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Management Approaches/Schools
Classical School Scientific management (FW Taylor)
Administrative Management (Henry Fayol)
Bureaucratic /Organizational School (Max Weber)
Neo classical Human Relations approach (Elton Mayo, Roethisberger) Behavioral Science Approach (Maslows)
Modern school Mathematical/quantitative approach
Systems approach Contingency approach
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Classical Schools
Assumptions Laid emphasis on division of Labor, specialization, functional processes and span of
control
Viewed organization as machinery. The human factor and environmental factors are
dealt with in very rudimentary manner. Hence called machinery theory
Believed that the people at work can be motivated by economic regards and they
are rational economic beings Closely associated with industrial revolution
Criticism
Close system assumption
Unrealistic assumption of human behavior
Economic rewards are main motivators
Neglected the human factor No integration between workers and decision makers
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F.W. Taylor and Scientific
Management Taylor considered as Father of scientific Management Scientific Management is concerned with knowing what you want men to
do and then see that they do it in the best and cheapest way
Scientific Management is the systematic study of the relationships between
people and tasks for the purpose of redesigning the work process for higherefficiency.
Defined by Taylor in the late 1800s to replace informal rule of thumb
knowledge.
Taylor sought to reduce the time a worker spent on each task by optimizing
the way the task was done.
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Four Principles of Scientific Management
Study the ways jobs are performed now and determine new ways to do them.
Gather detailed time and motion information.
Try different methods to see which is best.
Codify the new methods into rules.
Teach to all workers the new method.
Select workers whose skills match the rules.
Establish fair levels of performance and pay a premium for higherperformance.
Workers should benefit from higher output
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Techniques of Scientific Management Scientific Task setting fair days work
Work study time, motion, fatigue and method study
Planning separate from doing action
Scientific selection and training of workers
Specialization for higher productivity
Standardization of machine, tools, output, process, methods
Incentive wage plan profit sharing
Congenial atmosphere of work
Functional foremanship Specialization at supervisory level
GM
Workshop Manager
Planning manager Production Manager
Time and cost clerk
Instruction Card Clerk
Route Clerk
deciplinarian
Gang Boss
Speed Boss
Repair Boss
Inspector
worker
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Scientific Management
Benefits
Promotes use of scientific methods
Better utilization of resources
Maximizing productivity and production
Encourages right people to right job and specialization, standardization
Owner and worker both are benefited
Criticism
Production centered ignores all other areas (finance, marketing,
accounting)
Neglect human aspect
Wrong assumptions
Workers are rational economic beings
Workers cannot plan purposely under perform
Restricted application not suitable for service industries and higher
level of managements. Only for production
Over specialization leaves little freedom on the job and to learn new
things, monotony of job
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Administrative approach
Identifies the process of management andtries to develop management principles
Regards that management is a function
and process
Universal nature but are flexible like
biological science
Also called process approach or
functional approach or universal
approach
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Henry Fayol and Administrative
Management Runs parallel to scientific management era classification of business activities (Technical, commercial, financial,
security, accounting, administrative)
management function (planning, organizing, commanding, coordinating,
controlling) 14 Principles of Mgmt
Flexible and adaptable principles
Universal principles
Qualities of Manager ( Physical, Mental, Moral, Educational, Technical,
experience)
Education and training
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Fayols Principals of Management Division of Labor
Authority Discipline
Unity of command
Unity of Direction
Subordination of individual interest to general interest
Remuneration
Centralization
Scalar chain
Order
Equity Stability of tenure of personnel
Initiative
Esprit de corps
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Bureaucratic school Main thinkers are Max Webber, Chester I
Bernard
Believed that the every part of organizationshould help in achieving goals
Stable and well defined hierarchy and line ofcommand
Development of clear set of rules, regulationsand procedures in writing guiding actions,decision making and ensuring consistency andcoordination and conflict resolution
Record keeping in separate files
Scientific selection of employees on the basis ofcompetency
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Webers
Principles of
Bureaucracy
Figure 2.2
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Webers Five Principles of
Bureaucracy Authority is the power to hold peopleaccountable for their actions.
Positions in the firm should be held based on
performance, not social contacts. Position duties are clearly identified so that
people know what is expected of them.
Lines of authority should be clearly identified
such that workers know who reports to who.
