Chapter

The Evolution of Management Theory

A Journey Through Time

Early examples of management

MGMT practice is as old as human civilization .It started
when people began to live in groups
Division of Labour Hunting/ Agriculture/ Fighting/ take
care of women & children
Barter/ Exchange system
Egyptian civilization

Construction of pyramids example of human and material

resources

Term Supervisor Vizier (1750 BC)

Span of control 10 servants to each supervisor

Key Management Theories- Overview

The Contingency approach

Historical
Background

The system approach

Early examples
of management

The operational school

Adam Smith
Industrial
revolution

The behavioural school

Classical organization theory

Scientific management School

Schools of Management Thought

1.
2.
3.

4.
5.
6.

Ancient Era
Pre- scientific management era
Classical school
1. Scientific management school
2. Classical organization theory
Transitional school
Human relations/Behavioural school
Management science/Quantitative
Management school, Systems school,
Contingency school, Modern era

Persons behind the school

1. Ancient era
Machiavelli
Chanakya
Sun Tzu
2. Pre scientific management
Robert Owen
Charles Babbage
.

3. Classical school
Scientific Management
Frederick w. Taylor
Henry L Gantt
Frank B Gilbreth & Lillian M. Gilbreth
Classical Organization
Henri Fayol
Max Weber
.

4. Transition School
Mary Parker Follett
Chester I Barnard
5. Human relations/Behavioural school
Elton Mayo, Fritz Roethlisberger,
William J Dickson- Hawthorne
experiment- Abraham Maslow, Douglas
McGregor
.

6. Modern Era- Mgmt science/

quantitative mgmt school
Peter Drucker
Tom Peters
Edwards Deming

Machiavelli
Principles

of Discourses
Organization will do better if members
have autonomy
The organization is lasting if many are
in charge of it
A weak manager cannot follow another
and maintain authority

Chanakya
Also

called Kautilya, lived in Pataliputra

in ancient India
Famous book being Arthashastra also
called Chanakya Sutra
It is a treatise on polotics, economics
and public affairs
Chandragupta Maurya, founder of the
Mauryan Empire was his disciple and
used his theories extensively
.

Sun Tzu
Book

on Art of War written 2000 years

back
Some of his dictums include
When enemy advance we retreat
When the enemy halts we harass
When the enemy seeks to avoid battle
we attack
When the enemy retreats we pursue
.

Adam Smith (1723 - 1790 )

Scottish moral philosopher and a pioneering political economist.

In his classical economic doctrine - The Wealth of Nations

Argued that economic advantages that the nation & org:n would gain from
the Division of labour.

Division & specialization of labour

the breakdown of jobs into narrow and repetitive tasks.
Increased productivity due to increasing each workers skill
Eg: Pin manufacturing company 48000 pins instead of 10 pins
( Draws out the wire, straightens it, cut it, point it, grinds the top for the head
etc)

ROBERT OWEN (1771 1858)

A successful textile mill manager
Worlds first enlightened and first personnel manager(1771-1858)
Stopped employing children below 10
Reduced working hours from 14 to 10
He referred employees as vital machines- built houses for workers
According to him workers should be provided with

Incentives Unique incentive schemes

Motivation by improved working conditions

Fair wages- showed higher wages increased profits through higher

productivity

Sense of security

CHARLES BABBAGE (1792-1858)

Englishman who first came up with the idea of Division of
labour
Developed Principles of cost accounting
Laid foundation for scientific management
Concentrated on production problems, modern assembly
line is based on his ideas
Given importance to

Division and assignment of work on the basis of skill

replacing manual operation with automatic machinery

INDUSTRIAL REVOLUTION
1. Steam engine

2.Electric power

Contribution

Impact on Mgmt Thought

Growth of engineering industries

Large scale of production
Rice of chemical industries
Change of form of ownership
Use of power driven machinery
Factory system
Revolution in iron making
Specilization
Advanced coal mining
Development of means of transport
.

Classical school of management thought

First

concentrated effort to develop a body of Mgt thought.

