INTRODUCTION & EVOLUTION OF

MANAGEMENT
MANAGEMENT KEY CONCEPTS

Organizations

Management Goal
WHAT IS AN ORGANIZATION?

• An Organization Defined
• A deliberate arrangement of people to accomplish some
specific purpose (that individuals independently could not
accomplish alone).

• Common Characteristics of Organizations

• Have a distinct purpose (goal)
• Composed of people
• Have a deliberate structure
DEFINITION OF MANAGEMENT

• F. W. Taylor- “Management is an art of knowing what is to be done and seeing that it is done
in the best possible manner.”
• Henri Fayol- “Management is to forecast, to plan, to organise, to command, to co-ordinate
and control activities of others.”
• “Management is the art of getting things done through and with people informally organized
groups”. –– Harold Koontz
• “Management consists of getting things done through others. Manager is one who
accomplishes the objectives by directing the efforts of others”. –– George Terry
FUNCTIONS OF MANAGEMENT
PRINCIPLES OF MANAGEMENT – FAYOL’S 14
PRINCIPLES
PRINCIPLES OF MANAGEMENT – FAYOL’S
14 PRINCIPLES
• Division of Work: This is the principle of specialization, which is very well expressed by economists as
being a necessary factor for efficiency in the utilization of labor.
• Authority and Responsibility: In this principle, Fayol conceives authority as a combination of official
authority deriving from a manager’s official position and personal authority, which is compounded of
intelligence, experience, moral worth, past services, etc.
• Discipline: Holding the notion that discipline is ‘respect for agreements which are directed as achieving
obedience, application, energy and the outward marks of respect’, Fayol declares that discipline
requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
• Unit of Command: This is the principle, which states that an employee should receive orders from one
superior only.
PRINCIPLES OF MANAGEMENT – FAYOL’S
14 PRINCIPLES
• Unity of Direction: According to Fayol, the unity of direction principle implies that each group of
activities having some objectives must have one head and one plan. As distinguished from the principle
of unity of command, Fayol perceives unity of direction as related to the functioning of personnel.
• Subordination of Individual Interest to General Interest: In any group, the interest of the group should
supersede that of the individual. When the interests differ, it is the function of the management to
reconcile them.
• Remuneration of Personnel: Fayol perceives that remuneration and methods of payment should be fair
and also should be able to afford the maximum satisfaction to employee and employer.
• Centralization: Although Fayol does not use the term, Centralization of Authority, his principle definitely
refers to the extent to which authority is concentrated or dispersed in an enterprise. Individual
circumstances determine the degree of centralization that gives the best overall yields.
PRINCIPLES OF MANAGEMENT – FAYOL’S
14 PRINCIPLES

• Scalar Chain: Fayol thinks of the scalar chain as a line of authority, a chain of superiors from the highest
to the lowest ranks. And, because it is an error of a subordinate to depart needlessly from the lines of
authority, the chain should be short-circuited.
• Order: Breaking this principle into material order and social order, Fayol thinks of it as a simple edge for
everything. This organization is the principle, which refers to the arrangement of things and persons in
an organization.
• Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from personnel with a
combination of kindliness and justice in managers while dealing with subordinates.
PRINCIPLES OF MANAGEMENT – FAYOL’S
14 PRINCIPLES

• Stability of Tenure of Personnel: Finding that instability is both the cause and effect of bad
management, Fayol points out the dangers and costs of unnecessary turnover.
• Initiative: Initiative is conceived as the process of thinking out and executing a plan. Since it is one of
the keenest satisfactions for an intelligent man to experience, Fayol exhorts managers to sacrifice
personal vanity in order to permit subordinates to exercise it.
• Esprit de corps: This principle implies that union is strength and an extension of the principle of unity of
command. Fall here emphasizes the need for teamwork and the importance of communication in
obtaining it.
 F. W. TAYLOR - SCIENTIFIC MANAGEMENT

• Frederick Winslow Taylor (1856-1915), developer of scientific

management. Scientific management (also called Taylorism or the Taylor system) is a
theory of management that analyses and synthesizes workflows, with the objective of
improving labour productivity. 
• General approach
• Shift in decision making from employees to managers.
• Develop a standard method for performing each job.
• Select workers with appropriate abilities for each job. Train workers in the standard method
previously developed Support workers by planning their work and eliminating interruptions.
• Provide wage incentives to workers for increased output.
THE CONTRIBUTION OF F. W. TAYLOR TO
SCIENTIFIC MANAGEMENT

• Scientific approach to business management and process improvement

• Importance of compensation for performance
• Began the careful study of tasks and jobs
• Importance of selection criteria by management
HENRY FAYOL’S CONTRIBUTION TO
MANAGEMENT

• Henry Fayol (1841-1925) started his career as a junior engineer in a coal mine company in
France and became its general manager in 1880.
• His ideas on management have been summed up as the Administrative Management Theory,
which later evolved into the Management Process School
• 1. Division of Industrial Activities
• 2. Qualities of an Effective Manager
• 3. Functions of Management
• 4. Principles of Management
1. DIVISION OF INDUSTRIAL ACTIVITIES:

• Fayol observed the organizational functioning from manager’s point of view.

