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EARLY CONTRIBUTIONS

PERIOD: - UPTO 19 th CENTURY

Before the systematic study of management which started close to 19 th

century, contributions in the field came from a variety of sources. These sources areas follows:-

The concept of organisation and administration existed in Egypt in 1300B.C.

Confuciuss parables included suggestions for proper public administrationand admonitions to choose honest, unselfish and capable public officers long

before Christ Kautilya has offered sound principles of state administration in 320 B.C. Roman Catholic Church introduced the concept of staff personnel in church

administration which was further carried on by military organisations. The cameralists, a group of German and Austrian public administrators and

intellectuals, emphasised systematic administration as a source of strengthsduring 16 th to 18 th century.

Robert Owen emphasised personnel aspects in management and advocated a

number of benefits to employees. James Watt, Charles Babbage, and Henry Town concentrated on developing

concepts relating to effective utilisation of resources at the shop-floor level.

These contributions provide some insights about how resources could beutilised more effectively; however, these contributions were outside the field of

business and other economic organisations.

Their ideas created awareness about managerial problems. By the end of 19thcentury, a stage was set for taking systematic study of management and the beginning

was made by Taylor in the early part of 20th century which took the shape of scientific management.

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Frederick Winslow Taylor

Born 20 March 1856 (1856-03-20)Philadelphia, Pennsylvania U.S.

Died21 March 1915 (1915-03-22)Philadelphia, Pennsylvania U.S.

Cause of death Pneumonia

Resting placeWest Laurel Hill CemeteryBala Cynwyd, Pennsylvania U.S.

Nationality American

OccupationEfficiency expertManagement consultant

Known for"Father" of the Scientific management& Efficiency Movement

Spouse(s) Louise M. Spooner

ChildrenKempton, Robert and Elizabeth(all adopted orphans)

ParentsFranklin Taylor Emily Annette Winslow

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Biography:-

Frederick Winslow Taylor widely known as F. W. Taylor was an Americanmechanical engineer who sought to improve industrial efficiency. He is regarded asthe father of scientific management and was one of the first management consultantsand director of a famous firm. Taylor was also an accomplished tennis player , whowon the first doubles tournament in the 1881 U.S. National Championships , the

precursor of the U.S. Open , with Clarence Clark .

Taylor, born in Philadelphia, prepared for college at Philips Academy inExeter, N.H., and was accepted at Harvard. His eyesight failed and he became anindustrial apprentice in the depression of 1873. At Exeter he was influenced by theclassification system invented by Melvil Dewey in 1872 (Dewey Decimal System).He became in 1878 a machine shop laborer at Midvale Steel Company. In 1883 he

earned a degree by night study from Stevens Institute of Technology (which nowarchives his papers and has announced plans to put them online. He became generalmanager of Manufacturing Investment Company, 1890, and then a consultingengineer to management.

Taylor's ideas, clearly enunciated in his writings, were widely misinterpreted.Employers used time and motion studies simply to extract more work from employeesat less pay. Unions condemned speedups and the lack of voice in their work that"Taylorism" gave them. Quality and productivity declined when his principles weresimplistically instituted.

Modern management theorists, such as Edward Deming, often credit Taylor,however, with generating the principles upon which they act. Others, such as Juran,though, continue to denigrate his work. Modern theorists generally place moreemphasis on worker input and teamwork than was usual in much of Taylor's time. Acareful reading of Taylor's work will reveal that he placed the worker's interest ashigh as the employer's in his studies, and recognized the importance of the suggestion

box, for example, in a machine shop.

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Work:-

Working at Midvale steel company in U.S.A. and Bethlehem steel company,he carried experiments about how to increase the efficiency of people. Even after hisretirement he continued to develop scientific management. On the basis of hisexperiments, he published many papers and books and all his contributions werecompiled in his book scientific management. His contributions can be described intwo parts: elements and tools of scientific management and principles of scientificmanagement .

Scientific management:-

F.W. Taylor is by far the most influential person of the time and someone whohas had an impact on management service practice as well as on management thoughtup to the present day. Taylor formalized the principles of scientific management, andthe fact-finding approach put forward and largely adopted was a replacement for whathad been the old rule of thumb.

He also developed a theory of organizations which altered the personalizedautocracy which had only been tempered by varying degrees of benevolence, such asin the Quaker family businesses of Cadbury's and Clark's.

Taylor was not the originator of many of his ideas, but was a pragmatist withthe ability to synthesize the work of others and promote them effectively to a readyand eager audience of industrial managers who were striving to find new or improvedways to increase performance.

At the time of Taylor's work, a typical manager would have very little contactwith the activities of the factory. Generally, a foreman would be given the totalresponsibility for producing goods demanded by the salesman. Under theseconditions, workmen used what tools they had or could get and adopted methods thatsuited their own style of work.

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Elements and tools of scientific management:-

Taylor conducted certain experiments at his work-places to find out howhuman beings could be made more efficient by standardizing the work and better method of doing the work. These experiments have provided the following features-

Separation of planning and doing Functional foremanship Job analysis

Time study Motion study Fatigue study

Standardization

Scientific selection and training of workers Financial incentives Economy Mental revolution

Principles of scientific management:-

The five principles of management under scientific management were as

follows:

The development of a science for each element of a man's work to replacethe old rule-of-thumb methods.

Attempts should be made to obtain harmony in group action rather thandiscord.

The development of a spirit of hearty cooperation between workers andmanagement to ensure that work would be carried out in accordance withscientifically devised procedures.

There should be continuous increase in production and productivity toobtain maximum output.

For companys highest prosperity, the workers should be developed to thefullest extent possible.

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F.W. Taylor's contributions to scientific management:-

By 1881 Taylor had published a paper that turned the cutting of metal into ascience. Later he turned his attention to shovelling coal. By experimenting withdifferent designs of shovel for use with different material, (from 'rice' coal to ore,) hewas able to design shovels that would permit the worker to shovel for the whole day.In so doing, he reduced the number of people shovelling at the Bethlehem SteelWorks from 500 to 140. This work, and his studies on the handling of pig iron, greatlycontributed to the analysis of work design and gave rise to method study.

