THEORIES OF MANAGEMENT

Managerial planning and Decision making.

By: Andrew Kiggundu

 Abstract

The objective and purpose of this essay is to critically evaluate with

literature and evidence the influence of classical and human relations
approaches/theories to management practices, policies and procedures in
organizations today under the case study one technology company
(Google Inc), one food and beverage company( Coca-Cola), and one
logistics company (DHL).
Classical management theories predominately focus on the scientific
management theory advocated and founded by the American mechanical
engineer Frederick Winslow Taylor, Administrative management theory
developed by the French Mining Engineer Henri Fayol, and the Bureaucratic
management theory developed by a German sociologist, historian and
economist Maximilian Karl Emil Weber. On the other hand Human relation
management theories which draw on the Human Relations Motivation Theory
by George Elton Mayo who was an Australian born psychologist and industrial
researcher, Abraham Maslow's hierarchy of needs theory, Douglas McGregor’s
“Theory X and Theory Y” and Mary Parker Follett an American social worker
who advocated for a humane, liberal, unprejudiced and socially just viewpoint
of management, and last but may be not least Chris argyris’ organization
development theory. It is important to stress that human relations
management school of thought has many fathers. It is fact to say that both
classical and human relation theories of management have immensely
contributed to how dynamic organizations function and govern from both
within and externally in current times. Today’s organizational governance is an
activity of the interdisciplinary management approaches of many scholars and
researchers

Keywords: Human relations, Organizational Structure,

Management, Classical Theory.
 INTRODUCTION

According to Wikipedia.org the English verb "manage" comes from

the Italian maneggiare which derives from the two Latin words manus (hand)
and agere (to act). While management has taken on many definitions from
different scholars and thinkers, Management can simply be defined as the
skilled and technical processes by which managers get organizational tasks
accomplished through planning, mobilization, organizing, staffing,
coordinating, directing and controlling of subordinate staff and resources in
order to achieve the overall objectives and vision of an organization in an
effective and efficient manner.

REVIEW OF CLASSICAL THEORIES.

Classical Management Theory is a Body of management thought that arose in

the late 19th century fundamentally based on the economical and
physical needs of workers or employees in an organizational setting. This
model was mainly designed to streamline production operations and increase
productivity. It mainly centers on centralized decision making and leadership,
strict observance of hierarchical structures, specialization of labor and profit
maximization as evidenced below.

Scientific Management Theory by Frederick Taylor

Scientific management also known as “Taylorism” founded by Frederick

Winslow Taylor who was an American mechanical engineer is the use of
scientific, engineering and mathematical methods within an organization to
enable the most efficient and standard means of production or output. This
approach advocates for a high level of managerial control over employees that
advocates a higher number of managers to laborers, Using scientific and
precise methods such as standardization, piece rate pay, time study, motion
study and functional foremanship to determine the most efficient means of
production, a higher pay for most talented efficient employees, using scientific
methods to attract and hire most talented and qualified employees, division
and specialization of labor. Under this approach Frederick Winslow Taylor
advocated a number of guiding principles under his approach that included the
Development of science for each part of a laborer’s job, Scientific Hiring
Selection Training and Development of workers, Close and maximum
cooperation between workers and managers, Separation of roles and
responsibility in that there is a vast distinction of planning and execution
functions, Mental Revolution which focuses on change of attitudes of workers
and management towards each other which requires that management should
create suitable working condition for their workers and workers should have
un divided commitment toward their responsibilities and lastly Maximum
prosperity of employers and employees.

Administrative Principle Theory by Henri Fayol

Administrative management theory was developed by Henri Fayol (1849-1925)

