Addis Ababa University EiABC Campus

Introduction to Management Group Assignment I

Group Members: Section 04 Group 02

 Michael Genanew (UGR/8547/15)
 Tekeste Berhanu (UGR/7984/15)
 Kalab
 Andualem
 Nahom

Submission Date:28/11/23 G.C

 The Pre-Classical era in the history of management theory encompasses the period before the
late 19th century and early 20th century when systematic and formalized discussions about
management principles began to emerge. Although not as well-documented as later periods,
there were notable contributions that laid the groundwork for the development of
management theories. These contributions were not part of a cohesive and structured
management theory; they played a crucial role in shaping the understanding of organizational
dynamics and management practices.

We can mention a few key contributors to the theory of management in this Pre-Classical era
which are:

 Robert Owen (1771-1858)

 Charles Babbage (1791-1871) &
 Adam Smith ( 1723-1790)

Robert Owen’s Contribution

A social reformer and early industrialist, Owen is known for his experiments in improving
working conditions and advocating for the welfare of workers. In the early 19th century, he
implemented changes in his cotton mills in New Lanark, Scotland, such as reducing working
hours and providing education for workers' children. Owen's efforts contributed to the early
understanding of the human side of management and the importance of employee well-being.
His ideas were ahead of his time and laid the groundwork for later management theories that
focused on the well-being of workers. Here are some key contributions of Robert Owen to the
theory of management:

1. Humanitarian Approach:
Contribution: Robert Owen advocated for a more humane and ethical treatment of workers
during the early stages of the Industrial Revolution. He believed that improving the living and
working conditions of employees would result in increased productivity and overall
organizational success.
 Impact: Owen's emphasis on the welfare of workers challenged the prevailing harsh
conditions in factories of his time and set the stage for later developments in human relations
management, which prioritizes the human aspect of work.

2. Social Experiments at New Lanark:

Contribution: As the manager of the New Lanark cotton mills in Scotland, Owen implemented
various reforms to create a more supportive work environment. He reduced working hours,
provided education for children, and established a cooperative store for workers. These
initiatives aimed to enhance the quality of life for employees and create a sense of community.

Impact: Owen's social experiments demonstrated that improved working conditions and
attention to the social needs of workers could lead to increased productivity and employee
satisfaction. These findings contributed to the understanding that employee well-being and
organizational success are interconnected.

3. Advocacy for Workers' Rights:

Contribution: Owen was a vocal advocate for workers' rights and believed in the necessity of
labor unions to represent the interests of employees. He promoted the idea of collective
bargaining to negotiate better working conditions and wages for workers.

Impact: Owen's advocacy for workers' rights paved the way for the labor movement and
influenced later discussions on the importance of fair compensation, collective bargaining, and
the role of unions in representing the interests of workers.

4. Vision of Utopian Communities:

Contribution: Owen proposed the concept of utopian communities, where individuals would
live and work together in a cooperative and harmonious environment. He believed that such
communities, free from the social ills of the time, could serve as models for societal
improvement.
 Impact: While Owen's utopian vision was not fully realized, the concept influenced
discussions on alternative forms of organization and communal living. It contributed to the
exploration of new ways to structure work and society with a focus on cooperation and shared
values.

Robert Owen’s theory was not perfect but it had both its pros and cons.

Pros of Robert Owen’s Contribution to the Theory of Management:

 Humanitarian Approach:

Owen's emphasis on improving the living and working conditions of employees reflects a
humanitarian approach to management. This perspective acknowledges the importance of
considering the well-being of workers, contributing to a more ethical and socially responsible
organizational ethos.

 Social Experiments at New Lanark:

Owen's implementation of social experiments at New Lanark, including reducing working

hours and providing education for workers' children, demonstrated a commitment to
creating a supportive work environment. These practices contributed to the early
understanding of the human side of management and the importance of employee welfare.

 Advocacy for Workers' Rights:

Owen was an early advocate for workers' rights and recognized the need for labor unions
to represent the interests of employees. His efforts contributed to the broader discussion on
fair compensation, collective bargaining, and the role of unions in protecting workers.

 Recognition of the Role of Management in Social Progress:

Owen’s vision extended beyond the immediate concerns of industrial production to the
broader goal of social progress. His ideas contributed to the understanding that
management has a role not only in optimizing production but also in fostering social and
economic development.
  Utopian Vision of Communal Living:

While not fully realized, Owen's vision of utopian communities highlighted the possibility of
alternative organizational structures based on cooperation and shared values. This opened
up discussions about different ways of organizing work and society.

