Dambi Dolo University

College of business and economics

Department of management

Masters of Business Administration (MBA)

Individual assignment for Prepare Book chapter

Course Title: Theories and Practice Of Management

By: Ifa Fikadu

ID NO:pgw025/24

FEBRUARY, 2024

QELLAM WALLAGA, ETHIOPIA

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Chapter 2: Emerging Genesis of Management Thought

2.1 THE ERA OF CLASSICAL MANAGEMENT

The classical management era refers to a period in the late 19th and early 20th centuries when
management theory focused on improving efficiency and productivity in organizations. This
period was characterized by the development of systematic approaches to management, which
were driven by the industrial revolution. Three key contributors in this era were Frederick W.
Taylor, Henri Fayol, and Max Weber.

2.1.1 Frederick W. Taylor: The Scientific Theory of Management

Frederick Winslow Taylor is widely recognized as the father of scientific management. He

introduced the idea of applying scientific principles to management in order to increase
productivity and efficiency in industrial settings. His work was aimed at improving both worker
performance and organizational profitability.

Taylor’s scientific management is based on four key principles:

1. Scientific Study of Work: Observing and analyzing tasks to find the most efficient way
to perform them.
2. Scientific Selection of Workers: Recruiting the right workers for the right tasks and
providing training for them.

3. Standardization of Tools and Procedures: Ensuring that all workers use the same tools
and follow the same procedures to achieve uniform results.

4. Division of Labor: Dividing work into specialized tasks and assigning them to specific
workers to improve efficiency.

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While Taylor’s approach significantly improved productivity, it also faced criticism for treating
workers as mere parts of a machine, neglecting human factors such as motivation and job
satisfaction.

2.1.2 Henri Fayol: Principles of Administration

Henri Fayol was a French industrialist and theorist who is considered one of the founding figures
of modern management. He is best known for his 14 principles of management, which
emphasize the importance of administrative functions and managerial practices. His ideas were
instrumental in shaping the understanding of management as a distinct field of study.

Fayol's principles include:

1. Division of Work: Specializing tasks to improve efficiency.

2. Authority and Responsibility: Managers must have the authority to give orders, and
they must also be responsible for their actions.

3. Discipline: Employees must respect organizational rules and norms.

4. Unity of Command: Employees should receive orders from only one superior to avoid
confusion.

5. Unity of Direction: The organization should have a unified plan to align efforts toward
common goals.

6. Subordination of Individual Interest to General Interest: The interests of the

organization should take precedence over individual desires.

7. Remuneration: Fair compensation for employees to encourage productivity.

8. Centralization: Decision-making should be centralized or decentralized depending on

the organization’s needs.

9. Scalar Chain: A clear chain of command should exist within an organization.

10. Order: Materials and people should be in the right place at the right time.

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 11. Equity: Managers should be kind and just in dealing with employees.

12. Stability of Tenure: High employee turnover is costly and disrupts organizational
efficiency.

13. Initiative: Employees should be encouraged to take initiative within the framework of
organizational goals.

14. Esprit de Corps: Promoting team spirit and unity among employees.

Fayol’s ideas emphasized management as a distinct field of expertise and highlighted the
importance of systematic planning and organization in achieving business success.

2.1.3 Max Weber: The Bureaucratic Theory

Max Weber, a German sociologist, developed the Bureaucratic Theory of management, which
emphasized the need for a structured and formalized organizational hierarchy. Weber believed
that bureaucracies were the most efficient form of organization, especially in large enterprises.

Key features of Weber’s bureaucratic management include:

1. Clear Division of Labor: Specialized tasks and roles for each individual within the
organization.
2. Hierarchical Structure: A clear and rigid hierarchy of authority where every employee
reports to a superior.

3. Formal Rules and Regulations: A set of standardized procedures that guide decision-
making and operations.

4. Impersonality: Decisions are made based on rationality and rules, not personal
relationships or emotions.

5. Career Orientation: Employment is based on qualifications, and employees are

expected to have a long-term career within the organization.

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Weber’s bureaucratic theory emphasized order, efficiency, and predictability within
organizations. However, it also faced criticism for its rigidity and tendency to stifle creativity and
innovation.

