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• Evolution of Management Thought

Evolution of Management Thought - Introduction

There is a long history behind the evolution of management thought. Management is considered as the significant feature of economic life of mankind throughout ages. Management thought is regarded as an evolutionary concept. It has developed along with it and in line with social, cultural, economic and scientific institutions. Management thought has its origin in ancient times. It is developed along with other socio economic development. The contributors to management theory include management philosophers, management practitioners, and scholars. Modern management is based on the strong foundation laid down by the management thinkers from the past events.

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What Does Management Thought Means?

Management thought refers to the theory that guides management of people in the organization. Initially management theories were developed out of the practical experience of the managers in the industrial organization. Later on, managers borrowed ideas from several other fields of study like science, sociology, anthropology, etc.

The Concept of Evolution of Management Thought 

To understand the entire concept of evolution of the management thought, the topic is divided into 4 major stages, which are as follows:

Pre-scientific management period

Classical theory

Neo-classical theory ( or behavior approach)

Bureaucratic Model of Max Weber 

Pre-Scientific Management Period

As the industrial revolution occurred in the 18th century, there was a huge impact on management. The scenario changed the method of raising capitals, organizing labor, and goods’ production for the individuals and businesses. Entrepreneurs then had access to production factors like land, labor, and capital. The final step was only to make some effort to combine these factors to achieve the target successfully.

But, after the industrial revolution, the newer dimension taken by management is because of the involvement of certain notable personalities who introduced some effective ideas and approaches for giving management an acceptable and precise direction. Here is a brief on some of the personalities and their theories:

Professor Charles Babbage of United Kingdom (1729 to 1871)

Prof. Babbage was a renowned Mathematics professor at Cambridge University. He discovered that manufacturers rely on guessing and suggesting and advised them for utilizing science and mathematics to be more productive and accurate.

Robert Owens of United Kingdom (1771 to 1858)

Sir Robert is often regarded as personnel management’s father as his approach focuses on employee welfare. He also introduced cooperation and trade unions. He mainly believed that employee welfare might determine the performance to a larger extent. Sir Robert also encouraged the workers’ training, children’s education, ensuring canteens in the workplaces, shorter working durations, and others. 

The Classical Theory

Robert Owens, Charles Babbage, and other prominent personalities are regarded as management’s pioneers. However, their contribution to the evolution of management is lower. Further, by the last decade of the 19th century, the science of management began, and with it, some professionals like H. L. Grant, F. W. Taylor, Emerson, and others entered for the establishment of scientific management.

Further, during the classical period, management thought focused on standardization, job content, labor division, and scientific approaches for the organization. It also related closely to the industrial revolution and the rise of large-scale enterprises. 

The Neo-Classical Theory

This duration of the evolution of management thought is a better version of classical theory. It is a modified version of classical theory with several improvements. The classical theory focused mainly on the areas of job including physical resources and their management, but Neoclassical theory focuses on employee relationships in the work ecosystem. 

The Bureaucratic Model

Max Weber, a German sociologist, proposed the bureaucratic model. This includes a system of labour division, rules, authority hierarchy, and employees’ placement based on their technical capabilities. 

Evolution of Management Theories

Organizations were shaped effectively and the writings of some prominent writers consisted of the management and governance of various kingdoms. These descriptions formed the literature that helped develop the management theories. Several heads of religions, political affairs, and military also gave the management models. For example, the books like Sun Tzu’s “The Art of War” and Chanakya’s Arthashastra used some managerial purposes and the governance of the kingdom concerning the policy formulations respectively. 

The Evolution of Management Science

Management evolution started with civilization, and the evolution of management science is the entire concept involving several theories behind it. Whatever we presently have gets refined and improved as management thoughts and theories. This helps people in improving the knowledge of the process and utilizes the management principles for enhancing the overall organization.

FAQs on Evolution of Management Thought

1. Explain the role of Henry Fayol in the management theories.

Henry Fayol is considered as the father of modern management. He wrote the theory based on his experience as a manager. His principles tune with contemporary thinking in the theory. He stated that all the activities of any industrial enterprise can be grouped into six categories, which are as follows:

Technical (Production)

Commercial (Exchange, Buying, and Selling)

Financial activities (search for and optimum use of capital)

Security activities (protection of property and persons)

Accounting activities (stock taking, balance sheet, cost, and statistics)

Managerial activities (planning, organising, command, coordination and control).

Henry Fayol also suggested 14 principles of management. These principles are:- 

Division of work, 

Authority and responsibility, 

Discipline, 

Unity of command, 

Unity of direction, 

Subordination of personal interest to organizational interests, 

Remuneration, 

Centralization, 

Scalar chain, 

Stability of tenure

Span of cooperation

2. What is the contribution of F.W.Taylor to Management thought?

F.W. Taylor (1856-1915) is the founder of classical thought/classical theory of management. He suggested a scientific approach to management also called scientific management theory. F. W. Taylor is renowned as the father of scientific management. He suggested the principles of scientific management. His concept of scientific management evolved into a movement and influenced industrial management for several decades after him. His concepts and principles were rectified and publicized  by his several followers. Some of his renowned followers  include Henry Gantt, The Gilbreths and Emerson.

3. What are the tools of scientific management?

The tools involved in scientific management are as follows:

Separation of Doing and Planning – Planning aspects must be separate from the actual working action. Supervisor must focus on planning and workers on the operation of a task.

Functional Foremanship – The earlier mentioned separation resulted into development of a supervision system that could adequately do planning and supervision together.

Job Analysis – This is there to find out the best way of completing the tasks.

Standardization – It must be maintained with tools and instruments, work period, working conditions, production cost, etc.

Scientific Selection and Workers’ Training – Workers must be selected on a scientific basis considering their background.

Financial Incentives – This can motivate the workers to put in maximum efforts.

The Evolution of Management Thought and the Evolution of Management Theories

Knowing the story behind the evolution of management thought and the evolution of theories is essential. If you are familiar with them, including the development that brought about the current practices in business, then you will have a better understanding of management principles that can help you to manage people more effectively.

The point is that a lot has changed about management . Emphasis on structure and authority is no longer as strong as it used to be in the past. Now the focus is on employees. However, there are theories on the factors that motivate employees, but understand that knowing how these theories came about can give you the needed knowledge to manage your employees appropriately. Read to understand the evolution of management thought and management theories.

Evolution of Management Concept

The evolution of management thought is a process that started in the early days of man. It began since the period man saw the need to live in groups. Mighty men were able to organize the masses, share them into various groups. The sharing was done accord to the masses’ strength, mental capacities, and intelligence.

The point is that management has been practiced in one way or the other since civilization began. If you want a good example where advanced management principles were applied, consider the organization of the olden days Roman Catholic Church, military forces as well as ancient Greece. These are all excellent examples. But the industrial revolution brought drastic change. And suddenly, the need to develop a more holistic and formal management theory became a necessity.

Explain the Evolution of Management Thought

Stages of the evolution of management thought

This topic is broad, and it also requires careful explanation and thought process. One cannot understand what it entails or appreciates how it happened without looking at the various areas where the said evolution occurred. For better understanding, the evolution of management thought will be shared into four different stages. These include:

• Pre-scientific management period
• Classical theory
• Neo-classical theory or behavior approach
• Bureaucratic Model of Max Weber

The Pre-Scientific Management Period

The industrial revolution that took place in the 18th century had a significant impact on management as a whole . It changed how businesses, as well as individuals, raised capital; organize labor and the production of goods. Entrepreneurs had access to all the factors of production such as land, labor, and capital. Theirs was to make an effort to combine these factors to achieve a targeted goal successfully.

However, the new dimension that management took following the industrial revolution cannot be discussed without mentioning notable personalities who contributed their quarter. They were able to introduce useful ideas and approaches to give management a precise and universally acceptable direction. Here are some of them.

• Professor Charles Babbage – United Kingdom (1729 – 1871)

Prof Babbage, a renowned professor in mathematics at Cambridge University discovered that manufacturers were relying on guesswork and suggestions and urged them to utilize mathematics and science to be more accurate and productive.

• Robert Owens – United Kingdom (1771 – 1858)

Robert was regarded as the father of personnel management because of his approach and focus on employee welfare. He introduced co-operation and trade unions. Robert believed that employee welfare could determine their performance to a large extent. He encouraged the training of workers, education for their children, canteens in the workplace, shorter working hours, among others.

Other Contributors to the Pre-Scientific Management Period Include:

• Henry Robson Towne – USA
• James Watt Junior – United Kingdom
• Seebohm Rowntree – United Kingdom

The Classical Theory

Prof Babbage, Robert Owens, and other names earlier mentioned can be regarded as the pioneers of management. But their contribution to the evolution of management is little. The beginning of what is known as the science of management started in the last decade of the 19th century. Names like Emerson, F.W. Taylor, H.L. Grant, and others, paved the way for the establishment of what is called scientific management.

