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BLOCK INTRODUCTION
Efficient management of human resources and physical resources is very
important for the accomplishment of objectives of any organisation. Todaysmanagers are required to use professional skills for greater effectiveness. These
skills can be acquired by studying the management science and practising the
principles of management. This book is an attempt to provide an effective aid to
the development of an undertaking of the basic concepts that relate to the
practice of management in all kinds of organised endeavour.
This book contains nine units. The first two units discuss the nature and the
history of management thought. The last seven units deal with the functions of
management viz., Planning, Decision-making, Organising, Staffing, Selection,
Direction, Co-ordination and Control.
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Brig. (Dr.) R. S. Grewal VSM (Retd.)Pro Vice ChancellorSikkim Manipal University of Health, Medical & Technological Sciences
Advisory Board
1. Dr. Janardan Jha2. Dr. N. Chandrasekar3. Prof. S. R. Bhillar4. Prof. B. S. Sharma5. Sri Pramod Khera6. Major Sushil Goel7. H. N. Udupa, Associate Professor
Content Preparation Team
Content Writing/Compilation
Mr. Umesh MaiyaAssistant ProfessorSikkim Manipal UniversityManipal
Content and Language Editing
Dr. Janardan JhaSenior Vice PresidentManipal Universal Learning Pvt. Ltd.Manipal 576 104
Mr. H. Nagaraja UdupaCo-ordinator
Sikkim Manipal UniversityManipal
Edition: June 2003
Reprinted for Spring 2008
This book is a distance education module comprising of written and collated learningmaterial for our students.
All rights reserved. No part of this work may be reproduced in any form by any meanswithout permission in writing from Sikkim Manipal University of Health, Medical andTechnological Sciences, Gangtok, Sikkim.
Printed and Published on behalf of Sikkim Manipal University of Health, Medical andTechnological Sciences, Gangtok, Sikkim by Mr. Rajkumar Mascreen, GM, ManipalUniversal Learning Pvt. Ltd., Manipal 576 104. Printed at Manipal Press Limited,Manipal.
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BB 0031
Management Development
Contents
Unit 1
Management 1
Unit 2
Evolution of Management 17
Unit 3
Planning 48
Unit 4
Decision Making 64
Unit 5
Organising 73
Unit 6
Staffing 100
Unit 7
Selection 110
Unit 8
Direction and Co-ordination 118
Unit 9
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Management Unit 1
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Unit 1 Management
Structure
1.1 Introduction
1.2 Meaning
1.3 Definitions of Management
1.4 Features of Management
1.5 Levels of Management
1.6 Management as a Profession
1.7 Management as Science
1.8 Management as an Art
1.9 Managerial roles
1.10 Exercise
1.1 Introduction
A Business is comprised of 7 elements popularly known as 7 Ms. They are Men,
Materials, Money, Machines, Methods, Market and Management. Among these
elements Management is the most important because all other elements are
determined and controlled by it.
1.2 Meaning
Management is the activity for getting things done by others. For this it is
necessary to guide, direct, co-ordinate and to control human efforts towards the
fulfillment of certain common goals. Management represents that skill which
directs, regulates and integrates human efforts in the discharge of all operations
required for an enterprise. Management is like a pipeline, the inputs are fed at
one end and they are processed through management functions like planning,
organising, directing, controlling and ultimately we get the end result or output in
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the form of goods and services, profit, productivity; satisfaction etc. This can be
seen in the following chart:
Management Profits
Men Goods &
Input Materials Management Services Output
Money Productivity
Machines Satisfaction
Methods
Market
1.3 Defin itions of Management
1) F. W. Taylor Management is an art of knowing exactly what you want men
to do and than seeing that it is done in the best and cheapest way.
Managers according to Taylor should secure the maximum from men;
materials, machines and money. He stressed on knowing the job and doing
it in the best way. He has not given much importance to men because of
which he was criticised by many.
2) Henry Fayol To manage is to forecast and to plan, to organise, to
command, to co-ordination and to control.
This definition has mentioned the functions of management for achieving
desired results. According to Fayol, Management is the process of
planning, organising , commanding, co-ordinating and controlling.
3) Ralph C. Davis Management is the function of executive leadership.
4) Donald J. Clough Management is the art and science of decision making
and leadership.
Both these definitions speaks on managers responsibility of taking
decisions and directing the activity of others.
Planning Organising
DirectingCo-ordinating
Control-ling
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5) Lawrence W. Apley Management is the development of people and not
direction of things.
This definition says that people give their best when they are developed
rather than when they are ordered to do this or that.
The above definitions may reflect different approaches but do not run
counter to each other. No single definition can give the exact and complete
meaning of management.
Management today is facing many challenges and its job has become more
complex due to pressures from internal as well as external environment.
The demands of the employees, share holders, customers and the
Government put pressures on management. In such a situation
management becomes a function of four Ps. They are Productivity, People,
Profit and Public Responsibility.
1.4 Features of Management
The analysis of the above definitions brings out the following features of
management.
1) Management is a Process: It is the process of planning, organising,
directing, co-ordinating and controlling. These functions should be
performed continuously and simultaneously. The manager acts by assuming
authority, expecting responsibility, delegating authority and establishing
accountability for actions of individuals within the organisation. He brings
together men, materials, machines and money and makes the best use of
these resources for the benefit of the entire organisation.
2) It is a Social Process: Managers job is to get things done by others.
People cannot be ignored in an organisation because they have been
described as the means to achieve the ends of the organisation. Thus
management is a social process.
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3) Management involves Team Efforts: Management utilises team efforts to
achieve the goals of the organisation. The manager alone cannot fulfill the
objectives of the organisation. He needs the help of his employees.
4) It aims at Achieving Pre-determined Objectives: All organisations are
groups of individuals formed for achieving common objectives. Once the
organisation comes into existence it is for the realisation of some definite
objectives which may be expressed or implied. The objectives are
determined by administration.
5) It is a Distinct Activity:A good manager does not believe in doing work for
himself but in getting things done by others. Thus management is a distinct
type of work.
6) Management is a Multi-disciplinary Subject: The discipline of
Management depends upon many other subjects like Sociology,
Psychology, Economics, Mathematics, Statistics etc.
7) Co-ordination is the essence of Management: Co-ordination is an
important function of management. A successful manager has to co-
ordinate individual and departmental activities in such a way so as to
achieve common objectives.
8) Management is a system of authority: Management is a rule making and
rule enforcing body. As superior subordinate relationship is existing in an
enterprise management becomes a system of authority.
9) Management is required at all levels: The manager is to perform the
same functions at all levels of the organisation. Whether it is top level,
middle level or lower level the functions performed are the same. In all the
situations getting things done by other calls for decision making. Of course
managers at the top level make more important decisions than the
managers at other levels.
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10) Management is essentially a human activ ity: An individual makes use of
the technique developed by Management to achieve certain objectives such
as best use of time, energy, money and other resources but ultimately the
analysis of the situation is to be done by the manager.
11) Management is a Profession: Management is backed by a systematic
body of knowledge. A number of principles have been developed which
needs proper training and education. Thus management to some extent is
being developed as a profession.
12) Management is an art as well as Science: Management is an art because
desired results can be secured by the application of skills.
