PRINCIPLES AND PRACTICE OF MANAGEMENT

SYLLUBUS 5 UNITS UNIT 1 – Introduction to management concept,

Evolution of management, social responsibility 0f managers, and Ethics in managing

UNIT 2- Planning ,Decision making, Organizing UNIT 3- Staffing , Directing, Motivation UNIT 4- Leadership, Controlling, UNIT 5- Total Quality control

Suggested reading

1. Stoner, freeman &Gilbert jr MANAGEMENT(PH)2. Koontz Harlod&Weihrich- Essentials of Management3. Robbins &Coulter- MANAGEMENT(PH,9TH Edition)4. Robbins S.P. and Decenzo David –Fundamentals of

Management :Essential concepts and applications (person education,6th edition)

5. Weihrich Heinz and koontz Harold- Management: A Global and Entrepreneurial Perspective(McGraw hill, 12th edition)

CONTRIBUTION OF OTHER DISCIPLINESECONOMICS

SOCIOLOGY

PSYCHOLOGY

ANTHRPOLOGY

STATISTICS

MANAGEMENT

What is management?The verb manage comes from the Italian

maneggiare (to handle — especially tools), which in turn derives from the Latin

manus (hand) French

word mesnagement (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]--- Wikipedia

“Management is the art of getting things done Through other people.”—Mary Parker Follet

“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.

Management is the art of securing maximum results with minimum efforts so as to secure Maximum prosperity and happiness for both employer and employee and give the public

best possible service.– JOHAN MEEManagement theory jungle

MANAGEMENT“The Process of PLANNING,ORAGANISING,LEADING,

And CONTROLLING the work of organization Members and of using all available organizational

resources to reach stated organizational goals.”

ORGANIZATION: Two or more people who work together in a structured way to achieve a specific goal or a set of goals.

Profit organizations: Coca- Cola , Microsoft etcNonprofit organizations: Cry, Government -

hospitals, church etc

MANGEMENT FUNCTIONS OR

PROCESS OF MANAGEMENT

Organizing, planning, leading , controlling(4) - Newmen and summerPlanning , Organizing, Commanding,

Coordinating And Controlling(5)– Henry Fayol

POSDCORB P--- PLANNING O--- ORGANISING S--- STAFFING D--- DIRECTING C--- COORDINATING R--- REPORTING B--- BUGETING --Luther Gulik

Men and womenMaterialMachinesMethodsMoneyMarkets

The meaning of management

BASIC RESOURCES:The 6M’s

PLANNING

ORGANISING

ACTUATING

FUNDAMENTAL FUNCTIONS:The process of Management

STATED OBJECTIVE:End Results

ccCONTROLLING

Planning: is the function that determines in advance what should be done . It is a process of deciding the business objectives and charting out the methods of attaining those objectives .

Organizing: To organize a business is to provide it with everything useful to its functioning i.e. personnel, raw materials, tools capital

Structural consideration i.e. chain of command division of labor and assignment of responsibility

Directing: This function can be called by various name: LEADING,DIRECTING,MOTIVATING

ACTUATING In this function the manager explains to his people

what they have to do and helps them do it to the best of their ability.

Communication: is the process of passing information and understanding one person to another

Leadership: is the process by which a manager guides and influences the work of his subordinate.

motivation: arousing desire in the minds of workers to give their best to enterprise.

Controlling: The process of monitoring organizational progress towards goal attainment.

ORGANIZINGDetermining how best to group activities and

resources

Setting the organization ‘s goals

and deciding how best to achieve them

Monitoring and correcting ongoing activities to facilitate goal attainment

CONTROLLING

Motivating members of the organization to work in the best interest’s of the organization

LEADING

PLANNING AND DECISION MAKING

THE MANGEMENT

PROCESS

Efficiency vs. effectiveness

Effectiveness: A central element in the process of management that entails achieving a stated organizational objective.

Efficiency: A central element in the process of management that balances the amount of resources used to achieve an objective against what was actually accomplished.

Balancing effectiveness and efficiency

TOO MUCH EMPHASIS ON EFFECTIVENESS

EfficiencyLimited

resources are wasted

EffectivenessThe job gets done,

but

Balancing effectiveness and efficiency

TOO MUCH EMPHASIS ON EFFICIENCY

EffectivenessThe job does

not done , because

EfficiencyAvailable resources

are underutilized

Balancing effectiveness and efficiency

BALANCE EMPHASIS ON EFFECTIVENESS ANDEFFICENCY

EffectivenessThe job gets done ,

and----

EfficiencyLimited

Resources are not wasted

1. Universality : it is common and essential element in all enterprises. Managers perform more or less the same functions irrespective of their position or nature of the organization. The basic principles of management can be applied in all managerial situations regardless of the size, nature and location of the organization.

