Evolution of Management

The Evolution of Management Management thinking and practice have evolved over the last century as a result of increased understanding of human and organisational behaviour, the economic climate and historical context and the changes in generations over time. However if we’re really honest, much of what we practice today is due to the consulting industry playing on executives’ fears and aspirations by selling products and services that cause more problems than solutions, and our own human weakness of always looking for a quick fix … even to very complex issues.

It’s time to rethink Management. But before we do that, let’s take a look in the rear-view mirror and see how we got to where we are today: 1910s-1940s: Management as Science Management as Science was developed in the early 20th century and focused on increasing productivity and efficiency through standardisation, division of labour, centralisation and hierarchy. A very ‘top down’ management with strict control over people and processes dominated across industries.

1950s-1960s: Functional OrganisationsDue to growing and more complex organisations, the 1950’s and 1960’s saw the emergence of functional organisations and the Human Resource (HR) movement. Managers began to understand the human factor in production and productivity and tools such as goal setting, performance reviews and job descriptions were born. 1970s: Strategic Planning In the 1970’s we changed our focus from measuring function to resource allocation and tools like Strategic Planning (GE), Growth Share Matrix (BCG) and SWOT were used to formalise strategic planning processes.After several decades of ‘best practice’ and ‘one size fits all’ solutions, academics began to developing contingency theories.

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1980s: Competitive Advantage As the business environment grew increasingly competitive and connected, and with a blooming management consultancy industry, Competitive Advantage became a priority for organisations in the 1980’s. Tools like Total Quality Management (TQM), Six Sigma and Lean were used to measure processes and improve productivity. Employees were more involved by collecting data, but ecisions were still made at the top, and goals were used to manage people and maintain control. 1990s: Process Optimisation Benchmarking and business process reengineering became popular in the 1990’s, and by the middle of the decade, 60% of Fortune 500 companies claimed to have plans for or have already initiated such projects. TQM, Six Sigma and Lean remained popular and a more holistic, organisation-wide approach and strategy implementation took the stage with tools such as Strategy Maps and Balance Scorecards. 2000s: Big DataLargely driven by the consulting industry under the banner of Big Data, organisations in the 2000’s started to focus on using technology for growth and value creation. Meanwhile, oversaturation of existing market space drove to concepts such as Blue Ocean Strategy and Value Innovation. It’s 2013. Globalisation, advances in technology and increased diversity have put organisational challenges into hyper drive. Despite the inspirational stories we read about companies like Zappos, Innocent Drinks and Google, the truth is that most of us are using out-dated management practices and failing to get the most out of our people.Not convinced? Consider this: 65% of people are unhappy at work, only 14% understand their company’s strategy, and 75% are seeking jobs as we speak. Now, what do you think that does for your bottom line? How we lead our people and how we solve problems and innovate, are some of the most important aspects of Management to get right. In our research, we’ve therefore looked specifically at two aspects of Management throughout history, and how these will develop in the future (Figure 1): 1. Management Approach: the style of top management, ranging from: a.Control (i. e. your boss tells you what to do and how to do it). b. Set Goals (i. e. your boss sets goals and expectations, but you have more freedom with regards to how you achieve them). c. Inspire (i. e. your boss gives you scope and freedom to innovate on both the what and the how). 2. Approach to Innovation / Problem Solving: how leaders solve strategic problems and develop new products and services. This ranged from: a. Top Down (i. e. solutions are created and come from the top) b. Top Down with Bottom Up Data (i. e. he rest of the organisation contributes information and experiences, but solutions are still created at the top). c. Participatory (i. e. solutions are created collaboratively, and throughout the organisational levels). After a century of trying to control people, processes and information, we have come to a point in organisational history where we need to recognise that what worked before just simply isn’t enough anymore. Traditional Management is fine if you want compliance, but if you want innovation and growth, you need to engage your people on a whole new level. Top down control is a thing of the past.Succeeding in today’s environment requires a management style that inspires and is participatory. Over the next couple of weeks I will discuss the future of organisations, and what it really takes to increase value creation, innovation and employee engagement in today’s business environment. | EVOLUTION OF MANAGEMENT THOUGHT| | The evolution of management thought can be studied under the following headings: 1. Pre- scientific management period. 