1. 1 Principles of Management
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EVOLUTION OF
MANAGEMENT THOUGHT
EVOLUTION OF
MANAGEMENT THOUGHT

2. 2
Figure Chronological Development of Management Perspectives
2–2

3. 3
MANAGEMENT APPROACHES
CLASSICAL
• SCIENTIFIC
• ADMINISTRATIV
E
• BEUROCRACY
NEO
-CLASSICAL
• Hawthrone
Experiments
• Human Relations
Movement
• Behavioural
Sciences Thinking
MODERN
• QUANTITATIVE
• SYSTEM
• CONTINGENCY

4. 4
Figure Subfields of the Classical Perspective on Management
2–4
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5. 5 Scientific Management: Taylor
Frederick W. Taylor (1856-1915)
▫ Father of “Scientific Management.
 attempted to define “the one best way” to
perform every task through systematic study and
other scientific methods.
 believed that improved management practices
lead to improved productivity.
▫ Three areas of focus:
 Task Performance
 Supervision
 Motivation
2–5

6. Task Performance : Scientific 6
management incorporates basic
expectations of management, including:
▫ Development of work standards
▫ Selection of workers
▫ Training of workers
▫ Support of workers
2–6
Supervision: Taylor felt that a single supervisor could not be
an expert at all tasks.
– As a result, each first-level supervisor should be
responsible only workers who perform a common function
familiar to the supervisor.
– This became known as “Functional Foremanship.”
Motivation: Taylor believed money was the way to
motivate workers to their fullest capabilities.

7. Principles
1. Science – No rule of thumb.
2. Harmony, not discord.
3. Co-operation not Individualism.
4. Maximum output not restricted.
5. Development of each man to his best capacity
and ability.
6. Maximum prosperity of employees, coupled
with maximum prosperity of Orgn.
‘Mental Revolution’
Eyes off division of surplus, rather focus on
increasing the size of surplus

8. Techniques..
• Time Study (work Measurement)
• Motion Study
• Method Study
• Fatigue Study
• Differential wage rate system
• Scientific task planning
• Standardization + Simplification
• Functional Foremanship

9. Steps in Scientific Management
9
1 2 3 4
Develop a science
for each element of
the job to replace old
rule-of-thumb methods
Scientifically select
employees and then
train them to do the job
as described in step 1
Supervise employees
to make sure they
follow the prescribed
methods for performing
their jobs
Continue to plan
the work, but use
workers to get the
work done
Figure 1.3

11. 11
Administrative Management: Fayol
Henri Fayol (1841–1925)
▫ First recognized that successful managers had
to understand the basic managerial functions.
▫ Developed a set of 14 general principles of
management.
▫ Fayol’s managerial functions of planning,
leading, organizing and controlling are
routinely used in modern organizations.
2–11

12. Administrative Theory
Henry Fayol (1841-1925)
Father of Adminstrative Management
His Contributions…
o 6 Business Activities
o 5 Management Functions
o 14 Principles
Business Activities
1. Technical
2. Commercial
3. Financial Operating activities of business
4. Accounting
5. Security
6.Managerial Activity Most Neglected

13. 13 Fayol’s Principles
Henri Fayol, developed a set of 14 principles:
1. Division of Labor: allows for job specialization.
 Fayol noted firms can have too much
specialization leading to poor quality and worker
involvement.
2. Authority and Responsibility: Fayol included
both formal and informal authority resulting from
special expertise.
3. Unity of Command: Employees should have only
one boss.
4. Line of Authority: a clear chain from top to
bottom of the firm.
5. Centralization: the degree to which authority
rests at the very top.
6. Unity of Direction: One plan of action to guide
the organization.
7. Equity: Treat all employees fairly in justice and
respect.
2–13

14. 14 Fayol’s Principles
8. Order: Each employee is put where they have
the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful
employees needed.
11. Remuneration of Personnel: The
payment system contributes to success.
12. Stability of Tenure: Long-term
employment is important.
13. General interest over individual
interest: The organization takes precedence
over the individual.
14. Esprit de corps: Share enthusiasm or
devotion to the organization.
2–14

15. 15
Bureaucratic Management
Focuses on the overall organizational system.
Bureaucratic management is based upon:
Management responsibilitities
are based on a person’s demonstrated
ability to hold the position
Best suitable person fills a particular position
in a bureaucratic organization
2–15

16. Bureaucracy
Max Weber (1864-1920)
A German Social Scientist
PPrriinncciipplleess
oDivision of work
oRules and Regulations
oHierarchy of Authority
oTechnical Competence
oRecord Keeping
oImpersonal Relations
Legitimate
Authority
Charisma
tic
Tradition
Rational
al

17. 17
Key points of Bureaucracy
Authority is the power to hold people
accountable for their actions.
Positions in the firm should be held based on
performance not social contacts.
Position duties are clearly identified.
People should know what is expected of them.
Lines of authority should be clearly identified.
Workers know who reports to who.
Rules, Standard Operating Procedures
(SOPs), & Norms used to determine how the
firm operates.
 Sometimes, these lead to “red-tape” and other problems.
2–17

18. A) Hawthrone Experiments
George Elton Mayo (1880-1949)
Father of Neo-Classical Approach
Experiments conducted at a plant at Western Electric
Company.
 Illumination Experiment
 Relay Assembly Test room studies
 Mass Interview
 Bank wiring observation room study
Conclusion-
1. A work group- not a techno economic unit but a social
system
2.Workers not only rational economic beings motivated by
money, but also respond to work conditions
3.Social+Psychological factors exercise greater control on
employee behaviour.

