The Major Organizational Theories Commerce Essay

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In this outcome, for the task of P4 major organisational theories are discussed along with their silent feature in accordance with the course of content. In this task the main focus was management, managerial roles and managerial authorities. In the task for P5, we did comparative analysis between our organisations with the organisation assigned to another group. We are supposed to submit soft and hard copy and present our learning in the class. Further, in the task of M2 we had to apply the concept of organisational theories and we applied our knowledge over the firm understudy. In D1, we gave recommendations about the organisation using the managerial approach. We had to consider a situation.




Scientific theory was presented by Frederick Taylor (1911). He argued that management should be based on well-recognized, clearly defined and fixed principles. The responsibility of management was select, train and help workers or employees in doing their job. The main objective of this approach was to break job into its small and simplest parts or motions.

A small summary about scientific approach in Taylors own words is as follows:

The man who is fit to work at any particular trade is unable to understand the science of that trade without the kindly help and co-operation of men of a totally different type of education.

It is one of the principle of scientific management to ask men to do things in the right way ,to learn something new, to change their ways in accordance with the science and in return to receive an increase of from 30% to 100% in pay.


It was noticed that if an employee performing only one motion with in a job was profoundly unsatisfying to workers. Operations are needed to re-integrate into whole jobs.

It was also under observation that workers in an organization should take more responsibility and decision making related to their work or job.


It is grouped set of tasks allocated to a given worker.



Henri Fayol (1841-1925) was a French industrialist presented the idea of universality of management principles. It means that what type of organization it is or whatever structure it has, the principles of management should be same.

He put forward some influential ideas:

Division of work or specialisation:

Everyone should be assigned for a job in which one is expert or specialised and he himself should also stick to the job in which he is best.

Matched authority and responsibility:

Managers should always be held responsible for the exercising of authority. Managers should be given the right or authority on the task assigned to them. If something occurs related to that task, managers will be responsible and they have the authority how to deal with it.

Scalar chain of command:

This terminology is used to describe a formal organization structure with hierarchy from higher to lower rank. The boss gives orders to the lowers. The authority passes down the chain. If superior gives orders to sub ordinate, sub ordinate should respond back to the superior.

Unity of command:

Sub ordinates should respond back to the boss from whom they got orders because any overlap in scalar chain can cause uncertainty and wasted effort. Similarly in an organisation the sub units should not be pulling in different directions.

Subordinated of individual interest:

The interest of organisation should not prevail the general interest of organisation.

Later on, Max Weber in 1947 developed the idea of bureaucracy which is almost similar to Fayol's related o hierarchy but in provides the efficient way of administration. He provided three points about leader ship i.e charismatic leadership, traditional leadership, bureaucracy.


Different challenges begin in the business environment of the late 20th century.

Flexibility and innovation began to challenge stability.

Diversity began to challenge universal.

One-size-fits-all principle of management

Multi-skilled project teams were seems to be more responsive to consumer demand than specialised

One-man-one-boss structure.

Many organisations continued to be controlled on rational lines of classical theory. Classical theory allowed managers to step back and analyse their experiences to produce new principles and techniques.


The 'human relation' approach emphasised the importance of human attitudes, values and relationships for the efficient and effective functioning of work organisation.


Elton Mayo in 1975 said that first class technical training was well sufficient in modern and mechanical age. No other age in history was such competent as we are and we combine it with social incompetence.

In early time people demanded for companionship and belonging and look for satisfaction in social relationships they had formed in work.


Mayo idea was followed up by few psychologists who noticed that here is more demands of people other than physical and social needs and attentions were directly focused on needs for growth, challenge, responsibility and self-fulfilment. They agreed that only these things can positively employees.

This phase was known as neo-human relations.


Human relation approach informs about the human factor at work and the need to offer job to employees. It also made managers to satisfy and motivate employee by offering guidelines to obtain benefits of improved productivity.




Allied bank limited was the first bank which is recognized and starts its banking activities in Pakistan as before independence. This bank was established in Lahore with a name of Australasia bank in year 1942. Later on, then after the independence it becomes known as Allied Bank Limited in year 1974. In August, 2004 due to some capital restrictions the ownership of Allied Bank was transferred to the Consortium Comprising Ibrahim Group. Now this bank has a priceless experience of previous 70 years. With a lot of experience and customer satisfaction about the bank this bank has made its foundations very strong in Pakistan. This bank has a very large network in Pakistan with more than 830 online branches all over Pakistan so that is why a vast variety of technology based products and services are offered to their customers at Allied Bank Ltd of Pakistan.


HBL started banking activities in Pakistan in 1947 and later on moved its head office to Karachi. Habib Bank Ltd first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to honour the bank's 25th Anniversary. On 29 December, 2003 Pakistan's Privatization Commission announced that the Government of Pakistan had officially granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion. On 26 February, 2004, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees.


Few of Board of directors of Allied Bank are as follows:

Muhammad Naeem Mukhtar:

He is chairman of Allied bank since 2004. He did his studies in UK and he has 25 years experience in field finance and industry. He is also CEO of Ibrahim Fibers Ltd, director Pakistan business counsel, member of board of governors of national management foundation and parent body of LUMBS University.

Sheikh Mukhtar Ahmed:

He migrated from India after independence. He was known as entrepreneur in business. He has experience of 50 years in managing various industrial and financial companies.

