Compilation of answers we got on the classical theory of management. Also learn about: 1. Classical Management Theory Advantages And Disadvantages 2. Classical Theory Of Management By Taylor
Answer 1. Classical Theory of Management by Taylor:
The term ‘classical’ means something traditionally accepted or long-established. It does not mean that classical views are static and time bound that must be dispensed with.
Some of the elements of classical theory are still with us, in one form or another:
(a) Inter-related functions- Management consists of several inter-related and inter-dependent functions such as planning, organising, staffing, directing and controlling.
(b) Universal principles of management- It is possible to understand, study and practice management quite effortlessly and to facilitate this classical writers (Taylor, Fayol, Weber etc.) developed certain principles—purely based on experience.
(c) Bureaucratic structure- Traditional theory prescribed that organisations be built around work to be done. Work is cut into small parcels and handed over to people having requisite qualifications. The work is supervised and controlled by a common superior following certain rules and regulations.
(d) Reward-punishment nexus- “Follow the rules, obey the orders, show the results and get the rewards” Juicy carrots for those who run the race ahead of others and those who fall behind are severely penalized. Great emphasis was also put on efficient use of resources while producing results.
Surprisingly, the classical theory developed in three streams- Bureaucracy (Weber), Administrative Theory (Fayol), and Scientific Management (Taylor).
Let us examine the classical theory more closely:
1. Bureaucracy:
Max Weber (1864—1920) introduced most of the concepts on bureaucratic organisations. The word bureaucracy implies an organisation characterized by rules, procedures, impersonal relations, and elaborate and fairly rigid hierarchy of authority- responsibility relationships. Weber has provided a number of features of bureaucratic structure.
These are given below:
a. Hierarchy- Hierarchy is a way of ranking various positions in descending order from top to bottom of an organisation.
b. Division of work- The total work is divided into specialised jobs. Each person’s job is broken down into simple, routine and well-defined tasks. Each employee knows his boundaries. By doing the same type of work a number of times, he becomes an expert in course of time.
c. Rules, regulations and procedures- The behaviour of employees is regulated through a set of rules. The emphasis is on consistency. Employees are expected to follow these rules strictly. They have to be applied in an impersonal and objective manner.
d. Records- Proper records have to be kept for everything. Files have to be maintained to record the decisions and activities of the organisation on a day-to-day basis for future use.
e. Impersonal relationships- Everything should proceed according to rules. There is no room for personal involvement, emotions and sentiments. If an employee comes late, whether he is a manager or a peon, the rule must be same for all. The decisions must be governed by rational considerations rather than personal factors.
f. Administrative class- Bureaucracies generally have administrative class responsible for coordinating the work. Known as bureaucrats, these officials are selected (rewarded and promoted) on the basis of their competence and skills.
Advantages and Disadvantages of Bureaucracy:
Advantages:
(1) Specialization- Each member is assigned a specialized task and is able to deliver superior performance over time.
(2) Structure- A structure of form is created by identifying the duties and responsibilities and reporting relationships within a command hierarchy. Structure helps members to know their jurisdictional limits and operate without any friction.
(3) Rationality- Bureaucracy brings rationality to an organisation. Judgments are made according to an objective and generally agreed upon criteria.
(4) Predictability- The rules, regulations, training, specialization, structure and other elements of bureaucracy enable it to provide predictability and stability to an organisation.
(5) Democracy- In bureaucratic organisations, decisions are arrived at according to an acceptable criterion. Rules and regulations bring about consistent behaviour within the organisation. Activities are taken up on a priority basis, according to a time schedule.
(6) People are selected on the basis of merit. Patronage, favouritism and other arbitrary bases are not given weightage. Because the opportunity to train, apply and be selected for a job is open to every citizen, a significant degree of democracy is achieved.
Disadvantages:
(1) Rigidity- Critics of bureaucracy claim that it is rigid, static and inflexible. Strict adherence to rules produces timidity, conservatism and technicism. In the name of following rules, people may even shirk away from their responsibilities.
(2) Impersonality- Bureaucracy emphasizes mechanical way of doing things. Rules and regulations are glorified in place of employee needs and emotions.
(3) Displacement of objectives- As organisational procedures become more formalized and individuals more specialized, means often become confused with ends. Specialists, for example, may concentrate on their own finely tuned goals and forget that their goals are a means for reaching the broader objectives of the organisation.
(4) Compartmentalization of activities- Strict categorization of work restricts people from performing tasks that they are capable of doing. For example, a pipe fitter can install a pump, but is prohibited by work rules from making the electrical connection even if he is totally qualified to do so.
Bureaucracy would also encourage a tendency to perpetuate existing jobs even when they become redundant. The typical bureaucracy tries to preserve all the old jobs and add new ones for new requirements, resulting in wastage of scarce inputs.
(5) Empire-building- Bureaucracies often turn managers into empire builders. They try to enhance their status and power by adding more people, more space, more physical facilities -whether they are required or not.
(6) Red tape- Bureaucracies are paper mills. Everything is recorded on paper. Files move through endless official channels, resulting in inordinate delays. Communication is reduced to a feeble walk.
2. Scientific Management:
F.W. Taylor (1856-1915) an engineer at Bethlehem Steel Company in Pennsylvania, focused on analyzing jobs and redesigning them so that they could be accomplished more efficiently.
As he searched for the best way to maximize performance, he developed scientific management principles, including the following:
Principles of Scientific Management:
I. Each task must be scientifically designed so that it can replace the old, rule- of-thumb methods.
II. Workers must be scientifically selected and trained so that they can be more productive on their jobs.
III. Bring the scientifically designed jobs and workers together so that there will be a match between them.
IV. There must be division of labour and cooperation between management and workers.
Taylor stressed the importance of employee welfare as well as production efficiency. To boost up productivity, wage incentives based on performance (differential piece rate system) were introduced. The emphasis was on maximum output with minimum effort through elimination of waste and inefficiency at the shop floor level.
Techniques of Scientific Management:
(a) Scientific Task Planning:
Scientific task is the amount of work which an average worker can perform during a day under normal working conditions (called as a fair day’s work). Management should decide in advance as to what work is to be done, how, when, where and by whom. The ultimate goal is to see that work is done in a logical sequence promoting maximum efficiency.
(b) Time and Motion Studies:
Time and motion studies have been advocated by Taylor with a view to isolate the wasteful and unproductive motions on the job. The time study would indicate the minimum time required to do a given job. The time taken by workers to do a job is being recorded first and this information is being used to develop a time standard.
