1.1.

1 Management

o There are several definitions of the word management because different experts have
defined management in various ways.
o The following are the well-known definitions of management:-

1. Management is planning, organizing, leading, directing, and controlling the efforts of

organizational members using all other resources to achieve organizational goals and
objectives.
2. According to Harold Koontz, “Management is an art of getting things done through and
with the people in formally organized groups. It is an art of creating an environment in
which people can perform and individuals and can co-operate towards attainment of group
goals”.
3. Management is the act of getting things done by other people. The implication here is that
managers arrange for others the necessary activities to be performed to achieve the goals
and objectives of the organization.
4. Management is that function of an enterprise that concerns itself with the direction and
control of the various activities to attain business objectives
5. Management can also be described as a set of activities directed at the efficient and
effective utilization of resources to pursue organizational goals.
6. According to W. Taylor, “Management is an art of knowing what to do, when to do and
see that it is done in the best and cheapest way”.

From the above definitions, we can conclude that management refers to all those activities which
are concerned with: -

o Formulation of objectives plans and policies of the collective enterprise.

o Assembling men, money, materials, machines, and methods for their accomplishment.
o Directing and motivating the men at work.
o Co-coordinating the physical and human resources.
o Supervising and controlling performance; and
o Securing maximum satisfaction for both employer and employee and providing the public
with the best possible services.

1.1.2 Manager

o A Manager is a person who manages or is in charge of something.

o Managers can control departments in companies, or guide the people who work for them.
They also make decisions about things.
o A good manager sets a positive example and knows how to use their strengths to
encourage their team to succeed.
o Successful managers work alongside their employees, coach team members and create an
inclusive work environment.
o To be a good manager, it is important to communicate goals, expectations and feedback
 o Managers are responsible for the processes of getting activities completed efficiently with
and through other people and setting and achieving the firm’s goals through the execution
of four basic management functions: -

i. Planning,
ii. Organizing,
iii. Leading, and
iv. Controlling.

o Both sets of processes utilize human, financial, and material resources.

Levels of Management

1.2.1 Top Level Management

o Top management of a company consists of the board of directors and chief executives.
o Chief executive may be known as managing director, etc.
o Top management is the ultimate source of management to the shareholders of the company.

Main functions of top management

1. To analyze, evaluate and deal with the environmental forces:

2. To establish overall long-term goals and policies of the company including the master
budget.
3. To appoint departmental and other key executives.
4. To represent the company to the outside world, e.g., trade associations, government, trade
unions, etc.;
5. To exercise overall review and control on the company’s operations and
6. To coordinate the activities and efforts of different departments.
7. Have conceptual skills
1.2.2 Middle Level Management

o Middle management comprises of departmental or divisional heads, e.g. works manager,

marketing manager, personnel manager, finance manager etc.

Functions of Middle management

1. To interpret and explain the policies framed by top and intermediate managements.
2. To compile and issue detailed instructions regarding operations.
3. To co-operate among themselves so as to integrate various parts of a division or a
department.
4. To motivate supervisory personnel to work for organizational goals
5. To develop and train supervisory and operative personnel.
6. Have relational skills

1.2.3 Lower Level Management

o Lower level is also known as supervisory / operative level of management.

o It consists of supervisors, foreman, section officers, superintendent etc.
o According to R.C. Davis, “Supervisory management refers to those executives whose work
has to be largely with personal oversight and direction of operative employees”.
o In other words, they are concerned with direction and controlling function of management.
Functions of Lower Level Management

1. To plan day-to-day production within the goals laid down by higher authorities.
2. To assign jobs to workers and to plan for their training and development.
3. To supervise and control workers and to maintain personal contact with them
4. To arrange materials and tools and to maintain machinery.
5. To advise and assist workers by explaining work procedures, solving their problems, etc.
6. To maintain discipline and good human relations among workers.
7. To report feedback information and workers’ problems which cannot be solved at the
supervisory level.
8. Have technical skills

Management Roles

o The activities which constitute the essential functions of a top manager's job who command
a formal authority and status can be seen as a set of 10 roles which may be divided into
three groups:

1.Interpersonal roles: These are relations with other people arising from the manager's status and
authority. The managerial roles in this category involve providing information and ideas.
Interpersonal roles include:

• Figurehead role - The manager is a symbol and represents the organization in matters of
formality. Manager is involved in issues of a ceremonial nature such as the signing of
documents and participation.
• Leader role - The manager undertakes all activities of a manager, such as staffing,
motivation, and guidance of subordinates.
• Liaison role - The manager acts as a link between the organization and the environment.
e.g. individuals and groups outside the organization.

