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Management in early civilizations Management before industrialization

BabylonEgyptChinaRoman

Dark ages-Catholic Church-Feudalism-Revival of commerce

Renaissance-Protestant ethicMax Weber, Tawney, Mclelland-Liberty ethicHobbes, Locke-Market ethicQuesnay, Adam Smith

1. MANAGEMENT IN EARLY CIVILIZATIONS

1.1 Near East-Babylon

Group affiliation-family to nation, authority is always a questionConflict between chiefs and priestsKing Hammurabi

King Hammurabi issued- 282 laws-business dealings, personal behavior,

interpersonal relations Wage and fees

King Nebuchadnezzar Weavers of cloth(pembuat pakaian) were paid

with food according to output Based on “He who neither worketh fo himself or

others will not receive the reward from God”(Prophet Muhammad) and“If anyone will not work, let him not eat”(2 Thess, 3:10)

1.2 The far east-China

Military Sun Tzu

Importance of planning-“Do many calculations lead to victory, and few calculations to defeat”

War- needs forces(kuasa) and enemies; marketplace?

Marketplace- competitive strengths and competitors

Confucius Moral teachings and merit system Merit system to enter public services Merit as basis for promotions

1.3 Egypt

Based on the Nile river-engineering “Vizier”(where supervisor is derived)

10 workers to one supervisor Spiritual matters-pharaoh, others-vizier Forecast, planning, dividing work-

administer

1.4 Hebrews

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

1.5 Greece

Institutions, arts, language, drama and art-contributes to our own culture

Trade and commerce-carried by slaves and common citizens

“Managerial skills are transferable”

“Diversities in human, adapted to different occupations”

Socrates Plato

Aristotle Specialization of labour

“Work is better done not with the divided attention of the worker”

Departmentalization “Every office should have a special function”

Centralization,decentralization,delegation Synergy

“The whole is superior to the part” Leadership

He who has never learned to obey cannot be a good commander

Xenophon – advantages of specializing labor Greece-fell into Romans- by internal moral

decay, political disorder etc

1.6 Rome

Quasy factory system-to manufacture weapons, potteries and textiles

Built Roman road system-speed the distribution of goods

Business activities-carried by Asian and Greeks

Contributions-Roman law -model for later civilizations

In short,

Hammurabi – Code of Law Prophet Mohammed – Importance of work Sun Tzu – Planning and Strategy Confucius – Personnel selection by merit, early

bureaucracy, and division of labor




1.7 The dark ages

Decline of Roman empire cultural and economic deterioration

1.7.1The Catholic Church

Bishops-become heads of various local churches Conflict between centralized and decentralized

authority still exists today –characterized as the need for unanimity of purpose yet discretion for local problems and conditions.

1.7.2 Feudalism and the Middle Ages

Caused by the development of free people as tenant farmers, growth of large estates, political disorder, economic, social, and political chaos.

Abolition of slavery-free people as farmers 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.

Self-sufficient Military protection in exchange for a

portion of the products of their labour Problems associated with industrial

revolution began during this period Forests-razed with no reforestation Coal-used more-created air pollution

1.7.3 Revival of Commerce

Crusades-stimulating commerce by Opening new trade routes Exposing feudal Europe to the wealth of

Middle East Growing trade- new system for inventory

and cash flow More secular life in Europe

New markets New ideas Rise of towns

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.

Fra Luca Pacioli

Saint Thomas Aquinas - “Just Price” = market price; advocated by him 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.

