Management Department

Master of Business
Administration Evolution of
MBA-I Semester management thought
and Management
thinkers: Classical
Foundation of Approach
Management

Mr. Anchit Jhamb

[email protected]

CAMPUS: JHANJERI, MOHALI

 Course Outcomes
(COs)
S.NO DESCRIPTION

CO1 Illustrate the scope of modern management.

CO2 Explain different school of thoughts for good managerial

skills.
CO3 Make use of appropriate tools for effective business plan

CO4 Analyze the techniques of modern management.

CO5 Build the organization structure for good governance.

CO6 Apply different controlling approaches by management

techniques.
Previous Lecture…

Revision of Course Outcome 1

• Definition
• Nature and scope
• Management is Science as well as an Art
• Importance
• Functions of management
• Managerial roles and skills.
 Today’s Agenda….
Evolution of management thought and
Management thinkers:
• Classical Approach
• Neo Classical Approach
MANAGEMENT THOUGHTS
FRAMEWORK
 Introduction
• The origin of management can be traced back to the days when
man started living in groups.
• One can argue that management took the form of leadership
which was essential to coordinate the efforts of the group
members in order to arrange the necessities of life.
• History reveals that strong men organized the masses into groups
according to their intelligence, physical and mental capabilities.
 Classical Approach
• The classical theory signifies the beginning of the systematic study of
management organisation.
• It is often called the traditional theory. It can be traced historically to the 19th
century prototype industrial and military organisations.
• Several writers contributed to the classical thought in the early years of the
20th century. They include Taylor, Fayol, Weber, Luther Gulick, Urwick,
Mooney and Reiley and may others.
• The classical theory incorporates three viewpoints:
(1) Taylor’s Scientific Management
(2) Fayol’s Administrative Management; and
(3) Weber’s Ideal Bureaucracy (an organisation based on rules and regulations,
formal relations, specialization, etc.).
• All the three concentrated on the structure of organisation for greater
efficiency. Several other pioneers have also contributed to the classical theory.
 FEATURES OF CLASSICAL APPROACH
1. The classical theory laid emphasis on division of labour
and specialization, structure, scalar and functional
processes and span of control. Thus, they concentrated on the
anatomy of formal organisation.
2. The classical theorists emphasis organisation structure for
co-ordination of various activities. They ignored the role of
human element.
3. The classical theory ignored the impact of external
environment on the working of the organisation. Thus, it
treated organisations as closed systems.
 FEATURES OF CLASSICAL APPROACH
4. The efficiency of the organization can be increased by making
each individual efficient.
5. The integration of the organisation is achieved through the
authority and control of the central mechanism. Thus, it is based
on centralization of authority.
6. There is no conflict between the individuals and the organisation.
In case of any conflict, the interests of the organisation should
prevail.
7. The people at work could be motivated by the economic rewards
as they were supposed to be ‘rational economic persons’.
 Neo-classical Approach
Human Relations Approach
• The classical writers including Weber, Taylor and Fayol neglected
the human relations aspect.
• The neo-classicists focused on the human aspect of industry. They
modified the classical theory by emphasizing the fact that organisation
is a social system and the human factor is the most important
element within it.
• They conducted some experiments (known as Hawthorne Experiments)
and investigated informal groupings, informal relationships, patterns of
communication, patterns of informal leadership, etc.
• This led to the development of human relations approach. Elton Mayo
is generally recognized as the father of the Human Relations
School. Other prominent contributors to this schools include
Roethlisberger, Dickson, Dewey, Lewin, etc.
 Neo-classical Approach
• The human relations approach is concerned with recognition of the
importance of human element in organisations.
• It revealed the importance of social and psychological factors in
determining workers’ productivity and satisfaction.
• It was instrumental in creating a new image of man and the work
place The neo-classical or human relations approach put stress on
inter-personal relations and informal groups at the work-place.
• The human relationists argued that achievement of organisational
objectives is impossible without the willing cooperation of people
and such cooperation cannot be automatically secured or ordered. It
has to be consciously achieved.
• The neo-classical approach advocated people oriented organisation
structure which will integrate both informal and formal organisations.
 Features of Neo-classical
Approach
The basic principles of neo-classical theory or human relations approach are as
under:
1. The business organisation is a social system.
2. The behaviour of an individual is dominated by the informal group of which
he is a member.
3. An individual employee cannot be motivated by economic incentives alone.
His social and psychological needs must be satisfied to improve the level of
motivation.
4. In an organisation, it is ultimately cooperative attitude and not the more
command which yields result.
5. Management must aim at developing social and leadership skills in addition
to technical skills. It must take interest in the welfare of workers.
6. Morale and productivity go hand in hand in an organisation.
 Quantitative Approach
• This approach is also called ‘Mathematical’ , ‘Operations
Research’ or ‘Management Science’ approach.
• The basic feature of the quantitative management
thought is the use of mixed teams of scientists from
several disciplines.
• This school used scientific tools for providing a
quantitative base for managerial decisions. The
techniques commonly used for managerial decision-
making include Linear Programming, Critical Path
Method (CPM), Programme Evaluation Review
Technique (PERT), Games Theory, Queuing Theory and
Break-Even Analysis.
 Quantitative Approach
• The quantitative approach uses mathematical formulae for finding
solutions to the problems that were previously unsolved. The abiding
belief of the quantitative approach is that if management is a logical
process, it may be expressed in terms of mathematical symbols and
relationships.
• The basic approach is the construction of a quantitative model
because it is though this device that the problem is expressed in its basic
relationships and in terms of selected objectives.
• It may be noted that the development of models required the skills of
many disciplines such as engineering, mathematics, economic, statistics,
physical science, behavioural sciences and cost accountancy.
• The mathematical formulation enabled the managers to discover
significant relationships that they could control.
 Quantitative Approach
• Another important development along with the growth in the
number of quantitative techniques was the introduction of high
speed digital computers.
• Starting in about 1970, the quantitative approach to management
turned away from emphasis on narrow operations research
techniques to the boarder perspective of decision techniques and
models building.
• It also incorporated computerised information systems and
operations management.
• The latest emphasis of the quantitative approach marked a move
towards a more broad-based management.
 Behavioural Science Approach
• Under behavioural science approach, the knowledge
drawn from behavioural science, namely, psychology,
sociology and anthropology, is applied to explain and
predict human behaviour.
• It focuses on human behaviour in organisations and
seeks to promote verifiable propositions for scientific
understanding of human behaviour in organisations.
• It lays emphasis on the study of motivation, leadership,
communication, group dynamics, participative
management, etc.
 Features of Behavioural Science Approach

