Unit-1: Introduction to Management 1.

UNIT – I
INTRODUCTION TO MANAGEMENT

CONCEPT OF MANAGEMENT
Management is what managers do. It refers to the people at the top level in the
organisation. It is often viewed as manoeuvring, i.e. doing something cleverly to change a
situation and make things happen the way you want them to. It has drawn the concepts and
principles from a number of disciplines such as economics, sociology, psychology,
anthropology, and statistics and so on. There are a variety of views about the term
management. Traditionally, the term "management" refers to the activities (and often the
group of people) involved in the four general functions (planning, organising, leading,
controlling).
Another common view is that "management" is getting things done through others. To
most employees, the term "management" probably means the group of people (executives and
other managers) who are primarily responsible for making decisions in the organisation. In
non-profit organisations, the term management might refer to all or any of the activities of the
board, executive director and/or program directors.

Human Physical
Resources resources
Effective and
Managerial efficient Goals
activities utilization

Financial
Resources Information
resources
In general, management is a set of activities directed at the efficient and effective
utilization of resources in the pursuit of one or more goals. Different scholars from different
disciplines have expressed their views on management. For example, economists have treated
management as a factor of production; sociologists have treated it as a class or group of
persons; practitioners have treated it as a process comprising different activities.

Definition:
1. According to Harold Koontz, “Management is an art of getting things done through
and with the people in formally organised groups. It is an art of creating an
environment in which people can perform and individuals and can co-operate towards
attainment of group goals”.
2. According to F.W. Taylor, “Management is an art of knowing what to do when to do
and see that it is done in the best and cheapest way”.
3. According to Henry Fayol, “To manage is to forecast and to plan, to organise to
command, to coordinate and to control”.
Therefore, good management includes both being effective and efficient. Being
efficient means doing the task correctly at least possible cost with minimum wastage of
resources. Management is a process involving planning, organising, staffing, directing and
controlling human efforts to achieve stated objectives in an organisation.

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IMPORTANCE OF MANAGEMENT
Management has been important to the daily lives of people and to the organisations.
The importance of management may be traced in the following contexts:
1. Achievement of group goals: A human group consists of several persons, each
specializing in doing a part of the total task. Each person may be working efficiently,
but the group as a whole cannot realize its objectives unless there are mutual
cooperation and coordination among them. Management creates teamwork and
coordination in the group.
2. Optimum utilisation of resources: Managers forecast the need for materials,
machinery, money and manpower. They ensure that the organisation has adequate
resources and at the same time does not have idle resources.
3. Minimisation of Cost: In the modern era of cut-throat competition no business can
succeed until it is able to supply the required goods and services at the lowest possible
cost per unit. Management directs the day-to-day operations in such a way that all
wastages are avoided.
4. Survival and Growth: An enterprise has to adapt itself to the changing demands of
the market and society. It takes steps in advance to meet the challenges of changing
the environment. Managers enable the enterprise to minimize the risks and maximize
the benefits of opportunities.
5. Generation of Employment: By setting up and expanding business enterprises,
managers create jobs for the people. Managers also create such an environment that
people working in an enterprise can get job satisfaction and happiness.
6. Continuity in the organisation: Continuity is very important in the organisation. It
is only management that keeps the organisation continuing. Where there are no proper
guidelines for decision-making continuity cannot be guaranteed.
7. Development of the Nation: Efficient management is equally important at the
national level. The development of a country largely depends on the quality of the
management of its resources. By producing wealth, management increases the
national income and living standards of people.

NATURE OF MANAGEMENT
The study and application of management techniques in managing the affairs of the
organisation have changed its nature over a period of time. The following points will describe
the nature of management:
1. Management is a Social process: Management is done by people, through people
and for people. Social process refers to a series of activities that are performed in
society. These activities are carried out by administrators, politicians, economists,
doctors, lawyers, parents, etc.
2. Management is goal-oriented: Management involves achieving certain goals; it has
no justification to exist without goals. The basic goal of management is to ensure
efficiency and economy in the utilisation of human, physical and financial resources.
3. Management is Universal: Management is an essential element of every organised
activity irrespective of the size or type of activity. All types of organisations require
management. Managers at all levels perform the same basic functions.
4. Management is a continuous process: Management is a dynamic and an on-going
process. The cycle of management continues to operate so long as there is organised
action for the achievement of group goals.

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5. Management is a Group Activity: Management is very much less concerned with

the individual’s efforts. It is more concerned with groups. It involves the use of group
effort to achieve the predetermined goal of management of ABC & Co. is good refers
to a group of persons managing the enterprise.
6. Relative, Not Absolute Principles: Management principles are relative, not absolute,
and they should be applied according to the need of the organisation. A particular
management principle has different strengths in different conditions. Therefore,
principles should be applied according to the prevailing conditions.
7. Management is Multidisciplinary: Management has been developed as a separate
discipline, but it draws knowledge and concepts from various disciplines like
psychology, sociology, economics, statistics, operations research, etc. Management
integrates the idea and concepts taken from these disciplines and presents newer
concepts which can be put into practice for managing the organisations.
8. Management is Intangible: Management is an unseen or invisible force. It cannot be
seen but its presence can be felt everywhere in the form of results. However, the
managers who perform the function are tangible or visible.
9. Management is a Profession: A Profession refers to a vocation or a branch of
advanced learning such as engineering or medicine. Management helps to carry out
every profession in a scientific manner.
10. Management is an art as well as science: An art is characterized by practical
knowledge, personal creativity and skill. Science is a systematized body of knowledge
of facts. It involves basic principles, which are capable of universal application.

