CHAPTER TWO

THE DEVELOPMENT OF MANAGEMENT THOUGHT

Introduction
This chapter examines the evolution of management thought by describing several
management theories that have emerged over the years. The origin of management in the
organized way can be traced as back as the origin of human beings. Management has been
practiced a long time. Organized endeavors directed by people responsible for planning,
organizing, leading, and controlling activities have existed for thousands of years. Most of
the evolutionary changes and new perspectives occurred as a result of the Industrial
Revolution that transformed agricultural societies into industrial societies. Today,
management thinking continues to evolve to meet the challenges of rapid and dramatic
societal changes. Here we take a brief look at management, covering both historical
developments and various approaches to understanding it. The major approaches to
development of management are as follows:
1. Early Influences
2. The classical approach
3. The behavioral approach
4. Modern approach of management(Quantitative approaches: systems
perspective: contingency approach)
2.1 Early Influences
This stage of management covers the time between the beginnings of man's co-operative
effort to the start of his attempt to approach the study of management scientifically about
1880. Management functions have existed for thousands of years since people began
to work in a group/organized endeavor was recognized important for the achievement
of group goals. Though the principles of management, as we know them today, are nowhere
to be found in the ancient literature, there are enough indications to show that the
importance of management was well recognized even these days.
 The earliest Egyptian and Chinese literature, for instance, contain references to
the need for efficient and effective administration of public affairs.
 Ancient Greek literature pours to the existence of the administrative apparatus
like councils, courts, and boards of military personnel to manage the affairs of the
state.
 Socrates, a famous philosopher, was among the first to look upon management as
something different from mere technical knowledge and skills.
During that period the contribution given by religious and military groups to management
thought were significant & undeniable. For example:

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 Roman Catholic Church was one of the most effective formal organizations in the
history of western civilization. The church had a set of well-defined objectives and
effective and efficient organizational set up to achieve them. It introduces
hierarchy of authority and staff concept
 Military organizations also contributed in their own simplistic way to the
development of managerial practices though there was little use of theory in it.
Even their techniques of authority-relationships between individuals and groups,
direction, motivation, and communication underwent considerable improvement
over the years.
Generally, had there not been considerable skill in the various management functions,
those monumental accomplishments such as; the pyramid of Egypt, the Great Wall of
China & Babylon, the monument in Axum, & the temple in Lalibela, and the castle of
Gondar would not have been possible.
Until about the middle of the 18th century, the people of Western Europe used the
same methods and implements of production that had been used for centuries.
Management practice in business, government, and the church remained quite stable
through the centuries. It was carried through trial and error basis. Then within a few
decades a series of inventions were discovered and the whole picture of industrial
activity was enormously attained. That new period, commonly referred to as the industrial
revolution, was the landmark in human history. It brought massive technological
changes. It revolutionized the economic system, initiated mass production and the factory
system of production brought the need of huge collection of capital.
Those changes of production methods reduced the crafts, which were the main factors
in production into a wage earner (employees) in the factory. The introduction of mass
production, large-scale industry, the use of expensive machines, extended markets, etc
made things very complex. In addition, maintaining a harmonious relationship
between the employer & the employees was a problem. These factors brought the need
of more thoughtful, resourceful, and dynamic management. Management on
traditional lines became useless. Rule of thumb could no longer exist. It had to be
replaced by logical and rational principles, scientific approach, and psychological
handling.
A few of the contributors of early influences are:
1. Robert Owen (1771-1858):
He was a successful textile mill manager in Scotland from 1800-1828. During that
time, he carried out most of his experiments in the area of management. He recognized

