...Chapter two The Evolution of Management Theory Learning Objectives 1. Describe how the need to increase organizational efficiency and effectiveness has guided the evolution of management theory. 2. Explain the principle of job specialization and division of labour, and tell why the study of person–task relationships is central to the pursuit of increased efficiency. 3. Identify the principles of administration and organization that underlie effective organizations. 4. Trace the changes that have occurred in theories about how managers should behave in order to motivate and control employees. 5. Explain the contributions of management science to the efficient use of organizational resources. 6. Explain why the study of the external environment and its impact on an organization has become a central issue in management thought. A Case in Contrast Changing Ways of Making Cars Car production has changed dramatically over the years as managers have applied different views or philosophies of management to organize and control work activities. Prior to 1900, workers worked in small groups, cooperating to hand-build cars with parts that often had to be altered and modified to fit together. This system, a type of small-batch production, was very expensive; assembling just one car took considerable time and effort; and workers could produce only a few cars in a day. To reduce costs and sell more cars, managers of early car companies needed better techniques to increase efficiency. Henry...
Words: 14749 - Pages: 59
...The Evolution of Management Theory People have been changing the shapes of the organizations for much generation. Looking back towards world history, we can mark out the incidents of people working together in official organizations such as the Greek and Roman armies, the East India Company, the Roman Catholic Church, and the Hudson Bay Company. People have also long been thinking about how to make organizations efficient and effective‐‐ since long before terms such as "management" came into common terms. Early Strategies The adjective 'Machiavellian' is used to Identify Shrewd and manipulative opportunists. Therefore Machiavelli was a great believer in the virtues of a republic. This is a proof in Discourses, a book Machiavelli has written in 1531 while he lived in the early Italian republic of Florence. The principles he set forth can be taken into consideration to apply to the management of organizations today. An organization is more stable if members have the right to express their differences and solve their conflicts within it while one person can begin an organization, "it is lasting when it is left in the care of many and when many desire to maintain it." A weak manager can follow a strong one, but not another weak one, and maintain authority. A manager seeking to change an established organization "should retain at least a shadow of the ancient customs." Another classic work that offers insights to modem managers is The Art of War, written by the Chinese philosopher...
Words: 1406 - Pages: 6
...Written Assignment 2 Evolution of Management Carsondra D. Grimes Introduction to Legal Analysis and Writing, PA 205-01 Professor May 3, 2011 The theories of management have evolved over the years. The classical approach is one of the earlier theories in management beginning in the late 1800’s. This theory has two divisions the scientific approach and the administrative approach. The scientific approach to this theory is how to better make the mechanical side of the business more efficient and profitable. This approach was also responsible for encouraging employees to use the one best way to accomplish a task. In comparison with the behavioral approach, developed in the early 1900’s the classical approach assumes that everything in the workplace is always seamless and people are always content. The behavioral approach takes into account that people are human and have problems and feelings. The systems approach is best explained by thinking of everyone and everything in the business as a whole. Every piece of the business is essential to make the system work. The contingency approach is an outgrowth of the systems approach. The contingency examines the cause and effect of management decisions. The most important in my opinion, of these approaches is the behavioral approach. Many people have said if my employer would just appreciate the job I do it would not be as important to get a raise. Exceptional human relations in a business, strengthens...
Words: 291 - Pages: 2
...Evolution of management Through the practice of management and the continued development of commerce and wealth we are transforming our lives. In Massachusetts (USA) in the 1850s the life expectancy of a male would have been 37 years of age and a female 40: in 1929 it was 58 for a male and 61 for a female; nowadays life expectancy would be in the region 70-80 years. While appreciating the past success of ‘management’ we would also recognise that today’s accelerating pace of change is putting pressure on our organisations to be at the forefront of management thinking. If we want to maintain our standard of living our rate of change has to be comparative to the rest of the world. But our present day management thinking has evolved from a whole range of influences over an extraordinary long period of time. In his comprehensive book ‘The Evolution of Management Thought’ Daniel A Wren writes: " Within the practices of the past there are lessons of history for tomorrow in a continuous stream. We occupy but one point in this stream. The purpose .. is to present…the past as a prologue to the future." So with the aim of accelerating the development of our management practice for the future let us examine that stream of evolving management thought of the past. Our Christian past has taught that us that there was a beginning (Adam & Eve) and there will be an end (Armageddon) and in between we should hear the word of god and obey his commandments. We therefore tend to think...
