Classical And Modern Management Theories Commerce Essay

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Theories of the management of organisations have been developed and have evolved over the years: from simplistic theories to more scientific and behavioural theories. A more classical management theory would be likened to a machine. Where by organisations were departmentalised and workers were expected to behave and act in a predictable manor. Modern management theories tend to focus more so on the behaviours and efficiency of workers and the processes employed in the organisation.

Classical management theories are divided into two types, the classical scientific and the classical administrative. In regards to the classical scientific theory, this was born from to the scientific behaviourism of attempting to bring about increased productivity. During the time the classical scientific theory was predominantly used, theory practitioners would use almost machine like methods towards the structure and planning of the organization and labor. It was thought that this approach would help achieve goals of productivity and efficiency. The basic approaches and techniques of the classical scientific theory include dividing work between employees equally and creating standardized methods for a task.

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However, the classical administrative theory concerned its self with ways in which the management departments could be structured and organized to increase productivity and efficiency. Henri Fayol, who was a figure head in management theory, masterminded various theories of management geared towards productivity and efficiency, such as creating a consolidated and cooperative attitude and direction among managers, centralization, and discipline of management and organizations. His other management theories looked into building confidence in teams, such as establishing and encouraging team work, encouraging employees to use their own initiative, and building equality in the work place.

From these Classical and modern management theories different school of thought were developed focusing mainly on the motivation of the work force.

In 1943 Abraham Maslow proposed the theory of the Hierarchy of Needs. Maslows theory is based on the belief that within each individual there is a hierarchy of five basic needs.

He stated that these five needs are : -

Physiological needs- These are the basic needs of air, water, food, clothing and shelter.

Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc.

Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.

Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration).

Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic.

According to Maslow, each individual is motivated by needs that are not yet satisfied. That is to say that as each of an individual's needs are significantly satisfied, it energises and motivates the next need in the hierarchy to emerge. The lower-order needs are constituted by physiological and the safety needs. The higher-order needs are constituted by social, esteem, and self-actualization needs.

In 1960, Douglas McGregor formulated the X-Y Theory suggesting there are two fundamental approaches to the management of people at work. According to McGregor, the perception of managers as to the nature of individuals is based on various assumptions about the individual (Cole, 1996).

McGregor's X-Y Theory bracketed management styles in to two groups:

The X theory would label the management style authoritarian and managers employing this style would assume that employee disliked work and needed to be forced with threat of consequences or punishments to complete tasks.

The Y theory would label the management style more cooperative and nurturing. Theory y implies that managers employing this style encourage employees to take initiative and self-direction and create a work environment which provides opportunities to participate in decision making within in an organization and inspire teamwork.

In short you could say that McGregor's Theory X would be a more classical, military or autocratic style of management while McGregor's Theory Y would be a more modern, motivational and leader ship style of management

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If we compared McGregor's Hierarchy with Maslow's X-Y theory, we could state that Theory X pertains to the assumption that the employees main focus is on the physiological needs and the safety needs; while Theory Y is based on the assumption that employees are dominate by the social needs, esteem needs and the self-actualization needs.

Organizational management structures take many forms. A matrix management structure is an organizational structure in which people with similar skills are grouped together for project assignments (Carnall, (2007). For example: on a construction site a single trade may be in one department and report to the manager of there trade, but these same tradesmen may be assigned to various projects. This means they will also report to a different project manager or a contract manager while working on that project. Thus, each tradesman may have to work under several managers to get their job done.

In contrast a linear management structure would employ a more hierarchical style of management. Instructions would flow from the management team in a straight line down to the tradesmen who will complete the works.

Linear organization structures have many advantages and disadvantages.

The mains advantages are : -

A high degree of flexabilty, whereby people can be assigned to the project then reassigned to other works switching back and forth is easily achieved.

The work load is simpler to estimate and manage as the scope of work is usually restricted to its own field.

Lines of communication are short and well established

There is a quick reaction time to problems within the department

The main disadvantages are : -

There is no single point of responsibility as the project scope moves from one department to another.

No formal lines of communication on multi-disciplined projects

Department work could take priority over project work

Advantages and disadvantages of a matrix organization: -

Advantages: -

The project has a single point of responsibility - the project manager

The project can draw on the entire resources of the company

Good flow of information

Teams of experts are kept together and problem solving can draw on a much wider knowledge base

Good training ground for project manages working in multifunctional environments

Disadvantages: -

The structure is complex and more difficult to understand

More communication links required to keep the additional number of mangers informed

Dual responsibility and authority leads to confusion and conflict

Project integration between departments is more involved and complex

According to (Burke 2007) selecting the right organizational structure is a delicate balancing act dependant on the projects needs, the project team's needs, the stakeholder's needs and just as importantly the needs of the client. When the project requires input form a number of different departments the Matrix structure offers a real solution to the functional division of responsibility and authority However if the project is a large capital project likely to run for several years then setting up a more linear structure may be the most appropriate organization structure.