THE EVOLUTION OF MANAGEMENT THEORIES
Evolution of Management Theories Modern managers use many of the practices, principles and techniques developed from earlier concepts and experiences. The Industrial Revolution brought about the emergence of large-scale business and its need for professional managers Theories portray the different perceptions regarding how management should be undertaken.
Categories of Theories The Classical School of Thought i.e. - Classical Organisational Theory - Scientific Management Behavioural Science School i.e. - The Human Relations School - Behavioural Science School New Developments in Management - Systems Theory - Contingency Theory
Evolution of Management Theory Evolution of Management Theory 1940 2000 Administrative Management Behavioral Management Scientific Management New Developments in Management
Classical School of Thought Scientific Management - Frederick Taylor and others Classical Organisational Theory - Administrative management Theory (Henry Fayol and Max Weber)
Core Ideas of Classical School of Thought Application of science to the practice of management. Development of basic management functions. Articulation and application of specific principles of management. - Evolved in response to the shift from handicraft to industrial production. - Emphasis is on economic rationality of people and organizations i.e. motivated by economic incentives, they make choices that yield the greatest monetary benefits.
Scientific Management theory Scientific Management theory 1st management theory after the industrial revolution. Main objective was to scientifically determine the best method of work in order to improve productivity.
Scientific Management theory Scientific Management theory Evolution of Scientific Management Began in the industrial revolution in the late 19th century as: Managers of organizations began seeking ways to better satisfy customer needs. Large-scale mechanized manufacturing began to supplant small-scale craft production in the ways in which goods were produced. Social problems developed in the large groups of workers employed under the factory system. Managers began to focus on increasing the efficiency of the worker-task mix.
Scientific Management theory Scientific Management theory Scientific Management The systematic study of the relationships between people and tasks for the purpose of redesigning the work process for higher efficiency. Defined by Frederick Taylor in the late 1800’s to replace informal rule of thumb knowledge. Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done. Other proponents are The Gilbreths; Frank (1868-1924) and Lillian (1878-1972) Gilbreth, Robert Owen, Charles Babbage, Adam Smith and Henry C Gantt,
Frederick Taylor’s Theory of Scientific Management (1856-1915) Father of Scientific Management Believed that decisions based upon tradition and rules of thumb (Principles of repeatiton) should be replaced by precise procedures developed after a careful study of an individual at work i.e. He carried out Times and motion studies at Bethlehem Steel Company and developed a better method for performing that job that reduced on the amount of time spent doing work
Taylor’s Theory of Scientific Management He advocated for: - Scientific selection of workers to increase productivity i.e. selecting workers whose skills match the jobs to be performed. - Training of workers - Differential pay rate system / piece rate pay system
The 5 Principles of Scientific Management Replace the rule of thumb work methods with methods based on scientific study of tasks Scientifically select, train and develop each worker rather than passively leaving them to train themselves Cooperate with the workers to ensure that the scientifically developed methods are being followed.
The 5 Principles of Scientific Management Establish a differential pay –rate system Taylor observed that workers did as little work as possible but with this wage system, employees would work harder. Divide work nearly equally between managers and workers so that managers apply scientific management to planning the work and workers actually perform the tasks. Each group taking over the work for which its best fitted instead of the former condition in which responsibility largely rested with the workers.
Weaknesses with Taylor’s Scientific Management Taylor assumed people are rational and motivated primarily by the desire for money hence disregarding the social needs. Specialized jobs became very boring, dull and demotivated workers leading to reduced productivity. Ignores individual differences – the most efficient way of working for one person may be inefficient for the other. Ignores the fact that the economic interests of workers and management are rarely identical. Underrated the power of trade unions and government in determining working conditions & workers’ wages.