who was a French mining industrialist and a prominent management theorist.
The administrative management theory is mainly concerned with principles to
be utilized by managers to coordinate the internal activities of organizations.
Under this approach organizational activities are divided into different
departments to maximize efficiency. Fayol divided all activities of an
organization into six groups that include technical activities that relate to
production or manufacturing: commercial activities that encompass buying of
raw materials, selling of finished products to consumers and any other
exchange activities deemed necessary: financial activities such as capital
optimization and capital management: security activities that is concerned with
giving protection to workers, employees and physical assets of the organization:
accounting activities which include financial control, financial reporting,
payroll, cash in, cash out and so many more: managerial activities that focus
on the fundamental functions of managers that include planning, organizing,
commanding, coordinating and controlling : fayol put together a general theory
that can be applied to all levels of management to enable managers organize
and regulate internal activities through his 14 management principles of
Division of work/specialization where different tasks and responsibilities are
awarded to different workers, Authority and Responsibility in that managers
should posses enough authority to facilitate their decision making within an
organization while Responsibility makes managers accountable for the quality
of work done under their guidance or leadership, Discipline where Both
workers and managers should be obedient to organizational rules and
regulations to enable smooth operations, Unity of Command in that
subordinates should have only one superior from which they get instructions
and to whom they shall be answerable and accountable to, Unity of Direction
so that all organization’s workers should engage in activities aimed at achieving
a unified goal, Subordination of Individual Interest which states that enterprise
goals and objectives are superior to individual personal goals, Remuneration
which focuses on Payment and compensation of workers to boost their moral
and motivation, Centralization and Decentralization-In any company, top level
management has the greatest decision making authority and power however
top management gives away some of its authority to middle management who
subsequently also give a certain degree of authority to lower management but
all strictly in line with goals and objectives of the organization, Scalar Chain
principle highlights chain of command from top to lowest, Order in that an
enterprise should maintain a well-defined work flow, Equity where All
employees should be treated with respect and prevent any form of
discrimination, Stability as It is the duty of the management to offer job
security to their workers, Initiative where Management should support and
encourage the employees to suggest ideas and opinions, the common spirit
which states the value of team spirit in an organization.

Bureaucratic Organization Theory by Max Weber

Max Weber (1864-1920) was a German scientist who developed the
Bureaucratic theory of management. This theory encourages a formal
hierarchical structure which represents a clear line of authority. This formal
hierarchical setting is the basis of central planning, control and centralized
decision-making.  The enterprise uses a strict code of conduct and rules to
exert control where workers must execute decisions made by management in a
strict form. The enterprise divides employees according to the kind of work they
perform, skills set and specialty and promotions are based on one’s merits and
performance. Under this model employees must have impersonal relationships
only necessary for them to perform tasks at hand and employment is based on
technical qualifications. While Government organizations can benefit from
bureaucratic management, business organization need quick decision-making
and flexibility and a bureaucratic model may not best serve that purpose. Max
Weber’s bureaucratic theory contributes immensely to the classical
organizational theory which states that defined organization structure coupled
with defined lines of authority is imperative in an organization to maximize
efficiency

REVIEW OF HUMAN RELATIONS THEORIES

Today Companies need their workers to be highly empowered, able to

effectively communicate and convey information, to be able to interpret fellow
employee emotions, to be liberal to fellow workers’ feelings, and respectfully
solve conflicts and arrive at resolutions in a humane manner. Human relations
theory is a school of motivational organizational thought which capitalizes on
the value of employee relationships and management, employee satisfaction,
motivation and support as a means of influencing maximum productivity. The
human relations management theory states that workers want to be part of
supportive management and in return will be more productive. This school of
thought does not view workers as machines as opposed to scientism.

Mary Parker Follett’s (1868-1933) was an American social worker,

sociologist, philosopher, management consultant and a pioneer in the fields of
organizational behavior and organizational theory. Her management theory
advocated for a humanistic and socially just management structure and
operations. Follett’s management theory laid the foundation for modern
management principles in use today. Follett differentiated between coercive
and co-active power, she suggested that organizations should function on the
principle of coactive power which involves the sharing of responsibilities and
rewards within a power structure.  Her theory advocated for Compromise in the
process of conflict resolution aimed at achieving a balanced result of interests
to foster unity and integration in a group structure. Her theory advocated for a
democratic enterprise.

