techniques.

The workers should also revise their attitude towards the management. They should not be

work-shirkers. They should be disciplined, loyal and sincere in fulfilling the tasks assigned to

them. They should not indulge in wastage of resources. Both the management and the

workers should trust each other and cooperate in achieving maximum production.

Thus, Taylor stood for creating a mental revolution on the part of management and

workers.It is to be noted that Taylor’s thinking was confined to management at the shop

level. However, he demonstrated the possibility and significance of the scientific analysis of

the various aspects of management.

To put the philosophy of scientific management into practice, Taylor and his associates
suggested

the following techniques:

1. Scientific task setting to determine a fair days; work.

2. Work study to simplify work and increase efficiency. This involves methods study, time study
and motion study.

3. Standardization of materials, tools equipment, costing system, etc.

4. Scientific selection and training of workers.

5. Differential piece-wage plan to reward the highly efficient workers.

6. Specialization in planning and operations through ‘functional foremanship’. Foremen in the

planning department include: route clerk, instruction card clear, time and cost clerk and shop

disciplinarian and those in the operations department include: gang boss, speed boss, repair boss

and inspector.

7. Elimination of wastes and rationalization of system of control.

Criticism of Scientific Management

Taylor’s scientific management was criticized not only by the workers and managers but also

by the psychologists and the general public. The main grounds of criticism are given below:

1. The use of the word ‘Scientific’ before ‘Management’ was objected because what is

actually meant by scientific management is nothing but a scientific approach to

management.

2. Taylor advocated the concept of functional foremanship to bring about specialization in

the organization. But this is not feasible in practice as a worker can’t carry out instructions

from eight foremen.

3. Scientific management is production-centered as it concentrates too much on the

technical aspects of work and undermines the human factor in industry.

4. Scientific Management ignores social and psychological needs of workers as it treats

them as extension of machines devoid of any feelings and emotions.

5. Trade unionists regarded the principles of scientific management as the means to exploit

labour because the wages of the workers were not increased in direct proportion to

productivity increases.

Many of the above objections were later remedied by the other contributors to scientific

management like Henri L. Gantt, Frank Gilbreth, Lillian Gilbreth and Harrington Emerson.

Many of the recommendations of Taylor are still being applied by the modern business
undertakings. In short, it can be said that Taylor was the pioneer in introducing scientific

reasoning to the discipline of management.

Henry Gantt, an associate of Taylor, developed the Gantt chart, a bar graph that measures

planned and completed work along each stage of production. Based on time instead of

quantity, volume, or weight, this visual display chart has been a widely used planning and

control tool since its development in 1910.

Frank and Lillian Gilbreth, a husband-and-wife team, studied job motions. In Frank‘s early

career as an apprentice bricklayer, he was interested in standardization and method study.

He watched bricklayers and saw that some workers were slow and inefficient, while others

were very productive. He discovered that each bricklayer used a different set of motions to

lay bricks. From his observations, Frank isolated the basic movements necessary to do the

job and eliminated unnecessary motions. Workers using these movements raised their

output from 1,000 to 2,700 bricks per day. This was the first motion study designed to

isolate the best possible method of performing a given job. Later, Frank and his wife Lillian

studied job motions using a motion picture camera and a split-second clock. When her

husband died at the age of 56, Lillian continued their work.

The basic ideas regarding scientific management developed include the following:

a) Developing new standard methods for doing each job

b) Selecting, training, and developing workers instead of allowing them to choose their own

tasks and train themselves

c) Developing a spirit of cooperation between workers and management to ensure that

work is carried out in accordance with devised procedures

d) Dividing work between workers and management in almost equal shares, with each
group taking over the work for which it is best fitted

II (b) Administrative Management Approach

The advocates of this school perceive management as a process involving certain functions

such as planning, organising, directing and controlling. That is why, it is also called the
‘functional’approach. Henri Fayol is regarded as the father of this school. Henri Fayol defined
management Notes in terms of certain functions and then laid down fourteen principles of
management which according to him have universal applicability.

Henri Fayol was a French executive who emphasized that management could be both taught and
learnt. His long practical experience is reflected in his paper.

“Administration industrielle et generale” (General and Industrial Management). Fayol tried to

develop a theory of management. He discussed the principles of general management and argued
that managerial ability can be acquired as any other technical ability. He not only recommended
formal teaching in management but also practised it by founding the Centre for Administrative
Studies in Paris. Thus, he was a pioneer in the field of management education. In brief, Fayol’s
views on management command acceptability even today because they are much in tune with the
requirements of the management in the present-day world.

