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MANAGEMENT
BIM 1
Basic Management
Models and Theories
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This section covers:

Classical Management theory

Human Relations Theory
Neo-Human Relations Theory
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Classical Management Theory

Here we focus on three well-known early writers on management:

Henri Fayol
FW Taylor

Max Weber
Definition of management:
Management takes place within a structured organisational setting with
prescribed roles. It is directed towards the achievement of aims and
objectives through influencing the efforts of others.
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Classical Management Theory

Classical management theory

Emphasis on structure
Prescriptive about 'what is good for the
firm'
Practical manager (except Weber,
sociologist)
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Henri Fayol (1841 - 1925), France

 1.Division of work  4. Unity of command: One man

superior
Reduces the span of attention or effort
for any one person or group.  5. Unity of direction: One head and
Develops practice and familiarity one plan for a group of activities with
the same objective
 2. Authority
 6. Subordination of individual interests
The right to give an order. Should not to the general interest
be considered without reference to
responsibility  The interests of one individual or one
group should not prevail over the
 3. Discipline
general good. This is a difficult area of
Outward marks of respect in accordance management
with formal or informal agreements
between firm and its employees  7. Remuneration: Pay should be fair to
both the employee and the firm
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Henri Fayol (1841 - 1925), France

 8. Centralisation: Is always present to a  12. Stability of tenure of personnel

greater or less extent, depending on the
size of the company and quality of its  Employees need to be given time to settle
managers into their jobs, even though this may be a
lengthy period in the case of the managers
 9. Scalar chain: The line of authority
from top to bottom of the organisation
 10. Order: A place for everything and  13. Initiative: Within the limits of
everything in its place; the right man in authority and discipline, all levels of staff
the right place should be encouraged to show initiative

 11. Equity: A combination of kindliness

and justice towards the employees
 14. Esprit de corps: Harmony is a great
strength to an organisation; teamwork
should be encouraged
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Advantages

 Fayol was the first person to actually give a definition of

management which is generally familiar today namely
forecast and plan, to organise, to command, to co-ordinate
and to control
 Fayol also gave much of the basic terminology and concepts,
which would be elaborated upon by future researchers, such
as division of labour, scalar chain, unity of command and
centralization.
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Disadvantages
 Fayol was describing the structure of formal organizations.

 Absence of attention to issues such as individual versus general interest,

remuneration and equity suggest that Fayol saw the employer as paternalistic and by
definition working in the employee's interest.

 Fayol does mention the issues such as initiative and 'esprit de corps', but he saw
them as issues in the context of rational organisational structure and not in terms of
adapting structures and changing people's behaviour to achieve the best fit between
the organisation and its customers.

 Many of these principles have been absorbed into modern day organisations, but
they were not designed to cope with conditions of rapid change and issues of
employee participation in the decision making process of organisations, such as are
current today in the early 21st century.
+ F W Taylor - (1856 - 1915), USA- The Scientific
Management School

 Taylorism involved breaking down the components of manual tasks in

manufacturing environments, timing each movement ('time and
motion' studies) so that there could be a proven best way to perform
each task.
 Thus employees could be trained to be 'first class' within their job.
 This type of management was particularly relevant to performance
drives e.g 'Action On' projects.
 This was a rigid system where every task became discrete and
specialized.
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Key points about Taylor, who is credited with what we
now call 'Taylorism':

he was in the scientific management

school
his emphases were on efficiency and
productivity
but he ignored many of the human
aspects of employment
+ For the managers, scientific management required them to:

 develop a science for each operation to replace opinion and rule of

thumb
 determine accurately from the science the correct time and methods for
each job (time and motion studies)
 set up a suitable organisation to take all responsibility from the workers
except that of the actual job performance
 select and train the workers (in the manner described above)
 accept that management itself be governed by the science deployed for
each operation and surrender its arbitrary powers over the workers, i.e.
cooperate with them.
+ For the workers, scientific management required them to:

 stop worrying about the divisions of the fruits of production between

wages and profits.
 share in the prosperity of the firm by working in the correct way and
receiving wage increases.
 give up their idea of time wasting and co-operate with the management
in developing the science
 accept that management would be responsible for determining what was
done and how
 agree to be trained in new methods where applicable
+ The benefits (mainly for the management) arising from
scientific management can be summarised as follows:

 its rational approach to the organisational work enables tasks and procedures to be measured with
a considerable degree of accuracy

 measurement of paths and processes provide useful information on which to base improvements
in working methods, plant design, etc.

