LECTURE 4: History of Management

HONORIS
UNITED UNIVERSITIES
 1. An Introduction

2. Early Management School (The Pre-

Classical School).

Lecture 3. Classical School.

Outline 4. Neo-Classical School.

5. Quantitative School.

6. Modern/Contemporary School.
Management History: An Introduction

History is important because it can put Organized endeavors directed by people

current activities in perspective. In this responsible for planning, organizing,
module, we are going to take a trip leading, and controlling activities have
back in time to see how the field of existed for thousands of years. In this
module, we will look at five (5) major
study called “Management” has evolved.
schools of management theory: the pre-
Management has been practiced a long
classical, the classical, the neo-classical,
time. What you are going to see in this
the quantitative, and the contemporary
module is that today’s managers still
schools.
use many elements of the historical
First, we will examine the so-called pre-
approaches to management. classical school and its theories.
 Regardless of the titles given to managers throughout
history, someone has always had to plan what needs to
be accomplished, organize people and materials, lead and
direct workers, and impose controls to ensure that goals
were attained as planned.

If we look at recorded history, a number of monumental examples of

management practices can be traced. The Pre-Classical School therefore
comprises such historical examples of management practices. It offers

Pre-Classical
classic examples to prove that management was practiced even in ancient
times.

School Some of the historical examples or events that are significant to the
study of management in this school of thought are:

(Early Management School)

The Egyptian pyramids
The Great Wall of China
Adam Smith’s division of labour
The industrial revolution

We examine each of these four pre-classical management

practices on the next 5 PowerPoint slides.
Pre-Classical School of Management
The Egyptian Pyramids
Pre-Classical School of Management
The Egyptian Pyramids
Pre-Classical School of Management
The Great Wall of China
Pre-Classical School of Management
The Great Wall of China
 Pre-Classical School of Management
Division of Labour & Industrial Revolution

Adam Smith Industrial Revolution

He published “The Wealth of The industrial revolution substituted

Nations” in 1776. machine power for human labour.

He advocated Division of Labour

(job specialization) in order to It led to the establishment of large
increase productivity of workers in organizations in need of
organizations. management at the time.
 The second school of management thought is the classical school. The
theories and researchers in this school emphasize rationality and making
organizations and workers as efficient as possible. The school is divided into
two (2) major theories:

“Scientific Management Theory” & “General Administrative Theory.”

SCIENTIFIC MANAGEMENT
The 3 most important contributors to scientific management theory are:

Frederick W. Taylor,

The Classical Henry Gantt,

&
the husband-wife team of Frank and Lillian Gilbreth.

School …
GENERAL ADMINISTRATIVE THEORY
The 2 most important contributors to general administrative theory are:

Henri Fayol
&
Max Weber.

Let’s take a look at each of these important figures in

management history.
 Scientific Management
The Contribution of Frederick Winslow Taylor

Known as the father of scientific management, Taylor developed specific principles for this field.
He was a mechanical engineer
He examined ways to manage an organization efficiently and effectively
He published “Principles of Scientific Management” in 1911

His scientific management Core Principles

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.

 Scientific Management
The Contribution of Henry Gantt

Henry Gantt worked with Taylor and was responsible for introducing the “Task & Bonus Plan”
He also invented the “Gantt Chart”
Was a mechanical engineer like Taylor (as well as a management consultant)

Henry Gantt’s “Task & Bonus Plan”

The Task & Bonus Plan was aimed at providing extra wages for extra work in addition to a guaranteed minimum wage
in the workplace. As per Henry Gantt’s Task & Bonus Plan, bonuses should as well be awarded to supervisors who are
successful in getting their workers to meet output goals in a workplace setting.

The Gantt Chart

Henry’s Gantt Chart which was a forerunner of today’s Program Evaluation and Review Technique (PERT) was a chart
on which the process of work/project could be recorded.
 Scientific Management
Contributions of the Gilbreths

“Frank” and “Lilian” Gilbreth as husband and wife team contributed extensively towards the concept of
scientific management and were primarily responsible for analysis of time and motion study of workers in
organizations.

