The

Management of
People Module 2
The Functions and Theories of Management
 The Need for and Nature of
Organizations
• Simply put an organization is a group of people working
together to achieve a common or collective goal.
Organization work to transform input into output which
have greater value than the input used.
• Each organization may be different in many ways. This
difference is sometimes caused by management theory
that is being utilized. .
 The Major Management
Theories
• The classical theories
• Human Relations school of behavioral theories
• The system management approach
• Contingency theory
 The Classical
Theories
• This form of management theory dates from as far back as
the industrial revolution when it was adopted to deal with
the new problems that had emerged. Managers found it
difficult at time to train employees and decrease
dissatisfaction. This led to the development of classical
theories as they try to find a proper solution.
 The Three Main
Classical Theorists
• Fredrick Taylor
• Henri Fayol
• Max Weber
 Scientific Management:
Frederick. W Taylor (1856-1915)
• Fredrick Taylor is usually regarded as the father of
scientific management. During the time of the
development of this theory most managers had little
contact of the activities of the factory. Instead foremen
were given full control to produce the good that was in
demand.
• Worker would generally use the available tools and
developed methods that fits their style of work. This had
become counterproductive and inefficient, and workers
were after dissatisfied.
 Scientific
Management
• Taylor viewed man as an economic animal meaning that
he was rational and made economic choices based on the
monetary or material reward to be gained.
• This view of the economic man led him to develop
payment systems which link efforts with the reward
received.this was done using a piece rate system.
 Scientific
Management
• Taylor’s study outlined ways in which managers could use
the principles of his theory to improve productivity.
• His theory suggested that work should be broken down
into smaller components or tasks to enable workers to
specialize and become more competent at those tasks.
 Taylor’s Four Principles of
Scientific Management
• Develop a scientific study of management, with stated rules, laws and principles
to replace the outdated rule of thumb method.

Rule of thumb- a broadly accurate guide or principle, based on practice rather than
theory. 10 hours is needed to analyze each hour of data.

• Workers would be selected scientifically, trained and develop as opposed to past

practices where they were selected randomly and usually untrained.
 Taylor’s
Principles
• Cooperate with workers in order to ensure that work is
done in accordance with the prescribed scientific
principles.
• There should be an equal division of task and
responsibilities between managers and workers.
 Elements of Scientific
Management
• The separation of Planning from the actual performance of
the task
• Carefully selecting workers to carry out a task on a
scientific basis.
• Closing observing workers doing the task and
documenting findings.
• Carrying out job analysis to ascertain the best way of
completing a task.
 Benefits of Scientific
Management
• Factories that Implemented his approach benefited from
increased productivity
• Some organizations benefited from increased profits
 Drawbacks To Scientific
Management
• Some people were opposed to the use of stopwatches to
assess the work done in a day.
• His view of the economic man was heavily criticized
because humans were compared to machine and would
only be satisfied by money.
 Administrative Management:
Henri Fayol (1841- 1925)
• Henri is also a classical theorist and is regarded as the
father of modern management. His theory of
administrative management was developed around the
same time as Taylor’s, but he did not focus on the
workers.
• Instead, he focus on management from the upper level of
administration.
 Administrative
Management
• Henri concluded that business activities are divided into
six interdependent groups which managers should
coordinate as to achieve the organization’s goals.
 Six Interdependent Groups
• Technical- including manufacturing, production and
adaptation
• Commercial- including buying and selling
• Security- extended to both property and individuals
• Accounting- inventory and financial accounting
• Managerial- including the function of management.
Planning etc.
 Henri Five Function of
Management
• Planning
• Organizing
• Commanding
• Coordinating
• Controlling
 Fayol’s 14 Principles of
Management
• Division of labour
• Authority and responsibility
• Discipline
• Unity of command
• Unity of directive
• Remuneration
Bureaucratic Management: Max
Weller(1864-1920)
• Bureaucratic management was developed by Max Weber,
a German sociology. His work focused mainly on how the
organization was structured rather than the practical
problems of management proposed by Taylor and Fayol.
Having viewed and analyzed the growth of large-scale
organizations Weber developed a set of principles for
what he dubbed an ideal bureaucracy.
 Bureaucratic
Management
• To Weber, ideal bureaucracy was based on legal authority
rather than traditional or charisma. This legal authority
comprises of rules and controls that govern the
organization.
• Weber believes that managers were given the mandate to
enforce these rules and control based upon the authority
given to them by the office in which they operate.
 Weber Six Characteristics of
Bureaucracy
• Division of labour
• Authority hierarchy
• Formal selection
• Career orientation
• Formal rules and controll
• Impersonality
 Criticisms Faced by
Weber’s Theory
• The constant dependence on rules and control may
impede the organizations' ability to change to meet the
changing environment
• Rules and controls may become tedious over time and
lead to inefficiencies rather than the efficient running of
the business
 Human Relations School of
Behavioral Theories
• This theory focus on the human side of management.
• Their view was that management needs to focus on
people more than science or techniques, as purported by
the classical theorists.
• These theorists led by Elton Mayo, studied the reaction of
employees to performance incentive schemes, job
satisfaction and working conditions.
 The Hawthorne Study: Elton
Mayo
• The main purpose of the research was to determine the
effect of working conditions on productivity. The study
started out by trying to determine the relationship
between lighting in the work area and employee
productivity.
 Findings From
Hawthorne Study
• Workers are not motivated only by money buy also by
social and personal factors
• Effective supervision helps to maintain employee's morale
and productivity
• More emphasis should be place on informal groups and
they may have a significant impact on employees'
performance
 Criticisms of This
Theory
• Humans are complex and so predicting behavior may be
more difficult than presented
• There are other factors outside of motivation that affect
working performance.
 The System Management
Approach
• The system approach is a modern form of management. It focus on
the organization as a system that transforms inputs into outputs.
• A system is a set of interdependent parts (subsystem) that relates
to each other in the accomplishment of a task.
• System theorist believes that business should be analyzed in terms
of the interaction of their basic components. There components
could lead to an improvement in the business’s performance.
• System approach suggested that management should integrates its
major functions: planning, controlling etc.
 Contingency
Theory
• After analyzing the existing management theories in the
late 1950s Joan Woodward and other theorists developed
the contingency theory. These theorists believed that
there was no one best way to carry out a task.
• The theory stipulated that each situation is affected by
different factors and must be treated on its own merit.
• With this in minthe contingency approach is flexible and
draws on the concepts of all pervious theories in solving a
problem.
 Main Ideas of Contingency
Approach

• For organization to be effective, its subsystems must be in

sync
• A universal or one best way to manage does not exist
• The organization should ensure that there is coordination
between its design and subsystems and the environment
in which it operates.
 Functions of
Management
• Management is the process of organizing the available
resources of the business to achieve a desired result.
• A manager is an individual who makes decisions about the
use of limited resources and the planning, organizing
controlling and directing these resources to achieve the
organization’s goals.
 Three Levels of
Management
• Top level
• Middle level
• Low level
 Roles of
Management
• Decisional role
• Informational role
• Interpersonal role