Some of the approaches to management are:-
1.Quantitative Approach 2. IT Approach to Management 3. Systems Approach 4. Contingency or Situational Approach 5. Scientific Management approach 6. Management Process or Administrative Management Approach 7. Human Relations Approach 8. Behavioural Science Approach.
Everything you need to know about the approaches to management. In recent years, as the interest, needs and importance of management have grown; different approaches and viewpoints to the study of management have come into being.
Management affecting people, technology, values and human wants has attracted the attention of psychologists, anthropologists, sociologists, mathematicians, economists, politicians, scientists, physicists, biologists, business administration scholars and even practising managers.
As a result, various schools of management thought, each employing certain beliefs, views and disciplines, have come into existence.
Approaches to Management: Classical, Modern, Scientific, System and Behavioural Science Approach
Approaches to Management – Developed to Explain the Nature and Technique of Managerial Practices
A number of approaches have been developed to explain the nature and technique of managerial practices.
They are briefly described below:
1. The Empirical or Case Approach Management by Custom School:
This is based on the belief that, experience is the best guide to knowledge. This approach analyses management by studying the case histories of successful managers. A study of the successes and failures of outstanding managers is made. Whenever a problem arises, the managers would seek guidance by referring to the experience of those managers who would have solved similar problems. Thus, no new strategy is evolved and little effort is made to blaze new trails. Further, it is forgotten that what fits one enterprise may not fit another.
2. The Interpersonal Behaviour Approach (Behaviour School):
Since management involves getting things done through people, this approach concentrates on the human aspects of management. This school believes that when people work together to accomplish objectives, people should understand one another. This seeks to solve problems by applying psychology to management. Thus, this approach lays emphasis on the importance of leadership, motivation of people at work and the influence of work environment.
3. The Group Behaviour Approach (Social School):
This approach is concerned primarily with the behaviour among individuals. Persons belonging to a particular social group have common feelings and attitudes and they form an informal organization. Problems created by them cannot be resolved by authorities in the formal organization. This school of thought, therefore, attaches importance to the need for cooperation and positive interaction among such groups of people so that work flow will be smooth.
4. The Operational Approach (Management Process School):
This approach views management as an activity based on certain unique management functions. Management is regarded as a process for getting things done through the functions of planning, organizing, staffing, leading and controlling. It involves coordination of human and material resources.
These functions of management are universal regardless of the type of enterprise. According to this school of thought, management no doubt makes use of other social and biological sciences; but they are made use of only to the extent they are relevant and that the fundamental functions of management as stated above constitute the core of management study.
5. The Decision Theory Approach:
This approach concentrates on the decision making function of management. According to this, the central focus of management is on decision making. The decision of what to achieve, and how to achieve it are the real challenges before a manager. It is concerned not only with making of decisions but also with everything that precedes a decision and everything that follows it.
6. The Communication Centre Approach:
This approach views management as a centre receiving information, processing it and disseminating it thus emphasizing the role of communication in management of business.
7. Systems Approach to Management (Systems Management School):
This approach regards an enterprise as a system. A system is composed of related and interdependent elements forming a unitary whole. Every system is made up of several subsystems. Similarly an organization is also viewed as a system made up of several parts in the form of departments while each department is independent and accomplishes specific predetermined goals; all are coordinated by the top management.
For example, to decide on expanding the productive capacity, data from other departments in charge of product planning, market research, finance etc., are collected because the action of one department influences the action of others. Thus, the main focus of systems approach is on the interdependence and interrelatedness of the various subsystems. Each aspect should not be studied in isolation but must be examined in relation to the entire system as a whole.
8. The Mathematical or ‘Management Science’ Approach:
This school believes that managing or planning or decision-making can be expressed in mathematical symbols and relationship. Modern managers face problems arising out of increase in the size and complexity of organizational structures. In the United States of America and other industrially advanced countries, executives are turning increasingly to computer applications for finding solution to their problems. The scientific and technological advance has thus brought management and mathematics closer to each other.
The main features of this school of thought are:
i. Since management is concerned with problem solving, it has to make use of mathematical tools and techniques.
ii. The different problems are capable of being quantified and expressed in the form of models (equations).
iii. Management problems can be described in mathematical symbols.
Operations Research, mathematical tools, simulation and model building are the basic methodologies developed by this school of thought. But with all these advantages, one must be conscious of the limitations of this school of thought. Mathematical models can never replace sound judgement. They can at best serve as tools helping the process of judgement. There are other complicated areas of management which involve people. They cannot be reduced to any mathematical formula. Human factor in management is no less important.
