Chapter 2:

Emergence and Development of

management Thought

St. Marys University, School of

Graduate Studies

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 LEARNING OBJECTIVES

After completing this chapter, you should be

able to:
Describe some early management practices.
Explain the various theories in the classical
approach.
Discuss the development and uses of the
behavioral approach.
Describe the quantitative approach.
Explain the various theories in the
contemporary approach.
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 Introduction (1)

In this chapter, were going to take a trip back

in time to see how management has evolved
as a field of study.
What youre going to see is that todays
managers still use many elements of the
historical approaches to management.

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 Introduction . (2)

Knowledge of the past management history

offers insight in to how managerial theories and
practice have evolved.
Management has been practiced a long time ago.
Organized endeavors directed by people
responsible for planning, organizing, leading, and
controlling activities have existed for thousands
of years.

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 Introduction ..

However, management thought has been

shaped over a period of centuries by three
major sets of forces: Social, economical and
political in nature, and they continue to affect
management theory even today.

Lets look at some of the most interesting

examples.

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A. Early management Practices

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 1. The construction of Egyptian pyramids

The Egyptian pyramids and the Great Wall of China are

proof that projects of tremendous scope, employing tens of
thousands of people, were completed in ancient times.
It took more than 100,000 workers some 20 years to
construct a single pyramid. It took place on 13 hectares of
land using 2,300,000 stones.
Who told each worker what to do? Who ensured that there
would be enough stones at the site to keep workers busy?
The answer is managers.
Someone had to plan what was to be done, organize
people and materials to do it, make sure those workers got
the work done, and impose some controls to ensure that
everything was done as planned.

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 2. Industrial Revolution
Industrial revolution started in the late 18th century when
machine power was substituted for human power
It became more economical to manufacture goods in
factories rather than at home- mass production started.
These large efficient factories needed someone to forecast
demand, ensure that enough material was on hand to
make products, assign tasks to people, direct daily
activities, and so forth.
That someone was a manager: These managers would
need formal theories to guide them in running these large
organizations.
It wasnt until the early 1900s, however, that the first steps
toward developing such theories were taken.

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 3. Romans
Romans - the ancient Romans also provided numerous illustrations
of effective management.
Perhaps the most famous is Emperor Diocletian's reorganization of
his empire.
Assuming his position in A.D. 284, abandoned the old structure, in
which all provincial governors reported directly to him, he
established more levels in the hierarchy. He reorganized the
Roman Empire as: into 100 provinces with 13 dioceses and 4 major
geographical areas. By doing so he ruled Rome to its best time.
The governors were pushed farther down the structure and, with
the help of other administrators; the emperor was able to more
effectively manage this vast empire.
After he divided Rome as such, he appointed 3 people on the
divisions and the rest for himself - Delegation of authority.

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 5. Roman Catholic Church
Roman Catholic Church - was the most successful
formal institution in the western civilization. Rome
achieved greater colonies using the Catholic Church.
In short, the contributions of Roman Catholic Church
for the development of management are on the areas
of:
Hierarchy of authority: there was a hierarchical structure
from Pope - Bishop - priest - laity.
Specialization of activities: there was a training to be Pope,
Bishop, Priest and Laity.
Use of staff managers
Compulsory staff service
Staff independence

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 7. Ethiopia

The construction of Axum obelisks, Castle of

Gondar, Rockhewen Churches of Lalibela, the Wall
of Harrar etc. are good examples that
demonstrate the practice of management in
ancient times in Ethiopia.

