CHAPTER TWO

MANAGEMENT THOUGHT
INTRODUCTION
RATIONALITY OF STUDYING MANAGEMENT THOUGHT
The formal study of management theory is the result
of the twentieth century. And different contributors
contributed their share to management theory as a
separate discipline.
The purpose of studying various schools of
management is to enable you to recognize and
appreciate how developments in the field of
management could contribute to current practices.
• To choose appropriate management styles. During the brief
history of management as a discipline a number of more
separate schools of management thought have emerged, some
are broad, and others are narrowed in scope” (Dejon, 1978).
• Firstly, people are at the helm of affairs and people are of
prime importance, in all thinking about management. There
have been different views about the nature of people’s impact
on organizations.
• Secondly, there were some historical settings in which
certain ideas and approaches developed.
• Thirdly, there are many theories and approaches to
management and each has some utility and some limitations.
Hence, there is no single ‘best’ theory of management.
• Today’s management is both a reflection and a reaction to
past management theories.
 2. Definition of management thought

• Management thought defined as the acquiring

knowledge, thinking and concepts of different
authors about the basics theories of management.
• Management thought is the gathering
knowledge about origin of management, thinking
proper and foundation of management research of
different anthers about the basic concepts of
management.
 2.2. Early Milestones in Management
(Historical Perspective)
The history of management extends to several
thousand years in to the past. However, it is only
since the late 19th century, that management is
considered as a formal discipline.
In other words, the practice of management is as
old as the human race but its theories and
conceptual frameworks are of recent origin.
Yet most of the contemporary management
thoughts are is in twentieth century phenomenon.
Early example of development and use of
management principles is recorded:
 In Egypt as early as 2900 BC at time of building pyramids.
 Other works such as Middle Eastern Ziggarats, the Chinese
Great Wall,
• Middle American pyramids and Persian roads are cited for
early use of management.
• Similarly the Bible has a reference to the fact that Moses had
hired his father-in-law as the first management consultant to
help design the organization through which Moses lead the
Hebrews out of Egypt and governed them.
• Management ideas were also developed in China, Greek and
Roman empires.
• In the Middle Ages which was known for its fighting power and
production facilities, The early ‘autocratic period’ of
management is characterized by the use of strategies like ‘fear of
punishment ,fear of God’, absolute authority, coercion and
force on the human side of management.
In the 16th century Machiavelli wrote ‘The Prince’ in an
attempt to gain favor with the ruler of an Italian city states and
described the way that a good prince or leader should act. He
propounded two basic approaches namely, ‘love approach’
and ‘fear approach’ as a basis for leadership and
administration.
Four important principles setup by Machiavelli are
concerning:
 Mass consent,
 Cohesiveness,
 Will to survive and
 Leadership
these are only some of management thought in early history.
Most of them needed to be refined and synthesized through
sound theoretical and conceptual frameworks known as
management principles.
 Evolution of Management
Thought

EARLY NEO - CLASSICAL

CLASSICAL MODERN
CONTRIBUTORS MANAGEMENT ERA MANAGEMENT
MANAGEMENT ERA
( Pre Scientific Era )