This approach is based on the belief that personal attitudes and group behaviour are influenced by the technical system in which people work. This approach thus lays emphasis on production, office operations, etc. Change in the technical system is called for, if the social and technical systems do not go hand in hand.
This approach is the very latest approach of existing approaches. According to this approach, there is no single way or best way to address a given problem situation. This approach is opposed to one size fits all formula approach. Managers should not labour under the notion that managerial principles and techniques have universal applicability.
They have to deal with different situations differently. The approach one should adopt depends on characteristics or requirements of the situation in which a problem crops up. For example, when there is low productivity in a facility, classical theory prescribed higher wages for workers while neo-classical theory favours enhancing the morale, motivation and job satisfaction of workers.
But manager pursuing a contingency approach shall not apply either theory for the entire manpower. He would increase the wage for low skilled and unskilled workers while he would introduce alternative work options, participative management and employee empowerment for talented employees.
Similarly autocratic leadership is workable in the case of illiterate workers whereas, participative leadership may work wonders in the case of skilled and talented workers and lease faire leadership is suitable to employees in R&D wing. Likewise financial incentive is more appropriate for employees at the lower level of organizational hierarchy while, non-financial incentives like ESOP, variable pay, career advancements and so on may prove to be highly effective for knowledge workers and employees at the higher echelons of management.
Thus, contingency approach with situational emphasis and integration of environment into management and practice seems more appropriate in the contemporary context. However, critics point out that there is no theoretical base for contingency approach. Further, it is stated that efficacy of contingency approach depends on capability of managers to understand a given situation and choose appropriate technique instead of situation itself.
Approaches to Management – Quantitative Approach, IT Approach, Systems Approach and Contingency or Situational Approach
There are several approaches to understand what management is. We can understand how managers take decisions through the decision-making approach. Empirical or case study approach helps us to know what management is through the experiences of various successful managers. Even the failure stories unfold certain mystery and this forms a part of management lessons.
Contingency or situational approach explains the managerial practices in the event of a contingency or situation. Socio-technical system approach explains that every organisation has a social and a technical dimension. It is important to design managerial roles considering the technical and social dimensions in the organisation.
Mere technology cannot make the organisations successful. This approach states that the aspirations of the individual employees and also of the society at large need to be considered. Systems approach considers that functions of management are sub-systems and the organisation is a system where all these functions are interrelated. This approach is explained further here.
Modern management theory can be traced from 1960s to today and it can be viewed more closely through three contemporary approaches to management, i.e., quantitative approach, simulation approach and contingency or situational approach.
Morale and productivity though are closely related, there are other factors as well that impact productivity. Quantitative approach explores the linkage between man and machine with a focus on fine-tuning the principles of management. The ownership and management is separated. The hired management professionals are given more control and this has resulted in the wider use of scientific methods of management.
Quantitative approach is also called mathematical approach or management science approach. This involves use of mathematical or quantitative approach for decision making more often called Operations Research.
This considers management as a system of mathematical models and processes and involves interdisciplinary approach. Here, managerial decisions are based more on the scientific techniques for providing quantitative base. Here management is viewed as a system of logical process.
Techniques such as – linear programming, simulation, queuing, project crashing, etc., extensively use mathematical symbols, relationships and models in analysing the management problems such as – cost minimisation, profit maximisation, resource optimization, etc.
This approach has one serious limitation. Not all management problems can be expressed in terms of mathematical models and these models cannot be considered to provide judicious decisions. As Harold Koontz observed, mathematics is just a tool and it cannot be viewed as school or a separate approach to management theory.
The current trend is that every manager embraces Information Technology (IT) solutions for delivering quality services with improved administration. IT empowers everyone to perform effectively and efficiently, for instance, retailers adopt new technologies, such as – the self-scanners; Indian Railways adopt surge pricing wherein the railway tickets cost more when there is heavy demand – if the demand is less, the tickets cost less.
Increasing volumes and value of e-transactions these days, is an indication of wide acceptance of IT in both government and non-government circles including social sector. Automation is the current buzzword everywhere whether the organisation is in the agriculture, manufacturing or service sector.
In other words, IT has become an integral part of our lives. Virtually there is no sector which is not revolutionized by IT. IT is extensively deployed to develop IT applications, business solutions and devices. The extent has been so widespread that one can switch on the air conditioner even while sitting at the office.
