Classical Management: Scientific Management

Classical Management

• Scientific Management
  • Founded by Frederick Taylor
  • Aims to develop a "science" for each job
  • Four principles:
    • Develop a science for each job
    • Hire workers with the right abilities
    • Train and motivate workers
    • Divide work equally between managers and workers
  • Techniques:
    • Time and motion study
    • Differential piece-rate payment system
  • Criticisms:
    • Workers were seen as incapable of understanding their work
    • Workers were only motivated by money
    • Increased monotony of work
    • Dehumanizing
• Functional Management
  • Taylor's view on organizational structure
  • "Unity of command principle" - military bureaucratic model
  • Eight functional foremen:
    • Route Clerk
    • Instruction Card Clerk
    • Time and Cost Clerk
    • Shop Disciplinarian
    • Gang Boss
    • Speed Boss
    • Repair Boss
    • Inspector
• Henry Ford's Mass Production Methods
  • Aims to achieve economies of scale
  • Produced over 15 million Model T cars
  • Innovations:
    • Assembly line
    • Vertical integration of production
  • Social benefits:
    • High wages for workers
    • 8-hour work day and 5-day work week
    • Kindergarten for workers' children

Administrative Theories

• Henri Fayol
  • Five duties of managers:
    • Foresight and planning
    • Organizing
    • Commanding
    • Coordinating
    • Controlling
  • Six main groups of activities:
    • Technical
    • Commercial
    • Financial
    • Security
    • Accounting
    • Managerial
  • Principles of management:
    • Scalar chain
    • Unity of command
    • Unity of direction
    • Authority
    • Discipline

Bureaucratic Organization

• Max Weber
  • Defined bureaucracy in the late 19th century
  • Focused on definitions of authority, responsibility, and process
  • Ideal bureaucracy:
    • Clear division of labor
    • Clear hierarchy of authority
    • Formal rules and procedures
    • Impersonality
    • Careers based on merit
  • Negative connotations:
    • Excessive paperwork
    • Slowness in handling problems
    • Resistance to change
    • Employee apathy

Weaknesses of Classical Management Theories

• Reliance on experience in large manufacturing firms
• Untested assumptions
• Failure to consider informal organizations and informal leaders
• Static conditions and focus on internal environment factors only

Behavioral Approach

• Human Relations Movement
  • An effort to make managers more sensitive to employees' needs
  • Historical preconditions:
    • Threat of unionization
    • Philosophy of industrial humanism
    • Hawthorne studies
  • Assumptions:
    • People are social and self-actualizing
  • Key figures:
    • Elton Mayo
    • Douglas McGregor
  • Key concepts:
    • Hawthorne effect
    • Theory X and theory Y
    • Informal groups and social needs

Weaknesses of the Behavioral Management School

• Too much importance to employees and social needs
• Employee-oriented approach to a limited extent
• Workers satisfaction is one but not the only factor which raises industrial productivity
• Limited importance to economic incentives

Theory Z

• William Ouchi's Theory Z
  • Japanese management approach
  • Focus on strong company philosophy, corporate culture, long-range staff development, and consensus decision-making
  • Characteristics:
    • Long-term employment and job security
    • Consensual decision making
    • Slow evaluation and promotion
    • Informal control with formalized measures
    • Moderately specialized career path
    • Holistic concern for employees

Systems Approach

• Organizations as open systems
  • Interacting with the environment
  • Receiving external inputs and transforming them into outputs
  • Features:
    • Open or closed systems
    • Interdependent parts
    • Consideration of whole system
    • Defined boundaries
    • Synergy
    • Feedback mechanism

Contingency Approach

• Extension of systems approach
• No longer "one best way" to manage
• Contingency thinking - match managerial responses with opportunities unique to different situations
• **Features:
  • Management is entirely situational
  • Managers should match their approach as per the requirements of the situation
  • Policies and practices should be suitable to environmental changes
  • Success of management depends on its ability to cope with its environment