Definitions of Management

• Management is getting things done through other people.

• Management is the process of planning, organizing, leading and controlling the efforts of organizational
members and using all available resources to reach organizational goals.
• A process of directing, guiding, influencing individuals and groups in order to achieve pre-determined goals.
Definitions of Management
 Koontz & Weihrich – Management is the process of designing and maintaining on environment in which
individuals, working together in groups, efficiently accomplish selected aims.
 Terry & Franklin – Management is the distinct process consisting of activities of planning, organizing, actuating
and controlling, performed to determine and accomplish stated objectives with the use of human beings and other
resources.
Definitions of Management
 Basic resources i.e 6 M’s:-
Men & Woman
Materials
Machines
Methods
Money
Markets
Definitions of Management
 F.W Taylor – Management is to forecast, to plan, to organize, to command, to coordinate and control activities
of others.
 American Management Association – Management is guiding human and physical resources into dynamic
organization units which attain their objectives to the satisfaction of those served and with a high degree of morale and
sense of attainment on the part of those rendering service.
The Management Process or Functions of Management

As managers, people carry out the managerial functions of planning, organizing, staffing, leading and
controlling. Management applies to every organization, business or non-business. In business organizations, it applies
to managers at all organizational levels. Managing is concerned with productivity, which implies effectiveness and
efficiency.
The Management Process or Functions of Management
 Management is the process of getting things done through others. The process is identified in a set of functions
performed by managers to accomplish the goals. The functions generally performed by the managers are as follows:-
 Planning
 Organizing
 Directing
 Staffing
 Controlling
The Management Process or Functions of Management
 Planning:-
Conceiving of a method beforehand, by which an activity is to be carried out so as to meet an objective.
Planning requires decision-making i.e choosing from among alternative future course of action.
Planning is setting the targets and objectives to be achieved, devising ways and means to achieve them and
selecting the best action to achieve the goal.
The Management Process or Functions of Management
 Organizing:-
It is grouping the activities necessary to attain objectives. Whereby managers assign work to the sub-ordinates
along with the necessary authority and responsibility, creating an organization climate and culture, for the purpose of
achievement of organizational goals.
The Management Process or Functions of Management
 Directing:-
 Directing is telling people what to do and seeing that they do it to the best of their ability. Thus directing is
bringing plans into action by the process of motivation, communication, leadership, supervision and team building of
all the organizational members.
The Management Process or Functions of Management
 Staffing:-
Staffing is a managerial function of hiring people and placing them in the right jobs as per their competence.
Hence training them and developing them so that they can strive for the accomplishment of goals of the organization.
The Management Process or Functions of Management
 Controlling:-
Control is the process that measures current performance and guides it towards some pre-determined goals.
Hence the control function lies in checking existing actions against some desired results. Controlling is ensuring that
plans have be adhered and in case of any mistakes between the desired and the actual results, it takes necessary action
to correct the mistakes.

OBJECTIVES
After the end of the module you will be able to define :–
 What is Management?
 Nature of Management
 Scope of Management
 Functions Of Management
 Role Of Managers
WHAT IS MANAGEMENT?

Management is the process involving planning, organizing, staffing, directing and controlling human efforts to
achieve stated objectives in an organization.

NATURE OF MANAGEMENT
Nature of Management The study and application of management techniques in managing the affairs of the
organization have changed its nature over the period of time. Various contributions to the field of management have
changed its nature. Therefore the nature of management can be described as follow; Multidisciplinary Dynamic nature
of principles Relative, not absolute principles Management: Science or Art Management as Profession Universality of
Management

MANAGEMENT AS DISCIPLINARY
Management is basically multidisciplinary. This implies that, although management has been developed as a
separate discipline, it draws knowledge and concepts from various discipline. It draws freely ideas and concepts from
psychology, sociology, anthropology, economics, ecology etc. Management integrates the ideas and concepts taken
from these disciplines and presents newer concepts which can be put into practice for managing the organization. In
fact the integration of knowledge of various discipline is the major contribution of management and this integrated
discipline is known as management.

DYNAMIC NATURE OF PRINCIPLES

Principle is a fundamental truth which establish causes and effect relationships of function. Management has
framed certain principles on the basis of integration and supported by practical evidences. These principles are flexible
in nature and with the changed in the environment in which an organization exists. Because of the continuous
development in the field, many older principles are being changed by new Principles. In fact, there is nothing
permanent in the landslide of management.

RELATIVE, NOT ABSOLUTE PRINCIPLE

Principles are relative, not absolute and they should be applied according to the need of the organization. Each
organization may be different from others. The difference may exits because of time, place, socio-culture factors etc.
However individuals working within the same organization may also differ. Thus a particular management should be
applied in the light of prevailing conditions.

MANAGEMENT: SCIENCE OR ART

There is a controversy whether Management is science or art. Management is both science and Art.
Management as Science & Management as an art. Management: science and art are both.

MANAGEMENT AS PROFESSION
1 Existence of knowledge:
2 Acquisition of Knowledge
3 Profession Association
4 Ethical Codes
5 Service motive Management as Emerging profession, Profession of Management in India

SCOPE OF MANAGEMENT
Production Management:
• Designing the product
• Location and layout of plant and building
• Planning and control of factory operations
• Operation of purchase and storage of materials
• Repairs and maintenance
• Inventory cost and quality control
• Research and development etc.

Marketing Management:
 Marketing research to determine the needs and expectation of consumers
 Planning and developing suitable products
 Setting appropriate prices
 Selecting the right channel of distribution, and
 Promotional activities like advertising and salesmanship to communicate with the customers

Financial Management:
 Selecting the appropriate source of funds
 Raising the required funds at the right time
 Administration of earnings
 Estimating the volume of funds

Personnel Management: :
 Manpower planning
 Recruitments
 Selection
 Training
 Appraisal
 Promotions and transfers
 Compensation
 Employee welfare services, and
 Personnel records and research, etc.

MANAGEMENT FUNCTIONS

 Planning
 Organizing
 Staffing
 Directing
 Controlling
FUNCTIONS OF MANAGEMENT

Planning is the first function which is basically a logical thinking process that decides what needs to be done in
order to achieve organization's goals and objectives. It focuses on the broader perspective of the business as well as
taking into consideration, the tactical methods to get the desired results.

FUNCTIONS OF MANAGEMENT

Organizing is about setting up and maintaining the internal organizational structure in accordance with
objectives mentioned in planning stage. It also involves assigning tasks to various individuals for the larger goal of
organization's missions and objectives.

FUNCTIONS OF MANAGEMENT

Staffing is the process of choosing right people for organization. It can be associated with human resource
management and involves recruitment, hiring, training and compensating the workforce.

FUNCTIONS OF MANAGEMENT

Directing is guiding people in the organization through the means of counseling, instructing, motivating

FUNCTIONS OF MANAGEMENT

Controlling The process of leading and influencing the task related activities of group members or an entire
organization

5 M’S OF MANAGEMENT

 Money
 Manpower
 Material
 Machinery
 Methods

ROLE OF MANAGERS
Role Functions:-
 Interpersonal
 Informational
 Decisional
 Planning
 Organizing
 Staffing
 Directing
 Controlling
CONCEPT OF MANAGEMENT
 Management is a Discipline
 Management as a Group of People
 Management as a Process
CONCEPT OF MANAGEMENT
 Management is a Discipline
Discipline refers to the field of study have well defined concepts and principles. Hence how these principles can
be applied in managing the organization.
CONCEPT OF MANAGEMENT
 Management as a Group of People
We refer to management as a group of people in which we include all those personnel who perform managerial
functions in organizations.
 We talk about relationship between management and labour in an organization.

CONCEPT OF MANAGEMENT
 Management as a Process
The Management as a process includes various activities and sub activities.
Process can be referred to as flow of information directed towards the achievement of an objective or set of
objectives.
Hence, in which events and relationships must be seen as dynamic, continuous and flexible way
CONCEPT OF MANAGEMENT
 Management as a Process
The total activities of an organization can be divided as operational and managerial.
Thus Management can be defined as a process of getting things done through the efforts of others.
CONCEPT OF MANAGEMENT
 Management as a Process
Because of the existence of different approaches i.e.
 Production or efficiency oriented.
 Decision – oriented.
 People – oriented.
 Function – oriented.

