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EVOLUTION OF MANAGEMENT THOUGHT

Historical Background:=>
The historical of management is as old as human civilization.
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In traditional period when the human started to settled their life in the group, the
concept of management was developed more or less.
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Early management thoughts have come from Roman Catholic, Military
Organizations, the camera lists, a group of German and Australian Public
administrator and Intellectual during 16th to 18th centuries.
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The industrial revolution (of about 1750 A.D.) had a great impact on the development
of management thought.
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In 19th century, James Watt (17761848) and Robinson Boulton (1779-1932; Robert
Owen (17711858), Charles Babbage (1792-1781), a prominent mathematician,
Charles Dupin (17841873) etc. developed management thought and practiced
significantly.
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Since 950s, academicians have contributed significantly to the theoretical aspect of
management. The variety of approaches to management analysis has been as the
management theory jungle.
The evolution of management thought can be classified into six theories.
1.
The Classical Theory
Scientific Management Theory
Administrative Management Theory
Bureaucracy Theory
2.
The Human Relation Theory (Behavioural Theory)
3.
The Decision Theory (Process Theory)
4.
The Management Science Theory
5.
The System Theory
6.
The Contingency Theory
1.

THE CLASSICAL THEORY:I.

The Scientific Management Theory:Introduction of F.W. Taylor
Father of Scientific Management.
Duration: (1856 to 1928) A.D.
Joined in Midvale Steel Company as a worker.
Left Midvale Steel Company in 1898 and transferred to Bethlehem Steel Company.
After retirement, worked as a consultant.
Developed a new philosophy named Scientific management.
Scientific Management took place in the world as a movement, Propounded by
F.W. Taylor and later developed by the persons like Frank and Lilian, Henry L. Gantt,
Morisk L. Cook, Harinkton and Emersion. The theory of scientific management added a
mew dimension to the theory and practice of management. The management practitioners
were enlightened as how to work most use of the labour force employed in industries. The
theory of management dealt not only with the techniques of managing factory shop but it also
outlined certain principles based on which the jobs in industrial organizations could be
performed best. The techniques of work measurement embodying time and motion study
fatigue study, functional foremanship, standardization and specialization of tools and work

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method, piece rate system (differential rate system) of remunerations were all aimed at
finding out one best way of doing a particular piece of work and selecting, training placing
and remunerating the workers such that they could be most productive at work. The theory of
scientific management also asserts following principles or philosophies as the guidelines
while managing industrial organization including the labour force.
Science, not rule of thumb.
Harmony, not discord.
Cooperation, not individualism.
Development of employees, through scientific selection, training and development.
Maximum outputs, not restricted output, productivity and efficiency without limit.
Planning and functional supervision by mgmt, getting the work done by workers.
As evidence from the above discussion, scientific management had profound
effect on the behaviour of the mgmt practitioners.
Description of Principles:i) One best method:- There is one best method of performing each job. Time and motion
study should be used to find out the best method of performing each component of the job. It
requires scientific study and analysis of each job in order to replace the old rule of thumb.
ii) Management Labour Harmony:- There should be harmony between management and
labour. There should be proper understanding with in the groups. The increase in profits both
employees and employer.
iii) Co-operation:- In the place of individualism close co-operation between employer and
employees should be created.
iv) Education and development of workers:- Scientific management suggests scientific
selection of employees and their proper training and development. Just as machines work best
when well maintained and lubricated so as properly trained, paid and developed workers
produce the best in good working conditions. Incentive system should be based on earn more
by performing more.
v) Maximum Outputs:- Scientific management is more concerned with the continuous
increase in production and productivity. Maximum outputs will bring higher profits for the
employer and employees.
vi) Functional Foremanship:- Taylor suggested two mew concepts.
a) Separation of planning and doing inn the factory
b) Functional foremanship. Planning and functional supervision is done by
management or foreman and getting the work done by workers.
vii) Specialization:- There should be specialization by division of work. Workers should
specialize in particular type or work to achieve the highest level of efficiency.
Productivity and efficiency are the foundation of scientific management theory. It
states that productivity can be improved endlessly; inefficiency should not be allowed.
Contribution of Scientific Management:=>
It promoted mass production through efficiency techniques.
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It introduced differential payment system or piece rate system.
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It facilitated job design through specialization and standardization of work.

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It gave importance to selection, training and compensation or workers for improving

productivity.
It introduced rational and systematic methods to solve management problems. It
replaced rule of thumb methods of doing work by scientific methods.

