Topic 1 – Overview

Classical to Contemporary Management Theories

Learning Objectives

 Review the evolution of classical management approaches

 Comprehend factors affecting the development of Management Theory
 Test the principles of various approaches in contemporary workplaces

Introduction
In a flattening, networked and globalised world, corporations such as HSBC, Shell, Gillette, Coca
Cola, Starbucks, KPMG and McDonald’s (to mention just a few) earn more than half of their
profits from abroad, rather than their home countries. Indicatively, a recent article in The
Guardian newspaper explains how McDonald’s ‘all-day breakfast’ and ‘new chicken nuggets’
have kept the food-chain’s global operations profitable for another quarter.

(Photo 1.1. Source: https://www.theguardian.com/business/2016/oct/21/mcdonalds-third-quarter-results-

nuggets-all-day-breakfast, accessed 24-Jan-2017). 3

While McDonald’s growth in the US was only 1.3%, international growth for the specific quarter
was more than double (3.3% or $6.42bn). But how did corporations like McDonald’s stretch

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thousands of miles away from their headquarters? And how did company owners manage to
control productivity and quality overseas? The answer to these questions can be traced back to
the so called Classical Management Approaches (a generic term that combines Scientific
Management; Administrative Management; and Bureaucracy).

Main Analysis
At the end of the nineteenth and early twentieth centuries, Classical Management originated
from two groups: a) practicing managers, such as individuals working in factories, farming,
transportation and other industries and b) social scientists, such as academics researching
human behaviour. The practicing managers, such as Taylor (1911/ 2005) and Fayol (1916/
1949), and social scientists such as Mayo (1933) and McGregor (1960) were the earliest
theorists and contributors to the classical body of management theory. Interestingly, a hundred
years later, the principles of classical approaches can be found in a wide range of contemporary
organisations. In fact, the car you drive, your recycled pencil, the management e-book you have
available in the VLE and the burger you eat may all have departed in one way or another from
classic production-line procedures dating back to the origins of scientific management.

[Photo 1.2 & Photo 1.3. Modern processes in recycling companies are no different from Ford’s
assembly-line dating back to early 1900s (Sources:
http://media2.govtech.com/images/recycling-center-trash.jpg,
https://www.pinterest.com/pin/263671753155212912/, both accessed 05-02-2017)].

McDonald’s is one of those companies that relied heavily on scientific management to offer its
products both locally and globally. Adopting methods similar to those in the car industry,
McDonald’s ‘Speedy System’ method was in fact an assembly line and a set of fixed steps,
enabling a more efficient and standardised food production (Cole and Kelly, 2016). As

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mentioned in our first ebook’s Vignette (‘Management Theory and Practice’, p. 26 – available in
the VLE, Cole and Kelly, 2016), with more than 34 000 restaurants worldwide, McDonald’s
success is attributed to the classic production-line procedures that are still incorporated in the
kitchen.

For most, Frederick Winslow Taylor (1856 to 1917) is the ‘father’ of scientific management. He
spent a great part of his life striving to achieve efficiency and labour productivity on the shop
floor. After a long and successful employment at Midvale Steel Company, he moved to
Bethlehem Still Company (in 1889) in Pittsburgh where he conducted a series of experiments on
improving labour productivity. The study employed 500 workers and used time and motion
evaluations to break down each job into component parts to time and record the basic
elements of a task. This led to the establishment of the ‘one best way’ of undertaking the task.
Using his own experiments and everyday experience at the workplace, Taylor ended up sharing
his ideas with others through a series of writings, such as ‘The Principles of Scientific
Management’ (1911). His experience as a worker led him to the identification that few workers
put more than the minimal effort into their daily work – a tendency he described as ‘soldiering’
(VLE ebook 1 – Cole and Kelly, 2016: -26):

There is no question that the tendency of average [workers] is towards working at a slow,
easy gait, and that it is only after a good deal of thought and observation...or as a result of
example, conscience or external pressure that [they] take a more rapid pace...This tendency
to take it easy is greatly increased by bringing a number of [workers] together on similar
work and at a uniform rate of pay by the day. Under this plan the better [workers] gradually
but surely slow down to that of the poorest and least efficient.

