FULL NOTES ON EDUCATIONAL MANAGEMENT AND

ADMINISTRATION

What is Management?
Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because it is the
management which helps and directs the various efforts towards a definite purpose. According to
Harold Koontz, “Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which people can perform
and individuals and can co-operate towards attainment of group goals”. According to F.W.
Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the
best and cheapest way”.

Management is a purposive activity. It is something that directs group efforts towards the
attainment of certain pre - determined goals. It is the process of working with and through others
to effectively achieve the goals of the organization, by efficiently using limited resources in the
changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one
enterprise it may be launching of new products by conducting market surveys and for other it
may be profit maximization by minimizing cost.

Management involves creating an internal environment: - It is the management which puts into
use the various factors of production. Therefore, it is the responsibility of management to create
such conditions which are conducive to maximum efforts so that people are able to perform their
task efficiently and effectively. It includes ensuring availability of raw materials, determination
of wages and salaries, formulation of rules & regulations etc.

Therefore, we can say that good management includes both being effective and efficient. Being
effective means doing the appropriate task i.e, fitting the square pegs in square holes and round
pegs in round holes. Being efficient means doing the task correctly, at least possible cost with
minimum wastage of resources.

Management can be defined in detail in following categories :

1. Management as a Process
2. Management as an Activity
3. Management as a Discipline
4. Management as a Group
5. Management as a Science
6. Management as an Art
7. jManagement as a Profession
Management as a Process
As a process, management refers to a series of inter-related functions. It is the process by which
management creates, operates and directs purposive organization through systematic,
coordinated and co-operated human efforts, according to George R. Terry, “Management is a
distinct process consisting of planning, organizing, actuating and controlling, performed to
determine and accomplish stated objective by the use of human beings and other resources”. As a
process, management consists of three aspects:

1. Management is a social process - Since human factor is most important among the other
factors, therefore management is concerned with developing relationship among people.
It is the duty of management to make interaction between people - productive and useful
for obtaining organizational goals.
2. Management is an integrating process - Management undertakes the job of bringing
together human physical and financial resources so as to achieve organizational purpose.
Therefore, is an important function to bring harmony between various factors.
3. Management is a continuous process - It is a never ending process. It is concerned with
constantly identifying the problem and solving them by taking adequate steps. It is an on-
going process.

Management as an Activity
Like various other activities performed by human beings such as writing, playing, eating,
cooking etc, management is also an activity because a manager is one who accomplishes the
objectives by directing the efforts of others. According to Koontz, “Management is what a
manager does”. Management as an activity includes -

1. Informational activities - In the functioning of business enterprise, the manager

constantly has to receive and give information orally or in written. A communication link
has to be maintained with subordinates as well as superiors for effective functioning of an
enterprise.
2. Decisional activities - Practically all types of managerial activities are based on one or
the other types of decisions. Therefore, managers are continuously involved in decisions
of different kinds since the decision made by one manager becomes the basis of action to
be taken by other managers. (E.g. Sales Manager is deciding the media & content of
advertising).
3. Inter-personal activities - Management involves achieving goals through people.
Therefore, managers have to interact with superiors as well as the sub-ordinates. They
must maintain good relations with them. The inter-personal activities include with the
sub-ordinates and taking care of the problem. (E.g. Bonuses to be given to the sub-
ordinates).
Management as a Discipline
Management as a discipline refers to that branch of knowledge which is connected to study
of principles & practices of basic administration. It specifies certain code of conduct to be
followed by the manager & also various methods for managing resources efficiently.

Management as a discipline specifies certain code of conduct for managers & indicates various
methods of managing an enterprise. Management is a course of study which is now formally
being taught in the institutes and universities after completing a prescribed course or by
obtaining degree or diploma in management, a person can get employment as a manager.

Any branch of knowledge that fulfils following two requirements is known as discipline:

1. There must be scholars & thinkers who communicate relevant knowledge through
research and publications.
2. The knowledge should be formally imparted by education and training programmes.

Since management satisfies both these problems, therefore it qualifies to be a discipline. Though
it is comparatively a new discipline but it is growing at a faster pace.

Management as a Group
Management as a group refers to all those persons who perform the task of managing an
enterprise. When we say that management of ABC & Co. is good, we are referring to a group of
people those who are managing. Thus as a group technically speaking, management will include
all managers from chief executive to the first - line managers (lower-level managers). But in
common practice management includes only top management i.e. Chief Executive, Chairman,
General Manager, Board of Directors etc. In other words, those who are concerned with making
important decisions, these persons enjoy the authorities to use resources to accomplish
organizational objectives & also responsibility to for their efficient utilization.

Management as a group may be looked upon in 2 different ways:

1. All managers taken together.

2. Only the top management

The interpretation depends upon the context in which these terms are used. Broadly speaking,
there are 3 types of managers -

1. Patrimonial / Family Manager: Those who have become managers by virtue of their
being owners or relatives of the owners of company.
 2. Professional Managers: Those who have been appointed on account of their specialized
knowledge and degree.
3. Political Managers / Civil Servants: Those who manage public sector undertakings.

Managers have become a part of elite group of society as they enjoy higher standard of living in
the society.

Management as a ScienceScience is a systematic body of knowledge pertaining to a specific field

of study that contains general facts which explains a phenomenon. It establishes cause and effect
relationship between two or more variables and underlines the principles governing their
relationship. These principles are developed through scientific method of observation and
verification through testing.

Science is characterized by following main features:

1. Universally acceptance principles - Scientific principles represents basic truth about a

particular field of enquiry. These principles may be applied in all situations, at all time &
at all places. E.g. - law of gravitation which can be applied in all countries irrespective of
the time.

Management also contains some fundamental principles which can be applied universally
like the Principle of Unity of Command i.e. one man, one boss. This principle is
applicable to all type of organization - business or non business.

2. Experimentation & Observation - Scientific principles are derived through scientific

investigation & researching i.e. they are based on logic. E.g. the principle that earth goes
round the sun has been scientifically proved.

Management principles are also based on scientific enquiry & observation and not only
on the opinion of Henry Fayol. They have been developed through experiments &
practical experiences of large no. of managers. E.g. it is observed that fair remuneration
to personal helps in creating a satisfied work force.

3. Cause & Effect Relationship - Principles of science lay down cause and effect
relationship between various variables. E.g. when metals are heated, they are expanded.
The cause is heating & result is expansion.

The same is true for management, therefore it also establishes cause and effect
relationship. E.g. lack of parity (balance) between authority & responsibility will lead to
ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained
easily i.e. in effectiveness. Similarly if workers are given bonuses, fair wages they will
work hard but when not treated in fair and just manner, reduces productivity of
organization.

4. Test of Validity & Predictability - Validity of scientific principles can be tested at any
time or any number of times i.e. they stand the test of time. Each time these tests will
 give same result. Moreover future events can be predicted with reasonable accuracy by
using scientific principles. E.g. H2 & O2 will always give H2O.

Principles of management can also be tested for validity. E.g. principle of unity of
command can be tested by comparing two persons - one having single boss and one
having 2 bosses. The performance of 1st person will be better than 2nd.

It cannot be denied that management has a systematic body of knowledge but it is not as exact as
that of other physical sciences like biology, physics, and chemistry etc. The main reason for the
inexactness of science of management is that it deals with human beings and it is very difficult to
predict their behavior accurately. Since it is a social process, therefore it falls in the area of social
sciences. It is a flexible science & that is why its theories and principles may produce different
results at different times and therefore it is a behavior science. Ernest Dale has called it as a Soft
Science.

Management as an Art
Art implies application of knowledge & skill to trying about desired results. An art may be
defined as personalized application of general theoretical principles for achieving best possible
results. Art has the following characters -

1. Practical Knowledge: Every art requires practical knowledge therefore learning of

theory is not sufficient. It is very important to know practical application of theoretical
principles. E.g. to become a good painter, the person may not only be knowing different
colour and brushes but different designs, dimensions, situations etc to use them
appropriately. A manager can never be successful just by obtaining degree or diploma in
management; he must have also know how to apply various principles in real situations
by functioning in capacity of manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each one has
his own style and approach towards his job. That is why the level of success and quality
of performance differs from one person to another. E.g. there are several qualified
painters but M.F. Hussain is recognized for his style. Similarly management as an art is
also personalized. Every manager has his own way of managing things based on his
knowledge, experience and personality, that is why some managers are known as good
managers (like Aditya Birla, Rahul Bajaj) whereas others as bad.
3. Creativity: Every artist has an element of creativity in line. That is why he aims at
producing something that has never existed before which requires combination of
intelligence & imagination. Management is also creative in nature like any other art. It
combines human and non-human resources in useful way so as to achieve desired results.
It tries to produce sweet music by combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist becomes more
and more proficient through constant practice. Similarly managers learn through an art of
trial and error initially but application of management principles over the years makes
them perfect in the job of managing.
 5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the
same manner, management is also directed towards accomplishment of pre-determined
goals. Managers use various resources like men, money, material, machinery & methods
to promote growth of an organization.

Thus, we can say that management is an art therefore it requires application of certain principles
rather it is an art of highest order because it deals with moulding the attitude and behavior of
people at work towards desired goals.

Management as both Science and Art

Management is both an art and a science. The above mentioned points clearly reveals that
management combines features of both science as well as art. It is considered as a science
because it has an organized body of knowledge which contains certain universal truth. It is called
an art because managing requires certain skills which are personal possessions of managers.
Science provides the knowledge & art deals with the application of knowledge and skills.

A manager to be successful in his profession must acquire the knowledge of science & the art of
applying it. Therefore management is a judicious blend of science as well as an art because it
proves the principles and the way these principles are applied is a matter of art. Science teaches
to ’know’ and art teaches to ’do’. E.g. a person cannot become a good singer unless he has
knowledge about various ragas & he also applies his personal skill in the art of singing. Same
way it is not sufficient for manager to first know the principles but he must also apply them in
solving various managerial problems that is why, science and art are not mutually exclusive but
they are complementary to each other (like tea and biscuit, bread and butter etc.).

The old saying that “Manager are Born” has been rejected in favor of “Managers are Made”. It
has been aptly remarked that management is the oldest of art and youngest of science. To
conclude, we can say that science is the root and art is the fruit.

Management as a Profession
Over a large few decades, factors such as growing size of business unit, separation of ownership
from management, growing competition etc have led to an increased demand for professionally
qualified managers. The task of manager has been quite specialized. As a result of these
developments the management has reached a stage where everything is to be managed
professionally.

A profession may be defined as an occupation that requires specialized knowledge and intensive
academic preparations to which entry is regulated by a representative body. The essentials of a
profession are:

1. Specialized Knowledge - A profession must have a systematic body of knowledge that

can be used for development of professionals. Every professional must make deliberate
 efforts to acquire expertise in the principles and techniques. Similarly a manager must
have devotion and involvement to acquire expertise in the science of management.
2. Formal Education & Training - There are no. of institutes and universities to impart
education & training for a profession. No one can practice a profession without going
through a prescribed course. Many institutes of management have been set up for
imparting education and training. For example, a CA cannot audit the A/C’s unless he has
acquired a degree or diploma for the same but no minimum qualifications and a course of
study has been prescribed for managers by law. For example, MBA may be preferred but
not necessary.
3. Social Obligations - Profession is a source of livelihood but professionals are primarily
motivated by the desire to serve the society. Their actions are influenced by social norms
and values. Similarly a manager is responsible not only to its owners but also to the
society and therefore he is expected to provide quality goods at reasonable prices to the
society.
4. Code of Conduct - Members of a profession have to abide by a code of conduct which
contains certain rules and regulations, norms of honesty, integrity and special ethics. A
code of conduct is enforced by a representative association to ensure self discipline
among its members. Any member violating the code of conduct can be punished and his
membership can be withdrawn. The AIMA has prescribed a code of conduct for
managers but it has no right to take legal action against any manager who violates it.
5. Representative Association - For the regulation of profession, existance of a
representative body is a must. For example, an institute of Charted Accountants of India
establishes and administers standards of competence for the auditors but the AIMA
however does not have any statuary powers to regulate the activities of managers.

From above discussion, it is quite clear that management fulfills several essentials of a
profession, even then it is not a full fledged profession because: -

a. It does not restrict the entry in managerial jobs for account of one standard or other.
b. No minimum qualifications have been prescribed for managers.
c. No management association has the authority to grant a certificate of practice to various
managers.
d. All managers are supposed to abide by the code formulated by AIMA,
e. Competent education and training facilities do not exist.
f. Managers are responsible to many groups such as shareholders, employees and society. A
regulatory code may curtail their freedom.
g. Managers are known by their performance and not mere degrees.
h. The ultimate goal of business is to maximize profit and not social welfare. That is why
Haymes has rightly remarked, “The slogan for management is becoming - ’He who
serves best, also profits most’.”

Features of Management
Management is an activity concerned with guiding human and physical resources such that
organizational goals can be achieved. Nature of management can be highlighted as: -
 1. Management is Goal-Oriented: The success of any management activity is assessed by
its achievement of the predetermined goals or objective. Management is a purposeful
activity. It is a tool which helps use of human & physical resources to fulfill the pre-
determined goals. For example, the goal of an enterprise is maximum consumer
satisfaction by producing quality goods and at reasonable prices. This can be achieved by
employing efficient persons and making better use of scarce resources.
2. Management integrates Human, Physical and Financial Resources: In an
organization, human beings work with non-human resources like machines. Materials,
financial assets, buildings etc. Management integrates human efforts to those resources. It
brings harmony among the human, physical and financial resources.
3. Management is Continuous: Management is an ongoing process. It involves continuous
handling of problems and issues. It is concerned with identifying the problem and taking
appropriate steps to solve it. E.g. the target of a company is maximum production. For
achieving this target various policies have to be framed but this is not the end. Marketing
and Advertising is also to be done. For this policies have to be again framed. Hence this
is an ongoing process.
4. Management is all Pervasive: Management is required in all types of organizations
whether it is political, social, cultural or business because it helps and directs various
efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges,
hospitals, business firms all require management. When ever more than one person is
engaged in working for a common goal, management is necessary. Whether it is a small
business firm which may be engaged in trading or a large firm like Tata Iron & Steel,
management is required everywhere irrespective of size or type of activity.
5. Management is a Group Activity: Management is very much less concerned with
individual’s efforts. It is more concerned with groups. It involves the use of group effort
to achieve predetermined goal of management of ABC & Co. is good refers to a group of
persons managing the enterprise.

Levels of Management
The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain
of command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories:

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:
1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top

management is the ultimate source of authority and it manages goals and policies for an
enterprise. It devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the performance
of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They devote
more time to organizational and directional functions. In small organization, there is only
one layer of middle level of management but in big enterprises, there may be senior and
junior middle level management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives
of the top management.
 b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better
performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of

supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
“Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees”. In other words, they are
concerned with direction and controlling function of management. Their activities
include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with the
workers.

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Objectives of Management
The main objectives of management are:

1. Getting Maximum Results with Minimum Efforts - The main objective of

management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2. Increasing the Efficiency of factors of Production - Through proper utilization of
various factors of production, their efficiency can be increased to a great extent which
can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn
leads to saving of time, effort and money which is essential for the growth & prosperity
of the enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures smooth and
coordinated functioning of the enterprise. This in turn helps in providing maximum
benefits to the employee in the shape of good working condition, suitable wage system,
incentive plans on the one hand and higher profits to the employer on the other hand.
 4. Human betterment & Social Justice - Management serves as a tool for the upliftment
as well as betterment of the society. Through increased productivity & employment,
management ensures better standards of living for the society. It provides justice through
its uniform policies.

Importance of Management
 It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the
resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards
achievement of pre-determined goals. By defining objective of organization clearly there would be no
wastage of time, money and effort. Management converts disorganized resources of men, machines,
money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a
manner that enterprise work towards attainment of goals.

 Optimum Utilization of Resources - Management utilizes all the physical & human resources
productively. This leads to efficacy in management. Management provides maximum utilization of
scarce resources by selecting its best possible alternate use in industry from out of various uses. It
makes use of experts, professional and these services leads to use of their skills, knowledge, and proper
utilization and avoids wastage. If employees and machines are producing its maximum there is no under
employment of any resources.

 Reduces Costs - It gets maximum results through minimum input by proper planning and by using
minimum input & getting maximum output. Management uses physical, human and financial resources
in such a manner which results in best combination. This helps in cost reduction.

 Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To

establish sound organizational structure is one of the objective of management which is in tune with
objective of organization and for fulfillment of this, it establishes effective authority & responsibility
relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors &
who are subordinates. Management fills up various positions with right persons, having right skills,
training and qualification. All jobs should be cleared to everyone.

 Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in

touch with the changing environment. With the change is external environment, the initial co-ordination
of organization must be changed. So it adapts organization to changing demand of market / changing
needs of societies. It is responsible for growth and survival of organization.

 Essentials for Prosperity of Society - Efficient management leads to better economical

production which helps in turn to increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income in hands.
Organization comes with new products and researches beneficial for society.

Management and Administration

According to Theo Haimann, “Administration means overall determination of policies, setting of
major objectives, the identification of general purposes and laying down of broad programmes
and projects”. It refers to the activities of higher level. It lays down basic principles of the
enterprise. According to Newman, “Administration means guidance, leadership & control of the
efforts of the groups towards some common goals”.

Whereas, management involves conceiving, initiating and bringing together the various
elements; coordinating, actuating, integrating the diverse organizational components while
sustaining the viability of the organization towards some pre-determined goals. In other words, it
is an art of getting things done through & with the people in formally organized groups.

The difference between Management and Administration can be summarized under 2 categories:
-

1. Functions
2. Usage / Applicability

On the Basis of Functions: -

Basis Management Administration

Meaning Management is an art of getting things done It is concerned with formulation of

through others by directing their efforts broad objectives, plans & policies.
towards achievement of pre-determined goals.

Nature Management is an executing function. Administration is a decision-

making function.

Process Management decides who should as it & how Administration decides what is to
should he dot it. be done & when it is to be done.

Function Management is a doing function because Administration is a thinking

managers get work done under their function because plans & policies
supervision. are determined under it.

Skills Technical and Human skills Conceptual and Human skills

 Level Middle & lower level function Top level function

On the Basis of Usage: -

Basis Management Administration

Applicability It is applicable to business concerns It is applicable to non-business concerns

i.e. profit-making organization. i.e. clubs, schools, hospitals etc.

Influence The management decisions are The administration is influenced by

influenced by the values, opinions, public opinion, govt. policies, religious
beliefs & decisions of the managers. organizations, customs etc.

Status Management constitutes the Administration represents owners of the

employees of the organization who enterprise who earn return on their
are paid remuneration (in the form of capital invested & profits in the form of
salaries & wages). dividend.

Practically, there is no difference between management & administration. Every manager is

concerned with both - administrative management function and operative management function
as shown in the figure. However, the managers who are higher up in the hierarchy denote more
time on administrative function & the lower level denote more time on directing and controlling
worker’s performance i.e. management.

The Figure above clearly shows the degree of administration and management performed by the
different levels of management
Functions of Management
Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given purposes.
It is a dynamic process consisting of various elements and activities. These activities are
different from operative functions like marketing, finance, purchase etc. Rather these activities
are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating and
controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting
& B for Budgeting. But the most widely accepted are functions of management given by
KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

1. Planning

It is the basic function of management. It deals with chalking out a future course of action
& deciding in advance the most appropriate course of actions for achievement of pre-
determined goals. According to KOONTZ, “Planning is deciding in advance - what to do,
 when to do & how to do. It bridges the gap from where we are & where we want to be”.
A plan is a future course of actions. It is an exercise in problem solving & decision
making. Planning is determination of courses of action to achieve desired goals. Thus,
planning is a systematic thinking about ways & means for accomplishment of pre-
determined goals. Planning is necessary to ensure proper utilization of human & non-
human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, “To organize a business is to provide it with everything
useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a
business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing
has assumed greater importance in the recent years due to advancement of technology,
increase in size of business, complexity of human behavior etc. The main purpose o
staffing is to put right man on right job i.e. square pegs in square holes and round pegs in
round holes. According to Kootz & O’Donell, “Managerial function of staffing involves
manning the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed un the structure”. Staffing involves:

 Manpower Planning (estimating man power in terms of searching, choose the person
and giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.
4. Directing

It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel
aspect of management which deals directly with influencing, guiding, supervising,
 motivating sub-ordinate for the achievement of organizational goals. Direction has
following elements:

 Supervision
 Motivation
 Leadership
 Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to

work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.

Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from

one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if necessary, to
correct any deviation”. According to Koontz & O’Donell “Controlling is the
measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d. Corrective action.

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Definition of Coordination
Co-ordination is the unification, integration, synchronization of the efforts of group members so
as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all
the other functions of management. According to Mooney and Reelay, “Co-ordination is orderly
arrangement of group efforts to provide unity of action in the pursuit of common goals”.
According to Charles Worth, “Co-ordination is the integration of several parts into an orderly
hole to achieve the purpose of understanding”.

Management seeks to achieve co-ordination through its basic functions of planning, organizing,
staffing, directing and controlling. That is why, co-ordination is not a separate function of
management because achieving of harmony between individuals efforts towards achievement of
group goals is a key to success of management. Co-ordination is the essence of management and
is implicit and inherent in all functions of management.
A manager can be compared to an orchestra conductor since both of them have to create rhythm
and unity in the activities of group members. Co-ordination is an integral element or ingredient
of all the managerial functions as discussed below: -

a. Co-ordination through Planning - Planning facilitates co-ordination by integrating the

various plans through mutual discussion, exchange of ideas. e.g. - co-ordination between
finance budget and purchases budget.
b. Co-ordination through Organizing - Mooney considers co-ordination as the very
essence of organizing. In fact when a manager groups and assigns various activities to
subordinates, and when he creates department’s co-ordination uppermost in his mind.
c. Co-ordination through Staffing - A manager should bear in mind that the right no. of
personnel in various positions with right type of education and skills are taken which will
ensure right men on the right job.
d. Co-ordination through Directing - The purpose of giving orders, instructions &
guidance to the subordinates is served only when there is a harmony between superiors &
subordinates.
e. Co-ordination through Controlling - Manager ensures that there should be co-
ordination between actual performance & standard performance to achieve organizational
goals.

From above discussion, we can very much affirm that co-ordination is the very much essence of
management. It is required in each & every function and at each & every stage & therefore it
cannot be separated.

Coordination and Cooperation

Co-ordination is an orderly arrangement of efforts to provide unity of action in the fulfillment of
common objective whereas co-operation denotes collective efforts of persons working in an
enterprise voluntarily for the achievement of a particular purpose. It is the willingness of
individuals to help each other.

Co-ordination is an effort to integrate effectively energies of different groups whereas co-

operation is sort to achieve general objectives of business.

Though these two are synonymous but they are different as below:

Differences between Co-ordination and Co-operation

Basis Co-ordination Co-operation

Meaning It is an orderly arrangement of group It means mutual help willingly.

efforts in pursuit of common goals.
 Scope It is broader than co-operation which It is termed as a part of co-ordination.
includes as well because it harmonizes
the group efforts.

Process The function of co-ordination is The functions of co-operation are prepared

performed by top management. by persons at any level.

Requirements Co-ordination is required by employees Co-operation is emotional in nature

and departments at work irrespective of because it depends on the willingness of
their work. people working together.

Relationship It establishes formal and informal It establishes informal relationship.

relationships.

Freedom It is planned and entrusted by the It depends upon the sweet will of the
central authority & it is essential. individuals and therefore it is not
necessary.

Support It seeks wholehearted support from Co-operation without co-ordination is

various people working at various fruitless & therefore it may lead to
levels. unbalanced developments.

Therefore, existence of co-operation may prove to be effective condition or requisite for co-
ordination. But it does not mean that co-ordination originates automatically from the voluntary
efforts of the group of members. It has to be achieved through conscious & deliberate efforts of
managers, therefore to conclude we can say that co-operation without co-ordination has no fruit
and co-ordination without co-operation has no root.

Henri Fayols 14 Principles of Management

A principle refers to a fundamental truth. It establishes cause and effect relationship between two
or more variables under given situation. They serve as a guide to thought & actions. Therefore,
management principles are the statements of fundamental truth based on logic which provides
guidelines for managerial decision making and actions. These principles are derived: -

a. On the basis of observation and analysis i.e. practical experience of managers.

b. By conducting experimental studies.
There are 14 Principles of Management described by Henri Fayol.

1. Division of Labor
a. Henri Fayol has stressed on the specialization of jobs.
b. He recommended that work of all kinds must be divided & subdivided and allotted to
various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility
a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have concerned
authority.
d. Authority refers to the right of superiors to get exactness from their sub-ordinates
whereas responsibility means obligation for the performance of the job assigned.
e. There should be a balance between the two i.e. they must go hand in hand.
f. Authority without responsibility leads to irresponsible behavior whereas responsibility
without authority makes the person ineffective.
3. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one boss at a
time.
b. In other words, a sub-ordinate should not receive instructions from more than one
person because -

-  It undermines authority

-  Weakens discipline
-  Divides loyalty
-  Creates confusion
-  Delays and chaos
-  Escaping responsibilities
-  Duplication of work
-  Overlapping of efforts

c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely

essential.
d. Unity of command provides the enterprise a disciplined, stable & orderly existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan for a
group of activities having similar objectives.
b. Related activities should be grouped together. There should be one plan of action for
them and they should be under the charge of a particular manager.
c. According to this principle, efforts of all the members of the organization should be
directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. In fact, unity of command is not possible without unity of direction.
 Basis Unity of command Unity of direction

Meaning It implies that a sub-ordinate should receive It means one head, one plan for a group
orders & instructions from only one boss. of activities having similar objectives.

Nature It is related to the functioning of personnel’s. It is related to the functioning of

departments, or organization as a whole.

Necessity It is necessary for fixing responsibility of each It is necessary for sound organization.
subordinates.

Advantage It avoids conflicts, confusion & chaos. It avoids duplication of efforts and
wastage of resources.

Result It leads to better superior sub-ordinate It leads to smooth running of the

relationship. enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each
other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically
comes from the unity of direction.

5. Equity
a. Equity means combination of fairness, kindness & justice.
b. The employees should be treated with kindness & equity if devotion is expected of
them.
c. It implies that managers should be fair and impartial while dealing with the
subordinates.
d. They should give similar treatment to people of similar position.
e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
f. Equity is essential to create and maintain cordial relations between the managers and
sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, “at times force and harshness might become necessary for
the sake of equity”.
6. Order
a. This principle is concerned with proper & systematic arrangement of things and people.
b. Arrangement of things is called material order and placement of people is called social
order.
c. Material order- There should be safe, appropriate and specific place for every article and
every place to be effectively used for specific activity and commodity.
 d. Social order- Selection and appointment of most suitable person on the suitable job.
There should be a specific place for every one and everyone should have a specific place
so that they can easily be contacted whenever need arises.
7. Discipline
a. According to Fayol, “Discipline means sincerity, obedience, respect of authority &
observance of rules and regulations of the enterprise”.
b. This principle applies that subordinate should respect their superiors and obey their
order.
c. It is an important requisite for smooth running of the enterprise.
d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if -

-  There are good superiors at all levels.

-  There are clear & fair agreements with workers.
-  Sanctions (punishments) are judiciously applied.

8. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
b. It means eagerness to initiate actions without being asked to do so.
c. Fayol advised that management should provide opportunity to its employees to suggest
ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the employees.
c. Wages should be determined on the basis of cost of living, work assigned, financial
position of the business, wage rate prevailing etc.
d. Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education, medical &
residential facilities to workers.
10. Stability of Tenure
a. Fayol emphasized that employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be fixed.
b. Therefore employees should be appointed after keeping in view principles of
recruitment & selection but once they are appointed their services should be served.
c. According to Fayol. “Time is required for an employee to get used to a new work &
succeed to doing it well but if he is removed before that he will not be able to render
worthwhile services”.
d. As a result, the time, effort and money spent on training the worker will go waste.
 e. Stability of job creates team spirit and a sense of belongingness among workers which
ultimately increase the quality as well as quantity of work.
11. Scalar Chain
a. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority
to the lowest”.
b. Every orders, instructions, messages, requests, explanation etc. has to pass through
Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut
is known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to facilitate
quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the
help of E and F to G which will take quite some time and by that time, it may not
be worth therefore a gang plank has been developed between the two.

e. Gang Plank clarifies that management principles are not rigid rather they are very
flexible. They can be moulded and modified as per the requirements of situations
12. Sub-Ordination of Individual Interest to General Interest
a. An organization is much bigger than the individual it constitutes therefore interest of
the undertaking should prevail in all circumstances.
b. As far as possible, reconciliation should be achieved between individual and group
interests.
c. But in case of conflict, individual must sacrifice for bigger interests.
d. In order to achieve this attitude, it is essential that -

-  Employees should be honest & sincere.

-  Proper & regular supervision of work.
-  Reconciliation of mutual differences and clashes by mutual agreement. For
example, for change of location of plant, for change of profit sharing ratio, etc.

13. Espirit De’ Corps (can be achieved through unity of command)

 a. It refers to team spirit i.e. harmony in the work groups and mutual understanding
among the members.
b. Spirit De’ Corps inspires workers to work harder.
c. Fayol cautioned the managers against dividing the employees into competing groups
because it might damage the moral of the workers and interest of the undertaking in
the long run.
d. To inculcate Espirit De’ Corps following steps should be undertaken -
 There should be proper co-ordination of work at all levels
 Subordinates should be encouraged to develop informal relations among
themselves.
 Efforts should be made to create enthusiasm and keenness among subordinates
so that they can work to the maximum ability.
 Efficient employees should be rewarded and those who are not up to the mark
should be given a chance to improve their performance.
 Subordinates should be made conscious of that whatever they are doing is of
great importance to the business & society.
e. He also cautioned against the more use of Britain communication to the subordinates
i.e. face to face communication should be developed. The managers should infuse team
spirit & belongingness. There should be no place for misunderstanding. People then
enjoy working in the organization & offer their best towards the organization.
14. Centralization & De-Centralization
a. Centralization means concentration of authority at the top level. In other words,
centralization is a situation in which top management retains most of the decision
making authority.
b. Decentralization means disposal of decision making authority to all the levels of the
organization. In other words, sharing authority downwards is decentralization.
c. According to Fayol, “Degree of centralization or decentralization depends on no. of
factors like size of business, experience of superiors, dependability & ability of
subordinates etc.
d. Anything which increases the role of subordinate is decentralization & anything which
decreases it is centralization.
e. Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.

Features of Principles of Management

 Principles of Management are Universal

a. Management principles are applicable to all kinds of organizations - business & non
business.
b. They are applicable to all levels of management.
c. Every organization must make best possible use by the use of management principles.
d. Therefore, they are universal or all pervasive.

 Principles of Management are Flexible

 a. Management principles are dynamic guidelines and not static rules.
b. There is sufficient room for managerial discretion i.e. they can be modified as per the
requirements of the situation.
c. Modification & improvement is a continuous phenomenon in case of principles of
management.

 Principles of Management have a Cause & Effect Relationship

a. Principles of management indicate cause and effect relationship between related

variables.
b. They indicate what will be the consequence or result of certain actions. Therefore, if one
is known, the other can be traced.

 Principles of Management - Aims at Influencing Human Behavior

a. Human behavior is complex and unpredictable.

b. Management principles are directed towards regulating human behavior so that people
can give their best to the organization.
c. Management is concerned with integrating efforts and harmonizing them towards a goal.
d. But in certain situations even these principles fail to understand human behavior.

 Principles of Management are of Equal Importance

a. All management principles are equally important.

b. No particular principle has greater importance than the other.
c. They are all required together for the achievement of organizational goals.

Importance of Management Principles

Following are the main importance of the Principles of Management.

1. Improves Understanding.
2. Direction for Training of Managers.
3. Role of Management.
4. Guide to Research in Management.

1. Improves Understanding - From the knowledge of principles managers get indication

on how to manage an organization. The principles enable managers to decide what should
be done to accomplish given tasks and to handle situations which may arise in
management. These principles make managers more efficient.
2. Direction for Training of Managers - Principles of management provide understanding
of management process what managers would do to accomplish what. Thus, these are
helpful in identifying the areas of management in which existing & future managers
should be trained.
 3. Role of Management - Management principles makes the role of managers concrete.
Therefore these principles act as ready reference to the managers to check whether their
decisions are appropriate. Besides these principles define managerial activities in
practical terms. They tell what a manager is expected to do in specific situation.
4. Guide to Research in Management - The body of management principles indicate lines
along which research should be undertaken to make management practical and more
effective. The principles guide managers in decision making and action. The researchers
can examine whether the guidelines are useful or not. Anything which makes
management research more exact & pointed will help improve management practice.

INTRODUCTION 14 PRINCIPLES OF MANAGEMENT

In the last century, organizations already had to deal with management in practice.

In the early 1900s, large organizations, such as production factories, had to be managed too.

At the time there were only few (external) management tools, models and methods available.

Thanks to scientists like Henri Fayol (1841-1925) the first foundations were laid for modern
scientific management.

These first concepts, also called principles of management are the underlying factors for
successful management.

