Approaches of Management-

Classical Approach to Management Theory Classical management thought can be divided into three separate schools - scientiJic management, administrative theory and bureaucratic management. Classical theorists formulated principles for setting up and managing organizations. These views are labeled "Classical" because they form the foundation for the field of management thought. The major contributors to the three classified schools of management thought viz. scientific management, administrative theory and bureaucratic management are Frederick W. Taylor, Henry Fay01 and Max Weber respectively.

Scientific Management

 Scientific Management became increasingly popular in the early lgth century. Scientific management has been defined as "that kind of management which conducts a business or affairs by standards established, by facts or truths gained through systematic observation, experiment or researching". In other words, it is a classical management approach that emphasizes the scientific study of work methods to improve the efficiency of the workers. Some of the earliest advocates of scientific management were Fredrick W. Taylor (1 856-191 5), Frank Gilbreth (1 868-1924), Lillian Gilbreth (1 878-1972) and Henry (1 861-1919). Taylor (1 856-191 5) felt that tlie soldering problems could be eliminated by developing a science of management. Scientific management approach uses scientific methods to determine how a task should be done instead of depending on the previous experiences of the concerned worker. Table given below presents the steps in scientific management.

In essence, scientific management as propounded by Taylor (1 856- 19 15) emphasizes: 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 the job is performed in the desired way.

The major managerial practices that emerged from Taylor's approach to management are: the piece-rate incentive system, and the time-and-motion study

 Piece-rate incentive system: Taylor felt that the wage system was one of the major reasons for soldiering. To resolve this problem, he advocated the use of a piece-rate incentive system. The aiin of this system was to reward the workers who produced the maximum out-put.

Time and motion Study: Taylor tried to determine the best way to perform each and every job. To do so, he introduced a method called ''time'-and-Motion" study in which jobs are broken down into various small tasks or motions and unnecessary motions are removed to find out the best way of doing a job.

Limitations of Scientific Management: Scientific Management has provided many valuable insights into the development of management thought. In spite of the numerous contributions it made, there are a few limitations of scieqtific manageqent. These are as follows: The principles of scientific management revolve round the problems at the operational level and do not focus on the management of an organization from a manger7s.point of view. These principles focus on the solutions of problems from an engineering point of view. The proponents of scientific management were of the opinion that people were rational and were motivated primarily by the desire for material gain.

Taylor and his followers overlooked the social needs of workers and over Concept and Thenries or Management: Their emphasized their economic and physical needs. Re1ekanc.e to Extenbion Scientific Management theorists also ignored the human desire for job satisfaction. Since workers are inore likely to go on strike over factors like working conditions and job content rather than salary, principles of scientific management, which were based on the "national worker" model, become increasingly ineffective.

Administrative Theory

 While the proponents of scientific management developed principles that could help the individual workers perform their tasks more efficiently, the administrative theory focused on principles that could be used by managers to coordinate the internal activities of organizations. The most prominent of the administrative theorists was Henri Fayol. Henri Fayol (1849-1925), a French industrialist and a prominent European management theorist, developed a general theory of management. Fayol believed that with scientific forecasting and proper methods of management, satisfactory results were inevitable. Fayol was unknown to American managers and scholars until his most important work, "General and industrial management", was translated into English in 1949. Many of the managerial concepts that we take for granted today were first articulated by Fayol.

According to Fayol the business operations of an organization could be divided into six broad activities.

Technical: Producing and manufacturing products. Commercial: Buying, selling and exchange.

financial: Search for and optimal use of capital

Security: Protecting employees and property.

 Accounting: Recording and taking stock of costs, profits, liabilities, maintaining balance sheets and compiling statistics.

 Managerial: Planning, organizing, commending, coordinating and controlling

Fayol focused on the last activity i.e. managerial activity. Within this, he identified Jive major functions: planning, organizing, commanding, coordinating and controlling. Fayols five management functions are clearly similar to the modem management functions - planning, organizing, staffing and controlling. Fayol's concept of management forms the cornerstone of contemporary management Fayol outlined the following fourteen principles of management.

 i) Division of work: Work-specialization results in improving efficiency of operations. The concept of division of work can be applied to both managerial and technical functions.

 ii) Authority and responsibility: Authority is defined as "the right to give orders and the power to exact obedience." Authority can be formal or personal. Formal Authority is derived from factors like intelligence and experience.

