In this article we will discuss about:- 1. Scientific approach to management 2. Administrative approach to management 3. Human approach to management.
1. Scientific Approach to Management – Frederick W. Taylor (1856-1915):
Scientific management arose from the need to increase productivity. The central question was – what could be done to get people to do more work in less time?
Attempts to answer this question were made at the turn of the century—a period of rapid industrialisation and technological change in the United States.
As engineers attempted to make machines more efficient, it was a natural extension of their efforts to work on the human side of the equation—making people more productive too.
Scientific management focuses on worker and machine relationships. Could some element of the work be eliminated or some parts of the operation combined? Could the sequence of these tasks be improved? Was there “one best way” of doing a job? In his pursuit of answers to such questions, Frederick W. Taylor slowly built the body of principles that constitute the essence of scientific management.
Frederick Winslow Taylor worked most of his life in steel mills, starting as a labourer and working his way up to the position of chief engineer. To improve productivity, Taylor examined the time and motion details of a job, developed a better method for performing that job, and trained the worker. Furthermore, Taylor offered a piece rate that increased as workers produced more.
One of his famous experiments had to do with increasing the output of a worker loading pig iron to a rail car. Taylor broke the job down into its smallest constituent movements, timing each one with a stopwatch. The job was redesigned with a reduced number of motions as well as effort and the risk of error.
Rest periods of specific interval and duration and a differential pay scale were used to improve the output. With scientific management, Taylor increased the worker’s output from 12 to 47 tons per day!
Another Taylor experiment dealt with shovel sizes. Taylor noticed that every plant worker used the same size shovel regardless of the material he was moving. This made no sense to Taylor. Taylor thought that the size of shovel should vary depending on the weight of the material being moved. After extensive experimentation, Taylor found that heavy material such as iron ore should be moved with small shovel and light material such as coke with large shovel. The result was significant increases in workers output.
Using similar approaches to other jobs, Taylor was able to define the “one best way” for doing each job. He could then, after selecting the right people for the job, train them to do it precisely in this one best way.
To motivate workers, he favoured incentive wage plan. The problem, as Taylor saw it, was that workers were inefficient because- (1) Workers tended to ration their work load or work less than they could, because working faster and harder would mean that there would be less or no work to do in the future. (2) Management failed to structure work effectively and to provide appropriate incentives.
The solution, to Taylor, lay in discovering the appropriate work standard and fitting wages to the standard. Management should establish specific work targets, pay workers according to work done, and provide regular feedback.
Principles of Scientific Management:
Following are the principles Taylor established for scientific management of an organization:
1. Management is a true science:
The solution to the problem of determining fair work standards and practices could be discovered by experimentation and observation. From this, it follows, that there is “one right way” for work to be performed.
2. The selection of workers is a science:
Taylor’s “first class worker” was someone suitable for the job. It was management’s role to determine the kind of work for which an employee was most suited, and to hire and assign workers accordingly.
3. Workers are to be developed and trained:
It is management’s task to not only engineer a job that can be performed efficiently, but management is responsible for training the worker as to how the work is to be performed and for updating practices as better ones are developed. This standardizes how the work is performed in the best way.
4. Scientific management is a collaboration of workers and managers:
Managers are responsible for giving instructions and workers are responsible for execution of work. The management has to see how the work is done. It is their responsibility to plan, i.e., designing work standards, selecting methods and tools, assigning work, devising incentive schemes and disciplining worker behaviour. Again, there should be co-operation and harmony between management and labour.
Taylor advocated two ideas that hardly seem special today, but were quite new 87 years ago. First, he recommended that employees be carefully selected and trained to do their jobs. Second, he believed that increasing workers’ wages would raise their motivation and make them more productive. Third, he gave rise to the idea of specialization. Before scientific management, departments such as, personnel, maintenance, and quality control were non-existent.
Even today the basic principles he set forth are a key part of our management thought, particularly in factory and industrial operations. Taylor and his associates, Henry Gantt, Frank and Lillian Gilbreth, Harrington Emerson, Horace Hathaway, and Sanford Thompson, spread the gospel of scientific management through countless speeches, articles, and books. Scientific management became a movement with wide application and many spokes-people.
