Republic of the Philippines

State Universities and Colleges

GUIMARAS STATE COLLEGE
GRADUATE SCHOOL

NATURE AND CONCEPT OF MANAGEMENT

Management is the process of planning, organizing, staffing, directing, coordinating

and controlling the activities of business enterprises. It is also described as the technique
of leadership, decision making and a mean of coordinating.

Management is the act of getting people together to accomplish desired goals and
objectives using available resources efficiently and effectively. With a focus on
organizations and employees, managers are involved in planning, organizing, staffing,
controlling and leading an organization.

Definitions:
Management is defined in so many ways depending upon the viewpoints, beliefs and
interpretations of the manager.

Other define management as :

 The force that runs an enterprise and is responsible for its success and failure.
 The performance of conceiving and achieving desired results by means of group
effort consisting of utilizing human talents and resources.
 Getting things done through people etc.

Real definition of Management

- Is a distinct process of:

P – rocess of planning

O – rganizing

S – taffing

Di – recting and

Con – trolling

Performed to determine and accomplish stated objectives by the use of human being and
other business resources.
A few definitions by experts are:

“ Management is an art of knowing what is to be done and seeing that it is done in the
best possible manner.” F.W. Taylor (Father of Scientific management)

“ Management is to forecast, to plan, to organize, to command, to coordinate and control

activities of others.” Henri Fayol (Father of Modern Management)

“Management is the process by which co – operative group directs action towards

common goals.” Joseph Massie (President, Southern Management Association)

“Management is that process by which managers, create, direct, maintain and operate
purposive organization through systematic, coordinated and cooperative human efforts.”
Dalton E. (Dalt) McFarland (President, Acedemy Management)

“Management is the coordination of all resources through the process of planning,

organizing, directing and controlling in order to attain stated goals.” Henry Sisk (Author,
Management and Organization)

“Management is a social and technical process that utilizes resources, influences human
action and facilitates changes in order to accomplish an organization’s goals.” Tho
Harmann, William Scott (Author/Professor Emeritus at Stanford University)

“Management is a process of working with and trhough others to achieve organizational

objectives in a changing environment, central to this purpose is the effective and efficient
use of limited resources.” Robert Kreiner (Author/Professor Emeritus of Management at
Arizona State University)
  The fourth reason is that in many situations, theoretical knowledge of management
may not be adequate or relevant for solving the problem. It may be because of
complexity or unique nature of the problem.

The art is in knowing how to accomplish the desired results. This implies that there exists
a body of knowledge which management uses to accomplish the desired results in
organization.

Management as a Science:
Management as a science has the following characteristics:
 Its principles, generalizations and concepts are systematic, in this case the
manager can manage the situation or organization in a systematic and scientific
manner.
 Its principles, generalizations and concepts are formulated on the basis of
observation, research, analysis and experimentation as is the case with the
principles of other sciences
 Like other sciences, management principles are also based on relationship of cause
and effect. It states that same cause under similar circumstance will produce same
effect. Suppose if workers are paid more (cause) the produce more (effect).
 Management principles are codified and systematic and can be transferred from
one to another and can be taught.
 Management principles are universally applicable to all types of organizations.

There is no tailor – made answer to a question- Is management a science or art? To

ascertain the nature of management with respect of science or art , there is a need to know
the exact meaning of the words “science” or “art” and subsequently, their application to
management.

Evolution of Management Theories:

Management theory concerning appropriate management practices has evolved in

modern times. The so –called classical management theories emerged around the start of
the twentieth century. These include scientific management, which focuses on matching
peoples and tasks to maximize efficiency and administrative management, which focuses
on identifying the principles that will lead to the creation of the most efficient system of
organization and management. Behavioral management theories, developed both before
and after the Second World War, focus on how managers should lead and control their
workforces to increase performance. Management science theory, developed during the
Second World War, has become more important as researchers have developed during
rigorous analytical and quantitative techniques to help managers measure and control
organizational performance. Finally, theories were developed during the 1960s and 1970s
to help explain how the external environment affects the way organizations and manager
operate.
SCIENTIFIC MANAGEMENT THEORY:

The evolution of modern management began in the closing decades of the

nineteenth century, after the Industrial Revolution had swept through Europe, Canada,
and the United States. Small workshops run by skilled workers who produced hand
manufactured products ( a system called crafts-style production) were replaced by large
employees controlled the sophisticated machines that made products.
Many of the managers and supervisors had only technical knowledge and were
unprepared for the social problems that occur when people work together in large groups
(as in a factory or shop system). Managers began to search for new ways to manage their
organizations’ resources and soon they began to focus on how to increase the efficiency of
the employee – task mix.

Job Specialization and the Division of Labor

The famous Scottish economist Adam Smith was one of the first to look at the
effects of different manufacturing methods. The first was similar to crafts-style
production, in which each employee was responsible for all of the 18 tasks involved in
producing a pin. The other had each employee performing only one or a few of the 18
tasks that go into making a completed pin.
Smith found that factories in which employees specialized in only one or a few
tasks had greater performance that factories in which each employee performed all 18 pin
– making tasks. In fact, Smith found that 10 employees specializing in a particular task
could, between them, make 48,000 pins a day, whereas those employees who performed
all the tasks could make only a few thousand at most.

