CHAPTER 2
THE EVOLUTION OF MANAGEMENT THINKING
CHAPTER OUTLINE
Are You a New-Style or an Old-Style Manager?
I. Management and Organization
II. Classical Perspective
A. Scientific Management
B. Bureaucratic Organizations
C. Administrative Principles
III. Humanistic Perspective
A. Early Advocates
ANNOTATED LEARNING OBJECTIVES
After studying this chapter, students should be able to:
1. Understand how historical forces influence the practice of management.
The practice of management has changed in response to historical conditions. The three major
2. Identify and explain major developments in the history of management thought.
The three major perspectives on management that have evolved since the late 1800s are the
3. Describe the major components of the classical and humanistic management perspectives.
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The thrust of the classical perspective was to make organizations efficient operating machines.
This perspective contains the following subfields, each with a slightly different emphasis:
a. Scientific management emphasizes that decisions based on rules of thumb and tradition
The humanistic perspective emphasizes the importance of understanding human behaviors,
needs, and attitudes in the workplace, as well as social interactions and group processes. Major
components include the:
a. Human relations movement, which recognized and directly responded to social pressures
4. Discuss the management science approach and its current use in organizations.
Management science, also called the quantitative perspective, uses mathematics, statistical
techniques, and computer technology to facilitate management decision making for complex
5. Explain the major concepts of systems thinking, the contingency view, and total quality
management.
Systems thinking is the ability to see both the distinct elements of a system or situation and the
complex and changing interaction among those elements. A system is a set of interrelated parts
that function as a whole to achieve a common purpose. Subsystems are parts of a system that
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6. Name contemporary management tools and some reasons management trends change over
time.
7. Describe the management changes brought about by a technology-driven workplace,
including the role of social media programs, customer relationship management (CRM), and
supply chain management.
Companies are using technology to keep in touch with customers and collaborate with other
organizations on an unprecedented scale. Social media programs include company online
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LECTURE OUTLINE
ARE YOU A NEW-STYLE OR AN OLD-STYLE MANAGER?
Management philosophies and styles change over time to meet new needs. This exercise helps
students determine their primary management styles as either Theory X (old style) or Theory Y
(new style).
I. MANAGEMENT AND ORGANIZATION Exhibit 2.1
An historical perspective on management provides a context or environment in which to interpret
current opportunities and problems. Studying management history is a way to achieve strategic
thinking, see the big picture, and improve conceptual skills. The first step is to explain the
social, political, and economic forces that have influenced organizations and the practice of
management.
Political forces refer to the influence of political and legal institutions on people and
organizations. One significant political force is the increased role of government in business.
Political forces include basic assumptions underlying the political system such as the desirability
of self-government, property rights, contract rights, and justice.
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Discussion Question #1: How do you think management practices might change in response to
increasing government regulation in the banking and health care industries? What other recent
political, social, or economic forces can you identify that might affect your job as a manager?
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II. CLASSICAL PERSPECTIVE
The classical perspective emerged during the nineteenth and twentieth centuries, and
emphasized a rational, scientific approach to the study of management. The factory system of
A. Scientific Management
1. Frederick W. Taylor (1856-1915) developed scientific management, a subfield of
the classical perspective, that emphasizes scientific changes in management to
improve labor productivity. However, because scientific management ignored the
2. Although Taylor is known as the father of scientific management, Henry Gantt, an
associate of Taylor’s, developed the Gantt Chart—a bar graph than measures planned
and completed work along each stage of production by time elapsed.
3. Frank B. and Lillian M. Gilbreth pioneered time and motion study, which stressed
efficiency and the best way to do work. Although Gilbreth is known for work with
4. Scientific management that began with Taylor dramatically increased productivity
across all industries, and they are still important today. To use this approach,
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1. The bureaucratic organizations approach is a subfield within the classical
perspective that looked at the organization as a whole. Max Weber (1864-1920)
introduced management on an impersonal, rational basis through clearly defined
2. The term bureaucracy has taken a negative meaning in today’s organizations and is
associated with endless rules and red tape; however, ideally everyone gets equal
1. The administrative principles approach focused on the total organization rather than
the individual worker. Henri Fayol (1841-1925) identified 14 principles of that
include the following four.
a. Unity of Command. Each employee should have only one boss.
III. HUMANISTIC PERSPECTIVE
The humanistic perspective on management emphasizes the importance of
understanding human behaviors, needs and attitudes in the workplace, and social
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A. Early Advocates
1. Mary Parker Follett (1868-1933) stressed the importance of people rather than
engineering techniques and addressed ethics, power, and empowerment. Her
Discussion Question #2: Can you think of potential drawbacks to retailers using labor-waste
elimination systems based on scientific management principles, as described in the text? Despite
their being about 100 years old, do you believe scientific management characteristics will ever
cease to be a part of organizational life? Discuss.
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B. Human Relations Movement
1. The human relations movement was based on the idea that truly effective control
comes from within the individual worker rather than from strict, authoritarian control.