Application of Taylor’s Theory of Scientific Management in the Modern Workplace Assembly Line Plants as Prototypical Exampleswork is highly specialized (Division of labour) System of Remuneration (quotas - commission) – payment system according to performance Re-Design – Reengineering - Data is used to refine, improve, change, modify, and eliminate organizational processes Benchmarking – copying better methods of performance from others Lean Manufacturing – producing at minimal costs Training of workers
Adam Smith’s - Job specialization Adam Smith’s - Job specialization Adam Smith, 18th century economist, found firms manufactured pins in two ways: Craft -- each worker did all steps. Factory -- each worker specialized in one step. Smith found that the factory method had much higher productivity. Each worker became very skilled at one, specific task. Advocated for breaking down the total job to allow division of labor i.e. job specialization to increase productivity through creation of experts (highly skilled workers)
The Gilbreths- Time and Motion Studies The Gilbreths- Time and Motion Studies Disciples of Frederick Taylor i.e. collaborated on Time and Motion studies and focused on ways of promoting the individual workers welfare. Using the motion Picture cameras, they tried to find out the most economic motions for each task of the brick layer in order to upgrade performance and reduce fatigue. The Gilbreths developed a 3 position plan intended to serve as an employee development program i.e. 1st step – To do present job very well 2nd Step – Prepare for a higher position well 3rd Step – Train a successor They observed that workers should be doers, learners and teachers
Other Followers’ of Taylor Henry L. Gantt – Project Scheduling – The Gantt Chart A protégé and associate of Frederick Taylor. He designed the Gantt chart i.e. a project scheduling model for increasing the efficiency of project execution and completion. Criticized the differential pay system to be unfair and advocated a bonus system i.e. - The supervisor should earn a bonus for each worker who reached the daily standard and extra bonus if all workers reached it. Advocated for training of workers to do a better job
Robert Owen Known as Father of Personnel Management. He believed workers performance was influenced by the total environment in which they worked. Worked towards building cooperation between management and workers Believed that workers should be treated as human beings. He suggested that investment in human beings is more profitable than investment in any physical resource Introduced new ideas of human relations (better working conditions to improve productivity) i.e. provision of better housing for workers reduced working hours, rest pauses, training of workers, education for workers’ children e.t,c
Charles Babbage He was a British mathematics professor at Cambridge university contributed to the introduction of scientific methods to management through: advocating for the principle of division of labor (emphasized work specialization) work measurement optimum utilization of machines cost reduction and wage incentives. Note : For contributions of Scientific management to today’s modern management, look at the contributions of all the proponents
Classical Organizational Theory Administrative Management Theory - emphasizes the manager and the functions of management Focuses on managing the total organization rather than individuals. Stipulates how organisations should be run, structured and the functions of Management i.e. stipulates principles needed to manage complex Organisations. Major proponents are Henry Fayol and Max Weber
Administrative Management Theory Henry Fayol Theory of Bureaucracy developed by Max Weber
Henry Fayol’s Administrative Theory Henry Fayol (1841-1925) Father of Modern Management, was a French industrialist who developed a framework for studying management Was first to identify the specific management functions of 1. Planning 2. Organizing 3. Leading 4. Controlling He developed 14 universal principles of management
Henry Fayol’s Administrative Theory Lessons from the Henry Fayol’s Administrative Theory The management process can be separated into interdependent functions (departments) Management is a continuous process. Management is a largely, though not an entirely, coherent (logical) process The functional approach is useful because it specifies what managers should do. Fayol’s major functions of management are recognized as the main objectives of modern managers
Weber’s Theory of Bureaucracy Max Weber (1864-1920) German Sociologist and the Father of Modern Sociology Developed the concept of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness
Weber’s Theory of Bureaucracy Bureaucracy allows for the optimal form of authority - “rational authority” Three types of Legitimate Authority Traditional Authority - past customs; personal loyalty Charismatic Authority - personal trust in character and skills Rational Authority - rational application of rules or laws
Weber’s Principles(Features) of Bureaucracy Weber’s Principles(Features) of Bureaucracy Routinisation of activities Appointment based on competence Hierarchy of authority Bound by written rules and regulations Specialization of work Separation of official (management) from ownership of the organization Fair evaluation and reward System of task relationships Focused vision
Weber’s Theory of Bureaucracy Application in the Modern Workplace Large organizations guided by countless rules and regulations Existence of task relationships (departments) Presence of a clear hierarchy of authority in most organizations Use of authority in many organizations to get things done. Presence of a vision (direction) in many organization Existence of separation of management and ownership in many large organizations Centralization of power in the managers in many organizations
Weber’s Theory of Bureaucracy Criticisms/ Weaknesses Delays in decision making due to long hierarchy and centralization of power Characterized with close supervision which caused tension in some occasions Routinastion of work creates monotony leading to boredom hence reduced productivity Not suitable in dynamic environment – is not flexible Work can be brought to a stand still incase one individual is missing in the process due to high work specialisation Focus may be put on following rules and procedures instead of the real goals.
Criticisms of Classical School of Thought No one is entirely driven by economic motivations. People’s choices and behavior are dictated by other factors such as social needs, security and self-esteem. There is no such thing as “the best way” to do a job Extreme division of labor tends to produce monotony and reduce overall skill levels. People are managed like machines. Introduction of newer machines led to job elimination
BEHAVIORAL SCIENCE SCHOOL- Core Concepts BEHAVIORAL SCIENCE SCHOOL- Core Developed in reaction to the Scientific Theory of Management which emphasized standardization of jobs, processes and technologies to maximize economic return. Focus shifted to the human side of organizations. The best way to motivate, structure and support employees - The study of how managers should behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.
