Sindhu- Schools of Mgt Thoughts1

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SCHOOLS OF

MANAGEMENT THOUGHTS

Prepared by

Sindhu Divakaran



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Thinking on management as a separate field of learning and

practice began early in 19 th Century with Industrial Revolution . It

was this time that persons like Robert Owen , Charles Babbage ,Metcalf and Hentry Robinson Towne expressed their ideas on the

ways and means of making management practices more effective

and efficient.The evolution of modern management thinkingbegins in the nineteenth century and flourished during the

twentieth. The twentieth century has witnessed a revolution in

management theory ranging from classical theory to the Japanesemanagement approach.Today‘s management theory is the result

of the interdisciplinary efforts of many people.



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Robert Owen was primarily credited with making

specific suggestions regarding management

techniques in the areas of human relations while

Charles Babbage is credited with developing the

concepts of specialization of labour and profitsharing. These pre-classicists paved the way for

the theoretical framework of the classical school

of management.



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Management Thought HasBeen Grouped Into Four

Approaches

Early classical

Approaches

Neo Classical App Modern App Post Modern

Approaches

Scientific management School

Administrative School

Bureaucratic

Administration

Human Relations

Approaches

Behavioural

School

Quantitative theory

Decision theory

System Approach

Contingency

approach

TQM

Mc Kinsey's 7-S

Approach



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Early Classical Approaches



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Scientific Management:-

Frederick Winslow Taylor (1895)

“Father of Scientific Management” Taylor’s four principles of scientific management:

Work methods should be based onscientific observation – not “rules of

thumb.” Scientifically select, train, and develop

each worker

Cooperate with workers to ensure thatscientifically developed methods arebeing followed.

Managers analyze and plan work; workers

actually perform the tasks.



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Important Contributions

Time study (Observe & Analyze )

Motion study(set the “standard” for job)

Standardisation

Piece Rate System: (pay according to individual value tobusiness)

Functional foremanship



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The basic assumption of scientific management is that workersare primarily motivated by money and that they work only formore money.

Ignores human factors - Considers them as machines. Ignoreshuman requirements, want and aspirations

They also assume that productivity is the best measure of howwell a firm is performing.

In particular, Taylor‘s insistence on close supervision flies inthe face of all contemporary organizational research

demonstrating close supervision is counterproductive. Taylor viewed management processes from the bottom up .

Additionally, the piece rate system all too often is eitherinapplicable in today‘s computerized assembly lines.

Dissatisfaction - Comparing performance with others.

Criticism



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Henri Fayol’s Principles of Management

1. Division of Labor: allows for job specialization.

2. Authority and Responsibility: both formal and informal

authority result from special expertise.

3. Unity of Command: workers have only one boss.

4. Unity of direction. Organizational activities must have one

central authority and one plan of action. .

5. Centralization: degree to which authority rests at the top of the

organization.6. Unity of Direction: single plan of action to guide the

organization.

7. Equity - The provision of justice and the fair and impartial



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8. Order: place workers where most useful and have career

opportunities.

9. Initiative: encourage employees to act on their own.

10. Discipline: workers need to obey

11. Remuneration of Personnel: pay what is fair.

12. Stability of Tenure of Personnel: Long-term employment

is important

13. Subordination of Individual Interest to the

Common Interest: interest of organization priority

14. Esprit de corps: In union there is a strength or team

spirit, Have enthusiasm

B i T l F l



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Basis Taylor Fayol

Humanaspect

Taylor disregards human elements andthere is more stress on improving men,materials and methods

Fayol pays due regards on human element. E.g.Principle of initiative, Espirit De‘ Corps and Equityrecognizes a need for human relations

Status Father of scientific management Father of management principles

Efficiency &

administration

Stressed on efficiency Stressed on general administration

Approach

It has micro-approach because it isrestricted to factory only

It has macro-approach and discuses general principof management, which are applicable in every fieldmanagement.

Scopeofprinciples

These principles are restricted toproduction activities

These are applicable in all kinds of organizationregarding their management affairs

Achievement

Scientific management Administrative management



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Criticism

•Fayol‘s functional approach to management which aimed at improvingthe managerial activities.

• Administrative theory focuses on the total organization and attempts to

develop principles that will direct managers to more efficient activities.

