In this section:

1. In this section: Ever since one human tried to direct another ideas about management have been developing. This section discusses how management has changed over time by discussing: • The Industrial Revolution • New Challenges for Management

2. What You’ll Learn • How the Industrial Revolution created a new need for management. • How the captains of industry of the last century created huge empires. • The principles of scientific management. • The results of the Hawthorne studies on worker productivity. • Maslow’s hierarchy of needs.

3. Why It’s Important To understand why businesses operate the way they do, you will need to understand how management systems evolved.

4. Key Terms • monopoly • trust • scientific management • hierarchy of needs

5. Elements of the Industrial Revolution • The Industrial Revolution was caused by changes in technology, communication, and transportation and advances in manufacturing processes. • Powerful businesspeople who created enormous business empires were known as captains of industry. • These powerful businesspeople created monopolies—businesses that maintained total control of their industry.

6. The Break-Up of Trusts During the Industrial Revolution, legislators and the public became concerned with monopolies and the government decided to regulate business. • The Interstate Commerce Act • The Sherman Act

7. New Challenges for Management During the late 1800’s, thousands of employees performed specialized tasks, and new ideas were needed for managing the workers. • Frederick W. Taylor and Scientific Management • The Hawthorne Studies of Productivity • Abraham H. Maslow and the Hierarchy of Needs

8. Scientific Management • Jobs should be designed according to scientific rules. • Employees should be selected and trained according to scientific methods. • The principles of scientific management should be explained to workers. • Management and workers should be interdependent so that they cooperate.

9. Fig 2-1 • Maslow’s Hierarchy of Needs

10. Fact Idea and Review 1. How did the changes in the U.S. economy during the late nineteenth century increase the need for management? 2. What laws were passed in the nineteenth century to control the power of large companies? 3. How did Frederick W. Taylor change thinking about management? 4. What factors affect workers’ productivity?