FUNCTIONS OF MANAGEMENT
Management is a process of the quality of both physical as well as human resources to
seek objectives. The elements or activities which are performed in this process are known as
functions of management. Various authors have classified these functions differently:
Writers Management Functions
Henry Fayol Planning, Organising, Commanding, Coordinating, Controlling

Luther Gullick POSDCORD- Planning, Organising, Staffing, Directing

Coordinating, Reporting, Directing

Koontz Planning, Organising, Staffing, Leading, Controlling

Thus, the functions of management may be classified into five categories: Planning,
Organising, Staffing, Directing (leadership, motivation, communication, coordination)and
Controlling.

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PLANNING
The first function of the manager is planning. It is also the foremost and essential
function. Planning defines the goals and objectives to be reached in the plan period. It also
consists of policies, procedures, methods, budgets, strategy and programmes that are needed
to achieve the goals set. Decision-making is the most important and integral part of planning.
Planning is the most basic and pervasive process involved in managing. It means deciding in
advance what actions to take and when and how to take them. Planning is needed, firstly for
committing and allocating the organisation’s limited resources towards achieving its
objectives in the best possible manner and, secondly for anticipating future opportunities and
problems.
Planning is putting down in black and white the actions which a manager intends to
take. Each manager is involved in planning though the scope and character may vary with the
level of the manager. Planning involves the determination of objectives; forecasting;
formulation of policies and programmes; and preparation of schedules.
The steps generally involved in the planning are as follows:
1. Establishing verifiable goals or set of goals to be achieved
2. Establishing planning premises
3. Deciding the planning period
4. Finding an alternative course of action
5. Evaluating and selecting a course of action
6. Developing derivative plans
7. Measuring and controlling the progress

ORGANISING
Organising is to give a proper shape to the structure that should execute the plan
smoothly to achieve its success. It is the function of putting together different parts forming
an enterprise and makes it an organic whole to enable it to carry out defined operations.
Various activities to fulfil the goals have to be grouped and these are to be assigned to people
in-groups or departments. The authority, responsibility, accountability needed at each level to
execute the plan is to be defined and delegated.
Organising simply can be defined as a process that results in organisational structure
through departmentalization, linking departments together, defining authority and
responsibility and prescribing authority relationship sub-activities. The organising function
deals with all those activities that result in the formal assignment of tasks and authority and
coordination of effort. The supervisor staffs the work unit, trains employees, secures
resources and empowers the workgroup into a productive team.
The process of organising consists of the following steps:
1. Determining and defining the activities required for the achievement of planned goals;
2. Grouping the activities into proper and convenient units;
3. Assigning the duties and activities to specific positions and people
4. Delegating authority to those positions and people;
5. Defining and fixing responsibility for performance; and
6. Establishing horizontal and vertical authority-responsibility relationship throughout
the organisation.

STAFFING
It is the function of manning the organisation structure and keeping it manned.
Staffing has assumed greater importance in recent years due to the advancement of
technology, increase in size of the business, the complexity of human behaviour etc. The
main purpose of staffing is to put the right man on the right job i.e. square pegs in square

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holes and round pegs in round holes.

The staffing function involves identifying/selecting the right person for executing
each task planned. By carrying the functions of organising and staffing the "plan" is
transformed from a document level to the operational stage. Having found the right
candidate, it is equally important that you are able to retain him. Among other things,
motivation and leadership provided by the top management of an organisation also play an
important role.
The staffing function includes all the jobs connected with:
Manpower planning
Recruitment; selection & placement
Training & development
Remuneration, performance appraisal
Promotions & transfer

DIRECTING
It is that part of the managerial function which actuates the organisational methods to
work efficiently for the achievement of organisational purposes. It is considered life- a spark
of the enterprise which sets it in motion the action of people because planning, organising and
staffing are the mere preparations for doing the work. The direction is that inert-personnel
aspect of management which deals directly with influencing, guiding, supervising, motivating
sub-ordinate for the achievement of organisational goals.
The function of directing embraces the following activities:
a. Issuing orders and instructions.
b. Supervising (overseeing) people at work.
c. Motivation, i.e. creating the willingness to work for certain objectives.
d. Communication, i.e. establishing an understanding with employees regarding plans
and their implementation, and
e. Leadership or influencing the behaviour of employees.
Direction has the following elements:
1. Supervision: implies overseeing the work of subordinates by their superiors. It is the
act of watching & directing work & workers.
2. Motivation: means inspiring, stimulating or encouraging the sub-ordinates with zeal
to work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
3. Leadership: may be defined as a process by which manager guides and influences
the work of subordinates in the desired direction.
4. Communications: is the process of passing information, experience, opinion etc
from one person to another. It is a bridge of understanding.

