CIPS Level 5 Advanced Diploma

in Procurement and Supply

Module title: Managing Teams and Individuals [L5M1]

Leading global excellence in procurement and supply

 Learning Outcome 1: Understand, analyse and
apply management and organisational approaches

1.3 Analyze the origins of management and organizational behaviour

 Classical approaches to organizational behaviour and management
 The development and application of scientific management
 Bureaucracy in organizational design and structure
 The human relations approach

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Slide 1
Leading global excellence in procurement and supply
The origins of management and
organizational behaviour
• The industrial revolution sparked great debate about management
theory
• The industrial revolution allowed companies to grow far larger than
ever before and led to the creation of several different concepts of
management.
• Many came about in the years that followed. Though these concepts
evolve, they’re still relevant in the modern age.
• These theories from the history of management form the basis of
modern management theory.
theories from the history of management

The six theories from the history of management:

• Frederick Winslow Taylor – Scientific Management Theory
• Henri Fayol – Administrative Management Theory
• Max Weber – Bureaucratic Management Theory
• Professor Elton Mayo – Human Relations Management Theory
• Ludwig von Bertalanffy – General System Theory
• Douglas McGregor – X & Y Management Theory
Frederick Winslow Taylor – Scientific Management Theory

• Frederick Winslow Taylor was one of the earliest proponents of

management theory.
• Taylor (1911) – considered as the founder of the rational-economic
approach to motivating individuals to perform in the organizational setting.
• His theory proposed for the simplification of jobs
• By keeping things simple, he argued, productivity would improve.
• He also argued that managers and employees must work together.
• He advocated fair pay for a fair day’s work. This believe focused on
employee productivity: If one worker produced less than another, they did
not deserve equal pay.
• Taylor argued for the creation of scientific methods: (Analyze work
processes; Define and delegate tasks; Use employees’ skills and offer
incentives; Establish a professional hierarchy; evaluate employees’
performance and provide feedback by conducting a performance
review.)
• He believed these would make production as efficient as possible.
This gave more responsibility to employees.
Taylor’s four principles of management
• Taylor also created four principles of management as part of his work.
These are:
1. Use scientific methods to determine the most efficient way to
complete a task.
2. Monitor employees to determine performance. This involves
offering guidance to those that aren’t as efficient as needed.
3. Assign employees to work that suits their skills and motivation
levels. Then, coach them to reach maximum efficiency.
4. Managers must focus on planning and professional improvement.
Employees must focus on the tasks given to them.
Key principles of scientific management
approach
• The development of efficient work structures is a scientific endeavor
• The recruitment, selection, training and development of workers is a scientific
process
• Work must be carried out in a prescribed way
• The focus is on quantity of output and eliminating inefficiency
• There should be increased salaries for improved levels of output
• Efficient work methods require precise co-ordination and control of work
• Work and responsibility are divided between management and workers
• Workers can be motivated to work efficiently and productively in return for
the opportunity to receive a high salary
• Some of these principles haven’t survived the test of time. The fourth
offers no way for employees to improve professionally. Yet, they do
tackle common problems in the modern workplace.
• Today, scientific management is largely criticized, but should be
considered in the context of the era in which it was developed: (1911)
• Most managers still search for more efficient processes. However,
monitoring employee performance is still a common practice.
• Also active during the same time as Taylor was Henri Fayol
Henri Fayol – Administrative Management
Theory
• Henri Fayol went 10 better than Taylor and created 14 principles of
management. However, most of these focused on the administrative
side of management. Pg 39
• He argued that many managers didn’t interact well/ enough with
their employees.
• Fayol’s principles focused less on science. Instead, he looked at how
to create an efficient company structure.
• He argued for employee specialization and a focus on organizational
interests. Fayol also believed that all employees should only have one
direct manager.
Fayol developed his 14 principles

