Slide 1. Slide 2 Lecture outline. Slide 3 Lecture objectives. Dr. Harriet Kidombo, UON/SCDE 1 LDP 601: FUNDAMENTALS OF MANAGEMENT MANAGEMENT THEORY

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1 Slide 1 LDP 601: FUNDAMENTALS OF MANAGEMENT MANAGEMENT THEORY Lecture 2 2/25/ Slide 2 Lecture outline Introduction Lecture objectives Classical scientific management Bureaucratic approach Neo-classical approach to management Summary 2/25/ Slide 3 Lecture objectives Describe the principles of scientific management as advanced by Fredrick Taylor Discuss the rational-economic view in relation to scientific approach to management Discuss the principles of management as advanced by Henri Fayol Describe the human relations approach to management 2/25/ Dr. Harriet Kidombo, UON/SCDE 1

2 Slide 4 Approaches to Management Ancient practices Classical approach Neoclassical approach 2/25/ Slide 5 Ancient practices Egyptian, Greek, Roman and Chinese civilizations The writings of Sun Tzu on the Art of War, Socrates, Nichollo Machiavelli Biblical Moses Catholic Church Roman Empire 2/25/ Slide 6 Classical Management Theory Scientific management Classical Organization Theory 2/25/ Dr. Harriet Kidombo, UON/SCDE 2

3 Slide 7 Scientific management The Classical Approach to management was the first significant effort to develop a body of management thought. Scientific Management and Classical Organization Theory. Is the first concentrated effort to study management. Concerned with the management of work and with the workers. 2/25/ Slide 8 Scientific management The application of scientific method of study, analysis and problem solving in organizations. 2/25/ Slide 9 The Thoughts of Frederick Taylor ( ) Deliberate restriction of production by workers Lack of work rationalization Formation of labour unions to press for better wages. Initiative of working methods left to workers 2/25/ Dr. Harriet Kidombo, UON/SCDE 3

4 Slide 10 Taylors Principles of Scientific Management Each worker should have a clearly defined daily task. Establish standard conditions of performance High payment for successful completion of tasks The scientific selection, education and development of workers. Friendly, close cooperation between management and workers. Managers should take more supervisory responsibility, 2/25/ Slide 11 In a nutshell.. planning and greater control by managers. Adoption of scientific approach to managing Conflict about how to divide profits was retrogressive and unproductive. Wages should be scientifically determined 2/25/ Slide 12 Limitations Ideas increased productivity but led to layoffs Assumed people are motivated only by material gains. Overlooked the social needs of workers. People have needs other than money e.g. recognition and acceptance 2/25/ Dr. Harriet Kidombo, UON/SCDE 4

5 Slide 13 Limitations Overlooked the human desire for job satisfaction Workers went on strike over job conditions rather than salary. human beings are not rational creatures 2/25/ Slide 14 Benefits of the Scientific Management Thoughts Its rational approach to organization of work enabled tasks to be measured with accuracy. Tasks measurement and processes provided useful information on which to base improvement on working methods. Improvement of working methods brought enormous increases in productivity. 2/25/ Slide 15 Benefits of the Scientific Management Thoughts Enabled employees to be paid by results Stimulated management into adopting a more positive role in leadership Contributed to major improvements in physical working conditions It provided the foundations on which modern work study and other quantitative techniques are based. 2/25/ Dr. Harriet Kidombo, UON/SCDE 5

6 Slide 16 Disadvantages of the Scientific Management 2/25/ Slide 17 Disadvantages of the Scientific Management.. 2/25/ Slide 18 ADMINISTRATIVE THEORY Henry Fayol ( ).- the father of classical organization theory Max Weber ( ) Bureaucratic approach 2/25/ Dr. Harriet Kidombo, UON/SCDE 6