To follow, in 1895, were papers on incentive schemes. A piece rate system on production management in shop management, and later, in 1909, he published the book for which he is best known, Principles of Scientific Management.

A feature of Taylor's work was stop-watch timing as the basis of observations.However, unlike the early activities of Perronet and others, he started to break thetimings down into elements and it was he who coined the term 'time study'.

F.W. Taylor's contribution to organizational theory:-

His framework for organization was:

clear delineation of authority

responsibility separation of planning from operations incentive schemes for workers management by exception task specialization

Propaganda techniques:-

Taylor promised to reconcile labour and capital.

With the triumph of scientific management, unions would have nothing left todo, and they would have been cleansed of their most evil feature: the restriction of output. To underscore this idea, Taylor fashioned the myth that 'there has never been astrike of men working under scientific management', trying to give it credibility byconstant repetition. In similar fashion he incessantly linked his proposals to shorter hours of work, without bothering to produce evidence of "Taylorized" firms thatreduced working hours, and he revised his famous tale of Schmidt carrying pig iron atBethlehem Steel at least three times, obscuring some aspects of his study and stressingothers, so that each successive version made Schmidt's exertions more impressive,

more voluntary and more rewarding to him than the last.

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Some problems:-

Taylor's uncompromising attitude in developing and installing his ideas causedhim much criticism. Scientific method, he advocated, could be applied to all problemsand applied just as much to managers as workers. In his own words he explained:

"The old fashioned dictator does not exist under Scientific Management. The man at the head of the business under Scientific Management is governed by rules and laws

which have been developed through hundreds of experiments just as much as theworkman is, and the standards developed are equitable."

However, there were problems-Taylor's papers were not always well received,as many of his ideas were associated with bad practice, such as rate-cutting byunscrupulous managers.

In 1911 and 1912 Taylor was questioned at length by a special committee of the US House of Representatives. As a result laws were passed banning the use of stop-watches by civil servants and it was only in 1949 that this restriction was lifted.

Taylor's view of the motivations of workers has had a profound influencethroughout the century until the present day. His belief that man was rational andwould make economic choices based on the degree of monetary reward led him todevise payment systems that closely related the kind of effort he sought with the levelof reward offered.

Not surprisingly, there was strong criticism of this theory that treats human beings like machines and assumes that workers are satisfied by money alone.

Underlying assumptions:-

His views on motivation, management and organization all presupposedcertain conditions to be constant, which we now know, they are not.

The assumptions underlying his work were:

The presence of a capitalist system and a money economy, wherecompanies in a free market have as their main objective the improvementof efficiency and the maximization of profit;

The Protestant work ethic, that assumes people will work hard and behaverationally to maximize their own income, putting the perceivedrequirements of their organization before their own personal objectivesand goals;

That an increased size is desirable in order to obtain the advantages of thedivision of labour and specialization of tasks.

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Taylor's impact has been so great because he developed a concept of work design, work-measurement, production control and other functions, that completelychanged the nature of industry. Before scientific management, such departments aswork study, personnel, maintenance and quality control did not exist. What was morehis methods proved to be very successful.

Relations with ASME:-

Taylor was the President of the American Society of MechanicalEngineers (ASME) from 1906 to 1907. While president, he tried to implement hissystem into the management of the ASME but was met with much resistance. He wasonly able to reorganize the publications department and then only partially. He alsoforced out the ASME's long-time secretary, Morris L. Cooke , and replaced him

with Calvin W. Rice . His tenure as president was trouble-ridden and marked the beginning of a period of internal dissension within the ASME during the ProgressiveAge.

Publications by Taylor:-

Taylor published many articles and short monographs. A selection:

1894. Notes on Belting 1895. A Piece-rate System 1896. The adjustment of wages to efficiency; three papers New York, for

the American economic association by the Macmillan company; London,S. Sonnenschein & co.

1903. Shop management; a paper read before the American society of mechanical engineers. New York.

1906. On the art of cutting metals, by Mr. F. W. Taylor; an address madeat the opening of the annual meeting in New York, December 1906. NewYork, the American society of mechanical engineers.

1911. Principles of Scientific Management . New York and London,Harper & brothers.

1911. Shop management, by Frederick Winslow Taylor ... with anintroduction by Henry R. Towne, New York, London, Harper & Brothers.

1911. A treatise on concrete, plain and reinforced: materials, construction,and design of concrete and reinforced concrete. (2d ed). New York, J.Wiley & sons.

1912. Concrete costs. New York, J. Wiley & sons.

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Henri Fayol (1841-1925)

Functions and Principles of Management

Henri Fayol, a French engineer and director of mines, was little unknownoutside France until the late 40s when Constance Storrs published her translation of Fayol's 1916 Administration Industrielle at Generale".

Fayol's career began as a mining engineer. He then moved into researchgeology and in 1888 joined Comambault as Director. Comambault was in difficulty

but Fayol turned the operation round. On retirement, he published his work - acomprehensive theory of administration - described 1became recognised andreferenced by others in the growing discourse about management. He is frequentlyseen as a key, early contributor to a classical or administrative management school of thought (even though he himself would never have recognised such a "school").

His theorising about administration was built on personal observation andexperience of what worked well in terms of organisation. His aspiration for an"administrative science" sought a consistent set of principles that all organizationsmust apply in order to run properly.

From administrative point of view, he placed commerce, industry, religion, philanthropy, and the state on equal footing. His administrative science can be appliedequally well to public and private affairs. Therefore, management is a universal

phenomenon. However, he has emphasised that principles of management are flexibleand not absolute and are usable regardless of changing and special conditions.

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He emphasized the role of administrative management and concluded that allactivities that occur in business organizations could be divided into six main groups.

1. Technical (production, manufacturing)2. Commercial (buying, selling, exchange)3. Financial (obtaining and using capital)4. Security (protection of property and persons)5. Accounting (balance sheet, stocktaking, statistics, costing)6. Managerial (planning, organizing, commanding, coordinating,

controlling).