2. Purposeful: : Management is always aimed at achieving organizational goals and purposes. The success of management is measured by the extent to which the desired objectives are attained

Nature of Management

3 Social Process: Management essentially involves managing people organized in work groups. It includes retaining, Developing and motivating people at work, as well as taking care of their satisfaction as social beings. All these interpersonal relations and interactions make the management as a social process.

4 Coordinating force: Management coordinates the efforts of organization members through orderly arrangement of inter-related activities so as to avoid duplication and overlapping. Management reconciles the individual goals with the organizational goals and integrates human and physical resources.

5 Intangible :Management is intangible. It is an unseen force. Its presence can be felt everywhere by the results of its effort which comes in the form of orderliness, adequate work output, satisfactory working climate, employees satisfaction etc.

6 Continuous process: Management is a dynamic and an on-going process. The cycle of management continues to operate so long as there is organised action for the achievement of group goals.

7 Composite process: Functions of management cannot be undertaken sequentially, independent of each other. Management is a composite process made up of individual ingredients. All the functions are performed by involving several ingredients. Therefore, the whole process is integrative and performed in a network fashion.

8 Creative organ :Management creates energetic effect by producing results which are more than the sum of individual efforts of the group members. It provides sequence to operations, matches jobs to goals, connects work to physical and financial resources. It provides creative ideas, new imaginations and visions to group efforts.

9 Multidisciplinary : Management is basically multidisciplinary . It implies that , although management has been developed as separate discipline, it draws freely ideas and concepts from various discipline i.e. psychology , sociology, anthropology, economics , statistics, operation research

10 Dynamic nature of principles :Principle is a fundamental truth which establishes a cause and effect relationships of a function. Management principle are flexible in nature and change with the change in environment .due to Continuous development in field , many old principles are being changed by new one.

11. Relative , not Absolute principles: Management principles are relative , not absolute , and they should be applied according to the need of organization . Each organization is different from others. The difference may exist because of time, place, socio-cultural factors etc. A particular management principle has different strength in different conditions.

Management principles should be applied in the light of prevailing conditions .

IMPORTANCE OF MANAGEMENT1 Optimum Utilization of Resources :Management

tries to make effective utilization of resources . The resources are scare in nature and to meet the demand of society , their contribution should be maximum for general interest of society. Management utilizes all the physical & human resources productively. This leads to efficacy in management

2 Development of resources : Management develops various resources . This is true with human as well as non human factors.

3 Integrated various interest groups: There are various interest groups and they put pressure over other groups for maximum share in the combined out put. Ex: BUSINESS ORGANIZATION– shareholder , employees, government etc.

4.Essentials for Prosperity of Society:

5.Establishes Sound Organization:

6.Helps the employees in achieving personal objectives

8. It helps in Achieving Group Goals It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled .

9. ENGINE FOR GROWTH :10. PROMOTING INTERNATIONAL UNDERSTANDING:

MANAGEMENT ART OR SCIENCE ?

WHAT IS SCIENCE?Science is body of knowledge developed

systematically based on observation, measurement , experimentation and drawing inferences based on data.

The knowledge can be verified through cause-effect relationship, knowledge provides principles , theory and laws.

Management satisfies characteristics of science:

Management knowledge is developed through a number of system like input out put system, organizational system etc

Management knowledge is developed through observation , measurement and experimentation.

Inferences are drawn based on data analysis.Management is a developing science (can not be an exact science)like physics, chemistry

What is an art?

Art is related to bringing of a desired result through the application of skill and creativity.

Science ---- WHY Art ------------- KNOW HOW & SKILLSArt is associated with application of knowledge or science or of

expertness in performance.so management is both science and artTo be a successful manager , one requires knowledge of

management principles and the knowledge of how the knowledge can be utilized.

Managing as practice is an art, the knowledge underlying the practice is a science.

Management as a profession

Profession is an occupation for which specialized knowledge , skill, and training are required and the use of these skills is not meant for self – satisfaction but these are used for larger interests of the society and success of the use of these skills is measured not in the terms of money alone.

Characteristics of a profession

1. Existence of an organised and systematized body of knowledge: Management has developed as distinct body of knowledge over the last seven –eight decades. The development of knowledge , in management is emerged duet to requirement for managing complex and large organization in a better way.

2. Formal method of acquisition of knowledge: An individual can enter into a profession only after getting knowledge and skills through formal training.

3. Existence of an association : an occupation should have an association .if not so; the occupation can not be consider as profession --AIMA

4. Ethical code: There are some ethical standards for every profession . Every individual of the concerned profession is expected to maintain conformity with these standards .

5. Service motive :Service motive insists the professionals keep social interest in the mind while charging fees for there professional services . The success of any profession is not based on the money it earns but by the amount of social service it provides . Management provide more social service .

Obstacles to management being a profession

1.There is no uniform and standard criteria for the evaluation of managerial performance.

2. Management executives have not uniform clients and do not perform uniform activities.

3. Person without a degree or a diploma in management are also doing well like persons have a degree or diploma in management.

