classical & neo classical theories

8/12/2019 Classical & Neo Classical Theories

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Two Schools Of Thought

1. Classical Management (1800-1930)

Administrative Theory (Henry Fayol)

Scientific Management (Federick Taylor, Frank and

Lillian Gilbreth, Henry Gantt-Gantt Chart) Structuralism School (Max Weber-bureaucracy)

2. Neoclassical Management and Organization Theory

(1930-1960s) Human Relations School (Human Relations/Hawthorne

Experiments)

Behavioral School (Abraham Maslow, Douglas McGregor,Rensis Likert, Chris Argyris, Frederick Herzberg, David

McClelland)


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Historical Scenario

Machines

Productivity Consumer Cost

Demand Factories/ Workers

Best Possible Methord?


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Issues related to Workers

Coloration between Humans & Machines

Lack of training

Large number of people working together

Authority Structures required.

Standard Operating Procedures

BIGGER BUSINESS WERE FACING BIGGERPROBLEMS

Best Possible Method?


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To manage is to forecast and plan, to

organize, co-ordinate and to control

Henry Fayol


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Henry FayolsAdministrative Theory

Father of Modern Management.

French CEO, Kamobol.

The success of an enterprise depends upon on

the admistrative ability of the its leaders tomanage people instead of its technical ability.

Many of these Principles have become commonknowledge today, but then they were insights.

Book writtenManagement theory andpractice


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Frederick Taylor

In the past the man has been first; in

the future the system must be first


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Taylors Scientific Management

On June 23, 1903 Fredric Taylor spoke to a roomfull of engineers on the topic ONE OF THEBIGGEST THREAT TO AMERICAN SOCIETY

National Efficiency: far more significant than anyother problem faced then-optimum level

BookPrinciples of Scientific Management

One Word- Efficiency

Every Act could be reduced to a science. Significance of human effort-

Social Incentive - Soldering

Economic Incentive- Fair days Work


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Primary Objective of Management

Maximum Prosperity

Mutually Benefit Relationship

The Management should assume moreresponsibility.

One perfect method was required instead of

many


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Principle of Scientific Management

Established clear rules on how the work is to beperformed

Select, train & develop workers

Cooperate with workers & ensure that work wasbeing performed at previous conditions.

Equal distribution of the work & responsibilitybetween worker & administration

Eg- Fast Food Establishments


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Henry Ford

Earlier-

Vulcan Motor Company- 2monthsfor one car

Later-

1908- Ford set out to make new market , the work

is done.

Influenced by Fayol & Taylor

Eg- Wheel Making was broken down to 100 steps

Still 200 cars a day.


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In the first assembly line of the world,

the car was dragged through a rope by

a few men, as the other workers

worked on it

This led to high labour dissatisfaction,

& high turnover ration only after a

month of its installment

In an assembly line , there could be

no soldering. The pace of the plant

was decided by the administration

Since Henry ford now was making

enough money, he rose the pay for

wokers ,5$ a day, which was quite a lot

in that time. New workers joined in.

Assembly Line


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Max Weber


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Webers Bureaucracy

Exercise of control on the basis of knowledge

Administrative modelsMonarchy

German Sociologist

Ideal System

Management based on the basis of rational legalauthority was more efficient than one based onfavoritism , Nepotism.

Against subjective nature of Monarchy Loyal towards Supervisor & not towards

Organisation


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Characteristics of Bureaucracy

A well defined hierarchy of command.

Management by rules & regulation

Division of labor & work specialization

Managers should maintain interpersonalrelationship with employees

Competence, & not personality is the basis of

job appointment Formal written records


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Examples Of Bureaucratic Organizations

Department of Motor Vehicles

Prisons

Police departments Colleges and universities


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Neoclassical Management and

Organization Theory

Human Relation Management

Hawthorne Studies

Maslow Need Hierarchy Herzberg two factor theory


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Human Relation Management

Huge shift from classical theories

Not only about Equipment, technology orefficiency.

EmployeesSocial , Personnel, InitiativeMotivational

Situation can be optimized.

Want to Succeed attitude-The workers will thenfind a way

Psychological Relationships in the work force.


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Principles of Human Relations

Approach

Need recognition and appreciation in workers

Workers are human beings & not machines

An organisation works not only through formal relations,

but also through informal relations Workers need a high degree of job security and job

satisfaction.

Workers want good communication from the managers.

Members do not like conflicts and misunderstandings.

Workers want freedom

Employees would like to participate in decision making,


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Hawthorne Background

40,000 workers.

Working condition = Difficult

No benefits Pension Plan in 1906

Vacations one week after five years

Progressive Place to work Good Wages


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ObjectiveTo check the impact of illumination ofWorkers Productivity.

Conducted by Elton Mayo

Result- Output went up among the experiment class& continued to go up even when no lights.

Called of by National Assembly, Mayo Pesisted.

First Study on attitudes of the workers. Mayo conducted other experiment related to

workers participation, initiative & motivation.

Productivity went up by 30% Industrial History of working.

First Interviewing features

Industry have never got the peoples natural worth


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Maslow

Researcher

Basic levels satisfied first to get to the higher

needs.

People are of which need hierarchy.


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Maslows Hierarchy of Needs


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Two Factor theory

Developed by Frederick Herzberg.

500 Accountants.

Extreme Dissatisfaction (Hygiene)- Benefits,Pay, Job Security in workplace

Extreme Satisfaction(Motivational)-

Recognition, Achievements, advancements,

challenging work, fulfilling


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Two factor Theory


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Theory X & Theory Y

Given by McGregor

In 1960

Human Side Enterprise

Your management style is strongly influencedby your beliefs and assumptions about whatmotivates members of your team

Understanding your assumptions aboutemployees motivation can help you learn tomanage more effectively.


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Theory X

Theory X assumes that employees are naturally unmotivated and dislikeworking, and this encourages an authoritarian style of management.According to this view, management must actively intervene to get thingsdone. This style of management assumes that workers:

Dislike working.

Avoid responsibility and need to be directed.

Have to be controlled, forced, and threatened to deliver what's needed.

Need to be supervised at every step, with controls put in place.

Need to be enticed to produce results; otherwise they have no ambitionor motivation to work.


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Theory Y

Theory Y shows a participation style of management that isde-centralized. It assumes that employees are happy towork, are self-motivated and creative, and enjoy workingwith greater responsibility. It assumes that workers:

Take responsibility and are motivated to fulfill the goalsthey are given.

Seek and accept responsibility and do not need much

direction.

Consider work as a natural part of life and solve workproblems imaginatively.

classical & neo classical theories

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