unit 1 management theories

8/4/2019 Unit 1 Management Theories

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To under stand the Evolution of ManagementThought


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The growth of modern management techniques began with industrialrevolution in England during the 18th & 19th centuries.

A series of inventions were made by the scientists like Hargreaves, Arkwright,Crompton, Kay, and Catwright. The important inventions include Spinning

jenny, Water frame, Mule, Power loam and Machine lathe, which

completely revolutionized the commerce and industry.

The life of Management is as old as civilizations. The above development ledto the emergence of different theory of management.

The divergent directions of Management thought have caused Managementwriters, like Harold Koontz to call the resulting array the management

theory jungle.

One can study the evolution of management by dividing the theories ofmanagement into three stages.

I. The Classical Theory of Management.

II. The Neo Classical Theory.

III. The Modern Management Theories


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These theories of management were the very early theories which

lost its importance with the passage of time. These theories havebecome a failure in these days.

Main contributions of Classical theory were:

i. Bureaucratic Model by Max Webber in 1900.

ii. Scientific Management by F.W.Taylor in 1910.

iii. Functional or Administration Management by Henry Fayol in1910.


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Bureaucratic theory is based on rigours rules and regulationwithout scope for innovation. He provided the classical theory oforganization and management. He felt that in classical theory oforganization and management, bureaucracy was the mostefficient form for complex organization.

Following are the Bureaucracy models main features :i. Rules and Regulations

ii. Hierarchy of Authority

iii. Technical Competence

iv. Division of work

v. Record Keeping

vi. Impersonal Relations


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i. Specialization

ii. Structure

iii. Rationally

iv. Predictability

v. Democracy

i. Impersonality

ii. Goal Displacement

iii. Rigidity

iv. Unnecessary paperwork

v. Empire Building

vi. Compartmentalization of

activities


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Fredrick Winslow Taylor was the father of scientific management .

Features of Scientific Management

i. Time study

ii. Motion study

iii. Scientific task planningiv. Standardization and simplification

v. Financial Incentives for motivating employees

vi. Functional foremanship

vii. Economy in operations.


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i. Scientific management, it reduces the workers merely to amachine.

ii. It makes their work monotonous.

iii. It leads to retrenchment of workers.

iv. Scientific management leads to unemployment asmachines start replacing manpower.

v. It leads to mental &physical strain on workers by unduespeeding them up.

vi. It adversely affects the initiative, motivation and the moraleof workers.


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Fayols contribution are generally termed as OperationalManagement of Administrative Management . Fayol looked at

the problems of managing an organization with themanagement point of view.

Functions of the Manager as per Fayol

i. Division of work

ii. Authority & Responsibility

iii. Discipline

iv. Unity of command

v. Unity of Direction

vi. Subordination of individual to general interest .

vii. Remuneration of personnel

viii.Centralization


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ix. Scalar Chain

x. Order

xi. Equity

xii. Stability

xiii.Initiative

xiv.Esprit de corps


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The contributors of the Neo classical theory had a human

approach. Their approach highlighted the findings of Hawthorneexperiment done in Western Electric Company between 1927to 1932 by a team of researchers from Harvard University.

Elton Mayo, a Harvard sociologist and the director ofHawthorne studies, is regarded as the father of the Human

Relations School.The basic objective of Hawthorne study was to examine the

effect of fatigue of workers but this was extended to evaluateattitude and psychological reactions of the workers on the job.

He dealt with the factors that cause the increase in the

productivity of the workers is not a single factor like that ofchanging working hours of work and the working conditions buta combination of these and several other factors such as:


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i. Less restrictive methods of supervision

ii. Giving autonomy to the workers

iii. Allowing the formation of small cohesive sub-groups ofthe workers

iv. Creating conditions which encourage and support and thegrowth of these groups

v. Co operation between management & worker

The team of Elton Mayo was of this firm opinion

Workers are not like machinery

The morale of the employees as an individual or as a

member of a working group has got a direct impact onthe productivity of an enterprise

Managers should believe in employees oriented approach

The employees should understand group attitude (theirpsychology)


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This theory is regarded as a further refinement of the HumanRelation Movement. Its coverage is interpersonal roles andrelationship has got a high significance.

