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THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED

Study Material for Students

“PGDM Programme : 2010-12”
Jagan Institute of Management Studies Rohini, Delhi
• Corporate Consulting • Learning, Development and Education • Human Resource Policies • Placement
THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED

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Trimester – I
Paper

Managing Organisations

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Visiting Faculty

Sumit Chaudhuri
Chairman and Managing Director
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tmbra2000@gmail.com

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Unit I Concept & Nature of Management
Sub Topics

Functions, Levels, Roles & Skills Evolution of Management Thoughts

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Some

Business Realities
Today …
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Happiness in Business Comes From … A Positive Cash Flow ! THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 6 .

The two most beautiful words in the English language: “Cheque enclosed” THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 7 .

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 8 .A Few Words of Caution: Yesterday’s competitive edge (Like ISO certification) has become a qualifying factor today.

Please identify the jumbled word by rearranging the following alphabets: THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 9 .A Quiz for you...

A GRID MAP PARADIGM THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 10 .

Changing Paradigms: Business Transition Trends THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 11 .

Business Transition Trends From Socialistic Society To Capitalistic Society THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 12 .

The problem with socialism is the equal distribution of poverty. . The problem with capitalism is the unequal distribution of wealth.Business Transition Trends …Contd.Sir Winston Churchill THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 13 .

Business Transition Trends …Contd. From Profit being residual in the process of value creation To Profit generation to the extent possible in the process of value creation THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 14 .

Business Transition Trends …Contd. From Seller’s Market (Cost + Profit = Price) To Buyer’s Market (Customer Determines Price) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 15 .

From Customer running after seller To Seller running after customer THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 16 .Business Transition Trends …Contd.

Business Transition Trends …Contd. From Loyal Customer To Infidel Customer THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 17 .

From Market capitalisation To Revenues and cash THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 18 .Business Transition Trends …Contd.

Business Transition Trends …Contd. Technology and Intellectual capital THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 19 . From Capital measures To Brands.

From Size and solidity To Niche and fluidity THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 20 .Business Transition Trends …Contd.

From One long range plan To Many near term flexi plans THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 21 .Business Transition Trends …Contd.

From Focus on needs of Employees To Focus on Employees’ performance THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 22 .Business Transition Trends …Contd.

From Ideas and incubation To Action and execution THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 23 .Business Transition Trends …Contd.

MANAGEMENT IS DEAD !! THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 24 .

LONG LIVE MANAGEMENT ! THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 25 .

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 26 .The good news is MANAGEMENT IS DEAD……! …only in the traditional sense.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 27 .

! …Version 2009….LONG LIVE MANAGEMENT…. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 28 . to Version Infinity.

The continuously rising need for competitiveness must result in continuously changing role boundaries for management THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 29 .

The Result… New Paradigms THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 30 .

cross – cultural alliances. mergers and acquisitions and fast changing equations of power. corporate India is – for the first time in its history – realising the importance of people in the new paradigm of business. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 31 .New Paradigm…One To cope with the bewildering reality of free competition. total quality.

New Paradigm…Two Trends like globalisation and technological innovation have and are continuously changing the way organisations are managed. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 32 .

New Paradigm…Three These trends also include growing work force diversity and changes in the nature of work such as the movement towards a service society and a growing emphasis on education and human capital. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 33 .

New Paradigm…Four HRM has to be viewed as a strategic partner in that it works with other top managers to formulate the organisation‘s strategy as well as to execute it. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 34 .

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 35 . working together in groups.Management It is the process of designing and maintaining an environment in which individuals. efficiently accomplish selected aims.

1. people carry out the managerial functions of planning. Management applies to any kind of organisation. and controlling. 3. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 36 . It applies to managers at all organisational levels. leading. organising. 2. As managers. staffing.

The aim of all managers is the same: to create a surplus.4. this implies effectiveness and efficiency. 5. Managing is concerned with productivity. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 37 .

this surplus is termed the profit. In business organisations.Organisation A group of people working together to create a surplus. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 38 .

Planning Organising Staffing Leading Controlling 39 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED . 4.The Functions of Management / Managers 1. 5. 3. 2.

Planning Planning involves selecting missions and objectives and the actions to achieve them. choosing future courses of action from among alternatives. it requires decision making. that is. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 40 .

it is hoped. assigned to people who can do them best. It is intentional in the sense of making sure that all the tasks necessary to accomplish goals are assigned and. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 41 .Organising Organising is that part of managing that involves establishing an intentional structure of roles for people to fill in an organisation.

selecting.Staffing Staffing involves filling. promoting. and training or otherwise developing both new entrants and current jobholders so that tasks are accomplished effectively and efficiently. This is done by identifying work-force requirements. the positions in the organisation structure. placing. and keeping filled. compensating. inventorying the people available. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 42 . and recruiting. planning the careers of. appraising.

Leading Leading is influencing people so that they will contribute to organisation and group goals. Leading involves motivation. it has to do predominantly with the interpersonal aspect of managing. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 43 . leadership styles and approaches and communication.

and helping to correct those deviations. showing where deviations from the standards exist. It involves measuring performance against goals and plans. controlling facilitates the accomplishment of plans. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 44 . In short.Controlling Controlling is measuring and correcting individual and organisational performance to ensure that events conform to plans.

Coordination – The Essence of Managership Some authorities consider coordination to be a separate function of the manager. Each of the managerial functions is an exercise contributing to coordination. to regard it as the essence of managership. however. for achieving harmony among individual efforts towards the accomplishment of group goals. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 45 . It seems more accurate.

Levels and Types of Managers THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 46 .

middle. However.Types of Managers We have been using the term manager to mean anyone who is responsible for carrying out the four main activities of management. and top managers) and by the range of organisational activities for which they are responsible (so-called functional and general managers) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 47 . managers can be classified in two ways: by their level in the organisation (so-called first-line.

Examples of first-line managers are the foreman or production supervisor in a manufacturing plant. The lowest level in an organisation at which individuals are responsible for the work of others is called first-line or first-level management. First-line managers direct operating employees only.‖ THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 48 . they do not supervise other managers.Management Levels First-Line Managers. the technical supervisor in a research department and the clerical supervisor in a large office. First-level managers are often called ―supervisors.

Management Levels …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 49 . Middle Managers. The term middle management can include more than one level in an organisation. Middle managers direct the activities of lowerlevel managers and sometimes those of operating employees as well. Middle managers‘ principal responsibilities are to direct the activities that implement their organisations‘ policies and to balance the demands of their superiors with the capacities of their subordinates.

It establishes operating policies and guides the organisation‘s interactions with its environment. top management is responsible for the overall management of the organisation. Typical titles of top managers are ―chief executive officer. Composed of a comparatively small group of executives.‖ Actual titles vary from one organisation to another and are not always a reliable guide to membership in the highest management classification. Top Managers.Management Levels …Contd.‖ and ―senior vice president.‖ ―president. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 50 .

Functional Managers. such as production.Functional and General Managers The other major classification of managers depends on the scope of the activities they manage. or finance. The people and activities headed by a functional manager are engaged in a common set of activities. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 51 . The functional manager is responsible for only one organisational activities. marketing.

a subsidiary. oversees a complex unit. He or she is responsible for all the activities of that unit. each heading a relatively independent division.Functional and General Managers …Contd. General Managers. marketing and finance. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 52 . such as a company. The general manager. such as its production. A small company may have only one general manager—its president or executive vice president—but a large organisation may have several. or an independent operating division. on the other hand.

with a different general manager responsible for each. General Managers. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 53 . each of these divisional heads is responsible for all the activities of the unit. In a large food company.Functional and General Managers …Contd. Like the chief executive of a small company. a refrigerated-products division and a frozen-food-products division. there may be a grocery-products division. for example.

Managers of small private clinics. But they differ in the amount of time they devote to each of these activities. organise.Management Level and Skills Managers at every level plan. Some of these differences depend on the kind of organisation for which the manager works. then do directors of large hospitals. for example. spend their time quite differently than the heads of large research hospitals. lead and control. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 54 . Managers of clinics spend comparatively more time practicing medicine and less time actually managing.

we will consider how management skills and activities differ at these various levels and look at the various roles managers perform. In the following sections.Management Level and Skills …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 55 . Other differences in the ways manages spend their time depend upon their levels in the organisational hierarchy.

. Executive / Officer. Senior Management (e. CGM. GM. CFO.) 4. Junior Management (e.Levels 1. AGM. Senior Executive / Officer. etc.g..g. Managing Director. DGM. Assistant Manager. SGM. Top Management (e. Vice-President. Senior Manager. Chairman. Chief Manager.g. COO. etc.g. etc.) 3. CEO / CXO. etc. CIO. CPO. Middle Management (e. Assistant Executive / Officer.) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 56 . Country Manager. Manager. President. Deputy Manager. sometimes called the CClass) 2. CMO.

Roles THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 57 .

People Raw Material Purchase Product / Service Sales Accounts THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 58 .

Manpower Material Manufacture / Service Market Money THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 59 .

Human Resource (Personnel) Materials Manufacturing / Service Marketing Finance & Accounts THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 60 .

Roles – What Do Managers Do? THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 61 .

They make decisions.What Do Managers Do? Let‘s begin by briefly defining the terms manager and the place where managers work—the organisation. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 62 . allocate resources and direct the activities of others to attain goals. Then let us look at the manager‘s job. what do managers do? Managers get things done through other people. specifically.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 63 .What Do Managers Do? An organisation is a consciously coordinated social unit. that functions on a relatively continuous basis to achieve a common goal or set of goals. hospitals. The people who oversee the activities of others and who are responsible for attaining goals in these organisations are managers (although they are sometimes called administrators. military units. manufacturing and service firms are organisations and so are schools. police departments and local. composed of two or more people. especially in not-for-profit organisations). state and central government agencies. retail stores. On the basis of this definition.

