A History of Management Thought

Morgen Witzel

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317433347
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

Of all the sciences and social sciences, management is the one that most deliberately turns its back on the past. Yet management as we know it today did not spring into life fully formed. Management has more than just a present; it also has a past, and a future, and all three are inextricably linked. This book charts the evolution of management as an intellectual discipline, from ancient times to the present day.

Contemporary management challenges, including sustainability, technology and data, and legitimacy are analysed through an historical lens and with the benefit of new case studies. The author helps readers understand how the evolution of management ideas has interacted with changes in society.

By framing management's history as one of challenge and response, this new edition is the perfect accompaniment for students and scholars seeking meaningful study in the business school and beyond. Essential reading as a core textbook in management history, the book is also valuable supplementary reading across the humanities and social sciences.

1 Introduction

A sense of the past … is essential to anyone who is trying to understand the here-and-now of industrial organisation. What is happening now is part of a continuing development.

– Tom Burns

Five years, in the entire history of human civilisation, is not a particularly long time. It would be perverse to think that the history of management thought had changed dramatically in the five years since the first edition of this book appeared. There has of course been new scholarship on the subject, though not as much as one might have hoped for, and new insights, though not as many as there should have been. There have been no striking new revolutions in thinking about management, no paradigm shifts; and this is surprising, for it is precisely in times of economic and business chaos such as these that new management theories often thrive. The most famous and pervasive theory of management, scientific management, arose at a time when not just management but the entire free-market capitalist economic system was under threat (see Chapter 5). There is no equivalent to scientific management emerging today, nor are there any signs that such a thing will emerge in the near future.

And this is curious, because it is not as if we are doing management particularly well at the moment. A whole host of critics, many inside management itself and including some senior figures in the management education establishment – Henry Mintzberg, J.C. Spender, George Yip, Jerry Wind and the late Sumantra Ghoshal are names that spring to mind at once – have been and continue to be violently critical of management theory and practice. Ghoshal, in a famous article entitled ‘Bad Management Theories Are Destroying Good Management Practices’, quoted Friedrich von Hayek’s Nobel Prize acceptance speech, where Hayek criticised what he saw as ‘the pretense of knowledge’ prevalent in economics. Hayek blamed the ‘scientisation’ of economics, the ‘propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences’.¹

As in economics, said Ghoshal, so in management education. He lamented the decline of what he called the ‘scholarship of common sense’, the passionate adventurism of Freud and Darwin that led them to push the boundaries of imagination and view the world and the human mind in different ways, as opposed to the arid ‘epistemology of formalised falsification’ that characterises most of the social sciences today. And Ghoshal put his finger on the reason why: the institutionalised insecurity that characterises all business schools. ‘In our desire for respect from scholars in other fields, we have become even more intolerant of the scholarship of common sense than those whose respect we seek.’² Business schools are like small boys wanting to prove they can play with the grown-ups by striving to out-do them. It hasn’t worked; business schools have always been and always will be among the least respected university departments, and it is time they learned to accept this and go their own way.

And as with management education, so with management itself. The management thinkers of the 1890s, not just in scientific management but in other schools of thought too, dreamed of the day when management would become a recognised institution, a profession with status on par with accountancy, law and medicine. That never happened. In the 1940s, management scholars such as Edward Brech and Walter Puckey lamented the lack of a sense of professional identity in management.³ Despite the spread of mainly Western management ideas and practices throughout the world, despite the imposition of managerialism in fields such as government, health care, the church, sport and the military, and despite the profusion of jobs with the word ‘manager’ somewhere in their title, there has been no sign of a managerial identity emerging. James Burnham’s identification of a managerial ‘class’ is fallacious; management has no class consciousness.⁴

This lack of consciousness and identity is in part responsible for the lack of new thinking about management. It is no coincidence that the period in which management came closest to a state of class consciousness, from the 1880s to about 1930, is also the period in which the largest number of path-breaking management ideas emerged. That is not to say that there is no theorising about management today; there is a huge amount of it, as the array of journals and periodicals devoted to management is clear testimony. The problem, as Sumantra Ghoshal said, is that too little of the management theory that emerges from business schools is genuinely related to practice. Much of it, the endless literature reviews and meta-theory, is no doubt interesting for its own sake, but has little relationship to the reality of management. One might expect the gap to be filled by consultants and others engaged in the task of helping management to improve, but consultancies too have become curiously reluctant to engage with big ideas. Not everyone agreed with or approved of the ideas of Tom Peters or Kenichi Ohmae, but there is no doubting that they were trying to break the mould.

