1 introduction to management.docx

7/29/2019 1 Introduction to Management.docx

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Sri Rama

Definition of Management: Its Nature and Purpose

In the words of Henry Fayol - "To manage is to forecast and to plan, to organise, to

command, to co-ordinate and to control".

According to Peter F Drucker - "Management is a multi-purpose organ that manages a

business and manages managers and manages worker and work".

In the words of Koontz and O'Donnel - "Management is defined as the creation and

maintenance of an internal environment in an enterprise where individuals working together

in groups can perform efficiently and effectively towards the attainment of group goals".

The following are the salient characteristics of management (Nature):

Management aims at reaping rich results in economic terms: Manager's primarytask is to secure the productive performance through planning, direction and control

Management also implies skill and experience in getting things done throughpeople: Management involves doing the job through people.

Management is a process: Management is a process, function or activity. Thisprocess continues till the objectives set by administration are actually achieved.

"Management is a social process involving co-ordination of human and materialresources through the functions of planning, organising, staffing, leading and

controlling in order to accomplish stated objectives".

Management is a Science as well as an Art: Management is a group activity: Management comes into existence only when

there is an group activity towards a common objective.

Management is dynamic and not static: The principles of management aredynamic and not static. It has to adopt itself according to social changes.

Management need not be owners: It is not necessary that managers are ownersof the enterprise. In joint stock companies, management and owners (capital) are

different entities. Different Levels of Management: Management is needed at different levels of

an organisation namely top level, middle level and lower level.

Management is intangible: It cannot be seen with the eyes. It is evidenced only bythe quality of the organisation and the results i.e., profits, increased productivity etc.


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Managing: Science or Art

It is said that "management

is the oldest of arts and the youngest of sciences". This explains the changing nature of

management but does not exactly answer what management is? To have an exact answer

to the question it is necessary to know the meanings of the terms "Science" and "Art".

What is "Science"?

Science may be described- "as a systematic body of knowledge pertaining to an area of

study and contains some general truths explaining past events or phenomena".

The above definition contains three important characteristics of science. They are

1. It is a systematized body of knowledge and uses scientific methods for observation

2. Its principles are evolved on the basis of continued observation and experiment and

3. Its principles are exact and have universal applicability without any limitation.

Judging from the above characteristics of science, it may be observed that-

1. Management is a systematized body of knowledge and its principles have evolved

on the basis of observation.

2. The kind of experimentation (as in natural sciences) cannot be accompanied in the

area of management since management deals with the human element.

3. In management, it is not possible to define, analyse and measure phenomena by

repeating the same conditions over and over again to obtain a proof.

The above observation puts a limitation on management as a science. Management like

other social sciences can be called as "inexact science".

What is "Art"?

'Art' refers to "the way of doing specific things; it indicates how an objective is to be

achieved." Management like any other operational activity has to be an art.

The above definition contains three important characteristics of art. They are-

1. Art is the application of science. It is putting principle into practice.

2. After knowing a particular art, practice is needed to reach the level of perfection.


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3. It is undertaken for accomplishing an end through deliberate efforts.

Judging from the above characteristics of art, it may be observed that-

1. Management while performing the activities of getting things done by others is

required to apply the knowledge of certain underlying principles which are necessary

for every art.

2. Management gets perfection in the art of managing only through continuous practice.

3. Management implies capacity to apply accurately the knowledge to solve the

problems, to face the situation and to realise the objectives fully and timely.

The above observation makes management an art and that to a fine art.

Management is thus a science as well as an art. It can be said that-"the art of management

is as old as human history, but the science of management is an event of the recent past."

Managing as practice is an art; the organized knowledge underlying the practice may be referred

to as a science


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The Evolution of Management Thought

The origin of management can be traced back to the days when man started living in groups.History reveals that strong men organized the masses into groups according to their

intelligence, physical and mental capabilities.

Evidence of the use of the well recognized principles of management is to be found in theorganization of public life in ancient Greece, the organization of the Roman Catholic Church

and the organization of military forces. Thus management in some form or the other has

been practiced in the various parts of the world since the dawn of civilization.

With the on set of Industrial Revolution, however, the position underwent a radical change.The structure of industry became extremely complex. At this stage, the development of a

formal theory of management became absolutely necessary. It was against this backgroundthat the pioneers of modern management thought laid the foundations of modern

management theory and practice.

Evolution of management thought may be divided into four stages

1. Pre-scientific management period.

2. Classical Theory

(a) Scientific Management of Taylor

(b) Administrative Management of Fayol

(c) Bureaucratic Model of Max Weber

3. Neo-classical Theory or Behaviour ApproachHawthorne Experiments

4. Modern Theory includes Systems Approach and Contingency Theory

Pre-scientific Management Period

The advent of industrial revolution in the middle of the 18th century had its impact on

management. Industrial revolution brought about a complete change in the methods of

production, tools and equipments, organization of labour and methods of raising capital.

Employees went to their work instead of receiving it, and so, the factory system, as it is

known today, become a dominant feature of the economy.

