EVOLUTION AND DEVELOPMENT OF MANAGEMENT OF

THOUGHTS.

1.1 INTRODUCTION.
The concept of management has acquired special significance in the present competitive and
complex business world. Management concept is comprehensive and covers all aspects of
business. This implies that, management is the utilization of available resources in the best possible
manner and also for achieving well defined objectives. It is a distinct and dynamic process
involving use of different resources for achieving well defined objectives. These resources are;
men, money, materials, machines, methods and markets. These are the six basic inputs in the
management process (6 M’s of management).

Management is the act of getting people together to accomplish desired goals and objectives using
available resources efficiently and effectively.

1.2 EVOLUTION OF MANAGEMENT THOUGHT.

The origin of management in the organized way can be traced as back as the origin of human
beings. They earned their livelihood by hunting that was carried out in groups.

As early as 4000 B.C, the Egyptian were aware of the importance of planning, organizing and
controlling. The huge pyramids of Egypt stand a mute of testimony to the managerial and
organizational abilities of the ancient Egyptian civilization.

In the Grecian civilization, we find the origin of the Scientific method in the famous Socratic
discourses. The Romans who built a vast empire extending from Britain in the West to Syria in the
East rules it for many years only because of their superior and advanced managerial abilities.

In the ancient India Kautilya wrote his Arthashatra in about 321 B.C, the major theme of which
was political, social and economic management of the state. The study of administration of the
cities of Mohenjodaro and Harappa of the ancient Aryans in 2000 B.C, Buddha’s order and the
Sangha in 530 B.C, provide evidence about the use of the principles of management.

Management thought is an evolutionary concept. New theories and principles were suggested
along with new developments in the business field. The new thoughts supplemented the existing
thoughts and theories. This is how developments are taking place continuously in regard to
management thoughts/theories.

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As a consequence of industrial revolution in England during the 18th and 19th centuries, important
inventions like the lathe machines, power looms and spinning were invented and used extensively.
Therefore, to manage the affairs of large industrial houses, modern management came into
existence. This development led to emergence of various school of thoughts.

Evolution of management thought can be studied in the following broad stages:

1. The Classical Theory of Management.

a) Scientific management.
b) Bureaucratic management.
c) Administrative management.

2. Neo-Classical Theory.
a) Human Relations.
b) Behavioral Science Approach.

3. The Modern Management Theories.

a) Quantitative Approach.
b) System Approach.
c) Contingency Approach.

The diagrammatic layout of management thoughts is given in the figure below;

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It is rather difficult to state the exact period of each stage in the evolution of management thought.
Experts, in general, agree with the following period for each thought. They include;

• Classical thought: 1900 – 1930.

• Neo-Classical thought: 1930 – 1960.
• Modern Management thought: 1960 onwards.

1.3 CLASSICAL THEORY OF MANAGEMENT.

Classical organization theory grew out of the need to find guidelines for managing complex
organizations such as factories.

In this management thought, the scientific management was contributed by Fredrich Taylor,
Gilbreths and Henry Gantt in the year 1910, the Bureaucratic management was by Max Weber in
the year 1900 and the Administrative management in the year 1910 too. It is shown in the
diagrammatic figure below;

a) SCIENTIFIC MANAGEMENT THOUGHT.

Its main contributors are; F.W Tylor, Frank Gilbreths and Henry Gantt. Fredrich Tylor being the
father of scientific management.

It is an impact of Industrial Revolution.

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Principles of scientific management.
1. Replacement of old rule of thumb method.
2. Scientific selection and training.
3. Labor-Management co-operation. (Mental Revolution)
4. Maximum output.
5. Equal division of responsibility.

Techniques of Scientific management.

1. Scientific task setting. – fair day’s work.
2. Work study. – method, time, fatigue and motion study.
3. Planning the task.
4. Standardization.
5. Scientific selection and training.
6. Differential piece-wage plan.
7. Specialization.

Criticism of Scientific Management.

