organizational theory and behaviour_mba631
TRANSCRIPT
TABLE OF CONTENT
Title Page
Chapter One
Concept of Management 3
Chapter Two
Concept of Organizational Theory 12
Chapter Three
Classical Organizational Theory 19 ~
Chapter Four
Behavioural Management Perspective 33
Chapter Five
Contemporary Management Perspective 46
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CHAPTER ONE
CONCEPT OF MANAGEMENT
- ~ Management can be defined as working with and through individuals and
groups to accomplish organizational goals. Organizations, referred to here
include institutions, hospitals, churches, political organizations, labour union,
etc.
Management can also be defined as the achievement of organizational z
objectives throuqh leadership. According to this definition, everyone is a
manager in certain aspects of his or her life.
Furthermore, management can be defined as a distinct process consisting of
planning, organizing, motivating, and controlling, performed to determine
and accomplish stated objectives by the use of human beings and other
resources.
It is important to note that- management is an activity, not a person or a
group of persons; and those who perform this activity are managers or
management members.
- Managers set forth their objectives by precise statements of the problems to
be solved or hurdles to be overcome in outlining the work to be done. A
manager is expected to spell out objectives, giving adequate regard for the
various constraints within which the goals must be achieved. To achieve the
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objectives, he must be able to bring together the available basic resources .•.
that include men, women, materials, machines, methods, money and
markets. These are the six Ms of management. These resources should be
brought together and related harmoniously so that the sought end result
may be accomplished within the predetermined constraints of time, effort
and cost.
FUNCTIONS/PROCESSES OF MANAGEMENT
The functions or processes of management refer to the duties carried out by
managers. These are:
1. Planning: This involves setting goals and objectives for the
organization and developing "work maps" that show how these goals
and objectives are to be accomplished. Planning means "thinking
before doing". Before actual work is started, the manager decides
what to produce, how to produce it, when and where to produce and
for whom to produce. Furthermore, in planning, policies and
objectives, programme of production and method of production, etc,
are decided by managers. •
2. Organizing: This involves bringing together resources (which include: '"
people, capital, equipment and materials) in the most effective way to
accomplish the goals. Organizing therefore involves an integration of
resources, both material and human.
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3. Motivating: Motivating means encouraging a worker work harder by
giving some incentives to the worker. The manager tries to find out
the motives of work in a man and then tries to give some
encouragements that will help to support the motive.
4. Controlling: Controlling involves feedback of results and follow-up to
compare accomplishments with plans and to make appropriate
adjustments where outcomes have deviated from expectations.
Controlling, as a function of management, is to see that other
functions are being performed perfectly.
SOME FACTS ABOUT MANAGEMENT
1. Management is accomplished by, with and through the efforts of
others: For a manager to participate in management, he must
relinquish the normal tendency to perform all things by himself. He
should now get tasks accomplished by, with and through the efforts of
the group members. The prime measure of success of a manager is his
ability to set proper goals and get others to accomplish these goals.
However, management is also applicable to an individual's efforts. For
example, a person manages his or her personal affairs.
2. Management is intangible: Management has bee called the unseen
force. Its presence is evidenced by the results of its efforts. These
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results include orderliness, enthusiastic employees, buoyant spirit and
adequate work output.
MANAGEMENT CLASSIFICATIONS
There are three classes/levels of management. These are: Strategic or top
level management, Tactical or middle level management and Operational or
low level management.
1. Strategic or Top Level Management: The managers at this level
manage the interface between the organization and the external world.
However, for the cost effectiveness of the management of the
organization, the strategic managers must interact with the tactical
and operational managers. The officers that make up this class of
management are the Chiefmen or heads of an organization. The
include:
~ The Managing Director
~ The General Manager
~ Deputy General Manager
~ Works Manager
~ Other high rank officers Tactical or Middle Level Management: The managers at this level translate the strategic decisions to specific decisions. They are responsible to the top management on one hand, and also control and supervise the low level management staff on the other hand. Middle level management officers include the different departmental heads
such as:
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>- The Purchase Officer
>- The Superintendent
>- Chief Store keeper
>- Works Engineer
3. Operational or Low Level Management: The managers at this level a
primarily concerned with the day to day decisions and actions relating
to scheduling, monitoring, evaluation and reporting of actual work
performance. This class of management officers consists of those who
are just above the operational staff and their function is to get the
work done through the operational staff according to the instructions
of middle management as issued by the top management. The lower
level management officers include:
>- Foremen
>- Supervisors
>- Inspectors
>- Charge men
>- Office Superintendent
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SUCCESS IN MANAGEMENT
Success in management is greatly conditioned by the knowledge and the
skill in the following areas: technical, human and conceptual.
Managerial jobs at the top organizational level usually necessitate relatively
more human and conceptual knowledge and skill than technical knowledge
and skill, but. at the lower organizational level, there is need for more
technical and human and less conceptual knowledge and skill.
1. Technical knowledge and skill: This includes understanding and
proficiency in using a specific activity involving a process, procedure or
technique. It usually consists of a specialized knowledge and ability to
perform within that specialty. Technical skill enables its possessor to
accomplish the mechanics demanded in performing a particular job.
2. Human knowledqe and skill: As the name suggests, it includes the
ability to work with others and to win co-operation from those in the
work group. It includes, for example, knowing what to do and being
able to communicate ideas and beliefs to other, and to understand
what thouqhts others are trying to convey to you.
3. Conceptual knowledge and skill: This includes knowing the way and
having the ability to visualize the enterprise as a whole, to see the "big
picture", to envision all the various functions involved in a given
situation or circumstance. It is this conceptual requirement that
enables an executive to recognize the interrelationship and relative
values of the various factors intertwined in a management problem. To
conceptualize requires imagination, broad knowledge and the mental
capacity to conceive abstract ideas.
