The Phase of Differentiation

The historical answer to the problems of the over-ripe pioneer enterprise came in the form of scientific management. This form of management is conventionally looked upon as “classical management.” In the terms of this book we may describe it, like the pioneering approach, as belonging to the “old paradigm.”

In the second half of the 19th century, as a result of rapid changes in the technical and economic spheres, firms and enterprises – particularly in America – were confronted for the first time with industrial production on a large scale. These new conditions, which became manifest in the appearance of large-scale enterprises, called for reorientation and reorganization of management. For the first time the organizational problem was systematically examined in the search for new and effective methods.

Two people laid the foundations for a new philosophy of management: Frederick Winslow Taylor in America, and Henri Fayol in France. Both were already engineers of some calibre when they were quite young, and they complemented each other. In the years following the First World War their two methods of organization, which had already proved themselves in practice, were combined to form what we now call “scientific management.” No doubt the term “scientific” was deemed necessary as a means of distinguishing the method from the “unscientific” personal style of organization during the pioneer era.

Taylor (1856–1915) came from a wealthy home. At the age of ...

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