Chapter 2-

Development of
Management Thoughts
This chapter explains how management ideas have
changed over time. It introduces early management
thinkers like Taylor, Fayol, and Weber, who focused
on improving work and structure. It also shows how
later thinkers like Elton Mayo studied workers’
feelings and teamwork. Modern ideas like systems
and contingency theory help managers choose the
best way to lead in different situations. These
theories help us understand how good management
leads to better results in organizations.
 Content

1. Early ideas of management

2. Classical theories (Taylor, Fayol, Weber)
3. Neo-classical (Human Relations)
4. Modern theories
5. Recent trends
 Early Ideas of Management

Management as a practice has existed since ancient

times, in areas like construction, military, and
administration. However, it became a formal subject of
study in the late 19th and early 20th centuries. Over time,
different schools of thought developed to improve how
organizations are managed.
Early Ideas of Management-As an academic discipline, it evolved in
the late 19th and 20th centuries

Management thought developed into an academic discipline

primarily during the late 19th and 20th centuries due to the growing
complexity of industrial organizations and the need for systematic
study to improve efficiency and address human aspects of work. The
formalization of the field began with Classical Management theories
by figures like Taylor and Fayol, focusing on structural efficiency,
followed by the Behavioral/Human Relations approach emphasizing
people, and later the Modern and Contemporary approaches
integrating systems, contingency, and data-driven methodologies.
As an academic discipline, it evolved in the late 19th
and 20th centuries
Many disciplines, particularly the social sciences, history, and natural sciences,
largely developed into their modern academic forms during the late 19th and
early 20th centuries, a period characterized by the secularization of universities
and the introduction of new fields like sociology, political science, and
specialized areas within natural sciences and history. This period saw the
formalization of many subjects through distinct academic departments, journals,
and methodologies, moving away from their previous integration into
philosophy or broader liberal arts curricula.
Key thinkers
Max Weber-(Bureaucracy Theory): Advocated for organizations based on rules, formal
relationships, and specialization for efficiency .
Henri Faylor-(Administrative Management): Identified universal management
principles and key qualities for managers.
Federick Taylor-(Scientific Management): Applied scientific techniques to optimize
work processes and boost productivity .
Systematic thinking about management began during
the Industrial Revolution due to increasing complexity
in business operations.
Systematic thinking about management emerged during the
Industrial Revolution due to the increased complexity of businesses.
The shift from manual labor to large-scale factories required new
approaches to organize labor, manage resources, and maximize
production, leading to the development of classical management
theories like Scientific Management and Administrative Theory to
improve efficiency and coordination.
The Industrial Revolution as a Catalyst

1.Increased Scale and Complexity:

The advent of the steam engine and other innovations led to the rise of large
factories, creating unprecedented organizational complexity in managing larger
workforces and resources.

2. Need for Systematic Approaches:

The inefficiencies and challenges of managing these new industrial operations
highlighted the need for more structured and systematic approaches to
management.
Emergence of Management Theories

1. Focus on Efficiency:
Early management ideas, especially the Classical Approach, focused on making work
more efficient by using scientific methods and better ways to organize tasks.

2. Scientific Management:
Pioneered by figures like Frederick Winslow Taylor, this approach emphasized scientific
study of work, time measurement, and specialized task allotment to boost productivity.

3.Administrative Theory:
Another key component of the Classical Approach, Administrative Theory focused on the
overall management process, emphasizing functions like planning, organizing, and
coordinating resources to achieve organizational goals. Key figures like Henri Fayol
contributed principles for effective administration .
Emergence of Management Theories

1. Focus on Efficiency:
Early management ideas, especially the Classical Approach, focused on making work
more efficient by using scientific methods and better ways to organize tasks.

2. Scientific Management:
Pioneered by figures like Frederick Winslow Taylor, this approach emphasized scientific
study of work, time measurement, and specialized task allotment to boost productivity.

