UNIT 1

INTRODUCTION

Definition of Management
Management is a process of planning, decision-making, organizing, leading, motivating, and
controlling the human resources, financial, physical, and information resources of an
organization to reach its goals efficiently and effectively.

Harold Koontz defined "Management is the art of getting things done through and with
people in formally organized groups".

According to Henry Fayol, "To manage is to forecast and to plan, to organize, to command,
to coordinate and to control".

According to Peter Drucker, "Management is a multi-purpose organ that manages the

business and manages managers and manages workers and work".

Nature of Management
The nature of management is:

1. Management as a systematic process of planning, organizing, staffing, leading, and

controlling. As managers, people carry out the managerial functions of planning,
organizing, staffing, leading, and controlling.
2. The concepts and activities of management apply to all levels of management, as well as
to all types of organizations and activities managed.
3. The aim of all managers is universal: to create a surplus.
4. Management identifies a special group of people whose job is to direct the effort and
activities of other people toward common objectives
5. Management is concerned with productivity, thereby implying efficiency and
effectiveness. Factors of production of an organization such as labor, capital, land,
equipment, etc. are used efficiently and effectively prepared through management for
achieving organizational goals.
 6. Management has to pay attention to fulfilling the objectives of the interested parties.
7. Management is the art and science of getting work done by other people.
8. “Maximum results with the minimum of efforts” is the motto of management of any
organization.

Process of Management
Management process, in simple terms, is a well-defined method for setting goals, planning, and
controlling the execution of any operation. It’s a collection of interconnected processes or
functions that help an organization achieve its goals.
Salient Features of a Management Process
The following features characterize a management process:

1. Management is Highly Aspirational

The accomplishment of predetermined goals is an important part of the management
process. It’s a tool for achieving predetermined goals and objectives. There is no reason
to have a management process in place if it has no purpose. Every action done by an
organization’s management should be directed toward achieving a certain goal. The
completion of predetermined objectives is a measure of a company’s leadership
performance.

2. Management is Omnipresent
Management is prevalent in today’s environment. All organizations, whether they be
clubs, governments, militaries, or businesses, require an effective management system.
The fundamental management principles apply to all aspects of an organization. Every
day, managers at all levels do the same critical functions. The management process is a
global notion because of this constant necessity.

3. Managing is a Continuous Process

Management is not a one-time event; it is a continual process. Management is a
continuous activity because of the continuing desire to attain various organizational
goals.
 4. Management is an abstract concept
Management isn’t visible, and it can’t be felt in the same way. Only the accomplishments
of management can be evaluated, and a well-managed organization can be compared to
one that has been poorly managed.
5. Management is Social in Nature
Because it requires human relationships, management is a social activity. As a result of
opposing social values and cultures, the human element is the most important ingredient
in the management process. It is a function that changes society, preserves the
community, and promotes the community’s long-term goals.
6. Management is Versatile
Human reactions in ambitious conditions are the subject of management. Management
requires knowledge and skills from a variety of disciplines, including sociology,
psychology, engineering, economics, anthropology, mathematics, and others. This feature
contributes to managing a complex experience.
7. Management is Conditional
There are various options available. The most appropriate manner of accomplishing any
work is determined by the current situation. Due to the situation, it’s probable that
management isn’t doing things correctly. Accountability is essential for successful
managers.
8. Management is a Team Effort
Individual efforts are synchronized with those of the team. A single person cannot
manage the management function. All managerial actions, such as goal formulation, plan,
policy development, implementation, and follow-up, are the result of a concerted effort
by a group of individuals who envisage the future of an organization.
9. Management is a type of administration.
Management is concerned with the administration and management of people’s activities
in order to achieve set goals. Management is often referred to as the process of setting,
defining, and achieving the goals of a human group.

Functions of a Management Process

Planning
In management, planning entails deciding on appropriate goals and activities to pursue, as well
as identifying what tactics to employ, what stages to take, and what resources are required to
attain the objectives.
Organizing

This process of developing working relationships enables employees to coordinate their efforts in
order to attain shared organizational goals.

Leading

This role entails articulating a vision, and convincing, encouraging, and inspiring employees.

Staffing

In a systematic method, enlisting and recruiting workers for positions within various teams and
departments.