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that human resources were as valuable as financial & material resources to the production
of goods. He believed that factory workers would be more productive if they were motivated
through rewards rather than punishments. He experienced with several motivating
techniques. Some of them were:
 He improved working conditions within the factory, i.e., providing meals, bath
facilities,
 Housing &marketing facilities
 Reducing the workday to 10 ½ hours with no night work for children
 Refused to hire children under the age of 10
Because of his emphasis on the workers, he is regarded as the father of modern
personnel management.
2. Charles Babbage /1792-1871/
He a British professor of mathematics, Charles Babbage become convinced that the
application of scientific principles to work processes would both increase productivity and
lower expenses. He was an early advocate of division of labor, believing that each factory
operation should be analyzed so that the various skills involved in the operation could
be isolated. He advocated profit-sharing plans & bonus systems as ways to achieve better
relations between management & labor.
Despite the long history of management, it walked as a tortoise. Because of
 low esteem to business in society
 Indifferent approaches of economists, political scientists’ psychologists, sociologists, etc
towards business organizations.
 Treatment of management as an art not as a science and
 The attitudes that successful managers are born but not made
These factors made management not develop and studied systematically and
scientifically. In the twentieth century, the situation had changed rapidly, some of
the factors that contributed to the need of a systematic management are:
1. The development of capitalism and the emergence of industries, mass production,
the concentration of workers and organization of trade unions, the growing
competition for markets, technological innovations, the increase in capital
investment, increasing obsolescence of instruments of production etc. forced
organizations to be efficient or to find out ways for efficiency.
2. The complexities of organizations, society became more complex. These
complexities of society were generated by:
- The increasing size of organizations

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 - High degree of division of labor & specialization
- Increase in government regulations & controls
- Organized trade-union activities &
- Pressure of various conflicting interest groups in society
Despite the suggestions given by the early theorists, owners & managers did not begin
to raise the concern of the problem of material & human efficiency. They raised the
issue when markets were becoming saturated, demands for greater profits and when
competition was becoming keen. This emphasis on cutting costs and increasing
efficiency led to the emergence of the classical school of management theory.
2.2. Classical Management Theory
The classical management theory arose because of the need to increase productivity and
efficiency. The emphasis was on trying to find the best way to get the most work done
by examining how the work process was actually accomplished and by scrutinizing
the skills of the workforce. Classical management consists primarily of three streams of
thought.
1. Scientific management of Frederic W. Taylor-concerned with productivity and
the management of work & workers.
2. Classical administrative management- concerned with administration with
discussing universally applicable principles of management and the nature and
management of the organization as a whole). It is identified with the Frenchman
Henri Fayol.
3. Bureaucratic theory – concerned with the bureaucratic organization and is
identified with a German author, Max Weber. He believed in one best
organizational structure – a highly formal and goal-oriented structure in which
human emotions, personal bias, and charismatic leadership are subordinated to
rational thinking and impersonal decision-making.
1. Scientific Management Theory
Although we have seen how management has been used in organized efforts since
early history, the formal study of management did not begin until early in the
twentieth century. These first studies of management often called the classical
approach, emphasized rationality and making organizations and workers as efficient
as possible. The three most important contributors to scientific management theory were
Frederick W. Taylor and the husband-wife team of Frank and Lillian Gilbreth and
Henry Gantt.
Frederic Winslow Taylor /1856-1915/

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If you had to pinpoint when modern management theory was born, 1911 might be a good
choice. That was when Frederick Winslow Taylor’s Principles of Scientific Management
was published. Its contents were widely embraced by managers around the world.
Taylor’s book described the theory of scientific management: the use of scientific
methods to define the “one best way” for a job to be done. Taylor worked at the
Midvale and Bethlehem Steel Companies in Pennsylvania. He was an American
Engineer and worked in the Midvale steel co. as an apprentice pattern maker, a
common laborer, a supervisor, a master mechanic and then a chief engineer of the
steel co. That gave him many opportunities to know at first hand the problems &
attitudes of workers and to see the great opportunities for improving the quality of
management.
His major concern was to increase efficiency in production, not only to cover costs,
raise profits but also to make possible increase in pay for workers through their higher
productivity, through one best of doing a job. Taylor wanted to find the most
effective way to use people and resources in the workplace. He believed that there was
one best way of performing every process and task in industry. He thought that, to find
the best way, workers' performance of a task should be examined scientifically,
objectively, and in detail, using an empirical and experimental approach. Only then
could a more productive way of doing the job be found.
After finding the one best way of doing a job, managers should then teach it to the
workers. He thought that an incentive system rewarding fast workers and penalizing
slow workers would encourage them to adopt the new system. He believed that
scientific methods would eventually replace intuition and rule-of thumb, which had been
used in organizations up until then.
Scientific management he testified, "required complete mental revolution", he
believed that the mental revolution must occur in the workers minds and in the minds
of management as well.
Taylor also believed in that people were lazy by nature, although training could
improve performance. He especially disliked "systematic soldiering", deliberate slow
downs, and loafing promoted by what were latter called informal work groups. Thus, he
strongly believed in breaking up such groups and emphasizing rewards for individual
performance. His engineering background provided a model for establishing principles
of management that would guide scientific analysis of work so as to improve task
efficiency.
Taylor's principles can be summarized as follows.

