ALL THE ERRORS ARE HIGHLIGHTED IN YELLOW

UNIT 1 ORGANIZATIONAL MANAGEMENT

Managing and Organizing: What It Means Comparing management and entrepreneurship.
Intrapreneurship. Manager as a person with discretionary power. The manager's and the property's
legal rights. The strata of management in an organization range from the very top to the very
bottom. Management functions in four main ways. The real world management dilemma. Economic
and social obligations of management. Organizing and shaping the modern world. The manager's
rise to power. Business administration and office politics. Leaders of a rapidly changing economy.

The History of Corporations and Management Thought. Examples of effective leadership throughout
history. Growth in manufacturing and trade. Business tycoons from the 18th and 19th centuries.
Variations in the development of multinational corporations between nations. Business before the
Russian Revolution. The Soviet government.

Professional management. Too bureaucratic groups. Theories for running the government.
Interpersonal dynamics shift. A behavioral approach. With an emphasis on the study of
management. Analysis of systems. Contingency plans. Complete and total quality assurance. As a
whole, the company gains knowledge. The Powers That Be Role A manager with the ability to think
long-term. Director of Training and Development. Mentorship in a managerial capacity.
Administrative function as a watchdog. Managerial communication abilities. A managerial
administrator. Managers' stakeholders include investors, workers, unions, state and local
governments, NGOs, political parties, and voters. Competence in management.

Organization Management – Meaning, Need

and its Features
There is a wide range of political beliefs, cultural backgrounds, educational backgrounds,
and work experiences represented in any particular workplace. No matter how skilled or
talented an individual may be, they must all pitch in for the team's success. The strength of
an organization is on its ability to bring together people with varied backgrounds to work
toward a similar objective. Cultural and ethnic sensitivity is required in situations when team
members hail from many corners of the globe.

Employees need to work cohesively and cooperatively to meet departmental and business
goals. For this reason, it is important to consider the inner workings of organizations via the
lens of organizational management.

What is Organization Management?

Every organization has its own set of standards that employees must be familiar with and
abide by in order to function properly. For instance, there is a clear chain of command in
place to route employee complaints to the proper individual.
Management at a company is what the highest echelons of workers do to keep things
running smoothly. They contribute to the growth of an environment within the business
that inspires employees to give their all. Making the most of a company's assets through
planning and surveillance is a top priority for any manager.

A business may set out to increase its clientele, improve its public profile, or maximize its
revenues. Businesses still need to make money in order to stay open; if they aren't making
enough, they may have to shut down.

It is more likely that a company will achieve its objectives if it has capable management to
plan, organize, lead, and control its resources.

Need for Organization Management

Why good management of an organisation is crucial to its continued existence:

1. The Goals within Each Department are clear.

2. Objectives are met because of the efficient execution of the business plan.
3. Third, Collaboration Between Divisions Has Improved
4. Workers can complete their tasks on time and deliver the projects they have been
given.
5. The workplace is transformed into a happy and harmonious place to work.

What are the Essential Features of Organization Management?

1. Planning

Having a well-thought-out plan in place can increase confidence and decrease anxiety about
the future. As the organization grows, its operations expand, necessitating a more nuanced
approach. A well-thought-out business strategy is essential for sustained growth and
success. Information on how your company will function should also be included in your
business plan.

2. Setting Up

Experts in the field of management agree that the organization of a company's resources,
finances, and personnel is crucial to its success. Maintaining a steady flow of cash requires
management to create and stick to a monthly budget.

3. Personnel

If you give the right individual the correct responsibility, they'll rise to the occasion and do a
fantastic job. Positive outcomes for the firm are guaranteed. Hiring or delegating tasks to
employees who aren't up to par is another potential source of trouble. Employers should
hire people for their talents and experience, or give them the chance to develop such
abilities on the job.
Manage 4

Managers create organizational structures in order to assert power and get things done. In
other words, everyone in the office needs to understand what they're responsible for and to
whom they should notify in the event of an emergency.

In order to assist their subordinates improve, managers must be able to give honest
assessments of their work and offer constructive criticism.

Motivating employees to give their all is a key component of any successful business
management plan. Increasing employee loyalty may be a matter of creating a positive work
environment and offering competitive benefits. Keeping employees motivated will improve
both staff retention and output.

Organizations of any kind work toward certain objectives. These goals can only be attained
with competent management and implementation of the company's plan. In the business
sector, management of any kind is crucial.

Features of an Entrepreneur:
1. To meet their wants, a business owner may try something new.
2. Business owners take financial risks and are prepared to bear the results of such
risks.
3. The rewards for an entrepreneur's daring are not only financial, but also emotional
and intellectual. It's not only that profits are inconsistent and unexpected; they could
even be negative.
4. Consistency - The acts of entrepreneurs are sporadic; they appear to cause a change
in the production process, and then they disappear until another change is brought
about.
5. Innovate - In order to boost profits, an entrepreneur may decide to try out some
novel approaches. This is why entrepreneurs are typically viewed as agents of
progress.
6. Since there is only one owner of a firm, that person occupies a special place in
society and plays a special role there.
7. Prerequisites - To be successful as an entrepreneur, you need certain traits, such as a
strong drive, the ability to think creatively, a high tolerance for risk, an openness to
new experiences, etc. See also: (Ref. 2)

Features of a Manager:
1. Venture A manager does not create a firm but rather joins an existing one.
2. Taking chances Managers bear no responsibility for the financial well-being of the
organization they oversee.
3. Salary is the manager's payment for his services and remains stable at a predetermined
level.
4. Consistency: Much of a manager's day is spent on chores that must be performed every
day, such as coordinating operations.
5. Originality Instead, a manager consistently runs the company in a predetermined manner.
Because of this, a manager is often called "the entrepreneur's product" (or "the result of
change").
6. Position/Status Sixth A manager, on the other hand, is paid to carry out the wishes of a
business' owner, who is typically absent from daily operations. Therefore, he has little
independence and must rely on the company's owner.
However, in order to be successful in management, it's important to have a solid grasp of
human nature and an appreciation for management theory. Given that leadership skills are
often nurtured and not passed down,.
Distinction between an entrepreneur and a manager:
Entrepreneurs are the ones who ultimately take charge and create a business. Managers
carry out responsibilities delegated to them by the business's proprietors. Entrepreneurship
is a solitary pursuit. On the flip side, it is the managers who learn to adjust to the inevitable
changes that will occur in any business. They keep the business running and maintained on a
daily basis.
Entrepreneurial success often stems from a person's ability to think creatively and take a
fresh approach. It's almost as if they conjure it up out of nothing. Management by trained
experts who adhere to standard operating procedures is essential for on-time production.
Someone who seizes unexpected opportunities is an entrepreneur. His speed of reaction is
above average. Therefore, the company could see tremendous growth throughout its
infancy. Planning for the company's growth in the medium to long term is an essential part
of professional management.
The entrepreneurial group's unstructured, malleable structure allows for rapid growth and
nimble responses to customer needs. In the world of professional management, the chain of
command is strict and official. Because of its slow reaction time to market opportunities, it
ensures stability by preventing sudden collapse.
The entrepreneur makes decisions based on his "gut feeling" and intuition, which frees him
to think creatively outside the norm. The knowledgeable manager considers all options and
seeks advice from both internal and external specialists before settling on a course of action.
The entrepreneur describes his business in terms of a "vision," "dream," and "mission,"
giving his employees the impression that they are helping to bring an ideal to life. The
company's management lays out and tracks progress toward its goals in terms of target
markets, employee productivity, and profit margins. Everything from making money and
keeping things operating well to making sure everyone is on the same page falls within his
purview as CEO.
Most business owners have a strong drive to succeed. This suggests that they are not
interested in making money, but rather in spreading their novel idea far and wide. They
really need their fresh idea to pan out. However, the experienced business manager is in
charge, as they are able to "see" the company with "financial eyes."
According to the study's findings, risk assessment is a strength of most entrepreneurs.
However, the professional manager is risk-averse and adheres to the status quo since it is
their responsibility to do so.
Since the typical entrepreneur is also the company, he sees no reason to formalize a
corporate culture. High degrees of charisma and "manipulation" characterize this setting,
which has been labeled a "entrepreneurial organisational culture." The entrepreneur tells
his employees that realizing his vision is the company's top priority. The manager's role is to
foster an organizational climate that advances the company's values and strategic
objectives. Manager has business experience and is working to implement company
policies.
Role of an Intrapreneur
An entrepreneur runs their own show, while an intrapreneur works for someone else.
Entrepreneurial thinking and action from inside a company, or intrapreneurship.
Hisrich and Peters are used as a definition. Being an intrapreneur is using an entrepreneurial
approach while working for an existing company. Intrapreneurship is defined as "new
initiatives, innovation, and dynamism done by a management level employee that
contributes to organisational competency" (ref 3).
According to Skinner and Ivancevich, a "Intrapreneur" is a businessperson who works within
an organization and is entrusted with encouraging innovation within the existing framework
of the business. (Ref. 3) Management effort that is both strategic and innovative is what we
mean when we talk about intrapreneurship, and its ultimate goals are to improve the
company's financial health and market status.
Incentives to take chances, acknowledge and learn from failure, and share the fruits of
success all contribute to an environment that encourages intrapreneurial behaviors. In fast-
paced, ever-changing businesses, this is par for the course.
The ability of a corporation to respond to shifts in the market and respond to unexpected
events depends on its employees' willingness to take chances and think creatively. They are
able to innovate despite the intense competition in the market. Companies use methods
such as education and growth incentives, recognition, and monetary rewards to encourage
people to think outside the box.
Role of a Manager as a Decision Maker
Managers are accountable for the following tasks inside an organization:
Employee Retention: The caliber of an organization's leadership has an effect on
whether or not employees choose to remain with the business. The company's
retention rate may be tied to a manager's level of success or failure.
Effectiveness: Managerial decisions may affect the system's speed and reliability.
According to Peter F. Drucker, the pace at which work is done depends on the decisions
made by the manager.
Management decisions have an effect on customer satisfaction. Management decisions
inside an organization have an effect on the satisfaction of its employees, which in turn
has an effect on the quality of service delivered to customers.

A company's reputation may rise or fall based on the decisions made by its top brass.
Managers frequently face challenging decisions involving the development, promotion,
and safety of their employees. Their choices could have a significant impact on the
company's productivity.
Managerial A manager's job is not safe if they make poor decisions or display poor
judgement, which could lead to termination. According to Drucker, the two most
important factors in the success of any business are hardworking employees and
competitive products. They need a leader who can give them direction and keep them
on track.

Levels of Management
The term "Levels of Management" implies that different tiers of a company's management
are responsible for distinct tasks. The more employees or departments an organization has,
the more layers of administration there will be. Larger organizations have more intricate
and broad chains of command. Power and prestige within an organization are reflected in
the administrative hierarchy. In most organizations, three distinct levels of management are
recognized:

1. Top level / Administrative level

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

These three levels of management have different responsibilities. The roles and
responsibilities of managers at each level are explained below.
LEVELS OF MANAGEMENT
1. Top Level of Management
Members of the board of directors, the CEO, or the MD are at this level. The
company's senior management sets the overall direction and policies of the
business.

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

a. The company's goals and general policies are established by upper

management.
b. It provides the guidelines that must be followed to have departmental things
like budgets, procedures, and schedules ready.
c. It creates business-wide strategic strategies and policies.
d. It chooses the middle-level executive, such as division heads.
e. It regulates and synchronises the efforts of every division.
f. It's in charge of keeping in touch with the rest of the globe.
g. It shows you the way and helps you get there.
h. The company's senior brass must account to shareholders for the business's
results. (ref 6)
2. Middle Level of Management

The middle tier of an organization consists of regional and functional managers. They need
to give regular updates to management in order to keep their department running well. In
contrast to larger corporations, which may have two levels of middle management (senior
and junior), most small businesses only have one. We can sum up the significance of-

a. They implement the organization's strategies in accordance with established

policies and the directives of management.
b. b. They come up with plans for the many departments within the
organization.
c. b) They help select and train middle management.
d. They are able to communicate the goals and rationale behind management
decisions to staff at lower levels (d).
 e. e. It is their job to guarantee the smooth operation of their division or
branch.
f. f. It gives the highest levels of management access to vital data and reports.
g. g. They evaluate the work of lower-level managers.
h. h) They must inspire the intermediate and lower tiers of management to
raise productivity as well. Ref 6

Lower Level of Management

The lower levels of management are the supervisory and operational levels. Management
includes a caretaker, foreman, section officers, and others. They focus on management's
guiding and regulating duties. Their routine consists of :

a. Having employees take on certain tasks and duties.

b. They oversee employees and offer guidance as they go about their everyday
tasks.
c. They can regulate the output in terms of both quality and quantity.
d. They are in charge of d) encouraging positive interactions between workers.
e. Management is updated on employee concerns, suggestions, and pleadings,
and workers' goals and aspirations are communicated to them.
f. Noun. They help with problems that employees have brought up.
g. They lead and oversee people that work for them.
h. They're in charge of the staff's professional growth and education. p.
i. They get everything ready, including tools, supplies, and materials.
j. They compile monthly reports that outline the efficiency of the employees.
k. They are responsible for keeping the office in order.
l. They are motivational to the staff.
m. Since they are in constant contact with workers, they have a significant
impact on the company's reputation. m. Ref 6

4 Functions of Management Process: Planning, Organizing, Leading, Controlling

The four pillars of management are planning, organising, leading, and controlling. Managers
do these duties so that organisational objectives may be met effectively.

Management process/functions involve 4 basic activities;

1. Planning and Decision Making – – Determining Courses of Action,

2. Organizing – Coordinating Activities and Resources,
3. Leading – Managing, Motivating and Directing People,
4. Controlling – Monitoring and Evaluating activities. 

1. Planning and Decision Making – Determining Courses of Action

In business, planning entails establishing goals and figuring out how to achieve them.
Making decisions about the objectives and the future course of action to achieve those The
core of planning is setting objectives.
The business plan facilitates efficient management and serves as a road map for the
company's next steps. The process of planning involves the selection of objectives and
means of attainment.

Selecting future courses of action from a variety of possibilities is a crucial part of the
planning process.

2. Organizing – Coordinating Activities and Resources

Plans may be brought closer to fruition via the organising process.

Next, the manager's job is to organise the people and materials that will get the job done.

The manager is the one who decides on how everything will be put together and organised.

The organisation is the planned division of labour within an organisation.

It is deliberate because it ensures that the correct individuals are responsible for achieving
each objective.

The framework specifies the action to be taken.

Staffing is hiring people to work in an organization's various jobs.

Determining where decisions will be made, who will do what, who will report to whom, and
how resources will be collected are all part of the organising process.

3. Leading – Managing, Motivating and Directing People

The third role of a manager is to influence and direct others to achieve a goal. In
management, there is no task more crucial or difficult than leading.

Leaders inspire their teams to embrace the organization's mission and values. The goal is to
increase productivity, efficiency, and staff commitment.

Leadership is often defined as a process that includes setting an example, inspiring others,
keeping everyone on the same page, and coordinating everyone's efforts.

The ability to inspire others is crucial for leaders. We may steer others towards our desired
outcomes by inspiring others to take action.

Successful managers must also possess strong leadership skills. Everyone has a certain
amount of innate leadership potential that may be honed to achieve greater success. All
workers are encouraged to do so by the Intrapreneurial Organisation.
As a leader, you must inspire your team and keep them informed.

4. Controlling – Monitoring and Evaluating Activities

The ability to inspire others is crucial for leaders. By inspiring others to take action, we may
steer them towards our desired outcomes.

Successful managers must also possess strong leadership skills. Everyone have a certain
amount of innate leadership potential that may be honed to achieve greater success. All
workers are encouraged to do so by the Intrapreneurial Organisation.

As a leader, you must inspire your team and keep them informed.

Some people say planning is pointless if no one is in charge. By careful monitoring and
analysis, success can be guaranteed.

There is no way to avoid any part of management since they all depend on one another.

Management consists of four interrelated processes: planning, organising, leading, and

controlling.

Management Dilemmas
Every manager has to deal with the same basic difficulties. The five most common
management challenges may be dealt with efficiently and successfully by following these
suggestions.

1. Conflicts between employees.

Conflict and difficulties at work may arise when workers' preferred methods of working
and interacting with others vary. When employees have disagreements, you must
address the current problem without allowing it to escalate into a larger conflict that
might harm the whole team.

Gather the employee(s) in question(s) for a one-on-one meeting, and explain the issue
as you see it (without placing blame). Let everyone an opportunity to tell what they
think happened. Be as receptive as possible; do not rush to judgement, especially if you
disagree with some points. Place a call to both parties and suggest that they discuss
possible solutions to the problem.

If this doesn't resolve the problem, you may need to reassign the employee's duties or
find another solution.

2. Low morale.
When employees' preferred methods of work and communication don't mesh, tension
and problems might occur. It is your responsibility to rapidly resolve workplace conflicts
and limit their negative impact on the team.
The best method to convey the facts as you see them is in a one-on-one meeting with
the employee or employees in question. Give everyone a chance to tell what they think
happened. Spend as much time as possible listening; if you hear something you don't
like, try to hold off on making a snap decision about it. Get in touch with them and
advise them to talk it out to settle the problem.

Changing the employee's responsibilities or finding them a new position may be

necessary if this doesn't work.

3. Performance problems.
At least one employee under a manager's watch may be underperforming. The easiest
way to deal with this issue is via regular evaluations of performance.

Set up a one-on-one chat with the worker to discuss the current problems. To start,
point out specific ways he has exceeded your expectations and express your
appreciation for his effort. The next step is a discussion of the trouble spots. You and
your team should determine success and how it will be measured. To make sure
everything is moving along well, it's a good idea to schedule another review session.

If a worker's poor performance cannot be improved by monitoring, dismissal may be the

best alternative to avoid affecting the productivity of the rest of the team.

4. Chronic tardiness/absenteeism.
Although it's to be expected that employees may sometimes be tardy or miss work, if one
of your workers consistently does so, you need to address the issue.

Get together in private to express your worries about the current state of affairs. Allow
them to explain their absences and tardiness, possibly due to family issues or illness. If
that's the case, reassure them of your backing and discuss how they may get the help
they need to keep doing their work. If an issue continues after many warnings and the
employee cannot answer satisfactorily, disciplinary action should be taken.

5. A top performer hands in her resignation.

You could attempt to make a counteroffer or convince one of your most brilliant and
important workers to remain when they inform you, they have accepted a job elsewhere.
Nevertheless, this strategy fails if the employee is set on leaving.

You don't want to replace a valuable employee, but you can't ignore that people's career
and life priorities change with time.

Inquire whether the worker is willing to train a new employee. He or she must complete
all outstanding tasks and report on their progress to you. Asking the departing worker
what prompted their departure is a crucial part of every exit interview. Take the
response seriously, since it may lead you to an area where you may effect change (for
example, the individual felt there were no further opportunities for advancement).
Lastly, ask for their updated contact details so that you may keep in touch with them
professionally; their prior experience with your company is invaluable.
Business Economics: Role and Social
Responsibilities

In what ways do corporations contribute to society as a whole? Do they act responsibly

towards others? Do they prioritise making a profit above doing good for society? Does their
behaviour indicate that they care about the well-being of others?
With the help of business economics, we can better understand how businesses contribute
to society and how we may increase the advantages that businesses provide.
Businesses have played a significant role in the rapid economic growth of the United States
and other industrialized nations.
Many have benefited from the subsequent economic growth. The end of poverty and rise in
living standards brought on by rapid economic growth. Adam Smith argued that free
enterprise was largely responsible for the enormous increase in the "wealth of countries"
(i.e., the total output of commodities and services) in the capitalist world. Ref 9
Corporations are in business to make money, but they also serve the public good by
contributing to their communities. Products are produced when businesses allocate and
organize their material and human resources so that they generate the most profit.
Businesses receive payment from the providers or sellers of capital, labor, raw materials,
and other resources in exchange for their services.
The owners of capital, land, and other resources reap rewards, and the employed receive
stability. This has greatly contributed to the success of all these communities. However,
shoppers have also profited from the abundance of low-cost options.
Businesses make large monetary contributions to public coffers. Income taxes, excise taxes,
and sales taxes on the goods and services that corporations produce and sell provide a
significant portion of the revenue necessary to support government programs for social
welfare and public investment increases for economic development.
Regarding the second point, the social responsibility of business, we must conclude that
successful firms do not always behave in a socially responsible manner.
Unsustainable growth, rising financial imbalance, and environmental degradation can all be
traced back to unethical and unnecessary business practices.
Corporations also place unpaid social expenses on the general public. Society has developed
methods to control and limit them in an effort to reduce the harm they do.
The emergence of industry monopolies over vital resources is the primary problem plaguing
free market economies.
Monopolistic firms abuse consumers by charging higher prices and reaping extravagant
profits. The pharmaceutical industry's decision to raise prices for the COVID vaccine is
illustrative. The government's pricing is fair because it accounts for the expenses of the
businesses and a fair return on their investments.
Due to the high demand for vaccines among the Indian population, the company's owner,
Adar Poonawala, has shown a lack of responsibility by escaping to London.
The second problem with unchecked capitalism. Oligopoly is a type of market structure in
which a small number of firms work together to determine both pricing and output. The
number of firms is manageable, giving each a meaningful voice. Large economies of scale or
high entry barriers may mean that only a small number of firms are able to successfully
serve a given market. Providing there is strong competition among these few businesses,
there should be no problem. Nonetheless, they work together, either formally or informally,
creating a harmful cartel.
Laws such as India's Monopolistic and Restrictive Trade Practices Act were enacted to
combat cartelization. The goal of these statutes is to prevent corporate collusion and the
formation of monopolies. These regulations promote healthy competition, which in turn
ensures corporate social responsibility and improved public services.
Thirdly, workers are being underpaid and exploited. Due to the absence of unionization and
the high unemployment rate in India, workers at private firms, especially those owned and
managed by small-scale commercial entities, are given relatively low salaries. Workers are
desperately needed in India.
Women and children are exploited by the private sector in the workplace, where they are
paid poorly despite putting in long hours. Minimum wages are set by the government to
regulate business practices. Using children as workers is now against the law. Wage equality
for men and women is severely enforced in accordance with the law.
It's no secret that the pollution catastrophe we're in today is directly attributable to
industrial output. Without regard for human health or the environment, they dump their
toxic waste into the atmosphere and water supply. Asthma attacks, chronic coughing, and
other respiratory issues are all exacerbated by pollution.
Societies and individuals pay for these costs, but firms do not, therefore economists call
them "social costs." In many cases, they don't take safety measures to limit the emission of
hazardous waste. The Bhopal petrol disaster is typical of the way private companies avoid
their social duties by not taking adequate measures to prevent the release of hazardous
vapors.

Today's societies devote considerable resources to pressuring businesses to take on these

societal costs and to ensuring that they do so. Polluting industrial operations and consumer
items are subject to emission limitations regulation to protect the public's health. Anyone who
does not take adequate safety precautions will face serious consequences. Businesses that
don't meet these safety standards are shut down.
Management and modern civilisation
The advent of human civilization can be traced back to the time when people began to
travel in groups with the intention of achieving common goals (such as obtaining food by
slaughtering animals). All of these steps were taken with the intention of making people's
lives better in some way. Humanity has always strived to improve the quality of life for its
citizens.
Earlier Trip: In the Sumerian Civilization, which flourished around 5,000 years ago, humans
first started documenting their history on paper. Since the records were largely utilized to
keep tax collection in order, they were overseen by the priestly class.
The Egyptians then began a massive undertaking. Around this time, around 2560 BC, the
Great Pyramid of Giza was constructed. Over the course of its 20-year lifespan, the
construction project employed 100,000 people, which is more than the current headcount
at Apple Inc. (46,600). It was tough to keep up with the workload.
The development of administrative philosophy and practice was greatly aided by the
contributions of subsequent civilizations. Among these are the Greeks (revolutionary
concepts in government and labor standards), the Romans (systems of organization and
agricultural management), the Chinese (staff principles and military treaty), and the
Romans. The constant denominator among all these historical factions is their religious or
political beliefs.
The management idea has proven effective across a wide range of organizations. The study
of business is relatively recent and has been molded by established theories of
management.
Management in today's businesses tends to be somewhat youthful. Management as we
know it now emerged alongside the advent of the modern, complex business. The
commercial and industrial revolutions of the 16th and 20th centuries in Europe ushered in a
new order of the production system that required the concentration of workers under one
roof, known as the Factory System. This system shift presented factory managers with new
challenges, prompting them to implement unique methods of managing the factory. In light
of the new system and the increasing demand, managers were primarily concerned with
optimizing output while minimizing costs. In response to this necessity, the classical
perspective on management, often known as scientific management, emerged. A new type
of industrial worker emerged with the advent of the new system. As factories became more
casual, it was crucial for workers to build friendships and informal networks with their
coworkers.
Management evolved in accordance with the humanistic philosophy. After World War II,
business flourished, leading many to go global. As both technology and commerce
advanced, new challenges for managers to consider evolved, such as globalization and the
internationalization of businesses. The corporate environment, both internal and external,
has become increasingly complex and volatile. The management science paradigm emerged
in this setting.
Each new management paradigm has introduced fresh methods of considering the
challenges that firms face in the global economy and society.
Poor management of infrastructure and economy, as well as widespread income inequality,
are commonplace in these countries. While the largest consumer markets are in the world's
most populous countries, this reduces the likelihood of building a stable customer base in
such countries.
Bad management led to layoffs, pollution, and a devaluation of customers as companies in
the industrialized world downsized. Therefore, even in developing countries, good
management is crucial. As a result of the practical enhancements brought about by
breakthroughs in communication technology, working from home has become the norm in
the contemporary COVID environment. Outsourcing-based business models are becoming
increasingly popular as businesses realize their benefits. As a result, it is not uncommon to
have teams comprised of people from all over the world working together on a same
project; successfully coordinating the efforts of such a globally distributed group requires
new ways of thinking. When conventional management techniques fail, it's time to bring in
some new eyes and information.
The recent banking system catastrophe is yet another example. There aren't enough new
jobs being created in the industrialized world to match demand, despite signs of economic
improvement. However, in the pursuit of profit, businesses have neglected the
environment. The ecological tragedy that has befallen the ecology is largely due to a
careless attitude toward conserving resources. More and more individuals believe that
management aids corporate growth at the expense of workers and the environment.

New economic and business paradigms are also needed as people worldwide realise we
have only one planet to live in. Global warming due to human-caused emissions of
greenhouse gases, and the subsequent widespread changes in weather patterns, are both
aspects of climate change. Although Earth has seen climate change before, human
activities during the mid-20th century have had a world scale influence on the planet's
climatic system not seen before. (https://en.wikipedia.org/wiki/Climate_change).

By 2030, the global community has committed to achieving Sustainable Development

Goals (SDGs) to eliminate poverty, decrease inequality, and ensure environmental
sustainability. The SDGs have inspired individuals from all walks of life, all corners of the
globe, and every culture on the planet. They were adopted by 193 nations in 2015 after
the most inclusive and thorough discussions in UN history. The objectives can only be met
by 2030 with extraordinary and creative effort, a willingness to learn what works, and the
flexibility to adapt to new knowledge and shifting trends. (https://unfoundation.org/what-
we-do/issues/sustainable-development-goals/?
gclid=CjwKCAjwy42FBhB2EiwAJY0yQhOqMsiFbA14rBiUNdeM8m9pSwOzkYuZnojMlKc1fxP
YnbcN-R6cMRoCVDQQAvD_BwE)

Businesses need to respond to the above challenges and mitigate environmental

disasters. Today, environmental issues in countries need to be immediately addressed
and businesses can no longer turn a blind eye to the environmental pollution caused by
 their technologies. Newer and cleaner technologies and innovations are required in how
we do business, and the scope for new paradigms and businesses arises here.
Environmental issues are no longer somebody else’s problem because they affect all of us
at some point or have the potential to do so. And nobody wants to leave the planet in
search of a one-way ticket to another earth like planet which we are not sure we will be
able to reach and much less survive.