The drawbacks were mainly for the workers:
1. It reduced the worker’s role to that of a rigid adherence to methods and procedures over which he had no discretion.
2. It led to increased fragmentation of work due to its emphasis on divisional labour.
3. It generated an economically biased approach to the motivation of employees by enabling pay to geared outputs.
4. It put the planning and control of workplace activities exclusively in the hands of the managers.
5. It ruled out any realistic bargaining about wage rates since every job was measured and rated ‘scientifically’.
Therefore, in summary, while the scientific management technique has been employed to increase productivity and efficiency both in private and public services, it has also had the disadvantages of ignoring the human aspects of employment. This led to the creation of boring repetitive jobs with the introduction of systems for tight control and the alienation of shop floor employees from their managers.
2. Administrative Approach to Management:
Where Taylor was concerned with management at the shop level (what we today would call the job of a supervisor), the Administrative theorists focused on the broad administrative principles applicable to higher organizational levels. We will mainly discuss views of three administrative theorists – Henry Fayol, Max Weber, and Mary Parker Follet.
a. Henry Fayol (1841-1925):
Henry Fayol, known as the Father of Modern Management, was a French industrialist who developed a framework for studying management.
Fayol divided the activities of organizations into six fundamental groups- (1) technical, or production, aspects; (2) commercial aspects (buying, selling, and exchanging goods); (3) financial aspects (the search for, securing of, and efficient use of money); (4) security (protecting the safety of employees and property alike); (5) accounting (including statistics and record keeping); and (6) managerial activities (planning, organization, control, etc.).
Fayol devoted most of his attention to the question of defining sixth group, i.e., managerial activities. He recognized management as a separate industrial activity like accounting, finance, production, distribution, and other typical business functions. He argued that management was an activity common to all human endeavours in business, Government, and even in the home.
He then proceeded to state fourteen principles of management which should be followed while performing managerial activities— fundamental or universal truths—that could be taught in schools and universities.
1. Division of Labour:
The more people specialize, the more efficiently they can perform their work. This principle is epitomized by the modern assembly line.
Managers must give orders so that they can get things done. While their formal authority gives them the right to command, managers will not always compel obedience unless they have personal authority (such as relevant expertise) as well.
Members in an organization need to respect the rules and agreements that govern the organisation. To Fayol, discipline will result from good leadership at all levels of the organisation, fair agreements (such as provisions for rewarding superior performance), and judiciously enforced penalties for infractions.
4. Unity of Command:
Each employee must receive instructions about a particular operation from only one person. Fayol believed that when an employee is answerable to more than one superior, conflicts in instructions and confusion of authority would result.
5. Unity of Direction:
Those operations within the organisation that have the same objective should be directed by only one manager using one plan. For example- the personnel department in a company should not have two directors, each with a different hiring policy.
6. Subordination of Individual Interest to the Common Good:
In any undertaking, the interests of employees should not take precedence over the interests of the organisation as a whole.
Compensation for work done should be fair to both employees and employers.
Decreasing the role of subordinates in decision making is centralization; increasing their role is decentralisation. Fayol believed that manager should retain final responsibility but also need to give their subordinates enough authority to do their jobs properly. The problem is to find the best amount of centralisation in each case.
The line of authority in an organization runs in order of rank from top management to the lowest level of the enterprise.
10. Order, Materials and People should be in the Right Place at the Right Time:
People in particular should be in the jobs or positions most suited for them.
Managers should be both friendly and fair to their subordinates.
12. Stability of Staff:
A high employee turnover rate is not good for the efficient functioning of an organization.
Subordinates should be given the freedom to conceive and carry out their plans, even though some mistakes may result.
14. Esprit De Corps:
Promoting team spirit will give the organisation a sense of unity. To Fayol, even small factors could help to develop this spirit. He suggested, For example- the use of verbal communication instead of formal, written communication whenever possible.
Fayol observed that the abilities needed by managers in given organization depend on the managers ‘position in its hierarchy -For example- in a lower-level job, specific technical skills but very little managerial ability are needed. As we move up the hierarchy, however, managerial abilities become more important as compared to technical skills.
Thus the general manager of a firm needs more managerial ability and less technical ability than a lower-level manager. Fayol noted, too, that the need for managerial abilities is also related to the size of the organization. Chief executives in a large business, For example- need a greater measure of managerial skill than chief executives in a small one. Fayol thought that managerial skill could be acquired and that the best way to acquire it was through a combination of education and practical experience.
Fayol was the first person to actually give a definition of management, which is generally familiar today namely ‘forecast and plan, to organise, to command, to co-ordinate and to control’. He also gave much of the basic terminology and concepts, which would be elaborated upon by future researchers such as division of labour, scalar chain, unity of command and centralization.
Although many of his management principles may not be universally applicable to today’s wide variety of organizations, they become a frame of reference against which many current concepts and theories have evolved.
