The Evolution of

Management Thought
Review of Theories of
Managing People
 Learning objectives

 Objective:
The objective of this lesson is to discuss
and make out various management thoughts and
approaches and their applicability in present
context.
 Introduction
 Organized endeavors, directed by people,
responsible for planning, organizing, leading and
controlling activities have been in existence for
thousands of years.
 Management has been practiced in some form or the

other since the dawn of civilization. Ever since

human beings started living together in groups,
techniques of organization and management were
evolved.
 Introduction
 The Egyptian pyramids, the Chinese Civil Service, The Roman
Catholic Church, the military organizations and the Great Wall of
China, for instance, are tangible evidence that projects of tremendous
scope, employing tens of thousands of people, were undertaken well
before the modern times.
 The pyramids are particularly interesting examples. The construction
of a single pyramid occupied more than 1,000,000 workers for 20
years. Who told each worker that what did one do? Who ensured that
there would be enough stones at the site to keep the workers busy?
The answer is Managers, regardless of what managers were called at
that time.
 He had to plan what was to be done, organize people and material
to do it, lead and direct the workers, and impose some controls to
ensure that everything was done as planned.
 Introduction
 Adam Smith’s name is typically cited in field of
economics for his contribution to classical economic
doctrine, but his contribution in Wealth of Nations
(1776) outlined the economic advantage that
organization and society can gain from the division of
labor.
 He used the pin-manufacturing industry for his

example. Smith noted that 10 individuals, each doing

a specialized task, could produce about 4800 pins a
day.
 Introduction
 However, if each worked separately and had to
perform each task, it 50 would be quite an
accomplishment to produce even 10 pins a day.
 Smith concluded that division of labor increased

productivity by increasing each worker’s skill and

dexterity, by saving time lost in changing tasks, and
by creating labor-saving inventions and machinery.
 Introduction
 Industrial Revolution is another most important aspect
that influences management in pre-twentieth century.
The major contribution of the industrial revolution was
the substitution of machine power for human power,
which in turn, made it more economical to manufacture
goods in factories.
 The advent of machine power, mass production, the

reduced transportation costs that followed a rapid

expansion of the railroads and lack of governmental
regulation also fostered the development of big
organization.
 Introduction
 Now, a formal theory to guide managers in running
their organization was needed. However, it was not
until the early 1900s that the first major step toward
developing such a theory was taken.
EVOLUTION OF MANAGEMENT
THOUGHTS
 FORCES BACKING
MANAGEMENT THOUGHTS
Management thoughts have took
birth/evolved under the anxiety of
political, social and economic forces.
These are explained as follows:
 FORCES BACKING
MANAGEMENT THOUGHTS
 Political Forces: Management thoughts have been shaped
by the political forces manifested through the administration
of political institutions and government agencies.
 The important political forces includes the political

assumptions with respect to property rights, contractual

rights, concepts of justice, judicial processes and
attitudes towards governmental control versus laissez-
faire.
 Political pressures also define the interrelated rights of

consumers, suppliers, labour, owners, creditors and

different segments of public.
 FORCES BACKING MANAGEMENT
THOUGHTS
 Social Forces: These evolve from the values and
beliefs of a particular culture of people. The needs,
education, religion and norms of human
behaviour command the relations among people,
which form social contracts.
 Social contracts, is that unwritten but understood

set of rules that govern the behaviour of the people

in their day-to-day interrelationships.
 FORCES BACKING
MANAGEMENT THOUGHTS
 Economic Forces: These forces determine the scarcity,
transformation and distribution of goods and services
in a society.
 Every social institution competes for a limited amount of

human, financial, physical and information resources.