Words: 2919 - Pages: 12
...Starting back from the late 1800s to the 1960s there was a search for solutions for the development of four major approaches to management, classic approach, behavioral approach, systems approach and contingency approach; according to Evolution of Management. Scientists have been visually examining the demeanor of employees and managers due to collaboration between individuals and machines, inexperienced in running superior size factories, and the greater the business the more problems came with it. Each of these approaches is presented differently from one another in their own unique way. First was the classical approach to management, which spotlighted mainly on the machines and systems that needed to perform each task efficiently. In the late 1800s the social desiderata of employees didn’t matter. It withal had two components, scientific management and administrative management. Scientific management was to help ameliorate the efficiency of work by systematic and scientific study of work methods, implements and performance standards. The administrative management accentuates that management as a function can be applied to any size or kind of organization. Its main purport was the organization holistically, and not individual workers in the workplace. Second, was the behavioral approach to management, which stressed management’s understandings of the importance of people’s needs, and attitudes within the company. After nine years of researching what conditions in the workplace...
Words: 498 - Pages: 2
...Evolution of the Management Theory ------------------------------------------------- Early Management 3000 – 2500 BC The Egyptian pyramids are proof that projects of tremendous scope, employing tens of thousands of people, were completed in ancient times. It took more than 100, 000 workers some 20 years to construct a single pyramid. Someone had to plan what was to be done, organize people and materials to do it make sure those workers got the work done, and impose some controls to ensure that everything was done as planned. That someone was manager. 1400s At the arsenal of Venice, warships were floated along the canals, and each stop, materials and riggings were added to the ship. In addition, the Venetians used warehouse an inventory systems to keep track of materials, human resource management functions to manage the labor force (including wine breaks), and an accounting system to keep track of revenues and costs. 1776 Wealth of the Nations book by Adam Smith was published. Adam Smith argued that the economic advantages of the division of labor breaking down jobs into narrow, repetitive tasks. 1780s – mid-1800s Industrial Revolution came with the birth of the corporation. Large and efficient factories pumping out products, someone needed to forecast demand, make sure there were adequate supplies of materials, assigned tasks to workers, and so forth. Classical Approaches Beginning around the turn of the twentieth century, the discipline...
Words: 511 - Pages: 3
...EARLY MANAGEMENT Organizations and managers have existed for thousands of years. The Egyptian pyramids and the Great Wall of China were projects of tremendous scope and magnitude, and required good management. Regardless of the titles given to managers throughout history, someone has always had to plan what needs to be accomplished, organize people and materials, lead and direct workers, and impose controls to ensure that goals were attained as planned. Another example of early management can be found in the city of Venice, which was a major economic and trade center in 1400s. the venetians developed an early form of business enterprise and engaged in many activities common to today’s organizations. The venetians used warehouse and inventory systems to keep track of materials, human resource management functions to manage the labor force and an accounting system to keep track of revenues and costs. Two historical events significant to the study of management are work of Adam Smith, in his book,’ The Wealth of Nations’, in which he argued brilliantly for the economic advantages of division of labor (the breakdown of jobs into narrow, repetitive tasks). The Industrial Revolution is second important pre-twentieth-century influence on management. The introduction of machine powers combined with the division of labor made large, efficient factories possible. Planning, organizing, leading, and controlling became necessary activities. There are six major approaches to management...
Words: 1896 - Pages: 8
...Management is studied in business academics since earlier times and it is considered as an integral part to understand business operations. People have been changing and redesigning organizations for centuries. Though the 20th century is noticeable in history as an 'Era of scientific management', still it does not indicate that management tactics were not used in yester years. Many studies indicated that Management theory evolved with "scientific" and "bureaucratic" management that used measurement, procedures and routines as the basis for operations. Firms developed hierarchies to apply standardized rules to the place of work and penalized labour for violating rules. With the "human relations" movement, companies emphasized individual workers. Modern management theories, including system theory, contingency theory and chaos theory, focus on the whole organization, with employees as a key part of the system. The evaluation of management theory can be categorized in to different parts: * Pre-Scientific Management Era (before 1880), * Classical management approach Era (1880-1930), * Neo-classical Management Era (1930-1950), * Modern Management era (1950-on word). Classical Management approach includes Scientific Management, Administration Management, and Bureaucracy Management, human relation. Neo- classical Management includes Human relation and Behavioural Management. Modern Management includes Quantitative Management, System Management Approach, and Contingency...
