Management Theories

Frederick Taylor was an inventor, an engineer, and the father of scientific management theory.
You will learn about Frederick Taylor, scientific management, and its effects on industrial
management in this lesson.

Frederick Taylor and Scientific Management

Frederick Winslow Taylor (1856-1915) was an American inventor and engineer that applied
his engineering and scientific knowledge to management and developed a theory called
scientific management theory. His two most important books on his theory are Shop
Management (1903) and The Principles of Scientific Management (1911).
Frederick Taylor's scientific management theory can be seen in nearly all modern
manufacturing firms and many other types of businesses. His imprint can be found in
production planning, production control, process design, quality control, cost accounting, and
even ergonomics. If you understand the principles of scientific management, you will be able
to understand how manufacturers produce their goods and manage their employees. You will
also understand the importance of quantitative analysis, or the analysis of data and numbers
to improve production effectiveness and efficiency.

Principles of Scientific Management Theory

In broad terms, scientific management theory is the application of industrial engineering
principles to create a system where waste is avoided, the process and method of production is
improved, and goods are fairly distributed. These improvements serve the interests of
employers, employees, and society in general. Taylor's theory can be broken down into four
general principles for management:
1. Actively gathering, analyzing, and converting information to laws, rules, or even
mathematical formulas for completing tasks.
2. Utilizing a scientific approach in the selection and training of workers.
3. Bringing together the science and the worker so that the workers apply the scientifically
developed techniques for the task.
4. Applying the work equally between workers and managers where management applies
scientific techniques to planning and the workers perform the tasks pursuant to the
plans.
Frederick Taylor approached the study of management quantitatively through the collection
and analysis of data. For example, he and his followers performed motion studies to improve
efficiency. He analyzed the motions required to complete a task, devised a way to break the
task down into component motions, and found the most efficient and effective manner to do
the work.
An example of a motion study is observing the number of distinct motions required to shovel
coal into a furnace. The task is then broken down into its distinct components, such as picking
up the shovel, walking to the coal, bending over, manipulating the shovel to scoop the coal,
bending back up, walking to the furnace, and manipulating the shovel to deposit the coal. The

most efficient way to perform the task was developed and workers were instructed on how to
apply the method.

Scientific management theory was developed in the early 20th century by Frederick W. Taylor.
We will be exploring the primary principles of scientific management and some of its key
contributors. You will also be given a chance to reinforce your knowledge with a short quiz.

Applications
Scientific management theory is important because its approach to management is found in
almost every industrial business operation across the world. Its influence is also felt in general
business practices such planning, process design, quality control, cost accounting, and
ergonomics. Your knowledge of the theory will give you a better understanding of industrial
management. You'll also understand how a manager can use quantitative analysis, an
examination of numbers and other measurable data, in management to improve the efficiency
and effectiveness of business operations.

Theorists
The founding father of scientific management theory is Frederick W. Taylor (1856-1915). He
was an American inventor and engineer. His two most important works were Shop
Management (1903) and The Principles of Scientific Management (1911).
The husband and wife team of Frank Gilbreth, Sr. and Lillian Moller Gilbreth contributed
to the theory. This duo continued the practice of time and motion studies started by Taylor,
believing they could find the best way to perform each task studied.

Definition, Principles & Contributions

Scientific management theory seeks to improve an organization's efficiency by systematically
improving the efficiency of task completion by utilizing scientific, engineering, and
mathematical analysis. The goal is to reduce waste, increase the process and methods of
production, and create a just distribution of goods. This goal serves the common interests of
employers, employees, and society.
Scientific management theory can be summarized by Taylor's Four Principles:
1. Managers should gather information, analyze it, and reduce it to rules, laws, or
mathematical formulas.
2. Managers should scientifically select and train workers.
3. Managers should ensure that the techniques developed by science are used by the
workers.
4. Managers should apply the work equally between workers and themselves, where
managers apply scientific management theories to planning and the workers perform
the tasks pursuant to the plans.

Management theories are implemented to help increase organizational productivity and service
quality. Not many managers use a singular theory or concept when implementing strategies in
the workplace: They commonly use a combination of a number of theories, depending on the
workplace, purpose and workforce. Contingency theory, chaos theory and systems theory are
popular management theories. Theory X and Y, which addresses management strategies for
workforce motivation, is also implemented to help increase worker productivity.

Contingency Theory
This theory asserts that managers make decisions based on the situation at hand rather than a
"one size fits all" method. A manager takes appropriate action based on aspects most important
to the current situation. Managers in a university may want to utilize a leadership approach that
includes participation from workers, while a leader in the army may want to use an autocratic
approach.

