Answer Writing on Evolution of Management Thought
Q.1) Explain Administrative Theory in detail.
Answer:
One of the first and foremost contributors in administrative management theory was Henri Fayol, a French industrialist. Fayol suggested fourteen principles of management which he found most frequently to apply in his work. Fayol gave functions of management and propounded the principles of sound organization and management. The school of thought is also known as the “universalist” school because it believed that management principles apply to all kinds of activities. He laid down 14 principles of management, which according to him have universal applicability.
Fayol viewed management as a teachable theory dealing with planning, organizing, commanding, coordinating, and controlling. He argued that managerial ability can be acquired just like any other teaching ability. He not only recommended formal teaching in management but also practiced it by founding the “Center for Administrative Studies” in Paris. Fayol has been called the “father of general management”.
Fourteen Principles of Management
1. Division of Work: According to this principle, work should be divided into small tasks/jobs, each performed by a specialist or trained employee. Division of work leads to specialization, resulting in efficient and effective output.
2. Authority and Responsibility: Authority is the right to get things done, and responsibility is answerability for a certain job. According to Fayol, there needs to be a balance between authority and responsibility. More authority than responsibility would create dictatorial tendencies, while more responsibility than authority would demotivate workers.
3. Discipline: Discipline is the obedience to organizational rules and employment agreements, necessary for an organization’s smooth functioning. Good superiors, clear agreements, and fair penalties ensure discipline.
4. Unity of Command: According to Fayol, there should be one and only one boss for every employee. Dual subordination should be avoided. If an employee gets orders from two or more superiors simultaneously, the principle is violated.
5. Unity of Direction: All units of an organization should move towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan.
6. Subordination of Individual Interest to General Interest: The organization’s interests should take priority over individual interests. In case of a conflict, the organization’s interest must prevail.
7. Remuneration of Personnel: The amount of remuneration and payment methods should be just and fair, providing maximum satisfaction to both employees and employers.
8. Centralization and Decentralization: Fayol suggested a balance between decentralization (delegation of authority to subordinates) and centralization (final decision-making authority at the top level). The degree of decentralization varies across organizations.
9. Scalar Chain: An organization consists of superiors and subordinates. The formal lines of authority from the highest to lowest ranks are known as the “Scalar Chain”. Fayol suggested that organizations should follow this chain for effective communication and authority flow.
10. Order: The principle of order states: "A place for everything and everything in its place." People and materials must be in suitable places at appropriate times for maximum efficiency.
11. Equity: This principle emphasizes kindness and justice in managerial behavior. There should be no discrimination based on sex, religion, language, belief, nationality, or caste. Fair treatment ensures loyalty and devotion.
12. Stability of Personnel: Employees, once selected, should be retained for a minimum fixed tenure to allow them to settle in and contribute effectively.
13. Initiative: Initiative means taking action without being asked. Fayol suggested that subordinates should be encouraged to plan and execute ideas within their authority.
14. Espirit de Corps: ‘Espirit de corps’ means ‘unity is strength’. Management should promote team spirit, unity, and harmony among employees. A manager should replace ‘I’ with ‘We’ when speaking to workers to foster a sense of belongingness.
Fayol emphasized that these principles are flexible and should be adapted as per the situation. His theory of management revolutionized organizational thinking and remains highly relevant today.
Q.2) Discuss in detail, the facts uncovered by the Hawthorne experiment and the points based on which it was criticized.
Answer:
George Elton Mayo is considered the father of the neo-classical approach. He led the team that conducted the famous Hawthorne Experiments at Western Electric Company (1924-1932) near Chicago, USA.
Hawthorne Experiments
1. Illumination Experiment:
Objective: To assess the effect of lighting conditions on employee productivity.
Two groups were selected:
One worked under constant lighting.
The other had changing lighting levels.
Surprising finding: Productivity increased in both groups, suggesting that psychological and social factors influence productivity more than physical conditions.
2. Relay Assembly Test Room Studies:
Conducted on six female workers, with changes in working conditions:
Shorter hours, rest breaks, hot lunches, friendly supervisors, and free interaction.
Productivity increased even when these changes were withdrawn.
