MANAGEMENT

PRACTICE

Dr. Kennedy Ogollah

kogollah@uonbi.ac.ke

1
 SESSION THREE
EVOLUTION OF MANAGEMENT
 The driving force behind the evolution of
management theory is the search for better
ways to utilize organizational resources.

3
The Evolution of Management Theory

Organizational Environment Theory

Management Science Theory

Behavioral Management Theory

Administrative Management Theory

Scientific Management Theory

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
 Modern
Management
1920-1950
School
Neo-Classical
Management Systems
1880 - 1930
School Contingency
Classical
Organizational
Management Human Relations
Humanism
School Behavioral
Management
Scientific Science
Administrative
Bureaucratic 5
 Small-scale Large-scale
Crafts Production Mechanized Manufacturing

Managed by engineers who only had

Technical orientation

Problems faced:

•How to handle people

•Social problems relating to working together
in large groups
•How to increase efficiency of the worker-task mix
Job specialization and the Division of Labor

• Famous economist, Adam Smith, journeyed

around England in 1700’s studying the effects
of industrial revolution.

7
 With insights gained from Adam
Smith’s observations, other
managers and researchers began to
investigate how to improve job
specialization to increase
performance.
They focused on how to organize
and control the work process.

8
 F.W. Taylor (1856-1915)
Scientific Management
The systematic study of relationships
between people and tasks for the
purpose of redesigning the work process
to increase efficiency.

Taylor believed that if the amount of time and effort

that each worker expends to produce a unit of
output can be reduced by increasing specialization
and division of labor, the production process will
become more efficient.
 Taylor’s Principles
1. Study the way workers perform their tasks, gather all
informational job knowledge that workers possess, and
experiment with ways of improving how tasks are
performed
2. Codify the new methods of performing tasks into written
rules and standard operating procedures.
3. Carefully select workers who possess skills and abilities that
match the needs of the task, and train them to perform the
task according to the established rules and procedures.
4. Establish a fair or acceptable level of performance for a task,
and then develop a pay system that provides a reward for
performance above the acceptable level.
 This scientific management became nationally
known, but the selective implementation of the
principles created more harm than good.

• Workers felt that as their performance increased,

managers required them to do more work for the
same pay.
• Increases in performance meant fewer jobs and
greater threat of layoffs
• Monotonous and repetitive
• Dissatisfaction
 The Gilbreths
**Frank Gilbreth (1868-1924) &Lilian Gilbreth (1878-1972)

Time and Motion Study

1. Break and analyze every individual action necessary
to perform a particular task into each of its
component actions
2. Find better ways to perform each component action
3. Reorganize each component action so that it is more
efficient-less cost of time and effort

Their goal was to maximize the efficiency with which each

individual task was performed.
 Study of Fatigue
• How physical characteristics of the workplace
contribute to job stress
• Effects of lighting
• Effects of heating
• Effects of color of walls
• Design of tools and machines
 Administrative Management Theory

• Theory of Bureaucracy

• Fayol’s Principles of Management

Administrative Management

The study of how to create an

organizational structure that leads to
high efficiency and effectiveness.
 Theory of Bureaucracy
Max Weber (1864-1920)

Developed the principles of bureaucracy-a

formal system of organization and
administration designed to ensure efficiency
and effectiveness.
 System of written rules and
SOPs that specify how
Employees should
behave

Clearly specified Clearly specified

System of task and A bureaucracy Hierarchy of
Role relationships Should have authority

Selection and evaluation

System that rewards
Employees fairly and
Equitably.
 5 Principles:
1. A Manager’s formal authority derives from the position he or she
holds in the organization
2. People should occupy positions because of their performance,
not because of their social standing or personal contacts.
3. The extent of each position’s formal authority and task
responsibilities and its relationship to other positions in an
organization, should be clearly specified.
4. Authority can be exercised effectively in an organization when
positions are arranged hierarchically, so employees know whom
to report to and who reports to them.
5. Managers must create a well-defined system of rules, standard
operating procedures and norms so that they can effectively
control behavior within an organization.
 Rules
Formal written instructions that specify actions
to be taken under different circumstances to
achieve specific goals.

Example: At the end of the day employees are to

leave their machines in good order.
 Standard Operating Procedures
Specific sets of written instructions about how
to perform a certain aspect of a task.

SOP: Specifies exactly how they should do so,

which machine parts should be oiled or
replaced.
 Norms
Norms are unwritten, informal codes of conduct
that prescribe how people should act in
particular situations.

E.g.: An organizational norm in a restaurant

might be that waiters should help each other
if time permits.
Fayol’s Principles of
Management

Henri Fayol (1841-1925)

 14 Principles of Management:
1. Division of Labour 9. Initiative
2. Authority and 10. Discipline
Responsibility 11. Remuneration of
3. Unity of Command Personnel
4. Line of Authority 12. Stability of tenure of
5. Centralization Personnel
6. Unity of Direction 13. Subordination of
7. Equity Individual Interests to the
Common Interest
8. Order
14.Esprit de Corps
 1. Division of Labour
Job specialization and the division of labour should
increase efficiency. Pointed out the disadvantage of
too much specialization; so workers should be given
more duties to perform.

Managers have the right to give orders and the

power to exhort subordinates for obedience.
 3. Unity of Command
An employee should receive orders from only one
superior.

The length of the chain of command that extends

from the top to the bottom of an organization
should be limited.

