APPENDIX A: HISTORY OF MANAGEMENT THOUGHT
I. INTRODUCTION
The systematic study of management began during the latter decades of the nineteenth
century, after the industrial revolution had swept through Europe and America.

With the introduction of steam power and sophisticated machinery and
equipment, the industrial revolution changed the way things were produced.
Large factories operated by semi-skilled or unskilled workers were replacing
small shops run by craftsmen.

Owners and managers of the new factories found themselves unprepared for the
challenges that accompanied the shift away from crafts production. Because they
were unprepared for the social problems that occur when people work together in
large groups, they began to search for new managerial techniques.
II. F.W. TAYLOR AND SCIENTIFIC MANAGEMENT

Frederick W. Taylor (1856 – 1915) is best know for defining the techniques of
scientific management, which is the systematic study of relationships between
people and tasks for the purpose of redesigning the work process to increase
efficiency.

He believed that the production process could be made more efficient by using
specialization and the division of labor to reduce the amount of time and effort
expended by each worker to produce a unit of output.

He also believed that the best way to determine the most efficient division of
labor was by using scientific management techniques, rather than intuition or
informal rule-of-thumb knowledge.

Based on his experiments and observations, he developed the following four
principles:
Principle 1: Study the way workers perform their tasks, gather all the informal job
knowledge possessed by workers, and experiment with ways of improving the way
tasks are performed to increase efficiency. One of Taylor’s main tools was the time
and motion study, which involves the careful timing and recording of the actions taken
to perform a particular task.
Principle 2: Codify the new methods of performing tasks into written work rules and
standard operating procedures. Once the best method of performing a particular task
was determined, it should be recorded so that the procedures could be taught to all
workers performing the same task.
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Principle 3: Carefully select workers to ensure that they possess the skills and abilities
that match the needs of the task and train them to perform the tasks according to the
established rules and procedures.
Principle 4: Establish a fair or acceptable level of performance for a task and then
develop a pay system that provides a higher reward for performance above the
acceptable level.

By 1910, Taylor’s system of scientific management had become widely practiced.
The most common problems associated with scientific management were: 1)
managers did not share gains in performance with workers through bonuses, and
2) the specialized, simplified jobs were monotonous and repetitive, resulting in
job dissatisfaction.

Taylor’s work, however, has had an enduring impact on the management of
production systems.
III. WEBER’S BUREAUCRATIC THEORY
Max Weber, a German professor of sociology, outlined his five famous principles of
bureaucracy – a formal system of organization and administration designed to ensure
efficiency and effectiveness. They are:

Principle 1: In a bureaucracy, a manager’s formal authority derives from the
position he or she holds in an organization. Authority is the legitimate power to
hold people accountable for their actions. Authority gives managers the legal
right to direct and control their subordinates’ behavior.

Principle 2: In a bureaucracy, Weber believed that people should occupy
positions based on their performance rather than social standing or personal
contacts.

Principle 3: Weber argued that the extent of each position’s formal authority and
task responsibilities, and its relationship to other positions in an organization,
should be clearly specified. When tasks and authority are clearly specified,
managers and workers know exactly what is expected of them and can be held
accountable.

Principle 4: Weber stated that to exercise authority effectively in an organization,
positions should be arranged hierarchically so that employees know who to report
to and who reports to them.
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
Principle 5: Weber argued that it is very important that managers create a welldefined system of rules, standard operating procedures, and norms so that they
can effectively control behavior within an organization.

Rules are formal written instructions that specify actions that should be taken
under different circumstances to achieve specific goals. Standard operating
procedures (SOPs) are very specific sets of written instructions about how to
perform a certain aspect of a task. Norms are unwritten, informal codes of
conduct that govern how people should act. Rules, SOPs, and norms provide
behavioral guidelines that increase the performance of a bureaucratic system.

If bureaucracies are not managed well, problems can result. Rules may become so
cumbersome that decision-making becomes slow and inefficient.
IV. THE WORK OF MARY PARKER FOLLETT
Much of Mary Parker Follett’s (1868-1933) writing about management was in response
to her concern that Taylor was ignoring the human side of the organization. She believed
that if managers allowed employees to participate, they could make great contributions to
the organization.

In contrast to Taylor, Follett argued that because workers know the most about
their jobs, they should be involved in job analysis and managers should allow
them to participate in the work development process.

Follett also anticipated the current interest in self-managed teams and
empowerment. She believed that if workers have relevant knowledge, they, rather
than managers, should be in control of the work process. Managers should behave
as coaches or facilitators.

She advocated what she called ‘cross-functioning’, in which members of different
departments worked together in cross-departmental teams to accomplish projects,
an approach that is increasingly utilized today.

She proposed that knowledge and expertise, not a manager’s formal authority
deriving from their position in the hierarchy, should decide who would lead.

She also believed, as do many of today’s management theorists, that power is
fluid and should flow to the person who can best help the organization achieve its
goals.

Follett’s approach was very radical for its time, and therefore went unappreciated
by managers and researchers until quite recently. Most continued to follow in the
footsteps of Taylor by attempting to increase efficiency.
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V. THE HAWTHORNE STUDIES AND HUMAN RELATIONS
The Hawthorne Studies were conducted from 1924 to 1932 at the Hawthorne Works of
the Western Electric Company.

