Introduction

Both theory and history of management are useful to the practicing manager. Theories
help us by organising information and providing a systematic framework for action.
The history of management theories can help a manager to be aware of the many
insights, ideas and scientific underpinnings that have gone into the making of modern
management.

The practice of management started when man first attempted to accomplish goals by
working together in groups. But the systematic study of management began at the
advent of the Industrial Revolution which ushered in a new era of serious thinking and
theorizing on management. At this stage it is considered important and worthwhile to
have some knowledge of the background of the evolution of modern management
thought, for then the growth of modern thinking on management can be appreciated as
the fruit of a long-going historical process and development.

To begin with, there is no single universally accepted theory. The wild array of
management theories could even look like a “jungle” as Koontz says. However, to help
put the different theories in perspective, we shall discuss them as representing
different schools of management thought.

Meaning and Definition of management :

"Management is the process of planning, organizing, leading, and controlling an

organization's human, financial, physical, and information resources to achieve
organizational goals in an efficient and effective manner".

Management is the process of designing and maintaining an environment in which

individuals, working together in groups, efficiently accomplish selected aims, (Weihrich
and Koontz). This basic definition needs to be expanded:

 As managers, people carry out the managerial functions of planning,

organizing, staffing, leading, and controlling.
 Management applies to any kind of organization.
 It applies to managers at all organizational levels.
 The aim of all managers is the same: to create a surplus.
 Managing is concerned with productivity, which implies effectiveness and
efficiency.
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"Management is a distinct process consisting of activities of planning, actuating, and
controlling, performed to determine and accomplish stated objectives with the use of
human beings and other resources".

"The process of planning, organizing, leading, and controlling the work of organization
members and of using all available organizational resources to reach stated
organizational goals".

Evaluation of Management Thought

Many different contributions of writers and practitioners have resulted in different

approaches to management, and these make up a "management theory jungle".
Table-1.1 summarizes the major contributions of management writers and
practitioners. We will highlight Fredrick W. Taylor's Scientific Management, Henry
Fayol's modern operational management theory, and Elton Mayo and F. J.
Roethlisberger's Hawthorne studies.

Table 1.1 The emergence of management thought

Name and Year of Major Work Major Contribution to Management

Scientific Management

Frederick W. Taylor ─shop Acknowledged as the father of scientific

management (1903), Principles
of scientific management (1911),
Testimony before the Special
Home Committee (1912)
management. His primary concern was to raise
productivity through greater efficiency in production
and increased pay for workers, by applying the
scientific method. His principles emphasize using
science, creating group harmony and cooperation,
achieving maximum output, and developing
workers.
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 Henry L. Gantt (1901)
Frank and Lillian Gilbreth (1900)
Modern Operational
Management Theory
Henry Fayol ─Administration
Industrielle et Generale (1916)
Behavioral Sciences
Hugo Munsterberg (1912)
Walter Dill Scott (1910, 1911)
Max Weber (translations 1946,
1947)
Vilfredo Parete (books 1896-
1917)
Elton Mayo and F. J.
Roethlisberger (1933)
Called for scientific selection of workers and "
harmonious cooperation" between labor and
management.
Frank is known primarily for his time and motion
studies. Lillian, an industrial psychologist, focused
on the human aspects of work and the
understanding of workers' personalities and needs.
Referred to as the father of modern management
theory. Divided industrial activities into six groups:
technical, commercial, financial, security,
accounting, and managerial. Recognized the need
for teaching management. Formulated 14 principles
of management, such as authority and
responsibility, unity of command, scalar chain, and
esprit de corps.
Application of psychology to industry and
management
Application of psychology to advertising, marketing,
and personnel.
Theory of bureaucracy.
Referred to as the father of the social systems
approach to organization and management.
Famous studies at the Hawthorne plant of the
Western Electric Company on the influence of
social attitudes and relationships of work groups on
performance.
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 System Theory

Chester Barnard ─The The task of managers is to maintain a system of

Functions of the Executive cooperative effort in a formal organization.
(1938) Suggested a comprehensive social systems
approach to managing.

