The Evolution of

Management
Theory

What is an Organization?
Organizations are social entities that
are goal-oriented; are designed as
deliberately structured and
coordinated activity systems, and are
linked to the external environment
(Daft, 2004).

Organization theory and

Management
Management technology stems

from organization theory and even

more applied in the sense that it
focuses on the practice of
management in ongoing
organizations (Kast&Rosenzweig1970).

Micro Perspective of
Organizations
Simplifying Assumptions:

Firms viewed as an individual entrepreneur

Profit maximization
Rationality in achieving firm goals
Firms function is to transform inputs into
outputs
Staple environment in which firm operates
Concerned only with changes in prices and
quantities of inputs and outputs

Evolution Of Management
Thought
Classical Approaches
1890

1900

1910

Contemporary Approaches
1920

1930

1940

1950

Administrative Quantitative SystemsContingency

Current and
theory
future revolutions
management management theory

Systematic
management
Scientific
management

Bureaucracy

Human
relations

Organizational
behavior

Early Management Concepts &

Industrial revolution
Influences
minor improvements in management tactics
produced impressive increases in production
quantity and quality
economies of scale - reductions in the
average cost of a unit of production as the
total volume produced increases
opportunities for mass production created by
the industrial revolution spawned intense
and systematic thought about management
problems and issues
efficiency
production processes
cost savings

Theories of Management
M anagem ent
T h e o ry
C la s s ic a l
T h e o r ie s

B e h a v io u r a l
T h e o rie s

Q u a n tita tiv e
T h e o r ie s

C o n te m p o ra ry
T h e o r ie s

S c ie n tific
M anag em ent

B e h a v io u r is t
T h e o r ie s

M anag em ent
S c ie n c e

S y s te m s
T h e o ry

B u r e a u c r a tic
M anag em ent

H a w th o rn e
S tu d ie s

O p e r a tio n s
M anag em ent

C o n tin g e n c y
T h e o ry

A d m in is tr a tiv e
M anag em ent

H um an
R e la tio n s

M anag em ent
In fo r m a tio n
S y s te m s

E m e r g in g
V ie w s

B e h a v io u r a l
S c ie n c e

Theories of
Management
M anagem ent
T h e o ry

CLASSICAL
CLASSICAL
C la s s ic a l
T h e o r ie s

THEORIES
THEORIES

B e h a v io u r a l
T h e o r ie s

S c ie n t ific

Q u a n t it a t iv e
T h e o r ie s

C o n te m p o ra ry
T h e o r ie s

B e h a v io u r is t
T h e o r ie s

M anagem ent
S c ie n c e

S y s te m s
T h e o ry

M anagem ent

H a w th o rn e
S t u d ie s

O p e r a t io n s
M anagem ent

C o n t in g e n c y
T h e o ry

A d m in is t r a t iv e
M anagem ent

H um an
R e la t io n s

M anagem ent
I n fo r m a t io n
S y s te m s

E m e r g in g
V ie w s

SCIENTIFIC
M anagem ent
SCIENTIFIC
MANAGEMENT
MANAGEMENT
B u r e a u c r a t ic

B e h a v io u r a l
S c ie n c e

Frederick Taylor

Developed the specific principles of

Scientific Management

Scientific Management
The systematic study of the relationships
between people and tasks for the purpose
of redesigning the work process for higher
efficiency.
Defined by Frederick Taylor in the late 1800s to
replace informal rule of thumb knowledge.
Taylor sought to reduce the time a worker spent
on each task by optimizing the way the task was
done.

Taylors 4 Principles of
Scientific Management
Scientifically study each part of a

task and develop the best method for

performing the task

Carefully select workers and train

them to perform the task by using

the scientifically developed method

Taylors 4 Principles of
Scientific Management
Cooperate fully with workers to ensure
that they use the proper method

Divide work and responsibility so that

management is responsible for

planning work methods using scientific
principles and workers are responsible
for executing the work accordingly

Problems
Problems with
with Scientific
Scientific
Management
Management
Managers frequently implemented only the
increased output side of Taylors plan.

Workers did not share in the increased output.

Specialized jobs became very boring, dull.

Workers ended up distrusting the Scientific
Management method.

Workers could purposely under-perform.

Management responded with increased use of
machines and conveyors belts.

Fayols Principles of
Management
Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization
leading to poor quality and worker dissatisfaction.

Authority and Responsibility

Fayol included both formal and informal authority
resulting from special expertise.

Unity of Command
Employees should have only one boss.