Quantitative
Scientific Human
Approach
Management Relations
Approach

Systems
Administrative
Behavioural Approach
Management
Science
Approach
Contingency
Bureaucratic
Approach
Management
Source: Own reference 2022
( Max Weber )
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 1. Pre-classical Approach of
Management
• Pre classical management concepts refer to
the early theories and principles that emerged
before the classical management theories were
developed.
• These concepts laid the foundation for
understanding and managing organizations, and
they focused on different aspects of
management such as efficiency, productivity,
and coordination.
• Pre-Classical Contributions A number
of individuals in the pre-classical
period of the middle and late 1800s
offered ideas that laid the groundwork
for subsequent, broader inquiries into
the nature of management.
• Among the principal pre-classical
contributors are Robert Owen, Charles
Babbage and Henry R Towne.
 The Early Management
I. RobertPioneers
Owen (1771-1858 AD).
(Human Resource Management Pioneer)
A successful British entrepreneur Progressive
industrialist who recognized need for good overall
management of an organization’s human resources.
Working as a manager of Cotton Mills Company in Sco
tland, Robert Owen was concerned about the poor
working and living conditions of workers. As a result,
he placed great importance on ensuring that the living
machine should be treated with kindness and
sufficiently supplied with the necessities of life.
As a result he:
 Tried to improve the working conditions in his factory;
 Provided meal, housing and marketing facilities to the
employees in the factory;
 Reduced the working hour from 13 to 10
 ½ hours; and
 Refused to hire children below-the age of 10 year
The mill employed 400 to 500 young children, who
worked thirteen hours long per day.
Owen tried to improve the living conditions of employees
by upgrading streets, houses, sanitation and educational
system in Lanark.
He felt the workers should be treated with kindness and
supplied with sufficient quantities of necessities for life.
Robert Owen contributions to organization behavior
and organization theory are:-
He advocated for a change in the attitude of
industrialists toward workers
He believed that winning the confidence of workers
by improving their living condition is important to get
cheaper laborers.
He introduced a system of motivation for improving
productivity in his factory
As a result of the above reforms, Owen has earned more
than 50% return on investment.
The essence of Owen experiment is that “investment in
human resources was more profitable that investment in
machinery, and other physical and materials resources.”
 II Charles Babbage (1792-1871 AD)
(Inventor and Management Scientist)
Babbage was a mathematician and is best remembered as the
inventor of the ‘analytical machine’ And Charles Babbage
is widely known as “the father of modern computing” he
made direct contributions to thinking of management. His
contributions to management are:-
 He stressed on the important of division of labor on the
basis of skills
 He innovated ideas in the area of reward system.
 He focused on the necessity of replacing the manual
operations with machines
 He believed that in order to lower the cost and increase
productivity, it is important to apply scientific principles to
work process
He recognized that not only physical work
but mental work as well could be
specialized.
Babbage also devised a profit- sharing plan
that had two parts,
a bonus that was awarded for useful
suggestions and
a portion of wages that was depended on
factory profit.
 Major Features of Pre-classical Contributors
Robert Owen: Advocated concerns for the
working and living conditions of workers.
Charles Babbage: Built the first practical
mechanical calculator and a prototype of
modern computers:
predicted the specialization of mental work:
suggested profit sharing.
2. Classical Management Approach (1880s-1930s)

the term ‘classical’ mean something traditionally

accepted or long-established.
Classical management theory is based on the
belief that workers only have physical and
economics needs.
One of the first schools of management thought,
the classical management theory, developed
during the Industrial Revolution when new
problems related to the factory system began to
appear.
 Cont..
Classical management theory is a theory that focused on
finding the 'one best way' to operate (perform) and manage
tasks. Efficiency and productivity became a critical concern of
the Managers at the turn of the 20th century.
Scientific management concentrated on lower-level managers
dealing with everyday problems of the workforce.
Classical organization theory concentrated on top-level
managers dealing with the everyday problems of managing the
entire organization
Classical Management can be divided into three separate
schools:
1. Scientific Management
2. Administrative Approach
3. Bureaucratic approach
 I. Scientific Management

