SESSION 4: THEORIES OF MANAGEMENT

Learning objectives;
By the end of the session, learners should be able to:
1. Analyze the attributes of an effective manager
2. Describe the major theories of management
3. Make a comparison of the theories and their contributions to management.
ATTRIBUTES OF AN EFFECTIVE MANAGER
1. Knowledge and skills of management, and have to keep on learning new skills to
compete effectively.
2. Hands on experience in management and in the area of specialization
3. Smartness, so that he/she is respected by superiors, peers, juniors and trusted by
customers and the members of public.
4. Impartial: fair to everyone regardless of any other factors such as tribal, friendship,
culture etc
5. Flexible and accommodative and also firm in decision making.
6. Honest so that he/she is trustworthy to employees and all stakeholders.
7. Forward looking, ability to plan ahead and set goals that is achievable within a
specified time.
8. Tactful and has the ability to balance between work and relationships and therefore
create a harmonious working environment.
9. Social, able to interact with staff, know them well and appraise them democratically.
10. Friendly to employees, customers and members of public.
MANAGERIAL ROLES
Interpersonal roles: role model, leader and liaisons

Informational roles: monitor, disseminate, spokesperson

Decision roles: entrepreneur, conflict resolution, resource allocator, negotiator

management as a profession

McFarland has written the following characteristics of a profession:

• The existence of an organized and systematic body of knowledge.

• Formalized methods of acquiring knowledge and skills.
• Existence of an apex body with professionalization as its goal.
• Existence of an ethical code to regulate the behaviour of the members of the profession.
• Charging of fees based on service and a concern for social responsibility.
From the above description of a profession, we can deduce that:

• Management has no universally accepted norms of behaviour

• There is no uniform code of conduct that governs the behaviour of managers.

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 • The Apex bodies in various countries provides only guidelines and do not have any
controlling power over the members.
• Managers differ widely in terms of their concern for ethics and values of the society in
which they function.
• Entry to management positions is not restricted to individuals with a special degree.
Modern businesses however require qualified managers due to:

• Ever increasing competition from the domestic as well as the international markets.
• Rapid technological changes affecting all businesses and life in general.
• The rapid obsolescence of technology.
• Expansion in the size of organizations and markets.
• Frequent changes in the socio-cultural and political factors influencing the business.
Professionalization of management in Kenya

The awareness about contributions of professional managers has been increasing. An increase
in institutions that offer MBA and related diploma courses has been on going in the country.
The factors that have been responsible for the growing demand for professional managers are;

• Liberalization policies by the government

• Increased competition in all firms
• Private enterprises have realized the need for professional managers.
• Public sector demand for efficiency and performance contracting that requires
professional management.
The most valued traits in managers

Among the chief skills companies seek in top managers are:

• Ability to motivate and engage others

• The ability to communicate
• Work experience in other countries
• High energy levels to meet the demands of global travel and a 24/7 world.

THEORIES OF MANAGEMENT
A theory is a systematic grouping of independent concepts and principles that contains a
framework of significant areas of knowledge. In management it provides a means of
clarifying significant and important management knowledge.

Theories and history of management are important to managers for the following reasons:

1. History assists managers in understanding the current developments and avoids

mistakes of the past.
2. Theories help managers organize information in order to approach problems in
systematic way.
The management school of thought refers to theories of ideas that were developed in a
historical sequence by the early management writers. The systematic development of

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management thinking dates from the 19th century with the emergence of large industrial
organizations and problems associated with their structure and management.

The three historical management view points

Classical view Behavioral view Quantitative view

Emphasis on ways to Emphasis on importance of Applies quantitative

manage work more understanding human techniques to management
efficiently behaviour and motivating and
encouraging employees
toward achievement

Scientific management Early Behaviorists Management science

Emphasized scientific Hugo Munsterberg Focuses on using

study of work methods to mathematics to aid in
improve productivity of Mary Parker problem solving and
individual workers Elton Mayo decision making

Fredrick Taylor

Frank and Lillian Gilbreth

Administrative Human relations movement Operations management

management
Proposed better human Focuses on managing the
Concerned with managing relations could increase production and delivery o f
the total organization worker productivity an organization’s products
or services more efficiently
Henri Fayol Abraham Maslow

Max Weber Douglas McGregor

Behavioral science approach

Relies on scientific research

for developing theory to
provide practical management
tools.

