Introduction to management

–
Lecture 3.
Evolution & theories

Dr. Piroska Hoffmann

Fall 2023
 Agenda
The Evolution of Management theories
0. Origins of Management Thought
1. The Classical Management Perspective
2. The Behavioural Management Perspective
3. The Quantitative Management Perspective
4. Integrating of the major perspectives
Origins of Management Thought
Management practices in Antiquity

Griffin (2017, p. 35)

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0. Origins of Management Thought
Early Management Pioneers (1)
Robert Owen (1771–1858)
• Welsh textile
manufacturer (factory
owner);
• one of the first managers
to recognize the
importance of human
resources and the welfare
of workers.
• He implemented better working conditions, a
higher minimum working age for children, meals
for employees, and reduced work hours
• Owen believed that workers deserved respect and
dignity.
 https://upload.wikimedia.org/wikipedia/commons/thumb/6/6b/Charles_Babbage_-_1860.jpg/800px-Charles_Babbage_-_1860.jpg
0. Origins of Management Thought
Early Management Pioneers (2)
Charles Babbage (1792–1871)
• English mathematician;
• focused on creating
efficiencies of production
through the division of labor,
and the application of
mathematics to management
problems.
• On the Economy of Machinery and Manufactures:
the application of mathematics to such problems as
the efficient use of facilities and materials.
 Evolution of Industry
An overview

Industry 3.0
Computer and
automatizatioon

Industry 4.0
Industry 1.0 Cyber-Physical Systems,
Water and stream power Industry 2.0 Electricity IT
mechanisation of production Mass production Digitalization of
production
2020

Griffin (2017, p. 49)

Evolution of Management
An overview

2020
The Basic Questions of Management

How can organizational performance, efficiency and

effectiveness be increased?
Efficient = using resources wisely and in a cost-effective way
Effective = making the right decisions and successfully
implementing them.

How can members of the organization be motivated to

improve their performance?
 Fields of Management

planning, organizing managing Leading, motivation, group

managing
and controlling work and behaviour, communication
people
organization

managing
production
and operation

managing PO, decision support system,

quality management, toolkit in POM
 Frederick Taylor
Schools of Management
Frank and Lillian
Gilbreth,
Mary P. Follett

Henry Ford
Scientific Human Relations Elton Mayo
Management Movement
Henry Gantt

Abraham Maslow

Harrington Emerson
Classical Behavioural
Management Management
Perspective Perspective
Douglas McGregor
Henri Fayol

Kurt Lewin
James Mooney Organizational
Behavior
Classical Quantitative
Organization Theory Chester Barnard
Max Weber
Management
Perspective
Herbert Simon
Process-based School

Operations Management
Management Science
1. Classical Management Perspective

Aspects:
• managing work and
organization
• productivity, performance
• the ideal organizational
structure
• Focus on increasing the
efficiency
 1. Classical Management Perspective
1.1. Scientific Management
• Concerned with improving the performance of individual
workers (i.e., efficiency).
• Grew out of the industrial revolution’s labour shortage at the
beginning of the 20th century.

1.2. Classical Organization Theory (Administrative Management)

• A theory that focuses on managing the total organization
rather than individuals.
 1.1. Scientific Management
Advocated the application of scientific methods to analyze work
and to determine how to complete production tasks efficiently
Four principles:
• develop a scientific approach for each element of one’s work
• scientifically select, train, teach and develop each worker
• cooperate with workers to ensure that jobs match plans and
principles
• ensure appropriate division of labor
Representatives: Frederick W. Taylor, Frank and Lillian Gilbreth,
Henry Gantt, Harrington Emerson, Henry Ford
 1.1. Scientific Management
Frederick Winslow Taylor (1856–1915)
Replaced old methods of how to do work with scientifically-
based work methods to improve industrial efficiency
• Eliminated “soldiering” where employees deliberately worked at a pace
slower than their capabilities.

Believed in selecting, training, teaching, and developing workers.

