Monday, July 9, 2012

Behavioral and Contemporary Theories of Management

By:  Gilbert M. Forbes 
 
II.    Behavioral School
The behavioral management theory is often called the human relations movement because it addresses the human dimension of work. Behavioral theorists believed that a better understanding of human behavior at work, such as motivation, conflict, expectations, and group dynamics, improved productivity. The theorists who contributed to this school viewed employees as individuals, resources, and assets to be developed and worked with — not as machines, as in the past. Several individuals and experiments contributed to this theory.

The key scholar under this category is Elton Mayo. The origin of behavioralism is the human relations movement that was a result of the Hawthorne Works Experiment carried out at the Western Electric Company, in the United States of America that started in the early 1920s (1927-32). Elton Mayo and his associates’ experiments disproved Taylor’s beliefs that science dictated that the highest productivity was found in ‘the one best way’ and that way could be obtained by controlled experiment. The Hawthorne studies attempted to determine the effects of lighting on worker productivity. When these experiments showed no clear correlation between light level and productivity the experiments then started looking at other factors. These factors that were considered when Mayo was working with a group of women included rest breaks, no rest breaks, no free meals, more hours in the work-day/work-week or fewer hours in the workday/work-week. With each of these changes, productivity went up. When the women were put back to their original hours and conditions, they set a productivity record. 

These experiments proved five things.  First, work satisfaction and hence performance is basically not economic – depends more on working conditions and attitudes - communications, positive management response and encouragement, working environment. Second, it rejected Taylorism and its emphasis on employee self-interest and the claimed over-riding incentive of monetary rewards. Third, large-scale experiments involving over 20,000 employees showed highly positive responses to, for example, improvements in working environments (e.g., improved lighting, new welfare/rest facilities), and expressions of thanks and encouragement as opposed to coercion from managers and supervisors. Fourth, the influence of the peer group is very high – hence, the importance of informal groups within the workplace. Finally, it denounced ‘rabble hypotheses’ that society is a horde of unorganized individuals (acting) in a manner calculated to secure his or her self-preservation or self-interest.

These results showed that the group dynamics and social makeup of an organization were an extremely important force either for or against higher productivity. This outcome caused the call for greater participation for the workers, greater trust and openness in the working environment, and a greater attention to teams and groups in the work place. Finally, while Taylor’s impacts were the establishment of the industrial engineering, quality control and personnel departments, the human relations movement’s greatest impact came in what the organization’s leadership and personnel department were doing. The seemingly new concepts of “group dynamics”, “teamwork”, and organizational “social systems”, all stem from Mayo’s work in the mid-1920s.
Theory X” and “Theory Y”.

Douglas McGregor (1906-1964) postulated management ideas as contained in “Theory X” and “Theory Y”. Using human behavior research, he noted that the way an organization runs depends on the beliefs of its managers. “Theory X” gives a negative view of human behavior and management that he considered to have dominated management theory from Fayol onwards – especially Taylorism. It also assumes that most people are basically immature, need direction and control, and are incapable of taking responsibility. They are viewed as lazy, dislike work and need  a mixture of financial inducements and threat of loss of their job to make them work (‘carrot and stick’ mentality). 

“Theory Y”, the opposite of “Theory X”, argues that people want to fulfill themselves by seeking self-respect, self-development, and self-fulfillment at work as in life in general. The six basic assumptions for ‘Theory Y’ are: work is as natural as play or rest – the average human being does not inherently dislike work, whether work is a source of pleasure or a punishment (to be avoided) depends on nature of the work and its management. Second, effort at work need not depend on threat of punishment –  if committed to objectives then self-direction and self-control rather than external controls. Third, commitment to objectives is a function of the rewards associated with their achievement.

Satisfaction of ego and self-actualization needs can be directed towards the objectives of the organization. Fourth, the average human being learns, under proper conditions, not only to accept but to seek responsibility. Fifth, high degrees of imagination, ingenuity and creativity are not restricted to a narrow group but are widely distributed in the population. Lastly, under the conditions of modern industrial life, the intellectual potentials of the average human being are being only partly utilized. 

Abraham Maslow, a practicing psychologist, who developed one of the most widely recognized need theories, a theory of motivation based upon a consideration of human needs. As a practicing psychologist, he observed that his patients are motivated by a sequence of needs, including monetary incentives, social acceptance and others.  Maslow’s theory of hierarchical needs was a primary factor in the increased attention that managers began to give to the work of academic theorists.  His theory helped managers visualize employee motivation.

III.    Management Science School
The management science school provides managers with a scientific basis for solving problems and making decisions. This school grew directly out of the World War II groups (called operational research teams in Great Britain and operations research teams in the United States).

Churchman, Ackoff, and Arnoff define the management science approach as an application of the scientific method to problems arising in the operation of a system, and the solving of these problems by solving mathematical equations representing the system.  Its distinguishing characteristics separating it from that of Taylor’s Scientific Management Theory is the fact that efficiency comes from proper planning and making the right decisions.
  • Mathematical models In management science, mathematical model attempts to reduce a managerial decision to a mathematical form so that the decision-making process can be simulated and evaluated before the actual decision is made.
  • Computer applications.  It’s use has been the driving force behind the emergence of the management science approach.
  • Evaluation criteria model have been evaluated against a set of effectiveness criteria (e.g., revenue, return on investment, and cost savings).
  • Operations management refers to the various models and techniques in use. Some of the commonly used methods are forecasting, inventory modeling, linear and nonlinear programming, scheduling, simulation, networks models, probability analysis, and break-even analysis. Operations management specialists use these techniques to solve manufacturing problems.
  • Management information system (MIS) is the most recent subfield of the management science perspective. MIS is a system designed to provide information to managers in a timely and cost-efficient manner. It entails and integrated data base (usually in a computer), a hierarchical information structure, and an orientation toward decision support.
Because management science thought is still evolving, more specific technique can be expected.

