Schools of Management Thought

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Everything you need to know about the schools of management thought. Management is one of the oldest arts dating back to the beginnings of civilisations.

Excepting some attempts to study the art of administration or management systematically in some of the leading civilisations of the world, the management discipline or science is relatively of recent origin.

Beginning with an examination of the functions performed by the executives, the process of management has been studied by the scholars drawn from a number of disciplines.

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The stream of management has swelled with rich contributions from all the various disciplines. As a result different management theories have emerged.

The various approaches to the study of management as propounded by specialists from different disciplines have come to be called the schools of management thought. Attempts have been made by writers on management to identify the major schools of thought in management.

The schools of management thought include:-

1. The Operational or Management Process School 2. The Empirical or Case School 3. The Human Behaviour School 4. The Social System School 5. The Decision Theory School 6. The Quantitative School 7. The Systems Management School

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8. The Contingency School 9. ‘Scientific Management’ School 10. Human Relations School 11. Socio-Technical Systems School 12. Management Science School 13. The Management Experience School 14. The Mathematical School.


Schools of Management Thought: Management Process, Empirical, Decision Theory, Contingency School and a Few Others

Schools of Management Thought – Management Process, Empirical, Human Behaviour, Social System, Decision Theory, Quantitative, Systems Management and Contingency

In recent years, as the interest, needs and importance of management have grown; different approaches and viewpoints to the study of management have come into being. Management affecting people, technology, values and human wants has attracted the attention of psychologists, anthropologists, sociologists, mathematicians, economists, politicians, scientists, physicists, biologists, business administration scholars and even practising managers.

As a result, various schools of management thought, each employing certain beliefs, views and disciplines, have come into existence. Their variety has resulted in what Prof. Koontz called ‘The Management Theory Jungle’. Management thinkers, however, have been able to identify and isolate several schools of management thought from this jungle.

These include:

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1. The Operational or Management Process School;

2. The Empirical or Case School;

3. The Human Behaviour School;

4. The Social System School;

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5. The Decision Theory School;

6. The Quantitative School;

7. The Systems Management School; and

8. The Contingency School.

1. The Operational or Management Process School:

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This school was fathered by Henry Fayol. This school is also known as – ‘universalist’ school. This school is contemporary of the Traditional or Scientific Management School founded by F. W. Taylor.

The operational or Management Process School perceives management as a process of getting things done through and with people operating in organized groups. It analyzes the management process, establishes a conceptual framework for it, identifies its underlying principles and builds a theory of management from them.

According to Henry Fayol, who is universally recognized as the founder of this school, and other writers like Newman, Koontz and O’Donnel, Terry and Brech, who refined the process theory, the management process involves planning, organizing, staffing, directing, controlling and motivating.

Advocates of this school further argued that the management process is universal in the sense that it occurs not only in business but also in non-business organizations; it applies not only to top management but also middle and first line management levels. Furthermore, it is claimed that management principles distilled from experience possess universal validity in the sense that these hold good under all conditions, in all countries and at all times; this claim, however, is open to question.

Since management is viewed as a process, this school approaches the analysis of the process by analyzing the manager’s functions of planning, organizing, staffing, directing and controlling. It looks upon management theory as a way of organizing experience so that practice can be improved through research, empirical testing of principles and teaching of fundamentals involved in the management process.

Other than Fayol, most of the early contributors to this school dealt only with the organization portion of the management process and neglected planning, control and staffing. This was because of the fact that their greater experience was from this facet of management and that planning, control and staffing functions were given little attention by managers before 1940. The basic approach of this school is to identify the functions of managers and then to distil from them the fundamental principles of the complicated practice of management.

According to Hicks, some of the fundamental characteristics of this school are as follows:

(i) Functions of management are defined, emphasized and studied.

(ii) Principles of management are thought of as being important for clarifying the study of management and for improving management practices.

(iii) Principles of management should be the starting point for research and should yield the most useful management theory.

(iv) The process of management is an art which is concerned, with the application of management principles.

(v) Management is universal since good management principles have applicability to all organizations.

This school received valuable contribution from Oliver Sheldon through his book ‘The Philosophy of Management’ which emphasized on management’s social responsibility. Sheldon believed that the problem of industry was to determine the proper balance between the ‘things of production’ and the ‘humanity of production’ – a balance between the scientific approach and social responsibility. With Sheldon’s notable contribution, management attained prestige and professional status.

Prof. Koontz is of the view that the management-process-approach has certain advantages for students, researchers and practitioners, such as –

(i) It helps to present effectively knowledge about management.

(ii) It provides a starting point for researchers to verity their validity and to improve their applicability.

(iii) The principles help practising managers in improving practices. It may, however, be pointed out that though, these provide a scientific basis for management practice, in real life the principles have to be adapted to such environmental variables as political, social, cultural and economic conditions of the countries where or people among whom the business organizations operate.

2. The Empirical or Case School:

This approach emphasizes the analysis of experiences, usually through cases. Usually this approach is a means of teaching and transferring experience to the student of management in individual cases, and of attempts to solve specific problems, the managers will come to understand and learn to apply effective techniques in comparable situations.

Advocates of this school believe that managerial tasks should be thought of and performed in the manner suggested by the recent past. In other words, management is guided by custom or tradition. The line of thought adopted the securing of information believed necessary and the handling of it are performed by reviewing what was done in the past by managers under similar circumstances. The chief implication of this approach is to maintain the status quo and without disturbing things to continue, to manage the enterprise through the same means it always has been managed.

According to Hicks, this school stresses experience as a factor of managerial performance and de-emphasizes the theoretical aspects of the subject. It holds that experience is the only way a manager can develop and that it is the transfer of experience from the practitioner to the student that constitutes the most valid way of learning management.

The view is taken that by studying the successes and mistakes of others, and by having one’s own experiences, one can develop a general frame of reference on which to rely in managerial situations. No one can deny the importance of analyzing past experience or ‘How – it – was- done’ of management. But this is not always a correct path of getting exact decisions in practice because management, unlike law, is not a science based on precedents.

Future situations may be entirely different than those of the past. There is a positive danger in relying too much on past experience and on distilled history of managerial problem solving for the simple reason that a technique found ‘right’ in the past may not be so in a somewhat similar situation of the future. What fits one enterprise may not fit another at all.

Again, to the extent that the empirical school draws generalizations from research into past cases, it tends to be the same as management process or operational school. Both the traditional and empirical school stresses the generalizations or truths necessary for the successful practice of management. However, the traditional school holds that these generalizations can be codified and taught through written theory while the empirical school holds that the truth must be learnt through experience.

Though complete reliance on past experience in problem solving is not desirable, critical examination of what other managers have done and its careful evaluation can be of considerable help in decision-making.

3. The Human Behaviour School:

This school is also known as – ‘Human Relations School’, ‘Leadership School’ or ‘Behavioural School’. The emergence of the behavioural approach to the study of management may be regarded in a sense, as a revolt against the exclusive emphasis on machines and materials by the Scientific Management School, and to the almost complete neglect of human factor in industry.

The advocates of the Behavioural School argued that in as much as manager gets things done through and with the help of people, the study of management must be centred around the workers, and their interpersonal relations. They, therefore, concentrate on the study of the individual, his psychological motives, the informal groups, group dynamics and motivation. This school leans heavily on most social sciences including psychology, sociology, social psychology and anthropology.

It concerns itself with understanding the relevant phenomena of infra-personal and inter-personal relationships as they relate to the work situations as well as with observing work group as anthropological subcultures. It tends to treat all group activities as – ‘managed’ situations and deals with motivation, group dynamics, individual drives, group relations etc. It opened the floodgate of investigations of human resources.