7 Slide 19 HENRI FAYOL ( ). He defined management in terms of: Technical activities - production. Commercial Activities Financial Activities Security Activities Directing 2/25/ Slide 20 Fayol s14 principles of management. Division of work Authority and Responsibility Discipline Unity of command 2/25/ Slide 21 Fayol s14 principles of management... Unity of Direction Subordination of the individual interest to general interest Remuneration Centralization Scalar chain or Chain of Superiors 2/25/ Dr. Harriet Kidombo, UON/SCDE 7

8 Slide 22 Fayol s 14 principles of management... Order Equity Stability or Tenure of Personnel Initiative Espirit de corps - In union there is strength. 2/25/ Slide 23 BUREACRATIC APPROACH TO MANAGEMENT Attributed to Max Weber ( ) German sociologist and an academic - not a practicing manager He lived in the period of history as the early pioneers of management thought such as Fredrick Taylor and Henri Fayol. 2/25/ Slide 24 Weber s main ideas Why do people obey those in authority? Published the theory of social and economic organization Used the term bureaucracy to describe the structure of organizations. 2/25/ Dr. Harriet Kidombo, UON/SCDE 8

9 Slide 25 Bureaucracy Red tape an excess of paper work and rules leading to gross inefficieny Officialdom all the apparatus of local and central government An organizational form made up of rules and hierarchy of authority. 2/25/ Slide 26 Characteristics of Bureaucracies Specialization labour division Ability is the condition for employment Rational hierarchy of authority duties and measures of performance are established positions are well defined formalized in writing. 2/25/ Slide 27 Characteristics of Bureaucracies Professional follows formal impersonal procedures of the organization. Organizational structures are well defined Impersonal authority is impersonal amount of authority corresponds with rank of office 2/25/ Dr. Harriet Kidombo, UON/SCDE 9

10 Slide 28 Characteristics of Bureaucracies Autonomous expertise and technical competence are recognized Stable stable careers, regular salary, promotion and pensions. 2/25/ Slide 29 In a nutshell A bureaucratic organization has: a functional structure clear lines of authority obedience is owed to established rules and regulations. 2/25/ Slide 30 In a nutshell hierarchical levels of authority ordered superior-subordinate relationships. terms of employment are based on rank of office rather than amount of work (performance) common in large complex organizations which depend on specialization, rules and procedures for efficiency 2/25/ Dr. Harriet Kidombo, UON/SCDE 10

11 Slide 31 Weaknesses Works well only in stable environments highly predictable, recurrent, routine and familiar. Rules become so important that they become an obstacle to efficiency Decision making processes are programmed hence discouraging search for other alternatives (is rigid) 2/25/ Slide 32 Weaknesses Rigid behaviour damages relations with clients or customers Unable to get tailor made services have to accept the standard provided within the rules. Difficult to change and adapt to new circumstances 2/25/ Slide 33 Activity What common features do you see between Fayol s principles of management and Weber s description of bureaucracy? Discuss the advantages and disadvantages of bureaucratic structures. Why do you think such structures may not be suitable for organizations that operate in highly unstable environments? Discuss the situations in which bureaucratic systems are desirable 2/25/ Dr. Harriet Kidombo, UON/SCDE 11

12 Slide 34 Systems approach This concept was proposed by Ludwig von Bertalanffy in It is based on two assumptions: to fully understand the functions of an entity, the entity must be viewed as a system whose parts are interdependent. 2/25/ Slide 35 Systems approach. All phenomena can be viewed as a web of relationships among elements. All systems have common patterns, behaviours, and properties that can be understood and used to develop greater insight into the behaviour of complex phenomena. 2/25/ Slide 36 identify the various components that work together to make up the whole organization. 2/25/ Dr. Harriet Kidombo, UON/SCDE 12

