MANAGEMENT

THEORIES

Bangi, Y. (Ph.D)

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WHAT IS MANAGEMENT THEORY?
• “Management theory” is a collective
word used to describe the
evolution/development of management
thought
• It is the human thinking/theory/regarding
“what needs to be done in order to
create successful organizations, that is,
those organizations that are both
effective (i.e. do things right)

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 WHY STUDY MANAGEMENT
THEORY?
 To learn the origin, evolution and
development of management thought.
 To identify the main management
approaches/perspectives that have
emerged overtime.
 To know the pioneers behind the different
management approaches, practices
and perspectives.
 To draw lessons from the past in order to
build excellence into the present and the
future/way forward.
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 MAJOR
SCHOOLS/APPROACHES/BRANCHES OF
MANAGEMENT THEORY
 Classical School
 Behavioural/Human Relations
school
 System school
 Contingency school
 Total Quality Management
(TQM)
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 There are three major sub grouping
of the classical approach
CLASSICAL SCHOOL (EARLY 1900s)
Scientific management
Administrative management
Bureaucracy ( or bureaucratic management)

SCIENTIFIC MANAGEMENT
 Scientific management involved the systematic,
analytical study of work and work methods in
order to determine the one best way of doing
each job. The most influential writer on scientific
management was Frederick Winslow Taylor. an
American, practicing manager. He is known as
the ‘father of scientific management
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 Why Scientific Management?
 The development of a true science of
work.
 The scientific selection and
development of workers.
 The bringing together of the science of
work and the selected workers.
 Co-operation between management
and workers.

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 BENEFITS/ADVANTAGES OF SCIENTIFIC
MANAGEMENT
Productivity increased
Employees benefited from incentive payments
Workers‟ physical conditions were improved.

DRAWBACKS OF SCIENTIFIC MANAGEMENT

Fixed methods and procedures
As employees‟ pay was related to output workers
who could not perform as efficiently as usual,
through say, illness, could get into difficulty.

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 cont
Workers having to adhere to some jobs
became boring and repetitive.
All the work was planned by management,
with workers having no contribution to the
design of their work.

ADMINISTRATIVE MANAGEMENT
o The pioneer and the most important
contributor of “administrative management”
was Henri Fayol, a French, who like Taylor, was
a practicing manager.
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 cont
o Fayol developed a set of
‘management functions’ and listed „14
principles of management’ which he
emphasized could be Adapted
according to need.
o He did not claim that his list of
principles was exhaustive, but he did
say that he had found it useful.

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 FAYOL’S MANAGEMENT FUNCTIONS

Forecasting and planning-i.e. deciding what is

to be done and drawing up a strategy to
achieve an objectives.
Organizing-providing a business with
everything it needs to function (raw materials,
tools, etc.) and creating the right structure
and systems of information.
Commanding-Instructing, issuing commands
and motivating individuals

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 cont
Coordinating-Harmonizing all activities
and creating balance and proportion
between various activities
Controlling-monitoring and measuring
performance in the with the plants laid
down, ensure that the objectives are
being met.

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 FAYOL’S FOURTEEN PRINCIPLES OF
MANAGEMENT
o Division of work- Work should be
specialized so that individuals build up
expertise and become more productive.
o Authority and responsibility-authority (the
right to give orders) should be
commensurate with responsibility.
o Discipline-Management and staff must
have self discipline.
o Unity of command-Each person to only
one boss.
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 cont
o Unity of direction-Employees who do the
same kind of activities must have the
same objectives and one plan.
o Subordination of the organizational
interest to the individual interest-The
interests of the organization must be
paramount and override individual and
sectional interests.
o Remuneration-The reward system should
be fair, to both employees and the firm.
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 cont
o Centralisation/Decentralization-organizations
should apply the right degree of
centralisation/decentralization depending on
the prevailing circumstances of the business
and the quality of the staff available.
o Scalar chain-There should be a clear line of
authority from the top to bottom of the
organization.
o Order-The organization should be ordered
with a place for all employees and activities.
A place for everything and everything in its
place. The right man in the right place.

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 cont
o Equity-All employees should be treated
fairly and equitably/justly.
o Stability of tenure of personnel-Allow time
for all employees to learn their job and
job and do effectively. Successful
business will tend to have a low turnover
of staff.
o Initiate-All levels within the organization
should be encouraged to show initiative
within the limits of authority and
discipline.

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 cont
o Esprit de corps-This means „in unity
there is strength‟, Rather than „divide
and rule manager should promote
teamwork and the maintenance of
interpersonal relationships.

