MAJOR SCHOOLS OF MANAGEMENT THOUGHT AND

THEIR EVOLUTION
Importance Of Theory
This lesson mainly traces the history behind the development of
management theory. The theories and history ofmanagement are
important to managers for various reasons.
History helps managers understand current development and avoid
mistakes of the past.
History and theory together foster an understanding and appreciation of
current situations and developments and facilitate the prediction of
future conditions.

Theory helps managers organize information and therefore approach

problems systematically. Without theories all managers would have are,
intuition, hunches and hopes which may not be useful in todays very
complex and dynamic organizations. However there is not yet any
verified and generally accepted theory of management that managers can
apply in all situations. Therefore managers must familiarise themselves
with the major theories that exist.

Ancient Management
As a scientific discipline management is only a few decades old.
However indications of management in use go
back thousands of years into ancient civilizations. For example one of
the earliest recorded uses of management
is the Egyptians construction of the pyramids. It is also recorded that the
Chinese used management in
government from as early as 1500 B.C.
The Greeks also used management in government from as early as 1000
B.C.
Babylonians have also been recorded to have used management in
government from as early as 2700 B.C.
The management of the Great-Roman empire could not have succeeded
without use of management. It is recorded that from about 800 B.C the
Romans were practising organizing principles. A lot of bureaucracy for
instance was in practice in the ancient Roman Army. The works of
people like Socrates (400 B.C) and Plato (350B.C.) all indicate some
elements of management. However despite this widespread practice of
management there was little interest in management as a scientific
discipline until a century ago. It was not until the late nineteenth century
that large businesses requiring systematic administration started to
emerge. Also before the late 19th century governments and military
organizations were not interested in the profits so they paid little
attention to efficiency and effectiveness. Our study of the theory of
management will focus on the three well established schools of
management theory.

 The Classical School

 The Behavioural School
 The Management Science School

THE CLASSICAL SCHOOL

This school of thought emerged around the turn of the twentieth century.
It is divided into two sub areas: Scientific management, which
historically focused on the work of individuals and classical organization
theory (administrative management which was concerned with how
organizations should be put together).

SCIENTIFIC MANAGEMENT
The main objective of Scientific Management in the early days was to
determine how jobs could be designed in order to maximise output per
employee (efficiency). The main contributor to scientific management
was Frederick W. Taylor until the Husband Team of Frank and Lillian
Gilbreth also added more light to scientific management.

(a) Frederick W. Taylor and Scientific Management

Taylor was an Industrial Engineer who worked in the United States at a
time when industries were facing shortage of skilled labour. For
factories to expand productivity, ways had to be looked for to increase
the efficiency of employees. Management faced questions such as,
whether some elements
of work could be combined or eliminated, whether sequence of jobs
could be improved or whether there was "one best way" of doing a job.
In trying to answer these questions Taylor slowly developed a body of
principles that constitute the essence of scientific management.
Taylor's first job was at Midvale Steel Company in Philadelphia:While
here Taylor analysed and timed steel workers movements on a series of
jobs. With time he was able to establish the best way to do a particular
job. But he noticed the workers did not appreciate the speed factor
because they feared that work would finish and they would be laid off.
So Taylor encouraged employers to pay the more productive workers at
a higher rate based on the profits that would result. This system is called
the differential rate system. Taylor was encouraged by the results of his
work and decided to become a private consultant. His most significant
work was while he was consulting for two companies: Simonds Rolling
Machine Factory and Bethlehem Steel Corporation.
At Simonds he studied and redesigned jobs, introduced rest breaks and
adopted a piece rate pay system. In one operation he studied 120 women
employed in tedious work with long working hours. The work involved
inspecting bicycle ball bearings. Taylor started by studying the
movements of the best workers and timed them. Then he trained the
others in the methods of their more effective co-workers and either
transferred or laid off the inefficient ones. He introduced rest periods
and the differential rate system and the results were that accuracy of the
work improved by two-thirds, wages rose by eighty to hundred percent,
worker morale increased and thirty five inspectors were now able to do
work previously done by 120.
At Bethlehem Steel Taylor and a co-worker studied and timed the
operations involved in unloading and loading railcars. At the time each
worker earned $1.15 per day unloaded an average of 12 1/2 tons. Taylor
introduced rest periods in the day and realised that each man could
handle about 48 tons a day. He set a standard of 47 1/2 tons and a rate of
$1.85 for those who met the standard. The results were increased
efficiency.