Henri Fayol explored this comprehensively and, as a result, he synthesized the 14 principles of
management.

Henri Fayol ‘s principles of management and research were published in the book ‘General and
Industrial Management’ (1916).

14 Principles of Management

14 principles of Management are statements that are based on a fundamental truth.

These principles of management serve as a guideline for decision-making and management

actions.

They are drawn up by means of observations and analyses of events that managers encounter in
practice.

Henri Fayol was able to synthesize 14 principles of management after years of study, namely:
1. Division of Work

In practice, employees are specialized in different areas and they have different skills.

Different levels of expertise can be distinguished within the knowledge areas (from generalist to
specialist).

Personal and professional developments support this.

According to Henri Fayol specialization promotes efficiency of the workforce and increases
productivity.

In addition, the specialization of the workforce increases their accuracy and speed.

This management principle of the 14 principles of management is applicable to both technical

and managerial activities.

2. Authority and Responsibility

In order to get things done in an organization, management has the authority to give orders to the
employees. Of course with this authority comes responsibility.

According to Henri Fayol, the accompanying power or authority gives the management the right
to give orders to the subordinates.

The responsibility can be traced back from performance and it is therefore necessary to make
agreements about this.

In other words, authority and responsibility go together and they are two sides of the same coin.

3. Discipline

This third principle of the 14 principles of management is about obedience. It is often a part of
the core values of a mission and vision in the form of good conduct and respectful interactions.

This management principle is essential and is seen as the oil to make the engine of an
organization run smoothly.

4. Unity of Command

The management principle ‘Unity of command’ means that an individual employee should
receive orders from one manager and that the employee is answerable to that manager.

If tasks and related responsibilities are given to the employee by more than one manager, this
may lead to confusion which may lead to possible conflicts for employees.
By using this principle, the responsibility for mistakes can be established more easily.

5. Unity of Direction

This management principle of the 14 principles of management is all about focus and unity. All
employees deliver the same activities that can be linked to the same objectives.

All activities must be carried out by one group that forms a team. These activities must be
described in a plan of action.

The manager is ultimately responsible for this plan and he monitors the progress of the defined
and planned activities.

Focus areas are the efforts made by the employees and coordination.

6. Subordination of Individual Interest

There are always all kinds of interests in an organization. In order to have an organization
function well, Henri Fayol indicated that personal interests are subordinate to the interests of the
organization (ethics).

The primary focus is on the organizational objectives and not on those of the individual.

This applies to all levels of the entire organization, including the managers.

7. Remuneration

Motivation and productivity are close to one another as far as the smooth running of an
organization is concerned.

This management principle of the 14 principles of management argues that the remuneration
should be sufficient to keep employees motivated and productive.

There are two types of remuneration namely non-monetary (a compliment, more responsibilities,
credits) and monetary (compensation, bonus or other financial compensation).

Ultimately, it is about rewarding the efforts that have been made.

8. The Degree of Centralization

Management and authority for decision-making process must be properly balanced in an

organization.

This depends on the volume and size of an organization including its hierarchy.
Centralization implies the concentration of decision making authority at the top management
(executive board). Sharing of authorities for the decision-making process with lower levels
(middle and lower management), is referred to as decentralization by Henri Fayol.

Henri Fayol indicated that an organization should strive for a good balance in this.

9. Scalar Chain

Hierarchy presents itself in any given organization. This varies from senior management
(executive board) to the lowest levels in the organization.

Henri Fayol ’s “hierarchy” management principle states that there should be a clear line in the
area of authority (from top to bottom and all managers at all levels).

This can be seen as a type of management structure. Each employee can contact a manager or a
superior in an emergency situation without challenging the hierarchy.

Especially, when it concerns reports about calamities to the immediate managers/superiors.

10. Order

According to this principle of the 14 principles of management, employees in an organization

must have the right resources at their disposal so that they can function properly in an
organization.

In addition to social order (responsibility of the managers) the work environment must be safe,
clean and tidy.

11. Equity

The management principle of equity often occurs in the core values of an organization.

According to Henri Fayol, employees must be treated kindly and equally.

Employees must be in the right place in the organization to do things right.

Managers should supervise and monitor this process and they should treat employees fairly and
impartially.

12. Stability of Tenure of Personnel

This management principle of the 14 principles of management represents deployment and

managing of personnel and this should be in balance with the service that is provided from the
organization.

Management strives to minimize employee turnover and to have the right staff in the right place.
Focus areas such as frequent change of position and sufficient development must be managed
well.

13. Initiative

Henri Fayol argued that with this management principle employees should be allowed to express
new ideas.

This encourages interest and involvement and creates added value for the company.

Employee initiatives are a source of strength for the organization according to Henri Fayol.

This encourages the employees to be involved and interested.

14. Esprit de Corps

The management principle ‘esprit de corps’ of the 14 principles of management stands for
striving for the involvement and unity of the employees.

Managers are responsible for the development of morale in the workplace; individually and in
the area of communication.

Esprit de corps contributes to the development of the culture and creates an atmosphere of
mutual trust and understanding.

In conclusion on the 14 Principles of management

The 14 principles of management can be used to manage organizations and are useful tools for
forecasting, planning, process management, organization management, decision-making,
coordination and control.

Although they are obvious, many of these matters are still used based on common sense in
current management practices in organizations.

It remains a practical list with focus areas that are based on Henri Fayol ’s research which still
applies today due to a number of logical principles.

It’s Your Turn

What do you think? What are the (14) principles of management of today’s management? Do
these management principles work in every organization or are there exceptions? And if so, what
are the exceptions and what can we learn from them?

Share your experience and knowledge in the comments box below.

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More information

1. Fayol, H. (1917). General and Industrial Management. Dunod et E. Pinat.

2. Hodge, B. J. (2002). Organization theory: a strategic approach. Pearson Education.
3. Wren, D. A. , Bedeian, A. G. , Breeze, J. D. (2002). The foundations of Henri Fayol’s administrative
theory. Management Decision, Vol. 40 Iss: 9, pp.906 – 918 state: It was not until the Storr’s
translation that Fayol’s (1949) Administration Industrielle et Générale reached a wider audience,
especially in the USA and established Fayol as a major authority on management.

Note on Fayol's Administrative Management

Theory: Concept and Principles
Through his rich experience, Fayol provided 14 principles of general management to guide the
managers who in his time didn’t use a scientific approach of management. His theory is based on
how the management should interact with the employees. Fayol’s theory provided a broad and
analytical framework of the process of administration which overcomes the drawback of
Taylor’s management theory.Henri Fayol (1841-1925) was a French mining engineer, managing
director and an industrialist who is known for his contribution towards management science in
his work ”Administration Industrielle et Generale" in the year 1916 A.D. The book was later
translated as “General and Industrial Management” in the year 1929 A.D.

Fayol’s theory which is still considered applicable and reliable is used in managing the personnel
in any organization. Fayol’s Administrative management can be understood by the following
four section:

(Mind tool editorial team)

Function/Elements Of Management

According to Administrative theory of Management, the five basic elements of management are:

 Planning: Planning is forecasting the future and making a structural plan of action and
determining the goals and objectives of the action. Fayol considers planning as most essential
function.

 Organizing: Organizing is the creation of an organizational structure which brings human

resources and non-human resources together to work together.

 Commanding: The process of giving direction and orders by the superior to the subordinate is
known as commanding.
  Coordinating: There are various divisions in an organization. So, coordinating is the process of
bringing the action of all the divisions and departments and integrating their efforts for the
fulfillment of organizational goals .

 Controlling: Controlling means comparing the actual performance of the organization with the
desired performance level and checking if there is the need for improvement and when a
deviation is found implementing the necessary changes to improve the performance.

source:www.toolshero.com

(Shrestha-pg. 53-54)

Division of Industrial Activities

H. Fayol observed the organization from a manager’s point of view. So he identified six major
activities in which industrial activities can be divided. They are:

 Technical activities: This activity is related to the production or manufacturing of goods and
services.

 Commercial activities: This activity is concerned with the marketing dealing with sales,
purchase, and distribution of goods and services.

 Financial activities: This activity is related to the creation of necessary capital and its optimum
use for development and growth.

 Accounting activities: This activity is related to the recording of transactions and then preparing
the financial statements.
  Managerial activities: This activity is considered with the elements of management which are
planning, organizing, commanding, coordinating and controlling.

 Security activities: This activity is related to the protection of people and property in an
organization by providing safe working condition, insurance policies etc.

(Neupane Surendra; Parajuli , Ram Prasad; Jha, Deepak Kumar; Chhetri, Tuk Bahadur; Dulal,
Gopal Prasad pg- 45)

Managerial Skills and Qualities

Fayol has focused on the role of a manager. He believes that anyone cannot be a manager. A
manager needs some skills and qualities to manage people and resources in an organization. The
six managerial skills are:

 Physical qualities: This quality is concerned with the good health, well-maintained dress and
outlook and high energy level of the manager.

 Mental qualities: To become a good manager they must possess the quality to learn and
understand, judge and adapt to the problems and should have the mental energy to focus.

 Educational qualities: To become a sound manager, one needs to have a general understanding
of the subject matter of the basic functioning of the organization.

 Moral qualities: To become a good manager, one needs to have high energy level, willingness to
take responsibilities, loyal to action, tactful and feeling of dignity.

 Technical qualities: One needs to have technical knowledge regarding what are the procedures
to carry out the action in an organization.

 Experience: Experience comes with years of practice of an action. So a good manager needs
years of experience to work smoothly and efficiently.

Principles of Administrative Management

The 14 principles of management given by H. Fayol are particularly focused on the five
management function of an organization. These are the basic guidelines to a management of the
organization as a whole.

Even though the principles were not created on a basis of experiments, they were created by the
experience of Henri Fayol. These principles are universal and can be applied in any organization
in any part of the world.

Fayol suggests that these principles are not rigid but they are flexible and should be used
according to the need. So it depends on the art of the manager on how they use the above to suit
the organization and to manage effectively and efficiently. The 14 guiding principles by H. Fayol
are:
  Division of work:

This principle implies that the overall action of management should be divided into a compact
job and employees should be allocated certain jobs viewing their interest and skills. This
principle helps in specialization and helps to make the workers more effective and efficient.
Division of work is important in technical level as well as managerial level in an organization for
smooth operation.

 Authority and Responsibility:

Authority is the right to give the command and make decisions. Responsibility is the obligation
of an employee to perform a certain designated task and be accountable to the supervisor. There
should be a balance between authority and responsibility. An employee must be given the
amount of authority required to perform the given responsibility. Authority without
responsibility will lead to waste of position and lack of utilization of power and responsibility
without power will lead to poor utilization of human and another resource.

 Discipline:

An employee should be obedient and respectful to the authority and the established rules and
regulation of the organization. Clarity of Rules, Reward-Punishment system, good supervision
etc. are some ways to maintain discipline. But it depends on the need and policies of the
organization on how to maintain discipline.

 Unity of Command:

An employee must get orders from only one immediate supervisor. And the employee should be
accountable to the immediate supervisor only. There should not be other supervisors to guide the
employee. This will help to clear the confusion and will make the employee loyal to the activity.

 Unity of Direction:

According to this principle, there should be only one manager under the guidance and plan of
which the groups having same goals and objectives should move forward. This principle
suggests that one department, section, the division should only get instruction from one head.
This helps in coordinating the group activity to attain a single goal.

 Subordination of individual interest to general interest:

There are two types of interests. One is interest of the individuals and the other is organizational
interest. So this principle suggests that there must be harmony between these two interests.
Organizational interest must be given more priority as doing good for the organization will bring
rewards for the individuals.

 Remuneration of Personnel:
There must be monetary as well as non-monetary remuneration to the employees based on their
performance level. Fayol focuses more on non-monetary remuneration in which he believes will
create bonding between the employee and the organization. So the remuneration must be fair,
reasonable and satisfactory.

 Centralization:

This principle implies that the top most level of authority should be centralized to the top level
management. There should be delegation of power to the subordinate but the power to make the
important decisions in the organization should remain with the top level management.

 Scalar Chain:

There should be a chain of superiors ranging from the top level of management to the lower level
management based on the hierarchy level. The head of an organization is in the top of the chain.
The communication flows from the top to the bottom through this chain of authority of superiors.
However, there is no hard and fast rule regarding the process of communication through scalar
chain.

 Order:

This principle states that every material and manpower should be given a proper place in the
organization. The right man for the right job is essential in the smooth running of an
organization. So Management must identify tasks and put them in proper order with the limited
human and other resources.

 Equity:

This principle implies that all the members of the organization should be treated equally. There
should be no biases and there should be an environment of kindness and justice.

 Stability of tenure:

Any employee can work to the fullest if they have secured job. So an employee must be provided
with job security which will help them to be efficient. This will also benefit the organization as it
lowers the labor turnover and reduces cost of recruiting and training new employees.

 Initiative:

Initiative is the level of freedom that an organization should provide to the employee to carry out
the plans without forcing them or ordering them. This is related to creation of interest and
willingness in the employees by motivating and satisfying the employees.

 Esprit de Corps:
This principle implies that “union is strength” and team spirit. So the organization must integrate
all its actions towards a single goal and objective. If the action is not unified then they cannot
achieve their desired objectives. So there must be unified team contribution in harmony and
cooperation which is always greater than the aggregate of individual performances.

(Sharma, Surendra Raj; Jha, Surendra Kumar pg-43-46)

Hence these are the 14 principles of Administrative management theory. These principles have
helped in making the management more efficient and helped managers to develop necessary
skills. But the principle has also been criticized as not being applicable in all situations.

References

 Neupane Surendra; Parajuli , Ram Prasad; Jha, Deepak Kumar; Chhetri, Tuk Bahadur; Dulal,
Gopal Prasad;. "Business Studies class: XII." Kathmandu: Nawakala Publications, 2011 A.D. 33.48.
 Sharma, Surendra Raj; Jha, Surendra Kumar;. "Business Studies Grade XII." Kathmandu:
Sakuntala Pustak Bhawan, 2011 A.D. 41-46.
 Shrestha, Kul Narsingh. "Business Organization and Management." Kathmandu: Nabin
Publication, 2065 B.S. 53.
 team, Mind tool editorial. www.mindtools.com/pages/article/henri-fayol.htm. n.d.
<https://www.mindtools.com/pages/article/henri-fayol.htm>.

Managers in the early 1900s had very few external resources to draw upon to guide and develop
their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers
began to get the tools they needed to lead and manage more effectively. Fayol, and others like
him, are responsible for building the foundations of modern management theory.

Background

Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a
large mining company in France. He eventually became the director, at a time when the mining
company employed more than 1,000 people.

Through the years, Fayol began to develop what he considered to be the 14 most important
principles of management. Essentially, these explained how managers should organize and
interact with staff.

In 1916, two years before he stepped down as director, he published his "14 Principles of
Management" in the book "Administration Industrielle et Générale." Fayol also created a list of
the six primary functions of management, which go hand in hand with the Principles.

Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains
one of the most comprehensive. He's considered to be among the most influential contributors to
the modern concept of management, even though people don't refer to "The 14 Principles" often
today.

The theory falls under the Administrative Management school of thought (as opposed to the
Scientific Management school, led by Fredrick Taylor ).

Fayol's 14 Principles of Management

Fayol's principles are listed below:

1. Division of Work – When employees are specialized, output can increase because they become
increasingly skilled and efficient.
2. Authority – Managers must have the authority to give orders, but they must also keep in mind
that with authority comes responsibility.
3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command – Employees should have only one direct supervisor.
5. Unity of Direction – Teams with the same objective should be working under the direction of
one manager, using one plan. This will ensure that action is properly coordinated.
6. Subordination of Individual Interests to the General Interest – The interests of one employee
should not be allowed to become more important than those of the group. This includes
managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This
includes financial and non-financial compensation.
8. Centralization – This principle refers to how close employees are to the decision-making
process. It is important to aim for an appropriate balance.
9. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy,
or chain of command.
10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should
have its place.
11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary
and acting with kindness where appropriate.
12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover.
Personnel planning should be a priority.
13. Initiative – Employees should be given the necessary level of freedom to create and carry out
plans.
14. Esprit de Corps – Organizations should strive to promote team spirit and unity

Fayol's Six Functions of Management

Fayol's six primary functions of management, which go hand in hand with the Principles, are as
follows:

1. Forecasting.
2. Planning.
3. Organizing.
4. Commanding.
5. Coordinating.
 6. Controlling.

Key Points

Henri Fayol's "14 Principles of Management" have been a significant influence on modern
management theory. His practical list of principles helped early 20th century managers learn how
to organize and interact with their employees in a productive way.

Although the 14 Principles aren't widely used today, they can still offer guidance for today's
managers. Many of the principles are now considered to be common sense, but at the time they
were revolutionary concepts for organizational management.