CONTROLLING
Control is the tool for course regulation as the organisation marches ahead and
correcting it when it diverts off-course. The results of the activity must conform to the laid
down standards and all variations should be analyzed and root cause identified. Controlling
includes an ongoing collection of feedback, and monitoring and adjustment of systems,
processes and structures accordingly. Examples include the use of financial controls, policies
and procedures, performance management processes, measures to avoid risks etc.
Planning and controlling go hand in hand. There can be no control without a plan and
plans cannot be successfully implemented in the absence of controls. Controls provide a
means of checking the progress of the plans and correcting any deviations that may occur
along the way. It implies measurement of accomplishment against the standards and

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correction of deviation if any to ensure achievement of organisational goals. The purpose of

controlling is to ensure that everything occurs in conformities with the standards. Controlling
is the measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being accomplished.
The process of controlling involves the following steps:
1. establishing standards for measuring work performance;
2. measurement of actual performance and comparing it with the standards;
3. finding variances between the two and see the reasons; and
4. taking corrective action for rectifying deviations so as to ensure attainment of
objectives

MANAGEMENT LEVELS
Level of Management refers to the categories or layers of managerial positions in an
organisation. The level of management determines the amount of authority and status of the
person occupying the position at that level. Managerial Hierarchy consists of:

Top-level Management or Senior Management:

These include board of Directors, CEO’s they comprise small groups but are
responsible for overall management they formulate plans, decide objectives & communicate
to middle-level management.
1. Require extensive knowledge of management roles and skills.
2. They have to be aware of external factors such as markets and government policies.
3. Their decisions are made using analytic, directive, conceptual and behavioural/
participative processes.
4. They are responsible for strategic decisions.
5. They have to chalk out the plan and see that plan may be effective in the future.

Middle Level of Management:

The branch managers and departmental managers constitute middle level. They are
responsible for the top management for the functioning of their department. In a small
organisation, there is only one layer of the middle level of management but in big enterprises,
there may be senior and junior middle-level management. Their role can be emphasized as:
1. Executing plans of the organisation in accordance with the policies and directives of
the top management.
2. They participate in employment & training of lower-level management.
3. They interpret and explain policies of top-level management to lower level.
4. They are responsible for coordinating the activities within the division or department.

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5. They evaluate the performance of employees and send the reports and other important
data to top-level management.

Lower Level of Management:

The lower level is also known as supervisory/operative level of management. It
consists of supervisors, foreman, section officers, superintendent, workers, etc. They are
concerned with the direction and controlling function of management. Their activities
include:
1. Assigning of jobs and tasks to various workers.
2. They guide and instruct workers for day to day activities.
3. They are responsible for the quality as well as quantity of production.
4. They communicate workers problems, suggestions, and recommendatory appeals,etc.,
to a higher level, and higher-level goals & objectives to the workers.
5. They arrange necessary materials, machines, tools etc for getting the things done.

EVALUATION OF MANAGEMENT THOUGHT

From the start of the 19th century until the 20th century, managers and scholars have
formed a theoretical framework to explain what they believe to be good practices of
management. Their efforts led to different classes of perspectives on management and each
perspective is based on different assumptions towards the objectives of the organisation and
human behaviour.

The schools of management thoughts are classified as follows:

1. Classical Perspective: This perspective existed in the 19th century and early 20th century.
It focuses on the rational and scientific approaches to the study of management and on
finding ways to mould an organisation to become more efficient. Classical management
theory can be divided into three perspectives distinguished by the issues and problems
that they address.
• Scientific management emerged primarily among American scholars and
managers and focused on issues involved in the management of work and workers.
The theory of scientific management developed by F.W.Taylor and others accepted
the empirical methods for arriving at conclusions.
• Administrative theory (also called Functional approach) evolved from a concern
by both European and American academicians and managers with the nature and
management of the total organisation. Issues and problems that they sought to
address focused on the technical efficiency of the organisation. Other thinkers like
Henry Fayol following the functional approach emphasized on the importance of

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managerial functions and principles for universal application.

• Bureaucracy theory was developed by the German sociologist, Max Weber, which
portrays the structure and design of organisation characterized by a hierarchy of
authority, formalized rules and regulations that serve to guide the coordinated
functioning of an organisation.

2. Neo-Classical or Human Relations Perspective: The neoclassical writers tried to

remove the deficiencies of the classical school and suggested improvements for good
human relations in the organisation. Human relation is frequently used as a general term
to describe the ways in which managers interact with their employees. When ‘employee
management’ stimulates more and better work, the organisation has effective human
relations, when morale and efficiency deteriorate, its human relations are said to be
ineffective. The human relations approach arose from early attempts to systematically
discover the social and psychological factors that would create effective human relations.
Their propositions are based on human relations studies and motivational theories such as
Hawthorne experiments, Maslow’s need hierarchy theory, etc.

3. Quantitative Management of Behavioural Sciences Perspective: The behavioural

school emerged partly because the classical approach did not achieve sufficient
production, efficiency and workplace harmony. People did not always follow predicted or
expected patterns of behaviour. Thus, there was increased interest in helping managers
deal more effectively with the people side of their organisations. Several theorists tried to
strengthen neoclassical management theory with the insights of sociology and
psychology. The behavioural science perspective believes that it is difficult to understand
the sociology of a group separate from the psychology of the individuals comprising it
and the anthropology of the culture within which it exists.

