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CHAPTER 1
Management Theory
Lisa K. Hussey
Theories about management are plentiful and varied. It seems as if there is a theory for every type of organization, leader, and situation, yet there are always new situations and new ideas. There are as many ideas and theories about management as there are about the meaning of life. Management theories are abundant, and new ones are introduced all the time. In order to effectively function in modern times, managers need to understand the concepts, the history, and the application (or lack thereof) of theory in organizations.
Theory begins with managers’ responsibilities. Essentially, a manager’s job consists of planning, organizing, directing, and controlling the resources of an organization, which include people. As management emerged as part of the modern organization, theories also arose about how best to supervise, motivate, direct, plan, and control. As organizations grew and evolved, so did how people viewed them. There are many illustrations and images to describe organizations, but two of the most common are a machine and an organism. Both characterizations are reflected in the management theories.
However, before we address the theories directly, there are a couple of important points to highlight. To begin with, the theories presented in this chapter are primarily focused on Western culture and business. The management theories discussed in this chapter are primarily from Western societies, such as the United States, Canada, and Europe. Although the principles of management are practiced all over the world, the majority of theories tend to be heavily influenced by Western culture and ideas. Even the theories that have grown out of the Japanese business culture (Theory Z, Kaizen, TQM [total quality management], etc.) are influenced by the Western point of view, at least when they are applied to business, especially in the United States and Canada.
As the various theories are introduced, it is also important to remember that the individual theories tend to be reflective of their time periods. The ideas and concepts presented may seem archaic or out of date, but they were often revolutionary in their time. Additionally, social norms and behaviors also influence the portrayal of workers and the expectations of management. It is very easy to criticize theories from a century ago for their simplistic ideas or patronizing views, but these theories developed in a much different society and business environment. Just remember, we might not have our modern ideals and theories if we did not have the original theories from which to build, expand, and evolve.
One final thing to consider before we dive into the various theories is that all management theories, regardless of the school of thought, tend to have two basic tenets: motivation and control. The underlying concept of management theory is to present an ideal of what an organization can be or can accomplish and try to answer two questions: How do you motivate employees to complete their work? How do you make sure the work is carried out and completed as it should be?
With all that in mind, let’s now turn to actual theories. We will begin with the classical theories. These include scientific management, bureaucracy, and administrative management.
SCIENTIFIC MANAGEMENT
Scientific management is often seen as the first modern management theory. This school of thought focused on the organization as a machine. The underlying concept is that organizations are rational enterprises designed and structured to achieve predetermined ends (given goals and objectives, a rational structure of jobs and activities, the organizational chart as blueprint, people as instruments of organizational action). The focus is on means to ends. Terms often connected with scientific management include efficiency, One Best Way, and increasing productivity. Scientific management theory looks at the organization through workers and tasks. Each task is broken down to the smallest components possible, and each step of the process is analyzed to eliminate wasted time and effort and to develop standards in order to create the One Best Way to complete the work. It is impossible to discuss scientific management without mentioning Frederick Taylor (1856–1915).
Although other theorists also contributed greatly to the theory, Taylor is often seen as the father of scientific management. His seminal work, The Principles of Scientific Management (1911), laid out the ideas behind and steps to institute scientific management.
The problem, as Taylor saw it, was that workers were inefficient because they tended to ration their workload or work less than they could for fear of running out of work, a practice Taylor referred to as soldiering (Taylor, 1911). Taylor, however, did not see this as a fault of the workers; rather, he placed blame for the lack of efficiency on management, which had failed to structure work effectively.
[I]f a man falls down, the presumption is that it is [management’s] fault first, that [management] probably have not taught the man right, have not given him a fair show, have not spent enough time showing him how to do his work. (Taylor, 1911, n.p.)
Taylor also believed that management needed to provide sufficient incentives to motivate workers, such as increased pay for higher productivity. He felt that pay for performance rather than hourly pay would better motivate individual workers to increase their efforts in order to earn more money.
Taylor’s theory has four main elements:
- 1. Management is a true science.
- 2. The selection of workers is a science.
- 3. Workers are to be developed and trained.
- 4. Scientific management is a collaboration of workers and managers.
