Development of Management

Thoughts
Chapter Two
 Evolution of Management
• The history of management can be traced back to 5000 B.C.
• when the agriculture revolution was at the initial stage.
• In Egypt, in 2900 B.C., the pyramids were built in a highly organized and coordinated manner. These
pyramids have become a classic example of management

• Apart from this, management skills can also be found in the suave cities of Mohan-jo-Daro in
India.

• Another great example of management was shown in the organized military of Alexander the
Great during his military conquests in 336 to 323 B.C.

• Management was also a part of the Roman Empire, which organized its general
administration and controlled its political, military and judgmental issues by using effective
communication.
 Evolution of Management
• Management that we observe in organizations is attributed to the
industrial revolution in the late eighteenth century. Let us discuss about
management and the industrial revolution.
INDUSTRIAL REVOLUTION
• Management practices that have been followed in organizations emerged
as a result of the industrial revolution in the late eighteenth century.
• Industrial revolution was a period of transition from manual production
methods to new manufacturing processes in the late eighteenth century.
• Prior to this period, only small-scale industries were present for the
survival of the world’s vast population.
 INDUSTRIAL REVOLUTION
• After the industrial revolution, people began to shift their base to urban
cities. As these cities were witnessing the emergence of factories, there were
a large number of employment opportunities. During industrial revolution,
management was based on two main propositions, which are:

• Firstly, labor was perceived as a bunch of lethargic people who work only when
controlled and supervised.

• Secondly, labor was the only factor that could bring reduction in costs.
• Therefore, all the efforts were made to reduce labor costs and increase production.
 Approaches to management
• The industrial revolution laid the foundation for various management
approaches.
• Each approach has attempted to explain the concept of management from
different aspects.

What are management theories

• Management theories are a collection of ideas that recommend general rules for
how to manage an organization or business.
• They address how supervisors implement strategies to accomplish organizational
goals and how they motivate employees to perform at their highest ability.

What are management theories

• Management theories are a collection of ideas that recommend general rules for
how to manage an organization or business.

• They address how supervisors implement strategies to accomplish organizational

goals and how they motivate employees to perform at their highest ability.
 Benefits of management theories

• Increased productivity: Using these theories, leaders learn how to make the most of their team

members, improving performances and increasing productivity.

• Simplified decision making: Management theories give leaders strategies that speed up the decision-

making process, helping those leaders be more effective in their roles

• Increased collaboration: Leaders learn how to encourage team member participation and increase

collaboration among an entire group

• Increased objectivity: Management theories encourage leaders to make scientifically proven changes

rather than relying on their judgment

 Approaches to management
The two most common approaches to management are
• Classical/traditional approach
• Modern approach

1Traditonal/Classical management
theories
• The traditional management theories had their origin in the industrial revolution when
technological developments, expanding trade/markets, growing populations created
opportunities for mass production through a systematic and mechanized process.

• Traditional management theorists were concerned with the formal relations among an
organization's departments, tasks and processes, and in the promotion of greater
efficiency and productivity among the workers.
 Traditional/Classical management theories
Traditional theories can be categorized into three main branches
• Scientific management.
• Bureaucratic management,
• Administrative management and

• All three management concepts emerged around the same period around
the late 1890s to early 1990s, and resulted largely from the work of
engineers who had particular interest in increasing productivity within the
factories.
 1. SCIENTIFIC MANAGEMENT school
• The scientific management theory was developed by Frederick Winslow Taylor (1856- 1915),
who was an American engineer. Thus, scientific management is also popular by the name of
Taylorism.
• He conducted a series of experiments in three organizations that greatly influenced
management thoughts.

Taylor's Contributions of Scientific management

1. Time and motion study:

It is a technique of scientific management that was developed to define employee productivity
standards.
In this technique, a complex job is first divided into a series of simple tasks.
After that, the way these tasks are performed is observed to determine and eliminate waste
motions.
• In this way, the precise time taken to complete the job is determined, which further helps in
developing delivery schedules and incentive schemes.
• Time and motion study is most appropriate for repetitive jobs
 Taylor's Contributions
2. Differential piece rate plan:

• This plan was developed by Taylor on the assumption that all the workers have different
capabilities and must be paid accordingly.

• This plan is also based on an assumption that the production system is based on piece rates.

• Under the plan, time and motion study is used to estimate the standard time of completing a
job.

• Based on the standard time, two piece rates are devised, namely higher and lower.
• The workers who exceed the standard time are given higher piece rates as wages.

• On the other hand, lower piece rates are given to those workers who do not meet
the standard
 Taylor's Contributions
3. Supervision:

• Taylor suggested that work in an organization must be planned and assigned to

the workers by foremen.

