LESSON 2

History of Management

TOPICS: LEARNING OUTCOMES:

2.1 Highlights to the History of  Discuss the highlights of management’s
Management history
2.2 What is Scientific  Explain the difference between
Management? scientific, bureaucratic, humanistic, and
2.3 What is Bureaucratic other management approaches
Management?  Identify the current developments in
2.4 What is Humanistic management practices
Management?
2.5 Other Management
Approaches
2.6 Current Developments in
Management Practices

Highlights to the History of Management

The concept of management has been around for thousands of years. According to Pindur, Rogers, and
Kim (1995), elemental approaches to management go back at least 3000 years before the birth of Christ, a time in
which records of business dealings were first recorded by Middle Eastern priests. Socrates, around 400 BC, stated
that management was a competency distinctly separate from possessing technical skills and knowledge (Higgins,
1991). The Romans, famous for their legions of warriors led by Centurions, provided accountability through the
hierarchy of authority. The Roman Catholic Church was organized along the lines of specific territories, a chain
of command, and job descriptions. During the Middle Ages, a 1,000 year period roughly from 476 AD through
1450 AD, guilds, a collection of artisans and merchants provided goods, made by hand, ranging from bread to
armor and swords for the Crusades. A hierarchy of control and power, similar to that of the Catholic Church,
existed in which authority rested with the masters and trickled down to the journeymen and apprentices. These
craftsmen were, in essence, small businesses producing products with varying degrees of quality, low rates of
productivity, and little need for managerial control beyond that of the owner or master artisan.
The Industrial Revolution, a time from the late 1700s through the 1800s, was a period of great upheaval
and massive change in the way people lived and worked. Before this time, most people made their living farming
or working and resided in rural communities. With the invention of the steam engine, numerous innovations
occurred, including the automated movement of coal from underground mines, powering factories that now mass-
produced goods previously made by hand, and railroad locomotives that could move products and materials
across nations in a timely and efficient manner. Factories needed workers who, in turn, required direction and
organization. As these facilities became more substantial and productive, the need for managing and coordination
became an essential factor. Think of Henry Ford, the man who developed a moving assembly line to produce his
automobiles. In the early 1900s, cars were put together by craftsmen who would modify components to fit their
product. With the advent of standardized parts in 1908, followed by Ford’s revolutionary assembly line
introduced in 1913, the time required to build a Model T fell from days to just a few hours (Klaess, 2020). From a
managerial standpoint, skilled craftsmen were no longer necessary to build automobiles. The use of lower-cost
labor and the increased production yielded by moving production lines called for the need to guide and manage

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these massive operations (Wilson, 2015). To take advantage of new technologies, a different approach to
organizational structure and management was required.

The Scientific Era – Measuring Human Capital

With the emergence of new technologies came demands for increased productivity and efficiency. The desire to
understand how to best conduct business centered on the idea of work processes. That is, managers wanted to
study how the work was performed and the impact on productivity. The idea was to optimize the way the work
was done. One of the chief architects of measuring human output was Frederick Taylor. Taylor felt that increasing
efficiency and reducing costs were the
primary objectives of management.
Taylor’s theories centered on a formula
that calculated the number of units
produced in a specific time frame
(DiFranceso and Berman, 2000). Taylor
conducted time studies to determine how
many units could be produced by a
worker in so many minutes. He used a
stopwatch, weight measurement scale,
and tape measure to compute how far
materials moved and how many steps
workers undertook in the completion of
their tasks (Wren and Bedeian, 2009).
Examine the image below – one can
imagine Frederick Taylor standing
nearby, measuring just how many steps
were required by each worker to hoist a
sheet of metal from the pile, walk it to the
machine, perform the task, and repeat,
countless times a day.  Beyond Taylor,
other management theorists including
Frank and Lilian Gilbreth, Harrington
Emerson, and others expanded the concept of management reasoning with the goal of efficiency and consistency,
all in the name of optimizing output. It made little difference whether the organization manufactured automobiles,
mined coal, or made steel, the most efficient use of labor to maximize productivity was the goal.
            