Each of Taylor’s elements is based on rational thought and behavior. Taylor believed management, like any other science, could be rationally dissected and analyzed to find well-defined and universal principles, which when applied to an organization would result in efficient processes and increased productivity. Workers would be selected based on this analysis and resulting expectations, and these workers were to be trained in the One Best Way of completing the tasks. If the right workers are hired and they are properly trained, supervisors can spend more time overseeing the process rather than having to put pressure on workers to get the job done. It is only with the willing cooperation of both management and workers that these goals can be accomplished.
Taylor’s ideas are patronizing. The relationship between management and workers is presented in a parent-child framework. The manager is seen as the mature and knowledgeable partner while workers need to be directed and supervised. Taylor’s views of workers are also simplistic, reducing workers to mindless tools or cogs rather than individuals. His theory of scientific management depends heavily on workers being motivated by money and only money.
Taylor’s ideas were criticized even during his time. Unions opposed the idea of pay-per-piece because they saw it as an opportunity for management to set high quotas for low costs. He was criticized for his comments regarding workers, including one reference to a worker being “dumb as an ox” (Rainey, 2009, p. 28) and intending it to be complimentary. However, Taylor saw his work as beneficial for both workers and management because it provided the means for workers to increase their pay through efficient work practices, which in turn provided better results for management. His practice of pay-per-piece was eventually outlawed, and a standard basic wage was instituted.
Taylor was not the only influential theorist in scientific management. Frank and Lillian Gilbreth were a married couple who collaborated on scientific management. Frank (1868–1924) was a bricklayer, a building contractor, and a management engineer. Lillian (1878–1972) was a psychologist. Using their combined skills, they developed time and motion studies as a way to improve the productivity of workers. Like Taylor, they looked at the motions involved in work, the way these motions were combined to form methods of operation, and the basic time each motion took. The Gilbreths connected the concepts of motion and fatigue—every motion that was eliminated reduced fatigue. By reducing fatigue, workers would be able to improve performance. The Gilbreths developed a tool, named Therblig (more or less Gilbreth spelled backward), to help break down the work process and determine where improvements could be made (Ferguson, 2000).
- 1. Find
- 2. Select
- 3. Grasp
- 4. Hold
- 5. Position
- 6. Assemble
- 7. Use
- 8. Disassemble
- 9. Inspect
- 10. Transport Loaded
- 11. Transport Unloaded
- 12. Pre-position for next operation
- 13. Release load
- 14. Unavoidable Delay
- 15. Avoidable Delay
- 16. Plan
- 17. Rest to overcome fatigue
As seen in the Therblig, the Gilbreths advocated the importance of rest times (breaks) in order to allow workers to further combat fatigue. They believed, as did Taylor, in one best way of doing work, but they also acknowledged that a new best way was possible and that the old one would be eliminated when the new one was discovered.
Henry Gantt (1861–1919) was another important theorist in scientific management. Gantt initially worked with Taylor but began to rethink many of the ideas after working as a consultant. He came up with an idea of bonus incentive based on finishing the day’s assigned workload. Supervisors received a bonus based on how many of their workers reached the daily bonus. This practice created a stronger tie between management and worker productivity. Gantt recorded performance on a chart using black on days that workers met standards and red on days when they did not.
Gantt also originated a charting system for production and scheduling that is still in use. The Gantt chart is constructed with a horizontal axis representing the total time span of the project, broken down into increments (days, weeks, or months). The vertical axis represents the tasks that make up the project. The graph area contains horizontal bars for each task connecting the “period start” and “period end” symbols. This chart is mainly used as part of project management for scheduling projects.
BUREAUCRACY
Bureaucracy is far and away the best known of the classical theories, as well as being the most used. Max Weber (1864–1920) developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. He considered the ideal organization to be a bureaucracy. It was ideal because the activities and objectives were rationally thought out and the divisions of labor were explicitly spelled out. Weber also believed that technical competence should be emphasized and that the performance evaluations should be based entirely on merit. Weber sought to improve the performance of socially important organizations by making their operations predictable and productive. As in scientific management, efficiency is a big part of bureaucracy. The goal of bureaucracy is to create a predictable, systematic, impersonal organization in which control is based on authority and expertise. Again, like the other classical theories, bureaucracy focuses on control, but unlike the others, bureaucracy looks at the entire organization, not just production and management. Bureaucracy depends upon a rational-legal authority in which all functions and offices are governed by well-defined and codified rules. The organization is broken down into clearly differentiated spheres of competency and control, all of which is organized into a well-established hierarchy.
