Module 2: Management and Organization in History

Objective:
To appreciate the role that management played in human history
1. What are the five lessons that history in management teach us? Prehistoric Age/Hunters-Gatherers
120,000 years ago
-History teaches us that change is inevitable and accelerating -Situation: The ice age
-History provides an elucidation or explanation of the course and
Agricultural Age
direction taken by management 10,000 years ago
-History shows us the sequence of events and the development of -Situation: End of the ice age
management as we know it today Birth of Christ (2,000 years ago)
The Dark Ages after the fall of the Roman empire
-History allows us to discern in the course of management history
some general scheme or design, some pattern that could help us Commercial Age
predict future trends 800 years ago (1200 AD)
-Situation:
- History teaches us to learn from mistakes, or else we are a. Breakdown of empires; power became local;
condemned to repeat them - no manager has enough experience to birth of nation state
b. Genghis Kahn conquered Asia and opened up
deal with every situation or problem encountered in the course of the silk road but Islam’s control of the trading route
managing an organization. A manager needs to know what worked in the middle east forced exploration of other
before, what did not work and why. routes through the ocean leading to exploration of
other islands and continents

Industrial Age
300 years ago (1700 AD)
-Situation:
Age of science and scientific discoveries that led to
the invention of machines to help mass production
to fill the need of a fast growing population

Information Age
70 years ago (1940 AD)
-Situation:
Computer age and the growth of conglomerates;
internationalization of business

Mass Communication Age

10 year ago (2000 AD)
-Situation:
de regulation; globalization world wide web; the
Internet, online communities, accelerating change
rendering past standards useless;

New age?
-Situation:
(What will define the new age?) Use of artificial
intelligence? Biotechnology/enhanced
human being? Nano technology. New economic
order (monetarism vs. fixed exchange rate)?
Terrorism?

2. Explain the development of Management and Organization in History.

Age of the Hunters and Gatherers Planning Systems
- Goals would be limited to the day to day survival -Rituals of atonement and sacrifices to the gods of
the forest and the animals that make the trees bear
Imagine a small band of hunters and gatherers Organizing fruits for picking and make animals to come back
120,000 – 200,000 years ago as they roam the - Tasks ad skills would be limited to gathering and for the hunt (spirits could be tricked or pleased)
forest to hunt and forage for food. They saw hunting for food - Decision making is more egalitarian and would
everything as having spirit that made plants grow - The roles were not clearly defined except for the have been influenced by animism/mysticism,
or the winds blow. They believed that there were gender or age polytheism (political philosophy)
spirits who had dominion over things. And - There would be no layers to the organization or -If there are disputes they probably just part ways if
anything that happened during that time was tribe it could not be settled amicably
1
attributed to the spirit or what they believed was - There would be no specialization during the food
magic. They believed that the world was created Leading gathering stage, but would have some
by the spirits for them and those who could invoke -Oral communication must have evolved as a tool specialization during the food hunting stage (men
the magic to make life better for them was in great for coordinating the hunt and passing on the hunt, women take care of the children),
demand. And in spite of the egalitarian nature of tradition of the tribe through tales - Travel light; only one child until they can walk on
the hunter and gatherer society the shaman had -The solidarity of the tribe must have been their own; no pots and pans to carry
the greatest influence in that era1 because he was continuously reinforced through rituals. - Use of stone tools and fire ;everything is shared;
believed to be able to invoke the magic and lead nothing is stored
the tribe in the right path. Controlling
-There is minimum control Structure
-Clan control -Flat organization
- No formal organizational grouping of skills
- No formal leadership with the priest or shaman
probably acting as informal leader or the go-
between man and spirits

