Asia Pacific University of Technology and Innovation

LEARNING OUTCOMES
After reading this chapter, I will be able to:
1. Understand the historical roots of contemporary
management theories and practices.

Chapter 2

Management Theories and

Approaches

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The Pre-modern Era Adam Smith’s Contribution To The Field Of

Management
• Ancient massive construction projects • Wrote the Wealth of Nations (1776)
– Advocated the economic advantages that organisations and
– Egyptian pyramids society would reap from the division of labor:
– Great Wall of China • Increased productivity by increasing each worker’s skill and
dexterity.
• Michelangelo the manager • Time saved that is commonly lost in changing tasks.
• The creation of labor-saving inventions and machinery.

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The Industrial Revolution’s Influence On Classical Contributions

Management Practices
• Industrial revolution • Classical approach
– Machine power began to substitute for human power – The term used to describe the hypotheses of
• Lead to mass production of economical goods the scientific management theorists and the
– Improved and less costly transportation systems general administrative theorists.
became available • Scientific management theorists
• Created larger markets for goods. – Fredrick W. Taylor, Frank and Lillian Gilbreth, and Henry
– Larger organisations developed to serve larger Gantt
markets • General administrative theorists
• Created the need for formalized management practices. – Henri Fayol and Max Weber

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Scientific Management Taylor’s Four Principles of Management

• Develop a science for each element of an individual’s work, which replaces

• Frederick W. Taylor the old rule-of-thumb method.
– The Principles of Scientific Management (1911) • Scientifically select and then train, teach, and develop the worker.
• Advocated the use of the scientific method to define the “one (Previously, workers chose their own work and trained themselves as best
best way” for a job to be done they could.)
– Believed that increased efficiency could be achieved • Heartily cooperate with the workers so as to ensure that all work is done in
by selecting the right people for the job and training accordance with the principles of the science that has been developed.
them to do it precisely in the one best way. • Divide work and responsibility almost equally between management and
workers. Management takes over all work for which it is better fitted than the
– To motivate workers, he favored incentive wage workers. (Previously, almost all the work and the greater part of the
plans. responsibility were thrown upon the workers).
– Separated managerial work from operative work.

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Scientific Management Contributors Administrative Management

• Frank and Lillian Gilbreth • General administrative theorists

– Bricklaying efficiency improvements – Writers who developed general theories of what
– Time and motion studies (therbligs) managers do and what constitutes good management
practice
• Henry Gantt
– Henri Fayol (France)
– Incentive compensation systems
• Fourteen Principles of Management: Fundamental or
– Gantt chart for scheduling work operations universal principles of management practice
– Max Weber (Germany)
• Bureaucracy: Ideal type of organisation characterized by
division of labor, a clearly defined hierarchy, detailed rules
and regulations, and impersonal relationships

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Fayol’s Fourteen Principles of Management Weber’s Ideal Bureaucracy

• Division of work • Centralization • Division of Labor

• Authority • Scalar chain
• Authority Hierarchy
• Discipline • Order
• Formal Selection
• Unity of command • Equity
• Formal Rules and Regulations
• Unity of direction • Stability of tenure of
• Subordination of the
personnel • Impersonality
individual • Initiative • Career Orientation
• Remuneration • Esprit de corps

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Human Resources Approach Human Resources Approach

• Robert Owen • Mary Parker Follett

– Claimed that a concern for employees was profitable – Recognized that organisations could be viewed from
for management and would relieve human misery. the perspective of individual and group behavior.
• Hugo Munsterberg • Chester Barnard
– Created the field of industrial psychology—the – Saw organisations as social systems that require
scientific study of individuals at work to maximize their human cooperation.
productivity and adjustment. – Expressed his views in his book The Functions of the
Executive (1938).

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Hawthorne Studies Human Relations Movement

• A series of studies done during the 1920s and • Based on a belief in the importance of employee
1930s that provided new insights into group satisfaction—a satisfied worker was believed to
norms and behaviors be a productive worker.
– Hawthorne effect • Advocates were concerned with making
• Social norms or standards of the group are the key management practices more humane.
determinants of individual work behavior.
– Dale Carnegie
• Changed the prevalent view of the time that
– Abraham Maslow
people were no different than machines.
– Douglas McGregor

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The Quantitative Approach Social Events That Shaped Management

Approaches
• Operations research (management science) • Classical approach
– Evolved out of the development of mathematical and – Desire for increased efficiency of labor intensive
statistical solutions to military problems during World operations
War II.
• Human resources approach
– Involves the use of statistics, optimization models,
– The backlash to the overly mechanistic view of
information models, and computer simulations to
employees held by the classicists.
improve management decision making for planning
and control. – The Great Depression.
• The quantitative approaches
– World War II

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The Process Approach

Past Current Future

• Management theory jungle (Harold Koontz)
– The diversity of approaches to the study of
management—functions, quantitative emphasis,
human relations approaches—each offer something
to management theory, but many are only managerial
tools.
• Planning, leading, and controlling activities are
circular and continuous functions of
management.

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The Systems Approach The Organization and

its Environment
• Defines a system as a set of interrelated and
interdependent parts arranged in a manner that
produces a unified whole
– Closed system : a system that is not influenced by
and does not interact with its environment
– Open system: a system that dynamically interacts
with its environment
– Stakeholders: any group that is affected by
organisational decisions and policies

EXHIBIT HM–4

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The Contingency Approach

• The situational approach to management that

replaces more simplistic systems and integrates
much of management theory
• Four popular contingency variables
– Organisation size
– Routineness of task technology
– Environmental uncertainty
– Individual differences

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