Taylor, 1903/1972, pp. 30-31

Taylor’s answer to these issues was the so called ‘Scientific Management’ through a set of
measures, methods and principles. Scientific Management, nevertheless, also had a number of
major disadvantages, such as divorcing the worker from the planning process and creating a
boring, deskilled and repetitive job. Among others, central principles of Scientific Management
include:

• The substitution of a science of the individual judgement of the worker;

• The scientific selection and development of the worker, after each...has been studied,
taught and trained...instead of allowing the workers to select themselves and develop in a
haphazard way; and

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• The intimate cooperation of the management with the workers, so that they together
do the work in accordance with the scientific laws which have been developed, instead of
leaving the solution of each problem in the hands of the individual worker

Taylor, 1911/1972, pp. 114-115

Suggested Video 1: it’s highly suggested to watch the ‘Taylorism’ video by copying and pasting
the following URL in your browser: https://www.youtube.com/watch?v=vNfy_AHG-MU

Overall, Scientific Management is based on analysing, modifying and standardising workflows in

the pursuit of efficiency and productivity. It is concerned with, and based on, a number of
fundamental principles as follows:

 Clarity of organisational purpose

 Effectiveness of structure
 Efficiency
 The division of work

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  Clarity of duty and responsibility at all levels
 Formal organisational relationships
 Clear logical planning
 A hierarchical approach to management structure
 An assumption of rational and logical behaviour

Moreover, although Taylor himself claimed total success for the Bethlehem project, later
investigation (see for example Wrege and Hodgetts, 2000) showed he exaggerated results;
other companies could not replicate results using the same methods (technically a failure of the
scientific method!). In addition, the implementation costs of putting the systems in place were
found to be significant. In addition, union opposition sprang from the threat of redundancies
implied by the new efficiencies.

Henry Fayol (1916, cited in Cole and Kelly, 2016) moreover, a French mining engineer who
worked all the way to the position of Managing Director, applied his own principles to turn an
almost bankrupted company to a prosperous and successful entity. Based on his lifetime’s
experience of managerial work, he theorized management through a series of writings. He
defined management and referred to key managerial activities such as forecasting, planning,
organizing, commanding, coordinating and controlling. A hundred years later, these activities
are still central in contemporary organizations (many of these activities, of course, are now
manifested in different ways – as we explain in the following module’s topics as well as in
module ST4S39). In his book ‘Administration Industrielle et Generale’ (1916), Fayol lists 14
‘Principles of Management’ that are capable of adaptation according to the need, context and
nature of workplace.

A brief comparison between Taylor and Fayol, points towards:

 Taylor’s focus on the workshop, Fayol on the broader administration of organisations

 Fayol’s emphasis on adaptation of his 14 principles; Taylor tended towards a more

prescriptive formula of how his approach should be implemented

 Fayol produced a more general framework for management

 Compare Taylor’s scientific management to contemporary notions of benchmarking and

best practice; identifying and catching up with the optimum solution available

 Rule of thumb and best method –takes initiative away from workers

 Motivation: Fayol and espirit de corps; Taylor’s financial incentives and rewards

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  Taylor’s mechanistic view of work and management – like a machine in engineering;
Fayol saw organisations more like a living organism that required appropriate nurturing

Scientific and Administrative Management, however, were central in Europe and the US for
many decades after Taylor and Fayol. Some important contributors were Frank and Lilian
Gilbert, Henry Gantt; and after the Second World War (in the post-1945 era) Lyndall Urwick
(1947) and Brech (1965) who developed many of Taylor’s and Fayol’s ideas further. They
offered significant contributions that have been applied in a wide range of sectors, varying from
bricklaying to steel manufacturing and included developments such as measurement, people
development and performance bonus systems.

Guided Reading
At this point, you are required to access our ebook 1

in the VLE and read ‘Chapter 2 – The Search for

Principles of Management (pp. 23 - 33).

Last but not least, the degree to which Taylor’s and Fayol’s principles are evident in today’s
organisations is not that clear. This line of thought generates a critical inquiry, which is central
in the module’s following topics, formative tasks, as well as in the summative essay.

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Bureaucracy
While Taylor and Fayol were rethinking management and its principles in the workplace, an
academic (sociologist), namely Max Weber, was theorising an organisation form that he named
‘Bureaucracy’. Weber (1978, cited in Cole and Kelly, 2016: 25) was interested in authority
structures and more specifically ‘why people in organisations obeyed those in authority over
them’. As he characteristically mentioned:

“Bureaucracy develops the more perfectly the more it is ‘dehumanized’, the more completely it
succeeds in eliminating from official business love, hatred, and all purely personal, irrational
and emotional elements which escape calculation. This is appraised as its special virtue by
capitalism.” (Weber, 1978, p973)

In other words, bureaucracy works without regard to persons. Weber, moreover, identified
three distinct types of legitimate authority (see our ebook 1, (‘Management Theory and
Practice’, p. 26 – available in the VLE, Cole and Kelly, 2016, p. 35):

 Rational: where authority rests on an established belief in the legality of patterns of

normative rules and the right of those elevated to authority under such rules to issue
commands (i.e. legal authority).

