This handbook is a Comparative of Management Theory Jungle and is prepared as a guide to the different Schools of Management for undergraduate and post graduate students. It is also a source of reference for practioners of Business Administration, Management, Finance, Economics, and other Business related courses. Each Chapter of this book highlights a School of Management, its contributions to the study of Management as well as individual contribution to each School. Also treated are the criticisms of each School in a very concise manner.

Handbook on Management Theories

By Prince Jide Adetule

AuthorHouse

Copyright © 2011 Prince Jide Adetule
All right reserved.
ISBN: 978-1-4389-4801-0

Contents

Acknowledgement....................................................................vDedication.........................................................................viiPreface............................................................................viiiForeword...........................................................................ixCHAPTER ONE INTRODUCTION OF MANAGEMENT............................................2CHAPTER TWO THE CLASSICAL OR UNIVERSAL SCHOOL.....................................7CHAPTER THREE THE BEHAVIOURAL OR HUMAN RELATIONS SCHOOL...........................23CHAPTER FOUR THE MANAGEMENT SCIENCE OR QUANTITATIVE SCHOOL........................35CHAPTER FIVE THE SYSTEM SCHOOL....................................................38CHAPTER SIX THE CONTINGENCY/SITUATIONAL OR ALL DEPENDS SCHOOL.....................43CHAPTER SEVEN THE TOTAL QUALITY MANAGEMENT 4......................................8CHAPTER EIGHT THE BUSINESS SYSTEM.................................................54CHAPTER NINE THE BUSINESS CONCEPTS................................................57CHAPTER TEN THE LEADERSHIP........................................................66Glossary...........................................................................70Appendices.........................................................................75Likely Examination Q & A...........................................................88Bibliography.......................................................................97

Chapter One

INTRODUCTION OF MANAGEMENT

1.1 EVOLUTION OF MANAGEMENT

Management is as old as human existence, which started in the beautiful Garden of Eden. Adam was in charge to look after the garden. He could be regarded as the first Chief Executive Officer or Managing Director on earth. This was not all God gave him a helpmate to assist him. Eve became the first subordinate. Afterwards, the institution of boss and servant or super-ordinate and subordinate relationship was created. When the time came for Adam to take responsibility for his mistakes, he passed the buck to his sub-ordinate, he subsequently became the first person to be fired, retrenched or sacked. Looking back at the antiquity records and ideas relating to Management, one can go on and on through the days of Greek Philosophers, through the Middle Ages, through early civilizations of Sumer, through Babylon, Assyria, Egypt, Persia, Greece, China and Roman Empires. Also through Niccolo Machiavelli, the Catholic, the Cameralists of the sixteenth to eighteenth centuries, through the Feudal System (in the rural areas), the Guild Systems (in the urban areas), Cottage System of production and Factory System, this is the heartbeat of Industrial revolution.

However, modern history of Management Theory can be traced to the industrial revolution, which first took place on a grand scale in Europe in 1850. Before this time, which Prof. Gullick called "pre-scientific management period", what operated was the `Craft Shop Era' for example the Blacksmith. During this period, land was the real thing. One needed to acquire status or rank and power before he could acquire land. There were two big institutions then: the Military and the Catholic Church, which acquired land. After 1850, there were capital, complex machines and products through industrial organizations. The problem therefore was how to manage and coordinate these resources. As a result of this, modern management commenced, i.e. Scientific Management 1880- 1930. The Engineers taught the world "Industrial Management", which is largely production management. In the last half of the twentieth century, Management has developed considerably having many branches called "Theories"

1.2 MANAGEMENT DEFINED

Before any meaningful discussion can be held on Management, we need to know what the subject matter is all about. There is no known universally acceptable definition of Management. However, many definitions are commonly accepted. Some of them are:

a. Management is the art of getting things done through and with people.

b. Management is the process of planning, organizing, directing and controlling the effort of organization's members using all other organization resources to achieve stated organizational goals.

These are just two out of the lot. However, while definition (a) refers to Management as an Art, (b) sees it as a Process. The implication is that many authors, researchers, practitioners, etc have viewed management from various perspectives or ways. Since there is no single catholic definition acceptable to all, Management has been defined variously as an Art, Science, Function, Process, Profession, Resource and Concept. An understanding of the management concept can be viewed from several perspectives:-

i. Art: This is high level of skills, proficiency, expertise and competence. Like Art, Management can be distinguished by its proficiency through studies, experiences, observations, skills, expertise and competence.

ii. Science: This is a body of knowledge acquired by method of science involving actions and results; Management is also a body of knowledge because it is studied for many years through theories.