Modern Management Thought

Many authors are discussed on Modern management thought . Major contributors

include Chris Argyris, Robert R. Blake, C. West Churchman, Ernest Dale, Keith Davis,
Mary Parker Follett, Frederick Herzberg, G. C. Homans, Harold Koontz, Rensis Likert,
Douglas McGregor, Abraham H. Maslow, Lyman W. Porter, Herbert Simon, George A
Steiner, Lyndall Urwick, Norbert Wiener, and Joan Woodward.

Peter F. Drucker (1974) Very prolific writer on many general management

topics.

W. Edwards Deming (after Introduced quality control in japan.

Second World War)

Laurence Peter (1969) Observed that eventually people get promoted to a

level where they are incompetent.

William Ouchi (1981) Discussed selected Japanese managerial practices

adapted in the U. S. environment.

Thomas Peters and Robert Identified characteristics of companies they

Waterman 91982) considered excellent.

Source: Some information in this table is based on Claude S. George, Jr., The History
of Management Thought (Englewood Cliffs, NJ: Prentice Hall, 1972)
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 Frederick Taylor and Scientific Management

Frederick Winslow Taylor gave up going to college and started

out as an apprentice pattern maker and machinist in 1875,
joined the Midvale steel Company in Philadelphia as a
machinist in 1878, rose to the position of chief engineer after
earning a degree in engineering through evening study. He
invited high-speed steel-cutting tools and spent most of his life Frederick W. Taylor
(1856-1915)
as a consulting engineer. Taylor is generally acknowledged as
the father of scientific management. probably no other person has had a greater
impact on the development of management. His experiences as an apprentice, a
common laborer, a foreman, a master mechanic, and then the chief engineer of a steel
company gave Taylor ample opportunity to know first-hand the problems and attitudes
of workers and to see the great possibilities for improving the quality of management.

scientific management is “that kind of management which conducts a business or

affairs by standards established by facts or truths gained through systematic
observation, experiment, or reasoning.”19 The word experiment deserves special
emphasis because it was Taylor’s
Scientific management: developing trademark. While working at Midvale and
performance standards on the basis of later at Bethlehem Steel, Taylor started the
systematic observation and experimentation. scientific management movement in
industry in four areas: standardization, time
and task study, systematic selection and training, and pay incentives.

Taylor's famous work Principles of scientific management was published in 1911.

The fundamental principles that Taylor saw underlying the scientific approach to
management are as follows:

 Replacing rules of thumb with science (organized knowledge).

 Obtaining harmony, rather than discord, in group action.
 Achieving cooperation of human beings, rather than chaotic individualism.
 Working for maximum output, rather than restricted output.
 Developing all workers to the fullest extent possible for their own and their
company's highest prosperity.

You will notice that these basic precepts of Taylor are not far from the fundamental
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benefits of the modern manager.

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 Henri Fayol, the Father of Modern Management Theory

Perhaps the real father of modern management theory is the

French industrialist Henri Fayol. He recognized a widespread
need for principles and management teaching. Consequently,
he identified 14 such principles, listed in Table 1.2, noting that
those are flexible, not absolute, and must be usable regardless
of changing conditions. Fayol's 14 principles of management
were intended to show managers how to carry out their
functional duties. Fayol’s functions and principles have Henri Fayol (1841-1925)
withstood the test of time because of their widespread
applicability.

In 1916, at the age of 75, Henri Fayol published his now-classic book Administration
Industrielle et Générale, although it was not widely known in Britain and the United
States until an English translation became available in 1949.14 Despite its belated
appearance in the English-speaking world and despite its having to compete with
enthusiastic scientific management and human relations movements in the United
States, Fayol’s work left a permanent mark on twentieth-century management thinking.

Fayol was first an engineer and later a successful administrator in a large French
mining and metallurgical concern, which is perhaps why he did not resort to theory in
his pioneering management book. Rather, Fayol was a manager who attempted to
translate his broad administrative experience into practical guidelines for the
successful management of all types of organizations.

