MGT 101 | Ch. 2

Evolution of Management Theory

What are the different foundations of management theories?

1. Classical Viewpoint

   • Scientific Management

   • Bureaucratic Management

   • Administrative Management

2. Management Science Viewpoint

   • Quantitative Viewpoint

3. Humanistic Viewpoint

   • Behavioral Viewpoint

4. Contemporary Viewpoint

   • Systems Approach

   • Contingency Approach

   • Dynamic Engagement

This foundation of management theories focuses on rationality and making workers as efficient as possible.

Classical Viewpoint

What is the classical viewpoint on management all about?

rationality and making workers as efficient as possible

He is considered the Father of Scientific Management.

Frederick Taylor

He developed the 4 principles of scientific management.

Frederick Taylor

It is the use of scientific methods to determine the “one best way” to perform a job.

Scientific Management

What problem did Frederick Taylor’s theory aim to counter?

Soldiering: workers deliberately working below their full capacity

What are the four principles of scientific management according to Frederick Taylor?

1. Careful selection and training of workers

2. Cooperation between superior and workers

3. Proper division of work and responsibilities between management and workers

4. Use scientific methods to define the “one best way” for a job to be done

__ pioneered time and motion study.

Frank and Lilian Gilbreth

__ studied eliminating unnecessary motion and ways of reducing fatigue.

Frank and Lilian Gilbreth

__ invented a graphic aid for planning, scheduling, and control.

Henry L. Gantt

What are the contributions and limitations of scientific management?

Contribution: Techniques and tools in increasing worker productivity resulting in faster and more effective production lines

Limitations:

• Overlooked the social needs of people

• “Uniform” treatment of workers

• Treated men as just rational beings (economic man)

This management theory contributed techniques and tools in increasing worker productivity resulting in faster and more effective production lines.

Scientific Management

This management theory overlooked the social needs of people, treated workers uniformly and as just “rational” beings or economic men.

Scientific Management

Important figures in Scientific Management.

1. Frederick Taylor

2. Frank and Lilian Gilbreth

3. Henry L. Gantt

This management theory emphasizes the need for organization to operate in a rational manner.

Bureaucratic Management

A German sociologist who coined the term bureaucracy.

Max Weber

What are the characteristics of a bureaucratic organization according to Max Weber?

1. Specialization of labor - Each person has a specific job or role based on their skills and responsibilities.

2. Formal rules and procedures - Employees follow clear, written rules and standard procedures when doing their work.

3. Impersonality in applications of rules and sanctions - Rules are applied fairly and equally to everyone, regardless of personal relationships or favoritism.

4. Well-defined hierarchy - There is a clear chain of command showing who reports to whom and who has authority over whom.

5. Career advancement based on merit - Employees are promoted based on their skills, performance, qualifications, and achievements, rather than personal connections.

What does “specialization of labor” mean as a characteristic of a bureaucratic organization according to Max Weber?

practice of breaking down a large production process into smaller, distinct tasks assigned to different workers

What does “well-defined hierarchy” mean as a characteristic of a bureaucratic organization according to Max Weber?

There is a clear chain of command showing who reports to whom and who has authority over whom.

Important figure/s in Bureaucratic Management.

Max Weber

This management theory focuses on the principles that can be used by management to coordinate the internal activities of an organization as a whole.

Administrative Management

He is the Father of Classical Management Theory.

Henri Fayol

He developed the management process/functions and the 14 principles of management.

Henri Fayol

What are Fayol’s 14 principles of management?

1. division of labor

2. authority

3. discipline

4. unity of command

5. unity of direction

6. subordination

7. remuneration

8. centralization

9. scalar chain

10. order

11. equity

12. stability of tenure of personnel

13. initiative

14. esprit de corps

This principle of management according to Fayol means that specialization (mastery of the skill) increases output by making employees more efficient.

division of work

This Henri Fayol’s principle of management states that employees must obey and respect the rules that govern the organization.

