Lesson 3

ORIGINS OF MODERN MANAGEMENT

In this lesson, we will trace the evolution of modern management from the
scientific theory to the most recent theory.
WHY STUDY MANAGEMENT THEORY
1. Theories provide a stable focus for understanding what we experience. A theory
provides criteria for determining what is relevant.
2. Theories enable us to communicate efficiently and thus move into more and
more complex relationships with other people.
3. Theories make it possible, indeed, challenge us, to keep learning about our
world. By definition theories have boundaries, there is only so much that can be
covered by any one theory. Once we are aware of this, we are better able to ask
ourselves if there are alternative ways of looking at the world and to consider the
consequences of adopting alternative beliefs.
SCIENTIFIC MANAGEMENT
FREDERICK Rested his philosophy on four basic
TAYLOR principles:
 Father 1. The development of a true science
of of management, so that the best
method for performing each task
could be determined,
2. the scientific selection of workers,
wo that each worker would be given
responsibility for the task which he
or she was best suited.
Scientific Management 3. The scientific education and
 His writings on the subject development of the worker.
published in 1911 was based on his 4. Intimate, friendly cooperation
experience as apprentice, between management and labor
supervisor and consultant in the
US steel industry.

ADMINISTRATIVE THEORY
14 Principles of Management
1. Division of Work. Assign
each employee a task that
they can become proficient
at. Productivity increases as
employees become more
skilled, assured and
efficient. Today, experts
still warn against multi-
HENRI FAYOL
tasking.
2. Authority. Managers must
Founder of the classical management and
published a book in 1916 possess the authority to give
Father of Modern orders, and recognize that
Management with authority comes
responsibility. As well as
rank, Fayol argues that a
manager's intelligence,
experience and values
should command respect.
3. Discipline. Everyone
should follow the rules . To
help, you can make
agreements between the
organization and employees
clear for all to see.
4. Unity of Command. Fayol
wrote that "an employee
should receive orders from
one supervisor only."
Otherwise, authority,
discipline, order, and
stability are threatened.
5. Unity of Direction. Teams
with the same objective
should be working under the
direction of one manager,
using one plan. That, Fayol
wrote, "is the condition
essential to unity of action,
coordination of strength and
focusing of effort."
6. Collective Interest Over
Individual
Interest. Individuals should
pursue team interests over
personal ones – including
managers.
7. Remuneration. Employee
satisfaction depends on fair
remuneration for everyone –
financial and non-financial.
Fayol said pay should be fair
and reward "well-directed
effort."
8. Centralization. Balancing
centralized decision making
(from the top) with letting
employees make decisions.
Or as Fayol wrote, "A place
for everyone and everyone
 in his place."
9. Scalar Chain. Employees
should know where they
stand in the organization's
hierarchy and who to speak
to within a chain of
command. Fayol suggested
the now-familiar
organization chart as a way
for employees to see this
structure clearly. [3]
10. Order. Fayol wrote
that, "The right man in the
right place" forms an
effective social order. He
applied the same maxim to
materials: right one, right
place. Academics note that
this principle pre-empted
the Just in Time (JIT)
strategy for efficient
production. [4]
11. Equity. Managers
should be fair to all
employees through a
"combination of kindliness
and justice." Only then will
the team "carry out its
duties with... devotion and
loyalty."
12. Stability of Tenure of
Personnel. Organizations
should minimize staff
turnover and role changes to
maximize efficiency. If
people are secure and good
at their jobs, they are
happier and more
productive.
13. Initiative. Employees
should be encouraged to
develop and carry out plans
for improvement. As Fayol
wrote, "At all levels of the
organizational ladder, zeal
and energy on the part of
employees are augmented by
initiative."
14. Esprit de
 Corps. Organizations should
strive to promote team
spirit, unity, and morale.