George Elton Mayo (1880-1949) was an Australian born psychologist and

industrial researcher who is widely regarded as the father of the Human
Relations movement. He is known for having established and contributed to
the scientific study of modern organizational behavior through his immense
study and research on human, social, and political challenges of industrial
civilization. Mayo proposed that workers are not only motivated by pay and
environmental factors but rather their social needs play a bigger role in
influencing efficiency and productivity. His management theory focused on
managers putting into consideration the needs and opinions of their workers.
He created different scenarios to show how productivity and efficiency can
fluctuate under particular conditions which comprised of cohesiveness and
norm of a group where cohesiveness is an indicator of how well team members
get along or their comradely and norms, on the other hand emphasizes on
positive or negative behavior in a group. Under his research Groups with low
cohesiveness and low norms demonstrated a weak, ineffective and inefficient
productivity due to a total lack of motivation.
Groups with high cohesiveness and low norms also demonstrated low
productivity as the team gets on well but negative rather than positive
behaviors are encouraged and promoted.
Groups with high norms but low cohesiveness have a limited positive impact
on productivity because each individual will be working towards individual
success rather than that of the team they belong to, which has a limited impact
on overall effectiveness and efficient productivity.
Groups with high norms and high cohesiveness demonstrated the greatest
positive impact on productivity. In this type of team, each team member
supports one another to Excellency. Workers are strongly committed to the
success of each team player and the whole team as there is a strong support
structure.
Mayo is however criticized by many management scholars and fellow
sociologists that his research concerned only small and isolated groups as it
was not clear that the conditions and supervision he achieved could have been
reproduced or replicated in large groups and factory settings. He is further
critiqued for his assumption that humans, by nature, want to cooperate and
form groups, and never putting into consideration José Ortega’s proposition
that humans, by nature, are suspicious of others.
Abraham Harold Maslow’s (1908-1970) Hierarchy of Needs. Abraham
Maslow was an American psychologist who developed a hierarchy of needs to
explain human motivation. He suggested that people have basic/physiological
needs, safety needs, belongingness and love needs, Esteem needs, and self-
actualizing needs. Maslow’s theory presents the hierarchy of needs in a
pyramid shape with physiological needs at the bottom of the pyramid and more
high level needs at the top. This theory states that an individual can only move
up the pyramid of fulfilling higher level needs when their basic/physiological
needs are adequately fulfilled. These are discussed below

Physiological needs: these are biological requirements for human survival

and life such as food, water, air, shelter, clothing, warmth, sex and
reproduction, sleep. When these needs are not satisfied human life cannot
function optimally. Basic needs are a must to have and are regarded as most
important and crucial than all other needs as they must be addressed first
before moving to the next level of needs
Safety needs: Once an individual’s basic needs are fulfilled, the need for safety
and security become necessary. These include protection from violence,
protection from theft, emotional well being, job security, financial security,
health security. These needs can be fulfilled by the community, Government or
even the individual. If an individual does not feel safe in an environment, they
will seek safety elsewhere before they attempt to meet any higher level needs.

Love and belonging needs: These are social needs on the third level of
Maslow’s hierarchy. When physiological and safety needs are satisfied, human
beings then seek interpersonal relationships. These include intimacy,
friendships, trust, acceptance in a social group, affection, family.

Esteem needs: esteem needs can be broken down in two types of esteem based
on respect and acknowledgement from other members of society and esteem
based self confidence. This sums it up in the need for respect and reputation.

Self-actualization needs: These are the highest level in Maslow's hierarchy of

needs. They can be defined as the realization of one’s true potential, realizing
one’s deepest desires, capacities and purpose in life. These can include
education, skill development, learning a new language, winning awards,
compassion for others, traveling the world and so on. Self actualization is a
growth need in that it can make you happier but you’re not harmed without it.
 Maslow’s Hierarchy of Need

Extracted from simplypsychology.org

Douglas Murray McGregor (1906-1964) was an American management

professor at the MIT Sloan School of Management who developed the theory of
X and the theory of Y in his book “The Human Side of Enterprise”. He
promoted theory Y as the basis of good management and that workers are not
merely cost of goods sold in an enterprise as Theory X portrays.

Theory X assumes that workers are naturally lazy, unmotivated, have a

distaste for work, avoid work responsibilities, have no ambition and need to be
controlled and forced to deliver, need maximum supervision which inevitably
makes it necessary to have an authoritarian and coercive style of management
or leadership. This theory requires heavy management and supervision to have
a firm grip of control on workers. In theory X, management does not offer
motivational support to workers so they behave as expected. There is little
delegation of authority and decisions remain firmly centralized.

