Evolution of Management Thought

Lamia Farha
Senior Management Counselor
Management Theory

 Management theories are sets of ideas and

rules that are designed to help in
management.
 They facilitate proper management planning,
organization, leadership and control.
The Evolution of Management Theory
 MANAGEMENT THEORIES

Pre Classical Classical Behavioral Quantitative Contemporary

Contributors Viewpoint Viewpoint Viewpoint Viewpoint

Early Operations System Theory

Scientific Behaviorists Research
Management
Hawthorne
Studies Operations Contingencies
Administrative Management Theory
Management
Human
Bureaucratic Relations Management Emerging
Management Management Information Views
Science
Behavioral
Science
Approach
Pre Classical Contributions
 Pyramids and Walls
500 to 5000years ago!
 Adam Smith (1723-1790)
Economist
Division of Labor!
Breakdown of jobs into narrow and repetitive tasks
increased productivity e.g garment industry.
Cont’d…
Industrial Revolution
 substitution of machine power for human
power
 large organizations required formal
management

➢ Robert Owen (1771 - 1858)

➢ Charles Babbage (1792 - 1871)
➢ Henry R. Towne (1844 - 1924)
Cont’d…
❑ Robert Owen (1771 - 1858)
Entrepreneur (Scotland)
Advocated concern for the working and living
conditions for the employee. Recommended the
use of a “Silent Monitor”.
❑ Charles Babbage (1792 - 1871)
British Professor (Mathematics)
Interest in operations of factories
Built 1st mechanical calculator, ideas on work
(physical and mental) specialization, production
efficiency, costing, incentives and profit – sharing
plan.
Cont’d…
Advocated the study of Management

 Andrew Ure (1778-1857)

British Academician

 Charles Dupin (1784-1873)

French Engineer
Cont’d…
Machine power VS Human power

Assessing the early contributions:

✓ Uncoordinated efforts.
✓ Contributions tended to relate to specific problems.
✓ Did not see ”Management” as a separate field or
skill (until Towne).
Cont’d…
❑ Henry R. Towne (1844 - 1924)
President of a manufacturing organization
Called for “Management Science” and for
development of “Principles of
Management”.
He emphasized the need to consider
management as a separate field of study
and the importance of business skill for
running a business.
Classical School

 The oldest formal school of management

thought for its roots pre-date the twentieth
century
 It generally concerns ways to manage work
and organizations more efficiently
Cont’d…

 Three areas of study that can be grouped

under the classical school are:
◼ Scientific management
◼ Administrative management
◼ Bureaucratic management
 Classical Approach
Focuses on the
individual worker’s Focuses on the
productivity overall
organizational
system

Focuses on the
functions of
management
Scientific Management

 It is the art of knowing what exactly you want

from your men to do & then seeing that it is
done in best possible manner
 In simple words it is just an application of
science to management
Taylor’s Contribution to Scientific
Management

 The basic idea of Scientific Management is to

increase production with efficient use of related
resources. As he was a mechanical engineer he
tried to set up scientific management in
organization. For this he is known as the
‘Father of Scientific Management’.
Short Life sketch of Taylor

 He was born in 20th March in 1856,

Pennsylvania, US.
 He received his education in France and
Germany
 He served as mechanic from 1874-1878 in
Enterprise Hydraulic Works of Philadelphia.
Cont’d…

 He joined Midvale Steel Company

in 1878 as labor
 He became Chief Engineer in 1884
 He joined in Manufacturing
Investment Company in 1890 as
General Manager
Cont’d…

❑ He opened an office in New York in 1893 as a

Consulting Engineer
❑ He joined Bethlehem Steel Company in 1898
❑ He devoted himself in research of Scientific
Management in 1901
❑ He died 28th March in 1915.
Taylor’s Paper

Publication Year

A Piece Rate System 1895

Shop Management 1903

The Art of Cutting Metal 1906

The Principles of Scientific 1911

Management
Taylor’s View About Management

 Analyzing the work – One best way to do it.

