TUTORIAL 01

REVIEW OF MANAGEMENT THEORIES

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

 TUTORIAL 01
One sentence to remember in HRM

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

EXPECTED OUTCOMES AFTER THE TUTORIAL
AFTER THE TUTORIAL, STUDENTS SHOULD BE ABLE TO:

Recall and explain the context for the advent of different

management theories

Recall and explain the key ideas of different management

theories

Analyze the pros and cons of each management theory

Explain the evolution of management thoughts, as well as the

difference between personnel and human resource management

Reflect the management theories upon contemporary

business practices Prepared by: Mr. Nguyen Vuong Khoi (MIB)
WARM-UP QUESTION 1: WHEN DID THE HISTORY OF MANAGEMENT BEGIN?
https://www.youtube.com/watch?v=S8twVZf2XYs

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

WARM-UP

QUESTION 1: WHEN DID THE HISTORY OF MANAGEMENT BEGIN?

QUESTION 2: WHEN DO YOU THINK WILL BE THE END

OF MANAGEMENT?

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

TABLE OF CONTENT
PRE-SCIENTIFIC MANAGEMENT
1.1. ANCIENT THOUGHTS
1.2. FROM 1710s TO 1880s
CLASSICAL THEORIES
2.1. SCIENTIFIC MANAGEMENT
2.2. ADMINISTRATIVE MANAGEMENT
2.3. BUREAUCRATIC MANAGEMENT
NEO-CLASSICAL THEORY
3.1. THE HAWTHORNE EXPERIMENTS
3.2. HUMAN RELATIONS APPROACH

MODERN APPROACHES TO MANAGEMENT

4.1. MANAGEMENT BY OBJECTIVES (MBO)
4.2. SYSTEM APPROACH
4.3. CONTINGENCY APPROACH
4.4. MAJOR CONTRIBUTORS TO THEORY

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

TABLE OF CONTENT

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

1. PRE-SCIENTIFIC MANAGEMENT

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

 1.1. ANCIENT THOUGHTS

 The origin of management can be traced back to the days when man started living in groups.
 Early examples of management can be found in the organization of:
 The public life in ancient Greece and Romans
 The organization of the Roman Catholic Church
 The organization of military forces.

 As science was not well-developed in this period, most management thoughts

were based on observations, subjective opinions,
Preparedpolitical or religious
by: Mr. Nguyen ideologies.
Vuong Khoi (MIB)
1.1. ANCIENT THOUGHTS EVIDENCE FROM THE PUBLIC LIFE IN ANCIENT GREECE AND ROMANS

 “Treat those who are junior to you as you wish to be treated by your superiors.”
- Seneca
 “We need not prolong this meeting any further. There’s proper work to be done.”
- Homer (in the Iliad)
 “Stress and anxiety make it impossible for workers to get any sleep.”
- Theocritus
 “When making an entrance, exercise caution: don’t hold back, but don’t be over-
keen either.”
- Horace
 “A good reputation shines brightly in dark times.”
- Publilius Syrus
 “Call this accounting? The figure in the ‘total column’ is wrong and calculated
badly.”
- Gaius Lucilius
 “There hasn’t been a great genius who didn’t have a touch of madness.”
- Seneca
 “Anyone who thinks that his close competitor knows nothing, and that he is the
only one to craft clever strategic plans, is an idiot, his common sense deeply
flawed.”
- Theognis
 “How often the best brains lie hidden away!”
Prepared by: Mr. Nguyen Vuong Khoi (MIB) - Plautus
 EVIDENCE FROM THE PUBLIC LIFE IN ANCIENT GREECE AND ROMANS
1.1. ANCIENT THOUGHTS http://www.reversalpoint.com/contrast-socrates-vs-aristotle.html

Aristotle (384 - 322 BCE)

Socrates (470 - 399 BCE) Plato (427 - 347 BCE)
Choice of Actions
Fatalism
Diversity (Pluralism)
Unity (Singularism)
Governance by Expert Participatory Governance

Imperialism Expansionism Self-Preserved Liberty & Prosperity

Dialectic Knowledge Empirical Knowledge

Discord Political Regime Transformation
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1.2. FROM 1710s to 1880s HISTORICAL CONTEXT

 The advent of steam engine in 1712 marked the beginning of the 1 st

industrial revolution.
 Advancement in technologies required radical changes in
management.
 Since 1750s, the development of a formal theory of management
became absolutely necessary.
 Some pioneers in this period laid the foundations for modern
management theory and practice.