•The problem with Fayol's principles of management is knowing when to

apply them and how to adapt them to new situations



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Max Weber, “theory of bureaucracy,” thought an organization

should be based on 5 principles:

Formal authority of managers Formal authority comes fromone’s organizational position

Jobs based on qualifications Positions should be held based onmerit, not social standing or personal contacts.

Authority and responsibility clearly defined

Hierarchical positions Authority in a bureaucracy is hierarchical

power.

operating procedures, and norms = control via “rational”

power.

Modern ideas based on Weber: TQM, process specialization,

Bureaucratic Administration



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Neo Classical Approaches

Developed because (a) scientific mangemnt concerned with

the efficience and productivity (b)fayols functional approaches

to managemnt which aimed at improving the mangerial

activities(c) classical theory ignored employee motivation andbehaviour.

Two branches:

Human Relations Approach

Behavioral Sciences Approach

H R l ti A h



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Human Relations Approaches

Elton Mayo - “Human Relations”

approach (to 1950’s). Mayo’s views

lead to the construction of manageras a leader.

Focus on the social environment of a job

Managers must know why subordinates behave as they doManagement should recognize employees’ need for recognition and social

acceptance

Management should look on work group as a positive force

Managers should be trained in human relations skills as well as in technicalskills

Style of supervision is an important factor in increasing workers' jobsatisfaction.

B h i l A h



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Behavioural ApproachThe behavioralapproach was concerned with the social and psychological

aspects of human behaviour in organisation . Behavioural school has

contributed to the study of management through its focus on personality,

attitudes, values, motivation, group behavior, leadership, communication,

and conflict, among other issues

mportant elements of the Behavioural Approach

Individual behaviour is closely linked with the behaviour of the group t which he

belong

Informal leadership, rather than formal authority of foremen and supervision , ismore important foe setting and enforcing group of performance.

By nature most people enjoy work, and are motivated by self control and self

development



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Behavioral SciencesApproach — Pros & Cons

Contributions

Contribute to people —

managing aspect of

management Use of teams

Focus on training &

development

Use of reward & incentive

systems

Limitations

Doesn‘t always help

managers in problem

situations Difficulty in translating

technical findings into

useful tools and policies

Variety of viewpoints

complicates the problem



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The two major organizational theorists

in the human relations movement are

– Abraham H. Maslow (1908-1970)

– Douglas McGregor (1906-1964)



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Maslow‘s hierarchy of needs

• Self-actualization – advancement, challenges,opportunities to use skills

• Esteem – job title, compliments

• Belongingness – compatible work groups,friends, parties

• Safety and security – salary increases, pension

plan, medical plans, insurance• Physiological – salary, office, co. cafeteria



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There are two ways of perceiving people at work:

Theory Y:

Work is as natural as play or rest- not disliked..

Workers will exercise self-direction and

self-control

Meeting goals is satisfying and motivating. .

Workers seek responsibility. ...

Workers will be creative and are willing to do more.

Theory X:

The average human inherently dislikes to work

So, people must be coerced, controlled, directed.

Workers prefer this – but want security.

The average worker is only partially utilized.

McGregor: Theory X, Theory Y



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Modern Approaches to management

Quantitative Approach

Operational Approach

Decision Theory Approach

Systems Approach

Contingency Approach



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odern Approaches to management

THE QUANTITATIVE APPROACH

The quantitative school focuses on improving decision

making via the application of quantitative techniques.

Its roots can be traced back to scientific management.

use of mathematic models, linear programming,

simulation systems and chaos theory to solve

management problems.



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Operations management School —techniques used to

analyze all aspects of the production system. This school

focuses on the operation and control of the production process

that transforms resources into finished goods and services. It

has its roots in scientific management but became an

identifiable area of management study after World War II. It

uses many of the tools of management science

Major areas of study within operations management include

capacity planning, facilities location, facilities layout, materials

requirement planning, scheduling, purchasing and inventory

control, quality control, computer integrated manufacturing,

just-in-time inventory systems, and flexible manufacturing

systems.



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Systems Approach



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Systems Approach

·Organization is a social system, a system of culturalrelationships.

·Relationships exist among the external as well as internal

environment of the organization.