Controlling

Assess your ability to attain your objectives, improve your performance, and take action. Create
procedures to aid in the establishment of standards so that you can measure, compare, and make
judgments.

Significance or Importance of Management

Management plays a vital role in an organization. Its significance may be studied as under:

2. Achieving Group Goals: Management helps in the collaboration and coordination of

individual efforts so as to accomplish individual targets together with the group goals.
3. Increases Efficiency: Management improves productivity by managing resources in a
reliable conceivable way in order to decrease cost upscale potency.
4. The smooth operation of the business: Management ensures the smooth operation of the
business through sound planning, organization, direction, and effective control.
5. Adjustment with change: Management ensures adaptation of the organization and its
working in all changing situations.
 6. Achieving personal objectives: Management promotes leadership and provides
motivation to employees to operate effectively in order to accomplish their personal aims
while working together towards the organizational goals.
7. Development of Society: Management helps in the enhancement of the community by
manufacturing reliable and quality goods, establishing employment opportunities, and
developing innovative technologies.

Managerial Levels
Generally speaking, there are three levels in the hierarchy of an organization.
Top Management: They consist of the senior-most executives of the organization by whatever
name they are called. They are usually referred to as the chairman, the chief executive officer, the
chief operating officer, the president, and the vice president. Top management is a team
consisting of managers from different functional levels, heading finance, marketing etc. For
example chief finance officer, vice president (marketing). Their basic task is to integrate diverse
elements and coordinate the activities of different departments according to the overall objectives
of the organization. These top-level managers are responsible for the welfare and survival of the
organization. They analyze the business environment and its implications for the survival of the
firm. They formulate overall organizational goals and strategies for their achievement. They are
responsible for all the activities of the business and for its impact on society. The job of the top
manager is complex and stressful, demanding long hours and commitment to the organization.
Middle Management: is the link between top and lower level managers. They are subordinate to
top managers and superior to the first-line managers. They are usually known as division heads,
for example, organizations. At the same time, they are responsible for all the activities of first-
line managers.
Supervisory or Operational Management: Foremen and supervisors comprise the lower level
in the hierarchy of the organization. Supervisors directly oversee the efforts of the workforce.
Their authority and responsibility is limited according to the plans drawn by the top
management. Supervisory management plays a very important role in the organization since they
interact with the actual workforce and pass on instructions of the middle management to the
workers. Through their efforts quality of output is maintained, wastage of materials is minimized
and safety standards are maintained. The quality of workmanship and The quantity of output
depends on the hard work, discipline and loyalty of the workers.

Managerial Skills

There are four skills of managers are expected to have the ability of:
1. Technical skills: Technical skills that reflect both an understanding of and proficiency
in a specialized field. For example, a manager may have technical skills in accounting,
finance, engineering, manufacturing, or computer science.
2. Human Skills: Human skills are skills associated with a manager’s ability to work well
with others, both as a member of a group and as a leader who gets things done through
others.
3. Concept Skills: Conceptual skills are related to the ability to visualize the organization
as a whole, discern interrelationships among organizational parts, and understand how the
organization fits into the wider context of the industry, community, and world.
Conceptual skills, coupled with technical skills, human skills, and knowledge base, are
important ingredients in organizational performance.
4. Design Skills: It is the ability to solve problems in ways that will benefit the enterprise.
Managers must be able to solve the problems.

Roles of Manager
Henry Mintzberg identified ten different roles, separated into three categories. The categories he
defined are as follows
Interpersonal Roles
1. The ones that, like the name suggests, involve people and other ceremonial duties. It can
be further classified as follows
2. Leader – Responsible for staffing, training, and associated duties.
3. Figurehead – The symbolic head of the organization.
4. Liaison – Maintains the communication between all contacts and informers that compose
the organizational network.

b) Informational Roles
Related to collecting, receiving, and disseminating information.

1. Monitor – Personally seek and receive information, to be able to understand the

organization.
2. Disseminator – Transmits all import information received from outsiders to the members
of the organization.
3. Spokesperson – On the contrary to the above role, here the manager transmits the
organization’s plans, policies and actions to outsiders.

c) Decisional Roles
Roles that revolve around making choices.
1. Entrepreneur – Seeks opportunities. Basically they search for change, respond to it, and
exploit it.
2. Negotiator – Represents the organization at major negotiations.
3. Resource Allocator – Makes or approves all significant decisions related to the allocation
of resources.
4. Disturbance Handler – Responsible for corrective action when the organization faces
disturbances.

