Evolution of Management Thought

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Deemed to be University
Evolution of Management
Excellence and Service

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Context of Industrial Revolution- Late 1700s to 1800s
● Big changes in the way people work

● Rapid explosion of big factories
● People move from farms to factories
● People move from small shops to large companies
● 3 Ingredients – Power, Machinery and Transportation sparked Industrial
Revolution

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Major Issues
● Large group of people working together
● People working alongside machinery
● Increasing pace of Industry
● Companies were looking more effective ways to handle new challenges

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Classical Management Theories

● Developed during the Industrial Revolution when new problems related to
the factory system began to appear
● Need to increase productivity and efficiency
● Efforts to find the “one best way” to perform and manage tasks.
● They represent early works on management and focus on increasing
industrial output by providing financial incentives to employees
● The classical approach was developed through three main streams:
Scientific management, Administrative theory and Bureaucracy

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Frederick Taylor
● Frederick Taylor is often called the “father of scientific management.”
Taylor developed his theory on the basis of his work experience in three
companies: Midvale Steel works, Simond Rolling mills and Bethlehem
Steel company.
● Organizations should study tasks and develop precise procedures.
● Focused on finding the best way to do the job by eliminating wastage of
men and material
● Developed time and motion studies to find optimum time and nature of
operations for successful completion of tasks.
● Introduced differential wage rate system to pay more to productive
workers
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● In 1898, Taylor calculated how much iron from rail cars Bethlehem Steel
plant workers could be unloading if they were using the correct
movements, tools, and steps.
● The result was an amazing 47.5 tons per day instead of 12.5 tons each
worker had been averaging.
● Taylor was able to increase the length of work time and therefore
decrease the number of people shoveling from 500 to 140.
● Lastly, he developed an incentive system that paid workers more money
for meeting the new standard. Productivity at Bethlehem Steel shot up
overnight. As a result, many theorists followed Taylor’s philosophy when
developing their own principles of management.
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Principles of Taylor’s theory

● Rule of thumb should be replaced with science
● There should be harmony, not discord in group actions
● Cooperation, not individualism
● Maximum output, not restricted output
● Development of workers to their fullest capacity.

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Henry Gantt
Henry Gantt an associate of Taylor’s, developed the Gantt chart, a bar graph
that measures planned and completed work along each stage of pro-
duction.
Based on time instead of quantity, volume, or weight, this visual display
chart has been a widely used planning and control tool since its
development in 1910.

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Frank and Lillian Gilbreth

● Husband-and-wife team , studied job motions.
● He watched bricklayers and saw that some workers were slow and
inefficient, while others were very productive.
● He discovered that each bricklayer used a different set of motions to lay
bricks
● Frank isolated the basic movements necessary to do the job and
eliminated unnecessary motions. Workers using these movements raised
their output from 1,000 to 2,700 bricks per day.
● This was the first motion study designed to isolate the best possible
method of performing a given job

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Thanks to these contributors and others, the basic ideas regarding

scientific management developed
● Developing new standard methods for doing each job

● Selecting, training, and developing workers instead of allowing them
● to choose their own tasks and train themselves
● Developing a spirit of cooperation between workers and management to
ensure that work is carried out in accordance with devised procedures
● Dividing work between workers and management in almost equal shares,
with each group taking over the work for which it is best fitted

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Classical administrative school

● Whereas scientific management focused on the productivity of
individuals, the classical administrative approach concentrates on the total
organization.
● The emphasis is on the development of managerial principles rather than
work methods.
Contributors to this school of thought include Max Weber, Henri Fayol, Mary
Parker Follett, and Chester I. Barnard.

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Max Weber
Max Weber disliked that many European organizations were managed on a
“personal” family-like basis and that employees were loyal to individual
supervisors rather than to the organization.
Weber believed that all bureaucracies have the following characteristics

● A well-defined hierarchy: All positions within a bureaucracy are
structured in a way that permits the higher positions to supervise and
control the lower positions. This clear chain of command facilitates control
and order throughout the organization.

