Historical Background of Management

Many fascinating examples from history illustrate how management

has been practiced for thousands of years.
1. ANCIENT MANAGEMENT
Organizations and managers have existed for thousands of years.
The Egyptian pyramids and the Great Wall of China were projects of
tremendous scope and magnitude, requiring the efforts of tens of
thousands of people. How was it possible for these projects to be
completed successfully? The answer is management. Regardless of
the titles given to managers throughout history, someone has
always had to plan what needs to be accomplished, organize people
and materials, lead and direct workers, and impose controls to
ensure that goals were attained as planned.
Examples of early management practices can also be seen by
studying the Arsenal of Venice. Assembly lines, accounting systems,
and personnel functions are only a few of the processes and
activities used in business in the fifteenth century that are common
to today’s organizations as well.
• ADAM SMITH
Adam Smith, author of the classical economics doctrine he
published “The Wealth of Nations “ in 1776, argued brilliantly for
the economic advantages that he believed division of labor (the
breakdown of jobs into narrow, repetitive tasks) would bring to
organizations and society to increase the productivity of workers.
• INDUSTRIAL REVOLUTION
The Industrial Revolution is possibly the most important pre-
twentieth-century influence on management. The introduction of
machine powers combined with the division of labor made large,
efficient factories possible. Planning, organizing, leading, and
controlling became necessary activities.
Development of Major Management Theories

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2. SCIENTIFIC MANAGEMENT
Scientific management is defined as the use of the scientific method
to determine the “one best way” for a job to be done.

A. Fredrick Winslow Taylor

Fredrick W. Taylor is known as the “father” of scientific
management. He published Principles of Management in
1911 Taylor’s work at the Midvale and Bethlehem Steel
companies stimulated his interest in improving efficiency.
 Putting the right person on the job with the
correct tools and equipment.
 Having a standardized method of doing the job.
 Providing an economic incentive to the worker.
Taylor’s gives 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

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 between management and workers.
Management takes over all work for which it is
better fitted than the workers.

B. Frank and Lillian Gilbreth

Frank and Lillian Gilbreth were inspired by Taylor’s work and
proceeded to study and develop their own methods of scientific
management.
 Frank Gilbreth is probably best known for
his experiments in reducing the number
of motions in bricklaying.
 The Gilbreth were among the first to use
motion picture films to study hand and
body motions in order to eliminate
wasteful motions.
 They also devised a classification scheme
to label 17 basic hand motions called
therbligs (Gilbreth spelled backward,
with the th transposed).

C. How Do Today’s Managers Use Scientific Management?

Guidelines devised by Taylor and others to improve
production efficiency are still used in today’s organizations.
However, current management practice is not restricted to
scientific management practices alone. Elements of scientific
management still used include:
1. Using time and motion studies
2. Hiring best qualified workers
3. Designing incentive systems based on output

3. GENERAL ADMINISTRATIVE THEORY

This group of writers, who focused on the entire organization,
developed more general theories of what managers do and what
constitutes good management practice.
A. Henri Fayol
Fayol was most prominent proponents of the general
administrative approach.Henri Fayol, who was a

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 contemporary of Frederick W. Taylor, was the managing
director of a large French coal-mining firm.

 Fayol focused on activities common to all

managers.
 He described the practice of management
as distinct from other typical business
functions.
 He stated 14 principles of management
(fundamental or universal truths of
management that can be taught in
schools.
Fayol’s 14 Principles of Management:
1. Division of work.
2. Authority.
3. Discipline.
4. Unity of command.
5. Unity of direction.
6. Subordination of individual
interests to the general interest.
7. Remuneration.
8. Centralization.
9. Scalar chain.
10. Order.
11. Equity.
12. Stability of tenure of
personnel.
13. Initiative.
14. Esprit de corps.
B. Max Weber
Max Weber was a German sociologist who wrote in the
early twentieth century.
 Weber developed a theory of authority
structures and described organizational
activity based on authority relations.
 He described the ideal form of
organization as a bureaucracy marked by
division of labor, a clearly defined

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 hierarchy, detailed rules and regulations,
and impersonal relationships.

Weber’s Ideal Bureaucracy

C. How Do Today’s Managers Use General Administrative

Theories?
Some current management concepts and theories can be
traced to the work of the general administrative theorists.

