Evolution of Management

MANAGEMENT AND ORGANIZATION THEORY AND PRACTICE

Marc Myer G. De Asis & Raylene Joy M. Tibang | Organization and Management |
December 2018
Introduction
Change is inevitable. It can happen anytime and for you to survive, you should adapt with
it and go with the flow. This is what happens in an organization nowadays. Dramatic
changes from industrialization to digitization and a shift to globalization leads the
organization to follow these changes for their sustainability.

Organization nowadays are dynamic and with that, management approaches continuously
evolving. The evolution of management is the central topic of this report and we will be
tracking the management approaches from the late 1800’s to the current era. This report
will tackle about the approaches of management from pre-classical to the modern
management practices.

TOPIC OUTLINE
1. Pre-Classical Approach
A. Systematic Management
2. Classical Approach
A. Scientific Management
B. Administrative Management
C. Bureaucratic Management
3. Behavioral Approach
A. Human Relations Movement
a. Hawthorne Studies
B. Human Resource Perspective/Organizational Behavior
a. Douglas McGregor Theory X & Y
b. Abraham Maslow’s Hierarchy of Needs
c. William Ouchi Theory Z
4. Contemporary Approach
A. Quantitative/Management Science Approach
B. System Approach
C. Contingency Approach
D. Situational Management

Pre-Classical Approach: 18th Century Systematic Management

Concept of Systematic Management

 Systematized manufacturing organization.

 Coordination of procedures and processes built into internal operations.
 Emphasis on economical operations, inventory management and cost control.

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Contributions of Systematic Management

 Beginning of formal management in the US.

 Promotions of efficiency and uninterrupted production.

Limitations of Systematic Management

 Ignored relationships between an organization and its environment.

 Ignored differences in manager and worker’s view.

Theorists of Pre-Classical Approach

 Adam Smith. Job specialization.

 Robert Owen. Recognizing the importance of human resource.
 Charles Babbage. Father of computer. Introduced the concept of job specialization
and profit sharing plan.
 Henry R. Towne. Proposed the establishment of science of management and the
development of principles that could be applied across situations in management.

Classical Approach: Scientific Management, Administrative

Management and Bureaucratic Management

Scientific Management
Frederick W. Taylor. Father of Scientific Management and developed a theory that labor
productivity can be improved by scientifically determined management practices.

Four Principles of Scientific Management

a. Develop design of jobs through scientific method to find the “one best way” of doing
each task.
b. Select, train, teach and develop each worker scientifically.
c. Matching of job to its plans and principles.
d. Equal division of work and responsibility.

Other Theorists of Scientific Management

 The Gilbreths: Lilian and Frank Gilbreth. Time motion study – the study of
physical actions required to complete a task in the most efficient manner possible.

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  Henry L. Gantt. Created “Gantt Chart” a graphic illustrations that indicates the
time allocations for sequential operations and traces progress, routing, scheduling
and task in time intervals. His theory suggests that improvement of the systems of
an organizations lies on task scheduling innovations and rewarding of innovations.

Concept of Scientific Management

 Analyzed work using scientific methods to determine “one best way” to do a job.
 Developed standard method for doing each job.
 Selected workers with appropriate skills for each job.
 Trained workers in standard methods.
 Supported workers by planning their work and eliminating interruption.
 Provide wage incentives to workers for increased output.

Contributions of Scientific Management

 Improved labor productivity and efficiency through time and motion study.
 Demonstrated the importance of personnel selection and training.
 Demonstrated equity and economic justice through compensation based on
performance and productivity.
 Instilled cooperation between management and workers.

Limitations of Scientific Management

 Simplistic motivational assumptions.

 Destroyed “the soul of work”, “dehumanized” workers and turned them into
“automatons” or viewed as part of a machine.
 Exclude senior (top) management tasks.
 Ignored relationship between organization and its environment.

Administrative Management
Administrative management approaches focuses on principles that managers can
use in the general management of the functional departments and divisions of the whole
organizations.

