Unit 1 – Historical Development Definition of Management – Science or Art – Management and Administration – Development of Management thought – Contribution of Taylor

and Fayol – Functions of Management – Types of Business Organisation _____________________________________________________________ Evolution of Management Thought - as how the mind controls the human body and its function similar management (mind) controls the various activities ( human body) in the Organisation - Collection of physical equipments, 4 M’s in Organisation – Men, Machine, Materials, Money, leads to nothing. For efficient and profitable functioning it is necessary that all these factors are put to work in a co-ordinated manner. Management Definition Management is the art of getting things done through others. Harold Koontz Def as “ Management is the process of designing and maintaining an environment in which individuals, working together in groups efficiently to accomplish selected aims” • Managers carry out their managerial function • Applies to any kind of Organisation •Applies to managers at all Organisational levels •Aim is to create a surplus •Concerned with productivity, implies effectiveness and efficiency •Mgt of 4 M’s in the Orgn – Men, Machine, Materials & money Characteristics of Management 1. 2. 3. 4. 5. 6. 7. 8. Mgt is Universal Mgt is Purposeful Mgt is integrative Function Mgt is a Social process Mgt is a Multi disciplinary Mgt is a continuous process Mgt is intangible Mgt is an art as well as a science

ADMINISTRATION VS MANAGEMENT S.N o 1 2 3 4 5 Administration Legislative & determination function Determination of objectives & policies Provides a sketch of the enterprise Influenced mainlyby public opinion & other outside force Mainly top level function involves thinking & planning Management Executive Function Implementation of Policies Provides the entire body Influenced mainly by administrative function Mainly middle level function involves doing and acting

Management as an Art • Art involves the practical application of personal skills and knowledge to achieve concrete results • It is a practical way of doing specific things • Art is a personalised process and every artist has his own style. Art is essentially creative and the success of an artist is measured by the results he achieves • Art is a practice based and perfection in it requires continuous practice over a long period of time. a. b. c. d. e. The main elements of an art are – Personal Skills Practical know-how Result orientation Creativity Constant practice aimed at perfection


Management is basically an art because of the following reasons – • A manager applies his knowledge and skills to coordinate the efforts of his people • Mgt seeks to achieve concrete practical results • Mgt is creative. It brings out new situation and converts into output • Effective Mgt lead to realization of Organizational and other goals. Mastery in Mgt requires a sufficiently long period of experience in, managing. Management as Science 1. 2. 3. 4. The essential elements of Science is a systematised body of Knowledge contains underlying principles and theories developed through continuous observation, experimentation and research. Universal applicability Organised body of knowledge can be taught and learnt in class room and outside.

- Mgt is a science becoz it contains all the essential of science Thus, the theory (Science) and practice (art) of Mgt go side by side for the efficient functioning of an organisation. Management as a Profession 1. 2. 3. 4. 5. 6. The essential attribute of a profession A well-defined and organised body of knowledge Learning and Experience Entry restricted by qualification Recognised national body Ethical code of conduct Dominance of service motive


3. Middle Level Mgt – • To interpret and explain the policies framed by top management • To compile and issue detailed instruction regarding operations • To Cooperate among themselves so as to integrate various parts of the division or a department • To motivate supervisory personnel to work for Orgn goals • To develop and train supervisory and operative personnel. 4 . Top Level Mgt – •To analyse. Supervisory / Operating / Lower Level Mgt – •To plan day to day production within the goals lay down by higher authority •To assign jobs to workers and to make arrangement for their training and development •To supervise and control workers and to maintain personal contact with them.Mgt cannot be a full fledged profession due to the following shortcomings • Skills not fully developed • No uniform method of entry •Objective is monetary rather than service •Ethical code is not strict •Associations are not statutory bodies Levels of Management 1. evaluate and deal with th environmental forces •To establish overall long term goals and broad policies of the company including the master budget • To appoint departmental and other key executives •To represent the company to the outside world •To coordinate the activities and efforts of different department 2.

the manager performs routine duties of a legal nature •Leader – Hiring.Taking charge and corrective action when Orgn faces unexpected crises •Resource allocator – Distributing Orgn’s resources like money. policies and actions to outsiders. Decisional Role – Makes important decision •Entrepreneur – Initiating changes or improvements in the activities of the Orgn •Disturbance handler. time. 3.Interacting with other managers outside the orgn to obtain favours and information 2. Informational Role – Serving as a focal point for exchange of Information •Monitor – Seeks and receive information concerning internal and external events so as to gain understanding of the Orgn and its environment. motivating and guiding subordinates •Liason . Interpersonal Role . Training. •Disseminator – Transmits information to subordinates. peers and superiors within the Organisation • Spokesperson – Speaking on behalf of the Orgn and transmitting information on Orgn plans.Roles of a manager ( Mintzberg) 1.Interacting with people inside and outside the Orgn • Figurehead – as a symbolic head of an organisation. equipment and labour •Negotiator – Representing the Orgn in bargaining and negotiations with outsiders and insiders 5 .

delegation. Supervision. problem-solving. measurement. appraisal. Compensation. etc Fixation of standard. Recruitment. Economic growth 5. Without it the resources of production remain resources and never become production. Placement. investigation and research. 1. Selection. Training. scheduling. Sound Management provides the following benefits . Organising Staffing Directing Controlling 6 . communication. budgeting. Leadership. Grouping of Functions. reporting corrective action. etc. programming.Importance of Management Management is the dynamic life –giving element in every business. Stability 6. Optimum utilization of resources 3. Achievement of group goals 2. Human Development 7. recording. Meets the challenge of change Classification of managerial Functions Functions Planning Sub Functions Forecasting. Motivation. innovation. policy making. Promotion. decentralisation. decision making. activity analysis. strategy formulation. task allocation Manpower planning. Fulfillment of social obligations 4. Departmentation. job analysis.