Environmental sustainability is the new business model and ecological balance the new
watchword. Competition is no longer the key but cooperation and peaceful coexistence is.
We must protect and watch over the resources we need to survive. We need simpler,
holistic technologies to restore ecological balance and reorient our economic models. In
all of these models, we have to create a space and learn from the world's have-nots and
tribals and marginalised communities because we are essentially talking about the right
to life. It is not true that subsistence economies have a large carbon footprint they use
very little resources by their poverty and like tribal communities do minimum
environmental damage and live in harmony with nature.

The modern civilisation needs newer ideas in say transportation like electric cars, cheap
sustainable and environment friendly electricity, digital technology to reduce the cutting
down of trees for paper, cheap and sustainable agriculture, organic farming, plant and
herbal medicine. Research and innovations and new business models based on
cooperativity and coexistence are needed in all these areas. Rampant consumerism has
to go because it can kill our race and civilisation. Hence old economic paradigms of
producing for and increasing wants of the people have to go. Markets cannot be the be all
and the end all.

Because our time on earth as a human civilisation is running out.

Management is degrading the productive capability of the natural resources rather than
building positive synergy between them. In this socially reliant setting, management may
play a catalytic role. Like a good catalyst, good management practices may set in motion a
cascading set of effects that helps businesses boost output while minimising their impact on
the environment and ultimately turning the business into a profitable enterprise in its own
right.
Companies don't exist for themselves; they're in the business of making lives better and
advancing humanity. Obviously, organisations created in our social milieu aim to serve the
public good, and management facilitates this. Therefore, management personnel have to
have the ecological, long term, and futuristic perspective to deal with our society's
environmental challenges. Only such an approach will ensure the survival of our human
civilisation.
Managerial revolution
There has been a recent uptick in the number of managers who run businesses but do not
have an ownership stake in them. At the same time as businesses have grown in size and
technological complexity, ownership has become more dispersed. Expertise in
management, finance, and other disciplines is in more demand than ever as ownership
grows more dispersed and 'absentee. As a result of management's increasing specialisation,
a cohesive group of leaders has emerged, able to exert decisive influence over businesses
while simultaneously caring about their workers and the greater good of society. It would be
a huge boon to modern management if training made this class of managers aware of the
need of taking a comprehensive approach to environmental issues.

Toyota Motor Company has made great strides in creating a culture of learning. Here,
management helps Toyota raise its employees' productive capacity (a factor of production),
allowing other factors to provide greater value for consumers, who contribute to the
corporation's growth via their satisfaction. In the end, sustainable management practise
enables the company to replicate its success by establishing a virtuous cycle of value to
benefit the company and society. Ref 10

Transition economy 
An economy in transition is shifting from a centrally planned to a market economy. Market-
based institutions are developed via a series of structural changes that transition economies
undergo. Prices are determined by supply and demand in a free market economy rather
than by a government agency. Additionally, trade restrictions are relaxed, efforts are made
to privatise publicly held companies and resources, state and collectively run businesses
transform into for-profit entities, and a financial sector is established to aid in
macroeconomic stability and the free flow of private capital. Transitioning from a
communist economy to a market-oriented, globalised economy has been implemented in
China, the former Soviet Union, and Eastern bloc nations of Europe, as well as in certain
Third World countries, India among them (Ref. 11).
Transitioning to a private sector economy entails modifying the state's role, establishing
new political structures, and supporting privately owned firms, free markets, and
independent financial institutions. One way to make the change is for government agencies
to shift their role from driving economic expansion to supporting businesses and
entrepreneurs. Altering the economy's growth and free market practises is another
transition mechanism. Ttransition mechanismaliThese two transition modalities have micro
and macro, partial and full connections To be complete, transition economics must address
both the micro and macro change levels. Transition economies from planned to market
economies have emerged in various forms across nations due to distinct beginning
circumstances. Countries like China and Vietnam took the slow and steady approach to
transition. In contrast, others, like Russia and the former Socialist Republic of Yugoslavia in
Eastern Europe, took the fast and furious route. Ref 11

The transformation process relies mostly on:

 Liberalization is establishing a free market zone by enabling prices to be set by

competitive marketplaces and reducing trade barriers in line with the pricing
structure of global market economies.
 Macroeconomic stabilization - taming the runaway inflation that usually
accompanies deregulation and the release of pent-up demand so that it may be
gradually reduced over time. Progress towards a sustainable balance of
 payments is essential, as is strict management of the government budget and
the expansion of money and credit (i.e., discipline in fiscal and monetary policy).
Ref 11
 Restructuring and privatization – privatisation is establishing a strong financial
system and reorganising businesses to the point where they can manufacture
things at prices competitive enough to be offered in free markets.
 Legal and institutional reforms – by rethinking the state's role in these
economies, creating the rule of law for operating the new enterprises and
economies, and instituting proper competition regulations, monopolies,
oligopolies, and other skews may be rectified and the economies can flourish.

According to the International Monetary Fund, transition broadly implies:

 Realizing effective enterprise management and economic efficiency is typically

accomplished through privatisation;
 Imposing hard budget constraints, which provide incentives to improve efficiency
 Establishing an institutional and legal framework to secure property rights; and
developing indirect, market-oriented instruments for macroeconomic
stabilisation. Ref 11

Soviet-type economic planning

The Council for Mutual Economic Assistance (English
abbreviation COMECON, CMEA, CEMA, or CAME) consisted of the nations of the Eastern
Bloc and other socialist republics from across the globe. It was led economically by the
Soviet Union from 1949 to 1991. In 1949, the Soviet Union, Bulgaria, Czechoslovakia,
Hungary, Poland, and Romania established the Comecon. Joseph Stalin's determination to
help the smaller governments of Central Europe, who were becoming more isolated from
their traditional markets and suppliers in the rest of Europe, was a driving force in the
creation of Comecon. Ref 16 A
Western economists suggested a market-based approach and a sequenced programme of
economic reform for the Comecon nations due to their poor growth rates and dwindling
returns on investment. It was understood that macroeconomic stability and microeconomic
change must be properly integrated. Before implementing price liberalisation, corrective
measures have to be implemented to address underlying macroeconomic imbalances. These
macroeconomic imbalances included the widening budget deficit, the expanding money
supply caused by heavy borrowing by state-owned companies, and the amassing families'
savings ("monetary overhang"). This is a frequent symptom of stifled inflation (widespread
in centrally planned economies like the Soviet Union) that threatens macroeconomic
stability.
Only under conditions of complete freedom from government regulation would businesses
be able to thrive in a free market economy. As a result of the transition, the allocation of
resources will be constrained, and successful businesses won't be able to hire the
employees made redundant by the closure of failing companies and the end of collectivised
farming. State-owned firms' continued use of public funds for subsidisation might be
stopped by tightening budget limitations (Hardening the budget constraint implies that an
organisation whose spending exceeds its revenue would be unable to continue to exist).
However, the ensuing increase in unemployment and decrease in total household spending
will need additional funding throughout this transition. Due to monetary overhang, price
liberalisation may cause "repressed inflation" to become "open inflation," leading to more
price increases and maybe a price spiral. Market liberalisation, privatisation, and
deregulation are essential to achieving a successful market economy transition. In the short-
term, an active monetary policy, trade restrictions and tariffs, and rationing of essential
consumer products may all be required to guarantee a steady flow of funds into and out of
the economy. Capital flight prevention measures may sometimes be required in addition to
tariff protection.
The desperate circumstances of most post-socialist nations weighed heavily on the decision
to pursue a particular transition approach. Policymakers were convinced that establishing
political legitimacy was necessary before implementing a phased reform programme and
macroeconomic stabilisation measures. Taking the steps advocated by the International
Monetary Fund and the World Bank, known as the Washington Consensus, lent more
"credibility" to the change. When national budget deficits grew and foreign loans exceeded
the country's ability to pay, stabilisation became required in Hungary and Poland. Shock
therapy was a set of stabilisation programmes implemented by Western advisors and local
specialists working with national governments and the IMF to achieve external and internal
balance. One cannot "jump across a chasm in two jumps," as was suggested.
Many American, British, and Swedish advisors were hired under bilateral and multilateral
technical assistance programmes funded by international financial institutions. Instead of
preferring trade protection and capital regulations, which might have prevented capital
flight, they advocated for open trade and the convertibility of currency rates. In general,
they favoured privatisation without first reorganising the industry, except Eastern Germany,
where the Treuhand (Trust Agency) spent a lot of money preparing state-owned firms for
the market. Ref 16
Customers reacted by cutting down on spending and increasing their reliance on higher-
quality imports at the expense of locally produced items. Several domestic businesses failed
due to decreased sales, resulting in layoffs, reduced hours, and wages. As a result, demand
was even less than before (effective demand represents a real intention to purchase by
people with the means to pay).
The trade gap widened as imports rose and exporters failed to capitalise on rising demand in
international markets by improving product quality or increasing investment. This weighed
on the value of the currency. The dropping exchange rate contributed to inflation since
many merchants and wholesalers had already marked their prices to reflect the weakening
dollar. Interest rates rose and lending restrictions were imposed by central banks in various
nations, leaving government agencies and businesses without access to operating funds.
These businesses therefore had trouble meeting payroll on time, thus reducing effective
demand. Ref 16
Traditional transition approaches had short-term destabilising effects and left the populace
poor for the long haul. The drop in GDP was far more severe than projected. For all
transition economies, the production fall didn't end until 1992–1995. Total economic
production in transition economies fell by 41% between 1989 and 1994. Around 1993,
growth resumed in Central and Eastern European economies, with Poland recovering from
recession in 1992 after starting its reform plan earlier. The Baltic States and the remainder
of the former Soviet Union emerged from their respective recessions in 1994 and 1996,
respectively. Until the middle of the 1990s, inflation averaged over 20% annually (save in
the Czech Republic and Hungary). The greatest annual inflation rate for all transition
economies was 2632 percent (4645 percent in the CIS; the CIS was established in December
1991). ... Currently, Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan,
Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, and Ukraine are all members of the
Commonwealth of Independent States (CIS). While the unemployment rate registered at
employment exchanges remained low in Russia and other CIS nations, the unemployment
rate and real salaries grew. The International Labor Organization's labour force surveys
revealed dramatically increased unemployment rates and substantial domestic migration.
High interest rates gave rise to a "credit crunch" and fuelled inter-enterprise indebtedness
and hampered the expansion of small and medium-sized enterprises, which often lacked the
connections to obtain finance legitimately. Ref 16
Yet as time passed, local manufacturers improved their capacity, and FDI flowed into the
transition economies, helping them flourish. Better consumer items could be purchased
locally, and domestic businesses regained ground lost to foreign rivals. Large-scale capital
flight, in which local agents sent some of their earnings overseas to areas where they felt
their money was safer, hampered efforts to stabilise the exchange rate. Most of Central and
Eastern Europe gained confidence in property rights and economic and political institutions
due to the prospect of European Union membership and the passage of EU laws and
regulations. Ref 16
The low level of development, decades of trade isolation, and distortions in the socialist
planned economies have all been blamed by some economists for the poor growth
performance of the transition countries. They argued that the adopted transition strategies
demonstrated the urgency with which the economic crisis in socialist planned economies
must be addressed. The overarching goal was the transition to capitalist market economies,
rather than the promotion of economic growth and welfare. Ref 16
The European Bank for Reconstruction and Development (EBRD) found that by 2000, the
reform momentum in each transition economy had waned from its original high point. Even
if democratic political systems and institutions had been established and the groundwork
for a prosperous market economy had been laid via continual liberalisation, there were still
obstacles to be overcome. Even if political freedom has reduced the power of special
interests, liberalised markets were not always competitive.
The transition economies' GDP index reached 112 in 2007, one year before the global
financial crisis. In 1989, it had been at 100. That is to say, the production level before the
shift was not fully restored until almost 20 years.
The transition economies were severely impacted by the global recession of 2008–2009 and
the Eurozone crisis of 2011–2013, which led to lower growth rates and more
unemployment. Government income were reduced and fiscal deficits were extended due to
the downturn, but by 2012, virtually all transition economies had recovered somewhat and
kept inflation low and steady. Ref 16
Process of Transition
There has been a wide range of possible transitional paths. Some countries have been trying
out market reforms for decades, while others have just started doing so recently (e.g., North
Macedonia, Serbia, Montenegro, and Albania). The toppling of a tyrant (Romania), the
collapse of a government (the Soviet Union), the proclamation of independence (Croatia),
and the merger with another nation are all examples of political upheaval that happened
with reforms (East Germany). On other occasions, incumbent administrations have
implemented economic changes despite a lack of desire in bringing about political change
(China, Laos, Vietnam). The level of surrendered central planning (such as highly centralised
cooperation among CIS nations) and the breadth of liberalisation attempts also vary
between transitional paths (e.g., relatively limited in Romania). Transition turbulence refers
to the macro-economic upheavals that certain nations, including Vietnam, experience
during various stages of transition. Ref 16
A logical definition of the end of transition is provided by narrowing gaps between old and
new sectors in productivity of labour and capital during the reform, as stated in the World
Bank's study, Ten Years of Transition. Without fiscal institutions and good and affordable
spending programmes, such as basic social safety nets for the jobless, the ill, and the aged,
the transition to a market economy is not complete, as defined by Mr. Vito Tanzi, Head of
the IMF's Fiscal Affairs Department. Mr. Tanzi argued that taxes should be raised to pay
these social security expenditure initiatives without burdening the business sector. Ref 16
The European Bank for Reconstruction and Development (EBRD) argues that income
convergence, fair access to economic opportunities, and a wide variety of economic activity
are necessary for a healthy market economy. (If developing nations expand quicker than
developed ones, the gap between their incomes will close over time. Convergence of
income is the term for this phenomenon. If affluent nations expand faster than poor ones,
however, incomes will begin to diverge. None of these goals had materialised by 2013, and
efforts to develop robust market economies had halted in the 1990s. Transition economies
have become "stuck in transition" according to EBRD indicators. By the end of the 1990s,
these economies had mostly completed price liberalisation, small-scale privatisation, and
the opening of trade and foreign currency markets. Governance, corporate restructuring,
and competition policy were all areas where reform had stagnated, and they remained well
below the norm of comparable mature market economies. Ref 16
Income per person in the transition countries had, in PPP terms, become quite close to that
of the European Union throughout 1994–2004. Consistent increases in productivity were
the primary factor in these advancements, which followed the elimination of inefficient
forms of capital stock and the reallocation of production to take advantage of liberalised
markets, lower prices, and more FDI. The EBRD predicts that unless further productivity-
enhancing structural changes are implemented, the possibilities for income convergence
have diminished since the late 2000s, when growth rates slowed during the era of catch-up.
Ref 16

The EBRD Transition Report 2013 suggested that the transition economies should do the
following to drive for further economic change and escape a vicious spiral.
 By liberalising trade and finance, reform became less susceptible to public opinion
(or "market aversion"), and non-EU nations gained access to the EU single market via
membership or association agreements (like the ones now being discussed with
Ukraine, Moldova, and Georgia).
  Invest in human capital, notably by boosting the quality of tertiary education; •
Promote open and accountable governance by increasing media and civil society
oversight and political competition during elections. Ref 16
 There may be a broader context for the phrase "transition economies," often used
for nations in Central and Eastern Europe and the Former Soviet Union. Countries
outside Europe are transitioning from a socialist-style command economy to a
market-based economy (e.g., China). Notwithstanding these developments, several
nations withhold political liberties and basic human rights. There has been no
political transition in these nations.
 All nations whose governments are working to alter their core constitutional aspects
in favour of market-style principles fall under the notion of a "transition economy."
Possible places of genesis for these economies include those emerging from post-
colonial situations, highly regulated Asian-style economies, post-dictatorship
economies in South America, and economically poor nations in Africa.

Managing in Transition Economies

Corporate governance is now at the forefront of policy discussions all around the globe. But,
it may also entail a broad variety of other topics concerned with the incentives that drive
business behaviour. Hence, they are related to the methods and structure of corporate
decision making.
Founded in 1961 to promote economic growth and international commerce, the
Organisation for Economic Co-operation and Development (OECD) is an intergovernmental
economic organisation with 37 member nations. It's a meeting place for nations committed
to democracy and the free market. They can discuss their policies, find solutions to shared
challenges, learn from each other's successes, and work together on local and international
issues. (https://en.wikipedia.org/wiki/OECD)
Business governance has two meanings according to the OECD Guidelines on Corporate
Governance from 1999. It discusses the dynamics between the many stakeholders in a
limited liability company and the actions they tend to take. To begin, corporate governance
is the process through which stakeholders such as management, owners, workers, creditors,
major consumers, and communities work together to shape a company's direction. Second,
public policy is essential to effective corporate governance because businesses develop their
strategies within the bounds of a regulatory framework established by the state. Company
law, securities regulation, listing requirements, and insolvency legislation are all examples of
rules involving private self-regulation.
A conducive public policy, legal, and regulatory environment is required for good corporate
governance practices to flourish. Corporate governance is a topic of interest for
governments worldwide. In recent decades, private firms have emerged as key generators
of global economic growth and new employment opportunities. The formation or
strengthening of corporate governance is of rising importance in all nations as economic
progress becomes more reliant on expanding a competitive business sector. This is
especially true for nations undergoing a tough economic transition and starting from scratch
in establishing their private sector.
Businesses in a market economy start when owners pool resources like cash and land or
labour from investors and shareholders. Making money is one of their main goals.
Companies in the private sector have excelled in contributing to economic progress. This
was a major driving force behind the privatisation movement that swept across many
economies in the previous decades, both developed and emerging. The recent decade has
seen a massive shift of business ownership in transition nations, allowing for economic
development. Privatization is necessary for these nations to create an effective and
competitive business sector. It has been attempted in almost all these nations, but with
varying degrees of success.
If the corporate organisation is to achieve its primary profit-seeking aim as efficiently as
possible, both in terms of private and public benefit, good corporate governance is required.
This crucial consideration is frequently overlooked when planning a period of transitional
privatisation. It was believed that the transfer of ownership would lead to the emergence of
effective corporate governance practises. Evidence from countries in transition suggests
that privatisation alone is insufficient to foster a healthy business sector. Companies in
transition nations have been unable to successfully restructure due largely to poor
corporate governance. Productivity plummets when businesses lack proper governance
standards and the organisations to uphold them. Managers, shareholders, and other
stakeholders must establish and commit to good corporate governance. Developing
excellent corporate governance practises in transition countries is primarily about
establishing the necessary institutions to propel a smooth transition to a market-based
economy and private firms.
First, strong corporate governance requires all relevant agents, including managers and
shareholders, to have a firm grasp on what is expected of them and act accordingly. The
transition economies are still in the early stages of such a cultural revolution. Many private
shareholders have been established due to widespread privatisation, but they may be
unaware of the obligations and privileges that come with their newfound status as business
owners. Most of them are only awaiting the distribution of dividends, which are often
negligible. Managers at corporations do not seem to have a firm grasp of their duties as the
shareholders' representatives. Aiming for personal gain at the expense of shareholders and
the organisation, they manage their businesses as if they were their own. To bring about the
necessary change, governments will need to use a combination of "carrots and sticks" and
strict regulatory mechanisms to guarantee that businesses act ethically. They need to
understand that it is preferable to invest in the company's long-term growth in many
situations than to transfer funds to an offshore account.
Second, corporate governance law and regulation are still in their infancy in transition
nations. Improving the consistency and enforcement of this framework is the top priority for
policymakers as they attempt to reshape their local economy. The majority of these nations
have previously established company law, which forms the backbone of their corporate
system. Yet, due to a lack of an effective enforcement mechanism, the legislation often fails
to establish a sufficiently clear and full set of regulations and is poorly applied. In addition,
corporations are a relatively new occurrence in many nations, therefore there are no
established norms against which to measure these frameworks' efficacy. The company law
requirements establish the entity known as a limited liability corporation. Company law
permits a corporation to solicit the general public for financial backing, and shareholders are
solely responsible for their initial capital investment. Creditors need to know that their
money is safe in a corporation, thus the company must be allowed to hold certain pieces of
property. Such a sophisticated institutional structure cannot perform properly or grow
steadily without strong legal support and an all-encompassing legal framework.
Therefore, although company legislation is essential, it is insufficient for the corporate
governance structure. The law and other regulatory norms heavily influence companies'
actions. Several nations in transition lack an established model or standard for corporate
regulation, hence they have yet to draught and execute laws concerning bankruptcy and
securities. "corporate governance" may also refer to the method and structure used in a
free market to pick business management. Managers who have received proper training and
education can better reward their company's capital sources, allowing them to raise more
cash and expand their firm in a healthy corporate environment. The market's ability to
choose business leaders is a hallmark of a functional system of government. It fosters
growth in the market and a pool of qualified managers.
The growth of a prosperous business sector and, by extension, the economy, is bolstered by
competent management. Otherwise, the business sector's contribution would be
meaningless, and efforts to strengthen corporate governance should not be wasted.
Corporations that lack transparency and accountability are more likely to harm government
legitimacy and efficiency. They will initiate and maintain a revolving door of bribery,
corruption, and poor management in both the corporate and governmental sectors.
Building a society where everyone can see and be held responsible relies heavily on the
maturation of public institutions, one of which is strong corporate governance. This is less of
a challenge in a democratic system when political and judicial processes are open to the
public. So, a shift from a totalitarian rule to a more open and democratic democratic one is
also required in these economies.
The banking industry's health largely depends on good corporate governance. The public's
savings are collected by banks, who then lend the money to private businesses. Significant
systemic hazards occur if banks cannot accurately evaluate the health and risk of the
businesses to whom they provide loans. When the amount of bad loans held by financial
institutions continues to rise, renationalization of the banking system will become
inevitable. (Nationalization refers to the process through which the government assumes
control of a formerly privately-held business, industry, or asset. Nationalization is distinct
from privatisation, which involves transferring publicly owned businesses to private hands.
Banking acquisition by companies is another prevalent issue in unstable transition
circumstances. Corporations employ or are governed by politically and economically
powerful individuals. The government's complicity in this capture brings up a related topic:
the governance of financial institutions. Hence, for the sake of the economy as a whole,
sound banking governance processes are crucial.
There are two reasons why good corporate governance is crucial for economies in
transition:
To start, there is a shortage of domestic savings in these countries. They should be put to
best use in expanding the economy. So, investments should be made in the most lucrative
businesses with the best prospects for future development. This would not be possible
without strong corporate governance processes that offer enough information to and
monitoring by fund sources like banks. So, good corporate governance directly affects the
effective use of limited resources. As substantial market defects and failures render direct
capital and product market controls ineffective, a rules-based corporate governance system
is necessary for economies in transition. Thus, these sanctions will not be enough for
monitoring C-suite executives.
When shareholders in developed market economies are dissatisfied with a company's
performance, they often sell their shares on the market. This causes the share price to fall. A
subsequent downgrade in the company's rating would make it harder for the business to
issue fresh shares or corporate bonds to raise capital. In theory, fewer financial institutions
would be prepared to lend money to such a business. If the share price falls, the
management may also face the real risk of a takeover. Due to the absence of developed
securities markets and a robust banking system, this market discipline mechanism is
severely hindered in emerging and transition nations. Thus, market systems in these
economies will require some time to establish themselves.
Takeovers remain challenging in the absence of organised markets and dependable
corporate information. Thus, clear regulations and mechanisms are required for a
governance mechanism through which shareholders and occasionally even creditors may
punish corporate managers in such nations to ensure effective administration of firms. In
general, policymakers in this field should work to facilitate the onset of a positive feedback
loop. This is when moral principles and professional ethics come into play. With their help,
efficient structures may be established, and ensuring the populace's well-being can rise to
the top of everyone's agenda, especially in the corporate world. The effective deployment of
financial resources is essential for economic progress, which is a direct result of good
corporate governance. If the financial market functions properly, it will increase market
discipline on business management, leading to improved corporate governance procedures.
The Development of Corporations and Management Theory Prehistorical periods with
exemplary leadership. Changes in business and industry. Men in business and
management in the 18th and 19th centuries. Differences across countries in how
corporations have evolved. Russian commerce before the revolution. Soviet
administration.
The Evolution of Business organisations and the
Management Thought Examples of effective
management in earlier epochs.
Over the history of management, many theoretical frameworks, known as "schools of
management thought," have emerged to guide academic research into the field. There are
many different schools of management philosophy, and they all have their own underlying
assumptions about managing people and businesses in a given era. Management as a field
of study dates back to the latter half of the nineteenth century. Management theory and
research have advanced through many phases as academics and thinkers discussed and
documented various facets of effective management. Management theorists have spent
years trying to organise the vast management literature. These efforts at categorization
have led to the discovery of many management schools.
The precise number of management universities is a point of contention. Between three and
twelve have been named by various authors. Among them are (1) the classical school, (2)
the behavioural school, (3) the quantitative or management science school, (4) the systems
school, and (5) the contingency school, all of which are addressed in more detail below.

THE CLASSICAL SCHOOL

The classical school is the first and longest-standing of the official management schools.
Originating before the turn of the century. The classical school of management
encompasses the subfields of science, administration, and bureaucracy.

Classical Management philosophy says employees care primarily about their pay and
benefits. Specialization of labour, centralised leadership and decision-making, and profit
maximisation are all advocated without regard to societal requirements or employee
happiness. The classical school of thought focuses on improving the effectiveness of
management of labour and institutions.

Scientific management.

In the last decades of the nineteenth century, managerial choices were made randomly, and
employees frequently deliberately slowed production. There were no ideas of methodical
management, and tensions between employees and management was high. Implementing
scientific management aimed to spark a cultural shift in the workplace. To increase
productivity, this field studies and analyses various approaches to work. Main proponent of
this notion is Frederick W. Taylor. Henry Gantt, Lillian Gilbreth, and Frank Gilbreth all made
significant contributions.

Using the scientific method to figure out the most effective approach to every given project
is the cornerstone of what is known as "scientific management." The second tenet of
scientific management is that employees should be chosen and taught methodically,
considering their specific skills and abilities. The third tenet of scientific management
promotes honest collaboration between employees and management based on mutual self-
interest. The fourth tenet of scientific management is that the organisation as a whole is
responsible for the planning of all tasks. Still, individual employees are primarily responsible
for implementing those tasks. The field of scientific management encompasses the
systematic establishment of performance benchmarks and the implementation of a pay-for-
performance incentive structure predicated on those benchmarks.

Administrative management.

The field of administrative management is concerned with management theory and practise.
A more comprehensive philosophy of management is provided by administrative
management. Henri Fayol has influenced this school of management theory.

According to Fayol, management is a process of several roles that need to be carried out to
succeed. Fayol argued that management should be considered a distinct field of study from
accounting, finance, and production since all managers do these tasks. Among Fayol's
fourteen management principles are those related to delegation, accountability,
centralization, initiative from lower-level employees, and teamwork.

Bureaucratic management.

A core tenet of bureaucratic administration is the pursuit of perfection in structure.

Bureaucratic management is mostly credited to Max Weber. Weber saw that early
companies relied too much on personal ties and loyalty for management and concluded that
this was inefficient. He proposed a system of organisation that he dubbed a bureaucracy,
characterised by a strict division of work, strict hierarchies, impersonal procedures, and
meritocratic hiring and promotion. The result would be a more effective administration.
According to Weber, managers' status in an organization's hierarchy is their primary power
source.