MANAGEMENT BY OBJECTIVES (MBO)
Management by objectives is a style of managing an organization which
emphasizes the achievements of result expressed in terms of objectives. The
objectives must be specific, time bound, realistic, and qualitative or
measurable. This concept is gaining importance since the last two decades
as a style of management to improve business results.
Management by objectives places great importance on defining of
responsibilities and thereby establishing targets. For this purpose,
managerial performance is measured objectively and quantitatively by using
statements of responsibility which have very specific targets. This way,
individual managers become familiar with the expectations from them by
contributing to the achievement of company goals.
COMPATIBILITY OF MANAGEMENT OBJECTIVES
It means that the individual objectives must be compatible with the
objectives of the organization or management. Both individual and
organizational objectives can be fulfilled without undue sacrifice to either.
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The individual keeps his identity within the organization but at the same
time he respects the organization's need for co-ordination.
The objectives set for the managers are useful when the interest of both the
manager and the company are taken into account. For the company,
objective should measure performance in terms of contribution to profits and
other significant goals. For the managers, objectives must be such that they
can be understood by the manager, and they are attainable within the
authority he exercises.
If an individual is a member of the organization, he will benefit from the
efforts of the organization and the organization will benefit from his efforts.
The majority of successful organizations are due to the existence of
individuals and organizational objectives that are compatible.
PERFORMANCE OBJECTIVE
Performance objective is a statement describing the conditions that will exist
when a job is. being done. The statement includes measures to determine
clearly the extent to which the objective is to be achieved. An example of an
objective is "scrap loss will not be more than 4% of the total value of the
material used". How well this objective is being achieved determines how
well a manager is doing.
Performance objective programmes must be designed in such a way that
they can easily be adaptable to changing conditions.
One important aspect of performance objective is that it has a clear
relationship witti the company goals. Some of the concepts which are of
significance for the manager and the company as well, and which should be
incorporated in the objectives are: savings, costs, profits, sales, etc.
TYPES OF OBJECTIVES
1. DIRECT OBJECTIVES: These are the objectives which pertain to tasks
in which performance can be measured directly and quantitatively.
These are measured in terms of results. Managers' performance in
respect of quality and quantity of output, which can be measured
directly are dealt with in this category. Examples of this category are
reduction of cost, improvement in sales and profits, and increase in
turnover.
2. INDIRECT OBJECTIVES: These objectives pertain to the characteristics
of the manager himself. These are related to his technical or
administrative skills, his personal traits and behavior. Indirect
objectives include his attitudes, his motivation, his leadership qualities,
his health and his stamina. These are the qualities which are not
possible to measure although, they are of important consideration
while setting the objectives for an organization.
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CHAPTER TWO
CONCEPT OF ORGANIZATIONAL THEORY
Two concepts emanate from here. These are: (l)Organization and (2)Theory.
THEORY
A theory is a proposition that seeks to explain or predict something. In our
situation, the thing that we seek to explain or predict is how groups and
individuals behave in different organizational arrangements. The theories of
organizational behavior allow managers to understand and accurately
diagnose work situations in order to pin point where corrective actions may
be needed. Managers have interest in theories in order to be able to give
reasons to explain the why in human behavior particularly in the
organizational settings. Without theoretical concept, managers would be left
with their experiences and without the systematic method by which the
experiences can be related, their values would decrease considerably.
One of the major advantages of studying and practicing theory is that it .. trains the mind to think in an abstract and analytical fashion. In other words,
the manager who can abstract, who can learn and reason has an advantage
over one who must inefficiently experience every principal of organizational
behavior, before it is learned and accepted. Most analysts of the origin of
organizational theory view the beginning of the factory system in Great
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Britain in the 18th century as the birth point of Complex Economics
Organization and consequently the beginning of the field of Organizational
Theory.
The belief of early management theory abstract how organizations work or
should work with a direct reflection of societal valuables of that time. At that
time, workers were not viewed as individuals but as interchangeable parts in
an industrial machine, whose parts were made of flesh only when it was
impractical to make them of steel.
Managers frequently examine theory, examine history to learn about the
present to find new ways of addressing the future. In all organizations
around the world, the past is a variable source of ideas and warnings that
can help managers understand and cope with the expected and unexpected,
the simple and the complex and by reviewing lessons from the past
managers can be patterns and turning points that help them anticipate and
meet the challenges of the future.
Through the years, researchers and managers have offered a variety of
theories to explain and illustrate effective management. But these
philosophies did not evolve in a vacuum. Each was built and the foundation
laid by previous theories and developed without the framework of forces that
help shape management thinking at that time. Despite the years of study,
no single universally accepted theory of management exists today. However,
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the pioneers of management thoughts have proposed ideas that offer
valuable solutions to improving managerial practice.
The theories and concepts of organizational behavior allow managers to
understand and accurately diagnose work situations in order to pinpoint
where corrective actions may be needed.
One may learn about applying management theory to study the methods,
results of successful managers but keeping in mind that what works in one
situation may not work in another. Managers most constantly evaluate
theories and techniques to see which one suite their particular organization
and situation ..
ORGANIZATION
According to Hodge and Anthony, "an organization can be thought of as a
group of two or more people working co-operatively toward a common
objective or set of objectives". It is in their view a social system of co-
operation that is designed to enhance individual and group effort aimed at
goal accomplishment.
According to Edgar Schein, "an organization is the rational co-ordination of
the activities of a number of people for the achievement of some common
explicit purpose or goal, through division of labour and function, and through
a hierarchy of authority and responsibility".
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Gibson et al defines organizations as devices for pooling and harnessing
talent and ability together into an effective whole that can achieve for them
some desired objectives.
Therefore, we can define an organization as a group of people working
together to achieve a special purpose which cannot be achieved by an
individual working alone.