They were initiated as an attempt to investigate how characteristics of the work
setting, specifically the level of lighting, affected worker fatigue and performance.
Worker productivity at various levels of illumination was measured.

The researchers found that regardless of whether they raised or lowered the level
of illumination, productivity increased. These unexpected results left the
researchers puzzled.

Elton May, a noted Harvard psychologist, attempted to resolve this mystery by
proposing a similar set of experiments known as the relay assembly tests. Again,
researchers concluded that the increases in productivity could not be solely
attributed to the effects of changes in the work setting.

Gradually the researchers realized that their presence was affecting the results.
Because the workers enjoyed receiving attention and being the subject of the
study, they were willing to cooperate with the researchers to produce the results
they believed the researchers desired.

This particular effect, which became known as the Hawthorne effect, suggests
that the attitude of workers toward their managers affects the level of workers’
performance. This finding led many researchers to direct their attention toward
the study of managerial behavior and leadership.

From this view emerged the human relations movement, which advocates that
supervisors be behaviorally trained to manage subordinates in ways that elicit
their cooperation and increase their productivity.

The importance of human relations training for managers was underscored by
another group of experiments conducted on workers making telephone- switching
equipment. From these experiments, researchers learned that work groups could
exert influence over its members’ behavior in the same way that supervisors do.
Therefore, some theorists argue that supervisors should to be trained to behave in
ways that will gain the goodwill of workers so they, not workers, will control the
work group’s performance.
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
One of the main implications of the Hawthorne studies was that the behavior of
managers and workers in the work setting is as important in explaining the level
of work performance as the technical aspects of the task. Managers must
understand the workings of the informal organization, the system of behavioral
rules and norms that emerge in a group when they try to manage or change
behavior in organizations.

By highlighting the importance of understanding human behavior in
organizations, the Hawthorne studies laid a foundation for the area of
management study known as organizational behavior.
VI. THEORY X AND THEORY Y
Douglas McGregor proposed that two contrasting sets of assumptions about work
attitudes and behaviors dominate the way managers think and behave toward workers.
McGregor named them Theory X and Theory Y.
Theory X
 According to the assumptions of Theory X, the average worker is lazy, dislikes
work, and will try to do as little as possible. Moreover, workers have little
ambition and wish to avoid responsibility.

Therefore, the manager must closely supervise workers and control their behavior
by means of reward and punishment, in order to counteract the workers’ natural
tendencies to avoid work.

Managers who accept the assumptions of Theory X design and shape the work
setting to maximize their control over workers’ behavior. They focus on
developing rules, SOPs, and a well-defined system of rewards and punishments.
They do not give workers autonomy.
Theory Y

In contrast, Theory Y assumes that workers are not inherently lazy, do not
naturally dislike work, and if committed to organizational goals, will exercise
self- control and do what is good for the organization.

According to Theory Y, the characteristics of the work setting determine whether
workers consider work to be a source of satisfaction or punishment. Therefore, it
is the manager’s task to create a work setting that encourages commitment to
organizational goals and provides opportunities for workers to be imaginative,
self-directed, and exercise initiative.
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
Theory X and Theory Y have very different implications as it relates to
organizational design. Theory Y managers can decentralize authority and give
more control over the job to workers, both as individuals and groups. Similar
debates continue today as managers seek to increase the efficiency and
effectiveness of their organizations.
Appendix A Video Case Teaching Note
The Evolution of Management
Teaching Objective: Provide an overview of the development of management theory
and help students appreciate the contributions made by various researchers and
practitioners.
Video Summary: The video traces the evolution of management thought from the
industrial revolution through the 20th century. The video explains four approaches to
management thought--classical, behavioral, systems, and contingency—that helped
provide solutions as times changed and new management problems emerged. It highlights
Frederick Taylor and scientific management, Elton Mayo and the Hawthorne studies, and
W. Edwards Deming and total quality management, and mentions the contingency
approach.
Questions:
1. Among his contributions to management thought, Frederick Taylor outlined the
roles of a manager. Are these roles still relevant today? Explain.
Taylor’s work remains relevant because of its enduring effect on the management of
production systems. Managers in most organizations continue to carefully analyze the
basic tasks that workers must performed in order to devise work systems that encourage
the most efficient level of operation.
2. What change in direction of management theory and practice did the Hawthorne
studies prompt?
The Hawthorne studies showed that physical characteristics of the work setting did not
significantly affect the level of workers’ performance, but the presence of researchers and
the attitudes of workers toward their managers did. These studies helped managers
recognize the importance of understanding how the feelings, thoughts, and behavior of
employees affect performance. After the Hawthorne studies, researchers and managers
began to look at managerial behavior and leadership as ways to influence employees’
behavior and boost productivity.
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3. Compare scientific management, as developed by Frederick Taylor, and
management science theory, as espoused by W. Edwards Deming.
In essence, management science theory is a contemporary extension of scientific
management, since both take a quantitative approach to measuring the worker-task mix to
raise efficiency. Total Quality Management (TQM), espoused by Deming and others,
identified 10 steps necessary to strengthen organizational control and thereby improve the
quality of output. Although it utilizes sophisticated tools such as statistical software
packages and just-in-time inventory that were unavailable to Taylor, TQM has a goal
similar to Taylor’s: redesigning operations to increase both quality and efficiency.
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