MANAGEMENT THEORY

&
PRACTICES

Chapter – 2
Development of Management Thought
 Chapter – 2
Development of Management Thought

Content:
2.1 Evolution of Management Thought
2.1.1 The Scientific Management School: F.W.Tylor
Contributions of Scientific Management
2.1.2 Theory-Classical Organization Theory School-
Fayol’s Administrative Management
2.1.3 Bureaucratic Management-the Behavioral School-
Human Relations to the behavioral approach-the
quantitative school-attempts to integrate the schools-the
systems approach, the contingency approach.
2.1 Evolution of Management Thought:
I. Classical or Traditional Management Approach:
1. Scientific Management - F.W. Taylor
2. Administrative Theory of Management - Henri Fayol
3, Bureaucratic Organization - Max Weber
II. Behavioral or Neo-Classical Approach:
1. Human Relation Movement
2. Behavioral Science Approach
III. Modern Approach to Management:
1. Quantitative Approach
2. System Approach
3. Contingency Approach
I. Classical or Traditional Management Approach:
It has its roots in the basic concept of division of
labor and specialization and consists mainly of
scientific management developed by F.W. Taylor,
administrative theory of management by Henry Fayol
and bureaucratic organization by Max Weber.
12.1.1 The Scientific Management School: F.W.Tylor
Contributions of Scientific Management:
Taylor’s approach aims at increasing the operational
efficiency of workers by solving their work related
problems, reducing in-efficiency and wastage,
improving their relation with management, and
developing a best way of doing things. Taylor
expressed the basic philosophy of scientific
management in the following terms:
i. Scientific Approach: For solving problems
and making decisions, the manager should
adopt scientific attitude and use scientific
thinking and methods. The ‘rule of thumb’ or
‘hit or miss’ approach should be replaced and
problems studied in all respects; required
data should be collected and analyzed for
finding a solution. Intuitive decisions should
be substituted by decisions based on facts.
ii. Harmony not discord: All the departments
and workers area a part of an organization.
There should be complete harmony or
coordination in their functioning and any kind
of disagreement, clash or conflict should not
be allowed to crop in and, if it arises, should
iii.Cooperation, not individualism: Instead of
fostering individualism, importance of
cooperative group efforts should be recognized
because if the objectives of the organization are
to be accomplished, it would be possible not
only on account of dynamic and effective
leadership of the individual manager but the
whole-hearted cooperation and commitment of
all employees. Credit should be given to all
employees.
iv.Maximum, not restricted output: Production
should be carried out up to the maximum
capacity available in a unit. As production
increases, economies of scale set in and the cost
per unit of output will decrease. The policy of
v. Employee Development: For the prosperity of
individual workers as well as the organization,
the efficiency level of workers should be
increased by providing scientific training and
developing their potential abilities to the
maximum.
2.1.2 Guide lines to the practice of management:
Taylor, based on his experience at the shop floor,
developed guide lines to the practice of
management which are as under:
i. Scientific study and planning of work: Taylor has
suggested that the work to be assigned to and
performed by workers should be studied,
analyzed and planned as to determine the day’s
fair work (standard of work) for each worker. In
relation to work, various studies on its distinct aspects
ii. Scientific selection, placement and training: To
build up a team of efficient workers, Taylor realized
that selection should be made by using scientific
methods. It implies selection of workers for the job
by tallying job requirements with abilities and
skills. Workers should be given placement on the
basis of capability and aptitude. And, for
developing the existing level of knowledge and
potential scientific training should be imparted to
workers on a regular basis.
iii. Standardization: Taylor suggested that the
scheme of standardization should be adopted in
respect of trade tools and equipments, raw material
used by workers and physical working conditions
provided to them. Any difference in the quality of
iv. Division of responsibility between management
and workers:
Planning of work should be the responsibility of
managers. They should design work standards by
coordinating various studies, devise incentive
scheme for workers, disciplined them and assign
work to them. Whereas role of workers should be
confined to implementation of these plans. In this
way benefits of division of labor and specialization
may be secured.
v. Mental revolution: In order to get desired results
of scientific management there should be complete
mental revolution on the part of workers as well as
Mental revolution is a process of bringing drastic
changes in their attitude, outlook and behavioral
pattern in respect of their duties towards their
fellow workers and employers.
Similar kind of changes in outlook should also take
place among managers towards workers and their
problems. To bring the change in the mental
attitude of both sides Taylor, suggested scheme of
workers participation in management and sharing
surplus as bonus.
vi. Wage incentives: Taylor suggested that incentive
should be directly linked with productivity. The
worker producing more should be given higher
wages. For this purpose he devised ‘differential
piece rate plan’ which implies different rates of
2.1.2 Theory-Classical Organization Theory
School-Fayol’s Administrative Management:
Fayol believed that manager’s job could be divided into
five functions namely planning, organizing, command, co-