The above definitions show that the primary goal and purpose of an
organization is to bring individual talents and abilities together and combine
them so that each person could accomplish more results than is possible if
he or she were working alone.
CHARACTERISTICS OF ORGANIZATIONS
The main characteristics that are common to all types of organization are as
follows:
1. Input-Output process: In every organization, inputs or resources are
obtained from external environment and turned into outputs which are
sent back to the external environment. Economists refer to this inputs
as factors of production which include land, labour, capital and
- entrepreneur. The outputs are the goods and services which are made
available to members of the public or even organizational members.
2. Purpose or objective: Every organization tries to accomplish a purpose
or objective or goal which regulates the activities of its members.
Goals do not only serve as a common bond for the unification of the
efforts and activities of an organization's members, but also, goals are
a means for measuring the organization's performance or benefits to
its members.
3. Task or activity: All organizations carry out a major task of one kind or
another which relates to and is directed towards the realization of their
missions" or objectives. For example, the primary task of a bank is to
provide financial intermediation.
4. Hierarchical structure of authority and responsibility: In most of the
organizations, authority and responsibilities are defined by a hierarchy
of ranks "and positions
5. Division of labour: Division of labour means that each member of an
organization is given a fraction of the task of the organization to
perform. This gives room for specialization which helps to increase
individual output and overall organizational efficiency.
TYPES OF ORGANIZATIONS
1. Production Organizations: Production organizations engage in
production of goods and services for society. Examples are
manufacturing companies, banks, insurance companies, mining
industries, etc.
2. Political Organizations: These are organizations that co-ordinate, .
control and ensure that the society at large achieves its objectives.
Examples are government establishments.
3. Pattern Maintenance Organizations: These are organizations that
socialize or prepare people for their roles in other organizations and
the society at large. They perform educational, religious and cultural
activities. Examples are institutions, religious organizations, family,etc.
4. Inteqrattve Organizations: These are organizations that resolve or
settle conflict and ensure that the various parts of the society fit
together well. E.g. the Judiciary
ORGANIZATIONAL THEORY
Now that we know what a theory is and what an organization is, what then
is Organizational Theory?
According to Hodge and Anthony, organizational theory can be defined as "a
group of related concepts, principles and tested hypothesis that is used to
explain the components of organizations and how they behave",
According to D.S. Pugh, organizational theory is defined as "the body of laws
and empirically tested and proven conclusions which establish relationships
between the structure, functioning and performance of organizations and the
behavior of groups and individuals within them".
FUNCTIONS OF MANAGEMENT AND ORGANIZATIONAL
THEORY
1. Description: This means telling what the nature of something is, e.g.
featuring the nature of the factors involved in the process of decision-
making.
2. Explanation: This means giving the details of the causes of some event
or activity. For instance, giving the details of the factors that cause the
productivity of an employee to increase or reduce.
3. Prediction: This means foretelling the probability of various outcomes
of an event, activity or a decision, based on our knowledge of the
relationship among variable.
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CHAPTER THREE
CLASSICAL ORGANIZATIONAL THEORY
Classical theory of organization holds that an individual is motivated almost
solely by financial incentives. It emphasizes on economics, man, rationality
and specialization.
Classical theory has been developed under 3 streams: (1) Bureaucratic
model/theory, (2) Administrative theory and (3) Scientific Management
theory.
BUREAUCRATIC THEORY/MODEL
The father of this school of thought is Max Weber.
Bureaucracy is an administrative system, especially in a government, that
divides work into specific categories carried out by special departments of
nonelected officials.
According to Max Weber, Bureaucracy is "an administrative system which is
organized rationally, logically, impersonally and according to official rules as
a means of carrvlnq out imperative control over human beings".
Scientifically, bureaucracy denotes "an integrated hierarchy of specialized
offices defined by systematic rules i.e. an impersonal routinized structure
wherein legitimatized authority rests in the office and not in the person of
the incumbent"
According to Max Weber, bureaucracy, which is an administrative
organization that rests on a belief in the legality of patterns of normative
rules and the rights of those elevated to authority' under such rules,
represents the most technically superior means for attaining the highest
degree of organizational efficiency and output.
Bureaucracy is found everywhere in government business, military, political
or religious or. any other organization grown too big for work by personal
contact.
CHARACTERISTICS OF A BUREAUCRATIC ORGANIZATION
1. There is ·a security of office tenure for officials, i.e. they cannot just be
removed arbitrarily.
2. There is a clear structure of career with promotions carried out
according to seniority or achievement or both.
3. Officials of the organization organized in a clearly defined hierarchy of
positions from top to bottom, meaning that, each lower office is under
the control of a higher one.
4. Each official of the organization has a level of authority and
responsibilities/duties.
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5. All the officials are remunerated with salaries and pension entitlements
which are graded according to their ranks in the hierarchy.
6. No official has a right of ownership to any part of the organization or
the means of administration.
7. Every official obeys orders of superior officers, not because of the
influence of individual personalities, but because of the hierarchical
and superior nature of the positions.
ADVANTAGES OF BUREAUCRACY
1. The hierarchical nature of authority makes effective co-ordination of
activities possible.
2. Specialization is encourages and this helps to increase productivity and
efficiency .
3. There is neither favouritism nor discrimination since duties are
performed according to laid down rules.
DISADVANTAGES OR SHORTCOMINGS OF BUREAUCRACY
1. There is' organizational inflexibility and structural rigidity since
bureaucracy does not adapt to changes and new ideas.
2. Bureaucracy does not encourage personal initiative because it -
emphasizes strict conformity to standard rules and procedures.
3. There is an increase in the cost of administration because of excessive
paperwork, form filling and documentation of affairs.
