Introduction

According to one school of thought, history has no relevance to the problems faced by managers today. Some are also of the opinion that management theory is too abstract to be of any practical use. However, both theory and history are indispensable tools for managing contemporary organizations.

Like most modern disciplines, contemporary management thought has its foundations in the history of management and the many significant contributions of theorists and practitioners. A theory is a conceptual framework for organizing knowledge that provides a blueprint for various courses of action. Hence, an awareness and understanding of important historical developments and theories propounded by early thinkers is important for today's managers.

Classical approach

Classical management thought can be divided into three separate schools: scientific management, administrative theory and bureaucratic management. Classical theorists formulated principles for setting up and managing organizations. These views are labeled "classical" because they form the foundation for the field of management thought. The major contributors to the three schools of management thought -scientific management, administrative theory and bureaucratic management — are Frederick W. Taylor, Henry Fayol and Max Weber respectively. Below table gives a brief overview of the classical theories in management thought.

A. Scientific Management

Scientific management became increasingly popular in the early 1900s. In the early19 century, scientific management was defined as "that kind of management which conducts a business or affairs by standards established, by facts or truths gained through systematic observation, experiment, or reasoning." In other words, it is a classical management approach that emphasizes the scientific study of work methods to improve the efficiency of the workers. Some of the earliest advocates of scientific management were Frederick W. Taylor (1856-1915), Frank Gilbreth (1868-1924), Lillian Gilbreth (1878-1972), and Henry Gantt (1861-1919).

a. Frederick Winslow Taylor

Frederick Winslow Taylor took up Henry Towne's challenge to develop principles of scientific management. Taylor, considered "father of scientific management", wrote The Principles of Scientific Management in 1911. An engineer and inventor, Taylor first began to experiment with new managerial concepts in 1878 while employed at the Midvale Steel Co. At Midvale, his rise from laborer to chief engineer within 6 years gave him the opportunity to tackle a grave issue faced by the organization - the soldiering problem. 'Soldiering' refers to the practice of employees deliberately working at a pace slower than their capabilities. According to Taylor, workers indulge in soldiering for three main reasons:

• Workers feared that if they increased their productivity, other workers would lose their jobs.

• Faulty wage systems employed by the organization encouraged them to work at a slow pace.

• Outdated methods of working handed down from generation to generation led to a great deal of wasted efforts.

Taylor felt that the soldiering problem could be eliminated by developing a science of management. The scientific management approach involved using scientific methods to determine how a task should be done instead of depending on the previous experiences of the concerned worker.

 Description

• Develop a science for each element of the job to replace old rule of thumb methods.

• Scientifically select employees and then train them to do the job as described in Step 1.

• Supervise employees to make sure they follow the prescribed methods for performing their jobs.

• Continue to plan the work but use workers to actually get the work done.

In essence, scientific management as propounded by Taylor emphasizes:

• Need for developing a scientific way of performing each job.

• Training and preparing workers to perform that particular job.

• Establishing harmonious relations between management and workers so that the job is performed in the desired way.

The two major managerial practices that emerged from Taylor's approach to management are the piece-rate incentive system and the time-and-motion study.

Piece-rate incentive system:

Taylor felt that the wage system was one of the major reasons for soldiering. To resolve this problem, he advocated the use of a piece-rate incentive system. The aim of this system was to reward the worker who produced the maximum output. Under this system, a worker who met the established standards of performance would earn the basic wage rate set by management. If the worker's output exceeded the set target, his wages would increase proportionately. The piece-rate system, according to Taylor, would motivate workers to produce more and thus help the organization perform better.

Time and motion study:

Taylor tried to determine the best way to perform each and every job. To do so, he introduced a method called "time-and-motion" study. In a "time-and-motion" study, jobs are broken down into various small tasks or motions and unnecessary motions are removed to find out the best way of doing a job. Then each part of the job is studied to find out the expected amount of goods that can be produced each day. The objective of a time-and-motion analysis is to ascertain a simpler, easier and better way of performing a work or job.

b. Frank and Lillian Gilbreth

After Taylor, Frank and Lillian Gilbreth made numerous contributions to the concept of scientific management. Frank Gilbreth (1868-1924) is considered the "father of motion study." Lillian Gilbreth (1878-1972) was associated with the research pertaining to motion studies. Motion study involves finding out the best sequence and minimum number of motions needed to complete a task. Frank and Lillian Gilbreth were mainly involved in exploring new ways for eliminating unnecessary motions and reducing work fatigue.