Fayol's Five Functions of

Management

1. Planning: the need "to

assess the future and make
provision for it." That
includes a flexible action
plan that considers a firm's
resources, work in progress,
and future market trends.
2. Organizing: laying out lines
of authority and
responsibility for employees.
This covers recruitment and
training, coordinating
activities, and making
employees' duties clear.
3. Commanding: getting the
most from people. So,
managers must know their
employees' skills, delegate
to tap into these skill sets,
and set a good example.
4. Coordinating: in a well-
coordinated organization,
departments know their
responsibilities, the needs of
other teams, and their
obligations to them.
5. Controlling: continually
checking that rules, plans
and processes are working as
well as they should be

ELTON MAYO and HUMAN RELATIONS MOVEMENT

FRITZ Mayo and Roetisberger viewed the
ROETISBERGER increase in productivity as a mainly
response of the worker to the
The human psychological, not the physical
relations approach environment in the experimental
is associated with situation. In simple terms the
famous Hawthrone workers enjoyed the sense of
Experiment in the Western Electric
company which took place on 1927-1932
in the United States
ABRAHAM MASLOW
Best known of his theory of motivation
DOUGLAS MCGREGOR’S THEORY X AND
THEORY Y
In the 1960s, social psychologist
Douglas McGregor developed two
contrasting theories that explained
how managers' beliefs about what
motivates their people can affect
their management style. He labeled
these Theory X and Theory Y.
important that they were accorded
by important people (i.e., the
experimenters and company officials)
and were highly motivated to please
the experimenters by increasing their
productivity
HIERARCHY OF NEEDS
In 1943, he advanced a theory
suggesting that people ae motivated
by a sequence of needs including
monetary incentives, social
acceptance and others.
THEORY X AND THEORY Y
Theory X – people dislike work, have
little ambition, and are unwilling to
take responsibility. Managers with
this assumption motivate their
people using a rigid "carrot and stick"
approach, which rewards good
performance and punishes poor
performance.
Theory Y – people are self-motivated
and enjoy the challenge of work.
Managers with this assumption have a
more collaborative relationship with
their people, and motivate them by
allowing them to work on their own
initiative, giving them responsibility,
and empowering them to make
 decisions.

MAX WEBER BUREUCRATIC MANAGEMENT

Max Weber, a German

sociologist, argued
that bureaucracy was
the most efficient
model for private
businesses and public
offices. His theories influenced
generations of business leaders and
politicians well into the 20th century.
Weber’s theory of management, also
called the bureaucratic theory, stresses
strict rules and a firm distribution of
power
6 characteristics of bureaucracies
identified by Weber
According to Weber, these are the
six characteristics of bureaucracy:
1. Task specialization (division
of labor): Weber felt that
task specialization promotes
the timely completion of
work at the highest level of
skill.
2. Hierarchical management
structure: Weber advocated
that management should be
organized into layers, with
each layer being responsible
for its team’s performance.
3. Formal selection rules: In the
ideal organization, Weber
believed that employees
should be chosen based on
their technical skills and
competencies, which are
acquired through education,
experience or training — no
other factors should be
considered.
4. Efficient and uniform
requirements: Employees,
argued Weber, should always
know exactly what is
expected of them. In the
ideal organization, the rules
are clearly defined and
strictly enforced. This
promotes uniformity within
the organization and keeps
the company running as
smoothly and efficiently as
possible.
5. Impersonal
environment: Under Weber’s
theory, relationships
 between employees are to be
professional only.
6. Achievement-based
advancement: Weber felt
that promotions within an
organization should be based
solely on achievement,
experience and technical
qualifications

SYSTEMS THEORY

The Modern Organization

Theory describes organizations as an
open social system that interacts
with the environments to survive,
known as the Systems Theory
Approach. The System Theory of
Management approach is an external
factor which measures the
effectiveness based on long-term
sustainability or growth

References:
https://www.mindtools.com/asjiu77/henri-fayols-principles-of-management
https://www.mindtools.com/adi3nc1/theory-x-and-theory-y

Print or write the learning material in your notebook. Study the different
management theories

Happy Reading and Writing!

Prepared by Ma’am: Jenny