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MGT 102-Engineering Management

BSCE-4B (Group 1)
Leader: Buctuan, Jonathan I M.
Members:
Baldeviso, Fred Mark R. Dacuno, Ray L.
Borja, Maria Ivy R. Datwin, Jobert P.
Brazil, Glaiza A. Flores, Glaidel L.
Cabornay, Jayson A. Globio, John Mark L.

Classical School of Thought

According to Pindur, F., Rogers, S.E., & Kim, P.S. (1995) [The history of management: A
global perspective. Journal of Management History, 1] the oldest and most widely accepted
school of thought in the field of management is called the “classical management movement.”
Between 1885 and 1940, this movement evolved in order to provide a scientific and rational
foundation for managing organizations. It originated when the Industrial Revolution caused
individuals to come from working in small shops or homes to factories. Industrialization led to
the need for efficiency in planning, organizing, and controlling/impacting work tasks.

I. Scientific Management – Focused on matching people and tasks to maximize efficiency.

A. Frederick Winslow Taylor (1856-1915)

 He was one of the first management consultants.

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 Taylor was one of the intellectual leaders of the Efficiency Movement and his ideas,
broadly conceived, were highly influential in the Progressive Era (1890s-1920s).
 Taylor summed up his efficiency techniques in his 1911 book The Principles of Scientific
Management.
 His pioneering work in applying engineering principles to the work done on the factory
floor was instrumental in the creation and development of the branch of engineering
that is now known as industrial engineering.
 Management Theory
 Taylor thought that by analyzing work, the "one best way" to do it would be
found. He is most remembered for developing the stopwatch time study, which
combined with Frank Gilbreth's motion study methods, later became the field
of time and motion study. He broke a job into its component parts and measured
each to the hundredth of a minute. One of his most famous studies involved
shovels. He noticed that workers used the same shovel for all materials. He
determined that the most effective load was 21½ lb, and found or designed
shovels that for each material would scoop up that amount. He was generally
unsuccessful in getting his concepts applied, and was dismissed from Bethlehem
Steel. Nevertheless, Taylor was able to convince workers who used shovels and
whose compensation was tied to how much they produced to adopt his advice
about the optimum way to shovel by breaking the movements down into their
component elements and recommending better ways to perform these
movements. It was largely through the efforts of his disciples (most notably H.L.
Gantt) that industry came to implement his ideas. Moreover, the book he wrote
after parting company with Bethlehem Steel, Shop Management, sold well.

 Taylor's Scientific Management Consisted of 4 Principles:

1. They develop a science for each element of a man's work, which replaces the
old rule-of-thumb method.
2. They scientifically select and then train, teach, and develop the workman,
whereas in the past he chose his own work and trained himself as best he
could.
3. They heartily cooperate with the men so as to ensure all of the work being
done in accordance with the principles of the science which has been
developed.
4. There is an almost equal division of the work and the responsibility between
the management and the workmen. The management take over all work for
which they are better fitted than the workmen, while in the past almost all of
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the work and the greater part of the responsibility were thrown upon the
men.
 Taylor described how workers deliberately work slowly, or “sodier”, to protect
their interests. According to Taylor, there were three reasons for the inefficiency:
1. The fallacy, which has from time immemorial been almost universal among
workmen, that a material increase in the output of each man or each
machine in the trade would result in the end in throwing a large number of
men out of work.
2. The defective systems of management which are in common use, and which
make it necessary for each workman to soldier, or work slowly, in order that
he may protect his own best interests.
3. The inefficient rule-of-thumb methods, which are still almost universal in all
trades, and in practicing which our workmen waste a large part of their
effort.

B. Henry Laurence Gantt (1861-1919)

 The Gantt chart – It provides a graphic schedule for the planning and controlling of
work, and recording progress towards stages of a project. The chart has a modern
variation, Program Evaluation and Review Technique (PERT).
A Gantt chart showing three kinds of schedule dependencies (in red) and percent
complete indications.
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Gantt created many different types of charts. He designed his charts so that foremen or
other supervisors could quickly know whether production was on schedule, ahead of
schedule, or behind schedule. Modern project management software includes this
critical function.

