UNIT 2

Evolution of Management:

Management thought has a long history. It is as old as human civilization itself. Management
in one form or the other has been a significant feature of economic life of mankind
throughout ages. Management thought is an evolutionary concept. It has develop along with
and in line with the growth of social, political, economic and scientific institutions.
Management thought has its origin in the ancient times. It developed gradually along with
other socioeconomic developments. The contributor‘s to management though are many. They
include Management philosophers, management practitioners and scholars. Modem
management is based on the solid foundations laid down by management thinkers from the
early historical period.

PRE SCIENTIFIC MANAGEMENT ERA:

1. Robert Owen (1771- 1858) :He advocated that workers should be treated as human
beings, he has taken efforts to improve working conditions in the factory reduce working
hours, increase minimum wages, provide meals to employees, allocate education provision ,
housing and other labor welfare facilities. His main contribution is that the effective and good
personnel management was essential part of manager’s job since it pays dividends to the
employer.

2. Charles Babbage (1792-1872): He was a professor of math’s of Cambridge

university from 1828to 1839. He has suggested aspects like division of labour, work
measurement, profit sharing and engineering to improve the efficiency of management. He
has invented mechanical calculators which were called as “differential machine”. He has
emphasized in improving efficiency through the application of math’s and science in the
operation of factories.

3. Charles Dupin (1784-1873): He has emphasized systematic education in

management.He was French engineer and formally tried to structure the subject matter of
management. These early contributors focused attention on managerial problems.

They have not presented any unified theory of management.

Systematic and scientific study of management started after 1880. Due to the creation of joint
stock corporate organizational set up.
MANAGEMENT THEORIES

I Classical Theories

•Taylor’s Scientific Management theory

•Fayol’s Administrative theory

•Weber’s bureaucracy theory

II Behavioural theories

•Human Relations theory

•Behavioural Science theory

III Modern Management theories

•Quantitative theory

•Systems theory

•Contingency theory

CLASSICAL THEORIES

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.
CONTRIBUTION OF F.W.TAYLOR TO MANAGEMENT THOUGHT

F.W. Taylor (1865-1915) 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’. That is why, Taylor is regarded as the
father of scientific management. Taylor was an American engineer who responded to the
challenges of management around the turn of the century. During that period, productivity
was very low, labour became extremely dissatisfied and industries had to face frequent strikes
and lockouts. Taylor’s contribution was a system based on science whereby lower labour cost
could be achieved simultaneously with higher wages. He suggested the change in the mental
attitudes of the workers and the management to bring harmony in the industry.

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. It is to be noted that Taylor’s thinking was confined to management at the
shop level. However, he demonstrated the possibility and significance of the scientific
analysis of the various aspects of management.

ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

Separation of planning & doing: Taylor emphasized the separation of planning aspect from
actual doing of the work. In other words planning should be left to the supervisor and the
worker should concentrate only operational work.

Functional foremanship: Taylor introduced the concept of functional foremanship based on

specialization of functions. In this system, eight persons are involved to direct the activities of
workers. Out of these four persons are concerned with planning viz., route clerk, instruction
card clerk, time and cost clerk and disciplinarian. The remaining four persons are concerned
with doing aspect of the job, viz., speed boss, inspector, gang boss and maintenance foreman.
It is against to the principle of unity of command.

 Route clerk: his job is to determine the sequence of operations to be performed in

any work.
  Instruction card clerk: he will prepare the necessary instructions pertaining to the
work and accordingly the workers will perform their duties.
 Time and Cost Clerk: he will frame the timetable for doing the various jobs. He will
also keep the necessary cost records.

The persons who will work in the factory are as follows.

 Gang Boss: his duty is to keep all the materials and tools ready so that the
workers can start their work without any delay.
 Speed boss: he will ensure that each job is done well in time
 Repair Boss: he will keep all the tools and machines in the factory in perfect
condition.
 Inspector: his duty is to ensure that the work is done in accordance with standard
laid down by the planning department.
 Disciplinarian: to coordinate the work of all the seven persons mentioned above.

Job Analysis: It is useful to find out the one best way of doing the things. The best way of
doing a job is one which requires the least movements, consequently less time and cost. The
best way of doing the thing can be determined by taking up time –motion - fatigue studies.

Time study involves the determination of time a movement takes to complete.

 Motion study: Involves the study of movements in parts which are involved in doing
a job and thereby eliminating the wasteful movements.

 Fatigue study: shows the amount and frequency of rest required in completing the
work. Thus, job analysis identifies the fair amount of a day’s work requiring certain
movements and rest periods to complete it.

Standardization: As far as possible, standardization should be maintained in respect of

instruments and tools, period of work, amount of work, working conditions, cost of
production etc.,. These things should be fixed in advance on the basis of job analysis and
various elements of costs that in performing a work.
Scientific Selection and Training of Workers: A worker should be given work for which he
is physically and technically most suitable like, education, work experience, aptitude,
physical strength etc.

Financial Incentives: Financial incentives can motivate workers to put in their maximum
efforts. If provisions exist to earn higher wages by putting in extra effort, workers will be
motivated to earn more.

Economy: The economy and profit can be achieved by making the resources more
productive as well as by eliminating the wastages.