ordination and control and these functions are got to be
performed by every manager.
Fayol claimed that planning, organizing, command,
coordination and control were basic and common
denominators for all managers in the process of
management.
Fayol’s Principles of Management:
• Division of work: To divide work among various
departments and employees according to required abilities
and skills as to get benefit of specialization.
• Authority and responsibility: Authority should
commensurate with responsibility. More authority may
result in mis-utilization or under-utilization of it.
• Discipline: It implies compliance with organizational
directives and rules, orders and instructions of superior and
to co-operation with fellow workers.
• Unity of Command: According to this principle, one
subordinate should get orders and instructions regarding his
work only from one superior.
•Unity of direction: All activities related towards common
goals should be included in single plan to be implemented by
particular manager.
•Subordination of individual’s interest to interest of
organization: In every work setting each employee should
sacrifice and subordinate his personal interest and goal for
accomplishing common goals of organization.
•Remuneration: Employees should be paid fairly and reasonably in
accordance with their contribution.
•Centralization: The relationship between centralization and
decentralization of authority is a matter of proportion and optimum
balance, which should be maintained according to needs of
organization.
•Scalar Chain: Line of authority from top to the lowest level
is established.
•Order: In order to facilitate smooth flow of work and
efficient use of resource material, machine tools, equipments
etc., as well as employees (human resource) should be in their
prescribed proper place and order.
•Equity: The principle of equity suggests that similar
treatment based on the principles of equity fairness and
impartiality should be assured to all employees working in
organization.
•Stability of tenure of personnel: Since, people need time to
learn their jobs, therefore they should not be allowed to move
frequently from one position to another.
•Initiative: Employees should be provided opportunities as
to develop and use initiative for solving work-related
problems.
Due care should be taken specially for developing policies so
as to regulate decision making behavior of managers on the
one hand and on the other to provide them enough liberty for
using their personal skills and judgment.
•Esprit-de-crops: It implies to build team spirit among the
employees so that they work in harmonious manner with
proper mutual understanding as to make their respective
contribution for achieving goals.
•2.1.3 Bureaucratic Management-the Behavioral
School-Human Relations to the behavioral approach-
the quantitative school-attempts to integrate the
schools-the systems approach, the contingency
approach
According to Weber it is a more efficient form of organization
because it aims at high degree of precision, efficiency,
objectivity and rationality.
Prescribed procedure and set of rules strictly.
Characteristics of Bureaucratic Organization:
•Division of labour: To get benefits of specialization
principle of division of labor is followed in bureaucratic
organization. It implies to divide and assign activities to
various employee on the basis of their abilities, skills and
aptitude.
•Hierarchy of authority: All employees of bureaucratic
organizations are attached to each other in the relationship of
authority which lies on the position and which is rational and
legal in nature.
• Technical Competence: In this type of organization people
are hired and promoted on the basis of their technical
competence that is what they know about job. It is on the
basis of job requirements, they are selected and placed in
organization.
• Rigidity in compliance with procedures and framework
of rules: Prescribed procedure and set of rules strictly.
• Impersonality: No place of emotions, sentiments, and
personal attachment.
2.2 Behavioral or Neo-Classical Approach
• It is based on strong conviction that successful
management depends on manager’s ability to
understand work, as well as people with
different backgrounds, needs, values,
perceptions and personality. Thus in this
approach of management “human factor”
remains central focus and high pedestal in
organization.
1. Human Relation Movement
2. Behavioral Science Approach
1.Human Relation Movement
• Human relation movement was a remarkable
attempt on the part of management
practitioners for making managers more
sensitive to employee needs.
• Elton Mayo, Mary Parker, Follet, and Douglas
McGregor have been main contributors to this
movement.
Human Relation Factors
• Psycho-social system:
Psychologists - employee as an individual
Sociologists - employee’s interaction with others in a group
• Social man model:
‘economic man’ to ‘social man model’(recognition,
appreciation, self-respect, dignity, etc.).
• Optimistic outlook towards employees:
Provide opportunity, congenial interpersonal relationship,
sympathetic , friendly attitude, etc.
• Healthy organizational functioning:
No conflicts or clashes.
• Maximum contribution:
Interaction, fair and frank communication, etc.
• Motivation:
In terms of emotions beliefs, attitudes and habits.
• Sense of belongingness:
Employees importance, involvement in decision making
• Human relation approach:
High degree of satisfaction, motivation improved working condition,
style of supervision and sense of security.
The Hawthorne Studies
• These studies began in 1924 in Western Electric Plant in USA spread
over a period of eight years.
• A team of behavioral research scientists headed by Elton Mayo was
called upon from Harvard for making rigorous studies.
1.The Illumination Experiments
The following are the various experiences conducted.
1.The Illumination Experiments:

