Historical Foundations of Management

Understand how historical forces influence the practice of management.Identify and explain major developments in the history of management thought.

Why is history important?

• It gives executives a way of thinking, a way of searching for patterns and understanding trends. It provides a context or environment in which to interpret current problems.

• Forces: Social, political, economic

Management Approaches

• Classical• Humanistic• Management Science• Recent Trends– Systems Theory– Contingency View– Total Quality Management

First Perspective: Classical

Classical Perspective

• Emerged during the 19th and 20th centuries• Factory systems appearing in 1800’s• Problems:– Tooling the plants– Organizing managerial structure– Training employees (many immigrants)– Scheduling complex manufacturing operations– Increased labor dissatisfaction; strikes

Classical Approaches

• Scientific Management– Frederick Winslow Taylor (1856-1915) – Henry Gantt– Frank B. and Lillian M. Gilbreth

• Bureaucratic Organizations– Max Weber (1864-1920)

• Administrative Principles– Henri Fayol (1841-1925)– Mary Parker Follett (1868 – 1933)– Chester I. Barnard (1886-1961)

Scientific Management

Classical Perspective

Frederick Taylor, Engineer Father of Scientific Management

• Problem in labor productivity lies with poor management practices, not labor.

• Manner of change can be determined only by scientific study.

• Replace rules of thumb and tradition with precise procedures developed after careful study.

• Work with Bethlehem Steel plant in 1898

Henry Gantt

• Gantt Chart – a bar graph that measures planned and completed work along each stage of production by time elapsed.

Frank B. Gilbreth(1868 – 1924)

• Pioneered time and motion study• Stressed efficiency; “one best way” to do

work.• Early work with bricklayers• Greatest impact on medical surgery by

drastically reducing the time patients spent on the operating table.

Lillian M. Gilbreth1878-1972

• Widowed in 1924 with 12 children, ages 2 – 19.

• “First Lady of Management”• Pioneered in the field of industrial psychology

and made substantial contributions to human resource management.

Bureaucratic Organizations

Classical Perspective

Max Weber, German Theorist

• Envisioned organizations managed on an impersonal, rational basis.

• An organization based on rational authority would be more efficient and adaptable to change.

• Employee selection and advancement based on competence.

• Rely on rules and written records for continuity.• Manager relies on legal power of his/her position

instead of personality.

Elements of a Bureaucracy

• Labor is divided with clear definitions of authority and responsibility.

• Positions are organized in a hierarchy of authority.

• All personnel are selected and promoted based on technical qualifications, which are assessed by examination.

• Administrative acts and decisions are recorded in writing.

• Management is separate from the ownership of the organization.

• Managers are subject to rules and procedures. Rules are impersonal and uniformly applied.

Administrative Principles

Classical Perspective

Henri Fayol, French Engineer

• General and Industrial Management• Proposed 14 general principles of

management– Unity of command (one supervisor)– Division of work (specialization)– Unity of direction (group similar activities)– Scalar chain (chain of authority)

Mary Parker Follett

• Trained in philosophy and political science• Stressed the importance of people rather than

engineering techniques• “Don’t Hug Your Blueprints”• Analyzed dynamics of management-

organization interactions• Addressed ethics, power and leadership• Proposed concept of empowerment

Chester I. Barnard

• Studied Economics at Harvard; no degree• President of New Jersey Bell in 1927• Proposed the concept of the informal organization• Includes cliques and naturally occurring social

groupings• Acceptance theory of authority – people have free

will and can choose whether to follow management orders.

Second Perspective: Humanistic

Humanistic Perspective

• Human Relations Movement– Hawthorne Studies (1927-1932), Western Electric

Hawthorne Works in Chicago– CIL, Thomas Edison, Honorary Chair, 1924-1927– Elton Mayo, Harvard Business School examined

productivity and work conditions• Human Resources Perspective– Abraham Maslow (1908-1970)– Douglas McGregor (1906-1964)

• Behavioral Sciences Approach

The Hawthorne Effect

• The rewards you reap when you pay attention to people. The mere act of showing people that you’re concerned about them usually spurs them to better job performance.

• When people spend a large portion of their time at work, they must have a sense of belonging, of being part of a team.

Hawthorne Studies

• 1895 – struggle develops between manufacturers of gas and electric lighting fixtures for control of the residential and industrial market.

• More light results in more productivity, they say• RATR 6 year Study Result: Money was not the cause

of the increased output. Employees’ output increased sharply when managers treated them in a positive manner.

• Started a revolution in worker treatment for improving organizational productivity.

The Human Relations Movement

Humanistic PerspectiveThe human relations school of thought considers that truly effective control comes from within the

individual workers rather than from strict, authoritarian control.

The Human Resources Perspective

Humanistic Perspective

Abraham Maslow, Psychologist

• Observed that patients’ problems stemmed from inability to satisfy their needs.

• Proposed a hierarchy of needs– Physiological needs– Safety– Belongingness– Esteem– Self-actualization

• Basis for motivational techniques

Douglas McGregor, College President

• Challenged assumptions about human behavior based on his experiences as a manager, consultant, his training as a psychologist, and Maslow’s work.

• Theory X and Theory Y• Workers are best described by Theory Y• Take advantage of the imagination and

intellect of all employees.

Behavioral Sciences Approach

Humanistic Perspective

Behavioral Sciences Approach

• Develops theories about human behavior based on scientific methods and study. Draws from sociology, psychology, anthropology, economics and other disciplines to understand employee behavior and interaction in an organizational setting.

• Impacts motivation, communication, leadership and human resource management.

Third Perspective: Mgt Science

Management Science Perspective

• World War II created sophisticated tools for modern global warfare.

• Applies mathematics, statistics and other quantitative techniques to management decision-making and problem-solving.

• Operations Research• Operations Management• Management Information Systems• Queuing Theory

Fourth Perspective: Emerging Trends

Systems TheoryContingency View

Total Quality Management (Deming)

Systems Theory

• A set of interrelated parts that function as a whole to achieve a common purpose.– Inputs– Transformation process– Outputs– Feedback– Environment

Contingency View

• Universalist View (classical perspective) – management concepts are universal

• Case View – Each situation is unique.• Contingency View – A manager’s response depends

on identifying key variables in an organizational situation. What works in one setting may not work in another. Contingencies include the environment, industry, technology and international cultures.

Total Quality Management

• Shift from inspection approach to quality control to an approach emphasizing employee involvement in the prevention of quality problems.

• Managing the total organization to deliver quality to customers.

• Significant Elements of TQM– Employee involvement– Focus on the customer– Benchmarking– Continuous improvement

Dr. W. Edwards Deming (1900-1993)

“Father of Quality Movement”• Developed theory and methods to improve

the quality an dependability of manufactured products.

• Out of the Crisis, 14 points• Application of his work in Japan sparked the

Japanese Industrial Miracle-the transformation of Japanese business

• www.deming.org/deminghtml/wedi.html