Cons of Robert Owen's Contribution to the Theory of Management

 Feasibility of Utopian Communities:

Owen's vision of utopian communities faced practical challenges and was criticized for its
feasibility. The implementation of such communal living arrangements proved to be
complex, and the idealistic nature of the concept raised questions about its practicality in
real-world organizational settings.

 Limited Applicability to Diverse Industries:

Owen's specific practices, such as those implemented at New Lanark, may not be
universally applicable to all industries. Different sectors and organizational contexts may
require tailored approaches, and Owen's ideas may not offer a one-size-fits-all solution.

 Potential for Economic Inefficiency:

Some critics argued that Owen's focus on improving worker conditions could lead to
economic inefficiency, particularly in competitive industries. Concerns were raised about the
potential impact on profitability and the ability of organizations to remain competitive in the
market.

 Challenge to Traditional Power Structures:

Owen's advocacy for workers' rights and his efforts to empower labor unions were seen
as challenging traditional power structures. This stance could face resistance from those
 who were vested in maintaining the status quo, leading to potential conflicts within
organizations.

 Utopian Vision as Impractical:

Owen's vision of utopian communities was criticized as impractical and utopian. The
challenges of implementing such radical changes in organizational and societal structures
without considering economic and political realities raised skepticism about the viability of
his ideas.

In summary, Robert Owen's contributions to the theory of management were marked by a

humanitarian approach, social experiments, and advocacy for workers' rights. While these
aspects contributed to the early understanding of the human side of management,
challenges such as the feasibility of utopian communities and potential economic
inefficiencies were raised as critiques of Owen's ideas. The legacy of Owen's contributions
lies in sparking discussions about the ethical responsibilities of management and the pursuit
of holistic well-being in the workplace. His ideas laid the foundation for the development of
human relations management and emphasized the importance of considering the well-being
of employees for the overall success of an organization.

 Charles Babbage’s Contribution

Charles Babbage, a 19th-century mathematician, inventor, and mechanical engineer, is
best known for his work on early computing machines. While he is primarily recognized for
his contributions to the fields of mathematics and computing, Babbage's ideas also had
implications for the theory of management. His work, particularly in the area of industrial
engineering, laid the groundwork for later developments in management theory. Babbage,
known for his work on early computing machines, also made contributions to management
theory. In his book "On the Economy of Machinery and Manufactures" (1832), he discussed
the concept of division of labor and the advantages of specialization in manufacturing
processes. Babbage's ideas foreshadowed later developments in scientific management.
Here are some key contributions of Charles Babbage to the theory of management:
1. Division of Labor and Specialization:
Contribution: Babbage, in his book "On the Economy of Machinery and Manufactures"
(1832), discussed the concept of division of labor and specialization in manufacturing
processes. He emphasized the advantages of breaking down complex tasks into simpler
ones and assigning specific tasks to individuals based on their skills and expertise.

Impact: Babbage's ideas on division of labor foreshadowed later developments in

scientific management, particularly the work of Frederick Winslow Taylor. The emphasis on
specialization became a fundamental principle in the quest for increased efficiency and
productivity in industrial processes.

2. Time and Motion Studies:

Contribution: Babbage's interest in efficiency extended to the analysis of work processes
and the measurement of time and motion. While his focus was on factory production and
the operation of machinery, his ideas paved the way for the later development of time and
motion studies, a key component of scientific management.

Impact: Babbage's early consideration of time and motion as factors in productivity

influenced subsequent management theorists, such as Taylor and Frank and Lillian Gilbreth,
who further developed and applied these concepts in industrial settings.

3. Standardization of Processes:
Contribution: Babbage advocated for the standardization of tools, processes, and
components in manufacturing. He believed that standardization could lead to greater
efficiency and quality in production.

Impact: The idea of standardization became an integral part of later management

practices, particularly in the context of quality management and process improvement.
Standardizing processes contributes to consistency, predictability, and the ability to identify
and rectify inefficiencies.

4. Emphasis on Systematic Management:

 Contribution: Babbage's work reflected an emphasis on systematic management and the
need for a structured approach to organizing work. He recognized the importance of well-
defined processes and clear organizational structures for achieving efficiency.

