3. Management – Evolution & Trends

Management – Classical Schools of Thought

Management as a practice gained ground when the concept of working together in groups to achieve common objectives was realized by men. But the study of management as a systematic field of knowledge began at the advent of the Industrial Revolution, which ushered in a new era of serious thinking and theorizing on management.  

To begin with, there is no single universally accepted theory of management. “The wild array of management theories could even look like a jungle” says Harold Koontz. However, to help put the different theories in perspective, we shall discuss them as representing different schools of thought. 

Classical School of Management Thought 

Scientific Management and F. W. Taylor  

Scientific management, according to an early definition, refers to “that kind of management which conducts a business or affairs by standards established by facts or truths gained through systematic observation, experiment, or reasoning.” Advocators of this school of thought attempted to raise labor efficiency primarily by managing the work of employees on the shop floor.
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Fredrick Winslow Taylor is called “father of scientific management.” He joined as a labour at Midvale steel company in U.S.A at 1878.He became chief engineer in the year 1884 in the same company. He published papers on “price rate system” and shop management. He published a book on “the principles of scientific management” in 1911.             
Taylor attempted a more scientific approach to management as well as the problems and the approach was based upon four basics principles.
 Observation and measurement should be used in the Organizations.
 The employees should be scientifically selected and trained.
 Due to scientific selection and training of employee has the opportunity of earning a high rate of pay.               
A mental revolution in the form of constant cooperation between the employer and employees should be given the benefits of scientific management.

Principles of scientific management                       
Taylor conducted various experiments at the work place to find out how human beings could be made more efficient by standardization the work.
The following are the features of scientific management.
1 .Separation of planning and doing:
 Taylor suggests the separation of planning from actual doing.
 Taylor says that supervisor should be done the planning.
 The workers only concentrate on doing the work.
2. Functional foremanship:
 Taylor developed a theory called functional foremanship based on specialization of functions.
 In this system eight foreman were involved to direct and control the activities of the workers.
3 .Job analysis:         
Every job that requires minimum movements and less cost and least time is the best way of doing the job. This can be determined by motion, time and fatigue study.
(a)Time study:             
The movement, which takes minimum time, is the best one. This helps in firms the fair work for a period.
(b) Motion study:                 
Taylor suggested that eliminating wasteful movements and performing only necessary movements.
(c)Fatigue study:           
Employees are both physical as well as mental fatigue easily. Fatigue study indicates the amount and frequency of rest required in completing the job. Taylor suggests a fair day‟s work requiring certain movements and periods to complete it.
4. Standardization:             
Standards must be maintained in respect a instruments and tools, period of work, amount of work, working conditions, cost of production etc. Normally these standards will be fixed in advance on the basis of various experiments
5. Scientific selection and training: 
Taylor has suggested that workers should be selected on scientifically.  A worker should be physically and technically most suitable.  After selection should be given on the training of workers which makes them more efficient and effective.
6. Financial incentives: 
Financial incentives can motivate the workers to put in their maximum efforts.  According to this scheme a worker who completes the normal work gets wages at higher rate.  Who does not complete gets at a lower rate.  Taylor has suggested that wages should be based on individual performance and not on the position which he occupies.
7. Economy: 
Scientific management enhances profit and economy.  The economy and profit can be achieved by making the resources more productive as well as by eliminating the wastages.
8. Mental Revolution:  Scientific management is based on co-operation between management and workers.  Co-operation enhances the effective managerial activities.  Mutual conflict should be replaced by mutual co-operation which is beneficial to both

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Frederick Winslow Taylor, who is generally acknowledged as “the father of scientific management” believed that organizations should study tasks and prepare precise procedures. His varied experience gave him ample opportunity to have firsthand knowledge and intimate insight into the problems and attitude of workers, and to explore great possibilities for improving the quality of management in the workplace.  

Formulating his theory based on firsthand experience, Taylor’s theory focused on ways to increase the efficiency of employees by molding their thought and scientific management.
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Henry Gnatt, an associate of Taylor, developed the Gnatt Chart, a bar graph that measures planned and completed work along with each stage of production. This visual display chart has been a widely used control and planning tool since its development in 1910. Following is a sample of Gnatt Chart. 