2. The Hawthorne studies were a series of experiments on worker productivity at the
Hawthorne plant of Western Electric Company, Chicago. The tests were originally
3. Early interpretations agreed that human relations, not money, caused increased
output. Workers performed better when managers treated them positively. New data
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4. One unintended contribution of the experiments was a rethinking of field research
Discussion Question #8: Why can an event such as the Hawthorne studies be a major turning
point in the history of management, even if the results of the studies are later shown to be in
error? Discuss.
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C. Human Resources Perspective Exhibit 2.4
1. The human resources perspective suggests jobs should be designed to meet higher-
level needs by allowing workers to use their full potential. This perspective combines
prescriptions for design of job tasks with theories of motivation.
2. Abraham Maslow (1906-1970), a psychologist, suggested a hierarchy of needs
because he observed that problems usually stemmed from an inability to satisfy
4. Theory Y was proposed as a more realistic view of workers, consisting of
assumptions that:
a. they do not inherently dislike work;
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e. the intellectual potential of the average worker is only partially used.
NEW MANAGER SELF-TEST: WHAT’S YOUR MACH?
Managers differ in how they view human nature and the tactics that they use to get things done
through others, This exercise helps students to determine their Mach score. Having a high Mach
score means that they see life as a game, and are not personally engaged with other people.
D. Behavioral Sciences Approach
1. The behavioral sciences approach applies social science in organizational context,
drawing from economics, psychology, sociology, and other disciplines. For example,
2. One set of management techniques based in the behavioral sciences approach is
3. Other concepts that grew of out the behavioral sciences approach include matrix
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IV. MANAGEMENT SCIENCE
The management science, also known as quantitative perspective emerged after World War II.
It applied math, statistics, and other quantitative techniques to managerial problems.
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projects, and allocate resources, or schedule employees. Most organizations have departments of
IT specialists to help them apply quantitative techniques to complex organizational problems.
Discussion Question #10: Do you think management theory will ever be as precise as theories in
the fields of finance, accounting, or experimental psychology? Why or why not?
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V. RECENT HISTORICAL TRENDS
Elements of each of the three previously discussed management perspectives are still in use
today. The most prevalent of these is the human resources perspective. Major contemporary
extensions of the human resource perspective include systems thinking, the contingency view,
and total quality management.
A. Systems Thinking Exhibit 2.5
1. Systems thinking is the ability to see the distinct elements of a system or situation
and the complex and changing interaction among those elements. A system is a set of
interrelated parts that function as a whole to achieve a common purpose.
a. Subsystems are parts of a system that depend on one another to function.
2. It is the relationship among the parts that form a whole system that matters. Systems
3. An important element of systems thinking is to discern circles of causality.
Understanding the circles of casualty enables leaders to allocate resources.
B. Contingency View Exhibit 2.6
1. The classical management perspective assumed a universalist view; concepts that
would work in one organization would work in another. In business education, an
2. The contingency view states that the successful resolution of organizational problems
depends on a manager’s identification of key variations in the situation.
Management’s job is to search for important contingencies in their industries,
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Discussion Question #9: How would you apply systemic thinking to a problem such as poor
performance in your current academic studies? To a problem with a romantic partner or family
member? Try to identify all the elements and their interdependencies.
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C. Total Quality Management (TQM)
1. Total quality management (TQM) focuses on managing the total organization to
2. Japanese management shifted from an inspection-oriented approach to quality
control, emphasizing employee involvement in the prevention of quality problems.
The preventive approach to quality control infuses quality values throughout every
Discussion Question #4: A management professor once said that for successful management,
studying the present was most important, studying the past was next, and studying the future was
least important. Do you agree? Why?
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VI. INNOVATIVE MANAGEMENT THINKING FOR A CHANGING WORLD
A. Contemporary Management Tools
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1. Managers tend to look for fresh ideas to help them cope during difficult times.
Recent challenges have left today’s executives searching for any management tool
that can help them get the most out of limited resources.
a. The 2010-2011 Bain and Company survey identified benchmarking as the most
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B. Managing the Technology-Driven Workplace
Many of today’s popular techniques are related to the transition to a technology-driven
workplace. Two popular contemporary tools are customer relationship management and
supply chain management. A more recent tool is social media, which is growing in use
and importance.
a. Social Media Programs include company online community pages, social media
b. Customer relationship management (CRM) involves collecting and managing
large amounts of data about customers and making them available to employees,
enabling better decision making and superior customer service.
Discussion Question #5: As organizations become more technology-driven, which do you think
will become more important—the management of the human element of the organization or the
management of technology? Discuss.
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Suggested Answers to End-Of-Chapter Discussion Questions
1. How do you think management practices might change in response to increasing government
regulation in the banking and health care industries? What other recent political, social, or
economic forces can you identify that might affect your job as a manager?
In the absence of accompanying regulation of outsourcing, increasing regulation of banking and
health care may lead to even greater use of outsourcing as firms seek to cut costs and circumvent
2. The 2010-11 Bain survey of management tools found that the use of social media programs is
growing, but as a tool, social media programs also have one of the lowest satisfaction
ratings. How would you explain this?