Words: 5169 - Pages: 21
...Evolution of Management Accounting: Contemporary Significance and Retrospection Abstract: The management accounting aim in future forecasting, planning and making decisions for the firm. It is also good at cost managing (cost accounting), improving production and management controlling, for example, the Balance Scorecard and Management Control System. What is evolution? The synonym of evolution is development which means the experiences of its past to present, also means history. Thus, it will introduce the management accounting's history of U.S and China so that we could clarify why China lag behind. Moreover, it would move forward to describe the circumstance today to emphasize the new missions of management accounting. Of course, it would make suggestions for China based on the present and past. Finally, expect the future outlook of management accounting Generally speaking, besides telling readers the main factors of influencing management accounting in China, it aim to encourage and remind readers as well as schoolmates to study the management accounting and notice the significance and potentials of management accounting. Key words: Management Accounting, Cost Accounting, Evolution of Management Accounting, Balance Scorecard, Management Control System. Contents INTRODUCTION 6 1. LITERATURE REVIEW 8 1.1 THE INFLUENCING FACTORS OF MANAGEMENT ACCOUNTING 9 1.1.1 Business size, Organizational Structure and Technology 9 1.1.2 Strategy 10 ...
Words: 9769 - Pages: 40
...School. He had wrote a journal entitled “The Evolution of Management Accounting” in 1983. The purpose of this article is to summarize the development of management accounting, including the new demands for management information, and to develop a research strategy to meet these demands i) THE EVOLUTION OF MANAGEMENT ACCOUNTING (From Robert S. Kaplan point of view) In his paperwork, he divided it into five sections. • Section 1 - Development of cost accounting practices from the early textile mills and railroads (circa 1850) through the formation of the great industrial enterprises in the U.S. and the emergence of the scientific management approach. • Section 2 - Management control innovations of the DuPont Corporation and the General Motors Corporation after its reorganization by Pierre du Pont and Alfred Sloan in 1920. • Section 3 - Development in cost accounting and managerial control form 1925 to the present. • Section 4 - Challenges from the contemporary environment that may not be met by the accounting practices developed more than 60 years ago for a substantially different competitive situation. • Section 5 - Agenda for field based research to document or develop innovative management control practices appropriate for the changing industrial environment. ii) A SUMMARY OF HISTORICAL DEVELOPMENTS IN MANAGEMENT ACCOUNTING STAGE 1 - COST ACCOUNTING The development of cost accounting and management control practices in U.S. Corporations has been...
Words: 2288 - Pages: 10
...The Evolution of Management Theories Management Theories Industrial Revolution (1700’s – 1800’s) - Moved from Agrarian to Manufacturing Society - Adam Smith – The Wealth of Nations - Division of labor (pin factory example) Scientific Management (1890’s – 1930’s) - Frederick Taylor - Time & Motion Studies - “Fair day’s pay for a fair day’s work” Management Theories Bureaucracy – Max Weber (1930’s – 1950’s) - All activities follow the organizational hierarchy - Strong lines of authority & control - Formal selection, rules & regulations - Only qualified persons are employed (no nepotism) Management Theories Humanistic Management (1930’s – 1970’s) Hawthorne Studies - Elton Mayo – Father of Human Relations - Western Electric Plant in Hawthorne, IL - “”Hawthorne Effect”; “Spotlight Effect” Management Theories POSDCORB (1937) - Luther Gulick Management by Objectives (1954) - Peter Drucker - Goals are set for employee to achieve - People end up working for themselves Theory X & Theory Y (1960) - Douglas McGregor Theory X & Theory Y Theory X People do not really want to work. They are self-interested and prefer leisure over work. If managers relax, sloppiness sets in. Theory Y Workers find work enjoyable & satisfying “Work is Play” Workers will exercise self-direction and self-control. Workers can solve problems creatively. Theory X People do not really want to work. They are self-interested and prefer leisure over work. Managers have to structure...
Words: 612 - Pages: 3
...THE EVOLUTION OF MANAGEMENT THOUGHT Second Edition DANIEL A. WREN The University of Oklahoma JOHN WILEY AND SONS New York • Chichester • Brisbane • Toronto CONTENTS PART ONE EARLY MANAGEMENT THOUGHT A PROLOGUE TO THE PAST 3 A Cultural Framework: The Economic Facet. The Social Facet. The Political Facet. P eople, Management, and Organizations: The Human Being. Organizations and Management. MANAGEMENT BEFORE INDUSTRIALIZATION 15 Management in Early Civilizations: The Near East. The Far East. Egypt. The Hebrews. Greece. Rome. The Catholic Church. Feudalism and the Middle Ages. The Revival of Commerce. T he Cultural Rebirth: The Protestant Ethic. A Criticism of the Weberian Thesis. Modern Support for Weber. The Liberty Ethic. The Market Ethic. THE INDUSTRIAL REVOLUTION: PROBLEMS AND PERSPECTIVE The Industrial Revolution in England: The Age of Machines. Management: the Fourth Factor of Production. M anagement Problems in the Early Factory: The Search for Managerial Talent. The Labor Problem. The Shortage of Skilled Labor. Training. Discipline and Motivation. Management Functions in the Early 42 Xll CONTENTS Factory. Cultural Consequences of the Industrial Revolution: The Condition of the Worker. Child and Female Labor. MANAGEMENT PIONEERS IN THE FACTORY SYSTEM Robert Owen: The Search for a New Harmony: Early Managerial Experiences. The Call for Reform. Charles Babbage: The Irascible Genius: The First Computer....