 He is remembered for developing time and
motion study.
 He would break a job into parts and measure
each of 100th of a minute.
 The efforts of his disciples (most notably
H.L.Gantt) made the industry to implement
these ideas.
Cont’d…

 Taylor believed that the industrial management

of his day was amateurish, that management
could be formulated as an academic discipline.
 Best results would come from the partnership
between trained and qualified management
and a cooperative and innovative workforce.
 Each side needed the other and there is no
need for trade unions.
Mechanism of Taylor’s Principles
 Time & Motion Study
 Standardization of Work
 Differential Piece Rate System
◼ Wages according to one’s own work
◼ Reward & Punishment
 First Class Man
 Task Management
 Functional Foremanship
Principles of Scientific Management

 Science is not the rule of thumb: scientific

investigation should be used for taking
managerial decisions instead of basing on
opinion, institution or thumb rule. The
development of a true science enables the
Organization to produce more, the worker will
receive higher wages and much large profit will
get by company.
 Cont’d…
 Harmony not discard/
cooperation between
employers and employees:
Harmonious relationship
between employees and
employers. Cooperation of
employees that managers
can ensure that work is
carried in accordance with
standards
Cont’d…

• Scientific selection, training and development:

selection means to choose the best employee
according to the need. Their skill and
experience must match the requirement of the
job.
Scientific development refers to criteria for
promotions, transfers etc.. So that work is
done with full efficiency.
Cont’d…

• Equal Division of work/ responsibility: The

responsibility of workers and management
should be properly divided & communicated so
that they can perform them in an effective
way and should be reward for the same.
Cont’d…

 Mental revolution: Acc. To Taylor, the workers

and managers should have a complete new
outlook; a mental revolution in respect to their
mutual relations.
Workers should be considered as a part of
Organization.
Employers shouldn’t treat workers as mere
wage earners.
Cont’d…
Management encouragement towards labour

Labour consciousness towards work

More production, more wages, more profits

According to Taylor without this great mental

revolution on both sides Scientific management
does not exist.
Impact of Scientific Management

 For Labour: Better placement, more

opportunities for advancement, higher wages,
better working condition etc
 For Management: More effective organization,
more reliable product, better work force,
improved customer image,effective profit
position etc.
Cont’d…

 Five Concepts: Planted the concept of research

in place of rule of thumb, the use of standards
in every phase of management, systematic
planning for any visible improvement,
Collective concept of control for the effective
and total operation of the system and the
principle of cooperation.
Criticism for scientific management
 Taylor's Scientific Management Theory promotes the idea that
there is "one right way" to do something.
 The allocation of work "specifying not only what is to be done
but how it is to be done and the exact time allowed for doing
it“. Taylorism separates manual from mental work, modern
productivity enhancement practices seek to incorporate
worker's ideas, experience and knowledge into best practice.
 Scientific management in its pure form focuses too much on
the mechanics, and fails to value the people side of work,
whereby motivation and workplace satisfaction are key
elements in an efficient and productive organization.
 Inefficiencies within the management control system such as
poorly designed incentive schemes and hourly pay rates not
linked to productivity.
 Poor design of the performance of the work by rule-of-thumb.
How do today’s managers use
Scientific Management

 Scientific management theory is important because its

approach to management is found in almost every industrial
business operation across the world. Its influence is also felt in
general business practices such planning, process design,
quality control, cost accounting, and ergonomics. Your
knowledge of the theory will give you a better understanding of
industrial management. You'll also understand how a manager
can use quantitative analysis, an examination of numbers
and other measurable data, in management to improve the
efficiency and effectiveness of business operations.
Administrative Management