Authority and responsibility go hand-in-hand. When a manger exercises authority, he should be held responsible for getting the work done in the desired manner.

iii) Discipline: Discipline is vital for running an organization smoothly. It involves obedience to authority, adherence to rules, respect for superiors and dedication to one's job.

 iv) Unity of command: Each employee should receive orders of instructions from one superior only.

 v) Unity of Direction: Activities should be organized in such a way that they all come under one plan and are supervised by one person.

vi) Subordination of the individual interest to the general interest: Individual interests should not take precedence over the goals of the organization.

vii) Remuneration: The compensation paid to employees should be fair and based on factors like business conditions, cost of living, productivity of employees and the ability of the firm to pay.

viii) Centralization: Depending on the situation, an organization should adopt a centralized or decentralized approach to make optimum use of its personnel.

ix) Scalar chain: This refers to the chain of authority that extends from the top to the bottom of on organization. The scalar chain defines the communication path in an organization.

 x) Order: This refers to both material and social order in organizations. Material order indicated the everything is kept in the right place to facilitate the smooth coordination of work activities. Similarly, social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization)

 xi) Equity: All employees should be treated fairly. A manager should treat all employees in the same manner without prejudice.

 xii) Stability of tenure of personnel: A high labor turnover should be prevented and mangers should motivate their employees to do better job.

xiii) Initiative: Employees should be encouraged to give suggestions and develop new and better work practices.

xiv) Esprit de Corps: This means "a sense of union". Management must inculcate a team spirit in its employees.

WHAT IS MAX WEBER’S BUREAUCRACY?

The definition of Weberian bureaucracy as provided by Max Weber is: ‘Bureaucracy is an organizational structure that is characterized by many rules, standardized processes, procedures and requirements, number of desks, the meticulous division of labor and responsibility, clear hierarchies and professional, almost impersonal interactions between employees.’

MAX WEBER’S SIX PRINCIPLES OF BUREAUCRACY

There are specific features of Max Weber’s bureaucracy, which are also known as Max Weber’s six principles of bureaucracy.

Here are the six major Max Weber characteristics of bureaucracy:

1.            Task specialization

2.            Formal selection

3.            Impersonal (impersonality and personal indifference)

4.            Hierarchical layers of authority

5.            Rules and regulations

6.            Career orientation

Let’s look at these in detail.

1.            TASK SPECIALIZATION

The Max Weber Theory of Bureaucracy proposes that all business tasks must be divided among the employees. The basis for the division of tasks should be competencies and functional specializations. In this way, the workers will be well aware of their role and worth in the organization and what is expected of them.

The theory states that division of labor based on expertise and skills is immensely beneficial for any business. This also ensures that each department has specific tasks and workers to oversee those tasks.

The tasks are carried out smoothly and easily in this manner because managers know who is working on exactly what. The accountability of each task and each department is transparent. In Max Weber’s bureaucracy, each employee is clearly aware of their responsibilities and going beyond your specialty or helping your colleagues is not allowed.

2.            FORMAL SELECTION

Hiring and onboarding of employees in the bureaucracy are done exclusively according to the specialties and technical skills of the candidates. These skills may have been acquired by the candidates through education, training and experience.

After onboarding, workers must be compensated for their services, which depends on their position in the organization. Their contract must be designed according to the rules and regulations of the organization and the employee can’t hold any ownership interest in the organization.

3.            IMPERSONAL RELATIONSHIPS

Another principle of the bureaucratic theory is that the relationships among employees and between managers and employees must be impersonal. They should only be of a professional nature and, thereby, distant. Weber included this principle in his theory because he felt it would eliminate nepotism, politics and outsider involvement.

The impersonal relationships are a prominent feature of Max Weber’s bureaucracy. Employees are not allowed to interfere with the affairs of other employees, managers and the organization. Communication among the employees should not involve emotions, personal sharing and feelings. The decision-making process must only involve rationality instead of emotions.

4.            HIERARCHICAL LAYERS OF AUTHORITY

In bureaucratic management, the managerial structure is organized into hierarchical layers. Each layer of management has a team of employees under them. These managers are responsible for the performance of their team.