The steam engine was first invented in 1712

 The 1st industrial revolution was marked by the introduction of

steam engine, interchangeable parts, and mass production.
Prepared by: Mr. Nguyen Vuong Khoi (MIB)
 Machines in this period are mainly steam-powered. James Watt (1736 – 1819)
1.2. FROM 1710s to 1880s PIONEERS IN THE DEVELOPMENT OF MANAGEMENT THEORY

 Manufacturers made little use of science and mathematics in managerial practices.

 Scientific and mathematical methods could be applied to solve solution of business problems.
 The use of accurate observations, measurement and precise knowledge are necessary for decision making.
 Enterprise management should be based on:
 Accurate data collected from rigid investigation
 Repetition of operational actions (per hour)
 Division of work into mental and physical efforts
 Precise determination of the cost for every process
Charles Babbage (1729 -1871)  Rewards for efficient performance

 Working conditions and supervisory treatment influence the performance of workers.

 New ideas of human relations should be applied, such as:
 Shorter working hours
 Training about hygiene
 Provision of housing facilities
 Provision of canteen
 Education for children
 Although his approach was considered paternalistic, he is regarded as the father of Personnel Management.
Robert Owens (1771 - 1858)

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1.2. FROM 1710s to 1880s PIONEERS IN THE DEVELOPMENT OF MANAGEMENT THEORY

 They adopted certain  He convinced the public

managerial techniques about the need of labor
in their plant at Soho welfare schemes and
in Birmingham. enhancement in industrial
relations.

James Watt Jr. (1796 - 1848) Mathew R. Boulton (1770 - 1842) Seebohm Rowntree (1871- 1954)

 A combination of engineers and economists as industrial managers is necessary.

 Managers should have technical, managerial, and accounting skills to gain success.
 Internal experience exchange should be encouraged.
 An organized effort to pool the great fund of accumulated knowledge in the art of workshop
management.

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Henry Robinson Towne (1844 -1924)
2. CLASSICAL MANAGEMENT THEORIES

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2.1. SCIENTIFC MANAGEMENT THEORY

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QUESTION: THE SECRETARY CHOICE PROBLEM?
2.1. SCIENTIFC MANAGEMENT THEORY HISTORICAL CONTEXT

 The 2nd industrial revolution took place from 1880s to 1914:

 The advent of internal combustion engine
 Increased use of petroleum in production
 Electrification
 The establishment of railroads
 Large-scale production of iron and steel
 Large-scale businesses operating over broad areas were established.
 Low productivity and waste of resources.

Internal combustion engine was first invented in 1872

 Frederick Winslow Taylor was the first to recognize and adopt a scientific approach to enterprise
management.
 Taylor’s early findings:
 Lack of order and system were main reasons of inefficiency and wastes.
 Daily productivity of workers and the best method of performing the job were under-investigated.
 The scientific methods are suggested, fundamentally including:
 Observation
 Measurement
 Experimentation and QUESTION: WHAT IS THE MAIN LIMITATION OF THIS THEORY?
 Inference. Now let’s do a small experiment
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Frederick Winslow Taylor (1856 – 1915)
 2.1. SCIENTIFC MANAGEMENT THEORY KEY ELEMENTS