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2. Pre- classical contributors (Pioneer
contributors)
A number of individuals in the pre-classical
period of the middle and late 1800s began to
offer ideas that laid the groundwork for broader
inquiries into the nature of management that
followed.
Among the principal pre-classical contributors
are:
1. Robert Owen,
2. Charles Babbage
3. Adam Smith, and others.
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 Robert Owen (1771 - 1858)
was a British industrialist and owner-manager of several successful
cotton mills in Scotland.
Problems at that period: poor working and living conditions for
employees, child workers were common and the standard working day
was 13 hrs long. Workers were treated in much the same terms as tools
and machines.
Owen was one of the first managers to recognize the importance of
human resource in an organization. As a result he was considered as
father of modern personnel management.
He introduced In his organization the following:
Reduced working hrs from 13 hrs to 10 and half hrs a day,
Set a minimum hiring age (10 year) to protect children from the
abuses of employers,
Provided meal, housing, and shopping facilities for employees,
Improved working conditions in the factory
He argued, "Improving the condition of employees would inevitably
lead to increased production and profits".
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 Charles Babbage (1792 1871)
English mathematician and invented the first
mathematical calculator
Stressed the importance of division of labour on
the basis of skills.
Emphasized the necessity of replacing manual
operations by machines.
Developed modern profit-sharing plan with
bonuses for useful suggestions
He laid down the ground for the development
of modern computer.
He laid down the foundation for the
formulation of scientific management. 14
 Adam Smith
Smith made an important contribution to the development of
management by introducing the concept of division of labor or
specialization in his book The Wealth of Nations
He argued that specialization (that is, breaking down jobs into
narrow and repetitive tasks) could lead to increased efficiency
and productivity. This is because:
Specialization increases the dexterity in every particular
work person.
Specialization helps to the invention of great number of
machines.

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B. Classical Management
Theories

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 3. Classical approach
Although weve seen how management has been used
in organized efforts since early history, the formal
study of management didnt begin until early in the
twentieth century.
The first study of management, often called the
classical approach, emphasized on economic
rationality of employees and making organizations
and workers as efficient as possible.
Three major theories comprise the classical approach:
1. Scientific management theory (Frederick W. Taylor,
Frank and Lillian Gilbreth, Henry Gantt)
2. Administrative management theory (Henri Fayol)
3. Bureaucratic management theory (Max Weber)

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 3.1. Scientific Management Theory
Frederic W. Taylor was the first and major contributor of scientific
management. He has been called the father of scientific
management".
Other contributors are the husband-wife team of Frank and Lillian
Gilbreth, and Henry Gantt.
Frederick W. Taylor published the Principles of Scientific
Management in 1911 and modern management theory was born
Taylor worked at the Midvale and Bethlehem Steel Companies
He was a mechanical engineer by profession
Problems he has observed: Employees used vastly different
techniques to do the same job; Workers output was only about
one-third of what was possible (workers inefficiencies). Virtually
no work standards existed and workers were placed in jobs with
little or no concern for matching their abilities and aptitudes with
the tasks they were required to do.

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 Contd.
To overcome these problems, Taylor developed the
scientific method to shop-floor jobs.
Introduced the one best way for such jobs to be
done.
Proposed a Piece Rate System:
set the standard for job (used Time and Motion
studies)
Pay workers for meeting/exceeding standard
Pay individual worker not every one ,or
group/department, or the job = pay according to
individual value to business

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 Taylors Scientific mgt principles
1. Develop a science for each element of an
individuals work to replace the old rule-of
thumb method.
2. Development of each man to his greater
efficiency and prosperity: Scientifically
select and then train, teach, and develop
the worker.
3. Heartily cooperate with the workers so as
to ensure that all work is done in
accordance with the principles of the
science that has been developed.
4. Divide work and responsibility almost
equally between management and
workers. Management does all work for
which it is better suited than the workers.
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 Example
Taylors experiences at Midvale led him to define clear guidelines for
improving production efficiency. He argued that these four principles of
scientific management would result in prosperity for both workers and
managers. How did these scientific principles really work? Lets look at an
example.
Probably the best known example of Taylors scientific management efforts was
the pig iron experiment. Workers loaded pigs of iron (each weighing 92 lbs.)
onto rail cars. Their daily average output was 12.5 tons. However, Taylor
believed that by scientifically analyzing the job to determine the one best way
to load pig iron, output could be increased to 47 or 48 tons per day. After
scientifically applying different combinations of procedures, techniques, and
tools, Taylor succeeded in getting that level of productivity. How? By putting the
right person on the job with the correct tools and equipment, having the
worker follow his instructions exactly, and motivating the worker with an
economic incentive of a significantly higher daily wage. Using similar
approaches for other jobs, Taylor was able to define the one best way for
doing each job. Overall, Taylor achieved consistent productivity improvements
in the range of 200 percent or more. Based on his groundbreaking studies of
manual work using scientific principles, Taylor became known as the father of
scientific management. His most prominent followers were Frank and Lillian
Gilbreth.