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1. Develop a science for each element of an individual’s work. /replacing rules of
thumb with science.
2. Scientifically select than train, teach and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is done in
accordance with the principles of the science that has been developed.
4. Divide work and responsibility almost equally between management and workers.
Management does all work for which it is better suited than the workers.
Frank Gilbreth (1868-1924)
Gilbreth was primarily concerned with the method of doing work. He was concerned with
the method requiring the fewest and smallest motions as well as with the work area
and the positioning of the tools and workers themselves. The Gilbreths invented a device
called a micro chronometer that recorded a worker’s hand-and-body motions and the
amount of time spent doing each motion. Wasted motions missed by the naked eye could
be identified and eliminated.
Henry Gantt (1861-1919)
He was a contemporary of Frederick Taylor. Gantt is best known for his graphic system
of planning and control system that is still used today. His charts know as "Gantt Chart"
enables managers to visualize the completion stage of various projects, such as
procurement, of materials, manufacturing and shipping. By these means managers
coordinate related activities, avoid delays, and otherwise make sure that deadlines are
met
Assessing Scientific Management
Scientific management was successful in increasing productivity and consequently
increasing the wealth that improved the living standard of the workers. The
proponents of scientific management believed that workers are motivated primarily
by a desire to earn money to satisfy their economic and physical needs. However, they
failed that workers have social needs and that working conditions and job satisfaction
are often equally important. Highly repetitive jobs often produce boredom and
alienate employees from their job.
2. Classical Administrative Theory
Scientific management theory was aiming at improving the efficiency and
productivity of workers; consequently, it provided little guidance for managers above the
supervisory level. However, realizing the importance of efficiency operations at all levels
was critical; thus, theorists began to focus on organizations as a whole. As a result,

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classical administrative theory focuses on the total organization and attempts to
develop rules and principles that will direct managers to more efficient activities.
Henri Fayol (1841-1925)
The single greatest contributor to this theory is Henri Fayol, Now regarded as "the father of
modern operational management." He was a French mining engineer who spent many
of his later years as an executive for a French coal and Iron combines where he
worked for 30 years.Fayol found that activities of an industrial organization could be
divided into six groups.
1. Technical activities: -These include activities of production and manufacturing.
2. Commercial activities: - These include activities of buying, selling or exchange
3. Financial activities: - These activities include searching for & optimum use of
capital
4. Security activities: - These include protection of property and persons.
5. Accounting activities: - These include recording and taking stock of costs, profits &
liabilities, keeping balance sheets, and compiling statistics; and
6. Managerial activities: - These include planning, organizing, commanding, co-
coordinating and controlling.
Fayol felt that the first five activities were well known and performed by business
people, but little was known about the managerial activities and it had been the most
neglected aspect of business operations. Thus, he concentrated on /devoted much of
his time on the analysis of the managerial activities.
Fayol divided his approach of studying management into three parts.
A. Managerial qualities
B. Elements of Management: Identified functions constituting the management
process
C. General Principles of Management
1. ManagerialQualities
Fayol Considered that manager must have following qualities
 Physical ability: relating to health, vigor, and ability to effectively address the
people.
 Mental ability: to understand and learn judgment, mental vigor, and adaptability
 Moral ability: energy, firmness, initiative, loyalty, tact and dignity
 Educational ability: General acquaintance with matter not belonging exclusively to
the function performed
 Technical ability: Particular to function being performed
 Experience: Arising out of work

