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SCHOOLS OF
MANAGEMENT THOUGHTS
Prepared by
Sindhu Divakaran
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Thinking on management as a separate field of learning and
practice began early in 19 th Century with Industrial Revolution . It
was this time that persons like Robert Owen , Charles Babbage ,Metcalf and Hentry Robinson Towne expressed their ideas on the
ways and means of making management practices more effective
and efficient.The evolution of modern management thinkingbegins in the nineteenth century and flourished during the
twentieth. The twentieth century has witnessed a revolution in
management theory ranging from classical theory to the Japanesemanagement approach.Today‘s management theory is the result
of the interdisciplinary efforts of many people.
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Robert Owen was primarily credited with making
specific suggestions regarding management
techniques in the areas of human relations while
Charles Babbage is credited with developing the
concepts of specialization of labour and profitsharing. These pre-classicists paved the way for
the theoretical framework of the classical school
of management.
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Management Thought HasBeen Grouped Into Four
Approaches
Early classical
Approaches
Neo Classical App Modern App Post Modern
Approaches
Scientific management School
Administrative School
Bureaucratic
Administration
Human Relations
Approaches
Behavioural
School
Quantitative theory
Decision theory
System Approach
Contingency
approach
TQM
Mc Kinsey's 7-S
Approach
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Early Classical Approaches
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Scientific Management:-
Frederick Winslow Taylor (1895)
“Father of Scientific Management” Taylor’s four principles of scientific management:
Work methods should be based onscientific observation – not “rules of
thumb.” Scientifically select, train, and develop
each worker
Cooperate with workers to ensure thatscientifically developed methods arebeing followed.
Managers analyze and plan work; workers
actually perform the tasks.
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Important Contributions
Time study (Observe & Analyze )
Motion study(set the “standard” for job)
Standardisation
Piece Rate System: (pay according to individual value tobusiness)
Functional foremanship
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The basic assumption of scientific management is that workersare primarily motivated by money and that they work only formore money.
Ignores human factors - Considers them as machines. Ignoreshuman requirements, want and aspirations
They also assume that productivity is the best measure of howwell a firm is performing.
In particular, Taylor‘s insistence on close supervision flies inthe face of all contemporary organizational research
demonstrating close supervision is counterproductive. Taylor viewed management processes from the bottom up .
Additionally, the piece rate system all too often is eitherinapplicable in today‘s computerized assembly lines.
Dissatisfaction - Comparing performance with others.
Criticism
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Henri Fayol’s Principles of Management
1. Division of Labor: allows for job specialization.
2. Authority and Responsibility: both formal and informal
authority result from special expertise.
3. Unity of Command: workers have only one boss.
4. Unity of direction. Organizational activities must have one
central authority and one plan of action. .
5. Centralization: degree to which authority rests at the top of the
organization.6. Unity of Direction: single plan of action to guide the
organization.
7. Equity - The provision of justice and the fair and impartial
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8. Order: place workers where most useful and have career
opportunities.
9. Initiative: encourage employees to act on their own.
10. Discipline: workers need to obey
11. Remuneration of Personnel: pay what is fair.
12. Stability of Tenure of Personnel: Long-term employment
is important
13. Subordination of Individual Interest to the
Common Interest: interest of organization priority
14. Esprit de corps: In union there is a strength or team
spirit, Have enthusiasm
B i T l F l
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Basis Taylor Fayol
Humanaspect
Taylor disregards human elements andthere is more stress on improving men,materials and methods
Fayol pays due regards on human element. E.g.Principle of initiative, Espirit De‘ Corps and Equityrecognizes a need for human relations
Status Father of scientific management Father of management principles
Efficiency &
administration
Stressed on efficiency Stressed on general administration
Approach
It has micro-approach because it isrestricted to factory only
It has macro-approach and discuses general principof management, which are applicable in every fieldmanagement.
Scopeofprinciples
These principles are restricted toproduction activities
These are applicable in all kinds of organizationregarding their management affairs
Achievement
Scientific management Administrative management
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Criticism
•Fayol‘s functional approach to management which aimed at improvingthe managerial activities.
• Administrative theory focuses on the total organization and attempts to
develop principles that will direct managers to more efficient activities.
