Theories of Management Theories of Management

Dr. Fred Mugambi MwirigiDr. Fred Mugambi Mwirigi

JKUATJKUAT

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Introduction Introduction

The following broad theories and The following broad theories and approaches are discussed :approaches are discussed :

The Classical approachThe Classical approach

Human Resource ApproachHuman Resource Approach

Modern ApproachModern Approach

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THE CLASSICAL APPROACH THE CLASSICAL APPROACH

The Classical perspective to management The Classical perspective to management emerged during the nineteenth century emerged during the nineteenth century and continued into the twentieth century.and continued into the twentieth century.

Due to the new challenges that Due to the new challenges that organizations faced, management sought organizations faced, management sought methods of efficiency which included a methods of efficiency which included a rational and scientific approach.rational and scientific approach.

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Classical Theories Classical Theories

The Classical approach includes the The Classical approach includes the following three theories:following three theories:

Scientific Management by Frederick TaylorScientific Management by Frederick Taylor

Administrative Principle by Henry FayolAdministrative Principle by Henry Fayol

Bureaucratic Organization by Max WeberBureaucratic Organization by Max Weber

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Scientific ManagementScientific Managementtheory theory

By Frederick W. Taylor (1856 – 1915)By Frederick W. Taylor (1856 – 1915)

Scientific Management or Taylorism was a Scientific Management or Taylorism was a scientific method which was used to optimize scientific method which was used to optimize the way in which tasks were performedthe way in which tasks were performed thus thus improving the labour productivity. improving the labour productivity.

One of Taylor’s philosophy was “In the past One of Taylor’s philosophy was “In the past man was considered first. In the future, the man was considered first. In the future, the system must be considered first.”system must be considered first.”

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The General Concept of Scientific The General Concept of Scientific ManagementManagement

Develop a standard method for performing a task Develop a standard method for performing a task and train workers to use these methods. and train workers to use these methods. (Managers developed precise procedures based (Managers developed precise procedures based on each organizational task)on each organizational task)Provide workers with the proper tools needed to Provide workers with the proper tools needed to work. Selected employees were chosen for work. Selected employees were chosen for specific tasks. (Workers that were stronger both specific tasks. (Workers that were stronger both mentally and physically were assigned specific mentally and physically were assigned specific tasks)tasks)Wage incentives were provided when output was Wage incentives were provided when output was increased. (Employees were motivated to increase increased. (Employees were motivated to increase their output with the use of additional benefits)their output with the use of additional benefits)

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Disadvantages of Scientific Disadvantages of Scientific ManagementManagement

Workers felt exploited because their social Workers felt exploited because their social aspect of life was disregarded. (Workers aspect of life was disregarded. (Workers were treated as machines and not were treated as machines and not humans)humans)

Management stereotyped workers and did Management stereotyped workers and did not allow them to prove their skills in other not allow them to prove their skills in other areas.areas.

Workers were not allowed to form Workers were not allowed to form innovative ways to perform their tasks.innovative ways to perform their tasks.

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Further contributions to Scientific Further contributions to Scientific ManagementManagement

Henry Gantt (Henry Gantt (Gantt ChartGantt Chart), also Lillian M. ), also Lillian M. Gilbreth (1878-1972) (Gilbreth (1878-1972) (Industrial Industrial Psychology and Human Resource Psychology and Human Resource Management) Management) and Frank B. Gilbreth and Frank B. Gilbreth (1868-1924) ((1868-1924) (Time and Motion StudiesTime and Motion Studies))

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Administrative PrincipleAdministrative PrincipleBy Henry Fayol (1841 – 1925)By Henry Fayol (1841 – 1925)

This theory dealt with the entire organization This theory dealt with the entire organization (both workers and management) which (both workers and management) which functioned with functioned with fourfour basic principles. Which are: basic principles. Which are:

1.1. Unity of command Unity of command – Each person receives – Each person receives order from order from only only one superior.one superior.