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Rule of Thumb:A practical method of dong or measuring something usually based on past experience
rather than an exact measurement.
Criticisms / Limitations of Scientific Management:Although Taylors methods led to dramatic increase in productivity and to higher pay
in a number of instances, his theory wasnt free from limitations. Some limitations /
criticisms are as follows:=>
His theory placed too much emphasis on rational and economic nature of me,
neglected human aspects.
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Emphasis on higher productivity places undue pressure or workers. Work becomes
monotonous. Workers become hostile (aggressive or very unfriendly or ready to fight)
to time and motion study. No two individuals can be expected to work in the same
rhythm, attention.
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There is n best method of doing job in all work situations.
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Systematized methods of scientific management were applicable mainly in stable
work environments and have less application in dynamic and complex organizations.
II.
The Administrative Management Theory:About Henry Fayol (1841-1925)
Considered as father of Administrative Management Theory.
Was French Mining Engineer and became managing directors and successful
industrialist.
In 1916, published a famous book in French language, Administrative Industrielle
Generale.
Translated into English in 1929 under the little General and Industrial Management.
Administrative Management theory, an early attempt, pioneered by Henry
Fayol (1841-1925) focuses on managing the total organization. He attempted a systematic
analysis of the overall management process. He looked at the problem of managing
organization with the management point of view. His contribution to management process
can be discussed under the following four heads.
a) Managerial Qualities and Skills:Fayol said that management is a skill that can be learned. According to his views,
managers are made, not born. He emphasized that managers should posses these qualities to
be effective in their job. The important managerial skills and qualities are: Physical: Health, energetic and dress.

Mental: Able to understand, judgment, mental vigour and adoptability.

Moral: Energy, firmness, willingness to accept responsibility, loyalty etc.

Educational: Gained knowledge.

Technical: Peculiar to the functions being performed.

Experience: Gained from the work.

b) Division of Business Activities:Fayol has classified all business activities into six categories:
Technical: Manufacturing

Commercial: Marketing products (buying, selling, exchange)

Financial: Acquiring and optimum utilization of capital

Security: Security of property and people

Accounting: Recording financial transactions and people

Managerial: Planning, organization, commanding, coordinating and controlling

c) Principles of Management:Fayol focused on managerial task. He developed fourteen principles of management

which are universally applicable in all types of business organizations. They are:
Division of work: Specialization of labor is necessary for organizational success.

Authority and responsibility: The right to give orders must accompany

responsibility.

Discipline: Obedience and respect help an organization runs smoothly.

Unity of command: Each employee should receive orders from only one superior.

Unity of direction: The efforts of everyone in the organization should be coordinated

and focused in the same direction.

Subordination of individual interest to general interest: Resolving the tug of war

between personal and organization interests in favor of the of the organization is one
managements greatest difficulties.

Remuneration: Employees should be paid fairy in accordance with their

contribution.

Centralization: The relationship between centralization and decentralization is a

matter of proportion; the optimum balance must be found for each organization.

Scalar chain or span of management: Subordinates should observe the formal chain
of command unless expressly authorized by their respective superiors to communicate
with each other.

Order:- Both material things and people should be in their proper places.

Equity:- Fairness that results from a combination of kindliness and justice will lead to
devoted and loyal service.
Stability and tenure of personnel: People need time to learn their jobs.

Initiative: One of the greatest satisfactions is formulation and carrying out a plan.

Esprit de corps: Harmonious effort among individuals is the key to organizational

success

d) Elements of Management:Henry Fayol regard elements of management as its functions. According to Fayol, To
manage is to forecast and plan, to organize, to command, to coordinate and to control.
Hence, Fayol classified elements of management as planning, organizing, commanding,
coordinating and controlling functions.
III.
The Bureaucratic Theory:About Max Weber (1864-1980)
Propounded Bureaucratic Theory
Were a German Sociologist and contemporary of Taylor and Fayol
The Bureaucratic Theory of organization and management, pioneered by Max Weber,
a German Sociologist, focused strictly defined hierarchy governed y clearly defined
regulations and lines of authority. It was advocated as the most efficient model to manage
complex organization. The bureaucracy was defined ass ideal system where in positions and
task were clearly defined, division of labour was precise and clear objectives were explicit
and a clear chain of command was maintained. The bureaucratic theory posses the following
characteristic.
Clearly defined and consistent rules and procedures.
Division of labour based on functional specialization, each department has to look
after specific function.
Well-defined hierarchy of authority, scalar chain from top to bottom.
Assignment of activities to individuals as fixed duties.
Technical competence for employment and promotion no arbitrary dismissal (not
seeming to be based on a reason system or plan, or protection against arbitrary
dismissal)
Impersonality or personal, relations, social distance between superior and subordinate
to ensure impartibility and objectivity.
Advantage of Bureaucracy Model: Useful to manage big and complex organizations like government, army, global
business and international organizations.
Decision-making is rational based on clear-cut objectives, rules, procedures and
authority.
Technical competence in employees facilities specialization and right person in right
job.
Disadvantage of Bureaucracy Model: Lacks innovation and flexibility.
Has limited its ability to adapt to the changes in the environment.

