A Timeline of the History of Business Management

Many individuals lump the terms “management” and “leadership” together, assuming that managers are leaders and leaders are managers. What many do not realize is that over time, management and leadership have come to represent different purposes within organizations. Management theorists and thinkers have largely shaped management as a function focused on utilizing resources for the accomplishment of specific goals. Within an organizational setting, the function of management consists of planning, organizing, leading, and controlling. The achievement of efficiency is a manager’s main concern.

The first modern school of thought concerning management was based on Frederick Taylor’s principles of scientific management and emerged in the late 1800s. The principles behind scientific management included emphasizing the system rather than the employee, and placing the role of managers above the role of non-managerial staff.

A new way of thinking emerged in 1932 after Elton Mayo started to question the principles behind scientific management. Through the Hawthorne experiments, Mayo concluded that human factors were more critical to motivating employees to greater levels of productivity. Physical environmental characteristics were less important, a conclusion that was the first hint of diversion from Taylor’s scientific management theory.

Organizational development, which came to consist of change theory, action research, and action learning, focused on applying behavioral science concepts at multiple levels. Those levels included groups, the intergroup level, and the entire organization. Kurt Lewin was the driving force behind the 1930s research on organizational development and group dynamics. Lewin’s research efforts found that learning within organizations has the best chance of occurring when there is conflict between experience and analysis.

After World War II, sociotechnical systems theory came about as a full diversion from the principles of Taylor’s scientific management. Sociotechnical systems theory seeks to integrate the technical and social features of job design. Environment subsystem, social subsystem, technical subsystem, and organizational design form the framework of sociotechnical systems theory.

In 1954, psychologist Abraham Maslow expanded on his hierarchy of needs in a book called Motivation and Personality, and this concept would greatly influence how managers viewed employee motivation. The theory groups categories of human needs into a pyramid, with the idea that employees must satisfy lower-level needs before they are motivated to fulfill higher-level needs. The pyramid’s base consists of physiological needs, followed by safety needs, love and belonging needs, esteem needs, and needs for self-actualization.

In the 1950s, researchers developed additional theories of human motivation. These included Peter Drucker’s The Practice of Management and Frederick Herzberg’s two-factor theory, which included hygiene and motivational factors. Drucker viewed management as consisting of five fundamental roles: planning and determining goals, group organization, motivating and communicating, performance measurement, and people development. Herzberg built upon Maslow’s hierarchy of needs by coming up with a list of hygiene factors that need to exist before managers could use motivational factors to drive employee performance.

Theory X and Theory Y, Action Learning, and the Management Grid came to the forefront in the 1960s. Theory X and Theory Y consist of principles that impact the formulation and practical application of employee policies and practices. Action Learning’s hallmark is the formula L = P + Q, where “L” represents learning, “P” represents programmed knowledge, and “Q” represents insightful questions. The formula illustrates the idea that learning happens with a combination of knowledge and the asking of insightful questions. The Management Grid places “concern for people” and “concern for tasks” on an X and Y axis to describe various management styles and ways of relating to employees.

Two management-oriented publications soon came along that changed the field of business management. The first, Human Competence: Engineering Worthy Performance by Thomas Gilbert, published in 1978, posited that performance standards should be developed based on specifying accomplishments. The second, In Search of Excellence by Thomas Peters and Robert Waterman Jr., published in 1982, gave rise to the modern management guru business.

It was not until 1990 that the concept of the learning organization emerged. The developer of the concept, Peter Senge, viewed an organization as an organism that could direct its future and improve its capabilities. Learning organizations have vision and purpose, use feedback mechanisms, and value teams. Five disciplines are present in learning organizations, including systems thinking, personal mastery, mental models, shared vision, and team learning.

The idea of ethics in management came to the forefront in 1995, and along with this change, the view of employees shifted from costs to assets. This idea is more closely aligned with the concept of leadership, which moves beyond quantifiable measures of performance into the often intangible factors of initiative and influence.

Developed in the early 2000s, business process management takes more of a systematic perspective. Record management, workflow, business process re-engineering, and process management are sub-concepts rooted in the development of business process management.

Meanwhile, in 2009, Daniel Pink published Drive, a book that formed the basis of drive theory. This theory builds upon older motivational theories but moves away from the notion that a system of rewards and punishments through extrinsic factors can motivate people. Rather, it is intrinsic factors such as autonomy, mastery, and purpose that are responsible for human initiative.

For additional information and resources on business management, please see the following links:

The Link Between Motivation and Employee Performance

What Factors Motivate Employees?

Creating Ethical Cultures

Maslow’s Theory on Human Motivation

Differences Between Leadership and Management

What Makes a Good Leader?

Common Leadership Styles

Classic Leadership Models

Factors Contributing to Solid Leadership

Management Career Stages

Servant Leadership in the Public Sector