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2. Elements of Management:
Fayol’s divided management functions in to: planning, organizing, commanding,
coordinating, and controlling as elements of management.
1. Planning: It is the most important element or function of management and failure
to plan leads to hesitation, false step and untimely changes in directions, which
causes weakness in the organization.
2. Organizing: It is the process of bringing together physical, financial and human
resources and establishing productive relations among them for the achievement of
specific goals.
3. Commanding: This function is necessary to execute plans. This function includes
the influencing the behavior and work of others in a group to the realization of
specified goals in the given situation.
4. Coordination: Co-ordination as a function of management refers to the task of
integrating the acts of separate units of an organization to accomplish the
organizational goals effectively.
5. Controlling refers to the process of ensuring that acts of subordinates and use of
resources is in conformity with the pre-determined goals.
3. General principles of management
Based on his own experience in the field he developed fourteen principles of
management, which are useful not only in business organizations, but also in
military, religious, governmental, and in financial institutions. However, these
principles are not commandments; they are used by modifying, or adjusting to fix
the prevailing realities.These principles are
1. Division of labor - The more people specialize, the more efficiently they can
perform their work.
2. Authority & responsibility -Managers must give orders so that they can get things
done, this authority rests on the job the manager holds. Responsibility, on the
other hand, is the sense of obligation that goes with authority. Authority should
be delegated only to subordinates who are witting to assume commensurate
responsibility.
3. Discipline - members of an organization need to respect the rules and agreements
that government the organization.
4. Unity of Command - Each employee should receive instructions or orders from one
superior; he believed that it was fundamental to effective management of an

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 organization violating this principle undermines authority & jeopardizes discipline
and stability.
5. Unity of Direction -The organization should have a single plan of action to guide
managers and workers. Those operations within the organization that have the
same objective should be directed by one manager using one plan.
6. Subordination of individual interest to the general interest - the interests of any
employee or group of employees should not take precedence over the interests of the
organization as a whole.
7. Remuneration - Workers must be paid a fair wage for their services.
Compensation for work done should be fair and afford satisfaction to both
employees and employers.
8. Centralization and decentralization - refers to the degree to which subordinates
are involved in decision-making. Decreasing the role of subordinates or
concentration of authority at the top can be referred as centralization. When it is
dispersed throughout levels/increasing the involvement of subordinates in
decision making is decentralization. Fayol believed that managers should retain
final responsibility but also need to give their subordinates enough authority to
do their jobs properly.
9. Scalar Chain/The hierarchy) - The line of authority runs in order of rank from top
management to the lowest level of the enterprise. Communications should flow
through this chain or line of authority. However, if following the chain creates
delays, cross communications can be allowed if agreed to by all parties and
superiors are kept informed.
10. Order - People and materials should be order at the right place at the right time.
People particularly should be in the jobs or positions most suited for them.
11. Equity - Treat all employees fairly in justice and respect. Managers should be kind
and fair to their subordinates.
12. Stability of Tenure of personnel- high employee turnover results in inefficiently.
Management should provide orderly personnel planning and ensure replacements
are available to fill vacancies.
13. Initiative - Subordinates should be given the freedom to conceive and carry out
their plans, even though some mistakes may result.
14. Esprit de corps - Promoting team spirit will build harmony and unit within the
organization.
Fayol's principles were not meant to be exhaustive. Rather hey attempt to provide
managers with necessary building blocks to serve as guidelines for managerial

