MANAGEMENT

Evolution of Management

Eszter Daruka
Teaching Assistant
BUTE Department of Management and Corporate Economics
2015
Fall
Outline

The Evolution of Management

The Classical Management Perspective
The Behavioural Management Perspective
The Quantitative Management Perspective
Integrating the major perspectives
Contemporary Management Challenges
Summary
Case study
Evolution of Management

McGraw-Hill
Companies, Inc.
Early Management
Concepts And Influences
Industrial revolution
minor improvements in management tactics produced impressive
increases in production quantity and quality
economies of scale - reductions in the average cost of a unit of
production as the total volume produced increases
opportunities for mass production created by the industrial
revolution spawned intense and systematic thought about
management problems and issues
efficiency
production processes
cost savings
Early Management Pioneers

Robert Owen (17711858)

British industrialist who was one of the first
managers to recognize the importance of human
resources and the welfare of workers.
Charles Babbage (17921871)
English mathematician who focused on creating
efficiencies of production through the division of
labour, and the application of mathematics
to management problems.
1. Classical Management
Perspective
Scientific Management
Concerned with improving the performance of individual
workers (i.e., efficiency).
Grew out of the industrial revolutions labour shortage at
the beginning of the twentieth century.
Classical Organization Theory (Administrative
Management)
A theory that focuses on managing the total organization
rather than individuals.
Scientific Management
Advocated the application of scientific methods to analyze
work and to determine how to complete production tasks
efficiently
Four principles
develop a scientific approach for each element of ones work
scientifically select, train, teach and develop each worker
cooperate with workers to ensure that jobs match plans and
principles
ensure appropriate division of labour
Personalities: Frederick W. Taylor, Frank and Lillian Gilbreth,
Henry Gantt, Harrington Emerson
Scientific Management

Frederick Taylor (18561915)

Replaced old methods of how to do work with
scientifically-based work methods.

Eliminated soldiering, where employees deliberately worked at a pace

slower than their capabilities.

Believed in selecting, training, teaching, and developing

workers.
Used time studies of jobs, standards planning, exception
rule of management, slide-rules, instruction cards, and
piece-work pay systems to control and motivate
employees.
Steps in Scientific Management

Develop a science for each element of the job to

replace old rule-of-thumb methods.
Scientifically select employees and then train them to
do the job as described in step 1.
Supervise employees to make sure they follow the
prescribed methods for performing their jobs.
Continue to plan the work, but use workers to actually
get the work done.
1.1. Scientific Management
Pioneers
Frank and Lillian Gilbreth
Both developed techniques and strategies for
eliminating inefficiency.
Frank reduced the number of movements in bricklaying,
resulting in increased output of 200%.
Lillian made substantive contributions to the fields of
industrial psychology and personnel management.
1.1. Scientific Management
Pioneers
Henry Gantt
1.1. Scientific Management
Pioneers
Henry Ford
Classical Organization Theory
Emphasized the perspective of senior managers
Five management functions: planning, organizing,
commanding, coordinating, controlling
Fourteen principles of management
Focuses on managing the whole organization rather
than individuals.
Personalities: Henri Fayol, Max Weber , Lyndall Urwick,
Chester Barnard
Classical Organization Theory
Henri Fayol (18411925)
Was first to identify the specific management functions of
planning, organizing, leading, and controlling.
Max Weber (18641920)
His theory of bureaucracy is based on a rational set of
guidelines for structuring organizations.
Lyndall Urwick (18911983)
 Integrated the work of previous management theorists.
Fayols 14
principles of
Management
al
division d,
interes
of labour, unity of
ts to
authority, directio
the
n,
discipline, genera
subordin l
unity of ation of interes
comman individu t,
remunera order, initiati
tion, equity, ve,

