MANAGEMENT:

Management is the art of getting things done through others and with formally organized
groups.
OR
Management is the art and science of organizing and directing human efforts applied to control
the forces and utilize the material of nature for the benefit of man.
American society of mechanical engineers.

Functional concept-as a process, management is what a manager performs.

William Spriegel

Management is the process by which a cooperative group directs action towards a

common goal. Joseph Messie

Human Relations concept-Management is the art of directing and inspiring people.

J.D Mooney, and A.C Railey

Leadership and decision making concept-Management is the art and science of

decision-making and leadership.
Donald J Clough

Management means decision-making Ross Moore

Productivity concept-Management is the art of knowing what to do ------------ in the

cheapest way. F.W Taylor

Management is a technique of increasing productivity.

--Management means designing, organizing defining goals formulating policies and

strategies in accordance with the prevalent environmental conditions and these environmental
conditions are known as situations.

--Management is merging quality and variety with cost that is providing unlimited variety
of goods, better quality and at lowest price level to the customers.

--Management is defined as a process of identifying problems and threats and taking care
of these problems and threats in such manner that ultimately these turn out into opportunities
which could benefit the organization in accomplishment of its objectives.

1
In latest view:
Now a days in corporate sector taking advantage of the opportunities does not matter.
What matters is to convert or translate the opportunities then to face difficulties.

Definitions based on mixed views:

Good management achieves a social objective with the best use of human and material
energy and time and with satisfactions for the participants and the public.
Mary cursing Niles

Management is the direction of human behaviour towards a particular goal or objective.

Conclusion:
On the basis of all the above-mentioned definitions it can be asserted. Management is the
process which by planning, organizing, staffing, leading and controlling, a human group makes
possible the maximum and efficient use of physical resources and helps in realizing the pre-
determined objectives of any organization.

------In modern times when human needs are continuously rising, it is absolutely
impossible to fulfill them single-handed. In such a situation the need of group activity is felt.
Man cannot produce any single thing by himself alone and there is always the necessity of a
human group whose activities and be named collective effort. Thus on human group produce
one particular produce while another such group produce something different and hence, human
needs are fulfill by collective efforts of different human groups.
Now the question arises whether all the people’s comprising a particular human group
are competent enough to achieve success in their activities without any outside discussion and
control.
The obvious to this all-important question can only be in the negative. The reason for
such an answer is complex. So long particular human groups for into have their air aims,
definite planning, proper distribution of work, defining rights and duties, establishing proper co-
ordination among them, directing and controlling their activities, success cannot be achieved.
These are the problems, which give rise to another question, which is equally important, and the
question is how to overcome these problems? The answer to this really complex question in
inherent in management.
Through the medium of management all these above-mentioned problems can be solve.
The activities of a human group can be efficiently managed on the pre-determined problems can
be effectively achieved handling by a manager. It would not be out of place to mention here that
the absence of proper management, the activities of a human group are like a ship without a
captain. Thus it is evident that success of collective efforts requires some special power. AND
THAT POWER IS THE MANAGER, who ensures the success of different activities by the

2
process of management. It is important to classify here that the importance of management is
not limited to business alone but it is needed at all those places where human activities take
place-for example: educational Institutions, Religious Institution, Govt. departments, unions,
forces, families.

MEANING OF MANAGEMENT
“Anything minus Management is nothing”
--‘Sherlekar and Sherlekar’—

MANAGEMENT:
The word “management” can be styled as MANAGE-MEN-T. That means manage men
tactfully. Why manage men tactfully. This is with a view to get the things done being with
them. Thus management means managing men tactfully to get the things done being with them.
Thus management. In order to manage men tactfully, one has to understand the highly
unpredictable and uncertain human nature owing to this management is very complicated and
challenging activity.
Some times it is known as a group of administration officers working in a particular
institution and sometimes it means a process of planning, organizing, staffing, directing, co-
coordinating and controlling.
In the light of different opinions the meaning of management can be analyzed in the
following ways:

(i) Management as a process: some times it is defined as a process. A process has

means that different activities like planning, organizing, staffing, leading, controlling
through a definite process.
(ii) In other words, management is a definite process when coordinates different activities
for the attainment of an aim or target set by an institution or organization.
(iii) Management as a discipline: management is fast emerging as a discipline. Discipline
here means a separate and recognized subject, which has its own identity.
Management is also being recognized as separate syllabi because it has its own
thoughts, principles and methodology.
(iv) Management as a economic resource: economists have accepted management as a
resource of production like other resources (land, labour, capital, material and
machine). Production is not possible without these basic things.
(v) Management as a noun: when it is addressed as a noun, it is related to those persons
who get other people’s work completed. E.g. board of directors, managing, general
manages etc.

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Meaning of management at glance:
(i) As an activity: getting things done through others being with them.
(ii) As a process: a series of interrelated functions performed in all organizational.
(iii) As a discipline: a subject of study drawing upon knowledge of others disciplines. A
young and growing discipline.
(iv) As a group: a body of persons who perform the task of managing organization. An
elite group in the society.

Nature or Characteristics of management:

(i) Goal oriented. (xii) Management is a (xxi) Management

(ii) Universal. distinct entity. principles are
(iii) Integrated process (xiii) Management is a relative not
(iv) Social process profession absolute ---- it
(v) Activity based (xiv) Management means that
(vi) Group activity based on management
(vii) Art as well as authorities results are
science (xv) It is needed at all according to the
(viii) Multi disciplinary level situation.
(ix) Intangible (xvi) It is a social (xxii) Management is
(x) Optimum co- responsibilities creative and
ordination (xvii) Purposeful innovative
between human (xviii)It is an executive formulate
and material function creativity;
resources. (xix) It is a creativity is the
(xi) The combination coordinating process of
of multiple force developing new
functions (xx) Dynamic in ideas.
nature

OR

After a careful study of definitions we embark upon such features, which illustrate the
nature of management. Such features are as follows:

(i) It is a process: process means a systematic method of doing some work. Management
is recognized as a continuous process. It is that process in which work is done with
others or it is got done from them. In order to achieve the pre-determined objective a

4
 manager performs the work of planning, organizing, staffing, leading and controlling.
A manager did these works in a continuous order. So, it is a process.
(ii) Group efforts: management always efforts to group efforts and does not apply to an
individuals. A group rather than an individual can easily and effectively attain
management of an enterprise.
(iii) It is a social process: management is called a social activity because it is connected
with the people working in a human group and which requires organizing their efforts.
Any activity, which is connected with the people living in society, is called a social
activity. In this context management is also described as a social activity.
(iv) Attainment of pre-determined objectives: group efforts in management are always
directed towards the achievement of some pre-determined objectives; with out
objectives management would be difficult if not impossible.
(v) Management has a distinct entity: in view of the widening scope of business it is
not possible for an owner to perform all functions himself. We can say that specially
qualified experts are needed for managing the company.
(vi) Management is a universal activity: it is clear that management is not only
connected with business but also with non-business activities also, which is also
important. Management is everywhere.
(vii) Management as a profession: when we have recognized the distinct entity of
management, there should not be any doubt or hesitation to call it a profession. The
quality of a profession is that he must posses some special qualifications or ability for
which he is paid remuneration. The knowledge of management is also a qualification
and managers also get their remuneration for it. Hence, management is considered a
profession.
(viii) Management is an intangible force: management is a force, which is not visible. It
can only be feel or realized on the basis of the success of an organization.
(ix) It is a combination of multiple functions: the basic function of management is to
achieve the objectives of the organization successfully. That is why a manager has to
perform various function like planning, organizing, staffing, leading and controlling
etc. hence management does not mean one particular job but it happens to be a
combination of various jobs.

MANAGEMENT – Art, Science and Profession:

As a science: systematic body of knowledge, universal principles, scientific experiments, cause

and effect relationship, validity and predictability.

As an art: practical knowledge, personal skill, creativity and continuous practice.

5
As a profession: specialized body of knowledge, formal education service motive,
representative association and code of conduct management is not a full-fledged profession.

6
 MANAGEMENT AS AN ART:

Main features of art are:

(i) Art involves the application of knowledge and skills to achieve desired results.
(ii) Art is essentially creative and the success of an artist is measured by the results he
achieves.
(iii) Art is a personalized process as every artist has his own style or approach.
(iv) Art prescribes row to do things and it can be improved through continuous practice.

Management is essentially an art because:

Firstly, the process of management involves the use of knowledge and skills in solving various
problems.
It seeks to achieve concrete practical results that is output, profits, growth etc.

Secondly, Management is creative as the manager creates new things and improves upon the
old things.

Thirdly, Management is a personalized process every manager has his own approach and
techniques to solve problems, depending upon the environment in which he works.

Lastly, the manager gets perfection in the art of managing through continuous practice.
Thus management fully lives up to the description of an Art and therefore it is an art.

OR

Art implies the application of knowledge and skills to bring about the desired results.

Features:

1. Practical knowledge: every art signifies practical knowledge. An artist must not only
learn the theory but also its application in practice. Similarly a person cannot become
a successful manager simply by reading the theory if must also learn to apply his
knowledge in solving managerial problems in practical life. A manager is judged not
just by his technical knowledge but his efficiency in applying that knowledge.
2. Personal skill: every artist has his own style and approach to his job. This is
level of their personal skill. Similarly every manager has his individual approach and
style on solving managerial problems. The success of a manager depends on his
personality in addition to his technical knowledge.

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 3. Result oriented approach: art seeks to achieve concrete results. Every manager
applies certain knowledge and skills to achieve the desired results. He uses CM’s to
the growth of his organization.
4. Creativity: art is basically creative therefore every piece of art requires imagination
and intelligence to create. A manager effectively combines and coordinates the factors
of production to create goods and services.
5. Improvement through practice: every artist becomes more and more efficient
through constant practice. Similarly a manager gains experience through regular
practice and becomes more effective.

Conclusion:
One cannot become efficient and effective manager simply by learning. Management
principles by heart it also requires practical application of those results.

MANAGEMENT AS A SCIENCE:

Main features of science are:

(i) Science is a systematized body of knowledge.
(ii) It is based on cause and effect relationship.
(iii) The scientific study is based on observation and experiments.
(iv) The principles of science have universal validity and applicability.

Management is a science because:

According to the given information about science, management is also a systematized
body of knowledge. It consists of various concepts, principles and techniques developed
through observation and experience. These principles are universal in nature and establish on
cause and effect relationship. But the methods of observation followed by management are not
purity objective because the subjects are human beings whose behaviors cannot be predicted
with absolute accuracy.
Thus management cannot be regarded as an exact science like physics and chemistry. It
deals with the study of behavior of human beings, which is subject to constant changes and
difficult to predict.
Thus management cannot be regarded as exact science like physics, chemistry etc.
therefore management may be called an inexact science, as is the case with other social science
like psychology, sociology.
OR
Science means a systematic body of knowledge pertaining to a specific field of study. It
contains general principal and facts which explains a phenomenon.

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Features:
1. Systematic body of knowledge: management is a systematic body of knowledge
consisting of general principles and techniques. These help to explain events and serve as
guidelines for managers in different types of organization.
2. Universal application: scientific principles represent basic facts about and a particular
field of enquires. These principles may be applied in all situations and at all times.
Management contains some fundamentals principles, which can be universally applied.
These principles are flexible and need to be modified in different situations.
3. Scientific enquiry and experiment: scientific principles and derived through scientific
investigation and reasoning. So they can be explained logically, scientific principles are
critically tested. Management principles are also based on scientific enquiry and
investigation. These have been developed through practical and experimental experience
of a large number of managers.
4. Cause and effect relationship: principles of science lay down a cause and effect
relationship between related factors; similarly the principles of management establish
cause and effect relationship between different variables.
5. Test of validity and predictability: validity of scientific principles can be tested at any
time and any number of times. Every time the test will give the same result.
Principles of science can also be tested for their validity.

Conclusion:
Management is not a perfect science like other physical science such as astronomy,
physics, chemistry, and biology etc. management deals with people and it is very difficult to
predict their behavior accurately so management is a social science.

Management as a profession:

A profession is a caving that requires specialized knowledge and often long intensive
academic preparation:

Features:
1. Specialized body of knowledge: every profession has a well-defined body of knowledge
relevant to the area of specialization. In order to practice a profession a person requires
specialized knowledge of its principles and techniques. There exists a substantially and
rapidly expanding body of knowledge in management. Today, management is a separate
discipline having a specialized and organized body of knowledge.
2. Restricted entry: there exist institutions and universities to impart education and training
for a profession. No one can enter a profession without going through the prescribe
course of learning. Many institutions have been set up which offer courses for specialized

9
 training in management. Formal education and training has become very helpful in
getting jobs as managers.
3. Service motive: a profession is a source of livelihood but professional are primarily
motivated by the desire to serve the community. A profession enjoys community sanction
or respect. A manager of a factory is responsible not only to its owners, by the is also
expected to produce quality goods at reasonable costs and to contribute to the well being
of the community.
4. Representative association: in every profession there is a statutory association or
institution, which regulates that profession. Managers have formed certain associations
for the regular exchange of knowledge and experience.
5. Code of conduct: members of one profession have to abide by a code of conduct, which
contains rules and regulations providing the norms of honesty integrity and professional
ethics. The representative association to ensure self-discipline among its members
enforces the code of conduct. Any member violating the code can be punished and his
membership can be cancelled.

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 Conclusion:
Management fulfills several essentials of a profession but like other professions
management does not restrict entry into managerial jobs, to people with a special academic
degree.

Objectives of management at a glance

(i) Securing maximum results with minimum efforts.

(ii) Maximum prosperity for employer and employee.
(iii) Human better mere
(iv) Elimination of all types of waste
(v) Economic growth
(vi) Social justice

Importance of management at glance:

1. Achievement of group goals

2. Optimum utilization of resources
3. Minimization of cost
4. Survival and growth of business
5. Generation of employment
6. National development

OR

According to Drucker, management is a dynamic and life-giving element of every business. In

its absence the means of production remain merely the means and can never be the producers.
We know that not only in the field of business but in other fields also management has
come to occupy an important place. In this reference, it is said that “any thing minus
management is nothing.”
These are some topics, which clearly highlight the importance of management.

1. Achieving pre-determined objectives: each organization is established with

certain aims. Management is the only power and medium which can help in the
successful attainment of these aims. A manager with the help of his expertise and
cleverness makes and assessment of the future events and finally by his corrective action
makes the impossible took simple.
2. Maximum utilization of resources of production: management is that power
which by establishing an effective coordination between the various resources of
production makes an optimum use of these resources. Most efficient use of the limited

11
resources is the key to the successful business and thus this fact can be converted into
reality with the help of management.
3. Overcoming competition: these days business is not localized but it has
assumed national or even international dimensions. Competition is increasing day by day.
In these competition days only that organization can survive which can make available to
its customers the best quality of goods at the cheapest rates. Only an efficient and clever
manager can make it a reality and save the reputation of an organization.
4. Integration with changing environment: management is not only limited to
various internal function of an organization but it has to compromise with the outer
atmosphere also. So many goods having modern techniques are in the bazaar customers
accept only those products which are cheap and the best. With the help of efficient and
effective management a co-ordination between the new and prevalent work system and
methods can be established to save the reputation of an organization.
5. Research and investigation: a recent research has brought out the fact that
only those companies or business enterprises which are constantly taking interest in
research activities are developing very fast.
6. Increased profits.
7. To maintain a sound organizational structure.
8. Fulfilling the social responsibility: Sound management monitors the
environment of business and makes necessary changes in the business policies and
practices so as to keep the consumers and workers satisfied to this way manager’s help an
enterprise to fulfill its obligation towards different sections of society.
9. Management minimizes risks.
10. Reduces cost of production.
11. Economic growth: Management is the catalyst of economic growth,
development is a matter of human energies rather than of economic growth and
generation of human energies is the task of management. Management is the mover ad
development in the consequence.
12. Stability: management ensures the survival of an organisation in a fast
changing environment. It co-ordinates the activities of different departments in an
organisation and maintains team spirit amongst the personnel.
13. Human development: Management is not simply directions of things but the
development of men. It improves the personality and caliber of people to raise their
efficiency and productivity. A good manager serves as a friend and guide to his
subordinates.
14. Meets the challenge of change: Management is a catalytic force that enables
an organisation to face the challenge of change. The environment of business has become
very turbulent. Managers maintain a dynamic equilibrium between an enterprise and its
environment through innovation and creativity.

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 MANAGEMENT AND ADMINISTRATION

On the basis of different opinions of the experts over the world management and
administration, there are three prevalent concepts: -

(i) American concepts: Administration is a higher-level activity or system and

management is lower.

(ii) English concepts: management is the higher-level system and it has more power than
administration.

(iii) Modern concepts: According to it, management and administration are synonymous.
In the modern scientific age of management this is the most prevalent and accepted
concept of management and it makes no difference between management and
administration.

DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION:

Sr. Basis of Administration Management

No. difference

1. Meaning It means the determination of Management is to translate

objectives, plans and policies threats into opportunities.
of an enterprise.
2. Purpose Administration aims at Management aims at
determining the objectives. achieving pre-determined
objectives.
3. Nature Administration is a decision Management is an execution
making function. or doing function.
4. Decisions Administration decides what Management decides who will
is to be done and when it is to do the function and how he
be done. will do it, where he will do it.
5. Scope The term administration is The term management is more
applicable at the top level of applicable at middle level and
management. lower level of management.
6. Usage The term administration is Management is generally used
generally used from business with reference to business
organizations like govt., enterprises.
offices, colleges, universities
etc.

13
7. Features Administration decisions are Management decisions are
affecting influenced by govt. policies, mainly influenced by the
decisions social and political target of enterprise.
circumstances and economic
additions.
8. Relationship Administration is related Management is related with
mainly with the owner and the workers and employers of
top-level managers. organization.
9. Function It is a determinative or It is an executive or doing
thinking function. function.
10. Concerned It is concerned with It concerned with the
determination of major object implementation of policies.
and policies.
11. Level It is mainly top-level It is largely a middle and
function. lower level function.
12. Influence Its services are influenced Managerial decisions are
mainly by public opinion and influenced mainly by
other outside forces. objectives and policies of
organization.
13. Concerned It is not directly concerned It is a activity concerned with
with direction of human directions of human efforts in
efforts. the executions of plans.
14. Involvement Planning and controlling are Directing and organizing are
the main functions involved main functions involved in it.
in it.
15. Skills Conceptual and human skills Technical and human skills
used eagerly in govt. and used mainly in business
public sector. organization.
16. Minister, Commander, Managing director, general
Commissioner, Registrar, Vice manager, sales manager,
- Chancellor, Governor etc. branch manager etc.
LEVELS OF MANAGEMENT (MANAGERIAL HIERARCHY)

The management levels may be classified as follows:

(i) Top management
(ii) Middle management
(iii) Supervisory or operating management
(iv)
Top or executive management:

14
 Top management refers to the managing at the highest level in the management
hierarchy. It is the ultimate source of authority. It is held responsible for the general success or
failure of the organization.
Top management consists of the board of directors and the chief executive or managing
director they establish overall long-term goals and plans of the organization. It is their
responsibility to ensure success of the organization. It is basically an organ of overall review
and control. Chief executive is concerned with the overall management of the company’s
operations. He maintains coordination among different departments of the company. He also
keeps the organization in harmony with its external environment.

Features:
(i) To analyse and interpret changes in external environment of the company.
(ii) To establish long term corporate plans.
(iii) To formulate and approve the master budget and departmental budgets.
(iv) To design broad organization structure.
(v) To appoint departmental heads and key executives.
(vi) To coordinate and integrate the activities of different departments and divisions
of the company.
(vii) To provide overall direction and leadership to the company.
(viii) To exercise the overall review and control of the financial and operating results
of the company.
(ix) To represent the company to the outside world.
(x) To decide the distribution of profits.

Intermediate management:
Intermediate or upper middle management comprises departmental or divisional heads.
E.g. works manager, marketing manager, finance manager etc.
It is also known as departmental or functional management. Every divisional head is the
overall uncharged of one particular division or department. He is accountable for the
performance of his division or department to the chief executive. He performs the usual
managerial functions of planning, organizing, staffing, directing and controlling in relation to
one department. He coordinates and controls the activities of all personal working in different
branches of his department.

Middle management:
Middle management consists of all sectional heads.
E.g. plant manager, area sales manager, branch manager, office manager etc.
These executives serve as a link between intermediate or top management and the
operating management.

15
Function:
(i) To interpret and explain the plans and policies formulated by top management.
(ii) To control the operating performance.
(iii) To cooperate among themselves so as to integrate the various activities of department.
(iv) To train, motivate and develop supervisory personal.
(v) To lay down rules and regulations to be followed by supervisory personnel.