Fayols Principles of
Management (contd)
Line of Authority
A clear chain of command from top to bottom
of the firm.

Centralization
The degree to which authority rests at the top
of the organization.

Unity of Direction
A single plan of action to guide the
organization.

Fayols Principles of Management

(contd)
Equity
The provision of justice and the fair and impartial
treatment of all employees.

Order
The arrangement of employees where they will be
of the most value to the organization and to
provide career opportunities.

Initiative
The fostering of creativity and innovation by
encouraging employees to act on their own.

Fayols Principles of
Management (contd)
Discipline

Obedient, applied, respectful employees are

necessary for the organization to function.

Remuneration of Personnel
An equitable uniform payment system that
motivates contributes to organizational success.

Stability of Tenure of Personnel

Long-term employment is important for the
development of skills that improve the
organizations performance.

Fayols Principles of
Management (contd)
Subordination of Individual Interest to
the Common Interest

The interest of the organization takes

precedence over that of the individual
employee.

Esprit de corps
Comradeship, shared enthusiasm foster
devotion to the common cause
(organization).

Administrative Management
Theory
Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.

Max Weber
Developed the concept of bureaucracy as a
formal system of organization and
administration designed to ensure efficiency
and effectiveness.

Webers Principles of Bureaucracy

Figure 2.2

Webers Five Principles of

Bureaucracy
Authority is the power to hold people accountable

for their actions.

Positions in the firm should be held based on
performance, not social contacts.
Position duties are clearly identified so that people
know what is expected of them.
Lines of authority should be clearly identified such
that workers know who reports to who.
Rules, standard operating procedures (SOPs), and
norms guide the firms operations.

Theories of
Management
M anagem ent
T h e o ry

C la s s ic a l
T h e o r ie s

BEHAVIOURAL
BEHAVIOURAL
B e h a v io u r a l
Q u a n t it a t iv e

S c ie n t ific
M anagem ent

B u r e a u c r a t ic
M anagem ent

A d m in is t r a t iv e
M anagem ent

T h e o r ie s

THEORIES
THEORIES
B e h a v io u r is t
T h e o r ie s

T h e o r ie s

M anagem ent
S c ie n c e

HAWTHORNE
HAWTHORNE
H a w th o rn e
O p e r a t io n s
S t u d ie s

M anagem ent

H um an
R e la t io n s

M anagem ent
I n fo r m a t io n
S y s te m s

STUDIES
STUDIES

B e h a v io u r a l
S c ie n c e

C o n te m p o ra ry
T h e o r ie s

S y s te m s
T h e o ry

C o n t in g e n c y
T h e o ry

E m e r g in g
V ie w s

Behavioural Theories
Emphasise the importance
of attempting to understand
the various factors that
affect human behaviour in
organisations.

The Hawthorne Studies

A group of studies conducted
at the Hawthorne plant of the
Western Electric Company
during the late 1920s and
early 1930s

Hawthorne Studies

Researchers monitored the productivity

of five women who assembled electrical
relays for several years.

Theories of
Management
M anagem ent
T h e o ry

C la s s ic a l
T h e o r ie s

BEHAVIOURAL
BEHAVIOURAL
B e h a v io u r a l
Q u a n t it a t iv e
T h e o r ie s

THEORIES
THEORIES

T h e o r ie s

C o n te m p o ra ry
T h e o r ie s

S c ie n t ific
M anagem ent

B e h a v io u r is t
T h e o r ie s

M anagem ent
S c ie n c e

S y s te m s
T h e o ry

B u r e a u c r a t ic
M anagem ent

H a w th o rn e
S t u d ie s

O p e r a t io n s
M anagem ent

C o n t in g e n c y
T h e o ry

M anagem ent
I n fo r m a t io n
S y s te m s

E m e r g in g
V ie w s

A d m in is t r a t iv e
M anagem ent

H um an
HUMAN
HUMAN
R e la t io n s

RELATIONS
RELATIONS
B e h a v io u r a l
S c ie n c e

Maslows
Hierarchy
of Needs

Self
Actualisation

Self
Esteem

Social
Needs

Safety & Security

Needs
Basic Needs

Theory X & Theory Y

Theory X
The average person dislikes work and will try

to avoid it.
Most people need to be coerced, controlled,
directed, and threatened with punishment to
get them to work towards organisational goals.
The average person WANTS to be directed,
shuns responsibility, has little ambition, and
seeks security above all.

Theory X & Theory Y

Theory Y
Most people do not inherently dislike work;
it is seen as natural as recreation and rest.
People will exercise self-direction and selfcontrol to reach goals to which they are
committed.
Commitment to goals is a function of the
rewards available; particularly esteem and
self-actualisation needs.