During the classical period, management thought was focused on job content, standardization, the division of labor, and a scientific approach towards the organization. It also was closely related to the industrial revolution as well as the rise of large-scale enterprises.

The Neo-Classical Theory

This period of evolution of management thought is an improvement of the classical theory. In other words, it modified and improved upon the classical theory. For instance, Classical theory focused more on the area of job content, including the management of physical resources, while neo-classical theory gave more profound emphasis on employee relationships in the work environment.

The Bureaucratic Model

A German Sociologist called Max Weber proposed this model. And it includes a system of rules, division of labor hinged on functional specialization, legal authority, and power, the hierarchy of authority, and placement of employees based on their technical competence.

The Evolution of Management Theories

Organizations have been shaped and through the writings of several writers. Their write-up consisted of governance of kingdoms and management of humans. And these formed the literature that helped in the development of management theories . And these management models were also offered by the military, political and religious organizations.

For instance, Sun Tzu’s book “The Art of War” was written in the 16th century BC. Sun was also a Chinese army general. However, the writings in Sun’s book were also used for managerial purposes.

The book highlights that it’s possible to achieve success by using the strength of the organization to exploit the weakness of rivals. Another great book was Chanakya’s Arthashastra. It was written in the third century BC and focused on the governance of the kingdom concerning the formulation of policies of governance and management of people.

The evolution of management started from civilization. So, what we have now is refined and improved management thoughts and theories. But knowing how this evolution came about is vital. It will help to improve one’s knowledge of the process and effectively utilize management principles for the betterment of the organization.

About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.

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The Evolution Of Management

Peter Ferdinand Drucker, one of the leading management gurus, said it best—“Management is doing things right; leadership is doing the…

Peter Ferdinand Drucker, one of the leading management gurus, said it best—“Management is doing things right; leadership is doing the right things”.

In any organization, teamwork and leadership act as catalysts for business success. The way someone manages their team or the entire workforce has a direct impact on the organization’s growth and profitability. The evolution of management can be studied in the way different theories emerged at different points in time.

Over time, different management theories emerged, evolved and continue to be practiced in several business environments. Read on to explore various types of management theories and how they contributed to the evolution of management principles.

An Introduction To Evolution Of Management

Tracing the evolution of management through theories.

Understanding the evolution of management thought is important as it helps determine what management principles and practices work best for your team and your organization. It can help you manage your team and workplace more effectively. So, what is the meaning of evolution of management thought? To understand this, we need to go back in time.

The Industrial Revolution in the early 19th century brought monumental changes in the workplace. As factories were the primary source of employment, management theorists studied the operations and workforce present on the factory floors. There were times when the demand was high but the lack of productivity and efficiency held workplaces back. The Industrial Revolution gave birth to multiple management theories and concepts that developed over time and are still relevant today.

Management theories help you study an organization, its corporate designs, structures and behavior of individuals or groups. By studying the impact of internal and external business environments, these theories provide a lens to address critical questions about how a business works or operates. Management theories can be grouped under three categories—classical theory, neoclassical theory and modern management theory. ( aessoil.com ) Let’s take a look at the individual theories in detail:

Classical Theory Of Management

The theories that emerged under the classical evolution of management thought are:

Scientific Management

Fredrick Winslow Taylor, an engineer, proposed and developed the Scientific Management Theory. He is also known as the Father of Scientific Management and his school of thought came to be known as Taylorism. He introduced a scientific approach to productivity, which meant that an increase in efficiency can lead to higher productivity and profits. He believed that research-backed and standardized procedures were necessary for effective management.

Administrative Management

Henry Fayol, a French mining engineer, laid down five functions and 14 principles of management under the theory of Fayolism. This gave way to the school of administrative management. He believed that these functions and principles can guide managers to fulfill their responsibilities effectively and they should have the liberty to determine how to use them.

Neoclassical Theory Of Management

The theories that emerged under the neoclassical evolution of management practices are:

Human Relations Management

Developed by Elton Mayo, an Australian psychologist, the Human Relations Theory of Management was proposed after a series of experiments, also known as Hawthorne Studies or Hawthorne Experiments. This theory emerged as a response to the criticism faced by the classical management theories, where social factors such as human behavior and attitudes weren’t considered important.

Behavioral Management

Behavioral approaches to management set the pace for how modern workplaces build an employee-friendly culture. Abraham Maslow, an American psychologist, proposed the hierarchy of need, where employee need and expectations were prioritized. The theory suggests that human relations and behavior are essential in driving efficiency in teams and managing the workforce successfully.

Modern Theory Of Management

The theories that emerged with the modern evolution of management needs are:

Systems Approach

The Systems Theory of organization has its roots in biology and systems science. This concept broke away from classical management theory that viewed organizations as machines and moved toward a more holistic view that sees them as networks of people, procedures and activities. Systems Theory allows for an understanding of the connections between various parts of the organization and how they interact with one another.

Contingency Approach

The Contingency Management Theory suggests that there isn’t any perfect way to organize a business or corporation. The optimal solution lies in the situation that an organization operates in. A business is contingent (depends) upon internal or external environments.

It’s evident that in the long history of the evolution of management, the focus has shifted from the structure and authority to the people behind the scenes. Many of these principles hold relevance in modern workplaces even if society continues to evolve. Practicing the principles of various management theories will not only bring success to your organization but also improve your relationship with your team. Harappa’s Managing Teamwork course is designed to equip you with tools to imbibe team culture and collaborate with diverse people. Meet organizational goals with greater efficiency by learning how to trust your team and progress with them. Try Harappa and see the change for yourself!

Explore Harappa Diaries to learn more about topics such as  14 Principles Of Management ,  Advantages Of MBO ,  Importance Of Strategic Management  and  Management Skills  to become a well-rounded professional.

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2 The History of Management

Learning Objectives

The purpose of this chapter is to:

• 1) Give you an overview of the evolution of management thought and theory.
• 2) Provide an understanding of management in the context of the modern-day world in which we reside.

The History of Management

The concept of management has been around for thousands of years. According to Pindur, Rogers, and Kim (1995), elemental approaches to management go back at least 3000 years before the birth of Christ, a time in which records of business dealings were first recorded by Middle Eastern priests. Socrates, around 400 BC, stated that management was a competency distinctly separate from possessing technical skills and knowledge (Higgins, 1991). The Romans, famous for their legions of warriors led by Centurions, provided accountability through the hierarchy of authority. The Roman Catholic Church was organized along the lines of specific territories, a chain of command, and job descriptions. During the Middle Ages, a 1,000 year period roughly from 476 AD through 1450 AD, guilds, a collection of artisans and merchants provided goods, made by hand, ranging from bread to armor and swords for the Crusades. A hierarchy of control and power, similar to that of the Catholic Church, existed in which authority rested with the masters and trickled down to the journeymen and apprentices. These craftsmen were, in essence, small businesses producing products with varying degrees of quality, low rates of productivity, and little need for managerial control beyond that of the owner or master artisan.

The Industrial Revolution, a time from the late 1700s through the 1800s, was a period of great upheaval and massive change in the way people lived and worked. Before this time, most people made their living farming or working and resided in rural communities. With the invention of the steam engine, numerous innovations occurred, including the automated movement of coal from underground mines, powering factories that now mass-produced goods previously made by hand, and railroad locomotives that could move products and materials across nations in a timely and efficient manner. Factories needed workers who, in turn, required direction and organization. As these facilities became more substantial and productive, the need for managing and coordination became an essential factor. Think of Henry Ford, the man who developed a moving assembly line to produce his automobiles. In the early 1900s, cars were put together by craftsmen who would modify components to fit their product. With the advent of standardized parts in 1908, followed by Ford’s revolutionary assembly line introduced in 1913, the time required to build a Model T fell from days to just a few hours (Klaess, 2020). From a managerial standpoint, skilled craftsmen were no longer necessary to build automobiles. The use of lower-cost labor and the increased production yielded by moving production lines called for the need to guide and manage these massive operations (Wilson, 2015). To take advantage of new technologies, a different approach to organizational structure and management was required.

The Scientific Era – Measuring Human Capital

With the emergence of new technologies came demands for increased productivity and efficiency. The desire to understand how to best conduct business centered on the idea of work processes. That is, managers wanted to study how the work was performed and the impact on productivity. The idea was to optimize the way the work was done. One of the chief architects of measuring human output was Frederick Taylor. Taylor felt that increasing efficiency and reducing costs were the primary objectives of management. Taylor’s theories centered on a formula that calculated the number of units produced in a specific time frame (DiFranceso and Berman, 2000). Taylor conducted time studies to determine how many units could be produced by a worker in so many minutes. He used a stopwatch, weight measurement scale, and tape measure to compute how far materials moved and how many steps workers undertook in the completion of their tasks (Wren and Bedeian, 2009). Examine the image below – one can imagine Frederick Taylor standing nearby, measuring just how many steps were required by each worker to hoist a sheet of metal from the pile, walk it to the machine, perform the task, and repeat, countless times a day.   Beyond Taylor, other management theorists including Frank and Lilian Gilbreth, Harrington Emerson, and others expanded the concept of management reasoning with the goal of efficiency and consistency, all in the name of optimizing output . It made little difference whether the organization manufactured automobiles, mined coal, or made steel, the most efficient use of labor to maximize productivity was the goal.