Smith reasoned that this difference in performance occurred because the

employees who specialized became much more skilled at their specific tasks, and as a
group were thus able to produce a product faster than the group of employees in which
everyone had to perform many tasks. Smith concluded that increasing the level of job
specialization – the process by which a division of labor occurs as different employees
specialize in different tasks over time – increases efficiency and leads to higher
organizational performance.
 Based on Adam Smith’s observations, early management practitioners and
theorists focused how managers should organize and control the work process to
maximize the advantages of job specialization and the division of labor.

F.W. Taylor and Scientific Management

Frederick W. Tayler (1856-1915) is best known for defining the techniques of scientific
management the systematic study of relationships between people and tasks for the
purpose of redesigning the work process to increase efficiency. Taylor believed that the
production process would become more efficient if the amount of time and effort that
each employee spent to produce a unit of output ( a finished good or service)could be
reduced. He noted that increased specialization and the division of labor could increase
efficiency. Taylor believed that the way to create the most efficient division of labor could
best be determined by means of scientific management techniques rather than intuitive
or informal rule of thumb knowledge. On the basis of experiments an observations as a
manufacturing manager in a variety of settings, he developed four principles to increase
efficiency in the workplace.

~ Principle 1. Study the way workers perform their tasks, gather all the informal job
knowledge that workers possess, and experiment with ways of improving t6he way tasks
are performed.

~ Principle 2. Codify the new methods of performing tasks into written rules and
standard operating procedures.

~ Principle 3. Carefully select workers so that they possess skills and abilities that match
the needs of the task, and train them to perform the task according to the establish rules
and procedures.

~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.

By 1910, Taylor’s system of scientific management had become known and in many
instances, faithfully and fully practiced. However, managers in many organizations chose
to use the new principles of scientific management selectively. This decision ultimately
resulted in problems. For example, some managers using scientific management saw
increases in performance but rather than sharing performance gains with employees
through bonuses as Taylor as advocated, they simply increased the amount of work that
each employee was expected to do. Thus, employees found they were required to do more
work for the same pay. Employees also learned that increases in performance often
resulted in layoffs because fewer employees were needed. In addition, the specialized,
simplified jobs were often monotonous and repetitive, and many employees became
dissatisfied with their jobs.

Scientific management brought many employees more hardship than gain and left
them with a distrust of managers who did not seem to care about their well – being. These
dissatisfied employees resisted attempts to use the new scientific management techniques
and at time even withheld their job knowledge from managers to protect their jobs and
pay.

Taylor’s work has had an enduring effect on the management of production

systems. Managers in every organization, whether it produces good or services, now
carefully analyze the basic tasks that must be performed and try to create work systems
that will allow their organizations to operate most efficiently.
The Gilbreths

Two prominent followers of Taylor were Frank Gilbreths (1868-1924) and Lilian
Gilbreths (1878-1972), who refined Taylor’s analysis of work movements and made many
contributions to time and motion study.

Their aims were to (1) break up a particular task into individual actions and analyze
each step needed to perform the task, (2) find better ways to perform each step and (3)
recognize each of the steps so that the action as a whole could be performed more
efficiently at less cost in time and effort.

The Gilbreths often filmed an employee performing a particular task and then
separated the task actions, frame, into their component movements. Their goal was to
maximize the efficiency with which each individual task was performed so that gains
across tasks would add up to enormous savings of time and effort.

In workshops, and factories, the work of the Gilbreths, Taylor and many others had
a major effect on the practice of management. In comparison with the old crafts-style
system, jobs in the new system were repetitive, boring and monotonous as a result of the
application of scientific management principles. Employees became more dissatisfied.
Frequently, the management of work setting became a game between employees and
managers: Managers tried to introduce work practices to increase performance, and
employees tried to hide the true potential efficiency of the work setting on order to protect
their own well – being.

ADMINSTRATIVE MANAGEMENT THEORY:

Side by side with scientific manager studying the person – task mix to increase efficiency,
other researchers were focusing on administrative management- the study of creating an
organizational structure is the system of task and authority relationships that control how
employees use resources to achieve the organization’s goals. Two of the most influential
views regarding the creation of efficient systems of organizational administration were
developed in Europe, Max Weber, a German professor of sociology, developed one theory.
Henri Fayol, the French manager, developed the other.

The Theory of Bureaucracy

Max Weber (1864-1920) wrote his work at the start of the twentieth century, when
Germany was undergoing its Industrial Revolution. To help Germany manage its growing
industrial enterprises at a time when it was striving to become a world power, Weber
developed the principles of bureaucracy – a formal system of organization and
administration designed to ensure efficiency and effectiveness.

 Principle 1. In a bureaucracy, a manager’s formal authority derives from the

position he or she holds in the organization.

In a bureaucratic system of administration, obedience is owed to a manager,

not because of any personal qualities that he or she might possess – such as
personality, wealth or social status- but because the manager occupies a
position that is associated with a certain level of authority and responsibility

 Principle 2. In a bureaucracy, people should occupy 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 organizations and industries are still affected by social networks in
which personal contacts and relations, not job – related skills, influence hiring and
promotional decisions.
  Principle 3. The extent of each position’s formal authority and task responsibilities
and its relationship to other positions in an organization, should be clearly
specified.

