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OVERVIEW OF THE MANAGERIAL THOUGHTS AND THEORIES

FROM THE HISTORY: CLASSICAL MANAGEMENT THEORY

TO MODERN MANAGEMENT THEORY

Dr. Abdelkarim Kitana,

Assistant Professor,

Business Management College

City University College of Ajman,

United Arab Emirates.

ABSTRACT

Organizational Management is an important perspective to be investigated for growth of an

organization and its shareholders. Historically, many theories have investigated organizational

management and how it contributes to its players. . The current review on management theories

discuss about the contemporary to neoclassical to modern theories illustrating the examples from all

the periods and their relevant theories. Further, those research works by legends who have contributed

to the management theories were discussed and their innovative ideas are highlighted in this paper.

Keywords: Organizational management, management theories, Neo-classical management theory,

Modern Management theory.

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Introduction:

Today‟s professionals should understand the importance of historical approaches in management in order to think

and analyze the trends. The current scenarios can be handled easily if one understands the historical perspective of

managing the environment. . If a person understands the business and management theories, it is obvious that they

can do business in a defined and structured manner since their strategies will be very clear and conceptually correct.

Management is a science that dates back to centuries. In order to meet the expectations set on a daily basis and

satisfy the ongoing demands from the public, a „guideline‟ is required in this critical time for a quality and increased

productivity towards achieving success. This guideline is common and can be applied in both the governmental and

non-governmental organizations where they differ in terms of motivation from the management. Throughout the

history, many have contributed through their experiences and research to the management theories. The concept of

management still grows by developing new strategies and continue to do so till the world rotates.

Early thinking about Management:

Management is one such concept that existed from 2900 BC in Egypt itself in managing the workplace to build

Pyramids. Centuries after, management is considered as a field which shape or restructure the organizations through

which the people‟s work can be made efficient and effective.

Classification of managerial theories:

Koontz (1961) classified the management theories under six different groups which are as follows.

 The management process school of thought

 The empirical school of thought

 The human behavioral school of thought

 The social systems school of thought

 The decision theory school of thought

 The mathematical school of thought Though his classification was the preliminary and found to be accepted, many other classifications are also in place.

One perfect example was the classification done by Evans in the year 1976 in which he classified managerial

theories into eleven. But Hitt, Michael A, Middle Mist, R Dennis and Mathis, Robert L. (1979) classification is

widely accepted still now that clearly deviates from earlier perspectives. Those three succinct groups in their

classification is

 Classical management school of thought

 Neoclassical management school of thought

 Modern management school of thought The above mentioned categories hold a similar group of managerial ideologies. These management theories, their

inherent schools of thoughts, contributions to the field of management as well as their individual and inherent

limitations are discussed in this review.

Classical Theory:

This theory was developed somewhere during the 19th and 20th centuries when the factory system of

manufacturing appeared that posed many challenges for the management to manage production, people and the

process though this was not encountered earlier. There is a rise in the problems in terms of organizing raw

materials, tools, manufacturing units, employee selection and recruitment, training scheduling the operations and

handling the non-satisfied employees. When the problems rose, managers found efficient solutions which resulted

in three subfields that are termed as Administrative Principles, Bureaucratic organizations and scientific

management.

Scientific Management:

During 1900-1920, the concept of scientific management raised quickly due to the profound industrial sector

expansion and technological sector bloom. Frederick W. Taylor, Harton Emerson, Henry L. Gantt, and Frank and

Lillian Gilbreth decoded the principles of management as the scientific management theory in which much

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concentration was put on the methods that can improve the productivity, efficiency and effectiveness of workers

along with their performance. To be precise, this theory concentrated much on the division of work, training of

workers, and specialization in addition to tangible incentives.

Frederick W. Taylor contribution in Management theory:

The four basic principles described by Frederick W. Taylor‟s philosophy are as follows.

1. Developing an original scientific management method to decode the best method for performing a task 2. Systematic recruitment of employees for executing a task who can be given responsibility for which he or she

can best suit

3. Scientific education and development of the worker 4. A mutual friendly cooperation that exist between the management and the labor In order to make this principles a success, it is obvious that the labor and the management needs a wholesome

mental revolution. Both ends are expected to work together towards higher production rather than focusing on

profits which would automatically results in higher profits that enables an amicable fight-less situation between the

labor and the management. Taylor concluded that higher productivity remains the common interest for both

management as well as the labor. Based on the production-line time studies, Taylor conducted his research on

management systems.

He kept aside the traditional work methods and worked on the timed steel workers‟ movements on a series of jobs.