BEHAVIORAL SCIENCE SCHOOL- Core Concepts BEHAVIORAL SCIENCE SCHOOL- Core The need for workers to find intrinsic value in their jobs. The positive impact of social relationships on worker productivity.
BEHAVIORAL SCIENCE SCHOOL BEHAVIORAL SCIENCE SCHOOL The Human Relations School; The Hawthorn Studies and Human Relations (Elton Mayo), Mary Parker Follett and Chester Benard The Behavioral Scientists School; Abraham Maslow, Douglas McGregor, Chris Agyris and Fredrick Hertzberg .
Human Relations School •Elton Mayo (1880–1949) was an Australian psychologist, sociologist, went to Harvard University. • Spent most of his career at Harvard Business School as Professor of Industrial Research. • Main focus was on the people working in an organization.
The Hawthorne Studies The Hawthorne Studies Study of worker efficiency at the Hawthorne Works of the Western Electric Co. during 1924-1932. Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, productivity rose. The experiments were an attempt to put Taylor’s ideas in practice. Mayo decided that the traditional financial incentives were not causing productivity improvements.
The Hawthorne Studies The Hawthorne Studies Productivity increases when workers believe that they are being observed closely. Employees perform better when managers and co-workers make them feel valued. Financial rewards are not necessarily conducive to increasing worker productivity. Workers care about self-fulfillment, autonomy, empowerment, social status and personal relationships with co-workers.
Mary Parker Follet - 1925 The Psychological Foundations of Business Administration Pioneered the notion of participative leadership. Suggests that organizations are communities involving networks of groups. Workers and managers equally share power and responsibility for decision making and therefore, their outcomes. She thus emphasizes participative decision making to improve performance i.e. motivates workers because they feel valued
Chester Barnard - 1938 Proposes the acceptance theory of authority, that organizational goals will be achieved and managerial authority will be accepted if workers believe that their individual needs are being met i.e. Workers will easily accept instructions given to them once their individual needs have been met.
Contributions of the Human Relations School Contributions of the Human Relations Mayo advocated for employee participation in decision making to enhance motivation He advocated for improvement of employee welfare Acceptance of informal groups in work places Provision of harmonious work environment. All the above are important motivators that increased productivity, and concluded that man is a social being driven by social needs and that attention must be given to the social needs if you want to increase productivity.
Behavioral Scientists School –core concepts The fulfillment of emotional needs of workers is important in achieving economic goals. Employee satisfaction and working conditions are important in achieving worker productivity. Workers are intrinsically motivated to work when they feel a sense of belonging and participate in decision making. Workers desire diverse and challenging work.
Douglas McGregor’s X and Y Theory Douglas McGregor Developed Theory X and Theory Y Theory X: best represented the views of scientific management Theory Y: represented the views of human relations approach. Douglas McGregor believed that theory Y was the best philosophy for all managers.
Theory X and Y Theory X and Y General assumptions of employee behavior and Managerial Behavior Theory X: the average worker is lazy, dislikes work and will do as little as possible. Managers must closely supervise and control through reward and punishment. Theory Y: workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work. Managers should allow the worker great latitude, and create an organization to stimulate the worker.
Abraham Maslow-1954; Motivation and Personality Hierarchy of Needs Theory Advanced a theory that employees are motivated by a hierarchy of needs that they seek to satisfy
Limitations of Abraham Maslow There is little evidence to suggest that people are motivated to satisfy only one need level at a time, except in situations where there is a conflict between needs. Maslow's hierarchy also has difficulty explaining cases such as the "starving artist" in which a person neglects lower needs Maslow's hierarchy makes sense from an intuitive standpoint but there is evidence that contradicts the order of needs specified by the model e.g. some cultures appear to place social needs before any others
Fredrick Herzberg - Two Factor Theory 17 April 1923 – 19 January 2000 An American psychologist To better understand employee attitudes and motivation, he performed studies to determine which factors in an employee's work environment caused satisfaction or dissatisfaction
Fredrick Herzberg - Two Factor Theory He developed the motivationhygiene theory to explain these results. He called the satisfiers motivators and the dissatisfiers hygiene factors Using the term "hygiene" in the sense that they are considered maintenance factors that are necessary to avoid dissatisfaction but that by themselves do not provide satisfaction.
Two Factor Theory "The Dual Structure Theory" Proposed the Motivation-Hygiene Theory (1959) of job satisfaction. People are influenced by two sets of factors:
Implications of Two Factor Theory to Management Management not only must provide hygiene factors to avoid employee dissatisfaction, but also must provide factors intrinsic to the work itself in order for employees to be satisfied with their jobs i.e. Job enrichment is required for intrinsic motivation, and it is a continuous management process. The job should have sufficient challenge to utilize the full ability of the employee