Informational and 3. Interpersonal. 2. Decisional roles. On the basis of this study. managerial roles were identified and grouped into: 1.Managerial Roles Approach An original study was done by Henry Mintzberg by observing the working of five chief executives. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 64 .

Henry Mintzberg made an extensive survey of existing research on the subject of managerial roles and integrated his findings with the results of his study. Every manager – from the programme director of a college club to the chief executive of a multinational corporation – takes on a wider range of roles to move the organisation towards its stated objectives. Roles are thus inherent in functions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 65 .Managerial Roles We see managers as organisational planners. organisers. leaders and controllers. A role is the behavioural pattern expected of someone within a functional unit.

Mintzberg concluded that the jobs of most managers are quite similar. informational. This status causes all managers to be involved in interpersonal relationships with subordinates.‖ THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 66 . have formal authority over their organisational units and derive status from that authority. peers and superiors.Managerial Roles …Contd. he argued. who in turn provide managers with the information they need to make decisions. All managers thus play a series of interpersonal. All managers. and decision-making roles that Mintzberg defined as ―organised sets of behaviours.

Interpersonal Roles Three routine interpersonal roles . and liaison – help managers keep their organisations running smoothly.figurehead. leader. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 67 .

They are often held responsible for outcomes over which they have little or no control – thus the frequent dismissals of professional sports managers. managers are symbols and personify. the manager performs ceremonial duties as head of the unit : greeting visitors. More importantly. taking customers for lunch. 68 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED . 1. for both organisational members and outside observers. Figurehead – As a figurehead. an organisation’s successes and failures.Interpersonal Roles …Contd. attending subordinates’ weddings.

Interpersonal Roles …Contd. Leader – Since managers work with and through other people. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 69 . 2. that they are expected to accomplish more than other organisation members. their subordinates’ success or failure is a direct measure of their own success or failure. Because managers have subordinates and other resources. they are able to accomplish more than non-managers – which means. of course. In fact. they are responsible and accountable for their subordinates’ actions as well as for their own.

Interpersonal Roles …Contd. Managers draw upon these relationships to win support for their proposals or decisions and to gain cooperation in carrying out various activities. They may also build or join alliances and coalitions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 70 . 3. All effective managers “play politics” in the sense that they develop networks of mutual obligations with other managers in the organisation. Liaison – Like politicians. managers must learn to work with everyone inside or outside the organisation who can help them achieve their organisational goals.

disseminator.Informational Roles Receiving and communicating information. and spokesperson. Managers need information to make intelligent decisions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 71 . and other people in the organisation depend on information received from or transmitted through managers. are the most important aspects of a manager’s job. Mintzberg identified three informational roles: monitor. Mintzberg suggests.

Informational Roles …Contd. Monitor – Managers are constantly looking for useful information both within and outside the organisation. They question subordinates and collect unsolicited information. usually through their networks of contacts. 1. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 72 . The role of monitor often makes managers the best-informed members of their groups.

In either case. managers distribute important information to subordinates. Some of this is factual information conveyed in staff meetings and memos. but some is based on the manager‘s analysis and interpretation of events. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 73 . 2. it is the manager‘s responsibility to be sure subordinates have the information they need to carry out their duties. Disseminator – In this role.Informational Roles …Contd.

Keeping superiors well-informed is one important aspect of this role. Spokesperson – Managers also transmit information to people outside their own work units. or government officials. contractors. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 74 . Like diplomats. managers may also speak for their work unit within the organisation or represent the entire organisation in dealing with customers. 3.Informational Roles …Contd.

Decision Making Roles According to Mintzberg. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 75 . information is the “basic input to decision making for managers.” who play four decision making roles.

for example. 2. from financial difficulties to strikes to a drop in earnings. Managers are expected to come up with solutions to difficult problems and to follow through – even on unpopular decisions. 1. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 76 . When.Decision Making Roles …Contd. There is almost no limit to the number and types of problems that may occur. Entrepreneur – Managers try to improve their units. managers get hold of a good idea. In this role. they might launch a development project to make it a reality. they initiate change of their own free will. Disturbance Handler – No organisation runs smoothly all the time.

Because such resources are always limited. arrange each day‘s tasks in order of priority. 3.Decision Making Roles …Contd. each manager must strike a balance between various goals and needs. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 77 . problems. Resource Allocator – Every manager faces a number of organisational goals. Many managers. so the most important things are done right away and less important tasks are put off until later. for example. and needs – all of which compete for her / his time and resources (both human and material).

Managers also handle negotiations within the organisation. People working for the same organisation often disagree about goals or the most effective way of attaining them. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 78 . Negotiator – Managers spend a lot of their time negotiating because only they have the knowledge and authority this role demands.Decision Making Roles …Contd. Some of these negotiations involve outside organisations. 4.

According to Mintzberg. Mintzberg‘s work calls attention to the uncertain. The ability to recognise the appropriate role to play in each situation and the flexibility to change roles readily are characteristics of the effective manager. effective managers have neither the time nor the desire to be deep thinkers. Reality is only partly predictable and controllable. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 79 . coping with life‘s dynamic parade of challenges and surprises. above all. doers. They are.Managerial Roles …Contd. turbulent environment managers face in the real world.

Skills THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 80 .

Technical skill is the ability to use the procedures. has identified three basic kinds of skills: technical.Managerial Skills and the Organisational Hierarchy Robert L. Surgeons. techniques and knowledge of a specialized field. musicians and accountants all have technical skills in their respective fields. Every manager needs all three. engineers. a teacher and business executive. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 81 . Katz. human and conceptual.

Human skill is the ability to work with. It involves seeing the organisation as a whole.Managerial Skills and the Organisational Hierarchy …Contd. Conceptual skill is the ability to coordinate and integrate all of an organisation‘s interests and activities. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 82 . understand and motivate other people. as individuals or in groups. understanding how its parts depend on one another and anticipating how a change in any of its parts will affect the whole.

Katz identified three kinds of skills for administrators. Conceptual Skill 4.Managerial Skills and the Organisational Hierarchy …Contd. 1. To these may be added a fourth – the ability to design solutions. Technical Skill 2. Robert L. Human Skill 3. Design Skill THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 83 .

it involves working with tools and specific techniques. and their supervisors should have the ability to teach them how to use these tools. For example. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 84 . processes and procedures. Technical Skill is knowledge of and proficiency in activities involving methods. mechanics work with tools. accountants apply specific techniques in doing their job.Managerial Skills and the Organisational Hierarchy …Contd. Similarly. Thus.

Conceptual Skill is the ability to see the ―big picture. Human Skill is the ability to work with people. it is cooperative effort.Managerial Skills and the Organisational Hierarchy …Contd. it is teamwork. it is the creation of an environment in which people feel secure and free to express their opinions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 85 .‖ to recognise significant elements in a situation and to understand the relationships among the elements.

If managers merely see the problem and become ―problem watchers. particularly at upper organisational levels. managers must be able to do more than see a problem. To be effective. Design Skill is the ability to solve problems in ways that will benefit the enterprise. the skill of a good design engineer in working out a practical solution to a problem. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 86 . They must have. Managers must also have that valuable skill of being able to design a workable solution to the problem in the light of the realities they face.Managerial Skills and the Organisational Hierarchy …Contd.‖ they will fail. in addition.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 87 . their ability to tap the technical skills of their subordinates is more important than their own technical proficiency. Human skill. their relative importance depends mainly on the manager‘s rank in the organisation.Managerial Skills and the Organisational Hierarchy …Contd. Technical skill is most important in the lower levels. is important for managers at every level: Because managers must work primarily through others. Katz suggests that although all three of these skills are essential to a manager. by contrast.

the importance of conceptual skill increases as one rises through the ranks of a management system based on hierarchical principles of authority and responsibility. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 88 .Managerial Skills and the Organisational Hierarchy …Contd. Finally.

VARIATIONS IN USE OF LEADERSHIP SKILLS AT DIFFERENT ORAGNISATIONAL LEVELS 100 CONCEPTUAL 50 HUMAN TECHNICAL 0 JUNIOR MANAGEMENT MIDDLE MANAGEMENT TOP MANAGEMENT 89 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED .

Evolution of Management Thought THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 90 .

W. Modern Era (TQM. Early Practices 3. Human Relation Era a) Elton Mayo b) Dale Carnegie c) Abraham Maslow 2. The Classical Era a) F. BPR. Taylor b) Henry Fayol c) Max Weber 5.Different Eras in Evolution of Management Thought 1. ISO. The Behavioural Era a) Adam Smith b) Charles Babbage c) Robert Oven a) Hugo Munsterberg 4. Six Sigma.) 91 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED . etc. QS.

Scientific Management Theory Scientific management theory arose in part from the need to increase productivity. Henry L. Frederick W. In the United States especially. The only way to expand productivity was to raise the efficiency of workers. Taylor. skilled labour was in short supply at the beginning of the twentieth century. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 92 . Thus. Gantt and the Gilbreths—Frank and Lillian—devised the body of principles known as scientific management theory.

Instead of relying on traditional work methods. he analysed and timed steel workers‘ movements on a series of jobs. he broke each job down into its components and designed the quickest and best methods of performing each component. Taylor. Frederick W. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 93 . Using time study as his base. Taylor (1856-1915) based his management system on productionline time studies. Frederick W.Scientific Management Theory …Contd.