However despite his achievements trade unionists and workers started to

resist the ideas of Taylor and in defending his philosophy Taylor
outlined that it rested on four major principles.

 The development of a true science of management so that for

example the methods for performing each task could be
determined.
 The scientific selection of the worker so that each worker would be
given responsibility for the task for which he/she was best suited.
 The scientific education and development of the worker, and
 Intimate, friendly cooperation between management and labour.

In conclusion Taylor said that the principles could only succeed if there
was a complete mental revolution on the part of both management and
labour to the effect that they must take their eyes off the profits and
together concentrate on increasing production, so that the profits were so
large that they did not have quarrels about sharing them. He strongly
believed that the benefits from increased productivity would accrue to
both management and labour.

(b) The Gilbreths

Frank (1888-1924) and Lilian (1878-1972) were a husband and wife
team who also contributed to scientific management. Lilian focused her
studies on ways of promoting the welfare of the individual worker. To
her, scientific management has one ultimate aim: to help workers reach
their full potential as human beings. Lilian also assisted Frank in the
areas of time and motion studies and industrial efficiency and was an
earlier contributor to personnel management. Frank who began his work
as an apprentice bricklayer, developed a technique that tripled the
amount of work a bricklayer could do in a day. He studied motion and
fatigue and said that they were intertwined. Every motion that was
eliminated also reduced fatigue. Both Gilbreths argued that motion study
would raise morale because of its obvious physical benefits. They
developed a three position plan of promotion that was intended to serve
as an employee development program as well as a morale booster.
According to this plan a worker would do his or her present job, prepare
for the next one and train his or her successor all at the same time. Thus
every worker would always be a doer, a learner and trainer and hence
workers would look forward to new opportunities.

(c) Henry L. Gantt (1861-1919)

Henry Gantt who was an associate of Taylor developed the Gantt Chart -
a device for scheduling work after a span of time. Gantt also developed
the bonus system of paying workers. Both the Gantt Chart and the bonus
system of paying workers are in use in todays complex organizations.

Limitations of Scientific Management

 During Tayor’s time, the mental revolution he advocated rarely

came about and often increased productivity and led to layoffs.
 It assumed people were rational and therefore motivated only by
material gains. Taylor and his followers overlooked the social
needs of workers.
 They assumed that one had only to tell workers what to do to
increase their earnings and they would do it. But people have a
need for other things other than money e.g. recognition
 They also overlooked the human desire for job satisfaction and
workers became more willing to go out on strike over job
conditions than salary.

So the scientific model of the worker as a rational being interested only

in higher wages became increasingly inappropriate as time went on and
employer and labourers got increasingly dissatisfied with it.
An evaluation of scientific management indicates that scientific
management was developed to achieve two objectives to increase
workers' productivity and to improve workers' economic welfare. The
first objective was achieved because the methods of scientific
management such as time and motion, piece rate incentives, Gantt Chart
and production standardization were accepted by industries. The second
objective was however not fully achieved. Managers used scientific
management to improve workers' productivity but they often did not see
the benefits. Productivity often led to layoffs or changes in piece rates,
so that workers had to produce more for the same income. The
enthusiasm for scientific management ended around 1930.

PRINCIPLES OF WORK MANAGEMENT FROM THE

SCIENTIFIC MANAGEMENT SCHOOL OF THOUGHT.

THE CLASSICAL ORGANIZATION THEORY

This is the other branch of classical management. Classical organization
theory grew out of the need to find guidelines for managing complex
organizations such as factories. Henry Fayol is recognised as the father
of classical organization theory because he was the first man to
systematize managerial behaviour. Another contributor to classical
organization theory was Max Weber.

