Different Approaches To Management

Management was influenced by various disciplines like sociology, economics, political science, anthropology, psychology, and even literature. Due to such multidisciplinary influences, even authors like Harold Koontz (1961) referred to management as a ‘jungle’. Even then, differences exist in the classification of approaches. Although one of the ways to classify management approaches is from the analysis of John G.Hutchinson (1971), which considers the development of management from five different perspectives, the history of management can be broadly classified into three groups: (1) the classical approach, (2) the neo-classical approach, and (3) the modern approach. The classical approach has conventionally implied traditionally accepted views. This approach emphasizes organizational efficiency to increase organizational success. It believes in functional interrelationships, following of certain principles based on experience, a bureaucratic structure, and a reward-puni shment nexus.The classical school of thought developed in three different directions: the scientific management approach, the administrative approach, and the bureaucratic approach, which also falls under the administrative school of thought. The bureaucratic approach was pioneered by Weber (1920), the scientific management approach by Taylor (1903), and the concept of administrative theory by Fayol (1949). The neo-classical approach /Behavioral approach emphasized human relations, the importance of the person behind the machine, individual as well as group relationships, and social aspects.This approach was pioneered by Mayo and his associates (1933). It was further extended to the behavioral sciences approach, pioneered by Abraham Maslow (1968, 1971), Chris Argyris (1957), Douglas McGregor (1960), and Rensis Likert (1961). The quantitative approach (which developed during World War II and believes in economic effectiveness to solve business problems) and the contingency approach ( which discards the concept of universality and determines managerial decisions by considering situational factors) also form a part of the neo-classical approach.Modern management thought combines concepts of the classical school with social and natural sciences. It basically emerged from systems analysis. Even though most discussions on the evolution of management thought start with the classical approach, a brief acknowledgement of the contributions of the pre-classical theorists is useful to appreciate the process of development in management thought. A list of the contributions by pre-classical theorists has been provided in Table 1. 1. Table 1. 1 Contributions of Pre-classical Theorists Contributor Pioneering ideas Robert Owen (1771–1858)He is considered to be a pioneer of the human resource management process. He advocated the necessity of concern for the welfare of workers. Charles Babbage (1792–1871) As an inventor and a management scientist, he built the pract ical mechanical calculator, which is considered to be the basis of the modern computer. He also advocated the idea of specialization of mental work and suggested the necessity of profit sharing. Andrew Ure and Charles Duplin (1778–1857) They emphasized the necessity of management education, which further paved the way to professionalize management functions.Henry Robinson Towne (1844–1924) He emphasized the significance of skills in running a business. Reviewing the contributions of the pre-classical theorists, it is clear that their focus was more on developing some specific techniques to solve some identified problems. Due to their obvious technical background, they could not think of management as a separate field. By and large, they integrated management with their respective areas of specialization. Andrew Ure, Charles Duplin, and Henry Robinson Towne largely laid the foundation of management theory, which has ultimately shaped modern management thought.Classical School of Thought This school of thought is divided into two approaches—the scientific school and the administrative school. The theorists of this school laid down the foundation of managing an organization in accordance with certain principles. In Table 1. 2, the contributions of each theorist have been highlighted. Scientific management Scientific management is a classical approach that emphasizes the Scientific study of work methods to improve efficiency of workers. Among all the contributors to this school of thought, the contribution of Taylor is thought to be the most important.Regarded as the father of Scientific management, Taylor developed specific principles for this field in 1911. He started his experiments with the concept of Scientific management in 1878 at Midvale Steel Co. During his days at Midvale, he saw that employees were ‘soldiering’, that is, deliberately working at a pace slower than one's capabilities. He concluded that workers indulged in ‘soldiering’ primarily for three reasons: (1) fear of losing their jobs if they increase their output, (2) faulty wage systems, and (3) outdated methods of working. Table 1. 2 Contributions of Classical Theorists Scientific managementFrederick W. Taylor (1856–1915) Development of Scientific management Frank B. and Lillian M. Gilbreth (1868–1972) Time and motion studies Henry L. Gantt (1861–1919) The Gantt chart Administrative theory Henri Fayol (1841–1925) General theory of management Max Weber (1864–1920) Rules of management For eliminating this problem, Taylor developed the principles of Scientific management, emphasizing five important issues: 1. Emphasize organized knowledge rather than rely on rule of thumb 2. Obtain harmony in group action 3. Achieve cooperation 4. Work for maximum output rather than restricted output 5.Develop the potential of the workers both for their self-development and organizational prosperity In essence, Taylor emphasized the following points to achieve organizational efficiency: Develop a Scientific way of performing jobs Train and develop the potential of the workers to perform the job Establish harmonious relations between management and workers In order to ensure that such objectives are achieved, Taylor suggested two important managerial practices: