2.1 INTRODUCTION
Organized endeavors, directed by people, responsible for planning, organizing,
leading and controlling activities have been in existence for thousands of years.
Management has been practiced in some form or the other since the dawn of
civilization. Ever since human beings started living together in groups, techniques of
organization and management were evolved. The Egyptian pyramids, the Chinese
Civil Service, The Roman Catholic Church, the military organizations and the Great
Wall of China, for instance, are tangible evidence that projects of tremendous scope,
employing tens of thousands of people, were undertaken well before the modern
times.
The pyramids are particularly interesting examples. The construction of a single
pyramid occupied more than 1,00,000 workers for 20 years. Who told each worker
that what did one do? Who ensured that there would be enough stones at the site to
keep the workers busy? The answer is Managers, regardless of what managers were
called at that time. He had to plan what was to be done, organize people and material
to do it, lead and direct the workers, and impose some controls to ensure that
everything was done as planned. This example from the past demonstrates that
organizations have been around for thousands of years and that management has been
practices for an equivalent period. However, two pre-twentieth-century events played
significant roles in promoting the study of management. First is Adam Smith’s
contribution in the field of management and second is influence of Industrial
Revolution in management practice.
1) Adam Smith’s name is typically cited in field of economics for his contribution to
classical economic doctrine, but his contribution in Wealth of Nations (1776)
outlined the economic advantage that organization and society can gain from the
division of labor. He used the pin-manufacturing industry for his example. Smith
noted that 10 individuals, each doing a specialized task, could produce about 4800
pins a day. However, if each worked separately and had to perform each task, it
49
, would be quite an accomplishment to produce even 10 pins a day. Smith
concluded that division of labor increased productivity by increasing each
worker’s skill and dexterity, by saving time lost in changing tasks, and by creating
labor-saving inventions and machinery.
2) Industrial Revolution is another most important aspect that influences
management in pre-twentieth century. The major contribution of the industrial
revolution was the substitution of machine power for human power, which in turn,
made it more economical to manufacture goods in factories. The advent of
machine power, mass production, the reduced transportation costs that followed a
rapid expansion of the railroads and lack of governmental regulation also fostered
the development of big organization.
Now, a formal theory to guide managers in running their organization was
needed. However, it was not until the early 1900s that the first major step toward
developing such a theory was taken. The periods of evaluation of management
thoughts are highlighted in the Table-2.1:
TABLE-2.1 EVOLUTION OF MANAGEMENT THOUGHTS
MANAGEMENT THOUGHTS PERIOD
• Early Contributions
th
Upto 19 century
• Scientific Management 1900-1930
• Administrative/operational management 1916-1940
• Human relations approach 1930-1950
• Social systems approach 1940-1950
• Decision theory approach 1945-1965
1950-1960
• Management science approach
1950-1970
• Human behavior approach
1960s onwards
• Systems approach
1970s onwards
• Contingency approach
Thus, management has been recognized and identified as a distinctive branch of
academic discipline in the twentieth century.
2.2 FORCES BACKING MANAGEMENT THOUGHTS
Management thoughts have took birth/evolved under the anxiety of political, social
and economic forces. These are explained as follows:
50
, 1. Political Forces: Management thoughts have been shaped by the political forces
manifested through the administration of political institutions and government
agencies. The important political forces includes the political assumptions with
respect to property rights, contractual rights, concepts of justice, judicial
processes and attitudes towards governmental control versus laissez-faire. Legal
processes which emanate from political pressures, such as the Union Carbide
disaster in Bhopal, have a tremendous impact on management thinking and
practice. Political pressures also define the interrelated rights of consumers,
suppliers, labour, owners, creditors and different segments of public.
2. Social Forces: These evolve from the values and beliefs of a particular culture of
people. The needs, education, religion and norms of human behaviour dictate the
relations among people, which form social contracts. Social contracts, is that
unwritten but understood set of rules that govern the behaviour of the people in
their day-to-day interrelationships. The same happens between corporations and
their constituents- labour, investors, creditors, suppliers and consumers. These
social contracts defined relationships, responsibilities and liabilities that influence
the development of management thoughts. It gives the society a sense of order
and trust in which human affairs can be conducted in relative security and
confidence.