Esprit-de-corps Critical Evaluation 1. 2. To increase efficiency To crystallize the nature of Mgt job To improve research in Mgt To attain social goals Evolution of Management Father of Management – Henry Fayol (1841 – 1925) Henry Fayol contributed 14 principles to Mgt which is widely applied in all the Orgn 1. . Not pay adequate attention to workers 3. 4.Need for Management 1. Discipline 4. Centralisation 9. Remuneration of personnel 8. Subordination of individual interest to general interest 7.Order 11.Equity 12.Stability of Tenure of Personnel 13. Scalar Chain 10.Despite these limitations. Too formal 2. Fayol made a unique and outstanding contribution to Mgt theory. Division of Work 2. Authority and Responsibility 3. Vagueness 4. His principle hinted but did not elaborate that mgt can and should be taught.Initiative 14. 3. Unity of Direction 6. Unity of Command 5. 7 .

Repair boss viii.Mgt a Science based upon certain clearly defined principles Principles of Scientific Management ♦Science not rule of thumb ♦Harmony not discord ♦Co-operation not individualism ♦Maximum output in place of restricted output ♦Development of each individual to his greatest efficiency and prosperity ♦Mental Revolution – Workers and Management. one supervisor cannot be an expert in all aspects of work supervision. Taylor (1856 –1915) “ The art of knowing exactly what you want men to do an see that they do it in the best and cheapest way. Inspector Critical Evaluation 1. Gang boss vi. Differential piece rate system 6. In system of Functional Foremanship in which eight supervisors supervise a workers job. Time and cost clerk iv. Unrealistic Assumptions 8 .” . their fellowmen and towards their employees.W. Route Clerk ii. Shop disciplinarian v. Scientific task Planning 4.Scientific Management Father of Scientific Management F. Instruction card clerk iii. Mechanistic Approach 2. Speed boss vii. Techniques of Scientific Management 1. i. Motion Study 3. Time Study 2. Standardization and simplification 5. Workmen towards their work. Functional foremanship – According to Taylor. Mental attitude of the two parties.

HENRY LAURENCE GANTT (1861 -1919)  Contribution was famous. rest pauses. Relay assembly Test room Experiments ( Working conditions and Productivity). Narrow View 4. Mass interviewing Programme ( Direct Questions).3. shorter working hours. time study  Fatigue Study  Work Simplification – 3 positional promotion plan ( present position. Illumination Experiments ( illumination affected Productivity) 2. piece work. Exploitation of Labour George Elton Mayo (1880 – 1949) Hawthrone Experiments 1. satifactory level Outcomes  Workers working in a group develop bond of relationships  Behaviour at workplace depens on their mental state. Grievances. Impracticable 5. deep rooted disturbance. used for scheduling and control of work. the position to be held before promotion to his present position and the next higher position) 9 .  Task and Bonus plan ( Minimum wages is guaranteed to all workers irrespective of output. Extra wages are paid for extra work) FRANK BUNKER GILBRETH (1868 – 1924)  Motion study. Gantt Chart. 3. emotions and prejudices  Emotional factors play an important role in determining  Human and liberal attitude of supervisor helps in improving performance  Managerial skills and technical skills are not necessary to be a successful leader.

A complete mental revolution on the part of workmen as their duties towards their work towards their fellowmen and towards their duties towards their work towards their fellowmen and towards their employers. which has been developed. training and development of workers for every job • An almost equal division of work and responsibility between management and workmen.F. His ideas are available in his book. • Close co-operation between management and workers to ensure that work is done in accordance with the principles of the science.’ Principles of scientific management’ published in 1911. Taylor’s theory came to be called’ scientific management’. • Maximum output in place of restricted output. • Scientific selection.TAYLOR (1856-1915) Taylor defined management as. Taylor stated that best management was a true science based upon certain clearly defined principles. Taylor’s principles of scientific management are as follows. He exhorted both managers and workers to substitute scientific investigation and knowledge in place of individual involvement and experience in all matters relating to the work done in and organization. • Development of a true science for each element of a man’s job to replace the old rule of thumb method.CONTRIBUTIONS OF TAYLOR AND FAYOL SCIENTIFIC MANAGEMENT.W. “the art of knowing exactly what you want men tie do and seeing that they do it in the best and cheapest way. An equally complete mental 10 . Mental Revolution In its essence scientific management involves a complete mental revolution on the part of both workers and management.” The objective of management should be to secure the maximum prosperity for both the employer and the employees. management entrusted with the planning of work and workmen to look after execution of plans.

