OLC EUROPE

HND IN BUSINESS

UNIT 3: ORGANISATIONS AND BEHAVIOUR

APPROACHES TO MANAGEMENT THEORY

Aims and objectives

Aim

To examine different approaches to management and theories of

organisations

Objectives

When you have completed this lesson you should be able

to:

I. explore the various definitions of management.

II. describe the development of management theories

III. examine the functions of management,

Introduction

Organisations face a dilemma in the course of producing the goods and

services that individuals and society either need or want.

The dilemma is – how do they reconcile the potential inconsistency

between the needs and aspirations of individuals within an organisation

on the one hand, and the collective purpose of the organisation on the

other?

To reconcile these apparent differences requires ‘management’, the

managing of resources in an organisation to ensure the achievement of

the goals that the organisation has set itself.

CLASS ACTIVITY 1

What do you understand by the term management?

Write your own definition of what management means to you.

Defining Management

There are numerous definitions of management,

Consider the definitions given here:

‘To manage is to forecast and

plan, to organise, to command,

to co-ordinate

and to control.’ Henri Fayol

(1916)

to forecast and plan – examine the future and draw up plans of action

to organise -build up the structure, material and human of the undertaking

to command- maintain activity among the personnel

to co-ordinate- bind together, unify and harmonise activity and effort

to control -see that everything occurs in conformity with policy and

practise

(BORN 1841 IN ISTANBUL; DIED 1925 IN PARIS) WAS A FRENCH MANAGEMENT

THEORIST

HENRI FAYOL

Social Process

Management is a social process…the process consists of…planning, control, co-ordination and motivation.’ E.F.L. Brech (1957).

MAGANEMENT

Planning

Controlling

Co-ordinating

Motivation

MANAGEMENT MODEL

Operational Process‘Managing is an operational

process initially best dissected by analysing the managerial functions.’

‘The five essential managerial functions (are): planning,organising, directing and leading, and controlling.’ Koontz and O’Donnell (1976).

Scope of Management Functions

CLASS ACTIVITY 2

i. In activity 1 you were asked to offer your own definition of

management. Compare your definition to those given above.

ii. Make notes to highlight the differences and the similarities

between your definition and those of the early management

‘thinkers’.

CLASS ACTIVITY 3

I. Looking at the definitions above, are there any elements of

management that you feel are missing? You may well have already

highlighted this in your comparison made between your definition

and the others anyway.

II. To help your thought processes, consider whether these early

management theorists were more focused on achieving the tasks of

the organisation, or more focused on the needs of people in the

organisation?

Debate this with others in your group.

We will return to this theme later, so use the space to record

any notes.

ACTIVITY FEEDBACK

Earlier definitions of management concentrated on the achievement of

the tasks of the organisation.

As you will see from Brech’s definition above, management thinking

did start to consider the ‘human’ element of organisations from the

second half of the twentieth century.

In bringing in the motivation element, Brech – with others – began the

management movement that started to include a focus on the

significance of individual people within organisations.

The Development of Management Thought

Different approaches to management or management theories have

evolved over time. The management theories examined in this section

are:

1) Scientific management

2) The classical approach

3) Bureaucracy

4) The human relations approach

5) The systems approach

6) The contingency approach

Scientific Management

The development of management as a science is generally

attributable to one particular nineteenth century man- F. W.

Taylor .

Frederick Winslow Taylor (1856 -1917)An American Inventor and Engineer

Scientific Management – ‘is a systematic method of determining the best way to do a

job and specifying the skills needed to perform it’.

This ‘father’ of Scientific

Management developed much of the

science of management, which is

still prevalent in some aspects of

management thinking today

Taylor’s science was built around minute observation of the best way

that a task could be undertaken and completed.

Once the best way had been established, Taylor believed that workers

could then be made to follow this best way in a completely prescribed

manner.

‘Taylorism was based on the notion that there was a single ‘best way’ to fulfil a

particular job; and that then it was a matter of matching people to the task and

supervising, rewarding and punishing them according to their performance.

The job of management was to plan and control the work.’ Crainer (1996)

In effect, Taylor was seeking to dehumanise work, and in doing so he paved the way for the emergence of mass production techniques of work.

Such approaches became synonymous with companies like Ford and General Motors after Taylor’s death.

ACTIVITY 4

i. What do you think of the Taylor rule that there was ‘one right way’?

ii. identify six reasons why this principle wouldn’t be satisfactory in the

business world today.

iii. identify six advantages of the ‘one right way’ principle.

ACTIVITY FEEDBACK

As you complete the remainder of this module keep in mind

this ‘one right way’ principle.

Return to this activity frequently and add to both of they lists

you have made.

You will find – as the module progresses – that there are

arguments both for and against this Taylor principle

Taylor’s five principles of Scientific Management (Taylor 1913)

1. A clear division of tasks and responsibilities between management and

workers.