Scientific Management by Taylor

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of
Scientific Management’ started his career as an operator and rose to the position of chief
engineer. He conducted various experiments during this process which forms the basis of
scientific management. It implies application of scientific principles for studying & identifying
management problems.

According to Taylor, “Scientific Management is an art of knowing exactly what you want your
men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is
analysed scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of
management against hit or miss or Rule of Thumb.

According to Drucker, “The cost of scientific management is the organized study of work, the
analysis of work into simplest element & systematic management of worker’s performance of
each element”.

1. Development of Science for each part of men’s job (replacement of rule of thumb)
a. This principle suggests that work assigned to any employee should be observed,
analyzed with respect to each and every element and part and time involved in it.
b. This means replacement of odd rule of thumb by the use of method of enquiry,
investigation, data collection, analysis and framing of rules.
c. Under scientific management, decisions are made on the basis of facts and by the
application of scientific decisions.
2. Scientific Selection, Training & Development of Workers
a. There should be scientifically designed procedure for the selection of workers.
b. Physical, mental & other requirement should be specified for each and every job.
c. Workers should be selected & trained to make them fit for the job.
 d. The management has to provide opportunities for development of workers having
better capabilities.
e. According to Taylor efforts should be made to develop each employee to his greatest
level and efficiency & prosperity.
3. Co-operation between Management & workers or Harmony not discord
a. Taylor believed in co-operation and not individualism.
b. It is only through co-operation that the goals of the enterprise can be achieved
efficiently.
c. There should be no conflict between managers & workers.
d. Taylor believed that interest of employer & employees should be fully harmonized so as
to secure mutually understanding relations between them.
4. Division of Responsibility
a. This principle determines the concrete nature of roles to be played by different level of
managers & workers.
b. The management should assume the responsibility of planning the work whereas
workers should be concerned with execution of task.
c. Thus planning is to be separated from execution.
5. Mental Revolution
a. The workers and managers should have a complete change of outlook towards their
mutual relation and work effort.
b. It requires that management should create suitable working condition and solve all
problems scientifically.
c. Similarly workers should attend their jobs with utmost attention, devotion and
carefulness. They should not waste the resources of enterprise.
d. Handsome remuneration should be provided to workers to boost up their moral.
e. It will create a sense of belongingness among worker.
f. They will be disciplined, loyal and sincere in fulfilling the task assigned to them.
g. There will be more production and economical growth at a faster rate.
6. Maximum Prosperity for Employer & Employees
a. The aim of scientific management is to see maximum prosperity for employer and
employees.
b. It is important only when there is opportunity for each worker to attain his highest
efficiency.
c. Maximum output & optimum utilization of resources will bring higher profits for the
employer & better wages for the workers.
d. There should be maximum output in place of restricted output.
e. Both managers & workers should be paid handsomely.

Techniques of Scientific Management

Time Study

a. It is a technique which enables the manager to ascertain standard time taken for performing a
specified job.
b. Every job or every part of it is studied in detail.
c. This technique is based on the study of an average worker having reasonable skill and ability.
d. Average worker is selected and assigned the job and then with the help of a stop watch, time is
ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determined through observations, experiment
and analysis by keeping in view an average worker.

Standard Time × Working Hours = Fair Day’s Work

f. Motion Study
a. In this study, movement of body and limbs required to perform a job are closely
observed.
b. In other words, it refers to the study of movement of an operator on machine involved
in a particular task.
c. The purpose of motion study is to eliminate useless motions and determine the bet way
of doing the job.
d. By undertaking motion study an attempt is made to know whether some elements of a
job can be eliminated combined or their sequence can be changed to achieve necessary
rhythm.
e. Motion study increases the efficiency and productivity of workers by cutting down all
wasteful motions.
g. Functional Foremanship

a. Taylor advocated functional foremanship for achieving ultimate specification.

b. This technique was developed to improve the quality of work as single supervisor may
not be an expert in all the aspects of the work.
c. Therefore workers are to be supervised by specialist foreman.
d. The scheme of functional foremanship is an extension of principle pf specialization at
the supervisory level.
e. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at
implementation level.
f. The names & function of these specialist foremen are: -
 Instruction card clerk concerned with tagging down of instructions according to
which workers are required to perform their job
  Time & cost clerk is concerned with setting a time table for doing a job &
specifying the material and labor cost involved in it.
 Route clerk determines the route through which raw materials has to be passed.
 Shop Disciplinarians are concerned with making rules and regulations to ensure
discipline in the organization.
 Gang boss makes the arrangement of workers, machines, tools, workers etc.
 Speed boss concerned with maintaining the speed and to remove delays in the
production process.
 Repair boss concerned with maintenance of machine, tools and equipments.
 Inspector is concerned with maintaining the quality of product.
h. Standardization
a. It implies the physical attitude of products should be such that it meets the
requirements & needs of customers.
b. Taylor advocated that tools & equipments as well as working conditions should be
standardized to achieve standard output from workers.
c. Standardization is a means of achieving economics of production.
d. It seems to ensure -
 The line of product is restricted to predetermined type, form, design, size,
weight, quality. Etc
 There is manufacture of identical parts and components.
 Quality & standards have been maintained.
 Standard of performance are established for workers at all levels.
i. Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker.
b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no. of pieces are paid
wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
d. This system is a source of incentive to workers who improving their efficiency in order to
get more wages.
e. It also encourages inefficient workers to improve their performance and achieve their
standards.
f. It leads to mass production which minimizes cost and maximizes profits.
j. Other Techniques
a. Various other techniques have been developed to create ordeal relationship between
management and workers and also to create better understanding on part of works.
b. Those includes use of instruction cards, strict rules & regulations, graphs, slides, charts
etc, so as to increase efficiency of workers.

Criticism of Scientific Management

Although it is accepted that the scientific management enables the management to put resources
to its best possible use and manner, yet it has not been spared of severe criticism.
Workers Viewpoint

1. Unemployment - Workers feel that management reduces employment opportunities from them
through replacement of men by machines and by increasing human productivity less workers
are needed to do work leading to chucking out from their jobs.
2. Exploitation - Workers feel they are exploited as they are not given due share in increasing
profits which is due to their increased productivity. Wages do not rise in proportion as rise in
production. Wage payment creates uncertainty & insecurity (beyond a standard output, there is
no increase in wage rate).
3. Monotony - Due to excessive specialization the workers are not able to take initiative on their
own. Their status is reduced to being mere cogs in wheel. Jobs become dull. Workers loose
interest in jobs and derive little pleasure from work.
4. Weakening of Trade Union - To everything is fixed & predetermined by management. So it
leaves no room for trade unions to bargain as everything is standardized, standard output,
standard working conditions, standard time etc. This further weakens trade unions, creates a rift
between efficient & in efficient workers according to their wages.
5. Over speeding - the scientific management lays standard output, time so they have to rush up
and finish the work in time. These have adverse effect on health of workers. The workers speed
up to that standard output, so scientific management drives the workers to rush towards output
and finish work in standard time.

Employer’s Viewpoint

1. Expensive - Scientific management is a costly system and a huge investment is required in

establishment of planning dept., standardization, work study, training of workers. It may be
beyond reach of small firms. Heavy food investment leads to increase in overhead costs.
2. Time Consuming - Scientific management requires mental revision and complete reorganizing of
organization. A lot of time is required for work, study, standardization & specialization. During
this overhauling of organization, the work suffers.
3. Deterioration of Quality

Frederick Taylor and Scientific Management

Frederick Winslow Taylor (1856-1915) was an American inventor and engineer that applied
his engineering and scientific knowledge to management and developed a theory called scientific
management theory. His two most important books on his theory are Shop Management (1903)
and The Principles of Scientific Management (1911).

Frederick Taylor's scientific management theory can be seen in nearly all modern manufacturing
firms and many other types of businesses. His imprint can be found in production planning,
production control, process design, quality control, cost accounting, and even ergonomics. If you
understand the principles of scientific management, you will be able to understand how
manufacturers produce their goods and manage their employees. You will also understand the
importance of quantitative analysis, or the analysis of data and numbers to improve production
effectiveness and efficiency.
 PRINCIPLES OF SCIENTIFIC
MANAGEMENT THEORY
In broad terms, scientific management theory is the application of industrial engineering
principles to create a system where waste is avoided, the process and method of production is
improved, and goods are fairly distributed. These improvements serve the interests of employers,
employees, and society in general. Taylor's theory can be broken down into four general
principles for management:

1. Actively gathering, analyzing, and converting information to laws, rules, or even mathematical
formulas for completing tasks.
2. Utilizing a scientific approach in the selection and training of workers.
3. Bringing together the science and the worker so that the workers apply the scientifically
developed techniques for the task.
4. Applying the work equally between workers and managers where management applies scientific
techniques to planning and the workers perform the tasks pursuant to the plans.

Frederick Taylor approached the study of management quantitatively through the collection and
analysis of data. For example, he and his followers performed motion studies to improve
efficiency. He analyzed the motions required to complete a task, devised a way to break the task
down into component motions, and found the most efficient and effective manner to do the work.

An example of a motion study is observing the number of distinct motions required to shovel
coal into a furnace. The task is then broken down into its distinct components, such as picking up
the shovel, walking to the coal, bending over, manipulating the shovel to scoop the coal, bending
back up, walking to the furnace, and manipulating the shovel to deposit the coal. The most
efficient way to perform the task was developed and workers were instructed on how to apply the
method.

Study of Fayol and Taylor

Both the persons have contributed to development of science of management. The contribution
of these two pioneers in the field of science of management has been reviewed as “The work of
Taylor & Fayol was, of course, especially complementary. They both realized that problem of
personnel & its management at all levels is the key to individual success. Both applied scientific
method to this problem that Taylor worked primarily from operative level, from bottom to
upward, while Fayol concentrated on managing director and work downwards, was merely a
reflection of their very different careers”. They both differ from each other in following aspects:
-
 1. Taylor looked at management from supervisory viewpoint & tried to improve efficiency at
operating level. He moved upwards while formulating theory. On the other hand, Fayol analyzed
management from level of top management downward. Thus, Fayol could afford a broader
vision than Taylor.
2. Taylor called his philosophy “Scientific Management” while Fayol described his approach as “A
general theory of administration”.
3. Main aim of Taylor - to improve labor productivity & to eliminate all type of waste through
standardization of work & tools. Fayol attempted to develop a universal theory of management
and stressed upon need for teaching the theory of management.
4. Taylor focused his attention on fact by management and his principles are applicable on shop
floor. But Fayol concentrated on function of managers and on general principles of management
wheel could be equally applied in all.

Similarity - Both emphasized mutual co-operation between employment and employees.

Spheres of Human Activity

Fayol’s theory is more widely applicable than that of Taylor, although Taylor’s philosophy has
undergone a big change Under influence of modern development, but Fayol’s principles of
management have stood the test of time and are still being accepted as the core of management
theory.

Psychologists View Point

According to Psychologists, Taylor’s study had following drawbacks: -

1. Ignores human factors - Considers them as machines. Ignores human requirements, want and
aspirations.
2. Separation of Planning and Doing.
3. Dissatisfaction - Comparing performance with others.
4. No best way - Scientific management does not give one best way for solving problems.

Basis Taylor Fayol

Human aspect Taylor disregards human elements Fayol pays due regards on human element.
and there is more stress on E.g. Principle of initiative, Espirit De’ Corps
improving men, materials and and Equity recognizes a need for human
methods relations

Status Father of scientific management Father of management principles

Efficiency & Stressed on efficiency Stressed on general administration

 administration

Approach It has micro-approach because it is It has macro-approach and discuses general

restricted to factory only principles of management which are
applicable in every field of management.

Scope of These principles are restricted to These are applicable in all kinds of
principles production activities organization regarding their management
affairs

Achievement Scientific management Administrative management

CHESTER BARNARD(group)
Chester Barnard was one of the Harvard Circle of American management theorists, of which
Elton Mayo was another prominent member. At a time when communism seemed a real threat,
Barnard came to believe that social science could be the key to establishing a stable society. His
work centred on a description of the organisation as a co-operative system, and described an
optimal organisation structure, focusing on the role of executives in creating the conditions for
effectiveness and efficiency.

Life and career

Born the son of a mechanic in 1886 in New England, Chester Barnard left school early to work
as a piano tuner for two years, then enrolled at a Massachusetts prep school to prepare for
Harvard entry. He did not quite finish his Harvard course due to lack of funds, and instead
became a businessman, working for ATT for 40 years and rising to become President of the New
Jersey Bell Telephone company in 1927. He undertook government service during World War
Two, then in 1948 was elected President of the Rockefeller Foundation.

Although he was not an academic but a practising business leader, Barnard wrote a book called
The functions of the executive in 1938, which Andrea Gabor has described as the century's
seminal book on corporate leadership (in Capitalist philosophers, Wiley, 2000). Barnard also
authored several papers, a selection of which were published in Organization and
management: selected papers (1948).
Barnard died in 1961, just two months after he had given an interview to management professor,
William Wolf. The resulting book, Conversations with Chester I. Barnard, covered many
aspects of Barnard's thinking.

Key theories
Organisation and communication

Chester Barnard's key ideas centre on the importance of individuals and communication to
organisation structure. His writing, while conveying the practical experience upon which it is
based, is often quite theoretical, and the difficult terminology can make it hard to follow. The
ideas presented are part of a holistic managerialist philosophy proposing that managers in large
organisations should be as dedicated to social reform and modernisation as their governmental
counterparts, with the moral authority to harness technology and markets for the public good.

In The functions of the executive he defines an organisation as a system of consciously co-

ordinated activities or forces of two or more persons. Two key words used in this definition are
system and co-ordinated. Barnard saw a successful organisation as a co-operative system in
which effective communication enables individuals to achieve much more collectively than they
could in isolation. With this view, Barnard was the first to utilise the systems approach to
management. He believed that organisational survival and success depended on the creation of
co-operation by managers, and their navigation of the tension between individuals' personal
motives (which he called efficiency) in order to satisfy the objectives of the organisation (which
he called effectiveness) to achieve a balance between the two.

The functions of the executive

In simple terms, Barnard saw the three main functions of an executive to be:

 Implementation and development of an effective system of communication

 Appointment and retention of effective workers
 Motivation of workers.

Viewing the communication system in an organisation as the key to organisational achievement,

Barnard set out three principles for effective communication:

 Everyone in the organisation must know what the channels of communication are
 Everyone must have access to a formal communication channel
 Lines of communication should be kept short and direct.

As part of his communications theory, Barnard's acceptance theory of authority proposes that a
manager exerts authority from above, and success depends on its acceptance by the employees
managed. In this way, employees determine how authoritative their manager is and, for this
reason, the main focus of an executive needs to be on creating the right conditions to increase
acceptance levels. Barnard suggested that this could be done if:
  Managers are clear in what they ask employees to do,
 employees understand what their manager wants them to do, and
 employees are capable of complying.

Employees must also understand how their work helps to achieve organisational objectives.

Barnard also saw a need for executives to focus on strategy, and in The functions of the
executive he outlined the process of strategic planning, which he saw as vital to putting the
organisation on the road to achieving its overall objectives.

Authority and the informal organisation

One of the most important ways in which Barnard proposed that executives can increase
employees' acceptance of their authority and orders is through their recognition and use of three
zones, setting boundaries within which people evaluate orders, defined as zones of indifference,
neutrality and unacceptability. The Zone of Indifference for orders is the highest acceptable
range within which orders will be obeyed, and Barnard believed that managerial work involved
widening this zone through the use of inducements and incentives. With seemingly modern
insight, he suggested that material incentives were insufficient, and that personal incentives, such
as increased power or prestige, would be more effective.

Gabor claims that Barnard was the first theorist to elaborate on the importance of the informal
organisation, and recognise the influence of what is now understood as corporate culture and its
associated values and rituals. Barnard emphasised the executive's important role in maintaining
the informal organisation through using intangible influence to shape values and promote
conformity and self-discipline. He believed that values should be in-built and coherent with all
the other aspects of the organisation to promote organisational success. This is closely related to
his acceptance theory of authority, since acceptance will be greater where employees believe that
actions will contribute to the common organisational goal.

In perspective

Chester Barnard's ideas were people-focused, stressing the attention that must be paid to informal
aspects of the organisation. His work fits within, and was probably influenced by, the human
relations school of management thinking that emerged from the 1920s with the Hawthorne
Studies. The human relations school adopted a behavioural approach to management, which is
prominent in Barnard's ideas.

