Contemporary management practices

The Premodern Era
Organized activities and management have existed for thousands of years, for example, the construction of the
Egyptian pyramids and the Great Wall of China.
Michelangelo, the genius artist of the Renaissance era, was a manager himself. In order to paint the ceiling of
the Sistine Chapel and other great things, he personally selected his workers, trained them, and assigned them
to one or more teams, and he kept detailed employment records.
In the past several hundred years, especially in the last century, management has undergone systematic
investigation, acquired a common body of knowledge, and has become a formal discipline of study.
What was Adam Smith's Contribution to the Field of Management?
Adam Smith, in The Wealth of Nations (1776), made an argument on the economic advantages that
organizations and society would achieve from the division of labor, which is the breakdown of jobs into
narrow, repetitive tasks.
Smith concluded that division of labor increased productivity by increasing each worker's skill and dexterity,
by saving time that is usually lost in changing tasks, and by the creation of labor− saving inventions and
Probably, the most important influence on management was the Industrial Revolution. It began in the late
eighteenth century in Great Britain, where machine power was being substituted for human power.
Thanks to this movement, there was the development of big organizations. John D. Rockefeller was putting
together the Standard Oil monopoly, Andrew Carnegie was gaining control of two− thirds of the steel
industry, and other people were creating new businesses that would require formalized management practices.
The roots of modern management lie within a group of practitioners and writers who gave their contributions
to management which we call the classical approach. The classical approach is the term used to describe the
scientific management theorists and the general administrative theorists. We can divide it into two
1. Scientific management theorists: It's the theorists that looked at the field from the perspective of how to
improve the productivity of operative personnel.
2. General administrative theorists: They were concerned with the overall organization and how to make it
more effective.
The year that the modern management theory was born was 1911. This year was the year that Frederick
Winslow Taylor published his book Principles of Scientific Management, where he describes the theory of
scientific management which is the use of the scientific method to define the one best way for a job to be
done. Taylor is known as the father of scientific management. He was a mechanical engineer with a Quaker
Puritan background and was appalled at the inefficiency of workers. Employees used different techniques to
do the same job. Taylor set out to correct the situation by applying the scientific method to jobs on the shop
Taylor wanted to create a mental revolution among the workers and management by defining clear guidelines
for improving production efficiency. He defined four principles of management which are:
1. Develop a science for each element of an individual's work, which replaces the old rule of thumb method.
2. Scientifically select and the train, teach, and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is done according to the principles of the
science that has been developed.
4. Divide work and responsibility almost equally between management and workers. Management takes over
all work for which it is better fitted than the workers.
Taylor argued that following these principles would benefit both management and workers. Workers would
earn more pay, and management more profits.
Using scientific management techniques, Taylor was able to define the one best way for doing each job. Then,
he could select the right people for the job and train them to do it precisely in this one best way. TO motivate
workers, he favored incentive wage plans. Overall, Taylor achieved improvements in productivity of 200 per
cent or more. He stated that the role of managers is to plan and control, and that of workers to perform as they
were instructed.
Who Else, Besides Taylor, Were Mayor Contributors To Scientific Management?
Taylor's most prominent disciples were Frank and Lillian Gilbreth. Frank was a construction contractor, while
Lillian was a psychologist. They both studied work arrangements to eliminate wasteful hand− and− body
motions. They also experimented in the design and use of proper tools and equipment for optimizing work
The Gilbreths also made a classification scheme to label seventeen basic hand motions; for example, search,
select, grasp, hold; and they called them therbligs.
Another associate of Taylor was an engineer named Henry L. Gantt. He extended some of Taylor's original
ideas and added a few of his own. For example, Gantt devised an incentive system that gave workers a nonus
for completing their jobs in less time than the allowed standard. He also introduced a bonus for foremen to be
paid for each worker who made the standard plus an extra bonus if all the workers under the foreman made it.
Gantt is most noted for creating a graphic bar chart that could be used by managers as a scheduling device for
planning and controlling work.
What did Henry Fayol and Max Weber Contribute to Management Thought?
They developed the General Administrative theory.
Fayol wrote during the same time as Taylor, but his attention was directed at the activities of all managers,
and he wrote from personal experience. He was the managing director if a large French coal− mining firm and
was a practitioner.