Pointing out that these activities exist in every business of every size, Fayolobserved that the first five were well known, consequently he devoted most of histime to analyse the sixth one, that is, managerial activity. Fayol has divided hisapproach of studying management into three parts:

1. Managerial qualities and training,2. General principles of management, and3. Elements of management.

Management qualities and training:-

Fayol was the first person to identify the qualities required in a manager.According to him, there are six types of qualities that a manager requires. These are asfollows:

1. Physical (health, vigour, and address)2. Mental (ability to understand and learn, judgement, mental vigour, and

capability)3. Moral (energy, firmness, initiative, loyalty, tact and dignity)4. Educational (general acquaintance with matters not belonging exclusively

to the function performed)5. Technical (peculiar to the function being performed) and

6. Experience (arising from the work)

Fayol has observed that the most important ability for a worker is technical;the relative importance of managerial ability increases as one goes up the scalar chain,with insight becoming the most important ability for top level executives. On the basisof this conclusion, Fayol recognised a widespread need for principles of managementand for management teaching. He held that managerial ability should be acquired firstat school and later in the workshop. In order to acquire managerial knowledge, hedeveloped principles of management to be taught in academic institutions.

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General principles of management:-

F. W. Taylor published "The Principles of Scientific Management" in the USAin 1911, and Fayol in 1916 examined the nature of management and administration onthe basis of his French mining organisation experiences.

Fayol also synthesised 14 principles for organisational design and effectiveadministration. It is worthwhile reflecting on these are comparing the conclusions tocontemporary utterances by Peters, Kanter and Handy to name but three managementgurus. Fayol's 14 principles are:

1. Specialisation/division of labour - A principle of work allocation andspecialisation in order to concentrate activities to enable specialisation of skillsand understandings, more work focus and efficiency.

2. Authority with corresponding responsibility- If responsibilities areallocated then the post holder needs the requisite authority to carry these outincluding the right to require others in the area of responsibility to undertakeduties. Authority stems from: That ascribed from the delegation process (the job holder is assigned to

act as the agent of the high authority to whom they report - hierarchy) Allocation and permission to use the necessary resources needed

(budgets, assets, and staff) to carry out the responsibilities. Selection - the person has the expertise to carry out the responsibilities

and the personal qualities to win the support and confidence of others.

The R = A correspondence is important to understand. R = A enablesaccountability in the delegation process. Who do we cope with situationswhere R > A? Are there work situations where our R< A?

Judgement demands high moral character, therefore, a good leader should possess and infuse into those around him courage to acceptresponsibility. The best safeguard against abuse of authority andweakness on the part of a higher manager is personal integrity and

particularly high moral character of such a manager. This integrity isconferred neither by election nor ownership.1916

A manager should never be given authority without responsibility--andalso should never be given responsibility without the associated authorityto get the work done.

3. Discipline- The generalisation about discipline is that discipline is essentialfor the smooth running of a business and without it - standards, consistency of action, adherence to rules and values - no enterprise could prosper.

"in an essence - obedience, application, energy, behaviour and outward

marks of respect observed in accordance with standing agreements between firms and its employees " 1916

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4. Unity of command- The idea is that an employee should receive instructionsfrom one superior only. This generalisation still holds - even where we areinvolved with team and matrix structures which involve reporting to more thanone boss - or being accountable to several clients. The basic concern is thattensions and dilemmas arise where we report to two or more bosses. One bossmay want X, the other Y and the subordinate is caught between the devil andthe deep blue sea.

5. Unity of direction - The unity of command idea of having one head (chief executive, cabinet consensus) with agree purposes and objectives and one planfor a group of activities) is clear.

6. Subordination of individual interest to the general interest - Fayol's linewas that one employee's interests or those of one group should not prevail over the organisation as a whole. This would spark a lively debate about whodecides that the interests of the organisation as a whole are. Ethical dilemmasand matters of corporate risk and the behaviour of individual "chancers" are

involved here. Fayol's work - assumes a shared set of values by people in theorganisation - a unitarism where the reasons for organisational activities anddecisions are in some way neutral and reasonable.

7. Remuneration of staff- The general principle is that levels of compensationshould be "fair" and as far as possible affords satisfaction both to the staff andthe firm (in terms of its cost structures and desire for profitability/surplus).

8. Centralisation - Centralisation for HF is essential to the organisation and anatural consequence of organising. This issue does not go away even whereflatter, devolved organisations occur. Decentralisation - is frequentlycentralised-decentralisation!!! The modes of control over the actions andresults of devolved organisations are still matters requiring considerable

attention.9. Scalar chain/line of authority - The scalar chain of command of reporting

relationships from top executive to the ordinary shop operative or driver needsto be sensible, clear and understood.

10. Order- The level of generalisation becomes difficult with this principle.Basically an organisation "should" provide an orderly place for eachindividual member - who needs to see how their role fits into the organisationand be confident, able to predict the organisations behaviour towards them.Thus policies, rules, instructions and actions should be understandable andunderstood. Orderliness implies steady evolutionary movement rather thanwild, anxiety provoking, unpredictable movement.

11. Equity - Equity, fairness and a sense of justice "should" pervade theorganisation - in principle and practice.

12. Stability of tenure - Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure promotes loyalty to theorganisation, its purposes and values.

13. Initiative - At all levels of the organisational structure, zeal; enthusiasm andenergy are enabled by people having the scope for personal initiative. (Note:Tom Peters recommendations in respect of employee empowerment)

14. Esprit de corps - Here Fayol emphasises the need for building andmaintaining of harmony among the workforce, team work and sound

interpersonal relationships.

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Five elements of management:-

Henri Fayol, the father of the school of Systematic Management, wasmotivated to create a theoretical foundation for a managerial educational program

based on his experience as a successful managing director of a mining company. Inhis day, managers had no formal training and he observed that the increasingcomplexity of organisations would require more professional management.

Fayol's legacy is his generic Principles of Management. Of Fayol's six genericactivities for industrial undertakings (technical, commercial, financial, security,accounting, managerial), the most important were The Five Functions of Managementthat focused on the key relationships between personnel and its management. TheFive Functions are:

1. Planning - Drawing up plans of actions that combine unity, continuity,flexibility and precision given the organisation's resources, type andsignificance of work and future trends. Creating a plan of action is the mostdifficult of the five tasks and requires the active participation of the entireorganisation. Planning must be coordinated on different levels and withdifferent time horizons;

2. Organising - Providing capital, personnel and raw materials for the day-to-dayrunning of the business, and building a structure to match the work.Organisational structure depends entirely on the number of employees. Anincrease in the number of functions expands the organisation horizontally and

promotes additional layers of supervision.3. Commanding - Optimising return from all employees in the interest of the

entire enterprise. Successful managers have personal integrity, communicateclearly and base their judgments on regular audits. Their thorough knowledgeof personnel creates unity, energy, initiative and loyalty and eliminatesincompetence.