Gantt (1903) describes 2 Types of Balances:

1. The "man’s record", which shows what each worker should do and did do, and
2. The "daily balance of work", which shows the amount of work to be done and
the amount that is done.

 Industrial Efficiency – Industrial efficiency can only be produced by the application of

scientific analysis to all aspects of the work in progress. The industrial management role
is to improve the system by eliminating chance and accidents.
 The Task and Bonus System – He linked the bonus paid to managers to how well they
taught their employees to improve performance.
 The social responsibility of business – He believed that businesses have obligations to
the welfare of the society in which they operate.

C. Harrington Emerson (1853-1931)

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 The cause of starting Emerson's "betterment work" as it was officially called, having
been a strike, his first and most important aim was to establish a basis for permanent
harmony by introducing an "individual effort and bonus system." Increased supervision
of the men was to be undertaken, and for good work special rewards were to be given.
Accordingly, time studies were made (about 60,000 by March, 1907), tasks were set,
and bonuses offered.
There were several distinguishing features which marked this phase of scientific
management as it was introduced on the Santa Fe:
 First, extreme emphasis was laid on the individual character of the relations of
men and management: "The schedule is a moral contract or agreement with the
men as to a particular machine operation, rate of wages and time. Any change in
men [etc.] calls for a new schedule."
 Second, there was a lack of insistence on the selection of unusual men: "The
standard time set is reasonable, and one that can be reached without
extraordinary effort; is, in fact, such time as a good foreman would demand."
 Third, bonuses were paid to foremen. Thus the Santa Fe management sought to
make of its employees industrious, well paid, and loyal workmen.
 Emerson's system of efficiency and scientific management.
Emerson distinguished his system from scientific management based on 3
characteristics:
1. He calls his system "efficiency" rather than "scientific management."

2. He opposed functional management with its numerous heads, and substitutes

for it the "line and staff" idea, under which there is but one boss (the line). The
functional experts (or staff) whom Emerson employs are not executive officers,
but simply advise the single responsible authority; and it is the latter who puts all
plans into practice through command over his "line" subordinates. The idea is to
avoid creating too many bosses, and yet operate under expert advice.
3. Emerson uses a wage system which bases remuneration partly upon the
"efficiency per cent" of the employee. Standard times are set on the basis of
time study analysis, and the workman who just completes the same in the
allotted time is credited with 100 per cent efficiency.
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II. Administrative Management – Focused on identifying principles that will lead to the
creation of the most efficient system of organization and management.
A. Henri Fayol (1841-1925)

 He is considered as the Father of Administrative Management Theory.

 Developed a general theory of business administration that is often called Fayolism.
 Fayolism- A theory of management that analyzed and synthesized the role of
management in organizations.
 14 Principles of Management:
1. Division of Work – Work should be divided among individuals and groups to
ensure that effort and attention are focused on special portions of the task.
Fayol presented work specialization as the best way to use the human resources
of the organization.
2. Authority and Responsibility – The concepts of authority and responsibility are
closely related. Authority was defined by Fayol as the right to give orders and the
power to exact obedience. Responsibility involves being accountable, and is
therefore naturally associated with authority. Whoever assumes authority also
assumes responsibility.
3. Discipline – A successful organization requires the common effort of workers.
Penalties should be applied judiciously to encourage this common effort.
4. Unity of Command – Workers should receive orders from only one manager.
5. Unity of Direction – The entire organization should be moving towards a
common objective in a common direction.
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6. Subordination of Individual Interests to the General Interests – The interests of

