- Developed a chart called “ Gantt Chart”.
- A Gantt Chart is used for scheduling work and can be generated for each worker and for a complex project as a whole.
- Gantt also refined Taylor’s idea about piece wage system
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Harrington Emerson(1853-1931): worked for increasing efficiency in the railroad works by applying scientific management concept.
Contribution and Limitation of Scientific Management Theory
Contribution
- Foundation for other theories
- Increased productivity and efficiency
- Emphasized on improved working conditions by reducing fatigue and redesigning machines and tools.
- Developed many management tools as time study, motion study, fatigue study, and flow chart
Limitation
- More focus on process less on workers
- Almost exclusively concerned to top level management.
- Assumed that organizations remain stable and simple.
- Considered man as machine and they are interested only in money.
- Failed to take into account the psychological and sociological factors of the work
- Workers and unions protested charging it would cause layoffs.
- Productivity increased meant more profits to the owner so workers were suspicious and joined unions in greater number.
b) Administrative Management Theory
The administrative management tried to develop basic guidelines fro designing, creating, and maintaining large organizations. Four contributors ( Henry Fayol, Max Weber, Chester Barnard, and Mary P. Follett) significantly contributed for the development of administrative management theory.
Henri Fayol (1841–1925)
- A mining engineer by education was an industrialist and an executive in France.
- Wrote “General and Industrial Management.” Published in English only in 1930
- Helped to systematize the practice of management.
- Was first to identify the specific management functions of planning, organizing, leading, and controlling.
- Developed fourteen principles of management
1) Division of Work: allows for job specialization.
- Work should be divided among individuals and groups.
2) Authority and Responsibility
- Authority is right to give order
- Responsibility involves being answerable
Whoever assumes authority assumes responsibility
- Discipline
- Obedient and respect to rules and norms
- Unity of Command
- Employees should have only one boss.
- Unity of Direction
-A single plan of action to guide the organization.
- Subordination of individual interests to the general interests of organization
- Resolving the conflict between employees and organization and harmonizing the mutual goal
- Remuneration
- An equitable uniform payment system that motivates contributes to organizational success.
- Centralization
- The degree to which authority rests at the top of the organization.
- Scalar Chain
- Chainlike authority scale.
- Most vs. least authority
- Order
- The arrangement of employees where they will be of the most value to the organization and to provide career opportunities.
- The arrangement of material at proper place
- Equity
- The provision of justice and the fair and impartial treatment of all employees.
- Stability of Tenure of Personnel
- Long-term employment is important for the development of skills that improve the organization’s performance. Subordination of Individual Interest to the Common Interest
- The interest of the organization takes precedence over that of the individual employee.
- Initiative
- The fostering of creativity and innovation by encouraging employees to act on their own.
- Esprit de corps
- Harmony, general good feeling among employees, shared enthusiasm, foster devotion to the common cause (organization).
Max Weber (1864–1920)
- was a German sociologist.
- Made significant contribution to management thought and development.
- Developed the principles of bureaucracy – a formal system of organization and administration designed to ensure efficiency and effectiveness.
- Prescribes for the use of rules, hierarchy, a clear division of labor, and detailed procedures to guide employees’ behaviors
- The seven contents of Weber’s theory of bureaucracy are:
1. Rules—formal guidelines for the behavior of employees on the job
2. Impersonality—employees are evaluated according to rules and objective data
3. Division of Labor—splitting work into specialized positions
4. Hierarchical Structure—ranks jobs according to the amount of authority in each job
5. Authority—who has the right to make decisions of varying importance at different organizational levels
6. Lifelong Career Commitment—both the employee and the organization view themselves committed to each other over the working life of the employee
7. Rationality—the use of the most efficient means available to accomplish a goal
Why bureaucratic theory is criticized today?
- It is rigid
- It is time consuming.
- Top management is always overloaded
- Deeply rooted feeling of competition, rivalry,
- Emergence of conflict
- Only top management can have overall picture of the organization
Chester Bernard (1864–1920)
- Former president of New Jersey Bell Telephone Company
- Wrote “The Functions of the Executive.”
- Proposed a theory of the acceptance of authority (by subordinates) as the source of power and influence for managers.
- Outlined the role of the senior executive into three major parts
- Formulating the purpose of the organization
- Hiring key individuals and
- Maintaining organization communications
- The recognition of the existence of “informal organization” and “team” was the new and exciting idea proposed by Bernard.
Potential Benefits of Bureaucracy
- Efficiency
- Consistency
- Functions best when routine tasks are performed
- Performance based on objective criteria
- Most effective when
- Large amounts of standard information have to be processed
- The needs of the customer are known and are unlikely to change
- The technology is routine and stable (e.g., mass production)
- The organization has to coordinate the activities of employees in order to deliver a standardized service/product to the customer
Potential Costs of Bureaucracy
- Protection of authority
- Slow decision making
- Incompatible with changing technology
- Incompatible with 21st century workers’ values for freedom and participative management
Mary Parker Follett ( 1868-1933)
- was a social philosopher
- Published a book Dynamic Organization in 1942
Contribution and Limitation of Administrative Management Theory
Contribution
- Foundation for management thoughts
- Identified important management functions
- Introduced management as a valid subject of scientific inquiry.
Limitation
- Appropriate for small and simple organizations.
- Prescribed universal procedures that may not be applicable to all
- Showed no much care for human rather took human as a tool
2. Behavioral Management School
- The classical management theory could not fully address the organizational phenomena.
- It failed to recognize the importance of human element
(one of the resources) in the organization.
- It was observed only economic incentive is not enough to make workers happy and satisfied.