The necessity to manage not just worker output but to link the entire organization toward a common objective began to emerge. Management, out of necessity, had to organize multiple complex processes for increasingly large industries. Henri Fayol, a Frenchman, is credited with developing the management concepts of planning, organizing, coordination, command, and control (Fayol, 1949), which were the precursors of today’s four basic management principles of planning, organizing, leading, and controlling.

Employees and the Organization

With the increased demand for production brought about by scientific measurement, conflict between labor and management was inevitable. The personnel department, forerunner of today’s human resources department, emerged as a method to slow down the demand for unions, initiate training programs to reduce employee turnover, and to acknowledge workers’ needs beyond the factory floor. The idea that to increase productivity, management should factor the needs of their employees by developing work that was interesting and rewarding burst on the scene (Nixon, 2003) and began to be part of management thinking. Numerous management theorists were starting to consider the human factor. Two giants credited with moving management thought in the direction of understanding worker needs were Douglas McGregor and Frederick Herzberg. McGregor’s Theory X factor was management’s assumption that workers disliked work, were lazy, lacked self-motivation, and therefore had to be persuaded by threats, punishment, or intimidation to exert the appropriate effort. His Theory Y factor was the opposite. McGregor felt that it was management’s job to develop work that gave the employees a feeling of self-actualization and worth. He argued that with more enlightened management practices, including providing clear goals to the employees and giving them the freedom to achieve those goals, the organization’s objectives and those of the employees could simultaneously be achieved (Koplelman, Prottas, & Davis, 2008).

Frederick Herzberg added considerably to management thinking on employee behavior with his theory of worker motivation. Herzberg contended that most management driven motivational efforts, including increased wages, better benefits, and more vacation time, ultimately failed because while they may reduce certain factors of job dissatisfaction (the things workers disliked about their jobs), they did not increase job satisfaction. Herzberg felt that these were two distinctly different management problems. Job satisfaction flowed from a sense of achievement, the work itself, a feeling of accomplishment, a chance for growth, and additional responsibility (Herzberg, 1968). One enduring outcome of Herzberg’s work was the idea that management could have a positive influence on employee job satisfaction, which, in turn, helped to achieve the organization’s goals and objectives.

The concept behind McGregor, Herzberg, and a host of other management theorists was to achieve managerial effectiveness by utilizing people more effectively. Previous management theories regarding employee motivation (thought to be directly correlated to increased productivity) emphasized control, specialized jobs, and gave little thought to employees’ intrinsic needs. Insights that considered the human factor by utilizing theories from psychology now became part of management thinking. Organizational changes suggested by management thinkers who saw a direct connection between improved work design, self-actualization, and challenging work began to take hold in more enlightened management theory.

The Modern Era

Koontz and O’Donnell (1955) defined management as “the function of getting things done through others (p. 3). One commanding figure stood above all others and is considered the father of modern management (Edersheim, (2007). That individual was Peter Drucker. Drucker, an author, educator, and management consultant is widely credited with developing the concept of Managing By Objective or MBO (Wren & Bedeian, 2009). Management by Objective is the process of defining specific objectives necessary to achieve the organization’s goals. The beauty of the MBO concept was that it provided employees a clear view of their organization’s objectives and defined their individual responsibilities. For example, let’s examine a company’s sales department. One of the firm’s organizational goals might be to grow sales (sometimes referred to as revenue) by 5% the next fiscal year. The first step, in consultation with the appropriate people in the sales department, would be to determine if that 5% goal is realistic and attainable. If so, the 5% sales growth objective is shared with the entire sales department and individuals are assigned specific targets. Let’s assume this is a regional firm that has seven sales representatives. Each sales rep is charged with a specific goal that, when combined with their colleagues, rolls up to the 5% sales increase. The role of management is now to support, monitor, and evaluate performance. Should a problem arise, it is management’s responsibility to take corrective action. If the 5% sales objective is met or exceeded, rewards can be shared. This MBO cycle applies to every department within an organization, large or small, and never-ending.

The MBO Process

Drucker’s contributions to modern management thinking went far beyond the MBO concept. Throughout his long life, Drucker argued that the singular role of business was to create a customer and that marketing and innovation were its two essential functions. Consider the Apple iPhone. From that single innovation came thousands of jobs in manufacturing plants, iPhone sales in stores around the globe, and profits returned to Apple, enabling them to continue the innovation process. Another lasting Drucker observation was that too many businesses failed to ask the question “what business are we in?” (Drucker, 2008, p. 103). On more than one occasion, a company has faltered, even gone out of business, after failing to recognize that their industry was changing or trying to expand into new markets beyond their core competency. Consider the fate of Blockbuster, Kodak, Blackberry, or Yahoo.

Management theories continued to evolve with additional concepts being put forth by other innovative thinkers. Henry Mintzberg is remembered for blowing holes in the idea that managers were iconic individuals lounging in their offices, sitting back and contemplating big-picture ideas. Mintzberg observed that management was hard work. Managers were on the move attending meetings, managing crises, and interacting with internal and external contacts. Further, depending on the exact nature of their role, managers fulfilled multiple duties including that of spokesperson, leader, resource allocator, and negotiator (Mintzberg, 1973). In the 1970s, Tom Peters and Robert Waterman traveled the globe exploring the current best management practices of the time. Their book, In Search of Excellence, spelled out what worked in terms of managing organizations. Perhaps the most relevant finding was their assertion that culture counts. They found that the best managed companies had a culture that promoted transparency, openly shared information, and effectively managed communication up and down the organizational hierarchy (Allison, 2014). The well managed companies Peterson and Waterman found were built in large part on the earlier managerial ideas of McGregor and Herzberg. Top-notch organizations succeeded by providing meaningful work and positive affirmation of their employees’ worth.

Others made lasting contributions to modern management thinking. Steven Covey’s The Seven Habits of Highly Successful People , Peter Senge’s The Fifth Discipline , and Jim Collins and Jerry Porras’s Built to Last are among a pantheon of bestselling books on management principles. Among the iconic thinkers of this era was Michael Porter. Porter, a professor at the Harvard Business School, is widely credited with taking the concept of strategic reasoning to another level. Porter tackled the question of how organizations could effectively compete and achieve a long-term competitive advantage. He contended that there were just three ways a firm could gain such advantage: 1) a cost-based leadership – become the lowest cost producer, 2) valued-added leadership – offer a differentiated product or service for which a customer is willing to pay a premium price, and 3) focus – compete in a niche market with laser-like fixation (Dess & Davis, 1984). Name a company that fits these profiles: How about Walmart for low-cost leadership. For value-added leadership, many think of Apple. Focus leadership is a bit more challenging. What about Whole Foods before being acquired by Amazon? Porter’s thinking on competition and competitive advantage has become timeless principles of strategic management still used today. Perhaps Porter’s most significant contribution to modern management thinking is the connection between a firm’s choice of strategy and its financial performance. Should an organization fail to select and properly execute one of the three basic strategies, it faces the grave danger of being stuck in the middle – its prices are too high to compete based on price or its products lack features unique enough to entice customers to pay a premium price. Consider the fate of Sears and Roebuck, J.C. Penny, K-Mart, and Radio Shack, organizations that failed to navigate the evolving nature of their businesses.

The 21st Century

Managers in the 21st century must confront challenges their counterparts of even a few years ago could hardly imagine. The ever-growing wave of technology, the impact of artificial intelligence, the evolving nature of globalization, and the push-pull tug of war between the firm’s stakeholder and shareholder interests are chief among the demands today’s managers will face.

          Much has been written about the exponential growth of technology. It has been reported that today’s iPhone has more than 100,000 times the computing power of the computer that helped land a man on the moon (Kendall, 2019). Management today has to grapple with the explosion of data now available to facilitate business decisions. Data analytics, the examination of data sets, provides information to help managers better understand customer behavior, customer wants and needs, personalize the delivery of marketing messages, and track visits to online web sites. Developing an understanding of how to use data analytics without getting bogged down will be a significant challenge for the 21st century manager. Collecting, organizing, utilizing data in a logical, timely, and cost-effective manner is creating an entirely new paradigm of managerial competence.  In addition to data analytics, cybersecurity, drones, and virtual reality are new, exciting technologies and offer unprecedented change to the way business is conducted. Each of these opportunities requires a new degree of managerial competence which, in turn, creates opportunities for the modern-day manager.

