Evolution of Management

Theory

Chapter Two

1
 Why Management Theory?
 Builds a Strong Knowledge Foundation
 Enhances Decision-Making Skills
 Addresses Human Behavior in Organizations
 Encourages Adaptability to Change
 Bridges Theory and Practice
 Promotes Ethical and Sustainable Practices
2
CLASSICAL APPROACHES

3
Classical Management Theories

4
 Classical Management Theory

 focuses on improving efficiency and productivity through a

hierarchical structure, clear rules, and standardized work procedures.
Period: Late 19th to early 20th century.
Main Focus: Efficiency, formalization of roles, and scientific manage-
ment.

2–5
 Cont’d

1. Scientific Management focusing on the management of work

and workers :
2. Administrative Management: addressing issues concerning
how overall organization should be structured
3. Bureaucratic Management: This viewpoint emphasis on
finding ways to manage Work and Organizations more efficiently!

2–6
 Major contributors
Scientific Management:
Frederick Taylor
Frank & Lillian Gilbreth
Henry Gantt (Pay incentives; Gantt chart)
Administrative Management:
Henri Fayol
Luther Halsey Gulick
Mary Parker Follet

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 SCIENTIFIC MANAGEMENT
Mental revolution
Build a body of knowledge
Separate planning and doing
One best way - time & motion studies
Select and train
Reward for performance
Cooperate

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 Classical Viewpoint
1. Scientific Management
Frederick. W. Taylor (1865 - 1915)
Laborer to Chief Engineer (6 Year)
Frederick Taylor was called as the father of Scientific
management. His book The Principles of Scientific management
was published in 1911. Immediately, its contents became widely ac-
cepted by managers throughout the world.
The use of scientific methods to define “one best way” for a job
to be done! Or
An approach focusing on scientific study of work methods to
improve worker’s efficiency

2–9
 Background of That Time
There were no clear concepts of responsibilities to
workers and managers.
No effective work standards existed.
Management decisions were based on hunch and intuition.
Workers were placed on jobs with little or no concern for
matching their abilities and aptitudes with the tasks
required.
Managers and workers considered themselves to be in continual
conflict—any gain by one would be at the expense of the other.

10
 F.W. Taylor and Scientific Management
Scientific management: the systematic study of relationships
between people and tasks for the purpose of redesigning the work
process to increase efficiency
Frederick Taylor (1856-1915) is best known for defining the
techniques of scientific management. Taylor was a
manufacturing manager who eventually became a consultant
and taught other managers how to apply the principles of scientific
management.

11
 Frederick W. Taylor
 Developed Scientific Management
 Laid foundation for the study of management
 Key ideas:
 Standardization of work.
 Selection and training of workers.
 Division of labor.
 Incentives based on performance.

12
 Taylor’s Principles of Management
 The “one best way.”

Management using scientific observation
 Scientific selection of personnel

Put right worker in right job, find limitations,
train
 Financial incentives

Putting right worker in right job not enough

A system of financial incentives is also needed
 Functional foremanship

Division of labor between manager and workers

Manager plans, prepares, inspects

Worker does the actual work

“Functional foremen” , specialized experts, re-
sponsible
for specific aspects of the job 13
 Management Theories
Frank &Lillion Gilbreth
Use of motion pictures to study hand-and-body movements
Time and motion studies Human implications of Scien-
tific Management
Focused on increasing worker productivity through the reduc-
tion of wasted motion
Developed the micro chronometer to time worker motions
and optimize performance

2–14
 Taylor’s Followers
• Henry L. Gant
– Refined production control and cost control
techniques.
– Developed the Gantt chart for work-scheduling of
projects.
– Early advocate of the importance of the human
factor and the importance of customer service over
profits.

15
 General Administrative Theory
• Henri Fayol’s contributions
• He argued that management was an activity common to all
human undertakings in business, in government, and even in the
home. He stated 14 principles of management—fundamental or
universal truths.