4. Coordinating - Unifying and harmonizing activities and efforts to maintain the balance between the activities of the organisation as in sales to production and procurement to production. Fayol recommended weekly conferences for department heads to solve problems of common interest.

5. Controlling - Identifying weaknesses and errors by controlling feedback, and

conforming activities to plans, policies and instructions. Fayol's management process went further than Taylor's basic hierarchical model by allowingcommand functions to operate efficiently and effectively through co-ordination and control methods. For Fayol, the managing director overlookeda living organism that requires liaison officers and joint committees.

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ELTON MAYO THEORY

Neo classical theories:-

The neo classical approach developed as a reaction to classical principles, butit abodes them altogether. Some of the neo classicists like Simon, Smithburg andThompson concentrated on the criticism of structural aspects of the classical theoryand they tried to modify classical principles.

According to W.G.Scott, the new classical theory of organization embarked onthe task of compensating for some deficiency in classical doctrine. The neo classicalapproach takes the postulates of the classical school, regarding the pillars of theorganization as given.

The human behaviour school:-

This school takes particular note of psychological factors underlying thehuman behaviour in organized groups under the given situation. Management is notmechanical process; it involves mobilization and utilization of man power to achievethe chosen aims of a business undertaking. Management, as we know is getting thingsdone through other people. Men should be treated as human beings with all their instincts, emotions, sentiments, likes or dislikes. Management depends on responsefrom the subordinates to the directions given by the higher officers. Receptivity andresponse are psychological. Their behaviour is stirred up by incentives, material andmental.

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This school emphasizes the inter-personal relations characterizingmanagement processes. It concentrates its analytical focus on the motivation and itseffect on his efficiency in performing job. It also underlines the role of personalleadership in management. Mayo, Roethlesberger, Dickinson and others led to thedevelopment of this school. The famous experiments conducted in Western ElectricCompany known as the famous Hawthorne experiments brought out the effect of environment on output turned out by the workers. The effect of physical conditions of worklightening, ventilation etc on workers capacity was experimented.

HAWTHORNE STUDIES:-

As noted earlier, the roots of modern organizational behaviour lie inHawthorne studies that began in the 1920s.These studies taking their name from theHawthorne Works plant of the Western Electric Company in the Chicago area were

initiated in an attempt to prevent the characteristic drop that occurs each day inworker productivity. Management and engineering staff considered a variety of methods that might keep worker efficiency at a high level through the entire shift.Among the methods studied were increased illumination, various schedules of work hours and breaks, different forms of wage incentives, even the providing of sandwiches for those operators who hurried to work without taking time for breakfast.

The prime purpose of this school is to find out the functions of managers andinstall in them the basic principles and practice of management. Management involvesthe performance of functions by managers aiming at proper and systematic utilizationof resources. Management process consists of planning, organizing, staffing, directingand controlling. Thorough knowledge of such principles makes one versatile in the artof management.

Elton Mayo is generally recognized as the father of human relations school. Itwas he who led the team conducting the study at Westerns Electric Hawthorne Plant(1927-1932) to evaluate the attitude and psychological reactions of workers in on the

job situations. His associates included John Dewy, Kurt Lewin, F.J.Roethisberger andW.J Dickson.

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. The first seriesof experiments failed to establish any consistent relationship between output andillumination. Contrary to normal expectations, output tended increase as the intensityof lighting varied from the normal level both in the upward and downward direction.As the intensity of light was increased or decreased, the productivity of the workersunder observation kept on increasing. It is at this stage that George Elton Mayo andFritz J.Roethlisberger took over the investigation and continued the research to findout the real factors i.e. factors other than working conditions which were influencingoutput which originally began with observation of 5 workers was ultimately extendedto cover more than 20,000 workers.

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Stages in Hawthorne experiments:-

Chronologically, the Hawthorne studies can be divided into 4 stages. Eachstage involved certain alterations in the original hypothesis and utilizing a variety of research techniques. The first stage was concerned with an experiment on workingconditions and employee efficiency. The second stage was concerned with aninterviewing programme designed to determine what aspects of the environmentemployees either liked or disliked. During the third stage, the interview results wereanalyzed and a theory was presented to explain the nature of employee satisfaction or dissatisfaction. The fourth stage involved supplementing the interview methodthrough direct observation of fourteen operators.

a. The test room study:- The study was designed to determine the effect of changes in working conditions on employee efficiency. Two groups of femaleworkers were constituted for this purpose. Contrary to normal expectations,the researchers found that output increased despite a detoriation inillumination, temperature, rest pauses etc. They concluded that the increase inoutput was due to a favourable change in workers attitude caused by changesin the pattern of supervision, social conditions of workers, and so on. Byasking their help and cooperation, the investigator has made the girls feelimportant. They had found stability, a place where they belonged, and work ever did in their lives.

b. Relay assembly room study: -In this study 6 female employees assemblytelephone relays were selected and brought into a special test room separatefrom the rest of the plant. This group of employees was largely a friendlygroup and in the test room the atmosphere was quite informal. The object of this study was to measure the effect of fatigue or rest on output. There was nosupervisor in the test room but an observer for recording results andcounselling the girls was engaged .Improvements were made in rest periods,working hours, incentive payment and temperature. There was an increase in

productivity even when these conditions were brought to their original position. It was concluded that productivity is not simply a function of physical work environment. The perceived feeling of importance due to participation, tension free inter-personal relations, informal atmosphere and group cohesions are the main causes of increased productivity. Theimportance of human relationships in industry was recognized

c. Bank wiring observation room study: -In order to verify the conclusions of the interviewing programme, a group of 14 male workers employed in the

bank wiring room, were deeply observed. A detailed study of the socialorganization and forces operating within the bank wiring observation group

was made to judge the influence of informal groups on human behaviour aswell as the influence of social environment on individuals attitude. Anincentive wage plan based on group output was used with the hypothesis thatworkers would produce more individually and help others to do so toadvantage of group bonus. On the contrary it was found that each individual inthe group was restricting his output much below the companys standard. Theinformal group had laid down the norm of a fair days work and group

pressure was applied to ensure that members of the group did not producemore than the group standards. The informal group restricted output due tofear of unemployment, fear in increase of standard and to protect the slower workers. The researchers also found that there were pervasive small cliquesamong the workers.