2. Use of scientific methods to determine the best way of doing a job.

3. Scientific selection of the person to do the newly designed job.

4. The training of the selected worker to perform the job in the way

specified.

5. Enthusiastic co-operation of the workers to ensure that the work was

performed in accordance with scientific management principles and this

was secured by the use of economic incentives.

Later writers in the development of the ‘Taylorism’ scientific management

Lillian and Frank Gilbreth-

refined and developed the techniques for measuring work to a higher level of

precision.

Introduced a comprehensive system of noting actions

Henry Gantt-

he humanised the methodology in order to make it more acceptable

proposal for fair dealings with workers.

modified the piece rate system of payment with a day rate plus

performance bonus system.

developed the Gantt chart – a visual display to show the sequencing of

activities over time.

Henry Ford- applied the scientific management theory in his business

Classical Administration method ofManagement

It concerns how to structure an organisation

The proponents are practising managers.

This movement sought to create a management structure that most efficiently achieves management goals.

The theory is called classical, said Baker (1972) because it attempted to offer simple principles that claimed a general application

Henri Fayol is the leading contributor to this classical management school of thought

Henri Fayol (1841 – 1925) the Frenchman Henri Fayol was a leading

exponent of the scientific management movement.

Henri Fayol’s 14 Principles of Management

1. Division of work

2. Authority and responsibility

3. Discipline –

4. Unity of command

5. Unity of direction

6. Subordination of individual interest to general interest –

7. Remuneration of personnel

8. Centralisation

9. Line of authority –.

10. Order

11. Equity –

12. Stability of tenure of personnel

13. Initiative

14. Esprit de corps –

Although developed some eighty years ago, Fayol’s list of managerial

activities remains broadly intact in today’s businesses.

Only minor modifications have been used to those management

elements that he identified earlier in the twentieth century

ACTIVITY

Discuss with a colleague and compare and contrast the

approaches to scientific management as advocated by Taylor

and by Fayol.

In what ways do their thoughts mirror each other?

In what ways do their thoughts actually conflict?

Bureaucracy

Bureaucracy is a form of organisational design and hence management

method that stresses the definition of roles and the relationships between

one another.

this method of organisation and management has largely dominated

modern organisations,

Bureaucracy literally means ‘rule by office or by officials’.

Max Weber is considered to be the main exponent of the concept, from the

studies he carried out into power and authority in organisations.

KEY POINT

Power – the ability to get things done at work by threats or

through force.

Authority – managing to get things done because others

saw one’s orders as just or legitimate

Weber’s ‘ideal Type’ bureaucracy

The bureaucratic form of organisation has the following characteristics:

1. Job specialisation.

2. Authority hierarchy.

3. Formal rules and regulations.

4. Impersonality.

5. Formal selection.

6. Career orientation

The Human Relations Approach

this school of thought paid attention to the social factors at work and

to the motivation and behaviour of workers.

The human relations approach also focuses on the social relations in

the organisation.

Elton Mayo Hawthorne Studies

human behaviour emphasises

human relations approach

Professor Elton Mayo- Harvard university

Conclusions of Hawthorne Studies

The conclusions that can be drawn from the Hawthorne Studies and from

other similar experiments that were carried out at this time are many:

i. The importance of developing human potential is a fundamental part of

work in organisations

ii. Individuals need to be given the opportunity to influence their work

environment

iii. Individuals need to be provided with interest and challenges in their

work

iv. Each individual has unique and complex needs

The Systems Approach

This approach encourages managers to view the organisation both as a

whole, and also as part of the larger business environment.

The systems approach looks beyond the organisation just as a closed

internally focused system.

The organisation interacts with other systems in the environment and this

will affect the way that it works, and in turn, performs.

For example, a business interacts with its customers, suppliers, national

and local governments, and pressure groups. In turn the organisation is

affected by social, economic, political and other changes.

The systems Approach

To function effectively, the organisation must always take account of the

environment in which they are operating and change continuously to

match up to this environment.

This influence of the environment was first recognised by the systems

theorists.

Below highlights how organisations – based on the systems approach –

are made up of many inputs, processes and outputs

Inputs process Output

The Contingency Approach

It can be argued that Fayol and Taylor treated organisations as if they

were devoid of people.

The human relations school of thinking moved the emphasis to that of

people in the organisation.

The systems approach looked at the way in which the organisation

‘system’ transforms inputs into outputs within the business environment

being faced.

The Contingency Approach

The contingency theorists based their views on studies of a number of

organisations to show that structures and methods of operating should

depend on the circumstances and situation in which the organisation

is operating.

They propsosed the best- fit -approach

The best-fit approach, shown below matches the three elements of a

business together and suggests that concentration or emphasis for each

of the elements will be determined by the existing conditions faced by the

organisation

Task

People Environment

The Functions of Management

Management can be further defined as ‘the facility for getting things

done through people who are working in co-operation with each other.’

The role of management – it can be argued – is to give a lead and to

provide direction and purpose