2. Informational roles: They relate to the sources and communication of information arising from
the manager's interpersonal roles. The managerial roles in this category involve processing
information. Informational roles include:

• Monitor role - It involves the manager in seeking and receiving information which enables
the manager to develop an understanding of the organization and its environment.
Information may be received from internal or external sources and may be formal or
informal.
• Disseminator role - It involves the manager in transmitting external information into the
organization and internal information between subordinates.
• Spokesperson role - The manager is the formal authority in transmitting information to
people outside the organization. e.g., directors' suppliers, customers, etc.

3. Decisional roles: The managerial roles in this category involve using information
 • Entrepreneurial role - Managers initiate and plan controlled change through exploiting
opportunities and solving problems. e.g., overseeing new projects that will improve the
performance of the organization.
• Disturbance handler - Managers take action to correct a situation when an unexpected
disturbance occurs.
• Resource allocator - Managers decide and make choices on the allocation of resources
such as time, money, and staff
• Negotiator role - Manager participates in negotiation activity with other individuals or
organizations.

Management Skills

o In modern business, the job of a manager has become very complex.

o Different types of skills are required to effectively manage a large organization in a
dynamic environment.
o These skills of a manager have been classified into five categories, namely:-

i. Technical skills
ii. Human skills
iii. Conceptual skills
iv. Interpersonal and communication skills
v. Decision-making skills

i. Technical skills
 o This refers to the ability and knowledge in using the equipment, techniques and procedure
involved in performing specific tasks.
o These skills require specialized knowledge and proficiency in the mechanics of a particular
job.
o Ability in programming and operating a computer is, for instance a technical skill.

ii. Human skills

o Human skills consist of the ability to work effectively with other people both as individuals
and members of a group.
o These are required to win co-operation of others and to build effective work teams.
o Such skills require a sense of feeling for others and capacity to look at things from others
point of view.

iii. Conceptual skills

o Conceptual skills comprise the ability to see the whole organization and the inter-
relationships between its parts.
o These skills refer to the ability to visualize the entire picture or to consider a situation in its
totality.
o Such skills help the manager to conceptualize the environment, to analyze the forces
working in a situation and to take a broad and farsighted view of the organization.

iv. Interpersonal and communication skills

o Communication skill for a manager is a must.

o The manager must be able to convey ideas and information to others and receive
information and ideas from others effectively.
o Communication skill enables a manager to perform them properly.
o Most of his time, a manager’s job is to interact with people inside and outside of the
organization.
o Manager’s ability to communication with individuals and groups, controlling and
motivation they are what Interpersonal and Communication skill are.
o A manager requires having an effective Interpersonal and communication skill to keep the
responsibilities given to him.

v. Decision-making skills

o In simple words, a manager’s job is to make decisions that will lead the organization to the
attainment of is goals.
o Decision making skill is the skill that makes a manager able to recognize opportunities and
threat and then select an appropriate course of action to tackle them efficiently so that the
organization can benefit them.
o Managers are not always going to make the best decision.
o But a good manager most often makes a good decision and learns from the bad ones.
o Decision making is a skill that improves as managers gain more experience.
vi. Leadership Skills

o In order to be an effective manager, you need to be able to lead your employees in an

efficient manner.
o Being able to envision how you would want your leadership to look is an effective way to
achieve good management.
o Strategic thinkers are able to see the big picture and see minor details that others may not
see.

vii. Time Management Skills

o Another key factor in being a successful manager is time management.

o If you’re late every day, your employees might think it’s acceptable to also be late.
o Time management is important when it comes to prioritizing your day, making sure you
have time to communicate with your employees, and accomplishing goals throughout the
week.