Artificial Intelligence

Will robots replace workers? To be sure, this has already happened to some degree in many industries. However, while some jobs will be lost to AI, a host of others will emerge, requiring a new level of management expertise. AI has the ability to eliminate mundane tasks and free managers to focus on the crux of their job. Human skills such as empathy, teaching and coaching employees, focusing on people development and freeing time for creative thinking will become increasingly important as AI continues to develop as a critically important tool for today’s manager.

Globalization

Globalization has been defined as the interdependence of the world’s economies and has been on a steady march forward since the end of World War II. As markets mature, more countries are moving from the emerging ranks and fostering a growing middle class of consumers. This rising new class has the purchasing power to acquire goods and services previously unattainable, and companies around the globe have expanded outside their national borders to meet those demands. Managing in the era of globalization brought a new set of challenges. Adapting to new cultures, navigating the puzzle of different laws, tariffs, import/export regulations, human resource issues, logistics, marketing messages, supply chain management, currency, foreign investment, and government intervention are among the demands facing the 21st century global manager. Despite these enormous challenges, trade among the world’s nations has grown at an unprecedented rate. World trade jumped from around 20% of world GDP in 1960 to almost 60% in 2017.

Trade as a Percent of Global GDP

Despite its stupendous growth, globalization has its share of critics. Chief among them is that globalization has heightened the disparity between the haves and the have-nots in society. Opponents of globalization argue that in many cases, jobs have been lost to developing nations with lower prevailing wage rates. Additionally, inequality has worsened with the wealthiest consuming a disproportionate percent of the world’s resources (Collins, 2015). Proponents counter that on the macro level, globalization creates more jobs than are lost, more people are lifted out of poverty, and expansion globally enables companies to become more competitive on the world stage.

Since the election of Donald Trump as President of the United States in 2016 and Great Britain’s decision to exit the European Union, the concept of nationalism has manifested in many nations around the globe. Traditional obstacles to expanding outside one’s home country plus a host of new difficulties such as unplanned trade barriers, blocked acquisitions, and heightened scrutiny from regulators have added to the burdens of managing in the 21st century. The stage has been set for a new generation of managers with the skills to deal with this new, complex business environment. In the 20th century, the old command and control model of management may have worked. However, today, with technology, artificial intelligence, globalization, nationalism, and multiple other hurdles, organizations will continue the move toward a flatter, more agile organizational structure run by managers with the appropriate 21st century skills.

Stakeholder versus Shareholder

What is a stakeholder in a business, and what is a shareholder? The difference is important. Banton (2020) noted that shareholders, by owning even a single share of stock, has a stake in the company. The shareholder first view was put forth by the economist Milton Friedman (1962) who stated that “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it engages in open and free competition, without deception or fraud” (p. 133). In other words, maximize profits so long as the pursuit of profit is done so legally and ethically. An alternate view is that a stakeholder has a clear interest in how the company performs, and this interest may stem from reasons other than the increase in the value of their share(s) of stock. Edward Freeman (1999), a philosopher and academic advanced his stakeholder theory contending that the idea was the success of an organization relied on its ability to manage a complex web of relationships with several different stakeholders. These stakeholders could be an employee, a customer, an investor, a supplier, the community in which the firm operates, and the government that collects taxes and stipulates the rules and regulations by which the company must operate. Which theory is correct? According to Emiliani (2001), businesses in the United States typically followed the shareholder model, while in other countries, firms tend to follow the stakeholder model. Events in the past decade have created a shift toward the shareholder model in the United States. The financial crisis of 2008/2009, global warming, the debate between globalization and nationalism, the push for green energy, a spate of natural disasters, and the world-wide impact of health crises such as AIDS, Ebola, the SARS virus and the Coronavirus have fostered a move toward a redefinition of the purpose of a corporation. In the coming decades, those companies that thrive and grow will be the ones that invest in their people, society, and the communities in which they operate. The managers of the 21st century must build on the work of those that proceeded them. Managers in the 21st century would do well if they heeded the words famously used by Isaac Newton who said “If I have seen a little further, it is because I stand on the shoulders of giants” (Harel, 2012).

Critical Thinking Questions

In what way has the role of manager changed in the past twenty years?

With the historical perspective of management in mind, reflect on changes you foresee in the manager’s role in the next 20 years?

Reflect on some of the significant issues you have witnessed in the past few years.  Among thoughts to consider are global warming, green energy, global health crisis, globalization, nationalism, national debt, or an issue of your choosing.  What role do you see business and management playing in effectively dealing with that specific issue?

How to Answer the Critical Thinking Questions

For each of these answers you should provide three elements.

• General Answer.  Give a general response to what the question is asking, or make your argument to what the question is asking.
• Outside Resource.  Provide a quotation from a source outside of this textbook.  This can be an academic article, news story, or popular press.  This should be something that supports your argument.  Use the sandwich technique explained below and cite your source in APA in text and then a list of full text citations at the end of the homework assignment of all three sources used.
• Personal Story.  Provide a personal story that illustrates the point as well.  This should be a personal experience you had, and not a hypothetical.  Talk about a time from your personal, professional, family, or school life.   Use the sandwich technique for this as well, which is explained below.

Use the sandwich technique:

For the outside resource and the personal story you should use the sandwich technique.  Good writing is not just about how to include these materials, but about how to make them flow into what you are saying and really support your argument.  The sandwich technique allows us to do that.  It goes like this:

Step 1:  Provide a sentence that sets up your outside resource by answering who, what, when, or where this source is referring to.

Step 2:  Provide the quoted material or story.

Step 3:  Tell the reader why this is relevant to the argument you are making.

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Banton, C. (2020). Shareholder vs. stakeholder: An overview. Investopedia. Retrieved from https://www.investopedia.com/ask/answers/08/difference-between-a-shareholder-and-a-stakeholder.asp

Collins, M. (2015). The pros and cons of globalization. Forbes. Retrieved from https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#609d7a53ccce

Dess, G.G., & Davis, P.S. (1984). Generic strategies as determinants of strategic group membership and organizational performance. The Academy of Management , (27)3, 467-488.

Difrancesco, J.M. & Berman, S.J. (2000). Human productivity: The new American frontier. National Productivity Review. Summer 2000. 29-36.

Drucker, P. F. (2008 ) Management – Revised Edition . New York: Collins Business.

Edersheim, E. (2007). The Definitive Drucker. New York: McGraw-Hill.

Emiliani, M.L. (2001). A mathematical logic approach to the shareholder vs stakeholder debate. Management Decision . (39)8, 618-622.

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Freeman, E.R. 91999). Divergent stakeholder theory. The Academy of Management Review , (24)2, pp. 213-236.

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Harel, D. (2012). Standing on the shoulders of a giant. ICALP (International Colloquium on Automation). 16-22. Retrieved from http://www.wisdom.weizmann.ac.il/~/dharel/papers/Standing%20on%20Shoulders.pdf

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Kopelman, R.E., Prottas, D.J., & Davis, A.l. (2008). Douglas McGregor’s Theory X and Y: Toward a construct-valid measure. Journal of Managerial Issues , (XX02, 255-271.

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The Four Functions of Management Copyright © 2020 by Dr. Robert Lloyd and Dr. Wayne Aho is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License , except where otherwise noted.

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3 Evolution of Management Thought

Dr.Shafali Nagpal

2.1  Learning Objective

2.2  Introduction

2.3 Early Management Thoughts

2.4 Classical Approach

2.5 Modern Management Approach

2.6 Quantitative Approach

2.7 System Approach

2.8 Summary

Learning Objective

After completing this module, you will be able to:

1.      To understand the evolution of management thoughts

2.      To know the impact of management thoughts

3.      To analyze the prevailing procedure of management thoughts in industries

Introduction

Management is studied in business academics since earlier times, and it is considered as an integral part to understanding business operations. People have been changing and redesigning organizations for centuries. Though the 20th century is noticeable in history as an ‘Era of scientific management’, still it does not indicate that management tactics were not used in yester years. Many studies indicated that Management theory evolved with “scientific” and “bureaucratic” management that used measurement, procedures and routines as the basis for operations. Firms developed hierarchies to apply standardized rules to the place of work and penalized labour for violating rules. With the “human relations” movement, companies emphasized individual workers. Modern management theories, including system theory,  contingency theory and chaos theory, focus on the whole organization, with employees as a key part of the system.

The evaluation of management can be categorized into different parts:

• Pre-Scientific Management Era (before 1880),
• Classical management Era (1880-1930),
• Neo-classical Management Era (1930-1950),
• Modern Management era (1950-on word).

Classical Management includes Scientific Management School, Administration Management School, and Bureaucracy Management. Neoclassical Management includes Human relation school and Behavioural Management School. Modern Management includes Social system school, Decision theory school, Quantitative Management School, System Management School, and Contingency Management School.

