Management

• 1. Reins In Hand

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  In the fifteenth century, the French verb mesnager described a rider holding the reins of a horse in hand. The Italian maneggiare meant to handle tools or a horse. In Spanish, manejar could mean to rule horses. All three trace back to two Latin words: manus, meaning hand, and agere, meaning to act. From this stable-yard vocabulary grew one of the defining ideas of modern organizational life. By the 1590s, the English word management meant the act of managing by direction or manipulation. By 1739, it had come to describe a governing body, a sense first applied to theaters. How did a term for handling horses become the administration of businesses, governments, and charities? Who decided what a manager actually does? And how did a class of salaried managers come to hold prestige over the people they manage? The answers run through pin factories, slave plantations, business schools, and a Scottish moral philosopher writing in 1776.

• 2. The Pyramid

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  Larger organizations generally arrange their managers in three hierarchical levels, shaped like a pyramid. At the top sits senior management: the board of directors and a chief executive officer or president. They set strategic goals and policies and decide how the organization will operate. Beneath them, middle managers carry those goals downward. Branch managers, regional managers, department managers, and section managers translate strategy into direction for the people below. At the base are line managers, the supervisors, forepersons, and team leaders who oversee regular employees. Line managers perform the functions traditionally considered the core of management. Yet despite that, they are usually counted as part of the workforce rather than the management class. The board of directors is typically composed mostly of non-executive members who owe a fiduciary duty to shareholders. They stay out of day-to-day activities and can be held liable for breaches of that duty, which is why they carry directors and officers liability insurance. Fortune 500 directors are estimated to spend 4.4 hours per week on board duties, and their median compensation was $212,512 in 2010. Their power is concentrated and specific. The board hires, evaluates, and fires the top-level manager.

• 3. Defining The Indefinable

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  Henri Fayol, who lived from 1841 to 1925, said that to manage is to forecast and plan, to organize, to command, to coordinate, and to control. Those five functions remain a backbone of management thinking. Fredmund Malik, born in 1944, defines management more tersely as the transformation of resources into utility. Peter Drucker, who lived from 1909 to 2005, saw the basic task as twofold: marketing and innovation. Mary Parker Follett, who lived from 1868 to 1933, allegedly called management the art of getting things done through people, and described it as a philosophy. Ghislain Deslandes offers a darker reading, defining management as a vulnerable force under pressure to achieve results, endowed with the triple power of constraint, imitation, and imagination. Some scholars find these definitions useful but far too narrow. The phrase management is what managers do recurs widely, hinting at the difficulty of defining the work without circularity. One school treats management as equivalent to business administration, which would exclude charities and the public sector. The naming of schools captures the tension. The Harvard Business School keeps the word business, while the Yale School of Management chose the broader term.

• 4. Pins And Plantations

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  In 1776, Adam Smith, a Scottish moral philosopher, published The Wealth of Nations and described the efficient organization of work through division of labour. His example was a pin factory. A single worker might produce 200 pins per day, but Smith analyzed the manufacturing steps and showed that 10 specialists could make 48,000 pins per day. Classical economists such as Smith, who lived from 1723 to 1790, and John Stuart Mill, who lived from 1806 to 1873, supplied the theory of resource allocation, production, and pricing. Around the same time, innovators built the technical machinery of management. Eli Whitney, James Watt, and Matthew Boulton developed standardization, quality-control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these same practices already existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, in the contemporary usage, managed in profitable quasi-mass production. This was before wage slavery eclipsed chattel slavery. The pin factory and the plantation belong to the same uncomfortable lineage of organized labour.

• 5. Birth Of A Class

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  Salaried managers first became prominent as an identifiable group in the late 19th century, when large corporations began to overshadow small family businesses. As firms grew, so did the demand for clerks, bookkeepers, secretaries, and managers. That demand pushed college and university administrators to build the first schools of business on their campuses. The numbers tell the speed of the change. In 1915, fewer than 1 in 20 manufacturing firms had a dedicated personnel department. By 1929, more than one-third did. Colleges capitalized on corporate need by forming business schools and corporate-placement departments, a shift that created a corporate elite in the United States. The credentials followed. The Harvard Business School offered the first Master of Business Administration degree in 1921. A decade earlier, J. Duncan had written the first college management textbook in 1911. The professionalization spread beyond America. In 1912, Yoichi Ueno introduced Taylorism to Japan and became the first management consultant of the Japanese management style, and his son Ichiro Ueno pioneered Japanese quality assurance.

• 6. The Quest For Science

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  By about 1900, managers were trying to place their theories on what they regarded as a thoroughly scientific basis. Henry R. Towne wrote on the science of management in the 1890s. Frederick Winslow Taylor published The Principles of Scientific Management in 1911. Lillian Gilbreth wrote Psychology of Management in 1914, Frank and Lillian Gilbreth produced Applied motion study in 1917, and Henry L. Gantt developed his charts in the 1910s. The first comprehensive theories of management appeared around 1920. Alexander Church, who lived from 1866 to 1936, mapped the branches of management alongside Fayol. Others brought in new disciplines. Ordway Tead, Walter Scott, and J. Mooney applied psychology to management, while Elton Mayo, Chester Barnard, Max Weber, Rensis Likert, and Chris Argyris approached it sociologically. Max Weber, who lived from 1864 to 1920, saw what he called the administrator as a bureaucrat. Peter Drucker wrote one of the earliest books on applied management, Concept of the Corporation, published in 1946. It grew out of a study commissioned by Alfred Sloan, chairman of General Motors until 1956. Drucker went on to write 39 books. Statistical and mathematical thinking arrived next. In the 1940s, Patrick Blackett helped develop operations research, initially for military operations, a field sometimes called management science.

• 7. Fads And Counterforces

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  The theory of constraints arrived in 1984, joining a crowded shelf of named methods. Management by objectives was systematized in 1954, Six Sigma appeared in 1986, and the Viable system model came in 1972. Management by walking around emerged in the 1970s, re-engineering in the early 1990s, and agile software development took its name from 2001. Group-management ideas like Cog's Ladder, dated to 1972, and the notion of thriving on chaos, from 1987, added to the pile. As managers solidified into a recognized class through the 20th century, the role acquired prestige. That prestige opened the way for popularised systems of management ideas to peddle their wares, many owing more to pop psychology than to scientific theory. A counter-movement pushed back. Business-ethics viewpoints, critical management studies, and anti-corporate activism attacked many of management's assumptions. Out of that pressure grew workplace democracy, sometimes called workers' self-management, which in some places distributes every management function among workers. These self-managed models predate current political debate and may occur more naturally than a command hierarchy. A newer corrective is evidence-based management, which rests on three principles: peer-reviewed research, contextual judgment and experience, and the preferences and values of those affected.