He also encouraged employers to pay more productive workers at a higher rate than others. Taylor thereby established how much workers should be able to do with the equipment and materials at hand. The higher rate was carefully calculated and based on the greater profit that would result from increased production. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 94 . Thus workers were urged to surpass their previous performance standards to earn more pay. Taylor called his plan the differential rate system.Scientific Management Theory …Contd.

He believed that workers who met the higher standards need not fear layoffs because their companies benefited from their higher productivity. He insisted that no one would be hurt by the differential system because those workers who fell below the standard would find other work ―in a day or two‖ because of the existing labour shortage. The higher payments were assured because they were ―scientifically correct‖ rates-set at a level that was best for both company and worker.Scientific Management Theory …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 95 .

In 1893. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 96 . He was soon able to report impressive improvements with one client. There seemed little reasons to believe improvements could be made.Scientific Management Theory …Contd. Simonds Rolling Machine Company. In one operation. Simonds employed 120 experienced women to inspect bicycle ball bearings. The work was tedious and the hours were long. Taylor decided he could best put his ideas into effect as a private consulting management engineer. Taylor proved otherwise.

wages rose by 80 to 100 percent and worker morale went up. he studied and timed the movements of the best workers. 35 inspectors did the work formerly done by 120. The results were impressive. accuracy improved by two-thirds. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 97 . the differential rate system and other improvements. He shortened the workday—from 10½ to 8½ hours—and introduced rest periods. First. Then he trained the rest in the methods of their more effective co-workers. The least effective workers were transferred or laid off.Scientific Management Theory …Contd.

workers and unions began to oppose his approach because they feared that working harder or faster would exhaust whatever work was available. Although Taylor‘s methods led to dramatic increases in productivity and to higher pay in a number of instances. The fact that workers had been laid off at Simonds and other organisations that adopted Taylor‘s methods encouraged this fear. causing layoffs. As Taylor‘s ideas spread. so did the opposition to them. including Bethlehem Steel. Taylor reported equally impressive results for other clients.Scientific Management Theory …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 98 .

Taylor rested his philosophy on four basic principles: 1. Both in his testimony and in his two books. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 99 . so that the best method for performing each task could be determined.Scientific Management Theory …Contd. The development of a true science of management. By 1912. resistance to Taylorism had caused a strike at the Watertown Arsenal in Massachusetts and hostile members of Congress called on Taylor to explain his ideas and techniques. Shop Management and The Principles of Scientific Management.

Intimate. so that each worker would be given responsibility for the task for which he or she was best suited.Scientific Management Theory …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 100 . 3. The scientific selection of workers. 2. friendly cooperation between management and labour. 4. The scientific education and development of the worker.

Taylor contended that the success of these principles required ―a complete mental revolution‖ on the part of management and labour. Rather than quarrel over whatever profits there were. In short. both sides should try to increase production. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 101 . profits would rise to such an extent that labour and management would no longer have to fight over them. Taylor believed that management and labour had a common interest in increasing productivity. by so doing.Scientific Management Theory …Contd.

Contributions of Scientific Management Theory The modern assembly line pours out finished products faster than Taylor could ever have imagined. ranging from fast-food service to the training of surgeons. This production ―miracle‖ is just one legacy of scientific management. its efficiency techniques have been applied to many organisations outside industry. In addition. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 102 . making us aware that any task can be made more efficient and rational.

scientific management fostered a rational approach to solving organisational problems. Scientific management‘s influence can also be seen in the emphasis many organisations place on job design and the scientific selection and development of workers. it laid the groundwork for the professionalisation of management. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 103 . Thus. More importantly.Contributions of Scientific Management Theory …Contd.

failing to consider the tensions created when these needs are frustrated. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 104 . The then-popular model of human behaviour held that people were ―rational‖ and motivated primarily to satisfy their economic and physical needs. However. this model overlooked the human desire for job satisfaction and the social needs of workers as a group.Limitations of Scientific Management Theory Scientific management was limited by its underlying assumptions about human beings.

reinforcing a pattern of suspicion and mistrust that coloured labour-management relations for decades. As a result. more workers joined unions.Limitations of Scientific Management Theory …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 105 . by extension. the abuses of the ―robber barons‖ sparked public outrage and the first wave of federal regulation of business. profitability . Furthermore.and.led some managers to exploit both workers and customers. In addition. the emphasis on productivity .

Scientifically select and then train. workers chose their own work and trained themselves as best they could. and develop the worker.) 2. (Previously.) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 106 . workers used the “rule-of-thumb” method. teach.Scientific Management – Taylor’s Principles of Management 1. Develop a science for each element of an individual’s work. (Previously.

3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. (Previously. management and workers were in continual conflict.) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 107 .Taylor’s Principles of Management …Contd.

) THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 108 . almost all the work and the greater part of the responsibility were thrown upon the workers. (Previously. 4. Management takes over all work for which it is better suited than the workers. Divide work and responsibility almost equally between management and workers.Taylor’s Principles of Management …Contd.

The other branch of classical management .grew out of the need to find guidelines for managing such complex organisations as factories.classical organisation theory .Classical Organisation Theory Scientific management was concerned with increasing the productivity of the shop and the individual worker. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 109 .

Classical Organisation Theory …Contd. Henri Fayol. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 110 . From this basic insight. one that retains much of its force to this day. Fayol believed that sound management practice falls into certain patterns that can be identified and analysed. he drew up a blueprint for a cohesive doctrine of management. Henri Fayol (1841-1925) is generally hailed as the founder of the classical management school .not because he was the first to investigate managerial behaviour but because he was the first to systematise it.

however. Fayol believed that ―with scientific forecasting and proper methods of management. Fayol was like Taylor.Classical Organisation Theory …Contd. satisfactory results were inevitable. his contemporary. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 111 .‖ In his faith in scientific methods. Fayol was interested in the total organisation. While Taylor was basically concerned with organisational functions.

Fayol divided business operations into six interrelated activities: 1. 3. financial—acquiring and using capital. 5. 4.Classical Organisation Theory …Contd. management 112 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED . Drawing on his many years as a manager. security—protecting employees and property. commercial—buying raw materials and selling products. 2. technical—producing and manufacturing products. accounting and 6.

‖ THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 113 . because he felt it had been the most neglected of business operations. Of these. he focused primarily on management. The next few slides list the 14 principles of management Fayol ―most frequently had to apply.Classical Organisation Theory …Contd.

Whenever authority is exercised. Division of Work. This principle is the same as Adam Smith‘s ―division of labour. 2. Managers must be able to give orders.‖ Specialisation increases output by making employees more efficient. however. responsibility arises.Fayol’s Principles of Management 1. Authority. Authority gives them this right. Along with authority. goes responsibility. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 114 .

3. Good discipline is the result of effective leadership. Employees must obey and respect the rules that govern the organisation. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 115 . a clear understanding between management and workers regarding the organisation‘s rules. Discipline. and the judicious use of penalties for infractions of the rules.Fayol’s Principles of Management …Contd.

Unity of Direction. Each group of organisational activities that have the same objective should be directed by one manager using one plan. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 116 .Fayol’s Principles of Management …Contd. 4. Every employee should receive orders from only one superior. Unity of Command. 5.

Subordination of Individual Interests to the General Interests. The interests of any one employee or group of employees should not take precedence over the interest of the organisation as a whole.Fayol’s Principles of Management …Contd. Workers must be paid a fair wage for their services. 7. 6. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 117 . Remuneration.

Centralisation refers to the degree to which subordinates are involved in decision making. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 118 . Whether decision making is centralised (to management) or decentralised (to subordinates) is a question of proper proportion. 8. Centralisation.Fayol’s Principles of Management …Contd. The problem is to find the optimum degree of centralisation for each situation.

The line of authority from top management to the lowest ranks represents the scalar chain.Fayol’s Principles of Management …Contd. if following the chain creates delays. Communications should follow this chain. 9. However. Scalar Chain. cross-communications can be allowed if agreed to by all parties and superiors are kept informed. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 119 .

11. People and materials should be in the right place at the right time. Equity. 10. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.Fayol’s Principles of Management …Contd. Stability of Tenure of Personnel. High employee turnover is inefficient. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 120 . 12. Order. Managers should be kind and fair to their subordinates.

Employees who are allowed to originate and carry out plans will exert high levels of effort. 13. Promoting team spirit will build harmony and unity within the organisation. 14. Initiative. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 121 .Fayol’s Principles of Management …Contd. Esprit de Corps.

for human beings who are equally different and changeable and for many other variable elements. everything is a question of degree. are flexible and can be adapted to meet every need. The same principle is hardly ever applied twice in exactly the same way. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 122 . rather than rules or laws: I prefer the word principles in order to avoid any idea of rigidity. it is just a question of knowing how to use them.Classical Organisation Theory …Contd. too. Note that Fayol carefully chose the term principles. because we have to allow for different and changing circumstances. as there is nothing rigid or absolute in administrative matters. The principles.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 123 . Before Fayol. not made. that management was a skill like any other—one that could be taught once its underlying principles were understood. it was generally believed that ―managers are born. however.Classical Organisation Theory …Contd.‖ Fayol insisted.

the German sociologist Max Weber (1864-1920) developed a theory of bureaucratic management that stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority.Classical Organisation Theory …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 124 . Reasoning that any goal-oriented organisation consisting of thousands of individuals would require the carefully controlled regulation of its activities. Max Weber.

Classical Organisation Theory …Contd. For Weber. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 125 . Weber also believed that technical competence should be emphasised and that performance evaluations should be made entirely on the basis of merit. the ideal organisation was a bureaucracy whose activities and objectives were rationally thought out and whose divisions of labour were explicitly spelled out.

impersonal organisations that put impersonal efficiency ahead of human needs. We should be careful. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 126 .Classical Organisation Theory …Contd. though. Today we often think of bureaucracies as vast. Weber sought to improve the performance of socially important organisations by making their operations predictable and productive. Weber‘s model of bureaucratic management clearly advanced the formation of huge corporations such as Coca-Cola and Exxon. not to apply our negative connotations of the word bureaucracy to the term as Weber used it. Like the scientific management theorists.

