Administrative management principles/theory

Its two major purposes are;

(a) To develop basic principles that could guide the design, creation, and maintenance of large
organizations;
(b) To identify the basic functions of managing organizations.

The main contributors to this management theory were;

1. Henri Fayol (1949)

2. Mooney and Reiley (1939) and
3. Gulick and Urwick (1937).

Henri Fayol [1841-1925]

Fayol is considered the founder of the classical approach. His main concern was on the functions of
management. To him, management was the most neglected aspect of business operation. Before Fayol,
the general believe was that managers are born and not made i.e. no one could become a manager through
formal training. However, Fayol was of the view that management was a skill like any other and it could
be taught once its underlying principles were understood.

Fayols contribution towards management

Fayol contributed in the field of management in the following ways;

(a) He identified five elements/functions of management i.e. planning, organizing, commanding,

coordinating and controlling.
(b) He came up with the Fourteen principles of management i.e. Division of Work, Authority and
responsibility and so on; and
(c) He identified six major activities of industrial organization i.e. Technical, commercial, financial,
security, accounting and managerial;
(d) He identified six types of qualities of a manager are- Physical, mental, moral, educational, technical
and experience;

Fayols 14 principles of management

He came up with the 14 Principles [blue-print of management].

1. Division of labour: The more people specialize the more efficiently they can perform their work.
2. Authority: Managers have the right and the authority to give orders to get things done.
3. Discipline: Members of an organization need to respect the rules and regulations that governed by
the organization.
4. Unity of commands: Each employee should receive instructions from only one supervisor.
5. Unity of direction: Operations with similar objectives should be directed by one manager using one
plan.

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6. Subordination of individual interests to common goal: Individual interests should not be placed
before the organizational goals.
7. Remuneration: Should be fair to both employees and the organization
8. Centralization: Power and authority should be centralized to the upper level to the possible extent.
9. Scalar Chain (hierarchy): The authority should flow from top to bottom.
10. Order: Human and materials should be in the right place at the right time.
11. Equity: Managers should be fair and kind to subordinate.
12. Stability of tenure: Employee stability. A high employee turnover rate is not good for the efficient
functioning of an organization
13. Initiative: Employees should be given to enough freedom for initiative i.e. conceive and carry out
their plans at all levels
14. Espirit De Corps: Team spirit should be promoted in an organization. This gives an organization a
sense of unity

While Fayols principles are widely quoted, he did not intend them to be set in stone but rather as
guidance for management action, which must always take into consideration the prevailing
circumstances.

Benefits from the administrative theory

(a) The numerous principles that have evolved have provided blue- prints in management.
(b) The administrative theory has set the foundations for present emphasis on the key components of
the function/process of management i.e. planning, organizing, directing/leading and controlling.
(c) It has enhanced and promoted the skills of managers.
(d) The use of principles makes room for little deviations since the principles provide blue-print and
direction. In this way, trial and error are minimized.

Criticisms /Drawbacks to the Administrative Principles

1. The approaches are now seen as being too mechanistic and rigid, as there is demand for a more
flexible approach to management and organisation.
2. This approach ignores the existence of the informal organization.
3. All important decisions rest with management, with very little consultation with the staff
4. His principle of specialisation produces the following dysfunctional consequences
It leads to the formation of small work groups with norms and goals at odds with those of
management.
It results in the dissatisfaction of workers because it does not provide them the opportunity to use
all their abilities.
It results in an increase in the overhead costs because the more the specialisation develops at one
level, the greater becomes the need for coordination at a high level.
5. Adherence to principles impairs initiative and discretionary use of authority

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6. Principles are not applicable in all situations since we are in a dynamic environment.
7. They cannot be used as rule-of-thumb since organizations cannot function without people; the
disregard for human factors that will apply the principles is a serious drawback to the administrative
Principle.

Bureaucratic Management

Max Weber (1864 1920)

Max Weber, a German sociologist, studied different types of business and government organizations and
distinguished 3 basic types of administration in them:

1. Leader oriented administration in which there was no delegation of management functions. All
employees serve as loyal subjects of a leader.
2. Tradition-oriented administration. This is where managerial positions were handed down from
generation to generation. Who you are rather than what you can do, become the primary criterion for
work assignment
3. Bureaucratic administration. Delegation of management responsibility was based on a persons
demonstrated ability to hold the position. People earned positions because they were presumed to be
the best and capable of filling them. Weber considered this to be the most ideal type of
administration.

Why establish a bureaucratic management?

Need for the organization to operate in a rational manner rather than relying on the arbitrary whims and
sectional interests of the owners and managers

Bureaucratic organization

This is a form of organization with hierarchy of authority regulated by rules and regulations. Weber saw
bureaucracy as a means of introducing order and rationality into social life.

This concept is often referred to as red tapeism i.e. too many rules, regulations and paperwork which
often lead to inefficiency. Also it is referred to as officialdom i.e. all the apparatus of central and local
government.

Features of Bureaucracy

1. Specialisation of labour: jobs are broken down into routine, well defined tasks so that members
know what is expected of them and can become extremely competent at what they do.
2. Formal rules and procedures: written rules and procedures specify the behaviours desired from
members, facilitate coordination and ensure uniformity.
3. Impersonality: rules, procedures, and sanctions are applied uniformly regardless of the individual
personalities and personal considerations.
4. Well defined hierarchy: multiple levels of positions with carefully determined reporting

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 relationships among levels provide supervision of lower offices by higher ones, a means of handling
exceptions and the ability to establish accountability of actions.
5. Career advancement based on merit: selection and promotion are based on the qualification and
performance of members.