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d. Mass interviewing programme: -Under this programme, about 20,000interviews were conducted to find out the opinions or attitudes of employeestowards the job, the company, supervision and working conditions. Initiallythese interviews were carried out by means of direct questioning. Later on anon-directive approach was adopted wherein the interviewer simply listened towhat employees had to say. It was found that merely giving an employee anopportunity to talk and air his grievances had a beneficial effect on his moraleand efficiency. Worker is satisfied or dissatisfied not in terms of any objectiveframe of reference but rather in terms of how he regards his social status in thefirm and what he feels is entitled to in the ways of rewards. Experiences,

perceptions, interactions and interpersonal relations were fond to be the basicfactors responsible for human behaviour at the work place.

Contributions of Hawthorne studies:-

The main propositions of Hawthorne studies are as follows:

The organization is a social system. The social environment on the job affects people and are also affected by

them and not management alone. In the formal organization, informal organization also exists and it affects

and is affected by formal organization. A conflict between organizational and individual goals often exists which

increases the importance of integration between these two. Man is interdependent and his behaviour can be predicted in terms of

social and psychological factors. Man is diversely motivated and wants to fulfil different types of need. Mans approach is not always rational. Often he behaves irrationally in

terms of the rewards, which he seeks from the work. Communication is necessary as it carries information to the functioning of

the organization and the feelings and the sentiments of the people whowork in it.

Team work is essential for cooperation and sound organizationfunctioning. This work is not automatic but achieved through behaviouralapproach.

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Appraisal for human relations approach:-

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

Lack of scientific approach- The human relationists drew conclusions fromHawthorne studies. These conclusions are based on clinical insight rather than scientific evidence the groups chosen for study were not representativein character the findings based upon temporary groups do not apply togroups that have continuing relationship with one another. Moreover, theexperiments focused on operative employees only.

Over emphasis on group- The human relations approach over-emphasizesthe group dynamics, group decision-making. But in practice, groups maycreate problems for the management and collective decision making may not

be possible. Over stretching of human relations- It is assumed that all organizational

problems are amenable to solutions through human relations. This

assumption does not hold well in practice. The satisfied workers may not bemore productive workers. Limited focus on work- The human relations approach lacks adequate focus

on work. It puts all the emphasis on interpersonal relations and on theinformal group. It tends to over emphasize the psychological aspects at thecost of the structural and technical aspects.

Over stress on socio-psychological factors- The human relations approachundermines the role of economic incentives in motivation and givesexcessive stress on social and psychological factors. If the wages are too low,the employees will feel dissatisfied despite good interpersonal relations at thework place. Thus, it may be said that the human relations approach seeks toexploit the sentiments of employees for the benefit of the organization.

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HERBERT SIMON

DECISION THEORY APPROACH

Decision theory approach looks at the basic problem of management arounddecision making. Every organization has to face this problem of choosing the rightoption out of several available alternatives. Major contributions in this approach havecome from Herbert Simon, a Nobel Prize winner in economics. The major emphasisof this approach is that decision making is the job of every manager. The manager is adecision maker and organization is a decision making unit. Thus, the basic problem inmanaging is to make rational decision. Decision theory approach has following

features:-

1. Management is essentially decision making.2. The members of the organization are decision makers or problem solvers.3. Organization can be treated as a combination of various decision centres.4. Quality of decision affects the organizational effectiveness.5. All factors affecting decision making are the subject matter of study of

management.

Contributions of Herbert Simon:-

Herbert Simon looked organizational problems in totality of socio- psychological context and viewed that decision making takes place in this context.His major contributions to management are summarized below:-

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1. Concept of Organization : According to Simon organization is a complexnetwork of decisional processes, all pointed towards their influence upon the

behaviour of the operatives. Psychology of the organization is to be found inthe process whereby organization influences the decisions of its members,supplying these decisions with their devices. Thus the best way to analyze anorganization is to find out where and by whom decisions are made.

2. Decision making : Decision making is the core of management andmanagement is synonymous with decision making. This is why Simon is beenreferred to Decision Theorist. According to him the decision processinvolves three steps:

- Intelligent Activity: Searching the environment for conditions callingfor decisions

- Design Activity: Inventing, developing and analyzing possible course

of action to take place- Choice Activity : Selecting a particular course of action from thoseavailable

3. Bounded Rationality : Simon has advocated the principle of boundedrationality that means that no man is completely rational. He said managers donot go for maximum satisfaction out of a decision but are satisfied with goodenough satisfaction from a decision. For a decision to be rational proper meansare adopted to reach desired ends. Also means and ends cannot be separated.A simple end-means chain analysis may not help in reaching accurateconclusion because what is an end at one point of time or at one level of organization might be a means at the other time or at other level of theorganization.

4. Administrative Man: Simon has given the concept of administrative man asthe model of decision making. It has following assumptions:

- Administrative man adopts satisfying approach rather than maximizingapproach

- He perceives the world as a simplified model of real world- Can make choice without determining all the alternatives

- Is able to make decisions with simple rules and tricks of trade

5. Organizational Communication: According to Simon there are three stagesin the communication process initiation, transmittal and receipt of information.In order to overcome the blockage of communication role of informalcommunication is given more importance than formal communication.

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PETER DRUCKER

One of the world's most respected thinkers on management and society

Peter Drucker had a great way with words. He distilled meaningful conceptsinto short phrases more effectively than any other management guru. The conceptsand philosophies he developed have shaped modern management thinking. He wroteover 30 books and articles about innovation, entrepreneurship and strategies for dealing with a changing world;

"Because the purpose of business is to create and keep a customer, the business enterprise has two--and only two--basic functions: marketing and innovation.Marketing and innovation produce results; all the rest are costs. Marketing is thedistinguishing, unique function of the business."

