Management Theories Study

MANAGEMENT THEORIES

1. Introduction to Management Theories

  • Definition: Management theories are sets of general rules that guide managers in managing organizations.

  • Purpose: Theories provide explanations to assist employees in effectively aligning with business goals and implementing effective means to achieve those goals.

2. Outline of Management Theories

  • 2.1 Pre-scientific or Pre-Classical Management Theories

  • 2.2 Classical Theory: Taylor’s Scientific, Fayol’s Administrative, & Weber’s Bureaucracy Theories

  • 2.3 Behavioral Theory: Human Relations or Neo-classical, Behavioral Theories

  • 2.4 Modern Management Theory: Quantitative, System, Contingency, and Operational Theories

3. Pre-Classical Contributions

  • Several individuals in the middle to late 1800s contributed ideas that laid groundwork for management.

  • Key Contributors:

    • Robert Owen

    • Charles Babbage

    • Henry R. Towne

3.1 Robert Owen (1771-1858)

  • Background: Successful British entrepreneur known for his progressive views on human resources.

  • Focus: Improved working and living conditions for employees at his cotton mill in New Lanark, Scotland.

  • Conditions: The mill employed 400-500 children working 13-hour days with only one hour off for meals.

  • Improvements:

    • Upgraded streets, houses, sanitation, and education.

  • Legacy: Seen as a pioneer for human relations movement, advocating employee welfare.

3.2 Charles Babbage (1792-1871)

  • Background: English mathematician and father of modern computing.

  • Contributions:

    • Developed the first practical mechanical calculator and an analytical engine.

    • Explored work specialization; recognized both mental and physical work could be specialized.

    • Created a profit-sharing plan involving bonuses for suggestions and wage portions based on factory profit.

3.3 Major Features of Pre-Classical Contributors

  • Robert Owen:

    • Advocated for worker conditions.

  • Charles Babbage:

    • Innovated work specialization and profit-sharing ideas.

3.4 Henry R. Towne

  • Perspective: Stressed the importance of management as a science requiring knowledge and application.

  • Call to Action: Advocated for the development of management principles.

4. Management as a Science & Art

  • Art: Involves personal managerial skills.

  • Science: Provides knowledge that, when applied correctly, enhances management practices.

5. Classical Theory of Management

  • Development: Emerged during the Industrial Revolution as managers faced challenges in training employees and labor dissatisfaction.

  • Goal: To find the "one best way" to perform and manage tasks.

5.1 Major Branches of Classical Theory

  • Assumption: People are rational.

  • Branches:

    • Scientific Management (Frederick Taylor)

    • Administrative Principles (Henri Fayol)

    • Bureaucratic Organization (Max Weber)

5.2 Classical Scientific Theory

  • Need: Increased productivity and efficiency.

  • Focus: Best processes and workforce examination.

  • Key Figures:

    • Frederick Taylor

    • Henry Gantt

    • Frank and Lillian Gilbreth

5.2.1 Frederick Taylor

  • Known as the "father of scientific management".

  • Principles:

    1. Develop a science for every job with detailed rules and procedures.

    2. Select workers with appropriate abilities.

    3. Train workers precisely and provide incentives for cooperation.

    4. Support workers by planning their work effectively.

  • Impact: Achieved significant productivity increases at Bethlehem Steel (e.g., 47.5 tons/day compared to 12.5 tons)

5.2.2 Henry Gantt

  • Developed the Gantt chart: A bar graph to measure planned vs. completed work across production stages, emphasizing time.

5.2.3 Frank and Lillian Gilbreth

  • Studied job motions; isolated efficient movements leading to productivity increases from 1,000 to 2,700 bricks/day.

5.3 Classical Administrative Theory

  • Focus: Overall organization, rather than individual productivity.

  • Contributors:

    • Max Weber

    • Henri Fayol

    • Mary Parker Follett

    • Chester I. Barnard

5.3.1 Max Weber

  • Critiqued personal management styles; promoted structured bureaucracy.

  • Bureaucratic Characteristics:

    • Well-defined hierarchy

    • Division of labor

    • Standardized rules

    • Impersonal relationships

    • Competence-based decisions

    • Comprehensive record maintenance

5.3.2 Henri Fayol

  • Developed 14 Principles of Management based on experiences, providing guidelines for management structures.

    1. Division of Work

    2. Authority

    3. Discipline

    4. Unity of Command

    5. Unity of Direction

    6. Subordination of Individual Interests to General Interest

    7. Remunerations

    8. Centralization

    9. Scalar Chain

    10. Order

    11. Equity

    12. Initiative

    13. Stability of Tenure of Personnel

    14. Esprit de Corps

5.3.3 Mary Parker Follett

  • Advocated for common organizational goals and dismissed command-style hierarchies, emphasizing ethics, power, and leadership.

5.3.4 Chester Barnard

  • Introduced the concept of informal organizations and encouraged the acceptance theory of management, highlighting mutual understanding between employees and managers.

6. Behavioral Management Theory / Human Relations Movement

  • Emerged as classical theories failed to address employee motivations and behaviors.

  • Focus: Human dimensions of work regarding motivation, conflict, expectations, and group dynamics.

6.1 Contributions to Behavioral Management Theory

  • Key Theorists:

    • Elton Mayo (Hawthorne Studies)

    • Abraham Maslow (Needs Hierarchy)

    • Douglas McGregor (Theory X and Theory Y)

    • Chris Argyris

6.1.1 Elton Mayo

  • Conducted Hawthorne Studies, highlighting social dynamics in employee productivity.

  • Hawthorne Effect: Increased productivity resulting from attention and engagement rather than changes in physical working conditions.

6.1.2 Abraham Maslow

  • Developed needs hierarchy theory emphasizing that human needs motivate behavior in a structured order:

    1. Physiological Needs

    2. Safety Needs

    3. Love/Belonging Needs

    4. Esteem Needs

    5. Self-Actualization Needs

6.1.3 Douglas McGregor

  • Distinguished between Theory X (negative view of employees) and Theory Y (positive view), impacting managerial behaviors and expectations.

6.2 Behavioral Management Theory Overview

  • Emphasized inner satisfaction over material rewards, understanding individuals as resources rather than machines.

7. Modern Management Theory

  • Foundations: Evolving concepts of management incorporating varied methodologies for decision-making and performance improvement.

7.1 Quantitative School of Management

  • Originated during WWII for military problem-solving; uses quantitative techniques like statistics and simulations for management.

7.2 System Management Theory

  • A system is an interrelated set of elements that function as a whole, defined by:

    • Inputs

    • Transformation processes

    • Outputs

    • Feedback

7.3 Contingency School of Management

  • Emphasis on situational factors determining the effectiveness of management approaches.

7.4 Quality School of Management

  • Comprehensive framework for improving organizational performance while addressing stakeholder needs, including continuous improvement methods like Kaizen and reengineering.

7.5 Innovative Contributions in Management

  • Recognized need for scientific approaches, importance of communication and employee engagement, focus on systems thinking, and adaptability across various situational demands in management practices.