A REVIEW OF THE EVOLUTION OF MANAGEMENT SCHOOLS OF THOUGHT

By Enyia Charles Daniel

Department of Management, Faculty of Management sciences, University of Port Harcourt

+234 8165390560

charlesdanonline@yahoo.com, charlesdanenyia@gmail.com

Abstract

To every art done in time past, there was an element of management theory. This paper exposes its
readers to the understanding of how management theories came to be and how it was, even if some
of these events were not captured in most management literatures. It also shows us the shortcomings
of most of these theories, compares some of these theories to preceding theories and finally
recommends that none of these theories can be labelled the best as every theory fits specific situation
and environment. This is where the contingency theory comes in. It also makes us understand that most
of these theories we study today are still in use from the pre-scientific to this contemporary era.

Keywords: evolution, theories, management, classical, neoclassical, contemporary, contingency

 INTRODUCTION

Management has evolved and changed considerably over a period of time. It has continuously adopted
new theories and practices and replaced old once so as to make management activities increasingly
efficient. Management has been around as there has been need for decision making. An understanding
therefore of the behaviour of the organization-man must of necessity and desirability include
knowledge of the development of contemporary theories of management.

According to Baridam (2002) in his book “Management and organizational theory”, several schools of
thought were identified which includes The Formal approach, the Interpersonal approach, The
Economic approach, the Analytical approach, the Decision approach, the Intuitive approach, the
Political approach, Systems approach as well as the contingency or situational approach. However, we
shall group them into Pre-scientific, Classical, Neoclassical and Contemporary schools of thought.

PRE-SCIENTIFIC ERA:

Before now, man has always believed in the rule of thumb also known as the pre-scientific era,
however, scholars have also argued that these set of managers may have used as it were
unconsciously, some scientific managerial skills. Even though scientific management established itself
in the early 20th century, references to planning and organization are found in ancient Greek and
Biblical literature as well as in histories of Roman Empire. Imagine building ancient monuments such
as the great Pyramid, and consider what that would have required in terms of planning, work
allocation, organizing, directing and decision making. The Egyptians used the various Functions of
management which are planning, organizing, directing and controlling when they constructed the
pyramids” (Inyang, 2008). These great pyramids, which were built in 2900 B.C. are a classic example of
management and co-ordination. It is interesting to note that one pyramid required 100,000 men,
working for 20 years, covering 13 acres, using 2.3 million blocks, each weighing an average of 2.5 tons
(George,1968; Inyang, 2008). Also take for example the tower of Babel in Biblical times which occurred
in such a way that God saw men so organized that He became afraid of what their coordination could
bring about (Gen. 11:5-6). This shows that science had been applied in management long ago before
the present theories that men have so tried to postulate ever existed.

FORMAL OR CLASSICAL SCHOOL OF THOUGHT:

This school of thought has various theories namely:

1. SCIENTIFIC MANAGEMENT: This method was developed in the USA in the early part of the
20th century by Frederick Taylor. He paid close attention to “Time and Motion” studies here
each worker is timed when performing a task and then it provides the basis for the workers’
level of output per day (eg. If it took a worker 2 minutes to perform a task, then this could be
done 30 times per hour and 240 times in an 8 hour day.

Taylor was concerned primarily with factory management and within that context, his emphasis was
mostly on the management of production workers. Taylor believes that efficiency and discipline were
the two greatest features of a good manager and a good workforce but what he failed to recognize
was the high levels of morale and motivation that this system produces in the work force.

Scientific management was based upon five main principles:

 • Develop a science for each man’s work
• Scientifically select the best man for the job and train him on the procedures he is expected to
follow.
• Cooperate with the men to ensure that work is done as prescribed
• Divide the work so that activities such as planning, organizing and controlling are the prime
responsibilities of management rather than the individual worker.
• Instantly rewarding the worker economically when he performs according to the prescription
of management and punish him when he does otherwise.

The primary criticisms of Taylor’s approach were his lack of concern for the individual within the
organization and for his over reliance on economic motives. Nevertheless, his work added greatly to
the knowledge of the psychology of industrial work organization. It also set the stage for a more
comprehensive approach to the study of behavior of the organization-man in the work place. Jaja
(2003)

2. CLASSICAL ADMINSTRATIVE MANAGEMENT:

In Fayol’s book “ADMINSTRATIVE INDUSTRIELLE ET GENERAL”(1916) which was late translated to

English in 1929 meaning “INDUSTRIAL AND GENERAL MANAGEMENT”. Here, he presented the basic
principles he felt a manager should adhere to in managing an organization. While Taylor was concerned
with lower-level organization, Fayol was concerned with higher level management. Born in 1841 and
while working as an engineer in a mining company, he improved the a virtual bankrupt condition to
high success. Fayol is however distinguished in that he believed that management is a specialty in its
own right and that an individual can learn to become a successful manager. The fourteen principles of
management by Fayol are:

I. Division of labor
II. Authority and Responsibility
III. Discipline
IV. Unity of command
V. Unity of management
VI. Subordination of individual interest to that of organization
VII. Remuneration
VIII. Centralization
IX. Hierarchy
X. Order
XI. Equity
XII. Stability of tenure of office
XIII. Initiative
XIV. Esprit de corps

Fayol also developed certain functions which he felt are essential to managers in carrying
administrative practices and principles of management. They are: Planning, Organizing, Directing,
Coordinating and controlling.
Other authors who contributed to the functions of management were Luther and Urwick (1937), here
they described the functions of management using the acronym POSDCORB- Planning, Organizing,
Staffing, Directing, Coordinating, Reporting and Budgeting.

3. BUREAUCRATIC MANAGEMENT:

The concept of bureaucracy is generally associated with the works of Max Weber. Weber studied the
effects of social change in Europe at the turn of the century, he believed bureaucracy was a rational
means of minimizing the cruelty, nepotism and subjective practice common in earlier stages of the
industrial revolution. Until recently, Weber was not treated as a member of the classical management
school. He was only interested in applied management problems. He defined bureaucracy as networks
of social groups dedicated to limited goals, organized for maximum efficiency and regulated according
to the principle of legal rationality..

Some of the essential features of bureaucracy are:

• Specialization or division of labor

• Hierarchy of authority in which a lower office is supervised by a higher one.
• Written rules and regulations.
• Rational application of rules and procedures
• Selection and promotion based on competence and not on irrelevant mis-considerations

The major variables which characterize bureaucracy are:

I. Specialization: specialized tasks allocated to members

II. Standardization: standard procedure
III. Formalization: written rules
IV. Centralization: authority located at the top
V. Configuration: shape of organizational role structure

DEFECTS OF CLASSICAL THEORIES:

According to Jaja (2003;pp 9-10), Classical theories

a. Are Culture bound

b. Reveal that that managerial attitude towards subordinates are inconsistent with humanistic
democratic values of Africans
c. Demand and support employees who demonstrate immature personality traits and
characteristics.
d. Organizations that rely solely on the contribution of classical theories are unable to cope with
environmental changes hence, they become obsolete and dysfunctional.
e. The rules and regulations are not flexible to conform with society
f. Employees under classical framework are so indoctrinated to follow directives that they can
only exercise their discretionary powers and rights in a secretive manner.
g. Under the classical framework, self-criticism is discouraged, resulting in serious restraint on
the generation of innovative concept and ideas from within the organization.
h. High degree of centralization results to insufficient responsiveness to the needs of emergency
and unroutinised operations.
NEOCLASSICAL SCHOOL OF THOUGHT

As the name implies, Neo-classical theory was founded on the basis of the classical theory as It
modified, added to and even extended the precepts of the classical school of thought (CIPM 2013).
With the growth of sociology and psychology and a mass exodus of people from the farms to the
factories in the early 20th century, it was realized that any attempt to formulate a sound theory of
principles of management on formal structures, process and rationalization would be incomplete,
unsuccessful and confounding, in as much as it does not take into consideration the SOCIAL MAN(i.e.
the worker, labourer, or proletariat) and empirically find out his beliefs, needs, modes of behavior and
group relationship.

1. HUMAN RELATIONS MOVEMENT:

The National Research Council of America from 1924-1927 made an almost futile study in conjunction
with the western electric plant in Hawthorne USA to determine the effect of illumination and other
conditions on workers and productivity, this was the work of Elton Mayo. It was the human problem
of industrial civilization and the second phase studies at Hawthorne works in Chicago (1927-1932) that
brought the behavioural school to limelight. Elton Mayo and his co-researchers found out that
changing illumination for the test group at Hawthorne, modifying rest period by shortening work days
and varying piece-rate incentives did not actually account for changes in productivity. other findings
are:

The amount of work carried out by a worker (and hence the organizational level of efficiency and
rationality) is not determined by his physical capacity but his social capacity.

Non-economic rewards play a central role in determining the motivation of workers, this is called the
“Hawthorne effect”

The highest specialization is by no means the most efficient form of division of labor.

Workers do not react to management and its norms/rewards as individuals but as members of groups.

2. THEORIES X and Y:

Another contributor to the Neo-classical theory of management was Professor Douglas McGregor
whose theory of motivation incorporated both internal and external forms of motivation. McGregor’s
theory X was based on the following assumptions:

The average human being dislikes work and would always avoid it

Because of these human characteristics of work dislike, most people must be coerced, controlled,
directed and threatened with punishment to get them put forth adequate effort towards achieving
organizational goals.

The average human being prefers to be directed, wishes to avoid responsibility, has relatively little
ambition and wants security above all.

His theory Y also has the following assumptions:

The expenditure of physical and mental effort in work is as natural as play or rest
External control and threat of punishment are not only the means of binging out efforts towards
organizational objectives.

Commitment to objective if a function of the rewards associated with their achievement.

The average human being learns under proper conditions, not only to accept but to seek responsibility.

The capacity to exercise a relatively high degree of imagination, ingenuity and creativity in solution of
organizational problems is widely and not narrowly distributed.

Under the conditions of modern industrial life, the intellectual potentialities of the average human
being are only partially utilized or under-utilized.

3. ABRAHAM MASLOW- Hierarchy of Needs

Maslow portrayed the needs of individuals in the form of a pyramid with several stages of needs. At
the least was the physiological needs and the highest was the self-actualization. According to
Baridam(2002), Maslow based his theory of human motivation on the following assumptions:

Individuals have certain needs that influence their behavior, only unsatisfied needs can influence
behavior, satisfied needs do not act as motivators.

Needs are arranged in an order of importance or hierarchy from the basic physiological to the complex
self-actualization needs,

An individual’s need at any level on the hierarchy emerges only when the lower needs are reasonably
satisfied.

It is probably safe to say that the most well-known theory of motivation is Abraham Maslow’s theory
of Needs. Maslow hypothesized that within every human being, there exists a hierarchy of five needs
which are:

Physiological needs: hunger, thirst, shelter, sex and other bodily needs.

Safety needs: security and protection from physical and emotional harm.

Social needs: affection, belongingness, acceptance and friendship.

Esteem needs: internal factors such as self-respect, autonomy, achievement and external factors such
as status, recognition and attention.

Self-actualization: drive to become what one is capable of becoming. It includes growth, achieving ones
potential and self-fulfillment.

As each of the needs becomes substantially satisfied, the next stage becomes dominant (Robbins et al
2009: 194)

However, a need must not be 100 percent satisfied before the next level becomes potent. A more
realistic description of the hierarchy would be in terms of decreasing percentages of satisfaction as
potency increases. That is 85% in physiological needs, 70% in security needs, 50% in social needs, 40%
in in self-esteem and 10% in self-actualization needs. Jaja (2003)
 4. FEDRICK HERZBERG TWO FACTOR THEORY

Herzberg’s TWO-factor theory, also called motivation-hygiene theory believes that an individual’s
relation to work is basic and that one’s attitude towards work can very well determine success or
failure.

This research undertaken by Herzberg in the 1950s where he interviewed 203 engineers, accountants
and managers at Pittsburgh, United states of America because of their growing importance in the
business world. This research has broadened the understanding of motivating factors and job
satisfaction in the work place. From his research, he concluded that employees have two set of needs
in the work place. He described them as Hygiene factors and Motivator factors. Hygiene factors
(satisfiers) include salary, working condition and fringe benefits. He also stated that these factors on
their own do not lead to job satisfaction but their absence can create dissatisfaction.

Motivators: these are factors such as recognition, responsibility, achievement, and opportunity for
progression. Herzberg found that a combination of these factors increased motivation and improved
individual performance.

CRITICISMS OF HERZBERG’S THEORY

His research methodology is being questioned by scholars. The critical incident technique he used by
asking people to look at themselves retrospectively does not substantially provide a vehicle for
expression of other factors to be mentioned. This methodology may cause people to recall only the
most recent experiences. Secondly, Herzberg’s theory was conducted on knowledge
workers(managers, accountants and engineers) thus scholars criticize its ability to be generalized.
Thirdly, Herzberg’s theory focused too much attention on “satisfaction”-“dissatisfaction” rather than
individual performance. Satisfaction may not be directly related to job performance. Fourthly,
Herzberg’s theory fails to account for differences in individuals. While some are motivated by job
context variables, others find favor in job content factors depending on his particular circumstance.
Baridam(2002)

CLASSICAL SCHOOL COMPARED WITH NEO-CLASSICAL SCHOOL

Classical school emphasizes order, rationality structure and specialization. It also accepts the
importance of the concept of an economic man (workers). An employee is motivated almost by
economic incentives. Neo-classical theory on the other hand generally builds upon the classical theory
i.e modifies and extends certain concepts of the classical theory. CIPM (2013)

The basic change or dichotomy between the two is that the Neo-classical theory directly challenges
the concepts of the economic man and in contrast to the classical theory; Neo-classical theory holds
that every person is different. This view contrasts with the emphasis placed on homogeneity of the
economic man as propounded by the Classical theorists. The neo-classical also emphasized that a
person’s work group and other social factors/needs are very important to him.
CONTEMPORARY SCHOOL OF THOUGHT

1. SYSTEMS APPROACH:

The systems approach tends to see the organization and its component parts as being interrelated and
interdependent. Thus each part of the organization depends on the other to succeed.

A system can be classified as follows: Natural and Man-made: social economic and political systems
are man-made while physical and biological systems are mostly natural.

The second classifications of systems are Open and Closed system: a system is said to be open if it
interacts with its environment while a closed system does not interact with its environment.

The third classifications are Adaptive systems and non-adaptive systems: Adaptive systems react to
environmental changes in a way that is desirable considering the purpose the system was designed for
while non-adaptive systems do not react to changes in the environment.

2. POLITICAL APPROACH:

Our today’s view of organizations as political entities is not a recent phenomenon. Most authors view
organizational politics as outcomes that make a claim against the organization’s resource sharing
system. For example, an employee asking for some fringe benefits which constitute a claim against the
resource sharing system would not be political, but the use of threat to unionize, to obtain such a
benefit could be considered a political act.

Organizational politics can be defined as conflict over whose preferences are to prevail in the
determination of policy.

3. DECISION APPROACH:

By decision making, we mean the act of choosing from among alternatives. The foundation of this
approach lies in economics and philosophy. Decision-making often reflects a process of power and
negotiation rather than a unitary pursuit of goals. Methods that could be adopted in decision making
could be Bureaucratic approach, Normative approach (here, there is complete awareness of all
possible alternatives), Behavioral approach, Group decision making, conflict equilibrium approach,
open systems decision making, etc.

4. ECONOMIC APPROACH:

The simplest model of a business firm lies solidly on attainment of goals and profit maximization. This
is derived from economic theory. The traditional economic concept of the firm is centered on the
actions of the entrepreneur, the behavior of which is conditioned by its drive to maximize its incentive
function. Traditionally, the incentive function is thought as the greatest amount of profit that can be
obtained within the parameters of the model. However, rationality in economic theory implies that
the entrepreneur will choose from among limited range of alternative actions open to him, that course
of action which would lead to maximization of profits for the firm.
 5. ANALYTICAL APPROACH:

Today, the term ANALYTICAL APPROACH or OPERATIONS RESEARCH (OR) means a scientific approach
to decision making which seeks to determine how best to design and operate a system usually under
conditions requiring the allocation of scarce resources. The development of operations started at the
pre-world war era to the world war era an then the post-world war era, CIPM (2013).

Frederick Taylor(1885) during the pre-world war era emphasized the application of scientific analysis
to methods of production, a Danish mathematician Erlang(1917) published his work on the problem
of congestion of telephone traffic. A few years after the appearance of his work, the British Post Office
accepted his work as the basis for calculating circuit facilities. The formulae developed by Erlang on
waiting time are of fundamental importance to the theory of telephone traffic.

During the world war II, British military leaders asked scientists and engineers to analyse several
military problems: the development of radar and the management of convoy, bombing, anti-
submarine and mining operations. Thus, the application of mathematics and the scientific method to
military operations was called operations research (Winston 1991;CIPM 2013).