EVOLUTION OF MANAGEMENT THOUGHTS

Early Management Thought

The period of 1700 to 1800 emphasizes the industrial revolution and the factory system highlights the industrial revolution and the importance of direction as a managerial purpose. Thus, the development of management theory can be recognized as the way people have

struggled with relationships at particular times in olden periods. Many economic theorists during this period described the notion of management. Adam Smith and James Watt have been recognized as two theorists who launched the world toward industrialization. Adam Smith brought about the revolution in financial thought, and James Watt’s steam engine provided cheaper power that revolutionized English commerce and industry. Both provided the base for modern concepts of business management theory and practice. Adam Smith explicated the concept of division of labour, and Jacques Turgot described the importance of direction and control. Smith stated that market and competition should be the controllers of economic activity and that tax policies were destructive. The specialization of labour was the basis of Smith’s market system. According to Smith, a division of labour provided managers with the maximum opportunity for improved output. From 1771 to1858, Robert Owens studied for concern for the workers. He was repulsed by the working conditions and poor treatment of the workers in the factories across Scotland. Owen became a reformer. He reduced the use of child labour and used ethical influence rather than physical punishment in his factories. He reproached his fellow factory owners for treating their equipment better than they treated their workers.

In the quantitative approach of early management thought, Charles Babbage (1792–1871) is recognized as the supporter of operations research and management science. Babbage’s scientific innovations are a mechanical calculator, a versatile computer, and a punch-card machine. His projects never became a commercial reality. However, Babbage is considered the creator of the concepts behind the present day computer. The most popular book of Babbage, On the Economy of Machinery and Manufacturers, described the tools and machinery used in English factories. It discussed the economic principles of manufacturing and analysed the operations and the skills used and suggested improved practices. Babbage considered in the benefits of division of labour and was a supporter of profit sharing. He developed a method of observing manufacturing that is the same approach utilized today by operations analysts and consultants analysing manufacturing operations. Other theorists who contributed to the quantitative approach to early management thought were Robert Owen, Andrew Ure and Charles Dupin, Henry Robinson Towne.

The Classical Approach

The classical approach is the earliest thought of management.The classical approach was associated with the ways to manage work and organizations more efficiently. The classical approach is categorized into three groups namely, scientific management, administrative management, and bureaucratic management.

I. Scientific Management: Scientific management which is also referred to Taylorism or the Taylor system is a theory of management that evaluates and synthesizes workflows, with the aim of improving labour productivity. In other words, conventional rules of thumb are substituted by accurate procedures developed after careful study of an individual at work. Universal approaches to Scientific management are developed for Efficiency of workers, Standardization of job roles/activities and Discipline – the role of managers and the business hierarchy. The scientific management theory had an enormous impact on the business industry at the beginning of the 20th century. Many big and victorious organizations, such as McDonald’s hamburger chain or call centres, utilised a modern version of scientific management. Among famous theorist, Taylor’s contribution in the area of scientific management is invaluable. The components of scientific management are a determination of the task, planning, proper selection and training of workers improvement in methods, modification of organization and mental revolution such as ‘job specialization’. As a result, it became more concerned with physical things than towards the people even though increased the output. Scientific Management focuses on worker and machine relationships. Organizational productivity can be increased by enhancing the competence of production processes.

Taylor’s Scientific Management: Academic records indicated that F.W. Taylor and his colleagues developed the first systematic study in management. He initiated an innovative movement in 1910 which is identified as scientific management. Frederick Taylor is known as the father of Scientific Management, and he published Principals of Scientific Management in which he proposed work methods designed to boost worker productivity. Taylor asserted that to succeed in these principles, it is necessary to transform the part of management and labour  completely. His philosophy was based on some basic principles. The first principle is a separation of planning and doing. In the pre-Taylor era, an employee himself used to choose or plan how he had to do his work and what machines and equipment would be necessary to perform the work. But Taylor divided the two functions of planning and doing; he stressed that planning should be delegated to specialists. The second principle of Taylor’s management approach is functional foremanship. Taylor launched functional foremanship for administration and direction. Under eight-boss-scheme of functional foremanship, four persons like route clerk, instruction card clerk, time and cost clerk and disciplinarian are associated with planning function, and the remaining four-speed boss, inspector, maintenance foreman, and gang boss are concerned with operating function. The third principle is elements of scientific management. The main constituents of scientific management are work-study involving work important and work measurement using method and time study, standardization of tools and equipment for workers and improving working conditions, scientific Selection, placement and training of workers by a centralized personal department. The fourth principle is a bilateral mental revolution. Scientific management involves a complete mental change of employees towards their work, toward their fellow-men and their employers. Mental revolution is also necessary on the part of management’s side, the foreman, the superintendent, the owners and board of directions. The fifth principle is financial incentives. To encourage workers to give better performance, Taylor introduced the differential piece-rate system.

(ii)  Administrative Management: Administrative Management emphasizes the manager and the functions of management. The main objective of Administrative management is to describe the management process and philosophy of management. In contradiction of scientific management, which deals mainly with jobs and works at the individual level of scrutiny, administrative management gives a universal theory of management.

Henry Fayol’s Administrative Management (1841–1925): Henri fayol is known as the father of Modern Management. He was a popular industrialist and victorious manager. Fayol considered that good management practice falls into certain patterns that can be recognized and analysed. From this basic perspective, he devised a blueprint for a consistent policy of managers one that retains much of its force to this day. His five function of managers was the plan, organize, command, co-ordinate, and control. The principal of administrative management: 1.Division of labour, 2.Authority & responsibility, 3.Discipline, 4.Unity of command, 5.Unity of direction, 6.Subordination of individual interests to the general interest, 7.Remuneration of personnel, 8.Centralization, 9.Scalar chain, 10.Order, 11.Equity, 12.Stability of tenure, 13.Initiative and14 .Esprit de corps (union of strength). These 14 principles of management serve as general guidelines to the management process and management practice. His principles of management are described below.

1.  Division of work: This is the principle of specialization which is detailed by economists as an important to efficiency in the utilization of labour. Fayol goes beyond shop labour to apply the principle to all kinds of work, managerial as well as technical.

2. Authority and responsibility: In this principle, Fayol discovers authority and responsibility to be linked with the letter, the consequence of the former and arising from the latter.

3. Discipline: This discipline denotes “respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect”. Fayol declares that discipline requires good superiors at all levels, clear and fair agreement, and judicious application of penalties.

4.Unity of command: This is the principle that an employee should receive orders from one superior only.

5. Unity of direction: Fayol asserted that unity of direction is the principle that each group of activities having the same objective must have one head and one plan. As distinguished from the principle of unity of command, Fayol observes unity of direction as related to the functioning of personnel.

6. Subordination of individual interest to general interest: In any group, the interest of the group should supersede that of the individual. When these are found to differ, it is the function of management to reconcile them.

7. Remuneration of personnel: Fayol recognizes that salary and methods of payment should be fair and give the utmost satisfaction to worker and boss.

8. Centralization: Fayol principle of centralization refers to the extent to which authority is concentrated or dispersed in an enterprise. Individual circumstances will determine the degree of centralization that will give the best overall yield.

9. Scalar chair: Fayol believe of the scalar chair as a line of authority, a ‘Chain of Superiors” from the highest to the lowest ranks and held that, while it is an error of subordinate to depart ‘needlessly’ from lines of authority, the chain should be short-circuited when scrupulous following of it would be detrimental.

10.  Order: Breaking this principle into ‘Material order’ and ‘Social Order’, Fayol thinks of it as the simple edge of “a place for everything (everyone), and everything (everyone) in its (his) place”. This is a principle of organization in the arrangement of things and persons.

11.  Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from personnel by a combination of kindliness and justice in managers dealing with subordinates.

12.  Stability of tenure of personnel: Finding that such instability is both the cause and effect of bad management, Fayol indicated the dangers and costs of unnecessary turnover.

13.  Initiative: Initiative is envisaged as the thinking out and execution of a plan. Since it is one of the “Keenest satisfactions for an intelligent man to experience”, Fayol exhorts managers to “Sacrifice Personal Vanity” to permit subordinates to exercise it.

14.  Esprit de corps: This is the principle that ‘union is strength’ an extension of the principle of unity of command. Fayol here emphasizes the need for teamwork and the importance of communication in obtaining it.

(iii) Bureaucratic Management:

Bureaucratic management denotes to the perfect type of organization. The principal of Bureaucracy include defined and specialized functions, use of legal authority, hierarchical form, written rules and procedures, technically trained bureaucrats, appointment to positions based on technical expertise, promotions based on competence and defined career paths. The German sociologist, Max Weber recognized as the father of modern Sociology who appraised bureaucracy as the most logical and structure for the big organization. With this observation in the business world, Weber summarized that earlier business firms were unproductively managed, with decisions based on personal relationships and faithfulness. He proposed that a form of organization, called a bureaucracy, characterized by division of labour, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more well-organised management. Weber also argued that authoritative position of managers in an organization should be based not on tradition or personality but the position held by managers in the organizational hierarchy.