• Functional Organization structure (An operator is controlled by eight foremen) – In
practice and violates unity of command.
• It concentrated on the production management and ignores the area of Finance, Marketing,
Accounting and Personnel.
• Workers objected Tylor’s Differential Piece wage plan because wages of the workers are
not increased in direct proportion to the increase in productivity.
• It undermined the human factor in industry. It resulted I monotony of job, loss of initiative,
wage reductions, job insecurity etc.

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CONTRIBUTIONS TO THE SCIENTIFIC MANAGEMENT THOUGHT.

A. Fredrich Tylor Contribution. (1856-1915)

He is the father of scientific management.

Principles of Taylor’s Management.

i. The scientific task setting based on the time, motion and fatigue study.
ii. Fitting the “right person for the right job” by proper selection, training and placement of
personnel.
iii. Improvement in work by;
• Standardization of tools and equipment.
• Improvement in work environment.
iv. Employers and employees should not feel that they are exploiting each other. (Mental
revolution)
v. Differential piece rate wage system to distinguish between efficient and inefficient
workers. (Taylor’s Differential Piece Rate Plan)
vi. Intelligent investigation and analysis of the different unit of the business.
vii. Scientific study of each unit of the business.
viii. Separation of the planning and execution based on specialization.

B. Frank and Lilian Gilbreth’s Contributions (1868-1924, 1878-1972).

Gilbreth’s family contributed to scientific management theories as husband and wife team. In
contrast to Tylor’s time study, they came up with motion and laws of human motion from which
principles of motion economy was developed. In their research, motion and fatigue were
intertwined – every motion that was removed decreases fatigue. With use of motion cameras, they
found the next economical motions for the task in order to upgrade performance and reduce fatigue.
They argue that motion study would go a long way to reducing worker morale because of its
obvious physical benefits and because it demonstrated management’s concern for the worker. They

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also championed for the idea of workers standard day work, scheduled rest breaks and normal
lunch periods.

Scientific study of management should include both analysis and synthesis.

• Analysis – Breaking down a task into its essential elements.

• Synthesis – Include necessary element for efficient work and eliminate other
elements.

They concentrated on motion study and suggested the first definition – “Motion Study as the
science of eliminating wastefulness resulting from unnecessary, ill-directed and inefficient
motions”.

They developed process Chart-Overall picture of all activities in the chart form.

C. Henry Gantt Contributions (1861-1919).

Gantt, an industrial engineer worked widely with Taylor’s Scientific management and was
remembered for his humanizing influence on management theories. He laid emphasis on the
conditions that pose favorable psychological effects on workers. He worked with Fredrich Taylor
and considered his incentive system establishing the quota systems and bonuses for
workers/supervisors who exceeded their quotas, which improved the Taylor’s Differential Piece
Rate System. He also created a visual plan and progress report system (GANTT CHART), which
consisted of output in one axis and time on the other axis, that identifies various stages of work
which must be carried out to complete a project, set deadlines for each stage and document
accomplishments. Gantt chart also formed the basis for development of Critical Path Method
(CPM) by Du Pont and Program Evaluation and Review Technique (PERT) by American navy.

He brought about the Humanistic approach and industrial responsibility.

Other contributors;

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D. Charles Bedaux (1887-1994):

Introduced the rating assessment in timing work which resulted in great improvements in employee
productivity. He also expanded the range of techniques employed in work stud which include
analyses.

E. Jules Henry Fayol (1841-1925):

He was an Engineer and Manger of a group of French mines. He was acclaimed the founder of
Classical Management school; not because he was the first to investigate management behavior,
but because he was the first to systematize it. He posited that sound management practice follows
pattern which can be identified and analyzed. He then formulated a blueprint for cohesive norm of
managers. He concluded that management is an activity common to all human undertaking (school,
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 he opposed the notion and described management as a skill like any other
which could be taught and learnt in schools as long as its fundamental principles are understood.

b) BUREAUCRATIC MANAGEMENT OF THOUGHT.