MAJOR MODIFICATIONS TO BUREAUCRACY
1. Management should make use of committees to make decisions and
solve problems that cut across two or more departments. This will
reduce the effect of excessive hierarchy, centralization,
compartmentalization and specialization.
2. They can design jobs in such a manner as to minimize the problems of
extreme specialization, extreme rigidity, etc. This will help to prevent
job monotony and improve interpersonal relations among
organizational members.
3. Management should ensure that the allocation of authority is
commensurate with responsibility. This will help to avoid
overdependence on rules.
CONTRIBUTION OF MAX WEBER TO ORGANIZATIONAL THEORY
Weber explained how organizations can ensure continuity and co-ordination
of their operations. To him, organizations are coordinated when there is a
system of administration based on hierarchy of authority, division of labour,
standard procedures, impersonal rules, use of merit in personnel recruitment
and selection which enables an organization to be staffed by qualified people
rather than privileged ones, and security of office tenure for workers.
THE ADMINISTRATIVE APPROACH
The administrative approach was pioneered by Henri Fayol (1841 - 1925).
According to Henri Fayol, management comprised of the following activities:
1. Forecasting and Planning: This means examining the future and
drawing up a plan of action.
2. Organizing': This means building up the structure of an organization.
3. Directing: This means maintaining activity among organizational
members.
4. Coordinating: This means unifying and harmonizing all activity and
effort.
5. Controlling: This means ensuring that everything done in the
organization is in conformity with the established plan.
According to Fayol, to effectively perform the above activities, the following
principles and rules must be observed:
1. Division of labour: This means that employees should be grouped into
divisions, departments and each group should have a separate work to
do.
2. Parity of authority and responsibility: This means that a manager's
responsibility should be commensurate with his/her authority. This is
also called the principle of correspondence
3. Discipline: Everyone should be disciplined enough to obey and respect
the rules and objectives of the organization.
4. Unity of command: This means that an employee has to receive order
from only one superior and then report back to the same superior in
order to avoid conflicts and confusion.
5. Unit of direction: This means that organizational members should work
towards the same objective.
6. Fair remuneration: Management and employees should receive a pay
that is fair and satisfactory.
7. Scalar chain: This means that there should be clear and unbroken lines
of authority from the top of the organization to the bottom with the
chains of command represented in an organization chart.
8. Centralization and decentralization: This means that in the
organization, strategic decisions should be centralized while
operational decisions should be delegated.
9. Order: This means that the right man should be appointed to the right
position while materials should be in the right place at the right time.
Equity: This means that there is need for fairness and justice in
an organization so as to encourage loyalty and good work.
Stability in tenure: This means that employees should be
guaranteed job security.
10.
11.
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12. Initiative: This means that employees should be encouraged to
also use their personal initiatives and creative abilities and then get
rewarded for these.
13. Esprit de corps: This means that the management should impact
in his employees a spirit of co-operation, unity and teamwork.
14. Subordination of individual interest to general interest: This
means that the interest and goals of the organization should be
superior to those of the workers.
CONTRIBUTIONS OF HENRI FAYOL TO MANAGE
Henri Fayol explained the importance of rewarding workers and encouraging
their hard work. Also according to him, good managerial practice must be
based on a suitable organizational structure and efficient staffing, planning,
directing, communicating, co-ordinating and controlling.
LYNDAL URWICK
The administrative approach which was pioneered by Henri Fayol has been
majorly contributed to by Lyndal Urwick. According to Urwick, the principles
for building an effective organization are:
1. Definition: This means that there should be a clear specification in
writing, of authority and responsibility.
2. Objectives: This means that the objectives of the organization must be
clearly defined.
3. Specialization: This means that each group of employees in the
organization should perform separate duties.
4. Chains of command: This means that there should be a clear line of
authority from the top to the bottom.
5. Span of control: This means that there should be limitation to the
number of subordinates under a superior, i.e. four to six should be the
optimum number.
6. Primary task: This means that the line functions should be separate
from the advisory staff functions.
7. Co-ordination: This means that the efforts of employees should be
unified.
8. Communication: This means that there should be a limitation to the
number of levels of authority in the organization hierarchy to ease flow
of communication.
9. Exception: Management should only be concerned with non-routine
decision-making and should only be notified' when results are
remarkably off target.
10. Responsibility: This means that the superior assumes absolute
responsibility for the acts of his subordinates. So, it is authority that
can be delegated, not responsibility.
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11. Flexibility: This means that the organization should be able to
adjust to changes.
12. Simplicity: This means that the organization should stay simple
in order to remain effective.
THE SCIENTIFIC MANAGEMENT APPROACH
Scientific Management Theory was pioneered by Frederick Winslow Taylor
(1856 - 1915)
F.W. Taylor spent the greater part of his life working on the problems of
achieving greater efficiency on the shop-floor. It was against this
background that Taylor developed his ideas. He was passionately interested
in the efficiency of working methods. At an early stage he realized that the
key to such problems lay in the systematic analysis of work. Experience had
convinced Taylor that few workers put more than minimal efforts into the
daily work.
Taylor observed antagonism between the workers and the management, as
well as low output and a general inefficiency in the company where he
worked. To Taylor, the problems were caused by:
1. The belief of workers that there salaries remain the same regardless
of whether they work harder or not. i.e. harder work does not
guarantee higher pay.
2. Natural soldering: This means natural restriction of output. Workers
don't want to overwork themselves to increase output because
increasing output may even lead to loss of their job when the
management has excess output to sell.
3. Systematic soldering: This means deliberate slowing down of work.
Workers tend to refrain from working harder than their colleagues
with whom they receive the same pay.
According to Taylor, the above problems could be solved if the principles of
science are applied to the study management.