FEATURES OF MANAGEMENT
 Organized Activities.
 Existence of Objectives.
 Relationship among resources.
 Working with and through people.
 Decision – Making.

IMPORTANCE OF MANAGEMENT
 Effective utilization of resources.
 Development of resources.
 To incorporate Innovations.
 Integrating various interest groups.
 Stability in the society.

IMPORTANCE OF MANAGEMENT
 Effective utilization of resources.
 Development of resources.
 To incorporate Innovations.
 Integrating various interest groups.
 Stability in the society.
EVOLUTION OF MANAGEMENT THOUGHT
 Management practice is as old as human civilization started living together in groups.
 The study of how managers achieve results is predominantly a twentieth century phenomenon.
 In the early years, management could not get the attention of researchers because the field of business in which
the management concepts were applied was held low.
 And the commonly held belief that managers are born and not made.
 These factors created the situation where the need for the systematic study of management was not felt. This
situation continued till the beginning of the Twentieth century.
EVOLUTION OF MANAGEMENT THOUGHT
 The situation started changing with the beginning of the 20th century; specially the World War 1 created the
situation where people started thinking of situation to the problem of how limited resources could be applied in better
way.
 The World War 11 added further problem to this end. Growing competition and complexity of managing large
business organizations further provided impetus to developing systematic management concepts and principles.
 In recent years, there has been world wide rivalry for markets, power and progress.
 The increasingly severe competition from several factors like, technological innovations, increase in capital
investment, freedom at national and international markets.
 Because of growing competition managing business has also increased due to No. of organizations, high degree
of of division of labor and specialization, increased government regulations and control to business more socially
oriented, organized union activities to put pressures on management.
 This led to the emergence of a variety of orientations and approaches in management.
EVOLUTION OF MANAGEMENT THOUGHT
 Management Thought
 Early Contributions
 Scientific Management
 Administrative/operational management
 Human relations approach
 Social systems approach
 Decision theory approach
 Management science approach
 Human behavior approach
 Systems approach
 Contingency approach

EVOLUTION OF MANAGEMENT THOUGHT

 Management practice is as old as human civilization started living together in groups.
 The study of how managers achieve results is predominantly a twentieth century phenomenon.
 In the early years, management could not get the attention of researchers because the field of business in which
the management concepts were applied was held low.
 And the commonly held belief that managers are born and not made.
 These factors created the situation where the need for the systematic study of management was not felt. This
situation continued till the beginning of the Twentieth century.
EVOLUTION OF MANAGEMENT THOUGHT
 The situation started changing with the beginning of the 20th century; specially the World War 1 created the
situation where people started thinking of situation to the problem of how limited resources could be applied in better
way.
 The World War 11 added further problem to this end. Growing competition and complexity of managing large
business organizations further provided impetus to developing systematic management concepts and principles.
 In recent years, there has been world wide rivalry for markets, power and progress.
 The increasingly severe competition from several factors like, technological innovations, increase in capital
investment, freedom at national and international markets.
 Because of growing competition managing business has also increased due to No. of organizations, high degree
of division of labor and specialization, increased government regulations and control to business more socially
oriented, organized union activities to put pressures on management.
 This led to the emergence of a variety of orientations and approaches in management.
EVOLUTION OF MANAGEMENT THOUGHT
 Management Thought
 Early Contributions
 Scientific Management
 Administrative/operational management
MAJOR CONTRIBUTORS IN CLASSICAL APPROACH
 Scientific Management from Frederick W. Taylor
 Bureaucratic Management from Max Weber
 Administrative Management from Henri Fayol
SCIENTIFIC MANAGEMENT
 Scientific Management was concerned essentially with improving the operational efficiency at the shop floor
level.
 Taylor has defined Scientific Management is concerned with knowing exactly what you want men to do and
then see in that they do it in the best of the cheapest way.
 Taylor has put the emphasis on solving managerial problems in a scientific way, often he is called as father of
scientific management and his contributions as the principles of scientific management.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Taylor conducted various experiments at his work place to find out how human beings could be made more
efficient by standardizing the work and better method of doing the work. These experiments have provided the
following features of scientific management.

 Separation of Planning and Doing.

 Functional Foremanship.
 Job Analysis.
 Standardization.
 Scientific Selection and Training of Workers.
 Financial Incentives.
 Economy.
 Mental Revolution.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Separation of Planning and Doing.
Taylor emphasized the separation of planning aspect from actual doing of the work.
Taylor emphasized the planning should be left to the supervisor and the worker should emphasize only
operational work.

ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

 Functional Foremanship.
Separation of planning from doing resulted into development of supervision system which could take planning
work adequately besides keeping supervision on workers. For this Taylor, evolved the concept of functional
foremanship based on specialization of functions.
In this system eight persons are involved to direct the activities of workers. All of them give directions to
workers on different aspects of work
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Job Analysis.
Job analysis is undertaken to find out the one best way of doing the thing.
The best way of doing the thing can be determined by taking up time-motion-fatigue studies.
Time study involves the determination of time a movement takes to complete. The movement which takes
minimum time is the best one.
Motion study involves the study of movements in parts which are involved in doing a job and thereby
eliminating the wasteful movements and performing only necessary movements.
Fatigue study shows the amount and frequency of rest required in completing the work. After a certain period of
time, workers feel fatigue and cannot work with full capacity.
 Thus job analysis, as given by Taylor, suggests the fair amount of a day’s work requiring certain movements
and rest periods to complete it.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Standardization.
Standardization should be maintained in respect of instruments and tools, period of work, amount of work,
working conditions, cost of production, etc. These things should be fixed in advance on the basis of job analysis and
various elements of costs that go in performing a work.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Scientific Selection and Training of Workers.
Taylor has suggested that workers should be selected on scientific basis taking into account their education,
work experience, aptitude, physical strength etc.
A worker should be given work for which he is physically and technically most suitable.
Apart from selection, proper emphasis should be given on the training of workers which makes them more
efficient and effective.

ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

 Financial Incentives.
Financial incentives can motivate workers to put in their maximum efforts.
Taylor himself applied the concept of differential piece rate system which was highly motivating. According to
this scheme, a worker who completes the normal work gets wages at higher rate per piece and one who does not
complete gets at lower rate.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Economy.
While applying scientific management, not only scientific and technical aspects should be considered but
adequate consideration should be given to economy and profit. For this purpose, techniques of cost estimates and
control should be adopted.
The economy and profit can be achieved by making the resources more productive as well as by eliminating the
wastages.
ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT
 Mental Revolution.
Scientific management depends on the mutual co-operation between management and workers. For this co-
operation there should be mental change in both parties from conflict to co-operation.
MAJOR CONTRIBUTORS IN CLASSICAL APPROACH
 Principles of Scientific Management - Frederick W. Taylor
 Replacing Rule of Thumb with Science.
 Harmony in Group Action.
 Co-operation.
 Maximum Output.
 Development of Workers.

Principles of Scientific Management

 Replacing Rule of Thumb with Science.
Taylor has emphasized that in scientific management, organized knowledge should be applied which will
replace rule of thumb.
While the use of scientific methods denotes precision in determining any aspect of work, hence rule of thumb
emphasizes estimation.
Since exactness of various aspects of work like day’s fair work, standardization in work, differential piece rate
for payment, etc., is the basic core of scientific management.
It is essential that all these are measured precisely and should not be based on estimates.
Principles of Scientific Management
 Harmony in Group Action.
Taylor has emphasized that attempts should be made to obtain harmony in group action rather than discord.
 Group harmony suggests that there should be mutual give and take situation and proper understanding so that
group as a whole contributes to the maximum.
Principles of Scientific Management
 Co-operation.
Scientific management involves achieving co-operation rather than chaotic individualism.
Scientific management is based on mutual confidence, co-operation and goodwill. Co-operation between
management and workers can be developed through mutual understanding and a change in thanking.
Principles of Scientific Management
 Maximum Output.
Scientific management involves continuous increase in production and productivity instead of restricted
production either by management or by workers.
Therefore Taylor advised the management and the workers to “turn their attention towards increasing the size of
the surplus until the size of the surplus becomes so large that it is necessary to quarrel over how it shall be divided.”
Principles of Scientific Management
 Development of Workers.
In scientific management, all workers should be developed to the fullest extent for their own and for the
company’s highest prosperity.
Development of workers requires their scientific selection and providing them training at the work place.
Training should be provided to workers to keep them fully fit according to the requirement of new methods of
working which may be different from the non-scientific methods.

