EVOLUTION OF

MANAGEMENT
THOUGHT
ORGANIZATION AND MANAGEMENT
 INTRODUCTION
The workplace of today is different from what it was 50 years ago—indeed, from what it
was even 10 years ago—yet historical concepts form the backbone of management
education.

3
 INTRODUCTION
Some management practices that seem modern have
actually been around for a long time.

4
INTRODUCTION

5
 INTRODUCTION
Managers should be concerned with historical perspectives. They need to know the
facts about what has happened in a similar situation and to relate them to other
experiences and other knowledge.

6
INTRODUCTION

7
INTRODUCTION

8
 INTRODUCTION
Management philosophies and organizational forms change over
time to meet new needs and respond to current challenges.

9
 INTRODUCTION
Managers should always on the lookout for fresh ideas, innovative
management approaches, and new tools and techniques.

10
Management has been practiced
a long time. Organized endeavors
directed by people responsible
for planning, organizing, leading,
and controlling activities have
existed for thousands of
years. Let’s look at some of the
most interesting examples.

11
PYRAMID AND GREAT
WALL
The Egyptian pyramids and
the Great Wall of China are
proof that projects of
tremendous scope,
employing tens of
thousands of people, were
completed in ancient times.
It took more than 100,000
workers some 20 years to
construct a single pyramid.

12
PYRAMID AND GREAT
WALL
Who told each worker what to
do? Who ensured that there
would be enough stones at the
site to keep workers busy?

The answer is managers.

Someone had to plan what was to be
done, organize people and materials
to do it, make sure those workers got
the work done, and impose some
controls to ensure that everything
was done as planned.

13
VENICE TRADE CENTER 1400S
Another example of early
management can be found in the
city of Venice, which was a major
economic and trade center in the
1400s. The Venetians developed an
early form of business enterprise
and engaged in many activities
common to today’s organizations.

14
 1776, WEALTH OF NATION – ADAM SMITH
In 1776, Adam Smith published The
Wealth of Nations, in which he
argued the economic advantages
that organizations and society would
gain from the division of labor
(or job specialization)—that is,
breaking down jobs into narrow and
repetitive tasks.

15
1776, WEALTH OF NATION – ADAM SMITH

Job specialization continues to

be popular. For example, think of
the specialized tasks performed
by members of a hospital
surgery team, meal preparation
tasks done by workers in
restaurant kitchens, or positions
played by players on a football
team.

16
INDUSTRIAL REVOLUTION- 18TH CENTURY
Starting in the late eighteenth century
when machine power was substituted
for human power, a point in history
known as the industrial
revolution, it became more
economical to manufacture goods in
factories rather than at home.

17
INDUSTRIAL REVOLUTION- 18TH CENTURY

These managers would need

formal theories to guide
them in running these large
organizations. It wasn’t until
the early 1900’s, however,
that the first steps toward
developing such theories
were taken.

18
MAJOR APPROACHES TO MANAGEMENT
 SCIENTIFIC
MANAGEMENT THEORY GENERAL
ADMINISTRATIVE THEORY
The two most important
contributors to scientific The two most important
management theory were contributors to general
Frederick W. Taylor and the administrative theory
husband-wife team of Frank and were Henri Fayol and Max
Lillian Gilbreth. Weber

20
 SCIENTIFIC MANAGEMENT THEORY

THIS APPROACH

• seeks to increase productivity and • studies work methods, how a task can be
maximize efficiency constructed too bring out the highest
productivity from works, and set optimal
performance standards
• seeks to find the “one best
way” to do a task
• requires rational selection of
workers and training for job
development

21
 SCIENTIFIC MANAGEMENT THEORY

• Employees used vastly different techniques to do

FREDERICK WINSLOW the same job.
TAYLOR (1856-1915) • Virtually no work standards existed and workers
were placed in jobs with little or no concern for
• Father of Scientific Management matching their abilities and aptitudes with the
tasks they were required to do.
• Taylor’s book Principles of Scientific • Taylor set out to remedy that by applying the
Management described the theory of scientific scientific method to shop-floor jobs. He spent
management: the use of scientific methods to more than two decades passionately pursuing the
define the “one best way” for a job to be done. “one best way” for such jobs to be done.

