Frederick Winslow Taylor - First Management Theories

Over the last few years, management has played a major role in developing today’s economy. It can be seen that a number of different management theories have developed over the past centuries. Furthermore, the evolution of theories has changed how economist, firms and workers contemplate and thus, there are major changes between the management theories in the 20th and 21st century. This essay will firstly focus on how the management theories have evolved. Then, the significant changes that will be discussed in this essay relating to the 20th and 21st century include compensation or rewards of employees, globalization and manager’s power and obligation.

In the early 1900, the well-known management guru, Frederick Winslow Taylor, developed the first theory that is scientific management. Based on Kiechel’s (2012) article, Taylor believed that through the application of science, a business could achieve efficiency and productivity. According to Houghton (2010), Max Weber develops the next theory that is influential in the world of economy, it is known as administrative management. Houghton (2010) emphasizes that Weber promoted the term ‘bureaucracy’ in the management system, where a clear structure of hierarchy is defined by authorities and therefore formal instructions and techniques must be followed within an organization. The next ground-breaking theory was developed by Henry Fayol, a researcher who published 14 principles that are believed to be crucial in managing an organization (Parker & Ritson, 2005, 1348). According to Parker and Ritson (2005), Fayol also acknowledged that financial reward is not the main issue of employee’s incentive to work, as morale reasons being a huge part as well. However, in the world of management today where it is illustrated by a diverse set of economic, community and knowledge, these theories are no longer suitable for the current business environment.

As was pointed out in the introduction to this essay, the following section will examine the first difference between management theories in 20th and 21st century, which is in compensation or reward of employees. Compared to the 20th century, recently, organizations are beginning to consider applying the salaries according to the employee’s achievement system. Cascio (1987, cited in Rodrigues, 2001, 883)