Unit 2

Introduction to Management and

Management Process
 Unit 2
Introduction to Management and Management Process

Management : Introduction

Management is an important element in every organization. It is the

element that coordinates currents organizational activities and plans
for the future.

The management adapts the organization to its environment and shapes

the organization to make it more suitable to the organization.
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Introduction to Management and Management Process

Management : Definition

Management is an art of getting things done through and

with the people in formally organized groups.
- Harold Koontz

Management is an art of knowing what to do, when to

do and see that it is done in the best and cheapest way.
- F.W. Taylor
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Introduction to Management and Management Process

Management : Definition

Management is to manage is to forecast and to plan, to organise, to

command, to co-ordinate and to control. - Henri Fayol

Management is a multipurpose organ that manages

a business and manages Managers and manages
Workers and work.
—Peter Drucker
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Introduction to Management and Management Process

Management : Definition

Management as a process “consisting of planning, organizing, actuating

and controlling, performed to determine and accomplish the objective
by the use of people and resources.”
- George R. Terry
In this definition,
 Planning means Plan in advance.
 Organizing means coordination between human resources and
material resources.
 Actuating means motivation and giving direction to subordinate.
 Controlling means to ensure about implementation of plan without
deviation.

Thus this definition tells that management is act of achieving the

organization objectives.
 Unit 2
Introduction to Management and Management Process

Let’s Play a Game

Are you Ready?
 Unit 2
Introduction to Management and Management Process

Match the Pairs

C
A B

1. Henri Fayol
2. Peter Drucker
3. Harold Koontz
4. F.W. Taylor
5. George R. Terry
D E
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Introduction to Management and Management Process

Name the Management guru

A B C

A- 2 1. Henri Fayol
B- 3 2. Peter Drucker
C-1 3. Harold Koontz
4. F.W. Taylor
D- 5
5. George R. Terry
E- 4
D E
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving Group Goals

2. Optimum Utilization of Resources
3. Reduces Costs
4. Establishes Sound Organization
5. Establishes Equilibrium
6. Essentials for Prosperity of Society
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  It arranges the factors of production,

Group Goals assembles and organizes the resources,
integrates the resources in effective
manner to achieve goals.
2. Optimum Utilization of
 It directs group efforts towards
Resources
achievement of pre-determined goals.
 By defining objective of organization
3. Reduces Costs
clearly there would be no wastage of
time, money and effort.
4. Establishes Sound  Management converts disorganized
Organization resources of men, machines, money etc.
into useful enterprise.
5. Establishes Equilibrium  These resources are coordinated,
directed and controlled in such a manner
6. Essentials for Prosperity of that enterprise work towards attainment
Society of goals.
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  Management utilizes all the physical &

Group Goals human resources productively. This
leads to efficacy in management.
2. Optimum Utilization of  Management provides maximum
utilization of scarce resources by
Resources
selecting its best possible alternate use in
industry from out of various uses.
3. Reduces Costs  It makes use of experts, professional
and these services leads to use of their
4. Establishes Sound skills, knowledge, and proper utilization
Organization and avoids wastage.
 If employees and machines are
5. Establishes Equilibrium producing its maximum there is no
under employment of any resources.
6. Essentials for Prosperity of
Society
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  It gets maximum results through

Group Goals minimum input by proper planning and
by using minimum input & getting
maximum output.
2. Optimum Utilization of
Resources
 Management uses physical, human and
financial resources in such a manner
3. Reduces Costs
which results in best combination.

4. Establishes Sound
 This helps in cost reduction..
Organization

5. Establishes Equilibrium

6. Essentials for Prosperity of

Society
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  No overlapping of efforts (smooth and

Group Goals coordinated functions).

2. Optimum Utilization of  It establishes effective authority &

Resources responsibility relationship i.e. who is
accountable to whom, who can give
instructions to whom, who are superiors
3. Reduces Costs
& who are subordinates.

4. Establishes Sound
 Management fills up various positions
Organization
with right persons, having right skills,
training and qualification. All jobs are
5. Establishes Equilibrium cleared to everyone.

6. Essentials for Prosperity of

Society
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  It enables the organization to survive in

Group Goals changing environment.

2. Optimum Utilization of  It keeps in touch with the changing

Resources environment. With the change is
external environment, the initial co-
ordination of organization must be
3. Reduces Costs
changed.

