Wednesday, August 18, 2010


By far the most influential person of the time and someone, who has had an impact on management service practice as well as on management thought up to the present day, was F. W. Taylor. Taylor formalized the principles of scientific management, and the fact-finding approach put forward and largely adopted was a replacement for what had been the old rule of thumb.

Fredrick Winslow Taylor, also known as the “Father of Scientific Management”


"The old fashioned dictator does not exist under Scientific Management. The man at the head of the business under Scientific Management is governed by rules and laws which have been developed through hundreds of experiments just as much as the workman is, and the standards developed are equitable."


The four objectives of management under scientific management were as follows:

  • The development of a science for each element of a man's work to replace the old rule-of-thumb methods.
  • The scientific selection, training and development of workers instead of allowing them to choose their own tasks and train themselves as best they could.
  • The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures.
  • The division of work between workers and the management in almost equal shares, each group taking over the work for which it is best fitted instead of the former condition in which responsibility largely rested with the workers. Self-evident in this philosophy are organizations arranged in a hierarchy, systems of abstract rules and impersonal relationships between staff.


This required an organization theory similar for all practical purposes to that advocated by those organizational theorists who followed. These theorists developed principles of management, which included much of Taylor's philosophy

His framework for organization was:

  • clear delineation of authority
  • responsibility
  • separation of planning from operations
  • incentive schemes for workers
  • management by exception
  • task specialization


However, there were problems-Taylor's papers were not always well received, as many of his ideas were associated with bad practice, such as rate-cutting by unscrupulous managers.

In 1911 and 1912 Taylor was questioned at length by a special committee of the US House of Representatives. As a result laws were passed banning the use of stop-watches by civil servants and it was only in 1949 that this restriction was lifted.

Taylor's view of the motivations of workers has had a profound influence throughout the century until the present day. His belief that man was rational and would make economic choices based on the degree of monetary reward led him to devise payment systems that closely related the kind of effort he sought with the level of reward offered.

Not surprisingly, there was strong criticism of this theory that treats human beings like machines and assumes that workers are satisfied by money alone.


His views on motivation, management and organization all presupposed certain conditions to be constant, which we now know, they are not.

The assumptions underlying his work were:

  • the presence of a capitalist system and a money economy, where companies in a free market have as their main objective the improvement of efficiency and the maximization of profit;
  • the Protestant work ethic, that assumes people will work hard and behave rationally to maximize their own income, putting the perceived requirements of their organization before their own personal objectives and goals;
  • that an increased size is desirable in order to obtain the advantages of the division of labor and specialization of tasks.

Taylor's impact has been so great because he developed a concept of work design, work-measurement, production control and other functions, that completely changed the nature of industry. Before scientific management, such departments as work study, personnel, maintenance and quality control did not exist. What was more his methods proved to be very successful.

Classical Organization Theory

Henri Fayol (1841 – 1925)

Around the turn of the century, a Frenchman named Henri Fayol introduced the management world to “systematic management theory”. An executive and mining engineer, Fayol played an important role in the field of management from 1888 until the time of his death in 1925. In Industrial and General Administration, he presented his 14 principles of management and the 5 functions all managers perform. The 14 principles include:

A greater sense of practical realism can be seen in the work of Henri Fayol (1949) who outlined a series of 'principles of management' by which an organization might be effectively controlled.

1. Division of work. Fayol saw specialization as a natural human process, seen in every society. Repetition of the same function brings speed and accuracy, thus increasing output. If work is divided according to skill and technical expertise, each item of work can be given to the employee most able to deal with it.

2. Authority and responsibility. Fayol defined authority as 'the right to give orders and the power to exact obedience.' He emphasized the importance of linking authority to responsibility, which together required increasing judgement and morality at senior levels. He justified higher pay for commercial managers in comparison with senior civil servants since, in his view, the latter exercised authority without responsibility. In general, he concluded that 'responsibility is feared as much as authority is sought after, and fear of responsibility paralyses much initiative and destroys many good qualities.'