Motion study helps to develop the best way of doing a job. Motion Study: It is a systematic and critical study of the movements of both the worker and the machine so as to identify and eliminate unnecessary and wasteful movements. It involves analysis of a job into its constituent elements and recording the time taken in performing each element. each step to be taken in the right place. and when it is to be done. Some of these techniques are given below: • Time Study: Time Study or work measurement is designed to establish the standard time required to carry out a job under specified conditions.revolution in the part of management as to their duties towards fellow managers towards their workers and towards all of their daily problems. materials. It provides answers to question like what work is to be done. to ensure interchangeability of • • • 11 . methods. Standardization helps to simply work. More efficient routing systems and work scheduling were developed for effective planning of work. Scientific Task Planning: It is the technique of forecasting and picturing ahead every step in a long series of separate operations. Taylor suggested the use of time study to lay down “a fair day’s work “ so as to avoid guesswork and certainty in the effort and productivity expected of each worker. quality and cost and working conditions. predetermined standards are laid down regarding the task. time. and each operation to be performed at the optimum efficiency. Standardization and Simplification: under scientific management. how its is to be due where it is to be done. Techniques of scientific Management Taylor developed several techniques these techniques provide the mechanism for implementing his principles. Without this complete mental revolution scientific management does not exist. of the right degree and at the right time.

Workers are expected to do their work strictly according to the route specified by the route clerk.1 B’s Wages =12 units x Rs 1.150 respectively. the two-piece rates are Re. low rate for those failing to achieve the standard output and the second higher rate for those achieving or exceeding the standard output. Standard daily output lay down through time and motion studies in 10 units. Four of them are concerned with the planning of work in the factory office and the other four are involved in the execution of work at the shop floor. The eight foreman and the their respective duties are give below:  Route clerk: The route clerk lays down the sequence or path that each operation is to follow for the completion of a particular job. Under this system two pieces rates are laid down: one.B and other efficient workers will be encouraged to keep their output above standard. For this purpose.50=Rs 18 Due to Significant difference in wages. to ensure uniformity of operations and to facilitate comparisons of efficiency. • Differential Piece rate System: Stressing the need for scientific determination of remuneration for workers. A and other inefficient workers will be under pressure to reach the standard output . He decides the exact route through which every piece of work should travel from machine to machine. • Functional Foremanship: According to Taylor. He suggested the system of functional Foremanship in which eight supervisors supervise a workers job.1 and RS. Suppose. Work Manager 12 . Differential piece rate system is thus better than the straight piece rate system under which the rate per pieces is the same for all workers. one Supervisor cannot be an expert in all aspects of work supervision.parts. he developed the differential piece rate system of wage payment. Taylor suggested that a direct link should be created between remuneration and productivity for motivating workers. The daily wages of two workers A and B who produces 8 and 12 units respectively will be calculated as under: A’s Wages =8 units x Rs 1=Rs.

technical specifications of work etc.He id also    13 .Plant Superintendent Route Clerk Instruction Card Time and Shop GangBoss Speed Boss Repair Inspector Card Clerk Cost Clerk Disciplinarian Boss Officer Shop Workers  Instruction Card Clerk: The job of instruction card clerk is to prepare detailed instructions according to which workers have to perform their jobs. tools and fixtures to be used. Shop Disciplinarian: The main function of the shop disciplinarian is to enforce rules and regulations and maintain discipline among workers . violation of established rules and regulations etc.He deals with the cases of unauthorized absence from duty. Gang Boss: The gang boss is concerned with all preliminary work before the actual operation. He has to assemble the necessary tools and equipment and also arrange the facilities in the plant . insubordination. Time and Cost Clerk: The time and cost clerk frames the timetable for doing various jobs and maintains the records of the costs of work. These instructions relate to matters like the speed of work.

Critical Evaluation Taylor’s ideas caught the imagination of several individuals and organizations in the USA and Europe. However his scientific approach to every aspect of management created suspicion in the minds of workers and trade unions.expected to explain to workers how to set the work in the machine in the most accurate and quickest manner. Repair Boss: His job is to ensure that each worker keeps his machine clean and free form rust. Taylor developed slide rule and other work –saving implements.In order to keep all machines and tools in perfect working order it is necessary that all standards established for an maintenance of machines and their accessories are rigidly maintained. Scientific management has been criticized on the following grounds: 14 . They feared that working harder and faster might eventually lead to exhaustion of all available jobs and retrenchment.He developed high speed steel for metal cutting and designed better shovels. Inspector: It is the responsibility of the inspector to see that the work is performed in accordance with the quality standards laid down by the office.In order to get the work complete in the specified time he should see that the workers operate at the right speed and in accordance with the specifications laid down in advance. shoveling iron ore and coal and for metal cutting . and that he oils and treats the machine properly .   High Speed Steel: Taylor conducted systematic experiments ton improve the operational efficiency of tools and equipment for pig iron handling. These improvements led to tremendous increase in labour productivity besides reducing physical strain and effort on the part of workers.  Speed Boss: the speed boss is responsible for ensuring that the work is done well in time . Scientific management led to tremendous increase in productivity and wages.

