Angutech Evolution of Management Theory PDF

DR DANIEL OPUNI Evolution of the Theory of Management Session Overview  Introduction to evolution of management  Inter-disciplinary nature of management  Theories of management  classical or traditional approach,  the behavioural approach,  the system approach and the  conti...

DR DANIEL OPUNI Evolution of the Theory of Management Session Overview  Introduction to evolution of management  Inter-disciplinary nature of management  Theories of management  classical or traditional approach,  the behavioural approach,  the system approach and the  contingency approach.  Evolution of the Theory of Management Evolution of management is concerned with the various developmental stages that management has gone through over the years. Management not recognized as a distinct subject Management could be performed by anybody Management was therefore marginalized If one has not studied accounting, he cannot describe himself as accountant. The same cannot be said of management.  Changing Trend  Paradigm shift: management now regarded as distinct subject.  Evidence: the existence of many management and administration educational institutions the world over.  Management came about through personal intuition, practice and art.  Many practitioners also went through formal training (science)  The various principles of management propounded by Fayol was as a result of practice and formal training.  Inter-Disciplinary Nature of Management  Management borrow ideas from many disciplines-Economics, Accounting, Sociology.  The effective manager demonstrate rich knowledge in many fields  The need to broaden manager’s knowledge  Experts in other areas have contributed to the development of management Theories of Management  Classical or Traditional approach,  Scientific management  Administrative management  Bureaucratic management  The behavioural approach,  The system approach and  The contingency approach.  Management Science/Quantitative Approach  Classical/Traditional Approach  The key assumption-people are rational and economically oriented  It focuses extensively on formal organization  It deals with management and organization by emphasizing organization's purpose and formal structure  Emphasis on planning of work, the technical requirement of the organization, principles of management and rational and logical behavior.  The classical school tried to lay down universal principles for the structure and organisation of a business.  Branches/Dimensions of the Classical Approach The classical approach is made up of:  Scientific management  Administrative management  Bureaucratic management Scientific Management  Scientific Management  Improving general manufacturing process leading to improving productivity.  Concerned with formulating proper work procedures so that materials will flow uninterrupted.  Emphasizes scientific methods  No regard for intuition, experience, practice and guess work.  Pioneers in the field of scientific management Scientific management was based on the work of Frederick Winslow Taylor [1856-1915]. Key areas of contribution are:  Scientific methods of doing things rather than using opinion  Scientific selection of workers with clearly defined roles  Scientific education, training, and development of the worker  Scientific development of co-operative spirit between management and labour There should be a complete mental revolution (substituting scientific methods for intuition, opinion and guesswork)  Taylor was more concerned with:  Finding one best way of performing a task  His philosophy of work was based on motivation  The prosperity of employer and employees achieved through maximizing productivity Implications of Taylor’s Work  Managers have now realised the need to assign roles and responsibilities.  Managers now apply the principles of division of labour and specialization.  Managers are now concerned with designing of organizational structure  Managers at the shop–floor of manufacturing concerns now appreciate correct sequence of manufacturing operations through appropriate plant layout- product, process, fixed position etc.  The Gilbreths  The Gilbreths are credited with motion study even though Taylor mentioned it in his work.  Motion study [movement on task] is the science of reducing a job or task to its basic physical motions. It is regarded as the cornerstone of scientific management.  the Gilbreths were able to reduce the number of movements in laying bricks from 18 movements per brick to 5 movements per brick. In this way, individual output increased from 120 to 350 bricks laid per hour.  The Gilbreth’s  Credited with motion study  Also finding one best way of doing things  They practiced what they preached  They laid down systematic and scientific rules and procedures for doing work and insisted on strict adherence to them  They maintained that motion and fatigue are intertwined  Henry Gantt  Disciple of Taylor and the Gilbreths  Not happy with too much emphasis on scientific methods to the neglect of the individual worker  He was not in favour of differential reward system (it does not motivate).  Henry Gantt  He was also not in favour of the differential reward system since to him, had little motivational impact. His new idea on reward system was as follows:  Every worker who completed a day’s assigned workload was to be given a 50-cent bonus.  