Conclusion: Social and psychological factors like attention, recognition, and teamwork play a major role in productivity.
3. Mass Interview Programme:
Interviews with workers revealed that the opportunity to speak freely about their concerns boosted morale and productivity.
4. Bank Wiring Observation Room Study:
A group of 14 workers was observed to analyze group behavior.
Finding: Informal groups set their own work norms, sometimes limiting productivity intentionally to match group expectations.
Key Findings of Hawthorne Experiments
1. Social Factors Influence Output: Organizations are social systems, not just formal structures. Informal groups, emotions, and human relations affect productivity.
2. Group Influence: Workers form informal groups that determine behavior and productivity.
3. Conflict Between Formal & Informal Groups: Sometimes, informal groups conflict with organizational goals, creating resistance to change.
4. Leadership Matters: Informal leaders influence group behavior, sometimes more than formal supervisors.
5. Supervisory Climate: Friendly supervision and concern for employees boost productivity.
6. Importance of Communication: Open communication between management and workers builds trust and increases efficiency.
Criticism of Hawthorne Studies
1. Pro-Management Bias: The study assumed management is always logical and workers are emotional.
2. Unscientific Methods: Sample size was small, and the experiments lacked scientific rigor.
3. Lack of Validity: The findings were based on American workers and may not apply universally.
4. Ignored Trade Unions: The role of trade unions and worker collectives was overlooked.
5. Obvious Findings: Many of Mayo’s findings were already known before the experiments.
Despite criticism, Hawthorne Studies marked a turning point in management, shifting focus from mechanical efficiency to human relations and motivation.
Q.3) Explain the Contingency Approach to Management. How is it different from the System Approach?
Answer:
The contingency approach is a relatively new approach to organization and management. It is related to the systems approach. The belief that organizations are open systems widened the perspective further, leading to the development of the contingency approach. It is also known as the situational approach.
This approach was developed by managers, consultants, and researchers who tried to apply the concepts of earlier management theories to real-life situations. They found that the concepts and techniques effective in one situation failed to work in another situation.
The contingency approach is based on the belief that there is no single best way to manage an organization. The application of management principles depends on the environment.
Definition:
In the words of Kast and Rosenzweig,
"The contingency view seeks to understand the inter-relationships within and among sub-systems as well as between the organization and its environment and to define patterns of relationships of variables."
The basic theme of this approach is that there is no universal way of managing that applies to all situations. The best solution depends on the specific conditions and environment. Since each situation is unique, management practices should be adapted accordingly.
Main Features of the Contingency Approach:
1. Management is Situational:
The effectiveness of any technique depends on the specific situation.
The conditions and complexity of a situation determine which management technique should be applied.
2. Adaptive Approach:
Management policies, leadership styles, control systems, and organizational structures should be designed according to the situation.
3. Environmental Awareness:
Since management success depends on environmental changes, managers should analyze and adapt accordingly.
4. No Universal Principles:
There is no single best way to manage.
Managers should not blindly follow traditional management techniques but rather choose the best-suited method for a particular situation.
Advantages of the Contingency Approach:
Helps managers adapt to changing business environments.
Encourages flexibility and practical decision-making.
Useful in strategy formulation, organizational design, and decision-making.
Criticism of the Contingency Approach:
1. Creates Confusion:
The approach suggests that "it all depends on the situation," which makes it difficult for managers to choose a clear strategy.
2. Overwhelming for Managers:
Managers are swamped with too many ideas, making it humanly impossible to comprehend every situation.
3. Lacks a Fixed Structure:
Unlike classical management principles, it does not provide clear guidelines for decision-making.
4. Not Entirely New:
Even classical theorists like Fayol suggested that management principles should be applied according to changing conditions.
Despite its complexity and criticisms, the contingency approach remains one of the most practical and widely used management approaches today.
Comparison Between the System Approach and the Contingency Approach
System Approach:
Emphasizes the interdependencies and interaction among subsystems.
Focuses primarily on the internal environment of the organization.
Treats all organizations similarly, without considering differences in size, culture, or external environment.
Provides a theoretical model for understanding organizations and subsystems.
Suggests deterministic solutions to management problems.