 improving work methods brought enormous increases in productivity

 it enabled employees to be paid by results and to take advantage of incentive payments

 it stimulated management into adopting a more positive role in leadership at shop floor level.

 it contributed to major improvements in physical working conditions for employees

 it provided the formation for modern work studies

+ The drawbacks were mainly for the workers:

 it reduced the worker's role to that of a rigid adherence to methods and

procedures over which he/she had no discretion
 it led to increased fragmentation of work due to its emphasis on divisional
labour
 it generated an economically based approach to the motivation of
employees by linking pay to geared outputs
 it put the planning and control of workplace activities exclusively in the
hands of the managers
 it ruled out any realistic bargaining about wage rates since every job was
measured and rated 'scientifically'
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Summary

 Therefore, in summary, while the scientific management technique

has been employed to increase productivity and efficiency both in
private and public services, it has also had the disadvantages of
ignoring many of the human aspects of employment. This led to
the creation of boring repetitive jobs with the introduction of
systems for tight control and the alienation of shop floor employees
from their managers.
 Taylorism prevailed in the '30s through to the early '60s – and in
many organisations considerably later than this.
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Max Weber (1864 - 1924), Germany

 Bureaucracy in this context is the organisational form of certain dominant characteristics such as a
hierarchy of authority and a system of rules.

 Bureaucracy in a sense of red tape or officialdom should not be used as these meanings are value-ridden
and only emphasize very negative aspects of the original Max Weber model.

 Through analyses of organisations Weber identified three basic types of legitimate authority: Traditional,
Charismatic, Rational-Legal.

 Authority has to be distinguished from power in this discussion.

 Power is a unilateral thing - it enables a person to force another to behave in a certain way, whether by
means of strength or by rewards.

 Authority, on the other hand, implies acceptance of the rules by those over whom it is to be exercised
within limits agreeable to the subordinates that Weber refers to in discussing legitimate authority.
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Weber presented three types of legitimate
authority:
 Traditional authority: where acceptance of those in authority arose
from tradition and custom.
 Charismatic authority: where acceptance arises from loyalty to, and
confidence in, the personal qualities of the ruler.
 Rational-legal authority: where acceptance arises out of the office, or
position, of the person in authority as bounded by the rules and
procedures of the organization.
 It is the rational-legal authority form that exists in most organisations
today and this is the form to which Weber ascribed the term
'bureaucracy'.
+ The main features of bureaucracy according to
Weber were:

 a continuous organisation or functions bounded by rules

 that individuals functioned within the limits of the specialisation of the work, the
degree of authority allocated and the rules governing the exercise of authority
 a hierarchical structure of offices
 appointment to offices made on the grounds of technical competence only
 the separation of officials from the ownership of the organisation
 the authority was vested in the official positions and not in the personalities that held
these posts.
 Rules, decisions and actions were formulated and recorded in writing.
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The main features of bureaucracy

 It is not coincidence that Weber's writings were at a time of the major industrial
revolutions and the growth of large complex organisations out of the cottage
industries and/or entrepreneurial businesses.
 The efficiency of this rational and logistical organisation shares a considerable
amount of common ground with the thinking of Fayol. In particular, features
such as scalar chain, specialisation, authority and the definition of jobs which
were so essential to successful management as described by Fayol, are typical
of bureaucracy.
 There is also little doubt that Weber's ideas concerning specific spheres of
competence and employment based on technical competence would have
considerable appeal for Taylor's scientific managers.
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Advantages

 • Appointment, promotion and authority were dependent on technical competence

and reinforced by written rules and procedures of promoting those most able to
manage rather than those favoured to manage.

 We take a lot of this for granted in many countries today. Anything else is regarded
as nepotism and corruption.

 The adoption of bureaucratic type of management systems allow organisations to

grow into large complex organised systems that are focused towards formalised
explicit goals.

