Here is an excerpt from an article written by Walter Kiechel III for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
Artwork: Man Ray, Rayography “Champs délicieux” n°08, 1922, rayograph
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If you want to pinpoint a place and time that the first glints of the Management Century appeared on the horizon, you could do worse than Chicago, May 1886. There, to the recently formed American Society of Mechanical Engineers, Henry R. Towne, a cofounder of the Yale Lock Manufacturing Company, delivered an address titled “The Engineer as an Economist.”
Towne argued that there were good engineers and good businessmen, but seldom were they one and the same. He went on to assert that “the management of works has become a matter of such great and far-reaching importance as perhaps to justify its classification also as one of the modern arts.”
Towne’s speech heralded a new reality in at least three respects. Call the first consciousness raising: Management was to be viewed as a set of practices that could be studied and improved. It was to be rooted in economics, which to this crowd meant achieving maximum efficiency with the resources provided. And the members of the audience were engineers. In the decades to come, such masters of the material universe, from Frederick Winslow Taylor to Michael Porter, Tom Peters, and Michael Hammer, would have a disproportionate effect on management’s history.
Towne was catching a wave. During the century that followed, management as we know it would come into being and shape the world in which we work. Three eras punctuate the period from the 1880s until today. In the first, the years until World War II, aspirations to scientific exactitude gave wings to the ambitions of a new, self-proclaimed managerial elite. The second, from the late 1940s until about 1980, was managerialism’s era of good feelings, its apogee of self-confidence and widespread public support. The third and ongoing era has been marked by a kind of retreat—into specialization, servitude to market forces, and declining moral ambitions. But it has also been an era of global triumph, measured by agreement on certain key ideas, steadily improving productivity, the worldwide march of the MBA degree, and a general elevation of expectations about how workers should be treated.
Americans and a few other Anglophones dominated management’s early history, in the sense that their ideas on the subject gained the greatest currency. There were exceptions: In 1908 Henri Fayol, an engineer who had run one of France’s largest mining companies, enumerated a list of management principles, which included a hierarchical chain of command, a separation of functions, and an emphasis on planning and budgeting. Still, his 1916 magnum opus, Administration Industrielle et Générale, took decades to be translated and to have much effect beyond France. Although globalization promises more-diverse sources of thinking on management, most of our story so far takes place in the United States.
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To read the complete article, please click here.
Walter Kiechel III is a former editorial director of Harvard Business Publishing, a former managing editor of Fortune, and the author of The Lords of Strategy (Harvard Business Review Press, 2010).
To read my interview of him, please click here.
To read my review of The Lords of Strategy, please click here.