Early Developments and Classical Perspective

Early Developments

While the practice of management can be traced to 2500 B.C., it was not given serious attention until the late 1800s when large organizations emerged. People have been shaping and reshaping organizations for many centuries. Observing behind through world history, we can discover the stories of people working together in formal organizations such as the Greek and Roman armies, massive construction works such as Egyptian pyramids and the great wall of China.

The Industrial Revolution guide to the arrival of industrialization in western countries. Big factories were established in Europe and the USA with great possibility for mass production of goods. However, very little was understood about these factories and their functioning. There was a very small idea about how such organizations should be managed. Hence, the requirement for acceptance about the management of such organizations soon became obvious. The early approaches to the study of management, thus, concerned the essential nature of management and its relationship to the production processes. The early pioneers include:

1. About 2500 years ago, a Chinese General named Sun Tzu, wrote an astounding piece of work "The Art of War". In his book, Sun Tzu admit the need for inter-organizational and intra-organizational communications, hierarchy and staff planning.

2. Between 400 B.C.-360 B.C., Socrates and Aristotle, two Greek Philosophers, wrote about the Principles of Management and The Nature of Executive Power.

3. Robert Owen (1771-1858), a British industrialist, was one of the first managers to show admiration and nobility to workers in his factory. He implemented better working conditions, raised the minimum age for child labor, reduced hours, and supplied meals.

4. Charles Babbage (1792-1871), an English mathematician, applied mathematic principles to find ways to make efficient use of facilities and materials. He also advocated profit-sharing plans.

5. Andrew Ure, in the early seventeenth century, pioneered management principles. He was one of the world's first professors to teach management principles at Anderson's college in Glasgow.

6. Adam Smith, about 200 years ago, described the merits of the splitting of labor and specialization. Smith concluded that splitting of worker increased productivity and efficiency by increasing each worker's skill and efficiency, by saving time lost in changing tasks, and by creating labour-saving innovations and machinery.

7. Henry Ford (1863-1945) has long been a symbol of the industrial age. His name is synonymous with massive production and the development of modern management theory. He started the Ford Motor Company in 1903. He understood that the only way to make a car was to produce it at high volume and low cost. Ford focused his factory efforts on coherence, mechanizing wherever possible, and splitting down tasks into their smallest components. Ford is also important as a management thinker because he developed ideas and concepts about organizational function.

The Classical Perspective:

The Classical Theory marks the beginning of modern management analysis. This theory emerged during the nineteenth and early twentieth centuries and to some extent is undertaken and exercised by many managers even today. The classical theory seeks to generalize managers. The basic theme of this assumption is that if a particular business operation is successful, or if a particular problem was effectively sorted out by application of a specific strategy , then the methods of strategies through success was achieved by the managers could be equally, effectively and efficiently used by others in the case of similar business situations in future. This theory is based on the belief that people are a rational economic creature. They want economic gain.

The classical perspective of management actually includes three different areas:

1. Scientific Management Theory
2. Administrative Management Theory
3. Bureaucracy Theory

Scientific Management Theory:

Scientific Management Theory was developed to solve two major problems: (1) how to increase the output of the average worker, and (2) how to improve the efficiency of management. Scientific management theory provides managers with a scientific basis for solving problems and making decisions. This approach arose out of a need to improve a manufacturing productivity through the most efficient use of physical and human resources. This theory focuses on the job. It is concerned with improving the performance of the individual worker. Scientific management, thus, advocated the application of scientific methods to analyze work and to determine how to complete production tasks efficiently.

Some of the earliest advocates of scientific management includes:

1. Fredrick W. Taylor (1856-1915):

Taylor is known as the father of scientific management, divided each work in different subdivision on the basis of time needed to complete any work, motion study and fatigue study. Doing so, production costs decreased, quantity to quality of goods increased a lot. This principle gave emphasis on the system of wage according to the work.