Pioneers of mgt study.
Organizational efficiency to increase production.
Scientific Management
School

Classical organization
School

Frederick W. Taylor
Henri Fayol
Frank and Lillian Gilbreth
Max Weber
Henry L Gantt

SCIENTIFIC MANAGEMENT
Can scientific methods be applied to Management?
Frederick W Taylor (1856-1915)

First person to introduce scientific methods in management.

He & his associates made the first systematic study of management.

Regarded as the father of scientific Management.

Focus:- Individual employee on the shop floor.

Aims at replacement of traditional techniques by scientific methods.

Henry L Gantt
Frank and Lillian Gilbreth ( 1st lady of mgt)
.

Frederick W Taylor
Based his philosophy on 4
principles(Scientific management,
1921)
1. Development

of science of management to get

best method of work
2. Scientific selection of workers to find the best fit
3. Scientific education and development of worker
4. Intimate friendly relations between management
and labour

Frederick W Taylor
Using

time study as his base he broke

each job into component parts and
designed quickest and best methods of
performance.
Pay more to more productive workers
to motivate them-differential rate
system.
People feared that their jobs will be
exhausted, managers exploited
workers.

Critical analysis of scientific MGMT.

a.

b.

c.

Taylor gave importance to production

than human aspect
There was strict supervision & was
based on authoritarian style
Taylors differential piece rate was
rejected by most of the unions.

Hendry Gantt
Worked

(1861-1919)with Taylor, but later

reconsidered his system
Each person who finished his quota will
get a bonus,so also the supervisor under
whom he is working
If all workers under a supervisor attained
quota he will get additional bonus
( black or red)
Originated a charting system for
production scheduling

The Gilbreths
Frank

B(1868-1924) and Lillian

M(1878-1972) a husband wife team
came up with fatigue and motion
studies and found ways for promoting
workers welfare
From Gilbreths come the term
Therblings( 17 basic movements from
lifting, moving etc)
.

SCIENTIFIC
SCIENTIFIC
MANAGEMENT
MANAGEMENT

Classical organization Theory

1.

Administrative management Theory

2.

Theory of Bureaucracy

Administrative Management Theory

HENDRY
French

FAYOL ( 1841 1925)

industrialist

Focus

organization as a whole

Father

of Functions of Management - Planning ,organizing,

commanding, coordinating and control.

Recognized
Identified

the need for principles and Mgmt teaching

14 principles of management

Fayols 14 Principles
1.

Division of work - Specialisation increases output by making

employees more efficient.

2.

Authority and Responsibility- right to give orders ,

counterpart is responsibility

3.

Discipline Obedience & respect for the agreements ( rules &

regulations)

4.

Unity of Command Receive orders form only one superior

5.

Unity of Direction Each group of activities should have

one objective, one plan and on head

Fayols 14 Principles
6.

Subordination of individual interest to

general interest. common good over individual interset.

7.

Remuneration of personnel. - Fair

wages to workers for loyalty & commitment.

8.

Centralization natural order of things

9.

Heirarchy

chain of superiors ranging from

ultimate authority to the lowest ranks.

Fayols 14 Principles
10.

Order : orderly place in organisation. a place

for everything and everything in its place.

11.

Equity : equity and justice

12.

Stability of staff

13.

Initiative thinking out a plan & ensuring its success.

- Employees with long service

Gives energy to Org:n

14.

Esprit de corps. Union is strength harmony of

personnel.

