UNIT ONE: INTRODUCTION TO ORGANISATIONAL BEHAVIOUR AND

MANAGEMENT

1.1 Introduction
This unit defines key terms such as Organisational Behaviour (OB), management, and
organisation. It also discusses the evolution of management thought, outlining the major drivers
to the birth and growth of OB and highlights the main contributing disciplines to OB. A
discussion on the models of OB is also included in this unit. This unit also includes an
explanation of the goals of OB and its anchors.

1.2 Aim of the Unit

The aim of this unit is to help you understand what OB is, its origins, and development.

1.3 Objectives of the Unit

By the end of this unit, you should be able to:
➢ Define OB, organisation and management
➢ State the factors influencing behaviour in organisations
➢ Outline the anchors/foundations of OB
➢ Discuss the new developments in OB
➢ Describe the models of OB
➢ Explain the functions of OB

1.4 Meaning of Organisational Behaviour

Organisational Behaviour (OB) is the study of the behaviour of individuals and groups in
organisations. It is concerned with the behaviour of people within organisations. In other
words, it is concerned with studying individual and group patterns of behaviour which is
essential in dealing with the complex behavioural issues in the modern business world
(Mullins, 2005).

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More specifically, OB is the systematic study of the actions and attitudes that individuals
and/or people exhibit within organisations (Robbins, 1988). OB is concerned with the study
of the behaviour of the people within an organisational setting. This involves the understanding
or explaining, prediction and control of human behaviour (Mullins, 2005). According to
Mullins (2007:26) OB is the study and understanding of individual and group behaviour,
and patterns of structure in order to help improve organisation performance and
effectiveness. OB is close to management theory and practice. Some writers view OB as being
synonymous with management but this is not the case because management is a broader
field.

This behaviour is what managers should study critically and manage effectively in order
to ensure performance in their organisations. This is very critical if an organisation is to
make profits and maintain its market share. However, Mullins (2007:26) argues that:

“it is important to emphasize that in most cases the term organisational

behaviour is strictly a misnomer: rarely do all members of an organisation,
except perhaps very small organisations, behave collectively in such a way as
to represent the behaviour of the organisation as a whole. In practice, we are
referring to the behaviour of individuals, or sections or groups of people, within
the organisation.”

People’s behaviour in organisations however cannot be studied in isolation but within a

framework. In other words, the behaviour of people in organisations need be looked at or
studied within a particular context that provides the framework of analysis. This framework
is found within and without the organisation. It includes interactions among the formal
structure, the tasks to be executed, the technology used and methods of carrying out work,
the process of management and external environment.

The study of OB embraces therefore an understanding of: The behaviour of people; The process
of Management; The organisational context in which the process of management takes place;
organisational process and the execution of work, and; Interactions with the external
environment of which the organisation is part. There is a reciprocal relationship between
what happens within and outside organisations (Mullins, 2007)

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The field of OB seeks to replace intuitive explanations with systematic study i.e. the use
of scientific evidence gathered under controlled conditions and measured and interpreted in a
reasonably vigorous manner to attribute cause and effect.

Three types of behaviour that are relevant to OB are Productivity, Absenteeism, and Turnover.
OB is also concerned with Employee Job Satisfaction which is an attitude. The reasons for
this are three fold;

i. There is a link between satisfactions with productivity

ii. Satisfaction is negatively related to absenteeism and turn over
iii. Managers have a humanistic responsibility to provide their employees with jobs that are
challenging and intrinsically rewarding.

OB is specifically concerned with work related behaviour that takes place in organisations.

1.5 Factors Influencing Behaviour in Organisations

Factors influencing behaviour in organisations include the following:

1.5.1 The Individual

According to Mullins (2010), organisations are made up of their individual members. The
individual is a central feature of organisational behaviour and a necessary part of any
behavioural situation, whether acting in isolation or as part of a group, in response to
expectations of the organisation, or as a result of influences of the external environment. Where
the needs of the individual and the demands of the organisation are incompatible, it results in
frustration and conflict. It is the task of management to provide a working environment which
permits the satisfaction of individual needs as well as the attainment of organisational goals.

1.5.2 The Group

Groups exist in all organisations and are essential to their working and performances. The
organisation is comprised of groups of people and almost everyone in an organisation will be
a member of one or more groups, (Ibid). Informal groups arise from the social needs of people
within the organisation. People in groups influence each other in many ways, and groups may
develop their own hierarchies and leaders. Group pressures can have a major influence over
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the behaviour and performance of individual members. An understanding of group structure
and behaviour complements knowledge of individual behaviour and adds a further dimension
to organisational behaviour.

1.5.3 The Organisation

Individuals and groups interact within the structure of the formal organisation. Structure is
created by management to establish relationships between individuals and groups, to provide
order and systems and to direct the efforts of the organisation into goal-seeking activities. It is
through the formal structure that people carry out their organisational activities in order to
achieve aims and objectives, (Mullins, 2010). Behaviour is affected by patterns of
organisational structure, technology, styles of leadership and systems of management through
which organisational processes are planned, directed and controlled. The focus of attention
therefore, is on the impact of organisation structure and design, and patterns of management,
on the behaviour of people within the organisation.

1.5.4 The Environment

All organisations operate within an environment. There are different variables within the
external environment that affect the organisation. For example, technological and scientific
development, economic activity, social and cultural influences and governmental actions have
tremendous impact on organisational operations. The effects of the operations of the
organisation within its environment are reflected in terms of the management of opportunities
and risks and the successful achievement of its aims and objectives, (Ibid). The increasing rate
of change in environmental factors has necessitated the need to study the total organisation and
the processes by which the organisation attempts to adapt to the external demands placed upon
it. These different dimensions above provide contrasting but related approaches to the
understanding of human behaviour in organisations. They present a number of alternative ways
for the study of the subject and extent of related analysis.

1.6 The Anchors/Foundations of Organisational Behaviour

The field of organisation behaviour is underpinned by five basic pillars or foundations, which
create the conceptual framework for studying and understanding organisations. These pillars
have been identified by organisation behaviour scholars and are discussed in subsequent
paragraphs under this section

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1.6.1 Multi–disciplinary Nature
Organisational behaviour is a multi–disciplinary field which has borrowed extensively from
other social science disciplines and to a limited extent, natural science disciplines. The social
science disciplines are in two categories, namely; the traditional disciplines and emerging ones
from which organisational behaviour knowledge has developed. The disciplines which have
enriched the field of organisational behaviour are listed in Figure 1.1 below: Psychology, Social
Psychology, Sociology, Anthropology, Political Science, Economics, Industrial Engineering
and Medicine.

Figure 1.1: Disciplines Contributing to OB

Source: Robbins and Judge (2013).

In addition to these, in recent times, management and medicine have been seen to be also
influencing OB. Management, originally called administrative science, is a discipline
concerned with the study of overseeing activities and supervising people in organisations. It
emphasizes the design, implementation, and management of various administrative and
organisational systems. March and Simon take the human organisation as their point of
departure and concern themselves with the administrative practices that will enhance the
effectives of the system. Management is the first discipline to take the modern corporation as

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the unit of analysis, and this viewpoint distinguishes the disciplines contribution to the study
of OB.

Medicine, on the other hand, is the applied science of healing or treatment of diseases to
enhance an individual’s health and well-being. Medicine has a long-standing concern for both
physical and psychological health, as well as for industrial mental health. More recently, as the
war against acute diseases is being won, medical attention has shifted to more chronic diseases,
such as hypertension, and to occupational health and well-being. Individual behaviour and
lifestyle patterns play important roles in treating chronic diseases. These trends have
contributed to the growth of corporate wellness programmes such as Johnson and Johnson’s
“Live for Life Programme”. The surge in health care costs over the past two decades has
contributed to increased organisational concern with medicine and health care in the workplace
(Robbins, 1988)

1.6.2 Research Nature

Organisational behaviour relies heavily on scientific research methods to generate findings that
lead to shared meanings of organisational practices, experiences and events. This reliance on
scientific research methods of data gathering and interpretation is intended to minimize
personal bias, subjectivity and distortions when studying organisational events and practices.
This claim to objectivity underpins organisational behaviour as a scientific field of study,
involving the formulation of research questions, systematic data collection and testing of
hypotheses against the data in order to give meaning and coherence to organisational events.

1.6.3 Multiple–Levels of Analysis

One school of thought has two levels of analysis, namely; the micro and macro. This narrower
view tends to concentrate only on the individual and the team (group) as the primary units of
analysis while the larger view uses the organisation as a whole, as the main unit of analysis, in
order to get a better understanding of organisational dynamics.

What is known as the multiple–levels of analysis divides the study of organisation behaviour
into three component parts; that is; the individual, the group/team and the organisation.
However, this does not mean that the three are distinct and water tight compartments, as they
are closely related. For instance, at the individual level the behaviours and characteristics of
employees are normally the main focus of study. These tend to concentrate primarily on

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employee motivation, personality, the perceptual process, attitudes and values. At the team
level, the way people interact in organisations is studied by focusing on conflict, team
dynamics, power relationships, leadership and organisational politics; while the organisational
level concentrates on organisational structure and how it relates to people and how
organisations influence and are influenced by the environment in which they operate. However,
the important thing to note is that communications, information systems and gender are present
and relevant at all the three levels, because they at the same time involve the individual, the
team and the organisation (Robbins, 1988)

1.6.4 Contingency Approach

The main thrust of the contingency approach in organisation behaviour is “the idea that a
particular action may have different consequences in different situations “(Tosi and Slocum,
1984). Organisational behaviour scholars argue that there is no single best answer to an
organisational problem, because it all depends on the circumstances and conditions under
which that organisation is operating. Therefore, when faced with an organisational problem,
the best way to solve it or even seize an opportunity is to first of `all understand and diagnose
the situation and then select the best or most appropriate strategy (i.e. behaviour, personality,
structure, etc) which will work under those conditions.

1.6.5 Open Systems Approach

Organisational behaviour has adopted an open systems approach to the study of organisational
events. The open systems approach is derived from the broader systems theory, which uses
anatomical or biological metaphors to depict an organisation as a living organism. In this
analogy, the skeleton represents the structure, the muscles the jobs, the people are seen as its
blood and internal organs, the nervous system as communication or information pathways etc.
These systems of the organisation, as with the human body, overlap and interlink the various
parts or subsystems to create the total organisation.

The system approach derives its raison–d–etre from the contributions of various disciplines,
such as cybernetics, engineering, biology and the natural sciences. Although it has lost some
of its meaning because of its all – embracing nature, it is still a useful tool for studying how
organisations operate and interact with their environments and internal operating subsystems.
A system in the broadest sense, is a set of interdependent elements which are all linked together
by various integrating mechanisms.

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Organisations as systems have been studied in many ways. Some scholars have looked at the
political and government systems. Others have regarded organisations as systems of decision
– making, as socio – technical systems and as open systems interacting with the environment
and linked at different levels by co-ordinating mechanisms. As open systems, organisations
derive their sustenance from the environment but they also affect the environment through their
outputs, which may be in the form of goods and services. The relevance to organisational
behaviour is that in today’s world, an organisation’s survival and success depend on how well
employees sense environmental changes and alter their behaviour patterns to adapt to the
emerging conditions. The opposite is the closed system, expounded by classical management
theorists like Weber, Taylor, Fayol and their contemporaries, which ideally has all the
resources it needs for survival without relying on the external environment. In reality however
organisations can never be truly closed systems.

Organisations obtain from the external environment in the form of resources, such as human
resources, financial resources, raw materials, information, equipment etc. the organisation
consists of various sub – systems which transform the inputs into outputs which are in turn
supplied to the environment. The outputs maybe in the form of tangible products and services,
changes in employee behaviour, increased profits or even loses. Since organisations are not
closed systems they in turn receive feedback from the external environment about the worth of
their outputs and the continued availability of various resources, which constitute the inputs.
The open system, as a process is cyclical in nature and self-sustaining in order for the
organisation to continue to exist and grow.

1.7 Goals of Organisational Behaviour

Apart from developing people skills, the goals of OB are to help Explain/Understand,
Predict and Control human behaviour in organisations. These goals are explained below.

1.7.1 Explanation
When we seek answers as to why an individual did something or behaved in a
particular manner, then we are pursuing the explanation objective. This is the least
important of the three goals of OB from a management perspective because it occurs
affect the fact. Yet if we are to understand a phenomenon, we must begin by trying to

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explain it. We can then use this understanding to determine a connective cause. For example,
one may need to know why employees resign in order to determine if it was something
that could have been prevented. For example, communications, information systems and
gender are present and relevant at all the three levels, because they at the same time involve
the individual, the team and the organisation.

1.7.2 Prediction
The goal of prediction is to have a picture of the future. It seeks to determine what outcome
will result from a given action. Based on the knowledge of the organisation and its
individuals a manager can predict certain behavioural responses to the change. The idea
is for the Manager to anticipate which approaches will generate the least degree of
employee resistance and use that information in making his or her decision.

