Management History

Management existed long time back

Ancient Management

• Egypt (pyramids) and China (Great Wall)

• Venetians (floating warship assembly lines)

Historical Events

Adam Smith published The Wealth of Nations in 1776 in which he advocated the division of labor (job
specialization) to increase the productivity of workers. That’s breaking the job into narrow and repetitive
tasks. Smith concluded that division of labor increased productivity by increasing each worker’s skill, saving
time lost in changing tasks.

For example, 10 employees produce 4,000 pens/ a day : divide the task into simpler repetitive tasks
costly, time consuming, not very productive if we change tasks

Industrial Revolution (Late eighteenth century) management started?

 Human power was substituted by machine power

 Created large organization in need of proper management that are specified by theories and guides

Classical Approach= nationality and efficiency of people/organization and

one best way of doing things
Fredrick W. Taylor: the father of scientific management.
In 1911, Taylor published his book, Principles of Scientific Management, in which he described the theory of
Scientific Management. Taylor focused on first-line managers and believed that the increase in productivity
for individual will increase that on the group.

Scientific Management: The use of scientific methods to define the “one best way” for a job to be done..
Including:

 Putting the right person on the job with the correct tools and equipment
 Having standardized methods for doing the job: Regulations and rules
 Providing an economic incentive for the worker: High wages

Four Principles: would result in prosperity for both workers and managers

1. Develop a science for each element of an individual’s work to replace the old rule of thumb-method.

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 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 between management and workers. Management does
all work for which it is better suited than the workers.

Frank and Lilian Gilbreth

 Focused on increasing workers productivity through the reduction of wasted motion (bottleneck in
processes)
 Invented the Micro-chronometer to time worker motions and optimize work performance
(cooperation/mentor/coach/train/have a system..)

Time and Motion Studies:

A business efficiency technique combining Taylor and Gilbreths’ work.

They are applicable to the improvement of work system by eliminating waste of time and energy.
They resulted in higher efficiency of workers that led to higher productivity and forced an increase in
payments as they were treated like machines.

Today Managers use scientific management

 Analyze the basic work tasks that should be performed

 Use time and motion studies to increase productivity
 Hire the best qualified employees (blame in private/praise in public)
 Design incentive systems based on outputs: motivation/ extra benefits = bonus | rewards | recognition
ADDED VALUE the company gives me

General Administrative Theory

 Looked at the subject of management from the perspective of the entire organization
 Focused on what managers do and what constitute good management practices

Henri Fayol

 Fayol’s attention was directed at the activities of all managers.

 He believed that the practice of management was distinct from all other business functions
(finance…)

Fayol Developed 14 principles of management that apply to all organizational situations:

1. Division of work: specialization increases output by making employees more efficient.

2. Authority: managers must be able to give orders
3. Discipline: employees must obey and respect the rules of the organization
4. Unity of command: every group of employees should receive orders from only one supervisor.
5. Unity of direction: organization must have single plan of actions to guide managers and workers.

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 6. Subordination of individual interests to the general interest: interest of any employee doesn’t take
precedence over the interest of organization as a whole. (representing the organization)
7. Remuneration: workers must be paid a fair wage for their services.
8. Centralization: refers to the degree to which subordinates are involved in decision making.
9. Scalar Chain: the line of authority is from top management to the lowest ranks (who reports to who)
10. Order: (right) people and materials should be in the right place at the right time.
11. Equity: managers should be kind and fair to their subordinates.
12. Stability of Tenure of personnel: management should provide orderly personnel planning and ensure
that replacements are available to fill vacancies.4 Succession planning = identify a pool of talented
employees to replace managers (contingency plan is only maternity short term)
13. Initiative: employees who are allowed to originate and carry out plans will exert high levels of efforts
(idea day)
14. Esprit de Corps: promoting team spirit will build harmony and unity within the organization | a sense
of belonging.

Max Weber

 Developed a theory of authority structures and relationships based on an ideal type of organization
called Bureaucracy.
 Emphasized rationality, predictability, impersonality, technical competence, and authoritarianism.

6 characteristics of Bureaucracy:

1. Division of labor: jobs are broken down into simple, well-defined tasks.
2. Authority Hierarchy: Positions organized with a clear chain of command
3. Formal Selection: People are hired based on technical qualifications
4. Formal Rules and Regulations: system of written rules and standard operating procedures (what is
expected from you and what you expect from others)
5. Impersonality: Uniform application of rules with no according to personalities
6. Career Orientation: Managers are career professionals, not owners of units they manage

Limitations: Bureaucratic structure hinders individual employees’ creativity and limits an organization’s
ability to respond quickly to an increasingly dynamic environment.