• Taylor worked at the Midvale and Bethlehem FREDERICK WINSLOW

Steel Companies in Pennsylvania. As a
mechanical engineer, he was continually appalled
TAYLOR
by workers’ inefficiencies.

22
 SCIENTIFIC MANAGEMENT THEORY
3. Heartily cooperate with the workers so
as to ensure that all work is done in
SCIENTIFIC MANAGEMENT accordance with the principles of the
PRINCIPLES science that has been developed.
4. Divide work and responsibility almost
1. Develop a science for each equally between management and
element of an individual’s workers. Management does all work for
work to replace the old rule-of which it is better suited than the
thumb method workers.
2. Scientifically select and then
train, teach, and develop the FREDERICK WINSLOW
worker. TAYLOR

23
 SCIENTIFIC MANAGEMENT THEORY

FREDERICK WINSLOW
TAYLOR (1856-1915)
• The scientific management approach is
illustrated by the unloading of iron from rail cars
and reloading finished steel for the Bethlehem
Steel plant in 1898.
• Taylor calculated that with the correct
movements, tools, and sequencing, each man
was capable of loading 47.5 tons per day instead
of the typical 12.5 tons. He also worked out an
incentive system that paid each man $1.85 a day
for meeting the new standard, an increase from
the previous rate of $1.15. Productivity at
Bethlehem Steel shot up overnight.

24
CHARACTERISTICS OF SCIENTIFIC MANAGEMENT THEORY
 SCIENTIFIC MANAGEMENT THEORY

HENRY GANTT

• GANTT CHART
• a bar graph that
measures planned and
completed work along
each stage of
GANTT CHART EXAMPLE
production by time
elapsed.
26
 SCIENTIFIC MANAGEMENT THEORY

• The Gilbreths invented a device called a

microchronometer that recorded a worker’s hand-
FRANK AND LILIAN and-body motions and the amount of time spent doing
each motion.
GILBRETH
• Wasted motions missed by the naked eye could be
• husband-and-wife team of Frank B. and Lillian M. identified and eliminated. The Gilbreths also devised a
Gilbreth. Frank B. Gilbreth (1868–1924) classification scheme to label 17 basic hand motions
pioneered time and motion study (such as search, grasp, hold), which they called
• Frank and his wife Lillian, a psychologist, studied
therbligs (Gilbreth spelled backward with the th
transposed). This scheme gave the Gilbreths a more
work to eliminate inefficient hand-and-body
precise way of analyzing a worker’s exact hand
motions.
movements.

• The Gilbreths also experimented with the design

and use of the proper tools and equipment for
optimizing work performance

27
 How today’s managers use
scientific management

• Many of the guidelines and techniques that

Taylor and the Gilbreths devised for
improving production efficiency are still used
in organizations today.
 GENERAL ADMINISTRATIVE THEORY

The father of General HENRI FAYOL

Management • The major contributor to
❑ He first identified five functions that this approach was Henri
managers perform: planning, Fayol (1841–1925), a
organizing, commanding, French
coordinating, and controlling mining engineer who
❑ While Taylor was concerned worked his way up to
with first-line managers and the become head of a large
scientific method, Fayol’s attention mining group known as
was directed at the activities of all
managers. Comambault.

29
 GENERAL ADMINISTRATIVE THEORY

❑ 14 Principles of Mangement – HENRI FAYOL

the fundamental rules of
management that could be
applied to all organizational
situations and taught in
schools

30
 Specialization increases output by making employees more
efficient.
Managers must be able to give orders, and authority gives them this
right.
. Employees must obey and respect the rules that govern the
organization.
. Every employee should receive orders from only one
superior.
. The organization should have a single plan of action to guide
managers and workers.
. The
interests of any one employee or group of employees should not take precedence
over the interests of the organization as a whole.
. Workers must be paid a fair wage for their services.
9
 . Workers must be paid a fair wage for their services.
. This term refers to the degree to which subordinates are involved
in decision making.
The line of authority from top management to the lowest ranks is
the scalar chain.
. People and materials should be in the right place at the right time.
. Managers should be kind and fair to their subordinates.
. Management should provide orderly
personnel planning and ensure that replacements are available to fill vacancies.
. Employees who are allowed to originate and carry out plans will exert
high levels of effort.
. Promoting team spirit will build harmony and unity within the
organization.

