In for-profit work, management has
as its primary function the satisfaction of a range of stakeholders. This
typically involves making a profit (for the shareholders), creating valued
products at a reasonable cost (for customers), and providing rewarding
employment opportunities for employees. In nonprofit management, add the
importance of keeping the faith of donors. In most models of management and
governance, shareholders vote for the board of directors, and the board then
hires senior management. Some organizations have experimented with other
methods (such as employee-voting models) of selecting or reviewing managers,
but this is rare.
In the public sector of countries
constituted as
representative democracies,
voters elect politicians to public office. Such politicians hire many
managers and administrators, and in some countries like the United States,
political appointees lose their jobs on the election of a new
president/governor/mayor.
Difficulties arise in tracing the
history of management. Some see it (by definition) as a late modern (in the
sense of late modernity) conceptualization. On those terms it cannot have a
pre-modern history, only harbingers (such as stewards). Others, however,
detect management-like-thought back to Sumerian traders and to the builders
of the pyramids of ancient Egypt. Slave-owners through the centuries faced
the problems of exploiting/motivating a dependent but sometimes
unenthusiastic or recalcitrant workforce, but many pre-industrial
enterprises, given their small scale, did not feel compelled to face the
issues of management systematically. However, innovations such as the spread
of Hindu-Arabic numerals (5th to 15th centuries) and the codification of
double-entry book-keeping (1494) provided tools for management assessment,
planning and control.
Given the scale of most commercial
operations and the lack of mechanized record-keeping and recording before
the industrial revolution, it made sense for most owners of enterprises in
those times to carry out management functions by and for themselves. But
with growing size and complexity of organizations, the split between owners
(individuals, industrial dynasties or groups of shareholders) and day-to-day
managers (independent specialists in planning and control) gradually became
more common.
While management (according to
some definitions) has existed for millennia, several writers have created a
background of works that assisted in modern management theories.
Some ancient military texts have
been cited for lessons that civilian managers can gather. For example,
Chinese general Sun Tzu in the 6th century BC, The Art of War,
recommends being aware of and acting on strengths and weaknesses of both a
manager's organization and a foe's.
Various ancient and medieval
civilizations have produced "mirrors for princes" books, which aim to advise
new monarchs on how to govern. Examples include the Indian Arthashastra by
Chanakya (written around 300BC), and The Prince by Italian author
Niccolò Machiavelli (c. 1515).
Written in 1776 by Adam Smith, a
Scottish moral philosopher, The Wealth of Nations discussed efficient
organization of work through division of labour. Smith described how changes
in processes could boost productivity in the manufacture of pins. While
individuals could produce 200 pins per day, Smith analyzed the steps
involved in manufacture and, with 10 specialists, enabled production of
48,000 pins per day.
19th century
Classical economists such as Adam
Smith (17231790) and John Stuart Mill (18061873) provided a theoretical
background to resource-allocation, production, and pricing issues. About the
same time, innovators like Eli Whitney (17651825), James Watt (17361819),
and Matthew Boulton (17281809) developed elements of technical production
such as standardization, quality-control procedures, cost-accounting,
interchangeability of parts, and work-planning. Many of these aspects of
management existed in the pre-1861 slave-based sector of the US economy.
That environment saw 4 million people, as the contemporary usages had it,
"managed" in profitable quasi-mass production.
Salaried managers as an
identifiable group first became prominent in the late 19th century.
20th
century
By about 1900, one finds managers
trying to place their theories on what they regarded as a thoroughly
scientific basis (see scientism for perceived limitations of this belief).
Examples include Henry R. Towne's Science of management in the 1890s,
Frederick Winslow Taylor's The Principles of Scientific Management
(1911),
Frank and Lillian Gilbreth's Applied motion study (1917), and Henry L.
Gantt's charts (1910s). J. Duncan wrote the first college management
textbook in 1911. In 1912, Yoichi Ueno introduced
Taylorism to
Japan and became first management consultant of the "Japanese-management
style". His son
Ichiro Ueno pioneered Japanese quality
assurance.
The first comprehensive theories
of management appeared around 1920. The Harvard Business School offered the
first Master of Business Administration degree (MBA) in 1921. People like
Henri Fayol (18411925) and
Alexander Church
described the various branches of management and their inter-relationships.
In the early 20th century, people like Ordway Tead (18911973), Walter Scott
and J. Mooney applied the principles of psychology to management, while
other writers, such as Elton Mayo (18801949),
Mary Parker
Follett (18681933), Chester Barnard (18861961), Max Weber
(18641920), Rensis Likert (19031981), and
Chris
Argyris (* 1923) approached the phenomenon of management from a sociological
perspective.
Peter Drucker (19092005) wrote
one of the earliest books on applied management: Concept of the
Corporation (published in 1946). It resulted from Alfred Sloan (chairman
of General Motors until 1956) commissioning a study of the organization.
Drucker went on to write 39 books, many in the same vein.
H. Dodge, Ronald Fisher
(18901962), and Thornton C. Fry introduced statistical techniques into
management-studies. In the 1940s,
Patrick Blackett
worked in the development of the applied mathematics science of operations
research, initially for military operations. Operations research, sometimes
known as "management science" (but distinct from Taylor's scientific
management), attempts to take a scientific approach to solving decision
problems, and can be directly applied to multiple management problems,
particularly in the areas of logistics and operations.
Some of the more recent[update] developments include the Theory
of Constraints, management by objectives, reengineering, Six Sigma and
various information-technology-driven theories such as agile software
development, as well as group management theories such as
Cog's
Ladder.
As the general recognition of
managers as a class solidified during the 20th century and gave perceived
practitioners of the art/science of management a certain amount of prestige,
so the way opened for popularized systems of management ideas to peddle
their wares. In this context, many management fads may have had more to do
with pop psychology than with scientific theories of management.
Towards the end of the 20th
century, business management came to consist of six separate branches,
namely:
-
human resource management
-
operations management or production management
-
strategic management
-
marketing management
-
financial management
-
information technology management responsible for management
information systems
21st century
In the 21st century observers find
it increasingly difficult to subdivide management into functional categories
in this way. More and more processes simultaneously involve several
categories. Instead, one tends to think in terms of the various processes,
tasks, and objects subject to management.
Branches of management theory also
exist relating to nonprofits and to government: such as public
administration, public management, and educational management. Further,
management programs related to civil-society organizations have also spawned
programs in
nonprofit management and social entrepreneurship.
Note that many of the assumptions
made by management have come under attack from business-ethics viewpoints,
critical management studies, and anti-corporate activism.
As one consequence, workplace
democracy has become both more common, and more advocated, in some places
distributing all management functions among workers, each of whom takes on a
portion of the work. However, these models predate any current political
issue, and may occur more naturally than does a command hierarchy. All
management embraces to some degree a democratic principlein that in the
long term, the majority of workers must support management. Otherwise, they
leave to find other work or go on strike. Despite the move toward workplace
democracy, command-and-control organization structures remain commonplace as
de facto organization structure. Indeed, the entrenched nature of
command-and-control is evident in the way that recent layoffs have been
conducted with management ranks affected far less than employees at the
lower levels. In some cases, management has even rewarded itself with
bonuses after laying off lower-level workers.
According to leadership academic
Manfred F.R. Kets de Vries, a contemporary senior management team will
almost inevitably have some personality disorders.
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