CHAPTER 2

HISTORICAL BACKGROUND OF
MANAGEMENT
Words for thought:

“Learning the past, makes it easier for

us to understand the present and
visualize the future”
Learning Objectives
 To understand how management theories
develop
 To understand the impact of the environment

to management thinking
 To gain insights into new management

approach
The historical context of management thinking can
be described in the following framework:

The classical approaches

The human resource/behavioral approaches
The quantitative approaches
The contingency approaches
The system approach
The learning organization approach
The Quality Management approach
Early Management Thought
 Early ideas about management strategy
◦ Sun Tzu (770-476 B.C.), The Art of War
 Early ideas about leadership
◦ Nicolò Machiavelli (1469-1527), The Prince
 Early ideas about the design and organization
of work
◦ Adam Smith, The Wealth of Nations
 division of labor
Sun Tzu, Art of War
“Shang Chang Ru Zhan Chang”
“The marketplace is a battlefield”

Sun Tzu, 4th century BC

The Evolution of Management Theory
Contingency Approach

Systems Theory

(Comprehensive Analysis of Management)

Management Approaches
and the Environment
GENERAL
ENVIRONMENT

SOCIAL OPERATING ECONOMIC

ENVIRONMENT
NEW ENTRANTS
SUPPLIER
INTERNAL
ENVIRONMENT

PRODUCTION
TECHNOLOGY
SUBSTITUTES STRUCTURE
POLITICAL INPUTS COMPETITION
TECHNOLOGY

CUSTOMER

LEGAL
The Classical Approach
The classical approach (ca1890) to
management is a management approach that
emphasizes organizational efficiency to
increase organizational success.

Environment in ca1890
•Industrial revolution
•Autocratic management was the norm
•“Science" as a solution to the inefficiencies
and injustices of the period
•Idea of interchangeable parts
The Classical Approach
 Scientific Management
◦ Frederick W. Taylor
◦ Frank and Lillian Gilbreth
◦ Henry Gantt
 Bureaucratic Management
◦ Max Weber
 Administrative Management
◦ Henri Fayol
Scientific Management
 Advocates the use of scientific method to
define the “one best way” to do a job
 Involve a job science (job study) of how a job

was perform to determine the ways to

improve it and find the best possible way to
accomplish the work
Fredrick W. Taylor
 Mechanical engineer who had noticed that the
cause of inefficiency in their company
(Midvale & Bethlehem Steel Company) is the
used of different techniques to do the same
job. Workers did their jobs their own way
without clear and uniform specifications
which leads to loose efficiency and performed
below their own capacities.
Taylor’s Four Principles of Scientific Management

1. Scientifically study each part of a task

and develop the best method of
performing the task.
2. Carefully select workers and train them
to perform the task by using the
scientifically developed method.
3. Cooperate fully with workers to ensure
that they use the proper method.
4. Divide work and responsibility so that
management is responsible for planning
work methods using scientific principles
and workers are responsible for
executing the work accordingly.
Frank & Lilian Gilbreth
 Introduce the concept of motion study which
evaluate and analyze workers’ movement and
motion to eliminate unnecessary and/or
redundant motions.
Bureaucratic Organization
 Rational and efficient form of organization
founded on logic, order and legitimate
authority.
 Advocates applying rules rigidly within an

administrative system to remedy the

prevalent deficiencies of the organization at
that time that people were in the position of
authority not because of their job-related
capabilities but because of their social
standing or privileged status in the society
Key Characteristics of Weber’s Ideal Bureaucracy

 Division(Specialization)
of labor
 Formal rules and procedures
 Formal Selection
 Impersonality
 Well-defined hierarchy
 Career advancement based on merit

(career orientation)
 Jobs broken down into simple,
routine, and well defined tasks
Managers are career professionals, Offices or positions are organized in hierarchy,
not owner of the units they manage with a clear chain of command

Division of Labor

Career Orientation Authority Hierarchy

A bureaucracy
should have

Impersonality Formal Selection

Formal Rules &

Regulations

People selected for jobs based

on technical qualification
Uniform application of rules and
controls, not according to personalities
System of written rules and
standard operating procedures
Administrative Principles
 Advocates documenting and understanding
the experiences of successful manager as
basis to described what good management
practice is.
 Fayol’s 14 Principles of
Administrative Management

1. Division of work 8. Centralization

2. Authority 9. Scalar chain
3. Discipline 10. Order
4. Unity of command 11. Equity
5. Unity of direction 12. Stability and
6. Subordination of tenure
individual interest to
13. Initiative
the general interest
14. Esprit de corps
7. Remuneration

Planning, Organizing, Commanding, Coordinating, Controlling

The Human Resource (Behavioral)
Approach to Management
- The behavioral approach (ca 1910) to
management is a management approach that
emphasizes increasing organizational
success by focusing on human variables
(human needs, work groups and the role of
social factors in the workplace)
within the organization.
 Early Advocates:
· Concerned about deplorable working
conditions
· Proposed idealistic workplace
· Argued that money spent improving
labor was smart investment

