Management theory and history Pt. 1: Classical Management Theory

Posted by dgm on February 6, 2012 · 1 Comment 

http://en.wikipedia.org/wiki/Frederick_Winslow_Taylor
http://www.cliffsnotes.com/study_guide/Classical-Schools-of-Management.topicArticleId-8944,articleId-8851.html

Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, the split between owners (individuals, industrial dynasties or groups of shareholders) and day-to-day managers (independent specialists in planning and control) gradually became more common. Research has indicated that, in modern times, the role of the manager has pressured individuals to make socially irresponsible decisions despite the availability of a responsible alternative.[5]

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. As a result, the classical management theory developed from efforts to find the “one best way” to perform and manage tasks. This school of thought is made up of two branches: classical scientific and classical administrative, described in the following sections.

The classical scientific branch arose because of the need to increase productivity and efficiency. The emphasis was on trying to find the best way to get the most work done by examining how the work process was actually accomplished and by scrutinizing the skills of the workforce.

Frederick Taylor is often called the “father of scientific management.” Taylor believed that organizations should study tasks and develop precise procedures.

Taylor’s approach is also often referred to as Taylor’s Principles, or frequently disparagingly, as Taylorism. Taylor’s scientific management consisted of four principles:

1. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
2. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.
3. Provide “Detailed instruction and supervision of each worker in the performance of that worker’s discrete task” (Montgomery 1997: 250).
4. 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.

Taylor believed in transferring control from workers to management. He set out to increase the distinction between mental (planning work) and manual labour (executing work). Detailed plans specifying the job, and how it was to be done, were to be formulated by management and communicated to the workers.[11]

The introduction of his system was often resented by workers and provoked numerous strikes. The strike at Watertown Arsenal led to the congressional investigation in 1912. Taylor believed the labourer was worthy of his hire, and pay was linked to productivity. His workers were able to earn substantially more than those under conventional management,[12] and this earned him enemies among the owners of factories where scientific management was not in use.

[somewhere I found something that mentioned that, by the 1930s, Taylorism was pretty much out of favor, though it does continue to this day to have certain applications in industrial work.  But now I can’t find the quote…]

Henry Gantt, an associate of Taylor’s, developed the Gantt chart, a bar graph that measures planned and completed work along each stage of production. Based on time instead of quantity, volume, or weight, this visual display chart has been a widely used planning and control tool since its development in 1910.

Frank and Lillian Gilbreth, a husband-and-wife team, studied job motions.  first motion study designed to isolate the best possible method of performing a given job. Later, Frank and his wife Lillian studied job motions using a motion-picture camera and a split-second clock.

Classical administrative school

Whereas scientific management focused on the productivity of individuals, the classical administrative approach concentrates on the total organization. The emphasis is on the development of managerial principles rather than work methods.

Contributors to this school of thought include Max Weber, Henri Fayol, Mary Parker Follett, and Chester I. Barnard. These theorists studied the flow of information within an organization and emphasized the importance of understanding how an organization operated.

In the late 1800s, Max Weber disliked that many European organizations were managed on a “personal” family-like basis and that employees were loyal to individual supervisors rather than to the organization. He believed that organizations should be managed impersonally and that a formal organizational structure, where specific rules were followed, was important. In other words, he didn’t think that authority should be based on a person’s personality. He thought authority should be something that was part of a person’s job and passed from individual to individual as one person left and another took over. This nonpersonal, objective form of organization was called a bureaucracy.

Mary Parker Follett stressed the importance of an organization establishing common goals for its employees. However, she also began to think somewhat differently than the other theorists of her day, discarding command-style hierarchical organizations where employees were treated like robots. She began to talk about such things as ethics, power, and leadership. She encouraged managers to allow employees to participate in decision making. She stressed the importance of people rather than techniques — a concept very much before her time. As a result, she was a pioneer and often not taken seriously by management scholars of her time. But times change, and innovative ideas from the past suddenly take on new meanings. Much of what managers do today is based on the fundamentals that Follett established more than 80 years ago.

As management research continued in the 20th century, questions began to come up regarding the interactions and motivations of the individual within organizations. Management principles developed during the classical period were simply not useful in dealing with many management situations and could not explain the behavior of individual employees. In short, classical theory ignored employee motivation and behavior.

Peter Drucker’s career as a business thinker took off in 1942, when his initial writings on politics and society won him access to the internal workings of General Motors (GM), one of the largest companies in the world at that time. His experiences in Europe had left him fascinated with the problem of authority. He shared his fascination with Donaldson Brown, the mastermind behind the administrative controls at GM. In 1943 Brown invited him in to conduct what might be called a “political audit”: a two-year social-scientific analysis of the corporation. Drucker attended every board meeting, interviewed employees, and analyzed production and decision-making processes.

The resulting book, Concept of the Corporation, popularized GM’s multidivisional structure and led to numerous articles, consulting engagements, and additional books. GM, however, was hardly thrilled with the final product. Drucker had suggested that the auto giant might want to reexamine a host of long-standing policies on customer relations, dealer relations, employee relations and more. Inside the corporation, Drucker’s counsel was viewed as hypercritical. GM’s revered chairman, Alfred Sloan, was so upset about the book that he “simply treated it as if it did not exist,” Drucker later recalled, “never mentioning it and never allowing it to be mentioned in his presence.”[22]

The book is an examination of General Motors‘ operations, delving into how large corporations impact society on a broad level. Drucker biographer Jack Beatty referred to it as “a book about business the way Moby Dick is a book about whaling”.[1]

In writing and researching the book, Drucker was given access to General Motors resources, paid a full salary, accompanied CEO Alfred P. Sloan to meetings, and he was given free run of the company.

Drucker’s focus was the insider view of the company. He focused, in contrast to his contemporaries, on what happened inside a company and how this related to the company’s success or failure. Fascinated by this question, he studied management to find out what really made a business tick.

Until then, management was seen as a no-brainer: the CEO would simply give the orders and the others would follow. But Drucker was interested in the human interactions within a company, and more specifically on how power structures, political environments, information flows, decision making and managerial autonomy contributed to success. By shifting his focus, he was able to explain why General Motors was such a success.

 

Filed under Corporations, History, Managers · Tagged with efficiency and productivity, evolution, hierarchy, management theory, social responsibility