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(I) THE CLASSICAL PERIOD (1800-1930)
(A) Scientific Management School—Frederick Winslow Taylor (18561915) was the first to recognise
and emphasise the need for adopting a scientific approach to the task of management.
(B) Management Process School—A contemporary of Taylor, Henri Fayol attempted a systematic
analysis of overall management process. It aimed at an overall analysis of management process. Other
contributors to this theory arc Mooney, Davis, Sheldon.
© Bureaucracy Theory School—This theory of management was developed by Max Weber (1864-
1920). A German sociologist Weber developed the bureaucratic model of organisation. Bureaucracy
refers to certain characteristic of organisational design. Bureaucracy is characterised by rational legal
authority where obedience is owed to a legally established position or rank within the hierarchy of a
business.
According to this theory, bureaucracy, as a model of a class of organisation, is characterised by:
Administration through well-defined rules.
A hierarchy of authority and chain of command through the organisation with a regulated
system of appeal.
Employment and promotion on the basis of competence, protection against arbitrary dismissal
and training of offcials.
Separation of administrative staff from ownership of the means of production.
Assignment (if activities to individuals as fixed duties.
Decision-making on rational and objective criteria.
Office holding as a career within the hierarchical order.
Fixed salary based on status or rank rather than on the work performed, and a guaranteed
pension on superannuation as security for old age.
Limitations of classical theories—The major limitations of classical theories are as follows:
(1) They view organisation as a machine subject to certain immutable laws.
(2) They assume that employees can be motivated by financial incentives only and ignore social and
psychological needs.
(3) They assume that productivity is the only criterion of efficiency.
(4) Their overall approach is mechanistic.
(II) NEO-CLASSICAL PERIOD (1930-1960)
(A) Human Relations Theory—Human relations approach is one of the neo-classical theory. This
theory was developed around 1920 and emerged out of the human relations movement. This
movement laid greater on the man managing the machines and stressed the importance of individual as
well as the group relationship. The theory emphasises the role of psychology and sociology in the
understanding of individual as well as group behaviour in an organisation. Thus, what was advocated,
was the relevance of the human values in an organisation.
It were Elton Mayo and his associates who conducted studies in the Hawthrone Works of Western
Electric Company, Chicago, U.S A. between 1927 and 1932. The study covered more than 20,000
workers. These studies can be divided into four stages. By these studies, the researchers discovered
many areas of the application of human relations approach. The researchers' general conclusion was
that non-logical behaviour or sentiments among workers must be considered along with economic and
other logical factors as influencing the work group. This approach was advocated by them because of
the following reasons :
(1) Employees in any organisation get satisfaction not by economic incentives but by the satisfaction of
many other social and psychological wants, feelings desires and so on.
(2) The business organisation itself is a social system or at least part of it.
(3) In an organisation, it is ultimately cooperative attitude and not the mere command which yields
results.
(4) Management must aim at developing social and leadership skills in addition to technical skills.
(5) In an organisation, morale and productivity go hand in hand.
The approach was instrumental in effecting a new image of man and the work place. After these
studies, it was widely accepted that the organisation is a social system and the human factor is the most
important element within it. More emphasis was placed on inter personal relations, leadership skills,
human motivation etc. The approach evidenced that an organisation is not merely a formal arrangement
of men and functions ; more than that it is a social system.
The most serious criticism related to the research methodology employed. The theory is based upon
small samples of human beings. Further, it lacks scientific validity and exhibits mysticism.
(B) Behavioural Science Theory—This approach was developed by Kurt Lewin, Chis Argyris, Rensis
Likert, McGregor etc. Behavioural scientists attempt to formulate generalisations based on this order
from which predictions can be made. Some of the important features of this approach are as follows:
(1) Data must be objectively collected and subject to public testing by properly qualified individuals.
(2) Findings must be presented so that distinction between cause and effect is clear.
(3) Facts must be systematically related to one another within a systematic framework.
(4) The findings must always be open to further examination and question.
The main aspects of the approach are as follows:
(1) Employee motivation which includes a determination of the factors that lead to high
productivity and high morale.
(2) Organisation as a social system which includes studies of role, status, and status symbols as also
the functions of informal groups.
(3) Leadership which involves the study successful and unsuccessful managerial behaviour.
(4 Communication which includes the study of factors related to achieving understanding between
persons, in an organisation as a consideration of the best structuring and use of the channel of contract
in an organisation.
(5) Employee development which is concerned with the continued up-grading of employee skills
and managerial skills through training.
© Social System Theory-Chester I. Barnad (1886-1961) was the founding father of this theory. The
theory is heavily oriented to sociological concepts. The theory is based on the assumption that there
is interaction of social groups. The main focus of social system is to study different aspects of social
systems. Organisation "essentially a cultural system composed of groups of people who work in
cooperation."
The main features of this thought in management are as follows:
(1) An organisation is a social system i.e., a system of cultural relationship.
(2) Formal organisations represent cultural relationships of the social groups working within the
organisations.
(3) Cooperation of the working members and groups is the core of good management.