4. The theory of management of management is still changing and new principles are also being developed.

MANAGEMENT VS ADMINSTRATION

There are three views1.Administration is above management:2. Administration is a part of management:3.Mangement and administration are same:

1.Administration is above management: According to one group of writers ,Sheldon(1923 philosophy of management), Spriegal Milward : Administration involves “thinking". It is a top level function which is center around the determination of plan, policies, and objectives of a business enterprises.

On the other hand , Management , involves “Doing”. It is a lower level function which is concerned with the execution and direction of the policies and operations.

Accordingly, at top level , administration is more important and one move down in organization Management become more important.

Management vs. administration

1.Nature of work Administration: It is concerned about the

determination of objectives and major policies of an organization.Management: It puts into action the policies and plans laid down by the administration.

2.Type of function Administration: It is a determinative function.

Management: It is an executive function. 3.Scope Administration: It takes major decisions of an

enterprise as a whole.Management: It takes decisions within the framework set by the administration.

3.

4. Level of authority Administration: It is a top-level activity.

Management: It is a middle level activity5. Nature of status Administration: It consists of owners who invest

capital in and receive profits from an enterprise.Management: It is a group of managerial personnel who use their specialized knowledge to fulfill the objectives of an enterprise.

5.

Lower

Administration(policy formulation)

Management(policy execution)

Org

aniz

atio

nal l

evel

Functions in organization

Top

2. Administration is a part of management: According to second view EFL Brech and other , management is comprehensive generic term which includes Administration . Management as comprehensive generic function embracing the entire process of PLANNING,ORGANISING,DIRECTING and CONTROLLING.

Administration is only a branch of management. Which encompasses two of its functions Planning and controlling

3.Mangement and administration are same: According

to another view expressed by Peter drucker the basic difference b/w Management &Administration lies in the use of these words .

The governance of non business institution (govt., army, church) is generally called Administration.

While governance of business enterprises called as Management.

economic performance is chief dimension

Lower

Administration(policy formulation)

Management(policy execution)

Leve

ls o

f man

agem

ent

Management functions

Top

Middle

Management functions at different level

Management skills

HENRI FAYOL identified three basic kind of skills

Every manager needs all three.

1. Technical skill: The ability to use the procedures, techniques , and knowledge of a specialized field.

2. Human skill : The ability to work with, understand, and motivate other people as individuals or in groups.

3.Conceptual skill : The ability to coordinate and integrate all of an organization's interests and activities

Levels of management

It is differentiation of managers in to three basic categories –

1.First line managers: manage work of non managerial employees . First line managers are generally called as supervisors but may be also be called as shift managers ,district managers, department managers or office managers.

2. Middle managers :are those found between the lowest and top levels of the organization . These managers manage the work of first line managers and may have titles as regional managers , Project leader , store manager , or division manager.

3. Top managers : Top managers are responsible for making organization wide decisions and establishing the plans and goals that affect the entire organization. E.g. executive vice president ,president, managing director , chief operating officer

TOP MANAGERS

MIDDLE MANAGERS

FIRST-LINE MANAGERS

MARKE

TING

FINA

NCE

OPER

ATIO

NS

HUMAN

RESOURCE

SADMINISTRA

TION

OTHE

RS

AREAS OF MANGEMENT

Levels of Management

ORGANIZATIONAL LEVELS

TOP

MIDDLE

SUPERVISOARY

HUMAN

TECHNICAL

CONCEPTUAL

Knowledge and skills requiredKnowledge and skills required for management vary with the org .levels

QUALITIES OF MANAGER1.Good Communicator The ability to communicate with people at all

levels is almost always named as the most important skill by managers and team members. leadership calls for clear communication about goals, responsibility, performance, expectations and feedback.

2.Integrity One of the most important things a manager is that his or her

actions, and not words, set the modus operandi for the team. Good manager demands commitment to, and demonstration of, ethical practices. Creating standards for ethical behavior for oneself and living by these standards, as well as rewarding those who exemplify these practices. integrity represents nothing less than a set of values others share, behavior consistent with values and dedication to honesty with self and team members. In other words the leader "walks the talk" and in the process earns trust.

3. Enthusiasm : Plain and simple, we don't like manager who are

negative - they bring us down. We want leaders with enthusiasm, with a bounce in their step, with a can-do attitude. we want to feel alive. We tend to follow people with a can-do attitude, not those who give us 200 reasons why something can't be done. Enthusiastic leaders are committed to their goals and express this commitment through optimism.

4.Empathy: What is the difference between empathy and

sympathy? in sympathy the subject is principally absorbed in his or her own feelings as they are projected into the object and has little concern for the reality and validity of the object's special experience. Empathy, on the other hand, presupposes the existence of the object as a separate individual, entitled to his or her own feelings, ideas and emotional history.

