Organization and

Management
STUDY GUIDE

Chapter 1: NATURE AND CONCEPT OF MANAGEMENT

Lesson 2: The Evolution of Management Theories

Objectives

 THE DEVELOPMENT OF MANAGEMENT THEORY

 SCIENTIFIC MANAGEMENT THEORY
 ADMINISTRATIVE MANAGEMENT THEORY
 HUMAN RELATIONS THEORY
 QUANTITATIVE MANAGEMENT THEORY
 SYSTEM THEORY
 CONTINGENCY THEORY
 QUALITY MANAGEMENT THEORY
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STUDY GUIDE

OBJECTIVES
At the end of this lesson, the students will be able to

 Trace the evolution of management theories,

 Enumerate and discuss the theories on management, and
 Differentiate management theories.

The true measure of the value of any business leader and

manager is performance – Brian Tracy
Management skills have been utilized since ancient times, when tribal leaders
organized hunting and gathering groups to acquire resources from nature. The rise of
civilizations have led leaders to organize communities and implement more complex
tasks such as the construction of infrastructures, the administration of governments,
and even the conduct of war. The emergence of capitalism during the 17 th century
inspired entrepreneurs to establish guiding principles and development means to
ensure the success of any business venture. Theories and views regarding management
soon development soon developed and grew into an organized field of study whose
ideas are applied not only in business but also in other aspects of life.

LET’S EXAMINE
Building the Pyramids of Giza

The great pyramids of Egypt have long been an object of wonder. Numerous
studies have been conducted to understand how the ancient Egyptians were able to
build such massive infrastructures with the simplest technology. The Great Pyramid of
Giza is the oldest and largest of the pyramid and is one of the Seven Wonders of the
ancient world. It was built with about 2.3. Million limestone blocks that weighted
from 25 to 80 tons each. The limestone block was taken from quarries 800 kilometres
away from the plain of Giza. Mode4rn archaeological excavations and estimates using
construction models allowed experts to propose possible ways that the Great Pyramid
was built.

Scientist believed that the construction of the Great Pyramid required the
participation of about 15,000 to 40,000 laborers. They were initially thought to be
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slaves, but recent evidence suggests that majority of them were skilled workers and
many volunteer to participate in the project. Worker cut the limestone from the
quarries and shaped them into blocks using copper, chisels, saws, and drills. Then
groups of about sixty to a hundred men dragged the stones into barges which
transported the blocks along the Nile River. Scientist also believe that the workers
used rollers to easily transport the blocks, and constructed large ramps to stacks the
limestone blocks to form the pyramid. Given that the Egyptians did not use pulleys
and wheels, and lacked iron tools, experts estimate that the construction took about 10
to 15 years.

DISCUSSION QUESTIONS:
1. What challenges did the Egyptians face in constructing the Great Pyramid of
Giza?
2. What methods did the ancient Egyptians employ in constructing the Great
Pyramid?
3. What do you think were the characteristics, skills, and abilities of the Egyptian
leaders who oversaw the building of the Great Pyramid?
4. What do you think were the skills or abilities required of the laborers who
participated in the construction of the Great Pyramid?

LET’S DISCUSS
THE DEVELOPMENT OF MANAGEMENT THEORY
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STUDY GUIDE

Practice of the four managerial functions by the Chinese

110BC

Development of scientific approach to work by the Greeks

400-350 BC Practice of Decetralization by the Romans

Venetian improved production by standardizing assembly lines,

Medieval
Period
using an inventory system and building warehouses.

Emergence of economies of scale which reduces manufacturing

1780-1840 costs during the Industrial Revolution

Business schools flourished. some notable schools established at the

Early 20th
Century
time were Wharton Schools and Amos Truck School

20th Century
US companies engage in manufacturing as the core business.
to Present

SCIENTIFIC MANAGEMENT THEORY

Scientific management is a theory of management which studies the application
of scientific methods and principles for the purpose of redesigning the work process to
increase efficiency. Among its important advocates were Frederick W. Taylor, Henry
Gantt, and Frank and Lillian Gilberth.

Frederick W. Taylor, an American engineer, was the first advocate scientific

management. He pioneered several innovations during his tenure as foremen at
Midvale Steel Company in Philadelphia. Taylor discussed in the depth of scientific
management theory in his book The Principles of Scientific Management. He
introduced the four principles of scientific management as follows:

1. Replace rule-of-thumb methods with those that are scientifically proven.

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2. Select, train, and develop each workers based on scientific methods.

3. Cooperate with workers to ensure that scientific methods are being
observed and implemented in their work.
4. Divide work between managers and workers to ensure that the managers
apply the scientific management principles in planning the tasks and the
workers apply the principles while performing these tasks.

The combination of Taylor books with the research of Frank and Lillian
Gilbreth on the same topic, led to the development of the time and motion study.
Taylor is called the ‘’Father of Scientific Management” because of his contributions to
the development of management.

ADMINISTRATIVE MANAGEMENT THEORY

Administrative Management focuses on the overall management of an
organization, emphasizing the role of managers as administrators of the organization.
This was introduced in the early 20th century by Henri Fayol, a French industrialist.
Fayol identified five functions and fourteen principles of management.