2.2. Division of work Division of work – Specialization and – Specialization and efficiency were incorporated in workers.efficiency were incorporated in workers.

3.3. Unity of direction Unity of direction – Related activities were – Related activities were grouped under one manager.grouped under one manager.

4.4. Scalar Chain Scalar Chain – is the organizational structure – is the organizational structure which starts from the CEO’s to the labourers.which starts from the CEO’s to the labourers.

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Also covers…Also covers…

The five basic functions or elements of The five basic functions or elements of management (management (Management ProcessManagement Process) are:) are:

PlanningPlanning

OrganizingOrganizing

ControllingControlling

CoordinatingCoordinating

Commanding (Commanding (leading/directingleading/directing))

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Further contributions to Further contributions to Administrative PrinciplesAdministrative Principles

Mary Parker Follet (1868-1933) (Mary Parker Follet (1868-1933) (emphasis emphasis was made on the common goals of the was made on the common goals of the employees in reducing organizational employees in reducing organizational conflict as well as the management conflict as well as the management gaining the trust and respect of gaining the trust and respect of employeesemployees))Chester I. Bernard (18861961) (Chester I. Bernard (18861961) (the the concept of informal organization where concept of informal organization where management and subordinates group management and subordinates group informally to create a bondinformally to create a bond))..

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Bureaucratic OrganizationsBureaucratic Organizations

By Max Weber (1864 – 1920)By Max Weber (1864 – 1920)

Weber’s theory concentrated on the fact that Weber’s theory concentrated on the fact that positions should be structured where.positions should be structured where.

There must be a clear line of authority There must be a clear line of authority (hierarchy)(hierarchy)

AAll persons must be selected by competency for ll persons must be selected by competency for the job and promotion (promotion based on the job and promotion (promotion based on achievement and a specialized division of achievement and a specialized division of labour) also, a formal structure and position labour) also, a formal structure and position rather than an individual.rather than an individual.

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Views and Misconceptions ofViews and Misconceptions ofBureaucratic OrganizationsBureaucratic Organizations

Good bureaucracy removed or reduced Good bureaucracy removed or reduced opportunities for corruption, favoritism and arbitrary opportunities for corruption, favoritism and arbitrary exercises of power (instead of bribing a single exercises of power (instead of bribing a single official, you now have to bribe several officials) .official, you now have to bribe several officials) .Sometimes extra paperwork is added to a system.Sometimes extra paperwork is added to a system.Identified bureaucracy with any large organization.Identified bureaucracy with any large organization.Sometimes bureaucracy would be mistaken for civil Sometimes bureaucracy would be mistaken for civil service (governmental organizations) but actually is service (governmental organizations) but actually is being used at various types of organizations.being used at various types of organizations.Bureaucracy is inflexible.Bureaucracy is inflexible.

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THE HUMAN RESOURCE THE HUMAN RESOURCE APPROACHAPPROACH

The Human Resource perspective to The Human Resource perspective to management suggested that jobs should management suggested that jobs should be designed to meet higher level needs by be designed to meet higher level needs by allowing workers to use their full potential.allowing workers to use their full potential.

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Human Resource Approach Human Resource Approach TheoriesTheories

Hawthorne Studies by Elton MayoHawthorne Studies by Elton Mayo

Maslow’s Theory of Human NeedsMaslow’s Theory of Human Needs

Mc Gregor’s Theory (x y theory)Mc Gregor’s Theory (x y theory)

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The Hawthorne Studies by Elton The Hawthorne Studies by Elton MayoMayo

After a series of studies, it was proven that After a series of studies, it was proven that employees increase the level of output when employees increase the level of output when given better treatment.given better treatment.He carried out research at the Hawthorne Works He carried out research at the Hawthorne Works of the Western Electric Company in Chicago.of the Western Electric Company in Chicago.He and his team of researchers took a group of He and his team of researchers took a group of six women and segregated them. six women and segregated them. They then altered their conditions of work in a They then altered their conditions of work in a number of ways, over a five year period, and number of ways, over a five year period, and observed the effects on production and the observed the effects on production and the morale of the group.morale of the group.

