Chapter Two

Development of Management
Thoughts
 1. Factors Shaping Management Thought
Management thought has been shaped over a
period of centuries by three major sets of forces:
1) Social forces
 Refer to those aspects of a culture that guide and
influence relationships among people.
2) Political forces
 political and legal institutions influence on people and
organizations
3) Economic forces
 Pertain to the availability, production and distribution
of resources in a society.
 2. Management Perspectives over Time
1) Early approaches to management
2) Classical Perspective
– Scientific Management
– Bureaucratic Organization
– Administrative Principles
2) Humanistic Perspective
– Human Relations Movement
– Human Resources Perspective
– Behavioral Sciences Approach
3) Modern Management Science Perspective
 Systems Theory
 Contingency View
 Total Quality Management
 The Learning Organization
 2.1 Early Approaches to Management
Name Period Contribution
Robert Owen 1771-1858 Proposed legislative reforms to
improve working conditions of labor
Charles 1792-1871 Advocated the concept or ‘division
Babbage of labor’
Adam Smith - Specialization could lead to
increased efficiency.
Andrew Ure 1778-1857 Advocated the study of
management
Charles Dupin 1784-1873
Henry R.Towne 1844-1924 Emphasized the need to consider
management as separated field of
study and the importance of
business skills for running a
business.
 2.2 MAJOR CLASSIFICATION OF
MANAGEMENT APPROACHES
CLASSICAL SCIENTIFIC BUREAUCRATIC ADMINISTRATIV
APPROACH MANAGEMENT MANAGEMENT E
MANAGEMENT

BEHAVIORAL HAWTHORNE MASLOW’S THEORY X AND

APPROACH STUDIES NEED THEORY Y
HIERARCHY

QUANTITATIVE MANAGEMENT OPERATIONS MANAGEMENT

APPROACH SCIENCE MANAGEMENT INFORMATION
SYSTEM

MODERN THE SYSTEMS CONTINGENCY EMERGING

APPROACH THEORY THEORY APPROACHES
 I. Classical Perspective
• The earliest study of management
• Emerged during the nineteenth and early
twentieth centuries
• Contains 3 subfields, each with a slightly
different emphasis:
1) Scientific management
2) Bureaucratic organizations
3) Administrative principles
 1. Scientific Management
• Scientific Management: emphasized the
scientific study of work methods to improve
the productivity of individual workers.
• The chief proponents were:
Frederick W. Taylor, Frank and Lillian
Gilbreth and Henry L. Gant
A) Frederick W. Taylor
• The ―father‖ of scientific management
• 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 Today
• How Do Today‘s Managers Use Scientific
Management?
– Use time and motion studies to increase
productivity
– Hire the best qualified employees
– Design incentive systems based on output
 B) Frank and Lillian Gilbreth
 1868-1924
 Motion study involves finding out the best
sequence and minimum number of motions
needed to complete a task.
 Explore new ways for eliminating
unnecessary motions and reducing work
fatigue.
 C. Henry L. Gant (1861-1919)
 Well known for Task – and - bonus system
-The Gantt chart
 If the worker completed the work fast, i.e.,
in less than the standard time, he received a
bonus.
 It is a Simple chart that compares actual
and planned performances
Characteristic of Scientific Management