2. Early management approaches represented by scientific management, process management theory and human relations movement. . Modern management approaches represented by behavioral science movement, quantitative approach, systems approach etc| | PRE-SCIENTIFIC MANAGEMENT PERIOD| | The real development of management thought began with the scientific management approach stated by Taylor, though some of the concepts have been developed by thinkers earlier to Taylor. Early management thoughts have come from the Roman Catholic Church, military organizations, the Cameraliasts, a group of German and Austrian public administrators and intellectuals from the sixteenth centuries.Their concepts of management were mostly related to the principles of specialization, selection of subordinates and their training and simplification of administrative procedures. In the later period, contributions were made by Charles Babbage, James Watt and Robinson Boulton, Robert Owen, Towne and Simon. Charles Babbage was professor of Mathematics at the Cambridge University and he suggested the use of accurate data obtained through rigid investigation in the management of an undertaking.James Watt Junior (1796-1848) and Robinson Boulton (1770-1842) used the management techniques such as market research and forecasting, production planning, planned machine layout, standardization of components and parts, elaborate statistical records, maintenance of control report, cost accounting data, provision of welfare of personnel etc. Robert Owen (1771-1858) managed a group of textile mills in Scotland and is well known as the promoter of co-operative and trade union movements in England. Henry S.Simon was one of those effective thinkers who advocated that in economic and social systems, the role of capital is constructive, creative and entrepreneurial other than of exploiting the resources for its own benefit. The contributions of management thinkers started above were limited mostly to the field of developing the concept to make resources more effective at the shop floor levels. These contributions were made bit by bit and in a haphazard manner and have failed to stimulate management as a distinct discipline for further study. However, the various ideas started by them have created awareness about managerial problems.A stage was set by the end of the nineteenth century for making a systematic study of management and a beginning was made by Fredrick Taylor at the beginning of the present century whose thoughts came to be known as Scientific Management. | | EARLY MANAGEMENT APPROACHES| | Scientific management: F. W Taylor, Gilberth, Lillian Gilberth, Gantt and others have made tremendous contributions to the concept of scientific management. Of all these persons, Taylor’s contribution is the most significant and because of this, he is considered as the father of scientific management. We shall give here the contributions of Taylor and some others.Fredrick Winslow Taylor (1865-1915) worked as a chief engineer in the Midvale Steel Works where he joined as a worker. Afterwards, he worked in the Bethlehem Steel Works and after retirement from his concern, he worked as a consultant. Taylor, the founder of scientific management movement, states that the object of management should be to secure the maximum prosperity for each employer, coupled with the maximum prosperity of each employee. According to Taylor, scientific management, in its essence, consists of a certain philosophy which results in the combination of four great principles of management, viz. the development of true science, the scientific selection of workers, their scientific selection and development, intimate and friendly co-operation between the management and their workmen. When management of a business unit is based on a systematic study and analysis of various aspects of work involved with a view to find out the best way of doing things, we call it scientific management of business. Broadly speaking, scientific management is the art of knowing exactly what is to be done and the best way of doing it. Taylor observed that inefficiency prevails in the organization because of three causes, viz. (a) workers feel that any increase in output would lead to unemployment, (b) defective systems of management and because of these, each worker restricts his output in order to safeguard his interests, and (c) inefficient rule of thumb efforts and wasting methods of work. The elements of scientific management are: (a) determination of the task, (b) planning of industrial operations, (c) proper selection and training of workers, (d) improvement in methods of work, (e) modification of organization, and (f) mental revolution.Determination of task or workload to each employee is on the basis of method study, routing, motion study, time study, fatigue study and differential piece- wage system. After setting the task to workers, the next step is to plan production, which requires the planning of industrial operations. This involves further considerations, viz. , what work shall be done, how the work shall be done, where the work shall be done and when the work shall be done. Proper selection and training of workers and also their correct placement have to be done by the management.Further, in order to make the workers complete the task as per the conditions set by the management, there is need for improvement in the methods of work. This involves standardization of tools and equipment, speed, conditions of work and materials. Taylor also suggested modification in the organization. This involves introduction of functional foremanship. According to this, the two functions of planning and doing are divided. He has also suggested eight functional foremen, viz. , (a) route clerk, (b) instruction card clerk, (c) time and cost clerk, (d) gang boss, (e) speed boss, (f) repair boss, (g) inspector, and (h) shop disciplinarian.For the success of scientific management, there should be a thorough change in the mental outlook of both the employees and the employer and their mutual hostility and suspicion should give place to co-operation and goodwill. PROCESS MANAGEMENT (H. Fayol 1841-1925)Around 1910, H. Fayol, a French engineer, initiated the administrative theory of management (process management) in Europe. Sheldon, Mooney and Railey, L. F . Urwick and L. Gulick also contributed a lot to the administrative theory of management. This theory is called process (functional) management and advocates of this theory belong to the process school of management.In 1916, Fayol published his book “General and Industrial management” in French, of which later and English edition was brought out. Fayol