Scientific management is an approach within

classical management theory that emphasizes
scientific study of work method in order to improve
workers efficiency.
Major Representatives of the scientific management
approach include:
Early Contributors to Scientific
Management
I. Frederick Winslow Taylor,
II. Frank and Lillian Gilbreth and
III. Henry Gantt.
 I. Frederick Winslow Taylor. (1856-1915)
 Scientific Management Theory was developed mainly by a person
called F.W Taylor and primary objective was to discover the
most efficient way of doing a job and then train the workers to
do it that way.
 Frederick Winslow Taylor is considered to be the father of
scientific management.
 His primary goal was to increase worker efficiency, scientific
designing of job and systematization in management.
• To do this he preferred scientific management principles or rules
rather than intuitions, judgments and experience.
• Generally he called it the Rule of Thumb method.
 Taylor developed a strong dislike for waste and inefficiency.
 In steel company (Philadelphia, USA) he observed what he called
soldiering by workers.
 Soldiering is deliberately working at less than full capacity
 Cont…
Taylor believes that workers engaged in soldiering for
three main reasons.
 They feared that increasing their productivity would
cause them or other workers to lose their job.
 Faulty wage systems set up by management
encouraged workers to operate at a slow pace.
 General methods of working and thumb handed down
from generation to generation were very inefficient.
These factors led Taylor to conclude that management
was responsible for soldiering because it was up to
management to design jobs and wage systems that
would encourage productivity.
From his experience Taylor observed that workers
were inefficient and major reasons for inefficiency were
as follows:
• Standards of performance were not properly
determined.
• The existing pay system was not motivating
• There was no specialization as such.
• The responsibilities of management and other
workers were not clearly distinguished.
Therefore, Taylor had attempted to find solutions for the above
problems.
Consequently, the basic components of scientific management
developed by him and these include:
1. Determination of standards of performance scientifically:
Time-motions is a method that involved in performing a particular
task in a way that enabling workers to complete their job on time and
avoiding unnecessary motions. He finally determined the best method
of performing Job.
2. Differential and piece-rate payment system
 Under these payment systems, there are two rates of wage payment
 The piece rate is normally less than differential rate and it was
applied to workers who had produced output below the standard.
 The differential rate was applied for workers who had produced
an output just to the standard or above the standard.
3. Specialization of functional foremanship
there must be different functional specialists who would give
supervision for workers while they were doing their jobs so workers
could increase efficiency since they didn't spend time on planning.
4. Identification of responsibilities of management
According to Taylor's Philosophy responsibility of management should
be clearly separated from other non-management workers'
 Studying each element of worker's job and developing scientific
method of doing them.
 Scientifically selecting, training and developing workers to the
method developed.
 Heartily cooperating with workers to make sure that workers were
doing their jobs
 Management should divide and take over all the jobs that he thinks
could fit better.
Cont..
5. Mental revolution
• If output increased, management would be
happy with workers and if wage payments
increased, workers would be happy to
management and conflict between
management and workers could be solved.
 Cont..
After extensive experiment with workers, he proposed four
principles of scientific management, which, he argued, would
result in significant increase in productivity. In other word, Taylor
believed that managers could resolve the soldiering problem by
developing four principles.
Four Principles of Scientific management Theory
i. Management should develop Scientific methods by which
workers could do their jobs.
ii. Management should scientifically select, train, teach and
develop each worker.
iii. Management should cooperate with the workers in ensuring
that all the work is done in accordance with the principles of
scientific management.
iv. Management should divide work responsibility between
management and workers
 II. Frank (1868-1924) and Lillian (1878-1972) Gilbreth
Frank and Lillian Gilbreth emphasized on identifying
the elemental motions in work, the way these motions
were combined to form methods of operation, and the
basic time each motion took.
They believed it was possible to design work methods
whose times could be estimated in advance, rather than
relying upon observation-based time studies.
Frank Gilbreth, known as the Father of Time and
Motion Studies enabled the manager to break down a
job into its component parts and streamline the process.
In Frank‘s early career as an apprentice bricklayer, he was
interested in standardization and method study.
He watched bricklayers and saw that some workers were
slow and inefficient, while others were very productive.
He discovered that each bricklayer used a different set of
motions to lay bricks. From his observations, Frank isolated
the basic movements necessary to do the job and eliminated
unnecessary motions.
Workers using these movements raised their output from
1,000 to 2,700 bricks per day.
This was the first motion study designed to isolate the best
possible method of performing a given job.
Later, Frank and his wife Lillian studied job motions using
a motion picture camera and a split-second clock.
His wife, Lillian Gilbreth, was a psychologist and
author of The Psychology of Work.
The Gilbreths believed that there was one best way to
perform an operation.
However, this "one best way" could be replaced when a
better way was discovered.
The Gilbreths defined motion study as dividing work
into the most fundamental elements possible, studying
those elements separately and in relation to one another;
and from these studied elements, They defined time
study as a searching scientific analysis of methods and
equipment used or planned in doing a piece of work,
development in practical detail of the best way of doing
it, and determination of the time required.
When her husband died at the age of 56, Lillian continued their
work. The basic ideas regarding scientific management
developed include the following:
a) Developing new standard methods for doing each job
b) Selecting, training, and developing workers instead of
allowing them to choose their own tasks and train
themselves
c) Developing a spirit of cooperation between workers and
management to ensure that work is carried out in
accordance with devised procedures
d) Dividing work between workers and management in almost
equal shares, with each group taking over the work for
which it is best fitted
 III .Henry Gantt (1861-1919)