For e. Unrealistic Assumptions: Scientific Management is based on the assumption that people are rational and they are motivated by material gains. Specialization and standardization make the job dull and monotonous. Latter experience has revealed that financial gain is not the only things that matter. Workers also want job satisfaction. According the Peter Drucker Scientific management is one of 15 . Scientific management was developed by engineers and scientists and their concern for efficiency led to better methods and tools. Narrow View: Scientific management is quite limited in scope. iv. iii. As a consequence management became the study of shop management while the more general aspects were overlooked. Taylor made a lasting contribution to making jobs and their management more efficient and productive. Too much emphasis is placed on technical aspects of work ignoring the human side. as a theory of industrial engineering . Mechanistic Approach: The main criticism is that scientific management ignores the human element in production and is devoid of a human touch. It treats workers as factors of production and not as human beings.i. planning cannot fully be separated from doing because these are two sides of the same job and are not different jobs.g. Exploitation of labour :In the name of increasing efficiency workers were forced to speed up affecting their physical and mental health. Similarly functional foremanship is likely to create problems because it violates the principle of unity of command. Taylor and his associates concentrated on physical and economic needs and overlooked the social and ego needs of people. Therefore Taylor and his associates were ridiculed as efficiency experts and time study analysis. `In final analysis. Many contributions of Taylor have stood the test of time. v.It does not with management of the total organization. Scientific management has thus been described. Impracticable: Many ideas of Taylor are said to be infeasible in practice. participation and recognition. Taylor focused attention completely on efficiency at the shop floor. ii.

statistics)  Managerial (Planning. tools. coordinating and controlling) Elements of Management Fayol classified the elements or functions of management as follows:  Planning (to foresee and provide means for the future)  Organizing (to provide a business everything useful to its functioning raw materials. Taylor laid the foundations of management as science. commanding. HENRI FAYOL (1841-1925) Fayol was a French mining engineer and chief executive. Without it a real study of human beings at work would be impossible. organizing. It was published in 1949 as General and Industrial Management. selling and exchange)  Financial (Search for and optimum use of capital)  Security (Protection of property and persons)  Accounting (Record keeping. He published his famous book Administration Industrielle et Generale in 1916 which was translated into English in1929. Fayol’s contribution to management can be classified into four categories: Classification of Business Activities According to Fayol all activities of a business enterprise could be divided into six groups:  Technical (Production or manufacturing)  Commercial (Buying. costing.the great liberating and pioneering insights. capital and personnel)  Commanding (maintaining activity among personnel)  Coordinating (unifying and harmonizing all activity and efforts)  Controlling (seeing that everything occurs in conformity with established rules and expressed command) Universal Principles of Management 16 . This book is now considered to be one of the best classics of management.

belonging exclusively to the function performed)  Special knowledge (peculiar to the function being performed)  Experience (knowledge arising from work proper) Evaluation of Fayol’s Work Henri Fayol made outstanding contribution to management thought. the Human Problem of 17 . tact and dignity)  General education (general acquaintance with matters not. He made a clear distinction between operative activities and managerial activities . Fayol’s work has been criticized on several kinds.He clearly specified the functions of management by a systematic analysis of management process. He pointed out that these principles have by and large universal application. Managerial Qualities and Training Fayol identified the following qualities of an effective manager:  Physical (health.g. One of the greatest contributions of fayol is that his ideas paved the way for the development of the theory of management. There is a vagueness and superficiality about some of his terms and definitions. This isolation and analysis of management as a separate discipline was his original contribution to the body of management theory. his theory is said to be too formal. judegement and adaptability)  Moral (energy. He was father of management principles many of which have stood the test of time.He published several books and papers e. and he did not pay adequate attention to workers. willingness to accept responsibility.vigour and address)  Mental (ability to understand and learn. Fayol firmly advocated that management should be formally taught. he also hinted but did not elaborate that management can and should be taught. loyalty.Fayol gave fourteen basic principles of management. GEORGE ELTON MAYO (1880-1949) Elton Mayo was professor of industrial psychology at the Harvard Business School . He developed a framework for further study and research. initiative. Fayol cautioned that these principles are flexible guidelines and should not be considered as rigid rules. firmness.

Hawthorne Experiments • Illumination Experiments: Workers were divided into two group was placed in room where lighting remained constant . Their ideas and suggestions were sought and in some cases. They developed a common purpose and the work team became cohesive. production increased in both the rooms. They had the opportunity to express their viewpoints and concerns to the supervisors. working conditions. Contrary to the hypothesis of scientific management.A small group of six female workers was asked to work in a separate room. Initially these interviews were conducted through direct questioning. As there was freedom of work they developed a sense of belonging and responsibility. Therefore they worked faster and better than they ever had in their lives. supervision and the company.The other group was placed in a different room where lighting was varied. Training for Human Relations (1949) and many more books. Relay Assembly Test Room Experiments: Taking a clue form illumination experiments the researchers began these experiments to find out the relationship between working conditions and productivity . Mass Interviewing Program: The researchers concluded thousands of interviews to determine the attitudes of employees towards their job. shorter working hour’s . The output of the group to a record level. which affected productivity. Later on a non directive approach was adopted with interviewer assuming a passive role. The Social Problems Of an Industrial Organization (1945). they were actually allowed to take decisions.The girls were consulted before each change was introduced. During their course of experiments a series of changes were introduced such as piecework. • • 18 . The researchers concluded that productivity increased due to a change in the girl’s attitudes towards work and their work groups. These experiments revealed that there was something more than illumination.an Industrial Civilizations (1933). rest pauses. Management and Morale (1941). Their relationship with the supervisor became close and friendly.

