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Copperbelt University
Directorate for Distance and Open Learning

Master of Business Administration (Economics)

GBS 550: Theory and Practice in Management

TERM PROJECT

Written by

Ignatius Kasela Zulu

SIN: 20900369

EFFECTS OF CLASSICAL MANAGEMENT THEORIES ON MANAGEMENT

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

Speaker: Monica Muiru

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20
April 2021

Abstract

The study "Effects of classical management theories on management practices in national

breweries - a case study of Kitwe 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

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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

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.

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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 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
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(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 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.

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

shortcomings of these principles in current management practices.

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

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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 breweries?

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.

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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 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".
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Classical management theories:

1. Scientific management theory:-

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

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

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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.

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.

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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 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

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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

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

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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

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.

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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

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

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national breweries' organisations.

Table 1:

Y/No Questionnaire No. No Undecided

Accept agreement

I agree /S.
with Disagreemen
that. t
Fre q % Freq % Freq % Total
(Freq)
1 Is any 10 67% 4 27% 1 7% 15
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 o Questionnaire S.I No Undecide

agree agreemen dd
with t
that.
Disagree

Freq % Freq % Freq % Total

1 Are classical 6 40% 5 33% 4 27% 15
management
theories the cause
of losses and low
profitability in
our organisation?

2 Is the slow 9 60% 3 20% 3 20% 15

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.

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CONCLUSIONS:

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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