The five functions are planning, organizing, communicating, coordinating,

and controlling. On the other hand, the fourteen principles of management are as
follows:

1. Division of work into specialized tasks, with specific duties and

responsibilities given to individuals
2. Authority of managers to delegate work and task to the employees.
3. Discipline where expectations should be clearly set violators of rules must
be punished.
4. Unity of command where an employee should only report to one
supervisor.
5. Unity of direction which means that the efforts of the employees are
guided toward the attainment of organizational objectives.
6. Predominance of the general interest of the organization over the
individual interests of the employees.
7. Remuneration of the efforts of the employees which should be
systematically rewarded in line with the organization’s vision and mission
8. Centralization where the roles of all employees are clarified, with
emphasis on the distinction between superior and subordinate roles.
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9. Scalar Chain which means that communication should be open within the
of command
10. Order where the organization of jobs and materials must be done in an
orderly fashion.
11. Equity which means that fairness and order must be practiced to maintain
employee commitment
12. Stability and tenure of personnel to actively promote employee loyalty to
the organization
13. Initiative to encourage employees to act on their own in support of the
organizations objective.
14. Esprit de corps to promote teamwork and the unity of interest between the
employees and the management.

Max Weber a German Sociologist, contributed to the development of

administrative and bureaucracy. Weber considered bureaucracy as an important aspect
of modern society, and its emergence is an indication of people adopting a more
rational and law-based view on leadership.

Other contributors to the development of the administrative management

theory were Chester Barnard and Mary Parker Follet. Barnard a former president of
the New Jersey Bell telephone Co. wrote The Function of the Executives, which
highlights the major functions of the senior executive, namely:

1. To formulate the organization’s mission

2. To hire key employees, and
3. To maintain organizational communication

HUMAN RELATIONS THEORY

The human relations theory grew out of the human relations movement in the
1930s. It focuses on the social element in the workplace and consider of interpersonal
relationships, social conditioning, and group norms in determining the performance of
workers.

The foundations of the human relations movement were established in the 1920
with the pioneering studies of Elton Mayo, an Australian psychologist who used his
expertise to implement improvements in the workplace. Managers were encouraged to
be supportive of their workers and to actively involve them in management decisions.
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Mayo observed the introduction of these changes resulted in increased satisfaction

among workers which also resulted in their increased overall productivity.

Another noted contributor to the field of human relations is Abraham Maslow.

Maslow argued that individual behaviour is primarily influenced by certain needs. He
described these needs according to a hierarchy where people try to satisfy first their
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lower-level or basic needs, such as food, clothing, and shelter, and then progress
upward to the higher-level needs such as self-esteem and self-actualization.

QUANTITATIVE MANAGEMENT THEORY

Quantitative Management uses quantitative approaches such as statistical
analyses and computer simulations to arrive at the management decision. The two
main branches of the management are management science and operations
management.

Management Science uses mathematics in problem solving and decision

making. It seeks to create ideal models that will be the basis for improved business
operations and processes. On the other hand, operations management seeks to apply
ideas and models from management science to the actual workplace in dealing with
managerial situations.

Management Information System, meanwhile, is a most recent subfield of

quantitative management. It gathers past, present and projected data from external and
internal sources and transforms them into usable information which managers use to
select the best alternatives and make decisions easily.

SYSTEM THEORY
The system theory explains how interrelated parts operate together to achieve a
common purpose. With the advent of the Industrial Revolution and increasing
requirements for increased efficiency and greater precision in production, the system
approach became the preferred model of business organization. It defines an
organization as a system which is composed of four elements:

1. Inputs
2. Transformation
3. Outputs
4. Feedback

The contemporary systems theory analyses an organization according to the

degree to which it is open or closed. An open system refers to the organizations that
interact closely with its environment. A closed system, on the other hand, does not
interact with its environment and pays little attention to changes in its surroundings.
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CONTINGENCY THEORY
The contingency theory argues that universal theories cannot be applied to
organizations because each organization has unique characteristics and it confronted
with varied problem and challenges. An organization’s performance is also affected
by internal and external factors. This perspective was introduced in 1967 by Fred
Fiedler, an industrial and organizational psychologist who studied the relationship
between leadership and group effectiveness.

Other experts such a Paul Lawrence, jay Lorsch, and James Thompson studied
the impact of contingency theory was the dominant paradigm of organizational
structural theories for most of the 1970s.

QUALITY MANAGEMENT THEORY

Quality Management Theory emphasizes consistency in an organization and
minimal to no errors or defects in production. This ensures quality products and
services that result to high customer satisfaction and increased revenue. Managers and
employees are both closely involved in quality management.

The quality management perspective emerged after the Second World War,
primarily through the work of William Edwards Deming who helped Japanese
industries improved production. His methods involved statistical process control
(SPC) and problem solving techniques. The significant principle espoused by Deming
include improve product design for improve service, uniform product quality, improve
product testing, and increase market sales. Meanwhile, Joseph Moses Juran also
worked with Japanese business and introduced the concept of the quality management
which emphasizes training for top and middle manager.

The Japanese concept of kaizen, introduced in 1986, focuses on the continuous

improvement of people, process, and products. Kaizen is a Japanese world which
means “change for the better” and requires the implementation of gradual change in
an industry or organization over a certain period.

MANAGER IN ACTION
1. How did contingency theories oppose Weber’s bureaucracy and Taylor’s
scientific management? Do you agree with their views? Why or why not?
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2. According to the human relations theory, why is it important to nurture
employee welfare?
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3. Select one of the four principles of scientific management. How is the principle
relevant in the business environment at present?
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4. What are the four elements of a systems theory? Discuss them briefly.
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THE OBSERVER
Look up videos showing the assembly lines in modern automobile plants. Observe
how resources and labor are used in the production of automobiles. Record your
observations and make an essay about your observation.

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