3.Administrative Theory:
Another key component of the Classical Approach, Administrative Theory focused on the
overall management process, emphasizing functions like planning, organizing, and
coordinating resources to achieve organizational goals. Key figures like Henri Fayol
contributed principles for effective administration .
Emergence of Management Theories

1. Focus on Efficiency:
Early management ideas, especially the Classical Approach, focused on making work
more efficient by using scientific methods and better ways to organize tasks.

2. Scientific Management:
Pioneered by figures like Frederick Winslow Taylor, this approach emphasized scientific
study of work, time measurement, and specialized task allotment to boost productivity.

3.Administrative Theory:
Another key component of the Classical Approach, Administrative Theory focused on the
overall management process, emphasizing functions like planning, organizing, and
coordinating resources to achieve organizational goals. Key figures like Henri Fayol
contributed principles for effective administration .
 Classical Theories
F.W. Taylor ( The Father Of Modern Management)

Taylor's 4 Principles of Scientific Management

1. After years of various experiments to determine optimal work

methods, Taylor proposed the following four principles of scientific
management:

2. Replace rule-of-thumb work methods with methods based on a

scientific study of the tasks.

3. Scientifically select, train, and develop each worker rather than

passively leaving them to train themselves.

4. Cooperate with the workers to ensure that the scientifically developed

methods are being followed.

5. Divide work nearly equally between managers and workers, so that the
managers apply scientific management principles to planning the work
and the workers actually perform the tasks.
https://youtu.be/6O9T7bqGAgI?si=XJGVgcZW06uEGfWq
 Classical Theories
Henry Fayol - Administrative Theory

Henri Fayol developed Administrative Management Theory

to improve organizational efficiency by focusing on top-level
management functions and principles applicable to all
organizations. His work, based on his experience as a mining
engineer, introduced the five functions of management
(planning, organizing, commanding, coordinating, and
controlling) and the 14 principles of management, which
provide a framework for effective administration and
productivity.
 Five Functions of Management
Henri Fayol's Five Functions of Management

1. Planning: Developing a strategy and outlining steps to achieve organizational goals.

2. Organizing: Arranging resources (human, financial, and physical) to carry out the
plan.

3. Commanding (or Leading): Guiding, motivating, and directing employees to perform

their duties effectively.

4. Coordinating: Ensuring that different departments and activities within the

organization work together harmoniously.

5. Controlling: Monitoring performance against the plan and taking corrective action
when necessary.
 14 Principles of Management
Henri Fayol’s 14 Principles of Management

1. Division of Work: Specializing in a particular task leads to greater efficiency and

output.
2. Authority and Responsibility: The right to give orders and the power to require
obedience should be balanced with responsibility for the outcomes.
3. Discipline: Employees must respect rules and agreements for order and systematic
working within the organization.
4. Unity of Command: Each employee should receive orders from only one superior to
avoid confusion and conflicts.
5. Unity of Direction: A single head and one plan should be used to guide all activities
and objectives with the same purpose.
6. Subordination of Individual Interest to General Interest: The goals and interests of
the organization must take precedence over the interests of any single individual or
group.
 14 Principles of Management
Henri Fayol’s 14 Principles of Management

7. Remuneration: The payment system for employees should be fair and satisfactory to
both the workers and the employer.
8. Centralisation and Decentralisation: The optimal degree of centralization
(concentration of authority) and decentralization (dispersal of authority) should be
determined by the specific organization.
9. Scalar Chain: There should be a clear line of authority from the highest to the lowest
levels of the organization.
10. Order: A proper place and arrangement for people, positions, and things ensures
systematic working.
11. Equity: Managers should show kindness and justice in their treatment of employees
to foster fairness.
12. Stability of Tenure of Personnel: Minimizing employee turnover and maintaining a
stable workforce leads to better performance.
 14 Principles of Management
Henri Fayol’s 14 Principles of Management

13. Initiative: Managers should encourage employees to think out and execute plans,
promoting innovation.
14. Esprit de Corps: Promoting teamwork and unity among employees builds morale and
fosters a sense of togetherness.
 Classical Theories
Max Weber – Bureaucracy Theory

Max Weber's bureaucracy theory describes an ideal bureaucratic

structure as the most efficient way to organize human activity,
characterized by rational-legal authority, a strict hierarchy,
division of labor, formal rules, and impersonal relationships. This
structure ensures efficiency, predictability, and fairness by basing
power on rules and competence, not personal ties, though it also
carries the risk of creating an impersonal "iron cage" that
constrains individual freedom.

