Chapter 2 perspectives in management

Chapter 2

Perspectives in

ManagementBy-

Abhyuday Shah.

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Management in Antiquity

1–2

3000 B.C. 2500 B.C.

A Sumerians F Chinese

B Egyptians

C Babylonians

D Greeks

G Venetians

E Romans

2000 B.C. 1500 B.C. 1000 B.C. 500 B.C. A.D. 1500A.D. 500 A.D. 1000

A Used written rules and regulations for governance

B Used management practices to construct pyramids

C Used extensive set of laws and policies for governance

D Used different governing systems for cities and state

E Used organized structure for communication and control

F Used extensive organization structure for government

agencies and the arts

G Used organization design and planning concepts to

control the seas

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Early Management Pioneers

• Adam Smith– A renowned economist– Writer of the book – Wealth of Nations

(1776)– Division of work for economic advantage– Increasing individual worker’s skill and

dexterity

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• Robert Owen (1771–1858)–British industrialist who was

one of the first managers to recognize the importance of human resources and the welfare of workers.

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• Charles Babbage (1792–1871)–English mathematician who

focused on creating efficiencies of production through the division of labor, and the application of mathematics to management problems.

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An Integrative Framework of Management PerspectivesSystems Approach• Recognition of internal

interdependencies• Recognition of

environmental influences

Contingency Perspective• Recognition of the situational

nature of management• Response to particular

characteristics of situation

ClassicalManagementPerspectivesMethods forenhancingefficiency andfacilitating planning,organizing, andcontrolling

BehavioralManagementPerspectivesInsights for moti-vating performanceand understandingindividual behavior,groups and teams,and leadership

QuantitativeManagementPerspectivesTechniques forimproving decisionmaking, resourceallocation, andoperations

Effective and efficient management

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Approaches to Management theories:

• Different approaches to management theories evolved • can be classified as:

1. Classical Theorya. Scientific management theoryb. Administrative management theory

2. Behavioral Science Theory3. Management Science Theory4. Decision Theory5. Systems Theory6. Contingency Theory

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1. Classical Theory:• emerged in the early year of the twentieth century to

increase efficiency and productivity due to evolution of large scale business.

• constitutes the discipline & process of management in an organization.

• also referred to as the traditional theory,• includes two different approaches

i. scientific managementii. administrative management

A. Scientific Management Theory:• developed to increase productivity through labor efficiency in

the early 20th century.

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1. Classical Theory (contd.) :A. Scientific Management Theory (contd.) :

• prominent contributors of scientific management theory were Frederick W. Taylor, Frank & Lillian Gilbert and Henry Gantt.

• F.W. Taylor was the greatest contributor and played the dominant role.

F.W.Taylor’s Scientific Management Theory:

• F.W Taylor known as the “Father of Scientific Management”.• worked at the Midvale steel company, Philadelphia and

Bethlehem Steel company, Pennsylvania.

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1. Classical Theory (contd.) :A. Scientific Management Theory (contd.) :

F.W.Taylor’s Scientific Management Theory (contd.) :

• Observed (in these companies) that production & pay were poor, inefficiency existed, wastage was high, workers put into job without matching their abilities and the workers used different techniques to perform the same work.

• realized that work efficiency was low due to lack of order and system

• This led him to come out with “The principle of scientific management” in 1911 A.D. in which the explained the principles of scientific management.

• emphasized one best method of doing work to increase efficiency & productivity.

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A. Scientific Management Theory (contd.) :F.W.Taylor’s Scientific Management Theory (contd.)Taylor’s Principles:

concluded his studies by laying down certain principles :Standardization• referring to the speed & rate at which work should be done• Using standard & right equipments and tools for the jobs.• development of true science of doing work by studying the

nature of work and replacing rule of thumb.Time and task study:• required to determine one best method of doing work.Systematic selection & Training:• scientific selection of employees and providing proper

training and developing them to undertake the task assigned • not letting workers choose the work but rather placing

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A. Scientific Management Theory (contd.) :F. W.Taylor’s Scientific Management Theory (contd.)