The Scientific theory of management

1. The scientific theory: the primary concern of scientific management was to increase
productivity through greater efficiency in production and increased pay for the workers
through the application of scientific methods. It is based on the ideas of economic
rationality, efficiency, individualism and scientific analysis of work.
Fredrick W. Taylor was a major contributor to this approach, known as the father of
scientific management, he advanced the following principles:

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 ▪ Development of true science for each person’s work (measurement)
▪ Scientific selection, training and development of the workers
▪ Improvement of methods of work to reduce workers’ fatigue (mechanization)
▪ Development of different accurate methods of paying workers
▪ Cooperation with the workers to ensure work is carried out in a prescribed
way
▪ Minimization of physical efforts
▪ Elimination of duplication of work.
Limitations of the theory:

• Workers are treated like machines, not allowed to think on their own
• Management is more concerned with work output than the welfare of workers
• Setting of strict work deadlines
• Limiting work processes with objectives making it to become a routine.
2. The classical theory: The writers thought of organization in forms of its purpose and
formal structure and placed a lot of emphasis on planning work, technical equipment
of the organization, principles of management and the assumption of rational and
logical behaviour.
Writers, Mooney and Reiley: Proposed the following principles.

▪ Principle of coordination - need to act together in unity of action, exercise authority

and need for discipline.
▪ The scalar principle: hierarchy of organization, the grading of duties and the process
of delegation
▪ The functional principles ; specialization and distinction between different kinds of
duties
▪ Division of work: clear definition of duties and responsibilities and maintaining
specialization and coordination.
Classical theory emphasized on formal rules, specialization, clear division of labor and the
achievement of high efficiency through analysis of work and attaching little importance to
personal and social needs of the people operating in the organization.

Contributions of the classical theory

▪ Division of labour, management by exception and specialization

▪ Laid a firm foundation for subsequent study of the efficiency of working
methods and organization that are widely adopted in the modern organization
▪ The emphasis on the role target setting and the need for logically determined
standards, mass production was enhanced and improved quality achieved.
Taylor advocated five principles:

1. Use scientific method to determine the one best way of doing a task.
2. Select the best person to do the job so defined , ensuring that their physical and mental
qualities are appropriate for the task.
3. Train, teach and develop the worker to follow the defined procedures precisely.

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 4. Provide financial incentives to ensure people work to the prescribed method.
5. More responsibility for planning and organizing from the worker to the manager.
He advocated time and motions studies, standardized tools and individual incentives, breaking
work into small specific tasks would increase control.

Modern application of classical/rational goal model

Principle Current application
Systematic work methods Work study and process engineering departments
Develop precise specifications for processes.
Detailed division of labour Staff focus on one type of work or customer in
Manufacturing/service operations.
Centralized planning and control modern information systems increase the scope
for
Central control or worldwide operations.
Low-involvement employment relationship Using temporary staff as required rather than
Permanent employees.
Bureaucracy is a system in which people are expected to follow precisely defined rules and
procedures rather than to use personal judgment.

Characteristics of bureaucracy

• Rules and regulations: the formal guidelines that define and control the behaviour of
employess, ensures uniform procedures and operations regardless of the individuals
wishes.
• Impersonality: involves evaluating employee objectively on performance rather than
subjectively on personal considerations, it limits favoritism.
• Division of labor: managers and employees work on specialized tasks therefore it is
easy to learn and control.
• Hierarchical structures: Jobs are ranked vertically by the amount of authority to make
decisions. Each lower position is under the control of a higher position.
• Authority structure: a system of rules, impersonality, division of labor and
hierarchical forms of authority structure.
• Rationality: Using the most efficient means to achieve objectives, managers should
run the organizations logically and scientifically.

