Significant Principles 151

SIGNIFICANT PRINCIPLES

It is very difficult to have an all encompassing definition of

management which covers all its characteristics. Management
is a vital function concerned with all aspects of the working of
an enterprise. Management has been defined in a number of
ways. Prof. Haimann has interpreted the term “management” in
three distinct aspects:
(a) Management as a field of study or a subject.
(b) Management as a team or class of people or a noun.
(c) Management as a process.
Management as a field of study or a subject refers to the
principles and practices of management. It entails all the
principles and practices as a knowledge and its application in
its entirety. This approach, however, fails to give the correct
nature of management. Management as a team or class of
people refers to the group of managerial personnel of an
enterprise functioning in their supervisory capacity. However,
who are the managers and what are the activities that should
be treated as managerial, are hard to identify, unless some
152 Principles of Hotel Management
yardsticks are prescribed. This becomes more difficult specially
when those performing managerial activities have different titles
in one organisation as well as in different organisations.
Management as a process refers to different processes or
steps of management—right from planning to organising, staffing,
supervising and controlling. Management in this context has
been defined as the process of getting things done by and in
cooperation with others. There are many definitions of
management. They emphasize one or the other important aspect
of management activity. According to Koontz, “Management is
the art of getting things done with people and through informally
organised groups. It is the art of creating an environment in
which people can perform as individuals and yet cooperate
towards attainment of group goals. It is the art of removing
blocks for such a performance, a way of optimising efficiency
in reaching goals.” According to Dalton E. McFarland,
“Management is the fundamental integrating and operating
mechanism underlying organised effort.”
According to George R. Terry, “Management is a distinct
process ... performed to determine and accomplish stated
objectives by the use of human beings and other resources.”
According to Harold Koontz and Cyrill O’Donnel,
“Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working together
in groups can perform efficiently and effectively towards the
attainment of group goals.” According to W. Jack Duncan,
“Management consists of all organisational activities that involve
goal formation and accomplishment, performance, appraisal
and the development of an operating philosophy that ensures
the organisation’s survival within the social system.”
According to Kimball and Kimball, “Management may be
defined as the art of applying the economic principles that
underline the control of men and material in the enterprise
under consideration.”
Significant Principles 153
According to Brech, “Management may be defined as a
social process entailing responsibility for the effective planning
and regulation of the operations of an enterprise, such
responsibility involves (a) the installation and maintenance of
proper procedures to ensure adherence to plans, and (b) the
guidance, integration and supervision of the personnel comprising
the enterprise and carrying out its operations.”
There is no universally acceptable definition of management;
so much so that Brech has stated, “Exactly what the term
means is not always clear and not always agreed.” Common
to all above definitions is the connection of management to
organisational goals. It evaluates the effectiveness of goals
accomplished and devises methods for achieving those tasks
which are compatible with the demands of the society within
which it operates. The most widely accepted meaning of the
term “management” is that management is a process by which
responsible persons (e.g., managers or executives) in an
organisation get things done through the efforts of other persons
in group activities. Before summing it up it is essential to quote
the definition of management given by the American Management
Association. It reads, “Management is guiding human and
physical resources into dynamic organisation 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 services.”

DEFINITION AND THEORY

Management is a group activity. Management is to coordinate
the actions and reactions of individuals. Management has some
defined goals before it to achieve. Goals are set considering the
actions and reactions of individuals.
Management also evaluates the effectiveness of goal
accomplishments.
Managers are expected to use the resources available to
154 Principles of Hotel Management
them as efficiently as possible to guide the survival of an
organisation in the competitive world. The ability to forecast and
adopt to change are also important components of management
for organisational survival.
Action is the creed of management. Policies and programmes
are implemented by management.

PRINCIPAL CHARACTERS
Following are certain features which illustrate the wide
breadth of scope of management.
Management is a universal process which is applied in all
types of institutions—social, religious, commercial, political, etc.
Every organisation and institution whose object is to achieve
its objectives and goals through group efforts, needs planning,
coordination, direction and control, i.e., management. The
essence of management is the integration of human and physical
resources in a manner that it leads to effective performance.
Managers apply knowledge, experience and principles for getting
the results. Management seeks to harmonise the individual
goals with organisational goals.
Management is a dynamic function of business organisations.
Its functions change from time to time depending upon the
circumstances of the business, i.e., changes in economic, social,
political, technological and human conditions. Management
adjusts itself to the changing atmosphere—making suitable
forecasts and changes in the policies.
Management is a social process as it primarily deals with
emotional/dynamic and sensitive human beings. The major
achievement is to win their confidence and cooperation. Thus,
making it difficult to precisely define the principles of
management. Management principles are constantly influenced
by social traditions, customs and regulations.
Managerial ability is distinctly different from technical ability.
Significant Principles 155
Management is the art of getting things done through people.
It implies that under given set of constraints or problem
boundaries how positive results can emerge, by taking well
defined actions.
Management has to deal with heterogeneous resources.
Their performance depends upon the proper knowledge and
skill of various disciplines. Management has grown as a body
of discipline taking the help of so many social sciences like—
Anthropology, Sociology, Psychology’ etc. Due to this,
management is also known as a ”Behavioural Science.”
Management is a science because it has an organised body
of knowledge which is based on facts and certain universal
truths. It is an art because certain skills, essential for good
management, are unique to individuals. So many times managers
act on instinct. It is also about interactions which cannot be laid
down in black and white.
Managerial ability is an intangible force; it is a social skill
which cannot be seen with the eyes but it is evidenced by the
quality and level of an organisation.

