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 thinking

begins 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 Japanese

management approach.Todays 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 profit

sharing. These pre-classicists paved the way for

the theoretical framework of the classical school of management.

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Management Thought Has Been Grouped Into Four Approaches

Early classical Approaches

Scientific management School Administrative School Bureaucratic Administration
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Neo Classical App

Human Relations Approaches

Modern App
Quantitative theory Decision theory System Approach Contingency approach

Post Modern Approaches

TQM

Behavioural School

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

Taylors four principles of scientific management:

Work methods should be based on

scientific observation not rules of thumb. Scientifically select, train, and develop each worker Cooperate with workers to ensure that scientifically developed methods are being followed. Managers analyze and plan work; workers actually perform the tasks. 5/1/2012

Important Contributions
Time study (Observe & Analyze ) Motion study(set the standard for job) Standardisation Piece Rate System: (pay according to individual value to business) Functional foremanship

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Criticism

The basic assumption of scientific management is that workers are primarily motivated by money and that they work only for more money. Ignores human factors - Considers them as machines. Ignores human requirements, want and aspirations They also assume that productivity is the best measure of how well a firm is performing. In particular, Taylors insistence on close supervision flies in the 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 either inapplicable in todays computerized assembly lines. Dissatisfaction - Comparing performance with others.
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Henri Fayols 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 9 5/1/2012

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 5/1/2012 10 spirit, Have enthusiasm

Basis

Taylor

Fayol

Human aspect

Taylor disregards human elements and there 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 Equity recognizes a need for human relations

Status

Father of scientific management

Father of management principles

Efficien cy & admini stration Approa ch

Stressed on efficiency

Stressed on general administration

It has micro-approach because it is restricted to factory only

It has macro-approach and discuses general princip of management, which are applicable in every field o management. These are applicable in all kinds of organization regarding their management affairs

Scope of principl es

These principles are restricted to production activities

Achiev Scientific management ement 5/1/2012

Administrative management 11

Criticism
Fayols functional approach to management which aimed at improving the 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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Bureaucratic Administration
Max

Weber, theory of bureaucracy, thought an organization should be based on 5 principles: authority of managers Formal authority comes from ones organizational position
Formal

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

and responsibility clearly defined positions Authority in a bureaucracy is hierarchical

Hierarchical

power.

operating procedures, and norms = control via rational

13 based on Weber: TQM, process specialization,

power.
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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 and
behaviour.

Two branches:
Human

Relations Approach Sciences Approach

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Behavioral

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Human Relations Approaches Elton Mayo - Human Relations approach (to 1950s). Mayos views lead to the construction of manager as a leader.
Focus

on the social environment of a job

Managers must know why subordinates behave as they do

Management

should recognize employees need for recognition and social should look on work group as a positive force

acceptance
Management Managers

should be trained in human relations skills as well as in technical

skills
Style

of supervision is an important factor in increasing workers' job satisfaction.

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Behavioural Approach
The 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

Important 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 , is more 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 Sciences ApproachPros & Cons

Contributions

Limitations

Contribute to people managing aspect of management Use of teams

Focus on training & development Use of reward & incentive systems

Doesnt 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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Maslows 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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McGregor: Theory X, Theory Y

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.
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Modern Approaches to management

Quantitative Approach Operational Approach Decision Theory Approach Systems Approach Contingency Approach
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Modern 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 cultural
relationships.

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 5/1/2012
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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 and effectiveness in each part of the organization Elements of an organization are interconnected Organization is linked to its environment Open Systems vs. Closed Systems

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DECISION THEORY APPROACH

Contributors
Simon, Cyert, Forrester, etc.
Manager Decision maker

OrganisationDecision 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
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Contingency Approach
There is no one best way.

The contingency school originated in the 1960s.

Organizing (and other) decisions that match the demands of the

environment provide adaptation. Appropriateness of a management technique depends on situation. If -Then approach.

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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

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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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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.
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The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements: Hard Elements Soft Elements

Strategy Structure Systems

Shared Values 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 are dysfunctional, and that organizations need more speed, agility and capacity for coping with uncertainty to prosper

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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 to 5/1/2012 37 increase productivity more than a manager who chooses to use

Thank You

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