1.7.3 Control
Control is the most controversial goal of OB. This is controversial because of personal freedom.
Therefore the idea that the person should attempt to get others to behave in same
premeditated way, when the subjects of that control may be unaware that their behaviour
is being manipulated, has been viewed in some circles as unethical and/or repugnant. It is
true that OB can use other technologies that facilitate the control of people. Whether these
technologies should be used in organisations becomes an ethical question and is debate
like. However, the control objective is frequently seem by managers as the most valuable
contribution that OB makes towards their effectiveness on the job.

1.8 New Developments in Organisational Behaviour

The major developments, which have impacted greatly on organisation behaviour in recent
years, are related to the following;

1.8.1 Globalisation
Globalisation refers to a situation, when an organisation extends its activities to other parts of
the world, actively participates in other markets and competes against organisations located in
other countries. Globalisation enables an organisation to connect and co – ordinate it’s

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geographically dispersed units so that it can serve global customers and complete against other
global businesses (McShane and Von Glinow, 2003).

Globalisation has had an influence and effect on the field of organisation behaviour because in
order to remain competitive, organisations have in many cases been forced to restructure their
operations and introduce new forms of communication to remain relevant in this turbulent
environment.

In addition, even though globalisation sometimes results in new career opportunities among
employees because of expanded operations, the process of continuous change and
organisational restructuring and consequent layoffs of staffs, in order to remain competitive
and viable, often lead to increased stress among employees, which is of direct relevance to
organisational behaviour. Globalisation has therefore become a contingency factor as it impacts
and influences the field of organisation behaviour.

1.8.2 Workforce Diversity

The workforce in most organisations, especially those with global reach has become multi-
national and multi- cultural in recent years, mainly because of globalisation. Even at national
level, the increasing representation of minorities, people with disabilities and women in most
organisations, due to equality and human right issues which have assumed centre – stage in
most political systems, have implications for organisational behaviour.

1.8.3 New Employment Relationships

Before the advent of globalisation most employees worked in organisations they felt and where
and life – long employment was more or less guaranteed. However, nowadays this is no longer
the case because most organisations today tend to value employees with relevant and up – to –
date skills and competences instead of loyalty and length of tenure. If employees do not have
the skills and competences required to make the organisation remain competitive they face the
increasing danger of layoff or retrenchment. The workforce therefore has to keep on improving
its employment capabilities through regular training and updating of its competences. This is
potentially stressful to employees who have to keep on learning new skills to remain in
employment.

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Employment relationships have also been affected by the fact that, many employees, especially
in the west do not even go to the office in order to work. They instead work from their own
homes with computers connections to their office. This phenomenon is sometimes referred to
as telecommuting or tele-working, where employees are removed physically from their
organisation’s work place, colleagues and clients, through the use of information technology.
This has implications for organisational behaviour because organisations have to come up with
new ways of managing employment relationships, which are not based on the traditional
organisation with its command and control systems of management. New ways of managing,
supervising, appraising and evaluating employees have to be found since employees have to
manage themselves through self-leadership and find ways of coping with the calmness of
working from home.

1.8.4 Information Technology

The explosion of information technology in recent years has created a lot of opportunities to
“connect people around the planet and allow small business in developing countries compete
in the global market place. Information technology has also given rise to virtual teams and has
made it possible for knowledgeable workers to carry on their business from home,” (Mcshane
and Von Glinow, 2003).

As a result, information technology has challenged traditional management thinking about how
employees should work and interact, how organisations are structured and how they relate to
clients and stakeholders. Information technology has also made it possible to create network
organisations which are linked together through the internet to produce or provide a certain
product or service to clients, without necessarily having any physical contact.

1.8.5 Workplace Value and Ethics

Values are stable and enduring beliefs about what is good and bad or right and wrong in a
variety of situations. They help people in evaluating and defining their priorities, preferences
and desires, which ultimately influence their attitudes, behaviour, motivation and decision
making. Ethics on the other hand refer to the study of moral principles and values that
determine the extent to which certain actions and practices are correct or incorrect and whether
certain outcomes are good or bad.

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Globalisation, which has made many organisations multi-cultural has implications for
workforce values and ethics, because as organisations become more cosmopolitan, differences
in values and ethics also become pronounced and pose a serious challenge for the
organisational cohesion and effectiveness. This is because employees may find that their
personal values conflict with the organisational values which have a multi – cultural
orientation. Organisations are therefore faced with the challenge of aligning and integrating the
values of a diverse workforce with those of the organisation in order to remain competitive and
viable as an entity. Corporate leaders are also always looking for ways and means of developing
or encouraging ethical values, which are compatible with the achievement of organisational
goals.

The ethical challenge is quite significant, because what is right or wrong in the Asian or African
context may be the opposite of the situation, for instance in the developed world where cultural
values and ethics are much more liberal. Workplace values and ethics are therefore emergent
trends which have implications for organisational behaviour.

1.8.6 Customer Expectations and Preferences

Increasingly the customer has a wide range of products and services to choose from. Generally
speaking, the customer has become more discovering in the quality of goods and services
provided by various organisations. As competition increases and a diversity of goods and
services become available, customers will tend to support and give business to those
organisations which provide or deliver high quality goods and services at affordable prices.
Organisations which fail to meet these emerging customers’ expectations, which will face
serious difficulties in their operations, which will pose a serious threat to their very existence.
Further, those organisations which appear to be successful in meeting these expectations, face
the challenge of continuously reconfiguring themselves in order to remain relevant and
competitive. These developments have implications for the manner in which a particular
organisation is structured and manages its workforce in an ever changing and dynamic
environment.

1.9 Models of Organisational Behaviour

No model can explain everything. Managers choose models based on people, technology,
environment and structure. Models can change over time depending on circumstances.
According to Newstrom (1997), the following are the models of organisational behaviour:

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1.9.1 Autocratic Model
This model came about during the industrial revolution, in the 1800’s and 1900’s. It depends
on power. The manager has the power to order employees to perform a given task and punish
those who disobey. The manager has formal and official authority over employees. This model
assumes that employees have to be directed and pushed to work. It is symmetrical to
McGregor’s theory X which assumes that workers inherently dislike work. In this model,
management does the thinking while employees obey orders and depend on the manager.
Employees are tightly controlled and managers can hire and fire them. Its weakness is that it
leads to micromanagement which enables managers to control all details of daily operations.
Managers control time and processes, they put their needs above those of employees, they insist
on complicated approval processes for even the smallest things, and closely monitor all results.

This type of management leads to low employee morale, poor decision-making (no one will
make a decision because he/ she is afraid of the decision being over turned) and high turnover.
As well, employees kept quiet about hating the workplace, they certainly made their feelings
known at home and in the community. This model can get things done but it has high human
costs. It can be useful in crisis situations, within armies or with short-term employees. The
autocratic model is not suitable in present times because it ignores the importance of
understanding people’s needs at the work place. It is also too rigid for today’s ever changing
environment.

1.9.2 Custodial Model

In the late 1800’s, employers realized that employees might work better if their basic needs
were more satisfied, if they were more secure and had a better quality of work life. This was
called paternalism- which is taking care of employees by providing them with benefits to meet
their security needs. The custodial approach depends on economic resources – money for
wages and benefits - to motivate employees. The company has to have enough money to cover
these costs. By the 1930’s most employers were offering welfare programs such as; housing,
medical care and insurance, fewer working hours, sick pay, pensions and paid vacation time
off. The problem with the custodial model is that it leads to dependence on the organisation by
the employee because of the security offered. Employees do not want to leave the organisation,
not so much because they like the job, but because they like or depend on the benefits that go

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with it. In this model, employees may focus on economic rewards. They may be reasonably
content, but may not be highly motivated – just passively cooperative. Companies that adopt
the custodial approach normally have a lower staff turnover. However, employees do not
produce their best work and are not motivated to grow to their full potential.

1.9.3 Supportive Model

The supportive model came from research done in the 1920’s and 1930’s. It depends on
leadership, not authority or money. Through leadership, managers provide a work situation in
which employees can develop. The supportive model assumes that employees want to work
and will take responsibility. It is symmetrical to McGregor’s theory Y which assumes that an
average employee can learn to accept, and even seek, responsibility. Employees are encouraged
to be involved in the organisation. Employees are more strongly motivated because their status
and recognition needs are better met than with earlier models. The supportive approach is not
about money, but about the way people are treated at work. A supportive manager helps
employees solve problems and accomplish their work. However, some managers may agree
with the model but not actually practice it at work. This model is followed widely, especially
in the West, because it responds to employee drives for complex needs. It is especially useful
in production work places. Employees in developing countries are aware of management
practices around the world and are demanding more modern approaches.

1.9.4 Collegial Model

Collegial means people working together cooperatively. In this model, management builds a
feeling of partnership with employees. The environment is open and people participate. The
collegial model is about team work. Managers are coaches to help build better teams.
Employees are responsible – they feel obliged to others on the team to produce quality work.
Employees must be self-disciplined. Many employees feel satisfied that they are making a
worthwhile contribution. This leads to self-actualisation and moderate enthusiasm in the way
they perform. The collegial model is especially useful for creative work, like marketing or
communications or in thinking environments, like education or planning.

1.9.5 System Model

This is the most recent model. In this model, people want more than money, job security and
cooperative teams. Employees today want trust, an ethical workplace, managers who show

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care and compassion and a workplace that has a sense of community. The system model focuses
on identifying, developing and managing the strengths within employees. Managers focus on
helping employees develop feelings of hope, optimism, self-confidence, empathy,
trustworthiness, esteem, courage, efficacy and resiliency. In the system model, managers
protect and nurture their employee to develop a positive workplace culture which leads to
organisational success and committed employees. Both managers and employees need social
intelligence in this model with managers as facilitators.. In the system model, managers and
employees see the mutual benefits and obligations they share in the complex system (the
organisation). Everyone has psychological ownership for the organisation, its products and
services. Everyone feels possessive, responsible and “at home” in the organisation.

Employees can reach a state of self-motivation. Their highest order needs are met. They have
passion and commitment to organisational goals, not just their own personal wants and needs.

Figure 1.2: Models of Organisational Behaviour

1.10 A Brief History of OB

According to Bateman and Zeithaml (1990) during the 1950s, a transition took place in
the human relations approach. Building on the work of more recent contributions to human
relations and administrative management, scholars began to recognize that worker
productivity and organisational success were based on more than the satisfaction of
economic or social needs.

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The revised organisational behaviour, studies and identities management activities that
promote employee effectiveness through an understanding of the complex and dynamic
nature at individual, group and organisational processes. OB focuses on the human aspect
at the organisational and stresses the relationship among employees managers and the
work they perform for the organisation.

1.11 Contributors to Organisational Behaviour

During the 1960s organisational behaviourists heavily influenced the field of management.
Douglas McGregor’s Theory X and Theory Y marked the transition from human relations.
According to McGregor Theory X Managers assume that workers are naturally lazy
and irresponsible and require constant supervision and external motivation to achieve
organisational goals. McGregor further goes on to say that Theory Managers assume
that employees want to work and therefore can direct and control themselves. McGregor
advocated a Theory Y perspective, suggesting that managers would encourage participation
and allow opportunities for individual challenge and initiative would achieve superior
performance. Other major contributors include Chris Argyrols, who recommended greater
autonomy and enriched jobs for workers. And Rensis Likert, who stressed the value of
participative management.

Through the years, OB has constantly emphasized development of the organisation’s

human resource so that individual and organisational goals can be achieved. Like other
approaches it has been criticized for its limited perspective, although more recent
contributions have a broader and more situational view point. In the past few years, many
of the primary issues examined by OB have experienced a rebirth with a greater interest
in leadership, worker participation and incentives and productivity.

1.12 What is an organisation?

Schermerhorn (2001:5) argues that “an organisation is a collection of people working together
to achieve a common purpose. In so doing, the members are able to accomplish tasks that are
far beyond the reach of anyone acting alone.” Praveen (2011:5) states that “when there are
activities of two or more persons, the organisation starts evolving. Organisation may be simple
or complex, micro or macro.” According to Rousseau (1996) in Griffin and Moorhead
(2004:431), “top management determines the direction of an organisation by defining it

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purpose, establishing goals to meet that purpose, and formulating strategies to achieve the
goals.” Griffin and Moorhead (2004:431) argue that “establishing goals converts the defined
purpose into specific, measurable performance targets. Goals keep the organisation on track by
focusing the attention and actions of the members. They give an organisation a forward looking
orientation and force members to think about and plan for the future.”

To effectively pursue a strategy “involves developing an organisation structure and the

processes to do the organisations work,” (Ibid:431). “An organisation structure is the system
of task, reporting, and authority relationships within which the organisation does its work. It
defines the form and function of the organisation’s activities and how the parts of an
organisation fit together,” (Opcit:431).

