Evolution of Management Theory and Practice Pre-Classical Period: The Systematic Approach In pre-industrial society, work was done

by craftsmen. There was no employer-employee relationship as known today Relationship was along personal, familial lines. It was basically feudal. It was only upon the advent of the Industrial Revolution with the "Factory System" as centerpiece that modem management practice came about. In U.S., 1886 marked the origins of the study of modem management thought and practice. It was in this year, that Sears, Roebuck and Company was founded by a railroad station agent, Richard W. Sears; the first Coca-Cola was served in Atlanta; Avon Products, Cosmopolitan Magazine, Johnson & Johnson, Westinghouse, Munsingwear, and UpJohn were founded. Henry R. Towne (1844-1924), co-founder of Yale Lock Co., presented a paper titled "The Engineer as an Economist" to the American Society of Mechanical Engineers (ASME). Towne proposed the creation of an Economic Section in ASME to act as forum and clearing house for "shop management" which would deal with the subjects of organization, "executive' management", responsibility and reports. He also proposed "shop accounting" which would treat the nuts and bolts of time and wage systems, cost determination and allocation, bookkeeping methods, and manufacturing accounting. The society would develop a body of literature, record members' experiences, and provide a forum for exchanging managers ideas. The proposal triggered the turning point in the formal study of management. F.W. Taylor was in the audience. And the study focused on manufacturing or shop floor of the factory. The approach was called Systematic Management. At the time, the work practices were chaotic as observed by Adam Smith. Poor coordination among subordinates and different levels of management caused frequent problems and breakdowns in the manufacturing process. The goals of systematic management approach aimed to: build specific procedures and processes into operations to ensure coordination; achieve economy in operations; provide adequate staffing; maintain inventories to meet consumer demand; set-up organizational controls. These goals of systematic management were achieved through: Definition of duties and responsibilities. Standardized techniques and methods of performing these duties. Specific means of gathering, handling, transmitting and analyzing information. Cost accounting Wage Production control systems to facilitate coordination and communications. Systematic management focused on internal operations because: problems and concerns were in the manufacturing processes. managers were under pressure to meet explosive growth in demand. managers were free to focus on internal issues of efficiency, partly because the government did not constrain business practices significantly. labor was poorly organized at this stage of industrial development. As a result, managers were oriented toward things and machineries, rather than people.

Systematic Management at a Glance Key Concepts Systematized manufacturing organizations. Coordination of procedures and processes built into internal operations. Emphasis on economical operations, inventory management, and cost control. Contributions Beginning of formal management in U.S. Promotions of efficient, uninterrupted production Limitations Ignored relationship between an organization and its environment. Ignored differences in manager's and workers' view Scientific Management Systematic management failed to lead to widespread production efficiency. Hence, the emergence of a new approach -- the classical. The classical approach breaks into two distinct areas - the lower - level management and higher level management analyses.

Scientific management comes out of the body of knowledge developed by Frederick W. Taylor, Frank and Lilian Gilbreth, and Henry L. Gantt. They studied mainly the jobs of workers at lower levels of organization or shop floor level. The second area makes a comprehensive higher-level analysis of the whole organization. It concentrates on the functions and processes of management of the entire organization. It gave birth to the Administrative Approach and its guru is Henri Fayol of France. The scientific management approach: is a philosophy about the relationship between people and worknot a technique or efficiency device. seeks to increase productivity and maximize efficiency. seeks to find the "one best way" to do a task. studies work methods, how a task can be structured to bring out the highest productivity from works, and set optimal performance standards. requires rational selection of workers and training for job development.

