Evolution of Management Thought (1) - Classical & Neo-Classical

 

Topics Covered I.             Classical Approaches-  1. Scientific Management - FW Taylor, Henry L. Gantt, Frank & Lillion Gilberth 2. Administrative Management - Henry Fayol, L. Urwick, 3. Bureaucracy - Max weber   II.           Neo Classical Approaches. - 1 . Human Relations Movement - Hawthorne Experiment by Elton mayo & Colleagues.

 

Over the last couple of centuries many stalwarts have contributed to the development of management thoughts. The management thoughts have been classified in many ways. A simple way these can be classified is the following. 

I.  Classical Approaches- 

1. Scientific Management - FW Taylor, Henry L. Gantt, Frank & Lillion Gilberth

2. Administrative Management - Henry Fayol, L. Urwick,

3. Bureaucracy - Max weber

II. Neo Classical Approaches. -

1 . Human Relations Movement - Elton mayo & Colleagues. 

2. Behavioral approaches. - Douglas Mc Gregor, A. Maslo Chester Bernard, Mary Parker Follet, Rensis Likert 

 III. Modern Approaches-

1. Quantitative, Approach-Group of scientists in world war2

2. Systems Approach - Chester Bernard, George Homans, Simons, 

3. Contingency Approach or Situational Approach.

 

Structured Breakdown of the Management Schools: 1. Classical Approaches (Early Classical Approaches) These approaches focused on efficiency and structure within organizations. Scientific Management: Developed by figures like Frederick Taylor, this theory emphasizes improving individual worker efficiency through scientific study of work. Administrative Management: Henri Fayol focused on the overall management process, outlining principles like planning, organizing, commanding, coordinating, and controlling. Bureaucracy: Max Weber's theory of bureaucracy emphasizes formal structure, rules, and authority within an organization for fairness and efficiency. 2. Neoclassical Approaches This perspective emerged from the classical school but shifted the focus to human and group dynamics. Human Relations Movement: Pioneers like Elton Mayo highlighted the importance of social and psychological factors, showing that good human relations can increase productivity. Behavioral Approaches: Further developing the human element, this approach, associated with McGregor and Maslow, explores human behavior in organizations, focusing on motivations and leadership styles. 3. Modern Approaches These approaches build on earlier theories by using more complex and integrated perspectives. Quantitative Approach: This approach uses mathematical and statistical models to make management decisions. Systems Approach: This theory views an organization as a system with interconnected parts, emphasizing the interaction between the organization and its environment. Contingency Approach (Situational Approach): This perspective suggests that the most effective management approach depends on the specific situation or context, rather than there being a single best way to manage.

 

Classical Approaches

 

Scientific Management

Principles of Scientific Management by Taylor:

F.W. Taylor or Fredrick Winslow Taylor, also known as the ‘Father of scientific management’ proved with his practical theories that a scientific method can be implemented to management. Taylor gave much concentration on the supervisory level of management and performance of managers and workers at an operational level.

The five principles of management by F.W Taylor are as follows.
1. Science, not the Rule of Thumb-

The development of a true science of management so that best method of doing a job can be determined. 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. Scientific selection of workers.

Worker should be given responsibility for the task for which he or she is most fit for.

 

3.  Harmony, Not Discord-

Taylor indicated and believed that the relationship between the workers and management should be cordial and completely harmonious. 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.

4. Mental Revolution-

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.

5. 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 and confidence and a sense of goodwill. The main purpose is to substitute internal competition with cooperation.

6. 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." 

 

7. Differential rate system- 

Paying higher wages to more efficient workers. This resulted in faster production of goods.

 

The three advantages of scientific management are as follows:

1.    Reduced cost of production

2.    Increased efficiency

3.    Less production time.

 

Disadvantages

1.    Workers distrust & hostility.

2.    Man is not machine

3.    No questions allowed

4.    No best method

5.    No work satisfaction

6.    Whole man goes to work

 

Management theory of Henry Gantt

Allocation of time and resources: It is essential to assess the number of people required to successfully complete a project. This process involves determining the necessary human resources, skills and expertise for each task or project phase. By identifying resource requirements, project managers can allocate personnel effectively to ensure that the right people are available at the right time. 

 

Milestones and deadlines: Gantt’s management theory incorporates benchmarks to efficiently complete a project. Each milestone should have a clear deadline or target date attached to it. This helps you track progress, evaluate the project’s overall timeline, and ensure key deliverables are completed on schedule. 

