Management schools of thought

FAYOL`S ADMINISTRATIVE MANAGEMENT.

Fayol looked at the problems of managing an organisation from top management point of view.

He used the term administration instead of management.

His administrative science can be applied equally well to public and private affairs.

Physical Mental(ability to understand and learn Moral(energy, firmness,loyalty, dignity) Educational Technical(peculiar to the function being

performed) Experience(arising from the work)

Six qualities of a manager according to Fayol

Division of work Authority and responsibility. Discipline. Unity of Command. Unity of Direction. Subordination of individual interest to

general interest. Remuneration of personnel Generalisation Scalar Chain

Fayol`s 14 Principles of Management

Order Equity Stability of Tenure Initiative Esprit de corps.

Division of work-The more people specialise ,the more efficiently they can perform their work.

Authority and Responibility-Authority is the right to give orders and the power to obtain obedience.A manager might use both his official authority and personal authority while getting things done.

Official authority is derived from manager`s position. Personal authority is derived from personal qualities such as intelligence, knowledge etc.

Discipline-Self imposed discipline and command discipline.

A clear understanding between management and workers and judicious use of penalties for violation of rules.

A person should get orders and instructions from only one superior.

Unity of Direction-One manager one plan for all operations having the same objective.

Subordination of individual interest to general interest-

Remuneration o personnel-Remuneration of employees should be fair and provide maximum satisfaction to employees.

Unity Of Command

Centralisation-Decreasing the role of subordinates in decision making is called centralisation and increasing their role is called decentralisation.

Fayol felt that managers should retain final responsibility but also need to give their subordinates enough authority to do their jobs properly.

Scalar Chain-It suggest that each communication going up or coming down must flow through each position in the line of authority.

If following the chain creates communication delays, cross communication can be permitted, if agreed by all parties and superiors.

Equity-Equity is the combination of justice and kindness. Managers should be fair in dealing with employees.

Stability of tenure-No employee should be removed within short time. There should be reasonable security of jobs.

Initiative-Within the limits of authority and discipline, managers should encourage employees for taking initiative.

Esprit de corps-Union is strength and promoting team spirit will give the organisation a sense of unity.

The concept of Scientific Management was introduced by Frederick Taylor in USA.

Scientific management is concerned with knowing exactly what you want men to do and then see in that they do it in the best and cheapest way.

Taylor has given emphasis on solving problems in a scientific way, he is called as the father of Scientific Management.

Scientific Management

Separation of planning and doing. Functional Foremanship. Job Analysis(Time-motion-fatigue study). Scientific selection and training of workers. Financial Incentives. Economy and Profit. Mental Revolution.

Elements and Tools of Scientific Management

1.Separation of Planning and doing-Taylor emphasised the separation of planning aspect from actual doing of work.

2.Functional Foremanship- This is based on specialisation of functions. In this system,eight persons are involved to direct the activities of workers.

Out of this, four persons are concerned with planning.1.route clerk,2. Instruction card clerk.3. Time and cost clerk4. Disciplinarian.

Elements and tools of Scientific Management

The remaining four persons are concerned with doing aspect of work.

1. Speed boss. 2. Inspector. 3.Maintenance foreman 4.Gang boss.

Job Analysis is undertaken to find out the one best way of doing things.

This is done using Time-Motion –Fatigue studies. Time study involves the determination of time a

movement takes to complete.The movement which takes the minimum time is the best one.

Motion Study involves the study of movements in parts which are involved in doing a job and thereby eliminating the wasteful movements and performing only necessary movements.

3.Job Analysis

Fatigue Study-It shows the amount and frequency of rest required in completing the work.

4. Scientific Selection and Training of workers- Workers should be selected on the taking into account, their education, aptitude,work experience,physical strength etc.

A worker should be given work for which he is physically and technically most suitable.

5. Financial Incentives- Wages should be on the basis of individual

performance and not on the basis of the position which he occupies.

Differential Piece Rate System-A worker who completes the normal work gets wages at higher rate per piece and one who does not complete gets at lower rate.

6.Economy-Adequate consideration should be given to economy and profit. It can be achieved making the resources more productive as well as by eliminating the wastages.

7. Mental Revolution-Scientific Management depends on the mutual co-operation between management and workers. So, there should be mental change from conflict to co-operation.

Replacing Rule of Thumb with Science. Harmony in Group action. Co-operation Maximum output. Development of workers.

Principles of Scientific Management

Replacing Rule of Thumb with Science-Taylor has emphasised that in scientific management,organised knowledge should be applied which will replace rule of thumb.

Harmony in Group Action-Group harmony suggests that there should be mutual give and take situation and proper understanding so that group as a whole contributes to the maximum.

Principles of Scientific Management

Scientific Management is based on mutual confidence, cooperation and goodwill.

