Topic 2 – Management Theories Essentials of Management

Essentials of Management
Topic 2:
Management Theories © NCC Education Limited

Management Theories Topic 2 – 2.2

Scope and Coverage

This topic will cover:

• The various management theories that have been
developed throughout history
• The key contributors to these theories
• How these theories impact upon today’s
management practices

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Learning Outcomes

By the end of this topic students will be able to:

• Explain the basic principles of the management
theories that have been developed over time
• Discuss the main concepts upon which the theories
were developed
• Evaluate the ways in which the individual theories
are impacting upon the management of businesses
today

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Topic 2 – Management Theories Essentials of Management

Management Theories Topic 2 – 2.4

Development of Management
Theories
• Classical
• Human Relations (including Neo-Human Relations)
• Systems Approach
• Contingency Approach
• Quantitative Approach

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Management Theories Topic 2 – 2.5

Management Theories

Classical
Emphasis on a formal structure, hierarchy of authority,
technical efficiency and productivity and the formulation of
universal principles
Key figures: Taylor, Fayol, Weber, Urwick and Brech

Human Relations
Shift of attention to human and social factors at work: the
informal organisation and human behaviour shaping
productivity
Key figures: Mayo, Roethlisberger & Dickson

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Management Theories Topic 2 – 2.6

Management Theories

Neo-Human Relations
Focus on issues of leadership, motivation and job satisfaction
Key figures: Maslow, Herzberg, Argyris & McGregor

Systems Approach
A blend of both classical and human relations approaches
emphasising organisations as complex socio-technical
systems, and organisations as open systems (within an
external environment)
Key figures: Trist & Bamforth

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Management Theories

Contingency Approach
Recognition that there is ‘no one best way’ to organise or
manage: ‘it all depends’ on a range of situational variables.
Key figures: Burns and Stalker, Joan Woodward, Lawrence
and Lorsch, Adair & Hersey and Blanchard
Quantitative Approach
The use of statistics, computer modelling and simulations to
aid the problem solving and decision making process
Key figures: Beer, Heinze and Knowles

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Management Theories Topic 2 – 2.8

Scientific Management (Classical)

Frederick W. Taylor’s Principles of Management:

• Develop a science for each element of an individual’s work

(based on well organised, clearly defined and fixed
principles)
• Select, train and develop the worker
• Specialisation of work (an employee per job)
• Ensure that work is done in accordance with the principles
of the science that has been developed
• Divide work and responsibility almost equally between
management and workers

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Management Theories Topic 2 – 2.9

Applying Scientific Management

Today

• Analysing basic work tasks to be undertaken

• Using time and motion studies to eliminate wasted
effort and activities
• Management by performance – pay awarded
according to the level of output
• Development of expertise and professionalism in
the workplace

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Management Theories Topic 2 – 2.10

General Administrative Theorists

(classical approaches)
Two most prominent theorists:
• Henri Fayol – 14 principles of management
• Max Weber - bureaucracy

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Management Theories Topic 2 – 2.11

Henri Fayol’s 14 principles of

Management
• Division of work
• Subordination of
• Scalar chain of authority individual interests
• Correspondence of • Discipline
authority and
• Order
responsibility
• Stability of personnel
• Appropriate
centralisation • Equity
• Unity of command • Remuneration
• Unity of direction • Esprit de corps
• Initiative

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Management Theories Topic 2 – 2.12

Weber’s Bureaucracy

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Management Theories Topic 2 – 2.13

Human Relations Approach

The Hawthorne Studies – provided new insights into

individual and group behaviour. Conducted at the
Western Electric Company (1927–32) under the
direction of Elton Mayo. Consisted of two key
elements:

• The Relay Assembly Room

• The Bank Wiring Observation Room

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Management Theories Topic 2 – 2.14

Human Relations Approach

The Relay Assembly Room: 6 women were
segregated in a different room where they were
observed under varied working conditions, resulting
in changes to:
• Lighting
• Heating
• Rest Periods

Whatever the change to the working conditions

productivity rose which was due to team morale

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Management Theories Topic 2 – 2.15

Human Relations Approach

The Bank Wiring Observation Room (Roethlisberger &

Dickson). 14 men were segregated from the department, and
observed working under more or less normal working
conditions. Findings:
• Group formed its own identity
• Developed own norms and behaviours
• Believed in a ‘fair days work for a fair days pay’
• Controlled work output by social pressures. Over
performers were known as ‘rate-busters’ and
underperformers as ‘chisellers‘
• Sabotaged the efforts of an unpopular supervisor

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Applying the Human Relations Approach

Today

• Helps to design motivating jobs

• Used by managers to aid team building and
development
• Used to encourage open communication
• Provides the foundation for current thinking on
motivation, leadership, group behaviour and
development

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Management Theories Topic 2 – 2.17

The Systems Approach

A system is a combination of interrelated and

independent parts formed in a manner that
produces a integrated whole.

• Closed system – systems that are not influenced

by their environment
• Open system – systems that dynamically interact
with their environment

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Management Theories Topic 2 – 2.18

Using the Systems Approach Today

• Assists management in ensuring that

independent parts of an organisation work
together
• Helps to recognise that decisions taken in one
department will impact others
• Emphasises the fact that organisations are not
self-contained
• Organisations must pay attention to their external
environment and the changes occurring e.g.
technology, customers, regulations and suppliers
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Management Theories Topic 2 – 2.19

The Contingency Approach

Key principles:
• Organisations are different (unique) – size, goals,
work etc
• They face different situations and challenges
• Therefore require different approaches to
management
• No universally applicable management rules that
work in all situations – a need for flexibility

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Management Theories Topic 2 – 2.20

Contingency Variables

• Organisation size – as size increases so do

problems of coordination
• Use of technology – different technologies require
different structures and control systems
• Environmental uncertainty – degree of
uncertainty will influence the management process
• Individual differences – employees will have
different hopes and expectations of their job

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Management Theories Topic 2 – 2.21

Quantitative Approach

Application of quantitative techniques:

• Statistics
• Optimisation models
• Information models
• Computer simulations
…..to improve decision making

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Management Theories Topic 2 – 2.22

Applying the Quantitative Approach

Today
• More recently called ‘Operations Research’ or
‘Management Science’
• Contributes to management decision making in
planning and control
• Enables the understanding of problems and
explores potential solutions/outcomes
• Helps to interpret the results of software programs
in the areas of budgeting, scheduling and quality
control

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Management Theories Topic 2 – 2.23

Summary
• A number of management theories have been
developed over time
• Each theory has its own particular strengths
• The focus of the theories is primarily upon working
with and motivating people
• Many of these theories still have a significant
impact upon today’s management practices in
terms of work allocation, systems and procedures,
pay and rewards, communication and management
style
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Management Theories Topic 2 – 2.24

References

Slide 2.11: Management eighth edition by Robbins, S.P. and

Coulter, M. (Pearson/Prentice-Hall) IBN: 978-0131439948 pp
31

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Management Theories Topic 2 - 2.25

Topic 2 – Management Theories

Any Questions?

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