Quantitative Approach
It was evolved from mathematical and statistical methods developed to solve WW2 military logistics and
quality control problems (career ladder | algorithm) .
Focus on improving managerial decision making by applying statistics, optimization models, information
models, and computer stimulations which improve resources allocations and eliminate subjectivity.

 Total Quality Management (TQM): is a management philosophy devoted to

continual improvement and responding to customer needs and expectations.
Focuses on continuing improvement and meeting and exceeding customers’ expectations (=
internal and external)
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 The company promotes cooperation with vendors, suppliers and customers to improve quality and hold down costs.
(any employee can tell the problem not only managers)

Managers measure progress with feedback based on data.(benchmarking)

What is Quality Management?

1. Intense focus on the customer. The customer includes outsiders who buy the organization’s products
or services and internal customers who interact with and serve others in the organization.

2. Concern for continual improvement. Quality management is a commitment to never being satisfied.
“Very good” is not good enough. Quality can always be improved.

3. Process focused. Quality management focuses on work processes as the quality of goods and services is
continually improved. (identify the bottleneck)

4. Improvement in the quality of everything the organization does. This relates to the final product, how the
organization handles deliveries, how rapidly it responds to complaints, how politely the phones are answered, and the
like.

5. Accurate measurement. Quality management uses statistical techniques to measure every critical
variable in the organization’s operations. These are compared against standards to identify problems, trace them to their
roots, and eliminate their causes.

6. Empowerment of employees. Quality management involves the people on the line in the
improvement process. Teams are widely used in quality management programs as empowerment vehicles for finding
and solving problems. (they have a say)

Behavioral Approach
Organizational Behavioral : it’s the study of / It’s looking at management by focusing on organizations’
people and studying their actions at work (motivating employees)
Contributors believed that people were the most important asset of the organization and accordingly they
should be treated (however, when restructuring the organization, people are always the first to be laid off)

Early OB Advocates

• Robert Owen

• Hugo Munsterberg

• Mary Parker Follett

• Chester Barnard

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 The Hawthorine Studies

A series of productivity experiments conducted at Western Electric from 1924 to 1932 (experimental and
control groups)

Finding:

 Productivity unexpectedly increased under imposed adverse working conditions (intensity of light)
Intensity of light does not have an effect on production with increasing or decreasing the light (moon
light = production increases) = experimental
 That effect of incentive plans was less than expected.

Conclusion:

Social norms, group standards, and attitudes more strongly influence individual output and work behavior
than do monetary incentive.

work environment affects the impact of employees= security + safety + culture + developing career +
motivating + self-actualization =how you contribute to the company

Employees’ satisfaction → Motivation → High productivity

and Satisfaction could be achieved by providing their rights and stop treating them as machines (HRM)]

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 Contemporary Approach
System: a set of interrelated and interdependent parts arranged in a manner that produces a unified whole.

1. Closed System: Are not influenced by, and do not interact with their environment (all system input
and output are internal). No feedback.
2. Open System: Dynamically interact to their environment by taking in inputs and transforming them
into outputs that are distributed into their environments. They detect deviation and control them, and
get feedbacks to which they respond- Org depends on the environment, all org are open system (what
happens in one department affects the other = inter-related)

Implications to System Approach:

 Coordination of the system’s parts is essential for proper functioning of the entire organization
 Decisions and actions taken in one area affect the other area of the organization
 Organizations are not self-contained, thus they must adapt to changes in their external environment

Administrative Perspectives In The Early Arab Context

• Early Arabs lived in relatively small communities.

• Tribal life and work within the Bedouin environment emphasized the role of endurance, generosity,
and communal cohesion, but this did not necessitate any type of advanced managerial thinking.

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 • The relationship between the employer and the employee was simple and issues of fairness and
equality were not a priority at the time.

• With the advent of Islam in the year 622 C.E., attitudes towards certain professions were
drastically changed.

• Prophet Muhammad (PBUH) developed a perspective of work and management that was radically
different from the earlier perspectives.

• The relationship between the employer and the employee changed. Under the new paradigm, the
employee was supposed to get his fair share quickly.

• There isn’t a widespread accepted Arab theory of management. The managerial perspectives based
on Islam (Exhibit 2–9), as idealistic and desirable as they are, cannot be presented as representing an
Arab theory of management.

• Reasons?

• Other cultural, political, and historical influences are also present.

• Sometimes actual administrative practices diverge from what is recommended.

Islamic Managerial Perspectives

Terms to know: (External= supplies… what kind of system- and which theory applies? KEY TERMS)

Trades
generosity- fairly traded-

employees & employers = added work ethics

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 forming the muslim organization
religion- ethnic minorities (=Armenians-kurds) + colonialism + gov interaction

political

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