Chapter 2: Evolution of Management Theory

History of Management
Managers today have wrestled with the same problems and issues that
business executive had confronted with thousands of years ago.
In 1100 B.C., the Chinese used the four basic of management functions:
planning, organizing, leading, and controlling.
Classical Approaches:
The Systematic management approach attempted to build specific
guidelines and procedures into operations to ensure coordination.
Taylor introduced several approaches to implement scientific management.
One of the techniques is the use of the piece rate system wherein workers
receive additional pay for every additional output produced in excess of the
quota or standard level of output. The second technique, time and motion
studies, divides a task into basic movement.
Aside from Taylor, other advocators of scientific management were Henry
Gantt, and Frank and Lillian Gilberth.
Meanwhile, Henri Fayol introduced administrative management which
emphasized the perspective of senior managers as administrators. He identified
14 principles of management and the five functions: planning, organizing,
commanding, and coordinating, and controlling.
The 14 Principles of Management
1. Division of work
2. Authority
3. Discipline
4. Unity of command
5. Unity of direction
6. Predominance of general interest
7. Remuneration
8. Centralization
9. Scalar chain
10.Order
11.Equity

12.Stability and tenure of personnel

13.Initiative
14.Esprit de corps

Other contributors of administrative management are Chester Barnard and

Mary Parker Follet. Barnard, a former president of the New Jersey Bell
Telephone Co., published The Functions of the Executive in 1938. It highlighted
the major functions of the senior executive: formulate the organizations
mission, hire key employees, and maintain organizational communication.
While Follet wrote Dynamic Organization, which emphasized the ever changing
situation that managers have to deal with.
Contemporary Management Theories
The more contemporary approaches to management are quantitative
management, organizational behaviour, system theory and the contingency
theory.

A. Quantitative Management allows for developing quantitative

approaches such as statistics and computer simulations to arrive at a
management decision.
Two (2) main branches of quantitative management are:
1. Management science
2. Operation management
B. Organizational Behavior is the study of human behaviour at work.
C. Systems Theory explains how interrelated parts operate together to
achieve a common purposes.

Contingency Theory
Contingency perspective argues that universal theories cannot be applied
to organizations because each organization has unique characteristics and
different problem and challenges that it confronts with.

With contingency theory, there is a fit between the organizations

structure, size, technology, and the requirements of the environment.
Size this refers to the number of personnel, capacity, outputs (sales,
customers), and resources (wealth) of an organization.
Technology/Task is major factors of organizational structure in contingency
theory.
Unit production there is companies that produce only one type of product: a
shipbuilding corporation or a furniture maker.
Mass production companies involved in mass production produce high
volumes of identical products.
Continuous production companies in this line of business usually produce
liquids and powders.
Environment
1. Adaption organizations actively adapt to their environments.
2. Natural selection it is but natural for new organizations to fail during
the first few years.
3. Dependence every company is dependent on suppliers and customers
for raw material and profits.
The four (4) principles of scientific management
1. Replace rule-of-thumb methods with those that are scientifically proven.
2. Select, train, and develop each worker based on scientific methods.
3. Cooperate with the workers to ensure that scientific methods are being
observed and implemented
4. Divide work almost equally between managers and workers to ensure
that managers apply the scientific management principles in planning
while the workers perform the tasks using scientific methods.

Theory of authority and Theory of Incentives

Two (2) of Bernards theories these are both seen from the context of
communication, guided by some essential rules:

 Everyone should know the channels of communication

Everyone should have access to the formal channels of communication
Lines of communication should be short and direct
In the theory of authority, communication becomes authoritative when it
rests on the subordinate rather than on the boss.
In the theory of incentives, Barnard looked at two ways of convincing
subordinates to cooperate: tangible incentives and persuasion.
Barnard emphasized the following:
1. Presence of natural groups in which social aspects take precedence over
functional organizational structures;
2. Emphasis on upward communication, whereby communication is twoway, from worker to chief executive and vice versa.
3. Need for a good and cohesive leadership to communicate goals and
ensure effective decision-making.
Basic Dimension in Organizations
An organization is a formal group of people with one or more shared goals.
Structural Dimension
1.
2.
3.
4.
5.
6.

Centralization
Formalization
Hierarchy
Routinization
Specialization
Training

Contextual Dimensions
1.
2.
3.
4.
5.

Culture
Environment
Goals
Size
technology