Barnard was very influential in his time, and can be seen as one of the founders of organisation
theory. At a time when classical management predominated, focusing largely on principles, he
placed a new emphasis on the social aspects of the organisation. His ideas contrasted with those
of Taylor and Max Weber in that, rather than seeing management as a scientific process, Barnard
saw its informal, human side as well. Peters and Waterman, in their classic book In search of
excellence (1982), suggested that Barnard's work probably gave the management process its first
balanced treatment. A 1968 introduction to Barnard's key work by Kenneth Andrews claimed
that The functions of the executive remained the most thought-provoking book on organisation
and management ever written by a practising executive.

Barnard's ideas were built upon by writers from the human relations school, such as Douglas
McGregor and Abraham Maslow, and also by authors advocating the systems approach to
organisations and management that was prominent in the 1960s.

The human relations approach became supplanted by the human resources approach during the
1980s and, although Barnard's ideas remained prominent for many years, they fell from favour in
America and Europe. Jay Chandran, the author of a 1999 paper The relevance of Chester
Barnard for today's manager, suggests that his obscurity is partly due to his laboured writing
style. However, Barnard's work is still popular in Japan, where his ideas are considered
influential.

Other management researchers have since validated many aspects of his theory. According to
Henry Mintzberg, for example, Barnard was right to stress that the main function of an executive
is to develop an effective communication system. In The nature of managerial work,
Mintzberg showed that managers spend more than three-quarters of their work time engaged in
communication.

Barnard's ideas on values, and the way that executives must manage them to ensure
organisational success, did not find popularity at the time. But in the 1970s the ideas resurfaced,
and have now become an important part of management theory in the form of topics such as
corporate social responsibility, business ethics, and organisational culture.

Today, some aspects of Barnard's ideas have become outdated. What was ground breaking in the
1930s and in a post-war environment has lost some of its applicability in the twenty-first century,
but Barnard played a very important role in management history. While his work is not read as
widely as it used to be, his books retain immense importance for the study of management.

FRANK AND LILLIAN GILBRETH

Frank and Lillian Gilbreth were a married American couple. Both were engineers and had an
interest in scientific management, and Time and Motion Studies, working at a time with
Frederick Taylor, the Father of Scientific Management. Together, they raised twelve children in
New Jersey.

They are also known through the book and movie Cheaper by the Dozen, which was written by
their son Frank Jr. and their daughter Ernestine. The book and movie cover their family life, and
also some of their works as engineers. For example, there are scenes which depict the Gilbreth’s
conducting a tests, such as testing to determine the most efficient way to button up a vest, and
using a stopwatch to help in their investigation. Another example would be Frank Gilbreth
demonstrating, while fully clothed, the most efficient way to bath one’s self, using the least
amount of time and least number of motions necessary.

Frank Gilbreth was a building contractor who, though not having an any formal education
beyond high school, and not a disciple of Taylor, was interested in and worked at achieving
efficiency in the workplace. In his workplace, much like Taylor, he helped the company he
worked for to enable the workers to do their jobs efficiently.

Lillian Gilbreth was a well educated woman, having obtained her bachelor’s degree in English
Literature, her Masters, and her Doctorate at the University of California, Berkley. She worked
alongside her husband in their pursuit of Time and Motion Studies.

By the time the Gilbreth’s came into contact with Taylor, they were not beginners in Time and
Motion Studies, having conducted their own research and tests. They would work together in
delving deeper in Time and Motion Studies, helping workers achieve their full potential in the
workplace by providing them with ways to increase their efficiency.

After facing bankruptcy in 1912, Frank devoted himself fully to the pursuit of Taylorism and
Time and Motion Studies.

Both Frank and Lillian made great contributions to the Time and Motion Studies. They often
used their children as subjects in their experiments. One of the main differences between
Taylor’s and the Gilbreth’s work with Time and Motion Studies was their focus. Taylor was
focused with achieving efficiency through the quickness of a task being done, the scientific tool
he is often associated with being the stopwatch. The Gilbreth’s on the other hand were more
focused on reducing the number of motions needed to achieve a goal or task. They did use the
stopwatch, but they were more interested in finding ways to reduce motion and were more
concerned with the well being of the worker. Taylor interests were more directed toward
production and profit and the workers were able to see the difference between Taylor’s approach
and the Gilbreth’s approach.

While Taylor and the Gilbreth’s supported and advocated for each other, sometime even working
together, having different focuses caused tension between them. The officially parted ways after
Taylor had another of his disciples, Horace K. Hathaway finish a job with the company
Herrmann-Aukam, with whom Gilbreth was originally working with before being replaced. In
response he communicated to his wife, Lillian, “We must have our own organization and we
must have our own writings so made that the worker thinks we are the good exception.” From
then on, the Gilbreth’s kept their works and writings a secret from Taylor and his disciples.
However, it is still not always clear at times who to credit certain works to because Taylor and
the Gilbreth’s had worked together, before their rift, on Time and Motion Studies.

Frank died of a heart attack in a railway station at Montclair, New Jersey at the age of 55 in
1924. He left behind his twelve children and his wife, who continued raising the children while
furthering her work with Time and Motion Studies. Lillian surpassed her husband by almost fifty
years, passing away in 1972.
THEORIES OF MARY PARKER FOLLETT
MADE SIMPLE

Born on September 3rd 1868, Mary Parker Follett was the eldest child in her family. They lived
in Quincy of Massachusetts. Before giving into alcoholism, her father worked at a shoe factory.
He eventually became sober, but his new permanent job was not enough to feed the entire
family, forcing them to go live with his father. In 1885, both passed away, but it did not have
financial effect on Mary and her family. There was a good amount of property which helped
them lead a good life as well as pay for her education.

She got into Cambridge University, England, but before she could graduate, she was called back
to United States because of her mother’s illness. She finally received Bachelor of Arts degree
from Radcliffe, a part of Harvard University made mainly for women. Later she went onto
finishing her postgraduate study in France.

Her first profession was in social work which helped her gain management experience. As a
social worker, she tried to solve the political and financial problems related to establishment of
evening centers for public schools situated in Boston. This allowed her to gain popularity
nationwide. She also brought about innovation in other community centers of the region, making
them an example for the nearest and farthest cities.

In 1925, a new career came into her life. She chose to become an industrial management lecturer.
Psychology and political science were always of great interest to her, but her management
experience combined with them brought about organizational theories no one could think of at
the time. They are found in her three books: Speaker of the House of Representatives, The New
State and Creative Experience. Her papers and lectures were later published in two books titled
as Dynamic Administration: The Collected Papers of Mary Parker Follett and Freedom and
Coordination: Lecture in Business Organization. Now let’s take a look at some of

Management and the Manager

Undoubtedly, the business management education today is pretty much influenced by what she wrote
in her books. In her view, management is ‘the art of getting things done through people’. But with that,
she emphasizes the need to introduce scientific standard to business management. According to her,
business management has two parts. The first includes technical knowledge which can be learned. The
second one has to do with knowledge of how to interact with employees and all others connected to the
business. Follett then states that despite the differences between the two, there is no way to separate
them. Consequently, there should be a way to apply science to human relations connected to
management. Another important thing required is to evaluate the job of the manager in a way that he is
no more seen as different from his employees.

The steps to arrange business management education is her another contribution. To carry it out, she
prescribes scientific method. The first step here is to research managing process constantly. Experiments
should never be dropped. The conclusions then must be turned into knowledge to shape up the
business management education.

4 Principles of the Organization

Another emphasis of Follett is coordination. She believes that the main task of every organization is to
coordinate the labors of all employees to come up with one functional unit. She explains this by using a
machine as an example. If all its parts are not assembled properly there is no way to make it work. But
overall, an organization must have the following 4 principles:

1. Coordination by direct contact among the people involved in fulfilling policies of the
organization. 
2. Coordination in the early stages of setting policies so they may be influenced and designed by
those who will be fulfilling them.
3. Coordination as the reciprocal relating of all the factors in a situation and that means the
organization should consider all the things of its environment. 
4. Coordination is a continuing process, hinting that all the above should always be part of an
organization.

Authority 
Her coordination principles are very much connected to her concept called law of the situation. Through
it, she explains that authority is situational and not based on individual and job position. In other words,
employees do their work to meet the demand of the situation and not to fulfill the instruction of their
managers. This way it is the situation that creates the instruction. Both the managers and their
employees should surrender to that.

Secondly, there is nothing called ultimate obligation and authority. They are merely a phantasm. The
truth is that obligation is the total obligations of all working towards a specific goal in the organization.
Meanwhile, since authority is situational, it should never be taken as personal.

Third, authority must be matched with the knowledge and experience required to perform a specific job.
This must be true for both top officials and lower level employees.
Group Process
Above we have seen how Follett is always using the group to be her main focus. But why that is so?
Follett has always been highly optimistic about its potential. In fact, she explains that the main reason
why a group forms is because its members wish to create something. Also a group in theory is so logical
and consistent that running it properly can make its members share each other’s thoughts and efforts
which eventually help them become like-minded and cooperative.

How is that possible? According to her, the individuals and a society within which all of us are one group
are not independent entities. Both affect each other. An individual learns and changes himself according
to what he experiences within a society. Similarly, the society is dependent on what he gives to it from
his new learned materials and changes. Thus, it’s a relationship of give and take which when shaped
properly creates social evolution.

PEOPLE ORIENTATION AND GROUP NETWORK

MANAGEMENT
When Mary Parker Follett, a social worker and management consultant, talked about issues like
the importance of people-oriented, group network management through group interaction and
shared power between managers and employees in business, she was actually pioneering the
notion of participative leadership. Participative leadership involves managers and employees
working together towards common goals like decision-making and problem-solving. Managers
participate in decisions and support employees with resources needed to accomplish goals.

When Smitty broke his leg and needed surgery, he knew he would have to visit many different
treatment facilities. Getting appointments with a general doctor, a surgeon, a physical therapist, a
social worker and maybe even a plastic surgeon could be a lengthy and tedious process. Smitty
made hundreds of phone calls to individual practitioners only to find the process difficult to
manage. He decided to use One-Stop Medical Associates for all of his treatment and care
because of the team approach they take to caring for patients.

One-Stop uses people-oriented management. People-oriented management is a participative

leadership style that involves including employees in making important company decisions by
equally balancing leader and employee power. This orientation toward shared power and
ownership of responsibility makes resolving conflict much easier.

On his first visit, the team examined Smitty's leg and documented his file. Then, they met in a
conference room to discuss the steps they will take to treat the patient. The doctor and surgeon
talk about their responsibilities. The nurse coordinates with the doctors on her responsibilities,
and the social worker writes her treatment plan. Once the plans are finished, group decisions are
made.

 Surgeon performs the surgery

 General doctor prescribes medicines and monitors patient progress
 Nurse changes bandages and takes blood pressure
  Social worker eases patient's anxieties

As treatment is provided, the group shares information on the patient's current state and his
progress towards recovery. Each detail is discussed and used to make decisions about future
treatments. Although each practitioner has their own area of specialization, as a team, they are
able to make contributions about the whole treatment plan rather than just their own individual
specialties.

One-Stop also uses a group network management approach to achieve their goals. A group
network management approach involves groups of people within the organization with equal
power over outcomes. These groups work on separate parts of an organization, and each group
contributes pieces together to achieve one organizational goal.

One-Stop Medical balances the power between management and the practitioners. Top
management rarely deals with patients, but they are responsible for the achievement of overall
objectives, like being profitable and providing premium healthcare. Top brass at One-Stop
involve the employees in decisions about patient care, records management and staffing. They
also hold employees accountable for their decisions.

Both people-oriented management and group network management involve small groups
working together to meet overall objectives. It is done through group interactions.

Group Interactions

When decisions are made as a group, each employee feels a stronger commitment to the
outcomes. One-Stop Medical uses group decision-making for total patient care. Each patient is
assigned to a team of different employees. Smitty's general doctor, surgeon, nurse, social worker
and physical therapist discuss his treatment outcomes with each other. These conversations are
known as group interactions.

Group interactions occur when there is positive collaboration between employees who are
socially attracted to one another, have shared goals and have a unique identity that sets them
apart from others in the organization. They lead to:

FOLLETT THE SOCIAL WORKER

Follett was expected to become an academic, but instead she went into voluntary social work in
Boston, where her energy and practicality (as well as her financial support on occasions)
achieved much in terms of community-building initiatives. For over 30 years, she was immersed
in this work, and proved to be an innovative, hands-on manager whose practical achievements
included the original use of schools as out-of-hours centres for community education and
recreation. This was Follett's own idea, and the resulting community centres became models for
other cities throughout America.
Follett set up vocational placement centres in Boston school centres, and represented the public
on the Massachusetts Minimum Wage Board. From 1924, she began to give regular papers
relating to industrial organisation, especially for conferences of the Bureau of Personnel
Administration in New York. She became, in effect, an early management consultant, as
businessmen began to seek her advice about their organisational and human relations problems.

In 1926 and 1928, Follett gave papers for the Rowntree Lecture Conference and to the National
Institute of Industrial Psychology. In 1933, she gave an inaugural series of lectures for the new-
founded Department of Business Administration (now the Department of Industrial Relations) at
the London School of Economics (LSE).

Later in 1933, Follett returned to America, where she died on the 18th December of that year,
aged 65.

Key texts

The New State was written during 1918, and argues for group-based democracy as a process of
government. Through this book, Follett became widely recognised as a political philosopher. It
was based on her social work experience rather than on business organisation, but the ideas it
contains were later applied in the business context.

The New State presented an often visionary interpretation of what Follett viewed as a progress
of social evolution, and the tone is occasionally infused with religious poesy. The text argues that
democracy 'by numbers' should give way to a more valid process of group-based democracy.
This form of democracy is described as a dynamic process through which individual conflicts
and differences become integrated within the search for overall group agreement. Through it,
people will grow and learn as they adapt to one another's views while seeking a common, long-
term good.

The group process works through the relating of individuals' different ideas to each other and to
the common interests of the group as a whole. Appropriate action would, Follett held, become
self-evident during the consultation process. This would eventually reveal a 'law of the situation',
representing an objective which all could see would be the best course for the group as a whole
to pursue. Conflict or disagreement were viewed as positive forces, and Follett considered social
evolution to progress through the ever-continuous integration of diverse viewpoints and opinions
in pursuit of the common good.

The New State envisages the basic group democratic process following right through to the
international level, feeding up from neighbourhoods via municipal and state government levels
into the League of Nations. Sometimes, Follett refers to an almost autonomous group spirit,
which develops from the community between people, as the group process begins to work.

The Creative Experience was also written during 1918, and again focused on democratic
governance, using examples from business to illustrate ideas. Dynamic Management - The
Collected Papers of Mary Parker Follett and Freedom and Co-ordination were both
published posthumously and edited by L Urwick. Freedom and Co-ordination collects together
six papers given by Follett at the LSE in 1933, and these represent the most developed and
concise distillation of her thoughts on business organisation.

Follett's business writings extended her social ideas into the industrial sphere. Industrial
managers, she saw, confronted the same difficulties as public administrators in terms of control,
power, participation, and conflict. Her later writings focused on management from a human
perspective, using the new approach of psychology to deal with problems between individuals
and within groups. She encouraged businessmen to look at how groups formed and how
employee commitment and motivation could be encouraged. The participation of everyone
involved in decisions affecting their activities is seen as fundamental, in that Follett viewed
group power and management through co-operation as the obvious route to achievements that
would benefit all.

Follett's views on power, leadership, authority and control

Follett envisioned management responsibility as being diffused throughout a business rather than
wholly concentrated at the hierarchical apex. Degrees of authority and responsibility are seen as
spread all along the line. For example, a truck driver can act with more authority than the
business owner in terms of knowing most about the best order in which to make his drops.
Leadership skills are required of many people rather than just one person, and final authority,
while it does exist, should not be over-emphasised. The chief executive's role lies in co-
ordinating the scattered authorities and varied responsibilities that make up the organisation into
group action and ideas, and also in foreseeing and meeting the next situation.

Follett's concept of leadership as the ability to develop and integrate group ideas, using 'power
with' rather than 'power over' people, is very modern. She understood that the crude exercise of
authority based on subordination is hurtful to human beings, and cannot be the basis of effective,
motivational management control. The power of single individuals, Follett considered, could
erode overall organisational and social achievement, and she advocated the replacement of
personal power with the authority of task or function and with the 'law of the situation' as
revealed through group process consultation. Partnership and co-operation, she sought to
persuade people, was of far more ultimate benefit to everyone than hierarchical control and
competition.

Follett viewed the group process as a form of collective control, with the interweaving
experience of all who are performing a functional part in an activity feeding into decision-
making. Thus, control is realised through the co-ordination of all functions rather than imposed
from the outside.

