TOPIC TWO: THE HISTORY OF MANAGEMENT

2.1. Learning objectives

By the end of this topic, the learners should be able to:

a) Describe the early influences on the development of the Management thought

b) Explain the effect of industrial revolution on management
c) Discuss the contributions of the scientific school of management
d) Explain the contribution of the Bureaucratic model to management
e) Describe the contributions of the administrative school of management
f) Discuss the human relations approach to management
g) Explain how employees can be motivated using the behavioural approach
h) Describe the modern approaches to management (systems and contingency approaches)

2.2.1 Early Influences

• Ancient records in China & Greece indicate the importance of organization &
administration, but do not give much insight into the principles of management.
• Outstanding scholars have referred to management activities in the running of city states &
empires. Egyptian Pyramids and the Great Wall of China are excellent examples of
managerial activities
• In the period 1400 to 1450, merchants in Venice, Italy, operated various types of business
organization, e.g. partnerships, trusts & holding companies.
• Control emerged in the form of a double-entry book-keeping system & related
documentation & records. Also, there was standardization of material & systems of
inventory control
• Adam Smith in his discussion titled Wealth of Nation (1776) put forward a brilliant
argument on the economic advantages of division of labour. He concluded that division of
labour increased productivity by increasing each worker‟s skills and dexterity, by saving time
on that is commonly lost in changing tasks

2.2.2 Contributions of Industrial Revolution

• This was characterized by the advent of machine power, mass production, and efficient
transportation.
• Large organizations developed and these would require formalized management practices.
These were not developed until early in the 1900s

2.2.3 Classical School of Management

This covers the period after 1900. Three schools of thought emerged i.e.
i. The scientific school of management
 ii. The Administrative School
iii. Bureaucratic approach
These comprise of practitioners and writers who sought to formulate rational principles that
would make organizations more efficient.

The Scientific school of Management

This theory focused on looking for “the one best way” to perform and manage tasks

Fredrick Winslow Taylor (1856-1915) is considered as the father of Scientific Management. He

exerted great influence on the development of management thought through his experiments
conducted in 3 companies- Midvale steel, Simonds Rolling Machine and Bethlehem Steel. He was an
engineer and an executive with a career spanning a period of 26 years

Principles of scientific management

1. Develop a science of work for each element of an individual‟s work, to replace the old rule of the
thumb methods

2. Scientifically select, Train, teach and develop the workers

3. Intimate friendly cooperation between the management and workers to ensure that the work is
done in accordance to the principles of science that has been developed.

4. Division of responsibility-divide work and responsibility almost equally between managers and
workers. Management takes over all work for which it is better fitted than the workers

Other contributors to the Scientific school of management

i) Frank and Lillian Gilbreth

They studied work arrangements to eliminate wasteful hand and body motions
They experimented with the design and use of the proper tools and equipment for
optimizing work performance. They carried out experiments in reducing the number of
motions in bricklaying

ii) Henry Gantt-

He sought to increase worker efficiency through scientific investigation. He devised an
incentive system that gave workers a bonus for completing their jobs in less time than the
allowed standard. He also developed a bar chart (Gantt chart) that could be used for by
managers for as a scheduling device for planning and controlling work
iii) Charles Babbage
He advocated division of labor and job specialization. He also promoted time studies
to establish performance standards and rewards for exceeding standards

Contributions of Scientific Management

 1. Time and motion studies-provided the foundations on which modern work study and
quantitative techniques could be based
2. Piece rate system- This led to improved productivity
3. Its rational approach to the organization of work enabled tasks and processes to be
measured with considerable degree of accuracy
4. Measurement of tasks and processes provided useful information on which to base
improvements in working methods, plant design etc
5. It stimulated managements into adopting a more positive role in leadership at the shop floor