Time standard is the period of time that an average worker should take to do a job. Motion study is carried out to find out the best sequence of motions to do a job. Managers, in the end, are charged with the task of planning the work through the above studies and workers are expected to implement the same.
(c) Standardization:
Under scientific management, standards have to be set in advance for the task, materials, work methods, quality, time and cost, working conditions, etc. This helps in simplifying the process of production, reducing wasteful use of resources, improving quality of work etc.
(d) Differential Piece Rate System:
Taylor advocated differential piece rate system based on actual performance of the worker. In this scheme, a worker who completes the normal work gets wages at higher rate per piece than a worker who fails to complete the same within the time limit set by management.
For example, each worker who produced 10 machine nuts (normal work) would be paid the standard wage of Rs. 2 per piece, and those below the normal work may get Rs. 1.5 per piece. Thus, there is considerable difference in wages between those who complete the job and those who do not complete.
Each worker is pitted against every other worker in an unhealthy competitive scheme to make more and earn more. In the long-run, this will have a telling effect on the health of the worker. More damagingly, this scheme would divide the working class permanently.
(e) Functional Foremanship:
In order to achieve better production control, Taylor advocated functional foremanship where the factory is divided into several components, each in charge of a specialist, namely, route clerk, instruction card clerk, cost and time clerk, gang boss, speed boss, inspector, repair boss and shop disciplinarian.
These functional specialists perform the planning function and provide expert advice to workers. They plan the work for employees and help employees in improving results. The workers are expected to implement the commands of functional specialists.
The idea of a divorce between planning and doing function, unfortunately, suggests that workers are incapable of thinking independently.
Contributions and Limitations of Scientific Management:
Contributions:
(1) Efficient and Effective Production Methods:
According to Gilbreths, the primary benefit of scientific management was ‘conservation and saving, making an adequate use of every ounce of energy of any type that is expected’. In the modern assembly line, conveyer belts bring to each employee the parts needed to perform one specific job and they carry the completed work to the next employee on the line.
Specialization and division of labour have brought about the second Industrial Revolution in America and other developing nations. The American production ‘miracle’ is said to be the legacy of scientific management. The time and motion techniques have shown clearly as to how to organize the tasks in a more efficient and rational way.
(2) Rational Way to Solve Organizational Problems:
The role of scientific selection and development of workers in increasing worker effectiveness is also recognised. The stress it placed on work design encouraged managers to pursue the ‘one best way’ philosophy and achieve the tasks with the minimum effort and cost.
Scientific management not only developed a rational approach to solving organisational problems but also pointed the way to the profession- alization of management.
(3) Heroic Figure:
Taylor is regarded as a heroic figure in the history of management because of certain genuine reasons:
(i) He is the first one to advocate planning of work, scientific selection of people, putting right man on the job, rewarding the efforts of employee in adequate measure, waging a war against inefficiency etc.
(ii) He gave a concrete shape to his ideas and reduced managerial thinking to a set of principles that have stood the test of time over the years.
Limitations:
(1) Exploitative Device:
Scientific Management made workers to run a race against time to earn more. The fruits of labour, in the end, were never enjoyed by workers in full measure. The owners enjoyed the party while the workers were shedding their blood.
(2) Depersonalized Work:
Scientific management supplied standardized jobs to workers. Everything was set in a straitjacket. Workers were made to repeat the same operations daily. This produced boredom and monotony. Workers did not like the idea of becoming glorified machine tools.
(3) Un-Psychological:
Taylor’s idea that maximum productivity could be achieved only by employing ‘first class men’ was a deplorable one. Further, adding insult to injury, he did not suggest how the wages had to be paid and how the efficiency of workers could be measured etc.
(4) Undemocratic:
The idea of managers planning the operations and workers implementing the same was a prohibitive practice. In other terms, one group always performed challenging, novel tasks whereas the other one is loaded with boring, routine and standardized jobs. Scientific management, in a way, treated workers as unthinking animals.
(5) Anti-Social:
Scientific Management treated workers as economic tools. They were made to work and work without any interaction.
(6) Unoriginal:
People like Hoagland questioned the originality of Taylor’s ideas and felt that his contribution had been somewhat overrated and overemphasized. Other researchers felt that the report of Taylor on Bethlehem Steel was almost completely a lie.
(7) Unrealistic:
Taylor believed that employees are motivated by material benefits. Current research, however, does not support this contention. Modern employees seek job satisfaction, growth opportunities, challenging work, recognition etc. apart from economic incentives from work.
3. Administrative Theory:
Henry Fayol (1841-1925)—a mining engineer with a French company—was a pioneer in the study of the principles and functions of management. He drew a clear distinction between operating and management activities.
He listed the five major functions of management—planning, coordinating, organizing, controlling and commanding—that help a manager run a business efficiently and effectively. In addition to the five management functions, Fayol also developed 14 principles of management that can be applied in all types, functions, levels and sizes of organizations.
These principles may be listed thus:
Fayol’s 14 Principles of Management:
1. Division of work- Divide work into specialized tasks and assign responsibilities to specific individuals. Specialization increases output by making employees more efficient.
2. Authority and responsibility- Authority is the right to give orders and the power to obtain obedience. Managers must be able to give orders and authority gives them this right.
3. Discipline- Employees must obey and respect the rules that govern the enterprise.
4. Unity of command- An employee should receive commands from only one superior.
5. Unity of direction- The entire organization should be moving towards a common objective in a common direction.
6. Subordination of individual interest to the common good. In any organisation, the interests of employees should not take precedence over the interests of the organisation as a whole.
7. Remuneration of personnel- Compensation for work done should be fair to both employees and employers. Fayol did not favour profit-sharing plan for workers but advocated it for managers.
8. Order- Materials and people should be in the right place at the right time.
9. Centralization- Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is operating.
10. Scalar chain- The graded chain of authority from top to bottom through which all communications flow is termed as ‘scalar chain’. However, if following the chain creates communication delays, cross- communication (gangplank principle) can be permitted, if agreed to by all parties and superiors are kept informed.
11. Equity- Managers should be fair in dealing with employees. Equity is the combination of justice and kindness.
12. Stability of tenure- Management should provide systematic human resource planning and ensure that replacements are available to fill vacancies.
13. Initiative- Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self-direction.
14. Esprit de corps- Management should promote harmony and general good feelings among employees.
Fayol firmly believed that management functions and principles have universal application. He felt that those who acquire a general knowledge of management functions and principles can manage all types of organisations.
He argued that anyone interested in managing an enterprise could learn these principles and apply successfully. In order to become a manager, however, certain qualities of head and heart are needed (physical health, mental vigour, character, etc.).