The Gilbreths devised a classification scheme to label seventeen basic hand motions such as "search," "select," "position," and "hold" - which they used to study tasks in a number of industries. These 17 motions, which they called “therbligs” (Gilbreth spelled backward with the ‘t’ and 'h' transposed), allowed them to analyze the exact elements of a worker's hand movements. Frank Gilbreth also developed the micromotion study. A motion picture camera and a clock marked off in hundredths of seconds were used to study motions made by workers as they performed their tasks. He is best known for his experiments in reducing the number of motions in bricklaying. By carefully analyzing the bricklayer's job, he was able to reduce the motion involved in bricklaying from 181/2 to 4. Using his approach, workers increased the number of bricks laid per day from 1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves.

Lillian's doctoral thesis (published in the early 1900s as The Psychology of Management) was one of the earliest works which applied the findings of psychology to the management of organizations. She had great interest in the human implications of scientific management and focused her attention on designing methods for improving the efficiency of workers. She continued her innovative work even after Frank's death in 1924, and became a professor of management at Purdue University. Lillian was the first woman to gain eminence as a major contributor to the development of management as a science. In recognition of her contributions to scientific management, she received twenty-two honorary degrees.

c. Henry Laurence Gantt

Henry L. Gantt (1861-1919) was a close associate of Taylor at Midvale and Bethlehem Steel. Gantt later became an independent consultant and made several contributions to the field of management. He is probably best remembered for his work on the task-and-bonus system and the Gantt chart. Under Gantt's incentive plan, if the worker completed the work fast, i.e. in less than the standard time, he received a bonus. He also introduced an incentive plan for foremen, who would be paid a bonus for every worker who reached the daily standard. If all the workers under a foreman reached the daily standard, he would receive an extra bonus. Gantt felt that this system would motivate foremen to train workers to perform their tasks efficiently.

The Gantt Chart (see Figure 2.1) is still used today by many organizations. It is a simple chart that compares actual and planned performances. The Gantt chart was the first simple visual device to maintain production control. The chart indicates the progress of production in terms of time rather than quantity. Along the horizontal am of the chart, time, work scheduled and work completed are shown. The vertical axis identifies the individuals and machines assigned to these work schedules. The Gantt  chart in Figure 2.1 compares a firm's scheduled output and expected completion dates to what was actually produced during the year. Gantt's charting procedures were precursors of today's program evaluation and review techniques.

Limitations of scientific management

Scientific management has provided many valuable insights in the development of management thought. In spite of the numerous contributions it made, there are a few limitations of scientific management. They are:

• The principles of scientific management revolve round problems at the operational level and do not focus on the management of an organization from a manager's point of view. These principles focus on the solutions of problems from an engineering point of view.

• The proponents of scientific management were of the opinion that people were "rational" and were motivated primarily by the desire for material gain. Taylor and his followers overlooked the social needs of workers and overemphasized their economic and physical needs.

• Scientific   management   theorists   also   ignored   the   human   desire   for job satisfaction. Since workers are more likely to go on strike over factors like working conditions and job content (the job itself) rather than salary, principles of scientific management, which were based on the "rational worker" model, became increasingly ineffective.

B. Bureaucratic Management

Bureaucratic management, one of the schools of classical management, emphasizes the need for organizations to function on a rational basis. Weber (1864-1920), a contemporary of Fayol, was one of the major contributors to this school of thought. He observed that nepotism (hiring of relatives regardless of their competence) was prevalent in most organizations. Weber felt that nepotism was grossly unjust and hindered the progress of individuals. He therefore identified the characteristics of an ideal bureaucracy to show how large organizations should be run. The term "bureaucracy" (derived from the German buro, meaning office) referred to organizations that operated on a rational basis. According to Weber, "a bureaucracy is a highly structured, formalized, and impersonal organization." In other words, it is a formal organization structure with a set of rules and regulations. The characteristics of Weber's ideal bureaucratic structure are outlined in following table. These characteristics would exist to a greater degree in "ideal" organizations and to a lesser degree in other, less perfect organizations.

