TOPIC 2
CONTRIBUTIONS BY MANAGEMENT THEORISTS
Lecture Outline:
2.1 Introduction
2.2 The Scientific Management: F.W Taylor
2.3 Administrative Management: Henri Fayol
2.4 Bureaucratic Management: Max Weber
2.5 Human Relations: Elton Mayo
2.6 Systems Approach and Contingency Management
2.7 Management By Objectives (MBO): Peter Drucker
2.8 Review Questions
2.9 Reading List
Lecture Objectives:
At the end of this lecture students should be able to:
Appreciate the development or evolution of management with reference
to the various Management theorists.
Understand management theories in order to determine how best the
management can maximize their productivity and how to make the most
of the human assets at their disposal.
Articulate the contributions made by the various management theorists in
the field of management.
Discuss the relevance of these management theories in today’s business
environment.
2.1 Introduction
Management involves the fusing of individual and group goals to match the
goals of the organisation. There are many management theories floating
around in the business world which benefit these managers, other business
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people (entrepreneurs) as well as business students. Some scholars argue
that the primary objective of any business entity or organisation is profit
maximization. Nonetheless, that objective is attained through the
managements’ ability to lead and manage the employees who contribute
tirelessly towards the vision, mission and goals of the organisation. Therefore
the study of management theories is pertinent as it contributes to any
business manager some concrete techniques that inspire greatness within
the various organizational groups and teams.
2.2 Scientific Management
Theorist: Frederick W. Taylor’s (1856-1915)
The theory looks at ‘the best way’ to do a job.
Frederick Taylor is known as the father of scientific management. He
joined the Midvale Steel Company as a laborer, and rose to the position of
chief engineer, where he performed exhaustive experiments on worker
productivity, which eventually developed into the theory of scientific
management.
His approach to management emphasized empirical research to increase
organizational productivity by increasing the efficiency of the production
process.
The Scientific Management Theory states that:
1. Jobs should be designed so that each worker has a well-specified,
well-controlled task and specific procedures and methods for each
job, and these must be strictly followed.
2. Managers are not only superior intellectually to the average
employee, but that they have a positive duty to supervise staff and
organize their work activities. Thus, it was only applied to low-level
routine and repetitive tasks that could be managed at supervisory
level.
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The Four Principles of Scientific Management
1. A ‘best’ methodology should be developed scientifically for each task.
2. Managers should select the best person to perform the task and ensure
that the best training is given.
3. Managers are responsible for ensuring that the best person for the job
does the job using the best methodology.
4. Remove all responsibility for the work method from the worker and give
it to management. The worker is responsible only for the actual job
performance (Differential Wage System/Differential Piece Rate).
NB: Application of the Scientific Management Theory was shown to lead
to improvements in efficiency and productivity.
However, flaws in the theory are evident:
Employees become bored and frustrated as they are relieved of much
responsibility.
Jobs end up becoming more repetitive.
Removing the workforce from the design and control of jobs leads to an
increasing gulf of knowledge between management and the workforce.
Exercise 1
Critically discuss the contributions to the management field that has been
made by Frederick Taylor.
Exercise 2
Case Study Question
Sanchit, after completing his entrepreneurship course from Sweden returned
to India and started a coffee shop ‘AromaCoffeeCan’ in a famous mall in New
Delhi. The speciality of the coffee ship was the special aroma of coffee and a
wide variety of flavours to choose from. Somehow, the business was neither
profitable nor popular. Sanchit was keen to find out the reason. He appointed
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Sandhya, an MBA from a reputed college, as a Manager to find out the
causes for the same. Sandhya took feedback from the clients and found out
that though they loved the special unique aroma of coffee but were not
happy with the long waiting time being taken to process the order. She
analysed and found out that there were many unnecessary obstructions in
between which could be eliminated. She fixed a standard time for processing
the order. She also realised that there were some flavours whose demand
was not enough. So, she also decided to stop the sale of such flavours. As a
result within a short period Sandhya was able to attract the customers.
Required: Identify and explain any two techniques of scientific management
used by Sandhya to solve the problem.
2.3 Administrative Management: 14 Principles of Management
Theorist: Henri Fayol (1841-1925)
The theory emphasizes the flow of information within the organisation.
Henri Fayol was a French industrialist and one of the most influential early
management thinkers.
Based on his experience in management, he developed fourteen general
principles of management as follows:
1. Division of Work and specialization to produce more work for less effort.
2. Authority to give orders and the power to exact obedience.
3. Discipline and respect between a firm and its employees.
4. Unity of command where an employee receives orders from only one
superior.
5. Unity of direction where there is only one central authority and one
plan of action.
6. The general interest is superior to individual interests.
7. Remuneration is fair and provides satisfaction both to the employee
and employer.