Taylor’s Principles (contd.) :

Systematic selection & Training (contd.) : right person on the right job.

Pay Incentives:• referring to the increment in the payroll in accordance with

the amount of work done in order to increase productivity.( paid according to piece produced)

• employees motivated by economic incentives• greater pay for greater output and vice versaCooperation between managers and operatives:• referring to harmony between the employer and employee to

accomplish work by dividing the work scientifically and systematically.

• managers involved in planning the work, determining the working procedure, time of doing work etc & supervising

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A. Scientific Management Theory (contd.) :F.W. Taylor’s Scientific Management Theory (contd.)

Taylor’s Principles (contd.) :

Cooperation between managers and operatives (contd.):

the employees• employees executing the plans as per the instructions• a mental revolution to be created by establishing

understanding between employer and employees

Taylor’s Followers:

1. Henry Gantt• One of the followers of F.W. Taylor • a mechanical engineer who worked as a close associate of

Taylor at the Midvale steel company.

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Scientific Management Theory (contd.) :

Taylor’s Followers (contd.):

1. Henry Gantt• replaced Taylor’s differential piece rate system by combining

a guaranteed day rate (minimum wage) with an above standard bonus.

• however, known for originating a Graphic chart (Gantt Chart) as a scheduling device for planning & controlling work & this is his contribution to scientific management.

• emphasized on the recognition of human factor and service rather than profits.

2.Frank and Lillian Gilbert• A team of husband and wife• Frank a construction contractor and Lillian a psychologist who

too followed Taylor’s footsteps.

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Taylor’s Followers (contd.):

2.Frank and Lillian Gilbert• used motion pictures to study hand and body motion by use

of micro chronometer that recorded the time to determine the time spent on motion in doing a task.

• conducted motion and fatigue study with the (help of) brick layering experiment

• suggested economical motion (decrease unnecessary motions) to upgrade performance of each individual.

• Developed performance efficiency techniques (scientific training, selection & development)

• Improved working conditions by redesigning various machines & tools to fit people thereby reducing fatigue.

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Contributions:

developed performance efficiency techniques ( like scientific training, selection, development etc.)

improved working conditions by redesigning various machines and tools to fit people for efficiency of work

emphasized over specialization and standardization for smooth flow of work

Limitations • viewed worker as undimensional beings interested in more

money and motivated them i.e. Men were considered as machine.

• Assumed that environment of organizations were predictable, stable & simple which is not realistic.

• focuses on production, ignoring other sectors of management• no one best way of doing work

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2. Administrative Management Theory• also referred to as the universalist or functional approach• focuses on the management of total organizations

effectively; especially larger organizations • assumes that management process remains the same across

all organizations• Prominent administrative theorists are Henri Fayol and Max Weber

Henri Fayol• A French engineer, an industrialist as well as a successful

administrator in a French mining company• Published a book in 1916 A.D. that was translated into

English in 1929, entitled “General and Industrial Administration”

• conceptualizes management functions & principles for the successful management of all types of organizations

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B. Administrative Management Theoryi. Henri Fayol (Contd.)

• believed that a manager's job could be divided into five functions

planningorganizing commanding essential for managerial success coordinating controlling

• also stated a series of principles of management to guide managers resolve problems in a particular situation and carry out their functional duties.

Functions of Management• Emphasized that all managers must perform functions as

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B. Administrative Management Theoryi. Henri Fayol (Contd.)

Functions of Management1. Planning

Managers forecasting the events and developing an operating plan to guide future decisions

2. OrganizingDetermining appropriate combination of resources (machine, material and human) to accomplish task.

3. CommandingDirecting the activities of subordinates through two-way communication

4. CoordinatingArranging and integrating group efforts towards unity of action

5. ControllingEnsuring actual activities are according to the plan set

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B. Administrative Management Theory (contd.)i. Henri Fayol (Contd.)• activities to be accomplished in industrial organizations:1. Technical:

activities concerned with production.2. Commercial:

activities like buying,selling and exchange functions.3. Financial:

obtaining capital and optimum utilization of capital4. Security:

protection of persons and property.5. Accounting:

financial transactions recording.6. Managerial:

activities of management like planning, organizing, commanding and controlling

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B. Administrative Management Theory (contd.)i. Henri Fayol (Contd.)