Max Weber (1864-1920) a German sociologist introduced the theory of Bureaucracy. His major
contribution to the theory is the concept of authority, structure and its inter-relationship. Weber in
his model of bureaucracy stated that there are three types of authority in any organization. They
include;

o Legal Authority: - indicating that a person holds authority based on legal position or rank
within the hierarchy. For example, a production manager in the industry or battalion
commander in the military organization.
o Traditional Authority: - this is where the employees obey a person because he comes from
a traditionally recognized power holding family or a person belonging to a royal family.
o Charismatic Authority: - which indicated special power or an appeal that a leader
possesses.

It mainly consisted of rules and regulations to eliminate managerial inconsistencies.

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Elements of Bureaucracy.

Bureaucracy plays a vital role in business, government, education or any other large organization.
Though the bureaucratic model was suggested about 80 years ago but it still holds good.

Below is the structure of bureaucratic model;

Features of Bureaucracy.
Salient points of the Bureaucratic model are as under:

a) Hierarchy of authority exists in the organization, which involves superior-subordinate

relationship and chain of command.
b) Division of work based on competence and functional foremanship.
c) System of policy, rules and regulations is necessary to regulate subordinate behavior and
to ensure rationality, objectivity, discipline and control.
d) In bureaucratic model, rule of law exists that leads to impersonal behavior of employees.
Relations are based on position in the hierarchy.
e) Weber suggests standardization of methods, systems, processes, job contents and tools for
smooth operation.
f) Selection and promotion of employees should be based on competence.
g) Bureaucracy recognizes legal power derived from the official position held by an
individual.

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Evaluation of Bureaucratic Theory.
The theory is based on rigid rules and regulations having no consideration for interpersonal
relationship based on emotions and human qualities. Power has been considered as the dominant
factor to administer the organization leading to self-perpetuation. There are glaring drawbacks in
the bureaucratic model namely;

✓ Rigidity.
✓ Impersonal and mechanical relationship.
✓ Higher cost of control.
✓ Umpire building.

Lack of co-ordination and interpersonal communication and lastly existence of blind faith in rules
and regulations where there is no change anticipated. The theory does not promote fulfilment of
human needs and does not exploit full potential of employees.

Characteristics of Bureaucratic Management of thought.

• Division of work.
• Hierarchy of position.
• Rules and Regulations.
• Impersonal conduct.
• Staffing.
• Technical competence.
• Official records.

Features of Ideal Bureaucratic Organization.

• Specialization.
• Hierarchy of Authority.
• Rules.
• Impersonality.
• Trained Managers.

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c) ADMININSTRAVTIVE MANAGEMENT OF THOUGHT.
Henri Fayol was the father of administrative management which was brought to play in the year
period of 1841 to 1925.

It focuses on manager and the use of general principles and functions for improving organizational
functioning.

Min contributors are; Henri Fayol, Mooney, Alan. C. Reiley.

The major findings of this study are;

1. Classification of business activities: Technical, Commercial, Financial, Security,

Accounting and Managerial activities.
2. Basic functions of manager: Planning, Organizing, Commanding, Coordinating and
Controlling.
3. Qualities and skills of a manger: Physical Quantity, Mental ability, Moral education etc.
4. Principles of Management: “The Henri Fayol’s 14 Principles”

The management consisted of six types of activities. They include;

i. Technical Activities; such as Production and Manufacturing.

ii. Commercial Activities; such as Purchasing, Selling and Exchange.
iii. Financial Activities; such as Optimum use of capital.
iv. Security; such as Protection of properties and persons.
v. Accounting; such as Stock taking, Balance sheet, costing and statistics.
vi. Managerial; such as Planning, organizing, coordinating and controlling.

Principles of Administrative Management.

It implies to the list of current management practices. Also known as the Henri Fayol’s 14
Principles.