MAJOR CONTRIBUTORS IN CLASSICAL APPROACH

 Features of Bureaucratic Management from Max Weber
 Administrative Class.
 Hierarchy.
 Division of Work.
 Official Rules.
 Impersonal Relationships.
 Official Record.

Bureaucratic Management from Max Weber

 The term bureaucracy has been used widely with directed at government and business.
 Bureaucracy is an administrative system designed to accomplish large-scale administrative tasks by
systematically coordinating the work of many individuals.
 Weber has observed three types of power in organizations i.e traditional, charismatic and rational-legal or
bureaucratic. He is emphasized that bureaucratic type of tower is the ideal one.
Features of Bureaucratic Management
 Administrative Class.
Bureaucratic organizations generally have administrative class responsible for maintaining coordinative
activities of the members.
Main features of this class areas follows:-
People are paid and whole time employees.
They receive salary and other perquisites normally based on other positions.
Their tenure in the organization is determined by the rules and regulations of the organization.
They are selected for the purpose of employment based on their competence.
Features of Bureaucratic Management
 Hierarchy.
The basic feature of bureaucratic structure is that there is a hierarchy of positions in the organization.
Hierarchy is the system of ranking various positions in descending scale from top to bottom of the organization.
In bureaucratic structure, offices also follow the principle of hierarchy, that is, each lower office is subject to
control and supervision by a higher office.
Thus no office is left uncontrolled in the organization. This is fundamental concept of hierarchy in bureaucratic
organization.
 This organization serves as lines of communication and delegation of authority. It implies that communication
coming down are going up must pass through each position.

Features of Bureaucratic Management

 Division of Work.
Work of the organization is divided on the basis of specialization to take the advantages of division of labor.
Each office in the bureaucratic organization has specific sphere of competence.
This involves a sphere of obligations to perform functions which have been marked off as part of a systematic
division of labor.
Thus, division of labor tries to ensure that each office has a clearly-defined area of competence within the
organization and each official knows the areas in which he operates and the areas in which he must abstain from action
so that he does not overstep the boundary between his role and those of others. Further, division of labor also tries to
ensure that no work is left uncovered.
Features of Bureaucratic Management
 Official Rules.
A basic and most emphasized feature of bureaucratic Official structure is that administrative process is
continuous and governed by official rules.
A rational approach to organization calls for a system of maintaining rules to ensure twin requirements of
uniformity and coordination of efforts by individual members in the organization.
Rules provide the benefits of stability, continuity and predictability and each official knows precisely the outcome
of his behavior in a particular matter.

Features of Bureaucratic Management

 Impersonal Relationships.
A notable feature of bureaucracy is that relationships among individuals are governed through the system of official
authority and rules. Official positions are free from personal involvement, emotions and sentiments. Thus, decisions are
governed by rational factors rather than personal factors.
Features of Bureaucratic Management
 Official Record.
Bureaucratic organization is characterized by maintenance of proper official records. The decisions and activities of
the organization are formally recorded and preserved for future reference. This is made possible by extensive use of
filing system in the organization.
MAJOR CONTRIBUTORS IN CLASSICAL APPROACH
 General Principles of Administrative Management from Henri Fayol
 Division of Work.
 Authority and Responsibility.
 Discipline.
 Unity of Command.
 Unity of Direction.
 Subordination of individual to general Interest.
 Remuneration of Personnel.
 Centralization.
 Scalar Chain.
 Order.
 Equity.
 Stability of Tenure.
 Initiative.
 Esprit de Corps.

General Principles of Administrative Management

 Division of Work.
Work specialization results in improving efficiency of operations. The concept of division of work can be
applied to both managerial and technical functions.
General Principles of Administrative Management
 Authority and Responsibility.
Authority is defined as “the right to give orders and the power to effect obedience.” Authority can be formal or
personal. Formal authority is derived from one’s official position and personal authority is derived from factors like
intelligence and experience. Authority and responsibility go hand-in-hand. When a manager exercises authority, he
should be held responsible for getting the work done in the desired manner.
General Principles of Administrative Management
 Discipline.
Discipline is vital for running an organization smoothly. It involves obedience to authority, adherence to rules,
respect for superiors and dedication to one’s job.
General Principles of Administrative Management
 Unity of Command.
Each employee should receive orders or instructions from one superior only.
General Principles of Administrative Management
 Unity of Direction.
Activities should be organized in such a way that they all come under one plan and are supervised by one
person.
General Principles of Administrative Management
 Subordination of individual to general Interest.
Individual interests should not take precedence over the goals of the organization.
General Principles of Administrative Management
 Remuneration of Personnel.
The compensation paid to employees should be fair and based on factors like business conditions, cost of living,
productivity of employees and the ability of the firm to pay.
General Principles of Administrative Management
 Centralization.
Depending on the situation, an organization should adopt centralized or decentralized approach to make
optimum use of its personnel.
General Principles of Administrative Management
 Scalar Chain.
This refers to chain of authority that extends from the top to the bottom of an organization. The Scalar Chain
defines the communication path in an organization.
General Principles of Administrative Management
 Order.
This refers to both Material and Social Order in organizations. Material Order indicates that everything is kept
in the right place to facilitate the smooth co-ordination of work activities. Similarly, Social Order implies that the right
person is placed in the right job (this is achieved by having a proper selection procedure in the organization).
General Principles of Administrative Management
 Equity.
All employees should be treated fairly. A manager should treat all employees in the same manner without
prejudice.

General Principles of Administrative Management

 Stability of Tenure of personnel.
A high labor turnover should be prevented and manager should motivate their employees to do a batter job.

General Principles of Administrative Management

 Initiative.
Employees should be encouraged to give suggestions and develop new and better work practices.
General Principles of Administrative Management
 Esprit de Corps.
This means “a sense of union”. Management must inculcate team spirit in its employees.
Dissimilarity between contributions of Taylor and Fayol
Basis of difference - Taylor
 Perspective - Shop Floor Level
 Focus - Efficiency through work simplification and standardization
 Orientation – Production and engineering
 Results – Scientific observation and measurement
 Overall contributions – Basis for accomplishment on the production line

Dissimilarity between contributions of Taylor and Fayol

Basis of difference - Fayol
 Perspective – Higher Management Level
 Focus – Overall efficiency by observing certain principles
 Orientation – Managerial functions
 Results – Personal experiences translated into universal truths
 Overall contributions – Systematic theory of management

EVOLUTION OF MANAGEMENT THOUGHT

 Human relations approach

HAWTHORNE EXPERIMENTS AND HUMAN RELATIONS – ELTON MAYO
 Researchers tried to investigate the reasons for human behaviour at work.
 Such findings generated a new phenomenon about the human behaviour and focused attention on the human
relations approach of management.
 For the first time, an intensive and systematic analysis of human factor in organizations was made in the form of
Hawthorne experiments.
 Because of their historical importance to the behavioural approach to the analysis of management problems.
HAWTHORNE EXPERIMENTS AND HUMAN RELATIONS – ELTON MAYO
 The researchers set to study the relationship between productivity and physical working conditions. They
conducted various researches in four phases which are as follows:-
 Experiments to determine the effects of changes in illumination on productivity.
 Experiments to determine the effects of changes in hours and other working conditions on productivity.
 Conducting plant wide interviews to determine worker attitudes and sentiments.
 Determination and analysis of social organization at work.
ILLUMINATION EXPERIMENTS
 Illumination experiments were undertaken to find out how varying levels of illumination i.e amount of light at
the workplace.
 The hypothesis was that with higher illumination, productivity would increase.
 Two group of workers was chosen i.e Experimental group & Control group.
 Experimental Group was exposed to varying intensities of illumination.
 Control Group, continued to work under constant intensities of illumination.
ILLUMINATION EXPERIMENTS
 When the researchers increased the illumination in the experimental group both the groups increased
production., when illumination decreased both the groups increased production.
 The production from experimental group decreased when the illumination was decreased to the level of
moonlight.
 Thus it was concluded that illumination did not have any effect on productivity.

