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THEORIES OF MANAGEMENT Presented by :BALANSAG, Maybel A. Bachelor of Science in Biology Spec: Animal biology Professor :Alfredo G.Maturan, Ph,D.
Management theories • General rules that guide the managers to manage an organization. • known as "Transactional theories” • Focus on the role of supervision, organization, and group performance. • Theories are an explanation to assist employees to effectively relate to the business goals and implement effective means to achieve the same.
Types of Management Theories Classical Management Theory Behavioral Management Theory Modern Management Theory 3
Classical Management TheoryApplies Scientific manner • 1900s -1939s • Began in the industrial revolution, when problems related to factory systems happened. • Concerned with an employee’s productivity and output. Thus productivity is the primary goal. • Advocates a specialization of labor, centralized leadership and decision-making, and profit maximization. • Viewed workers as machines but fails to take into account what job satisfaction, employee input and morale can bring to the workplace. • “Focused on Finding the “ one best way” 4
Classical Management Principles • Scientific management should be used to determine the most efficient ways to do a job. • Employees are selected to perform tasks based on their skills and specializations. • Operations should be as much as possible. • Decisions are made by a single person or by a select few authority figures • Increased profit is given priority. Incentives drives workers to work.
Main Concept of Classical Management Theory Hierarchical Structure /Centralizes Structure of Leadership First Level : Composes the business owner /executives------ sets the long term goals of an organization Second Level : Composes the middle management----------in charge of overseeing managers and setting department –level goals. Third Level : Composes the supervisors or managers who oversee the day-to-day operations of a company.
Labor Specialization Breaking large tasks or projects into smaller tasks that are assigned to employees. Working are typically responsible for only one specific task to prevent multitasking and increase productivity. Wage Incentives Physical needs can be met through income and monetary incentives and uses the opportunity for wage increases to motivate employees.
The Importance of Classical Management Theory Clear Organization Hierarchy Clear outline of responsibilities and objectives for each member of management, that reduces any confusion. Easy to Understand Division of Labor Tasks are typically easier to understand and employees are given specific projects to complete within their abilities and specializations. Projects are broken down into smaller tasks that are easy to complete.
The Importance of Classical Management Theory Cont.. Increased Productivity through Monetary Rewards Theory believes that employee are strongly motivated by their physical needs and monetary incentives. Which they work harder and become more productive if they have a incentive to look forward to. This gives management easier to control over the workforce. Single-Leader Decision Making/Autocratic Leadership Single leader or selecting few leaders to make decisions in behalf of the company. That decisions are made at the top level and communicated down.
Disadvantage Limited emphasis on employee job satisfaction and human relations focuses primarily on the physical needs of an employee. Increased levels of pressure placed on employees Employees can feel increased pressure to complete tasks in a certain period of time, which can lead to stress and discouragement. Restricts the implementation of new ideas and concepts The belief that there is one right way to complete tasks for maximum production. Organization’s ability to grow and implement new ideas and concepts is often limited. In turn, employees may feel restricted in their ability to express their ideas and unique value.
CLASSICAL MANAGEMENT THEORIES CONSISTS OF THREE PILLARS • Theory of Scientific Management - Frederick Winslow Taylor • Administrative Management Theory - Henri Fayol • Bureaucratic Theory of Management- Max Weber • Behavioral Theory of Management -Elton Mayo 11
Theory of Scientific Management known as Taylorism • Frederick Winslow Taylor- Father of Scientific Management • a mechanical engineer • Wealthy Philadelphia Quaker family. • Work in hydraulics factory as laborer/ foreman/chief engineer. • At 25 earned college degree in engineering. • At 35- consultant: Introduced functional foreman, production planning, differential pay= cut costs/increased production. • 1911-wrote Scientific management. Frederick Winslow Taylor very interested in efficiency
Theory of Scientific Management There is science for doing every job. Proponents applied scientific method to study the optimal way to do any type of workplace task. All workers were motivated by money. Focuses on work efficiency. Taylor promoted the idea of “a fair day’s pay for a fair day’s work. experimented : shovel design that would allow workers to shovel for several hours straight. With bricklayers, he experimented with the various motions required and developed an efficient way to lay bricks. he found that by calculating the time needed for the various elements of a task, he could develop the “best” way to complete that task.