Max Weber (1864-1920) devised a theory of bureaucratic management that emphasized the need for a firmly defined hierarchy governed by clearly defined regulations and lines of authority. He considered the perfect organization to be a bureaucracy whose activities and objectives were reasonably thought out and whose divisions of labour were defined. Weber also believed that technical capability should be emphasized and that performance evaluations should be made completely by merit. Presently, it is considered that bureaucracies are huge, impersonal organizations that put impersonal competence ahead of human needs. Like the scientific management theorists, Weber sought to advance the performance of socially important organizations by making their operations predictable and productive. Although we now value innovation and flexibility as much as efficiency and predictability, Weber’s model of bureaucratic management evidently advanced the development of vast corporations such as Ford. The bureaucracy was a particular pattern of relationships for which Weber saw great promise. Although bureaucracy has been successful for many companies, in the competitive global market of the 1990s organizations such as General Electric and Xerox, have adopted bureaucracy, throwing away the organization chart and replacing it with ever-changing constellations of teams, projects, and alliances with the goal of unleashing employee creativeness.

Modern Management Approaches

Behavioural Approach: Numerous theorists developed the behavioural approach of management thought as they observed weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency, process, and principles. Some management scholars considered that this thought ignored important aspects of organizational life, particularly as it related to human behaviour. Therefore the behavioural approach concentrated on the understanding of the factors that affect human behaviour at work. This is an improved and more matured description of human relations approach. The various theorists who have great contribution in developing principles of management in this are Douglas Mc Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert. Behavioural Scientists hold the classical approach as highly mechanistic, which finds to degrade the human spirit. They choose more flexible organization structures and jobs built around the capabilities and talent of average employees. The behavioural approach has based the numerous principles.

• Decision-making is done in a sub-optimal manner, because of practical and situational constraints on the human rationality of decision-making. The behaviourists attach great weight age on participative and group decision-making.
• Behavioural Scientists promote self-direction and control instead of imposed control.
• Behavioural Scientists believe the organization as a group of individuals with certain goals.
• Behavioural scientists perceive that the democratic-participative styles of leadership are enviable, the autocratic, task-oriented styles may also be appropriate in the certain situation.
• Behavioural scientists propose that different people react differently to the same situation. No two people are exactly similar, and manager should tailor his attempts to influence his people according to their needs.
• Behavioural scientists identify that organizational variance and change are predictable.

The approach of Mary parker follett: Mary Parker Follett (1868-1933) developed the classic structure of the classical school. However, she initiated many new elements particularly in the area of human relations and organizational structure. In this, she introduced trends that would be further developed by the talented behavioural and management science schools. Follett was persuaded that no one could become a whole person except as a member of a group. Human beings grew through their relationships with others in organizations. In fact, she explained management as “the art of getting things done through people.” She took for granted Taylor’s statement that labour and management shared a common purpose as members of the same organization, but she considered that the artificial difference between managers and subordinates is vague in this natural partnership. She believed in the power of the group, where individuals could combine their diverse talents into something bigger. Moreover, Follett’s “holistic” model of control took into account not just individuals and groups, but the effects of such environmental factors as politics, economics, and biology. Follett’s model was a significant precursor of the idea that management meant more than just what was happening inside a particular organization.

Douglas McGregor theory of management suggested that there is need to motivate employees through authoritative direction and employee self-control and he introduced the concept of Theory X and Y. Theory X is a management theory focused more on classical management theory and assumed that workforce needs a high amount of supervision because they are inherently lazy. It presupposes that managers need to motivate through coercion and punishment. Theory Y is a management theory that assumes employees are determined, self-motivated, exercise self-control, and enjoy mental and physical work duties. Theory Y is in line with behavioural management theories. Theory X and Theory Y relates to Maslow’s hierarchy of needs in how human behaviour and motivation is the main priority in the workplace to maximize output. Theory X: The theory that employees are inherently lazy and irresponsible and will tend to avoid works unless closely supervised and given incentives, contrasted with Theory Y. Theory

Y:   The theory that employees are capable of being ambitious and self-motivated under suitable conditions, contrasted with Theory X.

Human Relations Approach: The human rationalists which also denote to neo-classicists, focused as human aspect of the business. These theorists emphasize that organization is a social system and the human factor is the most vital element within it.

There are numerous basic principles of the human relations approach that are mentioned below:

• Decentralization: The concept of hierarchy employed by classical management theorists is replaced with the idea that individual workers and functional areas (i.e., departments) should be given greater autonomy and decision-making power. This needs greater emphasis on lateral communication so that coordination of efforts and resources can occur. This communication occurs via informal communication channels rather than the formal, hierarchical ones.
• Participatory Decision-Making: Decision-making is participatory in the sense that those making decisions on a day-to-day basis include line workers not normally considered to be “management.” The greater sovereignty afforded individual employees and the subsequent reduction in “height” and increased in the span of control of the organizational structure requires that they have the knowledge and ability to make their own decisions and the communication skills to coordinate their efforts with others without a nearby supervisor.
• Concern for Developing Self-Motivated Employees: The importance of a system of decentralized and autonomous decision-making by members of the organization necessitates that those members be extremely “self-motivated”. The goal of managers in such an organization is to design and implement organizational structures that reward such self-motivation and autonomy. Another is to negotiate working relationships with subordinates that foster effective communication in both directions.

Elton Mayo and others conducted experiments that were known as Hawthorne experiments and explored informal groupings, informal relationships, patterns of communication, and patterns of internal leadership. Elton Mayo is usually popular as the father of Human Relations School. The human relationists advocate the several factors after conducting Hawthorne experiments which are mentioned below.

• Social system: The organization, in general, is a social system consists of numerous interacting parts. The social system established individual roles and established norms that may differ from those of formal organization.
• Social environment: The social climate of the job affects the workers and is also affected.
• Informal organization: The informal organization does also exist within the framework of the formal organization, and it affects and is affected by the formal organization.
• Group dynamics: At the place of work, the workers often do not act or react as individuals but as members of the group. The group plays an important role in determining the attitudes and performance of individual workers.
• Informal leader: There is an appearance of informal leadership as against formal leadership and the informal leader sets and enforces group norms.
• Non-economic reward: Money is an encouraging element but not the only motivator of human behaviour. Man is diversely motivated and socio-psychological factors act as important motivators.

Behavioural Science: Behavioural science and the study of organizational behaviour emanated during 1950s and1960s. The behavioural science approach was a natural development of the human relations movement. It concentrated on applying conceptual and analytical tools to the problem of understanding and foresees behaviour in the place of work. The behavioural science approach has contributed to the study of management through its elements of personality, attitudes, values, motivation, group behaviour, leadership, communication, and conflict, among other issues.

Contingency Approach: This approach of management thought focuses on management principles and concepts that have no general and universal application under all conditions. Joan Woodward in the 1950s has contributed to developing this approach in management. Contingency school states that management is situational and the study of management recognize the important variables in the situation. It distinguishes that all the subsystem of the environment is interconnected and interrelated. By studying their interrelationship, the management can find a resolution to the specific situation. Theorists stated that there is no effective way of doing things under all business conditions. Methods and techniques which are extremely effective in one situation may not give the same results in another situation.

The Quantitative Approach Of Management Thought

The quantitative approach aimed at enhancing the process of decision-making through the use of quantitative techniques. It is evolved from the principles of scientific management.

• Management Science (Operations Research): Management science which is also known as operations research utilized mathematical and statistical approaches to resolve management issues. It was developed during World War II as strategists attempted to apply scientific knowledge and methods to the intricate troubles of war. The industry started to apply management science after the war. The introduction of the computer technology made many management science tools and concepts more practical for industry
• Production and Operations Management: W. Edwards Deming exercised a great influence in developing contemporary ideas to improve productivity and quality. Major areas of study within operations management include capacity planning, facilities location, facilities layout, materials requirement planning, scheduling, purchasing and inventory control, quality control, the computer integrated manufacturing, just-in-time inventory systems, and flexible manufacturing systems.

Systems Approach Of Management Thought

The systems approach deals with the thoroughly understanding the organization as an open system that converts inputs into outputs. The systems approach has a great impact on management thought in the 1960s. During this period, thinking about managing practices allowed managers to relate different specialities and parts of the company to one another, as well as to external environmental factors. The system approach focuses on the organization as a whole, its communication with the environment, and its need to achieve equilibrium.

System approach

To summarize, there are important theories of Management and each theory has a distinct role to the knowledge of what managers do. Management is an interdisciplinary and global field that has been developed in parts over the years. Numerous approaches to management theory developed that include the universal process approach, the operational approach, the behavioural approach, the systems approach, the contingency approach and others. F W Taylor, Adam Smith, Henry Fayol, Elton Mayo and others have contributed to the development of Management concept. The classical management approach had three major categories that include scientific management, administrative theory and bureaucratic management. Scientific management highlighted the scientific study of work methods to improve worker efficiency.