identified management as a separate set of skills or functions performed by a supervisor in an organization. He clearly distinguished the difference between technical and managerial skills an emphasized that supervisor should be efficient in both. He stated that technical ability is more dominant at the lower level of management, whereas managerial ability is more important at the higher level of management.Fayol, in his famous book, stated fourteen management principles that can capture the entire flavor of the process management theory. The fourteen principles of management are: Subordination of individual interests to material interests, authority and responsibility, discipline, division of work, remuneration of personnel, centralization, scalar chain, equity, initiative, stability of tenure of personnel, unity of command, unity of direction and espirit de corps. Fayol also stated that all operations in business organizations can be classified under six heads, viz. (a) technical production and manufacturing, (b) commercial (purchases and sales), (c) financial (financing and controlling of capital for its optimum use), (d) security (protection of property and persons), (e) accounting (stock-taking, balance sheet, costing and statistics), and (f) managerial (planning, organizing, communicating, co-coordinating and controlling). | CHECK YOUR PROGRESS| | 1. Fill in the blanks with appropriate words: * Planning, organizing, staffing, directing and controlling are functions of ————-. * ———- is concerned with policy making while ——is concerned with implementation of policy. The process of dividing authority and responsibility among executive is called the creation of ———. * —— was the founder of scientific management movement. | | Human relations movementElton Mayo, who is considered to be the founder of human relations movement, and his associates, conducted the Hawthorne Studies in the Hawthorne plant of Western Electric Company, USA during1927-1932. They stated that the employees’ morale had a great influence on productivity and the manager should treat them as social beings instead of economic beings or simply as cogs of a wheel.For solving any management problem, the manager should understand group attitudes and psychology, as employees are members of a group. His approach and theory emphasized the importance of human and social factors and also individual as well as group relationships, while the classical theory of Taylor and Fayol gave importance to job content and management of physical resources. This theory served to focus attention on the social side of the work and man, as opposed to the economical and technical aspects.This theory is also criticized on the ground that there is no direct connection between morale and productivity, hence the research in Hawthorne plant had a management bias, and that the samples were too small. In spite of these criticisms, the contribution of human relations remains and are being applied even today by managers. | | MODERN MANAGEMENT APPROACHES| | BEHAVIORAL SCIENCE MOVEMENT:  The behavioral science approach through its research studies of individual behavior and motivation indicated that the elation between morale and productivity was oversimplified and there was no direct or deep connection between morale and productivity. Behavioral science experts made a further refinement of human relations movement and also covered a much wider scope in interpersonal roles and relationships. The behavioral science movement which started after 1940 emphasized the importance of individuals and their interpersonal relationship, psychology of the individuals as related to personal needs and motivation and motivational potential in people.The important contributors to the behavioral science movement are A. Maslow, F. Hertzberg, V. Vroom and D. McGregor. While Maslow developed a need hierarchy to explain human behavior within an organization, Hertzberg and Vroom developed motivational models, which explained the causes of human behavior and motivation in business. Behavioral science movement has drawn heavily on the work of Maslow to explain human behavior and the dynamics of motivation process. McGregor developed his two theories, viz. , Theory X and Y and also explained certain basic assumptions about the human element.The classical theory reflected almost all the aspects of Theory X while the behavioral approach theory of management reflected almost all the aspects of Theory Y. ELEMENTS OF NEO-CLASSICAL THEORIES : This theory may be stated as follows. It may be noted here that the theories started by Taylor and Fayol are called by some writers as Classical theories while the theories sated by the human relations movement and the behavioral science movement are called neo- Classical theories. Henri Fayol, the father of principles of management, has classified managerial functions as follows: a.Planning, including forecasting, b. Organizing c. Commanding d. Coordinating, and e. Controlling. A brief description of the various functions of management is given in the next unit. | | LET US SUM UP| | In this unit we have learnt about the meaning and importance of management and its various implementations in different fields. Concept of management has become universal and no organization can survive without it. Management consists of getting things done through others by directing their efforts in an integrated and coordinated manner for achievement of business objectives.It is a process consisting of   functions such as planning, organizing, actuating and controlling the business operations in such a manner as to attain predetermined goals. The evolution of management thought can be classified into three stages, viz, (i) pre-scientific management period, (ii) early management approaches represented by scientific management, process management and human relation management and (iii) modern management approaches represented by behavioral science movement, quantitative approach, social system approaches etc. Each of these approaches has made a distinctive contribution to management theory. |