Chapter Two

The Development of Management

Thought

Prepared By: Mequanent E. April-2021

Introduction
Modern Definition of management
 “Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working in groups, can
perform efficiently and effectively towards the attainment of group
goals”.
 it involves creating a conducive environment in organization whereby
individuals are motivated to work efficiently and effectively towards the
attainment of organizational goals.
 Management refers to the tasks and activities involved in directing an
organization or one of its units: planning, organizing, leading, and
controlling.
 The process of reaching organizational goals by working with and
through people and other organizational resources.
Thus, Management is the way to produce a large quantity or
better quality or high value, products or services with the same
input, or it may achieve a better result by changing the nature of
the input such as
• Investing in advanced technology,
• Information systems and computers
• Using an alternative source of raw material or energy.
Features of Management

 Management is goal oriented.

 Management is a continuous process.
 Management is a coordinative Force.
 Management accomplishes results through the cooperation of the others.
 Management balances effectiveness and efficiency.
Importance of Management

• Accomplishment of goals of the enterprise.

• Effective utilization of resources.

• Providing Vision and Foresight.

• Accomplishment of harmony in work place.

• Help the employees in achieving personal goals.

• Development of society and nation.

 Defining an Industry

• Industry is a group of companies offering products or services that are close

substitutes for each other
• Industry implies those economic activities which are concerned with extraction,
production, conversion, processing or fabrication of products.

Industrial Management
• Industrial management can be considered as the management of men, materials &
machines in an industrial organization.
• Industrial management, as a branch of engineering facilitates creation of
management systems and integrates the same with people and their activities to
productively utilize the resources.
• Industrial management, therefore, in the structured approach to manage the
operational activities of an organization.
Objectives of Industrial Management

 Customer Service
 Efficient Utilization of Resources.

 Coordination
 Product Quality
 Human Relations
Development of Management
in the early time management did not get adequate recognition &
attention as a subject of study or learnable set of skills, the reasons
are:
• There was low esteem /emphasis/ to business.
• The conception or treatment of management as an art, but not as
a science
• The attitude of successful Mgt is born not made i.e., we cannot
get through experience.
Since the close of the 19th century,
– Earlier stage of capitalist development,
– The emergence of industry,
– The dynamic & complex business situation had great
contribution to the development of management.
• Thus, the theory & practice of management found their way
after industrial revolution.
• There are different scholars from different disciplines
redounded/ contributed to the development of management
theories.
The school of management can be classified as:

 Classical

1. Scientific management theory

2. Classical Administrative and Organization theory
3. Bureaucratic organization theory
 Behavioral
 Quantitative
 The Classical or Traditional School

The Classical or Traditional School first focused on scientific principles of

management.

Using the principles of scientific management, traditional managers stress

the methodology of performing tasks in order to enhance worker efficiency
and productivity.
 Early Management Theorists

 Robert Owen (1771 –1858) – best be described as a social reformer.

• He credited his business success to his understanding of human nature

and to his “habit of exactness”.
• He paid particular attention to plant layout and machine maintenance,
but his overriding concern was for the workers.
• He chided/ blamed other employers for failing to improve
conditions for workers and for refusing to eliminate human
misery/ sadness.
• He tried to set minimum-age law to protect children against
the abuses of employers.
 Charles Babbage (1792 -1871)

• He developed the first mechanical calculator and formulated the

basic computer concepts that were incorporated in IBM’s first
large scale electronic computer.
• When developing his computer, he became interested in Mgt.
• Workers faced problems to perform their tasks more efficiently.
• He visited many factories to observe their operation.
• At that time, he examined manufacturing process, tools, skills and
machineries.
• Then after, he believed that a manager could study the operations
of a factory systematically and find ways to improve its efficiency.
• He was keen/strong supporter of division of labor, economies of

scale, incentive pay and profit sharing.

1. Scientific Management Theorists

• Scientific Management is a systematic and analytical study of

work which originated in the US around 1900.
• Aimed to find the most efficient method of performing any
task and to train workers in that method.
• The most important contributors of scientific management are:

• Frederic W. Taylor, Henery Gantt, Frank & Lithan Girbreth,

and Harrington Emerson.
• Among these F.W. Taylor is considered as the father of
scientific management.
Con’t…
 F.W. Taylor (1856-1915)

• Scientific Management theory arose in part from the need to

increase productivity.
• In the United States especially, skilled labor was in short
supply at the beginning of the twentieth century.
• The only way to expand productivity was to raise the efficiency
of workers.
Taylor wanted to find the most effective way to use people and
resources in the workplace.
• He believed that there was one best way of performing every process
and task in industry.
• To find that best way, workers’ performance should be examined
scientifically, objectively and in great detail, using empirical and
experimental approach.
• After finding the ‘one best way’ of performing a job, the manager
should then teach it to the workers.
• Taylor believed that incentive system rewarding fast workers and
penalizing slow workers would encourage them to adopt the new
system quicker.
 Taylor’s Scientific Principles of Management

1. Develop a science for each element of an individual’s work; this

replaces the old rule of thumb with science. /scientifically select
and then, train, teach and develop the worker.

