Management theory and practice

 Management theories.

An Introduction to their overviews

Management’s origins are conventionally traced to Frederick Winslow Taylor, a man whose single-minded obsession with efficiency led to the original management theory of note: Scientific Management, but whose mechanistic thinking has now been superseded by a greater concern for people and the environment. We rethink this conventional historical view. 

So to wrap up the introduction to management theories, we have

* Classical approach ( which focusses on employees being instructed to go through work in a bureaucratic way ( structure of working), working in a tough administrative environment and following laid down instructions ( scientific management)

* human relations theory 

This theory focusses on the employee needs at the work place which is a driving force to organisation development. Their motivation must be put first before they can perform better. 

* Systems approach theory.

This theory suggests that organization can best perform if it is treated as a system. 

As a system, the focus on its internal parts (departments) and it's external environment ( customers and stake holders) must be considered important in shaping the organization before the organization can become powerful in achieving its goals.

* Theory X & Y

Finally, the theory is in two folds.

X states that managers see employees as lazy, hence needs a push or force to get them to work.

Y states thats managers see employees as important people who play major roles, hence needs encouragement, support and motivation to excel.

Part 1

* The classical theory.( Proposed by Henri FAYOL and F.W.TAYLOR ) This states that the effectiveness of management activities lies in their ability to control the workforce through the creation of division of labour, span of control and hierarchy of authority within the organization.

THE HUMAN RELATIONS THEORY ( proposed by Professor Elton Mayo, McGregor and Herzberg )

This theory states that management efficiency is seen when the leaders are able to satisfy the needs of the workers at works and also responding to their social needs ( The human relationship of the workers is put first ). 

Difference between classical and human relation theory

1) Scientific management theory considered employee's as machine while the human relation theory saw employee's as humans who needed to be treated with respect

2) scientific management theory believed that insertives were used as motivate employees to perform their duties whiles human relation theory claimed that insertives were part of the desires that every employee was entitled and not just a bate to influence them as  a motivation factor

3) The scientific management tired employee to strict rules and orders whiles the human relation theory encourage employees to be involve in decision making as well as establishing good relation at the work place.

4) Scientific management encourage the idea of the individuals working alone whereas the human relation theory encourage employees to form groups to participate in decision making and building solid inter- personal skills 

THE CONTINGENCY THEORY ( proposed by British researchers from the Tavistock Institute of Human relations )

This theory also states that the effectiveness of management is not seen in the use of one approach of method, but through a combination of several methods at any particular point in work which calls for it.

The Contingency Approach

It base on the concept that is "no one best way" in managing people. From every situations that arises there is a set of circumstance which determine how a situation is to be.

The Contingency Approach

It base on the concept that is "no one best way" in managing people. For every situations that arises there is a set of circumstance which determine how a situation is to be dealt with.

Part 2

The Management theories and their origins.

THE CLASSICAL APPROACH TO MANAGEMENT THEORY

Frederick Winslow Taylor was one of the earliest proponents of management theory. A mechanical engineer, he authored The Principles of Scientific Management in 1909.

At its most basic, 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. This was a new idea in the history of management. In the early-20th century, most companies still operated like dictatorships. The manager assigned the work, and the employee did it.

This was especially the case in the factories that rose out of the industrial revolution. Managers had almost no contact with employees. Instead, they issued orders and expected employees to get on with the work. There was no standardisation or science behind it. This, Taylor argued, led to unproductive workers.

He espoused fair pay for a fair day’s work. This mantra 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. These would make production as efficient as possible. This gave more responsibility to employees. They all had the same methods available, so the less productive had nothing to hide behind.

Taylor also created four principles of management as part of his work. These are:

Use scientific methods to determine the most efficient way to complete a task.

Monitor employees to determine performance. This involves offering guidance to those that aren’t as efficient as needed.

Assign employees to work that suits their skills and motivation levels. Then, coach them to reach maximum efficiency.

Managers must focus on planning and professional improvement. Employees must focus on the tasks given to them.