• During his work at the Midvale Steel Company and Bethlehem steel Company, he estimated that worker output was one-third of what was feasible. They worked at a downtempo. In addition, there were no standardized tools, tasks, and processes. Virtually, no effective work standards existed. These had inefficiency in the work system.
• He determined what each worker should be producing and then he designed the most efficient way of doing each part of the overall task.
• He implemented a differential piece rate system (increasing the pay of each worker who met and exceeded the target level of the output set for his job).
• Taylor worked as an adviser for different companies, where he studied and redesigned the jobs, introduced rest periods to lessen drowsiness, and implemented a piece rate system. The results were higher quality and quantity of yield and improved morale.
• During these experiences and observations, he formulated the ideas that are known as "scientific management."

Taylor's entire approach to scientific management was the idea that there is one best and suitable way of doing everything. His pioneering work "The Principles of Scientific Management", which was published in 1911 explains"The Principles of Scientific Management. The main principles of Taylor's scientific management approach are as follows:

Standardization:

Standards of work, equipment and the process should be fixed by scientifically studying the nature of work. Previously, workers used the "rule-of-thumb" method.

Time and Task Study:

Time and task study should be used to determine the standards for the worker. There should be one best way to do the work. Previously, no standards for time and task were in use.

Systematic and Selection Training:

The operatives should be selected, taught, trained and developed scientifically. Previously, workers chose work and train themselves as best they could.

Pay Incentives:

The output should be linked to pay for employee motivation. Each worker should be paid for the amount of work done by him. Effort-reward relation should be maintained for increasing productivity. Previously, workers used to get equal pay, irrespective of their output.

Close Co-operation between Managers and Operatives:

Co-operation between managers and the operatives should be encouraged to accomplish work in accordance with the scientific method, division of work, and incentive system. Previously, management and workers were in continual conflict.

2. Frank Gilbreth (1826-1924) and Lillian Gilbreth (1878-1972):

In the early 1900s, the husband and wife team of Gilbreth, both industrial engineers by profession, made significant contributions to the development of scientific management thought. Their name is associated with methods study. Lillian Gilbreth is also known as the "first lady of management". The Gilbreth used motion picture films to study hand-and-body motions. While analyzing and studying bricklaying, they studied each movement of the bricklayer. They eliminate unnecessary movements. Their main concern was on "economy of movement". They emphasized on the use of techniques and methods to help workers in developing their fullest potential through training, improved tools, working environment, and standardized work methods. Their contributions were mainly regarded to:

• Work simplification by using motion studies,
• Use of the techniques called "flow charts" to record process and work-flow patterns,
• Study of worker fatigue which affect workers' health and productivity , and
• Application of principles of management and motion studies to improve organizational performance.

3. William H. Leffingwell (1864-1932):

Leffingwell is looked upon as the father of office management. He applied the principles of scientific management to office work. Leffingwell developed five principles of effective work. These were: (1) planning the work, (2) scheduling the work, (3) executing the work, (4) measuring the work, and (5) rewarding the worker. Since, these principles can be related to the proper management of all work, they can be applied to any organization.

4. Henry L. Gantt (1861-1919):

Gantt, a mechanical engineer, worked with Taylor at the Midvale Steel Company during the 1880s. He refined the production control and cost control techniques. One called Gantt Chart, which is essentially means of scheduling work and can be generated for each and every individual worker for a complicated project as a whole. Gantt also refined Taylor's ideas about piecework system. The management technique like Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are based on the principles of Gantt chart.

5. Harrington Emerson (1853-1931):

Emerson concerned himself with management as a whole, not only with efficiency and productivity of work. In his book Twelve Principles of Efficiency, published in 1911, Emerson concentrated on such things as overall objectives, cost accounting, and the functions of staff department. He carried out his studies mainly in some companies in the United States and advocated measures efficiency such as the unit standard cost.

Contributions Scientific Management Approach:

The contributions of the scientific management can be listed as follows:

1. Scientific management is the foundation stone of modern management theory. It represents a key milestone in the development of management thought. It provided a framework from which later theories are developed.

2. Scientific management provided valuable insights into production efficiency and devised techniques for reducing wastages.

3. Scientific management emphasized on improved working conditions by reducing fatigue and redesigning machines and tools.

4. Scientific management developed many management tools like time study, motion study, fatigue study, and flow charts. These tools have significant application activities even today.