Impact: Babbage's ideas laid the foundation for the systematic management principles
that later theorists, such as Henri Fayol and Max Weber, would develop. The notion of a
rational and structured approach to management became a cornerstone in the evolution of
management theory.

Charles Babbage’s theory was not flawless. It had its own benefits but also had negative
sides. These can be put as:

Pros of Charles Babbage's Contribution to the Theory of Management:

 Division of Labor and Specialization:

Babbage's emphasis on the division of labor and specialization laid the foundation for later
developments in scientific management. His recognition of the benefits of breaking down
complex tasks into simpler components contributed to the optimization of work processes.

 Early Consideration of Time and Motion Studies:

Babbage's interest in efficiency extended to the analysis of time and motion in manufacturing
processes. While his focus was on the operation of machinery, his ideas paved the way for the
later development of time and motion studies, which became essential tools in scientific
management.

 Advocacy for Standardization:

Babbage advocated for the standardization of tools, processes, and components in

manufacturing. This perspective contributed to the development of principles related to
standardization in quality management and process improvement.

 Recognition of the Importance of Systematic Management:

 Babbage's work reflected an emphasis on systematic management, recognizing the need for
structured approaches to organizing work. This perspective influenced later management
theories that highlighted the importance of well-defined processes and clear organizational
structures.

 Influence on Industrial Engineering:

Babbage's contributions to industrial engineering, particularly in the analysis of efficiency and

optimization of work processes, had a lasting impact on the field. His work laid the groundwork
for subsequent developments in industrial engineering and management science.

Cons of Charles Babbage's Contribution to the Theory of Management:

 Limited Recognition During His Time:

Babbage's ideas were not widely recognized and implemented during his time. The lack of
widespread adoption may be attributed to the prevailing attitudes and priorities in the
industrial and managerial landscape of the 19th century.

 Focus on Mechanical Processes Over Human Factors:

Babbage's primary focus was on the efficiency of machinery and manufacturing processes.
This emphasis may have led to a relative neglect of human factors in the workplace, such as
employee motivation and well-being.

 Incomplete Development of Management Theory:

While Babbage made significant contributions, his work did not lead to a comprehensive
management theory. His ideas were foundational but required further development by later
theorists to become part of a more cohesive and structured body of knowledge.

 Limited Application to Service Industries:

 Babbage's ideas, rooted in the context of manufacturing, may have limitations in their
application to service industries. The nature of work and organizational structures in service
sectors differs significantly from manufacturing, and Babbage's principles may not be directly
transferable.

 Insufficient Emphasis on Employee Satisfaction:

Babbage's focus on efficiency and optimization may not have adequately addressed the
importance of employee satisfaction and engagement. Modern management theories often
recognize the role of employee well-being in achieving long-term organizational success.

In summary, Charles Babbage's contributions to the theory of management were significant in

laying the groundwork for principles of scientific management, particularly in the areas of
division of labor, time and motion studies, and standardization. However, his ideas faced
limitations in terms of recognition during his time, a focus on mechanical processes over human
factors, and the incomplete development of a comprehensive management theory. While
Charles Babbage's direct contributions to management theory were not as explicitly articulated
as some later theorists, his ideas on division of labor, time and motion studies, standardization,
and systematic management had a profound influence on the development of management
practices. His work set the stage for the scientific management movement and contributed to
the broader understanding of how to organize and optimize work processes in industrial
settings.

Adam Smith’s Contribution

Adam Smith, an 18th-century Scottish economist and philosopher, often considered the
father of economics, made important contributions to the understanding of labor
specialization and its impact on productivity. In his seminal work, "The Wealth of Nations"
(1776), Smith emphasized the benefits of the division of labor, highlighting how breaking
down complex tasks into simpler ones could enhance efficiency. While Smith's main focus
was on economics and the concept of the invisible hand, some of his ideas had implications
for the theory of management. Here are key aspects of Adam Smith's contributions to the
theory of management:
 1. Division of Labor:
Contribution: Adam Smith's most significant contribution to the theory of management is
his articulation of the concept of the division of labor. In "The Wealth of Nations," Smith
famously discussed how breaking down complex tasks into simpler, specialized tasks could
significantly increase productivity.

Impact: Smith argued that the division of labor would lead to increased efficiency and
specialization, ultimately benefiting both individual workers and the economy as a whole.
This idea laid the groundwork for later management theories, especially those that
emphasized the importance of organizing work to maximize productivity.

