Principles of Management

Dyck / Neubert

Chapter 2
A Short History of
Management Theory and Practice

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 Five Eras of Management Thought

• 1910-1930 Organizing: best structure

• 1930-1950 Leading: roles and styles
• 1950-1970 Planning: higher productivity
• 1970-1990 Controlling: orderly workplace
• 1990-Present Reconsidering: paradigm shift

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 An Emphasis on Organizing:
The “Classical” Era (1910 to 1930)
Scientific Management (Micro Approach)
– Focused on defining and maximizing the
productivity of individual jobs.

– Frederick W. Taylor (systematic work)

» Father of Scientific Management
» increased productivity by scientifically analyzing jobs to find
the “one best way” to complete the work

– Henry Gantt (Gantt chart)

» bar graph used to schedule and allocate resources for a
production job

– Frank B. Gilbreth (time and motion studies)

» “one best way” to organize work through their time and
motion studies

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 An Emphasis on Organizing:
The “Classical” Era (cont’d)

• Bureaucracy (Macro Approach)

Focused on the structure and functions of
management in order to maximize productivity of
the overall organization.
– Max Weber’s – Father of Bureaucracy which relies
on authority, rules, structures and systems.
– Henry Ford – development of the mass production
assembly line to increase productivity focused on
the processes of moving specialized jobs to
workers.

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 An Emphasis on Organizing:
The “Classical” Era (cont’d)

• Henri Fayol (1841-1925) (Macro Approach)

– Introduced the four functions of management
and 14 universal principles of management
• Planning
• Organizing
• Leading
• Controlling

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 Fayol’s 14 Universal Principles of Management

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 Fayol’s 14 Universal Principles of Management

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 An Emphasis on Leading:
The “Human” Era (1930-1950)

• Mary Parker Follett (1868-1933)

– The “mother” of the leading era
• Emphasized the human (behavioral) side of
management.

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 An Emphasis on Leading:
The “Human” Era (cont’d)

• Lillian Gilbreth (1878-1972)

– Focused on human resource management.
– Studied ways to reduce job stress.

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 An Emphasis on Leading:
The “Human” Era (cont’d)

• Chester Barnard (1886-1961)

– Focused on leadership and the
informal organization

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 An Emphasis on Leading:
The “Human” Era (cont’d)

• The Hawthorne Effect

– Research results:
• Indicated workers’ productivity will increase
whenever managers treat them with respect.
• Suggested that relationships are important in
understanding behavior in organizations.

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 The Human Relations Movement

• Human Relations Movement

– Focused on managerial actions that would increase
employee satisfaction in order to improve
productivity.
– Movement emphasized:
• Managers using social skills to motivate employees.
• Designing jobs that are more humane and less
fatiguing.

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 The Human Relations
Movement

• Theory X and Y
– Douglas McGregor (1906-1964)
– Theory X managers:
• Assume people are lazy, dislike work,
will avoid working hard, and prefer to be
directed.

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 The Human Relations Movement
• Theory X and Y (cont’d)
– Theory Y managers assume:
• Workers should be allowed to use their full selves.
• Work is as natural as play.
• People are inherently motivated to work.
• People will feel unfulfilled without the opportunity.
to work and contribute to society.
• Workers prefer control over their work.
• People will take responsibility for their work.

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 An Emphasis on Planning:
The “Calculating” Era (cont’d)
• Management Science:
1. Operations research. Emphasizes mathematical
model building.
2. Operations management. Uses quantitative
techniques to make decisions to produce goods
and services more efficiently. It includes the use of
the following techniques:
• Break-even analysis
• Forecasting
• Inventory modeling
• Linear programming
• Simulations

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 An Emphasis on Planning:
The “Calculating” Era (cont’d)
• Systems Theory
– A subfield of management that aids in planning and decision making
by highlighting managers’ unique responsibilities and vantage points
in overseeing the entire organization.
• Closed system
– A self-contained and self-sufficient unit that is subject to
failure due to entropy.
» Entropy: The natural tendency for a closed system to fail
because it is unable to acquire the inputs and energy it
needs to survive
• Open system
– An organization that gains synergy in interacting with
other entities in its larger environment.
» Synergy occurs when two or more systems are more
successful working together than they are working
independently.
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 An Emphasis on Planning:
The “Calculating” Era (cont’d)
• The Contingency Theory
– A subfield of management theory that suggests that
there is a fit between organizational structures and
system, technology, and the larger environment.

• Mechanistic structures – (Bureaucratic)

characterized by many written/formal rules and
centralized authority (best in stable environments)
• Organic structures – (Flexible Organization),
characterized by flexible rules and decentralized
authority (best in less stable environments)

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 An Emphasis on Controlling:
The “Values and Beliefs” Era (1970 - 1990)

• Institutionalization
– Occurs when practices or rules have
become “valued” in and of themselves,
even though they may no longer be useful
for the organization.

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 The call for Multistream Management: The
“reconsidering” era (1990 to present)
• A growing discontent with Mainstream status quo has led people to
look at a number of important issues in management
a) Ecological sustainability: Increasing scientific evidence shows
that our current lifestyle is harming the environment .
b) Social justice: Income inequality is growing within
organizations and countries, and across countries
c) Physical well-being: Research indicates that focus on
materialism and individualism is associated with physical and
emotional costs
d) Aesthetic costs: Do massive organizations and highly
specialized jobs contribute to meaningful work and communities
that are pleasing to the senses?
e) Spiritual interest: Movement toward increased spirituality and
religion and away from materialism and individualism

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