Mayo and his associates derived the following conclusions from Hawthorne experiments:  Physical factors do not materially influence workers behavior and performance. Fourteen workers constituted the work group on piecework basis. As a result no body attempted to attain official production targets .  Worker’s complaints are not necessarily objective statements of facts. The group was restricting the output of individual workers through various forms of social pressures. • Bank Wiring Observation Room Study: This study was conducted to analyze the functioning of a small group and its impact on the behavior of individual workers.The main findings of the program were as follows:  Merely giving a person an opportunity to talk and air his grievances has a beneficial effect on his a moral. The result was different. The hypothesis was that each worker would produce more to earn more. 19 .  A worker is satisfied or dissatisfied not in terms of any objective frame of reference but rather in terms of how he regards his social status in the firms and what he feels he is entitled to in the way of rewards. They are often symptoms of more deep-rooted disturbances.The study revealed the influence of the informal group on individual behavior and performance.  Workers are influenced in their demands by experience both inside and outside the factory. The group had seta production norm and any workers.

Human factor is the most important element in organizations.  The experiments minimized the affects of economic incentives for no justifiable reason and elevated interpersonal relations to a point of primary significance.  Psychological and social factors like sense of security. The Hawthorne Experiment led to a new image of the worker and the work place. Emphasis began to be placed on interpersonal relations and group behavior. belonging etc exercise significant influences on productivity and performance. The studies suffered from clinical bias.  An organization is a social system much more than a formal arrangement or structure of functions. He/she responds to the total work situation. recognition.  Informal leaders exercise a greater influence than formal leaders on workers attitudes and performance. 20 .  Social norms and informal group determines the behaviors and efficiency of workers. which discounted theory and emphasized empirical observation. A worker is not merely an economic man motivated solely by pay. There was remarkable change in the teaching and practice of management. Human factor became the focus of management theory and practice. Workers do not react as individuals but as members of a group.  Mayo and his associates ignored the total social situation within an organization and the wider social background. Criticism  The research methodology employed in these studies has been questioned. Most of the studies were based upon a relatively few observations of small samples of human being at work.

increased productivity and morale were due to the special attention given to the employees. in different organizations to improve managerial efficiency. These principles are basic truths. The Hawthorne Effect. i. 6. Another merit of this approach is that it focuses attentions on what managers actually do. Managers can be developed through formal education and training. 4. APPROACHES TO MANAGEMENT Modern management has developed through several stages or approaches. From the experience of managers in different organizations. Management is a process consisting of interrelated functions performed to achieve the desired goals. which implies that. Classical Approach 2. 21 . which is necessary to improve the art of management. Therefore manager’s use and control economic rewards.. principles or guidelines can be derived. System Approach 5. It provides a foundation for further research in management. Contingency Approach The Classical Approach The classical or empirical approach is based on the following tenets: 1. It highlights the universal nature of management. Management Science Approach 4. which can be applied. 5. functions of management. IT views management as distinct discipline based on certain principles. These approaches to the study of management may be classified as under: 1. Theoretical research into management helps to develop a body of knowledge. 2.e.  The experiments had a pro management bias. People are motivated mainly by incentives and penalties. Behavioral Approach 3. 3. They imply that management is always completely logical whereas workers are largely driven by emotions and the need to feel a sense of belonging. The classical approach offers a convenient framework for the education and training of future managers.

Mooney A.Reiley and several other pioneers made significant contributions towards the development of the classical approach. 2. Kurt Levin and others developed the fields of Group Dynamics and organization Behaviors. 22 . It is much more a social system of interpersonal and intergroups relations.) to managerial problems. and (c) bureaucracy. at the cost of socio-psychological issues in management. sociology.F. Later on Keith Davis. The main propositions of this approach are: 1. Henri Fayol. etc.The classical approach. 3. and Rensis Likert expended the findings of Hawthorne Experiments and launched the Human Relation Movement. suffers from several limitations. anthropology.Moslow. the validity and universality of management principles is doubtful due to environmental changed Thirdly.C. The focus is on technical and economic aspects. There are three main braches of classical theory –(a) scientific management. A business organization is not merely a techno-economic system. Behavioral Sciences Approach The Hawthorne Experiments conducted by Elton Mayo and his team laid the foundations of behavioral sciences approach. Behavioral sciences approach involves the application of knowledge drawn from behavioral sciences (psychology. which undermines the role of human factor in management. The attitudes and performance of an employee are dominated by the social group to which he belongs. 4. F. L. J. Members of and organization behave not as individuals but as members of some group. Secondly. as two managerial situations are never identical.W Taylor. however. Management must understand and develop harmonious interpersonal relations among his subordinates. Max Weber. Chester Bernard. Several pioneers such as A. Frederick Herzberg.D. Social and psychological incentives exercise a greater influence on employee motivation than working a conditions and economic rewards. First. there is a danger in relying too much on past experience.H. it is a mechanical approach. There should be harmony between human needs and organizational goals.Douglas McGreger. (b) Administrative theory.Urwick.

