Modern Management Theories and Practices
Modern Management Theories and Practices
Modern Management Theories and Practices
PRACTICES
By
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Makerere University
Faculty of Social Sciences
Department of Political Science and Public Administration
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Being a paper presented at the 15th East African Central Banking Course, held on
12th July 2004, at Kenya School of Monetary Studies.
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MODERN MANAGEMENT THEORIES AND PRACTICES: A CRITICAL
OVERVIEW
Introduction
Managing is one of the most important human activities. From the time human
beings began forming social organizations to accomplish aims and objectives
they could not accomplish as individuals, managing has been essential to ensure
the coordination of individual efforts. As society continuously relied on group
effort, and as many organized groups have become large, the task of managers
has been increasing in importance and complexity. Henceforth, managerial
theory has become crucial in the way managers manage complex organizations.
The central thesis of this paper is that although some managers in different parts
of the world could have achieved managerial success without having basic
theoretical knowledge in management, it has to be unequivocally emphasized
that those managers who have mixed management theory in their day-to-day
practice, have had better chances of managing their organizations more
efficiently and effectively to achieve both individual and organizational
objectives. Therefore, managers of contemporary organizations ought to
appreciate the important role they play in their respective organizations if they
are to achieve set goals. Secondly, there is need to promote excellence among all
persons in organizations, especially among managers themselves.
To address these concerns, the paper will proceed along the following spectrum:
management will be defined for purposes of conceptual clarity; management
objectives, functions, goals, and essentiality, will be highlighted; the importance
of managerial skills and the organizational hierarchy will be sketched; the
importance of women in the organizational hierarchy will be emphasized;
reasons for studying management theory will be enumerated; the different
management theories, the core of the paper, will be discussed at length; the
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significance of management as a practice will be contextualized; and ‘the way
forward’ in form of a conclusion will be offered.
Definition of Management
Management is the art, or science, of achieving goals through people. Since
managers also supervise, management can be interpreted to mean literally
“looking over” – i.e., making sure people do what they are supposed to do.
Managers are, therefore, expected to ensure greater productivity or, using the
current jargon, ‘continuous improvement’.
First and foremost, management is about solving problems that keep emerging
all the time in the course of an organization struggling to achieve its goals and
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objectives. Problem solving should be accompanied by problem identification,
analysis and the implementation of remedies to managerial problems. Second,
administration involves following laid down procedures (although procedures
or rules should not be seen as ends in themselves) for the execution, control,
communication, delegation and crisis management. Third, human resource
management should be based on strategic integration of human resource,
assessment of workers, and exchange of ideas between shareholders and
workers. Finally, organizational leadership should be developed along lines of
interpersonal relationship, teamwork, self-motivation to perform, emotional
strength and maturity to handle situations, personal integrity, and general
management skills.
Management Functions
To understand management, it is imperative that we break it down into five
managerial functions, namely; planning, organizing, staffing, leading, and
controlling.
Planning involves selecting missions and objectives and the actions to achieve
them. It requires decision-making – i.e., choosing future courses of action from
among alternatives. Plans range from overall purposes and objectives to the most
detailed actions to be taken. No real plan exists until a decision – a commitment
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of human and material resources – has been made. In other words, before a
decision is made, all that exists is planning study, analysis, or a proposal; there is
no real plan.
People working together in groups to achieve some goal must have roles to play.
Generally, these roles have to be defined and structured by someone who wants
to make sure that people contribute in a specific way to group effort. Organizing,
therefore, is that part of management that involves establishing an intentional
structure of roles for people to fill in an organization. Intentional in that all tasks
necessary to accomplish goals are assigned and assigned to people who can do
them best. Indeed, the purpose of an organizational structure is to help in
creating an environment for human performance. However, designing an
organizational structure is not an easy managerial task because many problems
are encountered in making structures fit situations, including both defining the
kind of jobs that must be done and finding the people to do them.
Staffing involves filling, and keeping filled, the positions in the organization
structure. This is done by identifying work-force requirements; inventorying the
people available; and recruiting, selecting, placing, promoting, appraising,
planning the careers of, compensating, and training or otherwise developing
both candidates and current jobholders to accomplish their tasks effectively and
efficiently.
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Controlling, for example, budget for expense, is the measuring and correcting of
activities of subordinates to ensure that events conform to plans. It measures
performance against goals and plans, shows where negative deviations exist,
and, by putting in motion actions to correct deviations, helps ensure
accomplishment of plans. Although planning must precede controlling, plans are
not self-achieving. Plans guide managers in the use of resources to accomplish
specific goals; then activities are checked to determine whether they conform to
the plans. Compelling events to conform to plans means locating the persons
who are responsible for results that differ from planned action and then taking
the necessary steps to improve performance. Thus, controlling what people do
controls organizational outcomes.