5.Ability to Delegate TasksTrust is an essential element in the relationship

of a manager and his or her team. You demonstrate your trust in others through your actions - how much you check and control their work, how much you delegate and how much you allow people to participate. Individuals who are unable to trust other people often fail as manager .

6. Cool Under Pressure In a perfect world, task would be delivered on

time, under budget and with no major problems or obstacles to overcome. But we don't live in a perfect world . A manager with a hardy attitude will take these problems in stride. When leaders encounter a stressful event.

7. A good listener: Working with a team means that you need to

understand the attitudes of your employees. Try to understand their motivations and in case of problems try to find solutions for their problems. A good listener is always someone who has an open mind for suggestions of employees of his team.

8. Self confidence: Believe in yourself and your capacities. Don't

become nervous when something fails and be optimistic for your next plans. Try to avoid stress and don't fear that you can't reach your goals.

9. Flexibility and patience: A good manager needs to give commands about the

necessary tasks but it is important that you are flexible with your team. Give your employees the possibility to give their opinion how the work will be executed.

Flexibility means that there is a possibility of making an agreement. Don't take an attitude that you are the boss and only you know the right decisions. Give your employees the necessary time for their work. Patience is the key to have success!

10.Problem Solving Skills Although an effective manager is said to share

problem-solving responsibilities with the team, we expect manager to have excellent problem-solving skills themselves.

11. Team-Building Skills: A manager provides the environment that holds the

team together in common purpose . In order for a team to progress from a group of strangers to a single cohesive unit, the manager must understand the process and dynamics required for this transformation. He or she must also know the appropriate leadership style to use during each stage of team development. The leader must also have an understanding of the different team players styles and how to capitalize on each at the proper time, for the problem at hand.

Evolution of managementThe period between 1700 and 1850 highlights the

industrial revolution and writings of the classical economist .

Adam smith wealth of nation (1937) –division of labour .

Turgout explained importance of direction and control (reflections of on the formation and distribution of riches 1922)

Jeans say -importance of planning

Early writing

Sun Tzu's The Art of War

Written by Chinese general Sun Tzu in the 6th century BC, The Art of War is a military strategy book that, for managerial purposes, recommends being aware of and acting on strengths and weaknesses of both a manager's organization

Niccolò Machiavelli's The Prince Believing that people were motivated by self-interest,

Niccolò Machiavelli wrote The Prince in 1513 as advice for the leadership of Florence, Italy.[5] Machiavelli recommended that leaders use fear—but not hatred—to maintain control.

Evolution of Modern Management Began in the industrial revolution in the late 19th

century as:Managers of organizations began seeking ways to better

satisfy customer needs. Large-scale mechanized manufacturing began to supplanting

small-scale craft production in the ways in which goods were produced.

Social problems developed in the large groups of workers employed under the factory system.

Managers began to focus on increasing the efficiency of the worker-task mix.

The evolution of management thought can be studied in three part as under

1.Early classical approaches :represented by scientific management , administrative management and bureaucracy

2.neo-classical approaches: represented by human relations movement and behavioral approach.

3. Modern approaches: represented by quantitative approach, systems approach and contingency approach.

Figur 2.1Source:

Job Specialization and the Division of LaborAdam Smith (18th century economist)

Observed that firms manufactured pins in one of two different ways:

Craft-style—each worker did all steps. Production—each worker specialized in one step.

Realized that job specialization resulted in much higher efficiency and productivity

Breaking down the total job allowed for the division of labor in which workers became very skilled at their specific tasks.

Scientific management : F.W. Taylor(1856-1915)

Father of scientific management(26 years span)Work in three company –midavel steel , simonds

and rolling machines and Bethlehem steel. contribution of f.w.taylor1. time motion study: replaced the old rule of

thumb knowledge of work man. Each motion of a job was to be timed with the help of stop watch and shorter and the fewer motion were to be developed.

F.W.TAYLOR (1856-1915)FATHER OF SCIENTIFIC MANAGEMENT

Maximize worker capacity and profitsPROBLEM: Get employees to work at their maximum capacityPRIMARY FOCUS: TASKS

2. Differential payment: Taylor introduced a new payment plan called differential piece work , in which he linked incentives with production. a worker receive low piece rate if he produce a standard number of piece and high rate if he surpasses standard.

3. Drastic reorganization of supervision: Taylor suggested two new concepts

(i)Separation of planning and doing(ii)Functional foremanship

4.Sientific recruitment and training :Taylor emphasized the need for scientific selection and development of worker.

5. Intimate friendly cooperation between Management and Workers : “a complete mental revolution” on the part of management and labour was required.

Taylor believed that management and labour had a common interest in increasing productivity.

After Taylor –Henry Gantt and gilbreth contributed to scientific management

Gantt: 1.correct methods and skills are important 2.saw importance of human factor in

productivity and propound the concept of motivation as we understand it today

3. introduced two new features in taylor’s incentive scheme.