not succeed in substituting new concepts. Human relations movement seeks to manipulate and exploit the emotions of employees for the benefit of the organization by providing a false sense of happiness or satisfaction. Motivation. employee motivation may be low if they feel underpaid. Despite cordial interpersonal relations. Management requires social skills to make employees feel a part of the organization." Behavioral approach is much disciplinary. work designs. It has made significant contributions to our understanding of people at work and groups in organizations. First. human relations put all the stress on interpersonal relations and the informal group. The movement undermines the role of economic rewards.that happy worker are more productive workers. however. participative leadership is more productive than task centered leadership.5. Human relations movement is based on the assumption. culture of people. Behavioral approach has contributed new ideas for more effective management. leadership. There is in fact no direct correlation between job satisfaction and productivity. Therefore. Employees are capable of self-direction and control. It is. As a result there was a tendency for human relation to degenerate into mere slogans which become and alibi for having no management policy in respect to the human organization. Its starting point was in individual psychology rather than in the analysis of worker and work and work. It recognizes and organization as a social organism subject to the attitudes. group dynamics and participation are the main concepts of behavioral sciences approach. Social environment may fail to motivate employees if they find their find their jobs highly structured and monotonous. It ignores the wider environmental issues inside and outside an organization. Criticism i. it lacks the precision of classical theory because a human behavior is unpredictable. 6. 23 .” The theory of human relations freed management from the domination of viciously wrong ides. iv. not free from limitations. iii. According to Ducker. ii. but it did.

The quality of managerial decisions determines organizational efficiency. its application in practice is very difficult because it requires fundamental changes in the thinking and attitudes the world outside it has been overlooked in the neo-classical theory. A model is simplified representation of real life situation. Its distinguishing features are given below: (1) Rational decision-making. The use of computers has been the driving force n the development of the management science approach.Secondly. Several mathematicians. James March. e. Different variables are quantified and expressed as and equation. Fourthly. decision theory approach. its conclusions lack scientific validity and suffer from a clinical bias. It involves the application of sophisticated quantitative/mathematical techniques for solving managerial problems. Therefore.Churchman. The management science approach differs from the classical and behavioral approaches in several ways.Simon. Therefore. engineers and economists like Herbert A. management information system and other techniques should be used for making rational decisions. a management decision determines organizational efficiency. quantitative approach. The computer can handle in minutes extremely complex problems with an 24 . It reduces a managerial decision to a mathematical form so that decision-making process can be simulated and evaluated before the actual decision is made. a manager can test different values f each variable until and acceptable solution is found. An organization is considered a decision- making unit and the main job of a manager is to make decisions and solve problems. W. It utilizes mathematical symbols and relationships. R. mathematical approach. It avoids the time and cost constraints .Cyert. Its findings are tentative. But great care is required to ensure that all material relationship. (2) Mathematical models. constraints and variables are incorporated in the model. Von Newman. Thirdly.g. management is much wider than organizational behavior. Russel Ackoff made significant contributions to this approach. operations research approach. Management Science or Mathematical Approach The management science approach was evolved after the Second World War. etc. This approach is known by several names.M.of trial and error.C. (3) Computer applications. With the help of a mathematical model.

Decision-making is only a part of management. It transforms these inputs and returns the output into the environment in the form of super system.. These elements are arranged. Trist. (2) As a system an organization draws inputs (energy. As the main focus of the management science approach is on scientific decision-making. J. However it has made little contribution in the areas of organizing staffing.Rosenzweig.A.) from its environment. like cost reduction.Kast. Many pioneers such as E. A. The management science approach has given effective tools to solve problems of planning and control.Kahn. (Environment). return on investment. The approach covers only a part of the manger’s job. etc. Moreover.L.Johnson. materials. motivation and leader ship.K.E. R.L.Rice. information. schedules and deadlines. The methods and techniques developed under it are being increasingly used for managerial decision-making. etc.E. The management science approach has made a significant impact on the practice of management. F. R. models are evaluated for effectiveness against the set criteria. The fundamental features of the systems approach are as follows. It overstresses decisional roles of manager at the cost of interpersonal and informational roles. mathematical models and techniques are many times far from the realities of the management situations. Daniel Katz. This approach has contributed a lot in developing orderly thinking in management leading to more exactness. This is called’ synergy’. The Systems Approach The systems approach to management was developed during the late 1950s. as it cannot effectively deal with interpersonal and group relationships. These elements are arranged orderly according to some scheme such that the whole is more than the sum of the parts. and Kenneth Boulding have mode significant contributions to this approach. (4) Evaluation criteria. (1) An organization is a system consisting of may interrelate and interdependent parts or sub-systems.immense volume of data and also calculate numerous variations in the solution. 25 .