4. Contemporary or Modern Perspective: The modem management thinkers define an

organisation as a system and also consider the impact of the environment on the
effectiveness of the organisation. The organisation is viewed as adaptive systems which
must in order to survive to adjust to environmental changes. As a result, two approaches
have gained prominence after the 1960s, which are: Systems approach and Contingency
approach.

SCIENTIFIC MANAGEMENT
The classical scientific branch arose because of the need to increase productivity and
efficiency. The emphasis was on trying to find the best way to get the most work done by
examining how the work process was actually accomplished and by scrutinizing the skills of
the workforce.
The concept of scientific management was introduced by Frederick Winslow Taylor
in the USA at the beginning of the 20th century (1856-1915). Since Taylor has put the
emphasis on solving managerial problems in a scientific way, often, he is called as Father of
Scientific Management and his contributions as the principles of scientific management. He
also developed a theory of organisations, which has been largely accepted by subsequent
Management Philosophers.

Definition:
“Scientific management is concerned with knowing exactly what you want to do and
then see in that they do it in the best and cheapest way.”

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Taylor was concerned with the problems of increasing labour productivity without
putting under strain or workers. Scientific management implies the application of scientific
methods of study and analysis of the problems of management. On the basis of experiments,
he published many papers and books and all his contributions were compiled in his book
“Scientific Management”.
His contributions are divided into two parts:
Principles of scientific management.
Elements and tools of scientific management.

Principles of Scientific Management:

Taylor has given certain basic principles of scientific management.
1) Replacing rule of thumb with science: It requires scientific study and analysis of
each element of a job in order to replace the old rule of thumb approach development
of a science for each element of a man’s job requires that decisions should be made on
the basis of facts rather than opinions and beliefs.
2) Harmony in group action: Taylor has pointed out that attempts should be made to
obtain harmony in group action rather than discord. Group harmony suggests that
there should be a mutual give and take a situation and proper understanding so that
group as a whole contributes to the maximum.
3) Co-operation: Scientific management involves achieving cooperation rather than
chaotic individualism. It is based on mutual confidence, co-operation and goodwill.
Co-operation between management and workers can be developed through mutual
understanding and a change in thinking.
4) Maximum output: Scientific management involves a continuous increase in
production and productivity instead of restricted production either by management or
by the worker. This can be possible when efficiency and output are maximized.
Maximum output and optimum utilization of resources bring profits.
5) Development of workers: All workers should be developed to the fullest extent
possible for their own and for the company’s highest prosperity. Training should be
provided to the workers to keep them fully fit according to the requirement of new
methods of working which may be different from non-scientific methods.

Elements and Tools of Scientific Management:

1. Separation of planning & doing: Taylor emphasized the separation of planning
aspect from the actual doing of the work. In other words, planning should be left to
the supervisor and the worker should concentrate only on operational work.
2. Functional foremanship: Taylor introduced the concept of functional foremanship
based on the specialisation of functions. In this system, eight persons are involved to
direct the activities of workers. Out of these four persons are concerned with planning
viz., route clerk, instruction card clerk, time and cost clerk and disciplinarian. The
remaining four persons are concerned with doing aspect of the job, viz., speed boss,
inspector, gang boss and maintenance foreman.
Work Shop Manager

Planning In charge Production In charge

Route Time and Instruction Disciplinar Gang Route Inspecto Maintenance

Clerk cost clerk Card clerk ian Boss Boss r Foreman

Worker
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3. Standardisation: It is a process of fixing well thought out and tested standards of

norms with a view to minimising the efficiency of work. It should be maintained in
respect of instruments and tools, a period of work, amount of work, working
conditions, cost of production, etc.
4. Selection and Training: Taylor has suggested that workers should be selected on
scientific basis taking into account their education, work experience, aptitude,
physical strength, etc. A worker should be given work for which he is physically and
technically most suitable. Apart from selection, proper training should be provided to
workers to make them more effective and efficient.
5. Financial Incentives: Financial incentives can motivate workers to put in their
maximum efforts. If provisions exist to earn higher wages by putting in extra effort,
workers will be motivated to earn more. According to this scheme, a worker who
completes the normal work gets wages at a higher rate per piece and one who does not
complete gets at a lower rate.
6. Economy: While applying scientific management, not only scientific and technical
aspects should be considered but adequate consideration should be given to economy
and profit. The economy and profit can be achieved by making the resources more
productive as well as by eliminating the wastages.
7. Mental Revolution: Scientific management depends on the mutual co-operation
between management and workers. For this co-operation, there should be a mental
change in both parties from conflict to co-operation.

