EVOLUTION OF MANAGEMENT CLASSICAL THEORY (TRADITIONAL)

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1 EVOLUTION OF MANAGEMENT Management thinking in the current economic situation (1970 onwards) can best be understood in the light of its historical development. Similarly, the future of management thought can best be anticipated by past as well as present knowledge. We deal with the evolution of management thought and concepts in brief and have look at the current status, viz, system approach to business organization and management Evolution of management thought may be divided in to three stages : 1. Scientific management and administrative management (1930 to 1930). It is also called classical period. 2. Human relationships in organization ( ). It is also called neoclassical period. 3. Refinement, extension and synthesis (1960 to present). It is called modern period-systems approach. Classical period ( ): CLASSICAL THEORY (TRADITIONAL) F.W Taylor and Henry Fayol are generally regarded as the founders of scientific management and administrative management and both provided the basis for science and art of management. In a sense, they are the founders of Morden management theory and practice. Feature of management in the classical period: 1. It was closely associated with the industrial revolution and the rise of large-scale enterprise which demanded the development of new forms of organization and management practices. 2. Traditional or classical organization and management theory is based on contributions from a number of source, including scientific management, administrative management theory, bureaucratic model, microeconomic and public administration. 3. Management thought focussed on: a. Job content b. Structure

2 c. Division of labour d. Task of management e. Standardisation, simplification and specialisation f. Scientific approach towards organization and management g. Primary incentives based on the physiological needs of the workers. Traditional theory was based on three pillars: 1. Scientific management, 2. The bureaucratic model and 3. Administrative management theory. We will describe, in brief, these three pillars. A. Scientific management Scientific management is also called Taylorism. It emphasized detailed precise planning of work to achieve efficiency, standardisation, specialisation, and simplification. It relied on formal top-down budgeting which led to a centralised control system. Scientific technology of management were employed for the management of physical resources rather than for human resources. Primary emphasis was on the planning and control functions related to performance of basic tasks. It was assumed that economic incentives were enough for implementation of plans and policies. It aimed at improving the efficiency of human work but it considered human being as a rational economic man who can act just machine. Great advance in managerial practice were made to determine faster and better methods of production and more efficient forms of organisation and management. But workers were assumed as standardised unit of production interchangeable in organisation slots-cogs in the organisation machine. No advance were made in human areas. Scientific management assumed that industrial efficiency can be improved through the application of the method of science and the payment of high wages for higher productivity. It advocated that standardisation of working conditions, work method, time study, motion study, standardisation of work, planning of daily tasks, etc. Can pro mote industrial efficiency. Taylor emphasised five concepts on which management theory and practice could be based: 1. Research 2. Standards 3. Planning 4. Control and 5. Co-operation.

3 F.B. and Lillian m. Gilbreth made pioneering efforts in the field of motion study and they laid the entire foundation of our modern applications of job simplification, meaningful work standards, and incentive wage plans. Mrs Gilbert had a unique background in psychology and management and couple could embark on a quest for better work methods. F. Gilbreth id regarded as the father of motion study. Taylor (a stop-watch man) and Gilbert (a motion-study man) both are responsible for inculcating in the minds of managers the questioning frame of mind and the search for a better way of doing things. B. Bureaucratic Model The second pillar or thread in the classical organisation and management theory was provided by max Weber, a German sociologist, and his bureaucratic model. He viewed bureaucracy as the most efficient from for complex organisation. His model of bureaucracy included 1. Hierarchy of authority 2. Division of labour based upon functional specialisation 3. A system of rules 4. Impersonality of interpersonal relation ships 5. A system of work procedure 6. Placement of employees based upon technical competence, and 7. Legal authority and power. Bureaucratic is preferred where change is not anticipated or where of change can be predicted. It is usual in government departments and in many large business. Bureaucracy provided a rigid machine model of an organization. It could not account for important human elements.rigidity, impersonality, higher cost of controls, anxiety due to pressure of conformity to rules and procedures, tendency to forget ultimate goals of the organization. Above all bureaucracy cannot offer satisfaction of higher level wants of employees and to the extent there is limited scope for management development. C. ADMINISTRATIVE MANAGEMENT THEORY HENRY FAYOL ( ) Henry Fayol, a French industrialist and mining engineer by profession, developed the theory of administrative management. He was the contemporary of Taylor. He tried to develop a comprehensive conceptual framework and general organization and management that are applicable to all organisations. Scientific management concentrates only on shop floor level like job design and payment of workers whereas administrative theory is concerned with the entire range of managerial performance. According

