Schools of Management Thought – Approaches/Theories – BBA Notes/MBA Notes

Schools of Management Thought

(ii) The Management Process School

The management process school regards management as the process of getting things done with and through people as individuals and as members of work-groups. It holds that management is a process which can best be understood by analyzing its functions. It uses the managerial experience as the basis for developing certain generalizations or principles which can be further used for the study and research of management as well as for improving the practice of management. It also regards management as a universal process, applicable to all kinds of enterprises and to all levels of management.
The first proponent of the management process school was Henri Fayol. His ideas on management have been subsumed as the Administrative Management Theory, which later evolved into the Management Process School.
A contemporary of Taylor, Fayol attempted a systematic analysis of the overall management process. His principles of general management were first published in 1916 in French under the title, “Administration Industrielle et Generate”. It was included in a collection of papers by Gulick and Urwick and later published in English language under the title. General and Industrial Management in 1949. His ideas mark an important landmark in the development of modern management theory.

Fayol identified five functions of management :
(i) planning
(ii) organization
(iii) command
(iv) coordination, and
(v) control.

He regarded planning as the most crucial function.

Fayol’s 14 Principles of Management

Henry Fayol (1841-1925) was a French mining engineer ;  director of mines who developed   general theory of business administration. He was the most influential

contributor to modern concept of management. He proposed the five primary functions of management (Planning, Organising, Controlling, Directing, Coordination). And also given the 14 principles of Management.

1.Division of Work

• Division of work in the management process produces increased and improved performance with the same effect.
• Different functions of management cannot be performed by a single manger efficiently.
• So, different works should be allocated to different different managers who are specialist in that.

2. Authority and Responsibility

• Formal authority is derived from the official position of a manager. It refers to the power to give the commands to the subordinates.
• Responsibility refers to be responsible for the effects of decision taken or activities performed by a manager.

3. Discipline

• Discipline is necessary for the smooth functioning of a business.
• These are rules and regulation established for smooth functioning of organisation.
• The measures of maintaining discipline are transparency, regularity, unbiased and rational approach.

4.Unity of Command

• Every employee should receive orders only from one superior. There should be clear cut chain of command.
• There may be hierarchy of management level but a manager at superior level should not give commands directly to the worker.
• It must be given through proper channel.

5. Unity of Direction

• Unity of directions means complete congruency between individual and organisational goals on the one hand whereas between departmental and organisational goals on the other.

6.Subordination of Individual(Interest to General Interest)

• In a firm, an individual is concerned with making the most of his own satisfaction through more money, recognition, status, etc. but Fayol told that organisational or general in interest are more important.
• If something is more beneficial for organisational point of view that must be considered.

7. Remuneration

• The remuneration paid to the employees of the firm should be fair and with no discrimination in terms of sex, colour, caste, creed or region.
• It should be based on general business conditions, cost of living, productivity and efficiency of the concerned employees and the capacity of the firm to pay.
• Just fair and adequate remuneration increases employee effectiveness and confidence which maintains good relations between them and the management.
• If the compensation is not sufficient, it will lead to dissatisfaction and employee relinquishment.

8. Centralisation

• Centralisation refers to concentration of decision -making power at the top level of management, whereas decentralization refers to giving decision making power at low level of management.
• If subordinates are given a great role and importance in the management and organisation of the firm, it is known as decentralisation but if they are given a small role and importance, it is known as centralisation.
• The management must decide the degree of a centralisation or decentralisation of authority based on the nature of the circumstances, size of the undertaking, the category of activities and the characteristics of the organisational structure.
• The objective should be to make optimum utilization of all the human resource available.

9. Scalar Chain

• This principle states that the orders or communications should pass through proper channels of authority in a hierarchy along the scalar chain.
• Gang Plank – Fayol has suggested that in case of emergency, an employee can communicate with another employee in the same rank to avoid delay in communication. This is known as gang plank. It is supposed to be an exception of gang plank. A is at the top having B and L as immediate subordinate . B and L are having immediate subordinate C and M and so on. The communication flows from A to B to C to D while coming from top to bottom. Now if information has to be communicated from C to M it must flow from C to B to A to L and them to M. Fayol suggested that the scalar chain system take time and therefore it must be substituted by gang plank which is shown in the form of dotted line in the figure below. So, Gang plank is temporary arrangement between 2 different points to facilitate quick and easy communication.

