MANAGEMENT

THEORIES
LESSON 1
THEORIES OF MANAGEMENT
Management theories maybe grouped into three main schools of thought or
management approaches;

1. The classical management approach (1900-1930) Rational-look at

management mainly from a “rational perspective that assumes there is
“one best way” to do things. The primary goal is maximizing productivity
(more products outputs turned in by workers over a given period of time
and efficiency (using less amount of inputs or resources to produce the
same amount of product outputs. The approach emphasizes the
completion of task through detailed and step-by-step procedures.

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Main proponent (1900-1930)

 Frederick Taylor (Father of principles of scientific

management) emphasis on scientific determination in
finding the “one best way” for worker to fulfill the
jobs assigned to them
 was an American mechanical engineer. He was widely
known for his methods to improve 
industrial efficiency. He was one of the first 
management consultants.Taylor was one of the
intellectual leaders of the Efficiency Movement and
his ideas, broadly conceived, were highly influential
in the Progressive Era (1890s–1920s)

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Henri Fayol (Father of Administrative
principles)

was a French mining engineer, mining executive,

author and director of mines who developed a
general theory of business administration that is
often called Fayolism. He and his colleagues
developed this theory independently of 
scientific management but roughly
contemporaneously. Like his contemporary 
Frederick Winslow Taylor, he is widely
acknowledged as a founder of modern management
methods.

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14 Principles of Management
1) Division of Work –dividing the labor and work
force
2) Authority -(manages have the right to give
orders and must assume responsibility for their
actions
3) Discipline- (Employees need to obey and
respect the rules of the organization )
4) Unity of Command- (each employee should
report to only one superior)
5) Unity of direction- ( one person should be in
charge of one plan that covers all activities for
the accomplishment of the same objectives)
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6) Subordination of individual interest- (he interest of any
employee or group of employees should not take precedence
over the interests of the organization as a whole.
7) Remuneration - employees should get a fair
remuneration so that the employees and the owners find
equal amount of satisfaction.
8) Centralization - implies the concentration of decision
making authority at the top management (executive
board).
9) Scalar chain - Scalar chain is the chain of all supervisors
from the top management to the person working in the
lowest rank. Scale chain identifies the path along which
communication has to flow in order for the communication to
be effective in an organization.

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10) Order -defines the order principle as the systematic, orderly and proper arrangement
of people, places and things. In his explanation of the concept of order, Fayol felt that there
was no perfect order to anything, but that any form of disorder was unacceptable.
11) Equity - means combination of fairness, kindness & justice. The employees should be
treated with kindness & equity if devotion is expected of them. It implies that managers should
be fair and impartial while dealing with the subordinates.
12) Stability of tenure of personnel - Organizations should minimize staff turnover and
role changes to maximize efficiency. If people are secure and good at their jobs, they are
happier and more productive.
14) Initiative -  under this principle, successful management provides an opportunity to its
employees to suggest new ideas, experiences and more convenient methods of work. Fayol
believed that employees should be encouraged to take the initiative in the work assigned to
them.
15) Esprit de corps ( promoting team spirit will build harmony and unity within the
organization
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 Max Weber (Father of the Principles of
bureaucracy) characterized by division of
labor, a clear authority hierarchy, formal
selection procedures, detailed rules and
regulations and impersonal relationship
 Under Weber's theory, relationships
between employees are to be only
professional only. The impersonal
environment characterized by bureaucracies
is designed to promote decision-making that
is based solely on facts and rational thinking
(not by emotions).

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2. The behavioral management approach” (1930-9150) Social Relations-ushered in human relations
view to management. These theories aim to satisfy social relations and personal fulfillment to motivate
employees to seek their best performance. In contrast to the classical approach that is task oriented, the
behavioral approach is people oriented.

Main Proponent

 Elton Mayo (Forerunner of the behavioral movement in

management) –Focus is on the social nature of work
groups.
 Mayo management theory states that employees are
motivated far more by relational factors such as
attention and camaraderie than by monetary rewards or
environmental factors such as lighting, humidity, etc.

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 Chester Barnard (Father of the cooperative
systems theory)-attention to the requirements
of the job and the needs of people who must
do them.
 Barnard developed a theory of organization
around the idea that it is a natural,
cooperative system. Important aspects of his
natural system theory include the
Inducement-Contribution Theory, altering the
motives of members to obtain cooperation
and recognition of the need for legitimate
authority.