the piece-rate incentive system and time and motion study. The piece-rate incentive system rewards the worker who produces maximum output.Such an incentive system will motivate workers to work more to maximize their earnings. This system requires workers to perform at some pre-decided standard rate to earn their base wages. Standards are decided using time and motion study. If workers are able to produce more, then in addition to their base rate they get incentives on the number of excess units produced over and above the standard units. This serves the interest of workers as well as management—workers feel motivated to maxim ize their earnings, while management gets the benefit of increased productivity.Time and motion study, as already pointed out, facilitates the determination of the standard time required for performing a job. Time study helps in the determination of time required, duly defining the art of recording, analyzing, and synthesizing the time elements of each operation. Motion study, on the other hand, involves study of movements in doing a job in parts. It eliminates wasteful movements and retains only the necessary ones. Thus, it makes a job simple, easier, and better. Taylor developed the time and motion study concepts in association with Frank and Lillian Gilbreth.Like Taylor, Frank Gilbreth is also known as the father of motion study. Lillian Gilbreth conducted research on motion studies. Both of them explored ways of reducing fatigue. They had classified seventeen basic hand motions including search, select, position, and hold, which they called ‘therbligs’ (Gilbreth spe lled backward with ‘th’ treated as one letter). Their approach helps us to analyze the exact elements of a worker's hand movements. A simple modification of a brick-laying approach, following the Gilbreths’ studies, helped to increase hourly output from 120 bricks to 350.Henry Laurence Gantt also worked as a close associate of Taylor at Midvale and subsequently at Bethlehem Steel. His contributions to the Scientific management school of thought are the task and bonus system and a chart commonly known as the Gantt chart, developed in the years 1910–1915. As per his incentive plan, workers receive their day wages even when they do not perform their complete job. On the other hand, they get a bonus when they take less than the normal standard time to complete the work. It was further recommended that there be payment of bonus to foremen as well, based on the incremental performance of workers.The Gantt chart is used for production planning to compare actual a nd planned performances. It is a visual device for production control, indicating progress of production in terms of time rather than quantity. In fact, the programme evaluation and review technique (PERT) concept was subsequently developed based on the Gantt chart. In Chapter 7, the Gantt chart has been illustrated in detail. Some of the drawbacks of scientific management are: The basic principles of scientific management revolve around operations problems and do not focus on managerial issues, essential for managing an organization.That is why it is often said that it is more focused on engineering than on management. The assumptions of this theory about people in general are that they are rational and primarily driven by their desire to fulfill material gains. Only the economic and physical needs of people are emphasized, to the exclusion of their social needs. This theory also ignores the human desire for job satisfaction. Administrative theory Administrative theory, another par t of the classical school of thought, focuses on principles to coordinate the internal activities in an organization.General theory of management The French industrialist Fayol, through his pioneering work General and Industrial Management published in English in 1949, explained that satisfactory results can be achieved with scientific forecasting and proper methods of management. At the outset, Fayol classified the business operations of an organization into six activities and then outlined 14 principles of management. The six activities are: 1. Technical: It is concerned with production and manufacturing. 2. Commercial: It includes all activities related to buying, selling, and exchange. 3. Financial: It ensures optimal use of capital.4. Security: It ensures the protection of employees and property. 5. Accounting: It is concerned with costs, profits and liabilities, maintaining balance sheets, and compiling statistics. 6. Managerial: It is a functional approach to management and i s concerned with planning, organizing, commanding, coordinating, and controlling. After detailing all these activities, Fayol primarily focused on the managerial activities and outlined 14 principles to achieve efficiency. These 14 principles are as follows: 1. Division of labor: If people are specialized at their work, they can perform their task better.This principle recommends grouping of people as per their area of specialization. The modern assembly-line concept is an outcome of division of labor. 2. Authority: Managers must have authority to get things done. Yet, formal authority alone may not help to compel obedience from subordinates; managers must have the expertise to exert personal authority. 3. Discipline: People working in an organization need to comply with rules and agreements that govern the organization. Without discipline, results cannot be achieved. Strong discipline and leadership are inter-connected and these can together create an environment of positive work c ulture.4. Unity of command: Members in an organization must receive instructions from only one person. Conflict will arise when one receives orders and instructions from multiple managers. Therefore, the reporting relationship of one subordinate should be with one superior. 5. Unity of direction: All operations in an organization need to be directed towards one objective. Without this, achievement of goals cannot be ensured. 6. Subordination of individual interest to the common good: The interests of an individual employee should not take precedence over the interests of the organization as a whole. 7.Remuneration: It should be fair to both employees and employers. 