Spring 2007 History of Management Thought 1

The History of Management Thought

Spring 2007 History of Management Thought 2

Why Management History?

• To add perspective to the present…nothing new under the sun

• To understand where ideas came from

• To see the role of social, legal, political, economic, technological factors

Spring 2007 History of Management Thought 3

Management in the Past

• Management existed, but…..– Often hereditary (usually

male…)– One-trial learning– But, some thought about

management

Spring 2007 History of Management Thought 4

• First large state• Centralized government

– Provincial governors (nomarchs)– Bureaucrats (taxation, irrigation)– Based on writing (first

Information Revolution)

• Large scale construction projects– Pyramids, Sphinx, temples– Workforce: thousands of

peasants, possibly slaves (prisoners of war)

The Case of Egypt

Spring 2007 History of Management Thought 5

Sun Tzu and The Art of War• Dates uncertain –

– Some say he lived ca. 544 BC to 496 BC– Others place it closer to 600 BC

• A renowned Chinese general• The Art of War a work on military

strategy, but seen in Asia as a guide to management

• Principles:– Moral cause for battle– Leadership – wise, courageous,

benevolent yet strict– Awareness of environmental conditions –

events and the playing field– Organization and discipline– Espionage

Sun Tzu and The Art of War

“Now the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes few calculations before hand. It is by attention to this point that I can see who is likely to win or lose.”

Spring 2007 History of Management Thought 7

Farming in Rome

• Cato the Elder (234 - 149 BC)• De re rustica or Roman Farm

Management• Instructions for the

management of a commercial farm– Absentee landlord– Based on slave labor– Wine grapes or olives

Spring 2007 History of Management Thought 8

Cato’s Advice• “When the weather is bad and field work

cannot go on, carry the manure out to the manure heap. Clean thoroughly the ox stable, the sheep pen, the yard…”

• How an olive orchard…should be equipped…a foreman, a foreman’s wife, five laborers, three ox drivers, one ass driver, one swineherd, one shepherd, thirteen persons in all….”

• “Have the work oxen cared for with the greatest diligence and to some degree flatter the ox drivers so that they will more cheerfully care for the oxen”

• When the head of the household comes to the farmhouse...he should make the round of the farm; if not on the same day at least on the next.

Planning

Organizing

Leading

Controlling

Spring 2007 History of Management Thought 10

The Industrial Revolution

• A long-term process, not a single event– Protestant Work ethic– Political changes (American,

French revolutions)– Invention of steam power

• Some important figures:– Adam Smith (1776)– James Watt, Eli Whitney

Spring 2007 History of Management Thought 11

The Industrial Revolution – New Technology• Manufacturing

– Steam engines– Cotton gin– Mass production through

standardization and specialization

• Transportation– Steam powered ships– Railroads

• Communications– Telegraph

Spring 2007 History of Management Thought 12

Large Organizations and New Approaches to Management• Economic transformation

– Previously – family farms, small workshops

– After Industrial Revolution – large organizations, requiring management skills

• New demands on management– Need for professional managers

(as opposed to owners)– Need to plan, structure, and

schedule activities– Push to efficiency– Need for worker training and

socialization to factory work

Spring 2007 History of Management Thought 13

The Fortune 500: When Were They Founded?

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10

20

30

40

50

60

70

Spring 2007 History of Management Thought 14

Classical Management• Time period: last half of 1800’s, first

part of 1900’s• Environment:

– Social / Political: little restraint (Robber Barons)

– Economic: manufacturing economy, focus on efficiency

– Technology: most jobs relatively simple

• Major schools– Scientific management– Administrative management theory

Spring 2007 History of Management Thought 15

Scientific Management

• Bottom- up approach• Focus on efficiency,

primarily in industrial settings

• Today: industrial engineering, production management

• Key players:– Frederick W. Taylor– Frank and Lillian Gilbreth

Spring 2007 History of Management Thought 16

General Principles

• Standard methods for performing jobs

• Push to efficiency• Employee selection and

training• Management control over

work processes• Wage incentives for

output

Spring 2007 History of Management Thought 17

F. W. Taylor and Scientific Management• Worked at Midvale Steel

(beginning as a common laborer, rising to chief engineer, in 6 years)

• Identified “soldiering”– Workers doing less than they

were capable of– Due to lack of training, fear of

losing work or rate cuts

• Began with time study and incentive plans

• Pig iron study: the right shovel for each job

Spring 2007 History of Management Thought 18

Frank and Lillian Gilbreth: The One Best Way• Focus on work

simplification and efficiency– Reduce time and fatigue

(Frank)– Involve workers (Lillian)