•The problem with Fayol's principles of management is knowing when to
apply them and how to adapt them to new situations
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Max Weber, “theory of bureaucracy,” thought an organization
should be based on 5 principles:
Formal authority of managers Formal authority comes fromone’s organizational position
Jobs based on qualifications Positions should be held based onmerit, not social standing or personal contacts.
Authority and responsibility clearly defined
Hierarchical positions Authority in a bureaucracy is hierarchical
power.
operating procedures, and norms = control via “rational”
power.
Modern ideas based on Weber: TQM, process specialization,
Bureaucratic Administration
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Neo Classical Approaches
Developed because (a) scientific mangemnt concerned with
the efficience and productivity (b)fayols functional approaches
to managemnt which aimed at improving the mangerial
activities(c) classical theory ignored employee motivation andbehaviour.
Two branches:
Human Relations Approach
Behavioral Sciences Approach
H R l ti A h
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Human Relations Approaches
Elton Mayo - “Human Relations”
approach (to 1950’s). Mayo’s views
lead to the construction of manageras a leader.
Focus on the social environment of a job
Managers must know why subordinates behave as they doManagement should recognize employees’ need for recognition and social
acceptance
Management should look on work group as a positive force
Managers should be trained in human relations skills as well as in technicalskills
Style of supervision is an important factor in increasing workers' jobsatisfaction.
B h i l A h
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Behavioural ApproachThe behavioralapproach was concerned with the social and psychological
aspects of human behaviour in organisation . Behavioural school has
contributed to the study of management through its focus on personality,
attitudes, values, motivation, group behavior, leadership, communication,
and conflict, among other issues
mportant elements of the Behavioural Approach
Individual behaviour is closely linked with the behaviour of the group t which he
belong
Informal leadership, rather than formal authority of foremen and supervision , ismore important foe setting and enforcing group of performance.
By nature most people enjoy work, and are motivated by self control and self
development
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Behavioral SciencesApproach — Pros & Cons
Contributions
Contribute to people —
managing aspect of
management Use of teams
Focus on training &
development
Use of reward & incentive
systems
Limitations
Doesn‘t always help
managers in problem
situations Difficulty in translating
technical findings into
useful tools and policies
Variety of viewpoints
complicates the problem
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The two major organizational theorists
in the human relations movement are
– Abraham H. Maslow (1908-1970)
– Douglas McGregor (1906-1964)
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Maslow‘s hierarchy of needs
• Self-actualization – advancement, challenges,opportunities to use skills
• Esteem – job title, compliments
• Belongingness – compatible work groups,friends, parties
• Safety and security – salary increases, pension
plan, medical plans, insurance• Physiological – salary, office, co. cafeteria
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There are two ways of perceiving people at work:
Theory Y:
Work is as natural as play or rest- not disliked..
Workers will exercise self-direction and
self-control
Meeting goals is satisfying and motivating. .
Workers seek responsibility. ...
Workers will be creative and are willing to do more.
Theory X:
The average human inherently dislikes to work
So, people must be coerced, controlled, directed.
Workers prefer this – but want security.
The average worker is only partially utilized.
McGregor: Theory X, Theory Y
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Modern Approaches to management
Quantitative Approach
Operational Approach
Decision Theory Approach
Systems Approach
Contingency Approach
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odern Approaches to management
THE QUANTITATIVE APPROACH
The quantitative school focuses on improving decision
making via the application of quantitative techniques.
Its roots can be traced back to scientific management.
use of mathematic models, linear programming,
simulation systems and chaos theory to solve
management problems.
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Operations management School —techniques used to
analyze all aspects of the production system. This school
focuses on the operation and control of the production process
that transforms resources into finished goods and services. It
has its roots in scientific management but became an
identifiable area of management study after World War II. It
uses many of the tools of management science
Major areas of study within operations management include
capacity planning, facilities location, facilities layout, materials
requirement planning, scheduling, purchasing and inventory
control, quality control, computer integrated manufacturing,
just-in-time inventory systems, and flexible manufacturing
systems.
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Systems Approach
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Systems Approach
·Organization is a social system, a system of culturalrelationships.
·Relationships exist among the external as well as internal
environment of the organization.