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Henry Gantt

Developed by Henry
Gantt to help
industrial age
managers plan for
mass production
Utilized to
coordinate WWI
shipbuilding
Visual display used
to schedule based on
time
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 How todays managers use scientific
management?
Many of the guidelines and techniques that
Taylor and the Gilbreths devised for improving
production efficiency are still used in
organizations today. When managers analyze the
basic work tasks that must be performed, use
time-and-motion study to eliminate wasted
motions, hire the best-qualified workers for a job,
or design incentive systems based on output,
theyre using the principles of scientific
management.

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 3.2. Administrative Management
theory
Administrative management theory
focused more on what managers do and
what constituted good management
practice.
While scientific management was
concerned with first-line managers and the
scientific method, administrative
management theorys attention was
directed at the activities of all managers.
Administrative theory (some times called
functional or process approach) was
developed by Henry Fayol.

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 Contd.
Fayol believed that management activities at the upper levels
are more significant than other levels.
Fayol identified six basic activities of an organization:
technical, accounting, commerce, production, finance and
administrative or management.
The administration activities include (5 functions of
management):
Planning
Organizing
Commanding
Coordinating
Controlling
Identified 14 principles of management - fundamental rules
of management that could be applied to all organizational
situations and taught in schools. These principles are:

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 Fayols 14 principles of management
1. Division of Work. Specialization increases output by making
employees more efficient.
2. Authority and Responsibility. Managers must be able to give orders,
and authority gives them this right.
3. Discipline. Employees must obey and respect the rules that govern
the organization.
4. Unity of command. Every employee should receive orders from only
one superior.
5. Unity of direction. The organization should have a single plan of
action to guide managers and workers.
6. Subordination of individual interests to the general interest. The
interests of any one employee or group of employees should not take
precedence over the interests of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.

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 Principles ..
8. Centralization. This term refers to the degree to which
subordinates are involved in decision making.
9. Scalar chain. The line of authority from top management to
the lowest ranks is the scalar chain.
10. Order. People and materials should be in the right place at
the right time.
11. Equity. Managers should be kind and fair to their
subordinates and impartial treatment of all employees.
12. Stability of tenure of personnel. Long-term employment is
important for the development of skills that improve the
organizations performance.
13. Initiative. Employees who are allowed to originate and carry
out plans will exert high levels of effort.
14. Esprit de corps. Promoting team spirit will build harmony
and unity within the organization.

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To what extent does modern Management practice
Fayols Administrative Management theory?

Several of our current management ideas and

practices can be directly traced to the
contributions of administrative management
theory. For instance, the functional view of the
managers job can be attributed to the 14
principles that serve as a frame of reference from
which many current management concepts
such as managerial authority, centralized decision
making, reporting to only one boss, and so
forthhave evolved.

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 3.3. Bureaucratic management theory

Developed by Max Weber (1864 1920)

He was a German sociologist who studied
organizations.
Father of Modern Sociology
He developed a theory of authority
structures and relations based on an ideal
type of organization he called a
bureaucracya form of organization
characterized by division of labor, a clearly
defined hierarchy, detailed rules and
regulations, and impersonal relationships

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 Contd
Weber recognized that this ideal bureaucracy didnt
exist in reality. Instead he intended it as a basis for
theorizing about how work could be done in large
groups. His theory became the structural design for
many of todays large organizations.
Bureaucracy, as described by Weber, is a lot like
scientific management in its ideology. Both emphasized
rationality, predictability, impersonality, technical
competence, and authoritarianism.
Although Webers ideas were less practical than
Taylors, the fact that his ideal type still describes
many contemporary organizations attests to their
importance.

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Webers Principles
of Bureaucracy
 Webers Principles of Bureaucracy
1) A managers formal authority derives from
the position he holds in the organization.
2) People should occupy positions because of
their performance, not because of their
social standing or personal contacts.
3) The extent of each positions formal authority
and task responsibilities and its relationship
to other positions should be clearly specified.
4) Authority can be exercised effectively when
positions are arranged hierarchically, so
employees know whom to report to and who
reports to them.