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 BUREAUCRACY
• A major contribution to the classical school
was made by a German sociologist called
Max Weber who coined the concept of
Bureaucracy.
• Bureaucracy is a management approach
characterized by an organizational structure
in which positions and authority are defined
according to explicit rules.(Bovee,1993)

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 WEBER’S STUDY OF ORGANIZATIONS

• Weber defined three types of organizations.

Charismatic organizations: These organizations are
successful due to the personality of the leader.
Traditional organizations: In these organizations
success is based on tradition, precedent and
custom.
Legal-rational organizations: Authority is based on
rationality, The word Legal is included because
authority is based on a system of rules and
procedures. Organization of this type came to be
known as bureaucracies. The success of
bureaucracies is based on the rational use of rules
and procedures.
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 cont
According to Weber, Bureaucracies are
the most efficient forms of organizations.

CHARACTERISTICS OF BUREAUCRACY
• There is a clear chain of command.
• Rules and regulations govern action.
• Specialization and competence
determine structure.
• Selection and training is based on merit.
• Relationships are impersonal.
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 ADVANTAGES OF BUREAUCRACY

 Bureaucracy is very suitable for routine

programmable operations.
 It is appropriate to high cost, expensive
technologies, where cost of breakdown is
high; this tends to encourage close
supervision and control.
 It is also suitable in organization where
there is a high degree of inter-
dependence and need for cooperation;
 It flourishes in a stable environment.
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 cont
 Rules and regulations theoretically ensure
all issues are treated impartially and
impersonally,i.e. there are no personal
favour or favoritism.
 It provides a secure working environment
and good career opportunities.
 A clearly defined authority facilitates an
efficient flow of communication.
 Systematic procedures for work and the
division of labour based on specialization.
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 DISADVANTAGES OF BUREAUCRACY

Have slow internal communications due to

the need to comply with rules and
procedures.
They are inflexible and offer limited scope for
personal freedom and creativity
It is not appropriate for encouraging change
and innovation since they are slow in
responding to change. Not suitable in
conditions of rapid change.
Much of the work is dull, routine and
uninspiriring.

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 cont
 It pays little attention to the individual as
an individual, but regards him/her more
as an organizational unit.
 It ignores and therefore has difficulty in
coping with the non-rational elements of
the word both inside and outside the
organizational unit.
 It cannot easily cope with non-
continuous discrete operations, e.g. one
–off job.
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 HUMAN RELATIONS SCHOOL( 1930s
AND 1940s)
The human relations school recognized the
importance of meeting the needs of
individuals and groups within organization.
Their work highlighted the need that people
have to belong to a group and to work in an
acceptable environment.
They believed that it was important for work
to be satisfying and meaningful and that
recognition together with the opportunity to
develop and progress within an organization
is very important to individuals.

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 cont
Among the pioneer of this school are
Elton Mayo who conducted the
Hawthorne experiment.

PHILOSOPHY OF THE HUMAN RELATIONS

SCHOOL.
 People‟s needs are the decisive factor in
achieving organizational efficiency and
effectiveness. As such, there must be a
fusion between between organizational
goals and human needs.
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 cont
 Sociological and psychological factors have
overwhelming influence on employee morale
and productivity.
 Workers are not merely economic beings
being motivated by money alone.
They are also social beings responding to a
variety of social needs.
 A factory is not only a techno-economic unit
but psychological organization too. The latter
dimension far overrides the former in search
for organizational success.

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 HUMAN RELATIONS PIONEERS
 Unlike the classical theorists, who were
invariably practicing managers, the
behavioural theorists have been academic-
social scientists or behavioural scientists as
they are now, more commonly known.
 Professor Elton Mayo (1880-1949) an
Australia by birth and a Harvad School
consultant is chief architect of the human
relations school.He is edited with
conducting the studies- the Hawthorne
experiments- that triggered the behavioural
school of management.
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 The Hawthorne Experiments (contd.)
• It was inferred that workers who
receive special attention will perform
better simply because they received
that attention, which acted as a
motivator. A phenomenon labeled as
the ‘Hawthorne effect’.
• The researchers also concluded that
informal work groups - the social
environment of employees - have a
positive influence on productivity.

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 Hawthorne studies
• Ushered in an era of organizational
humanism

• Organization design should include

effects on work groups, employee
attitudes, and manager-employee
relationships.
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 SYSTEM THEORY
• The system theorists view the
organization as a system that enables
inputs to be converted into outputs.
• The systems approach concentrates
on the study of
people,structure,technology and the
surrounding environment as a whole.