These hierarchical positions in bureaucratic organizations are essentially the trademark and foundation of Max Weber’s bureaucracy. In this hierarchy of authority, positions are ranked in order of precedence and the highest position in the ladder generally has the highest authority in the organization. The bottom hierarchical layers are generally the positions that are supervised by higher layers.

Such hierarchy in a bureaucracy reflects the degree of delegation and gives a clear picture of the division of authority and responsibilities.

5.            RULES AND REGULATIONS

Max Weber’s theory of bureaucracy clearly lays out that every ‘rational organization’ must have a set of rules and regulations. These rules and regulations must be followed without any fault. This ensures uniformity in the business and the staff members know what is expected of them.

Strict rules allow better coordination of employee performance and efforts. Administrative processes should also be clearly defined in the official rule book or reports. When new rules are introduced in the organization, the senior management must be notified. They will then pass on the information to their respective departments.

6.            CAREER ORIENTATION

The Weberian model of bureaucracy selects employees on the basis of technical skills, which helps optimize human capital. According to Max Weber, selecting candidates according to their competency and skills ensures that the right people are in the right jobs.

CRITICISMS OF WEBERIAN BUREAUCRACY

•             The bureaucratic management theory given by Max Weber has highly rigid and strict regulations to follow for the employees and the managers

•             Informal groups such as contractors play a significant role in most business organizations, but they aren’t important in Max Weber’s management theory

•             The Weberian model of bureaucracy requires a ton of paperwork which contributes to a huge waste of money, effort and time

•             A large number of rules and formalities tend to delay the decision-making process and, thereby, important business tasks

•             The bureaucratic structure usually suits government organizations, but businesses need quick decision-making, which is not a characteristic of Max Weber’s bureaucracy. That’s why it is not beneficial for corporate organizations

•             Human Resource management has limited scope in this type of organization structure

•             Max Weber’s bureaucracy only focuses on the technical skills of workers and neglects the employee’s dedication, hard work and commitment

•             In a bureaucratic structure, it can get difficult for employees and managers to communicate and coordinate among themselves

Hawthorne Experiment/Elton Mayo contribution to management: In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the Harvard Business School were invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago. The experiment lasted up to 1932. The Hawthorne Experiments brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. Mayo’s idea was that logical factors were far less important than emotional factors in determining productivity efficiency. Furthermore, of all the human factors influencing employee behaviour, the most powerful were those emanating from the worker’s participation in social groups. Thus, Mayo concluded that work arrangements in addition to meeting the objective requirements of production must at the same time satisfy the employee’s subjective requirement of social satisfaction at his work place. The Hawthorne experiment consists of four parts. These parts are briefly described below:-

1. Illumination Experiment.

2. Relay Assembly Test Room Experiment.

3. Interviewing Programme.

4. Bank Wiring Test Room Experiment.

 1. Illumination Experiment: This experiment was conducted to establish relationship between output and illumination. When the intensity of light was increased, the output also increased. The output showed an upward trend even when the illumination was gradually brought down to the normal level. Therefore, it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity.

2. Relay Assembly Test Room Experiment: This phase aimed at knowing not only the impact of illumination on production but also other factors like length of the working day, rest hours, and other physical conditions. In this experiment, a small homogeneous work-group of six girls was constituted. These girls were friendly to each other and were asked to work in a very informal atmosphere under the supervision of a researcher. Productivity and morale increased considerably during the period of the experiment. Productivity went on increasing and stabilized at a high level even when all the improvements were taken away and the pre-test conditions were reintroduced. The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity.

3. Mass Interview Programme: The objective of this programme was to make a systematic study of the employees’ attitudes which would reveal the meaning which their “working situation” has for them. The researchers interviewed a large number of workers with regard to their opinions on work, working conditions and supervision. Initially, a direct approach was used whereby interviews asked questions considered important by managers and researchers. The researchers observed that the replies of the workmen were guarded. Therefore, this approach was replaced by an indirect technique, where the interviewer simply listened to what the workmen had to say. The findings confirmed the importance of social factors at work in the total work environment.