2-32
 Webers Principles of Bureaucracy.

5) Managers must create

a well-defined system
of rules, standard
operating procedures,
and norms so they
can effectively
control behavior .

2-33
 Its application today
Webers bureaucracy was an attempt to formulate an
ideal prototype for organizations. Although many
characteristics of Webers bureaucracy are still evident
in large organizations, his model isnt as popular today
as it was in the twentieth century.
Many managers feel that a bureaucratic structure
hinders individual employees creativity and limits an
organizations ability to respond quickly to an
increasingly dynamic environment. However, even in
flexible organizations of creative professionalssuch
as Microsoft, Samsung, General Electric, or Cisco
Systemssome bureaucratic mechanisms are
necessary to ensure that resources are used efficiently
and effectively.

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C. Neo Classical Theories

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 4. Behavioral approach
As we know, managers get things done by
working with people. This explains why some
writers have chosen to look at management by
focusing on the organizations people.
The field of study that researches the actions
(behavior) of people at work is called
organizational behavior (OB). Much of what
managers do today when managing people
motivating, leading, building trust, working with
a team, managing conflict, and so forthhas
come out of OB research.

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 Contd.
Without question, the most important contribution to the OB field came out of the
Hawthorne Studies, a series of studies conducted at the Western Electric
Company Works in Cicero, Illinois. These studies, which started in 1924, were
initially designed by Western Electric industrial engineers as a scientific
management experiment. They wanted to examine the effect of various lighting
levels on worker productivity. Like any good scientific experiment, control and
experimental groups were set up with the experimental group being exposed to
various lighting intensities, and the control group working under a constant
intensity. If you were the industrial engineers in charge of this experiment, what
would you have expected to happen?

Its logical to think that individual output in the experimental group would be
directly related to the intensity of the light. However, they found that as the level
of light was increased in the experimental group, output for both groups
increased. Then, much to the surprise of the engineers, as the light level was
decreased in the experimental group, productivity continued to increase in both
groups. In fact, a productivity decrease was observed in the experimental group
only when the level of light was reduced to that of a moonlit night. What would
explain these unexpected results?
The engineers werent sure, but concluded that lighting intensity was not directly
related to group productivity, and that something else must have contributed to
the results. They werent able to pinpoint what that something else was, though.

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 In 1927, the Western Electric engineers asked Harvard professor Elton Mayo and
his associates to join the study as consultants. Thus began a relationship that
would last through 1932 and encompass numerous experiments in the redesign of
jobs, changes in workday and workweek length, introduction of rest periods, and
individual versus group wage plans.7 For example, one experiment was designed
to evaluate the effect of a group piecework incentive pay system on group
productivity. The results indicated that the incentive plan had less effect on a
workers output than did group pressure, acceptance, and security. The
researchers concluded that social norms or group standards were the key
determinants of individual work behavior. Scholars generally agree that the
Hawthorne Studies had a game-changing impact on management beliefs about
the role of people in organizations. Mayo concluded that peoples behavior and
attitudes are closely related, that group factors significantly affect individual
behavior, that group standards establish individual worker output, and that money
is less a factor in determining output than are group standards, group attitudes,
and security. These conclusions led to a new emphasis on the human behavior
factor in the management of organizations.

Although critics attacked the research procedures, analyses of findings, and

conclusions, its of little importance from a historical perspective whether the
Hawthorne Studies were academically sound or their conclusions justified.8 What
is important is that they stimulated an interest in human behavior in organizations.

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 How todays managers use the behavioral
approach The behavioral approach has largely
shaped how todays organizations are managed.
From the way that managers design jobs to the
way that they work with employee teams to the
way that they communicate, we see elements of
the behavioral approach. Much of what the early
OB advocates proposed and the conclusions from
the Hawthorne studies have provided the
foundation for our current theories of motivation,
leadership, group behavior and development,
and numerous other behavioral approaches.

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 5. Quantitative approach
Although passengers bumping into each other when
trying to find their seats on an airplane can be a mild
annoyance for them, its a bigger problem for airlines
because lines get backed up, slowing down how quickly
the plane can get back in the air. Based on research in
space time geometry, one airline innovated a unique
boarding process called reverse pyramid that has
saved at least 2 minutes in boarding time. This is an
example of the quantitative approach, which is the
use of quantitative techniques to improve decision
making. This approach also is known as management
science.

