Evolution of Management Theory

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ABSTRACT

In this paper, we examine how management theory concerning appropriate management practices has evolved in modern times, and look at the central concerns that have guided its development. First, we examine the so-called classical management theories that emerged around the turn of the twentieth century. These include scientific management, which focuses on matching people and tasks to maximize efficiency; and administrative management, which focuses on identifying the principles that will lead to the creation of the most efficient system of organization and management. Next, we consider behavioural management theories, developed both before and after the Second World War, which focus on how managers should lead and control their workforces to increase performance. Then we discuss management science theory, which developed during the Second World War and which has become increasingly important as researchers have developed rigorous analytical and quantitative techniques to help managers measure and control organizational performance. Finally, we discuss business in the 1960s and 1970s and focus on the theories that were developed to help explain how the external environment affects the way organizations and managers operate.

By the end of this chapter, one would understand the ways in which Management Theory has evolved over time. You will also understand how economic, political, and cultural forces have affected the development of these theories and the ways in which managers and their organizations behave.

INTRODUCTION

Changes in management practices occur as managers, theorists, researchers, and consultants seek new ways to increase organizational efficiency and effectiveness. The driving force behind the evolution of management theory is the search for better ways to utilize organizational resources. Advances in management theory typically occur as managers and researchers find better ways to perform the principal management tasks: planning, organizing, leading, and controlling human and other organizational resources.

The evolution of modern management began in the closing decades of the nineteenth century, after the industrial revolution had swept through Europe, Canada, and the United States. In the new economic climate, managers of all types of organizations—political, educational, and economic—were increasingly trying to find better ways to satisfy customers’ needs. Many major economic, technical, and cultural changes were taking place at this time. The introduction of steam power and the development of sophisticated machinery and equipment changed the way in which goods were produced, particularly in the weaving and clothing industries. Small workshops run by skilled workers who produced hand-manufactured products (a system called crafts production) were being replaced by large factories in which sophisticated machines controlled by hundreds or even thousands of unskilled or semiskilled workers made products. Owners and managers of the new factories found themselves unprepared for the challenges accompanying the change from small-scale crafts production to large-scale mechanized manufacturing. Many of the managers and supervisors had only a technical orientation, and were unprepared for the social problems that occur when people work together in large groups (as in a factory or shop system). Managers began to search for new techniques to manage their organizations’ resources, and soon they began to focus on ways to increase the efficiency of the worker–task mix.

CLASSICAL MANAGEMENT THEORIES

One of the first schools of management thought, the classical management theory, developed during the Industrial Revolution when new problems related to the factory system began to appear. Managers were unsure of how to train employees (many of them non-English speaking immigrants) or deal with increased labor dissatisfaction, so they began to test solutions. As a result, the...
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