When the tasks and authority associated with various positions in the
organization are clearly specified, managers and employees know what is
expected of them and what to expect from each other. Moreover, an
organization can hold all is employees strictly accountable for their actions
when each person is completely familiar with his or her responsibilities.

 Principle 4. For authority to be exercised effectively in an organizations, positions

should be arranged hierarchically. This helps employees know whom to report to
and who reports to them.

Managers must create an organizational hierarchy of authority that makes

it clear (a) who reports to whom and (b) to whom managers and employees
should go if conflicts or problems arise. This principle is especially
important in the Armed Forces, Canadian Security Intelligence Service
(CSIS), Royal Canadian Mounted Police (RCMP) and other organizations
that deal with sensitive issues where there could be major repercussions.

 Principle 5. Manager must create a well – defined system of rules, standard

operating procedures (SOPs) and norms so that they can effectively control
behavior within an organization.

Rules, SOPs, and norms provide behavioral guidelines that improve the
performance of a bureaucratic system because they specify the best ways to
accomplish organizational tasks. Rules are formal written instructions that specify
actions to be taken under different situations to achieve specific goals. SOPs are
specific sets of written instruction on how to perform a certain aspect of a task.
Norms are unwritten rules and informal codes of conduct on how to act in
particular situations. Companies such as McDonald’s and Wal – Mart have
developed extensive rule and procedures to specify the types of behaviors that are
required of their employees, such as, “Always greet the customer with a smile.”

Weber believed that organizations that implement all five principles will establish
a bureaucratic system that will improve organizational performance. The specifications
of positions and the use of rules and SOPs to regulate how tasks are performed make it
easier for managers to organize and control the work of subordinates. Similarly, fair and
equitable selection and promotion systems improve managers’ feeling of security, reduce
stress an encourage organizational members to act ethically and further promote the
interests of the organization.

In bureaucracies are not managed well, however, many problems can result.
Sometimes, ,managers allow rules and SOPs – “bureaucratic red tape”- to become so
cumbersome that decision making becomes slow and inefficient and organizations are
unable to change. When managers rely too much on rules to solve problems and not
enough on their own skills and judgment, their behavior becomes inflexible. A key
challenge for managers is to use bureaucratic principles to benefit, rather than harm, an
organization.
 The basic idea behind contingency theory – that there is no one best way to design
or lead an organization – has been incorporated into other areas of management theory,
including leadership theories.

Skills of a Manager:

The five functions of management ensures the organization runs smoothly. These five
functions are:
 Planning
 Organizing
 Staffing
 Coordinating
 Controlling

The basic skills needed are:

 Calmness
 Maturity
 Friendliness
 Tolerance
 Appreciable
 Tolerable
 Adorable
 Frank
 Determined
 Neutral towards means and end etc.

Roles of Manager:

Management expert Professor Henry Minzberg has argued that a manager’s work
can be boiled down to ten common roles. According to Minzberg, these roles, or
expectations for a manager’s behavior, fall into three categories: informational (managing
by information), interpersonal (managing through people) and decisional (managing
through action).

Figurehead
Interpersonal Leader
Liaison

Monitor
Informational Disseminator
Spokesperson

Entrepreneur
Decisional Disturbance handler
Resource Allocator
Negotiator
McGREGOR’s ASSUMPTIONS ON THEORY X AND THEORY Y

Theory X
- Most human beings dislike work and avoid it whenever possible
- They must be forced, threatened, and directly controlled in order to achieve
organizational goals.
- Most people are lazy, prefer to be directed, shun responsibility, have little ambition,
and want security
- The average human being avoids leading and wants to be led

Theory Y
- Work us natural, and most people prefer the physical and mental effort of working.
- Commitment to objectives is also a natural state for most individuals particularly
when rewards are associated with achievement.
- Human beings can exercise self-control, prefer self - direction and have the capability
for innovation and creativity.
- Under most reasonable circumstances, the majority of people will accept
responsibility, many individuals seed leadership rather that the security of being led.

In other words, Theory X is based on a set of assumptions that employees are lazy,
unambitious and must be coerced to work; hence a managerial approach based on fear
tactics.

Theory Y, on the other hand is based on a set of assumptions that employees are generally
responsible, want to have meaningful work, and are capable of self-direction; hence, a
managerial approach based on conciliatory, consultative, participative approach.

4.2 Abraham Maslow (1908-1970) based his theory of human behavior on the idea that
individuals work to satisfy human needs, including simple physiological needs such as
food, and complex psychological needs such as self-esteem.

Maslow observed that a fulfilled need did little to motivate an employee. For
example a person who has sufficient food to eat cannot be easily enticed to something for
a reward of food. In contrast, a person with an unfulfilled need could be persuaded to
work to satisfy that need. Thus, a hungry person might work hard for food. Maslow called
this the deficit principle.

The deficit principle is a crucial aspect of Maslow’s Theory of motivation based on

human needs that suggests an unsatisfied need becomes a focal motivator, while a
satisfied need no longer influences an individual’s behavior.

Maslow formulated a progression principle – a concept that successfully higher

order needs in his hierarchy of needs are not active motivators until lower order needs
are fulfilled. In other words, successively higher – level needs are activated once lower –
level needs are met.