Contributions and Limitations of Fayol:
(1) Conceptual Foundation:
Fayol’s contribution to management is unique and valuable. He provided a conceptual framework for analyzing the management process. He-
(i) proposed that all operations in a business can be classified into 6 major heads where management is the most important one;
(ii) Listed planning, organising, commanding, coordinating and controlling as the main elements of management; and
(iii) Proposed 14 principles of management which could be applied universally.
A number of current ideas and practices in management can be directly linked to the contributions of Fayol.
(2) Universally Applicable Principles of Management:
By emphasising that management skills are universal, Fayol has done a signal service to the propagation of management concepts. Fayol always believed that managerial ability could be applied to the home, the church, the military, the school, and politics as well as to industry. This has ultimately led to the mushrooming growth of management institutions throughout the globe.
(1) Lack of Empirical Evidence:
The theory is not supported by empirical evidence. Some of the terms and concepts have not been properly explained by Fayol. For example, the principle of specialisation does not tell us the way to divide the tasks. The so-called principles of management have been dubbed by critics (Simon, Stephenson) as ‘proverbs’ comparable to folklore and folk wisdom.
(2) Neglect of Human Factor:
The theory views human being as passive and capable of reacting only to organisational rules and economic incentives. Human attributes such as emotion, attitude, and creativity have been totally ignored.
(3) False Assumptions:
The theory assumes that all organisations can be managed by the same set of rules and principles. It does not recognise the differences in tasks and problems that confront organisations. Formal authority, again, is not sufficient for managers to control employees.
(4) Act Differently and Different Situations:
They must act differently in different situations, assessing their own strengths, organisational needs, union pressures, and competitive reactions etc. from time to time. Rules have to be applied carefully looking at the internal and external dynamics of the organisations.
(5) Pro-Management Bias:
It suffers from pro-management bias. It is more concerned with what mangers should know and do rather than with a more general understanding of managerial behaviour. It does not offer guidelines as to when, where and how the principles have to be applied.
(6) Historical Significance:
It has only historical significance. It is more appropriate for the past (where the environment was stable, predictable) than for the present (where the environment is turbulent, competitive and continually changing). As we all know, getting work from subordinates through the use of commands, instructions and force is not possible in the modern world.
Answer 2. The Classical Theory of Management with advantages and disadvantages:
The Management Thought or Theory in the current economic situation can best be understood in the light of its historical growth particularly since 1990.
The evolution of management thought may be divided into two broad stages:
The Classical Theory of Management – Comprising Three Streams:
(a) Bureaucracy;
(b) Scientific Management; and
(c) Process Management Theory – describing the process of management.
This is also known as Structural Theory of management. Max Weber introduced bureaucracy around 1990. F.W. Taylor introduced scientific management around 1910 and Henri Fayol inaugurated process management (functional or administrative management) around 1910.
(a) Bureaucracy (Max Weber – 1864 – 1920):
The first pillar in the classical organisation and management theory was systematically provided by Max Weber (1864 – 1920) a German Sociologist. He offered bureaucratic model for management of any large and complex organisation in any branch of human activity.
He considered bureaucracy as the most efficient form for a complex organisation. His primary contribution to management is his theory of authority structure and his description of organisation based on the nature of authority relations within them.
Essential Elements of Bureaucracy:
The elements of bureaucracy are vital parts of modern business, governmental, educational and other complex organisations.
These elements are as follows:
(1) Hierarchy of Authority – Hierarchy of authority involving superior – sub-ordinate relationship and chain of command.
(2) Division of Work – Clear-cut division of work based upon competence and functional specialisation. An ordered hierarchy takes the advantage of specialization.
(3) A System of Rules, Regulations and Procedures – A bureaucrat seeks rationality, routine, objectivity and consistency for his organisation, Behaviour is subject to systematic discipline and control;
(4) Impersonality of Interpersonal or Mutual Relations- A rule by law leads to impersonality of interpersonal or mutual relations, interpersonal relations are based on positions and not on personalities. We have mechanical and impersonal behaviour.
(5) Standardisation of Methods – A system of work procedures involving standardisation of methods;
(6) Selection and Promotion of Employees – Selection and promotion of employees based upon managerial and technical competence; and
(7) Only Legal Power and Authority – Authority and power rest in the office. Bureaucracy recognises only legal power and authority given to each office or position in the organisation. The power does not belong to an individual. It is a part of the office.
Basic Characteristics of a Bureaucratic Organisation:
The basic characteristics of a bureaucratic organisation are as follows:
(1) A Division of Labour by Functional Specialization – A maximum possible division of labour makes it possible to utilise all links of the organisation experts who are fully responsible for the effective fulfillment of their duties.
(2) A Well Defined Hierarchy of Authority – Each lower official is under the control and supervision of a higher one. Each sub-ordinate is accountable to his superior for his own decisions and actions and the decisions and actions of his subordinates in turn.
(3) A System of Procedures of Dealing with Work Situations – These procedures must be time-tested and equally applicable under similar situations of work.
(4) A System of Rules Covering the Duties and Rights of Employment – These rules should be simple and clear-cut and the responsibility of every member in the organisation must be clearly defined and assigned and strictly adhered to.
(5) Impersonal Relations between People – Rewards should be based on efficiency rather than nepotism or family connections. The functioning of the organisation based on rational and objective standards, excludes the intervention of personal considerations, emotions and prejudices. This unbiased approach predictably leads to optimum efficiency.
(6) Selection and Promotion Based upon Technical Competence and Excellence -The employees must be protected against arbitrary dismissal. The system of promotion should correspond to seniority or merit or both. This would help to produce staunch loyalty to the organisation.
The important advantages of bureaucracy are as follows:
(1) It leads to consistent employee behaviour – In this, as the policies, rules and procedures are set and applicable to all, this leads to consistent employee behaviour. This behvaiour is predictable, making the management process easier to implement.
(2) It eliminates conflicting job duties – In this as the jobs, duties and responsibilities are clearly defined, the overlapping or conflicting job duties are eliminated.
(3) The maximum utilization of human resources – Promotions are based on merit and expertise. This results in rightfully matching the right workers with the jobs which makes the utilisation of human resources optimum. Also the individuals move up the hierarchy as they gain expertise and experience.
(4) The workers become specialists – The division of labour makes the workers specialists. Therefore, their skills are further polished, they become experts and perform more effectively.
(5) Continuance of the Organisation – The organisation continues, even if the individuals leave since the position is emphasised rather than the person. For example if a president leaves, another person is hired or promoted to that position and the organisation continues to operate.
The disadvantages of bureaucracy are as follows:
(1) Too much of paperwork – In this there is too much of red-tape and paperwork.