Qualities of an Effective Manager

For a person to be a good manager must possess the following qualities:

1. Technical competence: A manager should possess the appropriate technical ability i.e.
knowledge in his area of specialization. This is so that he can lead the people effectively.
2. Human relation: This is the ability to effectively work with others in a harmonious
manner. This requires a sense of feeling for others, an appreciation of rights which is
demonstrated by the way the managers interact with their subordinates.
3. Impartial: A manger should be impartial i.e. fair to everyone regardless of any other
factors such as tribal, friendship, culture etc.
4. Social : A manager is supposed to be social to his staff. Most managers are unsocial to
their staff. Interacting with their staff is very important because the manager will know his
staff well an element which will enable the manager to appraise his staff democratically
5. Honest: A manager is supposed to be honest. Honesty enables a manager to be trusted by
his juniors.
6. Optimism: The best management style is optimistic. Negative management styles may
demonstrate little confidence in capabilities.
7. Empathy and Sensitivity: Emotional intelligence, which encompasses sensitivity and
empathy, is a soft skill all modern managers need to have. Ethical management means
empathizing with your workers. When you understand your people, it is possible to get the
best from everyone.
8. Knowledgeable: A great manager is knowledgeable about their line of work and their
industry as a whole. They’re open to learning new skills and regularly consume knowledge
that could help them become better at what they do.
9. Expertise From Experience: Most of the time managers have years of experience in the
field they are leading. Through those experiences they have gone above and beyond, and
have learned from the good and bad. Most importantly, successful managers have put in
 the needed time to master this category and know exactly how to meet goals month after
month
10. Take Accountability : A well-rounded manager will take charge of their own goals and,
on the same note, take responsibility when things don’t go according to plan. They foster
a culture of accountability so their employees understand the importance of
responsibility for their actions as well.

o Many view leadership, management and administration as synonymous, but there are
primary differences.
o It is not unusual for firms to expect individuals to possess the skills required for each.
o However, an individual's unique abilities will determine whether they enjoy the
responsibilities and are successful.
o Let's start first with the differentiators:-

i. Leadership: Vision and planning;

ii. Management: Execution and value creation; and,
iii. Administration: Process and tasks

Management Administration and Leadership

Management

o Management is the coordination and administration of tasks to achieve a goal.

o Such administration activities include setting the organization's strategy and coordinating
the efforts of staff to accomplish these objectives through the application of available
resources
o It is a set of principles relating to the functions of planning, organizing, directing and
controlling, and the application of these principles in harnessing physical, financial, human,
and informational resources efficiently and effectively to achieve organizational goals.

Administration

o Administration is the process or activity of running a business, organization, etc.

o It is the day-to-day administration of the company activities and operations
o It involves the process of systematically arranging and coordinating. the human and
material resources available to any organization for the. main purpose of achieving
stipulated goals of that organization.

Comparison Chart

Basis for
Management Administration
Comparison
An organized way of The process of administering
Meaning
managing people and an organization by a group
 Basis for
Management Administration
Comparison
things of a business of people is known as the
organization is called the Administration.
Management.
Authority Middle and Lower Level Top level
Role Executive Decisive
Concerned with Policy Implementation Policy Formulation
Area of It works under It has full control over the
operation administration. activities of the organization.
Government offices,
Profit making military, clubs, business
Applicable to organizations, i.e. enterprises, hospitals,
business organizations. religious and educational
organizations.
Who will do the work?
What should be done? And
Decides And How will it be
When is should be done?
done?
Formulation of plans,
Putting plans and
Work framing policies and setting
policies into actions.
objectives
Making best possible
Focus on Managing work allocation of limited
resources.
Key person Manager Administrator
Employees, who work Owners, who get a return on
Represents
for remuneration the capital invested by them.
Legislative and
Function Executive and Governing
Determinative