Discipline

This Henri Fayol’s principle of management states that every employee should receive orders from only one superior.

unity of command

This Henri Fayol’s principle states that the organization should have a single plan of action to guide managers and workers.

unity of direction

This Henri Fayol’s principle states that the interest of any employee or group of employees should not take precedence over the interests of the organization.

subordination of individual interests to the general interest

Explain the principle of remuneration of management according to Henri Fayol.

Workers must be paid a fair wage for their services.

This Henri Fayol’s principle of management states that workers must be paid a fair wage for their services.

remuneration

Explain the principle of centralization of management according to Henri Fayol.

The degree to which subordinates are involved in decision making.

This Henri Fayol’s principle of management refers to the degree to which subordinates are involved in decision making.

Centralization

This Henri Fayol’s principle of management refers to the line of authority from top management to the lowest rank.

Scalar chain

This Henri Fayol’s principle of management states that managers should be kind and fair to their subordinates.

Equity

This Henri Fayol’s principle of management states that management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

stability of tenure of personnel

Explain the principle of stability of tenure of personnel of management according to Henri Fayol.

management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

Explain the principle of esprit de corps of management according to Henri Fayol.

Management should encourage team spirit to build harmony and unity within the organization.

This Henri Fayol’s principle of management states that promoting team spirit will build harmony and unity within the organization.

Esprit de corps

__ bridged the gap between the classical theorists’ concern about authority and behaviorists’ emphasis on worker’s needs.

Chester Barnard

This theory states that acceptance becomes easier when communication is clear, goals are consistent, actions meet people’s needs, and they feel capable of complying.

Acceptance theory of authority

He introduced the acceptance theory of authority.

Chester Barnard

He introduced the concept of informal organizations, which are unofficial relationships and social groups that naturally develop among employees.

Chester Barnard

Important figures in the Administrative Management

1. Henri Fayol

2. Chester Barnard

What is the humanistic viewpoint on management?

People are the most important asset of the organization and should be managed accordingly.

__ defined management as “getting things done through other people.”

Mary Parker Follet

__ stressed the importance of people rather than engineering techniques.

Mary Parker Follet

What did Mary Parker Follet emphasize in management?

the importance of people rather than engineering techniques

Mary Parker Follet identified these concepts about management.

• importance of functioning in groups

• importance of power within instead of power over in management-employee relations

• view of group behavior rather than individual only

What is the difference between “power within” and “power over”?

• power within = comes from working with and empowering others rather than controlling them

• power over = control or domination of others

An industrial psychologist who identified three areas to increase industrial productivity.

Hugo Munsterberg

What are Hugo Munsterberg’s three areas to increase industrial productivity?

• study human behavior to understand and improve employee motivation

• use of psychological tests to select and place employees where they can work most efficiently

• find ways to influence employee behavior so it supports management’s objectives.

These studies examined the effect of various lighting levels on worker productivity.

Elton Mayo’s Hawthorne studies

Who conducted the Hawthorne Studies?

Elton Mayo

What happened to productivity when lighting levels changed according to the Hawthorne studies by Elton Mayo? What did the results suggest?

Productivity increased despite changes in lighting intensity. Productivity is influenced by employee morale (attention, recognition, relationship) and not by physical working conditions.

What did the Hawthorne Studies shift attention toward?

The importance of employee morale (attention, recognition, relationship) and social factors in the workplace.

What is the Hawthorne Effect?

A psychological phenomenon where people change or improve their behavior because they know they are being watched or studied.

Who developed Theory X and Theory Y?

Douglas McGregor

What is Theory X of Douglas McGregor?

The belief that employees are naturally lazy or unmotivated

What is Theory Y of Douglas McGregor?

The belief that employees are self-motivated, responsible, and can be trusted

What are Maslow’s Hierarchy of Needs?

1. physiological

2. safety

3. social

4. esteem

5. self-actualization

Important figure/s in the humanistic viewpoint of management.

1. Mary Parker Follet

2. Hugo Munsterberg

3. Elton Mayo

4. Douglas McGregor

5. Maslow

This viewpoint on management focuses on techniques that managers use to improve resource allocation decisions.