(4) Management has to direct its efforts towards establishing harmony between the goals of the
organisations and the needs, aims and aspirations of the people comprising the various groups in the
organisation.
(5) Relationships exist between internal and external environments and change.
The main contributors to this field are Max Weber, Moreno, Simon, Rensis, Likert etc. While,the theory
has made many valuable contributions to management, it should be noted that management is not the
study of sociology. Management is also related to technological factors and the factors connected with
the psychological behaviour of the people working in the organisation.
(Ill) MODERN PERIOD (1960 AND ONWARDS)
Post 1950 period has witnessed a period of refinement, extension and synthesis of management
thought. Following are the modern theories:
(A) Mathematical Theory—It is also known as Quantitative Approach Theory or Operational
Research Theory or Management Science Theory. The management scientists led by operation
researches and system analysts see management as a "system of mathematical models and processes."
They hold that since managing is a logical and rational process, it can be expressed in terms of
mathematical relationships and models. Its basic assumption is that an organisation is a system with its
parts in interactional and interdependent relationships and these interactions and interdependencies
can be expressed in terms of models and equations. The main features of the mathematical school of
thought are:
(1) Management is concerned with problem-solving and it should use mathematical tools and
techniques for this purpose.
(2) The different factors involved in management can be expressed in the form of models or
equations which can be solved with the help of mathematical techniques.
(3) Management problems can be described in mathematical symbols.
(4) The basic methodologies may be operations research, mathematical tools, simulation and
model building.
(B) System Approach Theory-The theory was developed by Boulding, Rosen, Johnson. Henderson,
Daniel Katz, C.W. Churchman etc.
A system is a set of inter-connected and inter-related elements directed to achieve certain goals.
This theory views organisation as an organic and open system composed of many sub-systems. As a
system organisation is composed of a number of sub-systems viz. production, supportive, maintenance,
adaptive managerial, individuals and informal groups.
All these sub-systems operate in an interdependent and interactional relationship. The various
subsystems or parts of an organisation are linked with each other through communication, decisions,
authority responsibility relationships, objectives, policies, procedures and other aspects of coordinating
mechanism. Organisations as systems have a variety of goals. The important among them are survival,
integration and adaptation with environment and growth.
The major features of the approach to the study of management may be summed up as under:
(1) A system consists of inter-related and interdependent parts.
(2) The approach emphasises the study of the various parts in their inter-relationships rather than
in isolation from each other.
(3) The approach brings out the complexity of a real life management problem much more sharply
than any of other approaches.
(4) The approach may be utilised by any of the other approaches.
(5) The approach has been utilised in studying the function of complex organisations and has been
utilised as the base for new kinds of organisation.
© Contingency Approach Theory—Contingency theory has been developed mainly during 1970s.
The major contributors to this school of thought in management are Joan Woodward, Fiedler, Lorsh,
Lawrence etc. Theorists of all other approaches to management have not integrated the environment.
They often assume that their approaches and systems have universal applicability. The contingency
approach incorporates the environment and attempts to bridge the theory practice gap.
Contingency theory builds on the major premises of the systems. Theory that organisation is organic
and open system and there is a relationship of interdependence between an organisation and its
environment, as well as within and between its various sub-systems. The contingency theory aims at
integrating theory with practice in a systems framework.
According to this approach, management is situational. This approach rejects the universality of
management thesis. Managers should design organisations, define objectives and formulate policies
and plans according to the prevailing environmental conditions. Managerial policies and plans must
respond to changes in environmental conditions. Further, management should have sufficient skills to
anticipate and comprehend environmental changes, and to accommodate change. Finally, it should use
the contingency model in designing the organisation developing its information and communication
system, adopting effective leadership styles and formulating suitable objectives, policies and practices.
Thus, this approach provides a method of analysis as well as a way of integrating organisation with its
environment.
A contingency approach seems to hold a great deal or promise for the future development of
management theory and practice. The other approaches to management can all be in-corporates into
the contingency framework. At present, the contingency approach seems to be the only practicable way
to studying management. It adequately clears the nature of management. Hence it is the best approach
of all.
Recent Trends in the Management
(1) Professionalism in Personnel Management—With the passage of time, personnel management
has become mature and professionalised. Now decision making process vests with the professional
managers. The professional managers have developed a number of administrative societies, associations
and institutions which have a large membership of those who have qualified personnel affairs.
(2) Mental revolution or cooperation—There is a mental change in both parties from conflict to
cooperation. Both the parties-management and labour- are making efforts to maximise the return of the
industry and then to share it. Management has become more conscious and liberal to the worker's
grievances. Workers have been participating in the management.
(3) Specialisation—There is specialisation in the administrative field. Various functional areas of
management are being managed by experts in their respective field.
(4) Macro Approach—Now a days management is not considered to be an individual matter.
Management has become a social phenomenon. Management principles are constantly influenced by
social traditions, customs and regulations.
(5) Human Approach—Management has become people oriented rather than work oriented . It is
due to human approach of the personnel management. The democratic principles are applied for
effective management of people.
(6) Universal Application—Now a days management is being applied in every type of institutions—
social, religious, political organisations also besides commercial and economic organisations.