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Contd. Contd. Over the period, changes such as new payment systems, Over the period, changes such as new payment systems, rest breaks of different sorts and lengths, varying the length rest breaks of different sorts and lengths, varying the length of the working day, and offering food and refreshments of the working day, and offering food and refreshments were tried. In almost all cases, productivity improved.were tried. In almost all cases, productivity improved.the women had felt important because they had been the women had felt important because they had been singled out. singled out. the women had developed good relationships amongst the women had developed good relationships amongst each other and had been allowed to set their own work each other and had been allowed to set their own work patterns. patterns. the case of relationship had made for a much more the case of relationship had made for a much more pleasant working environment.pleasant working environment.Conclusion: work satisfaction must depend, to a large Conclusion: work satisfaction must depend, to a large extent, upon the extent, upon the informal social relationships between informal social relationships between workers in a group and upon the social relationships workers in a group and upon the social relationships between workers and their bosses.between workers and their bosses.

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Mayo’s conclusionsMayo’s conclusions

Work is a group activity.Work is a group activity.The social world of an adult is primarily The social world of an adult is primarily patterned by their work activity.patterned by their work activity.The need for recognition, security and belonging The need for recognition, security and belonging is more important than physical conditions of the is more important than physical conditions of the work environment.work environment.A complaint is commonly a symptom manifesting A complaint is commonly a symptom manifesting disturbance of an individual’s current position.disturbance of an individual’s current position.An employee is a person whose attitudes and An employee is a person whose attitudes and effectiveness are conditioned by social effectiveness are conditioned by social demands.demands.

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Conclusions contd. Conclusions contd. Informal groups with an organization creates a Informal groups with an organization creates a strong social control over the work habits and strong social control over the work habits and attitudes of an individual.attitudes of an individual.Groups collaboration must be planned and Groups collaboration must be planned and developed, then a cohesion within an organization developed, then a cohesion within an organization would be formed thus resisting the disrupting effects would be formed thus resisting the disrupting effects of a continuously adaptive society.of a continuously adaptive society.The change from an established society in the home The change from an established society in the home to an adaptive society in the work plant resulting to an adaptive society in the work plant resulting from the use of new techniques contribute to the from the use of new techniques contribute to the disruption of the social organization of the disruption of the social organization of the workplace.workplace.

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Maslow’s Theory of Human’s Maslow’s Theory of Human’s NeedsNeeds

Maslow's hierarchy of needs is a theory in Maslow's hierarchy of needs is a theory in psychology that contends, each of us is psychology that contends, each of us is motivated by needs. Our most basic needs are motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of inborn, having evolved over tens of thousands of years. years.

Abraham Maslow's Hierarchy of Needs helps to Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all. explain how these needs motivate us all.

Maslow's Hierarchy of Needs states that we Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting with the must satisfy each need in turn, starting with the first, which deals with the most obvious needs first, which deals with the most obvious needs for survival itself. for survival itself.

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Contd. Contd.

Only when the lower order needs of Only when the lower order needs of physical and emotional well-being are physical and emotional well-being are satisfied are we concerned with the higher satisfied are we concerned with the higher order needs of influence and personal order needs of influence and personal development.development.

Maslow said that needs must be satisfied Maslow said that needs must be satisfied in the given order. in the given order.

Lower levels are deficiency motivators; Lower levels are deficiency motivators; level while higher levels are growth level while higher levels are growth motivators and relatively rarely found. motivators and relatively rarely found.

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Contd. Contd. So while it is broadly true that people move up So while it is broadly true that people move up (or down) the hierarchy, depending what's (or down) the hierarchy, depending what's happening to them in their lives, it is also true happening to them in their lives, it is also true that most people's motivational 'set' at any time that most people's motivational 'set' at any time comprises elements of all of the motivational comprises elements of all of the motivational drivers.drivers.