Frank Gilbreth and his wife, Lillian Moller Gilbreth further improvised on Taylor’s time studies, devising “motion studies” by photographing the individual movements of each worker. They carefully analyzed the motions and eliminated unnecessary ones. These motion studies were preceded by timing each task, so the studies were called “time and motion studies.”

Applying time and motion studies to bricklaying, the Gilbreths devised a way for workers to lay bricks that eliminated wasted motion and raised their productivity from 1,000 bricks per day to 2,700 bricks per day.

The Basic Principles of Scientific Management 

 Developing new standard method of doing each job.

 Selecting training and developing workers instead of allowing them to self-train and choose their own tasks.

 Develop cooperation between workers and management.

 Division of work on the basis of the group that is best fitted to do the job

Henry Fayol’s Universal Process Theory

Henry Fayol, a French industrialist concentrated on that administrative aspect of scientific management. His contributions and concentrated in his famous book” The general and industrial administration”. Fayol‟s famous book into two parts. The first is concerned with the theory of administration in which Fayol divided the total industrial activities into six categories which are given below:

1. Technical (Production, Manufacture)
2. Commercial (Buying, Selling, Exchange)
3. Financial (Search for and optimum use of capital)
4. Security (Protection of property and person) 5. Accounting (Balance sheets, Cost statistics)
6. Management (Planning, Organizing, Coordinating, Directing, Controlling)
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One of the oldest and most popular approaches, Henry Fayol’s theory holds that administration of all organizations – whether public or private, large or small – requires the same rational process or functions.  This school of thought is based on two assumptions:
 Although the objective of an organization may differ (for example, business, government, education, or religion), yet there is a core management process that remains the same for all institutions.
 Successful managers, therefore, are interchangeable among organizations of differing purposes. The universal management process can be reduced to a set of separate functions and related principles.
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Fayol identifies fourteen universal principles of management, which are aimed at showing managers how to carry out their functional duties

1. Specialization of labor 
This improves the efficiency of labor through specialization, reducing labor time and increasing skill development.
2. Authority 
This is the right to give orders which always carry responsibility commensurate with its privileges.
3. Discipline 
It relies on respect for the rules, policies, and agreements that govern an organization. Fayol ordains that discipline requires good superiors at all levels.
4. Unity of command 
This means that subordinates should receive orders from one superior only, thus avoiding confusion and conflict.
5. Unity of direction 
This means that there should be unity in the directions given by a boss to his subordinates. There should not be any conflict in the directions given by a boss.
6. Subordination of individual interest to common good 
According to this principle, the needs of individuals and groups within an organization should not take precedence over the needs of the organization as a whole
7. Remuneration 
Wages should be equitable and satisfactory to employees and superiors.
8. Centralization 
Levels at which decisions are to be made should depend on the specific situation, no level of centralization or decentralization is ideal for all situations.
9. Scale of chain 
The relationship among all levels in the organizational hierarchy and exact lines of authority should be unmistakably clear and usually followed at all times, excepting special circumstances when some departure might be necessary.
10. Order 
There should be a place for everything, and everything should be in its place. This is essentially a principle of organization in the arrangement of things and people.
11. Equity 
Employees should be treated equitably in order to elicit loyalty and devotion from personnel.
12. Personal tenure 
Views unnecessary turnover to be both the cause and the effect of bad management; Fayol points out its danger and costs.
13. Initiative 
Subordinates should be encouraged to conceive and carryout ideas.
14. Esprit de corps 
Team work, a sense of unity and togetherness, should be fostered and maintained.

Behavioral and Human Relations Approach  
The criticism of scientific and administrative management approach as advocated by Taylor and Fayol, respectively gave birth to the behavioral approach to management. One of the main criticisms leveled against them are their indifference to and neglect of the human side of the enterprise in management dealings.
A good number of sociologists and psychologists like Abraham Maslow, Hugo Munsterberg, Rensis Likert, Douglas McGregor, Frederick Herzberg, Mary Parker Follet, and Chester Barnard are the major contributors to this school of thought, which is further subdivided by some writers into the Human Relations approach and the Human Behavioral approach.