(2) Employees think less for the organisation – Because of impersonal nature of work; the employees do not care about the organisation, as there is no sense of belonging and devotion.
(3) No initiative and growth of the workers – Too much of rules and regulations and a strict adherence to these policies inhibit the initiative and growth of the workers. Employees are treated like machines and not like individuals.
(4) There is a resistance to change – Workers become so used to routines that there is a resistance to change and introduction of new techniques of operations.
(b) Scientific Management – (F.W. Taylor 1856-1951):
Unlike bureaucracy, scientific management was championed by F.W. Taylor (1856 -1951) who eventually became acclaimed as “the Father of Scientific Management.” Scientific management revolutionised the entire shop or plant management. It led to the development of time and motion study, and it refined wage incentive plans.
It provided necessary foundation for industrial engineering. The basic theme of Taylor was that managers should study work scientifically in order to identify ‘one best way’ to get the job done. Taylor codified hid ideas in terms of certain principles which became very popular.
F.W. Taylor – F.W. Taylor’s scientific management refers to the efforts made to increase the productivity of labour by reducing his labour. He was of this opinion that the objective of management should be the securing of the maximum prosperity for the employers and the employees. To accomplish this, it was necessary to train each individual to do the “highest class work for which his natural abilities fit him.”
Taylor noted that in the current state of affairs, workers did not work to their maximum potential. Instead, they deliberately underworked on “soldiered” and avoided doing a full day’s work. This, according to Taylor, was the “greatest evil” afflicting workers in both England and America. Scientific Management however was to overcome this problem by placing new responsibilities upon the manager.
Principles of Scientific Management:
Taylor; who was instrumental in giving a scientific outlook to the management and thus revolutionising the whole process has discussed the principles of scientific management as follows:
(1) Task Idea:
Taylor holds that if a favourable condition is given, a good worker can perform miracles and can increase his productivity considerably. This gives rise to task idea for him which could be made possible only with the help of scientific management.
Here the only requirement is to organise the working force on task basis for striking results in the field. Taylor points out that the task basis organisation of working force in the fundamental principles of scientific management.
(2) Mental Revolution:
The main job of scientific management is to revolutionise the mind of both workers and management in such a manner that workers start feeling that the enterprise is their own and the success to the enterprise would mean a success to all of them. The labour starts thinking that it is their work and they must put their heart and soul in the work assigned to them.
Scientific management also strives to get the thinking of management changed so as to make the management feel that mutual respect and co-operation between the workers and the management helps in providing proper and effective leadership which is so badly needed in any management process and which unfortunately usually lacks.
Desired guidance, direction and co-ordination follow a good leadership. If all these are achieved the workers attitude would undergo a change towards good. The management would also stand benefited by its changed thinking. Workers would be satisfied and they in all probability would be prepared to put their heart and soul in their respective jobs.
(3) Standardisation:
Standardisation helps in reducing time, labour and cost of production. The success of scientific management largely depends upon standardisation of system, tools and techniques of production with the help of which the labour is to produce.
(4) Selection and Training of Labour:
The labour is required to be selected according to the nature of the job and thereafter they are to be trained within the industry in order to attain the objectives of the enterprise.
(5) Judicious Division of Work:
Assignment of work, according to training, skill, aptitude and allotment of tools and materials and according to the need and nature of the job are two basic factors which any management working on scientific lines keeps in mind. A better result may always be expected from such a judicious approach to the problem.
(6) Proper Use of Plants and Equipments:
There is a close relationship between scientific management and plants and equipments being used by the workers. Suitable, innovated and scientific use of plants and machinery, tools/equipments and other appliances helps in standard production. It also helps in revolutionising the mind of workers and in turn the whole production process is revolutionised.
(7) Planning:
Planning is the very essence of scientific management. Every effort, activity and production steps are planned to achieve the desired results. Unless it is done the very purpose of scientific management would be defeated.
(8) Experiments:
Experience keeps the management alive. Experiments make it a scientific and dynamic science. Since, management is a behavioural science based on human relations it is necessary to conduct experiments through surveys and researches so that new principles and generalisations may be incorporated from time to come.
A behavioural science cannot be static; if it is static it will die its own death. Therefore, scientific management usually undertakes three types of studies-time, motion and fatigue. These studies help in adding new ideas to already existing one for better results in future.
(9) Healthy Factory Atmosphere:
Factories under the Indian Factories Act, 1948 are required to maintain necessary cleanliness, make a provision for security of the workers while on job. Adequate space, air, light and heat, child welfare scheme, playground, canteen, drinking water, toilets, bath-rooms etc., are necessary requirements for a healthy working condition in a factory atmosphere. These provision, if adequate, help in maintaining the efficiency and required zeal in the labour.
(10) Incentive Wages:
Taylor made it amply clear that it is the incentive to labour which makes or mars the success of enterprise. In his opinion if labour is suitably rewarded and is satisfied with the job he would definitely try to take the enterprise on the top. Taylor’s differential wage rate system was propagated with a view to reward those labourers who are putting their all for the good of their enterprise.
(11) Labour Organisations:
Labour Organisations aim at increasing the efficiency and working condition of the labour as a whole. From worker’s point of view labour organisation can be divided into the following three broad categories – (i) Departmental Organisation; (ii) Line and Staff Organisation; and (iii) Functional Organisation.
(12) Cost Accounting:
Cost Accounting is a direct off spring of scientific management. Right from the first stage of the production to the last stage of cost accounting, it enables the management to plan, to organise and to direct the production and marketing of products in a manner in which it helps in reducing the production and distribution costs and increasing the profitability of the enterprise. Forecasting is done on the basis of cost accounting which helps the management in fulfilling is social obligations.
Principles of scientific management are however not static. They are subject to change. Nothing is last or final in the vocabulary of scientific management.
(c) Process (Administrative) Management Theory – (H. Fayol 1841-1925), and Others around 1910:
Taylorism management was launched in the U.S.A. and his followers at about 1910. At about the same time administrative theory of management (process management) was initiated by H. Fayol a French Engineer-cum Manager in Europe. Sheldon, Mooney and Reiley, H. Simon; L.F. Urwick, L. Gulick, C. Barnard were the followers of Fayol and they contributed a lot to the administrative theory of management.
It is also called Process of School of Management and H. Fayol is called the father of Modern Management. Koontz and O’Donnell, G. Terry, E. Dale and R.C. Davis are also strong advocates of the Process School of Management.
