A History of

Management Thought
Sajjad ul Aziz Qadri

Under Supervision: Dr. Zafar Iqbal Jadoon

Management Time Line
 Historical
Timeline

Timeline
 Education: Late 19th Century Business taught in
high schools/commercial schools = bookkeeping
+ secretarial skills.
 Wharton (1881) – accounting, economics and
law
 University of Chicago & UC (Berkley), 1889 –
undergrad schools of commerce
 NYU & Dartmouth (Amos Tuck), 1900
 Harvard (1908) -focus on educating managers
of
large firms – commercial law, accounting and
general commerce. Electives: Management in
transportation, industry, marketing.

Professionalism of Management
 How do we efficiently organize people at
work
with these new technologies of production
and
large markets?
 How do we hire, pay, and coordinate people
at
work to gain productivity?
 How do we do all of these to create economic
wealth (profit)?

First Management Issues of

Industry
 1886 – Henry Towne, Pres. of Yale and Town
Manufacturing Co., ―The Engineer as Economist:‖
How do we relate work to increasing economic
development?
 Gain sharing‖ or ―Towne Plan‖ – Link profits to
worker’s pay: Wage rate + performance incentive– All
savings in costs were shared with workers.
 Halsey Plan: Sharing profits does not work.
Bosses hide profits. Pay people on basis of a wage +
1/3rd pay incentive for higher productivity.
 1938 – Fair Labor Standards Act set min. wage at
25¢/hr

The Beginning of Management –

Pay?
 In 1895- proposed a Piece Rate System:
 Observe & Analyze – set the ―standard‖ for job
(use Time and Motion studies)
 Pay workers for meeting/exceeding standard
 Pay individual worker – not everyone, or
group/department, or the ―job‖ = pay according to
individual value to business
What Adam Smith had done for markets, Taylor
does
for the firm – place wealth creation squarely on
the
individual worker who is managed, rewarded for
effort.

Frederick Winslow Taylor

―Father of Modern Management‖
Management Schools of
Thought
 We can study the different eras of
Management thought under following
headings
◦ Classical management theory
◦ Classical administrative school
◦ Behavioral management theory
◦ Quantitative management theory
◦ Systems management theory
◦ Contingency management theory
◦ Quality management theory

Management Schools of Thought

A. Classical Scientific School

The classical scientific branch arose as a result of a need to increase productivity.

1. The emphasis was to try to find the one best way of getting work done by examining the
way work was accomplished, the sequence of steps, and the skills of the workers in order
to increase efficiency.

2. Major contributions include Frederick Taylor and Henry Gantt.

3. The emphasis on job specialization and time and motion studies are the foundations for
efficiency in work.

4. These theorists provided a rational approach for examining work-related problems.

Assessment:
Many of the school’s theories, principles, and methods (such as time and motion study) are
with us today, but have been modified to include other things such as people skills.

CLASSICAL MANAGEMENT THEORY

B. Classical Administrative School
The classical administrative branch grew out of the need for guidelines to manage the
complex organizations that emerged out of the Industrial Revolution. It also focused on
productivity.

1. The emphasis was on the development of managerial principles rather than work methods.

2. This school accommodates a belief in studying the flow of information.

3. These theorists aimed at understanding how an organization operate.

4. Major contributors included Henri Fayol and Chester Barnard.

5. Fayol provided fourteen principles of management based on his management experiences.

These principles provide modern-day managers with general guidelines to organize and
administer.

Assessment:
The school’s bureaucratic approach has both benefits and limitations, but the school paved the
way for the behavioral or human relations school.

B. Classical Administrative School

BEHAVIORAL MANAGEMENT THEORY

A. Behavioral School

1. The behavioral management school took management another step forward.

2. By focusing on employees as individuals, as parts of work groups,

behaviorists forced management to view the work environment from another
stance.

3. Modern-day managers now view employees as individuals, as resources,

and as assets to be developed and worked with—not as machines.

4. Major contributors included Robert Owen, Mary Parker Follett, Elton Mayo,
and Douglas McGregor.

Assessment:
The school integrated ideas from sociology, anthropology, and
psychology with management theory, but its major limitation is its complexity.