Elton Mayo and Hawthorne Studies 
Elton Mayo and Hugo Munsterberg are considered pioneers of this school. The most important contribution to this school of thought was made by Elton Mayo and his associates through Hawthorne plant of the Western Electric Company between 1927 and 1932. The  plant  employed  29,000  workers  to manufacture   telephone  parts  and  equipment.  We   briefly   describe    these   experiments   in the   following   four  parts:
   Illumination   Experiments.
   Relay  Assembly  Test  Room.
    Interviewing   Programme.
   Bank  Wiring  Test  Room.

ILLUMINATION   EXPERIMENTS      
In this phase, the popular belief that productivity is correlated with illumination was tested.  Experiments were   done on a group   of  workers.   Their  productivity    was   measured  at  various levels  of  illumination.  But  the results  were  erratic.   Puzzled   with  this  phenomenon,   researchers,  improved  their  methodology.     2  groups   of  workers,  in  different  buildings are take.  One   group  called   the   control   group   worked   under   constant   level   of   illumination  and  the  other  group  called  the  test  group   worked  under  under  changing  levels  of  illumination.  The   post-test   productivity  of   the  two  groups   was  then   compared  and    it  was  found  that  illumination  affected  production  only  marginally.

RELAY   ASSEMBLY TEST ROOM 
In this  phase,   the  object  of the  study   was  broadened.  It   now  aimed  at  knowing  not  only  the  impact  of  illumination  on  production  but also  of  such  other  factors  as length  of  the  working  day,  rest  pauses ,   their  frequency  and  duration  and    other  physical  conditions.  A  group  of   six  women  workers,  who  were  friendly  to  each  other,  was  selected   for  this experiment.   These   women  workers,   were  told   about  the  experiment  and were   made   to  work  in  a  very   informal  atmosphere  with  a  supervisor- researcher  in  a  separate  room.   The superviser-researcher  acted  as  their   friend,  philosopher   and  guide.   During  the  study , several  variations  were  made  in  the  working  conditions  to  find   which   combinations   of   conditions was  most   ideal  for   production .   Surprisingly,  the  researchers  found  that  the  production  of  the  group   had   no  relation  with  working  conditions.   It  went  on  increasing  and  stabilized  at a  high  level   even  when  all the  improvements  were  taken   away . The following factors are identified for the constant performance,
A. Warm informality in the small group and tension-free inter personal and social relations as a result of the relative freedom from strict supervision and rules.
B. High group cohesion among girls.

INTERVIEWING  PROGRAMME
 In  this  phase,   they    wanted  to  know  as  to  what  were  the  basic  factors  responsible  for  human   behavior    at  work.  For   this  purpose  they  interviewed   more   than   20,000   workers. At   first,   direct   questions   were  asked  relating  to  the   type  of  supervision,   working conditions,    living   conditions   and   so   on.   But   since   the   replies   were   guarded,  the technique   was  changed   to Non-directive  type  of   interviewing.   In   which   workers   were free  to  talk.   This  study  revealed   that  the  workers‟   social   relations   inside  the   organisation  influence   their  attitudes   and   behaviors.

BANK   WIRING OBSERVATION ROOM
This   phase involved   an in-depth   observation   of   14 men making   terminal   banks    of telephone   wiring   assemblies,   to   determine   the  effect    of   informal   group  norms  and formal economic   incentives   on  productivity.   It   was  found  that   the   group  evolved  its   own production    norms   for  each   individual    worker,  which  were   much  lower   than   those   set by  the  management.   Workers  would   produce   that  much   and  no  more,   thereby   defeating   the incentive   system.

Following are the findings of Mayo and his colleagues from Hawthorne studies:

 Human/social element operated in the workplace and productivity increases were as much an outgrowth of group dynamics as of managerial demands and physical factors.

 Social factors might be as powerful a determinant of worker-productivity as were financial motives.

