12-01-2023

Principles of Management
Day - 3

Recap

• Three terms
• process
• effectively
• efficiently
• Characteristics of management
• Levels of management
• Managerial skills required
• Characteristics of Excellent Companies

1
 12-01-2023

Evolution of Management

Pre Scientific Classical Neo Classical Modern

Management Management Management Management
Period School School School
• Ancient • Scientific • Hawthrone • Systems
Monuments Management Experiments Approach
• War Strategies • Administrative • Contingency
Management etc. Approach

Why study Management History ?

“Those who cannot learn from history are condemned to repeat it.”
George Santayana

• Management is the most used tool today in any enterprise.

• History of its evolution helps us to understand its metamorphosis to its current
level.

2
 12-01-2023

Management in the ancient civilization

• The size and complexity of these structures suggest that there must have
been people (managers) who coordinated the labor and resources during
their construction.
• Similarly, the Romans and the ancient Chinese could not have managed
their vast empires without management, nor could the Phoenicians and the
Greeks have dominated ocean going trade without management.

Looking back

• Organized attempts directing people for planning, organizing, executing,

leading, monitoring and controlling activities have existed since the
beginning of the civilization.

• It has been only during the last century that this subject has undergone
systematic investigation, acquired a common body of knowledge and has
become a formal discipline.

• It has been the fastest growing discipline both in content and application
over the last 50 years

3
 12-01-2023

Evolution of Management

• Despite its ancient roots, modern management is less than 150 years old.
• A comparison of management before and after the Industrial Revolution
shows that the former is only a shadowy comparison to the latter.

• Prior to the Industrial Revolution, work was performed, mostly in home and
on farms by forced labor or family members, and the output was often for
employers’, local, or family consumption.

• Industrial Revolution led to the selling of a wider variety of goods to a wider

variety of customers in more distant locations. This led to the establishment
of vast companies, machines, factory system, etc.

Classical Management Theory

• Classical management theory is a branch of management theory which
evolved around the 19th century.

• It was developed during the industrial revolution when problems related to

factory systems began, to recognize the role that management plays in an
organization. Particularly focusing on the efficiency of the work process.

• Classical approach of management professes the body of management

thought based on the belief that employees have only economical and
physical needs.

• It does not take into account social needs or job satisfaction, but instead
advocates a specialization of labor, centralized leadership and decision-
making, and profit maximization

4
 12-01-2023

Classical Management Theory

• There are three main branches within the classical management approach:
• Scientific management (Taylorism)

• Administrative principles (Fayolism)

• Bureaucratic organisation (Weber)

• Common assumptions:
• Employees in the workplace act in a rational manner
• Employees are primarily driven by economic concerns.

Contributors – Classical management theory

5
 12-01-2023

Scientific Management Theory

• It was proposed by Frederick Winslow Taylor in 1911. Therefore this theory is

commonly referred to as Taylorism.

• Taylor was working as a labor and machinist at a steel company when he

first proposed this theory.

• In the words of Taylor, “Scientific management means knowing exactly

what you want men to do and seeing that they do it in the best and
cheapest way.

• It mainly focuses on the problems of industrialists and strives to maximize the

productivity on the whole by increasing the productivity of individual.

Scientific Management Theory

• It focused on increasing individual

efficiency by training workers, dividing the
tasks between management and workers
and eliminating unnecessary movements
in the workplace

6
 12-01-2023

Scientific Management Theory

• Fundamental principles:
• Replacing rules of thumb with science (organized knowledge).

• Obtaining harmony, rather than discord, in group action

• Achieving cooperation of human beings, rather than chaotic individualism

• Working for maximum output, rather than restricted output

• Developing all workers to the fullest extent possible for their own and their
company’s highest prosperity

Taylor’s Principles

• Analyse the problem (JOB) and find the best way to do the job
• Division of labour among the labours in the production floor
• Presence of supervisors to monitor the production efficiency on the floor
• Workers are selected based on their skills to perform a job
• Workers should be given training to improve their efficiency to do a
particular job according to their position in the chain
• The working conditions and tools are improved to maximum productivity
while decreasing the cost of production
• The workers are paid according to their productivity and incentives are
given to motivate them

7
 12-01-2023

Advantages of Taylorism

• Improves economic efficiency of the company

• Increase labour productivity
• Assigning workers to positions based on their skill
• Division of jobs between managers and workers
• Incentives given to increase the productivity of labours
• Only one right method to do things

Criticism against Taylorism

• Though it promotes individual productivity, it doesn’t develop an sense of

responsibility in an individual for what he/she does and does not push
decision making through all levels of the organization

• Front line workers need to be flexible to adjust to a rapidly-changing

environment. Rigid, rules-driven production floor and may struggle to adjust
to it

• It focus too much on the mechanics of the production line and fails to value
humans involved in it

8
 12-01-2023

Bureaucratic Management

• According to Weber, bureaucracy is the most efficient form of organisation.

• The organization has well defined line of authority and clear rules and
regulations which are strictly followed.

• Theory mainly focuses on organizational structure.

• He focused on hierarchy and authority-control strict lines in structuring the

organization into an hierarchy.

• In bureaucratic management, each group of employees (presidents, vice

presidents, managers, assistant managers, supervisors) has to report to a
higher authority that ultimately reaches to the CEO or president of the
organization

Characteristics of Weber’s Ideal Bureaucracy

• Division of labor based on functional specialization

• Well-defined hierarchy of authority
• A system of rules concerning the rights and duties of positions
• A system of procedures for dealing with work situations
• Lack of interpersonal relations
• Selection and promotion of employees based on technical competence

9
 12-01-2023

Criticism against Bureaucratic Management

1. Ideal type bureaucracy is not found in reality: An ideal fully developed
bureaucracy is not found in reality.

2. Anti-democratic: Weber observed possible ill effects of a bureaucratic system while

functioning in a democratic order. He noted permanent officials may be inclined
to misuse their authority

3. Too rigid to change: The Weberian model can best function in a stable environment
with routine and repetitive tasks. Its capacity for adaptation to change is limited.
This model is dysfunctional in terms of development and also in terms of jobs
involving jobs and creativity

4. Ignores informal relationship

19

Administrative Management Theory

• The first expert of Administrative Management Theory was Henri Fayol

• Fayol is called the "Father of Modern Management"

• Henri Fayol was a French industrialist and a management consultant

• Proposed

• Six primary functions of management

• Fourteen principles of management

20

10
 12-01-2023

Administrative Management Theory

Fayol divided the total industrial activities into six categories:

1. Technical (Production, Manufacturing)
2. Commercial (Buying, Selling, Exchange)
3. Financial (Search for and optimum use of capital)
4. Security (Protection of property and person)
5. Accounting (Balance sheets, Cost statistics)
6. Management (Planning, Organizing, Coordinating, commanding,
Controlling)

21

The 14 guiding principles by H. Fayol

22

11