FUNDAMENTALS OF

MANAGEMENT:
MANAGEMENT PRACTICES
FROM PAST TO PRESENT
 According to the Harvard Business Review article “ How
Great Managers Manage People” by Paul Michelman:
Sustained business results start with great managers who
defy common management practice at virtually every turn.
 For eg: Most managers select employees acc to skills
needed for the role, but great managers select people for
their talent.
 Great managers resist the temptation to hire people
whose skills are a good match for how a job is already
configured; instead, they seek those whose talent will
redefine how the job is done.
Basic terms
 Organization: two or more people who work
together in a structured way to achieve a specific
goal or set of goals
 Goal: the purpose that an organization strives to
achieve;
 Management: process of planning, organizing,
leading & controlling the work of org members
Management
 Management is the process of coordinating work
activities so that they are completed efficiently and
effectively, with and through other people
 Processes – Planning, Organizing, Leading &
Controlling
 Efficiency – most output from least input
 Effectiveness- activities that help org reach its goals
Some definitions….
 Mary Parker Follett: “Management is the art of
getting things done through people”
 C S George: “Management consists of getting things
done through others. A manager is one who
accomplishes orgn’l objectives by directing the
efforts of others.”
 Henry Fayol: “To manage is to forecast and to
plan, to organize, to command, to co-ordinate and
to control.”
Who are Managers?
 Non-managers: work directly on a job or task and
have no one reporting to them; also called
Operatives
 Not simple anymore!
 Team members now develop plans, make decisions
and monitor their own performance
 Manager – someone who works with and through
other people by coordinating their work activities in
order to accomplish organizational goals
Nature of Management
 Goal-oriented: purpose such as customer
satisfaction, earning profits etc; achieving efficiently
 Continuous process: functions are repeated again
& again. Ongoing process of planning the activities
& execution of plans through organizing, staffing,
directing & controlling
 Co-ordinative force: mgmt is the integration of
human & other resources for effective performance
 Tangible force: its presence is felt in orderliness,
informed emps, higher output etc
 Group-effort: involves group activities and efforts
for pursuit of goals
 Dynamic discipline: multi-disciplinary- derives
knowledge from anthropology, psychology,
sociology etc
 Pervasive: essential for effective perf of any
organized activity anywhere at any time
 Management is a Science as well as an Art:
Art because there are definite principles of
management.
Science because by the application of theses
principles pre-determined objectives can be
achieved
EVOLUTION OF
MANAGEMENT

Historical background
Early Thinking….
 World history – Greek & Roman armies, the Roman
Catholic Church, the East India Company & the
Hudson Bay Company
 Two early strategists: Machiavelli & Sun Tzu
 Machiavellian – although cunning and manipulative
opportunists, believed in virtues of a republic
 Sun Tzu – war strategist
Overview..
 Scientific Management School (Classical approach)
 Modern Management (Henry Fayol)
 Behavioral School
 Management Science School
 Systems Approach
 Contingency Approach
Scientific Management Theory
 Arose in part from the need to increase productivity
 Beginning of 20th century – skilled labor was short;
only way out was to raise the efficiency of workers.
 Frederick W Taylor, Henry L Gantt & Frank and
Lillian Gilbreth devised the body of principles
known as Scientific Management Theory
Taylor’s 4 basic principles
 Development of a true science of management, so
that the best method for performing each task could
be determined.
 Scientific selection of workers, so that each worker
would be given responsibility for the task for which
he/ she was best suited.
 Scientific education & development of the worker.
 Intimate, friendly cooperation between
management and labor.
Basis of Taylor’s Mgmt System
 Production-line time studies instead of traditional
work methods
 Encouraged employers to pay more productive
workers at a higher rate than others, using a
‘scientifically correct’ rate that would benefit both
company and worker- and called it Differential
Rate System.
Scientific Mgmt (contd..) – Henry L.
Gantt
 Worked with Taylor on several projects – but on his
own (Consulting industrial engineer), Gantt began to
reconsider Taylor’s incentive system
 New idea- every worker who finished a day’s
assigned work load would win a 50-cent bonus
 Second – supervisor would earn a bonus for each
worker who reached the daily standard plus an
extra bonus if all the workers reached it
 Devised a charting sys for production scheduling -
“Gantt Chart” – still used; translated into 8 languages –
used in Japan, Spain & the Soviet Union
 Formed the basis for 2 charting devices developed to
assist in planning, managing & controlling complex orgs:
Critical Path Method (CPM), originated by Du Pont and
Program Evaluation & Review Technique (PERT)
developed by the Navy. Lotus 1-2-3 is also a creative
application of the Gantt Chart
Scientific Mgmt (contd..) – The
Gilbreths
 Frank B. and Lillian M. Gilbreth (1868-1924 & 1878-
1972) collaborated on fatigue and motion studies and
focused on ways of promoting the individual worker’s
welfare.
 According to them – motion & fatigue are intertwined-
every motion that was eliminated reduced fatigue
 Using motion picture cameras, they tried to find the most
economical motions for each task in order to upgrade
performance & reduce fatigue
 Gilbreths advocated that motion study would raise
worker morale because of its obvious physical benefits
& because it demonstrated management’s concern for
the worker
Modern Management (Administrative)