People
- Small roving bands of 25 – 60 people
Agricultural Age Planning Systems:
-The goal would have been to produce as much -Invention of private property, writing, arithmetic,
food from the land and collect tribute or taxes from -Code and standards where establish to govern
Eventually, when the ice age ended 10,000 years the subjects communities or empires;
ago and people learned to produce their food from -There would have been some form of external and - The code of Hammurabi was introduced during
the land instead of relying on nature and the spirit, internal scanning to set plans for planting and this age to govern every civil transaction and
the acquisition, possession, enjoyment and scheduling of activities based on the seasons of a relationships
ownership of land gave rise to wealth and with particular geography -Religion was added to provide supernatural control
wealth came power – economic and political2. The system to create order in a growing society
need to develop land created private ownership Organizing -Birth of different religions with one personal gods
and ownership gave rights to owners to protect -More tasks and technical skills in terms of planting (monotheism – personal god) with the ruler as god
their land through codes of behavior and the and domesticating animals developed or the son of god;
institutions to enforce the codes. Therefore, the - There was now some form of hierarchy; with a -Decision making would have been guided by the
influence and power shifted from the shaman to king, administrators and subjects acquisition and use of land: feudalism (vassals held
the landowner who maintained authority over the -Food production with 35 hour work week, land from a superior in exchange for
land and its use. And anyone who was allowed to - The king need soldiers to execute the laws services/tributes )- political philosophy
till the land owned by someone else had to agree - Farm tools were invented to hasten cultivation of
to serve the owner in exchange for the right to do the land Structure
so (feudalism). In some cases conquests were --More specialization: planters, carpenters, scribes,
resorted to increase production and those who Leading tax collectors, soldiers, potters, craftsmen, artists,
were defeated were used as slave labor. Increased -rise of the warrior kings to protect the land architects, builders, jewelers, philosophers (with
agricultural outputs supported a larger non- (replaced the shaman) from marauders or other enough food stored, others had the time to
agricultural population who engaged in crafts and monarchs wanting to expand their own territories speculate about the cosmos and what it is made
the production of services. -The king makes the law (autocratic) and govern of), etc.
according to the law - There is a growing hierarchy and some form of
-Basic operations would have been to keep order delegation of authority as could be seen in the 12
and collect taxes to fund the empire and its soldiers tribes of Israel
-Early Civilization: Sumerians, Egyptians, Hebrews,
Controlling Babylonians, Chinese, Greeks, India, Rome
-The law issued by the king becomes the standard
People
-Communities and settlements of around 25,000
people formed around rivers

-Leading thinkers: Mencius, Sun Tzu, Socrates,

Plato, Xenophon, Aristotle, Alexander the Great,
Cato, Jesus, Abu Yusuf, Alfarabi, Al-Mawardi
Commercial Age Planning Systems:
-The goal would have been to accumulate more - Strong Venetian Jewish influence, legal
capital for bankers who finance trade that produce framework for the formation of corporation, joint-
The production of crafts grew and gave rise to trade more wealth for the state ventures, partnerships, cost accounting; double
and commerce. As trade grew in the 1500’s, many - Planning became more complex because of the entry; journal entries and ledgers; work processes
ruling governments began to fear that that the intercontinental outlook with the need to arrange in accounting, and foreign exchange to facilitate
prosperity of the state could be compromised if its for ship expeditions or caravans and for the trade
supply of capital diminishes with a trade
1
Primal Religion and Civilization, http://www.macrohistory.com/h1/ch00.htm
2
Emmanuel T. Santos, Organization and Management, page 100
2
imbalance. Ruling governments then began the production and accumulation of goods that could - Different guilds have different specialization.
protectionist practice of limiting imports while be traded -Master to apprentice
expanding exports through the use of subsidies and -Banking and financial system emerged
tariff (mercantilism). They undertook exploration Organizing - Formation of the first university; age of
to find new outlets for their products and -The production of the different guilds was enlightenment; reformation; renaissance
protected their colonies from other colonizers. As gathered together for shipping. - Guiding political philosophy: Mercantilism
exploration reached out to far flung places and -Traders organize expeditions or caravans (protectionism; accumulation of precious metal for
trade expanded the undertaking became bigger the state)
and borrowing capital from bankers to finance the Leading - invention of the Gutenberg movable type print,
venture seemed to be the easier method than - Birth of the entrepreneur who served as the go Renaissance: rebirth of the Greek philosophy,
raising taxes. This gave rise to banking that spread between the capitalist and the buyers beginning of Deism (god is the law of the universe)
across the globe to serve their clients in different -Effective leaderships was thought to come from
countries. Capitalists and bankers through the personality traits (Trait Theory) Structure
interest that they charge and arbitrage began to -Birth of the corporation or joint-stock companies
exert more influence in the economy of nations Controlling - Growth of intermediaries in order to finance,
and in politics. And when governments could not -More use of financial controls produce, explore colonies and trade;
raise money through legislation and taxes as -Trading requires some form of trust and requires -Guilds, state regulated companies
quickly as required by circumstances like a war traders to perform a relationship role
effort they resort to borrowings. -Trading requires more rational thinking People
-First step to globalization spearheaded by growing
trading companies