 This competition over scarce resources allocates them to

their most profitable use and is the motivator of

technological innovation by which resource availability
can be maximized.
A FRAMEWORK FOR THE
MANAGEMENT THOUGHTS
 Pre classical Management concepts
 Management in Antiquity/ Management in ancient
times Management as a theory is the results of the
twentieth century, but as practice it is as old as the human
civilization. During that time, the contribution given by
religious and military groups to management thought
were significant and undeniable.
Monumental accomplishment
• The Egyptians organized their people and slaves to build
their cities and pyramids. Construction of one pyramid
around 5000 BC required the labor of 100,000 people
working for 20 years. Planning, organizing, and
controlling were essential elements of those projects and
other feats, many of which are long term.
 Count.,
• Generally, had there not been considerable skills in the various management
functions, those wonderful accomplishments like the Obelisk of Axum, the
Great Wall of China and Harer (Jegol), the Pyramids of Egypt, the
Temple of Lalibela, the Castle of Gondar, and the terraces of Konso
would not have been possible.
Religious institution
• Many concepts of authority were developed in religious context. One
example is Roman Catholic Church was one of the most effective formal
organizations in the history of western civilization. The church had a set of
well-defined objectives and effective and efficient organizational set up to
achieve them. It introduces hierarchy of authority and staff concept. The
bible /Exodus 18 = 13-26/- This is the advice, which was given by Jethro,
the father-in-law of Mosses, to the Mosses. It includes the following.
 Early Pioneers to Management
 The followings individuals contribute in
development of scientific management school of
management thoughts.
 They dedicated to the increase in efficiency of

labour by the management of the workers in the

organization’s technical core. They are:
• The contribution of the frontlines of scientific
management such as Robert Owen, Charles
Babbage, and Morris Cooke will be the focus of
this section.
 Charles Babbage (1792-
1871):
 He was professor of mathematics at Cambridge
University from 1828 to 1839. He concentrated on
developing the efficiencies of labour production.
 He, like Adam Smith, was a advocate of the

specialization of labour, and he applied

mathematics to the efficient use of both production
materials and facilities.
His main contributions are as follows
 He stressed the importance of division of and assignment
to labour on the basis of skill.
 He recommended profit-sharing programs in an effort to

foster harmonious management-labour relations.

 He stressed the means of determining the feasibility of

replacing manual operations with machines.

 He had also a strong understanding of the importance of

human resources as related to efficiency

 Robert Owen (1771-1858):

∫ He was a successful textile factory manager in Scotland

from 1800-1828
∫ He recognized that human resources were as valuable
as financial & material resources to the production of
goods.
∫ He believed that factory workers would be more
productive if they were motivated through rewards
rather than punishments.
 Robert Owen (1771-1858):
∫ He experienced with several motivating techniques.
Some of them were:
 He improved working conditions within the factory,

i.e., providing meals, bath facilities,

 Housing & marketing facilities

 Reducing the workday to 10 ½ hours with no night

work for children

 Refused to hire children under the age of 10

 Because of his emphasis on the workers, he is regarded

as the father of modern personnel management.
 Morris Cooke
• Morris Cooke worked directly with Taylor on
several occasions.
• Cooke‘s major contribution was the application of
scientific management to educational and
municipal organizations.
• Cooke worked hard to bring management and
labor together through scientific management.
 Morris Cooke
• He believed that increasing productivity would
increase the position of the manager as well
as that of worker‘s.
• Thus, Cooke extended the scope of scientific
management and helped gain the support of
organized labor.
 The Era of Classical Management
 The classical development of management thoughts
can be divided into-
1. The scientific management,
2. The organizational management,
3. The behavioural management and
4. The quantitative management.
The Era of Classical Management
 The first two (scientific management school and
organizational) emerged in late 1800s and early
1900s were based on the management belief that
people were rational, economic creatures choose
a course of action that provide the greatest economic
gain. These schools of management thoughts are
explained as below:
 Classical Management Theory