• General Approach
– Developed standard method for performing each
job
– Selected workers with appropriate abilities for
each job
– Trained workers in standards methods
– Supported workers by planning their work and
eliminating interruptions
– Provide wage incentives to workers for increased
output.
Contributions
Demonstrated the importance of compensation
for performance
Initiated the careful study of tasks and jobs
Demonstrated the importance of personnel
selection and training
Criticism
Did not appreciate the social context of work
and higher needs of workers
Did not acknowledge variance among
individuals
Tended to regard workers as uninformed and
ignored their ideas and suggestions
 2) Bureaucratic Organizations
• To Weber, a bureaucracy was a rational, efficient
ideal organization based on principles of logic—he
felt good organizations should have six bureaucratic
features:
1. Positions organized in a hierarchy of authority
2. Managers subject to rules and procedures that will ensure
reliable predictable behavior
3. Management separate from the ownership of organization
4. Administrative acts and decisions recorded in writing
5. Personnel selected and promoted based on technical
qualifications
6. Division of labor, with clear definitions of authority and
responsibility.
 3) Administrative Management
• Administrative Management: concerned
with managing the total organization
• Among the pioneering theorists were
Henry Fayol & Max Weber
 A) Henry Fayol and Functions of Management
• Henry Fayol was the first to systematize management behavior – he was the
first to identify the major functions of management: planning, organizing,
leading, controlling, as well as coordinating and commanding.
• Management philosophy:
• Unity of command – Each subordinate receives orders from one – and
only one – superior
• Division of work – Managerial and technical work are amenable to
specialization to produce more and better work with the same amount of
effort.
• Unity of Direction – Similar activities in an organization should be
grouped together under one manager.
• Scalar chain – A chain of authority extends from the top to the bottom of
the organization and should include every employee.
 Cont‘d
• Authority.-The right to issue commands, along with which
must go the balanced responsibility for its function.
• Discipline- Employees must obey, but this is two-sided:
employees will only obey orders if management play their
part by providing good leadership.
• Subordination of individual interest (to the general interest)-
Management must see that the goals of the firms are always
paramount.
• Remuneration- Payment is an important motivator although
by analyzing a number of possibilities, Fayol points out that
there is no such thing as a perfect system.
• Centralization (or Decentralization).-This is a matter of
degree depending on the condition of the business and the
quality of its personnel.
 Cont‘d
• Order- Both material order and social order are
necessary. The former minimizes lost time and useless
handling of materials. The latter is achieved through
organization and selection.
• Equity- In running a business a ‗combination of
kindliness and justice‘ is needed. Treating employees
well is important to achieve equity.
• Stability of Tenure of Personnel- Employees work better
if job security and career progress are assured to them.
An insecure tenure and a high rate of employee turnover
will affect the organization adversely.
• Initiative- Allowing all personnel to show their initiative
in some way is a source of strength for the organization.
Even though it may well involve a sacrifice of ‗personal
vanity/pride‘ on the part of many managers.
 Cont‘d
• Esprit de Corps- The gist of this principle is that
' in union there is strength.' Hence, workers,
management as well as employers should work
as a team. It is the responsibility of
management to promote the spirit of
cooperation rather than the spirit of divide and
conquer.
Limitations of Bureaucratic Management
and Administrative Theory
 Not universally applicable to today‘s
complex organizations.
 Fayol‘s principles like that of specialization
were frequently in conflict with the principle
of unity of command.
 Principle/characteristic of bureaucracy
changes in the global environment.
 Classical theorists ignored the problems of
leadership, motivation, power or information
relations.
 II. Behavioral Approach
• The behavioral approach to management
emphasized individual attitudes and behaviors
and group processes, and recognized the
significance of behavioral process in the
workplace.
1) The Human Relations Movement
• Proposed that better human relations could
increase worker productivity.
• One of the earliest to study motivation, Maslow
proposed his ―hierarchy of human needs‖ in 1943
2) Human Resources Perspective
• Maintained an interest in worker participation
and considerate leadership but shifted the
emphasis to consider the daily tasks that people
perform.
• Combines prescriptions for design of job tasks
with theories of motivation.
• This will allow workers to use their full potential
 Contributions of Behavioral
Thinkers to Management Thought
Name Period Contribution
Mary Parker 1868- Advocated the concept of ‘power
Follet 1933 sharing’ and integration
Elton Mayo 1868- foundation for the Human Relations
1933 Movement;
Abraham 1908 – motivated by a hierarchy of needs
Maslow 1970
Douglas 1906- Theory X and Theory Y personalities
McGregor 1964
Chris Argyris - Classified organizations based on
the employees’ set of values
 A) Mary Parker Follet (1868-1933)
 Power, according to Follet, was the ability to
influence and bring about a change.
 Concept of integration, which involves
finding a solution acceptable to all group
members
 B) Elton Mayo (1868-1933)
Pre-judgment Findings
Job performance The group is the key factor
depends on the in job performance
individual worker
Fatigue is the main Perceived meaning and
factor affecting importance of the work
output. determining output.
Management sets Workplace culture sets its
production standards own production standards.
 C. Abraham Maslow
His theory rested on these assumptions.
 Physiological needs;
 Safety or security needs
 Belongingness or social needs;
 Esteem or status needs
 Self actualization or self-fulfillment needs.
Maslow‘s Hierarchy of Needs
 D. Chris Argyris
 Maturity – immaturity theory
People progress from a stage of immaturity and
dependence to a state of maturity and
independence.
Model I and Model II organization analysis.
1. Model I organization are manipulative
2. Model II organization are open to learning
 3. Behavioral Science Approach
 Behavioral Science relies on scientific
research for developing theories about human
behavior that can be used to provide practical
tools for managers.
Behavioral Science draws from sociology,
psychology, anthropology, economics and
other disciplines to understand employee
behavior and interaction in an organizational
setting.
 The Human Relations Movement: Douglas McGregor
& Theory X versus Theory Y
Theory Y Theory Y
• Pessimistic negative view
towards workers • Optimistic positive view of
workers: human relations
• Workers are irresponsible proponents‘ view
• Workers are resistant to • Workers are capable of
change accepting responsibility
• Workers lack ambition, • Workers are capable of self-
hate to work direction
• Workers would rather be • Workers are capable of self-
led than lead control
• Workers are capable of being
imaginative and creative
 III. Quantitative Approach
 It includes the application of statistics,
optimization models, information models and
computer simulations. More specifically, this
approach focuses on achieving organizational
effectiveness.
 Three main branches:
 Management Science
 Operations Management and
 Management Information Systems
1. Management Science Perspective
• Management Science focuses on using
mathematics to aid in problem solving and
decision making.
• Suitable for large scale business firms.
• Example: forecasting, inventory modeling,
linear and nonlinear programming, scheduling
and break-even analysis
 2. Operations Management
• It deals with the effective management of the
production process and the timely delivery of
an organization‘s products and services.
3. Management Information Systems
• Management information systems focuses on
designing and implementing computer-based
information systems for business
organizations.
 IV. Modern approaches
• There are 2 recent trends that grew out of the
humanistic perspective:
1) Systems Theory
2)Contingency View
 1.The Systems Theory
The Systems Theory regards the organization
as a system of interrelated parts
By adopting this perspective you can look at
your organization in two ways
1. A collection of subsystems—parts making up
the whole system
2. A part of the larger environment
 2. The Contingency View
• The Contingency View emphasizes that a manager‘s
approach should vary according to—that is, be contingent
on—the individual and the environmental situation
• Also sometimes called the situational approach.
• There is no one universally applicable set of management
principles (rules) by which to manage organizations.
• Organizations are individually different, face different
situations (contingency variables), and require different
ways of managing.
V. Emerging Approaches In Management Thought

 William Ouchi, outlined new theory called

Theory Z.
 It is the blend of positive aspects of both
American and Japanese management styles.
 Quality Management is a management
approach that directs the efforts of
management towards bringing about
continuous improvement in product and
service quality to achieve higher levels of
customer satisfaction and build customer
loyalty.
Any Questions?