Operations Research was introduced as a subject for academic study in American universities around
1950 and since then, it has been gaining ever increasing importance. The general form for operations
research model is given as U=fc(Xi, Yj)

Where U= Systems performance/Utility

Xi= Controllable Variable

Yj= uncontrollable variable

F= functional relationship between U, Xi and Yj

Some analytical tools used by Operation Researchers are:

• Decision-Making Models: i.e Decision theory (under risk, certainty or uncertainty)

• Determination Models: ie mathematical programing and Networks
• Dynamic Models: i.e Dynamic programing and Markov chains
• Inventory and Queuing Models: Inventory theory and Queuing theory
• Simulation Models: ie Business Games.

6. INTUITIVE APPROACH:

This approach addresses the use of intuition as an approach to management. Intuition can be defined
as alleged wisdom or acknowledged cognition attained without rational thought and inference. Since
there is ample evidence to believe that formal education, coupled with the narrow-minded concept
called rationality is not a yardstick for organizational effectiveness. Organizational effectiveness
therefore calls for a blend of clear-headed logic and powerful intuition.

Intuition involves the ability to arrive at reasonable but tentative formulations, prior to actual formal
analysis. It can also be called an ‘educated guess’. In the day to day work of both the manger and his
subordinates, so many occasions arise which demand that intuitive approach be adopted. Intuitive
judgment is particularly important when conceptual and logical arguments are fuzzy or when
immediate action is required without waiting for long rational analysis.

Intuitive ability is not just available as it is in other abilities. The manager’s upbringing, heredity, and
circumstances that surround his developmental stage enhance the development of his intuitive
capabilities.

7. CONTIGENCY APPROACH:

This approach to management was developed by managers and researchers who found that certain
methods and practices are affected in one situation but not in others. For example, why does a certain
leadership style or job design work in one type of organization but not in other types? The answer
appears to be because of situations differ.

The contingency approach to leadership was influenced by two earlier research programs
endeavouring to pinpoint effective leadership behaviour. During the 1950s, researchers at Ohio State
University administered extensive questionnaires measuring a range of possible leader behaviours in
various organizational contexts. Although multiple sets of leadership behaviours were originally
identified based on these questionnaires, two types of behaviours proved to be especially typical of
effective leaders: (1) consideration leader behaviours that include building good rapport and
interpersonal relationships and showing support and concern for subordinates and (2) initiating
structure leader behaviours that provided structure (e.g., role assignment, planning, scheduling) to
ensure task completion and goal attainment.

Managerial practices at the workplace are contingent to the following situational forces:

I. Forces in the leader in terms of the degree of his knowledge, skills and competencies.
II. Forces in the task to be performed
III. Forces in the subordinates and
IV. Forces in the environment.

CONCLUSION

It is no longer news that management has evolved through so many processes, and the theories
associated with this evolution tend to fit the times when they were propounded. However, having
understood the various types of management approaches/school of thoughts, we must also
understand that there is no best way to manage and this is what the contingency approach tries to
make us understand. One best practice here may constitute the worst practice in another location,
therefore, there must be a thorough comparative analysis before any management style is been
adopted in any organization anywhere. The classical, Neoclassical and contemporary schools are still
present in today’s management, take for example today’s selection, training and remuneration of
workers, they still follow the classical principles. Say also the methods of social integration in the
Nigerian politics which considers zoning and other human factors as well as business social
responsibilities, this is also a sign that the Neo-classical is not left out. We can go on and on in
considering the contemporary approaches but the major understanding we should grab is that there
is no one best form of management.
 RECOMMENDATIONS

The contingency theory of management has given us a hint to what changes we should apply when
changes occur in our business environment. It should therefore be a clarion call for all management
practitioners to apply whichever theory that would be suitable for each environmental change.
Multinational organizations should not take advantage of the fact that their host communities may not
sometimes be used to various scientific approach to management so it is advisable for such
organizations to try understanding the use of the African concept of leadership especially within Africa
because it would go a long way in establishing peace.

We must also understand that the main reason why these theories were postulated were the fact that
there was a need for organizations to increase productivity and benefit humanity, therefore, in
whichever form of application we choose to depend on, it must reflect in reducing conflicts within the
organization, between the organizations and its contemporaries as well with the organizational
external environment.

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European Journal of Business and Management www.iiste.org

ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.9, No.35, 2017

Evolution of Management Thought: A Continuous or

Discontinuous Process
Stanley N. Agogbua *
Department of Management and Entrepreneurial Studies
Paul University, Awka. P.o.Box 49, Awka, Anambra State, Nigeria

Ebele Anthonia Anekwe

Department of Business Administration
Chukwuemeka Odumegwu Ojukwu University, Igbariam, Anambra State

Hauwa Abugbum
Department of Business Administration
Chukwuemeka Odumegwu Ojukwu University, Igbariam, Anambra State

Abstract
This paper aims at reviewing the evolution of management theories, philosophies and thoughts in western world
and Africa, especially Nigeria; and ascertains if it is experiencing a stunting growth. A qualitative research design
was adopted, using thematic and theoretical method. This study lend credence to the influence of prevailing
business environment on management theories, as theories evolved over time in order to suit the internal needs of
organizations and their external environment. These theories are not mutually exclusive, as a good “mix” can
always see an organization going; and there is no best way to manage, as stressed by the contingency theory which
provides a synthesis to the plethora of management thought in the literature. Also in meeting the objective of the
paper, effort was made to examine the evolution of management thought in Nigeria. Colonialism, culture,
technological development and socio-economic thought were said to have influenced management thought and
practice in Nigeria. The paper thus found that evolution of management theory is not stunting but continuing. This
was exemplified by the recent government bail-out of airing organizations during the recession that started in
America in 2007. Also in Nigeria, the paper also drew attention to ongoing practice of government following-up
chief executives and politicians that embezzled public funds under the auspices of Economic and Financial Crime
Commission (EFCC).
Keywords: Management, Management Theory, Evolution

1. Introduction
People have evolved management to suit them and their environment, which is ever changing, by shaping and
reshaping the organizations. As long as people engage in assiduous activities, they will be willing to manage i.e.
organize, direct and control activities. Before management became a household name; people have written about
how to make organizations efficient and effective. Some eminent amongst these are Niccole Machiavelli and Sun
Tzu, classified under pre-classical school of management thought in this study. Charles Babbage, James Watt,
Robinson Botton, Robert Owen etc. are inclusive in the category. These early thinkers made their contributions bit
by bit and randomly; and so not articulated enough to be categorized as theory. But they are remembered today
because of their significant contributions to management theory and discipline. According to Smith (2002), the
Modern Management Theories have been traced back to the 1900 (Scientific Management); 1910 (Bureaucracy);
1920 (Administrative Management); 1930 (Human Relations); 1940 (Quantitative Management); 1950 (Systems
Theory); 1970 (Contingency Theory); 1980 (Total Quality Management); 1990 (Learning Organization), and 2000
(Reengineering). Smith (2003) concludes that the emergence of the information revolution and networking has
shifted the paradigm focus of managers and academics to Knowledge Management, Team Work and Networking.
In early 2000 there was emphasis on government bailing out businesses in distress, as seen in gigantic
organizations in the US and UK. Also in Nigeria emphasis has also been laid on recovery of public funds from
airing chief executives and politicians through the auspices of Economic and Financial Crime Commission (EFCC).
Studies on evolution of management (Jones and George, 2009; Kwok, 2015; Chung, 2008) have erroneously
concentrated on western theories and commentaries on management and management dynamics. This study will
thus incorporate some significant trends and dimensions of management thoughts and philosophies in Nigeria, the
most populous black nation, which are of critical importance to African Management.

1.1 Objective of the Study

This paper aims at exploring the evolution of management thought with emphasis on the west and Nigeria; and
ascertains if it is experiencing a stunting growth.

67
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.9, No.35, 2017

1.2 Methodology
The paper took a thematic and theoretical approach. This is fundamentally because it relies on the writings of
published articles and other secondary data. It also upholds a qualitative research design following the tradition of
George et al. (2012).

1.3 Evolution of Management Thought

The progressive and advancement nature of management theory indeed capture the dynamism and thus
responsiveness of man to the internal and environmental needs of organizations. Idemobi (2010) suggests that
management and organizations are products of their historical and social times and places. Advance nations can
trace the evolution of management thought since 5000 years BC, but the earliest record of management practice
in Nigeria can be traced back to 2000AD. The paper thus, will first elucidate the evolutionary trends in Europe,
America and Asia before examining that of Africa, especially Nigeria. This paper is organized thematically to
include pre-classical school, classical school, neo-classical school and contemporary school, as seen in figure 1
below. And thereafter, the Nigerian managerial philosophies will follow. This trend ensures that the objective of
the paper is met.
Figure 1: Evolution of Management Theory (1800-2016)

Source: Adapted from Dubrin (2006)

2. The Classical School

The classical school of management thought was propounded by Taylor, Gantt, Charles Bedaux, and Frank and
Lillian Gilbreth. This school of thought comprises of scientific management and administrative management. The
scientific management involves the use of scientific approach in achieving maximum output, minimum input, and
elimination of waste and reduction of inefficiency. In contrast, Fayol and Weber propounded administrative
management that deals with the use of management principles in structuring and management of an organization.
These theorists are hereby discussed below one after the other.

2.1 Frederick Winslow Taylor (1856-1915)

Taylor was a Mechanical Engineer who studied how workers and machines perform tasks, while working at
Midvale Steel Company, Philadelphia. He measured and analyzed each measurable aspect of the work with the

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use of time and motion studies and established a system that defines standard times and sequence for completion
of a task. From the outcome, he developed a true science of management to determine the best method for
performing each task. Taylor’s approach for a successful organization include: (1) clear delineation of authority;
(2) responsibility; (3) separation of planning from observations; (4) incentive schemes for workers; (5)
management by exception; and (6) task specialization.
Taylor revolutionized management thought and established the foundation for formation of several
management systems in years to come. Taylor’s efficiency systems have been applied to many tasks in non-
industrial organization, varying from fast food service, training of surgeons to call center operations aside from
manufacturing. He also strongly recommended differential pay system i.e. paying productive workers more than
others, by applying a “scientifically correct” rate that would benefit both company and workers. This system was
opposed by workers and unions because they were afraid of lay-off which could emerge from non-availability of
work as a result of overtime (i.e. working harder and faster). Also workers would be exposed to work under
pressure to meet daily target because there was much focus on productivity resulting to exploitation of both
workers and clients/customers.

2.2 Henry L. Gantt (1861-1919)

Gantt, an industrial engineer worked widely with Taylor’s Scientific Management and was remembered for his
humanizing influence on management theories. He laid emphasis on the conditions that pose favorable
psychological effects on workers. He reconsidered Taylor’s incentive system establishing the quota systems and
bonuses for workers/supervisors who exceeded their quotas. He also created a visual plan and progress report
system (GANTT CHART) that identifies various stages of work which must be carried out to complete a project,
sets deadlines for each stage, and documents accomplishments. Gantt chat is used today for scheduling tasks based
on time instead of quantity, volume or weight. In fact, Gantt Chat was translated into eight languages and used all
over the world. It also formed the basis for development of critical Path Method (CPM) by Du Pont; and Program
Evaluation and Review Technique (Pert) by American Navy. Also Lotus 1-2-3 is logical application of the Gant
Chart framework.

2.3 Frank and Lillian Gilbreth (1868-1924, 1878-1972)

Gilbreth’s family contributed to scientific management theories as a husband and wife team. In contrast to Taylor’s
time study, they came up with motion and laws of human motion from which principles of motion economy was
developed. In their research, motion and fatigue were intertwined- every motion that was removed decreases
fatigue. With use of motion cameras, they found the next economical motions for each task in order to upgrade
performance and reduce fatigue. They argue that motion study would go a long way to reducing worker morale
because of its obvious physical benefits and because it demonstrated management’s concern for the worker. The
Gilbreths also championed the idea of workers standard day work, scheduled rest breaks and normal lunch periods.
They also contributed significantly on child labor laws and laws on workers protection.

2.4 Charles Bedaux (1887- 1944)

Bedaux also contributed significantly to the theories of scientific management. He introduced rating assessment
in timing work which resulted in great improvements in employee productivity. He agreed with Gilbreth’s
perception of creating a rest allowance to allow recovery from fatigue. His contribution was crude and poorly
received at that time but later relevant to subsequent development of work study. He also expanded the range of
techniques employed in work study which include value analyses.

2.5 Jules Henry Fayol (1841-1925)

Fayol was an Engineer and Manager of a group of French mines. He was acclaimed the founder of Classical
Management School; not because he was the first to investigate management behavior, but because he was the
first to systematize it. He posited that sound management practice follows patterns which can be identified and
analyzed. He then formulated a blueprint for a cohesive norm of managers. He concluded that management is an
activity common to all human undertaking (schools, government, home, business etc.) which does five basic
administrative functions (planning, organizing, commanding, coordinating and controlling). It was generally
believed that “managers are born not made”. But Fayol opposed the notion and described management as a skill
like any other one which could be taught or learnt in schools as long as its fundamental principles are understood.
Fayol’s 14 principles of management can be summarized to include: (1) division of labor; (2) authority; (3)
discipline; (4) unity of command; (5) unity of direction (6) subordination of individual interest to the common
good; (7) remuneration; (8) centralization; (9) hierarchy; (10) order; (11) equity; (12) stability of staff; ((13)
initiative; (14) espirit de corps (Fayol, 1930). Fayols approach opposes the old notion that “managers are born, not
made”, proposing instead that management is a skill which can be acquired if its principles are understood.

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2.6 Max Weber (1864- 1920)

Weber was a German Sociologist who based his approach to management on organizational structure by dividing
organizations into hierarchies with clear distinction of authority and control. Smith and Cronje (2002) thus
conclude that managers were given ‘legal authority based on their position in the organizational structure, to
enforce rules and policy. Weber imagined that abstract rules and regulations, impersonality of managers and
hierarchy of organizational structure would lead to more efficient management. He believed that managers’
authority in an organization should not be based on tradition, charisma and rational but on the position held by
managers in the hierarchy, considering organization as a whole system. Weber’s bureaucracy helps large
organization to function in a more stable, organized and systematic manner; but individuality and creativity are
often sacrificed by doing away with personality or charismatic leadership. With the result, he concluded that
leaders are meant to think “inside the box”, and so not adaptive to changing environment and challenges.
Bureaucracy is therefore suitable for government organizations e.g. Government Printing press, Civil Service, not
for current business organizations. In the highly complex and competitive global market of the 21st century, big
organizations like Xerox and General Electric have shun bureaucratic management throwing away the
organizational structure and going for ever-changing work teams, project teams and alliances aimed at unleashing
employee creativity.

3. The Neo-Classical school

The need for group dynamics, complex human motivation and styles of leadership was stressed during the radical
social and cultural changes that occurred in 1920s and 1930s. The human relations school of management thought
emerged to address these issues. The prominent figures in this field include: Elton Mayo (1880- 1949); Mary
Parker Follett (1868- 1933); Chester Barnard (1886- 1961); Abraham Maslow (1908- 1970); Douglas McGregor
(1906- 1964); Rensis Likert (1903- 1981); Frederick Herzberg (1923- 2000); David McClelland (1917- 1998) and
Chris Argyris (1923- present) etc. We shall thus discuss these theorists one after the other.

3.1 Elton Mayo (1880- 1949)

Mayo was a Harvard Professor who proposed that managers should become more “people-oriented” (Smith and
Cronje, 2002). He was popularized by his ground breaking study of Western Electric Company’s Hawthorne plant
in Chicago which he conducted in partnership with Fritz Roethlisberger and William Dickson between 1924 and
1933. Based on the Hawthorne experiment, Mayo declares that “logical factors were far less important than
emotional factors in determining productive efficiency (George, 1968). Also that participation in social groups and
“group pressure”, as opposed to organizational structures or demands from management, had the strongest impact
on workers’ productivity (Smith and Cronje, 2002). The role of managers in organizations was revolutionized
through Mayo’s Harthone findings. He proposed that managers should focus on the work group rather than
individuals, and workers should be considered in their personal context in order to understand each employee’s
unique needs and satisfaction. In practice, managers are encouraged to consult workers about change, take note of
their views, and show concern for their physical and mental health (Wren, 2005).

3.2 Mary Parker Follet (1868-1933)

Follett made her own contribution to management thought by building on existing framework of the classical
school. She introduced novel ideas in human relations and organizational structure which further led to
development and emergence of behavioral and management science schools of thought. She affirms that
management is dynamic and not static because she discovered the benefits of getting workers involved in problem
solving. She therefore believed in group dynamics and was convinced that no one could become a whole person
except as a member of a group because people grew through their relationships with others in organizations. She
professed that management is the art of getting things done through people. Kwok (2014) summarizes Follett’s
contributions to include the ideas that: (1) people closest to the action make the best decision; (2) subordinates
should be involved in decision-making process; (3) coordination is vital to effective management (4)
communication between managers and employees improve decisions; and (5) managers should find ways to
resolve interdepartmental conflict. In fact, Follett’s “holistic” model of control took into account not just
individuals and groups, but the effects of such environmental factors e.g. politics, economics and biology (Kwok,
2014); on management.

