Management Theories

CLASSICAL THEORY AND THEIR

CONTRIBUTION
• Scientific
• Administrative
• Bureaucratic
• Scientific management theory This is a well-known management theory
developed by Frederick Taylor in 1911.

• Taylor worked on increasing efficiency using scientific methods, eliminating

additional movements and transfers at workplace.

• It is essential to develop the science of working. In other words, the job should be
investigated in action to find the best ways to do the job. Either scheduling or
orientation method can be used for data collection. Different methods should
be used to find the best method. A new method should be chosen. The workers
should be selected.
.
• Scientific training should be given according to the best way of performing the
job. Training should be given to the workers according to their position in the
organization, so that each worker would be an expert in his job and perform a
better job

• Different workers should be selected for different jobs (15).

• Modern management theorists such as Edward Deming and Juran (Quality

Management …), also follow the principles of division of labor presented by
Taylor.

• Taylor's work was improved by Frank and Lillian Gilbreth who studied time and
motion and divided tasks into small components by finding better methods to do
each component and reorganizing every component of a scientific work.
.

• Administrative management theory is another well-known classical

management theory developed by Henry Fayol in 1916.

• The theory encompasses business management (business) and general

management. His main focus was on management.

• He introduced six functions and fourteen management principles in his theory.

• Six management functions are predicting, planning, organizing, commanding,

coordinating, monitoring
Fayols 14 ….
1. Division of Work
Henri believed that segregating work in the workforce amongst the workers will enhance the
quality of the product. Similarly, he also concluded that the division of work improves the
productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both
the managerial as well as a technical work level.
2. Authority and Responsibility
These are the two key aspects of management. Authority facilitates the management to work
efficiently, and responsibility makes them responsible for the work done under their guidance or
leadership.
3. Discipline
Without discipline, nothing can be accomplished. It is the core value for any project or any
management. Good performance and sensible interrelation make the management job easy and
comprehensive. Employees’ good behaviour also helps them smoothly build and progress in
their professional careers.
4. Unity of Command
This means an employee should have only one boss and follow his command. If an employee
has to follow more than one boss, there begins a conflict of interest and can create confusion.
5. Unity of Direction
Whoever is engaged in the same activity should have a unified goal. This means all the people working
in a company should have one goal and motive which will make the work easier and achieve the set goal
easily.
6. Subordination of Individual Interest
This indicates a company should work unitedly towards the interest of a company rather than personal
interest. Be subordinate to the purposes of an organisation. This refers to the whole chain of command
in a company.
7. Remuneration
This plays an important role in motivating the workers of a company. Remuneration can be monetary or
non-monetary. Ideally, it should be according to an individual’s efforts they have put forth.
8. Centralization
In any company, the management or any authority responsible for the decision-making process should
be neutral. However, this depends on the size of an organisation. Henri Fayol stressed on the point that
there should be a balance between the hierarchy and division of power.
9. Scalar Chain
Fayol, on this principle, highlights that the hierarchy steps should be from the top to the lowest. This is
necessary so that every employee knows their immediate senior also they should be able to contact
any, if needed.
10. Order
A company should maintain a well-defined work order to have a favourable work culture. The
positive atmosphere in the workplace will boost more positive productivity.
11. Equity
All employees should be treated equally and respectfully. It’s the responsibility of a manager
that no employees face discrimination.
12. Stability
An employee delivers the best if they feel secure in their job. It is the duty of the
management to offer job security to their employees.
13. Initiative
The management should support and encourage the employees to take initiatives in an
organisation. It will help them to increase their motivation and morale.
14. Esprit de Corps
It is the responsibility of the management to motivate their employees and be supportive of
each other regularly. Developing trust and mutual understanding will lead to a positive
outcome and work environment.
Theory of bureaucracy

Management bureaucratic theory This theory is proposed by the German

sociologist Karl Emil Maximilian known as Max Weber. This is also called Weber's
theory of bureaucracy. He proposed this theory in 1947.

He called his work a social and economic organization theory.

This theory mainly focuses on organizational structure. He focused on hierarchy

and authority-control strict lines in structuring the organization into a hierarchy.

Principles of bureaucratic management theory are as follows.

.
1) Formal rules and regulations: According to this theory, the best standard rules
and regulations should govern the organization. These rules should be properly
defined and written in the forms.

2) Working relationship system: this should be present in the organization to do the

work and establish a relationship between the system and tasks in the organization.

3) Specialized training: the workers should be trained based on their designated

tasks. Different training programs should be designed for different systems in the
organization. The managers require relevant training programs based on their
tasks.
How Classical Theory has contributed
• Modern theories of management have used the advantages of this theory. Written rules, ideal
bureaucracy, paperwork, punishment and reward systems, training of workers and managers are
almost implemented all the organizations in the world.

• Theory of scientific management was presented in the United States of America to enhance
productivity. Labor shortage is a major challenge in the U. S. since the Industrial Revolution.
Therefore, increased productivity of workers is the only way to increase productivity.