The necessity to manage not just worker output but to link the entire organization toward a common objective
began to emerge. Management, out of necessity, had to organize multiple complex processes for increasingly
large industries. Henri Fayol, a Frenchman, is credited with developing the management concepts of planning,
organizing, coordination, command, and control (Fayol, 1949), which were the precursors of today’s four basic
management principles of planning, organizing, leading, and controlling.
Employees and the Organization
With the increased demand for production brought about by scientific measurement, conflict between labor and
management was inevitable. The personnel department, forerunner of today’s human resources department,
emerged as a method to slow down the demand for unions, initiate training programs to reduce employee
turnover, and to acknowledge workers’ needs beyond the factory floor. The idea that to increase productivity,
management should factor the needs of their employees by developing work that was interesting and rewarding
burst on the scene (Nixon, 2003) and began to be part of management thinking. Numerous management theorists
were starting to consider the human factor. Two giants credited with moving management thought in the direction
of understanding worker needs were Douglas McGregor and Frederick Herzberg. McGregor’s Theory X factor
was management’s assumption that workers disliked work, were lazy, lacked self-motivation, and therefore had to
be persuaded by threats, punishment, or intimidation to exert the appropriate effort. His Theory Y factor was the
opposite. McGregor felt that it was management’s job to develop work that gave the employees a feeling of self-
actualization and worth. He argued that with more enlightened management practices, including providing clear

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goals to the employees and giving them the freedom to achieve those goals, the organization’s objectives and
those of the employees could simultaneously be achieved (Koplelman, Prottas, & Davis, 2008).

The concept behind McGregor, Herzberg, and a host of other management theorists was to achieve managerial
effectiveness by utilizing people more effectively. Previous management theories regarding employee motivation
(thought to be directly correlated to increased productivity) emphasized control, specialized jobs, and gave little
thought to employees’ intrinsic needs. Insights that considered the human factor by utilizing theories from
psychology now became part of management thinking. Organizational changes suggested by management
thinkers who saw a direct connection between improved work design, self-actualization, and challenging work
began to take hold in more enlightened management theory.
The Modern Era
Koontz and O’Donnell (1955) defined management as “the function of getting things done through others (p. 3).
One commanding figure stood above all others and is considered the father of modern management (Edersheim,
(2007). That individual was Peter Drucker. Drucker, an author, educator, and management consultant is widely
credited with developing the concept of
Managing By Objective or MBO (Wren
& Bedeian, 2009). Management by
Objective is the process of defining
specific objectives necessary to achieve
the organization’s goals. The beauty of
the MBO concept was that it provided
employees a clear view of their
organization’s objectives and defined
their individual responsibilities. For
example, let’s examine a company’s
sales department. 

The 21st Century

Managers in the 21st century must confront challenges their counterparts of even a few years ago could hardly
imagine. The ever-growing wave of technology, the impact of artificial intelligence, the evolving nature of
globalization, and the push-pull tug of war between the firm’s stakeholder and shareholder interests are chief
among the demands today’s managers will face.

What is Scientific Management?

Scientific management is a theory of management that analyses and synthesizes workflows. Its main objective is

improving economic efficiency, especially labour productivity. It was one of the earliest attempts to apply
science to the engineering of processes to management. Scientific
management is sometimes known as Taylorism after its pioneer, Frederick
Winslow Taylor.
Taylor began the theory's development in the United States during the
1880s and 1890s within manufacturing industries, especially steel. Its peak
of influence came in the 1910s. Although Taylor died in 1915, by the 1920s
scientific management was still influential but had entered
into competition and syncretism with opposing or complementary ideas.
Although scientific management as a distinct theory or school of thought
was obsolete by the 1930s, most of its themes are still important parts
of industrial engineering and management today. These include: analysis;
synthesis; logic; rationality; empiricism; work ethic; efficiency through

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elimination of wasteful activities (as in muda, muri and mura); standardization of best practices; disdain for
tradition preserved merely for its own sake or to protect the social status of particular workers with particular
skill sets; the transformation of craft production into mass production; and knowledge transfer between workers
and from workers into tools, processes, and documentation.

The definition of scientific management is the use of scientific methods to explain the ''best'' and most efficient
way to complete a task. Scientific management theory is different from other management theories in that it
provides tested and scientific ways for workers to complete tasks; it focuses on specifics of actual work tasks and
their efficiency more than other management theories. The significance of scientific management theory is that it
has successfully and widely increased productivity in many businesses. Most large-scale factories and restaurants
today utilize scientific management theory to help keep high productivity on a consistent basis.
Who is the father of scientific management? The creator of scientific management theory was Frederick Winslow
Taylor, who, in 1911, published Principles of Scientific Management, changing many businesses in the United
States and worldwide.
Taylorism and the Rise of Scientific Management Theory
Frederick Taylor developed the scientific management theory and its principles more than twenty years after
seeing the inefficiency of workers and the lack of understanding of managers about how to improve the output of
workers when he was a foreman and mechanical engineer at steel factories in Pennsylvania. Taylor was
determined to increase the efficiency of production. After developing this theory and testing it, he published his
book on it and consulted with many businesses. All of this helped to make scientific management theory
widespread throughout companies in the United States. Scientific management utilizes time and motion studies,
quantitative analysis, and scientific and engineering principles as tools to find the ''best'' way for tasks to be
completed.
The four main principles or steps in order of scientific management are:
1. Develop a scientifically-based method for each part of an individual's work to replace the non-scientific rule-of-
thumb method (which meant methods that weren't scientifically based or necessarily efficient and were just
traditional methods managers told their workers).
2. Select employees strategically, based on their individual skills and abilities, and then train them on the methods
to do the specific tasks required for their jobs, utilizing the tools and equipment needed.
3. Monitor and supervise employees to ensure they are following accurately the exact methods they have been
trained in to perform their jobs.
4. Divide work so that management does the work for which it is better suited and so that workers are completing
their tasks.
Productivity in many factories and other businesses measurably increased after the ''rule of thumb'' method was
discarded and the principles of scientific management, including the rest periods needed to keep workers from
getting excessively fatigued, were applied.

