CHAPTER TWO

EVOLUTIONS OF MANAGEMENT
THEORIES

By: Dr. Semu B.

07/09/2024 By: Dr. Semu B. Harambee University 1

 EVOLUTION OF MANAGEMENT THOUGHTS
• How management concepts are evolved?
 The principle of management can be traced back many centuries: prehistoric
times-hunting, food preparation, etc. in primitive society
 Egypt- The Egyptians organized their people and their slaves to build their
cities and pyramids – need for effective management
 Roman- The Roman Empire is thought by many to have been so successful
because of the Romans’ great ability to organize the military and conquer
new lands.
 Roman Catholic Church - with its efficient formal organization and
management techniques. The most important contributions: Hierarchy of
authority: there was a hierarchical structure from pop – bishop - priest –
laity (worshippers)
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China- the great wall of chinese– the importance of organizational
effectiveness
Ethiopia- the magnificent obelisk of Axum, rock hewn churches of
Lalibela- the need for effective organization
Although management practices go back several thousands years, the
development of management as a field of knowledge is much recent.
Much of the impetus for the development of management theories &
principles grew out the industrial revolution of the early 1800s.
It was manifested by the:
• Revolution of factories & large organization
• Substitution of human labor by machine power
• Need for the coordination of the efforts of large numbers of people
Thus, attempts to develop theories & principles of management as a
discipline evolved almost 200 years ago.
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 PRE-CLASSICAL MANAGEMENT THEORY
1. Robert Own-(1771-1858)
A British industrial & an owner –manager of several successful cotton
mills in Scotland
Concerned about the poor working and living conditions of workers
Recognized the importance of human resources in an organization
He argued that improved working conditions of employees in the factory
would inevitability lead to increased production and profits.
Was considered as father of modern personnel management spirit of
cooperation b/n workers & mgt.

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2) Charles Babbage-(1792-1871)
A British mathematician who built the first practical mechanical
calculator
Emphasized the idea work specialization
Not only physical work but also mental work could be specialized.
He was an early advocator of division of labor principle called
specialization:
• To improve skills of workers
• To reduce learning time & other expenses
• His management ideas also anticipated the concept of
incentive pay & profit sharing to improve productivity.

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3) Henry Robinson Towne (1844-1924) – Managers should be all-rounded.
Towne was a founder and manager of Yale and Towne manufacturing company.
He has succeeded in motivating the engineers to study management.
According to him, a manager should be an administrator, an engineer, and a
thorough statistician.
4) Adam Smith-(1776): Division of labor
A British economist – the wealth of Nations
Division of labor refers to the breakdown of jobs into narrow, repetitive tasks.
His conclusion was specialization could lead to increased efficiency. This is
because:
o The dexterity of an employee increases in every particular work
o The time lost in passing from one type of work to another will be saved
o Leads to the invention of great number of machines, which enables to perform more
Thus, the focus was mainly on the mechanical side of the job- division of labor,
coordination
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of activities, & control of operations
By: Dr. Semu B. Harambee University 6
 Approaches to Management Thought
Broadly, there are different approach to management: pre- classical, classical, & modern. They
are presented as follows:
•Classical theory
Scientific management Theory – F.W. Taylor
Bureaucracy theory – Max Weber
Administrative theory – Henry Fayol
•Neo-classical theory
Human relations theory – Elton Mayo
Behavioral science theory – Maslow’s needs hierarchy, Two factors theory, Theory of X
and Y, etc
•Modern theory
Quantitative Theory
Decision Theory
Contingency Theory
System Approach
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 1. CLASSICAL MANAGEMENT APPROACH
Evolved in an effort to develop techniques that would solve problems of
organizational efficiency in the production of goods and services
Three perspectives: based on the issues and problems that they address
Scientific management; Focused on in the management of work and workers
(lower level managers).
Administrative theory: Focused on the problem of top managers in managing
the entire organization
Bureaucracy theory: Concentrate on structure and design of organization
characterized by a hierarchy of authority, formalized rules and regulations that
serve to guide the coordinated functioning of an organization.