Leadership

o Leadership is a process of social influence, which maximizes the efforts of others, towards
the achievement of a goal.
o It is a process by which an executive can direct, guide and influence the behavior and work
of others towards accomplishment of specific goals in a given situation.
o Leadership is the ability of a manager to induce the subordinates to work with confidence
and zeal.
o It is also defined as the capacity to influence a group towards the realization of a goal.
Leaders are required to develop future visions, and to motivate the organizational members
to want to achieve the visions.
MANAGEMENT THEORIES

Classical Approaches to Management

2.1.1 Taylors View Point

o From Philadelphia, USA, as an apprentice machinist.

o He became chief engineer at Midvale Engineering Works and then worked at Bethlehem
Works, where he tested his theories and contributed to management theory.
o Winslow, Fredrick Taylor, the founder of scientific management, was the first to emphasize
the need for a scientific approach to managing an enterprise.
o He tried to diagnose the causes of low industrial efficiency and concluded that much of the
waste and inefficiency is due to poor management methods.
o He found that management was usually unaware of the amount of work that a worker could
do in a day and the best way to do it. As a result, it was largely at the mercy of workers
who chose not to work.
o He advised managers to take a scientific approach to their work and use the "scientific
method" to improve efficiency.
o The scientific method consists essentially of:-

i. Observation
ii. Measurement
iii. Experimentation and
iv. Inference.
 o He emphasized the need for perfect understanding and cooperation between management
and workers, both for increased profits and the use of scientific research and knowledge in
industrial work.

Elements of Scientific Management

1. Scientific Task and Rate Setting: In order to improve an activity's operational efficiency, a
work-study examines all relevant factors in a systematic and objective manner.

2. Planning the Task: To ensure that there are no bottlenecks and that the work is done
efficiently, the task must be planned thoroughly.

3. Selection and Training: Scientific management necessitates a radical change in worker

selection procedures. A selection must therefore be delegated to a central personnel department.
The selection process must also be systematized. Workers must also be properly trained in
proper work methods.

4. Standardization: Standardization may be introduced in the following areas:-

i. Tools and equipment: Standardization is the process of bringing uniformity. So the

management must select and store standard equipment that is near the best of its kind.
ii. Speed: Every machine has an optimal speed. If it is exceeded, machinery may be damaged.
iii. Conditions of Work: Standard conditions of ventilation, heating, cooling, humidity, floor
space, safety, etc. are essential for standard performance.
iv. Materials: A worker's efficiency is dependent on the quality and handling of materials.

5. Specialization: Specialization is required for scientific management. As a result of this plan,

the plant is organized to separate the planning and execution functions. Experts who plan and
execute operations in the workshop.

Benefits of Scientific Management:

o Taylor's ideas, research, and recommendations centered on technological, human, and

organizational issues.
o In Taylor's scientific management the following benefits are realized:-

1. Better quality,
2. Lower costs,
3. Less waste of materials, time, and energy,
4. Good management-worker relations.
5. Scientific techniques replace the traditional rule of thumb methods.
6. Proper worker selection and training.
7. Wages that encourage workers to produce more.
8. Waste reduction and control system rationalization.
9. Common tools, materials and work methods.
10. Detailed instructions and constant worker guidance.
 11. Creating a harmonious workplace.
12. Better use of resources.
13. Customer satisfaction by providing better products at lower prices.

Criticism of Scientific Management

1. Speeding up of workers:
2. The problem of monotony:
3. Heavy Investment:
4. Loss due to re-organization
5. Unsuitable for small scale firms:

Contributions of Scientific Management:

1. Management emphasizes rational thinking

2. Improve industrial work methods through systematic research.
3. Planned and controlled production is emphasized
4. Cost Accounting's development
5. Studying work to develop incentive pay plans.
6. Emphasize the need for a separate HR Department.
7. Pay attention to industrial work-related fatigue and rest.

2.1.2 Fayol's Administrative Theory

o Henry Fayol was the most important exponent of this theory.

o The pyramidal form, scalar principle, unity of command, exception principle, span of
control, and departmentalization are some of the important concepts set forth by Fayol and
his followers like Mooney and Reiley, Simon, Urwick, Gullick etc.
o Henry Fayol was born in 1841 in France.
o In 1860, he graduated from the National School of Mining.
o After graduation, he worked as an engineer for a French coal mining firm.
o He was promoted to manager after a few years.
o He became General Manager in 1888.
o The company had suffered heavy losses and was near bankruptcy.
o Henry Fayol succeeded in converting his company from near bankruptcy to long-term
profitability and dividends.