Theory Y assumes that workers enjoy working, take responsibility to fulfill set
goals and don’t need much direction, are self-motivated and can solve tasks at
hand through creativity, ingenuity and imagination. This theory encourages a
participative style of leadership where there is a much more delegation of
authority, employees are encouraged to share ideas and opinions and
participate in decision making.
Without a doubt McGregor's ideas have had tremendous influence on the
management of modern enterprises today.

Chris argyris’(1923-2013)organization development theory. Argyris’

research explored the impact of formal organizational structures, control
systems and management on workers and how they responded and adapted to
them. 

CASE STUDY OF ORGANIZATIONS

TECHNOLOGY AND INFORMATION INDUSTRY:

Google LLC is an American multinational technology company that specializes
in internet based services and products that include internet or online
advertisement, a search engine, cloud computing and a series of other software
and hardware products. Google is undeniably one of the biggest five technology
companies in the united sates. The core objective of Google is to organize
world’s information and make it accessible and useful, consequently the
company adopted a management style, leadership models and practices that
enabled it become the success it is today.

Google focuses o making work meaningful for its employees. Google’s former
Senior Vice President of people operations Laszlo Bock was credited with
helping Google employees to find meaning and purpose in their work, duties
and responsibilities. He recommended managers to make the impact of their
tasks and responsibilities personal. No wonder during his occupancy, Google
received over 100 awards as an employer of choice.

Google has a culture of open communication among its employees. The former
Senior Vice President of products at Google and current advisor of Google
parent company Alphabet Inc, Jonathan Rosenberg, once said that
transparency is one of the most crucial principle and value that managers
should practice at Google. During his occupation at Google, presentations
given to the company board of directors were shared with the company’s
45,000 employees.

Google constantly Invest in management training, for example In 2009, Google

launched Project Oxygen a multiyear research initiative to measure and
observe key management behavior in order to shape the company’s leadership
development program. This project identified the traits of toxic managers that
included a lack of emotional support, a lack of career growth and negative
attitudes towards subordinates Through Google’s Project Oxygen the company
was able achieve an overall improvement in management. The project was
successes at ensuring managers get better at decision making, coordination,
tutoring and training, communication, empowering teams, managing team
spirit, staying results-oriented, and sharing the overall vision of the company.
This is in line with the principle of Fredrick Taylor of training workers.

Google sets strict performance metrics. For example the company uses
Objectives and key results framework. This is a goal-setting platform for stating
and tracking objectives/ goals and their outcomes or results. Google uses this
formula in order to create tasks and achieve its ambitious targets which is
evidently a classical style of leadership.

Google has historically allowed its employees to spend 20% of their time
working together on projects of their passion that they believe would be
beneficial to the overall company through a top-down approach. This culture
for example fostered the creation of Google News and Google mail (Gmail)

Google uses algorithms and technology to match already existing employees to

new roles. Google algorithms organize available vacancies to be filled while
matching them with the qualifications of internal staff. Google however said
that the algorithmic system attracted allot of distrust. This is consistent with
Fredrick Wilson Taylor scientific management theory of using scientific
methods to achieve efficiency.

Build psychological safety in teams. At Google emotional and psychological

intelligence is a key element that all their managers should have. At Google
each individual is free to contribute without prejudice towards the overall
success of the team. This is in line with marry parker Follett’s management
recommendations

A key part of Google’s management and leadership culture is that managers

should listen more, not less. At Google managers are regarded as leaders with
the objective of guiding their team players towards decisions rather than just
directing them on what to do as this enables employees to sharpen their
insights.

As indicated above, it is clear that Google adopted both a classical and human
relations style of management but more significantly adopted a Human
Relations style of management to drive its daily business activities.
LOGISTICS INDUSTRY:

DHL International GmbH is a German international courier, package delivery

and express mail service, which is a Subsidiary of the German logistics firm
Deutsche Post AG. I researched its leadership and management model and
discovered the following.