The behavioural scientists made the following propositions:

1. An organisation is a socio-technical system.
2. Individuals differ with regard to attitudes, perceptions and value
systems. As a result, they behave differently to different stimuli
under different conditions.
3. People working in the organisation have their needs and goals
which may differ from the organisational goals. Attempts should be
made to achieve fusion between organizational goals and human
needs.
4.A wide range of factors influence inter-personal and group
behaviour of people in organisations.
 Systems Approach
• In the 1960s, a new approach to management appeared which
attempted to unify the earlier schools of thought.
• This approach is commonly referred to as ‘Systems Approach’.
Basically, it took up where the functional process management
school let off to try to unify management theory.
• “A system viewpoint may provide the impetus to unify
management theory. By definition, it could treat the various
approaches, such as the process, quantitative and behavioural
ones, as subsystems in an overall theory of management. Thus,
the systems approach may succeed where the process approach
has failed to lead management out of the theory jungle”.
 Systems Approach- Characteristics
An organisation as a system has the following characteristics:
1. A system is goal-oriented.
2. A system consists of several sub-systems which are
interdependent and inter-related.
3. A system is engaged in processing or transformation of inputs
into outputs.
4. An organisation is an open and dynamic system. It has
continuous interface with the external environment as it gets inputs
from the environment and also supplies its output to the
environment. It is sensitive to its environment such as government
policies, competition in the market, technological advancement,
tastes of people, etc.
5. A system has a boundary which separates it from other systems.
 Features of Systems Approach
1. Interdependent Sub-systems: An organisation is a system
consisting of several sub-systems. For example, in a business
enterprise, production, sales and other departments and
subsystems.
2. Whole Organisation: The system approach provides a unified
focus to organizational efforts. It gives managers a way of
looking at the organisation as a whole that is greater than the
sum of its parts. The stress is laid on integration of various sub-
systems of the organisation to ensure overall effectiveness of the
system.
 Features of Systems Approach
3. Synergy: The output of a system is always more than
the combined output of its parts. This is called the law if
synergy. The parts of system become more productive
when they interact with each other than when they act in
isolation.
4. Multi-disciplinary: Modern theory of management is
enriched by contributions from various disciplines like
psychology, sociology, economics, anthropology,
mathematics, operations research and so on.
 Contingency Approach
• The latest approach to management which integrates the various
approaches to management is known as ‘contingency’ or
‘situational’ approach.
• The contingency theory stresses that there is no one best style of
leadership which will suit every situation. The effectiveness of a
particular leadership style will vary from situation to situation.
• For instance, participative leadership may be more effective in an
organization employing professional personnel in a high
technology operation in an atmosphere of non-materialistic
orientation and free expression.
• On the other hand, authoritarian leadership would be more
effective in an organisation which employs unskilled personnel on
routine tasks in social values oriented towards materialism and
obedience to authority.
 Evaluation of Contingency Approach
• Contingency approach guides the managers to be adaptive to
environmental variables. In other words, the managers should
develop situational sensitivity and practical selectivity.
• Contingency approach suggests the managers to consider
environmental contingencies while choosing their style and
techniques.
• Contingency approach is an improvement over systems
approach. It not only examines the relationships of sub-systems
of the organisation, but also the relationship between the
organisation and its environment.
 Important Topics of Difference
• Classical Approach VS Neo Classical Approach
• Human Relation Approach VS Behavioural Science Approach
• Scientific Management Approach VS Quantitative Approach
• System Approach VS Contingency Approach
 Management Thinkers