3.3 Chester I Barnard (1886-1961)

Barnard studied sociology and philosophy extensively that he used the knowledge to formulate theories about
organizations. He became president of New Jersey Bell in 1927 and authored “Functions of Executives”, an
influential twentieth century management book which presents a theory of organization and the functions of
executives in organizations. He asserts that manager’s main roles are (1) to communicate with employees; (2) to
motivate them to work hard to help achieve the organization’s goals; and (3) successful management depends on

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maintaining good relationship with people outside the organization with whom managers deal regularly. Also
Barnard also identified the degree of importance and universality of “informal organization” and suggested that
organizations must adopt the use of groups effectively, even if they sometimes work at contradicting goals that
counter management’s objectives. He also described organization as a cooperative enterprise of individuals,
working together as a team and laid the foundation for development of a great deal of current management thought.
For example businesses like General Electric, Dupont, Motorola, AT& T etc. are increasingly using teams as the
building blocks of their organization.

3.4 Abraham Maslow (1908- 1970)

The most widely known theory of needs that established the foundation for the later development of behavioral
management theories was Maslow’s theory of motivation. He displayed the needs of individuals in form of a
pyramid with several levels of needs. He hypothesized that there are five sets of human goals which exists in a
hierarchy, as follows: (i) physiological needs; (ii) safety needs; (iii) social needs; (iv) self-esteem needs; (v) self-
actualization needs. As each of these needs become substantially satisfied, the next stage becomes dominant
(Robinson, 2009). Jega (2003) demonstrates that a need must not be fully satisfied before the next stage becomes
potent. According to Baridam (2002), Maslow based his theory of motivation on the following assumptions:
1. Individuals have certain needs that influence behavior; satisfied needs do not act as motivators.
2. Needs are arranged in an order of importance or hierarchy from the basic physiological to the complex self-
actualization needs.
3. An individual’s need at any level on the hierarchy emerges only when the lower needs are reasonably satisfied.

3.5 Douglas McGregor (1906- 1964)

McGregor propounded theory X and Y, which described two different types of workers in his book “The human
Side of Enterprise”, published in 1960. Theory X holds that the average human being dislikes work and would
always avoid it because they are inherently lazy, therefore workers must be coerced, controlled, directed and
threatened before they will work hard enough, and that they prefer to be directed, dislikes responsibility and desires
security above everything. This is termed “stick and carrot” philosophy of management. Theory Y on the other
hand postulates that the expenditure of physical and mental effort in work is as natural as play or rest, and that
control and threat of punishment are not the only means to make people work; because commitment to objective
is a function of reward associated with their achievement. Also that averagely, people learn under proper conditions,
not only to accept but to seek responsibility. Therefore human only need to be encouraged to work and not to be
threatened to work.

3.6 Rensis Likert (1903- 1981)

Likert conducted series of researches on human behavior within organizations, especially in industrial setting.
After examining different types of organizations and leadership styles, he affirmed that an organization must
optimize human assets usage in order to achieve maximum profitability, high productivity and good labor relations.
He also concluded that “highly effective work groups linked together in an overlapping pattern by the competitive
groups” will lead to highest use of human capacity. He also outlined different management styles as follows: (1)
exploitative- authoritative system; (2) benevolent authoritative system; (3) consultative system; (4) participative
group system. The participative group system is considered the optimum whereby superiors lead and have
complete confidence in the subordinates. In his findings, he discovered that motivation can only be achieve through
economic rewards, employees are responsible for organizational goals; and effective communication and
cooperative work prevail.

3.7 Frederick Herzberg (1923- 2000)

Herzberg became popular by the two-factor hygiene motivation theory. The hygiene factors do not really motivate
workers but without them there will be dissatisfaction with work. The motivators involve what workers do on the
job which develops intrinsic motivation with the workplace (e.g. achievement, training, promotion and interest in
the job). The hygiene factors according to him are related to work and organization environment; the organization,
its policies and its administration; supervision people receive while on the job, working conditions, interpersonal
relations, salary, and status and job security.

3.8 David McClelland (1917- 1998)

McClelland was an American Psychologist noted for his acquired-needs theory, sometimes referred to as the three
need theory or as the learned needs theory. He classified human needs into three as achievement, affiliation and
power and he stated that individuals’ specific needs are acquired over time and are shaped by individuals’ life
experiences. These needs according to him influence individuals’ motivation factors and effectiveness in job
performances. He also described the individuals with high need for achievement (nArch) as ones who seek to excel

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in their endeavors and thus try to avoid risky situations. Such people prefer to work alone or with other high
achievers, and need feedback in order to monitor the progress of their achievement. He also described individuals
with high need for affiliation (nAff) as people who like working in harmony with others and thus aim at acceptance
by others in the workplace. They prefer to work in a place with high personal interaction and perform well in
customer service and client interaction situations. The last category is those with high need for power- personal
and institutional power. The former individuals need power to direct people while the later (institutional power or
social power) want to organize the efforts of others to further the goals of the organization. Such managers are said
to be more effective. McClelland formulated the Thematic Apperception Test which has been adopted for
suggesting the types of needs and therefore jobs which a person might be well suited.

3.9 Chris Argyris (1923- 2013)

Argyris was an American business theorist, a Professor of Harvard Business School and a co-founder of
organizational development. He became popularly known through his seminal work on learning organization and
the impact on growth, effectiveness and adaptability of business. He focused on single and double-loop learning
the maturity/immaturity continuum, organization communication and effects of each of these on employee
motivation, accountability and empowerment. He theorized that, in contrast to double- loop learning, which
questions underlying assumptions, single- loop learning, which solves problems superficially and symptomatically,
fails to address the real issues that make companies effective. Argyris argued that communicating openly within
an organization which is considered as good norm can hinder learning and retard progress if it’s based on protest,
denial of real challenges, inability to confront tough issues and failure to examine one’s own attitudes and
contributions to problems. Under maturity/immaturity continuum, he proposed that successful employee-
empowerment requires management to provide opportunities for personal growth and development in seven areas
in which children must mature as they approach adulthood. These are identified as: (1) passivity to activity; (2)
dependence to independence; (3) few behaviors to many behavior; (4) Shallow interests to deep interests; (5) short-
term perspective to long-term perspective; and (7) non self-awareness to self-awareness/ self control.

4. The Contemporary School

In the 80s, there was an increase in growth and competitive level in the global economy, as a result of convergence
of economies, which shifted focus from traditional management theories as organization became non-restive as
they tried to proffer solution to newer management issues. This led to creation of several management thought
which are represented in this section as management approaches. These include: systems approach, quantitative
approach, qualitative approach, contingency approach, information technology approach etc. We shall discuss
these in turn.

4.1 Systems Approach

Senge (1990) championed system approach to management as published in his book “The Fifth Discipline”. He
challenged scientific theory of management by introducing the concept of system theory in organizational design.
The scientific theory was based on the assumption that organizations were a closed system, with activities broken
down into discrete activities. System approach suggests that organization should be considered as an open system
and not a closed one. In this regard, he viewed an organization as a unit or an entity of interrelated sub-unit whereby
every sub-unit contribute its own quota in achieving organizational goal. Systems approach thus provides a
framework for planning and anticipation of both immediate and far-reaching consequences while allowing for
understanding of unanticipated consequences as they develop. It therefore enables managers to easily maintain
balance between needs of various parts of the enterprise and needs of the whole firm.

4.2 Quantitative Approach

The British came up with quantitative approach for solving complex problems in warfare, and it was later adopted
by America and was widely known through the development of high speed computers and computer networks.
This approach emphasized the use of several quantitative techniques in managerial decision making to ensure
optimum use of organizational resources. Thus the application of mathematics and the scientific method to military
operations was called operations research (CIPM, 2013). This approach was criticized for its emphasis on only the
aspects of the organization that can be captured by members, missing the importance of people and relationships.

4.3 Contingency Approach

This approach is also known as situational approach; and was developed by managers, consultants and researchers
who tried to apply the concepts of the major schools to real- life situations. In their attempt to apply the concepts
to real life situations, some concepts which are effective in one situation failed in others and so they concluded
that the results differ because situations differ. In other words, a technique that works in one case will not
necessarily work in all. Hence, contingency Approach to management emphasized that no single way to manage

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people or work is best in every situation. Managers are thus encouraged to study individual and situational
differences before taking decision on course of action to follow. These differences one can note is as a result of
differing environment and organizational needs and structures that affect the organization coupled with differing
resources, capabilities pertaining to individual organization.

4.4 Information Technology Approach

This approach emanates from the impact of Information Technology (IT) and the internet on conduct of
organizations with regards to knowledge Management (KM), Supply Chain Management (SCM), and Strategic
Management (SM); and also the management evolution and revolution in response to dynamic environmental
changes that are taking place.

4.5 Bail-out and Recovery Approaches

A new dimension in management thought, which was occasioned by the recession that started in America in 2007
which spill-over the whole world. Failing organizations due to their high relevance to the society, the government
came to their rescue by use of stimulus packages to bail them out from their distress. A clear example of this is
Arthur Anderson, the accounting, auditing and consulting global giant. Also the corporate scandals associated with
Enron, Worldcom and Adelphia in the USA; and Parmalet and Mannesmann in Europe, has also raised the idea of
recovery of public funds from airing corporate management. These have added a new idea to global management
thought.

5. Management Thought in Nigeria

Management in Africa in general appears to follow the evolutionary developments in western management
practices (Kamoche, 1992); as Nigerian organizations replicate the western management ideologies and practices,
and also for criteria of success. Olusoji and Oogunkoya (2014) contend that management thinking and practice in
Nigeria ere shaped by colonization, culture, socio-economic thoughts and technology. Culture significantly
determines organizational behavior and managerial practice (Hofstede, 1980; Peng, 2001; George et al., 2012;
Triandis, 1995). According to Lytle et al. (1995), culture is the group’s strategy for survival and it constitutes the
successful attempt to adapt to the external environment. As seen in Inyang (2008), the Nigerian management
practice is modeled using cooperative and communal attributes. Hofstede (2001) demonstrates the influence of
culture on theoretical development and suggests that two dimensions of culture are particularly important: (1)
religion and (2) traditional wisdom. These two cultural dimensions made people to understand the critical role of
traditionalism in many aspect of life in Nigeria. For instance, the extended family system and respect for the elderly
ones determines relationship and clarify the critical role of traditionalism in many aspect of life in Nigeria.
Management philosophy and practice in Nigeria are conceived in different time periods: pre-colonial era, colonial
Era, post-Colonial era and Modern Management Era.

5.1 Pre- Colonial Era

During the pre- Colonial Era, Nigerians were majorly into agriculture and they practiced management through
settled agriculture. At this stage the management style practiced is deeply entrenched in their beliefs and traditions
(Fashoyin, 2005). Pre- colonial era was predominated by communalism management philosophy which involves
the process of solving management problems collectively by being ones brother’s keeper most especially practiced
in trades and agricultural activities. Inyang (2008) concludes that Nigeria is a multi-cultural nation embedded with
diverse business and management principles before colonialism and had indigenous managerial principles of
communality, father-figure, hard work, clan, loyalty, team- work and integrity. These attributes were disrupted by
commercial slave trade of the 18th century which interrupted the intellectual capacity for Nigeria to develop
indigenous management theory (Olusoji and Ogunkoya, 2014). The arrival of the European in the late 15th century,
the increase in the level of slave trade from 16th century through 19th century, and formal colonization by Britain
at the end of 19th century changed this management system radically. The next section examines the indirect rule
management practice of the colonial period.

5.2 The Colonial Era

The colonial era followed immediately after the pre-colonial era. The colonies were governed via indirect rules.
During this era, a system whereby traditional rulers rule their lands and collect taxes which are later remitted to
the British government was adopted. Any traditional ruler that fails to comply with this system will be threatened
to relinquish their positions. This system saved Britain the huge Economic and Political cost of running the affairs
of the colonies. The indirect rule proved very successful in the Northern part of Nigeria as a result of the peculiarity
of the Fulani Aristocracy who had governed Sokoto Caliphate for long and was able to run traditional Islamic law
alongside the British civil law. The south was not accommodating and in as much as taxpaying was prevalent in
the west; there were pockets of resistance under British mandate.

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5.3 Post- Colonial Era

The post-colonial era started when Nigeria gained independent from the colonial masters in 1960. This led to the
emergence of antagonism amongst different ethnic groups. As a result military dictatorship took over the affairs
of the country. The ethnic groups in developing their heritage gave the country a rich culture and ability to develop
managerial ideas and practice towards nation building. This resulted in various managerial philosophies:
Patrimonial Management Philosophy, Communal Management Philosophy, Patronage Philosophy, Balanced
Management Philosophy, Autocratic Political Management Philosophy, Indigenous Ecological Philosophy and
Acculturation Management Philosophy (Olusoji and Ogunkoya, 2014). The Nigerian society functions in a highly
patriarchal fashion with men exerting broad control over the lives of women, who are typically less educated and
have limited access to wealth and social services (Dia, 1996). Fashoyin (2005) infers that communality is the basic
management philosophy that governs existence and social relations in Nigeria. Thereafter, the high class citizens
began to patronize their relatives and friends, giving them capital to start up business and paying off their bills -
children’s school fees, marriage costs and other charity works. The balanced management philosophy can be seen
clearly in the recruitment system that is based on federal character and not really on favoritism. Under this system,
a well-qualified applicant to Nigerian Civil Service from southern Nigeria could be rejected for an unqualified
candidate from Northern Nigeria due to the need to ensure equal representation of all regions. Between 1966 and
1999, Nigeria experienced autocratic and dictatorial management styles due to frequent coups and long periods of
military rule. Also ecological philosophy at this time involves environmental protection which involves use of
different planting techniques to prevent or reduce erosion and increase fertility of the soil. Also acculturation
philosophy prevailed in different parts of Nigeria. Inter-tribal marriages and relationships emerged during this era.
The philosophy was grounded amongst the Southern Nigerians as they began to embrace learning of craft-work
through apprenticeship scheme. By this system, the young apprentice stays with the master for some time to learn
trade and later after mastery of the trade starts up his or her own small business.

6. Conclusion
This paper examined the evolutionary trend of management thought which lend credence to influence of prevailing
business environment on management theories as the theories evolved over time in order to suit the internal needs
of organizations and their external environment. It is pertinent to understand that these theories are not mutually
exclusive, as a good “mix” can always see an organization going; and there is no best way to manage as stressed
by the contingency theory which provides a synthesis to the plethora of management thought in the literature. Also
in meeting the objective of the paper, effort was made to examine the evolution of management thought in Nigeria.
Colonialism, culture, technological development and socio-economic thought were said to have influenced
management thought and practice in Nigeria. It was also established that management is being practiced in Nigeria
during the pre-colonial era and that communality, consensus and unanimity (Inyang, 2004) were the prevailing
features. The paper thus found that evolution of management theory is not stunting but continuing. This was
exemplified by the recent government bail-out of airing organizations during the recession that started in America
in 2007. Also in Nigeria, the paper also drew attention to recent practice of government following-up chief
executives and politicians that embezzled public funds under the auspices of Economic and Financial Crime
Commission (EFCC).

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SINERGI, Volume 7, Nomor 2 MARET 2017
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
Moh. Barid Nizarudin Wajdi
STAI MIftahul Ula Nganjuk
E-mail: baridnizar84@gmail.com

(Diterima: 10-Desember-2016; direvisi: 12-Januari-2017; d ipublikasikan : 01-Maret-2017)

Abstract. There are a differences between management and leadership. The aim of this review is to determine the differences
between management and leadership. The result of this review showed that management and leadership are two very distinct
functions. Although, management and leadership do share many similar duties which consist of working with people and
influencing others to achieve goals. Management skills are used to plan, build, and direct organizational systems to accomplish
missions and goals, while leadership skills are used to focus on a potential change by establishing direction, aligning people ,
and motivating and inspiring. Leadership and management must go hand in hand. They are not the same thing. But they are
necessarily linked, and comp lementary. Any effort to separate the two is likely to cause more problems than it solves .

Keywords: The differences, leadership, management

Introduction without having any management positions.