Principles of Management (Contribution of Henri Fayol)

Henri Fayol was born in 1941 at Constantinople in France. He graduated as a mining engineer in
1860 from the National School of Mining. After his graduation, he joined a French Coal Mining
Company as an Engineer. After a couple of years, he was promoted as manager. He was
appointed as General Manager of his company in 1888. At that time, the company suffered
heavy losses and was nearly bankrupt. Henri Fayol succeeded in converting his company from
near bankruptcy to a strong financial position and a record of profits and dividends over a long
period.

Concept of Management:

Henri Fayol is considered the father of modern theory of general and industrial management. He
divided general and industrial management into six groups:
1. Technical activities: Production, manufacture, adaptation.

2. Commercial activities: Buying, selling and exchange.

3. Financial activities: Search for and optimum use of capital.

4. Security activities: Protection of property and persons.

5. Accounting activities: Stock-taking, balance sheet, cost, and statistics.

6. Managerial activities: Planning, organisation, command, co- ordination and control.

These six functions had to be performed to operate successfully any kind of business. He,

however, pointed out that the last function i.e., ability to manage, was the most important

for upper levels of managers.

The process of management as an ongoing managerial cycle involving planning, organizing,

directing, co-ordination, and controlling, is actually based on the analysis of general

management by Fayol. Hence, it is said that Fayol established the pattern of management

thought and practice. Even today, management process has general recognition.

Fayol’s Principles of Management: [14 Principles]

1. Division of work: Division of work or specialization alone can give maximum productivity

and efficiency. Both technical and managerial activities can be performed in the best

manner only through division of labour and specialization.

2. Authority and Responsibility: The right to give order is called authority. The obligation

to accomplish is called responsibility. Authority and Responsibility are the two sides of

the management coin. They exist together. They are complementary and mutually

interdependent.

3. Discipline: The objectives, rules and regulations, the policies and procedures must be

honoured by each member of an organization. There must be clear and fair agreement on
the rules and objectives, on the policies and procedures. There must be penalties

(punishment) for non-obedience or indiscipline. No organization can work smoothly

without discipline - preferably voluntary discipline.

4. Unity of Command: In order to avoid any possible confusion and conflict, each member of

an organization must received orders and instructions only from one superior (boss).

5. Unity of Direction: All members of an organization must work together to accomplish

common objectives.

6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is

also called principle of co-operation. Each shall work for all and all for each. General or

common interest must be supreme in any joint enterprise.

7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or

motivator for good performance. Exploitation of employees in any manner must be

eliminated. Sound scheme of remuneration includes adequate financial and non-financial

incentives.

8. Centralization: There must be a good balance between centralization and decentralization

of authority and power. Extreme centralization and decentralization must be avoided.

9. Scalar Chain: The unity of command brings about a chain or hierarchy of command

linking all members of the organization from the top to the bottom. Scalar denotes steps.

10. Order: Fayol suggested that there is a place for everything. Order or system alone can

create a sound organization and efficient management.

11. Equity: An organization consists of a group of people involved in joint effort. Hence,

equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate

joint collaboration.
12. Stability of Tenure: A person needs time to adjust himself with the new work and

demonstrate efficiency in due course. Hence, employees and managers must have job

security. Security of income and employment is a pre-requisite of sound organisation and

management.

13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organisation. Union

is strength. But unity demands co-operation. Pride, loyalty and sense of belonging are

responsible for good performance.

14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial

planning and execution of predetermined plans.

Criticism of Process of Functional Approach

Though the proponents of management process approach have made significant contribution to
the development of thought, their work suffers from the following limitations:

1. There is no single classification of managerial functions acceptable to all the functional

theorists. There is also lack of unanimity about the various terms such as management and
administration, commanding and directing, etc.

2. The functionalists considered their principles to be universal in nature. But many of the
principles have failed to deliver the desired results in certain situations.

3. The functional theorists did not consider the external environment of business.

4. Fayol overemphasized the intellectual side of management. He felt that management should be
formally taught, but he did not elaborate the nature and contents of management education
Bureaucracy:

Max Weber (1864-1920), a German sociologist contributed his views on bureaucracy to the

management thought. His primary contribution includes his theory of authority structure

and his description of organizations based on the nature of authority relations within them.
Essentially, it was Weber’s contention that there are three types of legitimate authority

which are as follows:

1. Rational-legal authority: Obedience is owed to a legally established position or rank within the
hierarchy of a business, military unit, government, and so on.

2. Traditional authority: People obey a person because he belongs to certain class or occupies a
position traditionally recognized as possessing authority, such as a real family.

3. Charismatic authority: Obedience is based on the followers belief that a person has some
special power or appeal.

Weber’s theory ‘bureaucracy’ recognizes rational-legal authority as the most important type

in organizations. Under traditional authority, leaders are not chosen for their competence, a

charismatic authority is too emotional and irrational. A bureaucratic organization which is

based on rational-legal authority display the following features:

1. Division of Work: There is a high degree of division of work at both the operative and
administrative levels. This leads to specialization of work.