8. Centralization: Centralization reduces the role of the subordinates in decision making, while decentralization enhances it. Managers should retain responsibility through centralization but at the same time give their subordinates enough authority to do their jobs properly. 9. Hierarchy: There should be a line of author ity, illustrated in the form of an organization chart clearly showing the structure of authority from the top management to employees down the line. 10. Order: People and materials should be in the right place at the right time.Job allocation to people should be made in a way that suits them. 11. Equity: Managers should be fair to their subordinates. 12. Stability of staff: Employee turnover should be less to ensure efficiency of an organization. 13. Initiative: Subordinates should have the freedom to conceive new ideas and do their task, even though they may commit mistakes. 14. Esprit de corps: Team spirit should be promoted to develop a culture of unity in the organization. Use of verbal communication instead of formal written communication, wherever possible, may help in developing the team spirit in an organization.Bureaucratic theory The bureaucratic theory pioneered by Weber (1920), which falls under the administrative school of thought, emphasizes authority structures and de scription of an organization based on the authority relations. According to Weber, ‘a bureaucracy is highly structured, formalized, and impersonal organization’. In fact, he has advocated the necessity of a formal organization structure with set rules and regulations. The characteristics of a bureaucratic organization as described by Weber are shown in Table 1. 3.Bureaucracy is often misunderstood as being a web of red tape and too many rules. However, Weber's concept is intended to remove ambiguity, inefficiencies, and patronage. Criticism of the classical school of thought Behavioral theorists criticized the classical theorists on a number of grounds. First of all, management principles are not universally applicable in today's complex business situation. Some principles of Fayol are also contradictory, for example, the principle of specialization contradicts the principle of unity of command.Similarly, Weber's bureaucracy also takes away the individual's creativity a nd flexibility, and dissuades them from responding to a complex situation in a global environment. Further, classical theorists also ignored the important aspects of organizational behaviour. These theories do not deal with the problems of leadership, motivation, power, or informal relations. They also fail to consider the internal and external environmental forces affecting an organization. These stress the necessity of achieving productivity, more than anything else. Neo-classical School of ThoughtThis school of thought, which was a transitional phase, basically emphasized human relations. Table 1. 3 Characteristics of Bureaucratic Theory Characteristics Description Specialization of labor Jobs are broken down into routine, well-defined tasks so that members of the organization know what is expected from them and they can become competent enough to do a particular subset of tasks. Formal rules and procedures Written rules and procedures should specify the desired behaviors from me mbers of the organization, facilitate coordination, and ensure uniformity. ImpersonalityRules, procedures, and sanctions should be applied uniformly regardless of individuals. Well-defined hierarchy Multiple levels of positions must be designed carefully keeping in mind the reporting relationships among levels. This should provide for supervision, handling of exceptions, and ability to establish accountability of actions. Career advancement based on merit Selection and promotions should be based on the qualifications and performance of members. Behavioral theories The behavioral school of management emphasizes the human element in an organization, duly recognizing its importance.It puts more stress on individual attitudes and behaviors and on group processes. The major contributors to this school of thought are named inTable 1. 4. Mary Parker Follet was the pioneer of the behavioural approach to management. She recognized the significance of the human element and attributed greater significance to the functioning of groups in the workplace. According to Follet, the critical role of managers should be to bring constructive change in the organization, following the principle of ‘power with’ rather than ‘power over’.She clarified that power should not be based on hierarchical levels but should be collectively developed, fostering a cooperative concept, involving superiors and subordinates, and finally working together as a team. Hence, the need is for more power sharing. Organizations need to become democratic to accommodate employees and managers. People will work harder when the organization recognizes the individual's motivating desires. Table 1. 4 Major Contributors to the Behavioral School Contributors Contributions Mary Parker Follet (1868–1933)Elton Mayo (1880–1949) Abraham Maslow (1808–1970) Douglas McGregor (1906–64) Group influences in the workplace Effect of human motivation on productivity and outp ut Relates human motivation to a hierarchy of needs Emphasizes human characteristics—theory X and theory Y—and the corresponding style of leadership Chris Argyris (1923–present) Human and organizational development—model I and model II While Follet was the pioneer of the behavioural approach to management, it is Elton Mayo who is recognized as the father of the human relations approach.Mayo and his associates conducted their study at Western Electric's Hawthorne Plant between 1927 and 1932, to evaluate the attitudes and psychological reactions of workers in on-the-job situations. Their experiments were carried out in four phases: (1) illumination experiments (2) relay assembly test room experiments, (3) interview phase, and (4) bank wiring observation room experiment. Illumination experiments These experiments took place initially between 1924 and 1927, in Hawthorne Plant of Western Electric Company and involved industrial engineers of the same company.Th e experiments involved manipulation of illumination for one group