From the preceding, it can be argued that organisations have a purpose; they attract people;
they acquire resources which they use; they aspire to achieve a set of objectives; and they use
some structure to decide the works and to co-ordinate the activities.

Praveen (2011) states that there are three significant aspects of organisations that need further
explication:
i. Social Inventions: The word "social" as a derivative of society basically means
gathering of people. It is the people that primarily make up an organisation.
ii. Accomplishing Goals: All organisations were formed to achieve specific goals to which
all their efforts are directed. For example, the primary goal of any commercial
organisation is to make profit for its owners.
iii. Group Effort: People/ employees in an organisation interact/ work with each other and
are inter-dependent. Individuals in themselves have physical and intellectual limitations
which can only be overcome by group efforts.

1.13 What is management?

According Hellriegel [Link] (2008), “ordinarily people refer to management as a group of
mangers in an organisation, for example, top management, middle management and lower
management. Management can generally be defined as getting things done through others.” It
can also be defined as the process by which managers create, maintain, and operate a purposeful
organisation through systematic coordinated human efforts. More precisely, “management

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refers to the tasks and activities performed by managers. It refers to the tasks or activities
involved in managing an organisation: planning, organising, leading and controlling,” (Ibid).

Management is often referred to as an art because it deals with the practical application of both
knowledge and skill to achieve an objective. However, since it involves the use of certain
management techniques, principles and theories that are today well developed and organised,
it is also called a science, (Mullins, 2010). It has been argued that the science and art of
management are not mutually exclusive, they are complimentary. As the science of
management improves so should the art of management. A balance between the two is needed.
Management will therefore always be a mixture of both art and science (Mullins, 2010).

1.14 The Management Functions

The following are the functions of management: planning, organising, staffing, directing,
coordinating and controlling.

1.14.1 The Planning Function

Planning, simply put, is a decision making process that pertains to the future. “Planning is the
process of determining the organisations desired future position and deciding how best to get
there,” (Griffin and Moorhead, 2004:31). Planning involves establishing goals and objectives.
It also involves identifying specific tasks to be done and resources to be committed to
effectively achieve the identified goals and objectives, (Hellriegel et. al, 2008).

1.14.2 The Organising Function

“The organising function takes the tasks identified during planning and assigns them to
individuals and groups within the organisation so that objectives set by planning can be
achieved. It provides an organisational structure that enables the organisation to function
effectively as a cohesive whole to achieve quality objectives,” (Ibid). The organisation turns
plans into action.

1.14.3 The Leading Function

This function involves communicating with and motivating members of the organisation to
work together toward achieving the organisations goals, (Griffin and Moorhead, 2004).

18
Leading is not a one off thing, rather it is continuous. The best way for a manager to lead is to
be a good example. He/she must effectively do the things that he/she wants his/her followers
to do.

1.14.4 The Controlling Function

Controlling is the process of monitoring and correcting the performance of individuals, groups
and the organisation a whole in order keep them from deviating from the set goals and
objectives, (Hellriegel et. al., 2008). The controlling function can be related to the function of
a ‘thermostat.’

1.14.5 The Directing Function

To get things done through others, a manager is called upon to direct, supervise, motivate and
lead his subordinates to do the assigned jobs effectively and willingly and strive to achieve the
set objectives. Directing assures the performance of the assigned work by individual
employees. Specifically, it has been defined as the managerial activity of providing all guidance
and inspiration to people at work to carry out their assigned duties of responsibility. It includes
explaining procedures, offering instructions on the job, issuing order and directives and seeing
to it that occurring errors are rectified in time.
1.14.6 The Coordinating Function
“Coordination is the process of unifying and harmonising all activities and effort of the
organisation to facilitate its working and success,” (Mullins, 2010:429). It is a managerial
process whereby the efforts of groups are synchronised or unified, so that the desired objective
is easily achieved. Without coordination, people and departments would lose sight of their roles
within the organisation and be tempted to pursue their own special or personal interest often at
the expense of the organisational goals. Communication plays an important role in
coordination.

19
1.15 Unit Summary
OB can be understood to involve the study of individual and group behaviour in organisations.
An organisation is merely a collection of people who work together in order to achieve a
common purpose. Managers often have to effectively and efficiently plan, organise, lead,
control, direct and coordinate various aspects of their organisation so as to succeed. The goal
of OB is to explain, predict and control individual and group behaviour in organisations.

1.16 Reference/Further Reading

Bateman T.S, and Zeithaml C.P, (1990). Management: Function and Strategy. Illinois, Irwin.

Certo S.C, and Certo S.T, (1992). Modern Management (1st Edition). New Delhi, Sultan Chand
and Sons.

Fayol H. (1984). General and Industrial Management. Belmont, Lake Publishing.

Griffin R.W. and Moorhead G. (2004). Organisational Behaviour: Managing People and
Organisations (7th Edition). New York, Houghton Mifflin Company.

Hellriegel D, Jackson S.E, Slocum J, Staude G, Amos T, Klopper H.B, Louw L, and
Oosthuizen T (2008). Management (3rd Edition). Capetown. Oxford University Press- Southern
Africa.

Johnson J.A and Breckson D.J (2007). Managing Health Education and Promoting
Programmes: Leadership Skills for the 21st Century (2nd Edition). Boston, Jones and Bartlett
Publishers.

Kwok A.C.F, (2014). The Evolution of Management Theories: A Literature Review. Nang
Yang Business Journal, Vol. 3, Issue 1, pp 28- 40.

Mahmood Z, Basharat M, and Bashir Z, (2012). Review of Classical Management Theories.

International Journal of the Social Sciences and Education, Vol. 2, Issue 1, pp 512- 522.

Mcshane S.L and Von Glinow M.A (2008). Organisational Behaviour: Emerging Realities for
the Workplace Revolution (4th Edition). Boston, McGraw Hill Irwin.
20
Mullins J.L, (2007). Management and Organisational Behaviour. New Jersey, Pearson Ltd.

Mullins J.L. (2010). Management and Organisational Behaviour (9th Edition). Munich,
Prentice Hall.

Newstron J.W (1997). Organisational Behaviour. Boston, McGraw Hill Irwin.

Prasad R.D, Prasad V.S, Satyanarayana P, and Pardhasaradhi Y. (2013). Administrative

Thinkers. New Delhi, Sterling Publishers Ltd.

Praveen M.V. (2011). Organisational Behaviour: University Study Guide. Malappuram,

Calicut University.

Robbins S.P. (1988). Essentials of OB Engleward. Cliffs, New Jersey.

Robbins S.P. and Judge T.A. (2013). Organisational Behaviour (15th Edition). New Jersey,
Pearson Education Inc.
Rodrigues C.A (2001). Fayol’s 14 Principles of Management then and now: A Framework for
Managing Today’s Organisations Effectively. New Jersey, Montclair State University Press.

Rousseau D.M and J.M. Parks (1993). “The Contracts of Individuals and Organisations” in
Griffin R.W. and Moorhead G. (2004). Organisational Behaviour: Managing People and
Organisations (7the Edition). New York, Houghton Mifflin Company.

Rousseau D.M (1996). “Changing the Deal while Keeping the People” in Griffin R.W. and
Moorhead G. (2004). Organisational Behaviour: Managing People and Organisations (7the
Edition). New York, Houghton Mifflin Company.

Sarker S.I and Khan M.R.A, (2013). Classical and Neoclassical Approaches of Management:
An Overview. Journal of Business and Management, Vol. 14, Issue 6, pp 1- 5.

Schermerhorn J.R. (2001). Management (6th Edition). New York, John Wiley.

21
Tosi, H. and Slocum, J. (1984). Contingency theory: Some suggested directions. Journal of
management. Vol. 10, pp 9-26.

1.17 Review Questions

Q.1 Write REASONABLE notes on any five (5) of the following:

(a) Organisational behaviour.

(b) The organisation as an open system.
(c) The organisational iceberg.
(d) Levels of analysis in OB.

Q.2 What is:

a) an organisation?
b) management?
c) organisational behaviour (OB)?
d) the difference between management and OB?
Q.3 What are the:
a) goals of OB?
b) basic pillars/foundations of OB?
c) types of behaviours that are relevant to OB?
e) major disciplines which have made important contributions to OB?
f) new developments in OB?

Q.4 Discuss the origin, nature and scope of organisational behaviour as an academic discipline.

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 UNIT TWO: EARLY PIONEERS OF MANAGEMENT AND SCIENTIFIC
MANAGEMENT

2.1 Introduction
The definition of management emphasises the achievement of organisational objectives
through working with and through individuals and groups. By implication, management is
about managing individuals and groups not only to achieve individual and group objectives but
also organisational objectives. However, management has evolved over the years parallel to
the developments in organisations. It is therefore important to understand the various
management theories and their impact on OB. This unit therefore explores the various
management theories that have influenced the management of individuals and groups in
organisations.

There are many views of management, or schools of management thought, that have evolved
over the years. What follows is a brief discussion of some of the theories of management that
have greatly affected how managers manage today. However, the unit begins by discussing the
early pioneers who contributed to what can be referred to as modern management.

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2.2 Early Pioneers of Modern Management (Pre-Classical Scholars of Management)
According to Efere (2005: 1-9) although management contributors under the Classical School
are usually considered as the earliest management theorists, there are several other contributors
that predated those of the Classical School. Some of these pioneers of modern management are
examined below. During the pre-classical period of the middle and late 1800s, management
theories and principles were developed by several contributors. Principal among these were
Robert Owen, Charles Babbage and Henry R. Towne.

(a) Robert Owen (1771 – 1858)

Robert Owen was born in Newtown, Montgomeryshire in Wales, United Kingdom, to Robert
Owen (Senior) who was a saddler, ironmonger and the postmaster of the village. Influenced by
both his father and brother who were both saddlers, Robert Owen worked as an apprentice
saddler with several people and later established his own business and in 1790, formed
partnership business with two other Scotsmen James McConnell and John Kennedy. In 1792,
he was appointed as the manager of the Piccadilly Mill, a spinning factory owned by Mr Peter
Drinkwater, where he became well known for his efficiency and outstanding management
skills.

Robert Owen was considered as kind man, who treated his staff very well. He kept proper
business records and the business became successful. Some of Robert Owen’s contributions to
management are he:

• Showed respect and dignity towards the staff

• Introduced better working conditions

• Raised the minimum wage for child labour, as he also started working at a grocery shop at
the age of 9 years

• Reduced working hours

• Provided meals for his staff.

Though he had no known formal university education, he studied very widely on his own.

(b) Andrew Ure (1778 – 1857)

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Unlike Robert Owen, Andrew Ure was very well educated and became known as one of the
first person to provide formal teaching of management principles at Anderson’s College in
Glasgow, Scotland.

Andrew Ure was born in Glasgow and studied medicine at the University of Edinburgh. He
worked as an army surgeon and later settled in Glasgow, where he became a member of the
Faculty of Physicians and Surgeons in 1803. He was later appointed as Professor of Natural
Philosophy (specialising in Chemistry and Physics) at Anderson’s College (now the University
of Strathclyde) in Glasgow. He introduced a framework for the formal teaching of management
principles.

(c) Charles Babbage (1791 – 1871)

Another great contributor in the development of modern management is Charles Babbage. The
exact place where Babbage was born is unclear, but some believe that he was born in Walworth
(Surrey), now London. Others think that he was born in Teignmouth in Devonshire. His father
was Benjamin Babbage (a banker) and his mother was Elizabeth Teape.

Charles Babbage first attended Trinity College but later transferred to Peterhouse College,
University of Cambridge and graduated with an MA in Mathematics in 1817. He was elected
a fellow of the Royal Society and later became a Lucasian Professor (chair) of mathematics at
the University of Cambridge from 1828 to 1839, a post that was previously held by Isaac
Newton.

Some of the many contributions of Charles Babbage are:

• He developed a detailed plan for the ‘Calculating Engine’, the ‘Difference Engine’ and the
‘Analytical Engine’. It was these principles that led to the invention of the computer. Thus, he
is known as the father of computing. He could not complete the building of the machine himself
because the government refused to fund the project.

• His scientific principles also led to the development of the study of a branch of management
called operational research, which is the quantitative aspect of management.

25
• He developed mathematical code breaking.

• He also developed mortality tables, which are still used by the life assurance industry.

• In 1826 he also developed the table of logarithms from 1 to 108000.

• He founded the Astronomical society in 1820, the British Association for the Advancement
of Science in 1831 and the Statistical Society in 1834. He later lived and died in London.

(d) Augusta Ada Byron (Lady Lovelace) – (1815-1852)

Born in Piccadilly, London, Augusta Ada Byron was the daughter of a famous poet Lord
George Gordon Byron and her mother was Anne Isabelle Milbank (Lady Byron), a
mathematician. Ada married William King, the Earl of Lovelace, so became the Countess of
Lovelace (Lady Lovelace).