Management is also a science because it has a body of organised
knowledge relating to planning, organising, directing, and controlling. With
the help of this management can take sure decisions and avoid chance
decisions.
1.5 Levels of Management
In any company of any size it is humanly impossible for one individual to do
justice to the multifarious activities and complex demand of both management
and the people in and outside the business. Therefore authority has to be
delegated and responsibility diversified as management believes in getting work
done by others. This builds up the superior subordinate relationship and the
managerial hierarchy.
Knootz O Donell have classified management into two level i.e. (1) Top level
(2) Supervisory level.
Some have divided management into 5 levels namely
(1) Top level
(2) Upper middle level(3) Middle level
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(4) Lower level and
(5) Operating level or frontline.
However generally speaking management has 3 levels i.e.
(1) Top Level: Which determines the objectives and policies.
(2) Middle Level: Concerned with implementation of the policies.
(3) Lower Level:Actively assisting in the achievement of the goal.
The number of levels of management is not rigid. It can be increased but not to
an unlimited extent because creation of each level complicates the problem of
co-ordination, communication, control and adds to the cost of management.
However the span of control should not be widened to restrict the number of
managerial levels. The following diagram shows various levels of management.
Manager
(Personnel Dept.)
Board of Director
Managing Director
General Manager
Manager
(Production Dept.)
Manager
(Marketing Dept.)
Assistant Manager
Heads of variousSection
Supervisors
Workers
Assistant Manager Assistant Manager
Superintendent ofProduction
Foremen
Workers
Branch Manager
Sales Officers
Workers
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Top Level Management
It is the head of the organisation. It consist of Board of Directors, Chief
executives, Managing Directors and the General Managers. They are the
ultimate source of authority. They set the goals, establish the policies, see that
the policies are put into effect and analyse the results. It performs all the
management functions but spend more time on planning and organising than
other two levels.
The policies and objectives of the company are framed and setup by the board of
directors. But the directors are not the people who will implement their own
policies. Therefore this task is entrusted to the managing director or general
manager who is the chief executive. The chief executive issues necessary ordersand instructions to the subordinate and from time to time he will see that the
directors policies are properly implemented so as to achieve companys
objectives. He is directly accountable to the Board of directors. He has to answer
them about the results of the company and present proper books of accounts
when needed. Thus he is the liaison officer between the director and the rest of
the company.
Functions: Main functions of top level Management are:
1) Determine Objectives: They decide both the general objectives and specific
objectives of the company.
2) Frame the Policies: They have to develop the policies and plans to carry out
the objectives. They have to achieve the objectives also.
3) Setting up Organisational Structure: They also determine the structure of
the organisation for the execution of plans.
4) Assemble the Resources: They bring together men, materials, machines
and money.
5) Control the Operation: Control are administered by top level managementin the form of budgets, statistical quality control and accounting devices.
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Middle Level Management: This level is concerned with the task of
implementing the policies and plans prepared by the top level management.
They act with and under top management for achievement of objectives. It
includes heads of various departments and other executive officers attached to
different departments. They take instructions from Top Management and direct
and guide the supervisors under their charge. They receive pressures from three
sides i.e. from top management in the form of orders, from below who press for
correct decision and from his colleagues in other departments which are
interrelated to some extent. They are concerned with the results of their
department for performing their task. They should have human relation skill.
Functions: Mary C. Niles in her book Middle Level Management, has laid down
the following functions.
1) To run the details of the organisation leaving the top executives as free as
possible.
2) To Co-operate in building a smoothly functioning organisation.
3) To understand the interdependence of departments.
4) To achieve the Co-ordination between different parts of organisation to build
up a continued and efficient staff.
5) To develop leaders for the future.
6) To build team spirit where all are working to provide a product or service
wanted by the society.
Lower Level Management: They are a link between the management and
workers. They implement the policies of top management communicated to them
by middle level management. Their main work is to get the actual work done.
They deal with people of the company and internal working arrangement. They
provide a final and finishing touch to the policies and plans of the top
management. They are more concerned with direction and control functions of
management. So they should possess more of technical skill than other levels.
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Functions:
1) To issue orders and instructions to the workers and supervise and control.
2) To plan the activities of the section.
3) To arrange for the necessary equipments, materials, tools etc.
4) To provide on-the-job training.
5) To look after the proper maintenance of tools and machinery.
6) To solve the problem of workers.
7) To communicate the problem of workers.
8) To maintain discipline and right approach for work.
9) To act as liaison officer between management and workers.
10) To build team spirit.
11) To maintain good human relation.
The following diagram shows the functions to be performed and skills needed by
different levels of management.
Conclusion:
Top Level
Middle Level
Lower Level
Planning
Organising
Directing
Controlling
Top Level
Middle Level
Lower Level
Conceptual
Skills
TechnicalSkills
HumanRelations
Skills
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Managers of all levels perform the same management functions i.e. planning,
organising, directing and controlling. But the difference lies in the emphasis. Top
management spents more time in planning and organising, the middle
management and the lower management in directing and controlling the workers.
1.6 Management as a Profession
It is very difficult to answer the question Is Management a Profession ?
because there is no universally accepted definition of the term profession and
the roles of the managers are extremely diverse.
A profession is much more than a career which denotes merely the way of
making a livelihood. It is also different from trade which represents a mercantile
employment for profit. It is also distinct from occupation which is merely
engaging ones time. The term profession is an activity which involves earning of
a distinct intellectual quality. It can be defined as an occupation for which
specialised skills and training are required and the use of these skills is not
meant for self satisfaction, but are used for the larger interest of the society and
the success of these skills is measured not in terms of money alone.
Andrews has laid down five criteria for judging whether a field of activity is a
profession. They are:
1) Knowledge: Existence of an organised and systematic knowledge.
2) Competent Application: Skilled and judicious utilisation of knowledge which
are acquired by training and experience.
3) Social Responsibility: Primarily motivated by the desire to serve others and
the community rather than monetary reward.
4) Self Control: Existence of an association with professionalization as its goal
which formulates ethical codes for guidance of conduct.
5) Community Section: A condition of high community respect based upon
societys recognition of the first four criteria.
Whether Management satisfies these tests
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1) Knowledge: Management no doubt do have rapid expanding body of
knowledge underlying the management field. Starting from Henry Fayols
General and Industrial Management, many management books and
journals have been brought to light.2) Competent Application: Management Curriculum in universities and
management development programmes in commerce and industry have
gained popularity, many institutes of management have come into being in
India and elsewhere which offer courses for specialisation in various fields of
management. Several management consultancy service firms have also
come into existence which offer advice to business concerns on management
problems.
3) Social Responsibility: Modern managers recognise their social
responsibilities. We see such statements by business leaders in newspapers
almost everyday.
4) Self Control: There is no universally accepted standards for evaluating
managerial teams. There is no central agency to establish and enforce a
code of conduct for the business managers. Therefore management does not
fulfill the self-control criteria of a profession.
5) Community Sanction: Managerial personnel enjoy high status in the
society. There is a direct relationship between the position of an individual in
the organisational structure and his status in the society. Thus community
approves management as a profession.