Henri Fayol is one of the notable theorist of this type of management approach. In
fact, he introduces the functions of the management- planning, organizing and staffing,
commanding, coordinating and controlling.

Henri Fayol’s 14 Principle of Management

a. Division of Work. The object of division of work is to produce more and better
output with the same effort.

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 b. Authority and Responsibility. Authority is the right to give orders and
responsibility is its counterpart. Whenever authority is exerted, responsibility
arises.
c. Discipline. Obedience and respect for the agreements between the firm and its
employees.
d. Unity of Command. Employee should receive orders from one superior only.
e. Unity of Direction. Objective should be unified under one plan and one head.
f. Subordination of Individual Interest to General Interest. Organization
takes precedence over the individual.
g. Remuneration of Personnel. Workers must be given a fair wage for services
rendered.
h. Centralization. The degree which authority rests at the very top.
i. Scalar Chain. The line of authority from top management to bottom or lower
ranks of the organization.
j. Order. A place for everything and everything in its place. Each employee is put
where they have the most value.
k. Equity. Treating employees fairly with justice and respect.
l. Stability of Tenure of Personnel. Long term employment is important. A
mediocre manager who stays is infinitely preferable to an outstanding manager
who comes and goes.
m. Initiative. Involves thinking out a plan and ensuring its success. Encourages
innovation.
n. Esprit de Corps. Union of strength comes from harmony among the personnel.

Other Theorists of Administrative Management

 Oliver Sheldon. Social Responsibility Management.

 Leonard White. Specialized n Public Administration.
 James Mooney. Preached the good of organizations having a common doctrine and
understanding the common purpose. Reasserted the importance of vertical
communication and staff principle in organizations.
 Luther Gulick and Lyndall Urwick. Famous for POSDCORB acronym for
management functions. POSDCORB stands for Planning, Organizing, Staffing,
Directing, COordinating, Reporting and Budgeting.
 Chester Barnard. Known for concept of “Zones of Indiffference. The idea of his
concept is that, good leaders should try to take middle-of-the-road or neutral
positions on the issues as much as possible because each person’s attitude usually
has such a middle-ground area where they will believe or obey without question.

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Bureaucratic Management
Bureaucracy is a model of organization based on defines positions, formal authority, and a
regulated environment that includes well-documented rules, policies and procedures.

Bureaucratic management is a traditional management system that relies on rules, set

hierarchy, a clear division of labor, and formal procedures and focus on the overall
organizational structure.

Max Weber, father of organizational theory, is considered the guru of bureaucracy.

Characteristics of Weber’s Bureaucracy

1. Rules. Formal guidelines for the behavior of

Rules employees while they are on the job.
2. Impersonality. Managers
Rationality Impersonality and employees are selected based on
their qualifications. All employees are
evaluated according to rules and
objective data.
Bureaucracy
3. Division of Labor. Managers
Lifelong and employees are assigned and
Division of
Career perform duties based on
Labor
Commitment
specialization and personal
expertise.
4. Hierarchical Structure.
Authority Hierarchical Ranks jobs according to the amount of
Structure Structure
power and authority given to each manager
or employee. Authority and responsibility are
clearly defined and legitimized, and it increases
depending on the hierarchy of position.
5. Authority Structure. Organizational structure that determines the right to
make decisions of varying importance at different levels within the organization.
6. Lifelong Career Commitment. Job security is guaranteed as long as the
manager or employee is technically qualified, competent, and performs
satisfactorily.
7. Rationality. General organization’s goal or purpose is broken down into more
specific objectives for each part of the organization.

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Concept of Bureaucratic Management

 Weber’s characteristics of bureaucracy.

 Structured, formal network of relationships among specialized positions in an
organization.
 Rules and regulations standardize behavior.
 Hierarchy defines the relationship among jobs.
 Jobs staffed by trained specialists who follow rules.

