Management History

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The History of Management Thought

Spring 2007 History of Management Thought 1

Spring 2007

Why Management History?

• To add perspective to the present…nothing new under the sun • To understand where ideas came from • To see the role of social, legal, political, economic, technological factors History of Management Thought 2

Spring 2007

Management in the Past

• Management existed, but…..

– Often hereditary (usually male…) – One-trial learning – But, some thought about management History of Management Thought 3

Spring 2007

The Case of Egypt

• First large state • Centralized government – Provincial governors (nomarchs) – Bureaucrats (taxation, irrigation) – Based on writing

(first Information Revolution)

• Large scale construction projects – Pyramids, Sphinx, temples – Workforce: thousands of peasants, possibly slaves (prisoners of war) History of Management Thought 4

Spring 2007

Sun Tzu and The Art of War

• Dates uncertain – – Some say he lived ca. 544 BC to 496 BC – Others place it closer to 600 BC • A renowned Chinese general • The Art of War a work on military strategy, but seen in Asia as a guide to management • Principles: – Moral cause for battle – Leadership – wise, courageous, benevolent yet strict – Awareness of environmental conditions – events and the playing field – Organization and discipline – Espionage History of Management Thought 5

Sun Tzu and The Art of War

“Now the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes few calculations before hand. It is by attention to this point that I can see who is likely to win or lose.”

Spring 2007

Farming in Rome

• Cato the Elder (234 - 149 BC) • De re rustica or Roman Farm

Management

• Instructions for the management of a commercial farm – Absentee landlord – Based on slave labor – Wine grapes or olives History of Management Thought 7

Spring 2007

Cato’s Advice

• “ When the weather is bad and field work cannot go on, carry the manure out to the manure heap. Clean thoroughly the ox stable, the sheep pen, the yard…” • How an olive orchard…should be equipped…a foreman, a foreman’s wife, five laborers, three ox drivers, one ass driver, one swineherd, one shepherd, thirteen persons in all….” • “Have the work oxen cared for with the greatest diligence and to some degree flatter the ox drivers so that they will more cheerfully care for the oxen” • When the head of the household comes to the farmhouse...he should make the round of the farm; if not on the same day at least on the next.

Planning Organizing Leading Controlling History of Management Thought 8

Spring 2007

The Industrial Revolution

• A long-term process, not a single event – Protestant Work ethic – Political changes (American, French revolutions) – Invention of steam power • Some important figures: – Adam Smith (1776) – James Watt, Eli Whitney History of Management Thought 10

Spring 2007

The Industrial Revolution – New Technology

• Manufacturing – Steam engines – Cotton gin – Mass production through standardization and specialization • Transportation – Steam powered ships – Railroads • Communications – Telegraph History of Management Thought 11

Spring 2007 Large Organizations and New Approaches to Management • Economic transformation – Previously – family farms, small workshops – After Industrial Revolution – large organizations, requiring management skills • New demands on management – Need for professional managers (as opposed to owners) – Need to plan, structure, and schedule activities – Push to efficiency – Need for worker training and socialization to factory work History of Management Thought 12

Spring 2007

The Fortune 500: When Were They Founded?

70 60 50 40 30 20 10 0 17 80 -1 78 9 18 00 -1 80 9 18 20 -1 82 9 18 40 -1 84 9 18 60 -1 86 9 18 80 -1 88 9 19 00 -1 90 9 19 20 -1 92 9 19 40 -1 94 9 19 60 -1 96 9 19 80 -1 99 5 History of Management Thought 13

Spring 2007

Classical Management

• Time period: last half of 1800’s, first part of 1900’s • Environment: – Social / Political: little restraint (Robber Barons) – Economic: manufacturing economy, focus on efficiency – Technology: most jobs relatively simple • Major schools – Scientific management – Administrative management theory History of Management Thought 14

Spring 2007

Scientific Management

• Bottom- up approach • Focus on efficiency, primarily in industrial settings • Today: industrial engineering, production management • Key players: – Frederick W. Taylor – Frank and Lillian Gilbreth History of Management Thought 15

Spring 2007

General Principles

• Standard methods for performing jobs • Push to efficiency • Employee selection and training • Management control over work processes • Wage incentives for output History of Management Thought 16

Spring 2007

F. W. Taylor and Scientific Management

• Worked at Midvale Steel (beginning as a common laborer, rising to chief engineer, in 6 years) • Identified “soldiering” – Workers doing less than they were capable of – Due to lack of training, fear of losing work or rate cuts • Began with time study and incentive plans • Pig iron study: the right shovel for each job History of Management Thought 17

