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Chapter 2

The Evolution of Management Theory

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Learning Objectives

1. Identify and explain major developments in the history of management thought.

2. Describe and compare scientific management, administrative management and behavioral management theories.

3. What role does contingency play in organizations?

4. Explain the importance of the external environment in management theories.

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Evolution of Management Theory

Social Forces … values, needs, and standards of behavior. – Family versus Work

Political Forces … influence of political and legal institutions on people & organizations –government systems, capitalism

Economic Forces … forces that affect the availability, production, & distribution of a society’s resources. Machines replacing labor, technology

Influences on Management Practice

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Late 1800s to 1940 Emphasized a rational, scientific approach to

the study of management. Sought to make organizations efficient.

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Scientific Management Pioneered by Frederick Taylor Standard of living is low and production is labor intensive at

the beginning of this period Developed precise, standardized procedures for doing each job Focused on efficiency – “one best way to do the job” Used wage incentive plans. Workers earn higher pay –

management higher profits. Emphasized selecting workers based on abilities and training

workers

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Scientific Management Frank and Lillian Gilbreth

Studied fatigue caused by lighting, heating and design of tools and machines

Time and Motion studies (often filmed workers performing tasks)

• Broke up each job action into its components• Sought better ways to perform the task• Reorganize job action to be more efficient

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Administrative principles What comes to mind when you hear the

word “bureaucracy?” Max Weber developed five principles of

bureaucracy in GermanyDesigned to ensure efficiency and

effectiveness in organizations

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Administrative principles Max Weber’s principles:

Manager’s authority derives from position in organization

People should be given position because of performance

Each position’s responsibility and authority should be clearly defined

Clearly specified hierarchy of authority System of rules and standard operating procedures

which specify how employees should behave.

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Administrative principles Henri Fayol’s 14 Principles of Management Still the foundation for much of management theory of

today Some notable mentions of principles

Manager’s informal authority from expertise, moral worth and ability to lead

Unity of command Important to limit the length of the chain of command Managers should allow employees to be innovative

and creative Equity to all organizational members Esprit de Corps

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Behavioral Management Theory

Emphasized understanding human behavior.Dealt with needs & attitudes in the workplace.Truly effective control comes from within the

individual worker rather than authoritarian control.Hawthorne Studies brought this perspective to

forefront.

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Behavioral Management Theory Mary Parker Follett Scientific management approaches ignored human

side of organization Management should involve workers in finding

better ways to perform tasks Knowledge and expertise should be deciding factor

in who should lead – not manager’s formal authority Precursor to self-managed teams

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Behavioral Management Theory“Managers get things done through people”

Western Electric Company’s Hawthorn Studies (1920s)– Elton Mayo

Started from studies looking at how amount of illumination affected productivity – found that productivity increased in control and experimental groups

Numerous experiments performed on wage incentives, job design, etc. over a decade found that positive treatment of employees had more influence on group productivity.

Money isn’t the only motivator – group norms, standards New emphasis on “human factor” in management

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People are lazy People lack ambition Dislike responsibility People are self-

centered People don’t like

change

People are energetic People want to make

contributions People do have

ambition People will seek

responsibility

Theory X & Y – Douglas McGregor

Theory X Theory Y

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The Contingency ApproachThere is no one best way to organize.

Situations are unique. There are no universal principles of management.

Managers search for key contingencies – important patterns and characteristics

for organizations to be effective, there must be a “goodness of fit” between their structure and the conditions in their external environment.

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Work centered around information and ideas

Work is often virtual

Characteristics of theNew Workplace

Economic Forces

Globalization of markets

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Characteristics of theNew Workplace

Social Forces

Coordination of Family and Work

Increased Longevity of Workers – Multi-generationsCultural Diversity of Workers

Social Responsibility