Offices or positions are organised in a hierarchy. routine and well-defined tasks. 2. Jobs are broken down into simple. Authority Hierarchy. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 127 .Weber’s Ideal Bureaucracy 1. Job Specialisation. each lower one being controlled and supervised by a higher one.

All organisational members are to be selected on the basis of technical qualifications demonstrated by training. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 128 . Formal Selection. 3. Formal Rules and Regulations. education. or formal examination. 4.Weber’s Ideal Bureaucracy …Contd. To ensure uniformity and to regulate the actions of employees. managers must depend heavily on formal organisational rules.

5. Impersonality.Weber’s Ideal Bureaucracy …Contd. They work for fixed salaries and pursue their careers within the organisation. avoiding involvement with personalities and personal preferences of employees. Managers are professional officials rather than owners of the units they manage. Rules and controls are applied uniformly. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 129 . 6. Career Orientation.

Contributions of Classical Organisation Theory
Much in classical organisation theory has endured. For example, the concept that management skills apply to all types of group activity has, if anything, increased in importance. The concept that certain identifiable principles underlie effective managerial behaviour and that these principles can be taught also continues to be valid.
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Contributions of Classical Organisation Theory …Contd.
Although classical organisation theory has been criticised by other theorists, it has been well received by practicing managers for some time. This may be because classical organisation theory helped isolate major areas of practical concern to the working manager. Above all, the classical organisation school made managers aware of the basic kinds of problems they would face in any organisation.
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Limitations of Classical Organisation Theory
Classical organisation theory has been criticised on the ground that it was more appropriate for the past, when organisations were in a relatively stable and predictable environment, than for the present, when organisational environments are more turbulent. For example, classical theorists insisted that managers maintain their formal authority, but today‘s better-educated employees are less accepting of formal authority, especially when it is applied arbitrarily.
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Limitations of Classical Organisation Theory …Contd.
Classical organisation guidelines have also been criticised as too general for today‘s complex organisations, where increased specialisation has blurred the lines of authority. The maintenance engineer, for example, may take orders from the plant manager and the chief engineer. Thus we have a conflict between the classical principles of division of labour and unity of command.
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The Behavioural School : The Organisation is People
The behavioural school emerged partly because the classical approach did not achieve sufficient production efficiency and workplace harmony. To managers‘ frustration, people did not always follow predicted or expected patterns of behaviour. Thus there was increased interest in helping managers deal more effectively with the ―people side‖ of their organisations. Several theorists tried to strengthen classical organisation theory with the insights of sociology and psychology. Many of these insights have contributed to our thinking about employee motivation.
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When ―employee management‖ stimulates more and better work. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 135 . when morale and efficiency deteriorate. The human relations movement grew out of early attempts to systematically discover the social and psychological factors that would create effective human relations. the organisation has effective human relations.The Human Relations Movement Human relations is frequently used as a general term to describe the ways in which managers interact with their subordinates. its human relations are said to be ineffective.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 136 . The human relations movement grew out of a famous series of studies conducted at the Western Electric Company from 1924 to 1933. The Hawthorne Studies began as an attempt to investigate the relationship between the level of lighting in the workplace and worker productivity—the type of question Frederick Taylor and his colleagues might well have addressed. The Hawthorne Experiments.The Human Relations Movement …Contd. These eventually became known as the ―Hawthorne Studies‖ because many of them were performed at Western Electric‘s Hawthorne plant near Chicago.

The Human Relations Movement …Contd. there was also a tendency for productivity to increase in the test group. although erratically. When the test group‘s lighting was improved. whose lighting remained constant throughout the experiments. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 137 . The results of the experiments were ambiguous. and control groups. which were subjected to deliberate changes in lighting. But when lighting conditions were made worse. In some of the early studies. the Western Electric researchers divided the employees into test groups. productivity tended to increase.

the control group‘s output also rose over the course of the studies. Obviously. even though it experienced no changes in illumination. In a new set of experiments. something besides lighting was influencing the workers‘ performance.The Human Relations Movement …Contd. a small group of workers was placed in a separate room and a number of variables were altered: Wages were increased. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 138 . rest periods of varying lengths were introduced. To compound the mystery. the workday and workweek were shortened.

the results were ambiguous. The researchers. became involved. Again. who now acted as supervisors.The Human Relations Movement …Contd. Elton Mayo (18801949) and some associates from Harvard. but it also rose and fell erratically. including Fritz J. Performance tended to increase over time. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 139 . also allowed the groups to choose their own rest periods and to have a say in other suggested changes. Roethlisberger and William J. Partway through this set of experiments. Dickson.

The Human Relations Movement …Contd. The researchers concluded that employees would work harder if they believed management was concerned about their welfare and supervisors paid special attention to them. Sympathetic supervision had further reinforced their motivation. the test and the control groups had developed a group pride that motivated them to improve their work performance. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 140 . Mayo and his associates decided that a complex chain of attitudes had touched off the productivity increases. In these and subsequent experiments. Because they had been singled out for special attention.

some people (including Mayo himself) speculated that the control group‘s productivity gains resulted from the special attention of the researchers themselves. has remained quite controversial to this day.The Human Relations Movement …Contd. Since the control group received no special supervisory treatment or enhancement of working conditions but still improved its performance. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 141 . This phenomenon. subsequently labeled the Hawthorne effect.

sometimes influenced by a shared antagonism toward the ―bosses.‖ imparted some meaning to their working lives and provided some protection from management. group pressure was frequently a stronger influence on worker productivity than management demands. Many of Western Electric‘s employees found their work dull and meaningless. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 142 . For these reasons. The researchers also concluded that informal work groups—the social environment of employees—have a positive influence on productivity. but their associations and friendships with co-workers.The Human Relations Movement …Contd.

wanting rewarding on-the-job relationships and responding more to work-group pressures than to management control—was necessary to complement the old concept of ―rational man‖ motivated by personal economic needs. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 143 .The Human Relations Movement …Contd. then. the concept of ―social man‖—motivated by social needs. To Mayo.

Mayo had rediscovered Robert Owen‘s centuryold dictum that a true concern for workers. which treated productivity almost exclusively as an engineering problem.‖ paid dividends. the human relations movement improved on the classical approach. In a sense.Contributions of the Human Relations Approach By stressing social needs. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 144 . those ―vital machines.

these researchers spotlighted the importance of a manager‘s style and thereby revolutionised management training. Finally.Contributions of the Human Relations Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 145 . In addition. Instead of focusing just on the individual worker. their work led to a new interest in group dynamics. managers began thinking about group processes and group rewards. More attention was focused on teaching peoplemanagement skills and less on teaching technical skills.

the studies had many weaknesses of design.Limitations of the Human Relations Movement Although the Hawthorne experiments profoundly influenced the way managers approached their jobs and how management research was subsequently conducted. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 146 . analysis and interpretation. Whether Mayo and his colleagues‘ conclusions are consistent with their data is still the subject of lively debate and considerable confusion.

However. too.Limitations of the Human Relations Movement …Contd. The concept of ―social man‖ was an important counterweight to the one-sided ―rational-economic man‖ model. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 147 . but it. Many managers and management writers assumed satisfied workers would be more productive workers. failed to describe completely individuals in the workplace. attempts to increase output during the 1950s by improving working conditions and employee satisfaction did not result in the dramatic productivity increases that had been expected.

Limitations of the Human Relations Movement …Contd. organisational structure and culture and labourmanagement relations also play a part. Salary levels. the interest levels of given tasks. Thus the entire matter of productivity and worker satisfaction had turned out to be far more complex than originally thought. Apparently. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 148 . the social environment in the workplace is only one of several interacting factors that influence productivity.

Mirvis and Lawler proposed two arguments: 1.Limitations of the Human Relations Movement …Contd. In attempting to measure the performance of bank tellers in terms of cash shortages. Lawler in 1977 produced inconclusive findings about the relationship between job satisfaction and job performance. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 149 . For example. a rigorous study conducted by social psychologists P.E. Mirvis and E. Satisfied tellers were less likely to show shortages through either carelessness or dishonesty.

However.Limitations of the Human Relations Movement …Contd. the correspondence is generally lower than expected. 2. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 150 . subsequent analysis of this study tends to support the contention that when the quantity of a worker‘s output is used to measure the relationship between satisfaction and performance. Satisfied workers were less likely to leave their jobs and so saved their employers the considerable expense of recruiting and training replacements.

or does the worker‘s perception that he or she is performing well lead to satisfaction? Satisfaction does seem to lower absenteeism and job turnover. Finally. Such analysis raises a crucial question: Does a worker perform well because he or she is satisfied. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 151 . but analysis of the Mirvis-Lawler data shows that even this correspondence is lower than one might expect.Limitations of the Human Relations Movement …Contd. even the correlation between dissatisfied workers and job turnover is smaller than one might assume.

besides involving numerous variables. First. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 152 . job satisfaction is largely an emotional response to one‘s work and emotional factors. it is difficult to separate the issue of job satisfaction from the equally complex issue of job motivation. Second.Limitations of the Human Relations Movement …Contd. there seem to be at least two reasons why it is difficult to study the relationship between job satisfaction and performance or productivity. are notoriously hard to measure in terms precise enough to satisfy the requirements of social scientific study. In conclusion.

used more sophisticated research methods and became known as ―behavioural scientists‖ rather than ―human relations theorists. more rigorously trained in the social sciences (psychology.From Human Relations to the Behavioral Science Approach Mayo and his colleagues pioneered the use of the scientific method in their studies of people in the work environment. sociology and anthropology). Later researchers.‖ THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 153 .

for example) and self-actualising needs (such as the need for meaning and personal growth). THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 154 . such as Argyris.From Human Relations to the Behavioral Science Approach …Contd. at the bottom of which are physical and safety needs and at the top of which are ego needs (the need for respect. Maslow and McGregor. the needs people are motivated to satisfy fall into a hierarchy. Some behavioural scientists. According to Maslow. Mayo and the human relations theorists introduced ―social man. believed that ―self-actualising man‖ was a more accurate concept for explaining human motivations.‖ motivated by a desire to form relationships with others.