iii. Function: This is a special duty or performance in the course of work or duty, that is, Planning, Controlling, Organizing and Directing. These are combined to make up Functions or Elements of Management.

iv. Process: This is a systematic way of doing things. All managers regardless of particular skills engage in or perform interrelated activities in order to achieve desired goals.

v. Profession: This is an occupation that requires intellectual proficiency that should meet four criteria.

a. Make decisions based on certain general principles

b. Attaining their status by meeting certain objectives, standard of performance and not by chance or favoritism; for example before one can become a professional Accountant, Banker, Public Relations Practitioner, he/ she must pass CPA, ICAN/CIBN/NIPR examinations respectively.

c. Having superior knowledge

d. Guided by Code of Ethics.

vi. Resource: Management is what we use to get what we want. It is an indispensable resource that helps to effectively combine other resources (human and material) to achieve desired goals and objectives.

vii. Concept: Management is defined as a concept because of its universality; as Management is defined in Nigeria so it is defined the same way in Japan or the US. The only difference is its application, which is relatively "Culture bound".

1.3 MANAGEMENT THEORIES:

Management Theories originated from different principles at different times within the last fifty years. There are different Theories propounded by Management Practitioners and Theorists. These Theories are varied and emanated from different disciplines such as Science, Sociology, Anthropology, Psychology, and Mathematics and so on. The evolution of Management did not come into existence through consciously planned or structured patterns but rather as a result of revolutionary development in a historical sequence. It should be noted therefore that these Theories are uncoordinated, unrelated, scattered and in some cases, controversial. They generate a lot of confusion because they cut across all disciplines and because of this unpleasant scenario, Prof. Koontz called it "Management Theory Jungle" in 1961, the word "Jungle" connotes confusion. The erudite professor classified these theories into the Management Process/ Traditional/Universal School, Empirical School, Human Behavior School, Social System School, Decision Theory School, and Mathematical School. However, there have been alignments and re-alignments in the classification of these Theories over the years. The old and new ideas of Management do not in any way conflict or replace each other rather they co-exist and complement one another especially the new Theories complementing the old ones.

In order to make these Theories more understandable and meaningful and get out of this confusion, efforts have been made to integrate or align the contributions of different people with conscious minds or those who are thinking the same way. They have been grouped as they are related with similar or common bearing or theme or thrust about a particular problem. It is therefore called "SCHOOL OF THOUGHT". Each School has in its own way, made unique contributions to the study of management and the contributors are grouped under different Schools of Management as can be seen in the following chapters.

Chapter Two

THE CLASSICAL OR UNIVERSAL SCHOOL

2.1 FEATURES OF CLASSICAL OR UNIVERSAL SCHOOL OF MANAGEMENT

Believes in one central authority.

Believes that delegation of authority is very important.

Believes that span of control should be well defined.

Believes that there should be clear division between line and staff management.

This School of Thought is further sub-divided into two groups or theories; the Classical Management or Organization and Scientific Management.

2.2 CLASSICAL MANAGEMENT THEORY

Classical is used to qualify things of great value, things that are traditionally accepted or long established. The forerunners in this School are Henri Fayol, Robert Owen, A. Small, J. D. Mooney, Charles Barbage and Max Webber. Under this Theory, there are two sub-approaches; Administrative and Bureaucratic

[A] ADMINISTRATIVE APPROACH:

This approach seeks ways of bringing rationality into the affairs of men and organizations. It focuses on increase production through the work of individual employee and also concerns with how the organization in totality should be managed so as to improve performance. The contributors are and their works are:

i. Henri Fayol - A Frenchman and an industrialist. He is regarded as the father of Modern Operational Management Theory. He developed fourteen principles of management. He believed all businesses are the same world over, that is; businesses are universal. Little was known about him because his book was written in French language until it was translated into English in 1949. He identified common functions of management as Planning, Organizing, and Controlling. His contributions amongst others are codification of the Management principles such as:

a. Division of Labor/Work: a manager should give an employee specialized job or activities to carry out. He said that specialization leads to efficiency and higher productivity

b. Authority and Responsibility: staff or employee's responsibility should be commensurate with the authority given him or her.

c. Unity of Command: an employee can only report to only ONE superior officer (no one should serve two masters).

d. Scalar Chain or Chain of Authority and Communication: the formal line of authority or the chain of authority should be cleared and unbroken from top to bottom through the organogram/organizational chart in which information, directives, responsibility and obedience should flow.

e. Discipline: ensures respect for rules and regulations and authority of command.