Does not question the validity of classical management principles.
Contingency Approach:
Identifies the nature of interdependencies and the impact of the external environment on organizational design and management styles.
Focuses primarily on the external environment and how it affects the organization.
Treats each organization and each situation as unique.
Takes a practical, action-oriented approach to solving organizational problems.
Suggests a probable and flexible approach rather than fixed solutions.
Rejects the blind application of classical management principles.
Attempts to identify the nature of interactions and their effect on decision-making.
Conclusion:
Despite their differences, the contingency approach evolved from the system approach, and both are interrelated.
Q.4) Distinguish between the Classical and Neo-Classical Theory of Management.
Answer:
Classical Theory and Neo-Classical Theory are two significant theories in the field of management.
The Classical Theory emerged in the 19th and early 20th century, during the rise of large-scale manufacturing. At the time, management focused on enhancing productivity and operational efficiency. This strategy was based on a reward system, motivating workers to increase output in exchange for incentives.
However, the Classical Theory only considered the physical and economic needs of employees. The classical theorists focused on organizational structure as the key to achieving business goals. This theory was developed based on:
Bureaucracy (Max Weber)
Administrative Theory (Henri Fayol)
Scientific Management (F.W. Taylor)
These components helped define an organization as a structure of relationships, power, roles, activities, and communication systems.
Neo-Classical Theory:
The Neo-Classical Theory is a modification of the Classical Theory.
This theory pays more attention to employees’ needs and expectations.
It considers not only physical and economic needs but also social needs like job satisfaction and career growth.
Human Relations Approach plays a key role in this theory.
The Neo-Classical writers emphasized the importance of human relations in an organization. Their ideas were based on the famous Hawthorne Studies conducted at General Electric’s Hawthorne Plant, USA. This is why they are also called “human relationists.”
These studies revealed that social and psychological factors influence worker productivity and satisfaction.
The Neo-Classical Theory also introduced the concept of:
Interpersonal Relations
Effective Communication
Informal Workgroups
It redefined the workplace by focusing on the human side of management rather than just structure and efficiency.
Key Differences Between Classical and Neo-Classical Theories:
1. Employee Needs:
Classical Theory considers only physical and economic needs.
Neo-Classical Theory considers social, psychological, and career growth needs along with physical and economic factors.
2. Organizational Structure:
Classical Theory follows a hierarchical structure with multiple management layers.
Neo-Classical Theory supports a flat organizational structure, encouraging teamwork and participation.
3. Decision-Making:
Classical Theory emphasizes centralized decision-making, where one person (often the owner) makes all decisions.
Neo-Classical Theory promotes decentralized decision-making, involving teams and collaboration.
4. Workplace Motivation:
Classical Theory motivates employees through financial rewards (incentives, wages, promotions, etc.).
Neo-Classical Theory recognizes psychological and emotional motivation such as recognition, job satisfaction, and participation.
5. Focus Area:
Classical Theory focuses on organizational structure, authority, and productivity.
Neo-Classical Theory focuses on human relations, teamwork, and social interactions at the workplace.
Conclusion:
A successful manager should consider both theories while running an organization.
Classical Theory is useful for structuring the organization and setting clear authority.
Neo-Classical Theory helps in managing employees, ensuring motivation, and building effective teams.
Modern management combines elements of both theories to create a balanced and effective organizational strategy.
Q.5) Explain the following principles of Scientific Management:
a) Science, Not Rule of Thumb
b) Co-operation, Not Individualism
Answer:
a) Science, Not Rule of Thumb:
‘Rule of Thumb’ refers to traditional methods used by managers based on personal experience rather than systematic study. These methods are often untested and unscientific, leading to uncertain results.
Taylor argued that management should replace outdated trial-and-error methods with scientifically tested techniques. This principle states that:
1. Scientific analysis must replace random decisions.
2. Trial-and-error approaches should be eliminated.
3. Every activity should be studied, measured, and optimized.
Taylor believed that one best way to maximize efficiency could be developed through work-study and analysis. The method so developed should replace the rule of thumb across the entire organization.
The scientific method involves:
Investigating traditional methods.
Selecting the best alternative through observation and study.
