Principles of

Management
Chapter 2

Yusra Qamar
Early Management
• 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.

2
Early Management
• The city of Venice 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.
• At the arsenal of Venice, warships were
floated along the canals, and at each stop,
materials and riggings were added to the ship.
• The Venetians used warehouse and inventory
systems to keep track of materials, human
resource management functions to manage
the labor force (including wine breaks), and
an accounting system to keep track of
revenues and costs.
3
Job Specialization
• In 1776 Adam Smith published “The Wealth of Nations”
• division of labor (job specialization): the breakdown of jobs
into narrow and repetitive tasks.
• Smith claimed that 10 individuals, each doing a specialized
task, could produce about 48,000 pins a day among them.
• Smith concluded that division of labor increased productivity
by increasing each worker’s skill and dexterity, saving time
lost in changing tasks, and creating labor saving inventions
and machinery.
Industrial Revolution
• Industrial revolution: a period
during the late eighteenth century
when machine power was substituted
for human power, making it more
economical to manufacture goods in
factories than at home.
• These large efficient factories needed
someone to forecast demand, ensure
that enough material was on hand to
make products, assign tasks to
people, direct daily activities, and so
forth.
 Major Approaches to Management

Four major approaches to management theory: classical, behavioral, quantitative, and contemporary.

Copyright © 2021 Pearson Education Ltd.

Classical Approach

• Classical approach: first studies of management, which

emphasized rationality and making organizations and workers as
efficient as possible
Scientific Management
• Scientific management: an approach
that involves using the scientific
method to find the “one best way” for a
job to be done.
• Frederick Winslow Taylor’s Principles
of Scientific Management.
• Its contents were widely embraced by
managers around the world. Taylor’s
book described the theory of scientific
management.

8
Scientific Management
• Taylor worked at the Midvale and Bethlehem Steel Companies in Pennsylvania.
• As a mechanical engineer with a Quaker and Puritan background, he was
continually appalled by workers’ inefficiencies. Employees used vastly
different techniques to do the same job.
• They often “took it easy” on the job, and Taylor believed that worker output
was only about one-third of what was possible.
• Virtually no work standards existed and workers were placed in jobs with little
or no concern for matching their abilities and aptitudes with the tasks they were
required to do.
• Taylor set out to remedy that by applying the scientific method to shop-floor
jobs.
• He spent more than two decades passionately pursuing the “one best way” for
such jobs to be done.
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 Taylor’s Scientific Management
Principles
Principles
1. Develop a science for each element of an individual’s work to replace the
old rule-of-thumb method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers 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.
Pig iron experiment
• Workers loaded “pigs” of iron (each weighing 92 lbs.) onto rail cars.
Their daily average output was 12.5 tons.
• Taylor believed that by scientifically analyzing the job to determine the
“one best way” to load pig iron, output could be increased to 47 or 48
tons per day.
• After scientifically applying different combinations of procedures,
techniques, and tools, Taylor succeeded in getting that level of
productivity.
• By putting the right person on the job with the correct tools and
equipment, having the worker follow his instructions exactly, and
motivating the worker with an economic incentive of a significantly
higher daily wage.
Frederick Winslow Taylor
• Using similar approaches for other jobs, Taylor was able to define
the “one best way” for doing each job.
• Taylor achieved consistent productivity improvements in the range
of 200 percent or more.
• Based on his groundbreaking studies of manual work using
scientific principles, Taylor became known as the “father” of
scientific management.
• His ideas spread in the United States and to other countries and
inspired others to study and develop methods of scientific
management.
Frank and Lillian Gilbreth
• Therbligs: a classification scheme for labeling basic hand motions.
• Taylor’s most prominent followers were Frank and Lillian Gilbreth. Frank and his
wife Lillian, a psychologist, studied work to eliminate inefficient hand-and-body
motions. The Gilbreths also experimented with the design and use of the proper
tools and equipment for optimizing work performance.
• The Gilbreths also devised a classification scheme to label 17 basic hand motions
(such as search, grasp, hold), which they called therbligs (Gilbreth spelled backward
with the th transposed). This scheme gave the Gilbreths a more precise way of
analyzing a worker’s exact hand movements.
• Many of the guidelines and techniques Taylor and the Gilbreths devised for
improving production efficiency are still used in organizations today. Nowadays,
adaptive robotics can help boost worker efficiency. By freeing workers from
repetitive tasks, one study revealed that workers could complete essential tasks
requiring manual dexterity 25 percent faster.
General Administrative Theory
• General administrative theory: an approach to
management that focuses on describing what managers
do and what constitutes good management practice.
• Fayol’s attention was directed at the activities of all
managers. He wrote from his personal experience as the
managing director of a large French coal-mining firm.
Henri Fayol
• Principles of management: fundamental rules of
management that could be applied in all organizational
situations and taught in schools.

