The Evolution of Management Theories

If you're familiar with management theory background and the evolution that led to present practices,
your greater understanding of management principles can help you manage employees more effectively.
Management theories have evolved from an emphasis on authority and structure to a focus on
employees. There are still competing theories regarding what motivates an employee, but knowing how
the theories arrived at their conclusions can help you with your own employees.

History

Management theory originated with "scientific" and "bureaucratic" management that used
measurement, procedures and routines as the basis for operations. Organizations developed hierarchies
to apply standardized rules to the workplace and punished workers for not following them. With the
"human relations" movement, companies started emphasizing individual workers. Contemporary
management theories, including system theory, contingency theory and chaos theory, focus on the
whole organization, with employees as a key part of the system

Culture

Management theories have evolved to acknowledge that corporate culture can be a contributor to
performance. If you can develop a sense of belonging to a group for your company, you can manage the
business for improved financial performance and return on investment. To work well with a positive
corporate culture as a manager, you have to work through the culture and not try to control it. A positive
corporate culture takes care of a lot of informal exchange of information and behavioral norms.

Quantitative Methods

All contemporary management theories emphasize measurement and quantitative analysis.

Management has evolved to focus on fundamental company operating results and business variables
that are relevant, specific to goals and quantifiable. Information technology allows you to analyze large
data sets and extract trends. You can evaluate key performance indicators, which track data affecting
your objectives, to tell you how well you are advancing toward your goals. You can perform these
evaluations independently of the management style and organizational structure of the company.

Competing Approaches

Management theories have evolved into two competing orientations. Theory X assumes employees
don't want to work and act out of self-interest. Managers have to put in place a disciplinary structure to
guide employees in the execution of their work. If you function with theory X, you have to tell employees
what to do and encourage them to do it. Theory Y assumes employees want to carry out interesting and
rewarding work and seek reward in the achievement. Managers have to set goals and allow employees
to find creative ways to reach them. If your company culture is in line with theory Y, you facilitate
employee effort and act more like a coach.

'A management system is the framework of processes and procedures used to ensure that an
organization can fulfill all tasks required to achieve its objectives.

After World War II, the reigning paradigm of product-oriented mass production had reached its peak.
Examples of management systems at that time are linear assembly lines, organizational hierarchies of
command, product quality control and mass consumption.

Soon afterwards, the Deming-Juran process-quality teachings spearheaded a new quality orientation
(later referred to as Total quality management) and propelled Japan directly to the post-war process
focus (process quality control, just-in-time, continuous improvement).[1] The US responded by a painful
and prolonged product-to-process transformation, ultimately leveling the playing field again by the mid
1980s.

At the end of the 1980s, business process reengineering focused on the radical redesign of the
production process through the reintegration of task, labor and knowledge. As a result, lean, flexible and
streamlined production processes were created, capable of fast response and internet-based integration
necessary for the upcoming phase of supply chains - business-to-business (B2B) as well as demand
chains business-to-customer (B2C).[2][3]

In the above three stages of Evolution of Management Systems, the competitive advantage was derived
almost exclusively from the internal resources of the firm. At the end of the 1980s, a radical fourth shift
has occurred: the competitive advantage became increasingly derived from the external resources of the
firm through the extended networks of suppliers and customers.[4]

Figure 1 Basic scheme: product, process, external networks

Figure 1 refers to the basic scheme of production and service delivery process. It represents the
traditional linear input-process-output management system. This system has been fixed and unchanging
for centuries. The only change has been in terms of changing focus on individual components of the
system, emphasizing different parts of this basic scheme.