Theory of Scientific Management Time and motion could work more efficiently than others. selecting the right people for the job was another important part of workplace efficiency. Bottom –up approach It emphasizes workers to make work more efficiently, at the operating first which in turn improves the efficiency of the management
Principles of Scientific Management • Replace working by “rule of thumb,” or simple habit and common sense, instead use the scientific method to study work and determine the most efficient way to perform specific tasks. • Match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency. • Monitor worker performance, and provide instructions and supervision to ensure that they’re using the most efficient ways of working. • Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.
Administrative Theory • Henri Fayol -father of administrative principles • ---He was a mining engineer • ---He looked specifically at how management and workers are organized within a business to allow for the completion of tasks. • An approach that focuses on principles that can be used by managers to coordinate the internal activities or organization. • Focused on the creation of work groups and functional departments where distinct activities are performed. • Based on the concept of departmentalization , the different activities to performed for achieving the common purposed of the organization should be identified and classified into different groups or departments so that task can be accomplished effectively. Henri Fayol(1841-1925
Fayol’s Basis in Developing the Administrative theory. He introduced 14 management principles used to manage an organization and are beneficial for prediction , planning , decision- making , organization and process management , work collaboratively , and control employees to make sure everyone follows the necessary commands. Top down Approach improving the efficiency of the management first. So that the processes can be standardized and then moves to the operational level where the individual worker are made to learn the changes and implement those in their routine jobs.
14 Management Principles Division of Labor –allows for specialization. Individuals can become more proficient in the accomplishment of a limited set of activities – thus improving their output. Authority – Managers must have the authority to issue commands, but with that authority comes the responsibility to ensure that the work gets done. Discipline – There must be a clear line of authority. Subordinates must fully obey instructions from superiors. Managers must have the ability to instill discipline through punishment.
Unity of Command –only one boss from whom a worker receives instructions. Unity of Direction – Each workgroup or department is working under a singular plan that coordinates efforts. Work efforts should be guided by one supervisor. Subordination of Individual Interest – The interests of individuals are subordinate to the general interests of the group or department or company. Remuneration – Compensation is used to incentivize worker performance. Remuneration can include both financial and non-financial forms of compensation.
Centralization – Decision making should be either centralized (management makes all decisions) or decentralized (employees also make decisions) depending upon the characteristics of the organization and worker competency. Line of Authority (Scalar Chain) – There must be a hierarchy of authority that places workers below managers in the reporting structure. The degree of authority is higher at each stage of the organizational hierarchy. The organizational hierarchy should be well understood throughout. Order – There must be well-defined rules and standards for the work environment and work responsibilities. A safe and orderly environment leads to greater coordination.
Equity – organization must be run based upon principles of fairness. Employees should be treated with a combination of kindliness and justice. Stability of Tenure – Organizations need low turnover. This allows employees time to learn their jobs, develop skills, and acquire loyalty. Initiative – Managers must promote initiative by allowing employees to create plans and carry them out. Esprit de Corps – Establishing a sense of belonging within the organization creates a sense of unity and moral
Administrative theory of Management, five basic elements of management are: Planning - forecasting the future and making a structural plan of action and determining the goals and objectives of the action. Organizing- is the creation of an organizational structure that brings human resources and non-human resources together to work together. Commanding- giving direction and orders by the superior to the subordinate is known as commanding. Coordinating-process of bringing the action of all the divisions and departments and integrating their efforts for the fulfillment of organizational goals. Controlling- comparing the actual performance of the organization with the desired performance level and checking if there is a need for improvement.
Bureaucratic Theory • Max Weber – father of Bureaucratic management theory. • He argued within the organization there should be a strict structure that each employee should need to follow • Based on rational set of guidelines for structuring organization. • It concerns on the distinction between authority and power. • Developing a hierarchical system in the organization; • Defining clear procedures, methods, rules, and regulations to carry out business operations and transactions
Levels of Power or Authority Traditional Workers (considered as servants) are dependent upon the leader (lord) working as their servants and following the stated rules and regulations blindly. Charismatic Due to the extraordinary personality of the managers, the workers are deeply motivated to perform their best on the task allotted to them. Legal-Rational Workers either need to abide by the legal rules or the naturally applicable laws. All the employee need to follow a consistent set of principles.