Concept of Management by Fayol

o To run a successful business, these six functions had to be performed.

o However, he stressed that the ability to manage was the most important function for upper
management.
o The management cycle of planning, organizing, directing, co-coordinating, and controlling
is based on Fayol's analysis of general management.
o Thus, Fayol is said to have established management thought and practice.
o Even today, the management process is acknowledged.
 o Henry Fayol divided general and industrial management into six groups:-

i. Technical activities - Production, manufacture, adaptation.

ii. Commercial activities - buying, selling, and exchange.
iii. Financial activities - search for and optimum use of capital.
iv. Security activities - protection of property and persons.
v. Accounting activities - stock-taking, balance sheet, cost, and statistics.
vi. Managerial activities - planning, organization, command, coordination, and control.

Fayol's Principles of Management

1. Division of work: Only work division or specialization can maximize efficiency and
productivity. Diversification of labor and specialization are the only ways to perform
technical and managerial tasks efficiently.
2. Authority and Responsibility: An authority is a right to command. Responsibility means
the duty to perform. Management is about authority and responsibility. They co-exist. They
are mutually dependent and complementary.
3. Discipline: Each member of an organization must follow the organization's objectives,
rules, regulations, policies, and procedures. Rules, objectives, policies, and procedures
must be agreed upon in a clear and fair fashion. Non-compliance or indiscipline must be
punished. No organization can function properly without voluntary discipline.
4. Unity of Command: Orders and instructions must come from only one superior to avoid
confusion and conflict (boss).
5. Unity of Direction: Teamwork is required to achieve common goals.
6. Remuneration: Good performance can be rewarded with fair pay and non-monetary
rewards. Employees must not be exploited in any way. Financial and nonfinancial
incentives are part of a good compensation scheme.
7. Centralization: Decentralization of authority and power must be balanced. Extreme
centralization and decentralization are prohibited.
8. Scalar Chain: From the top to the bottom, the unity of command creates a chain of
command. Steps are a scalar.
9. Order: Everything has its place, according to Fayol. Only order and system can create
effective management.
10. Equity: A group of people working together is an organization. So there must be equity
(or justice). We can't work together effectively unless we're equal.
11. Stability of Tenure: Maintaining tenure requires time to adjust to new tasks and show
efficiency. Determining job security for employees and managers Sound organization and
management requires job security.
12. Esprit de corps: A strong organization's spirit of teamwork. Unity is power. But unity
necessitates help. Good performance is based on pride, loyalty, and belongingness.
13. Initiative: Creative thinking and initiative can help us plan and execute our plans
effectively.
14. Collective Interest Over Individual Interest: This principle states that the overall interest
of the team should take precedence over personal ones. The interest of the organization
should not be sabotaged by the interest of an individual. If anyone goes rogue, the
organization will collapse.
2.1.3 Max Weber's Bureaucrat Theory

o The bureaucratic model was created by Max Weber.

o His bureaucracy includes:-

i. Hierarchical structure.
ii. Discipline by functional specialization.
iii. A set of rules and regulations
iv. Interpersonal impersonality
v. A work procedure system.
vi. Employee placement based on technical skills.
vii. Legal authority and power.

Features of Bureaucracy

1. Bureaucracy imposes a rigid organizational structure. It misses key human elements.

Bureaucracy's traits include:-
2. Controls are more rigid, impersonal, and expensive.
3. Anxiety caused by rule and procedure compliance.
4. Dependence on superior.
5. The tendency of forgetting the organization's long-term objectives

Behavioral Management Approach

2.2.1 Elton Mayo-Human Relation Theory

George Elton Mayo (Australia, 1880 - 1949):

o Elton Mayo is Australian. St. Peter's College, Adelaide, taught him Logic and Philosophy.
o He led a Harvard University research team investigating human issues at Western Electric's
Hawthorne plant in Chicago.
o They conducted experiments (Hawthorne Experiments) on informal groupings,
relationships, communication, and leadership.
o Elton Mayo is the father of the Human Relations School.
o Other notable contributors to this school include: - Roethlisberger, Dickson, Dewey, and
Lewin.