Supervisory or operating or first-line management:

This is the lowest level of management in an organization. It consists of supervisors,
foremen, sales officers, and purchase officers etc. supervisors and operating managers maintain
close contacts with rank and file workers and supervise day-to-day operations. They are
concerned with the mechanics of jobs.

Function:
1. To plan day-to-day production with is the goals laid down by higher authorities.
2. To assign jobs to workers and to make arrangements for their training and development.
3. To issue orders and instructions.
4. To supervise and control workers operations and to maintain personal connection with
them.
5. To arrange material and tools is maintain machinery.
6. To advice and assist workers by explaining work procdures, solving problems etc.
7. To maintain discipline and good human relations among workers.
8. To report feedback information and workers problems to the higher authorities.

CONCEPTS OF MANAGEMENT

(a) Process of management: it includes six m’s.

1. Men
2. Money
3. Machine
4. Material
5. Market

(b) As a profession: you need proper degree. There are certain legal rules.

SKILLS OF A MANAGER

16
 In order to have a proper achievement of good and in order to have plan to be properly
worked on a manager must have certain skills such as: -

(1) Conceptual skills: A manager must have conceptual knowledge of

management. Each principle and concept should be clear in the mind of
a manager and he should be effectively able to apply him.
(2) Technical skills: it is concerned with the application of skill or
knowledge acquired. Management does not simply mean the knowledge
of principles of management rather it is its application which makes its
effective.
(3) Human skills: A manager should have Psychological knowledge. He
should able to deal with different persons in different circumstances.
(4) Decision making skills: in crucial times a manager should be able to
have the ability of making decisions. These decisions must be effective
and practical in use as well.

MANAGEMENT AND SOCIAL RESPONSIBILTIES

FOR:
Manager should have social responsibility for the people. Because manager is a person
who is very skilled, if he will take interest in the social functions or problem, it will create a
good impression on other people living or working under him it will motivate the sub-ordinates
working under him. Thus, it creates a favorable impression on the society, which will ultimately
helps the business.
Managers have a creative and also communicative skill. As their main task is to have the
cordial relations with people inside the organization or outside the organization. The had to
interact with his subordinates, superiors and other members relating to business.
So, the managers are very creative and if they will take part in social problems, the
society is bound to improve in some kind or others. Managers take the input from the society
e.g. education values etc. if managers will take part in social event or they will become
responsible towards society, the society is sure to make progress become one man can change
the whole environment. It will thus create the source of motivation towards the society.
According to System theory, for the efficient working and smooth working small sub-systems
should work properly.

17
AGAINST:
The main function of the manager is to govern his organization smoothly and efficiently.
So, he should not make himself responsible towards the society. He should not be able to do his
work properly. The social problem should be left for those people. So generally take the
responsibility (political parties, interest groups etc) of improving are solving the problem of the
society. Manager takes the salary for gobering his organizing properly not for solving the social
problem of the society. Thus, manager should not move his mind towards social responsibilities
of the society.
OR

There are many thinkers who have supported this, but there are others who have expressed their
opinion both sides are given as under:-

Arguments against social responsibility:

1. Contrary to the objective of business: Just as the primary objective of players in

the play-ground is to achieve victory, in the same way the chief objective of
business is to enhance its profits by utilizing its, resources.
2. Inefficiency in the system: there is no power other than self-interest, which can
get work out of people. It owners of business, by ignoring self-interest, start
thinking of social responsibility the whole work-system will turn inefficient.
3. Effects of business values: Business should not have any social responsibility
otherwise social values will come to be dominated by business values, which in
itself is a painful delaminate. It means that when business is alive to its social
responsibility, the people in the beginning will be so thoroughly impressed by it,
that in future business will come to occupy a position of predominance the idea of
social responsibility of management opinion against.
4. Conflicting consideration: A business manager will be guided by two
considerations, namely, private market mechanism and social responsibilities
which are opposite to each other.
5. Arbitrary power: Business managers will get arbitrary power in the matter of
allocation of resources in the welfare of the society. They should have no right to
interfere with the external environment of business.
6. Disregard of marketing mechanism: the doctrine of social responsibilities
implies acceptance of socialist view that political mechanism rather than market
mechanism is the appropriate way to allocate scarce resources to alternative uses.

18
 7. Burden on customer: if the price in the market for a product does not truly reflect
the relative costs of producing mechanism of the market place will be distorted.
The consumers will have to pay higher costs.
8. Difficult implementation: the concept of social responsibility is ill conceived and
ill defined and is difficult to be implemented.

Argument for social responsibility:

1. Business is a part of society: Since business organizations are a part of society they
must have a positive attitude towards the needs of society. Business is only a sub-
system of society and this sub-system must contribute to the welfare of the main
system.
2. Avoidance of govt. regulation: If business does not care of its social responsibility,
the govt. has to interfere increasingly in the business system, which adversely affects
the progress of business.
3. Long term self-interest of business: the social responsibility of business, if taken
care of in the present ensures the success of the organization in the future.
4. Code of conduct: Members of a profession are bound to follow a code of conduct.
Code of conduct includes rules connected with profession, honesty and morality,
which form its base.
5. Business is a creation of the society and so it should respond to the demands of
the society: Since business uses the resources which belong to the society. It is
necessary that every business are obliged to use the social resources for the common
good of society.
6. The long-term self interests of the business are best served when business
assumes social responsibilities: There is a growing realization on the part of the
enlightened businessmen that it is in their self-interest to fulfill the demands and
aspirations of the society. People who have good environment, education, and
opportunity make better employees, customers and neighbours for business than those
who are poor, ignorant or oppressed.
7. It is the moral and right thing to do: It is widely agreed that businessmen today
have considerable social power. This power is virtually granted to them by the society,
which must have a general relationship with social responsibilities. The social
responsibilities of businessmen must be proportionate to their social power. If the
businessmen do not assume social responsibilities, their social power must be taken
away by the society through government controls and regulations and other measures.
8. Public image of business would be improved: The business will retain the needed
credibility with the public if it performs its social obligations. It will also avoid

19
 conflict with the society in its own interest. Good relation with the workers,
consumers and suppliers will lead to success of business.
9. The consumers are well informed: They expect higher quality products at
responsible rates. If they don’t get fair treatment form business, they will organize
themselves and compel the business its social responsibilities.

MANAGERIAL SKILLS:

1. Planning skills: the manager must passes the skills of thinking the skills of analyzing the
environment, it includes what is happening in the society organization and political
system. He must be able to assess or guess the changes in environment, traits offered by
the changes in environment. He must be able to match two sets of environment on the
basis of external and internal analysis.
2. Organizing skills: organizing skill is needed to specify who will achieve what and how
manager must be in a position of identification of specific activities and specific jobs. A
manager must be clear about grouping of various jobs, span of management, type of
relationship to be established between various people and various jobs.
3. Leading skill: leadership is the ability of individual to influence the people. Recognition
of human factor is also included in leading skill of human factor various leadership track
like communication and motivation are also included in the leadership skills.
4. Technical skills: technical skills refer to the ability and knowledge in using the
equipment, techniques and procedures involved in performing specific tasks. These skills
require specialized knowledge and proficiency in mechanics of a particular job. A
manager must know which skills should be employed in his particular enterprise and be
familiar enough with their potentiality to ask discerning question of his technical
advisors.
5. Human skills: human skills consist of the ability to work effectively with other people.
These are required to win co-operation of others and to build effective work teams.
Human skills are reflected in the way a manager perceives his superiors, subordinates and
peers. An awareness of the importance of human skills should be part of manager’s
orientation.
6. Conceptual skills: conceptual skills comprise the ability to see whole organization and
interrelationships between its parts. These skills refer to the ability to visualize the entire
picture or to consider a situation in its totality. Such skills help the manager to analyse the
forces working in a situation and to take a broad and foresighted view of the organization.
7. Diagnostic skills: it includes the ability to determine by analyzing and examination, the
nature and circumstances of a particular condition. It is not only the ability to specify why
something happened but also the ability to develop certain possible outcomes. It is the
ability to it through unimportant aspects and quickly gets though the heart of problem.

20
 8. Controlling skill: there are certain standards, which are fixed in a way such that
accomplishment of those standards leads to the accomplishment of goals. A manager
must keep check on the activities of subordinates and must rectify them if there are any
problems.
9. Decision making skills: there are two types of decisions to be taken by the manager.
(i) Routine and program decision
(ii) Non-routine and non-program decisions.

The course of action to be followed is as under:

1. The manager must be in a position to identify the problem.
2. Reaching to the main cause or the problem.
3. Searching for the alternative solution.
4. Comparing merits and demerits of each solution.
5. Selecting the best course of action.
6. Formulating the plan by the application of the alternatives.

Responsibilities of manager:

1. Responsibility towards suppliers: people who supply raw material, mechanical

components, financial institutions and advertising agencies. It is the duty or says
responsibility of the manager that the suppliers are being paid at the time.
2. Responsibility towards distributors: it is the responsibility of the manager to check
regular supply of the product. Product must be checked for the quality, packaging (as in
the case of children packaging plays a very important role). There must be free testing of
goods that is distribution of samples. There should be fair return on investment that is fair
commission must be paid. To motivate them the organisation must reward them, credit
facilities must be made available to the middle class people etc.
You can survive in the vest way if the industry will survive:
a. You can take the advantage by showing collectiveness.
b. Compiling with the norms lay down by the association.
c. Providing correct information to organisation.
d. Sharing latest knowledge.
e. Supporting the individual members of the association.
f. Indulging in fair and ethical competition.
g. Not using any political or other strategies.
3. Responsibility towards union: employees union is recognized as the enemy of the
organisation.
4. Responsibility towards govt.: Birth growth and death of any organisation will generate
according to statuary provisions and these will be governed by the government of the
organisation and this can be done by

21
 (i) Sending the correct information.
(ii) Taxes and duties must be paid regularly.
(iii) Organisation must try to operate as a model citizen.
(iv) Organisation must not try to damage the culture of that area and must
try to maintain the rich culture of that area.
5. Responsibility towards customers:
6. Responsibility towards society:
7. Responsibility towards competitors:
8. Responsibility towards workers:
9. Responsibility towards shareholders or owners:

Roles of a manager:

There are different types of managerial roles some of them are given below:

1. Figurehead: In this role manager performs symbolic duties required by the status of his
office. Making speeches, bestowing honors, welcoming official visitors, distributing gifts
to retiring employees are examples of such ceremonial and social duties.
2. Leader: This role defines the managers relationship with his own subordinates. The
manager sets an example, legitimizes the power of subordinates and brings their needs in
accord with those of his organisation.
3. Liaison: It describes the manager’s relationship with the outsiders. A manager maintains
mutually beneficial relations with other organisations, governments, industry groups etc.
4. Monitor: It implies seeking and receiving information about his organisation and
external events. An example is picking up a rumor about his organisation.
5. Disseminators: It involves transmitting the information’s and judgments to the members
of the organisations. The information relates to internal operations and external
environment. A manager calling a staff meeting after a business trip is an example of
such a role.
6. Spokesman: In this role, a manager speaks for his organisation. He hobbies and depends
his enterprise. A manager addressing the trade union is an example.
7. Entrepreneur: It involves initiating changes or acting as a change agent. For example a
manager decides to launch a feasibility study for setting up a new plant.
8. Disturbance handler: This refers to taking charge when the organisation faces a problem
or crises. For example a strike, feud between subordinates, boss of an important
customer. A manager handles conflicts, complaints and competitive actions.
9. Resource allocate: In this role a manager approves budgets and schedules sets priorities
and distribute resources.
10. Negotiator: As a negotiator a manager bargains with suppliers, dealers, trade union’s
agents etc.

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 Functions of management:

1. Planning:
It is a process of thinking before doing. It involves determinations of goals and the
activities required to be performed to achieve the goals. It consists:
What is to be done?
(i) How it is to be done?
(ii) Where it is to be done?
(iii) When it is to be done?
(iv) By whom it is to be done?
So planning is a process of shorting out the path for attaining the determined objective of
the business. Over all planning is deciding that in present, what is to do in future.

2. Organising:
Organizing refers to the way in which work of a group of people is arranged and
distributed among the group members to achieve the objectives of an organisation. As a
function of management organizing refers to the following:
(a) Bringing together human and non-human resources that
is the work to be done and its distribution in human resources.
(b) To define and establish authority responsibility relationship for the
achievement of goals.
(c) Determination of objectives.
(d) Division of activities into jobs
(e) Fitting individuals into jobs, and
(f) Developing relationships.

In conclusion we can say that organizing refers to distribution of work to the superiors
and sub-ordinates and fixing there authorities and responsibilities.

3. Staffing:
Staffing is the process of determining the manpower requirement that could meet the
company’s objectives. Staffing is a managerial function of attracting, acquiring, developing and
maintaining the human resources required to achieve the organisation objective efficiently.
Staffing also involves upgrading of quality/skills of the staff to get higher performance
from then. Personnel department of an organisation looks after the function of staffing. Staffing
usually includes the following activities:
(i) Human resource planning.
(ii) Announcing vacant positions, that is recruitment.
(iii) Receiving applications.

23
 (iv) Administering test.
(v) Interviewing.
(vi) Medical test.
(vii) Final selection and appointment letter.
(viii) Orientation and placement.

4. Directing or Leading:
Directing as a function of management is concerned with instructing, guiding and
inspiring people in the organisation to contribute to the best of their capabilities for the
achievement of organizational objectives. As a conclusion directing includes the following:
(a) Communication: it is the process of passing information and
understanding from one person to another. This process is necessary for making
the subordinates understand what the management expects of them. A manager has
always to tell the subordinates what to do, how to do it and when to do it. He has to
create an understanding in their minds in regard to these matters.
(b) Leadership: a good manager must also be an effective leader.
Leadership is concerned with influencing the behavior of followers. In order to get
the cooperation of employees, the manager must have leadership skills. The style
of leadership will vary from situation to situation.
(c) Motivation: effective motivation is necessary for getting voluntary
cooperation of the subordinates. Different types of rewards motivate different
people. Every manager should study the behaviour of individuals working under
him to provide him or her proper inducements. To some financial incentives are
important, while others are motivated by non-pecuniary incentives like job
security, job enlargement, freedom to do work and recognition.
(d) Issuing orders and instruction by the superior.
(e) Leading the subordinates to influence their activities towards
achievement of goals.
(f) To ensure that the subordinates are working as per plans and policies.

5. Controlling:
Controlling is a process of verifying whether actual performance is in accordance to the
planned performance and to take corrective action wherever required.
It involves comparison of actual performance with the planned performance as to quality,
quantity, time taken etc. and than analyse the deviations and to take corrective measures to
correct the deviations. It involves the following steps:
1. Establishment of standards.
2. Measurement of actual performance.
3. Comparison of actual performance with the planed performance.
4. Find out deviations.

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 5. Taking corrective action.

MANAGERIAL ETHICS:

The term ‘ethics’ refers to value-oriented decisions and behaviour. The word ethics
comes from the Greek root, ethros, meaning character, giving beliefs, standards, or deals that
pervade a group, a community, a people--------. Today ethics is the study of moral behaviour—
the study of how the standards of moral conduct among the individuals are established and
expressed behaviourally. Terms such as business ethics, corporate ethics, medical ethics, or
legal ethics are used to indicate the particular area of application. But to have meaning, the
ethics involved in each area must still refer to the value-oriented decisions and behaviour of
individuals. Ethics refer to a set of moral principles, which should pay a very significant role in
guiding the conduct of managers and employees in the operation of any enterprise. Ethics is
concerned with what is right and what is wrong is human behaviour. It is normative and
prescriptive, not neutral. It addresses the question of what ought to be. Ethics refer both to the
body of moral principles governing a particular society or group and to the personal normal
precepts of an individual.
Some people subscribe to a utilitarian reference in determining what is wrong and what is
right. They hold that a proposed course of action should be judged from the standpoint of
greatest good for the greatest number of people. From this point of view, there are few absolute
standards and each issue must be judged by studying its impact upon all affected parties.

25
 ETHICS AND SOCIAL RESPONSIBILITIES:

The term ‘social responsibility’ conveys the moral conduct that relates to such broad
issues as environmental pollution, discrimination, poverty, unemployment and inflation.
Accordingly, an organization whose practices contribute to inflation, unemployment, increased
poverty and like would be viewed as socially irresponsible---as not fulfilling its responsibility to
society. An automobile manufacturer who produces cars with faulty brakes, a pharmaceutical
house that makes false claims about its comd remedies, or a food company house TV ads
promote substandard food items are socially irresponsible.
Some people feel that social responsibility is linked to organisation and ethics to
individuals, but this is not a useful distinction. In the final analyses, decisions are made by
people and therefore, individual managers at some level must assume responsibility for every
corporate decision. The executive who lies about a competitor’s product, the manufacturer who
markets a highly inflammable article of clothing, the industrialist who dumps pollutants into a
stream-all behaves in an ethically irresponsible way. The most responsible way to distinguish
business ethics from social responsibility is in terms of a decision’s implications for society as a
whole. Within this frame of reference, business ethics are concerned with microethics (relating
to daily operating decisions with limited social impact), social responsibility is concerned with
macroethics relating to decision with broad implications for a large segment of society.
However this distinction is not even followed in practice. The term ‘ethics’ is used to
convey both ‘microethics’ and ‘macroethics’.

DIFFICULTIES IN ESTABLISHING MANAGERIAL ETHICS:

The problem of laying down managerial ethics is more complicated than it is in

established professions such as medicine and law. The physician and lawyer understand clearly
that their responsibility is to the patient or the client. The manager is torn between the interests
of owners, employees and customers so that the “client group” is often impossible to identify
and isolate. Whereas the physician’s actions are “ethical” if the patient’s interests are served,
the manager enjoys no such security.
Established medical and legal associations have the legitimate authority to enforce
standards of behaviour. There is no comparable management organisation that possessed the
right to enforce ethical standards. Therefore, we have great difficulty in resolving the problems
caused by questionable acts such as paying bribes or similar actions unless a law is violated. In
management, the legal system also becomes the ethical system and where higher standards of
behaviour than those required by law are desired, there is no way to enforce them.
There are four ways to establish acceptable standards of behaviour. The first is the
establishment of minimum standards of behaviour by law. But if law dictates ethical behaviour,

26
the true meaning of personal morality, individual responsibility and free choice is lost.
Secondly, an attempt should be made to develop accepted code of ethics to guide managerial
action. In India and other countries, management associations have attempted this approach.
But how to enforce the standards and make allowances for organizational and environmental
differences is the main problem.
The third approach is to follow the lead of medicine, law, engineering and accounting and
establish a professional society to enforce codes of behaviour for the managers. This option
would, however, require a new type of management organisation with mandatory membership,
professional certification, and so on. Nothing approaching this presently exists. Any move n this
direction would be, at best, long-range in character. One final option is the development of
individual organizational code of behaviour. This idea has a great deal of support and short-
term promise. But the individual organizational codes do not provide for uniform standards
required of business.

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 EVOLUTION OF MANAGEMENT THOUGHT:

1. Classical (Traditional) approach:

(a) Bureaucracy (Weber’s)
(b) Scientific management (Taylor’s)
(c) Management process school (Fayol) (Administrative theory)
2. Human relations approach (Neo-classifical approach) (Elton mayo) (It helps in
loving and caring the employees, it held the stress on social aspects only):
3. Behavioural science approach (Neo-classifical approach):
4. Systems approach (Modern approach) (There should harmony among the sub-systems
and among different departments of organisation):
5. Contingency approach (Modern approach) (different theories needed for different
situations):
6. Quantitative approach (Modern approach):

Classical theory:

The classical organisation theory is also called the traditional theory. In this theory, we
shall discuss the ideas of several contributors such as Taylor, Fayol, Luther Gulick, and Max
Weber. All these thinkers were dissatisfied, in one way or the other, with the organizational
practices of their time.
The classical organisation theorists dealt almost exclusively with the anatomy of formal
organisation. Organisation is treated like a machine and so making each individual, working in
the organisation efficient, can increase efficiency. For instance, F.W. Taylor emphasized on
division of labour, fixing everybody’s work for the day and functional formanship. That is why;
Taylor’s scientific management has been referred to as ‘machine theory’. It may be noted that
scientific management group emphasized efficiency of lower levels of organisation. It was
Henri Fayol who showed concern for efficiency at the higher levels for the first time.