Principles of Bureaucratic Theory • Task specialization – Weber stressed the importance of each employee fulfilling a specific role within a company. • Hierarchy – Weber wanted each company to have a clear hierarchy within the organization. • Formal selection – When selecting leaders, businesses view a person’s qualifications. They should be appointed to certain roles based on qualifications, which means they won’t be elected by vote. • Rules and requirements – These ensure everyone knows what’s expected of them. Weber wanted business to have uniform standards, and rules are essential to achieve this goal. • Impersonal – The rules and regulations make a business structure impersonal. Promotions aren’t about emotions or personal ties, but rather performance.
Behavioral Management Theory • focused on the human aspects of work. • It aspire to gain a better understanding of human behavior at work to improve productivity. • It focuses on behavioral aspects like motivation, conflict, expectations, and group dynamics.. 26
Behavioral Management Theory (Human Relation Management • Elton Mayo- Father of human relations management • Emphasizes human relationships within the organization. • He believed that productivity increases when people feel like they are part of a team and valued by their co-workers. • He suggested within the organization there should be mutual affection between managers and workers • A manager must need to motivate employees and make an environment to try to add their absolute best way. Elton Mayo (1880-1949) 27
Basics of the Maslow Hierarchy of Needs Theory • Proposed by Abraham Maslow in 19434, for motivation purposes • Maslow’s theory proposes that as humans meet “ basic needs”, we look to satisfy “ higher needs(lack of), and the top level is growth needs” that occupy at our mind seat. • Maslow’s theory is depicted as a pyramid in five levels. • When each level of need is accomplished , the next level of need becomes dominate. Therefore , no need is ever satisfied, motivation excels to feel satisfied.
Application in Management • Managers who accept Maslow’s ideas attempt to • increase employee motivation by modifying organizational and managerial practices to increase the likelihood that employees will meet all levels of needs. • Helped managers understand that it is hard to motivate people by appealing to already-satisfied needs. • When managers threaten job security to drive performance. They’re attempting to hit a base need in Maslow’s hierarchy of safety and security (working conditions) in order to motivate
Theory X and Theory Y Douglas McGregor -social psychologist Two Concepts Authoritarian (Theory X)/ X theory negative participative (Theory Y)/Y theory positive.
Two Factor Theory(Herzberg's motivation-hygiene theory) Proposed by psychologist Frederick Herzberg, Hygiene factors, or extrinsic motivators/ dissatisfies they are required to avoid dissatisfaction. Motivation factors, or intrinsic motivators/ satisfier Yield positive satisfaction, motivate the employees for a superior performance
Modern Management Theory Emphasizes the use of systematic mathematical techniques to analyze and understand the inter-relationship of management and workers in all aspects.
Management Science Theory. • Developed during the Second World War to solve military problems by the UK and USA. • ------Focuses on using quantitative tools for decision-making, solving management problems. with the application of mathematical statistics and operational research approach. • ------Computer programs are used to analyze the problems.
Contributions and Limitations: Contributions: It encourages in use of knowledge from different disciplines. Complex relations among variables can be expressed more effectively. Decisions can be more precise with the use of a mathematical approach. It emphasizes on replacement of intuition and hunch by factual data and logical analysis in the decision-making process. Limitations: It ignores the human relation aspects. All the assumptions cannot be realistic. Data and facts may not be available all the time.
The systems management theory • Proposed in the 1940s by biologist Ludwig von Bertalanffy, • Treats an organization as a system. Everything is interrelated and interdependent, • The success of an organization depends on several key elements: synergy, interdependence, and interrelations between various subsystems. • Consists of input, process, and output.
Contingency Approach Developed by Fred Fiedler management is essentially situational in nature. All decisions by managers will be affected (if not controlled) by the contingencies of a given situation. Contingencies arise from various environmental factors. As such, managers must take into account these contingencies when making decisions that affect the organization.