DHL focuses a great priority on the health and safety of its workers. As one of
the world’s largest logistics service companies, DHL has hugely invested in the
health care of its employees through the promotion sustainable health and
accident prevention.

DHL is hugely committed to performance and motivational training. DHL has

introduced learning centers across the globe with the sole purpose of
developing its talent, for example the company established the DHL Asia Pacific
Learning Centre, DHL supply chain graduate program and the DHL Logistics
Management University. In 2008 DHL launched the Deputy Country Manager
Program in Singapore aimed at creating a pool of talented individuals to be
trained to become senior executives capable of filling country manager
positions and other high level management positions in the Asia Pacific.

Career Development is a core principle at DHL. In 2009 the Company’s

International Business Leadership Program gave more than 100 top executives
from across the Group the opportunity to advance their management skills
through strong multi-divisional networks. Since 2006 the company has given
a number of executives the opportunity to develop their skills by taking part in
the Master’s of Business Administration program in leading business schools
across the globe.

DHL promotes workforce Diversity. The company strives to make sure that
their workforce is a reflection of the community they live in. Its employees come
from a broad range of ethnic and social backgrounds. Diversity management is
therefore a core principle of their employment policy, code of conduct and
corporate culture. This enables staff to perform their duties free of prejudice
and discrimination .In 2009 DHL Supply Chain division launched the Diversity
& Respect initiative throughout Europe dedicated to hiring young people from
across the globe. In 2009 DHL Express Europe launched the “Women in
Leadership program” to support talented female workers.
Evidently DHL has gravitated to the Human Relations approach towards its
management style and minor pockets of classical management.
FOOD AND BEVERAGE INDUSTRY:
My final case study is the Coca-Cola Company an American multinational
beverage corporation headquartered in Atlanta, Georgia. The Coca-Cola
Company has interests in the manufacturing, retailing, and marketing of
nonalcoholic beverage concentrates and syrups. Below I will discuss the
company’s code of conduct and its overall leadership and management style.

Coca-Cola introduced a Diversity Advisory Council consisting of the

representative group of employees from all the levels, functions and the
business units of the company. This Council develops recommendations for all
senior management on advancing the organization’s efforts towards achieving
its diversity objectives.

The company initiates regular employee Forums where staff can connect with
likeminded individuals who share similar interests and backgrounds. The Coca
Cola company believes that developing a sense of community for its employees
enhances their ability to attract, retain, train and develop diverse talent and
ideas which gives the company competitive business advantage

Team spirit and culture is a principle culture at the Coca-Cola Company. These
teams are responsible for quality, yield and utilization. The management style
in the Coca Cola Company in Edmonton-Canada is its high Employee
Engagement focus which include five principles of Realizations delivery of the
hard stuff is simply not enough, Openly acknowledge this to the workforce, Do
what it takes to engage every employee in the space of 16 days, Involve
everyone in the design of the management style consistent with the company’s
vision and the values, Identify talented individuals across the operation act as
the internal facilitators to train out the new behavioral standards.

The Coca Cola Company follows the incentive based system for achieving peak
performance from the sales Department. Both monetary and non monetary
compensations are provided to sales representatives in order to motivate them
meet their sales targets.

Ultimately Coca Cola opted for the democratic style under the human relation
approach. This kind of management involves empowerment. In this
management both individuals and teams are assigned tasks and contribute to
decision making. Managers listen and act on the opinions of the group which
boosts the productivity of workers.
 CONCLUSION

Classical theorist used certain scientific principles to foster productivity and

efficiency while human relation theorist used a motivational and psychological
approach satisfaction of the individual to foster productivity. The classical and
human relations approaches of management both have widely and significantly
contributed and have far wide reaching applicability to management of modern
organizations across a whole range of industries today. Both approaches but
most especially the Human Relations management approach has demonstrated
a great deal of relevance and applicability to solving management challenges in
the modern economy. while it is not typically used in today’s work
environments, the classical management approach does have relevant
applicability, for example it does recommend a clear hierarch of management,
its duties and roles, division of labor and specialization which all can boost
effectiveness and efficiency.
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