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The

Evolution of
Management
Theory

The Evolution of Management


Theory
The Evolution of Management can be divided into 3
parts:
1. Early Classical Approaches: Scientific
Management ,Administrative management ,and
Bureaucracy.
2. Neo- classical Approaches: Human Relations
Management and Behavioral Management.
3. Modern Approaches: Management approaches,
system approaches and contingency approaches

Evolution of Management Theory


Org. Environment

Management Science

Behavioral Management

Administrative Management
Scientific Management
1890

1940

2000

Scientific Management Theory


The term Scientific management was
coined by Louis Brandies(1910)
It was Frederick W. Taylor who used the term
to give a complete and systematic
explanation of scientific methods and
techniques for promoting the organizational
efficiency and economy. Hence, he came to
be known as the Father of Scientific
Management.

1.
2.
3.
4.

Scientific management is also known as


Taylorism.
Books by Taylor:
A Piece Rate System (1895)
Shop Management (1903)
Art of cutting Metals(1906)
Principles of Scientific Management(1911)

Other Scientific management thinkers were


Frank and Lillian Gilbreth, Henry Gantt etc.

Taylor's Contribution
Taylor based his theory of Scientific
management based on three assumptions:
1. The organizational functioning can be
improved with the application of scientific
methods.
2. A good worker is one who does not initiate
action, but accepts the order of the
management.
3. Every worker is an economic man', that is,
he is motivated by monetary factors.

Principles of Scientific Management


1.

2.
3.

4.

Develop a science for each element of a mans


work, which replaces the old rule-of-thumb method.
By this one best way of doing a thing can be
decided and the standard output can be determined.
Scientifically select and then train ,teach and
develop workmen
Management should fully cooperate with workers,
so as to ensure that the work is done in accordance
with the scientific principles developed for this
purpose.
There must be equal division of work and
responsibility between management and workmen .

Techniques
1.
2.
3.
4.
5.

Functional Foremanship
Motion study
Time study
Differential piece rate plan
Exception Principle

Taylors Followers
Henry L. Gantt:
Gantt Chart: He designed a chart on which
progress of work could be plotted continuously
against time. It serves as a planning and
controlling device.
Habits of Industry
Minimum wage based incentive system.

A GANTT chart is a type of bar chart


that illustrates a project schedule.
GANTT charts have become a
common technique for representing
the phases and activities of a project
work breakdown structure.
It was introduced by Henry Gantt
around 1910 1915.

Frank and Lillian Gilbreth


They laid the foundation of modern motion and
time study techniques. They invented
Therbligs,as the elemental units of work.
They invented the Flow Process chart to help
in the elimination of unnecessary steps in an
operation. Hence, their system was called as
speed work.

Criticism of Scientific Management Theory

Administrative Management

The major exponents of this theory are Henry


Fayol, Luther Gulick , Lyndall Urwick , Mary
Follet and many more.
This theory reached its zenith in 1937 when the
Papers on the Science of administration, by
Gulick and Urwick was Published.

Fayols Principles
Henri Fayol, developed a set of 14 principles:
1. Division of Labor: allows for job specialization.
Fayol noted firms can have too much specialization
leading to poor quality and worker involvement.
2. Authority and Responsibility: Fayol included both
formal and informal authority resulting from special
expertise.
3. Unity of Command: Employees should have only one
boss.
4. Line of Authority: a clear chain from top to bottom of the
firm.
5. Centralization: the degree to which authority rests at the
very top.

Fayols Principles
6. Unity of Direction: One plan of action to
guide the organization.
7. Equity: Treat all employees fairly in justice
and respect.
8. Order: Each employee is put where they
have the most value.
9. Initiative: Encourage innovation.
10. Discipline: obedient, applied, respectful
employees needed.

Fayols Principles
11. Remuneration of Personnel: The payment
system contributes to success.
12. Stability of Tenure: Long-term employment
is important.
13. General interest over individual interest:
The organization takes precedence over the
individual.
14. Esprit de corps: Share enthusiasm or
devotion to the organization.

Bureaucratic Management

Administrative Management
Seeks to create an organization that leads to
both efficiency and effectiveness.
Max Weber developed the concept of
bureaucracy.

A formal system of organization and


administration to ensure effectiveness and
efficiency.

Bureaucratic Principles
Written rules

System of task
relationships

A Bureaucracy
should have

Fair evaluation
and reward

Hierarchy of
authority

Key points of Bureaucracy


Authority is the power to hold people
accountable for their actions.
Positions in the firm should be held based on
performance not social contacts.
Position duties are clearly identified. People
should know what is expected of them.
Lines of authority should be clearly identified.
Workers know who reports to who.
Rules, Standard Operating Procedures
(SOPs), & Norms used to determine how the
firm operates.
Sometimes, these lead to red-tape and
other problems.

Behavioral Management

The Human Relations Movement

The Hawthorne studies ( 1924-1932)


formed the basis for the rise of Human
Relations theory. These theories shook the
foundations of classical approach, that is,
the concept of economic man and the role
of structure of formal organization.
These studies were conducted in the
Western Electric company at Hawthorne
( near Chicago- USA) by HBS under the
guidance of Prof. Elton Mayo.

Contd..
The studies were conducted in the following
four stages:
1. Illumination Experiment(1924-27)
2. Relay Assembly test room
experiment( 1927)
3. Mass Interviewing Programme(1928-31)
4. Bank Wiring Experiment(1931-32)

Management Science

Management Science
Uses rigorous quantitative techniques to
maximize resources.
Quantitative management: utilizes linear
programming, modeling, simulation systems.
Operations management: techniques to
analyze all aspects of the production system.
Total Quality Management (TQM): focuses on
improved quality.
Management Information Systems (MIS):
provides information about the organization.

Organization-Environment Theory
Considers relationships inside and outside the
organization.
The environment consists of forces, conditions,
and influences outside the organization.
Systems theory considers the impact of
stages:
Input: acquire external resources.
Conversion: inputs are processed into goods
and services.
Output: finished goods are released into the
environment.

Systems Considerations
An open system interacts with the
environment. A closed system is selfcontained.
Closed systems often undergo entropy and
lose the ability to control itself, and fails.
Synergy: performance gains of the whole
surpass the components.
Synergy is only possible in a coordinated
system.

The Organization as an
Figure 2.4
Open System
Input Stage

Conversion
Stage

Output
Stage

Raw
Materials

Machines

Goods
Services

Human skills

Sales of outputs
Firm can then buy inputs

Contingency Theory
Assumes there is no one best way to
manage.
The environment impacts the
organization and managers must be
flexible to react to environmental
changes.
The way the organization is designed,
control systems selected, depend on the
environment.
Technological environments change
rapidly, so must managers.