Fayol argued that management was an activity common to all human undertakings in business, in government,
and even at home. He stated fourteen principles of management which are fundamental or universal truths that
could be applied to management activities in all human endeavors. They are:
1. DIVISION OF WORK. Specialization increases output by making employees more efficient.
2. AUTHORITY. Managers must give orders. Authority gives them the right. But, along with authority, goes
3. DISCIPLINE. Employees must obey and respect the rules that govern the organization. Good discipline is
the result of effective leadership, a clear understanding between management and workers, and the judicious
use of penalties for infractions of the rules.
4. UNITY OF COMMAND. Every employee should receive orders from only one superior.
5. UNITY OF DIRECTION. Each group of organizational activities that have the same objective should be
directed by one manager using one plan.
any employee or group of employees should not take precedence over the interests of the organization as a
7. REMUNERATION. Workers must be paid a fair wage for their services.
8. CENTRALIZATION. It refers to the degree to which subordinates are involved in decision making.
Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of
proper proportion.
9. SCALAR CHAIN. The line of authority from top management to the lowest ranks. Communication should
be included in this chain.
10. ORDER. People and materials should be in the right place at the right time.
11. EQUITY. Managers should be kind and fair to their subordinates.
12. STABILITY OF TENURE OF PERSONNEL. High employee turnover is inefficient. Management should
provide orderly personnel planning and ensure that replacements are available to fill vacancies.
13. INITIATIVE. Employees who are allowed to originate and carry out plans will exert high levels of effort.
14. ESPRIT DE CORPS. Promoting team spirit will build harmony and unity within the organization.
Max Weber was a German sociologist. He developed a theory of authority structures and described
organizational activity on the basis of authority relations. He described an ideal type of organization that he
called a bureaucracy which contains:
1. Division of labor.
2. Authority Hierarchy.
3. Formal Selection.
4. Formal Rules and Regulations.
5. Impersonality.
6. Career Orientation.
Weber recognized that this ideal bureaucracy didn't exist in reality, but that it represented a selective
reconstruction of the real world.
What Were the General Administrative Theorist's Contributions to Management Practice?
General administrative theorists are writers who developed general theories of what managers do and what
constitutes good management practice. For example, the functional view of the manager's job owes its origin
to Henry Fayol. They became a frame of reference against which many current concepts have evolved.
Weber's bureaucracy was a response to the abuses that he saw going on within organizations. Weber believed
that his model could remove the ambiguity , inefficiencies, and patronage that characterized most
organizations at that time. Many of the components of his bureaucracy are still inherent in large organizations
Managers get things done by working with people.
Human resources approach is the study of management that focuses on human behavior.
Who Were Some Early Advocates of the Human Resources Approach?
They are five: Robert Owen, Hugo Munsterberg, Mary Parker Follet, Chester Barnard, and Elton Mayo.
What Claim to Fame does Robert Owen Hold?
Robert Owen was a Scottish businessman who bought his first factory when he was 18. Repulsed by the harsh
practices in factories like the employment of children, thirteen− hour workdays, and miserable working
conditions made Owen become a reformer. He said that they would buy the best machines but then buy the
cheapest labor to run them. Showing concern for employees was both highly profitable for management and
would relieve human misery.
Owen proposed a utopian workplace. Owen is remembered for his courage and commitment to reducing the
suffering of the working class.
For What is Hugo Munsterberg Best Known?
Munsterberg created the field of industrial psychology. In his text Psychology and Industrial Efficiency,
published in 1913, he argued for the scientific study of human behavior to identify general patterns and to
explain individual differences. He suggested the use of psychological tests to improve employee selection, the
value of learning theory in the development of training methods, and the study of human behavior to
understand what techniques are most effective for motivating workers. He saw a link between scientific
management and industrial psychology.
What Contributions did Mary Parker Follet Make to Management?
She was one of the earliest writers to recognize that organizations could be viewed from the perspective of
individual and group behavior. Follet was a transitionalist writer but had people− orientated ideas, she was a
social philosopher. Her ideas had clear implications for management practice. Follet said that organizations
should be based on group ethic rather than on individualism. Managers and workers should review themselves
as partners, as part of a common group. Managers should rely on their expertise and knowledge to lead
Who was Chester Barnard?
Barnard was also a transitionalist who proposed ideas that bridged classical and human resources viewpoints.
He was a practitioner, he was president of New Jersey Bell Telephone Company. He was influenced by
Weber's writings but Barnard saw organizations as social systems as social systems that require human
cooperation. He expressed his ideas in his book The Functions of the Executive published in 1938.