 

Time estimation: Another critical aspect of Gantt’s theory involves breaking the project into smaller, more manageable tasks and determining the time required for their completion. By estimating task durations, project managers can effectively plan and organize the project timeline, thereby ensuring that tasks are completed in a logical sequence. 

 

His principles can be summarized as under

A list of tasks

Each task’s start and end dates

Dependencies for each task

The owner of each task

Which team members are carrying out each task?

 

Frank and Lillian Gilbreth

Frank and Lillian Gilbreth were management pioneers known for developing time and motion studies and advancing scientific management by identifying efficient work methods and reducing worker fatigue. They used cinematography to analyze worker movements, breaking tasks into basic components called "therbligs" to find the "one best way" to perform a job.

 

Motion Study

It is systematic analysis of all movements. When all such movements are analysed and tabulated, it is possible to see which of the movements are unnecessary. By eliminating those unnecessary movements, the best method can be determined.

 

Fatigue Study

The purpose of this study is to eliminate unnecessary fatigue. Adequate facilities for rest must be provided to workers. This ensures their cooperation in efficiency studies. Gilbreth's recommendation on the point is: Provide facilities for rest irrespective of the fact whether it is considered to be needed or not. For instance, a comfortable chair reduces strain considerably. A typist's chair if designed properly reduces fatigue and thereby increases output.

 

Skill Study

This study aims at finding out the best method of training workers. Generally an average teacher teaches the usual (average) method normally followed in the trade by a majority of workers. According to Gilbreth this is wrong. The best available teacher should teach the one best method.

 

Time Study

This science answers the question: How much time should be allowed for a given piece of work? It should not be confused with motion study.

 

The One Best Method

In practice a job may be done in several ways. By analysis it is possible to say which is the best method. Perhaps none of these methods can be considered to be the best but it may be possible to evolve the best method by combining different elements from various methods in use.

 

 Administrative Management

  

Henri Fayol’s 14 Principles

Henri Fayol’s groundbreaking contribution to administrative management theory lies in his systematic approach to defining what managers actually do and how organizations should be structured for optimal performance. Unlike his contemporaries who focused primarily on worker productivity or technical processes, Fayol developed the first comprehensive framework that addressed management as a distinct professional discipline with teachable principles and functions

 Fayol’s management theory included 14 key principles:

 

Division of work: Dividing work among employees helps improve productivity, accuracy and efficiency.

 

Authority: Managers have the authority to enforce processes that make employees work as efficiently as possible; they are responsible for their team’s output.

 

Discipline: It is up to managers to discipline workers to ensure compliance and collaboration. 

 

Unity of command: To streamline the chain of command and avoid confusion, employees should answer to only one manager. 

 

Unity of direction: Everyone in an organization should work toward the same goal.

 

Subordination of individual interest: All employees, including managers, should set aside their personal interests and focus solely on the company’s success. 

 

Remuneration of employees: Managers need to reward their employees, monetarily or otherwise, for their efforts. It should be fair and based on performance.

 

Centralization: Management’s authority should be centralized, but decision-making should be divided equally among leaders so no single entity has the autonomy to make decisions unilaterally.

 

Scalar chain: Managers must communicate the leadership hierarchy across the company so everyone knows whom they report to.

 

Order: Maintaining order across the business increases productivity and output. A place for everything & everyone.

 

Equity: All employees should be treated equally and it is managers’ responsibility to protect their teams from discrimination. Justice based on conventions. 

 

Stability: Employees who feel secure in their positions perform better and managers are responsible for providing job security to their teams.

 

Initiative: Managers should encourage employees to be proactive whenever possible. Freedom to think and execute.

 

Esprit de corps: Managers are responsible for motivating their teams and setting a positive, supportive and collaborative tone. Union is strength.

He also talked of planning, organizing, coordinating and control in organization. These were later further developed.

 

 

Bureaucracy

Max Weber

Features of Bureaucracy

A)      Rules and regulations

1.       Fixed formal rules and regulations specifying official duties in a given structure.

2.       Formal positional authority to give commands for discharging duty.

3.       Methodical provision for fulfillment of duties and execution of rights.

 

B)      Hierarchy: Pyramidical structure, power & authority delegation.

C)      Paperwork

D)     Professional Qualifications & Expert training: Recruitment on the basis of qualifications & ability. Promotion on seniority and merit.

E)      Impersonalisation

Functional Aspects / Merits

·         Specialisation

·         Structure

·         Predictability & Stability

·         Rationality – Process of decision making is prescribed.

·         Democracy – Emphasis more on qualifications & competence.

Dysfunctional Aspects

·         Rigidity

·         Impersonality

·         Displacement of objectives

·         Compartmentalization of activities

·         Empire building

·         Red Tape.