 Traditional: where authority rests on an established belief in the sanctity of immemorial

traditions and the legitimacy of the status of those exercising authority under them (i.e.
traditional authority)

 Charismatic: where authority rests on devotion to the specific and exception sanctity, or
heroism, or exemplary character of an individual person, and of the normative patterns
of order ordained by him or her (i.e. charismatic authority).

The main features of a bureaucracy according to Weber are as follows:

 Specialization of the role or job rather than the person.

 Hierarchy of authority gives a clear distinction between those who administer or

manage and those who are managed.

 Systems of rules providing for an efficient and impersonal operation. Knowledge of the
rules is important.

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  Impersonality should mean that advancement and the exercise of authority are not
arbitrary.

(Summarised in Mullins, p. 49; also in our ebook 1 (‘Management Theory and

Practice’, p. 26 – available in the VLE, Cole and Kelly, 2016p. 36)

As Cole and Kelly (2016) put it, the above features of bureaucratic organisation enable the
authority to be subject to published rules and practices. Therefore, hierarchy and authority are
legitimate rather than arbitrary. Among others, bureaucracy is also criticised for the following
reasons (Mullins, p.49):

 Rules, record keeping and paperwork become more important than the ends the
administration is supposed to serve.

 A lack of adaptability or flexibility can cause ‘strategic drift’.

 Initiative can be stifled where rules do not cover every eventuality. Officials become
dependent on rules and status and so on.

 There can be a tendency towards officious behaviour and hiding behind rules which are
themselves obscure to outsiders.

 Stereotyped behaviour can develop and a lack of individuality can grow.

 Psychological freedom and growth can be restricted (Argyris, 1957, in Mullins, 2007)

Interestingly, as with the principles of Scientific Management, Bureaucracy also exists in today’s
organisations (of various forms, varying from companies to governmental structures) to a
greater or lesser extent. It is often located in standardisation, centralisation, formalisation and/
or specialisation. For Weber, bureaucracy was ideal for the needs of large-scale organisations
and it seems that many organisations have adopted it in one way or another. But as Cole and
Kelly suggest, organisations do not simply choose to be bureaucratic or not. All large
organisations are bureaucratic to some degree. Consider, for instance, your own experience
with the University and try to address the following questions:

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Task 1: Experiencing bureaucracy at the University

Contemporary Management Approaches

Using the example of ‘Bureaucracy and the University’ or ‘Scientific Management and
McDonald’s’ (both of them discussed earlier in this ‘topic overview’), we see that theory
develops over time. In each theory, some elements remain constant over time while others
adapt to accommodate external environment changes. Some theories and principles drive
corporate practice while others change in response to external forces, such as globalisation,
stakeholder theory, competition for talent in knowledge based economies, recognition of
climate change and other PESTLE factors (please find two PESTLE examples in the following
page).

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PESTLE Example 1: https://www.youtube.com/watch?v=YZzihvVyr7o

PESTLE Example 2: http://theconversation.com/around-the-world-in-

80-payments-global-moves-to-a-cashless-economy-52882

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For instance, theorists such as Mintzberg (1973), Heller (1997), Prahalad (2000) and Hamel
(2007) adopted a more strategic perspective. This kind of management theorising suggests that
other than efficiency (which is concerned with doing things right) organisational effectiveness
(doing the right thing) is achieved through focusing on strategic issues. To do so, according to
Henry Mintzberg, management should break down to ‘Interpersonal’, ‘Informational’ and
‘Decisional’ roles:

In a similar line, Prahalad (2000) suggests that the changing role of managing requires that
special attention should be given to the role of senior managers and especially, on six critical
elements:

1 The importance of a shared competitive agenda.

2 Creating a clear charter of values and behaviours.

3 Focusing on influence without ownership.

4 Competing for talent and building the skill mix of the organisation.

5 Speed of reaction in the organisation.

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6 Leveraging corporate resources to address emerging opportunities.