Some of these principles haven’t survived the test of time. The fourth, in particular, offers no way for employees to improve professionally. Yet, they do tackle common problems in the modern workplace. Most managers search for more efficient processes. Monitoring employee performance is a common practice. Still, these were different concepts of management than those practiced at the time.

Henri Fayol – Administrative Management Theory

Also active during the same time as Taylor was Henri Fayol. Having started his career at a French mining company at the age of 19, Fayol rose up the ranks. In time, he became the company’s director, managing over 1,000 people.

Henri Fayol went 10 better than Taylor when he published Administration Industrielle et Générale. He created 14 principles of management. However, most of these focused on the administrative side of management. We’ve covered his principles in depth on our blog.

Fayol developed his 14 principles while working in his directorship. As a result, they came from the direct experience of a man who had been there and done it all.

He argued that many managers didn’t interact well with their employees. In this, he agreed with Taylor. But Fayol’s principles focused less on science. Instead, he looked at how to create an efficient company structure.

He argued for employee specialisation and a focus on organisational interests. Fayol also believed that all employees should only have one direct manager.

Fayol’s book became one of the key leadership tools in the history of management. Even today, his 14 principles of management agree with most modern organisation’s aims.

Max Weber –  Bureaucratic Management Theory

One of the earliest examples of evolution in the history of management, Max Weber built on Taylor’s theory. He argued for similar principles. Weber believed that all managers must build chains of command. He also argued for standardisation.

Weber and Taylor differed in a key area. Weber realised that Taylor’s scientific theory did not account for emotions. He 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.

Weber’s bureaucratic theory argues for the following:

Detailed record-keeping at all levels of an organisation.

Employees must have clear job roles so they maintain their focus.

All organisations should have clear hierarchies.

The standardisation of common procedures.

Organisations must only hire employees who are fit for the job in question.

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.

We now know much more about hiring practices. 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.

As such, modern management theory has taken Weber’s ideas a step further. Still, his work created another important stepping stone to today’s management principles.

THE HUMAN RELATIONS THEORY

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.

Elton Mayo’s 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’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. Other theorists adopted his research. They used it to look for ways to create high-performing teams. These efforts still had the same aims of previous theories. They aimed for greater efficiency and better results. But Mayo’s work emphasised the importance of the human factor.

As a result, the Hawthorne Studies are a major benchmark in the history of management.

Ludwig von Bertalanffy – General System Theory

A biologist, Ludwig von Bertalanffy wasn’t a management theorist. In fact, his general theory related more to biology than management. Even so, his work in the 1940s proved instrumental in the history of management.

He argued that all systems are the sums of their parts. In biology, you can look at your own body for an example of this. Your organs, muscles, and bones all combine, along with everything else in your body, to make a whole. One organ or muscle on its own is not productive. But the right combination leads to an efficient body.

You may already see how this applies to management theory. Ludwig von Bertalanffy’s General System has relevance in the workplace too. Most organisations contain several departments. Each of these departments has people, all of whom have their own jobs. If one department doesn’t carry its weight, the organisation suffers. In some cases, even one person failing to do their job properly can have widespread ramifications.

Beyond this, he also argued that each element in a system reacts to its environment. Outside influences can affect how a system operates. You could argue that this relates to toxicity in the workplace. It also places an emphasis on how personal issues can affect an employee’s motivation levels.

Though a biological theory at first, general system theory applies to so much more. In fact, it’s at the root of many modern managerial theories.

THEORY X & Y

Douglas McGregor – X & Y Management Theory

In 1960, Douglas McGregor built on the teamwork-related ideas in the Hawthorne Studies. He published The Human Side of Enterprise to make his points. In that book, McGregor presents two types of management: Theory X and Theory Y.

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 X managers believe they must drag employees along to get results.

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.

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 organisation. Theory Y forms the basis of most modern management theories.

CONTINGENCY APPROACH 

William Richard  Scott described Contingency theory as ' the best way to organize snd managed people'.

