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 CHAPTER 2

MANAGEMENT AND ITS

EVOLUTION
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 LEARNING OBJECTIVES

After studying this chapter, you should be able to:

 Define theory and evolution.
 Describe the classical management perspective
(scientific, administrative and bureaucratic).
 Describe the behavioural management perspective.
 Describe the quantitative management perspective
(management science and operations management).
 Discuss the Systems and Contingency Approaches.
 Explain Total Quality Management.
 Describe the challenges of management.
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 2.1 INTRODUCTION

Environmental factors, for example economic, social,

political, technological and global influences, have
affected and changed management thoughts along the
way.
 Economic influences
– The distribution of resources, their availability and
their production within a society.
 Social influences
– The influence of culture in interpersonal relationships.

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 2.1 INTRODUCTION (cont.)

 Political influences
– The pressure from political institutions on individuals and
organizations.
 Technological influences
– The emergence of new technologies and advancement in
devices relied on by people in businesses.
 Global influences
– The changes and pressure to improve the quality of goods
and services, while reducing costs.

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 2.2 WHY STUDY MANAGEMENT
THEORIES?

 Theories provide a stable focus for comprehending

what we experience.
 Theories also provide criteria for determining what is
relevant.
 Theories provide the means to communicate
efficiently, and thus allows us to move into more
complex relationships with other people.
 Theories challenge us to keep learning about our
world.

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 2.3 EVOLUTION OF
MANAGEMENT THEORIES

 The chronological developments

of management theories

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 2.4 CLASSICAL MANAGEMENT
PERSPECTIVES

 Classical perspectives of management theories

consist of the following:
1. Scientific Management
2. Administrative Management
3. Bureaucratic Management

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 2.4.1 Scientific Management

 Scientific management views assumed that people

are primarily motivated by economic gains. Focus
is placed on an individual’s or worker’s
productivity.
 The pioneer of scientific management views was
Frederick Winslow Taylor (1856–1915), who was
also known as the ‘father’ of Scientific
Management.

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 Taylor’s work

 Taylor focused on three areas:

– Task performance
• Development of work standards
• Proper selection of workers
• Training of workers
• Support for workers
– Supervision
• supervisor could not possibly be an expert at all tasks. A
first-level supervisor should be put in charge of managing
workers who perform a common function which is familiar to
that supervisor.
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 Taylor’s work (cont.)

– Motivation
• Believed that money motivated workers. Thus he
pioneered the ‘differential piece rate system’ whereby
workers are compensated based on their work or output.
The more productive they were or the more output they
produced, the more compensation they would receive.

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 The Gilbreths’

 Husband and wife team, was inspired by Taylor’s

time studies, and was motivated by a desire to
expand human potentials.
 Frank Gilbreth (1868–1924) specialized in time and
motion studies to determine the most efficient way to
perform tasks in the least amount of time.
 Lillian Moller Gilbreth (1878–1972) pioneered better
working conditions by improving efficiency and
productivity.

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 Lillian Gilbreth’s Work

 Better working conditions for workers (e.g. lunch

breaks and rest periods for workers were
introduced).
 Improved efficiency and productivity of
workers (e.g. abolishment of hazardous working
conditions and child labour).

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 Limitations of the Scientific
Management Theory

 The emphasis on enhanced productivity, and by

extension profitability, led to some managers
exploiting both workers and customers. As a result,
more workers joined unions, thus reinforcing a
pattern of suspicion and mistrust that changed
labour management relations for decades.

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 2.4.2 Administrative Management

 A theory focused on basic management functions

and the manager’s tasks within an organization.
 Regarded management as a profession that could
be taught to people.
 Henri Fayol, summarized his management
experiences and identified the five functions and 14
principles of management.

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 General Principles of Management
By Henri Fayol

 Work division. Specialization of labour is necessary for

organizational success.
 Authority. The right to give orders must be accompanied
by responsibility.
 Discipline. Obedience and respect help to ease the
operation of an organization.
 Unity of command. Each employee should receive orders
from only one superior.
 Unity of direction. All organization members should
coordinate and focus their efforts in the same direction.

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 General Principles of Management
By Henri Fayol

 Subordination of individual interests to the general

interest. Management’s biggest challenge is resolving
the conflict between personal and organizational
interests in favour of an organization.
 Remuneration. Employees should be fairly paid based
on contribution.
 Centralization. The relationship between centralization
and decentralization is a matter of proportion; an
optimum balance for each organization is crucial

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 General Principles of Management
By Henri Fayol

 Scalar chain. Subordinates should adhere to an official

chain of command, unless their respective superiors
expressly authorize them to communicate with each other.
 Order. Both material things and people should be in their
proper places.
 Equity. Fairness owing to kindness and justice will
generate dutiful and loyal service.
 Stability and tenure of personnel. Employees require time
to learn their jobs.

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 General Principles of Management
By Henri Fayol

 Initiative. One of the greatest satisfactions is formulating

and executing a plan.
 Esprit de corps. Harmonious effort among individuals is
key to organizational success.