3. Discipline. Defined as obedience, application, energy, behavior and outward marks of respect. Fayol regarded discipline as essential for the smooth running of business without which an enterprise is unable to prosper. He attributed discipline to good leadership

4. Unity of command. 'For any action whatsoever, an employee should receive orders from one superior only. Such is the rule of unity of command (...) Should it be violated, authority is undermined, discipline is in jeopardy, order disturbed and stability threatened.' We will find in our later discussion that many modern concepts of organization are totally contradictory to Fayol's principle. Fayol regarded 'dual command' as one of the greatest sins of management, leading to uncertainty and hesitation on the part of subordinates and conflict between managers.

5. Unity of direction. 'One head and one plan for a group having the same objective.'

6. Subordination of individual interests to the general interest. There should be no conflict of interest between individual ambition and the well-being of the organization as a whole. This principle requires a firm but fair hand from superiors who should set a good example. It requires constant supervision.

7. Remuneration of personnel. Fayol looked for some basic principles in the method of payment:

* It shall assure fair remuneration;

* It shall encourage keenness by rewarding well-directed effort;

* It shall not lead to over-payment going beyond reasonable limits.

This remains a contentious area.

8. Centralization. Part of the 'natural order', Fayol considered that an element of centralization must always be present. He regarded the debate between centralization and decentralization to be one which had no precise solution.

9. Scalar chain (line of authority). The unity of command can lead to excessively chains of authority which hinder communication. Hierarchic organizations regularly insisted that departments communicated with each other only through their heads. This meant that the volume of work handled by a department mushroomed as items went up and down the chain in a game of 'pass the parcel'. Fayol rightly condemned this as inefficient and advocated a 'gang plank' arrangement whereby juniors involved in regular interactions with other departments dealt directly with each other, cutting out the hierarchy. Unwittingly, Fayol provided a key to modern organizations which he could not have conceived. As will be seen later, electronic gang planks have become so efficient that networked organizations are possible which no longer have any requirement whatsoever for layers of management.

10. Order. 'A place for everyone and everyone in his place.' For Fayol, this presupposed the resolution of 'the two most difficult managerial activities: good organization and good selection.' He saw the basic problem as the balancing of an organization's requirements with its resources. The larger the business, the more difficult this became:

'when ambition, nepotism, favoritism or merely ignorance, has multiplied positions without good reason or filled them with incompetent employees, much talent and strength of will and more persistence ... are required in order to sweep away abuses and restore order.'

11. Equity. In order to obtain commitment from employees, they must be treated equally and fairly.

12. Stability of tenure of personnel. A matter of proportion, but employees need a period of stability in a job to deliver of their best.

13. Initiative. Being allowed to think through a problem and implement a solution is a rewarding experience which increases motivation. Fayol cautions managers against the personal vanity which prevents them from allowing this opportunity to their subordinates.

14. Esprit de corps. 'Dividing enemy forces to weaken them is clever, but dividing one's own team is a grave sin against the business.'

The Five Functions of Management was the most important of Fayol's six industrial activities (technical, commercial, financial, security, accounting, managerial) and included:

  1. Planning - examining the future and drawing up plans of actions
  2. Organizing - building up the structure (labor and material) of the undertaking
  3. Commanding - maintaining activity among the personnel
  4. Coordinating - unifying and harmonizing activities and efforts
  5. Controlling - seeing that everything occurs in conformity with policies and practices

Fayol carried the management process beyond the basic hierarchical model developed by Taylor. Under Fayol’s system, the command function continued to operate efficiently and effectively through a series of co-ordination and control methods. He recommended regular meetings of department heads and liaison officers to improve co-ordination of organizational operations. He presented his thinking in his work to serve as a model for the educational program he espoused. His work was largely ignored in the U.S. until it was republished in 1949.

Luther Gulick (1892-1992) and Lyndall Urwick (1891-1983)

Luther Gulick was among those who expanded on the works of Henri Fayol to build a foundation for management theory. He viewed management functions as universal. Lyndall Urwick synthesized and consolidated previous writings and research concerning the structure of management and the function of the executive.

Luther Gulick’s seven-activity acronym, POSDCORB, is a familiar word throughout management practice. POSDCORB stands for planning, organizing, staffing, directing, co-ordinating, reporting and budgeting. He wanted to revise administrative practices by the establishment of general rules.

1. PLANNING: the first principle that Gulick proposed was planning based on Fayol’s definition “to foretell the future and to prepare for it” i.e. identifying various activities required to reach the target and arranging them in terms of priorities and sequence. In essence, the human and material resources available to the executive are estimated and the ways to reach the targets ar5e discovered so that goals are achieved in a systematic and efficient manner.

