Introduction to Business

Module 9: Management

Management Theory

What you'll learn to do: summarize the development of management theory and the key functions of management today

Management theory got its start during the Industrial Revolution when companies were interested in maximizing the productivity and efficiency of their workers in a scientific way. In this section you'll learn about the major contributors to the field of management theory and how their ideas are used today.

Learning outcomes

  • Summarize the four principles of Frederick Taylor's scientific management theory
  • Summarize the contributions of Frank and Lillian Gibreth to scientific management
  • Summarize Henri Fayol's contributions to the field of management theory
  • Summarize the key functions of management today

Scientific Management Theory

Just over one hundred years ago Frederick Taylor published Principles of Scientific Management, a work that forever changed the way organizations view their workers and their organization. At the time of Taylor's publication, managers believed that workers were lazy and worked slowly and inefficiently in order to protect their jobs. Taylor identified a revolutionary solution:

The remedy for this inefficiency lies in systematic management, rather than in searching for some unusual or extraordinary man.
You might think that a century-old theory wouldn't have any application in today's fast-paced, technology-driven world. You'd be wrong, though! In fact much of what you've already learned in this course is based on Taylor's work, and plenty of what you'll experience in the workplace will be indebted to him, too. If you recognize any of the following, you have already seen his principles of scientific management in action: organizational charts, performance evaluations, quality measurements and metrics, and sales and/or production goals.

Scientific management is a management theory that analyzes work flows to improve economic efficiency, especially labor productivity. This management theory, developed by Frederick Winslow Taylor, was popular in the 1880s and 1890s in U.S. manufacturing industries.

While the terms "scientific management" and "Taylorism" are often treated as synonymous, a more accurate view is that Taylorism is the first form of scientific management. Taylorism is sometimes called the "classical perspective," meaning that it is still observed for its influence but no longer practiced exclusively. Scientific management was best known from 1910 to 1920, but in the 1920s, competing management theories and methods emerged, rendering scientific management largely obsolete by the 1930s. However, many of the themes of scientific management are still seen in industrial engineering and management today.

Frederick Winslow Taylor

A headshot of Frederick Winslow Taylor Frederick Taylor (1856–1915) is called the Father of Scientific Management.

Taylor was a mechanical engineer who was primarily interested in the type of work done in factories and mechanical shops. He observed that the owners and managers of the factories knew little about what actually took place in the workshops. Taylor believed that the system could be improved, and he looked around for an incentive. He settled on money. He believed a worker should get “a fair day’s pay for a fair day’s work”—no more, no less. If the worker couldn’t work to the target, then the person shouldn’t be working at all. Taylor also believed that management and labor should cooperate and work together to meet goals. He was the first to suggest that the primary functions of managers should be planning and training.

A significant part of Taylorism was time studies. Taylor was concerned with reducing process time and worked with factory managers on scientific time studies. At its most basic level, time studies involve breaking down each job into component parts, timing each element, and rearranging the parts into the most efficient method of working. By counting and calculating, Taylor sought to transform management into a set of calculated and written techniques. 

Taylor proposed a "neat, understandable world in the factory, an organization of men whose acts would be planned, coordinated, and controlled under continuous expert direction. " Factory production was to become a matter of efficient and scientific management—the planning and administration of workers and machines alike as components of one big machine.

In 1909, Taylor published The Principles of Scientific Management. In this book, he suggested that productivity would increase if jobs were optimized and simplified. He also proposed matching a worker to a particular job that suited the person’s skill level and then training the worker to do that job in a specific way. Taylor first developed the idea of breaking down each job into component parts and timing each part to determine the most efficient method of working.

One of Taylor's most famous studies was from his time at the Bethlehem Steel Company in the early 1900s. He noticed that workers used the same shovel for all materials, even though the various materials differed in weight. By observing the movements of the workers and breaking the movements down into their component elements, Taylor determined that the most efficient shovel load was 21½ lb.  Accordingly, he set about finding or designing different shovels to be used for each material that would scoop up that amount.

Scientific management has at its heart four core principles that also apply to organizations today. They include the following:

  • Look at each job or task scientifically to determine the “one best way” to perform the job. This is a change from the previous “rule of thumb” method where workers devised their own ways to do the job.
  • Hire the right workers for each job, and train them to work at maximum efficiency.
  • Monitor worker performance, and provide instruction and training when needed.
  • Divide the work between management and labor so that management can plan and train, and workers can execute the task efficiently.

Practice Question

Frank and Lillian Gilbreth

While Taylor was conducting his time studies, Frank and Lillian Gilbreth were completing their own work in motion studies to further scientific management. The Gilbreth name may be familiar to anyone who has read the book Cheaper By The Dozen (or seen the movie the book inspired). The book is a biographical novel about the Gilbreth family, their twelve children, and the often humorous attempts of the Gilbreths to apply their efficiency methods in their own household.

