1. Makerere University Business School
Strategic Management Course
MANAGEMENT THEORIES
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2. Introduction
• Earliest contributors
– Practicing managers
– Social scientists
• More recent theorists
– Academicians
– Management consultants
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3. Practicing managers
• Reflected on their experiences
• To produce rational principles for
– Universal application
– Efficiency improvement
• To structure work & organisations
• Did not concentrate on human motivation
• Classical / scientific
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4. Early Social Scientists
• Human behaviour at work
• Started with efficiency, looking at
• Physical conditions effect on employees
• Ended up in human factors at work
– Motivation, communication, leadership
• Called
– Human relations theorists or
– Social psychologists
Later social scientists
• Organisations as social systems
• Contingency theorists
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5. More recent theorists
• Strategic perspective
• Involve organisation factors:
– Vision, mission, culture, structure, values, external
environment e.t.c
• Build on previous theorists
• More inclined to contingency theories
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6. CLASSICAL MANAGEMENT THEORIES
Henri Fayol (1841 – 1925)
• French industrialist & theorist
• Mining engineer @ 19 years, MD @ 47
• Was practically successful in management
• Fayol’s definition of management by industrial
activities:
– Technical, commercial, Financial, Security, Accounting,
and managerial
• 1st
5 activity groups were taken care of
• Managerial activities required establishment of
principles
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7. Fayol’s Principles of management
• Division of work
• Authority
• Discipline
• Unity of command
• Individual interests sub-ordination
• Remuneration
• Centralisation
• Scalar chain
• Order
• Equity
• Tenure of office stability
• Harmony, and team work
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8. Comments on Fayol’s principles
• Emphasis on structural organisation nature –
bureaucracy
• Fairness, equity e.t.c were not consistent with
other main principles
• Not suited for rapid change
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9. Fredrick Winslow Taylor
• Looked at efficiency on shop floor
• Was a labourer, up to shop superintendent
• Developed scientific management
Background
• Came up after industrial revolution
• Dominant requirement was efficiency
• Need for systematic of work
• Workers only put in minimum effort
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10. Scientific management principles
• Work study analytical approach
• Steps
– Develop a science for each operation to replace opinion & “rule
of thumb”
– Determine best method & its timing
• Study a job from skilled workers
• Eliminate unnecessary actions
• Produce best method – standard
– Separate planning & controlling from actual “doing”
– Select & train workers
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11. Principles from Scientific management times
Frank & Lillian Gilbreths
• Gilbreths applied scientific management to brick
laying
• Used work study method to
• Reduce movements per brick from 18 to 5
• Current principles from scientific management -
Gilbreths
– Therbligs – basic elements of on-the-job-motions
– Process charting – process flow charts
Henry Gantt
• Was Taylor’s colleague
• Developed Gantt charts
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12. Comments on scientific management
Benefits
• Increased productivity
• Rational approach – applies measurement
• Incentive payments – based on results
Weaknesses
• Rigidity – reduced workers’ role
• Work fragmentation
• Taylor was over-optimistic on acceptance by both
employees and management
• Wages were determined scientifically - no social
considerations
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13. Bureaucracy – Max Weber (1864 – 1920)
• Common meaning
– Red-tape; excess rules, paper work leading to inefficiency
• Management theory meaning
– An organisational form with a system of rules and hierarchy of
authority
• Authority – acceptance of rule by those whom it is to be
exercised on.
• Authority types
– Traditional
– Charismatic
– Rational – legal
• According to Weber, bureaucracy was:
– The most rational means of controlling human beings
– Indispensable for large scale & complex organisations.
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14. Bureaucracy main features
• A continuous organisation of functions
bound by rules
• Specified spheres of competence
• A hierarchical arrangement of offices (jobs)
• Appointment based on technical
competence
• Separation of officials from ownership
• Formulated rules, decisions & actions
recorded in writing
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15. Bureaucracy weaknesses
• Rules tend to be more important than
efficiency
• Rigid behaviour
• Prevents search for alternatives because of
programmed decision making
• Damages relationships with clients and
workers
• Difficult for change and adaptation
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16. Human Relations and social psychological
schools
• These theorists were academics and social
scientists.
• They were concerned with the human factor at
work.
• This was contrary to the classical theorists, who
concentrated on work itself but not the worker
doing the job.
• They dealt with human motivation, group
relationship and leadership.
• A few motivation theories are mentioned here
after – broad topics (group behaviour and
leadership have been left out of this course).
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17. Early motivation theorists
• Human motivation
– Processes by which people seek to satisfy basic
drives, perceived needs and personal goals, which
trigger human behaviour.
