Evolution of
Management and
Organizational Theory
Agrarian
Prescientific
Classical
Industrial
Neoclassical
Modern
Post Industrial
1
Pre-Industrial Societies
• Biased against management
– Ruling class perceived work,
commerce, and trade as
undignified
– Work was done by slaves
Individuals were bound to their
stations for life
• Rules were not questions
• Profit making was not favorably
viewed by the ruling class
• Money should be made by
conquering
2
Management Theory
during Pre-Industrial
Societies
• Sporadic, Widely scattered
• Span of Control discussed by
Egyptians
• Socrates discussed leadership
• Plato described work
specialization
3
Agrarian
• Farm/home was the focus of the
work
• Followed in the footsteps of
parent
• Craftwork was prevalent
• Land meant wealth
4
Classical Management
• Needed due to Industrial
Revolution
– Two stages of industrialization
• Development of an industrial
infrastructure
–
–
–
–
–
–
Nationwide Transportation System
Source of cheap power
Technological innovations
Modern Communications
Networked Financial Institutions
Educated Labor Force
• Creation of capital goods sector
5
Administrative Theory
• Henri Fayol (Five Functions of
Management):
–
–
–
–
–
Division of Work
Authority and Responsibility
Unity of Command
Renumeration
Espirit de Corps
• Much of knowledge of
organizational structure came
from this theory
6
Scientific Management
• Four basic tenets (Frederick
Taylor):
– Develop one best way to do each
job
– Select the best individual for the
position
– Ensure the work is carried out in
prescribed fashion (training and
increased wages as the carrot).
– Divide work among employees so
that activities such as planning,
organizing, and controlling are the
prime responsibilities of managers
7
Structuralist School
• Ideal Organization (Max
Weber), the Bureaucracy:
– Rules and procedures control
organizational function
– High degree of differentiation
exists between function
– Hierarchy used for reporting
– Rules and norms regulate
behavior
– Ownership and administration are
separate
– Administrative acts are recorded
in writing
8
Neoclassical Theory
• Pointed out harmful effects of
trying to standardize people
• Studies showed the impact coworkers (rather than economic
incentives) could have on
productivity
• Social considerations began
receiving attention
• Management must help satisfy
needs and desires
– Two sources - Sociologists (Human
Relations) and psychologists
(Behavioral) 9
Human Relations School
• Hawthorne Experiments
– Regardless what the researchers
did, productivity went up
– High morale was noticed
– Informal organization important
• First work that put the human
factor at the center of their work
10
Behavioral School
• Bases for education today
• Human behavior based on
orientation to personal growth,
accomplishment, and inner
development
• Jobs must provide the
opportunity to develop
themselves
11
Post-Industrial Society
• Characterized by:
– Basic shift in orientation from goodsproducing to sevices-rendering /
information-processing
– Gradual and steady rise in the influence
of professional and technical
occupations
– Growing influence and centrality of
theoretical knowledge as source of
innovation and policy formation for
society
– Increased need for planning and control
of technology and its growth
– Emergence of integrated computer
systems to create new intellectual
technology
12
Post-Industrial Pressures
• Growing Global Competition
• Increased Governmental
Regulations dealing with Social
Controversies
• Resource Scarcity
• Increased labor-force diversity
• Changing cultural norms
• Supply-demand pressures
13
Recent Development in
Managerial Theory
• Emergence of Management
Science and Operations
Research in decision making
• Development of Systems
Theory (total environment)
• Contingency Theory
• Growing influence of
Organizational Behavior
14
Management Science
• Applying quantitative
techniques to management and
organizational problems
• Started with logistical problems
associated with WWII
• New technologies continue to
demonstrate the need to
consider social and
organizational aspects
15
Systems Theory
• Subsystems include:
– Task/Technological subsystem
• Basic work of organization
– Administrative/Structural
Subsystem
• Formal organization
– Subsystem of Individuals
• Their knowledge, skills, attitudes,
values, expectations, perceptions
– Emergent Subsystem
• Implicit arrangements, group
norming
16
Contingency School
• Universal Principle:
– No universal principles of management
can be applied in all situations
• Open Systems Planning:
– Each organization has its own unique
set of technical, human, and market
inputs
• Formal Design of Organizations
– Routine industries need hierarchy,
Complex industries need matrices
• Leadership Style
– Has to be situational
17