Every organization follows some or the other management principles in order to manage their resources so as to achieve maximum efficiency and productivity. But how these management principles come in to effect and most importantly on what basis these principles are designed to guide these organizations.
Dr. Mandi has explained the evolution of these management policies in more of a practical aspects which makes these theories easy to comprehend. So taking Dr. Mandi's explanation into words lets see and try to understand what these management principles or theories are, how they get evoluted over the course of time and how they effect an organization's overall management.
What do we mean by Management Theories?
Management theories are the set of general rules that guide the managers to manage an organization. Theories are an explanation to assist employees to effectively relate to the business goals and implement effective means to achieve the same.
How did current management theories developed?
People have been managing work for hundreds of years, and we can trace formal management ideas to the 1700s. But the most significant developments in management theory emerged in the 20th century. We owe much of our understanding of managerial practices to the many theorists of this period, who tried to understand how best to conduct business.
The evolution of modern management began in the closing decades of the nineteenth
century, after the industrial revolution had swept through Europe, Canada,
and the United States. In the new economic climate, managers of all types of organizations—political, educational, and economic—were increasingly trying to
find better ways to satisfy customers’ needs.
Owners and managers of the new factories found themselves unprepared for
the challenges accompanying the change from small-scale crafts production to
large-scale mechanized manufacturing. This leads to the introduction of various management theories so as to search for new techniques to manage their organizations’
resources and to focus on ways to increase the efficiency.
There are four general management theories.
1. Frederick Taylor – Theory of Scientific Management.
2. Henri Fayol – Administrative Management Theory.
3. Max Weber - Bureaucratic Theory of Management.
4. Elton Mayo – Behavioral Theory of Management (Hawthorne Effect).
Taylor’s theory of scientific management aimed at, improving economic efficiency, especially labor productivity. Taylor had a simple view about, what motivated people at work, - money. He felt that, workers should get a, fair day's pay for a fair day's work, and that pay, should be linked to the amount produced. Therefore he introduced the, DIFFERENTIAL PIECE RATE SYSTEM, of paying wages to the workers.
Taylor's Differential Piece Rate Plan:
If Efficiency is greater than the defined Standard then workers should be paid 120 % of Normal Piece Rate.
If Efficiency is less than standard then workers should be paid 80% of Normal Piece Rate.
Principles of Scientific Management.
Four Principles of Scientific Management are:
1. Time and motion study: - Study the way jobs are performed and find new ways to do them.
2. Teach, train and develop the workman with improved methods of doing work. Codify the new methods into rules.
3. Interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.
4. Establish fair levels of performance and pay a premium for higher performance.
Application of Scientific Management:
Below is the video Henry Ford and Taylor revolutionized the car manufacturing with the application of Scientific management
Taylor’s Scientific Management is not hard to recognize within the modern day workplace. The car and computer manufacturing plants, the work environments we go to everyday, the hospitals we are treated in and even some of the restaurants we might eat in, – almost all of them function more efficiently due to the application of Scientific Management. In fact, these methods of working seem so commonplace and so logical to a citizen of the modern world that it is almost impossible to accept that they were revolutionary only 100 years ago.
Henri Fayol known as the Father Of Management laid down the 14 principles of Management.-
Dr. Mandi has explained the evolution of these management policies in more of a practical aspects which makes these theories easy to comprehend. So taking Dr. Mandi's explanation into words lets see and try to understand what these management principles or theories are, how they get evoluted over the course of time and how they effect an organization's overall management.
What do we mean by Management Theories?
Management theories are the set of general rules that guide the managers to manage an organization. Theories are an explanation to assist employees to effectively relate to the business goals and implement effective means to achieve the same.
How did current management theories developed?
People have been managing work for hundreds of years, and we can trace formal management ideas to the 1700s. But the most significant developments in management theory emerged in the 20th century. We owe much of our understanding of managerial practices to the many theorists of this period, who tried to understand how best to conduct business.
Evolution Of Management Theories:
The evolution of modern management began in the closing decades of the nineteenth
century, after the industrial revolution had swept through Europe, Canada,
and the United States. In the new economic climate, managers of all types of organizations—political, educational, and economic—were increasingly trying to
find better ways to satisfy customers’ needs.
Owners and managers of the new factories found themselves unprepared for
the challenges accompanying the change from small-scale crafts production to
large-scale mechanized manufacturing. This leads to the introduction of various management theories so as to search for new techniques to manage their organizations’
resources and to focus on ways to increase the efficiency.
General Management Theories:
There are four general management theories.
1. Frederick Taylor – Theory of Scientific Management.
2. Henri Fayol – Administrative Management Theory.
3. Max Weber - Bureaucratic Theory of Management.
4. Elton Mayo – Behavioral Theory of Management (Hawthorne Effect).
1. Frederick Taylor’s Theory of Scientific Management:
The systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.
Taylor's Differential Piece Rate Plan:
If Efficiency is greater than the defined Standard then workers should be paid 120 % of Normal Piece Rate.
If Efficiency is less than standard then workers should be paid 80% of Normal Piece Rate.
Principles of Scientific Management.
Four Principles of Scientific Management are:
1. Time and motion study: - Study the way jobs are performed and find new ways to do them.
2. Teach, train and develop the workman with improved methods of doing work. Codify the new methods into rules.
3. Interest of employer & employees should be fully harmonized so as to secure mutually understanding relations between them.
4. Establish fair levels of performance and pay a premium for higher performance.
Application of Scientific Management:
Below is the video Henry Ford and Taylor revolutionized the car manufacturing with the application of Scientific management
Taylor’s Scientific Management is not hard to recognize within the modern day workplace. The car and computer manufacturing plants, the work environments we go to everyday, the hospitals we are treated in and even some of the restaurants we might eat in, – almost all of them function more efficiently due to the application of Scientific Management. In fact, these methods of working seem so commonplace and so logical to a citizen of the modern world that it is almost impossible to accept that they were revolutionary only 100 years ago.
2. Henri Fayol’s Administrative Management Theory:
The study of how to create an organizational structure that leads to high efficiency and effectiveness.
Henri Fayol known as the Father Of Management laid down the 14 principles of Management.-
- Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
- Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
- Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
- Unity of Command – Employees should have only one direct supervisor.
- Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
- Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
- Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
- Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
- Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
- Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
- Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
- Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
- Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
- Esprit de Corps – Organizations should strive to promote team spirit and unity.
3. Max Weber’s Bureaucratic Theory Of Management:
Bureaucracy: A formal system of organization and administration designed to ensure efficiency and effectiveness.
Authority: The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.
Weber made a distinction between authority and power. Weber believed that power educes obedience through force or the threat of force which induces individuals to adhere to regulations. According to Max Weber, there are three types of power in an organization:-
a.) Traditional Power
b.) Charismatic Power
c.) Bureaucratic Power or Legal Power.
Features of Bureaucracy:
1. Division of Labor.
2. Formal Hierarchical Structure.
3. Selection based on Technical Expertise.
4. Management by Rules.
5. Written Documents.
6. Only Legal Power is Important.
7. Formal and Impersonal relations.
Sughur article on Bureaucracy Theory.
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