VARIOUS DIMENSIONS
All the managers have to perform certain functions in an
organisation to get the things moving. But there is never complete
agreement among experts on what functions should be included
in the management process. However, Koontz and O’Donnell’s
classification of management functions is best of all and is
widely accepted. According to them, “functions of management
are planning, organising, staffing, directing and controlling.”
Planning is an indispensable function of management
determining the objectives to be achieved and the course of
action to be followed to achieve them. It is a mental process
requiring the use of intellectual faculties, foresight and sound
judgement. Planning virtually pervades the entire gamut of
managerial activity. This function is performed by managers at
156 Principles of Hotel Management
all levels. The managers at the top level in an organisation
devote more time on planning as compared to the managers
at the lower levels. Planning includes:
(i) determination of objectives,
(ii) forecasting,
(iii) search of alternative courses of action and their
evaluation,
(iv) drawing policies and procedures, and
(v) budgeting.
Planning is a prerequisite of doing anything. Planning is a
pervasive, continuous and never ending activity. It leads to more
effective and faster achievements in any organisation and
enhances the ability of the organisation to adopt to future
eventualities.
Organising involves identification and grouping the activities
to be performed and dividing them among the individuals and
creating authority and responsibility relationships among them.
The process of organising involves the following steps:
(i) Determination of objectives;
(ii) Division of activities;
(iii) Fitting individuals to specific jobs; and
(iv) Developing relationship in terms of authorities and
responsibilities.
Organising can be viewed as a bridge connecting the
conceptual ideas developed in creating and planning to the
specific means for accomplishing these ideas. Organising
contributes to the efficiency of an organisation.
The staffing function has assumed great importance these
days because of rapid advancement of technology, increasing
size of organisations and complicated behaviour of human beings.
The managerial function of staffing includes manning the
organisational structure through proper and effective selection
Significant Principles 157
process, appraisal and the development of personnel to fill the
roles designed into the structure.
The staffing function involves:
(i) Proper recruitment and selection of the people;
(ii) Fixing remuneration;
(iii) Training and developing selected people to discharge
organisation a function; and
(iv) Appraisal of personnel.
Every manager is continuously engaged in performing the
staffing function. Although some elementary functions like
keeping inventory, of personnel, advertising for jobs, calling
candidates etc. are assigned to Personnel Department. The
manage: performs the duties of job analysis, job description,
appraisal of performance, etc. In short, the staffing function can
be viewed as an all pervasive function of management
Directing is that part of the management process which
actuates the organisation members to work efficiently and
effectively for the attainment of organisational objectives.
Planning, organising and staffing are merely preparations of the
work, the work actually starts when managers start performing
the direct functions. Direction is the interpersonnel aspect of
management which deals directly with influencing, guiding,
supervising and motivating the subordinates for the
accomplishment of the pre-determined objectives.
According to Joseph Massie, “Directing concerns the total
manner in which a manager influences the actions of
subordinates. It is the final action of a manager in getting others
to act after all the preparations have been completed.” It consists
of four subfunctions:
It is the process of passing information and
understanding from one person to another. A
successful manager should develop an effective
158 Principles of Hotel Management
system of communication so that he may issue
instructions and receive the reactions of the
subordinates and motivate them.
It is the process by which a manager guides and influences
the work of his subordinates.
Motivation means inspiring the subordinates to zealously
work towards accomplishment and achievement of organisational
goods and objectives.
Managers have to personally watch, direct and control the
performance of subordinates. In doing this they have to plan the
work—give them directions and instructions, guide them and
exercise leadership.
Controlling is visualising that actual performance is guided
towards expected performance. It is the measurement and
appraisal of the activities performed by the subordinates in
order to make sure that the objectives and the plans devised
to attain them are being accomplished. Controlling involves
following:
(i) fixing appropriate standards,
(ii) measurement of actual performance,
(iii) comparing actual and planned performance,
(iv) finding variances between the two and reasons for the
variance, and
(v) taking corrective actions.
Control keeps a check on other functions for ensuring
successful functioning management. The most notable feature
is that it is forward-looking. A manager cannot control the past
but can avoid mistakes in the future by taking actions in the light
of past experiences.
The above functions may give an impression that these
sections are independent compartments. Management is a
continuous process involving the interaction of all functions and
Significant Principles 159
departments. These functions are being performed
simultaneously and repeatedly. The purpose of separating the
functions of management is to ensure that sufficient attention
will be paid to each of them. The functions of management are
universal. A manager has to perform these functions in the
organisation, whatever the level of the manager or the objective
of the organisation. Some people raise the question which
management function is more important than others. The
importance of the functions will vary from task to task but they
are all important and necessary in accomplishing any
organisational goal.

PHYSICAL ASPECTS
The most dependable view regarding the nature of
management is that management is science and art, both. Both
art and science are not naturally exclusive fields of endeavour
but are complementary to each other.
Science is the systematised body of knowledge pertaining
to a particular field of enquiry. Such systematised body of
knowledge contains, concepts, theories experimentation and
principles which are universal and true. According to Chester
L. Bernard, “Science explains the phenomenon, the events, the
past situations and that their aim is not to produce specific
events effects or situations but explanations that we call
knowledge. The various concepts and principles of science are
developed on the basis of observation and experiments.”
Now, let us see whether management can satisfy the tests
which we have listed above for science. Management has a
systematised body of knowledge pertaining to its field and the
various concepts, principles and techniques have been developed
through deductive and inductive reasoning. For example, in the
area of designing an effective organisation structure, there are
a number of principles which serve as guidelines for delegating
authority. The unity of command, the consistency of authority
160 Principles of Hotel Management
and responsibility are some of the important principles which
help to decide proper delegation of authority. In the field of
management, some of the important techniques related to
budgeting, cost-accounting, planning and control are part of a
management theory. These techniques are there to help the
manager to plan and execute the activities and goods effectively.
But management is not so exact a science as other physical
sciences like Physics, Chemistry, etc. The main reason is that
it deals with the people and it is very difficult to predict their
behaviour accurately. Since it is a social process, it falls in the
area of Social Sciences.
Management is a behavioural science. Its theories and
principles are situation bound because of which their applicability
does not necessarily have the same results every time. That
is why Ernest Dale has called management a “soft science”
which does not have hard and fast rules.
Art is about bringing out the desired results through the
application of skill. It is concerned with the application of
knowledge and skills.
Management is one of the most creative art forms, as it
requires a vast knowledge and certain innovating, initiating,
implementing and integrating skills in relation to goals, resources,
techniques and results. As an art, management calls for a
corpus of abilities, intuition and judgement and a continuous
practice of management theories and principles.
Management is an art because:
(i) The process of management does involve the use of
know-how and skills.
(ii) The process of management is directed towards the
accomplishment of concrete results.
(iii) Like any other art, management is creative in the sense
that management creates new situations needed for
further improvement.
Significant Principles 161
(iv) Management is personalised—every man in this
profession has his individual approach and technique
in solving problems. The success of managerial task is
related with personality of the men, character and
knowledge.
Thus, we can conclude that management is both a science
and an art.

