Principles of Management

Chapter 2
EVOLUTION OF
MANAGEMENT THOUGHT
Prepared by:
MARWENA M. DIAZ, DBA
CABA Instructor
OBJECTIVES:

After studying this chapter, you will be able to:

 Identify
the stages of development of
management,
 Know the people who have made major
contributions in the field of management, and
 Identify the differences between each influences.
WHAT IS MANAGEMENT?

 Management is the process through which an

organization get things done through its people
which eventually helps in achievement of the
common objectives of the people and the
organization as a whole.
EVOLUTION OF MANAGEMENT
1. MANAGEMENT IN ANCIENT CIVILIZATION
2. CLASSICAL MANAGEMENT SCHOOL (1880-1930)
3. NEO CLASSICAL MANAGEMENT SCHOOL (1920-1950)
4. MODERN MANAGEMENT SCHOOL (FROM 1950)
MANAGEMENT IN THE ANCIENT CIVILIZATION
 Management existed even during the ancient
civilization.
 People of the olden days where food gatherers, making their
living by hunting, fishing and collecting nuts and berries.
 Even during the primitive period some aspects of management
was prevalent/establish.
 Primitive society had its codes for the conduct of
business, rules regarding the roles of parents,
punishments for wrong doing, rites for the worship of
gods etc.
CONTRIBUTORS TO ANCIENT MANAGEMENT
 Egyptian government:
 The study of Egyptian government through different periods
showed their recognition of the principal of control of an
extended operation through centralized organization.
 Babylonian Empire:
 The most significant contribution of Babylonians to
management thought was the codes of law which gave us a real
sight into their thinking on management. The concept of
responsibility was well recognized in the code.
CONTRIBUTORS TO ANCIENT MANAGEMENT
 Hebrews:
 The Hebrews had a great contribution in the field of
management. It was clearly stated in the book of Exodus in
Bible that Moises made use of the principal of delegation and
exception, personnel selection and training.
 Chinese:
 The Chinese were aware of certain principals bearing in
organizing, planning, directing and controlling. Records
indicate that the Chinese government started the scientific
selection of workmen by means of examination about 120.B.C.
CLASSICAL
MANAGEMENT
SCHOOL
CLASSICAL MANAGEMENT SCHOOL
 One of the first schools of management thought, the classical
management theory, developed during the Industrial
Revolution when new problems related to the factory
system began to appear.
 Managers were unsure of how to train employees (many of
them non‐English speaking immigrants) or deal with
increased labor dissatisfaction, so they began to test
solutions. As a result, the classical management theory
developed from efforts to find the one of the best ways to
perform and manage tasks.
CONTRIBUTORS TO CLASSICAL MANAGEMENT SCHOOL

 FREDRICK TAYLOR(1856-1915)
 HENRY GANTT(1861-1919)
 FRANK(1868-1924)
 LILLIAN GILBERT(1878-1972)
 MAX WEBBER(1864-1920)
 HENRY FAYOL(1841-1925)
 MARY PARKER FOLLETT(18681933)
FREDRICK TAYLOR(1856-1915)
 “Father of scientific management.”
 Taylor believed that organizations should study tasks and
develop precise procedures.
 He proposed an objective and systematic method for
doing the work in the best way possible using scientific
selection and training methods.
 He ensured that there is co-operation and clear division
of responsibility between managers and workers and
proper pay for performance.
Principles of Scientific Management

