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Management theories

Management in one or other form has existed in every hook and corner of the world service the down of civilization. Although the 20th century is marked in history as an ‘Era of scientific management’, yet it does not mean that management was totally absent in yester years.

1700 to 1800 highlights the industrial revolution and the factory system highlights the industrial revolution and the factory system highlighted the importance of direction as a managerial function. Several economists during this period explained the concept of management. For example, Adam Smith explained the concept of division of labour, Jacques Turgot explained the importance of direction and control, and Baptiste explained the importance of planning.

But management is emerged as a separate discipline in the second half of 19th century with the introduction of Joint Stock Company. This form of enterprises separated management of business from their ownership and gave rise to labor inefficiency and inadequate systems of wage payments. In search of solution to this problem, people began to recognize management as a separate field of study. During 20th century, Management has become more scientific discipline with standard principles and practices. The evaluation of management thought during this period can be classified into two parts namely

(1) Early management approaches represented by Taylor’s scientific management, Foyal’s administrative management and human relations movement.

(2) Modern management approaches, represented by behavioural approach, quantitative/management science approach, systems approach and contingency approach.

In this Unit we focus our attention on modern Management approaches.

Modern Management Approaches

Behavioural Approach

This is an improved and more matured version of human relations approach. The various contributors of this approach are Douglas Mc Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert etc. Behavioural Scientists regard the classical approach as highly mechanistic, which finds to degrade the human spirit. They prefer more flexible organization structures and jobs built around the capabilities and aptitudes of average employees.

The behavioral approach has laid down the following conclusions.

(1) Decision-making is done in a sub-optimal manner, because of practical and situational constraints on human rationality of decision-making. The behaviorists attach great weight age on participative and group decision-making.

(2) Behavioral Scientists encourage self direction and control instead of imposed control.

(3) Behavioral Scientists consider the organization as a group of individuals with certain goals.

(4) In view of behavioural scientists the democratic-participative styles of leadership are desirable, the autocratic, task oriented styles may also be appropriate in certain situation.

(5) They suggest that different people react differently to the same situation. No two people are exactly alike and manager should tailor his attempts to influence his people according to their needs.

(6) They recognize that organizational conflict and change are inevitable.

Quantitative Approach

Quantitative approach (also known as management approach) started during Second World War during which each participant country of the war was trying to seek solutions to a number of new and complex military problems. The interdisciplinary teams who were engaged for this purpose were known as operation research teams. These operation research teams developed quantitative basis for making military decisions. These quantitative tools later are used to make business, industry and enterprise decisions.

The focus of quantitative approach is on decision making, and to provide tools and techniques for making objectively rational decisions. Objective rationality means an ability and willingness to follow reasonable, unemotional and scientific approach in relating means with ends and in visualizing the totality of the decision environment. This approach facilitates disciplined thinking while defining management problems and establishing relationships among the variables involved. This approach is widely used in planning and control activities where problems can be defined in quantitative terms.

Systems Approach

A system is a set of interdependent parts which form a unit as a whole that performs some function. An organization is also a system composed of four independent parts namely, task, structure, people and technology. The central to the system approach is ‘holism’ which means that each part of the system bears relation of interdependence with other parts and hence no part of the system can be accurately analyzed and understood apart from the whole system. A system can be open or closed system. In open system, a system interacts with surrounding. An organization is open system because it interacts with it.

Contingency Approach

According to this approach, management principles and concepts have no general and universal application under all conditions. There is no best way of doing things under all conditions. Methods and techniques which are highly effective in one situation may not give the same results in another situation. This approach suggests that the task of managers is to identify which technique in a situation best contribute to the attainment of goals. Managers therefore have to develop a sort of situational sensitivity and practical selectivity. Contingency views are applicable in designing organizational structure, in deciding degree of decentralization, in motivation and leadership approach, in establishing communication and control systems, in managing conflicts and in employee development and training.