THEORIES OF MANAGEMENT

In order to identify the main trends in the development of management theory, it’s ideal to
categorize the work of writers into various approaches, based on their views of an organization,
it’s structure and management. This provides a framework in which to direct study and focus
attention on the progression of ideas concerned with improving organization performance. Their
work can be grouped into-:

 Classical theories
 Human relations theories
 System theories
 Contingency theories

CLASSICAL/ EARLY THEORIES

Due to the industrial revolution which took place in Europe during the 2nd half of the 18th C, there
was a rapid growth and expansion of firms involved in the production of goods and services.
Organizations came into being. As factories grew in employees size, came the need to develop
management techniques that would integrate technology, materials and workers activities in a
productive and efficient manner.

Classical theories evolved in an effort to uncover some management techniques that solve
problems of organization efficiency in production of goods and services. The classical writers
thought of the organization in terms of it’s purpose and formal structure. They placed emphasis
on the planning of the work, the technical requirements of the organization, principles of
management and the assumption of rational and logical behavior.

Classical theories can be divided into two perspectives as distinguished by the issues they
address. These are;

 Scientific theory
 Administrative theory

Classical writers were concerned with improving management as a means of increasing

productivity. Emphasis was placed on obtaining increased productivity, from individual
members through technical structuring of the work organization and the provision of monetary
incentives for higher levels of output.

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SCIENTIFIC THEORY OF MANAGEMENT

(FREDERIC W. TAYLOR: 1856-1917)

He is regarded as the father of scientific management, he suggested a totally revolutionally way

of thinking about the problems of work and organizations. The major theme of scientific
management was that work could be studied scientifically. By 1880’s there was almost no
systematic effort to find ways of properly managing work.

Taylor an engineer of Midvale Steel Company in USA observed that workers were working at a
slow pace and were not motivated. He believed that in the same way that there is a best machine
for each job, so there is a best working method by which people should undertake their jobs. He
propounded the view that managers should study work scientifically, in order to determine the
‘one best way’ of performing each task. He considered that all work processes could be analyzed
into discrete tasks and by scientific method it was possible to find the one best way to perform
each task. Each job was broken down into it’s component parts, each part timed and the parts re-
arranged into the most efficient method of working, the best person to do each task was
scientifically selected.

Taylor advocated for;

a) Scientific analysis of a job

He felt that managers should study the work scientifically and determine ‘the one best way’ of
performing it, using time and motion studies which measure all task movements made by a
worker and eliminate those that do not lead to productivity.

b) Scientific selection of personnel

He advocated of matching physical traits to the dimensions of the task to be performed, he felt
that some individuals would be more suited to a task than others and that managers should seek
out those with proper traits to increase productivity.

c) Financial Incentives

He felt that workers should be motivated to improve production efficiency. At that time the most
common form of wages was hourly rate/ time rate. He felt that motivation should be enhanced by
the piece rate system of financial incentives. This is where workers would be paid according to
their level of output rather than the number of hours they have worked.

d) Specialization Should Be Practiced.

He felt that responsibilities should be divided between the managers and the workers. Managers
should plan, organize, direct and control work processes, while the workers should concentrate
on performing the actual tasks.

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 e) Standard Time For Each Task Should Be Established

The best way to perform a task should be developed through work analysis and simplification
procedures, then workers should be trained to do the task in the ‘best way’ and the standard time
for each task should be established.

Contributions

 Scientific Analysis Of A Job

He felt that each task must be scientifically designed so that it can replace the old rule of
the thumb method. This brought a bought conservations and saving of energy, making
adequate use of every ounce of energy of any time that is expected.
 Scientific Selection of Workers.
The scientific selection, training and development of workers increase their efficiency,
making them more productive.
 Division of Work and Responsibility
He felt that there should be a clear separation of duties between management and the
workers. Managers should give orders and maintain discipline, while the workers should
concentrate on doing the work only.
 Specialization
He believed that each person’s work should as far as possible be confined to a single
leading function. This was through matching of scientifically analyzed job with the
scientifically selected worker.

 Motivation
He advocated for the piece rate method of motivation, where the workers were paid
according to their level of output.
Limitations
 Mechanistic and Impersonal Approach
Taylor paid little attention towards the human element in production. Workers were
viewed as isolated individuals and more as units of production to be handled in the same
way as machines and motivated by economic considerations only.
 Emphasis on Physiological Needs Only
The needs of the employees were viewed primarily in economic terms, informal relations
that arise between workers on the job in order to meet their social needs were ignored.
Experience has shown that people have a genuine need to feel loved, important and
recognized.
 Dull, Monotonous and Boring Jobs.
Under scientific management, people are forced to work on the same job, time and again,
this leads to monotony and boring standardized jobs.