CRITICISM:
Scientific management ignored the human side of the organisation. Taylor and his
disciples were called "Efficiency Experts" because they concentrated attention on improving
the efficiency of workers and machines. Scientific management is therefore restricted in
scope as a theory of Industrial Engineering or Industrial Management, rather than a general
theory of management. Although it is accepted that scientific management enables the
management to put resources to its best possible use and manner, yet it has not been spared
of severe criticism.
Employer’s Viewpoint:
1. More Expensive: Scientific management is a costly system and a huge investment is
required in the establishment of planning dept., standardization, work-study, training
of workers. It may be beyond the reach of small firms.
2. Time Consuming: Scientific management requires mental revision and complete
reorganising of the organisation. A lot of time is required for work, study
standardization & specialization.
Workers Viewpoint:
1. Unemployment: Workers feel that management reduces employment opportunities
through replacement of men by machines and by increasing human productivity
fewer workers are needed to do work leading to chucking out from their jobs.
2. Exploitation: Workers feel they are exploited as they are not given a due share in
increasing profits which is due to their increased productivity. Wages do not rise in
proportion to the rising in production. Wage payment creates uncertainty &
insecurity.
3. Monotony: Due to excessive specialization the workers are not able to take initiative
on their own. Their status is reduced to being mere cogs in a wheel. Jobs become dull.

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Workers lose interest in jobs and derive little pleasure from work.
4. Weakening of Trade Union: Everything is fixed & predetermined by management.
So it leaves no room for trade unions to bargain as everything is standardized,
standard output, standard working conditions, standard time etc.
5. Over speeding: The scientific management lays standard output, time so they have to
rush up and finish the work in time. The workers speed up to that standard output, so
scientific management drives the workers to rush towards output and finish work in
standard time.

ADMINISTRATIVE/MODERN OPERATIONAL MANAGEMENT

The administrative theory focuses on the total organisation and attempts to develop
principles that will direct managers to more efficient activities. Administrative theorists
looked at productivity improvements from the "top-down", as distinguished from the
Scientific Approach of Taylor, who reorganised from "bottom-up". Administrative theorists
developed general guidelines on how to formalize organisational structures and relationships.
Henri Fayol(1841-1925) was a French mining engineer who spent many of his later
years as an executive for a French coal and iron combine. In 1916, as director of the
company, Fayol penned the book General and Industrial Management. In this book, Fayol
classified the study of management into several functional areas which are still commonly
used in executive training and corporate development programs. The functional areas
identified by Fayol are planning, organising, commanding, coordinating, and controlling. His
contributions are divided into the following categories:

According to Fayol the following is the list of qualities required in a manager:

Physical – includes Health, Vigor and address.
Mental – includes the ability to understand and learn, judgment, and capability.
Moral – includes energy, firmness, initiative, loyalty, etc.
Educational – includes qualifications.
Technical - peculiar to the function being performed.
Experience – knowledge in the related field.

Organisational Activities:
He emphasised the role of administrative management and concluded that all
activities that occur in business organisations could be divided into six main groups.
1. Technical - related to production or manufacturing.
2. Commercial – includes buying, selling and exchange.
3. Financial – includes a search for capital and its optimum use.
4. Security-related to the protection of property and person.
5. Accounting – includes record-keeping, costing and statistics.
6. Managerial – includes planning, organising, commanding, coordinating and
controlling).
He concluded that the six groups of activities are interdependent and that it is the role
of management to ensure all six activities work smoothly to achieve the goals of an
enterprise.

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General Principles of Management:

Henry Fayol has given 14 general principles of management:
1. Division of work: It is helpful to take advantage of specialization. Here, the work is
divided among the members of the group based on the employee’s skills and talents.
2. Authority and Responsibility: Fayol finds authority as a continuation of official and
personal factors. Official authority is derived from the manager’s position and
personal authority is derived from personal qualities such as intelligence, experience,
moral worth, past services, etc., Responsibility arises out of assignment of activity.
3. Discipline: All the personnel serving in an organisation should be disciplined.
Discipline is obedience, application, behaviour and outward mark of respect shown by
employees.
4. Unity of Command: Unity of command means that a person should get orders from
only one superior. Fayol has considered the unity of command as an important aspect
of managing an organisation.
5. Unity of Direction: According to this principle, each group of activities with the
same objective must have one head and one plan. Unity of direction provides better
coordination among various activities to be undertaken by an organisation.
6. Subordination of individual interest to general interest: Individual interest must be
subordinate to general interest when there is a conflict between the two. However,
factors like ambition, laziness, weakness, etc., tend to reduce the importance of
general interest. Therefore, superiors should set an example in fairness and goodness.
7. Remuneration to Personnel: Remuneration to employees should be fair and provide
maximum possible satisfaction to employees and employers.
8. Centralisation of Authority: Authority is to be centralised when decision-making
powers are retained at the top level. The degree of centralization or decentralization is
determined by the needs of the company.
9. Scalar Chain: There should be a scalar chain of authority and of communication
ranging from the highest to the lowest. It suggests that each communication going up
or coming down must flow through each position in the line of authority. It can be
short-circuited only in special circumstances. The scalar chain can be presented as
follows:
10. Order: This is a principle relating to the arrangement of things and people. In the
social order, there should be the right man in the right place.
11. Equity: Equity is the combination of justice and kindness. Equity in treatment and
behaviour is liked by everyone and it brings loyalty to the organisation.
12. Stability of tenure: No employee should be removed or transferred within a short
time. There should be reasonable security of jobs. Stability of tenure is essential to get
an employee accustomed to new work and succeeding in doing it well.
13. Initiative: Within the limits of authority and discipline, managers should encourage
their employees for taking initiative. The initiative is concerned with thinking out and
execution of a plan. The initiative increases zeal and energy on the part of human
beings.
14. Esprit de corps: It is the principle of ‘union is strength’ and extension of the unity of
command for establishing teamwork. The manager should encourage esprit de corps
among his employees.
Until today, his principles remain important as they continue to have a significant
impact on current managerial thinking. Fayol's main contribution was the idea that
management was not a talent related to genetic hereditary, but a skill that could be taught. He
created a system of ideas that could be applied to many areas of management and laid down
basic rules for managing large organisations.

