This document provides an overview of historical foundations of management. It discusses classical approaches from Taylor's scientific management to Fayol and Weber's administrative principles. It also covers the human relations movement sparked by the Hawthorne studies. Quantitative analysis and the contingency approach are introduced as more modern concepts. The value chain and total quality management are presented as key aspects of performance excellence. Students are assigned reading and homework for the week.

1. Week 2
Historical Foundations of Management

2. Learning Objectives
1. List relevant management
lessons from classical
managerial thinking
2. Explain management ideas
introduced by the human
resource approaches
3. What is the role of quantitative
analysis in management today?
4. What is unique about
contingency thinking and the
value chain in management?

3. Why look backwards?
 Take the best forward
Don’t re-invent the wheel - update to reflect current conditions
 Learn from past mistakes
"Experienceis that marvelous thing that enables you to recognize a
mistake when you make it again." (F. P. Jones)
 Theories can be challenged
Past versus new approach

4. So theories….
 Are an organised way of thinking about a subject.
 Can help define concepts about the subject.
 Organise definitions so that they do not contradict one
another.
 Try to explain and predict on the basis of their concepts.
 Can take emotion out of issues.
 Are used unconsciously by most of us.

5. Classical Approaches to
Management
.....

6. Management a Science?
• Fredrick Winslow Taylor, the “Father” of
scientific management publishes “The
Principles of Scientific Management” in
1911 where he advocates scientific
methods to define the “one best way” for a
job to be done:
• Putting the right person on the job
with the correct tools and
equipment.
• Having a standardised method of
doing the job.
• Providing an economic incentive to
the worker.

7. Scientific Management
•Scientific management emphasises careful selection and training of
workers, and supervisory support.
•The four guiding action principles are:
•1. Develop for every job a ‘science’ that includes standardised work
processes and conditions
•2. Carefully select workers with the right abilities for the job
•3. Carefully train and incentivise workers
•4. Support workers with carefully planned work.

8. Scientific Management
 Today’s use of scientific
management:
 Timeand motion studies to increase
productivity
 Carefully
design jobs with efficient
work methods
 Design incentive systems based on
output
 Train workers to perform jobs at their
best
 Train supervisors to support workers
so they can perform jobs to the best of
their abilities

9. Administrative Theorists
Henri Fayol
•Henri Fayol identified the following rules
or duties of management:
1.Foresight – complete a plan of action.
2.Organisation – provide and mobilise
resources.
3.Command – lead, select and evaluate
workers.
4.Coordination – fit diverse efforts
together.
5.Control – making sure things happen
according to plan.

10. Fayol’s a14 Principles
•Fayol also set forth number of ‘principles’ that
include:
•The scalar chain principle
•There should be a clear and unbroken line of
communication from the top to the bottom in the
organisation
•The unity of command principle
•Each person should receive orders from only one
boss
•The unity of direction principle
•One person should be in charge of all activities
that have the same performance objective

11. Max Weber
 Bureaucracy - an “ideal”, rational
and efficient form of organisation
founded on logic, order and
legitimate authority
 The defining characteristics are:
Clear division of labour
Clear hierarchy of authority
Formal rules and procedures
Impersonality
Careers based on merit

12. Hawthorne Studies
• Elton Mayo – Harvard professor from
Australia conducts studies of job design -
1924-1932
• Began as a scientific management experiment
with illumination studies
• Found the intensity of illumination was not
directly related to productivity
• The Hawthorne studies showed that people’s
feeling and relationships with co-workers, and
the ‘work group’, should be important to
management - contributed to the human
relations movement in management
• The Hawthorne effect: The tendency of
people singled out for special attention to
perform as expected.

13. Human Relations
Movement
 Post-1940 - one of main moves in
management from theories that
emphasise move from external
control to internal motivation
(Maslow, McGregor, Vroom)
 Maslow
Believed employees driven by
‘hierarchy of needs’ - Each must
be mostly satisfied before the next
level can be activated
Managers must understand where
an individual is in the hierarchy
and focus on satisfying needs at or
above that level.

14. Douglas McGregor
 McGregor - X/Y attitude to
employees
X approach is one where
managers sees workers as
irresponsible, lazy and
needing constant control;
only incentives work are
material rewards (money) and
fear
Y where manager sees workers
as naturally seeking to make an
effort and seek responsibility;
rewards should be intrinsic to
job

15. Social-Reality
 Mary Parker Follet and
administrative principles:
Organisations as ‘communities’
where individuals combine
their talents for a greater good
Making every employee an
owner creates feelings of
collective responsibility
Business problems involve a
wide variety of factors that
must be considered in
relationship to one another Mary Parker Follett - adult education,
leadership

16. Role of Quantitative
Approaches
• Management science (or
operations research)
–Describes the application of
mathematical techniques to
analyse and solve management
problems.
• Mathematical forecasting
–Makes future projections that
are useful in the planning
process.
• Inventory modelling
–Helps control inventories by
mathematically establishing
how much to order and when.

17. Role of Quantitative
Analysis
 Application from military purposes
 Includes application of statistics,
information and mathematical
models and computer simulations
 Contributes directly to management
decision
making (planning and controlling).
 The techniques use ‘economic’
decision criteria, such as costs,
revenues and return on investment

18. The contingency approach
 Also sometimes called the
situational approach - Matching
responses to the unique problems
and opportunities posed by
different situations
 There is no one universally
applicable set of management
principles (rules) by which to
manage organisations.
 Organisations are individually
different, face different situations
(contingency variables), and require
different ways of managing.

19. Quality and performance
excellence
• Value chain
–The sequence of activities transforming materials into finished
products.
• Managers and workers in truly progressive organisations are quality
conscious.
• Every effort is made in total quality management (TQM) to build
quality into all aspects of operations — from initial acquisition of
resources, through the transformation processes and work systems, all
the way to ultimate product delivery to customers or clients.

20. The value chain

21. Conclusion
•Historical approaches to management reflect
contexts that produce the same systems today
•Classical, behavioural and quantitative
approaches err in attempting to find one best way
to manage
•The contingency approach is only possible when
managers are fully aware of modern contextual
challenges and a full range of management
methods

22. Homework
• Prepare for tutorial discussion - read outline on the
course website - read the ‘strawberry generation’ on
page 260 of your textbook
• Consider if you will be absent for any tutorial in the
coming months and inform your tutor
• Make sure you have read Chapters 1 & 4 for the quiz
• Try the practice quiz if you have not done so already
(Course Extras > Week > Student Activities >
Multiple Choice Quiz)