Muhammad Waseem Mukhtar:

He did his degree in total quality management (TQM) from UK. He played vital role in technological up gradation to enhance service quality across Allied Bank.

Abdul Aziz Khan:

He has great experience of 48 years in local and international business. His international banking experience is in diverse financial markets. He is in board of directors of Allied bank since 2004.


Few of board of directors of Habib Bank are as follows:

Sultan Ali Allana:

Sultan Ali Allana is the Chairman of Habib Bank Ltd (HBL), since the bank was privatized in February, 2004. Before joining HBL, Mr. Allana was the Chief Operating Officer of NIB Bank and a Director and founder member of Global Securities Ltd. Mr. Allana has 27 years of banking experience.

Numan K.Dar:

He was appointed as president and chief executive on September 29, 2012. He joined bank in March 2003. He is a Director of Habib Allied International Bank plc, UK, Director of Habib Finance International Limited, Hong Kong, Director of Diamond Trust Bank, Kenya and Chairman of Habibsons Bank Limited, UK.

Moez Jamal:

He did his BA (HONS) from Manchester university, UK and he holds MBAs finance degree from New York University. He has banking experience of 32 years. He was appointed as board of directors of HBL in 2009. He began his career in 1980 at Lloyds Bank International in New York.

Sajid Zahid:

He is a practicing lawyer with over 37 years of experience, advising major domestic and foreign companies, banks and financial institutions on civil and commercial laws, national and cross-border transactions. He also acted as Counsel in domestic and international Arbitrations involving construction and joint ventures and energy laws before various fori including the London Court of International Arbitration and the International Chamber of Commerce, and in major litigations before the Courts of Pakistan. He is Director of HBL since 2000.


Allied bank limited offers the following services:


With branches across Pakistan and one of the largest banking networks in the country, you'll always have quick and convenient access to your ABL Accounts and our wide array of banking services. Plus there is ATM is available in every branch of ABL.


ABL have extended their banking hours for their customers. If any customers are not willing to come at bank timings because of some issues, that's why ABL extended their office timings for their customers to gain their loyalty.


This service is for those customers who are busy or out of reach to any ABL branch so they can access to their accounts or can have ABL services through internet.


Customer can pay their utility bill in normal working days during normal banking. This service is available in all branches of allied bank.


ABL have a toll free number (0800-22522). Customer can dial this number and can have banking freedom without any inconvenience.


Services provided by HBL are as follows:


It is for those customers who have cars by loan, having credit cards by HBL, debit cards, home loans, personal loans or deposit accounts etc.HBL have their complete record or data as an individual.


This includes business banking, corporate banking, SME banking and investment banking. This type of banking is all related to the business. Every bank has these services but it depends on the customer that which bank package is good for their business.


The most important option that HBL have is ISLAMIC banking because in our country a lot of customers don't agree with interest. This is the reason that HBL have more customers as compared to other banks.



The firm we have selected is ALLIED BANK ltd. ABL have scientific management approach. Scientific management was presented by Frederick Taylor and he argues that management of an organisation should be based on well-recognised, clearly defined and fixed principles depending on more or less hazy ideas.

This is the same which ABL do. Allied bank limited have their fixed, clearly defined and well-recognised principles for all kind of customers. Their basic rule or principles are same.

The practical application of scientific approach was to break down every job into smaller components and simple components. In this approach a specialised job is given to a separate individual. After selecting all the workers they are trained to do their jobs in a efficient manner and avoid or ignore the unnecessary physical work. This is also the principle of scientific management to learn new ideas, to learn something new and to change their ways in accordance with the science.

This entire entire concept is followed by ALLIED bank limited. They have divided their jobs. In all the departments all the employees have specified jobs. They try to do the efficient banking by utilizing all the resources correctly. Their principles, ideas, concepts and goals are fixed. They follow a centralized culture. All the decision making authority lies at higher level. The lower management staff doesn't have any right to interfere in the decision making. Whatever is decided at higher level they have to follow it. The newly selected employees are trained in a way that they adopt their structure. If any employee is selected he comes to the bank and does his job but he is helped by other workers too and it is duty of other workers to train the new employees and provide and make a good environment throughout the organisation.



As ALLIED bank have scientific management approach so they should alternate poor working method and inefficient method because both of these factors increase productivity and reduce physical strain. There are also chances that if any worker do a specific job for a long time so he also might get discouraged and unsatisfied. There should be some other working opportunities inside that organisation so they can perform other jobs which are also good for the sake of organisation. Workers should be allowed to take some responsibility apart from their jobs.

Second recommendation for ALLIED bank is that they should think about starting ISLAMIC banking for those customers who are not in the favour of interest. ALLIED bank can lose a lot of customers because if they don't have the ISLAMIC banking option their customers will definitely approach to other banks, may be HBL. Already said by one of the branch manager of ALLIED bank that sometimes customers reject us because we don't have ISLAMIC banking,

A job is a grouped set of tasks allocated to a given worker. It has been noticed that because of scientific management the worker or employee become stick to a specific job. His work become more and more narrowly specialised until he has some special appreciation.

There are some drawbacks of scientific approach which automatically become the issues of organisation under study. Apart from all these problems ALLIED bank is one of the leading banks in Pakistan with a lot of branches all over Pakistan and great services and products provided by them. Employees are happy with them because they are handsomely paid in their specified jobs along with other facilities.