Chapter 2

EVOLUTION OF MANAGEMENT THOUGHT

INTRODUCTION
Management is as old as man. In ancient Sumeria, Egypt, Babylon, Palestine, China, Greece and Rome,
abundant piece of evidence of management are found in the historical records of government, the army, the courts,
and the church. From these established beginnings, it underwent few changes from its authoritarian techniques
until recently. When we now term as management has evolved from some of the fundamental concepts of
industrial democracy and management techniques that have been pioneered by a number of successful
organizations in the United States.

Intended Learning Outcomes:

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.

DISCUSSION:

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.
 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:
o 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:
o 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.
 Hebrews:
o The Hebrews had a great contribution in the field of management. It was clearly stated in the book of
Exodus in Bible that Moses made use of the principal of delegation and exception, personnel selection
and training.
 Chinese:
o 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
 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/ability 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:
o Developing new standard methods for doing each job.
o Selecting, training, and developing workers instead of allowing them to choose their own tasks and
train themselves.
o Developing a spirit of cooperation between workers and management to ensure that work is carried
out in accordance with devised procedures.
o 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.
o 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.

o All responsibilities in an organization are specialized so that each employee has the necessary
expertise to do a particular task.
 Rules and regulations.
o Standard operating procedures govern all organizational activities to provide certainty and facilitate
coordination.
 Impersonal relationships between managers and employees.
o Managers should maintain an impersonal relationship with employees so that favoritism and personal
prejudice do not influence decisions.
 Competence.
o 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.
o A bureaucracy needs to maintain complete files regarding

HENRY FAYOL (1841-1925)

 A French mining engineer
 Developed 14 principles of management based on his management experiences.
 These principles provide modern‐day managers with general guidelines on how a supervisor should
organize her department and manage her staff.
o 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:
o Division of work and specialization produces more and better work with the same effort.
 Authority and responsibility:
o 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:
o Obedience and respect within an organization are absolutely essential. Good discipline requires
managers to apply sanctions whenever violations become apparent.
 Unity of command:
o An employee should receive orders from only one superior.
 Unity of direction:
o Organizational activities must have one central authority and one plan of action.
 Subordination of individual interest to general interest:
o The interests of one employee or group of employees are subordinate to the interests and goals of the
organization.
 Remuneration of personnel:
o Salaries — the price of services rendered by employees — should be fair and provide satisfaction both
to the employee and employer.
 Centralization:
o The objective of centralization is the best utilization of personnel. The degree of centralization varies
according to the dynamics of each organization.
 Scalar chain:
o A chain of authority exists from the highest organizational authority to the lowest ranks.
 Order:
o Organizational order for materials and personnel is essential. The right materials and the right
employees are necessary for each organizational function and activity.
 Equity:
o 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:
o To attain the maximum productivity of personnel, a stable work force is needed.
 Initiative:
o 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:
o 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.
 As a result, she was a pioneer and often not taken seriously by management scholars of her time. But times
change, and innovative ideas from the past suddenly take on new meanings. Much of what managers do
today is based on the fundamentals that Follett established more than 80 years ago.
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.
o Therefore, attention shifted towards the human side of management.
 George Elton Mayo (1890-1949) is considered to be the founder to the neoclassical theory.
o 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 MOMENT

 People are social beings are motivated by social needs.
o A sense of identity is derived from inter personal relationships.
o Workers are more receptive to social forces of peer groups than monetary incentives and management
controls.
o Workers respond positively to attention from management, co workers and customers.
 The psychological needs of the individual significantly impact group performance as well and therefore
there was a need for the Human Relations Movement.

ORGANIZATIONAL BEHAVIOUR
 As management research continued in the 20th century, questions began to come up regarding the
interactions and motivations of the individual within organizations.
o Management principles developed during the classical period were simply not useful in dealing with
many management situations and could not explain the behavior of individual employees.
o In short, classical theory ignored employee motivation and behavior.
o As a result, the behavioral school was a natural outgrowth of this revolutionary management
experiment.
 The behavioral management theory is often called the human relations movement because it addresses the
human dimension of work.
o 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).

o After, 1960 management thought has been turning somewhat away from the extreme human relations
ideas particularly regarding the direct relation between morale and productivity.
o Present management thinking wishes equal emphasis on man and machine.
 The modern business ideologists have recognized the social responsibilities of business activities and
thinking on similar lines.
o During the period, the principles of management reached a stage of refinement and perfection.
o 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’.
o The giving of control to the hired management resulted in the wider use of scientific methods of
management.
o 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

1. 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.
o This school is also sometimes called, ‘Operations Research” or “Management Science School’.
o The main feature of this school is the use of mixed teams of scientists from several disciplines.
o It uses scientific techniques for providing quantitative base for managerial decisions.
o The exponents of this school view management as a system of logical process.

 The contributions of mathematicians in the field of management are significant.

o This has contributed impressively in developing orderly thinking amongst managers.
o It has given exactness to the management discipline.
o Its contributions and usefulness could hardly be over-emphasized.
o However, it can only be treated as a tool in managerial practice.

2. SYSTEMS APPROACH
 In the 1960, an approach to management appeared which tried to unify the prior schools of thought.
o This approach is commonly known as ‘Systems Approach’.
o 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.
o 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.
 o A system is composed of related and dependent element which, when in interaction, forms a unitary
whole.
o A system is simply an assemblage or combination of things or parts forming a complex whole.

3. CONTINGENCY APPROACH
 Contingency approach is an improvement over the systems approach.
o The interactions between the sub-systems of an organization have long been recognized by the systems
approach.
o Contingency approach also recognizes that organizational system is the product of the interaction of
the sub systems and the environment.
o 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.
o According to this, internal and external environment of the organization is made up of the
organizational sub-systems.
o 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.
o Therefore, this approach is also called situational approach. This approach helps us to evolve practical
answers to the problems remanding solutions.

4. 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.

5. THE UNIFIED OPERATIONAL APPROACH

 In the late 1980’s favored a unified operational approach
o 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.
o 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