5. It brings changes in the attitude of employer and employees.

6. It leads to greater economic prosperity and helps improve the living standard of workers.

Limitations of Scientific Management Approach:

There are many limitations of scientific management approach. The common criticisms against scientific management approach have been as follows:

1. Scientific management was almost exclusively concerned with the "shop level". Its applicability is limited to other aspects of management.

2. Scientific management assumed that the organizations remain stable and simple. Hence, universal procedures were prescribed. Today's business reality does not subscribe to these views.

3. It views employees' needs primarily in economic terms. It has not mentioned about the informal relation between workers on the job in order to meet their social need.

4. Employees are forced to work on the same task time and again leading to monotony. Workers have no life outside their work.

5. In the name of increasing efficiency, workers are forced to speed up the process beyond their capacity.

6. Workers/ laborers are not allowed to take the initiative. Foreman issues a detailed set of instructions in respect of the job to be performed and the method of performing it.

Administrative Management Theory:

The administrative management theory is that management approach which examines an organization from the viewpoint of the managers and executives liable for co-ordinating the activities of multiple groups and units throughout the entire organization. It views management as a profession that can be learned by understanding basic principles. It is concerned with management activities, principles and functions. The primary contributors to administrative management were Henry Fayol, Dyndale Urwick, Max Weber, Chester I. Barnard and Marry Parker Follett.

Henry Fayol (1840-1925):

Henry Fayol, a french industrialist and mining engineer by profession, developed the theory of administrative management. He was the contemporary of Taylor. He tried to develop a comprehensive conceptual framework and general organization and management that are applicable to all organizations. Scientific Management concentrates only on shop floor level like job design and payment of workers whereas Administrative Theory is concerned with the entire range of managerial performance. According to Fayol, management is a distinct field of study involving many managerial functions like foretelling, planning, organizing, coordinating, and controlling. In 1916, he published his book 'Administration Industrielle et. general'. Later on, this book was translated into English as "General and Industrial Management". He divided all industrial activities into six groups, namely:

• Technical activities (production, manufacturing)
• Commercial activities (purchasing, selling and trading)
• Financial activities (search, identify, and collect for and optimum use of funds)
• Security activities (security of property, goods and people)
• Accounting activities (stock taking, cost statistics and balance sheet)
• Managerial activity (planning organizing, directing, coordinating and controlling)

Based on his experience, he developed the fourteen principles of management, which are universally applicable to all types of organizations. Brief descriptions of principles of management propounded by Henry fayol are as follows:

1. Division of Work:

This principle is similar to Adam Smith's division of labor. This implies that every employee should be assigned only one type of work. Specialization increases yield by making employees more efficient and competent.

2. Authority and Responsibility:

Authority and responsibility are co-existent and they must go hand in hand. Authority is the right to give orders and command and responsibility is the obligation to accomplish the expected result. Authority without responsibility leads to irresponsible behavior while responsibility without authority will make a person ineffective.

3. Discipline:

Employees must obey and respect the rules that govern the organization. Discipline requires clear and fair agreements , good supervision and judicious application of penalties.

4. Unity of command:

An employee should receive orders and instructions from only one superior at a time. If a subordinate has more than one superior, it will undermine authority, weaken discipline, divide loyalty, and lead to confusion and this result in a delay in performance.

5. Unity in Direction:

There should be one head and one plan for a group of activities having the same objective. The related activities should be put under one group, there should be one plan of action and they should be under the control of one particular manager.

6. Subordination of Individual Interest to general Interest:

The interest of any one employee or group of employees should not take precedence over the interest of the organization as a whole. So, efforts should be made to reconcile individual interest with common interest. When there is a conflict between the two, the interest of the organization should prevail over individual interest.

7. Remuneration of Personnel:

Employees should be paid fair remuneration in accordance with their contribution. Exploitation of employees in any manner must be eliminated. Remuneration system must be acceptable to both the employer and employees.

8. Centralization:

Centralization implies decreasing the role of the subordinates whereas decentralization increases their role. No hard and fast rules can be laid down regarding the extent of authority to be retained at the top level or dispersed among the subordinates. The optimum balance between the two must be maintained depending on the condition of the business and the ability of subordinates.

