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  1. 1. Strategic Leadership InstituteShaping the Future Through Leadership About Associates Corporate Training Consulting Resources News Contact Us ProjectsStrategic Leadership InstituteThe Historical Evolution of Management Theory from 1900 toPresent: The Changing role of Leaders in Organizations15/01/2009 16:12The Historical Evolution of ManagementTheory from 1900 to Present: The Changingrole of Leaders in OrganizationsBy Manie BosmanThe evolution in management theory over the last century is the history of the constantlychanging role of leaders in organizations. As organizational leaders evolved from the carrot-and-stick wielding owner-managers of the earlier Industrial Era to the Servant Leaders of the 21stCentury, the impact of individual leaders on organizations became progressively important.Whereas early managers could rely on authority and strong-arm tactics to reach their goals,
  2. 2. servant leaders in our time are challenged to set personal examples by living the values andprinciples they wish their followers to achieve. Early Management and the study of management Although great feats of human achievement such as the Egyptian pyramids, the Great Wall ofChina, the Colosseum in Rome and the Taj Mahal in India all bear testimony to skilledmanagement in ancient times, the formal study of management only began late in the 19thcentury. The main driving force behind this development of management as a science was thetransition from 19th century “entrepreneurial capitalism” to early 20th century “managerialcapitalism”. Whereas the first capitalists were business owners who used their own finances tofund organizations that they managed themselves, rapid industrial growth saw the formation oflarge organizations with capital often provided by outsiders. This not only “widened the gap”between owners or shareholders and management, it also brought new management challenges(Smit & Cronjé, 2002, p34-35; George, 1968). Scientific Management One of the early pioneers of management theory was Frederick W. Taylor (1856-1915), amechanical engineer who believed that it was management’s task to design jobs properly and toprovide incentives to motivate workers to achieve higher productivity. While working at the Midvale Steel Company in Philadelphia, Taylor developed a new, and atthe time radical approach to managing, known as scientific management. He conducted studiesinto how workers or machines performed tasks, measuring and analyzing each measurable aspectof the work. He then determined standard times and sequences for the completion of each task.
  3. 3. With this information, Taylor provided managers with realistic production standards per man-and machine-hour. Taylor’s scientific management changed the role of managers from being run-of-the-millwhip men to specialized foremen who were adequately equipped to supervise each phase of theproduction process. On a larger scale, he revolutionized managerial thought and laid thefoundation for the formation of many other management systems in decades to come.The Administrative Approach Across the Atlantic ocean Jules Henri Fayol (1841-1925), a fellow engineer and manager of agroup of French mines, came to the conclusion that management was an activity common to allhuman undertakings (including home, business, government, schools, etc.) and that all theseundertakings needed five basic administrative functions (planning, organizing, commanding,coordinating and controlling). He argued that because management was an all-encompassingactivity, it should be taught in schools, colleges and universities. Fayol’s approach rejected the old notion that “managers are born, not made”, proposinginstead that management is a skill which can be acquired if its principles are understood.The Bureaucratic Approach Max Weber (1864-1920) was a German sociologist who approached management by focusingon organizational structure, dividing organizations into hierarchies with clear lines of authorityand control. This meant that managers were given “legal authority” based on their position in theorganizational structure, to enforce rules and policy (Smit & Cronjé, 2002, p41).
