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Makerere University Business School
Strategic Management Course
MANAGEMENT THEORIES
1
Introduction
• Earliest contributors
– Practicing managers
– Social scientists
• More recent theorists
– Academicians
– Ma...
Practicing managers
• Reflected on their experiences
• To produce rational principles for
– Universal application
– Effici...
Early Social Scientists
• Human behaviour at work
• Started with efficiency, looking at
• Physical conditions effect on em...
More recent theorists
• Strategic perspective
• Involve organisation factors:
– Vision, mission, culture, structure, value...
CLASSICAL MANAGEMENT THEORIES
Henri Fayol (1841 – 1925)
• French industrialist & theorist
• Mining engineer @ 19 years, MD...
Fayol’s Principles of management
• Division of work
• Authority
• Discipline
• Unity of command
• Individual interests sub...
Comments on Fayol’s principles
• Emphasis on structural organisation nature –
bureaucracy
• Fairness, equity e.t.c were no...
Fredrick Winslow Taylor
• Looked at efficiency on shop floor
• Was a labourer, up to shop superintendent
• Developed scien...
Scientific management principles
• Work study analytical approach
• Steps
– Develop a science for each operation to replac...
Principles from Scientific management times
Frank & Lillian Gilbreths
• Gilbreths applied scientific management to brick
l...
Comments on scientific management
Benefits
• Increased productivity
• Rational approach – applies measurement
• Incentive ...
Bureaucracy – Max Weber (1864 – 1920)
• Common meaning
– Red-tape; excess rules, paper work leading to inefficiency
• Mana...
Bureaucracy main features
• A continuous organisation of functions
bound by rules
• Specified spheres of competence
• A hi...
Bureaucracy weaknesses
• Rules tend to be more important than
efficiency
• Rigid behaviour
• Prevents search for alternati...
Human Relations and social psychological
schools
• These theorists were academics and social
scientists.
• They were conce...
Early motivation theorists
• Human motivation
– Processes by which people seek to satisfy basic
drives, perceived needs an...
Motivation basic model
Motivation has the following components
Abaho Ernest 18
Physical /
Emotional
Behaviour Satisfaction...
Elton Mayo
• Was an Australian psychologist
• A researcher in occupational aspects,
– E.g fatigue, accidents, labour turn-...
Mayo’s conclusion
• “Man is a social animal”
• Individual workers cannot be treated in isolation
• Belonging to a group is...
Abraham Maslow (1950 / 60s)
• Physiological needs: Need for food, sleep, sex, e.t.c.
• Safety needs: Stable environment re...
Maslow’s needs - continued
• That people tended to satisfy the above needs
systematically
• Main criticism on Maslow’s the...
D McGregor – Theory X and Theory Y
• Managers’ assumptions about employees
Theory X
• That employees are lazy, require coe...
Theory Y
• Opposite of theory X
• That people like work
• They work as naturally as resting or playing
• They don’t have t...
Later Motivation theories
Theory Z – The Japanese approach
W. Ouchi
• American exponent of Japanese approach, with
• Attem...
Japanese success
• Efficient use of resources, especially people
Strong personnel-related factors
• Mutual trust – employe...
Remarks on the approach
• Some Japanese features are not transferable to
west due to cultural issues
• The west needs to d...
SYSTEMS & CONTINGENCY
APPROACHES
Organisations as systems
• Organisations are set up as open social systems.
• A system is...
Characteristics of open systems
• They receive inputs or energy from the
environment
• They convert inputs into outputs
• ...
Key variables in an organisation as a
system
• People – as individuals or groups
• Technology
• Organisation structures an...
Model of an organisation as an open system
Abaho Ernest 31
People
Materials
e.t.c
Information
Finance
Production & Marketi...
Systems - continued
• A system consists of subsystems
• An organisation’s boundaries, which are often invisible,
are defin...
Contingency approaches
• Contingency builds on systems approach
• It recognises organisations to consist of
interdependent...
Modern approach to management
• Current approaches to management are more of
management currently in practice than mere ma...
Strategic management approach
• Organisations to clearly state a vision and
mission,
• Formulation of organisation objecti...