The next reward system was a bonus for each worker who accomplished the set standard and  Additional bonus if all the workers collectively achieve the standard.  This reward system would spur supervisors on to train their workers to work hard and earn more. General contributions/limitations form scientific management Contributions Limitations  Scientific approach to doing  Work gets exhausted leading to things. redundancy and lay offs  Scientific improvement in  Little regard for human feelings working methods which leads to increased productivity all  Too much emphasis on other things being equal. productivity and profit  Payment by results  No regard for discretion and  The basis for advanced studies initiative in motion studies (work studies)  Motivation narrowed to the  Reduces putting square pegs in bonus system to the neglect of round holes respect for employees  It emphasized the importance of  Managers having exclusive right education and training to enhance the efficiency of to planning and control employees Administrative Management Theory  Administrative Management Theory  The administrative theory was also regarded as classical organization theory. Its two major purposes are;  To develop basic principles that could guide the design creation, and maintenance of large organizations;  To identify the basic functions of managing organizations.  Henry Fayol  French industrialist who had extensive business experience.  He founded the classical approach.  He started work as a mining engineer at the age of 19 and spent his entire working life with the same company and rose to become the managing director at the age of 47 and retired at the age of 77.  Fayol’s concern was on the totality of an organization. To him, management was the most neglected aspect of business operation.  Before Fayol, the general believe was that managers are born and not made. That is to say, no one could become a manager through formal training. Known as the Father of classical approach, Father of modern management theory and the Practical man of management 14 Principles of management by Fayol Division of Authority and Unity of Discipline labour responsibility command Subordination of Remuneration of individual Centralization Unity of direction personnel interest to general interest Scalar chain Stability of of Order Equity tenure of management personnel Esprit de Initiative corps Functions or process of management  Planning  Organizing  Commanding  Co-ordinating  Controlling Some writers re-organize these functions into planning, organizing, directing/leading and controlling.  Functions or processes of management  Planning- Selecting the activities and methods for achieving them, either for the organisation as a whole or for a part of it.  Organizing- Establishing the structure of the tasks to be performed to achieve the goals of the organisation; grouping these tasks into jobs for an individual; creating groups of jobs within departments, delegating authority to carry out these jobs, providing systems of information and communication and co-ordinating activities within the organisation.  Commanding- Giving instructions to subordinates to carry out tasks over which the manager has authority for decision and responsibility for performance.  Functions or processes of management  Co-ordinating– Harmonising the activities of individuals and groups within the organisation. Management must reconcile differences in approach, effort, interest and timing.  Controlling - Measuring and correcting activities to ensure that performance is in accordance with plans. Plans will not be achieved unless activities are monitored; and deviations identified and corrected as soon as they become apparent. Lyndall Urwick’s 10 principles His principles of management represented a code of good practice which he claimed if strictly adhered to should lead to success in administration or management. His work resulted in the development of the following ten (10) principles: 1. Objective 6. Responsibility 2. Authority 7. Continuity 3. Correspondence 8. Co-ordination 4. Balance 9. Definition (jobs) 5. Specialization 10. Span of control  Criticisms of Urwick  Too much concentration on the internal environment  He left out issues such as remuneration and morale. He also identified the process of management to be planning, organizing and controlling.  E.F.L. Brech  Shared the opinion of using principles but was more concerned with the development of people in organizations.  He was not an advocate of the use of principles.  Instead, he emphasized the use of flexibility according to a particular situation.  He also emphasized the need for written definitions of responsibilities and the value of job descriptions as an aid to effective organization and delegation.  E.F.L. Brech  Breech sees management as a social process, for planning and regulating the operations of an enterprise towards an agreed objective.  To him, the process is carried out within a framework known as organizational structure.  He argued that the key elements in developing an organizational structure are:  Defining the responsibilities of management, supervisors and specialist personnel.  Determining how the responsibilities should be shared.  Co-ordinating the execution of the responsibilities  Maintaining a high level of morale among personnel.  E.F.L. Brech…cont;d  Brech’s principles of management overlap those of Fayol and Urwick.  However, they are less dogmatic than the others.  