Classical & Neo Classical Theories Submitted To Mr Udit Pandey Submitted By Abhay Kpkoti
Two Schools Of Thought 1. Classical Management (1800-1930) Administrative Theory (Henry Fayol) Scientific Management (Federick Taylor, Frank and Lillian Gilbreth, Henry Gantt- Gantt Chart ) Structuralism School (Max Weber- bureaucracy ) 2. Neoclassical Management and Organization Theory (1930-1960s) Human Relations School (Human Relations/Hawthorne Experiments) Behavioral School (Abraham Maslow, Douglas McGregor, Rensis Likert, Chris Argyris, Frederick Herzberg, David McClelland)
Historical Scenario Machines Productivity Consumer Cost Demand Factories/ Workers Best Possible Methord?
Issues related to Workers Coloration between Humans & Machines Lack of training Large number of people working together Authority Structures required. Standard Operating Procedures BIGGER BUSINESS WERE FACING BIGGER PROBLEMS Best Possible Method?
Henry Fayol To manage is to forecast and plan, to organize, co-ordinate and to control
Henry Fayol s Administrative Theory Father of Modern Management. French CEO, Kamobol. The success of an enterprise depends upon on the admistrative ability of the its leaders to manage people instead of its technical ability. Many of these Principles have become common knowledge today, but then they were insights. Book written Management theory and practice
Frederick Taylor In the past the man has been first; in the future the system must be first
Taylor s Scientific Management On June 23, 1903 Fredric Taylor spoke to a room full of engineers on the topic ONE OF THE BIGGEST THREAT TO AMERICAN SOCIETY National Efficiency: far more significant than any other problem faced then-optimum level Book Principles of Scientific Management One Word- Efficiency Every Act could be reduced to a science. Significance of human effort- Social Incentive - Soldering Economic Incentive- Fair day s Work
Primary Objective of Management Maximum Prosperity Mutually Benefit Relationship The Management should assume more responsibility. One perfect method was required instead of many
Principle of Scientific Management Established clear rules on how the work is to be performed Select, train & develop workers Cooperate with workers & ensure that work was being performed at previous conditions. Equal distribution of the work & responsibility between worker & administration Eg- Fast Food Establishments
Henry Ford Earlier- Vulcan Motor Company- 2months for one car Later- 1908- Ford set out to make new market, the work is done. Influenced by Fayol & Taylor Eg- Wheel Making was broken down to 100 steps Still 200 cars a day.
Assembly Line In the first assembly line of the world, the car was dragged through a rope by a few men, as the other workers worked on it In an assembly line, there could be no soldering. The pace of the plant was decided by the administration This led to high labour dissatisfaction, & high turnover ration only after a month of its installment Since Henry ford now was making enough money, he rose the pay for wokers,5$ a day, which was quite a lot in that time. New workers joined in.
Max Weber
Weber s Bureaucracy Exercise of control on the basis of knowledge Administrative models Monarchy German Sociologist Ideal System Management based on the basis of rational legal authority was more efficient than one based on favoritism, Nepotism. Against subjective nature of Monarchy Loyal towards Supervisor & not towards Organisation
Characteristics of Bureaucracy A well defined hierarchy of command. Management by rules & regulation Division of labor & work specialization Managers should maintain interpersonal relationship with employees Competence, & not personality is the basis of job appointment Formal written records
Examples Of Bureaucratic Organizations Department of Motor Vehicles Prisons Police departments Colleges and universities
Neoclassical Management and Organization Theory Human Relation Management Hawthorne Studies Maslow Need Hierarchy Herzberg two factor theory
Human Relation Management Huge shift from classical theories Not only about Equipment, technology or efficiency. Employees Social, Personnel, Initiative Motivational Situation can be optimized. Want to Succeed attitude -The workers will then find a way Psychological Relationships in the work force.
Principles of Human Relations Approach Need recognition and appreciation in workers Workers are human beings & not machines An organisation works not only through formal relations, but also through informal relations Workers need a high degree of job security and job satisfaction. Workers want good communication from the managers. Members do not like conflicts and misunderstandings. Workers want freedom Employees would like to participate in decision making,
Hawthorne Background 40,000 workers. Working condition = Difficult No benefits Pension Plan in 1906 Vacations one week after five years Progressive Place to work Good Wages
Objective To check the impact of illumination of Worker s Productivity. Conducted by Elton Mayo Result- Output went up among the experiment class & continued to go up even when no lights. Called of by National Assembly, Mayo Pesisted. First Study on attitudes of the workers. Mayo conducted other experiment related to worker s participation, initiative & motivation. Productivity went up by 30% Industrial History of working. First Interviewing features Industry have never got the people s natural worth
Maslow Researcher Basic levels satisfied first to get to the higher needs. People are of which need hierarchy.
Maslow s Hierarchy of Needs
Two Factor theory Developed by Frederick Herzberg. 500 Accountants. Extreme Dissatisfaction (Hygiene)- Benefits, Pay, Job Security in workplace Extreme Satisfaction(Motivational)- Recognition, Achievements, advancements, challenging work, fulfilling
Two factor Theory
Theory X & Theory Y Given by McGregor In 1960 Human Side Enterprise Your management style is strongly influenced by your beliefs and assumptions about what motivates members of your team Understanding your assumptions about employees motivation can help you learn to manage more effectively.
Theory X Theory X assumes that employees are naturally unmotivated and dislike working, and this encourages an authoritarian style of management. According to this view, management must actively intervene to get things done. This style of management assumes that workers: Dislike working. Avoid responsibility and need to be directed. Have to be controlled, forced, and threatened to deliver what's needed. Need to be supervised at every step, with controls put in place. Need to be enticed to produce results; otherwise they have no ambition or motivation to work.
Theory Y Theory Y shows a participation style of management that is de-centralized. It assumes that employees are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It assumes that workers: Take responsibility and are motivated to fulfill the goals they are given. Seek and accept responsibility and do not need much direction. Consider work as a natural part of life and solve work problems imaginatively.