VARIOUS PHASES
Management is a manifold activity. It is carried on at different
levels of the organisational structure. The stages in the
organisation where a particular type of function starts is called
a level of management. Thus, the term “Levels of Management”
refers to a line of demarcation between various managerial
positions in an organisation. The number of managers depends
upon the size of the business and work-force. There is a limit
to the number of subordinates a person can supervise. The
number of levels of management increases when the size of
the business and work-force increases. Levels of management
are increased so as to achieve effective supervision.
In most of the organisations, there are generally three levels
of management: (i) Top management. (ii) Middle management.
(iii) Lower management.
In any organisation top management is the ultimate source
of authority. It establishes goals and policies for the enterprise
and devotes more time on the planning and coordinating
functions. It approves the decisions of the middle level
management and includes Board of Directors, Managing Director,
General Manager, Secretaries and Treasurers, etc.
It generally consists of heads of functional departments viz.,
production manager, sales manager, office superintendent, chief
cashier, branch managers, etc. They receive orders and
instructions from top management and get the things done
through lower level management. They are responsible to the
162 Principles of Hotel Management
top management for the functioning of their departments. They
devote more time on the organisation and motivation functions
of management.
It is the lowest level of management and thus has a direct
contact with the workers. It includes supervisors, foreman,
accounts officers, sales officers, etc. It is directly concerned with
the control and performance of the operative employees. Lower
level managers guide and direct the workers under the
instructions from middle level managers. They devote more time
on the supervision of the workers and are responsible for building
high morale among workers. The three levels of management
may be put as under:
Management

Top Middle Lower

Management Management Management
• Chairman • Heads of Departments • Foremen
• Managing Director • Superintendents • Supervisors
• Secretaries • Branch Managers • Finance Officers
• Treasurers • Account Officers
• Board of Directors
• General Manager

Common Conditions : Management and administration

are generally taken to mean as one and the same and are often
used interchangeably. But there has been a controversy because
of these two terms. There are following three views on the
subject of distinction between administration and management:
The Differentiation : Oliver Sheldon was the first person
to make a distinction between management and administration.
According to him, “Administration is the function in industry
concerned with the determination of the corporate policy, the
coordination of finance, production and distribution whereas
Management is the function concerned with the execution of
policy within the limits setup by administration.” Thus,
administration is formulation of policies and is a determinative
Significant Principles 163
function while management is execution of policies and is an
executive function. Florance and Tead also support this, in their
view, “Administration involves the overall setting of major
objectives determination of policies, identifying of general
purposes laying down broad programmes, major objectives etc.
while management is the active direction of human efforts with
a view to getting this done.”
Common Items : According to Kimball and Kimball
“Management is a generic term with wide functions including
administration, which is a narrow function.” According to Brech,
“Management is a social process entailing responsibility for the
effective and economical planning and regulation of the operation
of an enterprise in fulfilment of a given purpose of task.”
‘’Administration is that part of management which is concerned
with the installation and carrying out of the procedures by which
the programme is laid down and communicated, and the progress
of activities is regulated and checked against plans.” Thus, first
and second viewpoints are exactly opposite to one another.
Unrecognisable : Other authors like Fayol, Newman
Williams, do not make any distinction between these two terms.
This viewpoint is gaining popularity these days. It is very difficult
to clearly democrat managerial and administrative functions, as
the same set of persons perform both these functions. We do
not have two sets of people to discharge administrative and
operative management functions. Therefore, there is no difference
between the two.
In order to avoid any controversy, we can classify
management into: (a) administrative management, and
(b) operative management. Administrative management is
primarily concerned with laying down policies and determining
goals whereas operative management is concerned with
implementation of the policies for the achievement of goals. But
both these functions are performed by the same set of people,
according to Spriegal and Lansbugh, “At the higher levels, the
164 Principles of Hotel Management
managerial authority is concerned more with administrative
management and less with operations.” As shown in Figure
below every manager spends a part of his time in performing
administrative management functions and the remaining time
on operative management functions.
Thus, administration and management are considered to be
one and the same.

