CHAPTER 2: HISTORY OF

MANAGEMENT THOUGHT
William G. “Bill” Borges

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 Learning Outcomes
• 2.1 Understand management as a science and as an art.
• 2.2 Describe the three classical viewpoints of management: scientific
management, administrative management, and bureaucratic
management.
• 2.3 Explain the behavioral science perspective of management.
• 2.4 Describe the quantitative perspective of management.
• 2.5 Discuss the two contemporary views of management: systems
view and contingency view.
• 2.6 Describe the challenges in contemporary management.

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 Management: A Science Or An Art?
• Believes in specific best practices for
Management management
is a Science • Uses objective, universal solutions to problems
based on fact and evidence
• Believes in importance of social and political
Management contexts of managerial issues
is an Art • Uses managers’ knowledge and experience to
solve problems
Good management is a balance of both science and art! Science establishes general
principles that guide organizations, while the art of human skill puts those principles to
their best use.
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 Classical Management
• The oldest formal school of management thought.
• Discusses methods to make organizations more efficient.

I. Scientific Management
• Focuses on maximizing worker productivity.
• Taylor’s Principles of Scientific Management:
 Separation of planning and doing
 Functional foremanship
 Elements of scientific management – Scientific methods, Standardization, and Centralization
 Bilateral mental revolution
 Financial incentives
 Economy

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 Classical Management (Cont’d)
I. Scientific Management (Cont’d)

• Harrington Emerson’s 12 Principles of Efficiency:

 Clearly defined ideals
 Sound judgment and common sense
 Competent counsel
 Discipline
 Fairness in deals
 Reliable and accurate records
 Planning and dispatching
 Standards and schedules
 Standardized conditions
 Standardized operations
 Written standard-practice instructions
 Efficiency rewards

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 Classical Management (Cont’d)
II. Administrative Management
• Concerns the management of the whole organization instead of individual employees.

• Henri Fayol’s 14 Principles of Management:

 Division of work  Centralization
 Authority and responsibility  Scalar chair
 Discipline  Order
 Unity of command  Equity
 Unity of direction  Stability of tenure of personnel
 Subordination of individual interest to general interest  Initiative
 Remuneration of personnel  Esprit de corps

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 Classical Management (Cont’d)
III. Bureaucratic Management
• Concerns the ideal structure of organizations.

• Max Weber’s elements of an ideal bureaucracy:

 A formal set of rules and procedures
 A clear chain of command
 Division of labor according to expertise
 Selection and promotion of individuals based on ability and merit
 Professionalism among managers

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 Behavioral Management
• Emphasizes the significance of individual personalities and behaviors
in determining behavioral outcomes in the working environment.

• Posits that a superior understanding of human behavior such as

motivation, expectation, or conflict would enhance productivity in the
workplace.

• Is concerned with the social and mental facets of human behavior in

organizations.

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 Behavioral Management (Cont’d)
I. Mayo’s Hawthorne Studies
• Revealed that workers’ productivity depends intensely upon their satisfaction
with their working environment.
• Mayo proposed the following arguments about management as a result of the
Hawthorne experiments:
 Social system
 Social environment
 Informal organization
 Group dynamics
 Informal leader
 Non-economic reward

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 Behavioral Management (Cont’d)
II. Human Relations Movement
• Workers essentially react to the social context of their work environment.
• Managers’ concern for employees prompts higher satisfaction, which then leads to enhanced
performance.

• Maslow’s Hierarchy of Needs

• People are motivated by a hierarchical set of needs, and will satisfy lower level needs before
attempting to satisfy higher level ones.
• These needs are (from low to high):

Self-
Physiological Safety Social Ego/Esteem
Actualization

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 Behavioral Management (Cont’d)
II. Human Relations Movement (Cont’d)

• McGregor’s Theory X and Theory Y

• Theory X and Theory Y reflect two belief sets that managers hold about their employees.
• Managers should change their attitude about Theory X and encourage workers with Theory Y
assumptions in mind to improve performance.
Theory X assumes that an employee… Theory Y assumes that an employee…
Dislikes work and endeavors to avoid it Perceives work to be as natural as rest and play
Has no aspiration and wants no responsibility Seeks and accepts responsibility
Does not concern himself with company goals Is motivated to meet his company goals
Opposes change Can be creative in solving organizational issues
Is naïve and not very smart Is intelligent and has potential

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 Behavioral Management (Cont’d)
II. Human Relations Movement (Cont’d)
• Ouchi’s Theory Z
• Theory Z is grounded in a mix of Japanese and American management
theories.
• It recommends that organizations uphold the following factors in
management:
 Job stability to elicit employees’ commitment and loyalty.
 Job rotation to build employees’ cross-sectional skills.
 Involvement of employees in decision making.
 Care and interest in the development of employees and in the welfare of employees’ families.

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 Quantitative Management
• Focused on applying quantitative methods, such as statistics,
computer simulations, and information models, to management.

I. Management Science
• This perspective urges managers to use mathematical models, arithmetic,
statistics, and other quantitative methods to take administrative decisions.
• Examples of management science applications in use today are forecasting,
stock modeling, queuing theory, and computer simulations.

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 Quantitative Management (Cont’d)
II. Operations Management
• This is an applied science that is less measurable than management science.
• It concentrates on the transformation of raw materials, work, and money into valuable
merchandise and/or services.
• Examples include inventory management, quality control, and break-even analysis.

III. Management Information Systems

• Management information systems sort out information from both inner and outer sources
and analyze it to form usable data for managers.
• With this, managers can recognize and assess decision options, predict the outcomes of
these options, and consequently select the best option.

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 Contemporary Management Perspectives
I. Systems View
• The most acceptable approach in modern management.

• This view sees organizations as an integrated system of combined parts.

• The primary idea of the system approach is the holistic perspective when facing an
issue - no part of the system can be evaluated without taking the entire system into
account, and no system can be considered without comprehending each of its
individual parts.

• There four fundamental components in a system: inputs, transformation processes,

outputs, and feedback.

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Contemporary Management Perspectives (Cont’d)
I. Systems View (Cont’d)

• Open systems communicate with their environment, whereas closed systems

do not.

• Subsystems are systems within a larger system, and can affect other
subsystems.

• Synergy posits that subsystems are more effective when they work together.

• Entropy is a natural process that results in the decline of a system.

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Contemporary Management Perspectives (Cont’d)
II. Contingency View
• General theories cannot be practiced in organizations as each organization is distinct
from another.

• There is no ideal approach to handle all situations.

• Suitable managerial action in a situation relies on the unique details of that situation.

• The major determinants of a contingency are based on the internal and external
factors surrounding an organization.

• It is the managers’ task to ascertain the strategy or decision that best contributes to
management objectives under a particular situation.

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 Contemporary Management Challenges
Globalization

Generational Differences

Ethics & Social Responsibility

Learning Organizations

Organizational Change

Technology

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