• Four principles of scientific management theories are actual development of management

science, scientific selection and training of workers, the right reward for quick and high-quality
work and equal division of work and responsibility between workers and managers
• Administrative management theory sought to create an organization with increased efficiency
and effectiveness. This theory supports the workers in contrast with the theory of scientific
management. Planning, organizing, controlling and directing are the basic functions of this theory.
Unity of command, unity of structure, division of labor, justice in authority and order are the most
important principles among the fourteen principles of this theory. Functions and principles of
Fayol are still used for management of international organizations

• Max Weber's theory of bureaucracy management focuses on ideal structure of an organization.

This theory contains eight principles. Formal rules is the basic principle of bureaucracy. Another
important principles are formulating rules, the authority to control management and balance in
the reward system. Bureaucracy is still implemented in the global large companies
Classical theories promote managerial capability to predict and control
behaviors of the workers. These theories are designed to predict and
control behavior within the organization. These theories encompass
communicational functions and ignore human relations in the
organization. They improve and preserve communicational functions.
These theories are used in simple, small and stable organizations. On
the other hand, these theories cannot be implemented in large,
complex and aggressive modern
NEO CLASSICAL THEORIES
Chief Contributors
- Elton Mayo
- Chris Arygris
- Mary Parker Follet
- C I Bernard
- Dougles M Gregor
- Rensis Likert
• Neo Classical Theory has been divided into two parts
• Human Relations Approach
• Behavioral Science Approach
Human Relations Approach; Hawthorne
Studies and Contribution of Elton MAyo
• Organisations are social system
• Multidimensional model of Motivation; economic, social,
psychological and cultural factors
• Informal Work Groups exert tremendous influence over behaviourial
pattern of workers
• Work Environment should be positive in order to achieve
organizational objectives
• Democratic leadership, where members are allowed to participate in
decision making
Criticism of HR approach
• Lack of scientific basis
• Short sightedness
• No evidence of consistency in productivity and happiness
• Group decision making is fraught with dangers
• Failed to identify conflict as a creative force
• Anti individualist
Behavioural science approach
• It is interested in studying human behaviour in a scientific manner
• Role of Motivation and Leadership; democratic and informal
leadership style is better to motivate people.
• Group Dynamics: is the interactions and forces between group
members and social situations
• Organisational Change ; Argyris feels that the humanistic and
democratic value systems in the organization based on the Individual
satisfaction are better sited for employees in order to move to
maturity
• Conflict Management is an integral part of the organistaion
Chester Bernard – The Economic of Incentives ;was the pioneer of management theories
and organizational studies. 1938, Bernard supplied organizational theories based on some
structural concepts of the worker and cooperation, formal & informal organization Barnard
emphasized two different theories:

• One on authority; Bernard's theory had links with Mary Parker Follett and was it was a very
modern theory for this time, and that has persisted until today's management. He seems
logical that managers should get authority by taking into account lower workers with respect
and competence.

• The other on incentives; As for incentives, he developed two ways of convincing

subordinates to cooperate: tangible incentives and persuasion. Indeed, he supports the idea
that persuasion is more important than economic incentives.
 Money and other material incitation;
 Personal non-material opportunities for distinction;
 Desirable physical conditions of work;
 Ideal benefits, such as pride of workmanship, etc.
• For Bernard, the hierarchy is not a punctual and coordinated, but "aware, intentional
and desired" adaptation to the goals of the company. Thus he talks about formal
and informal systems, which has strategies for cooperation amongst people

• Bernard presents a systems approach to the study of a company's organization, which

bases on a theory about motivation and behavior, of decreasing or eliminating negative
incentives or burdens, to change the state of mind, or attitudes, or motives so that the
available objective incentives can become effective``.
• A moral code for the organization – a set of ethical visions that established “right or
• wrong” in a moral sense, a deep feeling or innate conviction, not arguable; emotional,
• not intellectual in character”;
Modern Theories of Management
• They are based on empirical research data and are analytical in nature
• Is integrative by nature
• Based on
• Systems approach
• Contingency approach
Systems approach
• Has a goalistic approach ie a unitary whole
• As well as integrative approach for the various subsystems
• Input-process- Output analysis can be done

• According to Kast and Rosenzweig System, ‘Is an organized unitary

whole composed of two or more interdependent parts, components
or subsystems and delineated by identifiable boundaries from its
environmental suprasystem’.
Characteristics of a system
• Several parts and subsystems; Technical, social and power
• Interdependence of parts and subsystems
• Multiplicity of objectives
• Interaction; linking of processes
• Closed system because it has boundaries which are however flexible and changeable
• Open system because they are exposed to the environment and are interacting with it as well as subject to
its serious dominating influence
• Organic system; they have adaptability and flexibility to adapt to the environmental situation and dangers
• Probalistic systems because they have adaptability and flexibility to adapt themselves to the environment
situation and dangers
• Input-output system
• Multidisciplinary approach
• Principle of equifinality; means they have several alternative ways of doing same thing or reaching a
particular goal
• Feedback approach
Appraisal of the Systems approach
• It takes a wholistic view of the organization
• It considers organization as open, organic and probabilistic systems
• Input-output system as well as feedback system further leads to
better communication, coordination, control and coordination

• Criticism
• It does not in-cooperate all the aspects of the systems theory
• Very complex
• Shows a reactive strategy