3. Human relations/ behavioral theory

It asserts that workplace behavior is determined by the organizational setting in which it
occurs. Social factors are regarded as influencing the actions and attitudes of workers at least
as powerfully as incentive schemes, physical working conditions, leadership styles ,

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interpersonal and organization communications, employee morale, group norms and job
satisfaction are all regarded as important.

Propositions;

1. The amount of work a person does depend on the physical conditions surrounding the
work, non-economic rewards can motivate workers more than high wages, feeling of
happiness and security.
2. Specialization and the division of labor might not be efficient; a wide variety of tasks
which requires discretion can stimulate employee’s interest in their work to the point
where productivity increases.
3. Individuals perceive themselves as members of groups. Norms of behaviour emanate
from standards set by the group to which workers belong and not form standards
imposed by management.
Contributions of the theory

▪ Role and importance of interpersonal relationships

▪ Shows how social and technical systems interrelate
▪ Links between job satisfaction and productivity
▪ Involvement of workers in decision making.
Limitations

• Ignores the existence of conflict of interest within eg, frustrations and disagreement
between management and workers
• It down plays the role of organization structure
• It ignores political economic and environmental forces
• Labour unions influence
• Focus on the influence of the small groups and ignores the wider social structures
THE SYSTEM THEORY
The classical approach emphasizes on the technical requirements of the organization and its
need, while the human relations approach put focus on the psychological and social aspects
and the consideration of human beings.

The systems approach attempts to reconcile other approaches and the work of other writers of
management. A system is a set of interrelated components that work together to achieve a
common goal. It puts focus on the total organization and the interrelations of structure,
behaviour and the range of variables within the organization. This approach encourages
managers to view the organization as a whole and as part of the larger environment. The
approach puts emphasis on the fact that any part of the organization’s activities affects all other
parts. There are two types of systems:

1) A closed system is one that is independent of its environment; it determines its own
destiny and controls its own interrelationships. The continuing existence of a closed
system does not depend on it entering transactions with the outside world.
2) The open system which is a continuous contact with the environment and the
boundaries of such systems are neither rigid nor easily defined. Open systems enter into
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 transactions with their environment e.g a firm recruits workers and persuades customers
to purchase its goods. They transform inputs obtained from the environment into
outputs and return them to the environment eg a firm transforms labor, materials and
capital into goods and services. It has a need to adapt to the external changes.
Contributions of the system theory

It integrates the other approaches making it better and more applicable in the modern world.
Since it incorporates both the classical school and human relations school, where inputs are
transformed (raw materials and human resources) into outputs (products or consumer
service) this interrelationship enables organizations to trace the effects of one element of
the system through the changes in the other.

Factors that affect output (production) such as inputs (human resource and the firm’s
components) can be monitored to give the optimum production. The relationship between
inputs and outputs are examined.

Limitations of the system theory

• It highlights very few tangible propositions about how managers should behave. It
is abstract and lacks discernible applications.
• Organization systems are run by people therefore interpersonal relationships might
be more important than particular output structures and organizational forms which
they control.
• Different members of the same organization system have entirely different
structures and aims and this may create conflicts.
• Organizational relationships are highly complex, and the application of the systems
approach simplifies what is an enormously complicated problem. There are many
variable potentially relevant to organizational performances so that the
specialization of a few inputs is likely to be arbitrary to some degree.
• Systems theory cannot by itself explain organizational behavior without taking
other considerations into account.
4. THE CONTINGENCY THEORY
It is an extension of the systems approach; it highlights possible means of differentiating among
alternative forms of organization structures and systems of management. It states that there is
no one optimum state. Eg the structure of the organization and its success are dependent, that
is contingent upon the nature of tasks which it is designed to deal and the nature of
environmental influences.

The most appropriate structure and system of management is dependent upon the contingencies
of the situation of each of the particular organization. It implies that the organization theory
should not seek to suggest the best way to structure or manage organizations but should provide
insights into situational and contextual factors which influence management decisions.

