The Evolution/History of

Management Theory
1

Evolution of Management
2

Management as a practice

Since men worked in groups (guilds)

Ancient massive construction projects
Egyptian pyramids
Great Wall of China

In India, evidences can be found in Arthashastra

Management as a field of knowledge

Industrial revolution (early 1800s)

Machine power began to substitute for human power

Lead to mass production of economical goods
Improved and less costly transportation systems became available
Created larger markets for goods
Larger organizations developed to serve larger markets
Created the need for formalized management practices

The Evolution of Management Theory

Andrew Ure was one of
the worlds first
professors to teach
management principles
at Andersons College in
Glasgow.

Evolution of Management
4

Pre-classical contributors

Robert Owen (1771-1858): advocated for living and working

conditions of workers, age for child labour, reduced hours, and
supplied meals

Charles Babbage (1792-1871): advanced technology, use of

Science and Maths to run the factories better. Work specialization
and profit sharing

Henry R. Towne (1844-1924): management as a science and need

for development of management principles

Contributions:
Efforts were fragmentary
Applied their efforts towards developing specific techniques or
solutions
Laid the groundwork for major management theories which
came later
First introductory
management textbook
(Principles of Management,
by George Terry) was
published in 1953.

Classical Approaches
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1. SCIENTIFIC MANAGEMENT

The systematic study of the relationships between people and tasks for the
purpose of redesigning the work process for higher efficiency.
Fredrick W. Taylor, The Gilbreths, Henry Laurence Gantt
2. ADMINISTRATIVE MANAGEMENT

The study of how to create an organizational structure that leads to high

efficiency and effectiveness.
Henry Fayol, Max Weber, Chester Barnard, Herbert Simon

Scientific Management
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Frederick Winslow Taylor (1856-1915)

Father of scientific management
Wrote a book Principles of scientific management in 1911
Observed prevalence of soldiering

Hence, advocated systematic study of the relationships between

people and tasks to redesign the work for higher efficiency.

Principles of scientific management:

1.

2.
3.
4.

Scientifically study each part of the job and develop best method
Scientifically select and train workers
Cooperate with workers to ensure that they use the proper
method
Divide work and responsibility among management and workers

Taylors Scientific Management has Five basic

features:
1.

2.
3.
4.
5.

Organizational and technical improvements such as better

machine operations, cost accounting, purchasing, and stock
and tool room control
A planning department for coordination of overall
operations and assignment of jobs
The use of Functional foremen who were responsible for a
single functional activity within the manufacturing process
Time study to determine the rate at which a job should be
done
An incentive wage system

Scientific Management in Practice

9

Bethlehem Steel Plant

With proper modification of
movements, tools and
sequencing, productivity/person
improved from 12.5 tons to 47.5
tons; incentive schemes brought
wage hike from $ 1.15 to $ 1.85.
Ford Motors
Henry Ford introduced the
assembly line in the manufacture
of his Model T Ford in 1913.

Scientific Management (Contd)

10

Frank (1868-1924) and Lillian Gilbreth (1878-1972)

Refined Taylors methods

Bricklaying efficiency improvements

Time and motion studies (therbligs) to reduce unnecessary movements

in work (identified 17 basic hand motions)
Break down each action into components.

Find better ways to perform it.

Reorganize each action to be more efficient.

Also studied fatigue problems, lighting, heating and other worker issues.

Lillian Gilbreth First lady of management

Lillian published Psychology of Management

Wrote a book Cheaper by the Dozen

Scientific Management in Practice

11

http://fullcomment.nationalpost.com/2012/10/26/a

lexandra-lange-on-lillian-gilbreth-the-woman-whoinvented-the-kitchen/
Lillians contribution - The Kitchen Work Triangle

Scientific Management (Contd)

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Henry L. Gantt (1861-1919)

Gantt Chart a graphic aid to planning,

scheduling and control

Pay incentives (bonus for completing work in

less time) for workers and supervisors

Gantt Chart helps display the results of the

time management activities:

Activity Definition: identifies activities which

the group members need to complete; estimated
completion time, expected costs and resources
needed

Activity Sequencing: which order the

activities need to be completed in

Activity Duration Estimating: making an

educated guess as to how long each activity will
take

Schedule Development: create a schedules of

deliverables, as to what documents are due at what
time

Assignment
13

Gantt Chart
Discuss with your own group and create a Gantt

Chart to map out your group project that is due at

the end of the semester
https://www.youtube.com/watch?v=TjxL_hQn5w0
Share your work me and with the class

14

Relevance???

Efficiency is exploitation: The studies and

techniques developed by Taylor and Gilbreth
simply enabled employers to get more work
out of their employees.

Criticism to Scientific management

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Managers often implemented only the increased

output side of Taylors plan.

They did not allow workers to share in increased output.