·Cooperation among group members is necessary for the
achievement of organization objectives.
For effective management, efforts should be made for
establishing harmony between goals of the organization and
the various groups therein
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Systems Approach
Views an organization as interrelated parts with a
unified purpose: surviving and ideally thriving in
its environment
Management should focus on efficiency andeffectiveness in each part of the organization
Elements of an organization are interconnected
Organization is linked to its environment Open Systems vs. Closed Systems
DECISION THEORY APPROACH
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DECISION THEORY APPROACH
Contributors
– Simon, Cyert, Forrester, etc.
•Manager – Decision maker
•Organisation– Decision making unit.
•Features:-
Management is decision making.
Members of Organisation -decision and problem solver.
Decision making -control point in management
Increasing efficiency -the quality of decision
MIS, process & techniques of decision making are the subject matter of study.
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· It demonstrates how managers can discharge their functions
effectively and for this approach it provides various tools. Decision
theorists have grappled with decisions pertaining to diagnosis and
the resulting prescriptions for improving communication,
incentives, reactions of the individuals to group and analysis of
human values write stated objectives.
Limitations
· This approach does not take the total view of management.
Decision making is vital in every school of management. This vital
aspect cannot be denied but management is more than mere
Contingency Approach
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Contingency Approach The contingency school originated in the 1960s.
There is no “one best way.”
Organizing (and other) decisions that match the demands of theenvironment provide adaptation.
Appropriateness of a management technique depends on situation.
If -Then approach.
It h i th t th i b t t d th t it d d
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It emphasizes that there is no one best way to manage and that it depends on
various situational factors, such as the external environment, technology,
organizational characteristics, characteristics of the manager, and
characteristics of the subordinates.
This theory compels us to be aware of the complexity in every situation and forces
us to take an active and dynamic role in determining what best would work in each
case. Like a system theory it does not only examines the relationships between
subsystems of a specific organisation in a given environment, but also offers
solutions to particular organisational problems.
Contingency theorists often implicitly or explicitly criticize the classical
school for its emphasis on the universality of management principles;
however, most classical writers recognized the need to consider aspects of
the situation when applying management principles.
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Recent Developments in management
•Total Quality Management
•McKinsey 7S framework
T l li
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Total quality management is a management system for a
customer focused organization that involves all employee in continual
improvement of all aspects of the organization.TQM concepts is an
integrative system that use strategy, data, and effective communication to
integrate the quality principles into the culture and activities of the
organization
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M Ki 7S f k
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McKinsey 7S framework
McKinsey 7S framework developed in the early 1980s by Tom Peters
and Robert Waterman, two consultants working at the McKinsey &Company consulting firm, the basic premise of the model is that there are
seven internal aspects of an organization that need to be aligned if it is to
be successful
The 7S model can be used in a wide variety of situations where
an alignment perspective is useful, for example to help you:
•Improve the performance of a company.
•Examine the likely effects of future changes within a company.
•Align departments and processes during a merger or
acquisition.
•Determine how best to implement a proposed strategy.
The Se en Elements
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The Seven Elements The McKinsey 7S model involves seven interdependent factorswhich are categorized as either "hard" or "soft" elements:
HardElements
SoftElements
StrategyStructureSystems
SharedValues
Skills
Style
Staff
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Criticism:-The competitive environment is often moving so fast that the
stability assumptions built into McKinsey's approach aredysfunctional, and that organizations need more speed, agility andcapacity for coping with uncertainty to prosper
Conclusion
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Conclusion
In conclusion it has to be restated that management is the
process of designing and maintaining an environment for the
purpose of efficiently accomplishing selected aims. However, the
managerial skills required vary with organizational levels. The
goal of all managers is to create a surplus and to be productive
by achieving a favorable output-input ration within a specific time
period with due consideration for quality. Productivity implies
effectiveness (achieving of objectives) and efficiency (using the
least amount of resources). There are many theories about
management, and each contributes something to our knowledge
of what managers do. Each approach or theory has its own
characteristics and advantages as well as limitations. The
operational, or management process, approach draws on each
―school‖ and systematically integrates them . A manager who
makes serious attempts to translate theory into reality is bound toincrease roductivit more than a mana er who chooses to use