Evolution of

management theory

Chapter 2
Smit/Cronje/Brevis/Vrba
 Learning Outcomes

• Study Guide
Different Management
Theories

International

Technological Ecological

Theoretical
knowledge

Economic Social

Political
 Classical
Approaches/Contemporary

• Scientific management 1800-1900

• Bureaucracy 1910
• Administrative management 1920
• Human relations 1930
• Quantitative management 1945
• Systems theory 1955
• Contingency theory 1970
• Total quality management 1988
• Learning organization 1995
• Re-engineering 2000
 Scientific Approach

• Frederick Taylor:
In this approach, workers were treated as
money-making machines, and they were
paid according to the number of units they
produced.
• Gary Hamel:
He introduced three fundamental things he
taught:
– Find the best practice wherever it exists.
– Decompose the task into its essential
elements.
– Get rid of things that don’t add value.
• Frank and Lillian Gilbreth:
– Focused on work simplification as an answer to
the productivity question.
– He was a bricklayer himself and studied the
movements of bricklayers and determined that
their body movements could be combined or
eliminated.
– He changed 18 step process into a five-step
process and increased productivity by about
200%.
• Henry L Gantt’s:
– His main concern was productivity at the shop
floor level. His significant contribution to
scientific management is a chart showing the
relationship between work planned and
completed on one axis and time elapsed on the
other.
– Using scientific methods to determine the most
efficient way to do things.
 Bureaucratic approach

• Max Weber:
– A German sociologist was the more
fundamental issue of how organisations are
structured. Reasoning that any goal-oriented
organisation comprising thousands of
individuals would require the carefully
controlled regulation of its activities, he
developed a theory of bureaucratic
management that stressed the need for a
strictly defined hierarchy governed by clearly
defined rules and authority.
 Process or Admin Approach
• Henri Fayol (Greatest European
Management Pioneer:
– He described the practice of management as
distinct from fiancé, production, marketing, and
other functions. He argued that management
was a generic activity in business and the
home.
– Fayol’s experience led him to conclude that
there were five primary functions of an admin:
planning, organising, commanding,
coordinating and controlling.
– Planning for the formulation of goals,
– Organising focused on effectively coordinating
resources to attain the set goals.
– Commanding was the art of leading people.
– Coordinating the activities of groups to provide
unity of action ensured a smoothly functioning
organisation.
– Controlling involved seeing that everything was
done according to the set plans and that stated
goals were attained.
– Fayol formulated guidelines for managers to
follow. These guidelines form 14 principles
for effective management.

– The notion that managers are born, not

made, is not genuinely seen against the
principles of management that Fayol
identified. According to Fayol, management
is a skill that one can learn once its
underlying principles are understood.
• Fayol’s 14 principles:
– Division of labour,
– Authority and responsibility,
– Discipline,
– Unity of command,
– Unity of direction,
– Subordination of individual interest to the
common good,
– Remuneration,
– Centralisation,
– Hierarchy,
– Order,
– Equity,
– Stability,
– Initiative,
– Team spirit.
 Human Relations Movement
• After 1930(great depression), managing
people became the central issue facing
managers, and managers became more
oriented toward human relations and
behavioural science.
• Western Electric Company’s Hawthorne
Works in Chicago, Illinois, from 1924 to
1933.
• Hawthorne Studies:
– Relationship between the level of lighting in the
workplace and worker productivity.
– Lighting improved, and so did productivity.
– Surprisingly, as lighting conditions were made
worse, productivity still tended to improve.
– It was apparent that something besides lighting
influenced the worker’s productivity.
– Mayo said: that concern for workers’ well-being
and sympathetic supervision enhanced the
workers’ performance.
• Maslow and McGregor:
– Maslow: Humans function on five levels of needs.
– McGregor: distinguished two alternative basic
assumptions about people and their approaches
to work.
– Theory X: managers assume that workers must
be constantly coaxed into putting effort into their
jobs; that work is distasteful to workers, who must
be motivated by force, money or praise.
– Theory Y: managers, on the other hand, assume
that people relish work and approach their work as
an opportunity to develop their talents.
• The HR approach's significant contribution
to management was that this approach
viewed workers as human beings and not
as machines.
• Both the HR approach to management and
the behavioural science perspective have
limitations. The belief that a happy worker
is a productive worker is too simplistic.
Quantitative management Theory
• Main focus is on:” crunching the numbers”.
• Decisions should be based on quantifiable
information. The quantitative perspective
comprises:
– Management science: development of
mathematical models to assist managers in
decision making,
– Operations research: is an applied form of
management science that helps managers
develop techniques to produce their products
and services more efficiently. Ex. PERT
 CONTEMPORARY
APPROACHES
• The systems approach:
– This approach compensated for the two main
limitations of the classical approaches:
• First, they ignored the relationship between the
organisation and its external environment and,
• Second, they focused on specific aspects of the
organisation at the expense of other considerations.
– To overcome these deficiencies, management
based their conceptions on a general scientific
approach called systems theory.
• Systems approach:
• Management views an organisation as a group of
interrelated parts with a single purpose: to remain
in balance. The action of one aspect influences
the other parts and causes imbalances.
• Managers, therefore, cannot deal separately with
individual parts: they should view the organisation
as a whole and anticipate the effect of their
decisions on the other parts of the organisation.
The balance between the elements (internally) and
between the organisation and the environment
(externally)!
• System comprises four elements:
– Input (resources)
– Transformation processes (managerial
processes, systems etc.)
– Outputs (products or services)
– Feedback (reaction from the environment)
 Contingency Approach

