A Decade of Progress in Management: 1920–1929

Introduction

The 1920s marked a pivotal period in the history of management. The era, often referred to as the "Roaring Twenties," was a time of significant technological, economic, and cultural transformation. Amid these changes, groundbreaking ideas and practices in management emerged, shaping how organizations operate even today. Understanding these moments offers valuable lessons for both scholars and practitioners of management science, bridging the past with modern challenges and opportunities.

Building on the themes introduced in the inaugural article of this magazine series, Dawn of Modern Management (You can read this article here), this piece delves deeper into the pivotal developments of the 1920s. While the former explored the transition into modern management in the 1910s, we now turn to how these foundational shifts evolved in the following decade.

• DuPont’s Decentralization and Multidivisional Structure (1921)

DuPont’s innovative approach to organizational design in 1921 set the stage for decentralized management. Faced with an increasingly diversified business, DuPont introduced a multidivisional structure, enabling its divisions to operate with autonomy while aligning with overall corporate objectives.

This model became a cornerstone for managing large, complex organizations, influencing later corporate giants like General Motors. Decentralization not only improved decision-making efficiency but also empowered local management teams to address specific market needs effectively.

• Harvard Business Review and Professionalization of Management (1922)

In 1922, the Harvard Business Review (HBR) was founded, marking a crucial step in recognizing management as a professional discipline. Dean Wallace B. Donham’s editorial emphasized the importance of developing socially minded business leaders to address the “central problem of business.” This vision underscored the need for theoretical frameworks and practical tools to enhance organizational efficiency and ethical responsibility.

This initiative also gave rise to the case teaching method at Harvard Business School, fostering analytical and decision-making skills among future managers. Today, HBR continues to be a leading source of management thought, a testament to its foundational role.

“The development, strengthening, and multiplication of socially minded business men is the central problem of business.”—Dean Wallace B. Donham

• Mary Parker Follett’s Participatory Management Philosophy (1924)

Mary Parker Follett, often regarded as the “mother of modern management,” introduced groundbreaking ideas on participatory management during the 1920s. Her concept of “power with” rather than “power over” advocated collaborative problem-solving and mutual respect between managers and workers.

Follett’s work laid the foundation for modern practices in employee engagement, conflict resolution, and organizational behavior. Her insights remain relevant for leaders striving to foster inclusive and innovative workplaces.

• The Hawthorne Studies on Productivity and Worker Behavior (1927)

The Hawthorne Studies, conducted at Western Electric’s Cicero plant in Illinois, represented a breakthrough in understanding employee motivation and productivity. Initially aimed at investigating the effects of physical conditions on worker output, the studies revealed that social factors and employee attention significantly influenced performance.

This discovery, known as the “Hawthorne Effect,” shifted the focus of management science toward human relations and the psychological needs of employees, emphasizing the importance of morale and workplace culture.

• Stock Market Crash and the Prelude to the Great Depression (1929)

While not a managerial innovation, the 1929 stock market crash dramatically reshaped the business landscape, challenging leaders to navigate unprecedented economic uncertainty. The ensuing Great Depression demanded innovative strategies for cost management, workforce retention, and maintaining public trust.

This era underscored the necessity of adaptability in management, highlighting the critical role of ethical leadership and strategic foresight during times of crisis.

Conclusion

The 1920s were a transformative decade for management science, introducing ideas and practices that remain central to contemporary business. From professionalizing management education to pioneering organizational structures and human relations, these milestones offer timeless insights. As emphasized in the Dawn of Modern Management article, understanding these historical moments helps us navigate today’s challenges with wisdom drawn from the past. Revisiting these foundations can inspire innovative solutions and strengthen our commitment to ethical and effective management.

I invite both scholars and practitioners to reflect on these milestones, share their perspectives, and engage with this ongoing exploration of management history. Let’s celebrate the legacy of management science while shaping its future together. Follow my monthly magazine for more articles that delve into the fascinating journey of management through the decades.

References

• Harvard Business Review archives, "The Management Century"
• Keulen, S., & Kroeze, R. (2014). "Introduction: The Era of Management - Historical Perspective on 20th-Century Management."
• TimeToast timeline on the history of management.