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  Poor Management Control
When work is completely planned for an employee, it becomes mechanical and fails to
provide for the persons psychological needs such as creativity, responsibility and self
satisfaction.
 Poor Methods of Selection.
By advocating for scientific selection of employees, Taylor regarded workers from an
engineering point of view, experience have shown that “the one best way” of performing
a task is not always the best for every worker.
 Poor Remuneration Methods.
The concept of a fair day’s pay for a fair day’s work is not purely a technical matter, it is
also a notion of social equity and not in keeping of a scientific approach.

Administrative Management Theory

At the time Taylor’s scientific management was being studied, criticized and restructured in the
USA, Henri Fayol was investigating managerial behavior in organizations in France and trying to
systematize it. The activities of management received little attention from his practical
experience. Fayor as a director of a large French coal mining firm felt that there are principles of
management that were flexible and that provide light for management thinking.

He contributed the following 14 principles

Henry Fayol’s Principles Of Management

1. Division of Labor

Work should be divided into specialized units for increased efficiency and output.

2. Authority and responsibility

Authority should be granted for formal positions. No responsibility without authority.

3. Unity of Command

Individuals should get orders and report to only one immediate superior.

4. Unity of Direction

Tasks of similar nature should be grouped together under one management. All the departments
should be geared towards achieving the organizations common goal.

5. Chain of Command

Authority and command should be routed through procession from top to bottom in the
organization.

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 6. Discipline

Workers and managers should be disciplined by respecting the rules and regulations governing
activities of the organization.

7. Subordination Of Individual Interests To Organization’s Interests

The organization’s goals should prevail over the individual’s goals.

8. Remuneration.

Rewards in form of pay and other benefits should be fair to all employees in the organization.

9. Centralization of Power And Authority.

Depending on the size of the organization, power and authority may be centralized or
decentralized.

10. Order

There should be orderly coordination of human and material resources in the organization.

11. Equity

There should be fairness and equity in dealing with subordinates.

12. Stability Of Tenure Of Personnel

Staffing should be conducted through proper planning in order to avoid high employee turnover.

13. Initiative

Employees should be encouraged to act on their own when they have the opportunity to do so.

14. Espirit De Corps [Spirit Of Cooperation]

Managers should emphasize on team work by building harmony and a sense of unity in the
organization.

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HUMAN RELATIONS MOVEMENT/ BEHAVIORAL THEORIES OF MANAGEMENT

The behavioral management theories emerged because of the limitations of classical theories.
The classical theories were only concerned with the general management of the organization,
work and work productivity through financial incentives and ignored the people side of the
organization. Behavioral theories were developed to fill this gap and to help organizations to
achieve complete production efficiency and harmony at work place. The theories emphasizes
human relations at work place. Prominent contributors to this theory were Elton Mayo, Douglas
Mc Gregor, Chris Argris, Abraham Maslows, Frederick Herzberg among others.

ELTON MAYO - [Hawthorne Experiments]

A leading contributor to behavioral management theory was Elton Mayo and his associates at
Harvard Business School, who conducted an experiment on human relations at Hawthorne plant,
Western Electric Company Illinois USA between 1924 and 1935.

The experiment was conducted by selecting two groups of women to perform an assembly
operation, each group was kept in a separate room, one being a control group. Initially it was
believed that physical conditions such as light, noise, humidity, temperature, pay, increase of
length of work day, would have an impact on productivity. In one group they would alter the
features of the physical conditions [e.g increase the light, dim the light, increase/decrease room
temperature, etc] they would then record the level of output of the two groups. N.B. no
alterations were made in the control group.

Surprisingly in each group the level of output would increase[even in the group where physical
features were not being altered.] indeed many of the women in the two groups reported that they
were more satisfied with their jobs than before.

Findings

He found that;

 Employees are not so much driven by financial incentives, as by sociological wants and
desires which could be satisfied by belonging to a group. [output went up in both groups]
 Recognition by supervisors make workers feel that they are unique and important
contribution to the operation of the organization, hence motivation to higher productivity
[since they were chosen among others to participate in the study.]
 Being allowed to take rest breaks, allowing them to make their own decisions influencing
their work environments motivates them to higher productivity.

