DEVELOPMENT OF

MANAGEMENT THOUGHT

PRESENTED BY
MR. KARUA
DEVELOPMENT OF MANAGEMENT THOUGHT

 As a result of changes that continue to take place in

organizations over the years, management approaches have
continued to evolve for them to be more efficient.

 Consequently, different theories of management have been

developed, better known as schools of management thought
(theoretical frameworks for the study of management).

 Each school of thought is based on somewhat different

assumptions about human beings and the organizations in
which they work.
 DEVELOPMENT OF MANAGEMENT THOUGHT

 To date, the study of management has progressed

thought four main phases:

 Pre-classical era
 Classical era
 Neon classical era
 Contemporary/modern era
 I. PRE-CLASSICAL ERA

 This era represents the early practice of management

during which time management was highly
individualistic, ad hoc, autocratic and not
standardized at all.

 There were no guidelines for managers in the form of

managerial principles during this era.

 Managers at the time largely relied on personal

judgment, intuition and skill.
 I. PRE-CLASSICAL ERA

Main contributors

Robert Owen
 He advocated for the improvement of working and living
conditions of workers.

 He advocated for the abolition of child labor

Charles Barbage
 He built the first mechanical calculator which is a
prototype/model of modern computers.
 I. PRE-CLASSICAL ERA

 He predicted specialization of mental work (management)

besides technical work (Subordinates).

 He suggested profit sharing between owners of the business

and employees.

Henry P. Towne
 He outlined the importance of management as a science.

 He called for the development and documentation of

management principles.
 II. CLASSICAL/INDUSTRIAL ERA

 This era marked the first attempt at developing and

documenting guidelines to help managers to move away
from the traditional management ad hoc approach.

 This school of thought generally concerns ways to manage

work and organizations more effectively and efficiently.

 In the 2nd half of the 18th century, there was rapid growth of
industries which increased the complexity of the managerial
practice. This created the need to develop management
techniques which would be more effective and efficient.
 II. CLASSICAL/INDUSTRIAL ERA

 The classical era emphasized on structure in the organization hence

the term structural perspectives. It was characterized by attention
on job content, exercise of formal authority and responsibility,
division of labor, monetary incentives, and coordination of efforts.

 The school is made up of 3 schools of thought :

a) Scientific management school (Frederick Winslow Taylor)

b) Administrative management school (Henri Fayol)

c) Bureaucratic management school (Max Weber)

 II. CLASSICAL/INDUSTRIAL ERA
(a) Scientific management school (Frederick W. Taylor)

 A management approach that was introduced in an attempt to

create a mental revolution in the workplace. The theory analyzes
work flows to improve economic efficiency, especially labor
productivity.

 The main proponent of the theory was Fredrick W. Taylor, an

engineer at Midvale Steel Company (USA) at the time.

 Regarded as the father of scientific management, taylor observed

that management decisions were arbitrary and workers often
worked at unintentionally slow pace. There was no systematic
management and workers and management were often in conflict.
 II. CLASSICAL/INDUSTRIAL ERA

 This led Taylor to conduct a series of experiments to discover better

ways of managing work and most of his experiments involved time
and motion studies.

 From the experiments, he proposed the four scientific principles of

management.

Taylor’s scientific principles

i) Scientific analysis of work

 Managers should study tasks scientifically so as to determine and
decide an ideal method for accomplishing each task to replace the
hunch and intuition method previously called the rule of the thumb.
 II. CLASSICAL/INDUSTRIAL ERA

ii) Scientific selection of workers

 Workers should be scientifically selected based on their qualification
and trained to perform their jobs in an optimal manner.

iii) Co-operation
 He suggested friendly interaction between managers and workers
based on mutual self-respect. He pushed for an incentive wage
structure to achieve this.

iv) Division of labour

 There should be clear separation of duties so that management
should take responsibility for planning work and the primary
responsibility of workers is executing the plans.
 II. CLASSICAL/INDUSTRIAL ERA

b) Administrative management school (Henri Fayol)

 This theory focuses on the organization as a whole. This theory

attempts to come up with fundamental rules and principles to serve
as guidelines for managers.

 Unlike scientific management (which deals with jobs and work at an

individual level of analysis), administrative management provides a
more general theory of management.

