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Module I Chapter:2

Evolution of Management Theory


1.What is Theory? Theory is a coherent group of assumptions put forth to explain the relationship between two or more observable facts and to provide sound basis for predicting future events. Theories are perspectives with which people make sense of their world experiences.

2.Why study Management Theory? First, theories provide a stable focus for understanding what we experience. Second, theories enable us to communicate efficiently and thus move in to more and more complex relationships with other people. Third, theories make it possible- indeed, challenge us-to keep learning about our D.G.,GIT,MBA-I 3 world.

3.The Evolution of Management Theory: Management and Organizations are products of their historical and social times and places. We can understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular time in the history.

4. Focus of Study: Following Management theories: 4.1: The Scientific Management Theory. 4.2: The Classical Organization Theory. 4.3: The behavioral school Theory. 4.4: The management science Theory.


Following recent integrative approaches: 1.1: The System Approach 1.2: The Contingency Approach 1.3: The dynamic engagement Approach


4.1: The Scientific Management Theory: 1.Why this theory has arisen? There was need to increase productivity in USA when labor was in short supply at the beginning of 20th Century. The only way to expand productivity was to raise the efficiency of workers. 2. Frederick W. Taylor, Henery L Gantt and Frank and Lillian Gilberth devised body of principles known as scientific management theory.

3.Principles of Scientific Management: Frederic W.Taylor:[1856-1915] 1.The development of true science of management, so that the best method for performing each task could be determined. 2. The scientific selection of workers. 3. The scientific education and development of worker.

4. Intimate, friendly co-operation between management and labor. Taylor believed that management and labor had a common interest in increasing productivity. Taylor based his management system on production-line time studies.


He also encouraged employers to pay more productive workers at a higher rate than others using a scientifically correct rate that would benefit both company and worker. Taylor called his plan differential rate system. Henry L. Gantt:[1861-1919] Gantt worked with Taylor on several projects. But he had different view on

Taylors incentive system. Gantt came up with a new idea. Every worker who finished a days assigned work load would win around 50- cent bonus. Then he added a second motivation. The supervisor would earn a bonus for each worker who reached the daily standard; plus an extra bonus if all the workers reached it.

This will motivate supervisors to train their workers to do a better job. Every workers progress was rated publicly and recorded on individual bar charts- in black on days the worker made the standard, in red when he or she fell below it. Gantt originated a charting system for production scheduling-The Gantt Chart.

The Gantt chart is still in use to-day. It also formed the basis for charting devices which were developed to assist in planning, managing and controlling complex organizations. One such device is Critical Path Method(CPM), originated by Du Pont and another device is Program Evaluation and Review Technique[PERT] developed by Navy.

The Gilbreths:(1868-1924 and 1878-1972) They made their contribution to the scientific management movement by study of fatigue and motion studies and focused on ways of promoting individual workers welfare. Using motion picture cameras, they tried to find the most economical motions for each task in order to upgrade performance and reduce fatigue. Every motion that was eliminated reduced the fatigue.

According to Gilberths, motion study would raise worker morale because of its obvious physical benefits and managements concern for the worker. Contributions of Scientific Management Theory: The contribution of Scientific Management is immense in providing concept of improved production techniques to modern assembly lines pouring production at very fast rate. Its efficiency techniques have been applied to many tasks in

non-industrial organizations, ranging from fast-food service to the training of surgeons. Limitations of Scientific Management Theory: 1.The workers began to oppose Taylors methods of increase in productivity and higher pay out of the fear that working harder or faster would exhaust the work


available, causing layoffs. 2. The emphasis on productivity- and by extension, profitability led some managers to exploit both workers and customers. As a result, more workers joined unions and the seeds of suspicion and mistrust were sown.



4.2:Classical Organization Theory School: Scientific Management was concerned with increasing the productivity of the Shop and the individual worker. Classical organization theory grew out of the need to find guidelines for managing such complex organizations as factories.



Henri Fayol(1841-1925) is generally hailed as the founder of the classical management school. He made an attempt to identify the principles and skills that underline effective management. Fayol has laid down following principles of management: 1.Division of Labor.

2. Authority. 3. Discipline. 4. Unity of Command 5. Unity of Direction. 6. Subordination of individual interest to the common good. 7. Remuneration. 9. Centralization.

10.The Hierarchy 11. Order 12. Equity 13. Stability of Staff 14. Initiative 15. Esprit de corps- Promoting team spirit will give organization a sense of unity.

Taylor was concerned with Organizational functions whereas Fayol was interested in the total Organization. Before Fayol, it was generally believed that managers are born, not made. Fayol insisted that management was a skill like any other- one that could be thought once its underlying principles were understood.

Max weber (1864-1920) developed a theory of bureaucratic management that stressed for the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. Marry Parker Follet(1868-1933) :She introduced many new elements, especially in the area of human relationship and Organizational structure.

According to Follet no one could become a whole person except as a member of the group, human beings grew through their relationships with others in the Organization. In fact, She called management the art of getting things done through others



Chester I Barnad(1886-1961): He believed that individual and organizational purposes could be kept in balance if the managers understood an employees zone of indifference- that is, what the employees would do without questioning the managers authority.



Obviously more activities fall within an employees zone of indifference-that is , what the employees do without questioning the managers authority, the smoother the organization would be. Companies are increasingly using teams. Because teams are generally selfmanaging, Supervisory roles are limited.

4.3: The Behavioral School: The behavioral school emerged partly because the classical approach did not achieve sufficient production efficiency and work place harmony. The behavioral school deal more effectively with people side of the Organization. A group of management scholars trained in sociology and psychology and related fields help management with knowledge to propose more effective ways to manage people in the Organization.



The human relations movement and focus on better human relations was highlighted by this School of thought. The Hawthorne experiments by the scholar Mayo were conducted at the work place to focus need for better working conditions to improve productivity and performance.



Behavioral scientists brought new dimensions to the study of Organization and Management. According to Maslow, the needs that people are motivated to satisfy fall in to a hierarchy. -Physical and Safety needs --Ego needs -Self-actualizing needs

Mc Gregor provided another angle on this problem. He distinguished two basic assumptions about people and their approach to work. These two assumptions are called Theory X and Theory Y Theory X assumes that people are lazy and they can be motivated by force, money or praise. Theory Y assumes that people are inherently motivated to work and do a good job.



4.4: The Management Science School: Approaching the management problems through the use of mathematical techniques for their modeling, analysis and solution. The Operations research group was formed for this purpose.



Recent approaches: 1.1: The System Approach: View the organization as a united, directed system of interrelated parts. 1.2: The Contingency Approach: The view that management technique that best contributes to the attainment of Organizational goals might vary in different situations or circumstances.

1.3: Dynamic engagement: The view that time and human relationships are forcing management to rethink traditional approaches in the face of constant, rapid change.



Any Questions? Thank you