Evolution of Management

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 As any other fields, management too has some
history.

 First Business and Management programmes were

offered by the Wharton School at the University of
Pennsylvania in 1881.(Bateman & al., 1990)

 Management concepts and techniques have existed

since ancient civilisations examples Sumerians,
Egyptians

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 The evolution of management dates from the year
1700s with Adam smith (Division of labour):
 Adam Smith, 18th century economist, found firms
manufactured pins in two ways:
 Craft- Each worker did all steps
 Factory –Each worker specialized in one step.
 Smith found that the factory method had much higher
productivity. Each worker became very skilled at one,
specific task.
 Breaking down the total job allowed for the division
of labour.

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 Different schools of management thoughts:
        Scientific Management
        Administrative Management
        Behavioural Management
        Management Science/Quantitative
approach/Operations research
approach/Management Information Systems
        Systems approach
        Contingency approach
        Theory Z
        TQM
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 1) Scientific approach to management
 Definition by Frederick Taylor:
 -The use of the scientific method to determine
the one best way for a job to be done.
 -The systematic study of the relationships
between people and tasks to redesign the work
for higher efficiency. Taylor sought to reduce the
time a worker spent on each task by optimizing
the way the task was done.
 Time and motion study
 Standardised tools, differential rate system and
breaks
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 Four principles to increase efficiency:
 1.    The development of a true science of management, so
that the best method for performing each task could be
determined. Study the way the job is performed now and
determine new ways to do it.
 2.    Codify the new method into rules. The selection of
workers so that each worker would be given responsibility
for the task for which he or she was best suited.
 3.    The scientific education and development of the
worker.
 4.    Intimate, friendly cooperation between management
and labour. Establish a fair level of performance and pay
for higher performance.
 Workers should benefit from higher output.
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 Taylor contended that the success of these
principles required a complete mental revolution
on the part of management and labour. Rather
than quarrel over profits, both sides should try to
increase production; by so doing, he believed,
profits would rise to such an extent that labour
and management would no longer have to fight
over them. In short, Taylor believed that
management and labour had a common interest
in increasing productivity.

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 -Managers often implemented only the increased
output side of Taylor’s plan.
  -They did not allow workers to share in
increased output.
-Specialised jobs became very boring, dull.
-Workers ended up distrusting scientific
management.
 -Workers could purposely “under-perform”

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 The Gilbreths
 Frank and Lillian Gilbreth refined taylor’s
methods.
 -Made many improvements to time and motion
studies.
 Time and motion studies:
 1.    Break down each action into components
 2.    Find better ways to perform it
 3.    Reorganise each action to be more efficient
 Gilbreths also studied fatigue problems, lighting,
heating and other work issues.

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 Seeks to create an organization that leads to both
efficiency and effectiveness.
 Max Weber developed the concept of
bureaucracy.
 A formal system of organization and
administration to ensure effectiveness and
efficiency.
 -Max Weber (1864–1920) developed a theory of
bureaucratic management that stressed the
need for a strictly defined hierarchy governed by
clearly defined regulations and line of authority.
 He considered the ideal organization to a
bureaucracy whose activities and objectives were
rationally thought out and whose divisions of
labour were explicitly spelled out. 10
A bureaucracy should have:
     Written rules – Rules, Standard operating
procedures and norms are used to determine
how the firm operates
      Hierarchy of authority & Division of
labour– Authority is the power to hold people
accountable for their actions. Lines of
authority should be clearly identified.
Workers know who reports to whom.
       Fair evaluation and reward
 System of task relationships/Impersonality –
Positions in the firm should be held based on
performance not social contacts
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 Henri Fayol (1841-1925) is generally hailed as
the founder of the classical management school–
not because he was the first to investigate
managerial behaviour but because he was the
first to systematize it.
 While, Taylor was basically concerned with
organizational functions (work done in the
organisation), however, Fayol focused on
management, which he felt had been the most
neglected of business operations.

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1. Division of Labour- The more people specialize, the more
efficiently they can perform their work.
2. Authority- Managers must give orders so that they can get
things done. While their formal authority gives them the right
to command, managers will not always compel obedience
unless they have personal authority such as relevant
expertise as well.
3. Discipline- Members in an organization need to respect the
rules and agreements that govern the organization. To Fayol,
discipline results from good leadership at all levels of the
organization, fair agreements such as provisions for
rewarding superior performance, and judiciously enforced
penalties for infractions.

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4. Unity of Command- Each employee must receive instructions
from only one person. Fayol believed that when an
employee reported to more than one manager, conflicts in
instructions and confusion of authority would result.
5. Unity of Direction- Only one manager using one plan should
direct those operations within the organization that have the
same objective. For example, the personnel department in a
company should not have two directors, each with a
different hiring policy.
6. General interest over Individual Interest- In any
undertaking, the interests of employees should not take
precedence over the interests of the organization as a whole.