Management bureaucracies have gained a reputation for being rigid and wasteful. Several
businesses today still use Weber's foundational concepts from contemporary organisation
theory.

THE BEHAVIORAL SCHOOL

Human behaviour in organisations was one area that some theorists believed was
overlooked by the classical school's focus on efficiency, method, and principles. Hence, the
behavioural school looked at what influences workers' actions on the job. Because of its
emphasis on workers as individuals, the human relations movement is another name for the
behavioural management philosophy. Behavioral theorists believed that increased output
might be achieved by gaining a deeper comprehension of factors influencing employee
behaviour in the workplace.

Human relations.
Starting in 1924, the Hawthorne Experiments ran until the early 1930s. Clair Turner, Fritz J.
Roethlisberger, and Elton Mayo were just a few researchers who participated in the study.
The research aimed to determine whether, for example, better illumination resulted in a
more attentive and productive workforce. Surprisingly, Mayo and Roethlisberger discovered
that employees were more susceptible to social aspects at work, such as the quality of their
co-workers and the level of interest their boss showed in their performance.

Findings from the Hawthorne tests show that employees respond positively when their
bosses show them special care and interest in their job. According to the findings, social
concerns are just as crucial to employee output as financial incentives.

One key finding from the Hawthorne investigations was the correlation between employee
mood and output. Second, because of the social nature of the job, individuals are more
susceptible to the influence of their peers. Finally, the manner of management makes a
difference in how content employees are with their jobs. The research also concluded that
businesses should facilitate employee adaptation to the workplace by fostering a
cooperative connection between workers and upper management.

Managers who subscribe to the human relations school of thought are well-equipped to
deal with workplace challenges thanks to their knowledge of what motivates and inspires
people and how to effectively communicate with one another. According to this school of
thinking, it's all about the employees. Workers would be more efficient if their needs were
met. Consequently, the human relations school is concerned with aspects of interpersonal
interaction, such as communication, leadership, motivation, and group dynamics. All
academy members were Mary Parker Follett, Chester Barnard, Abraham Maslow, Kurt
Lewin, Renais Likert, and Keith Davis.

Behavioral science.

Throughout the 1950s and 1960s, new ideas and concepts in behavioural science, including
the study of organisational behaviour, began to emerge. With the success of the human
relations movement, the behavioural science school emerged. Understanding and
forecasting employee behaviour in the workplace was the focus of this academic discipline.
The Gordon and Howell report on higher education from 1959 emphasised the need of
studying behavioural science in business schools and among management practitioners.

Focusing on topics like personality, values, motivation, group behaviour, leadership,

communication, and conflict, the behavioural science school has significantly contributed to
the study of management. The influential thinkers who contributed to this school are
Douglas McGregor, Chris Argyris, Frederick Herzberg, Renais Likert, and Ralph Stogdill.

THE QUANTITATIVE SCHOOL

The quantitative school aims to enhance decision making using numerical methods.
Scientific management is the foundation upon which it was built.

Management science and MIS.

The management science perspective sees management as a logical entity whose behaviour
can be represented in mathematical symbols, relationships, and measurement data. This
perspective is also known as the mathematical or quantitative measurement method.
Management science, often known as operations research, is a branch of study that applies
mathematical and statistical methods to business administration. Throughout WWII, its
development was spurred by applying scientific knowledge and methodologies to the
difficult challenges of military planning. After World War II, management science was
adopted by industry. Linear programming, an algebraic technique created by George
Dantzig, is used to figure out how to best distribute limited resources. Inventory control
theory, goal programming, queuing models, and simulation are also used in business.
Several ideas and methods from the field of management science were widely applicable to
business with the advent of the computer. The fields of management science and MIS have
common ground. Management information systems are geared toward giving managers
pertinent data when needed. Better management choices may be made with the help of
decision support systems (DSS) since they integrate decision models, data, and the manager
making the decision. Ref 13
The mathematical model is the key research focus. This approach allows for expressing
management and other challenges as fundamental relationships, from which a model may
be derived. The manager's desired outcomes may be described in an optimal version of the
model. The decision-theory approach is a major inspiration for this method. As a result, it
offers a wide variety of tools for making educated choices.
The major features of this approach are as follows:
1. Using mathematical tools and procedures, management is seen as a problem-solving
process.
2. Symbols and numbers are used to describe management issues.
3. This strategy makes use of human behaviour, decision-making, and systems analysis.
4. Today's standard methods for addressing management challenges include
operations research, mathematical instruments, simulation, models, etc.
5. The study of management from a scientific perspective is a rapidly expanding study
area. Because of this, managerial thought has become more structured, leading to
more precision in the pitch.
Production and operations management.
Definition: Operations / Manufacturing Management is the process through which an
organisation converts its inputs (resources) into outputs (products) according to a
predetermined set of rules that can be followed repeatedly. By "policies," we mean the set of
norms that serve to improve the ultimate product.
This academic discipline studies the management and regulation of the factories and plants
that turn raw materials into final products. After WWII, it emerged as a distinct field of
management research. The methods of management science are heavily used.

Productivity and quality in production and service are important concerns of operations
management. W. Edwards Deming significantly impacted how we think about boosting
efficiency and quality today. Important areas of study within the broader field of operations
management include capacity planning, facility location and layout, materials requirement
planning, scheduling, purchasing or inventory control, quality control, computer-integrated
manufacturing, just-in-time inventory systems, and flexible manufacturing systems.
SYSTEMS SCHOOL

When we talk about using a systems approach to management, we mean looking at the big
picture to determine how best to use the human and material resources to achieve your
organization's stated goals. For this to work, the firm must have clearly defined long-term
goals.

The systems approach seeks to see businesses as dynamic systems that change inputs into
outcomes. Ludwig von Bertalanffy, a biologist, founded this school on the idea that a unified
science is possible by applying a general systems model. Kenneth Boulding, Richard Johnson,
Fremont Kast, and James Rosenzweig were all influential members of this school.

As a theoretical framework for management practises that facilitate managers' linking of

the firm's many specialised units with the external environment, the systems school
significantly affected management philosophy in the 1960s. The systems approach
emphasises the organisation as a whole, its relationship to its surroundings, and the need to
maintain balance. While general systems theory was widely discussed in the 1960s, its
impact on management theory has since waned. It's been said to be too difficult to
understand and abstract. The concepts that would later become the foundation of the
"contingency" approach to management may be traced back to the "systems" school.

CONTINGENCY SCHOOL

The concepts and procedures of management advocated by the "contingency school" may
be adapted to the specifics of every given circumstance. It argues that the ideal
management method varies from one scenario to another, depending on variables such as
the nature of the task at hand, the resources available, the nature of the organisation, the
manager in charge, and the employees under their supervision. Contingency theorists
criticise the universality of classical management ideas as unrealistic.

The foundations of the contingency school were laid in the '60s. Management challenges
such as organisational structure, job description, employee motivation, and authoritative
methods have all benefited from its use. For instance, the best way to form an organisation
will vary depending on the specifics of the job at hand. The best leadership style has been
believed to vary with factors such as organisational size, technology, and environmental
unpredictability, task structure, position power, group characteristics, individual
subordinate traits, quality needs, and problem structure. Joan Woodward, Paul Lawrence,
Jay Lorsch, Fred Fiedler, and others have all made important contributions to this school of
management theory.

CONTEMPORARY "SCHOOLS" OF MANAGEMENT THOUGHT

It's clear that fresh perspectives on management research and practise are always
developing. Two modern methods are total quality management (TQM) and the learning
organisation. These management philosophies don't provide a comprehensive philosophy of
management but provide light on the subject.
TOTAL QUALITY MANAGEMENT.
The goal of the management strategy known as total quality management (TQM) is to
ensure that all aspects of the business are effectively coordinated to ensure that consumers
get consistently high-quality products and services. This kind of administration was used in
Japan after WWII and was essential to the country's economic recovery. It contributed to the
country's economic revival.

There are at least four main components of TQM.

One of the most important ways to head off quality issues before they ever start is to
involve your staff. The company's success depends on its ability to anticipate its customers'
requirements and provide them with the goods and services they want.

Second, the company often looks to other businesses that excel in the same function or
process to gauge how well its operations are doing in comparison. Benchmarking" describes
this practise.

Third, the company will endeavour to improve the methods used by other businesses to
increase its chances of commercial success.

Fourth, if your company has adopted a concept of continuous improvement, it indicates

you're dedicated to making small, steady improvements across the board. Over time, this
will result in unparalleled excellence.

Several businesses throughout the globe have embraced TQM to boost their own
productivity.

LEARNING ORGANIZATION.

There has been a lot of environmental and technical change that modern organisation must
adapt to. To remain competitive, businesses must adapt quickly to new developments in
technology, customer needs, and the external environment. A learning organisation is one
in which personnel at all levels work together to discover and solve issues, enhancing the
company's capacity for innovation and progress. The problem-solving mindset is the
intellectual foundation of the learning organisation. The learning organisation emphasises
teamwork, employee autonomy, and transparency. Peter Senge is widely recognised as a
leading authority on organisational learning.

Industrial Revolution
From around 1760 to somewhere between 1820 and 1840, Europe and the United States
underwent a transition to new industrial technologies known as the Industrial Revolution.
The shift from manual to automated labour, the introduction of new chemical
manufacturing or iron production techniques, the widespread use of steam and water
power, the maturation of machine tools, and the establishment of the mechanised
industrial system were all essential components. Population growth increased at a pace few
imagined thanks to the Industrial Revolution.
The textile sector led the way in the Industrial Revolution by employing the most people,
producing the most goods, and investing the most money.
Britain was the birthplace of the Industrial Revolution and the source of its technical
advances. One of the main reasons for the Industrial Revolution was the growth of
commerce with the colonies and business development.
The Industrial Revolution was a watershed time that impacted almost every facet of society.
Growth in the average income and population altered how business was conducted.
The period of per-person economic growth in capitalist countries started with the Industrial
Revolution. Regarding economic significance, the Industrial Revolution is often regarded as
second only to the domestication of animals and plants.
The early 19th century saw the emergence of iron and coal centres in Belgium and the
United States, followed by textiles in France. This was all because to the expansion of
mechanised textile manufacture from Great Britain.
As early technologies of the Industrial Revolution stalled in acceptance and their markets
matured, the economy slumped in the late 1830s and early 1840s. While the 1840s and
1850s saw the introduction of innovative technologies like the electrical telegraph and the
widespread use of locomotives, steamboats, and steamships, these developments did not
spur rapid economic expansion. After 1870, a fresh set of breakthroughs in the Second
Industrial Revolution sparked rapid economic expansion. The Second Industrial Revolution
saw the development of new methods for producing steel, the introduction of mass
production and assembly lines, the expansion of the electrical grid, the widespread
production of machine tools, and the widespread use of more complex machinery in steam-
powered factories.
Six factors contributed to industrialization: abundant natural resources like coal, iron, and
waterfalls; political stability and a legal system that supported business; a pool of
managerial and entrepreneurial skills; a network of ports, rivers, canals, and roads;
abundant labour; and abundant food and human resources. With Britain's first foray into
industrialization, the process quickly expanded to the rest of Europe and the United States
thanks to the entrepreneurial spirit of the British people and their desire to acquire goods
made possible by that skill. Manufacturing began in Great Britain in the 18th century. In the
early 19th century, Britain introduced the method throughout western Europe, particularly
to Belgium, France, and the German nations. The early 19th-century United States followed
the British model, whereas late 19th-century Japan followed Western European examples.

 A handful of inventions in the second half of the 18th century are associated
with the start of the Industrial Revolution. Several technological advancements
had been accomplished by the 1830s, including:
 Textiles – The productivity of a cotton spinner was multiplied by around 500
thanks to steam and water-powered machinery. The power loom increased a
worker's production by more than 40. 50 thanks increased cotton seed removal
output to the cotton gin. Spinning and weaving wool and linen also saw
significant productivity increases, but not as large as cotton.
  Steam power – Steam engine efficiency rose to using only around a fifth to a
tenth as much fuel as before. The transformation of formerly stationary steam
engines into rotational motion opened up new possibilities for their usage in
industry. The high-pressure engine was portable because it packed a lot of punch
for its size. After 1800, steam power rapidly gained popularity.
 Iron making – The price of pig iron and wrought iron dropped drastically when
coke was used instead of charcoal as the primary fuel source. There were
additional economies of scale because of the use of coke in blast furnaces. Water
power had previously limited iron production, but this obstacle could be
overcome with the advent of the steam engine in the 1750s. It wasn't until 1760
that the blowing cylinder was made of cast iron. Eventually, it was made double-
acting, allowing greater temperatures in the blast boiler. The puddling method
resulted in a cheaper structural quality iron than the finery forge. When
compared to striking wrought iron, the rolling mill was fifteen times quicker. The
use of hot blast (1828) drastically improved iron production's fuel efficiency in
the following decades.
 Invention of machine tools – The first examples of machine tools appeared.
These tools included the screw cutting lathe, cylinder boring machine, and
milling machine. It took many decades to establish successful processes, but
machine tools allowed for the affordable production of precise metal
components. Ref 14
Cotton
Cotton textiles have been hand-made for centuries in some regions of India, China, Central
America, South America, and the Middle East. The year 1000 A.D. marks the beginning of its
rise to prominence as a commercial enterprise. Much of the cotton farmed in the tropics
and subtropics was produced by subsistence farmers who grew it alongside their food crops
and then had it spun and woven at home. Taxes were first collected in China as cotton fabric
in the 15th century. During the 17th century, cotton clothing was widely used among the
Chinese population. Cotton fabric might serve as a kind of currency. Cotton textiles, made in
large quantities by skilled weavers in India, were sent to far-flung markets. India was known
for its high-quality cotton textiles. Work was completed by hand in the houses of weavers
or, on occasion, at the shops of master weavers in England. In 1787, 22 million pounds of
raw cotton were used, most of which was processed mechanically (i.e., cleaned, carded, and
spun). Cotton consumption in the British textile industry climbed from 52 million pounds in
1800 to 588 million pounds in 1850. Around 1770, when British output was about three
times that of India's, wages in Lancashire for cottage industry and subsequently factory
spinning and weaving were nearly six times those in India.
Pre-mechanized European textile production
Due to India's labour cost being around one-fifth to one-sixth that of Britain's, British textile
could not compete with Indian cloth. The British government issued the Calico Acts in 1700
and 1721 to limit the influx of cotton fabric from India and safeguard the local woollen and
linen industries.
Spinning and weaving were common home activities before the Industrial Revolution, both
for personal use and as a putting-out system-based cottage economy. Once in a while, the
process would take place at a master weaver's studio. It was common for merchants to
provide the raw ingredients for the goods their home-based employees made under the
putting-out method. During the off-season, the men performed the weaving while the
women did the spinning. It needed four to eight spinners at the spinning wheel to produce
enough yarn for one weaver at a hand loom.
Invention of textile machinery
The disparity in productivity between spinning and weaving was exacerbated by the
introduction of the improved flying shuttle in 1747, which quadrupled a weaver's
production. By 1760, when the drop box was created and thread colours could be altered, it
saw widespread usage in Lancashire.
The first spinning jenny appeared in 1764. This multi-spindle spinning frame was the first to
be widely used. In 1769, a device known as the spinning frame water frame was invented.
The water frame included four sets of rollers for each spindle, with the speeds of the rollers
increasing as the fibre was drawn out and twisted. Finally, 100% cotton textile could be
woven in Britain thanks to the water frame's ability to spin a sturdy medium-count warp
thread. Horses drove the first factory to employ a spinning frame.
The first Spinning Mule was built in 1779. The mule was a mix of the spinning jenny and the
water frame, thus the name. Crompton's mule could produce finer thread at a lesser cost
than hand spinning. Thread spun by mules was sturdy enough, enabling Britain to mass-
produce yarn that could compete favourably.
A more typical loom that required two people to operate, the vertical power loom, was
developed. Planters in the South of the United States were able to capitalise on the growing
demand for cotton. The United States is credited with creating the low-cost cotton gin. A
man using a cotton gin could remove seed from as much upland cotton in one day as would
previously, working at the rate of one pound of cotton per day, have taken a woman two
months to process.
Successful businesspeople like Richard Arkwright benefited from these developments.
Arkwright fostered the innovators, patented the concepts, supported the projects, and
safeguarded the machines. Still, others like Thomas Highs and John Kay are the ones who
deserve credit for the innovations. The cotton mill he invented centralised production in a
single building, and his innovations in harnessing power (first horse power, later water
power) turned cotton production into a mechanised business. Other innovators improved
carding, twisting and spinning, and rolling to boost yarn production. Textile equipment was
converted to run on steam power. Cotton polis was the term given to Manchester in the
early 19th century because of the city's abundance of textile mills.
Machine-woven fabric could not match the quality of hand-woven Indian cloth until the
middle of the 19th century, partly because the cotton used in India allowed for high thread
counts. Yet, the cheap wages in India combined with the great productivity of British textile
production led to the destruction of the hand-spun and woven textile sector. Ref 14
Iron industry
Cast iron may be made using mined coal in the reverberatory boiler. Impurities like sulphur
and silica were not introduced into the iron because the burning coal was kept at a safe
distance. By doing this, the ability to produce more iron was unlocked.
Iron process innovations
During the Industrial Revolution, coal replaced wood and other biofuels in the iron
industries. This was a big change. There was a lot more coal than wood. By 1750, coke had
mostly replaced charcoal in melting copper and lead, and it was also widely used in making
glass. Coal and coke were used to smelt and refine iron, but the iron they made was not as
good as charcoal.
Before the Industrial Revolution, the lack of water power to run blast bellows was another
thing that held back the iron industry. The steam engine was able to get around this
problem.
From 1678, coal reverberatory furnaces called "cupolas" made iron from coal. These were
powered by flames that played on a mixture of ore, charcoal, or coke. This turned the oxide
into metal. This is good because it keeps the metal from getting dirty from the impurities in
the coal. This method was used on lead as early as 1678 and copper as early as 1687. In the
1690s, it was also used in iron foundries. In this case, the reverberatory boiler was called an
air boiler.
By 1709, Abraham Darby had made some progress with his blast furnaces by using coke to
power them. But coke pig iron couldn't be used to make wrought iron. Instead, it made cast
iron items like pots and kettles. He was better than his competitors because his pots were
thinner and cost less than theirs.
Before 1755–1756, when low sulphur coal became available, coke pig iron was rarely used
to make wrought iron. These new furnaces had bellows that were powered by water.
Newcomen steam engines were used to move the water. The Newcomen engines weren't
connected directly to the blowing cylinders because they couldn't make a steady stream of
air independently.
Because of steam engines, utilizing blasts of greater pressure and volume became feasible.
A blowing engine for blast furnaces that ran on hydraulic power was invented in 1757.
Cast iron became a common structural material for bridges and structures as it grew more
affordable and readily accessible. The Iron Bridge, constructed from cast iron in 1778, is an
early and well-known example. Nonetheless, wrought iron was replacing cast iron in most
applications.
Before cast iron could be mass-produced, the bloomery was Europe's primary source of
wrought iron. As it had been for centuries, a finery forge was used to transform cast iron.
Puddling yielded a low-cost structural-grade iron.
Molten pig iron may be decarburized by gradual oxidation in a reverberatory boiler using a
process known as "puddling," which includes physically swirling the iron with a long rod. The
decarburized iron, which has a higher melting point than cast iron, was raked by the puddler
into globs. The puddler would take the glob out when it was big enough. It was very hot and
arduous labour to do any puddling. Very few puddlers made it beyond the age of 40. Coal or
coke could be utilised as fuel since puddling was performed in a reverberatory boiler. When
steel began to replace iron in the late 19th century, the puddling method remained in use.
The manufacturing of steel, a precious commodity utilised exclusively when iron would not
do, such as in cutting edge instruments and springs, was greatly improved just before the
Industrial Revolution. In the 1740s, the crucible steel process was perfected. Blister steel
was used as the primary raw material.
Several businesses benefited from the availability of inexpensive iron and steel, including
those that produce nails, hinges, wire, and other hardware. Iron's improved workability
thanks to the advent of machine tools led to its widespread use in the rapidly expanding
equipment and engine sectors.
Steam power
Even though the invention of the stationary steam engine was a major step forward for
industry, water and wind still provided most of the energy needed in the early stages of the
Industrial Revolution. It is believed that by 1800, 10,000 horsepower in Britain was being
provided by steam. The output of steam engines reached 210,000 horsepower by 1815.
Before 1712, the first practical piston steam engine was built. In Britain, many Newcomen
engines were constructed to drain deep mines that had previously been inaccessible from
the surface. They were also employed to run the pumps that provided water to cities.
James Watt, a Scotsman, made significant advancements to the steam engine and had it
working perfectly by 1778. By making these adjustments, Boulton and Watt's engines were
significantly more efficient, using just 20-25% as much coal per horsepower-hour as
Newcomen's.
Metal components and frames became standard on machines as the Industrial Revolution
continued. Metal components also significantly produced weapons and threaded fasteners,
including machine screws, bolts, and nuts. Accuracy in manufacturing was also essential.
Standardizing threaded fasteners and facilitating interchangeability of components would
be possible with increased precision in the manufacturing industry.
Hammers, files, scrapers, saws, and chisels were the mainstays of metalworking before
developing more sophisticated machine tools. As a result, we used as few metal machine
components as possible. Producing anything by hand was a time-consuming and expensive,
with little room for accuracy.
In 1774, the cylinder boring machine was developed as the first major precision machine
tool. Its primary function was to bore the massive cylinders of the first steam engines.
It was primarily due to a programme in the United States that the methods for mass-
producing metal components with sufficient accuracy to be interchangeable were
developed. Military Department, which in the early 19th century mastered using removable
components in guns.
The machine industry dominated the American manufacturing landscape for fifty years after
introducing the first machine tools.
Chemicals
During the Industrial Revolution, the mass manufacture of chemicals was a significant
advancement. The earliest was the lead chamber technique for making sulphuric acid,
developed in 1746. The production of sulphuric acid increased by a factor of at least 10.
Another major focus was the industrial manufacture of alkali; Nicolas Leblanc achieved this
in 1791 by introducing a technique for making sodium carbonate. Sodium sulphate and
hydrochloric acid were produced using the Leblanc process, which included the interaction
of sulfuric acid and sodium chloride. Limestone (calcium carbonate) and coal were added to
the sodium sulphate and heated to produce sodium carbonate and calcium sulphide. The
procedure resulted in a substantial quantity of air pollution. Yet, this synthetic soda ash cost
was far lower than that of soda ash obtained by burning certain plants (barilla) or kelp, the
two prior sources of soda ash dominance, and potash (potassium carbonate) obtained from
hardwood ashes.
These two substances played a crucial role in paving the way to develop many other
innovations. The production of glass, textiles, soap, and paper used sodium carbonate.
Pickling (removing rust from) iron and steel and bleaching (whitening) fabric were among
sulfuric acid's first applications.
Around the year 1800, calcium hypochlorite (bleaching powder) was created. The previous
method for bleaching textiles required repeatedly exposing them to the sun in bleach fields
after soaking them in alkali or sour milk, which took months, whereas this new method just
took days. Tennant's operation in North Glasgow's St. Rollox eventually became the world's
biggest chemical plant.
Following 1860, Germany established itself as a global leader in the chemical industry by
focusing innovation on dyestuffs. Students interested in cutting-edge chemistry methods
flocked to German institutions between 1860 and 1914.
Cement
In 1824, a chemical method for making portland cement was discovered. This was a big step
forward for the building trades. In this process, a mixture of clay and limestone is heated to
about 1,400 °C (2,552 °F) and then ground into a fine powder. This powder is mixed with
water, sand, and gravel to make concrete. When they built the Thames Tunnel, they used
Portland cement. Later, a lot of cement was used when the London sewerage system was
built.
Glass making
The cylinder method of making glass was first used in Europe at the start of the 19th
century. This method was used to make sheet glass in 1832. They soon made the most
windows and plates of glass in the world. This new technology made it possible to make
larger panes of glass without stopping. This made it easier to plan interior space and add
windows to buildings. The Crystal Palace shows how sheet glass can be used to make a new
and interesting building.
Paper machine
In France in 1798, a machine could make a continuous sheet of paper on a loop of wire
fabric. The paper machine is called a Fourdrinier after the people who made it possible.
Even though it has been changed and improved a lot, the Fourdrinier machine is still the
main way paper is made today.
The way the paper machine showed how to make things continuously influenced how other
things were made continuously.
Agriculture
People think the British Agricultural Revolution helped start the Industrial Revolution
because it made farming more productive, freed people to work in other parts of the
economy.
The seed drill, the Dutch plough, iron parts, and the threshing machine were all industrial
technologies that changed farming.
In 1701, a better seed drill was made. The machine planted seeds at the right depth and
spread them evenly across a plot of land. Not until the middle of the 18th century were
good seed drills made.
In 1730, the Rotherham plough was the first iron plough that did well in business. When the
threshing machine was invented in 1784, it replaced threshing by hand, which took about a
quarter of all farm work.
During the Industrial Revolution, machine tools and ways to work with metal were made
better. This made it possible to mass-produce agricultural tools like reapers, binders, and
combine harvesters in the late 19th century.
Mining
Britain's coal mining industry began early, especially in South Wales. Shafts could be dug deeper and
more coal could be mined with the invention of the steam pump in 1698 and the Newcomen steam
engine in 1712. The Cornish engine, created in the 1810s, outperformed the Watt steam engine by a
wide margin.
Because of the firedamp in many coal seams, coal mining posed a significant risk to workers. The
safety light, created in 1816, helped alleviate some of those concerns. The bulbs, although first
providing some light, rapidly proved hazardous. As explosions persisted throughout the nineteenth
century, so did the number of victims. The working conditions were appalling.
Transportation
When the Industrial Revolution began, heavy commodities were transported by sea after
being transported inland by navigable rivers and roadways. Since canals had not yet been
extensively built, coal was transported to rivers through wagonways before being shipped.
Animals powered all land transport. By the close of the 18th century, the first horse-drawn
railroads were built, and by the early 19th century, steam locomotives had replaced them.
In the two centuries between 1750 and 1830, advancements in sailing technology doubled
the typical ship's speed.
The turnpike road, canal, waterway, and railway systems were all enhanced during the
Industrial Revolution in Britain. Transporting raw materials and completed goods would be
easier and cheaper. Increased mobility also facilitated the rapid dissemination of innovative
ideas. Ref 14
Canals and improved waterways
Some British rivers enhanced navigability through removing obstacles, straightening bends,
widening and deepening, and constructing navigation locks before and during the Industrial
Revolution. By 1750, Britain's rivers and streams stretched over 1,000 kilometres.
Long-distance, cost-effective delivery of bulk goods into the interior was made possible by
canals and rivers.
The Bridgewater Canal in Northwest England opened in 1761 and became a commercial
success. To duplicate Bridgewater Canal's financial success, many other canals were
constructed, the most noteworthy of which were the Leeds and Liverpool Canal (1774) and
the Thames and Severn Canal (1789).
The 1820s had established a nationwide system. The organisation and tactics used in canal
building served as a template for those used in railway building. The growth of railroads
beginning in the 1840s gradually absorbed them as lucrative businesses. Manchester Ship
Canal was the final major canal constructed in the United Kingdom; it opened in 1894 and
was the world's biggest ship canal.
The canal system and the mills still stand are two of Britain's most lasting remnants of the
early Industrial Revolution.
Roads
During the early stages of the Industrial Revolution, France stood out among European
countries for its remarkable network of highways.
During the 1720s (and sometimes earlier), turnpike trusts were established up to levy tolls
and maintain certain roads in Britain. Originally, the road system was inadequately
maintained by hundreds of small parishes. Marsh Road in Ashton Gate, Bristol was the first
section of road to be "macadamized" in 1816, when new designed roadways were
constructed. Between Hagerstown and Boonsboro, Maryland, the "Boonsborough Turnpike
Road" was the first macadamized road in the United States in 1823.
During the Industrial Revolution, road transportation became much more efficient, leading
to a precipitous decrease in the price of transportation. Productivity approximately
quadrupled for long-distance hauling and grew four-fold for stage coaching between 1690
and 1840. Ref 144
Railways
One of the main reasons railways were more successful than waggons was the reduction in
friction.
The high-pressure steam engine, invented in 1800, with the rolling mill for making rails and
cheap puddled iron around 1800 made railways a reality.
Steam locomotive production began with the development of high-pressure steam engines
around 1800. The need for a condenser and cooling water was eliminated when high-
pressure engines released spent steam into the atmosphere. With the same amount of
power, they were substantially smaller and lighter than the fixed condensing engines.
Several of the first locomotives found their way into underground mines. The Stockton and
Darlington Railway opened in 1825 as the first public railway powered by steam. The
Liverpool and Manchester Railway, the world's first intercity railway, opened on September
15, 1830.
While the first Industrial Revolution was winding down, pace picked up with the
construction of major railroads linking the bigger cities and villages. Many of the people who
helped build the railroads stayed in the cities after the project was finished so that there
would be more people to work in the industries.