In Maslow’s view lower – level needs that go unfulfilled tend to take precedence in
an employee’s mind over higher –level needs.

For example, for someone who is hungry, the need for food will far outweigh the
need for self-respect. This particular aspect of Maslow’s work is controversial because
many people ignor lower –level needs such as safety and security to satisfy higher order
needs such as the social need for love.
 Republic of the Philippines
State Universities and Colleges
GUIMARAS STATE COLLEGE
GRADUATE SCHOOL

CONTEMPORARY CONCEPTS OF MANAGEMENT

BEHAVIORAL APPROACH TO MANAGEMENT

I. Backdrop and Context of Developments in Management

Approaches

During the 1920’s and 1930’s, the U.S. and other industrialized nations experiences
radical social and cultural changes. Mass production triggered a Second Industrial
Revolution in U.S. Assembly lines were releasing a flood of inexpensive goods… cars,
appliances, and clothing --- into an increasingly consumer society.

The overall standard of living in U.S. rose. Working conditions in many industries
improved. As productivity increased dramatically, the average work were declined from
seventy hours to less than fifty. Factories were hard –pressed to satisfy consumer
demand. Thus, factories eagerly tried to attract workers from the farms to the cities by
making industrial employment more appealing than it was during Taylor’s tenure and
Midvale Steel.

During the Great Depression, the Federal government began to play a more
influential role in people lives. By the time Franklin Delano Roosevelt (FDR) took office
in 1933, the national economy was hovering on the brink of collapse. To provide
employment, the government undertook temporary public work projects—constructing
dams, roads, public buildings and laying out national parks. It also create government
agencies such as Social Security Administration, to assist the aged the unemployed and
the disabled.
In one of the era’s most dramatic changes, unskilled workers increased their ability
to influence management decisions by forming powerful unions. During the 1930’s
Congress passed laws increasing union powers by deterring management from restricting
union activities, legalized collective bargaining, and required management to bargain
with unions. As a result the American Federation of Labor (ADL) and Congress of
Industrial Organizations (CIO) were formed.
In 1937, the autoworkers and steelworkers won their first big contracts.
Eventually, professionals and skilled workers, as well as a unskilled workers, united for
better pay, increased benefits and improved working conditions.
Following the Depression and World War II, a new wave of optimism swept the
American economy. Organized labor enjoyed its greatest success from the 1950’s through
the 1970’s.
Against this backdrop of change and reform, managers were forced to recognize
the human aspect of their task. They were now leading workers who did not appear to
exhibit what traditional management theorists had thought was rational behavior. That
is, workers weren’t always performing up to their physiological capabilities as Taylor had
predicted rational people would do.
Nor were effective managers consistently following Fayol’s fourteen principles. By
exploring these inconsistences, those who favoured behavioral viewpoint of management
gained recognition.
II. THREE ERAS OF BEHAVIORAL APPROACH
The First Era – 1920’s when Hawthorne research inspired what we now call Human
Relations Movement.

The Second Era – post- World War II period when theories focused of human needs
and motivation.

Third Era – occurring now, as we search for integrative concepts that satisfy the dual
necessities of meeting employee needs and improving productivity.

III. THE FIRST ERA – HUMAN RELATIONS MOVEMENT

The human relations movement (HRM) focused on individuals working in group

environment. Managers and employees were studied in terms of group dynamics.

Early contributors to HRM concluded that by improving workers’ satisfaction with

their jobs, companies could improve their performance. Thus, managers were encouraged
to be more cooperative with workers, to upgrade to social environment at work, and to
reinforce the self- images of the individual employees.

The management theorists of the human relations movement are:

1. Kurt Lewin (1890-1947). He examined the effects of different types of

leaderships and wrote extensively on group behavior. He is remembered more for
his 3-step process of change—Defreezing, Introduction of change, Refreezing.

2. Chester L. Barnard (1886-1961). He advocated conciliatory management

relations that enhanced cooperation between employees and supervisors.

3. Mary Parker Follett (1868-1933). She is considered one of the founders of the
human relations movements. She felt that managers were responsible for
motivating employees to pursue organizational goals enthusiastically, not simply
to obey orders. She rejected the notion that managers should be groomed to give
orders. Instead, managers should be trained to work with employees toward the
attainment of common objectives.

Follett laid the ground work for studies in group dynamics, conflict management, and
political process in organizations. Later theorist would build on her work to contribute to
advancements in industrial psychology and sociology.

4. George Elton Mayo (1880-1949). In association with F.J. Roethisberger and

W.J. Dickson, Elton Mayo pioneered experimental research on human behavior in
work settings. Mayo and a Harvard University research team conducted a series of
experiments at the Hawthorne plant of Western Electric Company in Illinois.
Begun in 1924 to determine the effects of illumination on employee productivity,
the experiment spanned several years.

In his fieldwork, Mayo was initially concerned with scientific management, but his
result showed that human relations and behavior were far more crucial consideration for
management.
 The Hawthrone Studies have become famous for enduring contributions to
management thought. The Relay Assembly Test Room & The Bank Wiring Room. The
implications of Mayo’s work are are far reaching. After the Hawthrone Studies
organizations were viewed as social systems with both formal and informal patterns
of authority and communications.