Systems Theory
Managers who understand systems theory recognize how different systems affect a worker and
how a worker affects the systems around them. A system is made up of a variety of parts that
work together to achieve a goal. Systems theory is a broad perspective that allows managers to
examine patterns and events in the workplace. This helps managers to coordinate programs to
work as a collective whole for the overall goal or mission of the organization rather than for
isolated departments.
Related Reading: What Are Effective Management and Motivational Theories in Relation to
Problem Solving?

Chaos Theory
Change is constant. Although certain events and circumstances in an organization can be
controlled, others can't. Chaos theory recognizes that change is inevitable and is rarely
controlled. While organizations grow, complexity and the possibility for susceptible events
increase. Organizations increase energy to maintain the new level of complexity, and as
organizations spend more energy, more structure is needed for stability. The system continues
to evolve and change.

Theory X and Theory Y

The management theory an individual chooses to utilize is strongly influenced by beliefs about
worker attitudes. Managers who believe workers naturally lack ambition and need incentives
to increase productivity lean toward the Theory X management style. Theory Y believes that
workers are naturally driven and take responsibility. While managers who believe in Theory X

values often use an authoritarian style of leadership, Theory Y leaders encourage participation
from workers.

The Principles of Scientific Management

The Principles of Scientific Management is a monograph published by Frederick Winslow
Taylor in 1911. This influential monograph, which laid out the principles of scientific
management, is a seminal text of modern organization and decision theory and has motivated
administrators and students of managerial technique. Taylor was an American manufacturing
manager, mechanical engineer, and then a management consultant in his later years. He is often
called "The Father of Scientific Management". His approach is also often referred to as Taylor's
Principles, or Taylorism.

Contents

1 Summary of the monograph

o 1.1 Introduction
o 1.2 Chapter 1: Fundamentals of Scientific Management
o 1.3 Chapter 2: The Principles of Scientific Management
2 See also
3 References
4 External links

Summary of the monograph

The monograph consisted of three sections: Introduction, Chapter 1: Fundamentals of
Scientific Management, and Chapter 2: The Principles of Scientific Management.
Introduction
Taylor started this paper by quoting then President of the United States, Theodore Roosevelt:
"The conservation of our national resources is only preliminary to the larger question of
national efficiency". Taylor pointed out that while a large movement had started to conserve
material resources, the less visible and less tangible effects of the wasted human effort was
only vaguely appreciated. He argues the necessity of focusing on training rather than finding
the "right man", stating "In the past the man has been first; in the future the system must be
first", and the first goal of all good systems should be developing first-class men. He listed
three goals for the work:
First. To point out, through a series of simple illustrations, the great loss which the whole
country is suffering through inefficiency in almost all of our daily acts.
Second. To try to convince the reader that the remedy for this inefficiency lies in systematic
management, rather than in searching for some unusual or extraordinary man.
Third. To prove that the best management is a true science, resting upon clearly defined laws,
rules, and principles, as a foundation. And further to show that the fundamental principles of
scientific management are applicable to all kinds of human activities, from our simplest

individual acts to the work of our great corporations, which call for the most elaborate
cooperation. And, briefly, through a series of illustrations, to convince the reader that whenever
these principles are correctly applied, results must follow which are truly astounding.
Lastly, Taylor noted that while the examples were chosen to appeal to engineers and managers,
his principles could be applied to the management of any social enterprise, such as homes,
farms, small businesses, churches, philanthropic institutions, universities, and government.
Chapter 1: Fundamentals of Scientific Management
Taylor argued that the principal object of management should be to secure the maximum
prosperity for the employer, coupled with the maximum prosperity for each employee. He
argued that the most important object of both the employee and the management should be the
training and development of each individual in the establishment, so that he can do the highest
class of work for which his natural abilities fit him. Taylor demonstrated that maximum
prosperity can exist only as the result of maximum productivity, both for the shop and
individual, and rebuked the idea that the fundamental interests of employees and employers are
necessarily antagonistic.
Taylor described how workers deliberately work slowly, or soldier, to protect their interests.
According to Taylor, there were three reasons for the inefficiency:
First. The fallacy, which has from time immemorial been almost universal among workmen,
that a material increase in the output of each man or each machine in the trade would result in
the
end
in
throwing
a
large
number
of
men
out
of
work.
Second. The defective systems of management which are in common use, and which make it
necessary for each workman to soldier, or work slowly, in order that he may protect his own
best
interests.
Third. The inefficient rule-of-thumb methods, which are still almost universal in all trades, and
in practicing which our workmen waste a large part of their effort.
Taylor argued that the cheapening of any article in common use almost immediately results in
a largely increased demand for that article, creating additional work and contradicting the first
belief.
As to the second cause, Taylor pointed to quotes from 'Shop Management' to help explain how
current management styles caused workers to soldier. He explained the natural tendency of
men to take it easy as distinct from "systematic soldiering" due to thought and reasoning, and
how bringing men together at a standard rate of pay exacerbated this problem. He described
how under standard day, piece, or contract work it was in the workers' interest to work slowly
and hide how fast work can actually be done, and the antagonism between workers and
management must change.
For the third cause, Taylor noted the enormous saving of time and increase in output that could
be obtained by eliminating unnecessary movements and substituting faster movements, which
can only be realized after a motion and time study by a competent man. While there are perhaps
"forty, fifty, or a hundred ways of doing each act in each trade", "there is always one method
and one implement which is quicker and better than any of the rest".