Fayol’s theory has been criticized on the ground that it was more appropriate for the past than for the present. While many of these principles have been absorbed into modern day organisations, many of the principles were not designed to cope with conditions of rapid change and issues of employee participation in the decision making process of organisations.
Today, these guidelines seem less appropriate. For example- it was important to classical theorists that managers maintain their formal authority. Today’s better-educated employees, however, are less accepting of formal authority, especially when it is applied arbitrarily. They are also more likely than workers of the past to leave an organization if they are dissatisfied in it.
b. Max Weber (1864-1920):
Max Weber was a German sociologist. Weber developed a theory of authority structures and described organizational activity based on authority relations. He described an ideal type of organization – this he called a bureaucracy.
The bureaucracy is an organizational design that attempts to make organizations operate more efficiently by having a clear hierarchy of authority in which people are required to perform well defined jobs.
Note that the term bureaucracy as developed by Weber is not used here in the sense of red tape and inefficiency as is generally used today.
The view of rational-legal authority was basic to Weber’s concept of bureaucracy. Before discussing further, it is better to understand the concept of rational legal authority.
There are three types of legitimate authority:
1. Traditional authority – Where acceptance of those in authority arose from tradition and custom.
2. Charismatic authority- Where acceptance arises from loyalty to, and confidence in, the personal qualities of the leader.
3. Rational – Legal authority – Where acceptance arises out of the office, or position, of the person in authority as bounded by the rules and procedures of the organization.
Rational-legal authority is based on position within an organization. When it evolves into an organized administrative staff, it takes the form of a bureaucratic structure. Within this structure, each member of the administrative staff occupies a position with a specific delineation of power and compensation (i.e., salary). The various positions are organized in a hierarchy of authority. Fitness for a position is determined by technical competence. The organisation is governed by the rules and regulations.
Weber recognized that this ‘ideal bureaucracy’ didn’t exist in reality. But, rather, represented a selective reconstruction of the real world. His theory became the model for many of today’s large organizations.
Features of Bureaucratic Structure:
The features of Weber’s ideal bureaucratic structure are outlined below:
1. Division of Labour – Jobs are broken down into simple, routine, and well-defined tasks.
2. Authority hierarchy – Offices or positions are organized in a hierarchy, each lower one being controlled and supervised by a higher one.
3. Formal selection – All organisational members are to be selected on the basis of technical qualifications demonstrated by training, education, or formal examination.
4. Formal rules and regulations – To ensure uniformity and to regulate the actions of employees, managers must depend heavily on formal organizational rules.
5. Impersonality – Rules and controls are applied informally and avoid involvement with personalities and personal preferences of employees.
6. Career orientation – Managers are professional officials rather than owners of the units they manage. They work for fixed salaries and pursue their careers within the organisation.
In the ideal type of bureaucracy all these features would exist to a high degree, whereas in a less bureaucratic organisation they would be present to a smaller degree.
The efficiency of this rational and logistical organisation shares a considerable amount of common ground with the thinking of Fayol. In particular, features such as scalar chain, specialisation, authority and the definition of jobs which were so essential to successful management as described by Fayol, are typical of bureaucracy. There is also little doubt that Weber’s ideas concerning specific spheres of competence and employment based on technical competence would have considerable appeal for Taylor’s scientific managers.
Weber’s bureaucracy was an attempt to formulate an ideal prototype for designing organizations. It was a response to the abuses that Weber saw going on within the organizations of that time. Weber believed that his model could remove ambiguity, inefficiencies and patronage that characterized many organizations.
The adoption of bureaucratic type of management systems allow organisations to grow into large complex organised systems that are geared towards formalised explicit goals. Although many of the bureaucracy’s characteristics are still evident in large organizations today, it’s not as popular as it was a decade ago.
However, bureaucracy model has provided the theoretical framework and the point of departure for much of the current theory and empirical research on complex organizations.
Subsequent analysis by other researchers have identified many disadvantages of a bureaucratic structure:
1. Tendency of organisations to become procedure-dominated rather than goal dominated.
2. Heavily formalised organisational roles suppress initiative and flexibility of the job holders.
3. Rigid behaviour by senior managers can lead to standardised services that do not meet the needs of the client.
4. The rigid procedures and rules are demotivating for the subordinates that work in the organisations.
5. The exercise of control based on knowledge as advocated by Weber has led to the growth of experts whose opinions and attitudes may frequently clash with those of the more generalised managers and supervisors.
c. Mary Parker Follet (1868-1933):
Mary Parker Follett was one of the few women who were making a mark with predominantly male business people at the time. Follett is generally more studied for public administration than business administration. Nonetheless, she was a popular speaker of the day and made presentations to many businessmen’s groups on her views of how individual behaviour influenced work. This was a very unorthodox viewpoint at the time.