The Four Principles of Scientific Management F. W. Taylor came out with four principles of scientific management based on his experience, observation, and practices on the shop floor of the factory: 1.The true science of management and scientific methods of designing jobs should be developed. This is necessary to find the "one best way" of doing each task, In other words, management should develop a scientific approach for each element of an individual's work to replace rule-of-thumb guidelines. 2. Management should scientifically select, train, teach and develop each worker. The objective is to put the right person to the right job, or to place workers to the task best suited for him. 3. Management should be cooperative with workers to ensure that the job matches plans and principles. 4. Management should ensure an equal division of work and responsibility between managers and workers.' There should be cooperation and interdependence between managers and workers. Frederick W. Taylor (1856-1917) Father of Scientific Management R W. Taylor was an American industrial engineer who created a mental revolution about how to get things done in organizations. By unceasingly searching through observation and studies of actual work practices for "one best way" to do a task, he ended up as "the founder/father of scientific management. In sum, F. W. Taylor's contributions to management are: Job analysis Time-and-motion studies Standardization of processes Efficiency techniques Productivity measurements to systematically track labor costs Worker rest periods Training and development for both workers and managers Piece-rate method an approach to compensation whereby workers are paid for each unit of work completed Setting of standards of performance. Motivation by monetary considerations Frank (1868 - 1924) and Lillian Gilbreth (1878-1972) The Gilbreths - working as husband-and-wife teamsearched for the "one best way" in their study of work. They used time and motion study as their principal tool. The painstaking studies of work motions of various types of employees and the analysis of the time it took to perform those motions led to increased employee productivity. They also considered the study of the work environment and behavioral variables in addition to motion itself. Henry L. Gantt (1861-1919) Henry L. Gantt, perhaps Taylor's leading disciple, focused on "control" systems for shop-floor production scheduling. His main tool is known as Gantt Charts a graphic illustration (usually a bar graph or diagram) that indicates time allocations for sequential operations and traces progress, routing, scheduling, and. tasks in time intervals. It is a graphic means of coordinating the flow of work; a progress report in visual form that identifies stages of work and operational deadlines. Scientific Management at a Glance Key Concepts Analyzed work using scientific methods to determine the one best way to complete production tasks. Emphasized study of tasks, selection and training of workers, and cooperation between workers and management Contributions Improved factory productivity and efficiency

Introduced scientific analysis to workplace Piece-rate system equated worker rewards and performance Instilled cooperation between management and workers

Limitations Simplistic motivational assumptions. Workers viewed as part of a machine Potential for exploitation of labor Excluded senior (top) management tasks. Ignored relationship between the organization and its environment The Bureaucratic Management Approach Jesus Christ once said that the poor has been with us and will always be with us. We can say the same thing with bureaucracy. Bureaucracy has been with us and will always be with us even if the organizational structure becomes flatter, leaner and meaner. Bureaucracy was set up by the Chinese, Egyptian, Persians, Babylonians, Greeks, and the Romans in the administration of their empires. The Roman Catholic Church has the most enduring bureaucracy over the last 2000 years. However, it is only in the early decades of the 20th century that bureaucracy has been studied and a body of knowledge created to make it a distinct management approach. Bureaucracy is a model of organization based on defined positions, formal authority, and a regulated environment that includes well-documented rules, policies, and procedures. Bureaucratic management is a traditional management system that relies on rules, set hierarchy, a clear division of labor, and formal procedures and that focuses on the overall organizational structure. The strengths of bureaucratic management are consistency and predictability. The objectives of Weber's studies were to improve organizational structures used in large organizations and to design a blueprint of a structure that would help organizations achieve its objectives. Weber's concept of bureaucracy is conceptually close to Fayol's view of structure. Max Weber (1864-1920) A German sociologist, social historian and philosopher, Max Weber is considered the guru of bureaucracy because of his work on studies of Germany's government bureaucracy. He is said to be the "father of organization theory." Weber defined bureaucracy as, "the ideal pure form of organization". Seven Characteristics of Webers Bureaucracy 1. Rules Rules are formal guidelines for the behavior of employees while they are on the job. Rule's can provide the discipline for the organization to achieve its goals. Adherence to rules ensures uniformity of procedures and operations and helps maintain organizational stability, regardless of personal desires, whims and caprices of managers and employees. Efficiency and success will result by following the rules in a routine and unbiased manner. 2. Impersonality Reliance on rules leads to impersonality. Managers and employees are selected on the basis of their qualifications, either by examination or on the basis of their education or training. All employees are evaluated according to rules and objective data. An impersonal superior does not allow subjective personal or emotional considerations to color his evaluations of subordinates. The organization need not rely on one particular individual. 3. Division of Labor The division of labor is a process of dividing duties and functions into simpler, more specialized tasks. Managers and employees are assigned and perform duties based on specialization and personal expertise. Bureaucratic structures eliminates variability that results when managers and employees in the same organization have different skills, experiences and goals. 4. Hierarchical Structure. -- A hierarchical structure ranks jobs according to the amount of power and authority (right to decide) given to each manager or employee. Authority and responsibility are clearly defined and legitimized. Typically, power and authority increase at each higher-level, up to the top of the hierarchy. Each lower-level position is under the control and direction of a higher-level position. According to Weber, a well-defined bureaucracy helps control the behavior of employees by making clear to each exactly where he/she stands in relation to every other employee. Roles are standardized. Formal network of relationships among specialized positions in the organization are structured. 5. Authority Structure An authority structure is the organizational structure that determines the right to make decisions of varying importance at different levels within the organization. Weber identifies three types of authority structures traditional, charismatic, and rational-legal. Weber's Three Types of Authority Traditional is based on tradition or custom. Example: The divine right of kings like Louis XIV of France. Charismatic authority is based on followers personal belief and trust in the leader because of special qualities or abilities they perceive in the leader. Examples: Social, political and

religious movements are often headed by charismatic leaders - Jesus, Joan of Arc, Andres Bonifacio, Martin Luther King. In business - Steven Jobs and Walt Disney. Rational-legal authority is based on impersonal laws and rules that apply to all. A superior is obeyed because of the position he/she occupies within the organization's hierarchy. This authority depends on employees acceptance of rules.