She became interested in mathematics and when at the age of seventeen, she was introduced to
Mrs Mary Somerville, a translator (who encouraged Ada in her mathematics studies) Ada was
even more determined to study.

She was particularly excited when she heard about Charles Babbage’s work on ‘calculating
engine’, ‘difference engine’ and ‘analytical engine’. What happened was that in 1841, Babbage
had reported his developments at a seminar in Turin, Italy. An Italian named Menabrea then
summarised and published Babbage’s work in French. Inspired by what she had learnt, Ada
translated Menabrea’s summary into English and added her own notes, which included a
prediction that Babbage’s engine, if developed, could:

• Compose complex music

• Produce graphics

• Can be used for both practical and scientific purposes

Ada later suggested to Babbage on writing a plan on how his futuristic engine might calculate
Bernoulli numbers (these are certain very important sequences in mathematics, that were
developed by Jakob Bernoulli (1654- 1705). Basically, though unknown to her, Ada developed
the world’s first computer software. In recognition for her contributions, the US Department
of Defence developed a computer software in 1979 and named it ‘Ada’.

26
(e) Henry R. Towne
Henry R. Towne (1844–1924) was a mechanical engineer who was President of Yale and
Towne Manufacturing. In 1886, he delivered a paper titled ‘The engineer as an
economist’. He argued for the establishment of a science of management (Towne 1886).
His paper ignited engineers’ interest in addressing business problems (Rue & Byars
2003).While these early pioneers explored several avenues related to management, their
efforts were uncoordinated. They focused on developing specific techniques to solve
particular problems.

2.4 The Classical School

Writers discussed under the classical school are the most talked about early contributors in
modern management. The classical viewpoint emphasises managing work and the need to
run organisations efficiently. The viewpoint is called ‘classical’ because it includes the
first works and contributions that comprise the core of modern management theory
(Bluedorn, 1986). The general emphasis under the classical theories is that of efficiency,
bureaucracy, scientific and administrative management.

The classical school of management thought emerged throughout the late 1800s and early
1900s as a result of the Industrial Revolution. Since the beginning of time, managers have
needed to know how to perform the functions discussed earlier. The Industrial Revolution
emphasized the importance of better management as organisations grew larger and more
complex. As industry developed, managers had to develop systems for controlling inventory,
production, scheduling, and human resources. It was the managers who emerged during the
Industrial Revolution, many who had backgrounds in engineering, who discovered that they
needed organised methods in order to find solutions to problems in the workplace.

Classical management theorists thought there was one way to solve management problems in
the industrial organisation. Generally, their theories assumed that people could make logical
and rational decisions while trying to maximise personal gains from their work situations. The
classical school of management is based on scientific management which has its roots in Henri
27
Fayol's work in France and the ideas of German sociologist Max Weber. Scientific
management is a type of management that bases standards upon facts. The facts are gathered
by observation, experimentation, or sound reasoning. In the United States, scientific
management was further developed by individuals such as Charles Babbage (1792–1871),
Frederick W. Taylor (1856–1915), and Frank (1868–1924) and Lillian (1878–1972) Gilbreth.

2.4.1 Scientific Management

Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American mechanical
engineer who sought to improve industrial efficiency. He is regarded as the father of scientific
management and was one of the first management consultants. Taylor was one of the
intellectual leaders of the Efficiency Movement and his ideas, broadly conceived, were highly
influential in the Progressive Era (Jones and George, 2003:36-37).

Frederick .W. Taylor is best known for defining the technique of scientific management and
he defined scientific management as the systematic study of the relation between people and
the task which they do for the purpose of redesigning the entire work process to increase
efficiency or the quality of doing or performing a task or work well with no waste of time or
money.

Taylor was a manufacturing manager who eventually became a consult and taught many other
managers how to apply his scientific management techniques. He believed that if the amount
of time and effort that each employee expend to produce a unit of service ( a finished good or
service) can be reduce by increasing and division of labour, then the production process will
become more efficient or rather more productive. He argued that the best way to create the
most efficient division of labour could best be determine using scientific management, rather
than the informal rule of the thumb knowledge.

Based on his experiments and observations as a manufacturing manager in a variety of settings,

he developed the commonly four principles of Scientific Management to increase efficiency in
the work place and increase productivity of the organisation.

Principle 1: Study the way employees perform their tasks, gather all informal job knowledge
employees’ posses and experiment with the ways of improving how tasks are performed.

28
To discover the most efficient method of performing specific tasks, Taylor studied in great
details and measured the way different employees went about performing their tasks. One of
the main tools he used in his study was a time and motion study, which involved the careful
timing and recording of the actions taken to perform a particular task. Once Taylor understood
the existing method of performing a particular task, he then experimented to increase
efficiency. He tried different methods of dividing up and coordinating the various tasks
necessary to produce a finished product. Usually, this meant simplifying jobs and having each
employ perform few, more routine tasks as at the pin factory or on ford car assembly line.
Secondly, Taylor also sought to find ways to improve each employee’s ability to perform a
particular tasked. For example, by reducing the number of motions employees made to
complete the task, by changing the layout of the work area or the type of tools employed used,
or by experiment with tools of different sizes.

Principle 2: Codify or define clearly and orderly the new methods of performing tasks into
written rules and standard operating procedures (SOPs).

Once the best method of performing a particular task was determined, Taylor specified that it
should be recorded so that the procedure could be taught to all the employees performing the
same task. These rules could be used to further standardize and simplify jobs essentially to
make jobs even more routine. In this way efficiency could be increased throughout an
organisation.

Principle 3: Carefully select employees so that they posses skills and abilities that match the
needs of the task, and train them to perform the task according to the established rules and
procedures.

To increase specialization, Taylor believed employees had to understand the tasks that were
required and be thoroughly trained in order to perform the task at the required level. Employees
who could not be trained to this level were to be transferred to job where they were able to
reach the minimum required level of proficiency.

Principle 4: Establish a fair or acceptable level of performance for a task, and then develop
a pay system that provides a reward for performance above the acceptable level.

To encourage employees to perform at highest level of efficiency and to provide them with an
incentive to reveal the most efficient techniques for performing a task, Taylor advocated that
29
employees benefit from any gains in performance. They should be paid a bonus and receives
some percentage of the performance gains achieved through the more efficient work process.

Besides the four principles of scientific management, Taylor also developed the concept of
functional foremanship. This meant that every function a worker performed at the place of
work must be supervised by a foreman. If a worker performs too many functions, he must be
supervised by many foremen. The foremen should be the one to determine workers eligibility
to bonus. In this case efficiency is likely to increase once the foreman does the job.

Other Contributors to Scientific Management: The Gilbreths

Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-1972) were followers of Taylor who
refined Taylor’s analysis of work movements and made many contributions to time and motion
studies (Jones and George, 2003). Their aims were to:

(i) Breakup and analyze every individual action necessary to perform a particular task
into each of its component actions.
(ii) Find better ways to perform each component action
(iii) Reorganize each of the component actions so that the action as a whole could be
performed more efficiently at a less cost in time and effort.

In one of their experiment, the Gilbreth filmed a worker performing a task and then separated
the task actions frame by frame, into their component movement. Their goal was to maximise
the efficiency with which each individual task was performed so that gains across task would
add up to enormous saving of time and effort.

Their attempts to develop improved management principles were captured at times quite
humorously in the movie cheaper by the dozen, a new version of which appeared in 2004,
which depicted how the Gilbreths (with their 12 children) tried to lead live their own lives
according to these efficiency principles and apply them to daily actions such as shaving,
cooking and even raising family.

Eventually, the Gilbreths became increasingly interested also in the study of fatigue. In their
experiment they studied how the physical characteristics of the work place contributed to job
stress that often lead to fatigue and thus poor performance. They isolated factors that result in
worker fatigue such as the following:
30
 (i) Lighting
(ii) Heating
(iii) The color of the wall and
(iv) The design of tool and machines workers used.

Their pioneering studies paved the way for new advances in management theory. In workshops
and factories, the work of the Gilbreths, Taylor and many others had a major effect on the
practice of management (Case studies of Franklin motors and Henry Ford).

In comparison with the old crafts system (based on the rule of the thumb), jobs in the new
system were more repetitive, boring, and monotonous as results of the application of scientific
management principles and workers became increasingly dissatisfied (because workers were
trained to perform the same task over and over e.g. Fordism).

Frequently, the management of work setting became a game between workers and managers:
managers tried to initiate work practices that increased performance and workers tried to hide
the true potential efficiency of the work setting to protect their own well- being (e.g. Franklin
Motors).

[Link] Implications of Scientific Management

The combination of the four principles constituted the base of scientific management. Viewed
in the context of its own times, scientific management was a revolutionary concept. It brought
drastic change in the whole approach to industrial management. Through it, wastage of human
and material resources was greatly minimized, hence effecting a better and efficient utilization
of labour and material. It helped in the standardization of work procedure and improvement of
working conditions in factories. Labour was greatly benefited by higher wages, better
placements and training, limiting of working hours and the general improvement in working
facilities.

The scientific management movement also provided effective guidelines to the management to
develop an effective organisation. Taylor was the first management thinker to introduce and
stress the five postulates of management which include research, standards, planning, control
and mutual collaboration between labour and management. These five principles are regarded
as the bedrock of every successful management.

31
Taylor’s system of scientific management had become nationally known and many instances
faithfully and fully practiced. However, many managers in many organisations chose to
implement the new principles of scientific management selectively and this decision ultimately
resulted in problems. For example, some managers using scientific management obtained
increases in performance and output, but rather than sharing performance gains with employees
through bonuses as Taylor had advocated, they simply increased the amount of work that each
employee was expected to do.

Many employees experiencing the reorganised work system found that, as their performance
increased, their managers required them to do more work for the same pay. They also learned
that increases in performance often meant fewer jobs and a greater threat of layoff, because
fewer employees were needed. In addition, the specialised, simplified jobs were often
monotonous and repetitive and many employees became dissatisfied with their jobs.

Hence, it can be seen that from the performance perspective or point of view, the two
management practices i.e. achieving the right mix of employees(task specialization) and (2)
linking people and tasks by the speed of the production line resulted in the huge saving in
production cost and huge in output that occur in organised work settings. For example, for
example in 1908, managers at Franklin motor company using scientific management principles
redesigned the work process and the output of cars increased from 100 cars a month to 45 cars
a day, employees wages however, increased by only 90 percent.

[Link] Limitations of the Scientific Management Approach (Criticism)

The scientific management movement aroused much criticism and apprehension in various
quarters.

(1) It has been alleged that the movement was mainly concerned with organisational
efficiency viewed in purely mechanistic terms. Hence, the basic needs of scientific
management were incompatible. Scientific management concerned itself mainly with
production efficiency problems, without touching on the psychological and emotional
problems of workers, the routine and monotony of their work and uncertainty of
employment.
(2) Some critics’ claim that, the motivation assumption of scientific management were too
simplistic. They have argued that workers are not solely motivated by money and
Taylor ignored the main social and Psychological factors related to the job such as the
32
 need to be loved and treated like a human being, respected, and praised for good
performance and the need to be appreciated.
(3) Secondly most critics of scientific management approach suggest that, the approach
underestimate the capacity of workers and viewed them as parts of the machine
performing simple and repetitive tasks.
(4) Critics also believe that the approach had an authoritarian leadership approach. Hence,
unions strongly opposed its implementation in many organisations because they
believed that management had the power to set standard and the peace rates or pay rates
which potentially exploited workers and diminishing their importance.
(5) Most writers did recognize that the scientific management approach was not concerned
with the problems of senior manages or executives (management of the organisation).It
also ignored the broader relationship between the organisation and its external
environment. It mainly focused on the internal operations of a company particularly,
those on the factory level.
(6) Scientific selection (or merit recruitment based on technical qualification and
competitive examination) of workers is ideal, but it does not guarantee high
performance or efficiency. Furthermore, although training of workers is vital, it
nevertheless can drain an organisation’s resources without necessarily bringing any
returns. Suppose for instance, that organisation train workers who then decide to leave
the organisation thereafter. Does that organisation benefit from its investment, certainly
not? Most organisations today prefer to engage people that are already trained and
experienced, so that there is no loss of resources in training and development. But again
one cannot guarantee the loyalty of such employees to the organisation which did not
train them.

However, the significance and importance of the theory cannot be underestimated by these
criticisms. The true worth of scientific management can be measured by the growth of a science
of management through the application of scientific methods. As noted earlier, he recognised
the importance of mutual collaboration between workers and management as one of the
principles for raising industrial efficiency. Besides, improvement of the working conditions of
labour was his chief concern. One of the by-products of Taylorism was that worker came to be
paid and better trained, besides working in more congenial (pleasant) conditions than before.