Mayo was the first to suggest that managers needed interpersonal skills for
counselling employees, diagnosing personal and group needs and balancing technical
needs for productivity with human needs for job satisfaction. These conclusions seem
perfectly reasonable today. But in the context of industrial society at the time, many
thought that the research findings of Mayo. Roethisberger, Dickson and other
colleagues were irrational. Those were the days when collective bargaining and safety
regulations were not yet recognized, when standard workday was more than 10 hours
and children worked alongside with adults. Factories were dim and cavernous.
Employees were considered little more than productive units like machines. But
machines were treated better because they were expensive.

IV. THE SECOND ERA: HUMAN NEEDS AND MOTIVATION

The second era was dominated by a professor (McGregor) and his student
(Maslow). But it is the latter who immortalized his mentor. Both have emerged as
management gurus.
Their behavioral research emphasized motivation – the concept of behavioral
change or result of influence that alters an individual’s performance.

The research focused on personal needs of employees and how they influenced
performance. Contributions to motivation theory immediately after World War II
inspired greater efforts to understand individual behavior in work environments. This
focus led to a field of study called Organizational Behavior.

4.1. Douglas McGregor (1906-1964) brought first perspective to management. He

challenged leaders to think of subordinates as responsible, capable and
creative.

McGregor felt that throughout history leaders have treated subordinates as

irresponsible and lazy. He called this approach to management as Theory X.

Theory X managers tend to be autocratic control-oriented, and distrustful.

Theory X assumptions lead managers to view human nature pessimistically.

In contrast, McGregor identified a second perspective --- Theory Y – that

reverses these assumptions on human nature. Theory Y managers view
subordinates optimistically as individuals who want the challenge of work,
prefer self –control, and are capable of responsible, independent judgment.
THE HIERARCHY OF NEEDS THEORY

The basic human needs placed by Maslow in an ascending order of importance are the
following:

1. Physiological needs. These are the basic needs for sustaining human life itself,
such as food, water, warmth, shelter, and sleep. Maslow took the position that until
these needs are satisfied to the degree necessary to maintain life, other needs will
not motivate people.

2. Security, or safety, needs. These are the needs to be free of physical danger and
the fear of loss a job, property, food, or shelter.

3. Affiliation, or acceptance, needs. Since people are social beings they need to
belong to be accepted by others.

4. Esteem needs. According to Maslow, once people begin to satisfy their need to
belong they tend to want to be held in esteem both by themselves and by others.
This kind of need produces such satisfaction as power, prestige, status and self –
confidence.

5. Need for self – actualization. Maslow regards this as the highest need in this
hierarchy. It is desire to become what one is capable of becoming to maximize one’s
potential and to accomplish something.

THE MOTIVATION OF HYGIENE APPROACH TO MANAGEMENT

Maslow’s need approach has been considerably modified by Frederick Herzberg
and his associates. Their research purports to find a two – factory theory of
motivation. On one group of needs are such things as company policy and
administration, supervision, working conditions, interpersonal relations, salary,
status, job security, and personal life. These were found by Herzberg and his associates
to be only dissatisfiers and not motivators. In other words, if they exist in a work
environment in high quantity and quality they yield no dissatisfaction. Their existence
does not motivate in the sense of yielding satisfaction; their lack of existence would,
however result in dissatisfaction. They were consequently referred to as “hygiene”
factors.

In the second group, Herzberg listed certain satisfiers – and therefore motivators
– all related to job content. The included achievement, recognition, challenging work
advancement, and growth in the job. Their existence will yield feelings of satisfaction
or no satisfaction (not dissatisfaction).

Self – actualization
- Morality, Creativity, Sportively, Problem solving, Luck of prejudice, Acceptance of
facts

Esteem
- Self-esteem, confidence, achievement, respect of others, respect by others

Love/Belonging
- Friendship, family, sexual intimacy

Safety
- Security of employment, resources, morality the family, health, property

Physiological
- Breathing food, water, sex, sleep, homeostasis excretion
 The first group of factors Herzberg called maintenance or hygiene factors. Their
presence will not motivate people in an organization, yet they must be present or
dissatisfaction will arise. The second group or job content factors he found to be the
real motivators because they have the potential of yielding a sense of satisfaction.
Clearly, if this theory of motivation is sound, managers must give considerable
attention to upgrading job content.

COMPARISON OF MASLOW’s and HERZBERG’s THEORIES OF MOTIVATION

4.5. Apocalyptic liberation is that state of life beyond the level of self – fulfillment.
It is that stage in life when a person is “unbound” from the demands of work
whether as business owner or professional manager. His goals are service to or
betterment of society, humanity, the environment, or other “causes” or simply
inner peace and happiness.