Factory system

Most people worked in agriculture before the Industrial Revolution.

The putting-out system, wherein rural and urban dwellers alike engaged in what is now
known as cottage industry, was commonplace in Britain by the 16th century.
Cottagers could purchase early spinning and weaving equipment like a spindle jenny in
1792. Capitalist ownership of companies emerged due to the high cost of later technology
like spinning frames, spinning mules, and power looms.
Throughout the Industrial Revolution, unwed women and children, including many orphans,
made up the bulk of the workforce in the textile industry. They put in 12–14-hour days, with
Sundays being their only day off. During harvest downtime, it was typical for women to work
in factories for a few months. Many people, such as uprooted farmers and farmhands, had
to take manufacturing jobs since they could no longer support themselves in their previous
occupations.
Standards of living
Economist Robert E. Lucas, Jr. claims that "for the first time in history, the real wages of the
masses of ordinary people have started to undergo sustained growth" and that "nothing
remotely like this economic behaviour is noted by the classical economists, despite its
theoretical possibility." Others argue that although the Industrial Revolution saw
tremendous expansion in the economy's overall productive capacities, most people's living
standards did not improve much until the late 19th and early 20th centuries. Populations
often shrank throughout the Industrial Revolution, suggesting a deteriorating state of
health. The cost of food was rising faster than workers' real incomes.
Children's life expectancy rose considerably throughout the Industrial Revolution. London
dropped from a 74.5 percent infant mortality rate in 1730–1749 to 31.8 percent in 1810–
1929.
Food and nutrition
Up until the late 19th century, widespread hunger and malnutrition affected people all
throughout the globe, particularly in Britain and France. Although U.S. life expectancy had
dropped by a few years by the middle of the 19th century, the people were well-nourished,
significantly taller on average. They could expect to live another 45-50 years on average.
Food supply in Great Britain was adversely affected by the Corn Laws (1815–1846). The Corn
Laws were enacted to protect home farmers by maintaining high grain prices via the
imposition of levies on foreign imports. The Corn Laws were overturned during the early
stages of the Great Irish Famine.
While food production improved in Britain and the Netherlands before the Industrial
Revolution due to better farming methods, population growth was also seen, as
documented by Thomas Malthus. The development of canals, better roads, and steamships
helped break this population growth cycle known as the Malthusian trap. The introduction
of railroads and steamships marked the latter stages of the Industrial Revolution. Ref 14
Housing
Cities like Edinburgh and London, which provided services to their expanding populations,
also saw fast population increase in the 19th century. There wasn't enough money to
construct enough homes for everyone, so the poor arrivals were forced to live in congested
slums. There was a lack of proper sanitation, clean water, and public health services.
Not everyone, however, had to make do with such meagre accommodations. Businessmen,
clerks, foremen, and engineers all had substantially better living circumstances because to
the Industrial Revolution's creation of a middle class.
As the 19th century progressed, conditions improved due to new public health statutes
regulating things like sewage, cleanliness, and housing building. In his 1892 edition, Engels
acknowledges that many of the situations he described in 1844 had vastly improved. For
instance, the more hygienic byelaw terraced home emerged as a result of the Public Health
Act of 1875.
Water supply
Gravity systems and water wheels were used to pump water in the pre-industrial era. Wood
was often used for pipes. Horse watering troughs and homes were able to get piped water
thanks to steam-powered pumps and iron plumbing.
Literacy and industrialization
In the 18th century, when the first modern factories were built in England and Scotland,
literacy rates among farmers were high. This enabled hiring literate artisans, skilled
labourers, foremen, and managers to oversee the burgeoning textile mills and coal mines.
The work was unskilled, and children as young as eight were doing housework and working
in textile mills to help support their families. Kids were pulled out of school to help out at
the industries with their parents.
During the middle of the nineteenth century, British industry required many engineers and
other trained personnel capable of following detailed instructions and dealing with difficult
problems. To get recruited, you needed to be literate.
There was a rise in literacy and calls for widespread political engagement with the advent of
the paper machine and the use of steam power in printing.
Population increase
The Industrial Revolution was the first time in human history when both the population and
the per capita income grew simultaneously.
Labour conditions
Social structure and working conditions
During the time of the Industrial Revolution, the social status of the middle class soared
above that of the landed class, which consisted of nobles and gentry. The new mills &
factories provided more options for normal people to earn a living. Still, they often required
workers to put in long hours following rigid regulations and moving at a pace determined by
machines. In 1900, factory workers in the U.S. worked 10 hours a day (or 12 hours if they
worked in the steel industry), but they made 20% to 40% less than they needed to live a
decent life. In the textiles industry, which had the most jobs, most of the workers were
women and children. Even before the Industrial Revolution, people had to work in harsh
conditions.
The factory was made because of the process of industrialization. Many people moved to
cities to find work in factories, which helped them grow. Manchester, also known as
"Cottonopolis," was the first industrial city in the world.
Also, between 1815 and 1939, 20% of Europe's people left their homes. They went abroad
because there was a huge need for workers, land was easy to find, and transportation was
cheap. This mass migration greatly affected the population: by 1930, they made up 11% of
all Europeans in the world. Most of these people moved to the Americas, where they lived
in large numbers.
During most of the 19th century, things were made in small mills. These mills were usually
powered by water and were built to meet local needs. In the future, each factory would
have its own steam engine and chimney to get air into its boiler.
Some industrialists tried to improve things for their workers in the factories and where they
lived. Robert Owen was one of the first to try to improve working conditions at the New
Lanark mills. People thought he was one of the most important socialist thinkers then.
Child labour
During the Industrial Revolution, the number of people worldwide went up, but the chances
of surviving childhood did not improve. But the rates of babies dying were cut down by a lot.
There were few chances to go to school, and kids were expected to work. In the early stages
of the Industrial Revolution, factories relied on child labor between the 18th and 19th
centuries. In England and Scotland in 1788, two-thirds of the children who worked in cotton
mills powered by water were under 14.
Many kids had to work in pretty bad conditions for 10–20% of what an adult man made.
Politicians and the government tried to make children's work in factories illegal, but factory
owners fought back. Some thought they were helping people experiencing poverty by giving
their children money to buy food so they wouldn't starve, while others just liked having
cheap labour. The first general laws against child labour were passed in Britain in 1833 and
1844. They were called the Factory Acts. Children under nine were not allowed to work, and
children under 18 were only allowed to work for twelve hours a day.
Organisation of labour
The formation of trade unions helped the workers' interests. With the power of a union,
better terms could be asked for. Employers had to decide whether to give in to union
demands and pay for it or risk stopping production. Skilled workers were hard to replace,
and this kind of bargaining helped them improve their working conditions.
Many strikes were hard on both the unions and the people in charge. The Combination Act
of 1799 made it illegal for workers in Britain to form any trade union until it was changed in
1824. In 1834, a British newspaper called unions "the most dangerous institutions that have
ever been allowed to grow under the protection of the law in any country." Ref 14
In the 1830s and 1840s, the Chartist movement was the first large-scale organised working-
class political movement that fought for political equality and social justice. It got over 3
million signatures on its Charter of Reforms, but Parliament didn't even look at it.
People who worked also formed "friendly societies" and "co-operative societies" to help
each other in economic trouble. Industrialists with good ideas, like Robert Owen, helped
fund these groups to improve the lives of the working class.
Slowly, unions got around the laws that made it hard for them to go on strike. Through the
Chartist movement, cotton workers and coal miners went on a general strike in 1842, which
stopped all work in Great Britain.
After the right to vote was given to more people in 1867 and 1885, trade unions began to
back socialist political parties. This made it easier for working people to get involved in
politics. The British Labour Party grew out of the socialist political parties.
Effect on environment
During the Industrial Revolution, when pollution in the air was getting worse because of
more smoke, people started to care about the environment. The rise of big factories and the
huge increase in coal use simultaneously caused air pollution in industrial centres that had
never been seen before. After 1900, there was already a substantial amount of untreated
human waste, compounded by the large amount of chemical waste from companies. In
1863, Britain approved the Alkali Acts, the first comprehensive contemporary environmental
rules anywhere in the world. Soda ash is produced via the Leblanc process, and these
measures were implemented to mitigate the resulting pollution (gaseous hydrochloric acid).
A chief inspector for alkali and four subordinate inspectors have been appointed to put a
halt to this pollution. The inspectorate's role expanded throughout time, culminating in
1958 with the Alkali Order, which mandated the regulation of all large, polluting enterprises.
Experts and reformers in industrial towns, particularly around 1890, were the first to
recognise the dangers of pollution and environmental degradation and to organise
grassroots organisations to demand and achieve solutions. Established in London in 1898,
the Coal Smoke Abatement Association is one of the world's longest-running non-
governmental environmental organisations. The Public Health Act of 1875 mandated that all
chimneys and fireplaces be equipped with smoke-burning devices. It also stipulated that
polluting factories would face legal consequences.
United States
The United States economy was built mostly on agriculture and the processing of natural
resources in the late 18th and early 19th centuries, when the United Kingdom and other
parts of Western Europe began to become increasingly industrialised. Transportation of
crop and resource products across the vast, sparsely inhabited area relied heavily on
developing highways, canals, steamboats, and railroads. During the Industrial Revolution,
the cotton gin and a way to make parts that can be swapped out were important American
inventions. The milling machine helped make the system for making interchangeable parts
possible. The US became the most industrialised country in the world by the end of the 19th
century. This was made possible by inventing machine tools and the system of
interchangeable parts. Ref 14
In the mid-1780s, a fully automated flour mill was made using control mechanisms and
conveyors. From the time grain was put into the elevator buckets until flour was put into a
waggon, no one had to work. This is the first modern system for moving materials, a step
towards making things in large quantities.
In the 1790s, when textile factories started to be built, the United States switched to water
power for milling grain. Because of this, most of the industrialization occurred in New
England and the northeastern United States, where rivers move quickly. The newer
production lines that were powered by water were cheaper. At the end of the 19th century,
water-powered manufacturing gave way to steam-powered manufacturing, which spread
the industry to the Midwest. The Cabot Brothers and Thomas Somers established the
Beverly Cotton Manufactory in 1787. It was groundbreaking because it was the first cotton
mill in the United States and the largest cotton mill of its day. The Manufactory served as a
testing ground for novel concepts. Slater's Mill's water-driven milling structure was also
fabricated there.
Samuel Slater opened the Slater Mill in Pawtucket, Rhode Island, in the year 1793. He owned 13
textile mills after starting Slater's Mill. The Industrial Revolution in the United States began along the
Blackstone River and its tributaries, which stretch for more than 45 miles (72 km) from Worcester,
Massachusetts to Providence, Rhode Island. At its peak, this valley had over 1,100 mills, including
Slater's mill. This was the start of the Industrial and Technological Development of the United States.
The United States made a big contribution to industrialization by coming up with ways to make
metal parts that could be swapped out. The U.S. Department of War came up with ways to make
small firearms with parts that could be switched out. When using machine tools for precision
machining, fixtures were used to hold the parts in the right place, jigs were used to guide the cutting
tools, and precision blocks and gauges were used to measure the accuracy. Eli Whitney, who worked
for the government and made guns as part of this programme, is thought to have invented the
milling machine, which is an important machine tool. The Blanchard lathe was another important
thing that he made. The Blanchard lathe, also called a pattern tracing lathe, was actually a shaper
that could make copies of wooden gun stocks. The American system of manufacturing is the way
machines and methods are used to make parts that are the same and can be used with other parts.

Second Industrial Revolution

Steel is often seen as the first of a number of new mass-production industries that started
around 1850 and are said to be part of a "Second Industrial Revolution." However, mass
production of steel didn't start until the 1860s, when Sir Henry Bessemer invented a new
boiler that could turn large amounts of molten pig iron into steel. After the process was
changed to make more uniform quality, it became widely available in the 1870s. Near the
end of the 1800s, the open hearth boiler took over from Bessemer steel.
The chemical industries, petroleum (refining and distribution), and the automobile industry
all expanded throughout the Second Industrial Revolution, which peaked in the 20th
century. The United States and Germany replaced Britain as the technological frontrunners
at this time.
As cheaper petroleum products became more available, coal became less important. This
made the potential for industrialization even bigger.
With electricity and the electrification of industries, a new revolution began. Starting in the
1890s, when hydroelectric power was made in the Alps, northern Italy, which didn't have
much coal, was able to industrialise quickly.
By the 1890s, industrialization in these areas had led to the first big industrial companies
with growing global interests. Companies like U.S. Steel, General Electric, Standard Oil, and
Bayer AG joined railroad and shipping companies on the world's stock markets.
Some historians think that the end of feudalism in Britain after the English Civil War in the
17th century led to changes in society and in the way things were done.
People also point to the scientific revolution of the 17th century and the fact that it led to
the spread of colonies and the growth of international trade, financial markets, and the
accumulation of capital.
China was the most technologically advanced country in the world for a long time. However,
China's economy and technology slowed down, and Western Europe caught up and passed
China. China was another one-party state. China put a lot of taxes on goods that were
moved. India was mostly a feudal society, and its politics and economy were not as
advanced as those in Western Europe.
Historians like David Landes and sociologists like Max Weber and Rodney Stark say that the
different ways of thinking in Asia and Europe determined where the revolution took place.
Most of Europe's religions and ideas came from Judaeo-Christianity and Greek thought.
The Marxist historian Rajani Palme Dutt said this about India: "The money that was
supposed to pay for the Industrial Revolution in India went instead to pay for the Industrial
Revolution in Britain." In contrast to China, India was split up into many competing
kingdoms after the decline of the Mughal Empire, with the major ones in its aftermath
including the Marathas, Sikhs, Bengal Subah, and Kingdom of Mysore. The economy also
depended a lot on two sectors: subsistence agriculture and cotton, and there doesn't seem
to have been much technical innovation. Before the British took over, kings and queens kept
huge amounts of money in palace treasuries.
In 1700, China had a printing press and movable type, and India was as advanced in science
and technology as Europe. However, the Industrial Revolution would take place in Europe,
not in China or India. There was a "integrated market for ideas" in Europe, where the
classical heritage of Europe gave intellectuals a shared intellectual base.
Also, Europe's monarchs needed money so badly that they had to make deals with their
merchant classes. In exchange for money to the state, small groups of merchants were given
monopolies and the responsibility of collecting taxes. In the Americas, Europeans found a
windfall of silver, timber, fish, and maize, leading historian Peter Stearns to conclude that
"Europe's Industrial Revolution stemmed in great part from Europe's ability to draw
disproportionately on world resources."
Around the end of the first millennium, modern capitalism began in the city-states of
Italy. The city-states were wealthy places that were not controlled by feudal lords. Most
of them were republics, and their governments were usually made up of merchants,
makers, guild members, bankers, and financiers. The Italian city-states set up a network
of branch banks in the most important cities in western Europe and started using
double-entry accounting. Italian business was helped by abacus schools, which taught
people how to use numbers to figure out money.
"Our use of energy has changed because of a huge influx of new ideas and technologies.
This has made the country more industrialised and urbanised. People built roads, trains,
and canals. There were big cities. Many factories and mills were built. The way our land
looked would change forever. It was a revolution that not only changed the country but
also the whole world."
– British historian Jeremy Black on the BBC's Why the Industrial Revolution Happened
Here. Ref 14
The Industrial Revolution in Britain was driven by two main ideas: self-interest and the
desire to be a business owner. Because of these interests, a lot of industrial progress was
made, which led to a huge rise in personal wealth and a change in how people bought
things. The British society as a whole also benefited a lot from these changes. Countries all
over the world started to notice the changes and improvements in Britain and used them as
a model to start their own Industrial Revolutions.
The start of the Industrial Revolution has to do with how far ahead of other countries Great
Britain was. Some historians have talked about how important the natural or financial
resources that Britain got from its many overseas colonies were, or how the profits from the
British slave trade between Africa and the Caribbean helped fuel industrial investment.
Britain was the only country in Europe that did not suffer from financial theft and economic
collapse during the Napoleonic Wars. It also had the only merchant fleet of any size
(European merchant fleets were destroyed during the war by the Royal Navy). The fact that
Britain had a lot of small businesses that exported made sure that many early types of
manufactured goods already had markets. The war in Europe didn't hurt England as much as
it did other parts of Europe because England didn't lose any territory. This was because
Britain is an island, so it is not connected to the rest of Europe.
After the Glorious Revolution in 1688, Britain's government was more stable, and compared
to other European countries, British society was more open to change. Both of these things
helped bring about the Industrial Revolution. The Enclosure movement made it harder for
peasants to fight against industrialization, and the landed upper classes' growing business
interests made them the first to remove barriers to the growth of capitalism.
Transfer of knowledge
There were many ways that people learned about innovation. Workers who were trained in
the method could move on to a different job. People often did what was called a "study
tour" to learn as much as they could. All of Europe and the United States did study-touring
during the Industrial Revolution and the century before it. Some countries, like Sweden and
France, even trained civil servants or technicians to do it as a matter of state policy. People
often went on study tours and kept travel diaries. The records that industrialists and
technicians of the time made are a great way to learn about how they did things.
The network of informal philosophical societies, like the Lunar Society of Birmingham, was
another way that new ideas spread. These groups met to talk about "natural philosophy," or
science, and how it could be used in manufacturing. Other groups like this also put out
volumes of their proceedings and business. For instance, the Royal Society of Arts in London
put out an illustrated book of new inventions and papers about them in its annual
Transactions.
There were books that talked about technology. Many useful things can be found in
encyclopaedias like Harris's Lexicon Technicum (1704) and Abraham Rees's Cyclopaedia
(1802–1819). Cyclopaedia has a lot of information about the science and technology of the
first half of the Industrial Revolution, and the engravings are very good at showing what the
information means. Foreign books like the Descriptions des Arts et Métiers and Diderot's
Encyclopédie had beautiful engravings that showed how to do things in other countries.
In the last ten years of the 18th century, periodicals about making things and technology
began to appear. Foreign magazines, like the Annales des Mines, wrote about the trips that
French engineers took to learn about how the British did things.

Cross-cultural peculiarities of doing business

With the growth of global organisations, the cultural side of doing business has become a
focus in many places around the world. Experts in the field of economics and business are
looking into how national cultures affect business and how doing business in different
countries is different. When companies deal with foreign markets through mergers,
acquisitions, and the opening of representative offices and affiliates in other countries, they
stress how important it is to take into account cultural and national differences.

In the late 1990s, "culture as the essence" and "culture as a difference" were the most
important ideas in the business culture field. This led to an analysis of the cross-cultural
difficulties that managers and organisations face, such as differences in values, language,
and thought. The context of the interaction was not taken into account, and all of the
cultural factors were seen as things that happened outside of the organisation and had
nothing to do with it.
Nigel G. Holden, Professor of Comparative and International Management of Business
School and University of Nottingham, did research at the start of the 21st century that said
culture should be seen as an organisational resource and cultural differences should be seen
as a form of organisational knowledge. This means that inter-ethnic cultural problems
should be solved. Ref 15

In this way, managers of today are "sophisticated analysts who manage a complex set of
projects, people, resources, and problems" (Drucker, 1996). Ref 15

Peter Drucker said that the biggest challenge for managers in different countries is to
improve the knowledge and training of the people who work with them. In terms of the
global economy, Drucker talked about how the knowledge factor and working people
working together as a multicultural team and communicating with the outside world
through a global information network were becoming more productive (customers,
shareholders, society, authority). Ref 15

Multicultural teams are an integral aspect of cross-cultural leadership and advertising, which
Nigel Holden proposes we think of as the management of multiple cultures now that
leadership and advertising have gone global. Culture is described as "the domain of general
knowledge as well as a unified set of principles that impact the firm without adequate
awareness of the brilliant, clear, defined limits," and can be thought of as including a group's
shared history and traditions." (Holden, 2005). Ref 15

In the new economy, a group's culture has become a resource. On the world market, the
most important thing is to get the most out of alliances "across borders" and encourage
organisational learning.

This means that culture is one of the things that affects the organisation. When
organisations from many different cultures work together, it shows that the firms depend
on outside experts like tax services, lawyers, bankers, and advertising and marketing firms.
And in a world where the economy is becoming more global, transnational and
multinational companies need new kinds of expertise, such as the knowledge of successful
ways to work and solutions that can be used in local situations.

When the level of international competitiveness rises, "cross-cultural knowledge" will

provide the most value to businesses (Fink and Meyerhof, 2001). Ref 15

The management team saw the value of the company's culture and put it to good use by
turning it into a body of information. An organization's "collection of abilities and
technology that allow the corporation to provide the consumer something distinctive" (i.e.,
"competence") increases via such a shift, making cultural change a possibility (Holden,
2005). Ref 15

Examples of doing business in different countries

The cultural differences between these two nations have been highlighted. Differences in
business practises and ethics between cultures, as well as how such differences are
influenced by the cultures of the respective nations, have been addressed.
1. United States of America

America as a country has, in a very little period of time, established its own commercial
sector. To us, this exemplifies the American character traits of initiative, bravery, and
perseverance. History of the United States includes the taming of the Wild West, the fight
for independence, and the fact that many modern Americans trace their ancestry back to
people who emigrated from other countries in search of economic opportunity. All of this
demonstrates that the American spirit of enterprise and innovation is "in their blood."

The American corporate approach is straightforward and results-oriented. In addition,

American corporations seek for ways to save expenses, investigate the organisational
features of every company, and double-check the outcomes of actions. Basic American
business concepts include conducting in-depth analyses of the company's operations,
dividing up tasks for the purpose of efficiency and effectiveness, and maintaining a healthy
level of organisational control. One of America's defining characteristics is its penchant for
specialisation, which has produced a population rich in talented experts in a wide variety of
niche fields.

Timeliness is highly valued in American culture, and people tend to adhere to them. As a
result, they expect punctuality from their clients and partners while working together.

They feel they are completely well-versed in conducting business and capable of dealing
with any country, any nationality, and so they come off as arrogant and superior when
speaking with foreign partners. They hope that other countries would follow their lead and
adopt their commercial practises.

Uniqueness and freedom of expression are highly valued and protected in the United States.
They also value workers' rights and respect for their work. Americans learn to depend on
themselves from a young age. Therefore they are self-reliant, active, and ambitious; they
have clear aspirations and work tirelessly towards them. The American people have a strong
desire to win and a healthy respect for rivalry. They value success and previous
accomplishments highly, and as a result, they are always trying to outdo one another.
Americans are straightforward people who value honesty and candour, who get to the point
and don't waste time with empty small chat. They have a high moral grounding and cherish
individual liberty and fair treatment.

Americans try to avoid becoming too stuffy and formal in professional settings. Even for
serious business meetings, they like relaxed, comfortable attire. The American audience
laughs heartily at the gags. The folks there are kind and welcoming. Their sense of humour,
although not malicious, may come off as blunt and direct at times. Working with Americans
calls for speed and precision in communication.

2. Japan

Japanese business, marketing, and management ethics and practises diverge significantly
from their Western counterparts.
Values of hard effort, solidarity with group standards, and respect to traditions are
important to the Japanese national identity. The citizens are instilled with a strong sense of
artistic appreciation, discipline, responsibility, civility, and poise from an early age. Japanese
from infancy are brought up in the attitude of “group solidarity” and they learn to control
their emotional urges, and strive to “save face” even in the most difficult circumstances.
That links of mutual reliance and moral obligation lay in the bedrock of interactions between
individuals is fundamental to Japanese morals and beliefs.

The sense of collectivism permeates Japanese society, which is otherwise uniform. For the
Japanese, it is always about the group, and an individual's sense of self is framed in terms of
his or her place within the community.

Japan's management style reflects the country's rich history, unique culture, and complex
social psychology. It has everything to do with the country's economic and social systems. It
is interesting to compare and contrast the Japanese management style with the more
common Western (American) one because of the remarkable disparities between the two.
Additionally, the Japanese have a distinct secular culture being an island with its own
cultural and ethnic identity. Presuppositions of management and marketing techniques, and
particular methodologies for their application in Japanese organisations are notably
different from American methods and procedures.

The people of Japan are quite open-minded. Instead of making their own errors, they would
rather learn from the ones of others. They keep a close eye on global events and often add
their own creative twists to what they learn from overseas. They pick up and adopt new
technical processes and procedures with ease.

Since innovation - is the foundation for economic success and the Japanese are really
devoted to it, Japanese employees have no opposition to the introduction of new goods and
technical advancement. The Japanese take pleasure in this development since it enhances
the prestige of their nation. For the same reason, the work they do is of the highest integrity
and quality. They place a high value on representing their nation proudly.

Business and entrepreneurship in the modern world span international boundaries and
attract participants from a wide range of cultural backgrounds. This means that cultural
variations are becoming more pervasive inside businesses and exerting a greater impact on
the marginal efficiency of day-to-day operations. Differences in language, religion, politics
and law, geography, art, education, technology, and other life values all contribute to the
existence of cross-cultural challenges in international commerce. Innovative and culturally
responsive learning companies are emerging, leading to the development and inclusion of
all their workers as cultures blend and the barriers between individuals and their differences
dissolve. This is allowing individuals from all walks of life to participate in the global dream.

The relevance of a multi-cultural strategy to global expansion in the modern corporate

world cannot be overstated. To increase tangible wealth and monetary terms and to
facilitate the efficient operation of the international teams of managers, a fresh perspective
on linguistic and cultural differences is required. Only by embracing the principles of a
learning organisation and being flexible to new information and ideas will this be achieved.
Having a willingness to learn about and collaborate with people of different backgrounds is
essential.
When firms from various nations fail to properly account for one another's cultural and
historical backgrounds, it may lead to a crisis in commercial relations and a decrease in
corporate activity. On the other side, bridging cultural divides in management calls for not
only trust and candour, but also the concerted creation of shared strategies for growth and
promotion that may boost the efficiency and effectiveness of the company as a whole.

Soviet Type Economy

Soviet-type economic planning (STP) During the cold war era between the Soviet Union and
the West, Marxist-Leninist socialist regimes adopted the STP model of centralised planning.
The Soviet economic system served as inspiration for STP (USSR). When discussing the key
structural features of Soviet-type economies, we often talk about Soviet-type planning or
Soviet-type economies.
Centralized investments, administrative redistribution of economic inputs, material balances
to established a central among input data and targeted outputs, and some degree of linear
optimisation are all hallmarks of the Soviet-type planning that characterises the planned
economy in that country. Because of the de facto dominance of highly centralised
administration over economic planning, the post-perestroika interpretation of the Soviet
Union's system of economic planning labels it a "administrative-command system" (Ref. 16).