2. Achieving co-operation of human beings rather than chaotic

individualism. Heartily cooperate with workers to ensure that
the work is being done in accordance with the new methods.
3. Working for maximum out put rather than restricted/limited.
4. Developing all workers to the fullest extent possible for their
own and their company's higher prosperity.
 Henry L. Gantt (1861 –1919)

• He developed task-and-bonus plan, which paid a bonus besides

their regular pay if they completed their assigned tasks in the time
allowed.
• Did not penalize workers who failed to complete their work with
in the allowed time. work with in the allowed time.
• The plan also provided bonuses for supervisors. Each supervisor
was given a bonus for every worker who met the standard, plus an
extra bonus if all workers did so.
• This plan was the 1st financial reward for supervisors who taught
workers proper work methods.
• He is also well known for developing a bar chart (Gantt Chart)
for planning and controlling work activities.
• This “daily balance chart” now known as the Gantt chart schedule
work on the basis of time rather than on quantities.
 Frank and Lillian Gilbreth (1868-1924 and 1878-1972)

• Lillian and Frank collaborated on fatigue and motion studies

and focused on ways of promoting motion studies and focused
on ways of promoting the individual worker's welfare.
• To them, the ultimate aim of scientific management was to help
workers reach their full potential as human beings.
• Their work led today’s job simplification, meaningful work
standards and incentive pay plans.
Techniques of Scientific Management

• Work study
• Scientific task planning.

• Scientific selection & training of workers

• Standardization
• Mental revolution
 Limitation of Scientific Management

1. It is based up on one best way, so it is applicable for simple

Organizations. Than for today’s dynamics and complex
Organizations.
2. It is focused on specialization and repetitive of jobs to increase
productivity which reduce innovation & creativity.

3. It neglect human factor b/c it motivates workers to work for

monetary benefits rather than human resource development.
4. It focuses on individual performance than effort and divides the
workers in to efficient and inefficient.
2. Classical Administrative and Organizational Theorists
• Scientific management theory was aiming at improving the
efficiency and productivity of workers, but this theory
realizing the importance of efficiency operations at all levels
of the organization.
• Focuses on the manager and basic managerial functions of
planning, organizing, controlling and leading
• Thus, this theory focus on the organization as a whole.

• Henri Fayol (1841-1925) –considered the “Father of modern

management theory” and He is the single most contributor of
this theory.
Con’t…
Classification Business Activities

H. Fayol classified business activities into six. These are:

1. Technical - activities of production and manufacturing.

2. Commercial - baying, selling or exchange.

3. Financial - searching for & optimum use of capital.
4. Security - protection of property and persons.

5. Accounting - recording and taking stock of costs, profits &

liabilities, keeping balance sheets, and compiling statistics.

6. Managerial - include planning, organizing, commanding, co-

ordinating and controlling.
Fayol considered managerial activities the least understood but
often the most crucial of the six functions.
 He said “Management is neither an exclusive privilege nor a
particular responsibility of the head or senior members of the
business; it is an activity spread, like all other activities,

between head and members of the body corporate”.

He identified five major management functions
 Planning (to foresee and provide means examining the future
and drawing up the plan of action)
 Organizing (building up the dual structure, material and human
of the undertaking)
 Commanding (maintaining activity among the personnel)

 Coordinating (binding together, unifying and harmonizing all the

activity and effort)
 Controlling (seeing that everything occurs in conformity with
established rule & expressed command)
Managerial activities require special qualities. These are:
1. Physical

2. Mental
3. Moral
4. General education

5. Specialized knowledge
6. Experience
Fayol points-out 14 principles of Mgt. and He considered principles to be flexible and
adaptable not rigid rule
1. Division of work

2. Authority & Responsibility

3. Discipline

4. Unity of Command

5. Unity of direction

6. Subordination of individuals to general interest

7. Remuneration of personnel

8. Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of tenure of personnel

13. Initiative

14. Esprit de corps

Chester I. Barnard, (1886-1961)

Called originator of the Mgt system concepts.

 Best known for his analysis of how formal and informal Orgn,
operate and his “ acceptance of theory of authority”.
 He rejected the idea that authority is inherent in an
organizational position. It depends on subordinates acceptance
of orders.
 Mary Parker Follett (1868-1933)

• Mary Parker Follett (1868-1933) bridged the gap b/n the classical
and behavioral school of Mgt.
• She stressing the importance of harmony and cooperation among
group members. She opposed the use of authority to dominate
others.
• She believed business objectives shouldn’t achieved at the
expense of the worker.
• Worker shouldn’t feel that they work for someone, instead, they
should feel that they work to satisfy some common goals.
3. Bureaucratic organization theory

 This theory is concerned with the bureaucratic organization and is

identified with a German author Max Weber. (1864-1920).
 According to him, bureaucracy is the most efficient form of
organization. The organization has a well-defined line of authority.
 It was a system characterized by division of labor, a clearly defined
hierarchy, detailed rules & regulations and impersonal relationships.

