THE PRE-MODERN ERA

 Ancient massive construction projects

 Egyptianpyramids
 Great Wall of China
ADAM SMITH’S CONTRIBUTION TO THE FIELD
OF MANAGEMENT
 Wrote the Wealth of Nations (1776)
 Advocated the economic advantages that
organizations and society would reap from the
division of labor:
 Increased productivity by increasing each worker’s
skill and dexterity.
 Time saved that is commonly lost in changing tasks.

 The creation of labor-saving inventions and

machinery.
THE INDUSTRIAL REVOLUTION’S INFLUENCE
ON MANAGEMENT PRACTICES

 Industrial revolution
 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.
 Largerorganizations developed to serve larger
markets
 Createdthe need for formalized management
practices.
CLASSICAL CONTRIBUTIONS

 Classical approach
 The term used to describe the hypotheses of the
scientific management theorists and the general
administrative theorists.
 Scientific management theorists
 Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry Gantt
 General administrative theorists
 Henri Fayol and Max Weber
SCIENTIFIC MANAGEMENT

 Frederick W. Taylor
 The Principles of Scientific Management (1911)
 Advocatedthe use of the scientific method to define the
“one best way” for a job to be done
 Believed that increased efficiency could be
achieved by selecting the right people for the job
and training them to do it precisely in the one best
way.
 To motivate workers, he favored incentive wage
plans.
 Separated managerial work from operative work.
 TAYLOR’S PRINCIPLES OF SCIENTIFIC MANAGEMENT

 Develop a science for each element of an individual’s work, which replaces

the old rule-of-thumb method.
 Scientifically select and then train, teach, and develop the worker.
(Previously, workers chose their own work and trained themselves as best
they could.)
 Heartily cooperate with the workers so as to ensure that all work is done in
accordance with the principles of the science that has been developed.
 Divide work and responsibility almost equally between management and
workers. Management takes over all work for which it is better fitted than
the workers. (Previously, almost all the work and the greater part of the
responsibility were thrown upon the workers).
SCIENTIFIC MANAGEMENT CONTRIBUTORS

 Frank and Lillian Gilbreth

 Bricklaying
efficiency improvements
 Time and motion studies

 Henry Gantt
 Incentivecompensation systems
 Gantt chart for scheduling work operations
ADMINISTRATIVE MANAGEMENT

 General administrative theorists

 Writerswho developed general theories of what
managers do and what constitutes good
management practice
 Henri Fayol (France)
 Fourteen Principles of Management: Fundamental or
universal principles of management practice
 Max Weber (Germany)
 Bureaucracy: Ideal type of organization characterized by
division of labor, a clearly defined hierarchy, detailed
rules and regulations, and impersonal relationships
Henri Fayol
(1841 - 1925)
 Henri Fayol’s Background

* Graduated from the National School of Mines in Saint

Etrenne in 1860
* After graduation he went to work and spent his entire
career at Commentry-Fourchamboult-Decazeville. He was
named managing director in 1888 and maintained that
position until he retired in 1918.
* He is credited with saving the company from bankruptcy
* During his career he lectured at Ecole Superievre de la
Guerre, France
* In his retirement he established the Center of
Administrative Studies
Fayol’s Big Contributions to Management

1) Universality of management: The same skills

are needed to manage a coal mine that are needed to
manage a hospital, post office, university, etc..

2) Management is a field in and of itself: There

were no schools of management prior to Henri Fayol!!!
Fayol’s Principles of Management

Division of Labor Fayol Encouraged job specialization

while realizing that without focus, leads to boredom and
falling production

Authority & Responsibility This is more than giving

and having orders followed. Fayol thought that authority
should derive from expertise, leadership skill, knowledge,
etc., and lead to a sincere commitment from subordinates
Fayol’s Principles of Management

Unity of Command Orders should be received from

only one person.

Line of Authority There should be a chain of

command from the very top to the very bottom of
the organization. Fayol realized that there should be
as few layers of management as possible
Fayol’s Principles of Management
Centralization : Fayol defined centralization as
lowering the importance of the subordinate role.
Decentralization is increasing the importance. The degree
to which centralization or decentralization should be
adopted depends on the specific organization in which the
manager is working.