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MOTIVATION
Motivation is the process of channelling a person's inner drives so that he wants to
accomplish the goals of the organisation. Motivation concern itself with the will to work. It
seeks to know the incentives for work and tries to find out the ways and means whereby their
realization can be helped and encouraged. Managers, by definition, are required to work with
and through people, so they must gain at least some understanding of the forces that will
motivate the people they are to manage. People are complex and they are uniquely different.
What motivates one person may not motivate another. Most successful managers have
learned to understand the concept of human motivation and are able to use that understanding
to achieve higher standards of subordinate work performance.
"Motivation" is a Latin word, meaning "to move". Human motives are internalised
goals within individuals. Motivation may be defined as those forces that cause people to
behave in certain ways. Motivation encompasses all those pressures and influences that
trigger, channel, and sustain human behaviour. Most successful managers have learned to
understand the concept of human motivation and are able to use that understanding to achieve
higher standards of subordinate work performance.
• Motivation has been defined by Michael J Juicus as "the act of stimulating someone
or oneself to get a desired course of action".
• In the words of Lewis Allen, "Motivation is the work a manager performs to inspire,
encourage and impel people to take required action".
• According to Koontz and O'Donnell, "Motivation is a general term applying to the
entire class of drives, needs, wishes and similar forces".

CHARACTERISTICS OF MOTIVATION
Psychologists generally agree that all behaviour is motivated and that people have
reasonsfor doing the things they do or for behaving in the manner that they do. Motivating is
thework a manager performs to inspire, encourage and impel people to take required
action.The process of motivation is characterized by the following:
1. Motivation is an Internal Feeling: Motivation is a psychological phenomenon which
generates in the mind of an individualthe feeling that he lacks certain things and needs
those things. Motivation is a forcewithin an individual that drives him to behave in a
certain way.
2. Motivation is Related to Needs:Needs are deficiencies which are created whenever
there is a physiological orpsychological imbalance. In order to motivate a person, we
have to understand his needsthat call for satisfaction.
3. Motivation Produces Goal-Directed Behaviour:Goals are anything which will
alleviate a need and reduce a drive. An individual's behaviouris directed towards a
goal.
4. Motivation can be either Positive or Negative:Positive or incentive motivation is
generally based on reward. Positivemotivation is a process of attempting to influence
others to do your will throughthepossibility of gain or reward.Negative or fear
motivation is based on force and fear. Fear causes persons to act in acertain way
because they are afraid of the consequences if they don't.

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IMPORTANCE OF MOTIVATION
1. High level of performance: It is the duty of every manager to ensure that
theemployees have a high degree of motivation. He should offer monetary and non-
monetaryincentives. Highly motivated workers would be regular for work and have
asenseof belonging for the organisation. Quality of product will be improved,
wastagewillbe minimum, increase in productivity,and performance level willbehigh.
2. Low employee turnover and absenteeism: Employee turnover and absenteeism
arecaused due to the low level of motivation on the part of managers. When
dissatisfaction isincreased employees do not enjoy the work assigned to them.
Therefore, there is atendency for absenteeism. The workers hunt for an alternative job
and leave the organisationwhenever they get an opportunity.
3. Acceptance of organisation change: Management must continuously scan
theexternal and the internal environment. There has been a great impact. Social
changeand technology evolution on the motivation level of employees. The social
change increasesaspirations of workers and puts additional demand on the
organisation, which mustbe considered positively so that conducing working
environment is created.
4. Organisational image: Employees are the mirrors of any organisation.
Managersmust lay down high-performance standards coupled with high monetary and
nonmonetaryrewards. Training& development programmes should be regularly
organizedand employee skill improved. It will have a positive impact on the
employees andtheimage of the organisation will be improved.

TYPES OF MOTIVATION
If a manager wants to get work done by his employees, he may either hold out a
promise of a reward (positive motivation) or he may instil fear (negative motivation). Both
thesetypes are widely used by management.
Positive or Incentive Motivation
This type of motivation is generally based on reward. Positive motivation involves the
possibility of increased motive satisfaction. According to Flippo - "Positive motivation is a
process of attempting to influence others to do your will through the possibility of gainor
reward". Incentive motivation is the "pull" mechanism. The receipt of awards, duerecognition
and praise for work-well done definitely lead to good team spirit, co-operationand a feeling
of happiness.A positive motivation includes:
• Praise and credit for work done
• Wages and Salaries
• Appreciation
• A sincere interest in subordinates as individuals
• Delegation of authority and responsibility

Negative or Fear Motivation

This type of motivation is based on force and fear. Fear causes persons to act in
acertain way because they fear the consequences. Negative motivation involves thepossibility
of decreased motive satisfaction. It is a "push" mechanism.The imposition of punishment
frequently results in frustration among those punished,leading to the development of
maladaptive behaviour. It also creates a hostile state ofmind and an unfavourable attitude to

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 Unit-1: Introduction to Management 1.15

the job. However, there is no management whichhas not used negative motivation at some
time or the other.