4 to Fayol management is a distinct field of study involving many managerial functions like forecasting, planning, organizing, commanding, coordinating and controlling. In 1916, he published his book administration industrially etc. general. Later on, this book was translated into English as General and industrial management. He divided all industrial activates into six groups, namely; 1. Technical activities (production manufacturing) 2. Commercial activities (buying, selling and exchange) 3. Financial activities (search for and optimum use of funds) 4. Security activities ( protection of property and people) 5. Accounting activity (stock taking, cost statistics and balance sheet ) 6. Managerial activity (planning organising, commanding, co-coordination and controlling ) Based on his experience he developed the fourteen principles of management, which are universally applicable in all types organisations. Brief descriptions of principle of management propounded by Henry Fayol are as follows: 1. Division of work: The principle is similar to Adam smith s division of labour. This implies that every employee should be assigned only one type of work. Specialisation increases output by making employees more efficient. 2. Authority and responsibility: Authority and responsibility are co-existent and they must go hand in hand. Authority is the right to give orders and command and responsibility is the obligation to accomplish the expected result. Authority without responsible behaviour while responsibility without authority will make a person ineffective. 3. Discipline: Employee must obey and respect the rules that govern the organisation. Discipline requires clear and fair agreements, good supervision and judicious application of penalties. 4. Unity of command: An employee should receive orders and instructions from only one superior at a time. If subordinate has more than one superior, it well undermine authority, weaken discipline, divide loyalty, and lead to confusion and result in delay in performance. 5. Unity of direction: there should be one head and one plan for a group of activities having the same objective. The related activities should be put under one group, there should be one plan of action and they should be under the control of one particular manager.

5 Contribution of administrative theory 1. Administrative management laid heavy emphasis on universal principles of management. 2. This theory laid the foundation for study of management function of planning, organising, staffing, directing and controlling. 3. This theory has provided the conceptual framework for analysing the management process. 4. This theory has isolated and analysed management as a separate discipline. The situational factors. 5. It is vague. There is no clear distinction between structure and process of organisation. 6. It does not provide guidance as to when the principle must be applied, which principle should take precedence over the other while they are being applied. Limitation of administrative theory 1. This theory has not paid proper attention to the human behaviour aspects in an organisation. 2. This theory is inconsistent. It has not considered 3. This principle is based on personal experience and little observation. In spite of the above criticism, the administrative theory remains important because it is still in practice. The administrative theory lays more emphasis on the power and authority structure of an organisation. The element and principles of management provide valuable guidance in management practice. Human Relation Approach The term human relations is generally used to describe the ways in which managers interact with their subordinates. Earlier, human being were not considered as an importance factor for organisations. During the great depression in the 1920 s, and 1930 s, the importance of people in organisation was realized. The human relation movement was a concentrated effort of theorists and practitioners to make managers more sensitive to employee needs and attitudes. Workers should not be treated as mere factors of production but should be considered as human being.

6 Workers attitudes, feeling and need are extremely important on the job. The famous Hawthorne studies undertaken by Elton mayo and his colleagues laid the foundation for human dimension in organisations. Mayo was professor at the foundation for human dimension in organisations. Mayo was a professor at the Harvard Business School. He conducted a series of experiments in 1924 to 1932 at the at the Hawthorne plant of western Electric company in Chicago. The study was conducted in four phases, which can be summarized as follows. 1. Illumination experiment: This experiment was started in 1924 in the Hawthorne plant and continued for three years. This study was primarily conducted to measure the effects of lighting on the productivity of the workers in different departments of the organization. Illumination was manipulated for one group of workers and held constant for another group but in both the conditions productivity increased. 2. Relay assembly test room experiment: In this experiment tow group of six female telephone relay assemblers were put in separate rooms. Frequent change were made in their working conditions such as hours of work,hot lunches, rest periods,wages incentives, etc. in one room and no change was made in the other room. In spite of the frequent changes being made in working conditions over a period of several years, productivity tended increase, even it feels irrationally. 3. Mass interviewing program: Under this phase a group of workers were interviewed to elicit information on their perceptions on the working life. The focus of this interviewing program was on human relation rather than on physical working conditions. After completing interviews, it was confirmed that the importance of informal relations, social and psychological needs influence the workers behaviours and their productivity. 4.Bank wiring observation room experiment: Under this experiment, 14 male workers were formed into small work group and intensively observed for seven months in the bank wiring room. The men were engaged in the assembly of terminal banks for the use of telephone exchange. The purpose of the research was to make a more detailed analysis of the social relationship in a work group.from the experiment, the researchers concluded that employees would labour hard if they believe that the management was concerned about their welfare and supervisors paid special attention and care to them.