Words: 1240 - Pages: 5
...The Evolution of Management Thinking 1880 - Scientific Management Frederick Taylor decides to time each and every worker at the Midvale Steel Company. His view of the future becomes highly accurate: "In the past man was first. In the future the system will be first." - Frederick Taylor In scientific management the managers were elevated while the workers' roles were negated. "Science, not rule of thumb, - Frederick Taylor The decisions of supervisors, based upon experience and intuition, were no longer important. Employees were not allowed to have ideas of responsibility. Yet the question remains — is this promotion of managers to center-stage justified? 1929 – Taylorism The Taylor Society publishes a revised and updated practitioner's manual: Scientific Management in American Industry. 1932 - The Hawthorne Studies Elton Mayo becomes the first to question the behavioral assumptions of scientific management. The studies concluded that human factors were often more important than physical conditions in motivating employees to greater productivity. 1946 - Organization Development Social scientist Kurt Lewin launches the Research Center for Group Dynamics at the Massachusetts Institute of Technology. His contributions in change theory, action research, and action learning earn him the title of the “Father of Organization Development:” the systematic application of behavioral science knowledge at various levels (group, intergroup, and total organization)...
Words: 1068 - Pages: 5
...and management control system. The most important cost accounting text books had been developed by 1925 is explained most the entire practices employed by firm today. Looking down on for the past 60 years, there’s a huge change in management nature and competition dimensions with a few innovation in the design, implementation of cost accounting and management control system. Then, it is not only applicable but important that we understand current practices that reflect on the latest demands for planning and control information, and evolve a research strategy to meet these demands. There are five section of the evolution of management accounting, namely ‘A Summary of Historical Development in Cost Accounting’, ‘Historical Development of Managerial Control’, ‘Development since 1925 in Cost Accounting and Managing Control’, ‘New Challenges for Cost and ‘Managerial Accounting Research’ and ‘New Directions for Management Control Research’. 1. A Summary of Historical Development in Cost Accounting Thomas Johnson has been traced the development of cost accounting and management control practices in US corporations. The history of the development of US corporations in Chandler had been built by this research. During the period 1850-1925 it is very important to know the cost and management control information to support the gain business of transportation, production and distribution. Littleton, Solomans and Garner provide extra ideas of historical perspectives on the evolution in cost...
Words: 958 - Pages: 4
...AN EMPIRICAL INVESTIGATION OF THE EVOLUTION OF MANAGEMENT ACCOUNTING PRACTICES by Magdy Abdel-Kader University of Essex and Robert Luther University of Bristol WP No. 04/06 October 2004 Address for correspondence: Magdy Abdel-Kader Department of Accounting, Finance and Management University of Essex Colchester Essex CO4 3SQ UK E-mail: mabdel@essex.ac.uk 1 An Empirical Investigation of the Evolution of Management Accounting Practices Magdy Abdel-Kadera and Robert Lutherb a: Department of Accounting, Finance and Management, University of Essex, Wivenhoe Park, Colchester, CO4 3SQ (Correspondence address) b: Bristol Business School, U.W.E., Bristol, BS16 1QY The authors are grateful for the constructive comments of participants at the EIASM conference on New Directions in Management Accounting: Innovations in Practice and Research, December 2002, Brussels. Financial support from the Chartered Institute of Management Accountants is acknowledged with gratitude. 2 An Empirical Investigation of the Evolution of Management Accounting Practices Abstract This paper investigates and reports on the status of management accounting practices in UK industry. The analysis operationalises the IFAC statement on Management Accounting Concepts and its description of the evolution of management accounting. The results, based on responses from 123 practising management accountants, suggest that the management accounting employed in many UK industrial companies is...
Words: 11706 - Pages: 47