Evolution of management thought and

Management thinkers:
• Scientific Management
• Henry Fayol
• Mary Parker Follet
• Chester Barnard
 Scientific Management
• Fredrick W. Taylor (1856-1915): He is known as ‘father of
scientific management’.
• F.W. Taylor was the first person who insisted on the introduction
of scientific methods in management. He launched a new
movement during the last decade of 19th century which is known
as ‘Scientific Management’.
• Scientific management means application of scientific
methods to the problems of management.
• Taylor advocated scientific task setting based on time and motion
study, standardization of materials, tools and working
conditions, scientific selection and training of workers and so
on.
 Principles of Scientific
Management
1. Science, not the Rule of Thumb-
This rule focuses on increasing the efficiency of an organisation through
scientific analysis of work and not with the ‘Rule of Thumb’ method. Taylor
believed that even a small activity like loading paper sheets into boxcars can be
planned scientifically. This will save time and also human energy. This decision
should be based on scientific analysis and cause and effect relationships rather
than ‘Rule of Thumb’ where the decision is taken according to the manager’s
personal judgement.
2. Harmony, Not Discord-
Taylor indicated and believed that the relationship between the workers and
management should be cordial and complete harmony. Difference between the
two will never be beneficial to either side. Management and workers should
acknowledge and understand each other’s importance. Taylor also suggested the
mental revolution for both management and workers to achieve total harmony.
 Principles of Scientific
3. Mental Revolution-
Management
This technique involves a shift of attitude of management and workers towards each other.
Both should understand the value of each other and work with full participation and
cooperation. The aim of both should be to improve and boost the profits of the
organisation. Mental Revolution demands a complete change in the outlook of both the
workers and management; both should have a sense of togetherness.
4. Cooperation, not Individualism-
It is similar to ‘Harmony, not discord’ and believes in mutual collaboration between
workers and the management. Managers and workers should have mutual cooperation &
confidence and a sense of goodwill. The main purpose is to substitute internal competition
with cooperation.
5. Development of Every Person to his Greatest Efficiency-
The effectiveness of a company also relies on the abilities and skills of its employees.
Thus, implementing training, learning best practices and technology, is the scientific
approach to brush up the employee skill. To assure that the training is given to the right
employee, the right steps should be taken at the time of selection and recruiting candidates
based on a scientific selection.
 Elements of Scientific
Management
The techniques which Taylor regarded as its essential elements or features may be classified as
under:
• Separation of Planning and doing: Taylor emphasized the separation of planning aspects from
actual doing of the work. The planning should be left to the supervisor and the workers should
emphasize on operational work.
• Functional Foremanship: Separation of planning from doing resulted into development of
supervision system that could take planning work adequately besides keeping supervision on
workers. Thus, Taylor evolved the concept of functional foremanship based on specialization of
functions.
 Elements of Scientific
Management
• Job Analysis: It is undertaken to find out the best way of doing
things. The best way of doing a job is one which requires the least
movement consequently less time and cost.
• Standardization: Standardization should be maintained in respect
of instruments and tools, period of work, amount of work, working
conditions, cost of production etc.
• Scientific Selection and Training of Workers: Taylor has
suggested that the workers should be selected on scientific basis
taking into account their education, work experience, aptitudes,
physical strength etc.
• Financial Incentives: Financial incentives can motivate workers to
put in their maximum efforts. Thus, monetary (bonus,
compensation) incentives and non monetary (promotion,
upgradation) incentives should be provided to employees.
 BENEFITS OF SCIENTIFIC
MANAGEMENT
(a) Replacement of traditional rule of thumb method by scientific
techniques.
(b) Proper selection and training of workers.
(c) Incentive wages to the workers for higher production.
(d) Elimination of wastes and rationalization of system of control.
(e) Standardization of tools, equipment, materials and work methods.
(f) Detailed instructions and constant guidance of the workers.
(g) Establishment of harmonious relationship between the workers.
(h) Better utilization of various resources.
(i) Satisfaction of the needs of the customers by providing higher
quality products at lower prices.
 Criticism of Scientific
Management
• Taylor advocated the concept of functional foremanship to bring about
specialization in the organization. But this is not feasible in practice as a
worker can’t carry out instructions from eight foremen.
• Workers were hired on a first-come, first-hired basis without due
concern for workers ability or skills.
• Scientific management is production oriented as it concentrates too
much on the technical aspects of work and undermines the human
factors in industry. It resulted in monotony of job, loss of initiative, over
speeding workers, wage reductions etc.
• Tasks were accomplished by general rule of thumb without standard
times, methods or motion.
• Managers worked side-by-side with the workers, often ignoring such
basic managerial function of planning and organizing.
 Principles of
Management
(Contribution of Henry
Fayol)
• Henry Fayol is considered the father of modern theory of general and industrial
management. He divided general and industrial management into six groups:
1. Technical activities: Production, manufacture, adaptation.
2. Commercial activities: Buying, selling and exchange.
3. Financial activities: Search for and optimum use of capital.
4. Security activities: Protection of property and persons.
5. Accounting activities: Stock-taking, balance sheet, cost, and statistics.
6. Managerial activities: Planning, organisation, command, co- ordination and
control.
• These six functions had to be performed to operate successfully any kind of
business. He, however, pointed out that the last function i.e., ability to manage,
was the most important for upper levels of managers.
 Principles of
Management
1. Division of work: Division of work or specialization alone can give
maximum productivity and efficiency. Both technical and managerial
activities can be performed in the best manner only through division of
labour and specialization.
2. Authority and Responsibility: The right to give order is called authority.
The obligation to accomplish is called responsibility. Authority and