RELAY ASSEMBLY TEST ROOM EXPERIMENTS

 The researchers set up a relay assembly test room and two girls were chosen. These girls were asked to choose
fore more girls as coworkers.
 The work was related to assembly of telephone relays. This relay consists of parts which girls assembled into
finished products.
 An observer was associated with girls to supervise their work.
 The girls were given opportunity to express their viewpoints to the supervisor. And some cases they were
allowed to take decisions.
RELAY ASSEMBLY TEST ROOM EXPERIMENTS
 Following are the changes and outcomes:-
 With the incentive system – the productivity increased as compared before.
 Two five minute rests – One in morning and other in evening session. The productivity increased.
 The rest period was reduced but frequency was increased. The production decreased and girls complained that
to many rest intervals affected the rhythm of the work.
 In the two rest in morning, coffee or soup were served and evening sandwich was provided along with snacks.
Productivity increased.
 Changes in working hours the girls were allowed to leave at 4.30 pm instead of usual 5.00 p.m. Productivity
increased.
RELAY ASSEMBLY TEST ROOM EXPERIMENTS
 As changes was introduced absenteeism decreased and morale increased and less supervision was required.
 Researchers they decided to go back to original position i.e no rest and other benefits. Surprisingly productivity
increased and they were expecting that productivity might decrease.
 They made a conclusion that productivity increased not because of positive changes in work, but because of
change in the girl’s attitude towards work. Because of that a feeling of stability and sense of belongingness.
 Since there was more freedom of work, they developed a sense of responsibility and self-discipline.
MASS INTERVIEWING PROGRAMME
 During the course of experiments, about 20,000 interviews were conducted.
 To determine employee’s attitudes towards company, supervision, insurance plans, promotion and wages.
 Initially these interviews were conducted by means of direct questioning. The method was changed to non-
directive interviewing where interviewer was asked to listen.
MASS INTERVIEWING PROGRAMME
 The interview program gives valuable insights about human behaviour. Some of the major findings are as
follows:-
 A complaint is not necessarily an objective. It is a symptom of personal disturbances within.
 It was related to employee satisfaction or dissatisfaction. As the employees view them from their personal
situation.
 Personal situation involves sentiments, desires and interests of the person.
 The position of a worker assigns meaning and value to the events, objects and features of his environment such
as hours of work, wages etc.
 The social organization of the company represents a system of values from which the worker derives
satisfaction or dissatisfaction according to the perception of his social status.
 The social demands of the worker are influenced by social experience in groups both inside and outside the
work plant.

During the course of interviews, it was discovered that worker’s behaviour was been influenced by group
behaviour.
BANK WIRING OBSERVATION ROOM EXPERIMENTS
These experiments were carried with a view to analyze the functioning of small group and its impact on
individual behaviour.
 A group of 14 male workers was employed in the bank wiring room. 9 wiremen, 3 solder men and 2 inspectors.
 The work involved attaching wire to switches for certain equipment used in telephone exchange.
 Hourly wage rate for the personnel was based on average output of each worker while bonus was to be
determined on the basis of average group output.
 The hypothesis was that in order to earn more workers would produce more and in order to take the advantages
of group bonus.
BANK WIRING OBSERVATION ROOM EXPERIMENTS
However this hypothesis did not hold valid. Workers decided the target for themselves which was lower than
the company’s target. The workers gave following reasons for the restricted output.
 Fear of unemployment – If there would be more production per head, some of the workers would be put out of
employment.
 Fear of raising the standards – Most workers were convinced that once they had reached the standard rate of
production, management would rise the standard of production.
 Protection of slower workers – The workers were friendly on the job as well as off the job. They appreciated the
fact that they had family responsibility that required them to remain in the job. Since slower workers were likely to be
retrenched, the faster workers protected them by not over producing.
BANK WIRING OBSERVATION ROOM EXPERIMENTS
 Satisfaction on the part of management – According to workers management seemed to accept the lower
production rate as no one was being fired.

During the course of experiments, workers were counseled for good human relations in the company’s plant.
The counseling was in regard to personal adjustment, supervision, employee relations and management-employee
relations. The supervisors tend to understand and accept the problems of workers and management tried to sense their
feelings which were helpful in formulating the action for resolving management-employee conflicts.

EVOLUTION OF MANAGEMENT THOUGHT

 Management Thought
 Social systems approach
SOCIAL SYSTEMS APPROACH
 Social systems approach of management has extended the implications of human relations approach. The ideas
has been developed by Chester Barnard who synthesized the concept of social systems approach.
 According to this approach, an organization is essentially a cultural system composed of people who work in
co-operation, for achieving organizational goals, a co-operative system can be developed by understanding the
behaviour of people in groups.
SOCIAL SYSTEMS APPROACH
The major features of this approach are as follows:-
 Organization is a social system, a system of cultural relationships.
 Relationships exist among the external as well as internal environment of the organization.
 Co-operation among group members is necessary for the achievement of organizational objectives.
 For effective management, efforts should be made for establishing harmony between the goals of the
organization and the various groups.
CONTRIBUTION OF BARNARD
 In determining the tasks of executives, he or she has analyzed the nature of co-operative social system.
 The major contributions of Barnard can be presented as follows:-
 Concept of Organization
 Formal and Informal Organizations
 Elements of Organization
 Authority
 Functions of the Executive
 Motivation
 Executive Effectiveness
 Organizational Equilibrium

CONTRIBUTION OF BARNARD
 Concept of Organization:-
Barnard has defined formal organization as a system of consciously coordinated activities of two or more
persons.
An organization exists when the following three conditions are fulfilled.
 There are persons able to communicate with each other.
 They are willing to contribute to the action.
 They attempt to accomplish a common purpose.
CONTRIBUTION OF BARNARD
 Formal and Informal Organizations:-

Organizations can be divided into two parts; Formal and Informal.

 The formal organization has consciously coordinated interactions which have a deliberate and common purpose.

The informal organization exists to overcome the problems of formal organization.

In fact Barnard has suggested that executives should encourage the development of informal organization to
serve as a means of communication, to bring cohesion in the organization.

Both the formal and the informal organizations depend on each other and there is a continuous interaction
between the two.

Thus in managing an organization, the manager should take into account both types of organization.
CONTRIBUTION OF BARNARD
 Elements of Organization:-
According to Barnard, there are four elements of a formal organization.
 A system of functionalization so that people can specialize.
 A system of effective and efficient incentives so as to induce people to contribute to group action.
 A system of power which will lead group members to accept the decisions of the executives.
 A system of logical decision-making.
CONTRIBUTION OF BARNARD
 Authority:-
Barnard does not agree with the classical view that authority transcends from the top to down. He has given a
new concept of authority which is termed as ‘acceptance theory of authority’ or ‘bottom-up authority’. In his opinion
they person does not obey an order because it has been given by superior but he will accept the communication only
when four conditions are met.
 He can understand the communication.
 He believes that it is not inconsistent with the organizational purpose.
 He believes it to be compatible with his personal interest as a whole.
 He is mentally and physically able to comply with it.
CONTRIBUTION OF BARNARD
 Functions of the Executive:-
Barnard has identified three types of functions which an executive performs in a formal organization.
 Maintenance of organizational communication through formal interactions.
 Securing of essential services from individuals in the organization so as to achieve organizational purpose.
 The formulation and definition of organizational purpose.
CONTRIBUTION OF BARNARD
 Motivation:-
Apart from financial incentives which have their own limitations in motivating the people. Barnard has
suggested a number of non-financial techniques for motivating the people. i.e opportunity if power and distinction,
pride of workmanship, pleasant organization, participation, mutual supporting, personal attitudes and feeling of
belongingness.
CONTRIBUTION OF BARNARD
 Executive Effectiveness:-
To make the executive effective requires a high order or responsible leadership.
Leadership is the most strategic factor in securing co-operation from the people.
Executive leadership demands high calibre, technological competence, technical and social skills.
CONTRIBUTION OF BARNARD
 Organizational Equilibrium:-
Organizational equilibrium refers to the matching of individual efforts and organizational efforts to satisfy
individuals.
The co-operation of individuals with the organization brings forth new activities.
The equilibrium is not static but dynamic. Demands and aspirations of individuals change and the organization
has to cope with the dynamic situation.
Thus, the organization has to take into account the changes in the society.
 The above contributions of Barnard show how he was concerned for the development of the organization
through social systems. His contributions are regarded quite high in management.

