L2 - Historical Development LMS

Faculty of Technology
Wayamba University of Sri Lanka

EMGT 1162 – Principles of Management
EVOLUTION OF MANAGEMENT
Prof. MMDR Deegahawature

B.Sc. (Bus.Ad.) Sp, MBA (Col), MBA (AIT), PhD (HUST), MIM, MAA
Department of Industrial Management

Faculty of Applied Sciences
Wayamba University of Sri Lanka
Learning Objectives
 On the successful completion of this lesson,

participants will be able to:
– Describe early management examples
– Explain various theories, practices, development and
uses of the classical, behavioral, quantitative and
contemporary approaches
– Explain how organizations apply early management
teachings today
– Apply early teaching of management in present
organizations
EMGT1162 – Principles of Management - Prof. MMDR Deegahawature, Dept. of IMGT, FAS, WUSL
Why Management History?
 Understand important historical developments in

management
 Understand important contemporary developments
in furthering the development of management
practices and
 Avoid the mistakes in the past
Major Approaches to Management
Historical Classical Behavioral Quantitative Contemporary

Background Approach Approach Approach Approach
Early Examples
of Management
Adam Smith
Industrial
Revolution
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Historical Background
What Are Some Early Management Examples?
 3000 – 2500 BC: Egyptian Pyramids

– Tremendous projects
– Employ more than
100,000 workers for
some 20 years
– Planning, managing
materials and people,
Controls
 1400s: Venice
– In arsenal of Venice, warships were floating along the
canals, and at each stop materials and riggings were
added
– Also, had warehouses and inventory systems; Human
resource function; accounting system
 544-496 BC: Sun Tzu

– Chinese philosopher, military
general, strategist, & tactician
– Wrote ‘Art of War’
– Presented early idea about
management strategy
 1532: Niccolò Machiavelli

– Italian politician, diplomat,
philosopher, humanist, & writer
– Wrote ‘The Princes’
– The principles can be adopted
and apply in management
In Our Context… Historical Background
 1776: Adam Smith

– Published ‘Wealth of Nations’
– Argued: Economic
advantages of Division of
Labor (Job Specialization)
– Also, argued: free trade,
market competition and the
morality of private enterprise
 1780 – Mid 1840s: Industrial Revolution

– Possibly, the most important influence on
management
– The transition to new manufacturing processes
– Large and efficient factories pumping out products;
need of forecasting demand; ensuring supplies for
large production
– Machine power began to substitute for human

power
• Lead to mass production of economical goods
– Improved and less costly transportation systems
became available
• Created larger markets for goods
– Larger organizations developed to serve larger
markets
• Created the need for formalized management
practices

Early Examples Scientific

of Management Management
Administrative
Adam Smith
Theory
Industrial
Revolution
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Classical Approach
What is Classical Approach?

 Emphasizes a rational and scientific approach to
make workers and organizations as efficient as
possible
 Focus on Job and Management Functions to
determine the best way to manage
 Converged with the emergence and evolution of
large scale businesses
 Two major theories
– Scientific Management
– Administrative Theory
Classical Approach
What is Scientific Management?

 Grew out of the industrial revolution’s
labor shortage at the beginning of the
twentieth century
 Concerned with improving the
performance of individual workers/
F. W . Taylor
labor productivity/
efficiency
 Proponents:
– Fredrick W. Taylor
– Frank and Lillian Gilbreth
– Henry Gantt Frank and Lillian Gilbreth Henry Gantt
Classical Approach
 Frederick W Taylor (1856–1915)
– Consider as the ‘Father of Scientific Management’
– Wrote ‘The Principles of Scientific Management’
(1911): Advocated the use of the scientific method to
define the “one best way” for a job to be done
– Replaced old “rule-of-thumb” methods of how to do
work with scientifically-based work methods to
eliminate “soldiering” where employees deliberately
worked at a pace slower than their capabilities
– Further suggested that an incentive wage plans
motivate workers
Classical Approach
– Taylor’s Four Principles of Scientific Management

• Replace rule-of-thumb work methods with methods
based on a scientific study of the tasks
• Scientifically select, train, and develop each
employee rather than passively leaving them to be
trained themselves
• Provide detailed instruction and supervision to each
worker in the performance of worker's discrete task so
as to ensure that the work is done in accordance
with the developed scientific principles
• Divide work between managers and workers, so that
the managers apply scientific management
principles to plan the work and the workers actually
perform the tasks
Classical Approach
 Frank and Lillian Gilbreth

– Help workers reach full potential as human being
– Pioneered Time and Motion Study
– Aims to upgrade performance and reduce fatigues
– Time Study developed in the direction of establishing
standard times, while Motion Study evolved into a
technique for improving work methods
Classical Approach
What is Administrative Theory?