 Replacement of Rule of Thumb

 Co-operation
 Development of Workers
 Maximum Output
 Distribution of Work
HENRY GANTT(1861-1919)
 Gantt is often seen as a disciple of Taylor and a
promoter of the scientific school of management.
In his early career, with the influence of Taylor -
and Gantt’s aptitude for problem solving - resulted
in attempts to address the technical problems of
scientific management.
 Like Taylor, Gantt believed that it was only the application
of scientific analysis to every aspect of work which could
produce industrial efficiency, and that improvements in
management came from eliminating chance and accidents.
FRANK AND LILLIAN GILBERT
 Frank and Lillian Gilbert, a husband‐and‐wife team, studied job
motions.
 In Frank's early career as an apprentice bricklayer, he was interested
in standardization and method study. 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. From his observations, 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. Later, Frank and his wife Lillian
studied job motions using a motion‐picture camera and a split‐second
clock. When her husband died at the age of 56, Lillian continued their
work.
Thanks to these contributors, the basic ideas
regarding scientific management developed. They
include the following:
 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.
MAX WEBBER(1864-1920)
 Employees should be loyal to the organization rather than to
individual supervisors.
 He believed that organizations should be managed
impersonally and that a formal organizational structure,
where specific rules were followed, was important. In other
words, he didn't think that authority should be based on a
person's personality.
 He thought authority should be something that was part of a
person's job and passed from individual to individual as one
person left and another took over.
 This
non personal, objective form of organization was called a
bureaucracy.
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.
 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.
Weber believed that all bureaucracies have the
following characteristics:
 Rules and regulations.
 Standardoperating 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.
 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 recording
HENRY FAYOL(1841-1925)
 A French mining engineer
 Developed14 principles of management based on
his management experiences.
 Theseprinciples provide modern‐day managers with
general guidelines on how a supervisor should
organize her department and manage her staff.
 Although later research has created controversy over
many of the following principles, they are still widely
used in management theories.
14 PRINCIPLES OF MANAGEMENT
 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.
 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.
14 PRINCIPLES OF MANAGEMENT
 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.
 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.
14 PRINCIPLES OF MANAGEMENT
 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.
 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.
MARY PARKER FOLLETT(1841-1925)
 Stressed the importance of an organization establishing
common goals for its employees. However, she also began
to think differently than the other theorists of her day,
discarding command‐style hierarchical organizations where
employees were treated like robots.
 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.
NEO-CLASSICAL
MANAGEMENT
SCHOOL
 The Neoclassical Approach began with the Hawthorne
studies in the 1920s. It grew out of the limitations of the
classical theory.
 Under classical approach, attention was focused on jobs and
machines. After some time workers resisted this approach as
it did not provide the social and psychological satisfaction.
 Therefore,
attention shifted towards the human side of
management.
 George Elton Mayo (1890-1949) is considered to be the
founder to the neoclassical theory.
 He was the leader of the team which conducted the famous
Hawthorne Experiments at the Western Electric Company
(USA) during 1927-1932.
ELEMENTS OF NEO-CLASSICAL SCHOOL OF
MANAGEMENT

 Hawthorne Experiment
 Human Relation Movement
 Organizational Behavior
HAWTHRONE EXPERIMENT
 The Hawthorne studies, which were conducted by Elton Mayo and
Fritz Roethlisberger in the 1920s with the workers at the
Hawthorne plant of the Western Electric Company, were part of an
emphasis on socio psychological aspects of human behavior in
organizations.
 Hawthorne researchers hypothesized that choosing one's own co-
workers, working as a group, being treated as special (as evidenced
by working in a separate room), and having a sympathetic
supervisor were reasons for increases in worker productivity.
 The Hawthorne studies found that monetary incentives and good
working conditions are generally less important in improving
employee productivity than meeting employees' need and desire to
belong to a group and be included in decision making and work.
HUMAN RELATIONS MOVEMENT
 People are social beings are motivated by social needs.
 A sense of identity is derived from inter personal
relationships.
 Workers are more receptive to social forces of peer groups
than monetary incentives and management controls.
 Workers respond positively to attention from management, co
workers and customers.
 Thepsychological needs of the individual significantly
impact group performance as well and therefore there was a
need for the Human Relations Movement.
ORGANIZATIONAL BEHAVIOUR
 Thebehavioral 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.
MODERN
MANAGEMENT
SCHOOL
 The Modern Period (1950 to present).
 The modern business ideologists have recognized the social responsibilities of
business activities and thinking on similar lines.
 During the period, the principles of management reached a stage of refinement and
perfection.
 The formation of big companies resulted in the separation of ownership and management.
 This change in ownership pattern inevitably brought in ‘salaried and
professional managers’ in place of ‘owner managers’.
 The giving of control to the hired management resulted in the wider use of scientific
methods of management.
 But at the same time the professional management has become socially responsible to
various sections of society such as customers, shareholders, suppliers, employees, trade
unions and other Government agencies.
APPROACHES TO MODERN
MANAGEMENT