4. Establishes Sound
 So it adapts organization to changing
Organization
demand of market / changing needs of
societies. It is responsible for growth and
5. Establishes Equilibrium survival of organization.

6. Essentials for Prosperity of

Society
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Introduction to Management and Management Process

Management : Importance

1. It helps in Achieving  Efficient management leads to better

Group Goals economical production which helps in
turn to increase the welfare of people.
2. Optimum Utilization of  Good management makes a difficult
Resources task easier by avoiding wastage of scarce
resource.
3. Reduces Costs
 It improves standard of living.
4. Establishes Sound  It increases the profit which is beneficial
Organization to business and society will get
maximum output at minimum cost by
5. Establishes Equilibrium creating employment opportunities
which generate income in hands.
6. Essentials for Prosperity
 Organization comes with new products
of Society
and researches beneficial for society
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Introduction to Management and Management Process

Evolution of Management Thought

The origin of management in the organized way can be traced as back as

the origin of human beings.
The origin of management can be traced back to the days when man
started living in groups. They earned their livelihood by hunting that
was carried out in groups.
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Introduction to Management and Management Process

Evolution of Management Thought

History reveals that strong men organized

the masses into groups according to their
intelligence, physical and mental capabilities.

Later, possession of land became important hence there arose conflict

between the groups.
Local conflicts were resolved by power using primitive weapon system.
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Introduction to Management and Management Process

Evolution of Management Thought

In India management practices were in existence in Ramayana and

Mahabharata periods.
People were administered by the state and their needs fulfilled.
The king was considered to be the master. Proper executive, judicial, and
state affairs were managed in a very disciplined way. Every
individual was morally responsible to the master (king/ruler) for the
task assigned to him.
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Introduction to Management and Management Process

Evolution of Management Thought

 Around 4000 BC, the Egyptians used planning, organizing, leading,

and controlling to build their great pyramids; one pyramid took over
100,000 laborers 20 years to complete.
 As early as 1100 BC, the Chinese applied the managerial concepts of
delegation, cooperation, efficiency, organization, and control.
 In 500 BC, Sun Tzu discussed the importance of planning and leading
in his book The Art of War.
 Around 400–350 BC, the Greeks recognized management as a separate
art and advocated a scientific approach to work.
 Around AD 1436, the Venetians standardized production through the
use of an assembly line
 In 1776 Adam Smith discussed control and the principle of
specialization with regard to manufacturing workers.
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Introduction to Management and Management Process

Evolution of Management Thought

Management practices were undertaken in a scientific way early 18th

century when industrial revolution took place.
World War I (1914-1918) saw a marked development in evolution of
management concepts.
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Introduction to Management and Management Process

Evolution of Management Thought

Management practices were undertaken in a scientific way early 18th

century when industrial revolution took place.

The structure of industry became extremely complex. At this stage, the

development of a formal theory of management became absolutely
necessary.

Industrial revolution brought about a complete change in the methods of

production, tools and equipment, organization of labour and methods
of raising capital.
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Introduction to Management and Management Process

Evolution of Management Thought

Employees went to their work instead of receiving it, and so, the
factory system, as it is known today, become a dominant feature of
the economy.

Under this system, land and buildings, hired labour, and capital are
made available to the entrepreneur, who strives to combine these
factors in the efficient achievement of a particular goal.

All these changes, in turn, brought about changes in the field of

management.

Traditional, conventional or customary ideas of management were

slowly given up and management came to be based on scientific
principles.
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Introduction to Management and Management Process