 Work study: A systematic, objective and critical examination of all factors governing the operational efficiency must be conducted for
improvement.
 Task planning: Having set the task which an average worker must strive to perform to get wages at the higher piece-rate, necessary steps
have to be taken to plan the production thoroughly so that there is no bottlenecks and the work goes on systematically.
 Selection and Training:
 Selection should be based on scientific methods and procedures.
 Selection must be systemized and entrusted to a central personnel department.
 Training must be conducted in the correct methods of work.
 Standardization: Standardization of inputs (tools, equipment, materials), optimum speed for every machine, work conditions (e.g.,
ventilation, heating, cooling, humidity, floor space, safety etc.), and methods of handling materials.
 Specialization:
 The two functions of ‘planning’ and ‘doing’ are separated.
 The ‘functional foremen’ are specialists who get involved in operational performance planning in the workshop.
 Mental Revolution:
 The industry was divided into management and labor whose interests conflicted.
Prepared by: Mr. Nguyen Vuong Khoi (MIB)
 Such conflict could be solved by improving productivity
 2.1. SCIENTIFC MANAGEMENT THEORY CONTRIBUTIONS & LIMITATIONS

 Contributions
 Focus on rational thinking on the part of management.
 Focus on systematic study and research.
 Focus on planning and control of production.
 Development of cost accounting.
 Development of scientific incentive plans.
 Focus on need for a separate personnel department.
 Focus on fatigue industrial work.

 For workers
 Speeding up of workers
 Loss of individual worker's initiative
 Problem of monotony
 Reduction of Employment
 Weakening of Trade Unions
 Exploitation of workers
 For employers
 Heavy Investment
 Loss due to re-organization
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 Unsuitable for small scale firms
2.2. ADMINISTRATIVE MANAGEMENT THEORY

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2.2. ADMINISTRATIVE MANAGEMENT THEORY KEY ELEMENTS

 Division of work
 Authority and Responsibility
 Discipline
 Unity of Command
 Unity of Direction
 Emphasis on Subordination of Personal Interest to General or Common Interest
 Remuneration
 Centralization vs. Decentralization
 Scalar Chain
 Order
Henri Fayol (1841 – 1925)
 Equity
 Stability of Tenure
 Security of income
 Security of employment
 Esprit de Corps
 Unity and cooperation make strength.
 Pride, loyalty and sense of belonging contribute to a good performance.
 Initiative
 Creative thinking and capacity to take initiative can give us sound managerial planning and execution
of predetermined plans.
Prepared by: Mr. Nguyen Vuong Khoi (MIB)
 2.2. ADMINISTRATIVE MANAGEMENT THEORY CONTRIBUTIONS & LIMITATIONS

 Contributions
 The theory provides principles for sound organization and efficient management
 The theory serves as a foundation for management training
 The theory consider organizations as living organisms rather than as mechanical machines
Henri Fayol (1841 – 1925)

 Limitations
 The principles describe a vision rather than reality
 The principles are based on personal experience rather than empirical evidence
 Successful managers rely more on developing networks and cultivating personal contacts,
rather than focus on the 14 activities recommended by Fayol.
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2.3. BUREAUCRATIC MANAGEMENT THEORY

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2.3. BUREAUCRATIC MANAGEMENT THEORY KEY ELEMENTS

 Hierarchy of authority
 Division of labor based upon functional specialization
 A system of rules
 Impersonality of interpersonal relationships
 A system of work procedures
 Placement of employees based upon technical competence
 Legal authority and power

QUESTION: WHAT IS THE MAIN LIMITATION OF THIS THEORY?

Max Weber (1864 – 1920) Now let’s do a small experiment

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2.3. BUREAUCRATIC MANAGEMENT THEORY CONTRIBUTIONS & LIMITATIONS

 Contributions
 Bureaucratic management is preferred where change is not anticipated, or where rate of change
can be predicated.
 The theory support the practice of standard operating procedures.
 The bureaucratic model brings about the conformity and formality.
 Central authority makes it effective in organizing.
 The theory supports the merit-based hiring of specialized officials.

Max Weber (1864 – 1920)

 Limitations
 The bureaucratic model implies high costs of controls.
 The model is rigid, inflexible and impersonal.
 The model implies a dominance of one-way communication.
 The model leaves room for the exploitation of power.
 Bureaucracy may trigger anxiety amongst employees due to the pressure of rules and regulations.
 Over-focus on control may detract the organization from its ultimate goals and objectives.
 Hierarchical structures may cause the waste of time, efforts and money.
 Hierarchical structures may lead to delay in decision making.
 Bureaucracy may hinder
Prepared creativity
by: Mr. andKhoi
Nguyen Vuong innovativeness.
(MIB)
 HUMAN RELATIONS, BEHAVIORAL
3. NEO-CLASSICAL MANAGEMENT THEORIES SOCIAL PSYCHOLOGICAL APPROACH

QUESTION: WHAT IS THE MAIN LIMITATION OF TAYLORISM?