Some of his principles are;  division of responsibilities,  clear lines of communication,  unity of command, and  allocation of authority.  Brech finds it difficult to regard management as a science or a profession since there is generally no agreement on the fundamental body of principles  Contributions/criticisms of administrative management theory Contributions: ❖ It has provided blue-prints in management ❖ Foundation for present key emphasis on the functions of management ❖ Has enhance and promoted the skill of managers ❖ The use of principles makes room for little deviations since the principles provide blue-print and direction. In this way, trial and error are minimized. Contributions/criticisms of administrative management theory Criticisms: ❖Dogmatic adherence to principles stifles initiative and discretion ❖Principles are not applicable in all situation ❖Disregard for human factors Bureaucratic Management Bureaucratic Management  The third arm of the classical approach  Associated with Max Weber Bureaucracy  Referred to as “red-tapeism” (too much rules, regulations, and paperwork leading to inefficiency)  Also referred to as officialdom  The concern of Weber was on bureaucracy as a form of organization with hierarchy of authority regulated by rules and regulations.  Features of bureaucracy  Every organization functions continuously through rules and regulations.  Need for division of labour and specialization.  Allocation of authority regulated by rules.  Appointments to positions based on technical competence  Hierarchical arrangement of jobs  Ownership separated from management  Rules, decisions, and actions are recorded in writing Weber’s Legitimate authority Max Weber identified three types of legitimate authority:  Traditional authority- This is where acceptance of authority is based on tradition and custom.  Charismatic authority- The acceptance of authority is based on loyalty to, and confidence in the personal qualities of a person in authority.  Rational-Legal authority –This is also based on the office or the position a person legitimately occupies; regulated by rules and procedures of the organization. Contributions/benefits from Weber’s bureaucracy  The need for fairness and uniformity of treatment of workers demands bureaucracy.  Adherence to rules and procedures does not make room for arbitrariness.  The element of hierarchy of authority creates orderliness and respect for higher authority.  The elements of division of labour and specialization put the worker on the right job/task. Limitations/drawbacks of Weber’s bureaucracy  Too much emphasis on rules, procedures, record- keeping and paperwork may lead to delay and inefficiency.  There is the tendency of workers to place too much reliance on rules and procedures to the detriment of initiative and discretion.  Bureaucracy does not make room for flexibility and adaptation  It disregards informal organization and the development of groups with their own goals. The Behavioural Approach The Behavioural Approach  It was made up of a group of management scholars trained in behavioural disciplines such as Sociology, Psychology, Anthropology and related fields who used their diverse knowledge to propose more effective ways to manage people in an organisation.  It was developed to take care of the human element in organizations which was a major limitation of the classical approach. Dimensions of the Behavioural Approach  Human Relations sub-approach founded by by Prof. Elton Mayo (1880-1949).  Hawthorne Experiments by National Research Council [NRC] of the National Academy of Sciences.  Theory X and Theory Y developed by Douglas Murray McGregor [1906-1964)  Theory X and Theory Y  Theory X regards employees as being inherently lazy, requiring coercion and control, avoiding responsibility and only seeking security. Under this theory, work is distasteful and therefore workers must be directed and motivated through force, pecuniary consideration (financial incentives) and praise to achieve results.  Theory Y, on the other hand, sees man in a more favourable position. It regards employees as liking work which is regarded as natural. That the worker should not be directed, controlled and coerced if he is committed to the directives of the organization. Under this theory, the worker will accept responsibility. Maslow Abraham H. Maslow He identified the levels of needs to be:  Physiological needs  Safety needs  Love/Affection needs  Esteem/Ego needs  Self Actualization  According to Maslow, the manager should know the level of the hierarchy on which his subordinates are so that he can apply the appropriate motivational factors to move them up to the next level of hierarchy. Systems Approach  Systems Approach  A system is an interrelated and interdependent set of elements functioning as a whole. It is an open system that interacts with its environment.  It is composed of inputs from the environment (material or human resources), transformation processes of inputs to finished goods (technological and managerial processes), outputs of those finished goods into the environment (products or services), and feedback (reactions from the environment).  Subsystems are systems within a broader system.  Systems Approach...cont’d 1  Interdependent subsystems (such as production, finance, and human resources) work toward synergy in an attempt to accomplish an organizational goal that could not otherwise be accomplished by a single subsystem.  