Chapter 2: The Principles of Scientific Management

In this section, Taylor explained his principles of scientific management.
He starts by describing what he considered the best system of management then in use, the
system of "initiative and incentive". In this system, management gives incentives for better
work, and workers give their best effort. The form of payment is practically the whole system,
in contrast to scientific management.
Taylor's scientific management consisted of four principles:
First. They develop a science for each element of a man's work, which replaces the old ruleof-thumb
method.
Second. They scientifically select and then train, teach, and develop the workman, whereas in
the past he chose his own work and trained himself as best he could.
Third. They heartily cooperate with the men so as to ensure all of the work being done in
accordance with the principles of the science which has been developed.
Fourth. There is an almost equal division of the work and the responsibility between the
management and the workmen. The management take over all work for which they are better
fitted than the workmen, while in the past almost all of the work and the greater part of the
responsibility were thrown upon the men.
Under the management of "initiative and incentive", the first three elements often exist in some
form, but their importance is minor. However, under scientific management, they "form the
very essence of the whole system".
Taylor's summary of the fourth point is Under the management of "initiative and incentive"
practically the whole problem is "up to the workman", while under scientific management fully
one-half of the problem is "up to the management". It is up to the management to determine
the best method to complete each task through a time and motion study, to train the worker in
this method, and keep individual records for incentive based pay.
Taylor devotes most of the remainder of the work to providing case studies to support his case,
including:

Moving pig iron at the Bethlehem Steel Company, with the famous story of the "ox"-like
worker Schmidt
Taylor's work at the Midvale Steel Company
Shoveling at Bethlehem Steel
Bricklaying, as studied by Frank B. Gilbreth
The inspection of small polished steel balls for bicycle bearing machine shop.

Taylor warned about attempting to implement parts of scientific management without

accepting the whole philosophy, stating that too fast of a change was often met with trouble,
strikes, and failure.

S.M.A.R.T. goals to launch management by

objectives plan
Management by Objectives, or MBO, is a management strategy that uses the S.M.A.R.T. goals
method--setting objectives that are specific, measurable, achievable, realistic, and time-based.
This article discusses the first steps toward implementing this management method in your
department.
Management by Objectives, or MBO as it is affectionately called, is a concept expressed by
Peter Drucker more than 50 years ago. This strategy for managing people, which focuses on
managing teams based on their ability to complete individual and team goals, has been used in
larger organizations since its inception. Small to midsize organizations, however, can also
benefit from adopting this strategy, particularly if you also take on the S.M.A.R.T. (specific,
measurable, achievable, realistic, and time-based.) method of implementation.

Making the case for MBO

MBO works because it helps to align the individual efforts of broad teams around the
organization's collective objectives. MBO works in the same way that a laser works. A laser is,
at its heart, just light. We have light all around us whether through the light bulbs overhead or
the computer screen that we're reading this article from. However, that light is diffused. It is
scattered, going in every direction. As a result it doesn't cut through the things that it strikes.
Similarly, unless the light is very bright and/or extremely focused, it isn't generally noticeable.
Lasers, however, take a relatively small amount of light and focus it into a narrow beam which
is very noticeable and at sufficient size can cut metal. Management by Objectives does the
same thing.
Organizations today are often diffused light sources with each member of the organization
focusing on different, often personal, objectives. So instead of being able to cut through the
market and capture more market share, or command higher prices, organizations are lucky to
make steady growth.
The MBO process starts with the organization defining its objectives. The process of strategic
planning, goal setting, or visioning generates from its process a set of objectives that the
organization should strive to achieve. From there it is up to the individual departments to form
their objectives, most if not all of which should align and support the organizational objectives.
Individual objectives are then established to support the departmental objectives.
Setting goals at the employee level that align with company goals is the key. Here's how you
can use the S.M.A.R.T. system for establishing those goals.

First steps
Once you've decided that you're going to give managing by objectives a try there are two
important steps that you'll have to take. First, you must explain to your employees what you're
doing and why you're doing it. The second step, setting the actual objectives, can be challenging
in its own right as you seek to find the right balance.