 The main proponent of the theory was Henri Fayol, a French

Industrialist who published his book in 1916, wherein he provided
the famous 14 principles of management.
 II. CLASSICAL/INDUSTRIAL ERA
Fayol's 14 Principles of Management

 Division of Work – When employees are specialized, output can increase

because they become increasingly skilled and efficient.

 Authority & responsibility – Managers must have the authority to give orders,
but they must also keep in mind that with authority comes responsibility. The two
should be balanced.

 Discipline – Means respect for rules. Discipline must be upheld in organizations.

 Unity of Command – Employees should have only one direct supervisor.

 Unity of Direction – Teams with the same objective should be working under
the direction of one manager, using one plan. This will ensure that action is
properly coordinated.
 II. CLASSICAL/INDUSTRIAL ERA

 Subordination of Individual Interests to the General

Interest – The interests of one employee should not be allowed to
become more important than those of the group.

 Remuneration – Employee satisfaction depends on fair

remuneration for everyone.

 Centralization & decentralization– This principle refers to

how close employees are to the decision-making process. It is
important to aim for an appropriate balance.

 Scalar Chain – Employees should be aware of where they stand

in the organization's hierarchy, or chain of command
 II. CLASSICAL/INDUSTRIAL ERA
 Order – means systematic, orderly and proper arrangement of people
and materials. A right person should be placed at the right job and a right
thing should be placed at the right place.

 Equity – managers should treat their subordinates in a just and kind

manner so that they develop a feeling of dedication and attachment for
their work.

 Stability of Tenure of Personnel – Managers should strive to

minimize employee turnover. It is the duty of the management to offer job
security to their employees.

 Initiative – Employees should be given the necessary level of freedom to

create and carry out plans.

 Esprit de Corps – Organizations should strive to promote team spirit

and unity.
 II. CLASSICAL/INDUSTRIAL ERA

c) Bureaucratic management school (Max Weber)

 Bureaucracy refers to the red tape (excessive regulation or rigid conformity

to formal rules).

 It was popularized by Max Weber, a German sociologist at a time when

organizations were run like families.

 Based on observation, Weber concluded that many early organizations

were inefficiently managed with decisions based on personal relationships
and loyalty.

 He proposed a form of organization called a bureaucracy which is a

management approach that emphasizes strict adherence to explicit rules
and regulations.
 II. CLASSICAL/INDUSTRIAL ERA
PRINCIPLES OF BUREAUCRACY

1) Division of labor

 Weber advocated for functional specialization i.e. jobs should be broken down
into small defined tasks and employees should work in jobs which they are best
suited.

2) Formal rules and regulations

 There should be clear formal rules to provide standard operating procedures and
to specify the behavior desired of employees so as to facilitate consistency and
coordination.

3)Hierarchy of authority

 There should be a clear chain of command with multiple levels of authority to

establish reporting relationships and establish a basis of accountability of actions.
 II. CLASSICAL/INDUSTRIAL ERA
4) Impersonality

 Relationships among individuals should be governed through a system of

official authority and rules. Official positions should be free from personal
involvement and sentiments.

5) Formal selection

 He advocated for career advancement based on merit i.e. selection,

promotion of employees should be based on ability as proven by technical
qualification and competence.

6) Official records

 The organization should maintain proper written records so that the

decisions and activities of an organization are properly documented for
future reference.
 II. CLASSICAL/INDUSTRIAL ERA

Criticisms of Classical Era

 In as much as the classical era contributed immensely to the study and use
of the practice of management, it was criticized on the following grounds:

a) It looked at man as a rational economic being purely motivated by

economic incentives.

b) It placed too much emphasis on structure and attainment of

organizational goals ignoring people and their needs.

c) Psycho-social aspects of employees and group dynamics were given little

attention

d) It had no room for participative management so that authority was

formally, almost autocratically exercised.
 III. NEO - CLASSICAL ERA
(BEHAVIORAL PERSPECTIVE)

 The neoclassical theory was an attempt at incorporating

the behavioral sciences into management thought in order
to solve the problems caused by classical theory practices.
It is commonly referred to as behavioral perspective.