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 Limitations of the Administrative
Management Theory

 It was more suited for uncomplicated and stable

organizations that operated in stable environments.
 The workers’ social needs were often neglected
which gave way to other management experts to
develop theories which focused more on addressing
these needs.

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 2.4.3 Bureaucratic Management

 Max Webber was recognized as the creator of

bureaucratic management.
 A theory that emphasized on organizational rules,
management hierarchies, a clear division of labour,
and detailed rules and procedures.
 Focused on ways to eradicate managerial
inconsistencies resulting from abuse of power which
contributed to ineffectiveness.

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 Limitations of the Bureaucratic
Management Theory

 The rigidity of bureaucratic management no longer

suited organizations that were constantly facing new
challenges.
 Organizations could not afford to continue using a
system that had narrowly defined job descriptions,
which hindered creativity.
 Regarded as organizations with too much
paperwork, routine tasks and red tapes.

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 2.5 BEHAVIOURAL MANAGEMENT
PERSPECTIVES

 Focus on the importance of human behaviour in

shaping management styles.
 Behavioural theorists believed that employees do
not respond rationally to rules, chains of authority
and economic incentives alone, but must be guided
by social needs, drives and attitudes.

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 2.5.1 Hawthorne Studies

Series of studies conducted to study human

behavior:
The Illumination Experiments:
– Objective: Elton Mayo and his assistants wanted to
determine how the level of lighting or illumination on
the factory floor would affect productivity.
The Relay Assembly Room Study:
– Objective: Mayo and his assistants wanted to
determine whether a change in work environment
would impact productivity.

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 2.5.1 Hawthorne Studies (cont.)

 The Bank Wiring Room Study:

– Objective: Mayo and his assistants were specifically
interested in learning more about social natures of
work groups.

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 Some Basic Ideas of Mayoism

 The Mayo formula is humanistic supervision plus

morale equals productivity
 Work is a group activity.
 Humour and sarcasm are good in the workplace—it
is all part of group dynamics.
 Managers should try not to micro-manage—there
should not be any overriding concern for production.
 Supervisors should act more like friends or
counsellors to their workers, instead of superiors.
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 Some Basic Ideas of Mayoism
(cont.)

 Workers should be asked periodically how they

feel about their work and superiors.
 Workers should be consulted prior to making
any changes, and participate in change
decisions.
 Workers who resign from an organisation
should undergo an exit-interview to keep
turnover at a minimum.

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 Some Basic Ideas of Mayoism
(cont.)

 The need for recognition, security and a sense

of belonging is more important in determining
workers’ morale and productivity compared to
physical conditions under which the workers
work in.
 Informal groups in the workplace use strong
social controls over the work habits and attitudes
of individual workers.

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 Limitations of the Mayoism Theory

 Human behaviour is complex.

 Happy and satisfied workers were not necessarily
productive.
 Economic issues did influence or affect workers’
productivity.
 Work that was dull or boring was still a problem even with
a friendly superior—motivation continued to be a
challenge.
 Workers were able to differentiate genuine from non-
genuine interest that superiors showed in them.
 Not every worker wanted a challenging job.
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 2.6 QUANTITATIVE MANAGEMENT
PERSPECTIVES
 Uses quantitative techniques—statistics, information
models and computer simulations—to improve
decision making
– Management Science
• encouraged managers to utilize mathematical tools,
statistics and other quantitative techniques to make
management decisions
– Operations Management
• focused on the design, operation and control of
transformation processes that converted resources
(labour and raw materials) into goods and/or services
which were sold to customers
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 2.6 QUANTITATIVE MANAGEMENT
PERSPECTIVES (cont.)

– Management Information System

• organizes past, present and projected data from both
internal and external sources, and then processes it
into usable information before making it available to
managers at all organizational levels

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 2.7 SYSTEMS APPROACH

 An approach which views an organization as “the

big picture” and considers external environment
influences as important.
 The two types of environmental interactions are:
– Open-system (organizations must interact with the
external environment to survive)
– Closed-system (organizations do not interact with the
environment)

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 2.8 CONTINGENCY APPROACH

 The Contingency Approach or the Situational

Perspectives can be summed up as an “it all depends”
approach.
 No one best way to manage.
 Situations will determine the appropriate management
actions and approaches to take.
 Managers must be flexible in taking actions and when
making decisions.
 Its aim is to find an approach that best fits the situation.
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 2.9 TOTAL QUALITY
MANAGEMENT

 Aims to improve performance by focusing on

customers, while addressing the needs of all
stakeholders.
 Components of TQM include:
– Employee involvement
– Customer focus
– Benchmarking
– Continuous improvement
– Employees working in teams
– Development of openness and trust
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 2.10 CHALLENGES OF
MANAGEMENT

Modern management approaches face challenges

in the following forms:
 Globalization
 Evolving technologies and products
 Dynamic and unpredictable environments
 Changing human relations
 Major shifts in ways of thinking and managing situations
 Learning how to be flexible and adaptable
 Workplace diversity
 International competition
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