 It cannot be stated strongly enough that the Weber theory has the advantage of being
used as a 'gold standard' on which to compare and develop other modern theories.
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Disadvantages

 Subsequent analysis by other researchers have identified many disadvantages:

 Tendency for organisations to become procedure dominated rather than goal dominated.
 Tendency for heavily formalised organisational roles to suppress initiative and flexibility of the
job holders.
 Rigid behaviour by senior managers can lead to standardised services that do not meet the
needs of the client.
 Rigid procedures and rules are demotivating for the subordinates that work in the
organizations.
 Exercise of control based on knowledge as advocated by Weber has led to the growth of
'experts' whose opinions and attitudes may frequently clash with those of the more generalised
managers and supervisors.
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Human Relations Theories
Elton Mayo:
 Where Classical theorists were concerned with structure and mechanics of
organisations, the theorists of human relations were, understandably, concerned
with the human factors. They were descriptive and attempted to be predictive of
behaviour in organisations

 The foci of human relations theory is on motivation, group motivation and

leadership. At the centre of these foci are assumptions about relationship between
employer and employee. Their emphasis was on human behaviour within
organisations

 They stated that people's needs are decisive factors in achieving an

organisation's effectiveness

 The process of motivation involves choosing between alternative forms of action

in order to achieve some desired end or goal
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Elton Mayo : Motivation

 Mayo believed that workers are not just concerned with money but could be better motivated by
having their social needs met whilst at work (something that Taylor ignored).

 Mayo introduced the Human Relations School of thought, which focused on managers taking
more of an interest in the workers, treating them as people who have worthwhile opinions and
realising that workers enjoy interacting together.
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Elton Mayo : Motivation

 Mayo concluded that workers are best motivated by:

 Better communication between managers and workers
 Greater manager involvement in employees working lives
 Working in groups or teams
 His theory most closely fits in with a paternalistic style of management.
 Key summary for Mayo:
 Workers motivated by having social needs met
 Workers should work in teams
 Managers should have greater involvement in employee's working life
 More two-way communication between managers and workers
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Advantages / Disadvantages
 Advantages
 first real attempt to undertake genuine social research in industrial setting
 individuals cannot be treated in isolation, but function with group members
 that individual motivation did not primarily lie in monetary or physical condition, but in need
and status in a group
 the strength of informal (as opposed to formal) groups demonstrated a behaviour of workers
(formal supervisors were powerless in Stage 4)
 it highlighted need for supervisors to be sensitive and cater for social needs of workers within
the group
 Disadvantages
 from 1930s -1950s some doubt was cast on the increased applicability of these theories to every
day working life
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Neo-Human Relations Theory

 This group were social psychologists who developed more complex theories:

 Maslow / McGregor (theory X and theory Y) / Likert / Argyris

 Maslow is often-quoted still today, having developed a seminal theory of the needs of
human beings.

 Herzberg's and McGregor's neo-human relations theories both focus on motivation and
leadership, but their theories are, as we shall see, very different.

 In this group we find a particular focus on human motivation including:

 Satisfaction
 Incentive
 intrinsic
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Maslow (1943)
 This psychologist, from his studies, proposed a hierarchy of human needs building
from basic needs at the base to higher needs at the top.

 Maslow made assumptions that people need to satisfy each level of need, before
elevating their needs to the next higher level e.g. a hungry person's need is
dominated by a need to eat (i.e survival), but not to be loved, until he/she is no longer
hungry.

 Today the focus in most Western societies is on the elements towards the top of
Maslow's hierarchy - in which work environments and 'jobs' (including 'having a job'
and the satisfaction or otherwise such jobs provide - have become typical features.
Notably the attainment of self-esteem and, at the very top of the hierarchy, what
Maslow calls 'self-actualisation' - fundamentally the synthesis of 'worth',
'contribution' and perceived 'value' of the individual in society.
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Advantages / Disadvantages

 Advantages
 Managers can/should consider the needs and aspirations of individual subordinates.
 Disadvantages
 The broad assumptions in 02 above have been disproved by exceptions e.g. hungry,
ill artist working in a garret.
 Empirical research over the years has not tended to support this theoretical model.
 Regarding monetary reward, sometimes beyond certain level of pays (e.g. consultant)
other things become more important than another £1000 a year e.g. working
conditions, boss, environment, etc.
+ McGregor (Theory X and Theory Y)

 Managers were perceived by McGregor, whose theories are still often quoted, to
make two noticeably different sets of assumptions about their employees.

Theory X Theory Y
(essentially 'scientific' mgt)
Lazy Like working
Avoid responsibility Accept / seek responsibility
Therefore need control/coercion Need space to develop
Imagination / ingenuity

Schein type: 'rational economic man' Schein type: 'self-actualising man'

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Advantages / Disadvantages

 Advantages

 Identifies two main types of individual for managers to

consider and how to motivate.
 Disadvantages

 Only presents two extremes of managerial behaviour.