Like any simple model, Maslow's theory not a Like any simple model, Maslow's theory not a fully responsive system nevertheless, it remains fully responsive system nevertheless, it remains extremely useful and applicable for extremely useful and applicable for understanding, explaining and handling many understanding, explaining and handling many human behavior situations.human behavior situations.

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Mc Gregor’s TheoryMc Gregor’s Theory(X Y Theory)(X Y Theory)

In 1960 Douglas McGregor, an American In 1960 Douglas McGregor, an American psychologist wrote a book “The Human Side Of psychologist wrote a book “The Human Side Of Enterprise” making contrasting assumptions Enterprise” making contrasting assumptions about the nature of humans in the work place.about the nature of humans in the work place.These assumptions are the basis of Theory X These assumptions are the basis of Theory X and Theory Y teachings.and Theory Y teachings.Generally speaking, Theory X assumes that Generally speaking, Theory X assumes that people are lazy and will avoid work whenever people are lazy and will avoid work whenever possible.possible.Theory Y, on the other hand, assumes that Theory Y, on the other hand, assumes that people are creative and enjoy work.people are creative and enjoy work.

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Theory X and YTheory X and Y

Theory XTheory XThe average individual dislikes The average individual dislikes work and will avoid it.work and will avoid it.Most people must be forced or Most people must be forced or penalized to get them penalized to get them effectively achieve the effectively achieve the organizations goals.organizations goals.The average human has little The average human has little or no ambition,or no ambition,The average human would The average human would avoid responsibilityavoid responsibilityThe average human likes the The average human likes the security andsecurity andbenefits.benefits.

Theory YTheory YThe average individual likes to The average individual likes to work and it’s a natural activity.work and it’s a natural activity.A person could be self A person could be self motivated and is committed to motivated and is committed to their work.their work.The average human learns to The average human learns to accept and seek responsibility.accept and seek responsibility.The average human has the The average human has the capacity to becapacity to beThe average human is The average human is innovative and creative.innovative and creative.The potential of a human The potential of a human under modern industrial life is under modern industrial life is moderately utilized.moderately utilized.

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Contd. Contd. Mc Gregor’s theory is a useful and simple Mc Gregor’s theory is a useful and simple reminder of the natural rules for managing reminder of the natural rules for managing people.people.He maintained that there are two He maintained that there are two fundamental approaches to managing fundamental approaches to managing people.people.– Theory X Manager is an authoritarian Theory X Manager is an authoritarian

manager and generally gets poor results.manager and generally gets poor results.– Theory Y Manager is a participative manager Theory Y Manager is a participative manager

which produces better performance and which produces better performance and results, and allows people to grow.results, and allows people to grow.

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Comparisons Comparisons

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Comparisons Comparisons Theory XTheory X

Motivation style- Threats and Motivation style- Threats and disciplinary action are used disciplinary action are used more effectively in this more effectively in this situation, also monetary gain.situation, also monetary gain.Leadership- Authoritarian Leadership- Authoritarian Power & Authority- Arrogant, Power & Authority- Arrogant, one way communicatorone way communicatorConflict- IntolerantConflict- IntolerantPerformance Appraisals- Performance Appraisals- Appraisals occur on a regular Appraisals occur on a regular basisbasis

Theory YTheory YMotivation style- RewardingMotivation style- RewardingLeadership- ParticipativeLeadership- ParticipativePower & Authority- The Power & Authority- The manager would take manager would take suggestions from workers, but suggestions from workers, but would keep the power to would keep the power to implement the decisionimplement the decisionConflict- Workers might be Conflict- Workers might be given the opportunity to exert given the opportunity to exert "Negotiating" strategies to "Negotiating" strategies to solve their own differencessolve their own differencesPerformance Appraisals- Performance Appraisals- Promotions also occur on a Promotions also occur on a regular basis.regular basis.