Every organisation, irrespective of its size, today earmarks certain budget to embrace the new IT technologies so that they can delight their customers with quality service. IT approach to management has directly triggered cost reduction and profit maximisation besides increasing service efficiency.
Social media, mobile technologies, analytics and cloud technologies (SMAC) are the leading technologies in IT space besides artificial intelligence, big data analytics, machine learning, robotics, etc.
IT approach to management has contributed to improvement in quality of life, shortening of transaction time, large number of jobs in both software and hardware. IT approach is also known for loss of jobs, but, it is observed that new jobs and software are created. This means that everyone must keep learning about new IT technologies on a continuing basis.
Self-service kiosks in restaurants, airports, retail establishments, etc., facilitate the customer to complete the transactions faster. Companies like Uber and Ola revolutionised the erstwhile overcrowded transport market through integration of customers, channel partners (Auto/cab drivers are called channel partners) and other regulatory agencies through Global Positioning System (GPS), one of the super formats of IT approach to Management.
The IT approach to management delivers a unique experience to every stakeholder including customer, employee, team leaders, management, owners, and general public and regulatory agencies.
One of the modern approaches to understand management is the systems approach. Here, the organisation is viewed as a system. Every department of the organisation is considered as a sub-system. It is also possible that every department can be viewed as a system and every section in the department can be viewed as a sub-system. Thus, systems approach helps to study the basic features and functions of the organisation to its minutest detail.
A system, by concept, is a collection of interrelated parts called sub-systems, which constitute one whole unit. Systems approach facilitates the study of each of these parts in detail to have a close understanding of the whole system. Human body is often cited as the best example for a system.
In human body we have different sub-systems such as – digestive system, central nervous system, and so on. Every part of the body such as – the eyes, brain, heart, and so forth, can also be viewed as a sub-system. A study of each of the parts of the body is necessary to understand the whole body.
From the systems point of view, the functions of management are –
iii. Complex and intertwined that each function of management can be found in other functions.
Figure 2.3 explains the feature of interdependence among the functions of management. Though, in the chart, it is shown that planning is the first function and control is the last function, in reality, there is no such starting and ending function.
The first task is the identification of managerial problem and the last one is reaching the solution for a given problem. The dotted line represents feedback line. In the process of control, if there is any deviation from the plans or targets, it can be corrected by verifying each of the earlier functions and identifying where things could have gone wrong.
In Figure 2.4, the letters P (planning), O (organising), S (staffing), D (directing), and C (controlling) represent the functions of the manager. It shows that in the planning function (shown horizontally across or vertically down), there are other functions of management such as – organising, staffing, directing, and controlling. The letter X shows the overlapping area, and hence, it is to be ignored. Figure 2.3 shows that each of the management functions can be f6und in the other functions also.
For instance, the planning and control functions are inseparable. Any attempt to control without plans is meaningless. It is because; plans form the basis for control. In other words, there is ‘planning in control’ and there is also ‘control in planning’. Similarly, there is ‘organising in planning’, and also, vice versa.
With the result, the manager cannot say, ‘Yes, the planning function is over, now I can start the organising function’. The manager has to carry out some of the functions simultaneously while keeping track of other functions.
Chester Barnard and H. Simon are the pioneers who advocated for systems approach to management. Here, organisations are viewed as open and organic system and every department in the organisation is viewed as a subsystem. All subsystems interact and are interdependent. According to systems approach, management is viewed as a system that is made of subsystems integrated into a unity or orderly totality.
Systems approach is so flexible that it can be comfortably applied to every context. For instance, the word economy can be viewed a system and every nation can be viewed as a subsystem. Similarly, a particular village can be viewed as a system and every household there in can be viewed as subsystem. An industry is a system and every firm or a company operating therein is a subsystem.
A firm or company can also be viewed as a system and the subsystems there include HR, Finance, Marketing, R&D, Operations, IT, etc. The system works based on the information, material or energy from other subsystems as inputs. The input so received from each system gets processed and moves to other systems as output.
The overall effectiveness of each system is determined by the effectiveness of the subsystems. Systems approach facilitates a close examination of problem in each sub-system and organization-wide solutions can be designed and delivered better where the process approach fails. However, this approach also is criticized for not providing any tool or technique for problem solving and thus considered to be abstract and vague.
Organisations behave as situation demands. In other words, decision making is contingent on situations. As situation changes, the solutions also differ. This is the latest approach to problem solving. Case study approach which is widely followed in today’s premier business schools across the world has emanated from this thinking. Management problems vary with situation and require to be handled differently as situation demands. Where the problems are of repetitive nature, this approach proves very useful.