- Hence many studied conducted to identify workers expectation from the organization and factors associated with workers efficiency, happiness, and productivity.
- The finding of these studies are classified as a) Human relation approach and b) Behavioral science approach
- Human relation approach
- Human relation approach emphasized the importance of an individual in an organization.
- Studied how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932 by a group or researchers from Harvard University headed by Elton May
- Conducted three experiment
- The relay assembly test room experiment
- Working condition and productivity
- Social groups were formed informally at workplace
- Bank wiring observation room
Informal groups, over a period of time, developed their own codes of behavior, hierarchy of members and standard of outputs.
Lessons from the Hawthorne Studies
- Employees are motivated by social needs and association with others
- Employees’ performance is more a result of peer pressure than management’s incentives and rules
- Employees want to participate in decisions that affect them
- Managers need to involve subordinates in coordinating their work to improve efficiency
b) Behavioral science approach
- It emerged during 1950s
- It integrated the fields of psychology, sociology, and anthropology to explain relations and behavioral patterns of workers.
- Main contributors are Abraham Maslow, Douglas McGregor, Fredric Herzberg.
- They viewed, the success of managers depends on their ability of understanding the work and people as well.
Abrahm Maslow
Classified human needs into different five categories
Theory X and Theory Y (Douglas McGregor)
Two-Factor Theory (Frederick Herzberg)
- Herzberg advocates that people work in an environment where two factors are present.
- The first factor is called Hygiene such as pay, supervision, rules, regulation and policy. Fulfillment of hygiene factors may not motivate but absence of such factors becomes dissatisfactions.
- The other factor is motivator such as recognition, achievement, responsibility challenge, etc. Presence of such factors always motivate people to higher productivity.
Behavioral Management Theory’s Contribution and Limitation
Contributions
- Important insights for motivation, group dynamics, and other interpersonal processes.
- Challenged the view that employees are tools and believed that they are valuable resources.
Limitations
- Predicting behavior is very complex.
- Managers are reluctant to adopt many concepts
- Recent research findings are hard to understand and apply in the organization.
3. Management Science School
- The management science school is also known as the mathematical or quantitative approach.
- Emerged during World War II to help the Allied forces manage logistical problems.
- Focuses on decision making, economic effectiveness, mathematical models, and the use of computers to solve quantitative problems.
- The school substantially use the mathematical and quantitative techniques to make decision and to solve complex business problems such as problem related to planning, production, operation, inventory, transportation etc.
- There are main three branches of management science
Quantitative management: utilizes mathematical techniques as linear programming, modeling and queuing theory, etc.
Operation management: provides managers with the set of techniques which they can use to utilize production system to increase efficiency.
MIS: helps managers to information systems that provides information about event happening within and outside the organization.
Contributions and Limitations of Management Science
Contributions
- Developed sophisticated quantitative techniques to assist in decision making.
- Application of models has increased our awareness and understanding of complex processes and situations.
- Has been useful in the planning and controlling processes.
Limitations
- Quantitative management cannot fully explain or predict the behavior of people in organizations.
- Mathematical sophistication may come at the expense of other managerial skills.
- Quantitative models may require unrealistic or unfounded assumptions, limiting their general applicability.
4. System approach to management
- The classical school, human relation and management science theory studied and considered in fragmented way.
- They could not provide comprehensive figure.
- They ignored the relationship between the organization and the environment.
- In response to their short comings management tried to understand the organization as a whole system
- A system is an interrelated set of elements functioning as a whole.
The important elements of a system are
- Every system should have goal orientation.
- It exists for some objectives.
- A particular system has some sub systems.
- Each subsystem interacts with other subsystems.
- Opens system interacts with its environment.
- Closed system does not interact with environment.
- Organization is open system and always interacts with environment.
- Each system has its boundary within which it operates.
- Information is vital to support the functioning of the system.
- System is a process that converts information into actions and opportunities
- Feedback is the key to systems control.
- Synergy means the whole is always greater than its total in parts.
- Subsystems are more successful working together in a cooperative and coordinated fashion than working alone.
- The whole system (subsystems working together as one system) is more productive and efficient than the sum of its parts.
- A normal process in which an organizational system declines due to failing to adjust to change in its environment
- Entropy can be avoided and the organization re-energized through organizational change and renewal.
Contribution and Limitations
Contributions
- Highlighted the importance of information
- Conceptualized the interactions of various parts of the organization
- Emphasized on paying attention to all parts for organizational effectiveness.
Limitation
- Abstract thinking
- Does not provide specific guidelines on the functions and duties of managers.
5. The Contingency approach to management
- Suggests that each organization is unique.
- The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the environment in which the organization operates.
- Assumes there is no one best way to manage.
- The environment impacts the firm and managers must be flexible to react to environmental changes.
- In rapidly changing organizational environments, managers must find ways to coordinate different departments to respond quickly and effectively.
- It suggest the managerial behavior depends on various situational factors such as Size technology, environmental uncertainty, individual uncertainty, individual differences, geographical spread of the organization, etc
- Contributors of this theory were Tom Burns, G.M. Stalker, Paul Lawrence, and Jay Lorsch.
- This theory started taking shape in the years of 1960.
Contingency Theory of Organizational Design
Mechanistic Structure
- Authority is centralized at the top. (Theory X)
- Employees are closely monitored and managed.
- Can be very efficient in a stable environment.
Organic structure
- Authority is decentralized throughout the organization. (Theory Y)
- Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment.
Contribution and Limitations
Contributions
- Helped to modify various management concepts
- Provided important turn in management
Limitations
- Failed to identify all important contingencies. (The situational characteristics are called contingencies)
- May not be applicable to all managerial level and all managerial issues.