Difference between Taylor & Fayol

Basis of
difference

Taylor

1. Perspectiv Shop floor

e
2. Focus

Efficiency through
work simplification
& standardizing

Fayol

Higher MGMT levels

Overall efficiency
by observing
certain principles

Production &
3. Orientation engineering

Managerial function

4. Result

Personal
experience

Scientific
observation

Theory of Bureaucracy
Max Weber(1864-1920)
Father of Modern Sociology
Focus:- Whole organization

Rules formal written instructions that specify actions

to be taken under different circumstances

Standard Operating Procedures (SOPs) specific

sets of written instructions about how to perform a
certain aspect of a task

Norms unwritten, informal codes of conduct that

prescribe how people should act in particular situations

Formal rules and

regulations

Webers
Webers
Principles
Principles of
of
Bureaucracy
Bureaucracy

Division of Labour
Career Orientation

Positions organized
in hierarchy with
clear chain of command

Formal selection
impersonality

Theory of
Bureaucracy

Contributions:- Emphasis on consistency,

efficiency & reliability
Criticisms
Rigid

rules

Protection

of authority

Slowness

Bureau CRAZY

Mary Parker Follett(1868-1933)

She

said that management is the art of

getting things done through people
Considered as the first dynamic
manager
Interested in the welfare of the people
but was at the same tough in matters of
attaining company objectives
Felt that no one could be a whole
person except as member of a group
.

Mary Parker Follett(1868-1933

Supported

Taylor on management and

labour sharing common purpose, she
also maintained that artificial
differences between management and
labourers should be removed

Chester I Barnard(1886-1961)
Organizational

goals should be kept in

balance with individuals goals
For this employees zone of indifference
has to be identified-what the
employees would do without
questioning authority
Ethical commitment to society- instilling
moral values in employees
Emphasized people working together
in groups- team work

The Behavioural School

Focus :- Human aspects of organizations

Individual & Group Human Behaviors

emerged in the 1920s

Increasing organizational success by focusing human variables

within the Organization

Contributors
- Elton Mayo

- Douglas McGregor ( Hierarchy of needs)

- Abraham Maslow ( Theory X & Y)

- Mary Parker Follet

Mile stone - The Hawthorne Studies at the Western Electric

Company ( 1924 - 1932)
.

The Hawthorne Studies

Elton Mayo

Experiments lasting for 5 years at Hawthorne Plant of

Western Electric co.

4 Phases study 3000 workers of different nationalities

with different occupations, levels& skills

Results were
Lighting, Productivity

for experiment group

Lighting, Productivity

for experiment group

Lighting, Productivity

for experiment group

Called Harvard Professor Elton Mayo

.

The Hawthorne Studies

To

help managers deal more effectively

with people-better human relations
improves morale and productivity
Series of studies conducted at Western
Electric companys Hawthorne plant
from 1924-33 near Chicago
Began as an attempt to investigate
relation between level of lighting in
workplace and productivity
.

Hawthorne experiments
Test

groups and control groups

Test groups lighting was changed that of
control group kept constant
Surprisingly there were erratic increase of
productivity with changes in lighting
When test groups lighting was improved
pdtivity increased erratically, but when
lighting conditions were made worse there
were also a tendency for pdtivity to increase.
Obviously something besides lighting was
influencing the workers performance

New

set of experiments where a set of

people were placed in separate room
and tested on several parameters
Wages increased, different rest periods
given, workday and workweek
shortened
Again got erratic results, performance
.

Cont
In-between

Elton Mayo and his

Harvard business associates Fritz
Roethlisberger and William Dickson
became involved
Consequent tests proved- groups
singled out for attention developed a
sense of pride and performed better
Sympathetic supervision helped in this
cause, this is Hawthorne effect
.

Finding
1. increased productivity was a result of the attention received
by the group
The Hawthorne Effect:
The possibility that workers who receive special attention will
perform better simply because they received that attention.
2. No cause-and-effect relationship between working
conditions and productivity. Worker attitude was found to be
important
3. Personal / work problems leads to frequent complaints
.

4. Workers often act or react as members of a group

rather than an individuals
Informal leaders play an important role in setting and
enforcing norms
They prefer to keep relations with their co-worker rather
than earning more. ( non-economic rewards)

Mayo introduced the concept of Social man motivated

by social need, on-the-job relationships, and responding
more to work group pressure than to management control
was necessary to compliment the old concept of rational
man motivated by personal economic needs.
.

Conclusion of HS
Control

groups performed better

because of the special attention of the
researchers themselves
Informal groups have a positive effect
on productivity
Employees would work harder if they
believed mgmt was concerned about
their welfare and supervisors paid
special attention to them
.

