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Chapter 2 - intro to management

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Introduction to Management
Chapter Two

THE EMERGENCE AND DEVELOPMENT

OF MANAGEMENT THOUGHT
2.1. Introduction
The formal study of management theory is the result of the twentieth century. And
different contributors contributed their share to management theory as a separate
discipline.

2.2. The Early Management Pioneers

The following are some of the early management pioneers who contributed for the
development of management.
Robert Owen (1771-1858)
Working as a manager of Cotton Mills Company in Scotland, Robert Owen was
concerned about the poor working and living conditions of workers. As a result, he
placed great importance on ensuring that the living machine should be treated with
kindness and sufficiently supplied with the necessities of life. As a result he:

 tried to improve the working conditions in his factory;

 provided meal, housing and marketing facilities to the employees in the factory;
 reduced the working hour from 13 to 101/2 hours; and
 refused to hire children below-the age of 10 years.
Charles Babbage (1792-1871)
Babbage was a mathematician and is best remembered as the inventor of the
‘analytical machine’ which was the forerunner of the modern computer. His
contributions to management are:-
 He stressed the importance of division of labour on the basis of skills.
 He emphasized the necessity of replacing the manual operations by machines.
 He laid down the foundation for formulating scientific management.
Henry Robinson Towne (1844-1924)

Towne was a founder and manager of yale and Towne manufacturing company. He has
succeeded in motivating the engineers to study management. According to him, a
manager should be:
 an administrator;
 an engineer; and
 a thorough statistician
Thus, he wanted to see these three people in a single person-called manager. Towne
emphasizes that this combination of qualities, together with at least some skill as an
accountant, is essential to the successful management of industrial work.

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2.3. Forerunners of Modern Management
The prominent forerunners of modern management include: F.W Taylor, H.Fayol,
Gilbreths, Weber, H.L.Gantt, Elton Mayo,and other
1. Frederick Winslow Taylor (1856-1915)
Taylor realized that to expand productivity, ways and means had to be found to
increase the efficiency of workers. He observed certain factors which led to low
productivity.
Some of these factors were:
 incentive rate cutting by employers;
 poor methods of training;
 lack of standards of performance;
 lack of a spirit of cooperation on the part of both labor and management.
In an effort to address these problems, Taylor built the body of principles that now
constitute the essence of scientific management.
2. Henry Fayol (1841-1925)
Henry Fayol was a French engineer and geologist. While Taylor was interested in
improving worker and factory productivity, Henry Fayol was concerned with the
executive managerial role.
Henry Fayol divided the activities of industrial organization in to six categories.
These are:
a. Technical:- production and manufacturing.
b. Commercial:- buying, selling and exchange.
c. Financial:- identification and utilization of available funding.
d. Security:- protection of persons and properly.
e. Accounting:- stocktaking, preparation of balance sheet and statistical data.
f. Management:- planning, organizing, coordinating, commanding and controlling.
Fayol further developed fourteen principles of management, which will be separately
discussed later. He was considered as the father of administration
process/management theory.
3. Henry Laurence Gantt (1861-1919)
Gantt was a prominent follower of Taylor. He was more interested than Taylor in the
human relations aspect of management. Gantt made four main contributions to the
evolution of management thought. These contributions are listed below.
(i) He invented a chart for comparing actual with planned performance. The
device is now called Gantt chart.
(ii) He devised a task bonus plan for paying workers. His plan paid workers a
guaranteed day wage for output less than standard, a bonus for meeting the
standard, and an additional reward for output above the standard.
(iii) He advocated that management has a responsibility to train workers to
become more skilled, develop better work habits and perform reliably.
(iv) He advanced the idea that business should concentrate on providing services,
not on making profit.