What has gone wrong? Why are management theorists and practitioners so reluctant to engage head-on with the major challenges that management faces today: challenges of sustainability, challenges of technology and data, challenges of legitimacy in a world where, increasingly, people see management as part of the problem rather than part of the solution? Part of the problem, in my view, is rootlessness. Of all the sciences and social sciences, management is the one that most deliberately turns its back on the past. Students at business schools are told to cite no article or book that is more than ten years old, as anything that happened before then is perceived as irrelevant. This is a huge mistake. Management as we know it today did not spring into life fully formed. It has evolved and changed, and it is evolving and changing, subtly, on the ground, even if most of those changes are largely missed by the ivory-tower theorists. Management has more than just a present; it also has a past, and a future, and all three are inextricably linked. How we manage today is largely conditioned by how management was done in the past.

In making this assertion, I recognise that not everyone will agree. The first edition of this book was criticised by some reviewers for apparent ‘presentism’ and ‘histori-cising management’. The first criticism I reject entirely, the second I embrace; historicising management is something that needs to be done more often. Other reviewers offered the view, common among critics of history, that the past is so utterly different that we cannot understand it. We cannot understand the mindsets of people in earlier eras, and therefore we cannot understand their ideas and actions except through a falsely modern interpretation, comparing their actions and thoughts to our own.

‘The past is a foreign country,’ wrote L.P. Hartley in his novel The Go-Between, ‘they do things differently there.’ That is both true, and not true at the same time. The past is different, and it would be foolish to think otherwise. But at the same time, the past has a long arm. It reaches out and influences in ways we often do not recognise. Our thinking and actions are conditioned by what has gone before, in management as in every other human endeavour.

Even among those who recognise the importance of the past, there persists a view that management thought begins in the incredibly rich period at the turn of the nineteenth and twentieth centuries, when so many theories and practices of management were first formulated. If we think of management thought as a coherent system of ideas about management, that is largely true; certainly it was at this time the first large-scale codification of management ideas and practices was undertaken and accepted widely.

If we accepted this as the beginning of management thought, then our study should commence with scientific management a century ago and move forward in time from there. But that would be to miss an essential point. Scientific management was not created in a vacuum. How and why did scientific management emerge? Where did the ideas come from? What influenced Taylor, the Gilbreths, Barth and others in their thinking? What influenced their contemporaries – Emerson, Fayol, Adamiecki, Urwick –and led them to think about management as they did?

To answer these question, we need to go back to the late nineteenth century and the first calls for improvement in management methods. And what led to those calls for improvement and change? To answer that question, we find ourselves back in the heart of the Industrial Revolution. Should we start with Charles Babbage, who defined the need for knowledge in management and called for a more scientific and rigorous approach to management? Should we look to the French positivists like Saint-Simon and Comte, who prompted the spirit of inquiry in the physical sciences which led directly to scientific management? Or do we go back further, to Robert Owen, who developed ideas on how to manage people effectively and humanely? Or Adam Smith, who re-defined the division of labour; or the French physiocrats who also wrote on the division of labour and developed the first ideas on entrepreneurship? Or back to ancient China, where at least one key physiocratic idea, the notion of laissez-faire, has its roots?

Before we know it, we are on a journey back in time, far earlier than the emergence of scientific management. Early twentieth-century writers on management, including some exponents of scientific management, knew this. ‘The art of administration is as old as the human race,’ wrote Edward D. Jones in 1912.⁵ Thomas North Whitehead thought that ‘structure arises as soon as people begin to do something together.’⁶ Harrington Emerson, Lyndall Urwick and James Mooney, among others, believed that the roots of management and administration could be traced back to the beginning of civilisation. Likewise, modern theories and systems of management thought have their roots in much older ‘thinking about management’. The two cannot be separated, not without risk of creating an artificial divide. The fact is that pretty much since the beginning of civilisation, people have been writing and thinking about problems in management and how to solve them. The duties and functions of a manager, the principles of organisation, markets and prices, the management of people, the importance of knowledge, strategic thinking, the management of money and finance, international trade, leadership: all of these problems and many more were pondered by people around the world and far back in time. Among them were Confucius, Plato, Ibn Khaldun, John of Salisbury, Thomas Aquinas, Machiavelli, Adam Smith, Samuel Taylor Coleridge, Florence Nightingale and Leo Tolstoy, to name but a few.