2. Productivity and Wealth Creation:

Contribution: Smith's writings underscored the relationship between productivity and
wealth creation. He argued that a well-organized and efficient economy would result in
increased wealth for individuals and nations.

Impact: This perspective influenced later management thought by emphasizing the

importance of effective management practices in achieving economic prosperity. The idea
that efficient management contributes to overall wealth became a foundational principle in
the development of management theory.

3. Market Mechanism and Self-Interest:

Contribution: Smith's concept of the invisible hand is rooted in the idea that individuals, by
pursuing their own self-interest in a competitive market, unintentionally contribute to the
overall well-being of society. This perspective suggests that decentralized decision-making,
driven by self-interest, can lead to optimal outcomes.

Impact: While not a direct management theory, Smith's emphasis on individual self-
interest and market mechanisms influenced later management theories, particularly in the
understanding of incentives and how they can shape organizational behavior.

4. Role of Government:
Contribution: In addition to his economic theories, Smith discussed the role of government
in ensuring a stable and just society. He argued for limited government intervention in
economic affairs and advocated for a laissez-faire approach.

Impact: Smith's ideas on limited government intervention influenced later management

thought by contributing to the development of theories that emphasized minimal
interference in business operations. This perspective continues to shape discussions on the
appropriate role of government in managing economic and business activities.

Adam Smith’s theory had both its merits and demerits. These can be put as:

Pros of Adam Smith's Contribution to the Theory of Management:

 Division of Labor Efficiency:

Smith's emphasis on the division of labor highlighted the efficiency gains that result from
breaking down complex tasks into simpler, specialized components. This concept has been
foundational in the development of management practices focused on optimizing work
processes.

 Increased Productivity:

Smith's ideas contribute to the understanding that increased specialization and efficient
organization of work processes lead to higher productivity. This principle has been
instrumental in shaping management practices aimed at enhancing overall organizational
efficiency.
  Wealth Creation:

Smith's theories underscore the connection between productivity and wealth creation.
This perspective has influenced management thought by emphasizing the importance of
effective management in contributing to economic prosperity at both individual and societal
levels.

 Market Mechanism and Self-Interest:

Smith's concept of the invisible hand, driven by individual self-interest in a competitive

market, highlights the power of decentralized decision-making. This perspective has
influenced management theories that recognize the role of incentives and self-interest in
shaping organizational behavior.

 Laissez-Faire Approach:

Smith's advocacy for a limited government intervention and a laissez-faire approach to

economic affairs has contributed to the development of management theories that prioritize
minimal interference in business operations. This perspective aligns with the idea of allowing
market forces to guide economic activities.

Cons of Adam Smith's Contribution to the Theory of Management

 Neglect of Human Factors:

Smith's focus on economic principles and efficiency sometimes led to a neglect of human
factors in the workplace. The emphasis on the division of labor and productivity may
overlook the importance of employee well-being and satisfaction.

 Potential for Exploitation:

The pursuit of self-interest in a competitive market, as advocated by Smith, could

potentially lead to exploitative practices. In a purely profit-driven environment, there may be
risks of worker exploitation, disregard for ethical considerations, and negative social impacts.
  Limited Consideration of Social and Environmental Concerns:

Smith's economic theories often prioritize economic outcomes over social and
environmental considerations. This limited perspective may not adequately address the
broader responsibilities that organizations have towards society and the environment.

 Inadequate Handling of Externalities:

The concept of the invisible hand assumes that market forces will naturally correct
externalities. However, in practice, there are instances where market failures and negative
externalities require intervention, challenging Smith's laissez-faire approach.

 Overemphasis on Rational Self-Interest:

Smith's emphasis on rational self-interest may oversimplify human behavior. In the

workplace, factors such as collaboration, motivation, and non-monetary incentives are
essential, and an exclusive focus on self-interest might not capture the full spectrum of
human motivations.

In summary, while Adam Smith's contributions to the theory of management have

provided valuable insights into economic efficiency and productivity, there are limitations in
terms of neglecting human factors, potential for exploitation, and the adequacy of
addressing social and environmental concerns. Balancing economic principles with a holistic
understanding of organizational dynamics remains a challenge in contemporary
management theory and practice. His ideas on the division of labor, productivity, and the
role of self-interest had a lasting impact on the theory of management. The principles he
articulated provided a foundation for subsequent management theorists to explore the
organization and optimization of work processes in the pursuit of economic efficiency and
prosperity.