 A theory that focuses on managing the total
organization (rather than individuals)
 Focused on general theories of what managers do
and what constitutes good management practice
 Attempt to identify the principles and skills that
underline effective
management
 Proponents:
– Henri Fayol
– Max Weber Henri Fayol Max Weber
Classical Approach
 Henri Fayol
– Wrote “General and Industrial Management”
– Helped systematize the practice of management
– Was first to identify the specific management
functions of planning, organizing, commanding,
coordinating and controlling
– Fayol insisted that management is a skill, and refused
the idea that ‘Managers are born, not made’
– Introduced “Fayol’s 14 Principles of Management”
• Most frequently had to apply
• Fundamental or universal principles of management
practice
Classical Approach
 Fayol’s 14 Principles of Management
Division of work Centralization
Authority Scalar chain
Discipline Order
Unity of command Equity
Unity of direction Stability of tenure of personnel
Subordination of the individual Initiative
Remuneration Esprit de corps

Classical Approach
1. Division of Work: Increase production by dividing work

so that each worker completes smaller tasks or job
element
2. Authority: Rights to give orders. However, responsibility
goes along with authority
3. Discipline: Employees must obey and respect the rules
that governs the organization
4. Unity of Command: Every employee should receive
orders from only one superior
5. Unity of Direction: The organization should have same
objectives in a single plan of action to guide managers
and workers
Classical Approach
6. Subordination of the Individual to the General

Interest: The interests of any one employee or group of
employees should not take precedence over the
interests of the organization as a whole. Management
must see that the organization’s goals are always
paramount
7. Remuneration: Workers must be paid a fair and
uniform wage for their contribution and it is an
important motivator
8. Centralization: The degree to which authority rests at
the top of the organization. The degree to which
subordinates are involved in decision making
Classical Approach
9. Scalar Chain (Line of Authority): The line of authority
from top management to the lowest ranks. Generally,
formal communications should follow this chain
10. Order: People and materials should be in the right
place at the right time; No overlapping responsibilities,
resources etc.
11. Equity: Managers should be kind and fair to their
subordinates, and treat impartially to all workers.
12. Stability of Tenure of Personnel: Long-term
employment is important for the development of skills
and less turnover that improves the organization’s
performance. Also, it ensures that replacements are
available to fill vacancies
Classical Approach
13. Initiative: Employees who are allowed to originate

(formulate) and carry out plans will exert high levels of
effort
14. Esprit de Corps: Managers should foster and maintain
morale of its employees, teamwork, team spirit, and a
sense of unity among employees. Promoting team
spirit will build harmony and unity within the
organization
Classical Approach
 Max Weber
– Introduced ‘Theory of Bureaucracy’, based on a
rational set of guidelines for structuring organizations
– Bureaucracy is an organisational structure that is
characterised by many rules, standardised processes,
procedures and requirements, number of desks,
meticulous division of labour and responsibility, clear
hierarchies and professional, almost impersonal
interactions between employees
– Characteristics of Weber’s Bureaucracy: Career
orientation, Division of labor, Authority hierarchy,
Formal selection; Formal rules and regulations,
Impersonality
Classical Approach
Classical Management Perspective… Today

 Contributions
– Laid the foundation for later developments
– Identified important management processes,
functions, and skills
– Focused attention on management as a valid
subject of scientific inquiry
 Limitations
– Prescribed universal procedures that are not
appropriate in some settings.
– Not considered existence of difference among
people
– Tends to view employees as tools rather than human

Early Examples Scientific Early

of Management Management Advocates
Administrative Hawthorne
Adam Smith
Theory Studies
Industrial Human
Revolution Relation Move.
Behavioral
Science Appro,
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Behavioral Approach
What is Behavioral Approach ?