Characteristics of STP:
Institutions
A planning agency (Gosplan), a body responsible for allocating state supplies to the different
organisations and companies in the economy (Gossnab), and firms involved in the
production and delivery of products and services were the primary institutions of Soviet-
type planning in the USSR. Gosplan produced the plans that connected the many production
organisations and institutions that made up businesses. Ref 16
The Council for Mutual Economic Assistance (CMEA) was an international institution that
served as the primary means by which the nations of the Eastern Bloc (Bulgaria,
Czechoslovakia, East Germany, Hungary, Poland, Romania, and Albania) carried out their
economic planning. Until the fall of the Soviet Union in 1991, the council fought to keep the
Eastern Bloc on a path of socialist economic planning. Ref 16
As part of its drive towards industrialization, Romania sought to establish a cooperative
economic structure. The Czech and Polish delegates, however, advocated for a system of
specialisation in which members shared production plans and each nation focused on a
particular aspect of production. In reaction to the United States' Marshall Plan, the Soviet
Union advocated for the establishment of the council so that they could continue to exert
influence in Eastern Europe. The underdeveloped countries were expected to eventually
"catch up" to the industrialised nations. Ref 16
Material balances
Gosplan's primary purpose in the USSR was to plan for a material surplus or deficit. In order
to achieve a state of equilibrium between the supply of accessible inputs and the desired
outputs, this approach of planning makes use of an accounting of supplying the required in
natural units (as opposed to monetary terms). In order to create equilibrium between
supply and demand, material balancing requires conducting a survey of available inputs and
raw materials in the economy and then comparing the results to the production objectives
stated by industry using a balance-sheet. The economic strategy of a country is developed
using this equilibrium. Ref 16

Analysis of STP
Beginning in 1918 with War Communism and continuing until the Soviet Union's collapse in
1991, some sort of central planning was in place in the USSR. Imperative centralised
planning was instituted in the 1930s.
There are numerous theoretical models of economic planning, and even today's mixed
economies engage in some kind of economic planning, thus STP is not synonymous with
economic planning in general.
Soviet economics stood out from other models because they were ideologically motivated
attempts to create a comprehensive economic blueprint for the whole population. During
the totalitarian governments of socialist communist nations, the concept that Marxian
economics is better as a paradigm was likewise accepted without debate.
Michael Ellman explains the computational difficulties of Soviet economic planning by
describing its particular economic and mathematical aspects. Soviet economic planning, as
implemented by Gosplan, had as its theoretical goal the efficient allocation of resources that
would provide the intended range of products and services. The plan was developed and
implemented over the course of a year at a time, with each year having its own set of goals
for production and input. Gosplan would plan production for all factories by calculating
balance sheets. In order to simplify the computations as the number of commodities
approached the hundreds of thousands, a number of aggregations were constructed. Up
until the late 1960s, these kinds of computations and summations had to be done by hand.
Ref 16
Actual performance
One study from 1986 examined the Physical Quality of Life Index (PQLI) using data from the
World Bank on things like infant mortality, life expectancy, and literacy rate, as well as
things like the average number of patients seen by each doctor in a given year. Socialism-
style economic planning was shown to result in somewhat better indicators at low and
medium income levels compared to capitalism at the same levels of economic growth.
When comparing nations with medium and high incomes, the disparity shrank.
Beginning in the 1960s, the Soviet economy slowed and grew more reliant on secret loans
from the capitalist nations of the Club de Paris, all while Marxist was being presented as
progressive and superior to market economics. The Eastern Bloc nations took out loans on
top of Russia's $22 billion in debt at the time of the Soviet Union's collapse. Ref 16
Era of Stagnation
The phrase "economy of lack," proposed by János Kornai, accurately describes the predicament of
the Soviet economy. Leszek Koakowski argued that the authoritarian political and economic system
prevalent in the Eastern Bloc was not a "deviation" from Marxism-Leninism but rather an inevitable
outcome of it. According to Nikolay Shmelyov, the Soviet economy in the 1980s was plagued by
widespread systemic inefficiencies and uneven outputs, resulting in chronic shortages of certain
products and surpluses of others that went to waste.
Soviet economists were aware of these problems, but initiatives to shift prevailing paradigms in
economic planning were stymied by ideological zealots. These reform suggestions were seen by the
hardliners as a departure from Marxism–Leninism, the economic model they believed had been
"scientifically demonstrated" to be better.
In light of the inadequacies of War Communism that emerged after the 1917 revolution, Lenin
instituted a brief phase of economic pragmatism in Soviet economics known as the New Economic
Policy (1921–1928). Stalin, however, saw the criticism of NEP and decided to revert to
comprehensive economic planning.
Statistics falsification and "output juggling" by manufacturers to meet central plans were
commonplace, creating gaps between the "reality of the plan" and what customers experienced in
the marketplace. As it became clear that the plan had failed, sabotage and "wrecking" were accused.
Industrial activities and demonstrations were stifled by the military and security forces with extreme
violence because of shortages and bad living conditions (Novocherkassk massacre). Ref 16
Performance in the Eastern Bloc
To cushion the blow of Western sanctions in the 1950s, the Eastern bloc formed an
economic partnership with the state monopoly. Eastern Bloc rural nations started to
industrialise as a result of increased trade both between and within member states. The
Eastern Bloc nations received subsidies from the Soviet Union in the form of raw resources
sold at rates below those on the global market. The disparity in development levels between
the Eastern Bloc's industrialised nations and its more rural countries, despite these efforts,
contributed to the Bloc's economic stagnation in subsequent decades.
From the 1960s forward, the council gradually lost its credibility as economic development
slowed due to differences among member nations regarding the need of different reforms.
The International Bank for Economic Cooperation was formed in Moscow in 1963 and the
'transferable rouble' was adopted to promote economic integration and preserve soviet
economic planning. There were several reasons why the merger never happened. As is
typical of centrally planned economies, the new currency was decoupled from international
commerce and hence unable to serve as a medium of exchange or store of value. Second,
integration failed because of a lack of enthusiasm and because numerous member states
adopted "market liberalisation" policies during the decade.
In the second half of the 1960s, the CMEA shifted its focus and suggested a reform that
encouraged nations to pursue their own specialised industrialisation initiatives without the
required involvement of the other member states. These provisions were accepted by East
Germany, Poland, Hungary, and the Czechoslovakian Republic; however, Bulgaria and
Romania did not, and many political authorities throughout the Eastern Bloc worked to
thwart the implementation of'market liberalisation' policies at the CMEA level. During the
decade, the CMEA's lack of planning coordination was largely attributable to the failure of
member nations to establish an agreement on economic changes and the intention to
generate "dynamics of dissent" inside the Council against the USSR.
The CMEA took several steps to modernise the economy and sustain prosperity in the
1970s. To begin, the Eastern Bloc relied heavily on Western technology to modernise,
substantially increasing its debt to the West in the process. The CMEA's 'complex
programme,' adopted in 1971, was meant to facilitate more commercial cooperation. In
order to be successful, this integration strategy required nations to specialise in the
production of particular commodities and services, and competing efforts were strongly
discouraged. For instance, other member nations were motivated to trade with Hungary so
that they could purchase buses manufactured by Hungary for both local and long-distance
transportation.
But the Eastern bloc's economic problems kept getting worse because reforms didn't make
enough of a difference and specialisation efforts didn't give states enough of a reason to
improve their products. This meant that the economy didn't grow as fast as it did in the
West. In a study that looked at the technical efficiency of Hungary, Poland, and Yugoslavia
from the 1970s to the 1980s and compared it to that of developed and developing
countries, it was found that the three European socialist countries were less efficient than
both developed and developing countries, and this gap had only gotten bigger over the
years of the study. During the time of the study, Yugoslavia was always the most efficient of
these three countries, followed by Hungary and then Poland. By the end of the 1980s, the
Soviet Union's subsidies for raw materials were so small that they were almost meaningless.
This was because Eastern bloc countries had to pay more for industrial goods than what was
available on the global market. The CMEA fell apart because the USSR didn't help and there
wasn't a political agreement on how to change things. Ref 16
Advantages
From a neoclassical point of view (Neoclassical economics is an approach to economics in
which the production, consumption, and pricing of goods and services are driven by the
supply and demand model), there aren't many benefits to STP. Theoretically, STP might help
you prevent inflation, which is a major gain. As the government sets all prices and amounts,
pays all wages, and controls the money supply, full price stability is possible. To maintain a
stable currency value, the government need only ensure that the sum of salaries paid over a
given planning period is equivalent to the worth of all products produced during that period.
It's possible, though, that the Soviet Union never even considered the notion. Since the
aforementioned equation was never resolved, the country suffered from both overt and
covert inflation for long stretches of time.
From a neoclassical point of view, another benefit of economic planning is that it can get rid
of unemployment (except for "frictional unemployment") and business cycles. Since the
government is the only owner of the business and controls the banks, it should not have the
usual problems with money and consumer trust. Full employment is possible in theory
because the government makes people work and can run businesses at a loss. This was an
advantage that the USSR may have realised by 1930. However, critics say that some parts of
Soviet labour sometimes had zero productivity, which means that even though workers
were on the payroll, they sat around doing nothing because they didn't have enough capital.
This is called "employed unemployment."
Researchers who dispute the neoclassical paradigm often examine the Soviet Union's claims
of STP's benefits as evidence. One is that externalities can be directly controlled through the
pricing mechanism. The failure of market economies to fully exploit the benefits of STP is
another issue. This indicates that a worker may put in an amount of time to produce an
item, yet the good may be undervalued in the market, rendering the worker's efforts futile.
and Since prices in STP are set by the state, this trap is avoided by making sure that no item
is ever priced below what it would cost to make it. Even though these seem to be real
theoretical benefits of STP (especially in a Marxist–Leninist framework), some people have
said that the USSR's implementation of STP didn't reach these theoretical goals. Ref 16
Disadvantages
From a neoclassical point of view, STP had a lot of problems. There are two ways to classify
them: macroeconomic and microeconomic.
Systemic undersupply, the high cost of trying to reach full employment, the terrible effect of
price fixing on agricultural incentives, and the loss of the benefits of money because STP
avoids money's traditional role are all macroeconomic problems. In STP, systemic
undersupply was caused by the use of material balances, which are plans for the balanced
production and consumption of goods and productive inputs. These plans are possible in
theory, but planners can't make them in practise because they don't have enough
information to make them accurately. Also, planners had to combine many different kinds
of goods and inputs into a single material balance because they couldn't make a separate
balance for each of the 24 million things that were made and used in the USSR. This system
had a strong bias towards underproduction, so there weren't enough consumer goods to go
around. Theoretically, STP does allow for full employment, but in practise, the USSR often
reached full employment by running businesses at a loss or leaving workers unemployed.
Instead of full employment, the USSR could have always chosen a Pareto-better option, such
as shutting down some businesses and giving money to the unemployed.
Pareto efficiency or Pareto optimality is a situation in which no person or
preference criterion can get better off without making at least one person or
preference criterion worse off or without losing anything. The idea is named after
Vilfredo Pareto, an Italian civil engineer and economist who lived from 1848 to
1923 and used it to study how well economies work and how income is
distributed. There is a close connection between the following three ideas:

 A Pareto improvement is a change to a situation in which some parties benefit

and no parties suffer losses.
 If there is room for a Pareto improvement, we say that the situation is Pareto
dominated.
 If there is no way to increase the happiness of one party without decreasing the
happiness of another, or if there is no room for further improvement in terms of
Pareto efficiency, then the situation is said to be Pareto optimum. Ref 16 B

The following are some of the microeconomic drawbacks when seen via a neoclassical lens:
• The allocation of scarce resources promotes the shadow economy.
The Soviet Union's isolation from global markets led to a decline in product quality.
• Ignoring customer wants since evaluating quality is hard.
• Soviet managers at the enterprise level had a habit of playing down their
organization's potential to produce goods out of apprehension of the ratchet effect.
This occurred from a company making too much product in a particular planning
cycle. The plan would have to be revised to account for the new information, which
meant they would have to maintain their increased output in the next cycle.
 • A prejudice towards new ideas (also from fear of the ratchet effect).
• Storming, also known as rushing to finish the plan at the conclusion of a planning
cycle, which often leads to subpar results.
• Excessive spread (raspylenie sredstv), in which too many projects (particularly
building) would have been begun at once and completed more slowly than
necessary due to a shortage of available inputs on time.

Others have argued, post-Cold War, that a major flaw in Soviet economic planning was that
it was not based on final consumer demand, and that such a system would become
increasingly feasible with technological advances, which could be used to factor in real
consumer needs & matching production. Ref 16

Scientific management. Bureaucratic organisations. Administrative principles. Human

relation movement. Behavioural science approach. Management science perspective.
System theory. Contingency approach. Total quality management. The learning
organisation. The Management Role Manager as a strategic thinker. Manager as a leader.
Manager as a coach. Manager as a controller. Manager as a communicator. Manager as
administrator. Counterparts of managers: shareholders, personnel, trade-unions, local
and central government, non-profit organisations, politicians etc. Manager’s skills.

Scientific Management – Meaning and Scope

Scientific management is the skill of knowing exactly what needs to be done and how to do
it in the best way. Science is used to figure out how to do the work, how to choose and train
the people who do the work, and how fast the work can be done most effectively.
It is therefore a process of transferring skills from management to workers. It is also based
on the idea that workers don't know enough about how to do their jobs best and most
efficiently, or they waste time, which hurts productivity and profit.
Taylorism is another name for scientific management. Frederic Winslow Taylor was the first
person to use the scientific method in a workshop. He was the Chief Engineer at a steel mill,
and he saw workers wasting time and energy. As the basis for pay, time-rate did not
encourage hard work and caused money to be wasted.

Taylor realised that the industries were only operating at roughly 50% efficiency compared
to what was attainable with scientific management. He believed and showed that any
manager could do scientific research to determine the most efficient way to do a job, and
then teach that approach to employees.
It was also found that almost everyone in the workforce was a mismatch for the occupations
they were doing. As Taylor assigned people to tasks more suited to them, productivity rose.
Another stage of scientific management was the modification of resources and
environmental factors.
In addition, Gilbreth has made significant advancements in the field of scientific
management. His profession was that of a builder. He saw that the conventional approach
of laying bricks was inefficient since it required the bricklayer to examine and turn each brick
individually, as well as to make many motions to pick up the bricks, place sufficient mortar
on the wall, etc. Gilbreth organised to increase brick-laying productivity from 120 to 350 per
hour by decreasing the number of brick-laying motions from 18 to 5.
The two chief points in connection with Scientific Management made by Taylor have
been:

1. Mental Revolution:
According to Taylor, "scientific management needs a full conceptual revolution on the part
of employees and management and without this revolution on the part of both sides,
scientific management does not exist."
To achieve maximum productivity, it is essential that both parties set aside their differences
and work together. The focus of both parties should be on expanding the surplus or profit.
It's important for employees to understand that doing quality work reduces expenses and
boosts revenues, which in turn increases their take-home pay. Even with greater salaries, a
rise in production and decrease in costs will result in improved profits for the companies.
Hence, employees should encourage and collaborate with employers' attempts to enhance
production, and management should raise salaries without hesitation. Each party should
keep the other's success in mind and refrain from taking steps that might harm the other's
success.
2. Scientific Investigation:
If leaders are serious about implementing scientific management, they must base their
decisions on empirical evidence. All work-related aspects must be analysed scientifically,
and subsequent actions must be taken in accordance with the findings. Managerial
discretion and the old rule-of-thumb approach must be abandoned.

No one should make a decision before gathering all the data they need and doing any
necessary trials to validate their course of action.

Scientific Management – 8 Salient Features: Scientific Task-

Setting, Planning, Working Study, Standardisation, The Mental
Revolution and a Few Others
Once you know what you want men to accomplish, you can figure out how they can do it
most efficiently and economically, as described by Taylor's definition of "scientific
management." Ref 17

The important Features of scientific management are as follows:

Feature # 1. Scientific Task-Setting:
Under scientific management, each employee has a clearly defined role to play. The
standard job represents the quality of work that a typical worker can do in a day when given
optimal, standardised working circumstances. A common term for this is "a fair day's
labour." Standardization and forethought are essential tenets of scientific management.
Feature # 2. Planning:
Taylor argues that "the core of scientific management" is careful planning. What work has to
be done, how it will be done, where it will be done, and when it will be done were all factors
in this planning. Taylor suggested establishing a specialised planning division. The deadline
for the job to be finished, as well as specific directions for the kind, shape, and quality of
goods to be created, are given to this division.
Feature # 3. Working Study:
Analyzing the factors that affect the effectiveness of a given activity's functioning in a
methodical, objective, and critical manner is what this term refers to. Taylor emphasised the
need of time study, fatigue study, and scientific rate setting in his work on the study of
labour.
(a) Methods Study:
Management is tasked with looking at the complete manufacturing procedure as part of this
investigation. So, it is imperative that management takes steps to shorten this productive
cycle.
A "process chart" detailing the steps involved may be drawn out. Management may use the
results of such an analysis to better design the plant's layout and purchase state-of-the-art
equipment.
(b) Motion Study:
It involves analysing the steps taken by a person or machine to complete a task with the
goal of reducing or eliminating unnecessary actions. While conducting a motion study,
researchers observe employees as they go about their normal workday. Afterwards, they
are analysed to find and remove any unnecessary actions. As a result, a more streamlined
and effective method of functioning is created.
(c) Time Study:
An analysis of time is used to establish a benchmark for the procedure. Kimball: "Time study
is described as the skill of watching and documenting the time to accomplish each particular
piece of an industrial activity." Ref 17
When combined with motion analysis, time studies provide insights on how to get the job
done most efficiently, what constitutes a "typical" workday's worth of effort, and how to
rank tasks according to importance.
Feature # 4. Scientific Selection and Training of Workers:
Taylor emphasised systematising the selection process in relation to the character of the
job. After hiring people, managers give them assignments. Each task in the manufacturing
must be assigned to the most qualified worker. Workers need to be well trained in the
proper procedures of work. Before assigning a worker to a certain job in the factory,
management should provide them with appropriate training.
Feature # 5. Standardisation:
Taylor advocated for the standardisation of not just tools, but also machinery and safety
precautions in the workplace. To maximise output, he insisted on everyone using and
storing standard tools and equipment. He suggested that the company establish a single
optimal speed for each equipment and a single best method for doing each task.
He insisted on keeping the ventilation, heating, cooling, humidity, space, and safety up to
par so that manufacturing could be standardised. Good material handling practises and the
utilisation of high-quality raw materials were emphasised.
Feature # 6. Differential Piece-Rate System of Wages:
Taylor said that the best motivation is money since people are motivated by financial gain.
He proposed a system of variable piece rates to reward workers for their speed and
efficiency. Two piece rates, one for normal output and one for less than normal production,
would be established using this technique. It was expected that as earnings increased,
workers would strive to become more productive.
Feature # 7. Functional Organisation and Functional Foremanship:
Functional Foremanship was proposed by Taylor. The proposal calls for a split in the plant's
management between the 'planning' and 'doing' roles. There will be eight total foremen,
with four handling planning and the other four handling shop supervision.
Feature # 8. The Mental Revolution:
Taylor said that in order for the scientific management system's prescribed procedures to be
effective, there must first be a total mental revolution on the side of both management and
employees with regards to their view and attitude towards work and towards one another.
Both parties should have complete faith in the ethics of scientific enquiry and information
gained via experiments. Ref 17
The philosophy of scientific management is based upon the following principles:
Principle # 1. Scientific Study and Analysis of Job:
The primary tenet of scientific management is that the previous trial-and-error technique or
rule of thumb approach must be replaced with scientific research and analysis of each
component of a work.
Principle # 2. Scientific Selection, Training and Development of Workers:
Taylor advocated for selecting and training employees in line with the needs of the
occupations they would be doing. Job needs, including cognitive abilities, physical abilities,
and others, were another point of focus he made. Hence, it's important that staff be
selected and trained with the task at hand in mind.
Principle # 3. Cooperation between Workers and Management:
The interests of both the company and its workforce need to be taken into account in order
to establish a productive working partnership. Here, the emphasis is on collaboration, not
competition, between management and employees; this, in part, may be accomplished by
providing workers with sufficient financial remuneration.
Principle # 4. Equal Distribution of Work and Responsibility:
Workers and supervisors alike should share equally in the burdens of running the business.
The responsibility for planning, organising, establishing rules and regulations, establishing
working procedures, establishing policies, etc., falls on management. The responsibility for
carrying out the tasks and responsibilities should be given to the staff members. As a result,
both organisations' productivity is boosted.
Principle # 5. Maximum Prosperity for Both Employer and Employees:
According to this theory, everyone involved, including workers and management, should
benefit equally. There has to be a middle ground where both the company and its workers
can thrive. If the company is expanding, then so too should its staff.
Principle # 6. Mental Revolution:
This necessitates that management and employees work together more constructively and
effectively to grow the surplus created by the firm rather of competing for it. Ref 17

Scientific Management – Techniques

1. Time studies to establish reasonable work hours 1.
2. Micro- and macro-level motion analysis to find and remove motion inefficiencies.
 3. Three-Functional Foremanship, which utilises eight experts (four in the factory office
and four in the shop).
4. Worker productivity is rewarded with two separate pay scales under the Differential
Piece Rate Scheme.
5. Tools, equipment, and working conditions should be standardised (5).
6. Cards with instructions, slide rules, charts, graphs, pricing structures, etc.
7. Research on how things move and change through time has been called the
"Cornerstone of Scientific Management." Ref 17

Contributors to the field:

Frank B. Gilbreth came up with the motion study method. He said, "Motion study is the
science of getting rid of waste caused by using unnecessary, poorly directed, or inefficient
motions." The goal of motion study is to find and keep using the least wasteful ways to
travel.
Today, employers need to change their way of thinking because they can't hire and fire
workers at will. The trade unions of today are strong enough to protect and defend the
workers' interests.
Henry L. Gantt said, " The chemical industries, petroleum (including refining and shipping),
and the automobile industry all expanded throughout the Second Industrial Revolution,
which peaked in the 20th century. The United States & Germany replaced Britain as the
technological frontrunners at this time”.
Henry L. Gantt, H. Emerson, and Frank and Gilbreth all made contributions to the Scientific
Management movement. Engineers and scientists worked on the School of Scientific
Management a lot. Ref 17

Criticisms:
It has been called "a cold philosophy of management" by critics. Taylor didn't see people as
living things. Instead, he thought of them as inefficient and unpredictable machines.
The study of Scientific Management turned into the study of shop management.
Taylor has become less practical and more dogmatic because he believes that planning and
doing things should be completely separate, which is neither possible nor desirable.
Last, one of the most serious criticisms is that Taylor's system of different piece rates of pay
for workers, which he pushed for, led to the management and the educated class taking
over the industry and the fruits not being shared fairly, instead of making the workers more
productive and giving them the same amount of work.
Unions say that Scientific Management means more work for workers, jobs that don't
challenge them, and technology-based unemployment.
1. Employers’ Objections:
Most employers don't want it to be put in place because it would cost too much. Initial
standardisation costs a lot of money because it involves reorganising things and making time
and motion studies. In factories where jobs change often and are small, the cost may be too
high.
2. Workers’ Objections:
i. The main argument against scientific management is that it takes away workers' initiative,
kills their craft skills and gut instincts, makes work boring, gives one person all the
knowledge, and turns workers into robots.
ii. The counterargument by leadership candidates is that it is anti democratic, as it involves
autocratic authority by “functional bosses” & lessens the attention and responsibility of the
worker.
iii. It is seen as unfair because most of the extra money made because of it goes to capital,
even if wages are raised.
iv. Another argument against it is that it puts people out of work because of the use of
labor-saving devices, both in machines and in the way work is set up.
Scientific management makes it harder for labour leaders to control these workers. The
workers who are happy don't need any help from their leaders.
3. Psychologists’ View:
"The main goal of scientific management has been to use psychology to get the most work
done with the least amount of effort from people." It's true that efficiency methods have
made workers less tired physically, which is a good thing, but they are often used in ways
that put more stress on their nervous systems. Also, the "psychological" tests are too strict
and don't take into account how different people are, which leads to wrong results.
The ideas behind scientific management have little to do with psychology. From what has
been said so far, it is clear that scientific management is not psychological because it doesn't
take into account men's feelings, needs, satisfactions, and frustrations at work.
Professor Sargant Florence says that it doesn't change the fact that industry is mostly run by
autocrats, and it doesn't bring scientific research to "labour problems" in industry.
In the end, it could be said that there are problems with the ways that scientific
management has been done. Many of these objections have been taken care of in recent
years, thanks to a smarter use of Taylorism, which now includes a human relations
approach.
When the human factor is used in organisation, scientific management will become more
scientific. In a plant that is really "scientifically managed," productivity and happiness go
hand in hand. Ref 17
Scientific Management –15 Important Advantages
Scientific management has many benefits for both managers and workers, as well as for the
economy as a whole.
Some of its important advantages are as follows:
1. How to use and put scientific methods to use
2. Appointment of Specialists: It includes the appointment of management experts.
3. Plan and take charge
4. Proper Guidance: It tells everyone involved in the production process what to do and how
to do it. This keeps things from taking too long and getting confusing.
5. Stress on costing: It helps figure out how much things cost to make, how to keep costs
under control, how much to charge for things, and how to make things more profitable.
6. More output and profit: It makes it possible to make more and better goods with fewer
resources.
7. It encourages research by putting the right amount of weight on experimentation,
investigation, and scientific study and analysis.
8. Makes it possible for employers and workers to work together.

9. More work gets done: More work gets done when work is planned well and done in a
scientific way.

10. Lowering the cost of production: If you plan well, you can avoid all kinds of wastes and
losses. Planned production makes it easier to stick to the production schedule and cuts
down on production costs.

11. Management Based on Scientific Principles: The Management is based on scientific

principles.

12. Lessening the amount of physical work the workers have to do. Through scientific
management, breaks and free time help the workers feel less tired.

13. Better working conditions: Scientific management gives workers better working
conditions, such as proper hours, ventilation, lighting, cleanliness, and so on.

Higher Pay for Workers: When different wage incentive plans are put in place, workers who
do their jobs well get paid more than other workers.

15. Benefits for the community: Scientific management makes sure that there is peace in
the workplace, more work gets done, the most people are happy, the national income goes
up, the standard of living goes up, and so on.

In a bad way, scientific management makes it harder for workers to work together. Ref 17

Bureaucratic Organisation
Max Weber and Bureaucratic Theory
Weber was born in Germany in 1864. He grew up during a time when the government,
business, and society were all changing because of industrialization. Weber was interested
in industrial capitalism, which is an economic system in which businesses are owned and run
for profit by private people. Weber tried to figure out why industrial capitalism worked in
some places and not in others. He thought that big businesses like factories and government
departments were a sign of a capitalist economy.

Weber went to the U.S. in 1904 to learn more about the economy there. He said that
competition and new ideas were encouraged by capitalism in the United States. He realised
that businesses were run by people who were trained to do so and that they were
connected by economic ties. This was different from how capitalism worked in Germany,
where a few powerful people ran the economy. In Germany, people were given positions of
power based on their social standing and connections, and businesses were linked through
family and social ties.

Weber saw that in German organisations, social status was more important than experience
and skill when it came to deciding who had power. So, managers didn't care about the
company

The resources of the organisation were used to help the owners and managers, not to help
the organisation reach its goals. After seeing how American organisations worked, Weber
was sure that they would work better if they were based on rational authority and gave
power to the most qualified people. Weber called this kind of well-thought-out group of
people a bureaucracy.

