Evolution of Management Theory

Early management theory attempted to understand the new industrial life at the end of 19th century and beginning of the 20th century.It includes Scientific management, Classical organization theory, Behavioural school and management science

SCIENTIFIC MANAGEMENT THEORY

Frederick W. Taylor was first person who gave Scientific Management in 1911. He also called the father of scientific management. According to Taylor, “scientific management means knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.”

Fedrick w Taylor (1986-1915) rested his philosophy on four basic principles.

1. The development of science of management so that the best method for performing each task could be determined
2. The Scientific selection of workers so that each worker can be given task based on what suits him/her best.
3. Education and development of the workers
4. Maintaining harmony between the management and worker union.

According to Taylor, the success of these principles required ”a complete mental revolution” on the part of management and labor. Both,management and labour should have common interest i.e. Increasing the productivity

CLASSICAL ORGANIZATION THEORY :

BUREAUCRACY MANAGEMENT (Max Weber-1900)

Bureaucracy management is a stream of classical theory of management. Max Weber was the first of management theorists who were concerned the management structure with the sets of rule and regulations. There are four major characteristics of organizational structure -

• Hierarchical positions
• Rules of system
• Division of  labour for specialization
• Impersonal relationship

Advantage of bureaucracy management :

1. Their is a hierarchy in he authority
2. Employment is based on the efficiency of an individual
3. Elimination  of managerial inconsistencies
4. Maintenance of  consistency of work.
5. Rules and regulation of the duties are followed by the employees.
6. People are given authority according to their position in organization.

Disadvantage of bureaucracy management:

1. Inter personal relations have no value
2. It does not allow for personal growth and development.
3. Organization becomes static and change is not anticipated.
4. Difficult to keep co-ordination and communication between employees.
5. It is a “closed system”.

ADMINISTRATIVE MANAGEMENT (Henry Fayol)

Henri Fayol was real father of modern Management. Fayol laid the foundation of management as a separate body of knowledge. He always insisted that if scientific forecasting and proper methods are used in management than company can get satisfactory results.Henri Fayol’s Administrative Management is based on six admin activities. They are-
1.     Technical : Production and manufacture
2.     Managerial : Planning, controlling, co-ordination
3.     Commercial : Purchasing and selling
4.     Financial : Use of capital
5.     Accounting : Asset, Liabilities, cost, profits
6.     Security : Protection of goods and Person

Fayol’s fourteen Principles of management

1. Division of work: Division of work means specialization. Each job and work should be divided into small task and should be assigned to specialist of it.
2. Authority and responsibility: Authority means right to give order and command while responsibility means to accomplish objective.
3. Discipline: Fayol stated discipline in terms of obedience, application, and respect to superiors.
4. Unity of command: A subordinate should receive order from only one boss.
5. Unity of direction: All the works of an organization must work together to accomplish a common objective in under one plan and head.
6. Subordination of individual interest to common interest: Worker follows the common interest of organization rather than individual.
7. Remuneration: Remuneration should be fair and adequate. It includes both types of incentives financial as well as non financial.
8. Centralization: There should be one central point in organization which exercises overall direction and control of all the parts.
9. Scalar Chain: Scalar chain is the chain or line of command from superior to subordinates
10. Order: Only proper order can give an efficient management.
11. Equity: Equity creates loyalty and devotion among the employees.
12. Stability of tenure personnel: Security of job for an employee in an organization is very important. Retaining productive employee should always a higher priority of management.
13. Esprit de corps: Management should encourage harmony and proper understandings between      workers.
14. Initiative: Manager should be encouraged the employees Initiative for creative working.

NEO CLASSICAL THEORY:

Neo- classical theory is also referred to as behavioral science approach to modifying and improving the classical theory.  While classical theories focused more on structure and physical aspects of the worker while Neo-classical theory gives importance to human and social aspects of the worker and his relations in the organization.

The neo-classical theory is based on the Hawthrone experiments. Elton Mayo conducted the Hawthrone experiments at Hawthron plant of General Electronic Company (GEC) between 1927 and 1993 at Chicago with 30,000 workers. The objective of the experiment was to find out the behavior and attitude of workers at workplace under better working conditions. 

 Result of Hawthrone Experiments:

• Motivation: Employees are not motivated by only money (bonus scheme and incentive).

• Communication:  communication helps the management and employees to have better mutual understanding. Through proper communication, management can easily identified the problem faced by its employees and can easily solve out.

• Social factors: Social factors are responsible for deciding the level of output.

• Behavior of workers: Workers are not as individual identity but as members of a group in an organization and they have their own norms and beliefs. Workers behavior depends upon his mental level and emotions. Workers began to influence their group behavior towards management.

• Relationship: Employees do not like order and command. They preferred to maintain amicable relationship with their co-workers. They want co-operative attitude from their superiors.

• Production level:  Teamwork and Group psychology increases productivity.

MANAGEMENT SCIENCE THEORY

Management theory attempts to determine the predictable relationship between actions, outcomes and situations. The theory seeks to integrate the various schools of management thought by focusing the inter-dependence of many facts involves in the managerial situations.

Six different themes in management theory:

1. New Organizational environment: The dynamic engagement approach recognizes that an organization environment is not some set of fixed, impersonal forces. Rather it is a complex, dynamic, web at people interacting with each other. As a result Managers not only pay attention to their own concerns, but also understands what is important for other managers within the organization and in other organization. They interact with theses other managers to create jointly the condition under which these organizations prosper and struggle.

2. Ethics and Social Responsibility: Managers using a dynamic engagement approach pay close attention to the values that guide people in their organizations, the corporate Culture that embodies those values, and values held by the people outside the organization.

3. Globalization and Management

4. Inventing and Re-inventing Organizations: Managers who practice dynamically engagement continually search for ways to unleash the creative potential of their employees and themselves. A growing chorus of theorist is urging managers to rethink the standard organization structures to which they have become accustomed.

5. Cultures and Multiculturalism: Managers who embrace the dynamic engagement approach recognize that the various perspective and values that people of different cultural backgrounds bring to their organizations are not only a fact life but a significant source of contributions.

6. Quality: By the dynamic engagement approach, total quality management (TQM) should be in every manager’s vocabulary. All managers should be thinking about how every organizational process can be conducted to provide product and service .That is responsible to tougher and tougher customer and competitive services. Strong and lasting relationships can be fruitful by product of quality frame of mind and action by this view. Total quality management adds one more Dynamic dimension to management because quality too is always a moving Target.