Contingency approach releases managers from the rigid structures imposed by other schools.
Managers tailor their behavior to the needs of the various situations. It offers some valuable
insights to the managers. Not all factors affecting leadership styles are in harmony with each
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other, some factors in a situation may favor a people oriented style and others a task oriented
style. The application of the theory can help contribute to a more successful organization,
economic pressures and developments in information technology necessitating the review of
the structural design.

The approach forces the manager to abandon the pursuit of a single best approach; the best
approach may be determined by a careful analysis of the task and people involved.

LIMITATIONS

Managers may appear to be insincere and inconsistent to colleagues and subordinates. One
approach is adopted today and possibly an entirely different approach another day according
to circumstances. Employees never know what to expect from the manager.

The individual manager may not be sufficiently skilled or mature to be able to change his or
her approach from one situation to the next especially if the manager has not been trained in
the techniques of contingency management. It may be entirely appropriate to apply basic
principles regardless of circumstances particularly where professional ethics and moral issues
are concerned.

HUMAN RELATIONS AND SOCIAL PSYCHOLOGICAL THEORIES

These theories focus on the human factor at work – the behaviour of people at the workplace.
They were interested in: human motivation; group relationships and leadership. Managers can
make use of a number of motivational theories to help employees work harder.

The concept of motivation: the aim of human motivation studies is to discover what triggers
and sustains human behavior at the workplace.

Motivation is a driving force that encourages individuals to behave in particular ways as they
seek to achieve a goal. Understanding human motivation is a complex matter. Sometimes a
person motives may be clear to themselves, but very puzzling to others. Managers and
supervisors should be aware of the many factors that affect behavior. The managers
assumptions about people’s behavior determines how they treat them, e.g. if the manager
assumes that a particular group of workers is hardworking and reliable, he/she will treat them
with respect and trust, if he/she see them as lazy and unreliable, very likely treat them as
requiring control and supervision.

Abraham Maslow’s Hierarchy of needs: (1954)

He argued that employees can be motivated through means other than pay. He proposed a
theory of needs, which explains why people work based on the hierarchical model, with basic
needs at the bottom and higher needs at the top. He says that most people are motivated by
the desire to satisfy specific group of needs.

• Physiological needs – need for food , sleep and shelter

• Safety needs – need for a stable environment, free from threats ( economic and physical)

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 • Love needs – need for affection, relationship with others and status with a group (family
and friends)
• Esteem needs – self respect, self esteem and esteem of others
• Self – actualization needs – need for self-fulfillment (achieving ones best)
Maslow argued that people tend to satisfy their needs systematically, starting with the basic
and then progressing up the hierarchy.

Contribution; He provided a useful framework for discussion about the variety of needs
people experience at work and the ways in which their motivation could be met by managers.

Criticism; the systematic movement up the hierarchy is not a consistent form of behavior for
many people. People are more likely to move up and down in satisfying the needs at different
levels.

Drucker (1974) commented that Maslow had not recognized that when a want was satisfied,
its capacity to motivate was changed.

According to Alderfer (1972) there are only three major sets of needs:

• Existence needs ( basics of life)

• Social and interpersonal needs
• Growth needs ( personal development needs)
SUMMARY

Theory contributing discipline

Classical Industrial engineering, Economics and experience

Scientific management Taylor F.W.

Bureaucracy Max Weber

Administrative management Fayol, Barnard

Behavioral Psychology, sociology, anthropology, social psychology

Human relations Mayo, Roethlisberger

Human resources McGregor, Likert

Systems Open systems; Katz and Kahn:

Contingency; Woodward and Lawrence Lorsch

Major concepts

Division of labor Motivation

Pay as motivator Group norms

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Narrow span of control flat organizational designs

Unity of command Contingency leaderships

Authority – responsibility Job enrichment, levels of management

Assignment: Highlight the major contributions of behavioral theory to the modern-day

management.

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