The contingency approach is a management theory that suggests the most appropriate style of management is dependent on the context of the situation and that adopting a single, rigid style is inefficient in the long term. Contingency managers typically pay attention to both the situation and their own styles and make efforts to ensure both interact efficiently.

The contingency approach contrasts with other forms of leadership, such as trait-based management, whereby personality and individual make-up predict patterns of management and responses to given situations over time. Another management approach is style-based approach.

Contingency theory is beneficial to organisations because of the potential for learning from specific situations and using these lessons to influence future management of the same or similar situations. The ability to adapt to external pressures and changes is also an advantage. Contingency theory may also produce more well-rounded leaders who are able to develop their skills in multiple areas.

Chapter ( 2)

Organization as a system

A system can be defined as a collection of several parts to form a whole body or an entity. Examples of systems we know include the human body system, the solar system, communication system and the social system ( where organization is found ).

A system can be an open system or closed system. A closed system is a type of system which is does not interact with its environment, therefore is self sufficient to work or survive on its own. 

However, an open system is a type which depends itn its environment to interact with it, while surviving on the inputs coming from the environment, as well as also discharging its outputs to the environment again.

 

The inputs that an open system gets include 

* Materials

* Information

* Finance

* People

After an open system has received these inputs, the system turns them into useful outputs to be discharged. These outputs include

* finished Products

* Services

* Useful ideas

* Waste

What are the features of an open system?

They include

1) energy flowing to the system

2) a conversion of these inputs into useful products or services

3) Development of a negative force. There is a natural process which causes all open systems to break down (called entropy )

4) There is feedback. When a feedback is received and its negative, the system is awakened to correct a fault elsewhere in the operation.

5) There is a study state which balances the inputs flowing into the organization and the outputs leaving the organization

6) There is equifinality. This means that the open system has the capability to arrive at its goal attainment through several means and not just one means or pathway.

A boundary is the thin line or space between any two system or sub system.

In an organization, some employees work consistently at the external boundary. These people are those who have to deal with inputs and outputs to the system, for example employees charged to purchase materials from suppliers, looking for customers, making sales and distribution of products. The internal boundary workers are those who found in areas like personnel department, accounting department and customer service department.

The nature of open system divided into *sub systems.* 

An open system is further broken into sub systems.

In an organization, the whole organization as a single entity is the open system. The organization has several departments such as accounting, marketing, human resource, and others to form the sub systems. The relationship or boundaries between these sub systems are called interfaces. It must be acknowledged that some of the sub systems behave as open, whiles others behave as closed sub systems.

 Closed sub systems.

These include production and accounting departments. They are so because they are self contained and are affected in ways which are usually predictable.

Marketing and R&D ( research and development ) are other two open sub systems because they can become adaptable to influence or situations from the external environment, without being self contained.

Finally, if a closed system or sub system exists, it exists for efficiency and stability, but if an open system or sub system exists, it exists for uncertain and unstable condition, as well as survival.

System Approach to Management: Definition, Features and Evaluation!

In the 1960, an approach to management appeared which try to unify the prior schools of thought. This approach is commonly known as ‘Systems Approach’. Its early contributors include Ludwing Von Bertalanfty, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.

 

They viewed organisation as an organic and open system, which is composed of interacting and interdependent parts, called subsystems. The system approach is top took upon management as a system or as “an organised whole” made up of sub- systems integrated into a unity or orderly totality.

Systems approach is based on the generalization that everything is inter-related and inter­dependent. A system is composed of related and dependent element which when in interaction, forms a unitary whole. A system is simply an assemblage or combination of things or parts forming a complex whole.

One its most important characteristic is that it is composed of hierarchy of sub-systems. That is the parts forming the major system and so on. For example, the world can be considered-to be a system in which various national economies are sub-systems.

In turn, each national economy is composed of its various industries, each industry is composed of firms’ and of course a firm can be considered a system composed of sub-systems sudi as production, marketing, finance, accounting and so on.

