Chapter 2

The Evolution of Management Thinking

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 Introduction

 Management has been practiced by early civilizations in Egypt, China,

Rome, Greece, Mesopotamia…

 The industrial revolution brought new issues: big factories, mass

production, training, etc. As there was no established science of

management, managers were struggling to find answers to the

complex problems they were confronted to.

 Since the late 1800’s, engineers started to develop methods and

theories to improve work processes, to maximize productivity, to bring

down costs, etc. 2

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 The Classic School

 The formal study of management began early in the 20th

century. The first studies of management, often called
the classical approach, emphasized rationality and
making organizations and workers as efficient as
possible.

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 THE CLASSIC SCHOOL
 A branch of management theory that was introduced during the
Industrial Revolution when new problems related to the factory system
began to appear.
 Managers were unsure of how to improve productivity within factories.
 While less common in today’s society, this type of management may
still provide benefits for some organizations.
 Three subfields:
1. Scientific management
2. Bureaucratic organizations

3. Administrative principles

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 1. Scientific Management
Frederick Taylor

Fredrick Taylor (1856–1915) is the ‘Father of Scientific Management’.

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 1. Scientific Management (Taylorism)

 Science Not the rule of thumb to improve labor efficiency .

 Time and motion study (broking work into simple movements
and analyzing them to determine how to perform them in a
minimum of time).
 Work must be conducted in a specific and standardized
sequence (the one best way’ to do the job).
 Instead of doing the whole work by one worker, each one or
two movements are performed by a different worker (division of
labor). By repeating the same tasks the worker become a
master of that specific task.
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 1. Scientific Management (Taylorism)
 For Taylor, the most productive workers should be paid more (piece-
rate pay system).
 Taylor’s ideas have radically shaped methods of mass production
 Ford was the first company to apply scientific management principles
in the auto industry. Ford had managed to bring the average time of car
production from 12 hours to 93 minutes.

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 Benefits and Limitations of Scientific
Management
 Taylorism resulted in a better utilization of resources and huge increase
in productivity and profit for organizations. But, these benefits were
short term, as workers were psychologically demotivated and stressed.
It also resulted in :
 Treating people like robots and deskilling them: workers were
trained to execute the easiest and quickest method of work.
 Limiting worker scope for promotion as there are fewer opportunities
to demonstrate higher capabilities
 Taylorism continue to be relevant and effective in certain high-volume
production like the auto industry, the computer manufacturing plants,
the fast -food industry, etc.
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 2. The Bureaucracy Approach
Max Weber

Max Weber (1864-1920) a German sociologist

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 2. The Bureaucracy Approach
 Max Weber argued that bureaucracy constitutes the most efficient and
rational way in which human activity can be organized
 He believed that organizations should be managed impersonally and
that the behavior of employees should be regulated through a set of
clear rules.
 This non-personal, objective form of organization was called
a bureaucracy.
 For Max Weber, Bureaucracy ensure better efficiency and consistent
execution of work than traditional personal or familial structures.

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 2. The Bureaucracy Approach
 The main features of a bureaucracy are:
 A clear chain of command to facilitate control and order: Every person
is overseen by a person who works one level above him, and this
creates an efficient hierarchy
 A specialization of labor: tasks are well-defined so that workers know
what is expected of them.
 Rules and regulations are formulated and recorded in standard written
procedures.
 Impersonal relationships: rules, procedures, and sanctions are applied
equally regardless of personal considerations.
 Separation of management from the ownership 11
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 Limitations of Bureaucracy
Although bureaucracy made positive contributions to management

thought, it also has many limitations:

 Slowness in handling problems, rigidity and weak communication due

to the many hierarchical layers.

 Hierarchies form barriers between employees and restricts their

ability to come up with innovative ideas.

 As they have no opportunity to express their opinion or influence
decision making, employees may be demotivated and may get
annoyed.

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 3. Administrative Principles
Henri Fayol

Henri Fayol (1841-1925), a French engineer

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 3. Administrative Principles
 Fayol developed 14 principles that provide managers with guidelines on

how to organize their department. Many of these principles still used

today.

 Fayol categorized organizational activities into 6 groups: technical,

commercial, financial, security, accounting and management

 Fayol is also the one who divided a manager’s job into 4 functions

planning, organizing, directing and controlling.

 While Taylor focused on workers efficiency and Weber on the whole

organization, Fayol’s focus was on the direction and coordination of the

organization, which is the domain of the top manager.

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 THE BEHAVIORAL SCHOOL
 It emerged as a result of the many criticisms of the classical
approach which was not useful in dealing with many situations and
failed to explain employees behavior and motivations.
 During the early part of the 20th century, especially as a result of the
great depression in the 1920s and 1930s, more attention shifted to
employee behaviour and social factors at work.
 The behavioral school suggests that we can improve productivity and
satisfaction through a better understanding of human behavior at
work, such as motivation, expectations, conflict and group dynamics.

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 THE BEHAVIORAL SCHOOL

1. Hawthorne studies (Elton Mayo)

2. Maslow’s theory of human needs

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 1. Hawthorne Studies (by Elton Mayo)

 The Hawthorne experiments consisted of two studies conducted at the

Hawthorne Works of the Western Electric Company in Chicago from
1924 to 1932.
 Mayo tested the impact of physical working conditions (lighting levels,
length of rest pause, length of working days...) on productivity. No
consistent relationship were found.
 Instead, workers reacted more to the psychological and social
conditions at work such as individual recognition, and participation in
decision making.
 Employees performed better when managers treated them positively.

