1.General Principles of Management UNIT II

2. EVOLUTION OF MANAGEMENT THOUGHT The concept of organisation and administration existed in Egyptin 1300 BC. In the field of business organisation, some contributions havecome from Robert Owen, James Watt, Charles Babbage etc. Robert Owen- emphasised on personnel aspects inmanagement and advocated a number of benefits to employers. It was unrecognized two centuries ago. Central activity of our age and economy The Emergence of Management Thought can be classified undervarious schools of management and can be put into 3 broadcategories as follows: The Classical Approach The Behavioural Approach The Quantitative Approach 3. A. CLASSICAL APPROACH It has 3 branches:I. Scientific ManagementII. Administrative PrinciplesIII. Bureaucratic OrganisationI. Scientific Management: Fredrick W. Taylor in his book Scientific Management criticised the method of traditional management which were composed of: a.Subjective or intuitive evaluation b.Jobs were performed by rule of thumb rather than standard times, methods or motives c.No efforts were made to introduce new techniques of management d.No formal techniques of skill and professional development existed. Training was under apprentice system e.Management was considered as a group of overall supervisors rather than a group performing unique duties. 4. I. SCIENTIFIC MANAGEMENT Frederick W. Taylor (1856 1915) Father of Scientific Management Raise productivity through greater efficiency inproduction and increased pay for workers, byapplying the scientific method. His principles emphasize using science,creating group harmony and cooperation,achieving maximum output and developingworkers. 5. PRINCIPLES OF F.W.TAYLOR1. Replacing rule of thumb with science: Rule of thumb emphasises estimation and Sciencedenotes precision in determining any aspect of work.2. Harmony in group Action: There should be mutual give and take situation andproper understanding3. Co-operation4. Maximum Output5. Development of workers 6. SCIENTIFIC MANAGEMENT Henry L. Gantt Principles and concepts of F.W. Taylor wasrefined and enlarged Called for scientific selection of workers andharmonious cooperation between labour andmanagement Developed the Gantt chart Stressed the need for training 7. SCIENTIFIC MANAGEMENT Frank and Lillian Gilbreth Frank is known primarily for his time and motionstudies motion and fatigue studies Lillian an industrial psychologist, focused on thehuman aspects of work and the understandingof workers personalities and needs Economical motion of bricklaying, shorthandsymbols for analysts 8. Merits and Criticisms of Scientific ManagementMerits:a. More production and high profitsb. Job satisfactionc. Personality Developmentd. Higher standard of livingCriticisms:a. Unsuitable for small employeesb. Unemployment when machines replace labourc. Retarding human development i.e., workers are reduced to the status of machines and totally deprieved of thinking function. 9. II. ADMINSTRATIVEPRINCIPLES Henry Fayol (1841-1925) was a leadingFrench industrialist and a successful manager. His life long experience, in the field of managing was reproduced in a monograph titled Administration Industrial and Generale in 1916 and translated into English in 1944 in U.S. Fayols classification of Managerial Functions:a.Planningb.Organisingc.Commandingd.Co-ordinatinge.Controlling 10. Fayols General Principles of Management Henry Fayol Father of Modern management theory Divided industrial activities into six groups a. Technical (related to production) b. Commercial (related to buying, selling or exchange) c. Financial (related to search for and optimum useof capital) d. Security (related to protection of properties &personnel of an enterprise) e. Accounting (related to record of business transactions)f. Managerial Recognised the need for teaching management Formulated the 14 principles of management 11. 14 PRINCIPLES1. DIVISION OF WORK To take advantage ofspecialisation,different workers for different jobs depending upon natural condition, skills etc.2. AUTHORITY AND RESPONSIBILITY right to giveorders andpower to extract obedience3. DISCIPLINE good supervisors at all level, clearand fair agreements betweenemployees and employer,judicious application of penalties4. UNITY OF COMMAND one superior to avoid conflict ininstructions5. UNITY OF DIRECTION complete identity between 12. 14 PRINCIPLES6. SUBORDINATION OF INDIVIDUAL INTEREST TOGENERAL INTEREST more money, recognition,status etc7. REMUNERATION - should be fair general businessconditions, cost of living, productivity andcapacity of thefirm efficiency andmorale & fosters goodrelationshipbetween employees andmanagement8. CENTRALISATION reservation of decision-makingauthority at toplevelofmanagement. It is subject to thenature of the organisation how big/small it is.9. SCALAR CHAIN means hierarchy of authority from the 13. 