• “The One Best Way”• Therbligs

Spring 2007 History of Management Thought 20

Scientific Management: Recap

• Contributions:– Pay for performance– Careful examination of job tasks– Importance of training and

selection

• But……..*– Assumed workers were robots

without social needs or higher order needs

– Assumed all individuals were the same

– Ignored worker’s potential to contribute ideas, not just labor

* These are Taylor’s ideas; Gilbreths thought differently

Spring 2007 History of Management Thought 21

Administrative Management Theory• Top-down approach• Focus on rationality, no

matter what the setting• Today: basis of most

management texts• Key players:

– Henri Fayol– Max Weber

Spring 2007 History of Management Thought 22

Henri Fayol• French manager (coal mining)• Published Industrial and General

Administration in 1916 (not translated into English until 1930’s)

• Elements of management– Planning– Organizing– Command, Coordination, Control

• Fourteen principles• Universality of management• Management as a skill can be taught

Spring 2007 History of Management Thought 23

Fayol’s 14 Principles

1. Specialization of labor

2. Authority 3. Discipline4. Unity of

command5. Unity of

direction6. Subordination

of individual interests

7. Remuneration

8. Centralization9. Scalar chain

(line of authority)

10. Order11. Equity12. Personnel

tenure13. Initiative14. Esprit de

corps

Spring 2007 History of Management Thought 24

Max Weber and Authority

• Traditional– Inherited - monarchs

• Charismatic– Based on the individual

• Rational – Legal– Based on the position

Spring 2007 History of Management Thought 25

Max Weber and Bureaucracy• Bureaucracy = management by the

office (Büro)• Weber well aware that bureaucracy

could become an end in itself• Bureaucracy

– Clearly defined division of labor, authority, responsibility

– Offices organized in a hierarchy– Recordkeeping (organizational memory

and continuity separate from individuals)– Selection on the basis of qualifications– Officials appointed, not elected– Administrators work for fixed salaries, on

a career basis– Administrators are not owners– Administrators subject to impersonal

rules, discipline, control

Spring 2007 History of Management Thought 26

Human Relations Movement and Subsequent Developments• Hawthorne Studies• Mary Parker Follett• Chester Barnard

Spring 2007 History of Management Thought 27

Hawthorne Studies• Western Electric plant, Hawthorne

Illinois, 1930’s• Mayo, Roethlisberger and Dickson• Original idea: effect of lighting on

productivity• Three phases

– Relay Assembly Test Room (social nature of work, effect of supervision)

– Bank Wiring Room (group norms)– Interview program

• The “Hawthorne Effect”

Spring 2007 History of Management Thought 28

Theory and Practice

• Mary Parker Follett– Primarily a political thinker,

theoretical writer– Emphasized the importance of

the group

• Chester Barnard– AT & T executive– Importance of communications– Authority -- exists only if

accepted– Functions of the executive

Spring 2007 History of Management Thought 29

The Last Fifty Years

• Management science• Systems theory• Motivation and leadership• Contingency models

Spring 2007 History of Management Thought 30

Management Science

• Different from "scientific management”

• Formative years: 1940's to 1960's

• Operations research• Uses a quantitative basis

for decision making - mathematical models

• Emphasis on managing production and operations

Spring 2007 History of Management Thought 31

Systems Approach

• Formative years: 1950's to 1970's

• Views an organization as a group of inter-dependent functions contributing to a single purpose

• Important contributor: U.S. Department of Defense

Spring 2007 History of Management Thought 32

Motivation and Leadership (1950’s and 1960’s)• Late 1950's: Douglas McGregor

proposed his Theory X and Theory Y assumptions of the relations between

• Early and mid 1960's: contingency models of leadership proposed a need for different styles under different circumstances (Fred Fiedler)

• 1964: Vroom's VIE theory (valence, instrumentality, expectancy) of motivation proposed

• Mid 1960's: David McClelland proposed need for achievement theory

• Late 1960's: Frederick Herzberg proposed his two-factor theory of motivation (motivators and hygiene factors)

• Late 1960's: Edwin Locke outlined his goal setting approach to motivation

Spring 2007 History of Management Thought 33

Situational (Contingency)

• Formative years: 1970's to 1990's

• Is there “One Best Way” ????– Appropriate practice

depends on the situation

• Found in:– Organization design– Leadership