Mental Revolution: Scientific management depends on the mutual co-operation between

management and workers. For this co-operation, there should be mental change in both
parties from conflict to co-operation

PRINCIPLES OF SCIENTIFIC MANAGEMENT:

Replacing rule of thumb with Science: scientific management requires scientific study and
analysis of each element of a job in order to replace the old rule of thumb method. Decisions
should be made on the basis of facts rather than opinions and beliefs. Ex. a school admission.

Harmony in group action: Scientific management enables efficient workers to earn more as
payment is linked to output. As the management is also benefited as a result of increased
output, there exists harmonies relationship between the workers and the management.

Cooperation: Management can expect higher profits only if the workers work with
maximum efficiency than the management comes forward recognizes their efficiency and
reward them.

Maximum Output: More output enables the workers to earn more remuneration this both
the management and the workers are interested in maximizing protection under scientific
management.

Development of workers: The workers should be selected and trained in accordance with
the requirements of the jobs. Placement of workers will be done based on their capacities.
Training enables the workers to perform their duties with maximum efficiency.
HENRY FAYOL (1841-1925) GENERAL PRINCIPLES OF MANAGEMENT

1.Division of work: The total work to be done is divided into small parts, each entrusted to a
particular individual. As each individual performs only a particular activity, he becomes
specialist in due course.

2.Authority and Responsibility: Authority is the official right of the manager. It comes to
him by virtue of his official position. Responsibility is the duty on the part of a subordinate to
account for the work done by him.

3.Discipline: Fayol says that employees must follow the discipline by being obedient, by
applying themselves fully in the task undertaken by being energetic and leader must be
efficient to enforce discipline.

4.Unity of Command: An employee should receive orders from one superior only and is
accountable to him alone. If there are two superiors for an employee he will not know whom
he should report to and whose orders he should carry out first.

5.Unity of direction: Each group of activities having the same objective should have one
head and one plan, the efforts of all the members of departments must be directed towards the
attainment of that departmental target.

6.Subordination of Individual interest to common interest: The interest of the individual

is should be based on common interest. This should be maintained by constant supervision
and fair agreement.

7.Remuneration of Personnel: Remuneration payable to the employees should be fair and

should give maximum satisfaction to both the employees and the employers. It should be
based on cost of living, financial position of the company etc.

8.Centralization: The authority at a particular place is centralization and dispersal of

authority in different places of the organization is known as decentralization. It is based on
the size of the organization.,

9.Scalar chain: it is chain of superiors ranging from the highest to the lowest level in the
organization. Every communication should follow the prescribed line of authority.
10.Order: Two types to order, material order and social order. Material order means
everything in its place, in order to avoid loss of material. Social order means the selection of
the right man for the right job.

11.Equity: It ensures fairness, kindness and justice in the treatment of employees by their
managers. The managers shall be impartial in their dealings with their subordinates.

12.Stability of Tenure of Personnel: It means that an employee shall not be shifted

unnecessarily from one job to another. An employee should be given enough opportunity to
learn every aspect of his work only then he will become an expert in his time of work.

13.Initiative: According to him the freedom to think and act is what initiative is. An
employee who has the freedom to think and act in an organization will show greater interest
in his work and this will lead to a higher level of job satisfaction.

14.Espirit De Corps: Union is strength, team spirit and co-operation among the members of
an organization are essential for its success.

Contributions of Frank & Lillian Gilbreth

•Frank Gilbreth (1868-1924) is considered as the “Father of Motion Study”.

•Motion study involves finding out the best sequence & minimum number of motions needed
to complete a task.

•Both were mainly involved in exploring new ways for eliminating unnecessary motions &
reducing work fatigue.

•Gilbreths devised classification scheme to label 17 basic hand motions of workers such as
“search, select, position & hold” called as “therbligs”.

•Frank Gilbreth is best known for his experiment in reducing the number of motions in
bricklaying.

•By analyzing brick layers job, he reduced the number of motions in bricklaying from 18.5 to
4.
•Workers increased the number of bricks laid per day from 1000 to 2700 (per hr from 120 to
350 bricks).

MAX WEBER BUREAUCRACY THEORY

Max Weber (1864-1920), a German sociologist introduced the rational-legal authority system
to manage the business organizations. His model is characterized by

1.Division of work: There is a high degree of specialization or division of labor in a

bureaucratic organization. Tasks are divided into very specialized jobs and each member
performs his specialized function in a predictable manner.

2. Rules and Regulations: The rules, regulations and procedures are clearly laid down by the
top administration. Their benefits are as under-

•They standardized operations and decisions

•They serve as receptacles of past learning

•They protect incumbents and ensure the quality of treatment

3.Hierarchy of Authority: There is a hierarchy of authority in the organization. Each lower

position is under the control of a higher one. Thus, there is a unity of command.

4.Technical Competence: Selection and promotion of jobholders are based on their technical
competence. Qualifications are prescribed for each job/position. Special training is given to
provide knowledge of rules and administrative processes.

5.Record Keeping: Every decision and action is recorded in a wide array of written
documents and preserved in its original as well as draft form. The official records serve as the
memory of the organization and make it independent of the individuals.
6.Impersonal Relations: A notable feature of bureaucracy is that relationships among
individuals are governed through the system of official authority and rules. Official positions
are free from personal involvement, emotions, and sentiments. Thus, decisions are governed
by rational factors rather than personal factors. This impersonality concept is used in dealing
with organizational relations as well as relations between organizations and outsiders.