Limitations of Scientific Management

1. Workers role was reduced to that of rigid adherence to methods and procedures over which
they had no discretion-(the one best way)
2. Led to fragmentation of work due to its emphasis on the analysis and organization of
individual tasks or operations-(deskilling of workers)
3. It generated a „carrot and stick‟ approach to the motivation of employees i.e. the use of
rewards and punishment as a means of getting the most out of employees. This boarders
manipulation and has been argued as being demeaning
4. It put the planning and control of workplace activities exclusively in the hands of the
management. Employees thus became mere executioners of what had been decided
elsewhere
5. Any realistic bargaining about wage rates was ruled out since every job was measured, timed
and rated scientifically

The Administrative School

The main proponent is Henri Fayol. While Taylor‟s focus was at the shop floor, Fayol‟s work
focused on the top management

He cited management as a universal set of activities namely: Planning, Organizing, Commanding,

Coordinating and Controlling

He developed 14 principles of management which were seen as universal truths that could be taught
in schools and universities

Fayol’s 14 Principles

1. Division of labour- This should be based on specialization. It increases efficiency

2. Authority- Managers must be able to give orders. Authority gives them the right.
Authority must be accompanied by responsibility

3. Discipline-Employees must obey the rules that govern the organization

4. Unity of command-Every employee should receive orders from only one superior
5. Unity of direction- Each group of organizational activities that have the same objective
should be directed by one manager using one plan

6. Subordination of individual interests to the general interest- Organizational interests takes

precedence over personal interests

7. Remuneration- Workers must be paid a fair wage for their services-Must be fair to both the
organization and the employees

8. Centralization-(Degree to which subordinates are involved in decision making) Find an

optimum degree of centralization in each situation

9. Scalar Chain/Chain of command-Refers to the line of authority from top management to lower
levels. Communication should follow this chain. Cross-communication can be allowed if
agreed upon by all parties and if superiors are informed

10. Order- People and materials should be in the right place at the right time

11. Equity-Managers should be kind and fair to their subordinates

12. Stability of tenure of personnel-High turnover of employees is ineffient. Replacements should

be available to fill vacancies

13. Initiative-Employees who are allowed to originate and carry out plans will exert high
levels of effort. It should be encouraged within the limits of discipline

14. Esprit de corps- Promoting team spirit will build harmony and unity within the
organization

Limitations of Fayol’s Work

1. The administrative management theory is management oriented. It does not give much
attention to the problems of workers.
2. The administrative management theory does not give importance to informal organization or
groups. It gives importance only to the formal organization structure
3. Some of the concepts of administrative management theory were borrowed from military
science. They tried to apply these concepts to the social and business organizations. For
Henri Fayol gave importance to “commanding” and not “directing” the workers.
4. The administrative management theory has a mechanical approach. It does not deal with
some of the important aspects of management such as motivation, communication and
leading.
Specialization leads to dissatisfaction of workers. One is not given a chance to exercise
all his skills/abilities.
The principles led to rigid structure that may not work well under unstable conditions.
 They are stated as unconditional statements of what ought to be done in all
circumstances while what is needed are conditional principles of management
Some of the principles are contradicting e.g. unity of command and specialization. These
may not be followed simultaneously.

Bureaucratic Approach

Max Weber was the proponent. His main concern was on authority structure. He described an ideal
type of organization that he described as Bureaucracy

Characteristics of Bureaucracy

1. Division of labour
2. Clearly defined hierarchy
3. Detailed rules and regulations
4. Impersonal relationships

Principles of Bureaucracy
1. Division of labour based on technical specialization
2. Authority hierarchy
3. Formal selection-based on technical competence
4. Formal rules and regulations
5. Impersonality-uniform application of rules, avoiding involvement with personalities and
personal preferences of employees
6. Rules, decisions and actions are formulated and recorded in writing
7. Separation of management and ownership-Managers are professional officials rather than
owners
Shortcomings of Bureaucracy
a) Rules originally designed to serve organizational efficiency have a tendency to become all
important in their own right.
b) Relationships between office holders or role are based on the rights and duties each role ,i.e.
they are depersonalized and this leads to rigid behaviour- Predictability
c) Decision making tends to be categorized, i.e. choices are previously programmed and this
discourages the search for further alternatives- (initiative and flexibility are stifled)
d) Rigidity which harms customer relations
e) Standardization and routine procedures make change and adaptation difficult when
circumstances change
f) Delayed decision making and buck passing –in instances where there are no rules,
employees are afraid to make decisions. They postpone them or shift decisions to others

