EoM - Lecture 02 - Management Theories PDF

Business Management Lecture 02 Management Theories Integrated Fast-Track Bachelor & Master of Business Administration (iMBA) Degree Programme ©NCC Education Limited  Scope and Coverage...

Business Management Lecture 02 Management Theories Integrated Fast-Track Bachelor & Master of Business Administration (iMBA) Degree Programme ©NCC Education Limited  Scope and Coverage This topic will cover: The various management theories that have been developed throughout history The key contributors to these theories How these theories impact upon today’s management practices V1.0 ©NCC Education Limited  Learning Outcomes By the end of this topic students will be able to: Explain the basic principles of the management theories that have been developed over time Discuss the main concepts upon which the theories were developed Evaluate the ways in which the individual theories are impacting upon the management of businesses today V1.0 ©NCC Education Limited  Development of Management Theories Classical Human Relations (including Neo-Human Relations) Systems Approach Contingency Approach Quantitative Approach V1.0 ©NCC Education Limited  Management Theories Classical Emphasis on a formal structure, hierarchy of authority, technical efficiency and productivity and the formulation of universal principles Key figures: Taylor, Fayol, Weber, Urwick and Brech Human Relations Shift of attention to human and social factors at work: the informal organisation and human behaviour shaping productivity Key figures: Mayo, Roethlisberger & Dickson V1.0 ©NCC Education Limited  Management Theories Neo-Human Relations Focus on issues of leadership, motivation and job satisfaction Key figures: Maslow, Herzberg, Argyris & McGregor Systems Approach A blend of both classical and human relations approaches emphasising organisations as complex socio-technical systems, and organisations as open systems (within an external environment) Key figures: Trist & Bamforth V1.0 ©NCC Education Limited  Management Theories Contingency Approach Recognition that there is ‘no one best way’ to organise or manage: ‘it all depends’ on a range of situational variables. Key figures: Burns and Stalker, Joan Woodward, Lawrence and Lorsch, Adair & Hersey and Blanchard Quantitative Approach The use of statistics, computer modelling and simulations to aid the problem solving and decision making process Key figures: Beer, Heinze and Knowles V1.0 ©NCC Education Limited  Scientific Management (Classical) Frederick W. Taylor’s Principles of Management: Develop a science for each element of an individual’s work (based on well organised, clearly defined and fixed principles) Select, train and develop the worker Specialisation of work (an employee per job) Ensure that work is done in accordance with the principles of the science that has been developed Divide work and responsibility almost equally between management and workers V1.0 ©NCC Education Limited  Applying Scientific Management Today Analysing basic work tasks to be undertaken Using time and motion studies to eliminate wasted effort and activities Management by performance – pay awarded according to the level of output Development of expertise and professionalism in the workplace V1.0 ©NCC Education Limited  General Administrative Theorists (classical approaches) Two most prominent theorists: Henri Fayol – 14 principles of management Max Weber - bureaucracy V1.0 ©NCC Education Limited  Henri Fayol’s 14 principles of Management Division of work Subordination of Scalar chain of authority individual interests Correspondence of Discipline authority and responsibility Order Appropriate centralisation Stability of personnel Unity of command Equity Unity of direction Remuneration Initiative Esprit de corps V1.0 ©NCC Education Limited  Weber’s Bureaucracy V1.0 ©NCC Education Limited  Human Relations Approach The Hawthorne Studies – provided new insights into individual and group behaviour. Conducted at the Western Electric Company (1927–32) under the direction of Elton Mayo. Consisted of two key elements: The Relay Assembly Room The Bank Wiring Observation Room V1.0 ©NCC Education Limited  Human Relations Approach The Relay Assembly Room: 6 women were segregated in a different room where they were observed under varied working conditions, resulting in changes to: Lighting Heating Rest Periods Whatever the change to the working conditions productivity rose which was due to team morale V1.0 ©NCC Education Limited  Human Relations Approach The Bank Wiring Observation Room (Roethlisberger & Dickson). 14 men were segregated from the department, and observed working under more or less normal working conditions. Findings: Group formed its own identity Developed own norms and behaviours Believed in a ‘fair days work for a fair days pay’ Controlled work output by social pressures. Over performers were known as ‘rate-busters’ and underperformers as ‘chisellers‘ Sabotaged the efforts of an unpopular supervisor V1.0 ©NCC Education Limited  Applying the Human Relations Approach Today Helps to design motivating jobs Used by managers to aid team building and development Used to encourage open communication Provides the foundation for current thinking on motivation, leadership, group behaviour and development V1.0 ©NCC Education Limited  The Systems Approach A system is a combination of interrelated and independent parts formed in a manner that produces a integrated whole. Closed system – systems that are not influenced by their environment Open system – systems that dynamically interact with their environment V1.0 ©NCC Education Limited  Using the Systems Approach Today Assists management in ensuring that independent parts of an organisation work together Helps to recognise that decisions taken in one department will impact others Emphasises the fact that organisations are not self-contained Organisations must pay attention to their external environment and the changes occurring e.g. technology, customers, regulations and suppliers V1.0 ©NCC Education Limited  The Contingency Approach Key principles: Organisations are different (unique) – size, goals, work etc They face different situations and challenges Therefore require different approaches to management No universally applicable management rules that work in all situations – a need for flexibility V1.0 ©NCC Education Limited  Contingency Variables Organisation size – as size increases so do problems of coordination Use of technology – different technologies require different structures and control systems Environmental uncertainty – degree of uncertainty will influence the management process Individual differences – employees will have different hopes and expectations of their job V1.0 ©NCC Education Limited  Quantitative Approach Application of quantitative techniques: Statistics Optimisation models Information models Computer simulations …..to improve decision making V1.0 ©NCC Education Limited  Applying the Quantitative Approach Today More recently called ‘Operations Research’ or ‘Management Science’ Contributes to management decision making in planning and control Enables the understanding of problems and explores potential solutions/outcomes Helps to interpret the results of software programs in the areas of budgeting, scheduling and quality control V1.0 ©NCC Education Limited  Summary A number of management theories have been developed over time Each theory has its own particular strengths The focus of the theories is primarily upon working with and motivating people Many of these theories still have a significant impact upon today’s management practices in terms of work allocation, systems and procedures, pay and rewards, communication and management style V1.0 ©NCC Education Limited  References Slide 2.11: Management eighth edition by Robbins, S.P. and Coulter, M. (Pearson/Prentice-Hall) IBN: 978-0131439948 pp 31 V1.0 ©NCC Education Limited