Historical Development of Management and Management Theories - Literature review Example

Historical Development of Management The field of management emanated from the industrial revolution which brought about two changes; the substitution of machine power with human power and the need for formal management in large organizations. Management as a discipline relates to and is affected by a number of disciplines (Handy 1996) such as Economics- the allocation and distribution of scarce resources, Political Science- How politics affects individuals and groups, Philosophy- the study of the nature of things, Psychology- measures, explains and seeks to change human behavior and Sociology- the study of social problems. Although managerial practice has been around for long, it was not until the late nineteenth and twentieth century that conclusive studies were made in relation to professional management and its role in organizational success (Roth 1999). Witzel (2004) notes that studies of management began with the scientific management theory which was succeeded by the 'general administrative' theory. It was succeeded by the human relations theory and then the systems approach and finally the contingency approach. Scientific Management Theory Fredrick W. Taylor This was the first management theory of the 20th century developed by Taylor. While working at a steel company as one of the workers, he noted that some of the workers were intentionally slow but at the end of the day they received the same amount of wages as others who worked more. Taylor developed a way of quantifying work and getting paid according to how much work was done regardless of the time spent. (Cole, 2004) This theory viewed humans as economic animals classified by their production levels. Every worker was judged individually and not as a group. Taylor believed that the reason people worked was to get money. Offering more money for more work will ensure productivity increases considerably. The manager’s role in this theory is to give instructions while that of the worker is to follow instructions and get paid on how much of the instructions are followed. The only motivation offered is money (Witzel, 2004). Taylor’s theory was insufficient because of the way it regarded workers as machines. The theory failed to acknowledge and appreciate the differences among people which could have been a cause for the differences in production (Peter 1993). It also failed to realize that although money could be one of the reasons for working, there could be other more fundamental reasons like personal and career development. General Administrative Theory of Management This is the second theory of management. While scientific theory was concerned about how to motivate humans to improve production levels, administrative theory was concerned about making the various sectors of an organization work together to improve efficiency and production. Administrative theory defines the role of the manager in implementing set out principles which if followed will guarantee success. Proponents of this theory are Henri Fayol and Max Weber (Sheldrake 2003). Henri Fayol Henri was an engineer turned managing director of a large French company. During his managerial practice, he realized he needed more skills than those he had acquired to run an organization. He noted that becoming a proficient manager is not hereditary; rather it is acquired through exposure to administrative tasks across the management hierarchy (Cole 2004). Fayol outlined six divisions of the various activities in an organization. The divisions are; Technical (production and manufacturing), Commercial (exchange), Finance (getting and using money), Security (safety of property and humans), Managerial (incorporates planning, organization, command, coordination and control) and Accounting (stock records, statistics, balance sheet). These six activities are dependent on each other; a manager must know how to coordinate them to achieve set organizational goals. He developed principles of management (Drucker 2006) which he believed would help all managers in the different organizations. These principles are as follows. 1. Division of labour- Duties must be clearly divided to ensure specialization in an area of work 2. Authority- with authority the responsibility; the two functions together. 3. Discipline- Discipline develops respect, commitment and obedience. 4. Unity of command- A person should be answerable to a single superior. 5. Unity of direction- An organization with common goals should have one manager and lead to one direction. 6. Individual interest Vs general interest- The interest of the organization comes before the interest of any individual or group. 7. Remuneration- The amount of money paid should be proportional to the amount of work done 8. Centralization- The manager should delegate duties to juniors as chosen while still assuming the final say 9. Scalar chain- Chain of command from the lowest to the highest worker must be maintained to allow the smooth flow of information. 10. Order- Tasks should be completed within a set out timeline to facilitate assessment of short, medium and long term goals. 11. Equity- Employees should be treated equally. 12. Stability of tenure of personnel- Employees should be given job security to prevent high turnover rates which are both costly and time consuming. 13. Initiative- Employees should be an integral part of plans and innovations meant to develop the organization. This will put their creativity to use and equip them with practical skills. 14. Esprit de corps- Proper communication and team work are key to developing a strong organization. Max Weber Weber proposed the bureaucratic model of management. The model complements the 'general administrative' theory led by Fayol (Sheldrake 2003). Bureau is a French word which means desk so bureaucracy is essentially leading from the desk. This theory is hierarchical, and line of command is from top to bottom (Peter 1993). An employee is answerable to the immediate boss, the one he/she precedes. Tasks are clearly divided, and guiding principles are given on tasks to avoid overlapping and blame games. Weber proposed principles that would ensure the success of a bureaucracy (BlogSpot 2011). 1. Division of labour- Work is simplified to ensure specialization. 2. Authority hierarchy- There is a well-defined hierarchy of authority. It follows the principle of rationality, objectively and consistency. 3. Impersonality- There is formal and impersonal relations among the member of the organization. 4. Formal rules and regulations- There should be a system of written rules to be followed as well as standard procedures. 5. Formal selection- Selection and promotion is based on technical qualifications. 