During the period

following the industrial revolution, certain pioneers tried to challenge the traditional character


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of management by introducing new ideas and character of management by introducing

new ideas and approaches. The notable contributors of this period are:

(A) Professor Charles Babbage (UK 1729 -1871): He was a Professor of

Mathematics at Cambridge University. Prof Babbage found that manufacturers

made little use of science and mathematics, and that they (manufacturers) relied

upon opinions instead of investigations and accurate knowledge. He felt that the

methods of science and mathematics could be applied to the solution of methods in

the place of guess work for the solution of business problems.

(B) James Watt Junior (UK 1796 - 1848) and Mathew Robinson Boulton

(1770 - 1842): James Watt Junior and Mathew Robinson Boulton contributed to

the development of management thought by following certain management

techniques in their engineering factory at Soho in Birmingham.

(C) Robert Owens (UK 1771 - 1858): Robert Owens, the promoter of co-operative

and trade union movement in England, emphasized the recognition of human element

in industry.

(D) Henry Robinson Towne (USA 1844 -1924): H.R Towne was the president of

the famous lock manufacturing company "Yale and Town". He urged the combination

of engineers and economists as industrial managers. He favoured organized exchange of

experience among managers and pleaded for an organized effort to pool the great fund of

accumulated knowledge in the art of workshop management.

(E) Seebohm Rowntree (UK 1871- 1954): Rowntree created a public opinion on the

need of labour welfare scheme and improvement in industrial relations. Oxford Lecture

Conferences in the U.K owed their origin and progress to the interest and zeal of

Rowntree.


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Classical Theory

The real beginning of the science of management did not occur until the last decade of the 19th

century. During this period, stalwarts like F.W. Taylor, H.L. Gantt, Emerson, Frank and

Lillian Gilberth etc., laid the foundation of management, which in due course, came to be

known as scientific management.

F.W. Taylor and Henry Fayol are generally regarded as the founders of scientific

management and administrative management and both provided the bases for science

and art of management.

Features of Management in the Classical Period:

1. It was closely associated with the industrial revolution and the rise of large-scale

enterprise.

2. Classical organization and management theory is based on contributions from a

number of sources. They are scientific management, Administrative management

theory, bureaucratic model, and micro-economics and public administration.

3. Management thought focussed on job content division of labour, standardization,

simplification and specialization and scientific approach towards organization.

Neoclassical Theory

Neo-classical Theory is built on the base of classical theory.

The neoclassical theory pointed out the role of psychology and sociology in the understanding of

individual and group behaviour in an organization.

George Elton Mayo (Australia, 1880 - 1949): Elton Mayo was born in Australia. He was educated in

Logic and Philosophy at St. Peter's College, Adelaide. He led a team of researchers from Harvard

University, which carried out investigation in human problems.

At the Hawthorne Plant of Western Electrical Company at Chicago. They conducted some

experiments (known as Hawthorne Experiments) and investigated informal groupings, informal

relationships, patterns of communication, patterns of informal leadership etc. Elton Mayo is

generally recognized as the father of Human Relations School. Other prominent contributors to this

school include Roethlisberger, Dickson, Dewey, Lewin etc.

Hawthorne Experiments In 1927 to study Behavioural Theory.


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Elements of Behavioural Theory: There are three elements of behavioural theory.

1. The Individual: The neoclassical theory emphasized that individual differences

must be recognised. An individual has feelings, emotions, perception and attitude.

Each person is unique. He brings to the job situation certain attitudes, beliefs and

ways of life, as well as skills. Therefore human relationists advocate the

adoption of multidimensional model of motivation which is based upon economic,

individual and social factors.

2. Work Groups: Workers are not isolated; they are social beings and should be

treated as such by management. The existence of informal organization is natural.

3 . Participative Management: The emergence of participative management is inevitable

when emphasis is laid on individual and work groups

Human relationists made very significant contribution to management thought by bringing

into limelight human and social factors in organizations. But their concepts were carried

beyond an appropriate limit.

Limitations of Human Relations Approach:-

1. The human relationists drew conclusions from Hawthorne studies. These conclusions

are based on clinical insight rather than on scientific evidence.

2. The study tends to overemphasize the psychological aspects at the cost of the

structural and technical aspects.

3. It is assumed that all organizational problems are amenable to solutions through

human relations. This assumption does not hold good in practice.

Modern Theory (System Approach)

The systems approach to management indicates the fourth major theory of management

thought called modern theory. Modern theory considers an organization as an adaptive

system which has to adjust to changes in its environment. An organization is now defined

as a structured process in which individuals interact for attaining objectives.


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Meaning of "System": The word system is derived from the Greek word meaning to

bring together or to combine. A system is a set of interconnected and inter-related elements

or component parts to achieve certain goals. A system has three significant parts:

1. Every system is goal-oriented and it must have a purpose or objective to be attained.

2. In designing the system we must establish the necessary arrangement of

components.

3. Inputs of information, material and energy are allocated for processing as per plan

so that the outputs can achieve the objective of the system.