Production of goods Guilds-specialization; master owns tools,

raw materials and finished product, each town is limited to certain crafts

Domestic system-negotiation of contracts with those who would do the work at home, no performance monitoring-uneven quality

Steam power and factory system emerged-end of feudalism

2. The cultural rebirth- Renaissance/ Management before Industrialization




2.1 Renaissance- an introduction Rediscovery of the classics Renewed interest in reason and science

Breaking the ancient hold of theology through Protestant Reformation->Protestant ethic

Emergence(kemunculan) of liberty ethic-new concepts in relations between people and the state through constitutional government

Emergence of market ethic-notion of a market-directed economy

Protestant ethic, liberty ethic and market ethic-> changing cultural values toward people, work and profits-> creation of a new environment that leads to formal study of management

2.2 Protestant ethic

Middle ages/dark ages- domination of Catholic Church People to think not of this world Business-evil Self interest of trade divert people’s

thoughts from God Protest of Roman Catholic Church

John Calvin’s concept of elect- Those predetermined to be saved gaveSpirits to his followers-people should believeThat they are all elect

Affirmed by Max Weber “The impulse to acquisition,

pursuit of gain(money) has nothing to do with capitalism; it is common to all conditions of men in all countries”

“Unlimited greed for gain is not identical with capitalism”

Instead of waiting for Judgment Day, a person should choose and pursue an occupation

People had a duty to work To use their wealth wisely To live self-denying lives

Unequal distribution of goods-because each person had unequal talents

Wealth- no assurance for heaven, the poor did not need to worry as long as they performed their calling properly

Outcomes of Calvinism: Wasting time-deadliest of sins Willingness to work is essential Division and specialization of labour-

higher skill and improvement Consumption beyond basic needs-wasteful

and sinful

Criticism of Weberian- Robert Tawney Capitalism is the cause of

Protestantism, not the effect Rise of capitalism as action

and reaction Conclusions

Bound Weber’s notion of the church and spirit of capitalism

Economic motivation- steam pushing on church authority

Support for Weber-Mclelland Psychological factors that are important

for economic development Need for achievement-”n achievement”

Findings of Mclelland High in achievement-essential in engaging

entrepreneurial activities Society high in achievement-rapid

economic development Certain ethnic, religious, and minority

groups show different marks in n achievement

Wealth- a way in keeping score, not goal

2.3 The liberty ethic

Political philosophers began to stimulate the thoughts of people with such new ideas as equality, justice, the right of citizens, a rule of reason, and notions of a republic governed by the consent of the governed.

Nicolo Machiavelli “3 ways to the top- fortune,

ability and villainy” Indicates the type of leadership

Founder of a state must give it laws All men are bad So rulers were justified in pursuing

any leadership style that suites their purpose

Choose between being feared or loved; better being feared

Thomas Hobbes(Leviathan, 1651) Strong central leadership Without civil government, some greater

power must exist to bring order from chaos(kekecohan)

John Locke(Concerning Civil Society, 1690) Principles of English

revolution(1688) People are governed by natural

law of reason, not tradition or authoritarian figures

Civil society is build on private property-no to harms another’s posession

Contributions A law based on reason A government get its

powers from the governed

Freedom to pursue individual goals-natural

Private property and its use in the pursuit of happiness-natural and legal

• Forming a solid political foundation for industrial growth

• Base for laissez faire economics

• Guaranteed rights of property

• Protection to contracts

• System of justice

2.4 The Market Ethic

New lands were discovered though exploration, new trade routes and new products emerged

Francois Quesnay Challenged Mercantilism Wealth did not lie in gold and silver,

sprang from agricultural production Advocated laissez-faire capitalism-

government should leave alone mechanism to market

Adam Smith (The Wealth of Nations) Mercantilism-destructive Berpendapat:

Only market and competition be the regulators of economic activity

Concept of specialization of labour-pillar of market specialization

Discovered benefits and disadvantages of specialization

Manager, in order to gain productivity, must rely on the division of labour

Impacts to Great Britain Market ethic as economic sanction for

private initiative rather than mercantilism Motivating force-competition, innovation

and self interest

3. Summary




Early management-antibusiness, antiachievement, antihuman

Controlled and affected by religion-can be good or bad

Industrialization- 3 forces-protestant, liberty and market ethic

4. Self-test

In 30 minutes, write a 1 page essay of: What is Sun Tzu’s principle in military? Sun Tzu says that war includes forces and

enemies. In the business world, who are the ‘forces’ and ‘enemies’? Provide your explanations with examples.