-Leading thinkers: Ibn Taymiyyah, Luca Pacioli

Genoese, Ibn Khaldun, Francisco D’marco, Soranzo
brothers, Barbarigo, Macheavelli, Sir Thomas More,
Sir James Stewart, John Napier, Oughtred, Pascal,
Leibniz
Industrial Age Planning Systems:
-Economies of scale; mass market -Production focus
-one size fits all - The focus was on technology to produce more
With a growing population in the 1700’s, the products that can meet the needs of a growing
traditional method of domestic handicraft system Organizing population
of manufacturing was no longer adequate. The -Work was broken down into specialized tasks and -12 hour work day,
Enlightenment and the Renaissance that begun standardized to facilitate training - time and motion study of laborer’s work, study of
during the commercial age encouraged -Worker adjusted to the speed of the machines human behavior,
questioning, analyzing and improving things and they are working with - Beginning of modern management: Planning,
led to scientific inquiries and methods that was - Bureaucracy Organizing, Leading (Industrialist – go between
used to usher in new inventions that revolutionized capitalists and labor unions/consumers), and
the world and brought forth the industrial age. Leading - Mechanization of farming
This led to the factory-based mechanization3. The -Birth of the professional manager. Management as - Guiding political philosophy: Utilitarianism
industrialist began to adopt the scientific method a function was made separate and distinct from the (greater good for the many/masses);
pioneered by Adam Smith by introducing the other business functions --Growing materialism, and beginning of
division of labor that increased tremendously the -Effective leadership was seen as based on concern Secularism (separation of church and state) and
productivity by workers. They began to use the for the task and concern for people (Behavioral atheism.
moving production line to increase efficiency which Theory-Managerial Grid) - Interchangeable parts
was first seen as dehumanizing and was resisted by -Management as a separate discipline
workers but because of the gains in efficiency - Communication through the wires Structure
workers were forced to adjust to the speed of the - Hierarchical organization
machines. Not only was work divided and Controlling -Pyramid
standardized for easy training and not only was Input/output - Functional division of labor to fit machines,
work speeded up by the moving production line
but through the recommendation of Frederick People
Taylor people were selected on the basis of their - Growth of the labor movement
skills or physical traits and match them to the -People are able to move away from rivers and
requirements of the tasks. The resulting reduction form bigger units of society because of the steam
of inefficiency and the use of machineries reduced engines and introduction of the railroad system
unit cost to a level that the growing population can
afford to buy. Therefore, practically anything that Leading lights: Adam Smith, Robert Owen, James
was produced was bought by the masses and the Mill, Thomas Jefferson, Eli Whitney, James Watt,
industrialist thrived sometimes at the expense of James Stewart Mill, Charles Babbage, Marshall
the exploited laborers – thus began the rise of Laughin, Henry Poor, Daniel McCallum, Frederick
modern management. Taylor, Frank and Lilian Gilbreth, Henry Gantt,
Vilfredo Pareto, Henry Fayol, Thomas Edison, Max
Weber, Elton Mayo, Chester Barnard, etc.
3
Emmanuel T. Santos, Organization and Management, page 101
3
Information Age Planning Systems:
- global planning, and organizing led to the growth mass advertising
of the MNCs and SBUs led by the organization man -8 hour work day, studies in organizational behavior
As the business expanded, shares of stocks were who look for opportunities and minimizes risks and employee motivation
sold to many individuals to increase the capital -Surplus of information - Selling concept was born to push piling
needed to operate the huge enterprises that began -BCG, Strategic Planning inventories of goods to the public – sell features
to span the globe. With so many owners, the - Use of new technology, birth of the computer and
influence and power shifted from owners/ Organizing automation,
industrialist to professional managers, who were - Engineers were being replaced by programmers. - Market segmentation, use of teams, outsourcing