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Contd. Contd. With respect to overall management style, With respect to overall management style, McGregor's Theory X and Theory Y managers McGregor's Theory X and Theory Y managers seem to have a much more formal leadership seem to have a much more formal leadership style and managers seem to have different style and managers seem to have different views of the workers, while their views of the views of the workers, while their views of the tasks remains the same in both cases: that is, tasks remains the same in both cases: that is, one of specialization, and doing a particular one of specialization, and doing a particular task.task.Albeit that Theory Y suggests that the workers Albeit that Theory Y suggests that the workers would become very good at their particular would become very good at their particular tasks, because they are free to improve the tasks, because they are free to improve the processes and make suggestions. While theprocesses and make suggestions. While theA theory X worker is said to require force, A theory X worker is said to require force, threats, and possibly even disciplinary action.threats, and possibly even disciplinary action.

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Contd. Contd.

Theory Y are, again, self motivated, this Theory Y are, again, self motivated, this allows them to focus on the task, and also allows them to focus on the task, and also their role within the company. their role within the company. Their desire is to be more productive and Their desire is to be more productive and enable the company to succeed. enable the company to succeed. Theory X workers, on the other hand, Theory X workers, on the other hand, seem to have just enough self motivation seem to have just enough self motivation to show up at work, punch the time clock, to show up at work, punch the time clock, as it were, and do only that which is as it were, and do only that which is necessary tonecessary to

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MODERN APPROACHES TOMODERN APPROACHES TOMANAGEMENTMANAGEMENT

Elements of various perspectives, mostly Elements of various perspectives, mostly the humanistic perspective evolved into the humanistic perspective evolved into what is known as the Modern Approach to what is known as the Modern Approach to management.management.

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Modern theoriesModern theories

Open SystemsOpen Systems

Contingency ThinkingContingency Thinking

Lessons from the Japanese management Lessons from the Japanese management style (theory z)style (theory z)

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Open SystemsOpen Systems A system is defined as a A system is defined as a group of interacting group of interacting unitsunits or elements that have a common purpose. or elements that have a common purpose.

Therefore Open systems refer to systems that Therefore Open systems refer to systems that interact with other systems or the outside interact with other systems or the outside environment.environment.

An organization is an entity that takes inputs from An organization is an entity that takes inputs from the environment, transforms them, and releases the environment, transforms them, and releases them as outputs in sequence with mutual effects them as outputs in sequence with mutual effects on the organization itself along with the on the organization itself along with the environment in which the organization operates.environment in which the organization operates.

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Contd Contd For example, living organisms are considered For example, living organisms are considered open systems because they take in substances open systems because they take in substances from their environment such as food and air from their environment such as food and air and return other substances to their and return other substances to their environment.environment.

The three major characteristics of open The three major characteristics of open systems are:systems are:1.1. They receive inputs or energy from their They receive inputs or energy from their

environment.environment.

2.2. They convert these inputs into outputs.They convert these inputs into outputs.

3.3. They discharge their outputs into their environmentThey discharge their outputs into their environment

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Contd Contd

Companies use inputs such as labour, Companies use inputs such as labour, funds, equipment, and materials to funds, equipment, and materials to produce goods or to provide services and produce goods or to provide services and they design their subsystems to attain they design their subsystems to attain these goals.these goals.

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Proponents Proponents Two early pioneers in this effort, Daniel Katz and Robert Two early pioneers in this effort, Daniel Katz and Robert Kahn, began viewing organizations as open systems Kahn, began viewing organizations as open systems with specialized and interdependent subsystems and with specialized and interdependent subsystems and processes of communication, feedback, and processes of communication, feedback, and management linking the subsystems. management linking the subsystems. Katz and Kahn argued that the closed-system approach Katz and Kahn argued that the closed-system approach fails to take into account how organizations are fails to take into account how organizations are reciprocally dependent on external environments. reciprocally dependent on external environments. For example, environmental forces such as customers For example, environmental forces such as customers and competitors exert considerable influence on and competitors exert considerable influence on corporations, highlighting the essential relationship corporations, highlighting the essential relationship between an organization and its environment as well as between an organization and its environment as well as the importance of maintaining external inputs to achieve the importance of maintaining external inputs to achieve a stable organization.a stable organization.