one person should not take priority over the interests of the organization as a
whole.
7. Remuneration of Employees/Staff – Many variables, such as cost of living, supply
of qualified personnel, general business conditions, and success of the business,
should be considered in determining a worker’s rate of pay.
8. Centralization – Fayol defined centralization as lowering the importance of the
subordinate role. Decentralization is increasing the importance. The degree to
which centralization or decentralization should be adopted depends on the
specific organization in which the manager is working.
9. Scalar Chain – Managers in hierarchies are part of a chain like authority scale.
Each manager, from the first line supervisor to the president, possesses certain
amounts of authority. The President possesses the most authority; the first line
supervisor the least. Lower level managers should always keep upper level
managers informed of their work activities. The existence of a scalar chain and
adherence to it are necessary if the organization is to be successful.
10. Order – For the sake of efficiency and coordination, all materials and people
related to a specific kind of work should be treated as equally as possible.
11. Equity – All employees should be treated as equally as possible.
12. Stability of Tenure of Personnel – Retaining productive employees should always
be a high priority of management. Recruitment and Selection Costs, as well as
increased product-reject rates are usually associated with hiring new workers.
13. Initiative – Management should take steps to encourage worker initiative, which
is defined as new or additional work activity undertaken through self-direction.
14. Espirit De Corps (Spirit of the Group) – Management should encourage harmony
and general good feelings among employees.
 Fayol identified 6 Types of Independent Activities in an Organization:
1. Technical activities (production and manufacturing).
2. Commercial activities (buying, selling and exchange).
3. Financial activities (collection and utilization of capital).
4. Security activities (protection/safeguarding of people and property).
5. Accounting activities (keeping records of cost, benefits, and expenses in
monetary terms).
6. Managerial or Administrative activities (planning, organizing ......).
According to Fayol, activities 1 to 5 are carried out through activity 6 which consists of
the 5 Functions of Management:
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1. Planning – Assessing future and making provision.

2. Organizing – Organization of material and human being to the functioning of an
organization.
3. Commanding – Contacting with people/staff and directing functions.
4. Coordinating – Harmonizing all the activities of an organization.
5. Controlling – Ensuring that everything happens/occurs in accordance with the
established rules.
He viewed that these six groups of activities are essential for the functioning of all types
of organizations: large or small, simple or complex, or private or government. Similarly,
the first five sets of activities require only the minimum amount of explanation (can be
handled easily) and the sixth one require further explanation. Thus, according to Fayol,
the five tasks are crucial to any type of organization. He regarded planning as the most
crucial function of management.
 Qualities and Skills of a Manager:
1. Physical quality
2. Mental quality
3. Moral education
4. Special knowledge
5. Experience

B. James D. Mooney (1884-1957) & Alan C. Reily

 Their primary piece of literature is entitled Onward Industry! The Principles of

Organization and Their Significance to Modern Industry, which was published in 1931.
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They emphasized the importance of organizational structure being governed by

universal principles. According to Mooney and Reiley, orderly correlation of these
principles would lead to more efficient applicability to all areas of collective human
effort. They created 3 Universal Principles:
1. The Coordinative Principle – Known as the master principle, involves an
organization coordinating the tasks of multiple workers in order to accomplish
their organizational objectives. According to Mooney and Reiley, authority
figures should be responsible for coordinating power. This is done by managing
formal authority up and down the chain of command.
2. The Functional Principle – focuses on horizontal differences based on types of
tasks. It identifies the method of each individual’s work duties and how they
contribute to the organization’s goals.
3. The Scalar Principle – Refers to the principle of hierarchy, which was a term first
utilized by Fayol. Tasks are assigned based on levels of authority arranged
vertically in the organization. It is created by delegating, which entails authority
from a higher official to a lower official.
 According to these two theorists, a true leader should be distinguished based on their
method of delegation.
 According to Mooney and Reiley, “The subordinate is always responsible to his
immediate supervisor for doing the job, the superior remains responsible for getting it
done, and this same relationship, based on coordinated responsibility, is repeated up to
the top leader, whose authority makes him responsible for the whole”. These theorists
emphasized a principle governing the superior-subordinate relationship identified as the
“exception principle.” It states, “Subordinates should refer only the few unusual and
difficult problems to their superiors while handling all easy and routine problems
themselves”.
 According to Mooney and Reiley, the functional principle focuses on horizontal
differences based on types of tasks. It identifies the method of each individual’s work
duties and how they contribute to the organization’s goals. One area of functional
differentiation is the line and staff principle, which “refers to the creation of staff units
to advise or support line authorities in the performance of their duties”. They
emphasized that staff units should not be delegated to command authority over the line
units. Although they were not familiar with Fayol’s work, they developed some similar
ideas. They both believed that “coordination, hierarchy, and functional differentiation
may be universal principles but their application is not”. These theorists emphasized
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how principles should never be responsible for solving all of the issues present in an
organization.