Fayol believed that the manager’s job could

Fayol divided manager's job into five be divided into five functions, or areas, of
functions ─planning, organizing, command, managerial responsibility—planning,
coordination, and control.
organizing, command, coordination, and
control—that are essential to managerial
success. (Some educators refer to them as the POC3 functions.)

The universal process approach assumes the administration of all

organizations, public or private and large or small, requires the same rational process.
The universalist approach is based on two main assumptions. First, although the
purpose of organizations may vary a core management process remains the same
across all organizations. The second assumption is that the universal management
process can be reduced to a set of separate functions and related principles. Early
universal process writers emphasized the specialization of labor, the chain of
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command, and authority.

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Table 1.2 Fayol's 14 principles of management

1. Division of work : Specialization of labor is necessary for organizational success.

2. Authority : The right to give orders must accompany responsibility.
3. Discipline : Obedience and respect help an organization run smoothly.
4. Unity of command : Each employee should receive orders from only one superior.
5. Unity of direction : The efforts of everyone in the organization should be coordinated and focused in the same
direction.
6. Subordination of individual interests to the general interest : Resolving the tug of war between personal
and organizational interests in favor of the organization is one of management's greatest difficulties.
7. Remuneration : Employees should be paid fairly in accordance with their contribution.
8. Centralization : The relationship between centralization and decentralization is a matter of proportion; the
optimum balance must be found for each organization.
9. Scalar chain : Subordinates should observe the formal chain of command unless expressly authorized by their
respective superiors to communicate with each other.
10. Order : Both material things and people should be in their proper places.
11. Equity : Fairness that results from a combination of kindliness and justice will lead to devoted and loyal
service.
12. Stability and tenure of personnel : People need time to learn their jobs.
13. Initiative : One of the greatest satisfactions is formulating and carrying out a plan.
14. Esprit de corps : Harmonious effort among individuals is the key to organizational success.

Source: Adapted from Henri Fayol, General and Industrial Management, trans. Constance Storrs (London: Isaac
Pitman & Sons, 1949). Copyright © 1949 by Lake publishing Company. Reprinted by permission.

The Behavioral Approach

Like the other approaches to management, the behavioral approach has evolved
gradually over many years. Advocates of the behavioral approach to management
point out that people deserve to be the central focus of organized activity. They believe
that successful management depends largely on a manager’s ability to understand
and work with people who have a variety of backgrounds, needs, perceptions, and
aspirations. The progress of this humanistic approach from the human relations
movement to modern organizational behavior has greatly influenced management
theory and practice.
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 The Human Relations movement

The human relations movement was a concerted effort among theorists and
practitioners to make managers more sensitive to employee needs. It came into being
as a result of special circumstances that occurred during the first half of the twentieth
century. As illustrated in Figure 1.1, the
Human relation movement: an effort to human relations movement may be
make managers more sensitive to their compared to the top of a pyramid. Just as
employees' needs. the top of a pyramid must be supported, the
human relations movement was supported
by three very different historical influences:
(1) the threat of unionization,
(2) the Hawthorne studies, and
(3) the philosophy of industrial humanism.

FIGURE 1.1 The Human Relations Movement

Pyramid
THREAT OF UNIONIZATION:
To understand why the human
relations movement evolved, one
needs first to appreciate its
sociopolitical background. From the
Human
relations late 1800s to the 1920s, American
movement industry grew by leaps and bounds as
it attempted to satisfy the many
demands of a rapidly growing
Philosophy
of industrial population. Cheap immigrant labor
humanism was readily available, and there was a
seller’s market for finished goods.
Then came the Great Depression in
Threat of Hawthorne the 1930s, and millions stood in bread
unionization studies
lines instead of pay lines. Many held
business somehow responsible for
the depression, and public sympathy swung from management to labor. Congress
consequently began to pass prolabor legislation. When the Wagner Act of 1935
legalized union management collective bargaining, management began searching for
ways to stem the tide of all-out unionization. Early human relations theory proposed an
enticing answer: satisfied employees would be less inclined to join unions. Business
managers subsequently began adopting morale-boosting human relations techniques
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in an effort to discourage unionization.

