Principles of Management - Example

Management Academic Essay Name Name of Institution Management Academic Essay Modern businesses are complex organisations that exist to satisfy the needs and wants of consumers. The complexity of the businesses comes from the fact that they have to develop ways to produce final goods and services that offer value to consumers. Additionally, businesses have to produce these goods and services while relying on limited resources. The field of management exists to solve the challenge of businesses having access to limited resources. Over the years, management practitioners have developed theories that seek to allow managers to deploy resources in ways that allow organisations to realise their objectives. However, these theories have been advanced with the assumption that firms should apply them universally. It is acceptable that the success of an organisation will be determined by the management approach adopted by those in leadership positions. This paper examines the classical, humanist, quantitative, and modern approaches to management. A critique of each approach to management is then provided to inform the decision on whether the approach is suitable for the realities of modern management. The major argument is that modern management should be situational in nature and not reliant on ‘one best approach.’ The field of management has existed for as long as individuals have formed organisations to achieve stated goals. According to Daft (2009, management as a practice existed as early as 3000 B.C., but the prescribed examination of management approaches began in the 19th and 20th centuries. These early approaches are defined as the classical approaches, which have three subsections namely bureaucratic organisations, scientific management, and administrative management (Daft 2009). First, Max Weber’s Bureaucratic approach focused on the rational and impersonal management of firms where positions were clearly defined to promote business continuity and to avoid reliance on individuals. Other characteristics of this management approach included promotions based on merit, strictly defined rules and procedures, and clear division of labour (Daft 2009). Although the bureaucratic approach was developed a long time ago, it is still used in modern business. For example, proponents of the approach argue that it is a driver of economic growth due to factors like long and predictable careers, and meritocratic recruitment (Evans & Rauch 1999). However, it is the subject of criticism that limits its application to modern management. Examples of the limitations of bureaucratic organisations include an overreliance on rules, lack of initiative and innovation from employees, and rigidity (Reddy & Tripathi 2005). Additionally, there is the issue of displacement of organisational goals where managers might put considerable effort in maintaining the organisation instead of focusing on its initial goals (Reddy & Tripathi 2005). These criticisms imply that the bureaucratic approach might not provide solutions for the situations that modern managers will face. Fredrick Taylor’s Scientific Management approach is another management theory that falls under the classical approaches. This approach emphasized the use of scientific study to increase the productivity and efficiency of labour (Daft 2009). This increased efficiency would be achieved through the use of science to come up with standard procedures, hire based on abilities, train workers, and issue compensation on the basis of performance (Daft 2009). As in the case of the bureaucratic approach, the scientific approach had inherent weaknesses that limit is applicability to modern management. For example, the model did not consider the needs of workers and the considerable differences between them. Additionally, managers who subscribe to this theory assume that employees lack the skills and knowledge to come up with new ideas. An examination of these weaknesses shows that the scientific approach would be set for failure in the Australian business environment. This is because of the amplified needs of workers, high levels of diversity in the workplace, quality education systems, and easy access to the internet which is a valuable source of information. The third management theory under the classical approaches is the administrative approach advanced by Fayol and Follett. The approach concentrated on the firm as a whole with its major principles including a formal organisation, division of labour, unity of direction and command, and centralisation (Wren, Bedeian, & Breeze 2002). A critical evaluation of the administrative approach shows that it paid more attention to the needs of the workforce when compared to the bureaucratic and scientific management approaches. This fact enhances the applicability of administrative principles to management in the modern world. Despite this fact, complete reliance on the administrative approach will have the effect of limiting an organisation’s ability to achieve its goals and objectives. For example, the administrative approach advocates for a formal, centralised organisation, a characteristic that will promote conformity (Wren, Bedeian, & Breeze 2002). In this case, conformity and reliance on a strict hierarchy is a dangerous trait as it impinges on an organisation’s ability to respond to today’s turbulent business environment. In summary, the administrative approach retains a bias towards management, a feature that can limit motivation