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  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
  • Management theories
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  • Transcript of "4 management theories"

    1. 1. Makerere University Business School Strategic Management Course MANAGEMENT THEORIES 1
    2. 2. Introduction • Earliest contributors – Practicing managers – Social scientists • More recent theorists – Academicians – Management consultants Abaho Ernest 2
    3. 3. Practicing managers • Reflected on their experiences • To produce rational principles for – Universal application – Efficiency improvement • To structure work & organisations • Did not concentrate on human motivation • Classical / scientific Abaho Ernest 3
    4. 4. Early Social Scientists • Human behaviour at work • Started with efficiency, looking at • Physical conditions effect on employees • Ended up in human factors at work – Motivation, communication, leadership • Called – Human relations theorists or – Social psychologists Later social scientists • Organisations as social systems • Contingency theorists Abaho Ernest 4
    5. 5. More recent theorists • Strategic perspective • Involve organisation factors: – Vision, mission, culture, structure, values, external environment e.t.c • Build on previous theorists • More inclined to contingency theories Abaho Ernest 5
    6. 6. CLASSICAL MANAGEMENT THEORIES Henri Fayol (1841 – 1925) • French industrialist & theorist • Mining engineer @ 19 years, MD @ 47 • Was practically successful in management • Fayol’s definition of management by industrial activities: – Technical, commercial, Financial, Security, Accounting, and managerial • 1st 5 activity groups were taken care of • Managerial activities required establishment of principles Abaho Ernest 6
    7. 7. Fayol’s Principles of management • Division of work • Authority • Discipline • Unity of command • Individual interests sub-ordination • Remuneration • Centralisation • Scalar chain • Order • Equity • Tenure of office stability • Harmony, and team work Abaho Ernest 7
    8. 8. Comments on Fayol’s principles • Emphasis on structural organisation nature – bureaucracy • Fairness, equity e.t.c were not consistent with other main principles • Not suited for rapid change Abaho Ernest 8
    9. 9. Fredrick Winslow Taylor • Looked at efficiency on shop floor • Was a labourer, up to shop superintendent • Developed scientific management Background • Came up after industrial revolution • Dominant requirement was efficiency • Need for systematic of work • Workers only put in minimum effort Abaho Ernest 9
    10. 10. Scientific management principles • Work study analytical approach • Steps – Develop a science for each operation to replace opinion & “rule of thumb” – Determine best method & its timing • Study a job from skilled workers • Eliminate unnecessary actions • Produce best method – standard – Separate planning & controlling from actual “doing” – Select & train workers Abaho Ernest 10
    11. 11. Principles from Scientific management times Frank & Lillian Gilbreths • Gilbreths applied scientific management to brick laying • Used work study method to • Reduce movements per brick from 18 to 5 • Current principles from scientific management - Gilbreths – Therbligs – basic elements of on-the-job-motions – Process charting – process flow charts Henry Gantt • Was Taylor’s colleague • Developed Gantt charts Abaho Ernest 11
    12. 12. Comments on scientific management Benefits • Increased productivity • Rational approach – applies measurement • Incentive payments – based on results Weaknesses • Rigidity – reduced workers’ role • Work fragmentation • Taylor was over-optimistic on acceptance by both employees and management • Wages were determined scientifically - no social considerations Abaho Ernest 12
    13. 13. Bureaucracy – Max Weber (1864 – 1920) • Common meaning – Red-tape; excess rules, paper work leading to inefficiency • Management theory meaning – An organisational form with a system of rules and hierarchy of authority • Authority – acceptance of rule by those whom it is to be exercised on. • Authority types – Traditional – Charismatic – Rational – legal • According to Weber, bureaucracy was: – The most rational means of controlling human beings – Indispensable for large scale & complex organisations. Abaho Ernest 13
    14. 14. Bureaucracy main features • A continuous organisation of functions bound by rules • Specified spheres of competence • A hierarchical arrangement of offices (jobs) • Appointment based on technical competence • Separation of officials from ownership • Formulated rules, decisions & actions recorded in writing Abaho Ernest 14
    15. 15. Bureaucracy weaknesses • Rules tend to be more important than efficiency • Rigid behaviour • Prevents search for alternatives because of programmed decision making • Damages relationships with clients and workers • Difficult for change and adaptation Abaho Ernest 15
    16. 16. Human Relations and social psychological schools • These theorists were academics and social scientists. • They were concerned with the human factor at work. • This was contrary to the classical theorists, who concentrated on work itself but not the worker doing the job. • They dealt with human motivation, group relationship and leadership. • A few motivation theories are mentioned here after – broad topics (group behaviour and leadership have been left out of this course). Abaho Ernest 16
    17. 17. Early motivation theorists • Human motivation – Processes by which people seek to satisfy basic drives, perceived needs and personal goals, which trigger human behaviour. • Early theorists concentrated on motivation contents (e.g drives, needs) – content theories • Didn’t focus on process Abaho Ernest 17
    18. 18. Motivation basic model Motivation has the following components Abaho Ernest 18 Physical / Emotional Behaviour Satisfaction / Frustration OutcomeResponseStimulus
    19. 19. Elton Mayo • Was an Australian psychologist • A researcher in occupational aspects, – E.g fatigue, accidents, labour turn-over • Conducted studies for Western Electrics, Chicago, USA (Hawthorne studies) • Studies were on the worker rather than work • Employees were subjected varying physical conditions and they didn’t affect productivity • Focus was shifted to social aspects and they related to behaviour and productivityAbaho Ernest 19
