MANAGEMENT ASSIGNMENT 1

Management practice has a very old age, management as a systematic body of knowledge and
distinct discipline is the product of 20th C. The industrial revolution which began in 18th c and
run through 20th c. was the main reason that led to development of different management
theories.

 The Egyptian civilization was known for planning, organizing, and controlling during
the construction of pyramids
 The existence of strong military forces in early human activities.

Starting from 20thc. Up to now different schools of management thought have been developed.

1. Classical Management Theory

 scientific management theory( F. Taylor)
 Classical organization theory (H. Fayol)
 Bureaucratic theory (M. Weber)
2. Neo Classical Theory
 Behavioral or Human Relation movement theory (E. Mayo & Hawthorne study)
3. Modern Approaches
 System approach
 Contingency Approach
 Management Science
EVOLUTION OF MANEGEMENT THEORY

1. Classical management theory

Classical management theory is a theory that focused on finding the 'one best way' to operate
(perform) and manage tasks and used to top level manager to do their day to day activities.
Classical organization theory concentrated on top-level managers dealing with the everyday
problems of managing the entire organization.

A. Scientific Management Theory (SMT)

I. Frederick Winslow Taylor

Scientific Management Theory was developed mainly by a person called F.W Taylor. Taylor's
primary objective was to discover the most efficient way of doing a job and then train the
workers to do it that way. The major reasons for inefficiency were as follows:

 Standards of performance were not properly determined.

 The existing pay system was not motivating
 There was no specialization as such
the basic components of scientific management were profounder (developed) by him was as
follow
 1. Determination of standards of performance scientifically

Taylor argued that standard of performances should not be determined on the basis of 'rule of
Thumb' method rather scientific methods should be used. Taylor introduced his famous study
known as time-motions involved in performing a particular task.

2. The differential and piece rates payment system

The piece rate is normally less than differential rate and it was applied to workers who had
produced out put below the standard.

The differential rate was applied for workers who had produced an out put just to the standard
or above the standard.

3. Specialization of functional foremen ship

he recommended the separation of planning g from doing the jobs. He said there must be
different functional specialists who would give supervision for workers while they were doing
their jobs. So workers could increase efficiency since they didn't spend time on planning.

4. Responsibility of management

He determined responsibilities of management. This includes:

 Studying each element of worker's job and developing scientific method of doing them.
 Scientifically selecting, training and developing workers to the method developed.
 Heartily cooperating with workers to make sure that workers were doing their jobs
according to scientifically developed management
 Management should divide and take over all the jobs that it thought could fit better than
other workers and these responsibilities include planning, organizing, and directing.

5. Mental Revolution

the elimination of unnecessary movements in workers’ job and the use of differential wage rate
payment systems could lead to increase in output and worker's payment, according to Taylor.

Principles of Scientific management Theory

1. Management should develop Scientific methods by which workers could do their jobs.
2. Management should scientifically select, train, teach and develop each worker.
3. Management should cooperate with the workers in ensuring that all of the work is done in
accordance with the principles of scientific management.
4. Management should divide work responsibility between management and non-
management workers with fitness assumptions.
 II. Frank (1868-1924) and Lillian (1878-1972) Gilbreth

Frank Gilbreth, known as the Father of Time and Motion Studies, filmed individual physical
labor movements. His wife, Lillian Gilbreth, was a psychologist and author of The Psychology of
Work. The Gilbreths defined motion study as dividing work into the most fundamental elements
possible, studying those elements separately and in relation to one another; and from these
studied elements, when timed They defined time study as a searching scientific analysis of
methods and equipment used or planned in doing a piece of work,building methods of least
waste.

III .Henry Gantt (1861-1919)

Henry Gantt developed the Gantt chart. He developed a pay incentive system with a guaranteed
minimum wage Gantt focused on the importance of the qualities of leadership and management
skills and bonus systems for people on fixed wages.

Contributions of scientific management theory

 Demonstrated the importance of compensation for better performance.

 indicated the importance of personnel selection, training-etc
 Developed management principles which have an application in modern management
system.

Limitations of scientific management theory

 Assumed that workers were motivated only by monitory reward.

 Concentrated only on how to increase efficiency of workers separately with out
giving emphasis on how to manage the entire organization as a whole.
 The fact that workers were receiving instructions from several functional foremen
could confuse workers.
 Considered workers as machines.
 Did not acknowledge individual difference

B. Classical Organization Theory.

emphasized on how to increase productivity of individual workers and management at work.