Principles of Management1. Division of work• specialization to increase output.2. Authority• the right flowing from responsibility.3. Discipline• follow rules and regulations (being obedient).4. Unity of command• report and receive orders from only one superior.5. Unity of direction• similar activities grouped under one plan and directed by one

superior.• efforts focused and coordinated in same direction

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Principles of Management6. Subordination of individual interests to the general interest• organizational interest must be given priority over individual

interest.7. Remuneration• fair wage service to the employees (performance based)8. Centralization• the final decision making power retained by the top level• maintaining balance between centralization and

decentralization.9. Scalar chain• flow of work authority and communication in a chain from top

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Principles of Management10. Order• resources kept in right place.11. Equity• just and fair towards subordinates.• leads to devotion and loyal service12. Stability of staffs• reducing high absenteeism and turnover of staffs.( as people

need time to learn their jobs)13. Initiative• employees taking initiative and being creative.14. Esprit de corps• harmonious relation and promote team spirit

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Conclusion• argued management as a continuous process beginning with

planning and ending with controlling• a framework for analyzing management process• theory is useful as it specifies what managers should do [but

not why & how]• Fayol's concept is a skeleton that is to be fleshed out with

concepts, techniques and situational refinements

ii. Max Weber• A German sociologist who developed a theory of authority

structure, the ideal model for management i.e. the bureaucracy approach

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B. Administrative Management Theory (contd.)ii. Max Weber• Bureaucracy is efficient and effective way of

– division of labor, – hierarchy of authority, – framework of rules and regulations and – impersonality

• Recommended bureaucratic organization model for doing work in groups for large organization

• however recognized that it didn't exist in reality

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Max Weber’s Theory

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B. Administrative Management Theory (contd.)ii. Max Weber

Conclusion • Every systematically managed organization regardless of its

size and purpose has to some extent a moderate degree of bureaucracy to enhance organizational efficiency

• However, taken too very high bureaucracy can hinder efficiency far can hinder the efficiency

• The bureaucratic system, however, is a very rigid system to be followed in practice

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B. Administrative Management Theory (contd.)

Contributions Foundation for the development of other management

theories Identified important management aspects as a frame of

reference and basis of management in organization

Limitations Prescribed universal procedures to be applied in organization

ignoring the situation, complexity and environment in which organization operate

Ignored the human element in the organization and viewed them as tools.

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Behavioral Perspective

• Hawthorne Studies• Human Relations Movement• Emergence of Organizational Behavior

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Behavioral Management Perspective• Behavioral Management

– Emphasized individual attitudes and behaviors, and group processes, and recognized the importance of behavioral processes in the workplace.

• Hugo Munsterberg (1863–1916)– A German psychologist, considered the father of

industrial psychology, who advocated the practice of applying psychological concepts to employees selection and motivation industrial settings.

• Mary Parker Follett (1868 –1933)– Recognized the importance of the role of human

behavior in the workplace.

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2. Behavioral Science Theory (contd.)A. Human Relations Approach (contd.)

The Hawthorne Studies (contd.) Illumination Programme

Experiment carried out to study the relationship between the intensity of light and productivity over a selected group of employees

result showed illumination did not affect output Relay Assembly Room Programme

Manipulation of physical surroundings to study the effect on productivity

working conditions changed to observe its effect on productivity

concluded that team feeling, recognition and social settings important for higher productivity

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2. Behavioral Science Theory (contd.)A. Human Relations Approach (contd.)

The Hawthorne Studies (contd.) Mass Interviewing Programme

20,000 workers interviewed to find out factors responsible for human behavior at work

social relations and interrelationship among employees influenced the group to enhance performance

Bank Wiring Observation Room Programme to find out the functioning of small groups over

individuals importance of informal group highlighted that set their

norms and protect the employees or workers

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The Hawthorne Studies (1927–1932)

• Conducted by Elton Mayo and associates at Western Electric– Illumination study—workplace lighting adjustments affected

both the control and the experimental groups of production employees.

