ORGLEAD O&m Theories

ORGLEAD O&M Theories: Hand‐out
EVOLUTION OF
O R G A N I Z ATI O N &
MANAGEMENT
(O&M) THEORIES
P R O F. L O R E L I E S . A S T R E R A
ORGLEAD
The earliest practitioners of management:

Sumerians, Egyptians, Sun Tzu, etc.
Discussed by Prof. Lorelie S. Astrera 1
• Both taught courses in order

that ‘masters, managers,
and operatives would follow
the straight paths of
improvement’
• Put emphasis on the
necessity of management
education, which paved the
ANDREW CHARLES way for professionals staffing
URE DUPIN the management positions.
(1778-1857) (1784-1873)
INDUSTRIAL
REVOLUTION
• Wealth of Nations, 1776:

championed division of labor
based on specialization
ADAM SMITH  organizational efficiency
(1723-1790)  productivity
STUDY of MANAGEMENT >135 years of

HOW IT STARTED
practice
•Joseph WHARTON (1881) – donated

$100,000 to University of
Pennsylvania to teach management
to produce graduates who would
become "pillars of the state, whether in
private or in public life."
HOW IT STARTED STUDY of MANAGEMENT >125 years of

practice
• Henry TOWNE (1886)– The Engineer as

Economist, called for the management, not only of
machines, but of people.
• Woodrow WILSON (1887) – issued a clarion call
for a science and discipline of Public
Administration
• By 1930, there were more than 30

management schools in the US, including
Harvard
EVOLUTION OF MANAGEMENT THOUGHT
Management Theories
Historical Classical Quantitative Organizational Systems Contingency

Background Movement Approach Behavior Approach Approach
Pre‐Classical Scientific
Thought Management Early Advocates
General Hawthorne
Administrative Studies
Theories
Reference: Robbins, S., & Coulter, M., 2007.
LEARNING OBJECTIVE:
At the end of this sub-module, the students would
be able to answer the question:
What are the various organization and
management theories, frameworks and
principles that have historically evolved from
the pre-industrial times to the contemporary
era?
1. CLASSICAL
MOVEMENT
• Scientific Management
Frederick Winslow TAYLOR (1856-1915)

• Using scientific principles, sought
the One Best Way of Doing a Task
 A fair day’s wage for a fair
day’s work
Senator Louis Brandeis (1856‐1941)
argued that if “Scientific Management”
principles were applied, the US gov’t
could save $1M a day and need not
increase railroad rates
Frank & Lillian GILBRETH (1868-1924, 1878-1972)
• Followers of FW Taylor
• Time and Motion Studies:
Laws of Motion Economy ,
1917  22 principles
dealing with use of the
human body, workplace
arrangement and tools
and equipment design
• Task and Bonus System: completion of
a given amount of work in a given time
• GANTT Chart shows relationship
between planned and completed work
Henry L.
GANTT
(1861-1919)
1. CLASSICAL
MOVEMENT
• General Administr ative
Management
• Systematic Management
Theory
• Introduced:
 5 functions of management
(POCCC‐ planning,
organizing, commanding,
coordinating, controlling)
Henri
 14 principles of management
F AY O L (EEDDUUSSSAROCI)
(1841-1925)
1. Equity. Equality of treatment (but not necessarily
PRINCIPLES
identical treatment)
2. Esprit de corps. Harmony, cohesion among
personnel.
3. Division of work. Specializing encourages continuous
improvement in skills and the development of
improvements in methods.
4. Discipline. No slacking, bending of rules.
5. Unity of command. Each employee has one and only
one boss.
6. Unity of direction. A single mind generates a single
14
plan and all play their part in that plan.

7. Subordination of Individual Interests. When at work,
only work things should be pursued or thought about.
PRINCIPLES
8. Scalar Chain (line of authority). Formal chain of

command running from top to bottom of the organization
9. Stability of Tenure. Limited turnover of personnel.
Lifetime employment for good workers.
10.Authority and Responsibility. The right to give orders
and the power to exact obedience.
11.Remuneration. Employees receive fair payment for
services, not what the company can get away with.
12.Order. All materials and personnel have a prescribed
place, and they must remain there.
14
13.Centralization. Consolidation of management functions.

