THE EVOLUTION OF MANAGEMENT

CHAPTER 2
 LEARNING OBJECTIVES

• Understand how all these theories have relevance for contemporary

organizations

• Trace the development of these theories allows us to understand the

present and guide us to future management practice.

• Equip management students with additional alternatives and

answers to build into their decision-making models.
 INTRODUCTION

• Tracing the development of these theories allows us to

understand the present and guide us to future management
practice.

• History should equip management students with additional

alternatives and answers to build into their decision-making
models

• The driving force behind management theory is the quest to

find better ways in utilising organisational resources

• Management theory is a group of assumptions put forth to

explain the productivity issue.
THE EVOLUTION OF MANAGEMENT THEORY
 ORIGINS OF MODERN MANAGEMENT

• Evolution of management began in the late nineteenth century after

the industrial revolution

• Industrial revolution brought about economic, technical, and cultural

changes

• Mechanisation changed such issues as crafts production into large

scale manufacturing with semi-skilled or unskilled workers operated
machines
ORIGINS OF MODERN MANAGEMENT Contd
JOB SPECIALISATION AND DIVISION OF LABOUR
• Adam Smith, the famous economist travelled around England in
the 1700 studying the effects of industrial revolution

• He compared process of craft manufacture prior and post the

industrial revolution

• Ultimately, job specialisation and division of labour were born

• See next slide

JOB SPECIALISATION AND DIVISION OF LABOUR Contd
TRANSITION FROM JOB SPECIALISATION TO DIVISION
OF LABOUR
 CLASSICAL PERSPECTIVE: 3000 B.C

• Rational, scientific approach to management – make organizations

efficient operating machines

 Scientific Management

 Bureaucratic Organisations

 Administrative Polices
 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT
• Taylor believed that if the amount of time and effort that each
worker expends to produce a unit of output can be reduced by
increasing specialisation and division of labour, the production
process would become more efficient

• Taylor’s Four Principles

 Study the way workers perform their tasks, gather all informational
job knowledge that workers possess, and experiment with new ways
of improving how tasks are performed

 Codify the new methods of performing tasks into written rules and
standard operating procedures
 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT Contd
 Carefully select employees who posses skills and abilities that
match the needs of the task, and train them to perform the task
consistent with established rules and procedure

 Establish a fair or acceptable level of performance of a task, and

then develop a pay system that provides reward for performance
above the acceptable level

• Taylor believed that management and labour had common interest

in increasing productivity.
 Taylor based his management system on production line time
studies. instead of relying on traditional work methods, he analysed
and timed steel workers movements on a series of jobs.
 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT Contd

 Using time study he broke each job down into its components and
designed the quickest and best method of performing each
components. In this way he established.

• Employers to pay more productive workers higher rate than others.

using a “scientifically correct “rate that would benefit both the
company and workers.

• Thus the workers were urged to surpass their previous performance

standards to earn more pay .

• Taylor called his plan the differential rate system.

 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT Contd
• Reactions to Scientific Management Theory

 Workers felt as their performance increased, managers wanted them

to do more work for the same pay

 Increases in performance meant fewer jobs and threat to layoffs.

 Monotonous and repetitive

 Dissatisfaction

 His critics objected to the speed up condition that placed undue

pressure on employees to perform at faster and faster levels.
 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT Contd

 The emphasis on productivity and by extension profitability led

some managers to exploit both the workers and customers.

 As a result more workers joined unions and thus reinforced a pattern

of suspicious and mistrust that shaded labor relations for decades
 FREDERICK TAYLOR (1856 – 1915)
SCIENTIFIC MANAGEMENT Contd
• Contribution of the Scientific Management Theory

 The modern assembly line pours out finished products faster than
Taylor could ever imagined

 This production “Miracle” is just one legacy of scientific

management .

 In addition its efficiency techniques have been applied to many task

in non industrial organizations ranging from fat food service to the
training of surgeons.

• Scientific management was concerned with increasing the

productivity of the shop and the individual worker
 HENRY GANTT (1861-1919)
• Henry L.Gantt worked with Taylor on several projects but when he
went out on his own as a consulting industrial engineer, Gantt began
to reconsider tailors insensitive systems.