 Henri Fayol is the major contributor to this

school of management thought.
Cont’d…
 Focuses on the management process and
principles of management.
 In contrast to scientific management, which
deals largely with jobs and work on the
individual level of analysis, administrative
management provides a more general theory
of management.
 The study of how to create organizational
structure that leads to high efficiency and
effectiveness.
Short Life Span of Henri Fayol
 He was born in French in 1841
 He graduated in Mining Engineer
 He appointed as an engineer in S A Commentry
Fourchambault in 1860
 He promoted in Managing Director in 1918
 He died in December 1925
Cont’d…
 First Management thinker who provided the
conceptual framework of the functions of
management in his book.
 Due to his contribution of management theory
and principles, Henri Fayol is rightly treated as
the Father of Modern Management Thought.
Publication
 General and Industrial Management -1916
(Administration industrielle et generale)
 The theory of Administration in the State-1923
Administrative Management Theory
Fayol dividing the total undertaking into six
separate activities:
 Technical: Production, manufacture , adaption
 Commercial: Buying, selling, exchange
 Financial: Search for and optimum use of
capital
 Security: Protection of property and persons
 Accounting: Stocktaking, balance sheets, costs
 Managerial: Planning, organizing, coordinating,
commanding, controlling
Five Elements
Fayol classifies this managerial key functions into
five main elements:
 Planning
 Organizing
 Commanding
 Coordinating
 Controlling
Manager’s Attributes
Fayol suggested that managers should have the
following attributes:
 Physical
 Mental
 Moral
 General Education
 Special Knowledge
 Experience
Fayol’s principles of Management
Cont’d…
 Division of Labor: allows for job
specialization.
 Authority and Responsibility
◼ both formal and informal authority
resulting from special expertise.
 Unity of Command
◼ Employees should have only one boss.
Cont’d…
 Line of Authority
◼ A clear chain of command from top to
bottom of the firm.
 Centralization
◼ The degree to which authority rests at
the top of the organization.
 Unity of Direction
◼ A single plan of action to guide the
organization.
Cont’d…
 Equity - The provision of justice and the fair
and impartial treatment of all employees.
 Order - The arrangement of employees where
they will be of the most value to the
organization and to provide career
opportunities.
 Initiative - The fostering of creativity and
innovation by encouraging employees to act on
their own.
Cont’d…
 Discipline
◼ Obedient, applied, respectful employees
are necessary for the organization to
function.
 Remuneration of Personnel
◼ An equitable uniform payment system
that motivates contributes to
organizational success.
Cont’d…
 Stability of Tenure of Personnel
◼ Long-term employment is important for
the development of skills that improve
the organization’s performance.
 Subordination of Individual Interest to the
Common Interest
◼ The interest of the organization takes
precedence over that of the individual
employee.
Cont’d…
 Esprit de corps
◼ Comradeship, shared enthusiasm foster
devotion to the common cause
(organization).
Henri Fayol & Frederick Taylor:
Comparison
 Taylor developed scientific management
principles to be used directly in the field of
production where as Fayol dealt with the
general theory of administration to be applied
at the top management level.
Viewed Management as a Profession
 Fayol’s theory of management was the first
complete theory of management as we
understand today.
 It incorporated proven principles, elements,
procedures and techniques based on his
practical experience.
Offered Universal Managerial
Prescriptions
 He recommended the selection and training of
workers and managers.
 He suggested certain qualities of manager’s
which include physical, mental, moral
educational technical and experience.
Evaluation
 Fayol’s contribution to management theory is
certainly remarkable.
 He gave overall concepts of general
management and suggested the basic
functions of management.
 In fact, the 14-principles are the outcome of
his long experience as a practicing manager.
 He also advocated the use of organization
charts.
Limitations
 Stresses a “one best way” way of organizing
and managing.
 Theory based on intuition and observation
rather than on empirical investigation.
 Today’s environment are more turbulent and
unpredictable.
 Too general for today’s highly complex
organization.
"The old fashioned dictator does not exist
under Scientific Management. The man at
the head of the business under Scientific
Management is governed by rules and laws
which have been developed through
hundreds of experiments just as much as the
workman is, and the standards developed
are equitable.“

F.W.Taylor–Father of Scientific Management