16
 Henri Fayol
 First came up with the five basic functions of
management—Planning, Organizing, Staffing, Directing,
Communicating, and Controlling
 First wrote that management is a set of principles which

can be learned.
 Developed Fourteen Principles of Management

17
 Fayol’s 14 Principles:

1. Division of Work —improves efficiency through a

reduction of waste, increased output, and simplification of
job training
2. Authority and Responsibility—authority: the right to give
orders and the power to extract obedience – responsibility:
the obligation to carry out assigned duties
3. Discipline—respect for the rules that govern the
organization

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4. Unity of Command—an employee should receive orders
from one superior only
5. Unity of Direction—grouping of similar activities that are
directed to a single goal under one manager
6. Subordination of Individual Interests to the General Interest
—interests of individuals and groups should not take
precedence over the interests of the organization as a whole.
7. Remuneration of Personnel—payment should be fair and
satisfactory for employees and the organization
8. Centralization—managers retain final responsibility – sub-
ordinates maintain enough responsibility to accomplish
their tasks

19
9. Scalar Chain (Line of Authority)—the chain of command
from the ultimate authority to the lowest
10. Order—people and supplies should be in the right place at
the right time
11. Equity—managers should treat employees fairly and
equally
12. Stability of Tenure of Personnel—managerial practices
that encourage long-term commitment from employees
create a stable workforce and therefore a successful
organization
13. Initiative—employees should be encouraged to develop
and carry out improvement plans
14. Esprit de Corps—managers should foster and maintain
teamwork, team spirit, and a sense of unity among
employees
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 Assessing Administrative Theories

Managers still use many of Fayol’s principles

Overemphasizes the rational behavior of managers

Advantages & disadvantages of bureaucracy

– Benefits: efficiency, consistency
– Costs: rigid, slow, difficult to adapt

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 BUREAUCRATIC ORGANIZATIONS

A systematic approach that looked at the

organizations as a whole is the bureaucratic
organizations approach,
During the late 19th century many business
organizations were still managed on a ‘personal’,
familiy-like basis.
Employees were loyal to a single individual rather
than to the organization or its mission.

22
 Max Weber (1864-1920)
German sociologist
Coined “bureaucracy”: the perfect office
Well defined chain of command
Clear division of work (job descriptions)
Procedures for any situation
Impersonality
Employment and promotion based on
technical
competence.

23
 Weber outlined his ideal bureaucracy
as defined by the following parameters:

A continuous system of authorized jobs maintained

by regulations
Specialization: encompasses a defined “sphere of
competence,” based on its divisions of labor
A stated chain of command of offices: a consistent
organization of supervision based on distinctive lev-
els of authority

24
 Rules: an all encompassing system of directives
which govern behavior: rules may require training to
comprehend and manage
Impersonality: no partiality, either for or against,
clients, workers, or administrators
Free selection of appointed officials: equal
opportunity based on education and professional
qualification

25
Common Criticisms of Classical Organizational
Theory
Classical principles of formal organization may lead to a
work environment in which:

Employees have minimal power over their jobs and

working conditions
Subordination, passivity and dependence are expected
work to a short term perspective
Employees are lead to mediocrity
Working conditions produce to psychological failure
as a result of the belief that they are lower class
employees performing boring tasks

26
 Humanistic Perspective

• Led by Mary Parker Follett and Chester Barnard

• Importance of understanding human behaviors:
needs, attitudes and social interactions
1.Human Relations Movement
2.Human Resources Perspective
3.Behavioral Sciences

27
Human Relations Movement (1930-today)
More attention was given to individuals and their
unique capabilities in the organization.
A major belief included that the organization would
prosper if its workers prospered as well.
Human Resource departments were added to
organizations.
The behavioral sciences played a strong role in
helping to understand the needs of workers and how the
needs of the organization and its workers could be better
aligned.
Various new theories were spawned, many based on
the behavioral sciences (some had name like theory
“X”, “Y” and “Z”).
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 Human Resources Perspective
• Focus on job tasks and theories of motivation
– Reduce dehumanizing or demeaning work
– Allow workers to use full potential
– Main contributors: Abraham Maslow and Douglas
McGregor
• Maslow’s Hierarchy of Needs
• McGregor’s Theory X/Theory Y
• Perspective cam from the idea that cows gave more
milk when they were more satisfied

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 The Behavioral Approach
• The Human Relations Movement
– An effort to make managers more sensitive to
their employees’ needs.
– Arose out the influences of
• the threat of unionization.
• the Hawthorne studies.

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 Behavioral Approaches

1. The Hawthorne Experiment (1927)

2. Chester Barnard (1930s – 1960s)
3. Herbert Simon (1947)
4. MacGregor’s Theory X and Theory Y (1960)

31
 The Hawthorne Experiment
 Research conducted at the Hawthorne plant of
the Western Electric Company near Chicago
 Initial study: effects of lighting on worker perfor-

mance
 But the “Hawthorne Effect” was instead

identified

The workers values, desires, and needs may
be more important than physical conditions.

Workers want to have input.

Workers want to be respected.