in the workplace. This is a critical factor since there is a correlation between motivation and a firm’s overall performance (Cerasoli, Nicklin, & Ford 2014). These limitations support the assertion that the administrative approach cannot be the one best way to manage an organisation. As stated, the classical approaches represent the earliest attempts by management practitioners to study and solve the challenges facing the management of resources to realise organisational objectives. The inherent weaknesses in these approaches led to the introduction of the Humanist/Human Resource approaches. These include the Hawthorne studies, Theory X and Y, Maslow’ theory. According to Daft (2009), the Hawthorne studies were of critical importance to the field of management as they introduced the idea that human relations played a vital role in facilitating improved productivity. The studies attempted to measure the impact of improved physical conditions on productivity, but the conclusion was that management’s treatment of employees had a greater impact on productivity (Daft 2009). This characteristic of the human relations approach means that it can be applied to today’s business environment. However, the use of the approach as the singular method to manage an organisation would be wrong due to the flawed methodologies and conclusions of the Hawthorne studies (Daft 2009). As such, the best approach to management should take the ideas proposed in this humanist approach and combine them with other management theories that are derived from better research designs. Maslow’s theory is the second approach that falls under the human resource approaches. As in the case of the Hawthorne studies, the focus of Maslow’s theory is on the needs of the workers as opposed to labour productivity or organisational efficiency. According to Nieuwenhuizen et al. (2008), Maslow’s theory posits that individuals get motivated by various needs that can be ranked in a hierarchical order. The managerial implication of the theory is that a manager would have higher chances of meeting organisational goals if he/she provides employees with their different needs starting from the basic to the self-actualisation needs (Daft 2009). While Maslow’s theory is an improvement on the classical perspectives and the Hawthorne studies, the theory cannot be relied upon as the sole method of managing a modern organisation. A case in point will be the need to satisfy the need for belonging. Advances in technology and the emergence of social media means that employees live in an interconnected world. As such it would be unrealistic for a modern manager to spend time and effort catering to this need. Additionally, a major assumption in the theory is that all individuals have the goal of attaining self-actualisation. However, factors like culture might mean that the model is not applicable outside Western cultures (Raymond et al. 2003). Therefore, managers should not embrace Maslow’s theory as the ‘best approach’ to management, especially in an increasingly globalised world. McGregor’s Theory X and Y also falls under the human resource approaches to management. According to Daft (2009), McGregor’s Theory X was designed to illustrate the assumptions held by the classical approach. These assumptions were that employees disliked work, needed to be intimidated to work, and avoided responsibility (Bobic & Davis 2003). Theory Y was McGregor’s proposal on the assumptions that managers should take to solve the problems facing them and achieve organisational goals. These assumptions were that employees have the natural desire to work, have self-control, are creative and imaginative, and that they can take responsibility. According to Bobic & Davis (2003), this approach to management was extremely beneficial at the time of its introduction, but recent changes limit its applicability to modern management. For example, employee turnover is higher thereby challenging the Theory Y assumption that workers will remain committed to an organisation. Corporations have also adopted policies that have reduced job security and satisfaction (Bobic & Davis 2003). It is clear that Theory X and Y is not applicable to modern management because the assumptions cannot apply to an extremely dynamic workforce and business environment. The next step in the evolution of management theories was the shift from humanist theories to quantitative theories. These management approaches emphasised the use of statistics, mathematics, simulations, and information models to arrive at decisions (Daft 2009). The subfields under the quantitative approach include management science, operations management, and management information systems perspectives. As stated, the common thread in these approaches is the use of quantitative techniques to generate information that will assist managers in making day to day decisions. According to Griffin (2008, 17), the quantitative approaches have provided invaluable benefits to managers especially in the managerial functions of planning and control. Nevertheless, the approaches have several limitations that would prevent them from being effective in modern management. First, the focus on data and statistics ignores the input of experienced employees who should have a say in management. The other limitations of the quantitative approaches are that not all problems can be quantified and that the approach relies on the creation of assumptions that might not be realistic (Griffin 2008). Managers also need