9. Scalar chain:

The scalar chain refers to the chain of superiors ranging from the utmost authority to the bottom level in an organization. It is the unbroken line of command from the top to the bottom in the organizational structure. All communications should flow through the established chain of command.

10. Order:

There should be a place for everything and everything should be in its proper place. Similarly, there must be a place for everyone and everyone in his appointed place. The first one is called material order and the second one is called social order.

11. Equity:

Management should treat all the employees with justice and equality. There should be equity of treatment in dealing with subordinates and no discrimination should be made. Nepotism and favoritism should be avoided.

12. Stability of Tenure of Personnel:

Retaining productive creative employees should always be a prime concern of the manager. Reasonable security of service should be provided to all employees. Stability of tenure helps develop loyalty and attachment on the part of employees.

13. Initiative:

The management should encourage subordinates to think out and execute the assigned task in a better way. Subordinates should be given freedom to conceive and carry out their plans, even though some mistakes may occur.

14. Espirit De Corps:

This principle states that "Union is Strength". There must be a team spirit and coordination among the members of an organization. Management should not follow the principle of divide and rule. Unity is strength and the strength of an enterprise depends upon the cooperation and harmony in individual efforts.

Contributions of Administrative Management Theory:

The major Contributions of administrative management theory are as follows:

1. Administrative management laid heavy emphasis on universal principles of management.

2. The theory laid the foundation for the study of management functions of planning, organizing, staffing, directing and controlling.

3. This theory has provided the conceptual framework for analyzing the management process.

4. This theory has isolated and analyzed management as a separate discipline.

5. This theory has also identified six managerial skills such as physical , mental, moral, educational, and technical skills and experience.

Limitations of Administrative Management Theory:

Some of the limitations of administrative management theory are as follows:

1. This theory has not paid proper attention to the human behavioral aspects in an organization.

2. This theory is inconsistent. It has not considered the situational factors.

3. It is vague. There is no clear distinction between structure and process of organization.

4. It does not provide guidance as to when the principle must be applied, which principle should take precedence over the other while they are being applied.

5. This principle is based on personal experience and a little observation.

Comparison between Taylor and Fayol:

The work of Taylor and Fayol are complementary to each other. They tried to develop a logic and orderly basis of management. Fayol was a management philosopher and therefore his ideas are a combination of humanism and social awareness with business efficiency. On the other hand, Taylor was a management engineer. He concentrated on raising efficiency at the shop floor level. The difference of ideas between Taylor and Fayol can be summarized as follows:

Bureaucratic Management (Max Weber 1864-1920):

Max Weber was a German sociologist. He developed a theory of bureaucracy. Bureaucracy is a form of organization characterized BY division of labor, a clearly defined hierarchy, detailed rules and regulations and impersonal relations. There should be a hierarchy of authority involving superior-subordinate relationship and chain of command, clear-cut division of work based on competence and functional specialization.

Bureaucracy Theory of Max Weber is most common in a large organization and government institutions. It is applicable in the organization where more numbers of employeesare hired to perform their activities to meet common goals. They need to perform activities remaining within certain rules, regulations, and system. There should be a clear division of work, authority and responsibility. All the employees should be responsible to their immediate superiors.

Principles or Characteristics of Bureaucratic Management Theory:

Max Weber has introduced the principle of bureaucracy which is taken as a most efficient management principle. This principle stresses upon a hierarchy of well-defined line of authority from the top level to subordinate level. the following are the principles or characteristics of bureaucracy theory of management:

1. Formal Rules and Procedures:

In every organization, there must be the system and procedure for the completion of defined work. All the members have to follow these rules and procedures in every stage of their activities. No one from the top level to subordinates level can breach the rules of the organization.

2. Functional Specialization:

Work should be divided among the personnel on the basis of their functional specialization. In other words, the placement of right person to theright job is the main theme of this principle. Division of labor on the basis of skills, knowledge, efficiency, and experience is helpful to develop working efficiency of the workers. This contributes to utilize available resources in an effective manner which will ultimately help to accomplish work on time at minimum cost.