3. Economic Forces: These forces determine the scarcity, transformation and
distribution of goods and services in a society. Every social institution competes
for a limited amount of human, financial, physical and information resources.
This competition over scarce resources allocates them to their most profitable use
and is the motivator of technological innovation by which resource availability
can be maximized.
2.3 A FRAMEWORK FOR THE MANAGEMENT THOUGHTS
In the past, the business houses, particularly corporates, did not have a high academic
stature and position in the society and it certainly compelled the scholars inculcate the
academic interest in the study of business management so that its real fruits could be
realized for the stakeholders under reference. There was a widespread belief that
51
, management process consisted of hidden tricks, mysterious clues and intuitive
knowledge that could be mastered only by a few divinely gifted people. Moreover,
the businessmen were very much afraid that through the study of management their
tricks and secrets would be exposed.
But the advent of industrial revolution and the introduction of large scale mechanized
production and the resultant growth of trade, industry and commerce necessitated the
study of management. The evolution of management thoughts might be better
approached through the framework as depicted in Figure-2.1. In the beginning there
were two classical schools of management thoughts. These were- the scientific
management school and the organizational school. Later on, behavioural school and
the quantitative school came into existence. These four schools merged into
integration school which led to the contemporary school of management thoughts.
CLASSICAL SCHOOL
Assumption: BEHAVIOURAL
People are rational SCHOOL
Assumption: QUANTITATIVE
People are social and SCHOOL
self-actualizing
Assumption:
SCIENTIFIC MANAGEMENT ORGANIZATIONAL Owen People can use applied
SCHOOL SCHOOL Munsterberg mathematics
Mayo
Babbage Fayol Follett Management Science
Taylor Weber Maslow Operations Management
The Gilbreths Mooney and Reilly McGregor Management Information
Gantt Barnard Argyris Systems
Simon Dale Carnegie
INTEGRATION SCHOOL
Assumption:
There us no one best way to CONTEMPORARY SCHOOL
manage
Assumptions:
Contingency Theory People are complex
System Theory
Process Theory Global
Theory Z
Mckinsey 7-S
Excellence
Quality
Productivity
Figure- 2. 1 FRAMEWORK FOR THE MANAGEMENT THOUGHTS
52
Organized endeavors, directed by people, responsible for planning, organizing,
leading and controlling activities have been in existence for thousands of years.
Management has been practiced in some form or the other since the dawn of
civilization. Ever since human beings started living together in groups, techniques of
organization and management were evolved. The Egyptian pyramids, the Chinese
Civil Service, The Roman Catholic Church, the military organizations and the Great
Wall of China, for instance, are tangible evidence that projects of tremendous scope,
employing tens of thousands of people, were undertaken well before the modern
times.
The pyramids are particularly interesting examples. The construction of a single
pyramid occupied more than 1,00,000 workers for 20 years. Who told each worker
that what did one do? Who ensured that there would be enough stones at the site to
keep the workers busy? The answer is Managers, regardless of what managers were
called at that time. He had to plan what was to be done, organize people and material
to do it, lead and direct the workers, and impose some controls to ensure that
everything was done as planned. This example from the past demonstrates that
organizations have been around for thousands of years and that management has been
practices for an equivalent period. However, two pre-twentieth-century events played
significant roles in promoting the study of management. First is Adam Smith’s
contribution in the field of management and second is influence of Industrial
Revolution in management practice.
1) Adam Smith’s name is typically cited in field of economics for his contribution to
classical economic doctrine, but his contribution in Wealth of Nations (1776)
outlined the economic advantage that organization and society can gain from the
division of labor. He used the pin-manufacturing industry for his example. Smith
noted that 10 individuals, each doing a specialized task, could produce about 4800
pins a day. However, if each worked separately and had to perform each task, it
49
, would be quite an accomplishment to produce even 10 pins a day. Smith
concluded that division of labor increased productivity by increasing each
worker’s skill and dexterity, by saving time lost in changing tasks, and by creating
labor-saving inventions and machinery.
2) Industrial Revolution is another most important aspect that influences
management in pre-twentieth century. The major contribution of the industrial
revolution was the substitution of machine power for human power, which in turn,
made it more economical to manufacture goods in factories. The advent of
machine power, mass production, the reduced transportation costs that followed a
rapid expansion of the railroads and lack of governmental regulation also fostered
the development of big organization.