(a) Henry Fayol (1841-1925) and the Classical Organization Theory

Fayol believed that sound managerial practice falls into certain patterns
that can be identified and analyzed. Fayol who was trained as a mining
engineer worked his way from a junior executive to director of the
French Coal and Iron Combine Company. Fayol often confessed that he
did not attribute his success to his personal abilities but rather to the
methods that he practised. He strongly believed that management was
not a personal talent but a skill like any other and therefore it could be
taught or learned. At the time it was generally believed that managers
were born! Fayol’s observation on principles of general management
first appeared in 1916. He found out that the activities of an industrial
undertaking fall into six groups.
 i. Technical (Production)
ii. Commercial (Buying, selling, exchange)
iii.Financial (Search for use of capital)
iv.Security (Protection of employees property)
v. Accounting (Record, stocks of cost, profits, liabilities etc)
vi.Managerial

Fayol's main interest was on the last activity. He defined management in

terms of five functions:

 Planning which means choosing a course of action that will help

the organization achieve its goals.
 Organizing meaning mobilising resources to put plans into action
 Commanding means providing direction to employees and getting
them to do their work.
 Coordination means ensuring harmony in the use of resources
 Controlling means monitoring the plans to ensure that they are
being followed.

Fayol's model of management remains an approach to management

today. Fayol also looked into the qualities
that are required by management and concluded that they depended on
the level of the person in the enterprise.
These were physical, mental, moral, educational, technical and
experience.
Fayol also developed fourteen principles of management which he felt
should be applied by managers at the
operational level. He listed these principles as:

i. Division of labour: Work be divided among workers

ii. Authority and responsibility: Managers need authority to
carry out responsibility
iii. Discipline: Workers should respect the rules and regulations
of the organization
 iv. Unity of Command: An employee would receive commands
from only one supervisor.
v. Unity of Direction: One manager should have one plan for
each organizational objective.
vi. Individual Subordination: The interests of the organization
should come before individual interests.
vii. Remuneration: Pay should be fair and good performance
should be rewarded.
viii. Centralization: There would be one point in the organization
that exercises overall control.
ix. Scalar Chain: Authority should flow downwards from top to
bottom through the chain of command.
x. Order: People and materials should be in the right place at the
right time.
xi. Equity: Managers should be fair in dealing with employees.
xii. Stability of tenure: Efficiency can be achieved by a stable
labour force.
xiii. Initiative: Employees should be given freedom to act and be
innovative.
xiv. Espirit de Corps: In union there is strength, teamwork should
be encouraged. Management is universal among all
organizations and Fayol argued that those with a general
knowledge of the management functions and principles can
manage any type of organization. He further advocated that
these principles/functions can be learned by anybody who is
interested. But qualities such as physical health, mental
vigour, moral character, which is essential for management,
cannot be learned - one must possess them. Any individual
who possesses such qualities can acquire managerial skills by
learning the principles of management through formal
training.

(b) Webers Bureaucracy (1864-1920)

Weber was a German sociologist who was very sensitive to the abuses
of power by people in managerial positions. In order to reduce these
abuses of power Weber proposed an organizational system that would be
run by rules and regulations commonly known as Bureaucracy. Under
Bureaucracy an effective organization had a hierarchical structure based
on the formal authority and where people were guided by rational rules
and regulations rather than the arbitrary acts by those in management.
Weber believed that such rested on the following basic principles:

 managers should strive for strict division of labour and each

position should be staffed by an expert in that area, there
should be a consistent set of rules that all employees must
follow in performing their jobs (the rules must be impersonal
and rigidly enforced),
 there should be a clear chain of command
• everyone should report to one and only one direct superior
• communication should always follow this chain and never
bypass individuals,
 business should be conducted in an impersonal way (managers
must maintain an appropriate social distance from their
subordinates and not play favourites,
 Advancement within the organization should be based on
technical expertise and performance rather than seniority or
favouritism,

Legal authority and power—authority and power rest in the institution of

office. The power an individual holds is legitimised in the office and
does not personally belong to him.
An Evaluation of the Classical Organization Theories (also known as
Classical Administrative Theories)
The classical administrative theories of Fayol and Weber have had a lot
of impact on management even today. Many current textbooks in
management are organized around Fayol's theoretical framework.
Fayol's main contribution included the concepts of the Universality and
transferability of managerial skills. Even today it is widely accepted that
management skills apply to all types of group activity. The concept that
certain identifiable principles underlie effective managerial behaviour
and that these principles can be taught also continues to have validity
today. Another contribution of these theories is that today many complex
organizations are managed by the bureaucratic rules proposed by Weber.
These theories however have certain limitations

