Evolution of Management Thought

The Importance of Theory and History

Why History?
An awareness and understanding of important historical developments in management are also important to contemporary managers in furthering the development of management practices and in avoiding the mistakes of others in the past.

The Historical Context of Management

Management Through the Ages
D Greeks
C Babylonians B Egyptians A Sumerians
3000 B.C. 2500 B.C. 2000 B.C.

G Venetians E Romans F Chinese

1500 B.C. 1000 B.C. 500 B.C. A.D.500 A.D.1000 A.D.1500

A Used written rules and regulations for governance B Used management practices to construct pyramids C Used extensive set of laws and policies for governance D Used different governing systems for cities and state

E Used organized structure for communication and control F Used extensive organization structure for government agencies and the arts G Used organization design and planning concepts to control the seas

Time Line of Management Thought

Classical Management Theory

Classical Management Theory
A theory that focused on finding the one best way to perform and manage tasks

Classical Management Theory

Classical Scientific School
Focused on the manufacturing environment

Classical Administrative School

Classical Bureaucratic School

Emphasized the flow of information and how organizations should operate

Emphasized on rules, systems and procedures

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Classical Scientific School

Scientific Management Frederick W. Taylor

The father of Scientific Management the 1st Efficiency Expert.

A philosophy and set of management practices that are based on fact and observation, not on guesswork

Classical Scientific School

Frederick W. Taylor
Techniques Scientific task planning- Min. time reqd. to do a job

Time and Motion studies- Time, Motion and Fatigue Standardisation- Set standards for the task, materials, work methods, quality, time and cost. Differential piece wage plan Functional foremanships- Plan the work for employees and help for results
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Frederick W. Taylor

Key Principles:
1. Science not rule of thumb- What, how, when, where and by whom (replacement of odd rule of thumb by the use of method of enquiry, investigation, data collection, analysis and framing of rules) 2. Harmony not discord 3. Co-operation not individualism 4. Maximum output in place of restricted output 5. Development of each man to his greatest efficiency and prosperity 6. Equitable division of work and responsibility between management and labour.

Classical Scientific School Frank and Lillian Gilbreth

refined Taylors methods and suggested Conservation and Saving 1. Breaking down each action into individual components. 2. Find better ways to perform the action. 3. Reorganize each action to be more efficient. 4. Protecting workers from unsafe working conditions.

How to increase workers efficiency?

The essential difference between the best system of today and those of the past are the manner in which the tasks are scheduled, and the manner in which their performance is rewarded Scheduling Innovation
Gantt Chart scheduling summary of work

Henry L. Gantt

Rewarding Innovation
Bonus in addition to the piece rate if they exceeded their daily production quota On time = Bonus, Good Performance = Reward

Problems associated with Scientific Management

Managers often gave attention only to increasing output They did not allow workers to share in the benefits of increased output. Specialized jobs became very boring & dull. Workers ended up distrusting Scientific Management.

Classical Administrative School

Henri Fayol

Believed specific management skills could be learned and taught

Fayols universal management functions: Planning Organizing Leading Controlling

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Principles of Management Henri Fayol (1841-1925)

Management principles are statements of fundamental truth. These principles serve as guidelines for decisions and actions of managers. His 14 principles are:

1. Division of Work Specialize in specific tasks 2. Authority and responsibility Right to give orders and to expect obedience 3. Discipline Obey & respect rules. 4. Unity of command Orders from only one superior 5. Unity of direction One manager one plan 6. Subordination of individual interests to the common interest Workers need to understand how their behavior affects the performance of the organization 7. Remuneration of personnel an equitable system of rewarding employees

8. Order arranging jobs to permit efficiency 9. Centralization The concentration of authority at the top and decreasing the role of sub. In DM. 10. Scalar Chain Chain of authority from top to bottom through all communications flow. 11. Equity Fair in treatment. 12. Initiative allowing workers to be creative and innovative in their work 13. Stability of tenure of personnel the need to keep employees for a long time to take advantage of their skills and knowledge 14. Esprit de corps Union is Strength

Classical Bureaucratic School Max Weber (1864-1920): Principles of Bureaucracy

Hierarchy Way of ranking positions in descending order Division of Work- Dividing total work in to specialised task Rules, Regulations and Procedures Records Impersonal Relationships- Employees are evaluated according to rules and objective data No room for personal emotions Rationalitythe use of the most efficient means available to accomplish a goal
The Theory of Bureaucracy: Max Weber a formal system of organization designed to ensure efficiency and effectiveness.

Potential Benefits of Bureaucracy

Efficiency Consistency Functions best when routine tasks are performed Performance based on objective criteria

Behavioral Management Theory

Behavioral School/Neo-Classical
Recognized employees as individuals with concrete, human needs, as parts of work groups, and as members of a larger society and emphasized on psychology, human sentiments and social values

1.Human relation/Hawthorne studies 2.Behavioral approach

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Human RelationsTheory
Hawthorne Experiments-Elton Mayo and Others
The Hawthorne Studies
Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.
Observation of two groups of employees making telephone relays to determine the levels of illumination Working conditions and productivity Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased. The Bank Wiring Observation Room Experiment Analyzed the group influence and social relationships in a work group

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Lessons from the Hawthrone Studies Behavioral Viewpoint

Employees are motivated by social needs and association with others Employees performance is more a result of peer pressure than managements incentives and rules
Managers need to involve Managers need to involve subordinates in coordinating their subordinates in coordinating their work to improve efficiency. work to improve efficiency.

Employees want to participate in decisions that affect them. Special attention causes people to increase their efforts(Known as Hawthorne effect)

Happy employees are productive Happy employees are productive workers workers

Human RelationsTheory
Theory X and Theory Y: Douglas McGregor

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Quantitative Management Theory

The use of quantitative techniques to maximize use of resources (Operations Management, Total Quality Management (TQM), and Management Information Systems (MIS) Mathematical approaches to management problems Developed during World War II Mathematical models are used to simulate changes Computers are essential Applied to every aspect of business

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 Operations management techniques used to analyze all aspects of the production system Total Quality Management (TQM) focuses on analyzing input, conversion, and output activities to increase product quality Management Information Systems (MIS) It focuses on designing and implementing computer based information systems

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Systems Management Theory

Systems School
It tries to solve problems by diagnosing them within a framework of inputs, transformation processes, outputs and feedback.

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The Organization as a System

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Contingency Management Theory

Contingency School
It argues that appropriate managerial action depends on the particular parameters of the situation.

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Quality Management Theory

Quality School
The essence of the quality of any output is its ability to meet the needs of the person or group

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