Management Theory

 Index

 Introduction Definition of Management

What is Management?
Nature of Management

 Purpose of Management

 History of Management Industrial Revolution

 Schools of Thought & Types of Management

 Evolution and Pioneers of Management

 Today’s Managers

 Bibliography

 Slides for Presentation

Introduction
 Management Theory
Introduction:
Management Definitions.

Oxford dictionary defined Management as the “Administration of Business Concerns”

Henri Fayol defined management as the “Managing, Forecasting, Planning and the Controlling of
your business.

Mary Follett defined Management as the “Ability of getting work done through people”

What is Management

Theoretically Management is the development of the theories of management, using approaches

based on political, economic, sociological, psychological, anthropological theories and philosophy.

Management from a descriptive view is described as “the job that managers do” and in popular
speech “the Management” is used as an indication of status, those with the key to the executive
washroom.

Social forces are the norms and values that characterize a culture. Early social forces allowed
workers to be treated poorly; however, more recent social forces have provided for more acceptable
working conditions for workers. Social forces have influenced management theory in areas such as
motivation and leadership.

Economic forces are the ideas behind the concept of a market economy such as private ownership of
property, economic freedom, competitive markets, and a limited role for government.

Political forces such as governmental regulations play a significant role in how organizations
choose to manage themselves. Political forces have influenced management theory in the areas of
environmental analysis, planning, control, organization design, and employee rights.

Nature of Management:

Managers us information in their day to day work

Managing is not an exact science Judgements are required

Management can be a complex form of art – some good and some bad
Purpose of Management Theory
 Management Theory
Purpose of Management Theory

Theory provides a simple conceptual framework for organizing knowledge and for providing a
blueprint for action to help guide organizations toward their goals

 Allows us to understand what is happening in an organisational setting

 Allows us to predict likely outcome of particular actions

 Allows us to Take effective action

 Gives the ability to Plan, Organise, Direct and Control our business concerns
History of Management
 Management Theory
History of Management
While the practice of management can be traced back to 3000 B.C., it was not given serious
attention until the 1 800s when large organizations emerged.

Management Theory recognised during the Industrial Revolution

With the advent of the technology of mass production - most particular, the development of steam
powered machinery - control of the work process shifted from owners and craftsmen into the hands
of managers. Increasingly, as factories became larger and more complex, owners handed over
control to a new group of employees - the managers - whose role was, in effect, to direct the
activities of other groups of employees.

Industrial Revolution replaced Agriculture & Manual Labour with Ecomony based on
Manufacturing and Commodities.

Automation replaced manual labour

Greater production rates gave rise to organisation and management complexities

Greater production rates led to very large companies

Larger companies could afford to have specialists in Human resources and Management

Pioneers developed Management as a specialist area/subject for study

Management had become well established as a subject by the early 20th Century

Management today is based upon the early pioneers works and has developed into a very complex
area from a practical viewpoint.

Some of the early pioneers include:

 Robert Owen was one of the first managers to show respect and dignity to workers in his
factory. He implemented better working conditions, raised the minimum age for child labor,
reduced hours, and supplied meals.

 Charles Babbage applied mathematic principles to find ways to make the most efficient use of
facilities and materials. He also advocated profit-sharing plans.

 Andrew Ure was one of the world's first professors to teach management principles at
Anderson's College in Glasgow

 Henri Fayol

 Frederick Taylor

 Elton Mayo
Schools of Thought & Types of Management
 Management Theory

Schools of Thought & Types of Management

When enough people believe and expand a particular subject or set of ideas or theories they form a
school of thought

The following are schools of thought which have been developed over the years

Classical - Scientific and Administrative

Scientific:- Scientific management focuses on ways to improve the

performance of individual workers

Henry Gantt introduced the Gantt chart, which is a way to schedule work. This type of chart is still
used today.

Frederick W. Taylor saw workers soldiering or deliberately working beneath their potential and
designed a 4-step method to overcome this problem

Administrative:- Administrative management focuses on managing the total

organization.

Henri Fayol was the first to identify the four management functions

Max Weber outlined the concept of bureaucracy based on a rational set of guidelines for structuring
organizations in the most efficient manner. His work is the foundation of contemporary
organization theory.

Human Relations Elton Mayo and Mary Parker Follett

The human relations movement, which stemmed from the Hawthome studies, is based on the idea
that a manager's concern for workers will lead to their increased satisfaction and improved
performance.

The movement includes the need theories of motivation, such as Maslow's hierarchy of needs, and
McGregor's Theory X and Theory Y.

Systems
This viewpoint uses systems concepts and quantitative approaches from mathematics, statistics,
engineering, and other related fields to solve problems. Managers find optimal solutions to
management problems by using scientific analysis which is closely associated with the systems
approach to management.
Schools of Thought & Types of Management
 Management Theory

Schools of Thought & Types of Management

Contingency

This view emphasizes the fit between organization processes and the characteristics of the situation.
It calls for fitting the structure of the organization to various possible or chance events. It questions
the use of universal management practices and advocates using traditional, behavioural, and
systems viewpoints independently or in combination to deal with various circumstances. The
contingency approach assumes that managerial behaviour is dependent on a wide variety of
elements. Thus, it provides a framework for integrating the knowledge of management thought.
Evolution and Pioneers of Management
 Management Theory

Evolution and Pioneers of Management

Frederick Taylor (1856-1915)

Known as the “Father of Scientific Managemen”t, he started as a

chargehand in the Bethlehem Steelworks in Philadelphia. He later
became the companies chief engineer

He proposed work methods designed to increase worker productivity by Work and Motions studies.