According to Weber, there are three types of legitimate authority in organizations:

Traditional
Rational Legal Authority Charismatic Authority
Authority
This type of authority is
It means the authority which a
vested in a legally
person acquires because he people obey a person due to
established position or rank
belongs to a particular class or their belief that the person has
within the organization’s
occupies a position that by some special power or appeal.
hierarchy, e.g., chief
tradition possesses authority
executive of a company
e.g., member of a royal family.

BEHAVIOURAL THEORY

These theories focus on organizational goals along with satisfaction of human needs. Shift in
focus from workplace conditions to human side of the organization People- oriented approach
substituted the production oriented approach

Two important theories:

•Human relations theory

•Behavioural science theory

HUMAN RELATIONS THEORY

ELTON MAYO: HAWTHRONE EXPERIMENTS

The Hawthorne experiments were conducted in four stages. These are given below:

1.Illumination Experiments: the main objective of the illumination experiments was to

study the effect of the quality of lighting in the workroom on the efficiency of the workers.
For this purpose the workers were divided into two groups. One group of workers was made
to work in a room where lighting remained constant. The other group was made to work in a
room where lighting was varied. The experiments revealed the production increased in both
the rooms and therefore the quality of lighting had no impact on the efficiency level of the
workers.

2.Relay Assembly Test room experiments – these experiments were conducted in an

assembly department where telephone relay units were assembled. The object of the
experiments was to ascertain the relationship between working conditions and productivity.
Those employed in the department were all women and the work was repetitive one. A group
of six women workers was made to take in a separate room. As they were doing their work a
series of changes were introduced during the period of investigation. A new financial
incentive plan was introduced to the group that assured additional remuneration for an each
worker depending on the collective performance of the group. The rest periods during week
were also gradually increased. The workers were also permitted to leave an hour earlier. They
were also given one full day holiday (on Saturdays). The study revealed that output of each
individual and also that of the group increased due to the changes introduced.

3.Interview program: A massive interview programmed was conducted covering more than
ten thousand workers to find out their views on their jobs, working conditions , supervision
etc. the interview programmed revealed that the morale of the workers improved as they had
the satisfaction that their views were heard. The complaints of the workers were not objective
statements of facts. They were reflections of a workers personal feelings and sentiments.

4.Bank wiring Group observations- The main aim of the study here is to find out the
influence of the group on a worker to restrict his output in spite of the existence of incentives
for higher output. The working conditions were not altered for the sake of the investigation.
The group consisted of fourteen workers and its task was to attach wires to the telephone
equipment, soldering and to check the quality of work. The incentives given for the work
were attractive. But neither an individual worker not he group as a whole made an attempt to
increase output. The group also did not let any worker exceed his output.
Findings of Hawthorne Experiments:

The following are the findings of the Hawthorne Experiments,

1. A social factors such as recognition, sense of belongings etc, influence production more
than physical factors.

2. Monetary incentives do not induce a worker, working in a group to increase output. He

cares more for the friendship and respect of his co-workers.

3. Workers do not react as individuals but as members of a group. No workers want to incur
the ill will or displeasure of his co – workers.

4. An individual in a group is a accepted as its leader by the other members. Such an informal
leader is able to guide and influence the co-workers.

5. What encourages worker more is the feeling that his views and suggestions are heard by
the management.

Contributions of Mary Parker Follett

Mary Parker Follett, writer, social worker, political theorist and organizational consultant, has
been called "the woman who invented management." Her early influence on modern
management theory has, in fact, been so pervasive that management theorist Warren Bennis
has been quoted as saying of her, "Just about everything written today about leadership and
organizations comes from Mary Parker Follett's writings and lectures."

Follett never managed a for-profit enterprise herself, yet her keen insight into the dynamics of
organizations and groups gave her theories widespread appeal. She advocated a "pull" rather
than "push" approach to employee motivation, differentiated between "power over" and
"power with," and postulated insightful ideas on negotiation, conflict resolution and power
sharing which helped shape modern management theory. The Mary Parker Follett Theory of
Management is marked by such principles as the following:
1.Conflict resolution through Integration (i.e., identifying and meeting each party's
underlying and often compatible need, as opposed to attempting to meet the frequently-
incompatible expressed desire of each) often results in a win-win situation.

2.In Mary Parker Follett leadership theory, genuine power is not "coercive" ("power over")
but "coactive" ("power with").

3.True leaders, according to Follett's theory, "create group power, rather than expressing
personal power."

Maslow's hierarchy of needs

Maslow's hierarchy of needs is a motivational theory in psychology comprising a five-tier

model of human needs, often depicted as hierarchical levels within a pyramid. From the
bottom of the hierarchy upwards, the needs are: physiological, safety, love, esteem, and self-
actualization.

The original hierarchy of needs five-stage model includes:

Maslow (1943, 1954) stated that people are motivated to achieve certain needs and that some
needs take precedence over others.

Our most basic need is for physical survival, and this will be the first thing that motivates our
behavior. Once that level is fulfilled the next level up is what motivates us, and so on.