2.2.4 Human Relations Movement

It deals with sciences of mankind and of behavior as individuals and in groups
It is also concerned with problems of fatigue and efficiency at work and problems relative to
selecting and training of employees

The main proponent was Elton Mayo

Hawthorne Studies
These studies were named for their site, at the Western Electric Company plant in
Hawthorne, Illinois. A series of experiments were conducted
1. Illumination Experiments
2. Relay Assembly Test Room
3. Interviewing Programme
4. Bank Wiring Test Room
5. Final stage

First stage-1924-1927- Effect of Varied illumination

This was the first phase of this study. The popular belief that productivity is positively
correlated with illumination was tested. Experiments were done on a group of workers.
Their productivity was measured at various levels of illumination. Productivity increased
even when lighting was very poor. This puzzled the executives who decided to call in Prof.
Elton Mayo
Stage two: 1927-1929- Relay Assembly Test Room
The aim was to determine the effect of differing physical conditions on productivity. These
included the length of the working day, rest pauses, their frequency and duration,
refreshments as well as other physical conditions. A group of six women workers was
selected for this experiment. During the study, several variations were made to the working
conditions to find which combination of conditions was most ideal. Against expectations,
productivity increased regardless of the changes. The women‟s reactions to the changes
(increased output regardless of whether conditions improved or worsened has come to be
known as the Hawthorne Effect. The women were responding not so much to the changes
as to the fact that they were the center of attention- a special group. The researchers then
attributed this phenomenon to the following factors:

a) Feeling of importance among the women as a result of their participation in the

research and the attention they got
b) Warm informality in the small group and tension free interpersonal and social relations
as a result of the relative freedom from strict supervision rules
c) High group cohesion among the women

Stage three-1928-1930- Interview programme

The knowledge about the informal group processes which was accidentally/unintentionally
acquired in the second stage made the researchers to design the third stage. The aim was to
ascertain the basic factors responsible for human behaviour at work i.e. employee attitudes
towards working conditions, their supervision and jobs. The researchers interviewed about
 20,000 workers. It was established that relationships with people were an important factor in
the attitudes of employees.

Stage 4-1932-Bank wiring observation room

This stage Involved 14 men working on terminal banks of telephone wiring assemblies. They
were removed to separate observation room for about 6 months with more or less the same
conditions like those in the main area. The aim was to determine the effect of informal
group norms and formal economic incentives on productivity. The group started developing
its own rules and behaviour-e.g. they would restrict their productivity (they developed their
own production norms for each individual worker, which were lower than those set by the
management. This defeated the incentive system)
The researchers observed that unofficial organization was developed and run in such a way
that it was able to protect itself from outside influences whilst controlling its internal life too.
Members of the informal group gave informal rankings to each other, which decided the
internal social structure of the group and its informal leaders

Stage 5-1936-Final stage

Focused on employee relations and took the form of employee counselling-these led to
improvements in personal adjustments, employee –supervisor and employee-management
relations
Contributions of the Human Relations Movement
1. An organization is not just a techno-economic system but also a social system. It is
important for an organization to provide social satisfaction to workers
2. There is no correlation between improved working conditions and high productivity
3. A worker‟s production norm is set and enforced by his group and not by the time and
motion study done by any industrial engineer. Those who deviate from the group
norms are penalized by their co-workers
4. An employee does not work for money only. Non financial rewards such as affection
and respect by co-workers also significantly affect his behaviour largely and limit the
effect of economic incentive plan
5. Employee centered, democratic and participative style of supervisory leadership is more
effective than task centered leadership
6. The informal group and not the individual is the dominant unit of analysis in
organizations

Limitations of the Human Relations Movement

1. Human relations writers saw only the human variables as critical and ignored other
variables
 2. The implicit belief of human relations approach that an organization can be turned
into one big happy family where it is always possible to find a solution that satisfies
everyone is incorrect. (several informal groups with diverse and at times incompatible
values and interests may exist within an organization)
3. Workers do not come to organizations to seek affection and affiliation as portrayed by
the human relations movement
4. In some situations, it is not possible to consult employees e.g. decision making in crisis
5. The approach is unrealistic in requiring that the superior to give up his/her desire for
power.
6. The assumption that satisfied workers are productive workers is not always correct

2.2.5 Behavioural Approach to Management

• They engaged in objective research on human behaviour in organizations. It is a more
advanced version of the Human Relations approach

• The main contributors are Abraham Maslow, Douglas McGregor, Rensis Likert, Chris
Argyris, George Homans etc.

