Chapter 2
Management Theories
Why Management History?
To understand where ideas came from.
To see the role of social, legal, political,
economic, technological factors in
developing management thought and
practice.
The Industrial Revolution
During the late 18th and early 19th centuries
1760 -1840م
• The Industrial Revolution results a major
turning point in human history;
• The Revolution that changed the world forever
• Industrial Revolution – a change from
making things by hand to making them in
factories.
Management Perspectives Over Time
Exhibit 2.1, p.44
2000
The Technology-Driven Workplace
1990 2010
The Learning Organization
1980 2010
Total Quality Management
2000
1970
Contingency Views
2000
1950
Systems Theory
1940 2000
Management Science Perspective
1990
1930
Humanistic Perspective
1890 1990
Classical
1940 2010
1870
Schools of Management Thought
Classical School
– Scientific management.
– Administrative Principles.
Behavioral School
– Human Relationships Approach
Management Science School
Recent Historical Development
Systems Theory
1. Scientific Management: Frederick Taylor
(1856-1915)
Frederick Taylor was an American mechanical
engineer who wanted to improve industrial efficiency.
He is considered as the father of scientific
management.
• Worked at Midvale Steel (beginning as a common
worker, chief engineer, in 6 years)
• Started with time study and motivation plans.
• Taylor wanted to reduce the time a worker spent on
each task by optimizing the way the task was done.
1. Scientific Management: Frederick Taylor
(1856-1915)
• Scientific Management as defined by Frederick
Taylor:
• The systematic study of the relationships
between people and tasks to redesign the
work for higher efficiency.
The 4 Principles
• Four Principles to increase efficiency:
1. Study the way the job is performed now &
determine new ways to do it.
2. Organize the new method into rules.
3. Select workers whose skills match the rules set in
Step 2.
4. Establish a fair level of performance and pay for
higher performance.
Scientific Management: summarize
• Contributions:
– Pay for performance.
– Careful examination of job tasks.
– Importance of training and selection.
• But……..* Problems
– Assumed workers were robot without social needs or
human needs.
– Assumed all individuals were the same.
2. Administrative Principles Theory:
Henry Fayol (1841–1925)
• Henri Fayol (1841- 1925) was a French mining
engineer.
• He was one of the most influential contributors
to modern concepts of management.
• Focus:
– Organization rather than the individual.
– described the management functions of planning,
organizing, coordinating, and controlling.
Fayol’s Principles
• Henri Fayol, developed a set of 14 principles:
1. Division of work: allows for job specialization.
2. Authority and Responsibility:
3. Unity of Command: Employees should have only one
boss.
4. Line of Authority: a clear chain from top to bottom of
the firm.
5. Centralization: the degree to which authority rests at
the very top.
Fayol’s Principles
6. Unity of Direction: One plan of action to guide the
organization.
7. Equity: Treat all employees fairly in justice and
respect.
8. Order: Each employee is put where they have the
most value.
9. Initiative: Encourage innovation.
10. Discipline: respectful employees needed.
Fayol’s Principles
11. Compensation of Employees : The payment system
contributes to success.
12. Stability of Employees : Long-term employment is
important.
13. General interest over individual interest: The
organization takes priority over the individual.
14. Common spirit: Share enthusiasm or loyalty to the
organization.
Fayol’s 14 Principles
1. Division of work 7. Equity
2. Authority and 8. Order
Responsibility 9. Initiative
10. Discipline
3. Unity of command
11. Compensation
4. Line of authority
12. Stability of Employees
5. Centralization
13. General interest over
6. Unity of Direction
individual interest
14. Common spirit
Behavioral Management School
• Focuses on the way a manager should personally
manage to motivate employees.
• Behavioral management theory is often called the
human relations movement because it addresses
the human dimension of work.
• The theorists who contributed to this school viewed
employees as individuals, resources, and assets to
be developed and worked with — not as machines,
as in the past.
Bureaucratic
Organization
(Max Weber)
• An ideal, intentionally rational, and very
efficient form of organization founded on
principles of logic, order, and legitimate
authority.
– Clear Division of Labor
– Well Defined Hierarchy of Authority
– Formal Rules and Procedures
– Impersonality
– Careers Based on Merit
16
Human Resource
Approaches
• Basic Assumption: People are Social and
Self-Actualizing.
• The Hawthorne Studies
– Established the human resource as an essential
concern for management, and one that has unique
properties.
– We learned that the nature of the Work Group should
be important.
– We learned about the tendency of people who are
singled out for special attention to perform as
anticipated merely because of expectations created
by the situation.
17
Management Science Theory
• Quantitative management :
– uses mathematical techniques, like linear
programming, modeling, simulation and chaos
theory
• Operations management :
– provides managers a set of techniques they can
use to analyze any aspect of an organization’s
production system to increase efficiency
Management Science Theory
• Total quality management :
– focuses on analyzing an organization’s input,
conversion, and output activities to increase
product quality
• Management information systems :
– help managers design systems that provide
information that is vital for effective decision
making
The System Theory
• What’s the system approach?
• Two basic types of the system: closed and
open
Closed systems are not influenced by and do
not interact with their environment.
open system dynamically interacts with its
environment.
• An organization is an open system
An Organization Is an Open System
• An organization is a system that interacts with and
depends upon its environment.
Organization’s stakeholders: any group that is affected by
organizational decisions and policies. The manager’s job is
to coordinate all stakeholders to achieve the
organization’s goals.
• Organizational survival often depends on successful
interactions with the external environment.
The Open-Systems View
– Inputs: the acquisition of external resources to
produce goods and services.
– Transformation: transforms the inputs into
outputs of finished goods and services.
– Output: the release of finished goods and
services to its external environment.
Maslow’s
Hierarchy-of-Needs Theory
• Abraham Maslow )1908-1970).
• Father of Humanistic Psychology.
• Maslow's hierarchy of needs theory is a
motivational theory in psychology containing
a five level model of human needs, often
shown as hierarchical levels within a pyramid.
Maslow’s
Hierarchy-of-Needs Theory
