The Evolution of Management Thought

Presented By
Dr. Tanvir Mohammad Hayder Arif
PhD (Entrepreneurial Finance), MBA & BBA (Finance) (CU)
MSc. International Business Management (UK)
Training on Intensive Interaction and Communication (UK)
Associate Professor, Department of Finance, University of Chittagong
Ex-Assistant Professor, USTC; Ex-Lecturer AUB
Ex-Regional Head, NITOL-TATA Group
Trainer: BIAM, BIM, KPA, CTA, IBBL, IBCF etc.
Founder and President: Green Society Bangladesh
Web: www.greensociety-tanvir.org
YouTube: www.YouTube/c/TanvirArif-GreenSociety; And
www.YouTube/c/CUFamily
Email: [email protected]
Mob. +8801715-174403

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The Evolution of Management Theory

Figure 2.1

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 Job Specialization and
the Division of Labor
• Adam Smith (18th century economist)
– Observed that firms manufactured pins in one of two
different ways:
• - Craft-style—each worker did all steps.
• - Production—each worker specialized in one step.
• Smith found that the performance of the factories in
which workers specialized in only one or a few tasks was
much greater than the performance of the factory in
which each worker performed all pin-making tasks

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 Job Specialization and
the Division of Labor
• Job Specialization
– process by which a division of labor occurs as different
workers specialize in specific tasks over time

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 F.W. Taylor and Scientific Management

• Scientific Management
– The systematic study of the relationships between
people and tasks for the purpose of redesigning the
work process to increase efficiency.

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Problems with Scientific Management
• Managers frequently • Specialized jobs became
implemented only the very boring, dull.
increased output side of – Workers ended up
Taylor’s plan. distrusting the Scientific
– Workers did not share in Management method.
the increased output.

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 The Gilbreths

1. Analyze every individual action necessary to perform a

particular task and break it into each of its component
actions
2. Find better ways to perform each component action
3. Reorganize each of the component actions so that the
action as a whole could be performed more efficiently-
at less cost in time and effort

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Administrative Management Theory
• Administrative
Management
– The study of how to
create an organizational
structure that leads to
high efficiency and
effectiveness.

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 Administrative Management Theory

• Max Weber
– Developed the principles of bureaucracy as a formal
system of organization and administration designed to
ensure efficiency and effectiveness.

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Weber’s Principles of Bureaucracy

Figure 2.2

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 Rules, SOPs and Norms

• Rules
– formal written instructions that specify actions to be taken
under different circumstances to achieve specific goals
• 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

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Fayol’s Principles of Management

Division of Authority and Unity of

Labor Responsibility Command

Line of Unity of
Centralization
Authority Direction

Equity Order
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Fayol’s Principles of Management

Remuneration
Initiative Discipline
of Personnel

Stability of Subordination of
Individual Interest Esprit de
Tenure of to the Common corps
Personnel Interest

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 Behavioral Management Theory

• Behavioral Management
– The study of how managers should personally behave
to motivate employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.

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 Behavioral Management

• Mary Parker Follett

– Concerned that Taylor ignored the human side of the
organization
• Suggested workers help in analyzing their jobs
• If workers have relevant knowledge of the task, then they
should control the task

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 The Hawthorne Studies
and Human Relations
• Studies of how characteristics of the work setting
affected worker fatigue and performance at the
Hawthorne Works of the Western Electric
Company from 1924-1932.
– Worker productivity was measured at various levels of
light illumination.

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 The Hawthorne Studies
and Human Relations
• Human Relations Implications
– Hawthorne effect — workers’ attitudes toward their
managers affect the level of workers’ performance

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 The Hawthorne Studies
and Human Relations
• Human relations movement
– advocates that supervisors be behaviorally trained to
manage subordinates in ways that elicit their
cooperation and increase their productivity

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 The Hawthorne Studies
and Human Relations
• Behavior of managers and workers in the work
setting is as important in explaining the level of
performance as the technical aspects of the task
• Demonstrated the importance of understanding
how the feelings, thoughts, and behavior of work-
group members and managers affect performance

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 The Hawthorne Studies
and Human Relations
• Informal organization • Organizational
– The system of behavioral behavior
rules and norms that – The study of the factors
emerge in a group that have an impact on
how individuals and
groups respond to and
act in organizations.

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 Theory X and Theory Y

Douglas McGregor proposed two different sets of

assumptions about workers.
• Theory X
– A set of negative assumptions about workers that
leads to the conclusion that a manager’s task is to
supervise workers closely and control their behavior.

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 Theory X and Theory Y

• Theory Y
– A set of positive assumptions about workers that leads
to the conclusion that a manager’s task is to create a
work setting that encourages commitment to
organizational goals and provides opportunities for
workers to be imaginative and to exercise initiative
and self-direction.

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Theory X vs. Theory Y

Figure 2.3 2-23

 Management Science Theory

• Management Science Theory

– Contemporary approach to management that focuses
on the use of rigorous quantitative techniques to help
managers make maximum use of organizational
resources to produce goods and services.

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 Management Science Theory

• Quantitative management
– utilizes mathematical techniques, like linear
programming, modeling, simulation and chaos theory
• Operations management
– provides managers a set of techniques they can use to
analyze any aspect of an organization’s production
system to increase efficiency

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 Management Science Theory

• Total quality management

– focuses on analyzing an organization’s input,
conversion, and output activities to increase product
quality
• Management information systems
– help managers design systems that provide
information that is vital for effective decision making

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 Organizational Environment Theory

• Organizational Environment
– The set of forces and conditions that operate beyond
an organization’s boundaries but affect a manager’s
ability to acquire and utilize resources

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 The Open-Systems View

• Open System
– A system that takes resources for its external
environment and transforms them into goods and
services that are then sent back to that environment
where they are bought by customers.

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 The Open-Systems View

• Input stage
– organization acquires resources such as raw materials,
money, and skilled workers to produce goods and services
• Conversion stage
– inputs are transformed into outputs of finished goods
• Output stage
– finished goods are released to the external environment

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 The Organization as an Open System

Figure 2.4 2-30

 The Open-Systems View

• Closed system
– A self-contained system that is not affected by changes
in its external environment.
– Likely to experience entropy and lose its ability to
control itself

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 The Open-Systems View

• Synergy
– the performance gains that result from the combined
actions of individuals and departments
– Possible only in
an organized system

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 Contingency Theory

• Contingency Theory
– The idea that the organizational structures and control
systems manager choose are contingent on
characteristics of the external environment in which
the organization operates.
– “There is no one best way to organize”

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 Contingency Theory

Figure 2.5
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