2. Literature Review
2.1. Conceptual Framework
2.2. Management Theories
2.2.1. The Scientific Management Theory
2.2.2. The Administrative Theory
2.2.3. Bureaucratic Theory
2.3. Organizational Performance
3. Empirical Review
3.1. The relationship between management theory and organizational performance
3.2. Research Methodology
3.3. Results, Analysis and Discussions
3.5. Summary of Findings
The study of classical management thoughts which are set of concepts that started in 1800s took their roots in the study of organizations. The word that is said most about the classical view of organization is “structure” (The structure of formal organization). An organization is defined as a formal association of individuals with a common purpose and with some stipulated objectives to attain under authority and leadership (Onwuchekwa, 1993). An organization is also defined as the structure of the relationships, powers, objectives, roles activities, communications and other factors that exits when people work together (IIe,1999).
The three streams of thought that made up the classical management theories were formed on a similar assumption and the practical effects of them were essentially the same (IIe, 1999). These theories were mostly concerned with increase in efficiency and production (lower costs of production and increase in profit). By this, they were interested in certain principles and practice that will ensure effective and efficient operation in any given organization for achieving a good relationship between the employers and employees that will ensure smooth achievement of the organization goals and objectives. However, in spite of the fact that these theories which are still in practice, are widely accepted, achievement of organizational goals of total efficiency in these organization is still a mirage.
In the late 19th century, management decisions were often arbitrary and workers often worked at an intentionally slow pace. There was little in the way of systematic management and workers and management were often in conflict. Since the formal study of management began, the study of management has progressed through several stages as scholars and practitioners working in different eras focused on what they believed to be important aspects of good management practice (Gozukara, & Simsek, 2016). Over time, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and disseminated.
In Nigeria, managers in both the private and public sector are daily committed and confronted with managerial decisions and issues on how to employ the best decision possible in order to overcome the most pressing of the challenges they are presently confronted with. Nweke and Zeb-Obipi (2020) submit that for firms to elicit commitment and effective performance from staff they should create/ implement job enrichment policies- assigning greater responsibilities to employees. They maintain that such activities would create bonding and motivate the employees to perform optimally towards the actualization of organizational goals as every employee loves to be enriched and appreciated at the work place. The application of classical management theories by managers does not seem to extract commitment leading to maximal productivity and growth in Nigerian indigenous firms. This curiosity has necessitated the need to examine how classical management theories influence organizational performance in Rivers State, Nigeria.
The following research questions have been posed in this study: i. Do the current low productivity and non-growth of Nigeria organisations arise as a result of the practice of scientific management theories? ii. Does the application of administrative theories influence productivity and slow pace of growth of Nigeria organizations? iii. Could the poor performance of some organisations in terms of low productivity and non-growth be as a result of the application of the bureaucratic theories in the management practice of the organizations? The main purpose of this study was to find out the influence of classical management theories on current management practice in Nigeria organizations.
2. Literature Review
There are several dimensions of management theories that can help in the efficient performance of organisations. This study is interested in conceptualizing, classifying and categorizing the classical management theories into; namely- scientific management theory, administrative theory and bureaucratic theory as the umbrella for the conceptual framework of the study as depicted in Figure 1:
A theory is a coherent group of assumptions put forth to explain the relationship between two or more observable facts which can be used to provide a sound basis for predicting future events (Stoner el al, 1992). It is a systematic grouping of interrelating ideas. Whose tasks are to tie together and to give a framework to significant knowledge (Koontz el al, 2005). From the foregoing, one can say that theory can be defined as a structure of fundamental concepts and ideas around which knowledge in a field are organized, it is also a proposition, idea or assumption put forth by an individual or group of individuals on how a particular management problem can be solved. A confirmed theory can therefore become a principle (IIe, 2003). Therefore, studying theories of management becomes important due to the fact that, it shapes our views of organizations, guides management decisions and provides a source of ideas as it gives chance to take a different view of every situation, The major assumption under the classical theory of organization and management is that human beings are motivated to perform through financial inducement. This view is still relevant in today’s management practice. Development of management theories before the Industrial Revolution The systematic study of management as a separate branch of knowledge started of recent, but the practice is as old as human society, (Ile, 2003), states that- “Management is as old as human organization”.