He was industrial engineer and reconsidered

Taylor’s incentive system establishing the quota
systems and bonuses (Task-and-bonus system) for
workers/supervisors who exceeded their quotas.
He also created a visual plan and progress report
system (GANTT CHART) that identifies various
stages of work which must be carried out to
complete a project, sets deadlines for each stage,
and documents accomplishments.
Henry Gantt developed the Gantt chart, a graphic
aid to plan, scheduling, and control that still use
today or which is used for scheduling multiple
overlapping tasks over a time period.
 He focused on motivational schemes, emphasizing
the greater effectiveness of rewards for good work
(rather than penalties for poor work).
He developed a pay incentive system with a
guaranteed minimum wage and bonus systems for
people on fixed wages.
Also, Gantt focused on the importance of the
qualities of leadership and management skills in
building effective industrial organizations.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

Contributions of scientific management theory

 Demonstrated the importance of compensation for better
performance.
 indicated the importance of personnel selection, training-etc
 Developed management principles which have an application in
modern management system.
 Development of a science for each element of work- Standard
output.
 Scientific Selection, training and development.
 Close cooperation between workers and management.
 Division of responsibility between management (planning) and
workers(doing).
 Mental revolution (Workers should not treat their managers like
enemies)
 Maximum prosperity for employees.
TECHNIQUES OF SCIENTIFIC MANAGEMENT
• Time Study
• Motion Study
• Standardization- Tools and R/M to increase efficiency of workers.
• Differential Piece-rate plan
• Functional foremanship
Criticism of Scientific Management
• Unemployment - Workers feel that management reduces employment
opportunities from them through replacement of men by machines and
by increasing human productivity less workers are needed to do work
leading to chucking out from their jobs.
• Exploitation - Workers feel they are exploited as they are not given due
share in increasing profits which is due to their increased productivity.
• Wages do not rise in proportion as rise in production. Wage payment
creates uncertainty & insecurity (beyond a standard output, there is no
increase in wage rate).

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• Cont..
• Monotony - Due to excessive specialization the workers are not
able to take initiative on their own. Their status is reduced to
being mere cogs in wheel. Jobs become dull. Workers loose
interest in jobs and derive little pleasure from work.
• Weakening of Trade Union - To everything is fixed &
predetermined by management. So it leaves no room for trade
unions to bargain as everything is standardized, standard output,
standard working conditions, standard time etc. This further
weakens trade unions, creates a rift between efficient & in
efficient workers according to their wages.
• Over speeding - the scientific management lays standard output,
time so they have to rush up and finish the work in\time. These
have adverse effect on health of workers.
• The workers speed up to that standard output, so scientific
management drives the workers to rush towards output and finish
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work in standard time.
• Expensive - Scientific management is a costly system
and a huge investment is required in establishment of
planning dept. standardization, work study, training of
workers.
• It may be beyond reach of small firms. Heavy food
investment leads to increase in overhead costs.
• Time Consuming - Scientific management requires
mental revision and complete reorganizing of
organization.
• A lot of time is required for work, study,
standardization
• & specialization. During this overhauling of
organization, the work suffers
 II. ADMINISTRATIVE MANAGEMENT
THEORY
Classical organizational theory, also called
administrative management theory, was aiming at
administration of entire organization.
Focus: coordination of internal activities of
organizations.
Contributors to this school of thought include
1. Henry Fayol,
2. Marry Parkers Follet and
 I. Henry Fayol (1841-1925)