THE PRINCIPLES OF SCIENTIFIC MANAGEMENT
By science, Taylor meant systematic observation and measurement. The
principles of scientific management constitute the cardinal responsibilities of
management, which are:
1. The development of a true science, that is, the systematic observation,
study and recording of work processes and the skills required to do a
job so as to discover the one best or most efficient method of
performing the work.
2. The scientific selection of workforces in order to ensure that workers
are employed on the kind of work for which they are best fitted.
3. The progressive development and training of workers to do the job in
the best cost saving way.
4. The appointment of a supervisor who will oversee the way the work is
done and direct the workers and ensure that they do their work in
accordance with the principles of science.
5. The paying of workers on the basis of the output only thus ensuring
that higher work guarantees higher pay.
ASSUMPTIONS OF SCIENTIFIC MANAGEMENT THEORY
1. That there will be greater output if the ordinary principles of science
are applied to work and organizational problem.
2. That the good worker accepts orders but does not initiate actions.
3. That workers are economically rational and are working to maximize
their financial incomes and not to satisfy their social needs while at
work.
CONTRIBUTIONS OF F.W.TAYLOR TO MANAGEMENT AND
ORGANIZATIONAL THEORY
1. F.W. Taylor introduced personnel management techniques such as
employee selection tests, job evaluation, job analysis and performance
appraisal.
2. Taylor laid emphasis on management's responsibility for planning what
to do and how to do it in an organization
SHORTCOMINGS OF SCIENTIFIC MANAGEMENT
1. Scientific management neglects the emotional nature of man, making
an employee a mere order taker, forgetting that human beings are not
like inanimate objects.
2. It has a" wrong assumption that man works purely to make money,
that money was the prime motivator of a worker.
3. It restricts planning and controlling to management only, that
employees are just to dance to their tune.
OTHER CONTRIBUTORS TO SCIENTIFIC MANAGEMENT
HENRY L. GANTT (1861 - 1919)
Henry Gantt made many improvements in production planning and control.
He is mainly remembered for the production control chart, known as Gantt
Chart or Bar Chart.
Gantt also introduced the concept of task-and-bonus system which a direct
replacement of Taylor's piece-rate system. Gantt, by this system, meant
that a worker should be paid a bonus if he produces to a specified target.
FRANK B. GILBRETH AND LILIAN M.GILBRETH_ (1868 - 1925)
Frank Bunker Gilbreth did work with his wife, Lilian, regarding modern
management. They analyzed human work motion systematically in order to
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discover the most efficient way of performing it and thus reduce work
fatigue and increase labour productivity.
HARRINGTON EMERSON
Harrington developed The Twelve Principles of Efficiency in 1911 which,
according to him, are the basis of correct and highly productive
organizations. The principles are:
1. Clear objectives
2. Common sense
3. Competent counsel
4. Discipline.
5. Justice and fairlay
6. Adequate and reliable records
7. Proper routing
8. Standardized operations
9. Work standards and schedules
10. Standardized conditions
11. Written standard practice instructions
12. Reward for efficiency
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MORRIS COOKE
According to Morris Cooke, all employees should be involved in finding the
one best method of doing a job. His modification to Taylor's work is that for
Taylor, finding the one best way of doing a job should be the responsibility
of specialists i.e. management.
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CHAPTER FOUR
NEO-CLASSICAL THEORY OR BEHAVIOURAL MANAGEMENT
PERSPECTIVE
The Neo-classical theory focuses on the individual and adds the
psychological and social aspects of the individual into organization design.
Neo-classical theory is developed by human relations movement and is built
upon the classical theory by giving due consideration to psychological and
social needs of individual and work groups.
The Neo-classical theory is also known as the behavioural-humanistic
management theory. The original exponents of this theory of organization
and management are: (1) Elton Mayo, (2) Roethlisberger and (3) Dickson.
HUMAN RELATIONS MOVEMENT
The human relations school or movement which started with the famous
Hawthorne studies talks about humanizing the work organization. It
recognizes the importance of the formal organization which will always be
present within the formal structure.
Informal within the formal
In the mid 1920s, a series of studies/experiments was initiated in the
Hawthorne, Illinois plants of the Western Electric Company. Elton Mayo
(1880 - 1949) and his colleagues - Roethlisberger and Dickson - at the
Western Electric Company wanted to study the effect of the physical work
environment on worker productivity and they actually studied that. In effect,
they were carrying on the tradition started by Freder.ick Taylor and his
followers by systematically trying to improve worker efficiency. There were
four (4) phases to the Hawthorne experiments:
1. The first phase covers the Illumination experiment.
2. The second phase covers the Relay Assembly Test Room Experiment
3. The third phase covers the Interviewing Programme
4. The fourth phase covers the Bank Wiring Observation Room
Studies/Experiment
.:. ILLUMINATION EXPERIMENT
The first major experiment of Hawthorne investigated the effects of different
levels of lighting on productivity. The researchers systematically manipulated
the lighting of the area in which a group of women worked. They found out
that inspite of the manipulation, productivity continued to increase, that is,
when the lighting was increased, the people produced at a higher rate, when
the lighting was decreased, the people still produced at higher rate. When
the lighting was turned off to see whether it will have effect on the people,
the people still produced at higher rate. They then concluded that variables
other than illumination were responsible for the increase in productivity.