of workers (test group) and comparing their performance and productivity with another group for whom illumination was not manipulated (control group). In the first spell of experiment, for the test group (for whom the illumination was manipulated) performance and productivity improved. However, this did not last long. In fact, the control group's performance also rose in between with the alteration in lighting conditions for the test group, even though for the control group there was no change in the lighting conditions.With such contradictory results, researchers concluded that intensity of illumination was not related to productivity of workers. There had to be something besides illumination which influenced the performance of workers in Western Electric Company. Elton Mayo and his associates from Harvard University were involved at this point in conducting the subsequent phase of experiments. Relay assembly test ro om experiments This set of experiments was conducted under the guidance of Elton Mayo between 1927 and 1933. At this stage too, researchers were concerned about factors like working hours, working conditions, refreshments, and temperatures.To start with, the researchers selected six women employees of the relay assembly test room. Their jobs were to assemble relay (a small device) using thirty-five spare parts. Selected women employees (samples) were put in a separate room and briefed about the experiments. In the test room, a number of variables were altered, for example, increased wages and rest period, shortened workday and workweek, etc. In addition, the sample workers were given the freedom to leave their workstation without permission and were also given special attention. Productivity increased over the study period.Such results led the researchers to believe that better treatment of subordinates made them more productive. They highlighted the significance of social relations . Finally, the researchers were convinced that workers would perform better if management looked after their welfare and supervisors paid special attention to them. This condition was later labelled as the Hawthorne effect. Interview phase In this phase of the experiments, about 21,000 people were interviewed over three years between 1928 and 1930. The purpose of the interviews was to explore the attitudes of workers in depth.The conclusions that emerged were: A complaint is not necessarily an objective recital of facts; it may also reflect personal disturbance, the cause of which may be deep-rooted. All objects, persons, and events carry some social meaning. They relate to employees’ satisfaction or dissatisfaction. Workers’ personal situations are results of configurations of relationships, involving sentiments, desires, and interests. Such relational variables, when related to the worker's own past and present interpersonal relations, result in their personal situat ion.Workers assign meaning to their status in the organization and give value to events, objects, and specific features of their environment (hours of work, wages, etc. ). Workers derive satisfaction or dissatisfaction from the social status of an organization. This means that they also look for social rewards, associating them with an organization. Workers’ social demands are influenced by social experiences in groups, both inside and outside the workplace. Bank wiring observation room experiment This part of the Hawthorne experiments was conducted to test some of the ideas that the researchers formed during the interview phase.It was conducted between 1931 and 1932. In this experiment, there were fourteen participants (samples) including wire-men, solder men, and inspectors. There was no change in the physical working conditions. Sample workers were paid based on an incentive pay plan, relating their pay to output. They had the opportunity to earn more by increasing the out put. However, as the researchers observed, the output was constant at a certain level. Analysis of the results showed that the group encourages neither too much nor too little work. They enforce ‘a fair day's work’ on their own.Group norms, therefore, are more important to the worker than money. The study, thus, provided some insights into informal social relations within groups. The Hawthorne experiments, by focusing on the importance of human relations, contributed immensely to management theory. In the behavioural school of thought, other contributors like Abraham Maslow, Douglas McGregor, and Chris Argyris also left a significant impact. While Maslow focused on the importance of human needs, which are major driving forces for human motivation, McGregor made certain assumptions about people, categorizing them under theory X and theory Y.Theory X essentially represents a negative view about people, that is, people are lazy by nature, have little ambition, dislike work , avoid responsibility, and require direction to work. Theory Y, on the contrary, assumes that people are more positive, capable of self-control, innovative and creative, and they do not inherently dislike work. These theories have been further discussed in detail in Chapter 5. Chris Argyris's contributions to the behavioral school of thought are extremely important.His contributions comprise the maturity–immaturity theory, the integration of individual and organizational goals, and the patterns of model I and model II. According to the maturity–immaturity theory, people progress from a stage of immaturity and dependence to a state of maturity and independence. If organizations keep their employees in a dependent state, they allow them to remain immature and thereby prevent them from achieving their potential. Argyris further contended that a formal organization develops a rigid structure, compelling people to behave in an immature way. This leads to incongruencebetwee n the individual and organizational goals, hinders organizational development, leads to failure, and fosters frustration and conflict. People end up showing their aggression, regression, and suppression in various ways. Model I and model II patterns are two different assumptions. Workers in the model I type of organization are motivated by the desire to manipulate others and protect themselves