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The Development History of Business Management Theories


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Title: The Development History of Business Management Theories

The Development History of Business Management
??1106? ????? ??? ?? ?? ??
1?Scientific Management
2?General Administrative Theory
3?Human resources approach
4?System approach, Contingency approach
5?Globalization, diverse workforce, innovation
and change management
Part 1. Scientific Management
Frederick Taylor(???????)
  • 1? the father of Scientific management.
  • 2?The Principles of Scientific management in

Background of That Time
  • There were no clear concepts of
    responsibilities to workers and managers.
  • No effective work standards existed.
  • Management decisions were based on hunch and
  • Workers were placed on jobs with little or no
    concern for matching their abilities and
    aptitudes with the tasks required.
  • Managers and workers considered themselves to be
    in continual conflictany gain by one would be at
    the expense of the other.

Scientific management also
called Taylorism
Key words
analyzed and synthesized   labor
Taylors Four Principles of Management
  • Develop a scientific way for each element of an
    individuals work, which replaces the old
    rule-of-thumb method.
  • Scientifically select and then train, teach, and
    develop the worker.
  • Heartily cooperate with the workers so as to
    ensure that all work is done in accordance with
    the scientific way that has been developed.
  • Divide work and responsibility almost equally
    between managers and workers. Managers take over
    all work for which it is better fitted than the

  • Today, most of its themes are still
    important parts of industrial engineering and
  • Analysis
  • Synthesis
  • Logic
  • Rationality
  • Empiricism
  • Work ethic
  • Efficiency and elimination of waste
    standardization of best practices

  • How do todays managers use Scientific
  • Use time and motion studies to increase
  • Hire the best qualified employees
  • Design incentive systems based on output

  • Part2
  • General Administrative Theory

  • Herial Fayol
  • French executive and engineer
  • Herial Fayols contributions
  • He stated 14 principles of
    managementfundamental or universal truths.
  • 1916 Industrial management and general

Fayols Administrative Theory
  • Five Elements of Management -- Managerial
  • Forecasting and planning ?????
  • Organizing ??
  • Command ??
  • Coordination ??
  • Control ??
  • Keep machine functioning effectively and
  • Replace quickly and efficiently any part or
    process that did not contribute to the objectives

Fayols Administrative Theory
  • Fourteen Principles of Management (Tools for
    Accomplishing Objectives)
  • Division of work ????
  • Authority and Responsibility ?????
  • Discipline ??
  • Unity of Command ????

Unity of Direction ???? Remuneration
of Personnel ???? Centralization
?? . Scalar Chain
  • Order ??
  • Equity ??
  • Stability of Tenure of Personnel ????

  • Subordination of Individual Interest to General
    Interest ??????????
  • Initiative ????
  • Esprit de corps ????

Webers Theory of Bureaucracy
  • Max Weber (1864-1920)
  • German Sociologist
  • Theory of Social and Economic Organization (1947)
  • Principles and Elements of Management - describe
    an ideal or pure form of organizational structure
    (general policy and specific commands
  • PRIMARY FOCUS Organizational Structure
  • Worker should respect the right of managers to
    direct activities dictated by organizational
    rules and procedures

Webers Theory of Bureaucracy
  • Bureaucracy allows for the optimal form of
    authority - rational authority
  • Three types of Legitimate Authority
  • Traditional Authority - past customs personal
  • Charismatic Authority - personal trust in
    character and skills
  • Rational Authority - rational application of
    rules or laws

Max Weber Max Webers contributions
Weber developed a theory of authority structures
and described organizational activity on the
basis of authority relations. He described an
ideal type of organization that he called a
bureaucracy, characterized by division of labor,
a clearly defined hierarchy, detailed rules and
regulations, and impersonal relationships.
Webers Ideal Bureaucracy
  • Division of labor ????
  • Authority hierarchy ????
  • Formal selection ?????
  • Formal rules and regulation ????????
  • Impersonality ????
  • Career orientation ??????

  • Part 3
  • Human resources approach

Human resources approach
  • Managers get things done by working with people,
    which explains why some writers and researchers
    have chosen to look at management by focusing on
    the organizations human resources. Much of what
    currently makes up the field of personnel or
    human resources management, as well as
    contemporary views on motivation and leadership,
    has come out of the work of theorists we have
    categorized as part of the human resources
    approach to management.