By keeping the time study as base, Taylor segmented each job and its components so that a task can be performed

within the best possible time without the loss of quality. Through this methodology, Taylor designed the framework

on the number of employers for performing a task with equipment and materials in hand. Further, employers are

advised to pay more for an employee who shows higher productivity using a scientifically correct rate which would

benefit both the employee and the employer. The „Differential rate system‟ was the terminology given by Taylor for

the scenario in which the employees who show higher productivity and surpass the previous performance get paid

higher than others.

Administrative Principles:

Administrative principle focus on the productivity of the organization as a whole rather than its counterpart,

scientific management which focused on the individual. Henri Fayol, Mary Parker Follet and Chester I. Bernard

contributed to this approach.

Henri Fayol:

Based on his contribution to the systematic approach of managerial behaviour, Henri Fayol (1841-1925) is called as

the founder and father of the classical management school. He was the person who formally investigate the

managerial behavior. He firmly had a belief that sound management practice can be segmented into certain

identifiable and analyzable patters. Based on his earlier insights, a blueprint was developed by Fayol for a cohesive

doctrine of managers which is still retained to this day.

Faylor and Taylor were similar in their scientific approach but when it comes to coverage, Fayol focused on the

organization as a whole while Taylor focused only on the organizational functions. Fayol focused much on

management since business operations were neglected most of the time in research, according to his view. In the

contemporary world, “it was generally believed that leaders and managers are born, they are not made”. But Fayol

made it clear that management is a skill that can be taught by anyone to anyone based on the underlying principles.

He formulated a total of 14 principles of management which are as follows.

1. Division of Work: The people who are specialized in a work can be more efficient, effective and work in an orderly manner

2. Authority: Managers should balance between the authority and the allocation of work. In short, Managers should have the authority with delegation

3. Discipline: Obey the instructions and orders given by the managers. Equality and respect between themselves i.e., Employees and workers

4. Unity of command: To avoid miscommunication towards performing the task, orders must raise from single person rather than multiple supervisors which create chaos

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5. Unity of Direction: Organizational functions should be handled by a single manager whose plan is uni- directional. An organization with two managers who holds different directions towards performing a task leads

to failure. For example, Two HR managers in a company with different recruitment policy

6. Subordination of Individual interest to the common good: On any occasion, an individual‟s interest and his/her goals should not take the superiority over the organizational goals and commitment

7. Remuneration: Equal compensation between the employees and employers and fair remuneration policy is to be followed

8. Centralization: The manager should hold the authoritative power due to which the efficiency and effectiveness of the company can be improved

9. The Hierarchy: Any communication must be from the top to bottom and follow the hierarchy and not the opposite, for the establishment or organization

10. Order: The employees and the materials required for the production should be in the right place, right time and rightly managed

11. Equity: Fair and equal treatment of all the employees at the workplace by the managers 12. Stability of the staff: Organization may be affected by high employee turnover. So employee turnover must be

controlled

13. Initiative: Increase in the productivity and the performance can be achieved by the motivation from the managers and supervisors

14. Team spirit: Teamwork always increase the probability of the victory which in turn enable interaction among the employees due to which every individual‟s performance can be improved

Management Theories:

Neoclassical Management Theory:

A more human-oriented approach in comparison to the contemporary traditional classical theory in which there is

an over-emphasis on „mechanical‟ and „physiological‟ elements of management . Neoclassical management theory

looks into the perspectives of representing the management essence than the traditional classical theory. When

compared, there is no part for motivation in traditional classical theory which make statements without considering

time assumptions underlying such statements. Neoclassical management theory is otherwise a human-oriented that

emphasize on the needs of behaviour, attitudes, time needs and drives of individuals.

Bureaucratic Management Branch:

Max Weber formulated the theory of Bureaucratic management in which a set of structuring procedures and

guidelines for managing organizations are developed. This theory believes in procedures, rules, and hierarchy and

labor division within the organization. In general, bureaucratic organizations are cited with examples such as post

offices in which the number of offices and employees are too high. The strength behind such bureaucratic

organizations is its executable set of policies, rules and regulations and clearly defined hierarchy of authority.

A number of advantages are present in the bureaucracy such as consistent employee behaviour, no overlapping of

job role or responsibility, and assured prediction of the system behaviour. These advantages make it clear that no

employee is confused about his/her job role and their responsibility which directly improves the productivity. It

possess the advantage of recruitment and promotion model developing expertise among the employees and assuring

continuity in the organization. To explain in a different manner, the position is emphasized in bureaucracy than

person who holds the position. The organization is independent of the person which continues to grow in spite of

whether an individual stay or leave.

On the other side of advantages, Bureaucratic organizations possess disadvantages like red tapes and paper work

that not only make the operations inefficient but also time consuming. Without personalization of employees who

are to be treated only based on the rules and policies, they are unwilling to exercise individual judgment and avoid

risks. The employees‟ individual creativity, growth, their personal development and even initiatives suffer

considerably due to the preset process. The employees who are treated as inhuman are concerned less about the

organization and exhibit indifference regarding the organization and job performance. Bureaucracy expects

conformity in behavior rather than performance.