Contribution of Bureaucratic Management

 Provides rational model for restructuring complex, mega organizations.

 Minimizes subjective personal factors that affect decision-making.
 Consistency.
 Predictability.
 Reliability.
 Stability.
 Continuity.
 Emphasizes the position, rather that the person, as the source of authority.
 Promotes efficient performance of routine activities.

Limitations of Bureaucratic Management

 Inefficiency due to rigid rules. Rules become an end in itself.

 Red tape.
 Inflexibility. Hinders timely decision-making.
 Coldness.
 Dehumanization. Ignores importance of people and interpersonal relationship.
 Throttle creativity and innovativeness.
 Slow decision-making.
 Incompatibility with changing technology.
 Self-perpetuating. Difficult to dismantle once established.
 Ignores the importance of people and interpersonal relationships.
 Accumulation of power can lead to authoritarian management.

Behavioral Approach: Human Relations Movement and

Human Resources Perspective/Organizational Behavior
Human Relations Movement
Human relations movement is a movement in management thinking and practice that
emphasized the satisfaction of employees’ basic needs to increase worker productivity.

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Hawthorne Studies

A study conducted at Hawthorne Plant of Western Electric Company and in Bank Wiring
Observation Room by Elton Mayo and Fritz Roethlisberger.

Hawthorne Effect. The possibility that individuals singled out for study may improve their
performance simply because of the added attention they receive from the researchers rather
than because of any of the specific factors being tested.

Results of the study conducted shows that the productivity of the employees is positively
influenced by the social environments.

Concepts of Human Relations Movement

 Informal work group influences productivity and employee behavior.

 Cohesion, status and group norms determine output.
 Managers should stress employee welfare, motivation and communication.
 Social needs takes precedence over economic needs.

Contribution of Human Relations Movement

 Psychological and social processes influence performance.

 Maslow’s hierarchy of needs.

Limitations of Human Relations Movement

 Ignored workers’ rational side and the formal organization’s contribution to

productivity.
 Research findings overturned the prescription that happy workers are more
productive.

Other Theorists of Human Relations Movement

 Hugo Munsterberg. Father of Industrial Psychology. His work established the field
of Industrial Psychology, the study of human behavior in a work setting.
 Mary Parker Follet. Prophet of Management. Organizations should operate on the
principle of “power with” than “power over”. Coordination of management and
employees should be observed in achieving goal.
 Oliver Sheldon. Stresses social responsibility. He believed that business owes a
service to society.
 Chester Barnard.
 Kurt Lewin. Founder of modern social psychology. Famous for field approach and
3-step process of change; (1) Defreezing; (2) Introduction of Change; (3) Refreezing.

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Human Resource Perspective/Organizational Behavior
Douglas McGregor Theory X and Theory Y

Theory X: Assumes the average worker is lazy, dislikes the work and will do little work as
much as possible. Managers must closely supervise and control through rewards and
punishment.

Theory Y: Assumes the average worker is not lazy, want to do a good job and the job itself
will determine if the worker likes the work. Managers should allow the worker great
latitude, and create an organization to stimulate the worker.

THEORY X THEORY Y
(Authoritarian Management) (Participative Management)

 Employee is not lazy.  Employee is not lazy.

 Managers must closely  Must create work setting to
supervise them. build initiative.
 Create strict rules and defined  Provide authority to workers.
rewards

Abrahams Maslow’s Hierarchy of Needs

Self-
actualization

Esteem

Social/Belongingness

Safety

Physiological

 Physiological Needs. These are basic needs for sustaining human life itself, such
as food, water, warmth, shelter, and sleep.

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  Safety or Security Needs. These are needs to be free of physical danger and the
fear pf loss of a job, property, food or shelter.
 Affiliation or Acceptance Needs. Since people are social beings, they need to
belong, to be accepted by others.
 Esteem Needs. This kind of need produces satisfaction derived from power,
prestige, status and self-confidence.
 Self-Actualization Needs. The desire to become what is one capable of becoming,
to be able to become what one is capable of becoming, to be able to use fully one’s
talents, skills, ability, knowledge, or to realize one’s potential, and realize one’s best
self.