 Management with an understanding of human behavior, particularly group behavior serves an enterprise through interpersonal skills such as motivating, counseling, leading and communicating – known as Hawthorne effect.

 Employees or workers are social beings, so it is very important to fit them into a social system, resulting in a complete socio-technical system in an organization.

Criticism Following are the criticisms of Hawthorne studies: 

 Unreasonably high emphasis on the social or human side as against organizational needs.

 The approach facilitates exploitation of employees by keeping them satisfied and happy, manipulating their emotions which in fact, serves the management goal of increasing productivity.

BEHAVIOURAL APPROACH

This approach is an improved and a more mature version of the human relations approach to management. Douglas McGregor, Abraham Maslow, kurt Lewin, Chester Barnard, Mary Parker Follett, George Homans, Rensis Likert, Argyris, and Warren Bennis 18 are some of the foremost behavioral scientists contributed to the development of the behavioral approach to management. These people prefer more flexible organisation structures and jobs built around the capabilities and aptitudes of average employees. to participative and group decision-making. Encouraging the process of self-direction and control . It emphasizes  organisations as groups of individuals with certain goals. The democratic-participative style is desirable, motivation is complex man. This model suggests that different people react differently to the same situation or react the same way to different situations. No two people are exactly alike, and the manager should tailor his attempts to influence people according to their individual needs. Conflict is inevitable and sometimes is even desirable.

Management – Modern Schools of Thought 

This school of thought primarily focuses on the development of each factor of both workers and the organization. It analyzes the interrelationship of workers and management in all aspects.
System Approach and Contingency Approach are the two approaches by this school of thought.

Chester Barnard and Social Systems Theory  

One of the most important contributions to this school has been made by Chester I. Barnard. His classic treatise entitled "The Functions of the Executive", published in 1938, is considered by some management scholars as one of the most influential books published in the entire field of management. Like Fayol, Barnard based his theories and approach to management on the basis of his first-hand experience as a top-level executive.

Fundamentals of System Approach:

 All organizations are a co-operative system.

 As co-operative systems, organizations are a combination of complex physical, biological, personal and social components, which are in a specific systematic relationship by reason of the co-operation of two or more persons for at least one definite end.

 An employee’s role and his co-operation are a strategic factor in achieving organizational objectives.

Criticism 
Following are the criticisms that this theory received.
 Long on intellectual appeal and catchy terminology and short on verifiable facts and practical advice.

 Complex in nature, particularly when it comes to the study of large and complex organizations.
However, we can conclude that the system approach is an instructive approach and way of thinking rather than a systematic model of solution to explain the complexities of managing modern organizations.

SOME   KEY   CONCEPTS: 

SUBSYSTEM:

While an organisation as a whole is a system, the various components or parts within it are called the subsystem. Thus a department is a subsystem of the organisation.

CLOSED SYSTEM;
A system that does not interact with its environment A closed system has fixed boundaries, its operation is relatively independent of the environment outside the system.

OPEN SYSTEM;
A system that interacts with its environment. Thus an open system is one which constantly comes into contact with the environment.

 
SYNERGY:

Synergy means that departments that interact cooperatively are more productive than they would be if they operated in isolation. These resources are called as inputs. These inputs are converted into products using technology, systems and methods. Systems approach of management provides an integral approach to management. 

This approach is more useful in managerial decision. It provides a framework through which organisation. Environment interaction can be analyzed and contributes for effective decision-making.

Contingency Approach and Recent Contributions 

The Contingency Management theory evolved out of the System Approach to managing organizations. According to the Contingency approach, management is situational; hence there exists no single best approach to management, as situations that a manager faces is always changing. 

However, situations are often similar to the extent that some principles of management can be effectively applied by identifying the relevant contingency variables in the situation and then evaluating them. 

Peter F. Drucker, W. Edwards Deming, Laurence Peter, William Ouchi, Thomas Peters, Robert Waterman, and Nancy Austin are some of the most important contributors to management thought in recent times. This has emerged perhaps as the best approach as it encourages management to search for the correct situational factors for applying appropriate management principles effectively. 