centraliza stability and

tion, of espirit
tenure de
scalar of corps
chain, personn (moral
el, e)
Max Webers Bureaucracy
Bureaucratic structures can eliminate the
variability that results when managers in the
same organization have different skills,
experiences, and goals
Allows large organizations to perform the many
routine activities necessary for their survival
People should be treated in unbiased manner
1. Classical Management
Perspective
Contributions Limitations
inquiry. organizatio
Laid the foundation for
ns.
later developments.
More
Prescribed
Identified important appropria
universal
management processes, te
procedures
functions, and skills. approach
that are
for use in
Focused attention on not
traditiona
management as a valid appropriat
l, stable,
subject of scientific e in some
simple
settings. tools than as
rather resources.
Employees are viewed as
2. Behavioural Management
Perspective
Emphasized individual attitudes and behaviours, and
group processes, and recognized the importance of
behavioural processes in the workplace.
The Hawthorne Studies (19271932)
Human Relations Movement
2. Behavioural Management
Perspective
Hugo Munsterberg (18631916)
A German psychologist, the father of industrial
psychology, who advocated applying psychological
concepts to employees selection and motivation
industrial settings.
Mary Parker Follett (18681933)
Recognized the importance of the role of human
behaviour in the workplace.
2.1. The Hawthorne Studies
(19271932)
Conducted by Elton Mayo and associates at Western
Electric
Illumination studyworkplace lighting adjustments affected
both the control and the experimental groups of production
employees.
Group studyimplementation of piecework incentive plan
caused production workers to establish informal levels of
acceptable individual output.
Over-producing workers were labeled rate busters and under- producing
workers were considered chiselers.

Interview programconfirmed the importance of human

behaviour in the workplace.
Bank Wiring Observation Room Program 14 workers were
formed into a work group and observed for 7 months
2.2. Human Relations Movement
Grew out of the Hawthorne studies - workers perform and react
differently when researchers observe them
Proposed that workers respond primarily to the social context of
work, including social conditioning, group norms, and interpersonal
dynamics.
Assumed that the managers concern for workers would lead to
increased worker satisfaction and improved worker performance.
Aimed to understand how psychological and social processes interact
with the work situation to influence performance
Argued that managers should stress primarily employee welfare,
motivation, and communication
Personalities: Abraham Maslow, Douglas McGregor
Human Relations Movement
Abraham Maslow (1908-1970)
Advanced a theory that employees are motivated by
a hierarchy of needs that they seek to satisfy.

Douglas McGregor (1906-1964)

Proposed Theory X and Theory Y concepts of
managerial beliefs about people
and work.
Theory X and Theory Y
Theory X Assumptions
People do not like work and try to avoid it.
People do not like work, so managers have to
control, direct, coerce, and threaten employees to get
them to work toward organizational goals.
People prefer to be directed, to avoid responsibility,
and to want security; they have little ambition.
Theory X and Theory Y
Theory Y Assumptions
People do not dislike work; work is a natural part of their
lives.
People are internally motivated to reach objectives to
which they are committed.
People are committed to goals to the degree that they
receive rewards when they reach their objectives.
People seek both seek and accept responsibility under
favorable conditions.
 People can be innovative in solving problems.
People are bright, but under most organizational
conditions their potentials are underutilized.
2. Behavioural Management
Perspective
Contributions Limitations
employees behaviour
Provided important insights
are difficult to
into motivation, group dynamics,
valuable predict.
and other interpersonal
resources.
processes. Many
concepts
Focused managerial attention
not put to
on these critical processes.
Complexit use
Challenged the view that y of because
employees are tools and individuals managers
furthered the belief that makes are
reluctant to adopt them. communic in an
ated to understan
Contemporary research
practicing dable
findings are not often
managers form.
3. Quantitative Management
Perspective

Emerged during World War II to help the Allied forces

manage logistical problems.
Focuses on decision making, economic effectiveness,
mathematical models, and the use of computers to solve
quantitative problems.
Teams of quantitative experts tackle complex issues facing
large organizations
Helps management make a decision by developing formal
mathematical models of the problem
Personalities: military planners in World War II
3. Quantitative Management
Perspective
Management Science
Focuses on the development of representative
mathematical models to assist with decisions.
Linear Programming, Game Theory, Sampling Theory,
Probability Theory, Simuation, etc.
Operations Management
Practical application of management science to efficiently
manage the production and distribution
of products and services.
Quality Contol, Total Quality Management, Just In Time
Technique, Six Sigma, etc.
Scientific Management