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4. Frank and Lillian Gilbereth (1868-1924 and 1878-1972)

Frank and Lillian Gilbreth were a husband and wife team that further developed Taylor's
ideas. They were among the first to film workers in order to analyze motion sequences
so that the most efficient way for performing specific task could be learned. The
Gilbreths advocated for the development of people through better training, improved
work methods, and better work environment. Moreover, they found out that such
incentives as pride, competition, and desire for recognition are often as
important as money, shorter hours, and promotions.
5. Max Weber (1864-1920)
Weber was a German Social Scientist. He wanted to frame a rigid form of organization
to eliminate inconsistencies, which lead to ineffectiveness. He emphasized the strict
adherence of rules and regulations in an organization. He was the advocate of
bureaucratic organization. His theory of bureaucracy will be discussed later.
6. George Elton Mayo (1880-1949)
The classical writers viewed people as machines that could be motivated by financial
incentives alone. They ignored the behavioral aspects of people. It was Elton Mayo and
his associates that applied psychological approach to management for the first time.
They found out that production is affected by the desires, attitudes and feelings of the
workers. According to Mayo, productivity would be increased and efficient management
could be realized through understanding of people. He conducted the Hawthorne
experiment focusing on the human behavior and discovered that when workers are
given special attention by management, the production is likely to increase irrespective
of the actual change of working condition. Consequently, he is regarded as the founder
and the father of behavioral approach.
2.3. Approaches to management thought
Different writers have provided different approaches or categorization schemes for
studying management. Accordingly, the study of management theories can be
categorized into three broad approaches which include:

 Classical theories
 Neo-classical theories and
 Modern theories
2.3.1 Classical Management Theories
The term classical means something accepted traditionally or long established. The
development of the classical theory can be examined from the point of view of three
different perspectives or streams. These are:-
(i) Scientific management
(ii) Administrative theory , and
(iii) Bureaucratic theory
(i) Scientific Management: This perspective of classical approach to management
concentrated on the problems of lower level or supervisory management, dealing
with the everyday problems of managing the workforce. At the turn of the 20th century,

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business started expanding, creating new products and markets. But labour was in
short supply. There were two possibilities to solve the problem:
(a) Substituting capital for labour, or
(b) Use the available labour more efficiently
The second solution, i.e. using the available labour more efficiently, was the concern of
scientific management.

Frederick Winslow Taylor was the founder of the scientific management school of
thought. The major theme of scientific management was that work could be studied
scientifically. In other words, Taylor realized that efficiency at work could be improved
through careful 'scientific' analysis. He advocated for the detailed study of each job to
determine the "one best way" of organizing and doing work. The primary emphasis
was on the application of scientific methods to the solution of managerial and
organizational problems.
Taylor's fundamental concern was to find out ways and means to improve production
efficiency. According to him, if efficiency in production is enhanced, both the employers
and the employees will benefit.
Taylor stressed that, workers and management need to consolidate their cooperation,
and work together for the attainment of common goals, in order to prosper. What he
observed was however the opposite. The relationship between workers and employers
was poor. They were conflicting, and this led to inefficiency. Lastly, Taylor suggested
the following major reasons for the conflict and inefficiency observed.
(i) Soldering by employees: - the workers deliberately delayed work for the fear
that an increase in productivity would expose them to unemployment. The
employees were afraid that their service would no longer be required if they
complete the work early.
(ii) Defective management system: - the management based its managerial
activities on common sense, individual judgment, and traditional ways, and
lacked a sense of mutual cooperation.
(iii) Lack of understanding about what constitutes a 'fair day's work' and a 'fair
day's pay' from both the management and the works side.
(iv) Inefficient methods or work: - the system was not scientifically designed
(v) Lack of incentive (bonus) mechanisms
(vi) Poor methods of selection and training of workers.
In an effort to address these problems, Taylor built the body of principles that now
constitute the essence of scientific management. As a result he is considered as the
'father of scientific management' and the theory is 'Taylorism'. The principles
developed by Taylor are discussed here under.
Principles of Scientific Management
i. Rules of Thumb should be substituted by scientific methods. Taylor
advocated that the old method of doing work should be replaced by scientific
method. The nature of work performed by each worker should be determined. This
includes the allotment of fair works to each employee, standardization of work,
adoption of piece rate of payment system, and the like.