from others. Workers in the model II type of organization are less manipulative and more willing to learn and take risks. Argyris, therefore, suggested that managers try to create a model II type of organization.Likert and Drucker have also contributed significantly to this school of thought. Likert attributes low productivity and poor morale of employees to a typical job-centred supervision technique. He has suggested some typical leadership styles to ensure better productivity and improved morale of workers. These have been discussed in detail in Chapter 6. Drucker, on the other hand, pionee red several modern management concepts in the fields of innovation, creativity, problem solving, organization design, and management by objectives (MBO).All his principles have been acknowledged and are referred to throughout this book. Criticism of the neo-classical school of thought Despite the brilliant contributions by the behavioral school of thought to the theories of management, it was criticized on the following grounds: It is believed that the procedures and analysis of the findings and the conclusions drawn thereon have little relevance. In fact, the conclusions are not supported by adequate evidence.The relationship between satisfaction of workers and productivity was established with simplistic assumptions, while in reality the situation is more complex due to behavioral phenomena. Further, all these studies failed to focus on the attitudes of workers, although attitudes play a crucial role in influencing workers’ performance and productivity. Modern Approaches So me modern approaches have played a significant role in the evolution of management theories, such as the quantitative school, the systems theory, and the contingency theory. The quantitative school of thought emerged during World War II.During the war, managers, government officials, and scientists were brought together to help the army to effectively utilize resources. These experts, using some earlier mathematical approaches to the concepts advocated by Taylor and Gantt, solved many logistic problems in the war. Subsequent to the war, such techniques were applied by many organizations to solve their business problems. This school of thought extensively utilizes statistics, optimization models, information models, and computer simulations for decision making and economic effectiveness to solve business problems.It has various branches, such as management science, operations management, and management information systems. The management science approach visualizes management as a lo gical entity, expressing management in terms of mathematical symbols, relationships, and measurement data. Also known as the operations research approach, it is applied in areas like capital budgeting and cash-flow management, production scheduling, product strategy development, human resource planning, and inventory management.Various mathematical tools like queuing theory, linear programming, PERT, CPM, decision theory, simulation, replacement, probability theory and sampling, time-series analysis, and index numbers are used to minimize the error in management decisions. The operations management approach is primarily concerned with production management and its related areas. In fact, it is difficult to draw a line between management science and operations management. Most of the mathematical tools mentioned earlier are used in operations management.Moreover, this approach also helps in decision making in other functional areas like finance, marketing, and human resource manageme nt. The management information systems approach focuses on designing and implementing computer-based information systems for use by management. It converts raw data into information inputs, which are subsequently used by management for decision making. Modern management information systems help in enterprise-wide decision making, integrating all functions of management.Enterprise-wide decision support systems (such as human resource information systems) are used for critical or strategically important decisions, as these provide valuable information inputs. An extension of the quantitative school of thought is the systems theory approach. This approach considers the organization as a whole because of the interdependent nature of activities, requiring the organization to interact with external environmental factors. In this competitive scenario,organizations cannot function in isolation. It has to operate in open systems, interacting with the environment.Whether it is new-product dev elopment or employee selection, the organization has to consider them as open systems, as its decisions are interrelated and interdependent with the environmental situation. Synergy is the phenomenon of open systems of management by which the total system is more than a simple sum of its parts. It means that if a manager effectively coordinates the efforts of related sub-systems, the result will be greater than the sum total of such independent efforts, that is, 2 + 2 will be greater than 4. The systems approach to management is also important because it helps in avoiding entropy.Entropy is a syndrome wherein systems and processes eventually decay. By relating the organization to the environment, following a systems approach, such a situation can be averted. The contingency theory approach discards the concept of universality in management principles and determines managerial decisions considering situational factors. The task of a manager, as per this theory, is to identify which t echniques will—in a particular situation, under particular circumstances, at a particular point of time—best contribute to achieving organizational goals.The theory contends that organizational phenomena exist in a logical pattern, which managers can understand gradually by interpreting various situations. They can thereby frame their managerial styles, which vary from situation to situation. The contingency theory and the systems theory are together classified as the integrative school of management thought because these two theories integrate the classical, behavioral, and quantitative theories into a framework that uses only the best of each approach in a given situation.