UNIT-I

Introduction to Management
Management- Definition, Nature, Purpose
Evolution of Management Thought-
Scientific Management
Administrative Theory
Human Relations Approach
Hawthorne experiments
Theory X
Theory Y
Theory Z
Behavioural Approach
Systems Theory
Managerial Roles
Managerial Levels
Managerial Skills
Functions of Management
Administration vs. Management
Contemporary Management Issues and Challenges
 INTRODUCTION

• Companies of the same industry are being affected by the same

environmental factors. Some companies attract a number of customers
while some other companies repel them. Employees prefer to be
identified with some companies while they prefer to be unemployed in
case of some other companies.

• Why do companies perform differently when they operate under the same
environmental conditions, serve the same customer, use the same raw
material and technology and employ the people with similar skills?

• The answer for this question, invariably, is management practices. Thus

‘Management’ makes remarkable difference between the companies
regarding their performance in terms of productivity , products, sales,
profitability, service to the customer, employee welfare etc.
 MEANING

• Management is what managers do. Management involves coordinating

and overseeing the work activities of others so that their activities are
completed efficiently and effectively.

Efficiency: Doing things right. Getting the most output from the least
amount of inputs i.e. efficient use of scarce resources.

Effectiveness: Doing the right things. Doing those work activities that will
help the org reach its goals. Is concerned with the ends, or attainment of
organizational goals. See fig below.
 Efficiency (Means) Effectiveness (Ends)
Resource Goal
Usage Attainment
Low Waste High Attainment

Management Strives for:

Low Resource Waste (high efficiency)
High Goal Attainment (high effectiveness)

Efficiency and Effectiveness in Management

 DEFINITION OF MANAGEMENT
1. “The art of getting things done through others”
- Mary Parker

2. “Management is the process of optimizing human,

material and financial contributions for the
achievement of organizational goals”
- John A. Pearce and Richard B.Robbinson

3. The process of designing and maintaining an

environment in which individuals, working together in
groups, efficiently accomplish selected aims”
- Harold Koontz
 Purpose of Management:
• Purpose of Management is to Achieve MOST
• Managers basically formulate Mission,
Objectives, Strategies and Tactics (MOST).
• Management is essential to achieve the MOST.
 Meaning Example
M Mission Basic reason/purpose for its existence A vibrant bank committed to
excellence in performance
through customer satisfaction

O Objectives Ends towards which the activity is To earn profits

aimed
Ex. To earn certain percentage of
(Note: Goal is precise and is expressed profit on capital employed
in clear & specific terms)

S Strategies Unified, comprehensive and integrated Entering the car financing

plan that relates the strategic business in order to enhance the
advantages of the firm with the sales
opportunities of the environment.

T Tactics An action programme through which Software company has a sales

strategies are executed. strategy to achieve 50% gross
margins.
Immediate strategy designed to
respond to fast changing realities.
 Management Deals with Internal and External
Environment

Management while formulating strategies, studies and

analyses both internal and external environment.

• Internal environment consists of organizational structure,

finances, marketing, production and human resources.

• External environment consists of STEPIN viz., Social and

Cultural, Technical, Economic, Political, International and
Natural.
 MANAGEMENT: A SCIENCE OR AN
ART?
• Science: a body of knowledge developed
systematically , based on observation, measurement,
experimentation and drawing inferences based on
data.

• Art: understanding how a particular activity can be

done.

Thus, management is both a science and art as it

acquires the characteristics of both.
ADMINISTRATION VS. MANAGEMENT
Administration Management
First View Involves policy making, Executing the plans and
formulation of vision, mission, strategies and carrying out
objectives and strategies various activities determined by
the administration
Is the function of top level Is the function of Lower level
management people in the company
Decides the organizational It directs and controls the
structure and prepares the subordinates
organizational plans.
 Administration Management
Second View A comprehensive and integrated term
(Advocated by E.F.L.Brech) Includes planning, organizing,
directing and controlling
Management can be classified into two
categories:
1. Administrative Management
2. Operative Management
Administrative Mgt:
(i) represents top level management
pertaining thinking and planning
functions.
(ii)Performs the functions of
formulation of vision, mission &
strategies
(iii) Includes BODs, MD, GM, Chief
managers
Operative Management:
(i)Represents lower level mgt covering
execution & implementation functions.
(ii)It performs the functions of
execution, directing & controlling
which involves middle & lower level
managers.
 Administration Management