.:. THE RELAY ASSEMBLY TEST ROOM EXPERIMENT
In that experiment, 6 women workers were transferred from their normal
departments to a separate area. The women were involved in assembling
Telephone relays by putting together a number of small parts. In order to
obtain more control over the factors affecting work performance, the
researchers isolated this group of workers from their regular work and began
to study them. At first, they introduced rest breaks to see what effect the
break would have on their productivity. As productivity increased, the
researchers believed that these work pauses/work break were reducing
fatigue and thereby improving output. Shorter work days were instituted and
outputs again were up. However, when the original working
conditions/periods were restored, output still remained high. This proved
that the change in physical condition or the introduction of rest breaks or
work pauses could not have been the only reasons for the increase in
output. So they were still not satisfied and went to the third face. /
.:. THE INTERVIEWING PROGRAMME
In an attempt to find out more about the workers' feelings towards their
general conditions of work and their supervisors, a large interviewing
programme was introduced. Over 20,000 interviews were conducted among
a large number of workers in which the interviewers were primarily
35
interested in gathering information about the effect of supervision on work
environment. The result was a wealth of information about employees'
attitudes. The researchers realized that an individual's position and status in
the organization were determined by both the person and the group
members .
• :. THE BANK WIRING OBSERVATON ROOM STUDIES/EXPERIMENT
The fourth experiment involved the observation of a group of 14 men
working in the Bank Wiring Room. The workers were wiring and soldering
bank terminals. It was noted that the men formed their own informal
organization with sub-groups or cliques. The group developed its own
pattern of a formal social relations and norms of what constituted proper
behavior. Despite a financial incentive scheme where the workers could
receive some money for more work performed, the group decided on a level
of output well below the level they were capable of producing. Group
pressures on individual worker were noted as being stronger than financial
incentives offered by management.
The main conclusions to be drawn from the Hawthorne studies:
1. Individual workers cannot be treated in isolation but must be seen as
members of a group. This can be seen in the 4th phase.
2. The need to belong to a group and have status within it is more
important than monetary incentive.
3. Informal groups at work exercise a strong influence over the behavior
of workers.
4. Supervisors and managers need to be aware of employees' social -
needs and cater for them.
5. Attitudes towards work are strongly influenced by the group since
work is frequently a group activity.
We would conclusively say that the Hawthorne studies provided the
foundation for an entirely new approach to management known as the
Human Relations Movement. The basic premises underlying this movement
were:
1. That people respond primarily to their social environment.
2. That motivation depends more on social needs than on economic
needs and that satisfied workers work harder than unsatisfied
employees.
SHORTCOMINGS OF THE HUMAN RELATIONS APPROACH
1. It over-emphasized emotional and social needs, thus making it another
single factor explanation of human behavior.
2. The approach is only selectively applicable. For instance, it is not
applicable in military and prison establishments where the nature of
the command system requires authoritarian practices.
3. The approach contains a pro-management bias and a strong moral
undertone because it contains ideas which were put forward on how to
eliminate conflict and manipulate the worker to work harder.
THE NEO-HUMAN RELATIONS OR HUMAN RESOURCES
APPROACH
The human resources or neo-human relations was pioneered by Abraham
Maslow, McGregor, Likert, Herzberg and Argyris. This approach centres on
the notion that people's needs from organization and work are more than
economic reward, job security, human treatment and physical and social
needs. According to the approach, employees have a creative ability, a
capacity for imagination and other natural potentialities or resources which
they want to make use of in order to achieve self-fulfillment, recognition and
happiness.
ABRAHAM MASLOW
In 1954, Abraham Maslow discovered what actually motivates workers in an
organization fo work. He pointed out that motivation depends on the
realization of needs. If the needs and desires of the workers are identified
and met, he would be motivated to work. He however stated that the needs
are of hierarchy and priority and he classifies them into five levels.
According to Maslow, needs have a sequence of domination. Unless and until
the needs of the lower level are reasonably satisfied, those of the higher
order do not dominate. Only the needs not yet satisfied can influence -
behavior. The needs can be arranged in an ascending order as follows:
1. Physiological needs: These include food, clothing, shelter, sex and a
fair temperature.
2. Safety and security needs: i.e. Protection against harm, danger,
threats, fear and deprivation
3. Belonging and social needs: i.e. The need for atfectlon, to love and be
loved, to associate with others, to belong and be accepted by fellow
human beings.
4. Self esteem or ego needs: The desire for status, prestige, recognition,
appreciation and respect from fellow human beings and personal
satisfaction from one's achievements.
5. Self actualization/fulfillment needs: i.e. The need to fulfill one's
potential, to use one's creative talents to the highest limit, to achieve
one's ambition.
According to Maslow, unless we satisfy the lower or primary needs, the
higher order needs do not have much impact but as soon as we satisfy the
lower or primary needs, the next need in rank after that emerges and
demands satisfaction, and so on.
According to Maslow, man's needs determine his behavior and personality
which is controlled by the brain. A reasonable pay is not usually adequate to
motivate an employee.
CRITICISMS OF MASLOW'S THEORY
1. Maslow affirmed that unless one need is satisfied, another higher need
will not be attended to. In real life situation, this is not realistic
because a rational being will choose safety instead of satisfying hunger
in an insecure environment.
2. Abraham Maslow averred that a time will come when majority of the
people in the society will be yearning for self esteem and self
actualization needs. This goes to mean that the basic needs of the
society in terms of food, clothing and shelter would have been
guaranteed, whereas, when Abraham Maslow was researching his
theory, he did it in an ideal society of Europe and America where
government caters for the basic needs of its citizens. In the third world
i.e. developing countries this is not so
DOUGLAS McGREGOR (THEORY X AND Y)
Douglas McGregor (1960) differentiated between two styles of leadership or
management. This he called Theory X and Theory Y.
40
Theory X consists of assumptions of the traditional (classical) management
view which emphasizes the need for strict managerial direction and control
of employees. It assumes that people are naturally lazy and that they do not
want to work. According to this view, people want only security, are
naturally not ambitious and will avoid responsibility if they can. For these
reasons, workers must be coerced, controlled, directed and constantly
supervised and threatened with punishment, otherwise, they will not carry
out their tasks.
McGregor challenged Theory X. according to him, the assumptions of theory
X appear inadequate and ineffective for the full utilization of human
potentialities. The alternative which he offered is called Theory Y and is an
optimistic view of human nature.
