DEVELOPMENT OF

MANAGEMENT
THOUGHTS

Lecture - 3
 CLASSICAL THEORY

The Industrial Revolution - transition to new manufacturing

processes - period from 1760 to sometime between 1820 and
1840

Hand production methods to machines production

Textiles were the dominant industry and were first to use

modern production methods
 EFFECT

The invention of machines to produce goods in the 19th

century drastically improved productivity

The lower price resulted in a greater demand for products and

thus a greater need for more factories and workers.

Managers continued to search for ways to improve

productivity

Increase quality of their products

Improve employee/manager relationships and increase

efficiency.
THREE BRANCHES

Classical Scientific
Management

Classical
Administrative
Management

Bureaucratic
Management
 SCIENTIFIC MANAGEMENT-
F.W.TAYLOR

As a young engineer working for

Midvale Steel Company in the late
1800s, Frederick Taylor began to
recognize the shortcomings of
systematic management practices.

He attributed these issues to

three things:
 SCIENTIFIC MANAGEMENT-
F.W.TAYLOR

First, employees believed that if they were more productive,

fewer jobs would be needed, and thus their job might be in
danger

Second, employees did not have an incentive to go above and

beyond

Third, workers wasted much of their time using less-than-

optimal methods for completing work
 FOUR PRINCIPLES OF SCIENTIFIC
MANAGEMENT

Replace working by rule of thumb,

(ie, belief, guess or estimate) and instead
use the scientific method to study work
and determine the most efficient way to
perform specific tasks.

Rather than simply assign workers to just

any job, match workers to their jobs
based on capability and motivation,
and train them to work at maximum
efficiency.
 FOUR PRINCIPLES OF SCIENTIFIC
MANAGEMENT

Monitor worker performance, and

provide instructions and supervision to
ensure that they're using the most
efficient ways of working.

Allocate the work between managers

and workers so that the managers spend
their time planning and training, allowing
the workers to perform their tasks
efficiently.
 DRAWBACKS

Employees were dissatisfied with their current working

conditions

Did not appreciate the social context of work and needs of

workers

Which effected productivity adversely

Many lacked the necessary training to do their work

efficiently.

Did not acknowledge variance among individuals

 ADMINISTRATIVE THEORY
HENRY FAYOL

Fayol proposed that any industrial

undertaking had six functions :- technical;
commercial; financial; security;
accounting; and managerial.

Of these, he believed the managerial

function, to forecast and plan, to
organize, to command, to coordinate, and
control, to be quite distinct from the
other five.
 FAYOLS PRINCIPLES

Fayol developed a set of 14 principles: -

1. Division of work;
2. Authority and Responsibility;
3. Discipline;
4. Unity of Command;
5. Unity of Direction;
6. Subordination of Individual to General Interest;
7. Remuneration of Personnel;
 FAYOLS PRINCIPLES

8. Centralization;
9. Scalar Chain of Authority;
10. Order;
11. Equity;
12. Stability of Tenure of Personnel;
13. Initiative; and
14. Esprit de Corps (Team Spirit)

Fayol's views on management remained popular throughout a

large part of the 20th century.
 BIRTH OF BUREAUCRACY

During 1800s, European organizations were managed on

personnel, family basis

Employees loyal towards a single individual

Resources used to realize individual desires

Organizations managed on an impersonal, rational basis is

known as bureaucracy
 BUREAUCRACY - MAX WEBER

Structure and design of organisation having

a hierarchy of authority, formalised rules
and regulations that serve to guide the
coordinated functioning of an organization.

Management considered as a chain of inter-

related functions and performed in a
sequence.

Learning the principles of management is

done through the past experiences of
managers