2. Hierarchy of Positions: There is a hierarchy of authority in the organization. Each lower

position is under the control of a higher one. Thus, there is unity of command. The bureaucratic
structure is hierarchical in nature. It is like a pyramid in which quantity of authority increases as
one moves up the ladder in the organization.

3. Rules and Regulations: The rules, regulations and procedures are clearly laid down by the top
administration. Their benefits are as under:

(a) They standardize operations and decisions.

(b) They serve as receptacles of past learning.

(c) They protect incumbents and ensure equality of treatment.

4. Impersonal Conduct: There is impersonality of relationships among the organizational
members. The decisions are entirely guided by rules and regulations and are totally impersonal.
There is no room for emotions and sentiments in this type of structure.

5. Staffing: The personnel are employed by a contractual relationship between the employee and
employer. The tenure of service is governed by the rules and regulations of the organization. The
employees get a salary every months which is based on the job they handle and also the length of
service.

6. Technical Competence: The bureaucrats are neither elected not inherited, but they are
appointed through selection and the basis of selection is their technical competence. Promotions
in bureaucracies are also based on technical qualifications and performance.

7. Official Records: The administration of a bureaucratic organization is supported by an

efficient system of record-keeping. The decisions and activities of the organization are formally
recorded and preserved safely for future reference This is made possible by extensive filing
system. The filing system makes the organization independent of individuals. The official
records serve as the memory of the organization.

Criticism of Bureaucracy

It is not free of flaws. It may lead to many undesirable consequences such as:

1. The rules may be followed in letter and not in spirit. Thus, instead of providing guidelines,

the rules may become source of inefficiency. The rules may be misused or misinterpreted

by the persons concerned with the implementation of rules. Red tapism and technicalism may
follow as a result.

2. Bureaucracy does not consider informal organisation and inter-personal difficulties.

3. Bureaucracy discourages innovation because every employee is supposed to act as per rules
and regulations or to the secondary goals.

4. Goal displacement may take place in a bureaucratic organisation. The bureaucrats may give
priority to rules and regulations or to the secondary goals.

5. The bureaucratic structure is tall consisting of several layers of executives. Thus,

communication from the top level to the lowest level will take a very long time.

III . Behavioral Theory or Neo-classical Theory:

The Behavioral Theory of Management, often referred to as Neo-Classical Management

Theory, focuses upon individual behavior, motivations, and social interactions. Specifically, it

incorporates the study of human behavior through psychology, sociology, and anthropology.

Human Relations Approach

The classical writers including Weber, Taylor and Fayol neglected the human relations aspect.
The neo-classicists focused on the human aspect of industry. They modified the classical theory
by emphasizing the fact that organization is a social system and the human factor is the most
important element within it. They conducted some experiments (known as Hawthorne
Experiments) and investigated informal groupings, informal relationships, patterns of
communication, patterns of informal leadership, etc. This led to the development of human
relations approach. Elton Mayo is generally recognized as the father of the Human Relations
School. Other prominent contributors to this schools include Roethlisberger, Dickson, Dewey,
Lewin, etc.

The human relations approach is concerned with recognition of the importance of human
element in organizations. It revealed the importance of social and psychological factors in
determining workers’ productivity and satisfaction. It was instrumental in creating a new image
of man and the work place The neo-classical or human relations approach put stress on inter-
personal relations and informal groups at the work-place.

The human relationists argued that achievement of organizational objectives is impossible

without the willing cooperation of people and such cooperation cannot be automatically secured
or ordered. It has to be consciously achieved. The neo-classical approach advocated people
oriented organization structure which will integrate both informal and formal organizations.

The basic tenets of neo-classical theory or human relations approach are as under:

1. The business organization is a social system.

2. The behaviour of an individual is dominated by the informal group of which he is a

member.

3. An individual employee cannot be motivated by economic incentives alone. His social

and psychological needs must be satisfied to improve the level of motivation.

4. In an organization, it is ultimately cooperative attitude and not the more command which

yields result.

5. Management must aim at developing social and leadership skills in addition to technical

skills. It must take interest in the welfare of workers.

6. Morale and productivity go hand in hand in an organization.

Hawthrone Studies:

In 1927, a group of researchers led by George Elton Mayo and Fritz J. Roethlisberger at the

Harvard Business School were invited to join in the studies at the Hawthorne Works of

Western Electric Company, Chicago. The experiment lasted upto 1932. Earlier, from 1924 to

1927, the National Research Council made a study in collaboration with the Western Electric

Company to determine the effect of illumination and other conditions upon workers and

their productivity.