Features:

28
 The classical theory is more or less mechanical in nature as is revealed by its following
features:
a. Classical organisation theory is built around an accounting model.
b. The relationship between workers and management is established through
formal communications, defined tasks and accountability and formalized procedures and
practices to minimize conflict between them.
c. The worker is essentially an ‘economic man’ who can be motivated basically
by economic rewards. Money is considered the main motivator under this theory.
d. This approach to the organisation is the embodiment of the extra pair of
hands concept.
e. In designing the hob and in picking the extra pair of hands, classical theory
assumes man to be relatively homogenous and relatively unmodifiable.
f. Stability of the employees-stability in the sense of minimizing changes
within the employees-is a goal in the organisation.
g. Classical theory is in its essential character centralized, and the integration
of the system is achieved though the authority and control of the central mechanism.

Criticism of classical theory:

The classical theory is criticized on the following grounds:
(a) Closed system: Classical theorists have viewed organisation as a closed system,
that is, having no interaction with the environment. This assumption is totally unrealistic.
A modern organisation is an open dynamic system, which has interaction with the
environment.
(b) Unrealistic assumption about human behaviour: The classical writers lacked
sensibility to the Behavioural dimensions of an organisation and made over-simplified
and mechanistic assumptions for the smooth running of organisation ignoring all
complexities of human who perform tasks assigned to them and ignored their social,
psychological and motivational aspects of human behaviour. Human behaviour is most
unpredictable and complex. This assumption of classical writhers led the workers to
frustration, conflict and failure and thus made ‘man’ subordinate to the organisation.
(c) Inadequate emphasis on human beings: the interplay of individual personality,
informal groups and inter-organisational conflicts in the formal structure appears to be
neglected by the classical writers. Bennis feels that the focus of classical theory is on
‘organisation without people’.
(d) Economic rewards as main motivators: the assumption that people at work can
be motivated solely through economic rewards is also wrong. Several researches in
human behaviour have contradicted this assumption. Non-monetary factors like better
status and job enrichment can also motivate the workers.
(e) Hierarchical structure: the classical theory is based upon the hierarchical
structure that establishes the authority relationship between individuals in an

29
 organisation. It attempted to prescribe the ‘right’ organisational structure. This was a very
narrow approach as it concentrated only on line and staff structures. The classical writers
did not explore why certain forms of organisational structure are more effective than
others.
(f) Over emphasis on universality: classical theorists have claimed that these
principles have universal application. This suggests that the same principles can be
applied in: (i) different organisations, (ii) different management levels in the same
organisation, and (iii) different functions of the same organisation. The empirical
researches, however, suggest that none of the principles has such characteristics.
Moreover, there are many of the principles, which are actually contradictory with other
principles. For example, principle of specialization is quite in conflict with the principles
of unity of command. Peter Drucker, Ernest Dale, etc. have also criticized universality
concept.
(g) Bureaucratic behaviour: Weber’s ‘ideal’ bureaucracy, a major constituent of
classical theory, suggested strict adherence to rules and regulations. The scope for
individual initiative and their contribution to the organisation goal is thus limited. The
result is red-tapism and observation of rules and regulations becomes the main objective
while the real objectives for which these rules and regulations are formed are forgotten.

Bureaucracy:

According to the name bureaucracy theory was evolved by the German sociologist Max
Weber (1864-1920). The theory of bureaucracy is based upon hierarchy of authority and web of
rules and relations. It visualizes a machine model of organisation characterized by impersonal
control over human beings.

Characteristics:
(a) A well-defined hierarchy of authority with clear lines of authority and control and
responsibility concentrated at the top of the hierarchy.
(b) A high degree of specialization.
(c) A division of work based on functional departmentation.
(d) A system of rules covering the rights and duties of employees.
(e) A definite system of procedures for dealing with the work situation and
“rationally” coordinating activities.
(f) A centralized system of written documents (“the files”) for collecting and
summarizing the activities of the organisation.
(g) Impersonality of relationships between employees.
(h) Recruitment of managers on the basis of ability and technical knowledge.

30
 The bureaucracy, or “bureaucratic model,” was one of the first theories of organisation. It
was a theory; Weber hoped that would be used to understand how and why organisations were
structured as they were, and the standard against which other organisations would be compared.
But like most “ideal” forms of anything it was an extreme, an exaggeration. Having some
specialization, adequate procedures and rules, and some centralization was and is clearly better
than having no organisation at all. But Weber’s bureaucratic model quickly became
synonymous with a rigid, unbending, inflexible structure manned by “robots”.

Criticism of bureaucracy:
Today when we hear the word “bureaucracy”, it immediately brings to mind visions of a
ponderous, slowly moving organisation-one steeped in red tape, meaningless hurdles, and
inefficiency. Various grounds of criticism of bureaucracy are as under:

1. The specialization of labour often inhibits effective communication among

technical specialists and between higher and lower levels of the organisation.
2. The procedures and rules sometimes encourage organisational members to act
mechanically rather than exercising initiative and using their inherent creativity. They
often breed resistance to change.
3. Promotions in real life can result from “whom one knows” and “how one plays the
organisation game” rather from technical ability. Competent people may be denied
promotion.
4. Bureaucracy involves excessive paperwork, as every decision must be put in
writing. All documents have to be maintained in their draft and original forms. This leads
to great wastage of time, stationery and space.
5. Personnel in a bureaucracy tend to use their positions and resources to perpetuate
self-interests or the interests of their sub-units. Every superior ties to increase the number
of his subordinates as if this number is considered a symbol of power and prestige. It is
hard to destroy bureaucracy even if it has outlived its utility.
6. Bureaucratic procedures involve inordinate delays and frustration in the
performance of tasks. The procedures are nevertheless valued, perpetuated and multiplied
for their own sake as also to pass the buck.

Despite its drawbacks, bureaucracy has become an integral feature of modern

organisations. It cannot be wished away. It is, therefore necessary to overcome its negative
aspects through proper application of rules and regulations, and reconciling the individual needs
and organisational goals.

F.W. Taylor’s scientific management (1856-1916):

31
 F.W. Taylor scientific management means managing the affairs of an organisation
scientifically in contrast to the rule of thumb approach.
According to him, scientific management is the art of knowing exactly what you want
men to do and then that they do it in the best and cheapest way.
He is regarded as the father of scientific management, the main objective of scientific
management was to eliminate wastage and increase the all round efficiency in the working of
the organisation.
He was the first person who insisted on the introduction of scientific methods in
management. He launched a new movement in 1955, which is known as ‘scientific
management’. That is why; Taylor is regarded as the father of scientific management.
He was born in 1856 in Philadelphia, U.S.A. he started his career as an apprentice in a
small machine making shop in 1870 and rose to the position of chief engineer of Midvale Steel
works in 1884 at the age of 28. Taylor conducted a series of experiments over a period of more
than two decades. He experimented with machine tools, speed metals and the like. One of his
experiments led to the discovery of high-speed steel, which made him very popular. Other
experiments related to the way men handled materials, machines and tools which led him to the
development of a coordinated system of shop management. In short, he experimented in
different fields to eliminate wastage of all types, increase the efficiency of workers and provide
for functional management.
Taylor was a man of strong will and convictions, he wanted to apply scientific reasoning
to management. After leaving Midvale Steel Works, he joined Bethlehem Steel Company where
he introduced scientific management. He was highly opposed by the management and the
workers and his services were terminated unceremoniously in 1901. Taylor presented his first
paper entitled “Shop management” was published in 1903; it focused attention on his
philosophy on management. His famous book “principles and methods of scientific
management” was published in 1911 and his other contribution was “testimony before the
special house committee” which was given in 1912. it may be pointed out that the last two
works were combined in one book entitled ‘scientific management’ in 1947 by Harper and
Brothers.

Taylor’s principles of management:

Taylor developed a number of principles of scientific management.

1. Science, not the rule of thumb: according to this principle scientific methods should be
developed and used to perform each job and job should not be done as a rule of thumb, we
should think before doing. For this purpose first normal time required to perform a job should
be determined. Secondly fair days work of the workman be determined. Thirdly the best way of
doing the work and a last maintaining standard working conditions and providing standard tools
and equipments.

32
2. Close co-operation between workers and management (cooperation, not
individualism): according to this principle objectives of organisation can only be achieved by
close cooperation between all the workers and all the levels of management in an organisation
and each superior and subordinate should cooperate each other to achieve the common
objective of the organisation.
3. Scientific selection, training of the workers: this principle suggests that skills and
experience of the workers must be properly matched with the jobs, which they have performed.
So selection should be based on tests and interviews in specified field, training be given if
required and their capabilities should be developed to the maximum.
4. Division of work and responsibility (separation of planning and operational works):
there should be clear-cut division of work and responsibility between work and management.
E.g. planning is the work of management and so managers should be responsible for the proper
planning where as execution of plan is the work of workers and so worker should be responsible
for proper execution of planning.
5. Mental revolution (harmony): in an organisation the personnel’s (persons who are
working on an organisation) should be made mentally prepared to perform the activities
assigned to them. So management should create suitable working condition and resolve all
problems scientifically and the workers should perform their job devotedly and use the
resources efficiently.
6. Maximum prosperity for employers and employees: this principle requires that the
aim of management should be to secure maximum prosperity for the employers along with the
maximum welfare of employees.

Criticism of scientific management:

Taylor’s work was criticised on the following grounds:

1. The use of the word ‘scientific’ before ‘management’ was objected because what is
actually meant be scientific management is nothing but a scientific approach to
management.
2. It was argued that the principles of scientific management as advocated by Taylor
were confined mostly to production management. He ignored certain other essential
aspects of management like finance, marketing, accounting and personnel.
3. Taylor advocated the concept of functional foremanship to bring about
specialization in the organisation. But this is not feasible in practice as it violates the
principle of unity of command.
4. Trade unionists regarded the principles of scientific management as the means to
exploit labour because the wages of the workers were not increased in direct proportion
to productivity increases.
5. Scientific management is based on the assumption that people are motivated by
material gains. Taylor and his associated concentrated on physical and economic needs

33
 and over-looked the social and ego needs of people. Later experience has revealed that
financial gain is not the only thing that matters. Workers also want job satisfaction,
participation and recognition.
6. Scientific management is quite limited in scope. It focused attention completely on
efficiency at the shop floor. As a consequence management became the study of shop
management while the more general aspects were overlooked. Scientific management has
thus been described as a theory of industrial engineering.
7. Increase in work speed: in scientific management the workers are supposed to
work with more speed, which affects their health.
8. no chance to show skill: in scientific management workers are supposed to work
according one schedule and no thought is given to personal within and skill.
9. Monotonous work: the workers are supposes co work only the specified portion
of work continuously for many years the same work for many years make the work
monotonous.
10. Lack of initiative: no chance is left to show their ability only a mechanized
process of work is followed.
11. Lack of employment opportunities: more work by lesser worker thus reduces the
chance of more employment.
12. Exploitation: workers are not given their due shares in the gains due to
increased productivity of the enterprise. Comparatively, less efficient workers who are
failed to achieve the standard are penalized wages do not rise in
the same proportion in which productivity of labour increases.
13. Weakness of trade unionism: scientific management reduces the role of trade
unions as standards of outputs, wages and working conditions are determined on
scientific bases. There is little scope of bargaining on this ratter. The differential piece-
wage divides the worker into efficient and inefficient. Scientific management may lead to
accuracy, as workers have to carry out the instructions of their functional basis. It cuts the
roots of trade union movement.

OR

1. Speeding up of workers: workers feel that scientific management is nothing but a device
to force workers to a greater speed, without much regard for their health and safety. It creates a
lot of physical and mental strain on them.
2. Loss of workers skill and initiative: he workers had to work according to the
instructions of the foreman. This leads to loss of initiative from the workers and they cannot
suggest better method of work. They further allege and too much of standardization, a pre-
requisite for scientific term, due to loss of workers initiative it results into lower productivity.

34
3. Monotony: under this function of planning is separated from that of doing. Every worker
is expected to perform his small part of a job due to specialization. This makes the work
monotonous and worker lends to lose interest in his job.
4. Unemployment: Scientific management reduces the number of processes and motions of
workers, increases the hourly or daily output per worker, increases their efficiency by
standardization and decision of labour, thereby, it creates unemployment by requiring lesser
number of workers.
5. Exploitation of workers: the workers feel that gains increased profit is taken away by
investors and only insignificant benefit is given to the workers by way of increase in wages and
bonus.
6. Discrimination between workers: under this, efficient workers get more wages as
compared to the inefficient ones due to the differental wage incentive scheme.
7. Undemocratic in nature: workers object that scientific management is undemocratic in
nature as it gives absolute control over workers to the functional bosses. The workers have to
follow the instruction of the bosses without thinking on the part of the workers.
8. Unsuitable for small-scale unit: some employers are of the opinion that scientific
management is only suitable for large-scale units. Small-scale units cannot afford to introduce
the scheme of scientific management.

Techniques or elements of scientific management:

1. Functional foremanship: Taylor believed that a single foreman might not be competent
to supervise all functional matters. Functional foremanship involves supervision of a worker by
several specialist foremen. So this concept is opposite of the principle of unity of command.
E.g. matter relating to the speed of work of a worker should be supervised by speed supervisor
and repair and quantity there of should be supervised by the repair supervisor.
2. Standardization of work: according to this technique standards should be fixed at every
level. So that the jobs can be performed efficiently. E.g. standard tools and equipments should
be provided to the workers. Standard working conditions are provided at work place. Standard,
size, quality, weights and other measures should be fixed. Standard time required performing a
unit of job and standard working hours of a fair day. Standard performance of machines in a
standard time.
3. Simplification of work: the work should be simplified in a way so that an average
worker can easily understand the steps to be performed to do a specified job. Simplification will
certainly improve the efficiency resulting more production and reduction in cost and wastages.
4. Fatigue study: according to this technique management should determined the amount
and frequency of rest intervals in completing a task. Because human being is bound to feel tired
if works without rest interval for a long period and after getting tired he will not be able to
perform the job with full capacity. But by rest he will regain stamina.

35
5. Method study: there may be various methods to perform a job with different cost
requirements. So the organisation should try to find out the best way to perform the task. E.g.
shoes may be manufactured manually or by machines, which ever costs less be adopted.
6. Deferential wage system: in this technique Taylor suggested that differential wage
system for the wages to the employees on the basis of their performance should be introduced
which will develop the idea/concept “do more to earn more”. The inefficient worker will also
try to do to the maximum of his capacity and so the habit of doing the best and more in an
efficient manner is develop.
7. Mental revolution: working of the subordinate and superior is based on whether they are
mentally prepare for doing the job or not. A positive attitude of both towards each other each
necessary there must be an environment in an organisation in which the workers feel that the
management is exploiting them. On the other hand management also should have no concept
that the workers have a tendency of miss use of tools and equipments, resulting wastages.
8. Time study: time study is a technique, which is used to measure/determine the time that
may be taken by workmen of average skills/ability to perform a job/task. Purpose of time study
is to determine standard time required to perform a specified job and so fair days
work/workman. Time study is conducted with the help of stopwatch.
9. Motion study: motion study is a technique, which involves close observation of
movements of body and limps required to perform a job. Its purpose is to determine the best
way of doing a job by eliminating the wasteful motion, which will further reduce the fatigue
resulting improvement in efficiency. Micro chronometer is the tool of study.

Administrative theory:

Henri Fayol was a French industrialist. He joined a French mining company in 1860 as an
engineer and rise to the position of its managing director 1888. Through, his long practical
experience Fayol developed a general theory of management. He published a book,
“administration industrial general” in French in 1916, which was translated into English in 1929
under the title “general and industrial management”.

Fayol began by dividing all industrial activities into six groups:

1. Technical,
2. Commercial,
3. Financial,
4. Security,
5. Accounting, and
6. Managerial.

He gives a lot of principles of management which are explained below:

36
1. Division of labour: division of labour means dividing the work among members of
organisations. It leads to specialization. It increases the efficiency of individual employee.
2. Parity of authority and responsibility: authority and responsibility are two sides of
same coin. Authority refers to the right of a superior to give orders to subordinates regarding
use resources of the organisation and to take decisions on specified matter. Responsibility on
the other hand, means obligation with respect to the performance of functions and achieving
goals. There must be parity between authority and responsibility.
3. Discipline: discipline in the context of management means obedience that is complying
with rules and regulations of the organisation.
4. Unity of command: according to this principle, a subordinate should receive orders and
be accountable to one and only one superior. No employees therefore, should be asked to
receive orders and instructions from more than one superior.
5. Unity of direction: efforts of all the members of the organisation should be directed
towards common goals. This principle ensures “unity of action, and coordination”.
6. Subordination of individual interest to general interest: the interest of the
organisation must precedence over the interest of individuals. In other words, individuals should
give up their personal interest in the interest of the enterprise.
7. Fair remuneration to employees: remuneration of employees should be fair and
reasonable wages should be determined on the basis work assigned cost of living, and financial
position of the business.
8. Centralisation and decentralization: when top management retains most of the decision
making authority, is called centralisation, sharing authority downwards leads to decentralization
Fayol says that an organisation should strive to achieve a balance between centralisation and
decentralization.
9. Scalar chain: it includes the chain of superiors from the top to the lowest rank in
management. Each manager is superior to the manager below him but he is also subordinate to
his own superior. According to this principle each superior is to provide direction or instruction
to immediate subordinate and subordinate to suggest or to complain to his immediate superior.
Some times orders, directions, suggestion, complain got delate. While communicating because
of the strict compliance of scalar chain. Therefore the avoid the delays Fayol suggested the
concept of “gang plank”. According to which two employees at the same level can
communicate each other directly. But each one of them must inform to his own superior.
10. Order: this principle is important to make the best use of personal and to avoid
unnecessary delay in work. The principle is concerned with arrangement of things, which is
called material orders, and placement of people called social order.
11. Equity: the principle of equity suggests that similar treatment is given to the people in
similar positions workers performing similar jobs should be paid the same wage rate.
12. Stability of tenure of personnel: this principle stresses on the stability of terms of
employee on the job and in the organisation. Employees should not be moved from their

37
 positions frequently. Fir wages recognisation of work, incentives and dimensions provided to
the employees help in reduction of absenteeism and frequent turnover, and provides efficiency
teamwork and loyalty.
13. Initiative: the employees at all levels should be given some freedom to adopt techniques
and methods to accomplish their tasks. This will create initiative and enforce efficiency. It
increases zeal and belongingness.
14. Esprit de corps: these French words are the synonyms of English proverb “union is
strength”. Group efforts are more effective than the total of individual’s efforts. Thus this
principle, therefore emphasis the need for team works.

Difference between Taylor’s scientific management and Fayol’s principles:

Sr. Basis of Taylor’s scientific management Fayol’s principle
no. difference
1. Beginning Taylor begins from lower Fayol begin from top
worker and moved upward. management and moved
downward.
2. Level of Taylor gave importance to the Fayol gave importance to
management operating level. the top level.
3. Focus Its focus is increasing Its focus is to improve over
productivity by way of works all administration by
simplification, time and motion adopting certain principles.
study etc.
4. Results Its results are based on Its results are based on
scientific observation. personal experiences.
5. Rigidity Taylor’s principles are Fayol’s principles are
comparatively rigid. comparatively flexible.
6. Purpose To increase the productivity of To develop general theory
(contributio workers by eliminating the of administration.
n) wastes.
OR

1. Taylor called his philosophy scientific ‘management’ while Fayol described his approach
as “general theory of administration”.
2. Taylor looked at management from the supervisory viewpoint and tried to improve
efficiency at the operating level. He moved upwards while formulating his theory. On the other
hand, Fayol analysed management from the angle of top management downward, with
emphasis on coordination. He, therefore, had a broader vision and a wider perspective than
Taylor.
3. Taylor focused his attention on factory management and his principles are directly
applicable at the shop floor. But Fayol concentrated on the functions of managers and on the

38
 general principles of management, which could be equally applied to all spheres of human
activity.
4. The aims of Taylor were to improve productivity of labour and to eliminate all types of
waste through standardization of work and tools. Fayol attempted to develop a universal theory
of management. He also stressed upon the need for teaching the theory and practice of
management.
5. Taylor developed techniques of management through scientific observation and
measurement of workers operations. But Fayol tried to develop universal truths or principles
from personal experiences.