Evolution of Management Thought

1. Classical 3. Quantitative 5. Contingency

School School School

2. Behavioural 4. System
School School

1. Scientific 1. Human 1. Mgmt.

Mgmt. Relation Science
2. Bureaucratic 2. Production
Mgmt. 2. Behavioural and
3. Administrative Science. Operations
Mgmt. Mgmt.
3. MIS
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Evolution of Management Thought
1. Classical School  In the late 19th century, management
decisions were often arbitrary and
workers often worked at an
1. Scientific Mgmt 1880s intentionally slow pace.
 Lack of systematic management and
workers and management were often
2. Bureaucratic Mgmt. in conflict.
1920s  Scientific management was introduced
in an attempt to create a mental
revolution in the workplace.
 It can be defined as the systematic
3. Administrative Mgmt study of work methods in order to
1940s improve efficiency.
 Frederick W. Taylor was its main
proponent.
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Introduction to Management and Management Process
Evolution of Management Thought
1. Classical School 1. Application of the scientific method
to work in order to determine the best
method for accomplishing each task.
1. Scientific Mgmt. 2. Scientific selection of Workers based
1880s Principles on their qualifications and trained to
perform their jobs in the optimal
manner.
2. Bureaucratic Mgmt. 3. Genuine cooperation between
1920s workers and management based on
mutual self-interest.
4. Management should take complete
3. Administrative responsibility for planning the work
Mgmt. 1940s and that workers' primary
responsibility should be
implementing management's plans.
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Introduction to Management and Management Process
Evolution of Management Thought
1. Classical School  Henry L. Gantt worked with and
became a disciple of Frederick Taylor’s

1. Scientific Mgmt.  He expanded on the piece rate system

1880s by suggesting that frontline
supervisors should receive a bonus for
each of their workers who completed
2. Bureaucratic Mgmt. their assigned daily tasks
1920s
 Gantt is also known for creating the
3. Administrative Gantt chart, which helps employees
and managers plan projects by task
Mgmt. 1940s
and time to complete those tasks.
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Introduction to Management and Management Process

Scientific Management by F W Taylor

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Introduction to Management and Management Process
Evolution of Management Thought
1. Classical School  Max Weber Proposed the idea of
bureaucratic organizations to overcome
the problems associated with
1. Scientific Mgmt 1880s monarchies and patriarchies. (rulers)
 Bureaucracy - The exercise of control
on the basis of knowledge, expertise, or
2. Bureaucratic Mgmt. experience.
1920s  The principles of bureaucracy-a
formal system of organization and
administration designed to ensure
3. Administrative Mgmt efficiency and effectiveness.
1940s
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Introduction to Management and Management Process

Characteristics of Bureaucratic Mgmt. 1920s

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Introduction to Management and Management Process
Evolution of Management Thought
1. Classical School  Henri Fayol, a French mining engineer
and executive, published a book
summarizing his management
1. Scientific Mgmt 1880s experiences.
 Clear division of work and devolving
enough authority to administrators so
2. Bureaucratic Mgmt. that Supervisors can execute the tasks
1920s allotted to them perfectly.
 Fayol identified five functions and 14
principles of management. The five
3. Administrative Mgmt functions are Planning, Organizing,
1940s Commanding, Coordinating, and
Controlling
 14 Principles will be discussed later
 Unit 2
Introduction to Management and Management Process

Let’s Play a Game

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Introduction to Management and Management Process

Match the Pair

1. F.W Taylor A) Administrative Mgmt.
2. Max Weber B) Scientific Mgmt.
3. Henri Fayol C) Bureaucratic Mgmt.

Answer is
1 B
2 C
3 A
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Introduction to Management and Management Process
Evolution of Management Thought
2. Behavioural School  A classical management approach that
attempted to understand and explain
how human psychological and social
1. Human Relations processes interact with the formal
aspects of the work situation to
influence performance

2. Behavioural Science  Human relations proponents argued

that managers should stress primarily
employee welfare, motivation, and
communication.

 Believed that social needs had

precedence over economic needs.
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Introduction to Management and Management Process
Evolution of Management Thought
2. Behavioural School  Two Theories were evolved.

1. Hawthorne Effect by Elton Mayo

1. Human Relations
2. Hierarchy of Need by Abraham
Maslow

2. Behavioural Science
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Introduction to Management and Management Process
1. Hawthorne Studies by Elton Mayo
The Hawthorne Effect is when subjects (Employee/Labour) of an
experimental study attempt to change or improve their behaviour
simply because it is being evaluated or studied or Observed.

The term was coined during experiments that took place at Western
Electric's factory in the Hawthorne suburb of Chicago in the late 1920s
and early 1930s that tested the impact of working-condition variables on
employee productivity.
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Introduction to Management and Management Process
2. Maslow’s Hierarchy of Needs
Abraham Maslow suggested that humans have five levels of needs.
 Unit 2
Introduction to Management and Management Process
Evolution of Management Thought
2. Behavioural School  Behavioural science and the study of
organizational behaviour emerged in
the 1950s and 1960s
1. Human Relations  It focused on applying conceptual and
analytical tools to the problem of
understanding and predicting
behaviour in the workplace.
2. Behavioural Science  The behavioural science school has
contributed to the study of
management through its focus on
personality, attitudes, values,
motivation, group behaviour, leadership,
communication, and conflict, among
other issues.
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Introduction to Management and Management Process
Evolution of Management Thought
2. Behavioural School  Douglas McGregor influenced the
field of management in the 1960’s with
his Theory X and Theory Y perspective.
1. Human Relations
 Theory X managers assume workers
are lazy and irresponsible and require
constant supervision and external
2. Behavioural Science motivation to achieve organizational
goals.