1. Illumination Experiment: This experiment was conducted to establish relationship between

output and illumination. The output tended to increase every time as the intensity of light was
improved. But the output again showed an upward trend when the illumination was brought
down gradually from the normal level. Thus, it was found that there is no consistent relationship
between output of workers and illumination in the factory. There were some other factors which
influenced the productivity of workers when the intensity of light was increased or decreased.

2. Relay Assembly Room Experiment: In this experiment, a small homogeneous work-group of

girls was constituted. Several new elements were introduced in the work atmosphere of this
group. These included shorter working hours, rest pauses, improved physical conditions, friendly
and informal supervision, free social interaction among group members, etc. Productivity and
morale increased considerably during the period of the experiment. Morale and productivity
were maintained even if improvements in working conditions were withdrawn. The researches
concluded that socio-psychological factors such as feeling of being important, recognition,
attention, participation, cohesive work group, and non-directive supervision held the key for
higher productivity.

3. Bank Wiring Observation Room Experiment: This experiment was conducted to study a group
of workers under conditions which were as close as possible to normal. This group comprised of
14 workers. After the experiment, the production records of this group were compared with their
earlier production records. There were no significant changes in the two because of the
maintenance of ‘normal conditions’. However, existence of informal cliques in the group and
informal production norms were observed by the researchers.

The Bank Wiring Experiment led to the following observations:

(a) Each individual was restricting output.

(b) The group had its own “unofficial” standards of performance.

(c) Individual output remained fairly constant over a period of time.

(d) Departmental records were distorted due to differences between actual and reported output or
between standard and reported working time.

4. Mass Interview Program: The researchers interviewed a large number of workers with regard
to their opinions on work, working conditions and supervision. Initially, a direct approach was
used whereby interviewers asked questions considered important by managers and researchers.
Later, this approach was replaced by an indirect technique where the interviewer simply listed to
what the employees had to say. The findings confirmed the importance of social factors at work
in the total work environment.

Contributions of Human Relations Approach or Hawthorne Studies

The human relationists proposed the following points as a result of their findings of the
Hawthorne experiments:
1. Social System: The organization in general is a social system composed of numerous
interacting parts. The social system defines individual roles and establishes norms that may differ
from those of the formal organization.

2. Social Environment: The social environment on the job affects the workers and is also affected
by them. Management is not the only variable. Social and psychological factors exercise a great
influence on the behaviour of workers. Therefore, every manager should adopt a sound human
approach to all organizational problems.

3. Informal Organization: The informal organization does also exist within the frame work of
formal organization and it affects and is affected by the formal organization.

4. Group Dynamics: At the workplace, the workers often do not act or react as individuals but as
members of groups. The group determines the norms of behaviour for the group members and
thus exercises a powerful influence on the attitudes and performance of individual workers. The
management should deal with workers as members of work group rather than as individuals.

5. Informal Leader: The informal leader sets and enforces group norms. He helps the workers to
function as a social group and the formal leader is rendered ineffective unless he conforms to the
norms of the group.

6. Communication: Two-way communication is necessary because it carries necessary

information downward for the proper functioning of the organization and transmits upward the
feelings and sentiments of people who work in the organization. It will help in securing workers’
cooperation and participation in the decision-making process. Workers tend to be more
productive when they are given the opportunity to express their feelings, opinions and
grievances. This also give them psychological satisfaction.

7. Non-economic Rewards: Money is only one of the motivators, but not the sole motivator of
human behaviour. The social and psychological needs of the workers are very strong. So non-
economic rewards such as praise, status, interpersonal relations, etc. play an important role in
motivating the employees. Such rewards must be integrated with the wages and fringe benefits of
the employees.

8. Conflicts: There may arise conflicts between the organizational goals and group goals.
Conflicts will harm the interest of workers if they are not handled properly. Conflicts can

be resolved through improvement of human relations in the organisation.

Criticism of Human Relations Approach

The human relations approach has been criticized on the following grounds:

1. Lack of Scientific Validity: The human relationists drew conclusions from Hawthorne

studies. These conclusions are based on clinical insight rather than on scientific evidence.

2. Over-emphasis on Group: The human relations approach over-emphasises the group and

group decision-making.

3. Over-stretching of Human Relations: It is assumed that all organisational problems are

amenable to solutions through human relations.

4. Limited Focus on Work: The human relations approach lacks adequate focus on work.

5. Over-stress on Socio-psychological Factors: The human relations approach undermines

the role of economic incentives in motivation and gives excessive stress on social and

psychological factors.

6. Conflict between Organizational and Individual Goals: It view conflict between the goal

of the organization and those of individuals as destructive