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Goals of All Managers
First and foremost, the logical and publicly desirable aim of all managers in all
kinds of organizations, whether business or non-business, should be a surplus.
Thus, managers must establish an environment in which people can accomplish
group goals with the least amount of time, money, materials, and personal
dissatisfaction or in which they can achieve as much as possible of a desired goal
with available resources. In a non-business enterprise such as units of a business
(such as an accounting department) that are not responsible for total business
profits, managers still have goals and should strive to accomplish them with the
minimum of resources or to accomplish as much as possible with available
resources. A manager who achieves such an aim is said to be a strategic manager.
The second goal or aim of all managers is that they must be productive. Indeed,
government, and the private sector recognize the urgent need for productivity
improvement. Productivity improvement is about effectively performing the
basic managerial and non-managerial activities. Simply defined, productivity is
about the output-input ratio within a time period with due consideration for
equality.
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for-profit enterprises, to manufacturing as well as service industries. However, a
given situation may differ considerably among various levels in an organization
or various types of enterprises. The scope of authority held may vary and the
types of problems dealt with may be considerably different. All managers obtain
results by establishing an environment for effective group endeavor.
In addition, all managers carry out managerial functions. However, the time
spent for each function may differ. Thus, top-level managers spend more time on
planning and organizing than do lower-level managers. Leading, on the other
hand, takes a great deal of time for first-line supervisors. The difference in the
amount of time spent on controlling varies only slightly for managers at various
levels.
The manager is, therefore, the dynamic, life-giving element in every business.
Without the leadership of the manager, resources of production remain mere
resources and never become production. In a competitive economy, the quality
and performance of the managers determine the success of a business; indeed,
they determine its survival.
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advance, reflects the basic spirit of the modern age. In fact, because management
is indispensable, this explains why it grew so fast and with so little opposition.
Hence, the developed and developing worlds have an immense stake in the
competence, skill and responsibility of management.
Conceptual skill is the ability to serve the “big picture”. It is also about
recognizing significant elements in a situation, and to understand the
relationships among the elements.
Design skill is the ability to solve problems in ways that will benefit the
enterprise. To be effective, particularly at upper organizational levels, managers
must be able to do more than see a problem. In addition, they must have the skill
of a good design engineer in working out a practical solution to a problem.
Managers must also have that valuable skill of being able to design a workable
solution to the problem in the light of the realities they face. It has, however, got
to be mentioned that the relative importance of these skills may differ at various
levels in the organization hierarchy.
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For purposes of elaboration, technical skills are of greatest importance at the
supervisory level and less at the middle-management level, human skills in the
frequent interactions with subordinates at all levels, conceptual skills not critical
for lower-level supervisors but gain in importance at the middle-management
level. At the top management level, conceptual and design abilities and human
skills are especially valuable, but there is relatively little need for technical
abilities. The assumption, especially in large companies, that chief executives can
utilize the technical abilities of their subordinates. In smaller firms, however,
technical experience may still be quite important.
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not information unless the observer has knowledge of the theory that will
explain relationships. Theory is “in its lowest form a classification, a set of pigeon
holes, a filing cabinet in which fact can accumulate. Nothing is more lost than a
loose fact”(Homans 1958, p. 5).
There is a body of opinion that says that management theory evolved during and
after Second World War; it has only been studied in-depth since then. The
industrial revolution that brought in mass production, specialization, seeing
people as critical resource, all intensified management as a critical area of
discourse.
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managers who apply theory to managing must usually blend principles with
realities. Once managers know about theory, they will have the capacity to
forestall future problems that may occur in the enterprise.
In sum, there are basically three main reasons why we have to study
management theory. First, theories provide a stable focus for understanding
what we experience. A theory provides criteria for what is relevant. Second,
theories enable us to communicate efficiently and thus move into more and more
complex relationships with other people. Third, theories make it possible –
indeed, challenge us – to keep learning about our world. By definition, theories
have boundaries.
Management Theories
Contemporary theories of management tend to account for and help interpret the
rapidly changing nature of today’s organizational environments. This paper will
deal with several important management theories which are broadly classified as
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follows: The Scientific Management School comprising the works of Frederick W.
Taylor and Lillian Gilbreth’s motion study, among others; the Classical
Organizational Theory School comprising the works of Henri Fayol’s views on
administration, and Max Weber’s idealized bureaucracy, among others;
Behavioral School comprising the work of Elton Mayo and his associates; the
Management Science School which I discuss at the end of this section; and Recent
Developments in Management Theory comprising works such as Systems
Approach, Situational or Contingency theory, Chaos theory, and Team Building
approach. For lack of time and space, this discussion will provide a general
description of some of the scholars in each of these management theories and the
successes that they achieved.