• They consider organizations as groups of individuals with certain goals

• They propose that the realistic model of human motivation is the complex man

• This model suggests that different people react differently to the same situation or react the
same way to different situations

• Managers should tailor their attempts to influence people according to their needs

Maslows hierarchy of needs

The most popular theory of motivation is Maslow‟s Hierarchy of needs theory formulated in
1943. He based his theory in the following propositions
1. Man‟s needs are arranged in a hierarchy of importance ranging from the lowest needs -
physiological needs-to safety needs-love or social needs, esteem needs and to self actualization
needs.
This hierarchy of prepotency or urgency of satisfaction means that the most urgent
needs will monopolize an individual‟s attention while the least important needs are
minimized
Figure 1: Maslow’s hierarchy of need

Self actualization needs

Esteem needs

Social needs

Safety/security needs

Physiological needs

According to Maslow, an individual‟s motivation is a predetermined order of needs.

Physiological needs are the most basic. They are the most pressing needs. They are required in
order to sustain life.
Psychological needs for self actualization are required to satisfy the needs for achievement.
Most people strive to achieve some goal in life
2. Man is continually wanting and therefore all needs cannot be fully satisfied.
As soon as one need is satisfied, its prepotency or urgency diminishes and the next level emerges
to replace it. This never ending process motivates man to strive to satisfy his needs
3. Needs are interdependent and overlapping
One need does not disappear completely when another need emerges.
Physiological needs

These are basic needs required to sustain life. They have certain common characteristics

1. They are relatively independent to each other

2. They are identified with a specific location in the body e.g. an empty stomach makes a baby to
start crying
 3. In order to remain satisfied or reach saturation, they must be met repeatedly within relatively
short periods of time e.g. a person need for oxygen must be met at least 12 times per minute
4. It requires some conscious provisions for their future satisfaction

Safety needs

After physiological needs are relatively well satisfied, safety needs emerge to dominate man‟s
behaviour. Safety needs are expressed as desires to protection against danger, threat or
deprivation. Since every employee is partially dependent on his/her employer, safety needs
expressed as desires for security are important
Security needs take the form of quests for economic security like the operation of a savings
scheme, job tenure, provision of a stable pension scheme, health insurance, secure working
environment etc

Social needs

Need for belonging, association and acceptance by peers as well as giving and receiving love. Such
needs may lead to emergency of informal groups within the organization. Managers need not to
direct/control employee relationships in ways that frustrate natural grouping of the employees.
Doing so may lead to the employees being antagonistic and uncooperative or resistant

Esteem needs

Also known as ego needs. They do not become motivators until lower level needs are met. They are
rarely satisfied. Self esteem needs include self confidence, self respect, competence, achievement,
independence and freedom. Satisfaction of these needs lead to feelings of worth, capability, strength
and being useful and necessary in the work place. Frustration of these needs leads to feelings of
inferiority, weakness and helplessness. The need relating to esteem of others include the need for
status, recognition, appreciation, importance, prestige etc

Self actualization needs

This level of needs emerges after all needs have been satisfied. They include the realization of one‟s
potential, self fulfillment, continued self development and being creative. Satisfaction of these needs
result into a feeling of achievement, attainment and satisfaction
Douglas McGregor’s Theory X and Theory Y
McGregor formulated two sets of assumptions about human nature and referred to them as
theory X and theory Y. He was of the view that Managers create self-fulfilling prophesies.

– Theory X managers create situations where workers become dependent and reluctant.

