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Copperbelt University
Directorate for Distance and Open Learning

Master of Business Administration (Finance)

GBS 550: Management Theory and Practice

TERM PROJECT

Written by

Ignatius Kasela Zulu

SIN: 20900369

A REVIEW OF THE PRACTICE OF CLASSICAL MANAGEMENT

THEORIES IN NATIONAL BREWERIES- A CASE STUDY OF KITWE
BREWERY.

Speaker: Monica Muiru

20 April 2021

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Abstract

The study “A review of the practice of classical management theories in National Breweries- a case

study of Kitwe Brewery." With focus of production function in the brewery was carried out. The

objective was to assess the extent of application of scientific, administrative and bureaucratic theories

of management in National Breweries Plc and the impact of this application on the progress,

development and growth of the organisation. The study used a questionnaire survey and three

hypotheses were tested. The survey population consisted of 150 employees of National Breweries Plc

and a sample of 15 people was selected. Frequency tables with simple percentages were used to

analyse the data obtained. The study showed that the application of scientific management.

Administrative and bureaucratic theories in the management of various organizations contributed to

wastage, employeeturnover, dismissal of employees, slow growth and development of national breweries and

low productivity. The study concluded that given the current performance of national breweries, more

needs to be done to apply conventional management theories so that employees are more motivated to

work in a supportive environment. It was recommended that organisations that wish to achieve the

goals of effective and efficient productivity should understand, adapt, embrace and promote the

dynamics of people (nature, needs, values, motivations and general cultural and political differences in

the environment). Organisations also need to regularly review their rules, regulations and manuals to

ensure that they reflect current trends in the business environment.

Finally, the organisation should allow initiative, innovation and participation of employees in

decision making.

Keywords: conventional management, management practice, national breweries.

Introduction
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National Breweries Plc produces, packages and markets traditional sorghum beer products in Zambia.

Popular varieties of the opaque beer are Chibuku Shake-Shake and Chibuku Super. Chibuku beer

brands are packaged in plastic cases and returnable bottles and distributed through a national network.

World-leading brewer Anheuser-Busch InBev SA has a 70% majority stake in National Breweries, but

the company is considering divesting a controlling stake to Delta Corporation, which is one of

Zimbabwe's largest holding companies by market value. National Breweries is a subsidiary of Zambia

Breweries Plc, which was previously majority owned by SAB Miller. Over the past four to five years,

National Breweries has seen a steady decline in profits, which have increased by over 150% over the

past five years.

The national breweries have a functional organisational structure, where employees' tasks are linked

to each other on the basis of common functions. All production or financial activities are thus

grouped into a single function that performs all the tasks required for that function.

The main advantages of a functional organisation are that by grouping people on the basis of their

technical and specialised skills, national breweries can facilitate both their use and their coordination

throughout the company. Functional grouping also offers better opportunities for promotion and

career development. The disadvantages are, in particular, the emergence of special interests that may

conflict with the needs of the organisation as a whole, and the difficulty of adapting this form of

organisation to issues such as product diversification or geographical dispersion. Functional

structures are probably best suited to relatively stable environments. Through the above structure,

national breweries are guided by top and middle management to achieve efficiency and

effectiveness. Additional management principles have also been developed and are used in the

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facilities where operations are conducted.

The study of classical management ideas, a set of concepts that emerged in the 19th century, has its

roots in the study of organisations. This set of theories has had and continues to have a major impact

on the organisation. These effects are evident in almost all complex organisations. An organisation

can be defined as the structure of relationships, authority, objectives, roles, activities, communication

and other factors that exist when people work together. Scientific management, administrative theory

and bureaucratic theory are the three streams of classical management theory that have emphasised

this approach. Therefore, classical theories have developed in three directions: scientific

management, administrative theory and bureaucratic theory;

(a) The scientific management theory developed by Fredrick Winslow Taylor (1856- 1915).

(b) The theory of administrative management, developed by Henri Fayol (1841-1925) and

(c) The theory of bureaucratic management proposed by Max Weber (1864-1920).

The practical effects of the three currents are largely the same, since they developed at the

same time (1900-1950). However, each of the three currents was developed by separate groups of

writers working almost entirely independently of each other.

Problem formulation

An analysis of National Brewery's annual reports from 2014 to 2020 shows that the bulk brewer has

steadily increased its turnover year on year. For example, revenues increased by 15% between 2015

and 2016 and shareholder funds increased by 12% during the same period. However, operating

income and net profit have declined over the past five years. This is despite the fact that the
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organisation has gone through three different owners and different management styles.