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7. Remuneration- Compensation for work done should
be fair to both employees and employers

8. Centralization- Decreasing the role of subordinates in

decision-making is centralization: increasing their
role is decentralization. Fayol believed that
managers should retain final responsibility, but
should at the same time give their subordinates
enough authority to do their jobs properly. The
problem is to find the proper degree of
centralization in each case.

9.The Hierarchy- The line of authority is a clear chain

that runs from top management to the lowest level of
the enterprise.
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10.Order- Materials and people should be in the
right place at the right time.
11.Equity- Managers should be both friendly and
fair to their subordinates.
12.Stability of Staff- A high employee turnover
rate undermines the efficient functioning of
an organization. Long-term employment is
important.
13.Initiative- Encourage innovation.
Subordinates should be given the freedom to
conceive and carry out their plans, even
though some mistakes may result.
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14.Esprit de Corps- Promoting team spirit will give
the organization a sense of unity. He suggested,
for example, the use of verbal communication
instead of formal, written communication
whenever possible.
Fayol most frequently had to apply above 14
principles of management. Before Fayol, it was
generally believed that managers are born, not
made, Fayol insisted, however, that management
was a skill like any other one that could be taught
once its underlying principles were understood.

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 The behavioural school emerged partly because
the classical approach did not achieve sufficient
production, efficiency and workplace harmony.
To managers frustration, people did not always
follow predicted or expected patterns of
behaviour. Thus there was increased interest in
helping managers’ deal more effectively with the
people side of their organizations. Several
theorists tried to strengthen classical
organization theory with the insights of sociology
and psychology.

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 The most important contribution to the
developing OB field came out of the Hawthorne
studies, a series of studies conducted at the
Western Electric Company Works.
 These studies, started in 1924 and continued
through the early 1930s, were initially designed
by Western Electric industrial engineers as a
scientific management experiment. They wanted
to examine the effect of various illumination
levels on worker productivity.
 But to the surprise of the engineers, light
intensity was not directly related to worker
productivity
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 Human Relations Movement
 Abraham Maslow’s Hierarchy of Needs (psycological,
 safety, social, esteem, self-actualisation)

 McGregor’s Theory X and Y

 The Behavioural Science Approach

 (economics, psychology, sociology, mathematics)

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 In 1927, the Western Electric engineers asked
Harvard professor Elton Mayo and his associates to
join the study as consultants.
 - A series of studies was then carried out that
provided new insights in individual and group
behaviour. A number of variables were changed and
outcomes on productivity were noted.
 The Hawthorne studies of Elton Mayo and his
associates of the Harvard Business School
emphasized the social and behavioural aspects in
work situation. The attention of managers was
drawn to the fact that, among all the resources that
were available to organizations, human resources
constituted a key resource in the successful
management of organisaiotns.

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 What are the contributions and limitations each
of the different theories of the classical school of
thought?
 Why did Taylor find it necessary to introduce a
scientific approach to management?

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 Uses rigorous quantitative techniques to
maximize resources and improve decision-
making.
 This approach to management involves
applications of statistics, optimization models,
and computer simulations to management
activities.
 Quantitative management utilizes linear
programming, modeling, and simulation systems.
 Linear programming, for instance is a technique
that mangers use to improve resource allocation
decisions.

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 The Systems Approach is a simplified method to
optimize efficiency choices. It considers
relationships inside and outside the organization.
 The systems theory considers the impact of
stages, i.e,
 Input --------conversion----------output
 Managers need to consider the organization as a
whole because all segments are interrelated in
one way or another.

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 The well-known international economist Charles Kindleberger was
fond of telling his students at MIT that the answer to any really
engrossing question in economics is ‘It depends’. The task of the
economist, Kindleberger would continue, is to specify upon what it
depends, and in what ways.
 The contingency approach (sometimes called the situational
approach) was developed by managers, consultants and researchers
who tried to apply the concepts of the major schools to real life
situations. When methods highly effective in one situation failed to
work in other situations, they sought an explanation. Why for
example, did an organizational development program work
brilliantly in one situation and fail miserably in another. Advocates
of the contingency approach had a logical answer to all such
questions. Results differ because situations differ a technique that
works in one case will not necessarily work in all cases.

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 Entering an era of Dynamic Engagement
 1.    New organizational environments
 2.    Ethics and responsibility
 3.    Globalisation and management
 4.    Inventing and reinventing organization
 5.    Cultures and Multiculturalism
 6.    Quality - TQM

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