Hamel (2007), moreover, suggests a shift away from top-heavy management structures, while
maintaining management efficiency through controlling and coordinating. ‘Hierarchy adds costs
and reduces responsiveness… [w]e need organizations where control comes less from rules and
sanctions, and more from norms and peers. We need to radically reduce the management costs
associated with both coordination and control’ (Hamel and Price, 2011, online at:
https://hbr.org/2011/10/the-beyond-bureaucracy-challen, 10/03/2017). At the same time,
Hamel puts forward his own synthesis of what the Practice of Management entails:

Heller (1997) shares a similar consensus with Hamel, that is, effective leaders should go back to
the front line. As he explains in The Guardian, leadership is the new Management (2007, online
at: https://www.theguardian.com/business/2007/oct/28/2) and recommends ten key
managerial strategies:

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As it goes through different life cycle and transition stages, management continues to change,
both as practice and philosophy. Central in this transition is a turn towards more humanistic-
democratic ideas, where management is shifted away from depersonalised, mechanistic value
systems of bureaucracy (Bennis, cited in Cloke and GoldSmith, 2001: IX). Within this framework,
collaboration, vision and reason are gradually replacing a model based on coercion, control and
threat. Organisations are recognised as complex systems. Innovation, networking, creativity,
crowd-sourcing, self-managed teams, interdependence and connectivity are central in today’s
organisational and social arrangements. Managers are freed by traditional supervisory and
administrative tasks as they are replaced by technology, self-managed teams and down-to-top
informal leaders. As Cloke and GoldSmith (2001: 3-4) successfully put it, traditional managers
are going the way of the dinosaurs:

‘Managers are the dinosaurs of our modern ecology. The age of management is finally coming
to a close… Autocracy, hierarchy, bureaucracy and management are gradually being replaced

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by democracy, heterarchy, collaboration and self-managed teams… collaborating as members
of complex matrixed, high-performance networks…’.

So is this a paradigm shift? Is “management” an outmoded idea… that is conceived to stand in

the way of a more enlightened form of organization in which “hierarchy and bureaucracy,
autocracy and injustice, inequality and privilege” (Cloke and Goldsmith, 2002: 38) are
systematically dissolved and eventually removed. Well, it worth mentioning that an entire body
of commentators (e.g., Koch and Godden, 1996; Purser and Cabana, 1998), support and repeat
this claim.

Conclusion
Classical approaches include scientific management, administrative management and
bureaucracy. These can be seen as relating to (broadly) production and the administrative
support of that production respectively. Rationality and logic are fundamental assumptions.
Other notable contributors to classical approaches include Frank and Lillian Gilbreth (1914/
1973), Henry Gantt (1910, 1916), and Lyndall Urwick (1947). These approaches can be traced
forward to a range of contemporary management theories and models. Overall, classical
approaches, especially scientific management, were prescriptive in intent, i.e. trying to set out
how management should be done. Despite their drawbacks, practices based on scientific
management are alive and well in many workplaces and production lines today. Later
developments, nevertheless, as well as contemporary approaches, consider organisations as
open systems, operating in non-linear environments, where strategizing is based on knowledge
sharing and open discussion.

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 Suggested Video 3
Prior to addressing the formative tasks appearing in the VLE, it’s highly suggested to watch the
‘Evolution of Management’ video by copying and pasting the following URL in your browser:
https://www.youtube.com/watch?v=EobeHwOw3S4

Critical Thinking and Writing appropriate to the level

We are used to finding answers, not questioning them. We are used to deciding
issues based on evidence - not exploring the evidence itself. But unlike anything you
might have done before, being a post-graduate student means reflecting, developing,
creating, analysing, questioning, originating, evaluating, critiquing, embracing
complexity, managing ambiguity and contradiction. Getting critical is an essential
skill at this level. Although ‘Masterliness’ will be taught in the following weeks in
more depth, it’s highly advisable to access the University’s resources on study skills in
the VLE; re-review the University’s grading breakdown, and be reminded that no
single text is totally adequate for the course. A wide range of textbooks and journals
are necessary towards producing critical pieces of work.

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References and Suggested Further Reading
Cloke, K. and GoldSmith, J. (2001) The End of Management and the Rise of Organisational
Democracy, Wiley.

Cole. G. A. and Kelly, P. (2016) Management Theory and Practice (Custom Edition), Cengage.

Fayol, H. (1916/1949) General and Industrial Management, Pitman, London

Flemming, P. (2010) Contesting the Corporation, Cambirdge University Press.