Thus we can conclude management to be a profession as it satisfies most of the
standards. But in the true sense of professionalisation, management is still far
from complete as it does not have a code of conduct which puts self control on
the managers. This is considerably narrowed which clearly indicates that
management is moving towards professionalisation. This can be substantiated
with the help of the following points:
i) Substantial body of accumulated knowledge: Gradually management
has developed a specialized body of theory and philosophy which is fast
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growing and it has become the best passport to enter the world of
employment.
ii) Compulsory Acquisition of Management Knowledge: It is becoming very
essential to acquire management knowledge if one has to become asuccessful manager because of the advanced technology and complexities
of business.
iii) Management Tools: Continuous research has helped in the development
of management tools whose application is becoming a must for the success
or growth of an enterprise. These branches of management Profession
have enhanced the practical utility of management.
iv) A Distinct discip line: Today management has become a distinct
discipline. Schools & institutes are offering masters degree in management,
conducting seminars, symposiums, specialized courses, training
programmes etc. in various areas of management. This is making
management more specialized.
v) Use of specialized experts & professionals: The place of Sons of father
are being replaced by highly qualified, trained & experienced persons to
manage the business.
vi) Change in Outlook and Code of Conduct: Today the concept of seller
beware has taken the place of Buyer Beware. Pressure of consumerism,
trade unionism, public opinion & legislation are inducing the management to
evolve a code of conduct. There are several codes of conduct for different
types of managers by their respective organisation in different parts of the
world.
Eg: Code of conduct of British Institute of Management
vii) Honesty & personal integrity: These two are fundamental for gaining
universal acceptance for the practice of profession. Gentlemanly behaviour
in terms of respecting the views of others & other profession is of core
importance in management because of the fact that a large no. of specialists
from different profession are employed in the business today.
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3) It should establish cause and effect relationship.
4) Its principles should be verifiable.
5) It should have universal application.
6) It should ensure predictable results.
Whether Management Satisfies these Features
1) Systematised Body of Knowledge: Management has a systematized body
of knowledge pertaining to its field. Its principles have been evolved on the
basis of observation not necessarily through the use of scientific methods.
2) Scientific Enquiry: The researchers in management use scientific
techniques to collect and analyse data about human behaviour.
3) Cause and effect relationship: Several principles have been developed
which also establishes cause and effect relationships.
4) Verifiability of the Principles: The principles of management have also
been verified by many researchers.
5) Universal Application: More or less these principles have universal
application in different types of organisations.
6) Predictable results: Management theories and principles may not produce
the exact results as in case of pure science. It shows different results in
different situation because it deals with the people and their behaviour which
cannot be accurately predicted. Moreover it is not possible to conduct
experiments in a controlled environment as in case of other pure sciences.
This puts the limitation on Management as a science.
Conclusion: Management satisfies almost all the features of a science except
ensuring predictable results. Therefore management cannot be considered as an
exact or pure science. It is an Inexact Science or Soft Science. It is classified
as one of the social sciences.
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1.8 Management as an Art
Management is also an art. Art is bringing about desired results through the
application of skills. Every manager has to apply certain knowledge and skills
while dealing with people and resources to achieve desired results. In factmanagement is one of the most creative art. As an art, management calls for
enormous ability, intuition and judgement for a manager for functioning.
From the above discussions we can say that management is both a science and
an art. So the manager should possess not only the specialised knowledge of
management but also the skill to put his knowledge into practice.
1.9 Managerial roles
A manager is concerned with planning, organising, directing and controllingfunctions of the organisation. But actually every manager takes on a much wider
range of roles to move the organisation towards its stated objectives. In a broad
sense, a role consists of the behaviour patterns expected of an individual with in
an organisation.
Henry Mintzburg made an extensive survey and found out that all the managers
play a series of interpersonal, informational and decision making roles. They are:
A) Interpersonal Roles: These roles help managers to keep their organisation
running smoothly.1) Figurehead: In this role, every manager has to perform same duties such
as greeting the dignatories, taking the visitors to lunch, attending
subordinates wedding etc. Managers are symbols and personify the
organisation and its members.
2) Leader: As a leader, every manager must motivate and encourage his
employees.
3) Liaison: Like politicians, managers must learn to work with everyone
inside and outside the organisation who help in the achievement of
organisational goals.
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Evolution of Management Unit 2
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Unit 2 Evolution of Management
Structure
2.1 Introduction
2.2 Evolution of Management
2.2.1 Management in Antiquity
2.2.2 Pre-Scientific Management
2.2.3 Scientific Management
2.2.4 Functional Management
2.2.5 Human Relations School of Management
2.2.6 Behavioural School of Management
2.2.7 Quantitative approach to Management
2.2.8 Systems approach to Management
2.2.9 Contingency approach to Management
2.2.10 Management thought today
2.3 Exercise
2.1 Introduction
The existence of Management can be seen with dawn of civilization. It took its
birth when man started living in groups, but it took the form of leadership,
co-ordinating the efforts of the members of the family. Evidence of the use of the
well recognised principles of Management was found in the organisation of public
life in ancient Greece, the Organisation of Roman Catholic Church and Military
Organisation. However theory of Management could not be developed due to the
following reasons:
1) Indifferent approach of sociologist, economist, political thinkers towards
commerce, trade and industry.
2) Treatment of Management as an art and not a Science.
3) Concept that managers are born and not made.
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With the growth of socio-economic, political and scientific institution,
Management started developing. This shows that Management was evolutionary.
2.2 Evolution of Management
The evolution of Management can be divided into different stages:
Management in Antiquity.
Pre-Scientific Management
Scientific Management
Functional Management
Human Relations approach to Management.
Behavioural science approach to Management.
Quantitative approach to Management.
Systems approach to Management.
Contingency approach to Management.
2.2.1 Management in Antiquity: Management which first began in the family
organisation expanded to the tribe and finally to the political units as found in
Babylonian Civilization. The concept of managerial responsibility was clearly
evidence in the code of Hamurabi. The Egyptians skill in planning and organising
the construction of public edifices can be seen in their buildings and pyramids.
The Chinese philosophers were the first to recognise the need for systematic
selection of employees. Kautilyas Arthasastra speaks on duties of king and his
ministers and Management of trade and commerce.
But however, Management was strictly on a trial and error basis with little or no
theory and visually no exchange of ideas and practices. Principles were not
united in the stream of Management thought.
2.2.2 Pre-Scienti fic Management: Following closely the vast physical changes
in the world economy, changes in the concepts and conduct of Management took
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place. Certain pioneers challenged the traditional character of Management by
introducing new idea and approach. Some of the contributors are
a) Prof. Charles Babbage (1729 1871): He was a mathematics professor at
Cambridge University. He visited many factories in England and France and
found that factories were fully run by traditional methods. Manufacturers were
wholly unscientific and made little use of science or mathematics. They relied
on opinion and guess work instead of investigation and accurate knowledge.
Contributions: He advocated the use of science and mathematics in factory
operations. He invented calculating machine called the differential engine. He
published a book in 1832 entitled On the economy of machinery and
manufacturers. In his book he emphasises on the following points:
1) Use of accurate data obtained by rigid investigation.
2) Desirability of finding out the number of times each operation is repeated
each hour.
3) Dividing of work into mental and physical task.
4) Determining the precise cost of performing every process.
5) Paying of bonus to the workers in proportion to efficiency.
b) Robert Owen: He started a factory for the manufacture of textile machinery
and in 1800 he become the managing director. He carried out experiments inthe group of textile mills he managed during the period. He is well-known as
the promoter of co-operative and trade union movement in England. He was
the first industrialist who was interested in his workers welfare on the job.