14 PRINCIPLES10. ORDER efforts right place for everything and for therightman11. EQUITY equality of fair treatment combination ofkindness and justice12. STABILITY OF TENURE OF PERSONNEL to do moreand betterjob13. INITIATIVE freedom to think out and execute a plan innovation => initiative14. ESPRIT DE CORPS means team spirit union isstrength. Harmony and unity ofstaff strength tothe company 14. III. BUREACRATICORGANISATIONMax Weber (1864-1920) is a German Social Scientist.Main characteristics of Webers bureaucratic model:i) A division of labour by functional specialisation i.e., each member performs his specialised job.ii) A well defined hierarchy of authorityiii) A system of rules covering the duties and rights of employersiv) A system of procedures for dealing with work situationsv) Impersonal relations between people i.e., there is no place for emotions, sentiments and personal attachment. 15. MERITS AND DEMERITSOFBUREAUCRACYMERITS: 1. Specialisation 2. No overlapping of duties as duties and responsibilities are clearly defined 3. Systematic and orderly functioning 4. Efficient functioning because of technical competenceDEMERITS: 1. Too much paper work 2. Lack of flexibility 3. No place for human consideration 4. Lack of initiative 16. B. BEHAVIOURAL APPROACHThe traditionalists emphasised on physical technical aspects of managing and little attention waspaid to human factors.The human relation approach seeks to examineand analyse the impact of the human factor towardsmore effective management.The various behavioural scientists include: Hugo Munsterberg Walter Dill Scott Max Weber Vilfredo Pareto Elton Mayo and F. J. Roethlisberger 17. Human Relations Approach Human Relations was given more importance by Elton Mayo who conducted an experiment, which formed the basis for this approach called as Hawthorne Experiments.HAWTHORNE EXPERIMENTS: 1. Hawthorne Experiments are conducted at the Hawthorne Plant of theWestern Electric Company, U.S.A., during 1924-32. 2. The experiments were conducted by an eminent team of researchers from the Harvard Business School, under the leadership of Elton Mayo, who is the father of Human Relations School. 3. The basic purpose motivating these experiments was whether physical facilities like raw materials, machinery, technology etc were the factors responsible for human efficiency or were there certain other factors more 18. BEHAVIOURAL SCIENCES Elton Mayo and F. J. Roethlisberger Famous studies at the Hawthorne plant ofWestern Electric Company on the influenceof social attitudes and relationships of workgroups on performance. Four different types of experiments wereconducted in this regard. 19. HAWTHORNE EXPERIMENTS IlluminationExperimentsLevel of Illumination. Relay Assembly Test Room Break, Supervisor, Working time. Mass Interviewing Programme Social relations inside the organisation had an unmistakable influence on their attitude and behaviours. 20. Positive Contributions ofHawthorne Experimentsi. An organisation is a SOCIAL SYSTEM; with a culture on its own.ii. INFORMAL GROUPS have a serious impact on workers productivity.iii. FRIENDLY SUPERVISION has a favourable influence on human efficiency at work.iv. FREE FLOW OF COMMUNICATION, in the organisation makes for good human relations. 21. Limitations of Hawthorne Experimentsi. Experiments were not conducted in a scientific manner. There was no system involved in selecting the work, workers and the environment.ii. The Hawthorne plant was not a typical plant as it was a thoroughly unpleasant place to work. Therefore, the results could not be valid for others.iii. The experimented workers did not exhibit their natural work-behaviour because they felt that they are more important to others and induced them to demonstrate unusual work behaviour HAWTHORNE EFFECT. 22. C. THE QUANTITATIVE APPROACH 23. MODERN MANAGEMENTTHOUGHT Peter F. Drucker: Very prolific writer on many general managementtopics. W. Edwards Deming: Introduced quality control in Japan. Laurence Peter: Observed that eventually people get promoted to alevel they are incompetent. William Ouchi:Discussedselected Japanese managerial practicesadapted in the US environment. Thomas Peters & Robert Waterman: Identified 24. SYSTEMS APPROACH Stress one aspect at the expense of others. Difficult to which aspect is most useful and appropriate in a given situation. Needed one broad, detailed, conceptual framework that can help a manager diagnose and decide which tool or a combination of tools will be best do the job system approach. 25. KEY CONCEPTS A system is a set of interdependent parts task, structure, people and technology. Central to the systems approach is the concept ofholism relation of interdependence. A system can either be open or closed open system: interacts with the environment 26. Organisation as an open systemFIG: 27. KEY CONCEPTS Every system has a boundary Where it ends and other system begins. Separates the parts of the system from the environment. Protects the transformation process from the vagaries of its environment. 28. CONTINGENCY Attempts to integrate various schools of thoughts. No universal applicability under all conditions. Managers can identify the technique that will, in a particular situation bestcontribute to the attainment of management goals. Thereforethey should develop situational sensitivity and practical selectivity. 29. CONTINGENCY Designing organisational structure, degree of centralisation, information decisionsystems, motivationaland leadership approach, establishing communication and control systems etc.