The origin of this school may be traced to 1879 when Wilhelm Wundt established, at Leipzig, a laboratory for the study of human behaviour, a major step in transforming psychology to an experimental science. It was Dr. Munsterberg, his student and a professor at Harward, who published his book ‘Psychology and Industrial Efficiency’ in 1913, introducing the new field of Industrial Psychology.

However, Prof. Elton Mayo is regarded as the father of Behavioural School. Working at the Department of Industrial Research at the Harward University, he led a team conducting a series of experiments at the Hawthorne Plant of the Western Electric Company to evaluate attitudes and psychological reactions of the workers in on-the-job situations, under different physical conditions of work such as – illuminations hours of work, rest pauses, as well as monetary and non-monetary benefits.

From the records of their reactions, behaviour and productivity, under these changes, Elton Mayo drew conclusions:

(i) A factory is not only a techno-economic unit but it is also a social unit;

(ii) Workers in a factory spontaneously form small informal groups and their behaviour is greatly influenced by these groups;

(iii) The attitude of the supervisor and his style of supervision influence workers’ attitude to work and their productivity; and

(iv) While wages and physical conditions of work do exercise some influence on workers and their productivity, a far greater influence is exercised by their interpersonal relations, and by the attitude of the supervisor.

Through Mayo’s work, a new dimension was added to the then existing concepts of management that, to be effective, a manager must recognize and understand the individual as a person with wants, motives, drives and personal goals that need to be satisfied. He emphasized that management must assume a new role in its dealings with employees, develop a new concept of authority and right to command and help foster a new social order based on the individual’s co-operative attitude and the system of coordinative organization and communication developed by management.

Exponents of this school like Hugo Munsterberg, Henri L. Gantt, Mary Parker Follett, Chester I. Barnard etc., made highly valuable contributions and soon, the knowledge of behavioural school became wide spread. Managers become aware of the importance of behavioural school teachings and they gradually turned to this new trend of management thought and understood that ‘humane’ and ‘respectful’ treatment of labour pays indeed in the long-run.

4. The Social System School:

This school is closely related to the human behaviour school and often confused with it. It is heavily sociological in flavour.

The social system school includes those who look upon management as a social system, that is, a system of cultural inter-relationships. It identifies the nature of cultural relationship of various social groups and attempts to integrate them into a system. Sometimes the ‘system’ is limited to formal organizations; but many times formal organization is not distinguished and any- kind of system of human relationships is covered.

The system is often defined as – “any co-operative system in which people are able to communicate with each other and are willing to contribute action toward a conscious common purpose”. It stresses the interaction and co-operation of people making up a social system. The decision reached should be in keeping with what has been termed as the ‘balanced best interests’ of the group.

This means that the course of action should not be based on the wants and desires of one group alone, but should reflect the interests of all parties. Among some of the more helpful aspects are the awareness of the institutional foundations of organization authority, the influence of informal organization, and such social factors as the “bonds of organization”.

The recognition of organized enterprise as a social organism, subject; to all pressures and conflicts of cultural environments, has been helpful to theorists as well as practising managers. The analysis and study of group behaviour in the framework of social systems do have great value in the field of management.

Some scholars consider Chester I. Barnard as the spiritual father of this school. But it is often pointed out that the behavioural school, to which he belongs, according to some, does include the study of management as a system of cultural inter­relationships.

A fairly new school of management, which is closely related to the social system school, identifies itself as the ‘socio-technical school’. This approach views an organization as two systems – a social system and a technological system-which necessarily interact. It is claimed that organizational effectiveness, and therefore, managerial effectiveness, must depend on looking not only at people and their interactions, but also at the technical environment in which they operate.

It studies people and social systems, and also technological systems, to make sure they are harmonious and to see whether changes in technology could result in a more effective operating unit. The purposeful and integrated analysis of the interactions of social and technical systems made by this school contributed substantially to the knowledge underlying effective management. The school offers an important area of enquiry and research in management; but it cannot be regarded as the entire field of management. The socio- technical approach is generally credited to E. L. Trist of the British Tavistock Institute.

5. The Decision Theory School:

This school concentrates on rational approach to decision-making that is the selection, from among the possible alternatives, of a course of action or of an idea. It deals with the decision itself, decision-making persons and organizational groups and with the analysis of the decision-making process. It covers not only the economic rationale of the decision but the psychological and sociological reactions of individuals and groups, the environments of decisions and decision-makers and also analysis of value consideration involved in decision-making.

Thus, the school has expanded its horizon considerably beyond the process of evaluating alternatives. Through the keyhole of decision-making it looks at management to consider the entire field of enterprise operations and its environments. This school observes that the central core of management is decision-making. It emphasizes the critical nature of decisions in an organization.

Economics, value analysis and information transmission processes are among the areas that are applied by decision theorists to arrive at the optimum decision. The school holds that the progress of an organization is determined by the cumulative effect of thousands of decisions made by managers at all levels. Therefore, decision ought to be the basis for theory and study.

This school of thought is an outgrowth of the theory of consumer’s choice with which economists have been concerned since the days of Benthem early in the Nineteenth Century. It has arisen out of such economic behaviour under risks and uncertainties. Most of the members of this school are economic theorists and as such, the contents of this school are heavily oriented model construction and mathematics.

The scientific approach to decision-making involves the following steps:

(i) Define the problem;

(ii) Collect the relevant data;

(iii) Develop alternatives;

(iv) Examine all alternatives;

(v) Select the best course of action;

(vi) Implement the action;

(vii) Evaluate the result of the action.

Because of its very wide scope the decision theory is no longer a neat and narrow concentration on decision, but becomes a broad view of the enterprise as a social system.

No doubt, the study of decision, the decision process and the decision-maker can be extended to cover the entire field of management. Nevertheless, one wonders whether this focus can also be used to build around it the entire area of human knowledge.

6. The Quantitative School:

This school of thought is also called ‘Mathematical School’ or ‘Management Science School’. It is only after the Second World War that this approach has attracted attention. It makes use of mixed teams of, for example, a mathematician, a physicist, an economist, an engineer, an accountant, and a statistician to study a problem in say inventory management. By thus studying the problem from different points of view, the resulting solution should be much better than could be achieved otherwise.

Thus school stands for using all pertinent scientific tools for providing a quantitative basis for managerial decisions. It is, therefore, labelled as quantitative approach or operations research approach. The focus of this school is the ‘model’, for, through these devices, the problem is expressed in its basic relationships and in terms of selected goals. Models permit a systematic analysis of problems. They facilitate basic understanding of problems. The users of models are known as operations researchers.

Simply stated, the approach to solving problems using management science consists of:

(i) Formulation of the problem;

(ii) Construction of a mathematical model to represent the system under study. This model expresses the effectiveness of the system as a function of a set of variables, at least one of which is subject to control;

(iii) Devising a solution from the model. This involves finding the values of ‘control variables’ that maximize the system’s effectiveness;

(iv) Testing the model and the solution derived from it. This involves evaluating the variables, checking the model’s predictions against reality, and comparing actual with forecasted results;

(v) Establishing controls over the solution. This involves developing tools for determining when significant changes occur in the variables and functions on which the solution depends, and determining how to modify the solution in the light of such changes; and

(vi) Putting the solution to work implementation.

The construction of the mathematical model referred to above expresses the effectiveness of the system under study as a function of a set of variables at least one of which is subject to control.