Management v/s Administration

Coordination: The Essence of Management:

Coordination brings unity of action and integrates different activities of the organization.
Coordination is considered as the essence of management for the following reasons:
Coordination is needed to perform all the functions of management:
1. In planning, coordination is required between the main plan and supportive plans of
different departments.
2. In organizing coordination is required between different resources of an organization and
also between authority responsibility and accountability.
3. In staffing, coordination is required between the skill of a person and job assigned to him,
between efficiency and compensation etc.
4. In directing function coordination is required between superior and subordinates, between
orders, instructions, guidelines and suggestions etc.
 5. In controlling function coordination is required between standards and actual
performance.

Coordination is required at all levels:

1. Top-level requires coordination to integrate all the activities of the organization and lead
the efforts of all the individuals in one common direction.
2. Coordination is required at the middle level to balance the activities of different
departments so that these can work as a part of one organization only.
3. The lower level requires coordination to integrate the activities of workers toward the
achievement of organizational objectives.

Coordination is the most important function of an organization:

Any company that fails to coordinate its activities cannot survive and run successfully for a long
period of time.

The Classical theory of management

The classical theory signifies the beginning of the systematic study of management organization.
It is often called the traditional theory. The classical theory incorporates three viewpoints:
 Taylor’s Scientific Management
 Fayol’s Administrative Management
 Weber’s Ideal Bureaucracy (an organization based on rules and regulations, formal
relations, specialization, etc.).
All three concentrated on the structure of the organization for greater efficiency. Salient features
of the classical approach are as follows:
1. The classical theory laid emphasis on the division of labor and specialization, structure,
scalar and functional processes, and span of control. Thus, they concentrated on the
anatomy of formal organization.
2. Classical theorists emphasize organization structure for the coordination of various
activities. They ignored the role of the human element.
3. The classical theory ignored the impact of the external environment on the working of the
organization. Thus, it treated organizations as closed systems.
 4. The efficiency of the organization can be increased by making each individual efficient.
5. The integration of the organization is achieved through the authority and control of the
central mechanism. Thus, it is based on centralization of authority.
6. There is no conflict between the individuals and the organization. In case of any conflict,
the interests of the organization should prevail.
7. The people at work could be motivated by the economic rewards as they were supposed
to be ‘rational economic persons’.

