CHAPTER TWO

EVOLUTION OF MANAGEMENT THOUGHT

The origin of management as a discipline was developed in the late 19th century. Over
time, management thinkers have sought ways to organize and classify the voluminous
information about management that has been collected and disseminated(spread). These attempts
at classification have resulted in the identification of management approaches. The approaches of
management are theoretical frameworks for the study of management. Each of the approaches of
management are based on somewhat different assumptions about human beings and the
organizations for which they work.
The evolution of management thought may be divided into three stages
Classical Theory

Scientific Management of Taylor

Administrative management of Fayol

Bureaucratic Model of Max Weber

2. Neo-classical Theory or Behavioral Approach

3. The Contingency Approach

THE CLASSICAL APPROACH:

The classical approach is the oldest formal approach of management thought. Its roots pre-date
the twentieth century. The classical approach of thought generally concerns ways to manage
work and organizations more efficiently. Three areas of study that can be grouped under the
classical approach are scientific management, administrative management, and bureaucratic
management.
F.W Taylor and Henry Fayoi are generally regarded as the founders of scientific management
and administrative management.
Features of Management in the Classical Period;
It was closely associated to with the industrial revolution and the rise of large-scale
production.
Classical organization and management theory is based on contribution from a number of
sources. They are scientific management, administrative management theory,
bureaucratic model, and micro economics and public administration
Management thought focused on job content, division of labour standardization,
simplification, specialization and scientific approach towards management.

Taylor’s Scientific Management.

Frederick Winslow Taylor known as the father of scientific management was the first to
recognize and emphasis the need for adopting a scientific approach to the task of managing an
enterprise. He tried to diagnose the causes of low efficiency in industry and came to the
conclusion that much of waste and inefficiency is due to the lack of order and system in the
methods of management He found that management was usually ignorant of the amount of work
that could be done by a worker in a day and also the best method for doing the job. As a result, it
remained largely at the mercy of the workers who deliberately dodged work.
Het therefore suggested that those responsible for management should adopt a scientific
approach in their work, and make use of ‘scientific method ‘for achieving higher efficiency. The
scientific method consists essentially of:
Observation
Measurement
Experimentation and
 Inference or conclusion
He advocated a thorough planning of the job by the management and emphasized the necessity
of perfect understanding and co-operation between the management for the enlargement of
profits. He summed up his approach in these words:
Scientific, not rule of thumb
Harmony, not discord(disharmony)
Co-operation, not individualism
Maximum output in place of restricted output
The development of each man to his greatest efficiency and prosperity
Benefits of Scientific Management.
Replacement of traditional rule of thumb method by scientific techniques
Proper selection and training of workers
Incentive to the workers in the form of increase wage rate for higher production.
Standardization of tools, equipment, materials and work method
Detailed instructions and constant guidance of the workers.
Establishment of harmonious(Pleasant) relationship between the workers
Better utilization of various resources
Satisfaction of the needs of the customers by providing higher quality products at reasonable
prices.
Criticism
Workers Criticism:
Speeding up of workers: Scientific Management is only a device to speed up the
workers without much regard for their health and well; being.
Loss of individual worker’s initiative: Scientific Management reduces workers to
automatic machines by taking away from them the function of thinking.
Problem of monotony: By separating the function of planning and thinking from that
of doing, Scientific Management reduces work to a mere routine.
Reduction of Employment: Scientific Management creates unemployment and
hit the worker hard
 Weaking of Trade Unions: Under Scientific Management, the important issues of
wages and working conditions are decided by the government through scientific
investigation and the trade union may have little say in the matter.
Exploitation of workers: Scientific Management improves productivity of the workers
yet they are given a very small share of the benefit of such improvement.
2. Employer’s Criticism:
Loss due to re-organization; The introduction of Scientific Management requires
visual re-reorganization of the whole set-up of the industrial unit. Work may have
to be suspended to complete such re-organization
Unsuitable for small scale firms: Various measures like the establishment of separate
departments such as: production department, personnel department etc. are
expensive for small or modium size industrial unit.

(b) Administrative Management.

. The Administrative Theory of Management was first generalized by Henri Fayol (1841-1925)
with his work and publications, Fayol's 14 Principles of Management (1888)

Fayol is considered the father of Administrative Management Theory, often called Process
Theory or Structural Theory.

As a member of the classical theory movement, Fayol's work was unique from that of Taylor,
who focused on worker efficiency.

Instead, Fayol focused on organization and structure of work tasks. He looked specifically at
how management and workers are organized within a business to allow for the completion of
task.

He always insisted that if scientific forecasting and proper methods are used in management,
then companies will get satisfactory results. Accordingly, to Fayol, management is not personal
talent (not an in-born talent) it is a knowledge
Fayol followed a top-down approach to organizational efficiency. He believed that the effective
organization of management would ultimately have an effect on the productivity of operational-
level workers.