9
 BUREAUCRATIC ORGANIZATIONS APPROACH

❑Max Weber (1864– BUREAUCRACY

1920), a German
theorist, introduced
most of the concepts on
bureaucratic
organizations

33
• During the late 1800s, many European
organizations were managed on a personal,
family-like basis.

Employees were loyal to a single individual

rather than to the organization or its mission.

The dysfunctional consequences of this

management practice was that resources were
used to realize individual desires rather than
organizational goals.

Employees in effect owned the organization

and used resources for their own gain rather
than to serve customers.
• Weber believed that an organization based on rational authority would be more efficient and
adaptable to change because continuity is related to formal structure and positions rather than
to a particular person, who may leave or die.

• To Weber, rationality in organizations meant employee selection and advancement based not
on whom you know, but rather on competence and technical qualifications, which are
assessed by examination or according to specific training and experience. The organization
relies on rules and written records for continuity.

• In addition, rules and procedures are impersonal and applied uniformly to all employees.

• A clear division of labor arises from distinct definitions of authority and responsibility,
legitimized as official duties.

• Positions are organized in a hierarchy, with each position under the authority of a higher one.
The manager gives orders successfully not on the basis of his or her personality, but on the
legal power invested in the managerial position.
9
 How today’s managers use general
administrative theory
❖ Several of our current management ideas and practices can be directly traced to the
contributions of general administrative theory.

For instance, the functional view of the manager’s job can be attributed to Fayol. In addition, his
14 principles serve as a frame of reference from which many current management concepts—
such as managerial authority, centralized decision making, reporting to only one boss, and so
forth—have evolved.

Weber’s bureaucracy was an attempt to formulate an ideal prototype for organizations.

Many characteristics of Weber’s bureaucracy are still evident in large organizations.
 BEHAVIORAL APPROACH/HUMANISTIC PERSPECTIVE

ORGANIZATIONAL BEHAVIOR
❑ As we know, managers
get things done by • The field of study that
researches the actions
working with people. (behavior) of people at work is
called organizational behavior
This explains why some (OB). Much of what managers
do today when managing
writers have chosen to people—motivating, leading,
look at management by building trust, working with a
team, managing conflict, and so
focusing on the forth—has come out of OB
research.
organization’s people.

39
9
 THE HAWTHORNE STUDIES AND HUMAN RELATIONS
MOVEMENT
The human relations movement was
HAWTHORNE STUDIES based on the idea that truly effective
control comes from within the
individual worker rather than from
• Many scholars pinpoint the strict, authoritarian control. This
Hawthorne studies (1923- school of thought recognized and
directly responded to social pressures
1933) as the true beginning of for enlightened treatment of
the behavioral approach to employees.
management.

HUMAN RELATIONS
MOVEMENT

41
• Hawthorne Studies, a series of studies conducted at the Western Electric
Company Works in Cicero, Illinois. These studies, which started in 1924,
were initially designed by Western Electric industrial engineers as a
scientific management experiment.

• In this study, workers were divided into an experimental group and

a control group. Lighting conditions for the experimental group
varied in intensity from 24 to 46 to 70 foot-candles. The lighting for
the control group remained constant.
9
•

• However, they found that as the level of light was

increased in the experimental group, output for both groups increased.
Then, much to the surprise of the engineers, as the light level was
decreased in the experimental group, productivity continued to increase
in both groups.

• In fact, productivity began to fall only when the level of illumination

dropped to the level of moonlight, a level at which presumably
employees could no longer see well enough to do their work efficiently.
9
 • Clearly, the researchers reasoned, something other than illumination
caused the changes in the productivity.
• The relay assembly test room produced similar results over a 6-year
period. In this case, relationship among rest, fatigue and productivity
were examined.
• First, normal productivity was established with no formal rest periods and
a 48-hour week. Rest periods of varying length and frequency were then
introduced.
• Productivity increased as the frequency and length of rest periods
increased. Finally, the original conditions were reinstated. The return to
the original conditions, however, did not result in the expected
productivity drop. Instead, productivity remained at its usual high level.
9
• One interpretation of these results was that the workers involved in the
experiment enjoyed being the center of attention. Workers reacted
positively because management cared about them.

• The phenomenon is refereed to as the Hawthorne Effect.

• It is the tendency of people to behave differently when they receive
attention because they respond to the demands of the situation.

