Dr.

Mathew John
 Chapter 2
The Evolution of Management Theory
 Theory

Coherent group of assumptions put forth to

explain the relationship between two or more
observable facts and to provide a sound basis
for predicting future events.
 Why Study Management Theory

• Stable Focus
• Enable to communicate efficiently
• Keep Learning
Evolution of Management Theory
Adam Smith, 18th century economist, found firms manufactured pins in two ways:

Craft -- each worker did all steps.

Factory -- each worker specialized in one step.

Smith found that the factory method had much higher productivity.

Each worker became very skilled at one, specific task .

Breaking down the total job allowed for the division of labor.
 The Scientific Management School
• Frederick W. Taylor (1856-1915)
introduced scientific management
theory. Taylor is also known as the
father of Scientific Management. It was
called scientific management because
Taylor focused on solving managerial
problems in a scientific way.

• The systematic study of the

relationships between people and tasks
to redesign the work for higher
efficiency.

• Taylor sought to reduce the time a

worker spent on each task by
optimizing the way the task was done.
 Modern management began in the late 19th
century.

• Organizations were seeking ways to better

satisfy customer needs.
• Machinery was changing the way goods were
produced.
• Managers had to increase the efficiency of the
worker-task mix.
 Four Principles to increase efficiency:
1. Study the way the job is performed
now & determine new ways to do
it.
Gather detailed, time and motion
information.
Try different methods to see which is
best .

2. Codify the new method into rules.

Teach to all workers.
3. Select workers whose skills match
the rules set in Step 2.

4. Establish a fair level of performance

and pay for higher performance.
Workers should benefit from higher
output. Differential rate system
.
 Problems of Scientific
Management

• Managers often implemented only the increased

output side of Taylor’s plan.
They did not allow workers to share in
increased output.
• Specialized jobs became very boring, dull.
Workers ended up distrusting Scientific
Management.
• Workers could purposely “under-perform”
Management responded with increased use of
machines.
 Principles of Scientific Management
• Replacing Rule of Thumb with science
• Harmony in Groups
• Co-operation
• Maximum Output
• Development of Workers
• Henry Gantt (1861–1919) was also an associate of Taylor.

• He is probably best known for two key contributions to classical

management theory:

• The Gantt chart and the task and bonus system.

– The Gantt chart is a tool that provides a visual (graphic) representation
of what occurs over the course of a project.

• CPM and PERT is also creative application of the Gantt Chart.

 The Gilbreths

• Frank and Lillian Gilbreth refined Taylor’s methods.

• Made many improvements to time and motion studies.
• Time and motion studies:
1. Break down each action into components.
2. Find better ways to perform it.
3. Reorganize each action to be more efficient.
• Gilbreths also studied fatigue problems, lighting, heating
and other worker issues.
 Classical Organization Theory School
• Henry Fayol, Max Weber, Mary Parker Follett, Chester I
Barnard

• An early attempt, pioneered by Henri Fayol, to

identify the principles and skills that underline
effective management.
• Henri Fayol
1. Division of Work-
Henri believed that segregating work in the workforce amongst the worker will
enhance the quality of the product. Similarly, he also concluded that the division of
work improves the productivity, efficiency, accuracy and speed of the workers. This
principle is appropriate for both the managerial as well as a technical work level.

2. Authority and Responsibility-

These are the two key aspects of management. Authority facilitates the
management to work efficiently, and responsibility makes them responsible for
the work done under their guidance or leadership.

3. Discipline-
Without discipline, nothing can be accomplished. It is the core value for any
project or any management. Good performance and sensible interrelation make
the management job easy and comprehensive. Employees good behaviour also
helps them smoothly build and progress in their professional careers.