• Early theorists concentrated on motivation
contents (e.g drives, needs) – content theories
• Didn’t focus on process
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18. Motivation basic model
Motivation has the following components
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Physical /
Emotional
Behaviour Satisfaction /
Frustration
OutcomeResponseStimulus

19. Elton Mayo
• Was an Australian psychologist
• A researcher in occupational aspects,
– E.g fatigue, accidents, labour turn-over
• Conducted studies for Western Electrics, Chicago, USA
(Hawthorne studies)
• Studies were on the worker rather than work
• Employees were subjected varying physical conditions
and they didn’t affect productivity
• Focus was shifted to social aspects and they related to
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20. Mayo’s conclusion
• “Man is a social animal”
• Individual workers cannot be treated in isolation
• Belonging to a group is more important than
monetary incentives and good physical conditions
• Informal groups strongly influence workers’
behaviour
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21. Abraham Maslow (1950 / 60s)
• Physiological needs: Need for food, sleep, sex, e.t.c.
• Safety needs: Stable environment relatively free from
threats
• Love needs: Group status, affectionate relations with
others
• Esteem needs:Self respect, self-confidence
• Self-actualisation: Self-fulfilment
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22. Maslow’s needs - continued
• That people tended to satisfy the above needs
systematically
• Main criticism on Maslow’s theory –
– Systematic movement up the hierarchy does not
seem to happen practically.
• Maslow’s theory, however, formed a framework
to analyse a variety of needs
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23. D McGregor – Theory X and Theory Y
• Managers’ assumptions about employees
Theory X
• That employees are lazy, require coercion and
control
• Avoid responsibility, seek security
• Similar to a rational economic man suggested
by Schein & Adam Smith)
• Strongly related to scientific management
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24. Theory Y
• Opposite of theory X
• That people like work
• They work as naturally as resting or playing
• They don’t have to be controlled coerced
– If committed to objectives
• They don’t only accept but seek responsibilities
• Similar to Maslow’s higher level needs and
Schein’s self-actualising man
• A blend of theory X & Y is more representative
of real life.
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25. Later Motivation theories
Theory Z – The Japanese approach
W. Ouchi
• American exponent of Japanese approach, with
• Attempts for western firms to adapt Japanese
style
• Based on success of Japanese manufacturing
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26. Japanese success
• Efficient use of resources, especially people
Strong personnel-related factors
• Mutual trust – employees and management
• Employees’ royalty to organisations
• Non-specialised career paths – job rotation
• Shared decision making
• Long term performance appraisal
• Collective responsibility
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27. Remarks on the approach
• Some Japanese features are not transferable to
west due to cultural issues
• The west needs to develop better the
employee factor, on top of technology
• Japanese engineering has “Taylorism” leading
to standard production controls but with
improved HR aspects.
Criticism
• Slow decision making
• Imprisoning lifetime employment
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28. SYSTEMS & CONTINGENCY
APPROACHES
Organisations as systems
• Organisations are set up as open social systems.
• A system is a collection of inter-related parts, which form
some whole.
• Examples of systems are: the human body, a
communication network, and a social system.
• A system can be open or closed.
• An open system obtains inputs from and discharges
outputs to its environment.
• A closed system is self-supporting
• Social systems, including all organisations as mentioned
above, are open systems.
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29. Characteristics of open systems
• They receive inputs or energy from the
environment
• They convert inputs into outputs
• They discharge outputs into the environment
• They are cyclic in nature.
• Exercise negative negative entropy.
• A stable system is self-adjusting to a steady
state. This is called negative feedback.
• Equifinality. Open systems do not have to
achieve their objectives in using one particular
method.
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30. Key variables in an organisation as a
system
• People – as individuals or groups
• Technology
• Organisation structures and
• Environment
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31. Model of an organisation as an open system
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People
Materials
e.t.c
Information
Finance
Production & Marketing
activities
Planning, organising &
control mechanisms
Research & Development
e.t.c
Products
Services
Ideas
Waste
INPUTS CONVERSION OUTPUTS
Feedback of information & results

32. Systems - continued
• A system consists of subsystems
• An organisation’s boundaries, which are often invisible,
are defined strategically by stating the scope of its
activities.
• Subsystems also have boundaries, which are called
interfaces.
• Some employees work at external boundaries in such
activities as:
– Capital raising, Purchasing and Customer interaction
• Internal boundary employees manage interfaces
• Some sub-systems tend to be relatively self-contained –
closed.
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33. Contingency approaches
• Contingency builds on systems approach
• It recognises organisations to consist of
interdependent components:
– External environment, Technology and Human skills
and motivation
• Contingency approach suggests that
organisations should look for the most
appropriate combination of structural design in a
given environment.
• Initially suggested by two American researchers
at Harvard called Lawrence and Lorsch (1967)
and several others shortly followed.
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34. Modern approach to management
• Current approaches to management are more of
management currently in practice than mere mare
management theory.
• Modern management background stems from
– Advances in technology, Increased competition and
expanding markets, especially from Asia,
– Increasing consumer expectations
– Improvements in communication,
– General globalisation making the world more inter-
connected than ever before.
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35. Strategic management approach
• Organisations to clearly state a vision and
mission,
• Formulation of organisation objectives
• External environment analysis
• Organisation (internal) analysis
• Strategic choice and strategic implementation
• Managing change in and around the organisation
• Developing and utilising new technology
• Developing and utilising skilled labour
• Creation of flexible structures but with relative
stability
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