Third View Is applicable to non-profit Is concerned with business

(advocated by Peter orgs like govt orgs, service- organizations & profit-
F.Drucker) oriented hospitals & oriented orgs.
educational institutions,
military, churches, temples
etc.
Main activity is planning, Measured by the efficiency
organizing, directing, in profit-making and
controlling and rendering administration
services.
Measured by efficiency in
rendering services
Governance of non-profit Governance of business
organization is called organizations is referred to
administration as management
 CHARACTERISTICS OF MANAGEMENT

• Management is an organized activities

• Management is aligned with organizational objectives
• Management optimizes constraining resources
• Management works with and through people
• Management is a science as well as an art
• Management is decision making
• Management is universal
• Management is intangible
• Management is an interdisciplinary approach
• Management is a social process
• Management is a system of authority
• Management is dynamic
• Management principles are relative and not absolute
• Management is a profession
• Management is a strategic function
 Nature of Management

• Nature of management is a set of activities directed at an

organisation’s resources (human, financial, physical and
organisational) with the aim to achieve organisational goals in
an efficient and effective manner.

• It is a group activity with multidimensional approach, goal

directed planning of action, dynamic and continuous process
with appropriate operational strategies.
 Administrators

Management

Organisation
(workers &
supervisors)
 MANAGEMENT LEVELS
Different Management Levels

Top Level
Management

General Manager/Vice President General Manager/Vice President

Middle Level
Management Manager Manager Manager Manager Manager
Production Finance HR Marketing R&D

Manager Manager Manager Manager

Lower Level Materials Scheduling Quality Control Assembly
Management
 MANAGERIAL SKILLS
• Acc. To Robert L.Katz, there are three types of managerial skills i.e.
technical skills, human skills, and conceptual skills.

Fig. Mangerial skills at Different levels

Top Level Managers

(More conceptual Skills)

Middle Level Manager

(More Human Skills)

Lower Level Managers

(More Technical Skills)
 MANAGERIAL ROLES
• Henry Mintzberg, a well known management researcher, studied actual managers
at work and concluded that what managers do can best be described by looking at
the management roles they use at work. As shown in exhibit-1, Mintzberg’s 10
roles are grouped around interpersonal relationships, the transfer of information,
and decision making.

Interpersonal Roles • Figurehead

• Leader
• Liason
Informational Roles • Monitor
• Disseminator
• Spokesperson
Decisional Roles • Entrepreneur
• Disturbance handler
• Resource allocator
• Negotiator
 FUNCTIONS OF MANAGEMENT

1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
Planning
• A future course of action & deciding in advance the most appropriate
course of actions for achievement of pre-determined goals.

• Planning is deciding in advance –

What to do?
When to do ?
Who should do it?
Where it is to be done?
Why it is to be done ?
How to do?

• It bridges the gap from where we are & where we want to be

Organising

• It is the process of bringing together physical, financial and human

resources and developing productive relationship amongst them for
achievement of organizational goals.

• Organizing as a process involves:

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

Staffing involves:
•Manpower Planning
•Recruitment, Selection & Placement
•Training & Development
•Remuneration
•Performance Appraisal
•Promotions & Transfer
Directing

• It is that part of managerial function which actuates the

organizational methods to work efficiently for achievement of
organizational purposes

• Direction has following elements:

– Supervision
– Motivation
– Leadership
– Communication
Controlling
• It implies measurement of accomplishment against the
standards and correction of deviation if any to ensure
achievement of organizational goals.

• controlling has following steps:

– Establishment of standard performance.
– Measurement of actual performance.
– Comparison of actual performance with the standards and
finding out deviation if any.
– Corrective action.
Evolution of Management Thought
• The evolution of management thought is a process that started in
the early days of man. It began since the period man saw the need
to live in groups.

• Different approaches to Management are:

1. Scientific Management
2. Administrative Theory
3. Human Relations Approach
Hawthorne experiments, Theory X, Theory Y and Theory Z,
Behavioural Approach,
4. Systems Theory
5. Contingency Approach
 SCIENTIFIC MANAGEMENT
• The forerunners of Scientific Management theory are Robert Owen &
Charles Babbage

• Afterwards, credit has been given to F.W.Taylor for enunciating the area of
Scientific Management.

