Money Management

“Management” (from old French, “ménagement”=”the art of conducting, directing”, from Latin “manum agere”=”lead by the hand”) characterises the process of leading and directing all or part of an organization, often a business one, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible). One can also think of management functionally: as the action in measuring a quantity on a regular basis and adjusting an initial plan and the actions taken to reach one’s intended goal. This applies even in situations where planning does not take place. Situational management may precede and subsume purposive management.

Historical Development

Some writers trace the development of management thought back to Sumerian traders and ancient Egyptian pyramid builders, but modern management as a discipline began as an off-shoot of economics in the 19th century. Classical economists like Adam Smith and John Stuart Mill provided a theoretical background to resource allocation, production, and pricing issues. About the same time, innovators like Eli Whitney, James Watt and Matthew Boulton developed technical production elements such as standardization, quality control procedures, cost accounting, interchangeability of parts, and work planning. By the middle of the 19th century, people like Robert Owen, H. Poor, and M Laughlin introduced the human element with theories of worker training, motivation, organizational structure and span of control.

By the late 19th century marginal economists like Alfred Marshall and Leon Walras introduced a new layer of complexity to the theoretical underpinnings of management. The first tertiary-level course in management was offered in 1881 by J. Wharton. By 1900 we find managers trying to place their theories on a thoroughly scientific basis. Examples include H. Towne’s Science of management, Frederick Winslow Taylor’s Scientific management, Frank Bunker Gilbreth’s Science of motion study, and Henry L. Gantt’s charts. J. Duncan wrote the first college management textbook in 1911.

The first comprehensive theories of management appeared around 1920. People like H. Fayol and A. Church described the various branches of management and their inter-relationships. In the 1920s and 1930s people like O. Tead, W. Scott and J. Mooney applied the principles of psychology to management. Also in the early 20th century people like Elton Mayo, M. Follett, C. Barnard, Max Weber, Rensis Likert and Chris Argyris applied the principles of sociology to management.

H. Dodge, R. Fisher, and T. Fry introduced statistical techniques into management. In the 1940s, Patrick Blackett combined these statistical theories with microeconomic theory and spawned the science of operations research was born. Operations research, sometimes known as “management science”, has attempted to make a science of some aspects of management.

Some of the more recent developments include the theory of constraints, reengineering, and various information technology-driven theories such as Agile. The theory of constraints approach to management boils the effort down to a repetitive cycle of three basic questions — What to change? To what to change to? How to make the change happen?

At the end of the 20th century, management was seen as consisting of the following six subcategories:

• Human resource management
• Operations or production management
• Strategic management
• Marketing management
• Financial management
• Information Technology management

In the 21st century, we find it increasingly difficult to think in terms of these six categories. More and more processes simultaneously involve several categories. Instead, we tend to think in terms of the various processes, tasks, and objects that one can manage

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