Drucker was born in Vienna, and educated there and in England. He receiveda doctorate in international law while working as a newspaper reporter in Frankfurt,Germany. For a time, he worked as an economist for a bank in London, and thenmoved to the United States in 1937. In the early 1940s, General Motors invitedDrucker to study its inner workings. That experience led to his 1946 management

book "Concept of the Corporation". He introduced the concept of decentralisation as a principle of organisation, in contrast to the practice of command and control in business.

In "The Practice of Management,(1954)" Drucker posed three now-classic business questions:

- What is our business?- Who is our customer?- What does our customer consider valuable?

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He coined the terms "knowledge workers" and "management by objectives."Central to his philosophy was the belief that highly skilled people are anorganisation's most valuable resource and that a manager's job is to prepare and free

people to perform.

Some useful Drucker quotes:

- The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

- Management is doing things right; leadership is doing the right things.- Checking the results of a decision against its expectations shows

executives what their strengths are, where they need to improve, andwhere they lack knowledge or information.

- The most important thing in communication is hearing what isn't said.- Trying to predict the future is like trying to drive down a country road at

night with no lights

Management's New Paradigm:-

The Seven Old Assumptions of Management:-

There is a critical difference between a natural science and a social discipline,according to Drucker. "A natural science deals with the behaviour of OBJECTS. But asocial discipline such as management deals with the behaviour of PEOPLE and

HUMAN INSTITUTIONS. Drucker identifies the following old assumptions for thesocial discipline of management.

Three Old Assumptions for the Discipline of Management:-

1. Management is Business Management2. There is- or there must be- ONE right organization structure.3. There is- or there must be- ONE right way to manage people.

Four Old Assumptions for the Practice of Management

1. Technologies, markets and end-users are given.2. Management's scope is legally defined.3. Management is internally focused.4. The economy as defined by national boundaries is the "ecology" of

enterprise and management.

According to Drucker, six out of seven assumptions (2, 3, 4, 5, 6, and 7) wereclose enough to reality to be useful until the early 1980s. However, all are nowoutdated- "they are now so far removed from actual reality that they are becomingobstacles to the Theory and even more serious obstacles to the Practice of Management.

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The E ight New Management Assumptions:-

Drucker identifies the following new assumptions for the social discipline of management.

1. Management is NOT only for profit-making businesses. Management is thespecific and distinguishing organ of any and all organizations.

2. There is NOT only one right organization. The right organization is theorganization that fits the task.

3. There is NOT one right way to manage people. One does not "manage" people. The task is to lead people. And the goal is to make productive thespecific strengths and knowledge of each individual.

4. Technologies and End-Users are NOT fixed and given. Increasingly, neither technology nor end-use is a foundation of management policy. They arelimitations. The foundations have to be customer values and customer

decisions on the distribution of their disposable income. It is with those thatmanagement policy and management strategy increasingly will have to start.5. Management's scope is NOT only legally defined. The new assumption on

which management, both as a discipline and as a practice, will increasinglyhave to base itself is that the scope of management is not legal. It has to beoperational. It has to embrace the entire process. It has to be focused on resultsand performance across the entire economic chain.

6. Management's scope is NOT only politically defined. National boundaries areimportant primarily as restraints. The practice of management - and by nomeans for business only - will increasingly have to be defined operationallyrather than politically.

7. The Inside is NOT the only Management domain. The results of anyinstitution exist ONLY on the outside. Management exits for the sake of theinstitution's results. It has to start with the intended results and organize theresources of the institution to attain these results. It is the organ that rendersthe institution, whether business, church, university, hospital or a batteredwoman's shelter, capable of producing results outside of it.

8. Management's concern and management's responsibility are everything thataffects the performance of the institution and its results - whether inside or outside, whether under the institution's control or totally beyond it.

Strategy- The New Certainties:-

Strategy converts an organization's set of assumptions into performance byallowing it to be purposefully opportunistic. According to Drucker, strategies mustconsider the following five new certainties that are more social and political, rather than economic.

1. The Collapsing Birth-rate in the Developed World.2. Shifts in the Distribution of Disposal Income.3. Defining Performance.4. Global Competitiveness.

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5. The Growing Incongruence between Economic Globalization and PoliticalSplintering.

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Knowledge-Worker Productivity:-

Drucker reviews the history of manual-worker productivity in manufacturingduring the 20th century (which saw a fifty-fold increase) and speaks to the need for new methods that will make the improvements in knowledge-worker productivity thatwill be required in the 21st century. The knowledge-worker has a different jobdescription from the manual-worker on a production line. Drucker identifies these sixmajor factors for knowledge-worker productivity in the future.

1. The knowledge-worker's question is "What is the task?"2. Knowledge-workers have to manage themselves and have autonomy.3. Continuing innovation has to be part of the work, the task and the

responsibility of knowledge workers.4. Knowledge work requires continuous learning, and continuous teaching by

the knowledge worker.

5. Productivity of the knowledge worker is not primarily a matter of quantityof output. Quality is at least as important.

6. Knowledge workers must be treated as "assets" rather than a "costs". Theymust prefer to work for the organization, over all other opportunities.

Managing Oneself:-

Drucker believed that the only way to find out one's strengths is through whathe calls feedback analysis - "Whenever one makes a key decision, and whenever onedoes a key action, one writes down what one expects to happen.

1. Concentrate on your strengths. Place yourself where your strengths can produce performance and results.

2. Work on improving your strengths. The feedback analysis shows where toimprove skills, and get new knowledge. One can usually get enough skillor knowledge not to be incompetent in it.

3. Identify areas where intellectual arrogance causes disabling ignorance.4. Take action to remedy bad habits that inhibit effectiveness and

performance.5. Be on the lookout for failures due to bad manners and lack of common

courtesy.6. Do not take on jobs and work assignments where there is little talent and

little chance to be even mediocre in performance. Use your energy to makea competent person into a star performer.