Taylor’s Scientific Management

F.W. Taylor (1865-1915) was the first person who insisted on the introduction of scientific
methods in management. He launched a new movement during the last decade of the 19 th century
which is known as ‘Scientific Management’. That is why, Taylor is regarded as the father of
scientific management. Taylor was an American engineer who responded to the challenges of
management around the turn of the century.
During that period, productivity was very low, labor became extremely dissatisfied and
industries had to face frequent strikes and lockouts. Taylor’s contribution was a system based on
science whereby lower labor costs could be achieved simultaneously with higher wages. He
suggested a change in the mental attitudes of the workers and the management to bring harmony
to the industry. Scientific management means the application of scientific methods to the
problems of management. Taylor advocated scientific task setting based on time and motion
study, standardization of materials, tools, and working conditions, scientific selection and
training of workers, and so on.
The basic principles(rules) of Taylor's Scientific management were:
1. Standardization of work methods: A scientific method for each job/task of a worker
via scientific observation and analysis of a particular job to find out the best way to do
that task that would lead to reduced work for the worker as he could do more with a
limited number of movements. The use of benchmarked and standardized tools and
equipment and methods would improve quality control and inspections thus reducing the
cost of production and increasing efficiency. Taylor emphasized the ' right man for the
right job' by proper selection and training and ensuring fair wages and reasonable prices
for standardized goods to consumers.
 2. Equal division of work and responsibility between management and workers: At
that time workers had all the load of work and they were left to fend for themselves to
complete the work. Thus Taylor advocated that the management had to seriously
undertake functions for which it was best suited i.e. planning, organizing, controlling, and
determining methods of work instead of leaving all this to the mostly uneducated worker
who knew nothing of this and was only concerned with doing his job through the skills he
had. This principle according to Taylor would help create a mutual understanding and
dependence between the latter and the former in the long run and would eliminate all
unnecessary conflict and mistrust that existed between the two at that time. He believed
that this mutual harmony instead of discord is the just and rightful characteristic of
scientific management.
3. Scientific selection of workers and their progressive development: He advocated
through this principle the need for the management to study the nature and character of
each job/work and then scientifically choose the right worker for the same who possesses
the necessary skills for the same. It is also the duty of the management to study the
limitations and possibilities of workers for their development as Taylor believed that
every worker had a definite potential for development. he advocated for a systematic and
thorough training of workers for the job after being selected. It is also important that the
worker accepts the new methods, tools, and conditions in their own interest and does it
sincerely.
4. Mutual collaboration of workers and management: According to this principle there
should be active cooperation and cordial relations between management and workers
instead of discord and distrust in order to increase the production and efficiency of the
company/organization. A healthy environment needs to be created. A formally prescribed
scientific method of production in organizations will lead to a lot of conflicts that occur
due to a lack of clear communication and confusion from top to bottom between the latter
and the former disappearing.
Apart from these four basic principles Taylor also expressed concern about the following in the
process of Scientific management:
1. Mental Revolution: He advocated a change in the attitudes of workers and management
towards each other and their responsibilities. Managers should stop worrying about
 accumulating the most and instead focus on generating the most which will lead to more
funds for them. The workers should stop worrying about increasing wages without
putting in extra effort and instead increase their responsibility and efficiency and increase
production which will definitely lead to a raise in their salaries sooner or later.
2. Division of work: The planning function is to be taken over by management who were
appointed for the same as they have been trained and skilled for the same and workers are
to concentrate on completing their functional task as per the rules and guidelines and
methods planned by the former. Thus, each doing the job for which they have been
appointed and are best skilled.
3. Selection and training of workers: Taylor advocated the selection and training of
workers for the best performance of the work in an organization. The right person for the
right job. This is the duty of the management to choose a candidate for a particular job on
the basis of his nature, character, and capacities and also provide formal training and
clear instructions to them to perform prescribed motions with the standardized tools and
materials.
4. Work study and work measurement: Work should be studied systematically and
scientifically and various laws and rules are to be applied to everyday work to find the
best way to do that job. Taylor studied each and every movement of the worker with a
stopwatch and removed all the unnecessary movements and found out the minimum time
required for each job. This not only helped reduce time but also slowed the movement
and fatigue of workers thus increasing efficiency and production leading to great profits
for the organization.
5. Work as an individual activity: Taylor never advocated group work/activity. He
asserted that people were only motivated by personal ambition and tended to lose their
individuality/individual drive in a group setting. He stated that workers should have no
verbal interaction as it leads to undue personal pressure.
6. Development of management thinking: He viewed scientific management as a medium
to develop management as a science. It means that specific laws and rules could be
derived for management studies and practices and those laws relate specifically to wage
rates and way of doing work to increase the rate of production. Taylor advocated the use
of standardized tools and equipment as well as methods.
 7. Standardization of tools: Taylor himself developed and invented many standardized
tools to increase production and efficiency and those after a successful stint became the
benchmark to be used for those particular jobs. One of his most famous studies involved
shovels. He noticed that workers used the same shovel for all materials. He determined
that the most effective load was 21½ lb, and found or designed shovels that for each
material would scoop up that amount. Taylor was able to convince workers who used
shovels and whose compensation was tied to how much they produced to adopt his
advice about the optimum way to shovel by breaking the movements down into their
component elements and recommending better ways to perform these movements. This
led to a huge increase in efficiency and production.
8. Task prescription: It means that a worker should get a clear prescription and description
of what task is to be done by them in clear language and with instructions that are
understandable by him/her by the management through proper planning.
9. Trade unions: Taylor was against trade unions or group activity as mentioned earlier as
he believed that it was unnecessary since the goal of the workers and management was
the same. Scientific management would make everything crystal clear for everybody in
the organization ridding it of any conflict and with fair wages, there is no need for trade
unions.
10. Incentive scheme: Taylor suggested a piece work rate incentive for workers. That means
if a worker achieves a greater output than the target assigned to him he/she would then
receive a bonus payment for each piece extra. And the bonus should be generous and
consistent to encourage the workers to produce more.