Follett's four fundamental principles of organisation

Follett identified four principles that she considered basic to effective management co-
ordination:

1. Coordination as the 'Reciprocal Relating' of all factors in a situation - relating the factors in a
situation.
 2. Coordination by direct contact - direct communication between all responsible people involved,
whatever their hierarchical or departmental positions.
3. Coordination in the early stages - involving all the people directly concerned, right from the
initial stages of designing a project or forming a policy.
4. Coordination as a continuing process - keeping co-ordination going on a continuous basis, and
recognising that there is no such thing as unity, but only the continuous process of unifying.

The context of evolutionary progress

Follett's thinking was ahead of her time, yet was founded on a conviction of social, evolutionary
progress which, from our hindsight perspective, is flawed by the course of subsequent history.
She lived through momentous times, when social and technological change seemed to make a
new order inevitable. The destruction caused by the First World War also seemed to dictate the
clear need for a determined effort to create a social order which would not break down so
disastrously. Simultaneously, the war created pressures in both England and America to include
labour participation in management, and led to a growth in internationalist ideas and to the birth
of the League of Nations. Like other writers of the time, Follett made leaps of the imagination
that grew out of the factual changes that were actually taking place. Her view was rational and
progressive, and she could not know the degree to which some things would remain constant,
undermining the apparently inevitable dynamic of social 'progress'.

From the end of the same century which Follett saw begin, we have only too full a knowledge of
the Second World War, and countless other conflicts, of the discrediting of Russian
Communism, and of worsening ethnic divisions and continuing human barbarities. The
progressive, internationalist vision seems to be, from our contemporary perspective, a fast-
receding dream.

Yet, while Follett's optimistic expectation of radical social change were largely mistaken, she
drew from it the imaginative vision to transform at least some of her convictions into ideas about
ways of living and working that have contributed much to both social and management practice.
In fact, it is almost disheartening to read Follett and realise that she clearly and strongly stated,
so many years ago, ideas that are being proffered as 'new' today and that are still rarely practised
in any sustained way.

HAWTHORNE EXPERIMENTS
The Hawthorne experiments were groundbreaking studies in human relations that were
conducted between 1924 and 1932 at Western Electric Company's Hawthorne Works in Chicago.
Originally designed as illumination studies to determine the relationship between lighting and
productivity, the initial tests were sponsored by the National Research Council (NRC) of the
National Academy of Sciences. In 1927 a research team from the Harvard Business School was
invited to join the studies after the illumination tests drew unanticipated results. Two additional
series of tests, the relay-assembly tests and the bank-wiring tests, followed the illumination tests.
The studies assumed the label Hawthorne experiments or studies from the location of the
Western Electric plant. Concluded by 1932, the Hawthorne studies, with emphasis on a new
interpretation of group behavior, were the basis for the school of human relations.

ILLUMINATION TESTS

In the early 1920s Chicago's Western Electric Hawthorne Works employed 12,000 workers. The
plant was a primary manufacturer of telephones, and in 1924 the company provided a site to
cooperate with the NRC on a series of test room studies to determine the relationship between
illumination and worker efficiency. The basic idea was to vary and record levels of illumination
in a test room with the expectation that as lighting was increased, productivity would too. In
another test room, illumination was decreased, with the correlating expectation that efficiency
would decrease. The electric power industry provided an additional impetus for these tests,
hoping to encourage industries to use artificial lighting in place of natural light. The Illuminating
Engineering Society's Committee on Research also supported the tests and cooperated with the
NRC. From the fall of 1924 to the spring of 1927, three series of tests were conducted and
carefully monitored. Three departments at the Hawthorne plant were involved—relay
assembling, coil winding, and inspection. Workers were notified of the tests in order to attempt
to control interference from human factors. When production increased in each test period,
researchers looked to other factors such as increased supervision and a sense of competition that
developed between the test and control groups. But the one conclusion the impressive team of
industrial specialists and academics discovered was the lack of a consistent correlation between
lighting levels and product output. No further tests were planned originally, but researchers were
surprised at the unanticipated results.

NRC representatives and the engineers involved drew several conclusions. First, illumination
was one factor in output but not the most important. More important to the tests was the
realization there was not a simple answer to the issue of illumination and worker productivity
and that other factors that were not controlled presented a problem with the test results—the
issue of human factors. In retrospect, researchers from the NRC and the Illuminating
Engineering Society (which together formed the Committee on Industrial Lighting) stated they
were not surprised by the test results. They even predicted that other factors would affect the
results, but their mandate was to isolate other variables, and the Hawthorne studies continued.

RELAY-ASSEMBLY TESTS

In order to observe the impact of these other factors, a second set of tests was begun before the
completion of the illumination studies on April 25, 1987. The relay-assembly tests were designed
to evaluate the effect rest periods and hours of work would have on efficiency. Researchers
hoped to answer a series of questions concerning why output declined in the afternoon: Did the
operators tire out? Did they need brief rest periods? What was the impact of changes in
equipment? What were the effects of a shorter work day? What role did worker attitudes play?
Hawthorne engineers led by George Pennock were the primary researchers for the relay-
assembly tests, originally intended to take place for only a few months. Six women operators
volunteered for the study and two more joined the test group in January 1928. They were
administered physical examinations before the studies began and then every six weeks in order to
evaluate the effects of changes in working conditions on their health. The women were isolated
in a separate room to assure accuracy in measuring output and quality, as temperature, humidity,
and other factors were adjusted. The test subjects constituted a piece-work payment group and
efforts were made to maintain steady work patterns. The Hawthorne researchers attempted to
gain the women's confidence and to build a sense of pride in their participation. A male observer
was introduced into the test room to keep accurate records, maintain cordial working conditions,
and provide some degree of supervision.

The women were employed in assembling relays or electromagnetic switches used in switching
telephone calls automatically. The women assembled the more than 35 parts of the relay by
hand. The relays were then carefully inspected. The entire process was highly labor intensive and
the speed of assembly had an obvious effect on productivity.

Initially the women were monitored for productivity, then they were isolated in a test room.
Finally, the workers began to participate in a group payment rate, where extra pay for increased
productivity was shared by the group. The other relay assemblers did not share in any bonus pay,
but researchers concluded this added incentive was necessary for full cooperation. This single
difference has been historically criticized as the one variable having the greatest significance on
test results. These initial steps in the relay-assembly studies lasted only three months. In August,
rest periods were introduced and other changes followed over the rest of the test period,
including shortened work days and weeks. As the test periods turned from months into years,
worker productivity continued to climb, once again providing unexpected results for the
Hawthorne team to evaluate.

Productivity increased in excess of 30 percent over the first two and-a-half years of the studies
and remained steady for the duration of the tests. The physicals indicated improved worker
health and absenteeism decreased. By their own testimony, the women expressed increased
satisfaction with all aspects of their jobs. Researchers tentatively concluded that performance and
efficiency improved because of the rest periods, relief from monotonous working conditions, the
wage incentive, and the type of supervision provided in the test environment. After additional
study and consideration, the first two factors were rejected and further tests were conducted in an
attempt to verify the effects of incentives and working conditions. The results were still not
totally conclusive. Finally, researchers realized worker attitudes within the group were influential
as was the more personal atmosphere of the test room. They concluded factors such as lighting,
hours of work, rest periods, bonus incentives, and supervision affected workers, but the attitudes
of the employees experiencing the factors were of greater significance. As a result, the
Hawthorne team decided not to pursue similar studies. Almost as significant during the relay
assembly tests was the introduction of a team of academics from the Harvard Business School
into the experiments. Led by professors Elton Mayo and F. J. Roethlisberger, this new group of
researchers would have an enormous impact on the Hawthorne studies and the future of human
relations in the workplace.

Mayo's contributions became increasingly significant in the experiments during the interviewing
stages of the tests. Early results from the illumination tests and the relay-assembly tests led to
surveys of worker attitudes, surveys not limited to test participants. From 1928 to 1931, more
than 21,000 individuals were interviewed to survey worker morale in an attempt to determine
specific features of their jobs workers either liked or disliked. The objective was to identify areas
where reasonable improvements might lead to greater job satisfaction and thus increased
efficiency and productivity.

The initial conclusions were disappointing. Interviewers looked for factors concerning job
satisfaction, working conditions, and supervision. What they found was a complex battery of
attitudes influenced by outside factors such as conditions at home or within the community, as
well as one's social situation at work. Researchers began to conclude that prior life experience
had an important influence on worker attitudes, and that manipulation of lighting, pay,
supervision, and working conditions could not solely bring about a desired change. The one
consistent conclusion was that employees felt more positive about the work environment when
an interviewer or listener showed interest. This interviewing technique, the nondirective method,
proved useful to later researchers at Hawthorne and eventually led to an employee counseling
program, now widely practiced in personnel management circles.

BANK-WIRING TESTS

The final stage of the studies was the bank-wiring tests, which began in November 1931. The
foreman of the bank-wiring department resisted the intrusion of observers into his work space
and a bank-wiring test room was set up. The test room housed nine wirers, three solderers, and
two inspectors. All were male between the ages of 20 and 25. Their job was to wire conductor
banks, a repetitive and monotonous task. The banks were one of the major components of
automatic telephone exchange. Between 3,000 and 6,000 terminals had to be wired for a set of
banks. The work was tiring and required the workers to stand for long periods of time. Pay
incentives and productivity measures were removed, but a researcher was placed into the test
room as an observer and the workers were interviewed. The purpose of the bank-wiring tests was
to observe and study social relationships and social structures within a group, issues raised by
two other significant members of the research team, W. Lloyd Warner and William J. Dickson.
Warner was on Mayo's Harvard team, trained as an anthropologist and primarily interested in
Hawthorne from an entirely different perspective, that of an observer of the social behavior of a
group. Dickson was a Hawthorne employee, with an even keener interest in the tests than the
Harvard team; he remained with the company until retiring in 1969. Their contributions were to
adapt social anthropology research methods to industrial conditions. Dickson conducted the
interview phase of the tests. Perhaps the most revealing aspect of the bank-wiring tests was that
the workers combined to slow down production—a clear indication of the need for analysis of
the social relationships of workers. Research showed the most admired worker among the group
was the one who demonstrated the greatest resentment of authority by slowing down production
the most.

The bank-wiring tests were shut down in the spring of 1932 in reaction to layoffs brought on by
the deepening depression. Layoffs were gradual, but by May the bank-wiring tests were
concluded. These tests were intended to study the group as a functioning unit and observe its
behavior. The study findings confirmed the complexity of group relations and stressed the
expectations of the group over an individual's preference. The conclusion was to tie the
importance of what workers felt about one another to worker motivation. Industrial plants were a
complex social system with significant informal organizations that played a vital role in
motivating workers. Employees had physical as well as social needs, and the company gradually
developed a program of human relations including employee counseling and improved
supervision with an emphasis on the individual workers. The results were a reinterpretation of
industrial group behavior and the introduction of what has become human relations.

THE HAWTHORNE LEGACY

The Hawthorne studies were conducted in three independent stages—the illumination tests, the
relay-assembly tests, and the bank-wiring tests. Although each was a separate experiment, the
second and third each developed out of the preceding series of tests. Neither Hawthorne officials
nor NRC researchers anticipated the duration of the studies, yet the conclusions of each set of
tests and the Hawthorne experiments as a whole are the legacy of the studies and what sets them
apart as a significant part of the history of industrial behavior and human relations.

The tests challenged prior assumptions about worker behavior. Workers were not motivated
solely by pay. The importance of individual worker attitudes on behavior had to be understood.
Further, the role of the supervisor in determining productivity and morale was more clearly
defined. Group work and behavior were essential to organizational objectives and tied directly to
efficiency and, thus, to corporate success. The most disturbing conclusion emphasized how little
the researchers could determine about informal group behavior and its role in industrial settings.
Finally, the Hawthorne studies proved beyond certainty that there was a great deal more to be
learned about human interactions in the workplace, and academic and industrial study has
continued in an effort to understand these complex relationships.

Beyond the legacy of the Hawthorne studies has been the use of the term "Hawthorne effect" to
describe how the presence of researchers produces a bias and unduly influences the outcome of
the experiment. In addition, several important published works grew out of the Hawthorne
experience, foremost of which was Mayo's The Human Problems of an Industrial Civilization
and Roethlisberger and Dickson's Management and the Worker. Other books focused on the
various parts of the experiments, and researchers have written countless analyses and histories of
the Hawthorne studies.

The Hawthorne studies have been described as the most important social science experiment
ever conducted in an industrial setting, yet the studies were not without their critics. Several
criticisms, including those of sociologist Daniel Bell, focused on the exclusion of unionized
workers in the studies. Sociologists and economists were the most commanding critics,
defending their disciplinary turf more than offering serious criticisms. For his part, Mayo called
into question research findings of both economists and psychologists. More serious questions
were raised by social scientists who termed the studies bad science due to Mayo's conservative
views. Others expressed serious concerns about undue pressure from corporate interests and
called Mayo and his colleagues "servants of power." Despite these critical views, the flow of
writings on the Hawthorne studies attests to their lasting influence and the fascination the tests
have held for researchers. The studies had the impact of defining clearly the human relations
school. Another contribution was an emphasis on the practice of personnel counseling. Industrial
sociology owes its life as a discipline to the studies done at the Hawthorne site. This, in part, led
to the enormous growth of academic programs in organizational behavior at American colleges
and universities, especially at the graduate level.
Read more: http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Hawthorne-
Experiments.html#ixzz4h5xRHyRk

HAWTHORNE EFFECT
The Hawthorne effect — an increase in worker productivity produced by the psychological stimulus of being
singled out and made to feel important.

Individual behaviors may be altered by the study itself, rather than the effects the study is
researching was demonstrated in a research project (1927 - 1932) of the Hawthorne plant of the
Western Electric Company in Cicero, Illinois. This series of research, first led by Harvard
Business School professor Elton Mayo along with associates F. J. Roethlisberger and William J.
Dickson started out by examining the physical and environmental influences of the workplace
(e.g. brightness of lights, humidity) and later, moved into the psychological aspects (e.g. breaks,
group pressure, working hours, managerial leadership). The ideas that this team developed about
the social dynamics of groups in the work setting had lasting influence — the collection of data,
labor-management relations, and informal interaction among factory employees.

The major finding of the study was that almost regardless of the experimental manipulation
employed, the production of the workers seemed to improve. One reasonable conclusion is that
the workers were pleased to receive attention from the researchers who expressed an interest in
them. The study was only expected to last one year, but because the researchers were set back
each time they tried to relate the manipulated physical conditions to the worker's efficiency, the
project extended out to five years.

Four general conclusions were drawn from the Hawthorne studies:

 The aptitudes of individuals are imperfect predictors of job performance. Although they give
some indication of the physical and mental potential of the individual, the amount produced is
strongly influenced by social factors.
 Informal organization affects productivity. The Hawthorne researchers discovered a group life
among the workers. The studies also showed that the relations that supervisors develop with
workers tend to influence the manner in which the workers carry out directives.
 Work-group norms affect productivity. The Hawthorne researchers were not the first to
recognize that work groups tend to arrive at norms of what is a fair day's work; however, they
provided the best systematic description and interpretation of this phenomenon.
 The workplace is a social system. The Hawthorne researchers came to view the workplace as a
social system made up of interdependent parts.

For decades, the Hawthorne studies provided the rationale for human relations within the
organization. Then two researchers (Franke, Kaul, 1978) used a new procedure called time-series
analyses. Using the original variables and including in the Great Depression and the instance of a
managerial discipline in which two insubordinate and mediocre workers were replaced by two
different productive workers, with one who took the role of straw boss (see note below); they
discovered that production was most affected by the replacement of the two workers due to their
greater productivity and the affect of the disciplinary action on the other workers. The
occurrence of the Depression also encouraged job productivity, perhaps through the increased
importance of jobs and the fear of losing them. Rest periods and a group incentive plan also had
a somewhat positive smaller effect on productivity. These variables accounted for almost all the
variation in productivity during the experimental period. Early social sciences may have readily
to embrace the original Hawthorne interpretations since it was looking for theories or work
motivation that were more humane and democratic.

Along with Frederick Taylor's work, this study gave rise to the field known as “Industrial Psychology” as social
group influences and interpersonal factors must also be considered when performing efficiency research such as
time and motion studies.

Note

Hay is dried grass, sometimes with a little alfalfa thrown in, used as feed for horses and cattle.
Straw, on the other hand, is the stalks of wheat or other grains left over after harvesting the good
parts, and is used primarily for livestock bedding. Since straw is a by-product of the real business
of a farm, “straw boss” is not the main boss of any job, but rather an assistant or subordinate
boss, usually on the level of the foreman of a work crew.  It is now a metaphor for any low-level
supervisor. And since straw bosses rarely wield any real power aside from the ability to make
those under them miserable, straw boss today is often a synonym for a petty and vindictive
superior.

Reference

Franke, R. H. & Kaul, J. D. (1978). The Hawthorne experiments: First statistical interpretation.
American Sociological Review, 1978, 43, 623-643.