 Grew out of need to find guidelines for managing

such complex organizations
 Father- Henry Fayol (1841-1925) was the first one
to investigate managerial behavior and systemize it
–Administrative Management
 Drew a blueprint for a cohesive doctrine of
management
 While Taylor was concerned with organizational
functions, Fayol was interested in the total
organization and focused on management
Fayol’s 14 Principles of Management

 Division of Labor: The most people specialize, the more efficiently they can
perform their work.
 Authority: managers’ formal authority gives them right to command.
 Discipline: orgn’l members need to respect rules & agreements that govern
the org. discipline results from good leadership at all levels of the org, fair
agreements and judiciously enforced penalties for infractions.
 Unity of Command: each emp must receive instructions from only one
person to avoid conflicts in instructions and confusion of authority.
 Unity of Direction: the operations that have the same objective should be
directed by only one manager using one plan.
 Subordination of Individual Interest to the Common Good: in any case the
interests of the emps should not take precedence over the interests of the
org as a whole.
 Remuneration: compensation for work done should be fair to both emps
and employers.
 Centralization: decreasing the role of subordinates in decision-making;
Fayol believed that managers should retain full responsibility but at the
same time give their subordinates enough authority to do their jobs properly
 The Hierarchy: line of authority runs in order of rank from top management
to the lowest level of the enterprise
 Order: materials and people should be in the right place at the right time.
 Equity: managers should be both friendly and fair to their subordinates
 Stability of Staff: a high emp turnover rate undermines the efficient
functioning of an org.
 Initiative: subordinates should be given the freedom to conceive and carry
out their plans, even though some mistakes may result.
 Esprit de Corps: promoting team spirit will give the org a sense of unity2.
Behavioral Theory
 Application of psychology in industry &
management (Hugo Minsterberg, 1912)
 Hawthrone Studies (Elton Mayo & F J
Roethlisberger) at Western Electric Company
(1927-1932)
 Major findings – productivity improved when
illumination was either increased or decreased for a
test group
Various experiments to explain
productivity
 Changing illumination for test groups
 Modifying rest periods
 Shortening work days
 Varying incentive pay systems
Major findings based on
 Morale
 Satisfactory interrelationships
 Effective management (human behaviour, group
behaviour)
Bureaucracy
 Evolved from “The Theory of Social And Economic
Organization” in 1920 given by Max Weber

 A structure with highly routine operating tasks

achieved through specialization, very formalized
rules and regulations, tasks that are grouped into
functional departments, centralized authority, narrow
spans of control and decision making that follows the
chain of command
Elements of Bureaucracy

 Hierarchy
 Division of Work
 Rules, Regulations and Procedures
 Records
 Impersonal Relationships
 Administrative Class
Advantages: Disadvantages:

 Specialization  Rigidity
 Rationality  Impersonality
 Predictability  Displacement of
 Democracy Objectives
 Compartmentalization
of activities
 Empire – Building
 Red tape
Recent contributions
 Peter F Drucker – one of the most influential
management thinkers, wrote 39 books
 Popularized management by his classic book – The
Practice of Management
 His deep concern for productivity – base in
employees are the organization’s most valuable
assets; decision-making should be pushed down
(delegation)
MCQs
 Management Theory like any social theory
provides:
a)The link between past and present
b)Communication role of relevant aspects
c) Stable focus for people’s experiences
d)Challenge for learning
 Scientific Management sought to
a) Determine best methods for performing any task
b) Selecting & training workers
c) Motivating workers
d) All of above
 Glossary
Word Dictionary Meaning Contextual Meaning
Theory A plausible or scientifically Coherent group of
acceptable general assumptions put forth to
principle or body of explain the relationship
principles offered to between two or more
explain phenomenon. observable facts and to
provide a sound basis for
predicting future events.
Synergy The situation in which the Departments that interact
whole is greater than its cooperatively tend to be
parts more productive than
working in isolation
Bureaucracy Government characterized Organization with a
by specialization of legalized formal and
functions hierarchical structure
Word Dictionary Meaning Contextual Meaning
Scientific method Conduct in the manner of The best way of doing a
science or results of task in the most efficient
investigation manner
System A regularly interacting or An organization’s functions
interdependent group of and activities that work
items forming a unified together to fulfill the
whole. Eg a number system purposes of the
organizations