1.Physiological needs - These are biological requirements for human survival, e.g. air, food,
drink, shelter, clothing, warmth, sex, sleep .If these needs are not satisfied the human body
cannot function optimally. Maslow considered physiological needs the most important as all
the other needs become secondary until these needs are met.

2.Safety needs - Once an individual’s physiological needs are satisfied, the needs for security
and safety become salient. People want to experience order, predictability and control in their
lives. These needs can be fulfilled by the family and society (e.g. police, schools, business
and medical care).
For example, emotional security, financial security (e.g. employment, social welfare), law
and order, freedom from fear, social stability, property, health and wellbeing (e.g. safety
against accidents and injury).

3.Love and belongingness needs - After physiological and safety needs have been fulfilled,
the third level of human needs is social and involves feelings of belongingness. The need for
interpersonal relationships motivates behavior

Examples include friendship, intimacy, trust, and acceptance, receiving and giving affection
and love. Affiliating, being part of a group (family, friends, work).

4.Esteem needs: Are the fourth level in Maslow’s hierarchy which Maslow classified into
two categories: (i) esteem for oneself (dignity, achievement, mastery, independence) and (ii)
the desire for reputation or respect from others (e.g., status, prestige).

Maslow indicated that the need for respect or reputation is most important for children and
adolescents and precedes real self-esteem or dignity.

5.Self-actualization:Needs are the highest level in Maslow's hierarchy, and refer to the
realization of a person's potential, self-fulfillment, seeking personal growth and peak
experiences. Maslow (1943)describes this level as the desire to accomplish everything that
one can, to become the most that one can be.

McGregor Theory X and Theory Y

McGregor believed that managers' basic beliefs have a dominant influence on the way that
organizations are run. Managers' assumptions about the behavior of people are central to this.
McGregor argued that these assumptions fall into two broad categories - Theory X and
Theory Y. These findings were detailed in The Human Side of Enterprise, first published in
1960. Theory X and Theory Y describe two views of people at work and may be used to
describe two opposing management styles. Theory X: the traditional view of direction and
control Theory X is based on the assumptions that:

1.The average human being has an inherent dislike of work and will avoid it if possible.
2.Because of this human dislike of work, most people must be coerced, controlled, directed,
and threatened with punishment to get them to put forth adequate effort toward the
achievement of organizational objectives.

3.The average human being prefers to be directed, wishes to avoid responsibility, has
relatively little ambition, and wants security above all.

A Theory X management style therefore requires close, firm supervision with clearly
specified tasks and the threat of punishment or the promise of greater pay as motivating
factors. A manager working under these assumptions will employ autocratic controls which
can lead to mistrust and resentment from those they manage. McGregor acknowledges that
the `carrot and stick' approach can have a place, but will not work when the needs of people
are predominantly social and egoistic. Ultimately, the assumption that a manager’s All rights
reserved. No part of this publication may be reproduced in a retrieval system, or transmitted,
in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior permission of the publisher. objective is to persuade people to be docile, to
do what they are told in exchange for reward or escape from punishment, is presented as
flawed and in need of re-evaluation.

Theory Y: The integration of individual and organizational goals Theory Y is based on the
assumptions that:

1.The expenditure of physical and mental effort in work is as natural as play or rest. The
average human being does not inherently dislike work. Depending upon controllable
conditions, work may be a source of satisfaction, or a source of punishment.

2.External control and the threat of punishment are not the only means for bringing about
effort toward organizational objectives. People will exercise self-direction and self-control in
the service of objectives to which they are committed.

3.Commitment to objectives is a function of the rewards associated with their achievement.

The most significant of such rewards, e.g. the satisfaction of ego and self-actualisation needs,
can be direct products of effort directed towards organisational objectives.

4.The average human being learns, under proper conditions, not only to accept but to seek
responsibility. Avoidance of responsibility, lack of ambition, and emphasis on security are
generally consequences of experience, not inherent human characteristics.
5.The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in
the solution of organizational problems is widely, not narrowly, distributed in the population.

6.Under the conditions of modern industrial life, the intellectual potentialities of the average
human being are only partially utilized. Theory Y assumptions can lead to more cooperative
relationships between managers and workers. A Theory Y management style seeks to
establish a working environment in which the personal needs and objectives of individuals
can relate to, and harmonise with, the objectives of the organization.

In The Human Side of Enterprise McGregor recognized that Theory Y was not a panacea for
all ills. By highlighting Theory Y, he hoped instead to persuade managers to abandon the
limiting assumptions of Theory X and consider using the techniques suggested by Theory Y.

BEHAVIOURAL SCIENCE THEORY

The behavioral approach is multi-dimensional and inter-disciplinary in nature. Under it, the
knowledge is drawn from behavioral sciences, e.g. psychology, sociology, anthropology, etc
is applied to understand, explain and predict human behavior. Therefore, this approach is also
known as the Behavioral Science Approach.

Under the behavioral science approach, the knowledge drawn from behavioral sciences is
applied to explain and predict human behavior. It focuses on human behavior in the
organization. It lays emphasis on the study of motivation, leadership, communication, group
dynamics, participative management, etc.