• Abandoning the differential rate system as having too little

motivational impact Gantt came up with new idea.

• Every worker who finished days assigned work load win 50 percent
bonus.

• Then he added a second motivation that the Supervisor would earn

a bonus for each workers who reached the daily standard.

• Plus a extra bonus if all the workers reached it.

 HENRY GANTT (1861-1919)
• This Gantt reasoned would spur super wiser to train their workers to
do a better job.

• Every workers progress was rated publicly and recorded an

individual bar charts

• He block on days the worker made the standard in red when he or

she fell below it.

• Going beyond this Gantt originated a charting system for production

was translated into eight languages and used through out the world .
 HENRY GANTT (1861-1919)
• Starting in 1920 ‘s it was used in Japan, Spain and Soviet Union; it
also formed that the basis of two charting device which were
developed to assist In planning ,managing and controlling complex
organization

 The critical path method (CPM) originated by DuPont

 Program Evaluation and Review Technique(PERT), developed by

Navy.

• Lotus 1-2-3 is also a creative application of the gantt chart.

 THE GILBRETHS
• Frank B. and Lillian M.Gilbreth(1968-1924) and (1878-1972) made
their contribution to the scientific management movement as a
husband and wife team.

• Lillian and Franck collaborated on fatigue and motion studies and

focus on ways on promoting the individual workers welfare.

• To them the ultimate aim of scientific management was to help

workers reach their full potential as human beings

• In their conception, motion and fatigue were intertwined ; every

motion that was eliminated reduced fatigue.

• Using motion picture cameras, they tried to find out the most
economical motions for each task in order to upgrade performance
and reduce fatigue.
 ADMINISTRATIVE PRINCIPLES

• The study of how to create an organisational structure that leads to

high efficiency and effectiveness

• Contributors

 Max Weber : 1864-1920

 Henri Fayol: 1841 - 1925

 THEORY OF BUREAUCRACY
• Max Weber : 1864-1920

 Developed the principles of bureaucracy – a formal system of

organisation and administration designed to ensure efficiency and
effectiveness
 THEORY OF BUREAUCRACY Contd
• 5 PRINCIPLES

• A managers formal authority derives from the position he or she

holds in an organisation

• People should occupy positions because of their performance,

not because of their social standing or personal contacts

• The extent of each position’s formal authority and task

responsibilities and its relationship to other positions in an
organisation, should be clearly specified
 THEORY OF BUREAUCRACY Contd
• 5 PRINCIPLES Contd

• Authority can be exercised effectively in an organisation when

positions are arranged in a hierarchy, so employs know who they
report to and who report to them

• Managers should create a well-defined system of rules, standard

operating procedures, and norms so that they effectively control
behaviour within an organisation
 THEORY OF BUREAUCRACY Contd
• Rules

• Formal written instructions that specify actions to be taken under

different circumstances to achieve specific goals

• Rule Example: At the end of the day, employees are to leave their
machines in good order
 THEORY OF BUREAUCRACY Contd
• Norms

• Norms are unwritten, informal codes of conduct that prescribe

how people should act in particular situations

• Norms Example: An organisational norm in a restaurant might be

that waiters should help each other if time permits
 THEORY OF BUREAUCRACY Contd
• Standard Operating Procedures

• Specific sets of instructions about how to perform a certain aspect

of a task

• SOP Example: Specifies exactly how they should do so, which

machine parts should be oiled or changed
 HENRI FAYOL (1841-1925)
• Hailed as the founder of the classical management school –not
because he was the first to investigate managerial behaviour but
because he was the first to systematize it

• Five principles of management

 Planning

 Organizing

 Commanding

 Coordinating

 Controlling
 HENRI FAYOL (1841-1925)

• Hailed as the founder of the classical management school –not

because he was the first to investigate managerial behaviour but
because he was the first to systematize it.
• Fourteen Points
 Division of Labour
 Authority
 Discipline
 Unity of command
 Unity of direction
 Subordination of individual interest
 Remuneration
 HENRY FAYOL

• Fourteen Points Contd

 Centralization
 Scalar chain
 Order
 Equity
 Stability and tenure of staff
 Initiative
 Esprit de corps
 BEHAVIORIAL MANAGEMENT THEORY
• The study of how managers should behave to motivate employees
and encourage them to perform at high levels and be committed to
the achievement of organisational goals