9
• In a research setting, this could mean that the people in an
experimental group perform better simply because they are
participating in an experiment.

• In a work setting, this could mean that employees perform better when
they are part of any program-whether or not that program is valuable.

9
• Economic incentives are less potent than generally believed in influencing workers
to achieve high levels of output

• Employees performed better when managers treated them in a positive manner.

• Leadership practices and work-group pressures profoundly influence employee

satisfaction and performance
• Effective communication with workers is critical to managerial success

9
 HUMAN RESOURCES PERSPECTIVE
maintained an interest in worker participation and considerate leadership but shifted
the emphasis to considering the daily tasks that people perform.

In the human resources view,

The human resources jobs should be designed so that
tasks are not perceived as
perspective combines dehumanizing or demeaning
prescriptions for design of but instead allow workers to
job tasks with theories of use their full potential.
motivation.

48
 HUMAN RESOURCES PERSPECTIVE

ABRAHAM MASLOW
Thus, he generalized his work
and suggested a hierarchy of
a practicing psychologist, needs. Maslow’s hierarchy
observed that his patients’ started with physiological needs
and progressed to safety,
problems usually stemmed belongingness, esteem, and,
from an inability to satisfy finally, self actualization needs.
their needs
HIERARCHY OF NEEDS

49
 Self-actualization 5 Self-fulfillment needs
Esteem 4
Psychological needs
Love/belonging 3

Safety/security 2
Basic needs
Physiological
1
 HUMAN RESOURCES PERSPECTIVE
Theory X and Theory Y

DOUGLAS MCGREGOR

Based on
his experiences as a manager
and consultant, his training as a
psychologist, and the work of
Maslow, McGregor formulated
Theory X and Theory Y

54
 HUMAN RESOURCES PERSPECTIVE
Theory X and Theory Y

ASSUMPTION OF THEORY X

• The average human being has an inherent

dislike of work and will avoid it if
possible
• Because of the human characteristic of dislike
for work, most people must be coerced,
controlled, directed, or threatened with punishment
to get them to put forth adequate effort toward the
achievement of organizational objectives.

• The average human being prefers to be directed,

wishes to avoid responsibility, has relatively little
ambition, and wants security above all.
55
 HUMAN RESOURCES PERSPECTIVE
Theory X and Theory Y

• The capacity to exercise a relatively high

ASSUMPTION OF THEORY Y degree of imagination, ingenuity, and
creativity in the solution of organizational
• The expenditure of physical and mental effort problems is widely, not narrowly, distributed
in work is as natural as play or rest. The in the population.
average human being does not inherently dislike
work. • Under the conditions of modern industrial life,
the intellectual potentialities of the average
• External control and the threat of punishment
human being are only partially utilized.
are not the only means for bringing about
effort toward organizational objectives. A person
will exercise self-direction and self-control in the
service of objectives to which he or she is
committed
• The average human being learns, under proper
conditions, not only to accept but to seek
responsibility
56
 How today’s managers use
behavioral approach
The behavioral approach has largely shaped
how today’s organizations are managed.
From the way that managers design jobs to
the way that they work with employee teams
to the way that they communicate, we see
elements of the behavioral approach.
 QUANTITATIVE APPROACH

WHAT EXACTLY DOES THE

QUANTITATIVE APPROACH DO?
• Each of these is an example of quantitative
• It involves applying statistics, optimization models, techniques being applied to improve managerial
information models, computer simulations, and
decision making. Another area where quantitative
other quantitative techniques to management
activities. techniques are used frequently is in total quality
management.
• Linear programming, for instance, is a technique that
managers use to improve resource allocation
decisions. Work scheduling can be more efficient as
a result of critical-path scheduling analysis.

• The economic order quantity model helps managers

determine optimum inventory levels.
58
 QUANTITATIVE APPROACH

TOTAL QUALITY MANAGEMENT

• As Japanese manufacturers began beating U.S.
competitors in quality comparisons, however,
• A quality revolution swept through both the
Western managers soon took a more serious
business and public sectors in the 1980s and
1990s.10 It was inspired by a small group of look at Deming’s and Juran’s ideas . . .ideas
quality experts, the most famous being W. that became the basis for today’s quality
Edwards Deming and Joseph M. Juran. management programs.