However, all problems are not likely of the same nature and hence this approach also has limitations. The functioning of organisations is not a matter of the manager’s choice. It is contingent on external or internal environment or both. Under this approach, managers identify the variables that critically influence managerial behavior in particular and organisational performance in general, and address the problems associated with these variables. This way, it is an improvement over the systems approach.
Approaches to Management – Top 9 Approaches
1. Scientific Management approach.
2. Management Process or Administrative Management approach.
3. Human Relations approach.
4. Behavioural Science approach.
5. Quantitative or Mathematical approach.
6. Systems approach.
7. Contingency approach.
8. Operational approach.
9. Empirical approach.
The industrial revolution in England gave an immense impetus for the scientific management approach. It brought about such an extra ordinary mechanisation of industry that it necessitated the development of new management principles and practices. Bringing groups of people together for the purpose of working in the factory posed problems for the factory owners.
The establishment of formal organisation structure, formal lines of authority, factory systems and procedures had to be undertaken for coordinated effort. In order to deal with these problems, a management movement known as ‘Scientific Management’ was born.
Frederick Winslow Taylor (1865-1915) was the first to recognise and emphasise the need for adopting a scientific approach to the task of management. The introduction of the concept of standard time, standard output, standard cost, standardisation of production process, change in the attitude of management and workers to bring about the mutuality of interests are the important landmarks of scientific management. This approach was supported and developed by Henry L. Gantt, Frank Gilbreth, Lillian Gilbreth, Harrington Emerson, etc.
The advocates of this school perceive management as a process consisting of planning, organising, commanding and controlling. In the words of W.G. Scott, “It aims to analyse the process, to establish a conceptual framework for it, to identify principles underlying it, and to build a theory of management from them”.
It regards management as a universal process, regardless of the type of the enterprise, or the level in a given enterprise. It looks upon management theory as a way of organising experience so that practice can be improved through research, empirical testing of principles and teaching of fundamentals involved in the management process.
The process school is also called the ‘traditional’ or ‘universalist’ school as it believes that management principles are applicable to all the group activities, Henry Fayol is regarded as the father of this school. Oliver Shelden, J.D. Mooney and Chester I. Barnard are among the other important contributors to this approach.
The human relations approach is concerned with the recognition of the importance of human element in organisations. Elton Mayo and his associates conducted the world famous Hawthorne Experiments and investigated the myriad of informal relationships, social cliques, patterns of communication and patterns of informal leadership. As a result of these experiments, a trend began which can be phrased as ‘being nice to people’. This trend was eventually termed as ‘the human relations movement’.
The human relations approach revealed the importance of social and psychological factors in determining workers’ productivity and satisfaction. It was instrumental in creating a new image of man and the workplace. It put stress on interpersonal relations and the informal groups. “It’s starting point was in individual psychology rather than the analysis of worker and work. As a result, there was a tendency for human rationalists to degenerate into mere slogans which became an alibi for having no management policy in respect of the human organisation.” Nevertheless, this school has done a unique job in recognising the importance of human element in organisations.
The ‘behavioural science’ approach utilises methods and techniques of social sciences such as psychology, sociology, social psychology and anthropology for the study of human behaviour. Data is objectively collected and analysed by the social scientists to study various aspects of human behaviour.
The pioneers of this school such as Gantt and Munsterberg reasoned that in as much as managing involves getting things done with and through people, the study of management must be centred around the people and their interpersonal relations.
The advocates of this school concentrated on motivation, individual drives, group relations, leadership, group dynamics and so forth. The noted contributors to this school include Abraham Maslow, Fredrick Herzberg, Victor Vroom, McGregor, Lawler, Sayles, and Tannenbaum.
This approach stands for using all pertinent scientific tools for providing a quantitative basis for managerial decisions. The abiding belief of this approach is that management problems can be expressed in terms of mathematical symbols and relationships. The basic approach is the construction of a model because it is through this device that the problem is expressed in its basic relationships and in terms of selected objectives. The users of such models are known as operations researchers or management scientists.
Linear programming, Critical Path Method, Programme Evaluation Review Technique, Breakeven analysis, Games Theory and Queueing Theory have gained popularity for solving managerial problems these days. These techniques help the managers in improving their decisions by analysing the various alternatives in a scientific manner.
The application of mathematical techniques is particularly useful in solving the physical problems of management such as inventory and production control. They can never be substitute for knowledge, experience and training necessary for understanding the human behaviour.