On the basis of the Tom Peters and Robert Waterman’s research focusing on 43 of America’s most successful companies in six major industries, the following 9 principles of management are embodied in excellent organizations: 

 Managing Ambiguity and Paradox: The ability of managers to hold two opposing ideas in mind and at the same time able to function effectively. 

 A Bias for Action: A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive. 

 Close to the Customer: Staying close to the customer to understand and anticipate customer needs and wants. 

 Autonomy and Entrepreneurship: Actions that foster innovation and nurture customer and product champions. 

 Productivity through People: Treating rank-and-file employees as a source of quality. 

 Hands-On, Value-Driven: Management philosophy that guides everyday practice and shows the management’s commitment. 

 Stick to the Knitting: Stay with what you do well and the businesses you know best. 

 Simple Form, Lean Staff: The best companies have very minimal, lean headquarters staff. 

 Simultaneous Loose-Tight Properties: Autonomy in shop-floor activities and centralized values. 

Quality School of Management 

The Quality School of Management (also known as Total Quality Management, TQM) is a fairly recent and comprehensive model for leading and operating an organization. The prime focus is on continually improving performance by focusing on customers while addressing the needs of all stakeholders. In other words, this concept focuses on managing the entire organization to deliver high quality to customers. 

The quality school of management considers the following in its theory: 

 Quality of the Company’s Output: Focus on providing goods and services that satisfy the customer requirements, which is presumed to be a key to organizational survival and growth. 

 Organizational Structure: Every organization is made up of complex systems of customers and suppliers and every individual will need to function as both a supplier and a customer. 

 Group Dynamics: Organization should foster an environment of working in groups. Management should recognize and nurture harmony and efficiency in these groups, which are the catalysts for planning and problem solving. 

 Continuous Improvement: Constantly review the company’s policies and processes. This will lead to specialization and ultimately better outcomes. 

 Transparency and Trust: Connect with employees at all levels and create a culture of trust and stability.

Kaizen Approach 

Kaizen means that everyone is involved in making improvements. Kaizen (pronounced ky zen) is based on the Japanese management concept for incremental change and improvement. 

The idea of continuous improvement suggests that managers, teams, and individuals learn from both their accomplishments and their mistakes. It is a long-term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality. 

While the majority of changes may be small, the greatest impact may be improvements or changes that are led by senior management as transformational projects, or by crossfunctional teams as Kaizen events.

Kaizen Process Following are the steps involved in Kaizen Process. 

 Identifying opportunities for improvement 

 Testing new approaches  Recording the results  

 Recommending changes 

Reengineering Approach 

Reengineering Approach sometimes called Business Process Reengineering (BPR), involves a complete rethinking and transformation of key business processes, leading to strong horizontal coordination and greater flexibility in responding to changes in the environment. The reengineering approach focuses on sensing the need to change, anticipating changes, and reacting effectively when it happens. 

Following are the steps involved in reengineering process. 

 Develop business vision and process objectives 

 Identify business processes 

 Scope and measure existing processes 

 Design and build new process prototypes  Implement and manage changes

Future of Management 
Modern management approaches respect the classical, human resource, and quantitative approaches to management. However, successful managers recognize that although each theoretical school has limitations in its applications, each approach also offers valuable insights that can broaden a manager's options in solving problems and achieving organizational goals. Successful managers work to extend these approaches to meet the demands of a dynamic environment.
Just as organizations evolve and grow, employee needs also change over time; people possess a range of talents and capabilities that can be developed. In order to optimize outcomes, organizations and managers, should respond to individuals with a wide variety of managerial strategies and job opportunities.
Important aspects to be considered, as the 21st century progresses, include the following: 
 Organizations need to commit to not just meeting customer needs but exceeding customer expectations through quality management and continuous improvement of operations.

 Reinvent new methods of process improvements and constantly learn new ways and best practices from practices in other organizations and environments.

 Organizations must reinvest in their most important asset, their human capital. They need commit to effectively and positively use human resources by reducing attrition rates. 

 Managers must excel in their leadership responsibilities to perform numerous different roles.