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activities. In some, the principles emphasize efficiency, order, stability, and fairness.
Managers apply these principles today. The problem with Fayol's principles of
management knew when to apply them and how to adopt them to new situations.
3. Theory of Bureaucracy
This theory is concerned with the bureaucratic organization and is identified with a
German author Max Weber. (1864-1920). He believed in one best organizational
structure, which is highly formal, and goal oriented structure, human emotions and
personal bias are subordinated by rational thinking and impersonal decision making.
He described an ideal type of organization that he called bureaucracy. It was a system
characterized by division of labor, a clearly defined hierarchy, detailed rules &
regulations and impersonal relationships.
Features of Weber's ideal bureaucracy:
1. Division of labor: - Jobs are broken down into simple, routine, and well-defined
tasks.
2. Authority Hierarchy: - Offices or positions are organized in a hierarchy so that
power and authority increases as one move up through the levels of positions in
the organization. /This is similar to scalar chain/
3. Formal selection /technical competence: - All organizational members are to be
selected on the basis of technical qualifications demonstrated by training,
education, or formal examination as opposed to friendship, family this, or other
forms of favoritism.
4. Formal Rules & Regulations: - To ensure uniformity and to regulate the action of
employees there is a heavy dependence on formal organizational rules. Rules and
regulations governing decision making and interpersonal behaviors are critical to
bureaucratic organizations. He believed that continuity in rules & regulations was
necessary to maintain order and enhance organizational achievement of goals.
Where owners, managers, and workers may come and go, the rules and regulations
provided organizational stability. Moreover, rules and regulation serve to restrict
decision makers who may feel compelled to act in their over interests of the
organization.
5. Impersonality: - Rules & controls are applied uniformly avoiding involvement with
personalities and personal preference of employees.
6. Career Orientation /Separation from ownership/: - managers are professional
officials rather than owners of the units they manage; they work for fixed salaries
and pursue their career within the organization. /This was because he believed that
owners were the causes for inefficiency/. He believed that societies are rational in
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 performing their activities. Organizations, to be efficient, they shall have to be
arranged in rational way/structured in bureaucratic way.
Contribution of Classical Management Theories
1. To efficiency & Productivity: - Their idea to increase efficiency and productivity is
applied in many organizations today.
2. Provision of guide lines and general principles of management that tend to be
important to all types of organizations
Limitation
1. Reliance on experience: - many of the writers of classical theorists wrote based on
their experience as managers or consultants to a few firms.
2. Untested assumptions: - the assumptions of classical theorists were not tested
scientifically.
3. Failure to consider informal organizations: - by stressing on formal relationship
with the organizations, classical approaches tend to ignore informal organization.
4. Human Machinery: -The classical approaches to management theorists considered
/reduced the human side of the organization to machines to make the organization
run efficiently.
2.3. Behavioral Management/Neoclassical Management Theory/Human Relations Era
As management research continued in the 20th century, questions began to come up
regarding the interactions and motivations of the individual within organizations.
Management principles developed during the classical period were simply not useful in
dealing with many management situations and could not explain the behavior of
individual employees. In short, classical theory ignored employee motivation and
behavior. As a result, the behavioral school was a natural outgrowth of this revolutionary
management experiment. This management theory is commonly referred to as the
neoclassical management theory, consists of both the human relation and behavioral
science movements. It is built based on classical management theories. It modified,
unproved and extended the classical theory. Classical theory concentrated on job
content and management of physical resources classical theory gave greater emphasis
to the man behind the machine.
Behavioral management theory:
The study of how managers should behave to motivate employees and encourage them to
perform at high levels and be committed to the achievement of organizational goals. It
emphasizes on the interaction of people in the organization in order to understand the
practice of management. It Points out the role of psychology and sociology

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understanding the individual as well as group behavior in the organization Behavioral
management theorist viewed employees as assets that can be developed not nameless
robots excepted to follow orders blindly. The most direct origins of the behavioral
approach are set in the 1930s through the 1950s. Three cornerstones of the behavioral
approach are the Hawthorne studies, Theory X and Theory Y, and Maslow’s need
hierarchy.
Major contributors are
 George Elton Mayo
 Douglas McGregor
 Abraham Maslow
George Elton Mayo (1880-1949) (Australian Psychologist)
Human relations era started in 1927 onwards. It was a movement spearheaded by
Elton Mayo. The essence of the movement was the belief that the key to higher
productivity was employee satisfaction. G.E. Mayo was one of the prominent
contributor /writer of behavioral management theory. He was known of conducting
an experiment at the Hawthorne plant at the Western Electric Co. in U.S.A. The
experiment was divided into four:
1. Illumination experiment
2. The relay assembly test room
3. The massive interview program
4. Bank wining observation roof
The Illumination Experiment was designed to prove the effect/impact of physical
surroundings such as noise, and light on productivity. The result of the experiment
was that there was little relationship/or physical surroundings did not have an impact
on productivity. However, of all the various experiments in this period, the Relay
Assembly Experiments (1927-32) captured the attention of people concerned with
human relations in industry. The relay assembly test room helped them to conclude
that the most likely cause was that changes in the social conditions and in the method
of supervision brought about the improved attitude and increased output. To
investigate these factors, they conducted a Massive Interview Program. Based on the
responses, they realized that the individuals work. Performance, position and status
in the organization were determined not only by the person himself, but by the group
members as well. His peers had an effect on his performance. In order to study this
more systematically, the research entered its fourth and final phase, that is, the bank

