Introduction:
The schools of management thought are theoretical frameworks for the study of management. Each of the schools of management thought are based on different assumptions about human beings and the organizations for which they work .
Since the formal study of management began late in the 19th century, the study of management has progressed through several stages as scholars and practitioners working in different eras focused on what they believed to be important aspects of good management practice. Over time, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and disseminated. These attempts at classification have resulted in the identification of management schools.
Koontz was the first academician to have attempted to classify the various approaches into the schools of management theory . His work was advanced by experts such as John F . Mee , Joseph A . Litterer and others .
Based on the writings of all the scholars MANAGEMENT THOUGHT is classified into 6 "SCHOOLS OF MANAGEMENT THEORY ."
1. The classical school
2. The Human Relations School
3. The Decision Theory School
4. The Management Science School
5. The Systems Theory School
6. The Contingency Theory School
1. The Classical School:
The twentieth century witnessed tremendous management theory ferment and activity. Efforts were taking place for the development of a comprehensive management theory.
Traditional or classical management school of theory is a result of such efforts. Henri Fayol (1841-1925) is widely acclaimed as the founder of the Classical management school.
Classical Management Theory concentrates on efficiency and has three distinct branches :
A. Scientific Management,
B. Bureaucratic Management, and
C. Management process school / Administrative management .
It envisages a pyramid hierarchical structure, autocratic management, clear chain of command and short spans of control.
A. Scientific Management
Developed by: Frederick Winslow Taylor (1856-1915) known as the "father of scientific management".
Taylor began work at the age of 18 as a machinist apprentice to a pattern-maker. He later joined the Midvale Steel Company as a laborer and became chief engineer in eight years. During his period at the steel mill Taylor performed comprehensive experiments on worker productivity and tested what he called the "task system," later developed into the Taylor System and eventually progressed into scientific management.
B. Bureaucratic Management
Max Weber (1864-1920)propounded the bureaucratic theory of organistaion and management , which has influenced the modern thinking of these areas.
Bureaucracy refers to " certain characteristics of organiational design . "
Weber viewed bureaucracy as " the most efficient form that could be used most effectively for complex organisations - business , government , military , for example - arising out of the needs of modern society ."
Characteristics of Bureaucracy:
i. A well defined hierarchy :All positions within a bureaucracy are structured in a way permitting the higher positions to supervise and control the lower positions.
ii. Division of labor and specialization is done.
iii. All organizational activities are streamlined in a way that standard operating procedures are developed to provide certainty and facilitate coordination.
iv. Impersonal relationships between managers and employees so that the managers will be free to take rational decisions rather than one influenced by favoritism and personal prejudice.
v. Competence is the basis for all decisions made in hiring, job assignments, and promotions. This would encourage ability and merit as the most important characteristics of a bureaucratic organization.
vi. Records: Weber felt it is absolutely essential for a bureaucracy to maintain complete files regarding all its activities. This necessitates an accurate organizational "memory" where accurate and complete documents will be available concerning all bureaucratic actions and decisions.
Advantages of Bureaucracy
Precision , Speed , Unambiguity , knowledge of the files , continuity , discretion , unity , strict subordination , reduction of friction and of material costs are raised to optimum point.
Disadvantages of Bureaucracy
Red tape , Rigidity and neglect of human factor.
Advantages of Classical Theories
i. The classical management structure is a clear organizational hierarchy with three distinct management levels. Each management group has its own objectives and responsibilities.
ii. Division of labor: Projects are broken down into smaller tasks that are easy to complete. Employees' responsibilities and expectations are clearly defined.
iii. The autocratic leadership approach is the central part and advantage of classical management theory. It states that an organization should have a single leader to make decisions, to organize and direct the employees.
Limitations of Classical Theories
i. They view organization as a machine subject to certain immutable laws.
ii. They assume that employees can be motivated by financial incentives alone , and ignore their social and psychological needs .
iii. They are based on the assumption that productivity is the only criterion of efficiency .
iv. The overall approach is mechanistic .
C. Management Process School/Administrative Management
Developed By: HENRI FAYOL and other scholars who contributed to it: Mooney and Reiley , Urwick and Gullik.
Fayol contributed 5 functions of management : Planning , Organising , Commanding , Coordination and Control.
He also developed 14 principles of management .
2. The Human Relation School
Developed by: Famous Hawthorne studies formed the basis of the human relations school, and are described by Roethlisberger and Dickson (1939) and Mayo (1945) and Homans (1950).
Features:
i. It may be termed as neo-classical rather than modern because it follows the theoretical form of the classical theory and emphasises the human dimension of management as a counter point against the impersonality of classical theory.
ii. It is a behavioral approach to management.
iii. Employee behavior depends primarily on the social and organisational circumstances of work .
iv. Leadership style, group cohesion and job satisfaction are major determinants of the outputs of the working group.
Employees work better if they are given a wide range of tasks to complete.
v. Standards set internally by a working group influence employee attitudes and perspectives more than standards set by management.
vii. Informal Group Processes :The Hawthorne studies led to more study on the importance of informal group processes in organizations. Social psychologists like Maier (1952) and Katz (1951) and sociologists like Homans (1950) and Whyte (1959) were influential .
The Usefulness of the Human Relations Approach
The school explicitly recognized the role of interpersonal relations in determining workplace behaviour, and it demonstrated that factors other than pay can motivate workers.