Further, the behavioral scientists made the following propositions:

a) An organization is a socio-technical system.

b) Individuals differ with regard to attitudes, perceptions and value systems. As a result, they
behave differently to different stimuli under different conditions.
c) People working in the organization have their needs and goals which may differ from
organizational goals. Attempts should be made to achieve fusion between organisational
goals and human needs.

d) A wide range of factors influences inter-personal and group behaviour of people in

organizations.

The main features of the Behavioral Science Approach are as follows:

•Behavioral science is an inter-disciplinary approach and integrates the knowledge drawn

from different disciplines (psychology, sociology, anthropology, economics, political science
and history) for the study of human behavior

•It is an applied science with the objective to apply various researches to solve organizational
problems

•It is also a normative science which not only suggests cause and effect relationships but also
prescribes ways and means to solve organizational problems and effects results

•It focuses attention on people from a humanistic point of view. It accepts the value of an
individual as thinking, feeling and living organism and his needs and motivations play
important role in determining his behavior in the organization

•It is goal-oriented. It recognizes goal conflicts in the organization and suggests reconciliation
of goals of the individuals and the organization for a better organization climate and greater
organizational effectiveness

•It adopts a systems approach which takes into account all the factors affecting organizational
behavior

The sum up, the behavioral science approach gives emphasis on increasing productivity
through motivation and leadership. The central core of this approach lies in the following
aspects of human behavior:

- Motivation, leadership. Communication, participative management and group dynamics

The behavioral sciences have provided managers with a systematized understanding of one of
the most critical factors in the process of management – the human element. Insights
evolving from that understanding have been used to design work situations that encourage
and increase the productivity of employees.

Comparison between Human Relations and Behavioral Approach

Point of Comparison Human Relations Behavioral Approach

Focus on the individual, his needs Focus on groups and group
Focus and behavior, highlights inter- behavior, Highlights group
personal relationships relationships
Based on Hawthorne Based on human relations
Basis
Experiments movement
Group dynamic, informal
Motivation, morale and job
Key Concepts organization and motivation
satisfaction
through job enrichment
Conflicts is not only
Conflict in organizations is
View of Conflict inevitable but may even be
always destructive and can
beneficial, cannot always be
always be minimized
resolved
Broadband and multiple
Modest concerns limited to
concepts such as the impact
improving working conditions,
Concerns of technology on jobs, jobs
interpersonal relations,
redesign, group dynamics,
supervisory styles, and
motivation, leadership and
communication systems for
organizational development
increasing job satisfaction and
morale
Pioneers Pioneered by McGregor,
Pioneered by Elton Mayo and
Likert, etc.
his associates
Recognizes differences
People are considered alike
Treatment of People among individuals
without regard to differences
 in their needs, beliefs, attitudes
and perception
Perspective of Organization Considers organization a
Considers organization a social
socio- technical system
system with a culture of its
own
Scope Wide
Narrow

MODERN MANAGEMENT THEORY

The Modern Period (1960 to present). After, 1960 management thought has been turning
somewhat away from the extreme human relations ideas particularly regarding the direct
relation between morale and productivity. Present management thinking wishes equal
emphasis on man and machine.

The modern business ideologists have recognized the social responsibilities of business
activities and thinking on similar lines. During the period, the principles of management
reached a stage of refinement and perfection. The formation of big companies resulted in the
separation of ownership and management.

This change in ownership pattern inevitably brought in ‘salaried and professional managers’
in place of ‘owner managers’. The giving of control to the hired management resulted in the
wider use of scientific methods of management. But at the same time the professional
management has become socially responsible to various sections of society such as
customers, shareholders, suppliers, employees, trade unions and other Government agencies.

Under modern management thought three streams of thinking have beers noticed since 1960:

(i)Quantitative or Mathematical Approach

(ii)Systems Approach.

(iii)Contingency Approach.

(I)Quantitative or Mathematical Approach or Management Science Approach:

Mathematics has made inroads into all disciplines. It has been universally recognised as an
important tool of analysis and a language for precise expression of concept and relationship.

Evolving from the Decision Theory School, the Mathematical School gives a quantitative
basis for decision-making and considers management as a system of mathematical models
and processes. This school is also sometimes called, ‘ Operations Research” or “Management
Science School’. The main feature of this school is the use of mixed teams of scientists from
several disciplines. It uses scientific techniques for providing quantitative base for managerial
decisions. The exponents of this school view management as a system of logical process.

It can be expressed in terms of mathematical symbols and relationships or models. Different

mathematical and quantitative techniques or tools, such as linear programming, simulation
and queuing, are being increasingly used in almost all the areas of management for studying a
wide range of problems.

The exponents of this school believe that all the phases of management can be expressed in
quantitative terms for analysis. However, it is to be noted that mathematical models do help
in the systematic analysis of problems, but models are no substitute for sound judgement.

Moreover, mathematics quantitative techniques provide tools for analysis but they cannot be
treated an independent system of management thought. A lot of mathematics is used in the
field of physical sciences and engineering but mathematics has never been considered as
separate school even in these fields.

The contributions of mathematicians in the field of management are significant. This has
contributed impressively in developing orderly thinking amongst managers. It has given
exactness to the management discipline. Its contributions and usefulness could hardly be
over-emphasized. However, it can only be treated as a tool in managerial practice.

Limitations:

There is no doubt that this approach helps in defining and solving complex problems
resulting in orderly thinking. But the critics of this approach regard it as too narrow since it is
concerned merely with the development of mathematical models and solutions for certain
managerial problems.