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wiring observation room. By this, they realized the existence of Informal Work
Groups.
To summarize, changing illumination for the test group and other conditions such as
modifying rest periods, shortening workdays, etc. did not seem to explain changes in
productivity. They found in general, that the improvement in productivity was due to
such social factors as moral, satisfactory interrelationships between members of a
workgroup and effective management a kind of managing that would understand
human behavior, especially group behavior, and serve it through such interpersonal
skills as motivating, condoling, loading and communication. This phenomenon's
arising basically from people's being "noticed," has been known as the Hawthorne
Effect.
From the Hawthorne study, Mayo and his colleagues realized that an important
contribution to the study and practice of management had evolved from the
experiment. These contributions are:
1. The Hawthorne study established that workers were not so much driven by pay
and working conditions as by psychological wants and desires which could be
satisfied by belonging to a workgroup.
2. The chance by workers to make decisions concerning the task, whether as
individuals or in a group, was a stimulus to treat the task as more important.
3. Recognition by superiors made workers feel that they made a unique and
important contribution to the operation of the organization.
Douglas McGregor- (1906-1964) Theory X and Theory Y
Douglas McGregor based on two opposite views of human behaviors introduced
Theory X and Theory Y.
Theory X
 McGregor assumed that average human being dislikes work and will try to avoid it
if possible.
 Employees are lazy; they must be controlled, coerced, and even punished to
achieve organizational goals.
 Average employees do not accept responsibility and seek direction from their
superiors. They lack ambition.
 McGregor therefore recommends organizations so structured that enable close
supervision, tight control, and mangers must exert energy to achieve
organizational objectives.
After Theory X, there were certain changes in the external environment.
Entrepreneurs took business seriously and on the scientific manner. There was an
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industrial revolution; management practices were being applied in the business.
Because of these changes McGregor prorogated Theory Y.
Theory Y
 Theory Y suggests that the average human being likes work and takes it as natural
as play.
 Employees can exercise self-direction and self-control and given the proper working
conditions,
 Average person seeks responsibilities.
 McGregor felt that wisdom is widely spread among the employees and they are
innovative and can take quality decisions.
Therefore assumes that management must appreciate the potential among employees
and adopt such management practices like delegation, job enlargement, and
management by objective. Management must appreciate the individual and
organizational goals and create such environment, which is conducive for its
attainment. Reward System, recognition and facilities for creativity should be
provided.
Abraham Maslow (1908-1970)
He is most noted for suggesting a theory that humans were motivated by needs that
exist in a hierarchy. Needs which are commonly used in the theory and its meaning is
given below.

Abraham Maslow’s original work of needs theories was undertaken with the
rehabilitation of people in mind. Today, the need hierarchy theory of Maslow is often
quoted and used in management to motivate workers. Maslow’s theory generally state
five needs of human beings Viz, Physiological, safety, belonging, (Social) esteem and