Theory Y assumes that man is not as lazy as theory X suggests and that
work to man is as natural as play or enjoyment but the difficult thing is the
unfavourable working conditions in which man finds himself. According to
Theory Y, people have a capacity to be highly imaginative and creative, and
if people are treated like adults and allowed to use their imaginations and
creativity to exercise control over their activities without being subjected to
excessive external controls, it will satisfy their ego and social needs as well
, as their bread and butter requirements and they will be willing to work.
To implement Theory Y, McGregor stated that management should arrange
organizational conditions and methods of operation in a way which would
enable people to achieve their own objectives best by directing their efforts
toward organizational objectives. According to McGregor, the increase in
productivity will be greatest if, in achieving the firm's goals, workers are also
achieving their own.
FREDERICK HERZBERG (The 'two factor' theory)
Frederick Herzberg, in his two factor theory stated that job satisfaction and
job dissatisfaction are produced by separate sets of factors. These two sets
of factors are:. (1) hygiene or maintenance factors; and (2) 'motivators' or
'satisfiers'.
By hygiene or maintenance factors, Herzberg meant such factors as physical
working conditions, company policy and administration, interpersonal
relations, supervision and salary. If these factors are not present in a job,
there will be job dissatisfaction. However, their presence does not mean that
there will be job satisfaction. This is because job satisfaction is caused by a
separate set of factors which relate to the nature of the job itself.
According to Herzberg, 'motivators' or 'satisfiers' include achievement,
recognition, the work itself, responsibility and opportunity for advancement
and growth on the job.
To make the motivators to be effective, there must be a reasonable amount
of the hygiene or maintenance factors in an organization.
CHRIS ARGYRIS (Impact of Formal Organization upon individual)
Chris Argyris' contribution to organization theory was his analysis of the
impact of the formal organization upon the individual. According to Chris,
there is an inherent conflict between the demands of a formal organization
and the nature and needs of psychologically healthy or mature persons
working within them. As people grow older or more mature, they tend to
become more active, more independent and seek to grow and find
expression for their creative and psychological energy. However, in its drive
to maximize efficiency and achieve its objectives, a typical formal
organization develops a structure based on the principles of task
specialization, chain of command, unity of direction, and rigid rules and
regulations. These principles demand that the worker shall be dependent,
passive and subordinate towards his superior.
The formal organization frustrates the individual by reducing the chances of
realizing his needs for independence, growth, creativity and self-expression
especially at the lowest levels of organizational hierarchies where individual
autonomy and responsibility are least. When people become frustrated in
this way, they may seek to adjust themselves by working hard to get to a
high position where conditions are less frustrating.
If the prospects of advancement are slim, the frustrated individual may
resign his appointment with the organization or start to frequently absent
himself from workplace or become apathetic and aggressive or loose interest
in his work or attempt to get 'even' with management by restricting output
or slowing down work. According to Argyris, these methods of adjustment or
adaptation are- sanctioned and perpetuated by informal work groups. In fact,
the informal organization for restriction of output develops as a mechanism
for resolving this inherent conflict between the demands of the formal
organization and the needs of psychologically healthy or mature person.
To correct this situation, Argyris recommends:
1. Increased employee participation in management in order to
accommodate the personal values of organization members in the
decisions that are made.
2. A flexible organizational structure that permits a two-way open
relationship between managers and their subordinates.
3. A horizontal and vertical loading of jobs in order to increase individual
motivation. Job enlargement or horizontal loading of jobs means
increasing the variety of tasks at the same level of complexity i.e.
allowing each employee to perform more varied tasks in the hope of
making the jobs less monotonous. This can lead to increased
productivity and it shows that division of labour doesn't necessarily
produce greater efficiency. Job enrichment or vertical loading of jobs
44
means adding jobs of a more complex, interesting, and challenging
nature. In other words, job enrichment seeks to increase the
employees' responsibility and recognition while it offers increased
opportunities for challenging work and for advancement and growth on
the job.
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CHAPTER FIVE
CONTEMPORARY MANAGEMENT PERSPECTIVE
Under the contemporary management perspective, we shall consider:
(1.) Contingency theory, (2) System theory and (3) Management by
Objective (MBO).
MBO has been discussed in chapter one.
CONTINGENCY THEORY
The basic thesis of the contingency or situational theory is that there is a
relationship between organization design and the task environment faced by
an organization and therefore, that certain types of organization design are
suitable for certain types of circumstances and task environments. In other
words, the task environment and circumstances in which an organization
functions determine the structure that the organization uses and the way its
activities are coordinated.
The major proponents of the task contingency theory are Tom Burns and
G.M. Stalker. Others are Fred Fiedler and Lawrence and Lorsch. The major
thesis of this theory is that the style of management and .organization design
depends on the situation or task environment in which an organization
46
- .
operates. According to Burns and Stalker, an organization can be described
as a continum from mechanistic to organic.
The task environment of an organization may be relatively stable and
unchanging or relatively dynamic, unstable and rapidly changing. A relatively
stable task environment is that in which product innovations evolve slowly,
where the needs and tastes of customers as well as government regulations
and competitors' actions are fairly stable and constant. Companies facing
these task environments do notplace emphasis on innovation and creativity
in organizational processes and management.
The most suitable organization structure or design for companies operating
in relatively stable and predictable environments is what Burns and Stalker
term mechanistic organization system. The characteristics of such
organizations are as follow:
1. A clear, hierarchical lines of authority and control
2. A strong emphasis on technical efficiency
3. Adherence to a chain of command
4. Elaborate rules and regulations and inflexible and standardized
procedures .
. 5. Specialization and compartmentalization of tasks.