( a) a worker who finished a day’s assigned workload was to win 50%bonus for that day.

(b) the foreman too was earn bonus for each who reached the daily standard.

Gantt also developed the idea of rating an employee’s work publicly. every works progress recorded on individual bar chart and inked in black on days he or she completed the standard and in red on days he and she fell below.

This system is called as “Gantt chart” is still in use today

Frank and Lillian Gilbreth

Contributed to scientific management movement as a husband and wife team.

Made motion and fatigue studyClassified all movements employed in industrial

work in to 17 basic type called “therbligs”.According to gilbreths, motion and fatigue studies

raised workers morale , not only because of their physical benefits but also because they demonstrated management concern for the worker.

Contribution of scientific management

1.Time and motion study made us, aware that the tools and physical movements involved in a task can be made more efficient and rational .

2.Scientific management stressed on scientific selection of workers , it has made us recognize that without ability and training a person can not be expected to do his job properly.

3.Scientific management gave importance to work design encouraged manager to seek that “one best way” of doing a job.

scientific management not only developed a rational approach to solving a problems but also contributed a great deal to the professionalization of management.

Criticism of Scientific Management 1.Taylor’s belief that economic incentives are strong

enough to motivate workers for increased production

proved wrong. No man is entirely an “economic man”2. taylor’s time and motion study is not accepted as entirely

scientific. This is because two time studies done by two separate individuals may time the same job entirely differently.

3. Separation of planning and doing and greater specialization inherent in the system tended to reduced the need for skill and produce greater monopoly of work. Taking order form 7to8 bosses resulted in confusion .

4 Advances in methods and better tools and machines eliminate some workers.

Taylor’s Theory of Scientific ManagementTaylor’s Theory of Scientific Management

Application in the Modern WorkplaceApplication in the Modern Workplace Assembly Line Plants as Prototypical Examples “Prisoners of Taylorism” System of Remuneration (quotas - commission) Re-Design - Reengineering Benchmarking Data are used to refine, improve, change, modify, and

eliminate organizational processes

Administrative Management

Henry fayol(1841-1925) father of administrative management .He was a French mining engineer turned a leading industrialist and

successful manager.Fayol developed broad administrative principles applicable to general

and higher level managerial levels.He written a book “general and industrial administration" in 1916.Translated in English in 1929.Fayol provided broader analytical framework of process of

administration.His perspective ,unlike the taylor extended beyond the shop level

and physical production process and was of macro nature covering the general administrative and managerial functions and process at organizational level.

Henry fayol (1841-1925)

Father of administrative management

Fayol divided activities in to six groups: technical, commercial, financial, accounting, security and administrative or managerial

Fayol defined management in to five functions : planning organizing commending coordinating and controlling

Fayol presented 14 principles of management

Fayol presented 14 principles of management

1.Division of work: Division of work in the management process can produces more and better work with the same efforts. Various function of management can not be performed efficiently by a single proprietors or by a group of directors. they must be entrusted to specialists in related field.

2. Discipline: the obedience to authority ,observance of the rules, service and norms of performance respect for agreements, sincere efforts for given jobs respect for superiors etc means to maintain discipline .

a. good supervision at all level b. clear and fair agreement b/w the employees and employer. c. Judicious application of penalties

3.Authority and responsibility: manager should have the right to give orders and power to exact obedience. A manager may exercise forma authority and personal power.

Responsibility is closely associated with authority.4. Unity of commend: each employee should receive

instructions about a particular work from one superior only.

5.Unity of direction: It means there should be complete identity b/w individual and organizational goals on the one hand and b/w departmental goals on other hand.

6. Subordination of individual interests to general interest :

7. Remuneration: The remuneration paid to the personnel of the firm should be fair. It should be based on general business conduct, cost of living ,productivity of concern employees and capacity of firm to pay.

8. Centralization: if subordinates are given more role and importance in the management and organization of the firm , it is decentralization. Management must decide the degree of centralization or decentralization of authority on the basis of nature of circumstances , size of undertaking, the type of activities and the nature of the organization.

9.Scalar chain :scalar chain means the hierarchy of authority from the highest executive to the lowest one. It states the superiors subordinates relationship and authority of superiors in relation to subordinates at various levels. as per this principle , the orders or communication should pass through the proper channels of authority along the scalar chain. But in case there is need for swift action , the proper channels of authority may be short circuited by making direct contact (called gang plank) with the concerned authority

10. Order: To put things in order need efforts .Management should obtain orderliness in work through suitable organization of men and materials. The principle of “right place for every thing and every man” should be observed by the management. To observe this principle there is need for scientific selection of competent personnel, correct assignment of duties to personnel and good organization

11. Equity: equity means equality of fair treatment. Employee expect management to be equally to every body. Equity ensures healthy industrial relations b/w management and labour which is essential for the successful working of the enterprises .

