Makerere University Business SchoolStrategic Management Course

MANAGEMENT THEORIES - 2

Human Relations and social psychological schools

• These theorists were academics and social scientists.

• They were concerned with the human factor at work.

• This was contrary to the classical theorists, who concentrated on work itself but not the worker doing the job.

• They dealt with human motivation, group relationship and leadership.

• A few motivation theories are mentioned here after – broad topics (group behaviour and leadership have been left out of this course).

Early motivation theorists

• Human motivation– Processes by which people seek to satisfy

basic drives, perceived needs and personal goals, which trigger human behaviour.

• Early theorists concentrated on motivation contents (e.g drives, needs) – content theories

• Didn’t focus on process

Motivation basic model

Motivation has the following components

Physical /Emotional

Behaviour Satisfaction / Frustration

OutcomeResponseStimulus

Elton Mayo

• Was an Australian psychologist• A researcher in occupational aspects,

– E.g fatigue, accidents, labour turn-over

• Conducted studies for Western Electrics, Chicago, USA (Hawthorne studies)

• Studies were on the worker rather than work• Employees were subjected varying physical

conditions and they didn’t affect productivity• Focus was shifted to social aspects and they

related to behaviour and productivity

Mayo’s conclusion

• “Man is a social animal”• Individual workers cannot be treated in

isolation• Belonging to a group is more important than

monetary incentives and good physical conditions

• Informal groups strongly influence workers’ behaviour

Abraham Maslow (1950 / 60s)

• Physiological needs: Need for food, sleep, sex, e.t.c.

• Safety needs: Stable environment relatively free from threats

• Love needs: Group status, affectionate relations with others

• Esteem needs: Self respect, self-confidence• Self-actualisation: Self-fulfilment

Maslow’s needs - continued

• That people tended to satisfy the above needs systematically

• Main criticism on Maslow’s theory – – Systematic movement up the hierarchy does

not seem to happen practically.

• Maslow’s theory, however, formed a framework to analyse a variety of needs

D McGregor – Theory X and Theory Y

• Managers’ assumptions about employeesTheory X• That employees are lazy, require coercion

and control• Avoid responsibility, seek security• Similar to a rational economic man

suggested by Schein & Adam Smith)• Strongly related to scientific management

Theory Y• Opposite of theory X• That people like work• They work as naturally as resting or playing• They don’t have to be controlled coerced

– If committed to objectives

• They don’t only accept but seek responsibilities• Similar to Maslow’s higher level needs and

Schein’s self-actualising man• A blend of theory X & Y is more representative of

real life.

Later Motivation theories

Theory Z – The Japanese approachW. Ouchi• American exponent of Japanese approach,

with• Attempts for western firms to adapt Japanese

style• Based on success of Japanese manufacturing

Japanese success

• Efficient use of resources, especially peopleStrong personnel-related factors• Mutual trust – employees and management• Employees’ royalty to organisations• Non-specialised career paths – job rotation• Shared decision making• Long term performance appraisal• Collective responsibility

Remarks on the approach• Some Japanese features are not

transferable to west due to cultural issues• The west needs to develop better the

employee factor, on top of technology• Japanese engineering has “Taylorism”

leading to standard production controls but with improved HR aspects.

Criticism• Slow decision making• Imprisoning lifetime employment

SYSTEMS & CONTINGENCY APPROACHES

Organisations as systems• Organisations are set up as open social systems. • A system is a collection of inter-related parts, which

form some whole.• Examples of systems are: the human body, a

communication network, and a social system. • A system can be open or closed. • An open system obtains inputs from and discharges

outputs to its environment.• A closed system is self-supporting• Social systems, including all organisations as

mentioned above, are open systems.

Characteristics of open systems

• They receive inputs or energy from the environment

• They convert inputs into outputs• They discharge outputs into the environment• They are cyclic in nature. • Exercise negative negative entropy.• A stable system is self-adjusting to a steady state.

This is called negative feedback. • Equifinality. Open systems do not have to achieve

their objectives in using one particular method.

Key variables in an organisation as a system

• People – as individuals or groups

• Technology

• Organisation structures and

• Environment

People

Materials

e.t.c

Information

Finance

Production & Marketing activities Planning, organising & control mechanisms Research & Development e.t.c

Products

Services

Ideas

Waste

INPUTS CONVERSION OUTPUTS

Feedback of information & results

Model of an organisation as an open system

Systems - continued

• A system consists of subsystems• An organisation’s boundaries, which are often

invisible, are defined strategically by stating the scope of its activities.

• Subsystems also have boundaries, which are called interfaces.

• Some employees work at external boundaries in such activities as:– Capital raising, Purchasing and Customer interaction

• Internal boundary employees manage interfaces • Some sub-systems tend to be relatively self-

contained – closed.

Contingency approaches• Contingency builds on systems approach • It recognises organisations to consist of

interdependent components:– External environment, Technology and Human

skills and motivation

• Contingency approach suggests that organisations should look for the most appropriate combination of structural design in a given environment.

• Initially suggested by two American researchers at Harvard called Lawrence and Lorsch (1967) and several others shortly followed.

Modern approach to management

• Current approaches to management are more of management currently in practice than mere mare management theory.

• Modern management background stems from– Advances in technology, Increased competition

and expanding markets, especially from Asia,– Increasing consumer expectations– Improvements in communication,– General globalisation making the world more inter-

connected than ever before.

Strategic management approach• Organisations to clearly state a vision and

mission,• Formulation of organisation objectives• External environment analysis• Organisation (internal) analysis• Strategic choice and strategic implementation• Managing change in and around the

organisation• Developing and utilising new technology• Developing and utilising skilled labour• Creation of flexible structures but with relative

stability