Classical and Modern Theories of Management

A. Classical theories: Focus: Structure, efficiency, task orientation, and formal organization

1. Scientific Management Theory

• Propounded by: F.W. Taylor (Father of Scientific Management)
• Main Focus: Increasing efficiency and productivity through scientific analysis of work.

2. Administrative Management Theory

• Propounded by: Henri Fayol (Father of Modern Management)
• Focus: Functions of managers and principles of administration.
• Key Contribution: 14 Principles of Management, including:
  • Division of work
  • Unity of command and direction
  • Scalar chain
  • Esprit de corps

3. Bureaucratic Theory

• Propounded by: Max Weber
• Focus: Formal rules, hierarchy, and impersonality in organizations.

B. MODERN THEORIES

🔹 Focus: People, systems, situations, and data-driven decisions

1. Human Relations Theory

• By: Elton Mayo (Hawthorne Experiments)
• Focus: Workers are motivated by social needs, not just money.
• Conclusion: Informal groups, communication, and morale affect productivity.

2. Behavioral Theory of Management

Behavioral Theory emphasizes the importance of human behavior, motivation, needs, and interpersonal relationships in the workplace.

🔹 It shifted focus from structure (Classical Theory) to people-centric management.
🔹 It assumes that satisfied and motivated employees perform better.
🔹 It laid the foundation for modern HR practices and participative management.

a) Maslow’s Hierarchy of Needs (1943)

• Proposed by: Abraham Maslow
• Describes five levels of human needs, arranged in a hierarchical order.
• Employees move up the hierarchy as each level is fulfilled.

Maslow’s Pyramid (Bottom to Top):

1. Physiological Needs – Food, water, shelter, sleep
2. Safety Needs – Security, job safety, health
3. Social Needs – Love, belongingness, friendship, teamwork
4. Esteem Needs – Recognition, status, achievement
5. Self-Actualization – Realizing full potential, creativity, personal growth

🔹 Key Point: A need must be satisfied before the next becomes a motivator.

b. McGregor’s Theory X and Theory Y (1960):

• Proposed by: Douglas McGregor. Describes two contrasting views of workers, which influence management style.
• Theory X (Traditional/Authoritarian View): Workers are lazy, dislike work, need close supervision, and avoid responsibility. Suitable for strict control and punishment-based management.
• Theory Y (Modern/Participative View): Workers are self-motivated, seek responsibility, and enjoy challenges. Encourages trust, delegation, and involvement in decision-making. Key Point: Theory Y leads to higher motivation and creativity.

c. Herzberg’s Two-Factor Theory (1959):

Proposed by: Frederick Herzberg. Based on a study of what causes job satisfaction and dissatisfaction.

🔹 Two Factors:

1. Hygiene Factors (Do not motivate, but their absence causes dissatisfaction): Salary, Company policies, Working conditions, Supervision, Job security
2. Motivators (Directly related to job satisfaction and motivation): Achievement, Recognition, Work itself, Responsibility, Growth and advancement

🔹 Key Point: To motivate employees, hygiene factors must be adequate, but motivators must be emphasized.

Summary Table

3. Systems Theory

• Organization = Open System
• Input → Process → Output → Feedback loop
• Focus: Interdependence and the environment’s role in success

4. Contingency Theory

• “No one best way to manage.”
• Approach depends on situation, environment, and task
• Key Thinkers: Fiedler, Lawrence & Lorsch

5. Quantitative/Mathematical Theory

• Focus: Mathematical modeling, decision science, and optimization.
• Tools: Linear programming, PERT, CPM, Decision trees

Quick MCQ-Type Revision