Throughout his life he worked for building up a spirit of co-operation between
the workers and Management. He is also called as the father of Personal
Management.
Contribution: He firmly believed that the workers performance was influenced
by the total environment of working conditions and just treatment. Therefore he
emphasizes the practice of:
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i) Shorter working hours
ii) Housing facilities
iii) Training of worker and hygiene
iv) Education to their children.
He took active part in its introduction at the British factory in 1819. He preached
personal Management as an essential part of every managers job.
c) James Watt Jr. and Mathew Robinson: They were the sons of the inventor
of steam engine. They became the owners of an engineering factory where
they used their principles.
Contributions: They emphasized on
i) Market research and forecasting.
ii) Planned machine layout to facilitate better flow of work.
iii) Production Planning.
iv) Standardisation of components and parts.
v) Accurate Statistical Records.
vi) Maintenance of advance control techniques.
vii) Provision of welfare with sickness and old age benefit scheme administered
by an elected committee of employees.
viii) Scheme for developing executives.
2.2.3 Scienti fic Management: Introduction of mass production, large scale
industry and use of expensive machinery resulted in difficulties of maintaining the
harmonious relationship between the employer and the employees. This
projected the importance of utilizing adequate methods and principles of solving
problems of Management. Traditional methods were challenged. The post
Management experience was scientifically systematized. Among the individuals
who made their contributions on a large scale F. W. Taylor was the foremost.
F. W. Taylor: (1856 1915) Fedrick Winslow Taylor well known as the father of
scientific management made a greater impact on the development of
management. He started his career as an apprentice mechanist in cramp
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distribution of surplus they must try to increase productivity. The principles of
scientific Management can be put as follows:
1) Separation of Planning and doing: In the Pre-Taylor period a worker would
decide how he had to do the work and what machines and equipment would
be required to perform the work. But Taylor seperated the two functions of
planning and doing and emphasized that planning should be entrusted to
specialists. The planning department will plan the days work. When a
labourer comes to factory he gets clear instructions about what exactly he
has to do. Therefore he can concentrate on the actual performance of work
and thereby increase the productivity.
2) Functional Foremanship: Taylor introduced the system of functional
foremanship where every worker receives order from eight foremen. Among
these eight foremen, four are in the planning department and four are in the
working department. The foremen found in the planning section are
i) Route Clerk: He determines the path of movement for materials in
various process of manufacture.
ii) Instruction Card Clerk: He gives instructions to the workers. He
prepares instruction cards to inform workers regarding special tools to be
used, speed and feed of machines etc.
iii) Time and Cost Clerk: He collects and supplies all the required
information for recording the time taken for doing the work and thus the
work of calculating standard time and cost.
iv) Disciplinarian: He frames the rules and regulations to be followed by the
workers.
The four members found in the workshop are:
i) Gang boss: He does all the necessary preliminary preparation of the
work. He gives demonstration on the method of doing the work.
ii) Speed boss: He sees that the workers are using proper tools and
speed as instructed.
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iii) Repair boss: He looks after the maintenance of tools, equipments and
machines. If necessary he gets the repair work done well in advance.
iv) Inspector: He inspects and reports to the higher authorities on the
performance of the workers and the quality of product.
3) Job Analysis: Job analysis is concerned with determining a method of work
which takes least time, least cost and least movements. It is the process of
determining standard task for every worker through careful investigation.
Management will have to conduct time study, motion study and fatigue study
to decide about the best method of doing the job.
i) Time Study: It involves finding out the standard time for performing
operations.
ii) Motion Study: It refers to the study of the movement of the workers while
performing the job. This helps in eliminating all unnecessary movement
and finding the best way of doing the job.
iii) Fatigue Study: It is the study about the tiredness of workers which
decreases their efficiency. It helps in finding out at what intervals rest
have to be provided so that the efficiency of the employees can be
increased.
4) Standardisation of Tools and Equipments: Taylor emphasized on use of
standardised machines, standard raw-materials, good working conditions and
standard methods for handling machines and materials. It helps in
maintaining quality and uniformity.
5) Mental Revolution: Taylor emphasizes on harmony and co-operation rather
than individualism and conflict. There should be intimate and friendly relation
between Management and workers. This is possible only by bylateral mental
revolution. A complete mental revolution on the part of the employers as to
their duties towards their fellow workers, towards their workman and their
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problems. Without this mental revolution scientific Management does not
exist.
6) Financial Incentives: Taylor used financial motivators to make people work
in the organisation. He devised an incentive payment system called
Differential Piece-Rate System under which workers wage was calculated
based on his performance and on the position he occupied. The rate should
be fixed on accurate knowledge and not on estimates.
7) Scientific Selection and Training of Employees: He emphasized on
increased productivity which needs right man in the right job. Therefore
workers must be selected on scientific basis. Qualification, experience,
aptitude, physical strength etc. must be considered while selecting the
workers. After the selection they must be trained properly to take up the
allotted task. This helps the worker to take up the responsibility for which he
is best suited.
8) Economy: Taylor emphasized on profit and economy along with scientific
methods and approaches. Necessary measures must be taken to reduce the
wastages. Therefore, Taylor suggested an efficient system of cost accounting
to estimate and control costs on various items of expenses connected with
manufacturing operations.
9) Mechanism of Management: Taylor gave the mechanism of Management
by listing some of the mechanisms:
1) Time Study
2) Functional Foremanship
3) Standardisation of tools and implements
4) Desirability of the planning group
5) Instruction cards for the workmen
6) Differential piece rate
7) Routing system
8) Modern cost system etc.
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Taylor tried to point out the following three points in his shop management. They
are
a) The objective of good cost. Management was to pay high wages and have
low unit production cost.
b) To achieve this objective Management had to apply scientific methods of
research and experiments to its overall problem in order to formulate
principles and standard process which would allow for control of the
manufacturing operations.
c) An Environment of close and friendly co-operation should be cultivated
between Management and workers.
Criticisms
Though scientific Management was considered unique and gained popularity, it
was not free from limitations.
1) Use of the Word Scientific: People objected the use of word Scientific
before Management. Mr. Brech remarks, In an era that has not seen only the
best of science, it was perhaps an unfortunate choice.
2) Concentration only on production: The principles of scientific Management
were confined to production management which is not the whole and soul of
any organisation. There are other equally important areas such as financial
management, sales management which are entirely ignored by him.
3) Impersonal and Utilitarian: Taylor was criticised to be excessively utilitarian
and impersonal as he gave very little attention towards human element in
production.
4) Employing first class men: Taylor emphasized a higher productivity and
high production by employing specialists and first class men that made
people to criticise taylor as expecting each worker to be a superman whichis not possible.
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5) No direct relationship between wages and increase in productivity:
There were complaints from the labourers that their wages were not
increased in direct proportion to productivity increases which resulted from
improved methods and procedures.
6) Industrial Autocracy: Taylors scientific Management led the organisation
towards industrial autocracy as all planning was done by management and
employees were merely asked to follow their instruction. Therefore trade
unions discarded scientific Management and regarded them as the means to
exploit labourers.