Cooperation between management and workers can be developed through mutual understanding and a change in thinking.

Taylor has suggested, substitution of war with peace.

Cooperation

Scientific managent involves continuous increase in production and productivity instead of restricted production either by management or by workers.

“There is hardly any worse crime to my mind than that of deliberately restricting output.”-Taylor.

Maximum Output

All workers should be developed to the fullest extent possible for their own and for the company`s prosperity.

Development of workers require scientific selection and providing them training in the workplace.

Development of workers

Scientific management was more concerned with problems at the operational level rather than emphasise on management from the managers point of view.

One author has suggested that Taylor can be considered as the father of industrial engineering rather than the father of Scientific management.

Scientific management is more relevant to mechanisation and automation.

Critical Analysis of Scientific Management

Sidelines human aspect at the workplace. Work is performed under close and strict

supervision, based on authoritarian approach.

Differential piece rate system was opposed by workers and their trade unions.

No scientific standardisation of work.

It is proposed by Max Weber. Bureaucracy is an administrative system

designed to accomplish large-scale administrative tasks by systematically coordinating the work of many individuals.

Weber has observed three types of power in organisations.

Traditional, Charismatic,rational-legel or bureucratic.

Bureaucracy

He emphasise thet bureaucratic type of power is the ideal one.

Administrative class. Hierarchy. Division of work. Official Rules. Impersonal Relationships. Official Record.

1.Bureaucratic organisations generally have administrative class responsible for maintaining coordinative activities of the members.

Main features of this class. 1. People are paid and are wholetime

employees. 2.They receive salary based on their

positions. 3.Their tenure in the organisation is

determined by the rules and regulations.

Features of Bureaucracy

4. They do not have any proprietary interest in the organisation.

5.They are selected for the purpose of employment based on their competence.

There is a hierarchy of positions in the organisation.

Hierarchy is a system of ranking various positions in descending scale from top to bottom of the organisation.

In bureaucratic organisation, offices also follow the principle of hierarchy, that is, each lower office is subject to control and supervision by a higher office.

Hierarchy

Work of the organisation is divided on the basis of specialization to take advantage of division of labour.

Division of labour tries to ensure that each office has a clearly defined area of competence within the organisation and each official knows the areas in which he operates and the areas in which he must abstain from action so that he does not overstep the boundary between his role and those of others.

Division of Work

Rules provide the benefits of stability, continuity and predictability and each official knows precisely the outcome of his behaviour in a particular matter.

Official Rules

Relationships among individuals are governed through the system of official authority and rules.

Official positions are free from personal involvement, emotions, sentiments.

Impersonal Relationships

Bureaucratic organisations are characterised by maintenance of proper official records.

The decisions and activities of the organisation are formally recorded and preserved for future reference.

Official Record

Looking into the needs of modern organisations, bureaucracy has lot of shortcomings. So, it is not suitable.

It results in inefficiency.

Problems in Bureaucracy

Rules become source of inefficiency because of too much emphasis on rulesand their misuse.

Rigid-organisational hierarchy works against efficiency.

In dealing with people impersonal approach cannot be adopted.

Invalidity of Bureaucratic assumptions.

Rules are provided for achieving organisational objectives but following of rules may become the objective of the organisation and organisational objectives may become secondary.

Goal Displacement

There may be trained incapacity in the organisation. That is the person may be trained from a single point of view.

There is conflict between professionals and bureaucrats.

Unintended consequences

There is conflict between organisation and individuals.

Inhuman, works like machine, there is no importance on human beings.

Inhuman organisation

It ignores external conditions and is not ready for adapting to changes in the environment.

Closed-system perspctive.

Communication coming down or going up must pass through each position.

Subordinate will get authority from his immediate supervisor.

The Hawthorne plant of General Electric company Chicago, was manufacturing telephone system bell.

It employed around 30,000 employees at the time of experiments.

This was the best company with respect to material benefits to the workers such as pension, sickness benefits and other recreational facilities.

Hawthorne experiments and Human Relations approach

The level of dissatisfaction among workers were high and productivity was not upto the mark.

The company asked for assistance from the National Academy of Sciences to investigate the problems of low productivity.

TheTeam-EltonMayo(Psychologist),Whitehead and Roethlisberger(Sociologists) and company representative William Dickson.

They studied the relationship between productivity and working conditions.

Illumination experiments Relay assembly test room experiments Mass interviewing programme. Bank wiring observation room experiments.

Four phases of the study

ILLUMINATION experiments were undertaken to find out how varying levels of illumination affected the productivity.

A group of workers were chosen and placed in two separate groups.

One group was exposed to varying levels of illumination. This group was termed as experimental group.

The other group called as control group,continued to work under constant intensities of illumination.

