Managmet Tehory and Practice
Managmet Tehory and Practice
Managmet Tehory and Practice
Founders/Theorists of Classical
Management Theory
The major founders/theorists of classical management theory are:
1. Frederick Taylor: Founder of scientific management.
2. Henri Fayol: Founder of administrative management.
3. Max Weber: Introduced bureaucratic management.
4. Luther Gulick: Contributed to classical organizational theory.
5. Elton Mayo: Conducted the Hawthorne studies.
These individuals made significant contributions to the development of classical
management theory, which continues to influence management practices today.
3. Founders of Neo-Classical Management Theory
The Neo-Classical Management Theory, also known as the Human Relations Approach, was
developed as a response to the limitations of the Classical Management Theory. It
emphasized the importance of human factors in organizations and focused on improving
employee satisfaction and productivity.
The major contributors to the Neo-Classical Management Theory are:
1. Elton Mayo: Mayo conducted the famous Hawthorne Studies at the Western Electric
Hawthorne Works in Chicago. These studies highlighted the significance of social and
psychological factors in the workplace. Mayo's research showed that employees' attitudes,
relationships, and group dynamics greatly influenced their productivity.
2. Mary Parker Follett: Follett was a social worker and management consultant who emphasized
the importance of cooperation and collaboration in organizations. She advocated for the
integration of different departments and the use of participative decision-making processes.
Follett's ideas laid the foundation for modern concepts like teamwork and empowerment.
3. Chester Barnard: Barnard focused on the informal organization and the role of leadership in
achieving organizational goals. He emphasized the importance of effective communication,
cooperation, and the acceptance of authority within an organization. Barnard's work
highlighted the significance of managerial functions beyond planning and controlling.
Contributions of Neo-Classical Management Theory
The Neo-Classical Management Theory made several significant contributions to the field of
management:
1. Human Relations: The theory recognized the importance of human factors in organizations. It
emphasized the need to understand and address employees' social and psychological needs to
improve their motivation, job satisfaction, and productivity.
2. Employee Participation: Neo-Classical theorists advocated for involving employees in
decision-making processes. They believed that involving employees in decisions that affected
them would lead to increased commitment, job satisfaction, and better organizational
outcomes.
3. Informal Organization: The theory acknowledged the existence of informal groups and
networks within organizations. It recognized that these informal relationships could
significantly impact employee behavior and organizational performance. Managers were
encouraged to understand and leverage these informal networks to achieve organizational
goals.
4. Leadership and Communication: Neo-Classical theorists emphasized the role of leadership in
creating a positive work environment. They highlighted the importance of effective
communication, cooperation, and the acceptance of authority in achieving organizational
objectives.
5. Motivation and Job Satisfaction: The theory emphasized the role of motivation and job
satisfaction in improving employee performance. It recognized that satisfied and motivated
employees are more likely to be productive and contribute to the success of the organization.
Overall, the Neo-Classical Management Theory shifted the focus from a purely mechanistic
approach to a more human-centered approach. It highlighted the importance of understanding
and addressing the needs of employees to create a productive and harmonious work
environment.
4. Modern Management Theory: Quantitative, System and
Contingency Approaches to Management!
The Modern Period (1960 to present). After, 1960 management
thought has been turning somewhat away from the extreme human
relations ideas particularly regarding the direct relation between
morale and productivity. Present management thinking wishes
equal emphasis on man and machine.
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Limitations:
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(iii) The various mathematical tools help in decision making. But
decision making is one part of managerial activities. Management
has many other functions than decision-making.
Harold Knootz. Also observes that “it is too hard to see mathematics
as a separate approach to management theory. Mathematics is a
tool rather than a school.”
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Evaluation:
This approach takes a realistic view in management and
organisation. It discards the universal validity of principles.
Executives are advised to be situation oriented and not stereo-
typed. So executives become innovative and creative.
On the other hands, this approach does not have theoretical base.
An executive is expected to know all the alternative courses of action
before taking action in a situation which is not always feasible
Transformational Leadership
Transformational leadership focuses on inspiring and motivating followers to achieve their
full potential and exceed their own expectations. Leaders who adopt this style often have a
long-term vision and seek to create positive change within their organization. They inspire
their followers by setting high expectations, providing support and encouragement, and
acting as role models. Transformational leaders also emphasize personal growth and
development, fostering a sense of trust and loyalty among their followers.