The pattern of management was established by Henri Fayol and the pyramidal form of organisation, Scalar principles, departmentation, delegation, unity of command, exception principle, span of control, authority responsibility, etc., are some of the important management concepts set forth by the advocates of process school of management. Fayol stressed the general applicability of managerial principles. He pointed out that technical ability is more dominating on the lower level of management, whereas managerial ability is more important on the higher level of management.
Elements of Process Management Theory – Fayol’s Principles:
Henri Fayol was born at Constantinople in France in 1841. He was a mining engineer. His whole life was spent in a single institution unlike great Taylor who worked with some eight different companies. Fayol, retired from his working life as a General Manager in 1918 and then worked as Director of the same company till his death in 1925.
“Unlike F.W. Taylor”, in the words of Mrityunjoy Banerjee – “Fayol worked from the top of the industrial hierarchy downwards and tried to give scientific shape to the experiences he gained in the highest control of a large scale undertaking.” He advocated that the management should be treated as a technical process subject to certain generalisations.
These generalisations led to a new theory of administration initiated by Henri Fayol. His principles were published in his book General and Industrial Management in French in the year 1916.
Fayol has divided activities of an industrial undertaking into the following six broad groups:
(1) Technical (Production);
(2) Commercial (Purchases and Sales);
(3) Financial (Funding and Controlling Capital);
(4) Security (Protection);
(5) Accounting including Statistics (Balance Sheet, Costing, Records); and
(6) Managerial (Planning, Organising, Commanding, Co-ordinating and Controlling)
Administration for him is one of the major functions. He emphasised that managerial ability is demanded from the top position in the managerial hierarchy. At higher levels, he emphasised, it is the managerial skill which assumes greater importance than the technical skill.
Fayol’s Managerial Philosophy:
Fayol’s greatest contribution to modern management is managerial philosophy which can be divided into three categories to facilitate the study – (i) Elements of Management (ii) Principles of Management, (iii) Managerial qualities and training. Though elements and principles can be combined together since overlapping discussions are possible when dealt separately. But Fayol considered both of them separately.
Oliver Sheldon in his book “The Philosophy of Management” has stated that “industry exists to provide the commodities and services that are necessary for the good life of community in the volume required and that industrial management must be governed by the principles based on the concept of service to the community.
Sheldon’s attention of various social and ethical aspects eventually resulted in a re-orientation of managerial thinking and, as a result, prime consideration is being given to social responsibilities by the modern managers. This helped the management to attain prestige and professional status.”
Management Qualities and Training:
Fayol has enumerated certain managerial qualities. According to him every manager should possess the qualities enumerated by him for better performance and good results.
He has divided the said qualities into the following four major categories:
(1) Physical Qualities;
(2) Mental Qualities;
(3) Moral Qualities; and
(4) General Knowledge and Experience.
(1) Physical Qualities:
A manager, as per the enumeration of Fayol, should possess the following physical qualities; (a) a good physique, (b) sound health, (c) smart, active and energetic, and (d) good external personality.
Physical qualities make the manager sturdy; stout, quick, pleasing and attractive. A dashing man attracts his fellow being towards him without much of efforts. He is more convincing and confident. He is more sure of extracting good work from his workers and satisfying them by his conduct, treatment and behaviour.
(2) Mental Qualities:
A manager should have the following mental qualities in him; (a) must be agile, (b) intelligent, (c) wise, and (d) quick. Mental qualities make the manager assertive and extracting without hurting the feelings of his workers and without jeopardising the human relations.
He quickly wins over his subordinates as well as his opponents. He proves a better leader and command respects both from his sub-ordinates as well as from his colleagues. He remains in good books of his superiors which again is helpful in commanding respect from all in the organisation.
(3) Moral Qualities:
A manager should possess the following moral qualities, They are – (a) initiative, (b) honest (c) man of determination, and (d) a responsible worker of integrity. Moral qualities in a manager are the qualities with the help of which he can himself become an example for others working with or under him. These qualities bring him respect and his decisions an easy acceptability.
(4) General Knowledge and Experience:
An experienced manager having rich general knowledge is an asset to any orgnisation. A manager should know all about his organisation and the enterprise. He should not be necessarily expert in all the fields but he should have adequate knowledge about his job and about the jobs which others are handling. This ensures better co-ordination and smooth running of the enterprise.
Emphasis on Training and Experience – Henri Fayol was not satisfied with what he described as managerial qualities. He went a step further. He emphasised that no one is born with all the qualities or some of the qualities he has enumerated as managerial qualities. He was of the view that these qualities may be developed.
They may also be acquired through experience. Training for the acquisition of these qualities, for Fayol is a necessity. Key for success in managerial job is training and experience. In this respect, Fayol is considered not only the father of management but also was responsible for the introduction of training as an important concept in modern management theory and practice.
Comparison of Taylor and Fayol:
From the discussion made above it can be said that the contribution of Taylor and Fayol are complementary to each other.
The comparative evaluation of their contributions is as follows:
(1) Taylor’s main stress and emphasis were on tasks, workers and supervisors; whereas Fayol’s work was concerned with efficiency of administrators or managers.
(2) Taylor’s paid greater attention to standardisation of work and tools. The principles advanced and enunciated by him were on the management at the shop level. His main view was to increase the efficiency of workers and managers. But Fayol laid more emphasis on the principles of general management and the functions of managers. He further argued that his principles will have universal application.
(3) Taylor has written and used the word “Scientific management” in his statement and Fayol has written ‘a general theory of administration’. Both of them tried to put management on rational and systematic basis. Both had the experience of industry and both had put emphasis on industry.
Taylor tried to improve the productivity of the workers and eliminate all kinds of waste. But Fayol tried to develop principles which will help in better management.
(4) Taylor was of this view that the efficiency of employees and workers be improved at the lowest level and then to move upward while formulating his scientific management.
But Fayol, on the other hand, began from top level and proceeded downward with stress and emphasis on unity of direction, unity of command and co-ordination.
(5) Fayol also emphasised the need for teaching the concepts and principles of management. It will be proper and appropriate to quote. Theo Haimann – “As long as we refer to Taylor as the father of scientific management we would do justice to Fayol and his work to call him the father of principles of management.”
We can conclude the contributions of Taylor and Fayol in the words of Urwick – “The work of Taylor and Fayol was, of course, essentially complementary. They both realised that the problems of personnel and its management at all levels as the key to industrial success. Both applied scientific methods to this problem.
That Taylor worked primarily at the operative level, from the bottom of the industrial hierarchy upwards, while Fayol concentrated on the managing director and worked downwards, was merely a reflection of their very different careers. But Fayol’s capacity to see and to acknowledge this publicly was an example of intellectual integrity and generosity of spirit.”