8. There is centralization, where there is always one central authority.
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9. There is a scalar chain, where a chain of authority exists from the
highest level to the lowest ranks.
10. Order, where the right materials and people are in the right place for
each activity.
11. Equity, kindliness and justice are seen throughout the organisation.
12. Stability of tenure of personnel to maintain a stable work force.
13. Initiative is encouraged to motivate employees.
14. Esprit de Corps is recognized as important, and teamwork is
encouraged.
NB: Henri Fayol’s principles of management are all based upon his
experience in management.
Exercise 3
The principles of Taylor and Fayol are mutually complementary. One
believed that management should share the gains with the workers while the
other suggested that employees’ compensation should depend on the
earning capacity of the company and should give them a reasonable
standard of living.
Required: Identify and explain the principles of Fayol and Taylor referred to
in the above paragraph.
Exercise 4
Case Study Question
Nutan Tiffin Box service was started in Mumbai by the Mumbai Dabbawalas.
The Dabbawalas who are the soul of entire Mumbai aim to provide prompt
and efficient services by providing tasty homemade tiffin to all office goers at
the right time and place. The service is uninterrupted even on the days of
bad weather, political unrest and social disturbances. Recently, they have
started online booking system through their website ‘mydabbawala.com’.
Owing to their tremendous popularity amongst the happy and satisfied
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customers and members, the Dabbawalas were invited as guest lecturer by
top business schools. The Dabbawalas operate in a group of 25-30 people
along with a group leader. Each group teams up with other groups in order to
deliver the tiffins on time. They are not transferred on frequent basis as they
have to remember the addresses of their customers. They follow certain
rules while doing trade—no alcohol during working hours; no leaves without
permission; wearing white caps and carrying ID cards during business hours.
Recently, on the suggestion of a few self-motivated fellow men, the
dabbawalas thought out and executed a plan of providing food left in tiffins
by customers to slum children. They have instructed their customers to place
red sticker if food is left in the tiffin, to be fed to poor children later.
Required:
1. State any one principle of management given by Fayol and one
characteristic of management mentioned in the above case.
2. Give any two values which the Dabbawalas want to communicate to the
society.
2.4 Bureaucratic Management:
Theorist: Max Weber (1864-1920)
The theory focuses on rules and procedures, hierarchy and clear division of
labor.
Max Weber is known as the father of Modern Sociology. He was a German
scientist and the first person to use the term ‘bureaucracy’ to describe a
particular, and in his view superior, “organizational form”.
In other words, he defined bureaucracy as a highly structured, formalized,
and also an impersonal organization.
He furthermore instituted the belief that an organization must have a
defined hierarchical structure and clear rules, regulations, and lines of
authority which govern it.
Weber defined the key elements of a bureaucracy as follows:
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1. A well-defined hierarchy with a clear chain of command where
higher positions have the authority to control the lower positions.
2. Division of labor and specialization of skills, where each employee
will have the necessary expertise and authority to complete a
particular task.
3. Complete and accurate rules and regulations, in writing, to govern
all activities, decisions and situations.
4. Impersonal relationships between managers and employees, with
clear statements of the rights and duties of personnel.
5. Technical competence is the basis for all decisions regarding
recruitment, selection and promotion.
Weaknesses of the Bureaucratic Management Theory
The overwhelming concentration on authority discourages innovation
and creativity.
The rigid rules and procedures makes the organisation inflexible and
unresponsive to change.
The emphasis on impersonality and division of labor leads to boredom,
dissatisfaction and discontent within the workforce.
The rules and procedures may become so important in their own right
that there is a tendency to forget the underlying processes that they
are meant to make more efficient.
Exercise 5
Discuss the practical application of Max Weber’s management theory in
Today’s business organisation?
2.5 Human Relations Theory / Behaviorist School
-The theory dealt with the human aspects of organisations
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-According to the Theory a co-operative work environment and the needs
and values of the workers are paramount, which should be encouraged by
democratic consultation by those who manage.
The Hawthorne Experiments
Theorist: Elton Mayo (1880 – 1949)
Mayo is the most famous advocate of the Human Relations theory, among
other advocates like Abraham Maslow (1908-1970) and Douglas
MacGregor (1906- 1964)
Mayo did the Hawthorne Experiments which consisted of two studies that
focused on the effects of certain variables on worker productivity, and
attempted to use many of the principles of scientific management.
The studies revealed that the most important factor influencing
productivity was the workers and their social relations at work, and not
the work itself.
The results of both experiments showed that productivity increased
significantly, regardless of what variable was changed.
However: It was thus concluded that the primary reason for the increase
in productivity was the intense attention that the researchers paid to the
workers during the course of the study, which increased their motivation.
