PAN African eNetwork Project

Masters of Finance and Control

Organization Theory and Management
Semester - I

Ms. SHRADDHA SHARMA

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Faculty Profile
B.Tech (Electrical)
MBA (Finance)
Worked in Hindustan Latex Ltd., a

Government of India enterprise.

Joined AMITY UNIVERSITY as a Lecturer in
Amity College of Commerce & Finance.

Contact Information: ssharma20@amity.edu

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Objectives of the class

Overview of Management
Contents

Classical approach
Neo Classical Approach
Systems Approach to Management
Contingency Approach
Management and Managerial Roles
Practice and Study of Management
Challenges of Management in the 21st century

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OVERVIEW OF
MANAGEMENT

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MANAGEMENT
Management is the art of getting things
done through others.
-Marry Parker Follett
Management is the art of getting things
done through and with people in formally
organized groups.
- Harold Koontz
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MANAGEMENT
Management as an Economic resources
Management as a Team
Management as an Academic Discipline
Management as a Process
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Objectives of Management
Organizational Objectives
Social Objectives
Individual Objectives

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SCHOOLS OF
MANAGEMENT
Management has been practiced in some
form or the other since the dawn of
civilization. A scientific and systematic
study and application of management
began mainly after the Industrial
Revolution. Since then the development of
management thought has been quite rapid.

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Developement Stages
Classical approach
Neo-classical approach
Systems approach
Contingency approach
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CLASSICAL APPROACH
The classical approach to management
is also known as Functional Approach,
Empirical Approach or Management
Process Approach.
It is said to be the oldest school of
thought about management and
organisation structure.
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Features

As a systematic network.
As an integrated process.
Motivation through economic gains.
Formal organisation structure.
Experience based practices.
Universal approach: applied in different
situation
Formal education & training
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Features: in detail

Management is viewed as a systematic network

(process) of interrelated functions. The nature and
content of these functions, the mechanics by which
each function is performed and the interrelationship
between these functions is the core of the classical
approach.
On the basis of experiences of experiences of
practicing managers, principles are developed. These
principles are used as guidelines for the practicing
executive and basis of management training.
Functions, principles and skills of management are
considered universal. They can be applied in different
situations.

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Features: in detail

Formal training and education is emphasized

for developing managerial skills in would be
managers. Case study method is often used for
this purpose.
Emphasis is placed on economic efficiency and
the formal organisation structure.
People are motivated by economic gains.
Therefore, organisations control economic
incentives.

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Application

Learning from past experience

Main focus on managers duties.
Universally applicable.
Scientific approach for management practice.
It also provides a starting point for
researchers to verify the validity and to
improve the management applicability of
management knowledge.

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Limitation
A Mechanistic framework for human activity.
The environmental dynamics and their effect on
management have been discounted.
Too much relying on past experience.
Ambiguous and contradictory

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Pillars of Classical Approach

Bureaucracy
Scientific Management
Administrative Theory

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Bureaucracy
Formulated By: Max Weber, a German
social scientist.
The oldest form of organisation
An ideal type of bureaucracys a
conceptual model for analytical purposes
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Features

Division of Work
Rules and Regulations.
Hierarchy of Authority
Technical competence
Record Keeping
Impersonal relations.

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Advantages of Bureaucracy

Specialization
Structure
Rationality
Predictability
Democracy

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Limitations of Bureaucracy

Rigidity
Goal Displacement
Impersonality
Compartmentalization of Activity
Paper Work
Empire Building
Red Tape

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Scientific Management
Frederick Winslow Taylor (1856-1915) is
regarded as the father of scientific
management
management is a science resting on well
recognized and clearly defined principles
Focus on increasing productivity
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Prin. of Scientific Management

Develop a true science for each element of a
workers job to replace rule of thumb method.
Job specialization or division of labour should be
part of each job.
Scientific Selection, training and development of
workers.
Close co-operation between management and
workers
Maximum output in place of restricted output
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Taylors principles:Summary

Science, not rule of thumb

Harmony, not discord
Maximum output, in place of restricted output.
Development of each man to his greatest
efficiency
Maximum prosperity of employer, coupled with
maximum prosperity of each employee.
Co-operation not individualism
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Techniques of Scientific
Management

Time Study
Motion Study
Scientific Task Planning
Standardization and Simplification
Differential Piece rate system
Functional Foremanship
High Speed Steel

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Time Study
Standard time taken for performing a specified
job.
Every job or every part of it is studied in detail.
Study of an average worker having reasonable
skill and ability.
Standard Time Working Hours = Fair Days
Work

