The document provides a historical overview of management from ancient civilizations to modern times. It discusses how management evolved from distinct leaders in preindustrial societies to the development of theories and functions in the Industrial Revolution. Key theories included scientific management, general administrative theorists like Fayol and Weber, quantitative approaches, organizational behavior, systems approaches, and contingency approaches. Modern management incorporates elements from many theories and focuses on organizational behavior and systems approaches to accommodate trends like globalization. The core functions of management - planning, organizing, leading, and controlling - remain central to the field.

1. Fundamentals of ManagementBBA - 2009 SalmaanRahman Lecture 2 Introduction to Management - Historical Perspectives Chapters 1 & 2

2. Recap Companies employ two categories of people: Non-managerial employees Managerial employees At its simplest: Non-managerial employees work directly on a task or job. Managers are those figures to whom non-managerial employees report to

3. Recap: A manager is someone who works with and through other people to coordinate and integrate work activities in order to accomplish organizational goals. Planning, Organizing, Leading, Controlling Management is the coordinating of work activities so that they are completed efficiently and effectively

4. Copyright © 2005 Prentice Hall, Inc. All rights reserved. 1–4 Management Functions Exhibit 1.3

5. Recap Management can be organized according to: Functions Planning, Organizing, Leading, Controlling Roles Interpersonal, Informational, Decisional Skills Technical, Human (interpersonal), Conceptual

6. Management: a broad overview The history of management goes back as far as the history of civilization Egyptian pyramid builders, Sumerian tax collectors, Great wall of China. As long as society has been organizing itself, there has been a need for leading, planning, organizing and controlling

7. Management – historical perspective Management history can be divided into two categories Preindustrial and Industrial Preindustrial management revolved around distinct points of power; leaders provided executive direction and created both social and business standards: Tribal Leaders / Military leaders / Royalty Pharaohs, Roman Empire, European Royal courts Mogul Empire – Akbar standardized measures Social /Religious Confucius, Buddha, Judeo/Christian/Islamic Prophets, The Vatican Management Theories and Organizational Behavior Studies share a largely identical narrative in Preindustrial times.

8. Industrial Revolution – 18th Century Movement away from primarily agrarian societies towards urban societies Development of Infrastructures like roads, ships, Population explosions Increasingly complicated stratification of society Growth of Small and medium sized businesses Middle class growth The recognition of rights for the “masses” New Spheres of Influence Medical, legal, banking, social welfare Substitution of machine power for human power

9. Drivers of the Industrial Revolution The recognition that specialization and free markets led to higher productivity and increased returns (Adam Smith) Development of a very distinct “management” layer to intercede between “Capital” and “Labor” As business processes became more organized and complicated, so did “management” become multilayered and diverse. Management emerged from evolving commercial processes: pre -15th century – Farmer > Market 16th century – Farmer > Middleman > Market 17th century – Farmer > Shipping company > Ship Captain > receiving company 18th century – East India Company – companies were handling both the supply side and distribution

10. Thought Leaders in Management Science Preindustrial Sun Tzu – Chinese Military general who authored “The Art of War” Adam Smith - 1776 – “The Wealth of Nations” - free markets, self-interest, self-organization and self regulation Industrial: 1900 onwards – Development of several formal theories to guide managers. Frederick Taylor Henri Fayol – Fayolism, first comprehensive theories of management Max Weber, Chester Bernard, Mary Parker Follet, et al.

11. Management Theories Six management theories Scientific Management General Administrative Theorists Quantitative Approach Organizational Behavior Systems Approach Contingency Approach

12. Scientific Management Modern Management Theory – 1911 Frederick Winslow Taylor – “Principles of Scientific Management” Mechanical engineer who worked at Steel mills “There is one best way to do a job” which can be taught to everyone doing that job Able to achieve increases in productivity of over 200% Putting the right person at the right job with the right tools and learning the right procedures

13. Scientific Management Frank and Lillian Gilbraith: - worked to eliminate inefficiencies Reduced the number of motions in bricklaying from 18 to 2 Modern Day: Managers still utilize Scientific Management in analyzing basic work skills, time and motion studies, recruitment, and compensation.

14. General Administrative Theorists Focus is on the entire organization Henri Fayol and Max Webber Henri Fayol described management as a universal set of functions – 7 roles and 14 principles of management Max Webber – developed a theory of authority structures and relations. The ideal organization was a bureaucracy, characterized by division of labor, well defined hierarchy, well defined rules.

15. Fayolism: 7 Functions: forecasting planning organizing commanding coordinating controlling 14 Principles: Division of Work Authority Discipline Unity of Command Unity of Direction Subordination of individual interests Remuneration Centralization Hierarchy Order Equity Stability Initiative Esprit de corps

16. 14 Principles of Fayol Division of Work – specialization increases output Authority – Managers control other workers Discipline – employees obey managers and respect rules Unity of Command – Every employee receives orders from just one manager Unity of Direction – the organization should have a single plan to guide it. Subordination of individual interests– the interests of the organization take precedence over individual interest Remuneration – fair wages for services Centralization – degree of involvement in decision making Hierarchy – line of authority Order – People (and supplies) should know where they are supposed to be Equity – Managers should be fair and kind Stability – orderly personnel planning Initiative – employees should be allowed to originate and carry out plans Esprit de corps – promoting team spirit.

17. Quantitative Approach: Post WWII Utilizes Quantitative techniques to improve decision making (operations research or management science) Use of statistics, optimizing models, information models and computer simulations to management activities. Work scheduling made more efficient by critical path analysis Forecasting made more reliable, which leads to better planning and control.

18. Organizational Behavior Since organizations are created and run by people, organizational behavior focuses on human resources. People are the most important assets of a company Hawthorn studies indicated that compensation had less of an effect on productivity than did group pressure, acceptance and security.

19. Systems approach – 1960’s The systems perspective was taken directly from the physical sciences. A system is a set of interrelated, interdependent parts arranged to produce a unified whole Business organizations are open systems. Essentially, the systems approach describes a business organization as a system that takes in inputs, puts them through a transformation process and then distributes outputs to the environment.

20. Systems Approach: Managers in a organization coordinate the various parts of the organization an ensure that the goals are being met. Systems within an organization are interdependent and affect each other

21. Contingency Approach The contingency approach takes into account that all theories have some limitations, and different and changing situations require managers to constantly adapt. Different units within the organization have different goals, size and work. 4 Variables: Size, Routineness, Environmental uncertainty, Individual differences.

22. Modern Management Science Incorporates all theories to some extent, but Organizational Behavior and Systems Approach dominate. Most easily accommodate modern trends such as globalization, HR management, etc. The four cornerstones of Management science remain: Planning Organizing Leading Control

23. Full Circle? Sun Tzu: ancient Chinese military leader, strategist and philosopher who wrote “The Art of War” Essentially a masterpiece of strategy for managing conflicts and winning battles. Covers the roles of leaders, followers, administration, and planning Became very popular again in the last century especially with corporate raiders and marketing professionals.

24. The Future