Managerial Skills

Management is a challenging job. It requires certain skills to accomplish such a challenge. Thus,
essential skills which every manager needs for doing a better management are called as
Managerial Skills.

According to Professor Robert Katz, there are three managerial skills, viz.,

1. Conceptual Skills,
2. Human Relations Skills, and
3. Technical Skills.

According to Prof. Robert Katz, all managers require above three managerial skills. However,
the degree (amount) of these skills required varies (changes) from levels of management and
from an organisation to organisation.
The above picture or diagram shows the managerial skills which are required by managers
working at different levels of management. The top-level managers require more conceptual
skills and less technical skills. The lower-level managers require more technical skills and fewer
conceptual skills. Human relations skills are required equally by all three levels of management.

1. Conceptual Skills

Conceptual skill is the ability to visualise (see) the organisation as a whole. It includes
Analytical, Creative and Initiative skills. It helps the manager to identify the causes of the
problems and not the symptoms. It helps him to solve the problems for the benefit of the entire
organisation. It helps the manager to fix goals for the whole organisation and to plan for every
situation. According to Prof. Robert Katz, conceptual skills are mostly required by the top-level
management because they spend more time in planning, organising and problem solving.

2. Human Relations Skills

Human relations skills are also called Interpersonal skills. It is an ability to work with people. It
helps the managers to understand, communicate and work with others. It also helps the managers
to lead, motivate and develop team spirit. Human relations skills are required by all managers at
all levels of management. This is so, since all managers have to interact and work with people.

3. Technical Skills
A technical skill is the ability to perform the given job. Technical skills help the managers to use
different machines and tools. It also helps them to use various procedures and techniques. The
low-level managers require more technical skills. This is because they are incharge of the actual
operations.

Apart from Prof. Robert Katz's three managerial skills, a manager also needs (requires) following
additional managerial skills.

4. Communication Skills

Communication skills are required equally at all three levels of management. A manager must be
able to communicate the plans and policies to the workers. Similarly, he must listen and solve the
problems of the workers. He must encourage a free-flow of communication in the organisation.

5. Administrative Skills

Administrative skills are required at the top-level management. The top-level managers should
know how to make plans and policies. They should also know how to get the work done. They
should be able to co-ordinate different activities of the organisation. They should also be able to
control the full organisation.

6. Leadership Skills

Leadership skill is the ability to influence human behaviour. A manager requires leadership skills
to motivate the workers. These skills help the Manager to get the work done through the workers.

7. Problem Solving Skills

Problem solving skills are also called as Design skills. A manager should know how to identify a
problem. He should also possess an ability to find a best solution for solving any specific
problem. This requires intelligence, experience and up-to-date knowledge of the latest
developments.
8. Decision Making Skills

Decision-making skills are required at all levels of management. However, it is required more at
the top-level of management. A manager must be able to take quick and correct decisions. He
must also be able to implement his decision wisely. The success or failure of a manager depends
upon the correctness of his decisions

Mintzberg's Management Roles

Identifying the Roles Managers Play

As a manager, you probably fulfill many different roles every day.

For instance, as well as leading your team, you might find yourself resolving a conflict,
negotiating new contracts, representing your department at a board meeting, or approving a
request for a new computer system.

Put simply, you're constantly switching roles as tasks, situations, and expectations
change. Management expert and professor Henry Mintzberg recognized this, and he argued that
there are ten primary roles or behaviors that can be used to categorize a manager's different
functions.

In this article, we'll examine these roles and see how you can use your understanding of them to
improve your management skills.

The Roles

Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management: Inside
our Strange World of Organizations," in 1990.

The ten roles are:

1. Figurehead.
2. Leader.
3. Liaison.
4. Monitor.
5. Disseminator.
6. Spokesperson.
7. Entrepreneur.
8. Disturbance Handler.
9. Resource Allocator.
10. Negotiator.
From MINTZBERG ON MANAGEMENT by Henry Mintzberg. Copyright © 1989 by Henry
Mintzberg. Reprinted by permission of Free Press, a division of Simon & Schuster, Inc.

The 10 roles are then divided up into three categories, as follows:

Category Roles

Figurehead
Interpersonal Leader
Liaison

Monitor
Informational Disseminator
Spokesperson

Entrepreneur
Disturbance Handler
Decisional
Resource Allocator
Negotiator

Let's look at each of the ten managerial roles in greater detail.

Interpersonal Category

The managerial roles in this category involve providing information and ideas.

1. Figurehead – As a manager, you have social, ceremonial and legal responsibilities. You're
expected to be a source of inspiration. People look up to you as a person with authority, and as
a figurehead.
2. Leader – This is where you provide leadership for your team, your department or perhaps your
entire organization; and it's where you manage the performance and responsibilities of
everyone in the group.
3. Liaison – Managers must communicate with internal and external contacts. You need to be able
to network effectively on behalf of your organization.

Informational Category

The managerial roles in this category involve processing information.

4. Monitor – In this role, you regularly seek out information related to your organization and
industry, looking for relevant changes in the environment. You also monitor your team, in terms
of both their productivity, and their well-being.
5. Disseminator – This is where you communicate potentially useful information to your colleagues
and your team.
 6. Spokesperson – Managers represent and speak for their organization. In this role you're
responsible for transmitting information about your organization and its goals to the people
outside it.

Decisional Category

The managerial roles in this category involve using information.

7. Entrepreneur – As a manager, you create and control change within the organization. This
means solving problems, generating new ideas, and implementing them.
8. Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the
manager who must take charge. You also need to help mediate disputes within it.
9. Resource Allocator – You'll also need to determine where organizational resources are best
applied. This involves allocating funding, as well as assigning staff and other organizational
resources.
10. Negotiator – You may be needed to take part in, and direct, important negotiations within your
team, department, or organization.

Once you've identified your weak areas, use the following resources to start improving your abilities in
each role.

Figurehead

Figureheads represent their teams. If you need to improve or build confidence in this area, start
with your image, behavior, and reputation . Cultivate humility and empathy , learn how to
set a good example at work , and think about how to be a good role model .

Leader

This is the role you probably spend most of your time fulfilling. To improve here, start by taking
our quiz, How Good Are Your Leadership Skills? This will give you a thorough understanding
of your current abilities.

Next, learn how to be an authentic leader , so your team will respect you. Also, focus on
improving your emotional intelligence – this is an important skill for being an effective leader.

Liaison

To improve your liaison skills, work on your professional networking techniques. You may
also like to take our Bite-Sized Training course on Networking Skills.

Monitor

To improve here, learn how to gather information effectively and overcome information
overload . Also, use effective reading strategies , so that you can process material quickly and
thoroughly, and learn how to keep up-to-date with industry news .
Disseminator

To be a good disseminator you need to know how to share information and outside views
effectively, which means that good communication skills are vital.

Learn how to share organizational information with Team Briefings . Next, focus on improving
your writing skills . You might also want to take our communication skills quiz , to find out
where else you can improve.

Spokesperson

To be effective in this role, make sure that you know how to represent your organization at a
conference . You may also want to read our articles on delivering great presentations and
working with the media (if applicable to your role).

Entrepreneur

To improve here, build on your change management skills, and learn what not to do when
implementing change in your organization. You'll also need to work on your problem solving
and creativity skills , so that you can come up with new ideas, and implement them
successfully.

Disturbance Handler

In this role, you need to excel at conflict resolution and know how to handle team conflict .
It's also helpful to be able to manage emotion in your team .

Resource Allocator

To improve as a resource allocator, learn how to manage a budget , cut costs , and prioritize
, so that you can make the best use of your resources. You can also use VRIO Analysis to
learn how to get the best results from the resources available to you.

Negotiator

Improve your negotiation skills by learning about Win-Win Negotiation and Distributive
Bargaining .

You might also want to read our article on role-playing – this technique can help you prepare
for difficult negotiations.

Organization
A social unit of people that is structured and managed to meet a need or to pursue collective
goals. All organizations have a management structure that determines relationships between the
different activities and the members, and subdivides and assigns roles, responsibilities, and
authority to carry out different tasks. Organizations are open systems--they affect and are
affected by their environment.

An organization or organisation is an entity comprising multiple people, such as an institution

or an association, that has a collective goal and is linked to an external environmena Group of
people who work together in an organized way for a shared purpose: the World Health
Organization The article was about the international aid organizations

Definition, Meaning & Characteristic of

Organisation
Article shared by Prasad Morye

Definition, Meaning & Characteristic of Organisation

Meaning of Organisation:

Organisation is the foundation upon which the whole structure of management is built.
Organisation is related with developing a frame work where the total work is divided into
manageable components in order to facilitate the achievement of objectives or goals. Thus,
organisation is the structure or mechanism (machinery) that enables living things to work
together. In a static sense, an organisation is a structure or machinery manned by group of
individuals who are working together towards a common goal.
Alike ‘management’, the term ‘organisation’ has also been used in a number of ways. broadly
speaking, the term ‘organisation’ is used in four different senses: as a process, as a structure of
relationship, as a group of persons and as a system, as given below:

Organisation as a Process: In this first sense, organisation is treated as a dynamic process and a
managerial activity which is essential for planning the utilization of company’s resources, plant
an equipment materials, money and people to accomplish the various objectives.

Organisation as a Framework of Relationship: In the second sense organisation refers to the

structure of relationships and among position jobs which is created to release certain objectives.
The definitions of Henry, Urwick, Farland, Northcourt, Lansburgh and Spriegel Breach, Davis,
Mooney and Reily etc., come under this group. For example: According to Mooney and Reily,
“Organisation is the form of every human association for the attainment of a common purpose.”

Organisation as a Group of persons: In the third sense, organisation is very often viewed as a
group of persons contributing their efforts towards certain goals. Organisation begins when
people combine their efforts for some common purpose. It is a universal truth that an individual
is unable ability and resources. Barnard has defined ‘Organisation’ as an identifiable group of
people contributing their efforts towards the attainment of goals.

Organisation as a System: In the fourth sense, the organisation is viewed as system. System
concepts recognize that organizations are made up of components each of which has unique
properties, capabilities and mutual relationship. The constituent element of a system are linked
together in such complex ways that actions taken by one producer have far reaching effect on
others.

In short, organizing is the determining, grouping and arranging of the various activities deemed
necessary for the attainment of the objectives, the assigning of people to those activities, the
providing of suitable physical factors of environment and the indicating of the relative authority
delegated to each individual charged with the execution of each respective activity.

Definitions of Organisation

Different authors have defined organisation in different ways. The main definitions of
organisation are as follows:

 According to keith Davis, “Organisation may be defined as a group of individuals, large

of small, that is cooperating under the direction of executive leadership in
accomplishment of certain common object.”
 According to Chester I. Barnard, “Organisation is a system of co-operative activities of
two or more persons.”
 According to Louis A. Allen, “Organisation is the process of identifying and grouping the
work to be performed, defining and delegating responsibility and authority, and
establishing relationship for the purpose of enabling people to work most effectively
together in accomplishing objectives.”
 According to Mooney and Railey, “Organisation is the form of every human association
for the attainment of a common purpose.”

Characteristics / Features of Organisation

The main characteristics or Features of organisation are as follows:

Outlining the Objectives: Born with the enterprise are its long-life objectives of profitable
manufacturing and selling its products. Other objectives must be established by the
administration from time to time to aid and support this main objective.
Identifying and Enumerating the Activities: After the objective is selected, the management
has to identify total task involved and its break-up closely related component activities that are to
be performed by and individual or division or a department.

Assigning the Duties: When activities have been grouped according to similarities and common
purposes, they should be organized by a particular department. Within the department, the
functional duties should be allotted to particular individuals.

Defining and Granting the Authority: The authority and responsibility should be well defined
and should correspond to each other. A close relationship between authority and responsibility
should be established.

Creating Authority Relationship: After assigning the duties and delegations of authority, the
establishment of relationship is done. It involves deciding who will act under whom, who will be
his subordinates, what will be his span of control and what will be his status in the organisation.
Besides these formal relationships, some informal organizations should also be developed.

Importance / Need / Advantages / Significance of Organisation

The well-known industrialist of U.S.A. late Andrew Canrnegi, when sold his famous ‘United
State Steel Corporation’, showed his confidence in organisation by uttering the following words,
“Take away our factories, take away our trade, our avenues of transportation, our money, leave
nothing but our organisation, and in four years, we shall re-established ourselves.” Since ages
and in every walk of life, organisation has been playing a vital role. The significance or main
advantages of organisation are as follows:

It Facilitated Administration and management: Organisation is an important and the only tool
to achieve enterprise goals set b administration and explained by management. A sound
organisation increases efficiency, avoids delay and duplication of work, increases managerial
efficiency, increases promptness, motivates employees to perform their responsibility.

It Help in the Growth of Enterprise: Good organisation is helpful to the growth, expansion and
diversifications of the enterprise.

It Ensures Optimum Use of Human Resources: Good organisation establishes persons with
different interests, skills, knowledge and viewpoints.

It Stimulates Creativity: A sound and well-conceived organisation structure is the source of

creative thinking and initiation of new ideas.

A Tool of Achieving Objectives: Organisation is a vital tool in the hands of the management for
achieving set objectives of the business enterprise.
Prevents Corruption: Usually corruption exists in those enterprises which lack sound
organisation. Sound organization prevents corruption by raising the morale of employees. They
are motivated to work with greater efficiency, honesty and devotion.

Co-ordination in the Enterprises: Different jobs and positions are welded together by
structural relationship of the organisation. The organizational process exerts its due and balanced
emphasis on the co-ordination of various activities.

Eliminates Overlapping and Duplication or work: Over lapping and duplication of work
exists when the work distribution is not clearly identified and the work is performed in a
haphazard and disorganized way. Since a good organisation demands that the duties be clearly
assigned amongst workers, such overlapping and duplication is totally eliminated.

Sound or Good Organisation

Organisation is not an end it itself but a means to achieve an end. Whether an organisation is
good or bad depends on the fact as to how much efficiently and promptly it is in a position to
achieve the objectives. An ideal organisation is one which is expected by all. Some people think
that an ideal organisation stands in a dream only and actually it does not exist. However, it is a
wrong concept. An ideal organisation is a reality which can be achieved through the active
cooperation  of all the members of an organisation and also by following the principles of
organisation is not an exact science as physics and chemistry. though a sound organisation is
mainly based on the active cooperation of all the members of the organisation and on certain
principles but also it is based on the capabilities of the individuals available to work along with
its simplicity and flexibility. An organisation conceived and developed on the above lines will
reward its leaders and well as its members (Personnel). Not only will the objectives be achieved
more easily, and conveniently, but the physical operation of the organisation will also be greatly
enhanced. Thus, a sound or good or ideal and result-oriented organisation must posses the
following characteristics.

Realization of Objectives: Organisation is tool of achieving objectives of an enterprise. For this

purpose, the organisation should be divided in several department, sub-departments, branches
and units etc.

Harmonious Grouping of Functions etc: For achieving the organisation objectives there must
be harmonious grouping of functions, jobs and sub-jobs in such a way so that there is action,
consultation and co-ordination without any delay and difficulty.

Reasonable Span of Control: Another characteristic of organisation is that it should have

reasonable span of control. Ordinarily, a person (personnel) cannot control more than five or six
subordinates.
Clear-cut allocation of Duties and Responsibilities: There must be clear-cut allocation of
duties and responsibilities in any scheme of sound organisation. Every executive must know his
scope of activities, the ideal number is three.

Promotion of Satisfaction: The most important element of any human organisation is the
promotion of satisfaction of workers. Man works in a group or in an organisation and hence the
success or failure of any organisation depends on as to how much the organisation is in a
position to provide satisfaction to individuals or group working under him.

Fullest Utilization of Manpower: Another important characteristic of an ideal organisation is as

to how far it is successful in making fullest and economical utilization of the available
manpower.

provision and Development and Expansion: Another important of an ideal organisation is that
there exists the necessary provision for development and expansion so that it is possible to
expand and develop any organisation according to needs and requirements and necessary
changes an alternatives may be made.

Coordination and cooperation: In order to achieve the objectives of the enterprise, there must
be close coordination and cooperation in the activities of everybody working in the organisation.
Further, there should also be active coordination and cooperation amongst the various
departments an sub-departments. It will also assist in elimination the evil of red tapism.

Unity of Command: There must be unity of command. No one in any organisation should report
to more than one line supervisor, and everybody must know to whom he reports and who reports
to him. No subordinate should get orders from more than one supervisor, otherwise it will lead to
confusion, chaos and conflict.

Effective System of Communication: An ideal organisation must possess effective system of

communication. The inter-communication system should be clear and easier and there should be
no ambiguity at and level.