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● Division of labor and specialization: All responsibilities in an

organization are specialized so that each employee has the necessary
expertise to do a particular task.
● Rules and regulations: Standard operating procedures govern all
organizational activities to provide certainty and facilitate coordination.
● Impersonal relationships between managers and employees: Managers
should maintain an impersonal relationship with employees so that
favoritism and personal prejudice do not influence decisions.

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● Competence: Competence, not “who you know,” should be the basis for
all decisions made in hiring, job assignments, and promotions in order to
foster ability and merit as the primary characteristics of a bureaucratic
organization.
● Records. A bureaucracy needs to maintain complete files regarding all its
activities.

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Henri Fayol
● Known as ‘father of modern management theory’, gave a new perception
of the concept of management. He introduced a general theory that can be
applied to all levels of management and every department. The Fayol
theory is practiced by the managers to organize and regulate the internal
activities of an organization. He concentrated on accomplishing managerial
efficiency.
● Developed 14 principles of management based on his management
experiences

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● Division of work: Division of work and specialization produces more and

better work with the same effort.
● Authority and responsibility: Authority is the right to give orders and the
power to exact obedience. A manager has official authority because of her
position, as well as personal authority based on individual personality,
intelligence, and experience. Authority creates responsibility.
● Discipline: Obedience and respect within an organization are absolutely
essential. Good discipline requires managers to apply sanctions whenever
violations become apparent.

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● Unity of command: An employee should receive orders from only one

superior.
● Unity of direction: Organizational activities must have one central
authority and one plan of action.
● Subordination of individual interest to general interest: The interests of
one employee or group of employees are subordinate to the interests and
goals of the organization.
● Remuneration of personnel: Salaries — the price of services rendered by
employees — should be fair and provide satisfaction both to the employee
and employer.

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● Centralization: The objective of centralization is the best utilization of

personnel. The degree of centralization varies according to the dynamics of
each organization.
● Scalar chain: A chain of authority exists from the highest organizational
authority to the lowest ranks.
● Order: Organizational order for materials and personnel is essential. The
right materials and the right employees are necessary for each
organizational function and activity.
● Equity: In organizations, equity is a combination of kindliness and justice.
Both equity and equality of treatment should be considered when dealing
with employees.

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● Stability of tenure of personnel: To attain the maximum productivity of

personnel, a stable work force is needed.
● Initiative: Thinking out a plan and ensuring its success is an extremely
strong motivator. Zeal, energy, and initiative are desired at all levels of the
organizational ladder.
● Esprit de corps: Teamwork is fundamentally important to an organization.
Work teams and extensive face-to-face verbal communication encourages
teamwork.

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Mary Parker Follett

● Stressed the importance of an organization establishing common goals for
its employees.
● She began to talk about such things as ethics, power, and leadership.
● She encouraged managers to allow employees to participate in decision
making.
● She stressed the importance of people rather than techniques — a
concept very much before her time.
● As a result, she was a pioneer and often not taken seriously by
management scholars of her time.
● Much of what managers do today is based on the funda- mentals that
Follett established more than 70 years ago.
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Chester Barnard
Chester Barnard who was president of New Jersey Bell Telephone Com-
pany, introduced the idea of the informal organization Barnard felt that four
factors affected the willingness of employees to accept authority:
● The employees must understand the communication.

● The employees accept the communication as being consistent with the
organization’s purposes.
● The employees feel that their actions will be consistent with the needs
and desires of the other employees.
● The employees feel that they are mentally and physically able to carry out
the order.
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Drawbacks of Classical Theory
● Classical thinkers concentrated only on line and staff structures. They did not
try to find out the reasons if a particular structure is more effective than
others.
● This theory did not lay emphasis on decision-making processes.
● Human behaviour was ignored in this theory. Classical thinkers did not
realize the complexity of human nature. They take human beings as an
instrument of organisation performing the assigned task.
● The assumption that organisation in a closed system is unrealistic.
Organisation is greatly influenced by environment and vice-versa. A modern
organisation is an open system which has interaction with the environment.