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Modern Management Theory:

As the classical theory focuses on the rational economic view and the neoclassical theory focuses on the social

person view, modern management theory is based on the complex employee view. Each organization is complex in

its own way and consists of workers each with diverse needs, motives, aspirations and potential. Modern

management theory is much focused towards the complex employee‟s view when compared to its counterparts such

as classical theory that focus on rational economic view and neoclassical theory that focus on social person view.

According to this theory, an organization consists of manpower with different perspectives, aspirations, potentials

and needs. So it is crucial that they are approached through custom-made principles rather than common which not

only makes them fed up, but also lose their potentials. But managerial strategies is important in such complex

scenarios in an organization. This Modern management theory approaches this complexity of organizations and

individuals. This theory firmly believes that no single managerial strategy can be applied to all people at all times.

According to this theory, each employee has different views and many motives involved which varies between

organizations. Further, they also gain new motives as they are exposed to experience. So there is a need for

managers to apply different strategies at different times and for different persons. The two approaches in the

Modern Management theory are Systems Approach and Contingency Approach which are as follows.

Systems Approach:

In systems approach, the management is viewed as a unified system, with a purpose that is composed of interrelated

parts, rather than looking at individual segments. In this approach, managers have the opportunity to look at the

whole organization and encase themselves within the part of a larger and external environment. This theory gives a

bird‟s overview of the effects in various segments of an organization when one segment is affected.

When it comes to a manufacturing plant, production managers prefer to manufacture standardized products with

long and uninterrupted production runs due to two benefits i.e., low cost and increased efficiency.

On the contrary, marketing managers prefer flexible manufacturing schedule for manufacturing custom special

orders on short notice, in order to attract customers who prefer wide range of products that are quickly delivered.

Those production managers who follow Systems approach take scheduling decisions after they get an overview

about the effects of their decisions on an organizational perspective rather than the specific department perspective.

The systems approach, in short, defines that a manager is not supposed to confine to their department output as in

traditional methods, but the organization as a whole as a mesh. This can be achieved only when they have a

constant communication with other departments, employees, representatives and even other organizations as well.

To be precise, systems approach grasp the importance of business relationship webs and its efforts.

Contingency Approach:

Charles Kindleberger, economist answered his student‟s question at MIT as „It depends.‟ When a question is

engrossing. He further adds that an economist has to specify upon what it depends, and in what ways. In

management too, „It depends‟ seems to be an correct response at most instances as prediction may vary in

accordance to the situations, actions and outcomes. So it is not surprising that a recent approach seeks to integrate

the various schools of management thought by focusing on the interdependence of the many factors involved in the

managerial situation. An approach developed by consultants, researchers and managers, the contingency approach

or situational approach otherwise, towards the application of concepts of the major schools to real-life situations. At

some times, when a highly effective solution may not work for other problem during which they pose the question

and search for explanation. The contingency approach followers had a logical answer to all such questions in which

some highly praised approaches failed to perform in other scenarios. They answer that due to difference in

situations, results differ. In contingency approach, a manager is expected to find the appropriate technique that suits

the situation under particular circumstances, and at particular time for the best achievement of management goals.

Various approaches handled by different theories in employee motivation for increasing productivity is compared

and contrasted in contingency approach. For example, a) A classical theorist may prescribe a new work-

simplification scheme; b) A behavioral scientist create a climate that is psychologically motivating and he also

recommends some approach like job enrichment--the combination of tasks that are different in scope and

responsibility and allow the worker greater autonomy in making decisions. The contingency approach-based

manager choose the best option and identifies which will work best here. They decide that during the times of

unskilled and untrained available labor, work simplification would be the appropriate solution. However, in the

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presence of skilled workers who are driven by pride in their abilities, managers prefer towards a job-enrichment

program that will be more efficient. The modern management theory has a good turn through this contingency

approach as it portrays each set of organizational relationships in its unique circumstances.

Conclusion:

There has been a tremendous growth in the management sector due to which the efficiency, productivity,

individuality and the quality of the production section have increased to new heights. Now-a-days managers of

organizations whether locally or globally can achieve success by understanding these management concepts and

theories. Being classified as both art as well as science, management employs the science of planning, organizing,

directing and monitoring while creates the people mindset towards work as an art. A perfect blend of both art and

science is expected by all the organizations which tend to grow enormously by implementing good management

policies and continues to lead the competition. For an organization to be successful, a manager need to understand

and apply the theories. Management is not a separate identity, but a group of people with innovative ideas and great

thinkers who has a common guidance and inspiration for a business to be successful. Managers and businessmen

both should find innovative and creative methods of managing people in order to achieve the business goals

effectively and efficiently.

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