BEHAVIORAL MANAGEMENT
THEORY
QUANTITATIVE MANAGEMENT THEORY

A. Operations Management

1. Models, simulations, and games that are applied to manufacturing or service industries
are primary to this area of work.

2. Various production measuring techniques such as inventory models, break-even

analysis, and queuing theory constitute operations management.

B. Management Information Systems

1. MIS is a computer-based system that provides decision-making information to

managers.

2. For quite some time American companies lost sight of customers and quality by being
preoccupied with quantitative theories.

Assessment
Quantitative tools can be useful in making decisions but do not eliminate the need for sound
judgment and experience.

QUANTITATIVE MANAGEMENT
THEORY
SYSTEMS MANAGEMENT THEORY

A. Systems School

1. The internal systems of an organization are its subsystems.

2. Many of the functional areas of an organization are its subsystems.

3. All subsystems interact with each other.

4. Managers control subsystems.

5. Most external systems are beyond the control of management.

6. Groups, other organizations, and the government influence or place pressure on many businesses.

Cumulative Energy of Synergy

1. Systems and Synergy: The whole is greater than the sum of its parts.

Assessment
This school helps managers to view the interrelationships within organizations, but considering the complexity
of organizations may result in being overly cautious.

SYSTEMS MANAGEMENT THEORY

CONTINGENCY MANAGEMENT THEORY

A. Contingency School

1. Variables, flexibility, and adaptation make up the ingredients for

contingency management.

2. Drawing upon the past to accommodate the present and

predict the future are
considerations for contingency thinking.

Assessment
The approach helps managers to develop fallback positions and
think creatively. It
has contributed to quality management theory.

CONTINGENCY MANAGEMENT
THEORY
QUALITY MANAGEMENT THEORY

A. Kaizen Approach
1. Japanese in origin.
2. Small incremental steps of improvement.
3. Quality pays for itself over time.

B. Reengineering Approach
1. Change is constant. It will always occur.
2. Setting direction through vision.
3. Rapid and radical changes may be needed.
4. Companies must ask: ―What do we do best?‖

Major Contributors to Quality Management

1. Foreign competition has forced the focus on quality.

Assessment
This school has its roots in the other schools and is the most current.

QUALITY MANAGEMENT THEORY

Major Contributions
 Biography: Wealthy Philadelphia Quaker family
Worked in hydraulics factory as
laborer/foreman/chief
engineer
 At 25 earned college degree in engineering
 At 35- consultant: introduced functional foreman,
production planning, differential pay= cut
costs/increased production)
 1905 – wrote Shop Management
 1909-14: Lecturer at Harvard
 Management consultant – US Navy and Army
 1911- Wrote Scientific Management

Frederick Taylor – Cont.

Frederick Taylor – Cont.
 ―Soldiering‖ – people don‘t
always
try/work hard. WHY?
 If we work hard and complete
the job – no more work next
day; fewer workers needed!
 SO what is the amount of time
needed to do the job?
 How should it be performed –
―One Best Way‖
 What is the standard?
Taylor’s four principles of scientific
management:
 Work methods should be based on scientific
observation – not ―rules of thumb.‖
 Scientifically select, train, and develop each
worker
 Cooperate with workers to ensure that
scientifically developed methods are being
followed.
 Managers analyze and plan work; workers
actually perform the tasks.

Taylor‘s 4 Principles of Scientific

Management
 In hands of business –
Scientific Management = tool to exploit labor
 By 1915 – growing labor against ―Taylorism‖
 Union members/100 workers: 1880=1.8;
1900=7.5; 1914=10.5
 Congress investigates and US Commission on
Industrial Relations issues Hoxie Report (1915)
declaring Scientific Management as exploitive of
labor.
 It will influence Management thought – but Scientific
Management is dead – until rediscovered in Japan –
the 1970/s wave of Quality Management

Demise of Scientific Management

Frank and Lillian Gilbreth
Frank Gilbreth – engineer; pioneered Scientific
Methods in bricklaying.
– Member of Taylor Society (SAM)