Abraham Maslow(1908-1970)
Called

father of Humanist psychology

Scientific investigation into the study of
how people behaved in organizations
Hierarchy of needs-physical, safety,
love, esteem, self actualization
Ideas on management includes
Democracy at workplace
synergy
.

Characteristics
Everyone needs to be trusted
Everyone wants to improve his work
People aim at perfection
Good attitude towards work
Love and respect for boss
Looks for appreciation in public
Love their tools and materials
.

Douglas McGregor(1906-1964)
Two alternate assumptions about people
and their work
Theory X states that managers believe
that employees are inherently lazy and
must be constantly coaxed to do the
job properly
Theory Y- managers believe that
people relish work and eagerly
approach their work
.

The Operational Research School

Decision

Theory School / Management

science school

MGMT: As a Decision making Science

Rational approach to decision making
- Primary focus was on Decision making
- Development and use of mathematical Decision models
and Techniques
Like PERT, CPM

Herbert A Simon
Side by side behavioural contributions by Herbert A Simonfirst management thinker to win Nobel Prize in 1978
Saw great potential in the computer for decision making

Management Science approach

It

was found that management

problems can be solved by
mathematical formulas
Mathematical models can be formed
Now

also used in management

SYSTEM APPROACH
ENVIRONMENT

Inp
Raw Materials
ut
Human
Resources
Capital
Technology
Information

Transfor OutPu
Employees work Product &
mation
t Services
activity
MGMT. Activities
Technology
&Operations
Methods
Feed Back

ENVIRONMENT

Financial
Results
Information
Human
Results

Takes

holistic view of the organization

Each organization consists of a
number of subsystems which when
working together creates synergy

DEFINITION OF SYSTEM
A system is defined as an organised, whole composed of
two or more interdependent parts, components, or
subsystems and delineated by identifiable boundaries from
its environmental suprasystem.
Concepts:Subsystems
Synergy
System Boundary
Flow
Feedback
.

The Contingency Approach

Begin around early/ mid 1960s

Management technique has to change
Situational approach
What is the problem here?
What should the Manager do here?
What is the BEST action here?
There is

Situational
Approach
.

NO BEST WAY
IT DEPENDS!

Every
situation is
UNIQUE

MGMT

is entirely situational & there is

nothing universal principal of MGMT or
one best way of doing things .MGMT
depends upon the environment

It is an extension of system approach .The basic

idea of this approach, is that there cannot be a
particular MGMT action which will suit all situation.
Where as contingency approach depending upon
the interrelation between variables in a situation
managerial

The Contingency Approach

IT DEPENDS ON

Situations & variables

l t
a
n
r
n
e
e
t
m
In on
ir
v
En

En Exte
vir rn
on al
me
nt

Organizational
problem
Technological constraints
Economical
Social
Political
Technological
.

(Technology used in production,

interdependency of units , flexibility)

Task constraints
(nature of the task, procedures)

Individual / people constraints

(Competence level, psychological needs,
skills and individual abilities)

The contingent Variables are :Organizational

Size

Technology

Environmental

Individual

Uncertainty

differences

The Contingency Approach

Decision-making

1.

Grasp the situation

2.

Identify the variables present

3.

Identify their interrelationships

4.

Identify effective ways/ configurations

5.

Decide on most appropriate one

Integrative Framework of MGMT. Perspective

System Perspective
Recognition of internal
interdependence
Recognition of environmental forces

Classical
MGMT
perspective

Behavioral
MGMT
perspective

Contingency
perspectives

Quantitative
MGMT.
Perspective

Effective & efficient MGMT.

ta
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Dy
en na
vir mi
on c
me
nt

ty
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i

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s
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S

i
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f
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Pr
.

m
s
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STRUCTURAL CONTIGENCY THEORY

ART
AS WELL AS
SCIENCE

Chapter

MANAGEMENT
Science OR Art ???

MANAGER

Professional
Scientific
Artisti
c
JUGGLER
.