Answer 3. Classical Theories of Management:
At about 1900, a set of principles and concepts about organisation and management, now called as classical theory, began to be extensively developed. Even at present the influence of classical theory of organisations is quite profound or remarkable. The existence of complex and large organisations even today can be accounted appreciably through classical concepts of management thought.
Under classical theory of management, an organisation is the structure of the relationships, objectives, roles, activities and other factors when persons work together.
This point of view regarding an organisation is expressed fully by three streams of the classical theory, viz:
(i) Bureaucracy;
(ii) Scientific Management; and
(iii) Process Management.
We have mechanistic structure of an organisation and it is considered as a closed system. Let us describe the three streams of classical theory of management.
Features of Management in the Classical Period:
(1) It was closely associated with the industrial revolution and the rise of large-scale enterprise which demanded the development of new forms of organisation and management practices.
(2) Traditional or classical organisation and management theory is based upon contributions from a number of sources, including scientific management, administrative management theory, the bureaucratic model, microeconomics and public administration.
(3) Management thought focused on-
(a) Job content,
(b) Structure,
(c) Division of labour,
(d) Tasks of management
(e) Standardisation, simplification and specialisation,
(f) Scientific approach towards organisation and management,
(g) Primary incentives based on the economic and physiological needs of the workers.
Traditional theory was based on three pillars:
(1) Bureaucratic model.
(2) Scientific management, and
(3) Administrative or process management theory.
We will describe, in brief, these three pillars.
1. Bureaucratic Model:
The first pillar or thread in the classical organisation and management theory was systematically provided by Max Weber (1864-1920) a German Sociologist. He offered bureaucratic model for management of any large and complex organisation in any branch of human activity. He considered bureaucracy as the most efficient form for a complex organization.
Elements of Bureaucracy:
The elements of bureaucracy are vital parts of modern business governmental, educational, and other complex organisations.
These elements are:
(i) Hierarchy of authority involving superior-subordinate relationship and chain of command;
(ii) Clear-cut division of work, based upon competence and functional specialisation. An ordered hierarchy takes the advantage of specialisation;
(iii) A system of rules, regulations and procedures. A bureaucrat seeks rationality, routine, objectivity and consistency for his organisation. Behaviour is subject to systematic discipline and control;
(iv) A rule by law leads to impersonality of interpersonal or mutual relations. Interpersonal relations are based on positions and not on personalities. We have mechanical and impersonal behaviour;
(v) A system of work procedures involving standardisation of methods;
(vi) Selection and promotion of employees based upon managerial and or technical competence; and
(vii) Authority and power rest in the office.
Bureaucracy recognises only legal power and authority given to each office or position in the organisation. The power does not belong to an individual. It is a part of the office.
Assessment of Bureaucracy:
Bureaucracy provided a rigid machine model of an organisation. It could not account for humanistic model of an organisation which could recognise importance of human interpersonal or mutual relations in an organisation. Bureaucratic organisation may be preferred where change is not anticipated or where rate of change is slow and it can be predicted.
In a stable or static organisation (considered as closed system) bureaucracy can work and may be preferred. It is usual in government and in many stable large businesses. But in a dynamic business organisation (considered as an open system) we cannot use bureaucracy.
There are many glaring disadvantages in bureaucratic organisations- Rigidity, impersonal and mechanical or dehumanised environment, higher cost of controls, tendency to forget ultimate goals of the organisation. Self-perpetuation and empire building, difficulty of co-ordination and communication, blind faith in rules, regulations and procedures. Above all, bureaucracy cannot offer satisfaction of higher level wants of employees and to that extent it fails miserably to exploit fully the human potential.
It offers limited scope for the development of human resources or for management development. Many of the problems of bureaucracy probably would be reduced if the individual needs and characteristics of ail people are remembered and are duly considered in making managerial decisions. In other words, we must humanise bureaucracy.
2. Scientific Management (F. W. Taylor):
F. W. Taylor (1856-1915) eventually became acclaimed as “the Father of Scientific Management.”
Taylor, Gilbreth (Frank and his wife, Lillian), Gantt and others launched what they called scientific management. According to these experts it was not proper to just find a way of doing something. A manager had to find the one right way. They used time and motion study for developing a right way.
According to them analysis, planning and control of work should be separated from the execution of work and management should be responsible for detailed analysis, investigation and planning of work in advance, whereas workers should be responsible for the performance of the work as per plans.
Scientific management revolutionised the entire shop or plant management. It led to the development of time and motion study, and it refined wage incentive plans. It provided necessary foundation for industrial engineering. If we take a broad view of Taylorism or scientific management, the contributions of Taylor and his eminent followers were truly outstanding and many features of their contributions have proved to be enduring and classical. The basic theme of Taylor was that managers should study work scientifically in order to identify “one best way” to get the job done. Taylor codified his ideas in terms of certain principles which was very popular.
The essence of positive view of scientific management was described by Taylor as follows:
(i) All jobs can be observed and analysed in order to determine the one best way of accomplishing them. Management must use scientific, rather than the rule-of-thumb approach.
(ii) The best man for the job can be scientifically selected and trained,
(iii) You can insure that the one best way is followed by paying the man on incentive basis tying his wage or salary to how much he produces,
(iv) Put a manager in charge of analysing, planning, preparing and inspecting work. The worker simply carries out the directions and instructions issued by the manager,
(v) Harmonious organisation can be obtained by assigning the appropriate man to each set of operations. This will prevent any discord,
(vi) Management has to choose the best means of economical production. Specialisation of workers is essential to increase efficiency of production.
(vii) Co-operation between labour and management can be achieved. This will ensure maximum output, in place of restricted output by workers,
(viii) A striving for enterprise and the development of each man to his greatest efficiency and prosperity must be accomplished,
(ix) Workers must be inspired or trained to use the scientific methods developed through time and motion study,
(x) Management must organise in such a way that it can properly manage and carry out its duties.
Taylor’s Mechanism:
Taylor’s mechanism covered three elements:
(i) Time study with the help of stop watch to determine the precise time for each element of a man’s work;
(ii) Differential piece rate system offering a premium for producing above the standard,
(iii) Functional foremanship creating right supervisors or foremen each acting as a specialist having functional authority over the workers.
However, this element created multiple bosses for each worker and we could not maintain the unity of command, i.e.one boss for each subordinate.
The most colourful contributors to Taylorism were Frank and Lillian Gilbreth, F. Gilbreth (1868-1924) gave us motion study. He developed 17 basic motions which were called ‘therblig.’ His wife, Lillian Gilbreth was Ph. D., in psychology. L. Gilberth (1878-1972) emphasized the human factor in industry and stressed psychological effects of fatigue.