3. Well Defined Hierarchy of Authority:

It emphasizes scalar chain of authority from the top level to subordinate level. The well-defined hierarchy of authority from the highest level to subordinate level. The well-defined hierarchy of authority from the highest level to subordinate level. This well-defined hierarchy of authority from the highest level to the lowest level is essential to maintain unity in direction and in work. This principle supports for the division of labor and to develop the feeling of responsibility among the personnel and to bring uniformity in organizational performance.

4. Supervision by a Higher Authority:

Depending upon nature and size, an organization is divided into different levels of management. The higher level management delegates authority and responsibility to subordinate levels. From time to time, the higher level authority has to supervise the subordinates to know about their achievement and problems. This is essential to solving the problems on the spot and complete the work indefinite time.

5. Technical competence for Employment and Promotion:

This is one of the important features of bureaucracy theory. the recruitment,- selection, appointment and placement of employees are considered on the basis of their technical competence. Similarly, efficiency, knowledge, skill and experience are taken into consideration for promotion of employees. This is essential to minimize wastage of resources and maintain close relation among all the workers of the organization. The arbitrary dismissal of employees must be avoided.

6. All Decision should be Recorded:

Management takes various types of decision in different situations. Different acts are passed and actions are taken at various times. Those acts, actions and decisions should be recorded in a separate book for future reference. It is helpful in future for taking valuable decisions.

7. Interpersonal Relation:

In an organization, the interpersonal relation among employees should be maintained on the basis of rules and regulation. The personal relation is not taken into account. Interpersonal relations are based on positions and not on personalities.

Advantages or Contributions of Bureaucratic Management:

The following are the contributions bureaucratic management:

1. Focus on Chain of Command:

There should be a hierarchy of authority involving superior-subordinate relationship and chain of command. Every subordinate should responsible only to his immediate superior. This facilitates to fix responsibility.

2. Proper Division of Work:

This theory involves proper division of work on the basis of nature. After division, each work should be entrusted to be employees based on their competency and functional specialization. It helps to improve the productivity of the organization.

3. Specific Procedures:

There should be a system of rules, regulations, and procedures. All the members should consider the specified rules and regulations of the organization. Besides, they need to follow specific procedures for completion of work.

4. Relationship based on Position:

A rule of law leads to impersonality in interpersonal relations. Bureaucratic theory emphasizes interpersonal relations in the organization are based on positions and not on personalities. It helps to fix authority and responsibility.

5. Focus on Technical Competency:

Work should be divided to the employees on the basis of functional specialization. Incentives and promotion of employees are based on technical competence.

6. Job Security:

It emphasizes on the job security of employees in the organization. The practice of any time termination from job to employees must be avoided. It helps to develop dedication toward job loyalty toward organization among the employees.

Limitations of Bureaucratic Management Theory:

The following are the limitations of bureaucratic theory:

1. Rigid Rule and Regulation:

This theory emphasizes on specified rules, regulations and procedures for completing any work. It becomes more difficult to modify rules and regulations according to changing environment of the society. This may be the reason of business failure.

2. Ignores Innovation:

Creativity and innovation are essential for adaptation according to changing environment of business. Top level management involves only in the formulation and implementation of rules and regulation. They cannot give more on innovative work.

3. Lack of Effective Communication:

The proper channel of communication should be followed for transforming information within and outside the organization. It needs more time and procedures for communicating information due to which prompt communication is not possible.

4. Problem of Role Conflict:

In some situation, role conflict may arise among employees due to outdated or unclear rules and regulation. Such misunderstanding among employees generates obstruction in fixation of responsibility and smoothness in performance.

5. Ignores Informal Relationship:

It does not take into account the informal relationship between individuals working in the organization. Relationship among employees is maintained on the basis of designated authority. The lack of informal relationship among member, sometimes creates difficulties to solve complicated problems.

Reference

(Poudyal, S.R., Pradhan, G.M. and Bhandari, K.P. (2011). Principles of Management. Kathmandu: Asmita Books publishers and Distributors Pvt. Ltd.)