Systems Approach Applied to an Organization: When systems approach is applied to

organization, we have the following features of an organization as an open adaptive

system:-

1. It is a sub-system of its broader environment.

2. It is a goal-oriented people with a purpose.

3. It is a technical subsystem using knowledge, techniques, equipment and facilities.

4. It is a structural subsystem people working together on interrelated activities.

5. It is a psychosocial system people in social relationships.

6. It is co-ordinate by a managerial sub system, creating, planning, organizing, motivating,

communicating and controlling the overall efforts directed towards set goals.

Characteristics of Modern Management Thought:

1. The Systems Approach:2. Dynamic: We have a dynamic process of interaction occurring within the structure

of an organization. The equilibrium of an organization and its structure is itself

dynamic or changing.

3. Multilevel and Multidimensional: Systems approach points out complex multileveland multidimensional character. We have both a micro and macro approach. A


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company is micro within a business system. It is macro with respect to its own

internal units. Within a company as a system we have:-

(1) Production subsystem

(2) Finance subsystem

(3) Marketing subsystem

(4) Personnel subsystem. All parts or components are interrelated.

4. Multimotivated:

5. Multidisciplinary

Contingency Theory:

Systems approach emphasizes that all sub- systems of an organization along with the super

system of environment are interconnected and interrelated.

Contingency approach analysis and understands these interrelationship so that managerial

actions can be adjusted to demands of specific situations or circumstances.

There is no one best way (as advocated by Taylor) to organize and manage. Thus, Contingency

Approach to management emphasizes the fact that management is a highly practice-oriented

discipline.


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The application of management principles and practices should therefore be continent upon the

existing circumstances.Contingency approach guides the manager to be adaptive to

environment.

The contingency approach is an improvement over the systems approach.

It not only examines the relationships between sub-systems of the organization, but also the

relationship between the organization and its environment.

However, the contingency approach suffers from two limitations:-

1. It does not recognize the influence of management concepts and techniques on

environment.

2. Literature on contingency management is yet not adequate.

Elton Mayo and F. Roethlisberger and the Hawthorne Studies.

In general, that the improvement in productivity was due to such social factors as morale,

satisfactory interrelationships between members of a work group (a "sense of belonging"), and

effective management--a kind of managing that would understand human behavior, especially

group behavior, and serve it through such interpersonal skills as motivating, counseling, leading,

and communicating.

Elton Mayo was born in Australia. He was educated in Logic and Philosophy at St. Peter's College,

Adelaide. He led a team of researchers from Harvard University, which carried out investigation

in human problems at the Hawthorne Plant of Western Electrical Company at Chicago.

Hawthorne Experiment: In 1927, a group of researchers led by Elton Mayo and Fritz

Roethlisberger of the Harvard Business School were invited to join in the studies at the

Hawthorne Works of Western Electric Company, Chicago. The experiment lasted up to 1932.

The Hawthorne experiment consists of four parts. These parts are briefly described below:-

1. Illumination Experiment. When the intensity of light was increased, the

output also increased. The output showed an upward trend even when the illumination

was gradually brought down to the normal level. Therefore, it was concluded that

there is no consistent relationship between output of workers and illumination in the

factory. There must be some other factor which affected productivity.

2. Relay Assembly Test Room Experiment.: work-group of six girls was constituted. These girls


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were friendly to each other and were asked to work in a very informal atmosphere under the

supervision of a researcher. Productivity and morale increased considerably during

the period of the experiment. Productivity went on increasing and stabilized at a

high level even when all the improvements were taken away and the pre-test

conditions were reintroduced. The researchers concluded that socio-psychological

factors such as feeling of being important, recognition, attention, participation,

cohesive work-group, and non-directive supervision held the key for higher

productivity.

3. Interviewing Programme.: The researchers interviewed a large number

of workers with regard to their opinions on work, working conditions and supervision.

Initially, a direct approach was used whereby interviews asked questions considered

important by managers and researchers. The researchers observed that the replies

of the workmen were guarded. Therefore, this approach was replaced by an indirect

technique, where the interviewer simply listened to what the workmen had to say.

The findings confirmed the importance of social factors at work in the total work

environment.

4. Bank Wiring Test Room Experiment.: This experiment was conducted by Roethlisberger andDickson.

This group comprised of 14 workers. After the experiment, the production records of this

group were compared with their earlier production records. It was observed that the group

evolved its own production norms for each individual worker, which was made lower than

those set by the management. Because of this, workers would produce only that much,

thereby defeating the incentive system. The findings of the study are:-

(i) Each individual was restricting output.

(ii) The group had its own "unofficial" standards of performance.

(iii) Individual output remained fairly constant over a period of time.

(iv) Informal groups play an important role in the working of an organization.

The important features of the Hawthorne Experiment are:-

1. A business organization is basically a social system rather than just a techno-economicsystem.


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2. The employer can be motivated by psychological and social wants because his behaviour is

also influenced by feelings, emotions and attitudes. Thus economic incentives are not the only

method to motivate people.

3. Management must learn to develop co-operative attitudes and not rely merely on

command.

4. Participation becomes an important instrument in human relations movement. In order to

achieve participation, effective two-way communication network is essential.

5. Productivity is linked with employee satisfaction in any business organization. Therefore

management must take greater interest in employee satisfaction.