Taylor’s strongest positive legacy was the concept of breaking a complex task
down into a number of subtasks, and optimizing the performance of the
subtasks; hence, his stop-watch measured time trials. However, many critics,
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both historical and contemporary, have pointed out that Taylor’s theories tend to
“dehumanize” the workers.
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Alongside Taylor’s postulates is Gilbreth’s motion study. The ultimate result of
this study led to the centrality of efficiency in organizations. Gilbreth was
particularly interested in how he could reduce the unnecessary motions resulting
from bricklaying at a construction site; he succeeded in reducing the motions
from 18 to 4. He then proposed that each worker should be involved in doing his
or her own work, prepare for the next higher level, and training their successors.
However, Weber was cautious of bureaucracy when he observed that the more
fully realized, the more bureaucracy “depersonalizes” itself – i.e., the more
completely it succeeds in achieving the exclusion of love, hatred, and every
purely personal, especially irrational and incalculable, feeling from execution of
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official tasks. Hence, Weber predicted a completely impersonal organization
with little human level interaction between its members.
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Behavioral School
The key scholar under this category is Elton Mayo. The origin of behavioralism is
the human relations movement that was a result of the Hawthorne Works
Experiment carried out at the Western Electric Company, in the United States of
America that started in the early 1920s (1927-32). Elton Mayo and his associates’
experiments disproved Taylor’s beliefs that science dictated that the highest
productivity was found in ‘the one best way’ and that way could be obtained by
controlled experiment. The Hawthorne studies attempted to determine the
effects of lighting on worker productivity. When these experiments showed no
clear correlation between light level and productivity the experiments then
started looking at other factors. These factors that were considered when Mayo
was working with a group of women included rest breaks, no rest breaks, no free
meals, more hours in the work-day/work-week or fewer hours in the work-
day/work-week. With each of these changes, productivity went up. When the
women were put back to their original hours and conditions, they set a
productivity record.
These experiments proved five things. First, work satisfaction and hence
performance is basically not economic – depends more on working conditions
and attitudes - communications, positive management response and
encouragement, working environment. Second, it rejected Taylorism and its
emphasis on employee self-interest and the claimed over-riding incentive of
monetary rewards. Third, large-scale experiments involving over 20,000
employees showed highly positive responses to, for example, improvements in
working environments (e.g., improved lighting, new welfare/rest facilities), and
expressions of thanks and encouragement as opposed to coercion from managers
and supervisors. Fourth, the influence of the peer group is very high – hence, the
importance of informal groups within the workplace. Finally, it denounced
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‘rabble hypotheses’ that society is a horde of unorganized individuals (acting) in
a manner calculated to secure his or her self-preservation or self-interest.
These results showed that the group dynamics and social makeup of an
organization were an extremely important force either for or against higher
productivity. This outcome caused the call for greater participation for the
workers, greater trust and openness in the working environment, and a greater
attention to teams and groups in the work place. Finally, while Taylor’s impacts
were the establishment of the industrial engineering, quality control and
personnel departments, the human relations movement’s greatest impact came
in what the organization’s leadership and personnel department were doing. The
seemingly new concepts of “group dynamics”, “teamwork”, and organizational
“social systems”, all stem from Mayo’s work in the mid-1920s.
The systems theory has had a significant effect on management science and
understanding organizations. A system is a collection of part unified to
accomplish an overall goal. If one part of the system is removed, the nature of the
system is changed as well. A system can be looked at as having inputs (e.g.,
resources such as raw materials, money, technologies, people), processes (e.g.,
planning, organizing, motivating, and controlling), outputs (products or
services) and outcomes (e.g., enhanced quality of life or productivity for
customers/clients, productivity). Systems share feedback among each of these
four aspects of the system.
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The Systems Theory may seem quite basic. Yet, decades of management training
and practices in the workplace have not followed this theory. Only recently, with
tremendous changes facing organizations and how they operate, have educators
and managers come to face this new way of looking at things. The effect of
systems theory in management is that it helps managers to look at the
organization more broadly. It has also enabled managers to interpret patterns
and events in the workplace – i.e., by enabling managers to recognize the various
parts of the organization, and, in particular, the interrelations of the parts.
The Chaos theory is advocated by Tom Peters (1942). As chaotic and random as
global events seem today, they are equally chaotic in organizations. Yet for many
decades, managers have acted on the basis that organizational events can always
be controlled. Thus, a new theory, known as chaos theory, has emerged to
recognize that events are rarely controlled. Chaos theorists suggest that systems
naturally go to more complexity, and as they do so, they become more volatile
and must, therefore, expend more energy to maintain that complexity. As they
expend more energy, they seek more structure to maintain stability. This trend
continues until the system splits, combines with another complex system or falls
apart entirely. It will need an effective manager for the latter worst scenario not
to happen.