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Motion Study
Movement of body and limbs required to perform
a job are closely observed.
The study of movement of an operator on
machine involved in a particular task.
Purpose is to eliminate useless motions and
determine the best way of doing the job.
Increases the efficiency and productivity of
workers by cutting down all wasteful motions.
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Functional Foremanship
For achieving ultimate specification.
Developed to improve the quality of work
as single supervisor may not be an expert
in all the aspects of the work.
The scheme of functional foremanship is
an extension of principle pf specialization
at the supervisory level.
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Standardization
Physical attitude of products should be
such that it meets the requirements &
needs of customers.
The study of movement of an operator on
machine involved in a particular task.
The line of product is restricted to predetermined

type, form, design, size, weight, quality. Etc

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Critical evaluation
Workers Viewpoint

Unemployment
Exploitation
Monotony
Weakening of Trade Union
Over speeding

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Critical evaluation
Employer's Viewpoint:
Expensive
Time Consuming

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Administrative Theory
Theory By Henry Fayol, a French
industrialist.

Identify the functions of Manager with

emphasis on coordination of resources

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Managerial Functions

PLANNING
ORGANISING
COMMANDING
COORDINATING
CONTROLLING

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Management Principles

Division of Work.
Authority
Discipline
Unity of Command
Unity of Direction
Subordination of individual interest
Remuneration

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Management Principles
Centralization (or Decentralization)
Scalar chain (Line of Authority).
Order.
Equity.
Stability of Tenure of Personnel
Initiative.
Esprit de Corps. Management must foster the
morale of its Division of Work.

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2.5

Characteristics of Traditional
Management
Bureaucratic
Scientific
Administrative
Management

Management

Characteristics

Characteristics

Rules
Impersonality
Division of Labor
Hierarchy
Authority Structure
Lifelong Career
Commitment
Rationality

Focus

Whole Organization

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Training in routines and

rules
One Best Way
Financial Motivation

Management
Characteristics

Defining of management
functions
Division of Labor
Hierarchy
Authority
Equity

Focus

Focus

Employee

Manager

2.6

Characteristics of Traditional Management

(contd.)
Bureaucratic
Management

Scientific
Management

Administrative
Management

Benefits
Consistency
Efficiency

Benefits
Productivity
Efficiency

Benefits
Clear structure
Professionalization of
managerial roles

Drawbacks
Rigidity
Slowness

Drawbacks

Drawbacks
Internal focus
Overemphasizes rational
behavior of managers

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Overlooks social needs

NEO-CLASSICAL APPROACH
Need to secure willing cooperation of
workers led to the development of neoclassical approach.
Neo-classical approach may be analysed in
three parts namely, Hawthorne Experiments,
Human Relations Movement and Behavioral
Approach.
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Hawthorne Experiments
"Employees are more productive because the
employees know they are being studied.
Experiments:
Variables Affecting Productivity
Relay Assembly
Feedback mechanism
Work Conditions and Productivity Results

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Human Relations Movement

According to Keith Davis, human relations is an
area of management precise which is concerned
with the integration of people into a work situation
in a way that motivates them to work together
productively, cooperatively and with satisfaction
and achieve organizational goals.
The Individual
The Work Group
The leader
The Work Environment

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BEHAVIORAL APPROACH
An organisation is a sociotechnical system
Individuals differ in terms of their attitudes,
perceptions and value systems. Therefore they react
differently to the same situation.
Difference in individual and organisational needs and
goals.
A wide range of factors influence relations among
people.
Difference in behavior as individuals & as members of
a group.
Culture of Informal Groups.

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Systems Approach
A system can be defined as essentially a set or
assemblage of things interconnected or interdependent,
so as to form a complex unity.
Two major types of systems: closed and open.
Closed system has definite boundaries; it operates
relatively independently and is not affected by the
environment outside the system.
An open system as the name implies, is characterised by
its interaction with the external environment.
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Systems Approach
Talcot Parsons has suggested three meaningful levels in
the hierarchy of complex organisations: Technical,
Organisational and Institutional
The Technical Level is concerned with the actual
production and distribution of products and services
The Organisational Level coordinates and integrates
work performance at the technical level
The Institutional Level is concerned with relating
activities of the organization to environmental system
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Features of Systems Approach

Open System view of Organization

Adaptive System
The Whole Organization
Multi level Analysis
Multi Variate Analysis
Probabilistic
Integrative Approach

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Limitations of Systems Approach

Lack of Unification
Abstract Analysis
Limited Application

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CONTINGENCY APPROACH
Also called the situational approach
Assumes that there is no universal answer
because organizations, people, and situations
vary and change over time. Thus, the right thing
to do depends on a complex variety of critical
environmental and internal contingencies.