HUMAN RELATIONS APPROACH:

This theory was given by GEORGE ELTON MAYO (1880-1949). He and his team eared
out the famous Hawthorne Experiments; these experiments were conducted in the Hawthorne
plant of western electric company in Chicago (USA), from 1927-1932.
These experiments may be classified into four stages:

1. Illumination experiments: workers were divided into two groups. One group was placed
in a room where lighting remains constant, other group was placed in a different room where
the light was deem. Contrary to the hypothesis of scientific management, production increased
in both the rooms. These experiments revealed that there was something more than
illumination, which affected productivity.
2. Relay Assembly Test Room Experiment: in this a group of six female workers was
asked to work in a separate room. During the course of experiment a series of changes were
introduced such as piecework, rest pauses, shorter working hours and least rest hours. The
researchers conclude that the productivity increased due to a change in the girl’s attitudes
towards work and their groups. As there was freedom of work, they developed a sense of
belonging and responsibility.
3. Mass interviewing programme: the researchers conducted thousands of interviews to
determine the attitudes of employees towards their job, working conditions, supervision and the
company. The main findings of the programme were as under: (a) Merely giving a person an
opportunity to talk and air his grievances has a beneficial effect on his morale. (b) Worker’s
complaints are not necessarily objective statements of facts. (c) Workers are influenced in their
demands by experiences both inside and outside the factory.
4. Bank wiring observation room study: this study was conducting to analyse the
functioning of a small group and its impact on the behavior of individual workers. Fourteen
workers constituted the work group on piecework basis. The hypothesis was that each worker
would produce mare. However, the result was different. The group was restricting the output of
individual worker through various forms of social pressure. The findings of Bank wiring
experiment included: (a) Each individual was restricting output. (b) The group had its own

39
 “unofficial” standards of performance. (c) Individual output remained fairly constant over a
period of time. (d) Departmental records were distorted due to differences between actual and
reported output or between standard and reported working time.

Conclusions of Human Relation Approach:

1. The business organisation is a social system.

2. Employees in any organisation get satisfaction not by economic incentives but by the
satisfaction of many other social and psychological wants, feelings, desires and so on.
3. In an organisation, it is ultimately cooperative attitude and not the mere command, which
yields results.
4. Management must aim at developing social and leadership skills in addition to technical
skill.
5. Morale and productivity go hand in hand in an organisation.
6. At the workplace, the workers often do not act or react as individuals but as members of
groups. A person who resists pressure to change his behaviour as an individual often changes it
quite readily if the group of which he is a member changes its behaviour. The group plays an
important role in determining the attitudes and performance of individual workers.
7. There is an emergence of informal leadership as against formal leadership and that sets
and enforces group norms. He helps the workers t function as a social group and the formal
group is rendered ineffective unless he conforms to the norms of the group, which he supposed
to be incharge.
8. Money is only one of the motivators, but not the sole motivator of human behaviour. Man
is diversely motivated and socio-psychological factors act as important motivators.
9. Man’s approach is not always rational. He may behave irrationally as far as rewards from
the job are concerned.

Criticism of Human Relations Approach:

1. Mayo and his associates focused their attention on interpersonal relations, group
dynamics, leadership skills, human motivation and so on. But it was pointed out by the critics of
the human relations approach that human relations are not the ultimate answer to the problems
of management. The search, therefore, continued for an adequate theory, and criticism of the
Hawthorne began to arise.
2. The most serious criticism made of the Hawthorne studies related to the research
methodology employed. For example, most of the human relations theory and practice are
based on a relatively few observations of some small samples of human beings at work. In an
admittedly radical criticism, Alex Carey maintains that the Hawthorne researchers minimized
the effects of economic incentives for no apparent justifiable reason and elevated supervision
and interpersonal relations to a point of primary importance.

40
3. The human relations approach lacks adequate focus on work. It puts all the emphasis on
interpersonal relations and on the informal group. It tends to overemphasize the psychological
aspects at the cost of the structural and technical aspects.
4. The human relations approach overemphasizes the group and group decision-making. But
in practice, groups may create problems and collective decision-making may not be possible.
5. It is assumed that all organisational problems are amenable to solutions through human
relations. This assumption does not hold good in practice.

Comparison of Scientific management and Human Relations Approach:

Sr. Scientific management Human Relations Approach

No.
1. Propounded by F.W. Taylor.
2. Suggested an engineering approach
to management problems. It applied
scientific method.
3. Focused on the study of the
productivity problems of industry.
4. The main concepts are scientific
task setting, scientific selection and
training of people and mental
revolution.
5. Originated from the experiments of
Taylor in dealing with the problems
of factories.
6. Scientific management is a part of
classical theory of organisation.
Propounded by Elton Mayo.
Suggested human relations as a
method of achieving higher
productivity. It discarded the
engineering approach.
Focused on the study of individuals,
his needs and behaviour.
The main concepts are job
satisfaction, motivation and
employee morale.
Originated from the Hawthorne
experiments conducted by the
psychologists and sociologists.
Human relations approach represents
neo-classical theory of organisation.

BEHAVIOURAL SCIENCE APPROACH:

41
 The behavioral approach focuses on the psychological and sociological processes
(attitude, motivations, group dynamics) that influence employee performance. While the
classical approach focuses on the job of workers, the behavioral approach focuses on the
workers in these jobs. Workers desisted the formal and impersonal approach of classical
writers. Behavioural approach started in 1930.
This gave rise to the Behavioural approach. Two branches contributed to the Behavioural
approach.
1. Human relations movements: Hawthorne expressed it.
2. Development of organisational behaviour: pioneers of the human relation movement
stressed inter-personal relations and neglected the group behaviour patterns. This led to the
development of field of organisational behaviour. It respects a more. Interdisciplinary and
multi-dimensional approach to worker behaviour organisation behaviour involves the study of
the attitudes, behaviour patterns and performance of individuals and group in an organisational
setting. It says that:
(a) Man is not a social individual, he is a complex individual.
(b) The role and contribution of organisation behaviour in workers.
(c) It discussed the psychological variables like motivations, leading etc.
(d) Man is a self-actualizing being.

Classification of human needs by Maslow as under:

1. Physiological needs: these needs are related to the survival and maintenance of life.
These include food, clothing, shelter etc.
2. Safety needs: these consist of safety against murder, fire, accident, security against
unemployment etc.
3. Social needs: these needs include need for love, affection, belonging or association with
family, friends and other social groups.
4. Ego or esteem needs: these are the needs derived from recognition status, achievement,
power, prestige etc.
5. Self-fulfillment: it is the need to fulfill what a person considers to be his real mission of
life.

Maslow is of the opinion that these needs have a hierarchy and are satisfied one by one.
When first needs are satisfied then person moves to second---------so on.

Contributions of Behavioural science approach:

The behavioural science approach is concerned with the social and psychological aspects
of human behaviour in organisation. Many of the conclusions of the Howthorne studies were
reaffirmed by the subsequent research studies, but certain ideas were extended and others

42
 highlighted by the behavourial scientists. Some of the important elements of the behavourial
science approach are highlighted below.

1. Individuals differ in terms of their attitudes, perception and value systems. Therefore,
they react differently to the same situation.
2. People working in an organisation have their needs and goals, which may differ from the
organisation’s needs and goals. Management should achieve fusion between organisational
goals and human needs.
3. Individual behaviour is closely linked with the behaviour of the group to which he
belongs. A person may be inclined to resist pressures to change his behaviour as an individual.
But he will readily do so if the group decides to change its behaviour. With work standards laid
down by the group, individuals belonging to that group will resist change more strongly.
4. Informal leadership, rather than the formal authority of supervisor, is more important for
setting and enforcing group standards of performance. As a leader (manger) may be more
effective and acceptable to the subordinates if he adopts the democratic style of leadership. If
the subordinates are encouraged to participate in establishing the goals, there will be positive
effect on their attitude towards work. Changes in technology and methods of work, which are
often resisted by employees, can be brought about more easily by involving the employees in
planning and designing the jobs.
5. By nature most people enjoy work and are motivated by self-control and self-
development. It is for the managers to identify and provide necessary conditions for the human
potential to be used in the service of the organisation. The manager’s attitude towards human
behaviour should be positive.

The behavioural scientists have shown how human beings bring to their task aspects of
behaviour, which the effective manager should profitably understand. After all, it is individuals
and groups with which a manager is concerned and while organisational roles are designed to
accomplish group purposes, people must fill these roles.
Thus, the behavioural sciences have provided managers with a ore systematic
understanding of one of the most critical factors in the process of management—the human
element. Insights evolving from that understanding have been used to design work situations
that encourage increased productivity. It has enabled organisations to formulate programmes to
more efficiently train workers and managers, and it has effects in numerous other areas of
practical significance.

MODERN APPROACH:

(QUANTITATIVE OR SCIENCE OR MATHEMATICAL APPROACH)

43
 The quantitative or mathematical approach to management developed in the 1950’s. It
offered systematic analysis and solutions to many complex problems faced by management in
the real world. The quantitative school of management is also called operations research (OR)
management science. Mathematical and statistical tools are now applied in the field of
management, particularly in decision-making or complex problems. More commonly used OR
techniques are linear programming, game theory, queing, simulation and probability. Together,
with these quantitative decisions making tools are called ‘operations research’.
The management science approach was evolved after the Second World War.
It involves the application of sophisticated quantitative/mathematical techniques for
solving managerial problem.
The management science approach differs from the classical and behavioral approaches
in several ways. Its distinguishing features are given below.

1. Management is concerned with problem solving and must use mathematical tools to solve
them.
2. Mathematical modes can be developed by quantifying various variables of the problems.
3. Mathematical symbols can be used to describe managerial problems.
4. Mathematical tools, operations, research, simulation and model buildings are used to find
out solution to managerial problems.
5. Rational decision-making: an organisation is considered a decision-making unit and the
main job of a manager is to make decisions and solve problems. The quality of managerial
decisions determines organisational efficiency. Therefore management information system and
other technique should be used for making rational decisions.
6. Mathematical models: a model is a simplified representation of a real life situation. It
utilizes mathematical symbols and relationships. It reduces a managerial decision to a
mathematical form so that decision-making process can be simulated and evaluated before the
actual decision is make with the help of a mathematical model, a manager can test different
values of each variable until an acceptable solution is found.
7. Computer applications: the use of computers has been the driving force in the
development of the management science approach the computer can handle in minutes
extremely complex problems with an immense volume of data and also calculate numerous
variations in the solution.
8. Evolution criteria: as the main focus of the management science approach is on
scientific decision-making models are evaluated or effectiveness against the set criteria, like
cost reduction return on investment, schedules and deadlines etc.

44
 SYSTEMS (MODERN) APPROACH:

Systems approach to management developed after 1950. Many pioneers during as E.L
Trist, AK Ria, F.E. Kast, and R.A Johnsm have made significant contributions to this approach.
This systems approach looks upon the management as a ‘System’ of as an organized
whole make up of sub-systems integrated into a unity or orderly totality. The attention should
be given so overall effectiveness of the system rather than effectiveness of any sub-system if
isolation.
It took where management process school left off in attempting to unify management
theory. It emphasizes the inter-relatedness and inter-dependence of all activities within an
organisation. It is based on system analysis. It attempts to identify the nature of relationships of
various parts of the system. A system is a set of inter-connected elements or component parts to
achieve certain goals. An organisation is viewed by the modern authors as an op0en system. An
organisation as a system has five basic parts:
1. Input,
2. Process,
3. Output,
4. Feedback and
5. Environment.

Systems approach to management provides a conceptual basis as well as guidelines for

establishing a more efficient system for planning, organisation, directing and controlling. It
forces the manager to look upon his business as an open adaptive system. Information is an
important part of the system because an organisation must act and interact with its environment.

Features:
1. An organisation consists of many sub-systems.
2. All the sub-systems are mutually related to each other.
3. The sub-parts should be studied in their enter-relationships rather than in isolation from
each other.
4. The organisation provides a boundary, which separates it from other systems. It
determines which parts are internal and which parts are external.
5. The organisation is responsive to environmental effect. It is vulnerable is the changes in
environment.
6. An organsiation is a system consisting of many interrelated and interdependent parts or
sub-systems. These elements are arranged orderly according to some scheme such that the
is more than the sum of the parts.
7. As a system an organisation draws inputs (energy. Information, materials, etc.). From its
environment. It transforms these inputs and returns the output back into the environment in the
form of goods and services.

45
8. Every system is a part of a super system.
9. Organisation is an open system and it interacts with its environment. It is also a dynamic
system ass the equilibrium in it is always changing.
10. Management is expected to regulate and adjust the system to secure better performance.
11. Management is multidisciplinary as it draws and integrates knowledge from various
disciplines.

Systems are of two types:

1. Closed system: if closed system has no interaction with the outside world.
2. Open system: continually interacts with its environment. All living systems are open
system.

CONTINGENCY (MODERN) APPROACH:

The contingency approach to management emerged from the real life experience of
managers who found that no single approach worked consistently in every situation. The basic
idea of this approach is that number management technique or theory is appropriate in all
situations. The main determinants of a contingency are related to the external and internal
environment of an organisation.
The process, quantitative, behavioural, and systems approaches to management did not
integrate the environment. The often assumed that their concepts and techniques have universal
applicability. For example the process theorists often assumes that strategic planning applies to
all situations; the quantitative experts generally feel that linear programming can be used under
all conditions; the behavioural theorist usually advocates participative goal setting for all
superior-subordinate pairs; and the system advocates tend to emphasize the need for
computerized information flows in all situations. On the other hand practicing managers find
out that a particular concept or technique from the various approached just does not work
effectively in various situations. The theorists accuse practitioners of not applying the technique
properly, and the practitioners accuse the theorists of being unrealistic. The contingency
approach does incorporate the environment and attempts to bridge this existing theory-practice
gap.
Contingency approach advocates that managerial actions and organisational design must
be appropriate to the given situation and a particular action is valid only under certain
conditions. There is no one best approach to management and it all depends on the situation. In
other words, managerial action is contingent upon external environment. There is no one best
approach for all situations. What a manager does depends upon a given situation and there is an
active inter-relationship between the variables in a situation and the managerial action.
Contingency theory attempts to analyse and understand these interrelationships with a view
towards taking the specific managerial actions necessary to deal with the issue. This approach is

46
 both analytical and situational, with the purpose of developing a practical answer to the
question at hand.
There are three major elements of the overall conceptual framework for contingency
management; the environment, management concepts and techniques and the contingent
relationship between them.

External environment: economic, social, technology and political factors.

Internal environment: technological-constraints, task constraints, people constraints.

Features of contingency approach:

1. Management is externally situational: the conditions of the situation will determine which
techniques and control system should be designed to fit the particular situation.
2. Management is entirely situational.
3. There is no best way of doing anything.
4. One needs to adapt himself to the circumstances.
5. It is a kind of “if” “then” approach.
6. It is a practically suited.
7. Management policies and procedures should respond to environment.
8. Managers should understand that there is no best way of managing. It dispels the
universal validity of principles.

Superiority of contingency approach:

Clear-cut emergence of contingency approach was noticed after the popularization of

systems approach. The contingency theorists accept open adaptive nature of the organisation
and the interdependency between various sub-systems of the organisation. But they have
pointed out that the systems approach does not adequately spell out the precise relationship
between organisation and its environment. It is too abstract and difficult to apply in practice.
They have tried to modify and operationalise the system framework.
The systems approach takes a broader view of organisational variables and employs a
comprehensive model of human beings. It takes into account the full range of human needs and
motives. On the other hand, contingency approach is concerned mainly with the structural
adaptation of organisation to the task environment. But both these viewpoints are not mutually
exclusive. They should be treated as complementary to each other. The manager should use
systems and other approaches under the framework of contingency approach.

COMPARISON OF SYSTEMS APPROACH AND CONTIGENCY APPROACH:

Sr. Systems approach Contingency approach

no.

47
1. Lays emphasis on the Identifies the nature of interdencies
interdependencies and interactions and the impact of environment on
systems and sub-systems. organisational design and managerial
style.
2. Treats all organisations alike. Size Each organisation is to be studied as
of the organisation, and its socio- a unique entity.
cultural setting are not considered.
3. A way of thinking about A down-to-earth, pragmatic and
organisations at an abstract, level. action focused approach. Provides
Provides a global theoretical model operational tools and techniques for
for understanding organisation. analyzing and solving problems.
4. Appears to be neutral and non- Rejects the universality of principles,
committal on the universality of no one best way of managing.
principles of management.
5. Main focus on internal environment Main focus on the external
of the system. environment of the system.
6. Suggests deterministic solutions to Suggests probable solutions to
management problems. management problems.
7. Input-output process, open system, Suggests a comparative analysis of
system boundary, synergy, organisation to establish patterns of
homeostasis, dynamic equilibrium, similarities and differences. Fit
entropy and equi-potentiality are its between approach and situation is a
main features. must.

OEPRATIONAL APPROACH:

Koontz and O’Donnell suggest the operational approach to management and in doing so,
they have attempted to draw together the pertinent knowledge of management by relating it to
the managerial job, i.e., what managers do. This approach recognizes that there is a central core
of knowledge about managing which exists in managements such as line and staff, patterns of
departmentation, span of management, managerial appraisal, and various managerial control
techniques.
Many other pertinent elements of knowledge are derived from other fields such as
application of systems theory, motivation and leadership, decision-making, group behaviour
and cooperative systems, communication, and mathematical analysis and practices.
Operational management has a central core of knowledge not found elsewhere. It also
draws from other fields of knowledge and adopts within it those parts of these fields, which are
especially useful for managers. The operational approach regards management as a universally
applicable body of knowledge that can be brought to bears at all levels of managing and in all
types of enterprises. At the same time, the approach recognizes that the actual problems

48
managers face and the environment in which they operate may vary between enterprises and
levels, and it also recognizes that application of science by a perceptive practioner must take
this into account in designing practical problem-solutions.
The operational approach is quite similar to the modified management process approach
advocated by G.R.Terry. It may also be called eclectic process school of management, featuring
the basic framework of the process approach modified by certain theories from other
appropriate schools of management thought. Eclectic means consisting of “what is selected”
and this term has been interpreted to indicate taking the best from what is available in the
management thought and working into it a single molded around the process framework as the
central core.

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 PLANNING AND DECISION MAKING:
Planning:
Planning is the process of deciding in advance what is to be done, who is to do it, how it
is to be done and when it is to be done. It is the process of determining a course of action, so as
to achieve the desired results. It helps to bridge the gap from where we are, to where we want to
go. It makes it possible for things to occur which would not otherwise happen. Planning is a
higher order mental process requiring the use of intellectual faculties, imagination, and foresight
and sound judgment. Accounting to Koontz, O’Donnell and weihrich, “planning is an
intellectually demanding process; it requires the conscious determination of courses of action
and the basing of decisions on purpose, knowledge and considered estimates.
Planning is a process, which involves anticipation of future course of events and deciding
the best course of action. It is a process of thinking before doing. “To plan is to produce a
scheme for future action; to bring about specified results, at specified cost, in a specified period
of time. It is deliberate attempt to influence, exploit, bring about, and controls the nature,
direction, extent, speed and effects of change. It may even attempt deliberately to create change,
remembering alwas that change (like decision) in any one sector will in the same way affect
other sectors”. Planning is a deliberate and conscious effort done to formulate the design and
orderly sequence actions through which it is expected to reach the objectives. Planning is a
systematic attempt to decide a particular course of action for the future; it leads to determination
of objectives of the group activity and the steps necessary to achieve them. Thus, it can be
concluded that “planning is the selecting and relating of facts and the making and using of
assumptions regarding the future in the visualization and formulation of proposed activities
believed necessary to achieve desired results.

OR
In other words we can say that Planning is a process of thinking before doing. It involves
determinations of goals and the activities required to be performed to achieve the goals. It
consists:

50
1. What is to be done?
2. How it is to be done?
3. Where it is to be done?
4. When it is to be done?
5. By whom it is to be done?

So planning is a process of shorting out the path for attaining the determined objective of
the business. Overall planning is deciding that in present, what is to do in future.

Features/Nature/characteristics of planning:
1. Goal oriented: the main purpose of plan is always to determine the goal to be achieved
and the activities to be performed to achieve these goals. So planning relates to creative
thinking for the solution of various problems.
2. Primacy (basic function) of planning: it means planning is the basic function of all
other managerial functions. It provides a base for other managerial functions like organizing,
staffing, directing and controlling. We can say that structure of all other functions depends on
planning.
3. Forward looking: planning is never done for past but is done for the future to achieve
certain objective. Therefore, it is said that planning is thinking before doing. Planning is based
on estimated future trends of social, economic and technological changes because it has to
tackle the future requirements.
4. Pervasiveness: planning is required in all sectors, i.e. business, industry, profession etc.
whether it is of large scale or small scale and in all the department of organisation like purchase,
production, marketing, finance department etc. however nature of planning differs from one
department to another.
5. Involving choice (alternative): planning can be when there are two or more alternatives
and the planner can make a choice for the best, in other words, in the absence of choice there
will be no planning because then there is a single way of doing something i.e. to be adopted.
6. Continuous process: planning is an ongoing process, planning starts before performing
the job and them goes an with the activities to be performed to do that job and them just after
the competition of the job planning regarding starting the new job. Moreover changes take place
in business environment and regular plans are made to face such changes.
7. Flexible: there must be flexibility in planning, because plans are always based on future,
which is uncertain. So flexibility will give a chance to make changes as per future requirements.
8. Efficiency of operations: planning is made with the objective of raising efficiency of
operations but it is not necessary that efficiency will raised, if may or may not. So the
management should make continuous efforts to minimize the cost of wastage and improving the
efficiency by use of latest change in technology.
9. Planning is a primary function: planning is the basis or foundation of the management
process. All other functions of management are designed its attain the goals set under planning.

