Theories of Management

flowchart
a(Theories of Management)-->b(Classical Theories)
a-->c(Quantitative Theories)
a-->d(Modern Theories)

b-->b1(Scientific Management)
b-->b2(Administrative)
b-->b3(Bureaucratic)

c-->c1(Management Science)
c-->c2(Operations Management)
c-->c3(Management Infortmation System)

d-->d1(Contingency)
d-->d2(Systems)

Classical Theories

Scientific Management

increasingly popular in the early 19th century coordinating the enterprise for everyone’s benefit including increased wages for laborers

system devised by industrial engineers for the purpose of serving the common interests of employers, workmen and society at large through the elimination of avoidable wastes, the general improvement of the processes and methods of production, and the just and scientific distribution of the product.

bottom up view

Proponents

Frederick Winslow Taylor; the theory is also called Taylorism after him

Emphasizes on

• Need for developing a scientific way of performing each job
• Training and preparing workers to perform that particular job
• Establishing harmonious relations between management and workers so that job is performed in a desired way

Steps Involved:

1. Develop a science for each element of the job to replace old rule of methods
2. Scientifically select employees and train them to do the job as described
3. Supervise employees to make sure they follow the prescribed methods
4. Continue to plan the work but use workers to actually get the work done

Two Managerial Processes

emerged from Taylor’s approach to management

1. Piece Rate Incentive System highest output gets rewarded

2. Time and Motion Study jobs are broken down into various small tasks, timing each part and rearranging the parts into the most efficient method of working time studies → observe and record time taken to complete a task; determination of standard time (or acceptable time taken to complete a task to keep up with normal pace) motion studies → recording and observing the body language

Limitations of Scientific Management

1. Technical point of view, engineering point of view NOT managerial point of view
2. Does not count the social aspects and needs; focuses on material acquisition only
3. Ignored human desire for job satisfaction. Workers are more likely to go on protests and strikes rendering scientific management ineffective

Administrative Theory

focuses on principles that could be used by managers to coordinate the internal activities of organizations top-down view

Henri Fayol - Father of Management he believed scientific forecasting and proper methods of management would lead to satisfactory results believed by focusing on managerial practices he could minimize misunderstandings and increase efficiency in organizations was the CEO of a mining company

**General and Industrial Management → work by Henri Fayol

Accd to him, operations can be divided into six broad areas - Technical - Producing and manufacturing Commercial - Buying, selling, and exchange Financial - Search for and optimal use of capital Security - Protecting employees and property Accounting - maintaining records of cost, profits, liabilities, balance sheets Managerial - Planning, organizing, commending, coordinating and controlling.

believed in control and strict, treelike, command chain

14 Principles

Division of work authority and responsibility discipline unity of command unity of direction subordination of individual interest to the general interest → goal of company >>> individual interest initiative - employees should be encouraged to give their inputs Remuneration - fair pay based on factors like cost of living and productivity of employment equity - everyone should be treated the same esprit de corps - morale

Bureaucratic Management

by Max Weber Weber observed a lot of nepotism which he found gross and unjust

”a bureaucracy is a highly structured, formalized and impersonal organization. In other words, it is a formal organization structure with a set of rules and regulations” — Max Weber

fixed hierarchical structure very organized impersonal clearly defined set of roles, well defined chain of command rules based management specialization

Behavioural Approach to Management

influenced by Hawthorne studies focused on the individual aspect

Abraham Maslow’s hierarchy of needs

Quantitative Theories

emerged during WW2

Management Science

emphasizes use of mathematical models and statistical models for decision making aka operations research

criticism This approach has been criticized for its overemphasis on mathematical tools. Many managerial activities cannot be quantified because they involve human beings who are governed by many irrational elements as well

Operations Management

effective management of the production process and the timely delivery of an organization’s products and services. applied form of management science

Management Information System

focuses on designing and implementing computer-based information systems for business organizations.

modern theories of management

Theories of Management

Modern Theories

Systems Theory

Systems approach looks at

4 major components -

1. Input
2. Transformational Process
3. Output
4. Feedback

Says there are two types of systems

flowchart
a-->b(open systems)
a-->c(closed systems)
a(systems)

open systems - those that interact with its environment closed systems - those that do NOT interact w its environment

Contingency Theory

also called situational theory

it says there is no one best way to manage all situations

it was developed by managers, consultants, and researchers who tried to apply the concepts of the major schools for management through real life situations the task of managers is to identify which technique will in a particular situation or under particular circumstances and at a particular time, best contribute to the attainment of management goals”

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