An organization operates in a dynamic environment. (4) Organization is an open system and it interacts with its environment.(3) Every system is part of super system (environment). (5) Management is expected to regulate and adjust the system to secure better performance. This multivariate aspect of management suggests that there is no simple cause and effect relationship. Organizations are open systems. Systems are of two types: closed system and open system. which cannot be predicted with certainty. ENVIRONMENT INPUTS Money Manpower services Machinery Material Method FEEDBACK TRANSFORMATION OUTPUTS Goods & Employment Taxes Others Systems approach is an improvement over classical and neoclassical theories as it is closer to reality. Which are interrelated and interdependent. A closed system has no interaction with the outside world while and open system continually interacts with its environment. All living system is open system. The traditional theorists viewed organization as a closed system while modern theorists treat it as open 26 . It is also a dynamic system as the equilibrium in it is always changing. it is probabilistic. Therefore. Management involves taking into account many variables. (6) Management is multidisciplinary as is a draw and integrates knowledge from various disciplines. Because they consist of people.

Nature and type of the process used to produce goods and services.Burns. Systems approach focuses on dynamic interdependency between specialized functions. In other word. Systems approach suggests that the internal functioning of an organization must be consistent with the needs of its members and the demands of the changing environment.Thompson And Henry Mintzberg have made significant contributions to the contingency approach.W. The basic idea of this approach is that no management technique or theory is appropriate in all situations.Stalker. systems concepts are said to be abstract and vague. however. First. Systems approach. 27 . J. It provides a better conceptual framework for analyzing and understanding organizations and their management. G. These include.Lawrence. It becomes complicated and it is not clear what to do to effect the desired change in the system. Contingency Approach The contingency approach to management to management emerge from the real life experience of managers who found that no single approach worked consistently in every situation. social technological and political factors influencing the organization. The system approach highlights the multidimensional and multidisciplinary nature of management. External environment comprises economic. suffers from some drawbacks. J. concept of wholism constitutes the core of systems theory. It stresses that managers should avoid analyzing problems in isolation and should adopt and integrated approach. Thus.M. Internal environment or state of the organization refers to various constraints and resources that are available. Nature of tasks performed by individual workers. Secondly. (1) Technological constraints. Charles Perrow. The main determinants of a contingency are related to the external and internal environments of an organization. managerial practices and styles will differ according to the particular circumstances of the situation (contingency).D. It is conductive to a better understanding of the complicated interlocking network of institutions that constitute the business system. P. (2) Task constraints. It takes much wider and overall perspective of organizational functioning. however. John Woodward.Lorsch. too many sub-systems and interdependence among them make the task of manager very difficult. T.system.R.

The suitable design should be determined keeping.(3) People constraints. The contingency approach may be viewed as ‘if then’ approach to management In fig 3. Management variables THEN IF Environment variables 28 . peopleoriented style may succeed in given situation but task-orientation may be more effective in another situation. • An organization interacts with its environment and must. For example. in view the size. There. What managers do depends upon the circumstances of the particular situation. managers should sharpen their diagnostic skills to anticipate and comprehend and comprehend the environmental changes. There is no one best way of managing an organization. adapt itself to environmental changes. technology. approach are as follows: • Management is entirely situational.2 horizontal axis represents’ if’ environmental variable while’ then’(management practices) are shown on vertical axis. Effective management requires a proper match between the two types of variables. Types of individuals employed and their levels of competences. • No organizational design can be suitable for all situations. • Success in management depends upon the ability to cope with environmental demands. • Management style and proactive should match the requirements of the situation. people and environment of the enterprise. therefore. The main features of the contingency.

Contingency theory has. to advance the 29 . This theory emphasizes that the best way to lead. of dried principles to act upon. and (d) implement the choice and review program. however. There are no universal principles to be applied in all situations. management may adopt the following process:(a) Analyze and understand the particular situation. (c) make the right choice by matching the approach with the situation. Contingency theory is practical and realistic and offers and explanation of the realities of manager’s job. been criticized on several ground. It questions the universal validity of management principles and practices. organize and conduct managerial activities varies with situation.The contingency approach is an extended and improved version of the system approach. which is most suitable in that particular situation.Reaction or proaction . . (b) examine the validity of alternative approaches to the situation at hand. The contingency approach advocates comparative analysis of organizations to bring about a fit between management system and environment. plan. The main advantage of this theory is that it compels us to be aware of complexity in every situation and forces us to take an active and dynamic role in determining what best would work in each case. ‘it all depends upon the situation’ confuses management. it lacks a sound theoretical base. SOCIAL RESPONSIBILITY AND ETHICS SOCIAL RESPONSIVENESS – The ability of a corporation to elate its operations and policies to the social environment in ways that are mutually beneficial to the company and to society. Managers must analyze different situations and use the best approach. Secondly. A manager has to think through all possible alternatives as he has no cut.Criteria on behaviour Def .The role of government . It avoids value judgments and exhorts managers to be innovative and creative.The influence of values and performance . First. In order to operationally the contingency theory. Peter Drucker “ Social Responsibility requires managers to consider whether their action is likely to promote the public good.

As business grow in size and power. Some of the forces are • Consumerism • Trade Union • Public Opinion • Enlightened Self Interest • Professionalisation • Trusteeship Responsibility of business to perform its basic economic function of producing and supplying products and services in the most efficient manner so as to maximize profits. Social Responsibility of Business 30 ..basic beliefs of our society.” Society has become increasingly aware of the interdependence between the business and its environment. definable domain of company’s activities that have social impact. society expects more from them several forces have led to the development of the concept of social Responsibility. strength and harmony.” The Social Audit The Social audit has been defined as “ a commitment to systematic assessment of and reporting on some meaningful. to contribute to its stability.

with moral duty and obligation. . . Business Ethics is concerned with truth and justice and has a variety of aspects such as expectations of society. public 31 .Accounting ethics pertains to the code that guides the Professional conduct of accountants.Personal Ethics has been referred to as “ the rules by which an individual lives his or her personal life.SHARE HOLDERS OTHERS EMPLOYE ES BUSINESS COMMUN ITY CUSTOME RS GOVERN MENT Ethics in Managing .Ethics is defined as the discipline dealing with what is good and bad. advertising. fair competition.