Lillian Gilbreth – engineer/industrial psychologist

(PhD); stress and fatigue

Together 12 Children – Cheaper by the Dozen

Time and motion studies

– Breaking up each job action into its
components
(Therblig).
– Finding better ways to perform the action.
– Reorganizing each job action to be more
efficient.
 While in the US ―Management‖ focuses on individual
at
work
 In Europe early theory (that in 1930’s will become
part of
American ―management‖) focuses on the
―organization‖ – Administrative Management Theory.
 Max Weber (German) – focuses on bureaucracy as a
formal organization to gain efficiency.
 Henri Fayol (French) – focuses on 14 principles of
Administration as ―One Right Way‖

Management of the Organization

1. Formal authority comes from one’s organizational
position (Bureaucracy = rational power)
2. Positions should be held based on merit, not social
standing or personal contacts. (Break with
traditional
power)
 Each position’s responsibilities and relationship to other
positions should be clearly specified. (Roles)
 Authority in a bureaucracy is hierarchical power.
 Formalization = well-defined system of rules
 (SoPs), operating procedures, and norms = control via
―rational‖ power.

Weber‘s Principles of Bureaucracy

 Division of Labor: allows for job specialization.
 Authority and Responsibility: both formal and
informal authority result from special expertise.
 Unity of Command: workers have only one boss.
 Line of Authority: clear chain of command, top to
bottom of the firm.
 Centralization: degree to which authority rests at
the top of the organization.
 Unity of Direction: single plan of action to guide the
organization.
 Equity - The provision of justice and the fair and
impartial treatment of all employees.

Henri Fayol‘s Principles of

Management
 Order: place workers where most useful and
have career opportunities.
 Initiative: encourage employees to act on their
own.
 Discipline: workers need to obey
 Remuneration of Personnel: pay what is fair.
 Stability of Tenure of Personnel: Long-term
employment is important
 Subordination of Individual Interest to the
Common Interest: interest of organization
priority
 Esprit de corps: Have enthusiasm

Fayol - Continue
 Mary Parker Follett: The ―Humanizing‖ of
Management and focus on collaboration.
 Taylor ignored the human side of the work,
Follett argued:
◦ Organizations are an interdependence of people.
◦ People have own interests but also share common
goals which should be the basis of conflict
resolution.
 Use of power/coercion creates conflict. People
will defer to the facts of a situation for
authority.

Mary Parker Follett

The ―Hawthorne Experiments‖ were a series of
studies into worker productivity performed at the
Cicero plant beginning in 1924 and ceasing in
1932, initially conducted by the National
Research Council and later by Western Electric
and Harvard University
Illumination Studies, 1924 -1927: Does Use of
Electric Lights Increase Productivity?
Hypothesis: Increased illumination is correlated
with higher productivity.
Finding: No relationship
―Hawthorne effect‖ or "halo effect― – Researcher
affects outcome (bias)

The Hawthorne Studies: New

Direction
Relay Assembly Test Room Experiments, 1927-1929
Harvard research team set up experiment with 5
females from Relay Assembly area to test impact of
incentives and work conditions on worker fatigue

There is no conclusive evidence

that these affected fatigue or
productivity.

Productivity and worker

satisfaction increase when
conditions are improved
and made worse.

2nd Hawthorne Experiment

 Mica-Splitting Test group, 1928 – 1930
Relationship between work conditions and
productivity, by maintaining a piece-rate
incentive system and varying work conditions
 Productivity increased by about 15% and
researchers concluded that productivity was
affected by non-pay considerations
 Conclusion: social dynamics were the
basis
 of worker performance.

3rd Hawthorne Experiment

 Plant-wide Interview program, 1928-1931
1. Western Electric implemented a plant-wide
survey of employees to record their concerns
and grievances. From 1928 to 1930, 21,000
employees were interviewed.
 2. Data supported the research conclusion
that work improved when supervisors began
to pay attention to employees, that work
takes place in a social context in which work
and non-work considerations are important,
norms and groups matter to workers.

Hawthorne Interviews
 Bank Wiring Observation group, 1931-1932
 The final test studying 14 male workers in the
Bank Wiring factory to study the dynamics of the
group when incentive pay was introduced.
There was no effect. Why?
Work group established a work ―norm‖ – a shared
expectation about how much work should be
performed in a day and stuck to it, regardless of
pay.
 The conclusion: informal groups operate
in the work environment to manage
behavior.

