Institute of Nursing

Dow University of Health Sciences Karachi

Theories and Concepts in Management

Mahmood Ahmed
Course # (551) Leadership & Management in Nursing Practice

June 13, 2015

 Objectives
• Management
• Evolution of management theories
• Different schools of thoughts
• Management theories
• Motivation Theories
• Modern management theories
• 21st century management
• References
 What is Management?
• Management is the process of accomplishing
an organization’s goals by working with and
through people, utilizing all the resources
available to it.
• The essence of management is getting work
done through others.

The Role of Management

 NURSING MANAGEMENT
• Nursing Management is the body of knowledge
related to performing the functions of
planning, organizing, staffing, directing and
controlling (evaluating) the activities of a
nursing in departmental subunits.
 Management Theories
Definition
Management theories are the set of general rules that guide the
managers to manage an organization.
Theories are an explanation to assist employees to effectively
relate the business goals and implement effective means to achieve
the same.
 Management Theories
• Evolved in response to the shift from handicraft to
industrial production.
• Emphasis is on economic rationality of people and
organizations; motivated by economic incentives, they
make choices that yield the greatest monetary benefits.

1. Application of science to the practice of management.

2. Development of basic management functions.
3. Articulation and application of specific principles of
management.
Evolution of Management Theory

Modern
Management School
Systems
Contingency
1920-1950 Organizational
Neo-Classical Humanism
Management School Management
Human Relations Science
Behavioral
1880 - 1930
Classical Management
School
Scientific
Administrative
Bureaucratic
 Classical Management School
1880 – 1930
• Scientific Theory Frederick Taylor
• Administrative Theory Henri Fayol
• Bureaucratic Theory Max Weber
 Frank & Lillian Gilbreth
1912 - 1924

Time and Motion Studies

• Disciples of Frederick Taylor, their time and motion

studies helped lay the foundations for Scientific
Management
• The best possible way for a worker to complete a job.
• The expected results are employee satisfaction,
productivity and efficiency.
 Henry Gantt
1910 – 1915

• Project Scheduling – The Gantt Chart

• An associate of Frederick Taylor, he designed

a project scheduling model for increasing the
efficiency of project execution and
completion.
 Frederick Taylor
Theory of Scientific Management
• Taylor’s theory of scientific management aimed at
improving economic efficiency, especially labor
productivity.
• Taylor had a simple view about what motivated people
at work - money.
• He felt that workers should get a fair day's pay for a
fair day's work, and that pay should be linked to the
amount produced.
• Therefore he introduced the DIFFERENTIAL PIECE
RATE SYSTEM of paying wages to the workers.
 Taylor's Differential Piece Rate Plan

If Efficiency > Standard then

120 % of Normal Piece Rate
= (Units Produced)x(Normal Piece Rate) + (1.20)x(Normal Piece Rate)
If Efficiency < Standard then
80 % of Normal Piece Rate
= (Units Produced)x(Normal Piece Rate) + (0.80)x(Normal Piece
Rate)
 Principles of scientific management
Four Principles of Scientific Management are :
• Time and motion study - Study the way jobs are
performed and find new ways to do them.
• Teach , train and develop the workman with improved
methods of doing work. Codify the new methods into rules.
• Interest of employer & employees should be fully
harmonized so as to secure mutually understanding
relations between them.
• Establish fair levels of performance and pay a premium
for higher performance.
 Henri Fayol
Administrative Management Theory
Henri Fayol known as the FATHER OF MANAGEMENT
laid down the 14 principles of Management :

Division of Work Equity

Discipline Initiative
Authority and Esprit De Corps (Team
responsibility spirit)
Subordination of Individual Stability Of Tenure
Interest to General Interest
Remuneration Unity Of Direction
Centralization Scalar Chain
Order Unity of Command
 Bureaucratic Theory

“The Theory of Social and Economic Organization”