This is a condition in which the combined and coordinated actions of the parts of a system achieve more than all the parts could have achieved acting independently.  Managers find optimal solutions to management problems by using scientific analysis which is closely associated with the systems approach to management.  Contribution of the System Approach  It ended the dominance of the classical and the behavioural approaches.  It brought to fore the important role the environments and its elements play on business activities.  It cautions managers to be circumspect in the decision- making process since a decision made in one department can affect almost all the other departments  It creates the awareness of sub-systems each with potentially conflicting roles and goals which must be integrated.  It focuses attention on inter-relationships between it and its environment i.e. the need of the system as a whole.  Limitations/Drawbacks/Criticisms of the Systems Approach  Not all organizations function in an open systems. Some function without recourse to the external environment. Examples are Catholic Monastery and the Trokosi in the Volta Region of Ghana.  The environment and its elements sometimes have negative impact on organization. The external environment has negative socio-cultural practices that may adversely affect other organizations that may relate to it.  Breakdown of a sub-system of a system may affect all the other systems and a general breakdown of the entire systems.  The impact of a decision in one department on the entire organization may cause managers to be over-circumspect. This may lead to delays in decisions or no decisions at all. Contingency View  CONTINGENCY VIEW  In the mid-1960s, the contingency view of management or situational approach emerged.  This view emphasizes the fit between organization processes and the characteristics of the situation. It calls for fitting the structure of the organization to various possible or chance events.  It questions the use of universal management practices and advocates using traditional, behavioural, and systems viewpoints independently or in combination to deal with various circumstances.  The contingency approach assumes that managerial behaviour is dependent on a wide variety of elements.  Contributions of the Contingency Approach  It gives rise to the notion that different problems require different methods of approaches of solution.  It calls for the application of different management styles in dealing with different situations.  It has eliminated some of the loopholes associated with the classical approach. For example, the classical approach wanted to find only one best way of doing things. The contingency approach does not subscribe to this.  It creates a synthesis and a collaborated relationship among other approaches. Limitations/Drawbacks/Criticisms of the Contingency Approach  Different management styles based on situational analysis may not always yield the same expected results. Management Science Approach  Management Science Approach  The emphasis is on the use of quantitative techniques in solving management related problems in the areas of Statistics, Mathematics and Computers.  This approach emerged out of Operation Research approach. As a result the two [management science and operations Research] are often used interchangeably/synonymously.  The focus of the approach is on technical problems rather than on Human/personal problems.  The computer has emerged as a very important facilitator to this approach. Practical applications of management science approach includes:  Mathematical forecasting- for projections into the future for planning purposes.  Inventory modelling- to exercise effective control over inventories by mathematically establishing how much/many to order and produce.  Linear programming- it deals with the allocation and utilization of scarce resources among competing ends/uses.  Queuing theory- it deals with the facilitation and allocation of service personal or work stations to minimize customer waiting time and service cost. Practical applications of management science approach includes:  Network model/analysis- breaking large tasks into smaller and simple components so that they can be properly worked on.  Simulation- making models of problems to create hypothetical situations to test different solutions under various assumptions.  Benefits of the management science approach includes:  Enables Rational decision making  Ensures the economic viability of such decisions based on proper cost, revenues and returns on investment analysis.  Provides appropriate mathematical models based on formulas and rules for different problems.  Incorporates the use of computers for faster processing of large mass of data.  Contributions of the Management Science Approach  It introduction the use of various quantitative techniques.  Use of mathematical models in dealing with productions issues often lead to concise and unambiguous solutions in contrast with the behavioural approach.  It has improved on the mathematics/quantitative reflexes of managers.  Limitations of the Management Science Approach  The fact that management is a behavioural science implies that it is not in all cases that a mathematical model can be used to explain why a person behaves in a certain manner towards another.  The use of computer in analysing certain events may sometimes be influenced by human beings who operate it and this may lead to manipulation of figures.