Class 12 Business Administration Notes · GSEB
Evolution of Management Thought
Evolution of Management Thought — follow the relay from classical to neo-classical to modern management, with each school's promoters, ideas and blind spots. GSEB Class 12 Commerce notes with a three-school timeline and behaviour-thought breakdown.
Last updated: 23 Oct 2026
Notes
Three Schools on One Timeline
Notes — the key lines
- Classical (to the end of the 19th century): Taylor, Weber, Gilbreath, Gantt, Fayol — structure and efficiency.
- Neo-classical (early 20th century): Elton Mayo's Hawthorne studies brought in behaviour.
- Modern (after 1960): Koontz and O'Donnell, Terry, Drucker, Ouchi, Prahlad — systems and interdisciplinarity.
Management thought has moved through three broad schools:
Select a node to read its significance.
Trap — The schools are cumulative, not replacements — classical structure still operates inside a modern unit.
Classical Theory
Notes — the key lines
- Classical thought runs to the end of the 19th century; promoters are Taylor, Weber, Gilbreath, Gantt, Fayol.
- Taylor gave scientific management, time-motion study, specialisation, progressive wages and scientific task distribution.
- Fayol gave general principles and levels of task; Weber contributed bureaucratic structure.
The thoughts of management presented till the end of the 19th century is known as thoughts of classical theory. Main promoters of thoughts of classical theory are Frederick Taylor, Max Weber, Gilbreath, Henry Gantt and Henry Fayol.
Taylor's contribution in thoughts of classical theory is very important. Scientific management principles presented by Frederick Taylor also exist into the thoughts of classical theory of management even today. Approach of scientific management favors scientific principles by time and motion study instead of traditional methods. Main contribution of scientific principle lies into specialization in management, progressive wages system, responsibility and scientific distribution of task.
Contribution of Henry Fayol in thoughts of classical theory is also significant. He significantly contributed to thoughts of management by presenting general principles of management. He decided levels of different tasks in business unit and tried to decide limits of tasks. To perform managerial duty at different levels, he also provided universal principles of management as guidelines.
Apart from this, there is a contribution of Max Weber into thoughts of classical theory. Till the end of the 19th century, formats and size started to change due to industrial revolution. As a result, need for changes in it arose due to some limitations of thoughts of classical theory like importance to financial motivation, less important to human approach and informal relations.
Trap — The classical limits (money-minded, ignores the human, ignores informal relations) are exam material — do not end the answer at the contributions.
Neo-Classical Theory and Human Relations
Notes — the key lines
- Neo-classical thought grew out of classical limitations and emphasises behaviour and group behaviour.
- Elton Mayo's Hawthorne studies started it; contributors include Herzberg, Likert, Argyris, McGregor, Maslow.
- Behaviour-related thought studies inter-human relations, motivation, leadership, communication, industrial disputes.
At the end of the 19th century after the industrial revolution, the format of units/industries was changed and a need arose for a new kind of management. In the start of the 20th century, Australian industrial psychologist Elton Mayo's theory of Hawthorne gave a new birth to behaviour-oriented thought. So, Elton Mayo is called promoter of thoughts of neo classical theory. Thoughts of neo classical theory emphasize upon behavior approach and group behavior for management.
Additions were made to thoughts of neo classical theory like informal organisation, human behavior, human relations, inspiration etc., which are elements based on thoughts of classical theory. Elton Mayo, Herzberg, Rensis Likert, Chris Argyris, McGregor and Maslow are main contributors in this thought. In branches of thoughts of neo classical theory, human relations or human behavior thoughts, social mechanism thought and social arrangement thought are main.
Behaviour-related thought
Management is an art of getting work from others. As Prof. Urvik said, "you manage your men, your men will manage rest of all"; likewise an employee or a person has an important place in the unit. Since management is being done by a person, management study becomes a study of inter-human relations.
The main point of management task is human behavior and human relations, hence behaviour-related thought emphasizes job satisfaction and increasing efficiency of employees by using psychological observations.
The approach drew heavily from psychology and social relations.
Key Takeaways
- Inter-human relations, motivation, leadership, information communication process and disposal of industrial disputes.
Trap — Neo-classical adds the human being — it does not discard structure; and its blind spot is neglecting economic factors.
Modern Management Thought
Notes — the key lines
- After 1960, industry changed shape and a professional class of managers emerged.
- Modern thought borrows from psychology, social studies, statistics, mathematics, computing and IT.
- Contributors: Koontz and O'Donnell, Terry, Drucker, Ouchi, Prahlad.
Key Takeaways
- Advocacy in this thought was made for psychology, social studies, statistics, mathematics and computer, and information technology.
Management gurus like Koontz O'donnell and George R. Terry have contributed to this thought. Moreover, Peter F. Drucker, William Ouchi and C.K. Prahlad have also contributed to this thought.
Trap — Modern thought is interdisciplinary, not a single new principle — an answer that lists only contributors misses the point.
60-Second Recap
Key Takeaways
- Classical (structure) → neo-classical (people) → modern (systems).
- Taylor (work) → Fayol (principles) → Weber (structure) → limits.
- Hawthorne → behaviour school → human relations → job satisfaction.
- 1960 → professional managers → interdisciplinary → systems.
Exam Questions
Exam Questions
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