 Classical approach is the oldest formal school of thought

which began around 1900 and continued into the 1920s.
 The classical management theory arise because of the
need to increase productivity and efficiency.
 Its mainly concerned with the increasing the efficiency
of workers and organizations based on management
practices, which were an outcome of careful observation.
 Classical approach mainly looks for the universal
principles of operation in the striving for economic
efficiency.
 Classical Management Theory
 Classical management consists three streams of
thought(Major theories)
1. Scientific management focuses on the “one best
way” to do a job.
2. Administrative management focuses on
discussing universally applicable principles of
management
3. Bureaucratic management focuses on the
guidelines for structuring with formalization of
rules, procedures and a clear division of labor.
• Frederick Winslow Taylor
(1856-1915)

• Frank Gilberth (1868-1924) &

Lillian Gilberth(1878-1972)
Henri Fayol
(1841-1925)

Max Weber
(1864-1920)
 1. Scientific management
 Scientific management means application of the
scientific methods to the problem of management. It
conducts a business or affairs by standards established
by facts or truth gained through systematic
observation, experiments, or reasoning.
 The followings individuals contribute in development

of scientific management school of management

thoughts. They dedicated to the increase in efficiency
of labour by the management of the workers in the
organization’s technical core.
 Fredrick W. Taylor (1856-1915):
 He is known as ‘father of scientific management’.
“one best way for doing a job”
 Fredrick W. Taylor (1856-1915):
• Taylor was a mechanical engineer who wanted to improve
industrial efficiency.
• His major concern was to increase efficiency in production,
not only to cover costs, raise profits
• but also to make possible increase in pay for workers
through their higher productivity, through one best of doing
a job.
• He believed that there was one best way of performing
every process and task in industry.
• He thought that, to find the best way, workers' performance
of a task should be examined scientifically, objectively,
and in detail, using an empirical and experimental approach.
 Taylor’s Principle
 Develop a science for each job with standardized
work implements and efficient methods for all to
follow.
 Scientifically select workers with skills and

abilities that match each job, and train them in the

most efficient ways to accomplish tasks.
 Ensure cooperation through incentives and provide
the work environment that reinforces optimal work
results in a scientific manner.
 Taylor’s Principle
 Divide responsibility for managing and for
working, while supporting individuals in work
groups for what they do best.
 Some people are more capable of managing,

whereas others are better at performing tasks

laid out for them.
 Related Management
Activity
 Complete time-and-motion study to determine the best way to do
each task.
 Use job descriptions to select employees, set up formal training

systems, and establish optimal work standards to follow.

 Develop incentive pay, such as piece-rate system, to reward

productivity, and encourage safe condition by using proper

implements.
 Promote leaders who guide, not do, the work; create a sense of

responsibility for group results by panning tasks and helping

workers to achieve those results.
FRANK B GILBRETH & LILLIAN M
GILBRETH
Followers of Taylor

Frank (1868-1924) and Lillian (1878-

1972) Gilbreth: Frank Gilbreth, a
construction contractor by back ground,
gave up his contracting career in 1912 to
study scientific management after hearing
Taylor’s speak at a professional meeting.
Along with his wife Lillian, a
psychologist, he studied work
arrangements to eliminate wasteful
hand-body-motion.
 Frank (1868-1924) and Lillian (1878-
1972) Gilbreth
 Frank specialized in research that had a dramatic
impact on medical surgery and, through his time
and motion findings, surgeons saved many lives.
 Lillian is known as ‘first lady of management’ and

devoted most of her research to the human side of

management.
 Frank Gilbreth is probably best known for his

experiments in reducing the number of motions in

bricklaying.
 Count.,
• He identified eighteen on-the-job motions and called
them THERBLIGS. (TherbligsisGilbreth spelt
backwards with the transposition of one letter).
• The on-the-job motions are: (1) search, (2) find, (3)
select, (4) grasp, (5) position, (6) assemble, (7) use,
(8) disassemble, (9) inspect, (10) load transport,
(11) pre-position, (12) release load, (13) transport
empty, (14) wait when avoidable, (15) avoidable
delay, (16) rest for overcoming fatigue, (17) plan, and
(18) hold.
Count.,
 Henry Gantt (1861-1919):
 He was a consulting engineer who specialized in
control system for shop scheduling. He sought to
increase workers efficiency through scientific
investigation.
 He developed the Gantt Chart that provides a