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 2. Maslow’s Theory of Human Needs
 For Maslow, human behavior is purposeful and is motivated by the
satisfaction of needs. A need is a physiological or psychological
deficiency a person feels.

Management
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copied
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 2. Maslow’s Theory of Human Needs

 Needs have a hierarchical structure of importance. A need is not an

effective motivator unless those lower in the hierarchy are satisfied. A

satisfied need is not a motivator.

 Maslow’s ideas suggest that employee motivation is more complex

than was assumed by the scientific management approach, which

focused strictly on pay.

 Maslow assumed that pay can motivate only lower-level needs, and

once those are satisfied it loses its power to shape employee

behavior. Instead, nonmonetary factors such as praise, recognition,

and job characteristics motivate human behavior.

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duplicated,Hall, 2001 to a publicly accessible website, in whole or in part.
or posted
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 MODERN THEORIES OF
MANAGEMENT
 Modern management theories include among
others:
1. The Systems theory
2. The Contingency theory
3. The Total Quality Management

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 1. Systems Theory Approach
 The classic approaches studied management by dividing it into elements
such as tasks, motions, functions, needs and attitudes. All these
elements were studied separately, while in reality they interact with each
other. System theorists warned against this “reductionism” as it may lead
to simplistic prescriptions.

 According to the systems theory:

 Organizations depend on their environments for resources
 Organizations, as open systems, adapt to the changing external
environment.

 Managers must see the distinct elements of a situation as well as the

complexities.
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 1. Systems Theory Approach

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 1. Systems Theory Approach

 Systems theory focuses on the relations between the parts and how

they work together as a whole. The parts of the system (subsystems)

are highly interdependent so that a minor event in one part may amplify

into serious unplanned consequences elsewhere in the organization.

 This approach is called abstract and vague. It cannot be easily applied

to large and complex organizations. Moreover, it does not provide any

tool and technique for managers.

 The Contingency approach evolved out of the System Approach to

managing organizations.

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 A restaurant as an example of Systems
Theory Approach
 The Management (a subsystem)

 The cook (a subsystem)

 The waiters (a subsystem)

 The Cashier (a subsystem)

 The Inventory (a subsystem)

 There must be a feedback between each component to provide

excellent customer service because if they don’t communicate a

cashier may sell something to a customer that is no longer

available in the inventory. 24

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 2. Contingency Approach
 While the previous approaches assume that management principles are
universally applicable, the contingency approach suggest that:
 The “One best way of doing” may be useful for repetitive tasks but not for
managerial problems. Organizations are different, face different situations,
and require different ways of managing.
 Managers with a contingency view use a flexible approach, draw on a
variety of theories and experiences, and evaluate many options as they
solve problems. The style used to manage should depend on the
circumstances.
 One limit to the contingency approach is that it is highly dependent on the
experience and judgment of the manager in a given organizational
environment.
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 2. Contingency Approach

 Example of contingent management:

 The approach used to manage a group of teenagers working in a fast‐
food restaurant would be very different from the approach used to
manage a medical research team trying to find a cure for a disease.
 Autocratic management style may be indicated in emergency situations,
or when there is shortage of time. In theses circumstances the use of
authority in directing actions is most appropriate.
 A small organization, will require a different approach of management
compared to a large and complex organization

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 3. The Total Quality Management
 TQM is a management approach to achieving and maintaining high
levels of quality and customer satisfaction. It involves every member of
an organization to improve the quality of products, services, and
processes.
 TQM started in 1950s in the japanese automative industry and spread
in various industries worldwide.
 TQM often incorporates various methodologies, including Lean
management, Kaizen, and Six Sigma, among others. These
approaches complement each other and can be used together to create
a comprehensive quality management system.

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 Kaizen
 Kaizen is a Japanese word for “Change for the better”. KAIZEN

philosophy says that everything can be improved and everything can

perform better or more efficiently.

 Kaizen aims to improve all parts of a company through the

standardization of production processes. Kaizen is a continuous action,

rather than a particular state of being you must reach. So it is a journey

and not a destination, it is a mindset as opposed to being a specific tool.

 When an organization has a Kaizen culture, people use their personal

creativity to identify problems and then develop and implement ideas to

solve those problems.

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 Lean Management
 Lean management is based on the Toyota production system. It

focuses on removal of ‘wastes’ sometimes referred to as ‘muda’ in

Japanese. Operations that fail to create value for the end customer are

deemed “wasteful.” Lean management focuses on the following:

1. Defining value from the standpoint of the end customer.

2. Eliminating all waste in the business processes.

3. Continuously improving all work processes, purposes and people.

 It seeks to eliminate any waste of time, effort or money by identifying

each step in a business process and then revising or cutting out steps

that do not create value.

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 Six Sigma
 Six Sigma was developed by Motorola in the 1980s, and it has since

been adopted by many other companies around the world.

 Six Sigma focuses on improving quality of the final product by finding

and eliminating causes of defects. The goal is achieving consistent and

reliable results through statistical analysis of business processes.

 The term "Six Sigma" refers to a statistical measure of how far a

process deviates from perfection. A process that operates at six sigma

has a failure rate of only 0.00034%.

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 The Total Quality Management
 Organizations often integrate these methodologies to create a

comprehensive approach to quality and process improvement. For

example, a company might use Lean principles to eliminate waste,

Kaizen for continuous improvement, and Six Sigma for statistical

control and defect reduction, all under the umbrella of TQM to ensure a

holistic approach.

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