Resolution of management vs. administration

The emerging trend of separation of management from

ownership and increasing professionalisation of management
has led to a debate as to whether management is a profession
like doctors, advocates, nurses, accountants, etc. Profession
can be defined as an occupation for which specialised skills are
required, it is not only meant for self-satisfaction but are used
for the larger interests of the society, and the success of these
skills is not measured in terms of money alone. According to
McFarland, “A profession is a source of livelihood, based on
substantial body of knowledge and its formed acquisition the
test of success in the service is not the profit earned thereon.”
A profession has following five characteristics.
There exists a rapid, expanding body of knowledge underlying
the management field. For being a successful manager one has
to be alert and study this set of knowledge. A systematic body
of knowledge that can be used for professional development
has evolved during the last six decades. However, the concept
of management is still evolving and new principles are being
established continuously.
An individual can enter in a profession only after possessing
Significant Principles 165
certain knowledge and skills through formal training. To impart
management education there are many formal institutes in the
world. In India, there are various institutions and universities
running management programmes.
A representative body of professional is needed to regulate
and develop the professional activities. Many countries have
Management Associations. In India too there is an All India
Management Association. These associations manage and
coordinate researches and interests of management profession
in management areas. For every profession, some ethical
standards are provided and every professional individual is
expected to maintain conformity with these standard. There is
a lack of universally accepted formal ethical standards, their
duty is to protect the interests of all parties—owners, suppliers,
consumers, government, etc. In this respect, they are expected
to maintain code of conduct.
Professionals in management require money to satisfy their
needs. However, their success is not measured only in terms
of money which they receive by way of rendering their services
but by the contribution they make for the welfare of the society.
The management’s contribution by way of integrating various
resources into productive units is very important for the stability
of society.
From the above discussion, it is clear that management has
some professional characteristics fully, while others exist partially.
Management is a comparatively new field of knowledge and has
been developed as a result of rapid industrialisation. It is
increasingly being treated as a profession because of the need
for acquiring the management skills to solve the complex
problems of the organisations. Professional status for
management should not be viewed as a matter of definition. The
basic elements of professionalisation are important, irrespective
of whether they lead to professional status. So we can conclude
that management is a profession.
166 Principles of Hotel Management
The professionalism implies that specialised knowledge will
come into existence. Institutions will grow to provide the required
specialised knowledge and skill. Consultancy institutions will
come into limelight to look into the needs of the profession and
also to make the profession serviceable. Such organisation try
to coordinate the activities of sister organisations in order to
derive advantage of the existence of such organisations.
The most important implication of professionalism is the
preparation of a code of conduct. This sets morals and ethics
for the professionals. It helps in the ethical approach to the
problems.
Management, after being professionalised, has become
socially responsible. This has helped the management acquire
a new role in the business world. Management as a profession
plays a role of creator in an economy, particularly when it is in
the developing stage.
In old times, scale of production was small and there was
no economic life. Hence, the role of management was not well-
established. But with the advent of industrial revolution, scale
of production became very large and there arose various types
of complexities in the field of production, distribution and
exchange.
There was an urgent and immediate need for effective
coordination of human and non-human resources. It required
management. The increasing size of business organisations,
complex problems of business and advancement of modern
technology has resulted in the recognition of management as
an important factor of production. Management has achieved
an importance today.
Management has the integrating force in all kinds of organised
activity. It is not unique to business organisations but common
to all kinds of social organisations. Although, organisations
other than business do not speak of management, they all need
management. It is a specific organ for all kinds of organisations,
Significant Principles 167
since they all need to utilise their limited resources most efficiently
and effectively for the achievement of their purpose. It is the
most vital force in the successful performance of all kinds of
organised social activities. However, management has been
associated more with business and economic activities.
Management has made it possible to organise economic activity
in giant organisations like the Steel Authority of India, Life
Insurance Corporation, Air-India, Indian Railways, etc.
The factors, leading to the increase in the importance of
management are listed below:
(i) To ensure effective utilisation of the available resources.
(ii) To solve the increasing complex problems of business.
(iii) To cope with the research and development.
(iv) To handle large-scale operations.
(v) To coordinate between different levels of work
performance in enterprise.
(vi) To meet the problems of competition.
(vii) To inter-link traditional and modern technique of work
completion.
(viii) To help the nation in social welfare.
All policy decisions are taken by management. Management
keeps itself in touch with the current environment and supplies
foresight to the enterprise. It helps in forecasting what is going
to happen in the future, which will influence the working of the
enterprise. The role of management has increased because of
the separation of ownership from management regarding
corporate (company) enterprise and growth of capital intensive
techniques of production. An efficient management can lead a
business towards growth and propensity.
It provides leadership to the business and helps in achieving
its objectives. Management is concerned with planning, executing
and reviewing. In short, management involves scientific thinking,
168 Principles of Hotel Management
deciding, thoughtful organisation, direction and control to ensure
better results. Efficient management is equally important at the
national level. According to Peter Drucker, “Management is the
crucial factor in economic and social development.” The
development of accounting is virtually dependent upon the quality
of management. A capital investment and import of technical
know-how and equipment will not succeed if these resources
are managed properly. Thus, efficient management is a key to
the growth of the economy of any country.
In this chapter we have presented various definitions,
concepts, functions, component and levels of management. It
also highlighted management as a profession. The important
functions of management, viz., planning, organising, staffing,
directing and controlling were discussed at great length. The
view that management is both science and art was expounded.
The various levels of management, such as Top, middle and
lower were defined. The distinction between administration and
management was presented with concluding remarks that
management consists of both administrative and operative
aspects.

ADMINISTRATIVE SYSTEM
Taylor and the early systematic management theorists con-
fronted a plethora of detail. In the machine tool industry of the
1890s especially, increasing complexity and specialization
required more managers, and thus more coordination among
them to coordinate the firm as a whole. High-volume production
made difficulties still more extreme. The problems were
overwhelmingly managerial, rather than technical. What was
needed was some systematic procedure for coordinating and
monitoring, and, not inconsequentially, for abstracting the task
of management from the details of job performance.
Until an appropriate level of abstraction was defined, the
problems of coordination were insoluble. In both the performance
Significant Principles 169
and the management of routine jobs, some means of
transcending the particular individual was necessary. Until this
means was found, industrial complexity was limited to what the
individual could comprehend, remember, organize, perform, or
control.
The possibilities for organizational synergy were thereby
similarly limited. Organizations needed methods of impounding
and retaining the insights of individuals. Some means of repli-
cating acceptable procedures persistently, predictably, and
independently of the original discoverers, was necessary.