• The ideas and techniques they advocated in

the 1950s had few supporters in the United
States but were enthusiastically embraced by
Japanese organizations.

59
 QUANTITATIVE APPROACH

TOTAL QUALITY MANAGEMENT

• Continual improvement isn’t possible
• without accurate measurements, which require
statistical techniques that measure every critical
variable in the organization’s work processes.
These measurements are compared against
• Customer includes anyone who interacts with the standards to identify and correct problems .
organization’s product or services internally or
externally. It encompasses employees and suppliers
as well as the people who purchase the
organization’s goods or services.

60
PRINCIPLES OF TQM
• Dr. Deming’s teachings about
statistical approaches, decision
making upon facts, and the need
for simplification had a profound
impact on the Japanese.

• Dr. Deming’s philosophy is based

on improving products and
services by reducing uncertainty
and variability in the decision of
manufacturing processes.
• He considers quality as a job of
management. He advocates that
higher quality leads to higher
productivity, which in turn leads to
long term competitive strength.

• Dr. Deming proposed a new

thinking stressing on improving
quality in manufacturing through
the use of statistical quality
control techniques.
Deming’s 14 points for quality
Management:
1. Create constancy of purpose towards the improvement of
product and Services in order to become competitive, stay
in business, and provide jobs.
2. Adopt the new philosophy for the new economic age and
awake the challenges, learn the responsibilities and take
on leadership for change.
3. Stop depending on inspection to achieve quality by
building quality into the product.
4. Stop practice of awarding business on the basis of low
bids and move towards single suppliers on a long term
relationship of loyalty and trust.
5. Improve constantly in the system of production and
services to improve quality and productivity.
6. Institute modern methods of on-the-job training at all
levels.
7. Adopt and institute modern methods of leadership and
supervision to help people and technology work better.
Deming’s 14 points for quality Management:
8. Drive out fear, so that everyone can work effectively
for the company.
9. Break down barriers between individuals and
departments so that people can work as a team.
10.Eliminate exhortation, goals, slogans, targets for
the workforce, as they are advisory and any way
they create adversarial relationship.
11. Eliminate quotas, work in numerical standards and
management by objectives, leadership should be
substituted instead.
12.Remove barriers that rob employees of their pride
of workmanship and abolish performance.
13.Institute and encourage for education and
retraining for self-improvement.
14. Structure Top Management to empower them to
achieve above 13 points. Put everyone in the
company to work to accomplish the transformation.
• One of Juran’s contributions is his focus on the
definition of quality and the cost of quality.

• Juran is credited with defining quality as fitness

for use rather than simply conformance to
specifications.

• He is well known for originating the idea of the

quality trilogy: quality planning, quality control,
and quality improvement.

• Dr. Juran specifies a detailed program for quality

improvement process which involves proving the
need for improvement, identifying specific
projects, organizing to guide the projects,
diagnosing the causes, providing remedies,
proving that remedies are effective and providing
control to hold improvements.
 The Juran Trilogy: Dr. Juran communicates his
message to managers through following three basic
quality related processes.
A. Quality Planning – It includes identifying the
customers’ needs and expectations, designing products
and services, setting goals, providing training,
implementation of projects, reporting, recognizing, and
communicating results and improvements in systems.
B. Quality Control – It involves, establishing standards,
identifying measurements and methods thereof,
comparing results with actual standards and
interpreting the differences and taking action on
differences.
C. Quality Improvement – It includes use of structured
annual improvements projects and plans, need of
improvement, organizing to guide the projects,
diagnosing the causes, providing and proving remedies
and establishing control to maintain gains made.
CONTINGENCY VIEW OF MANAGEMENT
 . As size increases, so do the problems of coordination. For instance, the type of
organization structure appropriate for an organization of 50,000 employees is likely to be inefficient for an
organization of 50 employees.

To achieve its purpose, an organization uses technology. Routine

technologies require organizational structures, leadership styles, and control systems that differ from
those required by customized or nonroutine technologies.

The degree of uncertainty caused by environmental changes

influences the management process. What works best in a stable and predictable environment may be
totally inappropriate in a rapidly changing and unpredictable environment.

Individuals differ in terms of their desire for growth, autonomy,

tolerance of ambiguity, and expectations. These and other individual differences are particularly
important when managers select motivation techniques, leadership styles, and job designs.
THANK YOU!