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 cont
Previous approaches had concentrated
on structures(classical school) or
people(human relation school).The
systems approach encourages managers
to view the organization as whole-the
people, the structure and the
technology- and as part of a larger
environment.
The characteristics of the system are that;
o The organization receives inputs from the
environment,

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 cont
o Converts inputs into outputs, and then
o Discharge the outputs into the environment.

THREE(3) KEY COMPONENTS OF THE ORGANIZATION AS

A SYSTEM.
INPUTS-People’s materials, Information, finance etc
CONVERSIONAL(TRANSFORMATION) PROCESS-
Production and marketing activities, planning,
organizing and control mechanism, Research and
development, etc.

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 cont
OUTPUTS-Products, Services, Ideas, Waste, etc.

THE SYSTEMS APPROACH TO MANAGEMENT

 System theory is concern with looking at how
individual components interact and fit from the whole
unit. This implies that in managing any organization,
there should be co-ordination among the various
departments(subsystems) making up the organization
in order to achieve organizational objectives.
 Further, the organization as a unit must also co-
ordinate with the external environment(social, political
and economic, technological factors, competitors,
etc) which directly or indirectly affected its activities.
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 cont
 The key message of the systems approach is that
to be effective and efficient a manager must be;
o Able to see the interrelationships of the different
parts of his or her organizations and must
understand how the organization fit into its large
environment.
o Aware of the environmental forces and must
adapt the organization to them. By viewing a firm
as a single unit and as part of a larger system,
manager will have better perspective when it
comes to planning, organizing,staffing,leading
and controlling.

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 CONTIGENCY THEORY(1960s AND 1970s)

• The contingency approach is an extension of

the systems approach, which addresses the
fact that all organizations are different. Each
organization therefore must be viewed in the
light of its unique factors or contingencies.
• The contingency theorists believe that there is
no one right form of structure and
management system, but that it dependant
upon (i.e. contingent upon, hence the name)
a range of variables.

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 DETERMINANTS/DRIVERS OF
THE CONTINGENCY APPROACH
• The main determinants or drivers of the
contingency approach are related to;
• The external environment-comprises the
political, economic, social and
technological factors that influence the
organization.
• The internal environment of the
organization refers to various constraints
and resources that are available within
the organization.
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 INTERNAL DRIVERS/CONSTRAINTS
OF CONTINGENCY THEORY.
Task constraints: i.e. nature of the task
performed by individual workers including the
organization mission and objectives.
People constraints: i.e. types of individuals
employed including their levels of
competence, their motivation needs and
preferred management style
 Technological constraints: i.e. nature and
type of methods and processes used to
transform organizational inputs into outputs
i.e. goods and services and etc.

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 cont
 Structure constraints: i.e. the type of
organization structure employed-whether
mechanistic or organic-how it fits with the
task, people, technology and external
environment of the organization.

KEY MESSAGE OF THE CONTINGENCY

APPROACH TO MANAGERS.
The basic message of the contingency
approach to managers is that:
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 cont
Organizations have to cope with
different situation in different ways. There
is no single best way of managing
applicable to all situations.
In order to be effective, the internal
functioning of an organization must be
consistent with the demands of the
external environment. The managers
must keep the functioning of an
organization in harmony with the needs
of its own members and external forces.

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Total Quality Management
(TQM)

Management Fundamentals - Chapter 10 40

 What is TQM?

Is a philosophy or approach to
management that focuses on
managing the entire organization
to deliver quality goods and
services to customers.
.
Management Fundamentals - Chapter 10 41
 Total Quality Management (TQM)

This approach was implemented in

Japan after World War II and was a
major factor in their economic
renaissance.
Perhaps the best-known proponent of
this school of management was W.
Edwards Deming
 4 FOUR MAGER ELEMENTS OF TQM

TQM has at least four major elements:

1. Employee involvement is essential in preventing
quality problems before they occur.
2. A customer focus means that the organization
must attempt to determine customer needs and
wants and deliver products and services that
address them.
Total Quality Management (TQM)
3. Benchmarking means that the organization
is always seeking out other organizations
that perform a function or process more
effectively and using them as a standard, or
benchmark, to judge their own
performance. The organization will also
attempt to adapt or improve the processes
used by other companies.
 Total Quality Management (TQM)
4. A philosophy of continuous improvement
means that the organization is committed to
incremental changes and improvements over
time in all areas of the organization
 THANKS

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