Some later behavioural scientists feel that even this model cannot explain all the factors that may motivate people in the workplace. lower-level needs must be satisfied before higher-level needs can be met. Since many lower-level needs are routinely satisfied in contemporary society.From Human Relations to the Behavioral Science Approach …Contd. most people are motivated more by the higher-level ego and self-actualising needs. In general. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 155 . They argue that not everyone goes predictably from one need level to the next.

From Human Relations to the Behavioral Science Approach …Contd. the more realistic model of human motivation is ―complex man. others are satisfied with nothing less than the fulfillment of their highest-level needs and may even choose to work in jobs that threaten their safety if that means they can attain uniquely personal goals. To these behavioural scientists.‖ The effective manager is aware that no two people are exactly alike and tailors his or her attempts to influence workers according to their individual needs. work is only a means for meeting lower-level needs. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 156 . For some people.

Contributions of the Behavioral Science School Behavioural scientists have made enormous contributions to our understanding of individual motivation. conflict resolution. group behaviour. Their findings have enabled managers to become much more sensitive and sophisticated in dealing effectively with subordinates. Behavioural scientists continue to offer new insights in such important areas as leadership. the acquisition and use of power. organisational change and communication. interpersonal relationships at work and the importance of work to human beings. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 157 .

many management writers— including some behavioural scientists—believe the field‘s potential has not been fully realised. Because they do not like to admit they need help in dealing with people.Limitations of the Behavioral Science School Despite its impressive contributions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 158 . managers may resist suggestions from behavioural scientists.

making it difficult for managers to decide whose advice to follow. the models. behavioural scientists often differ in their conclusions and recommendations. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 159 . Finally. because human behaviour is so complex. theories and jargon of behavioural scientists may seem too complicated and abstract to practicing managers.Limitations of the Behavioral Science School Also.

in influencing an individual‘s behaviour and hinted that humans could not be treated as appendages of machines. and early 1930s. informal leaders. and so on. participative leadership. The experiments brought out the significance of informal groups. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 160 . conducted by Elton Mayo and his associates.Contribution Made by Elton Mayo The Hawthorne experiments. open communication. during the late 1920s. exploded the myth about direct relationship between productivity and working conditions or economic rewards. for the first time.

Motivation is quite a complex process and many factors are capable of influencing behaviour. Money is a necessary condition but not a sufficient one for motivating people to work. it was realised that the human relations model represented only an incomplete statement of human behaviour at work. They have to be treated as ‗variables‘ rather than ‗givens‘.Contribution Made by Elton Mayo …Contd. Soon after. People have social and psychological needs too. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 161 .

that many of them sincerely want to contribute. values and perceptions of the work environment. supervisory style. include the nature of job. and that by and large they have the capacity to exercise a great deal of self-direction and self-control at work. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 162 . the current thinking is greatly influenced by the systems perspective and it reflects the growing belief that different employees want different rewards from their jobs. Therefore. performance itself and employee needs. inter alia. These factors may.Contribution Made by Elton Mayo …Contd.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 163 . Several points of view have emerged and the same can be broadly categorised into two: content and process. that is. These approaches take a more complex and comprehensive view to understand employee motivation. How to motivate a person is a question which has attracted wide attention.Contribution Made by Elton Mayo …Contd. the whats of behaviour—what causes a person to behave the way he does. Content theories are those which look for ‗things‘ that motivate behaviour.

These theories try to describe and analyse how personal factors (internal to the person) interact and influence each other to produce certain kinds of behaviour. on the other hand. There is little or no analysis of interactions among variables. focus on the psychological processes underlying behaviour. Some content theories talk about needs.Contribution Made by Elton Mayo …Contd. direct. whereas others may deal with environmental influences. These theories try to explain the factors within a person that energise. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 164 . and stop behaviour. Process theories.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 165 . that is. these theories look for patterns of interactions among variables which together determine behaviour. The emphasis is on the decision processes within the person that underlie behaviour. Adopting a system perspective.Contribution Made by Elton Mayo …Contd. These theories explain the ‗how‘ of behaviour. how various processes have led to a particular behaviour or how interactions among various variables have resulted into a particular behaviour.

The Evolution of Management Theory
Although we have described the major schools of management thought in terms of their chronological emergence, all continue to maintain their importance today. Moreover, current management theory continues to generate exciting concepts. It is impossible to predict what future generations well be studying, but at this point we can identify at least three additional perspectives on management theory that will become important: the systems approach, the contingency approach and a neo-human relations approach.
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The Systems Approach
Rather than dealing separately with the various segments of an organisation, the systems approach to management views the organisation as a unified, purposeful system composed of interrelated parts. This approach gives managers a way of looking at the organisation as a whole and as a part of the larger, external environment. In so doing, systems theory tells us that the activity of any segment of an organisation affects, in varying degrees, the activity of every other segment.
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The Systems Approach …Contd.
Production managers in a manufacturing plant, for example, would like to have long uninterrupted production runs of standardised products in order to maintain maximum efficiency and low costs. Marketing managers, on the other hand, wanting to offer quick delivery of a wide range of products, would like a flexible manufacturing schedule that can fill special orders on short notice. Systems-oriented production managers would make scheduling decisions only after they have identified these decisions‘ impact on other departments and the entire organisation.
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The Systems Approach …Contd.
The point of the systems approach is that managers cannot function wholly within the confines of the traditional organisation chart. They must mesh their department with the whole enterprise, and to do that they have to communicate with other employees and departments and frequently with representatives of other organisations as well.
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The Systems Approach …Contd.
Some Key Concepts Many of the concepts of general systems theory are finding their way into the language of management. As managers, we need to be familiar with the systems vocabulary so we can keep pace with current developments.

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The Systems Approach …Contd.
Subsystems – The parts that make up the whole of a system are called subsystems. And each system in turn may be a subsystem of a still larger whole. Thus a department is a subsystem of a plant, which may be a subsystem of a company, which may be a subsystem of a conglomerate or an industry, which is a subsystem of the national economy, which is a subsystem of the whole system.
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Synergy – Synergy means that the whole is greater than the sum of its parts. synergy means that as separate departments within an organisation cooperate and interact. In organisational terms. in a small firm. it is more efficient for each department to deal with one financing department than for each department to have a separate financing department of its own. For example.The Systems Approach …Contd. they become more productive than if each had acted in isolation. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 172 .

is a far more open system than a monastery or a prison. for example.The Systems Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 173 . but the extent to which they do so varies. An automobile plant. All organisations interact with their environment. it is considered a closed system if it does not. Open and Closed Systems – A system is considered an open system if it interacts with its environment.

System Boundary – Each system has a boundary that separates if from its environment. oil companies wishing to engage in offshore drilling now must consider public concern for the environment. in an open system. the system boundary is rigid. In a closed system.The Systems Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 174 . The system boundaries of many organisations have become increasingly flexible in recent years. the boundary is more flexible. For example.

undergo transformation processes within the system (operations that alter them) and exit the system as outputs (goods and services). THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 175 . materials. These enter the system from the environment as inputs (raw materials. for example). Flow – A system has flows of information. and energy (including human energy).The Systems Approach …Contd.

information is fed back to the appropriate people or perhaps to a computer so that the work can be assessed and.The Systems Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 176 . Figure in the next slide shows the flows of information. energy and feedback in an open system. if necessary. As operations of the system proceed. corrected. materials. Feedback – Feedback is the key to system controls.

The Systems Approach …Contd. EXTERNAL ENVIRONMENT INPUT (Resources) o Human o Capital  Land  Equipment  Building o Technology o Information TRANSFORMATION OR CONVERSION PROCESS OUTPUT oGoods oServices oOthers FEEDBACK THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 177 .

Thus it provides a framework within which we can plan actions and anticipate both immediate and far-reaching consequences. With a systems perspective. general managers can more easily maintain a balance between the needs of the various parts of the enterprise and the needs and goals of the whole firm.The Systems Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 178 . while allowing us to understand unanticipated consequences as they develop. Systems theory calls attention to the dynamic and interrelated nature of organisations and the management task.

it seems most likely that systems theory will be incorporated into the thinking of all the major schools. though. At present.The Systems Approach …Contd. Its advocates believe systems theory will either absorb concepts of the other management schools until it becomes dominant or eventually develop into a well-defined school by itself. The systems approach has already permeated management thinking and the concepts just described are an integral part of the thought processes and research designs of both on-the-job managers and academic theorists of all three major schools. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 179 .

Systems have boundaries. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 180 . but they also interact with the external environment. i.. Recognises importance of studying interrelatedness of planning. organisations are open systems.Systems Approach Characteristics / Contributions Systems concepts have broad applicability.e. organising and controlling in an organisation as well as the many subsystems.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 181 .Systems Approach …Contd. as claimed by some proponents of this approach. Limitations Can hardly be considered a new approach to management.