– Theory Y managers create situations where workers respond with initiative and high
performance. This theory is central to notions of empowerment and self-management.
McGregor’s Theory X assumes that workers:

– Dislike work

– Lack ambition

– Are irresponsible

– Resist change

– Prefer to be led/ closely supervised

Theory X presents an essentially negative view of people
McGregor’s Theory Y assumes that workers are:

– Willing to work

– Capable of self control

– Willing to not only accept, but seek responsibility

– Imaginative and creative

– Capable of self-direction
Theory Y offers a positive view of workers and best captures the true nature of workers
Herzberg’s Two Factor Theory

The psychologist Fredrick Herzberg set out to determine the effect of attitude on motivation, by
asking people to describe situations where they felt really good, and really bad, about their jobs.
What he found was that people who felt good about their jobs gave very different responses from
the people who felt bad.

These results form the basis of Herzberg's Motivation-Hygiene Theory (sometimes known as
Herzberg's Two Factor Theory.) Published in his famous article "One More Time: How do You
Motivate Employees", the conclusions he drew were extraordinarily influential, and still form the
bedrock of good motivational practice

Herzberg's findings revealed that certain characteristics of a job are consistently related to job
satisfaction, while different factors are associated with job dissatisfaction. These are:

Factors for Satisfaction Factors for Dissatisfaction

Achievement Company Policies
Recognition Supervision
The work itself Relationship with Supervisor and Peers
Responsibility Work conditions
Advancement Salary
Growth Status
Security

The hygiene factors are extrinsic while the motivation factors are intrinsic

The conclusion he drew is that job satisfaction and job dissatisfaction are not opposites.

The opposite of Satisfaction is No Satisfaction.

The opposite of Dissatisfaction is No Dissatisfaction.

Remedying the causes of dissatisfaction will not create satisfaction. Nor will adding the factors of
job satisfaction eliminate job dissatisfaction. If you have a hostile work environment, giving
someone a promotion will not make him or her satisfied. If you create a healthy work environment
but do not provide members of your team with any of the satisfaction factors, the work they're
doing will still not be satisfying.

According to Herzberg, the factors leading to job satisfaction are "separate and distinct from those
that lead to job dissatisfaction." Therefore, if you set about eliminating dissatisfying job factors you
may create peace, but not necessarily enhance performance. This appeases your workforce instead of
actually motivating them to improve performance.

The characteristics associated with job dissatisfaction are called hygiene factors. When these have
been adequately addressed, people will not be dissatisfied nor will they be satisfied. If you want to
motivate your team, you then have to focus on satisfaction factors like achievement, recognition,
and responsibility.
Critisism of Herzberg’s theory

Despite its wide acceptance, Herzberg's theory has its detractors. Some say its methodology does
not address the notion that when things are going well people tend to look at the things they enjoy
about their job. When things are going badly, however, they tend to blame external factors.

Another common criticism is the fact that the theory assumes a strong correlation between job
satisfaction and productivity. Herzberg's methodology did not address this relationship; therefore
this assumption needs to be correct for his findings to have practical relevance.

To apply Herzberg's theory, you need to adopt a two stage process to motivate people. Firstly, you
need to eliminate the dissatisfactions they're experiencing and, secondly, you need to help them find
satisfaction.

Step One: Eliminate Job Dissatisfaction

Herzberg called the causes of dissatisfaction "hygiene factors". To get rid of them, you need to:

Fix poor and obstructive company policies.

Provide effective, supportive and non-intrusive supervision.
Create and support a culture of respect and dignity for all team members.
Ensure that wages are competitive.
Build job status by providing meaningful work for all positions.
Provide job security.

All of these actions help you eliminate job dissatisfaction in your organization. And there's no point
trying to motivate people until these issues are out of the way!

You can't stop there, though. Remember, just because someone is not dissatisfied, it doesn't mean
he or she is satisfied either. Now you have to turn your attention to building job satisfaction.

Step Two: Create Conditions for Job Satisfaction

To create satisfaction, Herzberg says you need to address the motivating factors associated with
work. He called this "job enrichment". His premise was that every job should be examined to
determine how it could be made better and more satisfying to the person doing the work. Things to
consider include:

Providing opportunities for achievement.