6. Group psychology plays an important role in any business organization. We must therefore

rely more on informal group effort.

7. The neo-classical theory emphasizes that man is a living machine and he is far more

important than the inanimate machine. Hence, the key to higher productivity lies in employee

morale. High morale results in higher output.

Taylor's Scientific Management:

Started as an apprentice machinist in Philadelphia, USA. He rose to be the chief engineer at

the Midvale Engineering Works and later on served with the Bethlehem Works where he

experimented with his ideas and made the contribution to the management theory for which

he is so well known.

Frederick Winslow Taylor well-known as the founder of scientific management was the first to

recognize and emphasis the need for adopting a scientific approach to the task of managing

an enterprise.

He found that the management was usually ignorant of the amount of work that could be

done by a worker in a day as also the best method of doing the job.

He therefore, suggested that those responsible for management should adopt a scientific

approach in their work, and make use of "scientific method" for achieving higher efficiency.

The scientific method consists essentially of

(a) Observation

(b) Measurement

(c) Experimentation and

(d) Inference.

He summed up his approach in these words:

Science, not rule of thumb

Harmony, not discord


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Co-operation, not individualism Maximum output, in place of restricted output The development of each man to his greatest efficiency and prosperity

Elements of Scientific Management: The techniques which Taylor regarded as its essential

elements or features may be classified as under:

1. Scientific Task and Rate-setting, work improvement, etc.

2. Planning the Task.

3. Vocational Selection and Training

4. Standardization (of working conditions, material equipment etc.)

5. Specialization

6. Mental Revolution.

Scientific Task and Rate-Setting (work study):

Work study may be defined as the systematic, objective and critical examination of all the

factors governing the operational efficiency of any specified activity in order to effect

improvement.Work study includes.

(a) Methods Study: The management should try to ensure that the plant is laid

out in the best manner and is equipped with the best tools and machinery. The

possibilities of eliminating or combining certain operations may be studied.

(b) Motion Study: It is a study of the movement, of an operator (or even of a

machine) in performing an operation with the purpose of eliminating useless

motions.

(c) Time Study (work measurement): The basic purpose of time study is to determine theproper time for performing the operation. Such study may be conducted after the motion

study.Both time study and motion study help in determining the best method of doing a job

and the standard time allowed for it.

(d) Fatigue Study: If, a standard task is set without providing for measures to

eliminate fatigue, it may either be beyond the workers or the workers may

over strain themselves to attain it. It is necessary, therefore, to regulate the

working hours and provide for rest pauses at scientifically determined intervals.


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(e) Rate-setting: Taylor recommended the differential piece wage system, under

which workers performing the standard task within prescribed time are paid

a much higher rate per unit than inefficient workers who are not able to come

up to the standard set.

Standardization: Standardization may be introduced in respect of the following.

(a) Tools and equipment: By standardization is meant the process of bringing about uniformity.

(b) Speed: There is usually an optimum speed for every machine. If it is exceeded,it is likely to

result in damage to machinery.

(c) Conditions of Work: To attain standard performance, the maintenance of standard

conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.

(d) Materials: The efficiency of a worker depends on the quality of materials and the method of

handling materials.

Specialization: Scientific management will not be complete without the introduction of

specialization. Under this plan, the two functions of 'planning' and 'doing' are separated in the

organization of the plant. The `functional foremen' are specialists who join their heads to give

thought to the planning of the performance of operations in the workshop. Taylor suggested

eight functional foremen under his scheme of functional foremanship.

(a)

The Route Clerk: To lay down the sequence of operations and instruct the workersconcerned about it.

(b) The Instruction Card Clerk: To prepare detailed instructions regardingdifferent aspects of work.

(c) The Time and Cost Clerk: To send all information relating to their pay to theworkers and to secure proper returns of work from them.

(d) The Shop Disciplinarian: To deal with cases of breach of discipline andabsenteeism.

(e) The Gang Boss: To assemble and set up tools and machines and to teach theworkers to make all their personal motions in the quickest and best way.

(f) The Speed Boss: To ensure that machines are run at their best speeds andproper tools are used by the workers.

(g) The Repair Boss: To ensure that each worker keeps his machine in goodorder and maintains cleanliness around him and his machines.

(h) The Inspector: To show to the worker how to do the work.Worker's Criticism:(a) Speeding up of workers: Scientific Management is only a device to speedup the workers without much regard for their health and well-being.

(b) Loss of individual worker's initiative: Scientific Management reduces workersto automatic machine by taking away from them the function of thinking.


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(c) Problem of monotony: By separating the function of planning and thinking from that of doing,Scientific Management reduces work to mere routine. (d) Reduction of Employment: ScientificManagement creates unemploymentand hits the workers hard.(e) Weakening of Trade Unions: Under Scientific Management, the importantissues of wages and working conditions are decided by the managementthrough scientific investigation and the trade unions may have little say in thematter.(f) Exploitation of workers: Scientific Management improves productivitythrough the agency of workers and yet they are given a very small share ofthe benefit of such improvement.

Employer's Criticism:(a) Heavy Investment: It requires too heavy an investment. The employer hasto meet the extra cost of the planning department though the foreman in thisdepartment do not work in the workshop and directly contribute towardshigher production.