EVOLUTION OF MANAGEMENT THOUGHT

 Management Thought
 Decision theory approach
DECISION THEORY APPROACH
 Decision theory approach looks at the basic problem of management around decision-making – the selection of
a suitable course of action out of the given alternatives. Major contributions in this approach has come from Simon.
 The major emphasis of this approach is that decision-making is the job of every manager.
 The manager is a decision-maker and the organization is a decision-making unit.
DECISION THEORY APPROACH
Decision theory approach has the following features:-
 Management is essentially decision-making.
 The members of the organization are decision-makers and problem-solvers.
 Organization can be created as a combination of various decision centres. The level and importance of
organizational members are determined on the basis of importance of decisions which they make.
 Quality of decision affects the organizational effectiveness.
 Thus it covers the entire range of human activities in organization.
DECISION THEORY APPROACH
 Herbert Simon, a Noble prize winner in Economics, has made significant contributions in the field of
management particularly administrative behaviour and decision making.
 His contributions cover both social systems and decision theory approaches.
 His major contributions to management are as follows:-
 Concept of Organization
 Decision-making
 Bounded Rationality
 Administrative Man
 Organizational Communication
CONTRIBUTIONS OF HERBERT SIMON
 Concept of Organization:-
Simon has described an organization as a complex network of decisional processes.
He has viewed the organization containing distribution and allocation of decision-making functions.
Thus the west way to analyze an organization is to find out where and by whom decisions are made.
CONTRIBUTIONS OF HERBERT SIMON
 Decision-making:-
This is the greatest contribution of Simon is in the field of decision-making. Decision-making is the core of
management and management is synonymous with decision-making.
According to him the decision process can be broken in three sequential types:-
 Intelligent activity:- The initial phase of searching the environment for conditions calling for decisions.
 Design Activity:- The phase of inventing, developing and analyzing possible course of action to take place.
 Choose Activity:- The final phase of action choice selecting a particular course of action from those available.
CONTRIBUTIONS OF HERBERT SIMON
 Bounded Rationality:-
Simon is of the view that man is not completely rational. He has criticized the theories which are based on the
assumptions of complete rationality. He has advocated the principle of bounded rationality.
Accordingly managers do not go for maximum satisfaction out of a decision but are satisfied with good enough
satisfaction from a decision.
Managers cannot maximize an account of various limitations and constraints.
CONTRIBUTIONS OF HERBERT SIMON
 Administrative Man:-
Simon has given the concept of administrative man as the model of decision-making. The model has been based
on the following assumptions.
 Administrative man adopts satisfying approach in decision-making rather than the maximizing approach of
economic man.
 He perceives the world as a simplified model of real world.
 He can make his choice without first determining all possible alternatives and without ascertaining that these are
in fact all the alternatives.
 He is able to make decisions with relatively simple rule of thumb, or tricks of trade or force of habit. The
administrative man model describes the decision-making process of managers.
CONTRIBUTIONS OF HERBERT SIMON
 Organization Communication:-
Simon has emphasized the role of communication in organization. According to him there are three stages in the
communication process.
Initiation, transmittal and receipt of information.
In order to overcome the problem of communication, he has emphasized the role of informal communication
and has attached less importance to the formal network of authority.

CONTRIBUTIONS OF PETER DRUCKER

The main contributions of Drucker can be presented as follows:-
 Nature of Management
 Management Functions
 Organization structure
 Federalism
 Management by Objectives
 Organizational Changes
CONTRIBUTIONS OF PETER DRUCKER
 Nature of Management:-
Drucker is against bureaucratic management and has emphasized management with creative and innovations
characteristics.
The basic objective of management is to lead towards innovation. The concept of innovation is quite broad. It
may include development of new ideas, combining of old and new ideas, adaptation of ideas from other fields and
encouraging others to carry out innovation.
CONTRIBUTIONS OF PETER DRUCKER
 Nature of Management:-
He has treated management as a discipline as well as profession. As a discipline, management has its one tools,
skills, techniques and approaches. However, management is more a practice rather than a science.
Drucker does not advocate to treat management as a strict profession but only a liberal profession which places
more emphasis that managers should not only have skills and techniques but should have right perspective putting the
things into practice.
So that they can understand the social and cultural requirements of various organizations and countries.
CONTRIBUTIONS OF PETER DRUCKER
 Management Functions:-
Drucker sees management through its tasks. Accordingly, these are three basic functions of a manager which he
must perform to enable the institution to make its contributions for the specific purpose and mission of institution.
Making work productive and the worker achieving and managing social impacts and social responsibilities. A
manager has to act as administrator and as entrepreneur in redirecting the resources for increasing results.
CONTRIBUTIONS OF PETER DRUCKER
 Management Functions:-
Thus, a manager has to perform several functions i.e setting of objectives, decision-making, organizing and
motivating.
Drucker has attached great importance to the objective setting function and has specified eight areas where clear
objective setting is required. These are:- market standing, innovation, productivity, physical and financial resources,
profitability, managerial performance and development, worker performance and attitude and public responsibility.
CONTRIBUTIONS OF PETER DRUCKER
 Organization Structure:-
 Drucker has emphasized three basic characteristics of an effective organization structure:-
1. Enterprise should be organized for performance.
2. It should contain the least possible number of managerial levels.
3. It must make possible the training and testing of tomorrow's top managers, giving responsibility to a
manager while still he is young.
CONTRIBUTIONS OF PETER DRUCKER
 Organization Structure:-
Drucker has identified three basic aspects in organizing i.e activity analysis, decision analysis and relation
analysis.
 An activity analysis shows what work has to be performed, or kind of job put together and which emphasize
given to each activity in the organization structure.
 Decision analysis takes into account the degree of futurity in the decision. The impact of a decision over other
functions. Whether the decision is periodically recurrent or rare. Such an analysis will determine the level at which the
decision can be made.
 Relation analysis helps in defining the structure and also to give guidance in manning the structure.
CONTRIBUTIONS OF PETER DRUCKER
 Federalism:-
Drucker has advocated the concept of federalism. Federalism refers to centralized control in decentralized
structure. Decentralized structure goes far beyond the delegation of authority.
He has emphasized the close links between the decisions adopted by the top management on the one hand and
by the autonomous unit on the other.
CONTRIBUTIONS OF PETER DRUCKER
 Federalism:-
Federalism has certain positive values over other methods of organizing. Which are as follows:-
 It sets the top management free to devote itself to its proper functions.
 It defines the functions and responsibilities of the operating jobs.
 It creates a yardstick to measure their success and effectiveness in operating jobs.
 It helps to resolve the problem of continuity giving to managers of various units, in top management problems
and functions while in an operating position.
CONTRIBUTIONS OF PETER DRUCKER
 Management by Objectives:-
Management by Objectives (MBO) is regarded as one of the most important contributions of Drucker to the
discipline of Management.
MBO includes method of planning, setting standards, performance appraisal and motivation.
It transforms the basic assumptions of managing from exercising control to self-control. In order to practice
MBO, The organization must change itself. MBO has become such a popular way of managing that today it is regarded
as the most modern management approach. Hence it has revolutionalized the management process.
CONTRIBUTIONS OF PETER DRUCKER
 Organizational Changes:-
Drucker has visualized rapid changes in the society because of rapid technological development. Though he is
not resistant to change, he feels concerned for the rapid changes and their impact on human life.
Human beings should take as a challenges for making the society better.
This can be done by developing dynamic organizations which are able to absorb changes much faster than static
ones.
Drucker’s contributions have made tremendous impact on the management practices. His contributions have be
recognized even by the management thinkers.
MANAGEMENT BY OBJECTIVES
Management by objectives (MBO), or management by results (MBR)
It focuses sharply on the objectives or results which a manager is expected to achieve within a specified period.
It also emphasizes participative management, an approach which provides high motivation to individuals in an
organization.
Both business and non-business, have adopted this in some form or the other.
MANAGEMENT BY OBJECTIVES
 MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic
manner, consciously directed towards the effective and efficient achievement of organizational objectives.
 MBO is a result-centered, non-specialist, operational managerial process for effective utilization of material,
physical, and human resources of the organization by integrating the individual with the organization and organization
with the environment.
MANAGEMENT BY OBJECTIVES
 MBO is the joint application of a number of principles and techniques. It works as an integrating device.
 MBO tries to match objectives and resources. Objectives are established for all the levels of the organization,
including the corporate level, all the units or departments and individual managers. Objectives provide the means for
integrating the organization with its environment, its subsystems and people.
MANAGEMENT BY OBJECTIVES
 The MBO is characterized by the participation of concerned managers in objective setting and performance
reviews. Therefore, each manager takes active part in setting objectives for himself and also in evaluating his
performance about how he is performing.
 Periodic review of performance is an important feature of MBO . The performance review is held regularly,
normally once a year.