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There is red-tapes, rigidity, arbitrary in rules and procedures.

Neglects human factor.
Encourages nepotism, favouritism, corruption etc.

THE HUMAN RELATION THEORY (BEHAVIOURAL THEORY):Major contributions: - About Elton Mayo and Associates
Elton Mayo (1880-1949) an Australian born management professor at Harvard
University;
Famous for Hawthrone Investigations of 1927-1932
His followers were F.J. Rethlisberger and W.J.Dickson investigated a plan in Chicago,
USA.

Mary Parker Follett (1868-1933)

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Born in Boston and took education at Harvard and Cambridge.
Human Relation Theory evolved in recognition of the importance off human
behaviour on organization. Human relation theory emphasized on the role of psychology and
sociology in understanding of individual as well as group behaviour in an organization.
This theory is also known as Behaviour Science Approach. Group dynamic,
participative management, communication, personality, motivation and leadership are Elton
Mayo; Mary Parker Follett, Abraham Maslow and Doughs Mc Gregor provided it with
human behaviour dimensions.
The credit for innovating human relation goes mainly to Elton Mayo and his
associates of Harvard University. They conducted a series of experiments that focused on
behaviour in the work place. They conducted Hawthorne experiments at Western Electric
Company of Chicago; which was manufacturing telephone system bells and employing about
30,000 workers. They conducted their experiment in four phases asi)
Illumination experiments (1924-27)
ii)
Relay assembly test room experiments (1927-28)
iii)
Mass interviewing programme (1928-30) and
iv)
Bank wiring observation experiment (1931-32)

These four phases of experiments resulted that:It was found that illuminating did not affect output. Social acceptance influenced
work performance.
Recognition and appreciation are important.
Social setting and group cohesion are important for productivity.
It was found that social relation inside the organization influenced attitudes and
behaviour.
Workers formed informal organization. They set their own production norms. They
protected weak workers.

Hawthrone experiment revealed that an organization is more than that a formal

structure of positions and authority-responsibility relationships. The major contributions of
human relation theory (movement) are as follows: This theory focused on management to the human side of organization. The rational
man of scientific management became social man in the human relations theory.
Social settings and groups are important for productivity.
Workers has group influence and the management should not deal with them as
individuals but as members of the group.

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Non-financial rewards such as recognition and appreciation are important for
workers productivity.
Informal leader of the group is rather more influential than the superior appointed by
the organization.
Dual communication is an important aspect of organization, which enables
productivity.
Participative management is essential for good work performance, grater job
satisfaction as well as productivity.
Limitations of Human Relation Theory: The human relation theory emphasizes the human variables only and has ignored
other variable.
Financial rewards have been ignored. Symbolic rewards may not be always effective.
Informal groups dont make the task pleasant, they only make a workers day
pleasant.
Human behaviour cannot be predicted.
3.

THE DESION THEORY OF MANAGEMENT (PROCESS SCHOOL):The decision theory of management led by Herbert Simon (in 1955 A.D.), James
March (1965 A.D.) focuses that management process as a rational decision making process.
This theory deals with making decisions, behaviour of persons, making decision, decisionmaking process and decision environment. The main features of this theory are: Management is decision-making process. Decisions are the core of management.
Members or organization are decision makers.
Decision-making is control point in management. Quality of decision is important for
management efficiency.
Management information system (MIS) plays role in decision-making.
Decisions are made rationally.
According to this theory, the rational approach to decision making should involve the
following steps.
i)
Define the problem.
ii)
Identify relevant alternatives.
iii)
Evaluated the alternatives.
iv)
Select the best course of action.
v)
Implement the action.
vi)
Evaluates the result of the action.
Hebert Simon, the main contribution to this theory, advocated the decision model
based on two concepts.
a) Bounded rationality: Rational decision-making is constrained (limited) by limitation of knowledge
resources etc.
b) Satisfying: Maximization isnt possible in decision making. Decision makers should satisfice and
achieve the satisfactory out come. Administrative man always satisfices.
The contribution of that this theory helps managers to discharge their decision-making
role. Its limitation is that it doesnt take a total view of management. Its scope is limited.

4.

