CHAPTER 1

INTRODUCTION TO MANAGEMENT
CONCEPTS

Learning outcome
Students will be able to:
Describe the management theories.
Understand the classification in construction industry.
Determine the participants in a construction industry.
Understand the project delivery method in construction.

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 Basic Management
Concept
Classical Theories
- Administrative Management (Henri Fayol)
- Scientific Management (Frederick
Winslow Taylor)

Human Relation Theories

- Hawthorne Effect (Elton Mayo)
- Theory X and Y (Douglas McGregor)

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Henri Fayol (1841-1925)
French management theorist whose theories
concerning scientific organisation of labour
were widely influential in the beginning of 20th
century.
His theories deal with the organisation of
production in the context of a competitive
enterprise that has to control its production
costs.
Fayol was the first to identify the four functions
of management: planning, organizing,
directing, and controlling, although his
version was a bit different: plan, organize,
command, coordinate, and control.

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 Cont
He also identified 14 principles that he saw as
common to all organisations.

Specialisation/ Remuneration
division of labour. Centralisation
Authority with Chain / line of
responsibility authority
Discipline Order
Unity of command Equity
Unity of direction. Lifetime jobs (for good
Subordination of workers)
Individual Interests Initiative
Esprit de corps

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Frederick Winslow Taylor (1856-1915)

American industrial engineer, who originated

Scientific Management in business.
Scientific method to the management of
workers could improve productivity.
He assumed that:
- working systems were generally inefficient
because no-one had bothered to make
them efficient.
- workers were naturally inclined to be lazy
and inefficient.

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 Cont
Develop Time & Motion Study.
-business efficiency technique
-refined by Frank and Lillian Gilberth.
-to reduce the number of motions in performing a
task in order to increase productivity.
-the best known experiment involved bricklaying.
Workers should cooperate with management (no
trade union).

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 Cont
Best results would come from the partnership
between a trained and qualified management
and a cooperative and innovative workforce.
Developed five principles of Scientific
Management:
- Develop a science for every job.
- Select workers with right abilities.
- Provide proper training & incentives.
- Support workers.

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Elton Mayo (1880 1949)
Introduce Hawthorne Effect.
Improvements in productivity or quality resulting from
the fact that workers knew they were being studied or
observed.
When workers are paid attention to, chances are they
will respond positively.
People have different sources of job satisfaction.
Interpersonal relations are required in the job setting.
Style of supervision effects level of productivity.

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 Cont
Four general conclusions were drawn from the
Hawthorne studies:
- The aptitudes of individuals are imperfect
predictors of job performance.
- Informal organization affects productivity.
- Work-group norms affect productivity.
- The workplace is a social system.

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Douglas McGregor (1906 1960)
An American social psychologist, proposed his
famous X-Y theory in his 1960 book 'The Human
Side Of Enterprise'.
Theory X:
- People born disliking work, will avoid if can.
- Most people must be controlled and
threatened before they will work hard
enough.
- The average human prefers to be directed,
dislikes responsibility.
- Only small % community are born leaders,
others are followers.

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 Cont

Theory Y
- Working natural as playing and resting.
- Control and punishment are not the only
ways to make people work.
- If a job is satisfying, then the result will be
commitment to the organization.
- People usually accept and often seek
responsibility.
- People are self-directed.

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 Comments on the theory
McGregor sees these two theories as two quite
separate attitudes. Theory Y is difficult to put into
practice on the shop floor in large mass
production operations, but it can be used initially
in the managing of managers and professionals.
Managers should accept Theory Y.
Not solution for all problems, but framework for
improved management performance.

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Theory Z (William Ouchi)
Theory Z was developed by not by William
Ouchi, in his book 1981 'Theory Z: How American
management can Meet the Japanese Challenge'.
Often referred to as the 'Japanese' management
style.
Advocates a combination of all that's best about
theory Y and modern Japanese management,
which places a large amount of freedom and trust
with workers, and assumes that workers have a
strong loyalty and interest in team-working and
the organisation.

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 Cont
Places more reliance on the attitude and responsibilities
of the workers, whereas Mcgregor's X & Y theory is
mainly focused on management and motivation from the
manager's and organisation's perspective.

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 Theory X
People born disliking work,
will avoid if can.
Most people must be
controlled and threatened
before they will work hard
enough.
The average human
prefers to be directed,
dislikes responsibility.
Only small percentage
communities are born
leaders, others are
followers.
Theory Y
Working natural as playing
and resting.
Control and punishment
are not the only ways to
make people work.
If a job is satisfying, then
the result will be
commitment to the
organization.
People usually accept and
often seek responsibility.
People are self-directed.
Theory Z
Theory Z focused on
increasing employee loyalty
to the company by
providing a job for a life
with a strong focus on the
well-being of the employee.
Theory Z management
tends to promote stable
employment, high
productivity, and high
employee morale and
satisfaction.
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 o Recognize the Importance
Social System of Workers Needs for
ELTON The way workers Social Satisfaction
MAYO treated.
(Hawthorne
o Respond better to Work-
Informal Organisation
Effect) Group Pressure to
Not suitable of job
satisfaction Management Control
Activities.

Theory X:
DOUGLAS Workers need to be FRAMEWORK
MC directed and controlled. o To improve management
GREGOR
(X & Y Theory Y: performance
Theory) Workers are self- o Motivation and
directed Management by Managers

o Develop interpersonal
Blend of Theory X skills
and Y. o Create a sense of family
WILLIAM
OUCHI
Workers have self-
disciplines between everyone
(Z Theory) o Broaden the peoples
Workers requires high
degree of support. career path

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HUMAN RELATION THEORY

 Maslow's hierarchy
of needs (1940-50's )

Self-actualisation
personal growth and fulfilment

Esteem needs
achievement, status, responsibility, reputation

Belongingness and Love needs

family, affection, relationships, work group, etc

Safety needs
protection, security, order, law, limits, stability, etc

Biological and Physiological needs

basic life needs - air, food, drink, shelter, warmth, sex, sleep, etc.

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 Maslow's hierarchy
of needs (1940-50's )

Each of us is motivated by needs. Our most basic

needs are inborn, having evolved over tens of
thousands of years.
Maslow's Hierarchy of Needs states that we
must satisfy each need in turn, starting with the
first, which deals with the most obvious needs for
survival itself.

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 Cont
Only when the lower order needs of physical and
emotional well-being are satisfied are we concerned with
the higher order needs of influence and personal
development.
Conversely, if the things that satisfy our lower order
needs are swept away, we are no longer concerned
about the maintenance of our higher order needs.

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 Management Key Concepts
Organisation : People working together and
coordinates their actions to achieve specific goals.
Goals : A desire future condition that the
organisation seeks to achieve.
Management : The process of using the
organisation resources to achieve the
organisations goals by
Planning, organising, leading and controlling

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