Features of Systems Approach:

 

(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts arranged in a manner that produces a unified whole.

(ii) The various sub-systems should be studied in their inter-relationships rather, than in isolation from each other.

(iii) An organisational system has a boundary that determines which parts are internal and which are external.

(iv) A system does not exist in a vacuum. It receives information, material and energy from other systems as inputs. These inputs undergo a transformation process within a system and leave the system as output to other systems.

 

(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to change in its environment.

In the systems approach, attention is paid towards the overall effectiveness of the system rather than the effectiveness of the sub-systems. The interdependence of the sub-systems is taken into account. The idea of systems can be applied at an organisational level. In Appling system concepts, organisations are taken into account and not only the objectives and performances of different departments (sub-systems).

The systems approach is considered both general and specialised systems. The general systems approach to management is mainly concerned with formal organisations and the concepts are relating to technique of sociology, psychology and philosophy. The specific management system includes the analysis of organisational structure, information, planning and control mechanism and job design, etc.

As discussed earlier, system approach has immense possibilities, “A system view point may provide the impetus to unify management theory. By definitions, it could treat the various approaches such as the process of quantitative and behavioural ones as sub-systems in an overall theory of management. Thus, the systems approach may succeed where the process approach has failed to lead management out of the theory of jungle.”

 

Systems theory is useful to management because it aims at achieving the objectives and it views organisation as an open system. Chester Barnard was the first person to utilize the systems approach in the field of management.

He believed that the executive must steer through by keeping a balance between conflicting forces and events. A high order of responsible leadership makes the executives effective. H. Simon viewed organisation as a complex system of decision-making process.

Evaluation of System Approach:

The systems approach assists in studying the functions of complex organisations and has been utilized as the base for the new kinds of organisations like project management organisation. It is possible to bring out the inter-relations in various functions like planning, organising, directing and controlling. This approach has an edge over the other approaches because it is very close to reality. This approach is called abstract and vague. It cannot be easily applied to large and complex organisations. Moreover, it does not provide any tool and technique for managers.

Chapter ( 3)

"Management by Objectives

 (MBO) is a principle or practice of management that empowers employees. Employees take part in goal setting process and they get involved in the organisation which makes them more aligned to the organisation. As employees are involved in goal setting process it is more likely that they try to achieve set goals. Since, the goals motivates employees to works hard is called management by objectives (MBO).

Management by Exception (MBE) is a method of control. Managers intervene the work of employees only when they work outside the prescribed scope or when they can't meet the standard. Manager leaves employee free till they work within the scope and within they meet the standard."

Chapter (4)

Culture in organization

The four cultures in an organization according to Charles Handy.

Charles Handy was born in Ireland in the year 1932 and grew up to become a world known Philosopher and an expect in an organization culture. According to Handy  there are four types of organizational cultures

1) Power culture  2) Task culture 3) Person culture 4) Role culture

Power culture_ an organization which focuses so much on authority by making absolute decisions delegating responsibilities to the majority of the employee's while minority enjoy privileges is said to demonstrate power culture. With power culture the subordinate had no option than to follow instructions of their superior the employee's don't have the liberty to express their views or share their opinion in an open forum

Task culture: Organizations which have teams formed to achieve the target set by management or to solve critical problems is said to demonstrate a task culture with such organization individuals come together to form a team this team will be made up of 5 members. Again every team member has to contribute equally to accomplish a task in the best innovative way. This is when an organization grouped it's workforce into various group not less than 5 to meet the target of the organization

Person: There are certain organization feel that they they are more important than their organization. Such organization follows a culture known as person culture

4) Role culture: Is the culture where every employee is delegated roles and responsibilities according to his specialization, educational qualification and interest to extract the best out of him. In a culture like this employee 's decide what seem to be the best that they are willing to do and accept it as a  challenge.

 Chapter 3

Organization is one of the most important human relation skill because it impacts all other skills at the work place. This is very necessary because you must keep your physical work space and your work flow process organise, again staying organize is the key part of time  management and efficient work place