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 1.1. Scientific Management
Arose because of the need to increase productivity and efficiency.
Frederick W. Taylor (1856–1915)
A pioneer who advocated scientific principles of management as the result of
his keen research in different industrial activities.
Started work as an apprentice pattern making in a small workshop in Midvale
steel company
Within 8 years, he progressed from ordinary laborer to chief engineer (time
keeper, machinists, gang boss, foreman, assistant engineer)
He worked in Bethlehem steel company till 1901, acquired a technical
excellence in the field of engineering.
• Published principle of scientific management in 1911. Thus, he is considered
as the father of scientific management
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 Taylor’s Four Principles of Management
1. Develop a science for each element of an individual’s work, which will replace the
old rule-of-thumb method.
2. 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 takes over all work for which it is better fitted than the workers.
Scientific management involves a complete mental revolution on the part of
workers & those of management – the main objectives were:
o The elimination of waste effort
o Emphasis on fitting workers to particular tasks
o Greater care in training workers to the specific requirements of their jobs
o Greater specialization of work activities
o The establishment of standards for performance

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B) Henry L. Gantt (1861-1919)
Gantt began to reconsider Taylors incentive system. Gantt came up with a new
idea that every worker who finished a day‘s assigned work load would win a
50 cent bonus. Then he added a second motivation.
The supervisor would earn a bonus for each worker who reached the daily
standard, plus an extra bonus if all the workers reached it.
Every workers progress was rated publicly and recorded on individual bar
charts, in black on days the worker made the standard, in red when he or she
fell below it.
Going beyond this, Gantt originated a charting system for production
scheduling: the Gantt chart is still in use today.

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C) The Gilbreths
Frank B. and Lillian M. Gilbreth (1868–1924) and (1878–1972) made their
contribution to the scientific management movement as a husband and wife
team.
Lillian and Frank collaborated on fatigue and motion studies and focused
on ways of promoting the individual workers welfare.
The ultimate aim of scientific management was to help workers reach their
full potential as human being.
In their conception, motion and fatigue were intertwined- every motion that
was eliminated reduced fatigue.
Using motion picture cameras, they tried to find the most economical
motions for each task in order to upgrade performance and reduce fatigue.

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 1.2. Administrative Management Theory
Administrative theory focuses on the total organization and
attempts to develop principles that will direct managers to more
efficient activities.
A. Henri Fayol (1841-1925)
Henri Fayol was a French mining engineer who spent many of his later
years as an executive for a French coal and iron combine.
Fayol identified:
The major types of activities
Management as a separate field of study
General management principles
 Believed that the practice of management was distinct from other
organizational functions
 Developed fourteen principles of management that applied to all
organizational situationsBy: Dr. Semu B. Harambee University
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Fayol’s Fourteen principles of Management
1. Division of labor: Division of work leads to specialization resulting in
higher output.
2. Authority: Managers must have the authority to issue orders and instructions
to the subordinates.
3. Discipline: Discipline means respect for rules and agreements.
4. Unity of command: There should be one boss for one subordinate.
5. Unity of direction: All operations in an organization need to be directed towards
one objective.
6. Subordination of individual interest to general interest: If there is a
conflict between the individual goals and organizational goals, preference should be
given to organizational goals,

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7. Remuneration: There should be a fair system of remuneration that ensures
equal pay for equal work.
8. Centralization: It refers to declining role of subordinates in the decision
making.
9. Scalar Chain (Hierarchy): This the line of authority running from top level to
lower level of management.
10. Order: People and material should be in the right place at the right time.
11. Equity : Managers should be fair to their subordinates.
12. Stability of staff: Employee turnover should be less to ensure efficiency of an
organization.
13. Initiative : Subordinates should have the freedom to conceive new ideas and
do their task, even though they commit mistakes.
14. Esprit de corps: ‘Unity is strength’. People should work as a team to enjoy
the benefits of synergy.
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Positive attributes of Fayol’s theory:
Fayol pioneered in distinguishing management functions from other
functions/activities of a business.
He was first to highlight the universality of management principles.
His contribution to management theory provided foundation to
development of management thought.
• Major limitations
Some of the principles are rigid (chain of command, unit of
command)
The principles are applicable in a relatively stable & predictable
environments
Prescription of universal principles that are not really appropriate in
some settings (decentralization, matrix structure )

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 1.3. Bureaucracy Theory of Management
• What is Bureaucracy?
It is merely a type of organizational structure developed by the
German sociologist Max Weber.
Bureaucracy is associated with negative connotation among the
general population. Thus, most people attribute several prejudices to
bureaucracy:
 Rigid application of rules
 Paper shuffling
 Redundancy of error
 Lethargic attitude toward change, etc.