PROCESS OF MBO

PROCESS OF MBO
 MBO is a system for achieving organizational objectives, enhancement of employee commitment ad
participation.
 Setting of Organizational Purpose and Objectives.
 Key Result Areas.
 Setting Subordinates’ Objectives.
 Matching Resources with Objectives.
 Appraisal.
 Recycling.

PROCESS OF MBO
 Setting of Organizational Purpose and Objectives.
The first basic step in MBO is the definition of organizational purpose and objectives.
To achieve growth through expansion in the same line of business or diversify.
Usually the objective setting starts at the top level of the organization and moves downward to the lowest
managerial levels.

PROCESS OF MBO
 Key Result Areas.
Organizational objectives and planning premises together provide the basis for the identification of key result
areas (KRAs)
KRAs also indicate the present state of an organization’s health and the top management perspective for the
future.
Examples of KRAs applicable to most of the business organizations are:-
 Profitability
 Market Standing
 Innovation
 Productivity
 Worker performance
 Financial and physical resources
 Manager performance
 Public responsibility
PROCESS OF MBO
 Setting Subordinates’ Objectives.
The organizational objectives are achieved through individuals. Therefore, each individual manager must know
in advance what he is expected to achieve. Every manager in the managerial hierarchy is both superior and subordinate
except the person at the top level and the lowest level. Therefore, there is a series of superior and subordinate
relationship.
Thereafter, the final objectives for the subordinate are set by the mutual negotiation between superior and
subordinate.

PROCESS OF MBO
 Matching Resources with Objectives.
It is the proper application of resources which ensures objective achievement.
The allocation and movement of resources should be done in consultation with the subordinate manager.
PROCESS OF MBO
 Appraisal.
Appraisal aspect of MBO tries to measure whether the subordinate is achieving his objective or not. If not, what
are the problems and how these problems can be overcome. Appraisal is undertaken as an on-going process.
It is taken as a matter of system to ensure that everything is going as planned and the organization is able to
achieve its objectives.
PROCESS OF MBO
 Recycling.
Objective setting is a joint process through interaction between superior and subordinate. Therefore, what
happens at each level may affect other levels also. The outcome of appraisal at one level is recycled to see if the
objectives have been set properly at the level concerned and also at the next higher level.
BENEFITS OF MBO
 Better Managing.
 Clarity in Organizational Action.
 Personnel Satisfaction.
 Basis for Organizational Change.

BENEFITS OF MBO
 Better Managing.
MBO helps in better managing he organizational resources and activities. Resources and activities are put in
such a way that they result into better performance. There are five basic assumptions about what improves
performance. These are clarity of objectives, role clarity, periodic feedback of performance, participation by managers
in the management process, and realization that there is always scope for improvement of performance in every
situation.
BENEFITS OF MBO
 Clarity in Organizational Action.
MBO tends to provide the key result areas (KRAs) where organizational efforts are needed. Since
organizational objectives are defined very clearly, they help in relating the organization with its environment.
BENEFITS OF MBO
 Personnel Satisfaction.
MBO provides greatest opportunity for personnel satisfaction. This is possible because of tow closely related
phenomena: participation in objective setting and rational performance appraisal. When the individuals are involved in
objective setting, they derive satisfaction because of the feeling that they are important to the organization.
They enjoy considerable authority which is a source of inspiration for better performance.
They are very sure that their performance will be measured in terms of their actual performance and will not be
affected by managerial prejudices, biases and other personal factors.

BENEFITS OF MBO
 Basis for Organizational Change.
MBO stimulates organizational change and provides a framework and guidelines for planned change, enabling
the top management to initiate, plan direct and control the direction and speed of change. In any organization, change is
required because of change in external factors or in internal factors or changes taking place in both the factors
simultaneously.
A very difficult problem comes in the way of organizational change because people resist it.
PROBLEMS AND LIMITATIONS OF MBO
 MBO is not without its problems and weaknesses.
 Some of the problems are inherent in MBO system itself while others emerge because of wrong
implementation.
 Time and Cost.
 Failure to teach MBO Philosophy.
 Problems in Objective Setting.
 Emphasis on Short-term Objectives.
 Inflexibility.
 Frustration.
PROBLEMS AND LIMITATIONS OF MBO
 Time and Cost.
MBO is not as simple as it looks to be. It is a process which requires large amount of the most scarce in the
organization-time of the senior managers.
Sometimes, managers get frustrated and feel overburdened. Further, MBO generates paper work because large
number of forms are to be designed and put into practice.
Therefore, there is a problem of communication overload.
PROBLEMS AND LIMITATIONS OF MBO
 Failure to teach MBO Philosophy.
MBO is a philosophy of managing an organization in a new way. However, managers fail to understand and
appreciate this new approach. They have a number of doubts about MBO like what purpose is served by MBO, how the
performance is to be appraised, and how organization will benefit.
They take MBO as another tool for control. Moreover, their old way of thinking puts difficulty in introducing
MBO because they may not appreciate the full view of MBO.
PROBLEMS AND LIMITATIONS OF MBO
 Problems in Objective Setting.
MBO requires verifiable objectives against which performance can be measured. However, setting such
objectives is difficult at least in some areas. Objectives are more in the form of statement rather than in quantitative
form.
PROBLEMS AND LIMITATIONS OF MBO
 Emphasis on Short-term Objectives.
Sometimes, in order to be more precise there is a tendency to emphasize on short-term objectives usually for a
year on even less. No doubt, this may help in performance appraisal but there is always a danger in emphasizing short-
term objectives at the cost of long-term objectives.
PROBLEMS AND LIMITATIONS OF MBO
 Inflexibility.
MBO represents the danger of inflexibility in the organization, particularly when the objectives need to be
changed.
However, many mangers often hesitate to change objectives during a period of time. Thus, inflexibility created
by applying MBO may cause harm than what it may contribute.
PROBLEMS AND LIMITATIONS OF MBO
 Frustration.
Sometimes MBO creates frustration among managers. This frustration may be because of two reasons: First, as
experience shows, many organizations could not implement MBO properly, resulting into chaos.
Introduction of MBO tends to arouse high expectation for rapid change, particularly among the young and
junior managers. They begin to see the vision of a new world for their organization in terms of growth, profitability,
and for themselves in terms of career advancement. If the rate of change is slower than expected due to any reason,
managers begin to feel frustration.
In spite to these obstacles and problems in MBO, it continues to be a way of managing the organization. In fact
many of the problems and weaknesses of MBO can be over come by implementing it properly.
EVOLUTION OF MANAGEMENT THOUGHT
 Management Thought
 Management science approach
 Human behavior approach
MANAGEMENT SCIENCE APPROACH
Management science approach, also known as mathematical or quantitative measurement approach, visualizes
management as a logical entity, the action of which can be expressed in terms of mathematical symbols, relationships
and measurement data. The primary focus of this approach is the mathematical model.
Through this device, model can be expressed in terms which optimize that goal. This approach draws many
things from the decision theory approach and, in fact, provides many techniques for rational decision-making.