The following are some key characteristics of bureaucracy (Weber, 1946):
- 1. A body of laws consisting of a set of abstract rules is intentionally established. These laws demand obedience from members of a corporate group.
- 2. The typical person in authority occupies an office position, issues commands to subordinates, and is subject to impersonal orders from higher levels in the organizational hierarchy.
- 3. People owe obedience to the authority of an office holder, not to the person as an individual.
- 4. The bureaucracy is a functioning organization of official activities bound by rules.
- 5. The division of labor provides for specialized training and specific spheres of competence.
- 6. The organization of offices follows the principle of hierarchy, with each lower office being under the control of a higher office.
- 7. Rules concerning the conduct of an office must be specifically associated with the performance of that office; in other words, they must be used for the good of the organization, not for personal gain.
- 8. Administrative acts, decisions, and rules are recorded in writing, even when they evolve from oral discussion.
- 9. Bureaucratic officials are subject to authority only with respect to their impersonal official obligations.
- 10. Bureaucratic officials are appointed, not elected, on the basis of their technical and specialized qualifications.
- 11. The “office” is treated as the sole occupation of the incumbent, and it constitutes a “career.” Promotion is awarded by superiors and is influenced strongly by seniority.
- 12. A bureaucratic official’s work does not carry the privilege of ownership. Bureaucrats do not use the office for their own measures in the conduct of official business.
The guiding principle in bureaucracy is the idea of top-down management. However, Weber did not see this approach as the top being independent of the rest of the organization. Rather, each level is dependent on the one below it because the lower levels provide the reasons for the higher levels. Think of the organizational chart and you can see the logic in this idea—each level is built upon and supported by the departments below it on the chart. The top-down approach was also seen as a way to appeal to a higher office. There are different levels of authority, which can be used at different times. Authority resides with the office, not the individual. Weber stressed the idea of codification of policy and procedures, which should be available to all within the organization. Records are to be kept of all communications and decisions. The process for advancement is clearly defined, including the expectations of skills, education, and seniority within the organization needed in order to occupy any office.
One thing that should be glaringly obvious here is that bureaucracy is meant to be quite impersonal, objective, and removed from the biases that come from favoritism and personal feelings. This is what Weber saw as being the ideal. Weber saw bureaucracy as a great equalizer. To Weber, bureaucracy was the polar opposite of patrimonialism, which dealt with privileges based on who you knew and the power of your family or connections. Instead, all who sought assistance from the bureaucracy would be treated equally. The prince would have to deal with the same rules as the serf (Weber, 1946).
There has been quite a bit of criticism of bureaucracy. Terms such as impersonal do a lot to make bureaucracy seem very mechanistic and inhuman, but that was not Weber’s intention. Weber did readily admit that bureaucracy could turn into something similar to how we see it today, but that was not his overall purpose. In fact, Weber saw bureaucracy as a way to level the playing field, to provide a fair way to deal with each individual within the organization and those who are users of the organization.
Other criticisms have focused on the rigid rules and impersonal nature of the theory. The strict rules and procedures can easily limit original thinking and creativity. If everything is prescribed, employees and managers do not need to think about what they do. This focus on established rules and procedures can produce tunnel vision in employees and managers, an inability to look beyond the goals and expectations of a department or a specific job description. In a bureaucracy, there is very little impetus to understand the organization beyond an employee’s department and its reporting structure. The rigid hierarchy and well-delineated departments have the strong potential to create silos and competition for materials and funding. A bureaucratic structure and governance do not encourage collaboration. The nature of the theory can lead to issues, such as management controls being too discrete, impersonal, and secretive. Adhering strictly to bureaucratic principles reduces the personalized qualities of relationship. The relationship is between offices, not individuals, and th...