This approach suffers from the following drawbacks:

(i)This approach does not give any weight age to human element which plays a dominant role
in all organizations.

(ii) In actual life executives have to take decisions quickly without waiting for full
information to develop models.

(iii)The various mathematical tools help in decision making. But decision making is one part
of managerial activities. Management has many other functions than decision-making.

(iv) This approach supposes that all variables to decision-making are measurable and inter-
dependent. This assumption is not realistic.

(v) Sometimes, the information available in the business for developing mathematical models
are not upto date and may lead to wrong decision-making.

Harold Knootz. Also observes that “it is too hard to see mathematics as a separate approach
to management theory. Mathematics is a tool rather than a school.”

(ii) Systems Approach:

In the 1960, an approach to management appeared which tried to unify the prior schools of
thought. This approach is commonly known as ‘Systems Approach’. Its early contributors
include Ludwing Von Bertalanffy, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert
L. Kahn, W. Buckley and J.D. Thompson.

They viewed organization as an organic and open system, which is composed of interacting
and interdependent parts, called subsystems. The system approach is to look upon
management as a system or as “an organised whole” made up of subsystems integrated into a
unity or orderly totality.

System approach is based on the generalization that everything is inter-related and inter-
dependent. A system is composed of related and dependent element which, when in
interaction, forms a unitary whole. A system is simply an assemblage or combination of
things or parts forming a complex whole.

One of its most important characteristic is that it is composed of hierarchy of sub-systems.

That is the parts forming the major systems and so on. For example, the world can be
considered to be a system in which various national economies are sub-systems.
In turn, each national economy is composed of its various industries, each industry is
composed of firms; and of course, a firm can be considered a system composed of sub-
systems such as production, marketing, finance, accounting and so on.

The basic features of systems approach are as under:

(i)A system consists of interacting elements. It is set of inter related and interdependent parts
arranged in a manner that produces a unified whole.

(ii)The various sub-systems should be studied in their inter- relationships rather, than in
isolation from each other.

(iii)An organizational system has a boundary that determines which parts are internal and
which are external.

(iv)A system does not exist in a vacuum. It receives information, material and energy from
other systems as inputs. These inputs undergo a transformation process within the system and
leave the system as output to other systems.

(v)An organization is a dynamic system as it is responsive to its environment. It is vulnerable

to change in its environment.

In the systems approach, attention is paid towards the overall effectiveness of the system
rather than the effectiveness of the sub-systems. The interdependence of the sub-systems is
taken into account. The idea of systems can be applied at an organizational level. In applying
system concepts, organizations are taken into account and not only the objectives and
performances of different departments (sub- systems).

The systems approach is considered both general and specialized systems. The general
systems approach to management is mainly concerned with formal organizations and the
concepts are relating to technique of sociology, psychology and philosophy. The specific
management system includes the analysis of organizational structure, information, planning
and control mechanism and job design, etc.

As discussed earlier, system approach has immense possibilities, “A system view point may
provide the impetus to unify management theory. By definitions, it could treat the various
approaches such as the process of quantitative and behavioral ones as sub-systems 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 of jungle. ”

Systems theory is useful to management because it aims at achieving the objectives and it
views organization as an open system. Chester Barnard was the first person to utilize the
systems approach in the field of management.

He feels that the executive must steer through by keeping a balance between conflicting
forces and events. A high order of responsible leadership makes the executives effective. H.
Simon viewed organization as a complex system of decision making process.

Evaluation of System Approach:

The systems approach assists in studying the functions of complex organizations and has
been utilized as the base for the new kinds of organizations like project management
organization. It is possible to bring out the inter-relations in various functions like planning,
organizing, directing and controlling. This approach has an edge over the other approaches
because it is very close to reality. This approach is called abstract and vague. It cannot be
easily applied to large and complex organizations. Moreover, it does not provide any tool and
technique for managers.

(iii) Contingency or Situational Approach:

The contingency approach is the latest approach to the existing management approaches.
During the 1970’s, contingency theory was developed by J.W. Lorsch and P.R. Lawrence,
who were critical of other approaches presupposing one best way to manage. Management
problems are different under different situations and require to be tackled as per the demand
of the situation.

One best way of doing may be useful for repetitive things but not for managerial problems.
The contingency theory aims at integrating theory with practice in systems framework. The
behavior of an organization is said to be contingent on forces of environment. “Hence, a
contingency approach is an approach, where behavior of one sub-unit is dependent on its
environment and relationship to other units or sub-units that have some control over the
sequences desired by that sub- unit.”
Thus behavior within an organization is contingent on environment, and if a manager wants
to change the behavior of any part of the organization, he must try to change the situation
influencing it. Tosi and Hammer tell that organization system is not a matter of managerial
choice, but contingent upon its external environment.

Contingency approach is an improvement over the systems approach. The interactions

between the sub-systems of an organization have long been recognized by the systems
approach. Contingency approach also recognizes that organizational system is the product of
the interaction of the sub systems and the environment. Besides, it seeks to identify exact
nature of inter-actions and inter-relationships.