Henry Fayol was a French man who had served in

mining company as a president for many years and was
an Engineer and Manager of a group of French mines.
He posited that sound management practice follows patterns
which can be identified and analyzed.
He then formulated a blueprint for a cohesive norm of
managers.
He concluded that management is an activity common to
all human undertaking (schools, government, home,
business etc.) which does five basic administrative functions
(planning, organizing, commanding, coordinating and
controlling). It was generally believed that “managers are
born not made”.
 But Fayol opposed the notion and described
management as a skill like any other one which
could be taught or learnt in schools as long as its
fundamental principles are understood.
He also set fourteen a series of administrative
principles which could be used as flexible guide lines
for managing both people and work.
The Fayol's fourteen principles
Fayol believed that these principles were essential to
increase the efficiency of management process. The
principles are the following:
1. Division of labor: work specialization could
increase efficiency.
2. Authority. the "right to give orders and the power to
exact obedience. Responsibility on the other hand
includes obligation with respect to the performance and
achieving goals in a satisfactory manner.
3. 3. Discipline. Employees must respect the rules that
govern the organization.
4. Unity of command. Employees should receive orders
from only one superior.
5. Unity of direction. Each group of activities in an
organization should be grouped together under one head
and one plan.
6. Subordination of individual interests to the general
interest The interests of one person should not be placed
before the interests of the organization as a whole.
 Cont..
Remuneration. Compensation should be based on systematic attempt to
reward good performance.
8. Centralization. The degree to which centralization or decentralization
should be adopted depends on the specific organization, but managers
should retain final responsibility to do the tasks successfully.
9. Scalar chain. A chain of authority should extend from the top to the
bottom of the organization. This chain implements the unity-of-
command principle and allows the orderly flow of information.
10. Order. Human and material resources must be in the right place at
the right time.
11. Equity. Employees should be treated as equally as possible.
12. Stability of personnel. Successful firms usually had a stable group
of employees.
13. Initiative. Employees should have the freedom to take initiative.
14. Esprit de corps. Managers should encourage a sense of unity of
effort through harmony of interests
 II. Mary Parker Follett

Her concepts included the universal goal, the

universal principle, and the Law of the Situation.
The universal goal of organizations is an
integration of individual effort into a synergistic
whole.
The universal principle is a circular or reciprocal
response emphasizing feedback to the sender (the
concept of two-way communications).
Law of the Situation emphasizes that there is no
one best way to do anything, but that it all
depends on the situation.
 Contributions of Classical Organization
(administrative) Theory
• Demonstrated the importance of different skills
at different levels of management for managers.
• Systematically identified functions of
management
• Developed several important principles of
management
 Criticism
 Too formal: Fayol’s theory is said to be very formal.
 Inconsistency: Principles of administrative theory were based
on personal experience and limited observations. There is too
much generalizations and lack empirical evidence.. For
example, the unity of command principle is incompatible with
division of work. The theory does not provide guidance as to
which principle should be given precedence over the other.
 Pro-management Bias: Administrative theory does not pay
adequate attention to workers.
 More appropriate for stable and simple organizations than for
today’s dynamic and complex organizations
 Many proponents of views employees as tools rather than
resources
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