graphic representation of the flow of the work

required to complete a given task.
 Henry Gantt (1861-1919):
 The chart represents each planned stage of work,
showing both scheduled times and actual times.
Gantt Charts were used by managers as a scheduling
device for planning and controlling work.
 Gantt devised an incentive system that gave workers a

bonus for completing their job in less time than the

allowed standards.
 Classical Organizational Theories
• The classical administrative school grew from
classical scientific roots. The administrative branch
emphasized efficiency and productivity in running
factories and businesses.
• Its two major purposes were to

(1) develop basic principles that could guide the design,

creation, and maintenance of large corporations and
(2) identify the basic functions of managing
organizations.
 Classical Organizational Theories

Father of modern operational

management theory

Henri Fayol (1841-1925):

 Henri Fayol (1841-1925):
 was a Frenchman with considerable executive
experience who focused his research on the things
that managers do.
 He spent his entire working life with the same company,
rising to Managing Director at the age of 47 and only
retiring after his 77th birthday.
 Henri Fayol (1841-1925):
 His was a functional approach because it defined
the functions that must be performed by managers.
 It was also a process approach because he

conceptualized the managerial job in a series of

stages such as planning, organizing and
controlling.
 Henri Fayol (1841-1925):
 According to Fayol, all managerial tasks could be classified into one of the
following six groups:
1. Technical (related to production);
2. Commercial (buying, selling and exchange);
3. Financial (search for capital and its optimum use);
4. Security (protection for property and person);
5. Accounting (recording and taking stock of costs, profits, and
liabilities, keeping balance sheets, and compiling statistics);
6. Managerial (planning, organizing, commanding,
coordinating and control);
 Henri Fayol (1841-1925):
He focused his work on the administrative or managerial
activities and developed the following definition:
Planning meant developing a course of action that would

help the organization achieve its objectives.

Organizing meant mobilizing the employees and other

resources of the organization in accordance with the plan.

Commanding meant directing the employees and getting

the job done.

Coordinating meant achieving harmony among the various

activities.
Controlling meant monitoring performance to ensure that

the plan is properly followed.

Max Weber (1864-1920):

Theory of Bureaucracy
He was a German sociologist.
Writing in the early 1900s, Weber
developed a theory of authority
structures and described
organizational activities on the
basis of authority relations.
 Max Weber (1864-1920):
 He described an ideal type of organization that he
called a bureaucracy, a form of organization
characterized by division of labour, a clearly
defined hierarchy, detailed rules and regulations,
and impersonal relationships
 Max Weber (1864-1920):
• He believed in one best organizational structure,
which is highly formal, and goal oriented
structure, human emotions and personal bias
are subordinated by rational thinking and
impersonal decision making.
 The Elements of Bureaucracy are:
 Labour is divided with clear definition of authority
and responsibility that are legitimatized as official
duties.
 Positions are organized in a hierarchy of authority,

with each position under the authority of a higher one.

 All personnel are selected and promoted based on

technical qualifications, which are assessed by

examination or according to training and experience.
 The Elements of Bureaucracy are:
 Administrative acts and decisions are recorded in
writing. Recordkeeping provides organizational
memory and continuity over time.
 Management is separate from the ownership of the

organization.
 Management is subject to rules and procedures that

will insure reliable, predictable behaviour. Rules are

impersonal and uniformly applied to all employees.
 Total appraisal of the classical Theories