Administrative management theory is in contrast to the scientific approach to management,

which suggested that worker efficiency would lead to greater managerial efficiency.

Henry Fayol is considered the father of modern theory of general and industrial
management. He divided general and industrial into six groups.
Technical activities – Production
Commercial activities – Buying, selling and exchange
Financial activities -search for the optimum use of capital
Accounting activities – stock taking, balance sheet, cost and statistics.
Security activities -Protection of property and persons.
Managerial activities – planning, organization, command, co-ordination and control.
These six functions had to be performed to operate successfully any kind of business. He
however pointed out that the last function i.e ability to manage, was the most important for
upper level of management.

The process of management as an ongoing managerial cycle involving: planning,

organizing, directing, co- ordination and controlling is actually on the analysis of general
management by Fayol. Hence, it is said that Fayol established the pattern of management
thought and practice.

Fayol's 14 principles of management provided specific guidance on the necessary

organizational elements necessary for effective management and demonstrate the
Administrative Management Approach.

These principles can be summarized as follows:

Division of Labor - The division of labour within an organization allows for specialization.
Individuals can become more proficient in the accomplishment of a limited set of activities -
thus improving their output.
Authority - Managers must have the authority to issue commands, but with that authority comes
the responsibility to ensure that the work gets done.

Discipline - There must be a clear line of authority. Subordinates must fully obey instructions
from superiors. Managers must have the ability to instill discipline through punishment.

Unity of Command - There should be only one boss from whom a worker receives instructions?

Unity of Direction -There should be one head or manager for group of activities with the same
objective.

Subordination of Individual Interest - The interests of individuals are subordinate to the

general interests of the group or department or company.

Renumeration - Compensation is used to incentivize worker performance. Remuneration can

include both financial and non-financial forms of compensation.

Centralization - Decision making should be either centralized (management makes all

decisions) or decentralized (employees also make decisions) depending upon the
characteristics of the organization and worker competency.

Line of Authority (Scalar Chain) - There must be a hierarchy of authority that places workers
below managers in the reporting structure. The degree of authority is higher at each stage of
the organizational hierarchy. The organizational hierarchy should be well understood
throughout.

Order - There must be well-defined rules and standards for the work environment and work
responsibilities. A safe and orderly environment leads to greater coordination.

Equity - The organization must be run based upon principles of fairness. Employees should be
treated with a combination of kindliness and justice.

Stability of Tenure (the length of time a person holds a job or an office) - A person needs
time to adjust himself with the new work and demonstrate efficiency in due course. Hence
employees and managers must have job security. Security of income and employment is a
pre- requisite of sound organization and management.
Initiative - Managers must promote initiative by allowing employees to create plans and carry
them out.

Esprit de Corps -Love, unity, harmony and team spirit should reign in the organization.

Remember, the objective of Fayol's principles was to guide managers to efficiently organize and
interact with employees.

(c) Bureaucratic Management.

. Bureaucratic management focuses on the ideal form of organization. Max Weber was the major
contributor to bureaucratic management. Based on observation, Weber concluded that many
early organizations were inefficiently managed, with decisions based on personal relationships
and loyalty. He proposed that a form of organization, called a bureaucracy, characterized by
division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of
employees based on ability, would lead to more efficient management. Weber also contended
that managers' authority in an organization should be based not on tradition or personality but on
the position held by managers in the organizational hierarchy.

Neo-classical Theory or Behavioral Approach.

The Behavioural approach came up because production efficiency was not achieved by the
classical as employees were not willing to follow predicted or expected norms of behaviour. The
behaviourial management theory regards members of organizations as full human beings not as
tools.

Human Relation Movement.

A movement in management thinking and practice that encourages satisfaction of

employee’s basic needs as the key to increase employee satisfaction as well as productivity. This
approach also states that, if the manager has good interpersonal relationship with subordinates or
employees , they will be well treated, thus they will be more productive Two of the best-known
contributors to this human relation movement were Abraham Masslow and Douglas Macgregor,

3.) The Contingency Approach.

A contingency approach is sometimes called the situational approach. According to this

approach, since situations differ, solution also differ. This implies that the solution that can work
in a particular situation may not work in another situation. This approach was developed by
managers, consultants and researchers who tried to apply the concepts of the major schools of
thoughts. They discovered that no school of thought is the best. That is .an idea of a school that
can be used to solved a particular problem may not work in solving another problem.

Schmidt and co. pointed out that no leadership style is best. According to them, if a leader is
autocratic, democratic or laissez- faire, it does not mean he/she is a good leader. They assumed
that leaders are very flexible and can display any of this style if that style can help them to solve
the problem in which they find themselves. Mary parker introduced the law of situation which
state that managers should act with specific requirements in a given situation. This is because
since situation differ, situation also differs.