The evolution of management

1. The Evolution of
Management

2. 2
Learning from the History of
Management Thought
Learning Goals
2. Describe the three branches of the traditional
viewpoint of management:
3. Explain the behavioral viewpoint’s contribution
to management
Bureaucratic, Scientific, and
Administrative
1. Epoch-making 1886: Preface to management &
business

3. 3
Learning Goals (cont’d)
4. Describe how managers can use systems and
quantitative techniques to improve employee
performance
5. State the two major components of the
contingency viewpoint
6. Explain the impact of the need for quality on
management practices

4. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
2–4
Historical Background of Management
• Ancient Management
 Egypt (pyramids), Taj Mahal and China (Great Wall)
• Adam Smith
 Published The Wealth of Nations in 1776
 Advocated the division of labor (job specialization) to
increase the productivity of workers
• Industrial Revolution: starting late 18th century.
 Substituted machine power for human labor
 Created large organizations in need of management

5. Evolution of Management: Starting Point
• Emergence of large scale enterprises in US, Asia &
Western Europe raised issues & challenges, earlier
faced by Governments only.
• Basic management question even today:
What is the best way to manage an
organization?

6. Major Approaches to Management

7. Traditional Viewpoint – Classical Approach
Behavioral Viewpoint-Behavior
Systems Viewpoint- Key Goals
Contingency Viewpoint
Types of Problems Faced
Quality Viewpoint
Methods used to solve Problems
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

8. Major Contributors to Management Thought
• Frederick W. Taylor: Father of Scientific Management
 Machinist to Chief Engineer in a Steel Company
 Earned Engineering degree through evening study.
 Opportunity to know first hand problems & attitudes of workers.
• Henri Fayol: Father of Modern Management Theory
 French industrialist
 Identified 14 principles
• Elton Mayo and F.J. Roethlisberger & Hawthorne
Experiment:
 Undertook Hawthorne Experiment in Western Electric Company (1927
to 1932)
• Peter F. Drucker: Writer on variety of management subjects
• W. Edwards Deming & Joseph M. Juran:
 Americans who did much to improve quality of Japanese products

9. Major Contributors to Management Thought
• Laurance Peter:
 people get promoted to a level where they are incompetent & no
further promotion is possible
 Results in incompetent people in organizations
• William Ouchi:
 Wrote best selling book – Theory Z
 Showed how Japanese management practices may be adapted
in U.S.A.
• Thomas Peters and Robert Waterman:
 Gave characteristics of excellent companies ( “In Search of
Excellence”.

10. Goals:
Efficiency
Consistency
 Administrative
Management
Henry Fayol(3)
 Bureaucratic
Management
Max Weber(1)
 Scientific
Management
Fredrick Taylor(2)

11. Bureaucratic Management
 Use of rules, hierarchy, a clear division of labor, and
detailed procedures to guide employees’ behaviors
(Max Weber 1864-1920)
 It provides a blueprint of how an entire organization
should operate
 Seven characteristics
1.Rules—formal guidelines for the behavior of
employees on the job - discipline, uniformity, stability
2.Impersonality—employees are evaluated according to
rules and objective data - fairness, objectivity
3.Division of Labor—splitting work into specialized
positions - optimum use of manpower

12. 12
4. Hierarchical Structure—ranks jobs according
to the amount of authority in each job- Helps
control employee behavior
5. Authority—who has the right to make
decisions of varying importance at different
organizational levels
 Traditional authority- based on custom, gender, birthorder, etc
Charismatic authority- special personal qualities
Rational, legal authority- uniform application of rules & laws
6. Lifelong Career Commitment—both the employee
and the organization view themselves committed to
each other over the working life of the employee
7. Rationality—the use of the most efficient
means available to accomplish a goal