The general form of the operations research model is:

E = f (xi , yi);

Where E represents the effectiveness of the system (profit, cost and the like), Xi the variables of the system that are subject to control, and yi those variables that are not subject to control.

Scientists and engineers have been involved in military activities for as long as recorded history. One of the best known instances in ancient history occurred in 212 B.C., when the city of Syracuse employed Archimedes to devise means of breaking the naval siege of the city, under attack by Romans.

In England, between 1914 and 1915, F. W. Lanchester attempted to treat military operations quantitatively. Again, in England during Second World War, effective military operations research efforts were undertaken. The techniques were used, in improving early-warning radar system, in anti-submarine warfare, in civilian defence, in determining convoy size, in the conduct of bombing raids on Germany etc.

It was only after 1947 that this technique was introduced in business in England and in the United States. Nationalized industries in England provided a fertile field for experimentations with operations research techniques. O. R. Techniques were first used in the U. S. A. on problems in hospitals, department stores, supermarkets, railroads, electric companies etc. Since then, a large number of O. R. techniques have been developed and widely used in business and industry.

The more well-known among these are:

(i) Linear Programming;

(ii) Queuing Theory;

(iii) Monte Carlo Methods;

(iv) Game Theory;

(v) Information Theory;

(vi) Probability Theory;

(vii) Sampling Theory;

(viii) Inventory Control Models;

(ix) Critical Path Method; and

(x) Programme Evaluation and Review Technique (PERT).

Thus, the school has progressed from a war baby stage to rapid maturity, with its national and international societies and publications, its acceptance in learned circles and university curriculum and its adoption by business and government alike. The management science school is now well-entrenched, and its followers are firmly convinced that any phase of managerial organizing, decision-making, or planning can be expressed in quantitative terms for a more exacting analysis.

Although comparatively new, the school has proven its approach and got an important place in the field of management. It forces the user to define precisely his objectives, problem and problem area. In addition, orderly thinking, logical methodology and recognition of definite constraints are encouraged. A powerful tool is, thus, supplied for solving complex problems and more meaningful quantitative data are made available.

The approach is especially effective when applied to the physical problems of management such as inventory, material and production control – rather than to problems of human behaviour. However, if measurable factors of human behaviour are available, the quantitative approach is useful. Risk is not eliminated by use of this approach but assistance is provided to enable a manager to assume the correct risk.

There can be no doubt of great usefulness of the mathematical approach to any field of enquiry. It has made a great impact in the field of management. But it is hard to see mathematics as a truly separate school of management thought. By bringing to the field of management the techniques and tools of the physical sciences, mathematicians have already made an immense contribution to orderly thinking.

They have forced on people in management the means and desirability of seeing any problem more clearly. They have pressed the need for establishing goals and ways of measuring effectiveness. But even with this contribution and the resulting greater sharpness and sophistication of planning, it is difficult to see that mathematics is management theory. Mathematics is a tool rather than a school of management theory.

7. The Systems Management School:

The first management writer and practising manager to see management in the context of systems was Chester Barnard. He saw an executive as a component of a formal organization and the latter as a part of the entire co-operative system involving physical, biological, social and psychological elements.

According to the systems management school, management is a system that is an assemblage of objects or functions by some interaction or interdependence. This approach lays emphasis on strategic parts of the nature of their inter-dependence, goals set by the system and communication net-work in the system.

A system may be defined as – “a group of inter-related and inter-dependent parts operating in a logical manner or sequence according to a predetermined plan, in order to achieve a goal”.

From this definition certain characteristics of a system can be noted:

(i) Every system is goal oriented. It exists for some objective.

(ii) Every system is comprised of inter-related parts. These inter-dependent parts constitute an indissoluble whole. The parts are not a hit-or-miss conglomeration of separate elements but a definite system characterised by organization and unity.

(iii) Every system operates in a logical manner. There is a sequence of events or operations. The system proceeds in a rational manner and is not haphazard in its functioning, unless it has been damaged or impaired in some way.

(iv) Every system operates in accordance with some plan. Thus, a system is an organized whole made up of parts associated in such a way that they form an orderly totality or unity.

Systems are basic to most activities. Analysis reveals that an activity is the result of many sub-activities, and in turn, these sub-activities of many further sub-activities. Each system has an input, a process, and an output, and it is a self-contained unit. All systems, in general, have sub-systems and are also a part of a supra system.

Systems can be ‘closed’ or ‘open’. A closed system is one which does not adapt to its environment. On the other hand, in an open system there are regular relationships and interactions between the system and its environment as happens with biological or social systems. The open system is characterized by a one-way cause and effect relationship, while closed system is characterized by a feedback of information to correct errors which might go unnoticed in the open system.

In a closed system an organization is viewed as a self-contained entity with only minor attention directed towards environmental matters such as – technology, political influences and social expectations, through the planning function. Hence, the closed system has difficulty in monitoring changes occurring in the environment. The primary advantage of the open system is that it responds to change. The open system’s perspective visualized organizations taking inputs such as – raw materials, labour, capital and various types of competitive and strategic information, from the larger environment.

Operations are then performed upon the inputs and combined with the managerial process to produce desirable outputs, which are distributed back into the environment. Through a feedback process the environment evaluation of the output then becomes part of the input for further organizational activity. If the environment is favourable with the output, activity continues; if it is not, changes are initiated until the desirable relationship is restored. Systems theorists emphasize that open systems can achieve desired results. Open system as it grows tends to become more specialized in its elements and to elaborate its structure, often enlarging its boundaries or creating a new super-system with wider boundaries.

Creating and developing new system or improving the present system necessitates investigation of a system, either to gather facts on which a new system will be built or to examine, it detail, an existing system so that improvements can be made. In other words, for systems, design what becomes essential is systems analysis. Systems analysis is investigative in nature and systems design is creative in nature. Good systems do not just happen; they are the result of careful analysis and thoughtful design.

An enterprise is a man-made system, the internal parts of which work together to achieve established goals, the external parts to achieve interplay with its environment, including customers, the general public, suppliers and government. The manager integrates his available facilities towards the achievement of the goal by means of systems which relate needed activities for the desired and result.

The systems serve as the media through which the manager operates. The effective manager must be a scientific and creative designer of workable systems. Systems theory is a way of thinking about activities and related activities involved in the business operation. It is a way of thinking that forces emphasis upon the organization as a whole and considers the optimum operations of the complete system.

The systems approach forces the manager to look upon his business organization as an information network, with the flow of information providing the decision makers at various management levels with the information needed to make decisions of all types. As a result, business information systems, which were once considered mainly accounting, record keeping systems, are now being called upon to support all the planning, control and operational decision-making processes within an enterprise.

As such, these systems are required to store and process not only information concerning internal operations, but also information regarding competitor’s plans, strategies, programmes, and performance, as well as significant information on the economic and social environment – in short, all information needed for executive decision making.

The skilled and forward – looking manager rarely sees his management system as closed. He recognizes an ever – lengthening list of potential interruptions. His planning is more and more open as it becomes more realistic and better prepared for every eventuality.

Systems approach to management is a new approach. A number of authorities working in diverse fields of specialization have contributed to the development of this approach. Four well known contributors are Ludwig von Bertalanffy, Kenneth Boulding, Norbert Wiener and Herbert Simon. Systems approach along with its closely related ally, computer science, has had and is having a dramatic impact on business policies and operational practices. It provides a conceptual basis, as well as principles and guidelines for establishing a more efficient system of planning, control and operational decision-making. Today, the systems approach is undoubtedly the most widely accepted base for modern management.