IV.    Recent Developments in Management Theory (Contemporary Management Theories)
Under this category of theory are the Systems Approach, Situational or Contingency theory, Chaos theory, and Team Building theory.

The systems theory has had a significant effect on management science and understanding organizations. A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. A system can be looked at as having inputs (e.g., resources such as raw materials, money, technologies, people), processes (e.g., planning, organizing, motivating, and controlling), outputs (products or services) and outcomes (e.g., enhanced quality of life or productivity for customers/clients, productivity). Systems share feedback among each of these four aspects of the system
The Systems Theory may seem quite basic. Yet, decades of management training and practices in the workplace have not followed this theory. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. The effect of systems theory in management is that it helps managers to look at the organization more broadly. It has also enabled managers to interpret patterns and events in the workplace – i.e., by enabling managers to recognize the various parts of the organization, and, in particular, the interrelations of the parts.

The situational or contingency theory asserts that when managers make a decision, they must take into account all aspects of the current situation and act on those aspects that are key to the situation at hand. Basically, it is the approach that “it depends”. For example, if one is leading troops in Iraq, an autocratic style is probably best. If one is leading a hospital or University, a more participative and facilitative leadership style is probably best.

According to this model, the formal structure of an organization defines the roles of its members in a specific way and thereby directs their behavior to a certain degree. The performance of the organization depends on the degree to which these role definitions enable members to cope with the requirements resulting from the context of the organization. For example if there is strong competition and a high degree of technological change, decisions about new products and marketing strategies have to be changed frequently and be taken close to the market. A formal structure with a high degree of centralization, specialization and formalization would not fit to the requirements resulting from this situation, rather roles defined by a low degree of these structural dimensions would enable members to act in the required flexible way.

The Chaos theory is advocated by Tom Peters (1942). As chaotic and random as global events seem today, they are equally chaotic in organizations. Yet for many decades, managers have acted on the basis that organizational events can always be controlled. Thus, a new theory, known as chaos theory, has emerged to recognize that events are rarely controlled. Chaos theorists suggest that systems naturally go to more complexity, and as they  do  so,  they  become  more  volatile and must, therefore, expend more energy to maintain that complexity. As they expend more energy, they seek more structure to maintain stability. This trend continues until the system splits, combines with another complex system or falls apart entirely. It will need an effective manager for the latter worst scenario not to happen. 

Team Building approach or theory. The last management theory is the Team Building approach or theory.  This theory emphasizes quality circles, best practices, and continuous improvement. It is a theory that mainly hinges on reliance on teamwork. It also emphasizes flattening of management pyramid, and reducing the levels of hierarchy. Finally, it is all about consensus management – i.e., involving more people at all levels in decision-making.

Total Quality Management.  In this category are the works of Edward W. Deming and Douglas McGregor. Edward Deming is the founder of modern quality management and is regarded by the Japanese as the key influence in their postwar economic miracle. He postulated several assumptions: create constancy of purpose for continual improvement of products and service; adopt the new philosophy created in Japan; cease dependence on mass inspection; build quality along with price; improve constantly and forever every process planning, production, and service; institute modern methods of training  on-the-job for including management; adopt and institute leadership aimed at helping people to do a better job; drive out fear, encourage effective two-way  communication; breakdown barriers between departments and staff areas; eliminate exhortations for the workforce – they only create adversarial relationships; eliminate quotas and numerical targets; remove barriers to pride of workmanship, including annual appraisals and Management by Objectives; encourage education and self-improvement for everyone; and define top management’s permanent commitment to ever improving quality and productivity and their obligation to implement all these principles.

The Quantitative Approach is hardly used and known by managers. It emerges from operations research and management science. It is a mathematical and statistical solution to problems using optimization models, and computer  simulations. It is most effective 21management decision-making rather  than managerial behavior. The management theories that have been discussed, important as they are, have to be translated in practice by managers.
  • A quantitative approach to management involves a systematic and scientific approach to decision making and problem solving in complex situations and environments that may involve uncertainty and conflict. Those carrying out the approach will search for an optimal answer for a problem by applying quantitative models. The use of these mathematical models help the decision maker understand the problems better and enable them to make a calculated, informed and reasoned judgment.
  • Use of statistics in quantitative research. Statistical methods are used extensively in the field of management and begin with a collection of data. This data is required to be verified, validated and recorded before the analysis takes place. 
  • Measuring quantitative research. The best way to measure quantitative research is debated by many. In most cases, measurement is regarded as being the only way that observations can be expressed numerically so that causal relations or associations can be investigated. Many believe that measurement plays a more important role in quantitative research than this. Some suggest that it is important to look at the abnormalities within quantitative research as well.
A quantitative approach to management allows researchers to use numerical models in order to collect and analyze data for a business. This information can help the management make informed and reasonable judgments.

(Mr. Gilbert M. Forbes had his Bachelors Degree and MA in Educational Management (CAR) from the Philippine Normal University.  A campus paper adviser and trainer for 13 years.  Currently, he is a school principal in one of the central schools in the Division of Quezon.) 

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References:

http://www.demo-net.org/get-involved/glossary/theories/contingency-approach-in-organizational-theory/?searchterm=Contingency%20approach%20in%20organizational%20theory


Dr. Yasin Olum, MODERN MANAGEMENT THEORIES AND PRACTICES, a paper presented at the 15th East African Central Banking Course, held on
12th July 2004, at Kenya School of Monetary Studies.


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