Like one's strengths, how one performs is individual. It is personality. It surelyis formed long before a person goes to work. And how a person performs is a given,

just as what a person is good at is a given. It can be modified, but is unlikely to bechanged. And just as people have results by doing what they are good at, people haveresults by performing how they perform. .

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Management by objective:-

What is MBO?

Management by objectives (MBO) is a systematic and organized approach thatallows management to focus on achievable goals and to attain the best possible resultsfrom available resources.

It aims to increase organizational performance by aligning goals andsubordinate objectives throughout the organization. Ideally, employees get stronginput to identify their objectives, time lines for completion, etc. MBO includesongoing tracking and feedback in the process to reach objectives.

Management by Objectives (MBO) was first outlined by Peter Drucker in1954 in his book 'The Practice of Management'. In the 90s, Peter Drucker himself

decreased the significance of this organization management method, when he said:"It's just another tool. It is not the great cure for management inefficiency...Management by Objectives works if you know the objectives , 90% of the time youdon't."

Core Concepts

According to Drucker managers should "avoid the activity trap", getting soinvolved in their day to day activities that they forget their main purpose or objective.Instead of just a few top managers , all managers should participate in the strategic

planning process, in order to improve the implement ability of the plan, andimplement a range of performance systems, designed to help the organization stay onthe right track.

Managerial Focus

MBO managers focus on the result , not the activity. They delegate tasks by"negotiating a contract of goals" with their subordinates without dictating a detailedroadmap for implementation. Management by Objectives (MBO) is about setting your objectives and then breaking these down into more specific goals or key results.

Main Principle

The principle behind Management by Objectives (MBO) is to make sure thateverybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles andresponsibilities in achieving those aims. The complete MBO system is to getmanagers and empowered employees acting to implement and achieve their plans,which automatically achieve those of the organization.

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MBO is a Process

A process consisting of a series of interdependent and interrelated steps:

1. Formation of clear, concise statements of objectives2. The development of realistic action plans for their attainment3. The systematic monitoring and measuring of performance and

achievement4. Taking correct actions necessary to achieve the planned results.

Every objective must meet these criteria:

- Is it Specific?- Is it Measurable?- Is it Appropriate?- Is it Realistic?- Is it Time-bound?

Objectives need quantifying and monitoring. Reliable managementinformation systems are needed to establish relevant objectives and monitor their "reach ratio" in an objective way. Pay incentives (bonuses) are often linked to resultsin reaching the objectives. All individuals within an organization are assigned aspecial set of objectives that they try to reach during a normal operating period. Theseobjectives are mutually set and agreed upon by individuals and their managers.Performance reviews are conducted periodically to determine how close individualsare to attaining their objectives. Rewards are given to individuals on the basis of howclose they come to reaching their goals.

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Stages of M.B.O:-

1. Define corporate objectives at board level2. Analyze management tasks and devise formal job specifications, whichallocate responsibilities and decisions to individual managers3. Set performance standards4. Agree and set specific objectives 5. Align individual targets with corporate objectives6. Establish a management information system to monitor achievementsagainst objectives

Advantages of M.B.O:-

1. Motivation- Involving employees in the whole process of goal setting andincreasing employee empowerment increases employee job satisfaction andcommitment.

2. Better communication and Coordination- Frequent reviews and interactions between superiors and subordinates helps to maintain harmoniousrelationships within the enterprise and also solve many problems facedduring the period.

3. Clarity of goals- With MBO, came the concept of SMART goals i.e. goalsthat are:

- Specific- Measurable- Achievable

- Relevant, and- Time bound.

The goals thus set are clear, motivating and there is a linkage betweenorganizational goals and performance targets of the employees. The focus is on futurerather than on past. Goals and standards are set for the performance for the future with

periodic reviews and feedback.

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Limitations of M.B.O

There are several limitations to the assumptive base underlying the impact of managing by objectives, including:

1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.

2. It underemphasizes the importance of the environment or context in whichthe goals are set. That context includes everything from the availability andquality of resources, to relative buy-in by leadership and stake-holders. As anexample of the influence of management buy-in as a contextual influencer, ina 1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded thatcompanies whose CEOs demonstrated high commitment to MBO showed, onaverage, a 56% gain in productivity. Companies with CEOs who showed low

commitment only saw a 6% gain in productivity3. Companies evaluated their employees by comparing them with the "ideal"employee. Trait appraisal only looks at what employees should be, not atwhat they should do

4. It did not address the importance of successfully responding to obstacles andconstraints as essential to reaching a goal. The model didnt adequately copewith the obstacles of:

Defects in resources, planning and methodology, The increasing burden of managing the information organization

challenge, The impact of a rapidly changing environment, which could alter the

landscape enough to make yesterdays goals and action plansirrelevant to the present.

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CHESTER BERNARD

SOCIAL SYSTEM APPROACH

Social system approach was introduced by Vilfredo Pareto, a sociologist. Hisideas were later developed by Chester Bernard. According to this approach anorganization is essentially a cultural system composed of people who work incooperation. The major features of this approach are as follows:

1. Social system, a system of cultural relationship2. Relationship exist among internal and external environment of organization3. Cooperation among group members is necessary4. Efforts directed-harmony between goals of the organization and the various

groups therein

Contributions of Bernard

Chester Bernards contribution to management particularly social systemapproach is overwhelming. He has analyzed management as a truly social systemapproach since, in order to comprehend and analyze the functions of executives, hehas looked for their major tasks in the system in which they operate. He has analyzedthe nature of cooperative social system, as he found non logical factors alsoinfluencing human behaviour in the organization. The major contributions of Barnard

can be presented as follows:-

Concept of Organization: An organization exists when three conditions are fulfilled:

1. There are persons able to communicate with each other 2. They are willing to contribute to the action3. They attempt to accomplish a common purpose

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Formal and Informal Organizations: A manager needs to take care that both formsof communication exists in the organization. Both have different roles and depend oneach other.