Hawthorne : Final Experiment

 Changed perspective in management from Taylor’s
engineering approach to a social sciences approach,
leading to "Human Relations" approach and, later,
"Organization Behavior" approach:
 Engineering approach subordinated to social sciences
 Managers = leaders, motivators, communicators
 At one time major contributors to Management
theory worked on Hawthorne experiments.
 Elton Mayo - ―Human Relations‖
approach (to 1950’s). Mayo’s views
lead to the construction of manager
as a leader.

Hawthorne Experiments -
Importance
There are two ways of perceiving people at
work:
Theory Y:
 Work is as natural as play or rest- not disliked..
 Workers will exercise self-direction and
self-control
 Meeting goals is satisfying and motivating. .
 Workers seek responsibility. ...
 Workers will be creative and are willing to do more.
Theory X:
 The average human inherently dislikes to work
 So, people must be coerced, controlled, directed.
 Workers prefer this – but want security.
 The average worker is only partially utilized.

McGregor: Theory X, Theory Y

 Post World War II – British use of
mathematics, Operations Research, in
military operations find applications in US
post war industrial development.
 Quantitative management — use of
mathematic models, linear programming,
simulation systems and chaos theory to solve
management problems.
 Operations management —techniques
used to analyze all aspects of the production
system.

Management Science Approach

 Total Quality Management (TQM) —
analyzing input, conversion, and output to
increase product quality.
 Management Information Systems
(MIS) — provides information vital for
effective decision making

Management Science Approach-

Cont.
Systems Approach
 There is no ―one best way.‖
 Organizing (and other) decisions that match the demands
of the environment provide adaptation.

Contingency Approach
It depends on where they are in the
organization:

So-‖What does a manager do?‖

 Level Activities Skill
Top Direction/goals.
Allocate resources.
Set standards.

Middle Integrate knowledge.

Balance short-term with
Long term goals.
Develop people.

Frontline Secure resources and

Opportunities.
Manage performance
and improvements.

So-‖What does a manager do?‖

 Myth
Work is reflective and
involve systematic
planning.
No Regular Duties
Relies on formal MIS for
decision-making
Management is a
Science
Source:
What do Top Managers Do?
Mintzberg: The Managers Job
Fact
Work is action oriented, stressed
immediate response, and work was
Varied.
Duties are ritual and ceremonial,
negotiations, and processing soft
information
Favor verbal, immediate
information – even informal, soft
data which is processed into
coherent picture
Relies on judgment and intuition to
Make decisions
1. Interpersonal Roles:
 Figurehead – represents organization and it‘s
authority
 Leader – has power to make things happen
 Liaison – makes contacts with peers and other
managers
2. Informational Roles:
 Gathers and processes information
 Monitor – scan environment for relevant cues
 Disseminator – passes selected information to
those who need to know
 Spokesperson – informs outsiders

Roles of Top Manager- Mintzberg

3. Decisional Roles:
 Entrepreneur – searches for new idea to
implement, keeps mental track of their progress
 Disturbance handler – tries to keep conflicts in
balance and arbitrates conflict
 Resource allocator – decides who gets what
(resources and power); personal basis of
decision-making
4. The Integrated Job of Manager:
 Implication for new manager – requirement for
networks of information
 Implication for Team Managers – requirement for
information sharing

Roles of Top Managers –Cont.

1. Requires insight and introspection
2. Systematic ways to share information –
manager’s monopoly versus periodic
debriefing and exchanges
3. Ability to step back and see ―big picture‖ –
small emergencies detract; need to develop a
―big picture‖
4. Use your specialists – and they need to
understand the need for urgency over
elegance
5. See obligations as an opportunity and take
time for introspection (thinking)

Implications for Effective

Managers
1. Stress ‗cognitive learning ― – stress
thinking skills over ―skills‖
2. Put students into situations to
develop skills – peer relationships,
negotiating, motivating, processing
information, decision making under
ambiguity

Implications for Business

Education