Hawthorne Experiment:

o In 1927, Elton Mayo and Fritz Roethlisberger of the Harvard Business School were invited
to join the studies at Western Electric's Hawthorne Works in Chicago.
o It lasted until 1932.
o The Hawthorne Experiments revealed that employee productivity is not solely dependent
on physical and financial conditions.
o Employees' productivity is heavily reliant on their job satisfaction.
 o Mayo believed that emotional factors superseded logical factors in determining
productivity efficiency.
o Moreover, among all human factors influencing employee behavior, social group
membership and participation was the most powerful.
o Mayo concluded that in addition to meeting the objective requirements of production, work
arrangements must also meet the employee's subjective requirement of social satisfaction.

Features of the Hawthorne Experiment

o The important features of the Hawthorne Experiment are:-

1. A company is a social system. It is a socio-economic system.

2. The employer's behavior is influenced by feelings, emotions, and attitudes. So economic
incentives are not the only method.
3. It is time for management to learn to collaborate rather than command.
4. Participation becomes a key tool in human relations. A two-way communication network
is required to achieve participation.
5. In any business, productivity is linked to employee satisfaction. So management must care
more about employee satisfaction.
6. Group psychology is vital in any business setting. So we need more informal group effort.
7. It emphasizes that man is a living machine, far more important than inanimate machines.
Employee morale is the key to increased productivity. High morale boosts output

His main contributions are discussed as follows:

1. Human Relations Approach: Mayo is rightly called the father of human relations movement.
His ideas were a milestone and a turning point in human relations approach of the management.
He recognised the importance of human beings in management. He said that human beings are
complex and influential input into organisational performance. The social and psychological needs
of human beings cannot be ignored, if management wants to enhance productivity.

2. Non-Economic Awards: The earlier assumption was that workers will work more if they are
offered more monetary incentives. Taylor was the main proponent of this approach. Elton Mayo
said that the techniques of economic incentives were not only inadequate but also unrealistic. He
was able to show that humane and respectful treatment, sense of participation and belonging,
recognition, morale, human pride and social interaction are sometimes more important than pure
monetary rewards.

3. Social Man: Mayo developed a concept of ‘social man’. He said that man is basically motivated
by social needs and obtains his sense of identity through relationships with others. He is more
responsive to the social forces of the informal group rather than managerial incentives and controls.
He also related productivity to a social phenomenon.

4. Organisation as a Social System: Mayo was of the view that informal relationships in the
organisation are more effective than formal relationships. People form informal groups to give a
bent to their feelings and seek guidance for action from such groups. “An organisation is a social
system, a system of cliques, grapevines, informal status systems, rituals and a minute of logical,
non-logical and illogical behaviour.” He was of the opinion that managers should maintain an
equilibrium between the logic of efficiency’ demanded by the formal organisation. He thought that
besides logic and facts people are also guided by sentiments and feelings.

2.2.2 Abraham Maslow's Theory

o Abraham Maslow proposed that people are motivated when their needs are met.
o The need progresses upwards as each lower-level need is met.
o Here is the need hierarchy:-

1. Physiological: Food, water, and shelter.

2. Safety: Threats, deprivation, and other dangers are protected
3. Social needs. Need for an association, affiliation, friendship, etc.
4. Self-esteem: Need for respect and recognition.
5. Self-actualization: Possibility of personal growth, learning, and challenging work. Self-
actualization is the highest human need.

o According to Maslow, individuals are motivated by unsatisfied needs.

o As each of these needs is significantly satisfied, it drives and forces the next need to
emerge.
o Maslow grouped the five needs into two categories :-

i. Higher-order needs and

ii. Lower-order needs.

o The physiological and the safety needs constituted the lower-order needs.
o These lower-order needs are mainly satisfied externally.
o The social, esteem, and self-actualization needs constituted the higher-order needs.
o These higher-order needs are generally satisfied internally, i.e., within an individual.
o Thus, we can conclude that during boom period, the employees lower-order needs are
significantly met.