• Henri Fayol described the practice of management as

something distinct from accounting, finance, production,
distribution, and other typical business functions.
• His belief that management was an activity common to all
business endeavors, government, and even the home, led him
to develop 14 principles of management—fundamental rules
of management that could be applied to all organizational
 Fayol’s 14 Principles of Management
Principles
1. Division of work. Specialization increases output by making employees more
efficient.
2. Authority. Managers must be able to give orders, and authority gives them this
right.
3. Discipline. Employees must obey and respect the rules that govern the organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide
managers and workers.
6. Subordination of individual interests to the general interest. The interests of any
one employee or group of employees should not take precedence over the interests
of the organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
 Fayol’s 14 Principles of
Management
Principles
8. Centralization. This term refers to the degree to which subordinates are involved in
decision making.
9. Scalar chain. The line of authority from top management to the lowest ranks is the
scalar chain.
10. Order. 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.
13. Initiative. Employees allowed to originate and carry out plans will exert high levels
of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within the
organization.
Max Weber

• Bureaucracy: a form of organization characterized by division

of labor, a clearly defined hierarchy, detailed rules and
regulations, and impersonal relationships.
• Max Weber (pronounced VAY-ber) was a German sociologist
who studied organizations. Writing in the early 1900s, he
developed a theory of authority structures and relations based on
an ideal type of organization he called a bureaucracy
Max Weber’s Bureaucracy
Characteristics of Weber’s Bureaucracy

Weber’s ideal bureaucracy

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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.
• Although many characteristics of Weber’s bureaucracy are still evident in large
organizations, his model isn’t as popular today as it was in the twentieth century.
• Many managers feel that a bureaucratic structure hinders individual employees’ creativity
and limits an organization’s ability to respond quickly to an increasingly dynamic
environment.
• However, even in flexible organizations of creative professionals—such as Microsoft,
Samsung, General Electric, or Cisco Systems—some bureaucratic mechanisms are
necessary to ensure that resources are used efficiently and effectively.
 Major Approaches to Management

Four major approaches to management theory: classical, behavioral, quantitative, and contemporary.

Copyright © 2021 Pearson Education Ltd.

Behavioral Approach

• Organizational behavior (O B): the study of the actions of

people at work.
• Much of what managers do today when managing people—
motivating, leading, building trust, working with a team,
managing conflict, and so forth—has come out of OB research.
Early O B Advocates

Each individual’s most important ideas.

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Hawthorne Studies

• Hawthorne studies: a series of studies during the 1920s

and 1930s that provided new insights into individual and
group behavior
1. Illumination Experiments “Hawthorne effect”
2. Relay Assembly Room Test Experiments
3. Mass Interview Programs
4. Bank Wiring room experiments
Illumination experiment
Relay Assembly Test Room Experiments
Mass Interviews & Bank wiring experiment
 Social unit
Group influence &Behavior
Motivation
Implications of
Supervision
Hawthorne
Working conditions
Communication
Balanced approach
 Major Approaches to Management

Four major approaches to management theory: classical, behavioral, quantitative, and contemporary.

Copyright © 2021 Pearson Education Ltd.

Quantitative Approach
• Quantitative approach: the use of quantitative
techniques to improve decision making
Total Quality Management
• Total quality management (T Q M): a philosophy of
management that is driven by continuous improvement and
responsiveness to customer needs and expectations. The term
customer includes anyone who interacts with the 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.
• W. Edwards Deming and Joseph M. Juran.
• The ideas and techniques they advocated in the 1950s had few
supporters in the United States but were enthusiastically
embraced by Japanese organizations.
 What is Quality Management?
Characteristic
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.
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.
Contemporary Approaches
• System: a set of interrelated and interdependent parts arranged in
a manner that produces a unified whole
• Closed systems: systems that are not influenced by and do not
interact with their environment
• Open systems: systems that interact with their environment
Organization as an Open System

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Contingency Approach

• Contingency approach: a management approach that

recognizes organizations as different, which means they face
different situations (contingencies) and require different ways of
managing
 Popular Contingency Variables
Variable
Organization Size. As size increases, so do the problems of coordination. For in-
stance, the type of organization structure appropriate for an organization of 50,000
employees is likely to be inefficient for an organization of 50 employees.
Routineness of Task Technology. 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.
Environmental Uncertainty. 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.
Individual Differences. 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.