 A group of scholars, who trained in sociology,
psychology and related fields, proposed more
effective way to manage people in organizations
 The early advocates of behavioral approach
believed that people were the most important asset
of an organization
 Stressed the importance of understanding human
behavior, human relations, needs and attitudes in
the workplace, and thereby, motivating and
encouraging employees towards achievements
Behavioral Approach
 Their ideas provided the basis for employee

selection procedures, motivation programs, work
teams and working environment management
techniques
 Contributors
– Early Advocates:
• Robert Owen
• Hugo Munsterberg
• Mary Parker Follett
• Chester Barnard
– Elton Mayo and Hawthorne Studies
– Human Relation Movement
– Behavioral Science Approach
Behavioral Approach
 Elton Mayo and Hawthorne Studies

– A series of experiments conducted at Western
Electric’s Hawthorne Plant (1924 to 1932) focusing
behavior in the workplace
– Examined, for example, how productivity changes as
a result of changes in the working condition (i.e.
lighting, temperature, and humidity)
• Illumination study: Worker productivity was
measured at various levels of light illumination
• Researchers found that regardless of whether the
light levels were raised or lowered, worker
productivity increased
Behavioral Approach
– Conclusion
• Social norms, group standards and attitudes more
strongly influence individual output and work behavior
than do monetary incentives
– Human Relations Implications
• Hawthorne Effect – workers’ attitudes toward their
managers affect the level of workers’ performance
• Behavior of managers and workers in the work setting is
important in explaining the level of performance
• Demonstrated the importance of understanding how
the feelings, thoughts, and behavior of work-group
members and managers affect performance
– Finally changed the prevalent view that ‘people are
similar to machines’
Behavioral Approach
 Human Relation Movement

– Grew out of the Hawthorne study and committed to
management practices more human
– Proposed that better human relations increase
worker satisfaction, and thereby increase
performances and productivity
– Workers respond to employee participation, praise
and being nice to people. Thus, manager’s concern
on workers would lead to
increased worker satisfaction
– Proponents:
• Abraham Maslow
• Douglas McGregor
Abraham Maslow Douglas McGregor
Behavioral Approach
 Abraham Maslow – Hierarchy of Needs

– Theory of Employee Motivation
– Advanced a theory that employees are motivated
by a hierarchy of needs that
they seek to satisfy
– Once a need of a
person is substantially
satisfied, it no longer
served as a motivator
to particular
person
Behavioral Approach
 Douglas McGregor – Theory X and Theory Y

– Describe managers' beliefs about an employee's
motivation to work
 Theory X: Work is distasteful to employees, who must be
motivated by force, money or praise
 Theory Y: People are inherently motivated to work and
do a good job
Behavioral Approach
 Behavioral Science Approach/ Organizational

Behavior (OB)
– A contemporary approach focusing on behavioral
perspectives of people in organizations
– Relies on scientific research for developing theories to
provide practical management tools
– Important topics in organizational behavior:
• Job satisfaction and job stress
• Motivation and leadership
• Group dynamics and organizational politics
• Interpersonal conflict
• The design of organizations
Behavioral Approach
Behavioral Approach… Today

 Contributions
– Provided important insights into motivation, group
dynamics, and other interpersonal processes
– Focused mgt. attention on these critical processes
– Challenged the view that employees are tools and
furthered the belief that employees are valuable
resources
 Limitations
– Complexity of individuals makes behavior difficult to
predict
– Many concepts not put to use because managers are
reluctant to adopt them

Early Examples Scientific Early Management

of Management Management Advocates Science
Administrative Hawthorne Operations

Adam Smith
Theory Studies Management
Industrial Human
Behavioral
Science Appro,
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Quantitative Approach
What is Quantitative Approach?

 Emerged during World War II to help the Allied
Forces manage logistic problems
 An approach to solve management problem
through the use of mathematical/ quantitative
techniques for their modeling, analysis and solution
 Focuses on decision making, economic
effectiveness, mathematical models, and the use
of computers to solve quantitative problems
 Management Science
– Focuses on the development of representative
mathematical models to assist with decisions
– Search possibilities to use mathematics to aid in
problem solving and decision making
– Utilizes linear and nonlinear programming, modeling,
simulation, queuing theory and chaos theory
 Operations management
– Techniques used to analyze any aspect of the
organization’s production system
– Practical application of management science to
efficiently and effectively manage the production
and distribution of products and services
Quantitative Approach… Today

 Contributions
– Developed sophisticated quantitative techniques to
assist in decision making
– Application of models has increased the awareness
and understanding of complex processes and situations
 Limitations
– Quantitative management cannot fully explain or
predict the behavior of people in organizations
– Mathematical sophistication may come at the expense
of other managerial skills
– Quantitative models may require unrealistic, unfounded
assumptions, limiting their general applicability

Early Examples Scientific Early Management System

of Management Management Advocates Science Approach
Administrative Hawthorne Operations Contingency

Adam Smith
Theory Studies Management Approach
Industrial Human
Behavioral
Science Appro,
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Contemporary Approach
What is Contemporary Approach?