to spend considerable time to understand how to use the quantitative techniques, a factor that can limit their ability to develop other skills. The System Theory, Total Quality Management, and the Contingency view are three of the most recent theories on management practice. These recent perspectives are extensions of the humanist views. For example, total quality management is an approach the seeks to assure the delivery of quality products and services to customers. This is achieved through four critical elements which are benchmarking, continuous improvement, a focus on the customer, and employee involvement (Daft 2009). An examination of these objectives indicates that TQM is an approach that seeks to optimise existing processes in an organisation. However, the nature of the modern business environment is that there are rapid changes that require firms to embrace radical innovations to remain relevant. Similarly, systems theory can be considered as unclear meaning that its suitability for modern management is questionable. The underlying trend in the classical, humanist, quantitative, and the modern theories of management is that each theory was developed as the universal and best way to enhance organisational performance. However, a critical examination of the theories shows that each has significant weaknesses that would limit its application to the modern management. As such, the argument that modern management should be situational and not reliant on ‘one best approach’ is valid. One of the factors in the modern management environment that supports the need for a situational approach is globalisation. As stated, a major criticism of Maslow’s theory is that it does not apply to all cultures (Dye, Mills, & Weatherbee, 2005). This weakness would be significant if a manager in a multinational firm were to use the Hierarchy of needs as the basis for managing and motivating employees. In contrast, the use of a situational approach would allow the manager to notice that a diverse workforce might require different management approaches. This essay has examined the classical, humanist, quantitative, and modern management theories to determine whether there is ‘one best approach’ to management. The essay has noted that each of the management approaches evolved as a result of changes in the business environment that reduced the applicability of previous theory. Additionally, the essay has also found significant weaknesses in each of the management approaches. For example, the strict rules and impersonal nature of the bureaucratic approach inhibits innovation and initiative (Reddy & Tripathi 2005). Under the humanist approaches, Maslow’s theory on needs suffers from an inability to account for the modern workforce that combines cultures from all areas of the world (Dye, Mills, & Weatherbee 2005). Similarly, the reliance on statistical models and data in the quantitative models prevents managers from obtaining valuable input from experienced workers. The essay has also noted the criticism of modern approaches like Total Quality Management. Based on the arguments given in this essay, I fully agree with the statement that modern management should be situational and not reliant on the ‘one best way’ approach. Management practitioners should take a situational approach that examines the external and internal business environment before making decisions. However, it is critical to note that the selection of a situational approach does not mean that the classical, humanist, quantitative, and modern approaches should be ignored by modern managers. Rather, a manager should select features of these schools of thought that are likely to be successful in today’s dynamic business environment. The evolution of managerial theories, therefore, provides a valuable foundation for management practitioners. This foundation should be combined with work experience to result in the use of a situational approach to management that achieves organisational goals. References Bobic, MP & Davis, WE 2003, ‘A kind word for Theory X: Or why so many newfangled management techniques quickly fail’, Journal of Public Administration Research and Theory, Vol. 13 no. 3, pp.239-264. Cerasoli, CP, Nicklin, JM & Ford, MT 2014, ‘Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis’, Psychological Bulletin, Vol. 140, no. 4, pp.980. Daft, RL 2009, Management, 9th Edition, South-Western Cengage Learning. Dye, K, Mills, AJ & Weatherbee, T 2005, ‘Maslow: man interrupted: reading management theory in context’, Management Decision, Vol. 43, no. 10, pp.1375-1395. Evans, P & Rauch, JE 1999, ‘Bureaucracy and growth: A cross-national analysis of the effects of" Weberian" state structures on economic growth’, American Sociological review, Vol. 64, no. 5, pp.748-765. Griffin, R 2008, Fundamentals of Management, Cengage Learning. Nieuwenhuizen, C, Badenhorst-Weiss, H, Rossouw, D, Brevis, T & Cant, M 2008, ‘Business management: A contemporary approach’, Juta and Company Ltd. Raymond, MA, Mittelstaedt, JD & Hopkins, CD 2003, ‘When is a hierarchy not a hierarchy? Factors associated with different perceptions of needs, with implications for standardization–adaptation decisions in Korea’, Journal of Marketing Theory and Practice, Vol. 11, no. 4, pp.12-25. Reddy, PN & Tripathi, PC 2005, Principles of Management 3/E, Tata McGraw-Hill Education. Wren, DA, Bedeian, AG & Breeze, JD 2002, ‘The foundations of Henri Fayol's administrative theory’, Management Decision, Vol. 40, no. 9, pp.906-918. Read More