 Theory Y managers assume employees

want to work and can direct and
control them- selves.
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Introduction to Management and Management Process
Evolution of Management Thought
3. The Quantitative School  Management science uses
mathematical and statistical
approaches to solve management
1. Management Science problems.

2. Production and  It developed during World War II as

strategists tried to apply scientific
Operations knowledge and methods to the
Management complex problems of war.

3. Management  Industry began to apply management

Information System science after the war.
(MIS)
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Introduction to Management and Management Process
Evolution of Management Thought
3. The Quantitative School  George Dantzig developed linear
programming, an algebraic method to
determine the optimal allocation of
1. Management Science scarce resources.

2. Production and  Other tools used in industry include

inventory control theory, goal
Operations programming, queuing models, and
Management simulation.

3. Management
Information System
(MIS)
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Introduction to Management and Management Process
Evolution of Management Thought
3. The Quantitative School  This school focuses on the operation
and control of the production process
that transforms resources into finished
1. Management Science goods and services.

2. Production and  It has its roots in scientific

management but became an
Operations identifiable area of management study
Management after World War II.

3. Management  Operations management emphasizes

Information System productivity and quality of both
manufacturing and service
(MIS) organizations.
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Introduction to Management and Management Process
Evolution of Management Thought
3. The Quantitative School  W. Edwards Deming exerted a
tremendous influence in shaping
modern ideas about improving
1. Management Science productivity and quality.

2. Production and  Major areas of study within operations

management include capacity
Operations planning, facilities location, facilities
Management layout, materials requirement
planning, scheduling, purchasing and
inventory control, quality control,
3. Management computer integrated manufacturing,
Information System just-in-time inventory systems, and
(MIS) flexible manufacturing systems.
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Introduction to Management and Management Process
Evolution of Management Thought
3. The Quantitative School  The advent of the computer made
many management science tools and
concepts more practical for industry.
1. Management Science
 Increasingly, management science and
Management Information Systems
2. Production and (MIS) are intertwined.
Operations
 MIS focuses on providing needed
Management information to managers in a useful
format and at the proper time.
3. Management  Decision support systems (DSS)
Information System attempt to integrate decision models,
(MIS) data, and the decision maker into a
system that supports better
management decisions.
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Introduction to Management and Management Process
Evolution of Management Thought
4. System School / Modern Theory

The systems approach to management indicates the fourth major theory

of management thought called modern theory.
Modern theory considers an organization as an adaptive system which
has to adjust to changes in its environment.
An organization is now defined as a structured process in which
individuals interact for attaining objectives.

Meaning of "System": The word system is derived from the Greek word
meaning to bring together or to combine.

A system is a set of interconnected and inter-related elements or

component parts to achieve certain goals.
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Introduction to Management and Management Process
Evolution of Management Thought
4. System School / Modern Theory

A system has three significant parts:

1.Every system is goal-oriented and it must have a purpose or objective

to be attained.
2.In designing the system we must establish the necessary arrangement
of components.
3.Inputs of information, material and energy are allocated for processing
as per plan so that the outputs can achieve the objective of the system.
 Unit 2
Introduction to Management and Management Process
Evolution of Management Thought
4. System School / Modern Theory
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Introduction to Management and Management Process
Evolution of Management Thought
5. Contingency Theory
•The contingency approach enables us to evolve practical answers to
problems demanding solutions.
•Organization design and managerial actions most appropriate to
specific situations will have to be adopted to achieve the best possible
result under the given situation.
•There is no one best way (as advocated by Taylor) to organize and
manage.
•Thus, Contingency Approach to management emphasizes the fact that
management is a highly practice-oriented discipline.
•It is the basic function of managers to analyse and understand the
environments in which they function before adopting their techniques,
processes and practices.
•The application of management principles and practices should
therefore be continent upon the existing circumstances.
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Introduction to Management and Management Process
Evolution of Management Thought
5. Contingency Theory : Applications
•Contingency approach guides the manager to be adaptive to
environment.