6. Career orientation- A manager should have that title as a career and by virtue of owning the business. The bureaucratic model was criticized for its rigidity and excessive paperwork. Overreliance on the manager could kill innovativeness and reduce empowerment. The model was also limited to government corporations since some of the principles could not apply in privately owned organizations (Dole 1969). Human Relations Theory of Management Elton Mayo (Hawthorne Studies) Mayo conducted studies on a group of workers by varying the amount of electricity available during working hours. He had two groups, the control group and the study group. Mayo observed that even with reduced electricity supply, productivity from the study group was not affected until the light was overtly insufficient. With this observation, Mayo concluded that external conditions cannot affect productivity if workers feel appreciated and involved by the organization (Roth 1999). Abraham Maslow (Hierarchy of Needs) Maslow came up with a pyramid hierarchically prioritizing human needs from the most basic ones to self-actualization. He views human needs as a continuous process in which a new need supersedes a fulfilled one. All needs of one level in a hierarchy must be met before moving on to the next. Human needs serve as the motivational factor (Drucker 2006). Need satisfaction leads to extinguished motivation. The needs are divided into five levels. i. Basic needs- These needs facilitate human survival. They include food, water, shelter and sex. Once this primary needs have been met they are no longer a motivation. This first level of need must be fulfilled before moving on to the second level. ii. Safety needs- This need wants to flee from danger. Security exists in different areas such as socially, financially and politically. iii. Love and belonging- These are the need to feel loved and accepted by influential people in one’s life. These people can be friends, peers, family, workmates or social groups. iv. Esteem needs- This is the need to be socially accepted by other people through skill perfection and self-confidence. v. Self-actualization- This is the final level of the hierarchy. People at this level have a fulfilled and purposeful life without more needs. This theory helps today’s manager know how to motivate their employees and assist them reach self-actualization. Herzberg’s Theory Herzberg presented a theory that discussed the effects of two types of factors on individual motivation. One division had satisfiers (motivation factors) while the other consisted of disatisfiers (Hygiene factors). Motivating factors include achievement made at work, recognition from exemplary performance, satisfaction derived from working, responsibilities awarded, career and personal advancement as well as growth. Hygiene factors, on the other hand, include supervision, limiting company policies, poor working-conditions, unfair salary, inhibited interpersonal relations and job security (Handy 1996). Managers must learn when to apply motivation or hygiene factors to promote efficiency. McGregor’s Theory X and Y McGregor’s theory presents two extreme beliefs on workers. Theory X believes that humans naturally dislike work and are naturally lazy, irresponsible and must be supervised closely to make them work. Theory Y believes that human love work. They are hardworking, responsible and need little to no supervision. A manager must balance the two extremes to make worker’s feel free while ensuring that work is done as planned (Cole 2004). System’s Approach As a result of technological changes and disciplinary influences, there was a need to change approaches to management. Technological inventions that complemented humans for efficiency had come up; there was a need to integrate them without threatening workers roles. The systems approach came up to promote harmonious coexistence of all the constituents of an organization in having efficient systems (Roth 1999). The constituents must work together to carry out the system’s activities such as marketing, accounts, finance, production and communication. In an organization, the system consists of people, statistics and technology (Sheldrake 2003). The manager must understand organizational dynamics such as internal and external changes and interactions. Contingency Approach This approach was necessitated by changes in management outcomes and choices. Volatility and dynamism in competition environments has led to change of management style to suite the situation at hand. Contrary to earlier theories that had a definite formula for management this approach has no guideline for the management. Blake and Moulton’s managerial grid contributed to the illustration of the flexibility concept (Peter 1993). The grid presents various situations and the management steps followed to deal with the crises. The grid is dependent on two extremes; concern for people and concern for production. When a decision is influenced by concern for people, it will primarily focus on the feelings of the people involved. Similarly, when influenced by concern for production, the primary concern will be the amount of production achieved with little or no reference to people. Managers must use the two extremes for balanced management (Morgen 2003). Organizational Behavior Organizations are social systems that require cooperation; a group of people functioning together to achieve common goals for an organization. Proper functioning of organizations must focus on organizational structures, attitudes, feelings and actions of the people forming it (David &Andrzej 1999). This is because an organization gets considerable influence from the people working in it while the people are also influenced by exposure to the organization. The field of management and organizational behavior complement each other in understanding the organization and the people better thereby enabling proper and effective planning for the future. Advocates of Organizational Behavior Chester Bernard He was a manager who viewed organizations as open social systems which required the collective effort of everyone in the organization. He believed that a manager should communicate and stimulate employees for increased productivity (Mullins 2007). Mary Parker Follett She was the first to recognize that organizations will be viewed on the basis of individual and organizational behavior (David &Andrzej 1999). She proposed that organizations should be founded on group ethics. She also suggested the replacement of scientific management with people oriented ideas. Hugo Munsterburg He created the field of industrial psychology which studied people at work. He also advocated for the study of human behavior by managers so as to understand motivational dynamics (David & Andrzej 1999). He came up with psychological tests for an employee’s evaluation for selection. The fields of management and organization have evolved from the era of specific principles to present day dynamic approach. This is due to changes in internal and external factors that affect operations at the organizational level. The study of early management theories is necessary for would be managers because some of the earlier principles still apply in current management trends. The correlation of the two disciplines in theory and practice also creates the need to understand them both. As a result of globalization and competition amid the global financial crisis managers must learn to recession proof their organization and this means involving employees in innovation and strategy. References Cole, G. (2004) Management Theory and Practice, 6th Ed. YHT Limited, London. Dale, E. (1969) Management: Theory and practice, Rex Bookstore, Florida. David, B. &Andrzej H. (1999) Organizational Behavior: An introductory text. Routledge Publishing, California. Drucker, P.F. (2006) The Practice of Management, Collins Publishers, U.S.A. Friedman, P.F. (2000) Dictionary of Business Terms. Barron Educational Publishers, U.S.A. Handy, C. (1996) Gods of Management: The changing work of organizations. Oxford University Press, Britain. Morgen, W. (2003) Fifty key Figures in Management, Routledge Publishers, UK. Mullins, J.L. (2007) Management and Organizational Behavior, 8th Ed. Pitman Publishing, U.S.A. Peter F. D. (1993) Management: tasks, responsibilities and practices, Harper Business, Kansas. Roth, W. (1999) The Roots and Future of Management Theory: A systems perspective. St. Lucie Press, Montenegero. Sheldrake, J. (2003) Management Theory, Cengage Learning EMEA. Witzel M. (2004) Management: The basics, Routledge Publishers, UK. Read More