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Contingency theoryContingency theory The contingency approach to management is an The contingency approach to management is an extension of the humanistic perspective which is extension of the humanistic perspective which is based on the idea that in an organization based on the idea that in an organization there there is no one best way in the management is no one best way in the management processprocess (planning, organizing, leading, and (planning, organizing, leading, and controlling) to successfully resolve any tailored controlling) to successfully resolve any tailored circumstances; because organizations, people, circumstances; because organizations, people, and situations vary and change over time. and situations vary and change over time. Thus, the right thing to do depends on a Thus, the right thing to do depends on a complex variety of critical environmental and complex variety of critical environmental and internal contingencies.internal contingencies.

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Proponents Proponents The contingency approach was suggested by two The contingency approach was suggested by two American academics, Lawrence and Lorsch in 1967. American academics, Lawrence and Lorsch in 1967. Their important contribution to this approach was as Their important contribution to this approach was as follows:follows:

1.1. The more dynamic and diverse the environment, the higher the The more dynamic and diverse the environment, the higher the degree of both differentiation and integration required for degree of both differentiation and integration required for successful organization.successful organization.

2.2. Less changeable environments require a lesser degree of Less changeable environments require a lesser degree of differentiation but still require a high degree of integration.differentiation but still require a high degree of integration.

3.3. The more differentiated an organization, the more difficult it is to The more differentiated an organization, the more difficult it is to resolve conflict.resolve conflict.

4.4. Where the environment is uncertain, the integrating functions Where the environment is uncertain, the integrating functions tend to be carried out by middle and low-level managerstend to be carried out by middle and low-level managers

5.5. Where the environment is stable, integration tends to be Where the environment is stable, integration tends to be achieved at the top end of the management hierarchy.achieved at the top end of the management hierarchy.

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Contd. Contd. Also, Fred Fiedler, in the 1960s and 1970s, who Also, Fred Fiedler, in the 1960s and 1970s, who was an early pioneer in this area argued that was an early pioneer in this area argued that various aspects of the situation had an impact various aspects of the situation had an impact on the effectiveness of different leadership on the effectiveness of different leadership styles.styles.For example, Fiedler suggests that the degree to For example, Fiedler suggests that the degree to which subordinates like or trust the leader, the which subordinates like or trust the leader, the degree to which the task is structured, and the degree to which the task is structured, and the formal authority possessed by the leader are key formal authority possessed by the leader are key determinants of the leadership situation. determinants of the leadership situation. Task oriented or relationship oriented leadership Task oriented or relationship oriented leadership should affect each work if they fit the should affect each work if they fit the characteristics of the situation.characteristics of the situation.

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Japanese Management Style Theory ZJapanese Management Style Theory ZMcGregor, identified a negative set of assumptions about McGregor, identified a negative set of assumptions about human nature, which he called Theory X. human nature, which he called Theory X. He asserted that these assumptions limited the potential for He asserted that these assumptions limited the potential for growth of many employees.growth of many employees.He presented an alternative set of assumptions that he called He presented an alternative set of assumptions that he called Theory Y and were more positive about human nature as it Theory Y and were more positive about human nature as it relates to employees. relates to employees. In McGregor's view, managers who adopted Theory Y beliefs In McGregor's view, managers who adopted Theory Y beliefs would exhibit different, more humanistic, and ultimately more would exhibit different, more humanistic, and ultimately more effective management styles and Theory Y became a well-effective management styles and Theory Y became a well-known prescription for improving management practices.known prescription for improving management practices.Concerns about the competitiveness of U. S. companies led Concerns about the competitiveness of U. S. companies led some to examine Japanese management practices for clues some to examine Japanese management practices for clues to the success enjoyed by many of their industries.to the success enjoyed by many of their industries.This led to many articles and books purporting to explain the This led to many articles and books purporting to explain the success of Japanese companies. success of Japanese companies. It was in this atmosphere that Theory Z was introducedIt was in this atmosphere that Theory Z was introduced

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Japanese orientation- Theory ZJapanese orientation- Theory ZTheory Z is a Theory Z is a humanistic approach to managementhumanistic approach to management (William Ouchi).(William Ouchi).