12.Satbility of tenure of personnel: In order to motivate workers to do more and better work it is necessary that they should be assured security of job by the management .

13. Initiative: initiative means to think out and execute plan. Zeal and energy of employees are augmented by initiative . Innovation is possible only where the employees are encouraged to take initiative.

14. Esprit the corps: This means team spirit. “union is strength”

Management should create the team spirit among the employee.

Contribution of administrative management 1.There should be clear line of authority , from the top

management down to lowest employee. 2.Authority and responsibility of each employees should be

communicated to him in writing.3 .Each individual should perform one function only.4.The span of control of a manager should never exceed

six.5.Authority can be delegated but not responsibility

Other scholars contribution to administrative management:

James D. mooney and Alan c. railey- two general motors executive wrote a book “on ward industry”1931 later renamed “principle of organization”

colonelL.Urick of u.k. wrote a book “The elements of administration". in this book he assemble the concept and principle of taylor, fayol, mooney, raily and other early scholars of management

Criticism of fayol’s principles1 many of fayols principles are contradictory and there is nothing in

fayols writing to indicate which one is to apply.(simon-administrative behavior)

2 These principles are based on few case studies only and have not been tested empirically.

3 These principles are stated as unconditional statements of what to be done in all circumstances.

4 These principles (chain of command , unity of direction, and span of control) result in to formation of mechanistic organization structure , insensitive to employees social and psychological needs .

5 Principle are based on that organization is a close system .but organizations are open system

Bureaucracy: Max weber Max weber a German sociologist, is know as the

father of bureaucracy. About 1910 he made a study of different types of business and

govt. organizations and distinguish 3 basic types of administration: Leader oriented.

Tradition oriented

bureaucratic.He has written book the theory of social and

economic organization

21 April 1864 - 14 June 1920

Max weber-father of bureaucracy

Important features of bureaucratic administration1.There is insistence on following standard rules : Weber believed that the authority in an organization should not

be governed by the personal preferences of the employer but it should governed by standard rules. this provide equality in treatment of subordinates and continuity and predictability of action .

2. There is a systematic division of work : 3. Principle of hierarchy is followed: Each lower officer is

under control and supervision of a higher one.4. It is necessary for the individual to have knowledge of

and training in the application of rules: b/c these forms the basis on which legitimacy is granted to his authority

5.Administrative act , decisions and rules are recorded in writing: this makes the organization independent of people besides making people’s understanding more accurate.

6.There is rational Personnel Administration: people are selected on the basis of their qualities and paid according to their positions in the hierarchy. promotion are made systematically . There is an emphasis on wining people's loyalty and commitment .

EXHIBIT 2.4: WEBER’S IDEAL BUREAUCRACY

2-12

Limitations of Bureaucracy1. Over conformity to rules:2. Buck (responsibility)passing:3. Categorization of queries:4. Displacements of goals:5. No real right to appeal:6. Neglect of informal group7. Rigid structure8. Inability to satisfy the needs of mature

individuals

Neo classical approaches THE HUMAN RELATION MOVEMETThe human relation movement emerged in part because

managers found that Taylor's scientific management and fayol’s administrative management did not quiet achieve complete production efficiency and work place harmony. Managers still feel difficulties because employees did not always follow predicted or rational pattern of behavior.

Starts looking on “People side” of their organization.

Elton Mayo

Organizational Behavior (cont.) Hawthorne Studies

- started in 1924 at Western Electric Company • began with illumination studies • intensity of illumination not related to

productivity

- Elton Mayo - studies of job design • revealed the importance of social norms as determinants of individual work behavior - changed the dominant view that employees were no different from any other machines

2-16

Prof.Elton mayo and his colleagues at western electric company plant from 1927 to 1932 performed experiments. Known as Hawthorne experiments.

We can divide these experiments in to four parts1.Illumination experiments2.Relay assembly test room3.Interviewing programme4. Bank wiring test room

1.Illumination experiments:

This was the first phase of study. in this phase popular belief that the productivity is positively correlated with illumination was tested.

they form 2 groups of worker in different building. one group called worker worked under constant level of illumination and other group called test group called as test group worked under changing levels of illumination.

Post test productivity of two groups was than compared it was found that illumination affected production only marginally.

2.Relay assembly test room

In this phase object of study was broadened. it now aimed at knowing not only the impact of illumination on production but also other factors as length of working day , rest pause, their frequency and duration and other physical conditions .

A group of 6 women workers , who were friendly to each other, was selected for this experiment. the supervisor and researchers acted as their friend, philosopher and guide . During the study, several variation were made in working conditions to find which combination of conditions was most ideal for production.

Surprisingly, the researchers found that production has no relation with working conditions.

Researcher attributed this phenomena to the following factors:

1.Feeling of importance among the girls as a result of their participation in the research and the attention they got .

2 warm informality in the small group and tension free interpersonal and social relations as a result of relative freedom from supervision and rules.