It focuses on the three classical management theories that were mainly aimed at increasing efficiency

and output (reducing production costs and increasing profits). Although these theories, still valid, are

widely accepted, it remains an illusion to achieve the organisational objectives of total efficiency in

national breweries.

1. The failure of National Brewery to report a profit in five years shows that although

classical management theories are still being applied, the desired objectives of National

Brewery organisations are still far from being achieved. Could it be because the theories

are not being applied correctly in these organisations? Or because of other environmental

effects.

2. The current level of material waste in national breweries demonstrates the

shortcomings of these principles in current management practices.

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Objectives of the study

The overall objective of this study is to find out the effects of classical management theories on

current management practices in national breweries Plc. The specific objectives are therefore as

follows:

1. To examine the contribution of classical management theories to the current level of waste

at national breweries Plc.

2. To discover the impact of the application of classical management theories on the p r o f i

t a b i l i t y , slow growth and development of national breweries?

Research questions

Based on the above, the following research questions will guide the study.

1. Is the waste that exists today in national breweries the result of the application of

classical management theories?

2. Has the application of classical management theories affected the p r o f i t a b i l i t y , slow

growth and development of n a t i o n a l breweries?

Assumptions for research

Based on the research objectives, the following hypotheses were formulated for the study

1 Classical management theories contribute significantly to the current level of waste in

national brewery organisations.

2 Is there a significant effect of classical management theories on the p r o f i t a b i l i t y ,

slow growth and development of d o m e s t i c

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breweries?
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Related literature review

A theory is also a coherent group of hypotheses put forward to explain the relationship between two

or more observable facts and which can be used to provide a sound basis for predicting future events.

A confirmed theory can thus become a principle. This is why the study of management theory

becomes important, as it determines our view of organisations, provides guidance for management

decisions and is a source of ideas as it allows us to look at each situation from a different point of

view.

Development of management theories before the industrial revolution

The systematic study of management as a separate branch of knowledge is new, but the practice is as

old as human society. Parliament argues that - "Management is as old as human organisation". It is

important to note that historically people have made decisions about what to do and how to do it.

Before the Industrial Revolution, around 1750-1850, human society performed manual labour and

cared for their families by producing manual labour for a particular unit. This system involved

staying at home and producing, hunting, gathering and growing this or that.

Development of management theories during and after the industrial revolution

From the above we understand that before the Industrial Revolution the production system was based

on manual labour, hunting, gathering and agriculture. However, during and after the

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Industrial Revolution there were major changes in the organisation of industry and production

methods. During these periods, machines replaced the artisanal production system and beyond;

i. Workers, raw materials, machinery and equipment were gathered under one roof or in a

group of buildings used exclusively for production.

ii. There was centralised control of labour, raw materials, production and output.

iii. A clear distinction was made between employers and employees.

The result of the Industrial Revolution was the rapid development of the factory system, which led to

large-scale production. This created complex management problems in combining and coordinating

the factors of production.

Due to the new problems created by the industrial revolution, new concepts of organisational

management started to be studied and developed. Financial control techniques, incentive systems,

planning systems and investment evaluation methods were quickly developed and applied. In this

context, Fedrick Winslow Taylor, the father of scientific management theory, Henri Fayol, the father

of management theory, and Max Weber, the proponent of bureaucracy, clearly stand out in their

work. From the writings of these authorities, other management theories and principles were

developed, known as "classical management theories".

Classical management theories:

1. Scientific management theory:-

Although Fredrick Winslow Taylor (1856-1915) is known and recognised as the father of

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scientific management, he was not alone in this field; other significant contributors to this theory

were Henry L. Gant (1861-1919), Frank B. and Lilian M. Gilbreth (1868-1924) and (1878-1972)

respectively.

a) Fredrick Winslow Taylor: In 1911, Taylor argued that managers should collect all the traditional

knowledge that employees possess and then classify and reduce it to laws, rules and formulas. They

would then develop a "science" for every part of human work to replace the old empirical methods

and select and train workers scientifically in the new methods. He also said that managers should take

over certain tasks they considered appropriate, such as work planning and scheduling, which were

previously left to the workers. The basic principles that Taylor considered to underlie the scientific

method of management were as follows:

(a) Replace rules of thumb with science (organised knowledge).

(b) Achieve harmony rather than disunity in group actions.

(c) Achieve cooperation between people, rather than chaotic individuals.

(d) Work towards maximum production, rather than limited production.

(e) Develop all employees in the best interests of themselves and the company.