Responsibility are the two sides of the management coin. They exist together.
They are complementary and mutually interdependent.
3. Discipline: The objectives, rules and regulations, the policies and procedures
must be honoured by each member of an organisation. There must be clear
and fair agreement on the rules and objectives, on the policies and
procedures. There must be penalties (punishment) for non-obedience or
indiscipline. No organisation can work smoothly without discipline -
preferably voluntary discipline.
 Principles of
Management
4. Unity of Command: In order to avoid any possible confusion and conflict,
each member of an organisation must received orders and instructions only from
one superior (boss).
5. Unity of Direction: All members of an organisation must work together to
accomplish common objectives.
6. Emphasis on Subordination of Personal Interest to General or Common
Interest: This is also called principle of co-operation. Each shall work for all and
all for each. General or common interest must be supreme in any joint enterprise.
7. Remuneration: Fair pay with non-financial rewards can act as the best
incentive or motivator for good performance. Exploitation of employees in any
manner must be eliminated. Sound scheme of remuneration includes adequate
financial and non-financial incentives.
 Principles of Management
8. Centralization: There must be a good balance between centralization and
decentralization of authority and power. Extreme centralization and decentralization must
be avoided.
9. Scalar Chain: The unity of command brings about a chain or hierarchy of command
linking all members of the organisation from the top to the bottom. Scalar denotes steps.
10. Order: Fayol suggested that there is a place for everything. Order or system alone can
create a sound organisation and efficient management.
11. Equity: An organisation consists of a group of people involved in joint effort. Hence,
equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate
joint collaboration.
12. Stability of Tenure: A person needs time to adjust himself with the new work and
demonstrate efficiency in due course. Hence, employees and managers must have job
security. Security of income and employment is a pre-requisite of sound organisation and
management.
13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organisation. Union
is strength. But unity demands co-operation. Pride, loyalty and sense of belonging are
responsible for good performance.
14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial
planning and execution of predetermined plans.
 Criticism of Administration Management
Though the proponents of management process approach have made significant
contribution to the development of thought, their work suffers from the following
limitations:
1. There is no single classification of managerial functions acceptable to all the
functional theorists. There is also lack of unanimity about the various terms
such as management and administration, commanding and directing, etc.
2. The functionalists considered their principles to be universal in nature. But
many of the principles have failed to deliver the desired results in certain
situations.
3. The functional theorists did not consider the external environment of
business.
4. Fayol overemphasized the intellectual side of management. He felt that
management should be formally taught, but he did not elaborate the nature
and contents of management education.
 Mary Parker Follett- Principles of
Coordination
Mary Parker Follet has brought forth various principles of coordination in the
following:
1. Principle of direct contact: In the first principle, Mary Parker Follet states
that coordination can be achieved by direct contact among the responsible people
concerned. She believes, that coordination can be easily obtained by direct
interpersonal relationships and direct personal communications.
2. Early stage: Coordination should start from the very beginning of planning
process. At the time of policy formulation and objective setting, coordination can
be sought from organisational participants. Obviously, when members are
involved in goal-setting, coordination problem is ninety percent solved.
3. Reciprocal relationship: As the third principle, Mary Follet states, that all
factors in a situation are reciprocally related. In other words, all the parts
influence and are influenced by other parts.
 Mary Parker Follett- Principles of
Coordination
4. Principle of continuity: The fourth principle, advocated by
Follet, is that coordination is a continuous and never-ending
process. It is something which must go on all the times in the
organisation. Further, coordination is involved in every managerial
function.
5. Principle of self-coordination: In addition to the four principles
listed by Follet above, Brown has emphasised the principle of self-
coordination. According to this principle, when a particular
department affects other function or department, it is in turn,
affected by the other department or function. This particular
department may not be having control over the other departments.
 Chester Barnard
• Chester Barnard, president of Bell Telephone Company,
developed theories about the functions of the manager as
determined by constant interaction with the environment.
• Barnard believes that organizations were made up of people with
interacting social relationships.
• The manager’s major functions were to communicate and
stimulate subordinates to high level of efforts.
• He saw the effectiveness of an organization as being dependent on
its ability to achieve cooperative efforts from a number of
employees in a total, integrated system.
 Chester Barnard- Principles
• Barnard also developed set of working principles by which
organizational communication systems can maintain final authority
for the management team. These principles are:
1. Channels of communication should be definitely known.
2. Objective authority requires a definite formal channel of
communication to every members of an organization.
3. The line of communication must be as direct or short as possible.
4. The complete line of communication should usually be used.
5. Competence of the persons serving at communication centers that
is officers, supervisory heads, must be adequate.
6. The line of communication should not be interrupted during the
time the organization is to function.
 Management Thinkers
Evolution of management thought and
Management1 thinkers:
• Max Weber- Bureaucracy
• Perter F Drucker
• Frank and Lillian Gilbreth
• Henry Gantt
• Abraham Maslow
• Herzberg and McGregor
 Max Weber- Bureaucracy
Max Weber (1864-1920), a German sociologist contributed his views on
bureaucracy to the management thought. His primary contribution includes his
theory of authority structure and his description of organisations based on the
nature of authority relations within them.
Essentially, it was Weber’s contention that there are three types of legitimate
authority which are as follows:
1. Rational-legal authority: Obedience is owed to a legally established position