A system is composed of elements or subsystems that are related and dependent on each other. The system approach is based on the generalisation that an organisation is a system and its components are inter-related and inter-dependent. This approach lays emphasis on the strategic parts of the system, the nature of their interdependency, goals set by the system and communication network in the system.
Another basic feature of the systems approach is that attention is paid towards the overall effectiveness of the system rather than the effectiveness of subsystems. Under system approach, the overall objectives and performance of the organisation are taken into account and not only the objectives and performance of its different departments or subsystems.
The spiritual father of this school of management was Chester I. Barnard. The systems theory lays emphasis on the interdependency and interrelationships between the various parts of a system.
It stresses communication and decision processes throughout the organisation. It follows an open system approach. The organisation as an open system has an interaction with the environment. It can adjust to the changes in the environment.
The latest approach to management is known as ‘contingency’ or ‘situational’ approach. Underlying idea of this approach is that the internal functioning of organisations must be consistent with the demands of technology and external environment and the needs of its members if the organisation is to be effective.
This approach suggests that there is no one best way to handle any management problem. The application of management principles and practices should be contingent upon the existing circumstances. Functional, behavioural, quantitative and systems tools of management should be applied situationally.
There are three major parts of the overall conceptual framework for contingency management – (a) environment; (b) management concepts, principles and techniques; and (c) contingent relationship between the two. The environment variables are independent and management variables (process, quantitative, behavioural and systems tools) are dependent. Every manager has to apply the various approaches of management according to the demands of the situation.
Koontz and O’Donnell have advocated operational approach to management. This approach recognises that there is a central core of knowledge about managing which exists in management such as line and staff, patterns of departmentation, span of management, managerial appraisal and various managerial control techniques. It draws from other fields of knowledge and adapts within it those parts of these fields which are specially useful for managers.
“The operational approach regards management as a universally applicable body of knowledge that can be brought to bear at all levels of managing and in all types of enterprises. At the same time, this approach recognises that the actual problems managers face and the environments in which they operate may vary between enterprises and levels”. The application of science by a perceptive practitioner must take this into account in finding solutions to management problems.
According to this approach, management is the study of the experiences of managers. The knowledge based on experiences of successful managers can be applied by other managers in solving problems in future and in making decisions. Thus, the empirical school is based on analysis of past experience and uses the case method of study and research.
Managers can get an idea of what to do and how by studying management situations of the past. They can develop analytical and problem-solving skills. They can understand and learn to apply effective techniques in comparable situations.
No one can deny the value of analysing past experience to obtain a lesson for the future. But management, unlike law, is not a science based on precedent, and future situations exactly resembling those of the past are unlikely to occur. Indeed, there is a positive danger in relying too much on past experience…….. for the simple reason that a technique found “right” in the past may be far from an exact fit for a somewhat similar situation of the future.
Though the theories developed by scholars and practitioners on management are aimed at finding the best way of doing things; the management theory and science does not advocate ‘one’ best way to do things in every situation. Hence effective management is always situational management.
The literature on management post World War II, has grown at a rapid pace which on one hand has greatly helped in improving research, teaching and practice but also created differences of opinion and controversies.
The management theory has identified various approaches:
(i) Empirical Approach
(ii) Interpersonal Behaviour Approach
(iii) Group Behaviour Approach
(iv) Decision Theory Approach
(v) Mathematical Approach
(vi) Operational Approach
(vii) System Approach
In the following paragraphs, a brief review of some approaches to management analysis is discussed as under:
Earnest Dale was the founder of this school and it started around 1952. Empirical means based on real experiences and observation rather than theory. The empirical school believed in experience and research. This school is based on the evidence that management problems could be solved in a better way depending on the experiences of the managers.
The scholars belonging to this school believe that to understand management clearly one must study and make comparison of; successes and failures of managers in various situations and their ways to solve specific problems, and then the learning derived from such observation can be applied to a similar real situation would result in same outcome.
They believe a theory can only be developed by the study and analysis of cases and comparative approach. Through the case studies some generalizations are made resulting in theories as useful guides for other managers.
Elton Mayo was the founder of this school. It was started during 1930. According to Mayo the study of management must be interpersonal relationship oriented. It must emphasize on “people” as a part of management.
According to this school, management is getting things done through people; hence managers should understand human relations. So, management must study interpersonal relations among people.