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Contributions

 He discovered that there is positive effect of group relationship on motivation and

performance.
 Social factors at work place lead to motivation. In organizations where people are
friendly output has the tendency to go up and vice versa.
 There is positive relationship between job satisfaction and social satisfaction. Without
social satisfaction at work there is no job satisfaction.
 Organizations should try to understand the job needs of employees and ensure that they
are met.
 Organizations should involve employees in decision making.
 Managers should delegate responsibilities.
 Managers should see that workers attitude is positive, they are happy and feel motivated
as this increases productivity.

Conclusions

 Interactions with others would determine the quality and quantity of the work produced.
 The beliefs, objectives and aspirations within informal groups at work, frequently
produce pressures which can exceed the strength of the formal rules and regulations and
thus conflict with organization objectives.
 Social pressures within formal groups at work could increase output, but it could be
restricted by informal group’s attitude, even when individuals are offered financial
incentives to increase it.

DOUGLAS MC GREGOR

He felt that organizations were often designed based on the faulty assumptions about human
behavior. He suggested that many managers adopt a particular style due to their basic beliefs
concerning human behavior. He grouped the assumptions into;

a) Theory X
b) Theory Y

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Theory X

He suggested that managers assume that;

1. People dislike work and will avoid it.

2. People must be coerced, controlled, directed, and threatened in order to get them to work.
3. People prefer to be directed by supervisors rather than assume responsibility for their
tasks.
4. Workers are more interested in monetary gains than in performing their jobs.

N.B : due to this managers design organizations that were

- centralized in decision making

- contained numerous rules and regulations

-required close supervision..

Theory Y

He suggested that managers in this group assume that;

-work is as natural as play [people enjoy working under favorable conditions]

-people can exercise self direction [there is no need of close supervision]

-people seek responsibility [there is no need to coerce, control, threaten workers]

-the potential in people is not fully exploited, they can put valued input to the decision making
process of the organization.

N.B- he felt that instead of managers developing needless mechanism in the organization, they
should emphasis coordination of activities by providing assistance to workers when problems are
identified.

N.B- in practice management styles vary considerably between these two extremes.

System approach theory of Management

A system is a set of inter-connected and inter-related elements directed to achieve certain goals.
A system is a set of interrelated but separate parts working towards a common purpose. The
arrangement must be orderly and there must be proper communication facilitating interaction
between the elements and finally this interaction should lead to achieve a common goal.
System approach to management views the organization as a unified, purposeful system
composed of interrelated parts. It views an organization as a closed (organic) and open system
composed of many sub-systems. As a system, organization is composed of a number of sub-
systems such as production, supportive, maintenance, adaptive managerial, individuals and

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informal groups.
All these sub-systems operate in an interdependent and interactional relationship. The various
subsystems or parts of an organization are linked with each other through communication,
decisions, authority responsibility relationships, objectives, policies, procedures and other
aspects of coordinating mechanism. Organizations as systems have a variety of goals. The
important among them are survival, integration and adaptation with environment and growth.
System oriented manager would make decisions only after they have identified impact of these
decisions on all other departments and the entire organization. They must intertwine their
department with the total organization and communicate with all other departments, employees
and with each other.

Features of Management as System

Management is regarded as a system and it is taken in the following ways,

 Management as a Social System

 Management as Open System
 Adaptive
 Dynamic
 Probabilistic
 Multilevel and Multidimensional
 Multivariable
 An integral approach
 Multidisciplinary

Contingency or Situational Approach

 it is the most recent development in the field of management. Contingency theory claims
that there is no best way to organize a corporation, to lead a company, or to make
decisions. Instead, the optimal course of action is contingent (dependent) upon the
internal and external situation. Since every situation is unique a manager must therefore
analyze each and every situation individually and apply their own style of leadership to
each situation. leadership style that is effective in some situations may not be successful
in others. management style should vary upon various internal and external constraints.
The best way to organize depends on the nature of the environment to which the
organization must relate.
Features of Contingency Theory
1. There is no universal or one best way to manage, external and internal factors must be
considered and the focus should be on the action that best fits the given situation.
2. Effective organizations not only have a proper fit with the environment but also between
its subsystems
3. The needs of an organization are better satisfied when it is properly designed and the
management style is appropriate both to the tasks undertaken, the nature of each
situation must be viewed separately.
4. Managers need to be developed in skills that are most useful in identifying the important
situational factors.

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Criticisms
1. the logical extension of the contingency approach is that all situations are unique. If this
is true, then management can be practiced only by intuition and judgment, thereby
negating the value of prior knowledge and wisdom.
2. On research level, contingency theory has been criticized for being a theoretical

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