or rank within the hierarchy of a business, military unit, government, and so on.
2. Traditional authority: People obey a person because he belongs to certain
class or occupies a position traditionally recognized as possessing authority, such
as a real family.
3. Charismatic authority: Obedience is based on the followers belief that a
person has some special power or appeal.
 Max Weber- Bureaucracy- Features
Weber’s theory ‘bureaucracy’ recognizes rational-legal authority as the most important
type in organizations. Under traditional authority, leaders are not chosen for their
competence, an charismatic authority is too emotional and irrational. A bureaucratic
organization which is based on rational-legal authority display the following features:
1. Division of Work: There is a high degree of division of work at both the operative and
administrative levels. This leads to specialization of work.
2. Hierarchy of Positions: There is a hierarchy of authority in the organization. Each
lower position is under the control of a higher one. Thus, there is unity of command. The
bureaucratic structure is hierarchical in nature. It is like a pyramid in which quantity of
authority increases as one moves up the ladder in the organization.
3. Rules and Regulations: The rules, regulations and procedures are clearly laid down by
the top administration. Their benefits are as under:
(a) They standardize operations and decisions.
(b) They serve as receptacles of past learning.
(c) They protect incumbents and ensure equality of treatment.
 Max Weber- Bureaucracy- Features
4. Impersonal Conduct: There is impersonality of relationships among
the organizational members. The decisions are entirely guided by rules
and regulations and are totally impersonal. There is no room for emotions
and sentiments in this type of structure.
5. Staffing: The personnel are employed by a contractual relationship
between the employee and employer. The tenure of service is governed by
the rules and regulations of the organisation. The employees get a salary
every months which is based on the job they handle and also the length of
service.
6. Technical Competence: The bureaucrats are neither elected not
inherited, but they are appointed through selection and the basis of
selection is their technical competence. Promotions in bureaucracies are
also based on technical qualifications and performance.
 Criticism of Bureaucracy
1. The rules may be followed in letter and not in spirit. Thus, instead of
providing guidelines, the rules may become source of inefficiency. The
rules may be misused or misinterpreted by the persons concerned with the
implementation of rules. Red tapism and technicalism may follow as a
result.
2. Bureaucracy does not consider informal organisation and inter-personal
difficulties.
3. Bureaucracy discourages innovation because every employee is
supposed to act as per rules and regulations or to the secondary goals.
4. Goal displacement may take place in a bureaucratic organisation. The
bureaucrats may give priority to rules and regulations or to the secondary
goals.
5. The bureaucratic structure is tall consisting of several layers of
executives. Thus, communication from the top level to the lowest level
will take a very long time.
 Perter F Drucker
• Drucker has written on virtually every aspect of organizational
management and change.
• In his Practice of Management (1954) he says that the function,
which distinguishes the mangers above all others, is an
educational one.
• The managers unique contribution should be to give others vision
and the ability to perform.’
• He also proposed' management by objectives', 'risk-taking
decisions', strategic thinking' and 'building an integrated team'.
 Perter F Drucker- Management Concepts
• Decentralization: Rosenstein said Drucker was focused on decentralizing – or
democratizing – management in the workplace. He wanted all employees to
feel valued and empowered, as if their contributions and voices mattered. He
believed in assigning tasks that inspire workers, rewarding front-line workers
with responsibility and accountability, and uniting supervisors and their
subordinates to achieve shared organizational goals.
• Knowledge work: Knowledge workers are white-collar employees whose jobs
require handling or using information, such as engineers and analysts. Drucker
– who foresaw the knowledge-based economy years before the rise of
computing and the internet – placed high value on workers who solved
problems and thought creatively, according to Rosenstein. He wanted to foster
a culture of employees who could provide not just labor, but also insight and
ideas.
 Perter F Drucker- Management Concepts
• Workforce development: Drucker felt strongly that managers should improve
and develop both themselves and their team members, according to Rosenstein,
who said that ongoing training and education are hallmarks of Drucker's
philosophy. He believed external development – via participation in industry
trade groups and conferences, for example – to be especially valuable.
• Corporate social responsibility: Rosenstein said Drucker was a holistic
thinker. Instead of looking at businesses as discrete entities, he looked at them
as components of a larger social system. In that context, he argued that
businesses should see themselves as part of a community and make decisions
in that regard – with as much respect for their external as for their internal
impact. Drucker even viewed profits through a social lens: A company has a
responsibility to be profitable, he argued, so that it can create jobs and wealth
for society at large.
 Perter F Drucker- Management Concepts
• Organizational culture: Be they positive or negative, helpful or
harmful, companies have always had cultures. But Drucker was among
the first to suggest that managers could – and should – shape them. "The
spirit of an organization is created from the top," he said in his book
Management: Tasks, Responsibilities, Practices.
• Customer experience: According to the Drucker Society of Austria,
steward of Drucker's philosophy in his native country, Drucker insisted
that businesses have only one real purpose: to create customers. By
viewing business operations and opportunities through that lens – the
customer, not the business, decides what's important – he established a
predicate for customer-focused companies like Apple, Zappos and
countless others.
 Frank and Lillian Gilbreth
• Frank Gilbreth, a construction contractor by back ground, gave up his
contracting career in 1912 to study scientific management after hearing
Taylor’s speak at a professional meeting.
• Along with his wife Lillian, a psychologist, he studied work
arrangements to eliminate wasteful hand-body-motion.
• Frank specialized in research that had a dramatic impact on medical
surgery and, through his time and motion findings, surgeons saved many
lives.
• Lillian is known as ‘first lady of management’ and devoted most of her
research to the human side of management.
 Gilbreth's contributions to
management thought