 This view developed in part, because of the perceived

weakness in the assumptions of the classical school. Its
proponents felt that the classical theorists disregarded
important aspects of organizational life, particularly as it
related to human behavior. The school focused on trying
to understand factors that affect human behavior at the
workplace.
 III. NEO - CLASSICAL ERA

It comprises of 4 schools of thought:

(a) Human Relations Movement

 An approach that tries to understand the effect of human factors (as
opposed to physical conditions) at the workplace.

 The greatest contribution to this theory was the Hawthorne experiments.

Hawthorne experiments/Studies (Elton Mayo)

 The Hawthorne studies were part of a refocus on managerial strategy

incorporating the socio-psychological aspects of human behavior in
organizations.
 III. NEO - CLASSICAL ERA

BACKGROUND

 Location: The Western Electric Company – Hawthorne

Plant (Chicago).

 Period: 1924 -1932

 Researchers: Initiated by the company in collaboration with

a National Research Agency, but were later joined
by a research team from the Harvard Business
School led by Professor Elton Mayo.

 Objective: Studying people especially in terms of social

relationships
 III. NEO - CLASSICAL ERA

THE EXPERIMENTS:

i) Illumination/lighting experiment

 These were performed to study the effect of shop-floor lighting on

worker productivity

 The quality of light was changed from time to time and it was discovered
that regardless of the intensity of lighting, productivity continued to
increase.

 The researchers concluded that there was no correlation between

lighting levels and product output so that other factors other than light
were at play.
 III. NEO - CLASSICAL ERA

ii) Relay assembly room experiment

 These were performed to test the effect of physical working conditions on

productivity

 The conditions of the experimental group were varied from time to time:
were allowed to operate without a supervisor, to leave work without
permission, lunch & rest breaks were eliminated and re-introduced, e.t.c.

 It was observed that productivity increased during this period irrespective of

how these factors were manipulated.

 It was concluded that social relationships among workers encouraged

motivation, workers like special attention, they also like to participate in
decision making etc.
 III. NEO - CLASSICAL ERA

iii) Bank wiring observation experiment

 Conducted to observe and study social relationships and social structures within a
group (Group dynamics)

 Pay incentives and productivity measures were removed so that the workers’ pay
dependent on the performance of the group as a whole, on the assumption that
efficient workers would put pressure on the less efficient ones to complete their work.

 It was observed that the group instead established its own standards of output and
social pressure was used to achieve the standards of output.

 The study confirmed the complexity of group relations and stressed the expectations
of the group over an individuals preference. Organizations were a complex social
system with significant informal groups that played a vital role in motivating workers.
 III. NEO - CLASSICAL ERA

Conclusions of the Hawthorne Studies

a) Psychological and social needs: economic incentives are not the

only method to motivate people.

b) Interest in workers: Giving special attention to workers increases

motivation

c) Social aspect of work: An organization is a social system, something

more than a formal structure of functions.

d) Recognition of workers: managers should appreciate the effort of

employees
 III. NEO - CLASSICAL ERA

d. Consultation: employees should be allowed to express their

views and have a voice in decision making.

e. Group dynamics: The behavior of an individual worker is

regulated by the informal social group. Therefore, management
should deal with workers as members of work-groups rather
than as individuals.

f. Communication: Good interaction between workers and

management enhances trust and respect.
 III. NEO - CLASSICAL ERA

(b) Mc Gregor’s theory X and Y

 Social psychologist Douglas McGregor developed two contrasting

theories that explained how managers' beliefs about what
motivates their people can affect their management style. He
labelled these Theory X and Theory Y.

 Theory X presents a pessimistic view of employees’ nature and

behavior at work, while Theory Y presents an optimistic view of
the employees’ nature and behavior at work.
 III. NEO - CLASSICAL ERA

Theory X
 Theory X managers tend to take a pessimistic view of their
people, and assume that they are naturally unmotivated and
dislike work. As a result, they think that team members need to
be prompted, rewarded or punished constantly to make sure
that they complete their tasks.

Theory X assumptions

 Employees inherently dislike work and, will attempt to escape it

whenever possible.
 III. NEO - CLASSICAL ERA

 Since’ employees dislike work, they must be coerced, controlled,

or threatened with punishment.