• Foremen should assign work on the basis of workers’ specialty and supervise the
performance of workers.

• For that, an organization should hire adequate number of foremen.

4. Scientific recruitment and training:
Taylor laid emphasis on training workers and developing their skills so that they can
efficiently perform more than one type of job.
5. Friendly cooperation between management and workers:
• Taylor believed that both management and workers have one common goal, i.e.
increase in production.
• Therefore, both management and workers must work together in harmony to
achieve the common goal.
 Taylor's Contributions

• Taylor is considered to be one of the most influential persons in terms of impact on

management service practice as well as on management thought up to the present day.

In1909 publication, Principles of Scientific Management”, Taylor spearheaded

Scientific management movement, a management approach that emphasized improving work
methods through observation and analysis.
• He also popularized using financial incentives – financial rewards paid to workers whose
production exceeds some predetermined standard.
 Taylor's Contributions
• His framework for a successful organization included:
• (i) clear delineation of authority;
• (ii) responsibility;
• (iii) separation of planning from operations;
(iv) incentive schemes for workers;
• (v) management by exception; and
• (vi) task specialization.
 2. ADMINISTRATIVE MANAGEMENT
• Henri Fayol (1841-1925), a French mining engineer, promoted the concept
of administrative management.
• He focused on developing administrative principles that could be
applicable to both general and higher managerial levels.
• Fayol presented 14 principles of management, which act as a guide for
developing management practices.

Henri Fayol was the first person to group management functions that today are
summarized as planning, organizing, leading, coordinating, controlling and staffing. He
identified fourteen management principles that included:
(i)Division of labor (specialization leads to greater efficiency);

(ii)Authority (managers have the authority to get things done);

(iii)discipline (members of the organization need to respect the rules and regulations that
govern it);
 ADMINISTRATIVE MANAGEMENT
(iv)unity of command (avoid conflicting and/or confusing instructions);

(v)unity of direction (only one manager should be responsible for an employee’s behavior;

(vi)subordination of individual interest to the common good (the interests of individual

employees should not take precedence over the interests of the entire organization);

(vii) remuneration (pay for work done should be fair to both the employee and the employer);

(viii)centralization (managers should retain the final responsibility)

 ADMINISTRATIVE MANAGEMENT

(ix) scalar chair (a single uninterrupted line of

To pauthority should run rank to rank
from management to the lowest level
position in the company);
(x) order (materials and people need to be in the right
place at the right time);
 ADMINISTRATIVE MANAGEMENT
(xi)equity (managers should be both friendly and fair to their subordinates);
(xii)stability and tenure of staff (stability and tenure should be enhanced and high
staff turnover should be avoided);
(xiii)initiative (subordinates should be given the freedom to formulate and carry out
their own plans;
(xiv)esprit de corps (promoting team spirit gives the organization a sense of
unity.
• Fayol’s management principles are still widely practised by many companies today.
 Bureaucratic management theory/ school

• Bureaucratic management, as depicted by its name, focuses on a rigid

system which has a set hierarchy, a clear division of labor, and detailed
rules and procedures.
• It provides a blueprint of how an organization should operate in the most
efficient manner.
Max Weber (1864–1920) identified seven characteristics of bureaucratic
management:
• (i) rules (formal guidelines for the behavior of employees while they are
on the job);
• (ii) impersonality (all employees are evaluated according to rules and
objective data);
• (iii) division of labor (the process of dividing duties into simpler,
more specialized tasks);
 Bureaucratic management theory
• (iv) hierarchical structure (helps control the behavior of employees by
making clear to each exactly where he or she stands in relation to
everyone else in the organization);
• (v) authority structure (determines who has the right to make
decisions of varying importance at different levels within the organization);

• (vi) life-long career commitment (job security is guaranteed as long as the

employees is technically qualified and performs satisfactorily;

• (vii) rationality (managers operate logically and scientifically with all

decisions leading directly to achieving the organization's goals).
 Bureaucratic management theory

• The bureaucratic approach is most effective

when the organization is required to handle
large quantities of standard information, the
needs of the customer are known and not
likely to change, the technology is routine and
stable, and the organization has to coordinate
the activities of numerous employees in order
to deliver a standardized service or product to
the customer.
MODERN APPROACH to management

• The modern approach to management was given

in the 1950s.
• The approach focused mainly on employee
satisfaction.
• According to this approach, employees do not
necessarily work for money and they like to
receive affection and respect of co-workers,
which further increases their productivity.
• This helps an employee to contribute more
towards the success of an organization.
 The behavioral theory
• The scientific management movement focused
primarily on production, management, organization,
technology and science, but little attention was paid to
how people might be impacted, the way in which they
react and are likely to react to future.
• The focus of attention had been almost exclusively on
the jobs which individuals performed and how they
could be improved.
• Benefits went disproportionately to the company and
the individual’s work experience was dehumanizing as
they were treated as extensions to the machines.
 Human Relations Management Theory

As the title implies, Human Relations Management

Theory is centered around human interactions and
relationships.
 Human Relations Management Theory

During the radical social and cultural changes that occurred in the 1920s and 1930s, the

behavioral theories emerged that stresses the importance of group dynamics, complex

human motivations and the manager’s leadership style.