MAYO’S HAWTHORNE EXPERIMENTS

The human relations approach was born out of a reaction to the classical approach.
For the first time an intensive and systematic analysis of human factor in organisations was
made in the form of Hawthorne experiments.To investigate the relationship between
productivity and physical working conditions, a team of four members George Elton mayo,
Whitehead, Roethlisberger and William Dickson was introduced by the company in
Hawthorne plant. These experiments are often referred to as the Hawthorne experiments or
Hawthorne studies as they took place at the Western Electric Company in Chicago.
They conducted various researches in four phases:
1. Experiments to determine the effects of changes in illuminations on productivity.
Illumination experiments (1924-27).
2. Experiments to determine the effects of changes in hours and other working
conditions on productivity. (Relay assembly test room experiments 1927-28).
3. Mass interviewing programme (1928-1930).
4. Determination and analysis of social organisation at work (Bank wiring observation
room experiments 1931-32).

Experiment Results:
After analyzing the results from the Hawthorne experiments Mayo concluded that
workers were motivated by more than self-interest and the following had an impact too:
1. Psychological Contract: There is an unwritten understanding between the worker
and employer regarding what is expected from them; Mayo called this the
psychological contract.
2. Interest in Workers: A worker’s motivation can be increased by showing an interest
in them. Mayo classified studying the workers (through the experiments) as showing
an interest in the workers.
3. Work is a Group Activity:Work is a group activity; teamwork can increase a
worker’s motivation as it allows people to form strong working relationships and
increases trust between the workers. Workgroups are created formally by the
employer but also occur informally.
4. Social Aspect of Work:Workers are motivated by the social aspect of work, as
demonstrated by the female workers socializing during and outside work and the
subsequent increase in motivation.
5. Recognize Workers:Workers are motivated by recognition, security and a sense of
belonging.
6. Communication:The communication between workers and management influences
workers’ morale and productivity. Workers are motivated through a good working
relationship with management.

Conclusion:
The traditional view of how to motivate employees is that you offer monetary rewards
(pay increases, bonuses, etc.,) for work completion. However, the Hawthorne experiments
may suggest that motivation is more complicated than that. Advocates of the "Hawthorne
Effect" will state that the Hawthorne experiment results show that motivation can be
improved through improving working relationships and social interaction.

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MASLOW’S THEORY OF HUMAN NEEDS

Abraham H. Maslow, a famous social scientist or psychologist, has given a
framework that helps to explain the strength of certain needs. He identifies five levels of
needs, which are best seen as a hierarchy with the most basic need emerging first and the
most sophisticated need last. People move up the hierarchy one level at a time. Gratified
needs to lose its strength and the next level of needs is activated. As basic or lower-level
needs are satisfied, higher-level needs become operative. A satisfied need is not a motivator.
The most powerful employee need is the one that has not been satisfied.
The hierarchy of needs is identified as follows:

1. Physiological needs: The Physiological needs are at the top of the hierarchy because
they tend to have the highest strength until they are reasonably satisfied. It includes
the need for food, sleep, shelter, etc. these are the basic needs and if these are not
satisfied, one does not think of needs at higher level.
2. Safety or Security Needs: Once physiological needs are satisfied to a reasonable
level, the next level in the hierarchy is safety. Safety means being free of physical
danger or self-preservation. It covers protection, job security, the safety of property,
food or shelter, etc.
3. Affiliation or Acceptance or Social needs: After the first two needs are satisfied,
social needs become important in the need hierarchy. Man wants to live in society as a
member of society. He wants to love and be loved by others. It includes desire to seek
or show affection and recognition, needs for companionship, identification with a
group, etc.
4. Esteem needs: These needs are concerned with self-respect, self-confidence, a feeling
of personal worth, feeling of being unique and recognizable. The satisfaction of these
needs produces feelings of self-confidence, prestige, power and control.
5. Self-actualization needs: These needs indicate the strong desire to achieve
something, particularly in view of the potential one has. This includes competence
which implies control over environmental factors both physical and social and
achievement.
Maslow suggests that the various levels are interdependent and overlapping, each
higher-level need emerging before the lower-level need has been completely satisfied.

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 Unit-1: Introduction to Management 1.17

DOUGLAS Mc GREGOR’S THEORY X AND THEORY Y

McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's
hierarchy into "lower-order" (Theory X) needs and "higher-order" (Theory Y) needs.
McGregor, in 1960 in his book “The Human Side of Enterprise” states that people inside the
organisation can be managed in two ways. The first is basically negative, which falls under
the category X and the other is basically positive, which falls under the category Y.
After viewing the way in which the manager dealt with employees, McGregor
concluded that a manager’s view of the nature of human beings is based on a certain grouping
of assumptions and that he or she tends to mould his or her behaviour towards subordinates
according to these assumptions.
Douglas McGregor has classified the basic assumption regarding human nature into
twoparts and has designated them as 'theory X’ and 'theory Y' as discussed below:

Theory - X:
This is the traditional theory of human behaviour, which makes the following
assumptions about human nature:
1. Management is responsible for organizing the elements of productive enterprises -
money, material, equipment, and people - in the interest of economic ends.
2. With reference to people, it is a process of directing their efforts, motivating them,
controlling their actions, modifying their behaviour in order to be in conformity with
the needs of the organisation.
3. Without this active intervention by management, people would be passive – even
resistant to organisational needs. Hence, they must be persuaded, rewarded, punished
and properly directed.
4. The average human being has an inherent dislike of work and will avoid it if he can.
5. He lacks ambition, dislikes responsibility and prefers to be led.
6. He is inherently self-centred, indifferent to organisational needs.
7. He is by nature resistant to change.
8. He is gullible, not very bright.