 An average employee needs formal direction

 Many employees rank job security on top, and they have little or
no aspiration/ ambition.

 Employees are self-centered and do not care about organization

goals
 III. NEO - CLASSICAL ERA

 Employees prefer to be led by others other than lead

others

 Employees resist change.

 Workers in general are not intelligent and are most

gullible.

 Workers are poor decision makers.

 III. NEO - CLASSICAL ERA

NB: A manger who holds this view about employees is likely to use
an authoritarian style of management. This approach is very
"hands-on" and usually involves micromanaging people's work to
ensure that it gets done properly.

Theory Y
 Theory Y managers have an optimistic, positive opinion of their
people. Theory Y managers believe that their employees are self-
directed, highly motivated, committed, highly skilled and capable
of exercise their efforts in an inherent manner in order to
achieve the individual and organizational objectives.
 III. NEO - CLASSICAL ERA

Theory Y assumptions

 Employees view work as being natural as rest or play.

 People will exercise self-direction and self-control if they are

committed to the objectives.

 The average person can learn to accept, even seek, responsibility.

 If the job is rewarding and satisfying, then it will result in

employees’ loyalty and commitment to organization.
 III. NEO - CLASSICAL ERA

 The employees have skills and capabilities.

 Workers solve problems creatively and imaginatively.

 Employees view work as fulfilling and challenging.

NB: On the other hand, a manager who holds this view about
employees is more likely adopt a participative management style.
Managers who use this approach trust their people to take
ownership of their work and do it effectively by themselves.
 III. NEO - CLASSICAL ERA

(c) Mary Parker Follett’s Management theory

 Follett’s organizational theory focuses on individuals, and

the power of autonomy in encouraging employees to work
collaboratively. A group would be successful if allowed to
define its own roles and work collaboratively.

 Follett developed the idea of leadership through ‘power

with’ not ‘power over’: in other words, the true leader
focuses on collaboration, with conflict resolved through
compromise.
 III. NEO - CLASSICAL ERA

 According to her, "leadership is not defined by the exercise of

power but by the capacity to increase the sense of power among
those led,”. "The most essential work of the leader is to create
more leaders."

 Follett argued that a single leader model, with a typical ‘boss’

figure barking out orders, could never be truly successful in a
complex organization. Allowing groups to use their own ideas
and experiences not only harnesses a great intelligence resource,
it also empowers employees by acknowledging their individual
skills.
 III. NEO - CLASSICAL ERA

Principles of Follet’s theory

i. Integration: workers of all levels should integrate to reach the

organization's goals. If conflict arises, the organizational
members should take into consideration the needs and interests
of each member. All the compatible needs should be integrated.
The aim, should be to come up with a win-win situation for each
member.

ii. Power with: genuine power is not "coercive" ("power over") but
"coactive" ("power with"). This means that the leader should
not target on gaining power over the others, but should share
power with them to ensure harmony and unity.
 III. NEO - CLASSICAL ERA

iii. Group power: Group power should be valued over personal

power. True leaders create group power, rather than
expressing personal power."

Follett’s principles of coordination

 Follett practiced these principles of coordination that helped

develop her theory of management:

1. Direct contact. Direct contact and proper communication

between employees and managers help organizations avoid
conflict and misunderstandings.
 III. NEO - CLASSICAL ERA

2. Early stages. Coordination should be learned and mastered

straight away from the outset i.e., planning and policy making.

3. Reciprocal relationship. Every worker, regardless of their level

in hierarchy, is responsible for pulling their weight and
integrating with the rest of the organization - it's a team effort.

4. Continuous process. Coordination must be maintained. It is a

never-ending process which must go on all the time in the
organization.
IV. CONTEMPORARY/MODERN ERA

 A management approach that views the

management process as a flexible, integrated
and complex activity.

 It advocates that managers view the firm as an

organic and open system that adapts to the
environment due to the frequent changes taking
place in the managerial context owing to the
phenomenon of liberalization and globalization.

 The era comprises of 3 main approaches:

 i. QUANTITATIVE APPROACH

 The quantitative approach applies statistics, optimization models,

information models, computer simulations, and other quantitative
techniques to the management process.

