Management Theories and Practice

Introduction

As markets become more global and competition increasingly fierce, and as advances in technology continue to redefine competitive advantage, management theories and styles have changed. Theories have evolved making management more suited to the present conditions. Bartunek (2002) points out, that contemporary theories of management tend to account for and help interpret the rapidly changing nature of today’s organizational environments. One of the earliest management frameworks was associated with bureaucratic organization which exercised traditional management theory designed to control behavior.

Modern management theory and practice, though, have demonstrated that bureaucracy is no longer an effective model. The research looks into the selected management theories, draws on specific illustrations to highlight their limitations and discusses the management implications of the theories.

Management theories and their limitations

Scientific management

Frederic Taylor, (1856-1915) was the first to analyze human behavior scientifically with his machine model by making individuals into the equivalent of machine parts. He broke down the tasks to its smallest unit to figure out the best approach. After careful analysis of the job, workers were trained to do only those motions essential to the task. Taylor attempted to make a science for each element of work and restrict behavioural alternatives facing worker and looked at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability and cost. The overall goal was to remove human variability (Terpstra, 2005). Taylor’s machine model was a success and did increase production and profitability because rational rules replaced trial and error and management became more formalized which eventually led to increased efficiency. But Taylor’s treatment of human beings like machines faced resistance from managers and workers who considered this way of working as “dehumanization of work”. One of the other features of Taylor’s work was stop-watch timing as the basis of observations and breaking the timings down into elements. This method also faced stiff group resistance because no one likes to be so close monitored for each little part of the work he/she does. Despite its criticisms, Taylor’s methods had a great impact on work because he invented a new, efficient and more productive way to work that changed the complete nature of the industry. Before scientific management, departments such as work study, personnel, maintenance and quality control did not exist. (Buford, 2000) The core elements of scientific management remain popular within manufacturing firms but have been modified and updated to suit the current scenario. Under scientific management, managers are supposed to be tasked with the responsibility of motivating their employees and instructing them of the most – or best – way of performing a task (Bailey & Ford, 1996 ; pg 8). Efficiency, and productivity, is the desired results. Scientific management seek to improve the business process starting with factory “shop” management. The fundamentals included separating the labor process from the skills of workers (by simplifying jobs and routing tasks, the work process would be made amenable to a less skilled work force and, to that extent, management would be less dependent on skilled labor) (Daily et al., 2003; pg 371). It had a separate conception from execution, placing the responsibility for conceptualizing the productive process and planning the work tasks in the hands of management, leaving for the shop floor only the execution of predetermined, rigidly enforced plans (Cameron et al.,2003). This form of management practice also monopolized productive knowledge at the managerial level and use this monopoly over knowledge both to centralize decision making and to control every step of the labor process through formal rules and procedures.

Bureaucratic management theory

Close to scientific management was bureaucratic management theory embellished by Max Weber. The theory was popular during the 1930-1950 period and focused on dividing organizations into hierarchies, establishing strong lines of authority and control. Weber suggested organizations to develop comprehensive and detailed standard operating procedures for all routinized tasks (Clegg & Smith, 2003; pg 86). The theories inherent weakness lies in the fact that it was devised for hierarchical organizational structure. The organizational environment, today, focuses on devolution of power and delegation of authority where decision making rests at every levels and The management structure is no longer bureaucratic. The theory is still used to good effect in small entrepreneurial organizations where most of the decision making lies with the owner. Adoption of scientific methods has undoubtedly yielded some significant benefits for both our research and our pedagogy, but the costs too have been high. Unfortunately, as philosophy of science makes clear, it is an error to pretend that the methods of the physical sciences can be indiscriminately applied to organizations. Clegg & Ross-Smith, 2003).

Example – Carly Fiorina (HP’s) CEO tried to adopt an autocratic style of managing the organization to compete against the likes of Dell and IBM. Most of the decision making rested with the center and divisional a heads and departments were given very little decision making authority.