Recognizing workers' contributions.
Creating work that is rewarding and that matches the skills and abilities of the worker.
Giving as much responsibility to each team member as possible.
Providing opportunities to advance in the company through internal promotions.
Offering training and development opportunities, so that people can pursue the positions they
want within the company.

Herzberg's theory is largely responsible for the practice of allowing people greater responsibility
for planning and controlling their work, as a means of increasing motivation and satisfaction.

The relationship between motivation and job satisfaction is not overly complex. The problem is
that many employers look at the hygiene factors as ways to motivate when in fact, beyond the
very short term, they do very little to motivate. Perhaps managers like to use this approach
because they think people are more financially motivated than, perhaps, they are, or perhaps it
just takes less management effort to raise wages than it does to reevaluate company policy, and
redesign jobs for maximum satisfaction. When you're seeking to motivate people, firstly get rid
of the things that are annoying them about the company and the workplace. Make sure they're
treated fairly, and with respect. Once you've done this, look for ways in which you can help
people grow within their jobs, give them opportunities for achievement, and praise that
achievement wherever you find it.

NB

1. The hygiene factors are context/environmental factors while the motivation factors are related
to the job content.
2. The work of Herzberg is the basis upon which job enrichment is based as a method of job
design

Chris Argyris’s theory of adult personality

– He was of the opinion that classical management principles and practices inhibit worker
maturation and are inconsistent with the mature adult personality. These principles include task
specialization, chain of command, unity of direction and span of control

– Management should accommodate the mature personality.

– Management practices consistent with the mature adult personality include: Increasing task
responsibility, increasing task variety, using participative decision making

The maturity immaturity continuum

Immaturity Maturity

Passive Active

Dependence Independence

Behave in few ways Capable of behaving in many ways

Erratic shallow interests Deeper and stronger interests

Short term perspective Long term perspective (past and future)

Subordinate position Superior or super ordinate position

Lack of awareness of self Awareness and control over self

2.2.6 Modern Approaches

Systems Approach

This is a view of an organization as being made up of a number of interrelated elements, each

functioning to contribute to the purpose of the whole organization which exists in an
interdependent relationship with the external environment. The systems management approach
emphasizes the importance of educating managers to understand the overall system so that they will
realize how actions in their department affect other units. For example, the hiring of a single
individual into a marketing department is bound to have some degree of impact on other divisions
of the organization over time. Similarly, incorporating behaviorist theory, if managers are given more
autonomy and responsibility they are likely to perform at a higher level. As a result, subordinates in
their departments are likely to perform better, which may cause other departments to be more
effective, and so on.
Basic Types of Systems

The systems approach to management recognizes both open and closed systems.

Closed systems -Are not influenced by and do not interact with their environment (all system input
and output is internal). This was the assumption of the classical scholars. An example of a closed
system is the diver‟s gear

Open systems-Dynamically interact with their environments by taking in inputs and transforming
them into outputs that are distributed into their environments as presented in figure 2.
Organizations are open systems since they continually interact with their environment. Most
organizations are highly dependent on outside resources, such as suppliers and buyers. Specifically,
systems are impacted by four spheres of outside influence: education and skills (of workers), legal
and political, economic, and cultural. Management processes must be designed to adapt to these
influences. This acknowledgment of outside factors represents a meaningful departure from the
earliest school approaches that viewed management within the context of closed systems.

Importantly, the systems approach also recognizes that all large organizations are comprised of
multiple subsystems, each of which receives inputs from other subsystems and turns them into
outputs for use by other subsystems. At least five types of subsystems, according to systems theory,
should be incorporated into management processes in larger organizations. Production subsystems
are the components that transform inputs into outputs. In a manufacturing company this subsystem
would be represented by activities related to production. In most business organizations all other
subsystems are built around the production subsystem.

Supportive subsystems perform acquisition and distribution functions within an organization.

Acquisition activities include securing resources, such as employees and raw materials, from the
external environment. Human resources and purchasing divisions would typically be included in this
group. Distribution (or disposal) activities encompass efforts to transfer the product or service
outside of the organization. Supportive subsystems of this type include sales and marketing
divisions, public relations departments, and lobbying efforts.

