Management before Industrialization

     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.

     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

Joseph as Vizier from which the word supervisor is derived Span of Control “Rule of ten”

   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

   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

  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.

   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.

   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.

    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.

Fra Luca Pacioli   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

  “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?

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

 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

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?

 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.

 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.

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 Prince  “…all men are bad and ever ready to display their vicious nature…” (1513) Thomas Hobbes’s – Leviathan  Some great power must exist to bring order from chaos. (1651)

John Locke  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

 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 (government regulated the economy).

 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 virtues”

those who “managed other people’s money” How does this apply to corporate governance and the separation of ownership and management?

  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