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Elton Mayo and the Hawthorne Studies

Elton mayo, F. J. Roethlisberger, and others undertook the

famous experiments at the Hawthorne plant of the Western
Electric Company between 1927 and 1932. Earlier, from 1924
to 1927, the National Research Council made a study in
collaboration with Western Electric to determine the effect of
illumination and other conditions on workers and their
productivity. Finding that productivity improved when
illumination was either increased or decreased for a test group,
Elton Mayo (1880 - 1949)
the researchers were about to declare the whole experiment a
failure. However, Mayo of Harvard saw in it something unusual and, with
Roethlisberger and others, continued the research.

What Mayo and his colleagues found, partly on the basis of the earlier thinking of
Vilfredo Pareto, was to have a dramatic effect on management thought. Changing
illumination for the test group, modifying rest periods, shortening workdays, and
varying incentive pay systems did not seem to explain changes in productivity. Mayo
and his researchers then came to the conclusion that other factors were responsible.
They found, in general, that the improvement in productivity was due to such social
factors as morale, satisfactory interrelationships between members of a work group (a
sense of belonging), and effective management ─a kind of managing that takes into
account human behavior, especially group behavior, and serves it through such
interpersonal skills as motivating, counseling, leading, and communicating. This
phenomenon, arising basically from people being "noticed," has been named the
Hawthorne effect.

The Philosophy of Industrial Humanism

Although unionization prompted a search for new management techniques and the
Hawthorne studies demonstrated that people were important to productivity, a
philosophy of human relations was needed to provide a convincing rationale for
treating employees better. Elton Mayo, Mary Parker Follett, and Douglas McGregor,
although from very different backgrounds, offered just such a philosophy.

Born in Australia, Elton Mayo was a Harvard professor specializing in psychology and
sociology when he took over the Hawthorne studies. His 1933 book The Human
Problems of an Industrial Civilization, inspired by what he had learned at Hawthorne,
cautioned managers that emotional factors were a more important determinant of
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productive efficiency than physical and logical factors.

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Claiming that employees create their own unofficial yet powerful workplace culture
complete with norms and sanctions, Mayo urged managers to provide work that
fostered personal and subjective satisfaction. He called for a new social order
designed to stimulate individual cooperation.

Mary Parker Follett’s experience as a management consultant

and her background in law, political science, and philosophy
shaped her strong conviction that managers should be aware
that each employee is a complex collection of emotions, beliefs,
attitudes, and habits. She believed that managers had to
recognize the individual’s motivating desires to get employees to
work harder. Accordingly, Follett urged managers to motivate
performance rather than simply demanding it. Cooperation, a
spirit of unity, and self-control were seen as the keys to both
productivity and a democratic way of life.37 Historians credit
Follett, who died in 1933, with being decades ahead of her time Mary Parker Follett (1868 -
1933)
in terms of behavioral and systems management theory. Her
influence as a management consultant in a male-dominated industrial sector was
remarkable as well.

A third philosophical rallying point for industrial humanism was

provided by an American scholar named Douglas McGregor,
known as an industrial psychologist in post modern era and after
industrial revolution when human side of industries came into
consideration and he was one of the famous behaviorist of that
period. In his 1960 classic The Human Side of Enterprise,
McGregor outlined a set of highly optimistic assumptions about
human nature. McGregor viewed the typical employee as an
Douglas McGregor (1906- energetic and creative individual who could achieve great things if
1964) given the opportunity. He labeled the set of assumptions for this
optimistic perspective Theory Y. McGregor’s theory Y assumptions are listed in Table
1.3, along with what he called the traditional theory X assumptions. These two sets of
assumptions about human nature enabled McGregor to contrast the modern, or
enlightened, view he recommended (theory Y) with
the prevailing traditional view (theory X), which he Theory Y: McGregor's optimistic
criticized for being pessimistic, stifling, and outdated. assumptions about working people
Because of its relative recency (compared with
Mayo’s and Follett’s work), its catchy labels, and its intuitive appeal, McGregor’s
description of theory X and theory Y has left an indelible mark on modern
management thinking. Some historians have credited McGregor with launching the
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field of organizational behavior.