Frank and Lillian Gilbreth made pioneering efforts in the field of motion study and they-laid the entire foundation of our modern applications of job simplification, meaningful work standards and incentive wage plans. Mrs. L. Gilbreth had a unique background in psychology and management and the couple could embark on a quest for better work methods. F. Gilbreth is regarded as the father of motion study.
Taylor (a stop-watch man) and Gilbreth (a motion-study man) both are responsible for inculcating in the minds of managers the questioning frame of mind and the search for a better way.
Henry L. Gantt, (1816-1919), an ardent advocate of scientific management, made four important contributions to the concepts of management-
(1) Gantt Chart to compare actual to planned performance,
(2) Task and Bonus plan for remunerating workers indicating a more humanitarian approach,
(3) Psychology of employee relations indicating management responsibility to teach and train workers,
(4) Emphasis on service rather than on profits. Gantt’s contributions were more in the-nature of refinements rather than fundamental concepts. They made scientific management more humanised and meaningful to devotees of Taylor.
H. Emerson (1853-1931) coined the term efficiency engineering to describe his brand of efficiency. He announced twelve principles of efficiency- five relating to employer-employee relations and seven relating to systems in management. He was one of the America’s first consultants, thus bringing emphasis to the staff principle.
He was the first to codify a set of principles to guide management. D.H.S. Person was called Mr. Management. He was in the education line. Person’s contribution was to give scientific management a new academic respectability and to vigorously spread the idea that scientific management was not dedicated to the stop watch and speed-up, but rather dedicated to the purposive and scientific determination of effective ways to accomplish given tasks.
Assessment of Scientific Management:
Scientific management is also called Taylorism. It emphasized detailed, precise planning of work to achieve efficiency, standardisation, specialisation, simplification. It relied on formal top-down budgeting which led to centralised control system. Scientific techniques of management were employed for the management of physical resources rather than for human resources.
Primary emphasis was on the analysis, planning and control functions related to performance of basic tasks. It was assumed that normal economic incentives were enough for implementation of plans and policies. It aimed at improving the efficiency of human work but it considered human being as a rational economic man and he can act just like a machine.
Great advances in managerial practice were made to determine faster and better methods of production and more efficient forms of organisation and management. But workers were assumed as standardised units of production interchangeable in organisation slots-cogs in the organisation machine. No advances were made in human areas.
Scientific management assumed that industrial efficiency can be improved through the application of the methods of science and the movement to high wages for higher, productivity. It advocated that standardisation of working conditions, work methods, time study, motion study, standardisation of work, planning of daily tasks, etc., can promote industrial efficiency.
Taylor emphasised five concepts on which management theory and practice could be based:
(1) Research,
(2) Standards,
(3) Planning,
(4) Control and
(5) Co-operation.
Scientific management certainly used a systematic experimental techniques; on the other hand, it showed mechanistic assumptions about human behaviour. To Taylor, human behaviour was indeed a component of a large productive machine. Only those individuals who acted like machines had a place in his productive system. Taylor failed to understand the complexities of human behaviour.
The essence of positive view of scientific management was described by Taylor as follows:
Science, net rule of thumb. Harmony, not discord. Cooperation, not individualism. Maximum output, in place of restricted output. The development of each man to his greatest efficiency and prosperity.
Integration of scientific management, human relations movement of Fayol’s administrative theory can give us a broader and sound base for organisation and management.
3. Administrative (Process) Management Theory (H. Fayol and Others):
Scientific management was launched in the U. S. A. by Taylor, and his followers at about 1910. At about the same time administrative theory of management (process management) was initiated by H. Fayol, a French engineer-cum-manager in Europe.
Sheldon, Mooney and Reiley, H. Simon, L. F. Urwick, L. Gulick, C. Barnard were the followers of Fayol and they contributed a lot to the administrative theory of management.
It is also called process school of management. Koontz and O’Donnell, G. Terry, E. Dale, R. C. Davis are also strong advocates of the process school of management. This book is also based on process school of management.
The pattern of management was established by Henry Fayol. The pyramidal form of organisation, scalar principle, depart mentation, delegation, unity of command, exception principle, span of control, authority-responsibility, etc., are some of the important management concepts set forth by the advocates of process school of management.
Fayol stressed the general applicability of management principles. He pointed out that technical ability is more dominating on the lower level of management whereas managerial ability is more important on the higher level of management.
He also stressed the value of staff to assist line managers in complex organisations. Fayol in his landmark book ‘General and Industrial Management’ described fourteen management principles that can capture the entire flavour of the administrative theory of management.
Management Process as per Fayol:
Fayol proposed that all operations in business organisations can be classified under six headings:
(1) Technical (production),
(2) Commercial (purchase and sales),
(3) Financial (finding and controlling capital),
(4) Security (protection of property and persons),
(5) Accounting (stocktaking and balance sheet, costing, records), and
(6) Administrative activities (planning, organising, commanding, coordinating, and controlling).
He further noted that with regard to administrative operations:
(1) To plan means to study the future and arrange the plan of operations,
(2) To organise means to build up the material and human organisation of the business,
(3) To command means to make the staff do their work,
(4) To co-ordinate means to unite all activities and
(5) To control means to see that everything is done in accordance with the rules that have been laid down and instructions given.
Other Contributors:
J. Mooney (1884-1957) and Alan Reiley were the advocates of process management school. These two management experts identified and elaborated principles of organisation such as coordination, scalar principle, line and staff duties, etc. Two other individuals L. Urwick and L. Gulick also emphasised the functional or process approach to management. They synthesized the ideas of various writers on process management theory and indicated the probability of the science of management.
Assessment of Administrative or Process Management Theory:
Elements of administrative or process management theory include:
(1) Principles of management given by Fayol, and others,
(2) Concepts of line and staff organisation,
(3) Committees, and
(4) Functions of management as given by Fayol and others,
(5) Co-ordination expressing the central task of management.
Gulick coined the management functions as POSDCORB’, i.e. Planning, Organising, Staffing, Directing, Co-ordinating, Reporting and Budgeting. Two popular management textbooks (Koontz and O’Donnell, and G. Terry) are organised around the management functions. It is clear that the study of organisations through an analysis of management functions has been and even today is important. The present book also is based around management functions and management as an ongoing process.
Social scientists described administrative theory as an ideal bureaucracy. It places heavy emphasis on the power and authority structure of an organisation. It enjoys all the advantages of bureaucracy such as order, stability, and certainty.
It also suffers its disadvantages such as rigidity, impersonality, and excessive categorisation. It is institutionally power-centred and cannot give greater scope for individualism. Hence, it cannot provide democratic organisations. Administrative theory is a way to achieve bureaucracy.
