Understanding the Business Environment

Running Head: UNDERSTANDING THE BUSINESS ENVIRONMENT
UNDERSTANDING THE
BUSINESS ENVIRONMENT
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]

UNDERSTANDING THE BUSINESS ENVIRONMENT
1
Introduction
Leadership and management are the two practices, which are responsible for the success of both
organizations as well as individuals. Leadership is a procedure, which help the individual to
influence other individuals in order to achieve the organization objective. It is also considered as
the direction, which leads the organization towards success by connecting strong desire with
willpower on the same platform (Lunenburg, 2011). Management is considered as the platform
on which all the available resources of the organization are brought together to give desirable
outputs. Both these concepts are the gift of the industrial revolution because it was the time
where people truly felt the power of both these concepts. Although both these concept were
present in the world before industrial revolution but were in the shaded form (Sharma and Jain,
2013). It was the industrial revolution, which brought life to both these concepts and formed it as
important part of the individual on the global level.
Evolution of management and leadership
Evolution of management came into existence right from the days when era of living in-group
started within the people. According to the old history, it has been found that the individual,
which were stronger, used to organize the people into groups on the base of their cleverness,
physical build and mental abilities. Indication related to principle management can be seen in the
ancient Greek in their public life, Institute of military forces and association of Roman Catholic
Church. Therefore, it is evident that management is present in the world from the beginning of
civilization in some type (Vittikh, 2015). Due to industrial revolution, management went to
tremendous change in their theories related to management, which has become the incredible
part of the business world. It started with the formation of formal theories of management and go
on modifying these theories. It is also recognized as the base or foundation of modern
management theories and practice. A lot has been improved in management related to their
pattern which has diluted the power of authority in the present time. In past management, focus
was mainly on resources related to the organization and the motivation level of the employee
was not so good (Christofakis, Tassopoulos, and Moukas, 2013). Now management has
continuously changed their focus on employees, which has created a work environment, which is
full of motivation.

UNDERSTANDING THE BUSINESS ENVIRONMENT
2
Evolution of management is mainly divided into four important phases like pre-scientific
management, classical theory, Neoclassical theory and then Modern theory.
Pre-scientific management period
In the middle of 18th century, industrial revolution had influenced the management pattern. A
complete change in the approach of manufacturing, instrument and equipment, and capital style
can be easily observed which is considered as the impact of this industrial revolution. It has
brought change in the working style of the employee (Prudskiy and Oshepkov, 2015). Earlier
employee had to wait for work but now workers went to job, which is considered as factory
system. Under this approach all, the resources were offered to the businessperson so that they
can bring best result out of it in the form of a specific objective. These alterations had brought
various change in the arena of management. Slowly management started transforming from
traditional style into scientific style with the help of new scientific approaches.
Classical theory
Start of scientific management occurred in late 19th century when various researchers started
focusing on the science part of the management like Taylor and Gantt. These people are also
considered as the founding father of scientific management (Witharana et al., 2012). In History,
this period was also known as the period in which entire traditional management was challenged
with the scientific approaches. In this era, management principle was refined and reformed.
Neoclassical Theory:
This theory is also the result of industrial experiment in which things associated
with management were improved, value-added and protracted. The focus of
classical theory was on job descriptions along with the organization of physical
resources (Bell et al., 2010). While neoclassical theory was focused on people and
their group relationships in the workplace. In addition to this, this theory also
explored the relation of psychology and sociology with the individual and their
behavior at the working place
The neo- classical theory pointed out the role of psychology and sociology in the
understanding of individual and group behaviour in an organization.