(b) Loss due to re-organization: The introduction of Scientific Managementrequires a virtual reorganization of the whole set-up of the industrial unit.Work may have to be suspended to complete such re-organization.(c) Unsuitable for small scale firms: various measures like the establishmentof a separate personnel department and the conducting of time and motionstudies are too expensive for a small or modest size industrial unit.

Frank (USA, 1867 - 1924) and Lillian (U.S.A, 1878 - 1912): The ideas of Taylorwere also strongly supported and developed by the famous husband and wife team of

Frank and Lillian Gilbreth.

They made pioneering effort in the field of motion study and laid the entire

foundation of our modern applications of job simplification, meaningful work standards

and incentive wage plans.

Gilbreth's contributions to management thought are quite considerable. His maincontributions are:(a) The one best way of doing a job is the way which involves the fewest motions

performed in an accessible area and in the most comfortable position. The bestway can be found out by the elimination of inefficient and wasteful motions involved

in the work.(b) He emphasized that training should be given to workers from the very beginning so

that they may achieve competence as early as possible.

(c) He suggested that each worker should be considered to occupy three positions - (i)the job he held before promotion to his present position, (ii) his present position, and

(iii) the next higher position. The part of a worker's time should be spent in teachingthe man below him and learning from the man above him. This would help himqualify for promotion and help to provide a successor to his current job.

(d) Frank and Lillian Gilberth also gave a thought to the welfare of the individuals whowork for the organization.

(e) Gilbreth also devised methods for avoiding wasteful and unproductive movements.He laid down how workers should stand, how his hands should move and so on.

Henry Lawrence Gantt (USA, 1861 - 1819): H.L Gantt was born in 1861. He graduated

from John Hopkins College. For some time, he worked as a draftsman in an iron foundry.He joined the Midvale Steel Company. Soon, he became an assistant to F.W Taylor. He worked with


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Taylor from 1887 - 1919 at Midvale Steel Company.

Gantt made four important contributions to the concepts of management:1. Gantt chart to compare actual to planned performance. Gantt chart was a daily

chart which graphically presented the process of work by showing machineoperations, man hour performance, deliveries, effected and the work in arrears.This chart was intended to facilitate day-to-day production planning.

2. Task-and-bonus plan for remunerating workers indicating a more humanitarianapproach. This plan was aimed at providing extra wages for extra work besidesguarantee of minimum wages. Under this system of wage payment, if a workercompletes the work laid out for him, he is paid a definite bonus in addition to hisdaily minimum wages. On the other hand, if a worker does not complete his work,he is paid only his daily minimum wages. There was a provision for giving bonus tosupervisors, if workers under him were able to earn such bonus by extra work.

3. Psychology of employee relations indicating management responsibility to teachand train workers. In his paper "Training Workmen in Habits of Industry andCooperation", Gantt pleaded for a policy of preaching and teaching workmen to do

their work in the process evolved through pre-thinking of management.4. Gantt laid great emphasis on leadership. He considered management as leadership

function. He laid stress on the importance of acceptable leadership as the primaryelement in the success of any business.

Harrington Emerson (USA, 1853 - 1931): Emerson was an American Engineer. Hedevoted his attention to efficiency in industry. He was the first to use the term 'efficiencyengineering' to describe his brand of consulting.

He called his philosophy "The Gospel of Efficiency". According to him, "efficiency means that the

right thing is done in the right manner, by the right man, at the right place, in the right time".

Emerson laid down the following principles of efficiency to be observed by management:-

(1) Ideals

(2) Common Sense

(3) Competent Counsel

(4) Discipline

(5) Fair Deal

(6) Proper Records

(7) Dispatching

(8) Standards and Schedules

(9) Standard Conditions(10) Standardized Operations

(11) Standard practice instructions and

(12) Efficiency Reward.

Henry Fayol (France, 1841 - 1925):

Henry Fayol was born in 1941 at Constantinople inFrance. He graduated as a mining engineer in1860 from the National School of Mining. After his graduation, he joined a French Coal Mining

Company as an Engineer.

Henry Fayol is considered the father of modern theory ofgeneral and industrial management. He divided general and industrial management into


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six groups:

1. Technical activities - Production, manufacture, adaptation.

2. Commercial activities - buying, selling and exchange.

3. Financial activities - search for and optimum use of capital.

4. Security activities - protection of property and persons.

5. Accounting activities - stock-taking, balance sheet, cost, and statistics.6. Managerial activities - planning, organization, command, co- ordination and control.

Even today, management process has general recognition.

Fayol's Principles of Management: The principles of management are given below:

1. Division of work: Division of work or specialization alone can give maximum

productivity and efficiency. Both technical and managerial activities can be performed

in the best manner only through division of labour and specialization.

2.Authority and Responsibility: The right to give order is called authority. The

obligation to accomplish is called responsibility. Authority and Responsibility are

the two sides of the management coin. They exist together. They are complementary

and mutually interdependent.3. Discipline: The objectives, rules and regulations, the policies and procedures must

be honoured by each member of an organization. There must be clear and fair

agreement on the rules and objectives, on the policies and procedures. There must

be penalties (punishment) for non-obedience or indiscipline. No organization can

work smoothly without discipline - preferably voluntary discipline.