14. 14
Potential Benefits of Bureaucracy
 Efficiency
 Consistency
 Functions best when routine tasks are performed
 Performance based on objective criteria
 Most effective when
a) Large amounts of standard information have to be
processed
b) The needs of the customer are known and are unlikely to
change
c) The technology is routine and stable (e.g., mass production)
d) The organization has to coordinate the activities of
employees in order to deliver a standardized service/product
to the customer

15. Potential Costs of Bureaucracy
Rigid rules
and
red tape
Protection of authority
(issues like productivity get ignored)
Slow decision making
Incompatible with
changing
technology
Incompatible with
21st century workers’
values for freedom
and participative
management

16. Scientific Management
 As companies became large & complex -A philosophy
and set of management practices that are based on fact
and observation, not on hearsay or guesswork
(Frederick W. Taylor 1856 – 1915)
 Believed increased productivity depended on finding ways to
make workers more efficient: One Best Way/SOP –replace old
rule of thumb method.
 Scientifically select & then train, teach, & develop worker.
 Cooperate with workers to ensure work is done as per principles
of science that has been developed
 Used time-and-motion studies to analyze work flows, supervisory
techniques, and worker fatigue
 Divide work & responsibility equally between mgmt & workers
 Assumed workers motivated by money (advocated piece rated
system – higher rate after standard)

17. Scientific Management
 The Gilbreths:
husband wife team
 Frank Gilbreth (1868-1924) used motion
pictures to analyze workers’ motions
 Lillian Gilbreth (1978-1972)championed
protecting workers from unsafe working
conditions
 Henry Gantt ( 1861-1919) Associate of Taylor
 Focused on control systems for
production scheduling (Gantt Chart)

18. Insights from Scientific Management
Many companies have used scientific management
principles to improve efficiency, employee selection
and training
Scientific management failed to recognize the
social needs of workers and the importance of
working conditions and job satisfaction

19. Administrative Management: Overview
 Focuses on the manager and basic managerial
functions of planning, organizing, controlling
and leading- Henri Fayol (1841-1925): French
Industrialist
 Unity of Command Principle: an
employee should report to only one
manager
 Authority Principle: managers have the
right to give orders to get things done

20. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
2–20
Exhibit 2–3 Fayol’s 14 Principles of Management
1. Division of work:
specialization increases
output/employees more
efficient
2. Authority
3. Discipline
4. Unity of command:
Orders from one Supervisor
5. Unity of direction: Single
plan of action
6. Subordination of
individual interests to
the general interest
7. Remuneration: fair wages
8. Centralization: degree of
employees’ involvement in
decision making
9. Scalar chain: Line of authority
from TM to Lowest Level
10. Order: people & materials at
right place at right time
11. Equity: kind & fair to
subordinates
12. Stability of tenure of
personnel: orderly personnel
planning & replacement for
vacancies
13. Initiative: allowing employees
to originate
14. Esprit de corps: promoting
team spirit

21. 2. Behavioral Viewpoint: Overview
 Focuses on dealing effectively with the
human aspects of organizations
 Started in the 1930’s:US economy brink
of collapse, rampant unemployment
 Emphasis on working conditions
 Workers wanted respect &
increased ability to influence
mgmt decisions
 Workers formed unions to bargain
with management: law passed
legalizing formation of unions

22. Mary Parker Follett’s Contributions:
(1868-1933) –believed mgmt is continuous
process , not a static one. Solution of one problem,
may lead to another problems
 Managers need to establish
good working relationships
with employees
Goal:
Improve
Coordination

23. Chester Barnard’s (1886-1961) Contributions
 People should continuously communicate
and cooperate with one another
 Acceptance theory of authority holds that employees
have free wills and, thus, choose whether to follow
management’s orders. Employees will follow orders
if they:
1. Understand what is required.
2. Believe the orders are consistent with
organization goals.
3. See positive benefits to themselves in
carrying out the orders.