7) Difficult to Practice: It was also argued that work analysis, time, motion and
fatigue studies, standardisation of pay-rates etc. cannot be scientifically
measured. Controls pertaining to materials, machines and processes may be
understandable in theory but in practice it is difficult to execute them.
8) No One best way: Taylor emphasises on finding out one best way of doing
the activity. But in reality it cannot be done because individual skills and
capacities influence the decision of the best method. What may be the best
method for an individual or a factory need not be the best method for another
individual or factory.
9) Concept of functional foremanship: Taylor advocated the concept of
functional foremanship to bring about specialization in the organisation. But
this is not feasible in practice as it violates the principle of unity of command
and increases the problem of confusion, conflict and co-ordination.
Henry Lawrence Gantt: He was a mechanical engineer who worked with Taylor
at the Midwale steel company. Later he went on his own as a consulting
industrial manager.
Gantt began to reconsider Taylors Differential piece rate system which had
too little motivational impact on workers. It was an incentive plan where by the
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worker was paid on the basis of his daily output. So Gantt developed his Task
and Bonus System.
According to this system the workers were divided into three class
i) Normal Worker: Who performs the days work in the given time. He would
get 50% bonus in addition to daily wages.
ii) Inefficient Worker: Who is not able to complete the given task in the given
time. He gets only wages.
iii) Efficient Workers: Who completes the task in lesser time. He would get
extra bonus in addition to his daily wages and 50% bonus.
If a worker gets any bonus the supervisor who controls him also gets bonus. His
attention was to motivate the supervisors to train their workers for higher
performance. He has appealed for maintaining good relationship between the
employer and the employees. One notable feature of Gantt is that he has
distinguished men and machines. Gantt chart is today regarded as a potential
tool for production control in the hands of the manager. Gantt is more credited in
Management as he paid necessary attention to the human element in
productivity.
2.2.4 Administrative Management, Process Management or Functional
ManagementAdministrative management is an important phase in the evolution or
development of management thought. Henry Fayol is regarded as the Father of
Admin is trative Management or the Father of Princip les of Management.
Henry Fayol was born in 1841 at Constantinople in France. He graduated as a
mining engineer in 1860. In the same year, he joined a French coal mining
company as an engineer. After a couple of years, he was promoted as the
manager of the collieries and continued as such for 22 years. In 1888, when the
company was almost bankrupt due to heavy losses, he was appointed as its
managing director. He served as a managing director for 30 years and retired in
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1918 after expanding the company into a large coal-steel combine with a strong
financial position and a record of profits and dividends over a long period. After
retiring from his executive position in 1918, he devoted himself to popularising his
theory of management.
According to Fayol, all the activities of industrial undertakings could be divided
into six groups, viz.,
a) Technical activities (i.e., those connected with production or manufacture).
b) Commercial activities (i.e., those relating to buying, selling and exchange).
c) Financial activities (i.e., those concerned with securing of capital and its use).
d) Security activities (i.e., those connected with protection of property and
persons).
e) Accounting activities (i.e., those connected with stocktaking, preparation of
financial statements like profit and loss account and balance sheet, cost
accounting, statistics, etc.).
f) Administrative or managerial activities (i.e., those connected with planning,
organising, commanding, co-ordinating and controlling).
He believed that for the successful running of any industrial or business
undertaking, all these functions or activities must be performed. If any one
function or activity was neglected, the enterprise would fail.
As the first five function and activities were already well known, Fayol devoted his
attention to managerial functions or activities. He was the first man to spell out
the managerial functions or activities. He sub-divided the managerial functions or
activities into five groups. They are:
a) Forecasting and Planning: This activity means foreseeing or examining the
future and preparing the plan of action (i.e., determining the result envisaged,
the line of action to be followed, the stages to be gone through and the
methods to be used) accordingly.
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3. Discipline: This is the respect for agreements which are directed at
achieving obedience, application, energy and outward marks of respect. It
requires good superiors at all levels, clear and fair agreements and judicious
application of penalties.
4. Unity of Command: This principle means that an employee should receive
orders from one superior only.
5. Unity of Direction: This principle implies that each group of activities having
the common objective must have one head and one plan.
6. Subordination of Individual Interest to Group Interest: This principle
emphasises the necessity for protecting group or common interest as
against individual interest. This will facilitate unity and avoid clashes among
different workers.
7. Remuneration of Personnel: This principle means that the method of
employee remuneration should be just and fair and should afford the
maximum satisfaction to both employees and employer.
8. Centralisation: This principle implies that the degree of concentration of
authority should vary according to the needs of the individual situation.
9. Scalar Chain: This is the line of authority or chain of superiors running from
the highest rank to the lowest rank. The line of authority should be followedordinarily or normally. However, when the strict following of the line of
authority becomes detrimental, the chain can be short-circuited.
10. Order: This is the principle of organisation in the arrangement of things and
persons. According to this principle, there must be a place for everything
(and everyone), must be in its (and his) place.
11. Equity: This principle implies that the managers of an undertaking should
enlist the loyalty and devotion from the employees by showing kindliness
and justice in dealing with them (i.e., subordinates).
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12. Stability of Tenure of Personnel: This principle implies that every
employee must be assured of security of service. When an employee is
assured of security of service, he will take keen interest in giving the best
performance. So, unnecessary labour turnover (i.e., termination of
labourers) should be avoided.
13. Initiative: This principle implies that the mangers of an undertaking should
permit their subordinates to take some initiative in thinking out and executing
plans. This will give them (i.e., the subordinates) much satisfaction.
14. Espirit de corps: This principle means union is strength. So, there must
be team-work and proper communication among the members of the team.
Again, Fayol spelt out the qualities of successful managers. He held that
managerial ability can be acquired in schools and colleges and later in the
workshop in the same way as the technical ability. The qualities of a successful
manager emphasised by Fayol are the following:
a) Physical (i.e., health, vigour, etc.).
b) Mental (i.e., ability to understand and learn, judgement, mental vigour and
adaptability).
c) Moral (i.e., energy, firmness, willingness to accept responsibility with
initiative, loyalty, tact and dignity).
d) General education (i.e., general acquaintance with matters not belonging
exclusively to the function performed).
e) Special knowledge (i.e., knowledge peculiar to the function).
f) Experience (i.e., knowledge arising from the work proper).
Contributions of Administrative Management:
Fayols administrative management received widespread acceptance from
writers on management and managers of business undertakings. For instance,
administrative management was accepted by two executives of the GeneralMotors of the U.S.A., viz., James D. Mooney and Allan C. Railey. Administrative
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management was also recognised by writers on management like Harold Koontz
and Cyril ODonnel.
Administrative management has made some significant contributions to the
development of management thought. The important contributions of
administrative management are:
a) Administrative management has provided theoretical basis to the practice of
management. That is, it points out that it is possible to learn and impart
education and training in the art and science of management.
b) It is easy for a manager to understand and practise management through
administrative management. Under this approach (i.e., administrative
management), when confronted with a problem, a manager has only to
diagnose whether the problem concerns planning, organising, directing, co-
ordination or controlling aspect of management function. Once this is done he
can confidently proceed to solve the problem by using his knowledge and
practical skill.
c) Administrative management has pointed out that management is universal
irrespective of the types of organisation. So, the functions of management are
common and the principles of management are of universal application.
d) Administrative management integrates the knowledge of various disciplinesfor better management.
e) Administrative management provides flexibility in the sense that, under this
approach, there is room for innovation research and development.
f) Administrative management is an aid to professionalisation of management.