(a) The one best way of doing a job is the way which involves the
fewest motions performed in an accessible area and in the most
comfortable position. The bes way can be found out by the
elimination of inefficient and wasteful motions involved in the
work.
(b) He emphasized that training should be given to workers from
the very beginning so that they may achieve competence as early as
possible.
 Gilbreth's contributions to management thought

(c) He suggested that each worker should be considered to occupy three

positions
• (i)the job he held before promotion to his present position,
• (ii) his present position, and
• (iii) the next higher position.
The part of a worker's time should be spent in teaching the man below him
and learning from the man above him. This would help him qualify for
promotion and help to provide a successor to his current job.
(d) Frank and Lillian Gilberth also gave a thought to the welfare of the
individuals who work for the organization.
(e) Gilbreth also devised methods for avoiding wasteful and unproductive
movements. He laid down how workers should stand, how his hands
should move and so on.
 Henry Gantt

• Henry Lawrence Gantt (USA, 1861 - 1819): H.L Gantt was born
in 1861. He graduated from John Hopkins College. For some
time, he worked as a draftsman in an iron foundry.
• In 1884, he qualified as a mechanical engineer at Stevens
Institute. In 1887, he joined the Midvale Steel Company. Soon, he
became an assistant to F.W Taylor.
• He worked with Taylor from 1887 - 1919 at Midvale Steel
Company. He did much consulting work on scientific selection of
workers and the development of incentive bonus systems.
• He emphasized the need for developing a mutuality of interest
between management and labour.
 CONTRIBUTIONS TO THE CONCEPTS OF
MANAGEMENT
1. Gantt chart to compare actual to planned performance. Gantt chart
was a daily chart which graphically presented the process of work by
showing machine operations, man hour performance, deliveries, effected
and the work in arrears. This chart was intended to facilitate day-to-day
production planning.
2. Task-and-bonus plan for remunerating workers indicating a more
humanitarian approach. This plan was aimed at providing extra wages for
extra work besides guarantee of minimum wages. Under this system of
wage payment, if a worker completes the work laid out for him, he is paid
a definite bonus in addition to his daily minimum wages. On the other
hand, if a worker does not complete his work, he is paid only his daily
minimum wages. There was a provision for giving bonus to supervisors, if
workers under him were able to earn such bonus by extra work.
 CONTRIBUTIONS TO THE CONCEPTS OF
MANAGEMENT
3.Psychology of employee relations indicating management
responsibility to teach and train workers. In his paper "Training Workmen
in Habits of Industry and Cooperation", Gantt pleaded for a policy of
preaching and teaching workmen to do their work in the process evolved
through pre-thinking of management.
4. Gantt laid great emphasis on leadership. He considered management
as leadership function. He laid stress on the importance of acceptable
leadership as the primary element in the success of any business.