– Group study—implementation of piecework incentive plan caused production workers to establish informal levels of acceptable individual output.

• Over-producing workers were labeled “rate busters” and under-producing workers were considered “chiselers.”

– Interview program—confirmed the importance of human behavior in the workplace.

– Bank Wiring Observation Room Program 14 workers were formed into a work group and observed for seven months

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2. Behavioral Science Theory (contd.)A. Human Relations Approach (contd.)The Hawthorne Studies’ conclusion:• Productivity was much affected by the attitudes of the worker

(Relationship between members of a work group and between members and their supervisors) rather than working condition and incentive plan (like hours of work, wage incentives, etc.)

• the informal work group formed at the work places, determined the worker behavior by setting the group norms, standard worker output, hierarchy of member, creating group security and group sentiments, thereby exercising strong control over the behavior of the workers

• emphasized more on humanistic and realistic view of social man from economic man

• Group or social factors played a dominant and significant role in the functioning of the organization in achieving their goals, since it provided the members the feeling of acceptance and dignity and satisfied employees

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Behavioral Management Perspective (cont’d)

• Human Relations Movement– Grew out of the Hawthorne studies.– Proposed that workers respond primarily

to the social context of work, including social conditioning, group norms, and interpersonal dynamics.

– Assumed that the manager’s concern for workers would lead to increased worker satisfaction and improved worker performance.

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The Human Relations View of

Management

Source: Van Fleet, David D., Contemporary Management, Second Edition. Copyright © 1991 by Houghton Mifflin Company. Used with permissions.

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Behavioral Management Perspective (cont’d)

• Abraham Maslow– Advanced a theory that employees are motivated

by a hierarchy of needs that they seek to satisfy.

• Douglas McGregor– Proposed Theory X and Theory Y concepts

of managerial beliefs about people and work.

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Need Hierarchy Theory

• Unlimited needs – when one need is fulfilled, another arises

• Unfulfilled needs creates anxiety which leads to motivation

• Needs arise in order– Classification of needs:

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Classification of Needs:

Desire to become what one is capable of

Self respect, autonomy, etc.

Affection, acceptance, friendship

Physical, financial, psychological

Food, shelter, clothing, sex, maternal need.

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Theory X and Theory Y

• Developed by Douglas McGregor• Theory X Assumptions

– People do not like work and try to avoid it.– People do not like work, so managers have to

control, direct, coerce, and threaten employees to get them to work toward organizational goals.

– People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.

Source: Douglas McGregor, The Human Side of Enterprise, Copyright © 1960 by McGraw-Hill. Reprinted by permission of The McGraw-Hill Companies. 04/07/23 40

Theory X and Theory Y (cont’d)• Theory Y Assumptions

– People do not dislike work; work is a natural part of their lives.

– People are internally motivated to reach objectives to which they are committed.

– People are committed to goals to the degree that they receive rewards when they reach their objectives.

– People seek both seek responsibility and accept responsibility under favorable conditions.

– People can be innovative in solving problems.– People are bright, but under most organizational

conditions their potentials are underutilized.

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Two Factor Theory

• Developed by – Frederick Herzberg for work motivation.

• Hygiene Factors = Dissatisfaction vs no Dissatisfaction

• Motivation Factors = No satisfaction vs Satisfaction

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Organizational Behavior• A contemporary field focusing on behavioral

perspectives on management.– Draws on psychology, sociology, anthropology,

economics, and medicine.• Important topics in organizational behavior

research:– Job satisfaction and job stress– Motivation and leadership– Group dynamics and organizational politics– Interpersonal conflict– The structure and design of organizations

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Behavioral Management Perspective…Today

• Contributions– Provided important insights into motivation,

group dynamics, and other interpersonal processes.

– Focused managerial attention on these critical processes.

