Management Theories..something new or everything recycled????

"An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage"

This quote by Jack Welch summarizes the need for any organization to adapt to changing environment and the same need was the trigger for development of various management theories

 

 

Why management theories

Major changes occurred between late 80s and 1920 that demanded changes to informal and individualistic approaches to social organization.

Population of urban areas increased due to large scale rural immigration which was triggered by declining agricultural work. Consequently large factories and industrial organizations arose and  there was a need for principles that enabled proper implementation of organizational structure.

Relationship between theories

Classical theory of organization was a combination of three fields: scientific management, bureaucratic theory and administrative theory. Workers were considered as a cog in the wheel and an organization was assumed to act in accordance with rationality.

 

Systematic scientific enquiry was used to find out one best way to do the task and money was considered to be the only source of motivation.

Neo classical theories emerged out of the critique to the lack of humaneness of people within organization as per classical theory of organization. Neo classical theory did not develop any comprehensive theory of their own. Rather, they borrowed from many fields and did not attach itself to the notion that it was universally acceptable

 

Features people miss in the theories

Classical theories are criticized for their reductionist approach and it is assumed that they were too simplistic. However, given the complexity of the organizations that existed between 1880s to 1920s, the theorists acted as pioneers who understood the changing work environment and formed the basis of most of the organizations that look for comprehensive principles to be incorporated in organizational structure and vision

 

 

 

Classical theories are criticized for their reductionist approach and it is assumed that they were too simplistic. However, given the complexity of the organizations that existed between 1880s to 1920s, the theorists acted as pioneers who understood the changing work environment and formed the basis of most of the organizations that look for comprehensive principles to be incorporated in organizational structure and vision.

Theories came in a particular sequence ! Is there any logic for this! 

The theories were result of existing demands of the society in different periods.

Classical theories were a response to changing work environment that marked immigration towards cities due to decreased agricultural work and consequent need for comprehensive principles to sustain factories and organizations being established to employ the immigrants

 

Neo Classical theories were a  natural follower as they emphasized the need for giving due consideration to human tendencies of employees which was not visible in classical theories

 

Relevance to the organizations:

 

Despite the appeal to adopt neo classical theory in addressing the human need to control one’s work and motivate oneself, classical theory is still applicable to organizations since the hierarchical structure determines that the most important decisions are made at the top of the organizations and the remaining employees are given limited freedom in terms of contributing to the strategic decision making.

Organizations are largely shaped by classical approach but there is continual tension between classical and neoclassical approach. For instance, an organization may claim to be employee friendly but employees may complain about unnecessary supervision and control.

Understanding the tension between these theories is key to creating a responsible organization capable of addressing the needs of modern society and realize the fact that too often existing theories are recycled and promoted as being innovative principles in organizational management

 

Salient Features of Various Theories:

Taylor’s Scientific Management	Weber’s Bureaucratic Theory	Fayol’s Administrative Theroy
Focussed on individual worker and use of close supervision	Focussed on organizations and developing technical knowledge about the job	Focussed on administration
Developed time and motion studies	Most influential work in the field of bureaucracy	Attached itself to the idea that it was universally acceptable
Assumed that close supervision , rewards and power are key to increased productivity	Emphasized the need for hierarchy and power	Defined 5 Management functions namely: planning, organizing, commanding, coordinating and controlling
Relevant for the organizations in which employee satisfaction takes the backseat	This theory expands on Taylor’s work as it does not dismiss the vision for task specialization	Highly prescriptive and gave 14 management principles based on classical theory of organization