The Historical Evolution of Management Theory from 1900 to Present: The Changing role of Leaders in Organizations
By Manie Bosman
The evolution in management theory over the last century is the history of the constantly changing role of leaders in organizations. As organizational leaders evolved from the carrot-and-stick wielding owner-managers of the earlier Industrial Era to the Servant Leaders of the 21st Century, the impact of individual leaders on organizations became progressively important. Whereas early managers could rely on authority and strong-arm tactics to reach their goals, servant leaders in our time are challenged to set personal examples by living the values and principles they wish their followers to achieve.
Early Management and the study of management
Although great feats of human achievement such as the Egyptian pyramids, the Great Wall of China, the Colosseum in Rome and the Taj Mahal in India all bear testimony to skilled management in ancient times, the formal study of management only began late in the 19th century.
The main driving force behind this development of management as a science was the transition from 19th century “entrepreneurial capitalism” to early 20th century “managerial capitalism”. Whereas the first capitalists were business owners who used their own finances to fund organizations that they managed themselves, rapid industrial growth saw the formation of large organizations with capital often provided by outsiders. This not only “widened the gap” between owners or shareholders and management, it also brought new management challenges (Smit & Cronjé, 2002, p34-35; George, 1968).
One of the early pioneers of management theory was Frederick W. Taylor (1856-1915), a mechanical engineer who believed that it was management’s task to design jobs properly and to provide incentives to motivate workers to achieve higher productivity.
While working at the Midvale Steel Company in Philadelphia, Taylor developed a new, and at the time radical approach to managing, known as scientific management. He conducted studies into how workers or machines performed tasks, measuring and analyzing each measurable aspect of the work. He then determined standard times and sequences for the completion of each task. With this information, Taylor provided managers with realistic production standards per man- and machine-hour.
Taylor’s scientific management changed the role of managers from being run-of-the-mill whip men to specialized foremen who were adequately equipped to supervise each phase of the production process. On a larger scale, he revolutionized managerial thought and laid the foundation for the formation of many other management systems in decades to come.
The Administrative Approach
Across the Atlantic ocean Jules Henri Fayol (1841-1925), a fellow engineer and manager of a group of French mines, came to the conclusion that management was an activity common to all human undertakings (including home, business, government, schools, etc.) and that all these undertakings needed five basic administrative functions (planning, organizing, commanding, coordinating and controlling). He argued that because management was an all-encompassing activity, it should be taught in schools, colleges and universities.
Fayol’s approach rejected the old notion that “managers are born, not made”, proposing instead that management is a skill which can be acquired if its principles are understood.
The Bureaucratic Approach
Max Weber (1864-1920) was a German sociologist who approached management by focusing on organizational structure, dividing organizations into hierarchies with clear lines of authority and control. This meant that managers were given “legal authority” based on their position in the organizational structure, to enforce rules and policy (Smit & Cronjé, 2002, p41).
Weber’s bureaucratic system helped large organizations to function in a more stable, organized and systematic manner. However, by doing away with personality based or charismatic leadership, individuality and creativity is often sacrificed. Bureaucratic leaders and workers are required to obey rules and do only what they are told. The result is that these leaders seldom think “outside the box” and therefore find it very difficult to adapt to changing environments and new challenges.
The Human Relations Movement
Elton Mayo (1880-1949) was a Harvard professor who proposed that managers should become more “people-orientated” (Smit & Cronjé, 2002, p43). Conducting experiments on conditions in the workplace and incorporating the well-published findings of the Hawthorne Studies, Mayo declared that “logical factors were far less important than emotional factors in determining productive efficiency” (George, 1968, p129). He concluded that participation in social groups and “group pressure”, as opposed to organizational structures or demands from management, had the strongest impact on worker productivity (Smit & Cronjé, 2002, p43).
Mayo’s findings once again revolutionized the role of managers in organizations. The work performed by individuals has to satisfy their “personal, subjective” social needs as well as the company’s productive requirements. He and other proponents of this movement therefore called for managers to “accept a new role” in their relationship with workers; develop a new concept of authority; and help foster a new social order in the workplace (George, 1968). In practice managers were encouraged to consult workers about change, take note of their views, and to show concern for their physical and mental health (Wren, 2005, p. 293).
Although the concept of servant-leadership is found in the Bible and might even date further back into antiquity, it was first proposed as a management approach by Peter Greenleaf (1904-1990) in his book Servant Leadership (Smit & Cronje, 2002). He explained that becoming a servant-leader “begins with the natural feeling that one wants to serve” followed by the aspiration to lead (Carroll, 2005).
This approach completely revolutionized the role of managers in organizations as it calls for leaders to place the priorities and needs of their followers before their own or that of the organization. It also differentiates clearly between the functions of leadership and management, although the ideal is that modern day servant leader / managers should be able to perform both functions simultaneously. Servant-leadership “encourage collaboration, trust, foresight, listening, and the ethical use of power and empowerment as a way of improving the life of the individuals and/or the organizations” (Hartley p288). According to Greenleaf, the ultimate test for successful servant leadership is whether or not followers have grown as persons as a result of being served – becoming “healthier, wiser, freer, more autonomous and more likely themselves to become servants”.
Summary and Recommendations
The role and responsibilities of leaders in organizations has undergone some radical changes over the last 100 years. Evolving from the strong-armed bosses of early entrepreneurial capitalism to bureaucrats whose authority rested in their organizational position, to leaders who have to find new ways to convince employees to follow them in the quick-changing information era, the challenges and opportunities for leadership is perhaps now greater than ever.
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Copyright - Manie Bosman, January 2009
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