• The greatest contribution of the classical approach was that

it identified management as an important element of
organized society.
• Advocates of the classical approach believed that
management, like law, medicine, and other occupations,
should be practiced according to principles that managers
can learn.
• The identification of management functions such as
planning, organizing, and controlling provided the basis for
training new managers.
 The Human Relations Movement
 The term human-relation refers to the manner in which
managers interact with subordinates. To develop good
relations, followers of this approach believed,
managers must know why their subordinates behave as
they do and what psychological and social factors
influence. While scientific management concentrated
on the physical environment of the job, human
relations concentrated on the social environment.
 The Human Relations Movement
• scientific management focused on improving the
efficiency of manufacturing facilities and their
workers; bureaucratic management focused on
using knowledge, fairness, and logical rules and
procedures to increase the efficiency of the entire
organization; and administrative management focused
on how and what managers should do in their jobs.
• In contrast, the human relations approach to
management focused on the psychological and
social aspects of work.
 Behavioral Management Theory
• Classical management theorists focused on controlling and
standardizing the individual behavior, but it is difficult to
standardize group or individual human behavior.
• Practicing managers got problems in managing organizations
because subordinates and workers weren't behaving as
expected by scientific/classical management theory.
• human relations- is a general term used to describe the ways
in which managers interact with their subordinates, based on
social environment of work, individual and group behavior
and interpersonal relationships.
 Behavioral Management Theory
• They used concepts from psychology, sociology and
anthropology to assist managers understand
human behavior in the work place.
• They focused on motivation, communication,
work group formation and leadership.
• Behavioral management theory was stimulated by a
number of writers and theoretical movements.
Among writers Abraham Maslow, Douglas
McGregor and Elton Mayo were well-known.
 George Elton Mayo (1880-1949):
• Elton Mayo conducted a research activity in Hawthorne
Electric Plant to research effect of physical conditions
on productivity called as Hawthorne Studies.
• The study conducted by Elton Mayo and his associates
between 1927-1932 at Western Electric’s Hawthorne
Plant dramatically impacted the dominant thought of
management .They experimented the effect of
illumination on work productivity.
 George Elton Mayo (1880-1949):
• In that study, two groups: i) controlled and ii) experiment
groups were formed to find out the effect of bright and dim
light. The control group work without change in lighting and the
experiment group worked in fluctuating lighting condition. The
result showed that there is no relation between illumination and
performance.
• In other words, productivity of both groups increased. Thus, the study
concluded that the human element (more specifically relation among
workers) is important in the workplace. This study discovered the effect
of group norms and standard on individual behavior.
• In another experiment Mayo revealed that productivity improved by
change in working conditions as length of rest time, duration of work,
presence or absence of free lunch etc.
 Findings and implications of Hawthorne
• The Hawthorne studies constituted the single most important
foundation for the behavioral approach to management. The
conclusions drawn from them were many and varied.
• Physical working conditions did not seem to explain the changes
that were related in productivity.
• There are other factors other than physical factors and monetary
incentives, which affect productivity. These factors are social and
psychological in nature.
• Social factor
– 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.
 Findings and implications of Hawthorne

• Psychological conditions
– Since they were selected as a member of the study group they
felt social acceptance, recognition, and social importance.
• From this we can understand that human beings are
social beings rather than rational, economic beings. In
addition we can understand that to be successful
managers, he/she should understand people along with
the reward systems, machines and tools (socio-
technical aspect). That is, Human aspect must match
with social aspect.
 The Modern Era
Under the modern management theory, we have the
following streams.
1. The Systems Approach
2. The Decision Approach
3. The Quantitative /Management Science Approach
and
4. The Contingency Approach
 The Systems Approach
• It is based on the concept that an organization is a system, or an entity
of interrelated parts.
• If you adjust one part of the system, other parts will be affected
automatically.
• A system is a set of inter-related and inter-dependent parts,
arranged in such a way that produces a unified whole.
• The systems approach to management attempts to view the
organization as a unified, purposeful system composed of
interrelated parts
Synergy:- tells us that the whole is more than the sum of its parts.
• When the various parts of an organization work together, they can
produce much more than they could by working independently
 Systems Theory
Inputs Transformation process Outputs