They include;

1. Division of work or labor.

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2. Authority and Responsibility.
3. Discipline.
4. Unity of Command.
5. Unity of Direction.
6. Subordination of individual to general interest.
7. Remuneration.
8. Centralization of authority.
9. Scalar chain or Line of Authority.
10. Order.
11. Equity of treatment.
12. Stability of workers.
13. Initiative.
14. Team spirit. (Espirit de Corps)

1.4 NEO-CLASSICAL THEORY.

The need for group dynamics, complex human motivation and styles of leadership was stressed
during the radical social and cultural changes that occurred in 1920s and 1930s. The human
relations school of management thought emerged to address these issues.

The prominent figures in this field include; Elton Mayo (1880-1949); Mary Parker Follett (1868-
1933); Chester Barnard (1886-1961); Abraham Maslow (1908-1970); Douglas McGregor (1906-
1964); Rensis Likert (1903-1981); Frederick Herzberg (1923-2000); David McClelland (1917-
1998) and Chris Argyris (1923-2002) etc.

a) HUMAN RELATION.
It was founded by Elton Mayo between the year period of 1880 to 1949, making him the father of
Human Relations School. He conducted an experiment on Hawtrone plant of Western electric
company where he worked for 5 years (1927-1932), evaluated the attributes and psychological
reactions of workers in on-the-job situations and concluded that production efficiency of workers
depends upon emotional factors. Happy and satisfied employees trying to increase production.

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His contributions to the development of management thought is unique and is also treated as
human relations approach to management.

His associates included John Dewery, Kurt Lewin and others. They came to the following
conclusions from their famous Hawthorne experiments:

1. The amount of work to be done by a worker is not determined by his physical capacity but
by the social norms.
2. Non-economic rewards play a significant role in influencing the behavior of the workers.
3. Generally, the workers do not react as individuals, but as members of group.
4. Informal leaders play an important part in setting and forcing the group norms.

Mayo discussed the factors that cause a change in human behavior. He concluded that the cause
of increase in the productivity of the workers is not a single factor like the rest pauses or changing
working hours but a combination of these and several other factors such as less restrictive
supervision, giving autonomy to workers, allowing the formation of small cohesive groups of
workers and so on.

Today, as a result of the efforts of Mayo and his associates, the managers in different organizations
recognize that workers’ performance is related to psychological, sociological and physical factors.
Their study proved that informal work groups and the opportunity to be heard and participate in
decision-making have an important impact on the productivity of the workers.

Features of Human Relations Approach.

1. A business organization is not merely a techno-economic system but also a social system
and involves human element.
2. An individual employee is motivated not merely by economic incentives but also by non-
economic incentives, psychological and social interest, needs and aspirations.
3. The informal groups in the organization are more important than individuals and play an
important role in raising productivity.

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4. In place of task-centered leadership, the employee-centered, humanistic, democratic and
participative style of leadership should be introduced as it is more effective/ productive.
5. Employees are not necessarily inefficient or negative in their approach. They are capable
of self-direction and control.
6. Employees performance can be raised by meeting their social and psychological needs.
Cordial atmosphere at work place is also useful for raising productivity.
7. Management needs social skills along with technical skills in order to create a feeling
(among the employees) that they are a part and parcel of the organization and not outsiders.
8. Employees need respect and positive feeling from the management. For this, employees
should be encouraged to participate and communicate freely their views and suggestions
in the concerned areas of decision-making.
9. The management has to secure willing cooperation of employees. The objective before the
management should be secure cooperative effort of its employees. For this, employees
should be made happy and satisfied.

Human relations approach is a progressive development as compared to classical approach. Here,

productivity is not treated merely as an engineering problem.

Limitation of Human Relations Approach.