Now
Prepared by: Mr. Nguyen let’s
Vuong do a small experiment
Khoi (MIB)
 3.1. THE HAWTHORNE EXPERIMENTS

Elton Mayo (1880 – 1949)

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3.1. THE HAWTHORNE EXPERIMENTS (1927-1932) KEY FINDINGS

 Illumination Experiment
 This investigated the relationship between illumination intensity and the productivity.
 The findings supported that there would be other factors that affect the productivity, rather than illumination.

 Relay Assembly Test Room Experiment

 This investigated the impact of illumination, working hours, rest hours, and other physical conditions on the output.
 The experiment was conducted on a small homogeneous work-group of 06 female workers.
 The findings supported that socio-psychological factors (e.g., feeling of being important, recognition, attention, participation, cohesive
work-group, non-directive supervision) were key factors leading to a higher productivity.

 Mass Interview Programme

 This was a systematic study on the employees' attitudes toward "working situation“.
 The findings confirmed the importance of social factors at work in the total work environment.

 Bank Wiring Test Room Experiment

 The experiment was conducted on 14 workers, under conditions which were as close as possible to normal.
 The findings included:
• Each individual was restricting output.
• The group had its own "unofficial" standards of performance.
• Individual output remained fairly constant over a period of time.
Prepared by: Mr. Nguyen Vuong Khoi (MIB)
• Informal groups play an important role in the working of an organization.
 3.1. THE HAWTHORNE EXPERIMENTS CONTRIBUTIONS & LIMITATIONS

 Contributions
 An organization is a social system, not merely a techno-economic system.
 People are also motivated by non-financial incentives, not merely financial incentives.
 Management must be based on the development of cooperative attitudes, not merely command.
 Participation and two-way communication are an important instrument in human relations movement.
 Group psychology plays an important role in any business organization.
 The key to higher productivity lies in employee morale.
 Management must pay attention to employee satisfaction for a better outcome.

 Limitations
 Mayo’s recommendations remained unidimensional, as he did not try to integrate his
conclusions with scientific management.
 Some other causes of motivation within informal groups (e.g., learning, expertise,
reflection, etc.) were unexamined.
 Re-investigation of the Hawthorne effects did not find strong empirical support to
Mayo’s conclusions.
 In dynamic organizations, it is difficult to identify the critical working environment
attributes.
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 3.2. HUMAN RELATIONS APPROACH TO MANAGEMENT

Prepared
QUESTION: WHAT IS THE FOUNDATION IDEA by:THAT
Mr. Nguyen Vuong Khoi (MIB)
UNDERLIES THE HUMAN RELATIONS APPROACH?
 3.2. HUMAN RELATIONS APPROACH TO MANAGEMENT KEY ELEMENTS

 Each worker is unique.  Workers are social beings and

 Worker satisfaction must should be treated as such.
 Informal groups are naturally and
be considered.
inevitably existent.
 Multidimensional model
 There are vital effects of group
of motivation (economic, psychology and behavior on
individual and social motivation and productivity.
factors) is needed

 Management should allow workers to participate in decision making, job content and job operation planning.
 Work conditions (e.g., plant layout, machinery, tools, etc.) must be sufficient and convenient for employees.
 Personal security and social needs of workers must be satisfied.

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 3.2. HUMAN RELATIONS APPROACH TO MANAGEMENT OTHER KEY CONTRIBUTORS

 Hugo Munsterberg is regarded as the father of industrial psychology.

 His main contributions to management theory includes:
 Studying jobs and determining which people are best suited to specific jobs
 Identifying the conditions under which employees do their best work
 Devising management strategies to influence employees to follow
management interests

Hugo Munsterberg (1863 – 1916)

 Mary Follett is amongst pioneers in humanistic approach to management.