‖ The task of the economist. is to specify upon what it depends and in what ways. Kindleberger would continue. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 182 .The Contingency Approach The well-known international economist Charles Kindleberger was fond of telling his students at MIT that the answer to any really engrossing question in economics is: ―It depends.

so it is not surprising that a recent approach seeks to integrate the various schools of management thought by focusing on the interdependence of the many factors involved in the managerial situation. Management theory attempts to determine the predictable relationships between situations. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 183 . ―It depends‖ is an appropriate response to the important questions in management as well. actions and outcomes.The Contingency Approach …Contd.

for example. consultants and researchers who tried to apply the concepts of the major schools to reallife situations. Why. The contingency approach (sometimes called the situational approach) was developed by managers.The Contingency Approach …Contd. did an organisational development programme work brilliantly in one situation and fail miserably in another? THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 184 . they sought an explanation.

a technique that works in one case will not necessarily work in all cases. best contribute to the attainment of management goals. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 185 .The Contingency Approach …Contd. in a particular situation. under particular circumstances and at a particular time. According to the contingency approach. the manager‘s task is to identify which technique will. Advocates of the contingency approach had a logical answer to all such questions: Results differ because situations differ.

for example. The behavioural scientist may instead seek to create a psychologically motivating climate and recommend some approach like job enrichment—the combination of tasks that are different in scope and responsibility and allow the worker greater autonomy in making decisions. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 186 . the classical theorist may prescribe a new work-simplification scheme. Where workers need to be encouraged to increase productivity.The Contingency Approach …Contd.

However. work simplification would be the best solution. But the manager trained in the contingency approach will ask. a job-enrichment programme might be more effective. with skilled workers driven by pride in their abilities. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 187 . ―Which method will work best here?‖ If the workers are unskilled and training opportunities and resources are limited.The Contingency Approach …Contd.

For this reason. by seeking to define those factors that are crucial to a specific task or issue and by clarifying the functional interactions between related factors.The Contingency Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 188 . advocates of the contingency approach see it as the leading branch of management thought today. The contingency approach builds upon the systems approach by focusing in detail on the relationships between system parts.

for example. They argue that this approach does not incorporate all aspects of systems theory and that it has not yet developed to the point where it can be considered a true theory by itself. by several other theorists.The Contingency Approach …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 189 . however. Critics also contend that there really is not much new about the contingency approach— that. The primacy of the contingency approach is challenged. even classical theorists such as Fayol cautioned that management principles must be applied flexibly.

When working managers applied these principles. The contingency approach tells managers to be aware of the shades and complications in every situation and to actively try to determine what would work best in each particular case. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 190 . they often had a rude encounter with unpredictable reality. Supporters of the contingency approach counter that many theorists forgot the pragmatic cautions of Fayol and others and too often theorists tried to come up with ―universal principles‖ that could be applied in every situation.The Contingency Approach …Contd. though.

Contingency or Situational Approach Characteristics / Contributions Managerial practice depends on circumstances (i.e.. Contingency theory recognises the influence of given solutions on organisational behaviour patterns. a contingency or a situation). THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 191 .

Illustration Cause Effect Depends on Contingency Situation THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 192 .Contingency or Situational Approach …Contd.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 193 .Contingency or Situational Approach …Contd. Limitations Managers have long realised that there is no one best way to do things. Can be very complex. Difficulty in determining all relevant contingency factors and showing their relationships.

This movement began in the 1950s and gained momentum in the 1960s.The Neo-Human Relations Movement The Neo-human relations movement is an integrative approach that combines a positive view of human nature with the scientific study of organisations to prescribe how effective managers should act in most circumstances. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 194 .

though.The Neo-Human Relations Movement …Contd. to propose how management should act in most circumstances.M. Stalker‘s declaration that ―the beginning of administrative wisdom is the awareness that there is no optimum type of management system. That the neo-human relations approach is indebted to the contingency approach is evident in Tom Burns and G. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 195 .‖ The neohuman relations movement goes beyond contingency theory.

The Neo-Human Relations Movement …Contd. Tom Peters and others have combined scientific studies and clinical experience to devise a comprehensive and practical set of principles of management. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 196 . W. Edwards Deming. much as Fayol did in the early part of the century. These principles focus on the concept of ―quality‖ in work and in the individual worker‘s relationship with others.

had been consistently profitable over a 20-year period. companies. These companies. Bechtel. Procter & Gamble and McDonald‘s. Waterman published their study of 43 ―excellently managed‖ U.The Neo-Human Relations Movement …Contd.S. when management consultants Thomas J. Boeing. Peters and Robert H. The neo-human relations movement captured widespread public attention in 1982. Eastman Kodak. 3M. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 197 . which included IBM.

In addition. they were unusually successful in responding to customer needs.The Neo-Human Relations Movement …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 198 . Peters and Waterman concluded that these companies were ―brilliant on the basics‖—they simply did the most fundamental organisational tasks very well. provided a challenging and rewarding work environment for their employees and met their social and environmental obligations effectively.

‖ the research reveals human beings to be emotional. This research. is explicitly about human nature and the ways people interact in organisations. Instead of ―rational man‖ or ―man motivated by fear. intuitive and creative social creatures. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 199 .The Neo-Human Relations Movement …Contd. In a little-read chapter of their In Search of Excellence. Peters and Waterman describe the social science research on which they base their principles of management.

however small. We all like to think of ourselves as winners and need to celebrate our victories. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 200 .The Neo-Human Relations Movement …Contd. Peters and Waterman used conclusions like these to deduce dome general rules for treating workers with the dignity and respect they require to do quality work. Although we value self-control. we need and want the security and meaning of achieving goals through organisations.

―The top performers create a broad. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 201 . a coherent framework within which charged-up people search for appropriate adaptations. One of these ―rules‖ stresses the importance of values. they cite such strongly held managerial values as IBM‘s ―respect for the individual‖ and Frito-Lay‘s commitment to a ―99. According to Peters and Waterman.The Neo-Human Relations Movement …Contd. shared culture. uplifting.‖ As examples.5 percent‖ level of satisfactory service.

however. the best of the best in 1982 and dead again in 1986. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 202 . As Peters notes. No company can rest on its laurels. Such values help employees work toward common goals and to adapt to inevitable changes in internal and external conditions.The Neo-Human Relations Movement …Contd.‖ Companies must remain flexible if they are to survive in our increasingly competitive international economy. ―IBM was declared dead in 1979. for a firm that embodies excellence one year may flounder the next.

In their subsequent research. Peter Drucker. Peters and Waterman (working separately) have stressed two principles. short-cycle innovation and improvement‖ of all of a company‘s products. is ―a set of new basics: worldclass quality and service. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 203 . envisioned an ―entrepreneurial society‖ in which ―Tradition. The first. Indeed.The Neo-Human Relations Movement …Contd. enhanced responsiveness through greatly increased flexibility and continuous. writing as far back as 1965. as Peters says. convention and ‗corporate policy‘ will be a hindrance rather than a help.

not just ―interchangeable parts of the corporate machine. Employees‘ loyalty must be won through a new sort of social contract.‖ Only a company‘s people can make it succeed and then help it defend its turf. as Waterman puts it. they must respond to opportunities and challenges quickly.The Neo-Human Relations Movement …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 204 . is to recognise that people are ―the main engine‖ of any company. as they arise. Companies must pursue what Waterman calls ―informal opportunism‖. The second principle.

taking seriously labour’s concern for job security and giving workers a stake in improved productivity via profit-linked bonuses and stock plans. diffusing responsibility for innovation.The Neo-Human Relations Movement …Contd. For workers this…path means accepting flexible job classifications and work rules. automating in ways that cut routine tasks and enhance worker flexibility and creativity. agreeing to wage rates linked to profits and productivity improvements and generally taking greater responsibility for the soundness and efficiency of the enterprise. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 205 . As Peters says: For managers this path means continuously retraining employees for more complex tasks.

the new emphasis on human relations management is an important step in the evolution of management thought— one that must be acknowledged in any integrative approach to management theory.The Neo-Human Relations Movement …Contd. Peters and others are correct. If writers like Drucker. an American familiar with Japanese organisational practices. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 206 . One such effort has been made by William Ouchi. Ouchi first observed that many of the most successful American companies ―behaved‖ much like Japanese organisations.

In particular. he endorses greater emphasis on human relations management as a complement to the techniques of scientific management.The Neo-Human Relations Movement …Contd. Since much of the Japanese managerial style was actually borrowed from Western models based primarily on scientific management principles. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 207 . Ouchi has proposed a management model that integrates the successful practices of both Japanese and American cultures.

