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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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Principles of Management
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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Principles of Management
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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Scientific Management
ManagementManagement
Science
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Scientific Management
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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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Hawthorne Experiments
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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Hawthorne Experiments
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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Hawthorne Experiments
o Hawthorne Effect :
Sympathetic supervision
Performance increased simply because of added
attention and not because of specific factors
being tested
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Hawthorne Experiments
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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Hawthorne Experiments
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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Hawthorne Experiments
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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BehaviouralSciences Approach
Douglas McGregor
Rensis Likert
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Maslows NeedHierarchy
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BehaviouralSciences Approach
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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BehaviouralSciences Approach
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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Quantitative Approach
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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Quantitative Approach
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