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 1. The functional view of a manager’s job relates to Henri
Fayol’s concept of management.
2. Weber’s bureaucratic characteristics are evident in
many of today’s large organizations—even in highly
flexible organizations that employ talented
professionals. Some bureaucratic mechanisms are
necessary in highly innovative organizations to ensure
that resources are used efficiently and effectively.

4. QUANTITATIVE APPROACH TO MANAGEMENT

The quantitative approach to management, sometimes known as
operations research or management science, uses quantitative
techniques to improve decision making. This approach includes
applications of statistics, optimization models, information models,
and computer simulations.
A. Important Contributions.
1. The quantitative approach originated during World War
II as mathematical and statistical solutions to military
problems were developed for wartime use.
2. As often happens after wartime, methods that were
developed during World War II to conduct military
affairs were applied to private industry following the
war. For instance, a group of military officers—the Whiz
Kids—used quantitative methods to improve decision
making at Ford Motor Company in the mid-1940s.
B. How Do Today’s Managers Use the Quantitative
Approach?
1. The quantitative approach has contributed most
directly to managerial decision making, particularly in
planning and controlling.
2. The availability of sophisticated computer software
programs has made the use of quantitative techniques
more feasible for managers.

 TOWARD UNDERSTANDING ORGANIZATIONAL

BEHAVIOR
The field of study concerned with the actions (behaviors) of people

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at work is organizational behavior. Organizational behavior (OB)
research has contributed much of what we know about human
resources management and contemporary views of motivation,
leadership, trust, teamwork, and conflict management.

A. Early Organizational Behavior Advocates

Four individuals—Robert Owen, Hugo Munsterberg, Mary
Parker Follett, and Chester Barnard—were early advocates of
the OB approach. Their ideas served as the foundation for
employee selection procedures, motivation programs, work
teams, and organization-environment management
techniques.

Early Advocates of OB

B. The Hawthorne Studies

The most important contribution to the development of
organizational behavior.A series of productivity experiments
conducted at Western Electric from 1927 to 1932s.
• Experimental findings

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 1. At Western Electric Company’s Hawthorne Works in
Cicero, Illinois, were initially devised as a scientific
management experiment to assess the impact of
changes in various physical environment variables on
employee productivity.
2. After Harvard professor Elton Mayo and his
associates joined the study as consultants,
other experiments were included to look at
redesigning jobs, make changes in workday
and workweek length, introduce rest periods,
and introduce individual versus group wage
plans.
• Research conclusion
1. The researchers concluded that social norms or
group standards were key determinants of
individual work behavior.
2. Although not without criticism (concerning
procedures, analyses of findings, and the
conclusions), the Hawthorne Studies
stimulated interest in human behavior in
organizational settings.
C. How Do Today’s Managers Use the Behavioral
Approach?
1. The behavioral approach assists managers in designing
jobs that motivate workers, in working with employee
teams, and in facilitating the flow of communication
within organizations.
2. The behavioral approach provides the foundation for
current theories of motivation, leadership, and group
behavior and development.

5. THE SYSTEMS APPROACH

During the 1960s researchers began to analyze organizations from
a systems perspective based on the physical sciences.
 System
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 open and closed.

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  Closed Systems
A closed system is not influenced by and does not interact
with its environment (all system input and output is
internal).
 Open Systems
An open system Dynamically interact to their environments
by taking in inputs and transforming them into outputs that
are distributed into their environments.
The Organization as an Open System

• Implications of the Systems Approach

1. Using the systems approach, managers envision an
organization as a body with many interdependent
parts, each of which is important to the well-being
of the organization as a whole.

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 2. Managers coordinate the work activities of the
various parts of the organization, realizing that
decisions and actions taken in one organizational
area will affect other areas.
3. The systems approach recognizes that
organizations are not self-contained; they rely on
and are affected by factors in their external
environment.

6. THE CONTINGENCY APPROACH

Also sometimes called the situational approach.The contingency
approach recognizes that different organizations require different
ways of managing.
A. There is no one universally applicable set of
management principles (rules) by which to manage
organizations.
B. Organizations are individually different, face
different situations (contingency variables), and
require different ways of managing.
• Popular Contingency Variables
 Organization size
As size increases, so do the problems of coordination.
 Routineness of task technology
Routine technologies require organizational structures,
leadership styles, and control systems that differ
from those required by customized or nonroutine
technologies.
 Environmental uncertainty
What works best in a stable and predictable
environment may be totally inappropriate in a rapidly
changing and unpredictable environment.
 Individual differences
Individuals differ in terms of their desire for growth,
autonomy, tolerance of ambiguity, and expectations.