What is Bureaucratic Management?

Bureaucratic management is a management technique which uses a system of rules and procedures to organize
and control the work of an organization. It is a type of managerial control in which the organization’s structure
provides a clear, detail instructions on how tasks are carried out. Bureaucracy also includes rigid hierarchies that
lack transparency and feedback.

In 1930, Max Weber coined this term, as a criticism of government bureaucracies. It has been used to describe
both public sector bureaucracies such as the military, education, judicial and health systems and private sector
bureaucracies such as the modern business corporation.

According to Weber, bureaucracy is a form of rationalization where the inputs (what humans do) and outputs
(resulting in economic value) are separated from each other, making it difficult for humans to see practical
consequences of their actions.

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Six Rules of Bureaucracy
While describing the concept of Bureaucracy, Max Weber identified six characteristics or rules of a bureaucracy.

Characteristics of the
Description
Bureaucracy

Hierarchical Management Each level controls the levels below and is controlled by the level above. Authority
Structure and responsibilities are clearly defined for each position.

Tasks are clearly defined and employees become skilled by specializing in doing
Division of Labor
one thing. There is a clear definition of authority and responsibility.

Employee selection and promotion are based on experience, competence, and

Formal Selection Process  technical qualification demonstrated by examinations, education, or training. There
is no nepotism.

Management is separate from ownership, and managers are career employees.

Career Orientation
Protection from arbitrary dismissal is guaranteed.

Formal Rules and Rules and regulations are documented to ensure reliable and predictable behavior.
Regulations Managers must depend on formal organization rules in employee relations.

Rules are applied uniformly to everyone. There is no preferential treatment or

Impersonality
favoritism.

Weber thought bureaucracy would result in the highest level of efficiency, rationality, and worker satisfaction.
Also, the term “bureaucracy” has taken on negative connotations. It reflects with excessive paperwork, apathy,
unresponsiveness, and inflexibility.

What is Humanistic Management?

As you’ve probably deduced from the name, humanistic management theory places a great emphasis on
interpersonal relationships. An earlier section discussed scientific management and how it focused on productivity
and reducing costs by developing efficiency standards based on time and motion studies. Its critics took issue with
scientific management’s emphasis on quotas and standards that were the same for all workers.
Very little evidence exists that the new quotas set for workers were unreasonable or that labourers who
could not meet that quota were routinely fired. But concern was expressed by workers who complained about
lower standards of workmanship and lower wages under what was called the set-piece system. Labour unions
began addressing the growing fear of the workers that all but an elite few would soon be out of work. Even the
U.S. government got involved in the conflict between managers and workers, calling on Frederick Taylor to
testify before Congress about the aims of his proposals. It was out of this context that a new management theory
evolved that examined social rather than economic factors. The humanistic approach looked to the individual
worker and group dynamics rather than to authoritative managers for effective control.

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 Other Management Approaches

Administrative Approach to Management

The father of Administrative or Management Process Theory was Henri Fayol. In his early text, Administration
Industrielle et Generale, he proposed several managerial functions as categories for all managerial activities. The
functions include:

 Planning
 Organizing
 Commanding
 Coordinating
 Controlling
This framework evolved into the highly-influential P-O-L-C (Plan, Organize, Lead, Control) framework for
management functions. The Coordinating and Controlling functions collapsed into Leadership. 
Fayol also contributed to the understanding of managerial duties through his text, Fayol's 14 Principles of
Management. 
Henri Mintzberg, in his text The Nature of Managerial Work, added to the body of administrative management
theory by proposing a framework for the Role of Managers. 
He categorizes the roles of managers as follows:

 Interpersonal
 Figurehead
 Supervisor
 Liaison
 Informational
 Monitor
 Disseminator
 Spokesperson
 Decisional
 Entrepreneur
 Disturbance Handler
 Resource allocator
 Negotiator

Quantitative Approach to Management

The quantitative approach to management applies mathematical models, information and optimization models,
computer simulations, and other quantitative techniques to managerial decision-making. The primary branches of
quantitative management theory include:

 Management Science- Under the umbrella of management science, there are a number of
recognized disciplines:
 Operations Management - The management of functional processes employed in delivering the
company's value proposition.
 Quantitative Management - This approach focuses on the use of data analysis in management
decision making.
 Total Quality Management - This is an efficiency and waste reduction approach to management
processes and decision making.
 Management Info Systems - This field includes the use of technological and quantitative
methods for the observation, collection, organization, evaluation, and dissemination of
information across and throughout an organization.
 Systems Theory - An organization is a system consisting of a number of interdependent parts
functioning as a whole for some purpose. These parts might include: inputs, a transformation

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 process, outputs, feedback, and the environment. An organization is generally considered to be
open and organic with the subpart or subsystem interacting.
 Contingency Theory - This is a decision-making theory of management. The behavior of one
sub-unit of an organization is dependent on its environment and relationship to other units or
sub-units that have some control over the sequences desired by that sub-unit.

Current Developments in Management Practices

We don’t yet have the answers to most of these questions. No “grand theories” like those we have discussed
previously in this module have emerged to address these new challenges. That is not to say that management has
not responded; it has, in two ways:

 Management has become more specific with the formation of different disciplines. Managers
now focus on specific aspects of organizational management: operations management, financial
management, marketing management, human resource management, etc. By limiting the number
of factors and issues they must deal with, managers can develop practices that address the
specific issues they face in their discipline.
 Management has also become more general. Managers are not provided with an instructional
manual that tells them how to manage. Instead, they are given a toolbox of different theories and
practices. Effective managers need to know what tool to use and how to use it in different
circumstances.

Let us consider some current developments in management.

Operations Management
Operations management is concerned with all of the physical processes involved in producing and
delivering goods and services to customers. Operations management is the “guts” of a manufacturing or service
company. It is concerned with all aspects of converting materials and labor into goods and services as efficiently
as possible. Operations managers must work closely with every department in the business to ensure that products
are manufactured as efficiently as possible. The same forces that are transforming organizations and management
are transforming all aspects of operations management, from design to production.
Operations managers are involved with the initial product design to incorporate features that facilitate
production. Sometimes small changes that don’t affect function, such as the number of different types of screws
used in an assembly, can have a significant impact on production costs. Today, many manufacturing firms are
using computer-aided design that will translate design plans directly into instructions for computer-controlled

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machinery and robotics. Operations managers also manage the supply chain to find the best sources for high-
quality materials and supplies at the lowest cost. Operations managers have become international operations
managers, as supplies come from anywhere in the world and manufacturing can be done anywhere in the world.
Operations managers are also
responsible for materials inventory. This
consists of materials that will be used in
production or for performing services.
Some amount of inventory is needed to
prevent delays in production or servicing.
The worst thing that can happen to an
auto manufacturer is to have an assembly
line stop because of a shortage of a basic
part, such as spark plugs or tires. On the
other hand, maintaining inventories is a
significant cost for companies, so they
want to minimize the amount of inventory
on hand. Operations managers must
balance the need for maintaining
sufficient inventory with the need for
reducing costs. They now schedule
deliveries and manage inventory using
techniques such as just-in-time to optimize the amount of inventory on hand. This frequently involves developing
long-term, cooperative partnerships with suppliers. Inventory management is a huge concern for Amazon, for
instance, which maintains an inventory of millions of products. It has developed specialized techniques to
maintain enough inventory to avoid lost sales without holding costly excess inventory.
All of these activities support operation management’s main function: the manufacturing of products or
the delivery of services. Operations managers must be concerned not only with cost and quantities but also be
responsible for delivering quality. They design and supervise production processes and service delivery using
modern methods such as lean manufacturing and Six Sigma. Six Sigma is a systematic set of practices used to
reduce defects or complaints. The goal of Six Sigma is fewer than 3.4 defects per one million parts produced,
transactions performed, or services delivered.
Finally, operations management works with marketing and sales to make sure goods and services are
delivered where and when they are needed. They use sophisticated technology, such as point-of-sale data
collections and integrated ordering systems, to forecast demand for products and services. This information is
feedback through the entire system, from ordering materials and supplies to scheduling production. Operations
management is responsible for making sure everything and everyone is working together to deliver what the
customer expects.

ASSESSMENT

Chapter quiz

RUBRICS FOR WRITTEN OUTPUT

This criterion shall include the reliability and ingenuity of
the output. Its reliability shall be evaluated based on the
Content 50%
truthfulness, while ingenuity indicates the originality and
creativity of the incorporated ideas and concepts.
This criterion encompasses the ways how the ideas and
Organization of Ideas concepts are presented. Coherence and structure of the 30%
content are the focus of the criterion.
This criterion shall include the grammatical correctness,
Grammar & Mechanics 20%
format and use of punctuations.

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TOTAL 100%

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