This approach calls for an identification of the internal and external variables that critically
influence managerial revolution and organizational performance. According to this, internal
and external environment of the organization is made up of the organizational sub-systems.
Thus, the contingency approach provides a pragmatic method of analyzing organizational
sub-systems and tries to integrate these with the environment.

Contingency views are ultimately directed towards suggesting organizational designs

situations. Therefore, this approach is also called situational approach. This approach helps us
to evolve practical answers to the problems remanding solutions.

Kast and Rosenzweig give a broader view of the contingency approach. They say, “The
contingency view seeks to understand the inter-relationships within and among sub-systems
as well as between the organization and its environment and to define patterns of
relationships or configurations of variables contingency views are ultimately directed toward
suggesting organization designs and managerial actions most appropriate for specific
situations.

Features of Contingency Approach:

Firstly, the contingency approach does not accept the universality of management theory. It
stresses that there is no one best way of doing things. Management is situation, and managers
should explain objectives, design organizations and prepare strategies, policies and plans
according to prevailing circumstances. Secondly, managerial policies and practices to be
effective, must adjust to changes in environment.
Thirdly, it should improve diagnostic skills so as to anticipate and ready for environmental
changes. Fourthly, managers should have sufficient human relations skill to accommodate
and stabilize change.

Finally, it should apply the contingency model in designing the organization, developing its
information and communication system, following proper leadership styles and preparing
suitable objectives, policies, strategies, programmes and practices. Thus, contingency
approach looks to hold a great deal of promise for the future development of management
theory and practice.

Evaluation:

This approach takes a realistic view in management and organization. It discards the
universal validity of principles. Executives are advised to be situation oriented and not stereo-
typed. So executives become innovative and creative.

On the other hands, this approach does not have theoretical base. An executive is expected to
know all the alternative courses of action before taking action in a situation which is not
always feasible.

Operational Approach

Koontz, O’Donnell and Weihrich have advocated the operational approach to management.
This approach recognizes that there is a central core of knowledge about managing which
exists in management such as line and staff, patterns of departmentation, span of
management, managerial appraisal and various managerial control techniques.

Operational approach to management regards management as a universally applicable body

of knowledge that can be brought to bear at all levels of managing and in all types of
enterprises. At the same time, the approach recognizes that the actual problems managers
face and the environments in which they operate may vary between enterprises and levels. It
also recognizes that application of science by perceptive practitioner must take this into
account in designing practical problem solutions.
The operational approach to management is based largely on the following fundamental
beliefs that:

1.Management is an operational process initially best dissected by analyzing the management

functions.

2.If the knowledge of management is to be presented effectively, clear concepts are

necessary.

3.Experience with managing in a variety of situations can furnish grounds for distillation of
basic truths-theory and principles-which have a clarifying and predictive value in
understanding and improving practice.

4.Principles of management can become the focal points for useful research both to ascertain
their validity and to improve their applicability.

5.Managing is an art (like medicine and engineering). It should rely on underlying science-
concepts, theory and principles and techniques.

6.While the total culture and the physical and biological universe variously affect the
manger’s environment, as they do in every other field of science and art, management science
and theory need not encompass all knowledge in order to serve as a useful foundation of
management practice.

Peter Drucker Contribution to Management:

Some of the major contributions of Peter Drucker are as follows:

1. Nature of Management

2. Management Functions

3. Organisation Structure

4. Federalism

5. Management by Objectives

6. Organizational Changes.

1. Nature of Management:
Drucker is against bureaucratic management and has emphasized management with creative
and innovative characteristics. The basic objective of management is to read towards
innovation. The concept of innovation is quite broad. It may include development of new
ideas, combining of old and new ideas, adaptation of ideas from other fields or even to act as
a catalyst and encouraging others to carry out innovation.

He has treated management as a discipline as well as profession. As a discipline, management

has its own tools, skills, techniques and approaches.

While taking management as a profession. Drucker does not advocate to treat management as
a strict profession but only a liberal profession which places more emphasis that managers
should not only have skills and techniques but should have right perspective putting the
things into practice. They should be good practitioners so that they can understand the social
and cultural requirements of various organizations and countries.

Management Meaning:

Management is the process of planning, organizing, directing, and controlling resources

(human, financial, and physical) to achieve organizational goals effectively and efficiently.

Levels of Management:

Top-Level Management: Responsible for strategic decisions and goal-setting for the entire
organization.

Middle-Level Management: Implements the policies set by top management and coordinates
activities within departments.

Front-Line Management: Directly supervises employees and ensures day-to-day operations

run smoothly.

Characteristics of Management:

Goal-oriented: Focuses on achieving specific objectives.

Dynamic: Adapts to changes in the internal and external environment.

Continuous process: Involves ongoing activities rather than one-time actions.

Involves Decision-Making: Managers make choices to achieve organizational goals.

Multidisciplinary: Utilizes knowledge from various fields like economics, psychology, and
sociology.

Efficiency and Effectiveness: Aims to accomplish goals with optimal resource use.

Interpersonal Relations: Involves working with and through people to achieve objectives.

Intangible: Results are often not directly measurable.

Universal Application: Applicable to all types and sizes of organizations.

Authority and Responsibility: Managers have the authority to make decisions and the
responsibility for the outcomes.

Functions of Management:

Planning: Setting goals, defining strategies, and outlining tasks.