1. Too much importance to employees, and social needs: Human relations approach to
management has given too much importance to employees, their need and satisfaction. It
has given undue stress on the social side of management as compared to technical side. It
is another extreme as compared to classical theory where employees were neglected
considerably. Human relation approach has also neglected many other aspects such as
organizational issues, environment at the work place, labor unions, structure of the
organization and so on.
2. Employee-oriented approach to a limited extent: It is argued that human relations
approach is apparently employee-oriented but in reality, it is organization-oriented. Many
measures are suggested for the happiness in order to achieve organizational objectives and
not for meeting the real needs of the workers. Their participation in management or upward
communication with the management, etc. is outwardly employee-oriented and gives them

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a false sense of happiness. In brief, the human relations approach is employee-oriented by
only a limited extent.
3. Faulty assumptions in the theory: the human relations approach is based on a wrong
assumption that satisfied workers are more productive. After 1950s, it was proved that
productivity improvement, as a result of better working conditions and the human relation
skills of manager’s did not result in productivity improvement as expected. Thus, workers
satisfaction is one but not the only factor which raises industrial productivity.
4. Limited importance to economic incentives: The human relations approach has given
limited importance to economic incentives in motivating employees. They prefer informal
groups and cordial relations among them. However, their interest and loyalty to the
organization largely depends on the monetary incentives. Low wages lead labor turnover
even when the good treatment is given to employees.

b) BEHAVIOURAL SCIENCE APPROACH.

Adopts a scientific approach to understand, explain and predict human behavior in organizational
setup. The contributors are; Maslow, Herzberg, McGregor, Mouton, Blake etc.

Mayo and his colleagues pioneered the use of the scientific method in their studies of the people
in the work environment. Later researchers, more rigorously trained in the social sciences
(psychology, sociology and anthropology), used more sophisticated research methods and became
known as “behavioral scientists” rather than “human relations theorists”.

The behavioral scientists brought two new dimensions to the study of management an
organization. First, they advanced an even more sophisticated view of human beings and their
drives than did Mayo and his contemporaries.

Secondly, behavioral scientist applied the methods of scientific investigation to the study of how
people behaved in organizations as whole entities.

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Differences between the Human relations approach and Behavioral Approach.
HUMAN RELATIONS APPROACH. BEHAVIORAL APPROACH.

It aims at humanizing organization. It aims at analyzing and studying human

behavior.
It emphasizes on social and psychological Emphasizes on interpersonal relations used by
needs of employees. employees.
Here individual’s differences are not Differences in terms of personality, beliefs,
considered. values and goals are considered.
Employees productivity is dependent on Productivity depends on morale, satisfaction,
economic rewards. motivation etc.

1.5 MODERN MANAGEMENT THEORIES.

Contribution to management thought after 1960s are covered by modern management theories.
Modern theories are based on classical and neo-classical theories but consider the management
problems as they developed in the recent years. These are the three streams under modern
management theory:

a) Quantitative/ Mathematical Approach to Management.

b) System Approach to Management.
c) Contingency Approach to Management.

a) System Management School.

A system is an organized entity, that is, business enterprise made up of parts connected and directed
to some purpose. Each system has an input, a process and an output. It acts as a self-sufficient unit.

As per system management school, an organization is looked upon as an artificial system. Its
external parts work together to achieve established goals and the external parts to achieve interplay
with the environment including customers, the general public, suppliers and government.

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Features of a System Approach to Management.
Open or Close Systems: Systems may either be open or closed. An open system is one that is
independent on the outside environment for survival, example, human body as a system is
composed of many subsystems. A system is considered closed if it does not interact with the
environment. Physical and mechanical systems are closed systems because they are insulated from
their external environment.

Interdependent parts: A system is a set of interdependent parts which together from a unitary
whole that perform some function.

Consideration of whole system: No part of the system can be precisely analyzed and under-stood
apart from the whole system.

Information, energy and material: Generally, there are three basic inputs that enter the processor
of the system, those are; Information (technology), energy (motive power) and materials to be
transformed into goods.

Defined boundaries: Each system including an organization has its own boundaries which
separate it from other system in the environment.

Synergy: Output of a system is always more than the combined output of its parts. In organization
terms, synergy means when separate departments within an organization cooperate and interact,
they become more productive than if they had acted in isolation.

Feedback mechanism: A system can adopt and justify itself to the changing environment through
the feedback to the appropriate people.