This low satisfaction ratings of social medial tools would most likely improve as more and more
3. Can you think of potential drawbacks to retailers using labor waste elimination systems
based on scientific management principles, as described in the text? Despite their being
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about 100 years old, do you believe scientific management characteristics will ever cease to
be a part of organizational life? Discuss.
Labor waste elimination systems ignore social context and workers’ needs, and can lead to
increased conflict between managers and employees. Workers often feel exploited by such
4. A management professor once said that for successful management, studying the present was
most important, studying the past was next, and studying the future was least important. Do
you agree? Why?
The management professor was arguing the opposite of what most managers and management
professors believe is the greatest concern, namely the future. The professor’s line of reasoning
might go something like this: it is easier to predict the future and prepare for it when the
5. As organizations become more technology-driven, which do you think will become more
important—the management of the human element of the organization or the management of
technology? Discuss.
Organizations will always need people to manage the technology. Managing the human element
of the organization to make the best use of technology will be critical to increased productivity
and performance.
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6. Why do you think Mary Parker Follet’s ideas tended to be popular with business people of
her day, but were ignored by management scholars? Why are her ideas appreciated more
today?
Mary Parker Follet’s ideas were probably popular with business people of her day because they
recognized that they could reduce conflict and improve productivity by involving employees to a
collapse of Enron and other corporate scandals.
7. Explain the basic idea underlying the contingency view. How would you go about identifying
the key contingencies facing an organization?
The contingency view is an extension of the humanistic perspective in which the successful
resolution of organizational problems is thought to depend on managers’ identification of key
variations in the situation at hand. Managers are encouraged to look for contingencies such as
8. Why can an event such as the Hawthorne studies be a major turning point in the history of
management even if the idea is later shown to be in error? Discuss.
One point that could be made is that social science is not perfect. Another is that the findings
from the Hawthorne studies had legitimacy because Harvard professors conducted them.
Moreover, if findings meet a need for society—that is, if they seem like a good idea—they can
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9. How would you apply systems thinking to a problem such as poor performance in your
current academic studies? To a problem with a romantic partner or family member? Try to
identify all the elements and their interdependencies.
Applying systems thinking to the problem of poor performance in academic studies might
involve an analysis of one’s learning styles, study habits, time management practices, and
10. Do you think management theory will ever be as precise as theories in the fields of finance,
accounting, or experimental psychology? Why or why not?
It might be argued that management theory will ultimately be as precise as theory in other fields
but that more time is needed. The argument is that, as the study of organizations and
Apply Your Skills: Experiential Exercise
Security or Autonomy
A large, bureaucratic organization provides security, benefits, and certainty compared to smaller
or entrepreneurial firms where freedom and autonomy are greater. This exercise helps students
determine whether their styles and wishes would be compatible with a large, formal company.
Apply Your Skills: Small Group Breakout
Turning Points on the Road to Management
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Students conduct interviews with managers, asking about turning points in their lives that led
Apply Your Skills: Ethical Dilemma
The New Test
1. Ignore the test. Sheryl has proved herself via work experience and deserves the job.
Option 1 is likely to cause hard feelings in the department. In addition, Option 1 places Maxine
2. Give the job to the candidate with the highest score. You don’t need to make enemies on the
Civil Service Board, and, although, it is a bureaucratic procedure, the test is an objective
way to select a permanent placement.
Options 1 and 2 both are likely to cause hard feelings in the department. Considering that
3. PRESS the board to devise a more comprehensive set of selection criteria—including test
results as well as supervisory experience, ability to motivate employees, and knowledge of
agency procedures—that can be explained and justified to the board and to employees.
Option 3 is probably the best choice, although Maxine must be careful that she does not develop
Apply Your Skills: Case for Critical Analysis
More Hassle from HR?
1. Are Connie and her staff on the right track to avoid manager mishaps by defining a new set
of leader rules and core values and imposing it by fiat from the top down?
Managers should treat their employees well because their acceptance of authority may be critical
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2. Do you think a more participative and open culture can be imposed on managers with value
statements and training sessions? Why?
A more participative and open culture can be imposed on managers with value statements and
3. Why do you think Vitorio and Gary are on the defensive? Might the defensive on core
leadership behaviors be handled in a different way? What do you suggest?
Vitorio and Gary are on the defensive because the company fired a few of their employees and
On the Job Video Cases Answers
Barcelona Restaurant Group
1. In what ways is Barcelona’s management approach consistent with modern developments in
management thinking?
Barcelona’s management approach is consistent with the humanistic perspective’s concept of
employee empowerment and rejection of authoritarian-style micromanagement. The restaurant’s
2. In what ways does Barcelona’s management approach run counter to contemporary
developments in management thinking?
While some contemporary management approaches place heavy emphasis on the happiness and
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3. What aspects of restaurant work are especially challenging to wait staff, and how does
Barcelona’s approach to management help employees overcome the downsides of the job?
In the video, Andy Pforzheimer identifies the challenging aspects of restaurant life: “It is work