Barnard believed that organizations were made up of people who have interacting social relationships. A
major part of an organization's success depends on obtaining cooperation from its employees. Managers had
to examine the external environment and then adjust the organization to maintain a state of equilibrium. If
management failed either to ensure a continuous input of materials and supplies or to find markets for its
outputs, then the organization's survival would be threatened.
What were the Hawthorne Studies?
The most important contribution to the human resources approach to management are the Hawthorne studies
which are a series of studies during the 1920's and 1930's that provided new insights into group norms and
behaviors. Mayo's conclusions were that behavior and sentiments are closely related, that group influences
significantly affect individual behavior, that group standards establish individual worker output, and that
money is less a factor in determining output than are group standards, group sentiments, and security. These
conclusions led to an emphasis on the human factor in the functioning of organizations and their goals, and to
increased paternalism by management.
In 1930, Mayo and his colleagues wrote the first published results from the Hawthorne studies.
The Hawthorne studies went a long way in changing the dominant view at the time that people were no
different than machines.
Why was the Human Relations Movement Important to Management History?
They are important for its commitment to making management practices more humane. A satisfied worker
was believed to be a productive worker. Dale Carneige, Abraham Maslow, and Douglas McGregor were
individuals whose views were shaped more by their personal philosophies than by sustantive research
Dale Carnegie's ideas and teachings had an enormous effect on management practice. The theme of his book
How to Win Friends and Influence People were the ways to succeed:
• Make others feel important through a sincere appreciation of their efforts.
• Make a good first impression.
• Win people to your way of thinking by letting others do the talking, being sympathetic, and never telling a
man he is wrong.
• Change people by praising good traits and giving the offender the opportunity to save face.
Abraham Maslow was a humanistic psychologist who proposed a theoretical hierarchy of five needs:
psychological, safety, social, esteem, and self− actualization. He said that each step in the hierarchy must be
satisfied before the next can be activated and that once a need was satisfied it no longer motivated behavior.
Douglas McGregor is known for his formulation of two sets of assumptions about human nature:
• Theory X. Its an essentially negative view of people. It assumes they have little ambition, dislike work,
want to avoid responsibility, and need to be closely directed to work effectively.
• Theory Y. Its a positive view. It assumes that people can exercise self− direction, accept responsibility, and
consider work to be as natural as rest or play. It captured the true nature of workers and should guide
management practice.
McGregor's beliefs about human nature have had a strong following among management academics and
What Was the Common Thread that Linked Advocates of the Human Relations Movement?
It's the unshakable optimism about people's capabilities. The strongly believed in their cause and wouldn't
change their view no matter what.
Who Were the Behavioral Science Theorists?
They are a group of psychologists and sociologists who relied on the scientific method for the study of
organizational behavior. They are engaged in the objective research of human behavior in organizations. They
attempted to keep their personal beliefs out of their work and hoped to build a science of organizational
It evolved out of the development of mathematical and statistical solutions to military problems during World
War II. After the war, quantitative techniques were moved into the business sector.
The quantitative approach to management includes applications of statistics, optimization models, information
models, and computer simulations. They have contributed most directly to management decision making,
particularly to planning and control decisions.
What Stimulated the Classical Approach?
The common thread in the ideas offered by Taylor, the Gilbreths, Fayol, and Weber was increased efficiency.
The world that existed in the late nineteenth and early twentieth century was one of high inefficiency. The
standardized practices offered by the classicists was a means to achieve that increased productivity. The
result: The application of scientific management principles contributed to raising the standard of living of
entire countries.
What Stimulated the Human Resources Approach?
It began in the 1930's. There was a backlash to the overly mechanistic view of employees held by the
classicists and the emergence of the Great Depression.
The classical view treated organizations and people as machines where the managers were the engineers. The
human resources approach offered managers solutions for lessening this alienation and for improving worker
productivity. Humanizing the workplace had become congruent with society's concerns at the time.
The mayor impetus to the quantitative approaches was World War II. After the war, business executives
became open to applying the techniques to their organizational decision making. They proved successful in
improving the quality of decisions and increasing profits.
By the late 1960's, course work in mathematics, statistics, and operations management had become required
components of most business school curricula. The new generation of managers would be knowledgeable in
such techniques as probability theory, linear programming, queuing theory, and games theory.
Fundamentals of Management, Stephen P. Robbins, Paul A. de Cenzo, 2a edicion, Prentice Hall, A1− A11,
Appendix A.