The key features of Japanese industrial organizations, The key features of Japanese industrial organizations, according to Ouchi are as follows:according to Ouchi are as follows:

1.1. Offer lifetime employment (at least for their core Offer lifetime employment (at least for their core workers).workers).

2.2. Promote from within.Promote from within.

3.3. Insist on mandatory retirement of core workers or Insist on mandatory retirement of core workers or change of occupation.change of occupation.

4.4. Employ a large number of temporary employees Employ a large number of temporary employees mostly women (equity).mostly women (equity).

5.5. There is a high degree of mutual trust and loyaltyThere is a high degree of mutual trust and loyalty

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The key features of Japanese The key features of Japanese industrial organizationsindustrial organizations

6. Career paths are non-specialized with life-long job 6. Career paths are non-specialized with life-long job rotation as a central feature of career rotation as a central feature of career development.development.

7. Decision making is shared at all levels.7. Decision making is shared at all levels.8. Performance appraisal is long term (ie the first 8. Performance appraisal is long term (ie the first

appraisal takes place 10 years after joining the appraisal takes place 10 years after joining the company).company).

9. There is a strong sense of collective responsibility 9. There is a strong sense of collective responsibility for the success of the organization.for the success of the organization.

10. Cooperation effort rather than individual 10. Cooperation effort rather than individual achievement is encouraged.achievement is encouraged.

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Contd. Contd.

Although Ouchi recognizes that many of the features Although Ouchi recognizes that many of the features of Japanese management could not be translated of Japanese management could not be translated into into

Western industrial society, he believes that certain Western industrial society, he believes that certain features could be applied in a Western context. features could be applied in a Western context.

The move from the present hierarchical type of The move from the present hierarchical type of organization to a Theory Z type organization is a organization to a Theory Z type organization is a process which, says Ouchi: process which, says Ouchi: ““Has the objective of developing the ability of the Has the objective of developing the ability of the

organization to coordinate people, not technology to organization to coordinate people, not technology to achieve productivity.”achieve productivity.”

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Contd. Contd.

In his view, this requires a new In his view, this requires a new philosophy of managing people based on philosophy of managing people based on a combination of thea combination of the

following features of Japanese following features of Japanese management:management:

1.1. Lifelong employment prospectsLifelong employment prospects

2.2. Shared forms of decision-makingShared forms of decision-making

3.3. Relationship between boss and subordinate Relationship between boss and subordinate based on mutual respectbased on mutual respect

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Contd. Contd.

According to Ouchi the introduction of Theory Z According to Ouchi the introduction of Theory Z approaches into Western firms requires the approaches into Western firms requires the following strategy:following strategy:– Adoption of a “Top down” approach, based on Adoption of a “Top down” approach, based on

definition of the new philosophy agreed and definition of the new philosophy agreed and supported by the organization’s top management.supported by the organization’s top management.

– Implementation of the new approach should be Implementation of the new approach should be carried through on the basis of consultation and carried through on the basis of consultation and communication with the workforce and with full communication with the workforce and with full training support to develop relevant skills for training support to develop relevant skills for managers, supervisors and their teams.managers, supervisors and their teams.

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When applying these When applying these theories always theories always remember…..remember…..

It is your job as a It is your job as a manager to pull manager to pull people and the people and the organization out of organization out of holes when they fall holes when they fall in!in!

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Thank you Thank you