Decisions are made from the top.
14.Initiative. Thinking out a plan and do what it takes to
make it happen.
Bureaucracy: ‘the perfect office’
6 Principles of Bureaucracy (1912)
1. Hierarchical organization
2. Delineated lines of authority with fixed
areas of activity
3. Action taken on the basis of, and recorded
in, written rules and procedures
4. officials with expert training who act
according to procedures
Max 5. rules implemented by neutral officials
WEBER 6. meritocracy: career advancement
(1864-1920) depending on technical qualifications
judged by organization, not individuals
• If there was 1 best way to a task,
there must be a 1 best way to
organize an organization
• Sought to revise administrative
practices by the establishment of
general rules
• Identified POSDCORB: planning,
Luther organizing, staffing, directing,
coordinating, reporting and
GULICK budgeting
(1892-1992)
2. QUANTITATIVE
APPROACH
• Evolved from mathematical and statistical

solutions to WWII military problems, which were
applied to businesses after the war
– Application of statistics, computer simulations,
information models
 to improve resource allocation decisions (e.g.
Linear Programming)
 to facilitate work scheduling (e.g. Critical Path
Scheduling Analysis)
 to determine optimum inventory levels (e.g.
Economic Quantity Order Model)
3. ORGANIZATIONAL
BEHAVIOR
CLASSICAL MOVEMENT
Assumes that workers are purely
economic beings, ‘homoeconomicus’:
humans as consistently rational
and narrowly self-interested agents,
driven only by economic needs.
• People wish to self‐govern, be
able to contribute, achieve and
grow
• The role of businesses is to
develop individuals  society
will be better because the
organization will also be better,
because you are gaining from all
MARY PARKER of the strengths that are being
FOLLETT brought together in the process.
(1863-1933)
Father of Modern Personnel Management:
• Advocated the concern for the welfare of workers:
If employees were better treated, educated and
happier with their lot, they would work harder
• Experimented on:
• Improving working conditions in factories
• Provided meals at factories for on-duty employees
• Sought to improve the community by building houses
and streets and making the community and factory
ROBERT attractive
• Raising the minimum age for working children 
OWEN national legislation limiting abuse of child labour
(1771-1858)
• Scientific Management Human Relations

• ACCEPTANCE OF AUTHORITY Theory:
An order was accepted by the
employees if they understood it, were
able to follow it, and believed it
appropriate to attain organizational
goals.
Chester I. • Highlighted Importance of informal
BARNARD organization for establishing attitudes,
(1886-1961)
customs and standards
ELTON MAYO (1880-1948)

• Hawthorne Experiments – on
redesign of jobs, changes in
workday/week length, introduction of
rest periods, group piecework
incentive pay)
•  managers must deal with
emotional needs of employees at
work.
• Genesis of the Human Relations
School of Management Thought
HIERARCHY
OF NEEDS
SELF-
ACTUALIZATION (1943)
ESTEEM
ABRAHAM BELONGING
MASLOW SAFETY
(1908-1970)
PHYSIOLOGICAL
2 Factor Theory (1959)
FREDERICK
HERZBERG
(1923-2000)
MOTIVATIONAL
FACTORS
HYGIENE
FACTORS
Theory X & Y of Human Nature (1960)
Douglas
MCGREGOR
(1906-1964)
THREE NEEDS THEORY
(1961): advanced the idea
that regardless of our
gender, culture, or age, we
all have 3 motivating
drivers, and 1 will be most Dominant
Motivator
dominant.
Achievement
This dominant motivator is
DAVID largely dependent on our Affiliation
culture and life
MCCLELLAND experiences. Power
(1917-1998)
4. SYSTEMS
APPROACH
SYSTEMS APPROACH TO
MANAGEMENT (1990)
• Entails the study of a firm in its totality
so that all the organization’s resources
can be organized to realize the
PETER SENGE organization’s overall objectives as
(BORN 1947) efficiently and effectively as possible.
• This implies that every manager should
be much more careful and precise
about decision-making.
CHARACTERISTICS OF ORGANIZATIONS
AS SOCIAL SYSTEMS
• Relative openness. Permeable boundaries (materials can
pass through). Open systems import and export material from
and to the environment.
• Inter‐relatedness. The parts that make up the system are
interrelated and the effectiveness and health of overall
system is contingent on the functioning of subsystems.
• Entropy. Social systems have a natural tendency to fall apart
into disorder.
• Synergy. The whole is greater than sum of parts.
THE SUBSYSTEMS
Psychological OF ORGANIZATIONS
Subsystem
 people subsystem
 goal subsystem
Technical Goal  structural subsystem
Subsystem Subsytem  psychological subsystem
People  technical subsystem
 managerial subsystem
Managerial Structural
Subsystem Subsytem
THE ORGANIZATION AS AN OPEN SYSTEM
System
INPUTS THRUPUT OUTPUTS