The Bureaucratic School of Management
• A major contribution is his “bureaucracy” theory, a formalized and
idealized view of organizations, comprising 6 major principles.
• Max Weber
1. A formal hierarchical structure.
2. Management by rules.
3. Organization by task competency.
4. Impersonal relationships.
5. A focused mission.
6. Employment based on technical qualifications.
 Summary: The Classical School of
Management
Scientific Administrative Bureaucratic
Concern for precise Development of Impersonal view of
work methods managerial organizations
principles
Best way for jobs to Best way to organize Formal structure,
be done all jobs in a business legitimate authority
and competence of
management
 Criticisms of The Classical School of
Management
• No one is entirely driven by economic motivations.
• People’s choices and behavior are dictated by other
factors such as social needs, security and self-esteem.
• There is no such thing as “the best way” to do a job.
• Extreme division of labor tends to produce monotony
and reduce overall skill levels.
• People are managed like machines. Introduction of
newer machines led to job elimination.
 Neo-Classical Management School
1920-1950

Core Concepts
• Grew in reaction against the Scientific Theory of
Management which emphasized standardization of
jobs, processes and technologies to maximize
economic return.
• Focus shifted to the human side of organizations.
1. The best way to motivate, structure and support employees.
2. The need for workers to find intrinsic value in their jobs.
3. The positive impact of social relationships on worker
productivity.
 Neo-Classical Management School
1920-1950
• The behavioral management theory is often
called the human relations movement
because it addresses the human dimension of
work

Elton Mayo and F. J. Roethlisberger

• Motivational theories
 Hawthorne experiments
• Hawthorne experiments consisted of two
studies conducted at the Hawthorne Works of
the Western Electric Company in Chicago
from 1924 to 1932
(the increase in productivity resulted from the changes in lighting)
• Harvard researchers Mayo and F. J.
Roethlisberger supervised a group of five
women in a bank
(the increase in productivity resulted from the supervisory arrangement)
 Hawthorne Studies Effects
• Productivity increases when workers believe that
they are being observed closely.
• Employees perform better when managers and
co-workers make them feel valued.
• Financial rewards are not necessarily conducive
to increasing worker productivity.
• Workers care about self-fulfillment, autonomy,
empowerment, social status and personal
relationships with co-workers.
 Human Relations Theory of Management
• People are social beings, motivated by social needs.
• A sense of identity is derived from inter-personal
relationships.
• Workers are more receptive to social forces of peer
groups than monetary incentives and management
controls.
• Workers respond positively to attention from
management, co-workers and customers.
• The psychological needs of individuals significantly
impact group performance.
Behavioral Theory

• Experiments showed an increase in worker productivity

was produced by the psychological stimulus of being
singled out, involved, and made to feel important.
• Hawthorne Effect, can be summarized as “Employees
will respond positively to any novel change in work
environment like better illumination, clean work stations,
relocating workstations etc.
• Employees are more productive because they know they
are being studied /observed.
 Abraham Maslow ‘s need theories
• Developed widely recognized need theories, a
theory of motivation based upon a consideration of
human needs. theory of human needs had three
assumptions:
• Human needs are never completely satisfied.
• Human behavior is purposeful and is motivated by
the need for satisfaction.
• Needs can be classified according to a hierarchical
structure of importance, from the lowest to highest.
 e
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Abraham Maslow ‘s
A need theories
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Autonomy, Empowerment
sl
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Recognition and Rewards e a
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P c mi
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Collaboration, teamwork, work-life balance
ha n
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Personal and financial security i e
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Working Conditions and Work hours o
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iHierarchy of Needs Theory
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McGregor’s theories X and Y
• Theory X:most people do not want to work
very hard
– Manager needs to employ strict rules, constant
supervision, and the threat of punishment
• Theory Y : the work itself can be motivating
and that people work hard if their managers
provide a supportive environment.
– People need guidance rather than control, development
rather than close supervision, and reward rather than
punishment
Alderfer ‘s Three categories of needs 1972