•It tells the manager to be pragmatic and open minded.

•The contingency approach is an improvement over the systems

approach.

• It not only examines the relationships between sub-systems of the

organization, but also the relationship between the organization and its
environment.
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Introduction to Management and Management Process

Evolution of Management Thought : Snap shot

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Introduction to Management and Management Process

Evolution of Management Thought : Snap shot

 Unit 2
Introduction to Management and Management Process

Evolution of Management Thought : Snap shot

 Unit 2
Introduction to Management and Management Process

Let’s Play a Game

 Unit 2
Introduction to Management and Management Process

Match the Pair

1. Elton Mayo A) Theory X and Theory Y

2. Abraham Maslow B) Linear programming,
and Algebraic method
3. Douglas McGregor C) Hawthorne Effect
4. George Dantzig D) Hierarchy of Need

Answer is

1 C
2 D
3 A
4 B
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Introduction to Management and Management Process

Functions of Management
by Henri Fayol
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Introduction to Management and Management Process

Look at five people working in TATA Inc. as described below.

Gavin Smith Rachel Blake Leo Cooper Gloria Logan Kyle Watson
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Introduction to Management and Management Process

Hi, I am Gavin Smith. I am a

member of the Board of Directors at
TATA. I am one of the people in the
organization who are responsible for
laying down the objectives and
broad policies of the organization. I
also play a part in preparing the
strategic plans and the preparation
of department budgets, procedures,
schedules etc. I am responsible for
taking into consideration available
and prospective human and physical
resources of the organization so as to
get effective co-ordination,
contribution and perfect adjustment.
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Introduction to Management and Management Process

Hi, I am Rachel Blake. I work as a

Human Resources (HR) Manager at
TATA Inc. I am responsible for the
managerial function of staffing
which involves manning the
organization structure through
proper and effective selection,
appraisal and development of the
personnel to fill the roles assigned to
the employers/workforce. I am
responsible for motivating and
identifying the training and
development needs of the
employees.
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Introduction to Management and Management Process

Hello, I am Leo Cooper. I work as a

Project Head in the Operations
department at TATA Inc. I am
responsible for the execution of the
plans of the organization in
accordance with the policies and
directives of the organization. I also
take care of the coordination of the
activities within my department. I
am responsible for classifying the
authority as well as for the co-
ordination between authority and
responsibility.
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Introduction to Management and Management Process

Hello, I am Gloria Logan. I work as a

Manager in the Operations
department at TATA Inc. I am
responsible for the controlling function
which includes verifying whether
everything occurs in conformities with
the plans adopted, instructions issued
and principles established. I ensure
that there is effective and efficient
utilization of organizational resources
so as to achieve the planned goals. I
am responsible for measuring the
deviation of actual performance from
the standard performance, discovering
the causes of such deviations and help
in taking corrective actions.
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Introduction to Management and Management Process

Hi, my name is Kyle Watson. I am a

supervisor at one of TATA’s steel
manufacturing plants. I am
responsible for assigning of jobs and
tasks to various workers at the plant.
I guide and instruct the workers for
day to day activities and am
responsible for the quality as well as
quantity of production. I ensure that
discipline is maintained among the
workers at the plant and
communicate workers’ problems,
suggestions and recommendatory
actions to my managers.
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Introduction to Management and Management Process
So, you can see that all the five people, Gavin, Rachel, Leo, Howard
and Kyle help manage the functioning of TATA’s business?

All the five of them perform managerial activities and functions to help
in the smooth running of TATA’s day-to-day business activities.

Gavin Smith Rachel Blake Leo Cooper Gloria Logan Kyle Watson

However, they are different from each other. How do you think their
responsibilities differ from each other?
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Introduction to Management and Management Process

Yes, each one has a different function to

perform and a different chain of
command that he controls; each one holds
a different amount of authority and enjoys
a different status in his managerial
position at TATA.

This difference between the three

managerial positions and its functions at
TATA is due to the various ‘Functions of
Management’.
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Introduction to Management and Management Process

The term ‘Functions of Management’

refers to a strict separation of the
functions and the kinds of work
performed by various positions in an
organization.

The five key functions of management

are: Planning, Staffing, Organizing,
Controlling and Directing.
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Introduction to Management and Management Process

Hence, to understand the management of

any organization, it is very important to
understand the different functions that
are performed by management and how
they contribute to the overall working of
the organization.