The Neo-Human Relations Movement …Contd.
The organisation, he proposes, must devote more energy to satisfying the needs of its human resources, both as individuals and as groups. He suggests such goals can be attained if an organisation focuses on changes in two crucial areas: Decision making should become a participatory activity for a greater number of employees and responsibility should be considered a collaborative function, preferably the product of group or team processes.
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The Neo-Human Relations Movement …Contd.
Whether the new-human relations approach will turn out to be a major contributor to management theory or just another conceptual fad is impossible to say at this point, but it is certainly having a tremendous impact on management thinking in both universities and organisations.
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McKinsey’s Framework
Characteristics / Contributions The seven S’s are 1. Structure, 2. Strategy, 3. Systems, 4. Style, 5. Staff, 6. Skills, 7. Superordinate Goals (Shared values)
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The Seven – S Model
Based on discussions with consultants, academics, and business leaders, the consulting firm of McKinsey & Co. has proposed the Seven-S model for organization effectiveness. McKinsey‘s consultants found that neglecting any one of seven key factors could make the effort to change to a slow, painful and even doomed process. Each of these factors is equally important and interacts with all the other factors. Any number of circumstances may dictate which of the factors will be the driving force in the execution of any particular strategy.
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The Seven – S Model
1. Structure – The model adds a contemporary perspective to the problem of organisational structure and points out that in today‘s complex and ever-changing environment, a successful organisation may make temporary structural changes to cope with specific strategic tasks without abandoning basic structural divisions throughout the organisation.
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and accounting systems. training. 2. including capital budgeting. 3. in practice. Systems can overpower expressed strategies. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 213 . the development of strategies poses less of a problem than their execution. Systems – This category consists of all the formal and informal procedures that allow the organisation to function. Strategy – The model emphasises that.The Seven – S Model …Contd.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 214 . Style – ―Style‖ refers not to personality. It communicates priorities more clearly than words alone and may profoundly influence performance. 4.The Seven – S Model …Contd. but to the pattern of substantive and symbolic actions undertaken by top managers.

new hirees are given jobs in the mainstream of the organisation. Staff – Successful organisations view people as valuable resources who should be carefully nurtured. Similarly. and rapidly moved into positions of real responsibility. and allocated. exposed to top management.The Seven – S Model …Contd. whether that be marketing or new-product innovation. guarded. 5. Top managers devote time and energy to planning the progress and participation of existing managers. developed. put into fast-track programmes. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 215 . and use job assignment policies to actively foster the development of new managers. Talented individuals are assigned mentors.

Skills – ―Skills‖ refer to those activities organisations do best and for which they are known. Strategic changes may require organisations to add one or more new skills. Strategic initiatives that require the dismantling or revising of an old skill pose difficult implementation problems. 6. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 216 .The Seven – S Model …Contd.

values and aspirations that unite an organisation in some common purpose. Superordinate Goals – This refers to guiding concepts. but it is very often the drive to accomplish superordinate goals that separates superior performers from the crowd. more superficial characteristics of the organisation change. They provide a sense of purpose and a certain stability as other. Superordinate goals have deep meaning within the organisation. Not every organisation has superordinate goals. Superordinate goals are often captured in a mission statement. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 217 . but they can also be phrased as a simple slogan. 7.The Seven – S Model …Contd.

Systems Illustration Style Structure Staff Strategy Skills Superordinate Goals / Shared Values 218 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED .McKinsey’s Framework …Contd.

the terms used are not precise and topics are not discussed in depth. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 219 . since 1955 and confirms its practicality.McKinsey’s Framework …Contd. Limitations Although this experienced consulting firm now uses a framework similar to the one found useful by Koontz et al.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 220 . unprecedented levels of performance. 3. The “Quality Trilogy” concept provides a universal way of thinking about quality. The elements of the Quality Trilogy are: 1. Quality Planning – The process of preparing to meet quality goals. Quality Control – The process of meeting quality goals during operations.Quality Quality is defined as fitness for use. Quality Improvement – The process of breaking through to superior. 2.

The philosophical basis for the desired quality culture change is outlined by the four absolutes of quality management: 1. Quality is defined as conformance to requirements. The measurement of quality is the price of non-conformance THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 221 . Quality can be caused by deliberate management action.Quality …Contd. The performance standard is zero defects 4. 2. The system for causing quality is prevention 3.

quality development and quality maintenance to meet full customer satisfaction at economical levels. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 222 .Total Quality Management (TQM) Total Quality Management (TQM) is concerned with the integration of all the efforts in the organization towards quality improvement.

 Workers are empowered and do what is right. Cooperative Style.  Family oriented relation where everyone gives his best. Traditional Approach (Behaviours) TQM Approach  Integrated. Traditional Approach  Conflict win lost style. where everyone gives only as he gets 223 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED .TQM Approach vs.  Each fights on who is right.  Economic relationship.

with pride towards a common goal – total quality.  It builds on the synergies of all. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 224 . not merely elected representatives as envisaged in some other forms of workers’ participation.  TQM must be management led. Relationships transcend beyond merely the economic give and take and all work purposefully.Total Quality Management (TQM) …Contd. company – wide in implementation dedicated to continuous improvement and the responsibility of every employee.  TQM is a win-win approach.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 225 . It develops a participative culture where each employee can directly participate in areas relating to his work and decisions concerning his work.Total Quality Management (TQM) …Contd. TQM aims to involve every person in every department of an organization working together to eliminate errors and prevent waste.

Ten Commandments of Continuous Improvement 1. Design quality into products and services 4. Put the customer first 2. Improve everything continually 5. Create and support a safe and open work environment THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 226 . Innovate constantly 3.

Do not shoot the messenger Stop imitating the Japanese Use time wisely Do not sacrifice long-term improvements for short-term profits 10. …Contd.Ten Commandments of Continuous Improvement 6. 7.Quality is not enough THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 227 . 9. 8.

Total Quality Management Approach Characteristics / Contributions Dependable satisfying products and services (Deming) Product or services that is fit for use (Juran) Conformance to quality requirements (Crosby)  General Concepts: Continuous improvement o Attention to detail o Teamwork o Quality education THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 228 .

Concern for quality and cost B C THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 229 . Illustration A Focus: Customer needs: Quality Products and Services.Total Quality Management Approach …Contd.

and take on leadership for change. 2. Create constancy of purpose toward improvement of product and service.Deming’s 14 Points for Management 1. Western management must awaken to the challenge. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 230 . We are in a new economic age. with the aim to become competitive and to stay in business. and to provide jobs. must learn their responsibilities. Adopt the new philosophy.

minimize total cost.Deming’s 14 Points for Management …Contd. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. on a long-term relationship of loyalty and trust. Cease dependence on inspection to achieve quality. 3. Instead. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 231 . Move toward a single supplier for any one item. End the practice of awarding business on the basis of price tag. 4.

Institute training on the job. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 232 . Improve constantly and forever the system of production and service. and thus constantly decrease costs.Deming’s 14 Points for Management …Contd. 6. Supervision of management is in need of overhaul as well as supervision of production workers. Institute leadership. 7. The aim of supervision should be to help people and machines and gadgets to do a better job. to improve quality and productivity. 5.

sales. Break down barriers between departments. 8. People in research. to foresee problems of production and in use that may be encountered with the product or service. and production must work as a team. so that everyone may work effectively for the company. design. 9. Drive out fear.Deming’s 14 Points for Management …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 233 .

Deming’s 14 Points for Management …Contd. Eliminate slogans. Substitute leadership. a. Eliminate work standards (quotas) on the factory floor. and targets for the workforce asking for zero defects and new levels of productivity. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 234 . Such exhortations only create adversarial relationships. 10. exhortations. as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce. 11.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 235 .Deming’s 14 Points for Management …Contd. b. 11. Remove barriers that rob the hourly worker of his right to pride of workmanship. Eliminate management by objective. 12. The responsibility of supervisors must be changed from sheer numbers to quality. Substitute leadership. numerical goals. a. Eliminate management by numbers.

14. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 236 . The transformation is everybody‘s job. 13. inter alia. abolishment of the annual merit rating and of management by objective. Put everybody in the company to work to accomplish the transformation. This means. b. 12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. Institute a vigorous program of education and self-improvement.Deming’s 14 Points for Management …Contd.

Limitations No complete agreement of what Total Quality Management is THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 237 .Total Quality Management Approach …Contd.

Reengineering Approach Characteristics / Contributions o Fundamental rethinking o Process analysis o Radical redesign o Dramatic results THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 238 .

Reengineering Approach …Contd. Illustration Operations Input Transformation Output THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 239 .

Reengineering Approach …Contd.  Limitations o Neglect of external environment o Possibly needs ignoring customers’ o Neglect of human needs o Ignores total management system as in the management process. or operations. approach THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 240 .

Joseph Mani Ms. Ghosh Mr.R. Chatterjee Late Dr.My grateful thanks to Professor N. Trisha Chaudhuri and many others from whom I have learnt immensely THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 241 . Hemaa Vaswani Ms. P.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 242 . K. Professor J. Dr. Goyal. Maheshwari. Professor R. Manish Gupta. Madan Mohan and all other faculty members and staff of Jagan Institute of Management Studies for providing the opportunity of interacting with you all. P. Deepak Gupta. Mr.My grateful thanks also to Mr.

most importantly. thanks to all of you for being such wonderful students ! THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 243 .And.

Annexure Slides THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 244 .

For many business firms. In a very real sense. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 245 .Purpose / Goals of Management Nonbusiness executives sometimes say that the aim of business managers is simple—to make a profit. But profit is really only a measure of a surplus of sales dollars (or any other currency) over expense dollars. the logical and publicly desirable aim of all managers should be a surplus. whether business or nonbusiness. an important goal is the long-term increase in the value of their common stock. in all kinds of organisations.

money. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 246 . managers must establish an environment in which people can accomplish group goals with the least amount of time.Purpose / Goals of Management …Contd. as well as in units of a business (such as an accounting department) that are not responsible for total business profits. In a nonbusiness enterprise such as a police department. managers still have goals and should strive to accomplish them with the minimum of resources or to accomplish as much as possible with the available resources. Thus. materials and personal dissatisfaction or in which they can achieve as much as possible of a desired goal with available resources.