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ii. Specialization should be Practiced. Taylor advocated the division of entire
work into managerial and non-managerial categories. He separated the
planning function from executive function. Before Taylor's period, both
planning and executive function were performed by the same person. Taylor
emphasized that supervisors should do the planning function, while the executive
function be assigned to the workers alone. He believed that vertical specialization
would improve job performance.
iii. Proper selection and training should be done. Taylor emphasized the proper
selection and training of workers. He suggested that workers should be selected
and provided with job training. The management should find out the physical,
educational and psychological requirements of each job, and suitable person to
each job.
iv. Harmony in group action- F.w Taylor advocated for peace and friendship in
group action. He stressed that, dissatisfaction of any worker should be avoided in
the group action. Dissatisfaction of workers can be avoided through the
introduction of scientific selection, training and strategic placement of workers.

v. Wage incentive should be utilized. According to Taylor, man is mechanical

and as a result motivated by economic benefits. Consequently, he proposed
different piece rate systems, in which a worker was paid in proportion to the
amount he/she produced.
Moreover, Taylor and his associates like the Gilberths, have conducted many studies
and experiments to find out how workers could be more productive and/or efficient.
The following are some of the major studies carried out by Taylor and his followers.
a. Motion study- is the study of relating to the movement of a machine operator and
his machine while performing a job. It is the art of determining the perfect
movement necessary to perform a given job by eliminating all unnecessary
movements of machine operator and the machine.
b. Time study- is the art of determining how long it would take to perform a given
element of work or particular job.
c. Fatigue study- is the process of determining the working hours and resting
hours of employees to accomplish a given task.
Major contributions of Taylor
The following are the major contributions that Taylor made to the development of the
principles of scientific management.
i. The development of science of work i.e. finding out the one best way of doing a
given work through time, motion, and fatigue study.
ii. Scientific selection and prospecting development of the workforce.
iii. The constant and intimate cooperations of management and workers theory
(process of functional approach).
iv. The separation of planning function from executing function
II. Administrative Management theory
The administrative management theory was initiated by Henry Fayol. Fayol believed
that management is not personal talent, but a skill like any other fields. The
Administrative management theory has two major purposes:
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 To identify the fundamental functions of management

 To develop basic principles of management that could guide the creation, design
and maintenance of large organization.
Fayol found out that the activities of every organization should be divided into six
categories, as indicated in the foregoing discussions. Fayol also developed 14 important
principles of management that are applied to all types of organizations. These
principles are presented here after.
Fayol's 14 principles of management

1. Principle of Division of work

Division of work makes a man specialist. Specialization leads to better efficiency and
maximum output. It also avoids wastage of time. According to Fayol, division of work is
applied to both technical and managerial kinds of work.
2. Principle of Authority and Responsibility
Authority is the right to command to get the work done. On the other hand,
responsibility is the accountability of authority so that the official authority is not
misused. Thus, responsibility is the natural outcome of authority.
3. The principle of Discipline
It suggests that, all people in an organization should respect the rules that govern the
organization, and those stated in the employment agreement. Fayol further states that,
these rules and agreements should be clearly defined and understood, and enforced
fairly and judiciously.

4. Principle of Unity of Command

This principle suggests that every one should have only one superior, and each
subordinate is responsible to only one superior. Otherwise, conflict and confusion in
authority and instruction would arise.
5. The Principle of Unity of Direction
This principle of Fayol states that "there should be one head and one plan" for a
group of activities having the same objective. For example, the personnel department
should have only one personnel manager, with a specified plan for a group of activities
having the same objective. For Fayol, this principle is necessary for unity of action,
coordination of strength, and focusing on effort.
6. Principle of Subordination of Individuals Interest to Organizational
(General) Interest
H. Fayol expected the reconciliation of the individual interest with the organizational
interest. While the individual interests should be integral with organizational interest as
much as possible, the organization must take priority over the interest of an individual
or a particular group, where there is a conflict between the two.