This approach is termed as ‘behavioral science’, ‘leadership’ or ‘human relations’ approach by different group of scholars. The approach gives significance to Interpersonal relations, Personality Dynamics and Cultures of individuals and groups.
The Interpersonal Behaviour Approach puts emphasis on human aspect of management, with the focus on individuals and their motivations as socio-psychological being.
Chester Barnard was the founder of this school. It is closely related to human relation school. Any organized enterprise where individual come and work as a group can be seen as a social organism; hence the group behaviour puts its emphasis on learning’s through group dynamics.
Group Behaviour approach is closely related to interpersonal behaviour approach, but is focused on studying the behavioural patterns and dynamics of individuals as ‘members of small or large groups’ in an organization.
Group Behaviour approach studies authority, influence of formal organization and social factors. The understanding of these factors has greatly helped management practitioners in real life situations. The aim of this approach is to find ways of achieving relatively effective organizational behaviour.
The believers of this approach emphasize that decision-making is the core of management. The Decision theory school was developed during the management science era. The decision theory emphasized on rational approach to decision i.e. it is a selection of a possible alternative course of action Decision making approach studies the persons / organizational groups making the decision, and the decision making process. Management is essentially a decision-making function.
The members of the organization are decision-makers and problem-solvers. The motive behind development of decision theory is not only to make better economic decisions but also to gain better understanding of social and psychological aspects and environment of the decisions and the decision-makers.
Although any school of management can use Mathematical tools, some management scholars and practitioners see management exclusively as a system driven by mathematical models and processes. Operation researchers and analysts primarily belong to this group.
This school emphasizes that the organization or decision making is a logical process and it can be expressed in terms of mathematical symbols and relationships. Since, management is concerned with problem solving so it must make use of mathematical tools and techniques for this purpose.
Mathematical approach believes that planning, decision-making, organizing, etc., can be done through logical processes and can easily and appropriately be represented using mathematical equations and models. The approach is closely related to decision theory approach but differs in a sense that it heavily depends on use of mathematics in management.
This school is developed during the scientific management era. According to this school, management is the study of functions of managers and the functions of managers are the same irrespective of the type of organization.
Operational approach has taken from all possible disciplines, which have direct or indirect effect on human behaviour and organizational functioning and developed its concepts.
The operational approach recognizes that “there is a central core of knowledge about managing which exists only in managements” and which can be applicable to all levels of management regardless of the type and size of the organization. Thus, the management process consisting of planning, organizing, staffing, directing and controlling was considered to be universal irrespective of the type of enterprise.
Operational approach takes into account that with the nature, size and level of enterprise the problems faced by the executives and managers in their real life vary.
“System is a set of things interdependent or connected together to form a complex unit. A whole composed of parts which are arranged in an order as per a scheme or plan”. Prior to World War II Systems approach was considered applicable & meaningful only to physical sciences.
It defines organization as a complex whole consisting of mutually interdependent parts or sub-systems, which interact with environment (Markets, government regulations, competitors, technology etc.) of which it is a part and as an open, adaptive system subject to all the pressures and conflicts of the environment and which continuously adjusts so as to keep efficiently working as per the changes in the environment.
Systems approach views management as a system of inter-relationships involving the processes of decision making, communication and balancing.
Chester I Barnard viewed executive as a component of a formal organization and latter as a part of entire cooperative system involving physical, biological, social and psychological elements. The systems approach allows us to see the critical variables and constants (those elements which do not change) and their interaction with one another.
Organized cooperation has been concerned since beginning of civilization. Organization and management were recognized in the Buddhist order ‘Sangha’ as far back as 530 B. C. Roman Catholic Church and ‘Military Organizations’ also offer good examples of various functions of management.
Importance of Management Theory:
The knowledge of management theory and techniques is important in order to:
i. Increase efficiency.
ii. Crystallize the nature of management.
iii. Improve research in management.
iv. Coordinating the efforts of people so that objectives of individuals get translated into social accomplishments and social goals of the organization can be attained.
The evolution of management theory can be studied under the following three parts:
1. Classical Theory.
2. Neo-Classical Theory
3. Modern Theory
Scientific Management approach is also known as the productivity or efficiency approach. The credit for pioneering and developing Scientific Management approach is primarily given to F. W. Taylor. He is recognized as the Father of Scientific Management.
Frederick Winslow Taylor has defined, “Scientific management means knowing exactly what you want, men to do and seeing that they do it in the best and the cheapest way”.