THE MANAGEMENT SCIENCE THEORY: Management Science Theory gives a quantitative basis for decision making. The
major contributors of this theory PMS Blackett (1938) and Joel Dean considered management
as a system of mathematical models and process. Basically, this mathematical school or the
quantitative method school dates back to the scientific management propounded by F.W.
Taylor and his associates. This management science theory holds that management is a
logical and rationale process. So it can be expressed in terms of mathematical models.
Quantitative techniques can be operation research, linear programming, queuing theory, game
theory, simulation and model building, PERT (Programme Evaluation and Review
Techniques) etc. Use of computer has made this theory popular the main features of
management science theory are: Management is concerned with problem solving and it must make use mathematical
tools and techniques for the purpose.
The different factors involved in a management can be quantified and expressed in the
form of models and symbols that is in the form of equations, which can be solved,
with the help of mathematical techniques.
Managers should aim at optimizing performance and maximizing efficiency. Crossfunctional teams are used for problem solving.
Managers should use frequent computers frequently.
Major Contributions of Mgmt. Science Theory: It developed quantitative tools to aid decision-making. It has helped management in
logical thinking. Most large and complex organizations use this theory for decisionmaking.
It has found widespread application in solving technical problem and forecasting the
future. It is useful for planning and controlling.
Limitations of Mgmt. Science Theory: It ignores peoples and relations in organization.
It cannot be a substitute for sound judgment and other skills.
The assumptions used for quantifying decision-making do not match the real world
situational.
Many aspects of management cannot be modeled.
5.

THE SYSTEMS THEORY OF MANAGEMENT: Main Contributions of System Theory

Ludwig Von Bertlanffy (1951)
Knneth Boulding, Fermont E. Cast and James E.
Nisbet Wiener, Rosenzweing (1960), R.A. Johnson
In 1960, a new thought to management appeared which tried to unify the prior
theories. This theory is commonly known as System Theory. This theory was developed in
the 1960s by Bertlanffy, Wiener, Kast Rosenzwing etc. A system may be defined as a goal
oriented organism composed of parts that are inter-related in such a way that the total system
is greater than the sum of parts. System theory views the organization as a unified whole,
composed in interacting and interrelated parts. It tries to give the manager a way of looking
the organization as a whole. System theory tells us that the activity of any part of an
organization affects the activity of other parts. The key features of the system theory are: -

1.

Goal directed: - A system is goal-directed. Survival is its key goal.

2.
Subsystem: - The parts that make up the whole system are called subsystems. Mgmt.
as a system consist of several subsystems such as people, structure, managerial, technology
etc. They are interrelated with each other.
3.
Open or closed: - A system can be either open or closed. Closed system has no
environment. Organization is an open system.
4.

Synergy: - Synergy means that the whole is greater than the sum of its parts.

5.
Boundary: - Every system has a boundary that separates it from the environment.
Open system has flexible boundary.
6.
Flow: - A system has flow of information, materials and energy. They enter as inputs
from environment, undergo transformation process within the system, and go back to
environment as outputs.
7.
Feedback: - Feedback is an important mechanism, which enables a system to adopt
and adjust to the changing and dynamic environment and to exercise control over its
operation.
Environment
Inputs
Resources
Human
Financial
Physical
Information

Transformation
Technology
Operations
Management
Control

Outputs
Products
Service
Profit/Loss
Information
Employee Behaviour

Feedback
System View of Organization
Contribution of System Theory: System Theory takes an integrative view of organization. Holistic view is taken for
problem solving.
It recognizes the interrelations and interaction among subsystems for synergistic
effects. It recognizes environment influences.
It is useful for studying complex organization.
Limitations of System Theory: The system theory is complex for practical application. In smaller organization, it is
not relevant.
The theory is too abstract.

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6. THE CONTIGENCY THEORY OF MANAGEMENT:- (SITUTATIONAL

THEORY)
The term contingency theory was popularized by Prof. Paul Lawrence and Jay
Lorsch in 1976 A.D., the Prof. of Harvard University. This theory recognizes the situational
nature of management. This theory deals that management doesnt depend on certain
principles and methods. Managerial practices depend on situational. There is no one best way
in the world of management. So it is also called the situational approach. This says that a
technique that works in one situation will not necessary work in all situations. This theory
seeks to the match different situational different situation with different management
methods. Situational theory says that management is situational, and managers should design
organizations, define objectives and formulate strategies, polices and plans in accordance
with the prevailing environment situation.
According to contingency theory of management, the correct management practice or
managerial behaviour in a particular situation and at a particular tome depends on a many
variables. For example, democratic or participative management style may work under
certain situations, whereas autocratic mgmt. Style may work under other circumstances.
Similarly, financial incentive can work effectively in one situation, while the practice of
management is influenced by number of interrelated internal and external factors. There is no
one best theory of management and organization. The situation decides the pattern of
management.
Contribution of Contingency Theory: 1.
Situational Theory helps managers in performing their function of PODC considering
current situation.
2.
It widens horizon of manager beyond the theory of management, its concepts,
principle, techniques & methods.
3.
It has enlarged the area of freedom of operation of managers. They operate
organization as per the changing conditions.
4.
Managers can think of innovating new approaches.
5.
Managers arent handicapped by having to apply same methods, practices and
processes to diverse situations.
Limitations of Contingency Theory: 1.
Difficulty ion determining all relevant contingency factors and showing their
relationship. The theory complex.
2.
Every situation is unique. Managers may not able to analysis each and every situation.