2.2 ELTON MAYO: THE HUMAN RELATIONS APPROACH

Elton Mayo, an Australian psychologist, is known for his pioneering work in the Human
Relations Movement. Mayo’s approach emphasized the importance of social factors in the
workplace, particularly the relationships between workers and their environment. He believed
that employee satisfaction, motivation, and communication were crucial for improving
productivity.

2.2.1 Social Disorganization and Social Malaise

Mayo’s early research revealed that workers often experienced feelings of alienation and
dissatisfaction in industrial settings. He argued that these feelings were a result of social
disorganization—a breakdown in the traditional social structures and norms that had previously
governed life. In this environment, workers were disengaged and lacked a sense of belonging.

Mayo believed that organizations needed to address this social malaise by fostering a more
supportive and collaborative work environment.

2.2.2 Social Disorganization and the Individual

Mayo's findings extended to the individual level, where he observed that employees were not
just motivated by material incentives, but also by social needs such as recognition, belonging,
and teamwork. He concluded that organizations must address these human factors to improve
productivity and employee well-being.

2.2.3 Industry and Disorganization

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Mayo extended his ideas to the broader context of industrial society, arguing that the rapid
growth of factories and urbanization had disrupted traditional social structures. He felt that
organizations needed to adapt to this new reality by fostering a work environment that
recognized both the material and emotional needs of employees.

2.2.4 Mayo’s Empirical Studies

Mayo’s famous Hawthorne Studies were instrumental in demonstrating the importance of

social relations in the workplace. These studies examined the effects of various environmental
factors, such as lighting and work hours, on employee productivity. The results showed that
workers were more motivated when they felt valued and recognized by management, regardless
of changes in the physical work environment.

2.3 THE MODERN ERA

The Modern Era of management thought emerged in the mid-20th century, with an increased
focus on understanding organizations as complex systems and recognizing the role of human
behavior in organizational success. Several new management approaches arose, including
systems theory, the quantitative approach, and contingency theory.

2.3.1 Characteristics of Modern Approaches to Management

Modern management theories are characterized by a more holistic and flexible approach to
managing organizations. These approaches take into account both the external environment and
the internal dynamics of organizations, including human behavior, technology, and
organizational culture. The modern era emphasized innovation, adaptability, and
interdisciplinary collaboration.

2.3.2 Systems Approach

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The Systems Approach to management views organizations as complex systems composed of
interrelated parts that work together to achieve common goals. This approach emphasizes the
importance of feedback loops, adaptability, and the interdependency of various elements within
the organization. A system’s success depends on the interaction of its components, and changes
in one area can affect the entire system.

2.3.3 The Quantitative Approach

The Quantitative Approach to management focuses on the use of mathematical models,

statistical methods, and optimization techniques to make decisions and solve problems. This
approach gained popularity with the rise of computer technology and the ability to process large
volumes of data. Key tools include operations research, decision theory, and simulation models.
The aim is to make rational, data-driven decisions that improve efficiency and reduce costs.

2.3.4 The Contingency Approach

The Contingency Approach to management suggests that there is no one-size-fits-all solution to

management problems. Instead, effective management depends on the specific circumstances or
contingencies facing an organization. This approach emphasizes flexibility and adaptability,
recognizing that different situations require different management strategies. Factors such as the
organization’s size, environment, technology, and the personalities of its leaders can all influence
the best management practices to apply.

This chapter has outlined the evolution of management thought, from the classical theories of
Taylor, Fayol, and Weber to the human relations focus of Mayo and the more modern systems
and contingency approaches. Each stage of management theory has built on the previous,
contributing to the diverse and dynamic field of management we know today.

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 Answer for Take Home Exam assignment

1) Compare and contrast the Classical Theories of Management and Behavioral

Theories of Management

The Classical and Behavioral theories of management represent two distinct perspectives on how
to best manage organizations. While both approaches contributed significantly to the
development of management theory, they differ in focus and underlying assumptions.

Focus:
o Classical Theories: Primarily focus on improving organizational efficiency
through structured systems and processes. Theories such as Scientific
Management (Taylor), Administrative Theory (Fayol), and Bureaucratic
Theory (Weber) emphasize formalization, division of labor, hierarchy, and
rational decision-making.

o Behavioral Theories: Focus on human behavior, motivation, and interpersonal

dynamics within organizations. Theories such as Human Relations Theory
(Mayo), Maslow's Hierarchy of Needs, and Herzberg’s Two-Factor Theory
center on understanding employee needs and how they impact productivity and
satisfaction.