CONTROLLED ADMINISTRATION
Systematic management techniques, from Taylor’s excruci-
atingly detailed instructions on oiling a machine to Church’s
accounting systems, were the means to these ends. Taylor
sought explicitly to record and codify in order to render the
organization less dependent on the memory, good will, or phys-
ical presence of any particular employee. Equally, he sought to
avoid the necessity of repeated rediscovery of efficient proce-
dures by each worker. Just such a codification of concrete
details of task performance is a reasonable description of one
sort of “organizational memory.” Without resorting to reification,
it is apparent that such a mechanism retains the knowledge of
how to perform the task.
Perhaps more important still, such a recording makes the
knowledge accessible to others beyond the original discoverer,
eliminating the need to rediscover. Since the task is specified
the recording permits supervision of the task to proceed on a
different level, by exceptions. Instructions create expectations
and demands: this is the way to do it, not some other way; do
this, don’t spend time experimenting to possibly, fortuitously
discover the proper way. Within limits, written instructions create
a shared frame of reference and a shared experience—albeit
vicarious, for others than the discoverer—of a proper way to
accomplish the task.
170 Principles of Hotel Management
Once the task itself is specified and can be replicated,
managerial attention can shift to a different level of abstraction,
treating this particular task and its performance as “given.” On
one level, this kind of simple replicability is evidence of organi-
zational learning. Successful actions or behaviours can be speci-
fied and thus reiterated over time.
This is the lower-level, routine learning that March and
Simon or Cyert and March were willing to admit: a stored
repertoire of successful sequences of action. By permitting the
organization to transcend the particular discoverer of the
knowledge, and by making it accessible to others, such
programmes allow for the synergy (on a rudimentary level at
least) are characteristic of organizations.
The programme or instructions specify required actions
and, implicitly, the means of their coordination. Managerial
attention can be freed from the need to coordinate here, and
can look instead to coordinating among such sets of specified
behaviours. These lower-level learning programmes are
so commonplace and pervasive that we frequently
dismiss them as trivial, or ignore them altogether. However, they
are the essential foundation for the development of higher-level
systems.
The lower-level programmes create a means of synergy, the
shared frame of reference which preserves knowledge. They
also create a way of retaining and communicating learning
beyond the individual who discovers it, making possible further
refinement and more inclusive coordination. And, not incidentally,
they substantially improve performance by eliminating the need
to rediscover every time what has been learned before. This was
Taylor’s insight.
Taylor’s contributions went beyond the simple recording of
procedure, however. In his distinction between planning and
performance, he built upon the codification of routine tasks and
for the first time made possible the large-scale coordination of
Significant Principles 171
details—planning and policy-level thinking, above and beyond
the details of the task itself. The initial steps are critical; without
them, the manager and the organization remain in undated in
details of the task, and abstraction is impossible for sheer want
of information-processing capacity. This would not obscure the
qualitative difference between the details of the task, and a
focus on coordination of them.
Taylor tended to focus on the coordination of the tasks of
a single workman, or on the relationship among tasks in a single
work-flow at most. Nevertheless, instructions on how to
coordinate such a group of activities is a step higher, a logical
level above the elements themselves. To confuse the two is an
error in logical typing, equivalent to confusing the map with the
territory, the name with the thing, the receipt with the meal. Thus
the “specialty” of records clerks who generate instructions is not
the task itself, but a body of knowledge about many tasks.
The frame of reference of the clerk transcends the frame of
reference of any individual worker whose task is specified.
Conceptually, this represents a clear shift to a level of logical
abstraction superior to that of the task itself—that is, a more
inclusive level.
The clerk’s perspective includes many tasks, and the
technology for codifying them. In generating new sets of
instructions, for instance, such questions as, “Does the sequence
of actions performed by this worker mesh smoothly with others’
actions?” and “Should Worker A notify Worker C when A’s task
is complete?” illustrate the logical distinction between the level
of the task, and thinking about its specification. Another way of
drawing the distinction is to note that the clerk’s task
includes specifying boundary-spanning communications or
interfaces which relate self-contained segments; any individual
worker need be concerned only with activities within the
specification.
The division of labor, specialization, and subdivision of the
172 Principles of Hotel Management
task encouraging detailed knowledge of a portion of the task
in the individual worker, necessarily splits off coordination from
performance. This is differentiation by another name. The
reintegration necessary for efficient performance is provided by
a higher frame of reference, that is, one inclusive enough to
contain all the specialized elements.
Taylor’s methodology provided the means of implementing
the specialized knowledge he dissevered, of coordinating it,
monitoring it, and assuring that performance was adequate. By
specifying the details, management could insure replication of
the best practices on the shop floor. By setting up roles and
standards, management could be abstracted because the
knowledge embodied in standards was accessible to the worker.
Since the knowledge was accessible, its ordinary application
could be delegated and management could concentrate on
exceptions.
The procedures and rules for relating various tasks—
rudimentary codification of the management task—insured that
here too, certain patterns were replicated, independent of their
fortuitous rediscovery by each individual. It was no longer
necessary to rediscover a right way; one had already been
specified.
This left management free to concentrate on exceptions,
coordination, and new tasks. The details of management were
specified; some were delegated (to functional foremen; although
Taylor’s system was never fully implemented successfully many
of the same tasks are separated into different staff jobs today);
and a shared frame of reference was specified, guiding
performance, perception and interpretation.
Church’s further development of thinking about the manage-
ment task generalized the insights that Taylor had applied to
technical details. The accounting methods Church developed
provided the means for abstracting management by making
possible the description and monitoring of performance in diverse
Significant Principles 173
areas or products. The focus is upon how the details of the
management task itself fit together; and, on a lower level, how
the details of the managed task fit together.
