Elton Mayo and the Hawthorne experiments; Peter Drucker and management by objectives

1. The Hawthorne experiments (1924–1932)

The studies were conducted at the Hawthorne Works of the Western Electric Company near Chicago. The first phase was begun by the company with the National Research Council; from 1927 a Harvard team led by Elton Mayo, with F.J. Roethlisberger, and with W.J. Dickson of the company, took over. Mayo wrote up the findings in The Human Problems of an Industrial Civilization (1933); Roethlisberger and Dickson published the full report as Management and the Worker (1939).

Phase 1: Illumination experiments (1924–1927)

Workers were divided into a test group, whose lighting was varied, and a control group, whose lighting stayed constant. Output rose in both groups, and in the test group it rose even when the light was reduced almost to moonlight. The researchers concluded that something other than physical conditions was affecting output.

Phase 2: Relay assembly test room (1927–1932)

Six women assembling telephone relays were placed in a separate room and observed while rest pauses, shorter hours, free refreshments and group incentives were introduced one after another. Output rose with each change, and it stayed high even when all the improvements were withdrawn. The explanation was social: the women felt important because they were being studied, they were consulted, supervision was friendly, and they had formed a close group. This effect of being observed is now called the Hawthorne effect.

Phase 3: Mass interviewing programme (1928–1930)

More than 20,000 employees were interviewed. The interviewers moved from fixed questions to letting employees talk freely, and found that being listened to itself improved morale. The interviews revealed that complaints were often symptoms of personal or social problems rather than objective facts.

Phase 4: Bank wiring observation room (1931–1932)

Fourteen men wiring telephone banks were paid under a group incentive scheme. They did not raise output to earn more. The group had its own informal norm of a fair day’s work, and members who produced too much (“rate-busters”) or too little (“chiselers”) were brought into line by the group. The informal group had more control over output than management or money did.

Conclusions

• The worker is a social being; social and psychological factors affect output more than physical conditions.
• Informal groups exist within every formal organisation and set their own norms.
• Money is not the only motivator; recognition, belonging and participation matter.
• The style of supervision affects morale and productivity.
• Communication, including listening, improves morale.

Criticism

The samples were small; the conclusions were drawn from a few groups in one factory; the experiments lacked scientific controls; the role of money was understated (the relay room women also had a group incentive); and the approach was accused of manipulating workers into contentment rather than solving real conflicts. Despite this, the studies founded the human relations school and led to the behavioural theories of Maslow and McGregor studied in Unit V.

2. Peter F. Drucker (1909–2005)

Drucker, an Austrian-born American writer and teacher, is often called the father of modern management. His main books are The Concept of the Corporation (1946), a study of General Motors; The Practice of Management (1954), where he set out management by objectives; The Effective Executive (1966); and Management: Tasks, Responsibilities, Practices (1973).

Contributions

1. Nature of management. Management is a distinct, practical discipline; the manager is the dynamic, life-giving element in every business.
2. Purpose of business. The only valid definition of business purpose is to create a customer. Hence the two basic functions of a business are marketing and innovation.
3. Management by objectives (below).
4. Federalism and decentralisation. From his GM study he argued for decentralised divisions with central control of policy.
5. The knowledge worker. He coined the term and argued that the productivity of knowledge workers is the central management problem of the modern economy.
6. Effectiveness over efficiency. Doing the right things matters more than doing things right.
7. Social responsibility of management towards the community.

3. Management by objectives (MBO)

MBO is a process in which superior and subordinate jointly set the subordinate’s objectives, agree how results will be measured, and later review performance against those objectives. George Odiorne developed it as a system. The key words are participation, measurable goals and self-control.

Process

1. Setting organisational objectives at the top.
2. Setting departmental and individual objectives jointly with each subordinate, in specific and measurable terms (for example, reduce rejects from 4% to 2% by March).
3. Matching resources and authority to the objectives.
4. Periodic review of progress.
5. Final appraisal of performance against the objectives, and feedback.

Merits

• Clear goals; everyone knows what is expected.
• Participation raises commitment and morale.
• Gives an objective basis for performance appraisal (it reappears as a modern appraisal method in Unit IV).
• Encourages delegation and self-control.

Limitations

• Time-consuming and paper-heavy.
• Some objectives (quality of research, goodwill) are hard to quantify.
• Emphasis on short-term measurable targets.
• Fails if top management is not committed or if superiors impose goals instead of agreeing them.

How this is examined

As 6-mark short notes in Unit I of the 80-mark papers: “Briefly explain the Hawthorne experiment” (January 2025), “Implications of Hawthorne experiments” and “Contributions of Peter Drucker to management” (April 2023), and “Write a short note on MBO” (June 2025). The January 2026 100-mark paper set “Management by objectives” as a short note in Q.8.

For the Hawthorne note, name the company, the years and Mayo, give the four phases in one or two lines each, and end with the conclusions. Where the question says “implications”, the conclusions are the answer and the phases are only the introduction.