3 high group cohesion among the girls.

3.Interviewing programme

The knowledge about informal group process which was accidentally acquired in the second phase made researcher design the third phase. They wanted to know , what were the basic factors responsible for human behavior at work.

They interview 20000 workers .at first , direct questions were asked related to working conditions , supervision, living conditions etc. secondly workers were free to talk about their favorite topics related to their work environment. This study reveled that the workers social relations inside the organization had an influence on their attitudes and behaviors.

4. Bank wiring test roomThis phase involved in depth observations of 14

men making terminal banks of telephones wiring assembly., to determine informal group norms and formal economic incentives on production.

It was found that the group evolved it own production norms. Informal group and their influence on production.

Rate busters :produced more than group normsRate chisellers : too slow in productionSquealers :those complaint to the supervisor

against there co-worker.

Contribution of human relation movement1. A business organization is not only a techno

economic system but also a social system. It is important to provide social satisfaction to the workers.

2. There is no correlation b/w improved working conditions and high production.

3. A workers production norms is set and enforced by his group and not only by time and motion study done by any industrial engineer. Those who deviate from group norm are penalized by their co-workers

4. Worker does not work for money only. Non financial rewards also significantly affect the his behavior and largely limit the effect of economic incentive plan.

5. Employee centric, democratic and participative style of management of supervisory leadership is more effective than task -centric leadership.

6. The informal group and not the individual is dominate unit of analysis in organization.

Limitations1. Human relation writers saw only the human variable as critical

and ignored other variables.2. They believe that organization can be turned in to big happy

family where it is always possible to find a solution which can be satisfies everybody is not correct.

3. This approach provides an unrealistic picture about informal groups by describing them as a major source of satisfaction for industrial worker .(Robert dubin :industrial workers world : a study of central life interests of industrial workers, social problem).

4. This approach is production oriented and not employee oriented as it claims.

5. This approach is based on a wrong assumption that satisfied workers are more productive worker.

Social System ApproachSocial system approach of management has extended the

implication of human relation approach.Approach was introduced by vilfredo pareto, a sociologist.His idea was later developed by Chester Barnard as concept of

social system approach. Written book “the function of executive”

An organization is essentially a cultural system composed of people who work in cooperation

a cooperative system can be developed by understanding the behavior of people in groups .

Features of social system approach

1.organization is a social system , a system of cultural relationships.

2. Relationship exist among the external as well as internal environment of the organization.

3.Coopration among the group member is necessary for the achievement of organizational objectives.

4. For effective management , efforts should be made for establishing harmony b/w the goals of the organization and various groups therein .

Chester barnard

SOCIAL SYSTEM APPROACH Contd…•Contributors –Pareto, Chester Barnard•Uses –Organizational decisions should not be based on

desires of one group alone but should reflect the interests of all the parties.

•Limitations –Broader than management & its practice –Overlooks many management concepts principles &

techniques that are important to practising managers.

DECISION THEORY APPROACH •Manager – Decision maker •Organization–Decision making unit.•Features –Management is decision making. –Members of Organisation -decision makers and

problem solvers. –Decision making -control point in management –Increasing efficiency -the quality of decision –MIS, process & techniques of decision making are the

subject matter of study.

DECISION THEORY APPROACH

•Contributors –Simon, Forrester, etc.•Uses –Tools for making suitable decisions in

organizations.•Limitation –Does not take the total view of management –Decision making -one aspect of management

WHAT IS ETHICS? Ethics is a set of rules that define right and

wrong conduct. Ethical rules tell us when our behavior is

acceptable and when it is disapproved and considered to be wrong.

Ethical rules are guides to moral behavior. For many, religious beliefs and organizations

are a major source of ethical guidance and moral meaning.

WHAT IS BUSINESS ETHICS?

Business ethics is the application of general ethical rules to business behavior.

Global Ethical IssuesWages and hours

Child labour

Discrimination

Legal and ethical business practices

Product safety and quality

Environment

IMPORTANCE OF ETHICS FOR MANAGER(i) Business is the part of the society . Social values must become the guiding

principles for doing business.(ii) When an organization fails to behave in accordance with the society’s

expectations , it may lose its image, market share and its very right to exists.(iii) Manager is expected to serve as a trustee of various interest groups such as

customers , workers, shareholders and suppliers.(iv) Consumers are no longer on the mercy of business firm . They have

powerful organized association to discipline the business firms . To avoid any confrontation with the consumer associations, it is advisable for

business firm to follow ethical practices.(v)Various law reflect the ethics of society . If a business is not ethical , it will

attract the intervention of government.(vi) For every manager , job is the center of life. Job values must be in harmony

with social values if manager is to live happily

Tools for promoting ethical practicesIn small organization it is simple to decide on ethical issue and follow them.In large organizations which have multilevel and multilevel operations and involve

a huge and diverse work force , maintaining ethical practice is a complex task.