33
However, the essence of this theory that speed, cost and quality of goods and services were
dependent variables and that they could be maximised by adjustment of independent variables
such as division of labour, methods of supervision, financial incentives, flow of materials and
lastly, physical methods and condition are still true to a great extent.

2.5 Unit Summary

In order to understand the meaning, nature and scope of OB and its history, one needs to
appreciate the contributions made by the early pioneers of management and the classical school
beginning with Taylor’s Scientific Management. Early pioneers of management, such as,
Robert Owen, Andrew Ure, Charles Babbage, Augusta Ada Byron and Henry Towne, made
useful contributions as to the study of organisations, in general, and workers, in particular.
Their work, in part, has influenced influence the growth of modern management and OB.

Frederick Winslow Taylor’s Scientific Management approach espouses the need to create “one
best way” of executing work activities in organisations. Although Taylor’s work has been
criticised for this, scientific management to date has provided effective guidelines for managers
to develop effective organisations. Hence, Taylor’s five principles are regarded as the bedrock
of successful management and organisations. Followers of Taylor, such as Frank and Lillian
Gilbreth, attempted to develop improved management principles. Their focus on the worker, a
cornerstone of OB, has been widely recognised in modern day management and OB.

2.6 References/Further Reading

Bluedorn, A.C (1986). Review of Scientific Management by F.W. Taylor. Academy of
Management Review. Vol. 11, pp 443-447.

Jones G. and George J. (2003). Contemporary Management (5th Edition). New Jersey, Pearson
Education Inc.

Taylor, F.W (1911). The Principles of Scientific Management. New York, Harper Bros.

34
2.7. Review Questions
Q1. Explain in detail the contributions made by the early pioneers of management.

Q2. Identify and discuss the principles of Scientific Management as outlined by Frederick
Winslow Taylor.

Q3. Discuss the contributions made by Frank and Lillian Gilbreth to the Scientific
Management Approach

35
 UNIT THREE: ADMINISTRATIVE MANAGEMENT THEORY

3.1 Introduction
The next step in understanding the context of OB and management is the discussion of yet
another pair of theories within the classical school. These theories which constitute the
Administrative Management Theory include Max Weber’s theory of Bureaucracy and
Frederick Taylor’s 14 principles of management.

3.2 Administrative Management Theory

Administrative management focuses on the study of how to create an organisational structure
and control system that leads to high efficiency and effectiveness. On the other hand
organisation structure is the system of task and authority relationships that control how
employees use resource to achieve the organisation’s goals (Jones and George, 2003).
Two of the most influential early views regarding the creation of efficient systems of
organisational administration were developed in Europe by:

(a) Max Weber, a Germany professor of sociology who developed the theory of
Bureaucracy and
(b) Henri Fayol, the French manager (CEO of Comambault Mining) who developed the 14
Principles of Management.

3.2.1 The Theory of Bureaucracy

Max Weber lived between 1864 and 1920 and propounded the theory of bureaucracy at the
turn of the 20th century, when Germany was undergoing its industrial revolution. In order to
help Germany manage its growing industrial enterprises at the time when it was striving to
become a world super-power, Weber developed the principle of bureaucracy (Jones and
George, 2003).

36
Bureaucracy refers to a formal system of organisation and administration designed to efficiency
and effectiveness. A bureaucratic system of administration is based on five principles and these
principles are as follow:

Principle 1: In a bureaucracy, a manager’s formal authority derives from the position he or

she holds in the organisation.

Authority is by definition refers to the power to hold people accountable for their actions (either
wrong or right actions) and to make decisions concerning the use of organisational resources.
Authority gives the manager the right to direct and control subordinates’ behaviour to achieve
organisation goals. In a bureaucratic system of administration, obedience is owed to a manager,
not because of any personal qualities such as personality, wealth, or social status but because a
manager occupies a position that is associated with a certain level of authority and
responsibility.

Principle 2: In bureaucracy people should hold positions because of their performance, not
because of their social standing or personal contacts.

This principle was not always followed in weber’s time and is often ignored today. Some
organisations and industries are still affected by the social networks in which personal contacts
and relations, not job-related skills, influence hiring and promotional decisions.

Principle 3: The extent of each positions formal authority and task responsibilities, and its
relationship to other positions in an organisation, should be clearly defined or specified.

When the tasks and authority associated with various positions in the organisation are specified,
managers and workers know what is expected of them and what to expect from each other.
Moreover, an organisation can easily hold its employees for their actions when they know their
responsibilities.

Principle 4: Authority can be exercised effectively in an organisation when positions are

arranged hierarchically, so that employees know whom to report to and who reports to them.

37
Managers must create an organisational hierarchy of authority that makes it clear who reports
to whom and to whom managers and workers should go if conflicts or problems arise. This
principle is especially important in the armed forces e.g. Zambia army, Zambia national
service, Zambia policy and Zambia air force and other organisations that deal with sensitive
issues involving possible major repercussions. It is important in this case that managers at high
level of the hierarchy hold their subordinates accountable for their actions.

Principle 5: managers must create a well-defined system of Rules, standard operating

procedures, and norms so that they can effectively control behaviour within the organisation.

Rule are formal instructions that specify the actions to be undertaken under different
circumstances to achieve specific goals ( for example if A happens do B).On the other hand,
standard operating procedures (SOPs) are specific set of written instructions about how to
perform a certain aspect of a task. A rule might state that at the end of the workday employees
are to live their machines in good order and a set of SOPs would specify just how exactly they
should do so, for instance, itemizing which machine should be oiled or replaced. Norms are
unwritten, informal codes of conduct that prescribes how people should act in a particular
situation. For example, an organisation norm in a restaurant might be that waiters should help
each other if time permits. Rules, SOPs and norms provide behavioural guidelines that increase
the performance of bureaucratic systems because they specify the best ways to accomplish
organisational task.

[Link] Implications of the Theory of Bureaucracy

Weber believed that organisations that implement all the five principle establish a bureaucratic
system that improves the organisational performance. The specification of positions and the
use of rules and regulation and SOPs to regulate how tasks are performed make it easier for
managers to organise and control the work of subordinates.

Similarly, fair and equitable selection and promotion systems improve manager’s feelings of
security, reduce stress and encourage organisational members to act ethically and further
promote the interest of the organisation.

[Link] Limitations of the Theory of Bureaucracy

On the other hand, if bureaucracies are not well managed, many problems can result.
Sometimes, managers allow rules and SOPs, Bureaucratic red tape to become so cumbersome
38
that decisions making is slow and inefficient and organisations are unable to adapt to change.
When managers depend so much on rules to solve problems and not enough on their skills and
judgment, their behaviour becomes inflexible. Therefore, a key challenge for manager is to use
bureaucratic principles to benefit, rather than harm, an organisation.

3.2.2 Fayol’s 14 Principles of Management

Henri Fayol (1841-1925) was a CEO of Comambault Mining. Working at the same time as,
but independently from Weber, Fayol identified the 14 principles that he believed essential to
increase the efficiency of the management process. Although these 14 principles were
developed at the turn of the 20th century, they remain the bedrock on which much of recent
management theory and research is based. In fact modern writers such as well-known
management guru Tom peters continue to extol these principles (Jones and George, 2003).
Fayol’s 14 principles are discussed below.

a) Division of Labor
A champion of job specialization and division of labour for reasons already mentioned, Fayol
was nevertheless among the first to point out the downside of too much specialization: boredom
i.e. a state of mind likely to cause a fall in product quality, worker initiative, and flexibility. As
a result Fayol advocated that workers be given more be given more duties to perform or be
encouraged to assume more responsibilities for work outcomes, a principle increasingly
applied to day in organisations that empower their workers.

b) Authority and Responsibility

Like Weber, Fayol also emphasised the importance of authority and responsibility. Fayol
however went beyond Weber’s formal authority, which derives from the manager’s position in
the hierarchy, to recognize the informal authority that derives from personal expertise,
technical knowledge, moral worth, and the ability to lead and to generate commitment from
subordinates.

c) Unity of Command
The principle of unity of command specifies that an employee should receive orders from and
report to, only one superior. Fayol believed that dual command, the reporting relationship that
exists when two superiors give commands or orders to the same subordinate, should be avoided

39
except in exceptional circumstances. Dual command confuses subordinates, undermines order
and discipline, and creates havoc within the formal hierarchy of authority. Additionally
assessing any manager’s authority and responsibility in a system of dual authority command is
difficult and the manager who is bypassed feels slighted (very small in degree or power and
authority and angry and may be uncooperative in future.

d) Line of Authority
The line of authority is the chain of command extending from the top to the bottom of an
organisation. Fayol was one of the first theorists to point out the importance of limiting the
chain of command by controlling the number of the levels in the managerial hierarchy. The
greater the number of levels in the hierarchy, the longer the communication between managers
at the top and bottom takes and the slower the pace of the planning and organising. Restricting
the number of the hierarchical levels to lessen these communication problems enables an
organisation to act quickly and flexibly. This is one reason for the recent trend toward
restructuring.

On the same, Fayol also pointed out that when organisations are split into different departments
or functions, each with its own hierarchy, it is important to allow middle and first line managers
in each department to interact with managers at similar levels in to other departments. This
interactions help speed the decision making process, because managers know each other and
know whom to go to when problems arise. For cross-departmental integration to work, Fayol
noted the importance of keeping ones superior informed so that the lower-level decisions do
not harm activities taking place in other parts of the organisation. One alternative to cross-
departmental integration is to create cross-departmental teams controlled by a team leader.

e) Centralisation
Fayol was one of the first writers to focus on centralization, the concentration of authority at
the top of the hierarchy. Fayol believed that authority should not be concentrated at the top of
the chain of command. One of the most significant issues that top managers face is how much
authority to centralise at the top of the organisation and what authority and what authority to
decentralise to managers and workers at lower hierarchical levels. This is very important
because it affects the behaviour of people at all levels in the organisation.

40
On the other hand, if authority is centralised, only managers at the top make important
decisions, and subordinates simply follow orders. This arrangement gives managers great
control over organisational activities and helps ensure that the organisation is pursuing its
strategy, but it makes it difficult for people who are closest to the problem to respond to them
in a timely manner. It also can lower the motivation of middle and first-line managers and make
them less flexible and adaptable because they become reluctant to make decisions on their own,
even when doing so is necessary. They get used to passing the buck. However, in today’s
organisations the pendulum is now swinging towards decentralization, as they seek to empower
middle managers and create self-managed teams that monitor and control their own activities
to increase organisational flexibility and to reduce operating costs and increase efficiency.

f) Unity of Direction
Just as there is unity of command, there is also need for unity of direction, the singleness of
purpose that makes possible the creation of one plan of action to guide managers and workers
as they use organisational resources. Organisations without a single guiding plan become
inefficient and ineffective, their activities also become unfocused, and individuals and groups
work at cross purposes. Successful planning starts with top managers working as a team to craft
the organisation’s strategy, they communicate to middle managers, who decide how to use
organisational resources in order to implement the strategy.

g) Equity
As Fayol wrote “For person to be encouraged to carry their duties with all the devotion and
loyalty of which they are capable, they be treated with respect for their own sense of integrity,
and equity results from the combination of respect and justice. Equity, the justice, impartiality
and fairness to which all organisation members are entitled is receiving much attention today;
the desire to treat employees fairly is a primary concern for many managers.

h) Order
Like Taylor and the Gilbreths, Fayol was interested in analyzing jobs, positions and individuals
to ensure that the organisation was using resources as efficiently as possible. To Fayol order
meant the methodical arrangement of positions to provide the organisation with the greatest
benefit and to provide employees with career opportunities that satisfy their needs. Thus Fayol
suggested the use of organisational charts to show the position and duties of each employee
and to indicate which positions an employee might move to or be promoted to in the future. He
41
also advocated that managers engage in extensive career planning to help ensure orderly career
paths. Career planning is of primary interest today as organisations increase the resources they
are willing to devote to training and developing their workforce.

i) Initiative
Although order and Loyalty are important to foster commitment and loyalty among employees,
Fayol believed that managers must also encourage employees to exercise initiative, the ability
to act on their own, without direction from a superior. Used properly, initiative can be a major
source of strength for an organisation for an organisation because it leads to creativity and
innovation. Managers need skill and tact to achieve the difficult balance between the
organisation’s need for order and employees need for initiative. Fayol believed that the ability
to strike this balance was a key indicator of a superior manager.

j) Discipline
In focusing on the importance of discipline-obedience, energy, application, and other outward
marks of respect for a superior’s authority, Fayol was addressing the concern of many early
managers: how to create a workforce that was reliable and hardworking and would strive to
achieve organisational goals. According to Fayol, discipline results in respectful relations
between organisational members and reflects the quality of an organisation’s leadership and a
manager’s ability to act fairly and equitably.

k) Remuneration of Personnel
Fayol proposed reward systems including bonuses and profit-sharing plans, which are
increasingly utilised today as organisations seek improved ways to motivate workers.
Convinced from his own personal experience that the organisational payment system has
important implications for organisational success, Fayol believed that effective reward systems
should be equitable for both employees and the organisation encourage productivity by
rewarding well directed effort, not to be subjected to abuse, and be uniformly applied to
employees.

l) Stability Of Tenure of Personnel

Fayol also recognised the importance of long term employment, and the idea has been echoed
by contemporary management gurus such as Tom Peters, Jeff Pfeffer, and William Ouchi.

