History of Management

This history of management is also known as Evolution of Management Thought or Bateman and Snell have called it “Revolution of Management. Simple meaning of the word History – it is a record of significant past events in sequence. Here also we will try to study history, but about management history.

This history of management is also known as Evolution of Management Thought or Bateman and Snell have called it “Revolution of Management.” If we look back in the history, around 1100 B.C. the Chinese practiced the four management functions – planning, organizing, leading and controlling. Between 350 B.C. and 400 B.C., the Greeks recognized management as a separate art and advocated a scientific approach to work.

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Classical Approach

• To get the idea about how today’s organizations are evolve.
  
  
• To learn about the mistakes done in past and do necessary correction in future;
  
  
• To understand how different theories are developed.

In case of study of management history here, most important reason is third one, i.e. – to understand how different management theories are developed. This history of management is also known as Evolution of Management Thought or Bate man and Snell have called it “Revolution of Management.

If we look back in the history, around 1100 B.C. the Chinese practiced the four management functions – planning, organizing, leading and controlling. Between 350 B.C. and 400 B.C., the Greeks recognized management as a separate art and advocated a scientific approach to work.

Before the birth of Christ, the Romans decentralized the management of their huge empire and many such development had taken place in those days.

Two historical management concepts

There are two important concepts required to be understood as a part of early management concepts in history, They are: Division of labor and Economies of scale.

Division of labor means divide the jobs into small part and do it as a repetitive activity, This can give lots of economic advantage for the organization,This concept was argued by Adam Smith in his book The Wealth of Nations in 1776.

Economies of scale means when total volume of production increases, average cost of a product reduces. This concept came in picture at the time of industrial revolution, where industrial revolution means – advent of machine power, mass production and efficient transportation.

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Classical Approach

In classical approach, major contribution has come from systematic approach, scientific management, administrative management, human relations, and bureaucracy. In contingency approach, quantitative management, organizational behavior, systems theory and contingency theory and theory Z are the part of it.

Now first let us discuss classical approaches:

Systematic Management

In 19th century, most of the business in manufacturing industry were suffering from poor coordination among subordinates and different level management problems disturbing to manufacturing process.

In this situation, systematic management mainly focused on internal operations, like – economical operations, adequate staffing, maintenance of inventories to meet consumer demand and organizational control. These goals were achieved through:

• Clear definition of duties and responsibilities;
  
  
• Standardized techniques for performing these duties;
  
  
• Specific means for gathering, handling, transmitting and analyzing information.
  
  
• Cost accounting, wage and production control systems to facilitate internal coordination and communication.

Scientific Management

Systematic management failed to lead to widespread production efficiency. To work in this direction, a second approach was introduced by an engineer named Frederick W.

Taylor, also known as father of scientific management. This scientific approach has focused on scientific way to analyses work and determine how to complete production tasks efficiently.

Taylor identified four principles of scientific management:

• Analyses the work using scientific methods to determine ‘one best way’ to complete production tasks.
  
  
• Management should scientifically select, train, teach and develop each worker so the right person has the right job.
  
  
• Heartily cooperate with the workers and assure that all work is in harmony with principles of science.
  
  
• Divide the work and responsibility equally between workers and management and management should take that work, which is more suitable to them than workers.
  
  

To implement these four principles, he used time and motion study and differential piece rate system to make his principles successful. Here time and motion study means observe various motions at the workplace, identify the necessary and unnecessary movement to carry out the work.

eliminate unnecessary movements; observe the time required for the necessary work with stop watch; develop shorter and few movements and standardize the motion and time, whereas differential pay rate system means those employees who produce less than the standard production receive low piece rate and those who produce above the standard production receive higher piece rate.

Apart from F. W. Taylor, four more people have contributed in the era of scientific management, that is presented in brief:

Robert Owen

He was a manager of different cotton textile mills and he was the first person to pay attention to labor welfare, He suggested a change in the attitude of industrialists towards workers.