4. Unity of Command: In order to avoid any possible confusion and conflict, each

member of an organization must received orders and instructions only from one

superior (boss).

5. Unity of Direction: All members of an organization must work together to

accomplish common objectives.

6. Emphasis on Subordination of Personal Interest to General or CommonInterest: This is also called principle of co-operation. Each shall work for all and

all for each. General or common interest must be supreme in any joint enterprise.

7. Remuneration: Fair pay with non-financial rewards can act as the best incentive

or motivator for good performance. Exploitation of employees in any manner must

be eliminated. Sound scheme of remuneration includes adequate financial and nonfinancial

incentives.

8. Centralization: There must be a good balance between centralization and

decentralization of authority and power. Extreme centralization and decentralization

must be avoided.

9. Scalar Chain: The unity of command brings about a chain or hierarchy of command

linking all members of the organization from the top to the bottom. Scalar denotes steps.

10. Order: Fayol suggested that there is a place for everything. Order or system alone

can create a sound organization and efficient management.

11. Equity: An organization consists of a group of people involved in joint effort. Hence,

equity (i.e., justice) must be there. Without equity, we cannot have sustained and

adequate joint collaboration.

12. Stability of Tenure: A person needs time to adjust himself with the new work and

demonstrate efficiency in due course. Hence, employees and managers must have

job security. Security of income and employment is a pre-requisite of sound

organization and management.

13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization.

Union is strength. But unity demands co-operation. Pride, loyalty and sense of

belonging are responsible for good performance.


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14. Initiative: Creative thinking and capacity to take initiative can give us sound

managerial planning and execution of predetermined plans.

Bureaucratic Model: Max Weber, a German Sociologist developed thebureaucratic model. His model of bureaucracy include(i) Hierarchy of authority.

(ii) Division of labour based upon functional specialization.(iii) A system of rules.

(iv) Impersonality of interpersonal relationships.(v) A system of work procedures.(vi) Placement of employees based upon technical competence.(vii) Legal authority and power.

Bureaucracy provides a rigid model of an organization. It does not account for importanthuman elements. The features of Bureaucracy are:-

1. Rigidity, impersonality and higher cost of controls.2. Anxiety due to pressure of conformity to rules and procedure.3. Dependence on superior.4. Tendency to forget ultimate goals of the organization.Bureaucratic Model is preferred where change is not anticipated or where rate of changecan be predicated. It is followed in government departments and in large businessorganizations.

PATTERNS OF MANAGEMENT ANALYSIS: A MANAGEMENT THEORY

JUNGLE?

1) the empirical, or case, approach,(2) the managerial roles approach,(3) the contingency, or situational, approach,(4) the mathematical, or "management science," approach,(5) the decision theory approach,(6) the reengineering approach,

(7) the systems approach,(8) the sociotechnical systems approach,

(9) the cooperative social systems approach,

(10) the group behavior approach,

(11) the interpersonal behavior approach,(12) McKinsey's 7-S framework,(13) the total quality management approach,

(14) the management process, or operational, approach.


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The Five Managerial Functions

Planning Organizing Staffing Leading Controlling


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Planning involves selecting missions and objectives and the actions to achieve them; it requires

decision making

Organizing involves establishing an intentional structure of roles for people to fill in an organization

Staffing involves filling, and keeping filled, the positions in the organization structure

Leading is influencing people so that they will contribute to organization and group goals

Controlling is measuring and correcting individual and organizational performance to ensure that

events conform to plans


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interpersonal relations. Their theory focuses on the motivation of the individual

viewed as a socio-psychological being.

4. The Social System School

The members of the social system school of management theory view management

as a social system. March and Simon's 1958 bookOrganizations published byWiley is used as an example, but Koontz indicates that Chester Barnard is the

spiritual father of this school of management. The social system school identifiesthe nature of the cultural relationships of various social groups and how they arerelated and integrated. Barnard's work includes a theory of cooperation which

underlies the contributions of many others in this school. Herbert Simon, and

others expanded the concept of social systems to include any cooperative andpurposeful group interrelationship or behavior.

5. The Decision Theory School

The decision theory school of management concentrates on the rational approach

to decisions where alternative ideas or courses of action are analyzed. This schoolis believed to have grown from the theory of consumer's choice associated withJeremy Bentham and tends to by oriented toward economic model construction and

mathematics. The decision is the central focus.

6. The Mathematical School

The mathematical school of management views management as a system ofmathematical models and processes. This includes the operations researchers and

management scientists. But Koontz points out that in his view mathematics is atool, not a school.

The Major Sources of Mental Entanglement that create the Management

Theory Jungle

Five sources of entanglement or confusion include the following:

1. The Semantics Jungle- There is no agreement on the meaning of the words

management, organization, leadership, communication, and human relations togive a few examples.

2. Differences in the Definition of Management as a Body of Knowledge -

What is management? Who is a manager? If everything is management andeveryone is a manager, how can management theory be regarded as a useful or

scientific?