Weber identified six characteristics or rules of a bureaucracy and these are:

Characteristic of the Bureaucracy Description

Hierarchical Management Structure The level above it controls the level below it,
and the level below it controls the level above
it. For each position, authority and
responsibilities are made clear.
Division of Labor The tasks are clear, and employees get good at
doing one thing by focusing on it. There are
clear rules about who has power and what they
need to do.
Formal Selection Process Employees are chosen and moved up based on
their experience, skills, and technical
qualifications, which can be shown through
tests, education, or training. There isn't any
favouritism.
Career Orientation Management is not the same as owning a
business, and managers are full-time
employees. Employees are protected from
being fired for no reason.
 Formal Rules and Regulations Management is not the same as owning a
business, and managers are full-time
employees. Employees are protected from
being fired for no reason.
Impersonality Everyone has to follow the same rules. There is
no favouritism or special treatment for anyone.

Weber didn't realise that each of the bureaucratic traits could also have a bad outcome. For
example, dividing up jobs can lead to highly skilled, specialised workers, but it can also lead
to tedium and boredom. Formal rules and regulations lead to uniformity and predictability,
as well as too many procedures and "red tape." Most large organisations today use some
kind of bureaucracy as their main way of running things. The "pyramid" organisational
structure is based on the ideas of bureaucracy. Divisions, departments, and teams are given
different tasks. It's used by almost every big company. The U.S. labour laws are based on
Max Weber's idea that people should be hired and promoted based on their skills, not their
social status.

The word "bureaucracy" is now associated with big businesses and governments. For
example, the word "bureaucracy" has come to mean something bad about the Indian
government. It is linked to too much paperwork, apathy, not being responsive, and not
being able to change. Weber's ideas have changed the way organisations are run and
structured all over the industrial world.

Henri Fayol and Administrative Management

In 1841, Henri Fayol entered the world in Turkey. He saw many of the same European
organisational changes that piqued Weber's attention. Fayol was a mining engineer turned
mining conglomerate CEO. He wanted managers to have broader responsibilities than
merely boosting output. This realisation came to him when a mine had to close because a
horse had broken its leg and no one there had the funds to replace it. Management's
inability to foresee and prepare for this, as Fayol sees it, is squarely at fault. As a result, he
began to try out other organisational models.

His book, General and Industrial Management, was out in 1916. Several of Weber's concepts
were included into Fayol's theories. He was forward to hearing about the company's
management style and employees' successes. His research suggested a correlation between
happy and motivated workers and successful businesses and management.

Below are the five primary responsibilities that Fayol had as a manager:
 Foresight: Create a plan of action for the future.
 Organization: Provide resources to implement the plan.
 Command: Select and lead the best workers through clear instructions and
orders.
 Coordinate: Make sure the diverse efforts fit together through clear
communication.
  Control: Verify whether things are going according to plan and make
corrections where needed.

These responsibilities grew into what we now know as the four functions of management:
planning (vision), organising (structure), leading (authority), and regulating (control).

In addition, Fayol suggested a set of fourteen rules to govern executive actions. He felt that
management theory should be malleable and adjustable. He predicted that further
development of these ideas would result through practise and experimentation.

Fayol’s principles are still included in management theory and practice, including the
following:

1. Scalar chain: From the CEO all the way down to the receptionist, there is a clear line
of authority.
2. Unity of command: Employees receive orders from only one superior.
3. Unity of direction: Activities that are similar should be the responsibility of one
person.
4. Division of work: Workers specialize in a few tasks to become more proficient.

14 Management Principles by Henri Fayol

1. Division of Work The term "division of work" refers to the practise of allocating an
organization's total workload to a number of employees across several divisions. When tasks are
broken down into more manageable chunks, workers are better able to specialise in their areas of
expertise, which in turn boosts production and profits.

2. Balancing Authority and Responsibility- Responsibility need to be proportional to

Authority. Authority (Power) and Responsibility (Duty) need to be well-balanced (Duties). A
management is more likely to abuse their position if they have more power than
responsibilities. He could become irritated if duty outweighs power.

3. Discipline Public display of appreciation in accordance with prearranged policies or

customs. Discipline entails adhering to the established norms and policies of a group.
Discipline may come from inside, or it can be imposed from outside. Discipline can only be
maintained with reliable oversight and fair treatment of all parties.

4. Unity of Command An employee is only allowed to report to and take instructions from
one supervisor at a time, in accordance with this concept (boss or manager).

5. Unity of Direction A unified direction and strategy for a set of interrelated tasks. A single
manager is responsible for overseeing and planning all of the tasks that contribute to the
same goal. This is referred to as "Oneness of Purpose." For instance, just one manager
should oversee marketing-related tasks including advertising, sales promotion, price
strategy, etc.
6. Subordination of Individual Interests to the General Interest No one set of priorities
should take precedence over the greater good. The survival of the group depends on
prioritising the public interest.

7. Remuneration Payment in exchange for rendered services is known as remuneration. The

salary should satisfy both the worker and the company. Employee productivity and
satisfaction may be maximised with a well-designed compensation plan. Incentives may be
both monetary and non-monetary.

8. Centralization The presence of this problem is proportional to the company's size and the
competence of its management. When power is centralised, it is held by a select few. Under
decentralisation, power is shared across many managerial tiers. There is no such thing as a
totally centralised or decentralised organisation. Subordinates will be unable to do their jobs
when given no discretion or power due to excessive centralization (duties). In a fully
decentralised system, the superior no longer has any sway over the operations of the
business. Hence, a middle ground between centralization and decentralisation is required.

9. Scalar Chain The official line of authority, communication, and accountability within an
organisation is referred to as the chain of command. An organisational chart is a visual
representation of the superior-subordinate connections inside an organisation. According to
the scalar chain, orders are delegated downwards while responsibility is assigned above.

10. Order Everything and everyone in the company has to be in their proper place. Material
order refers to the order of physical objects, whereas social order refers to the order of
human interactions. "A place for everything and everything in its place" is an expression of
Material Order. The "right man in the right position" is a metaphor for social order. The
correct amount of people and things need to be in the right places at the right times. Misuse
and chaos result from a lack of proper storage.

11. Equity Justice and compassion come together in equity. Employees are inspired to
become more invested in the company as a result. Managers, according to the equity
principle, are obligated to treat their employees fairly and with kindness.

12. Stability of Tenure of Personnel Workers should be given a reasonable amount of time
to adjust to their new roles. It takes a worker some time to get the hang of his position and
start producing results. Employees need consistency in their employment situations to avoid
becoming disengaged. Companies that are doing well tend to have a consistent workforce.

13. Initiative Managers should actively foster a culture of initiative within the organisation.
Workers should be encouraged to think independently, formulate strategies, and carry them
out. Hence, subordinates formulate a strategy and do everything is necessary to implement
it. That is to say, subordinates are ready to shoulder their share of the load.

14. Esprit De Corps The French expression "spirit of the team" is esprit de corps.
Consequently, instead of using a divide-and-conquer strategy, management should foster a
culture of teamwork, cooperation, and camaraderie. When employees get along well with
one another, the company benefits greatly. Ref 19
Every aspect of management should adhere to these criteria. To achieve success and
generate a surplus, the management must adhere to these guidelines. Managers may use
Henri Fayol's 14 management principles as a framework for carrying out their duties
ethically and effectively.

Human relations movement

The term "Human Relations Movement" is used to describe the work of academics in
subjects like industrial and organisational psychology who study group dynamics in the
workplace. Its origins may be traced back to the Hawthorne studies of the 1930s, which
looked at how factors like social ties, motivation, and employee happiness impacted
manufacturing output. Workers' psychological well-being and cultural compatibility were
central to the movement.
Mayo's work
The following was emphasised by Elton Mayo:
1. The efficacy of socially-oriented groupings as opposed to purely utilitarian
ones.
2. The need for two-way communication between employees and superiors
(and vice versa).
3. Cultivating strong leadership to convey objectives and facilitate
consistent, well-informed decision making.
Several businesses now place a premium on helping their staff develop stronger social skills.
Training in these areas is sometimes referred to as "soft skills." Businesses require workers
who are good at communicating and conveying information, who can read and understand
the emotions of others, who are empathetic and receptive to the sentiments of others, and
who can resolve problems and find common ground. Employees, managers, and customers
may all benefit from a more trusting and productive environment on the job thanks to
improved communication and relationship-building abilities.
Mayo’s involvement in Human Relations
The fundamental critique of Taylorism and scientific management may be found in Mayo's
writings. Workers are no longer treated like robots programmed to meet immoral and
unattainable productivity demands because to Elton Mayo's work and the subsequent
discovery of the "social person." Human relations activists advanced their ideas alongside
scientific management's proponents. Its purpose was to gain the cooperation of employees
by responding to their concerns about their personal well-being.

Human relations theory advocates for treating employees as unique people with specific
requirements. Employees feel more connected to the company and its mission, which
boosts their sense of belonging and loyalty, as well as their willingness to work together to
achieve organisational objectives. Ref 20

Behavioral Management Theory

Questions about people's relationships and motives inside companies arose as the 20th
century progressed in the field of management science. As traditional management theory
failed to account for factors like employee motivation and behaviour, its concepts were
ineffective in a wide range of real-world management contexts. Hence, the behavioural
school developed as a direct outcome of this ground-breaking management experiment.

Theorists from the field of behavioural economics believed that raising workers' awareness
of their own motivation, conflict, expectations, and group dynamics would lead to greater
output in the workplace. They didn't treat workers as machines but rather as people,
resources, and assets. This idea is the result of the combined efforts of many people and
experiments.

Contributions from Elton Mayo were included in the Hawthorne investigations, which were
designed to test out traditional management theory in a systematic way. The results of
these experiments exposed the limitations of the traditional explanations. Between 1924
and 1932, the Western Electric Corporation in Chicago's Hawthorne Works performed two
tests known as the "Hawthorne experiments." A team of engineers set out to investigate the
impact of lighting on productivity in the first research of its kind. They found, surprisingly,
that reducing the amount of light in the workplace really enhanced productivity. This
continued until workers could no longer see their tasks, at which time they inevitably
became less effective. Ref 21

A second round of tests started a few years later. Mayo and F. J. Roethlisberger of Harvard
University oversaw a group of five women working in a bank wire room. The ladies were
given preferential treatment, including the freedom to leave their desks during breaks, free
meals, and varying schedules and salaries. Productivity levels improved dramatically as a
consequence of this trial.

Mayo and Roethlisberger found from their investigation that the productivity boost
occurred when the experimenters assumed the role of principal supervisors. And since the
employees were so pleased that their bosses cared about their well-being, they were
inspired to work harder and put in more effort. The researchers actively participated in the
experiments and thereby affected the results. The phrase "Hawthorne effect," which
highlights how the extra care researchers take with a study's volunteers affects the results,
was coined to characterise this phenomenon.

Human interactions and meeting the social requirements of employees were found to be
very important takeaways from the Hawthorne investigations. This theory of human
motivation was crucial in bringing about a sea change in management philosophy and
practise. Ref 21

The psychologist Abraham Maslow is responsible for one of the most well-known need
theories:
 a theory of motivation based on an analysis of basic human drives. There were three
fundamental tenets to his idea of human needs:
 It is impossible to fulfil every human desire.
 Needs may be ranked in a hierarchy of significance, from the most basic to the most
complex, and human behaviour is goal-directed and driven by the desire to meet
these needs.
Maslow's need hierarchy is comprised of five distinct levels:
 Physiological needs. Maslow classified all physiological requirements for survival,
including sustenance. When a need is met, however, it ceases to serve as a driving
force.
 Safety needs. Basic safety, stability, protection, and an absence of fear fall under this
category. When an individual's requirements are met in this broad sense, they are
said to be functioning normally. Otherwise, they take on the role as driving forces.
 Belonging and love needs. After one's physiological and security requirements have
been met, the need for acceptance and affection takes centre stage. The person is
on the lookout for deep, meaningful connections with people.
 Esteem needs. One must learn to believe in oneself if he or she is to attain success in
the pursuit of fame, fortune, and notoriety.
 Self‐actualization needs. When an individual's physiological, safety, and social
requirements are met, they may then have a desire to discover who they are.

Maslow's idea of the hierarchy of needs provided a framework for managers to comprehend
the many factors that inspire their staff members. So, the manager or management had to
positively address the needs and incentives of workers if they wanted successful
performance.

Both the Hawthorne experiments and Maslow had significant impacts on Douglas
McGregor. He saw two types of managers in the world. The Theory X manager is one that
generally has a pessimistic outlook on staff members, supposing that they are unmotivated,
unreliable, and unable to take initiative. Managers that subscribe to Theory Y hold the view
that their staff members are highly motivated, as well as reliable and capable of taking on
further responsibilities. They are dedicated to doing a good job and are motivated to do so
in order to get praise and acknowledgement from management.
McGregor believed that managers who adopt either set of assumptions might put in motion
a series of events in which their subordinates' actions prove to be in line with those beliefs.
This may reflect the manager's ability to motivate their staff.

Together, these thinkers made the discovery that people were motivated by intrinsic rather
than extrinsic incentives, moving attention to the part played by individuals in a company's
success. Ref 21

Management Science
Management science: Linking management, economics, business, engineering,
management consulting, and other disciplines, management science (MS) examines how
people make decisions and solve problems in human-run companies. Optimal or near-
optimal solutions to complex decision problems are found via the use of a wide range of
scientifically-grounded concepts, strategies, and analytical approaches, such as
mathematical modelling, statistics, and numerical algorithms. Using a variety of empirically-
based approaches, the discipline of management science propels enterprises forward.
The discipline developed from the branch of applied mathematics concerned with linear
modelling of optimisation problems, i.e., finding the optimal values (maximum in terms of
profit, assembly line performance, crop yield, bandwidth, etc., or minimum in terms of loss,
risk, costs, etc.) of some objective function. These days, management science encompasses
any organisational task for which a mathematically organised issue may be used to provide
insights useful to managers. This information is then calculated and analysed from a
management perspective.
One focus of management science is the creation and use of models and ideas that aid in
the comprehension of management challenges and the resolution of managerial difficulties.
Mathematical, graphical, and conversational representations are all viable alternatives for
communicating these models. New and improved models of organisational excellence might
also be a focus.

There are three distinct facets to study in the field of management science:

 Probability theory, optimisation theory, and dynamical systems theory provide the
basis.
 Management science study on the modelling level includes activities such as model
construction, mathematical analysis, data collection and analysis, computer
implementation, problem resolution, and experimentation. At this stage, statistics
and econometrics play a dominant role.
 The application level, like other branches of engineering and economics, aspires to
have a real-world influence and effect change.
An essential part of a management scientist's job is to apply rigorous scientific methods to
the art of decision-making. Business, the military, medicine, government, nonprofits,
political parties, and communities all benefit from management science's methods.
The Allied forces during World War II recruited scientists from a wide range of fields to aid in
military operations, and this is where operations research got its start. Scientists in these
early applications employed simple mathematical models to make the most of the available
hardware and software. The study of how these theories may be implemented in business
settings emerged as management science in the decades after World War II.

Management science is widely used in sectors as diverse as the airline, industrial, service,
military, and government sectors. Among the many areas that have benefited from the
study of management science are:
 Airline scheduling (both aircraft and personnel)
 The information needs of health services and appropriate systems to supply them
 The future development paths for parts of the telecommunications industry
 The identification and understanding of the strategies adopted by companies for
their information systems
 The decision of the appropriate place to site new facilities such as a warehouse or
factory

Methods for strategic planning, strategic decision support, and issue structuring are all
examples of the "soft-operational analysis" that management science focuses on (PSM).
Non-numerical modelling techniques such as morphological analysis and other influence
diagrams have been developed since the late 20th century. Ref 22

Systems theory 
The study of systems, which may be either natural or artificial, with a coherent grouping of
connected, interdependent pieces, is known as systems theory. Physical and temporal
constraints, environmental factors, the system's design and function are all essential
components. The presence of synergy or emergent behaviour in a system suggests that it
may be more than the sum of its parts.
Modifying one component of a system may have unintended consequences for the rest of
the system. Perhaps, these shifts in behaviour may be anticipated. The degree of
development and adaptability of a learning system is proportional to the degree to which
that system is embedded in and responsive to its surroundings. Adaptation is the process
through which a living thing modifies itself to fit its surroundings better. Some systems serve
as a backup for others in case of an emergency. Systems theory seeks to achieve optimal
equifinality by modelling the dynamics, constraints, and conditions of a system and deriving
principles (such as purpose, measure, techniques, and tools) that can be applied to other
systems at every level of nesting and in a variety of domains. (Equifinality is the idea that in
open systems, every desired destination may be reached by a variety of paths. It's also a
metaphor for the numerous paths to success.)
The goal of general systems theory is to provide generalizable notions and principles, as
opposed to domain-specific ones. It differentiates between active and passive systems,
emphasising the former. When two or more entities interact in terms of their behaviours
and processes, they are said to form an active system. Structures and parts of a system that
are undergoing processing are called passive. A programme is considered passive when it is
stored on a disc and active when it is executed from memory. This discipline is similar to
systems analysis, computer science, and engineering. Ref 23
Systems thinking
To solve problems in intricate systems necessitates the use of systems thinking. It has been
operationally categorised as both a competency and a cognition. A system is a closed, self-
contained, and self-regulating group of components that functions as a whole and is more
than the sum of its parts (subsystem). When one variable is altered, the system as a whole
responds in unexpected ways. The people who make up a system are also, in a sense, its
components, since they help determine the result.
Practitioners of systems theory can be found in a wide range of fields, including biology with
Ludwig von Bertalanffy, linguistics with Béla H. Bánáthy, and sociology with Talcott Parsons,
ecology with Howard T. Odum and Eugene Odum, organisational theory with Fritjof Capra
and Peter Senge, management with Richard A. Swanson, and e-learning with the writings of
Richard A. Swanson.
Systems theory is an endeavour that bridges disciplinary boundaries and incorporates
multiple points of view, drawing on disciplines as diverse as ontology, philosophy of science,
physics, computer science, biology, engineering, geography, sociology, politics, psychology
(particularly family systems therapy), and economics.
Systems theory encourages communication not just across disciplines but also within
systems research.
The new systems perspective of organised complexity, as explained by László, is "one step
beyond the Newtonian concept of organised simplicity," which separated the parts from the
whole or comprehended the whole independently of the parts. Complexity and dependency
may be traced back to the interplay between organisations and their surroundings. Most of
the time, the whole contains unique qualities that can't be gleaned simply looking at the
parts in isolation.
Bánáthy defines a viewpoint that explains and rephrases this concept for the Primer Group
at the International Society for the System Sciences.
The systems perspective is a way of looking at the world informed by the study of complex
adaptive systems. The word "system" is the focus of systems research. In its broadest
meaning, a system is any arrangement of constituent elements that are linked and
interdependent in some way. According to the Primer Group, a system is a group of
interconnected entities that functions as a single entity. A system, according to von
Bertalanffy, is "components in standing connection."
The core tenet of the systems ecology perspective is that an ecosystem is a complex system
whose traits emerge through time. Interactions and transactions within and between
biological and ecological systems are the primary focus of systems ecology, which is also
concerned with the ways in which human interventions may alter the natural functioning of
ecosystems. It uses and extends concepts from thermodynamics and develops other
macroscopic descriptions of complex systems. Ref 23
In engineering
Systems engineering employs a multidisciplinary strategy to facilitate the development and
implementation of functional systems. It may be thought of as using a systems approach to
engineering or as applying engineering methods to the development of systems. Systems
engineering incorporates various disciplines and speciality groups into a team effort,
providing a structured development process that moves from idea through manufacturing
to operation and disposal. The objective of systems engineering is to provide a high-quality
solution that satisfies the requirements of all clients, both commercial and technical. Ref 23
Psychology
Human behaviour and experience within complex systems is the focus of systems
psychology.
It was influenced by systems theory and the systemic approach to problem solving. Roger
Barker, Gregory Bateson, Humberto Maturana, and others laid the theoretical groundwork
for this area of study. It's a method in psychology in which communities and people are seen
as self-regulating systems. Psychological Systems "includes the field of engineering
psychology but seems to be more focused on social systems and the investigation of human
motivation, emotion, cognition, and group dynamics. Systems psychology "considers this
process in order to construct an effective system," which includes factors like human needs,
rewards, expectations, and traits of the individuals engaging with the systems "
Theories of learning that have the same roots investigate the connection between knowing
a topic in part and knowing it in its whole. In reality, Bertalanffy's organismic psychology was
similar to Jean Piaget's theory of cognitive development.
The problems with fragmented information and the absence of holistic learning from the
"machine-age thinking" that became a "model of school divided from daily life" are just two
of the common critiques of educational systems based on conventional assumptions about
learning, which Peter Senge has discussed at length.
Some systems theorists make an effort to provide other perspectives and ideas outside from
the mainstream, orthodox theories that are based on classical assumptions. Theorists
pursued interdisciplinary approaches by creating systems notions with broad applicability.
Ref 23
Founding and early development
Western scientific ideas from Plato and Aristotle through Isaac Newton's Principia (1687)
have historically affected all fields, from the hard to the social sciences. The early systems
theorists studied the implications of 20th-century advancements in terms of systems.
Robert Maynard Hutchins, at the University of Chicago, established the university's first
interdisciplinary Division of the Social Sciences in 1931 with support from the Ford
Foundation and worked tirelessly between 1929 and 1951 to promote innovation and
interdisciplinary research in the social sciences.
Several researchers in the area of systems theory set out to develop a unifying theory that
could be applied to systems in any scientific discipline.
The term "general systems theory" was developed by Ludwig von Bertalanffy in the 1940s,
when he was looking for a fresh perspective on the study of biological systems. Bertalanffy
began teaching on the topic in 1937, and he began publishing on the topic in 1946.
Bertalanffy reportedly advocated for an early version of GST in the 1920s and 1930s, but it
wasn't until the early 1950s that it gained more widespread recognition outside of scientific
circles (Jackson, 2000).
Several foundational concepts supported the systems perspective: At the most fundamental
level, every phenomenon may be seen as a system comprised of interconnected parts.
Second, the observer may get better insight into the behaviour of complex phenomena and
work towards a unity of the sciences by analysing common patterns, behaviours, and
features shared by all systems, whether electrical, biological, or social. Philosophy,
methodology, and the practical application of systems science all work together.
Bertalanffy's work influenced researchers in a wide variety of fields, including mathematics,
psychology, biology, game theory, and social network analysis. Complexity, self-
organization, connectionism, and adaptive systems were among the topics explored. Ashby,
Norbert Wiener, John von Neumann, and Heinz von Foerster all used mathematics to
investigate cybernetic systems; von Neumann used just pencil and paper to develop cellular
automata and self-reproducing systems. The groundwork for chaos theory was laid by
Aleksandr Lyapunov and Jules Henri Poincaré, who did their work without the use of a
computer. Radiation ecologist Howard T. Odum saw the need for a vocabulary that could
portray energetics, thermodynamics, and kinetics at any system size, and he pioneered the
development of such a language. Odum created the Energy Systems Language, a general
system or universal language based on the circuit language of electronics, to serve in this
capacity.
Several of these pioneering thinkers were dismayed by how the Cold War disrupted their
plans to advance systems theory via research. Several people started to see how systems
theory-associated ideas diverged from the original, broad perspective. An early scholar in
systems theory, economist Kenneth Boulding was concerned about the misuse of systems
ideas. A recent uptick in attention has been paid to systems theory, with concerted attempts
to fortify an ethical perspective on the pitch.
Both Talcott Parsons' action theory and Niklas Luhmann's social systems theory may be
traced back to the 20th century.
James Clerk Maxwell's work, especially his contributions to control theory, also exhibit
features of systems thinking. Ref 23
General Systems Research and Systems Inquiry
Several of the first scientists interested in systems theory set out to develop a unifying
theory that could be applied to systems in any scientific discipline. Ludwig von Bertalanffy's
lectures in 1937 preceded the publication of his "general systems theory" in 1946. In his
book, General System Theory: Grundlagen, Development, and Applications (1968), he
devoted a great deal of attention to the idea.
The goal of Bertalanffy's work as a biologist was to consolidate the many branches of
organismic research under a single umbrella. He referred to universal system principles as
"system," nonetheless. In his book General System Theory (1968), he said, "Models,
principles, and rules exist which apply to generalised systems or their subclasses, regardless
of their specific sort, the nature of their component parts, and the interactions or "forces"
between them." It makes sense to want a theory not of systems of a narrower variety, but
of the overarching principles that apply to all systems.
Thoughts on General System Theory by von Bertalanffy, prefaced by Ervin László
When von Bertalanffy proposed Allgemeine Systemtheorie, he did so with the belief that it
would usher in a fresh approach to scientific enquiry. A common understanding of "generic
system theory" as a "theory of general systems" in science was at odds with this. Something
much more expansive and consequential than any one theory was opened up by von
Bertalanffy: a new paradigm for the evolution of theory. He looked for overarching
principles that might be used to explain the behaviour of any system.
Bertalanffy divides the field of systems enquiry into the philosophical, scientific, and
technological spheres. Working with the Primer Group, Béla H. Bánáthy categorised the
areas of study into four overarching branches of systematic enquiry.

1. Philosophy: systemic ontology, epistemology (the study of the nature of knowledge,

especially as it relates to the methods, validity, scope, and distinction between
justified belief and opinion), and axiology (the study of the nature of value and
valuation, and of the kinds of things that are valuable.)Theory: a set of interrelated
concepts and principles applying to all systems
2. Methodology: what might be summed up as a collection of models, strategies,
approaches, and instruments that put systems theory and philosophy to use
3. Applicationdomain-specific application and interplay
He elaborated on the interplay between these two terms, noting that systems enquiry is
"knowledgeable action" because it combines "philosophy" and "theory" as knowledge with
"method" and "application" as action. Ref 23
Cybernetics
Cybernetics is the study of the interaction between living and nonliving systems (organisms,
organisations, machines) and the communication and management of regulatory feedback in these
systems. It examines the mechanisms by which anything (electronic, mechanical, or biological) may
either 1. regulate its behaviour, 2. process information, and 3. respond to it, and how these
mechanisms change or can be modified.
Systems theory and cybernetics are often considered interchangeable. Cybernetic systems is a word
used by certain writers to refer to a specific subset of the class of general systems; specifically,
systems with feedback loops. Yet, generic systems are subset of cybernetics due to Gordon Pask's
perpetual interacting actor loops (that yield finite products). W. Ross Ashby, Norbert Wiener, John
von Neumann, and Heinz von Foerster are only a few cybernetics scholars who have used
mathematics to investigate complex systems.
Cybernetics may be traced back to the late 1800s, when its foundational works (including Wiener's
Cybernetics in 1948 and Bertalanffy's General Systems Theory in 1968) were published. Cybernetics
originated in engineering whereas GST developed in the biological sciences.
Complex systems are the focus of cybernetics, catastrophe theory, chaos theory, and
complexity theory, all of which attempt to understand such systems by focusing on the
interactions between their many moving pieces. While there are connections between
cellular automata, neural networks, AI, and artificial life, these disciplines do not attempt to
represent universal complicated systems. The historical perspective, with its emphasis on
distinct methods, is ideal for comparing the various "C"-Theories of complex systems.
Following Edward Lorenz's discovery of a weird attractor with his computer at the dawn of
chaos theory, computers have become crucial tools for research. The use of computers in
the study of complex systems is now a must. Ref 23
Complex adaptive systems

John H. Holland, Murray Gell-Mann, and others at the multidisciplinary Santa Fe Institute
coined the term "complex adaptive systems" (CAS) to describe a subset of complex systems
that exhibit high diversity levels and the ability to alter and adapt in response to their
environment.