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10. Planning is the fundamental premise of all management functions: as managerial
operations in organizing, staffing, leading, and controlling are designed to support the
accomplishment of enterprise objectives, planning logically precedes the execution of all other
managerial functions.
11. Planning is closely linked to objectives: each plan specifies the objectives to be attained
in the future and the steps necessary to reach them. As Billy E. Goetz said, “plans forecast
which actions will tend towards the ultimate objective…Managerial planning seeks to achieve a
consistent, coordinated structure of operations focused on desired ends.”
12. The effectiveness of planning is measured in terms of what it contributes to the
objectives: a plan is efficient if it, when put into action, brings about the achievement of the
objectives with the minimum of unsought consequences and with positive gains greater than the
costs.
13. Planning is a pervasive function of management: planning is a function performed by
all managers, although the character and breadth of planning will vary with their authority and
with the nature of policies and plans outlined by their superiors.
14. Planning is a highly skilful intellectual activity: it involves active use of higher mental
process like thinking, innovation or creativity, etc.
15. Planning involves selection among the alternatives: it is a highly selective process in
which all the alternatives need to be listed and best alternatives are selected or decided.

Importance of planning:

1. Makes the objectives clear and specific: planning clearly specifies the objectives and
the policies or activities to be performed to achieve these objective in other words what is
to be done and how it is to be done are clarified in planning.
2. Off setting the uncertainty and change: planning is necessary to look ahead towards
future and to take decisions regard facing the expected changes/requirement of the future.
E.g. before coming of summer session producers started production for the products to be
used in summer.
3. Plans facilitate decision-making: to achieve the objective predetermined under
planning, business has to take various decisions by considering the available resources. If
job may be completed by using various alternatives (e.g. manually or by machines) and
the best alternative is decided by the management, which is more helpful in achieving the
objective.
4. Provides basis of control: under controlling actual performance is compared with the
planed performance (target/objective). So planning is the base of controlling process.

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5. Leads to economy and efficiency: planning clarifies the work and its method of doing.
Resultantly it reduces confusion and wastage of resources in the form of thinking at the
time of doing. So efficiency of the worker will risen which will further result economy in
production.
6. Facilitates integration: under planning proper directions as per plane are provided to
the subordinates. Resultantly they all make effort towards the achievement of preplanned
objective. Such co-ordination of sub-ordinates and their departments will certainly help
the organisation in achieving its objective.
7. Encourages innovation and creativity: planning is the process of thinking in advance
and so plans are made to achieve a target at future date by using latest methods and
technology to perform the industrial/business activities and so plans lead to innovation.
8. Facilitates control: planning facilitates the managers in performing their function of
control. Planning and control are inseparable in the sense that unplanned action cannot be
controlled because control involves keeping activities on the predetermined course by
rectifying deviations from plans. Planning facilitates control by furnishing standards of
control. It lays down objectives and standards of performance, which are essential for the
performance of control function.
9. Improves motivation: the effective planning system ensures participation of all
managers, which improves their motivation. It improves the motivation of workers also
because they know clearly what is expected of them. Moreover, planning also serves as a
good training device for future managers.
10. Improves competitive strength: effective planning gives a competitive edge to the
enterprise over other enterprises that do not have planning or have ineffective planning.
This is because planning may involve expansion of capacity, changes in work methods,
changes in quality, anticipation of tastes and fashion of people and technological changes,
etc.
11. Encourages innovation and creativity: planning helps innovative and creative thinking
among the managers because many new ideas come to the mind of a manager when he is
planning. It creates a forward-looking attitude among the managers.
12. Achieves better coordination: planning secures unity of direction towards the
organisational objectives. All the activities are directed towards the common goals. There
is an integrated effort throughout the enterprise. It will also help in avoiding duplication
of efforts. Thus, there will be better coordination in the organisation.

LIMITATIONS OF PLANNING:

Planning is an important function of management. However, he planning may fail if the

following limitations.

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1. Lack of accuracy: planning relates to future and future is always uncertain and so
prediction about future is so much difficult. Moreover planning are based on data/information
relating to past and as such planning based on any wrong information may not be useful to the
organisation.
2. Costs: formulation of plans involves too much cost which are in the form of time spend,
money spent etc. but some times there is little benefit from in plan and than it becomes a burden
for the institution. If the plan is not useful than the amount or time spent on its formulation is a
waste.
3. Advance effect on decisions: some plans are rigid and a manager faces difficulty while
making any changes where as there may be continuous change in environment where as the
quick decision is required as per the changed environment.
4. Delay in actions: planning requires some time for thinking, analyzing the situation and
designing the final plan and so in case emergency decision is required it will take time and
business will lose its opportunity. Moreover delay in decision will further delay the action.
5. Psychological barrier: people in organisation have to work strictly according to plan
where as they may be able to give better performance in a way decided by themselves.
Secondly they do not think beside the plan and performs their activities like a machine without
using their psychology.
6. Limited flexibility: there may be some changes in planning only up to some extent
because measure changes in plan will further attract the changes in supporting plans also and as
such the whole system is disturbed moreover changes in plans time and again will prove a
wastage of time and money spent on previous plan (pre-changed plan).
7. Human elements: planning are the results of thinking of human being. Information on
the basis of which plan is formulated may not be free form bias or there may be some other
errors which will further Reebok (problem) the better plan.
8. Limited practical value: planning is too much theoretical and have a less practical use
planning is more suitable when environment is suitable but due to unsuitability of environment
business has to take various quick steps/decision time and again and as such the importance of
other resources which are used according to changing environment, is more than that of
planning.
9. Improper plan: planning/target set at the lower side than the capability of or resources
and target on over side than the capacity of the resources both are termed as improper planning
because lower target will be easily achieved and we will feel false sense of security. On the
other hand over planned target beyond resources cannot be achieved even all effort both are the
situation of improper plan.
10. Planning is a time-consuming and costly process: this may delay action if certain
cases. But it is also true that, if sufficient time is not given to the planning process, the plans so
produced may prove to be unrealistic. Similarly, planning involves costs of gathering and
analyzing information and evaluation of various alternatives. If the management is not willing
to spend on planning, the result may not be good.

54
11. Planning is a forward-looking process: the planner must possess the required initiative.
He should be an active planner and should take adequate follow up measures to see that plans
are understood and implemented properly.
12. Resistance to change is another important factor, which puts limits on planning: It is
commonly experienced phenomenon in many organisations. Sometimes, planners themselves
do like change and on other occasion, they do not think it desirable to bring change, as it will
create resistance on the part of the workers. This attitude makes the planning process
ineffective.
13. Internal inflexibility in the organisation may compel the planners to make rigid
plans: this may deter the managers from taking initiative and doing innovative thinking. So, the
planners must have sufficient discretion and flexibility in the enterprise. They should not always
be required to follow the procedures rigidly.
14. Psychological factors also limit the scope of planning: some people consider present as
more important than future because present is less uncertain. Such persons are psychologically
opposed to planning. But it should not be forgotten that dynamic managers always look ahead.
Long-term well being of the enterprise cannot be achieved unless proper planning is done for
future.
15. The effectiveness of planning is sometimes limited: because of external factors, which
are beyond the control of the planners. External stringencies are very difficult to predict.
Sudden breakout of war, government controls, natural havocs and may other factors are beyond
the control of management. They make the execution of plans very difficult.

KINDS/TYPES OF PLANS:

The term plan refers to a course of action determined in advance by the management. It
has always a time frame in other words it is a package of decisions to make efforts to achieve
some results in a specified term of period.

1. Goals (Target): goal is a desired state of affairs, which an organisation wants to achieve.
Overall goals are the collective ends for which the whole organisation makes efforts to achieve.
Goals may be of short term or long term in nature. E.g. goal of an automobile company may be
to provide low cost and higher quality of automobiles to the public.
2. Objectives: objective is the ends towards which activity is aimed. In other words it is
desired and end result of an activity. There must be a time frame for the achievement of
predetermines objectives. Objectives may differ from one organisation to another. E.g. business
organisation will have an objective of earning more profits where as co-operative society has an
objective of well fare of its members more-over objectives may change from time to time. An
organisation may have single objective or multiple objectives. E.g. single objective—
maximization of profits, multiple objective increase in profits with other better facilities to the
customers and employees.

55
 As per as possible objectives are expressed in miserable quantity and so these provide a
path for planning. Because planning is made for the achievement of any objective.
Overall these are the desired results in the form of quantity to be achieved by performing
any activity there should be a specific time frame to achieve these objectives these should
be challenging but achievable.
3. Policies: policies are general statements, which guide the thinking in decision making.
These are concerned with administrative action and serve a principle for conduct. These are
predetermining decisions these helps the managers in achieving the objectives. E.g. policy of
hiring a trained engineer or to promote from within the staff. By way of training, policy of
setting competitive prices, policy of quick after sale service with in three months from the date
of sale. In other words these guidelines (policies) helps the management for taking decision in
proper direction to achieve the objective. Policy increase in taking decisions but within limits
and so the decision depends on the authority given in the policy.
4. Procedures: the procedure is defined as pre-determined se2quence of steps to initiate
action and complete the task. E.g. export and import procedure, admission procedure in a
school i.e. application in schedule time, screening of facts/data’s, rank of merit and them
decision regarding admission; Procedure are the clear cut steps to be taken to perform a job in
an optimum manner so that the objectives can be achieved policies and procedures are also
interrelated like there will be a policy of summer vacations in the schools. But fixing of
schedule of vacations is the procedure. To ensure that orders are handled in a specific way there
must be a procedure. So procedure helps the management to rich its objective.
5. Rules: rules are specific directions to perform an action or not to perform an action these
are the directives to the people in organisation, finding them to do or not to do, to behave or not
to behave in a particular way. Rules are always in the form of order’s or directions and not in
the form of request. Rules are a set of instructions to be followed in a particular way. These are
generally in writing and are impersonal in nature. In business organisations rules are framed
regarding recruitment, promotion, managerial decisions ae taken within the boundaries of rules.
There is no discretion in there application. When ever the decisions are within rules the person
who has taken decision is safe and secured as he is working as per rules, which are acceptable
by the people.
6. Methods: a method is a prescribed process in which a particular task is performed. Its
specifies any best and efficient way of performing the task: - e.g. methods of valuation of stock-
cost or market price, which is less, is consider in final accounts. Moreover there are several
methods like method of calculating depreciation. Which method will be the basis of nature of
business and once selected the method becomes a prescribed manner of performing a job.
7. Programme: programme refers to the outline of plans of work to be carried out in proper
sequence. Do that the objectives can be achieved. E.g. management want to expand the size of
business by 70% so to implement this programme management must lay down certain policies,
procedures, methods, rules etc. so that with the co-ordination of these we may become
successful to implement this programme. A primary programme may call for any supporting

56
 programme in above. E.g. the programme i.e. programme of making arrangement of finance
required for expansion, programme of arrangement of trained workers required after expansion
and so for the successful implementation behave to make a combination of goals, policies,
procedures, rules, tasks, steps to be taken to perform these task, employees and other resources,
this over all process combination is known as programme.
8. Budget: budget is a statement of exceptive result expressed in numerical term. Budget is
a single use plan and can be expressed in respect of finance, material time, etc. so budget is a
finance and/or quantitative statement prepare and approved prior to a specified period. Budget
always pertains to future it is prepared in advance and expressed in qualitative financial terms.

*Difference between plans and policies*

Sr. Basis of difference Plans Policies

No.
1. Scope The term plan is a wider Policy is a narrow
concept that includes policy concept than plans.
and several other actions.
2. Help Plans a re helped by the Policies are determined
policies to become after plans it is only a
successful. part of plan.
3. Implementation Implementation of plan These are the guidelines
requires policy guidelines. helping in
implementation of
plans.

*Difference between policy and objectives*

Sr. Basis of difference Policy Objective

No.
1. Type of plans Policies are standing Objectives are the ends
plans/guidelines for the towards which activities
achievement objective. of the organisation are
directed.
2. Time limit Policies go on until these Objectives are the ends to
are changed and so no achieved by performing

57
 time limit. activities in a specified
period.
3. Basis of existence An organisation is There will be no
function without policies. organisation without
objectives.
4. Purpose Policies are the guidelines Objectives refer to the
to achieve the objective. target to be achieved.
5. Place Policies have lower place Objectives have higher
than objectives. place than policies.
6. Formulation Policies are formulated at The owner or top-level
top level, middle level and management of the
lower level management. business determines
objectives.

*Difference between policy and procedure*

Sr. Basis of difference Policy Procedure

No.
1. Guidelines Policies are the guidelines Procedures are the
to decision making. guidelines for taking steps
to do a job in proper
sequence.
2. Scope for change Policies are relatively Procedures are relatively
flexible. rigid.
3. Formulation Policies are generally Procedures are generally
formulated at top lay down by relatively
managerial level. lower managerial level.
4. Bridge Policies serve as bridge Procedure is a bridge
between organisational between activity and its
purpose and performance. outcomes.
5. Expression Policy is expressed in the Procedure is expressed in
form of general statement. specific stepwise
sequence.
6. Discretion It policy there is some Procedure gives no
scope for managers discretion in its
discretion. implementation.
7. Scope It has narrow scope. It has wider scope.

*Difference between policies and rules*

58
Sr. Basis of difference Policy Rules
No.
1. Nature It is a general statement in These are the most
nature. specific statement.
2. Guidelines Policies are guidelines to These are guidelines to do
decision making. and not to do.
3. Flexibility Policies are flexible in These are rigid and
nature. should have no deviation.
4. Discretion There is a scope of There is no discretion.
discretion of management
for implementation.

*Difference between rules and methods*

Sr. Basis of difference Rules Methods

No.
1. Purpose Rules are meant for strict Methods are meant for
compliance and have a efficient performance.
little concern with
efficiency.
2. Formulation Rules are formulated on Methods are formulated
the basis of legal on the basis of research
requirement. and analysis.
3. Penalty for Deviation from rules will Method’s deviations does
deviation attract penalty. not attract penalty.
4. Backed by Rules are generally Methods are backed by
backed by managerial. knowledge.
5. Relationship Rules relates to behaviour Methods relates to
of individuals and groups. physical and other task.
6. Associated Rules are associated Methods are not directly
directly with control. associated with control.

*Levels of planning*

In management theory, it is usual to consider that there are three basic levels of planning,
though in practice there may be more than three levels of management and to an extent, there

59
 will be some overlapping of planning operations. The theree levels of planning are discussed
below:

1. Top level planning: also known as overall or strategic planning, top level planning is
done by the top management, i.e., board of directors or governing body. It encompasses
the long-range objectives and policies or organisation and is concerned with corporate
results rather than sectional objectives. Top level planning is entirely long-range and
inextricably linked with long-term objectives. It might be called the ‘what’ of planning.
2. Second level planning: also known as tactical planning, it is done by middle level
managers or departmental heads. It is concerned with ‘how’ of planning. It deals with
development of resources to the best advantage. It is concerned mainly, not exclusively,
with long-range planning, but its nature is such that the time spans are usually shorter
than those of strategic planning. This is because its attentions are usually devoted to the
step-by-step attainment of the organisation’s main objective. It is, in fact, oriented to
functions and departments rather than to the organisation as a whole.
3. Third level planning: also known as operational or activity planning, it is the concern
of departmental managers and supervisors. It is confined to putting into effect the tactical
or departmental plans. It is usually for a short-term and may be revised quite often to be
in tune with the tactical planning.

*Steps/Stages of planning*

Planning is a process consisting many steps, which may differ from one plan to another.
But following are the common steps: -

1. Setting organisational objectives: planning is total based on the objectives, which an

organisation wants to achieve by way of planning. In other words first of all objectives will be
fixed and then we will make plan regarding how to gets success in achievement of such
predetermine objective. While making plan and setting objectives management should make
analysis of internal resources available with the business and arrangement of external resources,
external environments and corrective measures to face with the environment.
2. List of alternatives to achieve the objective: there may be so many ways available with
the business to achieve the objective. So business should prepare a list of such ways by
considering the merits and demerits of each for which ever is better should be adopted. E.g.
target of increasing profitability may be achieved by increasing sale, decreasing cost,
introducing new product of better technology, rise in process etc. which of these alternatives is
beneficial for business be adopted. Considering the merits and demerits of each alternative is
also termed as development of premises of each alternative.

60
3. Choose the best alternative: after considering the list of alternatives and merits of each
management has to decide which of these alternatives will be the best in consideration with the
human and nonhuman resources available with the business.
4. Formulation of supporting plans: supporting plans are those plans, which provides
support to the main plan. E.g. if the business wants to produce according to objective there may
be many supporting plans like planning of purchase of rawmateiral, planning of recruitment and
training of the man power etc.
5. Put the plans into action: after that plan formulated is ready to be put into action and so
function should be started according to the plan all supporting plans should effort to help the
main plan in reaching the objective and so in this all process is done in any effective manner we
will get desired results of the plan.
6. Follow up: once the plan is put into action it monitoring/supervision is equally important.
In the main time management should see whether we are going towards achievement of
objective or not. There may be some changes required before reaching the objective. E.g. a
company is to sell 1200 refrigerators per year than directors should see that at least 100 units
per month on average basis should be sold to achieve the target.

*Features of good plan/policy/procedure*

1. These should be purposeful and functional.

2. These should be simple and clear.
3. These should be flexible.
4. These should really serve as guidelines to reach the objective.
5. These should be economic (maximum use at minimum cost).
6. These should be in written form to avoid confusion.
7. These should be a periodic review and corrective measures to be taken.
8. These should be understandable.

*DICISION MAKING*

Decision-making is a process of selection from a set of alternative courses of action,

which is thought to fulfill the objectives of the decision problem more satisfactorily than others.
It is a course of action, which is consciously chosen for achieving a desired result. A decision is
a process that takes place prior to the actual performance of a course of action that has been
chosen. In terms of managerial decision-making, it is an act of choice, wherein a manager
selects a particular course of action from the available alternatives in a given situation.
Managerial decision making process involves establishing of goals, defining tasks, searching
for alternatives and developing plans in order to find the best answer fo the decision problem.
The essential elements in a decision making process include the following:
1. The decision maker,

61
2. The decision problem,
3. The environment in which the decision is to be made,
4. The objectives of the decision maker,
5. The alternative courses of action,
6. The outcomes expected from various alternatives, and
7. The final choice of the alternative.

Characteristics of decision-making:
1. It is a process of choosing a course of action from among the alternative courses of
action.
2. It is a human process involving to a great extent the application of intellectual abilities.
3. It is the end process preceded by deliberation and reasoning.
4. It is always related to the environment. A manager may take one decision in a particular
set of circumstances and another in a different set of circumstances.
5. It involves a time dimension and a time lag.
6. It always has a purpose. Keeping this in view, there may just be a decision not to decide.
7. It involves all actions like defining the problem and probing and analyzing the various
alternatives, which take place before a final choice is made.