2.2.3 Mc Gregor's X and Y

o Douglas McGregor developed two distinct human views based on worker participation.
o The first, labeled Theory X, is negative, while the second, labeled Theory Y, is positive.
o Both exist.
o Their nature dictates how they should be managed.

Theory X:

o The traditional view of workers is that they are lazy, self-absorbed, and lack ambition.
o Theory X assumes that people:-

1. Dislike work and will avoid if they potential can,

 2. need to be controlled and or threaten before they will actually work hard,
3. Don’t want any responsibility for tasking and would rather be directed,
4. They want to feel secure.
5. So strong top-down control is appropriate management style.

Theory Y:

o Workers are intrinsically motivated and eager to take responsibility.

o Creating a productive work environment with positive rewards and reinforcement
o Theory Y assumes that:-

1. Employees want to actually work

2. Can organize their work and head for organizational objectives,
3. Will get committed because their needs re being met,
4. Accepts responsibilities and actively seeks feedback,
5. Can work autonomously to solve workplace issues.

2.2.4 Mary Parker Follett

o Mary Parker Follett's management theory exists to increase coordination among workers.
o Mary Parker Follett, or the “Mother of Modern Management,” believed that management
was “the art of getting things done through people.”
o Though she never managed a for-profit enterprise, she offered valuable insight on the
importance of “powering with” rather than “powering over,” and integrating with
employees to solve conflicts.
o Known well for her mediating tendencies and managing tactics, Follett created a
management theory that is still in favor today.
o Its main principles include:-

1. Integration

o Follett thought that workers of all levels should integrate to reach the organization’s goals.
o If conflict arises, there should be a conscious effort to pull instead of push, and to work
together as a team.
o Because each member is doing their part, overall, they’ll be more likely to be content with
result.

2.Power with

o Rather than establishing a strict hierarchy and delegating power to certain individuals over
others, Follett believed that workers should practice co-active power.
o Powering with their team is better than powering over them; this way, each member feels
just as valued as the next.
o This is not to say that hierarchy should be eliminated entirely, however.
o Structure is still crucial, but employees should not feel like they are less valuable than their
managers.
3.Group power

o Group power should be valued over personal power.

o Organizations do not exist for one person’s benefit, but rather the entire company of
workers.
o If this selfless mindset prevails, then all workers will feel like they’re on the same team,
rather than in competition with each other.

Modern Management Theories

2.3.1 Quantitative Thinking

o The quantitative approach to management uses statistics and mathematical techniques to

solve complex problems.
o Depending on the business area, managers may use techniques like computer simulations
or information models to assess performance.
o This analysis enables them to understand what is working and what is not within the
business, then develop solutions to solve or improve the issues they find.
o Managers can also use these techniques and data to determine the benefits or risks of
different ideas.
o This approach can help managers make objective decisions based on data and facts, rather
than personal opinions or feelings, that support the business.
o This modern management approach often consists of three branches:-

i. Management science: Management science is the application of mathematical and

statistical methods to business problems and goals. Program Evaluation Review Technique
(PERT), Critical path project management (CPM), and sampling are examples of these
tools. Managers can utilize these tools for project management, budgeting, and scheduling.
ii. Operations management: Operations management helps managers improve company and
manufacturing processes. This strategy may require managers to restructure or redesign
procedures. They use forecasting, quality control, and project planning systems. These
managers often try to produce more or better products through more efficient methods.
iii. Management Information System: A management information system (MIS) is a
database that organizes an organization's data and helps managers make intelligent
decisions. In addition to financial, schedule, personnel, and inventory reporting, this system
collects and saves real-time data. Managers can then utilize this data to assess performance,
make adjustments, or develop solutions.