hired to manage the growing assets of the -More specialization using outside companies - Technology have increased production of all the
organization. These were the organization men4 -Firms restructured companies (Man landed on the moon)
who dedicated their lives to the achievement of the
goals of the organization. The scientific method Leading Structure
that began in the industrial age grew into a -Facilitating rather than command and control - The world was divided into regional offices
management science which professional managers -Effective leadership was seen as based on factors - Flattening organizational structures, weakening of
were trained to use. Managers were trained in the based on goals and the development of labor unions, growth of white collar jobs,
four function of management introduced by Henri subordinates (Situational Leadership) -Flatter pyramid
Fayol: planning, organizing, leading, and
controlling. They used the same analytical tools Controlling People
such as the SWOT analysis, the Portfolio Strategy, -Annual Financial Report -People are living in mega cities whose population
Porter’s Differentiation Strategy or the BCG matrix are into millions of people
to evaluate what was a predictable and -Growth of multinational corporations with offices
quantifiable market. And when the marketing in different parts of the world
discipline was also introduced most managers -Baby boomers and Generation X
started using segmentation, targeting, positioning
and the four P’s. With the advent of more user- Leading lights: Abraham Maslow, Peter Drucker,
friendly computer in the mid to later part of the Rensis Likert, Edwards Deming, Joseph Juran, Kurt
1900’s more quantitative methods were used in Lewin, Douglas McGregor, Robert Tannenbaum,
analyzing the massive information that had become Frederick Hezberg, Theodore Levitt, Alfred Sloans,
available. These professional managers were the David McLelan, Warren Bennis, Kenneth Blanchard,
stars and they ruled through command and control Henry MIntzberg, Robert J House, Victor Vroom,
fostering compliance but creating an environment Tom Peters, Michael Porter,
of fear, distrust and internal competitiveness. The g) Guiding political philosophy: Pragmatism (if it
public admired them for their exploits and the works it must be good)
Board of Directors was willing to pay them star
salaries. Professional managers searched for the
rules that can improve processes, reduce costs,
improve organizational efficiencies (reengineering),
improve quality (Quality Circles) or create an
innovation (skunk work) that will result into more
efficiency and effectiveness thus increasing the
profits that drew in more investors. They seemed
to have the answers and people read their
biographies to learn from them.

Communication Age Planning Systems:

- Contingency planning, -Fragmentation of the markets; segmentation
-Butterfly effect; Unpredictable results marketing; customization – sell benefits
The growing use of the computers to run the -Everyone is planning the same way and doing the - No distinction between work and private life,
business required programs to run the computers. same thing. - use of the Internet and cellular phones, multi-
Essentially a program told a computer how to solve -Innovation; be different; do different media communication
a specific problem. And because the world was full - cyberspace problem solving,
of problems, the number and variety of programs Organizing - speed not size is important; companies began to
that people wrote for computers was practically - virtual organization, restructure to focus on core businesses; support
endless. Not all managers could write a computer - off-shoring. services were outsourced
program because they were either not trained for it -Employee power – need to be motivated to be - Guiding political philosophy: Existentialism
or they did not have the time to devote to it. committed (human beings are standing in a meaningless world
Therefore the power and influence shifted from the and the individual is the sole judge of his/her own
professional managers to a new breed of Leading actions with freedom to choose)
employees who were born with the computer and - Effective leadership was contingent on the
were more familiar with it than anybody else. They relationships between boss and employees, the Structure
were the ones who wrote the programs that ran structure of the job and the power of the boss -Inverted pyramid
the computers. Others maintain the computers and (Contingency Theory).