Three categories of needs, also ordered into a

hierarchy:
1. Existence: Physical well-being
2. Relatedness: Satisfactory relations with
others
3. Growth: Development of competence and
realization of potential
Herzberg’s Two factors theory , 1959
• Two factors that influence motivation. The
absence of hygiene factors can create job
dissatisfaction, but their presence does not
motivate or increase satisfaction.
1. Hygiene factors: Company policy,
supervision, interpersonal relations, working
conditions, salary
2. Motivators: Achievement, recognition, the
work itself, responsibility, advancement
 McClelland, three needs theory 1961
• Motivation results from three dominant needs.
Usually all three needs are present in each individual
but vary in importance depending on the position a
person has in the workplace. Needs are also shaped
over time by culture and experience.
1. Need for achievement: Performing tasks on a
challenging and high level
2. Need for affiliation: Good relationships with others
3. Need for power: Being in charge
 Summary: Neo-Classical School of
Management
• Behavioral School is a logical extension of the Human
Resource School.
• They are largely concerned with motivation of
workers.
• Workers are diverse in their needs and want
challenging work, participative decision-making, self-
direction and control.
• Managers must help workers deal with situational
constraints and social aspects of organizational and
environmental changes.
 The Modern School of Management
Core Concepts
• Dealing with complexity is the core of modern management theory.
Organizations, Workers, Environment and the interactions between
them.
• It is a synthesis of several theories.
Behavioral science, mathematics, statistics, operations / quantitative
research and computing technologies.
• Management is an exercise in logic applied to situations.
Situations can be measured.
Computers have an increasing role to play.
• Application of management knowledge is extended to non-business
areas.
Education, government, health care and others.
The Quantitative School of Management
evolved in world war II
• Combines classical management theory and behavioral science through the use
of statistical models and simulations.
• A major focus is on the process with which decisions are made, to ensure
informed results.
The quantitative school comprises
• Scientific Management
Managers use of math and statistics for problem solving.
• Operations Management
Managing the process of combining materials, workers and capital to produce
goods and services.
• Management Information Systems
Transforming historic, current and projected data from internal and external
sources into useful, usable management information.
• Systems Management Theory
Transforming inputs into outputs and receiving feedback.
 The Systems School of Management
Ludwig von Bertalanffy 1937

• The systems management theory OR General Systems

Theory)
• Has a significant effect on management science.
• A system is an interrelated set of elements functioning as a
whole.
• An organization as a system is composed of four elements:
– Inputs — material or human resources
– Transformation processes — technological and managerial processes
– Outputs — products or services
– Feedback — reactions from the environment
 Organization as a system
Feedback from the environment used to
change & grow

Input Throughput Output

Resources from the The process of converting The product or service
or transforming resources exported to the
environment within the system into a environment
product or service

The Environment in which the system operates.

Environmental elements have the potential to affect all or part of the system
The Contingency School of Management

• Contingency theory is a recognition of the

extreme importance of individual manager
performance in any given situation.
1. Perceiving organizational situations as they
actually exist.
2. Choosing the management tactics best suited
to those situations.
3. Competently implementing those tasks.
 Quality School of Management
• Quality Management aims at continually
improving performance by focusing on
customers while addressing the needs of all
stakeholders.
• Concept focuses on managing the total
organization to deliver high quality to
customers.
 Quality Management Considerations
• Organization makeup.
– customers and suppliers
• Quality of goods and services
– Customers’ requirements is a priority goal
– key to organizational survival and growth
• Continuous improvement in goods and services
– Recognize the internal and external requirements and continuously
strive to improve
• Employees working in teams
– Categorical groups for planning and problem solving
– Departments
• Developing openness and trust
– Confidence among members of the organization and trust of customers
Management in the Future (21st Century)

• Modern management approaches respect the classical,

human resource, and quantitative approaches to management
• Commitment to meet customer needs 100 percent through
quality management and continuous improvement of
operations
• Managers must stand out in their leadership responsibilities
to perform several roles.
• Learn new ways of managing from practices in other
countries.
• Organizations must invest on people through training
References:
• Rigolosi, E. (2005). Management and Leadership in Nursing and Health
Care: An experiential approach. (2nd ed.). New York: Springer Publishing
Company, Inc.
• Ellen A. Benowitz(2001). The Evolution of Management Thought Ch. 2,
Cliffs Quick Review,: Principles of Management. Hungry Minds, Inc. 909
Third Avenue.New York, NY 10022
• Patricia Kelly. (2010). Essentials of Nursing Leadership & Management,
2nd Edition. Delmar, 5 Maxwell Drive Clifton Park, NY 12065-2919 USA
• Neil Thomas.( 2004). The John Adair Handbook of Management and
Leadership. Thorogood 10-12 Rivington Street London EC2A 3DU. Printed
in India by Replika Press
• Diane K.Whitehead, Sally A.Weiss, Ruth M.Tappen.(2010). Essentials of
Nursing Leadership and Management .5th ed. F. A. Davis Company.USA