A history of Management: Who needs that?
Global business is very competitive: poorly managed firms are likely to fail. Why?
Managers neither promoting innovation, not making the best use of existing technologies that
support the production of high-quality goods at competitive prices;
There are not recruiting and retaining the most talented workers;
They are making the best used of the limited financial resources at their disposal
Perhaps these failures could be avoided if managers have a better grasp of past and present ideas on
how best to manage people, money and technology. GM for example is not up to date with technology
and the technology they do have they aren’t using it effectively.
How far back does management go?
Management has been going on for a very long time – as early as…
5000BC: The magnificent pyramid construction in Egypt reflects their exceptional organizational
and administrative skills
3000BC: Sumerian priests maintained written records of business transactions and management
practices in the city of Ur, Babylon (now Iraq)
Evolution of Modern Management (1900-present)
The organizational and administrative skills of the Egyptians were impressive
So too were the recording keeping skills of the Sumerian priests
Management as a science the rise of professional managers are relatively recent developments (1900-
Demand for professional managers -> Development of Management as a Science
Punch-line: The development of management theories was partly driven by the demand for well-trained
The ideas on how to manage people, money and technology became more structured or scientific as the
demand for most capable managers increased What was driving the demand for professional managers?
Industrial revolution (1700-1900)
Adam Smith (‘Wealth of Nations 1776) a country becomes wealthy by making the best use of its
limited resources: specialize in a few goods that can be produced efficiently, then sell those
goods to other countries to pay for other goods
Factories and mass production
Assignment of workers to specific production tasks.
Rise of large U.S firms (railroads, 1860-1880s) funded by shareholders, but operated on a daily
basis by managers
By the 1900s, several managerial challenges were already well-appreciated: professional managers were
needed. Have workers that are specialized in something. No 1 person should do all the work they should
do what they are best at.
Evolution of Modern Management
Industrial revolution: The rise of large factories and publicly listed firms required careful planning,
organization and effective control.
These managerial challenges were especially present in Western Europe and the United States
Not surprising that the American scholar Frederick Taylor would take a pioneering role in the
development of management as a science.
Not surprising that European scholars including Max Weber would also play a major role in the
development of modern management.
Classical Approach to Modern Management: Scientific Management
Frederick Taylor was…
Born to a wealthy Quaker family in Philly
A engineer by profession
Lectured for several years at Harvard U (1900-14)
A management consultant to the US navy
Wrote Scientific Management in 1911
Taylor came on management scene in the early 1900s when:
There was a labor shortage
Firms has money and wanted to expand, by the limited supply workers raised questions about
how to get the most output per worker-hour ( ^ labour productivity) Taylor sought to answer these questions!
The worker should not be offered a fixed wage; instead
The firm should set a workload standard – pay above-average when the worker exceeds the
standards, and low wage otherwise (Piece Rate System)
Taylor’s 4 Principles of Scientific Management
Job design should be based on scientific methods, not guesswork
The training and development of workers should also be based scientific methods
Help workers to follow scientific approaches in management
Managers should plan analyze the job, w