3. The a priori Assumption - Ignoring the work of Fayol, Mooney, Brown,Urwick, Gulick and others on the grounds that they are universalists.


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4. The Misunderstanding of Principles - For example, confusion over the

validity of principles such as unity of command, and span of control.

5. The Inability or Unwillingness of Management Theorists to Understand

each other - The roadblock to understanding is unwillingness.

How to Disentangle the Management Theory Jungle

1. Definition of a Body of Knowledge - The first need is to define the field.

Koontz defines management in terms of the practitioner's frame of reference as

"the art of getting things done through and with people in formally organizedgroups, the art of creating an environment in such an organized group where

people can perform as individuals and yet cooperate toward attainment of group

goals, the art of removing blocks to such performance, the art of optimizingefficiency in effectively reaching goals." In defining the body of knowledge

management theorist must not confuse tools with content. For example,mathematics, operations research, accounting, economic theory, sociometry, and

psychology are significant tools of management, but they are not part of the

content of the field.

2. Integration of Management and other Disciplines

3. The Clarification of Management Semantics

4. Willingness to Distill and Test Fundamentals

Criteria to Remember in Clarifying Management Theory

1. Management theory should deal with a manageable area of knowledge and

inquiry.

2. Management theory should be useful in improving practice.

3. Management theory should not be lost in semantics, jargon not understandableto the practitioner.

4. Management theory should provide direction and efficiency to research and

teaching.

5. Management theory must recognize that it is a part of a larger universe ofknowledge and theory.


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Mintzberg Managerical roles:

The Canadian academic, Henry Mintzberg who had trained as a mechanical engineer, wrote his PhD

thesis at the MIT Sloan School of Management analysing the actual work habits and time

management of chief executive officers (CEOs). In 1973, Mintzberg's thesis on the nature of

managerial work was adopted as a study and published for a wider audience.

Mintzberg's empirical research involved observing and analysing the activities of the CEOs of five

private and semi-public organisations. Previous management behaviour studies had concentrated on

team and subordinate behaviour or organisational structure rather than on the day-to-day reality of

managerial behaviour.

To describe the work life of a CEO, Mintzberg first identified six characteristics of the job:

(1) Managers process large, open-ended workloads under tight time pressure - a manager's job is

never done.

(2) Managerial activities are relatively short in duration, varied and fragmented and often self-

initiated.

(3) CEOs prefer action and action driven activities and dislike mail and paperwork.

(4) They prefer verbal communication through meetings and phone conversations.

(5) They maintain relationships primarily with their subordinates and external parties and least with

their superiors.

(6) Their involvement in the execution of the work is limited although they initiate many of the

decisions.

Mintzberg then identified ten separate roles in managerial work, each role defined as an organised

collection of behaviours belonging to an identifiable function or position. He separated these roles

into three subcategories:

interpersonal contact (1, 2, 3), information processing (4, 5, 6) and decision making

(7-10).

1. FIGUREHEAD: the manager performs ceremonial and symbolic duties as head of the organisation;

2. LEADER: fosters a proper work atmosphere and motivates and develops subordinates;

3. LIASION: develops and maintains a network of external contacts to gather information;

4. MONITOR: gathers internal and external information relevant to the organisation;

5. DISSEMINATOR: transmits factual and value based information to subordinates;

6. SPOKESPERSON: communicates to the outside world on performance and policies.


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7. ENTREPRENEUR: designs and initiates change in the organisation;

8. DISTURBANCE HANDLER: deals with unexpected events and operational breakdowns;

9. RESOURCE ALLOCATOR: controls and authorises the use of organisational resources;

10. NEGOTIATOR: participates in negotiation activities with other organisations and individuals.

Mintzberg next analysed individual manager's use and mix of the ten roles according to the six work

related characteristics. He identified four clusters of independent variables: external, function

elated,individual and situational. He concluded that eight role combinations were 'natural'

configurations of the job:

1. contact manager -- figurehead and liaison

2. political manager -- spokesperson and negotiator

3. entrepreneur -- entrepreneur and negotiator

4. insider -- resource allocator

5. real-time manager -- disturbance handler

6. team manager -- leader

7. expert manager -- monitor and spokesperson

8. new manager -- liaison and monitor

Mintzberg's study on the 'nature of managerial work' exposed many managerial myths requiring

change such as replacing the aura of reflective strategists carefully planning their firm's next move

with one of fallible humans who are continuously interrupted. Indeed, half of the managerial

activities studied lasted less than nine minutes.

Mintzberg also found that although individual capabilities influence the implementation of a role, it

is the organisation that determines the need for a particular role, addressing the common belief that

it predominantly a manager's skill set that determines success. Effective managers develop protocols

for action given their job description and personal preference, and match these with the situation at

hand.


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Management Levels/Hierachy

Organizations often have 3 levels of managers:

First-line Managers: responsible for day-to-day operation. They supervise the people performing the

activities required to make the good or service.

Middle Managers: Supervise first-line managers. They are also responsible to find the best way to

use departmental resources to achieve goals.