5. THIRD ERA – INTEGRATIVE CONCEPTS OF ORGANIZATIONAL

BEHAVIOR

To begin with, an integrationist is a theorist who integrates concepts of several

schools of management thought to suggest improved management practices.
Early human relations research was value – laden and more philosophical that
practical. Classical theories, though practical, went to the opposite extreme and ignored
the human side of enterprise.
Behavioral scientist who followed McGregor and Maslow expanded their ideas and
attempted to integrate human behavior concepts with the practical necessities of
managing organization. These are the integrationists – Victor Vroom, Lyman Porter,
Edward Lawler, etc. They took McGregor’s ideas, applied Maslow’s need concepts, and
studied how organizations can use scientific techniques to achieve results.
They have proposed methods of instituting, systematic change in organizations,
resolving conflict, achieving, objectives through motivated individuals and improving
group dynamics for greater productivity.
The central theme of integration is that understanding human behavior is the key
to effective management, but that management practices must still be based on
scientifically sound concepts.
More recently, integrative approaches have focused on national trends in
productivity and how organizations can improve their performance.
 5.1 Theory Z
McGregor’s use of “X” or “Y” as identifiers for management style has been expanded
to include Theory Z which has become a convenient label for Japanese management
philosophy. Theory Z refers to Japanese management practices of consensus decision –
making, quality circles and employee participation to enchance productivity Theory Z
captures the essence of Japanese management techniques as practiced by excellent firm
in U.S.
William Ouchi introduced Theory X in 1981 to describe American adaptation of
Japanese organizational behavior. His theory is based on a comparison of management
in Japanese organizations – called J – type firms – with management in American firm –
called A – type enterprises.
Contrasts Between American and Japanese Organizations
AMERICAN – TYPE A JAPANESE – TYPE J
Mobile Employees Lifetime Employment
Personal Decision Making Collective Decision Making
Individual Responsibility Group Responsibilities
Rapid Advancement Slow and Systematic Advancement
Specialization in Careers General Career Perspective
Explicit Control Mechanisms Implicit Control System
Focused Concern for Employees Holistic Concern for Employees
Ouchi Recognized that cultural differences between the two nations prevent
American managers from adopting Japanese techniques without modifications. For
example: Americans are highly mobile; often seen opportunities, jobs, and career
advancement by changing employers. Japanese workers contrast, tend to make a lifetime
commitment to their organization.
Still Ouchi discovered similarities between practices in America’s leading firms
and Japanese organizational behavior. For example: in Hewlett – Packard and IBM, long
term employment has been the norm, even though it falls short of lifetime commitment.
Typical A-type firms rely on individual management decision – making and J-type
firms rely on collective decision-making. But a number of excellent U.S. firms endorse a
“collaborative” decision – making process closely approximating J-type behavior.
Perhaps the most important element in Theory Z is its combination of human
relations concepts and scientific management techniques.
The Z-type company endorses collective responsibility, a pervasive concern for
employees, and a commitment to participative decision-making. These organizations
recognize individual and group needs, but simultaneously develop exceptional quality
control techniques and scientific work methods. Theory Z incorporates classical
principles, behavioral tenets and human relations concepts to emphasize quality and
productivity.
Universally Accepted Functions of Management:

 Planning
Refers to the formulation of objectives, programs, policies, procedures, rules and
regulations in order to achieve goals of the business.

 Staffing
Involves filling and keeping filed the positions provided in the organization
structure

 Organizing
Is the grouping together of people, establishing relationship among them, and
defining the authority and responsibility that the personnel have in the use of the
company’s material resources to attain predetermined goals and objectives.

 Directing
Directing has to do with predominantly interpersonal aspect of managing.

 Controlling
Is the process of measuring and correcting the activities of subordinates and the
company itself to assure conformity plan.

Nature of Management:

Management: Art or Science?

Management involves characteristics of both art and science. While certain aspects
of management make it a science, certain others which involve application of skills make
it an art. Every discipline of art is always backed by science which is basic knowledge of
that art. Similarly, every discipline of science is complete only when it is used in practice
for solving various kind of problems. Whereas under “science” one normally learns the
“why: of phenomenon, under “art” one learns the “how” of it. In the words of Robet H.
Hilkert: In the area of management, science and art are two sides of the same coin.
In the beginning of development of management knowledge, it was considered as
an art. There was a jungle of management knowledge. Any one used it to get things done
in his own way. But later by codifying and systemizing the management, it became a
science as well as being an art.
Management as an Art:
Management can be an art in the sense that it has the following characteristics:
 Just like other arts it has to be practiced and performed. The knowledge should be
learned and practiced, just as medical or legal practitioners practice their
respective sciences.
 The manager gains experience by continuous application of management
knowledge and facing new experiences. This helps to develop more skills and
abilities for translating knowledge into practice.
 Application calls for innovativeness and creativity.
Fayol’s Principles of Management
Working at the same time as Weber but independently of him. Frenchman Henri
Fayol (1841-1925), the CEO of Comambault Mining, identified 14 principles (summarized
in Table A1) that he believed to be essential to increasing the efficiency of the management
process. Some of the principles that Fayol outlined have faded from contemporary
management practices, but most have endured.
The principles that Fayol and Weber set forth still provide a clear and appropriate
set of guidelines that managers can use to create a work setting that remain the
foundation of modern management theory; recent researchers have refined or developed
them to suit modern conditions. For example, Weber’s and Fayol’s concerns for equity
and for establishing appropriate links between performance and reward are central
themes in contemporary theories of motivation and leadership.
Table A1 Fayol’s 14 Principle of Management

