Attempts to create a formal approach to studying the working process were made at the end of the nineteenth century, and most of the major advancements in management theory were made in the course of the twentieth century. Scientific management theory was the first school that used a formalized approach to leadership and, despite many limitations, provided a good starting point for the development. The behavioral theory emphasized the importance of understanding psychology for successful management. The quantitative school used science and mathematics for efficient planning. New ways to look at organizations and approach leadership problems were provided by the systems theory and contingency paradigm.
Management theories consist of rules and methods that can be applied to effectively run an organization. Studying the evolution of different schools of thought helps better understand the principles and approaches that provide a theoretical framework for leadership. Management theories started to develop in the late nineteenth century and saw major advancement in the twentieth century. This paper discusses the five key milestones in the history of management: scientific, behavioral, quantitative, systems, and contingency theories.
One of the first major advancements in management theory was made at the beginning of the twentieth century with the creation of the scientific management theory. This approach was formulated by Frederic Winslow Taylor in 1909 (Khorasani & Almasifard 2017). At that time, there were not any structured theories of leadership, and business owners used common sense and personal understanding while running their companies. Taylor and his colleagues were the first who employed the scientific approach to studying the work process. Taylor’s management theory is focused on the productivity of employees and the efficiency of an organization. Tayler suggested that an employer should assign fixed, well-defined roles to each worker, monitor the work process and use financial rewards as a form of motivation. It was also emphasized that hierarchy should be based on merit (Khorasani & Almasifard, 2017). The main limitation of this paradigm is that it evaluates workers solely by productivity and does not take into account initiative and innovation.
The establishment of the behavioral theory was another milestone in the history of management. The advancements and growing public interest in the field of psychology in the first half of the twentieth century led to attempts to apply the understanding of basic behavioral principles to business. The work of Abraham Maslow in studying human needs and motivation made a substantial contribution to the development of this approach. Unlike the scientific management theory that used monitory rewards as the only form of motivation, the behavioral paradigm suggested that managers should understand the human aspect of employees to achieve objectives (Khorasani & Almasifard 2017). This school was the first to emphasize the importance of worker satisfaction and working conditions. Behaviorists encouraged businesses to treat workers as valuable assets, taking into account human needs. At the same time, critics of behavioristic methods outlined that the theorists based their conclusions on simplistic interpretations of psychology without providing sufficient evidence (Khorasani & Almasifard 2017). Thus, the behavioral theory played a big role historically by turning attention to employees, but it was limited by the lack of scientific evidence and oversimplification of human psychology.
The collective work of many scientists during the Second World War and the creation of the computer led to a new advancement in management. The quantitative school uses a structured scientific approach and mathematical modeling to handle complex management problems. George Dantzig, who suggested using advanced mathematics and quantitative techniques in planning, is considered the father of this approach. The main problem of this method is the fact that it is often impossible to create a model that would take into account all variables involved in a complex process. In addition to that, quantitative techniques take a significant amount of time to use, which results in delays in work (Khorasani & Almasifard 2017). This approach to management can be effective in some areas, especially in science, but there are setbacks that limit its application.
Another milestone in the evolution of management is the establishment of the systems theory in the 1960s. American economist Herbert Alexander Simon is the father of this school. The creation of this new approach was made possible by the emergence of new interdisciplinary methods that could be applied to business. Systems management theory treats an organization as a complex system of interconnected parts, each of which has its function. Opposite to the proceeding schools of management that teach that there might be only one right solution for a problem, the systems theory states that goals can be achieved in many ways. This paradigm allows to describe processes in an organization and to develop mechanisms to achieve objectives. The shortcomings of the approach come with the fact that the nature of the relationships between different entities is sometimes hard to define (Khorasani & Almasifard 2017). Despite some limitations, this systematic approach can be effective in many situations, and it is still used now.
The contingency paradigm was the next important step in the evolution of modern management. This approach is based on contingency modeling of leadership that was introduced by Fred Fiedler in 1967. The importance of this theory lies in the fact that it provided an innovative way of looking at old problems. The contingency approach is based on the idea that the effectiveness of leadership depends on the application of management in a specific situation and requires flexibility and adjustability. A high level of complexity and the necessity for a substantial amount of analysis, together with the reactive nature of this methodology, are the main limitations of contingency theory (Otley, 2016). In spite of the sophistication inherent to this way to manage an organization, this approach remains widely used because of its effectiveness in dealing with complex problems.
Looking at the evolution of management theories provides multiple insights that help understand the subject. Various schools focus on different aspects of leadership and develop tools that can be applied to solve problems and increase the efficiency of an organization. Although all of the paradigms that have been discussed in this paper have some limitations, understanding their central principles allows us to successfully use them to achieve goals.
References
Khorasani, S. & Almasifard, M. (2017). Evolution of management theory within 20 century: A systemic overview of paradigm shifts in management.International Review of Management and Marketing, 7(3), 134-137. Web.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management Accounting Research, 31, 45-62.