Look at people as humans rather than
machines Peoples need The
environment( human relations)
Human resources approach(Before 1950s)
Get the main ideas
1.Who were some early advocates of the human
resources approach?
  • Undoubtedly, many people in the
    nineteenth and early part of the twentieth
    centuries recognized the importance of the human
    factor to an organizations success, but five
    individuals stand out as early advocates of the
    human resources approach. They are Robert Owen,
    Hugo Munsterberg, Mary Paraker Follett, Chester
    Barnard, and Elton Mayo.

Robert Owen
The Background of Robert Owen
  • Robert Owen was a successful Scottish
    businessman who bought his first factory in 1789
    when he was just 18 years old. Repulsed by the
    harsh practices he saw in factories across
    Scotland such as the employment of young children
    (many under the age of 10), 13 hour work days,
    and miserable working conditions Owen became a

The Background of Robert Owen
  • He chided factory owners for treating
    their equipment better than their employees. He
    said that they would buy the best machines but
    then buy the cheapest labor to run them. Owen
    argued that money spent on improving labor
    conditions was one of the best investments that
    business executive could make. He claimed that a
    concern for employees was highly profitable for
    management and would relieve human misery.

The status of Owen
  • Owen proposed a utopian workplace he is
    not remembered in management history for his
    successes but rather for his courage and
    commitment to reducing the suffering of the
    working class. He was more than a hundred years
    ahead of his time when he argued, ,in 1825 for
    regulated hours of work for all, child labor
    laws, public education, company furnished tools
    and equipment and business involvement in
    community projects.

2. Maslow's hierarchy of needs
  • Maslows hierarchy of
    needs(?????????,??????????) is a theory in
    psychology, proposed by Abraham Maslow in his
    1943 paper "A Theory of Human Motivation".
  • .

  • Maslow use the terms Physiological,
    Safety, Belongingness and Love, Esteem, and
    Self-Actualization needs to describe the pattern
    that human motivations generally move through.
  • ??????,?????????,????????????????????????

3. Douglas McGregor
  • Douglas Murray McGregor (1906) was a
    Management professor at the MIT Sloan School of
    Management and president of Antioch College from
    1948 to 1954.

His theory
  • In the book The Human Side of
    Enterprise (the fourth most influential
    management book of the 20th century in a poll of
    the Fellows of the Academy of Management),
    McGregor identified an approach of creating an
    environment within which employees are motivated
    via authoritative, direction and control or
    integration and self-control, which he called
    theory X and theory Y,respectively. Theory Y is
    the practical application of Dr. Abraham Maslow's
    Humanistic School of Psychology, or Third Force
    psychology, applied to scientific management.

  • Part 4
  • System approach, Contingency approach

System Approach
  • Whats the system approach?
  • Two basic types of the system
  • closed and open
  • Closed systems are not influenced by and do not
    interact with their environment.
  • In contrast, an open system dynamically interacts
    with its environment.

Whats the System Approach?
  • The system approach defines a system as a set
    of interrelated and interdependent parts arranged
    in a manner that produces a unified whole.
    Societies are systems and so, too, are computers,
    automobiles, organizations, and animal and human

The definition of Contingency Approach
  • An assumption that no one theory or method for
    business management can apply to all businesses
    or to all circumstances.
  • From a business perspective, using a contingency
    approach to problem solving would indicate that
    issues need to be understood and then addressed
    in ways that depend on the environment and
    context in which they occur.

Contingency Approach
  • Contingency approach, also known as situational
    approach, is a concept in management stating that
    there is no one universally applicable set of
    management principles (rules) by which to manage

  • A conceptual model of the contingency approach
    was developed by Kieser and Kubicek.

  • According to the model, the formal structure of
    an organization defines the roles of its members
    in a specific way and thereby directs their
    behavior to a certain degree. The performance of
    the organization depends on the degree to which
    these role definitions enable members to cope
    with the requirements resulting from the context
    of the organization.