  4. 4. Weber’s bureaucratic system helped large organizations to function in a more stable,organized and systematic manner. However, by doing away with personality based orcharismatic leadership, individuality and creativity is often sacrificed. Bureaucratic leaders andworkers are required to obey rules and do only what they are told. The result is that these leadersseldom think “outside the box” and therefore find it very difficult to adapt to changingenvironments and new challenges. The Human Relations Movement Elton Mayo (1880-1949) was a Harvard professor who proposed that managers shouldbecome more “people-orientated” (Smit & Cronjé, 2002, p43). Conducting experiments onconditions in the workplace and incorporating the well-published findings of the HawthorneStudies, Mayo declared that “logical factors were far less important than emotional factors indetermining productive efficiency” (George, 1968, p129). He concluded that participation insocial groups and “group pressure”, as opposed to organizational structures or demands frommanagement, had the strongest impact on worker productivity (Smit & Cronjé, 2002, p43). Mayo’s findings once again revolutionized the role of managers in organizations. The workperformed by individuals has to satisfy their “personal, subjective” social needs as well as thecompany’s productive requirements. He and other proponents of this movement therefore calledfor managers to “accept a new role” in their relationship with workers; develop a new concept ofauthority; and help foster a new social order in the workplace (George, 1968). In practicemanagers were encouraged to consult workers about change, take note of their views, and toshow concern for their physical and mental health (Wren, 2005, p. 293).Servant Leadership
  5. 5. Although the concept of servant-leadership is found in the Bible and might even date furtherback into antiquity, it was first proposed as a management approach by Peter Greenleaf (1904-1990) in his book Servant Leadership (Smit & Cronje, 2002). He explained that becoming aservant-leader “begins with the natural feeling that one wants to serve” followed by theaspiration to lead (Carroll, 2005). This approach completely revolutionized the role of managers in organizations as it calls forleaders to place the priorities and needs of their followers before their own or that of theorganization. It also differentiates clearly between the functions of leadership and management,although the ideal is that modern day servant leader / managers should be able to perform bothfunctions simultaneously. Servant-leadership “encourage collaboration, trust, foresight, listening,and the ethical use of power and empowerment as a way of improving the life of the individualsand/or the organizations” (Hartley p288). According to Greenleaf, the ultimate test for successfulservant leadership is whether or not followers have grown as persons as a result of being served– becoming “healthier, wiser, freer, more autonomous and more likely themselves to becomeservants”. Summary and Recommendations The role and responsibilities of leaders in organizations has undergone some radical changesover the last 100 years. Evolving from the strong-armed bosses of early entrepreneurialcapitalism to bureaucrats whose authority rested in their organizational position, to leaders whohave to find new ways to convince employees to follow them in the quick-changing informationera, the challenges and opportunities for leadership is perhaps now greater than ever.
  6. 6. Retrieved January 20, 2009, from. http://www.businessdictionary.comCarroll, A. B. (2005). Servant Leadership: An Ideal for Nonprofit Organizations. Nonprofit World, May/June 2005. 18-20.George, Claude S. 1968. The history of management thought (1st ed). Englewood Cliffs: N. J. Prentice-Hall.Hartley, Nell T. (2006.) Management history: an umbrella model. Journal of Management History, 12 (3), 2006. pp. 278-292.Helms, M. M. (2006). "Management Thought." Encyclopedia of Management. Ed. Gale Cengage, Retrieved in January 21, 2009, from>.Holy Bible. (1994). New King James Version. Nashville, TE: Thomas Nelson.Jacobs, G. A. (2006). Servant Leadership and Follower Commitment. Regent University Servant Leadership Research Roundtable – August 2006.
  7. 7. Smith, M. K. (2001). Peter Senge and the learning organization. The encyclopedia of informal education. Updated: October 2008. Retrieved on January 15, 2009 from, P. J. and Cronje, G. J. de J. (2002). Management Principles – a Contemporary edition for Africa, (3rd ed). Cape Town, South Africa: Juta.Van Buuren, H. J. III. (2008). Fairness and the Main Management Theories of the Twentieth Century: A Historical Review, 1900–1965. Journal of Business Ethics. Vol 82. 634-644.Wren, D. A. (2005.) The history of management thought, (5th ed). Hoboken, N.J.: John Wiley.SlideShare Upload Browse Go Pro Login Signup Email Favorite Save file Flag Embed
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  11. 11. Tweet 0 inShare Wordpress + FollowChapter 2 The Evolution Of ManagementTheoryby management 2 on Apr 11, 2009 48,260 views 7 comments1–7 of 7 comments Post a comment santhoshkumarbokinala thank u good job 5 days ago Norma Mingo thank you very much for sharing this. thinking of paying forward. may your kind multiply. 1 month ago minorcavhea tanx.. 8 months ago Prahesti Indra, Trainer at Telkom Indonesia thank your for such comprehensive& compact presentation. 9 months ago JOECHRISTY THANK YOU SO MUCH. WONDERFUL PRESENTATION 1 year ago Sulav Shakya thanks mate, i really appreciate what you did for us, thanks a lot !!! 1 year ago
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  13. 13. Chapter 2 The Evolution Of Management Theory —Presentation Transcript 1. The Evolution of Management Theory Chapter 2 2. The driving force behind the evolution of management theory is the search for better ways to utilize organizational resources. 3. The Evolution of Management Theory 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Scientific Management Theory Administrative Management Theory Behavioral Management Theory Management Science Theory Organizational Environment Theory 4. Evolution of modern management began in the late nineteenth century, after the industrial revolution. Economic, technical and cultural changes 5. Mechanization changed systems like crafts production into large scale manufacturing, where semi or unskilled workers operated machineries. 6. Small-scale Crafts Production Large-scale Mechanized Manufacturing Managed by engineers who only had Technical orientation Problems faced: How to handle people Social problems relating to working t ogether in large groups How to increase efficiency of the worker-task mix 7. Job specialization and the Division of Labor Famous economist, Adam Smith , journeyed around England in 1700’s studying the effects of industrial revolution. 8. Each worker responsible for All tasks Each worker performed only 1 or a few tasks to produce Crafts-style Factory System Poorer performance Few thousands p/d Cannot be equally Skilled in all tasks Better performance 48,000 pins p/d More skilled at their tasks 9. Job Specialization Division of Labor Increased Efficiency Better Organizational performance 10. 11. With insights gained from Adam Smith’s observations, other managers and researchers began to investigate how to improve job specialization to increase performance. They focused on how to organize and control the work process. 12. F.W. Taylor (1856-1915) Scientific Management The systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. 13. Taylor believed that if the amount of time and effort that each worker expends to produce a unit of output can be reduced by increasing specialization and division of labor, the production process will become more efficient. 14. Taylor’s Principles 1. Study the way workers perform their tasks, gather all informational job knowledge that workers possess, and experiment with ways of improving how tasks are performed 15. 2. Codify the new methods of performing tasks into written rules and standard operating procedures. 3. Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures. 16. 4. Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level.
