CH 02

2
Management
and Its
Evolution
Learning Outcomes
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 perspectives
(management science and operations management)
 Discuss the systems and contingency approaches
 Explain total quality management
 Describe the challenges of management
Principles of Management (Third Edition) All Rights Reserved

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Introduction
 Prominent pioneers in management studies

(Frederick Winslow Taylor, Frank and Lillian
Gilbreth, Max Webber, Henry Fayol, Elton Mayo,
Mary Parker Follet) continue to influence current
research in management and current practices.
 Earlier researches help future managers or business
owners to manage the organizations effectively.
 Organizations are shaped by management theories
which have evolved due to the different type of
challenges and opportunities faced.

Why Study Management
Theories?
 Economic influences
– The distribution of resources, their availability and
their production within a society.
– Can be divided into human resources (e.g. labour
resources) and non-human resources (e.g. land, raw
materials, financial resources and technology).
 Social influences
– The influence of culture in interpersonal relationships.
– For example, lifestyle, age and gender distribution,
education level.

Theories? (cont.)
 Political influences—The pressure from political
institutions on individuals and organizations (e.g.
developed rules, policies and procedures)
 Technological influences—The emergence of new
technologies and advancement in devices (e.g. new
tools, software) affect how businesses operate.
 Global influences—The blending of economic,
social, political, legal and technological influences
that affect operations of organizations.

Theories? (cont.)
 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.

Role of the Industrial
Revolution and Evolution of
Management Theories
 The Industrial Revolution period (1760–1850) earmarked the
development of major perspectives to management.
 It was a fundamental change in the way goods were produced,
from using human labour to using machines.
 Four major changes in England include:
– The introduction of new technology (i.e. machines invention,
‘Flying Shuttle’ and ‘Spinning Jenny’ to name a few)
– The use of metals, minerals and energy
– The concentration of workers and factories (rural and urban
migration, mass production of goods)
– The new methods of transportation (ships made of steel,
automobiles)

Classical Management
Perspectives
 The classical management theory was one of the
first management perspectives, developed during
the Industrial Revolution period.
 One of the problems was how to mass produce
products. The foundation to this perspective was a
belief that men at work acted in a rational manner
and mainly were driven by economic concerns.
 This perspective was developed to seek the best
way of performing and managing tasks to achieve
high monetary and personal gains.
Perspectives (cont.)
 The chronological
development
of management
theories

 Classical perspectives of management theories

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

Scientific Management
 Scientific management views assume that people
are primarily motivated by economic gains. Focus
is placed on an individual’s or worker’s productivity.
 Its main objective is to improve economic
efficiency, especially labour productivity.
 The pioneer of scientific management views was
Frederick Winslow Taylor (1856–1915), who was
also known as the ‘father of scientific
management’.

Taylor’s work
 Taylor focused on three areas:

Task performance
Time and motion studies were done on the tasks
performed by workers to find the best means to speed
up production, to establish standardization in work and
to increase efficiency.
The studies were used to develop standard working
procedures and tasks were coded for workers to
observe, follow and implement.

Taylor’s work (cont.)
 Work based on scientific management perspectives

have now become the foundation of today’s
management practices, which are:
• Development of work standards
• Proper selection of workers
• Training of workers
• Support for workers

Supervision
Taylor believed that workers must be well-supervised and
managers must provide detailed instructions to workers to
enable them to do work in a scientific manner.
His study revealed that a supervisor could not possibly be
an expert at all tasks, so a first-level supervisor should be
put in charge of managing workers who perform a common
function which is familiar to that supervisor.
Following this, standard operating procedures were
introduced to become guidelines for other managers as
well as employees to perform better work, and thus, work
became efficient.
Motivation
Taylor 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.

The Gilbreths
 Husband and wife team, inspired by Taylor’s time

studies, and 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.

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).

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.

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.

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.

Management by Henri Fayol (cont.)
 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

 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.
 Initiative. One of the greatest satisfactions is formulating
and executing a plan.
 Esprit de corps. Harmonious effort among individuals is
key to organizational success.

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.

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.

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.

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.

Hawthorne Studies
Series of studies conducted to study human

behaviour:
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.

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.

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.

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 organization
should undergo an exit interview to keep
turnover at a minimum.

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.

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.

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
Quantitative Management
– 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

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)

Contingency Approach
 The contingency approach (situational perspectives)

can be summed up as an “it all depends” approach.
There is 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.

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
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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2

After studying this chapter, you should be able to:

Principles of Management (Third Edition) All Rights Reserved

 Prominent pioneers in management studies

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

 Classical perspectives of management theories

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

 Taylor focused on three areas:

Principles of Management (Third Edition) All Rights Reserved

 Work based on scientific management perspectives

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

 Husband and wife team, inspired by Taylor’s time

Principles of Management (Third Edition) All Rights Reserved

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

Principles of Management (Third Edition) All Rights Reserved

 The emphasis on enhanced productivity, and by

Principles of Management (Third Edition) All Rights Reserved

 A theory focused on basic management functions

Principles of Management (Third Edition) All Rights Reserved

 Work division. Specialization of labour is necessary for

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

 It was more suited for uncomplicated and stable

Principles of Management (Third Edition) All Rights Reserved

 Max Webber was recognized as the creator of

Principles of Management (Third Edition) All Rights Reserved

 The rigidity of bureaucratic management no longer

Principles of Management (Third Edition) All Rights Reserved

 Focus on the importance of human behaviour in

Principles of Management (Third Edition) All Rights Reserved

Series of studies conducted to study human

Principles of Management (Third Edition) All Rights Reserved

 The Bank Wiring Room Study:

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

 Workers should be asked periodically how

Principles of Management (Third Edition) All Rights Reserved

 The need for recognition, security and a sense

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

– Management Information System

Principles of Management (Third Edition) All Rights Reserved

 An approach which views an organization as “the

Principles of Management (Third Edition) All Rights Reserved

 The contingency approach (situational perspectives)

Principles of Management (Third Edition) All Rights Reserved

Principles of Management (Third Edition) All Rights Reserved

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