Management and leadership are important for
the delivery of good services. Although the two
are similar in some respects, they may involve
different types of outlook, skills, and behavior.
Good managers should strive to be good leaders
and good leaders, need management skills to be
effective.
Leaders will have a vision of what can be
achieved and then communicate this to others and
evolve strategies for realizing the vision. They
motivate people and are able to negotiate for
resources and other support to achieve their goals.
Managers ensure that the available resources
are well organized and applied to produce the best
results. In the resource constrained and difficult
environments of many low – to middle- income
countries, a manager must also be a leader to
achieve optimum results.
One may assume that all managers are leaders,
but that is not correct since some of the managers
do not exercise leadership, and some people lead
Therefore, there is a continuing controversy about
the difference between leaders and managers.
Some scholars argue that although management
and leadership overlap, the two activities are not
synonymous (Bass, 2010). Furthermore, the
degree of overlap is a point of disagreement (Yukl,
1989). In fact, some individual see them as
extreme opposites, and they believe that good
leader cannot be a good manager and the opposite
is true (Ricketts, 2009).
Leadership and management entail a unique
set of activities or functions. While leaders and
managers share some similarities because they
both influence others by using specific powers to
achieve certain goals, there are also some
prominent differences (Northouse, 2007). While,
managers maintain a smoothly functioning
workplace, leaders test the current position and
encourage new functions, so they are looking for
long-term goals (Yukl, 1989). In today‘s vigorous
workplace, organizations need both effective

Moh. Barid Nizarudin Wajdi

THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
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SINERGI, Volume 7, Nomor 2 MARET 2017
management, and effective leadership for optimal
success (Kotterman, 2006).
This review article will address and compare
fundamental definitions of leadership and
management, the specific types of skills for the
manager and the leader, and discuss the
similarities and differences between management
and leadership.
Methodology of Analysis
An extensive literature search was conducted
using the following electronic databases: EBSCO,
EMBASE and Google Scholar. The search aimed
to identify and locate all previous articles which
discussed the differences between the management
and leadership. There was no time limitation;
however the research was limited to only articles
written in English. The title should have
―management‖ and ―leadership‖ terms within it.
The keywords and phrases used in the research
include (leadership) and (management), or
(differences), or (similarities). Original and peer
reviewed articles were considered for this review.
The search identified 231,000 articles focusing
on leadership and management. A total of 25,700
articles remained after eliminating those that were
duplicated on Google Scholar and across the three
databases.
B. Review of Literature
Katz defined the management as
exercising direction of a group or organization
through executive, administrative, and
supervisory positions (Katz, 1955). Katz
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
thought that management responsibilities are
usually tasked-oriented, and it involves
developing staff, mentoring persons with high
potential, and resolving conflicts while
maintaining ethics and discipline (Katz, 1955).
Kappa states that the aim from a good
management is to provide services to the
community in an efficient and sustainable
manner (Kappa, 1991). Moreover, Kotter
defined the management as a job which takes
care of planning, organizing, budgeting,
coordinating and monitoring activities for
group or organization (Kotter, 2001).
Northouse defined the management as a
process by which definite set objectives are
achieved through the efficient use of resources
(Northouse, 2007). Thus, Management in
general is a process that is used to achieve
organizational goals.
Certain conditions are important for
creating good management, including:
- managers and team members need to be
selected on merit;
- managers need to earn the respect of their
staff , patients, and supervisors;
- managers need to have the knowledge,
skills and understanding of the role, tasks
and purpose of the services they deliver;
- basic support systems function well; clear
staff administration rules and regulations;
well planned and timely delivered supplies,
equipment and drugs; clear and transparent
fi nancial processes; and well planned and
monitored activities.
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SINERGI, Volume 7, Nomor 2 MARET 2017
Managers focus on formal directing and
controlling of their assistants, resources,
structures, and systems (Kotter, 2001). Managers
aim to reach short term goals, avoid any risks, and
establish standardization to improve efficiency
(Kotterman, 2006). The employees follow a
manager‘s direction in exchange for being paid a
salary, known as a transactional style (Kotter,
2001).Research shows that being an effective
manager depends upon three special skill sets:
technical, human and conceptual. The technical
skill refers to the proficiency in a specific type of
work. This may include competencies within a
specialized field, or the ability to use appropriate
tools and techniques. Human skill refers tothe
ability to work with people, which allow a
manager to assist group members to complete a
task. Conceptual skill refers to the ability to work
with ideas (Katz, 1955). In addition, an effective
manager needs to have specific qualities like: good
communication; organizational; negotiation; and
delegation skills (Kappa, 1991).
LEADERSHIP
Leadership is a complex, multidimensiona l
phenomena (DePree, 1989). It has been defined as:
a behaviour; a style; a skill; a process; a
responsibility; an experience; a function of
management; a position of authority; an
influencing relationship; a characteristic; and an
ability (Northouse, 2007). John Maxwell defined
leadership by influence (Maxwell, 1998). Kotter
(1990) stated that ―Leadership is the capacity for
collective action to vitalize‖. Robert Greenleaf
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
defined effective leadership as people who serve
others, while they follow them (Bennis and Nanus,
1997). Moreover, Peter
Drucker defined a leader is someone who has
followers (Drucker, 1999). However, some
theorists believe that leadership is a form of the
social influence processes (House and Aditya,
1997). Although there are a variety of leadership
definitions, the majority of definitions focused on
two components which are: the process of
influencing a group of individuals to obtain a
common goal; and to develop a vision.
Leaders focus on motivation, and inspiratio n
(Kotter, 1990). Leaders aim to create passion to
follow their vision, to reach long term goals, take
risks to accomplish common goals, and challenge
the current status quo (Bennis and Nanus, 1997).
The leader keeps an open eye on his
followers‘ benefits, so people follow the leader
voluntarily, and the leader directs the follower by
using a transformational style (Bass, 1990).
Leaders should have some critical qualities such as
integrity; vision; toughness; decisive; trust;
commitment; selflessness, creativity; risk taking;
toughness; communication ability, and visibility
(Capowski, 1994). Moreover, leaders should have
charisma; a sense of mission; ability to influence
people in a positive environment; and ability to
solve problems (House, 1977).
In addition, research shows that being a n
effective leader depends upon common behaviours
and characteristics like: confidence; service
mentality; good coaching skills; reliability;
expertise; responsibility; good listening skills;
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SINERGI, Volume 7, Nomor 2 MARET 2017
being visionary; realistic; good sense of priorities;
honesty; willingness to share; strong self esteem;
technical or contextual, and recognition (Bennis
and Nanus, 1997).
MANAGEMENT VS LEADERSHIP
Leadership and management overlap,
but they are not the same(Kotterman, 2006).
Both leadership and management involve
influence, working with people, and working
to achieve common goals(The Guardian,
2013).However, the fields of leadership and
management considered very
different(Kotterman, 2006). Katz asserts that
leadership is a multi-directional influence
relation, while management is a unidirectional
authority relationship (Katz, 1955).
In 1977, Abraham Zaleznik wrote the
first scholarly and landmark article about the
difference between leaders and managers
(Zaleznik, 1977). Zaleznik mentioned that the
organization needs both effective managers
and effective leaders in order to reach its goals,
but he argues that managers and leaders have
different contributions (Zaleznik, 1977).
Whereas leaders promoter change, new
approaches, and work to understand people‘s
beliefs to gain their commitment, managers
promoter stability, exercise authority, and
work to get things accomplished. Therefore,
management and leadership need different
types of people(Zaleznik, 1977).
In 1983, Watson stated that managers
take care of structure and system, but leaders
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
focus on the communication, motivation, and
shared goals. In addition, Watson mentioned
that 7S strategy which include; strategy,
structure, systems, shared values, skills, and
style; is more effective for leaders comparing
to managers. In 1985, Bryman added that
leadership is about strategic motivation.
Bennis and Nannus (1985) briefly describe the
differences between the leaders and managers
in one sentence: "Leaders do the right things;
managers do things right." (p. 33).Moreover,
In 1989 Bennis stated that ―To survive in the
twenty-first century, we are going to need a
new generation of leaders
Both leadership and management involve
influence, working with people, and working
to achieve common goals(The Guardian,
2013).However, the fields of leadership and
management considered very
different(Kotterman, 2006). Katz asserts that
leadership is a multi-directional influence
relation, while management is a unidirectional
authority relationship (Katz, 1955).
In 1977, Abraham Zaleznik wrote the
first scholarly and landmark article about the
difference between leaders and managers
(Zaleznik, 1977). Zaleznik mentioned that the
organizationneeds both effective managers and
effective leaders in order to reach its goals, but
he argues that managers and leaders have
different contributions (Zaleznik, 1977).
Whereas leaders promoter change, new
approaches, and work to understand people‘s
beliefs to gain their commitment, managers
78
SINERGI, Volume 7, Nomor 2 MARET 2017
promoter stability, exercise authority, and
work to get things accomplished. Therefore,
management and leadership need different
types of people(Zaleznik, 1977).
In 1983, Watson stated that managers
take care of structure and system, but leaders
focus on the communication, motivation, and
shared goals. In addition, Watson mentioned
that 7S strategy which include; strategy,
structure, systems, shared values, skills, and
style; is more effective for leaders comparing
to managers. In 1985, Bryman added that
leadership is about strategic motivation.
Bennis and Nannus (1985) briefly describe the
differencesbetween the leaders and managersin
one sentence: "Leaders do the right things;
managers do things right." (p. 33).Moreover,
In 1989 Bennis stated that ―To survive in the
twenty-first century, we are going to need a
new generation of leaders
In 1987 John Kotter, a professor of the
Harvard Business School states that leadership
goes beyond routine tasks to cope with change,
whereas management is a regular formal
responsibility to cope with routine
complexity(Kotter, 1987). Kotter argues that
leadership is a process that aims to develop a
vision for the organization; align people with
that vision; and motivate people to action
through the basic need fulfilment(Kotter,
1990).
Kotter stated that ―Leadership is different
from management, but not for the reason most
people think. Leadership isn‟t mystical and
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
mysterious. It has nothing to do with having
charisma or other exotic personality traits. It‟s
not the province of a chosen few. Nor is
leadership necessarily better than management
or a replacement for it: rather, leadership and
management are two distinctive and
complementary activities. Both are necessary
for success in an increasingly complex and
volatile business environment (Kotter, 1990).‖
In contrast, the management is a process that
aims to control organization‘s formal functions
(Kotter, 2001).
Bernard Bass (1990) in his book "Bass
and Stogdill‘s Handbook of Leadership" states
that "Leaders manage and managers lead, but
the two activities are not synonymous.
Management functions can potentially provide
leadership; leadership activities can contribute
to managing. Nevertheless, some managers do
not lead, and some leaders do not manage". (p.
383). Other researchers mention that the leader
is inspiring, innovative, flexible, courageous
and independent, and has a soul, the passion
and the creativity. While the manager is
deliberate, authoritative, consulting,
analytical, and stabilizing, and has the rational,
the mind, and the persistence (Capowski,
1994).In 1997, Robert House states that
management consists of controlling daily
problems, and implementing leader's vision
(House, 1977).Furthermore, Warren Bennis a
business professor at the University of
Southern California, (1997) sharps the
difference by using 12 paired contrasts listed
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SINERGI, Volume 7, Nomor 2 MARET 2017
in his book "Learning to Lead: A Workbook
on Becoming a Leader", (p. 9).
In 2003, Covey stated that the leader
believes in vision and goals, has strong values,
and works to make sure that his attendants are
in the right direction. Moreover, in 2004,
Ylitalo said that managers focus on structural,
tools, and work related processes.
Nevertheless, leaders involved in the
professional work, social and communicative
aspects. In 2004, Hull and Ozeroff viewed
leaders as good communicators because they
spend more time with their followers. In
addition, leaders are aware their team members
professional strengths, weaknesses, emotional
standings, their place in the organization which
allow them to know how to motivate them.
Gosling and Murphy (2004) think that the
leaders work to make the organization ready to
face any new change, and ensure the
development of a sense of security. In 2007,
Warren Bennis wrote that ―Managers do things
right, while leaders do the right things‖ (p. 12).
In summary, while management and
leadership share similar roles, it is important to
make a distinction between those two
functions. The primary mission of both leaders
and managers is to control and influence other
people. The most important difference
between managers and leaders is their
approach to achieve the goals. Managers
exercise their control through formal power,
but leaders use their vision, and by inspiration,
motivation to align their followers (The
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
Guardian, 2013). Balancing the role of both
management and leadership are critical to the
organization‘ ssuccess. Moreover, sometimes
it is essential for managers to be successful to
work as leaders (Mullins, 2010)
What is the difference between
management and leadership? It is a question
that has been asked more than once and also
answered in different ways. The biggest
difference between managers and leaders is the
way they motivate the people who work or
follow them, and this sets the tone for most
other aspects of what they do.
Many people, by the way, are both. They
have management jobs, but they realize that
you cannot buy hearts, especially to follow
them down a difficult path, and so act as
leaders too.
Managers have subordinates
By definition, managers have
subordinates - unless their title is honorary and
given as a mark of seniority, in which case the
title is a misnomer and their power over others
is other than formal authority.
Authoritarian, transactional style
Managers have a position of authority
vested in them by the company, and their
subordinates work for them and largely do as
they are told. Management style is
transactional, in that the manager tells the
subordinate what to do, and the subordinate
does this not because they are a blind robot,
but because they have been promised a reward
(at minimum their salary) for doing so.
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SINERGI, Volume 7, Nomor 2 MARET 2017
Work focus
Managers are paid to get things done
(they are subordinates too), often within tight
constraints of time and money. They thus
naturally pass on this work focus to their
subordinates.
Seek comfort
An interesting research finding about
managers is that they tend to come from stable
home backgrounds and led relatively normal
and comfortable lives. This leads them to be
relatively risk-averse and they will seek to
avoid conflict where possible. In terms of
people, they generally like to run a 'happy
ship'.
Leaders have followe rs
Leaders do not have subordinates - at
least not when they are leading. Many
organizational leaders do have subordinates,
but only because they are also managers. But
when they want to lead, they have to give up
formal authoritarian control, because to lead is
to have followers, and following is always a
voluntary activity.
Charis matic, transformational style
Telling people what to do does not
inspire them to follow you. You have to appeal
to them, showing how following you will lead
them to their hearts' desire. They must want to
follow you enough to stop what they are doing
and perhaps walk into danger and situations
that they would not normally consider risking.
Leaders with a stronger charisma find it
easier to attract people to their cause. As a part
Moh. Barid Nizarudin Wajdi
THE DIFFERENCES BETWEEN MANAGEMENT AND LEADERSHIP
of their persuasion they typically promise
transformational benefits, such that their
followers will not just receive extrinsic
rewards but will somehow become better
people.
People focus
Although many leaders have a
charismatic style to some extent, this does not
require a loud personality. They are always
good with people, and quiet styles that give
credit to others (and takes blame on
themselves) are very effective at creating the
loyalty that great leaders engender.
Although leaders are good with people,
this does not mean they are friendly with them.
In order to keep the mystique of leadership,
they often retain a degree of separation and
aloofness.
This does not mean that leaders do not
pay attention to tasks - in fact they are often
very achievement- focused. What they do
realize, however, is the importance of
enthusing others to work towards their vision.
Seek risk
In the same study that showed managers
as risk-averse, leaders appeared as risk-
seeking, although they are not blind thrill-
seekers. When pursuing their vision, they
consider it natural to encounter problems and
hurdles that must be overcome along the way.
They are thus comfortable with risk and will
see routes that others avoid as potential
opportunities for advantage and will happily
break rules in order to get things done.
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SINERGI, Volume 7, Nomor 2 MARET 2017
A surprising number of these leaders had the rapid changes and different need for this
some form of handicap in their lives which century.
they had to overcome. Some had traumatic
childhoods, some had problems such as Conclusion
dyslexia, others were shorter than average. Every organization needs managers and
This perhaps taught them the independence of leaders, and their roles should be viewed as
mind that is needed to go out on a limb and not complementary to one another.
worry about what others are thinking about The optimal effectiveness of an
you. organization can only reach if the organization
This table summarizes the above (and has strong leadership and strong management.
more) and gives a sense of the differences In today‘s dynamic workplace, organizations
between being a leader and being a manager. need leaders to cope with new challenges, and
This is, of course, an illustrative transform organizations in order to achieve a
characterization, and there is a whole spectrum competitive advantage in the marketplace. In
between either ends of these scales along addition, organizations need managers to
which each role can range. And many people maintain a smoothly functioning workplace,
lead and manage at the same time, and so may and to utilize resources effectively. Finally, a
display a combination of behaviors. well balanced organization should have a mix
of leaders and managers to succeed
From my point view, I think that there (Kotterman, 2006).
are some individuals who have the capacity to
fulfil the roles of both a leader and a manager. BIBLIOGRAPHY
In my experience, leaders used to create the Bass, B. (1985). Leadership and performance
new changes, and managers used to apply beyond expectations. New York, Free Press,
them. However, new changes implantation is 1985.
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apply the new changes. In addition, I totally Leadership: Theory, Research & Managerial
agree with those who ask for the balance Applications, 3rd Ed., The Free Press, New
between the manager‘s roles and the leader‘s York, NY.
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outcomes. Moreover, I believe that leadership Theory, research, and managerial
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especially in the business world; to cope with Schuster.