C. Luther H. Gulick (1892-1993)

 Administrative Management Theory

 Luther Gulick is known for applying administrative principles to government. In
the early 1900s, the movement to reform the government structure and utilize
business methods in public administration was initiated, which had a great
influence on Gulick’s role.
 Gulick expand upon Fayol, Moony, and Reily’s basic theoretical framework and
added his own conceptual distinctions. One example is his idea that government
agencies can be departmentalized based on the process, individuals, place, or
purpose. He emphasized the importance of chief executives implementing closer
supervision over administrative departments than the heads of holding
companies. He also saw a larger need for coordinating due to a greater level of
interaction between government departments than between corporate
divisions. According to Gulick, all organizations should divide labor no matter
what their size or level of complexity. He analyzed how coordination can be
accomplished through applying the functional and scalar principle. He
emphasized departmentalization, which describes the scalar principle. It is
presented by an organization chart demonstrating the level of control each
manager has and describes reporting within the organizational hierarchy.
 Gulick thought that an organization’s design should be developed by various
principles. The span of control principle states, “The number of individuals
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reporting to a superior should be limited to the number he or she can supervise

effectively, given limited time and energy”. He pointed out that there is not one
correct span of control for all superior-subordinate relationships. Gulick also
valued the unity of command principle, which is when each worker takes orders
from one superior. He emphasized the homogeneity principle which states,
“Work should be divided so that the work of a single organizational unit is as
homogeneous in character as possible”. He valued he line-staff principle;
however, he disagreed with the traditional definition that staff agencies are
made to guide line agencies and are never allowed to give commands.
 The Cooperative Enterprise
 According to Gulick, pluralistic society and democratic government go hand in
hand. Together, they are able to extract a vast number of variables which then
bring in a wide variety of ideas for positive changes. Government equals to
security for both rich and poor. It reduces crimes and clashes. This is what Gulick
points out in his writing.
 According to him, arrogant people can coexist together only because the
government is their mediator. Businesses sometimes take the wrong path,
making the market system fail. The mess can only be cleaned by the
government. After all, every crisis needs intervention. But this does not mean
that the power of the government should remain centralized. Instead, effort
should be made in inviting the private businesses to work with those from public
administrations for causes that help all in the country. He calls it cooperative
enterprise.
 Planning must be central to it, but government should not do it in centralized
manner. Instead effort must be made in hearing groups interested in this plan. In
other words, planning should be done with the help of these private businesses,
experts of the field, interest groups and of course, the public. Working towards
something new is challenging especially when it is beyond the scope of expert's
knowledge. That is why, Gulick suggests implementation of adjustment.
 Ideal Government
 Gulick had his own definition for ideal government. According to him, it must
have unified management for efficiency and democratic values. This is how he
described it:
1. Chief executive and his officials design the policy. They create the proposal to

be sent to legislatures.
2. The legislatures review it for either approval or rejection.
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3. If the policy is approved, the executive embarks on making it effective.

4. The citizens are involved in influencing how the policy is designed and

approved through interest groups and political parties.