Criticism of Human Relations
i. The approach possibly overestimates the commitment, motivation and desire to participate in decision making of many employees.
ii. Its protagonists worked within the ground rules laid down by the classical theory . They primarily tried to fit in the realities of human behaviour as they saw them.
3. The Decision Theory School:
Developed by: Simon
Features:
i. Management is essentially decision-making process.
ii. Members of the organization are decision-makers and problems solvers.
iii. Organization can be treated as a combination of various decision centres. The level and importance of organization members are determined on the basis of importance of decisions, which they make.
iv. Quality of decision affects the organization effectiveness.
Uses:
i. It demonstrates how managers can discharge their functions effectively and for this approach it provides various tools.
ii. Decision theorists have grappled with decisions pertaining to diagnosis and the resulting prescriptions for improving communication, incentives, reactions of the individuals to group and analysis of human values write stated objectives.
iii. All factors affecting decision-making are the subject matter of study of management. Besides processes and techniques in decision making factors affecting decisions are information systems, social and psychological aspects of decision-makers.
Limitations:
This approach does not take the total view of management. Decision-making is vital in every school of management. This vital aspect cannot be denied but management is more than mere decision-making.
4. The Management Science School
It is also known as Mathematical or Quantitative Measurement Approach .
Features:
i. Management is regarded as "a system of mathematical models and processes" and problem-solving mechanism with the help of mathematical tools and techniques.
ii. Management problems can be described in terms of mathematical symbols and data. Thus every managerial activity can be quantified.
iii. This approach covers decision-making, systems analysis and some aspects of human behaviour.
iv. Operations research, mathematical tools, simulation, models etc. are the basic methodologies to solve managerial problems.
Uses:
i. It has contributed significantly in developing orderly thinking in management which has provided exactness in management discipline.
ii. Various Mathematical tools like sampling, linear programming, games theory, time series analysis, simulation, waiting line theory etc. have provided more exactness in solving managerial problems.
iii. This approach is a fast developing area in analysing and understanding management.
Limitations:
i. It is very difficult to call a separate school of management because it does not provide the answer for total managerial problems.
ii. Managerial activities are not really capable of being quantified because of involvement of human beings who are governed by many irrational factors also.
iii. More expertise and technical skills are required to formulate mathematical models .
5. The System Theory School
Developed by: Ludwig Von Bertalanffy , Lawrence J. Henderson , W.G Scott , Daniel Katz , Robert L. Kahn , W . Buckley and J. D Thompson.
System is defined as “An organized or complex whole; an assemblage or combination of things or parts forming a complex unitary whole."
This theory viewed organisation asan organic and open system , which is composed of interacting and interdependent parts ,called subsytems.
Features:
A. Organisation as an Open and Organic System
• Open System:
Organisations are open as they are in continuous interactional relationship with other systems .Businesses depend on employees, suppliers, customers and even the competition for research, development and profit.
Because the business doesn’t have control of all the environmental forces, it relies on predictions and contingencies to cope with unexpected input.
For example, an influenza epidemic can affect suppliers, personnel and even customers, causing lost production and lost profit.
• Organic System:
Organisation are also organic or living systems as they must satisfy 3 conditions:
i. Stable: Organisation should be stable in the sense that its various parts should be in balance with one another .
ii. Growth: Grow and mature like other living entities .
iii. Adapt to Environmental Changes: Organic organizations are designed to effectively deal with a rapidly changing environment because they have attributes that make them able to address unforeseen problems, issues and requirements.
B. Parts of System:
As a system ,organisation is composed of number of subsytems:
i. Production Subsystem: Process of conversion of inputs to final products .
ii. Supportive: Performs function of acquiring various inputs from the environment and marketing the final products in form of goods and services .
iii. Maintenance: Concerned with hiring , socilising , rewarding and punishing the employees .
iv. Adaptive: Crucial function of relating the organistaion with its environment .
v. Managerial: Performs planning , organising , directing , coordinating and controlling functions .
vi. Individual as Group
vii. Informal Group as Subsystem
C. Intra-Subsystem Interaction:
Each of the subsystems or parts of the organisation is in itself a system made up of its unique subsytems or parts .
Example: Managerial subsystem is composed of managers , objectives , policies , rules etc.
D. Inter-Subsystem Interaction:
All the parts of an organisation are also in an interactional and interdependent relationship with each other .
Example: Production subsytem interacts with , and is dependent on supportive subsystem for procurement of materials , sale of its products and institutional relations .
E. Interaction with Super System:
Organisations interact with its environment composed of numerous systems like society , cultural and social norms .
F. Linkages:
The various parts of an organisation are linked with one another through its communication network , decisions , authority - responsibility etc .
G. System Goals:
Every organisation has numerous goals : Profit , survival , growth etc .
Limitations:
It is considered as an Abstract Approach and Lack of Universality in it.
6. The Contingency Theory School
It is the most recent development in the field of management.This attempts to integrate all the management approaches developed in 1970's .
It builds on major premises of the systems theory that organizations are organic and open systems , and there is a relationship of interdependence between an organisation and its environment , as well as within and between its various subsytems .
Features:
i. Management action is contingent on certain action outside the system or subsystem as the case may be.
ii. Organizational action should be based on the behaviour of action outside the system so that organization should be integrated with the environment .
iii. Because of the specific organization – environment relationship, no action can be universal.
iv. The contingency approach rejects the universality of management thesis. It emphasises that there is no one best way to design organisations and manage them .
v. Management is situational .
Limitations
• Inadequate literature.
• Complex
• Difficult empirical testing
• Reactive not Proactive.