An advantage of the Systems Approach is that is enables us to see critical variables and constraints and their interactions, with one another. It forces a practising manager to be constantly aware that one single element or phenomenon should not be treated without regard for its interacting consequences with other elements or phenomena.

The systems approach focuses on the end-results rather than the means; and it provides an orderly, efficient, purposeful plan of action. It develops a high degree of co-ordination of the required specialized activities. It provides a. firm, definite basis of control and liberates management from the daily details of operations management. Great managers always have the ability to see systems whenever they look at any task.

8. The Contingency School:

The contingency approach was first advocated by J. W. Lorsch and P. R. Lawrence in 1970. According to them, the essence of all these approaches is that there is ‘one best way’ to manage. They, however, assert that Taylor may have been right when he said that there is one best way to perform a repetitive practical operation, but that is not true of decision-making, planning, organizing, etc. Different organizations with different tasks and differing competitive environments require different decisions and plans, in varying situations.

The essence of Contingency or Situational Approach is that the internal functioning of an organization must be consistent with demands of organization task, technology or external environment, needs of its members etc., if the organization is to be effective. Rather than searching for the one best way to organize under all conditions, it is better to examine the functioning of the organization in relation to the needs of its members and the external pressures facing them.

Contingency view of organizations and their management according to F. E. Kast and J. Rosenzwig, suggests that a business organization is a system composed of sub-systems, and seeks to understand the inter-relationship within and among the sub-systems, as well as, between the organization and its environment. Its aim is to suggest organizational designs and managerial actions most appropriate for specific situations.

This approach also recognizes that management and organization are open systems and processes in continuous interaction within themselves and with other systems. Further, there is no one-to-one cause and effect relationship between inputs, processes and outputs in an open system, because of the operation of a multitude of intervening variables which prevent the system from responding in simplistic and predictable manner.

This school also believes that there is nothing final either, about means or ends. They are tentative and are related to each other. There is no one best goal. Goals are multidimensional and management may try to maximize their attainment. Similarly, goals may be determined not necessarily at the beginning but as means being made available. Abilities of managers, their value systems, their subjective notions and the objective realities of the organizational and external environment enter as inputs into the management process and powerfully influence the quantum and quality of outputs.

Other Schools:

Apart from the well-known schools, there are other schools also.

They may be briefly described as follow:

i. The Formalism School:

It assumes that organizational members will perform their jobs best when jobs are clearly defined and structured. It emphasizes on formal channels of command, information flow, organization chart, job description, etc.

ii. The Challenge and Response School:

This school regards that members of business enterprise will respond with good performance when they are motivated through appropriate challenges.

iii. The Spontaneity School:

According to this school group co-ordination and effective organization behaviour will automatically emerge around ‘natural’ leader. It observes that formal structure, policies, procedures and control ought to be minimized. This is a reaction to the Formalism School.

iv. The Participative School:

This school holds that organizational members will perform best when they are given an opportunity to participate in making organizational decisions which will affect them.

v. The Directive School:

This school advocates that people want and need to be told what to do. Management is in better position to make decisions than workers.

vi. The Managerial Roles School:

This school believes that managers at various levels in the hierarchy have specific roles. For instance, the top managers have interpersonal role, informational role, decision-making role and risk-taking role. This theory tries to give clear-cut roles to various other managers also.

Conclusively one can say that an excursion through the ‘Management Theory Jungle’ certainly reveals that each approach has something to offer and should be integrated within a systems framework. Systems and contingency approaches recognize the complexity of organizations and their environment, and the variability of their interactions.

Systems approach enhances our understanding of organizational dynamics and complexities. Contingency approach endows organisations and management with flexibility in order to grapple with a variety of situations. It requires a pragmatic bent of mind with emphasis on situational – analysis and with evolving appropriate managerial practices for varying situations.

To quote Robert M. Fulmer, “Because we are interested in the manager himself we will look at the theories of management in the light of the complete manager. We will notice that each of the approaches to management is built around one of the qualities of the ideal manager”. The manager represents many people. He is a historian, trying to benefit from the experience of others, a psychologist giving heed to the characteristic nature of people, a social scientist recognizing that group status is highly significant management tool, a logician utilizing the latest decision making techniques and a mathematician using a systematic approach to problem-solving.


Schools of Management Thought – 11 Important Schools of Management Thought

Human beings, both managers and workers, are the pivot round which management activity revolves. However, there are no unified principles of management as there are in the case of natural sciences. It is open to a scientist to invent a new principle by scientific experiments—identifying and testing relationships between different variables and reaching conclusions through mathematical analysis.

Can management principles be formulated in similar manner; the answer is a firm ‘no’. In formula­tion of management principles, variables are often ambiguous, cause-effect relationships between them often not clearly visible, experimentation under controlled conditions not legally or morally allowable and, last but not least, the principles are not universally applicable. Taylor says incentives make people work harder and better, Fayol suggests unity of command and direction will deliver results.

But do these principles hold true in all situations and at all times? No, because for most people survival—even pros­pering—is not enough. Their security, social and self-actualization needs, even at times physiological needs, are different in each case. A top boss in a multinational finance firm will barter away investment secrets of his firm for dollars, but a worker will fast until death to secure justice to his fellow-workers.

Result—No Single Unified Theory; only a ‘Management Theory Jungle’:

Lack of precision in formulation and universal applicability of management principles has resulted in several approaches to management. In the Post-Industrial Revolution era, these have been called distinct approaches to management and have come to be called “Schools of Management Thought.”

Interestingly, while all Schools explain the nature and content of management, there is diver­gence as regards beliefs, views and presentation of distinct approaches. For example, while some are only modification of traditional approaches, others have developed altogether new approaches.

Further, some schools have broadened the scope of management to cover all or most of the func­tional areas, while others have only concentrated on production, behavioral or decision-making aspects. There are also schools which are eclectic, in the sense that they have borrowed the best from many schools and put forward a composite theory.

In 1961, only six Schools of Management were identified, but as of now, the number has shot up to eigh­teen. Koontz has quite rightly described the scenario as “management theory jungle.”

Here, we shall discuss the following schools of management:

1. Classical School or ‘Management Process School’,

2. ‘Scientific Management’ School,

3. Human Relations School,

4. Empirical School,

5. Behavioral School,

6. Organization Behavior School,

7. Socio-Technical Systems School,

8. Decision Theory School,

9. Systems School,

10. Management Science School, and

11. Contingency or Situational School.

1. ‘Classical School’ or ‘Management Process School’:

Theory Based on Research and Experiences of Management Experts:

The Classical or ‘Management Process School’ of Management derives its approach from the researches and actual work experience of management experts like Henry Fayol, James Mooney, Mary Parker Follet, Luther Gullick, Lyndall Urwick, Oliver Sheldon, and E.F.L. Brech. Their principles constitute an important part of literature on principles and practice of management. Quite a few of them are still followed by organizations the world over.

Basic Principles:

(a) Scalar Chain:

It is the fore-runner of the hierarchy principle under which authority is delegated from top management of the organization to managers immediately subordinate to them and from them to managers subordinate to them and so on.

(b) Unity of Command:

It means an individual should only receive orders from his immediate boss, and to him alone he should be accountable.

(c) Management by Exception:

It means a superior should delegate maximum authority of deci­sion-making to his subordinate(s) such that he will be called to make decisions only on non-routine, exceptional tasks facing his subordinate(s).

(d) Span of Control or Supervision:

It means a superior should only have a manageable number of subordinates to direct and control.

(e) Development of New, Scientific Methods and Techniques:

It speaks of constant research and experi­ments on development of new scientific techniques and methods to perform tasks and duties.