Unity of Direction Today we would call this

singleness of purpose
Initiative Employees should be able to act on their
own which spurs creativity and innovation
 Fayol’s Principles of Management

Equity employees should be treated fairly.

For personnel to be encouraged to carry out their

duties with all the devotion and loyalty of which they
are capable, they must be treated with respect for their
own sense of integrity, and equality results from the
combination of respect and justice

Order The arrangement of positions in the organization

should maximize efficiency and provide employees with career
opportunities
 Fayol’s Principles of Management

Discipline Managers need to enforce rules to

achieve company goals.

Remuneration of Personnel Fayol was an early supporter

of bonuses and profit sharing plans

Stability and tenure of employees Long-term

employees lead to better producing companies.
Fayol’s Principles of Management

Subordination of Individual Interests to the

common interest Employees need to understand
how their performance affects the entire organization

Esprit de Corp Managers should develop a shared

feeling of devotion to a common cause
Fayol’s Functions of Management

PLANNING

CONTROLLING ORGANIZING

LEADING
FAYOL’S QUALITIES OF EFFECTIVE PLANS

 UNITY At any one time an  CONTINUITY Planning is

organization should have only an ongoing process and
one guiding organizational previous plans should be
goal modified to fit together in the
corporate framework

 ACCURACY Managers  FLEXIBILITY A manager

should collect and utilize all should not be stuck with a
available information to make static plan, but be able to
a plan as accurate as possible change and alter as situations
do.
 FAYOL’S FOURTEEN PRINCIPLES OF MANAGEMENT

 Division of work  Centralization

 Authority  Scalar chain
 Discipline  Order
 Unity of command  Equity
 Unity of direction  Stability of tenure of
personnel
 Subordination of the
individual  Initiative
 Remuneration  Esprit de corps
WEBER’S IDEAL BUREAUCRACY

 Division of Labor
 Authority Hierarchy

 Formal Selection

 Formal Rules and Regulations

 Career Orientation
HUMAN RESOURCES APPROACH

 Robert Owen
 Claimed that a concern for employees was
profitable for management and would relieve
human misery.
 Hugo Munsterberg
 Created the field of industrial psychology—the
scientific study of individuals at work to maximize
their productivity and adjustment.
HUMAN RESOURCES APPROACH

 Mary Parker Follett

 Recognized that organizations could be viewed
from the perspective of individual and group
behavior.
 Chester Barnard
 Expressed his views in his book The Functions of the
Executive (1938).
 Saw organizations as social systems that require
human cooperation.
HUMAN RELATIONS MOVEMENT

 Based on a belief in the importance of

employee satisfaction—a satisfied worker was
believed to be a productive worker.
 Advocates were concerned with making
management practices more humane.
 DaleCarnegie
 Abraham Maslow

 Douglas McGregor
THE QUANTITATIVE APPROACH

 Operations research (management science)

 Evolved out of the development of mathematical
and statistical solutions to military problems during
World War II.
 Involves the use of statistics, optimization models,
information models, and computer simulations to
improve management decision making for planning
and control.
THE PROCESS APPROACH

 Management theory jungle (Harold Koontz)

 The diversity of approaches to the study of
management—functions, quantitative emphasis,
human relations approaches—each offer something
to management theory, but many are only
managerial tools.
 Planning, leading, and controlling activities are
circular and continuous functions of
management.
THE SYSTEMS APPROACH

 Defines a system as a set of interrelated and

interdependent parts arranged in a manner
that produces a unified whole
 Closed system : a system that is not influenced by
and does not interact with its environment
 Open system: a system that dynamically interacts
with its environment
 Stakeholders: any group that is affected by
organizational decisions and policies
THE ORGANIZATION AND
ITS ENVIRONMENT
THE CONTINGENCY APPROACH

 The situational approach to management that

replaces more simplistic systems and
integrates much of management theory
 Four popular contingency variables
 Organization size
 Routineness of task technology

 Environmental uncertainty

 Individual differences