Contributions of Bureaucracy

1. The definition of responsibilities and duties of each position within the hierarchy derives from the
overall objectives of the organisation and there is no room for subversion of those objectives.
2. Work is highly regulated in that every eventuality is covered by the laid-down rules and procedures
3. All tasks are covered by the hierarchy of supervision which ensures the desired level of
performance.
4. The existence of tight job descriptions and person specifications means that staff has specific skills
and abilities related directly to the tasks to be performed.
5. The bureaucratic form strongly supports the application of rules and regulations which create a
feeling of certainty that provides a stress free workplace.
6. Security of employment and the impersonality of the work practices and procedures encourage
faithful performance of duties, confidence in the system and opportunities within a regularized
promotion system which removes office competition.

Limitation of Bureaucracy

1. Lack of responsiveness to individual incidences due to impersonality.

2. Relationships are inhibited, meaning that social and ego needs are unsatisfied.
3. Applying rigid rules may lead to inefficiency because circumstances vary infinitely.
4. The initiative of the employees may be impaired as rules become ends in themselves.
5. Bureaucratic rules/procedures can cause a lack of flexibility or adaptation to changing
circumstances.
6. There can be a lack of attention to the informal organization and the development of groups and
their goals.
7. Handling problems in a standard fashion instead of using their own initiative does not satisfy most
workers' needs.
8. Environments are becoming more dynamic and prone to change there is therefore need for a
dynamic organization and relationships in a changing environment.

Webers legitimate authority

Max Weber identified three types of legitimate authority:

(a) Traditional authority: this is where orders were obeyed, as the people giving them were invested
with the same through custom or conventions (e.g. king or lord).

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(b) Charismatic authority: The acceptance of authority is based on loyalty to, and confidence in the
personal qualities of a person in authority.
(c) Rational-Legal authority: this is where orders were obeyed because subordinates believed that the
persons giving them were empowered to do so through legal sanction, i.e., in accordance with legal
rules and regulations in force.

NEO-CLASSICAL APPROACH

They are called neo-classical because they do not reject the classical concepts; they only try to refine
them. Here we have;

1. Behavioural and
2. human relations approach

The behavioural approach

The behavioural approach was developed to take care of the human element in organizations which was a
major limitation of the classical approach. The approach was a result of group of management scholars
trained in behavioural disciplines e.g. Sociology, Psychology, Anthropology and related fields who used
their diverse knowledge to propose more effective ways to manage people in an organisation. The main
assumption here was that people are social and self-actualizing.

Human Relations Theory of Management

Elton Mayo

He was an associate professor at the Harvard graduate school of business management. He performed a
series of experiments at the Hawthorne plant of Western Electric Company in Chicago.

Background of the study

The researchers were trying to find the optimum level of lighting in the plant to maximize productivity.
The surprising finding was that the productivity increased among the group of workers being studied both
when levels of illumination was increased and when it was decreased.

Subsequent studies by Mayo led to the conclusion that what was affecting performance was the special
attention being paid to the group of workers rather than any external physical factors.

Their working lives had suddenly become more interesting because of the experiments which were taking
place. They felt important and valued and the result was increased enthusiasm for their jobs and a higher
output. This phenomenon has become to known as the Hawthorne effect

Having established from this that performance was related to psychological and sociological factors as
well as purely physical ones and the organizational structure, Mayo went on to investigate what other
forces were at play in the work place.

In summary, his findings were as follows:

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- Workers are strongly motivated by social needs (for social interaction, self-esteem and recognition, a
sense of belonging and security) and seek satisfaction of those needs over and above any others,
including the need for money once a certain level of remuneration has been achieved.
- Individual workers belong to groups at the workplace which lay down their own codes of behaviour,
leaders and means of enforcement of the group norms constituting a whole informal organization
within the formal one.

Contributions of Human Relations Movement

1. It recognized the importance of human factors like feelings and needs

2. It brought out the importance of group dynamics in communication, motivation, participation and
leadership.
3. The importance of organizational members as active resources rather than passive tools was
recognized.
4. A business organization is not merely a techno-economic system but is also a social system.
5. There is no correlation between improved working conditions and high production.
6. A workers production norm is set and enforced by his group and not by the time and motion study
done by any industrial engineer.
7. A worker does not work for money only. Non-financial rewards such as affection and respect of his
co-workers also significantly affect his behaviour.
8. Employee-centred, democratic and participative style of leadership is more effective than the task-
centred leadership.
9. The informal group and not the individual is the dominant unit of analysis in organizations.

Limitations

1. The human relations writers saw only the human variables as critical and ignored other variables.
2. The implicit belief of this approach that an organization can be turned into one big happy family
where it is always possible to find a solution which satisfies everybody is not correct.
3. This approach over-emphasises the importance of symbolic rewards and underplays the role of
material rewards.
4. This approach provides an unrealistic picture about informal groups by describing them as a major
source of satisfaction for industrial workers.
5. This approach is in fact production-oriented and not employee-oriented as it claims to be.
6. The leisurely approach of decision-making of this approach cannot work during an emergency.
7. The approach makes an unrealistic assumption that the superior does not want power.
8. This approach is based on a wrong assumption that satisfied workers are more productive workers.

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