Human relations management theories

Human relations management theory is another management concept used by organizations. As the name suggests, this theory gave more attention to individuals and their unique capabilities in the organization and stresses on the alignment between the needs of the organization and the workers. Its major belief includes rests on the fact that the organization would prosper if its workers prospered as well. Frederick Herzberg’s (1959) sums up the basis of human relations relation approach by stating “If you want people to do a good job, give them a good job to do.” Unlike the scientific management approach, the human relations management concept places emphasis on what motivates people and seeks to identify and account for the specific influences that motivate people. One of the distinguished theories of human relations theory was put forward by, Maslow (1943) the ‘hierarchy of needs theory’ which saw human needs in the form of a hierarchy, ascending from lowest to the highest. He argued that lower level needs had to be satisfied before the next higher level need and once one set of needs is satisfied, this kind of need ceases to be a motivator. The crux of Maslow’s theory is to focus on finding out the level of hierarchy the person is in and focusing on satisfying his/her needs and the needs above it. Maslow’s theory of needs has been wider recognised and is being practiced by managers across the globe. The theory’s ease of understanding and intuitive logic makes it easy to implement, but there is no empirical evidence to validate the theory and there is no metric to measure the success of the theory after being implemented. So, the quantitative impact of Maslow’s theories cannot be accurately measured. Some critics term human relations theory as vague, but considering today’s business world where job context and content are major issues, the theory if practiced effectively can give good results because it is based on superb motivational ideas.

Vroom’s Expectancy Theory

Vroom’s expectancy theory is based on the belief that employee effort will lead to performance and performance will lead to rewards (Vroom, 1964). The theory states that individuals can be motivated if they believe that there is a positive correlation between the efforts they put in and their performance and when that favourable performance leads to a reward. Consequently, the reward helps satisfy an important need and the desire to satisfy that need is strong enough to make the efforts worth wile. The theory states that the strength of an individual’s motivation will depend on the extent to which they expect the results of their efforts to contribute towards their personal needs or goals and posits that motivation is a result of a rational calculation(Vroom, 1964) Vroom’s theory can apply to any situation where someone does something because they expect a certain outcome. The theory is about the associations people make towards expected outcomes and the contribution they feel they can make towards those outcomes (Bowen,1991) Critics have applauded the basics of Vroom’s theory but questions have been raised about the validity over the

Most of the human relations based theories seem to borrow a little from each other. Maslow’s theory concentrates on basic human needs, Herzberg’s two factor theory brings out the distinction between motivation-demotivation. Because of its quantitative nature, Vroom’s theory, is more suited to managers trying to gauge the effect of decisions on employees. Maslow describes which outcomes people are motivated by and Vroom describes whether they will act based upon their experience and expectations. (Harpaz,2004) Maslow’s theory can be too simple and rigid for today’s environment. Porter-Lawler model brings out the perceived inequality and brings out the demerits of discriminatory practices which may be more suitable for more diversified workforce. All behavioral theories have their own significance and it is up to the management to decide which theory to apply. Application of human relations theories is purely contextual and specific to a particular workforce.

Contingency theory

More recently, managers have started to use contingency approach to managing which deals with identifying the best leadership or management style based on the current situation. Berlin (2002) points out that contingency theory asserts, that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. The contingency approach is not a new approach on its own but advises the managers to manage organizations according to their present situation which might take into account the organization structure, culture, aims and objectives, problem at hand etc. It purports that high organizational performance results from matching a firm’s structure to its external and internal contingencies (Burt, 2007; pg 340). It also suggests that there exists an association between contingency and organization structure, contingency determines organization structure, and there is a fit of some level of organizational structure to each level of the contingency, which leads to higher performance, whereas misfit leads to lower performance (Donaldson, 2001). The theory argues that the design and use of control systems is contingent upon the context of the organizational setting in which the organizational controls operate.