• Division of Work: In practice, employees are specialized in different

areas and they have different skills. According to Henri Fayol
specialization promotes efficiency of the workforce and increases
productivity. In addition, the specialization of the workforce increases
their accuracy and speed.
• Authority and Responsibility: In order to get things done in an
organization, management has the authority to give orders to the
employees. The accompanying power or authority gives the
management the right to give orders to the subordinates
• Discipline: often a part of the core values of a mission statement and
vision in the form of good conduct and respectful interactions. This
management principle is essential and is seen as the oil to make the
engine of an organization run smoothly
• Unity of Command: 'Unity of command’ means that an individual
employee should receive orders from one manager and that the
employee is answerable to that manager. If tasks and related
responsibilities are given to the employee by more than one manager,
this may lead to confusion which may lead to possible conflicts for
employees. By using this principle, the responsibility for mistakes can
be established more easily.
• Unity of Direction:is all about focus and unity. All employees deliver
the same activities that can be linked to the same objectives. All
activities must be carried out by one group that forms a team. These
activities must be described in a plan of action.
• Subordination of Individual Interest: here are always all kinds of
interests in an organization. In order to have an organization function
well, Henri Fayol indicated that personal interests are subordinate to
the interests of the organization (ethics). The primary focus is on the
organizational objectives and not on those of the individual. This
applies to all levels of the entire organization, including the managers.
• Remuneration: Motivation and productivity are close to one another
as far as the smooth running of an organization is concerned. This
management principle of the 14 principles of management argues
that the remuneration should be sufficient to keep employees
motivated and productive.
• The Degree of Centralization: Management and authority for
decision-making process must be properly balanced in an
organization. This depends on the volume and size of an organization
including its hierarchy. Centralization implies the concentration of
decision making authority at the top management (executive board)
• Scalar Chain:Hierarchy presents itself in any given organization. This
varies from senior management (executive board) to the lowest levels
in the organization. Henri Fayol ’s “hierarchy” management principle
states that there should be a clear line in the area of authority (from
top to bottom and all managers at all levels).
• Order: According to this principle employees in an organization must
have the right resources at their disposal so that they can function
properly in an organization. In addition to social order (responsibility
of the managers) the work environment must be safe, clean and tidy.
• Equity: The management principle of equity often occurs in the core
values of an organization. According to Henri Fayol, employees must
be treated kindly and equally. Employees must be in the right place in
the organization to do things right. Managers should supervise and
monitor this process and they should treat employees fairly and
impartially.
• Stability of Tenure of Personnel:Management strives to minimize
employee turnover and to have the right staff in the right place
• Initiative: Henri Fayol argued that with this management principle
employees should be allowed to express new ideas. This encourages
interest and involvement and creates added value for the company.
Employee initiatives are a source of strength for the organization. This
encourages the employees to be involved and interested.
• Esprit de Corps: stands for striving for the involvement and unity of
the employees. Managers are responsible for the development of
morale in the workplace; individually and in the area of
communication. Esprit de corps contributes to the development of
the culture and creates an atmosphere of mutual trust and
understanding.
• Although they are obvious, many of these matters are still used based on
common sense in current management practices in organizations.
• It remains a practical list with focus areas that are based on Henri Fayol ’s
research which still applies today due to several logical principles.
• Even today, his 14 principles of management agree with most modern
organization's aims.
Van Vliet, V. (2009). 14 Principles of Management (Fayol). Retrieved [insert
date] from Toolshero: https://www.toolshero.com/management/14-
principles-of-management/
Weber – Bureaucratic Management
Theory
• Weber and Taylor differed in a key area: EMOTIONS
• Weber realized that Taylor’s scientific theory did not account for
emotions because Taylor believed that the search for efficiency in the
process links motivation to economic gain, and he also referred to as
‘machine theory’
• Taylor argued that the rise of technology could lead to a toxic
workplace culture.
• He differs from many management theorists because of this focus on
the negatives.
• Too much change can affect morale.
Webers main principles of bureaucracy:
• Specialization and Division of Labor: Distributing and assigning specific duties to
specific roles; Giving management the authority to give commands and providing
guidelines on the methods they should use; and Assigning people to these roles
based on merit.
• Competence for Job Appointments: managers should have thorough expert
training, especially in the case of specialized positions, and that subordinate
employees should also receive training.
• Impersonality in Bureaucracy: Weber believed that the workplace should be a
professional. To ensure that all employees are treated fairly and equally,
managers should maintain an impersonal relationship with them.
• Standard Operating Procedures: policies and procedures; The rules that are
standardized and documented should detail the organizational structure, who is
responsible for certain tasks, and how tasks are supposed to be performed.
• Formal Written Records: formal written records are used to document all
organizational rules, regulations, processes, decisions, and activities
Weber’s bureaucratic theory argues for the following:

• Detailed record-keeping at all levels of an organization.

• Employees must have clear job roles so they maintain their focus.
• All organizations should have clear hierarchies.
• The standardization of common procedures.
• Organizations must only hire employees who are fit for the job in
question. See other characteristics pg 44
• With this last point, Weber touched on an important aspect of
modern business. Hiring for fit, he believed, involved searching for
employees with the correct skills. Hiring based on skill alone does not
account for a company’s culture. If a new employee’s personality does
not fit your culture, they rarely succeed.
Professor Elton Mayo – Human Relations
Management Theory
• Despite their importance, the previous concepts of management
didn’t account for people. Specifically, they all held firm that money
was the main influencer of employee performance.
• The human relations movement emerged as a response to some of
the limitations of scientific management theory. According to
scientific management, there was a logic to actions and knowledge
that boosted workplace motivation. In other words, efficiency was a
result of operational, legal and administrative improvements.
• Elton Mayo’s (1920) Studies added a new wrinkle. For five years,
Mayo studied employees at Chicago’s Western Electric Hawthorne
Works. He placed his focus on workplace conditions, and how they
affected productivity.
• His study found that relationships work as a key motivator for
employees. When working as part of a team, people become more
productive. The improvement was so marked that it became known
as “The Hawthorne Effect”.
• Mayo believed that workers are not just concerned with money but
could be better motivated by having their social needs met whilst at
work.
• He concluded that people have unique preferences and can’t be
treated as machines
• Mayo’s work laid the foundations for the focus on teamwork that
today’s management theories have. He was the first to prove that the
right people in the right teams leads to higher productivity.
• His work led to the founding of the Human Relations Management
Theory which focused on managers taking more of an interest in the
workers, treating them as people who have worthwhile opinions and
realizing that workers enjoy interacting together.
• Elton Mayo Theory suggested that the workplace is a social system
where multiple factors influence an employee’s performance. Most
times, it’s psychological and organizations need to pay attention to
these aspects for bringing about change.
Mayo concluded that workers are best motivated by:
• Better communication between managers and workers
• Greater manager involvement in employees working lives
• Working in groups or teams.
Key summary for Mayo:
• Workers motivated by having social needs met: his approach acknowledged that
people’s perceptions, attitudes and expectations play a critical role in their
workplace performance
• Workers should work in teams
• Managers should have greater involvement in employee's working life
• More two-way communication between managers and workers
Douglas McGregor – X & Y Management
Theory
• In 1960, Douglas McGregor built on the teamwork-related ideas in the
Hawthorne Studies.
• McGregor presents two types of management: Theory X and Theory Y.
• McGregor argued that Theory Y is the better choice of the two.
Modern management bears his claims out as well. Though
authoritarianism still exists, most don’t see it as the way to develop a
healthy organization. Theory Y forms the basis of most modern
management theories.
• Theory X relates to authoritarianism.
• Such managers take a negative view of their employers.
• They assume their people have no motivation and won’t work well
unless pushed. This leads to the leader taking too much control, often
micromanaging projects.
• In such an organisation, productivity plays a huge role. If an employee
doesn’t reach a certain “quota”, they don’t receive their rewards.
• It also assumes that employees have no ambition of their own.
• Theory Y built more directly from Mayo’s studies. Such managers take
a much more positive approach to their people.
• They believe that teamwork leads to better results.
• Furthermore, Theory Y managers encourage professional
development and give employees more responsibilities.
• They want to see initiative, which builds a positive workplace culture.
• Each of these theories has its own degree of relevance in modern
management.
• However, they all make up important parts of the post-industrial
history of management.
• Even today, others build upon the ideas presented in these theories.
four leadership styles
There are four management systems or four leadership styles,
according to Likert:
• System 1 - Exploitative Authoritative
• System 2 - Benevolent Authoritative
• System 3 – Consultative
• System 4 – Participative
The Likert’s Management System was developed by Rensis Likert in the
1960s. Rensis Likert with his associates observed the different patterns
and styles of management in various fields.
Exploitative Authoritative
• Decision-making and responsibility at upper levels of the
organisational hierarchy
• Little to no trust in employees
• Decisions and roles are imposed on employees
• Employees cannot openly discuss decisions and roles with managers
• Employees may engage in counter-productive behaviour
• Motivation by punishments and threats - play on fear
• Teamwork and communication are minimal
Benevolent Authoritative
• There is more two-way communication between employee and line-manager
• Decision-making extended to middle-managerial levels
• More trust towards employees, though somewhat condescendingly
• Responsibility still lies near the top of the hierarchy
• Limited employee consultation on decisions
• Employees still cannot discuss their roles with managers
• Team members may compete for rewards
• Rewards for performance, but also still a threat of punishment
• Teamwork and communication are minimal
Consultative
• Decision-making extended to lower-levels when it significantly affects their
role
• Substantial trust in employees
• Responsibility often shared with some team members
• Decisions can be formed through employee consultation processes
• Employees discuss job-related issues horizontally, and sometimes vertically
• Teams are more co-operative - communication and teamwork are good
• Motivation primarily through reward, but sometimes punishment
Participative
• Decision-making, responsibility and values are free-spread across all tiers
• Complete confidence and trust in all employees
• Decisions are formed through group participation and consultation
• Communication is free and managers actively try to understand issues
• Employees are co-operative and openly accountable
• Motivation is provided through monetary rewards and involvement in
goal-setting
• Teamwork, satisfaction and therefore productivity, are high
several important concepts which form the basis of all of Likert's
Management Systems, are notably:
• Motivation
• Leadership
• Communication
• Influence
• Decision-making
Maslow's Hierarchy of needs
• Maslow developed an approach/ theory to demonstrate how
physiological and psychological needs contribute to employees
reaching their potential if met.
• He uses his classification to show how important human relationships
were in helping individuals to realis their potential.
• He stressed that the development of healthy personal relationships
would result in individual creativity and confidence.
• He emphasized the importance of motivating the individual and
suggest that managers should look beyond the job task to consider
the feelings and needs of individuals and their cognitive contribution
Implications of Maslow’s Hierarchy of Needs Theory for Managers
• As far as the physiological needs are concerned, the managers should
give employees appropriate salaries to purchase the basic necessities
of life. Breaks and eating opportunities should be given to employees.
• As far as the safety needs are concerned, the managers should
provide the employees job security, safe and hygienic work
environment, and retirement benefits to retain them.
• As far as social needs are concerned, the management should
encourage teamwork and organize social events.
Implications of Maslow’s Hierarchy of Needs Theory for Managers
• As far as esteem needs are concerned, the managers can appreciate
and reward employees on accomplishing and exceeding their targets.
The management can give the deserved employee higher job rank /
position in the organization.
• As far as self-actualization needs are concerned, the managers can
give the employees challenging jobs in which the employees’ skills
and competencies are fully utilized. Moreover, growth opportunities
can be given to them so that they can reach the peak.
• The managers must identify the need level at which the employee is
existing and then those needs can be utilized as push for motivation.
Criticism of human relations approach

• The main goal of human relations is to help you relate better to others
• Human relations is also criticized for overemphasizing human
needs at the expense of need for accomplishment or responsibility
or for organizational task and process.
• The human relations approach undermines the role of economic
incentives in motivation and gives excessive stress on social and
psychological factors- If the wages are too low, the employees will feel
dissatisfied despite good interpersonal relations at the work place.