Evaluation of ‘Classical Theory’:

The Classical School has prescribed a number of principles, rules, and beliefs—some prescriptive, oth­ers descriptive, and still others exhortative. One often comes across words such as “ought to”, “must”, “should” etc. in the definition of these principles.

The main points of criticism against the Classical School are:

(a) There is not enough attention to interactions among workers.

(b) It overlooks the effects of conflict between goals of the formal organization and informal groups.

(c) It does not realize that workers might not be able to correctly process and interpret the infor­mation given to them by the formal organization or co-workers.

(d) Its principles are somewhat naïve, somewhat immature and expressed in a manner that is ambiguous, even at times self-contradictory.

(e) It assumes the manager has authority to direct and control but does not realize this authority might sometimes be challenged.

2. ‘Scientific Management School’:

The chief exponent of ‘Scientific Management School’ was Frederick W. Taylor, whose theory was later developed by Charles Babbage, Robert Owen, and husband-wife team of Gilbreths and Henry Gantt. The subject of study of this School was workers performing routine manual tasks, in other words, shop-floor management.

The focus of ‘Scientific Management School’ is on the organization member, the details of his work behavior and his motivation. It seeks to plan the workers’ movements in the most efficient and least tiring ways. In course of time, this led to time and motion studies by experts, with stop watches and clip boards, to discover the “one best way” to perform every job.

‘Scientific Management School’ worked on promoting—(a) Efficiency, to increase the output per worker, (b) Specialization by division of each task into small specified sub-tasks; and (c) Discipline, by establishing hierarchical authority and a system whereby management’s policy decisions could be carried out.

To accomplish these objectives, Taylor advocated scientific selection and training of workers, stan­dardization of the job, including tools, and material to encourage workers to use “one best way” to perform individual tasks and a piece-rate incentive wage payment system to motivate workers.

Taylor was also for clear division between manual and mental work (functional foremanship), and replacement of the traditional ‘rule-of-thumb’ or ‘hit-or-miss’ approach with scientifically determined practices and procedures.

3. ‘Human Relations School’:

Every Worker needs Company of Like-Minded Fellow-Workers:

The experiments carried out at Hawthorne plant of Western Electric Company, showed that task-ori­ented and incentive-driven approach of Taylor, Fayol and early management experts did not satisfy the tests of effective and efficient management. The conclusions of these experiments led to development ‘Human Relations School’; the leading lights of this approach being Elton Mayo, F.J. Roethlisberger and William J. Dickson.

As ‘Human Relations School’ theorists put it, every worker, by nature, seeks company of like- minded fellow-workers, having similar socio-economic and cultural background. During lunch and tea-breaks they exchange work experiences and gossip. This refreshes and re-energizes them to return to their routine work. Over time, they become an identifiable informal group.

But an informal group has its own norms and it significantly influences the behavior, beliefs, and attitudes of its members. Moreover, its goals may not be the same as—at times even contrary to—those of the formal organiza­tion. So, if the manager holding position of authority in the formal organization knows how to handle informal groups existing within it, he can inculcate positive attitude among them and increase their efficiency and productivity levels.

Principles Formulated by ‘Human Relations School’:

(a) An organization is not a mere formal structure of functions where production takes place as formally prescribed. Workers are social beings and their social characteristics will also deter­mine their output and efficiency.

(b) Informal groups of workers come into existence within the formal organization. These groups determine how their members would behave in the formal organization.

(c) Goals of the formal organization may not always agree with those of the informal groups within it. This may create conflict between the management and workers.

(d) A person who identifies with the goals of informal group will, by common consent, become its leader. He need not hold an authority position in the formal organization.

(e) A manager holding authority-position in formal organization will more likely secure willing cooperation from informal groups, than someone who asserts his formal authority to manage and control them.

(f) Efficient and effective communication between management and workers will enthuse and motivate them to perform efficiently.

4. Empirical School:

Follow the Successful Manager:

The ’empirical school’ has formulated the management principles based on experiences of successful managers. Its basic theme is that if application of a particular policy or strategy by a manager had successfully tackled a business problem or opportunity, then a similar problem or situation facing any manager could also be tackled by applying the same policy or strategy.

‘Empirical School’ owes its establishment to Ernest Dale, though the principles formulated by it are similar to the principles laid down by Taylor and Fayol, both of whom were successful managers in their own right. The only difference is that while Taylor and Fayol perfected their principles based on their own experience, Ernest Dale did it on the basis of experiences of others.

Principles formulated by ‘Empirical School’:

1. Management is basically a study of actual work experiences of successful managers.

2. Management knowledge derived from work experiences can be passed from one manager to another for application in similar work situations.

3. It is possible to make generalizations and develop management principles based on accumu­lated work experiences of several managers.

Evaluation of ‘Empirical School’:

The ’empirical school’ only prescribes a thoroughly conservative approach to management. It assumes that one can acquire knowledge of the principles and practice of management by studying actual work experiences of successful managers. For this reason, it is also called “Case Study Method” of learning management skills. Thus, it is in direct contrast to development of management principles through scientific research and innovation.

However, ’empirical school’ approach has its limitations. First, no two management situations can be exactly alike and, therefore, methods derived from experiences of other managers may not always be suitable to tackle all situations. To paraphrase Harold Koontz, management, unlike law, is not a science based on precedents, and it would be unrealistic to assume that situations in the future would occur exactly as in the past.

Indeed, there is a positive danger in relying too much on past experience and history of problem-solving; there can be no guarantee that a technique or approach that had worked in the past would also be successful in meeting a future situation. In any case, it does not help to develop management principles relying on assorted experiences of past managers. It should be a manager’s prerogative to perceive and determine his own method to solve a problem-situation.

5. Behavioral School:

Combination of Principles and Methods of Various Social Sciences:

‘Behavioral School’ represents parts of principles and practices formulated by various social sciences which have ‘individual’ and ‘group behavior’ as their subject of study. Study of ‘individual behav­ior’ aims at making individual employees better and more responsible persons, while study of ‘group behavior’ focuses on social psychology and organizational behavior.

Among the chief exponents of ‘Behavioral School’ are Chester Barnard, Douglas McGregor, Keith Davis and David A. Buchanan.

Chester Barnard’s Theory:

Chester Barnard says, “An organization is a system of consciously coordinated activities or forces of two or more persons. For efficient operations and, in fact, for the very survival of the organiza­tion, a balance between inducements and contributions was essential.” By ‘inducements’ he meant the sum-total of financial and non-financial rewards made available to employees and by ‘contributions’ the efforts put in by employees for achievement of organizational goals.

Thus, an organization would survive and grow only it strikes neat balance between organizational goals and needs and goals of employees working for it. Barnard also formulated what later came to be known as acceptance theory of authority, which means that an employee would accept an executive order only when he finds it con­sistent with his own understanding of the goals of the organization and his personal interests and needs.

Douglas McGregor’s ‘X’ and ‘Y’ Theories of Motivation:

Douglas McGregor felt managers of an organization generally hold two assumptions about employees of the organization. Interestingly, these assumptions turn out to be self-fulfilling predictions and find reflection in organization structure and decision-making about employees. McGregor expresses them in two theories, namely, ‘X’ theory, and ‘Y’ theory, each opposed to the other.

‘X’ theory reflects conservative view of management and is full of negative assumptions about average human beings. These are – (a) Average human being has an inherent tendency to shirk work; and, therefore, (b) He must be subject to constant coercion, direction and control to secure desired performance from him. Further, (c) He has little or no ambition, likes avoiding responsibility, and (d) Being risk-averse, he seeks security above all else. If management believes in ‘X’ theory, it would use stick-carrot policy of awarding reward or punishment to workers.