1.Fayol's Proposal
he was concerned with the fact that different abilities were needed as one moved up the
management ranks. His experience led him to conclude that there were five basic functions of
administration: planning, organizing, commanding, coordinating and controlling.
 Fayol's 14 principles

1. Division of labor: work specialization could increase efficiency.

2. Authority and responsibility-Authority of a person should always be equal to his/ her
responsibility.
3. Discipline- all workers and managers of a given organization should respect a discipline
which governs that organization No organization could prosper with out discipline.
4. Unity of command- Every one should have one and only one boss.
5. Unity of direction- each group of activities with the same objective must have one head and
one plan
6. Equity- Every one in an organization should be treated fairly and justly.
7. Order- A place should exist for everything and every thing should be in its place.
8. General interest over individual interest: - The goals of organization and departments
should take priority over the goals of individual employees
9. Remuneration of personnel- compensation should be fair both to employees and employers
to motivate them to do good work.
10. Centralization- organizations tend to keep with in limits much of decision making authority
to the upper levels. Instead they should seek the balance of centralization- decentralization
that provides the greatest overall efficiency.
11. Scalar chain -there should be a clear-cut chain of command running from the top of the
organization to the bottom.
12. Stability of tenure personnel- reducing turn over of personnel will result in more efficiency
and fewer expenses. Long-term employment is important.
13. Initiative- people should be allowed the freedom to propose and execute ideas at all levels of
an enterprise
14. Esprit de corps’
Mary Parker Follett
The universal goal of organizations is an integration of individual effort into a synergistic
whole.
Law of the Situation emphasizes that there is no one best way to do anything, but that it all
depends on the situation.

Contributions of Classical Organization (administrative) Theory.

 Demonstrated the importance of different skills at different levels of management for

managers.
 Systematically identified functions of management,
 Developed several important principles of management.

Limitation of classical organization

Assumed several difficult principles which are difficult to apply in management of modern
organizations
 C. Bureaucracy theory  

Max Weber (1864-1920) known as the Father of Modern Sociology, analyzed bureaucracy as
the most logical and rational structure for large organizations. are founded on legal or rational
authority which is based on law, procedures, rules.

Efficiency in bureaucracies comes from:

 clearly defined and specialized functions use of legal authority

 hierarchical form written rules and procedures;
 technically trained bureaucrats; appointment to positions based on technical
expertise;
 promotions based on competence; clearly defined career paths.

Neo classical theory

Neo classical theory was built on the basis of classical theory. It modified, improved and
extended the classical theory.

A. Behavioral or Human relations approach

It focused on human dimension of organization. The objective of the behavioral theorists

was to identify factors that will serially affect productivity of employees.
Hawthorne study

The study conducted at how throne works of western Electric company in Chicago, USA. The
study had four phases

i. Illumination Experiments
ii. The relay assembly Test Room Experiment
iii. The Interviewing program
iv. The bank wiring observation.

Hawthrone effects (conclusions)

From studies conducted at how throne researchers concluded

 Individual workers could not be treated in isolation, but must be seen as members of
groups
 Employee motivation was based not only on the satisfaction of physical needs but also
social and psychological needs.
 Democratic style of leadership is important for employees' satisfaction.
 Informal groups were important in organizational work environment.
Contributions Of Behavioral/Human Relations Theory.

 Demonstrated the social context of organization

 Found out that the satisfaction of social and psychological needs could result in more
performance of workers.

Limitations of Behavioral (Human Relations Theory)

 Failed of develop an integrated theory of management as it followed only the basic
background laid by classical theorists.
 There style was unethical as they used human beings as experimental units in laboratory.

3. Modern Approach

This approach is the last approach to it consists:

A. the systems approach

B. The contingency approach
C. The management science approach
For the purpose of this course at this level we are going to discuss only the following theories

The system approach

It is composed of inputs from the environment (material or human resources) transformation
processes of inputs to finished goods (technological and managerial processes) outputs of those
finished goods into the environment (products or services) and feedback (reactions from the
environment).
Characteristics of systems

A. A system can be open or closed

Open system: is a system which interacts with its external environment to survive.

Closed system: is a system which is self-contained and thus not affected by changes that occur
in its external environment.
B. system has boundary
System's boundary is a set of activates with which the system is distinguished from other system.
A system has subsystems
Failure in one subsystem can be considered as the failure of entire system
 Entropy-Is system' principle which says that systems will die out unless they interact
with their environment.
 Synergy_ Is principle which can be stated as the whole is greater than the sum of its
parts.
  Contingency Theory

According to contingency theory since organization is an open system it interacts with several
external environment factors. Because these factors in environment change rapidly it is not right
to insist on only one way of managing an organization. Therefore it rejected the idea of one best
way of managing. Generally, it is more flexible and needs management to identify different
techniques to be applied in different circumstances at different time.

Management Science

It uses rigorous quantitative techniques to maximize resources.

 Quantitative management: utilizes linear programming, modeling, simulation systems.

 Operations management: techniques to analyze all aspects of the production system.
 Total Quality Management (TQM): focuses on improved quality.
 Management Information Systems (MIS): provides information about the organization.

Organization-Environment Theory

It considers relationships inside and outside the organization. The environment consists of forces,
conditions, and influences outside the organization.

Systems theory considers the impact of stages:

Input: acquire external resources.

Conversion: inputs are processed into goods and services.

Output: finished goods are released into the environment.