MANAGEMENT SCIENCE APPROACH

The major features of this approach are as follows:-
 Management is regarded as the problem-solving mechanism with the help of the mathematical tools and
techniques.
 Management problems can be described in terms of mathematical symbols and data. Thus every managerial
activity can be quantified.
 This approach covers decision-making, systems analysis and some aspects of human behaviour.
 Operations research, mathematical tools, simulation, models etc., are the basic methodologies to solve
managerial problems.

MANAGEMENT SCIENCE APPROACH

Management science approach is a fast developing one in analyzing and understanding management.
Various mathematical tools like sampling, linear programming, game theory, time series analysis, simulation,
waiting line theory etc., have provided more exactness in solving managerial problems.
MANAGEMENT SCIENCE APPROACH
Another name commonly used for management science is operations research. George B. Dantzig is considered
the father of Operations Research.
Recent advances in computers have made it possible to use complex mathematical and statistical models in the
management of organizations.
MANAGEMENT SCIENCE APPROACH
Management Science techniques are widely used in the following areas:-
 Capital Budgeting and cash flow management
 Production scheduling
 Development of product strategies
 Planning for human resource development programs
 Maintenance of optimal inventory levels.
 Aircraft scheduling
MANAGEMENT SCIENCE APPROACH
Various mathematical tools like the waiting line theory or queuing theory, Linear programming, the program
evaluation review technique (PERT), the critical path method (CPM), the decision theory, the simulation theory, the
probability theory, sampling, time series analysis etc, have increased the effectiveness of managerial decision-making.
MANAGEMENT SCIENCE APPROACH
To apply a quantitative approach to decision-making, individuals with mathematical, statistical, engineering,
economics and business background skills are required.
Since one person cannot have all these skills the quantitative method requires a team approach to decision-
making.
This approach has been criticized for its overemphasis of mathematical tools. Many managerial activities cannot
be quantified because they involve human beings who are governed by many irrational elements.
HUMAN BEHAVIOUR APPROACH
 Human behaviour approach is the outcome of the thoughts developed by behavioural scientists.
 Since management involves getting things done by people, the study of management must revolve around
human behaviour.
 The approach, also known as ‘leadership’ ‘behavioural science’ or human resource approach.
HUMAN BEHAVIOUR APPROACH
 The human behaviour approach emphasizes human resources in an organization more as compared to physical
and financial resources.
 Since this approach studies human behaviour ranging from personality dynamics of individuals at one extreme
to the relations of culture at the other.
 This can be divided into two groups i.e interpersonal behaviour approach and group behaviour approach.
 Writers on interpersonal behaviour approach are heavily oriented towards individual psychology while writers
on group behaviour approach rely on social psychology and emphasize on organizational behaviour.
HUMAN BEHAVIOUR APPROACH
Major conclusions of the contributions made by behaviouralists, are as follows:-
 People do not dislike work. If they have helped to establish objectives, they will want to achieve them, In fact,
job itself is a source of motivation and satisfaction to employees.
 Most people can exercise a great deal of self-direction, self-control and creativity than are required in their
current job. Therefore, there remains untapped potential among them.
 The manager’s basic job is to use the untapped human potential in the service of the organization.
 The manager should create a healthy environment wherein all subordinates can contribute to the best of their
capacity. The environment should provide a healthy, safe, comfortable and convenient place to work.
HUMAN BEHAVIOUR APPROACH
 The manager should provide for self-direction by subordinates and they must be encouraged to participate fully
in all important matters.
 Operating efficiency can be improved by expanding the subordinate influence, self-direction and self-control.
 Work satisfaction can improve as a ‘by-product’ of subordinates making full use of their potential.

EVOLUTION OF MANAGEMENT THOUGHT

 Management Thought
 Systems approach
 Contingency approach
SYSTEMS APPROACH
INPUTS TRANSFORMATION OUTPUTS
(Resources) PROCESS
(Managerial &
Technological abilities)

Labor Planning Goods

Materials Organizing Services
Capital Staffing Profits & Losses
Machinery Leading Employee
satisfaction
Information Controlling
Technology
SYSTEMS APPROACH
 Systems approach has attracted the maximum attention of thinkers in management particularly in the present
era.
 Those who advocate a systems view contend that an organization cannot exist in isolation and that management
cannot function effectively without considering external environmental factors.
 Churchman West is one of the pioneer of systems approach to management.
 The systems approach gives managers a new way of looking at an organization as a whole and as a part of the
larger, external environment.
SYSTEMS APPROACH
 According to this theory, an organizational system has four major components:-
 Inputs – Money
 Materials, man, machines and informational sources – are required to produce goods and services.
 Transformation processes are throughputs – Managerial and technical abilities – are used to convert inputs into
outputs.
 Outputs are the products, services, profits and other results produced by the organization.
 Feedback refers to the information about the outcomes and the position of the organization relative to the
environment it operates in.
SYSTEMS APPROACH
 The two basic types of systems are closed and open systems:-
 Closed Systems – The system that does not interact with its environment.
 Open Systems – The system that interacts with its environment.
SYSTEMS APPROACH
 Fredrick Taylor, for instance regarded people and organizations as closed systems.
 In reality, all organizations are open systems as they are dependent on interactions with their environment.
 Whether it is a new product decision or a decision related to the employees of the organization, the organization
must consider the role and influence of environmental factors.
CONTINGENCY APPROACH

Universal View:
Same managerial principles
Apply to all situation

Situation 1

Contingency View: Situation 2

Managerial action varies
From situation to situation
Situation 3
CONTINGENCY APPROACH
 This is also known as the situational theory, This approach has been widely used in recent years to integrate
management theory with the increasing complexity of organizations.
 Accordingly to this theory, there is no one best way to manage all situations. In other words, there is no one best
way to manage. The response “It depends” holds good for several management situations.
CONTINGENCY APPROACH
 The contingency approach was developed by managers, consultants and researchers who tried to apply the
concepts of the major schools of management thought to real-life situations.
 Paul Hersey and Ken Blanchard developed the contingency approach to leadership.
 Managers, who follow this approach, make business decisions or adopt a particular management style only after
carefully considering all situational factors.
 According to the contingency approach, “The task of managers is to identify which technique will, in a
particular situation under particular circumstances, and at a particular time, best contribute to the attainment of
management goals”.

