L2 EvolutionofManagementTheories

The Evolution of
Management
Theory
Prepared by:
MARY KEITH B.
GONZALES
SHST-II
The Evolution of Management
Theory
Job Specialization and
the Division of Labor
Adam Smith (18th century economist)
Observed that firms manufactured pins in one of two
different ways:
• Craft-style - each worker did all steps.
• Production - each worker specialized in one step.
Realized that job specialization resulted in

much higher efficiency and productivity
• Breaking down the total job allowed for the division of labor in
which workers became very skilled at their specific tasks.
Scientific Management Theory
Defined by Frederick Taylor in the late 1800’s
•Wanted to replace “rule of thumb”
•Sought to reduce the time a worker spent on each
task by optimizing the way the task was done.
Scientific Management
The systematic study of the
relationships between people and tasks
for the purpose of redesigning the work
process for higher efficiency.
Four Principles of Scientific
Management
1) Study the ways jobs are performed now and
determine new ways to do them.
• Gather detailed time and motion information.
• Try different methods to see which is best.
2) Codify the new methods into rules.
• Teach to all workers the new method.
3)Select workers whose skills match the rules.
4)Establish fair levels of performance and pay a
premium for higher performance.
• Workers should benefit from higher output
Administrative Management Theory
Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.
Max Weber
Developed the concept of bureaucracy as a
formal system of organization and administration
designed to ensure efficiency and effectiveness.
Weber’s
Weber’s
Principles
Principles of
of
Bureaucracy
Bureaucracy
Rules, SOPs and Norms
• Rules – formal written instructions that
specify actions to be taken under different
circumstances.
• Standard Operating Procedures (SOPs) –

specific sets of written instructions about how
to perform a certain aspect of a task.
• Norms – unwritten, informal codes of conduct

that prescribe how people should act in
particular situations.
Fayol’s Principles of Management
1. Division of Labor
- allows for job specialization.
2. Authority and Responsibility
– both formal and informal authority
resulting from special expertise.
3. Unity of Command
– Employees should have only one
boss.
4. Line of Authority
–A clear chain of command from top to
bottom of the firm.
5. Centralization
–The degree to which authority rests at the
top of the organization.
6. Unity of Direction
–A single plan of action to guide the
organization.
7. Equity
- The provision of justice and the fair and
impartial treatment of all employees.
8. Order
- The arrangement of employees where they will
be of the most value to the organization and to provide
career opportunities.
9. Initiative
- The fostering of creativity and innovation by
encouraging employees to act on their own.
10. Discipline
– Obedient, applied, respectful employees are
necessary for the organization to function.
11. Remuneration of Personnel
– An equitable uniform payment system that
motivates contributes to organizational success.
12. Stability of Tenure of Personnel
– Long-term employment is important for the
development of skills that improve the
organization’s performance.
13. Subordination of Individual Interest to the
Common Interest
– The interest of the organization takes precedence
over that of the individual employee.
14. Esprit de corps
– Comradeship, shared enthusiasm foster devotion
to the common cause (organization).
Behavioral Management Theory
Behavioral Management
–The study of how managers should behave

to motivate employees and encourage
them to perform at high levels and be
committed to the achievement of
organizational goals.
–Focuses on the way a manager should
personally manage to motivate employees.
Behavioral Management
Mary Parker Follett
Concerned that Taylor ignored the
human side of the organization
• Suggested workers help in analyzing their

jobs.
• If workers have relevant knowledge of the
task, then they should control the task.
Theory X and Theory Y
Douglas McGregor proposed the two
different sets of assumptions about workers.
Theory X assumes the average worker is lazy,
dislikes work and will do as little as possible.
• Managers must closely supervise and
control through reward and punishment.
 Theory Y assumes workers are not lazy,
want to do a good job and the job itself will
determine if the worker likes the work.
• Managers should allow workers greater
latitude, and create an organization to
stimulate the workers.
Management Science Theory
An approach to management that uses
rigorous quantitative techniques to maximize the
use of organizational resources.
–Quantitative management — utilizes linear
programming, modeling, simulation systems
and chaos theory.
–Operations management —techniques used
to analyze all aspects of the production
system.
Management Science Theory
–Total Quality Management (TQM) —

focuses on analyzing input, conversion,
and output activities to increase product
quality.
–Management Information Systems
(MIS) — provides information vital for
effective decision making.
Organizational Environment Theory
Organizational Environment
The set of forces and conditions that operate
beyond an organization’s boundaries but affect a
manager’s ability to acquire and utilize resources.
The Open-Systems View
Open System - A system that takes resources for
its external environment and converts them into
goods and services that are then sent back to
that environment for purchase by customers.
Contingency Theory
• “There is no one best way to organize”

• The idea that the organizational
structures and control systems
manager choose depend on—are
contingent on—characteristics of the
external environment in which the
organization operates.
Type of Structure
1. Mechanistic Structure
– Authority is centralized at the top. (Theory X)
– Employees are closely monitored and managed.
– Can be very efficient in a stable environment.
2. Organic Structure
– Authority is decentralized throughout the
organization. (Theory Y)
– Control is much looser
– Reliance on shared norms is greater
– Works best when environment is unstable and
rapidly changing
THANK YOU…

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The Evolution of

Realized that job specialization resulted in

• Standard Operating Procedures (SOPs) –

• Norms – unwritten, informal codes of conduct

–The study of how managers should behave

• Suggested workers help in analyzing their

–Total Quality Management (TQM) —

• “There is no one best way to organize”

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