 200 engineers and accountants were asked to recall the
times/occasions when they experienced satisfactory and
unsatisfactory feeling about their jobs.
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Herzberg

 Herzberg showed two categories of findings:

 Motivators - factors giving rise to satisfaction
 Hygiene factors - factors giving rise to dissatisfaction
Important Motivators Important Hygienes
Achievement Company policy and recognition
Recognition Supervision - the technical aspects
Work itself Salary
Responsibility Interpersonal relations - Supervision

Advancement Working conditions

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Herzberg

 Other features include:

Motivators Hygiene Factors
related to content of work related to context/environment
of
Work
promote satisfaction only prevent dissatisfaction

only neo-human school Taylor (salary) + Mayo

attempts to address these (interpersonal relations) look
at these
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Advantages

 Herzberg's work led to a practical way to improve motivation,

which had, up to that point, been dominated by Taylorism (salary,
wages). In particular ' job enrichment' programs mushroomed.
 The aim of these was to design work and work structures to
contain the optimum number of motivators.
 This approach counters the years of Taylorism, which sought to
break down work into its simplest components and to remove
responsibility from individuals for planning and control.
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Disadvantages

 There remain doubts about Herzberg's factors

applicability to non-professional groups, despite the fact
that some of his later studies involved the clerical and
manual groups.
 The numbers were in these categories though were small
and many researchers still argue about the results in these
groups.
 Social scientists argue about the validity of his definition
of 'job satisfaction'
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Likert

 Described 'new patterns of management' based on the

behaviours of managers. There are Four main patterns:

1. Exploitative - authoritative where power

and direction come from the top
'Rational
downwards', where threats and punishment
economic
are employed, where communication is poor man'
and teamwork non-existent. Productivity is
typically mediocre
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Likert

2. Benevolent - authoritative is similar to

the above but allows some upward Weaker
version
opportunities for consultation and some
of 'rational
delegation. Rewards may be available as -
well as threats. Productivity is typically fair economic
to good but at cost of considerable man'
absenteeism and turnover
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Likert

3. Consultative where goals are set or

orders issued after discussion with
subordinates, where communication is 'social
upwards and downwards and where man'
teamwork is encouraged, at least
partially. Some involvement of
employees as a motivator
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Likert

4. Participative - group is reckoned by many to be

the ideal system. Under this system, the keynote is
Self -
participation, leading to commitment to the actualising
organisation's goals in a fully co-operative way. man
Communication is both upwards, downwards and (see also
lateral. Motivation is obtained by a variety of McGregor:
means. Productivity is excellent and absenteeism theory Y)
and turnover are low
Another useful way of looking at this is that (1) is a highly task-orientated management style, whereas (4) is a highly people-orientated management style.
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Advantages / Disadvantages

 Advantages

Essentially Likert's work gives more alternatives in the

spectrum between Theory X and Theory Y of McGregor
 Disadvantages

Criticised for being based more on theory than empirical

practice. Therefore not widely accepted by practising
managers.
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Argyris

 Studied the needs of people and the needs of

organisation. He felt that classical models of
organisation promoted 'immaturity' (see below).
 He felt that it was important to understand the needs of
people and integrate them with needs of organisation.
Only in this way, he said, can employees become co-
operative rather than defensive or aggressive
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Characteristics of Employee

Immaturity Maturity
1.Passivity 1.Activity

2.Dependence 2.Relative independence

3.Behave in a few ways 3.Behave in many ways
4.Erratic, shallow interests 4.Deeper interests
5.Short time perspective
5.Long time perspective
6.Subordinate position
6.Equal or superior position
7.Lack of awareness of self
7.Awareness and self control
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Advantages

Argyris is moving here towards a 'contingency

approach' i.e. remedy depends on diagnosing
problems first
He presents a spectrum rather than bipolar
patterns of employees behaviour could be
expected from immaturity to maturity. Certain
behaviours of employees may be preferred
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Disadvantages

Still too centred around 'self – actualising man'.

Viewed not to be applicable to production lines
with manual workers, workers in sterile supplies,
people manning phone helplines etc. whose
needs are perceived to be typically lower in
Maslow's hierarchy of needs