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self-actualization. The most basic needs were physiological and when satisfied, human
would then be motivated to satisfy needs for safety, love, esteem, and self-
actualization.
Elements of Neoclassical Theory
The Individual - Classical theorists neglected individual differences, which the
behavioral theorists emphasize individual differences and advice managers to
consider such differences. The Work-Group - an individual in a group develops social
works. E.g. Desire to belong, desire to be accepted by and stand well in his work
group. Workers and not isolated, unrelated individuals, rather they are social beings
and should be treated as such, by management. The existence of informal
organization is natural it cannot be denied. Managers are required to use them is
constructive purposes. The theorists described the vital effects of group psychology
and behavior on motivation and productivity. Each Workgroup has its own leader,
unwritten constitution and its own production standard imposed by social sanctions
on the group members. - Classical theorists ignored the existence and importance of
informal organizations. Participative Management - They advocated worker
participation in management. Allowing workers to participate in decision making as
a ways of increasing productivity was considered vital by neoclassical theorists.
Behavioral scientists were interested in such areas
 Organization as social system  Employee Development
 Employee Motivation  Group psychology and Attitudes
 Democratic Leadership  Human Importance in Machine
 Two-way communication system
2.4 Modern Management Theories
This stage of management is the rein of the refinement, extension, and synthesis of
the classical and behavioral theories of management. A few of the streams of this
approach are:
1) Quantitative approach
2) Systems
3) Contingency
1. Quantitative Approach
This theory of management can also be called management science or mathematical
operations research approach. It tries to offer systematic analysis and solutions to many
complex problems faced by management. New mathematical models and statistical tools

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are applied in the field of management, particularly in decision making on complex
problems. Some of the quantitative models suggested are:
- Linear Programming – Technique managers use for resource allocation choices.
- Critical path method – Technique used by manager for work scheduling.
- Economic –Order-Quantity Model – Technique used to determine the optimum
inventory levels a firm should maintain.
- Queuing (waiting) live theory)
- Probability Theory
- Etc.
Quantitative approach helps to solve many managerial problems: such as
 Production /work scheduling
 Inventory control
 Replacement of capital equipment
 Resource avocation choices
 etc.
The above problems are often solved with the help of operation techniques and
computers. As management is multidisciplinary field, different field of study such as
mathematics, statistics, economics, etc. have contributed to the development and
application of the quantitative approach to management.
In general, management science represents the use of scientific methods to facilitate
managerial planning and decision making. However, quantitative approaches to
management are limited to their usefulness. They can't take the final decision. They
can merely suggest better alternatives based on mathematical data. A mgr. has to
decide whether or not to follow the solutions suggested by these tools. Quantitative
analysis can be a valuable supplement rather than a substitute for management.
2. The Systems Approach:-
During recent years, many management scholars and writers have emphasized the
systems approach to the study and analysis of management. It is based on the
concept that an organization is a system, or an entity of interrelated parts. If you
adjust one part of the system, other parts will be affected automatically. A system is a
set of interdependent parts (departments) that processes inputs into outputs. Parts of
the system must work to support each other. Subsystems are those parts making up
the whole system Organization subsystems are functionally related activities. The
main functions of subsystems are to absorb inputs, transform them into outputs,
transfer them to users, and coordinate all of these activities.

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Key concepts in systems approach:
 Synergy:- tells us that the whole is more than the sum of its parts. When the
various parts of an organization work together, they can produce much more than
they could by working independently.
Contribution of systems approach to the development of mgt. thought:-
 It calls attention to the dynamic and interrelated nature of organizations and the
mgt. of task.
 It provides a framework within which we can plan actions and anticipate both
immediate and far-reaching consequences; at the same time, it allows us to
understand unanticipated consequences as they may develop.
 With a systems perspective, general managers can more easily maintain a balance
between the needs of the various parts of the enterprise and the needs and goals of
the firm as a whole.
The systems approach to management attempts to view the organization as a unified,
purposeful system composed of interrelated parts. Rather than dealing separately
with the various segments of an organization the systems approach gives managers a
way of looking at an organization as a whole and as a part of the larger, external
environment. In so doing systems theory tells us that the activity of any segment of
an organization in varying degrees affects the activity of every other segment.
3. The Contingency Approach
The system approach forces managers to recognize that organizations are systems
made up of interdependent parts and that a change in one part affects other parts. It
seeks to identify the characteristics of jobs, people and organizations, allowing
managers to see the interdependence between the various segments of an
organization. The basic idea of the contingency approach is that there is no one best way of
managing, planning, organizing, staffing, leading and controlling) Rather, manages must
find different ways to fit different situations, method highly effective in one situation may
not work in other situations. The contingency approach seeks to match different situations
with different management methods.

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