The Evolution of Management

Theory & Functions of

management

Modern management began in the late 19th

century.

Organizations were seeking ways to better satisfy customer

needs.

Machinery was changing the way goods were produced.

Managers had to increase the efficiency of the worker-task

mix.

Adam Smith, 18th century economist, found firms

manufactured pins in two ways:

Smith found that the factory method had much

higher productivity.

Craft -- each worker did all steps.

Factory -- each worker specialized in one step.

Each worker became very skilled at one, specific task.

Breaking down the total job allowed for the division

of labor.

Org. Environment

Management Science

Behavioral Management

Administrative Management
Scientific Management

1890

1940

2000

Classical Management
Perspective
Scientific Management
Concerned with improving the performance of
individual workers (i.e., efficiency).
Grew out of the industrial revolutions labor
shortage at the beginning of the 20th century.
Administrative Management
A theory that focuses on managing the total
organization.

Defined by Frederick Taylor, late 1800s.

The systematic study of the relationships between
people and tasks to redesign the work for higher
efficiency.

Taylor sought to reduce the time a worker spent on each task by

optimizing the way the task was done.

Scientific study of what workers ought to be able to produce.

Used time studies to break tasks down into elementary movements
and designed complementary piece rate incentive system.
Taylor believed that managements responsibility was in knowing what
it wanted workers to do and then seeing that they do in in the best
and cheapest way..
To improve productivity he examined the time and motion details of a
job, developed a better method for performing the job and trained the
workers.
He studied workers loading pig iron to a rail car and broke down into
its smalles constituent movements, timing each one with a stop
watch. The job was redisgned with a reduced number of motions as
well as effort and the risk of error. Rest periods of specific duration
were used to improve the output.
He offered a piece rate that increased as workers produced more.
He increased the workers output from 12 to 47 toms per day.
SM was defined as methods aiming at determining one best way for a
job to be done.
He negated the role of workers as thinking beings

Four Principles to increase efficiency:

1. Study the way the job is performed now & determine new
ways to do it.

Gather detailed, time and motion information.

Try different methods to see which is best.

2. Codify the new method into rules.

Teach to all workers.

3. Select workers whose skills match the rules set in Step 2.

4. Establish a fair level of performance and pay for higher
performance.

Workers should benefit from higher output.

Managers often implemented only the increased

output side of Taylors plan.

They did not allow workers to share in increased output.

Specialized jobs became very boring, dull.
Workers ended up distrusting Scientific Management.

Workers could purposely under-perform

Management responded with increased use of
machines.

Seeks to create an organization that leads to both

efficiency and effectiveness.
More general theory of management
Role of manager and functions of management.

1. Division of Labor: allows for job specialization. The more people specialize,

the more efficiently they can perform their work.

2. Authority and Responsibility: Fayol included both formal and informal
authority resulting from special expertise. Managers must give orders so that
they can get things done. While their formal authority gives them the right to
command, managers will not always compel obedience unless they have
personal authority (such as relevant expertise) as well.
3. Unity of Command: Employees should have only one boss. Each employee
must receive instructions from only one person. Fayol believed that when an
employee reported to more than one manager, conflicts in instructions and
confusion of authority would result.
4. Line of Authority: a clear chain from top to bottom of the firm. It is often
represented today by the neat boxes and lines of the organization chartruns in
order of rank from top management to the lowest level of the enterprise.
5. Centralization: the degree to which authority rests at the very top. Decreasing
the role of subordinates in decision making is centralization; increasing their role
in decentralization.

6. Unity of Direction: One plan of action to guide the organization. Those

operations within the organization that have the same objective should be
directed by only one manager using one plan. For example, the personnel
department in a company should not have two directors, each with a different
hiring policy.
7. Equity: Treat all employees fairly in justice and respect.
8. Order: Each employee is put where they have the most value. Materials and
people should be in the right place at the right time. People, in particular,
should be in the jobs or positions they are most suited to.
9. Initiative: Encourage innovation. Subordinates should be given the freedom
to conceive and carry out their plans, even though some mistakes may result.
10.Discipline: Members in an organization need to respect the rules and
agreements that govern the organization. To Fayol, discipline results from
good leadership at all levels of the organization, fair agreements (such as
provisions for rewarding superior performance), and judiciously enforced
penalties for infractions.