They focused on increasing worker productivity in organizations through reduction of wasted motions
…
They invented a device called “microchronometer“ to time worker motions and optimize work
performance in organizations
…
In the area of motion study, the Gilbreths identified 18 (not 17) basic hand motions which they
called Therbligs (Gilbreth spelt backwards with the th transposed).

The 18 Therbligs elements/motions include among other things the following: find, select, inspect, use, etc.
 General Administrative Theory
The Work of Henri Fayol

Fayol wrote during the same time period as Taylor. While Taylor was concerned with first-
line managers and the scientific method, Fayol’s attention was directed at the activities of all
managers. He wrote from his personal experience as the managing director of a large
French coal-mining firm.
…
Fayol described the practice of management as something distinct from accounting, finance,
production, distribution, and other typical business functions. His belief that management
was an activity common to all business endeavors, government, and even the home led him
to develop 14 principles of management — which are fundamental rules of management that
could be applied to all organizational situations and taught in schools.
Class Discussion: Henri Fayol’s 14 Principles

a a
Division of work Centralization

Authority Scalar chain

Discipline Order

Unity of command Equity

Unity of direction Stability of tenure of personnel

Subordination of individual interests to Initiative

the general interest

Remuneration Esprit de corps

 General Administrative Theory
The Work of Max Weber

Max Weber was a German sociologist who studied organizations. Weber developed the
principles of bureaucracy — a formal system of organization and administration designed
to ensure efficiency and effectiveness. A bureaucratic (system of) organization, according
to Weber, is characterized by a clearly defined hierarchy, detailed rules and regulations,
and impersonal relationships.

Bureaucratic system of administration is based on the five (5) principles he developed

 Class Discussion: Max Weber’s 5 Principles

a a
Formal authority derives from one’s Authority is exercised effectively
position inside an organization. when positions are arranged
hierarchically.

Individuals occupy positions because

of their performance.

Each individual’s authority and

responsibilities are specified by the Rules of the organization are
organization. followed and they control individual
behavior.
 The third school of management is known as the “Neo-Classical School.” This
school of management is divided into 2:

“Human Relations School” & “Behavioural School.”

HUMAN RELATIONS SCHOOL/MOVEMENT

In this school (or otherwise movement), the most important scholarly
contribution is the “Elton Mayo and Hawthorne Studies.”

Neo-Classical
School …
of BEHAVIOURAL SCHOOL/APPROACH
Contributors to the behavioural school or approach include:

Management Douglas McGregor,

Robert Owen
Hugo Munsterberg
Mary Parker Follett
&
Chester Barnard.

We will take a look at each of these scholars and their

research works in management history.
 Human Relations Movement
Elton Mayo and the Hawthorne Studies

Elton Mayo is known in management for completing the “Hawthorne Studies” which is a series of productivity
experiments conducted at Western Electric Company in Cicero, Illinois, United States, from 1927 to 1932, in order to
examine the effect of various lighting levels on worker productivity.

In 1933, he published findings of the Hawthorne experiments in his work titled “The Human Problems of an
Industrialized Civilization.”
…
Experimental Findings of the Hawthorne Studies
Productivity unexpectedly increased under imposed adverse and favourable (lighting) work conditions during the
experiment
…
Research Conclusion of the Hawthorne Studies
Social norms, group standards, attitudes more strongly influence worker productivity and behaviour than do monetary
incentives.
The Behavioural Approach
McGregor’s Contributions

Perhaps the most influential work in the behavioural school of management is the work of Douglas McGregor.

He proposed two sets of assumptions about how work attitudes and behaviors not only dominate the way managers think but also
affect how they behave in organizations. McGregor named these two contrasting sets of assumptions Theory X and Theory Y .

Theory X
According to the assumptions of Theory X, the average worker is lazy, dislikes work, and will try to do as little as possible; that
workers have little ambition and wish to avoid responsibility. Thus, the manager’s task is to counteract workers’ natural tendencies
to avoid work. To keep workers’ performance at a high level, the manager must supervise workers closely and control their
behaviours by means of “the carrot and stick” (i.e. Rewards and punishments).