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Bennis, W. G. and Nanus, B. (1985), Leaders: The Gosling, J. & Murphy, A. (2004). Leading
Strategies for Taking Charge, Harper and Continuity. Working Paper: Centre for
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Maxwell, J C (1998) 21 Irrefutable Laws of
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84
CHATRAPATI SHAHU JI MAHARAJ UNIVERSITY, KANPUR

Management Concept And Processes

Unit 1 –Introduction And Approaches
To Management
Mba 1st Semester
MANAGEMENT

• Management is a universal phenomenon. It is a very popular and widely used term. All organizations -
business, political, cultural or social are involved in management because it is the management which helps
and directs the various efforts towards a definite purpose.
• According to Harold Koontz, “Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which people can perform and
individuals and can co-operate towards attainment of group goals”.
• According to F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done
in the best and cheapest way”.
• Management is a purposive activity. It is something that directs group efforts towards the attainment of certain
pre - determined goals. It is the process of working with and through others to effectively achieve the goals of
the organization, by efficiently using limited resources in the changing world. Of course, these goals may vary
from one enterprise to another.
E.g.: For one enterprise it may be launching of new products by conducting market surveys.
• Management involves creating an internal environment: - It is the management which puts into use the
various factors of production. Therefore, it is the responsibility of management to create such conditions
which are conducive to maximum efforts so that people are able to perform their task efficiently and
effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation
of rules & regulations etc.
• Management is a process of planning, decision making,
organizing, leading, motivation and controlling the human
resources, financial, physical, and information resources of
an organization to reach its goals efficiently and effectively.
• Threefold Concept of Management:
 Management is an Economic Factor
 Management is a System of Authority
 Management is a Class and Status System
• Wherever there is management, there is a purpose.
Management deals with the achievement of something
definite expressed as a goal or objective.
• Management can neither be replaced nor substituted by
anything else.
• Conversely, the identity of management may also be felt by
its absence or by the presence of its direct opposite
mismanagement. The consequence of mismanagement is
anybody’s guess.
CONCEPT OF MANAGEMENT
• The concept of management can be defined as the following ways:
 Management is an art of getting things done: Management is the art of getting things done through
those people who can be manager or non-manager. At the level of the chief executive, the work is done
through the functional managers, things at the middle level are implemented through the supervisors and at
the lower level of the management through the workers.
 Management as a Process: Management as a process because it involves many tasks. It refers to everyone, a
manager separates. Various works done by managers to efficiently utilize available tasks and human resources
so that desired objectives can be achieved are expressed as management.
 Management as a Discipline: Sometimes the term ‘management’ is not used to do the activity, nor is it done
to the workers who do it, but rather to the knowledge, practice, and discipline. In this sense, the concept of
management refers to management principles and practices as a subject of study.
 Management: Art or science? Management includes the characteristics of both art and science. Although
some aspects of management make it a science, some others who incorporate the application of the skill make
it an art. Every discipline of art is always supported by science, which is the basic knowledge of that art..
 Management as an Art: Management can be an art in this sense that it has the following characteristics:
• It is also practiced and performed like other arts. Knowledge should be learned and practiced, just like
medical or legal practitioners practice their respective science.
• Managers gain experience by constantly experiencing the continuous application of knowledge and new
experiences.
• The application calls for innovation and creativity.
• The fourth reason is that in many situations, the theoretical knowledge of management cannot be sufficient or
relevant to solve the problem. This can be due to the complexity or unique nature of the problem.
 Management as a science: Management as science has the following characteristics:
• Its principles, generalizations, and concepts are organized. In this case, the manager can manage the position
or organization in a systematic and scientific manner.
• Its theories, generalizations, and concepts are prepared on the basis of observation, research, analysis, and
experimentation, as is the case with the principles of other sciences.
• Like other sciences, management theory is also based on the cause and effect relationship. It states that similar
causes will cause similar effects. Suppose if the workers are paid more (cause), then production is more
(effect).
• Management theories are codified and systematic, and they can be transferred from one to the other and
taught.
• The principles of management apply universally to all types of organizations.
• In an organization, there is a set of basic goals which are the root causes of its existence. Management unites
the efforts of different people in the organization towards achieving these goals.
• Management is a dynamic task and it has to adapt to the changing environment. To be successful, an
organization has to change itself and its goals according to the needs of the environment.
NATURE OF MANAGEMENT
• Universal: Management is universal as it’s common and crucial in all organizations. You can apply the
principles of management in all situations regardless of the nature, location, and size of the
enterprise.Management’s universality implies that its skills are transferable from one person to another
which allows managers to get trained and develop those skills.

• Social: Management involves handling people organized in a group. All the individuals a manager has to
interact with have various levels of dynamism, understanding, and sensitivity.Management requires retaining,
motivating, and developing people at work and ensuring their satisfaction as social beings.
• Intangible: Management is intangible. It’s not a thing or object which you can touch but you can feel its
presence through the results of its efforts as adequate, orderly work output and employee satisfaction.
• Dynamic: Management is dynamic as it must remain equipped to face various changes in the corporate
environment caused by social, economic, technological, political, or human factors.
• Goal-Oriented: All the activities performed in management processes are goal-oriented. They all focus on
achieving specific goals. Management processes aim to achieve the organization’s goals that are practical and
realistic.
• Production Factor: Managers are vital to utilizing capital and labour. That’s why management is a
significant factor of production.
• Co-ordinating: Management requires coordination between groups of people. All physical and human
resources require efficient coordination to achieve optimal levels of productivity.
• Crucial Part of Society: Society has a great impact on management and similarly, management has an
impact on society. Managers are responsible for contributing to society through charity, organization, and
growth.
• Professional: Managers must have the proper knowledge and managerial training.They must also conform to
the code of conduct and be conscious of their humans and social responsibilities.
• Process: Management consists of a sequence of actions that we conduct towards an end. Handles the planning
and regulation of the production process because, without them, the final product wouldn’t satisfy the
customers, causing the business to close its doors. Deals with controlling and coordinating all office activities
to achieve the business’s goals. It organizes the office and its tasks so that the management can achieve its
objectives efficiently. It involves activities and processes that use and control the enterprise’s manpower.
Human resources are among the most vital factors determining an organization’s success. Focuses on
managerial activities that utilize and procure the finances of a business. The finances of an enterprise can
become highly complicated that’s why effective financial management becomes crucial for its goal
achievement.
Managerial Roles in Management
Managerial roles are specific behaviors associated with
the task of management. Managers adopt these roles to
accomplish the basic functions of management just
discussed—planning and strategizing, organizing,
controlling, and leading and developing employees. One
of the earliest and most enduring descriptions of
managerial roles comes from Henry Mintzberg,who (as
we have already noted) shadowed managers observing
what they did during the day.
Mintzberg developed a list of roles that he grouped into
three categories: interpersonal roles, informational roles,
and decisional roles.
Mintzberg developed a list of roles that he grouped into
three categories Mintzberg emphasized that managing is
an integrated activity, so these roles are rarely distinct.
Visiting clients, for instance, usually relates to two or
more roles simultaneously.
INTERPERSONAL ROLES

Interpersonal roles are roles that involve interacting with other people inside and outside the organization. Management jobs are people-intensive:
Research suggests that managers spend somewhere between 66 and 80 % of their time in the company of others. Managers can use their networks
to help coordinatethe work of their units with others, to gain access to valuable information, andmore generally to get things done and further their
own agendas within the organization.

 Mintzberg identified three types of interpersonal roles: a figurehead role, a leader role, and a liaison role.

 Managers at all levels are figureheads . They greet visitors, represent the company at community events, serve as spokespeople, and function
as emissaries for the organization.

 Leadership is more than a function that managers must fulfill.Managers also take on a leadership role to get things done within organizations.
Managers behave as leaders to influence, motivate, and direct others within organizations and to strategize, plan, organize, control, and
develop. A central task of leaders is to give their organizations a sense of direction and purpose.They do this by identify and articulating
strategic visions for the organizations (by strategizing) and then by motivating others to work toward this vision. This is exactly what Rose
Marie Bravo did at Burberry: She gave the organization a strategic vision, repositioning it as a hip, high-end brand, and she engaged Burberry’s
employees in that vision.

 In their liaison role managers connect with people outside their immediate units.These may be the managers of other units within the
organization or people outside the organization,such as suppliers, buyers, and strategic partners. An important purpose of suchliaisons is to
build a network of relationships.
INFORMATIONAL ROLES
Informational roles are concerned with collecting, processing, and disseminating information. Managers collect information from various sources
both inside and outside the organization, process that information, and distribute it to others who need it.

 Mintzberg divided the information roles of management into three types: monitor, disseminator, and spokesperson.

 As monitors managers scan the environment both inside and outside the organization. By monitoring the external competitive and internal
organizational environment for information, managers try to gain knowledge about how well the organization is performing and whether any
changes in strategy or operational processes are required. Managers rely on both formal and informal channels to collect the information
required for effective monitoring. Formal channels include the organization’s own internal accounting information systems and data provided
by important external agencies.

 One thing managers do with this information is disseminate it to direct reports and others inside the organization. In their dissemination role
managers regularly inform staff about thecompany’s direction and sometimes about specific technical issues. At the supervisory level, the
disseminator role often takes the form of one-to-one informal conversations with specificemployees about particular matters.

 In their spokesperson role, managers deliver specific information to individuals and groups located outside their department or organization.
Sales managers communicate with business partners regarding new sales strategies. Division heads give presentations to their colleagues in
other divisions about strategies and resource requirements.
DECISIONAL ROLES

The information collected through monitoring is directed toward discovering problems or opportunities, weighing options, making decisions, and
ensuring that those decisions are put into action. They translate the people and information into processes with the purpose of moving the
organization toward its strategic goals.

 Mintzberg identified four decision roles: entrepreneur, disturbance handler, resource allocator, and negotiator.
 To survive in competitive markets, firms must be entrepreneurial. They must pioneer new products and processes and quickly adopt those
pioneered by others. In their role as entrepreneurs, managers must make sure that their organizations innovate and change when
necessary,developing or adopting new ideas and technologies and improving their own products and processes. They must make decisions that
are consistent with such entrepreneurial behavior.
 Managing is full of paradoxes, and this is partly apparent when we contrast the proactive entrepreneurial role with the reactive disturbance
handler role. Disturbance handling includes addressing unanticipated problems as they arise and resolving them expeditiously.
 An important class of management decisions involves resource allocation . Organizations never have enough money, time, facilities, or people
to satisfy all their needs. A crucial decision responsibility of managers is to decide how best to allocate the scarce resources under their control
between competing claims in order to meet the organization’s goals.
 Negotiating is continual for managers. They negotiate with suppliers for better delivery, lower prices, and higher-quality inputs. Managers who
are successful when making negotiation decisions can lower input costs, strike better deals with customers, gain access to more high-quality
resources within the organization, and better organize their own subordinates. Skilled negotiators are more likely to successfully implement
strategy and raise the performance of their organizations.
Evolution of Management Theory
Evolution of the management thought is a process that began in the earlier days of humans. It began when the man found the need
to live in the groups. Then, mighty men soon organized the masses and distributed them among the groups. The sharing and
distribution process completed according to the strength, intelligence, and mental capabilities of the masses. Thus, with the
beginning of civilization, the effective practice of management also began.

Evolution of Management Thought:

Pre-scientific
management Classical
theory
period

Bureaucratic
Neo-classical
Model of
theory
MaxWeber
 Pre-Scientific
Management Period
As the industrial revolution occurred in the
18th century, there was a huge impact on
management. The scenario changed the
method of raising capitals, organizing labour,
and goods’ production for the individuals and
businesses. Entrepreneurs then had access to
production factors like land, labour, and
capital. The final step was only to make some
effort for combining these factors to achieve
the target successfully.But, after the industrial
revolution, the newer dimension taken by
management is because of the involvement of
certain notable personalities who introduced
some effective ideas and approaches for
giving management an acceptable and precise
direction..
The Classical Theory
Robert Owens, Charles Babbage, and other
prominent personalities are regarded as
management’s pioneers. However, their
contribution to the evolution of management is
lower. Further, by the last decade of 19th century,
the science of management began, and with it,
some professionals like H. L. Grant, F. W. Taylor,
Emerson, and others entered for the
establishment of scientific management.Further,
during the classical period, management thought
focused on standardization, job content, labour
division, and scientific approaches for the
organization. It also related closely to the
industrial revolution and the rise of large-scale
enterprises
 The Neo-Classical Theory The Bureaucratic Model

This duration of the evolution of the Max Weber, a German sociologist, proposed
management thought is a better version of the bureaucratic model. This includes a
classical theory. It is a modified version of system of labour division, rules, authority
classical theory with several improvements. hierarchy, and employees’ placement based
The classical theory focused mainly on the on their technical capabilities.
areas of job including physical resources and
their management, but neo-classical theory
focuses on employee relationships in the work
ecosystem.

Conclusion :Evolution of Management Theory

Organizations shaped effectively and the writings of some prominent writers consisted of the
management and governance of various kingdoms. These descriptions formed the literature that
helped develop the management theories. Several heads of religions, political affairs, and military
also gave the management models. For example, the books like Sun Tzu’s “The Art of War” and
Chanakya’s Arthashastra used some managerial purposes and the governance of the kingdom
concerning the policy formulations respectively.
Levels of Management

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

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
 Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate
source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and
coordinating functions.

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

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

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

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

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

• Assigning of jobs and tasks to various workers.

• They guide and instruct workers for day to day activities.
• They are responsible for the quality as well as quantity of production.
• They are also entrusted with the responsibility of maintaining good relation in the organization.
• They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher
level goals and objectives to the workers.
• They help to solve the grievances of the workers.
• They supervise & guide the sub-ordinates.
• They are responsible for providing training to the workers.
• They arrange necessary materials, machines, tools etc for getting the things done.
• They prepare periodical reports about the performance of the workers.
• They ensure discipline in the enterprise.
• They motivate workers.
• They are the image builders of the enterprise because they are in direct contact with the workers.
Management Skills
Management skills can be defined as certain attributes or abilities that an executive should possess in order to fulfill specific tasks
in an organization. They include the capacity to perform executive duties in an organization while avoiding crisis situations and
promptly solving problems when they occur. Management skills can be developed through learning and practical experience as a
manager. The skills help the manager to relate with their fellow co-workers and know how to deal well with their subordinates,
which allows for the easy flow of activities in the organization.
Good management skills are vital for any organization to succeed and achieve its goals and objectives. A manager who fosters
good management skills is able to propel the company’s mission and vision or business goals forward with fewer hurdles and
objections from internal and external sources.
Types of Management Skills

According to American social and organizational psychologist Robert Katz, the three basic types of management skills include:

 Technical Skills
Technical skills involve skills that give the managers the ability and the knowledge to use a variety of techniques to achieve their objectives. These
skills not only involve operating machines and software, production tools, and pieces of equipment but also the skills needed to boost sales, design
different types of products and services, and market the services and the products.

 Conceptual Skills
These involve the skills managers present in terms of the knowledge and ability for abstract thinking and formulating ideas. The manager is able to
see an entire concept, analyze and diagnose a problem, and find creative solutions. This helps the manager to effectively predict hurdles their
department or the business as a whole may face.

 Human or Interpersonal Skills

The human or the interpersonal skills are the skills that present the managers’ ability to interact, work or relate effectively with people. These skills
enable the managers to make use of human potential in the company and motivate the employees for better results.
Examples of Management Skills

There is a wide range of skills that management should possess to run an organization effectively and efficiently. The following are
six essential management skills that any manager ought to possess for them to perform their duties:

 Planning

Planning is a vital aspect within an organization. It refers to one’s ability to organize activities in line with set guidelines while still remaining
within the limits of the available resources such as time, money, and labor. It is also the process of formulating a set of actions or one or more
strategies to pursue and achieve certain goals or objectives with the available resources.
The planning process includes identifying and setting achievable goals, developing necessary strategies, and outlining the tasks and schedules on
how to achieve the set goals. Without a good plan, little can be achieved.

 Communication

Possessing great communication skills is crucial for a manager. It can determine how well information is shared throughout a team, ensuring that
the group acts as a unified workforce. How well a manager communicates with the rest of his/her team also determines how well outlined
procedures can be followed, how well the tasks and activities can be completed, and thus, how successful an organization will be. Communication
involves the flow of information within the organization, whether formal or informal, verbal or written, vertical or horizontal, and it facilitates
smooth functioning of the organization. Clearly established communication channels in an organization allow the manager to collaborate with the
team, prevent conflicts, and resolve issues as they arise. A manager with good communication skills can relate well with the employees and thus,
be able to achieve the company’s set goals and objectives easily.
 Decision-making
Another vital management skill is decision-making. Managers make numerous decisions, whether knowingly or not, and making decisions is a key
component in a manager’s success. Making proper and right decisions results in the success of the organization, while poor or bad decisions may
lead to failure or poor performance.

For the organization to run effectively and smoothly, clear and right decisions should be made. A manager must be accountable for every decision
that they make and also be willing to take responsibility for the results of their decisions. A good manager needs to possess great decision-making
skills, as it often dictates his/her success in achieving organizational objectives.