The experiments were taken place between 1924 to 1927; to

assess the effect of illumination on employee output. For
this purpose, the female workers were separated into two
rooms. “The experimental” or “Test room” where
changes were to be introduced and the “The control room”
which was similar to the other in all respects except that in
this room illumination was constant, the idea being to find
out whether any change in lightning would affect production
in the test room.
It was found that when lightning in the experimental room
improved production registered an increase. When the light
was progressively raised to 24, 26 and 70 foot candles,
production went up proportionately. After a while, however
for no apparent reason, output soared in the control room as
well when no change at all had been made.

It revealed that productivity cannot be raised only by

improving physical working conditions but philosophy of
human relation was needed to provide better treatment to them
to raise their output.
2.The Relay Cable Assembly Test Room
Experiments:
This Experiments was conducted by Eltan Mayo and others
between 1927 and 1932. The purpose of the experiment was to
determine more accurately the effects of physical
environmental factors on productivity and in particular effects
of pauses, length of working day and method of payment.
A small group of six girls was selected and placed in a room.
Ingenious arrangements were made to record the rates of
production of the workers and the variations of the test factors.
In addition a record was kept of daily events, including their
conversations and other forms of interaction.
The girls too were informed and consulted about the changes
that were introduced in the experimental.
Following were the changes and resultant outcomes:
i. Two five minute rests- one in morning session and the other in the
evening session-were introduced which were increased to ten minutes.
The productivity increased.
ii. The rest period was reduced to five minutes but frequency was
increased. The productivity decreased slightly and the girls complained
that frequent rest intervals affected the rhythm of the work.
iii. The number of rest was reduced to two of ten minutes each, but in the
morning coffee or soup was served along with sandwich and in the
evening, snack was provided. The productivity increased.
iv. Changes in working hours and workday were introduced, such as
cutting an hour off the end of the day and eliminating Saturday work.
The girls were allowed to leave at 4.30 p.m. instead of usual 5.00 p.m.
and later at 4.p.m. Productivity increased.
 The following are the reasons for the better
production, according to the women those
where interviewed.
1. Small group
2. Type of supervision
3. Earnings
4. Novelty of the situation
5. Interest in the experiment
It6. Attention
revealed received
that physical in the test
environment room
may or may not increase
productivity rather more important than these conditions are
attitude of management, morale of the employees and other
socio-psychological factors like importance, involvement,
informal relations, etc.
3. Bank Wiring Observation Room Experiment
This experiment was conducted with a view to obtaining
more exact information about the informal groups within a
company. This experiment was conducted between the
period of 1931 to 1932, at the Hawthorne plant.
For this experiment, a sample of 14 workingmen was
selected, which included 9 workmen, 3 soldier men and 2
inspectors. (These workers were observed and interviewed
over a period of six and half months). The selected
workmen were moved to a special test room. No special
privileges were given to them. Their working conditions
were normal.
They continued to be responsible to their regular
supervisors. In addition an observer was stationed in the
test room to take note of what was going on and to keep
records. One interviewer, on the other hand remained an
outsider. The interviewer’s major function was to obtain
information about the workers attitudes, thoughts and
feelings.
The researchers determined that the informal groups
restricted output rather than lack of ability to produce. The
following evidence supports this condition.
1.The observer noted that all the men stopped work before
quitting time.
2. Most of the men admitted to the interviewer they could
easily turn out more work.
3. Ridicule (made fun of some one) and name calling were
the major sanctions utilized by the group to enforce this
restriction.
4. Workers were convinced that once they reached the
standard rate of production; management would raise the rate
