Makerere University Business School
Strategic Management Course
MANAGEMENT THEORIES - 2
Human Relations and social psychological
• These theorists were academics and social
• They were concerned with the human factor
• 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).
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
Motivation basic model
Motivation has the following components
Behaviour Satisfaction /
• 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 productivity
• “Man is a social animal”
• Individual workers cannot be treated in
• Belonging to a group is more important than
monetary incentives and good physical
• Informal groups strongly influence workers’
Abraham Maslow (1950 / 60s)
• Physiological needs: Need for food, sleep, sex,
• Safety needs: Stable environment relatively free
• Love needs: Group status, affectionate relations
• Esteem needs:Self respect, self-confidence
• Self-actualisation: Self-fulfilment
Maslow’s needs - continued
• That people tended to satisfy the above
• 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
D McGregor – Theory X and Theory Y
• Managers’ assumptions about employees
• That employees are lazy, require coercion
• Avoid responsibility, seek security
• Similar to a rational economic man
suggested by Schein & Adam Smith)
• Strongly related to scientific management
• 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
Later Motivation theories
Theory Z – The Japanese approach
• American exponent of Japanese approach,
• Attempts for western firms to adapt Japanese
• Based on success of Japanese manufacturing
• 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
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.
• Slow decision making
• Imprisoning lifetime employment
SYSTEMS & CONTINGENCY
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.
Characteristics of open systems
• They receive inputs or energy from the
• 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.
Key variables in an organisation as
• People – as individuals or groups
• Organisation structures and
Production & Marketing
Planning, organising &
Research & Development
INPUTS CONVERSION OUTPUTS
Feedback of information & results
Model of an organisation as an open system
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
• Some employees work at external boundaries in such
– Capital raising, Purchasing and Customer interaction
• Internal boundary employees manage interfaces
• Some sub-systems tend to be relatively self-
contained – closed.
• Contingency builds on systems approach
• It recognises organisations to consist of
– 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
Modern approach to
• 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.
Strategic management approach
• Organisations to clearly state a vision and
• Formulation of organisation objectives
• External environment analysis
• Organisation (internal) analysis
• Strategic choice and strategic implementation
• Managing change in and around the
• Developing and utilising new technology
• Developing and utilising skilled labour
• Creation of flexible structures but with relative