The Origin and Evolution of

Management Principles

Victor Paulo D. Umali

 Learning Objectives
•What a management theory is.
•Understand the evolution of management
principles and their major contributions.

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 Key Concepts: Definition of
Management
Management is the process of accomplishing
an organization’s goals by working with and
through people, utilizing all the resources
available to it.

The Role of Management

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 The Management Framework

Planning Organizing Influencing Controlling

• Vision • Organizatio • Leadership • Systems
and n Design • Decision Making and
Mission • Culture • Communications Processes
• Strategy • Social • Human
• Groups
• Goals and Networks Resources
and Teams
Objectives • Motivation
Evolution of Management
Theory

Modern
Management
1920-1950
School
Neo-Classical
Management Systems
School Contingency
1880 - 1930 Organizational
Human
Classical Humanism
Relations
Management Management
Behavioral Science
School
Scientific
Administrative
Bureaucratic
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 Job specialization and the Division of
Labor

Famous economist,
Adam Smith,
journeyed around
England in 1700’s
studying the effects
of industrial
revolution.
 Crafts-style Factory System

Each worker performed

Each worker responsible for
only 1 or a few tasks to
All tasks
produce

• Poorer performance • Better performance

• Few thousands p/d • 48,000 pins p/d
• Cannot be equally • More skilled at their
Skilled in all tasks
tasks
 With insights gained from Adam Smith’s
observations, other managers and researchers
began to investigate how to improve job
specialization to increase performance.
They focused on how to organize and control
the work process.
 Frederick Taylor
1911
͞Principles of Scientific Management
The Scientific School of
Management

Proposed an objective and systematic

method to identify "the one best w a y ”
to do a job using scientific selection and
training methods; co-operation and clear
division of responsibility between
managers and workers; pay for
performance.
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 Frank & Lillian Gilbreth
1912 - 1924

Time and Motion Studies

Disciples of Frederick Taylor,

theirtime and motion studies helped lay the
foundations for Scientific Management
– the best possible way for a worker to complete a
job.
The expected results are employee satisfaction, productivity and efficiency.

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 Administrative Management
Theory

• Theory of Bureaucracy

• Fayol’s Principles of Management

Administrative Management

The study of how to create an

organizational structure that leads to
high efficiency and effectiveness.
 Max Webber
1905
͞The Theory of Social and Economic Organization
The Bureaucratic School of Management

A major contribution in this “bureaucracy” theory,

a formalized and idealized view of organizations,
comprising 6 major principles.

1. A formal hierarchical structure.

2. Management by rules.
3. Organization by task competency.
4. Impersonal relationships.
5. A focused mission.
6. Employment based on technical qualifications.
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 Henri Fayol
1916
The Administrative School of Management
Managers need specific roles in order to
manage work and workers.
He enumerated 6 functions / roles of
1. Forecasting 4. Commanding
management
2. . Planning 5. Coordinating
3. Organizing 6. Controlling

These roles evolved into 14 principles of

management.
Division of work, Authority, Discipline, Unity of Command, Unity
of Direction, Subordination of Interests, Remuneration,
Centralization, Scalar Chain, Equity, Order, Stability of Tenure of
Personnel, Initiative, Esprit de Corp.
 1. Division of Labour

Job specialization and the division of labour

should increase efficiency. Pointed out the
downside of too much specialization; so
workers should be given more duties to
perform.
 2. Authority and Responsibility

Managers have the right to give orders and the

power to exhort subordinates for obedience.
 3. Discipline
Members in an organization need to respect the
rules and agreement that govern the
organization.

To Fayol, discipline results from good leadership,

fair agreements and judiciously enforced
penalties for infractions.
 4. Unity of Command

An employee should receive orders from only

one superior.
 5. Unity of Direction
Those operations within the organization that
have the same objective should be directed by
only one manager using one plan. For example
the personnel department in a company
should not have two directors each with a
different hiring policy.
6. Subordination of Individual Interests
to the Common Interest

Interests of employees should not take

precedence over the interests of the
organization as a whole.
 7. Fair Remuneration

Compensation for work done should be fair to

both employees and employers.
 8. Centralization

Authority should not be concentrated at the top

of the chain of command.
 9. Line of Authority

The length of the chain of command that

extends from the top to the bottom of an
organization should be limited.
 10. Order

Materials and people should be in the right

place at the right time. People should be in
the jobs that they are most suited to.
 11. Equity

Managers should be both friendly and fair to

their subordinates.
 12. Initiative

Subordinates should be given the freedom to

conceive and carry out their plans, even
though some mistakes may result.
 13. Stability of Tenure of Personnel

A high employee turnover rate undermines the

efficient functioning of an organization.
 14. Esprit de Corps
Promoting team spirit will give the organization
a sense of unity.

To Fayol, even a small factors should help to

develop the spirit. He suggested, for example,
the use of verbal communication instead of
formal, written communication whenever
possible.
 Mary Parker Follet
1925
The Psychological Foundations of Business Administration

Pioneered the notion of participative

leadership. Suggests that organizations are
communities involving networks of groups.
Workers and managers equally share power
and responsibility for decision making and
therefore, their outcomes. She introduces
many contemporary concepts such as
leadership, motivation and empowerment.
 Douglas McGregor
1960
͞Human side of Enterprise
Theory X Managers
Workers must be coerced and controlled to work towards organizational goals.
Workers are inherently lazy, lack ambition and prefer to be directed rather than
take responsibilities.
Workers are self-centered and only care about themselves, not the
organization.
Workers dislike change and will resist it at all cost.
Theory Y Managers
Workers encouraged to develop their full potential will work towards
achieving organizational goals.
With appropriate incentives and support, workers will seek out and fulfill
responsibilities on their own.
Workers will apply their ingenuity, creativity and hard work to meet
organizational goals.
 The Hawthorne Effect
Productivity increases when workers believe
that they are being observed closely.
Employees perform better when managers
and co-workers make them feel valued.
Financial rewards are not necessarily
conducive
to increasing worker productivity.
Workers care about self-fulfillment,
autonomy, empowerment, social status and
personal relationships with co-workers.
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