  14. 14. 17. This scientific management became nationally known, but the selectiveimplementation of the principles created more harm than good.18. Workers felt that as their performance increased, managers required them to do morework for the same pay. Increases in performance meant fewer jobs and greater threat oflayoffs Monotonous and repetitive Dissatisfaction19. Ford Achieving the right mix of worker-task specialization Linking people and tasksby the speed of the production line20. Franklin Motor Company Redesigned the work process using the scientificmanagement principles. Production increased from 100 cars a month to 45 cars a day.21. The Gilbreths Frank Gilbreth (1868-1924) Lilian Gilbreth (1878-1972)22. Time and Motion Study Break and analyze every individual action necessary toperform a particular task into each of its component actions Find better ways to performeach component action Reorganize each component action so that it is more efficient-lesscost of time and effort23. Their goal was to maximize the efficiency with which each individual task wasperformed.24. Study of Fatigue How physical characteristics of the workplace contribute to jobstress Effects of lighting Effects of heating Effects of color of walls Design of tools andmachines25. Administrative Management Theory Theory of Bureaucracy Fayol’s Principles ofManagement26. Administrative Management The study of how to create an organizational structurethat leads to high efficiency and effectiveness.27. Theory of Bureaucracy Max Weber (1864-1920) Developed the principles ofbureaucracy-a formal system of organization and administration designed to ensureefficiency and effectiveness.28. System of written rules and SOPs that specify how Employees should behaveSelection and evaluation System that rewards Employees fairly and Equitably. Clearlyspecified System of task and Role relationships Clearly specified Hierarchy of authorityA bureaucracy Should have29. 5 Principles: A Manager’s formal authority derives from the position he or she holdsin the organization People should occupy positions because of their performance , notbecause of their social standing or personal contacts.30. The extent of each position’s formal authority and task responsibilities and itsrelationship to other positions in an organization, should be clearly specified . Authoritycan be exercised effectively in an organization when positions are arranged hierarchically, so employees know whom to report to and who reports to them.31. Managers must create a well-defined system of rules , standard operating proceduresand norms so that they can effectively control behavior within an organization.32. Rules Formal written instructions that specify actions to be taken under differentcircumstances to achieve specific goals. Rule: At the end of the day employees are toleave their machines in good order.33. Standard Operating Procedures Specific sets of written instructions about how toperform a certain aspect of a task. SOP: Specifies exactly how they should do so, whichmachine parts should be oiled or replaced.