Top Managers: Responsible for the performance of all departments and have cross-departmental

responsibility. They establish organizational goals and monitor middle managers.

Managerial Skills

There are three skill sets that managers need to perform effectively.

1. Conceptual skills: the ability to analyze and diagnose a situation and find the cause and effect.

2. Human skills: the ability to understand, alter, lead, and control peoples behavior.

3. Technical skills: the job-specific knowledge required to perform a task. Common examples includemarketing, accounting, and manufacturing.

All three skills are enhanced through formal training, reading, and practice.

The four skills for administrators are:(Koontz)

technical,

human,

conceptual, and

design skills


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First-line Managers

Supervisors responsible for directing the day-to-day activities of operative employees

Middle Managers

Individuals at levels of management between the first-line manager and top management

Top Managers

Individuals who are responsible for making decisions about the direction of the organization andestablishing policies that affect all organizational members


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MANAGEMENT AS PROFESSION:

Is management a profession? According to Abraham Flexner, A profession is -

1. A body of specialized knowledge and recognized educational process of acquiring it.

2. A standard of qualifications governing admission to the profession.

3. A standard of conduct governing the relationship of the practitioners with clients,colleagues and

the public.

4. An acceptance of the social responsibility inherent in an occupation and the public interest.

5. An association or society devoted to the advancement of the social obligations as distinct from the

economic interests of the group.

According to Peter Drucker, "Professional management is a function, a discipline, a task to be done;

and managers are the professionals who practice this discipline, carry out the functions and

Discharge these tasks. It is no longer relevant whether the manager is also an owner; if he is it is

incidental to his main function, which is to be a manager.

The World Council of Management has recommended the following criteria for professionalisation.

They are

1. Members of a profession subordinate self-interest to the client interest and the official interest.

2. A profession is based on a systematic body of knowledge that is held to commonand lends to application.

3. Membership of a profession should depend on the observance of certain rules ofconduct or behaviour.

A critical evaluation of the above definitions show that professionalisation of businessmanagement shows that -1. There exists a systematic body of knowledge on management. A professional should

have formally acquired the specialized knowledge and skill for management.Management is taught as a discipline in various educational institutes, throughout

the world.2. Membership of a profession should depend on the observance of certain rules of

conduct and behaviour. The decisions and actions of a professional are guided bycertain ethical considerations.

3. A profession is based on a systematic body of knowledge that is held in common

and lends itself to application. Thus, a profession should have no ideological bias inthe discharge of his functions.

A close scrutiny of management shows that management unlike law or medicine is not afull-fledged profession. The reasons are -1. It is not obligatory to possess specific qualifications for being appointed as a manager.2. There is no single association to regulate the educational and training standards ofmanagers.3. Uniform professional standards have not been set up for the practicing managers.Thus, from the above mentioned discussion we can understand that management fulfils

certain criteria to call it a profession. Whereas, it fails to meet certain other criteria.Therefore, we can conclude that management is not a full-fledged profession but it isadvancing towards professionalisation.


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Characteristics of Excellent Companies (Peters & Waterman)

These firms

* Were oriented toward action

* Learned about the needs of their customers

* Promoted managerial autonomy and entrepreneurship

* Achieved productivity by paying close attention to the needs of their people

* Were driven by a company philosophy often based on the values of their leaders

* Focused on the business they knew best

* Had a simple organization structure with a lean staff

* Were centralized as well as decentralized, depending on appropriateness

Managerial resources

Resources are organizational assets and include: People, Machinery, Raw materials, Information, skills, Financial capital.

Managers are the people responsible for supervising the use of an organizations resourcesto meet its goals.

Organizational performance:Measures how efficiently and effectively managers use resources to satisfy customers and achieve

goals.

Efficiency: A measure of how well resources are used to achieve a goal.

Usually, managers must try to minimize the input of resources to attain the same goal.

Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?), and

the degree to which they are achieved.

Organizations are more effective when managers choose the correct goals and then achieve them


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Managerial Roles

Described by Mintzberg.

A role is a set of specific tasks a person performs because of the position they hold.

Roles are directed inside as well as outside the organization.

There are 3 broad role categories:

1. Interpersonal: Roles managers assume to coordinate and interact with employees andprovide direction to the organization.

Figurehead role: symbolizes the organization and what it is trying to achieve. Leader role: train, counsel, mentor and encourage high employee performance. Liaison role: link and coordinate people inside and outside the organization to help

achieve goals.

2. Informational : Associated with the tasks needed to obtain and transmit information formanagement of the organization.

Monitor role: analyzes information from both the internal and externalenvironment.

Disseminator role: manager transmits information to influence attitudes andbehavior of employees.

Spokesperson role: use of information to positively influence the way people in andout of the organization respond to it.

3. Decisional : Associated with the methods managers use to plan strategy and utilizeresources to achieve goals.

Entrepreneur role: deciding upon new projects or programs to initiate and invest. Disturbance handler role: assume responsibility for handling an unexpected event

or crisis.

Resource allocator role: assign resources between functions and divisions, setbudgets of lower managers.

Negotiator role: seeks to negotiate solutions between other managers, unions,

customers, or shareholders.

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