•It also emphasizes the employee’s social and economic needs and the influence of the

organization's social setting on the quantity and quality of work produced, and its focuses

on two competencies – communication and teamwork..

 Human Relations Management Theory

• This increase in attention to the human factors has become known as the
‘human relations school of management’.

• Some of the more prominent theorists in this field included Elton Mayo
(1880 – 1949), Mary Parker Follett (1868 – 1933), Chester Barnard (1886 –
1961), Abraham Maslow (1908 – 1970), Douglas McGregor (1906 – 1964),
Rensis Likert (1903 – 1981), Frederick Herzberg (1923 – 2000), David
McClelland (1917 – 1998) and Chris Argyris (1923 – present)
 Human Relations Management Theory

• One of the most prominent behavioral

theorists is Elton Mayo
• Elton Mayo believed that all early
management theories only focused on how
money affects employee performance.
• He believed there were more factors that
influenced how employees behaved and
performed at work.
 Human Relations Management Theory

• His ground breaking study of Western Electric

Company’s Hawthorne Plant in Chicago which he
conducted with Fritz Roethlisberger and William
Dickson between 1924 and 1933.
• During the course of Mayo’s studies, he managed
to switch the focus of attention away from the
individual and physical considerations to the
importance of groups at work requiring
sociological and psychological consideration.
 Human Relations Management Theory

Some of his major findings included:

• (i)workers thought and acted not
as individuals but as a group;
• (ii) workers should sacrifice their self-
interest in the face of group pressure;
• (iii) money is not the sole motivator;.
 Human Relations Management Theory

• (iv) supervisors have significant influence on output;

• (v) the social world of the adult is patterned around
work activity;
• (vi) the need for recognition, security and sense of
belonging is more important in determining workers’
morale and productivity than the physical conditions
under which he works;
• (vii) a complaint is not necessarily an objective recital
of facts; it is commonly a symptom manifesting
disturbance of an individual’s status position;
 Human Relations Management Theory

• (viii) the worker is a person whose attitudes and

effectiveness are conditioned by social demands
from both inside and outside the work plant;
• (ix) informal groups within the work plant
exercise strong social controls over the work
habits and attitudes of the individual worker; and
• (x) group collaboration does not occur by
accident; it must be planned and developed
 Human Relations Management Theory

• He therefore recommended that:

• (i) managers must not ignore the informal
organization but ensure that its norms are in
harmony with organizational goals;
• (ii) man is basically motivated by social needs,
not economic ones;
• (iii) work is rationalized by employees and
meanings are sought in social relationships at
work;
 Human Relations Management Theory

• (iv) managers must focus on the work group

rather than individuals, but workers should be
considered in a personal context in order to
understand each employee’s unique needs and
sources satisfaction; and
• (v) effective supervisors are those who satisfy
subordinate’s social needs.
• Mayo’s work is now part of the management
folklore which has led to the movement to reject
the views of the traditionalists to the school of
‘human relations’ management
 Systems approach:

• It was developed in the late1960s with an aim

to provide an integrated approach to solve
management problems.

• According to this approach, a system can be

defined as a set of components that are
interacting regularly or are interdependent,
thus making a single unit.
 Systems approach
The systems approach focuses on the
following points:
• A system comprises units and sub-units. •
• Each and every part of a system need to
be thoroughly understood in order to analyze it. •
• A system always has boundaries to define
its beginning and ending. •
• Every system is developed to achieve a
specific goal. •
• No system can exist in isolation.
 Systems approach

This theory asserts businesses consist of multiple components

that must work in harmony for the Larger system to function
optimally. The
On organization’s success, therefore, depends synergy,
interdependence and interrelations between subsystems.
• According to this theory, employees are the most important
components of a company, and departments, workgroups and
business units are all additional crucial elements for success.
 Systems approach

• Per the systems management theory,

managers should evaluate patterns and events
within the organization to determine the best
management approach. They need to
collaborate and work together on programs to
ensure success.
 Contingency approach:
• This approach is also known as situational approach wherein an
organization determines problems by analyzing its conditions and
environment.

• According to this approach, there is no single set of rules that is applicable

in solving all types of problems in organizations

• Therefore, managers need to analyze every problem and various aspects

associated with it, and define different ways to solve the problem