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7. Principle of Remuneration of Employees. Remuneration and method of
payment should be fair and afford the maximum possible satisfaction to employees and
employer.
8. Principle of Centralization
Centralization means, the authority is concentrated at the upper level. Decentralization
refers to the delegation of authority downward. Fayol believed that while some
authority should be given to the subordinates to make decisions, all major decisions
should be made at the top management.
9. Principle of Scalar Chain
Scalar chain is the chain of superiors ranging from the top management to the lowest
level in the organization. However, this is proved to be very time consuming, in case
when people in different departments but at the same level of hierarchy, needed to
communicate with each other. Fayol solved this problem by introducing the
Gangplank-policy, which states such people could communicate with each other
directly, but with the permission of superior.
10.Principle of Order
Both materials and people must be well chosen, well placed, and well organized for a
smooth-running of an organization; For material things "A place for every thing and
everything in its place". For people, "A place for everybody, and everybody in his/her
place".
11.Principle of Equity
Equity refers to combination of fairness, kindness and justice. These will encourage
employees to work well and be loyal. Therefore, all the employees of the organization
should be treated equally by the managers.

12.Principle of Stability of Tenure of Employees.

Employees turnover should be discouraged or minimized. Tenure and long-term
commitment should be encouraged. A person needs time to adjust himself with the
new work. Hence, employees and managers must have job security. The managerial
personnel in particular should be stable.
13. Principle of Initiative. Thinking out a plan and carrying it out successfully can be satisfying. Therefore,
subordinates must be encouraged to initiate new ideas and carry out their plans.
14. Principle of Esprit de Corps (Spirit of coordination). This is the principle
“Union is strength”. All the employees of the organization are put together as team, in
order to achieve the objective of the organization. It implies that teamwork, team
spirit and togetherness must be developed and maintained.
III. Bureaucratic Theory
The chief advocate of the bureaucratic organization was Max weber. To Weber, a pure
form of organization is characterized by rationality and impersonality. Rationality
implies goal directedness. Impersonality implies objectivity in interpersonal relations.
Human resource decisions in bureaucracies were to be strictly impartial based on
qualification and work demands rather than on caste system in the personal preference
of decision makes.

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According to Weber, bureaucracies are goal-oriented organizations designed according
to rational principles, in order to efficiently attain their goals.
Common Features (Characteristics) of Bureaucracy
 Hierarchy of Authority Stable and clearly defined authority is needed to ensure
clear authority responsibility relationship, and to give commands for proper
discharge of duties at various levels.
 Specialized division of labour- tasks are divided into very specialized jobs.
 Written rules of conduct-rigorous set of rules must be followed to insure
predictability and eliminate uncertainty in task performance.
 Impersonality - superiors take on impersonal attitude in dealing with
subordinates.
 Promotion based on achievement- employment and promotion based on merit
and technical competence.
 Record Keeping- every decision and action is taken only after writing in a number
of documents.
 Efficiency -

Advantages and Disadvantage of Bureaucracy- Some of the advantages of

bureaucracy are precision, speed, unambiguity, knowledge of the files, unity,
strict subordination, reduction of friction and of material and personnel
costs.

Some of the drawbacks of bureaucracy are:

 Rigidity of rules, regulations and procedures;
 Failure of cooperation and coordination;
 Displacement of goals; and
 Red tape (excessive procedure).

Contributions of the Classical Management Approach

The greatest contribution of the classical approach was that, it identified
management as an important element of organized society. Management has
increased in importance. The identification of management functions such as planning
organizing and controlling provided the basis for training new managers.

Moreover, many management techniques used today are direct outgrowth of the
classical approach. For instance, time and motion analysis, work simplification,
inccentive wage systems, production scheduling, personnel testing, and budgeting are
all techniques derived from the classical approach.
2.3.2. Neo – Classical Theories
The basis for Neo-classical theory is classical theory. Neo-classical theory modified,
improved and extended the classical theory. In the 1920s and 1930s, observers of
business management began to feel the incompleteness and shortsightedness in the
scientific as well as the administrative management movements. As can be realized
from the foregoing discussions, the scientific management movement analyzed the
activities of workers, whereas the administrative management writers focused on
the activities of managers. Thus, the importance of the man behind the

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machines and the importance of individual as well as group relationship in the
work place were never recognized.
Elton Mayo and his associates clearly pointed out that workers should not be treated as
mere factors of production but should be treated as human beings. Elton Mayo
emphasized that workers attitudes, feelings and needs are extremely important on the
job. His famous study of the Hawthorhe plant (Western Electric) located in USA, laid
the foundation for the human dimension in organization.