 

Neo-Classical Approaches

 

 

Human Relations Movement

 Elton Mayo’s Hawthorne Experiment and It’s Contributions to Management

The term “Hawthorne” is a term used within several behavioral management theories and is originally derived from the western electric company’s large factory complex named Hawthorne works. Starting in 1905 and operating until 1983, Hawthorne works had 45,000 employees and it produced a wide variety of consumer products, including telephone equipment, refrigerators and electric fans. As a result, Hawthorne works is well-known for its enormous output of telephone equipment and most importantly for its industrial experiments and studies carried out.

Hawthorne Experiment by Elton Mayo

In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the Harvard Business School were invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago. The experiment lasted up to 1932. The Hawthorne Experiment brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. Mayo’s idea was that logical factors were far less important than emotional factors in determining productivity efficiency. Furthermore, of all the human factors influencing employee behavior, the most powerful were those emanating from the worker’s participation in social groups. Thus, Mayo concluded that work arrangements in addition to meeting the objective requirements of production must at the same time satisfy the employee’s subjective requirement of social satisfaction at his work place.

The Hawthorne experiment consists of four parts. These parts are briefly described below:-

1.       Illumination Experiment.

2.       Relay Assembly Test Room Experiment.

3.       Interviewing Programme.

4.       Bank Wiring Test Room Experiment.

1. Illumination Experiment:

This experiment was conducted to establish relationship between output and illumination. When the intensity of light was increased, the output also increased. The output showed an upward trend even when the illumination was gradually brought down to the normal level. Therefore, it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity.

 

2. Relay Assembly Test Room Experiment:

This phase aimed at knowing not only the impact of illumination on production but also other factors like length of the working day, rest hours, and other physical conditions. In this experiment, a small homogeneous work-group of six girls was constituted. These girls were friendly to each other and were asked to work in a very informal atmosphere under the supervision of a researcher. Productivity and morale increased considerably during the period of the experiment. Productivity went on increasing and stabilized at a high level even when all the improvements were taken away and the pre-test conditions were reintroduced. The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity.

 

3. Mass Interview Programme:

The objective of this programme was to make a systematic study of the employees attitudes which would reveal the meaning which their “working situation” has for them. The researchers interviewed a large number of workers with regard to their opinions on work, working conditions and supervision. Initially, a direct approach was used whereby interviews asked questions considered important by managers and researchers. The researchers observed that the replies of the workmen were guarded. Therefore, this approach was replaced by an indirect technique, where the interviewer simply listened to what the workmen had to say. The findings confirmed the importance of social factors at work in the total work environment.

 

4. Bank Wiring Test Room Experiment:

This experiment was conducted by Roethlisberger and Dickson with a view to develop a new method of observation and obtaining more exact information about social groups within a company and also finding out the causes which restrict output. The experiment was conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers. After the experiment, the production records of this group were compared with their earlier production records. It was observed that the group evolved its own production norms for each individual worker, which was made lower than those set by the management. Because of this, workers would produce only that much, thereby defeating the incentive system. Those workers who tried to produce more than the group norms were isolated, harassed or punished by the group. The findings of the study are:-

·         Each individual was restricting output.

·         The group had its own “unofficial” standards of performance.

·         Individual output remained fairly constant over a period of time.

·         Informal groups play an important role in the working of an organization.

Contributions of the Hawthorne Experiment to Management

Elton Mayo and his associates conducted their studies in the Hawthorne plant of the western electrical company, U.S.A., between 1927 and 1930. According to them, behavioral science methods have many areas of application in management. The important features of the Hawthorne Experiment are:

1.       A business organization is basically a social system. It is not just a techno-economic system.

2.     The employer can be motivated by psychological and social wants because his behavior is also influenced by feelings, emotions and attitudes. Thus economic incentives are not the only method to motivate people.

3.      Management must learn to develop co-operative attitudes and not rely merely on command.

4.  Participation becomes an important instrument in human relations movement. In order to achieve participation, effective two-way communication network is essential.

5.  Productivity is linked with employee satisfaction in any business organization. Therefore management must take greater interest in employee satisfaction.

6.   Group psychology plays an important role in any business organization. We must therefore rely more on informal group effort.

7.     The neo-classical theory emphasizes that man is a living machine and he is far more important than the inanimate machine. Hence, the key to higher productivity lies in employee morale. High morale results in higher output.

Behavioral Science Approach

Many behavioral scientists like Douglas Mc Gregor, A. Maslo Chester Bernard, Mary Parker Follet, Rensis Likert contributed towards it.