Management theories have evolved over time from classical approaches focusing on structure and authority to more modern approaches considering people and external environments. Early theories included scientific management, bureaucratic management, and human relations approaches. Contemporary theories view organizations as open systems influenced by internal and external factors, with no single optimal approach but instead contingency-based solutions dependent on each organization's unique situation. The evolution of management theory continues as the business environment changes.

1. The Evolution Of Management Theory

2. Introduction
• The theory that guides management of people in an organization is called
management thought, hence a management theory is a group of assumptions
put forth to explain the management of organizations
• Management theories were developed from practical experiences of managers in
the industry organization, and other ideas were borrowed from fields like
science, sociology, mathematics and anthropology

3. Introduction
Management theories can be classified into three groups
1. Classical theory of management
 Scientific Management
 Bureaucratic Management
 Administrative Management
2. Neo-classical theory
 Human Relations
 Behavioral Science Approach
3. The Modern management theories
 Quantitative Approach
 System Approach
 Contingency Approach
 Operational Approach

4. The Concept of Evolution of Management
• The driving force behind the evolution of management theory is the search for
better ways to utilize organizational resources.
• Evolution of modern management began in the nineteenth century, after the
industrial revolution, when mechanization changed systems like crafts into large
scale manufacturing

5. The Concept of Evolution of Management
• Management theories can be divided into four general theories or stages that are
the classical theories of managing organizations.
1. Pre-scientific management period
2. Classical theory
3. Neo-classical theory(or behavior approach)
4. Bureaucratic Model of Max weber

6. Pre-Scientific Management Period
Due to the industrial revolution in the 18th century the view of management had to be changed.
This was because this introduced new dimensions taken by management, some personalities
introduced their theories:
Professor Charles Babbage of United Kingdom (1729 to 1871), suggested the use of science and
mathematics in industrial organizations to be more productive and accurate as manufactures
relied on guessing and suggestion
Robert Owens of the UK (1771 to 1858), focused on the employee welfare and introduced
cooperation and trade unions. He believed employee welfare might determine performance.

7. The Classical Theory
The Classical theory that is the scientific management theory, developed by Fedrick W. Taylor
(1856-1915), helps to improve the organizations level of task completion through scientific and
mathematical means. It focuses on worker and machine relationships
It focuses on the numbers, and cuts through aesthetics of production and value for example in
college statistics such as graduation rates and acceptance rates. Fedrick's theory was harsh as
employees are considered more widgets than humans.
Henri Fayol improved on this and introduced the six roles/functions and 14 principles of
management, allowing humans to be humans and focusing on managing situations and using
people to help in the process. The six roles are Forecasting, Planning, Organizing, Commanding,
Coordinating, Controlling.

8. The Classical Theory cont.
Henry Gantt also improved on Taylor whose theory lacked motivational impact
hence he introduced bonuses on workers and supervisors. Performance was
recorded on bar charts, the Gantt Chart.
The short comings of the scientific management theory were:
 Lack of standard tools and techniques
 There is no match between job and skill
 No motivation from management
 Monotonous and repetitive
 Employee dissatisfaction

9. The Classical Theory
Develop standard
method for
performing each job
Train workers in
standard method
Provide wage
incentives to workers
for increased output
Selected workers
with appropriate
abilities for each job
Supported workers
by planning their
work and eliminating
interruptions
Basic idea of Scientific
management

10. The Classical Theory cont.
Criticism of the scientific theory
• It did not appreciate the social context of work and higher needs of workers
• Did not acknowledge variance among individuals
• Tend to regard workers as uninformed and ignored their ideas
• Increased in performance meant fewer jobs and threat to layoffs
• Workers overworking, managers wanted them to do more work for the same pay

11. The Classical Theory cont.
The Gilbreths, Frank B. and Lillian M. Gilbreths suggested 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 did a motion study to identify unnecessary, ill directed and inefficient
motions hence eliminate wastefulness and reduce fatigue hence promoting the
individual workers welfare and help them reach their full potential as human
beings

12. Neo-Classical Theory
Developed or came into action in the mid-twentieth-century known as the Behavioral
management theory also called the social science movement. The neo-classical theory focuses on
employee relations in the work ecosystem.
It is based on the concept that all approaches to the work place should be in the interest of not
only the company but the worker as well, Chester Barnhard in the 1940s developed a theory that
viewed workers as psychological and social beings. No separation between human and worker
The Hawthorne experiments were conducted which used pay rewards, company provided
lunches in ways to increase employee psychological well-being, and eventually employee
productivity. As a result the studies encouraged managers of different departments to
communicate with each other directly and recommend cross functionality.
Hawthorne effect is the finding that a manager’s behavior or leadership approach can affect
worker’s level of performance hence the supervisors and manages should receive behavioral
training to manage subordinates in ways that elicit their cooperation and increase their
productivity.

13. Neo-Classical Theory
• Douglas Mc Gregor proposed Theory X and Y as assumptions about how work
attitudes and behaviors not only dominate how mangers think but also how they
behave in an organization

14. Theory X and Y Cont.
THEORY X ASSUMPTIONS
• Average worker is lazy
• Dislikes work
• Will try to do as little as possible
• Have little ambition and avoids
responsibilities
To keep performance high, workers must be
supervised closely and behaviors be controlled
by means of ‘carrot and stick’
THEORY Y ASSUMPTIONS
• Workers are not inherently lazy
• Do not dislike work
• If given opportunity, workers will do the best
for an organization
Managers do not need to closely monitor the
workers behavior and exercise self-control