*Process/Steps in rational decision making*

Effective decision-making process requires a rational choice of a course of action. There

is a need to define the term rational here. Rationality is the ability to follow systematically,
logical, thorough approach in decision making. Thus, if a decision is taken after thorough
analysis and reasoning and weighing the consequences of various alternatives, such a decision
will be called an objective or rational decision. Therefore rationality is the ability to follow a
systematic, logical and thorough approach in decision-making process. Gross suggested three
dimensions to determine rationality: (i) the extent to which a given action satisfies human
interests; (ii) feasibility of means to the given end; (iii) consistency. Steps of decision-making
process are given below:

1. Diagnosing and defining the problem: the first step in decision-making is to find out
the correct problem. It is not easy to define the problem. It should be seen what is causing the
trouble and what will be its possible solutions. Before defining a problem, a manager has to
identify critical or strategic factor of the problem. Once the problem is properly defined then it
will be easily solved. So, the first important factor is the determination of the problem.
2. Analysis of problem: after defining a problem, a manager should analyse it. He should
collect all possible information about the problem and then decide whether it will be sufficient

62
 to take decision or not. Sometimes it may be costly to get additional information or further
information may not be possible whatever information is available should be used to analyse the
problem. Analyzing the problem involves classifying the problem and gathering information.
Classification is necessary in order to know who should take the decision and who should be
consulted in taking it. Without proper classification, the effectiveness of the decision may be
jeopardized. The problem should be classified keeping in view the following factors: (i) the
nature of the decision, i.e., whether it is strategic or it is routine. (ii) the impact of the decision
on other functions, (iii) the futurity of the decision, (iv) the periodicity of the decision and (v)
the limiting or strategic factor relevant to the decision.
3. Collection of data: in order to classify any problem, we require lot of information. So
long as the required information is not available, any classification would be misleading. This
will also have an adverse impact on the quality of the decision. Trying to analyse without facts
is like guessing directions at a crossing without reading the highway signboards. Thus,
collection of right type of information is very important in decision-making. It would not be an
exaggeration to say that a decision is as good as the information on which it is based.
Collection of facts and figures also requires certain decisions on the part of the manager. He
must decide what type of information he requires and how he can obtain this. It is also
important to note that when one gathers the facts to analyse a problem, he wants facts that relate
to alternative courses of action. So one must know what the several alternatives are and then
should collect information that will help in comparing the alternatives. Needless to say,
collection of information is not sufficient; the manager must also know how to use it. It is not
always possible to get all the information that is needed for defining and classifying the
problem. In such circumstances, a manager has to judge how much risk the decision involves as
well as the degree of precision and rigidity that the proposed course of action can afford. It
should also be noted that fact finding for the purpose of decision-making should be solution-
oriented. The manager must lay down the various alternatives first and then proceed to collect
fact, which will help in comparing alternatives.
4. Developing alternatives: after defining and analyzing the problem, the next step in the
decision making process is the development of alternative courses of action. Without resorting
to the process of developing alternatives, a manager is likely to be guided by his limited
imagination. It is rare for alternatives to be lacking for any course of action. But sometimes, a
manager assumes that there is only one way of doing a thing. In such a case, what the manager
has probably not done is to force himself decision, which is the best possible. From this can be
derived a key planning principle which may be termed as the principle of alternatives.
Alternatives exist for every decision problem. Effective planning involves a search for the
alternatives towards the desired goal. Once the manager starts developing alternatives, various
assumptions come to his mind, which he can bring to the conscious level. Nevertheless,
development of alternatives cannot provide a person with the imagination, which he lacks. But
most of us have definitely more imagination than we generally use. It should also be noted that

63
 development of alternatives is no guarantee of finding the best possible decision, but it certainly
helps in weighing one alternative against others and, thus, minimizing uncertainties.
5. Review of key factors: while developing alternatives, the principle of limiting factor has
to be taken care of. A limiting factor is onw which stands in the way of accomplishing the
desired goal. It is a key factor in decision-making. It such factors are properly identified,
manager can confine his search for alternative to those, which will overcome the limiting
factors. In choosing from among alternatives, the more an individual can recognize those
factors which are limiting or critical to the attainment of the desired goal, the more clearly and
accurately he or she can select the most favourable alternatives. It is not always necessary that
the alternatives solutions should lead to taking some action. To decide to take no action is also a
decision as much as to take a specific action. It is imperative in all organisational problems that
the alternative of taking no action is being considered. For instance, if there is an unnecessary
post in the department, the alternative not to fill it will be the best one. The ability to develop
alternatives is often as important as making a right decision among the alternatives. The
development of alternatives, if thorough, will often unearth so many choices that the manager
cannot possibly consider them all. He will have to take the help of certain mathematical
techniques and electronic computers to make a choice among the alternatives.
6. Selecting the best alternative: in order to make the final choice of the best alternative,
one will have to evaluate all the possible alternatives. There are various ways to evaluate
alternatives. The most common method is through intuition, i.e., choosing a solution that seems
to be good at that time. There is an inherent danger in this process because a manager’s intuition
may be wrong on several occasions. The second way to choose the best alternative is to weigh
the consequences of one against those of the others. Peter Drucker has laid down four criteria
in order to weigh the consequences of various alternatives. They are: (i) Risk: a manager should
weigh the risks of each course of action against the expected gains. As a matter of fact, risks are
involved in all the solution. What matters is the intensity of different types of risks in various
solutions. (ii) Economy of effort: the best manager is one who can mobilize the resources for
the achievement of results with the minimum of efforts. The decision to be chosen should
ensure the maximum possible economy of efforts, money and time. (iii) Situation or timing:
the choice of a course of a action will depend upon the situation prevailing at a particular point
of time. If the situation has great urgency, the preferable course of action is one that alarms the
organisation that something important is happening. If a long and consistent effort is needed, a
‘slow start gathers momentum’ approach may be preferable. (iv) Limitation of resources: in
choosing among the alternatives, primary attention must be given to those factors that are
limiting or strategic to the decision involved. The search for limiting factors in decision-making
should be a never-ending process. Discovery of the limiting factor lies at the basis of selection
from the alternatives and these are experience, experimentation and research and analysis which
are discussed as: (a) Experience: in making a choice, a manager is influenced to a great extent
by his past experience. Sometimes, he may give undue importance to past experience. He
should compare both the situations. However, he can give more reliance to past experience in

64
 case of routine on his past experience to reach at a rational decision. (b) Experimentation:
under this approach, the manager tests the solution under actual or simulated conditions. This
approach has proved to be of considerable help in many cases in test marketing of a new
product. But it is not always possible to put this technique into practice, because it is very
expensive. It is utilized as the last resort after all other techniques of decision making have been
tried. It can be utilized on a small scale to test the effectiveness of the decision. For instance, a
company may test a new product in a certain territory before expanding its scale nationwide. (c)
Research and analysis: it is considered to be the most effective technique of selecting among
alternatives, where a major decision is involved. It involves a search for relationships among the
more critical variables, constraints and premises that bear upon the goal sought. In a real sense,
it is the pencil and paper approach to decision making. It weighs various alternatives by making
models. It takes the help of computers and certain mathematical techniques. This makes the
choice of the alternative more rational and objective.
7. Putting the decision into practice: the choice of an alternative will not serve any
purpose if it not put into practice. The manager is not only concerned with taking a decision, but
also with its implementation. He should try to ensure that systematic steps are taken to
implement the decision. The main problem whi8ch the manager may face at the implementation
stage is the resistance by the subordinates who are affected by the decision. If the manager is
unable to overcome this resistance, the energy and efforts consumed in decision-making will go
waste. In order to make the decision acceptable. It is necessary for the manager to make the
people understand what the decision involves, what is expected of them and what they should
expect from the management. The principle of slow and steady progress should be followed to
bring a change in the behaviour of the subordinates. In order to make the subordinates
committed to the decision, it is essential that they should be allowed to participate in the
decision making process. The managers, who discuss problems with their subordinates and give
them opportunities to ask questions and make suggestions, find more support for their decisions
than the managers who don’t let the subordinates participate. Now the question arises at what
level of the decision making process the subordinates should participate. The subordinates
should not participate at the stage of defining the problem because the manager himself is not
certain as to whom the decision will affect. The area where the subordinates should participate
is the development of alternatives. They should be encouraged to suggest alternatives. This may
bring to surface certain alternatives, which may not be thought of by the manager. Moreover,
they will feel attached to the decision. At the same time, there is also a danger that a group
decision may be poorer than the one-man decision. Group participation does not necessarily
improve the quality of the decision, but sometimes impairs it. Someone has described group
decision like a train in which every passenger has a brake. It has also been pointed out that all
employees are unable to participate in decision-making. Nevertheless, it is desirable if a
manager consults his subordinates while making decision. Participative management is more
successful than the other styles of management. It will help in the effective implementation of
the decision.

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8. Follow up: it is better to check the results after putting the decision into practice. The
reasons for the following up of decision are as follows: (i) if the decision is good one, one will
know what to do, if faced with the similar problem again. (ii) If the decision is bad one, one will
know what not to do, the next time. (iii) If the decision is bad and one follows up soon enough,
corrective action may still be possible.
In order to achieve proper follow up, the management should devise an efficient
system of feedback information. This information will be very useful in taking the
corrective measures and in taking right decisions in the future.

66
 *LEADING MANAGEMENT CONTROL*

Meaning of leadership style:

It is a process of influencing the behaviour of other people to work willingly towards the
achievement of organisational goals. It involves existence of a leader and followers. So
leadership is an exercise to influence the behaviour of the followers towards
attainment/achievement of specified goals. Here the person who guides or directs his followers
is known as leader.

*Features/Elements of leadership*

1. It is a process of influencing the behaviour of followers by the leader.

2. It involves interaction between leader and his followers.
3. It involves advice and guidance to achieve some common goals.
4. It is a process of securing willingness to do the job as per guidelines of the leader.

OR
1. Leadership is a process of influence: leadership is a process whose important ingredient
is the influence exercised by the leader on goup members. A person is said to have an influence
over others when they are willing to carry out his wishes and accept his advice, guidance and
direction. Successful leaders are able to influence the behaviour, attitudes and beliefs of their
followers.
2. Leadership is the function of stimulation: leadership is the function of motivating
people to strive willingly to attain organisational objectives. Leaders are considered successful
when they are able to subordinate the individual interests of the employees to the general
interests of the organisation. A successful leader guides his subordinates to have their individual
goals set by themselves in such a way that they do not conflict with the organisational

67
 objectives. When this congruency is achieved, workers act enthusiastically to achieve these
goals.
3. Leadership gives an experience of helping attain the common objectives: under
successful leadership, every person in the organisation feels that his operation, however minor it
may be, is vital to the attainment of organisational objectives. It happens when the manager
feels the importance of individuals, gives them recognition and tells them about the importance
of activities performed by them.
4. Employees must be satisfied with the type of leadership provided: only short-term
productivity of employees can be increased by pressure and punishment. This approach is not in
the long-term interests of the organisation. Force generates counter force, which results in a
decreased long-term productivity. Long-term interests of the organisation are best served when
managers allow subordinates to influence their behaviour, particularly when subordinates are
knowledgeable and competent. A good manager recognizes the fact that leadership is a shared
function. A good leader shares everything with his followers; he shares credit, he shares blame,
he shares ideas, opinion and experience.
5. Leadership is related to a situation: when we talk of leadership, it is always related to a
particular situation, at a given point of time and under a specific set of circumstances. That
means leadership styles should be different under different circumstances. At one point of time,
the subordinates may accept the autocratic behaviour of the leader while at a different point of
time and under a different set of circumstance, only participative leadership style may be
successful. That is why, it is said that leadership is always particular and not general.

*Relationship between leadership and managership*

Leadership and managership are not same thing a manager is a leader as well as manager
as he influence the behaviour of his subordinates to work willingly towards achievement of
organisational goals in the interest of subordinates as well as organisation. A manager can be
more effective if he is a good leader. Manager is more than a leader because he performs all the
five functions of management (planning, organizing, staffing, directing, and controlling) where
as a leader performs only leadership functions which is just a part of directing.
A leader need not necessarily be a manager. Leader acquires powers due to acceptance of
his role by his followers. Where as a manager acquires powers due to delegation by his
superiors.

*Importance of leadership*

1. Helps in guiding and inspiring the employees: leader guides and inspires his
subordinates towards higher performance and so helps in achieving the business goals.
2. Creates confidence: leader creates confidence among the employees by understanding
and handling the situations as per proper requirement. Sometimes individuals fail to recognize

68
 their qualities and capabilities than he provides psychological support to the followers by his
conduct and expression.
3. Improves productivity: the main purpose is to use the available human and non-human
resources of the organisation efficiently and efficiency of performance = the product of
capability and willingness. By raising willingness leader helps in improving the productivity.
4. Improves job satisfaction: effort from monitory incentives and better physical working
conditions, the job satisfaction of employees also depends on the behaviour of their managers.
Leaders ensure that managers in organisation should adopt behaviour, which is acceptable to the
subordinates. Moreover leaders support and encourage the subordinates to meet particular
situations. Overall these activities improve job satisfaction among the employee. A satisfied
human resource is always better than unsatisfied.
5. Acts as an intermediary: leader communicates the expectations of the management to
the subordinates and also leads the subordinates to resolve their problems and from the
management. So leader is a middleman between manager and worker.
6. Acts as a counselor: while taking various decisions by the management, leaders of the
workers are also invited to act as a counselor of the subordinates.
7. Enhances group efforts: leadership prepares the people at workplace to perform the job
with mutual trust co operative and friendly manner. Subordinates and the management should
make collective efforts and give priority to the achievement of organisational objectives.
8. Determination of goals: a leader performs the creative function of laying down goals
and policies for the followers. He acts as a guide in interpreting the goals and policies.
9. Organisation of activities: a good leader divides organisational activities among the
employees in a systematic manner. The relationships between them are clearly laid down. This
reduces the chances of conflict between them.
10. Representation of workers: the leader is a representative of his group. He takes
initiative in all matters of interest to the group and attempts to fulfill the psychological needs of
the subordinates.
11. Achieving coordination: a leader integrates the goals of the individuals with the
organisational goals and creates a commonality o interests. He keeps himself informed about
the working of the group and shares information with group for the coordination of its efforts.
12. Providing guidance: a leader guides the subordinates towards the achievement of
organisational objectives. He is available for advice whenever a subordinate faces any problem.
13. Building employees Morale: good leadership is indispensable to high employee morale.
The leader shapes the thinking and attitudes of the group. He develops good human relations
and facilitates interactions between the members of the group. He maintains voluntary
cooperation and discipline among followers.
14. Facilitating change: dynamic leadership is the cornerstone of organisational change. An
effective leader is able to overcome resistance to change on the part of workers and thus
facilitate change.

69
 *Leadership vs. managership*

Manager Leader
1. He drives and orders. He coaches and advises.
2. He depends blames and finds faults. He depends on his confidence and
goodwill.
3. He engenders fear. He inspires enthusiasm.
4. He fixes blames and funds faults. He solves problems.
5. He knows all the answers. He consults and seeks advice.
6. He makes the work drudgery. He makes the work a game.
7. He believes in “I”. He believes in “We” and “you”.

70
 *Formal and informal leaders*

It has been observed above that a manager should also be a good leader. But in actual
practice, every manager is not able to provide the kind of leadership desired by his
subordinates. This gives rise to informal leaders who do not hold any managerial post in the
organisation. A formal leader, on the other hand, is one who possesses organisational authority
to direct and control the activities of his subordinates. He can issue orders and instructions to
his subordinates by virtue of his formal authority in the organisation. An informal leader is
elected by the management, as in case of a formal leader.
Sometimes, informal leaders become more acceptable to the workers as compared to the
formal leaders. In such a situation, the formal leaders become the position-holders only. They
are not able to achieve the voluntary cooperation of the workers in all matters. It is also true that
a work-group may have different leaders for different purposes. The members of a work-group
may be influenced by one leader while doing their jobs. But as regards their personal problems,
they may go to another leader as far as their reaction is concerned.
Management often tries to suppress informal leaders. But it should be remembered that
the trouble they cause reflects the desires of the group. If they are suppressed, the workers may
become more antagonistic to management, morale may fall even lower and new informal
leaders may step to the fore. Therefore, it is better to work with informal leaders. There are
many ways in which a manager can build up good relations with the informal leaders working
with him. Among other things, he can pall necessary information to them first, seek their advice
on technical and human relations problems, and assign them to train other.

*Communication*

It is the process of transmitting the messages and receiving the response of that message.
The person who sends the messages is known as sender and the person who receives the
message is known as receiver and the response to the message is known as feed back. Since the
feedback requires another message to be communicated by the sender to the receiver. So
communication process become a circular process.
“Allen Lousis” communication is the sum of all the things which one person does when
he wants to create understanding in the mind of another. It is a continuous process of telling,
listening and understanding.
“George Terry” communication is an exchange of facts, ideas, opinions and emotions
by two or more persons.
In simple words, exchange of ideas/messages, response there off in total is known as
communication. Any method of communication like words—oral or written, pictures, graphs,
diagrams, etc. may be adopted to communicate. Effective communication is that
communication in which the receiver is understood actually what the sender wants to convey,

71
 and in the same form. ‘Noise’ is something, which has disturbed the effective sending and
receiving of communication.

*Characteristics/features of communication*

1. Co-operative process: it is a process of co-operation because two or more persons are

required for the exchange of message i.e. sender(s) and receiver(s).
2. Two way process: it involves both sending the message and receiving the response to
that message. Communication is not completed unless the receiver of the message has
understood the message and has given his response.
3. Pervasive function: communication is necessary at all levels of management i.e. top,
middle and lower level and also in all the depths of the organisation.
4. Continuous process (circular process): it is a continuous process because transmission
of messages is going on a continuous process.
5. Flows in all directions: communication may flow upward and downward, between
superior and subordinate, horizontally (gang plank) between persons of similar ranks or
diagonally between persons at different levels.

*Advantages/Importance of communication*

1. Facilitates planning: while making plans several ideas, problems, suggestions etc. are
communicated for an effective planning system and so communication facilitates better
planning.
2. Helps in decision making: by providing the required information, needed for making
various decisions communication helps a lot because the quality of decision depends on the
quality of information available with the decision maker.
3. Facilitates co-ordination: flow of communication is in all directions results a better co-
ordination in all level of management as well as all depth of organisation.
4. Classifies authorities and responsibilities of various positions: by way of
communication authority and responsibility of various posts/positions are conveyed (classified)
to the position holder.
5. Improves better relations among superiors and subordinates: by effective
communication misunderstanding between superiors and subordinates can be removed.
Moreover clear and accurate information can be communicated at proper time resulting better
relations between the two.
6. Helps in motivating: communication helps in the process of motivation by sharing of
information, consultation and discussion of various problems for prompt redressed/solution,
quick solution of problems creates satisfaction resulting motivation towards work.
7. Information regarding organisational rules: subordinates should be informed by
communicating them, rules and principles of the organisation and any misunderstanding

72
 regarding there of must also be clarified. This will necessarily improve the acceptance of
organisational rules.
8. Facilitates directing function: communication makes a link between managers and
workforce of the organisation resulting a continuous flow of directions, instructions, orders,
suggestions, problems etc. so it facilitates directing function.
9. Better public relations: by way of communication customers, suppliers, shareholders,
govt. and society may be provided required information. Resulting better co-operation and good
relations among all these groups.
10. Improves efficiency: an effective communication helps in understanding ideas,
instructions or guidelines in a close and clear way and removes all confusions. Resulting better
understanding, better efficiency.

*Process/Steps of communication*

1. Sender: according to this model, the first element is the source of the communication.
The person who initiates the communication process in known as sender, source or
communicator. The sender has some need, information, thought, idea or inform which he wants
too communicate to some other person to achieve some purpose. By initiating the message, the
sender attempts to achieve understanding and a change in the behaviour of the receiver.
2. Encoding or communication symbol: the next element in the process is that of
encoding the information to be transmitted. The sender of information organizes his ideas into a
series of symbols (words, signs, etc.), which, he feels, will communicate to the intended
receiver or receivers. This is known as encoding of message, i.e., converting to communicable
codes which will be understood by the receiver of the message.
3. Message: the next element in the process of communication is message. The message is
the physical form into which the sender encodes the information. The message may be in any
form that could be experienced and understood by one or more of the senses of the receiver.
Speech may be heard, written words may be read and gestures may be seen or felt. Thus, a
message may taken any of the two form i.e. verbal or non verbal. Verbal message is in the form
of word language, while non-verbal would be in the form of gestures like wink, smile, grunt,
frown, warming of hand, shaking of head, etc.
4. Communication channel: the next element in the process of communication is the
channel or the mode of transmission (such as air for spoken words and paper for letters). The
mode of transmission is often inseparable from the message. The channel is the link that
connects th sender and the message. Air, sight and sound are important communication
channels. The receiver must be considered while selecting a channel. Some people respond
better to formal letters or communications, others to the informally spoken words. The channels
of communication which are officially recognized by the organisation are known as formal
channels. For communication to be effective the channel used should be appropriate for the

73
 message as well as the receiver. For an urgent message, telefax, telephone, electronic mail,
telegram, radio, television transmission would be appropriate.
5. Receiver: the next element in the process of communication is the receiver, the person
who receives the message is called receiver. The communication process is incomplete without
the existence of receiver of the message. It is the receiver who receives and tries to understand
the message. If the message does not reach the receiver, communication cannot be said to have
taken place. The socio-demographic and physiographic characteristics of the receivers influence
in selection of an appropriate channel of communication.
6. Decoding: decoding is the process by which the receiver’s draws meaning from the
symbols encoded by the sender. It is affected by the receiver’s past experience, education,
perception, expectations and mutuality of meaning with the sender. The greater the overlap or
commonality of the receiver’s field of experience and sender, the greater success of the
probability of expected communication. A model of communication by Wilbur Schramm. It
illustrates that an individual with significantly different educational or cultural background ahs
to put in greater effort to ensure successful communication.
7. Feedback: after receiving the message, the receiver will take necessary action and send
feedback information to the communicator. Feedback is a reversal of the communication
process in which a reaction to the sender’s message is expressed. The receiver becomes the
sender and feedback goes through the same steps as the original communication. The feedback
is optional and may exist in any degree (from minimal to complete) in any given situation.
Generally, greater the feedback, the more effective the communication process is likely to be.
For example, early feedback will enable the manager (sender) to know if his instructions have
been properly understood and carried out.
Two-way communication takes place when the receiver provides feedback to the sender.
For instance, giving an instruction to a subordinate and receiving it acceptance is an example of
two-way communication. On the other hand, in case of one-way communication, feedback is
totally absent. Here the sender communicates without expecting or getting feedback from the
receiver.
A policy statement from the chief executive is an example of one-way communication.
One-way communication takes less time than two-way communication. In certain situations
one-way communication is more effective to get work from the subordinates. Two-way
communication is superior to one-way communication in the following respects:
(i) Two-way communication is more accurate than one-way communication. The
feedback allows the sender to refine his communication, so that it becomes more precise and
accurate.
(ii) Receiver’s self-confidence is higher in case of two-way communication, as they are
permitted to ask questions and seek clarification from the senders.