Spring 2007

Frank and Lillian Gilbreth: The One Best Way

• Focus on work simplification and efficiency – Reduce time and fatigue (Frank) – Involve workers (Lillian) • “The One Best Way” • Therbligs History of Management Thought 18

Scientific Management: Recap

• Contributions: – Pay for performance – Careful examination of job tasks – Importance of training and selection • But……..* – Assumed workers were robots without social needs or higher order needs – Assumed all individuals were the same – Ignored worker’s potential to contribute ideas, not just labor * These are Taylor’s ideas; Gilbreths thought differently Spring 2007 History of Management Thought 20

Spring 2007

Administrative Management Theory

• Top-down approach • Focus on rationality, no matter what the setting • Today: basis of most management texts • Key players: – Henri Fayol – Max Weber History of Management Thought 21

Spring 2007

Henri Fayol

• French manager (coal mining) • Published Industrial and General Administration in 1916 (not translated into English until 1930’s) • Elements of management – Planning – Organizing – Command, Coordination, Control • Fourteen principles • Universality of management • Management as a skill can be taught History of Management Thought 22

Spring 2007

Fayol’s 14 Principles

1.

2.

3.

4.

5.

6.

7.

Specialization of labor Authority Discipline Unity of command Unity of direction Subordination of individual interests Remuneration 8.

Centralization 9.

Scalar chain (line of authority) 10. Order 11. Equity 12. Personnel tenure 13. Initiative 14. Esprit de corps History of Management Thought 23

Max Weber and Authority

• Traditional – Inherited - monarchs • Charismatic – Based on the individual • Rational – Legal – Based on the position Spring 2007 History of Management Thought 24

Spring 2007

Max Weber and Bureaucracy

• Bureaucracy = management by the office (Büro) • Weber well aware that bureaucracy could become an end in itself • Bureaucracy – Clearly defined division of labor, authority, responsibility – Offices organized in a hierarchy – Recordkeeping (organizational memory and continuity separate from individuals) – Selection on the basis of qualifications – Officials appointed, not elected – Administrators work for fixed salaries, on a career basis – Administrators are not owners – Administrators subject to impersonal rules, discipline, control History of Management Thought 25

Human Relations Movement and Subsequent Developments

• Hawthorne Studies • Mary Parker Follett • Chester Barnard Spring 2007 History of Management Thought 26

Spring 2007

Hawthorne Studies

• Western Electric plant, Hawthorne Illinois, 1930’s • Mayo, Roethlisberger and Dickson • Original idea: effect of lighting on productivity • Three phases – Relay Assembly Test Room (social nature of work, effect of supervision) – Bank Wiring Room (group norms) – Interview program • The “Hawthorne Effect” History of Management Thought 27

Spring 2007

Theory and Practice

• Mary Parker Follett – Primarily a political thinker, theoretical writer – Emphasized the importance of the group • Chester Barnard – AT & T executive – Importance of communications – Authority -- exists only if accepted – Functions of the executive History of Management Thought 28

The Last Fifty Years

• Management science • Systems theory • Motivation and leadership • Contingency models Spring 2007 History of Management Thought 29

Management Science

Spring 2007 • Different from "scientific management” • Formative years: 1940's to 1960's • Operations research • Uses a quantitative basis for decision making mathematical models • Emphasis on managing production and operations History of Management Thought 30

Spring 2007

Systems Approach

• Formative years: 1950's to 1970's • Views an organization as a group of inter-dependent functions contributing to a single purpose • Important contributor: U.S. Department of Defense History of Management Thought 31

Spring 2007

Motivation and Leadership (1950’s and 1960’s)

• Late 1950's: Douglas McGregor proposed his Theory X and Theory Y assumptions of the relations between • Early and mid 1960's: contingency models of leadership proposed a need for different styles under different circumstances (Fred Fiedler) • 1964: Vroom's VIE theory (valence, instrumentality, expectancy) of motivation proposed • Mid 1960's: David McClelland proposed need for achievement theory • Late 1960's: Frederick Herzberg proposed his two-factor theory of motivation (motivators and hygiene factors) • Late 1960's: Edwin Locke outlined his goal setting approach to motivation History of Management Thought 32

Spring 2007

Situational (Contingency)

• Formative years: 1970's to 1990's • Is there “One Best Way” ????

– Appropriate practice depends on the situation • Found in: – Organization design – Leadership History of Management Thought 33

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