Management theories: History and Practice

By Samer H Skaik

Organizations have realized that deep understanding of management theory and practice is a must to ensure continuous improvement to their operations. Management theories were solely or primarily adopted in organizations to help get the job done and find ways to efficiently manage the organization and enhance financial rewards (Grey, 2005).

Many challenges face organizations nowadays and the only efficient way to control them is to practise the management functions and theories in the best possible effective way.

What is management?

There were many attempts to define management. Parker Follett (1941) defined management as: “getting things done through people” while Pearce and Robinson (1989) defined it as: “The process of optimizing human, material, and financial contributions for the achievement of organizational goals” (Weihrich; Koontz, 1993)

Scientific management theory

The pioneers of early theories can be divided into two main groups (Cole, 2004). The first one is the scientific managers such as Taylor and Fayol who used their personal experience to identify the basic principles of management to achieve the organization efficiency. Their theories focused on the structure of organization and what managers should do to fulfill their duties but didn’t take care of human motivation or organization culture. The other group is the social scientists such as Mayo and McGregor who studied the human behaviour in the workplace in contrary with the scientific managers concerns. The focus was mainly on the employee productivity and the factors affecting it.

General administrative management theory

Whereas scientific management focused on employees as individuals with tasks, general administrative management theory dealt with total management organization (Pindur, Rogers, Kim, 1995). Max Weber (1864-1920) with his Bureaucracy theory concentrated on hierarchy, authority and controlling the work efficiency by sets of rules (Cole, 2004). He thought that what might hold the organization together is some sense of authority where people by nature obey the will of their leader even if he doesn’t have the charisma (Grey, 2005). Weber’s theory may be no longer appropriate nowadays due to tremendous culture changes within organizations whereas the trend seems to go for empowerment techniques.

Chester Barnard, another pioneer, tried to connect scientific management and human relations. Barnard introduced a theory about the acceptance of authority based on free will and outside forces as an application of respect and competence. According to Barnard, employees considered the validity of superior’s instructions then decided whether to accept them or not (Pindur, Rogers, Kim, 1995). Barnard theory tried to increase the employee job satisfaction by offering incentives in the workplace.

However, scientific and administrative management theories discussed above have major limitations. They are more suitable for uncomplicated and relatively stable organizations whereas most of today’s organizations are complex and aggressive. They didn’t mention the relationship between organization and its environment and most of these theories dealt with employees as tools used to achieve the goals of organizations (Pindur, Rogers, Kim, 1995)

Behavioural management theory

During the same period focusing on scientific management, many contributors were studying the psychology and social theory (Weihrich; Koontz, 1993). Hugo Münsterberg (1912) is known as the father of industrial psychology. He saw a connection between scientific management and human behaviour (Pindur, Rogers, Kim, 1995). His objectives were to find out how to get the best out of employees by studying the social conditions and how to recruit the right people for the right job.

In 1943, Maslow introduced five-tiered hierarchy of needs, as he thought that individuals are motivated by certain needs. Fredrick Herzberg’s motivation-hygiene theory was extended from Maslow’s need when job satisfaction was studied. He worked on redesigning and improving employees’ positions to increase motivation and involvement.

Following Maslow, Douglas McGregor suggested that managers attempt to motivate employees by negative theory called theory X and positive theory called theory Y. Theory X suggested that managers considered the employees lazy and should be controlled or threatened to motivate them. In contrary, theory Y suggested that managers believed that people are able to be responsible and mature. However, managers were and are still hesitant to adopt such complex behaviours concepts because of the difficulty in implementing them as no one can easily predict the human behaviour of individuals (Pindur, Rogers, Kim, 1995).

Modern management approaches

There was a real need to integrate theories as an evolving movement to deal with different situations and conditions. Modern management theories like contingency approach, strategic management approach and systems approach were integrated with classical and behavioural management to form the framework of the modern management movement.

Contingency theory is acknowledged as a problem solving approach. It tells managers that tools, concepts, techniques or theories which function well in one organization may not be appropriate in a different one. This would make sense, since there are a lot of variables in the workplace which may influence the decision (Pindur, Rogers, Kim, 1995). However, such theory has its limitations as well since it lacks comprehensive methods and procedures. Donaldson (2001) concluded that there is a need to extend the contingency theory to explain changes in the contingency and how it should occur in organizations to fit (Donaldson, 2001)

Strategic management theory is another problem-solving approach .It monitors and evaluates the external and internal environmental opportunities and controls in controls considering the organization’s strength and weakness. Strategy statement can be made in light of vision, mission, goals and objectives and critical success factors. Strategic management involves four basic components: environmental scanning, strategic formulation, strategy implementation and evaluation and control (Pindur, Rogers, Kim, 1995). The practice of strategic management is never easy. It requires highly experienced leaders with immense knowledge to successfully implement it in corporate business.

Practice of Management theories

All above theories requires skilled managers to effectively apply them in the professional life practice. The question is how to apply planning, organizing, leadership, motivation and other management principles and theories to improve the managers’ performance and achieve the explicit goals of organizations. This could be answered by further elaboration on management principles in view of managers understanding.