Elements of Organization: According to Barnard, there are four elements of a

formal organization

1. Departmentation2. Effective And efficient incentives3. A system of power 4. A system of logical decision making

Authority : According to Barnard a person does not follow an order just because it isgiven by a superior but he will follow only when following four points are met

1. He can understand the communication2. He believes it is not inconsistent with the organizational purpose3. He believes it to be compatible with his personal interest as whole4. He is mentally and physically able to comply with it

Functions of the Executive: Barnard has identified three types of functions which anexecutive performs

1. Maintenance of organizational communication through formal interactions2. To achieve organizational purpose3. Formulation and Definition of organizational purpose

Motivation: Opportunity of power and distinction, pride of workmanship, pleasantorganization, etc are some non monetary incentives that motivate the employees.

Executive Effectiveness: For an executive to be effective there should be leadershipquality in him. The executive leadership should not have preconceived notions andfalse ideologies. A leader should be firm and strong so that he can set an example for his subordinates.

Organizational Equilibrium: It refers to the matching of individual andorganizational efforts to satisfy individuals. It is very important for an organization to

be successful that its employees work towards the objectives of the organization. For this even the organization has to satisfy individual needs.

The above contributions of Barnard show how he was concerned for thedevelopment of the organization through social systems. He believed that the field of management was lacking in concepts and was clouded by ambiguous and evenerroneous thinking. In a sense he hoped that the functions would set things right. His

book The Functions of the Executive is regarded as the most influential book onmanagement during the pre modern management era.

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MAX WEBER

BUREAUCRACY

Maximilian Carl Emil Weber (21 April 186414 June 1920) was a Germanlawyer, politician, scholar, political economist and sociologist , who profoundlyinfluenced sociological theory. Weber's major works deal with rationalization insociology of religion, government, organizational theory, and behaviour.

BUREAURACY:-

Weber defined bureaucracies as "goal-oriented organizations designedaccording to rational principles in order to efficiently attain the stated goals." Weber saw the formation and execution of bureaucracies as necessary to complex societies.Weber has observed three types of power in organizations: traditional, charismatic,and rational-legal or bureaucratic. He has emphasised that bureaucratic type of power is the ideal one.

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Web er noted seven major principles:-

1. A formal hierarchical structure : - Each level controls the level below andis controlled by the level above. A formal hierarchy is the basis of central

planning and centralized decision making.2. Management by rules : - Controlling by rules allows decisions made at high

levels to be executed consistently by all lower levels.3. Organization by functional specialty : - Work is to be done by specialists,

and people are organized into units based on the type of work they do or skills they have.

4. An "up-focused" or "in-focused" mission : - If the mission is described as"up-focused," then the organization's purpose is to serve the stockholders,the board, or whatever agency empowered it. If the mission is to serve theorganization itself, and those within it, e.g., to produce high profits, to gainmarket share, or to produce a cash stream, then the mission is described as

"in-focused."5. Purposely impersonal : - The idea is to treat all employees equally and

customers equally, and not be influenced by individual differences.6. Employment based on technical qualifications : - (There may also be

protection from arbitrary dismissal.) The bureaucratic form, according toParkinson, has another attribute.

7. Predisposition to grow in staff "above the line. - Weber failed to noticethis, but C. Northcote Parkinson found it so common that he made it the

basis of his humorous "Parkinson's law." Parkinson demonstrated that themanagement and professional staff tends to grow at predictable rates, almostwithout regard to what the line organization is doing.

Pros and Cons of Bureaucracy:-

Pros:-

1. Insures (or attempts to insure) that organizations treat each client and employeeequitably and consistently.

2. Insures uniformity and consistency across the organization.3. Seeks to reduce graft and corruption.

Cons:-

1. Very inflexible- does not deal with exceptions and unique situations well.2. The rules tend to be difficult to change, and therefore slow to change, which

creates problems when the environment is dynamic.

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SUMMARY AND REVIEW

We have examined the evolution of management theory and research over the lastcentury.

Scientific Management Theory

The search for efficiency started with the study of how managers could improve person-task relationships to increase efficiency. The concept of job specialization anddivision of labour remains the basis for the design of work settings in modernorganizations. New developments like lean production and total quality managementare often viewed as advances on the early scientific management principles developed

by Taylor.

Administrative Management Theory

Max Weber and Henri Fayol outlined principles of bureaucracy and administrationthat are as relevant to managers today as they were written at the turn of the twentiethcentury. Much of modern management research renes these principles to suitcontemporary conditions. For example, the increasing interest in the use of cross-departmental teams and the empowerment of workers are issues that managers alsofaced a century ago.

Behavioural Management Theory

Researchers have described many different approaches to managerial behaviour,including the Hawthorne Studies and Human Relations. Often, the managerial

behaviour that researchers suggest reects the context of their own historical era andculture.

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APPLYING MANAGEMENT PRINCIPLES

Tips for Managers

Analyze whether an organizations division of labour is meeting its current needs.Consider ways to change the level of job specialization to increase performance.

Examine the way an organization works in reference to Weber andFayols principles. Decide if the distribution of authority in the hierarchy

best meets the organizations needs. Similarly, decide if the right systemto discipline or remunerate employees is being used.

Examine organizational policies to see if managers are consistently behaving in an equitable manner and whether these policies lead to ethicalemployee behaviour.

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CONCLUSION

As we conclude from this term paper that Development of Management Thought isthe framework through which managers operate. Their theories are the backbone of effective and sound management because it helps in proper functioning of administration growth, diversification, optimum use of human resources,specialization, coordination, communication, training, development and adaptation of new technologies.

All new innovations on the basis of management theories and practices are to be brought into ideas and then implemented to get the desired results. Public opinion,social responsibility, government organization relations and work forces compositionaffect the success in future scenario.

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BIBLIOGRAPHY

BOOKS REFFERED:1. Name :Management in 21 st CenturyAuthor : Peter F. Drucker.Published : September 1999Page No .: 207-212

2. Name : Principles and Practice of managementAuthor : L. M. PrasadEdition : Seventh Edition 2007Reprint : 2009Page No. : 44-84

3. Name : ManagementAuthor : James A.F Stoner

R. Edward FreemanDaniel R. Gilbert, Jr.

Edition : Sixth editionPage No. : 55-80

WEBSITES REFFERED:

1. www.reasearchandmarkets.com/reports2. www.bolabiz/competitive/fayol.html3. www.provenmodels.com4. www.businessweek.com/magazine/contents5. www.wikipedia.org/wiki/fwtaylor

termpaper1 ob

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