Frederick Taylor known as the ‘father of scientific management’. He started his career as a trainee in a small machine shop and was promoted to the level of an engineer. His writings revealed the practical wisdom and work experience; the main concern of his writings was on management at shop level and with efficiency of workers and managers at the production level.
His primary concern was to increase productivity through greater efficiency in production and increased pay for workers, through the application of the scientific method.
The major principles and elements of his scientific management may be summarized as follows:
(i) Separation of planning and execution.
(ii) Equal division of work and responsibility between management and labour.
(iii) Replacement of old rule of thumb method of management by scientific method, i.e., scientific determination of each element of a man’s job.
(iv) Scientific selection and training of workers.
(v) Absolute cooperation between labour and management in work performance.
(vi) Determining time standard for each job through stopwatch study of all the essential elements of the job.
(vii) Introduction of the system of functional foremanship at supervisory level.
(viii) Differential piece rates of wage payment — workers attaining or exceeding the standard drawing their pay at the higher rate and those falling short of it compensated by lower wage rate –
a. The scientific management movement early in the twentieth century was hailed as a “second industrial revolution”.
b. Scientific management brought a change in form of innovation in the field of management; this change generated tremendous resistance during the life time of Taylor.
c. Public criticism and opinions forced him to appear before the special Congressional Committee hearings in 1912.
d. The industrial psychologists challenged the Taylor’s assumption of ‘one’ best method of job performance.
e. Although Taylor explained management as a separate and identifiable discipline, his stress of time and motion study and on efficiency at the shop level seemingly overlooked other aspects of management, having influence particularly in the U.K. and the U.S.A.
f. Therefore, Taylors and scientific management to an extent overshadowed the work of Henry Fayol.
Other Contributors to Scientific Management:
Henry Lawrence Gantt:
He corrected Taylor’s ‘differential piece rate’ to ‘task and bonus plan’ He suggested a wage inceptive plan in which high efficiency is rewarded, for production which is above the set standard; by providing a percentage bonus.
Franck Gilberth & Lillian Gilberth (Wife):
They gave greater importance to minute details of work. Developed the principle of motion economy, which was intended to eliminate redundant motions and produce a rhythm by scientific development of essential motions.
Though administrative theory of management is based on the contributions of many scholars and practitioners like Henry Fayol, Max Weber, Sheldon, Mooney, Allen and Urwick, etc. But major part of it relates to Fayol’s work.
Henry Fayol regarded as father of modern management theory, for creating theory of general management applicable equally to all kinds of administration and in all fields i.e. social, political or economic.
Born in 1841 in France he was graduated in mining engineering in 1860 and got appointed as an engineer in a coal mining company, where through gradual promotion finally became the managing director of the company in 1888.
When Fayol got the position of managing director at that time the company was almost bankrupt and when Fayol retired from his services, it became one of the leading organization in the coal business in France. During the latter period of his service, Fayol used to deliver lectures on administration.
In year 1916, he published his well-known work in French entitled “Administration Industrielle et Generate” (Industrial and General Administration) which was translated in English in the year 1929 with few hundred copies distributed in U.K. Fayol wanted to establish a separate philosophy for management applicable generally to all human organizations. Fayol retired in 1918 officially, however his name continued to exist in the Board of Directors of the company till his death in 1925.
His theory can be understood under the following headings:
(i) Activities of a business
(ii) Functions of a Manager.
(iii) Principles of management.
(i) Activities of Business:
Fayol divided all activities of industrial enterprises into six groups.
They are as follows:
(ii) Functions of Manager:
He defined management in terms of five functions: planning, organising, commanding, coordinating and controlling. Henry Fayol, the father of functional or administrative management remarked: “To manage is to forecast and plan, to organize, to command, to coordinate and to control.”
Fayol believed that as one goes up the levels of management hierarchy the importance of managerial ability also goes up. Fayol also stressed on training in management, which could not be done without development of management theory.
(iii) Fayol’s Principles of Management:
Based on his own experiences and foresight into the field of management, Fayol suggested the fourteen principles of management as follows:
1. Division of Work:
Work should be divided among individuals and groups, so that everyone can focus on special portion of the task. Fayol believed work specialization is the best way to use the human resource in an organization.
2. Authority & Responsibility:
Authority and responsibility are closely related. As per Fayol, authority is the right to give orders and the power to get obedience, Responsibility is about being accountable, and hence both Authority and responsibility are co-extensive.
To ensure obedience and respect for superiors, and rules, procedures and policies. Fayol declares that discipline requires good superiors at all levels.