Maintenance subsystems maintain the social involvement of employees in an organization. Activities

in this group include providing employee benefits and compensation that motivate workers, creating
favorable work conditions, empowering employees, and other forms of satisfying human needs.
Similarly, adaptive subsystems serve to gather information about problems and opportunities in the
environment and then respond with innovations that allow the organization to adapt. A firm's
research lab or a product development department would both be part of an adaptive subsystem.
Finally, managerial subsystems direct the activities of other subsystems in the organization. These
managerial functions set goals and policies, allocate resources, settle disputes, and generally work to
facilitate the efficiency of the organization.

Implications of the Systems Approach

1. Coordination of the organization‟s parts is essential for proper functioning of the entire
organization.

2. Decisions and actions taken in one area of the organization will have an effect in other areas of
the organization.

3. Organizations are not self-contained and, therefore, must adapt to changes in their external
environment.

4. The output of a system is always more than the combined output of its parts. This is called
synergy

Figure 2: The organization as an open system

The Contingency Approach
This is also sometimes referred to as the situational approach.

It postulates that there is no one universally applicable set of management principles (rules) by
which to manage organizations under all conditions. Organizations are individually different, face
different situations (contingency variables), and require different ways of managing. Contingency
variables include organization size, technology, environmental uncertainty, individual differences etc.
It suggests that the task of managers is to try to identify which techniques will in a particular
situation best contribute to the attainment of management goals. Contingency views are applicable
in designing of organizational structure, resolving conflicts, managing change, employee
development and training programmes, etc

Quantitative Approach
Also referred to as the management science approach
It gained momentum during the second world war
Was also known as operations research because the work consisted of analyzing operations and
carrying out applied scientific research
In today‟s organization, quantitative approach carries the form of inventory management
models, linear programming, operations research, game theory, statistics etc
The Total Quality Management Approach
Quality management perspective

This is an approach to management that has as its goal the achievement of customer satisfaction by
providing high-quality goods and services.

Total Quality Management (TQM) is a management approach that originated in the 1950s and has
steadily become more popular since the early 1980s. Total quality is a description of the culture,
attitude and organization of a company that strives to provide customers with products and services
that satisfy their needs. The culture requires quality in all aspects of the company‟s operations, with
processes being done right the first time and defects and waste eradicated from operations.

It is a management philosophy and way of managing with the goal of getting everyone committed to
quality, continuous improvement, and the attainment of customer satisfaction by meeting or
exceeding customer expectations.

TQM pioneers include Deming, Juran, and Ishikawa

TQM assumptions

Quality products are less costly to produce than poor quality products.
People (employees) care about quality and improving the quality of their work.
Organizations are systems of interdependent parts and quality problems cut across functional
lines.
Quality and continuous improvement are the responsibility of top (senior) management.
Continuous learning and improvement are vital to the long-term health and survival of an
organization.

TQM PRINCIPLES

Executive Management – Top management should act as the main driver for TQM and create
an environment that ensures its success.
Training – Employees should receive regular training on the methods and concepts of quality.
Customer Focus – Improvements in quality should improve customer satisfaction.
Decision Making – Quality decisions should be made based on measurements (management
by facts).
 Methodology and Tools – Use of appropriate methodology and tools ensures that non-
conformances are identified, measured and responded to consistently.
Continuous Improvement – Companies should continuously work towards improving
manufacturing and quality procedures.
Company Culture – The culture of the company should aim at developing employees ability to
work together to improve quality.
Employee Involvement – Employees should be encouraged to be pro-active in identifying and
addressing quality related problems.

Theory Z Approach To Management

Theory Z is an approach to management based upon a combination of American and Japanese

management philosophies and characterized by, among other things, long-term job security,
consensual decision making, slow evaluation and promotion procedures, and individual
responsibility within a group context.