 Role of Administration
 Administration can never be separate from government. That is what Gulick
preached. In his words, the idea is impractical and impossible. This is because the
administration implements policies, builds programs, allocates finance,
coordinates and even is involved in governmental auditing process. In every way,
all of them prove that administration is fully attached to government. Do you see
the reality now? People during his time were stubbornly preaching that
administration was to be strictly separate from the government. By listing the
roles of administrators, Gulick proved that they were not being practical in their
statement.
 Yet according to him, politicians are somewhat different from such officials in
the sense that they have the right to take the ultimate decisions about the
policies. So it is more like politicians do the thinking and administrators act on it.
For the system to have a flow, there must be a good understanding of how
things work. That is why, he adds that administrators must learn the strategies of
the political side of the government system. He probably was the first person to
recommend a change in the definition of public administrator.
 Roles of Government Officials
 Gulick also called for a change in the description of major government officials.
How they must be?
1. Politician – They maintain the balance in the system by influencing the office
holders, knowledge workers and interest groups to compromise with one
another.
2. Political appointee – This person is creates link between the government
knowledge worker and public.
3. Administrator – He studies the policy and then interprets, and implements it.
Despite the fact that he takes the action, if the policy fails he is not
responsible.
4. Technician – He deals only with technical concepts.
 Principles of Administrative Reform
 During Gulick's time, federal problems were solved through electoral process
and yes, this happened frequently. On the other hand, agencies and committees
had more than one leader. To make things worse, people did not think they
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required a true expert. They believed anyone could lead. Gulick called this
formula flawed because it failed to produce the government people were hoping
for and agencies never got out of the tent of energy deficiency. Simply put, it
was a true situation of too many cooks spoiling the broth. To make things worse,
the cooks were inexperienced. That is the reason why Gulick called for a reform
through the 11 principles given below:
1. All projects that match should have only one unit.
2. Agencies must be combined into a small number department.
3. Each unit must have its own skilled, experienced and responsible leader.
4. The leader's responsibility should match his power.
5. The top portion of every major department must employ officials to evaluate
performance.
6. The functions must be approved by a special official.
7. Minimize the number of elected officials.
8. Administrative tasks should not be given to those in the boards and
commissions. They are to be connected to only quasi legislative and judicial
projects.
9. An elected chief executive must be the main leader of all the administrative
tasks. He is responsible to voters or representatives.
10. Administrative department leaders must be selected or rejected by only chief
executive.
11. The chief executive must employ a group of officials to research on the
departments and look for ways to bring improvement in operations.
 Gulick’s “Notes on the Theory of Organization”
 Gulick is well-known for his essay entitled, “Notes on the Theory of
Organization.” Gulick wrote this briefing paper, and then he and Lyndall Urwick
included this paper in a collection of articles published under that well-known
report entitled Papers on the Science of Administration. This collection included
other theorists’ work such as Henri Fayol and Mary Parker Follett.
 In this essay, Gulick covered many important topics that are prevalent in
literature pertaining to the administrative management theory. One of the
primary ideas he incorporated that is fairly consistent across literature is the idea
that specialized efforts need planning and coordination. Another commonality in
the literature he presents is the emphasis on the importance of proper
reporting. The last main consistency was his idea related to aggregating the work
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units and how they should be organized effectively so it does not disrupt the
principle of homogeneity.

D. Max Weber (1864-1920)

 The work of Weber runs chronologically parallel to that of Fayol and Taylor.
 Weber used the concept of "bureaucracy" as an ideal organizational arrangement for
the administration of large-scale organizations.
 Some of Weber's essential elements included division of labor, and chain of command.
He also believed that selection should be based on technical qualifications,
officials'/managers' appointments should be based on qualifications, managers should
not be owners, and impersonal and uniform rules should be applied.

E. Peter Drucker (1909-2005)

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 Drucker made an enduring contribution to understanding the role of manager in a

business society.
 Unlike the previous Fayolian process texts, Drucker developed 3 Broader Managerial
Functions:
1. Managing A Business
2. Managing Managers
3. Managing Workers And Work
He proposed that in every decision the manager must put economic considerations first.
Drucker recognized that there may be other non-economic consequences of managerial
decision, but that the emphasis should still be placed on economic performance.