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The last management theory is the Team Building approach or theory. This
theory emphasizes quality circles, best practices, and continuous improvement. It
is a theory that mainly hinges on reliance on teamwork. It also emphasizes
flattening of management pyramid, and reducing the levels of hierarchy. Finally,
it is all about consensus management – i.e., involving more people at all levels in
decision-making.
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“Theory X” gives a negative view of human behavior and management that he
considered to have dominated management theory from Fayol onwards –
especially Taylorism. It also assumes that most people are basically immature,
need direction and control, and are incapable of taking responsibility. They are
viewed as lazy, dislike work and need a mixture of financial inducements and
threat of loss of their job to make them work (‘carrot and stick’ mentality).
“Theory Y”, the opposite of “Theory X”, argues that people want to fulfill
themselves by seeking self-respect, self-development, and self-fulfillment at
work as in life in general. The six basic assumptions for ‘Theory Y’ are: work is as
natural as play or rest – the average human being does not inherently dislike
work, whether work is a source of pleasure or a punishment (to be avoided)
depends on nature of the work and its management. Second, effort at work need
not depend on threat of punishment – if committed to objectives then self-
direction and self-control rather than external controls. Third, commitment to
objectives is a function of the rewards associated with their achievement.
Satisfaction of ego and self-actualization needs can be directed towards the
objectives of the organization. Fourth, the average human being learns, under
proper conditions, not only to accept but to seek responsibility. Fifth, high
degrees of imagination, ingenuity and creativity are not restricted to a narrow
group but are widely distributed in the population. Lastly, under the conditions
of modern industrial life, the intellectual potentials of the average human being
are being only partly utilized.
There is, however, one theory or approach, the quantitative approach that is
hardly used and known by managers. It emerges from operations research and
management science. It is a mathematical and statistical solution to problems
using optimization models, and computer simulations. It is most effective
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management decision-making rather than managerial behavior. The
management theories that have been discussed, important as they are, have to be
translated in practice by managers. To this discussion I now turn.
Management as Practice
Managing, like all other practices – whether medicine, music composition,
engineering, accountancy, or even baseball – is an art; it is know-how. It is doing
things in the light of the realities of a situation.
Yet managers can work better by using the organized knowledge about
management. It is this knowledge that constitutes science. However, the science
underlying managing is fairly crude and inexact. This is true because the many
variables with which managers deal are extremely complex. Nevertheless, such
management knowledge can certainly improve managerial practice. Managers
who attempt to manage without management science must put their trust to
luck, intuition, or what they did in the past.
In managing, as in any other field, unless practitioners are to learn by trial and
error, there is no place they can turn for meaningful guidance other than the
accumulated knowledge underlying their practice; this accumulated knowledge
is theory.
For practical purposes, all managers must develop three sets of skills, namely;
conceptual, technical, and human (see Fleet and Perterson 1994, p. 25).
Conceptual skills allow the manager to develop relationships between factors
that other people may not see. Managers who have well-developed conceptual
skills are able to apply different management theories to the same situation. For a
manager to be technical, it implies that he or she should act professionally.
Professionalism demands that the manager performs his or her duties within
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established procedures, rules and regulations. Any behavior that compromises
the manager’s professional etiquette is certainly bound to interfere adversely
with the organization’s productivity. Lastly, a manager should be able to see
members of the organization as human beings who have needs and
psychological feelings and emotions. These needs and feelings must be positively
harnessed for the good of the organization; motivation of the employees,
therefore, becomes a critical factor in increasing productivity.
Conclusion
In conclusion, it has to be restated that management is the process of designing
and maintaining an environment for the purpose of efficiently accomplishing
selected aims. Managers carry out the functions of planning, organizing, staffing,
leading, and controlling. Managing is an essential activity at all organizational
levels.
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Finally, the organization is an open system that operates within and interacts
with the environment. The systems approach to management includes inputs
from the external environment and from claimants, the transformation process,
the communication system, external factors, outputs, and a way to reenergize the
system. No doubt, a manager who makes serious attempts to translate theory
into reality is bound to increase productivity more than a manager who chooses
to use the ‘fire brigade’ or trial and error approach.
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BIBLIOGRAPHY
Homans G. C. (1958) The Human Group (New York: Harcout, Brace and World).
Stoner James A. F., Freeman R. Edward, and Gilbert, Jr. Daniel R. (2003)
Management (New Delhi: Prentice-Hall of India), Sixth Edition.
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