Gantt's contributions were more in the nature of refinements rather than

fundamental concepts. They made scientific management more humanized
and meaningful to devotees of Taylor.
 Abraham Maslow-
‘Hierarchy of Needs’ Theory
• Abraham Maslow was a psychologist who proposed a theory of
human motivation for understanding behaviour based primarily
upon a hierarchy of five need categories.
• He recognized that there were factors other than one's needs (for
example, culture) that were determinants of behaviour. However,
he focused his theoretical attention on specifying people's internal
needs.
• Maslow labelled the five hierarchical categories as physiological
needs, safety and security needs, love (social) needs, esteem needs
and the need for self-actualization.
 Abraham Maslow-
‘Hierarchy of Needs’ Theory
 Abraham Maslow-
‘Hierarchy of Needs’ Theory
• Abraham Maslow was a psychologist who proposed a theory of
human motivation for understanding behaviour based primarily
upon a hierarchy of five need categories.
• He recognized that there were factors other than one's needs (for
example, culture) that were determinants of behaviour. However,
he focused his theoretical attention on specifying people's internal
needs.
• Maslow labelled the five hierarchical categories as physiological
needs, safety and security needs, love (social) needs, esteem needs
and the need for self-actualization.
 Abraham Maslow-
‘Hierarchy of Needs’ Theory
• Physiological needs are those required to sustain life, such as air, water,
food and sleep. According to this theory, if these fundamental needs are
not satisfied then one will surely be motivated to satisfy them. Higher
needs such as social needs and esteem are not recognized until one
satisfies the needs basic to existence.
• Once physiological needs are met, one's attention turns to safety and
security in order to be free from the threat of physical and emotional
harm. Such needs might be fulfilled by living in a safe area, medical
insurance, job security etc.
• Once a person has met the lower level physiological and safety needs,
higher level motivators awaken. The first level of higher level needs are
social needs. Social needs are those related to interaction with others and
may include friendship, belonging to a group, giving and receiving love
etc.
 Abraham Maslow-
‘Hierarchy of Needs’ Theory
• After a person feels that they "belong", the urge to attain a degree of
importance emerges. Esteem needs can be categorized as external
motivators and internal motivators. Internally motivating esteem needs
are those such as self-esteem, accomplishment, and self respect. External
esteem needs are those such as reputation and recognition.
• Self-actualization is the summit of Maslow's motivation theory. It is
about the quest of reaching one's full potential as a person. Unlike lower
level needs, this need is never fully satisfied; as one grows
psychologically there are always new opportunities to continue to grow.
Self-actualized people tend to have motivators such as truth, justice,
wisdom and meaning.
While scientific support fails to reinforce Maslow's hierarchy, his theory is
very popular, being the introductory motivation theory for many students
and managers, worldwide.
 Herzberg
• In 1959, Frederick Herzberg, a behavioural scientist proposed a
two-factor theory or the motivator-hygiene theory. According to
Herzberg, there are some job factors that result in satisfaction
while there are other job factors that prevent dissatisfaction.
According to Herzberg, the opposite of “Satisfaction” is “No
satisfaction” and the opposite of “Dissatisfaction” is “No
Dissatisfaction”.
 Herzberg- Two-Factor Theory of
Motivation
Hygiene factors- Hygiene factors are those job factors which are essential
for existence of motivation at workplace. The hygiene factors symbolized
the physiological needs which the individuals wanted and expected to be
fulfilled. Hygiene factors include:
• Pay - The pay or salary structure should be appropriate and reasonable.
It must be equal and competitive to those in the same industry in the
same domain.
• Company Policies and administrative policies - The company policies
should not be too rigid. They should be fair and clear. It should include
flexible working hours, dress code, breaks, vacation, etc.
• Fringe benefits - The employees should be offered health care plans
(mediclaim), benefits for the family members, employee help
programmes, etc.
 Herzberg- Two-Factor Theory of
Motivation
• Physical Working conditions - The working conditions should
be safe, clean and hygienic. The work equipments should be
updated and well-maintained.
• Status - The employees’ status within the organization should be
familiar and retained.
• Interpersonal relations - The relationship of the employees with