Management Science
3. Quantitative Management
Perspective
Contributions Limitations
behaviour
Developed sophisticated Quantita of people
quantitative techniques to assist in
tive in
decision making.
manage organizatio
Application of models has ment ns.
increased our awareness and cannot
fully
understanding of complex
Mathemati
processes and situations. explain
cal
or
Has been useful in the planning predict sophisticati
and controlling processes. on may
the
come at
the expense of other managerial assumpti general
skills. ons, applicabilit
y
Quantitative models may require limiting
their
unrealistic or unfounded
4. Integrating the major
perspectives
The Systems Approach
A system is an interrelated set of elements functioning as a
whole.
The Contingency Approach
Appropriate managerial behavior in a given situation depends
on (or is contingent on) a wide variety of elements.
4.1. The Systems Approach
The Contingency Approach
Universal Perspective
Include the classical, behavioural, and quantitative
approaches.
An attempt to identify the one best way to manage
organizations.
The Contingency Perspective
Suggests that each organization is unique.
The appropriate managerial behaviour for managing an
organization depends
(is contingent) on the current situation in the organization.
5. Contemporary Management
Issues and Challenges
Acute labour shortages in high-technology job sectors and an
oversupply of less skilled labour
An increasingly diverse and globalized workforce
The need to create challenging, motivating, and flexible work
environments
The effects of information technology on how people work
The complex array of new ways of structuring organizations
Increasing globalization of product and service markets
The renewed importance of ethics and social responsibility
The use of quality as the basis for competition
The shift to a predominately service-based economy
Summary
Scientific Management
Key Concepts
Used scientific methods to determine the one best way
Emphasized study of tasks, selection and training of workers, and
cooperation between workers and management

Contributions
Improved factory productivity and efficiency Introduced scientific analysis to
the workplace

Piecerate system equated worker rewards and performance

Limitations
Simplistic motivational assumptions Workers viewed as parts of a machine
Potential for exploitation of labour Excluded senior management tasks
Summary
Classical Organization Theory
(Administrative Management)
Key Concepts
Fayols five functions and 14 principles of management
Executives formulate the organizations purpose, secure employees, and maintain
communications
Managers must respond to changing developments

Contributions
Viewed management as a profession that can be trained and developed
Emphasized the broad policy aspects of top-level managers
Offered universal managerial prescriptions
 Limitations
personnel factors
Universal prescriptions need qualifications
for environmental, technological, and
Summary Bureaucracy
Key Concepts
Structured network of relationships among specialized positions Rules and
regulations standardize behaviour
Jobs staffed by trained specialists who follow rules Hierarchy defines the
relationship among jobs

Contributions
Promotes efficient performance of routine operations Eliminates
subjective judgment by employees and management Emphasizes position
rather than the person

Limitations
Limited organizational flexibility and slowed decision making Ignores the
importance of people and interpersonal relationships Rules may become
ends in themselves
Summary Human Relations
Key Concepts
Productivity and employee behaviour are influenced by the informal work group
Cohesion, status, and group norms determine output Social needs have precedence
over economic needs

Contributions
Psychological and social processes influence performance
Maslows hierarchy of need

Limitations
Ignored workers rational side and the formal organizations contributions to
productivity
Research overturned the simplistic belief that happy workers are more productive
Summary
Quantitative Management
Key Concepts
Application of quantitative analysis to management decisions

Contributions
Developed specific mathematical methods of problem analysis Helped managers
select the best alternative among a set

Limitations
Models neglect nonquantifiable factors
Managers not trained in these techniques may not trust or understand the
techniques outcomes
Not suited for nonroutine or unpredictable management decisions
Summary Systems Approach
Key Concepts
Organization is viewed as a managed system Management must interact with the
environment

Organizational goals must address effectiveness and efficiency Organizations

contain a series of subsystems
There are many avenues to the same outcome
Synergies enable the whole to be more than the sum of the parts

Contributions
Recognized the importance of the relationship between the organization and the
environment

Limitations
functions of managers
Does not provide specific guidance on the
Summary
Contingency Approach
Key Concepts
Situational contingencies influence the strategies, structures, and processes that
result in high performance
There is more than one way to reach a goal
Managers may adapt their organizations to the situation

Contributions
Identified major contingencies
Argued against universal principles of management

Limitations
 Theory may not be applicable to
Not all important contingencies have been identifiedall managerial issues
Questions to consider

Present the main issues, contributions and limitations of

scientific management / classical organization theory /
bureaucracy / Human Relations / quantitative management /
contingency approach!
Explain Taylors results in scientific management!
Discuss the contribution and results of Hawthorne Studies!
Present McGregors XY theory!
Thank you for your attention!

[email protected]
Sources:
Griffin: Management
www.elendil.cayuga-cc.edu/kyle/bus200/ppt01.ppt
www.martsolf.com/downloads/BandSAppA.ppt
www.enotes.com/management-encyclopedia/pioneers-management