42
When employees stay with an organisation for an extended period of time, they develop skills
that improve the organisations’ ability to utilise the organisation’s resources.
m) Subordination of Individual Interest to the Common Interest
The interest of the organisation as a whole must take precedence over the interest of any one
individual or group if the organisation is to survive. Equitable arrangements must be
established between the organisation and its members to ensure that employees are treated
fairly and rewarded for their performance and to maintain the disciplined organisational
relationships so vital to an efficient system of administration.

n) Esprit De Corps (shared feelings of comradeship, enthusiasm, or devotion to a

common cause among members of the group).
According to Fayol, the appropriate design of an organisations’ hierarchy of authority and the
right mix of order and discipline foster cooperation and commitment. Likewise the key element
in a successful organisation is the development of esprit de corps, a French expression that
refers to shared feelings of comrade, enthusiasm or devotion to a common cause among
members of the group. sprit de corps can result when managers encourage personal, verbal
contact between managers and workers and encourage communication to solve problems and
implement solutions. Today, the term organisation culture is used to refer to these shared
feelings.

Henri Fayol was the first person to identify elements or functions of management in his classic
1916 book Administration Industrielle et Generale. Fayol was the managing director of a large
French coalmining firm and based his book largely on his experiences as a practitioner of
management. Fayol defined five functions, or elements of management: planning, organising,
commanding, coordinating, and controlling. Fayol argued that these functions were universal,
in the sense that all managers performed them in the course of their jobs, whether the managers
worked in business, military, government, religious, or philanthropic undertakings
(Encyclopaedia of Management, 2006).

Fayol defined planning in terms of forecasting future conditions, setting objectives, and
developing means to attain objectives. Fayol recognised that effective planning must also take
into account unexpected contingencies that might arise and did not advocate rigid and inflexible
plans. Fayol defined organising as making provision for the structuring of activities and
relationships within the firm and also the recruiting, evaluation, and training of personnel.
43
According to Fayol, commanding as a managerial function concerned the personal supervision
of subordinates and involved inspiring them to put forth unified effort to achieve objectives.
Fayol emphasized the importance of managers understanding the people who worked for them,
setting a good example, treating subordinates in a manner consistent with firm policy,
delegating, and communicating through meetings and conferences. Fayol saw the function of
coordination as harmonising all of the various activities of the firm. Later experts did not retain
Fayol’s coordination function as a separate function of management but regarded it as a
necessary component of all the other management functions. Fayol defined the control function
in terms of ensuring that everything occurs within the parameters of the plan and accompanying
principles. The purpose of control was to identify deviations from objectives and plans and to
take corrective action (Encyclopaedia of Management, 2006).

Fayol’s work was not widely known outside Europe until 1949, when a translation of his work
appeared in the United States. Nevertheless, his discussion of the practice of management as a
process consisting of specific functions had a tremendous influence on early management texts
that appeared in the 1950s, (Ibid).

[Link] Implications of Fayol’s Principles of Management

Some of the principles that Fayol outlined have faded from contemporary management
practices, but most have endured. The principles that Weber and Fayol set forth still provide a
clear and appropriate set of guidelines that managers can use to create a work setting that makes
efficient and effective use of organisational resources. These principles still remain the bedrock
of modern management theory; recent researchers have refined or developed them to suit
modern conditions. For example, Weber’s and Fayol’s concern for equity and for establishing
appropriate links between performance and reward are central themes in contemporary theories
of motivation and leadership.

[Link] Limitations of Fayol’s Principles of Management

Some scholars have criticised Fayol’s 14 principles of management as being contradictory,
rigid and inflexible. For instance, it may be difficult to achieve a clear division of labour and
encourage initiative with principles such as centralisation, discipline, order and line of
authority.

44
Further, by the early 1970s, some experts suggested that the functions of management as
described by Fayol and others of the process school of management were not an accurate
description of the reality of managers’ jobs. Chief among the critics of the functional approach
was Henry Mintzberg. Mintzberg argued that the functional or process school of management
was “folklore” and that functions of management such as planning, organising, leading, and
controlling did not accurately depict the chaotic nature of managerial work. He felt that the
functional approach to the managerial job falsely conveyed a sense that managers carefully and
deliberately evaluated information before making management decisions (Encyclopaedia of
Management, 2006).

Based upon an observational study of five executives, Mintzberg concluded that the work
managers actually performed could best be represented by three sets of roles, or activities:
interpersonal roles, informational roles, and decision-making roles. He described the
interpersonal roles as consisting of figurehead, leader, and liaison. He identified three
informational roles: monitor, disseminator, and spokesperson. Finally, he described four
decision-making roles that included entrepreneur, disturbance handler, resource allocator, and
negotiator. Mintzberg’s challenge to the usefulness of the functions of management and the
process school attracted a tremendous amount of attention and generated several empirical
studies designed to determine whether his or Fayol’s description of the managerial job was
most accurate. While this research did indicate that managers performed at least some of the
roles Mintzberg identified, there was little in the findings that suggested that the functions of
management were not a useful way of describing managerial work (Ibid).

3.3 Unit Summary

It is clear from the discussions in this unit that administrative management has had a huge
contribution to modern day management of organisations and people in the work place. Weber
described the characteristics that organisations exhibited during his time and these
characteristics are still found in modern day organisations. Whether or not the characteristics
make organisations or managers effective and efficient is debatable. Fayol, on the other hand,
presented 14 principles of management, which though criticised as been contradictory, rigid

45
and inflexible, have influenced the management of organisations today. Fayol was also the first
person to identify elements or functions of management such as planning, organising,
commanding, coordinating and controlling

3.4 References/Further Reading

Fayol, H. (1917). Administrative Industrielle et: Prevoyance, Organisation, Commandment,

Coordination, Controle H. Dunod and E. Pinat Paris.

Helms M.M. (2006). Encyclopaedia of Management (5th Edition). New York, Thomson Gale.

Jones G. and George J. (2003). Contemporary Management (5th Edition). New Jersey, Pearson
Education Inc.

Weber, M. (1958). “Bureaucracy,” in From Max Weber: Essays in Sociology, ed. H. H. Gerth
and C. Wright Mills (New York: Oxford University Press), 196–244.

3.5 Review Questions

Q1. Identify and discuss the following:

a) Max Weber’s principles of Bureaucracy

b) Henri Fayol’s 14 principles of management
c) Functions of management as outlined by Henri Fayol

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 UNIT FOUR: BEHAVIOURAL MANAGEMENT THEORY

4.1 Introduction
Behavioural Management provided a shift in from scientific management and administrative
management by focusing on how managers should personally behave to motivate employees
and encourage them to perform at high levels and be committed to achieving organisational
goals (Jones and George, 2002). This unit therefore begins by discussing the work of Mary
Parker Follet, a behavioural management theorist. Following this are presentations on Theory
“X”’ and Theory “Y” by Douglas McGregor, and Elton Mayo’s Hawthorne Studies or
Experiments and Abraham Maslow’s Hierarchy of Needs Theory. The last section focuses on
Chris Argyris.

4.2 The work of Mary Parker Follet (1868-1933)

Much of her writing about management and about the way managers should behave toward
workers was a response to her concern that Taylor was ignoring the human side of the
organisation. She pointed out that management often overlooks the multitude of ways in which
employees can contribute to the organisation when managers allow them to participate and
exercise initiative in their everyday lives. Taylor for example never proposed that managers
should involve workers in analysing their jobs to identify better ways to perform tasks or should
even ask workers how workers felt about their jobs. Instead he used time and motion experts
to analyse workers’ jobs for them (Jones and George, 2002:36).

Follet in contrast, argued that because workers know the most about their jobs, they should be
involved in job analysis and managers should allow them to participate in the work
development process. Follet proposed that authority should go with knowledge whether it is
up the line or down. In other words, if workers have relevant knowledge, then workers rather
than managers should be in control of the work process itself, and manager should behave as
coaches and facilitators-not as monitors and supervisors. In making the above statement, Follet
anticipated the current interest in self-managed teams and empowerment. She also recognised
the importance of having managers in different departments communicate directly with each
other to speed decision making. In this case she went on to advocate for what she called cross

47
functioning (which meant that members of different departments working together in cross
departmental teams to accomplish projects- an approach that is increasingly utilised today.

Fayol also mentioned expertise and knowledge as important sources of mangers’ authority, but
Follet went further. She proposed that knowledge and expertise and not managers’ authority
deriving from their position in the hierarchy, should decide who will lead at any particular
moment. She believed, as do many management theorists today that power is fluid and should
flow to the person who can help the organisation achieve its goals. Follet in this case took a
horizontal view of power and authority, in contrast to Fayol, who saw the formal line of
authority and vertical chain of command as being most essential to effective management.
Follett’s behavioural approach to management was very radical for its time and because of its
radical nature, it was unappreciated by managers and researchers until quite recently.

4.3 Theory X and Theory Y

Several studies after World War II revealed how assumption about workers attitudes and
behaviour affect managers’ behaviour. Perhaps the most influential approach was developed
by Douglas McGregor. He proposed two sets of assumptions about how work attitudes and
behaviour not only dominate the way managers think but also affect how they behave in
organisations. McGregor named the two sets of assumptions as Theory Y and Theory X (Jones
and George, 2002:38).

4.3.1 Theory X
According to the assumption of Theory X, the average worker is lazy, dislikes work and will
try to do as little as possible. Moreover, workers have little ambition and wish to avoid
responsibility. Thus the managers’ task is to counteract workers’ natural tendencies to avoid
work. To keep workers’ performance at a high level, the manager must supervise the workers
closely and control their behaviour by means of the “carrot and “stick” i.e. rewards and
punishment.

Managers who accept the assumption of Theory X design and shape the work setting to
maximise their control over workers’ behaviour and minimize workers’ control over the pace
of work. These managers believe that workers must be made to do what is necessary door for
the success of the organisation and they focus on developing rules, SOPs, and a well-defined

48
system of rewards and punishments to control behaviour. They see little point in giving workers
autonomy to solve their own problems because they believe that the work force neither expects
nor desires cooperation.

Theory X managers see their role as closely that of monitoring workers to ensure that they
contribute to the production process and do not threaten product quality. For example Henry
Ford who closely supervised and managed his work force fits McGregor’s description of a
manager who holds Theory X assumptions.

4.3.2 Theory Y
In contrast, Theory Y assumes that workers are not inherently lazy, do not naturally dislike
work, and if given the opportunity will do what is good for the organisation. According Theory
Y, the characteristics of the work setting determine whether workers considers work to be a
source of satisfaction or punishment, and managers do not need to closely control workers’
behaviour to make them perform at a high level because workers exercise self-control when
they are committed to the organisational goals.

The implication of Theory Y, according to McGregor, is that the limits of human of

collaboration in the organisational setting are not limits of human nature but of management’s
ingenuity (lack of the skill at working out how to achieve things or skill at inventing new ways
of doing things) in discovering how to realize the potential represented by its human resources.
It is the manager’s task to create a work setting that encourages commitment to organisational
goals and provide opportunities for workers to be imaginative and to exercise initiative and
self-direction.

When mangers design the organisational setting to reflect the assumptions about attitude and
behaviour suggested by Theory Y, the characteristics of the organisation are quite different
from those of an organisational setting based on Theory X .Managers who believe that workers
are motivated to help the organisation reach its goals can decentralise authority and give more
control over the jobs to workers, both as individuals and in groups. In this setting, individuals
and groups are still accountable for their activities, but the manager’s role is not to control
employees but to provide support and advice in order to make sure that employees have the
resources they need to perform their jobs, and to evaluate them on their ability to help the

49
organisation meet its goals. Henri Fayol’s approach to administration more closely reflects the
assumption of theory Y, rather that Theory X.

The Assumptions of theory X and Theory Y are summarized in the table below in the Table
Below:

Theory X Theory Y
The average worker or employee is lazy, dislikes work Employees are not inherently lazy. Given the chance,
and will try to do as little as possible. employees will do what is good for the organisation.

To ensure that employees work hard, managers To allow employees to work in the organisation’s
should closely supervise employees. interest, managers must create a work setting that
provides opportunities for the workers to exercise
initiative and self-direction.
Managers should create strict work rules and Managers should decentralise authority to
implement a well-defined system of rewards and employees and make sure employees have the
punishment to control employees. resources necessary to achieve organisational goals.