 First these theories assumed that all organizations can be managed

by the same set of rules and regulations. They failed to appreciate
the difference between various organizations for example you
cannot run a government department on the same rules used in a
social organization like a club or a private company.
 Secondly, the classical approach can be effective under a stable
environment, but with frequent changes (rampant today) it proves
ineffective as conditions require modifications in management
principles and bureaucratic rules. Following outdated rules and
principles can be counterproductive.
 Third the classical theories undervalued the human element in
organizations. It saw people as passive and capable of reacting
only to organizational rules and economic incentives. It ignored
such qualities as attitudes, emotions, creativity and initiative. It
failed to accommodate the fact that people are capable of going
against rules. In a bid to cover these inadequacies in the classical
theories the human relations movement and the behavioural
science approaches were developed.

THE BEHAVIOURAL SCHOOL OF MANAGEMENT THEORY

Although most of the early theories ignored or neglected the human
element in the workplace a few individuals dwelt on the basic
framework of the classical school and came up with more people
oriented theories. Notable among these were Mary Parker Follet and
Chester Barnard, Hugo Munsterberg and Elton Mayo.
(a) Mary Parker Follet (1868-1933)
Follet recognised the potential importance of the individual but
advocated that no one could become a whole person except as a member
of a group. She believed that the artificial distinction between managers
as order givers and subordinates as order takers obscured the natural
relationship that should have existed between them as members of one
group.
She strongly felt that for management and labour to become part of one
group the traditional views on workers would have to be abandoned, for
instance leadership should not come from the power of formal authority
(as traditionally believed) but from the persons with greater knowledge
and expertise.

(b) Chester L Bernard (1886-1961)

Bernard used his extensive knowledge in sociology and philosophy to
develop certain theories on organizational behaviour. He for instance
said that people come together in formal organizations to achieve things
they cannot achieve working alone. As they pursue the goals of the
organization they must also satisfy their individual needs. He strongly
believed that for an organization to function effectively, a balance must
be maintained between the organizational goal and the goals of the
individuals in the organization.
(c) Hugo Munsterberg (1863-1916) and the birth of Industrial
Psychology
He is remembered as the father of industrial psychology and published
his book "Psychology and Industrial Efficiency (1913). He suggested
that productivity could be increased through the following ways:

 Finding the best possible person i.e. the worker whose mental
ability is the best for the job.
 Finding the best possible work i.e. the ideal psychological
conditions for maximising productivity and
 Through use of psychological influence i.e. the best possible effect
to motivate employees.
Like Taylor he advocated for more science in management but being a
psychologist he argued that the proven techniques of psychology for
measuring individual differences be applied to industrial problems. He
developed psychological tests for fitting the right person to the right job
thus implementing Taylor's idea to select workers scientifically.
Generally Munsterberg sought to find the best person for a job and
studied and designed the job itself to match it more closely with human
characteristics and abilities. He suggested that this would reduce the
almost limitless waste of human resources and would return large
economic benefits to both the firm and the employees. Like Taylor he
was also interested in the mutuality of interests between managers and
employees and argued that his approach was even more strongly aimed
at workers and through it he hoped to reduce the working time, increase
their wages and raise their standard of living.

(d) Elton Mayo (1880-1949) and the human relations movement

Elton Mayo is referred to as the father of human relations movement.
This trend that started in 1920 up to 1950 concerned itself with the
treatment of psychological satisfaction as the primary management
concern. Human relations is used to describe how managers interact with
subordinates when the management of people leads to better
performance then there is good human relations. When morale and
efficiency deteriorate human relations in the organization is 'bad'.
Managers need to know why employees behave the way they do and
what psychological factors motivate them if they are to create good
human relations. The main catalyst of the human relations debate was
the Hawthorne studies, conducted by Fayol and his friends.