It is important to note that man has been making decision about what to do and how to do it in the past. Before the advent of industrial revolution in Europe about 1750 -1850, the human society engaged in crafts and took care of their micro Organizational units, called families by producing crafts of one unit or the other, therefore the system of production was based on handicraft system. This system entailed staying at homes and producing one thing or the other, hunting, gathering and farming. The output of these endeavors were used for the family sustenance and any surpluses exchanged with neighbors for other items (this is called Trade by barter). During that time, man was able to manage his family (Sridhar, 2017). This is to say, that, management started from the olden days. An analysis of this period shows that as life continued, management and organizing is quite old. Therefore, it could be traced that several attempts were made over the years, to explain theories and principles of organization and management as we have them today. Development of management theories during and after the Industrial Revolution The works of Fredrick Winslow Taylor father of Scientific Management Theory. Henri Fayol father of Administrative Theory and Max Weber the proponent of Bureaucracy stands out clearly in this regard. From the writing of these authorities called the classical Management Thoughts, other theories and principles of Management were developed (Sridhar, 2017).
2.2.1. The Scientific Management Theory
In 1911, Taylor published his famous work titled “Principles of Scientific Management “. In this work, he advocated that Managers should gather together all the traditional knowledge possessed by work men and then classify and reduce them to laws, rules and formulae. They should then develop a “science”, for each element of man’s work to replace old rule of thumb methods and scientifically select and train workmen in the new methods. He also stated that managers should take over certain tasks. Such as planning and scheduling of work, which were previously left to the workmen to cope with as well as they could? (Daft, 2005).
Koontz el al (2005) states that the fundamental principles, that Taylor saw underlying the scientific approach to management are as follows: (a) Replacing rules of thumb with science (organized knowledge). (b) Obtaining harmony, rather than discord in group actions. (c) Achieving co-operation of human beings, rather than chaotic individuals. (d) Working for maximum output, rather than restricted output. (e) Developing all workers to the fullest extent possible for their own and their company’s interests, Stoner et al (1995), also contented that Taylor rested his philosophy on four basic principles: 1. The development of true scientific management, so that the best method for performing each task could be determined. 2. The scientific selection of workers, so that each worker would be given responsibility for the task for which he was best suited. 3. The scientific education and development of workers. 4. Intimate, friendly co- operation between management and labour.
The idea of Taylorism is found to be consistent with the concerns of Adam Smith that emphasized division of labour bringing specialization, which leads to enhanced productivity (Khurana, 2009; Robbins and Coulter, 2012). In doing so the humans are treated as machines while ignoring the demoralizing and inhuman effects of tasks on the workers (Ghuman and Aswathapa, 2010). In addition to that, Taylor also commenced another study “science of shovelling” for determining the optimal weight to be lifted by the workers, thus, the optimal shovels were introduced to increase productivity while reward as increase in the pay was motivator (Ghuman and Aswathapa, 2010). The major notion of the motivation for employees under scientific management were seen as money (Khurana, 2009). According to Furnham (2012), “money is an effective, powerful and simple motivator but it is not always motivator for everyone because at times it has power to demotivate” (p. 152). Additionally, Katzenbach and Khan (2010) argued that majority of the successful entrepreneurs agreed that major motivation is to be built upon something lasting rather than on the notion of making huge money. Furthermore, “Certainly great professional leaders like Marvin Bower, who built McKinsey & Co., John Whitehead, the former Goldman Sachs senior partner, and Supreme Court Justice John Paul Stevens explained that that their motivation came from the work itself, and that the lasting respect of others was far greater than money as a measure of accomplishment. And very few great artists are in it for the money. Money is a by-product, and usually a secondary one at that, for such achievers” (cited from Katzenbach and Khan, 2010).
Nevertheless, for lower level jobs, still money is often used as basic needs (key motivator), reflecting that the scientific management is still applicable in the modern-day management. During the same era, Frank and Lillian presented “applied motion study” focusing on reduction in the number of motions in a task in order to increase efficiency to have profit and satisfaction of a worker (Caramerla, 2018). In the modern day, project management tools and techniques are used by organisations to ensure there is elimination of low productivity while attainment of most efficient results indicating the use of ‘applied motion’ in operations (Caramela, 2018). Program and review technique (PERT) charts are another modern-day managerial tool offering visual methods to administer time and resources of project (Sullivan, 2017).