Division of Labour Job specialization and the division of labour should increase
efficiency, especially if managers take steps to lessen employees’ boredom.
Authority and Responsibility Managers have the right to give orders and the
power to exhort subordinates for obedience.
Unity of Command an employee should receive orders from only one superior.
Line Authority The length of the chain of command that extends from the top to the
bottom of an organization should be limited.
Centralization Authority should not be concentrated at the top of the chain of
command.
Unity Direction. The organization should have a single plan of action to guide
managers and employees.
Equity All organizational members are entitled to be treated with justice and respect
Order The arrangement of organizational positions should maximize organizational
efficiency and provide employees with satisfying career opportunities.
Initiative Managers should allow employees to be innovative and creative.
Discipline Managers need to create a workforce that strives to achieve organizational
goals.
Remuneration of Personnel The system that managers use to reward employees
should be equitable for both employees and the organization.

BEHAVIORAL MANAGEMENT THEORY:

The behavioral management theorists writing in the first half of the twentieth
century all chose a theme that focused on how managers should personally behave in
order to motivate employees and encourage them to perform at high levels and be
committed to the achievement of organizational goals.
According to the assumptions of Theory X, the average employee is lazy, dislikes work,
and will try to do as little as possible. Moreover, employees have little ambition and wish
to avoid responsibility. Thus the manager’s task is to counteract employees natural
tendencies to avoid work. To keep employees performance at a high level the manager
must supervise them closely and control their behavior by means of rewards and
punishments.
Theory Y assumes that employees are not inherently lazy, do not naturally dislike work
and if given the opportunity will do what is good for the organization. According to Theory
Y, the characteristics of the work setting determine whether employees consider work to
be a source of satisfaction or punishment and managers do not need to control employees
behavior closely in order to make them perform at a high level because employees will
exercise self-control when they are committed to organizational goals. It is the manager’s
task to create a work setting that encourages commitment to organizational goals and
provides opportunities for employees to be imaginative and to exercise initiative and self
– direction.
MANAGEMENT SCIENCE THEORY:
Management science theory is a contemporary approach to management that focuses on
the use of rigorous quantitative techniques to help managers make maximum use of
organizational resources to produce goods and services. In essence, management science
theory is a contemporary extension of scientific management.
These are many branches of management science, each of which deals with a specific set
of concerns:
 Quantitative management uses mathematical techniques – such as linear and non
–linear programming, modelling, simulation, queuing theory, and chaos theory –
to help managers decide, for example, how much inventory to hold at different
times of the year, where to build a new factory, and how best to invest an
organizations financial capital.
 Operations management (or operations research) provides managers with a set of
techniques that they can use to analyze any aspect of an organization’s production
system to increase efficiency.
 Total quality management (TQM) focuses on analyzing an organization’s in
conversion, and output activities to increase product quality.
 Management information systems help managers design information systems that
provide information about events occurring inside the organization as well as in its
external environment – information that is vital for effective decision making.
All these subfields of management science provide tools and techniques that managers
can use to help improve the quality of their decision making and increase efficiency
and effectiveness.
ORGANIZATIONAL ENVIRONMENT THEORY:
An important milestone in the history of management thought occurred when
researchers went beyond the study of how managers can influence behavior within
organizations to consider how managers control the organization’s relationship with
its external environment or organizational environment – the set of forces and
conditions hat operate beyond an organization’s boundaries but affect a manager’s
ability to acquire and
use resources. Resources in the organizational environment include the raw materials
and skilled people that an organization needs to produce goods and services as well as
the support of groups – such as customers who buy these goods and services – that
provide the organization with financial resources. The importance of studying in the
environment became clear after the development of open – systems theory and
contingency theory during the 1960s.
The Open – Systems View
One of the most influential views of how an organizations is affected by its external
environment was developed by Daniel Katz, Robert Kahn, and James Thompson in
the 1960s. These theorists viewed the organization 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 then sent back to that environment where they are bought
by customers.
The system is said to be “open” because the organizations is affected by its external
environment in order to survive; in other words, the organizations is open to its
environment. A closed system in contrast is a self – contained system that is not
affected by changes that occur in its external environment. Organizations that operate
as closed systems that ignore the external environment and that fail to acquire inputs
are likely to experience entropy the tendency of a system to dissolve and disintegrate
because it loses the ability to control itself.
Researchers using the open – systems view are interested in how the various parts of
a system work together to promote efficiency and effectiveness, systems theorists like
to argue that the parts are more than the sum of the whole they mean that an
organization performs at a higher level when its departments work together rather
than separately. Synergy the performance gains that result when individuals and
departments coordinate their actions is possible only in an organized system. The
recent interest in using teams comprising people from different departments reflects
systems theorists interest in designing organizational systems to create synergy and
thus increase efficiency and effectiveness.
Contingency Theory
Another milestone in management theory was the development of contingency theory
in the 1960s by Tom Burns and G.M. Stalker in the United Kingdom and Paul
Lawrence and Jay Lorsch in the United States. Recognizing that organizations need to
acquire valuable resources, the crucial message of contingency theory is that there is
no one best way to organize. The organizational structures and the control systems
that managers choose depend on – and are contingent on – the characteristics of the
external environment in which the organization operates.
An important characteristic of the external environment that affects an organizations
ability to obtain resources is the degree to which the environment is changing.
Changes in the organizational environment include: changes in technology, which can
lead to the creation of new products (such as compact discs) and result in the
disappearance of existing products (such as eight rack tapes); the entry of new open
competitors (such as foreign organizations that compete for available resources); and
unstable economic conditions. In general the more quickly the organizational
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 people in different departments in order to respond to the environment
quickly and effectively.
In the real world, these roles overlap and a manager must learn to balance them in order
to manage effectively. While a manager’s work can be analyzed by these individual roles,
in practice they are intermixed and interdependent. According to Mintzber” The manager
who only does ends up doing it all alone.”
Interpersonal role:
The roles in this category involve providing information and ideas.
 Figurehead – perform social and legal duties, act as symbolic leader.
 Leader – direct and motivate subordinates, select and train employees.
 Liaison – establish and maintain contacts within and outside the organization.
Informational Role:
The roles in this category involve processing information.
 Monitor – seek and acquire work – related information.
 Disseminator – communicate/disseminate information to others within the
organization.
 Spokesperson- communicate/transmit information to outsiders.
Decisional Role:
The roles in this category involve using information:
 Entrepreneur – identify new ideas and initiate improvement projects
 Disturbance handler – deals with disputes or problems and takes corrective action.
 Resource Allocator – Decide where to apply resources
 Negotiator – defends business interests.
WHAT ARE MANAGERAL SKILLS?
Simply, managerial skills are the knowledge and ability of the individuals in a managerial
position to fulfill some specific managerial activities or tasks. This knowledge and ability
can be learned and practiced. However, they also can be acquired through practical
implementation of required activities and tasks. Therefore each skill can be developed
through learning and practical experience of the individuals.
There are many definitions about skills that talk about talent. Talent is something
personal related to an individual and presents a native gifts from the nature about that
something inside that talented person. All persons cannot be artists. Usually, artists are
born with the gift of art, but despite their talent they continue to develop their talent to
improve their art skills.
When we talk about managerial skills, we talk about skills of a manager to maintain high
efficiency in the way how his or her employees complete their everyday working tasks.
Because of that, managers will need skill that will help them to manage people and
technology to ensure an effective and efficient realization of their working tasks.
THREE TYPES OF MANAGERIAL SKILLS
Robert Katz identifies three types of skills that are essential for a successful management
process:
 Technical
 Conceptual
 Human or interpersonal management skills.
TECHNICAL SKILLS
As the name of these skills tells us, they give the manager’s knowledge and ability to use
different techniques to achieve what they want to achieve. Technical skills are not related
only for machines, production tools or other equipment but also they are skills that will
be required to increase sales, design different types of products and services, markets the
products and services…