 Delegation
Delegation is another key management skill. Delegation is the act of passing on work-related tasks and/or authorities to other employees or
subordinates. It involves the process of allowing your tasks or those of your employees to be reassigned or reallocated to other employees
depending on current workloads. A manager with good delegation skills is able to effectively and efficiently reassign tasks and give authority to
the right employees. When delegation is carried out effectively, it helps facilitate efficient task completion.

Delegation helps the manager to avoid wastage of time, optimizes productivity, and ensures responsibility and accountability on the part of
employees. Every manager must have good delegation abilities to achieve optimal results and accomplish the required productivity results.
 Problem-solving
Problem-solving is another essential skill. A good manager must have the ability to tackle and solve the frequent problems that can arise in a
typical workday. Problem-solving in management involves identifying a certain problem or situation and then finding the best way to handle the
problem and get the best solution. It is the ability to sort things out even when the prevailing conditions are not right. When it is clear that a
manager has great problem-solving skills, it differentiates him/her from the rest of the team and gives subordinates confidence in his/her
managerial skills.

 Motivating
The ability to motivate is another important skill in an organization. Motivation helps bring forth a desired behavior or response from the
employees or certain stakeholders. There are numerous motivation tactics that managers can use, and choosing the right ones can depend on
characteristics such as company and team culture, team personalities, and more. There are two primary types of motivation that a manager can use.
These are intrinsic and extrinsic motivation.
Macro Environment

The general environment within the

economy that influences the working,
performance, decision making and strategy
of all business groups at the same time is
known as Macro Environment. It is dynamic
in nature. Therefore it keeps on changing.
It constitutes those outside forces that are
not under the control of the firm but have a
powerful impact on the firm’s functioning. It
consists of individuals, groups, organizations,
agencies and others with which the firm
deals during the course of its business.
EXAMPLE OF MACRO ENVIRONMENT

A government can enact tariffs that increase the cost of an imported

good a company needs to manufacture its products. Rather than
paying the tariff, the company can look for a domestic source for
these goods that is cheaper than the imported good. If they can't find
a domestic source, they will have to purchase the more expensive
imported goods. In many cases, the company will need to pass the
additional cost on to the consumer in the form of increased product
prices. This could reduce the company's revenue if sales decrease
because of the company's higher prices.
MICRO ENVIRONMENT

Microenvironment refers to the environment which is in

direct contact with the business organization and can
affect the routine activities of business straight away. It
is associated with a small area in which the firm
functions.
The microenvironment is a collection of all the forces
that are close to the firm. These forces are very
particular for the said business only. They can influence
the performance and day to day operations of the
company, but for the short term only. Its elements
include suppliers, competitors, marketing
intermediaries, customers and the firm itself.
ELEMENTS OF MICRO ENVIRONMENT
Elements of Micro Environment:
The elements of the micro environment are closely associated with the company and they do not affect all the companies
operating in the industry, in a similar manner, as some factors are specific to the firm.
So we can say that the micro environment is one which the firm addresses in its specific arena, such as the industry or the
strategic group.

 COMPETITOR
Competition is what keeps the firm thriving. Competitors are the rival sellers operating in the same industry. It must be noted
that the nature and intensity of competition highly influence the firm’s products and services. Product Differentiation is
something that helps the firm to beat the cut-throat competition in the market.

 SUPPLIERS
Suppliers are the one who provides inputs such as material, components, labour and other stock of goods to the firm, which is
required to undertake manufacturing activities. when there is uncertainty as to the supply constraints, it usually builds pressure
on the firms and they are required to maintain high inventories, which leads to cost increases.
 Customers

The success of the organization greatly depends on how effectively the firm fulfils the needs and
wants of the customers, which is profitable to the firm and also provides value to the customer. The firm
needs to analyze what the customers expect from their products and services so that the firm can satisfy
them.
It must be noted that without customers no business can survive for a long time. So, the primary
objective of the firm is to create and retain customers, to keep itself going

 Intermediaries

Intermediaries refer to marketing intermediaries which cover agents, merchants, distributors, dealers,
wholesalers, etc. that participate in the company’s supply chain, in stocking and transporting the goods
from their source location to their destination.
It acts as a link between the business organization and the ultimate consumer.
 Shareholders
Shareholders are the real owners of the company who invest their money in the company’s business, by
purchasing the shares, for which they are paid a dividend every year as a return. Shareholders have the right to
vote in the company’s general meeting
 Employees
Placing the right person at the right job and retaining them for the long term by keeping the staff motivated is
very important for the strategic planning process. Training and development act as a guide to the firm’s
employees which ensures an up-to-date workforce.
A qualified and competent workforce can help the firm to achieve success with little efforts.
 Media
We all know the power of media these days, it can make or break an organization or its products/services
overnight.
Management of media whether electronic media, press media or social media is really important not just to
create a positive and clean image of the company and its products in front of the audience but also to support
the firm in building a good reputation in the market. The right use of media can do wonders for the company
and boost its sales. When the firm competes with the firm operating in the same industry, with the same micro
environmental factors, the relative success of the company is based on the relative effectiveness of the
company in dealing with these factors.
Functional Areas of Management

1. Production Management: The term ‘production’ was closely associated with manufacturing physical
goods and, therefore, production management was also known as manufacturing management. Today, goods are not only
physical goods but also services. Production is related to both goods and services and, therefore, production management
is known as operations management. It deals with conversion of inputs into outputs. It is a “set of components whose
function is to transform a set of inputs into some desired output.” “It is the management of productive processes that
convert inputs into goods and services.” The inputs are the men, material, equipment, technical knowledge etc. The
conversion process that transforms the inputs can be physical transformation in manufacturing operations, locational
transformation in transportation, exchange transformation in retailing, storage transformation in warehousing,
informational transformation in legal firms, physiological transformation in medicine, and gratification transformation in
entertainment. Outputs are the goods and services produced through the conversion process. Outputs also include by-
products of goods, whether in the form of pollutants or wastes. This input-output conversion process is also affected by
the environmental forces like Government regulations, economic-political-legal framework of the country, policies of
competitors, international policies, etc. The feedback mechanism helps to know effectiveness of the conversion process
and whether or not it requires changes in its components.
2. Financial Management: All activities (production, marketing or personnel) require
constant flow of funds. Finance department takes care of financial requirements of the enterprise. It
makes arrangements for acquisition and effective utilisation of funds. With increase in the size of
business, its relationship with the internal and external environment, product diversification and
differentiation, Government regulations and technological developments, finance manager assumes
important role in management of finance. Financial management deals with management of finance. It is
“the operational activity of a business that is responsible for obtaining and effectively utilizing the funds
necessary for efficient operations.”

3. Personnel/Human Resource Management: Traditionally what was known

as personnel management is now replaced with human resource management (HRM) today. Initially, in
small organisations all the managerial functions of planning, organising, staffing, directing, and
controlling (for all the functional areas of management) were performed by the managers but with
increase in size of the organisations, managers could not look after all the functional areas. Personnel
specialists or senior managers were appointed to look into matters related to personnel policies and
separate departments called personnel departments were created. Human resource department performs
the following functions:
(a) Human resource planning or manpower planning balances the demand for employees in qualitative
and quantitative terms and its supply from various internal and external resources. Internal sources fill
organisational posts from within the organisation and external sources provide labour from outside
sources such as labour market.
(b) Recruitment analyses requirements of the job, prepares job description and invites applications from those
whose qualifications match the job description.

(c) Selection selects the most suitable person out of those who have applied for the job. Written tests and
interviews are conducted to select the suitable candidates.

(d) Performance appraisal assesses the performance with the targeted performance to check deviations and
provide training to improve the performance.

(e) Training enhances the knowledge and skills of employees. It enables them to effectively manage the
organisational positions and promotes their growth. Training programmes can be conducted on-the-job or
external agencies can provide training to the employees.

(f) Rewards deal with the pay structure for each job. Rewards vary with the skill, knowledge and competence for
each job position.
(g) Industrial relations maintain harmonious relations between the management and employees. Grievances or disputes are
settled by the personnel manager by following legal provisions and rules.

(h) Employee communication and participation communicates managerial decisions to employees and allows them to
participate in the decision-making processes.

(i) Personnel records maintain record of employees regarding their qualification, experience and achievements. It is
maintained by the personnel department. This serves as the basis for internal recruitment where employees can be placed at
jobs within the organisation. These records help in matching job description with job specification, that is, matching the
requirement of the job with qualifications of the person.

4. Marketing Management: Traditionally, markets were a place for exchange of goods and services
between sellers and buyers to the mutual benefit of both. Today, marketing is exchange of values between the seller and the
buyer. Value implies worth related to the goods and services being exchanged. The buyer will pay for the goods if they
have value for him. Marketing management is “planning, organising, controlling and implementing of marketing
programmes, policies, strategies and tactics designed to create and satisfy the demand for the firms’ product offerings or
services as a means of generating an acceptable profit.” It deals with creating and regulating the demand and providing
goods for which customers are willing to pay a price worth their value.
Elements of marketing management: The basic elements of marketing
management are:
• (a) Customer orientation: The focus of marketing function is to sell goods
desired by consumers; the goods that satisfy their needs.
• (b) Integrated effort: Marketing function should be co-ordinated with other
functional areas of production, finance and personnel management.
• (c) Profitability: While the consumer wants a product that satisfies his
needs, seller sells a product which provides profit. A successful marketing
strategy should provide profits to the marketer along with customer
satisfaction.
• (d) Viability: The goods should not only earn profits, they should also build
reputation of the firm in terms of quantity, quality and the price at which
goods are sold.
Management as a Profession
Over a large few decades, factors such as growing size of business unit, separation
of ownership from management, growing competition etc have led to an
increased demand for professionally qualified managers. The task of manager has
been quite specialized. As a result of these developments the management has
reached a stage where everything is to be managed professionally. A profession
may be defined as an occupation that requires specialized knowledge and
intensive academic preparations to which entry is regulated by a representative
body. The essentials of a profession are: Specialized Knowledge - A profession
must have a systematic body of knowledge that can be used for development of
professionals. Every professional must make deliberate
efforts to acquire expertise in the principles and techniques. Similarly a
manager must have devotion and involvement to acquire expertise in the science of
management.
Formal Education & Training - There are no. of institutes and universities to impart education & training
for a profession. No one can practice a profession without going through a prescribed course. Many institutes of
management have been set up for imparting education and training. For example, a CA cannot audit the A/C’s unless he
has acquired a degree or diploma for the same but no minimum qualifications and a course of study has been prescribed
for managers by law. For example, MBA may be preferred but not necessary.

Social Obligations - Profession is a source of livelihood but professionals are primarily motivated by the desire to
serve the society. Their actions are influenced by social norms and values. Similarly a manager is responsible not only to
its owners but also to the society and therefore he is expected to provide quality goods at reasonable prices to the society.

Code of Conduct - Members of a profession have to abide by a code of conduct which contains certain rules and
regulations, norms of honesty, integrity and special ethics. A code of conduct is enforced by a representative association
to ensure self discipline among its members. Any member violating the code of conduct can be punished and his
membership can be withdrawn. The AIMA has prescribed a code of conduct for managers but it has no right to take legal
action against any manager who violates it.

Representative Association - For the regulation of profession, existance of a representative body is a must.
For example, an institute of Charted Accountants of India establishes and administers standards of competence for the
auditors but the AIMA however does not have any statuary powers to regulate the activities of managers.
THANK YOU
CONCEPT OF PLANNING
 PLANNING PROCESS

There are seven steps in the process of planning, which

are as follows:
1. Setting up of objective.

2. Developing premises.

3. Listing the various alternative for achieving the

objective.
4. Evaluation of different alternative.
5. Selecting an alternative.

6. Implement the plan.

7. follow-Up
1. Setting up of the objective – in planning function
manager begins with setting up of objective because all
the policies, procedure and method are for achieving
objective only. After setting up the goals,the clearly
defined goals are communicated to all the employees.
2. Developing premises – premises refer to making
assumptions regarding future. Premises are the base on
which plans are made. It is a kind of forecast made
keeping in view Existing plans and any past information
about various policies. There should be total agreement
on all the assumptions.
3. Listing the various alternative for achieving the objective
- after setting up of objective the manager make A list of
alternative through which the organisation can achieve
its objective as there are many ways to achieve the
objective And manager must know all the way to reach
the objective.
4. Evaluation of different alternative – After making the list of various
Alternative along with the assumptions supporting them, the manager
Start evaluating each and every alternative And note down the Negative
and positive aspects of every alternative.
5. Selecting an alternative – the best alternative is selected but as such
there is no mathematical formula to select the best alternative. The most
ideal plan is most feasible, profitable and with least Negative alternative.
6. Implement the plan – the manager prepare Or draft the main and
supportive plans on paper but there is no use of these plan until and
unless these are put in action. To implement, the manager start
communicating the plan to all the employees.
7. Follow up – planning is a continous Process so the manager job does
not get over simply by putting the plan into action. The manager monitor
the plan carefully while its is implemented. During the follow up many
adjustment are made in the plan.
 Types of Planning
(i) Operational Planning
“Operational plans are about how things need to
happen,” motivational leadership speaker Mack Story
said at LinkedIn. “Guidelines of how to accomplish the
mission are set.”This type of planning typically
describes the day-to-day running of the company.
Operational plans are often described as single use
plans or ongoing plans.

(ii) Strategic Planning

“Strategic plans are all about why things need to
Story said. “It’s big picture, long-term thinking. It
highest level with defining a mission and casting a
vision.”Strategic planning includes a high-level
entire business. It’s the foundational basis of the
and will dictate long-term decisions.
 (iii) Tactical Planning
 “Tactical plans are about what is going to happen,” Story
said. “Basically at the tactical level, there are many focused,
specific, and short-term plans, where the actual work is
being done, that support the high-level strategic plans.”
 Tactical planning supports strategic planning. It includes
tactics that the organization plans to use to achieve what’s
outlined in the strategic plan.

 (iv) Contingency Planning

 Contingency plans are made when something unexpected
happens or when something needs to be changed.
Business experts sometimes refer to these plans as a
special type of planning.
 Contingency planning can be helpful in circumstances that
call for a change. Although managers should anticipate
changes when engaged in any of the primary types of
planning, contingency planning is essential in moments
when changes can’t be foreseen.
 Significance of planning
 Makes the objectives clear and specific: planning clearly
specifies the objectives and the policies or activities to be
performed to achieve these objective in other words what is to
be done and how it is to be done are clarified in planning.

 Off setting the uncertainty and change: planning is

necessary to look ahead towards future and to take decisions
regard facing the expected changes/requirement of the future.
E.g. before coming of summer session producers started
production for the products to be used in summer.

 Plans facilitate decision-making: to achieve the objective

predetermined under planning, business has to take various
decisions by considering the available resources. If job may be
completed by using various alternatives (e.g. manually or by
machines) and the best alternative is decided by the
management, which is more helpful in achieving the objective.
 Provides basis of control: under controlling actual
performance is compared with the planed performance
(target/objective). So planning is the base of controlling
process.

 Leads to economy and efficiency: planning clarifies

the work and its method of doing. Resultantly it reduces
confusion and wastage of resources in the form of
thinking at the time of doing. So efficiency of the worker
will risen which will further result economy in
production.

 Facilitates integration: under planning proper

directions as per plane are provided to the
subordinates. Resultantly they all make effort towards
the achievement of preplanned objective. Such co-
ordination of sub-ordinates and their departments will
certainly help the organisation in achieving its objective.
 Encourages innovation and creativity: planning is the
process of thinking in advance and so plans are made to
achieve a target at future date by using latest methods and
technology to perform the industrial/business activities and so
plans lead to innovation.

 Facilitates control: planning facilitates the managers in

performing their function of control. Planning and control are
inseparable in the sense that unplanned action cannot be
controlled because control involves keeping activities on the
predetermined course by rectifying deviations from plans.
Planning facilitates control by furnishing standards of control. It
lays down objectives and standards of performance, which are
essential for the performance of control function.

 Improves motivation: the effective planning system ensures

participation of all managers, which improves their motivation.
It improves the motivation of workers also because they know
clearly what is expected of them. Moreover, planning also
serves as a good training device for future managers.
CONCEPT OF OBJECTIVE SETTING

Objective setting is when an organization plans

goals and how to meet them on a realistic
timescale. Objectives help define what each
department's and employee's responsibilities are
within the organization. Setting objectives is part
of establishing expectations for employees and
managing them, which is also called the
performance management process.
TYPES & PROCESS OF OBJECTIVE SETTING

Role objectives
Every role has an objective, which is usually part of the role's job description.
For example, a sever's role and role objective are to serve customers in order to
ensure customer satisfaction. Role objectives state what you need to do and
why it's important. Performance standards, such as speed and accuracy, help
evaluate role objectives.
Target objectives
Target objectives are measurable results from an employee. This could
measure output, income, service, cost reduction or other targets. For
example, you could measure a target objective for a jeweler by
measuring their sales amount per day.
Task objectives
Task objectives are objectives completed by finishing tasks or major projects before a
specified date. For example, a project's deadline can be an entire department's task
objective.
Behavioral goals
Managers often set behavioral goals for an entire department, but you can also
set them for an individual. Some behavioral expectations involve the use of
language, dress, actions and speech representative of the company and team.