Three of Follett’s most noteworthy concepts were the “universal goal”, the “universal principle” and her “law of the situation.” According to Follett, the universal goal of organizations was “integration” of individual effort into a synergistic whole.
The “universal principle” was “circular or reciprocal response” which stated that no communication transactions should be seen as one way from supervisor to employer, but that every message had a result, which served as feedback to the sender—thus the concept of two-way or reciprocal communications.
Follett’s law of the situation was even more prophetic in that she taught that there is no one best way to do anything—that it all depends on the situation. Imagine how unhappy the Scientific Managers were with that idea!
Today, of course, the dominant way of thinking is that Follett was right and that “it all depends.” This thinking is called today “contingency theory” or “situational theory,” and it is in the mainstream of today’s management.
d. Other Administrative Management Theorists:
During the 1920s and 1930s a number of other writers, primarily those actively engaged in management or consulting practices, set forth their views, following the pattern established by Fayol. Luther Gulick and Lyndall Urwick, in particular, carried on Fayol’s work in the development of principles based on wide experience in industry and Government.
In 1937 they edited Papers on the Science of Administration. In these papers and other writings they popularised such principles as- (1) fitting people to the organisation structure; (2) recognizing one top executive as the source of authority; (3) adhering to unity of command; (4) using special and general staff; (5) departmentalising by purpose, process, persons, and place; (6) delegating and utilizing the exception principle; (7) making responsibility commensurate with authority; and (8) considering appropriate spans of control.
e. Contributions of Administrative Management Theorists:
Although there have been serious questions raised regarding the appropriateness of the approach and principles of the administrative management theorists, many of the concepts from this school are currently applied in organizations. The pyramidal form, the scalar principle, the concept of unity of command, the exception people, the delegation of authority, limited span of control, and departmentalization principles are currently being applied in the design of many organization.
Although the administrative management theorists have been criticized for their rigid approach with little recognition of human and sociological factors, their ideas still have applicability in the structuring of organizations and in providing general guidelines.
3. Human Relations Approach to Management:
During the 1920s, the dominant management philosophy changed drastically to what we call the Human Relations School of thought. This school was based on psychological concepts of man, e.g., man needs to be needed and that the work group is very important psychologically.
Instead of the philosophy of “economic man,” the concept of “social man” emerged. Managers became more concerned about employees as people and company social events and communication devices such as suggestion boxes.
We will discuss the contributions of Elton Mayo and Chester Barnard to the Human Relations approach of management.
a. Elton Mayo – Hawthorne Studies:
Mayo and other proponents of the human relations movement were concerned with task performance, but realized that it was greatly influenced by the social conditions that existed in organizations—the way employees were treated by management, and the relationships they had with each other.
Eventually, Mayo and his associates recognized that the answer resided in the fact that organizations are social systems. How effectively people worked depended, in great part, not only on the physical aspects of the working conditions experienced, but also the social conditions encountered.
The Hawthorne Studies demonstrated the important influence of human factors on worker productivity. There were four major phases to the Hawthorne Studies- the illumination experiments, the relay assembly group experiments, the interviewing program, and the bank wiring group studies. The intent of these studies was to determine the effect of working conditions on productivity.
The illumination experiments tried to determine whether better lighting would to increased productivity. It was found that the experimental group of female employees produced more whether the lights were turned up or down. Mayo observed that worker’s productivity increased because they knew that they were being researched.
It was discovered that increase or decrease in lighting had no relation with the productivity of workers, the increased productivity was a result of the attention received by the group. The bias in production because of knowledge of workers that they were being observed was recognized as “Hawthrone effect”.
In the relay assembly group experiments, six female employees worked in a special, separate area; were given breaks and had the freedom to talk; and were continuously observed by a researcher who served as the supervisor. The supervisor-researcher acted as their friend.
During the study, several variations were made in the working conditions. Surprisingly, the researchers found that the production of the group had no relation with working conditions. It went on increasing and stabilized at a high level, even when all the improvements in working conditions were taken away.
The bank wiring groups involved fourteen male employees and were similar to the relay assembly group experiments, except that there was no change of supervision. Here, the employees feared that because they were being studied, the company was eventually going to raise the amount of work they were expected to do each day.
