Management theories.pptx

Management Theories &
Organizational Structure
Student name:

Objectives
• Explain management theories
• Organizational structure
• Organizational chart

Management Theories
• Management theories are the set of general rules that
guide the managers to manage an organization.
• There are four general management theories:
1. Frederick Taylor – Theory of Scientific Management
2. Henri Fayol – Administrative Management Theory
3. Max Weber - Bureaucratic Theory of Management
4. Elton Mayo – Behavioral Theory of Management
(Hawthorne Effect)

Scientific Management Theory
• Fredrick W. Taylor's philosophy focused on the
belief that making people work as hard as
they could was not as efficient as optimizing
the way the work was done.
• He promoted that if a worker didn't achieve
enough in a day, he didn't deserve to be paid
as much as another worker who was highly
productive.

Four Principles of Scientific
Management
1. Time – motion study principle - All work must
be measured by accurate and standard
observation. All effort made for productivity
should be measured in terms of time and
motion. Therefore, standardized time of
operation, rules and regulations should be set
for workers.
2. Piece – rate principle - Wage should be
proportional to output. Therefore the more
work a worker performs, the higher should the
pay be.

Four Principles of Scientific
Management
3. Division of labour (or separation principle) -
Responsibility of management should be separated
from that of workers. Management is expected to
plan and set standards of work. Workers on the
other hand should perform the tasks assigned to
increase their efficiency
4. Functional foremanship - Specialization requires
that supervisors should have the necessary
knowledge and skills on the work they supervise.

Administrative Management Theory
• Henri Fayol (1841-1925) came up with this
theory.
• This theory attempts to find a rational way to
design an organization as a whole. It generally
calls for a formalized administrative structure,
a clear division of labor, and delegation of
power and authority to administrators
relevant to their areas of responsibilities.

Principles of Administrative
Management
1. Division of work. A worker is given only a
small element of work.
2. Authority. This is the right to give orders and
power to exert obedience in order to get work
done.
3. Discipline. Rules and regulations should be
enforced fairly and judiciously.
4. Unity of command. Each man should receive
orders from one superior.

Management
5. Unity of direction. One head should plan for a
group of activities with the same objectives.
6. Subordination of individuals interests to the
organizational interests. Interest of organization
must take priority all the times.
7. Remuneration of staff. This should be fair to
both employer and the firm.

Management
8. Centralization. This should always be there.
9. Scalar-chain. A clear chain of authority from
top to bottom of an organization.
10.Order. A place for everything and everything
in its place; materials and people should be in
the right place.
11.Equity. A combination of kindness and justice
towards the employee.

Management
12. Stability of staff. Employees turnover should
be minimum.
13.Initiative. All employees to be allowed to be
innovative.
14. Espirit de corps. Team spirit should be
promoted by management

Bureaucratic Management Theory
• Max Weber(1864-1920) is known as the father
bureaucracy.
• Bureaucracy emerged from problems associated with
big business enterprises and increasing complexity of
government operations.
• The Theory of Bureaucracy proposes that all business
tasks must be divided among the employees. The basis
for the division of tasks should be competencies and
functional specializations. In this way, the workers will
be well aware of their role and worth in the
organization and what is expected of them.

Characteristics of Bureaucracy
• Prescribed competence (Formal Selection) - All
members of the organization are selected on the
basis of technical qualifications such as training
and level of education.
• Division of Labour - In a bureaucratic system,
complicated tasks are split into relatively simple
and manageable parts and an individual person
assigned to manage such a task. Specialization is
emphasized to increase efficiency and achieve
organizational goals.

• Hierarchical Structure - Refers to office
arrangement in vertical order in which each lower
hierarchy is supervised by higher order. This
hierarchy of authority is represented in form of a
chart.
• Formal rules and regulation - Rules in
bureaucratic system are used to promote
efficiency and ensure continuity of organizational
functions. As a result order, rational and equal
treatment of all employees is practiced.

• Impersonality - Organizational decisions are
made based upon facts rather than personal
feelings and emotions. Rules and regulations
are applied uniformly to avoid personal bias.
Impersonality ensures objectivity.
• Career orientation - Managers are
professionals and promotion is based
profession, experience or seniority

Behavioral Management Theory
• This theory is concerned with how to manage
productivity by understanding worker motivation,
including expectations, needs and interests, and
group dynamics.
• Behavioral management theory is sometimes
referred to as the human relations movement
due to its focus on the human dimension of work.
• Theorists who contributed to behavioral
management include Mary Parker Follett, Elton
Mayo, and Abraham Maslow.

Mary Park Follet proposed four principles of
Management:
1. Employers and employees should solve their
differences through conferences and cooperation.
2. Coordination must be achieved in the early stages.
3. Coordination is the result of reciprocal understanding
of all factors in the organization. Employers and
employees should share tasks.
4. Coordination is a continuing process. The sharing of
ideas between the administrators and workers should
continue.

The Human relations movement according to Mayo,
had the following two major principles:
1. Satisfaction - The organization with the most
satisfied workers would be the most efficient.
2. Democracy - Democracy must prevail in any
organization through: i) Employee participation
in decision-making, ii) delegation of
responsibilities, and iii) open channels of
communication among all members of
organization

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