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 The quantitative approach evolved from mathematical and statistical
solutions developed for military problems during World War II. After the
war was over, many of these techniques used for military problems were
applied to businesses. For example, one group of military officers,
nicknamed the Whiz Kids, joined Ford Motor Company in the mid-1940s
and immediately began using statistical methods and quantitative models
to improve decision making. What exactly does the quantitative approach
do? It involves applying statistics, optimization models, information
models, computer simulations, and other quantitative techniques to
management activities. Linear programming, for instance, is a technique
that managers use to improve resource allocation decisions. Work
scheduling can be more efficient as a result of critical-path scheduling
analysis. The economic order quantity model helps managers determine
optimum inventory levels. Each of these is an example of quantitative
techniques being applied to improve managerial decision making. Another
area where quantitative techniques are used frequently is in total quality
management.

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 A quality revolution swept through both the business and public sectors in
the 1980s and 1990s.10 It was inspired by a small group of quality experts,
the most famous being W. Edwards Deming (pictured at right) and Joseph
M. Juran. The ideas and techniques they advocated in the 1950s had few
supporters in the United States but were enthusiastically embraced by
Japanese organizations. As Japanese manufacturers began beating U.S.
competitors in quality comparisons, however, Western managers soon
took a more serious look at Demings and Jurans ideas . . . ideas that
became the basis for todays quality management programs.
Total quality management, or TQM, is a management philosophy
devoted to continual improvement and responding to customer needs
and expectations. (See Exhibit MH-6.) The term customer includes anyone
who interacts with the organizations product or services internally or
externally. It encompasses employees and suppliers as well as the people
who purchase the organizations goods or services. Continual
improvement isnt possible without accurate measurements, which require
statistical techniques that measure every critical variable in the
organizations work processes. These measurements are compared against
standards to identify and correct problems.

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1. Intense focus on the customer. The customer includes outsiders who buy the
organizations products or services and internal customers who interact with and
serve others in the organization.
2. Concern for continual improvement. Quality management is a commitment to
never being satisfied. Very good is not good enough. Quality can always be
improved.
3. Process focused. Quality management focuses on work processes as the quality
of goods and services is continually improved.
4. Improvement in the quality of everything the organization does. This relates to
the final product, how the organization handles deliveries, how rapidly it
responds to complaints, how politely the phones are answered, and the like.
5. Accurate measurement. Quality management uses statistical techniques to
measure every critical variable in the organizations operations. These are
compared against standards to identify problems, trace them to their roots, and
eliminate their causes.
6. Empowerment of employees. Quality management involves the people on the
line in the improvement process. Teams are widely used in quality management
programs as empowerment vehicles for finding and solving problems.

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 How todays managers use the quantitative approach No one likes long
lines, especially residents of New York City. If they see a long checkout
line, they often go somewhere else. However, at Whole Foods first
gourmet supermarkets in Manhattan, customers found something
differentthat is, the longer the line, the shorter the wait. When ready to
check out, customers are guided into serpentine single lines that feed into
numerous checkout lanes. Whole Foods, widely known for its organic food
selections, can charge premium prices, which allow it the luxury of staffing
all those checkout lanes. And customers are finding that their wait times
are shorter than expected.11 The science of keeping lines moving is
known as queue management. And for Whole Foods, this quantitative
technique has translated into strong sales at its Manhattan stores. The
quantitative approach contributes directly to management decision
making in the areas of planning and control. For instance, when managers
make budgeting, queuing, scheduling, quality control, and similar
decisions, they typically rely on quantitative techniques. Specialized
software has made the use of these techniques less intimidating for
managers, although many still feel anxious about using them.