Professionalization of Management
 The term ‘Professional Management’ has become a glamorous expression in corporate management in India.
 The concept of professional management has become synonym of progressive and efficient management and
since no one likes to called as backward and inefficient. Hence there is a craze for the adoption of professional
management.
Professionalization of Management
 To assess the present status of professionalization of Indian Management, many studies have been conducted.
The research is found out the extent to which Indian Management has been professionalized.
 The basic characteristics of management as a profession are found in Indian Management in varying degrees.
 Formulation of a code of conduct by All India Management Association suggest that there is professionalization
of management in India.
 From this point of view, Indian Management can be divided into two parts:-
 Traditionally managed sector
 Professionally managed sector
Professionalization of Management
Traditionally managed sector
 Indian management is described as ‘family management’ with traditional values.
 The two distinct features of family management are – both ownership and control of the organization are in the
hands of the members & the other one is organizational objective is to maximize profit even if it necessary exploitation
of the weaker sections of the society. This type of management maintains the control of the organization by value
system of the family.
 Decision-making is centralized at the top, with the head of the family, who is no professionalism, but rely more
with the experience and intuition, the decisions are not likely to be as good as that of a modern professional board.
Professionalization of Management
Traditionally managed sector
 Professionalization does not come automatically by employment of people with professional degrees, unless
the professionals have the necessary authority and use their professionalism in decision-making.
 It can be suggested that in many private sector and public sector organizations, there is lack of
professionalization of management. Management, being a key factor in the economic development of the country and
development of individual organizations, lack of professional content in it has been one of the main reasons for the
unsatisfactory performance of these organizations.
Professionalization of Management
Traditionally managed sector
The basic reasons for lack of professional management are as follows:-
 The popular belief that business is a matter of commonsense and luck reflects this attitude.
 However, the situation is changing fast with increasing size of organizations, complexity of managing business,
and more competitive environment. But very few business owners have realized this fact and others are still in old
concept of managing business.
 Most of the organizations in the private sector are generally one-man show, Often the owner also performs the
functions of a manager. This is true not only for the small-scale organizations but also for the large ones even though
they might have been organized as joint stock company form of organizations.
Professionalization of Management
Traditionally managed sector
 When the owner performs managerial functions, his perspective is quite different from the professional
manager. Owner-manager’s style of functioning is normally centralized and he believes in more direct control and
often discourages professionalization of management.
 The emergence and development of public sector enterprises have put pressure on the government to find out
suitable managers for these enterprises. These managers were originally deputed from the civil services who had
altogether different perspective and style of functioning.
Professionalization of Management
Traditionally managed sector
 The situation in this respect is changing because the government has now realized the need for a suitable
management cadre for this sector.
 Business in India has not yet reached the level of sophistication as in the developed countries requiring the use
of sophisticated tools and techniques. By Western standard, the business is still in its infancy. In the absence of proper
development of business, the management pattern has also not developed. In fact, many sectors are still under
managed, In such a case, there is very little scope for professionalization of management in these sectors.
Professionalization of Management
Professionally managed Sector
 As against traditionally managed sector, there are various organizations, both in private sector as well as in
public sector, whose management is highly professionalized. There are numerous such companies like HUL, ITC,
Infosys, Wipro, Tata Iron and Steel Company, TELCO, and so on in private sector and BHEL, IOC in public sector.
 These companies have inducted management graduates at various levels of management, introduced modern
concepts of management, set organizational objectives conducive to social needs, and motivated their personnel to
achieve high level of professional competence.
Professionalization of Management
Professionally managed Sector
The main reasons for the professionalization in this sector are as follows:-
 The most important factor contributing to professionalization of Indian management is the international impact.
 It can be observed that modern management concepts were first introduced by multinationals operating in India.
 With the increase in size and complexity of business organizations of Indian origin, many of them also adopted
the sophisticated management techniques. The requirement of managing large and complex businesses resulted in the
re-examination of the traditional way of managing these businesses.
Professionalization of Management
Professionally managed Sector
 The government took a decision to induct professional managers in their enterprises with the responsibility of
professionalization of the entire managerial cadre and process. This has given a way for professionalization of
management in many public sectors.
 When the owner-managers were not able to manage the organizations because of increasing competition and
consequently complexity of management, they yielded way to the professional managers.
 Hence management positions should be held by persons who have professional skills and adequate training.
Professionalization of Management
Professionally managed Sector
 While the previous factors have generated the need for professionalization, availability of trained and educated
professional managers has facilitated the process of professionalization of management.
 Many business organizations have also established their management development centres. Prominent among
these are:- Steel Authority of India, LIC, most of the commercial banks. Tata Iron and Steel Company, TELCO, HUL,
ITC etc., in private sector.
 Even comparatively smaller organizations are also sending their managers to short-term management
development programmes. This has resulted in a change in the perspective of old owner-managers.
Professionalization of Management
 Hence after the improvements management in India is marching fast towards professionalization, through a
large part of it is still traditional.
 However, in the time to come, the process of professionalization of management is likely to be faster because of
the increasing complexity of managing business which is not possible for traditional management and also because of
increasing availability of professionally trained managers.

Ethics In Management
&
Social Responsibilites of Business
CONTENTS
INTRODUCTION
BUSINESS ETHICS
UNETHICAL BUSINESS PRACTICES
INSTITUTIONALIZING ETHICS

NEED & SIGNIFICANCE OF BUSINESS ETHICS

SOCIAL RESPONSIBILITIES OF BUSINESS

CONCEPT OF SOCIAL RESPONSIBILITY

KINDS OF RESPONSIBILITIES
INTERNAL RESPONSIBILITIES
EXTERNAL RESPONSIBILITIES

QUESTIONS
 Why is management called a profession?
 What is MBO? How is goal setting done in MBO?
 List the dysfunctional consequences of bureaucratic controls?
 Discuss the process of rational decision making and limitations to it as pointed out by ‘Satificing’ concept of
Herbert and Simon.
 Explain contingency approach to management.
 Briefly explain the process of management.
 Discuss in brief the social responsibilities of business.
 Outline Taylor’s scientific management and examine its relevance to management in the present-day business.
 “Effective management is MBO.” Discuss.
 “Centralization and Decentralization are mutually dependent.” Comment.
 How do management functions and skills change across the different levels of management?
 Which of Henri Foyal’s principles of management do you observe in use in organizations today? Explain their
relevance.
 What are the functions of a manager? Is mere knowledge of management enough to become a successful
manager?
 What is MBO? State the process of MBO.
 Distinguish between Management and Administration.
 What is conflict Management?
 What is Grapevine? State the barriers to communication.
 What are Dysfunctions of conflicts?
 Explain the social responsibilities of business towards its shareholders, customers and community at large.
QUESTIONS
 Define bureaucracy. What are its limitations as a model for modern organization?
 Which of Fayol’s principles of Management do you observe in use in organization today?
 Define plurality of objectives. How are conflicts among objectives resolved?
 “Management is a sophisticated behavioural Science”. Elucidate.
 How does contingency concept apply to organizations? Illustrate your answer.
 “The Neo-classical approach to the Management has not provided any such things as to replace the classical
management theory”. Do you agree with this statement? Justify your answer.
 Describe the various types of decentralization, that are practiced in organizations in India.
 How do social factors influence the practice and management?
 Do you agree that political behaviouric organization is inevitable?
 “Management is the effective utilization of human and material resources to achieve the goals of the
enterprise”. Comment.
 “Delegation and Decentralization are interchangeable terms in management and organization theory”.
Comment.
QUESTIONS
 Explain the definitions of Management.
 Explain the Management Process.
 Explain the functions of Management.
 Explain briefly the nature and scope of Management.
 Explain the concept of Management.
 Explain briefly the features of Management.
 What are the importance of Management?
 Management is Science or Art. Or both. Elucidate.
 Briefly explain the Management is a profession.
 Briefly explain Professionalization of Management in India.
 What are the ethics of Management?
 Explain the social responsibility of Business Management.
 In India is there is an improvement happening in professionally managed sector when compared to western
companies, or in India still using the old concept of traditionally management sector. Comment.
 What are the contributors given by F.W Taylor?
 What are the elements and tools of scientific management?

QUESTIONS
 What are the contributors given by Max Weber.
 Explain the features of Bureaucratic Management.
 Explain general principles of administrative management from Henri Fayol.
 What are the differences between contributions of Taylor & Fayol?
 Explain briefly four Hawthorne experiments and human relations by Elton Mayo.
 Explain the social systems approach.
 Explain the contributions of Barnard.
 Explain the Decision Theory approach.
 Explain the contributions of Simon.
 Explain contributors of Peter.F. Dracker.
 What is MBO?
 What is MBR?
 Explain the process of MBO.
 What are the benefits of MBO?
 What are the problems and limitations of MBO?
 Explain the Management Science Approach.
 Explain the human behaviour approach.
 Explain the systems approach.
 Explain the contingency approach.