• This approach is based on the systems

approach to management. The basic
premise of the contingency approach is that
the application of management principles
depends on the particular situation that the
administration faces at a given point in time.
• Contingency approach emphasises a
situational approach (depends on the
situation)
• Contingencies can help managers identify
situations; these contingencies are:
– The organisation’s external environment (its
rate of change)
– The organisation’s own capabilities (SW),
– Managers and workers (values, goals, skills and
attitudes),
– The technology used by the organisation.
• Management training and experience may
help a manager characterize the situation
that must be managed based on examining
the contingencies.
• In a sense, the contingency approach views
a manager as a physician.
 Total quality management
• T: quality involves everyone and all
activities in the organisation.
• Q: meeting customers agreed on
requirements, formal and informal, at the
lowest cost, first time, every time;
• M: quality must be managed.
 The principles of TQM
• Everyone has a customer.
• Everyone has a supplier.
• Involvement of people.
• Quality must be managed.
• Quality must be measured.
• Concern for continuous improvement.
• Process approached.
• Problems must be prevented.
• Systems approach to management.
• Factual approach to decision making.
• Life-cycle costs, not front-en costs.
 Six Sigma

• Motorola introduced Six Sigma in the

1980s.
• Six Sigma is defined at three different levels
NL:
– As a metric;
– As a methodology;
– As a management system.
• DPMO – management system

• D: Define the goals of the improvement

activity.
• M: Measure the existing system.
• A: Analyze the system to identify ways to
eliminate the gap between the current
performance of the system or process and
the desired goal.
• I: improve the system.
• C: Control the new system.
 Learning organizations

• Peter Senge’s seven organisational

learning disabilities:
– The delusion of learning from experience.
– “I hit him because he took my ball.”
– The myth of teamwork.
– “I am my position.”
– “The enemy is out there.”
– The illusion of taking charge.
– The parable of the boiled frog.
 Re-engineering

• Re-engineering involves a significant

reassessment for what a particular
organizations operate.
• In the extreme, re-engineering assumes the
current process is irrelevant – it doesn’t
work, it’s broken, forget it! Start over!
• The following six conditions are vital for successful
re-engineering:
– Powerful external forces for change should make
change inevitable.
– Top management should back the re-engineering
initiative.
– Re-engineering projects should focus on the process
improvements that customers care about and are willing
to pay for.
– Thorough knowledge of the needs of customers I
therefore essential.
– All central departments affected by the process should
be represented on the team.
– Changes in human resource programmes and
information technology should be closely coordinated
with the re-engineering effort.
QUESTIONS?