MANAGEMENT

THEORIES
ØWhat is a theory?
ØA general body of
assumptions and
principles
 used to describe a
particular set of facts or
some
 THEORY
 An explanation for
how or why
something occurs. .
.



Question: What is
 Functions of
Theory
• Describe
• Explain
• Predict
• Control


• Classical approaches to
organizational management
and early organizational
theories were designed to
predict and control behavior in
organizations.
 Classical
Theories of
Organizations
vEmerged in early part of the
twentieth century.
vModels were military and the
Catholic Church.
vFeatures
vStrict CONTROL of workers
vAbsolute CHAINS of
COMMAND
vPREDICTABILITY of
behavior
 The Evolution of
Management Theory

Source:
© Copyright McGraw-Hill. All rights reserved. Figure 2.1 5
 Classical
Approach
v
vWhat are the three
primary classical
theories
ØAdministrative
Management Theory
ØScientific Management
Theory
 Scientific
Management
• Frederick Taylor
• Lillian Glibreth
• Henry Gantt
• Managers, not
workers, should
determine how work
 Scientific
Management
Frederick W . Taylor
- The One Best Way
- Standardize fair day ’ s work
- Substituting research
science rules for
rules of thumb
- Scientifically select ,
train , teach and
develop employees
- Provide detailed
instructions and
- supervision of each worker
- Piece - meal pay
 F.W. Taylor and Scientific
Management
vScientific Management
ØThe systematic study of the
relationships between people
and tasks for the purpose of
redesigning the work process
for higher efficiency.
ØDefined by Frederick Taylor in
the late 1800’s to replace
informal rule of thumb
knowledge.
Ø
 Taylor’s Theory of
Scientific Management
• Elements of Scientific
Management
– Scientific design of every aspect of every
task
• Time and Motion Studies
– Careful selection and training of every task
– Proper remuneration for fast and high-
quality work
• Maximize output - increase pay
– Equal division of work and responsibility
between worker and manager
• Underlying Themes
– Managers are intelligent; workers are and
should be ignorant
– Provide opportunities for workers to
achieve greater financial rewards
– Workers are motivated almost solely by
 Four Principles of
Scientific Management
vPrinciples to increase
efficiency:
1.Study the ways jobs are
performed now and determine
new ways to do them.
• Gather detailed time and motion
information.
• Try different methods to see which
is best.
2.Codify the new methods into
rules.
• Teach to all workers the new
method.
 Problems with Scientific
Management
• Managers frequently
implemented only the
increased output side of
Taylor’s plan.
– Workers did not share in the
increased output.
• Specialized jobs became very
boring, dull.
– Workers ended up distrusting the
Scientific Management method.
• Workers could purposely “under-
 Frank and Lillian
Gilbreth
• Refined Taylor’s work and made
many improvements to the
methodologies of time and
motion studies.
– Time and motion studies
• Breaking up each job action into
its components.
• Finding better ways to perform
the action.
• Reorganizing each job action to be
more efficient.
• Also studied worker-related
Fayol’s Administrative
Theory
vHenri Fayol (1841-1925)
ØGeneral and Industrial Management
ØPrinciples and Elements of
Management - how managers should
accomplish their managerial duties
ØPRIMARY FOCUS: Management
Ø (Functions of Administration)
ØMore Respect for Worker than Taylor
ØWorkers are motivated by more than
money
ØEquity in worker treatment
ØMore PRESCRIPTIVE
– http://www.lib.uwo.ca/business/fayol.html
 Fayol’s
Administrative
Theory
vFive Elements of Management
-- Managerial Objectives
– Planning
– Organizing
– Command
– Coordination
– Control
• Keep machine functioning effectively
and efficiently
• Replace quickly and efficiently any
part or process that did not
 Fayol’s Principles of
Management
vDivision of Labor: allows for job
specialization.
– Fayol noted jobs can have too
much specialization leading to
poor quality and worker
dissatisfaction.
vAuthority and Responsibility
– Fayol included both formal and
informal authority resulting
from special expertise.
vUnity of Command
 Fayol’s Principles of
Management (cont’d)
vLine of Authority
–A clear chain of command
from top to bottom of the
firm.
vCentralization
– The degree to which authority
rests at the top of the
organization.
vUnity of Direction
 Fayol’s Principles of
Management (cont’d)
vEquity
– The provision of justice and the fair
and impartial treatment of all
employees.
vOrder
– The arrangement of employees where
they will be of the most value to the
organization and to provide career
opportunities.
vInitiative
 Fayol’s Principles of
Management (cont’d)
vDiscipline
– Obedient, applied, respectful
employees are necessary for the
organization to function.
vRemuneration of Personnel
– An equitable uniform payment
system that motivates contributes
to organizational success.
vStability of Tenure of
Personnel
– Long-term employment is important
 Fayol’s Principles of
Management (cont’d)
vSubordination of Individual
Interest to the Common
Interest
– The interest of the organization
takes precedence over that of
the individual employee.
vEsprit de corps
– Comradeship, shared enthusiasm
foster devotion to the common
 Fayol’s Administrative
Theory
vPositioned communication as a
necessary ingredient to successful
management