Despite Taylor's great theories, which contributed greatly to the dramatic increase in productivity and

wages, they have been criticised in the following ways;

1. Workers and unions felt that the faster, tougher method of working would deplete available

labour and could lead to workers being laid off; the idea of close supervision of workers

implies a lack of initiative.

2. There has also been criticism that workers are put under undue pressure to work beyond

their capabilities.

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3. The emphasis on increasing efficiency and productivity has led to managers becoming

more autocratic and exploiting workers and customers. The use of a stopwatch or

piecework system tends to dehumanise, as it subjects workers to restrictions and unfair

practices.

It placed greater emphasis on efficiency on the shop floor, applying time and motion studies. His

management literature became shop floor management, which meant that he lost sight of the general

aspect of management. This is why Ernest Dale called him the father of industrial engineering rather

than scientific management.

b). Henry L. Gant, born in 1861, who also worked with and for Taylor between 1880 and 1901 and

who also became a consulting engineer, presented his version of scientific management to client

companies. He introduced the system of incentives and task bonuses (employees who met set

standards received a bonus). This system was more widely accepted than Taylor's piecework system.

This system still has a strong presence in management practice today.

Others who followed Taylor were Frank B. Gilbreth and his wife Lilian M. Gilbreth, who stressed

that the management system should always be in writing.

2. Administrative theory

Henri Fayol (1841-1925) was a French engineer. His most important work is Administration

Industrielle et Generate (1916). He belonged to the classical school of management theory and wrote

and researched about administration and work at about the same time as F.W. Taylor in the United

States. Fayol was interested in authority and its implementation in organisations.

He then advocated a coherent set of principles, which all organisations need to function
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properly.

Taylor was mainly interested in organisational forms, whereas Fayol was interested in the total

organisation and concentrated on management, which he considered to be the most neglected of

business activities. Fayol believed that good management practices were based on five identifiable

functions. These functions are: plan, organise, direct, co-ordinate and control. On the basis of these

functions, he developed 14 principles which he considered common to all organisations, namely

 Specialisation and division of labour, authority and corresponding responsibility, discipline,

unified management, unified leadership, subordination of individual interests to the public

interest, staff salaries, chain of command, centralisation, order, justice, stability of profession,

initiative and esprit de corps.

The theory of bureaucracy: -

Max Weber (1864-1920), German sociologist, developed a theory of bureaucratic management that

emphasised the need for a strictly defined hierarchy governed by clearly defined rules and lines of

authority. Weber believed that the ideal organisation was a bureaucracy with rationally thought-out

activities and objectives and a clearly defined division of labour.

His conclusion was that bureaucratic leadership is indispensable for the mass management required

in modern society.

His critics accused him of everything: excessive bureaucracy, rigidity, authoritarianism and a general

lack of a human face.

Critics of bureaucracy, as above, have argued that the typical response to any new problem in

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a bureaucratic organisation is to create new rules or procedures. Instead of finding creative solutions

to problems, the bureaucratic organisation and its employees spend precious time following rules and

procedures. It is therefore not surprising that Thompson (1961:152-171) lists the dysfunctions of

bureaucracy as: rigidity, impersonality, goal displacement, limitation of categorisation, costs of

control, self-control, empire building and fear. Strict adherence to rules gives rise to timidity,

conservatism and technocracy Initiative is thus limited by rules

and regulations.

The relationship between scientific, administrative and bureaucratic theories of leadership.

The three streams of classical management theory, namely scientific, administrative and bureaucratic

theory, are similar and complementary (Ile, 1999:98). Their approach focuses on human nature and

human needs. These theories advocate a formal organisation that uses specialisation and hierarchical

functional criteria to increase efficiency in achieving the organisation's objectives.

The differences are in the following areas;

1. While scientific management concentrates its unit of analysis on the physical activity of

work, management theory focuses on practical men in action and are called practising

managers; their main orientation was to prescribe principles and other concepts for the

creation of formal organisations, while bureaucracy adopted a relatively detached and

erudite view describing them as a normative model of organisation.

2. While scientific management focused on the relationship between an employee and

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his or her position in the organisation in order to improve the performance of routine

production tasks, administrative theorists explained how an organisation should be set up

and bureaucratic theory described what an organisation should be.

3. Scientific management focuses on production, administrative theory focuses on

management as part of the organisation and bureaucracy focuses on the organisation as a

whole.

4. Scientific management can be seen as an ascending theory, while administrative and

bureaucratic theories in a comparative sense are descending theories.