Multidisciplinary approach: Systems approach integrates and uses with profit ideas emerging
from different schools of thought.

Merits of System Approach.

1. It represents a refreshingly new thinking on organization and management.
2. It stresses that managers should avoid analyzing problems in isolation but should develop
the skills for integrated thinking on management problems.
3. The system approach provides a unified focus to organizational efforts.

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4. It provides a strong conceptual framework for meaningful analysis and understanding of
organizations.
5. It provides clues to the complex behavior of organization.

Limitations of System Approach.

1. The system approach is criticized on the ground that it is too abstract and vague. It is
difficult to apply it to practical problems directly and easily.
2. The system approach fails to provide specific tools and techniques for the practicing
managers.
3. The system approach does not recognize differences in systems. It fails to clearly identify
the nature of interactions and interdependencies between an organization and it external
environment and it also fails to offer a unified body of knowledge.

B) Contingency Management School / Contingency approach to

Management/ Situation Approach.
A common deficiency of the classical, behavioral and quantitative schools is that they have stress
one aspect of the organization at the cost of others. The classical approach emphasizes on the ‘task’
while behavioral approach emphasizes on the ‘people’. The stress of quantitative approach is on
‘mathematical decision-making’. However, it is difficult to understand precisely which is most
useful and appropriate in a given practical situation. The system approach as well as the
contingency approach provide one integrated approach to management problems.

The contingency approach is the second approach (the first one being the system approach) which
attempts to integrate the various schools of management thought in an orderly manner.

Features of the Contingency Approach.

1. Management is entirely situational. The management has to use the measure/ techniques
as per the situation from time to time.
2. Management should match its approach as per the requirements of the situation. The
policies and practices used should be suitable to environmental changes.
3. The success of management depends on its ability to cope up with its environment.

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Merits of Contingency Approach.
1. It is pragmatic and open minded. It discounts preconceived notions, and universal validity
of principles.
2. Theory relieves managers from dogmas and set principles. It provides freedom/choice to
manage to judge the external environment and use the most suitable management
techniques.
3. It has wide-ranging applicability and practical utility in an organization and management.
It advocates comparative analysis of organization to bring suitable adjustment between
organization structure and situational peculiarities.
4. It focuses attention on situational factors that affect the management strategy.

Limitations of Contingency Approach.

1. It is argued that it lacks a theoretical base.
2. Under this approach, the manager is supposed to think through all possible alternatives as
he has no dried principles to act upon. This brings the need of more qualities and skills on
the part of managers.

b) Quantitative Management.
It is also known as Management science or Operation Research. It focuses on the application of
scientific tools providing a quantitative base for decision making to managers by utilizing the
following disciplines;

a) Management Science: - Critical Path Method (CPM), probability, sampling theory, etc.
b) Operations Management: - Production activities and logistic related, for example;
Statistical quality control, Production planning, replacement of machinery, etc.
c) Management Information System (MIS): - Use of computer to process raw information
suitable for decision making.

The contributors in the various management thoughts are as shown the figure below;

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Where by, pre-classical school represents the school of thought that was before the 1900, which is
the classical school. They include from far during the hunting management tactical to the
management of people with respect to land, when land possession became of importance hence
there were conflicts between groups. Management practices were later undertaken in a scientific
way early 18th Century when industrial revolution took place and the World War I marked
development in the evolution of management concepts.

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REFERENCES.
i. Evolution of Management Thought: By Supriya Kamna, Ass. Professor, Dpt. Of
Commerce, Shivaji College, University of Delhi.
ii. Principles of Management: By Uttarakhand Open University.
iii. Evolution of Management Thought: A continuous or Discontinuous Process: By Stanley
N. Agogbua et.al, Dept. of Management and Entrepreneurial Studies.
iv. Evolution of Management theories: By Shafeek. K, Ass. Professor, Dept. of Mechanical
Engineering, Al-Ameen Engineering College.
v. History of Management Thought: Polaris.umuc.edu

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