Used time studies of jobs, standards planning, exception rule of
management, slide-rules, instruction cards, and
piece-work pay systems to control and motivate employees
(rather than paying all employees the same wage).
 1.1. Scientific Management—Taylor
Steps in Scientific Management
1. Develop a science for each element of the job to
replace old rule-of-thumb methods.
2. Scientifically select employees and then train them to
do the job as described in step.
3. Supervise employees to make sure they follow the
prescribed methods for performing their jobs.
4. Continue to plan the work and use workers to actually
get the work done.
 1.1. Scientific Management
Frank B. Gilbreth (1868-1924) and

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Lillian M. Gilbreth (1878-1972)
Both developed techniques and
strategies for eliminating
inefficiency.
• Frank reduced the number of
movements in bricklaying,
resulting in increased output of
200%.
• Lillian made substantive
contributions to the fields of
industrial psychology and
personnel management.
 Frank és Lillian GILBRETH
MOVEMENT STUDY

Cyklogram-technique (bulb)
 1.1. Scientific Management
Henry Laurence Gantt (1861-1919)
• mechanical engineer and management consultant
• He divided shipbuilding into processes and tasks, measured
and documented the execution of the tasks, and created
special graphs for this himself.
• Gantt-chart
 1.1. Scientific Management
Harrington Emerson (1853-1931)

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„Efficiency ingenious”, High Priest of Efficiency

• Nearly 200 companies adopted various

features of the Emerson Efficiency system:
• production routing procedures
• standardized working conditions and tasks,
• time and motion studies, and
• a bonus plan which raised workers' wages in
accordance with greater efficiency and
productivity
• Railroads – the promotion efficiency
• Books:
• Efficiency (1911);
• The Twelve Principles of Efficiency (1912)
Planning department 1911
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• standards
• assembly line

• $5 per day wage

• mass production

• five 8-hour days a week

Focus: productivity, output, costs
Henry Ford (1863-1947)
1.1. Scientific Management

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 1.2. Classical Organization Theory
Emphasized the perspective of senior managers
5 management functions: planning, organizing, commanding,
coordinating, controlling
14 principles of management
Focuses on managing the whole organization rather than
individuals.
Representatives: Henri Fayol, Max Weber
 1.2. Classical Organization Theory
Henri Fayol (1841–1925)
Was first to identify the specific management functions of planning, organizing,
leading (commanding & coordinating), and controlling, established 14
principles of Mgmt, distinguished activities of organisations.
Max Weber (1864–1920)
His theory of bureaucracy is based on a rational set of guidelines for
structuring organizations.
Lyndall Fownes Urwick (1891–1983)
Integrated the work of previous management theorists.
James David Mooney (1884-1957)
Focussed on organizing and organization, Onward Industry (1931), The
Principles of Organization
 1.2. Classical Organization Theory
Fayol’s 14 principles of Management