Management Science Viewpoint

What does Management Science Viewpoint focus on?

techniques that managers use to improve resource allocation decisions

This involves applying statistics, optimization models, information models, computer simulations, and other quantitative techniques to management activities to improve decision making.

Quantitative Management Viewpoint

What are the three branches of Quantitative Management Viewpoint?

• management science

• operations management

• management information system

This branch of Quantitative Management Viewpoint is aimed at increasing decision-making effectiveness using sophisticated math models and statistical methods.

management science

This branch of Quantitative Management Viewpoint refers to the field of expertise that is primarily responsible for managing production and delivery of other organization’s products and services.

operations management

This branch of Quantitative Management Viewpoint is the field of management that focuses on designing and implementing a computer-based information system for use by management.

management information system

This management theory focuses on what is happening in the external environment of the organization.

contemporary viewpoint

What does the Contemporary Viewpoint of management focus on?

What is happening in the external environment of the organization

A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.

system

2 basic types of systems

• closed

• open

This contemporary viewpoint theory views the whole organization as a system composed of inputs, transformation processes, outputs, and feedback.

system theory

System Theory views the whole organization as a system with these components.

• inputs

• transformation processes

• outputs

• feedback

Are organizations self-contained according to the Systems Approach?

No. Organizations depend on their external environment for inputs and as an outlet for their outputs.

This contemporary states that there is no single best way to manage; the appropriate management action depends on the situation.

contingency approach

This contemporary viewpoint states that managers must rethink traditional management approaches because of constant and rapid changes in time, technology, and human relationships.

dynamic engagement approach

An organization where everyone solves problems, experiments, adapts, and continuously improves to help the organization learn, grow, and achieve its goals.

learning organization

What is the essential idea of a learning organization?

problem solving

What type of structure does a learning organization use?

A team-based structure where employees work together to solve problems and improve processes.

Important concepts in a learning organization.

• problem solving

• team-based structure

• employee empowerment

• open information

Conducting business activities electronically through links with customers, partners, suppliers, and other business groups.

E-business

Conducting business exchanges and transactions electronically, such as buying and selling online.

E-commerce

Types of E-commerce

• B2B (Business to business)

• B2C (Business to customer)

• C2C (Customer to customer)

Contributions of the classical viewpoint to management.

• Scientific Study of Work: Frederick Taylor emphasized the importance of scientific approach to find the single best way to perform a job. Frank and Lilian Gilbreth pioneered time-and-motion studies to analyze tasks and eliminate unnecessary motion and fatigue.

• Administrative Principles: Henri Fayol introduced core management functions alongside 14 universal principles of management.

• Bureaucratic Structures: Max Weber emphasized a rational organization design featuring clear hierarchies, formal authority, and standardized operating rules.

• Labor Specialization: Work was broken down into specialized, repeatable tasks to increase output and avoid the inefficiencies of multitasking.

• Performance-Based Incentives: Established the practice of using economic rewards and higher wages to motivate workers and boost productivity

Contributions of the behavioral viewpoint to management.

• Workers are social beings influenced by attention, empathy, and workplace culture, as shown by the Hawthorne Studies.

• Introduced Maslow’s Hierarchy of Needs and McGregor’s Theory X and Y to explain employee motivation and management assumptions.

• Promoted employee involvement, empowerment, and two-way communication over autocratic control.

• Laid the foundation for teamwork, conflict resolution, adaptive leadership, and psychological safety.

Contributions of the quantitative viewpoint to management.

• provides quantitative aids to decision-making

• develops quantitative tools to assist in providing products and services

• pioneers new computer-based info system for management

• provides quantitative management tools (statistics, linear programming, queueing theory, simulation, forecasting, inventory moderling)

Contributions of the contemporary viewpoint to management.

• emphasizes visualizing organizations as systems of connected parts

• importance of environment and feedback to org success

• management should adapt to the situation (no best way to manage)

• challenges one to see org and management as integral part of modern global society