III. Bureaucratic Management – Focused on the ideal form of organization.

A. Max Weber (1864-1920)

 He is one of the most important thinkers in modern organizational theory, he is also the
father of the bureaucratic management theory.
 He described bureaucratic organization as the most rational means for managing human
society and control over human beings.
 Weber specifies that both the public and private bureaucracy is based on specific
competencies of various offices, such as

1. A rigid division of labor.

2. A chain of command is established in which the capacity to coerce is specified
and restricted by regulations.
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3. There is a regular and continuous execution of the assigned tasks by people

qualified by education and training to perform them.
 Bureaucratic Management Theory
 Weber's theory of bureaucratic management has 2 essential elements.
1. It entails structuring an organization into a hierarchy.
Organizational Hierarchy
Arrangement of the organization by level of authority in reference to the
levels above and below it. For example, a vice-president of marketing is
below the company's president, at the same level as the company's vice
president of sales, and above the supervisor of the company's social media
department. Each level answers to the level above it, with the ultimate
leader of the organization at the top.
2. The organization and its members are governed by clearly defined rational-legal
decision-making rules. Each element helps an organization to achieve its goals.

B. Karl Marx (1818-1883)

 Karl Marx theorized about the role and function of bureaucracy in his Critique of Hegel's
Philosophy of Right, published in 1843.

 Karl Marx, although he never used the term "bureaucracy" himself. Marx by contrast
was opposed to the bureaucracy.
 He saw the development of bureaucracy in government as a natural counterpart to the
development of the corporation in private society.
 Marx posited that while the corporation and government bureaucracy existed in
seeming opposition, in actuality they mutually relied on one another to exist.
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 He wrote that "The Corporation is civil society's attempt to become state; but the
bureaucracy is the state which has really made itself into civil society."

C. John Still Mill (1806-1973)

 English philosopher, economist, and exponent of Utilitarianism. He was prominent as a

publicist in the reforming age of the 19th century, and remains of lasting interest as a
logician and an ethical theorist.
 Writing in the early 1860s, political scientist John Stuart Mill theorized that successful
monarchies were essentially bureaucracies, and found evidence of their existence
in Imperial China, the Russian Empire, and the regimes of Europe.
 Mill referred to bureaucracy as a distinct form of government, separate from
representative democracy.
 He believed bureaucracies had certain advantages, most importantly the accumulation
of experience in those who actually conduct the affairs. Nevertheless, he thought
bureaucracy as a form of governance compared poorly to representative government,
as it relied on appointment rather than direct election.

D. Woodrow Wilson (1856-1924)

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 28th President of the United States of America.

 Wilson did not advocate a replacement of rule by the governed; he simply advised
"Administrative questions are not political questions. Although politics sets the tasks for
administration, it should not be suffered to manipulate its offices". This essay became
the foundation for the study of public administration in America.

E. Ludwig von Mises (1881-1973)

 Mises saw bureaucratic processes at work in both the private and public spheres;
however he believed that bureaucratization in the private sphere could only occur as a
consequence of government interference.
 He wrote that "No private enterprise will ever fall prey to bureaucratic methods of
management if it is operated with the sole aim of making profit.

F. Robert K. Merton
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 American sociologist Robert K. Merton expanded on Weber's theories of bureaucracy in

his work Social Theory and Social Structure, published in 1957.
 While Merton agreed with certain aspects of Weber's analysis, he also considered the
dysfunctional aspects of bureaucracy, which he attributed to a "trained incapacity"
resulting from "overconformity."
 He saw bureaucrats as more likely to defend their own entrenched interests than to act
to benefit the organization as a whole.
He also believed bureaucrats took pride in their craft, which led them to resist changes
in established routines.
 Merton noted that bureaucrats emphasized formality over interpersonal relationships,
and had been trained to ignore the special circumstances of particular cases, causing
them to come across as "arrogant" and "haughty."