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1. division of labor, 8. centralization,
2. authority, 9. scalar chain,
3. discipline, 10.order,
4. unity of command, 11.equity,
5. unity of direction, 12.stability of tenure of
6. subordination of personnel,
individual interests to 13.initiative,
the general interest, 14.esprit de corps
7. remuneration (morale)
 1.2. Classical Organization Theory
Fayol’s 14 principles of Management
1. Division of Work: Specialization builds expertise and makes individuals more productive.
2. Authority: The right to issue commands and assume responsibility for their execution.
3. Discipline: Employees must obey, but this is two-sided: employees will only obey orders
if management play their part by providing good leadership.
4. Unity of Command: Each worker should have only one boss with no other conflicting
lines of command.
5. Unity of Direction: People engaged in the same kind of activities must have the same
objectives in a single plan. This is essential to ensure unity and coordination in the
enterprise. Unity of command does not exist without unity of direction but does not
necessarily flow from it.
6. Subordination of individual interests (to the general interest): Management must ensure
that the goals of the organisation take priority over the interest of its individual
members.
 1.2. Classical Organization Theory
Fayol’s 14 principles of Management
7. Remuneration: Payment and rewards are important motivators, although by analysing a
number of possibilities, Fayol pointed out that there is no such thing as a perfect
system.
8. Centralization or Decentralization: Managers must decide on the appropriate balance
between the two, depending on the state of the organisation and the quality of its
personnel.
9. Scalar chain (Line of Authority): A hierarchy of authority is necessary for unity of
direction but there must be lateral communication, i.e., communication between people
at the same level in the organisation structure, as well. (An organisation consists of
superiors and subordinates. The formal lines of authority from highest to lowest ranks
are known as scalar chain.)
10.Order: Both social order and material order (orderly purchasing and usage of materials)
are necessary. The social order is achieved through organization and selection. The
material order minimizes lost time and useless handling of materials.
 1.2. Classical Organization Theory
Fayol’s 14 principles of Management
11.Equity: Fair treatment for all employees to achieve equity. In running a business, a
‘combination of kindliness and justice’ is needed.
12.Stability of Tenure of Personnel (employee retention): Low turnover, meaning a stable
work force with high tenure, benefits an organization by improving performance, lowering
costs, and giving employees, especially managers, time to learn their jobs. Employees work
better if job security and career progress are assured to them. An insecure tenure and a
high rate of employee turnover will affect the organization adversely.
13.Initiative: All employees should be encouraged to exercise initiative in some way, which
provides source of strength for the organization. Even though it may well involve a sacrifice
of ‘personal vanity’ on the part of many managers.
14.Esprit de Corps (Morale): Management must foster the morale (reach high levels of
motivation) of its employees. Fayol further suggests that: “real talent is needed to
coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s
merit without arousing possible jealousies and disturbing harmonious relations”.
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1.2. Classical Organization Theory
Max Weber’s Bureaucracy
• Bureaucratic structures can
eliminate the variability that
results when managers in the
same organization have
different skills, experiences, and
goals
• Bureaucracy allows large
organizations to perform the
many routine activities
necessary for their survival
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1.2. Classical Organization Theory
Max Weber’s Bureaucracy
• Elements of bureaucratic • People should be treated in
organizations: unbiased manner
• Qualification-based hiring
• Merit-based promotion
• Chain of command
• Division of labor
• Impartial application of rules and
procedures
• Recorded in writing
• Managers separate from owners
 1.2. Classical Organization Theory
Process-based School
Concentrating on the process of the management functions.
 Process-based School
Levels vs.
Levels of Management functions vs.
100
Lower level Middle level Top level
skills
Planning
Conceptual
skills

Organising
Time

Human
skills

Controlling
Technical
skills
0

Leading
 1. Classical Management Perspective…
The classical management perspective had two primary tenor:
Scientific management focused on employees within organizations and on ways to improve their
productivity.
Organization management focused on the total organization and on ways to make it more efficient
and effective.

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
‒ More appropriate approach for use in
traditional, stable, simple
organizations.
‒ Prescribed universal procedures that
are not appropriate in some settings.
‒ Employees are viewed as tools rather
than as resources.
2. Behavioural Management Perspective
Mary P. Follett

Human Relations Elton Mayo

Movement

Abraham Maslow

Behavioural
Management
Perspective
Douglas McGregor

Kurt Lewin
Organizational
Behavior
Chester Barnard

Herbert Simon
 2. Behavioural Management Perspective

Emphasized individual attitudes and behaviours, and group

processes, and recognized the importance of behavioural processes
in the workplace.
2.1. Human Relations Movement
2.2. Organizational Behaviour
 2. Behavioural Management Perspective
Mary Parker Follett (1868–1933)

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“mother” of Behavioural Management
• Recognized the importance of the role
of human behaviour in the workplace
• Allowing self-managed groups: „not
power over, but with workers”
• Networking, knowledge sharing
• authority of expertise