• Senge, Peter. The Fifth Discipline: The Art and Practice of Learning Organizations. New York: Doubleday/Currency, 1990.
• Warner, Malcolm. “Organizational Behavior Revisited.” Human Relations 47, no. 10 (1994)
• Seth Accra Jaja(2003) Praxis of Work Behavior. Pinnacle publishers, Lagos. Houghton Mifflin Harcourt, Behavioural Management Theory
• Disha, Behavioural approach to management (with criticism)
• Sherri Hartzell, The emergence of the neo classical theory of management
• Kootnz & O’Donnell, Principles of Management.
• J.S. Chandan, Management Concepts and Strategies.

Evolution of Management Thought: Theories with Examples

There is a long history behind the evolution of management thought. Understanding the evolution of management thought is significant as it figures out what management principles and practices turn out best for your group and your association. It can assist you with dealing with your group and working environment all the more actually.

Anyway, what is going on with the evolution of management thoughts, to get this, we want to travel once again into the past.

The Industrial Revolution in the mid-nineteenth century got amazing changes in the work environment. As production lines were the essential wellspring of business, the management authors and scholars focus on the tasks and labor force present on the manufacturing plant floors.

There were times when the interest was high however the absence of usefulness and effectiveness kept work environments down. The Industrial Revolution brought forth different administration speculations and ideas that were created over the long haul and are as yet pertinent today.

► What is Management Thought?

Management thought refers to the hypothesis that guides the management of people in the association. Initially, administration theories were developed out of the practical experience of the supervisors in the industrial organization. Later on, supervisors borrowed ideas from several other fields of study like science, anthropology, etc.

Management Thought Meaning

• Management thought means the theories that guide the management of people in organizations.
• Classical theories of management developed out of the practical experience of managers in industrial enterprises.
• Later on, they borrowed ideas from other fields of study like science, anthropology, sociology, psychology, etc.

◉ Evolution of Management Thought

To understand the whole concept of evolution of management thought, the theory is separated into 4 significant phases, which are as per the following:

• Pre-scientific management period
• Classical theory
• Neo-classical theory (or behavior approach)
• Bureaucratic Model of Max Weber

✔ Pre-Scientific Management Period

As the modern insurgency happened in the eighteenth century, there was an enormous effect on the administration. The situation changed the strategy for raising capital, arranging work, and merchandise created for the people and organizations.

Business visionaries then, at that point, approached creation factors like land, work, and capital. The last advance was distinctly to put forth some attempt to join these elements to accomplish the objective effectively.

Be that as it may, after the modern insurgency, the fresher aspect taken by the executives is a result of the inclusion of specific outstanding characters who presented a few compelling thoughts and approaches for giving administration an adequate and exact bearing. Here is a brief on a portion of the characters and their speculations:

◉ Charles Babbage (1729 – 1871)

He was a Professor of Mathematics at Cambridge University. Prof Babbage observed that producers utilized science and arithmetic and that they (makers) depended upon suppositions rather than examinations and precise information.

He felt that the techniques of science and math could be applied to the arrangement of strategies in the spot of mystery for the arrangement of business issues.

He upheld the utilization of exact perceptions, estimation, and exact information for taking business choices. He asked about the administration of a venture, based on exact information acquired through unbending examination.

◉ Robert Owens (UK 1771 – 1858)

Robert Owens, the advertiser of co-usable and worker’s organization development in England, underlined the acknowledgment of the human component in the industry. He immovably accepted that specialists’ exhibition in the industry was affected by the functioning circumstances and treatment of laborers.

He presented novel thoughts of human relations – more limited working hours, lodging offices, preparing of laborers in cleanliness, training of their kids, arrangement of the container, and so forth Robert Owen, dealt with a gathering of material factories in Lanark, Scotland, where he utilized his thoughts of human relations. However his methodology was paternalistic, and he came to be viewed as the dad of Personnel Management.

◉ Henry Robinson Towne (1844 – 1924)

H.R Towne was the leader of the renowned lock-producing organization “Yale and Town”. He encouraged the blend of architects and business analysts as modern administrators.

This blend of characteristics, along with at minimum some expertise as a bookkeeper, is crucial for the effective administration of modern laborers.

He inclined toward coordinated trade of involvement among chiefs and argued for a coordinated work to pool the extraordinary asset of amassed information in the specialty of the studio the executives.

✔ The Classical Theory

Prof Babbage, Robert Owens, and different names prior referenced can be viewed as the trailblazers of the executives. However, their commitment to the development of the executives is nearly nothing.

The start of what is known as the study of executives began somewhat recently in the nineteenth century. Names like Emerson, F.W. Taylor, H.L. Award, and others, made ready for the foundation of what is called logical administration.

During the old style time frame, the executives believed was centered around work content, normalization, the division of work, and a logical methodology towards the association.

It additionally was firmly connected with the modern unrest as well as the ascent of enormous scope ventures.

Also Read : Classical Management Theory (in detail)

✔ The Neo-Classical Theory

This time of development of the executives believed is an improvement of the old-style management theories. As such, it changed and enhanced the old-style theory.

For example, the Classical theory zeroed in addition to the area of occupation content, including the administration of actual assets, while the neo-traditional theories gave more significant accentuation to worker connections in the workplace.

Also Read : Scientific Management Theory

✔ The Bureaucratic Model

A Sociologist called Max Weber proposed this model. What’s more, it incorporates an arrangement of rules, division of work depending on useful specialization, lawful power, and power, the pecking order of power, and the situation of representatives given their specialized skills.

Also Read : Administrative Management Theory

► Evolution of Management Theories

Associations were molded actually and the works of a few conspicuous journalists comprised of the administration and administration of different realms. These portrayals framed the writing that fostered the administration’s speculations.

A few heads of religion, political issues, and the military additionally gave the administration models.

For example, the books such as Tzu Sun’s “The Art of War” and Chanakya’s Arthashastra utilized a few administrative purposes and the administration of the realm concerning the arrangement plans individually.

◉ The Evolution of Management Science

The executive’s development began with human advancement, and the advancement of the board science is the whole idea including a few hypotheses behind it.

Anything that we as of now have gets refined and improved as the executive’s musings and hypotheses.

This helps individuals in working on the information on the cycle and uses the administration standards for improving the general association.

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The Evolution of Management Thought, 9/e (2023)

October 1, 2023 Dear Management History Division Colleagues,

It is our pleasure to announce that digital evaluation copies of the newly released nineth edition of The Evolution of Management Thought are now available. Designed for upper-level and graduate courses, this new edition further cements The Evolution of Management Thought’s place , over the past half-century, as the field of management history’s leading text. Far more than a chronicle of the historical development of modern management’s many roots, The Evolution of Management Thought is a fascinating telling of how ideas about the nature of work, the nature of human beings, and the nature of organizations have changed throughout history. The Evolution of Management Thought’s methodology is analytic , syntheti c, and interdisciplinary . It is analytic , in that it examines the backgrounds, experiences, and beliefs of people who made significant contributions to management thinking. It is synthetic , in that it weaves developmental trends, social movements, and environmental forces into a conceptual framework for understanding how management thinking has evolved within and across generations. It is interdisciplinary , in that it draws insights from economics, history, political science, psychology, and sociology to explain why management thinking has developed as it has.   This new edition traces the intellectual history of modern management thought as an activity and as an academic discipline in a way that makes reading The Evolution of Management Thought a thoroughly enjoyable encounter. Request a digital evaluation copy by pasting the following URL into your browser: https://www.wiley.com/en-us/The+Evolution+of+Management+Thought%2C+9th+Edition-p-9781394202294 We remain grateful for the suggestions and encouragement of the many people who have used previous editions of The Evolution of Management Thought in the classroom and in their own research. For more information, or if you have any questions, please feel free to contact us.

Daniel A. Wren and

Arthur G. Bedeian [email protected]

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The Evolution of Management: Lessons From the Past for Better Future

Table of Contents

Introduction

Are you interested in taking your management skills to the next level and becoming a more effective leader in your field? Do you think an organization’s success solely depends on how well-organized and effective it is? Do you also wonder what you can learn from the different management theories and approaches that have emerged over the years?  

The answer to all of these questions resides in this blog. In this blog, we will gain knowledge on the evolution of management. You can apply these principles to your organization to become an effective leader, make better decisions, and drive positive change in your organization. You will learn about different theories of management, such as the classical theory of management, the neo-classical theory of management, the modern theory of management, the bureaucratic model of Max Weber, the behavioral theory of management, and the contemporary theory of management.

Evolution of Management

The process of planning, organizing, directing, and controlling resources to achieve business goals is called management. It is a constantly evolving process, from classical theories of management to modern management theories. Each management theory has a different viewpoint on the best way to conduct management to be successful. Management philosophers, practitioners, and scholars are all contributors to management theory. Modern management is built on the solid foundation laid down by management thinkers in the past. 

Management theories assist organizations in focusing, communicating, and evolving. Using management theory in the workplace allows leadership to focus on their main goals. When a management style or theory is implemented, it automatically streamlines the organization’s top priorities.