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 6. Contemporary approaches
As weve seen, many elements of the earlier
approaches to management theory continue to
influence how managers manage. Most of these
earlier approaches focused on managers
concerns inside the organization. Starting in the
1960s, management researchers began to look at
what was happening in the external environment
outside the boundaries of the organization. Two
contemporary management perspectives -
systems and contingency - are part of this
approach.
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 Systems theory is a basic theory in the physical sciences, but had never been applied to organized
human efforts. In 1938, Chester Barnard, a telephone company executive, first wrote in his book,
The Functions of an Executive, that an organization functioned as a cooperative system. However, it
wasnt until the 1960s that management researchers began to look more carefully at systems
theory and how it related to organizations. A system is a set of interrelated and interdependent
parts arranged in a manner that produces a unified whole. The two basic types of systems are
closed and open. Closed systems are not influenced by and do not interact with their
environment. In contrast, open systems are influenced by and do interact with their environment.
Today, when we describe organizations as systems, we mean open systems. Exhibit MH-7 shows a
diagram of an organization from an open systems perspective. As you can see, an organization takes
in inputs (resources) from the environment and transforms or processes these resources into
outputs that are distributed into the environment. The organization is open to and interacts with
its environment. How does the systems approach contribute to our understanding of management?
Researchers envisioned an organization as being made up of interdependent factors, including
individuals, groups, attitudes, motives, formal structure, interactions, goals, status, and
authority.12 What this means is that as managers coordinate work activities in the various parts of
the organization, they ensure that all these parts are working together so the organizations goals
can be achieved. For example, the systems approach recognizes that, no matter how efficient the
production department might be, the marketing department must anticipate changes in customer
tastes and work with the product development department in creating products customers want or
the organizations overall performance will suffer.

46
 In addition, the systems approach implies that decisions and actions in
one organizational area will affect other areas. For example, if the
purchasing department doesnt acquire the right quantity and quality of
inputs, the production department wont be able to do its job.
Finally, the systems approach recognizes that organizations are not self
contained. They rely on their environment for essential inputs and as
outlets to absorb their outputs. No organization can survive for long if it
ignores government regulations, supplier relations, or the varied external
constituencies upon which it depends.
How relevant is the systems approach to management? Quite relevant.
Consider, for example, a shift manager at a Starbucks restaurant who must
coordinate the work of employees filling customer orders at the front
counter and the drive-through windows, direct the delivery and unloading
of food supplies, and address any customer concerns that come up. This
manager manages all parts of the system so that the restaurant meets
its daily sales goals.

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 The early management theorists came up with management principles that they generally assumed
to be universally applicable. Later research found exceptions to many of these principles. For
example, division of labor is valuable and widely used, but jobs can become too specialized.
Bureaucracy is desirable in many situations, but in other circumstances, other structural designs are
more effective.
Management is not (and cannot be) based on simplistic principles to be applied in all situations.
Different and changing situations require managers to use different approaches and techniques.
The contingency approach (sometimes called the situational approach) says that organizations are
different, face different situations (contingencies), and require different ways of managing.
A good way to describe contingency is if, then. If this is the way my situation is, then this is the
best way for me to manage in this situation. Its intuitively logical because organizations and even
units within the same organization differin size, goals, work activities, and the like. It would be
surprising to find universally applicable management rules that would work in all situations. But, of
course, its one thing to say that the way to manage depends on the situation and another to say
what the situation is. Management researchers continue working to identify these situational
variables. Exhibit MH-8 describes four popular contingency variables. Although the list is by no
means comprehensivemore than 100 different variables have been identifiedit represents
those most widely used and gives you an idea of what we mean by the term contingency variable.
The primary value of the contingency approach is that it stresses there are no simplistic or universal
rules for managers to follow.

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 Regular contingency variables
1. Organization Size. As size increases, so do the problems of
coordination. For instance, the type of organization structure
appropriate for an organization of 50,000 employees is likely to be
inefficient for an organization of 50 employees.
2. Routineness of Task Technology. To achieve its purpose, an organization
uses technology. Routine technologies require organizational structures,
leadership styles, and control systems that differ from those required by
customized or nonroutine technologies.
3. Environmental Uncertainty. The degree of uncertainty caused by
environmental changes influences the management process. What
works best in a stable and predictable environment may be totally
inappropriate in a rapidly changing and unpredictable environment.
4. Individual Differences. Individuals differ in terms of their desire for
growth, autonomy, tolerance of ambiguity, and expectations. These and
other individual differences are particularly important when managers
select motivation techniques, leadership styles, and job designs.

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 End of chapter 2 .. next class
chapter 3 Planning

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