Specialized jobs became very boring, dull,

monotonous.

Workers ended up distrusting Scientific Management.

Workers could purposely under-perform

Management responded with increased use of machines.
Read some of the debates between Upton Sinclair and Taylor

Administrative Management
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Henri Fayol (1841-1925)

Father of modern
management
Wrote Administration
Industrielle et Generale
Five managerial functions
(Foresight/Planning,
Organization, Command,
Coordination, Control)
14 General principles of
management

Success of an
enterprise largely
depends on the
administrative
ability of its leaders
as opposed to their
technical abilities

Fayols Fourteen Principles of Management

Division of work

Centralization

Authority and

Scalar chain

Responsibility

Discipline

Unity of command
Unity of direction
Subordination of the

individual interests to
the general interest

Remuneration

Order
Equity
Stability of tenure of

personnel
Initiative
Esprit de corps (Spirit

of Teamwork)

Contd
18

1.

2.

3.

4.
5.

Division of work: This principle is the same as Adam Smith's

'division of labour'. Specialisation increases output by making
employees more efficient.
Authority: Managers must be able to give orders. Authority
gives them this right. Note that responsibility arises wherever
authority is exercised.
Discipline: Employees must obey and respect the rules that
govern the organisation. Good discipline is the result of effective
leadership, a clear understanding between management and
workers regarding the organisation's rules, and the judicious use
of penalties for infractions of the rules.
Unity of command: Every employee should receive orders from
only one superior.
Unity of direction: There should be a common goal or purpose
towards which everyone should work.

Contd
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Subordination of individual interests to the general

interest: The interests of any one employee or group of
employees should not take precedence over the interests of the
organisation as a whole.
7. Remuneration: Workers must be paid a fair wage for their
services.
8. Centralisation: Centralisation refers to the degree to which
subordinates are involved in decision making. Whether decision
making is centralised (to management) or decentralised (to
subordinates) is a question of proper proportion. The task is to
find the optimum degree of centralisation for each situation.
9. Scalar chain: The line of authority from top management to
the lowest ranks represents the scalar chain. Communications
should follow this chain. However, if following the chain creates
delays, cross-communications can be allowed if agreed to by all
parties and superiors are kept informed.
6.

Contd
20

10. Order: People and materials should be in the right

11.
12.

13.
14.

place at the right time.

Equity: Managers should be kind and fair to their
subordinates.
Stability of tenure of personnel: High employee
turnover is inefficient. Management should provide
orderly personnel planning and ensure that
replacements are available to fill vacancies.
Initiative: Employees who are allowed to originate
and carry out plans will exert high levels of effort.
Esprit de corps: Promoting team spirit will build
harmony and unity within the organisation.

Administrative Management
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Max Weber (1864-1920)

Characteristics of an ideal
bureaucracy
1.
2.
3.
4.
5.
6.

Specialization/ Division of labor

Well-defined hierarchy
Formal selection
Career advancement based on merit
Formal rules and procedures
Impersonality

Bureaucracy is
required to avoid
nepotism and to
improve
rationality and
objectivity

Contributions and Limitations of Classical

Management
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Contributions:

Limitations:

(1)

Laid the foundation for management theory

(2)

Identified key processes, functions, and skills of

managers that are still important today

(3)

Made management a valid subject of scientific inquiry

(1)

Best used in simple, stable organizations

(2)

Provided universal procedures that are not appropriate

in all settings
Most viewed employees as tools rather than as
resources

(3)

Behavioral Science Approach

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The study of how managers should behave

to motivate employees and encourage them
to perform at high levels and be committed
to the achievement of organizational goals.
Focuses on the way a manager should
personally manage to motivate employees.

Behavioral Science Approach

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Hugo Munsterberg (1863-1916)

Father of Industrial Psychology
Scientific study of individuals at work to maximize their
productivity and adjustment
Published Psychology and Industrial Efficiency in 1913
Most of today's selection techniques, employee training, job
design and motivation are based on his work
Psychologists could help industry in 3 major ways
Ensuring person-job fit
Identifying best suitable conditions for work
Influencing employees behavior to comply to management
interests

25

Mary Parker Follett (1868-1933)

Recognized that organizations could be viewed from the
perspective of individual and group behavior.
The worker knows the best way to improve the job.
If workers have the knowledge of the task, then they should
control the task.
Team dynamics and self-managing teams
Managers job is to harmonize and coordinate group efforts
Power as a cooperative concept (Constructive conflict)

Bridged classical and human

resource viewpoints.
The Functions of the
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Executive in 1938

Chester I Barnard (1886-1961)

Acceptance of Authority: Each individual possesses a
zone of indifference within which the individual is willing to
accept orders and directions without much question.
Make sure that the order to show up to work on time is all about
organizational goals and productivity, rather than asking people what
they do with their personal time.
Make each employees zone of indifference wider

Induce cooperation through incentives (monetary and

recognition), clearly formulated organizational objectives, and
effective communication.
Relevance?
Current interest in building co-operative workgroups, social
responsibility can be traced back to his ideas.