15. Neo-Classical Theory cont.
Human Relations Theory, suggested jobs be designed to meet higher-level needs by
allowing workers to use their full potential.
Mary P. Follet also advocated for human relations emphasis, interrelations of
management and employees and the involvement of workers in job analysis and work
development process.
The conversation and democratic process of solving conflict put forward by Mary P.
Follet involved six points:
• Listening to each other’s views
• Accepting other view points
• Integrating view points in pursuit of a common goal
• Coordinating must be achieved in the early stage
• Coordinating must have reciprocal understanding
• Coordinating is a continual process

16. Neo-Classical Theory cont.
Activities such as seminars discussing productivity, improving morale, and good
ethical actions, to open meetings where brainstorming happens, the impact has
given the employees a chance to offer a holistic influence on organizations.
The human relations theory allows employees to develop a sense of self-awareness
to understand their places within a company and their influence

17. Bureaucratic Theory
This theory relates a formal hierarchy in which many tasks are delegated to
individuals and departments (labor division), rules and employees’ placement
based on their technical capabilities. They are also held together by a central
administration.
It was developed by Max weber (1864-1920), who was a German historian and
sociologist, nicknamed the ‘’father of bureaucracy’’. Universities and other schools
rely on bureaucracies to function, which is relevant in the delegation of tasks.

18. Bureaucratic Theory
The bureaucratic model,
theocratically, has a
hierarchical structure along
with the specialized
departments, making a
clear outline for division of
labor, which is the defining
and breaking down of work
into well defined tasks, and
delegated to be
manageable, which is a key
factor in the bureaucratic
theory.

19. Bureaucratic Theory
• Rules are formal written instructions that specify actions to be taken under
different circumstances to achieve specific goals for example: at the end of the
day employees are to leave their machines in good order
• Norms are unwritten, informal codes of conduct that prescribe how people
should act in particular situations for example in a restaurant the norm might be
that waiters should help each other if time permits
• Standard Operating Procedures, SOPs are specific set instructions about how to
perform a certain aspect of task example specifies exactly how they should do so,
which machine parts should be oiled or changed

20. Bureaucratic Theory
5 Principles of Bureaucracy
• A managers formal authority derives from the position he or
she holds in an organization
• People should occupy positions because of their
performance not because of their social standing or persona;
contacts
• The extent of each position’s formal authority and task
responsibilities and its relationship to other positions in an
organization, should be clearly specified.
• Authority can be exercised effectively in an organization
when positions are arranged in a hierarchy, so employs
know who they report too and who report to them
• Managers should create a well defined system of rules,
standards operating procedures, and norms so that they
effectively control behavior within the organization
Bureaucratic Characteristics
1) Division of work
2) Rules and regulations
3) Impersonal conduct
4) Staffing
5) Technical competence
6) Official records

21. Why Study Management Theories
• Management is doing the right things, by Peter Ferdinand Drucker
• The way someone manages their team or the entire workforce has a direct impact on
the organization’s growth and profitability hence studying and the knowledge of
management theories helps to determine which management principles and
practices work best for your organization
• Management is principally a task of planning, coordinating, motivating , and
controlling the efforts of others towards a specific objective.
• It involves combining the traditional factors of production land, labor, and capital in
an optimum manner, paying due attention to the organizations particular goals.

22. Why Study Management Theories
• Proper management due to acquired knowledge from studying the theories
1. Helps in achieving group goals – arranges the factors of production, assembles and
organizes the resources, and integrates the resources in an effective manner to achieve
goals
2. Optimum utilization of resources – management utilizes all physical & human
resources productively, the available scarce resources are used in the best way out of
various uses
3. Reduce costs – it gets maximum results from minimum input by proper planning and
getting maximum output, using the best combination of human and financial resources
4. Establishes Sound Organization – no overlapping of efforts (smooth and coordinated
functions), it establishes effective authority & responsibility relationship
5. Establishes Equilibrium – enables organization survival in a changing environment, by
adapting to the changing demands of he market/needs of society
6. Essential for Prosperity of Society – efficient management leads to better economic
production increasing the welfare of people and their standard of living

23. Modern Theory of Management
• These are theories that with modern evolution of management, which include the
systems approach, contingency approach and quantitative approach
• Systems management theory of organization was borrowed from biology and
system science, it allows for an understanding of the connections between various
parts of the organization and how they interact with one another. The organization
is viewed as a system that transforms inputs into outputs while in contain
interaction with its environment.

24. Modern Theory of
Management
Systems Approach

25. Modern Theory of Management
• The contingency management theory suggests that there is no fixed or perfect way
to organize a business or Corporation, and that the optimal solution lies in the
situation that the organization operates, the contingent depends upon internal and
external environments. In other words it applies management principles and
processes as dictated by the unique chrematistics of each situation.

26. Quantitative Approach
The quantitative approach improved decision making via the application of
quantitative techniques developed from the scientific management theory, and
consist of management science(Operations Research) and Production and
Operations management. Developed during and after world war II (1940s)
Management science called operation and research, uses mathematical and
statistical approaches to solve management problems
Production and Operations management, focuses on the operation and control of
the production process that transforms resource into finished goods and services.

27. Summary
• Management theory evolution was and is still the because of changes in the
environment, and can only be studied meaningfully against the culture of their time
• Due to evolution of management, management has shifted focus from the structure
and authority to the people behind the scene
• The classical approaches to management developed in the 1950s, emphasis was on
the internal functioning of an organization
• Weber bureaucratic approach – specialized positions, structured relationships, and
rules and regulations
• The human relations approach – focused on workers, groups, organization process to
solve productivity
• Many of these principles still hold relevance in modern workplaces even if society
continue to evolve

28. Summary
• Contemporary Approach
 Developed after WWII
 Business environment became more turbulent
 Focus on interaction between internal and external environment
 Internal/organization realized as an open system
• There is no single way to manage a business and each theory can be adopted
depending on the type of organization and the situation it finds itself in hence
management is dynamic

29. THE END
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