The “five great organic functions” of managerial work that
Church identified are abstractions about the task of management,
approaches to organizing the performance of tasks.
General Motors and Du Pont offer higher-level analogues
to the split Taylor proposed between the performance of a task
and its planning and coordination. While there are clearly limits
to the usefulness of the distinction, nevertheless it is critical to
the management of complex activities, especially when they are
combined (as in the modern complex organization of diverse
task specialities, products, or areas).
Taylor’s schematic systematized task details, focused
management on coordination, and, by abstraction, freed up
management to undertake the overarching tasks of planning
and policy. In an analogous fashion, the extensive and
sophisticated control systems of General Motors and Du Pont
made feasible decentralized management in a complex
organization.
They thereby also made possible for the first time concerted
coordination (that is synergy) and true policy for such
organizations. So long as management is overwhelmed by the
details of task performance, planning and policy will not occur.
March and Simon describe this phenomenon, a Gresham’s
Law of Planning: routine activities drive out long-range, non-
routine activities. In this context, the absence of long-range
planning “that makes a difference” is comprehensible, and with
it the purely reactive stance of organizations Cyert and March
found.
That is, until what is routine is systematized and performance
replicable without extensive management attention, management
attention will necessarily focus on the routine. By the time of
Du Pont and General Motors, the specification of task had
174 Principles of Hotel Management
moved from codifying workers’ routine activities to codifying
managers’ routine activities.
It is through administrative systems that planning and policy
are made possible, because the systems capture knowledge
about the task, and, at the General Motors and Du Pont Levels,
about the logically more inclusive matter of coordinating tasks.
The return on assets concepts of Donaldson Brown, the
forecasting methods, the systematic relation of demand,
production, inventories, and appropriations all represent a
methodology for managing, a directed way of thinking that
translates a level upwards in a hierarchy of logic and inclusiveness
from the single-factory, single-firm management concepts of
Taylor and Church. Moreover, any manager who has been
exposed to these methods has been trained in an
administrative mechanism that explicitly guides perceptions and
interpretation.
In this, as in Taylor’s concrete specifications of a machinist’s
task, a shared frame of reference is created. The firm is no
longer dependent upon the rediscovery of these relations, every
time, by each new manager. Instead, the knowledge of Donaldson
Brown, Pierre du Pont, John Raskob, or Alfred P. Sloan, Jr., is
codified and preserved. It is thereby made accessible to others,
for both replication and further development.
These administrative systems create a shared pattern of
thought, with focus explicitly shifted to the pattern, rather than
the specific content. They thus condition the analyses and
decision premises of the actors. Specified kinds of thinking are
identified. By creating a shared frame of reference, with explicitly
directed perceptions—”The relation of finished goods inventory
to customer demand should not exceed thus-and-such a ratio
when scheduling production”, for instance—such systems
generalize knowledge far beyond its original discoverer or
discovery situation. It should be emphasized here that the kind
of knowledge generalized is qualitatively, logically different from
Significant Principles 175
the kind of knowledge codified in Taylor’s machine-oiling
instructions. The focus is on paths or patterns of thought and
kinds of thinking, rather than on specific actions.
These systems, in generalizing the insights they codify, also
make them accessible to change and refinement. It is no longer
necessary for the procedures of a firm to be the work of a single
mind. The systems, as Sloan’s comments make clear, measure
results, leaving the details of task performance to others. Because
management need pay attention only to these monitors, patterns
among them and over time assume more importance. True
management by exception, and true policy direction are now
possible, solely because management is no longer wholly
immersed in the details of the task itself.
Having been guided into replicating the patterns of thought
for connecting, say, production and inventory, it is now possible
to add the refinements of forecasting demand, and of revising
the forecasts or adjusting them in the light of general economic
conditions and actual demand.
Thus the original relationship, once comprehended, can be
changed and shaped, transcended and surpassed. The
development of flexible, rather than rote, responses to changing
situations grew out of the new attention to the coordinative task
made possible only because abstraction focused attention on
anomalies in patterns. The systemic relationship among
quantitative measures of performance and environmental
indicators—substantially abstracted, be it noted, from details of
task performance—is what permits control at this level.
Taylor was concerned primarily with individual tasks, or with
a single work flow; Church, with the ongoing business of the
firm as a whole, and with the relationships of individuals’ tasks
within that framework, with the coordination of the factory. Du
Pont and General Mortors are still more general, abstract and
logically inclusive, in that their methods of management relate
diverse products typically produced by many factories. For Du
176 Principles of Hotel Management
Pont, applying accounting methods meant adapting the practices
of the steel and traction industries to explosives manufacture,
and later to chemicals.
For General Motors, the task was adequately systematizing
related but distinct products. More importantly for both firms the
task was generalizing patterns of thought that would permit
decentralization. In both cases, the clear distinction between
details of task performance and the coordination of those details,
on the one hand, and the overarching coordinative task of
relating many tasks (products, divisions, factories) was
institutionalized not just in organization structure, but in the
administrative systems that controlled information flow and guided
critical decision making and analysis.
The administrative systems capture the knowledge of how
to think about this diversity, how to relate information about it
(clearly an abstraction from the things themselves), how to
coordinate and manage effectively. The shared frame of reference
that is created is more inclusive, and therefore logically superior,
to single-firm, single-factory frames of reference. By focusing
attention on the abstractions, the systems encourage both
replication of established patterns of thought—as relating
inventory and production, for instance—and their refinement,
keying in economic conditions or actual demand.
The chief accomplishment at Du Pont and General Motors
was in systematizing the ongoing business of the large,
complex, multidivisional firm. At Texas Instruments, the
main task was (and is) of an altogether different nature.
The highly changeful environment of modern electronics requires
a new set of administrative systems designed to decentralize