However, in case of two-way communication, the sender may feel embarrassed when the
receiver draws his attention to sender’s mistakes and ambiguities.

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8. Noise: surrounding the entire spectrum is the noise that affects the accuracy and fidelity
of the message communicated. Noise is any factor that disturbs, confuses or otherwise interferes
with communication. It can arise at any stage in the communication process. The sender may
not be able to encode the message properly or he may not be properly audible. The message
may get distorted by other sounds in the environment. The receiver may not hear the message,
or comprehend it in a manner not entirely intended by the sender of the message. The channel
also may cerate interference by ‘filtering’, i.e. allowing some information to pass through and
disallowing others. In any case, there is so much of noise or interference in the entire process
that there is every possibility of the communication being distorted.

*Types of communication OR forms of organisational communication*

1. On the basis of relationship: (a) formal communication, (b) informal

communication.
2. On the basis of flow or types of formal communication: (a) downward
communication, (b) upward communication, (c) horizontal communication, (d) diagonal
communication.

Formal communication: it refers to the communication which rakes place on the basis of
organisational relationship formally established by the management. It is used to transmit
official messages within or outside the organisation. It strictly follows the chain of command. It
may be verbal but mostly it is expressed in written form to have a proof.

Informal communication: it refers to the communication which takes place on the basis of
informal or social relations among the people in an organisation. It is developed at its own due
to mutual confidence and relations. Generally it is used to transmit personal message and do not
follow the principle of chain of command. It is mostly expressed in verbal/oral form. It may
take place among the persons having different positions at different level and chain is not a
restriction. Network of informal communication is also known as grapevine.

*Difference between formal and informal communication*

Sr. Basis of Formal Informal (grapevine)

No. difference
1. Meaning The communication, which Communication which takes

75
 takes place following
place independently without
organisational position
following official chain of
established by management.position.
2. Speed Its speed is slow rout through
It travels faster the formal
various levels. communication.
3. Chain of Chain of command is strictly
Chain of command is not
command followed. followed.
4. Fixation of Responsibility can be easily
It is not possible to fix
responsibility fixed. responsibility.
5. Nature of Generally official messages
Generally personal messages
messages are transmitted. are transmitted.
6. System of flow There is a system of flow of
There is no system for flow
formal communication. of communication.
7. Needs served It serves only organisational
It may serve both
needs. organisational and social
needs.
8. Channel of It is mostly expressed in It is mostly expressed in
communicatio written form. verbal form.
n
9. Interpretation Message is correctly Messages may be distorted
of messages interpreted due to written as it flows verbally, between
form. different persons.
10. Source or Source and direction of flow It is difficult to traceout
direction can be easily traced. source and direction of flow.
11. Remorse Due to written form it does Due to verbal form it may
not lead to remorse. lead to remorse.
12. Personal Generally there is no personal Generally there is personal
involvement involvement. involvement.

*Barriers to effective communication*

1. So many levels of management: when the message has go through multiple levels of
management. These levels may become obstacle in flow of communication. It happened when
chain of command is strictly followed.
2. Selective reception: when a part of information is blocked by any person in the channel
of communication it is termed as selective reception. In other words only the selected part is
further exchanged and remaining is blocked. It happens when information provider is of the
view that the information disagrees with in interest.

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3. Language barrier: sometimes sender and receiver of message do not understand the
same language and in that case messages not communicated. Moreover if the pronunciation of
words by sender is not clear it may became an obstacle.
4. Status barrier: the difference is status of sender and receiver may also become obstacle
to effective communication. E.g. subordinates bay pass on interpreted (distorted) information to
their superiors to please them and do not reveal their mistakes.
5. Poor listening skills: sometimes people are poor listeners and they believe that the
information is not enough important to pay attention to it resulting poor communication.
6. Credibility of source: effective flow of communication also depends on trust and
confidence of the receiver on the source of information/message and also on sending channel
(sender).
7. Physical distance of receiver and sender: physical distance between these two may also
become a barrier generally in those circumstances where sender is interested in knowing the
reaction of the receiver quickly. But verbal communication is not possible there.
8. Emotional and psychological barriers: these barriers arise from emotions, attitudes and
social values of the participants. People may refuse to accept the messages affecting them
emotionally.
9. Symbolic barriers: sometimes the some word of language/symbol may carry different
meaning to different parties as per their traditions, customs or religion and in that case
communication will not be an effective communication.
10. Lack of organisational facilities: in some organisations there are no suggestion boxes
regarding complaints and also the subordinate can’t disturb the chain of command. Such lack of
organisational facilities is also barrier in effective communication.
11. Specialization barrier: when a department or a person treats him more specialized, it
will result no attention towards other departments/persons.
12. Complex organisational structure: when organisational structure is of complex nature,
the information may get filtered, modified or lost at different levels before reaching to the last
level.
13. Semantic problems: effective communication does not only include of transmission of
information/idea but also includes that the receiver has understood the information in the same
way as was desired by the sender. E.g. announcement in increase in budget is meant for
increase by installing new plan and new technology machines and plant. But workers may think
that due to increase budget their salary and wages will raise.

*Overcoming communication barriers*

1. Clarity of information: subordinates should be kept informed on policy that affects

them on a regular basis. Clear-cut instructions should be issued and follow-up measures should
be taken to ensure that the instructions are thoroughly understood and are being implemented.

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2. Prompt information: the management should make a practice of passing along the
information promptly to everyone concerned so that action, when required, is not delayed.
3. Creation of proper atmosphere: in particular cases, as for instance, when a boss is
talking to his subordinate, the atmosphere should be peaceful, so that there is effective
communication of instructions and suggestions.
4. Effective listening: the sender must listen to the receiver’s words attentively, so that the
receiver may also listen to the sender at the same time.
5. Feedback: communication should be two-way traffic. There should be some system by
which the workers should be able to convey their suggestions and grievances to the top
management. Two-way communication is also necessary for feedback for the purpose of
control.
6. Effective channels: management should try to cut the roots of the rumours. If the
communication channel is well maintained, there will be no room for rumours, lies, guesses and
misconceptions. Worker should get open doors for any clarification or consideration at all
times. This will also increase the morale of the employees.

*Principles of effective communication*

1. Principle of clarity: the beginning of all communication is some message. The message
must be as clear as possible. No ambiguity should creep into it. The message can be conveyed
properly only if it has been clearly formulated in the mind of the communicator.
2. Principle of objective: the communicator must know clearly the purpose of
communication before actually transmitting the message. The objective may be to obtain
information, give information, initiate action, and change another person’s attitude and so on. If
the purpose of communication is clear it will help in the choice of mode of communication.
3. Principle of understanding the receiver: understanding is the main aim of any
communication. The communication must crate proper understanding in the mind of the
receiver. Thus according to Killian, “communication with an awareness of the total physical
and human setting in which the information will be received. Picture the place of work;
determine the receptivity and understanding levels of the receivers; be aware of social climate
and customs; question the information’s timeliness. Ask what, when and in what manner you
would like to be communicated with if you were in the similar environment and position.
4. Principle of consistency: the message to be communicated should be consistent with
plans, policies, programmes and goals of the enterprise. The message should not be conflicting
with previous communications. It should not crate confusion and chaos in the organisation.
5. Principle of completeness: the message to be communicated must be adequate and
complete, otherwise it will be misunderstood by the receiver. Inadequate communication
delayed action, poor public relations affects the efficiency of the parties to communication.
6. Principle of feedback: this principle calls for communication a two-way process and
providing opportunity for suggestion and criticism. Since the receiver is to accept and carry out

78
 the instructions, his reactions must be known to the sender of message. The latter must consider
the suggestion and criticism of the receiver of information. But feedback principle is often
given a back seat by most managers, which defeats the very purpose of communication.
7. Principle of time: information should be communicated at the right time. The
communicator must consider the timing of communication so that the desired response is
created in the minds of the receivers.

*MOTIVATION*

Introduction:
To the behavioural scientists, the word motivation is something stemming from within a
person. According to them, motivation refers to a dynamic driving force, which stems from
within. It is an “inner striving condition, which activates or moves individual into action and
continues him in the course of action enthusiastically”. Thus, motivation is defined as an inner
state that activates, energizes or moves behaviour towards goals. And, the forces inside the
individual that inspire him to continue work are variously called as wishes, drives, needs etc.
According to Rensis Likert motivation is the “core of management.” Motivation is an
important function performed by manager for actuating the people to work for the
accomplishment of organisational objectives. Issuance of well-conceived instructions and
orders does not mean that they will be followed. A manager has to make appropriate use of
various techniques of motivation to enthuse the employees to follow them. Effective motivation
succeeds not only in having an order accepted but also in gaining a determination to see that it
is executed efficiently and effectively.
Motivation is an effective and dynamic instrument in the hands of a manager for inspiring
the workforce and creating confidence in them. Through the motivation of the workforce,
management creates ‘will to work’ which is necessary for the achievement of organisational
goals and objectives. Motivation is the process of getting the members or the group to pull
weight effectively, to give their loyalty to the group and to carry out properly the purpose of the
organisation.

*Meaning and definition of motivation*

The term ‘motivation’ has its origin in the Latin word “mover” which means to “move”.
Thus, motivation stands for movement. One can get a donkey to move by using a “carrot or a
stick”, with people one can use incentives, or threats or reprimands. However, these only have a
limited effect. These work for a while and then need to be repeated, increased or reinforced to
secure further movement. The term motivation may be defined as “the managerial function of
ascertaining the motives of subordinates and helping them to realize those motives”.

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 According to Dubin motivation could be defined as “the complex of forces starting and
keeping a person at work in an organisation. Motivation is something that moves the person to
action, and continues him in the course of action already initiated”. Motivation refers to the way
a person is enthused at work to intensify his/her desire and willingness to use and channelise
his/her energy for the achievement of organisational objectives. It is something that moves a
person into action wand continue him in the course of action enthusiastically. The role of
motivation is to develop and intensify the desire in every member of the organisation to work
effectively and efficiently in his position.
In the words of Dalton E. McFarland, motivation is the way in which urges, desires,
aspiration, striving or needs direct, control or explain the behaviour of human being”.
Motivation has very close relationship with the behaviour. It explains how and way the human
behaviour is caused. According to McFarland motivation is a form of tension occurring within
individual, with resulting behaviour aimed at reducing, eliminating or diverting the tension.
Understanding the needs and drives and their resulting tensions helps to explain and predict
human behaviour ultimately providing a sound basis for managerial decision and action.” Thus,
motivation is the term, which applies to the entire class of urges, drives, desires, needs and
similar forces.

*Models of motivation*

Maslow’s Need Hierarchy model:

A.H.Maslow developed a theoretical framework for understanding human motivation, which

has been widely acclaimed. According to him motivation arises from the needs and wants of an
individual and drives the people towards action or work by doing which he makes efforts to
fulfill these needs and wants. So the manager should understand the needs and wants of the
people for the purpose of creative motivation. Famous psychologist “A. H. Maslow develop a
hierarchy/frame work for understanding human needs. Mallow proposed two ideas (i) only need
not yet satisfied can influence the behaviour and (ii) needs are arranged a hierarchy of
importance and they follow a definite sequence. The need hierarchy is as follows:

1. Basic physiological needs: the physiological needs relate to the survival and
maintenance of human life. These needs include such things as food, clothing, air, water
and other necessaries of life, which are biological in nature. These needs are primary
needs.
2. Safety and security needs: after satisfying the physiological needs, people want the
assurance of maintaining a given economic level. They want job security, personal bodily
security, security of source of income, provision for old age, insurance against risks, etc.

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3. Social needs: man is a social being. He is, therefore, interested in conversation,
sociability, exchange of feelings and grievances, companionship, recognition,
belongingness, etc.
4. Esteem and status needs: these needs embrace such things as self-confidence,
independence, achievement, competence, knowledge and success. These needs boost the
ego of individual. They are also known as egoistic needs. They are concerned with
prestige and status of the individual.
5. Self-fulfillment needs: the final step under the need priority model is the need for self-
fulfillment or the need to fulfill what a person considers being his mission in life. It
involves realizing one’s potentialities for continued self-development and for being
creative in the broadest senses of the word. After his other needs are fulfilled, a man has
the desire for personal achievement. He wants to do something, which is challenging and
since this challenge gives him enough dash and initiative to work, it is beneficial to him
in particular and to the society in general. The sense of achievement gives him
psychological satisfaction.

Note:
Maslow proposed that all human needs are kept as per rank of importance and human
behaviour is to fulfill its needs as per importance rank and so he continuous in a proper
sequence but after fulfillment of a need another need arise. Moreover satisfied need will no
longer be a motivator and needs and wants are infinity.

Appraisal of Need Hierarchy model:

The need priority model may not apply at all times in all places. Surveys in continental
European countries and Japan have shown that the model does not apply very well to their
managers. Their degrees of satisfaction of needs do not vary according to the need priority
mode. For example, workers in Spain and Belgium felt that their esteem needs are better
satisfied than their security and social needs. Apparently, cultural differences are an important
cause of these differences. Thus, need hierarchy may not follow the sequence postulated by
Maslow. Even if safety need is not satisfied, the egoistic or social need may emerge.
Proposition that one need is satisfied at one time is also of doubtful validity. The
phenomenon of multiple motivation is of great practical importance in understanding the
behaviour of man. Man’s behaviour at any time is mostly guided by multiplicity of motives.
However one or two motives in any situation may be prepotent, while others may be of
secondary importance. Moreover, at different levels of needs, the motivation will be defferent.
Money can act as a motivator only for physiological and social needs, not for satisfying higher
level needs. Employees are enthusiastically motivated by what they are seeking, more than by

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 what they already have. They may react cautiously in order to keep what they already have, but
they move forward with enthusiasm when they are seeking something else. In other words, man
works for bread alone as long as it is not available.
There are always some people in whom, for instance, need for self-esteem seems to be
more prominent then that of love. There are important also creative people in whom the drive
for creativeness seems to be more important. In certain people, the level of operation may be
permanently lower. For instance, a person who has experienced chronic unemployment may
continue to be satisfied for the rest of his life if only he can get enough food. Another cause of
reversal of need hierarchy is that when a need has been satisfied for a long time, it may be
under-valued.

McGregor’s participation model:

Douglas McGregor who set forth in his book “Human Side of Enterprise” two pairs of
assumptions about human beings which he thought were implied by the actions of autocratic
and permissive managers. The first set of assumptions is contained in “Theory X” and the
second set of assumptions in “Theory Y”. It is important to note that these sets of assumptions
were not based on any research, but is intuitive deductions.

1. Theory X:
Theory X’ believes that autocratic managers often make the following assumptions about
their subordinates. Accordingly, the subordinate in general:
(i) Has an inherent dislike for work and will avoid it, if he can;
(ii) Is lazy and avoids responsibility.
(iii) Is indifferent to organisational goals; and
(iv) Prefers to be directed, wishes to avoid responsibility, has relatively little ambition
and wants security above all.
According to McGregor, this is a traditional theory of what workers are like and what
management must do ot motivate them. Workers have to be persuaded and pushed into
performance. This is management’s task. Management can offer rewards to a worker who
shows higher productivity and can punish him if his performance is below standard. This is also
called ‘carrot and stick’ approach to motivation. It suggests that threats of punishment and strict
control are the ways to control the people. McGregor questioned the assumptions of Theory X,
which followed carrot and stick approach to motivation of people and suggested autocratic style
of leadership. He felt that management by direction and control is a questionable method for
motivating such people who’s physiological and safety needs have been satisfied and whose
social esteem and self-actualization needs are becoming important. For such people, Theory Y
seems to be applicable.

2. Theory Y:

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 Managers with Theory Y orientation make the following assumptions about their
subordinates. Accordingly, the subordinate in general:
(i) Does not inherently dislike work. Depending upon controllable conditions, work
may be a source of satisfaction or a source of punishment;
(ii) Will exercise self-direction and self-control in the service of objectives to which he
is committed;
(iii) Commitment to objectives is a function of the rewards associated with their
achievement;
(iv) Learns under proper conditions, not only to accept, but also to seek responsibility;
and
(v) The capacity to exercise a relatively high degree of imagination, ingenuity and
creativity in the solution of organisational problems is widely, not narrowly, distributed in the
population.

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 Theory Y assumes that goals of the organisation and those of the individuals are not
necessarily incongruent. The basic problem in most of the organisations is that of securing
commitment of workers to organisational goals. Worker’s commitment is directly related to the
satisfaction of their needs. Thus, this theory places great emphasis on satisfaction of the needs,
particularly the higher once, of the employees. It does not rely heavily on the use of authority as
an instrument of command and control. It assumes that employees exercise self-direction and
self-control in the direction of the goals to which they feel themselves committed. They could
be motivated by delegation of authority, job enlargement, and management by objectives and
participative management practices.

3. Application of Theory X and Theory Y:

Theory X and theory Y represent two extremes to draw the fencing within which the
organisational man is seen to behave. No man would belong completely to either theory X or
theory Y. each person possesses the traits of both in varying degrees under different situations.
Thus, these theories are important tools in understanding the behaviour of human beings and in
designing the incentive schemes to motivate the employees. Neither of the two sets of
assumptions is applicable fully in all situations and to all types of people.
It has been noted that theory X is more applicable to unskilled and uneducated lower-
level workers who work for the satisfaction of their basic needs of food, clothing and shelter.
Theory Y seems to be more applicable to educated, skilled and professional employees who
understand their responsibility and are self-controlled. However, there can be exceptions. A
lower-level employee may be more responsible and mature than a well-qualified higher-level
employee. The examples of highly placed employees in modern organisations shirking
responsibility are not uncommon. Therefore, the management should use an amalgamation of
both the theories to motivate different employees.

Herzberg’s Motivation-Hygiene Model:

A significant development in motivation was distinction between motivational and

maintenance factors in job situation. A research was conducted by Herzberg and his associates
based on the interview of 200 engineers and accountants who worked for eleven different firms
in Pittsburgh area. These men were asked to recall specific incidents in their experience, which
made them, feel either particularly good or particularly bad about jobs. The findings of the
research were that good feelings in the group under test were keyed to the specific tasks that the
men performed rather than to background factors such as money, security or working conditions
and when they felt bad, it was because of some disturbance on these background factors which
had caused them to believe that they were being treated unfairly. This led to draw a distinction
between what are called as ‘motivators’ and ‘hygiene factors’. To this group of engineers and
accountants, the real motivators were opportunities to become more expert and to handle more
demanding assignments. Hygienie factors served to prevent loss of money and efficiency. Thus,

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hygienie factors provide no motivation to the employees, but the absence of these factors serves
as dissatisfiers.
Some job conditions operate primarily to dissatisfy employees when they are absent, but
their presence does not motivate employees in a strong way. Many of these factors are
traditionally perceived by management as motivators, but the factors are really more potent as
dissatisfiers. They are called maintenance factors in job because they are necessary to maintain
a reasonable level of satisfaction among the also known as dissatisfiers or “hygienie factors”
because they support primarily to build strong motivation and high job satisfaction among the
employees. These conditions are ‘motivational factors’. Herzberg’s maintenance and
motivational factors have been shown in the table

Herzberg’s Maintenance and motivational factors

Sr. Maintenance of Hygienie factors Motivational factors

No.
1. Company policy and administration. Achievement.
2. Technical supervision. Recognition.
3. Inter-personal relations with Advancement.
supervisor.
4. Inter-personal relations with peers. Work itself.
5. Inter-personal relations with Possibility of growth.
subordinates.
6. Salary. Responsibility.
7. Job security.
8. Personal life.
9. Working conditions.
10. Status.