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Behavioral Management Theory
● Questions began to come up regarding the interactions and motivations of the individual within
organizations
● The behavioral management theory is often called the human relations movement because it
addresses the human dimension of work
● Behavioral theorists believed that a better understanding of human behavior at work, such as
motivation, conflict, expectations, and group dynamics, improved productivity.
● The theorists who contributed to this school viewed employees as individuals, resources, and assets to
be developed and worked with — not as machines, as in the past

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Hawthorne Studies
Elton Mayo’s contributions came as part of the Hawthorne studies, a series of experiments that rigorously
applied classical management theory only to reveal its shortcomings
● The Hawthorne experiments consisted of two studies conducted at the Hawthorne Works of the Western
Electric Company in Chicago from 1924 to 1932
● The first study was conducted by a group of engineers seeking to determine the relationship of lighting
levels to worker productivity.
● Discovered that worker productivity increased as the lighting levels decreased — that is, until the
employees were unable to see what they were doing, after which performance naturally declined.

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Part I - Illumination Experiments (1924-27)
These experiments were performed to find out the effect of

different levels of illumination (lighting) on productivity of labour.
The brightness of the light was increased and decreased to find
out the effect on the productivity of the test group. Surprisingly,
the productivity increased even when the level of illumination was
decreased. It was concluded that factors other than light were
also important.

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Part II - Relay Assembly Test Room Study (1927-1929)
Under these test two small groups of six female telephone relay
assemblers were selected. Each group was kept in separate
rooms. From time to time, changes were made in working hours,
rest periods, lunch breaks, etc. They were allowed to choose
their own rest periods and to give suggestions. Output increased
in both the control rooms. It was concluded that social
relationship among workers, participation in decision-making, etc.
had a greater effect on productivity than working conditions.

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Part III - Mass Interviewing Programme (1928-1930)
21,000 employees were interviewed over a period of three years

to find out reasons for increased productivity. It was concluded
that productivity can be increased if workers are allowed to talk
freely about matters that are important to them.

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Part IV - Bank Wiring Observation Room Experiment (1932)
A group of 14 male workers in the bank wiring room were placed under
observation for six months. A worker's pay depended on the
performance of the group as a whole. The researchers thought that the
efficient workers would put pressure on the less efficient workers to
complete the work. However, it was found that the group established
its own standards of output, and social pressure was used to achieve
the standards of output.

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Conclusions of Hawthorne Studies / Experiments
● The social and psychological factors are responsible for workers'

productivity and job satisfaction. Only good physical working
conditions are not enough to increase productivity.
● The informal relations among workers influence the workers'
behaviour and performance more than the formal relations in the
organisation.
● Employees will perform better if they are allowed to participate in
decision-making affecting their interests.
● Employees will also work more efficiently, when they believe that
the management is interested in their welfare.

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● When employees are treated with respect and dignity, their

performance will improve
● Financial incentives alone cannot increase the performance.
Social and Psychological needs must also be satisfied in order
to increase productivity.
● Good communication between the superiors and subordinates
can improve the relations and the productivity of the
subordinates.
● Special attention and freedom to express their views will
improve the performance of the workers.

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Criticism of Hawthorne Studies / Experiments
● Lacks Validity : The Hawthorne experiments were conducted under controlled situations.
These findings will not work in real setting. The workers under observation knew about the
experiments. Therefore, they may have improved their performance only for the experiments.
● More Importance to Human Aspects : The Hawthorne experiments gives too much
importance to human aspects. Human aspects alone cannot improve production. Production
also depends on technological and other factors.
● More Emphasis on Group Decision-making : The Hawthorne experiments placed too
much emphasis on group decision-making. In real situation, individual decision-making
cannot be totally neglected especially when quick decisions are required and there is no time
to consult others.
● Over Importance to Freedom of Workers : The Hawthorne experiments gives a lot of
importance to freedom of the workers. It does not give importance to the constructive role of
the supervisors. In reality too much of freedom to the workers can lower down their
performance or productivity.