    20. 20. Mayo’s conclusion • “Man is a social animal” • Individual workers cannot be treated in isolation • Belonging to a group is more important than monetary incentives and good physical conditions • Informal groups strongly influence workers’ behaviour Abaho Ernest 20
    21. 21. Abraham Maslow (1950 / 60s) • Physiological needs: Need for food, sleep, sex, e.t.c. • Safety needs: Stable environment relatively free from threats • Love needs: Group status, affectionate relations with others • Esteem needs:Self respect, self-confidence • Self-actualisation: Self-fulfilment Abaho Ernest 21
    22. 22. Maslow’s needs - continued • That people tended to satisfy the above needs systematically • Main criticism on Maslow’s theory – – Systematic movement up the hierarchy does not seem to happen practically. • Maslow’s theory, however, formed a framework to analyse a variety of needs Abaho Ernest 22
    23. 23. D McGregor – Theory X and Theory Y • Managers’ assumptions about employees Theory X • That employees are lazy, require coercion and control • Avoid responsibility, seek security • Similar to a rational economic man suggested by Schein & Adam Smith) • Strongly related to scientific management Abaho Ernest 23
    24. 24. Theory Y • Opposite of theory X • That people like work • They work as naturally as resting or playing • They don’t have to be controlled coerced – If committed to objectives • They don’t only accept but seek responsibilities • Similar to Maslow’s higher level needs and Schein’s self-actualising man • A blend of theory X & Y is more representative of real life. Abaho Ernest 24
    25. 25. Later Motivation theories Theory Z – The Japanese approach W. Ouchi • American exponent of Japanese approach, with • Attempts for western firms to adapt Japanese style • Based on success of Japanese manufacturing Abaho Ernest 25
    26. 26. Japanese success • Efficient use of resources, especially people Strong personnel-related factors • Mutual trust – employees and management • Employees’ royalty to organisations • Non-specialised career paths – job rotation • Shared decision making • Long term performance appraisal • Collective responsibility Abaho Ernest 26
    27. 27. Remarks on the approach • Some Japanese features are not transferable to west due to cultural issues • The west needs to develop better the employee factor, on top of technology • Japanese engineering has “Taylorism” leading to standard production controls but with improved HR aspects. Criticism • Slow decision making • Imprisoning lifetime employment Abaho Ernest 27
    28. 28. SYSTEMS & CONTINGENCY APPROACHES Organisations as systems • Organisations are set up as open social systems. • A system is a collection of inter-related parts, which form some whole. • Examples of systems are: the human body, a communication network, and a social system. • A system can be open or closed. • An open system obtains inputs from and discharges outputs to its environment. • A closed system is self-supporting • Social systems, including all organisations as mentioned above, are open systems. Abaho Ernest 28
    29. 29. Characteristics of open systems • They receive inputs or energy from the environment • They convert inputs into outputs • They discharge outputs into the environment • They are cyclic in nature. • Exercise negative negative entropy. • A stable system is self-adjusting to a steady state. This is called negative feedback. • Equifinality. Open systems do not have to achieve their objectives in using one particular method. Abaho Ernest 29
    30. 30. Key variables in an organisation as a system • People – as individuals or groups • Technology • Organisation structures and • Environment Abaho Ernest 30
    31. 31. Model of an organisation as an open system Abaho Ernest 31 People Materials e.t.c Information Finance Production & Marketing activities Planning, organising & control mechanisms Research & Development e.t.c Products Services Ideas Waste INPUTS CONVERSION OUTPUTS Feedback of information & results
    32. 32. Systems - continued • A system consists of subsystems • An organisation’s boundaries, which are often invisible, are defined strategically by stating the scope of its activities. • Subsystems also have boundaries, which are called interfaces. • Some employees work at external boundaries in such activities as: – Capital raising, Purchasing and Customer interaction • Internal boundary employees manage interfaces • Some sub-systems tend to be relatively self-contained – closed. Abaho Ernest 32
    33. 33. Contingency approaches • Contingency builds on systems approach • It recognises organisations to consist of interdependent components: – External environment, Technology and Human skills and motivation • Contingency approach suggests that organisations should look for the most appropriate combination of structural design in a given environment. • Initially suggested by two American researchers at Harvard called Lawrence and Lorsch (1967) and several others shortly followed. Abaho Ernest 33
    34. 34. Modern approach to management • Current approaches to management are more of management currently in practice than mere mare management theory. • Modern management background stems from – Advances in technology, Increased competition and expanding markets, especially from Asia, – Increasing consumer expectations – Improvements in communication, – General globalisation making the world more inter- connected than ever before. Abaho Ernest 34
    35. 35. Strategic management approach • Organisations to clearly state a vision and mission, • Formulation of organisation objectives • External environment analysis • Organisation (internal) analysis • Strategic choice and strategic implementation • Managing change in and around the organisation • Developing and utilising new technology • Developing and utilising skilled labour • Creation of flexible structures but with relative stability Abaho Ernest 35
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