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Contingency Model
Analyse and understand the situation
Study and examine the validity of various concepts,
principles and techniques to the situation
Make the right choice by matching the techniques
to the situation
Implement the choice

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MANAGEMENT AND
MANAGERIAL ROLES
DEFINITIONS OF MANAGEMENT:
Production or Efficiency-oriented Definitions
Taylor has defined management as follows:
Management is the art of knowing what you want to do and then
seeing that it is done in the best and cheapest way
John Mee has defined management as follows:
Management is the art of securing maximum results with
minimum effort so as to secure maximum prosperity and
happiness for both employer and employee and give the public
the best possible service.
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MANAGEMENT AND
MANAGERIAL ROLES
DEFINITIONS OF MANAGEMENT
Decision oriented Definitions:
Stanley Vance has defined management as follows:
Management is simply the process of decision making and
control over the action of human beings for the expressed
purpose of attaining pre-determined goals
John Mee has defined management as follows:
Management is the art of securing maximum results with
minimum effort so as to secure maximum prosperity and
happiness for both employer and employee and give the public
the best possible service.
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MANAGEMENT AND
MANAGERIAL ROLES
People-oriented Definitions:
Lawrence Appley has called management as
personnel management and has defined it as follows:
Management is the accomplishment of results through
the efforts of other people.
Koontz has defined management in similar way when
he says that:
Management is the art of getting things done through
and with people in formally organized groups
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MANAGEMENT AND MANAGERIAL

ROLES
Function-oriented Definitions:
Management is defined for conceptual,
theoretical, and analytical purposes as that
process by which managers create, direct,
maintain and operate purposive organizations
through systematic, coordinated, cooperative
human efforts.
- McFarland
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CHARACTERISTICS OF
MANAGEMENT

Management is a Universal Process

Management is Purposeful
Management is Creative
Management is Unifying Force
Management is a Group Phenomenon
Management is a Social Process
Management is Multidisciplinary

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CHARACTERISTICS OF
MANAGEMENT

Management is Continuous Process

Management is intangible
Management is situational
Management is an art as well as a science
Management is essentially an executive
function

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MANAGERIAL ROLES
Suggested by Henry Mintzberg
Roles into three work Areas :
Interpersonal relationships
Information processing
Disseminating and decision making
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MANAGERIAL ROLES
(A) Interpersonal Relationships
1. Managers role as a figurehead
2. Managers leadership role
3. Managers role as a liaison officer
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MANAGERIAL ROLES
(B) Information Processing
1. Managers role as a monitor
2. Managers role as a disseminator of information
3. Managers role as a spokesman

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MANAGERIAL ROLES
(C) Decision Making
1. Managers role as an entrepreneur
2. Managers role as a conflict handler
3. Managers role as resource allocator
4. Managers role as negotiator
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PRACTICE AND STUDY OF

MANAGEMENT

Management is needed in all types and sizes of

organisations, at all organizational levels and in
all organizational work areas, and in all
organizations, no matter what country they are
located in. This is known as the universality of
management.
Organizations that are well managed develop a
loyal customer base, grow and prosper
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PRACTICE AND STUDY OF

MANAGEMENT
The Reality of Work
Another reason for studying management is
the reality that for most of us, once we
graduate from college and begin our
career, we will either manage or be
managed

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PRACTICE AND STUDY OF

MANAGEMENT
Rewards and Challenges of Being a Manager
Rewards
Create a work environment in which organizational
members can work to the best of their ability
Have opportunities to think creatively and use
imagination.
Have opportunities to think creatively and use
imagination.
Help others find meaning and fulfillment In work.
Support, coach, and nurture others.
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PRACTICE AND STUDY OF

MANAGEMENT

Rewards and Challenges of Being a Manager

Rewards
Work with a variety of people.
Receive recognition and status in organisation and
community.

Play a role in influencing

organizational outcomes
Receive appropriate compensation in form of salaries,
bonuses and stock options.
Good managers are needed by organisations.
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PRACTICE AND STUDY OF

MANAGEMENT
Rewards and Challenges of Being a Manager
Challenges
Do hard work
Have to deal with a variety of personalities.
Often have to make do with limited resources.
Motivate workers in chaotic and uncertain
situations.
Successfully blend knowledge, skills, ambitions
and experiences of a diverse work group.
Success depends on others work performance.
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Challenges of Management in the

21st century
At the start of the 21st century, the following rate to
be the most important ideas regarding
management:
Management is for everyone.
Management is for learners.
Management is based on communicating.
Management is about change.
Management is broad based.
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Summary
Management principles were planted 200 years ago
People side of organization came into its own in 1930.
1950 the managers attentions were caught by the idea to
bring out the full potential of employees for productivity.
Greater insight on employees behavior was highlighted in
1960-1970.
Presently the management concepts are dependent upon
situational factors.
Research is emphasizing on refinement of existing theories.

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Summary. (Cntd)
Managers carry out the functions of Planning,
Organizing, staffing, leading & Controlling
Management is essential to any kind of
organization: where ever group of people work
together
Management is essential at all hierarchical levels
The goal of all managers is to generate surplus,
improve productivity, efficiency and effectiveness.

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Thank You
Please forward your query
To: ssharma20@amity.edu
CC:
manoj.amity@panafnet.com
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