Hawthorne Experiments:
These were conducted by Elton Mayo and his associates from Harvard
University. The studies were at the Hawthorne Plant of Western Electric
Company (US) from 1927 to 1932.
Earlier on other researchers had conducted experiments using two
groups - an experiment group which was subjected to changes in the
lighting (illumination) and a control group whose lighting was kept
constant. When lighting conditions were improved productivity went up,
but even when lighting conditions were worsened productivity also went
up. This was puzzling but what complicated the problem further was that
the control groups productivity increased as lighting was altered for the
experiment group.
In an attempt to solve this puzzle Mayo triggered off the human relations
movement. In a new experiment Mayo used two groups of 6 women
each. For the experiment group such variables as salaries were changed,
rest periods were added, work hours were shortened and groups were
allowed to suggest the changes they wanted made. Again output went up
for both groups.
Mayo ruled out financial resources as the causes since the control groups
salary remained the same. They concluded that a complex emotional
chain reaction had triggered the increase in productivity. They felt that
because the members of the groups had been singled out for special
attention, they developed a group pride that motivated them to improve
productivity. The experiment made Mayo conclude that special attention
(like being selected in a study exposing one to constant contact with top
management) caused people to increase their efforts - a phenomenon
that has come to be referred to as the Hawthorne Effect.
Mayo further tried to establish why such special attention should cause
people to increase their efforts. He found out that the special
environment of employees informal work groups have great influence on
productivity. Mayo concluded that workers are human beings who are
affected more by social interactions. He felt that the concept of "social
man" had to replace the old concept of "rational man" advocated by the
classical theorists.

Contributions and Limitations of the Human Relations Approach

Mayo's human relations had major impacts (contributions) on
management thinking and practices.
  It focused on human factors as an important managerial variable
which resulted in more and more researches paying attention to the
human element in organizations.
 It led to improvements in employee welfare in many organizations
 Labour gained more economic and political power acting through
trade unions.
 Mayo also highlighted the importance of a manager's style and
therefore revolutionalized management training, and managers
started thinking more in terms of group processes and group
rewards to supplement individual rewards.
The human relations movement also had three major limitations:

 In viewing human factors as the single most important

organizational variable it committed the mistakes of earlier
theories, searching for one best way of managing. The scientific
management method had tried to search for the one best way of
designing jobs, while the administrative theory had searched for
the one best way to arrange organizational activities.
 The human relations theorist also viewed workers as 'social beings'
motivated by social rewards, but this was also too simplistic a view
of human beings who are complex and motivated by a variety of
factors.
 They also assumed that satisfied workers would be productive and
this made firms introduce fringe benefits e.g. vacations but this
was not always true - benefits did not always result in increased
productivity. This movement however paved the way for the
development of behavioural science of the 1960s and 1970s.

The behavioural scientists like Argyris, Maslow and McGregor believed

that the concept of "self actualizing man explained human behaviour
more accurately (the behavioural scientist theories will be covered later
under employee motivation.
THE QUANTITATIVE SCHOOL OF MANAGEMENT
This is the third school of management thought and it focuses on
quantitative or measurement techniques and concepts that are relevant to
management. It mainly originated with the British Military in the World
War II. Britain which was faced by many problems of warfare sought to
find better ways to deal with issues like troop movement, arms
production etc. This school has three branches:

 Management Science
 Operations Management and,
 Management Information Systems

Management Science
Management Science mainly concerns itself with the development of
mathematical and statistical tools and techniques that can be used to
improve efficiency. Breakthroughs in computers and other forms of
electronic information processing have enhanced the application of
management science.
Operations management
Is somewhat like management science but it mainly focuses on
application. Main concern is the processes and systems that an
organization uses to transform inputs into outputs.
Therefore it will deal with decisions like plant location, plant layout and
inventory control and distribution of finished products.
Management Information System (MIS)
MIS is a system created specifically to process, store and provide
information for managers in order to improve decision making.

