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Chapter 2 Management History

The document provides an overview of the history of management theories from early approaches like scientific management and general administrative theory developed in the 1900s to more modern quantitative, behavioral, systems, and contingency approaches. It discusses the key contributors and principles of each approach and how they shaped modern management practices like analyzing work tasks, using incentives, and understanding human behavior in organizations. The different approaches emphasized important aspects of management over time based on changing economic and social conditions.

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Christian Sawaya
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32 views5 pages

Chapter 2 Management History

The document provides an overview of the history of management theories from early approaches like scientific management and general administrative theory developed in the 1900s to more modern quantitative, behavioral, systems, and contingency approaches. It discusses the key contributors and principles of each approach and how they shaped modern management practices like analyzing work tasks, using incentives, and understanding human behavior in organizations. The different approaches emphasized important aspects of management over time based on changing economic and social conditions.

Uploaded by

Christian Sawaya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 2: Management History

Wednesday, 04 September, 2019


1:37 PM

Management = Planning + Organizing + Leading + Controlling

Early Management

In 1776 Adam Smith argued that Job Specification or Division of Labor increased
productivity by saving time lost in changing tasks. This division of labor is still found
nowadays in surgical operations, food industry.

After that, in the Industrial Revolution, it became more economically beneficial to


manufacture goods at a plant rather at home. However, at that plant they needed
someone to forecast demand, ensure that material was on hand to make products,
assign tasks to people. This someone was the manager.

However, the theoretical guidance for these managers was not available until the
early 1900s.

This theoretical guidance is referred to as major approaches to management


theory, which are four:
• Classical Approaches
• Quantitative Approaches
• Behavioral Approaches
• Contemporary Approaches

Note that each approach emphasis on management guidance from a certain


perspective with respect to what was important at that time.

Classical Approach

The date of birth of modern management theory is 1911.

The first studies of management are referred to as the classical approach.


Two theories comprise the classical approach: scientific management theory and
general administrative theory

Scientific Management Theory.


Frederic Taylor and the Gilbreth couple mainly contributed to the Scientific
Management Theory.
This theory is based on the idea to find "one best way" for a certain job to be done.
The principles of this theory stress about:
• Developing a science for each element of work instead of the rule of thumb
• Select, train and develop each worker scientifically
• Cooperate with the work ensuring that work is done in accordance with the
theory
• Divide work and responsibility equally among workers and management
(managers do all the work that workers cannot do).

Gilbreth couple:
• Time-motion study
• Optimize worker productivity by reducing wasted motions, using the micro
chronometer that identifies unwanted motions
• Hire the most qualified for a job, and increase productivity by incentives
(bonus)

We can recognize the impact of the scientific management theory on our current
management world when managers analyze scientifically the work tasks, use time
and motion studies to eliminate waste of both, hire the best qualified worker for a
certain job, design incentive systems for workers based on outputs.

General Administrative Theory

Henri Fayol is the first to represent management field as something separate from
other business functions (accounting, finance,…)
Fayol, at the same time as Taylor, wrote the 14 principles of management, which in
his opinion can be applied to all kind of organizations
• Division of work: Specialization increases output by increasing workers'
efficiency
• Authority: Managers should be able to give orders
• Discipline: Employees should respect and obey the organization's rules and
follow superior's orders
• Unity of command: Every employee should receive orders from one superior
• Unity of direction: The whole organization should follow a single plan that
guides managers and employees.
• Subordination of individual interest to general interest
7. Enumeration: Every worker should receive a fair wage and salary for his or her
work
8. Centralization: A term that refers to the degree to which subordinates are
involved in the decision making process
9. Scalar chain: The line of authority from top managements to the lowest ranks.
10. Order: People and materials should be at the right time in the right place
11. Equity: Managers should treat workers in a kind and fair way
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corps.

In addition, also in the early 1900s German sociologist Weber (VAY-ber) developed
an ideal type of organization structure which he called bureaucracy characterized
by:
Division of labor, clearly defined hierarchy, impersonal relationships, and detailed
rules and regulations.

Nowadays, the traces of general administrative theory can be sensed in


organizations:
The functional view of manager's job can be attributed to Fayol. The 14 principles
are used as a frame of guidance for many businesses. Although Weber bureaucracy
can be criticized for its limitation for employee creativity and lack of responsiveness
in dynamic environments, some of the bureaucratical behaviors are still necessary in
today's organization to ensure effective and efficient applications of resources in a
firm.

Quantitative Approach (Management Science)

The quantitative approach is the application of quantitative techniques to improve


decision making.

This quantitative approach uses statistics, optimization models, computer


simulations.

Total Quality Management (TQM):


Management philosophy devoted to continual improvement and meeting customer
needs and expectations.

TQM uses widely the quantitative approach:


This continual improvement is not feasible without adequate measurements,
which require statistical techniques that measure every critical variable in the
organization's work processes.

Queuing management also uses Quantitative Approach.

Behavioral Approach

Behavioral Approach: Understanding management by looking at organization's


people

Organizational Behavior (OB): The field of study that researches actions (behavior)
of people at work.

Advocates of Behavioral Approach: Robert Owen, Hugo Munsterberg, Mary Follet,


Chester Bernard.

The most important contribution to OB field came from the Hawthorne Studies in
1924.
The researches of this study concluded that social norms, group standards and
security were key determinants of individual work behavior. Money, however, is
less a factor in determining output.

The behavioral approach belief is that people are the most important asset of the
firm and should be managed accordingly.

The behavioral approach has largely shaped our current management actions.
The way managers design jobs, what they work with employees, the way they
communicate all reflect elements of the behavioral approach.

Contemporary Approach
We have two contemporary management approaches:
System Approach and Contingency Approach

Systems Approach: Open System


The system approach looks at organizations as open system made up of
interdependent factors (groups, individuals, suppliers, customers, departments).
Managers always make sure that these parts are working together so the
organization's goals can be achieved.

The system approach also implies that decisions and actions in one organizational
area will affect other areas.
It also implies that organizations are not self-contained, they need to interact with
external environments (government regulations, supply chain, etc.)

Contingency Approach:
The contingency approach implies that all businesses are different in size, goals,
work activities, and they face different situations, requiring different managing
techniques.

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