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 1. Max Weber (1864-1920): German sociologist
Weber developed the principles of bureaucracy—a formal system of
organization and administration designed to ensure efficiency and
effectiveness.
In a bureaucracy, a manager’s formal authority derives from the
position he or she holds in the organization.
A well-defined hierarchy.
Division of labor and specialization..
Rules and regulations.
Impersonal relationships between managers and employees.
Record Keeping

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Criticism of bureaucracy
Reduces flexibility –leads to bureaucratic behavior
Specialization conflicts & minimum performance level
Inappropriate application of rules & regulations
Difficulty of responding to changing conditions
Feeling of being irrelevant-routine activities can be easily learned
Enormous degree of power in the hands of a very few

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 2) NEO-CLASSICAL MANAGEMENT THEORY
Emphasized human relations, the importance of individual as
well as group relationship and social aspects.
It appeared essential to fined a means that could help managers
become effective in dealing with people & thereby increasing
worker’s productivity
Then, behavioral management theory emerged emphasizing on
human relation.

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 A. Human relations approach:
 It refers to the interaction of managers with their subordinates based on social
environment of work, individual & group behavior, and interpersonal
relationships.
 HRs: used concepts from psychology, sociology & anthropology to assist
managers understand human behavior in the work place
 Focused on motivation, communication, work group formation & leadership
Thus, the behavioral school of management had its origins in industrial
phycology & sociology emphasis on the interactions of people in an
organization

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The Hawthorn Studies: Elton Mayo
• One series of studies was conducted from 1924 to 1932 at the Hawthorn Works
of the Western Electric Company in America.
• Elton Mayo was most important contributor to human relations approach.
• He conducted several experiments in industry known as HOWTHORNE
experiments.
There were four main phases to the Hawthorne experiments:
1.The illumination experiments: light effect
2. The relay assembly test room: 6 women, extra attention given
3. The interviewing program: 20,000 interviews, structured vs unstructured;
mgrs or leaders attitude
4. The bank wiring observation room: 14 men; informal grps

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Finding & Implications of Hawthorne Studies
 Physical working conditions did not seem to explain the changes that were
related in productivity. There are other factors other than physical factors &
monetary incentives, which affect productivity
 These factors are social & psychological in nature
Social environment
 Ability to talk to each other
 The right to choose their rest periods
 The right to leave the workstation without permission
 The right to have a say in suggested changes
Psychological conditions:
 Being a member of the study group they felt social acceptance & recognition.
Thus, human beings are social beings not only rational, economic being (i.e.,
motivated not only by the body needs but also by social & psychological
needs)
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 B) Behavioral Science Approach
• It primarily focuses on psychological considerations and treats
fulfillment of emotional needs as a means of achieving other
economic goals.
• They are largely concerned with motivation and believed that
employees desire diverse and challenging work.
• They preferred participative and group decision making, process of
self-direction and control instead of imposed control.
• Some notable advocators of behavioral science include: Abraham
Maslow, Douglas McGregor etc.

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 i. MASLOW’S HIERARCHY OF NEEDS THEORY

• Physiological needs: basic requirements of the human body; food, water, sleep, sex
• Safety needs: desires of a person to be protected from physical and economic harm
• Belongingness and love needs (social): desire to give and receive affection; be in the
company of others
• Esteem needs: self-confidence and sense of self-worth
• Esteem from others: valuation of self from other people
• Self-esteem: feeling of self-confidence and self-respect
• Self-actualization needs: desire for self-fulfillment

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• Need hierarchy
• Unsatisfied need is a potential motivator of
behavior
• Satisfied need is no longer a motivator.
(Deficit principle)
• A need at one level does not become
activated until the next lower-level need is
satisfied. (Progression principle)
• Focus on more than one need: promotion
leads to more money (esteem and
physiological)
• Need satisfaction follows the order shown
but is flexible
• Weak empirical support
• Remains a classic interpretation of behavior

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ii. HERZBERG’S MOTIVATION-HYGIENE THEORY

Job satisfaction and job dissatisfaction are created by

different factors.
• Hygiene factors (Job context ): extrinsic
(environmental) factors that create job dissatisfaction.
• Motivators (Job content): intrinsic (psychological)
factors that create job satisfaction.
• The opposite of satisfaction is not dissatisfaction, but
rather no satisfaction.