32
 The Hawthorne Studies
Hawthorne Works of the Western Electric Com-
pany; 1924-1932
Initiated as an attempt to investigate how
characteristics of the work setting affect employee
fatigue and performance (i.e., lighting)
Found that productivity increased regardless of
whether illumination was raised or lowered

33
 Hawthorne Studies

• Designer: Western Electric industrial engineers

Elton Mayo and his associates
• Mayo’s Finding:
 Behavior and sentiments are closely related.
 Group influences significantly affect individual behavior.
 Group standards establish individual worker output.
 Money is less a factor in determining output than are
group standards, group sentiments, and security.

34
 Mary Parker Follett
Mary Parker Follett (1868-1933) was concerned that
Taylor was ignoring the human side of the
organization. Her approach was very radical for the
time.
Management must consider the human side

35
Contemporary Theories

36
 Contemporary Theories in Management
• Contingency Theory
contingency theory asserts that when managers
make a decision, they must take into account all
aspects of the current situation.
Basically, it’s the approach that “it depends.”
For example, the continuing effort to identify the
best leadership or management style might now
conclude that the best style depends on the situation

37
 Recent Historical Trends
Systems Theory. A holistic view of management as
interrelated parts to achieve a common purpose.
Contingency View. Successful resolution of organizational
problems depends on situations.
Total Quality Management. Management of the total
organization to deliver quality.

38
 Systems Theory
a System is a collection of parts that operate
interdependently to achieve a common purpose.
If one part of the system is removed, the nature of the
system is changed as well.
For example, a functioning car is a system. Remove the
carburetor and you’ve no longer got a working car.
A system can be looked at as having inputs, pro-
cesses, outputs and outcomes. Systems share feed-
back
among each of these four aspects of the systems.

39
 Systems Theory

Systems theory has brought a new perspective for

managers to interpret patterns and events in the
workplace.
They recognize the various parts of the organization,
and, in particular, the interrelations of the parts,
e.g., the coordination of central administration with
its programs, engineering with manufacturing,
supervisors with workers, etc.

40
 General Systems Theory
• General Systems Theory
– An area of study based on the assumptions that
everything is part of a larger, interdependent
arrangement.
• Levels of systems
– Each system is a subsystem of the system above it.
– Identification of systems at various levels helps
translate abstract systems theory into more
concrete terms.

41
 An Organization Is an Open System

An organization is a system that interacts with and

depends upon its environment.
Organization’s stakeholders: any group that is affected by
organizational decisions and policies. The manager’s job is
to coordinate all stakeholders to achieve the organization’s
goals.
Organizational survival often depends on successful
interactions with the external environment.

42
The Operating Model in Organizational Sys-
tem

Input Transformation Output

Feedback

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 Situational (Contingency)

Formative years: 1970's to 1990's

Is there “One Best Way” ????
– Appropriate practice depends on the situation
Found in:
– Organization design
– Leadership

44
 Contingency Management

 Managing in Different and Changing Situations

 Require managers to use different approaches and

techniques
 Contingency perspective - different ways of managing

are required in different organizations and different

circumstances
 stresses that there are no simplistic or universal rules
 contingency variable

© Prentice Hall, 2002

45
 The Contingency Approach

• Contingency Approach
A research effort to determine which managerial
practices and techniques are appropriate in spe-
cific situations.
Different situations require different managerial re-
sponses.
Can deal with intercultural feelings in which custom
and habits cannot be taken for granted.

46
 The Contingency Approach …

• Lessons from the Contingency Approach

Approach emphasizes situational appropriateness
rather than rigid adherence to universal principles.
Approach creates the impression that an organiza-
tion is captive to its environment.
Approach has been criticized for creating the im-
pression that an organization is a captive of its en-
vironment.
Four Popular Contingency Variables:
Organization size
Routineness of task technology
Environmental uncertainty
Individual differences

48
 Contingency Viewpoint

There is no best way to manage in all situations

Use the different management viewpoints as appro-
priate to deal with various situations
Managers must be able to diagnose and understand
a situation thoroughly

49
 Assessing the Contingency Viewpoint

Useful approach - makes sense to change viewpoint

depending on situation
Most managers use intuitively
Diagnosis very important to determine best approach
Many don’t consider to really be a “theory” of man-
agement
– just draws on other theories

50
 Management Science

Different from "scientific management”

Formative years: 1940's to 1960's
Operations research
Uses a quantitative basis for decision making - math-
ematical models
Emphasis on managing production and operations

51
 Management Science Perspective
Developed to meet changing and dynamic environment cre-
ated from WWII
Engaged mathematics, statistics and quantitative techniques to
aid in decision making
Increased study of management led by Peter Drucker
Use of technology and programming for optimizing operations
Introduced new subsets of management:
Operations Research
Operations Management
Information Technology

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