Hygienie factors include wages, fringe benefits, physical conditions and overall company
policy and administration. The presence of these factors at a satisfactory level presents job
dissatisfaction, but they do not provide motivation to the employees. So they are not considered
as motivational factors, but are essential for increasing the productivity of the employees. They
are also known as satisfiers and include such factors as recognition, feeling of accomplishment
and achievement, opportunity of advancement and potential for personal growth, responsibility
and sense of job and individual importance, new experience and challenging work etc.
Herzberg further stated that managers have hitherto been very much concerned with
hygienie factors. As a result, they have not been able to obtain the desired behaviour from
employees. In order to increase the motivation of employees, it is necessary to pay attention to
the satisfiers or motivational factors.

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 Herzberg also said that to-day’s motivators are tomorrow’s hygienes because they stop
influencing the behaviour of persons when they get them. When a person gets one thing, then
something else will motivate him and the need, which has been fulfilled, will have only
negative significance in determining his behaviour. It should also be noted that one’s hygiene
may be the motivator of another. For instance, it is likely that workers in underdeveloped
societies will designate some of the maintenance factors as motivators because their primary
needs have not been fulfilled and they continue to be motivated by these factors.

Comparison with Maslow’s theory:

(a) Similarities: in a broad sense there are some similarities between
Herzberg’s two-factor theory and Maslow’s Hierarchy of need theory
which are as under:
(i) Both Herzberg and Maslow lay stress on the different needs of the employees. Both can be
appropriately classified as content theorists.
(ii) In an advanced society, the lower level needs like food and shelter
as pointed out by Maslow are all satisfied. As such they cease to be
motivators. It is the higher level needs like esteem and self-
actualization, which are more important for the purpose of
motivation. Similarly, according to Herzberg, hygiene factors like
pay, working conditions must be present to provide the necessary
environment for motivation. Once this is done, the motivators like
advancement, responsibilities go into play and actuate the
individual.
But it would be wrong to make much of the aforesaid over-all alikeness. Rather it would
be doing injustice to the pioneers whose originality and deep insight are well recognized a
staircase cannot be equated with a room although basically nearly the same materials may have
been used to build both.

(b) Difference: Herzberg’s model differs from Maslow’s model in respect of the following:

(i) An important point of difference is that the lower level needs of individuals like food,
shelter, and job security are regarded by Maslow as having the power or potency to
motivate them. But to Herzberg these are just hygienie factors; of they are absent, there is
dissatisfaction, but their presence does not by itself provide any motivation. The
motivators in Herzberg’s theory are a class apart from hygiene factors. But all the needs
according to Maslow are motivators, depending on the mental level, in which an
individual is placed.

(ii) Another difference is that Maslow formulated his theory out of his insight, individual
thinking and experience as a psychiatrist, but Herzberg arrived at his findings from the

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responses to questions put by his team of researchers to a specified class of employees, viz.,
engineers and accountants.

(iii) Maslow emphasized the need of human beings for all 24hours of the day whereas;
Herzberg was concerned with the needs of employees in relation to their work and work
environment. So, the claim to universality is stronger in the case of Maslow’s theory than in
that of Herzberg’s theory.

(iv) Again, Maslow’s theory applies to human beings in general including employees of all
categories. But Herzberg’s theory concentrates on the motivation of professional people
including engineers, accountants, agricultural administrators and the like, i.e., persons whose
positions in an organisation are usually higher than rank and file.

Appraisal of Herzberg’s model: Herzberg’s theory provides an insight into the task of
motivation by drawing attention to the importance of job factors which are often overlooked.
Particularly, it shows the value of job enrichment in motivation. However, Herzberg’s theory
has not gone unchallenged. It has been criticized on the following grounds:
(i) Herzberg drew conclusions from a limited study covering engineers and accountants.
Engineers, accountants and other professionals may like responsibility and challenging jobs.
But the general body of workers are motivated by pay and other financial benefits.
(ii) In Herzberg’s study, the interviewees were asked to report exceptionally good or
exceptionally bad moments. This methodology is defective because there is a common bias
among human beings to take more credit for good things and put the blame on others for bad
things.
(iii) Herzberg gave too much emphasis on job enrichment. But job enrichment is not the only
answer. Off-the-job satisfaction of the workers is also very important. Herzberg did not attach
much importance to pay, status of interpersonal relationship, which are generally held as
important contents of satisfaction.

Vroom’s Valence-Expectancy Theory:

(1) Theoretical concepts:

Attacking Herzberg’s two-factor theory, Vroom offered an expectancy approach to the
understanding of motivation. According to him, a person’s motivation towards an action at any

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time would be determined by an individual’s perception that a certain type of action would lead
to a specific outcome and his personal preference for this outcome.
There are three variables of Vroom’s model given in the form of an equation. Since the
mode is multiplicative, all the three variables must have high positive values to imply motivated
performance choices. If any of the variables approaches zero, the probability of motivated
performance approaches zero.
Motivation = Valence*Expectancy*instrumentality
Valence is the strength of an individual’s preference for a reward, expectancy is the
probability that particular action will lead to a desired reward and instrumentality denotes an
individual’s estimate that performance will result in achieving the reward. Thus, if an individual
has a particular goal, some behaviour must be produced in order to achieve that goal. He will
weigh the likelihood that various behaviors will achieve the desired goals and if certain
behaviour is expected to be more successful than others, that particular behaviour will be
preferred by the individual.

(a) Valence (reward preference): it refers to the strength of an individual’s preference for
receiving a reward. It is an expression of the value he places on a goal (outcome or reward). The
value attached to a goal or reward is subjective as it varies from person to person. For instance,
if a young and dynamic employee wants a promotion, has high valence or strength for that
employee. Similarly, a retiring employee may have high valence for reemployment.
People have different valence for various outcomes. The relative valence they attach to
various outcomes is influenced by conditions such as age, education and type of work. The
valence of a person for a goal may be positive or negative depending upon his positive or
negative preference for this goal. If a person is indifferent to an outcome, his valence is zero.
Thus, the total range of valence is from –1 to +1.
(b) Expectancy (Effort-Reward Probability): it refers to the extent, to which the person
believes that his efforts will lead to the first level outcome, i.e., completion of a task.
Expectancy is stated as a probability, i.e., as individual’s estimate of the probability of an
outcome from an action. Since, it is an association between effort and performance, its value
may range from 0 to 1. if the individual feels that chances of achieving an outcome are zero, he
will not even try. On the other hand, if expectancy is higher, the individual will put higher
efforts to achieve the desired outcome.
(c) Instrumentality (performance-Reward Probability): it refers to the probability to which
the performance (first level outcome) will lead to the desired reward (second level outcome).
For instance, an individual wants a promotion and feels that superior performance is very
important in achieving promotion. Superior performance is the first level outcome and
promotion is the second level outcome. The first-level outcome of high performance acquires a
positive valency by virtue of its expected relationship to the preferred second level outcome of
promotion. In other words, superior performance (first-level outcome) will be instrumental in

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obtaining promotion (second level outcome). The value of instrumentality also ranges from 0 to
1, as it is the probability of achieving the desired outcome.
Motivation is the product of valance, expectancy and instrumentality. These three factors
in the expectancy model may exist in an infinite number of combinations depending upon the
range of valence and the degrees of expectancy and instrumentality. The combination that
produces the strongest motivation is high positive valence, high expectancy and high
instrumentality. If all the three are low, the resulting motivation will be weak. In other cases,
motivation will be moderate. Similarly, the strength of avoidance behaviour will be determined
by the negative valence and expectancy and instrumental factors.
As said above, the motivational force will be highest when expectancy, instrumentality
and valence are all high. The management must recognize factors for behavioural modification,
so that these three elements achieve the highest value individually.
A worker may exhibit a poor behaviour due to:
(i) Low effort-performance expectancy: the worker may lack the necessary skills and
training to believe that his extra efforts will lead to better performance. The management could
provide the relationship between efforts and performance.
(ii) Low performance-reward instrumentality relationship: similar performance may
not lead to similar rewards. The reward policy may be inconsistent and may depend upon factor
other than performance, which the worker may not be aware of or may not consider fair. The
management must re-evaluate the appraisal techniques and formulate policies that strengthen
performance-reward relationship as just and equitable.
The important contribution of Vroom’s model is that it explains how the goals of
individuals influence their efforts and that the behaviour individuals select depends upon their
assessment of the probability that the behaviour will successfully lead to the goal. For instance,
all people in an organisation may not place the same value on such job factors as promotion,
high pay, job security and working conditions. In other words, they may rank them differently.
Broom is of the opinion that what is important is the perception and value the individual places,
high value on salary increase and perceives superior performance as instrumental in reaching
that goal. According to broom, this individual will strive towards superior performance in order
to achieve the salary increase. One the other hand, another individual may highly value
promotion and perceive political behaviour as instrumental in achieving it. This individual is
not likely to emphasize superior performance to achieve the goal.
In essence, vroom emphasizes the importance of individual perception and assessment to
organisational behaviour. What is important here is that what the individual perceives as the
consequence of a particular behaviour is far more important than what the manager believes the
individual should perceive. Thus, Vroom’s model attempts to explain how individual’s goals
influence his efforts and like need-based models reveal that individual’s behaviour is goal-
oriented.

The merits of Vroom theory are:

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(i) Basic framework: the Vroom’s model provides a basic framework for interpreting work
motivation as Keith Davis put it. According to Fred Luthans, “the expectancy model is like
marginal analysis in economics. Business people do not actually calculate the point where
marginal ost equals marginal revenue, but it is still a useful concept for the theory of the firm.
The expectancy model attempts to mirror the complex motivational process. From the
theoretical standpoint it seems to be a step in the right direction. It is of value in understanding
organisational behaviour.
(ii) Appreciation of individual differences: it serves as a pathfinder because for the first time
in a systematic way it draws attention to individual differences in motivation. As Koontz, O.
Donnell and Weihrich pointed out: “one of the great attractions of the Vroom model is that it
recognizes the importance of various individual needs and motivations. It does seem more
realistic”.
(iii) Clue to harmonization of individual and organisation goals: it clarifies the relationship
between individual goals and organisational objectives and thus points to the way how the two
can be harmonized. It is thus a step further from management by objectives. Instead of
assuming that satisfaction of a specific need is likely to influence organisational objectives in a
certain way we can find out how important to the employee are: the various first-level outcomes
(organisational objectives) for their attainment, and the expectancies that are held with respect
to the employees ability to influence the first-level outcome. For instance, suppose the
organisation sets a certain standard for production (first-level outcome of organisational goal)
for the purpose of incentive pay, promotion, etc. (second-level outcome). If the workers do not
put forth adequate efforts to achieve the organisational goal, it may be assumed that either (a)
they do not place much value on the second-level outcomes (incentive, promotion); (b) they feel
that their efforts will not lead to the production standard; and (c) they may not believe that if
they achieve the standard, it will be instrumental in getting them higher remuneration or
promotion.
(iv) Contingency approach: indirectly, Broom draws attention to an all-important fact that
there is no one set formula for the motivation of individuals. He looked at effective motivation
not in terms of either a fixed set of human needs or as a uniform configuration of external
motivations. His is the contingency approach, so to speak. In other words, if any method of
motivation is found to be productive, managers should continue it, on the other hand, if it does
not produce the desired results, it should be given up for something better. By measuring and
analyzing the workers’ output managers can get clues to their motivation, identify some of the
important variables and formulate their reward plans accordingly.
(v) Practical utility: according to R.J. House and M.A. Wahba, the Broom model has been
used to predict a wide variety of work-related variables in a number of studies. These include
job effort and performance, organisational practices, managerial motivation, occupational
choice, importance of pay and pay effectiveness, leadership behaviour and leadership
effectiveness.

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 In the opinion of Leon Reinharth and M.A. Wahba, “the expectancy theory has served as
the basis for research in such diverse areas such as decision-making, learning theory, verbal
conditioning, attitudes and organisational behaviour. All these impart a certain amount of
generality and practical utility to the model.
(vi) Popular support: it is said that since the model had been proposed, at least one issue of
every journal in organisational behaviour reported some result on its application in practice.
Alan C. Filley, Robert J. House and Steven Kerr analyzed the numerous studies, more than 32,
from 1962 to 1974 and came to the general conclusion that there was empirical support to the
expectancy theory. Similarly, some of its propositions were confirmed by studies made by T.R.
Mitchell and A. Biglan, who reviewed six cases in the area of industrial psychology; H. G.
Heinemann, III and D. P. Schwab who investigated nine field enquiries in managerial settings
and further M. Wahba and R. House who apprised fourteen investigations also confirmed the
propositions. However, most researchers suggested the need for further study to test some of the
principal variables, on which the model is based.

The demerits of Vroom’s theory:

(i) Lack of concreteness: the generality of the model constitutes its principal weakness. As
Luthans pointed out, “it does not attempt to describe what the content (of motivation) is or what
the individual differences are. Ti indicates only the conceptual determinants of motivation and
how they are related.”
Further, it does not provide specific suggestions on what motivates organisation members
as the Maslow, Harzberg and Alderfer models do.
(ii) Neglect of values: even as a general theory it has been condemned in some quarters as
‘nothing more than a theory of cognitive hedonism which propose that the individual
cognitively chooses the course of action that leads to the greatest degree of pleasure or the
smallest degree of pain’. “Hedonistic cognitions are insufficient to determine a person’s value
system.”
(iii) Little impact on management: apart from the fact that it is a highly complex model and
difficult to understand, its practicability is also open to question. As Lyman Porter, Edward E.
Lawler, III and J. Richard Heckman pointed out; the expectancy model is just a model and no
more. People rarely actually sit down and list their expected outcomes for a contemplated
behaviour, estimate expectancies and valences, multiply and add up the total, unless of course
they are asked to do so by a researcher. That is why its impact on job-settings has been
negligible and influence on managerial action, not much. It has been rightly remarked by
Hamner and organ “the predictive potential of this theory is still largely untested.” A fully
developed test incorporating force, expectancy and instrumentality measures as well as ability
assessment has not yet been offered.
(iv) Weak empirical support: the empirical support for the Vroom model is insignificant and
lacks consistency.

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Alderfer’s Existence-Relatedness-Growth (ERG) Model:

Serious doubts have been expressed about the existence of the five distinct need
categories, which Maslow hypothesized. There seems to be some overlapping between esteem,
social, and physiological needs. Also, the lines between esteem, social, and self-actualization
needs are not entirely clear. With these points in mind, Clayton Alderfer condensed Maslow’s
five need categories into three sets:
(i) Existence need: these include all forms of material and physiological and safety
needs. i.e., Maslow’s first two level needs.
(ii) Relatedness need: this includes all needs that involve relationships with other people
we care about. Thus, the opposite of satisfaction or relatedness needs is emotional distance
rather than hatred. Relatedness needs cover Maslow’s social needs and that of esteem needs
which are derived from other people.
(iii) Growth need: these needs involve persons making creative efforts to achieve full
potential in the existing environment. It is like Maslow’s last level need of self-actualization.

Alderfer also revised Maslow’s theory in three other ways:

(a) He argued that the three need categories form a hierarchy only in the sense of decreasing
concreteness. That is, as we move from, a focus on existence to relatedness to growth needs, the
ways we can satisfy those needs become increasingly abstract.
(b) He recognized that rise in the level of satisfaction of our existence and relatedness needs
may result in decrease concreteness. That is, as we move from, a focus on existence to
relatedness to growth needs, the ways we can satisfy those needs become increasingly abstract.
(c) He reasoned that we are likely to try to first satisfy out most concrete needs and then we
tend to move on to more abstract needs. in this sense, Alderfer sounds somewhat like Maslow,
suggesting a pattern of satisfaction progression-that is, if we can’t satisfy needs at a given level
of abstractness, we “drop back” and again focus on more concrete needs. Thus, if we are unable
to satisfy out growth needs, we again focus on relatedness needs; we can go through cycles,
moving from a focus on one need, then another, and then back again.
Alderfer conceived of ERG needs along a continuum which avoids the implication that
the higher up an individual is in the hierarchy the better it is. Different types on needs can
operate simultaneously. If a particular path towards the satisfaction is blocked, the individual
will both persist along that path and at the same time regress towards more easily satisfied
needs. In this way, Alderfer distinguishes between chronic needs, which persist over a period of
time, and the episode needs, which are situational and can change according to the environment.
Alderfer’s work gives up a sound basis to categories of human needs and to think about the
relationship between need categories.

Comparison and contrast with Maslow theory:

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 There are some similarities as well as dissimilarities between Alderfer’s ERG theory and
Maslow’s theory of Need Hierarchy, which are as follows:
(a) Similarities: (i) both are content theories; (ii) the basic needs emphasized in both are the
same; (iii) the overall structure of need categories is also the same; Alderfer has grouped further
the five needs enunciated by Maslow; and (iv) both deal with upward movement of motivation
according to the hierarchy.
(b) Dissimilarities: (i) Maslow’s main contention is hierarchy of needs, whereas Alderfer
focused more on a continuum of needs than their hierarchical levels; (ii) thus, ERG needs do
not maintain sharp lines of demarcation; (iii) unlike Maslow,l Alderfer also envisaged
downward movement in the hierarchy. In his opinion, there can be not only satisfaction
progression but frustration regression as well; and (iv) Alderfer also recognized the influence of
a man’s personal background and his natural environment. Accordingly, related needs may in
some cases take precedence over existence needs.

Merits of Alderfer’s theory:

(i) Alderfer’s concept of needs is more direct and simple to understand; (ii) it is more flexible
and therefore, more realistic. In the words of Fred Luthans, “most contemporary analyses of
work motivation tend to support Alderfer’s theory over Maslow’s”; (iii) the provision of
backlash of fulfillment of a need accords with reality; and (iv) there is a specific method
indicated in the theory for its testing and validation.
Criticism of Alderfer’s theory:
The fact that the needs are not strictly demarcated goes against the theory. Probably this
is one of the important reasons for lack of popularity of Alderfer’s theory. The term
‘relatedness’ used in the theory is particularly confusing; and like other content theories, it fails
to contribute effectively to human resources management.

McClelland’s three need model:

Each person tends to develop certain motivational drives as a result of his cognitive
pattern and the environment in which he lives. David McClelland gave a model of motivation,
which is based on three types of needs, namely, achievement, power and affiliation. They are
stated below:
(i) Need for achievement (n-Ach): a drive to excel, advance and grow;
(ii) Need for power (n-Pow): a drive to influence others and situations; and
(iii) Need for affiliation (n-Aff): a drive for friendly and close interpersonal
relationships.

Achievement motivation: some people have a compelling drive to succed and they strive for
personal achievement rather than the rewards of success that accompany it. They have a desire
to do something better or more efficiently than it has been done before. This drive is the

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achievement need. From researches into the area of achievement need, McClelland found that
high achievers differentiate themselves from others by their desire to do things better. They
seek situations where they can attain personal responsibility for finding solutions to problems,
where they can receive rapid feedback on their performance so they can set moderately
challenging goals. High achievers are not gamblers; they dislike succeeding by chance. They
prefer the challenge of working at a problem and accepting the personal responsibility for
success or failure, rather than leaving the outcome to chance or the actions of others.

Power motivation: the need for power is a drive to have impact, to be influential, and to
control others, individuals high in nPow enjoy being “in charge”, strive for influence over
others, prefer to be placed into competitive and status-oriented situations, and tend to be more
concerned with gaining influence over others and prestige than with effective performance.
Power-motivated people wish to create an impact on their organisations and are willing to take
risks to do so.

Affiliation motivation: this need has received the least attention of researchers. Affiliation
need can be viewed as the desire to be liked and accepted by others. It is the drive to relate to
people on a social basis. Individuals with a high affiliation motive strive for friendship, prefer
cooperative situations rather than competitive ones, and desire relationships involving a high
degree of mutual understanding.
People possess the above needs in varying degrees. However, one of the needs will tend
to be more characteristic of the individual rather than the other two. Individual with a high need
for achievement thrive on jobs and projects that tax their skills and abilities. Such individuals
are goal-oriented in their activities, seek a challenge and want task relevant feedback.
Individuals with high affiliation needs value interpersonal relationships and exhibit sensitivity
towards other people’s feeling. But individuals with the high power needs seek to dominate,
influence or have control over others.
McClelland’s concept of achievement motivation can be related to Herzberg’s
motivation-hygiene theory. People with high achievement motivation tend to be interested in
the motivators and with low achievement tend to be interested in the motivators and with low
achievement tend to be interested in the motivators and with low achievement tend to be
interested in environmental or hygienie factors. McClelland’s research revealed that managers
generally score high in the need for achievement. In other words, motivating forces for
managers lie in the challenge and potential of the job.

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