Lecture The evolution of management thought (6e) - Chapter 2: Management Before Industrialization

Early management thought was dominated by cultural values that were antibusiness. Three forces, or ethics, interacted to provide for a new age of industrialization: protestant ethic, liberty ethic, market ethic.

THE EVOLUTION

OF MANAGEMENT THOUGHT, 6TH

EDITION

Electronic Resource by:

Regina Greenwood and Julia Teahen

Management before Industrialization

Chapter Two

Early Organizations

 First, there has to be a goal

 Second, people must be attracted to the purpose in order to participate

 Third, organizational members need

resources

 Fourth, activities must be structured

 Fifth, results were better achieved

through the activity of management

Management in Early

Civilizations

 Hammurabi – Code of Law

 Sun Tzu – Planning and Strategy

 Confucius – Personnel selection by

merit, early bureaucracy, and division of labor

 Kautilya – Public administration, trait

approach for selecting leaders, use of staff for advising, and job descriptions

 Joseph – best known vizier - from which the word supervisor is derived

listening to advisers, and controlling

 Socrates – transferability of managerial skills

 Aristotle – specialization of labor,

departmentation, delegation, synergy,

leadership and scientific method

 Xenophon – advantages of specializing labor

The span of control

in their military as well as “Roman

Law” became a

model for later

civilizations

Rome

The Catholic Church

 Oldest living organization

 Conflict between centralized and

decentralized authority still exists today –characterized as the need for

unanimity of purpose yet discretion for local problems and conditions

The Catholic Church

 Papal authority may reside in a passage found in Matthew 16:18

 Jesus says to Peter;

“You are Peter, a stone;  and upon this rock I will  build my church.” 

 Since Peter was crucified and buried

in Rome, some believe that the church in Rome (St Peter’s Basilica)

fulfilled this prophecy.

Feudalism and the Middle

Ages

 Caused by the development of free

people as tenant farmers, growth of

large estates, political disorder,

economic, social, and political chaos

 Tied people to the land, fixed rigid class systems, established landed aristocracy, stopped education, caused poverty and ignorance, and stifled human progress until the Age of reformation

 Air and water pollution existed long

before the Industrial Revolution

Revival of Commerce

 Marco Polo travels to the Far East – sees the “Rule of Ten” in the Tatar tribes

 Craft Guilds – makers of goods;

regulated job access

 Merchant Guilds – buyer & sellers of

goods

 Domestic (Putting Out) System - Pay

based on performance where one did not get paid until work was returned to the merchant

Growing Trade

 Luca Pacioli’s system of double- entry accounting – the first

management information system (cash & inventory position and a

check on cash flow) developed in 15th century.

 Summa de Arithmetica, geometrica, proportioni, et proportionalita

Fra Luca Pacioli

Early Ethical Considerations

 “Just Price” = market price; advocated

by Saint Thomas Aquinas in 13th

 Price should be just.

 Seller should beware.

 Speculation was a sin.

Why or why not?

Could Niger’s code of ethics be used today?

Traces social, political, and economic changes that preceded the Industrial Revolution in Great Britain.

The Cultural Rebirth

Protestant Ethic

advocated the belief that Protestants held different attitudes toward work This spirit of capitalism led to the Industrial Revolution:

 Individual responsibility and self-control

your basic need

Read Weber’s distinction between the

“impulse to acquisition…the greed for gain” and capitalism as the “rational tempering” of this greed on p 26 of the text Do you agree or disagree with Weber?

Greed vs Capitalism

Criticism of Weber

 R.H Tawney’s opinions:

 Capitalism existed before the Protestant Ethic.

 Capitalism was the cause and justification

of the Protestant Ethic, not the effect.

 Economic motivation pressured to change Church dogma to sanction economic

efforts.

Modern Support for Weber

 David C McClelland

influence of religion on human attitudes

toward work and self-reliance.

higher achievement than children of

Catholics, and children of Jews had still

higher achievement.

not restricted to Protestants and there are wide variations among individuals which are influenced by the lessons they learn early in life about work, risk-taking, and self-reliance.

The Liberty Ethic

 Differing ideas of the assumptions made about the nature of people guiding the choice of leadership style

insist that humans are basically nasty so they must be governed

closely.

and ever ready to display their vicious nature…” (1513)

Leviathan

must exist to bring order from chaos

(1651)

Nicolo Machiavelli

The Liberty Ethic

 John Locke’s Concerning Civil Government (1690)

 People have natural rights to property, contracts, a redress

of grievances, and to freely choose those who are to govern

 Natural rights are to

be protected through civil law in order to preserve more

perfectly their life, liberty, and property

 His work set the stage for the Declaration of Independence

John Locke      

The Market Ethic

The Market Ethic

 Specialization of labor

be acquired at the expense of his

intellectual, social, and martial

virtues”

How does this apply to corporate governance and the separation

of ownership and management?

Smith’s Comments about those who

“managed other people’s money”

 Early management thought was

dominated by cultural values that were antibusiness

 Three forces, or ethics, interacted to

provide for a new age of industrialization

 Protestant Ethic

 Liberty Ethic

 Market Ethic