Criticism of Scientific Management

Taylor’s scientific management was criticized not only by the workers and managers but also by
the psychologists and the general public. The main grounds of criticism are given below:
1. Considered as pro-capitalist. only favoring the rich and ruling class society and not the
workers.
2. Trade unions criticized it as a theory to destroy collective bargaining with the ruling class
by the workers for their benefits.
 3. Very mechanical and thought of workers as nothing more than mere cogs in a wheel. Not
humanistic as it only concerned itself with efficiency and production and managerial
problems not the psychological and emotional problems of workers like the routine and
monotony of their work and uncertainty of employment, etc. Humanistic approach
scholars advocated that workers also needed justice and status as well as opportunities
and not just a rise in wages.
4. Managers also opposed Taylor as they felt he was putting an unnecessary burden on them
and equating them with workers through his principles of equal division of work and
responsibility and training for managers.
5. His opposers stated that he made the workers nothing more than robots who were
dependent only on orders of management and were not to use their own heads from the
experience and skills they had and doing the job physically he knew much more than
management.
6. They opposed his idea of functional foremanship by saying that the worker would fail as
he would not be able to please so many supervisors every time.
7. Psychologists stated that simply following rules makes workers depersonalized and they
would develop a dislike for their work this would lead to the robotizing of workers with
no ideas of their own.

Principles of Management (Contribution of Henry Fayol)

Henry Fayol was born in 1941 Constantinople in France. He graduated as a mining engineer in
1860 from the National School of Mining. After his graduation, he joined a French Coal Mining
Company as an Engineer. After a couple of years, he was promoted to manager. He was
appointed as General Manager of his company in 1888. At that time, the company suffered
heavy losses and was nearly bankrupt. Henry Fayol succeeded in converting his company from
near bankruptcy to a strong financial position and a record of profits and dividends over a long
period.
Concept of Management:
Henry Fayol is considered the father of the modern theory of general and industrial management.
He divided general and industrial management into six groups:
1. Technical activities: Production, manufacture, adaptation.
 2. Commercial activities: Buying, selling and exchange.
3. Financial activities: Search for an optimum use of capital.
4. Security activities: Protection of property and persons.
5. Accounting activities: Stock-taking, balance sheet, cost, and statistics.
6. Managerial activities: Planning, organization, command, coordination, and control.

Fayol’s Principles of Management: [14 Principles]

Division of work
Work should be divided among individuals and groups so that they can focus on their portion of
the task, build up skills, and become more productive. (Specialization)

Authority
Fayol defined it as the right to give orders and the power to exert obedience. With authority
comes responsibility and accountability.

Discipline
For the best interest of an organization, there should be complete obedience, diligence, effort,
and outward marks of respect which are equally applicable to everybody regardless of rank. To
establish and maintain discipline there must be clearly defined roles, rules, and regulations for
individuals and groups e.g. code of conduct and ethics.

Unity of Command
An employee should only receive commands from one superior. Violation of this principle
creates confusion in reporting lines.

Unity of Direction
An organization should be moving towards a common objective. This brings about harmony of
effort toward the mission and vision.
Subordination of individual interests to the General interests
The interests of one employee should not be allowed to become more important than those of the
organization. An organization should come up with approaches that ensure personal interests and
organizational interests are aligned as closely as possible.

Remuneration
Payment should be fair proper and satisfactory to the employee. This in turn creates a
harmonious relationship and a pleasing atmosphere for work.
It should include financial and non-financial compensation.

Centralization
Decision-making is made at the top management level while in decentralization decision-making
is distributed downwards among all levels of an organization. Fayol recommended an
appropriate balance of the two depending on the size, nature of work, situation, and weight of the
decision.

Scalar chain
Every organization has a hierarchy and employees should be aware of where they stand in the
organization’s hierarchy or chain of command. E.g. Subordinates report to superiors

Order
Systematic orderly, equal management and distribution of people, places, and materials.
Everything should have its place.

Equity
Management should treat all its employees in a fair and just manner at all levels.