not only the performance of a routine task in a somewhat
turbulent environment, but the decentralization of innovation
itself, and with it the fundamental data-gathering of the policy
process.
Texas Instruments provides a capsule history of the
Significant Principles 177
development of management theory repeated in brief compass.
The PCC System institutionalized and insisted upon a
fundamental balance in the ongoing business.
This might be called the basic task of the firm, systematized
in ways that Church would find familiar. Coordinated management
of the task required adequate controls, proper attention to the
essential elements of product and customer and to the fit between
them. With the number of different products and markets, this
brought TI to the level of General Motors and Du Pont in the
evolution of its management systems.
The OST System is qualitatively different, and constitutes
a further distinct logical shift. It is concerned with a higher logical
level. Rather than coordinating multiple routine tasks, the OST
is focused on generating new tasks which may eventually
themselves become routing. Equally as important, it is concerned
with generalizing a shared frame of reference, a means of
acquiring new knowledge. As a system, the OST generalizes
a procedure for acquiring the requisite new knowledge, creating
a shared pattern of thought regarding innovation in much the
same way that Du Pont or General Motors created shared
frames of reference about ongoing business.
The OST specifies how to proceed, monitor, and evaluate.
In so doing, the OST makes it possible for Texas Instruments
to acquire not only new products, but new paradigms or identi-
ties. Thus TI is not just a geophysical exploration company, but
also a military instruments supplier; not just a geophysics and
military instruments company, but also an electronics firm, and
so on. Recent forays into consumer goods (calculators and
watches) are indicative of a major capacity for change.
Hierarchical Learning : In Steps to an Ecology of Mind,
Gregory Bateson notes that learning, as a communication
process, must be subject to the laws of cybernetics. He proceeds
to make use of Russell’s Theory of Logical Types in a behavioural
science context. Thus the concepts of hierarchy, distinctions
178 Principles of Hotel Management
between logical classes or types, and their importance in guiding
analysis suggest new ways of looking at learning phenomena.
In particular, accurate class distinctions are essential for a
meaningful discussion of learning.
Bateson suggests that there are different types of learning,
which may be arranged in a developmental hierarchy of
progressively more inclusive frames of reference with systematic
relationships between levels. Such a hierarchy highlights
important distinctions among the administrative systems
described above, retaining awareness of their similarities as
shared frames of reference accessible to others. Such a hierarchy
illuminates these administrative systems as varieties of codified
learning.
Taking Bateson a step closer to organizations, Fenwick
defines a hierarchy of learning activities in an organization
without, however, defining what “knowledge” or “learning” might
be in an extra-individual context. Recasting these concepts in
the light of the kinds of distinctions necessary to define
organizational learning, we can take into account accessibility
to others, preservation of knowledge, and a shared frame of
reference. Thus we can:
1. Record the specifics of basic tasks;
2. Record the specifics of new tasks, and routinize them
when they recur;
3. Generate approaches to analyzing and recording new
tasks;
4. Extract the general principles of tasks, going beyond
simple replication to efficiency, and possibly to
generalized application of the new principles and
efficiencies;
5. Develop programmes for approaching new task areas,
different from what has been routinized;
6. Evolve training programmes to teach new approaches;
Significant Principles 179
7. Shape or change the organization’s mission or paradigm;
and
8. Develop approaches for repeated or ongoing paradigm
change.
What is the utility of defining so exhaustive a hierarchy? The
distinctions facilitate a more precise discussion of organizational
learning (as opposed to individual learning), and of organizational
learning (as opposed to “mere adaptation”). Each level
distinguishes a more far-reaching and thoroughgoing kind of
change, with wider impact and longer-range consequences.
Finally, this is a developmental sequence. Later levels rest upon
the conceptual foundation of earlier levels, as the historical
context provided by early chapters emphasizes. Until the
managerial technology of Taylor and Church had been developed,
the coordination sought by Du Pont and General Motors was
impossible.
As Bateson points out, the Theory of Logical Types implies
that in such a hierarchy each level constitutes a “meta- commu-
nication,” that is, a communication “about” the next lower level
and inclusive of all elements in it. This is particularly important
in the organizational context, where the epistemology of moving
from “subjective knowledge” to “objective knowledge”— the hinge
between individual and organizational knowledge— turns upon
just such a communication phenomenon.
A shared frame of reference, relating lower-level elements
and guiding their interpretation in order that similar stimuli result
in similar results, is dependent in the organizational setting,
upon some objective or shared knowledge. That is, it is dependent
upon true communication, the sharing of a common frame of
reference. This obviously goes beyond simple exchange of
noise to shared understanding.
The meta-communication, in other words, provides a
common frame of reference within which a common
understanding can be expected. This may, particularly in the
180 Principles of Hotel Management
complex organization, be complicated by diversity of interest or
speciality, or by organization size or geographic dispersion, for
instance. Organizational learning, despite these complications,
must be a communication phenomenon. Only through
communication does individual insight become accessible to
others, and thereby transcend its discoverer, making possible
synergy.
A hierarchy of types such as the one suggested provides
a means of focusing attention on distinctions between levels,
or, in the case of organizations, between systems. What matters
is not that there are eight levels here, rather than the three
individual-learning levels Bateson defines : “What is
important is the developmental nature of the sequence, and
the assistance that these distinctions provide, helping to
distinguish definitively between rote response in an organizational
setting (even a complex rote response) and something more
sophisticated.
More important still, in delineating the distinction, the
hierarchy suggests implicitly the criteria by which “learning” in
organizations might be judged, the vocabulary with which such
phenomena might be discussed, and the likely direction for
systems evolution”. On this basis, the already-established data
base (Taylor, Church, Du Pont and General Motors, and Texas
Instruments) shall be used to make the concept of organizational
learning more clear.
Hierarchical Applicability : The lower reaches of the
hierarchy set out here concern the areas of Taylor’s work. While
learning to perform any task is learning to perform a “new” task
for the first time, the distinction gains importance in an