Charles Babbage

He was a mathematician from Cambridge University. He advocated for meths and machines for the solution for factory problems. He said good management which guides workers and direct and control machines – is very crucial for success. In fact, Babbage prepared the foundation for scientific management.

Henry Gantt

He has worked with F. W. Taylor on many projects. He had modified Taylor’s incentive plan. He also introduced bonus for supervisors with certain conditions. He is also known for his Gantt Chart – it provides a graphic schedule for the planning and controlling of work, and recording progress towards stages of a project.

The Gilbreths

Frank and Lillian Gilbreth – a team of husband and wife have jointly work for fatigue and motion study. According to them, a worker should do present job, prepare for his/her next highest job and train a successor, all at the same time.

Administrative Management

Limitations of scientific management has led to the development of administrative management. Henry Fayol is the major contributor for administrative management. When Taylor wrote a book, he also wrote but focused areas were different. Taylor has more focused on first line managers and scientific method, whereas Fayol has wrote about all management.

Fayol wrote from his personal experience, because he was a director of a large French coal mining firm. Fayol said that management practice is very different from other accounting, finance, production, distribution and other typical business functions.

He believed that management activity is required in all human efforts, like – business, government, and even in home and he has given 14 fundamental rules as a fundamental rules of management. They are:

Division of work

A person with specialization in work,can perform more efficiently.

Authority

To get the work done from others. Managers need authority, it means they must have right to take decision and give order.

Discipline

Employees must obey and respect rules of the organization,or else should punish violations.

Unity of Command

Every employee must receive order from one superior only, otherwise it can create confusion and conflict among people.

Unity of Direction

Organization should have a single plan of action to guide managers and workers to achieve organizational objectives.

Subordination of Individual Interest to General Interest

Interest of the organization should have dominance and priority, not interest of an individual or a group.

Remuneration

There should be a systematic and fair remuneration pattern for employees and employers.

Centralization

Decreasing the role of subordinates in decision making is centralization and increasing their role is centralization. Fayol said that determine relative importance of superior and subordinates roles – needs to balance the authority between them.

Scalar Chain

The line of authority from top management to the lowest ranks is the scalar chain, which must be followed in communication and work.

Order

People and material should be at the right place and right time for smooth functioning and wastage of material in the organization.

Managers should be kind and fair to their subordinates.

Equity

Stability of tenure of personnel

An organization must take steps to obtain as much stability in its management and workforce as possible

Initiative

Employees should be encouraged to contribute new ideas and experiences in work assigned to them.

Esprit de corps

Promoting team spirit will build harmony and unity within the organizations.

Other than Henry Fayol, Max Weber has also contributed for administrative management, specifically for the area known as “bureaucracy – which emphasizes on a strictly defined hierarchy governed by clearly defined regulations and line of authority.

Human Relations Movement

Mary Parker Follet and Chester Barnard developed the theories on the basic framework of classical school and introduced new ideas to human relations and organization structure. Mary Parker Follet:

Mary believed that distinction between superiors and subordinates hindered natural partnership. She developed a model of behavioral model of organizational control. She advocated for power with rather than power over and said that group power should be valued over individual power and workers of all levels should integrate to reach organizational goals.

Like Mary, Chester Barnard also initiated for human relations movement. He said people work together to achieve organizational goals, as an individual he can not accomplish it and at the same time he must satisfy his personal goals. He also stressed the use of informal groups effectively.

Human Relations Movement

Base of human relations approach is that workers should be treated as human beings, not like other factor of production. According to Elton mayo and his colleagues pointed out that the methods of scientific management are not adequate and do not contribute to individual and organizational goals, who were the major contributors for this movement. He is considered as father of human relations approach.

Hawthorne Experiments: Hawthorne experiments were done in four phases to do the systematic analysis of human factor at Hawthorne Plant of Western Electric Company USA, so based on the name of the company, it is called Hawthorne experiments.

At the end of four experiments at Hawthorne, Elton Mayo concluded.