The term "bureaucracy" is sometimes used to denote red tapism and too many rules. However, the bureaucratic characteristics of organizations outlined by Weber have certain advantages. They help remove ambiguities and inefficiencies that characterize many organizations. In addition, they undermine the culture of patronage that he saw in many organizations.

C. Administrative Management

While the proponents of scientific management developed principles that could help workers perform their tasks more efficiently, another classical theory - the administrative management theory - focused on principles that could be used by managers to coordinate the internal activities of organizations. The most prominent of the administrative theorists was Henri Fayol.

a. Henri Fayol

French industrialist Henri Fayol (1841-1925), a prominent European management theorist, developed a general theory of management. Fayol believed that "with scientific forecasting and proper methods of management, satisfactory results were inevitable." Fayol was unknown to American managers and scholars until his most important work, General and Industrial Management, was translated into English in 1949. Many of the managerial concepts that we take for granted today were first articulated by Fayol.

According to Fayol, the business operations of an organization could be divided into six activities

• Technical: Producing and manufacturing products

• Commercial: Buying, selling and exchange

• Financial: Search for optimal use of capital

• Security: Protecting employees and property

• Accounting: Recording and taking stock of costs, profits, and liabilities, maintaining balance sheets, and compiling statistics.

• Managerial: Planning,   organizing,   commanding,   coordinating   and controlling

Fayol focused on the last activity, managerial activity. Within this, he identified fivemajor functions: planning, organizing, commanding, coordinating and controlling. Fayol's five management functions are clearly similar to the modem management functions - planning, organizing, staffing, leading and controlling. Fayol's concept of management forms the cornerstone of contemporary management theory.

Fayol outlined fourteen principles of management

1) Division of work

Work specialization results  in improving  efficiency of operations. The concept of division of work can be applied to both managerial and technical functions.

2) Authority and responsibility

Authority is defined as "the right to give orders and the power to exact obedience." Authority can be formal or personal. Formal authority is derived from one's official position and personal authority is derived from factors like intelligence and experience. Authority and responsibility go hand-in-hand. When a manager exercises authority, he should be held responsible for getting the work done in the desired manner.

3) Discipline

Discipline is vital for running an organization smoothly. It involves obedience to authority, adherence to rules, respect for superiors and dedication to one's job.

4)Unity of command

Each employee should receive orders or instructions from one superior only.

5) Unity of direction

Activities should be organized in such a way that they all come under one plan and are supervised by only one person.

6) Subordination of the individual interest to the general interest

Individual interests should not take precedence over the goals of the organization.

7) Remuneration

The compensation paid to employees should be fair and based on factors like business conditions, cost of living, productivity of employees and the ability of the firm to pay.

8) Centralization

Depending on the situation, an organization should adopt a centralized or decentralized approach to make optimum use of its personnel.

9) Scalar chain

This refers to the chain of authority that extends from the top to the bottom of an organization. The scalar chain defines the communication path in an organization.

10) Order

This refers to both material and social order in organizations. Material order indicates that everything is kept in the right place to facilitate the smooth coordination of work activities. Similarly, social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization).

11) Equity

All employees should be treated fairly. A manager should treat all employees in the same manner without prejudice.

12) Stability of tenure of personnel

A high labor turnover should be prevented and managers should motivate their employees to do a better job.

13) Initiative

Employees should be encouraged to give suggestions and develop new and better work practices.

14) Espirit de corps

This means "a sense of union." Management must inculcate a team spirit in its employees.

Behavioral Approach

The behavioral school of management emphasized what the classical theorists ignored - the human element. While classical theorists viewed the organization from a production point of view, the behavioral theorists viewed it from the individual's point of view. The behavioral approach to management emphasized individual attitudes and behaviors and group processes, and recognized the significance of behavioral processes in the workplace. Table below gives an overview of the key contributions to management theory by the behavioral management school of thought.

A. Group Influences

Parker Follet

Mary Parker Follet (1868-1933) made important contributions to the field of human resource management. Though Follet worked during the scientific management era, she understood the significance of the human element in organizations. She gave much more importance to the functioning of groups in the workplace than did classical theorists. Follet argued that organizational participants were influenced by the groups within which they worked.