If you desire bureaucracy administrative theory will also be valued. If you desire more democracy, you will have to modify administrative theory considerably.
Taylor Vs. Fayol in Management Evolution:
Before we proceed to describe the evolution of management in the neo-classical period, i.e., 1930-1960, let us describe the role of Taylor and Fayol in management evolution.
The industrial revolution brought about radical changes in the methods and techniques of production and distribution. Joint stock enterprise provided an ideal form of business organisation to deal with mass production and mass distribution. Company organisation demanded management by experts and gradually management assumed a professional character.
Until 1900, we did not have any formal concepts of management. Taylor and Fayol both contributed a lot for the development of modern concepts of management. Parallel activities of Du Pont Company also provided concrete support for the growth of management theory and practice.
Since 1930, Lever Brothers, Radio Corporation of America, General Foods, General Motors, General Electric, and many other such multinational business concerns helped the development of management thought and brought about management revolution, i.e., firm establishment of professional management.
Scientific Management (Taylorism):
F. W. Taylor- Taylor provided a base upon which much of our current thinking about management is firmly established. He saw the need to systematic management, to analyse the work to be done, to measure it and to assign portions of work to the people best selected and trained to perform the work. He published his book The Principles of Scientific Management in 1911.
What is scientific management?
Scientific management will be a process of directing human efforts which employs- (1) the scientific method and (2) the management specialists.
Scientific method includes- (a) observation; (b) measurement; (c) experimentation; and (d) inferences and conclusions.
The management specialist can be defined as one who specialises in the application of modern scientific method to the solution of problems arising in the process of management.
Scientific management gives particular stress on the following managerial work:
(1) Intelligent investigation and analysis of the different units of the business.
(2) Scientific study of each unit of the business.
(3) Scientific study of different methods of doing a work.
(4) Scientific selection of workers.
(5) Determination of the most efficient unit of work.
(6) Determination of standard or ‘norm’ based on scientific approach and analysis.
(7) Determination of the most efficient speed in order to achieve the goal of a ‘standard best’.
Taylor’s chief contribution was not in the field of General or Top Management. It was essentially around shop floor or plant management.
Taylor’s chief ideas were:
(1) Separation of planning from doing.
(2) Manager to plan in advance the work to be done.
(3) Manager to select and train the workers.
(4) Time and Motion Studies.
(5) Differential Wage Plan.
(6) Functional foremanship and division of labour.
(7) Standardisation of tools and equipment.
Above all, he sincerely advocated scientific approach to management and for the first time introduced rationalised plant management. Taylorism substituted scientific management for conventional or orthodox management which was based on hunches, guess-work and traditions. However, it should be noted that paternity of modern management was not established by Taylorism.
It only introduced scientific approach to plant or shop management. It was silent on principles of general management. Taylor did not provide the whole answer to ‘what is a manager’? and ‘what are the managerial functions’? Answers to these questions can set the pattern of modern management and these answers were provided not by F. Taylor but by H. Fayol, a French industrialist in his book General and Industrial Management.
H. Fayol (Father of Modern Management)
He can be rightly considered the father of modern theory of general and industrial management. Henri Fayol analysed the process of management as he had observed it first-hand.
He divided general and industrial management into six groups:
(1) Technical activities (production, manufacture, adaptation).
(2) Commercial activities (buying, selling and exchange),
(3) Financial activities (search for and optimum use of capital).
(4) Security activities (protection of property and persons).
(5) Accounting activities (stocktaking, balance sheet, cost, statistics).
(6) Managerial activities (planning, organisation, command, co-ordination and control).
These six functions had to be performed to operate successfully any kind of business. He, however, pointed out that the last function, i.e., the ability to manage, was the most important for upper levels of managers. There is no doubt that Fayol established the pattern upon which our modern concepts of management are built. Fayol’s grouping approximately tallied with the analysis of managerial work of many companies even before 1930.
The process of management as an on-going managerial cycle involving, planning, organising, directing, leading, coordinating, controlling is actually based on the analysis of general management by Fayol. Hence, it is said that Fayol established the pattern of management thought and practice. Even today, management process has general recognition.
Other Ideas of Fayol:
Fayol’s contribution to the evolution of modern management is really remarkable:
1. He gave us overall concepts of general management.
2. He gave us the typical functions of management.
3. He recognised the value of staff specialists to guide and advice line managers in complex organisations. Later management experts developed line and staff organisation.
4. He recommended selection and training of workers and managers. This will create skilled workers and professional managers.
5. He advocated the use of organisation charts to describe at a glance the organisational relationships, authority-responsibility flows and scalar chain.
6. He introduced with great emphasis the principles of unity of command and unity of direction.
7. He pointed out the importance of non-financial incentives.
8. He identified the key problem of delegation and decentralisation of authority.
9. He emphasized planning function of higher management.
Other Principles of Management:
Followers of H. Fayol gave other principles of management such as universality of management, control by exception, decision by exception, equality of authority, responsibility, power and accountability and coordination.
By introducing two modifications to Fayol’s concepts, we could easily install the foundation of modern management theory:
(1) Management is the planning, organising, command, co-ordination and control of technical, financial commercial accounting and security activities.
(2) It is not command but motivation and leadership which can help us to understand why men and women work and how to secure from them maximum productivity.
Thus, we substitute motivation and leadership for command. Direction and command are not enough to get things done through people. The manager today has to encourage, communicate, develop, guide and stimulate his employees to secure higher output. Modern management places the greatest emphasis on leadership and motivation as keys to productivity.
The pattern of management that developed in Du Pont Company had a far-reaching influence on modern business enterprise. The writings of Taylor and Fayol stimulated further investigations into the theory of management and its application to business. The example of Du Pont provided a pattern that was followed with great success by many other companies.
The works of Taylor and Fayol the two pioneers in the evolution of managerial thought are in reality complementary:
(1) They both pointed out that the problem of personnel and its management at all levels is the master-key to industrial productivity and progress.
(2) Both implied scientific approach and scientific method to solve the managerial problems.
(3) Taylor was a management engineer. Taylor worked primarily on the operative level from the bottom of the organisation hierarchy upwards. Whereas Fayol concentrated on the Managing Director and worked downwards on the organisation hierarchy. Fayol was a management philosopher.
(4) Both, however, stressed on the technical or professional aspects of the management arid both are responsible for the managerial revolution which took place after 1940.
In short, Taylor introduced scientific plant management whereas Fayol and Du Pont company introduced the foundation of the pattern of theory and process of management.