5. The prescriptions of administrative and bureaucratic theories were developed on the basis of

experience, while the prescriptions of scientific management were derived from specific

case studies.

Management in national breweries:

As mentioned above, National Breweries has a functional management structure that applies to all

functional groups. Focusing on the production function, it starts with a machine operator who is

supervised by a group leader who reports to a production manager who reports to the brewery's

general manager. The current management style is a mixture of Taylor's scientific leadership theory

and Weber's buerukratic theory.

Method and materials

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The study was conducted mainly through questionnaires and interviews with employees of the

national breweries. Secondary data was obtained from books, newspapers and the internet. The

sample consisted of 15 persons out of a population of 150. 15 (100%) of the distributed

questionnaires were returned. The data collected was presented in the form of frequency tables.

Data analysis and discussion

Data collected in the field was presented and analysed using descriptive statistics to provide

answers to the research questions.

Classical management theories are one of the main causes of the current level of waste in

national breweries' organisations.

Table 1:

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Y/ Questionnaire No. No Undecide
No Accep agreement d
t
I /S.
agree Disagreeme
with nt
that.
Fre q % Freq % Freq % Tota
l
(Fre
q)
1 Is 10 67 4 27 1 7% 15
% %
any
organisational
waste caused
by the
application of
classical
leadership?

The beuractic
relationship
that prevents
supervisors

and operators
on the shop
floor from
making
important
decisions in
real time.
2 TOTAL 10 67 4 27 1 7% 15
% %

According to Table (1), 10 (67%) of the respondents strongly agreed, 4 (27%) disagreed and 1

(7%) indicated that they were undecided. This implies that classical management theories

contribute significantly to the current level of waste in domestic breweries.

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Is there a significant effect of classical management theories on the p r o f i t a b i l i t y , slow growth and development of d o m

e s t i c breweries?

Table 2:

Y/N Questionnaire S.I No Undecided d

o agree with agreeme
that. nt

Disagree

Freq % Freq % Freq % Total

1 Are 6 40% 5 33% 4 27% 15

classical
management
theories the
cause of losses
and low
profitability
in our
organisation?
2 Is the 9 60% 3 20% 3 20% 15
slow
growth

and
development a
consequence of
the traditional
management of
our
organisation?
15 50% 8 27% 7 23% 30
3

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shows that 15 (50%) agreed, 8 (27%) disagreed and 7 (23%) did not agree based on the total number

of responses. This implies that financial losses, slow growth and development are classic

management theories that affect domestic breweries.

Results and discussion

From the data analysis it can be concluded that the current application of classical scientific,

administrative and bureaucratic management theories is responsible for the waste, slow growth and

development and low productivity of national breweries.

It has been found that due to the bueretic nature of the operation, machine operators are not

autonomous enough to make real-time decisions to stop operations when production losses increase.

These generated losses affect the company's profit and loss account and lead to financial losses. A

theory that emphasises efficiency on the shop floor by applying the study of time and motion, but

loses sight of the overall aspect of management, would certainly not be able to sustain the workforce

and the efficient and effective use of resources.

Summary of results:

Classical management theories contribute significantly to the current level of waste in national

breweries.

Classical management theories had a significant negative effect on the profitability of the company,

slowing down its growth and development.

CONCLUSIONS:

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Given the above, we therefore conclude that given the current performance of National

Brewery, more needs to be done on how classical management theories have been applied so

that employees are more motivated to work in a stimulating work environment. This will

significantly increase the business efficiency of staff and create an enjoyable working environment.

RECOMMENDATIONS:
In view of the above, we recommend the following.

Management should recognise individual motivation, group behaviour and interpersonal relationships

within and outside the working environment. These factors promote understanding and encourage

employees to work towards the goals of the organisation as a whole, from which they can achieve their

individual goals.

The management of organisations should apply the theories correctly because some of their aspects, if

applied correctly, will ensure the achievement of the organisation's objectives. A regular review of the

organisations' manuals, rules and regulations to ensure that the bureaucratic parameters are in line with

modern trends in the country's business environment will also contribute to the future of the

organisations.

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REFFERENCES:

1. Carroll SJ, Gillen DI. Are the classical management functions useful in describing managerial

work? Academy of management review. 1987;12 (1):38-51.

2. Mahmood Z, Basharat M, Bashir Z. Review of classical management theories. International

Journal of Social Sciences and Education. 2012;2(1):512-5120.

3. Cole GA. Management theory and practice: Cengage Learning EMEA; 2004.

4. https://www.delta.co.zw/category/operations-update/national-breweries-plc-zambia/

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