Communicating the message

MBO is designed to improve the management process and maximize the effectiveness of the
members of individual teams. You need to explain that the MBO process is focused on helping
team members understand the individual roles they play and how their jobs contribute to
company success. By focusing on the message that MBO is meant to help the employee assess
and prioritize efforts to make certain those efforts are focused on the bottom line and
organizational values. The process also helps your team understand what the organization
doesn't value and what it may not need to do any more.
The so called "Activity Trap" is one where we get so busy doing things that we forget to ask
whether what we're doing are the right things. This is an important concept for everyone in an
organization to understand. Helping to explain how the activity trap happens and how MBO is
designed to help avoid it will help your employees understand the goal of making the work that
they do more effective.
There's a natural resistance to change that occurs even when there is an understanding that the
intent is right and fair. In order to combat this natural resistance, consider making smaller (more
tactical) objectives and measure them on a shorter basis than you normally might (quarterly or
half a year instead of a typical one-year pattern.)
Setting S.M.A.R.T. objectives
The objective setting process is a difficult one for most individuals, particularly those who've
never been asked to set objectives. The process seems daunting. However, it doesn't need to
be. The process can be as simple as sitting down with the departmental objectives and asking
the question, "How can I best help to meet these objectives?" From that answer comes the core
for setting the individual's objectives. For example, if the departmental objective is to improve
the customer satisfaction score, the team can work on providing more self-service information
to reduce the number of calls and call wait-time or offer tools to improve customer service
levels by clarifying how to communicate with a customer.
The S.M.A.R.T. method is one way to help you remember how to walk through the process of
setting your first MBO objectives.

S for Specific: There are several key factors which should be present in the objectives that are
set in order for them to be effective. They should be specific. In other words, they should
describe specifically the result that is desired. Instead of "better customer service score," the
objective should be "improve the customer service score by 12 points using the customer
service survey."
M for Measurable: The second example is much more specific and also addresses the second
factormeasurable. In order to be able to use the objectives as a part of a review process it
should be very clear whether the person met the objective or not.
A for Achievable: The next important factor to setting objectives is that they be achievable.
For instance, an objective which states "100 percent customer satisfaction" isn't realistically
achievable. It's not possible to expect that everyone must be 100 percent satisfied with their
service. A goal of "12 percent improvement in customer satisfaction" is betterbut may still
not be achievable if it's assigned to the database developer. They aren't likely to have enough
influence over the customer interaction process to improve satisfaction by 12 percent.

R for Realistic: This leads into the next factorrealistic. Realistic objectives are objectives that
recognize factors which can not be controlled. Said another way, realistic goals are potentially
challenging but not so challenging that the chance of success is small. They can be
accomplished with the tools that the person has at their disposal.
T for Time-based: The final factor for a good objective is that it is time-based. In other words,
it's not simply, "improve customer service by 12 percent," it's "improve customer service by
12 percent within the next 12 months." This is the final anchor in making the objective real
and tangible. This final factor is often implied in MBO setting. The implied date is the date of
the next review, when the employee will be held accountable for the commitments that
they've made through their objectives.

Key learning
Setting organized objectives to help team members make a greater positive impact on the
organization may seem daunting but is simply a matter of taking a few forwards steps and
following a simple recipe for success.

Fayol's 14 Principles of Management

Fayol's principles are listed below:
1. Division of Work When employees are specialized, output can increase because they
become increasingly skilled and efficient.
2. Authority Managers must have the authority to give orders, but they must also keep in mind
that with authority comes responsibility.
3. Discipline Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command Employees should have only one direct supervisor.
5. Unity of Direction Teams with the same objective should be working under the direction of
one manager, using one plan. This will ensure that action is properly coordinated.
6. Subordination of Individual Interests to the General Interest The interests of one employee
should not be allowed to become more important than those of the group. This includes
managers.
7. Remuneration Employee satisfaction depends on fair remuneration for everyone. This
includes financial and non-financial compensation.
8. Centralization This principle refers to how close employees are to the decision-making
process. It is important to aim for an appropriate balance.
9. Scalar Chain Employees should be aware of where they stand in the organization's hierarchy,
or chain of command.
10. Order The workplace facilities must be clean, tidy and safe for employees. Everything should
have its place.
11. Equity Managers should be fair to staff at all times, both maintaining discipline as necessary
and acting with kindness where appropriate.
12. Stability of Tenure of Personnel Managers should strive to minimize employee turnover.
Personnel planning should be a priority.
13. Initiative Employees should be given the necessary level of freedom to create and carry out
plans.
14. Esprit de Corps Organizations should strive to promote team spirit and unity.