Stability of tenure of personnel

The principle states that an organization cannot run smoothly if it suffers from constant
employee attrition, and organizations should make an effort to retain employees. A high attrition
rate will cost an organization time, resources, and perhaps some crucial organizational memory.

Initiative
Management should provide opportunities or freedom to employees to suggest new ideas,
experiences, and more convenient methods of work to ensure effectiveness in the organization.

Espirit De Corps (Teamwork)

Organizations should harness harmony, team spirit, and unity among personnel.

Criticism of Fayol’s Principles of Management

Though the proponents of the management process approach have made significant contributions
to the development of thought, their work suffers from the following limitations:
1. There is no single classification of managerial functions acceptable to all functional
theorists. There is also a lack of unanimity about the various terms such as management
and administration, commanding and directing, etc.
2. The functionalists considered their principles to be universal in nature. However many of
the principles have failed to deliver the desired results in certain situations.
3. The functional theorists did not consider the external environment of business.
4. Fayol overemphasized the intellectual side of management. He felt that management
should be formally taught, but he did not elaborate on the nature and contents of
management education.

Max Weber
Max Weber, a German scientist, defines bureaucracy as a highly structured, formalized, and
impersonal organization.
He also instituted the belief that an organization must have a defined hierarchical structure and
clear rules, regulations, and lines of authority that govern it. Max Weber's bureaucracy ideally
has the following characteristics:
 1. Specialization of labor.
2. A formal set of rules and regulations.
3. Well-defined hierarchy within the organization.
4. Impersonality in the application of rules.

Neo-classical Theory of Management

Human Relations Approach
The classical writers including Weber, Taylor, and Fayol neglected the human relations aspect.
The neo-classicists focused on the human aspect of industry. They modified the classical theory
by emphasizing the fact that an organization is a social system and the human factor is the most
important element within it. They conducted some experiments (known as Hawthorne
Experiments) and investigated informal groupings, informal relationships, patterns of
communication, patterns of informal leadership, etc. This led to the development of a human
relations approach. Elton Mayo is generally recognized as the father of the Human Relations
School. tc.
The human relations approach is concerned with the recognition of the importance of the human
element in organizations. It revealed the importance of social and psychological factors in
determining workers’ productivity and satisfaction. It was instrumental in creating a new image
of man and the workplace The neo-classical or human relations approach put stress on
interpersonal relations and informal groups at the workplace.
The human relationists argued that achievement of organizational objectives is impossible
without the willing cooperation of people and such cooperation cannot be automatically secured
or ordered. It has to be consciously achieved. The neo-classical approach advocated people
people-oriented organization structure which will integrate both informal and formal
organizations.
Features of Elton Mayo’s Human Relations Approach:
The main features of the Human Relations Approach to management are the following:
Since management is getting things done through and with people, a manager must have a basic
understanding of human behavior in all respects—particularly in the context of work groups and
organizations.
The managers must study the inter-personal relations among the people at work.
Larger production and higher motivation can be achieved only through good human relations.
The study of management must draw the concepts and principles of various behavioral sciences
like Psychology and Sociology.

Contribution of Elton Mayo to Management Thought:

George Elton Mayo (1880-1949) was a professor at the Harvard Business School. He conducted
the famous ‘Hawthorne Experiments’ at the Hawthorne plant of the Western Electric Company in
the USA during 1927-32 with his associates.
These experiments are described below:
 1. Illumination Experiments:
From these experiments, it was revealed that productivity could be increased not only by
improving the working environment but also through informal social relations among the
members of the working group.
2. Relay Assembly Test Room Experiment:
In this experiment, a small homogeneous working group was constituted. Several new
elements were introduced in the work environment such as—shorter working hours,
proper rest periods, improved physical conditions, friendly supervision, free social
interaction among the group members, and so on.
During the period of the experiment, productivity and morale increased. Productivity and
morale were maintained even if the improvements in the working conditions were
withdrawn. The researchers concluded that socio-psychological factors such as the
feelings of being important, recognition, participation, informal work group, non-
directive supervision, etc. held the key to higher productivity.
3. Mass Interviewing Programme:
A large number of workers were interviewed to know their perceptions and orientation on
working life. The results again confirmed the importance of informal relations, social and
psychological needs, and their impact on the behavior of the workers.
4. Bank Wiring Observation Room Experiment:
A group of 14 workers was observed with regard to their work behavior. The observation
revealed the informal production norms set by the workers and the existence of informal
relations in the group.