2.3.2 Systems Thinking

o The systems approach of management states that organizations represent a complex

collection of various components that work together to reach a common goal.
o An organization is made up of numerous subsystems, such as different departments.
o Managers using this theory examine how these subsystems interact with and affect one
another, rather than analyzing them separately.
 o They must also consider their surrounding environment and external factors that influence
or affect these systems.
o The systems approach further defines an organization by dividing it into different
components.
o These components demonstrate how different parts of the organization work together
toward a common goal:

• Inputs: Inputs represent the factors that are needed to create goods and services. For
example, inputs may include raw materials, capital, technology or information.
• Transformational process: Transformational processes represent the activities or abilities
that convert the organization's inputs into outputs. For example, these processes may
include employees' work tasks or operational activities.
• Outputs: Outputs represent the results produced by an organization. These outputs may
include products, services and financial results, such as profits.
• Feedback: Feedback represents information related to the organization's outcomes or
outputs. Leaders can use this information to influence or make decisions related to the
organization's inputs.

o This idea treats businesses as if they were living organisms, with all of the pieces required
for survival.
o This idea, developed by Ludwig von Bertalanffy, asserts that for a corporation to survive,
all sections of the organization, from the CEO to the entry-level employee, must function
in harmony.
o Companies that follow this approach believe that departments and employees should
function as a team rather than as individuals.
o This paradigm emphasizes departmental synergy and interdependence.

The features of this approach are:

• Open System: The traditional theory treated organization as a closed system. But modern
theory treats it as open system which has continuous interaction with the environment. This
approach views organization as linked to its environment. Organizational effectiveness
depends upon the organization interaction with its environment.
• Adaptive System: Since organization is related to environment, it has to adjust to the
changing environment. In order to meet the challenges of environment, management has
to bring changes in the sub-systems of the organisation. There is a provision of feedback,
management can evaluate its performance and take corrective measures. There should be
an adaptation to the changed situation.
• Organization as a Whole: The organisation is looked as a whole which means that it is
bigger than the sub-systems combined. In order to ensure effectiveness, the emphasis is
laid on integration of various sub-systems.
• Sub-Systems: The organization consists of various subsystems. The sub-systems are
interacting and interdependent. They are tied together through goals, authority flows,
resources flow etc.
 • Boundaries: The organization provides a boundary which separates it from other systems.
It determines which parts are internal and which parts are external. For example, employees
in the organization are within the boundary and customers are outside it.
• Multi-disciplinary Approach: The modern theory of management is enriched by
contributions from various disciplines like psychology, sociology, economics,
anthropology, mathematics, operations research and so on.

2.3.3 Contingency Thinking

o According to the Contingency Management Theory, each scenario necessitates a unique

leadership style, and hence no single theory can be applied to an entire office.
o This theory, developed in the 1960s by Fred Fiedler, asserts that it is up to a company's
executives to assess a situation and employ the optimal leadership strategy.
o According to Fiedler, there are three primary factors to consider when deciding which
leadership strategy to apply:-

i. The size of the business,

ii. The technology in use, and
iii. The company's overall leadership style.

o An effective manager understands these factors and how they may impact performance.
o This notion places a great deal of responsibility on a company's leaders.
o Fiedler believed that a leader's personality attributes had a direct impact on how they
managed others.
o This approach is also more applicable to modern workplaces since it recognizes that as
technology and businesses evolve, so must leadership styles.
o In simple words, the contingency management approach states that there is not just one
management approach that fits every organization.
o It believes that the optimal management style depends on the situation.
o Leaders who utilize this theory do not adopt a single management style and instead must
identify and use different styles for different situations.
o As a result, these leaders also develop additional traits and skills that ensure they can
employ various management approaches effectively.
o The use of diverse styles can help make these leaders more flexible and adaptable in the
workplace.

This approach has the following features:

• (i) Management is entirely situational. The conditions of the situation will determine which
techniques and control systems should be designed to fit a particular situation.
• (ii) Management policies and procedures should respond to environmental conditions.
Various techniques and control systems should be designed to fit a particular situation.
• (iii) Managers should understand that there is no one best way of managing. They should
not treat management principles and techniques as universal. It will be the situation which
will determine the techniques and methods of management.