Assumptions:

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 o Classical Theories: Assume that employees are primarily motivated by monetary
rewards and that they are rational beings who will respond predictably to
structured systems and incentives.

o Behavioral Theories: Assume that employees are motivated by social factors,

such as recognition, relationships, and self-fulfillment, and that their behavior is
influenced by emotional and psychological needs.

Management Focus:

o Classical Theories: Emphasize efficiency, task specialization, and clear lines of

authority.

o Behavioral Theories: Focus on employee well-being, motivation, leadership

styles, and group dynamics.

Criticism:

o Classical Theories: Criticized for being too mechanistic and neglecting human
needs, leading to a lack of employee satisfaction.

o Behavioral Theories: Criticized for overly focusing on human relations and not
offering concrete, practical guidance for managing efficiency in large-scale
organizations.

2) What is the essence of behavioral leadership theory? Discuss in terms of

organization context.

Behavioral Leadership Theory is based on the premise that effective leadership is determined
by specific behaviors rather than inherent traits or qualities. It emphasizes how leaders behave,
interact with employees, and handle various situations. This theory stresses that leadership can
be learned through training and development.

Key elements of behavioral leadership theory include:

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 Task-Oriented Leadership: Focuses on the structure and completion of tasks, ensuring
that work is completed efficiently.
People-Oriented Leadership: Emphasizes interpersonal relationships, employee
motivation, and fostering a supportive work environment.

In an organizational context, this theory suggests that leaders can be trained to display behaviors
that align with the needs of their employees and the specific situation. For example:

Task-Oriented Leadership would be more effective in high-pressure environments

where clear instructions and close monitoring are necessary.
People-Oriented Leadership would be more effective in settings that require high
employee engagement, creativity, and collaboration.

Overall, behavioral leadership theory underscores the idea that leadership effectiveness is based
on how leaders behave and interact with others, rather than innate traits like charisma or
intelligence.

3) The neo-classical approach to management has not provided any such thing as
to replace the classical management theory. Do you agree with this statement?
Explain.

The neo-classical approach to management, which evolved in response to the limitations of

classical management theory, introduced the importance of human factors, motivation, and group
dynamics. While it helped to recognize that human behavior is crucial in managing
organizations, it did not entirely replace classical management theories.

Agreeing with the statement:

Limited Replacing Power: Neo-classical theories focused on individual and group

behavior but did not provide a comprehensive framework to replace the focus on
organizational structure, efficiency, and hierarchy provided by classical theories. The
classical focus on clear rules, division of labor, and authority structures continued to be
valuable, particularly in large organizations where systems and efficiency are paramount.

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 Emphasis on Human Relations but Not Systematic Management: While neo-classical
approaches contributed to a more holistic view of workers, they did not present a
systematic method for managing organizations. Classical theories are more robust in
ensuring operational efficiency and scalability.

Disagreeing with the statement:

Human Relations Focus: Neo-classical theories, such as the Human Relations

Movement, provided a deeper understanding of employee needs, motivation, and work-
group dynamics, which complemented the classical focus on task structure. This shift
added a human element, which was essential in enhancing employee satisfaction and
productivity.
Complementary Role: Rather than replacing, the neo-classical approach provided a
complementary framework that balanced the mechanical nature of classical theory with
a focus on human motivation, helping to create a more rounded approach to management.

4) Unlike the classical and behavioral theories, contingency theories tend to focus
on the importance of situational characteristics. Discuss.

Contingency theories of management emphasize that there is no single "best" way to manage.
Instead, effective management depends on the specific situation or context in which an
organization operates. Unlike classical theories, which advocate for universal principles, or
behavioral theories, which focus on human behavior, contingency theories recognize the
importance of external and internal factors that influence management decisions.

Key features of contingency theory:

Situational Leadership: Leadership styles must be adapted based on the specific

circumstances of the organization or team, such as the level of employee readiness, the
complexity of the task, and the external environment.
No One-Size-Fits-All: What works in one organization or situation may not work in
another. The manager must assess the circumstances, including factors like technology,

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 organizational culture, employee skills, and external environment, and adjust their
approach accordingly.