Follet recognized the critical role managers play in bringing about the kind of constructive change that enables organizations to function. She suggested that organizations function on the principle of "power with" rather than "power over." Power, according to Follet, was the ability to influence and bring about a change. She argued that power should not be based on hierarchy; instead, it should be based on cooperation and should involve both superiors and subordinates. In other words, she advocated 'power sharing.'

Follet also advocated the concept of integration, which involves finding a solution acceptable to all group members. She believed that managers should be responsible for keeping a group together and ensuring that organizational objectives are achieved through group interaction. Her humanistic ideas have influenced the way we look at motivation, leadership, teamwork, power and authority.

B. Hawthorne Studies

Elton Mayo

Elton Mayo (1880-1949), the "Father of the Human Relations Approach," led the team which conducted a study at Western Electric's Hawthorne Plant between 1927 and 1933 to evaluate the attitudes and psychological reactions of workers in on-the-job situations. The researchers and scholars associated with the Hawthorne experiments were Elton Mayo, Fritz Roemlisberger, T.N. Whitehead and William Dickson. The National Research Council sponsored this research in cooperation with the Western Electric Company. The study was started in 1924 by Western Electric's industrial engineers to examine the impact of illumination levels on worker productivity. Eventually the study was extended through the early 1930s. The experiments were conducted in four phases:

a. Illumination experiments

b. Relay assembly test room experiments

c. Interview phase

d. Bank wiring observation room experiments

a. Illumination experiments

These experiments, initiated by Western Electric's industrial engineers, took place between 1924 and 1927. These experiments involved manipulating the illumination for one group of workers (called the experimental or test group) and comparing their subsequent productivity with the productivity of another group (the control group) for whom the illumination was not changed. The results of the experiments were ambiguous. For the test group, performance improved as the intensity of the light increased. The result was expected. However, the performance of the test group rose steadily even when the illumination for the group was made so dim that the workers could hardly see. To compound the mystery, the control group's productivity also tended to rise as the test group's lighting conditions were altered, even though the control group experienced no changes in illumination. Since there was a rise in performance in both groups, the researchers concluded that group productivity was not directly related to illumination intensity. Something besides lighting was influencing their performance.

At this point of the Hawthorne Experiments, researchers from Harvard University, under the guidance of Elton Mayo, were invited to participate in conducting the next phase of experiments.

b. Relay assembly test room experiments

A second set of experiments took place between 1927 and 1933. In this phase, researchers were concerned about working conditions such as number of work hours, frequency and duration of rest periods. The researchers selected six women for the experiments. These women worked in the relay assembly test room, assembling a small device called an electrical relay. The participants were informed beforehand about the experiments. In the course of the experiments, a number of variables were altered in the room: wages were increased; rest periods of varying lengths were introduced; the duration of work was shortened. The workers were also granted certain privileges such as leaving their workstation without obtaining permission. These workers received special attention from the researchers and company officials.

Generally, productivity increased over the period of the study, regardless of how the factors under consideration were manipulated. The Harvard University group ultimately concluded that better treatment of employees made them more productive. These experiments recognized the importance of social relations among participants.

Since there was no formal supervisor (only the observer was present), the participant experienced more freedom and a feeling of importance because they were consulted on proposed changes. The researchers concluded that employees would work better if management were concerned about their welfare and supervisors paid special attention to them. One of the findings of the study was the identification of the concept which came to be described as the 'Hawthorne effect.' The Hawthorne effect is defined as the possibility that individuals picked up to participate in a study may show higher productivity only because of the added attention they receive from the researchers rather than any other factor being tested in the study.

c. Interview phase

During the course of the experiments, about 21,000 people were interviewed over a three-year period - between 1928 and 1930 - to explore the reasons for human behavior at work. All the employees in the Hawthorne plant were interviewed. The generalizations drawn from these interviews are given below:

• A complaint is not necessarily an objective recital of facts; it can also be a symptom of personal disturbance, the cause of which may be deep-seated.

• Objects, persons and events carry social meaning. Their relation to employee satisfaction or dissatisfaction is purely based on the employee's personal situation and how he perceives them.

• The personal situation of the worker is a configuration of relationships. This configuration consists of a personal reference and a social reference. While personal reference pertains to a person's sentiments, desires, and interests, social reference pertains to the person's past and present interpersonal relations.