Theory, Y, based on the principles of participation and concern for employee morale, makes follow­ing assumptions – (a) Physical and mental effort comes as naturally to human beings as play and rest; (b) They are self-motivated, self-directed, creative and ingenuous; (c) Completion of assigned tasks is source of satisfaction for them; however, (d) Their commitment to organization objectives depends on rewards given to them; but (e) In the existing scenario, intellectual potential of average workers remains largely untapped.

Evidently, ‘Y’ theory marks significant change in management thinking and behavior; it promotes greater delegation of authority, efforts to make tasks more interesting at lower levels, free flow of com­munications, and opportunities for career-growth to workers.

6. Organization Behavior School:

Focus:

Pioneers of ‘Human Relations School’ only focused on people at work and people working in groups. They did not take into account the organization where they worked and the external environment of organization. This led to development of the concept of ‘organizational behavior’ which represented a more inter-disciplinary and multi-dimensional approach to worker-behavior.

Important features of the theory of organizational behavior are – (a) Scientific data-base to predict and explain organization-behavior and performance; (b) Inter-disciplinary application of behavioral science principles in analyzing and understanding organization-behavior and perfor­mance; (c) Equal emphasis on scientific study of individuals, groups and the formal organization; (d) Contingency orientation, which means managerial behavior must conform to the requirements of a situation and the people involved; and (e) Translation of the theories in a language that practic­ing managers may understand to apply them.

Researchers in organizational behavior made significant contribution as regards motivational techniques, leadership, group and inter-group behavior and task-design.

Evaluation of ‘Behavioral School’:

Pioneers of ‘Human Relations Movement’ and ‘Organizational Behavior’ have helped practicing mangers to acquire better understanding of people at work, people in groups and people in the formal organization.

However, ‘Behavioral School’ tends to over-emphasize the human factor within the organization. While it prescribes the need for human skills on the part of manager, it somewhat sidelines the need for him to be also proficient in several other fields such as production technology, materials management, etc.

7. Socio-Technical Systems School:

Focus:

The development of ‘Socio-Technical Systems School’ owes itself to two major studies carried out by Tavistock researchers, the first focusing on coal mines around Durham in Britain, and the second on a textile mill at Ahmedabad in India.

Summary:

Below, a summary of the findings of the first study:

i. Satisfaction of human needs of a worker—security, affiliation, power, esteem, and control needs—will be only possible if he is part of a group that performs inter-related and inter-dependent activities.

However, there are other conditions that will provide him satisfaction—(a) His task is not repetitive; (b) He has freedom to control his work-standards; (c) He has opportunity to make use of his skills and knowledge; (d) His performance has meaningfully contributed to the making of the end-product; and (e) He has adequate means of communication and opportunities for career-growth.

ii. Division of work can take place irrespective of the nature of technology. Human beings consti­tuting the social system are capable and flexible enough to not depend on the technical system. However, to the extent possible, the organization should be so designed that it meets technical requirements of its members and also satisfies their human needs.

iii. Findings of the second study conducted at Calico Mills of Ahmedabad also show that workers intuitively accept changes in the technical system, the condition being that membership of the work-group should provide them security, protection, and opportunities for career-growth.

8. Decision Theory School:

Focus:

The ‘Decision Theory School’ focuses on decision-making which, in its view, is the core management task, pervading all management functions. Herbert A. Simon, the chief proponent of this School, uses “managing” and “decision-making” as synonymous.

Findings:

The other propositions of ‘Decision Theory School’ are as follows:

1. Every manager is a decision-maker and his level and importance in the hierarchy is deter­mined by the issues on which he has authority to make decisions.

2. Quality of decisions affects the organizational effectiveness.

3. All factors which affect decision-making are the subject-matter of study of management.

Simon has suggested four basic elements (or phases) of the decision-making process, namely—(a) Study of external environment to identify problems or situations that require decision-making to tackle them, in other words, intelligence activity; (b) Inventing, developing, and analyzing possible courses of action, in other words, design activity; (c) Selecting a particular course of action from those available, in other words, choice activity; and (d) Evaluating past choices, in other words, review activity.

Decision-making has three elements, namely the decision, the decision-maker, and the deci­sion-process. Characteristics of the decision-maker and the factors that influence his behavior, and which, in turn, may influence the decision-making process, make it somewhat irrational.

The object should be to introduce increased rationality in the decision-making process, i.e., more logic and less intuition, more reason and less emotion, and more knowledge and less uncertainty. Then alone, the quality of decision-making will improve and achieve organizational effectiveness.

9. Systems Management School:

The ‘Systems School’ represents an integration of the organization and management theory in the pro­cess of evolution of management thought. It views the total organization in interaction with its envi­ronment and conceptualizes relationships among internal components of the organization. Among the exponents of the Systems School are Trist Corsetry, Bamforth, Galbraith and Likert.

Meaning of ‘System’:

A system may be defined as an organized, unitary whole, composed of two or more independent parts, components, or sub-systems, and marked by identifiable boundaries from its environmental supra-system.

Depending on one’s level of analysis, one can view many things as systems, such as, human body, business organization, society, galaxy, etc. We can consider an industry as a system and we can con­sider the national economy as a system. Every system draws inputs from its environment, transforms them in some way, and hands the output back to the environment.

The organization as a system draws its inputs (raw material, energy, information, and human, physical and financial resources) from its environment, then transforms them in various ways, and returns the output to the environment in the form of finished goods and services, residuals (profits) and waste-material.

System, Sub-Systems, Supra-System:

The set of elements that compose a system are called its sub-systems. The larger aggregation of sys­tems, of which each system is a part, is called the supra-system. Thus, if we take an industry as a sys­tem, then the various organizations falling under that industry will become its sub-systems and the national economy will be the supra-system.

If we take the organization as a system, then its production, sales, finance, and personnel departments will be its sub-systems, and the number of organizations within the community, the supra-system.

The sub-systems of any system are all inter-related and inter-dependent as between themselves and in relation to the system as a whole. Thus, the functioning of each department within the orga­nization will be related to, and dependent on, the functioning of other departments as well as the organization as a whole.

Management = Maintenance Activities + Adaptation Activities:

If the organization is a system, then its management may be viewed as the agent concerned with regu­lation and adjusting of the system to secure better performance. The activities performed by manage­ment may be classified as maintenance and adaptation activities.

Maintenance activities are concerned with ensuring the efficiency and stability of the system such as formulation of rules, procedures, etc., and controlling and correcting the performance of different resources within the organization. Adap­tation activities are concerned with adjusting the system to its environment (supra-system), for exam­ple, planning, advertising, etc., or to the organization goals, for example, lobbying for favourable leg­islations, tax concessions, etc.

For efficient and effective functioning of the organization, maintenance and adaptation activities are necessary, and if either of them is missing, the organization may not be able to go far. In fact, the very emergence of ‘System Management School’ owes itself to single-dimensional approach of early think­ers who said management is limited to maintenance and adaptation activities and that supra-system for organizational system only meant its competitors.

‘Systems School’— An Evaluation:

Systems approach is a valuable aid in perception and analysis of the managerial problems in all their aspects. It enables the manager to determine what inputs (human, physical or financial resources) will be necessary to ensure the desired output. Further, proper understanding of the cause-effect relation­ships will facilitate attempts to effectively maintain and adapt the system.