Theory X & Theory Y

Theory Y
When conditions are favourable, the average

person learns not only to accept

responsibility, but also to seek it.
Many people have the capacity to exercise a
high degree of creativity and innovation in
solving organisation problems.
The intellectual potential of most individuals
is only partially utilised in most organisations.

Theories of
Management
M anagem ent
T h e o ry

C la s s ic a l
T h e o r ie s

B e h a v io u r a l
T h e o r ie s

QUANTITATIVE
QUANTITATIVE
Q u a n t it a t iv e
C o n te m p o ra ry
T h e o r ie s

THEORIES
THEORIES

T h e o r ie s

S c ie n t ific
M anagem ent

B e h a v io u r is t
T h e o r ie s

M anagem ent
S c ie n c e

S y s te m s
T h e o ry

B u r e a u c r a t ic
M anagem ent

H a w th o rn e
S t u d ie s

O p e r a t io n s
M anagem ent

C o n t in g e n c y
T h e o ry

A d m in is t r a t iv e
M anagem ent

MANAGEMENT
M anagem ent
E m e r g in g
MANAGEMENT
I n fo r m a t io n
V ie w s
INFORMATION
S y s te m s
INFORMATION
SYSTEMS
B e h a v io u r a l
SYSTEMS
H um an
R e la t io n s

S c ie n c e

Management Information
Systems
Focuses on designing and
implementing computer-based
information systems for use by
management.

These systems turn raw data

into information that is useful to
various levels of management.

Theories of
Management
M anagem ent
T h e o ry

C la s s ic a l
T h e o r ie s

B e h a v io u r a l
T h e o r ie s

Q u a n t it a t iv e
T h e o r ie s

CONTEMPORARY
C o n te m p o ra ry
CONTEMPORARY
T h e o r ie s

THEORIES
THEORIES
S y s te m s
SYSTEMS
T h e o ry
SYSTEMS

S c ie n t ific
M anagem ent

B e h a v io u r is t
T h e o r ie s

M anagem ent
S c ie n c e

B u r e a u c r a t ic
M anagem ent

H a w th o rn e
S t u d ie s

O p e r a t io n s
M anagem ent

C o n t in g e n c y
T h e o ry

A d m in is t r a t iv e
M anagem ent

H um an
R e la t io n s

M anagem ent
I n fo r m a t io n
S y s te m s

E m e r g in g
V ie w s

B e h a v io u r a l
S c ie n c e

THEORY
THEORY

Systems Theory
Based on the idea that
organisations can be
visualised as systems
System
A set of interrelated
parts that operate as a
whole in pursuit of
common goals

Systems Theory
Developed
through
the
sciences of
Biology
and
Physical
Science

Resources
Human
Materials
Equipment
Finance
Information

Inputs

Abilities
Planning
Organising
Leading
Control
Technology

Transformation
Processes

Feedback from Environment

Outcomes
Products
Services
Profit & Losses
Employee
Growth &
Satisfaction

Outputs

Open vs. Closed Systems

Closed System
A system that does little
or no interacting with its
environment and receives
little feedback
Open System
A system that operates in
continual interaction with
its environment

Theories of
Management
M anagem ent
T h e o ry

C la s s ic a l
T h e o r ie s

B e h a v io u r a l
T h e o r ie s

Q u a n t it a t iv e
T h e o r ie s

CONTEMPORARY
C o n te m p o ra ry
CONTEMPORARY
T h e o r ie s

THEORIES
THEORIES

S c ie n t ific
M anagem ent

B e h a v io u r is t
T h e o r ie s

M anagem ent
S c ie n c e

B u r e a u c r a t ic
M anagem ent

H a w th o rn e
S t u d ie s

O p e r a t io n s
M anagem ent

A d m in is t r a t iv e
M anagem ent

H um an
R e la t io n s

M anagem ent
I n fo r m a t io n
S y s te m s

B e h a v io u r a l
S c ie n c e

S y s te m s
T h e o ry

CONTINGENCY
CONTINGENCY
C o n t in g e n c y
T h e o ry

THEORY
THEORY
E m e r g in g
V ie w s

Contingency Theory
A viewpoint that argues that
appropriate managerial action
depends on the circumstances of
the situation.
In other words ..

there is no single right way to manage

Contingency Theory
Contingency View
Appropriate
managerial
action depends on
situation

Universal
Management
Principals

Situation A

Situation C

Situation B

Contingency Theory