24. Informal work
groups, social
environment of
employees, control
productivity
Peer pressure to
conform to norms is
important
Hawthorne effect:
when employees are
given special attention,
productivity changes
Productivity increases
occur when managers
recognize employee
feelings

25. 1. Employees are
motivated by social
needs and association
with others
2. Employees’
performance is more a
result of peer pressure
than management’s
incentives and rules
3. Managers need to
involve subordinates
in coordinating their
work to improve
efficiency
4. Employees want to
participate in decisions
that affect them

26.  System: an association of interrelated
and interdependent parts
 Systems viewpoint: an approach to solving
problems by diagnosing them within a
framework of inputs, transformation
processes, outputs, and feedbacks shown in
next figure

27.  Closed system: limits its interactions with
its environment (e.g., stamping department
in GM assembly plant)
 Open system: interacts with the external
environment (e.g., marketing department)

28. Inputs
Human, physical,
financial, and
information
resources
Transformation
Process
Outputs
Products
and
services
Feedback Loops

29. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Exhibit 2–7 The Organization as an Open
System

30. Mathematical
models are used
to simulate
changes
Computers are
essential
Primary focus is
on decision
making
Alternatives are
based on
economic criteria

31. Lead to
creation of
Models
Enables
managers to
simulate
conditions
Emphasis on
objective criteria
for decision
making
Focus on
planning

32.  Management practices should be consistent
with the requirements of the external
environment, the technology used to make a
product or provide a service, and capabilities
of the people who work for the organization
 Uses concepts of the traditional, behavioral
and system viewpoints

33.  External environment—stable or
changing
 Technology—simple or complex
 People—ways they are similar and
different from each other

34. Behavioral Viewpoint
How managers influence others;
 Informal group
 Cooperation among employees
 Employee’s social needs
Systems Viewpoint
How the parts fit together.
 Inputs
 Transformations
 Outputs
Traditional Viewpoint
What managers do:
 Plan
 Organize
 Lead
 Control
Contingency Viewpoint
Managers’ use of other viewpoints
to solve problems involving:
 External environment
 Technology
 Individuals

35. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
2–35
Exhibit 2–8 Popular Contingency Variables
• Organization size
• As size increases, so do the problems of coordination.
• Routineness of task technology
• Routine technologies require organizational structures,
leadership styles, and control systems that differ from
those required by customized or non-routine
technologies.
• Environmental uncertainty
• What works best in a stable and predictable environment
may be totally inappropriate in a rapidly changing and
unpredictable environment.
• Individual differences
• Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations.

36.  Quality: how well a product or service
does what it is supposed to do—how closely
and reliably it satisfies the specifications to
which it is built or provided. Link between
High Quality & Competitive Advantage
 Total Quality Management (TQM): a
philosophy that makes “Quality Values”,
the driving force behind leadership, design,
planning, and improvement initiatives.
Continuous process of building Q into
products

37.  Inputs or raw materials
 Operations
 Outputs
 Measuring by variable or a product’s characteristics
 Measuring by attribute or a product’s acceptable/
unacceptable characteristics
 Statistical process control
 Quality of a process (e.g., sigma)

38. Lower Costs
and Higher
Market Share
Decreased
Product
Liability Quality
Positive
Company
Image

39. To Conclude
• Dipped into influential viewpoints & approaches that
shape managerial thinking during last over115 years
• Bureaucratic , scientific and administrative management
greatly influenced early managerial practices.
• Later new ideas stressed the human or behavioral
viewpoint.
• During WW – II sophisticated management systems
were developed.

40. To Conclude (Cont.)
• As organizations became global, none of the earlier
viewpoints seemed to apply totally to new situations.
• Contingency approach talked of situational factors.
• Today’s managers are concerned mainly with “Quality
Viewpoint” of management to meet consumer demand
throughout the world for quality products and services

41. Assignment for students
Group presentations: Class to be divided into 8 groups.
Two groups to make presentations on each subject.
1. Hawthorne Experiments (Illumination Tests) :
2. Fayol’s 14 Principles of Management
3. Management Roles
4. Managerial Competencies

42. Thanks...........