 Features of Weber's ideal bureaucracy is shown in the next

figure.
 Limitation

i. Reliance on experience:- many of the writers of classical theorists wrote

based on their experience as managers or consultants to a few firms.
ii. Untested assumptions:- the assumptions of classical theorists were not
tested scientifically.
iii. Failure to consider informal organizations:- by stressing on formal
relationship in the organizations, classical approaches tend to ignore
informal organization.

iv. Human Machinery:- The classical approaches to management theorists

considered /reduced the human side of the organization to machines to make
the organization run efficiently.
The Behavioral School
 This management theory is commonly referred to as the Neo- Classical
management theory, consists of both the human relation and behavioral science
movements.
 It is built on the basis of classical management theories. It modified, unproved and
extended the classical theory.
 It originated from industrial psychology and sociology.

Thus, behavioral mgt. theory/Human relation movement:

 Emphasizes on the interaction of people and understanding the individual as well
as group behavior in the organization.
 This theorist believed that a better understanding of human behavior at work
(motivation, conflict, expectations, etc.) improved productivity.
 It advocated the human values in an organization.
The Behavioral School management

Major contributors are

• George Elton Mayo
• Duglas McGregor
• Abraham Maslow
• Cheris Argyris
• George Elton Mayo (1880-1949) was the founder of this
approach. He was known of conducting an experiment/a research
at the “Hawtorn Plant” at the Western Electric Co. in USA.
• The primary task of these experiments was to know the effects of
physical factors such as illumination, rest periods, length of
working days, & payment schemes upon productivity.
• The general conclusion from the Hawthorne studies was that
human r/ns & the social needs of workers are crucial aspects of
business Mgt.
 Douglas McGregor (1906-1964) is proposed the two different sets of
assumptions about workers.

Theory X: assumes the average worker is lazy, dislikes work and will
do as little as possible.

•Workers have little ambition and wish to avoid responsibility

• Managers must closely supervise and control through reward and

punishment.

Theory Y: assumes workers are not lazy, want to do a good job and the
job itself will determine if the worker likes the work.

• Managers should allow workers greater latitude/ freedom and create

an organization to stimulate the workers.
Chris Argyris
• This argued that an overemphasis on control by managers encouraged
workers to become passive, dependent, subordinate and to shirk
responsibility.
• As a result, workers become frustrated and dissatisfied with the
workplace and will either quite their jobs or engage in behaviors that
hamper the achievement of organizational goals.
Abraham Maslow (1908-1970)
• He is most noted for suggesting a theory that humans were motivated by
needs that exist in a hierarchy. The most basic needs were physiological
and when satisfied, human could then be motivated to satisfy needs for
safety, love, esteem, and self actualization.
Contribution
• Advanced our understanding of management by emphasizing the
importance of the individual with in the organization – an element ignored
by writers in the classical school. That are social needs of individuals,
group processes, and subordinate – superior relations were all identified
as integral components to the practice of management.
Limitation

 They did not completely resolve issues concerning the nature of the
individual.

 The psychological and social dimensions of the individual only partially

explain organizational out comes and constitute only a part of the larger
and more complex managerial picture.
The Quantitative School
During WW II –many quantitative tools were developed to aid the military.
• Because of the success of these techniques, businesses began using them
in planning and decision making.
• QS Mgt use Mathematical Models to simulate business problems.

• Simulation lets managers thoroughly analyze existing and potential

problems and make decisions based on predictable outcomes.

Some of the more useful quantitative tools are:

 Linear Programming
 Network Analysis and
 Queuing Theory
Quantitative Techniques had benefited from the development of
computers
• Because of computer, Managers now are able to manipulate vast
amounts of data quickly and accurately.
• Managers have found computer-augmented quantitative methods
particularly useful in planning, scheduling, work assignments and
controlling inventory.
 Steps of Quantitative management approach in Decision Making

Develop
Define Input Generate Analyze Implement
Mathemati
Problem cal Model Data Solution Results Solution

Input new or
additional
data
 More Recent Theories

Three more prominent recent management theories:

1. Contingency Theory
• It is based on the premise that situations dictate managerial
action; that is, different situations call for different approaches.
• No single way of solving problems is best for all situations.

• This type of thinking challenges the concept of universality

proposed by Fayol and other classical writers who believed that
managerial principles and practice should be applied consistently
in all situations.
 Contingency theory is integrative, meshing the ideas and
concepts of the other schools of Mgt thought.
• It focuses on identifying and understanding the forces that
shape an Orgn’s environment and on applying the Mgt
approach known to work best under those conditions.
 2. Systems Theory
A manager must be able to see the interrelationship of the different
parts of his/her organization and must understand how the
organization fits into its larger environment.
• Today’s Orgns are generally considered open systems; that is
affected by environmental forces.
• A manager must be aware of those forces and must adapt the Orgn
to them.
• By viewing a firm as a single unit and as part of a larger system,
Managers will have better perspective when it comes to planning,
organizing, staffing, leading and controlling.
3. Theory Z

Considering workers as a key to increase productivity and

economic growth.

• On this, some workers have the security of employment without

the threat of being fired or laid off until retirement.

• Workers are trained to perform a variety of tasks and are rotated

from job to job to reduce excessive boredom.