Managerial tools 1 Establishment of mission statement2 laying down core values 3 formulating business policies and procedures4 Formulating code of conduct for business 5 Establishing grievance handling mechanism6 Ethical dilemma workshops.

1 Establishment of mission statement : statement clearly states “what business want to be”. Mission statement clarifies as to where all other policies of org. should be directed.

2 laying down core values: core values of the organization are based on its vision and mission .examples of core values are :impartiality , technical excellence, respect , honesty etc

Disney’ theme park core values are :safety , show and efficency.

Corporate social responsibilityWhat an organization does to influence the society in which it exists ?“The assumption of social responsibilities by the business implies recognition

and understanding of aspirations of the society and determination to contribute to its achievement”------ Geroge A Stteiner

Social responsibility of business means obligation to act in a manner which will serve the best interest of society

it is different from legal obligation --- it relates to voluntary effortsE.g.– TISCO set up Tata steel Rural Development Society Finolex Hope foundation Nokia contract with luxer for recycle pen Aircel – Save our Tiger

Charity principle : Doctrine of social responsibility requires more fortunate individual to assist less fortunate members of society.

Tata memorial hospitals , Birla mandir

Stewardship principle : Doctrine that requires business and wealthy individuals to view themselves as steward or caretakers holding their property in trust for benefit of society.

Why social responsibility? Business primary responsibility to maximize profit?(i) Social entity : Business is creation of society and so it should respond to the demands

of society. i.e. resources, (ii) Moral justification : Every business use capital , Physical and human resources of the

society for achieving its purpose . It also dependent on the society for the acceptance of its output or goods or services. Business firms also use various social infrastructure like roads , power and water supply etc.

(iii) Public image : (iv) Avoidance of govt. interventions:(v) consumer Awareness:

Social responsibility towards different interest groups1. Responsibility towards owners or Investors: The owners and investors provide

funds to business . They expect high rate of return on investment . (a) To ensure faire and regular return on investment of owner or shareholder.(b) To ensure safety of investment(c) To strengthen financial position of company so as to ensure capital of

company.(d) To keep owner well informed about the progress and financial position of the

company(e) To safe guard the asset of business .(f) To protect the interests of all type of investors in business .2. Responsibilities towards Employees : worker are source of labour. Their

cooperation must be achieved for realization of business objectives. The manager/ management should fulfill following obligation towards the workers:

(a) To pay reasonable wages and salaries to its employees so that they may satisfy their needs and live a good life.

(b) To provide good working conditions to maintain the health of the workers.

(c)To provide service benefits such as housing and medical facilities, insurance etc(d) To win cooperation of workers by creating better human relations .(e) To recognize workers participation in management(f) To provide adequate opportunities to workers to develop their skills through training

and education.3 Responsibilities towards customers: Customers satisfaction is ultimate aim of all

business activities. This is more than offer a product at lower price. Adulteration of goods, poor quality , lack of service and courtesy to customer , misleading through dishonest advertisements etc.

(a)To produce goods which meet the needs of the consumers of different classes, tastes and with different purchasing power.

(b) To provide goods to customers at reasonable prices .(c) To handle customer’s grievances quickly and carefully.(d)To ensure regular supply of goods and services.(f) To ensure that advertisement and other statements issued by the business are

truthful.(g) To follow fair trade practices.

4. Responsibilities toward suppliers: Management should deal with suppliers judiciously. It should offer fair terms and conditions regarding price, quality , delivery of goods and payments. In the absence of fair dealing , suppliers will not supply them the goods on credits.

(a) To ensure regular payments to suppliers .(b) To assist small scale suppliers by placing orders with them .(c) To avoid exploitation of the suppliers.(d) To help the suppliers in improving the quality of their products .5. Responsibility towards government : (a) To abide by the law of the nation and also the policies or guidelines issued by the

government.(b) To pay taxes honestly and in time to government(c) To avoid corrupting government employees.(d) To encourage fair trade practices in country.(f) To adopt fair dealing in foreign trade.6. Responsibility towards community and society : (a) To work for improvement of environment where the plant is located.(b)To provide for welfare of local community through opening dispensaries- swarnjayanty H(c)To take step against air , water and noise pollution.(d)To ensure efficient use of national resources.

(e)To generate employment opportunity.(f) To provide high quality product to society (g)To improve the quality of life of worker s.(h)To preserve and promote social and cultural values .(i)To promote national integration

Corporate social responsiveness : a theory of social responsibilities that focus on how company respond to issues , rather than trying to determine their ultimate social responsibility

Two approaches 1. how to individual company respond to social issues 2 dealing with the forces that determine social issues to which business has to

respondedAckerman was among the first to suggest that responsiveness not responsibility should be the goal

of corporate social endeavors. Corporate response to social issue has a life cycle

corporate recognition of problem Study of problem Considering the way to deal with it

Implementation of solutions