Social responsibilities.Theory of justice demands that decision makers be guided by fairness and equity.relations. reporting activities of the committee to the board of directors 2 Factors that raise Ethical Standards 1. Rewarding compliance and punishing violations 7. Business Organisation 32 . Communicating the code to all members of the Organization 4. Consumer autonomy and Corporate behaviour in the home country as well as abroad. dealing with gray areas 3. Ethical Theories . Public disclosure and publicity 2. Reviewing and updating the code 8. or rules that guide behaviour. principles.Theory based on rights holds that all people have basic rights. Enforcing the Code 6. . By establishing appropriate company policy or a code of Ethics 2.Utilitarian Theory suggests that plans and actions should be evaluated by their consequences. This can be accomplished in 3 ways1.The increased concern of a well informed public. holding regular meeting to discuss ethical issues 2. Institutionalizing Ethics This means applying and integrating ethical concepts into daily action. By teaching ethics in Management development programs A code is a statement of Policies. as well as impartiality. By using a formally appointed ethics committee 3. Checking for possible violations of the Code 5. . The functions of Ethics Committee includes1.

Quality product 7.An Organisation is a group of people working together to achieve a common goal. Flexible business Partnership – two or more persons come together and start a business with their own funds. the parties agree to share the profits as well as bear the losses in the agreed proportion. Types of Organisation 1. Jointstock Company – Private Ltd Company & Public Ltd Company 4. Orgaisation exists to achieve goals that individuals can not achieve on their own. employs labour and machines. Less expenditure per partner is involved in forming partnership Organisation 5. Simplest form of business 2. The formation and management of partnership organization is governed by the Indian Partnership Act. Merits 1. 1932. greater personal contacts of the partners gives more customer base and benefits 3. Co operative Enterprises 5. Individual uses his own skill in the management of affairs and is solely responsible for the good or bad result of its operation and working Merits – 1. The Organisation brings men and material resources together for fulfilling the goals of enterprises. Personal Care 6. Quick decision 4. Sole proprietorship / Individual 2. Persons of different skills and abilities can work for betterment of Organisation 4. Maximum Profit 5. Organisation is grouping of activities and putting under different departments according to their functions. Least legal complication 3. Loss will be divided among the partners 33 . Partnership 3. Minimum wastage 8. Public Enterprises / State ownership Sole proprietorship – the individual entrepreneur supplies the entire capital. Has larger financial resources 2.

Features 1. Public Ltd Company – the minimum number of members required are 7 and there is no upper limit. voluntarily associate together as human beings. take advantage of economies of scale in production because management can employ specialized labour. Open Membership 3. Voluntary Organisation 2. Merits 1. The company is registered under Indian Company act 1956. not affected by the retirement of any share holder hence the existence of Organisation is permanent in nature. Private Ltd Company – can be established with two to fifty members. Such companies offer shares to general public. Democratic Management 5. creed and religion. which results in economy and efficiency. Co-operative Enterprises – Co-operation is a form of Organisation where persons irrespective of caste. When this type of Organisation expands beyond certain limit. It protects the interest of consumer as well as that of small producers. it can restrict its liability by registering the firm as a limited company. The shareholders bears no risk as the liability is limited 2. The company is governed by an elected body called board of directors. Not profit oriented 34 . 5. Common purpose / Interest 4. can use latest machinery and thus can achieve large scale production at low cost. It is based on the democratic principles and functions for the welfare of the public at large. 4. large scale business can be undertaken 3. works on democratic principles. Public Ltd companies are supervised and controlled by the Government to protect the interest of Share holder public.Joint Stock Company – Capital is contributed by a large number of person in the form of shares of different values. The maximum number of membership is limited to 50.

Explain the nature and scope of Management Discuss the contribution of Henry Fayol to Management. Discuss the contribution of F.Mention the Function of Management 11. 5. 3. Mention the different level of management with its skills required 10. Explain Esprit de corps 9. Comment Explain Functions of Management.Difference between Sole proprietorship and partnership 13.Difference between administration and Management 14. Define Social Responsibility 4. Mention the elements of Art 15. Explain the different types of Business Organisation Explain the contribution of Elton Mayo’s – Hawthrone Experiments Is mgt a profession – discuss Explain the role of Manager 35 . Define Productivity 7. 9. Mention various functions of Management 3. Mention the three promotional plans of Gilbreth PART B 1.Mgt cannot be a full fledged profession due to certain shortcoming – mention 16. 6. 4. Mention the skills required at each level of Management 8. Define Management 2. 8. Define Objectives 6.W. 2. 7.Define Functional Foremanship 12. What is ethics in Business 5.Taylor to Management Is Management art or Science.UNIT 1 PART A 1.

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