·Cooperation among group members is necessary for the

achievement of organization objectives.

For effective management, efforts should be made for

establishing harmony between goals of the organization and

the various groups therein



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Systems Approach

Views an organization as interrelated parts with a

unified purpose: surviving and ideally thriving in

its environment

Management should focus on efficiency andeffectiveness in each part of the organization

Elements of an organization are interconnected

Organization is linked to its environment Open Systems vs. Closed Systems

DECISION THEORY APPROACH



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DECISION THEORY APPROACH

Contributors

– Simon, Cyert, Forrester, etc.

•Manager – Decision maker

•Organisation– Decision making unit.

•Features:-

Management is decision making.

Members of Organisation -decision and problem solver.

Decision making -control point in management

Increasing efficiency -the quality of decision

MIS, process & techniques of decision making are the subject matter of study.



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· It demonstrates how managers can discharge their functions

effectively and for this approach it provides various tools. Decision

theorists have grappled with decisions pertaining to diagnosis and

the resulting prescriptions for improving communication,

incentives, reactions of the individuals to group and analysis of

human values write stated objectives.

Limitations

· This approach does not take the total view of management.

Decision making is vital in every school of management. This vital

aspect cannot be denied but management is more than mere

Contingency Approach



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Contingency Approach The contingency school originated in the 1960s.

There is no “one best way.”

Organizing (and other) decisions that match the demands of theenvironment provide adaptation.

Appropriateness of a management technique depends on situation.

If -Then approach.

It h i th t th i b t t d th t it d d



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It emphasizes that there is no one best way to manage and that it depends on

various situational factors, such as the external environment, technology,

organizational characteristics, characteristics of the manager, and

characteristics of the subordinates.

This theory compels us to be aware of the complexity in every situation and forces

us to take an active and dynamic role in determining what best would work in each

case. Like a system theory it does not only examines the relationships between

subsystems of a specific organisation in a given environment, but also offers

solutions to particular organisational problems.

Contingency theorists often implicitly or explicitly criticize the classical

school for its emphasis on the universality of management principles;

however, most classical writers recognized the need to consider aspects of

the situation when applying management principles.



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Recent Developments in management

•Total Quality Management

•McKinsey 7S framework

T l li



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Total quality management is a management system for a

customer focused organization that involves all employee in continual

improvement of all aspects of the organization.TQM concepts is an

integrative system that use strategy, data, and effective communication to

integrate the quality principles into the culture and activities of the

organization



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M Ki 7S f k



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McKinsey 7S framework

McKinsey 7S framework developed in the early 1980s by Tom Peters

and Robert Waterman, two consultants working at the McKinsey &Company consulting firm, the basic premise of the model is that there are

seven internal aspects of an organization that need to be aligned if it is to

be successful

The 7S model can be used in a wide variety of situations where

an alignment perspective is useful, for example to help you:

•Improve the performance of a company.

•Examine the likely effects of future changes within a company.

•Align departments and processes during a merger or

acquisition.

•Determine how best to implement a proposed strategy.

The Se en Elements



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The Seven Elements The McKinsey 7S model involves seven interdependent factorswhich are categorized as either "hard" or "soft" elements:

HardElements

SoftElements

StrategyStructureSystems

SharedValues

Skills

Style

Staff



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Criticism:-The competitive environment is often moving so fast that the

stability assumptions built into McKinsey's approach aredysfunctional, and that organizations need more speed, agility andcapacity for coping with uncertainty to prosper

Conclusion



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Conclusion

In conclusion it has to be restated that management is the

process of designing and maintaining an environment for the

purpose of efficiently accomplishing selected aims. However, the

managerial skills required vary with organizational levels. The

goal of all managers is to create a surplus and to be productive

by achieving a favorable output-input ration within a specific time

period with due consideration for quality. Productivity implies

effectiveness (achieving of objectives) and efficiency (using the

least amount of resources). There are many theories about

management, and each contributes something to our knowledge

of what managers do. Each approach or theory has its own

characteristics and advantages as well as limitations. The

operational, or management process, approach draws on each

―school‖ and systematically integrates them . A manager who

makes serious attempts to translate theory into reality is bound toincrease roductivit more than a mana er who chooses to use



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Thank You

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