4.3.3 The HP Way

One company that was founded on the type of management philosophy inherent in Theory Y
is the electronic company Hewlett-Packard (HP), which from its founding consistently put into
practice principle derived from Theory Y. Founders William Hewlett and David Packard-Bill
and Dave as they are still known throughout the organisation-established a philosophy of
management known as the “HP-Way” that is people oriented, stresses the importance of
treating every person with respect and consideration and offers recognition for achievement.
The HP Way was based on several principles and some of these principles are as follows:

1. The policy of Long-Term employment

In the past HP went to greater lengths not to lay off workers. At times when fewer employees
were needed, rather than laying-off the workers, management would cut their pay and shorten
the work day until demand for HP products picked up. This policy strengthened employees’
loyalty to the organisation.
2. Promotion of Innovation and creativity
Another guiding principle in the HP Way concerned how to treaty members of the organisation
so that they feel free to be innovative and creative. HP managers believed that every employee

50
of the company was the member of the HP team. They emphasize the need to increase the
levels of communication among employees, believing that horizontal communication between
peers, not just vertical communication up and down the hierarchy, is essential for creating a
positive climate for innovation. So to promote communication between employees at different
levels of the hierarchy, HP encouraged informality. And managers and employees were on a
first name basis with each other and with the founders Bill and Dave.

3. Management By Wondering Around (MBWA Technique)

In addition, Bill and Dave pioneered the technique known as Management by Wondering
around (MBWA): People were expected to wonder around learning what others were doing so
that they could tap into opportunities to develop new products or find new avenues for
cooperation.

4. Bill and Dave also pioneered the principle that employees should spend 15% of
their time working on projects of their own choosing
HP’s product design engineers were told to leave their current work out in the open on their desk so that
anybody could see what they were doing, learn from it or suggest ways to improve it. Bill and Dave
promoted managers because of their ability to engender (cause something to occur) excite and
enthusiasm for innovation in their subordinates.

The results of the HP’s practices helped it become one of the leading electronic companies in
the world.

4.4 The Hawthorne Studies

Probably because of its radical nature, Follett’s work was unappreciated by managers and
researchers until quite recently. Most continued to follow Taylor’s footsteps and the Gilbreths.
To increase efficiency, they studied the ways to improve various characteristics of the work
setting, such as job specialization or the kind of tools workers used. One of the series of studies
was conducted from 1924 to 1932 at the Hawthorne works of the western electric company.
This research now known as the Hawthorne studies began as an attempt to investigate how
characteristics of the work setting specifically the level of lighting or illumination affect worker
fatigue and performance. The four parts of the Hawthorne Studies/Experiments are discussed
below.

51
4.4.1 Illumination Experiments (1924-27)
These experiments were performed to find out the effect of different levels of illumination
(lighting) on productivity of labour. The brightness of the light was increased and decreased to
find out the effect on the productivity of the test group. Surprisingly, the productivity increased
even when the level of illumination was decreased. It was concluded that factors other than
light were also important.

4.4.2 Relay Assembly Test Room Study (1927-1929)

Under these test two small groups of six female telephone relay assemblers were selected. Each
group was kept in separate rooms. From time to time, changes were made in working hours,
rest periods, lunch breaks, etc. They were allowed to choose their own rest periods and to give
suggestions. Output increased in both the control rooms. It was concluded that social
relationship among workers, participation in decision-making, etc. had a greater effect on
productivity than working conditions.

4.4.3 Mass Interviewing Programme (1928-1930)

21,000 employees were interviewed over a period of three years to find out reasons for
increased productivity. It was concluded that productivity can be increased if workers are
allowed to talk freely about matters that are important to them.

4.4.4 Bank Wiring Observation Room Experiment (1932)

A group of 14 male workers in the bank wiring room were placed under observation for six
months. A worker's pay depended on the performance of the group as a whole. The researchers
thought that the efficient workers would put pressure on the less efficient workers to complete
the work. However, it was found that the group established its own standards of output, and
social pressure was used to achieve the standards of output.

The conclusions derived from the Hawthorne Studies were as follows:

52
 1. The social and psychological factors are responsible for workers' productivity and job
satisfaction. Only good physical working conditions are not enough to increase
productivity.
2. The informal relations among workers influence the workers' behaviour and
performance more than the formal relations in the organisation.
3. Employees will perform better if they are allowed to participate in decision-making
affecting their interests.
4. Employees will also work more efficiently, when they believe that the management is
interested in their welfare.
5. When employees are treated with respect and dignity, their performance will improve.
6. Financial incentives alone cannot increase the performance. Social and Psychological
needs must also be satisfied in order to increase productivity.
7. Good communication between the superiors and subordinates can improve the
relations and the productivity of the subordinates.
8. Special attention and freedom to express their views will improve the performance of
the workers.

The Hawthorne Experiments are mainly criticised on the following grounds:

1. Lacks Validity: The Hawthorne experiments were conducted under controlled

situations. These findings will not work in real setting. The workers under observation
knew about the experiments. Therefore, they may have improved their performance
only for the experiments.
2. More Importance to Human Aspects: The Hawthorne experiments gives too much
importance to human aspects. Human aspects alone cannot improve production.
Production also depends on technological and other factors.
3. More Emphasis on Group Decision-making: The Hawthorne experiments placed
too much emphasis on group decision-making. In real situation, individual decision-
making cannot be totally neglected especially when quick decisions are required and
there is no time to consult others.
4. Over Importance to Freedom of Workers: The Hawthorne experiments gives a lot
of importance to freedom of the workers. It does not give importance to the
constructive role of the supervisors. In reality too much of freedom to the workers can
lower down their performance or productivity.

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4.4.1 Human Relations Movement
This approach advocates that supervisors be behaviourally trained to manage subordinates in
ways that elicit their cooperation and increase their productivity. The importance of the
behavioural or human relations training became even clear to its supporters after the series of
experiments known as the bank wiring room experiments as outlined above. In a study of the
workers making telephone switching equipment, researchers Elton Mayo and F.J
Roethlisberger discovered that workers, as a group, had deliberately adopted a norm of output
restriction to protect their jobs. Workers who violated this informal production norm were
subjected to sanctions by other group members. Those who violated group performance norms
and performed above the norm were called rate busters and those who performed below the
norm were called chiselers.

The experiments concluded that both types of workers threatened the group as a whole. Rate
busters threatened the group members because they revealed to managers how fast the work
could be done. Chiselers were looked down on because they were not doing their share of the
work. Work-group members disciplined both rate busters and chiselers to create a pace of work
that the workers (not the managers) thought were fair. Thus a work group’s influence over
output can be as great as the supervisors influence. Since the work group can influence the
behaviour of its members, some management theorists argue that supervisors should be trained
to behave in ways that gain the goodwill and cooperation of the workers so that supervisors,
not workers, control the level of work-group performance.

One of the main implications of the Hawthorne studies was that the behaviour of managers and
workers in the work setting is as important in explaining the level of performance as the
technical aspect of the task. Managers must understand the working of the informal
organisation, the system of the behavioural rules and norms that emerge in a group, when they
try to manage or change behaviour in an organisation. Many studies have also found that as
time passes, groups often develop elaborate procedures and norms that bond member’s
together, allowing unified action either to cooperate with management to raise performance or
to restrict output and thwart the attainment of the organisations goals.

The Hawthorne studies demonstrated the importance of understanding how the feelings,
thoughts and behaviour of work-group members and managers affect performance. It was

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becoming increasingly clear to researchers that understanding behaviour in organisation is a
complex process that is critical to increasing performances. This has also led to the increasing
interest in the area of management known as Organisational behaviour, “the study of the
factors that have an impact on how individuals and groups respond to and act in organisations
(this field of study dates from these early studies).

4.5 Abraham Maslow’s Hierarchy of Needs Theory

According to Robbins and Judge (2013) the best-known theory of motivation is Abraham
Maslow’s hierarchy of needs. Maslow hypothesised that within every human being, there
exists a hierarchy of five needs:

1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily needs.
2. Safety. Security and protection from physical and emotional harm.
3. Social. Affection, belongingness, acceptance, and friendship.
4. Esteem. Internal factors such as self-respect, autonomy, and achievement, and external
factors such as status, recognition, and attention.
5. Self-actualisation. Drive to become what we are capable of becoming; includes growth,
achieving our potential, and self-fulfilment.

Although no need is ever fully gratified, a substantially satisfied need no longer motivates.
Thus as each becomes substantially satisfied, the next one becomes dominant. So if you want
to motivate someone, according to Maslow, you need to understand what level of the hierarchy

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that person is currently on and focus on satisfying needs at or above that level, moving up the
steps. Maslow separated the five needs into higher and lower orders. Physiological and safety
needs, where the theory says people start, were lower-order needs and social, esteem, and
self-actualization were higher-order needs. Higher-order needs are satisfied internally
(within the person), whereas lower-order needs are predominantly satisfied externally (by
things such as pay, union contracts, and tenure).

The hierarchy, if it applies at all, aligns with U.S. culture. In Japan, Greece, and Mexico, here
uncertainty-avoidance characteristics are strong, security needs would be on top of the
hierarchy. Countries that score high on nurturing characteristics—Denmark, Sweden, Norway,
the Netherlands, and Finland— would have social needs on top. Group work will motivate
employees more when the country’s culture scores high on the nurturing criterion (Robbins
and Judge, 2013).

Maslow’s theory has received wide recognition, particularly among practicing managers. It is
intuitively logical and easy to understand. When introduced, it provided a compelling
alternative to behaviourist theories that posited only physiological and safety needs as
important. Unfortunately, however, research does not validate it. Maslow provided no
empirical substantiation, and several studies that sought to validate it found no support for it.
There is little evidence that need structures are organised as Maslow proposed, that unsatisfied
needs motivate, or that a satisfied need activates movement to a new need level. But old
theories, especially intuitively logical ones, apparently die hard (Robbins and Judge, 2013).

Some researchers have attempted to revive components of the need hierarchy concept, using
principles from evolutionary psychology. They propose that lower-level needs are the chief
concern of immature animals or those with primitive nervous systems, whereas higher needs
are more frequently observed in mature animals with more developed nervous systems. They
also note distinct underlying biological systems for different types of needs. Time will tell
whether these revisions to Maslow’s hierarchy will be useful to practicing managers (Robbins
and Judge, 2013).

4.6 Chris Argyris

Chris Argyris contributed to defining the theory of Organizational Humanism. Through his
highly influential work titled Personality and Organization (1957), Argyris noted that

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contemporary management practices, which tended to emphasize highly directive, control-
oriented behaviour on the part of managers, was actually counterproductive, for it was at odds
with the basic striving of the adult personality. Argyris emphasized instead a style of
management that stressed the manager’s understanding and facilitating of human development
within the organization and eventually led to a strong concern for combining personal learning
and organization development (Rabin et al, 2007).

4.7 Unit Summary

The behavioural approach to management emphasized individual attitudes and behaviours and
group processes, and recognised the significance of behavioural process in the workplace.
Mary Parker Follet advocated for the concept of “power sharing” and “integration” between
managers and employees. Elton Mayo provided the foundation for the Human Relations
Movement while Chris Argyris classified organisations based on the employees’ set of values.

4.8 References/Further Reading

Argyris, C. 1971. Management and Organizational Development. New York, McGraw-Hill.

Fayol, H. (1917), Administration industrielle et générale; prévoyance, organisation,

commandement, coordination, controle (in French), Paris, H. Dunod et E. Pinat.

Follett, M.P, (1940). Dynamic Administration: The Collected Papers of Mary Parker Follett.
London, Pitman Publishing.

Jones G. and George J. (2003). Contemporary Management (5th Edition). New Jersey, Pearson
Education Inc.

McGregor, D. (1961). The Human Side of Enterprise. New York, McGrawHill.

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Rabin J., W.B Hildreth and G.J. Miller (2007). Handbook of Public Administration (3rd
Edition). New Jersey, Taylor and Francis.

Robbins S. P., T.A. Judge. (2013). Organisational Behaviour: 15th Edition. New Jersey,
Prentice Hall.

4.9 Review Questions

Q1. Discuss the contributions of the following scholars to the emergence and development of
the Human Relations Movement:
a) Mary Parker Follet
b) Douglas McGregor
c) Elton Mayo
d) Abraham Maslow
e) Chris Argyris

Q2. Illustrate with examples, the practical application of Abraham Maslow’s Hierarchy of Needs theory
in organisations. In your opinion, what are the limitations of the theory?