6. Lifelong Career Commitment In bureaucratic management system, employment is viewed as a lifelong career commitment. In general, it means that job security is guaranteed as long as the manager or employee is technically qualified, competent, and performs satisfactorily. Entrance requirements are based on technical qualifications, rather than patronage. The organization uses job security, tenure, step-by-step salary increases, and pensions to ensure that employees satisfactorily do their assigned duties. Promotion is granted when an employee demonstrates technical competence required to handle the demands of the next higher position. It is assumed that organizational level corresponds closely with expertise. Bureaucratic organization, such as the civil service, often rely on the results of written and oral exams, amount of education, and previous work experience to determine management rank. 7. Rationality is the use of the most efficient possible means to achieve the organization's objectives. Rationality requires general organization's goals or purpose to be broken down into more specific objectives for each part of the organization. At Xerox, for example, the overall corporate goals are to provide customers with copying machines and services of superior quality at a fair price and to earn enough profit to maintain the company's growth. An objective of its R&D (Research and Development) department is to pursue new xerographic technolo&y and to transform technological breakthroughs into high-quality products and services. If all departments achieve their individual objectives, the corporation reaches its overall goals. Bureaucratic Management Key Concepts Weber's Seven Characteristics of bureaucracy Structured, formal network of relationships among specialized positions in an organization. Rules & regulations standardize behavior. Hierarchy defines the relationship among jobs. Jobs staffed by trained specialists who follow rules. Contributions Provides rational model for restructuring complex, mega organizations. Minimizes subjective personal factors that affect decision-making Consistency Predictability Reliability Stability Continuity Emphasizes the position, rather than the person, as the source of authority Promotes efficient performance of routine activities Limitations Inefficiency due to rigid rules. Rules become an end in itself Red tape Inflexibility. Hinders timely decision-making Coldness Dehumanization. Ignores importance of people and interpersonal relationship Throttles creativity & innovativeness Slow decision-making Incompatibility with changing technology Self-perpetuating. Difficult to dismantle once established. Ignores the importance of people and interpersonal relationships Accumulation of power can lead to authoritarian management Administrative Management Henri Fayol (1841-1925). Henri Fayol is considered the father of modem management. His contributions represent an important transformation in management thought. They now dominate the study of management. Fayol's contributions are the functions of management -- planning, organizing, commanding, coordinating, and controlling and the 14 principles of management. Fayol's 14 Principles of Management 1. Division of Work. Specialization belongs to the natural order of things. The object of division of work is to produce more and better output with the same effort, This is accomplished by reducing the number of objects to which attention and effort must be directed.

2. Authority and Responsibility. Authority is the right to give orders and responsibility is its essential counterpart. Wherever authority is exerted, responsibility arises. 3. Discipline. Discipline implies obedience and respect for the agreements between the firm and its employees. Establishing agreements binding a firm and its employees should be one of the chief preoccupations of industrial heads. Disciplinary formalities emanate from these agreements, and may involve sanctions Judiciously applied. 4. Unity of Command. An employee should receive orders from one superior only. 5. Unity of Direction. Each group of activities having one objective should be unified under one plan and one head 6. Subordination of Individual Interest to General Interest. The interest of one employee or group of employees should not prevail over that of the company or broader organization. 7. Remuneration of Personnel. To maintain their loyalty and support, workers must be given a fair wage for services rendered. 8. Centralization. Like division of work, centralization belongs to the natural order of things. However, the appropriate degree of centralization varies from one organization to another. The problem is to find the measure that will give the best overall yield. 9. Scalar Chain. The scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks. It is an error to depart needlessly from the line of authority, but it is an even greater one to adhere to it to the detriment of the business. 10. Order. A place for everything and everything in its place. 11. Equity. Equity is a combination of kindliness and justice. 12. Stability of Tenure of Personnel. High turnover breeds inefficiency. A mediocre manager who stays is infinitely preferable to an outstanding manager who comes and goes. 13. Initiative. Initiative involves thinking out a plan and ensuring its success. This gives zeal and energy to an organization. 14. Esprit de Corps. Union is strength, and it comes from harmony among the personnel.