Some writers classify Neo-classical theories into two branches, namely, the human
relations approach and the behavioral science approach. These approaches are
briefly discussed here under.

2.3.2.1. The Human Relations Approach

The human relations approach became very popular in the 1940s and 1950s. It refers
to the manner in which managers interact with subordinates. According to the
followers of this approach, to develop good relations, managers must know why their
subordinates behave as they do and what psychological and social factors influence
them. The concentration of scientific management was on the physical environment
of the job, whereas human relations concentrated on the social environment. Elton
Mayo is the founder of the human relations approach. Mayo and his associates
conducted the Hawthorne studies in a number of different stages and these studies
contributed to the evolvement of the human relations approach.

Discuss the five stages of the Hawthorne studies, emphasizing the purpose and the
findings of each study!

The Major Conclusions of the Hawthorne studies

The following are the major conclusions of the Hawthorne study.

i. Individual workers must be seen as members of a group. They should not be

treated in isolation.
ii. The need to belong to a group and have status within it is more important
than monetary incentives or good physical working conditions.
iii. Informal groups at work exercise a strong influence over the behavior of
workers.
iv. Superiors and/or managers need to be aware of the social needs of workers
and cater for them, if workers are to collaborate with the official organization
rather than work against it.
It is worthwhile to note here that prior to the Hawthorne studies no consideration was
given to the importance of the human factor or it was overlooked. What is peculiar of
Mayo and his associates is that, they underscored the need for greater and deeper
understanding of the social and behavioral aspects of management.

2.3.2.2. The Behavioral Science Approach

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Individuals who studied to the social sciences such as psychology, sociology, and
anthropology began studying people at work. The approach of these scholars was
considered to be distinct from the human relations approach in that, they applied the
scientific approach to the study of human behavior. Behavioral scientists underscored
that individuals are motivated to work for various reasons in addition to making money
and forming social relationships. They concentrated on the nature of the work itself,
and the degree to which it can fulfill the human need to use skills and abilities.
Contributions and Limitations of Neo – Classical Theory
Contributions:
The Neo – Classical approach has contributed a lot in developing important ideas and
carrying out research undertakings in the people managing aspect of the discipline of
management. The basic rational is that, since management must get work done
through others, management is really applied behavioral science. The point is that a
manager must motivate, lead, and understand interpersonal relations.

Limitations

The basic assumption that managers must know how to deal with people appears valid.
But management is more than applied behavioral science. For the behavioral approach
to be useful to managers, it must help them in problem solving situations and make
them better practitioners of the process of management.

2.3.3. Modern Management Theories

Modern management theories indicate further refinement, extension and synthesis
of all the classical and neo-classical approaches to management. The concern of the
classical approach was to satisfy the basic economic needs of the organization and the
society. Neo – classical approach emphasized the satisfaction of personal security and
the social needs of workers. Both approaches need to be suitably integrated to
emphasize the need for the recognition of human values and the need for productivity
as well.

Some writers classify the modern management theory into three streams. These
include:
i. The Quantitative / Management Science Approach,
ii. The Decision Theory Approach,
iii. The Systems approach, and
iv. The Contingency approach.

2.3.3.1. The Quantitative Approach

The quantitative approach is also known as the mathematical, operation research or
the management science approach. According to the proponents of this approach,
since managing is a logical and rational process, it can be expressed in terms of
mathematical relationships and models. This will lend exactness to management
process and substitute certainty for guesswork, knowledge for judgment and hard facts
for experience.
The management scientists introduced various mathematical tools for solving problems
of management in the areas of-quality control, inventory control, warehouse
operations, resource allocation, etc. However, the management scientists didn’t

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contribute to the theory of management except that they made mathematical tools
available to practitioners of management.