13 Slide 37 Characteristics of systems approach A system is greater than the sum of its parts. Each sub-system is a self-contained unit, it is part of a wider and higher order. A system and its environment are highly interrelated. A highly complex system is broken into subsystems 2/25/ Slide 38 A system is a dynamic network of interconnecting elements. A change in only one of the elements produces change in all the others. When subsystems are arranged in a series, the output of one is the input for another; therefore, process alterations in one require alterations in other subsystems. All systems tend toward equilibrium, which is 2/25/2013 a balance of various forces within and outside 38 of a system. Slide 39 Systems have boundaries which can change. To be viable, a system must be strongly goaldirected, governed by feedback, and have the ability to adapt to changing circumstances. Emergence: arising of characteristics from the interactions of the parts of the system Synergy (combined effort is greater than sum of parts) Interdependence (dependent on each 2/25/2013 other)interconnections within the 39 Dr. Harriet Kidombo, UON/SCDE 13

14 Slide 40 2/25/ Slide 41 Contingency approach evolved during the 1960s challenged the classic models designed by management theorists also known as situational approach, implies no one universally applicable set of management principles (rules) Organizations are individually different, face different situations (contingency variables) require different ways of managing. 2/25/ Slide 42 Contingency approach. assumes no universal answer to as situations vary and change over time. the right thing to do depends on a complex variety of critical environmental and internal contingencies. 2/25/ Dr. Harriet Kidombo, UON/SCDE 14

15 Slide 43 NEO-CLASSICAL APPROACH TO MANAGEMENT - Human Relations School of Thought Scientific management is concerned with the mechanics and structure of organization Linked to emergence of industrial psychology in /25/ Slide 44 The works of Elton Mayo ( ). Experiments at the Hawthorne Plant of Western Electric Findings: Individual workers cannot be treated in isolation but must be seen as members of a group. The need to belong to a group and have status within it is more important than monetary incentives or good Dr. Harriet working Kidombo, University conditions. of 2/25/ Slide 45 The works of Elton Mayo ( ) Informal groups at work exercise a strong influence over the behaviour of workers. Supervisors need to be aware of these social needs. 2/25/ Dr. Harriet Kidombo, UON/SCDE 15

16 Slide 46 In a nutshell The studies proved that interpersonal and group values are superior to managerial and individual values. Managers who do not have the enthusiastic support of the groups they supervise will be unable to motivate individual members to a significant degree. 2/25/ Slide 47 Assumptions about people. Assumptions made about people help in understanding the human factor in organizations The major theories of motivation and leadership were developed after the Hawthorne studies of Elton Mayo. 2/25/ Slide 48 Edgar Schein (1965) Rational Economic Man Social Man Self-actualizing man Complex Man 2/25/ Dr. Harriet Kidombo, UON/SCDE 16

17 Slide 49 Douglas McGregor (1967) Theory X The average person has an inherent dislike for work and will avoid it if possible. Because of dislike for work, people must be coerced, controlled, directed and threatened with punishment to get them to work. The average human being prefers to be directed, wishes to avoid responsibility, has limited ambition and wants security above all else. 2/25/ Slide 50 Douglas McGregor (1967) Theory Y The use of physical and mental effort in work is as natural as play or rest. People will exercise self-direction and self control in the service of objectives to which they are committed. The average human being learns under proper conditions not only to accept but to seek responsibility. 2/25/ Slide 51 Douglas McGregor (1967) The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in the solution of organizational problems is widely and not narrowly distributed. Under conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized. 2/25/ Dr. Harriet Kidombo, UON/SCDE 17

18 Slide 52 Conclusions Attitudes and behaviour towards other people are a reflection of the assumptions we make about people. McGregor s theory X corresponds closely to Schein s rational-economic man, while theory Y corresponds to self-actualizing man. McGregor s assumptions have found wide application in issues of leadership than in general management. 2/25/ Slide 53 Conclusions. Based on these assumptions, managers should consider seriously practices such as flexibility in working time, job enrichment, performance appraisal, participation etc. In real life, a blend of the two assumptions can be observed. 2/25/ Slide 54 end Thank you 2/25/ Dr. Harriet Kidombo, UON/SCDE 18