• The position or status of the worker in the company is a reference from which the worker assigns meaning and value to the events, objects, and features of his environment, such as hours of work, wages etc.

• The social organization of the company represents a system of values from which the worker derives satisfaction or dissatisfaction according to his perception of his social status and the expected social rewards.

• The social demands of the worker are influenced by social experiences in group both inside and outside the workplace.

d. Bank wiring observation room experiments

These experiments were undertaken by researchers to test some of the ideas they had gathered during the interviews. The experiments were conducted during 1931-1932.

The fourteen participants in the experiment were asked to assemble telephone wiring to produce terminal banks. This time no changes were made in the physical working conditions. In the Bank Wiring Observation Room experiments, workers were paid on the basis of an incentive pay plan, under which their pay increased as their output increased. Researchers observed that output stayed at a fairly constant level, which was contrary to their expectations. Their analysis showed that the group encouraged neither too much nor too little work. It seemed they had their own idea of what “a fair day's work" was and enforced it themselves. The test room participants did not behave the way the 'economic man model (this model states that employees are predominantly motivated by money) predicted. Group acceptance appeared to be more important to the worker than money. Thus, these experiments provided some insights into informal social relations within groups.

Contributions of Hawthorne Experiments

The Hawthorne experiments, which laid the foundation for the Human Relations Movement, made significant contributions to the evolution of management theory. Some of the contributions are illustrated in table.

Criticism of Hawthorne Studies

The Hawthorne studies have received considerable criticism. They have been criticized on the following grounds;

1. The procedures, analysis of findings, and the conclusions reached were found to be questionable.  Critics felt that the conclusions were supported by little evidence.

2. The relationship made between the satisfaction or happiness of workers and their productivity was too simplistic.

3. These studies failed to focus attention on the attitudes of employees at the workplace.

C. Maslow's Need Hierarchy 

Abraham Maslow

It was in 1943 a Psychologist Mr. Abraham Harold Maslow suggested his Theory of Human Motivation. His theory is one popular and extensively cited theory of motivation. Maslow's theory is based on the Hierarchy of Human Needs. According to Maslow, human behavior is related to his needs. It is adjusted as per the nature of needs to be satisfied. In hierarchy of needs theory, Maslow identified five types / sets of human need arranged in a hierarchy of their importance and priority. He concluded that when one set of needs is satisfied, it ceases to be a motivating factor. Thereafter, the next set of needs in the hierarchy order takes its place. These needs in hierarchy can be compared to a pyramid. At the lowest level, there will be first set of needs which can be described as basic needs and are universal in character. This will be followed by other sets of needs.

Assumptions in Hierarchy of Needs Theory

Maslow's Assumptions in Hierarchy of Needs Theory are

1. Man is a wanting being, i.e. his wants are growing continuously even when some wants are satisfied. Human needs are of varied and diversified nature. They can be arranged in a hierarchy of importance progressing from a lower to a higher order of needs.

2. Needs have a definite hierarchy of importance. As soon as needs on a lower level are fulfilled, those on the next level will emerge and demand satisfaction. This suggests that bread (food) is essential and is a primary need of every individual. According to Maslow, "Man lives by bread alone when there is no bread." However, he feels the other needs when his physiological needs are fulfilled. In brief, bread is important but man does not live by bread alone. There are other needs (security / safety, social, esteem and self actualization which influence behavior of people (employees) to work. This is the basic feature of Maslow's need hierarchy. Attention to all human needs is essential for motivation of employees. Attention to the provision of bread alone is not adequate for motivating employees. Bread can act as motivating factor when there is no bread but when it is available, its use as motivator comes to an end. Here, other motivators (e.g. security of job, social status, etc.) will have to be introduced for motivating employees. Attention to other needs such as security needs, social needs, esteem needs and self actualization needs is equally important and essential for the motivation of different categories of employees. Maslow, in his theory, has referred to different needs and suggested that attention needs to be given to all such needs as attention to physiological needs alone is not adequate for motivating employees. According to Maslow, "Man does not live by bread alone". This conclusion of Maslow is a practical reality and needs to be given adequate attention while motivating employees.