The Gilbreths made use of scientific insights to develop a study method based on the analysis of work motions, consisting in part of filming the details of a worker's activities while recording the time it took to complete those activities. The films helped to create a visual record of how work was completed, and emphasized areas for improvement. Secondly, the films also served the purpose of training workers about the best way to perform their work.

This method allowed the Gilbreths to build on the best elements of the work flows and create a standardized best practice. Time and motion studies are used together to achieve rational and reasonable results and find the best practice for implementing new work methods. While Taylor's work is often associated with that of the Gilbreths, there is a clear philosophical divide between the two scientific-management theories. Taylor was focused on reducing process time, while the Gilbreths tried to make the overall process more efficient by reducing the motions involved. They saw their approach as more concerned with workers' welfare than Taylorism, in which workers were less relevant than profit. This difference led to a personal rift between Taylor and the Gilbreths, which, after Taylor's death, turned into a feud between the Gilbreths and Taylor's followers.

Practice Question

Even though scientific management was pioneered in the early 1900s, it continued to make significant contributions to management theory throughout the rest of the twentieth century. With the advancement of statistical methods used in scientific management, quality assurance and quality control began in the 1920s and 1930s. During the 1940s and 1950s, scientific management evolved into operations management, operations research, and management cybernetics. In the 1980s, total quality management became widely popular, and in the 1990s "re-engineering" became increasingly popular. One could validly argue that Taylorism laid the groundwork for these large and influential fields that we still practice today.

Field of Management Theory

Henri Fayol and Administrative Theory

Black-and-white photo of Henri Fayol, 1900. Henri Fayol, ca. 1900

Henri Fayol was born in France in 1841. Fayol was a mining engineer who became the head of a large mining company. He wanted managers to be responsible for more than just increasing production. The story goes that he came to this insight when a mine was shut down after a horse broke a leg and no one at the mine had authority to purchase another. Fayol saw this as a direct failure of management to plan and organize the work. Following this, Fayol began experimenting with different management structures.

He condensed his ideas and experiences into a set of management duties and principles, which he published in 1916 in the book General and Industrial Management. Fayol incorporated some of Weber’s ideas in his theories. However, unlike Weber, Fayol was concerned with how workers were managed and how they contributed to the organization. He felt that successful organizations, and therefore successful management, were linked to satisfied and motivated employees.

Fayol’s five duties of management were as follows:

  • Foresight: Create a plan of action for the future.
  • Organization: Provide resources to implement the plan.
  • Command: Select and lead the best workers through clear instructions and orders.
  • Coordinate: Make sure the diverse efforts fit together through clear communication.
  • Control: Verify whether things are going according to plan and make corrections where needed.

These duties evolved into the four functions of management: planning (foresight), organizing (organization), leading (command and coordinate), and controlling (control).

Fayol also proposed a set of fourteen principles that he felt could guide management behavior, but he did not think the principles were rigid or exhaustive. He thought management principles needed to be flexible and adaptable and that they would be expanded through experience and experimentation. Some of Fayol’s principles are still included in management theory and practice, including the following:

  • Scalar chain: An unbroken chain of command extends from the top to the bottom of the organization.
  • Unity of command: Employees receive orders from only one superior.
  • Unity of direction: Activities that are similar should be the responsibility of one person.
  • Division of work: Workers specialize in a few tasks to become more proficient.

Practice Question

Key Functions of Management Today

Over the years, management theorists have built upon and refined Fayol's original work and, more recently, have combined the “command” and “coordinate” functions into one function: leading. Today, the key functions of management are considered to be the following: planningorganizing, staffingleadingcontrolling, and motivating.

  • Planning: Deciding what needs to happen in the future (today, next week, next month, next year, over the next five years, etc.) and generating plans for action.
  • Organizing: Implementing a pattern of relationships among workers and making optimum use of the resources required to enable the successful carrying out of plans.
  • Staffing: Job analysis, recruitment, and hiring of people with the necessary skills for appropriate jobs. Providing or facilitating ongoing training, if necessary, to keep skills current.
  • Leading/directing: Determining what needs to be done in a situation and getting people to do it.
  • Controlling/monitoring: Checking current outcomes against forecast plans and making adjustments when necessary so that goals are achieved.
  • Motivating: Motivation is a basic function of management because without motivation, employees may feel disconnected from their work and the organization, which can lead to ineffective performance. If managers do not motivate their employees, they may not feel their work is contributing to the overall goals of the organization (which are usually set by top-level management).

All levels of management perform these functions; however, as with the skills required for effective management, the amount of time a manager spends on each function depends on the level of management and the needs of the organization. In the next readings we will explore each of these functions in greater depth.

Practice Question


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