· Actual manager who thought

organizations were social systems
that required cooperation
· Believed manager’s job was to
communicate and stimulate
employees’ high levels of effort
· First to argue that organizations were
open systems
· Pioneer in the field of industrial
psychology – scientific study of people at
Robert Owen work
Late 1700s · Suggested using psychological test for
employee selection, learning theory
concepts for employee training and study
of human behavior for employee
motivation

Chester Bernard Early Advocates of Hugo Munsterberg

1930's Behavioral Approach Early 1900s

Mary Parker Follet

Early 1990s

· One of the first to recognize that

organizations could be viewed from
perspective of individual and group behavior
· Proposed people oriented ideas than
scientific management followers
· Thought organizations should be based on
group ethic
Mary Parker Follet
 Advocates that organization should be based
on a group ethic rather than individualism
which means that managers’ job was to
harmonize and coordinate group efforts.
Manager and workers should view themselves
as partners.
Hawthorne Effect:

The discovery that paying special

attention to employees motivates
them to put greater effort into their
jobs.
(from the Hawthorne management studies,
performed from 1924 – 1932 at Western
Electric Company’s plant near Chicago)
Maslow’s Hierarchy of
Needs
Self-Actualization
Implies that managers who
can help his subordinates
satisfy their important need
at work will achieve
productivity

Need for Self Esteem

Need for Social Relations

Need for Security

Physiological Needs
McGregor’s Theory X and Theory Y

 Leaders and managers who hold Theory X

assumptions believe that employees are inherently
lazy and lack ambition.
◦ A negative perspective on human behavior.
 Leaders and managers who hold Theory Y
assumptions believe that most employees do not
dislike work and want to make useful contributions
to the organization.
◦ A positive perspective on human behavior.
Argyris’s Theory of Personality and
Organization
 Belief that managers who treat people
positively and as a responsible adults will
achieve productivity\
 Advice to expand job responsibilities, allow

more task variety and adjust supervisory

styles to allow more participation and
promote better human relations.
The Quantitative (Management)
Science Approach
The management science approach (ca1940)
is a management approach that emphasizes
the use of the scientific method and
quantitative techniques to increase
organizational success.

Environment in ca1940
•Application of OR in solving complex problems in
warfare (WWII)
•Significant technological and tactical breakthroughs
•Interest in manufacturing and selling after WWII
The Contingency Approach

The contingency approach (ca 70’s) to

Management is a management approach that
Emphasizes that what managers do in
practice depends on a given set of
circumstances--a situation.
Environment in ca1970’s”
•Emergence of new companies “Apple”
•Emergence of new products, “IBM PC”
The System Approach
The system approach (ca 50’s-60’s) to
management is a management approach
based on general system theory--the theory
that to understand fully the operation of an
entity, the entity must be viewed as a system.

This requires understanding the

interdependence of its parts.
Environment in ca1950’s to 60’s”
•Growing quality consciousness
•Total Quality Management
The Learning Organization Approach

The learning organization approach to

management is the management approach
based on an organization anticipating
change faster than its counterparts to have
an advantage in the market over its
competitors.

From “The Fifth Discipline” by Peter Senge, 1990

Managerial Approach to Learning
Organization
 Managers must create an environment conducive to
learning
 Managers encourage the exchange or information
among organization members
 Managers promote
◦ systematic problem solving
◦ Experimentation
◦ learning from experiences and past history
◦ learning from experience of others
◦ transferring knowledge rapidly throughout the organization

From “The Fifth Discipline” by Peter Senge, 1990

Building a Learning Organization
 System Thinking
◦ Every organization member understands his or her own job
and how the jobs fit together to provide finals products to
the customer
 Shared vision
◦ All organization members have a common view of the
purpose of the organization and a sincere commitment to
accomplish the purpose
 Challenging of the mental models
◦ Organization members routinely challenge the the way
business is done and the thought processes people use to
solve organizational problems

From “The Fifth Discipline” by Peter Senge, 1990

Building a Learning Organization
 Team learning
◦ Organization members work together, develop solution to
new problems together, and apply the solutions together.
◦ Working as teams rather than than individuals will help the
organization gather collective force to achieve
organizational goals
 Personal mastery
◦ All organization members are committed to gaining a deep
and rich understanding of their work
◦ Such an understanding will help organizations to reach
important challenges that confront them

From “The Fifth Discipline” by Peter Senge, 1990

Learning Organization Approach

System thinking
(Systems Approach)

Personal mastery
(Theory Z/Behavioral)
Building a Shared Vision
Learning (Chaordic Organization)

Organization

Challenging of
Team Learning
Mental models
(Theory Z/Behavioral) (Classical/Management
science)
Quality Management Approach
o focused on consistently meeting customer
requirements and enhancing their
satisfaction. It is aligned with an
organization's purpose and strategic direction
(ISO9001:2015). It is expressed as the
organizational goals and aspirations, policies,
processes, documented information and
resources needed to implement and maintain
it.
1. Give an example of an
organization that you are a part
of.
2. Discuss your function, role and
skills that has an impact to the
organization
3. Current trend/s and issue/s you
or your organization is/are
facing.
4. Solutions made in number 3