 Central to the quantitative approach is the principle that

organizations are decision-making units. These decision-making
units can be made more efficient by using mathematical models
that place relevant factors into numerical terms.

 The quantitative school of management is a result of the research

conducted during World War II (by British and American forces)
to deal with challenges of logistical and resource deployment in the
war.
 i. QUANTITATIVE APPROACH

This school consists of 3 branches;

(a)The management science

This branch of management theory focuses on the

development of mathematical and statistical models as a
simplified representation of a system, process, or
relationship as models, formula, and equations. These
techniques help managers make maximum use of
organizational resources to produce goods and services.
 i. QUANTITATIVE APPROACH

Managers use several science applications;

 Mathematical forecasting helps make projections that are

useful in the planning process.

 Inventory modeling helps control inventories by

mathematically establishing how and when to order a
product.

 Queuing theory helps allocate service personnel or

workstations to minimize customer waiting and service cost.
 i. QUANTITATIVE APPROACH

(b) Operations management

 This is a narrow branch of the quantitative approach to

management. It focuses on the operation and control of the
production process that transforms resources into finished goods
and services.

 These methods are used to achieve a higher level of efficiency in

operational tasks, such as plant layout, plant location, inventory
control, product distribution, product or process design, capacity
planning, facilities location & layout, etc.
.
 i. QUANTITATIVE APPROACH

(iii) Management information systems

 Management information systems focus on designing and

implementing computer-based information systems for business
organizations.

 In simpler terms, the MIS converts raw data into information and
provides the required information to each manager at the right
time in the needed form. The information allows for more
efficient management decision making.
 ii. SYSTEM APPROACH

 System approach considers the organization as a dynamic and

inter-related set of parts.

 A system is a set of different independent parts working together

in an interrelated manner to accomplish a set of objectives.

 Each sub-system derives its strength by its association and

interaction with the other sub-systems.

 The position and function of each sub-system can be analyzed

and understood only in relation to other sub-systems and to the
organization as a whole.
 ii. SYSTEM APPROACH

Elements of a system
 ii. SYSTEM APPROACH

 The approach to management stresses the interactive nature

and interdependence of internal and external factors in an
organization.

 Using the approach, the leadership of an organization should

see it as a unified part or major sector of the larger outside
corporate environment. Even a small activity/change in a
section of an organization has a substantial effect on other
sections.

 The approach is key to the coordination of all the processes in

an entity and strives for wholeness so that an organization
should function as a unit to achieve its goals.
 FEATURES OF SYSTEMS APPROACH TO MANAGEMENT

 Sub-Systems - Each organization is a system made up of a

combination of many sub-systems. These sub-systems are inter-
related.

 Holism - Each sub-system works together to make up a single

whole system. Decisions made in any subsystem affect the entire
system.

 Synergy - The collective output of the whole system is greater than

the sum of output of its sub-systems.

 Closed and Open Systems - The whole organization is an open

system made up of a combination of open and closed sub-systems.
 FEATURES OF SYSTEMS APPROACH TO MANAGEMENT

 System Boundary - The organization is separate from the

external environment made up of other systems.

 Interdependence - A system does not exist in a vacuum. It

receives information, material and energy from other
systems as inputs. These inputs undergo a transformation
process within a system and leave the system as output to
other systems.

 An organization is a dynamic system as it is responsive to

its environment. It is vulnerable to change in its
environment.
iii. Contingency/Situational approach

 A management approach based on the idea that there is no

one best way to manage and that to be effective, management
action should be tailored to the particular circumstances
faced by the organization.

 The school focuses on applying management principles and

processes as dictated by the unique characteristics of each
situation.

 The theory observes that every situation a manager will come

across will differ from earlier and later situations and will call
for a different approach and reaction.
 iii. Contingency/Situational approach

 Appropriate managerial action depends on the particular parameters of the

situation, hence managers should adopt an open system approach in order to
identify the internal and external variables that influence the appropriate
managerial action.

 The main parameters/contingent variables likely to influence the managerial

approach are:

 Firm’s strategy
 Size of organization
 Nature of environment the firm is operating in
 Technology
 Nature of work
 Organization culture
 Employee skills etc.
The end