 4. Bank Wiring Test Room Experiment: This experiment was conducted by Roethlisberger and Dickson with a view to develop a new method of observation and obtaining more exact information about social groups within a company and also finding out the causes which restrict output. The experiment was conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers. After the experiment, the production records of this group were compared with their earlier production records. It was observed that the group evolved its own production norms for each individual worker, which was made lower than those set by the management. Because of this, workers would produce only that much, thereby defeating the incentive system. Those workers who tried to produce more than the group norms were isolated, harassed or punished by the group.

Quantitative Approaches to Management Theory

The management perspective emerged during the world war 11. During the war, the army (in the U.S and U.K) brought together managers, government officials . and scientists to help it deploy its resources more efficiently and effectively. . These experts used some of the mathematical approaches to management devised earlier by Taylor and Gantt to solve the logistical problems encountered by the army during the war. The quantitative approach to management includes the application of statistics, optimization models, information models and computer simulation. More specifically, this approach focuses on achieving organizational effectiveness through the application of mathematical and statistical concepts. The three main branches of the quantitative approach are:

 i) management science,

ii) operations management, and

 iii) management information system.

i) Management science:

The management science approach stresses the use of mathematical models and statistical methods for decision-making. It visualizes management as a logical entity, the action of which can be expressed in terms of mathematical symbols, relationships and measurement data. Another name commonly used for management science is operations research. Recent advances in computers have made it possible to use complex mathematical and statistical models in the management of organizations. Management science techniques are widely used in the following areas. Capital budgeting and cash flow management:

 It includes the following.

1. Production scheduling.
2. Developing product strategies.
3. Planning for human resources development programs.
4. Maintenance of optimal inventory levels.
5. Aircraft scheduling.

Various mathematical tools like the waiting-line theory or queering theory, linear programming, the Program Evaluation Review Technique (PERT), the critical path method (CPM), the decision theory, the stimulation theory, the probability theory, sampling , time series analysis, etc., have increased the effectiveness of managerial decision-making.

ii) Operations Management:

Operations management is an applied form of management science. It deals with the effective management of the production process and the timely delivery of an organization's products and services. Operations management is concerned with:

 i) inventory management,

 ii) work scheduling,

iii) production planning,

 iv) facilities location and design, and

 v) quality assurance.

The tools used by operations managers are forecasting, inventory analysis, materials requirement, planning systems, networking models, statistical quality control methods, and project planning and control techniques.

 iii) Management information systems (MIS):

 Management information system focuses on designing and implementing computer-based information systems for business organizations. In simpler term, the MIS converts raw data into information and provides the needful information to each manager at the right time in the needed form.

Modern Approaches to Management Theory .

Besides the classical and behavioral approaches to management, there are certain modem approaches to management, viz. the systems theory and the contingency theory. These two approaches have significantly shaped modem management thought and are discussed below

Systems Theory

Those who advocate a systems' view contend that an organization cannot exist in isolation and that management cannot function effectively without considering external environmental factors. The systems approach gives managers a new way of looking at an organization as a whole and as a part of the larger external environment.

• According to this theory, an organizational system has four major components inputs, transformation process, output and feedback. Inputs - money, materials, men, machines and market other informational sources - are required to produce goods and services.
• Transformation processes or throughputs, managerial and technical abilities are used to convert inputs into outputs.
• Outputs are the products, services, profits and other results produced by the organization.
• Feedback refers to information about the out comes and the position of the organization relative to the environment in which it operates.
• The two basic types of the systems are closed and open systems.
• A system that interacts with this environment is regarded as an open system and a system that does not interact with its environment is considered a closed system.

Frederick Taylor, for instance, regarded people and organizations as closed system. In reality, all organization are open systems as they are dependent on interactions with their outside environment, whether it is a new product decision or a decision related to the employees of the organization, the organization must consider the role and influence of environmental factors.

Contingency Theory

This theory is also known as the situational theory. It has been widely used in recent years to integrate management theory with the increasing complicity of organizations. According to this theory, there is no one best way to manage all situations. In other words, there is no best way to manage. This theory holds good for several management situations.

• The contingency approach to management was developed by managers, consultants, and researchers who tried to apply the concepts of the major schools for management through real life situations.
• Managers, who follow this approach, make business decisions or adopt a particular management style only after carefully considering all situational factors.
• According to the contingency approach, "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" (Fredrick, 19 15).