Herzberg Hygiene Factors and Motivators

This Herzberg theory of motivation is considered to be the modified Maslow’s need

approach. Herzberg separates the elements of a job into two groups:

Dissatisfaction Satisfaction
Hygiene or Maintenance Factors Factors Motivating
 Company policy &
 Opportunity for achievement
administration
 Opportunity for recognition
 Supervision
 Work itself
 Relationship with supervisor
 Responsibility
 Relationship with peers
 Advancement
 Working conditions
 Personal growth
 Salary
 Relationship with subordinates

Hygiene Factors. These factors does not motivate in the sense of yielding satisfaction.
However, these are essential factors since the inexistence of it results in dissatisfaction.

Motivation Factors. Their existence will yield feelings of satisfaction or no satisfaction (not
dissatisfaction).

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 Comparison of Maslow’s and Herzberg’s Theories of Motivation

Maslow’s Hierarchy of
Needs Herzberg’s Two-Factor Theory

Challenging Work
Self-Actualization

MOTIVATORS
Achievement
Growth in the job
Responsibility
Esteem Advancement
Recognition

Social/Belongingness Status

HYGIENE FACTORS
Interpersonal Relations
Quality of Supervision
Safety Company Policy and
Administration
Working Condition
Physiological Job Security
Salary

William Ouchi’s Theory Z

Theory Z is a concept that combines positive aspects of American and Japanese

management into a modified approach aimed at increasing US managerial effectiveness and
productivity while remaining compatible with the norms and values of American society
and culture.

Theory Z refers to Japanese management practices of consensus decision-making, quality

circles, and employee participation to enhance productivity.

William Ouchi introduced Theory Z to describe the American adaptation of Japanese

organizational behavior. His theory is based on a comparison of management in Japanese
organization- called J-type firms and with management in American firms- called A-type
enterprise.

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 American and Japanese Organization Contrasts

A-type Organization J-type Organization

 Mobile Employees  Lifetime Employment

 Personal Decision Making
 Individual Responsibility
 Rapid Advancement
 Specialization in Careers
 Explicit Control Mechanisms
 Focused Concern for Employees
 Collective Decision Making
 Group Responsibility
 Slow and Systematic Advancement
 General Career Perspective
 Implicit Control System
 Holistic Concern for Employees

Concepts of Human Resource Perspective/Organizational Behavior

 Behavioral approach explains how managers influence others to achieve

organizational objectives through human relations and motivation.
 The informal work group influences productivity and employee behavior.
 Cohesion, status, and group norms determine output and productivity.
 Managers stress employee welfare, motivation, and communication.

Contributions of Human Resource Perspective/Organizational Behavior

 Psychological and social processes influence performance.

 Productivity through people.
 McGregor’s Theory X and Theory Y.
 Ouchi’s Theory Z.
 Maslow’s Hierarchy of Needs.

Limitations of Human Resource Perspective/Organizational Behavior

 Ignored workers’ rational side and the formal organizations contribution to

productivity.
 Research findings have overturned the prescription that happy workers are more
productive.

Contemporary Approach: Quantitative/Management Science

Approach, Systems Approach, Contingency Approach and
Situational Management
Quantitative/Management Science Approach
Management Science (MS) approach, often called Operations Research or Quantitative
Approach (QA), uses applied mathematics, statistics, and other quantitative techniques for

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modeling analysis and coming up with solutions to managerial problems. It has four
primary features:

 Focus on problem solving.

 A rational orientation.
 The use of mathematical models, statistics and techniques to solve problems.
 An emphasis on computers in decision support systems.

Churchman, Ackoff and Arnoff define Management Science or Operations Research

approach as:

 An application of the scientific method to problems arising in the operation of a

system.
 The solving of these problems with the use of mathematical equations representing
the system.