A major drawback of the systems management is that it complicates the work of a manager. Only a computerized brain can disentangle the complex cause-effect relationships between the various sub-systems and system, and the supra-system, and then determine how a change in one part is going to affect the other parts of the system. Secondly, systems notions are quite abstract.

With a number of inter-relations and inter-dependencies, it becomes difficult to determine precisely what to do to affect the system in a particular manner. Last, ‘systems approach’ under-estimates the importance of ‘human factor’ and says it can be manipulated as any other factor of production. This undermines the concept of ‘participative management’ which is fast gaining in popularity all across the world.

10. ‘Management Science’ School:

(1) Solution of Problems through Quantitative Methods:

The ‘Management Science School’ is a post-World War II phenomenon, among its proponents being Churchmen and March and Simon. It recommends solution of problems through quantitative, scien­tific methods. Following the success of military methods in tackling problems, it was decided to repli­cate them in management of a business organization.

(2) Tie-Up between Scientists and Business Decision Makers Benefitted Both:

After the war, the military methods, further developed through research in various social sciences, were applied to solve business management problems. The tie-up between behavioral experts and business managers benefitted both—scientists gained from association with business houses which gave them opportunity to formulate and test their theories, and managers found their decision-mak­ing methods vastly expanded.

Distinction between ‘Management Science School’ and Other Schools:

Decision Making:

“Scientific Management’ School’ is concerned with efficiency of production methods, efficiency of workers and machines, ‘Management Science School’ says efficiency can only be achieved by effective planning and decision making.

Mathematical Models:

A model is a symbolic representation of a real-life situation. It reduces a managerial decision to a mathematical form such that decision making process can be simulated and evaluated before imple­mentation of any decision, Thus, use of a model avoids making physical changes to a system on a trial-and-error basis and overcomes the resulting time and cost limitations.

A model is constructed on the basis of constraints, relations and variables which are assembled in algebraic or logarithmic form, e.g., Profit = Sales revenue—Cost of production, alternatively, P = S – C.

However, usefulness of a model will depend on how well it has been constructed. While it allows the manager to test different values of each variable to arrive at an acceptable solution, he should ensure that all material relationships, limiting factors and variables are represented in it, leaving out nothing; or else it will fail to represent the real-life system, and decision based on it may be risky.

Computer Applications:

‘Management Science School’ owes a great deal to invention of computers which can in seconds pro­vide solutions to complex problems involving large data, and also calculates numerous variations in values.

The School focuses on proper planning and decision-making. It creates mathematical models and tests their effectiveness on the scale of planned criteria, such as cost reduction, return on investment, production schedules, incentive schemes, etc.

Over the years, many operational research techniques have been developed to facilitate scientific planning and decision-making, important among which are breakeven analysis, linear programming, Queuing theory, simulation, Probability, and Regression analysis.

‘Management Science School’— An Evaluation:

Aid to Decision-Making on Planning and Control:

Though of recent origin, ‘Management Science School’ has proved its usefulness in the fields of plan­ning and decision-making. Business and other organizations across the world are increasingly using the methods and techniques developed by it.

No Models to Tackle Problems of ‘Organizing’ and ‘Directing’:

While the School provides mathematical models and techniques to help planning and control func­tions, it has not worked on means to solve issues relating to organizing, staffing, motivation and lead­ership. However, given the feverish pace of its development, days are not far when there will be models to provide solutions even to issues involving prediction and control of human behavior.

Computers only Represent Artificial Intelligence:

Granted that theories of ‘Management Science School’ facilitate decision-making on complex manage­ment issues, but it cannot altogether do away with the human factor that alone has qualities of head and heart; it requires people to work computers, and develop software to provide solutions to specific issues.

11. Contingency School:

New Orientation to Concept of Management:

The contingency approach to management, also called situational approach, gives an entirely new perspective to management thought and practice. It evolved in the 1960’s and questioned established theories of management. It challenged Taylor’s theory of ‘one best way’ to manage and organize, saying this just cannot be.

It said each organization was unique; it faced different situations—con­tingency variables—and needed different means and methods to tackle them. Among important contributors to contingency approach are Joan Woodward (work on production techniques), Blau and Schoenherr (work on size of organizations), Burns and Stalker, and Lawrence and Lorsch (work on economic environment), and Mintzberg (work on manager’s roles).

The main motto of the Contingency School is, “it all depends.”

Contingency Approach Similar to Systems Approach in Many Respects:

Contingency approach to management is in many respects similar to the Systems approach. Both emphasize the view that an organization is a system consisting of many sub-systems, and that it is part of the larger supra-system. Both deal with inter-relationships and inter-dependencies among subsys­tems existing within the organizational system. Also, both emphasize that management of a system involves maintenance and adaptation activities.

However, a major distinction between the systems and the contingency approach is the usage. While the systems approach focuses on the total organizational system, the contingency approach only concentrates on specific relationships. In fact, the contingency approach treats each specific rela­tionship as an inter-dependent unit and examines which combination of variables will make it most effective.

In this sense, contingency approach assumes that the methods, techniques and prescriptions sug­gested by various schools of management cannot effectively work in every situation. It suggests that the effectiveness of various management practices, styles, techniques and functions will vary depend­ing on the particular facts and circumstances of each situation.

This implies that development of man­agement principles and theory has still not reached the stage where definite techniques, methods, styles or functions can be prescribed to meet every conceivable problem-situation.

Determinants of ‘Contingency Approach’:

(1) External and Internal Environment of Organization:

External environment of an organization refers to economic, social, political and technological devel­opments taking place in the external environment and their impact on the organization. Internal envi­ronment refers to technology, tasks and individual or people constraints facing the organization and availability of necessary resources.

(2) Technology Constraints:

Technology means the nature and type of the processes used in production of goods and services. Obviously, there will be differences of technology used by organizations as also the types of goods and services produced by them.

In respect of technology, the two important constraints may be (a) Flexibility as related to changes in external environment, and (b) Nature of inter-dependence between various units within the organi­zation.

In a trading concern, for example, there is little investment on plant and equipment and therefore an inherent flexibility to change its technology in response to new consumer demands. However, in a steel mill with heavy investments in machinery and equipment, change-over to new technology will pose problems.

Inter-dependence between various units may also be a crucial constraint. Where each unit is heavily dependent on the others for supply of materials or services to perform its task, a great degree of coordination is necessary to ensure that deficient performance of one does not affect the performance of other related units.

(3) Task Constraints:

The nature of tasks performed by individual workers may also become a constraint. For example, where tasks are of a routine nature, requiring conformity to prescribed instructions, procedures, poli­cies, etc., the manager will pay greater attention to control than planning.

However, if the tasks are complex and non-routine, and if workers performing them are not required to comply with prescribed standards, the manager will need to concentrate more on planning than control.

(4) Individual or People Constraints:

These constraints relate to competence levels of workers employed by the organization, In this case, the manager must be clear about dominant psychological needs of workers—whether they are moti­vated by higher wages and job security, or by opportunities for development of competence and career growth. He should test their personal abilities, skills and competence levels before taking decisions that will affect the organization.

Evaluation of ‘Contingency School’:

The contingency approach is essentially a situational approach to management. Traditional approaches require managers to be people-centric, rather than task-centric, and the organization structure to be pyramidal, but the contingency approach is not in complete agreement with them.

Rather, it suggests that managers should first determine what specific situations will require han­dling by people-centric managers and pyramidal organization structures. Likewise, while it accepts planning, organizing, directing and control as basic management functions, it emphasizes adjustment and adaptation of each of these functions to current needs of the situation.