Theory - Y: The assumption of theory Y, according to McGregor are as follows:

1. Work is as natural as play or rest, provided the conditions are favourable; the average
human being does not inherently dislike work.
2. External control and the thrust of punishment are not the only means for bringing
about efforts towards organisational objectives. Man can exercise self-control and
self-direction in the service of objectives to which he is committed.
3. Commitment to objectives is a result of the rewards associated with their
achievement. People select goals for themselves if they see the possibilities of some
kind of reward that may be material or even psychological.
4. The average human being, under proper conditions, does not shirk responsibility but
learn not only to accept responsibility but also to seek it.
5. He has the capacity to exercise a relatively high degree of imagination, ingenuity and
creativity in the solution of organisational problems is wide, not narrowly distributed
in the population.
6. Under conditions of modern industrial life, the intellectual potentialities of people are
only partially utilized. As a matter of fact, men, have unlimited potential.

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 Unit-1: Introduction to Management 1.18

Comparison of Theory X and Theory Y:

Theory - X Theory - Y
Theory X assumes human beings Theory Y assumes that work is as
inherentlydislike work and are distasteful naturalas play or rest.
towards work.
Theory X emphasizes that people do not Theory Y assumes just the reverse.
haveambitions and they shrink Given proper conditions, people
responsibility. haveambitions and accept responsibility.

Theory X assumes that people, in general, According to Theory Y, creativity

havelittle capacity for creativity. iswidely distributed in the population.

According to Theory X, people lack self- While in Theory Y people are self-
motivation and require to be externally directedand creative and prefer Self-
controllingand closely supervising in control.
order to get maximumoutput.

Theory X emphasizes upon the Theory Y emphasizes decentralization

centralization ofauthority in decision- and greater participation in the
making process. decisionmakingprocess.

HERZBERG’S TWO FACTOR THEORY OF MOTIVATION

Frederick Hertzberg conducted a structured interview programme to analyze the
experience and feelings of 200 engineers and accountants in nine different companies in the
Pittsburg area, U.S.A. During the structured interview, they were asked to describe a few
previous job experiences in which they felt ‘exceptionally good’ or exceptionally bad about
their jobs.
In his analysis, he found that there are some job conditions which operate primarily to
dissatisfy employees when the conditions are absent, however, their presence does not
motivate them. It is referred as Hygiene or Maintenance Factors.Another set of job condition
operates primarily to build strong motivation and high job satisfaction, but their absence
rarely proves strongly dissatisfying. It is referred as motivational factors.

1. Hygiene Factors: According to Hertzberg, there are 10 maintenance factors.These

maintenance factors are necessary to maintain at a reasonable level of satisfaction in
employees. Any increase beyond this level will not produce any satisfaction to the
employees. However, any cut below this level will dissatisfy them.Dis-satisfaction
occurs when the following hygiene factors, extrinsic or job context, maintenance
factors are not present on the job and include:
1. company policy and administration,
2. technical supervision,
3. salary,
4. job security,
5. personal life,
6. status,
7. working conditions,
8. interpersonal relationship with superiors,

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 Unit-1: Introduction to Management 1.19

9. interpersonal relationship with peers and

10. interpersonal relationship with subordinates

2. Motivational Factors: These factors are capable of having a positive effect on job
satisfaction often resulting in an increase in one’s total output. Most of the factors are
related to job contents. An increase in these factors will satisfy the employees.
However, any decrease in these factors will not affect their level of
satisfaction.Satisfaction comes from motivators that are intrinsic or job content, such
as:
1. achievement,
2. recognition,
3. advancement;
4. work itself,
5. possibility of growth and
6. responsibility

REVIEW QUESTIONS
1. Define Management. Explain the importance of management.
2. Explain the nature and functions of management?
3. Explain how scientific management paved the way for changes in the traditional
mindset.
4. “Management is regarded as an art by some, science by others”. In light of this
statement, explain the exact nature of management.
5. What is the contribution of Henry Fayol to management thought? Explain 14
principles of management thought.
6. State the history of the evolution of management thought with an emphasis on
modern management techniques.
7. Define motivation. Explain its nature and characteristics.
8. Describe the importance and types of motivation.
9. Discuss Mayo’s Hawthorne experiment of motivating employees.
10. Explain Maslow’s theory of human needs.
11. Briefly discuss the Douglas Mc Gregor’s Theory X and Theory Y.
12. Discuss Herzberg’s two-factor theory of motivation.

Organisational Structure and Human Resource Management