Resources Managerial and

 Labor Technological
 Goods
 Materials Abilities
 Services
 Capital  Planning
 Profits and
 Machinery  Organizing losses
 Information  Staffing
 Employee
 Leading
 satisfaction
 Controlling
 Technology

Feedback
 The quantitative approach
 The classical approach lays stress upon the physical
resources while the neo-classical approach gives importance
to human resources. Both these approaches are silent about
some of the most serious problems usually faced by the
managers.
 The quantitative approach to management makes some

suggestions to solve different problems facing the managers.

It tells the managers to solve their problems with the help of
the mathematical and statistical formulas. Some special
formulas have been prepared to solve managerial problems.
 The Contingency Approach
• The basic idea of the contingency approach is that
there is no one best way of managing planning,
organizing, staffing, leading and controlling)
• Rather, manages must find different ways to fit
different situations,
• The method that is highly effective in one situation
may not work in other situations.
• The contingency approach seeks to match different
situations with different management methods.
 The Contingency Approach
 Contingency Approach
A research effort to determine which managerial
practices and techniques are appropriate in
specific situations
 Different situations require different managerial
responses.
 It deals with intercultural feelings in which custom and

habits cannot be taken for granted.

 Contingency Theory
 Application of management principles depend/varies
according to the particular situation.
 Individuals, groups, industries, managing styles can all vary
enormously.
 No single best way to manage, method effective in one
situation not work in another
 Management has to decide – scientific, bureaucratic,
administrative, Behavioural e.t.c. (e.g. Hospital specialist
vs hierarchy)
 If production manager needs to improve productivity, he/she
decides on a new work method (a scientific), or to restructure
(bureaucratic), or new motivation approach (behavioural)
 The Contingency Approach (cont’d)
 Lessons from the Contingency Approach
 Approach emphasizes situational appropriateness rather than rigid
adherence to universal principles
 Approach creates the impression that an organization is captive to its
environment
 The contingency approach emphasises situational appropriateness.
 Contingency thinking is a practical extension of the systems approach
 The contingency approach is still undeveloped. Its final impact
remains to be seen.
 Critics say contingency theory creates the impression that the
organization is a captive of its environment, making attempts to
manage it useless.
 Summary
 The various theories have shown different approaches to managing
people and organization:
 Management as a discipline: its practice implied effective
management of both people and organizations
 People as “a pair of hands” or as a commodity or a machine
 People as more than ‘a pair of hands’ and having feelings and
attitudes that affect productivity
 People seen as having ‘minds’ to think and therefore needed to be
involved in decision-making.
 Organizations seen as social systems made up various interdependent
subsystems.
 Successful organizations are characterized by good ‘fit’ among 7S’s:
strategy, structure, systems, staff, style, skills and super-ordinate
goals.
 Summary (cont’d)
 Management is an interdisciplinary and
international field that has evolved over the years.
 The operational approach has evolved from

scientific management to operations management.

 Quality advocates teach the strategic importance of

high-quality goods and services.

 Management has turned to the human factor in the

human relations movement and organizational

behavior approach.
 Summary (cont’d)
 Under the systems approach, modern
organizations are viewed as open systems.
 The contingency approach stresses situational

appropriateness rather than universal

principles.
A quick-fix is unlikely to solve an
organization’s unique problems.
 Review Questions
 Contrast Fayol’s concepts with the human relations concepts and
draw conclusions on the management of modern organisations.
Explain why it became important to consider workers as having
“minds”.
 What was Henri Fayol’s contribution to the evolution of
management thought?
 How did F. W. Taylor go about improving job performance
through scientific management?
 What circumstances gave rise to the human relations movement?
 What is an open system, and why is it useful to view
organizations as open systems?.
THANK YOU