2. ORGANIZING: organizing according to Gulick is the establishment of the formal structure of authority through which work subdivisions are arranged, defined and co-ordinated for achieving the defined objectives. This principle reflects structural traits of the theory and points out that if serious overlapping of functions exists within an organisation, there can be no clear –cut system of formal authority.

3. STAFFING: staffing, as conceived by them, meant ‘Personnel Management’ i.e. the process of attaining training and retaining the competent work force in an organisation.

4. DIRECTING: Directing is the principle according to which the executive should continuously guide the organisation i.e. it is the continuous task of making decisions and embodying them in specific and general orders and instructions and thereby serving as the leader of the enterprise.

5. CO-ORDINATING: it is the most-important activity and is required to interrelate the various parts of the organisation and synchronizing their efforts so that unnecessary duplication is removed. It hence aims at securing timely co-operation between the various units and employees.

6. REPORTING: according to this principle, the executive should keep those, to whom the executive is responsible, informed as to what is going on in the organization so that timely control can be exercised. It thus includes keeping himself and his subordinates informed through records and inspections.

7. BUDGETING: it is the most important principle without which rest of the six principles can achieve nothing. It takes the form of fiscal planning, accounting and financial control.

He agreed with Frederick Taylor in that he believed that certain characteristics of organizations provided administrators with the means to manage effectively. He was in accord with Max Weber in that organizations were hierarchical. Gulick added the concept of span of control, which addressed the factors limiting the number of people a manager could supervise. He also recommended unity of command because he felt that people should know to whom they were responsible. His homogeneity of work centred on the fact that an organization should not combine dissimilar activities in single agencies. This was the basis of Gulick’s major contribution in the area of departmentalization.

Contribution of Mooney and Reiley

James D Mooney and Alan C. Reiley were the first in USA to formulate the classical theory in 1931, when their book Onward Industry was published. Latter, in 1939, they republished the same book under a new title The Principles of Organisation. They opined that the principles formed the basis for efficient functioning of organisation charts and manuals and enunciated four principles:

1. Coordination: Mooney defined coordination as “the orderly arrangement of group effort to provide unity of action in the pursuit of a common purpose”. According to him, “coordination is the first principle of organistaion and includes within itself all other principles which are subordinate to it and through which it operates.” He further observed, “Coordination is no less than the determining principle of organization, the form which contains all other principles, the beginning and the end of all organized efforts.”

2. Scalar Process: Mooney and Reiley emphasized hierarchy in organizational design and called it the ‘scalar processes. To them, it constitutes the universal process of coordination, through which the supreme coordinating authority operates throughout the whole organisation. They stated that the scalar process has its own principle, process and effect. These they referred to as leadership, delegation and functional definition.

3. Functional Differentiation: Mooney and Reiley have suggested that the functional principle should be followed in organizing tasks into departments. According to them,

Functionalism means the differentiation between kinds of duties. This is the concept of division of labour or specialization. They explained it as follows: “The difference between generals and colonels is one of the gradations in authority and is, therefore, scalar. The difference between an officer of infantry and an officer of artillery, however, is functional, because there is distinct difference in the nature of their duties.

Line and Staff: Mooney and Reiley suggested that the line management should be vested with authority to get things done. At the same time, they recognized the role of the staff in providing advice and information. According to Mooney, the staff is “an expansion of the personality of the executive. It means more eyes, more ears and more hands to aid him in forming and carrying out his plans.

Weber's Bureaucratic Approach

Considering the organization as a segment of broader society, Weber (1947) based the concept of the formal organization on the following principles:

· Structure In the organization, positions should be arranged in a hierarchy, each with a particular, established amount of responsibility and authority.

· Specialization Tasks should be distinguished on a functional basis, and then separated according to specialization, each having a separate chain of command.

· Predictability and stability the organization should operate according to a system of procedures consisting of formal rules and regulations.

· Rationality Recruitment and selection of personnel should be impartial.

· Democracy Responsibility and authority should be recognized by designations and not by persons.

Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity, impersonality, displacement of objectives, limitation of categorization, self-perpetuation and empire building, cost of controls, and anxiety to improve status.


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