Module 2 & 3

Module II: History of Management

Classical Approach

• Definition: The first studies of management focusing on rationality and efficiency.

• Key Types:

  • Scientific Management: Taylorism & Neo-Taylorism

  • General Administrative Theory: Administrative & Bureaucratic Management

Scientific Management

• Definition: Science of determining the most efficient way to accomplish tasks.

• Principles:

  • Ensure the best techniques are utilized.

  • Divide work efficiently among managers and workers.

  • Train employees comprehensively.

  • Pay workers based on the results achieved.

F.W. Taylor's Scientific Management

• Core Idea: Use scientific methods to identify the "one best way" to perform a job.

Neo Taylorism / Digital Taylorism

• Explanation: Focuses on maximizing efficiency through standardization and the use of technology for monitoring worker performance.

• Goals: Enhances productivity and efficiency through structured approaches.

Criticisms of Scientific Management

• Limitations:

  • Time and motion studies lack scientific validity; no one optimal method exists.

  • Oversimplifies management, ignoring complex decision-making processes.

  • Overemphasis on economic incentives disregards psychological and social factors.

  • High specialization can lead to job monotony.

  • Critiqued for treating workers as automata, neglecting emotional and psychological needs.

General Administrative Theory

• Overview: Focuses on what constitutes good management practice and the principles that apply in various organizational settings.

Fayol's 14 Principles of Management

• Core Principles:

  1. Division of Work: Specialization increases efficiency.

  2. Authority: Managers must have the power to give orders.

  3. Discipline: Employees should respect organizational rules.

  4. Unity of Command: One superior for each employee.

  5. Unity of Direction: A single plan of action for the organization.

  6. Subordination: Individual interests should subside to the organization's interests.

  7. Remuneration: Fair wages for employees.

  8. Centralization: Degree of involvement of subordinates in decision-making.

  9. Scalar Chain: Hierarchical line of authority.

  10. Order: Proper organization of materials and personnel.

  11. Equity: Fair treatment of all employees.

  12. Stability of Tenure: Encourage long-term employment.

  13. Initiative: Freedom for employees to create and execute plans.

  14. Esprit de Corps: Fostering team spirit.

Bureaucratic Management (Weber's Theory)

• Characteristics:

  • Career-oriented management professionals.

  • Uniform application of rules.

  • Breakdown of jobs into routine tasks.

  • Hierarchical structure with clear authority.

  • Impersonality in rules and regulations.

  • Positions filled based on qualifications, not personal connections.

Behavioral Approach to Management

• Overview: Conducting experiments to understand workplace dynamics, especially social factors.

• Key Experiments:

  • Elton Mayo's studies at Hawthorne Plant included illumination experiments, relay assembly, and observations of worker behavior.

Contributions of the Behavioral Approach

• Recognizes organizations as social systems; social satisfaction is critical alongside productivity.

• No correlation between improved conditions and enhanced production.

• Emphasis on the informal group rather than individuals.

• Acknowledges financial incentives must be complemented by social needs for productivity.

• Advocates for employee-centered, participative leadership styles over task-centered approaches.

Limitations of the Behavioral Approach

• Assumes satisfied workers automatically produce more.

• Ignores other variables affecting productivity.

• Underestimates material rewards' role.

• Makes unrealistic demands on supervisors.

Quantitative Approach

• Definition: Uses statistics and quantitative techniques to enhance decision-making and solve complex issues.

• Branches:

  • Management Science

  • Operations Management

  • Management Information Systems

Contemporary Approach

• Emphasizes modern management practices, such as planning, decision-making, and stakeholder alignment.

Systems Approach

• Explanation: Integrates various management aspects neglected by older theories.

• Key Contributors: Includes scholars like Lawrence J. Henderson and W.G. Scott.

Key Concepts of Systems Theory

• Definitions:

  • Inputs: Resources from the environment entering the system.

  • Throughput: The transformation process converting inputs to outputs.

  • Outputs: Resulting goods or services.

  • Synergy: The whole system performs better than the sum of its parts.

• Systems have permeable boundaries and can be open or closed.

Contingency Approach

• Overview: Proposes that management strategies should be tailored to specific situations. Introduced by Fred Fiedler.

Evolution of Management Thoughts

• Categories:

  • Pre-Scientific Management Era (pre-1880)

  • Classical Management Era (1880-1930)

  • Neo-Classical Management Era (1930-1950)

  • Modern Management Era (1950-present)

Peter Drucker's Management Theory

• Core Concepts: Decentralization, knowledge work, management by objectives, and SMART goals.

Management by Objectives (MBO)

• Definition: A collaborative process whereby managers and employees outline specific performance goals.

• Benefits: Aligns individual and organizational objectives, enhancing employee commitment.

Process of MBO

1. Define organizational goals.

2. Set employee objectives.

3. Monitor progress and performance.

4. Conduct evaluations.

5. Provide feedback.

6. Appraise performance.

Bounded Rationality Model

• Definition: Proposed by Herbert A. Simon; suggests that decision-making is limited by knowledge and cognitive capacity.

Peter Senge: Learning Organization

• Definition: An organization where individuals continuously learn and improve together.

• Five Disciplines:

  1. Building a Shared Vision

  2. Systems Thinking

  3. Mental Models

  4. Team Learning

  5. Personal Mastery

Managing Oneself by Peter Drucker

• Core Premise: Success in a knowledge-based economy relies on self-understanding.

• Lessons:

1. Identify strengths.

2. Practice feedback analysis to discover abilities.

3. Understand personal learning styles.

4. Clarify values to ensure alignment with organizational goals.

5. Recognize one’s contribution and scope for improvement.

6. Take responsibility for relationships within the workplace.

7. Prepare for a second career or phase in life.