• He found that all activities of the industrial enterprise could be divided into six groups:
• (i) Technical (relating to production);
• (ii) Commercial (buying, selling and exchange);
• (iii) Financial (search for capital and its optimum use) 
• (iv) Security (protection of property and persons);
• (v) Accounting (Preparation of various statements, accounts, returns etc.) and
• (vi) Managerial (planning, organisation, command, co-ordination and control)
2.QUALITIES OF AN EFFECTIVE MANAGER

Henry Fayol was the first person to recognise the different qualities for manager.

• (i) Physical (health, vigour, and address);

• (ii) Mental (ability to understand and learn, judgement, mental vigour, and adaptability) ;
3. FUNCTIONS OF MANAGEMENT

• Fayol classified the elements of management into five and all such elements were considered
by him as the functions of management.
• Planning
• Organizing
• Commanding
• Co-ordinating
• Controlling
MAX WEBBER’S CONTRIBUTION TO
MANAGEMENT
Max Weber was a 19th-century German sociologist and one of the founders of modern sociology.
He wrote 'The Protestant Ethic and the Spirit of Capitalism' in 1905.

• Task specialization. 
• Hierarchical management structure.
• Formal selection rules
• Efficient and uniform requirements. 
• Impersonal environment. 
• Achievement-based advancement. 
TASK SPECIALIZATION. 

• Weber felt that task specialization promotes the timely completion of work at the highest
level of skill. Tasks, therefore, in Weber's ideal organization are divided into categories based
on team members' competencies and areas of expertise. Employees and departments have
clearly defined roles and expectations in which they are responsible solely for the labor they
do best. This is designed to maximize efficiency for the organization. Overstepping one's
responsibilities, such as presenting new ideas outside of your department's scope, is
generally frowned upon. 
HIERARCHICAL MANAGEMENT
STRUCTURE. 

• Weber advocated that management should be organized into layers, with each layer being
responsible for its team's performance. Weber believed that each layer of management should
provide supervision to the layers below them while being subject to the control of those above
them. Thus, individuals at the top of the management hierarchy have the most authority, while
those at the bottom have the least power. This hierarchical structure clearly delineates lines of
communication, delegation and the division of responsibilities. 
FORMAL SELECTION RULES.

• In the ideal organization, Weber believed that employees should be chosen based on their
technical skills and competencies, which are acquired through education, experience or
training – no other factors should be considered. And since workers are paid for their services,
and services are divided by job position, an employee's salary is entirely dependent on their
position. Contract terms are also entirely determined by the organization's rules and
regulations, and employees have no ownership interest in a company. 
EFFICIENT AND UNIFORM
REQUIREMENTS. 

• Employees should always know exactly what is expected of them. In the ideal organization,
the rules are clearly defined and strictly enforced. This promotes uniformity within the
organization and keeps the company running as smoothly and efficiently as possible. If new
rules and requirements need to be introduced, higher-level management or directors are
responsible for implementing and enforcing them. 
IMPERSONAL ENVIRONMENT

• Under Weber's theory, relationships between employees are to be only professional only. The
impersonal environment characterized by bureaucracies is designed to promote decision-
making that is based solely on facts and rational thinking. It prevents favouritism or nepotism
as well as involvement from outsiders or political influence, anything that could interfere with
the mission of the organization. 
ACHIEVEMENT-BASED ADVANCEMENT.

• Weber felt that promotions within an organization should be based solely on achievement,
experience and technical qualifications. Personal favors, relationships or personality traits
should not factor into personnel decisions.
MINTZBERG’S MANAGEMENT ROLES

Henry Mintzberg  (born September 2,

1939) is a Canadian academic and author
on business and management
INTERPERSONAL CATEGORY

• The managerial roles in this category involve providing information and ideas.

• Figurehead – As a manager, you have social, ceremonial and legal responsibilities. You're
expected to be a source of inspiration. People look up to you as a person with authority, and as
a figurehead.
• Leader – This is where you provide leadership for your team, your department or perhaps
your entire organization; and it's where you manage the performance and responsibilities of
everyone in the group.
• Liaison – Managers must communicate with internal and external contacts. You need to be
able to network effectively on behalf of your organization.
INFORMATIONAL CATEGORY

The managerial roles in this category involve processing information.