Authority should not be concentrated at the top of

the chain of command.
 6. Unity of Direction
Those operations within the organization that have the same
objective should be directed by only one manager using one
plan. For example the personnel department in a company
should not have two directors each with a different hiring
policy.

Managers should be both friendly and fair to their

subordinates.

Materials and people should be in the right place at

the right time. People should be in the jobs that
they are most suited to.
 9. Initiative
Subordinates should be given the freedom to conceive and carry
out their plans, even though some mistakes may result.

Members in an organization need to respect the rules and agreement

that govern the organization.

To Fayol, discipline results from good leadership, fair agreements and

judiciously enforced penalties for infractions.

Compensation for work done should be fair to both employees and

employers.
 12. Stability of Tenure of Personnel
A high employee turnover rate undermines the
efficient functioning of an organization.

Interests of employees should not take precedence

over the interests of the organization as a whole.

Promoting team spirit will give the organization a sense of unity.

To Fayol, even a small factors should help to develop the spirit. He
suggested, for example, the use of verbal communication instead of
formal, written communication whenever possible.
Summary: The Classical School of
Management

Scientific Bureaucratic Administrative

Concern for Development of

Impersonal view
precise work managerial
of organizations
methods principles

Formal structure,
legitimate Best way to
Best way for jobs
authority and organize all jobs in
to be done
competence of a business
management

29
 Criticisms of The Classical School of
Management
• No one is entirely driven by economic motivations.
People’s choices and behavior are dictated by other
factors such as social needs, security and self-
esteem.

• There is no such thing as “the best way” to do a job.

Extreme division of labor tends to produce
monotony and reduce overall skill levels.

• People are managed like machines. Introduction of

newer machines led to job elimination.

30
 Behavioral Management
Theory
• The Work of Mary Parker Follet

• The Hawthorn Studies and Human Relations

• Theory X and Y
 Behavioral Management

The 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.
 Mary Parker Follet
• Mary Parker Follett advocated for a human relations emphasis.
• Her work contrasted with the "scientific management" of Frederick
W. Taylor.
• Mary Parker Follett stressed the interactions of management and
workers.
• Follett was one of the first to integrate the idea of organizational
conflict into management theory, and is sometimes considered the
"mother of conflict resolution.“
• She coined the words "power-over" and "power-with" to
differentiate coercive power from participative decision-making
• She was of the view that authority should go with knowledge.
• Advocated involvement of workers in job analysis and work
development process.
• Managers of different departments should communicate with each
other directly.
• Cross-functioning
 The Hawthorne Studies

Hawthorn effect is the finding that a manager’s

behavior or leadership approach can affect
worker’s level of performance.
 Human Relations Movement

Advocates of the idea that supervisors receive

behavioral training to manage subordinates in
ways that elicit their cooperation and increase
their productivity.
 Informal Organization

The system of behavioral rules and norms that

emerge in a group.
 Organization Behavior

The study of the factors that have an impact on

how individuals and groups respond to and
act in organizations.
 Theory X and Theory Y
Douglas McGregor proposed that two sets of
assumptions about how work attitudes and
behaviors not only dominate the way
managers think but also affect how they
behave in organizations. He named these two
assumptions Theory X and Theory Y.
 Theory X
Assumptions:
• Average worker is lazy
• Dislikes work
• Will try to do as little as possible
• Have little ambition and avoid responsibility
Managers Who Accept Theory X

To keep performance high, workers must be

supervised closely and their behaviors be
controlled by means of “the carrot and stick”-
rewards and punishments.
• Design and shape work setting to maximize
control over workers’ behaviors.
• Minimize the workers’ control over the pace
of work.
• Focus is on development of rules, SOPs and a
well-defined system of reward and
punishment to control behavior.
• Managers see little point in giving autonomy
to solve their own problems.
• Managers see their role as closely monitoring
workers.
 Theory Y
Assumptions:
• Workers are not inherently lazy
• Do not naturally dislike work
• If given the opportunity, will do what is good
for the organization.
• Characteristics of the work setting determine
whether workers consider work to be a source
of satisfaction or punishment.
• Managers do not need to closely control
workers’ behavior.
• They exercise self-control
“The limits of collaboration in the organization
are not limits of human nature but of
management’s ingenuity in discovering how to
realize the potential represented by its human
resources.”
• Decentralize authority
• More control of workers over their jobs
• Accountable for their jobs
• Managers’ role is not to control but to provide
support and advice and to evaluate them on
their ability
 Summary: Neo-Classical School of
Management
• Behavioral School is a logical extension of the Human
Resource School.

• They are largely concerned with motivation of workers.

• Workers are diverse in their needs and want challenging

work, participative decision-making, self-direction and
control.

• Managers must help workers deal with situational

constraints and social aspects of organizational and
environmental changes.

46
 Core Concepts
of Modern School of Management
• Dealing with complexity is the core of modern management theory.
• Organizations, Workers, Environment and the interactions between
them.
• It is a synthesis of several theories.
• Behavioral science, mathematics, statistics, operations / quantitative
research and computing technologies.
• Management is an exercise in logic applied to situations.
• Situations can be measured.
• Computers have an increasing role to play.
• Application of management knowledge is extended to non- business
areas.
• Education, government, health care and others.

47
 Management Science Theory

An approach to management that uses rigorous

quantitative techniques to help managers
make maximum use of organizational
resources.
• Quantitative Techniques

• Operations Management

• Total Quality Management

• Management Information Systems

 Organizational Environment
Theory

The set of forces and conditions that operate

beyond an organization’s boundaries but
affect a managers ability to acquire and utilize
resources.