4. Unity of Command:
An employee should receive orders from one senior (superior/boss) only. If one employee receives commands from several superiors, it can lead to confusion and disorder.
5. Unity of Direction:
A group of activities with common objectives should have one plan and be headed by one person (manager). Unity of directions is different from unity of command.
The interests of one person should not take priority over the interests of the organization as a whole.
All the employees should be paid fairly and based on the work done, skills, knowledge, experience, cost of living and other factors yielding satisfaction to both employee and the firm.
Fayol defined Centralization as lowering the importance (authority) of the subordinate role and Decentralization as increasing the importance. The degree to which centralization or decentralization adopted should be based on the specific organization.
9. Scalar Chain:
It is the chain of superiors and subordinates from the highest level to the lowest level for the purpose of communication. It decides the issue of authority i.e. who is superior to whom. It refers to superior-subordinate relations throughout the organization. The existence of a scalar chain and obedience to it are necessary for the organizational success.
Order relates to arrangement of things and people. Everything should be in its place and there should be a place for everything. Every man in the organization should be properly placed i.e. right man in the right place. On the contrary, disorder would lead to confusion, inefficiency and failure to achieve the set objectives.
Management must treat everyone with equality, which is achieved through a combination of kindliness and justice.
12. Stability of Tenure of Personnel:
Management should retain employees who are skilled and efficient in their work and provide them clarity about their tenure so that both; the work and the employee are stable.
Management should encourage employees taking initiative i.e. doing things out of their regular scope of work with self-direction and motivation.
14. Espirit de Corps:
Management should strive to achieve team spirit and teamwork amongst the employees. Team spirit is of great importance to accomplish tasks.
Fayol did not make this list as an exhaustive and all-encompassing list; hence we need to have an understanding that there could be more principles added based on increased understanding of the subject.
Comparison of Taylor and Fayol:
Contribution of the Behaviourists, Sociologists and Psychologists:
As per Behaviourists:
“The study of management should be concerned with human behaviour in organizations and related matters; organizational effectiveness depends on the quality of relationships among people working in the organization; good management rests on the ability of managers to develop interpersonal competence among members and to support collaborative efforts at all levels of the organization.”
Behaviourists pay major emphasis on human relations, informal group communication, employee motivation and leadership styles Hawthorne Experiments (1928-32) conducted by Elton Mayo and his associates gave recognition to the contribution of behaviourists.
People who have contributed include Psychologists like A. H. Maslow, McGregor, Leavitt, Chris Argyris, Herzberg and McClelland and Sociologists like Bakke, Dubin, Katz, Gouldner and Etzioni.
This school is of recent origin having developed in late 1960’s. Prior to World War II Systems approach was considered applicable & meaningful only to physical sciences. System is derived from Greek word called ‘systema’ which means interrelated and interdependent components arranged in a systematic manner to get the objectives.
System works for a common objective. An organization takes the input in the form of various resources such as men, machine, money and material.
The process of the organization is the various methods and techniques through which input is converted into required output. This process totally depends upon the type of output required. Output may be in the form of product or services, product is the output which we can see and services are the output which we can’t. Feedback is taken in order to compare the output with the targeted result. If any changes or any deviations are found then those deviations are corrected.
Why Organisation Acts as a System?
The features of an organization as a system are as under:
(1) Common Objective – Organisation stands for the achievement of common objective whatever may be the efforts of system. It is towards the achievement of a common objective.
(2) Systematic Arrangement – The elements of the system are arranged in a systematic and peculiar way for the achievement of the result.
(3) Interaction and Inter-Relation – The elements of system are interrelated to each other and works in co-ordination and cooperation to get the output.
(4) Inter-Dependent – Each element is interdependent to each other and unless and until the previous one is not carried out, the second one can’t be started.
The system can be open or closed. An open system is one which is affected by its environment and a close system is one in which environment has no influence on the organization.
The contingency approach believes that it is impossible to select one way of managing that works best in all situations. As there is no one best way to do things, practice and solution of various problems depends upon the circumstances. Management should be prepared for all the possibilities (contingencies) and the internal functioning of the organization should be in accordance to the demands of organizational objectives, requirements of the external environment.
Different organizations with different objectives and different competitive environments require different plans. The task of manager is to apply his knowledge to realities in order to attain desired results i.e. managers must try to find the approach that is the best for them in a certain given situation, so they can achieve their goals.
It is important to note that the contingency approach focuses on the need for managers to examine the relationship between the internal and external environment of an organization.