History of Management Thought Chapter 2 History of Management Thought © 2015 YOLO Learning Solutions

Historical Background The development of capitalism and the Industrial Revolution were major cultural changes that preceded the evolution of modern management practice and thought. These changes culminated in a period of industrial chaos and low productivity that gave rise to the definition and development of management as a critical factor of production. © 2015 YOLO Learning Solutions

The Development of Management Theories A management theory is a systematic statement, based on observations, of how the management process might best occur, given stated underlying principles. The major perspectives from which to study management are: The classical approach The behavioral approach The systems approach The contingency approach © 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions

The Classical Approach The classical approach to management stresses the manager’s role in a formal hierarchy of authority and focuses on the task, machines, and systems needed to accomplish the task efficiently. The classical approach to management thought has two components: Scientific management Administrative management © 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions

Scientific Management Scientific management’s overall emphasis was the systematic study of and experimentation with workers’ tasks, methods, and tools as a means of improving worker efficiency. Frederick Taylor developed principles of scientific management: Develop the “one best way” to perform any task. Scientifically select, train, teach, and develop each worker. Cooperate with workers and provide an incentive to ensure that the work is done according to the “one best way.” Divide the work and the responsibility equally between management and the workers. © 2015 YOLO Learning Solutions

Scientific Management (continued) Taylor’s assumptions: Employers and employees have mutual interests associated with economic gain. Humans are rational beings and economically motivated. For every person willing to work hard, there is a job for which he or she is ideally suited. In addition to Taylor, other contributors to scientific management included Frank and Lillian Gilbreth, Henry Gantt, and Morris L. Cooke. © 2015 YOLO Learning Solutions

Administrative Management Administrative management emphasizes the universality of management as a function that can be applied to all organizations. Henri Fayol defined management as a universal process composed of five functions and developed principles needed to coordinate all the activities of the entire organization. Max Weber’s ideas about bureaucracy added the concept of rational authority and management by position to classical management theory. © 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions

Contributions of the Classical Approach to Management Theory Classical theories emphasized work and getting it done efficiently. The main criticisms of the classical theories are that they focused too narrowly on work, machines, authority structures, and efficiency, and that they ignored the human aspect of work. However, the basic purpose behind each classical theory was to improve the standard of living and quality of life for all members of the organization and society in general. © 2015 YOLO Learning Solutions

The Behavioral Approach The behavioral approach to management emphasizes the importance of human behavior, needs, and attitudes within organizations. Mary Parker Follett had strong views on the importance of integrative unity, shared power, and human cooperation. The Hawthorne studies brought to managers’ attention the critical nature of the social needs of workers and led to the development of the human-relations movement. © 2015 YOLO Learning Solutions

The Behavioral Approach (continued) Abraham Maslow proposed that humans have five needs: Physiological Safety Social Self-esteem Self-actualization Management practices directed toward satisfying self- actualization pointed to a new direction for management theory and practice. © 2015 YOLO Learning Solutions

The Behavioral Approach (continued) Douglas McGregor labeled and explained a nontraditional approach known as Theory Y, in contrast to the traditional approach of Theory X. Sigmund Freud’s work on “transference” showed that awareness of transferences is an important skill with respect to effective management leadership. Carl Jung’s work on personality types helped lead to the development of the Myers-Briggs Type Indicator. © 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions

The Systems Approach The systems approach to management theory views organizations and the environment within which they operate as sets of interrelated parts to be managed as a whole to achieve a common goal. Chester Barnard believed that cooperative systems and the acceptance theory of authority helped organizations to adjust effectively to a constantly changing external environment. W. Edwards Deming transformed the notion of quality into a driver of profits instead of a cost of doing business. © 2015 YOLO Learning Solutions

The Contingency Approach The contingency approach helped bridge the gap between theory and practice. It emphasizes identifying the key variables in each management situation, understanding the relationships among these variables, and recognizing the complex system of cause and effects that exists in every managerial situation. As such, the contingency approach maintains that there is no one best way to manage. © 2015 YOLO Learning Solutions

Twenty-First Century Management Peter Drucker’s predictions about the importance of knowledge workers, long-term sustainability, and corporate social responsibility have become important parts of management in the twenty-first century. Peter Senge’s theory of learning organizations states that modern organizations must be in a state of constant learning through continuous improvement and adaptation. © 2015 YOLO Learning Solutions

Management Theory: Past, Present, and Future Each major approach to management theory has added significantly to current knowledge about management. The ideas embedded in each approach have also changed, in some respects, the way managers think and act. Contemporary managers and managers of the future benefit most from understanding and applying selected aspects of each approach. © 2015 YOLO Learning Solutions

© 2015 YOLO Learning Solutions