Illumination Experiments

When they increased the elimination, productivity was increased.

When the intensity of illumination was decreased,the production continued to increase.

The production in the experimental group decreased only when the illumination was decreased to the level of moonlight.

So, illumination did not have any effect on productivity.

It was designed to determine the effect of changes in various job conditions on group productivity as the illumination experiments could not establish relationship between intensity of illumination and production.

Two girls were chosen for the experiment. They were asked to choose four more girls

as co-workers. The work was related to the asembly of

telephone relays.

Relay Assembly Test Room Experiments

Each relay consisted of a number of parts which girls assembled into finished products.

The experiment started with introducing numerous changes.

An observer was associated with each group to supervise their work.

Before each change was introduced, girls were consulted, the girls were consulted.

They were given opportunity to express their viewpoints and concerns to the supervisor.

The incentive system was changed so that each girl`s extra pay was based on the other five rather than the output of the larger group,say 100 workers or so.

Two five minute rests-one in morning session and other in evening session were introduced and which were increased to ten minutes. The productivity increased.

Changes and Outcomes

The rest period was reduced to five minutes but frequency was increased.

The productivity decreased slightly and the girls complained that frequent rest intervals affected the rhythm of work.

The number of rest was reduced to two of ten minutes each, but in the morning coffee or soup was served along with sandwich and in the evening, snack was provided. The productivity increased.

Changes in working hours and workday were introduced, such as cutting an hour off the end of the day and eliminating Saturday work. The girls were allowed to leave at 4.30 pm instead of usual 5 pm. And later at 4.00pm. Productivity increased.

Because of these changes, absenteeism decreased, morale increased, and less supervision was required.

Researchers decided to revert back to the original position, that is no rest and other benefits.

Surprisingly, productivity increased further instead of going down.

Productivity increased not because of positive changes, in physical factors but because of a change in girl`s attitude towards work and their work group.

They developed a sense of belongingness. Since there was more freedom of work,they

developed a sense of responsibility and self-discipline.

About 20,000 interviews were conducted between 1928 and 1930 to determine employees` attitude towards company, supervision,insurance plans, promotion and wages.

Mass Interviewing Programme.

During the course of interviews, it was discovered that workers` behaviour was being influenced by group behaviour.

Findings of Interviews.

To analyse the functioning of small group and its impact on individual behaviour

A group of 14 male workers was employed in the bank wiring room: nine wiremen, three soldermen and two inspectors.

The work involved attaching wire to switches for certain equipment used in telephone exchange.

Bank Wiring Observation Room Experiments

Hourly wage rate for the personnel was based on average output of each worker while bonus was to be determined on the basis of average group output.

The hypothesis was that in order to earn more, workers would produce more and in order to take advantage of group bonus, they would help each other to produce more.

But, workers decided the target for themselves which was lower than the company`s target.

Group`s target for a day was connecting 6600 terminals against 7300 terminals set by the company.

Fear of unemployment- Losing the job of some employees.

Fear of raising the standards-Most workers were convinced that once they had reached the standard rate of production. Management would raise the standard of production.

Protection of slower workers-Since lower workers were likely to be retrenched, the faster workers protected them by not overproducing.

The reason for the restricted output.

Satisfaction on the part of management-Informal relationships are an important factor in determining the human behaviour.

A new chapter in management through good human relations.

Human relations involve motivating people in organisation in order to develop team work which effectively fulfills their needs and achieves organisational objectives.

Implications of Hawthorne Experiments.

Social Factors in output. Group Influence. Conflict. Leadership. Supervision. Communication.

Management as a social system Open system. Adaptive. Dynamic Probabilistic. Multivariable-Interrelated and

interdependent variables. An integrated approach.

Systems Approach

It provides an integrated approach of managing. It considers management in its totality. Management problems should be solved in an

organization by taking the totality of the organization.

Systems approach possesses the conceptual level of managerial analysis.

That is, it discards the simplistic approach of managerial analysis and suggest that management of an organisation must be consistent with the demands of organisational environment.

Implications of systems Approach

It provides a framework through which organisation environment interaction can be analyzed and facilitates decision making.

Abstract Approach. Lack of universality.

Limitations of Systems Approach

There cannot be a particular management action which will be suitable for all occasions.

Appropriate action is one which is designed on the basis of external environment and internal states and needs.

Shows the interrelationship between various variables in a given situation and the managerial action required.

Contingency or situational Approach

Management action is contingent on certain action outside the system or subsystem.

Organisational action should be based on the behaviour of action outside the system.

Because of specific organisation-environment relationship, no action can be universal, it varies from situation to situation.

Complex-Analysis of a variable with various sub factors.

Difficult empirical testing. Reactive not pro active.

Limitations of Contingency approach