 Her main contributions to management theory includes:
 Conflict resolution through integration often results in win-win solutions.
 Conflict is a mechanism of diversity and an opportunity to develop
integrated solutions rather than simply compromising.
 Genuine power is not coercive (power over) but coactive (power with).
 True leaders creates group power, rather than expressing personal power.
 The idea of reciprocal relationship was introduced.
Prepared by: Mr. Nguyen Vuong Khoi (MIB)
Mary Parket Follet (1868 – 1933)
3.2. HUMAN RELATIONS APPROACH TO MANAGEMENT ANOTHER CONTRIBUTOR

 His political ideology is most influential in communist countries.

 Karl Marx is the father of surplus value theory.
 The capitalist buy the labor power of the workman, applies it to
the machinery and raw materials which he owns and produces a
commodity having exchange value.
 All workers create more value at work than they receive in wages.
 The extra, surplus value, goes into the boss’s pocket as profit.

QUESTION: WHAT IS THE ORIGIN OF SURPLUS VALUE?

Karl Marx (1818 – 1883)

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3.2. HUMAN RELATIONS APPROACH TO MANAGEMENT CONTRIBUTIONS & LIMITATIONS

 Contributions
 Human relationists focused on human and social factors in organizations.
 The effect that behaviors have on the organizational performance was discussed.
 Task and psychological conditions under which employees work well were discussed.

 Limitations
 The conclusions were based on clinical insights from the Hawthorne studies, rather
than scientific evidence.
 There was an overemphasis on the psychological aspects, rather than on the
structural and technical aspects.
 It is based on the assumption that all organizational problems could be solved
through improved human relations.
 There was an overemphasis on the group work and group decision-making, but
groups may create problems and collective decision-making may not be possible in
practice.
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4. MODERN APPROACH TO MANAGEMENT

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4.1. MANAGEMENT BY OBJECTIVES (MBO)

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4.1. MANAGEMENT BY OBJECTIVES (MBO)

Father of modern management

Peter Ferdinand Drucker (1909 –2005)

QUESTION: WHAT ARE THE PROS AND CONS OF MBO?

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4.1. MANAGEMENT BY OBJECTIVES (MBO)

Peter Ferdinand Drucker (1909 –2005)

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 4.2. SYSTEM APPROACH TO MANAGEMENT

QUESTION: WHAT IS A SYSTEM? Prepared by: Mr. Nguyen Vuong Khoi (MIB)
4.2. SYSTEM APPROACH TO MANAGEMENT WHAT IS A SYSTEM?

Prepared by: Mr. Nguyen Vuong Khoi (MIB)

The “Iron Dome” of Israeli Army
4.2. SYSTEM APPROACH TO MANAGEMENT KEY ELEMENTS

Cole (2004)

QUESTION: WHAT ARE THEby:PROS

Prepared AND
Mr. Nguyen CONS
Vuong OF THIS APPROACH?
Khoi (MIB)
4.2. SYSTEM APPROACH TO MANAGEMENT CONTRIBUTIONS & LIMITATIONS

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4.3. CONTINGENCY APPROACH TO MANAGEMENT

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4.3. CONTINGENCY APPROACH TO MANAGEMENT
 There is no one best way to organize and manage.
 Management is a highly practice-oriented discipline.
 The manager should be be open-minded, pragmatic and adaptive to environment.
 Under a given situation, organizational design and managerial actions have to be adopted for the best outcome.
 One basic managerial function is to analyze and understand the environments before adopting techniques, processes and
practices.
 The application of management principles and practices should be based on the existing circumstances.

QUESTION: DO YOU THINK THE CONTINGENCY APROACH IS A

REVOLUTION OF THE SYSTEM APROACH? WHY?

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 CONTRIBUTIONS
4.3. CONTINGENCY APPROACH TO MANAGEMENT & LIMITATIONS

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4.4. KEY CONTRIBUTORS TO THE THEORY

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4.4. KEY CONTRIBUTORS TO THE THEORY

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Cole (2004)
THANK YOU <3
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