Criticisms of Administrative Management:
It is true that administrative management has made certain contributions to the
development of management thought. But it is not free from limitations or
criticisms. The main criticisms against administrative management are:
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a) The principles of management proposed by administrative management are
just based on observation (i.e., a few case studies), and are not tested
empirically (i.e., not based on research).
b) The so called universal principles of management proposed by administrative
management do not always stand the test of empirical scrutiny.
c) Organisations function under dynamic (i.e., changing) conditions. As such,
profounding of universal principles of management may not always be a
fruitful exercise.
d) Administrative management suffers from excessive categorisation and
impersonality.
e) Some of the principles profounded by administrative management, say, the
principle of unity of comand and the principle of specialisation or division of
labour cannot be followed simultaneously.
f) The principles of specialisatiion, chain of command, unity of direction and
span of control profounded by the administrative management result in the
formation of mechanistic organisation structures which are insensitive to
employees social and psychological needs.
g) The principles of management profounded by administrative management
are based on the assumptions that organisations are closed systems. But thisis not true. Organisations are open systems. So, the rigid structures which the
principles (profounded by administrative management) tend to create do not
work well under unstable conditions.
2.2.5 Human Relations School of Management
Taylor was successful in harnessing the economic needs of the workers by
devising wage incentive scheme but he failed to realise that workers had certain
Psychological needs also. Many authorities like Elton Mayo and others
conducted some experiments in the field of industrial psychology. As a result a
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trend began which can be phrased as Being nice to people or The human
relations movement.
Human relations put all stress on interpersonal relations and the informal groups.
Its starting point was in individual psychology rather than in the analysis of
worker and the work. This school has done an unique job in recognising the
importance of human element in all organisations. It freed Management from
domination of wrong ideas, but it did not succeed in substituting new concepts.
Elton Mayo: He is generally recognised as the father of Human Relations
School. He along with his associates conducted a series of study at western
electrics Hawthorne plant. His experiments are popularly known as Hawthorne
Experiments. The conclusions arrived at from these experiments were
i) The amount of work to be done by an individual is not determined by his
physical capacity but by the social norms.
ii) Non-economic rewards and reactions play a significant role in influencing
the behaviour of the workers.
iii) Generally workers do not act or react as individuals but as members of the
group.
iv) Informal leaders play an important part in setting and enforcing the group
norms.
He proved that increase in productivity is not caused by any single factor like
changing rest pauses or working hours but a combination of these and several
other factors such as less restrictive methods of supervision, giving autonomy to
workers, allowing the formation of small cohesive groups of workers, creating
conditions which encourage and support the growth of these groups and the
Co-operation between workers and Management. As a result it has been
recognised that workers performance is related to physiological, sociological and
psychological factors.
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Thus human relations school discarded the engineering approach to the problem
of work and productivity and proved that informal work groups and the
opportunity to be heard and participate in decision making have an important
impact on the productivity of the workers.
Many Parker Follet: Her Management views were a bi-product of her
psychological and Sociological background. She tried to interpret classical
management principles in terms of human factors.
She attempted to solve the most basic problem of any organisation i.e. the
problem of motivation. Therefore she tried to establish a Management philosophy
based on the ground that any productive society must be founded upon the
recognition of motivating desires of the individual and the group.
The next basic problem identified by Follet was the problem of Co-ordinating the
group efforts to achieve the pre-determined objectives. She was of the opinion
that authority as an act of subordination was offensive to mans emotions and
therefore could not serve as a good foundation for co-operative organisation. She
laid down following principles to achieve effective co-ordination:
1) Co-ordination in the early stages of planning and policy making.
2) Co-ordination by direct contact of responsible persons.
3) Co-ordination as being reciprocal relating to all factors in the situation.4) Co-ordination as a continuing process.
Being a management philosopher, she maintained that for a particular situation,
leadership will go to the man having vast knowledge and who can understand the
situation and organise the essential elements for effective results. She coined the
new principle The group concept and said that it would become the basis for
the future industrial system.
Conclusion: Both the human relation theorists discarded mechanistic approachwhich neglected human psychology and welfare. They emphasized that higher
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productivity can be better achieved when workers are treated as human beings.
Thus human element and its relationships in the organisation is essential for the
success of the organisation.
2.2.6 Behavioural School of Management
Human relations school of management had a bad name by the middle of 1940s
because Hawthrone experiments created a misunderstanding of what
constitutes good human relations. Due to this and increasing knowledge about
how the individual acts and reacts in the business environment, human relations
movements gave the way to behavioral science approach to management.
Abraham Mallows Need Hierarchy Theory : He was a famous social scientist
and a psychologists. According to him man is a wanting animal. He has variety of
needs from most basic necessities to the highest needs of self actualisation. If
the basic needs are satisfied he seeks to satisfy his next higher level needs. The
unsatisfied needs influence the human behavior. Manager must identify the
unsatisfied needs of peoples and must try to satisfy them. According to Maslow
people are motivated to meet the needs which can be arranged in an order from
the lowest to the highest. Maslows hierarchy of needs can be shown as below:
1) Physiological needs such as food, clothing shelter etc.
2) Safety needs such as economic security, jobs security, provision for old age
etc.
(5)
(4)
(3)
(2)
(1)
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3) Social needs such as love & affection, companionship, belongingness,
acceptance etc.
4) Esteem needs such as self respect, status, prestige, recognition, reputation,
achievement etc.
5) Self-actualisation needs such as self fulfillment, new responsibility,
advancement, participation in Management, realisation of mans full potential.
1) Physiological Needs: For a man whose basic physiological needs are
not satisfied, other higher needs of love, status & self fulfillment generally
become less significant. Physiological needs are satisfied through
monitary benefits.
2) Safety Needs:After satisfying physiological needs man tries to satisfy his
safety needs. At this stage they act as prime motivators.
3) Social Needs: Man is a social animal. He needs to be loved & accepted
by others. When physiological and safety needs are fairly satisfied social
needs become powerful motivators.
4) Esteem needs or Status Needs: The desire for status & prestige is an
important aspect of the need for esteem. It is concerned with awareness
of self importance & recognition from others. Satisfaction of self esteem
needs result in feelings of self-confidence, prestige & being worthy in the
organisation. Unsatisfied esteem needs may result in feelings of inferiority
weaknesses & helplessness.
5) Self-actualisation Needs: The highest level need according to maslow is
the self actualisation needs. When all other needs are adequately
satisfied employees will be motivated by the self-actualisation needs. Man
Tries to realise his own potential abilities & leads to maximise his
potential. Self-actualisation need is a growth need. It includes getting
higher responsibility. This need can be satisfied by providing challenging
job, promotion to managerial positions, delegation of authority etc.
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Maslows need hierarchy Theory has practical use to the managers while
dealing with the subordinates Management must note that the satisfied need
ceases to be the motivator of human behavior. Man will think of second need
only when the first need is satisfied. The needs at a given level need not be
fully satisfied before proceeding to the next higher need. The fact is that most
people are partially satisfied & partially unsatisfied.