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Abraham Maslow
Developed one of the most widely recognized need theories, a theory of
motivation based upon a consideration of human needs.
● Human needs are never completely satisfied.

● Human behavior is purposeful and is motivated by the need for
● satisfaction.
● Needs can be classified according to a hierarchical structure of impor-
tance, from the lowest to highest.

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Maslow’s hierarchy

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Douglas McGregor
● Douglas McGregor was heavily influenced by both the Hawthorne stud-ies
and Maslow.
● He believed that two basic kinds of managers exist.
● One type, the Theory X manager, has a negative view of employees and
assumes that they are lazy, untrustworthy, and incapable of assuming
responsibility.
● On the other hand, the Theory Y manager assumes that employees are
not only trustworthy and capable of assuming responsibility, but also have
high levels of motivation.

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● One type, the Theory X manager, has a

negative view of employees and assumes
that they are lazy, untrustworthy, and
incapable of assuming responsibility.
● On the other hand, the Theory Y manager
assumes that employees are not only
trustworthy and capable of assuming
responsibility, but also have high levels of
motivation.

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Quantitative School of Management

● During World War II, mathematicians, physicists, and other scientists
joined together to solve military problems.
● The quantitative school of management is a result of the research
conducted during World War II.
● The quantitative approach to management involves the use of
quantitative techniques, such as statistics, information models, and
computer simulations, to improve decision making.

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Management science
● The management science school emerged to treat the problems
associated with global warfare.
● Today, this view encourages managers to use mathematics, statistics, and

other quantitative techniques to make management decisions.
● Managers can use computer models to figure out the best way to do
something saving both money and time.

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Operations management
Operations management is a narrow branch of the quantitative approach to
management. It focuses on managing the process of transforming materials,
labour, and capital into useful goods and/or services.
● What do they want?
● Where do they want it?
● When do they want it?
Based on the answers to these questions, managers line up resources and
take any action necessary to meet customer expectations.

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Management information systems

● Management information systems (MIS) is the most recent subfield of
the quantitative school.
● A management information system organizes past, present, and projected
data from both internal and external sources and processes it into usable
information, which it then makes available to managers at all
organizational levels.
● As a result, managers can identify alternatives quickly, evaluate
alternatives by using a spreadsheet program, pose a series of “what-if”
questions, and finally, select the best alternatives based on the answers to
these questions.

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Systems Theory Approach

● A system is a set of INTERRELATED but separate parts working towards
a common purpose
● This approach considers organization as a whole because of the
interdependent nature of activities, requiring organization to interact with
the external environmental factors.
● Subsystems have proper order and communication between them.
● Decisions are based on impacts on various subsystems

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Contingency School of Management

● Contingency approach states that there is “no one best way” to manage an
organization. It is also known as situational approach.
● Managers with a contingency view use a flexible approach, draw on a

variety of theories and experiences, and evaluate many options as they
solve problems
● Contingency thinking avoids the classical “one best way” arguments and
recognizes the need to understand situational differences and respond
appropriately to them

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● External Contingency Factors

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Main propositions of neo classical theories

● The organisation in general is a social system composed of
numerous interacting parts.
● Informal organisations exist within the formal organisation.
● Human being is independent and his behaviour can be predicted
in terms of social factors at work.
● Motivation is a complex process. Many socio- psychological
factors operate to motivate human beings at work.
● Team-work is essential for higher productivity.
● Communication is necessary as it carries information for the
functioning of the organisation and the feelings of the people at
work.
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Key themes -Management in the Future

● The commitment to meet customer needs 100 percent of the time guides
organizations toward quality management and continuous improvement
of operations.
● Today’s global economy is a dramatic influence on organizations, and
opportunities abound to learn new ways of managing from practices in
other countries.
● Organizations must reinvest in their most important asset, their people
working themselves out of a job.
● Managers must excel in their leadership responsibilities to perform
numerous different roles.

