Early management Concepts and influences

o Growth of companies
• minor improvements in management tactics produced impressive
increases in production quantity and quality
• economies of scale - reductions in the average cost of a unit production as
the total volume produced increases
• opportunities for mass production created by the industrial revolution
spawned intense and systematic thought about management problems and
issues

Systematic management:
o Key concepts
• systematized manufacturing operations
• coordination of procedures and processes built into internal operations
• emphasis on economical operations, inventory management, and cost
control
o Contributions
• beginning of formal management in the United States
• promotion of efficient, uninterrupted production
o Limitations
• ignored relationship between an organization and it environment
• ignored differences in managers’ and workers’ views

Scientific Management:
o Key concepts
• used scientific methods to determine the “one best way’
• emphasized study of tasks, selection and training of workers, and
cooperation between workers and management
o Contributions
• improved factory productivity and efficiency
• introduced scientific analysis to the workplace
• piece-rate system equated worker rewards and performance
o Limitations
• simplistic motivational assumptions
• workers viewed as parts of a machine
• potential for exploitation of labor

Administrative Management:
o Key concepts
• Fayol’s five functions and 14 principles of management
• executives formulate the organization’s purpose, secure employees, and
maintain communications
• managers must respond to changing developments
o Contributions
• viewed management as a profession that can be trained and developed
• emphasized the broad policy aspects of top-level managers
 • offered universal managerial prescriptions
o Limitations
• universal prescriptions need qualifications for contingencies

Human Relations
o Key concepts
• productivity and employee behavior are influenced by the informal work
group
• should stress employee welfare, motivation, and communication
• social needs have precedence over economic needs
o Contributions
• psychological and social processes influence performance
• Maslow’s hierarchy of need
o Limitations
• ignored workers’ rational side and the formal organization’s contributions
to productivity
• research overturned the simplistic belief that happy workers are more
productive

Bureaucracy:
o Key Concepts
• structured network of relationships among specialized positions
• rules and regulations standardize behavior
• jobs staffed by trained specialists who follow rules
o Contributions
• promotes efficient performance of routine operations
• eliminates subjective judgment by employees and management
• emphasizes position rather than the person
o Limitations
• limited organizational flexibility and slowed decision making
• ignores the importance of people and interpersonal relationships
• rules may become ends in themselves

Quantitative Management:
o Key concepts
• application of quantitative analysis to management
o Contributions
• developed specific mathematical methods of problem analysis
• helped managers select the best alternative among a set
o Limitations
• models neglect non-quantitative factors
• managers not trained in these techniques may not trust or understand the
techniques’ outcomes
• not suited for non-routine or unpredictable management decisions
Organizational Behaviour:
o Key concepts
• promotes employee effectiveness through understanding of individual,
group, and organizational processes
• stresses relationships among employees/managers
• assumes employees want to work and can control themselves
o Contributions
• increased participation, greater autonomy, individual challenge and
initiative, and enriched jobs may increase participation
• recognized the importance of developing human resources
o Limitations
• some approaches ignored situational factors, such as the environment and
technology

System Theory:
o Key concepts
• organization is viewed as a managed system
• management must interact with the environment
• organizational goals must address effectiveness and efficiency
• organizations contain a series of subsystems
• there are many avenues to the same outcome
• synergies enable the whole to be more than the sum of the parts
o Contributions
• recognized the importance of the relationship between the organization
and the environment
o Limitations
• does not provide specific guidance on the functions of managers

Contingency theory:
o Key concepts
• situational contingencies influence the strategies, structures, and processes
that result in high performance
• there is more than one way to reach a goal
• managers may adapt their organizations to the situation
o Contributions
• identified major contingencies
• argued against universal principles of management
o Limitations
• not all important contingencies have been identified
• theory may not be applicable to all managerial issues