Criticisms: The following criticisms are put forward against Maslows Theory:
1) It is based on assumptions: The hierarchy of needs suggested by Maslow
is based on assumptions. It cannot be generalised. Different people have
different order of needs. For eg.: For a politician self actualisation need may
become a prime motivating factor before lower level needs are satisfied some
people do not care for job security but for social needs.
2) It is non-testable: It is very difficult to interpret its concepts because human
need are interdependent & overlapping.
3) It does not differentiate individuals: Needs may differ between the
individuals in the same position for eg.: Esteem need may be a dominant
motive for an individual but for another individual in the same position social
need may be a strong motive.
Inspite of the above limitations, Maslows need hierarchy theory is still a relevant
theory for understanding the behaviour of subordinates. It provides a common
sense approach to the managers.
Herzbergs Two Factor Theory: This theory was prepared by Fedrick
Herzberg after conducting a number of interviews with two hundred engineers
and accountants of different companys in Pittsburgh in U.S.A. He asked about
their experiences and feelings. Study revealed that employees felt good about
their jobs when there was job enrichment, recognition of achievement,
challenging work, opportunity for personal growth and advancement. These
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factors motivate the employees for higher performance. Therefore these are
called motivators or satisfiers.
It was found that bad feelings about the job were due to company policies
working conditions, inter-personal relations, salary, status, job-security and
quality of supervision. The presence of these factors in a work situation at a
satisfactory level does not motivate employees but prevents job-dissatisfaction.
These contribute for maintaining reasonable level of satisfaction in employees.
Therefore these factor are called hygiene factors or dis-satisfiers or maintenance
factors. The absence of hygiene factors in a work situation may cause
dis-satisfaction among the employees about their jobs.
He concluded that job satisfaction and dis-satisfaction comes from two factors
i.e. motivational factors what he called as a satisfiers and hygiene factors what
he called as dis-satisfiers. Therefore this theory was called as two factor theory.
The following table explains Herzbergs Motivation and hygiene factors:
Hygiene Factors Motivation Factors
Company policy and administration,
quality of supervision, relationship
with supervisors, salary, work
condition, personal life, relations withsubordinates, job security, status.
Achievement, recognition for good
work, added responsibilities, oppor-
tunity for advancement, opportunity
for personal growth, challenging work.
It is desirable to have motivational factor in the organisation to satisfy the
employees for higher performance. But motivating factors may not satisfy the
employees unless maintenance or hygiene factors are present in the work place
at a reasonable and satisfactory level. He concluded that the key to motivation
lies in designing challenging and rewarding jobs and providing opportunity for
achievement and recognition. Thus Management should attempt to make jobs
more satisfying.
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Theory X and Theory Y: This theory was developed by Prof. Mc Gregor. He
developed these theories based on the assumptions made by the managers
about human behaviour and human nature in the organisation. He identified two
different sets of assumption that managers have about their subordinates. The
first set of assumption is contained in theory X and the second set of
assumption is contained in theory Y.
Theory X: This is the traditional theory on Human behaviour. In this theory he
has made the following assumptions about human behaviour:
i) All though job is a necessity, people have an inherent dislike to work. They
try to avoid it whenever possible.
ii) Most people are lazy and unambiguous. They avoid responsibility and prefer
to be directed by others.
iii) Man by nature resist changes.
iv) People are self centered and indifferent to organisational goals.
v) People lack creativity.
vi) People are not very bright.
vii) Since people do not like work they must be motivated by force, money or
praise.
Theory X suggests that a manager must force employees and must threaten
with punishment or must pay high salary and benefits as motivational techniques
to direct the employees for higher performance. Thus theory X is negative,
traditional and uses autocratic style of leadership.
Theory Y: It is based on positive assumptions about human nature. The
important assumptions are
i) The average human being does not dislike work. People get a great deal of
satisfaction from work in a good working environment.
ii) Man has desire to achieve.
iii) People work hard towards objectives to which they are committed.
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iv) Man does not inherently resist organisational changes.
v) People take additional responsibilities and apply imagination and creativity
to organisational problems.
vi) External control and the threat of punishment are not the only means of
directing the efforts of people to accomplish the task.
vii) It is the responsibility of the Management to provide opportunity to the
people, recognise and develop their abilities. Management must create
opportunities, remove obstacles, encourage growth and provide guidance to
the employees.
Theory Y is positive, participatory and democratic. It is a new approach to
management which emphasizes on co-operation between management and
workers. It helps the organisation to reduce conflicts and misunderstandings. It
emphasizes management by objectives, supportive management,
decentralization and job enrichment as motivation techniques. It can be used in
an organisation where self motivated, self controlled, matured and responsible
people work. In the present industrial environment theory Y is more appropriate
than theory X.
Theory Z: This theory emphasizes that employees are motivated to achieve
organisational goals under two conditions. Each individual must know clearly the
organisational goals and their efforts must be directed to achieve these goals.
Each individual should be confident that realisation of organisational goals also
satisfy his needs heavily. His needs are not threatened and frustrated by the
members of the organisation.
Four postulates are to be considered by the management in order to maintain
and motivate the employees.
i) Permanent Bondage of Worker wi th the Organisation: There should be
permanent bond between organisation and workers. For this purpose
measures like life time employment to the people, highly conducive work
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environment, challenging job, workers participation in Management etc.
must be taken up by the Management.
ii) Participative decision making: Management must encourage workers
participation in decision making process.
iii) Co-ordination and Co-operation: Management has to secure
co-ordination among the members of the organisation. It enables to achieve
employee commitment to work and promotes a feeling of unity in the
organisation.
iv) Informal Organisational Structure: Theory Z suggested an informal
organisation without a definite structure, chart and divisions. Individuals
must work together by sharing of information, resources and plans without
formal reporting relationships.
Comparison between Human Relations Approach and Behavioural
Sciences Approach
Human Relat ions Approach Behavioural Science Approach
1. Human relations approach laid
emphasis on the individual, his
needs and behaviouf.
2. If focussed on inter-personal
relationships.
3. It was based on the Hawthorne
Experiments and so it scope is
limited.
4. It laid emphasis on motivation,
job satisfaction and morale.
1. Behavioural science approach
stressed upon groups and group
behaviour.
2. It focussed on group relationships.
3. It refined the Human Relations
approach and has a wide scope It is
a much more systematic study of
human behaviour in organisations.
4. The behaviourists studied group
dynamics, informal organisation and
motivation.
2.2.7 Quantitative Approach to Management:
This approach is also called Mathematical, Operations Research or
Management Science approach. The basic feature of the quantitative
management thought is the use of mixed teams of scientists from several
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disciplines. This school uses scientific tools for providing a quantitative base for
managerial decisions. The techniques commonly used for managerial decision-
making include Linear Programming, Critical Path Metho (CPM), Programme
Evaluation Review Technique (PERT), Games Theory, Queuing Theory and
Break-Even Analysis.
The quantitative approach uses mathematical formulae for finding solutions to
the problems that were previously unsolved. The abiding belief of the quantitative
approach is that if management is a logical process, it may be expressed in
terms of mathematical symbols and relationships. The basic approach is the
construction of a quantitative model because it is through this device that the
problem is expressed in its basic relationships and in terms of selected
objectives. The construction of the model expresses the effectiveness of the
system under study as a function of a set of variables at least one of which is
subject on control. The general form of operations research model is E = f(x1, y1),
where E represents the effectiveness of the system (profit, cost and the like),
x1 the variables of the system which are subjected to control and y1 those which
are not subject to control.