  15. 15. 34. Norms Norms are unwritten, informal codes of conduct that prescribe how peopleshould act in particular situations. E.g.: An organizational norm in a restaurant might bethat waiters should help each other if time permits.35. Fayol’s Principles of Management Henri Fayol (1841-1925)36. 14 Principles of Management: Division of Labour Authority and Responsibility Unityof Command Line of Authority Centralization Unity of Direction Equity37. Order Initiative Discipline Remuneration of Personnel Stability of tenure of PersonnelSubordination of Individual Interests to the Common Interest Esprit de Corps38. 1. Division of Labour Job specialization and the division of labour should increaseefficiency. Pointed out the downside of too much specialization; so workers should begiven more duties to perform.39. 2. Authority and Responsibility Managers have the right to give orders and the powerto exhort subordinates for obedience.40. 3. Unity of Command An employee should receive orders from only one superior.41. 4. Line of Authority The length of the chain of command that extends from the top tothe bottom of an organization should be limited.42. 5. Centralization Authority should not be concentrated at the top of the chain ofcommand.43. 6. Unity of Direction Those operations within the organization that have the sameobjective should be directed by only one manager using one plan. For example thepersonnel department in a company should not have two directors each with a differenthiring policy.44. 7. Equity Managers should be both friendly and fair to their subordinates.45. 8. Order Materials and people should be in the right place at the right time. Peopleshould be in the jobs that they are most suited to.46. 9. Initiative Subordinates should be given the freedom to conceive and carry out theirplans, even though some mistakes may result.47. 10. Discipline Members in an organization need to respect the rules and agreementthat govern the organization. To Fayol, discipline results from good leadership, fairagreements and judiciously enforced penalties for infractions.48. 11. Remuneration of Personnel Compensation for work done should be fair to bothemployees and employers.49. 12. Stability of Tenure of Personnel A high employee turnover rate undermines theefficient functioning of an organization.50. 13. Subordination of Individual Interests to the Common Interest Interests ofemployees should not take precedence over the interests of the organization as a whole.51. 14. Esprit de Corps Promoting team spirit will give the organization a sense of unity.To Fayol, even a small factors should help to develop the spirit. He suggested, forexample, the use of verbal communication instead of formal, written communicationwhenever possible.52. Behavioral Management Theory The Work of Mary Parker Follet The HawthornStudies and Human Relations Theory X and Y53. Behavioral Management The study of how managers should behave to motivateemployees and encourage them to perform at high levels and be committed to theachievement of organizational goals.
  16. 16. 54. Mary Parker Follet Mary Parker Follett advocated for a human relations emphasis.Her work contrasted with the "scientific management" of Frederick W.Taylor. Mary Parker Follett stressed the interactions of management and workers.55. Follett was one of the first to integrate the idea of organizational conflict intomanagement theory, and is sometimes considered the "mother of conflictresolution.“ She coined the words "power-over" and "power-with" to differentiate coercive power from participative decision-making.56. She was of the view that authority should go with knowledge. Advocatedinvolvement of workers in job analysis and work development process. Managers ofdifferent departments should communicate with each other directly. Cross-functioning57. The Hawthorne Studies Hawthorn effect is the finding that a manager’s behavior orleadership approach can affect worker’s level of performance.58. Human Relations Movement Advocates of the idea that supervisors receivebehavioral training to manage subordinates in ways that elicit their cooperation andincrease their productivity.59. Informal Organization The system of behavioral rules and norms that emerge in agroup.60. Organization Behavior The study of the factors that have an impact on howindividuals and groups respond to and act in organizations.61. Theory X and Theory Y Douglas McGregor proposed that two sets of assumptionsabout how work attitudes and behaviors not only dominate the way managers think butalso affect how they behave in organizations. He named these two assumptions Theory Xand Theory Y.62. Theory X Assumptions: Average worker is lazy Dislikes work Will try to do as littleas possible Have little ambition and avoid responsibility63. Managers Who Accept Theory X To keep performance high, workers must besupervised closely and their behaviors be controlled by means of “the carrot and stick”-rewards and punishments.64. Design and shape work setting to maximize control over workers’ behaviors.Minimize the workers’ control over the pace of work. Focus is on development of rules,SOPs and a well-defined system of reward and punishment to control behavior. Managerssee little point in giving autonomy to solve their own problems. Managers see their roleas closely monitoring workers.65. Theory Y Assumptions: Workers are not inherently lazy Do not naturally dislikework If given the opportunity, will do what is good for the organization.66. Characteristics of the work setting determine whether workers consider work to be asource of satisfaction or punishment. Managers do not need to closely control workers’behavior. They exercise self-control67. “The limits of collaboration in the organization are not limits of human nature but ofmanagement’s ingenuity in discovering how to realize the potential represented by itshuman resources.”68. Decentralize authority More control of workers over their jobs Accountable for theirjobs Managers’ role is not to control but to provide support and advice and to evaluatethem on their ability69. Management Science Theory An approach to management that uses rigorousquantitative techniques to help managers make maximum use of organizational resources.
  17. 17. 70. Quantitative Techniques Operations Management Total Quality Management Management Information Systems 71. Organizational Environment Theory The set of forces and conditions that operate beyond an organization’s boundaries but affect a managers ability to acquire and utilize resources. Connect on LinkedIn Follow us on Twitter Find us on Facebook Find us on Google+ Learn About Us About Careers Our Blog Press Contact us Help & Support Using SlideShare SlideShare 101 Terms of Use Privacy Policy Copyright & DMCA Community Guidelines SlideShare on mobile Pro & more Go PRO New Business Solutions Advertise on SlideShare Developers & API Developers Section Developers Group Engineering Blog Blog Widgets© 2012 SlideShare Inc. All rights reserved.RSS Feed ENGLISH
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