Managerial Roles
Managerial roles can be defined as the organized sets of behaviors

identified with the position.
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Henry Mintzberg –identified ten roles a manager performs and

classified into three category.
● Role is the pattern of

behavior which is defined
for different positions.
● It is the expected
behavior of the occupant
of a position- not all
behavior.

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Interpersonal Role
● Interpersonal role of a manager is concerned with interacting with other
persons, both the organizational members and outsiders. Involving people
(subordinates and persons outside the organization) and other duties that
are ceremonial and symbolic in nature
● There are three types of interpersonal role

-Figurehead role
-Leader role
-Liaison role

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Figurehead role
● In this role, every manager performs some duties which are ceremonial in
nature.
● Greeting the dignitaries, Attending the wedding of an employee, Taking an

important customer to lunch, handing out merit certificates and award to
outstanding employees, etc.,

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Leader Role
As a leader, every manager must motivate and encourage his

employees.
Willing contributions come from subordinates when they see in a

manager exemplifying behavior.
A manager must also try to reconcile their individual needs with goals
of organization.
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Liaison role
● The manager serves as a connecting link between his organization and

outsider or between his unit and other organizational units.
● The major objectives of this role is to maintain a link between the

organization and its external environment.

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Informational Roles
● Informational roles of a manager include communication-giving and
receiving information-both within and outside the organization. nvolving
collecting, receiving, and disseminating information .Information is
required to make decision effective.
● There are three types of informational role

-Monitor
-Disseminator
-Spokesperson

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Monitoring Role
● The manager constantly collects information about those
factors which affects his activities.
● Such factors maybe within the organization as well as outside
it.
● Managers has to perpetually scan his environment for
information, interrogate his liaison contacts and his
subordinates, and receive unsolicited information, much of it
as a result of the network of personal contacts he has
developed.
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Disseminator role
The manager passes some of his privileged information directly to his key subordinates
who would otherwise have no access to it
Spokesman
The manager represents his organization or unit while interacting with outsiders.
These may be customers, financiers, government, suppliers, or other agencies of the society.
The manager must win their support by effectively managing the social impact of his
organization.

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Decisional Role
Decisional role of a manager involve choosing the most appropriate

alternative out of the available ones so that the organization achieves
its objectives when the chosen alternative is put into action.
In his decisional roles, the manager performs four roles

Entrepreneur
Disturbance handler
Resource allocator
Negotiator
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Entrepreneur
The manager assumes certain risk which is involved in terms of the

outcome of an action because these are affected by a variety of
external factors.
Since theses factors are dynamic and change constantly, the manager is
required to bring suitable changes in the organizational processes to
align these with the requirement of the environment.

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Disturbance handler
In the role of a disturbance handler manager has to work reactively.

He must seek solutions of various unanticipated problems like a
strike, a major customer may go bankrupt, change of government
policy, market volatility, etc.,
The manager must be in a position to handle the forces and events

which tend to disturb the organizational equilibrium and normal
functioning.

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Resource Allocator
The manager allocates resources-human, physical, and financial to

various organizational units according to their needs.

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Negotiator
The managers at all levels has to spend considerable time in

negotiations.
The manager negotiates with various interest groups in the

organizations like shareholders, employees, outside agencies etc.
The top level management may negotiate with trade union leaders
about strikes, where as the foreman may negotiate with the workers
on their grievance.
Managerial Skills
Skills refers to practical ability or expertness in an action or doing

something
In order to perform various management functions effectively,
managers must possess certain skills.
Skills refers to practical ability or expertness in an action or doing

something.
From the very beginning of the development of management thought,

both management practitioners and researchers have emphasized
different skills for managers.
Robert Katz has grouped various managerial skills into three broad
categories
Technical skills
Human skills
Conceptual skills
Conceptual skill deals with ideas,