1.https://youtu.be/zmKZoIHwCw4?si=QGfAFClp8KJEbNnt
2. https://youtu.be/zp554tcdWO8?si=3MQXrUo7hsNR7Kxm
Principles of Weber’s Bureaucracy
 Neo –Classical (Human Relations)
The Neoclassical Theory of Management shifted focus from
machines to human resources, recognizing individuals and groups
as crucial to organizational success, unlike the Classical Theory's
emphasis on production and structure. Developed by theorists
like Elton Mayo, this approach introduced the concepts of the
informal organization, human relations, and participative
management, asserting that social, psychological, and economic
needs motivate employees. Key principles include
acknowledging individual differences, understanding the
importance of work groups, and incorporating employee
participation in decision-making.
 Neo –Classical (Human Relations)
Key Aspects of the Neoclassical Theory :

1. Human-Centered Approach:
At its core, the theory emphasizes that employees are not just cogs in a machine but complex individuals with
their own aspirations and motivations.

2 .Importance of Human Relations:

The theory highlights that social interactions and relationships within the workplace significantly influence
employee morale and productivity.

The Informal Organization:

It acknowledges the existence and impact of informal groups and social networks within the formal
organizational structure, which play a significant role in how work gets done.
2. Participative Management:
The concept of involving employees in decision-making processes is central, leading to greater job satisfaction
and motivation.
2. Individual Differences:
The theory stresses that each individual is unique and must be recognized for their specific attitudes, beliefs, and
skills, going beyond mere economic or security needs.
 Neo –Classical (Human Relations)
Development and Contributors:

Hawthorne Studies:
Research conducted by Elton Mayo and his associates at the Western Electric Company's Hawthorne
plant was a landmark in developing this theory, demonstrating the impact of human factors on
productivity.

Mary Parker Follett and Chester Barnard:

These theorists also contributed to the understanding of human behavior and the social aspects of
organizations.
Contrast with Classical Theory:

Classical Theory:Focused on efficiency, productivity, and the management of physical resources

through formal structures and scientific methods.

Neoclassical Theory: Built upon classical ideas but corrected their oversight of the human element,
focusing instead on the social and psychological needs of employees as a driver of organizational
success.
https://youtu.be/hurzEA1EnPQ?si=WUGaECPTb5OQZbRh
 Recent Trends
Recent trends in management thought emphasize agile methodologies, digital
transformation through AI and big data, and a focus on Diversity, Equity, and
Inclusion (DEI) to meet global challenges and changing workforce needs. Key
trends include fostering remote and hybrid work models, investing in employee
upskilling and well-being, promoting continuous improvement and customer focus
(Total Quality Management), and cultivating an entrepreneurial culture to drive
innovation.
 Key Trends in Modern Management
1 Agile Management: An adaptive, iterative approach focusing on quick responses to market
changes, emphasizing flexibility, collaboration, and short work cycles.

2 Digital Transformation: Leveraging big data, artificial intelligence, and automation to

enhance efficiency, improve decision-making, and create better customer experiences.

3.Diversity, Equity, and Inclusion (DEI): A growing focus on creating inclusive

environments that value diverse perspectives and promote fairness in the workplace.

4. Remote and Hybrid Work: The post-pandemic adoption of flexible work arrangements,
requiring new management approaches focused on trust, communication, and technology

5. Employee Well-being:Prioritizing the mental health and happiness of employees,

recognizing them as crucial drivers of performance and productivity.
Thank you