The conclusions of the Hawthorne Experiments are pointed out below:

1. A factory is not only a techno-economic unit but a psycho-social organization also.
2. The workers spontaneously form small informal groups. The norms and values of such
groups have a significant influence on the behavior and performance of the workers.
3. Physical conditions of work have some influence on the workers’ morale and
productivity. However, their interpersonal relations, the attitude of the supervisors, and
other social and psychological factors have a far greater influence.
4. Usually, the workers act or re-act not as individuals but as members of a group.
 5. The workers are not mere economic men motivated by money alone. They respond to the
total work situation including recognition, participation, etc.
6. The informal leaders play an important role in setting and enforcing group norms.
7. The managers must understand and recognize the interpersonal and group relations on the
job.

Criticism of Human Relations Approach

The human relations approach has been criticized on the following grounds:
1. Lack of Scientific Validity: The human relationists drew conclusions from Hawthorne's
studies. These conclusions are based on clinical insight rather than on scientific evidence.
2. Over-emphasis on Group: The human relations approach over-emphasizes the group
and group decision-making.
3. Over-stretching of Human Relations: It is assumed that all organizational problems are
amenable to solutions through human relations.
4. Limited Focus on Work: The human relations approach lacks adequate focus on work.
5. Over-stress on Socio-psychological Factors: The human relations approach undermines
the role of economic incentives in motivation and puts excessive stress on social and
psychological factors.

Behavioral Science Theory

Behavioral Science Theory combines elements of psychology, sociology, and anthropology to
provide a scientific basis for understanding employee behavior. It examines why employees are
motivated by specific factors, such as social needs, conflicts, and self-actualization. It recognizes
individuality and the need for managers to be sociable.
The behavioral approach is unique from the human relations theory in that it emphasizes
leadership as a determining factor in management success.
It presents an increased focus on group relationships and group behavior in organizational
effectiveness.
The objective of behavioral science is the ability to predict future employee behaviors.
The main propositions of the behavioral science approach can be summarized under:
1. An organization is a socio-technical system
 2. The interpersonal or group behavior of people in the organization is influenced by a wide
range of factors.
3. The goals of the organization are to be harmonized with an understanding of the human
needs
4. The multitude of attitudes, perceptions, and values are prevalent among employees, and
these characterize their behavior and influence their performance
5. As a result, some degree of conflict is inevitable in the organization and not necessarily
undesirable.

Motivation Theory
Contributors and theories in the area of Motivation or motivating worker productivity include:
Need Hierarchy Theory - Abraham Maslow, an eminent U.S. psychologist, gave a general
theory of motivation known as the Need Hierarchy Theory in his paper published in 1943.
Maslow made assumptions that people need to satisfy each level of need, before elevating their
needs to the next higher level e.g. a hungry person's need is dominated by a need to eat (i.e.
survival), but not to be loved, until he/she is no longer hungry. The level of needs includes
Physiological, Safety, Social, Ego or self-esteem, Self-Fulfillment, or Self-Actualization.
Theory X & Y - Douglas McGregor was a social psychologist. Theory X, the employee is lazy
and avoids responsibility. These employees need coercion and control. This type of person is the
rational economic man. Theory Y, the employee likes working, and accepts or seeks
responsibility. These employees need space to develop imagination and ingenuity. This type of
person is the self-actualizing man. This approach identifies just two extreme types of employees;
but, it laid the groundwork for how management deals with employee motivation based on
personality type.
Two-Factor Theory - Frederic Herzberg found that from his research, in the workplace there are
actually two factors that influence motivation - Motivators and Hygiene. Motivators include
Achievement, Recognition, Nature of the Work, Responsibility, and Advancement. Hygiene
includes Company Policy and Recognition, Supervision of Technical work, Compensation,
Interpersonal Relations - Supervision, and Working Conditions. While motivators promote
employee satisfaction, hygiene prevents dissatisfaction. This work provided an additional
framework for how individual relationships and environmental factors contribute to employee
motivation.
Hugo Munsterberg - Munstberg's work gave rise to the modern understanding of industrial
psychology. His work dealt with many topics including hiring workers who had personalities and
mental abilities best suited to certain types of vocations as the best way to increase motivation,
performance, and retention, methods of increasing work efficiency, and marketing and
advertising techniques. Mnsterberg focused on selecting the person with the correct skillset with
the correct position to maximize their productivity, and to select those that have "fit personalities
and reject the unfit ones." He used psychological tests that limit subjectivity that is possible
through more traditional techniques of introspection instead of using measurements of one's
personality, intelligence, and other inherent personality traits to try to find the best possible job
for every individual. Mnsterberg also explored under what psychological conditions an employer
can secure the most and highest quality output of work from every employee by looking at the
effects of changing the workspace environment, what can possibly affect workers' production,
problems of monotony in the factory, and other vocations that involve tedious repetitive tasks
and how to avoid these situations, studied attention and fatigue in the workplace, and the
Physical and social influences on the working power.