When we go back to these earlier writers and thinkers, however, we are looking at something very different from Taylor’s The Principles of Scientific Management or the many other books on management and aspects of management that began to appear from the 1890s onward. Most earlier authors did not set out to write works on management (and we should remember that the words ‘management’ and ‘manager’ were not coined until quite late, first appearing in English in the late sixteenth century, gradually replacing older words such as ‘administration’ and ‘stewardship’).

Some people, like the medieval scholar and lawyer Walter of Henley, did deliberately sit down to write handbooks or manuals which would help guide administrators and managers; but most offered their comments in a much broader context. Often their ideas on management have to be disembedded from a broad range of ideas on many subjects. An example is the Italian friar San Bernardino of Siena, whose sermons cover subjects such as economics, theology, ethics, social mores and codes of behaviour seemingly at random, as well as a highly original definition of the qualities of a manager. The often quite profound comments by Confucius and Thomas Aquinas on the role of business in society represent tiny portions of much larger bodies of work. As Liana Farber points out in her painstaking collection and analysis of medieval European writings on trade, scholars often have to read through many lengthy discussions of almost every topic under the sun before finding a few paragraphs which offer ideas on business and management.⁷ Nonetheless, those few paragraphs are often extremely significant. Through them we can trace back concepts such as the division of labour, or the metaphor of organisations as biological organisms, or theories about the relationship between price and value, or the need for reporting and control, or the role and function of the leader – to take just a few examples – for hundreds, sometimes thousands, of years.

Why a history of management thought?

The first and most commonly used justification for the study of the history of management thought is that it provides context. We cannot fully understand the present without knowing something about the past. ‘The objective is to place management thought in the context of its cultural environment and thereby to understand not only what management thought was and is, but also to explain why it developed as it did,’ declared the management historian Daniel Wren.⁸ He refers to ‘the past as prologue’, the foundation on which the present is built.

The past does provide context, most certainly, and it can be used to illustrate present themes and ideas; elsewhere, I have argued that the past can be used as mirror or a lens, to illuminate and examine the present more effectively.⁹ ‘A sense of the past … is essential to anyone who is trying to understand the here-and-now of industrial organisation,’ wrote Tom Burns in 1963. ‘What is happening now is part of a continuing development.’¹⁰

But the past also provides influences. Ideas about management do not – by and large – spring fully formed from the heads of their creators, like Athena from the head of Zeus. As Daniel Wren suggests, they evolve. Each new generation of theorists applies new ideas to the existing body of theory. Very often, these new ideas are conditioned, or at least influenced, by the world in which the thinkers live and work. Much has been written about the persistence of Confucian intellectual current in East Asia, China in particular. Chinese management thought remains under the influence of the ideas of Confucius and other early philosophers, notably Laozi (Lao Tzu) and Han Fei, to this day. Japanese business leaders continued to be influenced by Sunzi (Sun Tzu), early Buddhist writers and the Japanese swordfighter Miyamoto Musashi into the twentieth century. Nor are we in the West beyond the influence of the past. The philosopher Alfred North Whitehead – whose son became a notable management thinker in his own right in the 1930s – once remarked that all of subsequent European thought ‘consists of a series of footnotes to Plato’, so complete is the latter’s domination of our systems of thought and education.¹¹ Several of the people mentioned above – John of Salisbury, Aquinas, Machiavelli – were directly and heavily influenced by Plato. The Prussian strategy writer Karl von Clausewitz in turn was influenced by Machiavelli, and Clausewitz went on to influence generations of military and business strategists and managers. One of his followers, Field-Marshal Helmuth von Moltke, the victor of the Franco-Prussian War of 1871, was a strong influence on American management thinkers of the late nineteenth and early twentieth century, and Pierre du Pont’s multi-divisional form (M-form) organisation betrays the influence of military organisation. Thus there is an intellectual chain stretching between Plato and Alfred Chandler, the later twentieth-century expositor of the M-form. These chains of influence are complex and not always visible; that does not make them any less important.

Th...