Evaluation of

Management Thoughts
Management Principles And Practices
MGT 1401
Learning Outcomes

 To identify the benefit of analyzing management history

 Identify the 2 significant past events of management
 To describe the major classification of Management
Approaches
 Explain Fayol’s 14 Principles of Management
Two significant past management
incidents
 1776 Adam Smith published the Wealth of Nation
division of labor/job specialization
(breakdown of jobs into narrow & repetitive tasks.
 Industrial Revolution
late 18th century
machine power was substituted for human power.It
became more economical to produce goods at factory than
at home.These factories needed someone to forecast
demand,direct daily activities atc.(managers)
Evolution of Management Theory

 Classical Approach
 Behavioral Approach
 Management Science Approach
 System Approach
 Contingency Approach
 Japanese Approach
 Excellent Approach
The Classical Perspective
This is the oldest approach of management. Its roots pre-
date the 20th century.
Making organization & workers as efficient as possible.
The classical perspective generally concerns ways to work an
organization

subfields

Scientific Bureaucratic Administrative

management management principle
The scientific management theory

 Developed by Fredrick Winslow Taylor(1856-1915)

 Make organization more efficient by making individuals efficient
 Focused on productivity of individual worker.
 Can be done through a scientific analysis
 Management is considered as a science of working towards higher
productivity through higher work efficiency.
 It believed that there is always a best standardized method of work
for which the workers can be trained scientifically.
Scientific management is based on the
following;

 Developing a standard methods for performing each job

 Selecting workers with appropriate abilities
 Training workers in a standard method
 supporting workers by planning their work and eliminated
interruptions
Some Criticisms

 Did not appreciate the social context of work and higher

needs of workers
 Did not acknowledge variance among workers
 Tended to regard workers as uniformed and ignored their
ideas and suggestions
Administrative Theory

Henry Fayol – Father of Management

Fayol’s three aspects of management

The activities of an organization
The functions of management
The principles of management
The activities of an organization

 Technical activities ( production, manufacturing)

 Commercial activities ( buying and selling)
 Financial activities ( search for and best use of capital)
 Security activities ( safeguarding property and people)
 Accounting activities ( recording financial information)
 Managerial activities ( planning organizing directing
controlling)
The Functions of Management

 planning
 organizing
 directing
 controlling
14 Principles of Management

1. Division of labour
2. Discipline
3. Unity of direction
4. Remuneration
5. The Hierarchy
6. Equity
7. Initiative
8. Authority
 Unity of command
 Subordination of individual interest to the common goal
 Centralization
 Order
 Stability of staff
 Esprit de corps
Bureaucratic Organizations

Max Weber, a German theorist, introduced most of the

concepts.

Traditional organizations were more focused on individuals

and wasn’t assigning responsibility and authority to
positions.

Hence, high labour turnover

 Main idea

For organizations to survive responsibility and authority to

be assigned to a position rather than to an individual

- systematic approach
- equal treatment
- everyone knows the rules
Bureaucratic principles

Written Hierarchy of
rules authority

Fair System of
evaluation task
and reward relationships
Comparison of Theories in classical
approach
Taylor Fayol Weber
focus Individual work Organizational Bureaucratic
efficiency(micro) efficiency(macro) rationality(macro)
orientation Industrial managerial sociological
engineering
Methodology Scientific methods Administrative Bureaucratic
purposes principles
General criticisms on classical approach

 Too much emphasis on principles, structures and methods

to improve productivity.
 Social and psychological needs of the workers were not
recognized
 Worker is considered as a slave or machine
 Too much emphasis on capital as the main input factor
 Not recognized the formal and informal behavior of
humans
Behavioral Approach

 Emerged around understanding human behavior, needs

and attitudes in workplace.
 Emphasized the importance of understanding human
behavior, needs and attitudes in the workplace as well as
social interactions and group processes.
 Three sub fields of behavioral approach
Human relations movement
Human recourses perspective
Behavioural sciences approach
Human relations movement – Elton Mayo

 This school of thought was based on the idea that

truly effective control comes from within the
individual worker rather than from strict,
authoritarian control.
 Mary Parker Follett: an influential leader in early
managerial theory.