Nowadays, same scientific management approach is used with modifications as of now multiple websites offer online solutions through interactive sessions, free tutorials and blogs discussion, which are all based on Henry Gantt management theory (Sullivan, 2017). Harrignton Emerson stated twelve principles of efficiency that enables manager in defining objectives, developing scientific methods for evaluation, forming standardized procedures and rewarding employees (Sridhar, 2017). The major drawback of this school of thought is that it treats and views worker from only the lens of economics whereas workers’ behaviours are not always directed by financial needs as there are other needs such as social, security and esteem needs (Sridhar, 2017). In addition to that, there multiple methods to commence task rather than relying on “one best way” because the situation differs and even two individuals could carry out similar job differently (Sridhar, 2017).
2.2.2. The Administrative Theory
Under same classical school of management, the contemporary school of thought to scientific management are the ‘administrative management’ and ‘bureaucratic organisations’ (Robbins and Coulter, 2012; Sridhar, 2017). This school of thought is based on traditional or administrative principles of management while prominent exponents include Henri Fayol, Chester Barnard and Colnel Urwick (Sridhar, 2017). Henri Fayol is considered as the father of modern management for his contribution in the administrative management field primarily focusing on the operational approach through 14 principles of management. “Fayol introduced unified concept by focusing on managerial levels and the organisation as a whole” (Sridhar, 2017). All business activities could be split into six groups namely; administrative, security, accounting, financial, commercial and technical while focused on the “managerial activities of manager including, planning, organizing, directing, coordinating and controlling” (Robbins and Coulter, 2012). Key principles include “division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interest to general interest, remuneration, centralization, scalar chain, order, equity stability of tenure of personnel, initiative and esprit de corps” (Robbins and Coulter, 2012). Fayol's heavily emphasized on rationality, logic and consistency (Sridhar, 2017). Interestingly, “Taylor worked from the bottom of the hierarchy upward, whereas Fayol worked from the apex downwards, with ‘management centred’ philosophy”, which is the difference between two classical schools of thoughts (Sridhar, 2017). On the other hand, Chester Barnard argued that effective communication is essential for cooperation and there should be a balance between rewards and contributions among workers (Robbins and Coulter, 2012). Colonel Urwick assembled the principles of Taylor, Fayol and other management scholars and suggested that management is a dynamic process to perform organisational activities (Sridhar, 2017). This school of thought also has limitations as many of the principles have dilemmas and are contradictory. For instance, limited span of control and division of labour contradicts number of organisational levels being smaller or principle of specialization is contradicted by unity of command (Sridhar, 2017). In addition to that, when seeking specialization, it is not possible to follow simultaneously all modes. There is lack of empirical testing of these principles at organisational setting. Moreover, all principles being valid under all situations is not practically applicable. Lastly, mechanistic organisational structure develops due to the outcome of these principles, that are insensitive to psychological and social needs of the employees (Sridhar, 2017). Nevertheless, Brown (2014) argued that Henri Fayol's 14 principles of management promoted efficiency through division of work, which are still recognised idea in the present day. Additionally, “Fayol acknowledged employees’ needs through adequate remuneration, stability of tenure, equity, team spirit and initiative are all essential albeit coming from top down direction” (Brown, 2014). Hence, Fayol has not ignored the employee perspective in the organisational context but yet the major criticism Fayol attracted is that it is flatter in present era (Caramela, 2018). However, although, it appears less applicable to some extent in modern day work environments. Moreover, even in modern era, Fayol offers a good start for the managers and organisation to learn about approaches, structures and managerial functions (such as planning, forecasting, organising, directing, coordinating and monitoring) (Brown, 2014). Having said that, these were further taken into consideration by theorists from human relation school.