Moreover, it was later discovered that workers in a group would develop
a norm for output, determined by the group itself, irrespective of
individual output or management standards.
2.6 Systems and Contingency Management
These are the two schools of thoughts that competed with and
complemented the scientific management and human relations
approaches. The first school of thought was the systems school, and the
Contingency theory is an extension of the systems approach .
2.6.1 The Systems Theory
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The theory provides a tool for managers to analyze the dynamics of
their organisation, without prescribing set ways in which the
organisation should be managed
Advocates of the systems approach view the organisation as a dynamic
entity made up of many smaller sub-systems which interact with each
other, each depending on certain inputs and providing certain outputs.
For example, a shop is a system that sells goods; within the shop there
will be interrelated systems that control stock, orders, purchasing and
selling.
Survival of the organisation will depend upon the continual adaptation
of interactions between systems to meet the dynamically changing
internal and external environmental processes.
Pressure from political, social, environmental, economic and
technological factors will influence the objectives of an organisation.
Key Concepts in Systems Theory
1. Feedback is essential between systems for organizational growth and
for homeostasis (a state of relative constancy despite varying external
conditions) within the organisation
2. An organisation must be considered as an open system, with
boundaries based on social relationships, if an organisation acts as a
closed system and ignores environmental influences, it will become
self-satisfying and inward-looking
3. If inputs into a system diminish, then the system will eventually run
down (entropy)
4. The whole of a system is greater than the sum of its parts (synergy)
Therefore, Management is the process of maintaining effective
relationships between the sub-systems of the organisation.
2.6.2 Contingency Theory
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The theory provides a framework for managers to develop the most
appropriate organizational design and management style for a given
situation, where design and style depend upon a combination of
variables such as the external environment, technological factors,
human skills and motivation
The Contingency theory recognizes that there can be no fixed
management methodology because all of these variables can change.
It is emphasized that managers must be flexible and be able to adapt
to new situations.
The theory also recognizes the importance of the performance of
individual managers in any situation. It considers factors such as the
extent of manager power and control, and the degree of uncertainty in
the situation.
The contingency approach is therefore highly dependent on the
experience and judgement of the individual manager in the specific
organizational environment in which they work.
Exercise 6
Describe the interrelationship between the Systems approach and the
Contemporary approach to management.
2.7 Peter Drucker: Management By Objectives (MBO)
Theorist: Peter Drucker (1909 - 2005)
Drucker attached great importance to objective setting, where he specified
that objectives should be set for all the key result areas of business. To make
these objectives and their achievements more meaningful, he introduced
Management by Objectives (MBO) as a weapon for that purpose.
MBO is a strategic approach that can be used to enhance the
performance of an organization
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It’s defined as a systematic and organized approach that allows the
management to focus on achievable goals and to attain the best possible
results from available resources.
It aims at increasing organizational performance by aligning goals and
subordinate objectives throughout the organisation.
Peter Drucker has set two basic principles of this method:
1. The continuity between the superiors and their subordinates.
2. The constant feedback of the system and the communication between
superiors and subordinates.
MBO includes ongoing tracking and feedback in the process to reach
organizational set objectives.
It helps organization members to see their accomplishments as they
achieve each objective, which reinforces a positive work environment and
a sense of achievement.
The following Steps are involved in the MBO Process
(i) Define or Review organizational goals
(ii) Set the worker / employee objectives:
(iii) Monitor progress and performance continuously
(iv) Performance Evaluation
(v) Feedback Provision
(vi) Performance Appraisal
Review Questions
1: Describe what the following individuals contributed to the development of
modern theories of management?
a) Peter Drucker
b) Frederick Taylor
c) Max Weber
d) Henri Fayol
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2: Evaluate the relevance of (MBO) as a method used by the top
management in measuring the effectiveness of teams and (or) groups within
an organisation?
3: Discuss any six benefits and six limitations of the Management by
Objectives as a management approach to enhance organizational
performance?
4: Evaluate the relevance of Taylor’s theory to the management of
companies in Zimbabwe’s industry and commerce in the present day.
Reading List
Drucker, P., The Practice of Management, Harper, New York, 1954;
Heinemann, London, 1955; revised edn, Butterworth-Heinemann, 2007.
Hussain, Nadeem & Haque, Adnan & Baloch, Akhtar. (2019). Management
Theories: The Contribution of Contemporary Management
Theorists in Tackling Contemporary Management Challenges.
Journal of Yaşar University. 14. 156-169. 10.19168/jyasar.635061.
Bartol, K.M., & Martin, D.C. (1998). Management, USA, NY: McGraw Hill.
Brown, C. (2014). How Relevant are Fayol’s principles of
Management Today? Liquid Training.
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