Systematic Management: Theory, Overview

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  • 0:00 What Is Systematic Management?
  • 2:10 Major Theorists
  • 3:55 Five Functions of Management
  • 4:55 Why Is It Important?
  • 5:45 Lesson Summary
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Lesson Transcript
Instructor: Rebekiah Hill

Rebekiah has taught college accounting and has a master's in both management and business.

In this lesson, you will learn what systematic management is and why it is important. You will also learn several theorists who were responsible for devising this approach to management.

What Is Systematic Management

Josie is a daycare worker. On any given workday, she has a small group of ten preschoolers to look after. Her coworker, Mary, has a second small group of ten preschoolers. Josie comes to work one Monday morning to quite the surprise. Poor Mary has suffered a fall over the weekend and has a broken leg. She will be out of work for several weeks. Josie is told by the daycare manager that the decision has been made to combine the groups. Instead of ten preschoolers, Josie will have 20. How will she manage ten more children, especially when the goal is to provide quality childcare for each one? She foresees a number of chaotic days until she can find a routine that works for her and the kids.


Josie's current situation is a lot like management systems of the past. In the beginning of the 19th century, growth in business was centered on the manufacturing sector. Managers were faced with explosive demand. The increase in demand led to an increase in the labor pool. In a time where the focus was on machines and not on people, managers simply did not know the value of human capital. This, along with the fact that communication between those in charge and the workers was all but broken down, led to an organizational environment with no structure and in a constant state of disarray. It was during this period of time that the systematic approach to management was born.

Systematic management is an approach to management that focuses on the management process rather than on the final outcome. The goals to this approach to management were:

  • To create specific processes and procedures to be used in job task completion
  • To ensure that organizational operations were economical
  • To ensure that staffing was adequate for the needs of the organization
  • To maintain suitable inventory so that the demands of consumers could be met
  • To establish organizational controls

This type of management approach was the first to directly link orderly operations, human resource management, and communication to organizational success.

Major Theorist

There are several key individuals who can be credited with the development of the systematic approach to management. Adam Smith was the earliest theorist to contribute to the idea of a need for a system in management. His book 'Wealth of Nations', published in 1776, brought about the initial belief that division of labor was the best way to increase productivity.

Adam Smith
Adam Smith

Following Smith were four more theorists who added to the systematic approach. Robert Owens, a theorist in the early 1800s, strongly believed that human resources were much more important than the focus on machinery that existed during this time. He felt that a proper management system could place the needs of the employees above all else.

Robert Owen
Robert Owen

Charles Babbage was the author of the book On the Economy of Machinery and Manufacturers. This book analyzed the state of manufacturing during the mid-1800s and gave suggestions to improve practices by the use of division of tasks.

Charles Babbage
Charles Babbage

Henry Towne was the president of the Yale and Towne Manufacturing Company. During the late 1800s, he proposed the idea that management needed to be a separate field of study and that principles needed to be established to guide managers in various managerial situations.

Henry Towne
Henry Towne

The last theorist to mention in the area of systematic management may very well be known as the father of the school of systematic management. His name is Henri Fayol, and he was a major player in the field of management theory. Fayol was a staunch supporter for managerial education. Having served many years in the field of management, he was well versed in what worked and didn't work, and felt that managers were not born. Instead, with training and education, they could be created.

Henri Fayol
Henri Fayol

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