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Business in todays world has become an extremely competitive force changing continuously at a rapid rate. Working in the 21th century requires dealing with a dynamic environment with people that have diverse needs. Every business organisation needs to be managed, and hence there is a need for managers. Even years back there was a diverse need for management of organisations. There have been people who have tried to study management so as to make the most efficient and effective use of their resources. There have been scientific methods, and similarly there have been methods based on people's behaviour. Organisations nowadays use these methods in their business management.
Harold Koontz and Heinz Weihrich refer to management as 'The process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.'(CBSE, 2007) Management has been referred to as an art and a science, some people even call it a profession. With the different levels within the organisation, management becomes a difficult process. Top management, middle management and operational management have to work together in order for the organisation to be efficient and effective. Hence co-ordination can be considered as the essence of management. Planning, organising, staffing, directing and controlling are the key functions of management that work together to fulfil the organisational, social and personal objectives.(CBSE, 2007)
Management has been divided into two schools, Scientific School of Management and Behaviourist School of Management. The main objective of Scientific Management is to increase the economic efficiency. The core of Scientific Management was developed by Frederick Winslow Taylor. Once the base was set, other researchers like Henry Gantt and Max Weber along with Henri Fayol came and built on top of it. Scientific methods were introduced into management to get a general framework so as to make it easier to analyse the problems. Behaviourist Management on the other hand, studies the behaviour of the people in the organisation and finds different way to improve the behaviour of the employees and managers towards each other to be efficient and effective. Elton Mayo is the founder of Human Relations Management (Behaviourist Management) and is supported by Abraham Maslow and Douglas McGregor along with Mary Parker Follett, all of whom contributed towards Human Relations Management.
Frederick Winslow Taylor (1856-1915) is regarded as the father of Scientific Management and was one of the first management specialists. Scientific Management is sometimes referred to as Taylorism. Taylor believed that there was always 'One Best Way' of getting the work done. Frederick Winslow Taylor, also known as F.W.Taylor, developed different studies that are still used in management and are very effective. These include Time Study, Motion Study, Fatigue Study, and Method Study. By profession an American Mechanical Engineer, F.W. Taylor introduced Scientific Management in opposition to The Rule of Thumb. He is also known for the introduction of the Differential Piece Wage System where a worker that worked more efficiently and produced above the average level of production then he would get paid more than those producing below the average level of production.(CBSE, 2007)
Max Weber (1864-1920), a German student and sociologist, came up with another approach to the scientific management. Although he wasn't the first one to use the word bureaucracy, he explained many of the features that we use in the present world. The term bureaucracy, previously known as rational-legal authority, refers to six characteristics laid forward by Weber. He believed that instead of being loyal to a particular superior, an employee should be faithful to the organisation. His characteristics state out the fact that the management should have some rules laid out and those should be followed consistently. Another one of the characteristics states out that an employee should be selected based on the knowledge and skill present, rather than personal relationships. According to Weber an authority should not be based on a person's personality, rather the authority should be attached to the position or job as it would be passed on from one person to another over time. In general, his non-personal approach towards management was stated as bureaucracy.(Cutajar, 2010)
George Elton Mayo (1880-1949), born in Australia, is often regarded as the founder of the Human Relations Movement (Behaviourist Management) as well as of the industrial sociology. In 1926, 4 years after immigrating to USA, Mayo became the Director of the Department of Industrial Research at Harvard University. His belief was that the organisations mainly existed to serve and satisfy the human needs and that the organisations needed the people as much as the people need the organisations. Mayo recognised that people searched for satisfaction of their social needs within the workplace, and hence he encouraged creating an environment within the organisation that would satisfy these needs of its employees. Elton Mayo is known for the Hawthorne Studies that were conducted between 1924 and 1932 at the Western Electric Company's Hawthorne Plant that was situated near Chicago. Researchers from the American Academy of Sciences ran a series of tests which manipulated illumination and the output was recorded. Two groups were made, the first where illumination was constant and the second where the illumination was lowered. The output increased among both the groups. But the researchers could not explain this and this led to the company inviting the Harvard Industrial Research Team who took over under Elton Mayo's direction. These researchers selected small groups of workers and isolated them, changed their departmental routines and made them immune from the disruption of other employees. The experiments were carried out in the Relay Assembly Test Room and hence came to be known as the RAT Room tests which lasted for about five years. In these experiments a group of 6 female employees were selected that had comparable skill levels and were willing to work together. These employees were assigned some tasks that required no machinery involved and about 10 changes were made in all as part of the experiments. The women were placed in an observation room with an observer that recorded the output data and made sure a friendly atmosphere was maintained at all times. Communication between the researchers and the workers was maintained throughout the experiments. It was recorded that output went up after each change that was introduced. After the experiments were thru the conditions were changed back to the original settings and it was observed that output went up to the highest level ever recorded. Increased job satisfaction was experience among the group due to greater freedom in the working environment and cause they had control over their own pace-setting. The Hawthorne Studies showed that a social system had emerged, esprit de corps. The informal organisation was discovered as well along with the fact that workers worked better when in communication with the supervisors and when under supervision.(Donnelly, 2009)
Douglas McGregor (1906-1964) added another chapter in the Behaviourist School of Management. By profession a famous American psychologist, McGregor introduced Theory X and Theory Y as two sets of assumptions about the human behaviour and nature in relation with management. Theory X represented a negative view of the human nature with the assumptions that people, in general, are naturally irresponsible for their work and require constant supervision in their jobs. On the other hand, Theory Y represented a positive view of the human nature with the assumptions that people, in general, are creative, hard-working and responsible. According to Theory X, people try to avoid responsibility whenever they can and hence require heavy supervision. A Theory X manager believes that the employees are least interested in working and that large incentives are required in order to get the work done. Theory X usually leads to Diseconomies of Scale in the organisations. Whereas according to Theory Y, people enjoyed their work and duties. These people are talented and creative and are always ready to get the work done. Theory Y managers create a friendly environment and earn the trust of the employees. Employees even have a say in couple of the decisions of the organisation. A Theory Y manager is under a lot less pressure than a Theory X manager.(Wikipedia, 2010)
One of the main drawbacks that both, The Scientific Management and Behaviourist Management, had was that they both focused on the lower levels of the organisations and didn't give much importance to the middle level and the top level of the organisation. In Scientific Management the people were treated as machines and this usually created a level of dissatisfaction among the employees, whereas in Behaviourist Management the entire importance was given to the Human relations and all the other aspects were totally ignored. Another aspect of the Behaviourist Management that was overlooked was that an organisation consists of diverse group of people that have diverse needs. It is almost impossible to keep everyone in the organisation happy, Conflicts and arguments usually tend to rise among the employees. Similarly in the Scientific Management, the assumption of F.W. Taylor that there always is 'One Best Way' of getting the thing done is wrong since the same thing could be done different ways and the same level of output could be achieved according to the time and motion of the employees. In Scientific Management, There was a loss of skill and decrease in creativity as employees would just do the same task over and over leading to specialisation. In Behaviourist Management, The employees were tricked into believing that they were part of the decision making of the organisation.
On the lighter side, both the Management Schools worked towards efficient utilization of their resources. Scientific Management focused on getting the work done and how the task is being carried out so as to take the least amount of time possible. Behaviourist Management, on the other hand, Relied on better communication between the superiors and the subordinates and focused on making better relationships among the employees since this would create a better environment for the work to be carried out which in turn will increase production. Direct rewards and incentives were provided in Scientific Management so as to increase the output produced. The Scientific Management is responsible for creating a formal chain of command whereas the informal chain of command immerged from within the Behaviourist Management.