UNIT FIVE: CONTEMPORARY THEORIES OF MANAGEMENT

5.1 Introduction
The birth of the human relations movement influenced a lot theorists to focus on people and
other aspects in organisations so as to improve performance. Contemporary management
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theories thus provides a broad understanding of how modern day organisations are managed.
This unit therefore discusses the three contemporary management theories. These include: the
Management Science Theory (comprising Quantitative Management, Operation Management,
Total Quality Management and Management Information Systems); Organisational
Environment Theory, and; Contingency Theory.

5.1.1 Management Science Theory

This is a contemporary approach to management that focuses on the use of rigorous, thorough
and strict quantitative techniques to help managers make maximum use of organisational
resources to produce goods and services. In essence, management science theory is a
contemporary extension of scientific management, which as, developed by Taylor, also took a
quantitative approach to measuring the worker-task mix to raise efficiency. There are many
branches of management science, and once again IT, which is having a significant impact on
all kinds management practices, is affecting the tools managers use to make decisions (Jones
and George, 2003). Each branch of management science, according to Jones and George
(2003), deals with a specific set of concerns:

1. Quantitative Management
This kind of management utilises mathematical techniques such as linear programming,
simulation and modelling to help managers decide for instance, how much inventory (the
supply or stock of goods) to hold at different times of the year, where to locate a new factory
and how to invest in an organisation’s financial capital. IT offers managers new and improved
ways of handling information so that they can make more accurate assessments of the business
situation and better decisions.

2. Operation Management
This provides managers with a set of techniques that they can use to analyse any aspect of an
organisations production system to increase efficiency. Again IT through the internet, is
transforming the way managers handle the acquisition of inputs and the disposal of finished
products.

3. Total Quality Management (TQM)

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TQM focuses on analysing an organisation’s input, convention and output activities to increase
product quality (Analysis of the value chain activities). Once again, through sophisticated
software packages and computer controlled production, IT is changing the way managers and
employees think about the work process and ways of improving it.

4. Management Information Systems (MISs)

This helps managers design systems that provide information about events occurring inside the
organisation as well as in its external environment. Information that is vital for effective
decision making. Once again, IT gives managers access to more and better information and
allows more managers at all levels to participate in decision making.

From the foregoing, it can be seen that all these subfields of management science, enhanced by
sophisticated IT, provide tools and techniques that managers can use to help improve the
quality of their decisions making and increase efficiency and effectiveness.

5.1.2 Organisational Environment Theory

An important milestone in the history of management thought occurred when researchers went
beyond the study of how managers can influence behaviour within organisations to consider
how managers control the organisation’s relationship with its external environment or
organisational environment- the set of forces and conditions that operate beyond an
organisation’s boundaries but affect a manager’s ability to acquire and utilise resources.
Resources in the organisational environment include the raw materials and skilled people that
an organisation requires to produce goods and services. One way of determining the relative
success of an organisation is to consider how effective its managers are at obtaining scarce and
valuable resources. The importance of studying the environment became clear after the
development of open-systems theory and contingency theory during the 1960s (Jones and
George, 2003).

One of the most influential views of how organisation is affected by its external environment
was developed by Daniel Katz, Robert Kahn and James Thompson in the [Link] theorists
viewed the organisation as an open system- a system that takes in resources from its external
environment and converts or transforms them into goods and services that are sent back to that
environment, where they are bought by customers.

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At the input stage an organisation acquires resources such as raw materials, money and skilled
workers to produce goods and services. Once the organisation has gathered the necessary
resources, conversion begins. At the conversion stage, the organisations work force, using
appropriate tools, techniques and machinery, transforms the inputs into outputs of finished
goods and services such as cars, hamburgers. At the output stage the organisation releases
finished goods and services to its external environment, where customers purchase and use
them to satisfy their needs. The money the organisation obtains from the sales of its outputs
allows the organisation to acquire more resources so that the cycle can begin again. The systems
just described is said to be open because the organisation draws from and interacts with the
external environment in order to survive, in other words, the organisation is open to its
environment.

A closed system, in contrast is a self-contained system that is not affected by changes in its
external environment, and that fail to acquire inputs are likely to experience entropy, the
tendency of a closed system to lose its ability to control itself and thus to dissolve and
disintegrate.

Management theorists can model the activities of most organisations by using the open systems
view. Manufacturing companies, for instance, buy inputs such as component parts, skilled and
semi-skilled labour and robots and computer controlled manufacturing skills to assemble inputs
into outputs of cars and appliances.

Researchers using the open systems view are also interested in how the various parts of a
system work together to promote efficiency and effectiveness. System theorists like to argue
that the whole is greater than the sum of its parts, they mean that an organisation performs at a
higher level when departments work together rather than separately. Synergy, the performance
gains that result from the combined action of individuals and departments, is possible only in
an organised system. The recent interest teams combined or composed of people different
departments reflects systems theorists’ interest in designing organisational systems to create
synergy and thus increase efficiency and effectiveness.

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5.1.3 Contingency Theory
Another milestone in management theory was the development of contingency theory in the
1960s by Tom Burns and G.M. Stalker in Britain and Paul Lawrence and Jay Lorsch in the
United States. The crucial message of the contingency theory is that there is no one best way
to organise. The organisational structures and the control systems that managers choose depend
on are contingent on characteristics of the external environment in which the organisation
operates. According to the contingency theory, the characteristics of the environment affect an
organisation’s ability to obtain resources and to maximise the likelihood of gaining access to
resources, managers must allow an organisation’s departments to organise and control their
activities in ways most likely to allow them obtain resources, given the constraints of the
particular environment they face. In other words, how managers design the organisational
hierarchy, choose a control system, lead and motivate their employees is contingent on the
characteristics of the organisational environment (Jones and George, 2003).

Contingency theory does not aim to help us identify any particular approach to organisation
and management. Rather, it takes the view that there is no one best form of organisation and
that one needs to consider the impact of the situation in which the organisation finds itself –
the form of organisation and management will, or should, be conditioned by the demands
placed upon it. There are two key studies, by Joan Woodward and by Burns and Stalker, which
define this approach.

[Link] Joan Woodward – the Influence of Technical Processes

Joan Woodward conducted a large-scale study of different types of firm in South-East Essex
to analyse the relationship between organisational structure and success (as measured by
various indices). This was prompted by an earlier survey which showed no coherent pattern of
adherence to the classical theorists' principles of organisation.

In looking at the results of the study, no obvious pattern was found to the variety of different
organisational structures displayed among the firms – in terms of their number of levels of
authority, span of control, clarity or otherwise of definitions of duties, amount of written
communication and specialisation. Certainly it did not seem to relate to "business success"
(Woodward, 1980).

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Eventually it was spotted that differences in technology were the major factor in determining
the organisational pattern, and the kind of technology employed, of course, depends on the
objectives of the organisation.
Woodward identified three broad categories, based on the degree of technological control over
the production process.

Unit or small batch production

This is where there was least automation of processes, the accent being on "one-off" or short
runs for which it is not appropriate to gear up machines to control production. A hierarchy of
increasing application of technology within the category covered the production of items to
customers' specifications and prototypes, the making of large equipment in stages, and the
production of small batches of items.

In this category, is was found that organisational structure was quite loose; there was much
delegation of authority within a standard pyramidal hierarchy characterised by relatively small
spans of control and quite permissive management attitudes.

Large batch and mass production

Here, the production process is much more automated, the firms being those concerned with
the production of standard items in large quantity, and assembly line working. However, the
technology is not entirely dominant since variations and uncertainties occur even in the mass
production lines of car manufacturing.

These organisations were characterised by much tighter control procedures and rigid, large-
scale hierarchies with the traditional pyramid shape being very elongated at the base. This
reflects the way in which large numbers of workers are required at the lowest levels, but there
are relatively few middle and senior managers. Span of control is very large (which may
account for the management problems experienced by many large industrial concerns).

Process production
This is characteristic of the oil refineries and chemical manufacturers studied where then
production process is more or less certain and completely automated. Such firms tended to be
flexible again, but within a different organisational structure. The hierarchies were diamond
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shaped, which reflected the small number of operatives required to service and maintain the
process machinery, and the larger group of middle managers, scientists, accountants, etc. In
these concerns, problems tended to arise in this "bulge" in the middle where opportunities for
advancement were limited and the production process limited individual initiative.

Woodward's key contribution to organisational theory was the discovery that, far from there
being a set of preferred organisational principles, the main determinant of structure is the kind
of activity and the technology with which organisations are concerned. As she stated: "The
criterion of the appropriateness of an organisational structure must be the extent to which it
furthers the objectives of the firm – not, as management teaching sometimes suggests, the
degree to which it conforms to a prescribed pattern. There can be no one best way of managing
a business."

According to Jones (2002), an important characteristic of the external environment that affects
an organisation’s ability to obtain resources is the degree to which the organisation is changing.
Changes in the organisational environment include changes in technology, which can lead to
the creation of new products, the entry of new competitors such as (foreign organisations that
compete for available resources) and unstable economic conditions. In general, the more
quickly the organisational environment is changing, the greater are the problems associated
with gaining access to resources and the greater is the manager’s need to find ways to
coordinate the activities of the people in different departments to respond to the environment
quickly and effectively.

Drawing on Weber‘s and Fayol’s principles of organisation and management, Burns and
Stalker proposed to basic ways in which managers can organise and control an organisation’s
activities to respond to characteristics of its external environment. They can use a mechanistic
structure or an organic structure. A mechanistic structure typically rests on Theory X
assumptions and an organic structure typically rests on Theory Y assumptions.

When the environment surrounding an organisation is stable, managers tend to choose a

mechanistic structure to organise and control activities and make employee behaviour
predictable.

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In a mechanistic structure, authority is centralised at the top of the managerial hierarchy and
the vertical hierarchy of authority is the main means used to control subordinates’ behaviour.
Tasks and roles are clearly specified, subrogates are closely supervised and the emphasis is on
strict discipline and order. Everyone knows his or her place, and there is a place for everyone.
A mechanistic structure provides the most efficient way to operate in a stable environment
because it allows managers to obtain inputs at the lowest costs, giving an organisation the most
control over its conversion processes and enabling the most efficient production of goods and
services with the smallest expenditure of resources.

In contrast, when the environment is changing rapidly, it is difficult to obtain it is difficult to

obtain access to resources and managers need to organise their activities in a way that allows
them to cooperate quickly to acquire resources such as (new types of inputs to produce new
kinds of products) and to respond effectively to the unexpected. In an organic structure,
authority is decentralised to middle and first line managers to encourage them to take
responsibility and act quickly to pursue scarce resources. Departments are encouraged to take
a cross departmental or functional perspective and cross-functional teams composed of people
from different departments are formed. As in Mary Parker Follett’s model, the organisation
operates in an organic way because authority rests with the individuals, departments and teams
best positioned to control the current problems the organisation is facing (Jones and George,
2003).

5.2 Unit Summary

This last unit has discussed the contemporary theories that influence management today. One
such theory is the Management Science Theory, a contemporary extension of scientific
management, which uses rigorous, thorough and strict quantitative techniques to help managers
make maximum use of organisational resources to produce goods and services. Management
Science Theory is further divided into four:

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 a) Quantitative Management Theory – that uses mathematical techniques like linear
programming, simulation and modelling to help managers make decisions regarding
inventory, location of new factories and financial capital investments.
b) Operation Management Theory – that comprises set of techniques used to analyse any
aspect of an organisation’s production system to increase efficiency.
c) Total Quality Management – which involves increasing product quality by altering the
input, convention and output activities (which constitutes the value chain).
d) Management Information System (MIS) – that enables mangers to access more and
better information for decision making.

Unlike management science theory, Organisation Environment Theory analyses a set of forces
and conditions that operate outside the organisations environment which affect a manager’s
ability to acquire and utilise resources. The two views outline here are the: open system
perspective (a system that takes in resources from its external environment and converts or
transforms them into goods and services that are sent back to that environment, where they are
bought by customers), and the; closed system view ( a self-contained system that is not affected
by changes in its external environment). Closed systems that fail to acquire inputs are likely to
experience entropy, the tendency of a closed system to lose its ability to control itself and thus
to dissolve and disintegrate. It is because of this that management theorists are advised to model
the activities of their organisations by using the open systems view.

The last theory covered in this unit was the Contingent Theory that claims that there is no one
best way to organise the work place but that everything is contingent on the characteristics of
the external environment.

5.3 References/Further Reading

Burns, T. & Stalker, G. M. (1961). The Management of Innovation. London, Tavistock.

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Hellriegel D, Jackson S.E, Slocum J, Staude G, Amos T, Klopper H.B, Louw L, and
Oosthuizen T (2008). Management (3rd Edition). Capetown. Oxford University Press- Southern
Africa.

Jones G. (2002). Organisational Theory, Design, and Change (4th Edition). New Jersey,
Pearson Education Inc.

Jones G. and George J. (2003). Contemporary Management (5th Edition). New Jersey, Pearson
Education Inc.

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