organizational setting. Thus a basic task may be defined as one
for which a programme already exists. This is the kind of
“knowledge” of “learning” that Cyert and March are willing to
countenance in organizations.
Taylor’s contributions include both specification of particular
Significant Principles 181
knowledge (how to oil a machine) and ways to learn new tasks
(ways for the organization to record and thereby retain new
knowledge, fitting it into is system). The ideas of time and motion
study, of noting elemental movements and aggregating them,
of adequate description constitute a frame of reference,
accessible to others, which specifies how to acquire and preserve
new knowledge and expedite its transmission to others.
It is important to underline again the difference between
individual and organizational learning. Clearly an individual can
approach a task in a variety of ways. What Taylor has outlined
is a way to record and transmit organized individual perceptions,
making them both accessible to others and independent of the
original observer. It is via the specified, shared frame of reference
Taylor designates that these perceptions are removed from the
subjective to the objective world.
Knowledge so recorded and codified is no longer the preserve
of the individual. And anyone following Taylor’s procedures has
gone through a series of guided observations whose recorded
output is just such an “objective” record, comprehensible to
others trained in the method. Hence the organization is no
longer dependent wholly on serendipity or individual talent to
create an approach to acquiring new knowledge; one has been
specified. These rules provided a limited example of rules for
learning. Taylor’s metal-cutting experiments and Church’s “organic
functions” as well are logically superior, because they are more
inclusive than the simple recording of observations.
The overarching framework is a set of guides for interpretation
and for relating many specific tasks. Their focus is extracting
general principles and attaining efficiencies. General Motors
and Du Pont are to be considered here too, as specifying
general principles (abstractions) and noting efficient relationships
among elements. Only through abstraction is more general
coordination possible. Only through a shared frame of reference,
generalized beyond the original discoverer, is such coordination
182 Principles of Hotel Management
feasible; and with it, something that can meaningfully be described
as “organizational” learning.
The upper reaches of this hierarchy, beyond level three,
concern just the types of “learning rules” that Cyert and March
exclude from their consideration. Bateson’s much less detailed
hierarchy was intended for discussions of individual learning;
but the same distinctions—with some adaptation to take into
account the need for communication and extra-individual
accessibility—are useful for a discussion of organizational
learning.
By considering the hierarchy in its logical sense, the problem
of “structure” versus “process” becomes clearer, for example.
For any level, the given level is “process,” subject to change
according to the fixed rules specified by levels above. The levels
above are, therefore, “structure,” and are the “learning rules” that
Cyert and March exclude.
The advantage of such a hierarchy is that it permits and
encourages a richer view of the learning phenomena, and thus
provides a more powerful model for considering them. The
levels provide ranges of inclusiveness within which to assess
the impact or pervasiveness of change. We can choose
temporarily to see a certain level as structure, without wholly
ignoring the possibility of change there, or in higher levels still,
over a longer time frame.
Similarly, higher levels correspond to corporate goals; shared
frames of reference of far-reaching consequence, changeable
only with major effort and over extensive time-horizons. Indeed,
such flexibility would seem critical in dealing with learning,
which must be a change phenomenon, longitudinal in its
development.
Thus, while the “learning rules” may change only slowly over
time, they are, nonetheless, only relatively fixed. The matter of
organization or patterning or arrangement is critical here in
specifying rules and their application. The higher levels of the
Significant Principles 183
hierarchy are changeable, given the proper focus and time span.
They are not excluded nor seen as wholly fixed. It is this
distinction that allows a meaningful discussion of morphogenesis,
for “change of shape” or re-structuring must also be a long-term
developmental phenomenon.
Similarly too, in the largest sense, change of mission or
paradigm is change of “shape,” and can be explicitly included
here. Such changes as these require an even longer time
horizon and an even more inclusive frame of reference. Buckley’s
question recurs: “The basic problem is the same: how do
interacting personalities and groups define, assess, interpret,
and act on the situation?” In light of the foregoing discussion,
the question can now be answered, in part at least, by means
of the shared frames of reference created by administrative
systems and the ‘learning rules’ they impound. It matters little
that the initial insight was an individual’s; the codification and
communication of that insight, and its translation into a shared
frame of reference transcend this origin by communicating the
knowledge and preserving it.
Taylor and Church, in providing methods for systematizing
or routinizing ongoing business, illustrate level two: routinizing
already-learned procedures so that success in what was once
a “new” task can be replicated. Replicability, predictability, and
thus increased control over the myriad details of concrete task
performance were central to one aspect of the work of the
systematic management thinkers.
Another aspect, that of efficiency and general principles
(clearly visible in the writings of both Taylor and Church) is of
a higher logical level. The distinction is important, because it
determines the criteria on which the procedure is to be judged.
Simple replication might well be fortuitous; it certainly smacks
of the Black Box with wired-in connections. It is not evidence
of “learning” in any meaningful sense. Generating approaches
to new tasks is different. A format for approaching new tasks
184 Principles of Hotel Management
by making possible the continued acquisition of new knowledge
repeats a process, rather than its content.
It generalizes principles or relationships among elements,
guiding thinking. This goes well beyond replication of content.
Extracting general principles and generalizing efficiency methods
would seem clear evidence of learning, rather than mere iteration.
Built into a system in Taylor’s work-simplification methods, or
Church’s management systems, they would be evidence of
organizational learning, because they would be accessible far
beyond the discoverer. Similarly, the Du Pont and General Motors
management information systems and the controls upon which
they rest generalize and communicate principles and
relationships which are applied to the business of the corporation
as a whole (including to new products) to gain efficiencies. Thus,
for instance, reducing the cash tied up in divisional bank accounts
by arranging for the speedy transfer of funds was a general
application of the principle of increasing return by increasing
turnover of inventories—including “inventories” of cash.