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 Fredrick Herzberg’s…….cont’d

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Contributions of the Behavioral Science Theories
Spotlight the managerial importance of such factors as communication, group
dynamics, motivation, and leaders.
Articulates practical applications of behavioral studies.
Draws on the findings of a number of disciplines such as management,
psychology, sociology, anthropology, and economics.
Highlights the importance of an organization’s members as active human
resources rather than passive tools.

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 Limitations of the Behavioral School (Human relations and
Behavioral Science)
Complexity of human behavior makes prediction of human behavior very
difficult.
The behavioral school has been criticized in group formation, satisfaction,
and productivity relations both empirically and ideologically.
Ignored the economic interest of workers by focusing on the psychological
and social interest and this led to the exploitation of workers.
Studies further showed that there is no clear relationship between supervisor
behavior, management style, and productivity;
E.g. no clear relationship between participation in decision making and
satisfaction or productivity. In fact, the relationship may be opposite, i.e.,
productivity may increase job satisfaction.
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 1.5. Modern Management Theory
With increasing complexities of organizations, the modern management
theories (thoughts) are developed.
 Management is responsive to environmental changes.
 Business firms have multiple objectives.
 Management is multi-disciplinary in nature.
 Management is future oriented.
 Modern Management theory include:
1.Quantitative/Management science approach
2.Decision theory approach
3.Systems approach, and
4.Contingency approach

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 a) Quantitative/Management Science Approach
The management science school emerged to treat the problems associated with
global warfare.
Today, this view encourages managers to use quantitative techniques; such as
mathematics, statistics, and other quantitative techniques to make management
decisions.
Managers can use computer models to figure out the best way to do something
— saving both money and time.
Managers use several science applications:
 Mathematical forecasting helps make projections that are useful in the planning
process.
 Inventory modeling helps control inventories by mathematically establishing
how and when to order a product.
• Queuing theory helps allocate service personnel or workstations to minimize
customer
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waiting and service cost
By: Dr. Semu B. Harambee University 32
 b) Decision Theory
The decision theory approach looks upon the management process as a decision
making process.
According to the decision theorists, the entire field of management can be
studied from the study of the decision- making process, since the performance
of various management functions involves decision-making.
It is true that every task of the manager involves decision- making.
The totality of management is however, something more than decision making.
The core tasks of the modern manager are innovating, integrating the
organization with its external environment, and creation of an organizational
climate which is conducive to the optimum performance of its members.

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c) System Approach
System defined as a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole. E.g. computers, automobiles,
organizations, and animal and human bodies.
Two basic types of systems:
 Closed systems are not influenced by and do not interact with their
environment.
 Open system approach recognizes the dynamic interaction of the system with
the environments by taking in inputs & transforming them into outputs that
are distributed into their environments.

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 Implications of the systems approach
Synchronization- coordination of the organization’s parts is essential for
proper functioning of the entire organization.
Mutual influence- decisions & actions taken in one area of the organization
will have an effect in other areas of the organization
Dependency- organizations are not self reliant & therefore there exists
mutual dependence among them selves.
Generally, the key implication is that organizations must adapt to changes in
their external environment

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d) Contingency/Situational Approach
There is no universally applicable set of management principles (rules) by
which to manage organizations.
Organizations are individually different, face different situations & require
different ways of managing Therefore, managerial decisions must be
specific for specific situations by recognizing the uniqueness of the
environment
According to the contingency approach:
The managers‘ task is to identify which technique will in a particular
situation, under particular circumstances, and at a particular time, best
contribute to the attainment of management goals.

End of chapter two! Stay safe!

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