11. Remuneration of Personnel: The payment system contributes to success.

12. Stability of Tenure: Long-term employment is important. A high employee
turnover rate undermines the efficient functioning of an
organization.
13. General interest over individual interest: The organization takes
precedence over the individual. In any undertaking, the interests of
employees should not take precedence over the interests of the organization
as a whole.
14. Esprit de corps: Share enthusiasm or devotion to the organization.
Promoting team spirit will give the organization a sense of unity. To Fayol,
even small factors should help to develop the spirit. He suggested, for
example, the use of verbal communications instead of formal, written
communication whenever possible.

Reasoning that any goaloriented organization consisting of

thousands of individuals would require the carefully
controlled regulation of its activities, the German sociologist
Max Weber (18641920) developed a theory of bureaucratic
management that stressed the need for a strictly defined
hierarchy governed by clearly defined regulations and lines
of authority. He considered the ideal organization to be a
bureaucracy whose activities and objectives were
rationally thought out and
whose divisions of labor were explicitly spelled out.
Weber also believed that technical competence should be
emphasized and that performance evaluations should be
made entirely on the basis of merit.

Clearly defined job roles

A hierarchy of authority
Standardized procedures
Meticulous record-keeping
Hiring employees only if they meet the specific
qualifications for a job

According to Barnard, people come together in formal organizations to achieve

ends they cannot accomplish working alone.
But as they pursue the organization's goals, they must also satisfy their
individual needs. And so Barnard arrived at his central thesis: An enterprise
can operate efficiently and survive only when the organizations goals are kept
in balance with the aims and needs of the individuals working for it. What
Barnard was doing was specifying a principle by which people can work in
stable and mutually beneficial relationships over time.
For example, to meet their personal goals within the confines of the formal
organization, people come together in informal groups such as cliques. To
ensure its survival, the firm must use these informal groups effectively, even if
they sometimes work at purposes that run counter to managements objectives.
Barnard's recognition of the importance and universality of this "informal
organization" was a major contribution to management thought.
Barnard believed that individual and organizations purposes could be kept in
balance if managers understood an employee's zone of indifferencethat is,
what the employee would do without questioning the manager's authority.

Establish and maintain an effective communication

system
Hire and retain effective personnel
Motivate those personnel

The acceptance of authority depends of 4

conditions
employees must understand what the manager wants
them to do
Employee ust be able to comply with the directive
Employees must think that the directive is keeping with
the organizational objectives
Employee must think that the directive is not contrary
to their peronal goalss

Human relations is frequently used as a general term to

describe the ways in which managers interact with their
employees. When "employee management" stimulates
more and better work, the organization has effective
human relations; when morale and efficiency deteriorate,
its human relations are said to be ineffective.
The human relations movement arose from early attempts
to systematically discover the social and psychological
factors that would create effective human relations

In these and subsequent experiments, Mayo and his associates

decided that a complex chain of attitudes had touched off the
productivity increases. Because they had been singled out for
special attention, both the test and the control groups had
developed a group pride that motivated them to improve their
work performance.
Sympathetic supervision had further reinforced their motivation.
The researchers concluded that employees would work harder if
they believed management was concerned about their welfare
and supervisors paid special attention to them. This
phenomenon was subsequently labeled the Hawthorne Effect,
since the control group received no special supervisory
treatment or enhancement of working conditions but still
improved its performance, some people (including Mayo himself)
speculated that the control group's productivity gains resulted
from the special attention of the researchers themselves.

The researchers also concluded that informal work groupsthe

social environment of employees have a positive influence on
productivity.
Many of Western Electrics employees found their work dull
and meaningless, but their associations and friendships with
coworkers, sometimes influenced by a shared antagonism
toward the "bosses," imparted some meaning to their working
lives and provided some protection from management. For
these reasons, group pressure was frequently a stronger
influence on worker productivity than management demands.
To Mayo, then, the concept of "social man"motivated by
social needs, wanting rewarding onthe job relationships, and
responding more to workgroup pressures than to management
controlvas necessary to complement the old concept of
"rational man" motivated by personal economic needs. All
these findings might unremarkable today.

No direct cause and effect relationship between

working conditions and productivity. Worker
attitude was important.
Whenever employees are given special attention,
productivity is likely to change irrespective of
working conditions
An employees complaint frequently is a symptom
of some underlying problem on the job or at
home.
The workplace is a social system and informal
group influence could exert a powerful effect on
individual behaviour.

Thank you