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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 Chapter Two Management before Industrialization 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 Egypt Joseph as Vizier from which the word supervisor is derived Span of Control “Rule of ten” Hebrews Origins of Charisma Moses and his ideas: organization, span of control, delegation, and the exception principle Other quotes suggest the Hebrews provided advice on planning, listening to advisers, and controlling Greece Socrates – transferability of managerial skills Aristotle – specialization of labor, departmentation, delegation, synergy, leadership and scientific method Xenophon – advantages of specializing labor Rome The span of control in their military as well as “Roman Law” became a model for later civilizations 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 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 Fra Luca Pacioli Luca Pacioli’s system of doubleentry accounting – the first management information system (cash & inventory position and a check on cash flow) developed in 15th century Summa de Arithmetica, geometrica, Early Ethical Considerations “Just Price” = market price; advocated by Saint Thomas Aquinas in 13th century Trade rules (Code of Ethical Conduct) proposed by Friar Johannes Nider in 1468: Goods should be “lawful, honorable, and useful Price should be just Seller should beware Speculation was a sin Could Niger’s code of ethics be used today? Why or why not? The Cultural Rebirth Traces social, political, and economic changes that preceded the Industrial Revolution in Great Britain Protestant Ethic Max Weber (1864-1920) advocated the belief that Protestants held different attitudes toward work This spirit of capitalism led to the Industrial Revolution: Individual responsibility and self-control Work as a means of salvation Do not waste time or money Do your best in your “calling” Do not consume beyond your basic need Greed vs Capitalism 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? 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 Support for Weber in his observations of the influence of religion on human attitudes toward work and self-reliance He found that children of Protestants had higher achievement than children of Catholics, and children of Jews had still higher achievement McClelland said the need for achievement is 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 Nicolo Machiavelli Differing ideas of the assumptions made about the nature of people guiding the choice of leadership style Machiavelli and Hobbes insist that humans are basically nasty so they must be governed closely Nicolo Machiavelli – The Princ “…all men are bad and ever ready to display their vicious nature…” (1513) Thomas Hobbes’s – Leviathan The Liberty Ethic John Locke’s Concerning Civil Government (1690) John Locke 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 The Market Ethic Adam Smith – Wealth of Nations (1776) Market forces were far more efficient in allocating resources and more “just” in rewarding individuals who produced the wealth than Mercantilism The Market Ethic Specialization of labor Increase performance Loss of mental exertion – “… dexterity at his own particular trade seems…to be acquired at the expense of his intellectual, social, and martial Smith’s Comments about those who “managed other people’s money” How does this apply to corporate governance and the separation of ownership and management? Summary 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 ... 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... work, risk-taking, and self-reliance The Liberty Ethic Nicolo Machiavelli Differing ideas of the assumptions made about the nature of people guiding the choice of leadership style Machiavelli... observations of the influence of religion on human attitudes toward work and self-reliance He found that children of Protestants had higher achievement than children of Catholics, and children of Jews