Friday October 5 , 2012
GMS 200 notes (Chapter 2):
History of management
Global business is very competitive poorly managed firms are likely to fail. Why?
-Managers neither promoting innovation, nor making the best use of existing
technologies that support the production of high-quality goods at competitive
-They are not recruiting and retaining the most talented workers;
-They are making the best use 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.
How far back does management go?
Management has been going on for a very long time—as early as:
-5000 BC: the pyramid reflects exceptional organizational and administrative skills
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.
Demand for professional managers= Development of management as a science
The development of management theories was partly driven by the demand for
well-trained, professional managers.
The ideas on how to manage people, money and technology, became more
structured, or scientific as the demand for more capable managers increased.
What was driving the demand for professional mangers?
Industrial revolution (1700-1900)
-Adam smith (“wealth of nations”, 1776): a country becomes wealthy by making the
best use of its limited resources; spealize 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 of managers.
By the 1900s, several managerial challenges were already well appreciated:
professional managers were needed! Friday October 5 , 2012
Evolution of Modern Management
Industrial resolution: The rise of large factories and publically listed firms required
careful planning, organization and effective control.
These managerial challenges were especially present in Western Europe and the
Not surprising that the American scholar Fredrick 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
Fredrick Taylor (1856-1915) (Father of Modern Management)
-Born to wealthy Quaker family in philly
-A engineer by profession
-Lectured for several years at Harvard (1909-1914)
-A management consultant to the UD navy
-Wrote scientific management in 1911
Taylor came on management scene in the early 1900s when:
-There was a labor shortage
-Firms had money and wanted to expand, but the limited supply of workers raised
questions about how to get the most output per worker-hour.
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 standard, and a low wage otherwise (Piece rate system).
Taylors four principles of scientific management
-Job design should be based on scientific methods not guess work.
-The training and development of workers should also be based on scientific
-Help workers to follow scientific approaches in management.
-Managers should plan and analyze the job, while workers focus on performing their
assigned jobs. Friday October 5 , 2012
“Taylorism”, as became known, was not accepted by U.S. workers – by 1915 the
resentment of unionized workers was noted by U.S. legislator