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Table 1.3 McGregor’s Theories X and Y
Theory X: some traditional Theory Y: some modern assumptions
assumptions about people about people

1. Most people dislike work, and they will avoid it 1. Work is a natural activity, like play or rest.
when they can.

2. Most people must be coerced and threatened 2. People are capable of self-direction and self-
with punishment before they will work. They require control if they are committed to objectives.
close direction.

3. Most people prefer to be directed. They avoid 3. People will become committed to organizational
responsibility and have little ambition. They are objectives if they are rewarded for doing so.
interested only in security.

4. The average person can learn to both accept

and seek responsibility.

5. Many people in the general population have

imagination, ingenuity, and creativity.

Organizational Behavior

Organizational behavior is a modern approach to management that attempts to

determine the causes of human work behavior and to translate the results into
effective management techniques. Accordingly, it has a strong research orientation
and a robust collection of theories. In fact, a recent review uncovered “73 established
organizational behavior theories.” Organizational behaviorists have borrowed an
assortment of theories and research techniques from all the behavioral sciences and
have applied them to people at work in modern
organizations. The result is an interdisciplinary
field in which psychology predominates. In spite organizational behavior: a modern approach
seeking to discover the causes of work behavior
of its relatively new and developing state, and to develop better management techniques
organizational behavior has had a significant
impact on modern management thought by
helping to explain why employees behave as they do. Because human relations has
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evolved into a practical, how-to-do-it discipline for supervisors, organizational behavior

amounts to a scientific extension of human relations.
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The System Approach
A system is a collection of parts operating interdependently to achieve a common
purpose. Working from this definition, the systems approach represents a marked
departure from the past; in fact, it requires a completely different style of thinking.

Chester I. Barnard’s Early Systems Perspective

In one sense, Chester I. Barnard followed in the footsteps of Henri Fayol. Like Fayol,
Barnard established a new approach to management on the basis of his experience as
a top-level manager. But the approach of the former president of New Jersey Bell
Telephone differed from Fayol’s. Rather than isolating specific management functions
and principles, Barnard devised a more abstract systems approach. In his landmark
1938 book The Functions of the Executive, Barnard characterized all organizations as
cooperative systems: “A cooperative system is a complex of physical, biological,
personal, and social components which are in a specific systematic relationship by
reason of the cooperation of two or more persons for at least one definite end.”
According to Barnard, willingness to serve, common purpose, and communication are
the principal elements in an organization (or cooperative system). He felt that an
organization did not exist if these three elements were not present and working
interdependently. Barnard viewed communication as an energizing force that bridges
the natural gap between the individual’s willingness to serve and the organization’s
common purpose. Barnard’s systems perspective has encouraged management and
organization theorists to study organizations as complex and dynamic wholes instead
of piece by piece. Significantly, he was also a strong advocate of business ethics in his
speeches and writings. Barnard opened some important doors in the evolution of
management thought.

General Systems Theory

General systems theory is an interdisciplinary area of study based on the

assumption that everything is part of a larger, interdependent arrangement. According
to Ludwig von Bertalanffy, a biologist and the founder of general systems theory, “In
order to understand an organized whole we must know the parts and the relations
between them.” This interdisciplinary perspective was eagerly adopted by Barnard’s
followers because it categorized levels of systems and distinguished between closed
and open systems.
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Levels of systems

Envisioning the world as a collection of systems was only the first step for general
systems theorists. One of the more important recent steps has been the identification
of hierarchies of systems, ranging from very specific systems to general ones.
Identifying systems at various levels has helped translate abstract general systems
theory into more concrete terms. A hierarchy of systems relevant to management is
the seven-level scheme of living systems shown in Figure 2.5. Note that each system
is a subsystem of the one above it.