technical skills with things and
human skill with people.
Technical Skills
The technical skill is the managers understanding of the nature of job

that people under him have to perform.
It refers to a persons knowledge and proficiency in any type of process

or technique.
Technical skills are concerned

with what is done
These pertain to knowledge and proficiency in processes, procedures,
methods, and techniques which are used in doing work.
Boulton has called these skills as hard skills and are easily visible in a
person.
Technical skills learned by accountants, engineers, managers, and

other persons are developed by the actual practice of job.
Technical skills and competence seems to be more important at the
lower levels of management, its relative importance as a part of the
managerial role diminishes as the manager moves to higher positions.
In higher functional positions the technical component becomes less

important.
Human Skills
Human skills also referred to as human relation skills, are one’s ability
to work effectively with others on a person-to-person basis and to
build up cooperative group relations to accomplish organizational
objectives.
Human relations skills develops in the manager sufficient ability to
1)To recognize the feelings and sentiments of others
2)To judge the possible reaction to, and outcome of various course of
action he may undertake
3)To examine his own concepts and values which may enable him to
develop more useful attitudes about himself.
Conceptual skills
Conceptual skills refers to the ability of a manager to take a broad and

farsighted view of the organization and its future, his/her ability to
think in abstract, his/her ability to analyze the forces working in a
situation, his/her creative and innovative ability and his/her ability to
conceptualize the environment, the organization, and his own job, so
that he/she can set appropriate goals for the organization.
Conceptual skills are in the form of imagination, fantasy, notional, or
vision.
Boulton called these as soft skills and are hardly visible in a person.
In the context of management, conceptual skills are also known as

general management skills and refer to the ability to see the whole
picture.
For managers, conceptual skills are required for
1)For making decisions, particularly non-programmed or strategic

decision, conceptual skills are required.
2)Conceptual skills are relevant for building models. A model is an

abstraction of reality, a simplified representation of some real-world
phenomenon.

Evolution of Management Thought

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CHRIST

Excellence and Service

Context of Industrial Revolution- Late 1700s to 1800s

● Big changes in the way people work

Excellence and Service

Excellence and Service

Classical Management Theories

Excellence and Service

Principles of Taylor’s theory

Excellence and Service

Excellence and Service

Excellence and Service

Frank and Lillian Gilbreth

Excellence and Service

Thanks to these contributors and others, the basic ideas regarding

● Developing new standard methods for doing each job

Excellence and Service

Classical administrative school

Excellence and Service

Weber believed that all bureaucracies have the following characteristics

Excellence and Service

● Division of labor and specialization: All responsibilities in an

Excellence and Service

Excellence and Service

Excellence and Service

● Division of work: Division of work and specialization produces more and

Excellence and Service

● Unity of command: An employee should receive orders from only one

Excellence and Service

● Centralization: The objective of centralization is the best utilization of

Excellence and Service

● Stability of tenure of personnel: To attain the maximum productivity of

Excellence and Service

Mary Parker Follett

● The employees must understand the communication.

Drawbacks of Classical Theory

Excellence and Service

Behavioral Management Theory

Excellence and Service

Excellence and Service

Part I - Illumination Experiments (1924-27)

These experiments were performed to find out the effect of

Excellence and Service

Part II - Relay Assembly Test Room Study (1927-1929)

Excellence and Service

Part III - Mass Interviewing Programme (1928-1930)

21,000 employees were interviewed over a period of three years

Excellence and Service

Part IV - Bank Wiring Observation Room Experiment (1932)

Excellence and Service

Conclusions of Hawthorne Studies / Experiments

● The social and psychological factors are responsible for workers'

Excellence and Service

● When employees are treated with respect and dignity, their

Excellence and Service

Criticism of Hawthorne Studies / Experiments

Excellence and Service

● Human needs are never completely satisfied.

Excellence and Service

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● One type, the Theory X manager, has a

Excellence and Service