f. Unity of Direction: one channel to direct related operations

g. Subordination: one's interest is subordinated to the organization's interest

h. Remuneration: adequate payment of wages and salaries

i. Centralization: authority resides at the centre

j. Order: people and the material should be found in the right place at the right time

k. Equity and Justice: fairness to all

l. Stability: the tenure of personnel must be stable, high degree of worker turn over should be discouraged

m. Initiative: employee should be allowed to think, initiate ideas and execute plan of action independently

n. Esprit de Corp.: unity of effort through harmony of interest or teamwork

ii. Luther Halsey Gulick III was born on January 17, 1892 in Osaka and died on January 10, 1993 in New York. He was expert on public administration. His father was a physician and Camp Fire Girls founder. Gulick graduated from Oberlin College in 1914 and received his Ph.D. from the Columbia University in 1920. He agreed with Frederick Taylor that certain characteristics of organizations make an administrator to be effective. He was in accord with Max Weber in that organizations were hierarchical. He added the concept of span of control limiting the number of people a manager could supervise effectively. He also recommended unity of command because workers should know who they are responsible to in an organization. His homogeneity of work centered on the fact that an organization should not combine dissimilar activities in single agencies. This was the basis of Gulick's major contribution in the area of departmentalization. He expanded Fayol's elements of Management with popular acronym POSDCORB, which made him widely known. P=Planning; O=Organizing; S=Staffing; D=Directing; C=Coordinating; R=Reporting and B=Budgeting

Planning: Gulick said planning is working out in broad outline the things that need to be done and the methods for doing them to accomplish the purpose set for the enterprise. Planning is a futuristic idea of deciding in the present, what a company or person wants to do or achieve in future. Peter Drucker put planning as those who fail to plan, plan to fail; in the same manner, it is better to plan and fail, than not planning at all. Planning entails broad outline of what to be done and method to be used to achieve the goals. Planning does not work in isolation. To be able to plan effectively, one needs to know or determine the past activities, the present and future through forecast. Planning is very strategy in an organization. The objective of organization is an aim of what the organization intends to do and achieve them either in the short, medium or long run. It could be to capture or increase its market shares. The company needs to scan the opportunities available in the market, it either create a new market for its products, expansion of the existing market. It may also mean the introduction of new products. In order to achieve this, it must improve training facilities like changing from manual to full or partial computerization. Develop it workforce with modern marketing strategies. It must also prevent the organization from fallen into temptation or problems that might prevent development and implementation of programs. Planning also include adequate resources needed in an organization as a whole and departmental objectives such as human capital need, physical need, time, financial requirements, production capacity, distributions networks. Goals are therefore needed to achieve these specific targets that will be used to achieve various objectives. Planning is probably the most important aspect of human life and organization survival hinges on it. A company needs to follow some steps in planning in order to make head way. It should be aware of opportunities in environment, establishment of objectives, premises and assumptions, determination of alternative causes of action, which means planning is and must not be a one way jacket. If one's planning does not work well and give pre-determined results, you can pursuit the alternative action. Evaluate all alternative causes, select the best, and formulate a derivative plans. These are numerated by way of budgeting. The advantages of planning cannot be over-looked. It is an avenue to systematize thinking that is very healthy and useful to the top management echelon. Company's efforts are appreciated due to better coordination, company's objectives and policies are sharpened from time to time. Control and standardizations are products of performance development and guide against sudden shock. Performance and failure can be easily measured and predicted. The executives are fulfilled at the end, because of participatory and inputs of all organizational members because both Success and failure are shared. Adequate planning is an ante dose to failure.

Planning leads to better coordination, guide against sudden new developments that can cripple an organization who does not plan ahead, it off set the unexpected changes and uncertainty in the economic, it results in economical operations that would have been enormous if planning was not in place. It encourages systematic development and discourages fractures in the organizational quest for breakthrough.

Organizing making sure men and material resources are available and organized for the overall objectives of the enterprise. This entails division of labor, delegation of authority to individual, dividing the enterprise into different departments and units. It set out span of control and coordination of various units through line staff and technical heads

Staffing: the organization needs qualified personnel and therefore management functions includes recruitment or hiring, selects, retain and train lower cadre staff while middle and top staff are develop. Staffing sometimes refers to as hiring and used interchangeably. 'The whole personnel function of bringing in and training the staff and maintaining favorable conditions of work'

Directing: making sure everybody does his/her job efficiently and effectively. Directing involves motivation, communication, performance appraisal, discipline and conflict resolution amongst the workers. Gulick's opinion it that directing is a continuous task of making decisions and embodying them in specific and general orders and instructions and serving as the leader of the enterprise

Coordinating: the establishment of the formal structure of authority through which work subdivisions are arranged, defined, and co-ordinated for the defined objective and bring all activities and initiatives of various interrelating parts together in an organization

(Continues...)

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