Evolution of Management Theory - Part 1

Have you ever wondered what management looked like during the late 1700s to the late 1800s during the Industrial Revolution?
During this era, more factories were coming up and the various sectors were experiencing industrial growth such as the Power Sector, Transportation sector, and even machinery innovation.
There was a need to increase productivity rate and at the same time improve efficiency. There was no real basis for the selection of workers.
Managers: Hey man, we would be hiring 1000 factory workers

Random person: really, I'm interested

Manager: Alright, you got the job, you can start immediately.

Random Person: Alright, thanks

The workers were not trained on how to carry out the task and this led to a low production rate.

There was no standardized technique for performing duties.

This marked the beginning of the Classical approach

Three Men contributed immensely popular to this classical approach.

Max Weber

Frederick Taylor

Henri Fayol

I'm sure you are wondering, what about the others like Fritz Roethlisberger, Douglas MacGregor, Elton Mayo, Abraham Maslow, and other Scholars who also contributed to this theory? Well, keep reading and you will found out ;-)

Max Weber
He was a German sociologist and a political Economist. He studied the way a country is being run and decided. He believed an organization would work effectively if it worked like a legal system, this was the application of Legal-Rational Authority into an Organization.

He is responsible for bringing what is known today as the BUREAUCRATIC MANAGEMENT APPROACH.

This approach had the following characteristics

Clear rules to govern performance- just like how the legal system works, there are rules put in place to control how things are done.

Standardized guidelines to determine who leaves and who - if you didn't meet the qualification requirement you would not be hired and if you break any of the rules set in place, you would be punished or fired.

One authority should be defined to the position he/she currently occupies- if this person leaves this position, he loses that authority and the person who replaces him there would take up the authority.

There was division of labor - different people carrying out different task

There was a need to separate your personal life from your work life - once you are at work, your decision shouldn't be based on personal feelings to avoid being biased.

This approach made a lot of improvement in terms of increased productivity but was still lacking in some areas

No room for innovation due to the strict rules and regulations

It felt like a trap that threatened their individual freedom

Most people still attempted to take advantage and we're being biased with the hiring procedure.

If you are having difficulty remembering this principle, just look at the Military sector and how it's being run. You need training and must meet the special requirement, breaking rank is a violation and you can't think for yourself unless you are ordered to. You have to set your personal feelings aside when you are being ordered to carry out a particular task. Do you get the picture?

Frederick Taylor
He was a Mechanical Engineer and management consultant. As a scientist himself, he observed that there were a lot of factories coming up every day with more pressure on production yet there was no standardized way of carrying out such tasks even with their complexities.

So, he set out to solve this problem to improve productivity and maximize efficiency.

He applied Science to work, that was how the SCIENTIFIC MANAGEMENT APPROACH was introduced.

This approach had the following characteristics

Applying Scientific principle to work - he was a scientist, what else was he going to do?

There was also division of labor- everyone had a particular role to play

There were special training and method of selection in hiring workers - the most productive workers were paid more and the employees who did not meet the new standard were fired.

The popular "Time and Motion" studies- this was a scientific experiment to determine how to carry out a particular task with the least amount of motion in the least amount of time.

He was more concerned with the "one best way" to carry out a particular task.

The result of this approach is as follows:

There was a massive increase in productivity - the productivity rate was really high, from 100% to as high as 400%

More works were accomplished even with fewer people and the company made even more profit.

The products were consistent and high quality.

There were also some limitations to this principle.

Most companies couldn't afford to pay the employees - due to the fewer people working to carry out each task, there was a need to increase the pay, most organizations couldn't keep up and they went out of business

The philosophy where the manager's works was to "think" and the worker's job was to "do" became a norm

This approach deskilled a lot of workers hence making them expendable.

It made me people work as though there were a part of a machine.

A good example of an organization that exploited this approach positively was Ford Motors. Henry Ford is no doubt a genius affecting perfecting the assembly line and applying this scientific approach in carrying out the task of assembling a car. Everyone had a particular role they played in assembling the parts and it improved productivity. He took the initiative of increasing the worker's pay, hence the reason they are still in business to this day.

Henri Fayol
He was a French mining engineer by training.

He outlines the 6 activities of the industry

1. Technical

2. Commercial

3. Financial

4. Security

5. Accounting

6. Managerial

He noticed that much effort focused on training the workers but none was focused on training the managers so his theory was focused more on the administrative aspect hence the ADMINISTRATIVE APPROACH.

He outlined 5 managerial activities

Planning - a good manager should be able to set a goal and a means of achieving those goals

Organizing - a good manager should be able to select the right man for the right job

Command - a good manager has to be able to oversee and lead the members of the organization

Coordination- a good manager should be able to harmonize and facilitate work among the various departments in the organization

Control - a good manager should be able to manage all accounting and quality control as well as ensuring compliance to the laid down standards.

He was convinced that if a manager could do these 5 things, the production rate would go up.

He didn't stop here, he went further to lay down the 14 principles of management.

Division of work - distribution of work to improve productivity

Authority and Responsibility - the right to give orders and exact obedience

Discipline- obedience to rules and punishment of offenders

Unity of command - an employee should be able to receive orders from those ahead in the chain of command

Unity of direction-one goal, one plan

Subordination of individual interest to general interest

Remuneration- people should be rewarded fairly based on their additional effort towards achieving organizational objectives.

Centralization- it had to do with figuring out the balance between the various department in an organization and making decisions

Scalar-chain- must follow the chain of command

Order- the right man in the right place

Equity- equality of treatment

Stability of tenure and personnel- stay in their job if they are good at it

Innovation- encouraging employees to take initiative

Esprit De corps- unity and harmony.

Henri Fayol in his book pointed out that he wasn't seeking to create a new approach but to create a foundation for future Scholars to come up with more efficient management.

The Administrative approach is not without flaws

The major limitation of the administrative management approach lies in the fact that the managerial prescriptions of the approach need to be adjusted to fit environmental, technological, and personnel differences.

Reference

Classical Management Approach

Max Weber Bureaucracy

Henri Fayol Principles of management

Frederick Taylor Scientific management

General and industrial management by Henry Fayol

Bureaucratic Theory by Max Weber

Scientific Management in Transition:Frederick W Taylor at Johnstown, 1896.