Systems and Contingency Approach

Systems Approach to Operational Management
An organized enterprise is dependent on its external environment and is a part of larger systems
such as the industry to which it belongs, the economic system, and society. Thus, the enterprise
receives inputs, transforms them, and exports the outputs to the environment. A model of
operational management that indicates how the various inputs are transformed through the
managerial functions of planning, organizing, staffing, leading, and controlling.

1. Communication System: Communication is essential to all phases of the managerial

process for two reasons.
 To integrate the managerial functions. For example, the objectives set in planning
are communicated so that the appropriate organizational structure can be devised.
  To link the enterprise with its external environment. For example, through
communication, the needs of customers are identified.
2. External Variables: Effective managers will regularly scan the external environment.
While it is true that managers may have little or no power to change the external
environment, they have no alternative but to respond to it.
3. Outputs: It is the task of managers to secure and utilize inputs to the enterprise, to
transform them through the managerial functions with due consideration for external
variables into outputs.
4. Reenergizing the System: Finally, it is important to notice that in the systems model of
operational management, some of the outputs become inputs again. Thus, the satisfaction
and new knowledge or skills of employees become important human inputs. Similarly,
profits, the surplus of income over costs, are reinvested in cash and capital goods, such as
machinery, equipment, buildings, and inventory.

Sociological Approach to Management

Before, during, and after the development of scientific management by Taylor and
administrative management by Foyal, a considerable amount of thinking and research was
devoted to observing people as products of group behavior. This is called the sociological
approach to management. The outstanding scholars of the social systems approach to
management were – Max Weber, Emile Durkheim, Vilfredo Pareto, and Chester Barnard.
Max Weber: A German intellectual Max Weber, whose empirical analyses of church,
government, the military, and business led him to the belief that hierarchy, authority, and
bureaucracy (including clear rules, definition of tasks, and discipline) lay the foundation of
all social organizations. He propounded the theory of bureaucracy.
Emile Durkheim: A French scholar Emile Durkheim, emphasized the idea that groups, by
establishing their values and norms, control human conduct in any social organization.
Vilfredo Pareto: A French-Italian, Vilfredo Pareto earned the right to be called “the father of
the social systems approach”. Pareto viewed society as an intricate cluster of interdependent
units, or elements- that is, as a social system with many sub-systems. Among his many ideas
was the tendency of social systems to seek equilibrium upon being disturbed by outside or
inside influence. Social attitudes or sentiments function to cause the system to seek
equilibrium when disturbed by these forces. He saw also that it was the task of the elite in
any society to provide the leadership to maintain the social system.
Chester Barnard: The ‘Functions of the Executive’ written by Chester Barnard is one of the
most influential books published in the entire field of management. His analysis of the
manager is truly a social systems approach, since in order to comprehend and analyze the
functions of executives; Barnard looked for their major tasks in the system where they
operate. In determining that the tasks of executives (by which he meant all kinds of
managers) are to maintain a system of cooperative effort in a formal organization, Barnard
addressed himself first to the reasons for and the nature of cooperative systems. The book is a
social systems approach, concentrating on major elements of the managerial job, containing
extraordinary insights on decision-making and leadership and bearing the authority of an
intellectual with exceptional executive experience.