• Behavior and attitudes are closely related;
  
  
• Group influences significantly affect individual behavior;
  
  
• Group standards establishes standard for individual output;
  
  
• Money is a less important factor in deciding output, but group standards, group attitudes and security makes significant difference.

Earlier we have discussed various classical approaches, now it is an area of contingency approaches – which include, quantitative management, organizational behavior, system theory and the contingency theory.

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Contingency Approaches

Quantitative Management

Quantitative management emphasizes on the application of quantitative analysis to management decisions and problems. This approach can be helpful to management by developing formal mathematical models of the problem. Techniques like statistical decision theory.

linear programming, forecasting, breakeven analysis, network modelling is the contribution of quantitative management. They are applied in different functional areas of management like production, quality control, distribution, finance, research and development etc.

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Organizational Behavior

During 1950’s a transition took place in human relations approach. People have felt that some other factors than satisfaction of economic and social needs matter. In that time organizational behavior perspective has emerged, which was a study of management activities that promote employee effectiveness through an understanding of the complex nature of individual, group and organizational processes. Here a significant contribution is known of Douglas MC Gregor of Theory X and Theory Y.

According to MC Gregor, theory X managers assume that workers are very lazy and irresponsible and require constant supervision and external motivation to achieve organizational goals and theory Y mangers assume that employees want to work and can direct and control themselves. He advocated theory Y perspective, suggesting that managers who encourage participation and allow opportunities for individual challenge and initiative would achieve better performance.

Systems Theory

Basically, an organization is a managed system, that changes inputs (raw materials, people and other resources) into outputs(the goods and services that comprise its products). Here, the word system is a connection of its interdependent elements or factors that work together to achieve the aim of system. This system is made up of many sub-systems, like its functions like marketing, finance, production, HR etc.

Apart from these functional areas, there are many other factors – individuals, groups, attitudes, motives, formal structure, interactions, goals, status, and authority also affect the system. The term interdependent is very important here, because if purchase department will not purchase sufficient quantity, than production department will not be able to produce as per plan, Hence, it can be said that different activity of organization system is interlinked and interdependent.

A change in one sub-system can affect total system. Therefore sub-systems work together towards synergy (a harmony of forces) in order to accomplish organizational goals that couldn’t have been accomplished by any one sub-system alone, which is also presented in the form of A + B = C, here, A and B are sub-systems and alone they are less than the sum of them. i.e. – C.

So, management thinkers have understood the value of every individual part of organization, including its sub-system through this system theory. In system, impact of one part on another should also be predicted, before putting it into action. In system approach, organization must take into consideration its external environment.

because it also affects in many ways to the organization work and decisions. So if manger will coordinate the work activities of the various parts of the organization and see that all the interdependent parts of the organization are working together, organizational goal can be achieved properly. Some important terms connected with system theory are:

Open v/s Close System

An open systems interacts with other systems through the free passing of information, whereas closed systems operate on their own with little or no influence from the outside world.

Entropy

Entropy can be defined as the measure of disorder, uncertainty and consumed energy in a system or in the Universe.

Synergy

Synergy means that the whole is greater the sum of its parts. For e.g. A + B = C, where sum of C is always greater than A and B. According to system theory, it is the advantage of joining two subsystems and get more outcome.

Subsystem

Each part of a bigger system is a sub-system.

Contingency Theory

Building on system theory ideas, the contingency perspective disapprove universal principles of management by stating that a variety of factors, both internal and external may affect the organization. Thus, there is no “one best way” to manage and organize, because circumstances vary.

E.g. – a universal strategy to offer a low cost product can not be successful in the market, where customers are not cost conscious. Situational characteristics are called contingencies. These contingencies include.

Situational characteristics are called contingencies. These contingencies include:

• External environment;
  
  
• Internal strength and weaknesses of the organization;
  
  
• The values, goals, skills and attitudes of managers and workers;
  
  
• Type of tasks, resources, and technologies the organization uses.
  
  

With an eye of these contingencies, a manager may categories the situation and then choose the proper competitive strategy, organization structure, or management process for the circumstances.

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FAQ

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