vApplication in the Modern

Workplace
ØFayol’s elements of management
are recognized as the main
objectives of modern managers
ØPlanning - more participatory
ØOrganizing - human relationships
and communication
Fayol’s Administrative
•
Theory
Fourteen Principles of Management (Tools for
Accomplishing Objectives)
– Division of work - limited set of tasks
– Authority and Responsibility - right to give orders
– Discipline - agreements and sanctions
– Unity of Command - only one supervisor
– Unity of Direction - one manager per set of
activities
– Subordination of Individual Interest to General
Interest
– Remuneration of Personnel - fair price for services
– Centralization - reduce importance of
subordinate’s role
– Scalar Chain - Fayol’s bridge
– Order - effective and efficient operations
– Equity - kindliness and justice
– Stability of Tenure of Personnel - sufficient time
Administrative Management
Theory
vAdministrative Management
ØThe study of how to create an
organizational structure that
leads to high efficiency and
effectiveness.
vMax Weber
ØDeveloped the concept of
bureaucracy as a formal
system of organization and
administration designed to
ensure efficiency and
 Weber’s Theory of
Bureaucracy
• Max Weber (1864-1920)
– German Sociologist
– Theory of Social and Economic
Organization (1947)
– Principles and Elements of
Management - describe an ideal
or pure form of organizational
structure (general policy and
specific commands
– PRIMARY FOCUS: Organizational
Structure
– Worker should respect the “right”
 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 Theory of
Bureaucracy
• Tenets of Bureaucracy
ØRules
ØSpecified sphere of competence
ØHierarchy
ØSpecialized Training
ØWorkers do not own technology
ØNo entitlement to “official
position” by incumbent
ØEverything written down
ØMaintenance of “ideal type” -
bureaucracy
 Weber’s Theory of
Bureaucracy
vConcerned with describing
the ideal
 structure of an organization
vCornerstone: existence of
written rules


vThe rational application of

written rules ensures the
promotion of legitimate
Weber’s Principles of
Bureaucracy
 Weber’s Five Principles of
Bureaucracy
vAuthority is the power to hold
people accountable for their
actions.
vPositions in the firm should be
held based on performance, not
social contacts.
vPosition duties are clearly
identified so that people know
what is expected of them.
vLines of authority should be
 Weber’s Theory of
Bureaucracy
vApplication in the Modern
Workplace
üLarge organizations guided
by countless rules are
bureaucracies


ØLinked with inefficient, slow-

moving organizations
Ø
–Organizations have several
Behavioral Management
Theory
vBehavioral Management
ØThe 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.
ØFocuses on the way a
 Behavioral
Approach
H a w th o rn e S tu d ie s
1 9 3 0 ’s
ØShift of management theory
away from
pure mechanistic and economic
views of
worker motivation and
recognition that social
relationships could be greater
motivator .
ØWork groups influence individual
worker output
Supervisors attention has
significant influence on
productivity ( JM )
 Behavioral
Management
vMary Parker Follett
ØAn influential leader in early
managerial theory
ØHeld a horizontal view of
power and authority in
organizations
ØSuggested workers help in
analyzing their jobs for
improvements—the worker
knows the best way to
improve the job.
 Management Science
Theory
• An approach to management that
uses rigorous quantitative
techniques to maximize the use
of organizational resources.
Ø Quantitative management—utilizes
linear programming, modeling,
simulation systems.
Ø Operations management—
techniques to analyze all aspects
of the production system.
Ø Total Quality Management (TQM)—
focuses on improving quality
throughout an organization.
 Management Science
Approach
v
vFocus on mathematical models
vArthur D. Little one of the first
vDupont developed CPM (1950’s)
 Critical Path Method
vMost time-consuming set of
activities start to finish
vUS Navy developed PERT (following
year)
vProgram Evaluation and Review
Technique
 Organizational
Environment Theory


vOrganizational
Environment
–The set of forces and
conditions that operate
beyond an organization’s
boundaries but affect a
The Open-Systems
View
vOpen System
ØA system that takes resources for its
external environment and converts
them into goods and services that
are then sent back to that
environment for purchase by
customers.
ØInputs: the acquisition of external
resources.
ØConversion: the processing of inputs
into goods and services.
The Organization as an
Open System
 Other System
Consider ations
• Closed system
– A system that is self-contained and thus
not affected by changes occurring in its
external environment.
– Often undergoes entropy and loses its
ability to control itself, and fails.

• Synergy
– Performance that results when individuals
and departments coordinate their actions
• Performance gains of the whole surpass the
sum of the performance of the individual
Contingency Theory of Organizational
Design
 Mechanistic and Organic
Structures
• Mechanistic Structure
ØAuthority is centralized at the top.
(Theory X)
ØEmployees are closely monitored and
managed.
ØCan be very efficient in a stable
environment.
• Organic structure
– Authority is decentralized throughout
Managerial roles
Top managers spend
• their time as follows:
Interpersonal 59 % on scheduled

Roles meetings
Figurehead
• Informational Leader
Liaison
Decisional
22 % at their desks
10 % on unscheduled
• Monitor
Roles Roles
Entrepreneur meetings
Disseminator Disturbance

• Spokesperson handler
Resource allocator
Negotiator
6 % on telephone calls
3 % on inspecting facilities
•
Henry Mintzberg’s Managerial Roles

42
 T hank You

T hank You