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15
Dec

The Evolution of Business Management

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The Evolution of Business Management

It’s tough to pinpoint the exact beginnings of management. But there’s a case to be made for its origins in the Middle Ages. Back then there wasn’t exactly a trained class of professional managers. Still, rich people and royalty (who were usually one and the same) were always looking for competent people to run their affairs, leaving them more time for traditional pursuits, like hunting and eating giant pieces of meat with their hands.

 

Many royal households in the Middle Ages had a guy called a seneschal, who looked after day-to-day affairs. His job was to supervise the servants and kitchens and keep track of household expenses. Outside of the castle, there might be an overseer managing the money-generating enterprises, like the farms or quarries. The seneschal and overseer were certainly managers. But their jobs were less complicated than today’s managers in that peasants and workers had absolutely no rights.

 

You also would find management types — people skilled at bureaucracy and decision-making — in organizations like the Church and the military, or in early multinational corporations like the Dutch East India Company.

 

But management as a field of study arose during the Industrial Revolution. With new manufacturing technologies, organizations could grow like never before. And these enterprises needed people capable of supervising labor, bookkeeping, tracking materials, planning workflow and ensuring quality control — in other words, managers.

 

A big step forward in American business management occurred with the creation of the Wharton School in 1881. Joseph Wharton was a metals magnate who saw the need for a more systemized training in American business management. While it had certainly been possible to take business classes, Wharton was the first school devoted entirely to business in the United States.

 

In the early 20th century, managers focused on mass production. The idea was to look for the most efficient, consistent and predictable ways of making stuff in order to maximize profits. Henry Ford’s assembly line — which manufactured cars the same way, with the same parts, every time — was essentially a wildly successful management approach to mass production.

 

It was around this time that managers also became interested in managing people and not just production. Ford noticed that when you kept the same guy doing the same thing on the production line for too long, his output numbers declined — likely out of sheer boredom. By having workers rotate jobs, Ford found that his workers were more interested in the job, and thus able to crank out more Model Ts.

 

In mid-century, the discussion shifted to management style. Kurt Lewin’s famous studies researched the effectiveness of three different approaches: autocratic, democratic and laissez-faire. He found that the autocratic manager could be effective for a time but tended to result in dissatisfied workers. Laissez-faire managers created “meh” employees and “meh” results. The most successful were democratic types, who let employees voice their opinions and have insight into the decision-making process.

 

The first big management guru was an Austrian émigré, Peter Drucker. He was an academic who had dedicated his career to understanding how people organize themselves in corporations. He was deeply concerned about the ethical implications of management, urging business leaders to focus both on short-term gains and long-term planning. Drucker spawned a revolution in how people perceived business management. For him, it wasn’t merely a set of skills, but an art unto itself. For better or worse, he also paved the way for popular books on management, most of dubious quality.

 

The 21st century has already seen so many changes that it is impossible to predict the direction of business management. But we can point to two trends. The first is how people with knowledge-based skills — whom Drucker called knowledge workers — no longer feel much loyalty to their corporate bosses, and vice-versa. This will undoubtedly have a big effect on the future of management.  

 

The second trend is more optimistic — it’s the interest in empathy as a business management tool. This means that managers will be more focused on understanding their employees and customers in order to work towards everyone’s greater satisfaction.

 

This is good news. Although technology keeps evolving, our basic needs have stayed the same. In contrast to our medieval ancestors, these days we can hope for a work life of mutual respect and job satisfaction. Then as now, that’s not happening without good managers.

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