Gilbreth, Frank B. [1909] 1974. Bricklaying System. Hive Management History Series, no. 31.
Hive Pub. Co. ISBN 0879600349

Gilbreth, Lillian M. [1914] 1973. The Psychology of Management: The Function of the Mind in
Determining, Teaching and Installing Methods of Least Waste. Hive Pub. Co. ISBN 0879600268

Hamel, G. (2007) The Future of Management. Harvard Business Review Press

Hamel, G. and Price, C. (2011) Creating Inspired, Open and Free Organisations. Harvard
Business Review. Online at: https://hbr.org/2011/10/the-beyond-bureaucracy-challen.
Accessed, 10/03/2017.

Heller, R. (1997) In search of European excellence: the 10 key strategies of Europe’s top
companies. HarperCollins, London.

Heller, R. (2007) Effective leaders should go back to the Front Line. The Guardian Newspaper,
28-10-2007. Online at: https://www.theguardian.com/business/2007/oct/28/2. Accessed 10-
03-2017.

Henry L. Gantt (1910) The Compensation of Workmen ...: A Lecture Delivered Before the
Harvard Graduate School of Business Administration, Dec. 15, 1910.

Henry L. Gantt (1910), Work, Wages, and Profits: Their Influence on the Cost of Living, New
York, New York, USA: Engineering Magazine Company, LCCN 10014590.

Gantt, Henry L. (1916), Industrial leadership, New Haven: Yale University Press.

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Koch, R., and Godden, I. (1996) Managing without Management: A Post-Management
Manifesto for Business Simplicity, London: Nicholas Brealey.

Koontz, H. and O’Donnell, C. (1984) Management, Ed.8, McGraw-Hill

Mayo, E. (1933) The Social Problems of an Industrialized Civilization: Early Sociology of

Management and Organisations, Routledge.

McGregor, D. (1960) ‘The Human Side of Enterprise’. Online at:

http://www.kean.edu/~lelovitz/docs/EDD6005/humansideofenterprise.pdf. Accessed 02-03-
2017.

Mintzberg, H. (1973) The Nature of Managerial Work, Harper & Row

Mintzberg, H. (1983) Structuring in Fives: Designing Effective Organisations, Prentice Hall, New
Jersey.

Nelson, D. (1975) Managers and Workers: Origins of the New Factory System in the United
States, University of Wisconsin Press, Maddison.

Parker, M. (2002) Against Management. Polity Press, Cambridge.

Peters, T. (1988) Thriving on Chaos: Handbook for a Management Revolution, Harper Collins

Prahalad, C. K. ‘Emerging Work of Managers’, in Chowdhury, S. Management 21C, Financial

Times Prentice Hall (2000), pp. 141–50.

Purser, R. E., and Cabana, S. (1998) The Self-Managing Organization: How Leading Companies
Are Transforming the Work of Teams for Real Impact, Chicago, IL: Free Press.

Ritzer, G. (1996) Expressing America. Thousand Oaks.

Ritzer, G. (1996) The McDonaldization of Society. Pine Forge Press, California.

Sheldrake, J. (2003) Management Theory. (2nd Edition) Thompson, London.

Smith, A. (1776) The Wealth of Nations

Stern, R. N., & Barley, S. R. 1996. Organizations and social systems: Organization theory’s
neglected mandate. Administrative Science Quarterly, 41: 146–162.

Taylor, F.W. (1911/ Digitised 2005)The Principles of Scientific Management, Harper & Row,
New York

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Ure, A (1835) The Philosophy of Manufactures or an Exposition of the Scientific, Moral and
Commercial Economy of the Factory System of Great Britain, Frank Cass, London

Urwick, L. (1947) Elements of Administration. Industrial Management.

Weber, M. (1978) The Technical Superiority of Bureaucratic Organisation over Administration

by Notables. In Economy and Society: An Outline of Interpretive Sociology. Edited by Roth, G.
and Wittich, C. Pp. 973-5. University of California Press, Berkley CA.

Weber, M. (1978) The Technical Superiority of Bureaucratic Organisation over Administration

by Notables. In Cole. G. A. and Kelly, P. (2016) Management Theory and Practice (Custom
Edition), Cengage.

Weiss, R. (1983) ‘Weber on Bureaucracy: Management Consultant or Political Theorist?’,

Academy of Management Review, 8: 2, 242-248

Wrege, C. and Hodgetts, R. (2000) Frederick W. Taylor’s 1899 Pig Iron Observations: Examining
Fact, Fiction and Lessons for the New Millenium. Academy of Management Journal, Vol. 43, no.
6, pp. 1283-1291.

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