Performance goals
Performance goals are objectives of improved performance and help define what
can help achieve better results. Sometimes, performance goals result in
performance improvement plans that specify what actions both employees and
management need to take.
Learning goals
Learning goals help specify areas where employees and managers can develop,
whether that be through workplace skills or knowledge. Management could arrange
this through specialized training sessions or courses.
 Planning Tools And Techniques
Management

OUTLINE

Environment Assessment Techniques

Environmental Scanning
Forecasting
Benchmarking
Budgeting
Scheduling
Break even Analysis
Assessing the Environment

• Environmental Scanning
– The screening of large amounts of information to anticipate and
interpret changes in the environment

– Competitor Intelligence

• The process of gathering information about competitors—who they are,

what they are doing, and how their actions will affect the organization
– Is not spying but rather careful attention to readily accessible
information from employees, customers, suppliers, the Internet, and
competitors themselves
Assessing the Environment (cont’d)
• Environmental Scanning (cont’d)
– Global Scanning

• Screening a broad scope of information on global forces

that might affect the organization

• Has value to firms with significant global interests

• Draws information from sources that provide global

perspectives on worldwide issues and opportunities
 Forecasting
– The part of organizational planning that involves creating predictions of outcomes
based on information gathered by environmental scanning
• Facilitates managerial decision making
• Is most accurate in stable environments
– Quantitative forecasting
• Applying a set of mathematical rules to a series of hard data to
predict outcomes (e.g., units to be produced)
– Qualitative forecasting
• Using expert judgments and opinions to predict less than precise outcomes (e.g.,
direction of the economy)

Making Forecasting More Effective

• Use simple forecasting methods

• Compare each forecast with its corresponding “no change” forecast
• Don’t rely on a single forecasting method
• Don’t assume that the turning points in a trend can be accurately identified
• Shorten the time period covered by a forecast
• Remember that forecasting is a developed managerial skill that supports decision
making
 Benchmarking
• The search for the best practices among competitors and non
competitors that lead to their superior performance
• By analyzing and copying these practices, firms can improve their
performance
 Budgeting
The budget should be aligned to the overall strategic plan of the company
and should include, inter alia, sales forecast, associated cost of sales,
operating overheads, and capital expenditure plan for the year. Key
performance indicators must be identified and monitored throughout the
year

Objective
Appreciate the importance of effective budget preparation and financial
planning
Understand Various sources of finance with their utilisation, based on the
cost of capital
Take sound investment decisions based on proper appraisal
Obtain an overview of the financial statements and management reports
to evaluate the company’s performance
Review key performance analysis applicable to business
Prepare competitor analysis, market trends, and related explanations for
top-level discussions
 Training Methodology

This collaborative Budgeting and Forecasting

Process, Tools and Techniques Course, will
comprise the following training methods:

Lectures
Seminars & Presentations
Group Discussions
Assignments
Case Studies & Functional Exercises
CONCEPT OF MBO
Management by objectives (MBO) is a strategic management
model that aims to improve the performance of an organization
by clearly defining objectives that are agreed to by both
management and employees. According to the theory, having a
say in goal setting and action plans encourages participation
and commitment among employees, as well as aligning
objectives across the organization.
Management by objectives (also known as management by
planning) is the establishment of a management information
system (MIS) to compare actual performance and achievements
to the defined objectives. Practitioners claim that the major
benefits of MBO are that it improves employee motivation and
commitment and allows for better communication between
management and employees.
Process of MBO and managerial
implication
MBO A strategic or managerial
Definition : model that defines clear and
concise objectives that are
accepted by management
and employees to improve the
performance of the
organization is called MBO
management by objectives.
 Process of MBO
The 6 steps of the MBO
process are:-
Manager
ial
implicati
on :-
CONCEPT OF DECISION MAKING
Decision making is the process of making choices by identifying a
decision, gathering information, and assessing alternative resolutions.
Using a step-by-step decision-making process can help you make more
deliberate, thoughtful decisions by organizing relevant information and
defining alternatives. This approach increases the chances that you will
choose the most satisfying alternative possible.
 STEPS OF DECISION MAKING
step 1: Identify the decision
We realize that you need to make a decision. Try to clearly define the nature of the decision we
must make. This first step is very important.

Step 2: Gather relevant information

Collect some pertinent information before we make your decision: what information is needed,
the best sources of information, and how to get it. This step involves both internal and external
“work.” Some information is internal: you’ll seek it through a process of self-assessment. Other
information is external: we’ll find it online, in books, from other people, and from other sources.

Step 3: Identify the alternatives

As we collect information, you will probably identify several possible paths of action, or
alternatives. You can also use your imagination and additional information to construct new
alternatives. In this step, you will list all possible and desirable alternatives.

Step 4: Weigh the evidence

Draw on our information and emotions to imagine what it would be like if you carried out each of
the alternatives to the end. Evaluate whether the need identified in Step 1 would be met or
resolved through the use of each alternative. As you go through this difficult internal process,
you’ll begin to favor certain alternatives: those that seem to have a higher potential for reaching
your goal. Finally, place the alternatives in a priority order, based upon your own value system.
Step 5: Choose among alternatives
Once you have weighed all the evidence, you are ready to select the alternative that
seems to be best one for you. You may even choose a combination of alternatives.
Your choice in Step 5 may very likely be the same or similar to the alternative you
placed at the top of your list at the end of Step 4.

Step 6: Take action

You’re now ready to take some positive action by beginning to implement the
alternative you chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate whether or not
it has resolved the need you identified in Step 1. If the decision has not met the
identified need, you may want to repeat certain steps of the process to make a new
decision. For example, you might want to gather more detailed or somewhat
different information or explore additional alternatives.

Successful concept decisions are crucial for product development organisations. Failure in
the concept decision-making process means costly rework, requiring resources that could
have been spent on innovative work with new products instead. This licentiate thesis tackles
the concept decision-making process and how to improve it. The research presented here is
the first part of a research project, with an action research approach, that will develop new
supporting working procedures for concept decision making and thereby contribute to more
successful products.
 DECISION MAKING PROCESS

The basic characteristics of decision making are as follows:

• It is the process of choosing a course of action from among the alternative courses of action.
• It is a human process involving to a great extent the application of intellectual abilities.
• It is the end process preceded by deliberation and reasoning. It is always related to the
environment.
• A decision may be taken in a particular set of circumstances and another in a different set of
circumstances.
• It involves a time dimension and a time lag.
• It always has a cur pose. Keeping this in view, there may just be a decision to not to decide.
• It involves all actions like defining the problem and probing and analysing the various alternatives
which take place before a final choice is made.

• The decision making process includes the following components:

• The decision maker.
• The decision problem.
• The environment in which the decision is to be made.
• The objectives of the decision maker.
• The alternative courses of, action.
• The outcome expected from various alternatives.
• The final choice of the alternative.
TYPES OF DECISIONS
Decisions may be classified into five major types.
These are:
• Organisational and personal decisions
• Routine and strategic decisions
• Policy and operating decisions
• Programmed and non-programmed decisions
• Individual and group decisions

Let us discuss each type in brief.

(i) Organizational and personal decisions: Personal decisions are those decisions that cannot be
delegated to others. These decisions are meant only to achieve personal goals. Organisational decisions are
those decisions that are taken to achieve organizational goals. For example you want to solve food habits
related problems of your students. Advising them to take i nutritious food becomes a personal decision. As a
teacher you adopt different kinds of teaching methods so that your students are able to I understand science
and mathematics better. These are for organizational goals because good performance enhances the
credibility of the school.

(ii) Routine and strategic decisions: Routine decisions are those which are repetitive in nature. For
example, certain established rules, procedures and policies are to be followed. You might have experienced that
when a teacher goes on leave another teacher who is free at that time has to engage the class. This is a routine
decision. 'Strategic' decisions are those decisions which have to be deliberated upon in depth. For example,
highlighting the characteristics of the school, before giving an advertisement for admissions, can bring more
revenue to the school
 Activity 2
Cite an example with reference ta your school ridging a strategic decision.

Interpersonal Process and Conflict Resolution

(iii) Policy and operating decisions: Policy decisions are those decisions which are taken at the higher
level. For example, fixing pay scales for teachers. Operating decisions are those decisions which mean
procedure of execution of the policy made. For example, how to disburse the arrears accumulated to a teacher
(e.g. calculations).

Activity 3 What do you mean by operating' decision?

(iv) Programmed and non-programmed decisions: Non-programmed decisions are those decisions
which are unstructured. For example, if a child is often absent, the class teacher can analyse the reasons for
his/her absenteeism from the information provided by the child and then advise as to how to recoup with the
situation. Whereas programmed decisions are of routine type and repetitive in nature. For example, when
should children take their breakfast, hunch etc.
.
Activity 4 Differentiate between programmed and non-programmed decisions citing
appropriate examples.

(v) Individual and group decisions: A decision taken by an individual in the organisation is known as
'individual' decision, where autocratic style of functioning prevails. For example, if only the principal takes a
decision without the participation of teachers, it is an individual decision. 'Group' decisions are collective
decisions which are taken by a committee with a proper representation. For example, decisions taken
collectively by parents, teachers and principal for the welfare of students.
 Activity 5 Describe a situation where individual and group decisions have to
be taken?

Some other types of decisions: Decisions can also be classified on the basis of dimensionality i.e.,
complexity of the problem and certainty of outcome of following the decision. These are described below:

Mechanistic decisions: Mechanistic decision is routine and repetitive in nature where the outcomes are
known. For example, if a child misbehaves in the class, the teacher raises voice to control it.

Analytical decisions: In this type of decision one has to analyse the situation and take a decision. For
example, if students are 30t performing well in science, the reasons have to be explored. It cx be because of
the teacher or the method of teaching science, lab-facilities provided, etc.

Adaptive decisions: In thief kind of deified outcomes are not hewn and offend unpredictable, It variety
from Libation to Libation, For example, a decision taken by B taker without prior experience of the outcome.
STYLES OF DECISION MAKING
Decision-making styles also vary in a social or task-driven focus. Social-driven
decisions consider the behavior of others involved in the outcome. Those who are
task-driven make decisions based on how to best achieve a goal.
1. Directive
The directive decision-making style uses quick, decisive thinking to come to a
solution. A directive decision-maker has a low tolerance for unclear or ambiguous
ideas. They are focused on the task and will use their own knowledge and
judgment to come to a conclusion with selective input from other individuals.
Directive decision-makers excel at verbal communication. They are rational and
logical in their decision making. When the team or organization needs a fast
decision, a directive-style decision-maker can effectively make a choice. Their
style is valuable for making short-term decisions.
Example: Company stockholders have voted to expand their 401(k) option to all
current employees and new employees after they complete a 90-day trial period.
The CEO must now decide if the company will provide matching funds for
employees who give to their 401(k) fund. She thinks about how this might help to
attract top talent for their team.
The CEO looks at the budget projections she has just prepared and thinks about
how funds that are allocated for another project could be used to match
employee contributions. She decides that employees who contribute to their
funds will be matched 4% by the company.
2. Analytical
Analytical decision-makers carefully analyze data to come up
with a solution. They are careful and adaptable thinkers. They
will invest time to glean information to form a conclusion.
These decision-makers are task-oriented, but have a high
tolerance for ambiguity.
Analytical decision-makers take time to compile data and
evidence before they come to a conclusion. When they do
make a decision, they have looked at all the details and formed
what they believe is the best possible solution.
Example: The marketing team of a sports broadcasting
company is tasked to identify how they can reach a wider
audience with their current ad campaign. The marketing
manager asks each team leader to submit a report from their
portion of the campaign including the numbers of each
audience demographic. They read each report then meet with
the team leads. After the meeting, the marketing manager
decides to purchase more add space on social media websites
for the next 30 days.
3. Conceptual
Those who make decisions with a conceptual style are big picture
thinkers who are willing to take risks. They evaluate different
options and possibilities with a high tolerance to ambiguity. They
are social-oriented and take time to consider big ideas and
creative solutions.
Conceptual decision-makers look forward to what could happen if
the decision is made. Their conclusions come from visualizing
different opportunities and outcomes for the future. They are
strong in making long-term decisions.
Example: Joe's startup retail company is performing well during
their first year. He thinks about how the company can open stores
nationwide in the next five years. When a new shopping
development begins construction in a nearby big city, he decides to
open a new store branch at the site. Although it is a risk to open
this new store, Joe is confident his team will be successful, and
this will help launch their brand nationally.
4. Behavioral
A behavioral style of decision-making focuses on relationships more
than the task. It evaluates the feelings of others as part of their
decision-making process. Behavior decision-makers have a low
tolerance for ambiguity and a social focus as they evaluate
solutions.
These decision-makers rely on information from others to guide
what they choose. They are persuasive communicators who value
decisions based on a team consensus. Their decisions are often
based on how the choice will impact relationships.
Example: As HR manager, Kate has been asked to decide which
week employees should get as a bonus paid vacation days before
the end of the year. She sends out an email survey to see how
employees feel about three possible dates. After she reads the
survey responses, she asks her coworkers for input over a lunch
break. Later in the afternoon, she walks through the office chatting
with several more employees.
When she decides which week the majority of coworkers want, she
talks to several employees who will not get the choice they hoped
for, making sure they're feeling alright about the decision. At the
end of the day, she notifies the management and the employees
which week will be a bonus paid vacation time.
ENVIRONMENT OF DECISION MAKING

The quality of the decisions made in an organization will dictate the

success or failure of the said business.
So all the available information and alternatives must be studied
before arriving at an important decision. The process of decision
making will help a great deal.
Another factor that affects these decisions is the environment in which
they are taken. There are a few different types of environments in
which these decisions are made.
1] Certainty
Such type of environment is very sure and certain by its
nature. This means that all the information is available
and at hand. Such data is also easy to attain and not
very expensive to gather.
So the manager has all the information he may need to
make an informed and well thought out decision. All
the alternatives and their outcomes can also be
analyzed and then the manager chooses the best
alternative.
Another way to ensure an environment of certainty is
for the manager to create a closed system. This means
he will choose to only focus on some of the
alternatives.
He will get all the available information with respect to
such alternatives he is analyzing. He will ignore the
other factors for which the information is not available.
Such factors become irrelevant to him altogether.
2] Uncertainty
In the decision making environment of
uncertainty, the information available to the
manager is incomplete, insufficient and
often unreliable.
In an uncertain environment, everything is
in a state of flux. Several external and
random forces mean that the environment
is most unpredictable.
In these times of chaos, all the variables
change fast. But the manager has to make
sense of this mayhem to the best of his
ability. He must create some order, obtain
some reliable data and make the best
decision as per his judgment
3] Risk
Under the condition of risk, there is the
possibility of more than one event taking place.
Which means the manager has to first ascertain
the possibility and probability of the occurrence
or non-occurrence of the event.
The manager will generally rely on past
experiences to make this deduction.
In this scenario too, the manager has some
information available to him. But the availability
and the reliability of the information is not
guaranteed. He has to chart a few alternative
courses of actions from the data he has.
 ASSIGNMENT ON
MANAGEMENT CONCEPT AND PROCESS

UNIT 5
CONTROLLING
 CONTROL
MEANING:
CONTROL IS A PRIMARY GOAL-ORIENTED FUNCTION OF MANAGEMENT IN AN ORGANISATION.
IT IS A PROCESS OF COMPARING THE ACTUAL PERFORMANCE WITH THE SET STANDARDS OF THE
COMPANY TO ENSURE THAT ACTIVITIES ARE PERFORMED ACCORDING TO THE PLANS AND IF
NOT THEN TAKING CORRECTIVE ACTION.
CONTROL IS ONE OF THE MANAGERIAL FUNCTIONS LIKE PLANNING, ORGANIZING, STAFFING
AND DIRECTING. IT IS AN IMPORTANT FUNCTION BECAUSE IT HELPS TO CHECK THE ERRORS AND
TO TAKE THE CORRECTIVE ACTION SO THAT DEVIATION FROM STANDARDS ARE MINIMIZED AND
STATED GOALS OF THE ORGANIZATION ARE ACHIEVED IN DESIRED MANNER.
DEFINITION OF CONTROL