Taylor saw workers soldiering or deliberately working beneath their potential and designed a 4-step
method to overcome this problem

1. Breaking the job into its smallest pieces.

2. Select the most qualified employees to perform the job and train them to do it with the proper
tools.
3. Supervisors are used to monitor the employees to be sure they are following the methods
prescribed.
4. Continue in this fashion, but only use employees who are getting the work done and reward
them with a bonus if the target was exceeded.

Taylor believed in the rational economic concept of man

 Management Theory

Evolution and Pioneers of Management

Henri Fayol (1841--1925),

Known as the “Father of Modern Management”, was a French industrialist who developed a
framework for studying management

He belongs to the Classical School of management theory and was writing and exploring
administration and work about same time as F W Taylor in USA. While both have a task focus,
their approaches are quite different. Fayol was particularly interested in authority and its
implementation while Taylor concentrated on work organisation (e.g. efficiency).

Fayol was the first to identify the five management functions :-

1. plan (and look ahead),

2. organise,

3. command,

4. co-ordinate,

5. control (feedback and inspect)

He also identified 14 principles that he saw as common to all organisations.

1. Specialisation/ division of labour. Fewer tasks leads to greater efficiency

2. Authority with responsibility Compel people to do what you want them to do
3. Discipline Obedience, Application, Energy and behaviour
4. Unity of command Each subordinate has only one “Boss”
5. Unity of direction. One Head, One Plan and one set of Objectives
6. Subordination of Individual Interests Interest of company before individuals
7. Remuneration Pay should be Fair
8. Centralisation One Central Control Point with company
9. Chain / line of authority Unity of Command
10. Order A place for everyone & everyone in their place
11. Equity Kind & Just managers leads to devoted loyal workers
12. Stability (for good workers) Efficiency promoted by a stable workforce
13. Initiative A wonderful experience in working out a successful
plan of action
14. Esprit de corps “divide and Rule” theory is definitely not to be followed
 Management Theory

Evolution and Pioneers of Management

Elton Mayo (1860 – 1949)

Known as the Father of the Hawthorne Studies, identified the Hawthorne Effect or the bias that
occurs when people know that they are being studied. The Hawthorne Studies are significant
because they demonstrated the important influence of human factors on worker productivity.

He highlighted the importance of communication between management and the workers and
identified the now accepted notion, that work satisfaction lay in recognition, security, and sense of
belonging, rather than monetary rewards

Communication between managers and workers was the key - because of the problems caused when
they didn't communicate well - they were on different tracks - workers 'logic of sentiment',
managers motivated by 'logic of cost and efficiency'

He raised the awareness of individual's reactions and need for managers to show respect towards
their staff and workers.

Mayo’s investigations and idea’s are known as the “Human Relations School” and he basis for his
conclusions from the “Hawthorne Experiments” are:

 Work is a group activity

 Workers do not act or react as individuals but as members of a group
 The need for security and belonging is more important than the work environment
 Management Theory

Evolution and Pioneers of Management

There were four major phases to the Hawthorne Studies:

 The illumination experiments,

 The relay assembly group experiments,
 The interviewing program,
 The bank wiring group studies.

The intent of these studies was to determine the effect of working conditions on productivity.

The illumination experiments tried to determine whether better lighting would lead to increased
productivity. Both the control group and the experimental group of female employees produced
more whether the lights were turned up or down. It was discovered that this increased productivity
was a result of the attention received by the group.

In the relay assembly group experiments, six female employees worked in a special, separate area,
were given breaks and had the freedom to talk, and were continuously observed by a researcher
who served as the supervisor.  The supervisor consulted the employees prior to any change.

The bank wiring groups involved fourteen male employees and were similar to the relay assembly
group experiments, except that there was no change of supervision. Again, in the relay and bank
wiring phases, productivity increased and was attributed to group dynamics.

The conclusion was that there was no cause-and-effect relationship between working conditions and
productivity. Worker attitude was found to be important.

An extensive employee interviewing program of 21,000 interviews was conducted to determine

employee attitudes toward the company and their jobs. As a major outcome of these interviews,
supervisors learned that an employee's complaint frequently is a symptom of some underlying
problem on the job, at home, or in the person's past
Today’s Managers
 Management Theory
Todays Managers

Today business and management continue to be transformed by high technology. In order to keep
pace with the increased speed and complexity of business, new means of calculating, sorting and
processing information were invented. An interesting description of the modern era is the
Information Age” that describes the general use of technology to transmit information.

The Telegraph, The Telephone, The Radio, The Television, The Computer and Finally the Internet
or The “World Wide Web”

Managers can access, store and move digital information (voice, sound, text and numbers)

Private corporate “Intranets” provide a universal interface for sharing company-wide information
and work group level information. Employees can access information, collaborate, and distribute
results anywhere, anytime

the Information Age implies a time for a revolution in the information environment for business and
management

The changes that are taking place may be more significant to management than the Industrial
Revolution
 Bibliography
Mr Jim Howleys notes

Calvert

Notes from Brunel University

Dr Patrick Boylan City University London

Various Internet Sites on Management

Slides for Presentation