19. B) Human Relations Approach
Pertains to motivating people in orgn to develop
team work which effectively fulfills their needs and
leads to achieving organisational goals.
Contributions-
1.Moral Justification
2.Satisfy social and psychological needs to increase
productivity.
3.Highlights the people side of orgn.
4.A true concern for workers
5.Focuses attention on inter-personal relations +
Dynamics
6.Stressed on training of people management skills
and managerial styles.

20. C) Behavioural Science Approach

21. 21
Behavioral Perspective
Followed the classical perspective in the
development of management thought.
▫ Acknowledged the importance of human
behavior in shaping management style
▫ Is associated with:
 Mary Parker Follett
 Elton Mayo
 Douglas McGregor
 Chester Barnard
2–21

22. 22
Mary Parker Follett
Concluded that a key to effective management
was coordination.
Felt that managers needed to coordinate and
harmonize group effort rather than force and
coerce people.
Believed that management is a continuous,
dynamic process.
Felt that the best decisions would be made by
people who were closest to the situation.
2–22

23. 23 Elton Mayo
Conducted the famous Hawthorne
Experiments. At Western Electric Co.
during 1924-1932.
“Hawthorne Effect”
 Productivity increased because attention was
paid to the workers in the experiment.
 Phenomenon whereby individual or group
performance is influenced by human behavior
factors.
Actually, it appears that the workers
enjoyed the attention they received as
part of the study and were more
productive.
2–23

24. Maslow’s Hierarchy of Needs
• Five levels
▫ Physiological – hunger, thirst, shelter, sex
▫ Safety – security and protection
▫ Social – affection, interpersonal relationships
▫ Esteem – self-respect, achievement status
▫ Self-actualization – achieving full potential
• Usually thought in the form of a pyramid
24

25. Maslow’s Hierarchy of Needs
25
SA
Esteem
Needs
Social Needs
Security Needs
Physiological Needs

26. 26
Douglas McGregor
Proposed the Theory X and Theory Y styles of
management.
▫ Theory X managers perceive that their
subordinates have an inherent dislike of work
and will avoid it if at all possible.
▫ Theory Y managers perceive that their
subordinates enjoy work and that they will gain
satisfaction from performing their jobs.
2–26

27. 27
2–27

28. 28
The Quantitative Perspective
Characterized by its use of mathematics,
statistics, and other quantitative techniques
for management decision making and problem
solving.
This approach has four basic characteristics:
1. A decision-making focus
2. Development of measurable criteria
3. Formulation of a quantitative model
4. The use of computers
2–28

29. Contemporary Management Theory
• The Systems Perspective
▫ A system is an interrelated set of elements
functioning as a whole. An organization as a
system is composed of four elements:
 Inputs (material and/or human resources)
 Transformation processes (technical and
managerial processes)
 Outputs (products and services)
 Feedback (reactions from the environment)
29

30. Developed by
N. Zaidi
30
The Integrated Systems Model
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31. Systems Perspective
Developed by
N. Zaidi
• Open systems interact with one another and
other environments
• Closed systems do not interact with their
environment
• Subsystems recognizes the importance of
subsystems because of their
interdependence
31

32. Systems Perspective
Developed by
N. Zaidi
• Synergy
▫ Subsystems are more successful working
together than working alone. The whole,
working together, is greater than the sum
of its parts.
• Entropy
▫ A natural process leading to system decline
which can be avoided through
organizational change and renewal.
32

33. Systems Approach
• Attempts to explain organisational
behaviour by analysing the structure of
orgn.
• It was a result of those orgns that were
trying to adapt to the rapid change in
business environment.
Features-
1. Unified and purposeful system
2. Each inter-related parts and subsystems.
3. Each system has a boundary- Internal or External
4. Open system Vs. Closed systems
5. A business enterprise as a open system
(Draws Inputs- convert into output- sends to
environment)

35. Contigency Approach
• Was developed by managers, consultants
and researcher who tried to apply the
concept of earlier approaches to real life
situations.
‘ There is no best way to tackle the problem
of management. The application of
management principles and practices is
contingent upon the environment’

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Features
1.Mgt is situational.
2.Should match or fit its approach to the
requirements of a particular situation.
3.Mgt’s success depends on its ability to cope with its
env, it should sharpen its diagonistic skills so as to
anticipate and comprehend the environmental
change.
4.Mgrs should understand that there is no best way
to manage.

37. The Contingency Perspective
• The Contingency Perspective suggests that
universal theories cannot be applied to
organizations because each organization is
unique – what works in one situation may not
work in another
▫ This requires managers to identify the key
contingencies in a given situation.
37

38. An Integrative Framework
of Management Perspectives
38
Systems Approach
• Recognition of internal
interdependencies
• Recognition of
environmental influences
Contingency Perspective
• Recognition of the situational
nature of management
• Response to particular
characteristics of situation
Classical
Management
Perspectives
Methods for
enhancing
efficiency and
facilitating planning,
organizing, and
controlling
Behavioral
Management
Perspectives
Insights for moti-vating
performance
and understanding
individual behavior,
groups and teams,
and leadership
Quantitative
Management
Perspectives
Techniques for
improving decision
making, resource
allocation, and
operations
Effective and efficient management

39. 39
Management in the 21st Century
William Ouchi’s Theory Z
▫ Japanese-style approach to management
developed by William Ouchi
 Advocates trusting employees and making them
feel like an integral part of the organization.
 Based on the assumption that once a trusting
relationship with workers is established,
production will increase.
2–39

40. 40
Future Leaders Must:
Be thoroughly schooled in the different management
perspectives.
Understand the various influences that will have a
continuing effect on management thinking
Be aware of how key business environment variables
relate to their organization.
Know which elements to select from the various
management perspectives that are appropriate for
their situation.
Be adaptable to change such that future conditions and
developments do not quickly render their chosen
approaches obsolete.
2–40