Comparison between Scientific Management and
Quantitative Approach
Sc ient if ic Management Approach Quanti tat ive Approach1. It advocates use of scientific methods
in managing.
2. It focussed on improving efficiency of
workers and machines by finding one
best way of doing things.
3. The main techniques of scientific
management are time and motion
studies.
4. It lays stress on experiment and
research for improving efficiency.
5. The conceptual base of scientific
management was provided by F. W.Taylor and his associates.
1. It advocates use of mathematical and
statistical techniques for solving
management problems.
2. It focussed on finding right answers to
managerial problems.
3. The main technique of quantitative
approach is operations research.
4. It lays stress on developing
econometric models for taking
managerial decisions.
5. Quantitative approach waspopularised by W.C. Churchman and
his associates.
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Evolution of Management Unit 2
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2.2.8 Systems Approach to Management:
In the 1960s, a new approach to management appeared which attempted to unify
the earlier schools of thought. This approach is commonly referred to as
Systems Approach. Basically, it took up where the functional process
management school let off to try to unify management theory, A system view
point may provide the impetus to unify management theory. By definition, it could
treat the various approaches, such as the process, quantitative and behavioural
ones, as sub-systems in an overall theory of management. Thus, the systems
appraoch may succeed where the process approach has failed to lead
management out of the theory jungle.
The systems approach has taken up where the process approach has let off in
attempting to unify management theory. Whereas the quantitative and
behavioural approaches went off on opposite paths from the process appraoch,
the systems approach has attempted to draw them back together to form an
overall theory of management. Today, it is undoubtedly the most widely accepted
theoretical base for modern management.
The systems approach is based on the generalisation that an organisation is a
system and its components are inter-related and inter-dependent. A system is
composed of related and dependent elements which, when in interaction, form a
unitary whole. It is simply assemblage or combination of things or parts, forming
a complex whole. Its important feature is that it is composed of a hierarchy of
sub-systems. The world as a whole can be considered to be a system in which
various national economies are sub-systems. In turn, each national economy is
composed of its various industries, each industry is composed of firms, and of
course, a firm can be considered a system composed of sub-systems such as
production, marketing, finance, accounting and so on. Thus, each system may
comprise several sub-systems and, in turn, each sub-system may be further
composed of sub-systems. The system may be closed or open.
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The contingency theory stresses that there is no one best style of leadership
which will suit every situation. The effectiveness of a particular leadership style
will vary from situation to situation. For instance, participative leadership may be
more effective in an organisation employing professional personnel in a high
technology operation in an atmosphere of non-materialistic orientation and free
expression. On the other hand, authoritarian leadership would be more effective
in an organisation which employs unskilled personnel on routine tasks in social
values oriented towards materialism and obedience to authority.
Evaluation of Contingency Approach: Contingency approach guides the
managers to be adaptive to environment variables while choosing their styles
and techniques. It discounts preconceived notions and liberates the managers
from dogmas. The management principles and techniques should be tailored to
meet the particular situation. Readymade solutions for all the situations are not
available. Contingency approach tells the managers to be pragmatic and open-
minded.
Contingency approach is an improvement over the systems approach. It not only
examines the relationships between sub-systems of the organisation, but also
the relationship between the organisation and its environment.
Comparison of Systems Approach and Contingency Approach
Systems Approach Contingency Approach
1. It lays emphasis on the interdependen-
cies and interactions among systems
and sub-systems.2. It treats all organisations alike. Size of
the organisation, and its socio-cultural
setting are not considered.
3. It studies organisation at the philoso-
phical level.
4. It does not comment on the validity of
the classical principles of management.
5. It simply lays down that the
organisation interacts with the
environment.
1. It identifies the nature of interdependen-
cies and the impact of environment on
organisational design and managerialstyle.
2. Each organisation is to be studies as a
unique entity.
3. It follows an action-oriented approach
and so is pragmatic. It is based on
empirical studies.
4. It rejects the blind application of the
classical principles of management.
5. The impact of environment on the
organisation structure and managerial
style is the major concern ofcontingency approach.
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2.2.10 Management Thought Today:
Management thought today is the outcome of the contributions of a large number
of management thinkers who have advocated different approaches to
management. The various approaches to management have contributed to the
development of modern management on scientific lines. Today, management is
highly developed.
Management thought today has universal application. Management has an
important place not only in business undertakings but also in non-business
undertakings.
Further, today, management is highly professionalised. Again, in management
thought today, there is greater emphasis on democratic management or
participative management. Above all, management has become highly inter-
dependent and inter-disciplinary today.
2.3 Exercise
1. Explain the F. W. Taylors Scientific Management.
2. Explain briefly the functional management.
3. Explain the Need Hierarchy Theory.
4. Explain the Herzbergs two factory theory.
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Planning Unit 3
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Unit 3 Planning
Structure
3.1 Introduction3.2 Definition and Nature of Planning
3.3 Characteristic features of Planning
3.4 Importance of Planning
3.5 Types of Plans
3.6 Steps in Planning
3.7 Advantages of Planning
3.8 Limitations of Planning
3.9 Management By Objectives
3.10 Steps involved in M.B.O.
3.11 Advantages of M.B.O.
3.12 Forecasting
3.13 Importance of Forecasting in Planning
3.14 Techniques of Forecasting
3.15 Exercise
Learning Objectives
After studying this unit, you will be able to:
Explain the features of Planning.
Explain the types of Plans.
Explain the significance of M.B.O.
Explain the importance of forecasting and techniques of forecasting.
3.1 Introduction
Planning is a primary function of management. It refers to the determination of a
course of action to achieve a desired result. Planning concentrates in advance,
what to do, how to do it, when to do it and who is to do it. Planning bridges the
gap from where we are to where we want to go. Planning function of
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management precedes all other managerial functions. Without setting goals to be
reached and line of actions to be followed, there is nothing to organise, to direct
or to control. Planning actually is the foundation of management. The vital
supporting column upon planning, organising, activating and controlling and allthese combine together to make up the bridge of process of management.
Planning governs the survival, progress and prosperity of any organisation in a
competitive and everchanging environment. It is really a continuous process to
keep the organisation as a going concern and other functions are also performed
simultaneously.
3.2 Definit ion and Nature of Planning
Koontz and ODonnell defined planning as an intellectual process, the conscious
determination of courses of action, the basing on decisions on purpose, acts and
considered estimates.
In the words of G. E. Milward, Management is the process and the agency
through which the execution of policy is planned and supervised.
On the basis of the above definitions, the nature of planning can be enumerated.
1) Planning is very closely associated with the goals or objectives of the
organisation. The goals may be expressed or implied. However, well-defined
goals lead to efficiency in planning.
2) Planning is mainly concerned with looking ahead of the future. Forecasting
provides the necessary raw material for correct planning.
3) Planning involves in the selection of the best alternative.
4) Planning is required at all levels of management. However, its scope and
importance increase at successively higher levels.
5) Planning is an inter-dependent process. It coordinates the activities of various
departments, sections and sub-sections.
6) Planning is flexible as it is based on future conditions which too are dynamic.