According to Herbison and Myers. An Economic Resource 2.Scope of Management The scope of management is very wide. it refers to three distinct ideas. Basically. A Class or Elite THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 247 . A System of Authority and 3. management may be understood as: 1.

machinery and methods or ways of doing things) depends to a great extent on the quality of management. labour and capital. how effectively and economically the five M‘s are combined together to produce desired results. materials. manpower. useful. According to Newman. management is required to convert the disorganised resources of men.Scope of Management …Contd. on-going concern. In modern organisations. the effective use of the five M‘s of management (money. Management as an Economic Resource Management is one of the factors of production along with land. materials. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 248 . money and machines into a productive. In other words.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 249 .Scope of Management …Contd. people are bound by authority relationships. It is bound together by a web of relationships between superiors and subordinates. management is the rule-making and rule-enforcing body. Management as A System of Authority According to Herbison and Myers. that is. Managers working at top levels enjoy more authority than people working at lower levels.

instructions and decisions downward and carry the problems and suggestions upward.Scope of Management …Contd. They transmit orders. Top management determines objective and provides direction to enterprise activities. personnel manager etc. day-to-day matters. Management as A System of Authority …Contd. finance manager. Middle management (departmental heads like work manager.) interprets and explains the policies framed by the top management. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 250 . Lower management (first line supervisors) is concerned with routine.

the term management refers to the group of individuals occupying managerial positions. The managerial class has become very important in modern organisations owing to its contribution to business success. which refers to the group.Scope of Management …Contd. Management as A Class or Elite Sociologists view management as a distinct class in society having its own value system. As a separate group. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 251 . All the managers from the chief executive to the first line supervisors are collectively addressed as ‗Management‘.

There are arguments on both sides. Let‘s examine these in detail.Management: Science or Art? The question whether management is a science. art or profession is put to debate quite frequently. This knowledge is obtained through the process of observation. Properties of Science Science is a systematised body knowledge based on certain principles. capable of general application. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 252 . experimentation and testing.

Management: Science or Art? …Contd Science. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 253 . has four elements: 1. Systematic body of knowledge: Science is systematised in the sense that it is based on the cause and effect relationship between different variables. thus. Such a knowledge helps in explaining past events and predicts the outcome of specific actions.

Scientific inquiry and observation: Scientific inquiry is unaffected by the personal likes and dislikes of a scientist. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 254 . we do not express the opinion of just one person. When we say that the rotation of earth causes days and nights. 2.Management: Science or Art? …Contd. This can be scientifically proved at any time.

They can be applied in all situations and at all times. When results get confirmed after repeated experimentation.Management: Science or Art? …Contd. they become principles. 3. they are developed after a series of experiments. Universal truths: Scientific principles represent basic truths. The results of each experiment can be verified and outcomes predicted in a definite way. 4. Experimentation: The principles of science are derived after repeated observations and experiments. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 255 .

namely: 1. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 256 .Management as A Science Management is a science because it has all the characteristics of a science. Management offers principles that could be put to good use while solving problems. It has a number of principles which can be studied and put to application. Systematised body of knowledge: Management is a distinct discipline.

at best. Management. As we all know. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 257 .Management as A Science …Contd. As a result. They are still in a developing stage and evolutionary in nature. Management is a social science: Management is a social science. can be called as a soft science. defies experimentation. the principles of management cannot be accepted as absolute truths. as it deals with human behaviour about which little is known at present. Human behaviour is unpredictable and therefore. it is not possible to study human behaviour under controlled laboratory conditions. 2.

Management can never be an exact science because business is highly dynamic and business conditions change continually. It can offer only flexible guidelines that would be of use in solving problems.Management as A Science …Contd. chemistry or biology. 3. Management is an inexact science: Management is not an exact science like physics. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 258 . It does not offer absolute principles.

Manager vs. However. insufficient knowledge and resources. scientist: A scientist can afford to wait until all the information (about a thing) is available. a manager cannot afford to do like that. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 259 . He must take decisions based on inadequate information. He can indulge in a series of experiments till the truth emerges clearly. He must make decisions today in order to survive in future.Management as A Science …Contd. 4.

the traditional hit-ormiss methods have yielded place to several systematic methods based on principles. Scientific management: When Taylor used the term ‗scientific management‘. management is known as a ‗sophisticated behavioural science‘ these days. as an organised body of knowledge as opposed to ‗traditional rules and empirical dexterity‘.Management as A Science …Contd. No wonder. Over the years. He had used the term ‗scientific‘. 5. he was aware of the fact that experimentation and verification of facts is not possible in managing human resources. Thus. art and science are complementary and mutually supportive. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 260 .

It can be improved through constant practice only. A surgeon or a physician without the knowledge of medical science becomes a witch doctor. Art is basically concerned with application of knowledge. how to do things creatively and skillfully. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 261 . with the knowledge of science.Properties of Art Art is the application of knowledge and personal skills to achieve results. an artfull surgeon. Art is based on the knowledge of principles offered by science. It is a way of living.

Properties of Art …Contd. Terry has drawn the distinctions between science and art thus: Science  Advances by knowledge  Proves  Predicts  Defines  Measures  Impresses Art  Advances by      practice Feels Guesses Describes Opines Expresses 262 THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED .

etc. sculpture. painting. decision-making and motivating certainly help managers to tackle problems in a better way. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 263 .Management As An Art Management is basically an art as it involves the use of know how and skills like any other art such as music. The practical knowledge acquired in the areas of planning.

a manager uses the knowledge of management theory while performing the managerial functions. uses sound knowledge in place of hitor-miss methods. The arguments in favour of management as an art run thus: 1. thus. with a view to achieve results effectively. He. Use of knowledge: Just as a doctor uses the science of medicine while diagnosing and treating the patients.Management As An Art …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 264 .

It tries to produce sweet music by combining the chords in an effective manner. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 265 . It makes things happen by changing the behaviour of human beings. Creative art: Management is creative like any other art.Management As An Art …Contd. It combines human and non-human resources in a useful way so as to achieve results. 2.

There is no one way of doing things. managers learn the art of managing through a process of trial and error. Personalised: Like any other art. Every manager has his own way of managing things and people. based on his knowledge and experience. 3. As years roll by.Management As An Art …Contd. management is a personalised activity. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 266 .

so can managerial skills. Just as artistic skills can be developed through training. In other words. 4. they develop their skills through constant practice.Management As An Art …Contd. The application of managerial principles over a period of time enable them to tackle difficult problems with confidence. Constant practice: Managers learn from mistakes. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 267 .

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 268 . The theoretical knowledge in management must be put to good use in a skilful way. an art as well as a science. They need to sharpen this knowledge through constant practice. The art of management is an old as civilisation. The science of management is young and developing.Management: Science as Well as Art Management is thus. Both are complementary and mutually supportive. Managers need to acquire the knowledge of a management principles and practice in order to be successful. while achieving results.

Management: Science as Well as Art …Contd. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 269 . It is the quality of management that spells the difference between success and failure. As Drucker has pointed out. using intuition. Managers need to acquire knowledge systematically and put the same to good use. every organisation has the same resources to work with. A successful manager is one who is able to visualise problems before they turn into emergencies. judgement and experience.

The ability to meet the problems head-on does not come by chance.Management: Science as Well as Art …Contd. have to fruitfully combine their scientific knowledge with artistic skills in order to emerge as the ―winners‖ in a competitive environment. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 270 . It requires sound knowledge and constant practice. Managers. therefore.

ethics is defined as ―the discipline dealing with what is good and bad and with moral duty and obligation. or any other enterprise.‖ and accounting ethics pertains to ―the code that guides the professional conduct of accountants. personal ethics has been referred to as ―the rules by which an individual lives his or her personal life.‖ Thus. In Webster’s Ninth New Collegiate Dictionary.‖ THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 271 .Ethics in Managing All persons. a university. whether in business. are concerned with ethics. government.

public relations. social responsibilities. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 272 .Ethics in Managing …Contd. advertising. fair competition. Business ethics is concerned with truth and justice and has a variety of aspects such as the expectations of society. consumer autonomy and corporate behaviour in the home country as well as abroad.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 273 . do have a responsibility to create an organizational environment that fosters ethical decision making by institutionalizing ethics. especially top-level managers. Managers.Institutionalising Ethics Business ethics are increasingly addressed in seminars and at conferences. This means applying and integrating ethical concepts with daily actions.

2. By teaching ethics in management development programmes. By using a formally appointed ethics committee and 3. By establishing an appropriate company policy or a code of ethics. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 274 .Institutionalising Ethics …Contd. Theodore Purcell and James Weber suggest that this can be accomplished in three ways: 1.

THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 275 . much less common is the use of ethics board committees. International Business Machines and General Electric have instituted such programmes. although companies such as Allied Chemical.Institutionalising Ethics …Contd. Management development programs dealing with ethical issues are very seldom used. The most common way to institutionalize ethics is to establish a code of ethics.

employees should be encouraged to report unethical practices (commonly known as ‗whistleblowing‘). Managers should also take any opportunity to encourage ethical behavior and publicize it. Most important.Institutionalising Ethics …Contd. Some companies require employees to sign the code and include ethics criteria in the performance appraisal. The publication of a code of ethics is not enough. On the other hand. Moreover. certain firms connect compensation and rewards to ethical behavior. managers must set a good example through ethical behavior and practices. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 276 .

There is indeed a question as to what the social responsibility of business really is. the social involvement of business has increased. There are many stakeholders or claimants to the organisation. partly owing to the interdependencies of the many groups in our society. Today. As pointed out in the systems-approach-tomanagement model. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 277 .The Social Responsibility of Managers In the early 1900s the mission of business firms was exclusively economic.

we talk about the social responsibility and social responsiveness of all organizations. universities. nonprofit foundations. is asking managers. Society. originally associated with businesses. is now being posed with increasing frequency in regard to governments. although the focus of this discussion is on business. THIRD MILLENNIUM BUSINESS RESOURCE ASSOCIATES PRIVATE LIMITED 278 . awakened and vocal with respect to the urgency of social problems.The Social Responsibility of Managers …Contd. what they are doing to discharge their social responsibilities and why they are not doing more. the question of social responsibility. particularly those at the top. charitable organisations. etc. Moreover. Thus.