Because of the relatively homogeneous predictable and unchanging nature of
the task environment, especially the technology and market conditions,
activities in a mechanistic organization tend to be programmed, specialized
and routinized while leadership tends to be directive, authoritarian and work
centred. Thus,·the classical form of organization is more effective here.
A relatively heterogeneous, unstable, and rapidly changing task environment
is that in which technology and government policies change quickly and
products and market conditions also change quite frequently because of
changes in customers' needs in terms of quality, quantity and competitive
activity.
The most suitable organization structure for companies operating in an
uncertain and rapidly changing task environment is what Burns and Stalker
termed organic or organismic organization system, that Is, a fluid or flexible
organization structure which enables the company to cope with unstable
market conditions and to adapt to changes. The characteristics of an
organismic structure are as follows:
1. Lines of authority are not clearly defined, rather, there is a network
structure of control, authority and communication.
2. A continual redefinition, modification or changing of individual tasks
and roles; jobs are not specialized and job contents change all the
time.
3. A decentralized decision-making system with subo.rdinates having the
power to make decisions and participate in management generally
48
.:
It should be noted that even within the same company, different
departments may face different environmental conditions. Thus, the task
contingency theory is not only applicable in managing and designing a
company as a whole, it is also applicable in managing the individual parts of
the organization. The structure of each department is determined by the
demands placed on such department by its external influences. Where the
tasks are routine and require uniform actions, it is appropriate to use a
mechanistic management structure with emphasis on close supervision and
tight control.
In departments where the tasks performed are less well defined and outside
influences are not predictable, it is more effective to use an organismic
management structure with emphasis on flexibility, greater decentralization
of responsibility and decision making and less hierarchical control. This is
typical of Research and Development department which is usually faced with
a pressure for new ideas and product innovations.
The above analysis shows that the task-contingency approach to
management is based on the notion that the correct solution to a
management problem is a function of its situational variables. The approach
emphasizes variations in the internal structures and functioning of
companies with each company having different goals and objectives and
therefore different working methods and relationships and different types of
people. It shows that there is no magical blueprint that is capable of
ensuring a company's success. Instead, the effectiveness of a company is
seen as a function of a correct match between the company's internal
structure and its operating environment, tasks, and conditions.
With respect to employee motivation, the basic idea of contingency theory is
that although workers may be desirous of self-actualization and participation
in management, not all employees are responsive to enriched job
opportunities and joint goal setting. The degree of self-direction and self-
control across all types of technological and structural characteristics differs
from individual to individual. Workers differ in their expectations because of
variations in individual personality characteristics and socio-cultural z:
backgrounds. Some people prefer easier and more routine work, others like
challenging jobs where abundant opportunities exist to use their own ideas.
The premise on which the contingency theory is based is that situations
dictate managerial action; that is, different situations call for different
approaches. No single way of solving problem is best for all situations. This
thinking challenges the concept of "universality" proposed by Fayol and
other classical writers who believed that managerial principles and practices
should be applied consistently in all situations.
Contingency theory is integrative, meshing the ideas and concepts of the
other schools of management thought. It applies the concepts drawn from
other disciplines to individual situations as it finds them appropriate.
Contingency theory focuses on identifying and understanding the forces that
shape an organization's task environment and on applying the management
. approach known to work best under those conditions.
THE SYSTEMS THEORY
The systems theory was developed from the writings of Chester Bernard
(1938), Norbert Weiner (1948), Ludwig Von Bertalanffy (1995), the
Structural-Functionalists particularly Talcott Parsons (1961) and
Organizational Social Psychologists particularly Katz and Kahn (1966).
The systems approach sees organization as systems. A system is a set of
interrelated parts such as the various departments of a firm which together
form a complete unit that performs a particular function. Each department is
a subsystem of the whole organization while each organization is a
subsystem of the whole society. Departments and individuals in an
organization are seen as interacting elements that are working together
interdependently. Each department or element of the whole system may in
turn comprise a sub-system with its own network of interrelated elements
i.e. the various sections and positions.
The overriding assumption of the systems approach is that any system (the
whole) is greater than the sum of its parts. In other words, the output of the
whole organization is more than the output of the constituent parts would be
if they were to function independently and individually. System theories are
based on the view that it is not appropriate to examine individual parts of
the organization. Instead, one should examine both formal and informal
relationships between and among subsystems within the organization in
order to explain the system as a totality. Thus, while the classical-
mechanistic school focused on the formal structure of the organization and
the behavioural-humanistic school emphasized social relationships, systems
theory suggests that it is significant to look at the interaction between the
parts of the organization and the relationship between the organization and
its environment.
Every system or subsystem is made up of people who interact and work ~
together. This is the organisation's human or social sub-system. The
employees perform tasks and produce goods using various techniques,
procedures, plant, equipment, layout, and work methods (all collectively
called technoloqy) within the organization's formal structure. This is the
organization's technical sub-system. When the objectives of the organization
are added to the structure, it becomes a socio-economic and technical
system. The way in which the firm's material and human resources are used
by management is the firm's organizational sub-system. Thus, the operation
and behavior of each system or subsystem are subject to social, economic,
technical and organizational variables. Changes can occur at anytime in one
or more of the firms sub-systems (for example the introduction of new
52
machinery or the creation of a new position) that will affect the other sub-
systems as well as the firm (or system) as a whole.
An organization is a closed system when only its internal environment is
considered. An organization is an open system when account is taken of the
internal environment and the influence of the external factors over which the
organization has no direct control (1).
A closed system does not receive inputs from its outside environment. In
addition, it does' not distribute any outputs to the outside environment. In
short, it does not interact with its external environment. Closed systems
rarely exist in real life.
In an open system, inputs are received from the external environment and
are processed by the system, the result of this resource energy conversion
activity being an output to the external environment. In short, an open
system maintains continuous information with its external environment.
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