Key characteristics of transformational leadership include:
Visionary: Transformational leaders have a clear vision and communicate it effectively to
their followers.
Inspirational: They inspire and motivate their followers through their own enthusiasm and
passion.
Intellectual Stimulation: They encourage creativity and innovation, challenging their
followers to think critically and solve problems.
Individualized Consideration: Transformational leaders show genuine concern for the
needs and development of each follower, providing personalized support and guidance.
Transactional Leadership
Transactional leadership, on the other hand, focuses on maintaining stability and achieving
specific goals through a system of rewards and punishments. Leaders who adopt this style
emphasize the exchange relationship between themselves and their followers. They set clear
expectations, establish performance goals, and provide rewards or punishments based on the
achievement of those goals. Transactional leaders primarily focus on managing tasks and
ensuring compliance with established procedures and standards.
Key characteristics of transactional leadership include:
Contingent Rewards: Transactional leaders provide rewards, such as recognition,
promotions, or bonuses, in exchange for meeting performance expectations.
Management by Exception: They monitor performance closely and intervene only when
deviations from expected standards occur.
Active Management by Exception: Leaders actively search for and address problems or
errors.
Passive Management by Exception: Leaders intervene only when problems become
significant or when requested by followers.
Key Differences
The main differences between transformational and transactional leadership can be
summarized as follows:
Focus: Transformational leadership focuses on inspiring and motivating followers, while
transactional leadership focuses on achieving specific goals and maintaining stability.
Approach: Transformational leaders use charisma, vision, and personal relationships to
inspire and empower followers, while transactional leaders use rewards and punishments to
motivate and control followers.
Long-term vs Short-term: Transformational leadership is more focused on long-term goals
and creating positive change, while transactional leadership is more focused on short-term
goals and maintaining the status quo.
Employee Development: Transformational leaders prioritize the personal growth and
development of their followers, while transactional leaders focus on task completion and
compliance.
Leadership Style: Transformational leadership is seen as more empowering and
participative, while transactional leadership is seen as more directive and transactional.
In summary, while both transformational and transactional leadership have their merits,
transformational leadership is often associated with higher levels of employee satisfaction,
commitment, and performance, as it fosters a sense of purpose and personal growth.
Transactional leadership, on the other hand, can be effective in situations that require clear
expectations and immediate results.
Departmentation Recommendation for ABC Company
To determine the most suitable departmentation for ABC Company, we can consider the five
common bases of departmentation:
1. Functional Departmentation: This involves grouping activities by functions such as
marketing, finance, and production. It offers specialization and efficiency but may lead to a
lack of focus on products.
2. Product Departmentation: Grouping activities based on the company's different products or
product lines. This allows for a focus on specific products but may result in duplication of
functions.
3. Customer Departmentation: Grouping activities based on customer segments. This can lead
to better understanding and service for specific customer groups but may result in duplication
of efforts.
4. Geographical Departmentation: Grouping activities based on the location of the company's
operations. This can lead to better adaptation to local markets but may result in a lack of
coordination.
5. Process Departmentation: Grouping activities based on the production process. This can
lead to efficiency in production but may result in a lack of focus on products or customers.
Considering ABC Company's need to make each product competitive and evaluate product
managers based on their market performance, Product Departmentation seems most
suitable. This would allow the company to focus on each product category (Trucks,
Automobiles, Vans) and allocate resources accordingly. Each product manager can then be
responsible for the performance of their specific product line, aligning with the company's
strategy.
Basic Elements of Organizing a Company Before Implementing Departmentation
Before implementing departmentation, a company needs to consider several basic elements to
ensure effective organization. These elements include:
Strategy: Align departmentation with the company's overall strategy and goals to ensure that
each department contributes to the organization's success.
Clarity of Purpose: Clearly define the purpose and objectives of each department to avoid
overlap or duplication of efforts.
Communication Channels: Establish clear communication channels between departments to
facilitate coordination and collaboration.
Authority and Responsibility: Clearly define the authority and responsibility of each
department to avoid conflicts and ensure accountability.
Resource Allocation: Allocate resources such as budget, personnel, and technology to each
department based on their specific needs and functions.
Coordination Mechanisms: Implement mechanisms for inter-departmental coordination to
ensure smooth workflow and synergy between different departments.
Flexibility: Design the departmentation structure to be flexible and adaptable to changes in
the business environment.
By considering these elements, a company can organize itself effectively before
implementing departmentation, leading to improved efficiency and performance.