Flexibility: Managers must be flexible in their approaches and respond to varying

demands from different departments, teams, or situations.

Contingency theories bridge the gap between the mechanistic focus of classical theory and the
human-centered focus of behavioral theory, providing a more adaptable and situational approach.

5) Explain Herzberg's Two-Factor Theory of Motivation. How did Herzberg

arrive at his theoretical framework? According to this conceptualization, what
role does money play in the motivation process?

Herzberg's Two-Factor Theory distinguishes between two types of factors that influence
motivation:

Hygiene Factors: These are extrinsic factors (such as salary, work conditions, and
company policies) that do not motivate employees but prevent dissatisfaction. If hygiene
factors are not met, employees will be dissatisfied, but improving them does not
necessarily increase motivation.
Motivators: These are intrinsic factors (such as achievement, recognition, and
opportunities for personal growth) that lead to higher levels of motivation and
satisfaction.

Herzberg's Research: Herzberg arrived at his theory through interviews with engineers and
accountants, asking them to describe situations in which they felt particularly good or bad about
their work. The analysis of their responses led Herzberg to conclude that factors causing
dissatisfaction (hygiene factors) were different from those that led to satisfaction and motivation
(motivators).

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Role of Money: Money is considered a hygiene factor. While adequate compensation is
necessary to prevent dissatisfaction, it does not lead to higher levels of motivation or job
satisfaction. Motivating factors are more related to the intrinsic enjoyment and personal
fulfillment one gets from the job itself, rather than external rewards like salary.

6) Enlighten the contribution of scientific management movement to the

development of management thought.

The Scientific Management Movement, spearheaded by Frederick W. Taylor, significantly

influenced the development of management thought by introducing systematic methods to
improve labor efficiency and productivity. Key contributions include:

Time and Motion Studies: Taylor introduced the concept of studying tasks to identify
the most efficient methods and eliminate unnecessary movements.
Task Specialization: By breaking down work into smaller, specialized tasks,
productivity could be maximized.

Standardization of Tools and Procedures: Standardizing work processes and tools

allowed for consistency and efficiency.

Incentive-Based Pay: Taylor advocated for piece-rate pay, which rewards workers for
their output, motivating them to increase productivity.

This movement laid the foundation for future management practices focused on efficiency and
rational decision-making, although it faced criticism for neglecting the human aspect of
management.

7) What are the major findings of Hawthorne experiments? What are the major
contributions of the Hawthorne experiments to the present-day organizations?

The Hawthorne Experiments, conducted by Elton Mayo and others, were pivotal in changing
how managers understood employee motivation. Key findings included:

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 The Hawthorne Effect: Workers' productivity increased simply because they were being
observed, not due to changes in the physical work environment.
Social Factors Matter: Employee performance was influenced by social factors, group
dynamics, and the relationships with supervisors, rather than just physical working
conditions.

Importance of Recognition: Recognition, attention from supervisors, and employee

morale played a significant role in productivity.

The major contributions to present-day organizations include:

A shift towards focusing on human relations, teamwork, and employee motivation.

Recognition of the importance of psychological and social factors in the workplace.

An emphasis on employee well-being and participative management.

8) When faced with declining productivity or reduced profitability, some

companies turn to piece rates as a means of compensating employees. Make the
case for and against the use of piece rates as a means of remuneration.

For Piece Rates:

Increased Productivity: Piece rates can motivate workers to increase their output since
they are paid per unit of work completed.
Clear Incentives: Piece rates provide a direct link between effort and reward, which can
drive motivation.

Efficiency: Employers can benefit from higher productivity without increasing fixed
labor costs, making it easier to scale operations.

Against Piece Rates:

Quality Concerns: Workers may focus on quantity over quality to maximize earnings,
which can reduce the overall quality of products or services.

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 Employee Discontent: If workers feel that piece rates are too low or unfair, it can lead to
dissatisfaction and lower morale.

Not Suitable for All Tasks: Piece rates are more effective in tasks that have clear,
measurable outputs (e.g., manufacturing), but less effective in knowledge-based or
service-oriented roles.

Incorporating theories like Taylor’s Scientific Management and Herzberg’s Two-Factor

Theory, the use of piece rates must be balanced carefully to ensure that it motivates workers
without causing burnout or quality issues.

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