• Book: The New State: Group Organization,

The Solution for Popular Government” (1920)
 2.1. Human Relation Movement
The Hawthorne Studies (1924/27–1932)
Conducted by Elton Mayo (1880–1949) and associates at
GE/WE
• Illumination study—workplace lighting adjustments affected both the
control and the experimental groups of production employees.
• Group study—implementation of piecework incentive plan caused
production workers to establish informal levels of acceptable individual
output.
• Over-producing workers were labeled “rate busters” and under-producing workers
were considered “chiselers.”
• Interview program—confirmed the importance of human behaviour in
the workplace.
• Bank Wiring Observation Room Program – 14 workers were formed
into a work group and observed for 7 months
• The incentive pay plans did not work because wage incentives were
less important to the individual workers than was social acceptance
 2.1. Human Relations Movement
Grew out of the Hawthorne studies – workers perform and react
differently when researchers observe them = received special
attention and sympathetic supervision Hawthorne Effect
• Proposed that workers respond primarily to the social context of work,
including social conditioning, group norms, and interpersonal dynamics.
• Assumed that the manager’s concern for workers would lead to
increased worker satisfaction and improved worker performance.
• Aimed to understand how psychological and social processes interact
with the work situation to influence performance
• Argued that managers should stress primarily employee welfare,
motivation, and communication
• Representatives: Elton Mayo, Abraham Maslow
 2.1. Human Relations Movement
Maslow’s Hierarchy of Needs
Abraham Harold Maslow (1908-1970)
• Advanced a theory that employees are motivated by a
hierarchy of needs that they seek to satisfy.
 2.2. Organizational Behaviour
Studies management activities that promote employee
effectiveness
• investigates the complex nature of individual, group, and organizational
processes
• Representatives: Douglas McGregor, Kurt Lewin, Chester Barnard,
Herbert Simon
• this field include job satisfaction, stress, motivation, leadership, group
dynamics, organizational politics, interpersonal conflict, and the
structure and design of organizations.
 2.2. Organizational Behaviour
Douglas McGregor (1906-1964)
Proposed Theory X and Theory Y concepts of managerial beliefs
about people and work

• Theory X: managers assume that workers are lazy, irresponsible, and

require constant supervision
• Theory Y : managers assume employees want to work and control
themselves
• What a manager expects of his subordinates and the way he treats
them largely determine their performance and career progress.
• A unique characteristic of superior managers is their ability to create
high performance expectations that subordinates fulfill.
 2.2. Organizational Behaviour
Douglas McGregor (1906-1964)
Theory X manager Theory Y manager
thinks that employees:
want self-direction & self-
dislike work & avoid it
control in their work
have lack of ambition want to be creative & assume
avoid responsibility responsibility
prefer job security the most
are interested in displaying
must be coerced & closely imagination and creativity to
supervised to work adequately solve organizational problems
 2.2. Organizational Behaviour
Kurt Lewin (1890-1947)
• Leadership styles: authoritarian, democratic, laisses-faire
• Force field analysis, action research, change process,
Lewin's equation, group dynamics
Chester Irving Barnard (1886–1961)
• „The Functions of the Executive” (1938)
• Communication system, theories of authority and incentives
Herbert Alexander Simon (1916–2001)
• Decision-making
• Artificial intelligence, psychology, sociology and economics
 2. Behavioral Management Perspective…
... focuses on employee behavior in an organizational context. Stimulated by the birth
of industrial psychology, draws from an interdisciplinary base and recognizes the
complexities of human behavior in organizational settings.

Contributions
+ Provided important insights into
motivation, group dynamics, and other
interpersonal processes.
+ Focused managerial 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.
- Contemporary research findings are not
often communicated to practicing
managers in an understandable form.
3. Quantitative Management Perspective