3. A satisfied need does not act as a motivator.

4. As one need is satisfied, another replaces it.

Maslow's Pyramid of Human Needs

1. Physiological Needs

Physiological needs are the basic needs for sustaining human life. These needs include food, shelter, clothing, rest, air, water, sleep and sexual satisfaction. These basic human needs (also called biological needs) lie at the lowest level in the hierarchy of needs as they have priority over all other needs. These needs cannot be postponed for long. Unless and until these basic physiological needs are satisfied to the required extent, other needs do not motivate an employee. A hungry person, for example, is just not in a position to think of anything else except his hunger or food. According to Maslow, 'man lives by bread alone,' when there is no bread. The management attempts to meet such physiological needs through fair wages.

2. Security / Safety Needs 

These are the needs connected with the psychological fear of loss of job, property, natural calamities or hazards, etc. An employee wants protection from such types of fear. He prefers adequate safety or security in this regard i.e. protection from physical danger, security of job, pension for old age, insurance cover for life, etc. The safety needs come after meeting the physiological needs. Such physiological needs lose their motivational potential when they are satisfied. As a result, safety needs replace them. They begin to manifest themselves and dominate human behavior. Safety needs act as motivational forces only if they are unsatisfied.

3. Social Needs 

An employee is a human being is rightly treated as a social animal. He desires to stay in group. He feels that he should belong to one or the other group and the member of the group should accept him with love and affection. Every person desires to be affiliated to such groups. This is treated as basic social need of an individual. He also feels that he should be loved by the other members. He needs friends and interaction with his friends and superiors of the group such as fellow employees or superiors. Social needs occupy third position in the hierarchy of needs.

4. Esteem Needs

This category of needs include the need to be respected by others, need to be appreciated by others, need to have power and finally prestigious position. Once the previous needs are satisfied, a person feels to be held in esteem both by himself and also by others. Thus, esteem needs are two fold in nature. Self-esteem needs include those for self-confidence, self-respect, competence, etc. The second groups of esteem needs are those related to one's status, reputation, recognition and appreciation by others. This is a type of personal ego which needs to be satisfied. The Organization can satisfy this need (ego) by giving recognition to the good work of employees. Esteem needs do not assume the motivational properties unless the previous needs are satisfied.

5. Self-actualization Needs

This is the highest among the needs in the hierarchy of needs advocated by Maslow. Self-actualization is the desire to become what one is capable of becoming. It is a 'growth' need. A worker must work efficiently if he is to be ultimately happy. Here, a person feels that he should accomplish something in his fife. He wants to utilize his potentials to the maximum extent and desires to become what one is capable of becoming. A person desires to have challenges and achieves something special in his life or in the area of his specialization. Though everyone is capable of self-actualization, many do not reach this stage. This need is fully satisfied rarely.

Limitations of Hierarchy of Needs Theory

Maslow's theory of motivation (Hierarchy of Needs Theory) is very popular all over the world and provides guidelines to managers / managements for motivating employees. However, Maslow's theory has many limitations.

Limitations of Maslow's Hierarchy of Needs Theory are noted below:

1. Maslow's theory is over simplified and is based on human needs only. There is lack of direct cause and effect relationship between need and behavior.

2. The theory has to refer to other motivating factors like expectations, experience and perception.

3. Needs of all employees are not uniform. Many are satisfied only with physiological needs and security of employment.

4. The pattern of hierarchy of needs as suggested by Maslow may not be applicable uniformly to all categories of employees.

5. Maslow's assumption of 'need hierarchy' does not hold good in the present age as each person has plenty of needs to be satisfied, which may not necessarily follow Maslow's need hierarchy.

6. Maslow's theory is widely accepted but there is little empirical evidence to support it. It is largely tentative and untested. His writings are more philosophical than scientific.

Importance of Hierarchy of Needs Theory

Although Maslow's Hierarchy of Needs Theory has been criticized on above grounds, still it holds many advantages or merits. It helps the managers to understand the behavior of their employees. It also helps the managers to provide the right financial and non-financial motivation to their employees. This overall helps to increase the efficiency, productivity and profitability of the organization.

D. Theory X and Theory Y

Douglas McGregor

The eminent psychologist Douglas McGregor (1906-1964) has given his theory of motivation called Theory X and Theory Y. He first presented his theory in a classic article titled 'The Human Side of Enterprise'. Douglas McGregor developed two assumptions about human behavior, which he labeled "Theory X" and "Theory Y." He treated traditional approach to management as 'Theory X' and the professional approach to management as 'Theory Y'. His theory is based on human behavior. According to McGregor, these two theories reflect the two extreme sets of belief that different managers have about their workers. 