 Quantitative or Mathematical Approach

 Systems Approach
 Contingency Approach
 Cost-Saving Approach
 The Unified Operational Approach
QUANTITATIVE APPROACH
 Evolving from the Decision Theory School, the Mathematical School gives a
quantitative basis for decision-making and considers management as a system of
mathematical models and processes.
 This school is also sometimes called, ‘ Operations Research” or “Management Science
School’.
 The main feature of this school is the use of mixed teams of scientists from several
disciplines.
 It uses scientific techniques for providing quantitative base for managerial decisions.
 The exponents of this school view management as a system of logical process.
 The contributions of mathematicians in the field of management are significant.
 This has contributed impressively in developing orderly thinking amongst managers.
 It has given exactness to the management discipline.
 Its contributions and usefulness could hardly be over-emphasized.
 However, it can only be treated as a tool in managerial practice.
SYSTEMS APPROACH
 In the 1960, an approach to management appeared which tried to unify the prior schools
of thought.
 This approach is commonly known as ‘Systems Approach’.
 Its early contributors include Ludwing Von Bertalanffy, Lawrence J. Henderson, W.G. Scott,
Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.
 They viewed organization as an organic and open system, which is composed of
interacting and interdependent parts, called subsystems.
 The system approach is to look upon management as a system or as “an organized whole”
made up of subsystems integrated into a unity or orderly totality.
 System approach is based on the generalization that everything is inter-related and inter-
dependent.
 A system is composed of related and dependent element which, when in interaction, forms a
unitary whole.
 A system is simply an assemblage or combination of things or parts forming a complex whole.
CONTINGENCY APPROACH
 Contingency approach is an improvement over the systems approach.
 The interactions between the sub-systems of an organization have long been recognized by the
systems approach.
 Contingency approach also recognizes that organizational system is the product of the
interaction of the sub systems and the environment.
 Besides, it seeks to identify exact nature of inter-actions and inter-relationships.
 This approach calls for an identification of the internal and external variables that
critically influence managerial revolution and organizational performance.
 According to this, internal and external environment of the organization is made up of the
organizational sub-systems.
 Thus, the contingency approach provides a pragmatic method of analyzing organizational sub-
systems and tries to integrate these with the environment.
 Contingency views are ultimately directed towards suggesting organizational designs
situations.
 Therefore, this approach is also called situational approach. This approach helps us to evolve
practical answers to the problems needed solutions.
Cost-Saving Approach
 The late 1970’s ushered in what is now known at the
cost saving approach.
 Renewed interest in this approach was brought about
by the recent resources shortages.
 It’s proponents view this as the only way of
maintaining and increasing profits.
The Unified Operational Approach
 In the late 1980’s favored a unified operational approach
 Harold Koontz in an article pointed out that this approach to
management recognizes that there is a core of knowledge about
managing that exists only in management
 Such matters as line and staff, departmentation, the limitations of the
span of management, managerial appraisal, and various managerial
control techniques involved concepts and theory found only managing
is involved.
 As the 1990’s unfold, the prevailing belief is that no single approach or
school can be set apart as most important.
 Rather, the complete manager must be able to recognize each approach or
school as contributing insights, perspectives, and special tools towards the
accomplishment of his goals