Planning

Planning is an ongoing creative process aiming to ensure that the actions are well defined and the tasks are distributed in the best way possible to achieve the organization targets. Failing to plan simply means that the employees are left without clear missions to accomplish which in turn affect the productivity badly. Strategic planning involves defining the resources, policies and the time required to accomplish objectives and achieve profits in light of the resources availability and the policy guidelines. The need for planning strategy in business becomes more serious and significant with the availability of strong competitors in marketplace (Cole, 2004).
Planning mainly aims to correctly carry out the tasks from the first time by set of procedures and analysis using WBS, charts and software tools.

Organizing

Whilst planning is acting as providing location map to reach a destination, then organizing is the way used to reach such destination. Organizing people is a social management tool in which managers assign certain tasks to the employees best able to handle them. People can’t be left without job descriptions and authority limitations; else a lot of confusions and uncertainty would arise. The first step is the difficult one where managers design organizational structure with levels and communication lines. This depends on the volume of organization, governing culture and nature of its activities. During such design, Span of control should be considered to achieve the purpose of making the people more effective (Weihrich; Koontz, 1998). However, motivation techniques should be adopted to influence the human performance in all subordinates levels.

Motivating

Motivation is the fuel of continuous improvement to performance within organizations. Superiors have a serious duty of practising the various theories of motivation as applicable to their workplace. Offering incentives and rewards as called for by Vroom’s expectancy theory is a dynamic and effective practice on the short term (Hannagan, 2005). Nevertheless, aligning the employees with organization goals and getting them involved in decisions might be adopted for long term motivation. Some managers with modest leadership skills try to motivate in wrong way such as recognizing some employees just for coming to work early or on Saturdays. This would on the contrary de-motivate others since the employees’ efficiency and productivity were not criteria for recognition. That is why good leadership plays a major role in inspiring the employees and influencing their performance.

Leadership

Leadership was historically explained by the internal qualities and traits with which a person is born. Another research called that effective leadership skills can be taught to employees and the leaders can be distinguished from the followers (Horner, 1997). This approach would make sense as employees having the potential to develop can join a leadership training course then their performance improves. The path-goal theory about leadership states that leaders are primarily obliged to help followers develop behaviours to achieve organization goals. However, followers’ expectations from leaders go beyond this obligation. Some theorists suggested that democratic style of leadership is generally preferable to an authoritarian one. This suggestion should not be generalized as it depends on the people culture (Cole, 2004). Leaders should understand and practise the culture management with followers to make the work successful. Baron (1995) found out that leaders should have additional skills and knowledge to be able to manage the employees’ culture and control organization (Horner, 1997).

Controlling

Controlling is a basic function of managers and it requires planning and leadership skills to reach a satisfactory level. Time, cost and quality are usually the main areas of concern during controlling. Controlling is a process where activities are well monitored and adjusted to facilitate the achievement of organization goals (Hannagan, 2005). Adjusting activities can be fulfilled by receiving feedback from employees and marketplace on the actions outcomes at different stages and imposing corrective actions to match the original plans. For example, In the early 1980s, Apple computer, Inc. implemented tighter control on organization because of the introduction of a new competitor, IBM personal computer in market. Apple managers employed cost cutting measures to improve its profitability in response to competition effects (Weijrich; Koontz, 1993). Nevertheless, in order for managers to implement controlling measures, they should practise powerful communication skills in giving specific instructions and receiving appropriate feedbacks. Failing to communicate is a shiny signal that works most probably will not be controlled as planned.

Communication

Communication as a social and vital process applies to all phases of management. Researches suggested that about 90% of managers’ time is spent in communication. Chester I. Barnard defined communication as the means by which people are linked together in an organization to achieve a common purpose (Weijrich; Koontz, 1998). Organizations that seek for continuous improvement train employees to have better communication skills. This ensures that all possible channels to effectively exchange information and views are always open. Urgency, importance and complexity of information to be communicated influence the selection of the most appropriate tool to be adopted. However, wrong selection of communication tools might have a negative impact on the organization performance depending on the nature of each case.

Coordination

Coordination is a process which heavily employs communication skills to create and keep harmony among the efforts of individuals to achieve the set goals. Some scholars considered the coordination as the essence of management. This would make sense because all the managerial functions are considered exercises contributing to coordination. Organizations develop and maintain effective coordination within or beyond boundaries to maximize the potential profitability. For example, coordination among independent organizations, such as raw-material suppliers, manufacturers, distributors and retailers, is the key to attaining the flexibility necessary to improve logistics processes in response to rapidly changing market conditions (Simatupang, 2002).

References:

Cole, G. (2004), Management theory and practice, sixth edition, Thomston, London.
Grey, C. (2005) A very short, fairly interesting and reasonably cheap book about studying organizations, Sage, London.
Hannagan, T. (2005), Management concepts and practice, fourth edition, FT Prentice Hall, England
Horner, M. (1997), Leadership theory: past, present and future, Team Performance Management journal. Volume 3, number 4, 270-287.
Milne, P. (2007), Motivation, incentives and organizational culture, Journal of knowledge management, Vol. 11, no. 6, pp 28-38
Pindur, W., Rogers, S. and Kim, P. (1995), The history of management: a global perspective, Journal of management history, volume 1, number 1, pp 59-77
Simatupang, Wright, Sridharan, (2002), The knowledge of coordination for supply chain integration, Business Process Management Journal, volume 8, number 3, pp 289-308
Weijrich, H. and Koontz, H. (1998), Essentials of management, fifth edition, Tata McGRAW, New Delhi.
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Donaldson, L. (2001), The Contingency Theory of Organizations, Sage publications, Sydney.