For example, while planning is an important management function, it can only be effective if the data and information on which it is based are relevant and reliable. The organization must be goal-oriented but the goals must be deter­mined keeping in view the resource constraints. It is all right for managers to be people-centric, but sometimes a situation may demand that being task-centric may deliver better results.

Thus, contingency approach is realistic and practice-oriented, requiring managers to analyze each situation and decide how best to tackle it. It severely tests all their skills—technical, diagnostic, and decision-making.

However, ‘contingency approach’ is criticized on two counts: First, it lacks theoretical base; faced with a problem-situation the manager has no principles to depend on, he must himself collect all relevant information, analyze it and develop a logical basis for action.

Understandably, this places a taxing burden on him. Second, the “it all depends”, formula only creates confusion in the practice of management. As the manager must think up, analyze and evaluate each of the alternative solutions, he cannot but be confused, both in thought and action.


Schools of Management Thought – 6 Schools of Management Thought

1. The Management Process School:

It considers management as a process of getting things done by people who operate in organised groups. Process analysis provides a conceptual framework for it, and identifies this principles underlying the process. It helps establishing a theory of management.

It regards management as a universal process to be found essentially in business, government, or any other enterprise, and which involves the same process, whether at the level of a chief executive or a foreman, in a given enterprise. It does not, however, ignore the fact that the environment of management differs widely from enterprise-to-enterprise and at different levels of the same enterprise.

The popularly known “traditional” or “universalist” school owes its origin to Henri Fayol. However, Fayol’s work was outshined by his contemporary. Frederick W. Taylor. Barring Fayol, most of the early contributors of this school were preoccupied with the organisation aspect of the management process. This school is founded upon several fundamental beliefs.

Specifically, they are as follows:

i. Management is what management does. It analyses a manager’s functions.

ii. Long experience of managing equips us with some well-distilled principles.

iii. Principles become focal points for useful research both to ascertain their validity and to improve their meaning and application.

iv. Principles provide a useful theory of management,

v. Managing as an art can be improved upon by relying on sound underlying principles.

vi. Principles of management are true even if exceptions or compromises of the “rules” prove effective in a given situation.

There are, of course, many factors which affect a manager’s work effectiveness. Management, though an interdisciplinary study, need not encompass all knowledge in order to serve as a scientific or theoretical foundation for management practice.

The basic approach of this school, then, is to first examine the functions of managers — planning, organising, staffing, directing, and controlling — and extract from these functions certain fundamental principles valid for understanding the complicated practice of management.

Management, though multidimensional, as a process, excludes the entire areas of sociology, economics, biology, psychology, physics, chemistry, and so on. It is not that these disciplines are unimportant and have no bearing on management but merely because no real progress has even been made in science or art without a significant delimitation of knowledge.

Yet, it will be naive to believe that a function which deals with people in their various activities is completely independent of the physical, biological and cultural universe in which they live.

2. The Management Experience School:

As the name indicates, this school stresses the study of the successes and failures of managers in practice. Management is considered a study of experience, sometimes with an intent to draw generalisations but usually as a means of teaching experience and imparting it to the practitioner or student. Teaching management principles with the help of case studies implies the acceptance of the significance of management experience school.

This approach apparently relies upon the premise that of we study the experience of successful managers or the errors made in management or if we, attempt to solve management problems, we will somehow understand and learn to apply the most effective kinds of management techniques.

What to do and what not to do in comparable situations is governed by the case we experience. But management, unlike law, is not based on precedents and no two situations can be exactly identical. What was a right approach in a particular situation in the past may not be so in a situation occurring in the future.

3. The Human Behaviour School:

Since management involves getting things done with and through people, the study of management must revolve round interpersonal relations. Variously named as “human relations”, “leadership”, or “behavioural science” approach, this school brings to bear existing and newly-developed theories, methods, and techniques of the relevant social sciences upon the study of interpersonal and intrapersonal phenomena, ranging widely from personality dynamics of individuals at one extreme to the relations of cultures at the other.

In other words, this school humanises management and pinpoints the principle that where people work in groups to accomplish objectives, “people should understand people”.

The proponents of this school are heavily biased towards psychology, particularly social psychology. Their primary concern is the individual as a socio-psychological being and what motivates him. Those who advocate this approach see human relations not as a part of a manager’s job but consider it as the totality of management.

Those who subscribe to this school project human relations as an art which the manager should understand and practise. Those who advocate this approach consider the manager as a leader and thus make management synonymous with leadership. There are others who restrict management to group dynamics and reduce the term “management” to social psychology.

Undoubtedly, management deals with human behaviour. No one disputes the importance of leadership. But what is controversial is the attempt to equate management with human relations. There is more to management than mere human relations.

4. The Social System School:

Closely resembling the human behaviour school and often confused or intermixed with it is the social system school. Advocates of this school look upon management as a social system, that is, a system of cultural interrelationships. Sometimes, the system is restricted to formal organisation, using the term “organisation”, as equivalent to an enterprise rather than the authority-responsibility relationships used most often in the management theory. In other cases, under this approach, instead of merely the formal organisation, the system of human relations merits study. This approach leans heavily on sociology.

Perhaps this school owes its paternity to Chester Barnard. He developed theory of co­operation grounded in the needs of the individual to solve through cooperation, the biological, physical and social limitations of himself and his environment. Barnard then isolates open set of interrelationships from the total of cooperative system which he defines as “formal organisation”.

It is formal organisation concept covers any cooperative system in which there are persons able to communicate with each other and who are striving towards a common purpose.

The Barnard concept of cooperative system is common to the work of many contributors to the social system school of management. To illustrate, Herbert Simon at one time defined the subject of organisation theory and the nature of human organisation as “systems of interdependent activity encompassing at least several primary groups and usually characterised, at the level of consciousness of participants, by a high degree of rational direction of behaviour towards ends that are objects of common knowledge”.

Simon and others have apparently made a rational extension of the concept of social systems to embrace any cooperative and purposeful group interrelationships or behaviour.

This school has made many remarkable contributions to, the management organisation as a social entity. Subject to all the pressures and conflicts of the cultural environment, it is a productive study for the theorist as well as the practitioner. Basic sociology and analysis of concepts of social systems, though valuable, cannot be considered as management.

5. The Decision Theory School:

Management is most popularly regarded these days as decision making and a manager is considered to be a decision maker. It analyses the decision making process choosing one optimum alternative from the several available — or it isolates those who make decisions or analyses the decisions themselves.

Some consider only the economic aspects of a decision, while others consider even non-economic aspects, mainly of a socio-psychological nature. It owes its genesis to economists and their theory of consumer choice. This school is heavily oriented towards model construction and mathematics.

Initially, the decision theory school confined itself to the evaluation of alternatives. However, now decision making has become a complex process and it considers the entire organisational operation and its environment.

6. The Mathematical School:

Although mathematical methods are ubiquitously used in all schools of management, we have considered the mathematical school as that which regards management as a system of mathematical models and processes. Perhaps the most widely- acknowledged group is that of OR specialists, who prefer to call themselves “management scientists.”

The management process, like mathematics by virtue of its logical character, can be expressed in terms of mathematical symbols and relationships. The central approach of this school is the model which is an abstraction of reality in terms of a few variables, whose interrelationships are sought to be established by a mathematical process.

No one doubts the utility of a mathematical approach to any field of inquiry. It identifies the problem area. It conveniently allows the insertion of symbols for unknown data, and its logical methodology, developed over the years, by scientific application and abstraction, provides a potent tool for solving or simplifying complex phenomena.

But it is hard to acknowledge the mathematical school as a really separate school of management theory; it is at best a management tool or an aid to management.


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