Evaluation of the Quantitative School

The techniques of management science are extensively used to solve
problems in most organizations today.
The tools and techniques can greatly enhance a manager's decision-
making, planning and control and improve their organization efficiency
and effectiveness. However many of the key variables in organizations
e.g. people, office politics, feelings, attitudes, motivation, personalities
leadership cannot be quantifiable. Yet these factors are critical in
decision-making.

CONTEMPORARY MANAGEMENT THEORIES

In the recent past several new perspectives about management have
emerged. These are still evolving and have not attained the status of
schools of thought but they still provide useful insights into the
understanding of management.
Among these we have the contingency theory, systems theory,
management theory Z, management excellence and process theory.

a) Contingency Theory
This theory argues that appropriate management actions depend on the
situation prevailing at the time. According to this theory there are no
ready made universal answers to management rather the decision that a
manager will make will depend on the situation. Every situation that a
manager will confront will be somewhat different and therefore will
require different reactions.

b) Systems Theory
This theory tries to look at how organizations function and operate as a
system that is a subsystem of a much bigger system. It is the process by
which an organization receives feedback. A system is an interrelated set
of elements that function as a whole. It has four basic parts; it receives
inputs, from the environment, it transforms the resources into outputs
(finished goods and finally receives feedback from the environment).
The feedback from the environment serves as a source of information
about the performance of the firm and hence it serves as a good basis for
later decision making. (This notion of a system being only part of a
greater system is very useful to management and stands out as the
greatest contribution of the systems theory). The other useful concepts of
the systems theory are the concepts of Synergy Entropy and Equifinality.
Synergy suggests that two people or units can achieve more working
together than working individually. Entropy is what happens when firms
adopt a closed-system approach - they fall and die. Equifinality is the
idea that two or more strategies (paths) may lead to the same
achievements (place).

c) Theory Z
The theory Z of management is a very new approach to management. It
has not yet withstood the test of time and it is not certain therefore to
evolve into a fully developed theory of management.
Theory Z was popularized in the early 80's by Willian Ouchi. During
this time a great deal of attention was being given to the success of
Japanese Companies in America and in world trade and differences
between American and Japanese management practices.
Ouchi studied succeeding American firms in order to determine why and
how they continued to be successful when other companies were losing
ground. He found that most American companies followed a set of
business practices which he called type A (A standing for American).
The typical Japanese company followed a different set of practices
called J (J standing for Japanese). But the highly successful American
firms followed neither type A or type J management. Rather they used a
modified approach that capitalised on the various strengths of type J
model and also used type A method when cultural factors dictated.
Ouchi attributed the success of these companies to their use of the
modified approach. He concluded that a flexible management position
incorporating the strengths of both American and Japanese models
would lead to successful competition. This approach he called the
Theory Z of management.

Some Aspects of Japanese Management

 The practice of management always reflects the culture of a
society. Japanese management has certain aspects which are
predominantly borrowed from their culture.
  Japanese managers place much more emphasis on generating
harmony at all levels of the firm.
 Japanese managers more than those from other cultures to a great
extent tend to place group goals ahead of individual goals. Unlike
American firms they do not overemphasize the big positions in the
company.
 Japanese management is characterised more by consultation than
by direct order. Even low level officers help in formulating
policies. (This however, results in slow decision making).
 Japanese managers rarely reject any contributions by subordinates
flatly because to do so is impolite and a threat to their culture of
harmony.
 The Japanese worker usually signs for life with a company. Labour
turnover is very low in Japanese firms. Companies try hard to keep
their workers happy.

d) Management Excellence
This theory was advocated by Thomas Peters and Robert Waterman in
the mid 80's. After studying various American films they concluded that
successful managers were characterised by eight attributes:

• a bias for action

• staying close to the customer
• autonomy and entrepreneurship
• productivity through people
• hands on-value driven management
• remaining with the business: stick to the knitting.
• simple form and lean staff
• climate of dedication to the central values

Because these theories have not been tested and are still evolving, their
validity cannot be ascertained but they still do have useful information
for managers of today's dynamic and complex organizations.
REINFORCING QUESTIONS

1. How would you define the term management?

and describe its key characteristics.

2. Describe management in terms of its functions.

3. Is management an art or science? Explain.

4. Describe management in terms of the management roles.

5. How do you measure successful management?