Characteristics of MS Applications

 Large number of variables.

 Use of economic implications as guidelines for particular decision-making.
 Use of mathematical models to investigate the decision situation.
 Use of computer.

Contributions of Quantitative/Management Science Approach

 Developed specific mathematical methods of problem analysis.

 Helped managers select the best alternative among a set.

Limitations of Quantitative/Management Science Approach

 Models neglect non-quantifiable factors.

 Managers not trained in these techniques and may not trust or understand the
outcomes of techniques.
 Not suited to non-routine or unpredictable management decisions.

Systems Approach
Systems approach is an approach based on the notion that organization can be visualized
as system.

A system is a set of interrelated parts that operate as a whole in pursuit of common goals.

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Systems approach is based on the general systems theory- the theory that to understand
fully the operation of an entity, the entity must be viewed as a system.

System is a set of interrelated parts that operate as a whole in pursuit of common goals.

System theory is an extension of humanistic perspective that describes organizations as

open systems that are characterized by entropy, synergy and subsystem interdependence.

Types of Systems

 Closed System. Those that are not influenced by and do not interact with its
environment.
 Open System. Interacts with the external environment.

Input. Human, physical,

material, financial and
information resources that
enter the transformation
process and leave it as outputs.

Transformation Process.
Technologies used to convert
input into output.

Output. Is the original output

now in a changed condition.

Feedback. Any form of

information about a system’s
status and performance.

Management role in the systems approach is to ease the transformation process by

planning, organizing, leading and controlling the system.

Management Information System

Management Information System (MIS) is an integrated network of information that

support decision-making.

MIS is a natural extension of systems theory, in which interrelated components of

organizations must be orchestrated.

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One main role of MIS is to recognize information as a resource then use that resource to
better achieve organizational objective.

Management Information System includes people, hardware, software, data and processes.

Concepts of Systems Approach

 Organization is viewed as an open system.

 Management must interact with its environment to gather input and return the
output of its production.
 Organizational objectives must encompass both efficiency and effectiveness.
 Organizations contain a series of subsystems.
 There are many avenues to the same outcome.
 Synergies exist where the whole is greater than its parts.

Contribution of Systems Approach

 Recognized the importance of the organization’s relationship with the external

environment.
 System analysis is helping computer experts develop hardware as well as software
with human-like intelligence; capable of processing languages and reasoning.
 Major impact on manufacturing through the use of computer-aided design (CAD)
and computer-aided manufacturing (CAM).

Limitations of Systems Approach

 Does not provide specific guidance on the functions and duties of managers.
 Still have to develop techniques to effectively deal with the human aspects of
management because systems analysis has been used primarily in the management
of production processes and in the technical planning and decision-making areas of
management.

Contingency Approach
Contingency Management is an approach to management that suggest leadership behavior
should be adapted to accommodate different situations, or alternatively, leaders should be
assigned to situations that best fit their leadership styles.

Contingency theory is a problem-solving approach. It dictates the managers should

consider the major elements in a situation before making a decision, determining what
management style to use, determining how to structure an organization, or determining a
plan or a budget.

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The viewpoint of this theory really means, “It all depends”. It means that different situation
requires different practices and allows the use of the other viewpoints or approaches
separately or in combination to deal with various problems.

Concepts of Contingency Approach

 Situational contingencies influence the strategy, structures and processes that result
in high performance.
 There is more than one way to reach a goal.
 Managers may adapt their organizations to the situation.

Contributions of Contingency Approach

 Identified major contingencies.

 Argued against universal application of principles of management.

Limitations of Contingency Approach

 Not all critical contingencies have been identified.

 Theory may not be applicable to all managerial issues.
 Cannot apply where quantity or number of combinations of variables are
supernumerary.

Situational Management
Situational Management suggests that managers should consider the major elements or
variables in a situation before making a decision and then determine what action to take
based on experience and knowledge.

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