Theory Y
In contrast, Theory Y assumes that workers are not inherently lazy, do not naturally dislike work, and, if given the opportunity, will
do what is good for the organization. According to Theory Y, the characteristics of a work setting determine whether workers
consider work to be a source of satisfaction or punishment, and managers do not need to closely control workers’ behaviours to
make them perform at a high level because workers exercise self- control when they are committed to organizational goals.
 The Behavioural Approach
Contribution of Robert Owen

He is considered to be the pioneer of human resource management process. He

advocated the necessity of concern for the welfare of workers.

Robert Owen was concerned about deplorable working conditions in organizations; as

such, he advised that money which an organization spends to improve labour welfare
or improve wellbeing of workers is smart investment.
 The Behavioural Approach
Contribution of Hugo Munsterberg

Hugo Munsterberg was a pioneer in the field of industrial psychology (the scientific
study of people at work).

He suggested using psychological tests for employee selection, learning theory concepts
for employee training, and study of human behavior for employee motivation.
 The Behavioural Approach
Contribution of Mary Parker Follett

Considered to be the mother of modern management, Follett is one of the first to

recognize that organizations could be viewed from perspective of individual and group
behavior.
…
She proposed more people-oriented ideas than scientific management followers.
…
She thought organizations should be based on group ethic.
 The Behavioural Approach
Contribution of Chester Barnard

Chester Barnard was an American business executive. As a manager, he was of the

view that organizations are social systems that require cooperation.

Chester believed that a manager’s job is to communicate and stimulate employees’ high
levels of effort.
…
He was the first to argue that organizations are open systems.
 “Quantitative School” is the fourth school of management thought. It is also
known as “Management Science.”

As one of the schools of management thought, it concerns the use of

quantitative techniques to improve decision making.

What exactly does the quantitative school teach? It involves applying

Quantitative School statistics, optimization models, information models, computer simulations,

and other quantitative techniques to management activities.

of “Linear programming,” for instance, is a quantitative technique that

managers use to improve resource allocation decisions. Work scheduling
can be more efficient as a result of “critical-path scheduling analysis,”

Management another quantitative technique. The Economic Order Quantity (EOQ)

model helps managers determine optimum inventory levels.

Each of these is an example of quantitative techniques being applied to

improve managerial decision making.

A number of quantitative techniques used in management

these days are outlined on the next slide.
Examples of Quantitative Techniques Used in
Management

Statistics
Optimization models
Information models
Computer simulations
Linear programming
Total Quality Management (TQM)
Operations management
Management Information Systems (MIS)
Economic Order Quantity (EOQ)
Queuing theory
 The fifth school of management thought is termed
“modern” or “contemporary” school.

Scholarly contributions to this school began in the 1960s.

The Under this school of thought, there exist the following 3

theories:

Modern/Contemporary
School Systems theory,
Contingency theory, &
Theory Z

We study each of these 3 contemporary theories next.

 Systems Theory

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 environments (all system input and output is internal).

Open systems dynamically interact with their environments by taking in inputs and transforming them into outputs that are distributed into their
environments.

The Basic Assumptions of the Theory

Now using the systems theory, managers envision an organization as a body with many interdependent parts, each of which is important to the well-
being of the organization as a whole. Managers coordinate the work activities of the various parts of the organization, realizing that decisions and
actions taken in one organizational area will affect other areas.

The theory recognizes that organizations are not self-contained; they rely on and are affected by factors in their external environments.
 Contingency Theory

It is sometimes called the “situational approach.”

It teaches that there’s no one universally applicable set of management principles (or rules) by
which to manage organizations.

That organizations are individually different, they face different situations (or contingency variables),
and require different ways of managing.
 Theory Z

Much after the propositions of theories X and Y by McGregor, William Ouchi propounded the third theory labeled as “Z Theory.”
In general, the theory combines Japanese management philosophies with American management practices.

…
William Ouchi’s Theory Z is based on the following 4 postulates:

Strong bond between organization and employees,

Employee participation and involvement,

No formal organization structure,

&

Human resource development.