Basically this approach has given emphasis on the following

important aspects-i. Employees Motivation

ii. Efficient &human based leadership

iii. Multi- directional communication

iv. Employee personality development in totality

v. To regard organization as an social system


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Since 1950 researchers began to look at organizations from a

systems view point. Many researchers made significantcontributions to the development of the systems approach.

The main elements of systems approach are as follows:

i. An organization is a unified and purposeful system consisting ofseveral interconnected, interacting and interdependent parts.

ii. The parts or components of a system are called sub-systems.Each subsystem influences the other subsystems and thesystem as the whole. Different subsystems are tied together intoan organic whole through goals, authority flows, resource flowsand information flows.

iii. The position and function of each system can be analyzed andunder- stood only in the relation to the other subsystems and tothe organization as a whole. Similarly , the organization as asystem can be analyzed and understood only by reference to itssub- systems.


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iv. Each sub-systems derives its strength by its associationand interaction with the other subsystems. As a result thecollective contribution of the organization is greater thanthe aggregate of individual contributions of its sub-

systems. This is known as synergy.v. Every system has a boundarythat separates it from its

environment. The boundary determines which parts areinternal to the organization and which are external. Forexample, employees are within the boundary whereascreditors and customers are external to a business firm.

vi. Systems are of two types. An open system continuallyinteracts with its environment( the forces lying outside it )whereas a closed system is self contained and isolatedfrom the environment.

vii. A business enterprise is an open and dynamic system. Itdraws inputs (raw materials, machinery, labour, finance,information etc). from its environment . It converts theseinputs into outputs (products and services etc.) with thehelp of conversion process.

viii. The reaction or response of the environment to the

outputs is known as feedback.


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Systems approach provides a refreshingly new thinking onorganizations and their management. It calls attention to the dynamicand interrelated nature of business organizations. It provides a strongconceptual framework for a meaningful analysis and understanding oforganizations and their management. Systems approach providesclues to the complex behavior of people in an organization .It has

become an integral part of management thought and practice.

The systems approach is often criticized as being too abstract andvague. It cannot directly and easily be applied to practical problems. Itfails to specify the nature of interaction and interdependenciesparticularly between an organization and its external environment. It

fails to offer a unified body of knowledge.


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The contingency approach is a relatively new approach toorganization and management. It is related to the systemsapproach. The belief that organizations are open systems widenedthe perspective further leading to the development of thecontingency approach. It is also known as the situational approach.

The basic theme of the contingency approach is that there is nosingle best way of managing applicable in all situations. The bestsolutions is the one that is responsive to the peculiarities of thegiven situation. Therefore, management should deal with differentsituations in different ways.

Contingency approach rejects universality of management concept.Use of contingency approach is not possible without the ability tomatch the management knowledge and skills to the demands of thegiven situation.


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The main features of the contingency theory are as follows:

i. Management is entirely situational. In other words, the conditions

and complexity of the situation determine which measure ortechnique is applicable and effective.

ii. Management should, therefore, match or fit its approach to therequirements of the particular situation. To be effective ,management policies and practices must respond to

environmental changes. The organization structure , theleadership style, the control system all should be designed to fitthe particular situation.

iii. Since managements success depends on its ability to cope withits environment, it should sharpen its diagnostic skills so as toanticipate and comprehend the environmental changes.

iv. Managers should understand that there is no one best way tomanage. They must not consider management principles andtechniques universal.


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Contingency approach provides a clear view of the realities of themanagerial job. The contingency approach avoids this organic standand suggests specific solutions. It widens the horizons of managersfrom the concepts , principles and techniques of management theory. Itpromotes analytical, critical and multi-dimensional thinking with thehelp of which managers can innovate new and better approaches andwiden their choice.

The contingency approach does not suggest that the findings ofearlier approaches are useless. Rather it attempts to integrate themand make them contingent upon the demands of the situation.

The contingency approach is not free from criticism. Critics argue thatit adds confusion to the practice of management by stressing that it all

depends on the situation. Critics also point out that without atheoretical foundation; it is almost impossible to research, to gainvaluable information, or develop a knowledge base .It is also said thatthere is nothing new in contingency theory because even classicaltheorists like Fayol cautioned managers to use principles in the light ofchanging conditions.

unit 1 management theories

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