Evolution of Management Thought:

Management Assumptions & Implied

Management Strategy

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 “When I want to understand what is
happening today or try to decide on
what will happen tomorrow, I look
back”

Oliver Wendell Holmes Jr.

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Management Theory
 Began with the Industrial Revolution in the late
19th century as:

 Large-scale mechanized manufacturing began to replace

small-scale craft production in the ways in which goods
were produced.

 Social problems developed in the large groups of workers

employed under the factory system

 Managers began to focus on increasing the efficiency of

the worker-task mix
 Early Practices

The Classical Era (late 19th – early 20th

Century)

• Frederick Taylor- Scientific Management

• Henri Fayol – 14 Management Principles
• Max Weber - Bureaucracy

Laid foundation for contemporary

management practices

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Scientific Management - Principles
 Principles to increase efficiency & labor
productivity:
1. Study the ways jobs are currently performed and
determine new ways to do them
 Gather detailed time and motion information
 Try different methods to see which is best

2. Codify the new methods into rules

3. Select workers whose skills match the rules

4. Establish fair levels of performance and pay a

premium for higher performance.
 Workers should benefit from higher output
Scientific Management

Contributions
 Demonstrated the importance of compensation for
performance
 Initiated the careful study of tasks and jobs
 Demonstrated the importance of personnel selection
and training

Criticism
 Did not appreciate the social context of work and
higher needs of workers
 Did not acknowledge variance among individuals
 Tended to regard workers as uninformed and
ignored their ideas and suggestions
Henri Fayol - 14 Principles of Administrative:
For 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
Bureaucracy
 Framework of administrative characteristics that
would make large organisations rational and
efficient

 Mechanism for supervision and control through

clear hierarchy, rules, procedures, high
formalisation, written communication to provide
continuity and organisation memory

 Advantages over organisation forms that were

based on family connections, nepotism, social status
etc.
 Classical Theories
Assumption: Rational-Economic Man
 Man primarily motivated by economic incentives
 Since economic incentives are under organizational control, man is
a passive agent to be manipulated, motivated & controlled by
organization
 Feelings are irrational & to be prevented from interfering in work
 Organisations must be designed to neutralize & control
unpredictable behavior

Implied Management Strategy

Organization is buying services & obedience of employee for
economic rewards
 Emphasis on task performance
 Management’s responsibility for building morale is secondary
 Burden for organizational performance falls on management
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 Human Relations Movement

• Hawthorne Studies (1924)

• Maslow

• McGregor

• Herzberg

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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)
 Assumption: Social Man
 Human is motivated by social needs & obtains sense of identity
through relationships
 Is more responsive to social forces of peer group than incentives
& controls of management
 Responds to the extent supervisor can meet one’s social &
acceptance needs

Implied Managerial Strategy

 Shift in attention from task performance to people’s needs

 From control to building acceptance & sense of belongingness
 Accept work groups as reality & think about group incentives
 Shift in initiative for motivation, from management to worker

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Two trends that grew out of the
humanistic perspective:

1) Systems Theory

2) Contingency View
 Systems Theory

Systems Theory
regards the organization as a
system of interrelated parts
By adopting this perspective
organization is viewed in
two ways
1. A collection of subsystems—
parts making up the whole
system
2. A part of the larger
environment
 Open System
Input Transformational Output
The people, money, Process
information, equipment The products,
The organization’s
and materials services, profits,
capabilities in
required to produce losses, employee
management and
and organization’s satisfaction or
technology that are
goods or services applied to converting discontent, and the
Example: For a jewelry inputs to outputs like that are
designer- money, produced by the
Example: Designer’s organization
artistic talent, gold
management skills
and silver tools,
(planning, organizing, Example: Gold and silver
marketing expertise
leading, controlling) gold rings, bracelets, etc.
and silver smithing tools
and expertise, website for
marketing

Feedback
Information about the reaction of the environment to the outputs
that affect the inputs
Example: Web customers like Africa style designs, dislike imitation Old
English designs
 Open and Closed Systems

Open System Closed System has

continually interacts little interaction with its
environment; it receives
with its environment
very little feedback from
the outside
 Contingency Theory (1970s)

 Emphasizes that what managers do in practice

depends on a given set of circumstances - The
Situation

 There is no one best way to manage

 The environment impacts and managers must be

flexible to react to environmental changes

 In rapidly changing organizational environment,

managers must find ways to respond quickly and
effectively
 Contingency Theory
– Emphasizes that a manager’s approach should
vary according to—that is, be contingent on—
the individual and the environmental situation

– Also sometimes called the situational

approach.

– There is no one universally applicable set of

management principles (rules) by which to
manage organizations.

– Organizations are individually different, face

different situations (contingency variables),
and require different ways of managing.

– No One Best Way

 Assumption: Complex Man
 People are complex & highly variable
 They act differently in different situations
 Capable of learning new attitudes & behavior through
organizational experiences
 Motives change or may be in conflict within an individual

Implied Managerial Strategy

 Manager must be a diagnostician & value spirit of inquiry

 Learn to value difference
 Develop personal flexibility & range of skills necessary to
manage challenge of managerial role
 There are no absolutes

Behavior is contingent upon the Situation

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 Type Z Organization (Ouchi 1981)
Theory Z (80’s) : involved workers are the key to
increase in productivity. It offers ways to manage
(collective decision making, slow evaluation and
promotion, and holistic concern for people) so that

they can work together more effectively

Environment in 1980’s
•Slow American productivity
•Rise of Japanese companies
•Japanese management may offer solutions to this
problem
 Environment in 1990’s
•Start of Internet age

•Highly competitive environment

•Emergence of communications technologies

•Emergence of new work practices (virtual teams,

network organizations)
Environment In the New Millennium

•Information and electronic age

•Information and knowledge readily available to all
•Information speed through Internet
•The future is dominated by our need to understand
systems
•Data Analytics
•Artificial Intelligence
 Implications for Organisations
• Stimulate Innovation & Change
• Cope with “Temporariness”
• Speed and Responsiveness
• Work in Networked Organizations
• Improve People Skills
• Empower People
• Emphasis on Building Culture
• Help Employees Balance Work/Life Conflicts
• Ethical Behavior
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 Organisation Behavior
Multi disciplinary- Built on contributions from:
 Psychology
 Social psychology
 Sociology
 Anthropology
 Political science

Based on 3 fundamental assumptions:

1. Organisations are dynamic

2. No single best way to manage

3. Organisations can be productive while improving QWL of

employees
Levels of Analysis

Individual

Group

Organization