Closed versus Open Systems

In addition to identifying hierarchies of systems, general systems theorists have

distinguished between closed and open systems. A closed system is a self-sufficient
entity. whereas an open system depends on the surrounding environment for
survival. In reality, these two kinds of systems cannot be completely separated. The
key to classifying a system as relatively closed or relatively open is to determine the
amount of interaction between the system and its environment. A battery-powered
digital watch, for example, is a relatively closed system; after the battery is in place,
the watch operates without help from the outside environment. In contrast, a solar-
powered clock is a relatively open system; it cannot operate without a continuous
supply of outside energy. The human body is a highly open system because life
depends on the body’s ability to import oxygen and energy and to export waste. In
other words, the human body is highly dependent on the environment for survival.

Along the same lines, general systems theorists say that all organizations are open
systems because organizational survival depends on interaction with the surrounding
environment. Just as no person is an island, no organization or organizational
subsystem is an island, according to this approach.

FIGURE 1.2 Levels of Living Systems

System level Practical examples
Supranational General United Nations

National Canada
Organizational Wal-Mart
Group Family, work group
Organismic Human being
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Organic Heart
Cellular Specific Bloodcell
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Contingency Approach

In the words of Fred Luthans, a noted contingency management writer, “The

traditional approaches to management were not necessarily wrong, but today they are
no longer adequate. The needed breakthrough for management theory and practice
can be found in a contingency approach.” Formally defined, the contingency
approach is an effort to determine through research which managerial practices and
techniques are appropriate in specific situations.

Generally, the term contingency refers to the choice of an alternative course of

action. For example, roommates may have a contingency plan to move their party
indoors if it rains. Their subsequent actions are said to be contingent (or dependent)
on the weather. In a management context, contingency management has become
synonymous with situational management. A contingency approach is especially
applicable in intercultural dealings, where customs and habits cannot be taken for
granted.

Contingency Characteristics Some management scholars are attracted to

contingency thinking because it is a workable compromise between the systems
approach and what can be called a purely situational perspective. Figure 2.6 illustrates
this relationship. The systems approach is often criticized for being too general and
abstract, while the purely situational view, which assumes that every real-life situation
requires a distinctly different approach, has been called hopelessly specific. Three
characteristics of the contingency approach are: (1) an open system perspective, (2) a
practical research orientation, and (3) a multivariate approach.

FIGURE 2.6 The Contingency View: A Compromise

Very general Very specific

Contingency
Systems purely situational view
view

Everything is Relationships
made up of systems between Every situation is
with common management totally unique.
characteristics. techniques and
situations can
be categorized.
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An open-system perspective: Open-system thinking is fundamental to the
contingency view. Contingency theorists are not satisfied with focusing on just the
internal workings of organizations. They see the need to understand how
organizational subsystems combine to interact with outside social, cultural, political,
and economic systems.

A practical research orientation: Practical research is that which ultimately leads to

more effective on-the-job management. Contingency researchers attempt to translate
their findings into tools and situational refinements for more effective management.

A multivariate approach: Traditional closed-system thinking prompted a search for

simple one to one causal relationships. This approach is called bivariate analysis. For
example, the traditional human relations assumption that higher morale leads
automatically to higher productivity was the result of bivariate analysis. One variable,
morale, was seen as the sole direct cause of changes in a second variable,
productivity. Subsequent multivariate analysis has shown that many variables,
including the employee’s personality, the nature of the task, rewards, and job and life
satisfaction, collectively account for variations in productivity.

Multivariate analysis is a research technique used to determine how a number of

variables interact to cause a particular outcome. For example, if an employee has a
conscientious personality, the task is highly challenging, and the individual is highly
satisfied with his or her life and job, then analysis might show that productivity could be
expected to be high. Contingency management theorists strive to carry out practical
and relevant multivariate analyses.

Conclusion

After discussion the evaluation theory of management, however, I will finish this topic
by conclusion tag. Finally, among the contributors to management thought are public
administrators, business managers, and behavioral scientists. Here we have
mentioned only few: Peter F. Drucker has writen on a varity of general management
topics. Keith Davis helped us understand the informal organization.

References

1. Weihrich, Heinz; V. Cannice, Mark; Koontz, Harold; Management, A global and

Entrepreneurial Perspective.

2. Kreitner, Robert; Management.

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