 CURRENT TRENDS AND ISSUES

After the study of the history and development of
management theories, students can better understand how current

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concepts and practices are changing the way managers do their
jobs today.

A. Globalization.
Organizational operations are no longer limited by national
borders. Managers throughout the world must deal with new
opportunities and challenges inherent in the globalization of
business.
1. Working with people from different cultures
2. Coping with anticapitalist backlash
3. Movement of jobs to countries with low-cost
labor

B. Ethics.
Cases of corporate lying, misrepresentations, and financial
manipulations have been widespread in recent years.
Managers of firms such as Enron, ImClone, Global Crossing,
and Tyco International have placed their own self-interest
ahead of other stakeholders’ welfare.
1. While most managers continue to behave in a highly
ethical manner, abuses suggest a need to “upgrade”
ethical standards.
2. Ethics education is increasingly emphasized in college
curricula today.
3. Organizations are taking a more active role in creating
and using codes of ethics, ethics training programs,
and ethical hiring procedures.

C. Workforce Diversity
Refers to a workforce that is heterogeneous in terms of
more gender, race, ethnicity, age, and other characteristics
that reflect differences.
1. Workforce diversity is a global issue.
2. The assimilation (“melting pot”) model used before the
early 1980s has been replaced by the recognition and
celebration of differences.

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 3. Accommodating diverse groups of people by
addressing different lifestyles, family needs, and work
styles is a major challenge for today’s managers.
4. Wise managers value diversity as an asset in bringing
a broad range of viewpoints and problem-solving skills
to an organization.

D. Entrepreneurship
Is the process whereby an individual or group of individuals
use organized efforts to pursue opportunities to create value
and grow by fulfilling wants and needs through innovation
and uniqueness, no matter what resources the entrepreneur
currently has.
• Entrepreneurship process
Three important themes stand out in this definition:
a. The pursuit of opportunities
b. Innovation in products, services, or business
methods
c. Desire for continual growth of the organization
E. Managing in an E-Business World
 E-business (electronic business) is a comprehensive
term describing the way an organization does its work
by using electronic (Internet-based) linkages with its
key constituencies in order to efficiently and effectively
achieve its goals.
 While critics questioned the viability of Internet-based
companies (dot-coms) after the high-tech implosion in
2000 and 2001, E-business is here to stay.
 E-commerce (electronic commerce) is the sales and
marketing component of e-business.
o Categories of E-Business
a. An e-business enhanced organization uses the
Internet to enhance (expand, not replace)
its traditional ways of doing business. This type
of organization sets up e-business capabilities
(usually e-commerce).
b. An e-business enabled organization uses the
Internet to enable the company to perform its

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 traditional business functions more efficiently
and effectively, but it does not sell products or
services on the Internet.
c. A total e-business is made possible by, and
revolves around, the Internet.

Categories of E-Business
F. Learning Organizations.
An organization that has developed the capacity to
continuously learn, adapt, and change.
G. Knowledge Organizations.
Knowledge management involves cultivating a learning
culture where organizational members systematically gather
knowledge and share it with others in the organization so as
to achieve better performance.
I. Quality Management.
1. Quality management is a philosophy of management

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 that is driven by continual improvement and response
to customer needs and expectations.
2. Total Quality Management inspired by a small group of
quality experts, including W. Edwards Deming, who
was one of its chief proponents.
3. Total Quality Management represents a counterpoint to
earlier management theorists who believed that low
costs were the only road to increased productivity.
4. The objective of quality management is to create
an organization committed to continuous
improvement in work processes.

Functions of Management
Management operates through various functions, often classified
as planning, organizing, leading/motivating, and controlling.
• Planning: Deciding what needs to happen in the future (today, next
week, next month, next year, over the next 5 years, etc.) and
generating plans for action.
• Organizing: (Implementation) making optimum use of the
resources required to enable the successful carrying out of plans.
• Staffing: Job analyzing, recruitment, and hiring individuals for
appropriate jobs.
• Leading/Motivating: Exhibiting leadership and motivational skills
in order to encourage others to play an effective part in achieving
plans and ensure willing participation in the organization on the
parts of workers.
• Controlling/Monitoring, checking progress against plans, which
may need modification based on feedback.

Management Functions

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