Historical Background of Management

• Ancient Management
 Egypt (pyramids)
 China (Great Wall)

• Adam Smith
 Published “The Wealth of Nations” in 1776
 Advocated the division of labor (job specialization) to
increase the productivity of workers

• Industrial Revolution
 Substituted machine power for human labor
 Created large organizations in need of management

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 Major Approaches to Management
• (i) Scientific Management
• 1. CLASSICAL APPROACH (ii) General Administrative Theory

2. QUANTITATIVE APPROACH

3. BEHAVIORAL APPROACH

• (i) Systems Theory

4. CONTEMPORARY APPROACH
• (ii) The Contingency Approach

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1. Classical approach – (i) Scientific Management

• Fredrick Winslow Taylor

 The “father” of scientific management
 Published Principles of Scientific Management (1911)
 The theory of scientific management:
– Using scientific methods to define the “one best way” for a
job to be done
• Putting the right person on the job with the correct tools
and equipment
• Having a standardized method of doing the job
• Providing an economic incentive to the worker

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 Scientific Management (cont’d)
• Frank and Lillian Gilbreth
 Focused on increasing worker productivity through
the reduction of wasted motion
 Developed the microchronometer to time worker
motions and optimize performance.

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 (ii) General Administrative Theorists
• Henri Fayol
 Believed that the practice of management was distinct from other
organizational functions
 Developed fourteen principles of management that applied to all
organizational situations

• Max Weber- German sociologist

• Developed a theory of authority structures and relations based on an ideal
type of organization (bureaucracy)
• Bureaucracy—a form of organization characterized by division of labor, a
clearly defined hierarchy, detailed rules and regulations, and impersonal
relationships.
•
 Fayol’s 14 Principles

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 2. Quantitative Approach to
Management
• Quantitative Approach
 Also called operations research or management science
 Evolved from mathematical and statistical methods
developed to solve WWII military logistics and quality
control problems
 Focuses on improving managerial decision making by
applying:
 Statistics, optimization models, information models, and
computer simulations
 The quantitative approach has contributed directly to
management decision making in the areas of planning and
control.

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• Quality Management
• A quality revolution swept through both the business and public sectors
during the 1980s and 1990s.

• The generic term used to describe this revolution was total quality
management, or TQM for short.

• Inspired by the total quality management (TQM) ideas of Deming and Juran.

• TQM: A philosophy of management driven by continual improvement in the

quality of work processes and responding to customer needs and
expectations

•
•

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• Quality Management (contd..)

 Continual improvement isn’t possible without accurate

measurements, which require statistical techniques that measure
every critical variable in the organization’s work processes.

 Customers include both internal and external, including employees,

suppliers and consumers

 TQM is different from earlier management approaches which believed

keeping costs low was the only way to increase productivity and thus
compromising on quality.
•
 The Japanese demonstrated that it was possible for the highest-quality
manufacturers to be among the lowest-cost producers. Quality is not
directly related to cost.
 3. Behavioral approach
• Organizational Behavior (OB)
• The study of the actions of people at work; people are the most
important asset of an organization.

• Much of what currently makes up the field of human resources

management and contemporary views on motivation, leadership, trust,
teamwork, and conflict management have come out of organizational
behavior research.
•
• Early OB Advocates
 Robert Owen
 Hugo Munsterberg
 Mary Parker Follett
 Chester Barnard

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 The Hawthorne Studies
• A series of productivity experiments conducted at Western Electric from
1927 to 1932.
• Experimental findings
 Productivity unexpectedly increased under imposed adverse working
conditions.
 The effect of incentive plans was less than expected.

• Research conclusion
 The preliminary findings were that behavior is not merely physiological
but also psychological.

 Group factors significantly affect individual behavior, group standards

establish individual worker output, and that money is less a factor in
determining output than are group standards and group attitudes.

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 4. Contemporary approach – (i) The Systems Approach

• System Defined
 A set of interrelated and interdependent parts
arranged in a manner that produces a unified whole.
• Basic Types of Systems
 Closed systems
 Are not influenced by and do not interact with their
environment (all system input and output is internal)
 Open systems
 Dynamically interact to their environments by taking in
inputs and transforming them into outputs that are
distributed into their environments

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 Implications of the Systems Approach
• Coordination of the organization’s parts is
essential for proper functioning of the entire
organization.
• Decisions and actions taken in one area of the
organization will have an effect in other areas of
the organization.
• Organizations are not self-contained and,
therefore, must adapt to changes in their
external environment.

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 (ii) The Contingency Approach
• Contingency Approach Defined
 Also sometimes called the situational approach.
 There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
 Organizations are individually different, face different
situations (contingency variables), and require
different ways of managing.

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