Now, a formal theory to guide managers in running their organization was
needed. However, it was not until the early 1900s that the first major step toward
developing such a theory was taken. The periods of evaluation of management
thoughts are highlighted in the Table-2.1:
TABLE-2.1 EVOLUTION OF MANAGEMENT THOUGHTS
MANAGEMENT THOUGHTS PERIOD
• Early Contributions
th
Upto 19 century
• Scientific Management 1900-1930
• Administrative/operational management 1916-1940
• Human relations approach 1930-1950
• Social systems approach 1940-1950
• Decision theory approach 1945-1965
1950-1960
• Management science approach
1950-1970
• Human behavior approach
1960s onwards
• Systems approach
1970s onwards
• Contingency approach
Thus, management has been recognized and identified as a distinctive branch of
academic discipline in the twentieth century.
2.2 FORCES BACKING MANAGEMENT THOUGHTS
Management thoughts have took birth/evolved under the anxiety of political, social
and economic forces. These are explained as follows:
50
, 1. Political Forces: Management thoughts have been shaped by the political forces
manifested through the administration of political institutions and government
agencies. The important political forces includes the political assumptions with
respect to property rights, contractual rights, concepts of justice, judicial
processes and attitudes towards governmental control versus laissez-faire. Legal
processes which emanate from political pressures, such as the Union Carbide
disaster in Bhopal, have a tremendous impact on management thinking and
practice. Political pressures also define the interrelated rights of consumers,
suppliers, labour, owners, creditors and different segments of public.
2. Social Forces: These evolve from the values and beliefs of a particular culture of
people. The needs, education, religion and norms of human behaviour dictate the
relations among people, which form social contracts. Social contracts, is that
unwritten but understood set of rules that govern the behaviour of the people in
their day-to-day interrelationships. The same happens between corporations and
their constituents- labour, investors, creditors, suppliers and consumers. These
social contracts defined relationships, responsibilities and liabilities that influence
the development of management thoughts. It gives the society a sense of order
and trust in which human affairs can be conducted in relative security and
confidence.
3. Economic Forces: These forces determine the scarcity, transformation and
distribution of goods and services in a society. Every social institution competes
for a limited amount of human, financial, physical and information resources.
This competition over scarce resources allocates them to their most profitable use
and is the motivator of technological innovation by which resource availability
can be maximized.
2.3 A FRAMEWORK FOR THE MANAGEMENT THOUGHTS
In the past, the business houses, particularly corporates, did not have a high academic
stature and position in the society and it certainly compelled the scholars inculcate the
academic interest in the study of business management so that its real fruits could be
realized for the stakeholders under reference. There was a widespread belief that
51
, management process consisted of hidden tricks, mysterious clues and intuitive
knowledge that could be mastered only by a few divinely gifted people. Moreover,
the businessmen were very much afraid that through the study of management their
tricks and secrets would be exposed.
But the advent of industrial revolution and the introduction of large scale mechanized
production and the resultant growth of trade, industry and commerce necessitated the
study of management. The evolution of management thoughts might be better
approached through the framework as depicted in Figure-2.1. In the beginning there
were two classical schools of management thoughts. These were- the scientific
management school and the organizational school. Later on, behavioural school and
the quantitative school came into existence. These four schools merged into
integration school which led to the contemporary school of management thoughts.
CLASSICAL SCHOOL
Assumption: BEHAVIOURAL
People are rational SCHOOL
Assumption: QUANTITATIVE
People are social and SCHOOL
self-actualizing
Assumption:
SCIENTIFIC MANAGEMENT ORGANIZATIONAL Owen People can use applied
SCHOOL SCHOOL Munsterberg mathematics
Mayo
Babbage Fayol Follett Management Science
Taylor Weber Maslow Operations Management
The Gilbreths Mooney and Reilly McGregor Management Information
Gantt Barnard Argyris Systems
Simon Dale Carnegie
INTEGRATION SCHOOL
Assumption:
There us no one best way to CONTEMPORARY SCHOOL
manage
Assumptions:
Contingency Theory People are complex
System Theory
Process Theory Global
Theory Z
Mckinsey 7-S
Excellence
Quality
Productivity
Figure- 2. 1 FRAMEWORK FOR THE MANAGEMENT THOUGHTS
52