- Suggested workers help in analyzing their jobs for

improvements.
- The worker knows the best way to improve the job.
- If workers have the knowledge of the task, then they
should control the task.
Theory X and Y

 Duoglas McGregor proposed the 2 different sets of worker

assumptions.
Theory X- Assumes the average worker is lazy, dislikes
work and will do as little as possible. Managers must closely
supervise and control through reward and punishment.
Theory Y- Assumes workers are not lazy, want to do a good
job and the job itself will determine if the worker likes the
worker. Managers should allow the worker great latitude,
and create an organization to stimulate the worker.
Theory X vs Theory Y
Theory X
Employee is lazy
Managers must closely supervise
Create strict rules & defined rewards
Theory Y
Employee is not lazy
Must create work setting to build
initiative
Provide authority to workers
Hawthorne Effect

 worker productivity was measured at various levels of light

illumination.
 Researchers found that regardless of whether the light levels were
raised or lowered, productivity rose.
 Actually it appears that the workers enjoyed the attention they
received as part of the study and were more productive.
 Paying special attention to employees motivates them to put greater
effort into their jobs.
 If special attention is paid to social factors at work and behavior of
employees within an organization, there will be a motivation to work
and productivity will improve.
Criticisms of behavioral approach

 Too much emphasis on the human factor and their

behavior
 Less emphasis on technology, systems and environment
 Too complex to analyze and understand the human
behavior
 Dominance of labour factor has created many labour
problems.
 Difficult to predict and control the human behavior
Management science approach

 This view distinguished for its application of mathematics, statistics

and other quantitative techniques to management decision making
and problem solving.
 Uses rigorous quantitative techniques to maximize resources.
 Quantitative management- utilizes linear programming, modelling,
simulation systems.
 Operations management- techniques to analyze all aspects of the
production system.
 Total quality management(TQM) – focuses on improved quality.
 Management information systems(MIS) – Provide information about
the organization
Systems Approach

 Systems approach to management views the organization

as a unified, purposeful system composed of interrelated
parts.
 This approach gives managers a way of looking at the
organization as a whole as a part of the larger
environment.
 An open system interacts with the environment.A closed
system is self-contained. Closed systems often undergo
entropy and lose the ability to control itself and fails.
Contingency Approach

 This approach suggests that there is no “one best way” of

managing all situations.
 The view that the management technique that best
contributes to the attainment of organizational goals
might vary in different types of situations or
circumstances.
 The universal applicability of management becomes
invalid within this approach.
 Assumes there is no one best way to manage.
- The environment impacts the organization and
managers must be flexible to react to environmental
changes.
- The way the organization is designed, control
systems selected, depend on the environment.
 Technological environments change rapidly, so
must managers.
Japanese Management

The main characteristics of Japanese Management

 Participative decision making
 Bottom up management
 Lifetime employment
 High level of teamwork
 An atmosphere of innovative ideas
 Willingness to achieve high level of quality
 Constant improvement in organizational process
Characteristic American Japanese

control Very explicit; people Very implicit and

know exactly what to informal; people rely
control and how to do heavily on trust and
it. goodwill.
Concern for the Organization is Organization is
personnel concerned primarily concerned with the
with the workers whole life of the
work life only. worker, business and
social.
Characteristic American Japanese

Employment with a Usually short-term; Especially in some

firm Layoffs are quite of the large firms,
common it is for life.
Layoffs are rare.

Evaluation and Very fast; Very slow; big

promotion of the individuals who are promotions are
personnel not promoted generally given out
rapidly often seek for years.
employment
somewhere.
Characteristic American Japanese

Career paths Very specialized; Very general;

people tend to personnel are
stay in one area rotated from one
(accounting, area to another
finance, sales and become
etc.)for their familiar with all
entire career. areas of
operations.
Decision making Carried out by the Carried out via
individual group decision
manager. making.
Responsibility Assigned on an Shared collectively
individual basis. by the group.
Excellence Approach

 Getting things done on time

 Staying close to customers
 Promoting autonomy and entrepreneurship
 Maximizing productivity through people
 Using hands on approach on managing
 Doing what the company knows best
 Maintaining a simple, lean organizational structure
 Promoting both centralization and decentralization
simultaneously