2.3.3.2. The Decision Theory Approach

The decision theory approach looks upon the management process as a decision
making process. According to the decision theorists, the entire field of management
can be studied from the study of the decision-making process, since the performance of
various management functions involves decision-making.

It is true that every task of the manager involves decision-making. The totality of
management is however, something more than decision making. The core tasks of the
modern manager are innovating, integrating the organization with its external
environment, and creation of an organizational climate which is conducive to the
optimum performance of its members.

2.3.3.3. The System Approach

The system approach to organization and management emerged in the 1950s. The
contributors of this theory include; Ludwig Von Bertalanffy, Lawrence J. Henderson, H.G,
Scott, Daniel Katz, Rober L. Khan, etc. These theorists viewed organization as an
organic and open system composed of interacting and interdependent parts, called
sub-systems. The systems approach to management views the elements of an
organization as interconnected. The approach moreover views the organization as
linked to its environment. The point is that, organizational effectiveness and survival
depends on the organization’s interaction with its environment.
The following are some of the features of the systems theory:
System: - It is a set of interrelated parts that work together to achieve an objective. A
Company, a University and the Human body are examples of systems.
Sub-system: - is a set of related parts that work together to achieve an objective as
one component of a large system. For example, the human body’s circulatory system,
nervous system, respiratory system etc. are sub-systems of the human body.
Open and Closed Systems: – A system can be open or closed. Open systems are
those systems, which interact with the external environment. They take inputs from
the outside environment for survival. Closed systems are systems which do not
interact with the outside environment. They don’t take inputs from the environment.
Input – Transformation – Output Model: – An open system receives inputs such as
money, material, personnel, and technology from its environment and transforms them
into outputs such as goods and services, interacting with environmental variables.

System Boundary: – is the part of the system that separates the system from the
environment and filters the inputs going to the system, and the outputs that go out of
the system.
System Goals: – Organizations have a variety of goals. The major goal of an
organization is survival. All other goals depend on the achievement of this one goal.

Feed-back: – Business systems have inherent feed-back mechanisms that provide

various types of useful information to management. Management makes use of the
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information in controlling the performance at different stages of work. Feed-back also
helps to improve the quality of the products manufactured and the services redered by
a given organization.
Psychosocial system: – A business organization is a psychosocial system in the sense
that people working in a firm develop social relationship and they constantly interact
with one another.
Creativity: – Business is creative in that it fruitfully converts the available resources
into useful products.
Interdependence – Various sub-systems of a business system are interdependent and
interacting. Different departments are interlinked in one way or another to achieve
specified goals. Interdependence also exists between various firms and/or industries.

INPUTS TRANSORMATION (THROUGH-PUT) OUT PUTS

- Human Organizational Environmental - Product

resources Variables Variables - Service
Sub –Boundary
Systems

- Money - Methods -Economic s

- Materials - Processes conditions - Profits
- Objectives - Actions of
System

- Knowledge - Policies competitions - Educati

- Energy - Decisions - Union on
A ivi
Management know –how and technology
transforms inputs

Feed-back

Schematic Model for system

Systems have five basic characteristics, which include the following:
i) They consist of a set of components.
ii) They have identifiable boundary.
iii) There is an input-throughput – output relationship.
iv) They have a purpose to accomplish.
v) They are made up of sub-systems.

2.3.3.4. The Contingency Theory Approach

The Contingency theory was mainly developed in the 1970s. One of the important
contributions of the contingency perspective may best be summed up in the statement
that ‘There is no one best way to manage’. According to this approach, the best
way to conduct managerial activities varies with the situation. In some situations,
manager’s best approach to a subordinate may be directive and dictatorial; in others
a sympathetic and democratic approach may be appropriate. Thus, according to the
contingency approach, managers must find different ways that fit different situations.
They must continually address themselves with the question “Which method will
work best here?” Applying the contingency (situational) approach requires that,
mangers diagnose a given situation and adapt to meet the conditions present.
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