  • Part 5
  • Globalization, diverse workforce, innovation
    and change management

  • Forms of globalization (Internationalization)
  • Stages of going global
  • Understanding different cultures

Forms of Internationalization
  • Multinational Corporations (MNCs)
  • Multinational corporations maintain
    significant operations in two or more countries
    simultaneously but are based in one home country
  • Transnational Corporations (TNCs)
  • Transnational corporations maintain
    significant operations in more than one country
    simultaneously and decentralizes decision making
    in each operation to the local country.
  • Borderless Organization
  • Borderless organization is a management
    structure in which internal arrangements that
    impose artificial geographic barriers are broken

Stages of Going Global
Stage? Passive Response
Stage? Initial Overt Entry
Stage? Established International
Foreign subsidiary
Joint ventures
Hiring foreign Representation or Contracting
with Foreign manufactures
Exporting to foreign countries
Licensing/ franchising
Four Dimensions of National Culture
  • Individualism versus collectivism
  • Power distance
  • Uncertainty avoidance
  • Quantity versus quality of life

Continuous Improvements in Quality TQM
  • Original idea
  • Deming emphasized the use of statistics to
    analyze variability in production processes to
    create uniform quality and predictable quantity
    of output.
  • TQM (total quality management)
  • TQM is a philosophy of management that is
    driven by customer needs and expectations and
    that is committed to continuous improvement.

Components of Total Quality Management
  • Intense focus on the customer
  • Concern for continuous improvement
  • Improvement in the quality of everything the
    organization does
  • Accurate measurement
  • Empowerment of employees

Diverse workforce
  • Religious affiliation
  • Age
  • Disability status
  • Military
  • Experience
  • Sexual orientation
  • Economic class
  • Educational level

Competitive advantages through diverse workforce
  • Ability to attract and retain motivated employees
  • Better perspective of a differentiated market
  • Ability to leverage creativity and innovation in
  • Enhancement of organizational flexibility

What is Innovation?
  • Innovation means renewal or alter
  • Prerequisite for innovation is the
    dissatisfaction with the current status and an
    inquisitive mind

Innovation Management
  • Innovation management is the discipline
    of managing processes in innovation. It can be
    used to develop both product and organizational
    innovation. Without proper processes, it is not
    possible for RD to be efficient.

Innovation Management
  • Innovation management includes a set of tools
    that allow managers and engineers to cooperate
    with a common understanding of goals and
    processes. It involves workers at every level in
    contributing creatively to a company's
    development, manufacturing, and marketing.

What are innovation drivers?

Focus of innovation management
  • Allow the organization to respond to an external
    or internal opportunity
  • Use its creative efforts to introduce new ideas,
    processes or products

Change management
  • Change management is an approach to
    shifting/transitioning individuals, teams,
    and organizations from a current state to a
    desired future state. It is an organizational
    process aimed at helping change stakeholders to
    accept and embrace changes in their business

6 Processes Associated with Organizational Change
  • Innovation and change are facilitated when
    organizations create a stage that enables and
    motivates innovation.
  • Stage-setting initially involves an extended
    gestation period involving many participants
    not spur of the moment, or single dramatic
    incident or a single entrepreneur.

6 Processes Associated with Organizational Change
  • Shocks (not mere persuasion), produced by
    exposing individuals to direct personal
    confrontations with needs or problems, are
    necessary to trigger attention and action for

6 Processes Associated with Organizational Change
  • Once innovation activities begin, the process
    does not unfold in a simple linear sequence of
    stages instead, it proliferates into complex
    bundles of ideas and divergent paths of

6 Processes Associated with Organizational Change
  • Setbacks and mistakes are frequently encountered
    during the innovation process. Innovation or
    opportunities for learning through reinvention
    are often rejected. Learning fails when
    individuals initiating change cause consequences
    felt by people not involved in its initiation.

6 Processes Associated with Organizational Change
  • Change adoption is facilitated by modifying the
    innovations to fit the local organizational
    situation, through extensive involvement in and
    commitment to the innovation by top management.

6 Processes Associated with Organizational Change
  • Change processes vary with the novelty, size, and
    duration of the innovations being developed and
    adopted. The greater the novelty, size and
    duration of a change, the more complex the

  • Thank you for listening