4. Unity of Command-
This means an employee should have only one boss and follow his command. If
an employee has to follow more than one boss, there begins a conflict of
interest and can create confusion.
5. Unity of Direction-
Whoever is engaged in the same activity should have a unified goal. This means all the
person working in a company should have one goal and motive which will make the
work easier and achieve the set goal easily.
6. Subordination of Individual Interest-
This indicates a company should work united towards the interest of a company rather
than personal interest. Be subordinate to the purposes of an organization. This refers
to the whole chain of command in a company.
7. Remuneration-
This plays an important role in motivating the workers of a company. Remuneration
can be monetary or non-monetary. However, it should be according to an individual’s
efforts they have made.
8. Centralization-
In any company, the management or any authority responsible for the decision-
making process should be neutral. However, this depends on the size of an
organization. Henri Fayol stressed on the point that there should be a balance
between the hierarchy and division of power.
9. Scalar Chain-
Fayol on this principle highlights that the hierarchy steps should be from the top to the
lowest. This is necessary so that every employee knows their immediate senior also
they should be able to contact any, if needed.
10. Order-
A company should maintain a well-defined work order to have a favourable work
culture. The positive atmosphere in the workplace will boost more positive
productivity.

11. Equity-
All employees should be treated equally and respectfully. It’s the responsibility of a
manager that no employees face discrimination.

12. Stability-
An employee delivers the best if they feel secure in their job. It is the duty of the
management to offer job security to their employees.

13. Initiative-
The management should support and encourage the employees to take initiatives in an
organization. It will help them to increase their interest and make then worth.

14. Esprit de Corps-

It is the responsibility of the management to motivate their employees and be
supportive of each other regularly. Developing trust and mutual understanding will
lead to a positive outcome and work environment.
Bureaucracy theory, primarily associated with the work
of Max Weber, is a framework for understanding the
organization and management of large institutions.
Here’s an overview of its key concepts, principles, and
implications:

Key Concepts
1.Definition of Bureaucracy: Bureaucracy refers to a
formal organizational structure characterized by a clear
hierarchy, a set of rules and procedures, and a division
of labor. It is often seen in government institutions,
corporations, and other large organizations.
 MaxWeber'sContributions:
Weber, a German sociologist, is credited with
formalizing the concept of bureaucracy in the early 20th
century.
He identified bureaucracy as the most efficient way to
organize and manage large groups of people.
 Key Features of Bureaucracy
•Hierarchical Structure: A clear chain of
command where authority and responsibilities are
defined at various levels.
•Rule-Based Governance: Operations are guided
by established rules and procedures to ensure
consistency and predictability.
•Division of Labor: Tasks are divided among
specialized roles, allowing for greater efficiency
and expertise.
•Impersonality: Decisions are made based on
objective criteria rather than personal
relationships, promoting fairness.
•Merit-Based Advancement: Employees are
promoted based on qualifications and performance
rather than favoritism.
Human Relationship Approach
The Hawthorne Experiments, conducted at the
Western Electric Hawthorne Works in the 1924 to
1932 were a series of studies aimed at understanding
the effects of various working conditions on
employee productivity. These experiments are
significant in the fields of industrial psychology and
organizational behavior. Here’s overview of the
experiments and their resultst on workers productivity

Overview of the Hawthorne Experiments

1.Background: Initiated by researchers from Harvard
University, including Elton Mayo, the experiments
aimed to investigate how different factors such as
lighting, rest breaks, and working hours affected worker
productivity.
1.Illumination Studies: (1924-27) The initial
phase focused on changing lighting levels to
observe their impact on worker output.
Surprisingly, productivity improved regardless of
whether lighting was increased or decreased,
suggesting that factors other than physical
conditions influenced performance.
2.Relay Assembly Test Room (1927-28) A group
of female workers was observed under various
conditions, including changes in work hours,
breaks, and incentives. This phase revealed that
social dynamics and group cohesion had a
significant impact on productivity.
Interview Program: (1928- 30) Researchers
conducted extensive interviews with workers to
gain insights into their attitudes and feelings
about work. This highlighted the importance of
employee morale and satisfaction.

Bank wire observation room Experiments :

(1931- 32) Researchers conducted extensive
interviews with workers to gain insights into
finding out social aspect of work orgaisation
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