– Challenged the view that employees are tools and furthered the belief that employees are valuable resources.

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Behavioral Management Perspective…Today (cont’d)

• Limitations– Complexity of individuals makes behavior difficult

to predict.– Many concepts not put to use because managers

are reluctant to adopt them.– Contemporary research findings are not often

communicated to practicing managers in an understandable form.

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Management ScienceOperations Management

Quantitative Perspectives

Quantitative Perspectives

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• Developed during World War II• Mathematicians, Physicists, and Other

Scientists helped in war techniques• Quantitative approach to management

involves use of quantitative techniques like:– Statistics– Information models– Computer simulations etc.

Management Science


• Primarily concerned with decision making.• Emphasis on application of mathematics and

statistics for decision making and problem solving.

Techniques of Management Science:• Linear Programming• Game Theory• Sampling Theory• Probability Theory• Simulation etc.

Operations Management Theory


• Concerned with managing the process of converting the inputs (raw-materials) into outputs (finished products)

• Concerned with quality, customer service and competition.

Techniques of Operations Management:• Quality Control• Total Quality Management• Just In Time Technique• Six sigma etc.

Quantitative Management Perspective


• Contributions– Developed sophisticated quantitative techniques to

assist in decision making.– Application of models has

increased our awareness and understanding of complex processes and situations.

– Has been useful in the planning and controlling processes.

Quantitative Management Perspective


• Limitations– Quantitative management cannot fully explain or

predict the behavior of people in organizations.– Mathematical sophistication may come at

the expense of other managerial skills.– Quantitative models may require

unrealistic or unfounded assumptions, limiting their general applicability.

Integrating Perspectives


• Systems Perspective• Contingency Perspective

System Perspective (Theory)


• A system is a set of inter-related and inter-dependent parts, arranged in such a way that produces a unified whole.

Feedback of System

Elements of Systems Theory


• Goal Orientation• Subsystem• Synergy• System boundary• Flow• Feedback• Open or closed

Contributions and Limitations


• Contributions of system theory:– Provides conceptual framework for meaningful

analysis and management of an organization– Emphasis on interrelations- interdependence– Helps in problem solving– It integrates various management theories by

emphasizing on physical aspect, behavioral aspect, and environmental aspect

Limitations of Systems Theory


• Too abstract and difficult to apply• Does not offer tools and

techniques• It does not offer unified body of

knowledge.

Contingency Perspective (Theory)


• The theory focuses on situational factors.• Main logic behind the theory:

– There is no one best method in all different situations

• The best method to solve a problem varies according to situation.

• Every organization is unique.• There are four contingency variables that

determine management Practice:

Four Contingency Variables


• Organization size• Routineness of Task

Technology• Environmental Uncertainty• Individual Differences

Contributions and Limitations:


• Contributions of Contingency Theory:• Encourages innovation in problem solving• Requires the use of analytical, critical,

and multidimensional techniques• Increased freedom to managers• Required managers to be more sensitive

and alert

Limitations of Contingency Theory


• Ignores universally applicable principles

• Fails to enlist all contingency variables• Focuses only on situation and not on

tools and resources• It ignores human behavioral aspects.

Emerging Management Issues and Challenges


• Globalization• Development of Environmentalism• Quality and Productivity• Ethics and social responsibility• Workforce diversity• Innovation and change• Empowerment of employees• Knowledge management• Technological development• Multicultural effects

Chapter 2: Outline• Precursors:

– Management in Antiquity– Early Management Pioneers

• Classical Perspective:– Scientific Management: F.W. Taylor– Administrative Management: Hanri Fayol– Bureaucracy : max Weber

• Behavioral Perspective: – Hawthorne studies, Human Relations Movement, Organizational Behavior

• Quantitative Perspective: – Decisional Theory and Management Science and Operation Science Theory

• Integrating Perspective: – System and Contingency Perspective

• Emerging Management Issues and Challenges

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Thank You Chapter Finish

Chapter 2 perspectives in management

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Transcript of Chapter 2 perspectives in management