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 Douglas McGregor (Developer of the
Theory X and Theory Y for managing
people)-Two distinct views of human beings
which govern the manager’s management
style. Theory X assumes that workers are
lazy and hate work, such that autocratic
management is adopted while Theory Y
assumes that workers will do best in their
work, such that participative management is
adopted.

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 Abraham Maslow (Father of the theory on
the hierarchy of human needs) –Hierarchy of
Human needs. Focus is on understanding and
satisfaction of employees in order to motivate
them to achieve productivity.
 Maslow believed that people perform at the
highest level of productivity and quality
when they have met the highest level need
of self actualization. While Abraham Maslow
theory has been applied in a wide range of
disciplines, behaviorist management theory is
one of the most common places to use
Maslow's concepts.
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 Chris Argyris (developer of the theory of adult
personality)-Promotion of better relations.
 Argyris's theories focused on single- and
double-loop learning, the immaturity/maturity
continuum, organizational communication and
the effects of each of these on employee
motivation, accountability and empowerment.
 As for the immaturity/maturity continuum, the
Chris Argyris theory states that successful
employee empowerment requires management
to provide opportunities for personal growth . in
which children must mature as they approach
adulthood. 
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3. The modern management approach (1950-1980) Modern Management involves several views and
techniques. One of them is the use of quantitative analysis tools and business, such as in production and
operations management. Another approach to modern management is the systems view of the organization.

Main Proponent

 W, Edwards Deming (Father of quality

movement) –Total quality management. It
promotes quality as a vital strategy for
organizations.
 is considered by many to be the father of the
total quality management movement. All of W.
Edwards Deming's theories are based on the
simple concept that continual improvement
can help increase quality while decreasing
costs,
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 Joseph Juran (Father of quality principle of plan-
control-improve)-Cycle of quality management that
ensures continuous improvement of tasks and
responsibilities.
 Juran is widely acknowledged for the addition of
the human dimension to quality management.
He advocated the training and education of
managers. Juran proposed that human relations
problems are supposed to be isolated and that the
fundamental cause of quality issues was resistance
to change

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 Peter Drucker-(Father of Modern
Management)-New information as key for
technological advancements
 Drucker believed that managers should,
above all else, be leaders. Rather than setting
strict hours and discouraging innovation, he
opted for a more flexible, collaborative
approach. He placed high importance on
decentralization, knowledge work,
management by objectives (MBO) and a
process called SMART.

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 Peter Senge (Father of the learning
organization)-Emphasis on information
sharing, teamwork and empowerment.
 The Peter Senge theory of learning
organizations creates an environment where
people are engaged in their work and
committed to the vision of the organization.
The management theory of Peter Senge
is dense with factors that include thinking
intuitively and going beyond the basic
framework of the organization.

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 Jeffrey Pfeffer (Developer of the evidence
management) –Focus on meaningful research
for management insights and report of case
studies.

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 Robert Sutton (American Professor and
researcher)-Decisions based on hard facts of
what really works
 Sutton focuses on evidence-based
management, the links (and gaps) between
managerial knowledge and organizational
action, innovation, and organizational
performance. His research style emphasizes
the development of theory and
recommendations for practice on the basis of
direct observation of organizational life and
interviews with executives, managers,
engineers, and other organization members.

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 Michael Porter - The Porter hypothesis (PH)
asserts that polluting firms can benefit from
environmental policies, arguing that well-
designed and stringent environmental
regulation can stimulate innovations, which in
turn increase the productivity of firms or the
product value for end users .
 Through Expectancy Theory, Porter codified
the major factors that impact an employee's
motivation to perform. He stated that
numerous factors fuel an employee's efforts to
reach an organizational goal, including the
expectation that performance will yield
positive rewards and that rewards will match
effort. 22
 MANAGEMENT IN THE 21ST CENTURY
Since the advent of computers and the widespread of information technology, the
nature of the organization has changed. Drucker (1999), a forerunner in knowledge
management, stressed the growing importance of information and explicit
knowledge as an organizational resource. The creation and utilization of knowledge
become the fundamental engine of wealth of the modern corporation.

Dynamism in Management
Management has to make changes in goal, objectives and other
activities according to changes taking place in the environment. The
external environment such as social, economical, technical and political
environment has great influence over the management.

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• Global Village

• Scope of international and intercultural relationships is rapidly

expanding

Challenges of a Global Manager:

 In the capacity of the ‘country manager’

 In the capacity of the ‘functional manager’
 In the capacity of the ‘busines leder’

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