Theory X

Theory X presents an essentially negative view of people. Theory X managers assume that workers are lazy, have little ambition, dislike work, want to avoid responsibility and need to be closely directed to make them work effectively.

Theory X is based on traditional assumptions about people (employees). Here, the conventional approach of management is used as a base. It suggests the following features of an average human being/employee (assumptions about human nature):

Assumptions of Theory X

1. The average human being is inherently lazy by nature and desires to work as little as possible. He dislikes the work and will like to avoid it, if he can.

2.  He avoids accepting responsibility and prefers to be led or directed by some other.

3.  He is self-centered and indifferent to organizational needs.

4.  He has little ambition, dislikes responsibility, prefers to be led but wants security.

5.  He is not very intelligent and lacks creativity in solving organizational problems.

6.  He by nature resists to change of any type.

In the case of such employees, self-motivation is just not possible. They will work only when there is constant supervision on them. A manager has to persuade, punish or reward such workers in order to achieve organizational goals.

Theory Y

Theory Y is more positive and presumes that workers can be creative and innovative, are willing to take responsibility, can exercise self-control and can enjoy their work. They generally have higher-level needs which have not been satisfied by the job.

Theory Y is based on modern or progressive or professional approach. Here, the assumptions about people i.e. employees are quite different.

Assumptions of Theory Y

1. Work is as natural as play, provided the work environment is favorable. Work may act as a source of satisfaction or punishment. An average man is not really against doing work.

2. People can be self-directed and creative at work if they are motivated properly.

3. Self-control on the part of people is useful for achieving organizational goal. External control and threats of punishment alone do not bring out efforts towards organizational objectives.

4. People have capacity to exercise imagination and creativity.

5. People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organisations.

6. An average human being learns under proper conditions. He is also willing to accept responsibility.

7. The intellectual capacity of an average human being is utilised partially under the conditions of modern industrial life.

Like Maslow's theory, McGregor's Theory X and Theory Y influenced many practicing managers. These theories helped managers develop new ways of managing the workers. 

E. Model - I Versus Model - II

Chris Argyris

Argyris’ concept of Action Science begins with the study of how human beings design their actions in difficult situations. Human actions are designed to achieve intended consequences and governed by a set of environment variables. How those governing variables are treated in designing actions are the key differences between single-loop learning and double-loop learning. When actions are designed to achieve the intended consequences and to suppress conflict about the governing variables, a single-loop learning cycle usually ensues. On the other hand, when actions are taken, not only to achieve the intended consequences, but also to openly inquire about conflict and to possibly transform the governing variables, both single-loop and double-loop learning cycles usually ensue. (Argyris applies single-loop and double-loop learning concepts not only to personal behaviors but also to organizational behaviors in his models.) 

Model - I

Single- loop learning occurs when a manager responds to a problem with a simple 'application of the rules'

Problem: Budgets are being exceeded

Solution: Cut cost

Argyris uses a thermostat as an analogy for single-loop learning; the thermostat switches the heating on and off in response to temperature changes.

Model - II

Double-loop learning goes beyond this simple feedback response and questions the assumptions on which the response is based. In the thermostat model, the double-loop approach would be to question the validity of the selected temperature. In the example involving exceeded budgets, the double-loop approach would be to check the appropriateness of the budget figure and the basis on which it was calculated.         

Quantative Approach

This theory is also known as “Operations research theory”, "Decision theory”, or “Management science theory”. It became an acceptable theory during World War II when Britain wanted to solve the problems of war. Coordination of different teams of scientists from several fields is one of the main characteristics of this school of management thought. This school utilizes all the scientific techniques and tools for providing a quantitative basis of managerial decisions. It believes that management is a logical process which can be expressed in terms of mathematical symbols and relationships. The main contributors to this school are Taylor, Gilbreth, Gantt, Joel Dean, Newman, Hicks, etc. It is based on the approach of scientific management. It offers systematic and scientific analysis and solution to the problems faced by managers. The quantitative approach aims at achieving high degree of precision, perfection and objectivity by encouraging the use of mathematical and statistical tools for solving complex problems.