• Monitor – In this role, you regularly seek out information related to your organization and
industry, looking for relevant changes in the environment. You also monitor your team, in terms
of both their productivity, and their well-being.
• Disseminator – This is where you communicate potentially useful information to your
colleagues and your team.
• Spokesperson – Managers represent and speak for their organization. In this role, you're
responsible for transmitting information about your organization and its goals to the people
outside it
DECISIONAL CATEGORY

The managerial roles in this category involve using information.

• Entrepreneur – As a manager, you create and control change within the organization. This
means solving problems, generating new ideas, and implementing them.
• Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the
manager who must take charge. You also need to help mediate disputes within it.
• Resource Allocator – You'll also need to determine where organizational resources are best
applied. This involves allocating funding, as well as assigning staff and other organizational
resources.
• Negotiator – You may be needed to take part in, and direct, important negotiations within your
team, department, or organization.
PETER DRUCKER

• Drucker believed that managers should, above all else, be leaders. Rather than setting strict
hours and discouraging innovation, he opted for a more flexible, collaborative approach. He
placed high importance on decentralization, knowledge work, management by objectives
(MBO) and a process called SMART.
DECENTRALIZATION

• He wanted all employees to feel valued and empowered, as if their contributions and voices
mattered. He believed in assigning tasks that inspire workers, rewarding front-line workers
with responsibility and accountability, and uniting supervisors and their subordinates to
achieve shared organizational goals.
KNOWLEDGE WORK

• Knowledge workers are white-collar employees whose jobs require handling or using information, such
as engineers and analysts. Drucker – who foresaw the knowledge-based economy years before the rise of
computing and the internet – placed high value on workers who solved problems and thought creatively,
according to Rosenstein. He wanted to foster a culture of employees who could provide not just labor,
but also insight and ideas.
WORKFORCE DEVELOPMENT

• Drucker felt strongly that managers should improve and develop both themselves and their
team members, according to Rosenstein, who said that ongoing training and education are
hallmarks of Drucker's philosophy. He believed external development – via participation in
industry trade groups and conferences, for example – to be especially valuable.
CORPORATE SOCIAL RESPONSIBILITY:

• he argued that businesses should see themselves as part of a community and make decisions in
that regard – with as much respect for their external as for their internal impact. Drucker even
viewed profits through a social lens: A company has a responsibility to be profitable, he
argued, so that it can create jobs and wealth for society at large.
ORGANIZATIONAL CULTURE

• Be they positive or negative, helpful or harmful, companies have always had cultures. But
Drucker was among the first to suggest that managers could – and should – shape them. "The
spirit of an organization is created from the top," he said in his book 
Management: Tasks, Responsibilities, Practices. "If an organization is great in spirit, it is
because the spirit of its top people is great. If it decays, it does so because the top rots … No
one should ever be appointed to a senior position unless top management is willing to have his
or her character serve as a model for subordinates."
CUSTOMER EXPERIENCE:

• Drucker insisted that businesses have only one real purpose: to create customers. By viewing
business operations and opportunities through that lens – the customer, not the business,
decides what's important – he established a predicate for customer-focused companies like
Apple, Zappos and countless others.
WHAT IS MANAGEMENT BY OBJECTIVES?
(MBO)
• Employees at all levels work together to advance the business toward an agreed-upon destination.
Each worker has an equal say, sharing their own opinions on what the destination should be. From
there, teams establish goals and delegate specific tasks according to skill sets and interests.
• The process comprises five basic steps:
1.Managers and team members review and set organizational goals together.
2.Team members creates organizational goals into individual objectives.
3.Managers and team members monitor progress toward individual and shared goals.
4.Managers and team members evaluate performance based on measurable milestones.
5.Team members receive feedback and rewards relative to progress.
MICHAEL PORTER’S CONTRIBUTION TO
MANAGEMENT
Porter's five forces are
• 1. Competitive Rivalry. This looks at the number and strength of your competitors. How many rivals do you have? Who are they,
and how does the quality of their products and services compare with yours?
• 2. Supplier Power. This is determined by how easy it is for your suppliers to increase their prices. How many potential suppliers
do you have? How unique is the product or service that they provide, and how expensive would it be to switch from one supplier to
another?
• 3. Buyer Power. Here, you ask yourself how easy it is for buyers to drive your prices down. How many buyers are there, and how
big are their orders? How much would it cost them to switch from your products and services to those of a rival? Are your buyers
strong enough to dictate terms to you?
• 4.Threat of Substitution. This refers to the likelihood of your customers finding a different way of doing what you do. For
example, if you supply a unique software product that automates an important process, people may substitute it by doing the
process manually or by outsourcing it. A substitution that is easy and cheap to make can weaken your position and threaten your
profitability.
• 5.Threat of New Entry. Your position can be affected by people's ability to enter your market. So, think about how easily this
could be done. How easy is it to get a foothold in your industry or market? How much would it cost, and how tightly is your sector
regulated?
Thank you
Prof. Manjushri Yadav