Organizing: Structuring resources and tasks to achieve objectives.

Staffing: Recruiting, training, and developing the workforce.

Directing: Leading and motivating employees to achieve organizational goals.

Coordinating: Ensuring harmonious interplay among various departments.

Reporting: Communicating information both inside and outside the organization.

Budgeting: Allocating resources to various activities.

Controlling: Monitoring performance and taking corrective actions.

Decision-making: Choosing among alternative courses of action.

Innovating: Introducing new ideas and methods to improve efficiency and effectiveness.

2. Management Functions:

According to Drucker, management is the organ of its institution. It has no functions in itself,
and no existence in itself. He sees management through its tasks. Accordingly, there are three
basic functions of a manager which he must perform to enable the institution to make its
contribution for:
(i) the specific purpose and mission of the institution whether business, hospital or university;

(ii) making work productive and the worker achieving; and

(iii) managing social impacts and social responsibilities.

All these three functions are performed simultaneously within the same managerial action. A
manager has to act as administrator where he has to improve upon what already exists and s
already known. He has to act as an entrepreneur in redirecting the resources from seas of tow
or diminishing results to areas of high or increasing results.

Thus, a manager has to perform several functions: setting of objectives, making, organising
and motivating. Drucker has attached great importance to the objective setting function and
has specified eight areas where clear objective setting is required. These are: market standing,
innovation, productivity, physical and financial resources, profitability, managerial
performance and development, worker performance and attitude, and public responsibility.

3. Organization Structure:

Drucker has decried bureaucratic structure because of its too many dysfunctional effects.
Therefore, it should be replaced. He has emphasized three basic characteristics of an effective
organization structure.

These are:

(i) Enterprise should be organized for performance;

(ii) it should contain the least possible number of managerial levels;

(iii) it must make possible the training and testing of tomorrow’s top managers—
responsibility to a manager while still he is young.

He has identified three basic aspects in organizing activity analysis, decision analysis, and
relation analysis. An activity analysis shows what work has to be performed, what kind of
work should be put together, and what emphasis is to be given to each activity in the
organization structure.

4. Federalism:
Drucker has advocated the concept of federalism. Federalism refers to centralized control in
decentralized structure Decentralized structure goes far beyond the delegation of authority. It
creates a new constitution and new ordering principle. He has emphasized the close links
between the decisions adopted by the top management on the one hand and by the
autonomous unit on the other.

This is just like a relationship between federal government and state governments. In a
federal organization, local managements should participate in the decision that set the limits
of their own authority. Federalism has certain positive values over other methods of
organizing.

(i) It sets the top management free to devote itself to its proper functions;

(ii) It defines the functions and responsibilities of the operating people;

(iii) It creates a yardstick to measure their success and effectiveness in operating jobs; and

(iv) It helps to resolve the problem of continuity through giving the managers of various units
education in top management problems and functions while in an operating position.

5. Management by Objectives:

Management by objectives (MBO) is regarded as one of the important contributions of

Drucker to the discipline of management. He introduced this concept in 1954. MBO has
further been modified by Schleh which has been termed as management by results’. MBO
includes method of planning, setting standards, performance appraisal, and motivation.

According to Drucker, MBO is not only a technique of management but it is a philosophy of

managing. It transforms the basic assumptions of managing from exercising cattalo to self-
control. Therefore, in order to practice MBO, the organization must change itself MBO has
become such a popular way of managing that today t is regarded as He most modern
management approach. In fact, it has revolutionalised the management process.

6. Organizational Changes:

Drucker has visualized rapid changes in the society because of rapid technological
development. Though he is not resistant to change, he feels concerned for the rapid changes
and their impact on human life. Normally, some changes can be absorbed by the organisation
but not the rapid changes.
Since rapid changes are occurring in the society, human beings should develop philosophy to
face the changes and take them as challenges for making the society better. This can be done
by developing dynamic organizations which are able to absorb changes much faster than
static ones.

Key Differences Between Administration And Management:

Aspect Administration Management

Primarily focused on planning,

Focus Primarily focused on executing policies and organizing,

procedures established by higher coordinating resources to achieve

authorities. organizational

goals and objectives.

More specific and detailed, dealing with

Scope Broad and general in nature, covering the the

overall functioning of an organization. day-to-day operations.

Implementation of decisions made by Formulation of decisions based on

Decision-Making higher strategic

authorities or policymakers. planning and organizational goals.

Involves routine tasks, paperwork, record- Involves strategic thinking, problem-

Nature of Work keeping solving,

and ensuring compliance. and decision-making.

Involves both short-term and long-term

Time Frame Typically short-term and immediate. planning,

depending on the managerial level.

Aspect Administration Management

Supportive role, ensuring smooth

Role functioning of Leadership role, guiding and directing

the organization as per established policies. organizational efforts towards goals.

Skills Attention to detail, organization, adherence Strategic thinking, leadership,

Emphasized to interpersonal

rules and procedures. skills, decision-making.

School administration overseeing day-to-

Example day Business management planning and

coordinating resources for business

operations, following educational policies. success.

It's important to note that in practice, the terms "administration" and "management" are often
used interchangeably, and the distinctions between them can vary depending on the context
and the specific organization. Additionally, the roles and responsibilities associated with
administration and management can overlap in many situations.