Rules, standard operating procedures (SOPs),
and norms guide the firms operations.
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Criticism to Bureaucratic school
Ignores the informal aspect of theorganization
Rigid rules may cause lower performance
Discourage the acceptance of responsibility Process of communication and decision
making is slow and inflexible
Do no speak about conflict resolutionmechanism
Inflexible organization
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Modern school
Post 1950 school of thought Combination of classical and neo classical
theories
Centered around the concept of system Main theories are
Systems approach
Mathematical or quantitative approach
Decision theory approach
Contingency theory
7S approach
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System
PlansObjectives
GoalsMethodsProcedures, policies
InputsMan
MoneyMachineMaterial, information
Process
Conversion of input intooutput
Output
ProductInformation
Feedback / Information
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Systems Approach More in line with the reality of broader environment and
recognizes that we do not operate in isolation Recognizes that the organization is a system made up of
various components or sub-systems having definitivegoals
These sub-systems are interrelated and interdependentand these relationship defines the effectiveness of theoverall system
Attention to be paid for effectiveness of the wholesystem and not of sub-systems
Basically a problem solving approach to scientificallysolve complex problems
System can be of 2 types Open system interacts with the outside environment (global,
political, economic, technological, social)
Closed system do not interact with environment
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Management as System
Social system unlike biological ormechanical system
Open system
Adaptive
Dynamic
Probabilistic
Multilevel at organization, business,subsystem level
Multivariable not a cause-effect model
Integrated approach
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Appraisal to Systems approach
More realistic and brings out the complexity of real lifemanagement problems in more focused way
Used to study the complex organizations
provides framework for analysis and control upon
diverse business operations in more coordinated manner Provide timely and accurate information for decisionmaking
Allows for coordinating and integrating various subsystems to achieve organizations goals
Viewing organization as a subsystem of broader externalenvironment makes it more sensitive and responsive tothe environment and stakeholders
Does not speak about what manager should do
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Decision Theory Approach
This school of thought concentrates around therational decision making selection of bestpossible alternative among the available options
Major contributor is Simon
Based on the assumption that the decision makingis basic job of every manager and therefore theeffective management is rational decision making.
Organization is a group of different decisioncenters and effectiveness of the organization
depends upon the quality of decision. Besides the techniques and process of decision
making, the information systems, social andphysiological aspects of decision makers affect thedecision making
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Decision Theory Approach
The decision making process is Intelligent activity searching for data
Design activity inventing, developing, applying
and analyzing best possible options Choice activity selecting a particular course of
action
Has a concept of bounded rationality
Managers do not search for maximum
satisfaction but good enough satisfaction
Because of the variable constraints
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Quantitative/Mathematical
Approach World war II stimulated the mathematical approach Mathematical and statistical aids solved complex military
problems and caught the eye of businessexecutives/managers
The basic assumption is that if the management (like
planning or decision making) is logical process, it can beexpressed in mathematical expressions.
These techniques improved the quality of decision andprofits increased by helping managers make andevaluate different alternatives more quickly and precisely
By late 1960s the use of quantitative techniques likeprobability theory, linear programming, queuing theory,games theory became indispensable part ofmanagement
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Criticism
Neglected the human factor. Experienceand human judgment cannot be replaced
by quantitative/scientific methods
Have less importance in organizing,staffing and directing
Focuses only on decision making
incomplete approach Cannot consider the factors that cannot be
represented in mathematical terms.
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Contingency/Situational Approach No thought answers all the management problems. Hence
came into existence To replace simplistic management thought and to integrateall the management theories
Very close to systems approach adaptable systemsapproach
Suggests that the manager must do what the situationdemands or managers actions must be contingent uponthe organizational situation or environment.
It says the success of management lies in identifying andunderstanding the variables of the situation and then
applying the tools, techniques and principles according tothe situation
There is no standard solution to the problem in everysituation. The correct technique would depend upon theprevailing situation
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AssumptionsAssumptions Each organization is unique
External environment of each organization is unique All subsystems of an organization are interrelated
creating huge no. of variable defining the complexsituation
There is no single best solution to problems
Criticism Limitation of time for managers to analyze all the
variables in a situation
Sometimes situation changes so rapidly Put much emphasis on managers ability to make
rational decision
Reactive and not proactive approach