The paper "Fredman Claim Concerning the Business Sole Aim " is a great example of management coursework. According to the Business Dictionary, management theory is defined as a collection of ideas which outlines general rules on how to manage a business organization. Thomas More (1478-1535) states that management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling and directing an organization’ s resources in order to achieve objectives of that policy, the main aim being to maximize shareholders’ wealth through maximization of profit. Many theories have been advanced by scholars from various fields to expound on the management theory.
These theories come up with various ways of managing organizations and some may conflict with each other. A critical review of them is important so as to get a grasp of the various perspectives of management theory. Fredrick Taylor (1856-1915) proposed that managers should do their work scientifically so as to determine one most appropriate way of doing it. He advocated for selection of workers based on their physical ability, training and development to improve performance and productivity, payment based on piece-rate system and functional foremanship where managers are supposed to plan, coordinate and direct the work while subordinates implement by doing the work activities.
He put more emphasis that all these should be done scientifically so as to achieve the best results. Taylor’ s work contributed much to the management theory since it formed the basis for the division of labour which by far increases productivity. Training and development of workers are relevant up to date. Many organizations train their employees in order to enhance their skills to handle complex tasks that might come their way.
The piece-rate system whereby payment is based on the output of the worker and not on the time spent acts as an incentive for workers to flex their muscles to earn an extra penny thus leading to high productivity. However, Taylor failed to understand that workers are not only motivated by monetary rewards. There are many other factors that motivate workers, for example, the relationship between the supervisor and the subordinate, which he fell short to explain. Besides, He treats human beings like machines whose value is measured by the level of output they produce thus failing the test of humanity.
Again, there cannot be one best way of doing something. The work environment constantly changes and so requiring innovation or creativity on part of the managers. Therefore, this theory is demonized by the human relations theorists. Alfred Marshall (2007) also vehemently criticizes Taylor’ s work. Though Taylor was criticized for his work, he was right on track according to the aims of business which is to make a profit for the organization. The piece-rate system ensured that there was high productivity which is then sold to customers to bring in revenue.
The one best way he advocated meant it minimized costs of production and so because profit is revenues fewer costs the profit is maximized thereby meeting the chief goal of the business. Henry Fayol (1841-1925) came up with the fourteen administrative principles of management. They include division of labour a copy of Taylor’ s functional foremanship, authority which involves granting formal positions in the organization; discipline which is the obeying rules of underlying the organization; unity of command where each worker should have a supervisor; unity of direction that is grouping of similar tasks under one department or manager; subordination of personal interests in order to follow the general interests of the organization; remuneration where rewards and miscellaneous benefits are applied fairly to the employees; centralization that demands that the organization’ s power and authority may be centralized or decentralized depending on the size and qualifications of managers; chain of command where authority should flow from top to bottom; order whose claim is that human and material resources should be coordinated; equity which calls for fairness; stability of tenure to reduce employee turnover rate; initiative whereby employees are encouraged to be creative, and spirit of cooperation where managers are expected to encourage teamwork among the members of the organization.
Pigou, A.C. (1920). The Economics of Welfare. London. Macmillan.
(1966) Scientific management and welfare labour. The Journal of Political Economy, 24(9): 833-54
Nelson, R.H. (1998) Rethinking Scientific Management. Discussion paper 99-07. Washington DC: Resources for the Future.
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The European Journal of the History of Economic Thought ISSN 0967-2567 print/ISSN 1469-5936 online @ 2007 Taylor and Francis. http://www.tandf.co.uk/journals DOI:10.1080/09672560601168405
(2003) a list of essays collected in bound volumes by Alfred Marshall:part2. In Marshall Studies Bulletin, vol VIII. Available online at: http://www.cce.unifi.it/dse/marshall/welcome.htm.
Clack, J.M. (1918). Economics and modern psychology: 11 Journal of Political Economy, 26(2): 136-66
David Bach, David Bruce Allen: Why Every CEO Needs to Know About Nonmarket Strategy (Spring, 2010)
Bhattacharya C.B, Sankar Sen, Kornchun: Using Corporate Social Responsibility to Win the War for Talents (Winter, 2008)