Quantitative techniques have become popular because of their wide application in several countries. Linear programming helps in input-output analysis and product mix. Queuing theory helps in inventory control, traffic control, telephone trunking systems and radio communications. Sampling theory helps in profit planning, inventory control and manpower requirement study. Information theory helps in data processing, systems design and organization analysis. Nowadays, computers are being used in solving management problems.

The quantitative approach has provided sharp tools for rational decision making. The mathematical formulation enables practicing managers to discover significant relationships that they could control. This approach provides a rational base for making decisions with precision and perfection. It has been widely used in planning and control.

Operations research is “the application of scientific methods of problems arising from operations involving integrated systems of people, machines and materials". It involves knowledge of inter. disciplinary research team to provide optimum operating solutions. “The quantitative management view point focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness”. The branches of quantitative management are;

1)   Management science

2)   Operations management

3)   Management information systems

A. Management science

“Management science is an approach that aims at increasing decision effectiveness through the use of sophisticated mathematical models and statistical methods”. According to Hodgetts, “The quantitative school, which is also called “Management science school” consists of those theorists who see management as a body of quantitative tools and methodologies designed to aid today’s manager in making the complex decisions related to operations and productions”.

B. Operations management

“Operations management is the function, or field of expertise, that is primarily responsible for managing the production and delivery of an organization’s products and services.” Here, people use quantitative techniques of forecasting inventory analysis, statistical quality control etc., in areas such as inventory management, production planning, storing and selling the final products and similar areas in manufacturing units.

C. Management information systems (MIS)

“MIS is the field of management that focuses on designing and implementing computer-based information systems for use by management.” Large amount of information is quickly processed to help managers in making useful business decisions.

Modern Approaches

A. Systems Theory

Those who advocate a systems view contend that an organization cannot exist in isolation and that management cannot function effectively without considering external environmental factors. Chruchman West is one of the pioneer of systems approach to management. The systems approach gives managers a new way of looking at an organization as a whole and as a part of the larger, external environment.

According to this theory, an organizational system has four major components: inputs, transformation processes, output and feedback. Inputs materials, men, machines and informational sources - are required to produce goods - money, and services. Transformation processes or throughputs - managerial and technical abilities - are used to convert inputs into outputs. Outputs are the products, services. profits and other results produced by the organization. Feedback refers to information about the outcomes and the position of the organization relative to the environment it operates in.

The two basic types of systems are closed and open systems. A system that interacts with its environment is regarded as an open system and a system that does not interact with its environment is considered a closed system. Frederick Taylor, for instance, regarded people and organizations as closed systems. In reality, all organizations are open systems as they are dependent on interactions with their environment. Whether it is a new product decision or a decision related to the employees of the organization, the organization must consider the role and influence of environmental factors. Figure above depicts an open organizational system.

B. Contingency Theory

This is also known as the situational theory. This approach has been widely used in recent years to integrate management theory with the increasing complexity of organizations. According to this theory, there is no one best way to manage all situations. In other words, there is no one best way to manage. The response "It depends" holds good for several management situations.

The contingency approach was developed by managers, consultants, and researchers who tried to apply the concepts of the major schools of management thought to real- life situations. Paul Hersey and Ken Blanchard developed the contingency approach to leadership. Managers, who follow this approach, make business decisions or adopt a particular management style only after carefully considering all situational factors. According to the contingency approach, "The task of managers is to identify which technique will, in a particular situation, under particular circumstances, and at a particular time, best contribute to the attainment of management goals" 

C. Theory Z

William Ouchi, a management expert, conducted research on both American and Japanese management approaches and outlined a new theory called Theory Z. This theory combines the positive aspects of both American and Japanese management styles. The Theory Z approach involves providing job security to employees to ensure their loyalty and long-term association with the company. It also involves job rotation of employees to develop their cross-functional skills. This approach advocates the participation of employees in the decision-making process and emphasizes the use of informal control in the organization along with explicit performance measures. The organization shows concern for its employees' well-being and lays emphasis on their training and development. 

Another approach in the field of management thought that is gaining increasing importance is that of quality management. Quality management is a management approach that directs the efforts of management towards bringing about continuous improvement in product and service quality to achieve higher levels of customer satisfaction and build customer loyalty. To be successful and effective, this approach needs to be integrated with an organization's strategy.