4
William H Whyte, The Organization Man
4
the information system that ran the company. People
Employees also began to use the computer to Controlling -Restructured global companies
gather information that their managers used to -quarterly financial results, -Outsourcing of businesses to other parts of the
feed them. They communicated with each other world where costs are lower
bypassing departmental and organizational -Generation Y
boundaries. These employees were the knowledge
workers. And unlike the tangible current and fixed -Leading thinkers: Bill Gates, Steve Jobs
assets of the company listed on the company’s
financial statement that stayed in the premises of
the company, these intangible assets were not
listed and they leave the premises of the company
every night when they go home. These were the
young, individualistic, freedom minded generation
called the Generation X. They lived through
corporate downsizing and were therefore more
cautious than the previous generation called the
Baby Boomers. They were said to be more
conscious about social responsibility, were less
materialistic and more interested in job satisfaction
than in sacrificing personal happiness and growth
for promotion. They chose where to work and
often times dictated how they should be managed.
When an employee walked away to join another
company, the asset of the company walked away
too. During that time organizations began to talk of
people as the greatest asset of the company and
began to design work that was more engaging and
motivating to the people to retain them
New Age Planning Systems:
- Flexible goals -Source of power shifted to consumers (markets of
-Customer are global lifestyle; behavioral, one)
Today, modern management is believed to have customized -Sell dreams
run its course because of the changes brought -Strategy: experiment; change the rules -Use of social network for marketing
about by deregulation that allowed the unimpeded -Information surplus - creative destruction, cheap is beautiful?
movement of goods across the globe and the -sell the intangible (romance not the plane ticket)
development in the information technology that Organizing -use competing channels
enabled the free flow of information to any parts of - no fixed organization, budget according to -customer co create (part of the product)
the world shrinking it into a global village and activities -24/7, fast, multi tasking
creating more transparency 5. There are products -customized reporting - Guiding political philosophy: Phenomenology
and services that could be produced or outsourced -Intangible assets (brand, people, customers) (objects are objects or experience rather than
more cheaply in other parts of the world for the independently existing entities… we interpret the
same quality. The supply chain was broken up or Leading world as we experience it… reality is relative and
de aggregated into specialized or separate - lead, empower, team sport subjective)?
functions and was produced or outsourced where -high people skills, high political skills
it made sense. This specialization in the global -Liberate the talent of customers, suppliers, and Structure
economy or in the global marketplace created what staff to discover and implement strategy -Networked organization
could be described as a global division of labor -Matrix organization,
increasing productivity across the global economy. Controlling -Outsourced services
But as a result, competition has increased and has -Instantaneous feedback -Hot desk; employees do not stay long enough
created a buyer’s market because of the availability -Organization by process
of supply coming from all over the globe.
Consumers now have a lot of alternatives, choose People
from a number of substitute products and select -Generation Z
those that can provide quality at the lowest price -Netizens
delivered at the speed that meet or exceeds their -Social networks
needs. And the information they need to make a
decision is instantly available online in the Internet
and the information does not necessarily come
from suppliers but from peers and even others
whom they may not have met personally but who
may have already tried the service or the product
almost rendering advertisements from companies
irrelevant. With more knowledge and growing
sophistication in selecting from many new

5
Thomas Friedman, The World Is Flat.
5
innovative products and services consumers can
now afford to become more discriminating and
could dictate what they want as individuals thereby
fragmenting the market further. The influence and
power has clearly shifted to the individual
consumers making some businessmen think
seriously that their real business is taking care of
customers that provide a stream of cash. The
consumers now dictate what they want and expect
to be satisfied.