of production by thinking it must be too easy to attain.
•It revealed that the existed informal group norms regulated
and affected the behavior of the employees.
•Further it proved the importance of small informal social
groups like cliques in organization.
4. Massive interviewing program
•It revealed that informal relationship, social and
psychological needs and the attitude of employees have
definite influence on their working behavior.
2. Behavioral Science Approach
The term behavioral science approach may be defined as
systematic as well as scientific analysis of human behavior
with a view to determine causes of working behavior of an
individual
Assumptions of Behavioral Science Approach
•Socio-technical system:
Individuals and their interpersonal and social
relationship.
•Integration of goals:
Individual goals with organizational goals.
• Conflict:
Shaping of individuals’ and managers’ behaviors during
conflict resolution.
• Individual differences:
Motivation process in tune with individual differences.
• Behavioral approach: This approach in terms of
satisfaction, morale, motivation, sensitivity of manager to
employee needs, etc.
• Behavioral Scientists: Different approaches by behavioral
scientists like Douglas McGregor, Abraham Maslow,
Chester Barnard, Renis Likert and Herbert Simmon, etc.
S. No. Human Relation Movement Behavioral Science Approach
1. Human relation approach is solely Behavioral science approach aims at studying
confined to the concepts of and analyzing human behavior systematically.
humanization and socialization of This approach is broader and more inclusive in
organization by recognizing human side nature.
of it.
1. Advocates of human relation approach Behavioral approach assumes that organization
strongly believe that organization is is ‘socio-technical’ system stressing on both
‘socio-psychological’, system individual’s interpersonal and social relationship
emphasizing on social and psychological and technique, methods and procedures used
needs of individuals working in by them for performing assigned jobs.
organization.
1. Human relation approach in fact mainly Behavioral science approach recognizes
concerned with human aspect involved individual difference in terms of background,
in organization and considers all personality, values, goals and aspirations paving
individuals as a human being. way for devising different motivational process
for them.
1. Human relationists advocate that Behavioral scientists reject this assumption and
satisfaction provided to employees by believe that there are wide ranging variables
giving economic incentive, improving which affect working behavior of employees.
their working conditions will lead to
higher productivity
1. Human relation approach is based on Behavioral science approach realizes that
the assumption that conflicts and conflicts are bound to crop in and to some
clashes should be totally removed as extent they produce constructive effect,
they appear. especially on managers.
1. Human relation approach seems to be Behavioral scientists were more concerned
The quantitative school-attempts to integrate the schools-
the systems approach, the contingency approach:
Modern Approach to Management
1. Quantitative Approach
2. System Approach
3. Contingency Approach

1. Quantitative Approach:
• The quantitative approach aims at achieving high
degree of precision, perfection and objectivity by
encouraging the use of mathematical and
statistical tools for solving complex problems.
• Dividing problem into small simple components
• Gathering required information on each
component
• Analysis of data so collected
2. System Approach:
•The term system may be defined as a set of interrelated and
interacting components assembled in a particular sequence as
to produce some results. These components may also be
viewed as sub-systems of larger system.
•For instance individual firm is a sub-system of industry
which is sub-system of business, which is further sub-system
of larger economic system and which is again a part of broader
socio-economic system of the country which falls within
international system.
3. Contingency Approach
•This principles is subject to appropriateness of the situation.
•This approach makes it quite clear that instead of relying too
much on preconceived and prejudged assumptions, differences
in the situations should be taken into account and accordingly
management package should be designed and implemented.
 …learning never ends
the journey of excellence
continues…

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