• Contributors

 Mary Parker Follet

 The Hawthorn Studies and Human Relations

 Theory X and Y
 MARY PARKER FOLLET
• Advocated for a human relations emphasis

• Stressed the interrelations of management and employees

• She contrasted with Scientific Management of Fredrick Taylor

• She coined the words ‘power-over’ and ‘power – with’ to

differentiate coercive power from participative decision making

• She was of the view that authority should go with knowledge

• Advocated involvement of workers in job analysis and work

development process
 THE HAWTHORN STUDIES
• Managers of different departments should communicate with each
other directly

• Recommend cross functionality

 HAWTHORNE STUDIES
• Hawthorne effect is the finding that a manager’s behaviour or
leadership approach can affect worker’s level of performance

 Ten year study

 Four experimental & three control groups
 Five different tests
 Test pointed to factors other than illumination for productivity
 1st Relay Assembly Test Room experiment, was controversial, test
lasted 6 years
 Interpretation, money not cause of increased output
 Factor that increased output, Human Relations
 HUMAN RELATIONS
• Suggests jobs should be designed to meet higher-level needs by
allowing workers to use their full potential

• Advocates of the idea that supervisors receive behaviourial training

to manage subordinates in ways that elicit their cooperation and
increase their productivity
 THEORY X AND Y
• Douglas McGregor proposed Theory X and Y as assumptions about
how work attitudes and behaviours not only dominate how managers
think but also how they behave in an organisation.

• Theory X Assumptions
 Average worker is lazy

 Dislikes work

 Will try to do as little as possible

 Have little ambition and avoids responsibilities

• To keep performance high, workers must be supervised closely and

their behaviours be controlled by means of ‘carrot and stick’ –
rewards and punishments
 THEORY X AND Y Contd
• Design and shape work settings to maximise control over workers’
behaviour

• Minimise the workers’ control over the pace of work

• Focus is on development of rules, SOPs, and a well defined system

of rewards and punishment to control behaviour

• Managers see little point in giving autonomy to solve their own

problems

• Managers see their role as to closely monitor workers

 THEORY X AND Y Contd
• Theory Y Assumptions

 Workers are not inherently lazy

 Do not naturally dislike work

 If given opportunity, workers will do the best for an organisation

 Characteristics of the work setting determine whether a worker

views work as a source of satisfaction or punishment

 Mangers do not need to closely monitor the workers behaviour

 They exercise self - control

 MANAGEMENT SCIENCE
• An approach to management that uses rigorous quantitative
techniques to help managers make maximum use of organisational
resources

• Composed of

 Quantitative Techniques

 Operations Management

 Total Quality Management

 Management Information Systems

• Other approaches include Learning Organisations, Contingency

Approach and Systems Approach.
 SUMMARY
• Management theory evolution was and still the result of changes
in the environment

• Management theories can only be studied meaningfully against

the culture of their time

• The classical approaches to management was developed in the

1950’s – emphasis was on the internal functioning of an
organisation.

• Taylor introduced the scientific management – ‘one best way to

complete production tasks’

• Process or administrative management perspective emerged at

about the same time.

 SUMMARY Contd
 Fayol – four management functions to solve productivity problems

 Weber bureaucratic approach – specialised positions, structured

relationships, and rules and regulations

• The Human Relations Approach – focused on workers, groups,

organisation processes to solve productivity

• Quantitative Approach – computers to solve management problems

• Contemporary Approach
 Developed after WWII
 Business environment became more turbulent
 Focus on interaction internal and external environment
 Internal/organisation realised as an open system
 SUMMARY Contd
• Contingency approach off shoot of systems approach – there is no
‘single way to manage’

• Learning organisation approach to management – developed from

systems approach
 Lifelong learning
 Scrutinising mental models
 Sharing a vision for the organisation
 Active dialogue within an organisation

• TQM – continuous improvement, never being satisfied for with

quality

• Re-engineering - reinventing the organisation, quantum leap to

adapt to extremely turbulent environment
 SUMMARY Contd
• Today’s managers need eclectic approach managing the
contemporary, flexible organisation
THE END