 Though earlier approaches concern on inside the
organization, contemporary approach focuses on
what was happening in the external environment,
outside the boundaries of the organization
 Two contemporary approaches:
– System Theory
– Contingency Theory
 System Theory
– View organizations as a set of interrelated and
interdependent parts arranged in a manner that
produces a unified/ integrated whole
– Closed Vs. Open Systems
– Contribution
• Organizations are made with interrelated and
interdependent factors such as individuals, groups,
attitudes, motives, formal structures, goals, authority
etc.
• Decisions and actions of one area in the organization
affect other areas
• Organizations rely on their environment for essential
inputs, and as an outlet to absorb outputs
 Contingency Theory
– Though early theorists believed that their
management principles are universally applicable
later it was believed that management principles are
contingent to the situation
– Universal vs. Contingency Approach
• Universal Approach attempts to identify the “one best
way” to manage organizations
• Contingency Approach suggests organizations are
different, face different situations (contingencies), and
require different ways of managing.
– Describes “If, Then”: If this is my situation, then this is the
best way to manage…i.e.: differ in size, goal, work
activities, individual differences, environ. uncertainty etc.

Early Examples Scientific Early Management System

of Management Management Advocates Science Approach
Administrative Hawthorne Operations Contingency

Adam Smith
Theory Studies Management Approach
Industrial Human
Behavioral
Science Appro,
[3000 BC [1911 – [1700 – [1940 – [1960 –

– 1776] 1947] 1950] 1950] Present]
Why Each Approach?
Classical Approach Quantitative Approach
WHY: Believed that
Scientific Administrative quantitative techniques can
WHY: Need to find ways WHY: Need to find be applied in management
to improve the guidelines for managing
efficiency of individual complex organization Contemporary
workers such as factories Approach
elements functioning as
Behavioral Approach
management principles
WHY: Viewed a firm as
are contingent to the

an interrelated set of
WHY: Believed that

System Theory
Contingency
Human Relations Behavioral Science
situation
a whole
WHY: Believed that WHY: Believed in
better human relations scientific research for
increase worker developing theories to
satisfaction, and it provide practical
increases productivity management tools

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Faculty of Technology

Wayamba University of Sri Lanka

Prof. MMDR Deegahawature

Department of Industrial Management

 On the successful completion of this lesson,

 Understand important historical developments in

Historical Classical Behavioral Quantitative Contemporary

[3000 BC [1911 – [1700 – [1940 – [1960 –

What Are Some Early Management Examples?

 3000 – 2500 BC: Egyptian Pyramids

 544-496 BC: Sun Tzu

 1532: Niccolò Machiavelli

 1776: Adam Smith

 1780 – Mid 1840s: Industrial Revolution

– Machine power began to substitute for human

Historical Classical Behavioral Quantitative Contemporary

Early Examples Scientific

[3000 BC [1911 – [1700 – [1940 – [1960 –

What is Classical Approach?

What is Scientific Management?

– Taylor’s Four Principles of Scientific Management

 Frank and Lillian Gilbreth

What is Administrative Theory?

Authority Scalar chain

Unity of command Equity

Unity of direction Stability of tenure of personnel

Subordination of the individual Initiative

Remuneration Esprit de corps

1. Division of Work: Increase production by dividing work

6. Subordination of the Individual to the General

13. Initiative: Employees who are allowed to originate

Classical Management Perspective… Today

Historical Classical Behavioral Quantitative Contemporary

Early Examples Scientific Early

[3000 BC [1911 – [1700 – [1940 – [1960 –

What is Behavioral Approach ?

 Their ideas provided the basis for employee

 Elton Mayo and Hawthorne Studies

 Human Relation Movement

 Abraham Maslow – Hierarchy of Needs

 Douglas McGregor – Theory X and Theory Y

 Behavioral Science Approach/ Organizational

Behavioral Approach… Today

Historical Classical Behavioral Quantitative Contemporary

Early Examples Scientific Early Management

Administrative Hawthorne Operations

[3000 BC [1911 – [1700 – [1940 – [1960 –

What is Quantitative Approach?

Quantitative Approach… Today

Historical Classical Behavioral Quantitative Contemporary

Early Examples Scientific Early Management System

Administrative Hawthorne Operations Contingency

[3000 BC [1911 – [1700 – [1940 – [1960 –

What is Contemporary Approach?

Historical Classical Behavioral Quantitative Contemporary

Early Examples Scientific Early Management System

Administrative Hawthorne Operations Contingency

[3000 BC [1911 – [1700 – [1940 – [1960 –

are contingent to the

WHY: Believed that

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