To guard against the imposition of unreasonable standards (and, thus, to keep their jobs), the men agreed among themselves to keep output low. In other words, informal rules (known as norms) were established about what constituted acceptable levels of job performance. These social forces at work in this setting proved to be much more potent determinants of job performance than the physical factors studied. The workers produced only that much output as was decided by informal work group.
Both in the relay and bank wiring phases, change in productivity was attributed to group dynamics. The conclusion was that there was no cause-and-effect relationship between working conditions and productivity. Worker attitude was found to be important.
An extensive employee interviewing program of 21,000 interviews was conducted to determine employee attitudes toward the company and their jobs. As a major outcome of these interviews, supervisors learned that an employee’s complaint frequently is a symptom of some underlying problem on the job, at home, or in the person’s past.
Human Resources Movement discovered the importance of “the informal organization”. The informal organization is important because social norms, acceptance, and sentiments of the group can determine individual work behaviour, sometimes to a greater extent than changes in the working environment (including changes in incentives).
The focus on social relations in organizations, and on understanding workers and managers as human beings with social and emotional needs was a fresh beginning from the structural and functional theories of Taylor, Fayol and Weber.
These studies were first real attempt to undertake genuine social research in industrial setting. Some results-
1. Individuals cannot be treated in isolation, but function with group members.
2. That individual motivation did not primarily lie in monetary or physical condition, but in need and status in a group.
3. The strength of informal (as opposed to formal) groups demonstrated a behaviour of workers (formal supervisors were powerless in bank wiring group experiment).
4. It highlighted need for supervisors to be sensitive and cater for social needs of workers within the group.
Contribution of the Hawthorne Studies:
First, they are the single most significant studies in the field of organization behavior. Second, they put us on the road to shifting to a human relations focus in management. Third, they provided us insights into the roles of group dynamics and the importance of leadership style. However, from 1930s-1950s some doubt was cast on the increased applicability of these theories to every day working life.
b. Chester Barnard (1886-1961):
Chester Barnard went from a lowly entry position to the CEO of New Jersey Bell Telephone before he retired. When he did retire, he decided to record his insights about management in a classic book, “Functions of the Executive,” published in the mid-1930s. Like Follett before him, Barnard was ahead of his time.
Barnard taught that the three top functions of the executive were as follows- (1) establish and maintain an effective communication system, (2) hire and retain effective personnel, and (3) secure essential effort from these personnel, i.e., motivate employees. Barnard is also justly famous for his “Acceptance Theory of Authority.”
According to Barnard, managers only have as much authority as employees allow them to have. If you tell your employees to do something and they don’t do it, you have no real authority.
The acceptance of authority, according to Barnard, depends on four conditions:
1. Employees must understand what you want them to do—a matter of effective communication.
2. Employees must be able to comply with the directive—a matter of skill and training.
3. Employees must think that the directive is in keeping with organizational objectives.
4. Employees must think that the directive is not contrary to their personal goals.
According to Barnard, people come together in formal organizations to achieve things they could not achieve working alone. But as they pursue the organization’s goals, they must also satisfy their individual needs.
And so Barnard Arrived at His Central Thesis:
“An enterprise can operate efficiently and survive only when both the organization’s goals and the aims and needs of the individuals working for it are kept in balance.”
To meet their personal goals within the confines of the formal organization, people come together in informal groups, such as a friend circle. To ensure its survival, the firm must utilize these informal groups effectively, even if they at times work at cross purposes to management’s objectives. Recognition of the importance and universality of the “informal organization” was a major contribution to management thought.
c. Contributions of Human Relations Approach:
Both scientific management and general administrative theorists viewed organizational employees as machines. Contributors to the Human Relations approach forced managers in many organizations to reassess this simplistic view and consider the employees as individuals whose mental attributes can affect the efficiency of the organization. For the first time, the concept of group dynamics was recognized to use the informal organizations for the improved organizational performance.
d. Limitations of Human Relations Approach:
The human religionists overemphasized the psychosocial aspects. They have been criticized for viewing human relations in a closed system and for not considering economic, political, and other environmental forces. One of the major shortcomings of the early human relationists was inadequate consideration of the role of unions in industrial societies.
The impression from many of Mayo’s writings is that he thought unions were rather unnecessary if management was performing its functions effectively. This coincides with another criticism that Mayo was authoritarian and really was bent on the maintenance of the hierarchical structure but with the manager giving greater consideration to human factors in order to maintain the traditional system.
In spite of these criticisms, there is little doubt that the early human relationists had an impact on management practices.