27

Hawthorne Studies (Elton Mayo, Rothelisberger etc.)

Group of studies conducted at the Hawthorne Works plant of the Western

Electric Company during 1924-1932 that provided new insights into group
norms and behaviors

Changed the prevalent view of the time that people were no different than
machines.

First set of studies (1924-27): illumination studies

Worker productivity was measured at various levels of light illumination.

Researchers found that regardless of whether the light levels were raised or lowered, productivity rose.
Actually, it appears that the workers enjoyed the attention they received as part of the study and were more
productive.

Second set of studies (1927-1933): relay assembly test room study

Giving breaks, shortening working hour, giving food

Working in groups, feeling special boosted the productivity

Third set of studies (1931-1932): bank wiring observation room study

To find out how payment incentives (individual vs. group wage plans) would affect productivity

Workers were more responsive to the social force of their peer groups
http://www.youtube.com/watch?v=W7RHjwmVGhs

28

Role of social aspects on productivity : It was the social

situations of the workers, not just the working conditions,
that influenced behavior at work.
The experiments, procedures were highly criticized

Relevance??

Current organizational practices that owe their roots to

the Hawthorne studies include attitude surveys,
employee counseling, management training,
participative decision making, team based
compensation systems

29

Human Relations Movement

Idea surfaced in early 20th Century
Focused on the notion that work was done by people
Based on a belief in the importance of employee satisfactiona
satisfied worker was believed to be a productive worker.
Need to focus on human element
Dale Carnege (1888-1955): How to win friends and influence
people (1936)
Abraham Maslow (1908-1970): Hierarchy of needs theory
Douglas McGregor (1906-1964): Theory X and Theory Y

Common thread was optimism about peoples capabilities

30

Douglas McGregor proposed the two different sets of

worker assumptions.

Theory X
Assumes the average worker is
lazy, dislikes work and will do
as little as possible.
Managers must closely
supervise and control
through reward and
punishment.

Theory Y
Assumes workers are not lazy,
want to do a good job and the
job itself will determine if the
worker likes the work.
Managers should allow the
worker great latitude, and
create an organization to
stimulate the worker.

Management Science Approach

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An approach to management that uses

rigorous quantitative techniques to
maximize the use of organizational
resources.

Management Science/ The Quantitative Approach

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Evolved out of the development of mathematical and

statistical solutions to military problems during World

War II.
Uses rigorous quantitative techniques to maximize
resources.

Quantitative management: utilizes linear programming, modeling,

simulation systems.
Operations management: techniques to analyze all aspects of the
production system.
Total Quality Management (TQM): focuses on improved quality.
Management Information Systems (MIS): provides information
about the organization.

Organizational Environment
Theory
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The set of forces and conditions that operate

beyond an organizations boundaries but affect a
managers ability to acquire and utilize resources.

34

Systems Approach: views organizations as systems.

System A set of interrelated and interdependent parts arranged in a manner that
produces a unified whole
Open and closed systems
Open system
A system that takes resources for its external environment and converts them into goods
and services that are then sent back to that environment for purchase by customers.
Inputs: the acquisition of external resources.
Conversion: the processing of inputs into goods and services.
Output: the release of finished goods into the environment.
Closed system
A system that is self-contained and thus not affected by changes occurring in its external
environment.
Often undergoes entropy and loses its ability to control itself, and fails.
Synergy
Performance that results when individuals and departments coordinate their actions

Performance gains of the whole surpass the sum of the performance of the individual
components.

The Organization as an Open System

36

Contingency Approach
The organization and how its managers should manage it are contingent on

the companys environment and on technology

Assumes there is no one best way to manage.

The environment impacts the organization and managers must be flexible to react to
environmental changes.
The way the organization is designed, control systems selected, depend on the environment.

Four popular contingency variables

Organization size
Routineness of task technology
Environmental uncertainty
Individual differences

Tom Burns and G. M. Stalker

Mechanistic Organizations: Authority is centralized at the top (Theory X)

Employees closely monitored and managed.

Very efficient in a stable environment.

Organic Organizations: Authority is decentralized throughout employees. (Theory Y)

Much looser control than mechanistic.

Managers can react quickly to changing environment.

37

Management theory jungle (Harold Koontz)

The diversity of approaches to the study of management
functions, quantitative emphasis, human relations
approacheseach offer something to management theory, but
many are only managerial tools.

Planning, leading, and controlling activities are

circular and continuous functions of management.

So, broadly three integrative
frameworks/approaches to understand Management

Process
Systems
Contingency