‘Controlling is the measurement and correction of performance in order to

make sure that enterprise objectives and the plans devised to attain them are
accomplished’. – Harold Koontz
‘Control of an undertaking consists of seeing that everything is being carried
out in accordance with the plan which has been adopted, the orders which
have been given, and the principles which have been laid down. Its object is to
point out mistakes in order that they may be rectified and prevented from
recurring’. – Henry Fayol
Objectives of Management Control Systems
Control is an important function of management. Without control,
a manager cannot “do a complete job of managing”. All
other management functions are the preparatory steps for getting the
work done and controlling is concerned with making sure that there is
proper execution of these functions. Control is necessary whenever
a manager assigns duties and delegates authority to a subordinate.
He must exercise control over the actions of his subordinates so that he
can ensure that the delegated authority is being used properly.
A sound control system is needed for the following purposes:
1. To measure progress: Under the planning process the fundamental goals and objectives of the organization
are established. The control process is necessary to measure progress towards these goals. According to Henry
Fayol, “Control consists in verifying whether everything occurs in conformity with the plan adopted, the
instructions issued and the principles established.” As the navigator continually takes readings to, ascertain
whether he is relative to a planned course, so should the manager take readings to see whether his enterprise
or department is at the predetermined course? He needs a control system to take such readings. The feedback
enables us to compare targets with performance and to take corrective action where deviations occur.
2. To uncover deviations: Several forces pull off the enterprise from its charted course. An efficient control
system is required to detect these deviations before they become serious. The main forces due to which an
organization, may go astray are as follows:
Change: Change is an integral part of business environment. Markets shift, new products emerge, new
materials are discovered and new government policies are introduced. The control system enables a manager
to detect changes that are affecting his organization. He can their take action to face the threats and exploit
the opportunities, which these changes create.
Delegation: When a manager, delegates authority, his responsibility to “his own superior is not reduced. A
manager needs a control system to determine whether-his subordinates are accomplishing the tasks delegated
to them. In the absence of a control system, he will not be able to check on the subordinate’s progress and
corrective action cannot be taken until after failures occurred.
Mistakes. Employees very often commit mistakes. Problems may be diagnosed
incorrectly, pricing decisions may be faulty, wrong parts may be ordered, etc.
Managers require a control system to detect and rectify these mistakes before they
become serious.
Complexity. Large organizations are complex due to decentralized and
geographically scattered, operations. For example, sales at different retail
stores/branches need to be recorded and analyzed accurately. Close monitoring of
diversified product lines is needed to ensure that quality and profitability are being
maintained. Such monitoring is impossible without a control system.
3. To Indicate corrective action: Controls are required to suggest the remedial actions.
A control system may, for example, reveal that goals should be modified, tasks should
be reassigned, staff should be trained further, etc. A sound control system not only
reveals deviations but suggests the corrective actions required to overcome the
deficiencies.
ESSENTIAL CHARACTERISTICS OF CONTROL
1. Perfect Plan: Control should reflect the plan designed to be followed.
Managers should have information with regard to the plans for which they
are responsible for working.
2. Point out Exceptions: Management by exception is a system of warning the
management when the situation is likely to become out of control and the
intervention of management is needed. Its main object is to make the task of
managing simpler and more effective. If control is based on exception
principle, it will allow the managers to concentrate on important issues. Hence,
control should point out exceptions.
3 . Objective: Control should be objective rather then
subjective because an individual’s job is not a matter of subjective
determination. Hence, objective standards are to be established.

4. Flexible: An effective control system should be flexible. It should be

capable of adjusting itself to unforeseen changes of plans. It must be
adaptable to new developments.

5. Economical: The control system should be economical to operate. The

expenditure on control must correspond with the benefits derived from
them. The question of economy should be decided by considering the
factors like importance of activity, the size of the operation, the expense
which might be Spent in the absence of control and the utility derived
from the control system.
6. Remedial Action: An effective control system should point out the
deviations, the persons responsible for such deviations and make sure
that remedial action is taken. The main purpose of control is taking
remedial action to set right the deviations. If no remedial action is taken,
controls are not necessary.

7. Simple: A control system to be effective, should be simple to adopt. It

should be easily understandable by the parties concerned so that the
smooth working of the system can be ensured.

8. Suggestive of Corrective Action: An adequate and effective control

system should be suggestive of corrective action. It should not stop
merely with pointing out deviations. It should go further and try to
generate solutions to the problem responsible for deviation from the
predetermined standards.
 Nature of Control
• Control be defined as a systematic process through which managers make
sure that organizational activities are in line with the goals and objectives
established in plans, targets, and standards of performance. Nature of Control
is that it’s a Function of Management based on Planning. Scope of control is a
primary goal-oriented task of management in an organization. Control is a
Dynamic Process. Control is a primary goal-oriented function of management
in an organisation. It is a process of comparing the actual performance with the
set standards of the company to ensure that activities are performed according
to the plans and if not then taking corrective action.Control is a primary task
which is goal-oriented of management in an organization. It is a process of
comparing actual performance with the set standards of the company to ensure
that the activities are carried out according to the plans and if not, corrective
action is taken.
• The essence of control is action: Performance of control is achieved only
when corrective action is taken based on reactive information. It is simply
action, which adjusts the performance of predefined parameters
whenever there is a deviation. A good system of control is timely action
so that there is minimal waste of time and energy.
• Control relates to result: Controlling is related to the final result. First, we
create a roadmap to achieve the result. Then we follow the control
process to achieve our actual results. With the help of a good control
system, we can get a good result.
PROCESS OF CONTROLLING

• A process of monitoring, comparing, correction performance and

taking action to ensure desired results.
• It sees to it that the right things happen, in the right ways, and at
the right time
RELATIONSHIP BETWEEN PLANNING AND
CONTROLLING
 control system

Business control systems consist of procedures and processes, which help an

organization achieve its mission and objectives. Controls define how employees should
conduct themselves and perform job duties. After business owners and managers
implement standards, they must track and monitor performance
 Healthy and Effective Control system
Managers are responsible for controlling in the organization and a manager must improve
the effectiveness of the organization’s control system; as can do a great deal to improve the
effectiveness of their control systems.
9 principles of the effective control system are;

Matching controls to plans and position.

Ensuring flexibility to control.
Ensuring accuracy.
Seeking objectivity of controls.
Achieving the economy of controls.
Tailoring control to individual managers.
Pointing up exceptions.
Fitting the system of control to the
organizational culture.
Ensuring corrective action through control.
STEPS INVOLVED IN THE CONTROL PROCESS

• Controlling consists of five steps:

• (1) set standards,
• (2) measure performance,
• (3) compare performance to standards,
• (4) determine the reasons for deviations and then
• (5) take corrective action as needed
• Corrective action can include changes made to the
performance standards—setting them higher or lower or
identifying new or additional standards. Performance
standards are often stated in monetary terms such as
revenue, costs, or profits but may also be stated in other
terms, such as units produced, number of defective
products, or levels of quality or customer service.
AREA AND FEATURES OF
CONTROLLING.
AREA OF CONTROLLING.

• Control over Policies

• Control over Organization
• Control over Personnel
• Control over Wages and Salaries
• Control over Costs
• Control over Methods
• Control over Capital Expenditure
• Control over Production
FEATURES OF CONTROLLING

i) Forward-looking.
Controlling is a forward-looking process because all of its efforts dictate future courses of
action. Managers often use experiences from the past to make corrections for the future.
ii) Exists at all level
The process of controlling is all-pervasive
iii) Continuous activity.
iv) Positive purpose.
a) Decentralization of authority.
b) Increasing managerial abilities.
c) Using resources effectively.
 IMPORTANCE AND SIGNIFICANCE OF CONTROL

Controlling is an important function of management. Its importance

becomes apparent when we find that it is needed in all the functions of
management. Controlling checks mistakes and tells us how new challenges
can be met or faced. The success of the organisation thus hinges on the
effective controlling.
Controlling is the last function of the management process which is
performed after planning, organising, staffing and directing. On the other
hand, management control means the process to be adopted in order to
complete the function of controlling. The following steps are included in it:
(i) setting performance standards,
(ii) measurement of actual performance,
(iii) comparison of actual performance with standards,
(iv) analysis deviations,
(v) taking corrective action.
THE IMPORTANCE OF CONTROLLING BECOMES CLEAR FROM THE FOLLOWING FACTS:
(1) ACCOMPLISHING ORGANISATIONAL GOALS:
The controlling process is implemented to take care of the plans. With the help of controlling, deviations are
immediately detected and corrective action is taken. Therefore, the difference between the expected results and
the actual results is reduced to the minimum. In this way, controlling is helpful in achieving the goals of the
organisation.
(2) JUDGING ACCURACY OF STANDARDS:
While performing the function of controlling, a manager compares the actual work performance with the
standards. He tries to find out whether the laid down standards are not more or less than the general standards.
In case of need, they are redefined.
(3) MAKING EFFICIENT USE OF RESOURCES:
Controlling makes it possible to use human and physical resources efficiently. Under controlling, it is ensured
that no employee deliberately delays his work performance. In the same way, wastage in all the physical
resources is checked.
(4) IMPROVING EMPLOYEE MOTIVATION:
Through the medium of controlling, an effort is made to motivate the employees. The implementation of
controlling makes all the employees to work with complete dedication because they know that their work
performance will be evaluated and if the progress report is satisfactory, they will have their identity established
in the organisation.
(5) ENSURING ORDER AND DISCIPLINE:
Controlling ensures order and discipline. With its implementation, all the
undesirable activities like theft, corruption, delay in work and uncooperative
attitude are checked.
(6) FACILITATING COORDINATION IN ACTION:
Coordination among all the departments of the organisation is necessary in
order to achieve the organisational objectives successfully. All the departments
of the organisation are interdependent. For example, the supply of orders by
the sales department depends on the production of goods by the production
department.
Through the medium of controlling an effort is made to find out whether the
production is being carried out in accordance with the orders received. If not,
the causes of deviation are found out and corrective action is initiated and
hence, coordination between both the departments is established.
ESSENTIAL OF A
CONTROL SYSTEM
MANAGERS MUST ENSURE THAT THEIR CONTROL
SYSTEMS CONTAIN THE FOLLOWING BASIC ELEMENTS AND
CONSIDERATION.
1. Focus on objective and needs
2. Forward looking
3. Flexibility
4. Objectivity
5. Motivating
6. Suggestive
7. Control by exception
8. Prompt
9. economical
LIMITATIONS OF CONTROLING
• Difficulty in Setting Quantitative Standards: ADVERTISEMENTS
• No Control on External Factors: An organization fails to have control
on external factors like technological changes, competition,
government policies, changes in taste of consumers etc.
• Resistance from Employees
• Costly Affair:
•
 METHODS OF ESTABLISHING OF CONTROL
Controlling is one of the most important functions of management. Its
main objective is to ensure that an organization’s activities are
advancing as planned. The control process that all managers have to
implement consists of several steps. Each one of these is equally
important and plays a big role in effective management.

Traditional Types of Control Techniques in Management

1.Budgetary Control
2.Standard Costing
3.Financial Ratio Analysis
4.Internal Audit Break-Even Analysis
5.Statistical Control
 MODERN TECHNIQUES OF
CONTROL
1.Return on investment
2.Ratio analysis
3.Responsibility accounting
4.Management audit
5.PERT & CPM
 TYPES OF CONTROL
. FEEDBACK CONTROL
. CONCURRENT CONTROL
. FEEDFORWORD CONTROL
. BEHAVIORAL CONTROL
. FINANCIAL AND NON-FINANCIAL CONTROL
.FEEDBACK CONTROL :
Feedback control involves gathering information about a past activity or action, and
evaluating that information, and taking steps to improve similar activities or action in the future.
Feedback control is historical in nature and is also known as post-action control. The implication
is that the measured activity has already occurred, and it is impossible to go back and
perform correctly to bring it up to standard. It is the least active of the controls and is
generally a basis for reactions. Feedback allows managers to use past performance
information to inform future performance in line with planned objectives.
. CONCURRENT CONTROL :
The process of monitoring and adjusting ongoing activities and processes is known as
concurrent control. Concurrent controls are dynamic engagement in a current process where
observations are made in real-time. Such controls are not necessarily proactive, but they can
prevent problems from getting worse. For this reason, we often describe concurrent control as
real-time control as it relates to current. A set of procedures are implemented to monitor
project execution in order to find and solve problems or potential problems in a timely manner.
. FEEDFORWORD CONTROL :
Feedforward is a management and communication term that alludes to a representative or an
association to give a controlled impact from which you are expecting output. Feedforward
controls are future-directed, they attempt to detect and anticipate problems or deviations from
the standards in advance of their occurrence. They are in-process control and are very active,
aggressive in nature, allowing corrective action to be taken in advance of the problem.
. BEHAVIORAL CONTROL :
Behavioral control involves direct evaluation of managerial and employee decision
making, not the results of managerial decisions. Behavioral control identified rewards for
a wide range of criteria, such as in a balanced scorecard. When there are many
external and internal factors, behavioral control and appreciative rewards are more
appropriate that may affect the relationship between manager’s decisions and
organizational performance. They are also suitable when managers must coordinate
resources and capabilities across different business units.

. FINANCIAL AND NON-FINANCIAL :

Financial controls involve the management of a firm’s costs and expenses so that they
can be controlled in relation to budgetary amounts. Thus, in this way management
determines which aspects of its financial position, such as profitability, sales or assets,
are most important for the organization, tries to forecast them through budgets, and then
compares actual performance to budgetary performance. Does. At a strategic level,
total sales and indicators of profitability will be relevant strategic controls.
 QUALITY MANAGEMENT SYSTEM
A quality management system (QMS) is defined as a formalized system that documents
processes, procedures, and responsibilities for achieving quality policies and objectives. A
QMS helps coordinate and direct an organization’s activities to meet customer and
regulatory requirements and improve its effectiveness and efficiency on a continuous
basis.
ISO 9001:2015, the international standard specifying requirements for quality
management systems, is the most prominent approach to quality management systems.
While some use the term "QMS" to describe the ISO 9001 standard or the group of
documents detailing the QMS, it actually refers to the entirety of the system. The
documents only serve to describe the system.
Benefits of QMS
ISO 9001:2015 and other QMS standards
elements and requirements of a QMS
establishing and implementing a QMS
industrial influence on quality and standardization
QMS resourcs
BENEFITS OF QUALITY MANAGEMENT SYSTEMS
Implementing a quality management system affects every aspect of an organization's
performance. Benefits of a documented quality management system include:
. meeting the customer’s requirements, which helps to instill confidence in the
organization, in turn leading to more customers, more sales, and more repeat business
. meeting the organization's requirements, which ensures compliance with regulations
and provision of products and services in the most cost- and resource-efficient manner,
creating room for expansion, growth, and profit
these benefits offer additional advantages, including:
. defining, improving, and controlling processes
. reducing waste
. preventing mistakes
. lowering costs
. facilitating and identifying training opportunities
. engaging staff
. setting organization-wide direction
. communicating a readiness to produce consistent results
 TOTAL QUALITY MANAGEMENT (TQM)
• Total quality management (TQM) consists of organization-wide efforts to "install and
make permanent climate where employees continuously improve their ability to
provide on demand products and services that customers will find of particular
value."[1] "Total" emphasizes that departments in addition to production (for
example sales and marketing, accounting and finance, engineering and design) are
obligated to improve their operations; "management" emphasizes that executives are
obligated to actively manage quality through funding, training, staffing, and goal
setting. While there is no widely agreed-upon approach, TQM efforts typically draw
heavily on the previously developed tools and techniques of quality control. TQM
enjoyed widespread attention during the late 1980s and early 1990s before being
overshadowed by ISO 9000, Lean manufacturing, and Six Sigma.

Primary Principles of Total Quality ManagementTQM is considered a customer-

focused process that focuses on consistently improving business operations. It
strives to ensure all associated employees work toward the common goals of
improving product or service quality, as well as improving the procedures that
are in place for production.
 IMPORTANT
SPECIAL EMPHASIS IS PUT ON FACT-BASED DECISION MAKING, USING
PERFORMANCE METRICS TO MONITOR PROGRESS; HIGH LEVELS OF
ORGANIZATIONAL COMMUNICATION ARE ENCOURAGED FOR THE PURPOSE
OF MAINTAINING EMPLOYEE INVOLVEMENT AND MORALE.
THANK YOU...
CHHATRAPATI SHAHU JI MAHARAJ UNIVERSITY, KANPUR
SCHOOL OF BUSINESS MANAGEMENT
MANAGEMENT CONCEPT
 Concept of Staffing and Directing

CONCEPT OF STAFFING:-is the process of hiring eligible candidates

in the organization or company for specific positions. In management,
the meaning of staffing is an operation of recruiting the employees by
evaluating their skills, knowledge and then offering them specific
job roles accordingly.

CONCEPT OF DIRECTING:- refers to a process or technique of

instructing, guiding, inspiring, counselling, overseeing and
leading people towards the accomplishment of organizational
goals. It is a continuous managerial process that goes on throughout
the life of the organization.D
 Scope of staffing and directing

Scope of staffing:-A Source of Manpower and its Development In

fact, the scope of staffing function is very wide. It includes manpower
planning, recruitment, selection, training and development,
performance appraisal, promotion, transfer, compensation, etc.
Without performing staffing function these tasks cannot be accomplished.

Scope of directing:-The nature and scope of directing in

management is concerned with employee orientation, issuing
instructions, supervision, motivation, communication and
leadership. ... Supervision is done at all levels of management.
However, supervision is more important at lower levels.