Quantitative
Management
Perspective

Operations
Management Management Science
 3. Quantitative Management Perspective
Emerged during World War II to help the Allied forces manage logistical
problems.
• Focuses on decision making, economic effectiveness, mathematical
models, and the use of computers to solve quantitative problems.
• Teams of quantitative experts tackle complex issues that large
organizations face.
• Helps management make a decision by developing formal mathematical
models of the problem.
• Representatives: military planners in World War II
 3. Quantitative Management Perspective
3.1. Management Science
• Focuses on the development of representative mathematical models
to assist with decisions.
• Linear Programming, Game Theory, Sampling Theory, Probability
Theory, Simulation, etc.
3.2. Operations Management
• Practical application of management
science to efficiently manage the
production and distribution
of products and services.
• Quality Contol, Total Quality Management, Just In Time Technique,
Six Sigma, etc.
 3. Quantitative Management
Perspective…
The quantitative management perspective focuses on applying mathematical models
and processes to management situations. Management information systems are
developed to provide information to managers.
Contributions Limitations
+ Developed sophisticated quantitative - Quantitative management cannot fully
techniques to assist in decision making. explain or predict the behavior of people
+ Application of models has in organizations.
increased our awareness - Mathematical sophistication may come at
and understanding of the expense of other managerial skills.
complex processes and - Quantitative models may require
situations. unrealistic or unfounded assumptions,
+ Has been useful in the limiting their general applicability
planning and controlling
processes.
 Frederick Taylor
Schools of Management
Mary P. Follett
Frank and Lillian
Gilbreth, Henry Ford
Human Relations Elton Mayo
Scientific Management
Movement
Henry Gantt

Abraham Maslow

Harrington Emerson
Classical Behavioural
Management Management
Perspective Perspective
Douglas McGregor
Henri Fayol

Kurt Lewin
James Mooney Organizational
Behavior
Classical Organization Quantitative
Theory Chester Barnard
Max Weber
Management
Perspective
Herbert Simon
Process-based School

Operations
Management Management Science
 4. Integrating the major perspectives

Managers
should include
portions of
each Classical Behavioral Quantitative
perspective Management Management Management
Perspectives
relevant to Perspectives Perspectives
their situation Methods for Insights for Techniques for
and apply them enhancing efficiency motivating improving decision
using systems and facilitating performance and making, resource
and planning, organizing understanding allocation, and
and controlling individual behavior, operations
contingency
groups and teams,
approaches. and leadership

Effective and efficient management

Griffin (2017, p. 48)
 4. Integrating the major perspectives

Systems Perspective Contingency Perspective

Managers • Recognition of internal interdependencies • Recognition of the situational nature of management
• Recognition of environmental influences • Response to particular characteristics of situation
should include
portions of
each Classical Behavioral Quantitative
perspective Management Management Management
Perspectives
relevant to Perspectives Perspectives
their situation Methods for Insights for Techniques for
and apply them enhancing efficiency motivating improving decision
using systems and facilitating performance and making, resource
and planning, organizing understanding allocation, and
and controlling individual behavior, operations
contingency
groups and teams,
approaches. and leadership

Effective and efficient management

Griffin (2017, p. 48)
 4. Integrating the major perspectives
4.1. The Systems Perspective (Open Systems)
A system is an interrelated set of elements functioning as a whole.

4.2. The Contingency Perspective

Appropriate managerial behaviour in a given situation depends on (or is
contingent on) a wide variety of elements.
 4.1. The Systems Perspective
• Organization is an open system
 4.1. The Systems Perspective (Open Systems)

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Environment

ENTROPY
System
Stakeholders
SYNERGY

Inputs Transformation process Outputs

Government
Law Ecology
Technology Financial
institutions
Shareholders Pressure Unions
Feedback Local
Employees Economy
Suppliers Authority groups
Competition
Health & Climate
Customers ethics
safety
 4.2. The Contingency Perspective
Universal Perspective
• Includes the classical, behavioural, and quantitative
approaches.
• An attempt to identify the “one best way” to manage
organizations.
The Contingency Perspective
• Suggests that each organization is unique.
• The appropriate managerial behaviour for managing an
organization depends (is contingent) on the current
situation in the organization.
Summary
 Key Points
• Summarized and evaluated the classical perspective on
management, including scientific and classical organizational
management, and note its relevance to contemporary managers.
• Summarized and evaluated the behavioral perspective on
management, including the Hawthorne studies, human relations
movement, and organizational behavior, and note its relevance to
contemporary managers.
• Summarized and evaluated the quantitative perspective on
management, including management science and operations
management, and note its relevance to contemporary managers.
• Discussed the systems and contingency approaches to
management and explain their potential for integrating the other
areas of management.