Development of Theory Z

Theory Z was first identified as a unique management approach by William Ouchi. Ouchi
contrasted American types of organizations (Type A) that were rooted in the United States' tradition
of individualism with Japanese organizations (Type J) that drew upon the Japanese heritage of
collectivism. He argued that an emerging management philosophy, which came to be called Theory
Z, would allow organizations to enjoy many of the advantages of both systems. Ouchi presented his
ideas fully in the 1981 book, Theory Z: How American Companies Can Meet the Japanese
Challenge. This book was among the best-selling management books of the 1980s.

Professor Ouchi advocated a modified American approach to management that would capitalize on
the best characteristics of Japanese organizations while retaining aspects of management that are
deeply rooted in U.S. traditions of individualism. Ouchi cited several companies as examples of Type
Z organizations and proposed that a Theory Z management approach could lead to greater
employee job satisfaction, lower rates of absenteeism and turnover, higher quality products, and
better overall financial performance for U.S. firms adapting Theory Z management practices.
Theory Z represents a humanistic approach to management. Although it is based on Japanese
management principles, it is not a pure form of Japanese management. Instead, Theory Z is a hybrid
management approach combining Japanese management philosophies with U.S. culture.

According to Professor Ouchi, Theory Z organizations exhibit a strong, homogeneous set of

cultural values that are similar to clan cultures. The clan culture is characterized by homogeneity of
values, beliefs, and objectives. Clan cultures emphasize complete socialization of members to
achieve congruence of individual and group goals. Although Theory Z organizations exhibit
characteristics of clan cultures, they retain some elements of bureaucratic hierarchies, such as formal
authority relationships, performance evaluation, and some work specialization. Proponents of
Theory Z suggest that the common cultural values should promote greater organizational
commitment among employees.

Primary Features/Characteristics of Theory Z

1. Long-Term Employment

Traditional U.S. organizations are plagued with short-term commitments by employees, but
employers using more traditional management perspective may inadvertently encourage this by
treating employees simply as replaceable cogs in the profit-making machinery. In the United States,
employment at will, which essentially means the employer or the employee can terminate the
employment relationship at any time, has been among the dominant forms of employment
relationships. Conversely, Type J organizations generally make life-long commitments to their
employees and expect loyalty in return, but Type J organizations set the conditions to encourage
this. This promotes stability in the organization and job security among employees.

2. Consensual Decision Making

The Type Z organization emphasizes communication, collaboration, and consensus in decision

making. This marks a contrast from the traditional Type A organization that emphasizes individual
decision-making.

3. Individual Responsibility
Type A organizations emphasize individual accountability and performance appraisal. Traditionally,
performance measures in Type J companies have been oriented to the group. Thus, Type Z
organizations retain the emphasis on individual contributions that are characteristic of most
American firms by recognizing individual achievements, albeit within the context of the wider
group.

4. Slow Evaluation and Promotion

The Type A organization has generally been characterized by short-term evaluations of performance
and rapid promotion of high achievers. The Type J organization, conversely, adopts the Japanese
model of slow evaluation and promotion.

5. Informal Control with Formalized Measures

The Type Z organization relies on informal methods of control, but does measure performance
through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J
organizations.

6. Moderately Specialized Career Path

Type A organizations have generally had quite specialized career paths, with employees avoiding
jumps from functional area to another. Conversely, the Type J organization has generally had quite
non-specialized career paths. The Type Z organization adopts a middle-of-the-road posture, with
career paths that are less specialized than the traditional U.S. model but more specialized than the
traditional Japanese model.

7. Holistic Concern

The Type Z organization is characterized by concern for employees that goes beyond the workplace.
This philosophy is more consistent with the Japanese model than the U.S. model.

Review Questions
1. “Management is as old as mankind” Discuss this statement in the context of ancient
civilization
 2. Compare the work of Fredrick Taylor with that of Henry Fayol. What are the similarities
and differences in their approaches? What lesson can modern day managers draw from the
two approaches?
3. What was the contribution of Hawthorne studies to the development of the management
thought?
4. Highlight the principles of management according to Fayol. How relevant are they to
managers in organizations today?
5. What are the shortcomings of the bureaucratic model?
6. Differentiate between the systems approach and contingency approach to management
7. What are the defining features of theory Z organizations?