Standardizing best practices across the organization.
Benefits:
Saves time, resources, and materials.
Increases efficiency and productivity.
Reduces wastage and inefficiencies.
Thus, to improve organizational efficiency, scientific analysis should replace the rule-of-thumb approach.
b) Co-operation, Not Individualism:
This principle extends the idea of ‘Harmony, Not Discord’, emphasizing mutual cooperation between workers and management rather than internal competition.
Taylor suggested:
1. Management and workers should work together towards common goals.
2. Trust, goodwill, and mutual respect should be maintained.
3. Workers should be consulted when setting goals and standards.
Taylor believed that:
When workers feel involved in decision-making, they are more willing to cooperate.
Management should not impose decisions unilaterally but rather work alongside employees.
Key Aspects of This Principle:
Management should listen to employee suggestions and reward valuable inputs.
Employees should avoid unreasonable demands and maintain discipline.
There should be an equal division of work and responsibility between employees and management.
Open communication should reduce the need for trade unions.
Thus, Taylor emphasized that success in management comes from teamwork, cooperation, and mutual trust.
Principles of Taylor and Fayol are Mutually Complementary
Statement:
"One believed that management should not close its ears to constructive suggestions made by employees, while the other suggested that a good company should have an employee suggestion system, where suggestions that result in substantial time or cost reduction should be rewarded."
1. Taylor’s Principle – Co-operation, Not Individualism
Taylor believed management should actively listen to employees.
He argued that workers should be involved in decision-making.
Suggestions from workers should be considered and rewarded.
This principle encourages teamwork and collaboration rather than internal competition.
2. Fayol’s Principle – Initiative
Fayol emphasized that employees should be encouraged to take initiative.
Employees should be allowed to express new ideas freely.
Management should develop a system to collect and reward employee suggestions.
Conclusion:
Taylor focused on cooperation and mutual trust.
Fayol emphasized employee participation and creativity.
Both principles complement each other in improving organizational efficiency and worker satisfaction.
Q.6) Sigma Ltd. Case Study on Management Principles
Case:
Sigma Ltd. is a large company manufacturing electric motors. The company has several departments – Production, Marketing, Finance, and HR.
The CEO, Mr. Shashank, set a sales target of ₹10 crores per month.
The Marketing Manager, Mr. Ishaan, wanted to offer a 10% discount to customers to boost sales.
The Finance Manager, Mr. Mohak, opposed the discount, fearing revenue loss.
The Sales Manager, Mr. Anshik, faced dual subordination and could not achieve the sales target.
Questions and Answers:
1. Which concept of management is lacking in Sigma Ltd.?
Answer: Coordination.
Coordination is the orderly arrangement of group efforts to ensure unity of action in pursuing a common goal.
According to Mooney and Railey:
"Coordination is the orderly arrangement of group efforts to provide unity of action in pursuit of a common purpose."
Characteristics of Coordination:
Ensures harmony between departments.
Requires continuous effort from management.
Essential at all levels of management.
Blends the efforts of different individuals and departments to achieve organizational goals.
2. Which principle of management has been overlooked by the company?
Answer: Unity of Command.
According to Fayol,
"There should be one and only one boss for every individual employee."
Impact of Violating Unity of Command:
Authority is undermined.
Discipline is weakened.
Order is disturbed.
Stability is threatened.
In Sigma Ltd., the Sales Manager received conflicting instructions from both the Marketing and Finance Managers, leading to confusion and failure to achieve targets.
3. Which principle of Fayol should Sigma Ltd. follow?
Answer:
Espirit de Corps.
Espirit de Corps means “Unity is Strength.”
According to Fayol:
Management should promote team spirit, unity, and harmony among employees.
A manager should replace ‘I’ with ‘We’ when communicating with workers.
Encouraging teamwork builds mutual trust and cooperation.
Organizations that lack teamwork struggle with coordination and efficiency.
Conclusion:
For Sigma Ltd. to succeed, it must:
Ensure proper coordination between departments.
Follow the principle of Unity of Command to avoid confusion.
Promote teamwork through Espirit de Corps.
By implementing these principles, Sigma Ltd. can achieve its sales target effectively.
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