High Morale: An ideal organisation is that in which the workers possess high morale. They
work with full capacity, energy, enthusiasm, devotion and sincerity.

Flexibility: The last but not the least important characteristic of an ideal organisation is that it
should be flexible so that necessary changes an modifications in the the size of the organisation
as well as technology could be easily and conveniently effected.

Principles of Organisation

There is no unanimity as to number of principles of organisation amongst the leading authors on

the subject. L.K. Urwick, in his paper ‘Scientific Principles of Organisation’ (1938) and ‘Notes
on the Theory of Organisation’ (1952) prescribed ten principles of organisation. Thereafter,
many other writers on the subject have added a few more principles of organisation. The main
principles of organisation are as follows:

The Principle of Objective

Every enterprise, big or small, prescribes certain basic objectives. Organisation serves as a tool
in attaining these prescribed objectives. Every part of the organisation and the organisation as a
whole should be geared to the basic objective determined by the enterprise.

Principle of Specialization

Precise division of work facilitates specialization. According to this principles division of work
between the employees must be based on their ability, capability, tasks, knowledge and interest.
This will ensure specialization and specialization will lead to efficiency, quality and elimination
of wastage etc.

The Scalar Principle

The principle is sometimes known as the ‘chain command’. There must be clear lines of
authority running from the top to the bottom of the organisation.

The Principle of Authority

Authority is the element of organisation structure. It is the tool by which a manager is able to
create an environment for individual performance.

The Principle of Unity of Command

One subordinate should be kept in the supervision of one boss only. This principle avoids the
possibility of conflicts in instructions and develops the feeling of personnel responsibility for the
work.

The Principal Span of Control

It is also known as ‘span of management’, ‘span of supervision’ or ‘levels of organisation’, etc.

The Principle of Definition

The contents of every position should be clearly defined. The duties, responsibilities, authorities
and organizational relationship of an individual working on a particular position should be well
defined.

The Principle of the Unity of Direction

The basic rationale for the very existence of organisation is the attainment of certain objectives.
Major objective should be split into functional activities and there should be one objective and
one plan for each group of people.

The Principle of Supremacy of Organisation Objectives

The organisation goals and objectives should be given wide publicity within the organisation.
The people contributing to it, should be made to understand that enterprise objectives are more
valuable and significant and one should place one’s personal motives under it.

The Principle of Balance

In every organisation structure there is need for balance. For effective grouping and assigning
activities, this principle calls for putting balance on all types of factors human, technical as well
as financial.

The Principle of Human Element

This principle indicates that the success or failure of an enterprise largely depends on the
handling of human element. If the organisation has sound labor policies along with a number of
welfare activities it is bound to succeed.

The Principle of Discipline

According to his principle, it is the responsibility of the management to maintain proper

discipline in the enterprise. Fayol considered discipline as ‘respect for agreements which are
directed at achieving obedience, application, energy and outward mark of respect.”

Steps in the Process of Organisation

Organisation means identifying, arranging and integrating different elements of organisation into
efficient working order. It requires the management to follow the following process of
organisation.

Division of work

The main function is divided into sub-functions and entrusted to the different departmental
heads. The result is the establishment of departments like Purchase, Sales, Production, Accounts,
Publicity and Public relations. The departments can be further classified just as production
department into (1) Planning (2) Designing, (3) Operations, (4) Production Control and (5)
Repairs and Maintenance. The division of the work is based upon the fact that specialization is
keynote of efficient organisation.

Grouping of Job and Departmentation

The second step is to group similar or related jobs into larger units, called departments, divisions
or sections. Grouping process is called departmentation.

The department may be based upon functions such as manufacturing, marketing and financing
etc. Department may also be based on products, such as textiles, cosmetic, stationery etc. These
departments may have different sections as per requirement.

Grouping jobs or Departmentation aims at achieving coordination and facilitates unity of efforts.
The departments are linked together on the basis of interdependence. The divided task is
assigned to specific individual or group of individuals who are supposed to be the most qualified
and specialized persons for the task.

Assigning duties

The work to be performed by every individual is clearly defined and made known to him. Every
one must know, what he is required to do in order to avoid any misunderstanding, duplication or
overlapping in the work.

Granting authorities and fixing responsibilities

Assigning of duties to individuals must coincide with the appropriate and relevant authorities.
Every employee must know, what the authorities granted to him and for what and to whom he
will be responsible, liable and accountable.

Delegation of authority

Those who are made responsible for specific tasks are given due authority. Both responsibility
and authority go hand in hand together. Reasonable powers are delegated to heads and
supervisory staff to enable them to do their work with ease and efficiency.

Effective communication

Effective communication is the keynote of efficient organisation. There should be proper

arrangement of communication messages from executives to subordinates and vice-versa. Proper
communication system establishes harmonious relationship between employees and enables
execution of work in the right manner at the appropriate time and in an atmosphere of perfect
mutual adjustment.

Co-ordination of activities for common objectives

Business activity is a team work or the group activity, so the efforts of every employee must be
co-ordinate effectively to achieve the common objectives of the enterprise.

Structure of Organisation

In order to achieve the desired goals, sound and effective organizational structure is necessary.
Organizational structure, as we know is the system of job positions, roles assigned to these
positions and specifying authority, responsibility and task of every positions. The structure
undoubtedly provides basic framework for executive and employees to perform their task
smoothly. The following points must be taken into consideration while building organizational
structure.

Considerations for Building Organizational Structure

Job design

Jobs should be designed in such a way, that job should have specified and defined task to be
performed. Jobs should be designed in such fashion that every individual could contribute his
maximum worth to the enterprise. The major and related activities of the jobs should also be
specified.

Departmentation or Grouping of Identical Jobs

Identical and similar jobs should be grouped together in a department and placed under a
departmental head. Such departmentation will help in building coordination between different
jobs and managers. Departments can be established on different basis. It may have production,
marketing and finance departments, if it is based upon functions.

Span of Control

Under span of control, the number of employees and jobs managed by each manager is specified.
The chain of command is also clearly stated. It is specified that who will report whom is the
smooth performance of his duties. Effective span of control avoids overlapping, duplication and
confusion in the work.

Delegation of Authority

In order to get the job done properly and smoothly, requisite authorities are granted to the
managers. Authority is the power to command employees and instruct them to do a piece of
work. The authority empowers to know certain facts, to enjoy privileged position and command
respect and obedience from employees. Delegation is no doubt, sharing task with requisite
authority with subordinates. As such the manger multiplies himself through delegation.
(A) Functional Structure of Organisation

Grouping together the entire work into major functional departments and entrusting these
departments to functional specialists is known as functional structure of organisation. Each major
function of the enterprise is organized as a separate department. These departments may be
engineering, production, personnel, finance and marketing in a manufacturing company. If it is
retail stores, these departments may be purchase, sales and stores etc as per requirement. The
names of the departments can change as per the requirements, nature and size of the enterprise.

Major functions of the enterprise differ from each other on account of technicalities involved,
specialized education and training needed. However, these functions have common goal of
jhachieving maximum efficiency to maximize overall returns of the enterprise. The functional
heads are provided functional authority over the subordinates under their command.

Functional organisation is the developed form of Taylor’s functional foremanship. In practice,

modern functional organisation is restricted to top level of the organizational structure and not
carried down to the lowest level as recommended by Taylor.

Functional structure of organisation is extensively used these days by almost every enterprise at
different levels. The sales, production, finance and marketing functions are so widely recognized
that almost every enterprise uses it as the basis of Departmentation.

Functional Organisation Structure diagram.

(B) Divisional Structure of Organizations

Grouping of activities or Departmentation on the basis of product lines and areas is known as
divisional structure of organisation. Divisional structure has been finding favor with the multiple
large scale enterprise. Under this structure the top level delegates extensive authorities to the
divisional heads. The divisional head is the in charge of the manufacturing, purchase, sales,
engineering and other departments of the division under his command. He is also made
responsible for the profit or loss of his division.

Product and product line is an important basis for Departmentation. It facilitates the use of
specialized and specialist services of the divisional managers in their product line. He can use his
personal skill and his specialized knowledge for the development of his department.

Organizations having their business all over the country may adopt divisional structure on the
basis of area, such as north division, south division, east, west and central division. The
organisation structure of LIC and Railways is also upon divisional structure.

The manufacturing enterprise producing variety of goods may have different division for
different products such as textile division, plastic division, stationary division etc.

ORGANIZATION AND ITS CHARACTERISTICS

Robbins defines Organization as ' a consciously coordinated social unit, composed of two or more
people, that functions as a relatively continuous basis to achieve common goals of set of goals.
Agrawal defines organization as ' a goal oriented open system composed of people, structure and
technology.

From the above definitions, an organization has the following characteristics-

1. It is an open system.
2. It is a goal oriented.
3. It is a collection of people.
4. Organization consists of people.
5. Organization consists of technology, and
6. It has continuity.

Organization is an open system : An open system means open to environment. Organization exists and
functions in environment. Environment compels the organization to acquire right type of people,
technology and structure so that the goals to serve the environment can be attained. The organization is
thus greatly influence the environment.

Usually the demands or wants of the people determines the strategies and goals of an organization.
What are the needs in the market and how an organization can bring new and needy products to the
market create an interaction between the organization and the environment. Without interaction,
organization cannot fulfill required products or services to the users groups. This way, an organization is
an open system, without which it cannot survive.

Organization is goal oriented : Without goal or set of goals, organization is useless. There is nothing for
the organization to do. Therefore, the major characteristic of any organization is its goal. Type of people
or technology is adopted so that the set goal can be achieved. The goal gives line of action; acquire
required type of people and uses type of technology so that the goal is achieved in an anticipated time
point. Without goal, organization cannot be formed.

Organization is a collection of people : People are the main performers in any organization. In other
world, all the elements of any organization are the same except the people. Even with the same age,
qualification, experience and facilities, the output of the people may vary, simply because the needs and
wants of all people are not the same. What makes them work by heart and head is the one that
differentiate organizations from one to others.

Organization consists of technology : Technology is the means of doing works. There are various kinds
of doing works. As an organization consists of more people, its performance procedure should be of a
fixed type so that each individual in the organization can exercise them well. This is how technology
initiates. Technology eases the work and shortens the time. Technology originates a certain policy
necessary to keep organizational beliefs in doings of the various people at different structural level. This
saves the integrity of the people in achieving goals.

Organization has continuity : As the organization involves people, and the people generate different
needs, they can leave the organization or some may die too. This does not affect the organization to
stop or decrease in size. Hence, it is said that every organization has its own continuity. A good manager
can leave but other better man can take over the charge of the organization.

CAUSES OF CONFLICT IN AN
ORGANIZATION
The causes of conflict fall into three distinct categories. Accordingly, these causes can be
restructured and placed into one of these categories. These categories deal with
communicational, behavioral and structural aspects. Managers must understand the type of
conflict situations so that they spend less time while dealing with them.

Communicational Aspects of Conflict

Poor communication, though not reflecting substantive differences, can have powerful effect in
causing conflict. Misunderstood or partial information during the process of communication can
make a difference between the success and the failure of a task and such failure for which the
responsibility becomes difficult to trace can cause conflict between the sender of the
communication and the receiver of the communication.

Thus the problems in the communication process – whether these problems relate to too much or
too little communication, filtering of communication, semantic problems or noise-act to retard
collaboration and stimulate misunderstanding. The filtering process occurs when information is
passed through many levels or when it passes through many members.

The amount of information is functional up to a point, beyond which it become a source of

conflict. Semantic difficulties arise due to differences in backgrounds, differences in training,
selective perception and inadequate information about others.

As an example, if a manager is going on an extended vacation fails to communicate properly

with his subordinates as to who would be doing what, he will find these jobs only partially done
with subordinates blaming each other for not completing the tasks. Accordingly, adequate,
complete, and correctly understood communication is very important in orderly completion of
tasks, thus reducing the chances of of conflict.
Behavioral Aspects of Conflict

These conflicts arise out of human thoughts and feelings, emotions and attitudes, values and
perceptions and reflect some basic traits of a personality. Thus some people’s values or
perceptions of situations are particularly likely to generate conflict with others.

For example, highly authoritarian and dogmatic persons are more prone to antagonize co-
workers by highlighting minor differences that might exist and may overreact causing a conflict.
This conflict may also be based on personal biases regarding such factors as religion, race or sex.
Some men feel poorly about women workers. These conflicts ore not about issues but about
persons. Some families carry on enmity for generations.

The conflict can also arise due to differing viewpoints about various issues. For example, two
vice-presidents may differ in their viewpoints regarding which strategic plan to implement. The
value based conflicts arise due to different values that may be culturally based. For instance, one
vice-president may want to retire some workers to save costs while another vice-president may
have human sensitivity and support other methods of cutting costs. As another example, a
professor may value freedom of teaching methods and a close supervision of his teaching
technique is likely to induce conflict.

From an organizational behavior point of view, there is conflict between the goals of the formal
organization and the psychological growth of the individual. While the formal organization
demands dependency, passivity and to some degree obedience from its members, the
psychologically developed individuals exhibit independence, creativity and a desire to participate
in decision-making and decision implementing process. The needs of individuals and the formal
organization being inconsistent with each other, result in behavioral conflict.

Structural Aspects of Conflict

These conflicts arise due to issues related to the structural design of the organization as a whole
as well as its sub-units. Some of the structurally related factors are:

Size of the organization: The larger the size of the organization, the more the basis for existence
of conflict. It is likely that as the organization becomes larger, there is greater impersonal
formality, less goals clarity, more supervisory levels and supervision and greater chance of
information being diluted or distorted as it is passed along. All these factors are breeding grounds
for conflict.

Line-staff distinction:  One of the frequently mentioned and continuous source of conflict is the
distinction between the line and staff units within the organization. Line units are involved in
operations that are directly related to the core activities of the organization.

For example, production department would be a line unit in a manufacturing organization and
sales department would be considered line unit in a customer oriented service organization. Staff
units are generally in an advisory capacity and support the line function. Examples of staff
departments are legal department, public relations, personnel and research and development.
Some of the sources of conflict between line and staff are:

 Since the staff generally advises and the line decides end acts, the staff often feels powerless.
 Staff employees may simply be resented because of their specialized knowledge and expertise.
 Occasionally, staff employees are impatient with the conservative and slow manner in which the
line managers put the staff ideas to work. Also line managers may resist an idea because they
did not think of it in the first place, which hurts their ego.
 Staff has generally easier access to top management which is resented by the line management.
 Staff is generally younger and more educated and did not go through the run of the mill and
hence their ideas may be considered more theoretical and academic rather than practical.
 There is conflict about the degree of importance between the line and staff as far as the
contribution towards the growth of the company is concerned.
 The line usually complains that if things go right then the staff takes the credit and if things go
wrong, then the line gets the blame for it.
 Generally the staff people typically think in terms of long-range issues while line people are
more involved with short-term or day-to day concerns. These differing time horizons can
become a source of conflict.

Participation: It is assumed that if the subordinates are not allowed to participate in he decision-
making process then they will show resentment that will induce conflict. On the other hand
ironically, if subordinates are provided with greater participation opportunities, the levels of
conflict also tend to be higher.

This may be due to the fact that increased participation leads to greater awareness of individual
differences. This conflict is further enhanced when individuals tend to enforce their points of
view on others.

Role ambiguity: A role reflects a set of activities associated with a certain position in the
organization. If these work activities are ill defined, then the person who is carrying out these
activities will not perform as others expect him to, because his role is not clearly defined.

This will create conflict, specially between this individual and those people who depend upon his
activities. A hospital or a medical clinic employing a number of physicians with overlapping
specialties might cause conflict due to role ambiguity. Such conflict can be reduced by
redefining and clarifying roles and their inter-dependencies.

Design of work-flow: These are primarily inter-group problems and conflicts that are outcomes
of poorly designed work-flow structure and poorly planned coordination requirements, specially
where asks are interdependent. According to Sashkin and Morris ‘organizations are made up of
many different groups that must work together towards the accomplishment of common
objectives.’

For example, in a hospital, the doctors and nurses must work together and their tasks are highly
interdependent. If they do not coordinate their activities well, then there will be confusion and
conflict. Similarly, in a restaurant, the cook and the waiter depend upon each other for critical
information and uncoordinated activities between the cook and the waiter would create conflicts
and problems.
Scarcity of resources: When individuals and units must share such resources as capital,
facilities, staff assistance, and so on, and these resources are scarce and there is high competition
for them then conflict can become quite tense.

This is especially true in declining organizations, where resources become even more scarce due
to cutback in personnel and services so that the concerned units become highly competitive for
the shrinking pool thus creating hostility among groups who may have put up a peaceful front at
the time of abundance. For example, two research scientists who do not get along very well, may
not show their hostility until a reduction in laboratory space provokes each to protect his area.