his peers, superiors and subordinates should be appropriate and
acceptable. There should be no conflict or humiliation element
present.
• Job Security - The organization must provide job security to the
employees.
 Herzberg- Two-Factor Theory of Motivation
Motivational factors- According to Herzberg, the hygiene factors cannot be regarded
as motivators. The motivational factors yield positive satisfaction. These factors are
inherent to work. These factors motivate the employees for a superior performance.
These factors are called satisfiers. These are factors involved in performing the job.
Employees find these factors intrinsically rewarding. The motivators symbolized the
psychological needs that were perceived as an additional benefit. Motivational factors
include:
• Recognition - The employees should be praised and recognized for their
accomplishments by the managers.
• Sense of achievement - The employees must have a sense of achievement. This
depends on the job. There must be a fruit of some sort in the job.
• Growth and promotional opportunities - There must be growth and advancement
opportunities in an organization to motivate the employees to perform well.
• Responsibility - The employees must hold themselves responsible for the work. The
managers should give them ownership of the work. They should minimize control but
retain accountability.
• Meaningfulness of the work - The work itself should be meaningful, interesting and
challenging for the employee to perform and to get motivated.
McGregor's Theory X and Theory Y
• Different styles of management have a different bearing on the
motivation of workers in the organization.
• The style adopted by a manager in managing his subordinates is
basically dependent upon his assumption about human behaviour.
• Theory X is negative, traditional and autocratic style while
Theory Y is positive, participatory and democratic. Thus, these
labels describe contrasting set of assumptions about human
nature.
• Douglas McGregor has classified the basic assumption regarding
human nature into two parts and has designated them as 'theory X’
and 'theory Y'.
McGregor's Theory X and Theory Y
Theory X: This is the traditional theory of human behaviour, which makes the
following assumptions about human nature:
1. Management is responsible for organizing the elements of productive enterprises -
money, material, equipment, and people - in the interest of economic ends.
2. With reference to people it is a process of directing their efforts, motivating them,
controlling their actions, modifying their behaviour in order to be in conformity with
the needs of the organization.
3. Without this active intervention by management, people would be passive – even
resistant to organizational needs. Hence they must be persuaded, rewarded, punished
and properly directed.
4. The average human being has an inherent dislike of work and will avoid it if he
can.
5. He lacks ambition, dislikes responsibility and prefers to be led.
6. He is inherently self-centred, indifferent to organizational needs.
7. He is by nature resistant to change.
8. He is gullible, not very bright.
 McGregor's Theory X and Theory Y
Theory Y: The assumption of theory Y, according to McGregor are as follows:-
1. Work is as natural as play or rest, provided the conditions are favourable; the
average human being does not inherently dislike work.
2. External control and the thrust of punishment are not the only means for bringing
about efforts towards organizational objectives. Man can exercise self-control and
self-direction in the service of objectives to which he is committed.
3. Commitment to objectives is a result of the rewards associated with their
achievement. People select goals for themselves if they see the possibilities of some
kind of reward that may be material or even psychological.
4. The average human being, under proper conditions does not shirk responsibility,
but learn not only to accept responsibility but also to seek it.
5. He has capacity to exercise a relatively high degree of imagination, ingenuity
and creativity in the solution of organizational problems in widely, not narrowly
distributed in the population.
6. Under conditions of modern industrial life the intellectual potentialities of people
are only partially utilized. As a matter of fact, men, have unlimited potential.
McGregor's Theory X and Theory Y
Write in the chat box for your
doubts and queries……

Sources:
• Harold Koontz, and Heinz Weihrich, Essentials of Management: An International
Perspective, New Delhi, McGraw-Hill, 2010.
• Richard L Daft, The New Era of Management, New Delhi, Thomson, 2007.
• Stephen P Robbins, Mary Coulter and Neharika Vohra, Managemnt, New Delhi,
Pearson, 2011.
Next Lecture….

• Unit 2