2.2.3. Bureaucratic Theory
Max Weber (1864 - 1920), a German Sociologist in his work, developed a theory of bureaucratic management that stressed the need for strictly defined hierarchy, governed by clearly defined regulations and lines of authority. According to stoner et al (1995), Weber considered the ideal organization to be a bureaucratic whose activities and objectives were rationally thought out and whose division of labour were explicitly spelt out. It is also in the opinion of Weber that, competence and evaluation of performance should be based on merit. His conclusion was that bureaucratic leadership was in indispensable for the mass administration required in modem society (Albers, 1974).
The model presented by Weber recognized the functional properties of a Bureaucratic system but failed to see the importance of informal organizations. Weber’s view for bureaucratic organization is necessary in modem business practice as a prerequisite for efficiency. It has a lot in common with scientific management school which laid emphasis on rigid application of scientific principles to work.
With the expansion of organisations, the operations become further complex giving “authoritarian-paternalistic pattern” way that enhances functional specialization within the distinctive layers of management to have smooth operations (Sridhar, 2017). This led to bureaucratic approach towards organisational structure and Max Webber proposed a theory of bureaucracy for organisational efficiency based of organisational systems functioning on set of rules, policies and hierarchy of authority (Caramela, 2018). Biggest fain of this approach is that it excludes the conflict or overlapping duties, which offers clear direction so that organisational operations gain efficiency in productivity. The approach offers consistency in patterns to ensure higher precision in tasks to avoid low productivity of resources (Sridhar, 2017). This is effectively the theme of modern-day organisations too to have structural and patronized functions in order to avoid wastage of resources and enhance operational efficiency (Brown, 2014). However, the major focus of this theory remains on positions rather than individuals (Sridhar, 2017). Organisations would even continue its functionality even if workers quit, which is visible in modern day to some extent that organisation stays while employees come and go (Brown, 2014). Excessive red tapism and paperwork often creates unpleasant experience as well as delay smooth operations (Sridhar, 2017). Higher emphasis of policies and procedures develop the cautious approach and as a result employee avoid risk and show less creativity, initiative and growth (Caramela, 2018). In addition to that, humans are not machine and therefore would differ in their approach and performances while this school of thought expects behavioural conformity at the expense of performance. The classical school of thoughts/traditionalists considered theories of management could be deduced by means of observation and analysing managers do while empirical findings have distilled in reaching for specific principles (Sridhar, 2017). Furthermore, this school is criticized for executing practices of past, which include outmoded and mediocrity. Despite that, it is the leading school of thought and largely prevalent in managerial practices (Caramela, 2018).
The focuses of their views were about the nature of man and his organization. The theories advocate for formal organization that takes advantage of specialization and hierarchical functional criteria to increase efficiency in achievement of organization objectives. The differences were in the following areas: 1. As the Scientific management focused its unit of analysis on the physical activities of work, the Administrative theory focused on practical men in action and are called practicing Managers, their major orientation was the prescription of principles and other concepts of achieving. Formal organization while Bureaucracy took a comparatively detached and scholarly view that described them as normative model of organizations. 2. While Scientific management was concerned with the relationship of a worker to his job in organization, with the objective of improving performance of routine production task, the Administrative Theorists were telling how to accomplish an organization and the Bureaucratic theory said what an organization ought to be. 3. The Scientific management focused on production, Administrative theories laid emphasis on management as a component of the organization and Bureaucracy focused on the organization as a whole. 4. Scientific management can be thought of as a bottom – up theory, while the Administrative and Bureaucratic theories in a comparative sense are top-down theories. 5. The prescriptions of Administrative and Bureaucratic theories were distilled from experience, while the prescriptions of Scientific management were derived from specific studies in each case ((Sridhar, 2017).
2.3. Organizational Performance
The ultimate goal of a business organization is higher financial performance or maximization of wealth for stakeholders (Joseph & Dai, 2009). Nonetheless, attaining the organization’s goals depends upon the extent to which its organizational performance is reached (Abor & Biekpe, 2007). Organizational performance is generally indicated by effectiveness, efficiency, satisfaction of employees and customers, innovation, quality of products or services, and ability to maintain a unique human pool.
- Quote paper
- Dr. Newman Enyioko (Author), 2021, Classical management theories and organisational performance in Rivers State, Nigeria. An analysis, Munich, GRIN Verlag, https://www.grin.com/document/1032729