• Frederick Winslow Taylor (F.W.Taylor):

➢ Father of Scientific Management
➢ First person who insisted on the introduction of scientific methods in
management.
➢ He made for the first time a systematic study of management and evolved an
orderly set of principles to replace the trial and error methods.
 Principles of Scientific Management

i. Time and Motion Study

ii. Science, but not Rule of Thumb
iii. Differential Payment
iv. Group Harmony
v. Cooperation between Workers and Management
vi. Methods Study
vii. Scientific Selection and Training
viii. Standardisation
ix. Separation of Planning from Execution
To sum up, he stressed the following:

• Replacement of rule-of-thumb by science

• Achieving harmony in group action rather than discord

• Attaining maximum output in place of restricted output

• Scientific selection, training and placement of workers

• Development of all workers to the fullest extent possible for

their own and their enterprise’s highest priority
Criticism of Taylor’s Contributions

• His principles were mostly confined to production

management, ignored other functional areas of management

• His functional foremanship violates the principle of unity of

command

• Wages of the workers were not increased in direct proportion

to the increase in productivity
Administrative Management
14 principles laid down by Henry Fayol:
A body of principles of management has been developed by Henri Fayol,
the father of modern management.

1. Division of Work
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to the General Interest
7. Remuneration
8. Centralisation
9. Hierarchy
10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Espirit de corps
 Towards Human Relations Theory

• Mary Parker and Chester I Barnard developed the theories on the basic
framework of classical school, but they introduced many new elements in
the area of human relations and organisational structure.

HUMAN RELATIONS APPROACH

The essence of human relations approach is that workers should be
treated as human beings but not as mere factors of producion. Workers
needs, feelings , attitudes, values and desires are extremely important.
 Elton Mayo’s Human Relations Approach to
Management
• According to Human Relations Approach, management is the Study of
behaviour of people at work.

• This approach had its origin in a series of experiments conducted by

Professor Elton Mayo and his associates at the Harvard School of Business
at the Western Electric Company’s Hawthorne Works, near Chicago.

• These studies brought out for the first time the important relationships
between social factors and productivity.

• concentrates on people and their behaviour within the formal and

informal organisations.
 Features of Elton Mayo’s Human Relations Approach:

The main features of the Human Relations Approach to management are

the following:
(a) manager must have a basic understanding of human behaviour in all
respects—particularly in the context of work groups and organisations.
(b) The managers must study the inter-personal relations among the people
at work.
(c) Larger production and higher motivation can be achieved only through
good human relation.
(d) The study of management must draw the concepts and principles of
various behavioural sciences like Psychology and Sociology.
 Contribution of Elton Mayo to Management Thought:
• George Elton Mayo (1880-1949) was a professor at the Harvard Business
School. He published the books —‘Human Problems of an Industrial
Civilisation’ (1933).

• ‘Social problems of an Industrial Civilisation’ (1945), ‘Training for Human

Relations’ (1949) etc. He conducted the famous ‘Hawthorne Experiments’
at the Hawthorne plant of the Western Electric Company in the USA
during 1927-32 with his associates.

Experiments are described below:

1. Illumination Experiments
2. Relay Assembly Test Room Experiment
3. Mass Interviewing Programme
4. Bank Wiring Observation Room Experiment
 Human Relations in Action: Basic Model

Work

Work

The
Organisation Leader
Individual

Environment

Work
 Criticisms of the Human Relations Approach

1. Scientific validity
2. Shortsighted
3. Over-concern with happiness
4. Misunderstanding of Participation
5. The Mystery surrounding group decision making
6. Conflict
7. Anti-Individualist
8. Total Work Environment is not considered
 Systems Approach to Management

Key Concepts of Systems Approach:

1. Subsystem
2. Synergy
3. Open System
4. Closed System
5. System Boundary
6. Flows
7. Feedback
 External
Environment

Input (Resources) Output

Human Transformation •Products
Capital •Service
Materials

Feedback

Fig: The Flows and Feedback in the Open System

 Features of System Approach to Management

1. Dynamic
2. Multilevel and multidimensional
3. Multimotivated
4. Probabilistic
5. Multidisciplinary
6. Descriptive
7. Adaptive
 Contingency Approach
(Situational Approach)
• Approach was developed by managers, consultants and researchers.

• Results differ because situations differ.

• Managers have to identify the technique which will best contribute to the
attainment of the management’s goal in a particular situation, under
particular circumstances and at a particular time.

• Manager should find out which method will work better in that particular
situation.
 CONTEMPORARY ISSUES IN MANAGEMENT

• Technology and Competitive Advantage

• Shortage of Skills
• Downsizing and Rightsizing
• Telecommuting
• Internet, Intranet Revolution and Virtual organizations
• Managing Innovation and Change
• Sustainability
• Work Ethics
• DEI