Regarding CAS, positive feedback is more common, which amplifies and perpetuates
changes, turning local abnormalities into global characteristics, in contrast to negative
feedback, which dampens and reverses disequilibria in control systems. Ref 23

Contingency theory
According to the contingency approach, which is a school of management thought, the most
effective method of leadership changes from scenario to situation, and a dogmatic
adherence to any one method is counterproductive.
According to proponents of the contingency theory of organization, there is no optimum
method to run a business, manage a team, or make important choices. Instead, the best
course of action will vary from one circumstance to the next. When it comes to the day-to-
day operations of the business and how best to react to the ever-evolving external
environment, executives who can "stay agile" are indispensable.
Two studies that defined what constitutes good leadership impacted the development of the
contingency theory of leadership. To gauge a broad spectrum of conceivable leadership
behaviours across a variety of organisational circumstances, researchers at Ohio State
University administered lengthy questionnaires in the 1950s. Initiating structure leader
behaviours that provided structure (e.g., role assignment, planning, schedulling) and
consideration leader behaviours that included building good rapport and interpersonal
relationships and showing support and concern for subordinates (relation oriented
leadership) were found to be particularly characteristic of effective leaders.
At around the same time, researchers from the University of Michigan's Survey Research
Center interviewed business professionals, handed out questionnaires, and tallied data on
employee output to determine what makes for good leadership. On the other hand, the
researchers at the University of Michigan classified these actions as either "relation-
oriented" or "task-oriented" leadership. In 1964, Robert Blake and Jane Mouton built on this
line of enquiry to propose that successful leaders exhibit both high levels of relational and
task-oriented conduct.
It was argued that earlier theories like Weber's bureaucracy and Taylor's scientific
management had failed because they neglected to take into account the effect of
environmental elements on management and organisational structure. As a result, there is
no such thing as an optimal method of management or administration. Hence, the success
of a leader's efforts would be affected by the external conditions in which they were
operating.
 In an effort to establish broad generalisations, contingent theorists have attempted to
determine which formal structures are most often linked with or best suit the application of
certain technologies. Technology, according to Joan Woodward (1958), is the direct cause of
disparities in the scope of management, the concentration of power, and the codification of
policies and processes inside organisations.

Contingency approaches
According to Fiedler (1993), "the personality of the leader and the degree to which the
circumstance affords the leader authority, control, and influence over the situation" are the
two key contributors to effective or successful leadership. To begin, there are essentially
two distinct motivational schools of thinking among leaders. Both task- and relationship-
driven leaders exist. According to Fiedler, the Least Preferred Co-Worker Score (LPC) best
indicates an individual's motivation preference. According to Fielder, the second factor that
influences success is the leader's perception of his or her own agency in a given
circumstance.
Gareth Morgan in his book Images of Organization summarized the main ideas underlying
contingency:
• Organizations are complex systems that need careful management in order to meet
internal demands, strike an appropriate balance with external influences, and adapt to
changing conditions.
• There is no perfect method of administration. The correct form must be used in
accordance with the specifics of the work at hand and the surrounding conditions.
Alignments and strong fits should be the top priorities for management.
• Different species of organisations are called for in various ecosystems.

 Fred Fiedler developed a concept of leadership based on contingencies. In this model, we see how
different types of leadership affect the outcomes of different situations. Fielder came up with the
Least Preferred Coworker metric to assess a leader's effectiveness. The exam includes 16–22
questions about a problematic coworker, each of which must be rated on a scale from 1–8. If a
person scores well, they have a relational style, but if they score low, they have a task oriented
style. Fiedler defined situational favorability along three experimentally determined dimensions:
 Leader-member relationship – There is a strong leader-member connection when
followers see their leader favourably.
 Degree of task structure – high if the task is very structured
 Leader's position power – high if a great deal of authority and power are formally
attributed to the leader's position
Situations are favorable to the leader if all three of these dimensions are high.
How to apply Fiedler’s Contingency Model:
 Learn about your management style by filling out a "Least Favored Coworker"
questionnaire
 A low LPC implies a leader who is focused on getting things done, whereas a high LPC
shows a leader who is focused on building relationships.
  Identify the aspects of a given scenario that are weak, unstructured, or substandard;
this will help you choose the most effective leadership style in improving those
features.

William Richard Scott says this about contingency theory: "The best way to organise depends on the
kind of environment the organisation has to deal with." This statement is backed up by the work of
other researchers like Paul R. Lawrence, Jay Lorsch, and James D. Thompson. They are more
interested in how different things affect the structure of an organisation. For most of the 1970s,
their structural contingency theory was the most popular way to look at how organisations are put
together. Johannes M. Pennings looked at how environmental uncertainty, organisation structure,
and different aspects of performance all affect each other. Pennings did a study on a small group of
retail brokerage offices. In this study, aspects of their market environment like competitiveness,
change, and munificence (generosity) were compared to organisational arrangements like decision-
making templates and power distribution. These two things were looked at to see which ones might
have an effect on performance. Structured parts of offices had a big effect on performance, but the
environment or "contingency" had less of an effect, according to the evidence.

So, in management, there is no "one best way" to do things. Instead, different situations call for
different ways to handle, manage, and solve the problem at hand. Management and organisation is
a "open system" that accepts oddities or challenges from time to time. This means that solutions
need to be "adaptable" and "situational" in order to solve the problem or issue. Other factors that
depend on the organization's environment are "changes" in customer demand for goods and
services, changes in government policy or law, changes in the environment or climate, and so on.

Strengths of the Contingency Theory

The first big advantage of the contingency theory is that it is backed up by a lot of real-world
research (Peters, Hartke, & Pohlman, 1985; Strube & Garcia 1981). Based on many
tests and studies, this is very important and shows that the theory is correct. The
contingency theory has helped us learn more about leadership by getting people to
think about how different situations affect leaders in different ways. Another
strength of the contingency theory is that it can predict the kinds of leaders who will
be best in different situations. This theory is also helpful because it suggests that
leaders don't have to be good in all situations and that there are times when a leader
might not be the best choice. The last big benefit of the contingency theory is that it
gives organisations that are making their own leadership profiles concrete
information about leadership styles. Ref 24

Total Quality Management

Total quality management (TQM) is an organization-wide effort to "install and make a
permanent climate where employees continuously improve their ability to provide on
demand, products and services that customers will find particularly valuable." "Total"
emphasises that departments other than production, like sales and marketing, accounting
and finance, engineering and design, are also required to improve their operations.
"Management" emphasises that executives are required to actively manage quality through
funding, training, staffing, and setting goals. During the late 1980s and early 1990s, TQM got
a lot of attention. However, ISO 9000, Lean manufacturing, and Six Sigma soon overtook it.
In the late 1970s and early 1980s, Japan's ability to make high-quality goods at low prices
put a lot of pressure on the economies of North America and Western Europe, which were
already developed. For the first time since the beginning of the Industrial Revolution, the UK
started importing more finished goods than it exported. Firms started looking at the quality
control methods that had been made in the past 50 years and studying how the Japanese
had used those methods so well. TQM began to grow during this time of economic trouble.
Development in the United States

In 1984, a part of the US Navy asked some of its civilian researchers to look into statistical
process control. Several well-known quality consultants' work led to suggestions about how
their methods could be used to improve the Navy's operational effectiveness. The
suggestion was to follow what W. Edwards Deming had to say. In 1985, the Navy called the
project "Total Quality Management."

TQM spread from the Navy to the rest of the US Federal Government, which led to the
following:
 The Malcolm Baldrige National Quality Award was first given out in August 1987.
 The Federal Quality Institute was set up in June 1988.
 Many parts of government and the military, such as the United States Department of
Defense, United States Army, and United States Coast Guard, have started using
TQM.

Total Quality Management was used to create the US Environmental Protection Agency's
Underground Storage Tanks programme, which started in 1985. The private sector started
to use TQM principles as a way to take market share back from the Japanese and to stay
competitive when bidding for contracts from the Federal Government, since "total quality"
requires suppliers to be involved in efforts to improve process as well as employees.

Features
In the 1980s, when the Navy started working on TQM, one of the most important ideas was
that "customer needs define quality."
• "Improving quality is the direct job of the top management."
• "Work processes that are systematically looked at and made better lead to higher quality."
• "Improving quality is a continuous process that is done all over the organisation."
The Navy used the PDCA cycle to get problems solved and ad hoc cross-functional teams,
which are like quality circles but are made up of people from different departments, to fix
immediate process problems.
Standing cross-functional teams that are in charge of improving processes over the long
term.
Active management participation through steering committees. • Using the Seven Basic
Tools of Quality to analyse quality-related issues.
United States Department of Defense (1988)
"Total Quality Management (TQM) is a strategy used by the Department of Defense to
improve performance at all levels and in all areas. It brings together basic management
techniques, ongoing efforts to improve, and specialised technical tools in a structured way
that focuses on making all processes better all the time. The goal of better performance is to
meet big goals like cost, quality, schedule, mission need, and mission suitability. The most
important goal is to make users happier. The TQM effort builds on the work of pioneers like
Dr. W. E. Deming, Dr. J. M. Juran, and others. It also takes advantage of both private and
public sector experience with improving processes all the time."
British Standards Institution standard BS 7850-1:1992
"A management philosophy and set of business practises that aim to use an organization's
people and things in the best way possible to reach the organization's goals."
International Organization for Standardization standard ISO 8402:1994
"A way of running an organisation that is based on quality, involves all of its members, and
aims for long-term success through customer satisfaction and benefits for all of its members
and society as a whole."
The American Society for Quality
"A term that was first used to describe a way for managers to improve quality. Since then,
TQM has been used in a lot of different ways. Simply put, it is a way to run a business that
ensures long-term success by making customers happy. TQM is based on the idea that
everyone in an organisation should work to improve processes, products, services, and the
way people work together. Quality leaders such as Philip B. Crosby, W. Edwards Deming,
Armand V. Feigenbaum, Kaoru Ishikawa, and Joseph M. Juran have written about how to
use this approach."
The Chartered Quality Institute
"TQM is a way to run an organisation so that it can meet the needs and expectations of
stakeholders in an efficient and effective way without compromising its ethical values."
Baldrige Excellence Framework

Public Law 100-107 in the U.S. created the Baldrige Award, which is given every year to U.S.
businesses, schools, health care organisations, and government or non-profit organisations
that are good examples of how to run an organisation well. Seven types of criteria are used
to judge organisations:

1. Leadership
2. Strategy
3. Customers
4. Measurement, analysis, and knowledge management
5. Workforce
6. Operations
7. Results
Example criteria are:
  How do you find out how happy your customers are with you compared to how
happy they are with your competitors?
 How do you choose, gather, align, and combine information and data to keep track
of daily operations?
 How do you manage your employees, their needs, and your own needs to keep
things running smoothly, avoid layoffs, and lessen the effects of layoffs if they do
happen?
Joseph M. Juran believed the Baldrige Award judging criteria to be the most widely accepted
description of what TQM entails.

Legacy

In the academic world, the most people were interested in TQM around 1993.

As part of the Clinton administration's plan to make government work better, the Federal
Quality Institute was shut down in September 1995. Because of the Great Recession, the
European Center for Total Quality Management shut down in August 2009.

In the 1990s, the ISO 9000 collection of standards and their formal certification processes
mostly replaced TQM, which was a vague way of managing quality. Businesses stopped
paying as much attention to quality improvement under the TQM name as they did to Jack
Welch's Six Sigma and Toyota's lean manufacturing, even though all three use many of the
same tools, techniques, and philosophies. TQM is still alive in the form of national quality
awards all over the world. Ref 25

Learning Organisation:
"A learning organisation is one that has built up the ability to learn, adapt, and change all
the time." — B. P. Robbins and M.

Organizations work in an environment that is always changing. Information and computer

technologies are always getting better. Global markets have customers from all over the
world. Even though the world has become more connected, customers are not the same
everywhere. Culture, beliefs, and ways of life in each country make them different.
Organizations are now global and multiethnic, so they have to deal with cultural and racial
differences both inside and outside the organisation.

Organizations need to be able to learn quickly and adapt to changes if they want to be
responsive to customers and stay in business. They need to learn how to question common
knowledge, keep the organization's knowledge base up to date, and make the changes that
are needed. In a learning organisation, everyone is always learning and taking part in finding
and solving work-related problems. They also learn from the organization's process of
learning. In a learning organisation, people manage their knowledge. There are partners in
managing knowledge and learning all the time.

They always get, share, and use new information when making decisions. In the competitive
world of today, organisations that learn and use new ideas have an edge over their rivals.
"All organisations learn, even if they don't want to. It's a basic requirement for their
continued existence."

"People are always getting better at getting the results they really want. This is a place
where new and expensive patterns are grown, where collective aspiration is set free, and
where people are always learning how to learn together." — Peter Senge

Learning organisation "helps all of its members learn and changes itself all the time." —
Pedlar.

It "keeps getting better by quickly making and improving the skills needed for future
success." Wick and Leon Reference 26
Learning organisations:
a. Learn from experience.

b. Use continuous development programmes.

c. Solve problems in a planned way.

d. Use formal training programmes to share what you've learned with the rest of the
organisation.

e. Give people a place and a formal way to think, ask questions, reflect, and learn, and
encourage them to question the way things are done now and suggest changes.

It "gives a healthy environment for learning to happen naturally." It figures out what each
person needs, helps them improve their skills through training and ongoing learning, looks
at the organization's policies, and learns from what its members have done. It uses the
experiences of its managers to make sure its plans and needs are met. Learning
organisations are known for renewing themselves from the inside out and being responsive
to the outside world, which is very competitive and always changing.
Double-loop learning is used by organisations that want to learn instead of single-loop
learning. In single-loop learning, mistakes are fixed based on what has worked in the past. In
double-loop learning, when mistakes are found, they are fixed by changing goals, policies,
and normal routines. Double-loop learning puts old assumptions and rules to the test and
opens the door to new ways of solving problems. This leads to big changes in how an
organisation is built and structured. Then, new ideas and concepts can come in, giving the
organisation a new lease on life and making sure it stays fresh. The learning organisation is
always and everywhere coming up with new ideas. Each worker is told to come up with new
ideas and think of ways to make things better.
Adaptive learning is the same as learning in a single loop. It focuses on things that the
organisation can help with. Organizations that use a single-loop learning frame set goals,
track how they're doing, make changes, and close the loop.
The name for this kind of learning is generative learning. Organizations change their goals.
They always adjust to changes in the environment, learn what new goals can be reached in
the new conditions, and make plans to reach the new goals. They convert learning into
action. Learning can be a culture within the organization and it should be promoted
throughout the organization to create a participatory approach for all.
The following diagram differentiates between single-loop and double-loop learning:

Features of Learning Organisation:

A learning organisation has the following features:
1. Boundary-less organization:
It is not put together in a clear way. The design of the organisation is not limited to
boundaries that are only horizontal, vertical, or external. Departments are made by
horizontal lines, and organisational levels and hierarchies are made by vertical lines. A
learning organisation stays flexible and doesn't have a set plan. When doing work for the
organisation, employees work together.
Members share information across functional areas (horizontal boundaries) and between
organisational levels (vertical boundaries). Physical and structural boundaries are kept to a
minimum, and people feel like they are part of the organisation. Everyone finds more
meaning in their work.
2. Teams:
People don't work in certain departments or at certain levels. They work in groups and do
everything that needs to be done for the organisation. Managers create cross-functional
teams to organise activities around work processes instead of functional departments. This
gets rid of the organization's horizontal lines. Less is going on, and people at all levels feel
like they are taking part.
They make cross-hierarchy teams and encourage everyone to take part in making decisions.
This gets rid of the organization's vertical lines. People put their own needs and the needs of
their departments last and work together to reach the organization's vision. As each
person's learning and work are taken into account, they grow and become self-leaders.
3. Empowerment:
When employees are given the power to make decisions, they make good ones. Power is
being able to do work as well as you can. In learning organisations, employee teams are
given the power to make decisions about work-related issues. There is less need for bosses
or direct supervisors. Managers don't tell employee teams what to do; instead, they help,
support, and advocate for them. When people work together, they do better. The
organisation has a peaceful feel to it.
4. Information sharing:
Information makes it easier to learn. In a learning organisation, employees learn by sharing
information with each other. This is called "knowledge management," and it helps everyone
contribute to and be a part of the organisation. Information is shared in the organisation in
a timely, correct, and open way. People talk to each other freely because there are no
physical barriers (across vertical and horizontal boundaries). This means that members
share a lot of information with each other. People get rid of old ways of thinking and come
up with new ones. Policies are also made to help people learn within an organisation. All
levels of members are encouraged to share information, contribute, and come up with new
ideas. It helps everyone grow.
5. Shared vision:
Leaders in learning organisations foster a common goal that encourages input from
employees at all levels. Members create a shared mental picture of the organization's
direction and strategy, then work together to make it a reality. It allows the company to
adapt to new circumstances and take advantage of emerging possibilities. Decisions are not
left in the hands of a select few. When information and ideas are shared and discussed
amongst all members of an organisation, making choices and taking action becomes much
simpler.
6. Collaboration:
Leaders in a learning organisation are influential and dedicated. They create an environment
where individuals want to work together and help one another develop. This produces an
inspired workforce that adapts and improves in response to changing circumstances.
7. Organisational culture:
Employee behaviour is shaped by the organization's culture, which is a set of norms and
values established by consensus. Members of a company with a culture of learning see the
processes, activities, functions, and interactions of the business with its external
environment as interconnected parts of a whole. They want everyone to contribute to their
own development.
A common goal is established, and everyone works together to achieve it. They learn to care
for and trust one other as a group. People in this culture are known to have each other's
backs. It fosters curiosity and investigation by challenging preconceived notions. Because of
the approach's emphasis on collaboration, blunders are not only tolerated, but actively
encouraged.
Merits of Learning Organisation:
A learning organisation has the following merits:
1. The company takes risks, makes attempts, and tolerates more setbacks. Decision-
makers benefit greatly from this because of the wealth of experience gained from
past mistakes.
2. The company's rich and casual culture encourages development and success, and it
actively engages with consumers. The success of a business is directly tied to its
ability to anticipate and meet client needs.
3. Education improves the responsiveness, creativity, and versatility of businesses. The
organisation has solid emergency planning procedures in place. The company's
success, procedures, and workload are all equally distributed.4. The organisation can
anticipate and adapt to changing market conditions. It reaches the market with
innovative products faster than competitors.
4. The company strives for the highest levels of client response possible. The
corporation gains an edge in the market as a result of this.
5. It helps the company adapt to the needs of the information economy and the ever-
evolving nature of technology, international competitiveness, and customer
preferences.

Traditional Organisation and Learning Organisation:

The following table highlights differences between traditional and learning organisations:

Learning Organisation — An Improvement Over Traditional Organisation:

Learning organisation is an improvement over traditional organisation in the following
ways:
1. Fragmentation:
In a conventional organisation, several divisions are responsible for different tasks
(production, sales etc.). Due to their geographical distance, coordination is essential. A
learning organisation is a boundary-less organisation, hence it does not have distinct
divisions. Members, regardless of their position or division, work together to plan and carry
out daily tasks.
2. Competition:
In a conventional business structure, divisions are encouraged to compete with one
another. Managers and employees from different departments vie for funding and
recognition. Functional departments and their respective heads compete with one another.
Departments work together to pool their expertise in a learning organisation. There is
widespread agreement on the organization's long-term goals. In order to achieve the
group's shared objectives, everyone works together and does their part. No one in the
organisation should have to be persuaded or misled into believing in its mission.
3. Reactiveness:
Conventional business managers tend to act after the fact. They examine issues and identify
answers in accordance with established standards. Learning organisations have imaginative
leaders. They're a breath of fresh air for the company. They encourage change and new
approaches in the workplace. Jealousy, envy, and competitiveness subside when everyone
advances in their roles and contributes to the best of their abilities. The leaders in the
company push everyone to think beyond the box. As a result, everyone on staff will be more
creative and helpful. The learning organisation is one that is always adapting to new
circumstances.
4. Goals and vision:
The leaders of a conventional company create the company's objectives. The company's
upper management makes the decisions on execution and sets the strategic direction. In a
learning organisation, everyone has the same goal in mind. Ideas are developed and
implemented at every level and in every division. Everyone has a voice and makes a
difference, and there is a lot of fun to be had at work.
5. Competence building:

People in a conventional organisation focus on improving their own skills. Workers take
ownership of their tasks and settle disagreements with the help of superiors in higher
positions.
The goal of every learning organisation should be to improve teamwork. Individuals have a
firm grasp of their roles and can explain them to others. People gain knowledge through
working together to solve problems. Conflict is seen positively and is used to bring together
the many perspectives present in the workplace. It's a cutting-edge, future-proof method of
performing.
Learning Organisation — An Ideal Organisation:
No organisation is perfect. It can only strive towards idealism.

Based on traditional concepts of organisation behaviour, learning organisation can

achieve this idealism through the following measures:
1. Total quality management:
It dedicates resources to enhancing quality in all parts of the organisation, no matter how
big or little, on a consistent basis.
2. Organisation culture:
It is a place where curiosity, openness, and development are prized.
3. Boundary-less organisation:
It eliminates silos between organisations and departments.
4. Functional conflict:
It's okay to disagree with each other and provide constructive feedback. Fighting is
celebrated rather than feared.
5. Transformational leadership:
Its leaders focus on the long-term, rather than the short-term, bottom line. Together, they
effect change that benefits the organisation as a whole and its individual members. They
learn to work together towards a common goal and to put the needs of the group ahead of
their own. They are not intimidated by the success of others, and they help each other
develop. A shared vision fosters cooperation and dedication to the company's future. The
organization's goals and tactics are developed via collective effort by its members.
6. Team work:
Teamwork is encouraged when there is a common goal. Individualism gives way to
collectivism when people work together to solve problems, find common ground, and make
choices.
How to Create a Learning Organisation:
The following steps can help to create a learning organisation:
1. Establish a strategy:
Managers plan for and commit to new approaches, new ideas, and ongoing progress in all of
these areas. Individuals abandon their previous methods of doing things and start thinking
in a fresh manner about their jobs. People embrace training programmes to expand their
abilities and create self-managed, empowered teams in the workplace; old habits are
abandoned in favour of the new.
2. Redesign the organisation structure:
Boundary-less structures replace the conventional vertical and horizontal organisational
charts. There is no room for growth in a rigid system. Because of the need for competition
to maintain social order, learning is stifled. To foster organisations that can quickly adapt to
new circumstances and have members who all believe in the same overarching goal,
managers often remove or merge divisions, form cross-departmental teams, break down
silos, and boost interdependence. The lines of communication are thrown wide open so that
everyone, regardless of rank, may take part and provide input.
3. Reshape the organisation culture:
Managers now actively foster an environment where debate is valued. Learning
organisations benefit from taking risks, making errors, experiencing functional conflict, and
having differing opinions.
B. Dumaine remarks:

Teaching individuals to let go of the need for consensus is the key to releasing true
openness in the workplace. Consensus is crucial, in our opinion. So what? You need to
expose contradictions and problems so that we may solve them as a group and become
smarter than any of us could be on our own. Ref 26

Management Styles
What is a management style?
A manager's Management Style is the approach they use to achieving their objectives and
carrying out their duties. What defines a manager's approach to planning, organising,
decision-making, delegating, and staff management is his or her "management style."

It may be quite different from one individual to the next, and from one firm to another, and
from one industry to another, and from one culture to another.
An efficient manager is one who can adapt their methods to new circumstances without
losing sight of the ultimate goal.

Management styles are affected by both internal and external factors.

Internal factors include:
 The overall organizational and corporate culture of the company,
 policies,
 priorities,
 employee engagement,
 staff skill levels.
External factors include:
 employment laws,
 the economy,
 competitors,
 suppliers,
 consumers.
Both management and workers will be impacted by external circumstances that the
company cannot control.

Types of management styles

Management may be characterised as autocratic, democratic, or laissez-faire.

There are several subtypes of management styles inside each of these umbrella categories,
each with its own set of advantages and disadvantages.
Autocratic management styles
This is an example of a management style in which information flows only in one direction,
from upper management to lower-level staff. This is the most authoritarian kind of
management, with upper management exercising complete control over the workplace.
Workers are regarded like drones, with strict parameters within which they must operate.
Workers are not only discouraged from, but deliberately prevented from, asking questions,
submitting suggestions, and sharing their opinions on improving procedures.
Autocratic management styles may be broken down into three categories: authoritarian,
authoritarian-lite, and paternalistic.

1. Authoritative management style

Using this method, supervisors tell employees precisely what they must accomplish and
then take action against those who don't follow the rules.
Workers are expected to do their jobs in the same manner, every time, without questioning
their superiors.
Micromanagement occurs when managers keep a tight eye on workers' efforts but don't
have faith in their ability to get the job done without close monitoring. Some managers are
of the opinion that their staff cannot function well unless they are constantly watching over
them.
Pros:
Faster decision making and well-defined responsibilities are two benefits of this
management approach.
Setting clear and strong standards may help employees perform without confusion,
especially with unskilled personnel or large teams.
When the boss is there, productivity rises.
Cons:
An rise in employee unhappiness, which in turn increases turnover, resentment, a lack of
professional growth and employee engagement, and the construction of a "we" against
"them" mindset between workers and management are all drawbacks of an authoritarian
management style.
When new ideas aren't encouraged, outdated methods tend to stick around.
This tone should be used when: This kind of management works well in situations when
swift decision-making and action are essential, such as during an organisational crisis. If
possible, you should steer clear of it. Ref 27

2. Persuasive management style

Managers that adopt this style utilise their persuasion talents to persuade staff that the
manager's choices, which are implemented unilaterally, are ultimately in the best interests
of the team, department, or organisation. Managers that adopt this method encourage staff
to ask questions and share their thoughts on the decision-making process and the reasoning
behind rules, as opposed to merely issuing orders. Staff members may feel less alienated
from management and more invested in the company's success if they are given a voice in
strategic decision-making.
Pros:
Trust between management and staff may be built, and workers are more likely to comply
with management's directives.
When a manager uses an authoritarian manner, employees may feel more stifled than when
they are led with reason and reasoning.
Cons:
Staff will still feel stifled in their ability to provide criticism, come up with their own ideas,
and gain new skills.
When to use this style:
When the manager has greater expertise in the area than the team he is heading, he might
employ this approach. Managers are the go-to people in certain situations.
Although walking someone through your thinking process is useful, you should trust your
own judgement. It's also useful for managing up the corporate ladder. The lower-level
employees have no way of communicating with the higher-ups. Ref 27

3. Paternalistic management style

The manager's actions are motivated by concern for the employees under them.
The company often treats its workers like "family," eliciting from them a sense of loyalty and
trust.
This kind of management makes decisions unilaterally but explains to workers that they are
doing it from a position of competence and, hence, legitimacy. Workers are briefed on
decisions but given little opportunity for input or debate.
Pros:
The manager's actions are motivated by concern for the employees under them.
The company often treats its workers like "family," eliciting from them a sense of loyalty and
trust.
This kind of management makes decisions unilaterally but explains to workers that they are
doing it from a position of competence and, hence, legitimacy. Workers are briefed on
decisions but given little opportunity for input or debate.
Cons:
A paternalistic manager cares about the well-being of their staff and makes decisions based
on what is best for them.
Upskilling and education for employees are valued because it makes them happier, more
skilled, and more productive.
When to use this style:
This style is used very differently in different cultures.
In the West, there is less of a reliance on hierarchical structures, and employees are less
likely to accept the idea of a kind boss.
Smaller companies may do well with this kind of leadership, but bigger ones should stay
away from it. Ref 27
Democratic management styles
In this style, leadership encourages employees to give input during decision-making process,
but they are ultimately responsible for making the final choice. Communication goes both
up and down, from the top to the bottom, and this makes the team stronger. This process
lets people with different skills, ideas, and opinions help make decisions.