10. Order

• It takes time to put things in order. So, the management must bring about order, harmony and regulation in work through appropriate organization.
• The principle “Right place for everything and for every man” and everything should be at its place has to be observed. To follow this principle it is important to select competent personnel, right assessment of duties to employees and good organization.

11. Equity

Equity is combination of justice and kindness. Equity in treatment and behavior is liked by everyone and it brings loyalty in the organization. The application of equality requires good sense, experience, and good nature for soliciting loyalty and devotion from subordinate.

12. Stability of Tenure of Personnel

• Fayol suggested that the employees must be given sufficient time to prove their ability and their jobs or roles which should not be changed frequency.
• In order to motivate workers to perform additional and improved quality and quantity of work, it is necessary to assure them of their jobs.
• If they have a fear of insecurity of their job, their morale will be low and they cannot deliver sufficient quality and quantity of work.

13. Initiative

Within the limits of authority and discipline, managers should encourage their employees for taking initiative. In Initiative is concerned with thinking out and execution of a plan. Initiative increases zeal and energy on the part of human beings.

14. Espirit de’ Corps

This is the principle of “union is strength” and extension of unity of command for establishing team work. The manager should encourage esprit de corps among his employees. The erring employees should be set right by oral directions and not by demanding written explanations. Written explanations complicate the matters.

Contribution  of Taylor and Fayol

Similarities

• Both attempted to overcome managerial problems in a systematic way.
• Both emphasized that anagement actions will be effective if based on sound principles.
• Management qualities may be acquired by training.
• Harmonious relationship between management and workers.

Dissimilarities

	Taylor	Fayol
1	Shop floor level.	Higher management level.
2	Efficiency    through    work simplification and standardization.	Overall efficiency by observing certain objectives.
3	Production and engineering.	Managerial functions.
4	Scientific  observation   and measurement.	Personal experience.
5	Basis for accomplishment on the production line.	Systematic theory of management.

When professional managers appeared in the 1930’s, administrative management thought acquired a broader perspective, and came to be regarded as the Management Process School. Significant contributions were made to organization theory during this period. James D. Mooney and Alan C. Reiley elaborated further the principles of management propounded by Fayol. Drawing on their experience with General Motors, they viewed unity of direction as the basic principle underlying organizational effort, and advocated three subordinate principles :
(i) the scalar principle, which focuses on delegation that creates a chain of command throughout the organization,
(ii) the functional principle based on specialization, and
(iii) line and staff based on the need of specialized staff advice and support to line managers.

R.C. Davis focused on the importance of planning as a managerial function. He identified business objectives as profit and service. Management must plan, organize and control for the achievement of these objectives.”

Mary Parker Follet proposed four principles of organization, all emphasizing coordination :
(i) coordination by direct contact among managers,
(ii) coordination in early stages of management process,
(iii) coordination as a way of relating managerial decisions to situations, and
(iv) coordination as a continuing process.

Her first principle of coordination resembles Fayol’s concept of gangplank. Her second principle advocates that managers involved in interdependent activities should discuss their respective plans with their counterpans before finalising them, so, as to reconcile divergent viewpoints. She vigorously advocated that “integration of organizational conflict’’ depends on reciprocal adjustment of conflicting needs, interests and viewpoints in early stages. Her third principle is based on her views that authority automatically goes with the job and the situation, rather than the person. Workers and managers should, therefore, take orders from the situation. In her last principle of coordination, she focused on organizational change in response to changes in surrounding situation. Thus, coordination is a continuous process.
Luther Gulick and Lyndall Urwick” identified seven functions of management including planning, organizing, staffing, directing, coordinating, reporting and budgeting (POSDCORB). These functions have been discussed in detail in Chapter 1. Oliver Sheldon distinguished between administration (top policy making) and management (execution of policy). In his view, administration represented the owners and, therefore, concerned itself mainly with “policy making” and, establishment of “organization” for the enterprise. He emphasized that organization is a mechanism for the performance of managerial functions. Administration also performs the general control function. Management performs the functions of leadership, operative planning, and control within the framework of objectives and policies laid down by the administration. It is responsible for attaining the enterprise objectives set by the administration.