Transformation Process
• Human Resources • Employees’ Work Activities • Products and Services
• Raw Materials • Management Activities • Financial Results
• Capital • Technology and Operations • Information
• Technology Methods • Human Results
• Information
• Time
FEEDBACK
THE EXTERNAL ENVIRONMENT
Public Pressure
Suppliers
Groups
THE organizATION
Competitions Customers
5. CONTINGENCY
APPROACH
CONTINGENCY APPROACH
• There is no one best way to manage!
• Contingency perspective - different ways of managing
are required in different organizations and different
circumstances
• Managing in different and changing situations require
managers to use different approaches and techniques
THE CHANGING ORGANIZATION

Tra d i t i o n a l New organization
•Stable •Dynamic
•Rigid •Flexible
•Individual‐oriented •Team‐oriented
•Permanent jobs •Temporary jobs
•Managers always make decisions •Employees participate in decision making
•Rule‐oriented •Customer‐oriented
•Relatively homogeneous workforce •Diverse workforce
•Workdays defined as 9 to 5 •Workdays have no time boundaries
•Hierarchical relationships •Lateral and networked relationships
•Work at organizational facility at •Work anywhere, anytime
specific hours
EVOLUTION OF MANAGEMENT THOUGHT
Management Theories
Classical Quantitative organizational Systems Contingency

Movement Approach Behaviour Approach Approach
Scientific
Management Early Advocates
General Hawthorne
Administrative Studies
Theories
COMPARING THE APPROACHES

Seeks the best way to manage organizations by
Classical focusing on the jobs and structure of the firm.
Seeks a single best way to manage organizations by

Behavioral focusing on people and making them productive.
Recommends using math (computers) to aid in

Quantitative problem solving and decision making.
Focuses on the organization as a whole and the inter-

Systems relationship of its units, rather than on individual
parts.
Recommends using the approach or the combination

Contingency of approaches that best meets the given situation.

ORGLEAD O&m Theories

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ORGLEAD O&M Theories: Hand‐out

The earliest practitioners of management:

• Both taught courses in order

• Wealth of Nations, 1776:

STUDY of MANAGEMENT >135 years of

•Joseph WHARTON (1881) – donated

HOW IT STARTED STUDY of MANAGEMENT >125 years of

• Henry TOWNE (1886)– The Engineer as

• By 1930, there were more than 30

Historical Classical Quantitative Organizational Systems Contingency

Frederick Winslow TAYLOR (1856-1915)

Frank & Lillian GILBRETH (1868-1924, 1878-1972)

1. Equity. Equality of treatment (but not necessarily

plan and all play their part in that plan.

8. Scalar Chain (line of authority). Formal chain of

13.Centralization. Consolidation of management functions.

• Evolved from mathematical and statistical

• Scientific Management Human Relations

ELTON MAYO (1880-1948)

THE ORGANIZATION AS AN OPEN SYSTEM

INPUTS THRUPUT OUTPUTS

Reference: Robbins, S., & Coulter, M., 2007.

THE EXTERNAL ENVIRONMENT

Reference: Robbins, S., & Coulter, M., 2007.

THE CHANGING ORGANIZATION

Classical Quantitative organizational Systems Contingency

COMPARING THE APPROACHES

Seeks a single best way to manage organizations by

Recommends using math (computers) to aid in

Focuses on the organization as a whole and the inter-

Recommends using the approach or the combination

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