For example let’s take an individual who works in the sales department and have high
developed sales skills obtained through education and experience in his department or
the same departments in different organizations. Because of these skills that he possesses,
this person can be a perfect solution to become sales manager. This is the best solution
because he has great technical skills related to the sales department.
The Work of Mary Parker Follett
If F.W. Taylor is considered to be the father of management thought, Mary Parker Follett
(1868 – 1933) serves as its mother. Much of her writing about management and about the
way managers should behave toward employees was a response to her concern that Taylor
was ignoring the human side of organization. Follett also proposed that knowledge and
expertise and not managers’ formal authority deriving from their position in the many
management theorists today, that power is fluid and should flow to the person who can
best help the organization achieve its goals. Follett 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 behavioral approach
to management was radical for its time.

The Hawthorne Studies and Human Relations

Probably because of it radical nature, Follett’s work went unappreciated by managers and
researchers until quite recently. Instead, researchers continued to follow in the footsteps
of Taylor and the Gilberths. One focus was on how efficiency might be increased through
improving various characteristics of the work setting, such as job specialization or the
kinds of tools employees used. One 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 employee fatigue and
performance. The researchers conducted an experiment in which they systematically
measured employee productivity at various levels of illumination.

One of the main implications of the of the Hawthorne studies was that the behavior
of managers and employees in the work setting is as important in explaining the level of
performance as the technical aspects of the task. Managers must understand the workings
of the informal organization, the system of behavioral rules and norms that emerge in a
group, when they try to manage or change behavior in organizations. Many studies have
found that as time passes, groups often develop elaborate procedures and norm that bond
member together, allowing unified action either to cooperate with management in order
to raise performance or to restrict output and undermine organizational goals. The
Hawthorne studies demonstrated the importance of understanding how the feelings,
thoughts, and behavior of work – group members and managers affect performance. It
was becoming increasingly, clear to researchers that understanding behavior in
organizations is a complex process that is critical to increasing performance. Indeed, the
increasing interest in the area of management known as organizational behavior – the
study of the factors that have an impact on how individuals and groups respond to and
act in organizations – dates from these early studies.

Theory X and Theory Y

Several studies after the Second World War revealed how assumptions about employees
attitudes and behavior affect managers’ behavior. Perhaps the most influential approach
was developed by Doughlas McGregor. He proposed that two different sets of
assumptions about work attitudes and behaviors dominate the way managers think and
affect how the behave in organizations. McGregor named these two contrasting sets of
assumptions Theory X and Theory Y.