Classical Theory Of Management

The classical theory of management was developed in the late 19th and early 20th centuries. It is mainly based on the principles of scientific management and administrative management. 

Scientific Management Theory

Frederick Winslow Taylor is the father of scientific management. He believed that work should be analyzed scientifically and divided into smaller tasks to improve the efficiency of the organization. He introduces time and motion studies to determine how long it takes to complete a task and how it can be improved. His ideas paved the way for assembly line production and the standardization of work processes. The scientific approach of Taylor describes that an increase in an organization’s efficiency can result in higher productivity and profits.

Administrative Management Theory

Henry Fayol developed administrative management theory and is treated as the father of modern theory, which concentrated on the entire organization’s management. He laid down five functions of management that are planning, organizing, commanding, coordinating, and controlling. His ideas formed the foundation of modern management and have had a global impact on management practices.

Henry Fayol suggested important managerial qualities and emphasized the importance of developing such qualities. He developed fourteen principles of management out of his practical experience. These principles are universal in nature and apply to all types of organizations.

Also Read: How to Make the Right Promotion Decisions: Boost Your Team’s Performance

Neoclassical Theory of Management

The neoclassical theory of management was published in the 1920s and 1930s as a remedy for the flaws in the classical theory of management.  

Human Relations Management

Elton Mayo developed a theory after the classical management theory received criticism. The human relations approach to management was introduced by Elton Mayo. His contributions to the growth of management theory are exceptional. In order to assess the characteristics and psychological responses of employees in on-the-job situations, Mayo oversaw the team that conducted the study at Western Electric’s Hawthorne Plant from 1927 to 1932. 

Mayo talked about the things that affect how people behave. He came to the conclusion that a combination of factors, such as less restrictive supervision, granting workers autonomy, and enabling the formation of small groups of workers, were the real causes of the increase in productivity. The other factors included changing working hours and implementing rest breaks.

Behavioral Approach

A behavioral approach to management determines the hierarchy of needs of the employees. This management theory was proposed by Abraham Maslow. According to his theory, people have a hierarchy of needs that they try to fulfill. These needs are physiological, psychological, and social. By identifying the needs of the employees and providing opportunities to fulfill them, managers can motivate their employees.

Modern Theory Of Management

The modern theory of management emerged in the 1950s and 1960s. This theory focused on the incorporation of various management theories. 

Systems Approach

The father of modern management theory, Peter Drucker, concentrated on Management by Objectives (MBO). It also emphasized the concept of knowledge workers. MBO is the process of establishing clear goals and objectives for employees and tracking their progress toward achieving them. Employees are not only thought of as physical laborers under the concept of knowledge workers, they also possess knowledge and skill sets that are important for the organization’s success.

Contingency Approach

The contingency Approach of the modern theory of management determines that there is not a single approach to management and that the most effective management style depends on the situation and the individual or group being managed. This theory has given rise to situational leadership, which entails adapting management styles to fit the demands of the circumstances.

Behavioral Theory of Management

The behavioral theory of management centers on the study of human behavior in the workplace. This theory emerged in the 1940s and emphasizes the importance of leadership, communication, motivation, and job satisfaction in an organization’s success. The cornerstone of the behavioral theory is Douglas McGregor’s Theory X and Theory Y. 

Theory X states that employees are lazy, need constant monitoring, and are motivated by rewards and punishments. On the other hand, theory Y states that employees are self-motivated, responsible, and capable of taking initiative.

Also Read: Understanding the Skills Gap in the Workforce- Reskilling to Addressed Skill Gap

Contemporary Theory of Management 

The current trends and practices in management, including the integration of technology, globalization, sustainability, and diversity in the management of organizations, fall under the contemporary theory of management. 

Digital management is the key aspect of contemporary management theory. The way organizations operate, communicate, and compete has completely transformed with the arrival of technology. The rise of social media, big data, and cloud computing has given managers new opportunities and challenges. Now, managers need to think globally, as organizations are losing market shares even in the domestic market because of competition from foreign companies.

Theory Z Concepts

Theory Z concepts emerged in 1978 by Ouchi and Jaeger that incorporates Japanese and American management culture. This theory places a strong emphasis on the requirement to research and adopt appropriate management techniques from other countries. 

McKinsey’s 7-S approach

McKinsey’s 7-S Framework is a management theory that helps organizations understand the connections between various business components to achieve organizational change. 

Seven connected components make up the framework, all of which must work together for success. Any misalignment of these factors can result in inefficiencies, conflicts, and ultimately failure. The seven elements are strategy, structure, systems, shared values, skills, staff, and style.

The way organizations operate and manage their resources has changed as a result of the evolution of management. You have learned about the classical theory, the neoclassical theory, the modern theory, and the contemporary theory of management. Each theory has contributed to the development of modern management practices. Managers must comprehend the various management theories and how they can be used in various contexts. You can develop your skills as a manager by enhancing your knowledge of management theories and practices and can stay ahead of the curve, and succeed in a fast-paced business world.

Learn With DT Evolve

To enhance your management skills, DT Evolve has a course for you. This course will help you develop important skills for time management, team motivation, and personal happiness, whether you’re in charge of a small team or an entire company. At home, at work, and at every stage of your career, leadership is a necessary talent. This training would improve your life if you’re in charge of two or more people at work. Here’s the link to the course, Mastering Leadership Skills

Frequently Asked Questions (FAQs)

Peter Drucker is known as the father of modern management.

The neoclassical theory of management was published in the 1920s and 1930s as a remedy for the flaws in the classical theory of management.

It is important to understand different management theories and their applications as a manager in order to develop your skills and lead your organization toward success.

Firstly. Identify the strengths and weaknesses of each theory and how they can be applied to your specific organizational context. Then, choose the approach that aligns with your organizational goals and objectives. After choosing the approach, develop a strategy for the implementation of the approach. Do not forget to seek feedback from employees and stakeholders to determine if the approach is inclusive and effective.

 The seven elements are strategy, structure, systems, shared values, skills, staff, and style.

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Evolution of Management Thoughts

Related Papers

Rannie C O N D E S Agustin

China, a territorial aggressor and large-scale intellectual property thief, falsely claims that it originated the ―ancient bureaucracy. Accordingly, Chinese began to develop the idea of bureaucracy. Bureaucracy has roots in the early dynasties but only became fully developed during the Han dynasty (206 BC–220 AD) aimed at training Confucian scholars.

EVOLUTION OF MANAGEMENT

Terefe Megiso

Introduction The present position of management has evolved over a period of time. In order to better understand and appreciate this present position, it is necessary to be familiar with the contributions of pioneers and the main stage of development of management. Our objective is not to undertake a detailed examination of contribution of each individual but to provide some general overviews. Some of the most contributions are listed below. 1.1. Classical Management Era The classical (traditional) management era signifies the beginning of the systematic study of organizations and management practices. Under classical theory of management, an organization is viewed as a structure of relationships. The classical management approach is the theory of management that focuses on the productivity, output and efficiency of workers rather than the difference in behavior that exist among them. This approach merges scientific, bureaucratic and administrative theories of management. Scientific management is concerned with knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way. Administrative management focuses on the manager and the use of general principles and functions for improving organizational functioning. The administrative management school treats management as a process of getting work done through and with people. Bureaucratic management focuses on the use of rules, set hierarchy of work position, a clear division of work and allocation of authority and impersonal relationship in performing organizational activities for goal achievement. Bureaucratic management treats an organization to be a rational legal entity.

Aklas Chowdhury

Elvis Artiles

fiker belay

Uma Joshi-Bodas

Ancient Indian management concepts can be seen in Mahabharat, Koutiliya arthashastra, and other treatises. Also need to find various aspects of ancient Indian Management.

Deedenwii B A R I T U R E Neele

Md. Shafiqul Islam

Journal of Public Administration, Finance and Law

Management is a challenge requiring constant adaptation to new circumstances because globalization, technological change, the importance of knowledge and collaboration across organizational boundaries have make the current business landscape different from the past decades, it is pertinent to have an understanding of the origins of management thought. It is against this backdrop that this paper examines the evolution of management thought through the decades. This paper adopted quantitative research method through textual analysis and concludes that companies, like individuals, fail or succeed for a variety of reasons. Some of these reasons are circumstantial. Most are personal and human and include the decisions managers make and the actions they take.

The evolution of management thought from past to present

Naveen Chandrasekara

Management includes setting an organization's strategy and managing its employees' (or volunteers') activities to accomplish its objectives through the utilization of resources including cash, the environment, technology, and people. This secondary research paper is basically divided into five parts as, introduction to management, definitions of management, functions of management, the evolution of management thought and Japanese modern techniques of management. The outcomes of the research is fully comprised of secondary data which was obtained from the journal articles, web pages and E-books. The writer thinks, this research will be beneficial for any kind of organizational management, managers and workers in general. Key words – Management, Japanese techniques, Evolution, Functions

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