1. Consultative management style

In this style, managers ask their team members what they think and what they think about
something. They do this to get all of their team members' points of view.
The manager will make the final choice, but they will take into account everything the team
members have said.This style is often used in specialised fields where staff members are
experts and management needs their input to make good decisions.
Pros:
This style helps staff and management get along better and builds trust among teams.
Management learns from the ideas, opinions, and experiences of the people they are in
charge of.
People are encouraged to be creative and give their opinions, which helps them solve
problems better.
Cons:
Consulting staff can be hard work and take a lot of time.
A manager can easily get stuck in this process if they don't know how to handle their time
well.
If it seems like bosses are picking favourites or not listening to what employees have to say,
employees may become angry and not trust the manager.
If this style is used too much, employees may stop trusting their boss because they will
wonder why they are always asked to help solve problems instead of management taking
care of it as part of their job.
When to use this style: This style ought to be employed when managing teams with
specialised skills or when the manager doesn't know as much about the subject as the team
does.
For example, a manager who is in charge of a group of developers who are making a new
SaaS would want to talk to them often to learn from their experience.
2. Participative management style
In this style, both managers and staff take part in making decisions.
Staff can find out more about the company and its goals, and they are encouraged to come
up with new ways to solve problems.
Management asks employees for their thoughts, ideas, and opinions. They then work with
employees to make decisions, which are then put into action. Management and staff come
up with ideas together.
Pros: Employees feel like they are appreciated by their managers and the company as a
whole, which makes them more motivated and productive.
The more they understand and care about the goals of the organisation, the more engaged
they are. There is more innovation.
Cons: This process can be slow, and there is a chance that staff members with bigger
personalities will run over staff members who are less assertive. This could lead to
disagreements and feelings of resentment.
In industries with trade secrets, it can be risky to give employees access to sensitive
information.
If employees don't want to be involved in this kind of decision making, they may grow to
dislike managers who use this style.
When to use this style: When making big changes in an organisation, especially one where
people are resistant to new ideas or plans, getting the staff involved will lead to a better
result and less resistance to the new policies.
Tech companies and other organisations that want to push for new ideas will find this style
useful. Ref 27
3. Collaborative management style
In this style, management sets up an open forum where ideas can be talked about in depth
before decisions are made based on the rule of the majority. Staff is given the freedom to
take responsibility for results, which can lead to more engagement, creativity, and
innovation.
Pros:
Staff feels that all levels of their management team trust them, value them, and listen to
them.
They are motivated to do their best work, work together to solve problems, and give their
full attention to the process.
Open communication at work means that problems are often solved before they become
real problems.
Engaged employees are less likely to leave their jobs, and different ideas often lead to better
solutions and results. Innovation, creativity, and coming up with new ideas are encouraged.
Cons:
This process can take time, just like other democratic ways of running a business.
Majority rule isn't always the best choice for an organisation, either. If a decision isn't in the
best interests of the business, management will have to step in and change it, which can
lead to anger and mistrust.
When to use this style This approach is ideal for companies that wish to encourage
creativity, boost teamwork, and enlist the help of their staff.
If you're looking to boost employee loyalty and confidence in the midst of significant
organisational or industry shifts, this approach may be worth exploring. Ref 27

4. Transformational management style

Management in this manner is adaptive and growth-oriented.
Managers put in extra effort to motivate their people to achieve more and more by
stretching their boundaries and challenging them to go beyond their comfort zones.
Managers put forth the same amount of effort as their workers, and they motivate their
staff to work harder by working hard themselves.
Pros:
Employees are more likely to come up with original ideas, and they'll have an easier time
adjusting to new situations or taking on difficult tasks.
Staff members are encouraged to think outside the box in order to improve problem-solving
and product creation.
Cons:
This method, if not handled with caution, might lead to employee burnout.
The team may get overworked and exhausted to the point that they can no longer keep up.
When to use this styleThis approach works well for businesses that operate in dynamic
fields or that expect a time of transition within their sector, company, or division.
By adopting this method, groups will be better able to adapt to changing circumstances and
generate new ideas quickly. Ref 27

5. Coaching management style

In this model, managers take on the role of coach, with workers playing important roles as
players on the squad.
The manager's role is to nurture and direct the staff under their charge, with the staff's
professional growth as a top priority. The manager's goal is to foster an environment
conducive to professional development, thus they prioritise long-term growth above quick
fixes.
Pros:
When workers believe in the company's mission and see opportunities for growth in their
positions, they are more likely to be invested in their work.
When managers invest time in getting to know their staff, those workers are more inclined
to treat them as a "coach" and give their all on the job.
Cons:
Workplace politics become poisonous when employees use this method to get better
positions and more responsibility.
Long-term planning at the expense of short-term initiatives is a common pitfall.
When to use this style: When an organization's goal is to promote from within and nurture
new talent, this method may be quite helpful. This approach might be useful in sectors with
a lot of competition for jobs, where finding qualified individuals often takes a lot of time and
resources. Ref 27
Laissez-faire management styles
The management under this model doesn't meddle too much in day-to-day operations.
Employees are given autonomy in their employment, with responsibility for making their
own decisions and addressing their own problems.
Management is involved in the task's delegation and execution phases, but otherwise
provides employees considerable autonomy over their work processes and the results they
produce. Management participates if and only if employees desire their help.

1. Delegative management style

The manager's role is limited to delegating work, yet they are ultimately held accountable
for its completion. After a job has been delegated, workers are free to do it in whatever way
they see suitable.
After a project is over, the manager should step back in to evaluate the results and provide
suggestions for future enhancements.
Pros:
This strategy is particularly effective in companies with highly competent employees since it
encourages innovation and creativity. Such as in the IT industry.
When employees are trusted with autonomy over problem solving, they are more likely to
work together to find solutions.
Those who want more freedom in their jobs may find it more satisfying.
Cons:
Productivity may drop if there is no strong leadership.
Teams may become disorganised, scattered, or inconsistent.
Resentment may grow because of poorly handled confrontations.
Management may be seen as a drag on morale if employees believe they aren't making
meaningful contributions to the team's performance.
When to use this style: This method works best when the team has more expertise than the
management and authority is delegated inside the company.
Managers may take a back seat, let their teams experiment, and provide guidance when
necessary even if they lack direct knowledge in novel areas like cloud management software
development, for example. Ref 27

2. Visionary management style

Managers that use this approach motivate their teams to achieve great things.
Leaders articulate their vision and the reasoning behind it to inspire their followers to join
them in realising it.
Team members are inspired by their management and given latitude to do their work with
little oversight. Managers will make occasional checks, but they believe in their team's
ability to stay focused on the big picture and provide solid outcomes.
Managers provide workers with plenty of feedback, both during and after the process, in the
form of both positive and negative comments.
Pros:
Engagement is heightened because staff believes in what they are creating and are driven to
complete tasks to the best of their ability.
Employees are more satisfied, motivation is higher and turnover is lowered.
Innovation is higher, and problem-solving can happen quickly within teams.
Cons:
Not every manager has the potential to inspire their team. The job, the company, the item,
and the individual all play a role.
This is not a look that can be manufactured; workers need genuine encouragement if they
are to give their utmost.
When to use this style: This approach works well for businesses with a deep sense of
purpose, such software startups attempting to shake up established markets or NGOs
looking to find new ways to solve old issues.
This approach may be used by a company to inspire its employees to take bold steps
towards fostering a culture of innovation. Ref 27
Conflict management styles
Hiring a manager who can effectively handle conflicts is a distinct skill from standard
management.
A professional manager should be able to adapt conflict management approaches based on
the scenario, just as they should be able to vary their general management style depending
on the situation.

Manager as a Coach
Managers should invest in mentoring their staff because it pays dividends. Coaching has
been shown to improve employee engagement, productivity, and service to customers. It
also aids in the development of an employee's performance, resilience, capacity to set and
achieve lofty objectives, and self-assurance. Is it assumed that coaching would simply assist
the company and its workers? And what's in it for the managers, exactly?
The issue is crucial since the positive effects of mentoring on the manager are often
overlooked. New managers typically see coaching programmes as an unrewarding approach
to put in a lot of work for little payoff when their companies roll them out. But, there are
countless wins for everyone involved when managers make the shift to coaching roles.

Honing Leadership and Behavioral Skills

A manager may learn a lot about leadership through the process of mentoring an employee.
According to a recent Forbes article, managers should approach leadership with the
"mindset of a coach" since there is no one "correct" approach. Good leadership requires
"core coaching abilities," as stated by the Forbes Coaches Council. They include "empathy,
curiosity, and listening."
Aspects of coaching:
Communication skills: A manager's ability to lead and communicate effectively may be
improved via coaching. Managers improve their listening skills the more they act as coaches.
Managers might benefit from coaching to improve their communication skills as well.
Together, managers and employees may progress via coaching. They've been able to better
connect, which has led to increased productivity.
Emotional intelligence (EQ): By coaching, leaders may increase their level of self-awareness
and self-management, two key components of EQ. "Knowledge is knowing what to say, and
wisdom is understanding whether or not to say it," Starhawk, a writer and public speaker,
once stated. This is a useful teaching skill for managers to hone, since they should always be
mindful that they should not provide advise.
Observing and probing: A coach should be able to study their colleagues, pick up on
nonverbal indications, and ask questions without being intrusive. When a manager helps an
employee improve professionally, it is a particularly growth-oriented function.

Powerful questioning: To help employees reflect and gain insight, a manager on a coaching
journey will learn to ask probing questions at just the right moment and in just the right
context. Managers might be inclined to just tell workers what to do, as Forbes Coaches
Council member Barbara O'Malley put it. Instead, asking insightful questions may lead
workers to useful conclusions on their own. It may aid workers in embarking on own paths
of development.

Knowing Better the Strengths and Weaknesses of Team Members

Managers should have a deeper understanding of their team members' strengths and
development opportunities than is feasible via superficial observation and evaluation. The
manager may be better able to delegate tasks, spot promising team members, and get
everyone set up for success in the long run if they have this level of insight and
understanding. Forbes Coaches Council member Tameka Williamson remarked, "This
information becomes the power you need to strategically align your team in a manner that
fills up the gaps." Then they may be given the authority to make decisions and find solutions
on their own while still being guided by you.
Enhancing Self-Awareness
Managers who can also act as coaches aid their employees in developing a healthier sense
of self-awareness. The manager goes on an inner quest to learn more about themselves.
When a manager questions a member of their team, that person's mind goes through a
variety of ideas and emotions. The manager may increase their understanding of themselves
by drawing on their cerebral, psychological, and emotional resources to generate insightful
inquiries. Coaching has a profound impact on the development of the manager coach.

Learning From Team Members

A manager's role as coach does not need them to provide guidance or offer answers when
an employee is struggling. When a management assists an employee in solving a problem on
their own, the employee is more likely to provide a novel, creative approach to the problem
that the manager would never have considered. The manager may gain insight into the
coaching process and, in turn, have more faith in its efficacy if they go through with it. It also
makes it easier to assist the worker in becoming creative, effective, and productive. The goal
is to use the worker's knowledge and intellect in a manner that encourages him to think
creatively.

Building Stronger Relationships With Team Members

Building trust between a coach and player is essential for successful coaching. During the
coaching process, the connection between coach and coached becomes stronger, further
cementing the trust between them. When a manager actively listens to an employee
without passing judgement, the employee experiences a boost in self-esteem. Since they
take more responsibility for their work, empowered workers demand less oversight. They
have an imaginative outlook on the whole thing and give it their all as a result. A manager's
ability to connect with and inspire their team members depends on their ability to employ
coaching discussions rather than instruction or demands.
A Sense of Fulfillment
Managers who take on the role of coach get immense satisfaction from seeing the
development of their subordinates. Grace McCarthy gives the example of "coaching also
changed some underachievers into star performers" in her essay for the World Economic
Forum. One worker, for instance, who had previously been characterised as "extremely low
in self-confidence," gained the self-assurance to request for a promotion and eventually
become a very competent manager.

Bottom Line
Managers feel that they have to put in a lot of work for the sake of their employees and the
company, but they don't get anything in return. Managers may gain a lot from coaching
their team if they approach it wisely. In addition to emphasising the advantages for the
workers and the company, any business initiating a coaching project where managers are
required to train employees must ensure that these benefits are equally addressed. Ref 28

Trade Union
An organisation of workers who have come together to accomplish many common goals,
such as preserving the integrity of their trade, trying to improve safety standards, and
attaining better wages, benefits (such as holiday, health care, and retirement), and
employment conditions through the elevated bargaining power wielded by the founding of
a monopoly of the workers is known as a trade union (or a labour union in American
English). A trade union is often simply called a union. The official structure, head office, and
legal team services of trade unions are often financed by recurring payments or union dues.
Trade unions are also known as labour unions. Volunteers in the workforce are elected via
democratic processes to serve as delegates on the staff of the trade union representation in
the workplace. These delegates are known as "delegate staff."
Via an elected leadership and negotiating committee, the trade union negotiates labour
contracts (collective bargaining) with employers on behalf of union members (rank and file
members). Moreover, the trade union bargains with employers on behalf of union members
(rank and file members). The goal of "maintaining or enhancing the terms of their job" is the
one pursued by these groups or unions the vast majority of the time. This may involve the
negotiation of pay, work regulations, occupational health and safety standards, processes
for filing complaints, rules controlling the status of workers, including promotions, just cause
requirements for termination, and employment benefits.
Unions may organise a specific group of skilled employees (referred to as craft unionism), a
cross-section of workers from a variety of trades (referred to as general unionism), or they
might strive to organise all workers within a certain sector (industrial unionism). The
agreements that were negotiated by a union are obligatory not only on the employer and
the rank-and-file members of the union, but also, in certain situations, on those employees
who are not members of the union. Traditionally, trade unions have a constitution that
outlines the governance of their bargaining unit. Additionally, trade unions typically have
governance at various levels of government according to their sector that binds them legally
to their negotiations or the functioning of their organisation.
Trade unions had their beginnings in Great Britain and gained popularity around the globe
during the time period of the Industrial Revolution. Trade unions may be made up of
individual employees, professionals, those who have previously had a job, students,
apprentices, or even people who are now jobless.

A contemporary definition of a trade union was provided by the Australian Bureau of

Statistics. According to this definition, a trade union is "an organisation consisting
predominantly of employees, the main functions of which include the negotiation of rates of
pay and work conditions for its members."

R.A. In his book "Together We Stand" (1971), Leeson wrote:

The guild-craft tradition, which was handed down via journeymen's clubs and friendly
societies, was one perspective of the trade-union movement that vied for dominance in the
nineteenth century. The other view, which was in direct opposition to the guild-craft legacy,
was... the other being the expansionist and aggressive impulse to join all "working men and
women" in the sake of a "new order of things."

The Luddite riots occurred in the early 19th century and were a manifestation of industrial
militancy. During these riots, jobless workers destroyed labour saving equipment.

Trade unions can be traced back to Britain in the 18th century, when the rapidly expanding
industrial society that was taking place at the time drew women, children, rural workers,
and immigrants into the workforce in large numbers and in new roles. This was the time
when trade unions first came into existence. In the early stages of their existence, they were
met with significant resistance from employers and government organisations. During this
time period, unions and unionists were often tried under a variety of legislation pertaining
to the restriction of commerce and conspiracy. This pool of unskilled and semi-skilled labour
spontaneously formed in fits and turns during the beginnings of the movement, and it
would eventually prove to be a crucial venue for the growth of trade unions.

By the early 1810s, the first labour groups that brought together people working in a variety
of professions had been established. The General Union of Trades, often known as the
Philanthropic Society, was established in Manchester in 1818. It is possible that this
organisation was the first of its kind. The latter name was chosen in order to conceal the
true aim of the organisation at a period when trade unions were still illegal. Ref 29

Personnel Management
The administrative subfield known as "personnel management" focuses on recruiting new
workers and providing them with the training and opportunities they need to increase their
contribution to an organisation. It is often thought to be a sub-category of human resources
that focuses only on administration. This view is not universally accepted.
The Evolvement of Personnel Management
There are a variety of strategies for dealing with staff that have developed throughout the
course of time, as well as others, including the more recent strategies.

(a) Mechanical Approach towards Personnel

The argument that will be presented here is that, just like machines, men may likewise be
made more productive via the use of severe specialisation. The "factor-of-production idea"
is another name for this method of approaching the problem. It suggests that labour should
be categorised alongside capital and raw materials as an element of production, with the
goal of acquiring it at the lowest feasible cost and making the most of its potential
applications. The use of a mechanical method will often result in the formation of a variety
of management challenges, namely personnel problems.

(a) Paternalism Under the context of this strategy, management is expected to adopt a
paternal and guardian stance towards staff members. Management is not inherently
paternalistic just because they provide perks to its employees such as housing,
transportation, entertainment, and pensions. If a management team treats its workers in a
paternalistic manner, this may be inferred from both their mentality and the way in which
they carry out their responsibilities.

(c) Approach Based on the Social System Using this method, the organisation is seen as the
controlling authority despite the fact that it is functioning inside an open system. Workers
are seen as potential power sources, whose growth may be geared towards the
achievement of fundamental organisational objectives. The figure that follows
demonstrates that the group of employees is only one of many different groups that the
manager has to maintain relationships with.

source: Berkeley
This technique also sheds light on the many hats a person must wear throughout their
lifetime. The resulting impact on human behaviour, including role expectations, role
conflicts, and so on, is a direct consequence of this.

(d) Emerging Methodologies for Personnel Administration

According to BiICKER (1965), the primary purpose of the personnel department is to do a

"great balancing act." The management of personnel seeks to achieve a balance between
the demand for and supply of people by comparing the requirements of an organisation for
a particular set of experiences and skills with the availability of such experiences and skills
on the labour market. Everything that the personnel guy does has some kind of impact on
either the positive or negative side of the balance.

In the same spirit, MYERs (1970) discusses the 'counterbalancing' impact, which occurs
when personnel management counterbalances the focus that line management places on
output with an emphasis on human interactions. In addition, he explains that the people
expert functions as a "change agent" by interacting with the line manager in order to set the
circumstances for the simultaneous attainment of organisational and individual objectives.
As a change agent, the most important function of people is to ensure that the
organization's goals are met to the greatest extent possible by making the most efficient use
of its available human resources.

MEGGINSON (1967) places a strong emphasis on interaction, stating that the role of
management is to bring together human resources, material resources, and technological
advances into a congruent connection that will contribute to the development of the
organisation as well as society. He came up with the assumptions that are as follows:

1. The amount and quality of a company's human resources are directly proportionate
to the company's productivity and the profitability that results from that
production."

2. "The acknowledgement of, and promotion of, the human dignity of each individual
employee is directly correlated to the level of efficiency and effectiveness with which
companies are able to produce goods and services,"

3. "Education, training, and personal development are three of the most successful
ways to increase both the quantity and quality of available human resources."

Personnel Management Duties

• The process of hiring employees across many businesses, which may be carried out by a
single individual or a group of people. The resumes of potential applicants are compared
against checkbox lists, which are then used to make hiring decisions.

• Departments of Compensation and Benefits, which are in charge of establishing stringent

guidelines for Pay Grades and Pay Increases. For example, putting a cap on yearly raises of
no more than 10 percent and barring promotions of more than one wage grade would be
considered restrictive practises. The most essential thing is to maintain consistency
throughout.

• New employee orientation, which includes assisting workers in filling out the necessary
paperwork for their benefits, directing employees to the location of the break room, and
providing them with a copy of the employee handbook. The primary concern right now is
ensuring that all of the necessary documentation is correctly filled out and stored away.

Functions and Objectives of Personnel Management

The following is a list of the primary functions and objectives: The functions of personnel
management may typically be broken down into the following categories: planning,
organising, staffing, motivating, and controlling. The following table outlines the primary
functions and goals of the organisation as follows:

Principles of Personnel Management

In order to achieve high levels of performance, personnel management has always been
founded on a set of guiding principles. These principles evolve in response to changing
situations, which might include patterns of human behaviour. The following is a list of some
of the most well-known concepts that are also focused on practise.
a) People should be treated as whole people
b) employers should do everything they can to make workers feel valuable
c) fairness and justice
d) rewards should be earned and not merely given
(e) Workers should be given with necessary knowledge
(f) Correct evaluation of the strength and intellect of the personnel
(g) Equal remuneration for equal effort.
These concepts address all aspects of personnel acquisition, including training and suitable
compensation. Their thoughts, emotions, and experiences should all be given due
consideration. They should be made to feel assured, proud, and content with the services
they have provided and the benefits they have received. The atmosphere of caring and
sharing that permeates the area surrounding them is essential to their fruitful activities. The
word "fairness" ought to serve as the rallying cry for both camps. Instead of receiving gifts,
the staff members should be recognised for their hard work. It is essential that there be
effective development of the communication system between managers and workers, and
there should not be any extra concealment or suspicion present. There should be no
difference in pay at all between those who do the same work and those who do the same
amount of work. When it comes to compensation, equal labour should result in equal
remuneration. Moreover, discrimination based on gender must to be avoided. In a nutshell,
the employers need to do all they can to make their workers feel appreciated, pleased, and
content with the work that they do.

Role of Personnel Manager The human resources manager oversees all staff members. The
manager's responsibilities include both strategic planning and day-to-day operations. In a
nutshell, the job entails:

 When it comes to staffing, coordinating, and evaluating employees, the personnel

manager is a valuable resource for upper management.
 As a staff specialist, s/he provides guidance to the line manager on matters
pertaining to the workforce.
 As a sounding board for workers' worries both on and off the job.
 The personnel manager's role is to facilitate communication between the company's
employees and upper management.

What are Management Skills?

Skills in management refer to the qualities and capacities an executive has to carry out their
duties effectively. These are the skills necessary to carry out executive responsibilities in an
organisation, with an emphasis on maintaining stability and responding effectively to
unexpected challenges. Learning and experience are the best ways to hone one's
management chops. The skills help the manager to relate with their fellow co-workers and
know-how to deal well with their subordinates.

Effective management is crucial to the growth and development of any business. The
purpose and vision of a firm, or its business objectives, may be advanced by a manager who
cultivates excellent management abilities and who is able to overcome objections and
hurdles from inside and beyond the organisation.
Planning, decision-making, problem-solving, communication, delegation, and time
management are all essential components of effective management and leadership.
Successful managers tend to be strong leaders as well.
Managers are responsible for more than just leading; they must also guarantee that the
business as a whole is operating as efficiently and effectively as possible. Problems and
failure might ensue without such integration. Having strong management abilities is
important at every level of an organisation.
 

Types of Management Skills

American social and organisational psychologist Robert Katz identifies these as the three
most fundamental kinds of managerial abilities:
 
1. Technical Skills
Managers with strong technical abilities know how and when to use a wide range of
strategies to accomplish their goals. These abilities include not only the ability to operate
machines and software, manufacturing tools and pieces of equipment, but also the ability to
increase sales, develop various sorts of goods, and advertise the products and services.
 
2. Conceptual Skills
This refers to managers' abilities in areas such as conceptualization and abstract reasoning.
The manager has comprehensive vision, is adept at analysis and diagnosis, and is open to
new ideas. This enables the manager to foresee potential problems that may arise in the
department or the company as a whole.
 
3. Human or Interpersonal Skills
Managers' capacity to communicate, collaborate, and get along with others is reflected in
their "human" or "interpersonal" abilities. These abilities provide managers with the tools
they need to maximise the productivity of their staff and drive the organisation forward.
 
 
Examples of Management Skills
The following are the six most important management skills that each manager should
have: 
1. Planning
The capacity to plan, or coordinate operations according to predetermined standards and
constraints such as time, money, and manpower, is crucial to the success of any enterprise.
It's also the procedure of coming up with a plan of action, or a strategy, to use available
means to accomplish a desired end.
The planning process involves figuring out what needs to be done and when, coming up
with a strategy to get there, and mapping out the steps to take. Without a well-thought-out
strategy, progress will be slow.
 
2. Communication
It is very necessary for a manager to have excellent communication abilities. It is able to
assess how effectively knowledge is exchanged throughout a whole team, which is critical to
ensure that the group functions as one cohesive workforce. How effectively a manager is
able to communicate with the rest of his or her team can affect how well processes will be
followed, how easily activities can be accomplished, and ultimately how successful a
business will be.
The sharing of information among employees is what we mean when we talk about
communication inside a company. This might be done verbally or in writing, either vertically
or horizontally. It could also be official or casual. The organisation is able to run more
efficiently as a result of this. The ability of a manager in an organisation to work with the
team, avert disputes, and address problems in a proactive way as they emerge is made
possible by well defined communication channels in the company. A manager who is able to
communicate effectively may build strong relationships with their staff and is more likely to
easily accomplish the goals and objectives that have been established for the organisation.
 
3. Decision-making
Making decisions is another important ability for those in management positions. The ability
to make judgements is essential to a manager's performance, because managers are
responsible for making a large number of decisions. The accomplishments of the
organisation are directly correlated to the quality of the choices that are made. Yet, failure
or poor performance may be the result of judgements that are poor or awful.
It is necessary to make judgements that are both clear and correct in order to ensure the
efficient and successful operation of the company. A manager is someone who must be held
responsible for every choice that they make and must also be prepared to accept
responsibility for the outcomes of those actions. It is essential for a competent manager to
have strong decision-making abilities since this talent directly correlates to success in
accomplishing organisational goals.
4. Delegation
Another essential managerial ability is the ability to delegate tasks. The process of
entrusting other workers or subordinates with work-related responsibilities and/or
authority is referred to as delegation. It is the process of permitting your responsibilities or
the tasks of your workers to be reassigned or reallocated to other employees based on the
workloads that are currently being handled by the organisation. A manager who has strong
delegation abilities is able to reassign work in a manner that is both effective and efficient.
This redistributes the work so that it may be completed in a timely manner and gives the
appropriate staff the power to carry it out. When delegating responsibilities is done
correctly, it may assist make the process of completing tasks more efficient.
The management may save time by delegating tasks, boosting productivity and encouraging
people to take responsibility for their work. If a manager is going to achieve the levels of
productivity that are expected of them, they need to have strong delegation skills.
5. Problem-solving
Another vital talent is the ability to solve problems. A successful manager has to be able to
address and find solutions to the many issues that might crop up throughout a regular
workday. In management, finding the best solution to an issue requires first recognising the
problem, then treating the problem, and then finding the best solution. It is the capacity to
find solutions to problems in spite of the fact that the situations at hand are unfavourable.
The ability of a manager to solve problems effectively instills trust in the abilities of that
management among their direct reports.
 
6. Motivating
Another talent that is essential to have in an organisation is the capacity to inspire others.
Motivating workers or other stakeholders may assist in eliciting the action or response that
is sought from those individuals. Managers may take a wide variety of approaches to
employee motivation, and selecting the most effective ones often depends on factors such
as the culture of the business and the team, the personalities of the team members, and
other factors. A manager may primarily draw from two distinct wells of inspiration to
motivate their staff. There are two types of motivation: intrinsic and extrinsic.

Bottom Line
Management skills are a set of talents that include things like business planning, decision-
making, problem-solving, communication, delegating, and time management. These are just
a few of the abilities that make up management skills. No matter what level a professional is
at, having strong management abilities will help them stand out from the competition and
perform at a higher level than their peers. These abilities are necessary for senior
management positions to ensure the smooth operation of a company and the successful
completion of planned business goals. Ref 31

Extrinsic motivation originates from the environment, and intrinsic motivation comes from
inside an individual. When you are intrinsically driven, you participate in an activity for no
reason other than the fact that you love it and get some level of personal fulfilment. When
you are driven by extrinsic factors, such as a reward from the outside world, you will act in a
certain way.

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