1. Evolution of ManagementEvolution of Management
ThoughtThought

2. OrganizationOrganization
A structured social system consisting ofA structured social system consisting of
groups of individuals working together togroups of individuals working together to
meet some agreed-on objectivesmeet some agreed-on objectives

3. Early PracticesEarly Practices
Adam SmithAdam Smith
Scottish philosopher
Wrote ‘Causes of
Wealth of Nations’
Proposed ‘Division of
Labour’

4. Job specializationJob specialization
 Adam Smith, 18th century economist, found firmsAdam Smith, 18th century economist, found firms
manufactured pins in two ways:manufactured pins in two ways:
 CraftCraft -- each worker did all steps.-- each worker did all steps.
 FactoryFactory -- each worker specialized in one step.-- each worker specialized in one step.
 Smith found that the factory method had much higherSmith found that the factory method had much higher
productivity.productivity.
 Each worker became very skilled at one, specific task.Each worker became very skilled at one, specific task.
 Breaking down the total job allowed for the division ofBreaking down the total job allowed for the division of
labor.labor.

5. Charles BabbageCharles Babbage
British Mathematics professor
Wrote ‘On the Economy of
Machinery and Manufactures’
Proposed advantages of
division of labour:
•Reduces the time needed for
learning a job
•Reduces waste of material
•Attainment of high skill levels
•Matching skills and abilities
with jobs

6. Robert OwenRobert Owen
Welsh entrepreneur
Recognised how factory work
was demeaning to employees

7. The Classical EraThe Classical Era
Scientific Management-Scientific Management- Frederick TaylorFrederick Taylor
 Develop a science for each element of anDevelop a science for each element of an
individual’s workindividual’s work
 Scientifically select, train, teach and developScientifically select, train, teach and develop
workerworker
 Cooperation with workersCooperation with workers
 Divide work responsibility equally betweenDivide work responsibility equally between
management and workersmanagement and workers

8. GilbrethsGilbreths
 Frank and Lillian Gilbreth refined Taylor’sFrank and Lillian Gilbreth refined Taylor’s
methods.methods.
Made many improvements to time and motionMade many improvements to time and motion
studies.studies.
 Time and motion studies:Time and motion studies:
1.1. Break down each actionBreak down each action intointo
components.components.
2.2. Find better waysFind better ways to perform it.to perform it.
3.3. Reorganize each actionReorganize each action to be moreto be more
efficient.efficient.
 Gilbreths also studied fatigue problems, lighting,Gilbreths also studied fatigue problems, lighting,
heating and other worker issues.heating and other worker issues.

9. Hawthorne studiesHawthorne studies
- Study conducted in Hawthorne plant of- Study conducted in Hawthorne plant of
General Electric Company, ChicagoGeneral Electric Company, Chicago
-- Mayo, Roethlisberger, Dickson, WhiteheadMayo, Roethlisberger, Dickson, Whitehead
Illumination experiment (1924-27)Illumination experiment (1924-27)
Relay room experiment (1927-28)Relay room experiment (1927-28)
Mass interviewing (1928-30)Mass interviewing (1928-30)
Bank wiring observation (1931-32)Bank wiring observation (1931-32)

10. Implications of HawthorneImplications of Hawthorne
ExperimentExperiment
Social factors in outputSocial factors in output
Group InfluenceGroup Influence
ConflictsConflicts
LeadershipLeadership
SupervisionSupervision
CommunicationCommunication

11. Classical Organization TheoryClassical Organization Theory
Administrative TheoryAdministrative Theory
French industrialist Henry FayolFrench industrialist Henry Fayol
Proposed that a manager plans,Proposed that a manager plans,
organizes, directs, controls andorganizes, directs, controls and
coordinatescoordinates
14 principles of management including14 principles of management including
division of labor, authority, scalar chain,division of labor, authority, scalar chain,
unity of command, initiativeunity of command, initiative

12. Fayol’s 14 principlesFayol’s 14 principles
1.1. Division of workDivision of work
2.2. AuthorityAuthority
3.3. DisciplineDiscipline
4.4. Unity of commandUnity of command
5.5. Unity of directionUnity of direction
6.6. Subordination of individual interest to the generalSubordination of individual interest to the general
interestinterest
7.7. RemunerationRemuneration

13. Fayol’s 14 principlesFayol’s 14 principles
8.8. CentralizationCentralization
9.9. Scalar chainScalar chain
10.10. OrderOrder
11.11. EquityEquity
12.12. Stability and tenureStability and tenure
13.13. InitiativeInitiative
14.14. Esprit de corpsEsprit de corps

14. Max WeberMax Weber
Proposed Structural TheoryProposed Structural Theory
DescribedDescribed bureaucraticbureaucratic
structurestructure
• Division of laborDivision of labor
• clearly defined hierarchy,clearly defined hierarchy,
• detailed rules anddetailed rules and
regulations andregulations and
• impersonal relationshipsimpersonal relationships

15. Formal rules regulationsFormal rules regulations
Division of laborDivision of labor
Hierarchical structureHierarchical structure
Authority structureAuthority structure
Lifelong commitmentLifelong commitment

16. Social Man TheorySocial Man Theory
Mary Parker Follett
Emphasised on
group ethics
Manager must
coordinate group
efforts

17. Chester BarnardChester Barnard
Social Systems Theory
Organisations made up
of people who have
interacting social
relationship
They communicate
Success depends on
maintaining good
relations

18. Herbert Simon
 Described organisations as a complex network
of decisional process
 Decision process comprises: i) intelligent
activity ii) design activity iii) choice activity
 Bounded rationality
 Administrative man : simplification, satisficing
approach
 Orgaisational Communication

19. Peter Drucker
Nature of management as innovative and
creative
Manager has to act as administrator,
entrepreneur, set objectives etc.
Organisation structure to facilitate effective
functioning
MBO

20. Functional ManagementFunctional Management
Structuring of an organization intoStructuring of an organization into
departments or units on the basis of typedepartments or units on the basis of type
of work performedof work performed
AA functional managerfunctional manager is a person who hasis a person who has
management authority over anmanagement authority over an
organizational unit - such as a departmentorganizational unit - such as a department
- within a business or company- within a business or company

21. Management StylesManagement Styles
AuthoritativeAuthoritative
ParticipativeParticipative
Free-reinFree-rein
Pseudo autocraticPseudo autocratic

22. New forms of organizationNew forms of organization
Leaner organizationsLeaner organizations
OutsourcingOutsourcing
Contingent workforceContingent workforce

23. Virtual corporationsVirtual corporations
Highly flexible, temporary organizationsHighly flexible, temporary organizations
formed by a group of companies to exploitformed by a group of companies to exploit
a specific opportunitya specific opportunity

24. Socio-technical approachSocio-technical approach
Management scienceManagement science
Human relations approachHuman relations approach
Systems approachSystems approach
Contingency approachContingency approach

25. Systems approachSystems approach
 Considers relationships inside and outsideConsiders relationships inside and outside
the organization.the organization.
 The environment consists of forces, conditions,The environment consists of forces, conditions,
and influences outside the organization.and influences outside the organization.
 Systems theory considers the impact ofSystems theory considers the impact of
stages:stages:
Input:Input: acquire external resources.acquire external resources.
Conversion:Conversion: inputs are processed into goods andinputs are processed into goods and
services.services.
Output:Output: finished goods are released into thefinished goods are released into the
environment.environment.

26. Systems approachSystems approach
An open system interacts with theAn open system interacts with the
environment. A closed system isenvironment. A closed system is
self-contained.self-contained.

27. Management ScienceManagement Science
 Uses rigorous quantitative techniques toUses rigorous quantitative techniques to
maximize resources.maximize resources.
Quantitative management:Quantitative management: utilizes linearutilizes linear
programming, modeling, simulation systems.programming, modeling, simulation systems.
Operations management:Operations management: techniques to analyze alltechniques to analyze all
aspects of the production system.aspects of the production system.
Total Quality Management (TQM):Total Quality Management (TQM): focuses onfocuses on
improved quality.improved quality.
Management Information Systems (MIS):Management Information Systems (MIS):
provides information about the organization.provides information about the organization.

28. Contingency TheoryContingency Theory
 Assumes there is no one best way toAssumes there is no one best way to
managemanage
 The environment impacts the organization andThe environment impacts the organization and
managers must be flexible to react tomanagers must be flexible to react to
environmental changes.environmental changes.
 The way the organization is designed, controlThe way the organization is designed, control
systems selected, depend on the environment.systems selected, depend on the environment.
 Technological environments change rapidly,Technological environments change rapidly,
so must managers.so must managers.