Let us learn about ‘Functions of

Management’ in detail.
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Introduction to Management and Management Process
The following are the key Functions of Management:
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Introduction to Management and Management Process

Planning as a Function of Management

Vision
Clarifies long term direction of a
company [where the company is
going] & reflects management’s
aspirations for the company.
Objectives Mission
Statement of the basic purpose
Goals for a company's existence & its
values [role towards customers,
employees, society, etc.].

Strategy Strategy
Course of action created to
achieve a long term goal.
Goals
Mission Long term aims that a company /
individual wants to achieve.
Objectives
Concrete attainments that can be
Vision achieved by following a certain
number of steps.
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Introduction to Management and Management Process

Organizing
Organizing is the process of bringing together physical, financial and
human resources and developing productive relationship amongst them
for achievement of organizational goals.

According to Henry Fayol, “To organize a business is to provide it with

everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.

To organize a business involves determining & providing human and

non-human resources to the organizational structure.
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Introduction to Management and Management Process

Organizing
Organizing as a process involves:

1.Identification of activities.
2.Classification of grouping of activities.
3.Assignment of duties.
4.Delegation of authority and creation of responsibility.
5.Coordinating authority and responsibility relationships.
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Introduction to Management and Management Process

Staffing Function of Management

The managerial function of
staffing involves manning the
organization structure through
proper and effective selection,
appraisal and development of
the personnel to fill the roles
assigned to the
employers/workforce.

According to Theo Haimann,

“Staffing pertains to
recruitment, selection,
development and
compensation of
subordinates.”
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Nature of Staffing Function

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Introduction to Management and Management Process

Steps involved in Staffing Process

1 Manpower Requirements

2 Recruitment

3 Selection

4 Orientation and Placement

5 Training and Development

6 Remuneration

7 Performance Evaluation

8 Promotion and Transfer

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Introduction to Management and Management Process

Directing as a Function of Management

Supervision
Supervision is directing efforts of
Supervision employees and other resources to
accomplish stated work outputs.
Motivation
Motivation is something that moves the
person to action, and continues him in the
course of action already initiated / about
to be initiated.
Leadership
Components of Motivation Leadership is essentially a continuous
Communication
Directing process of influencing behaviour. A leader
breathes life into the group and motivates
it towards goals. The lukewarm desires for
achievement are transformed into burning
passion for accomplishment

Communication
Leadership Communication is the transfer of information
from one person to another by transmitting
ideas, facts, thoughts, feelings & values. In its
absence, organisation would cease to exist.
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Introduction to Management and Management Process

What is Controlling?
According to Brech,
“Controlling is a
systematic exercise which
is called as a process of
checking actual
performance against the
standards or plans with a
view to ensure adequate
progress and also
recording such
experience as is gained as
a contribution to possible
future needs.”
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Features of Controlling Function

Controlling is an end
function:
A function which
comes once the
performances are
made in conformities
with plans.

Controlling is related with planning: Planning and

Controlling are two inseparable functions of management.
Without planning, controlling is a meaningless exercise
and without controlling, planning is useless. Planning
presupposes controlling and controlling succeeds
planning.
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Introduction to Management and Management Process

Steps of the Controlling Process

Establishment of
Standards

Measurement of
Performance

Comparison of Actual and

Standard Performance

Taking Remedial
Actions
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 Unit 2
Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol : Introduction

What is Principles of Management?
Management principles are statements of fundamental truth. These
principles serve as guidelines for decisions and actions of managers.
They are derived through observation and analysis of events which
managers have to face in practice

According to Fayol – (A French Mining Engineer) the activities of an

industrial organization could be divided into six categories

 TECHNICAL - (Production & Manufacturing)

 COMMERCIAL - (Buying, Selling & Exchange)
 FINANCIAL - (Acquiring & using capital)
 SECURITY - (Protection of Property & Person)
 ACCOUNTING - (Stock taking, Balance sheet, cost & statistics)
 MANAGERIAL -(Planning, Organizing, Command, Control and Direction)
 Unit 2
Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol

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 Unit 2
Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol

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Introduction to Management and Management Process

14 Principles of Henri Fayol

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 Unit 2
Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

1. Division of Work –
In practice, employees are specialized in different areas and they have
different skills. Different levels of expertise can be distinguished
within the knowledge areas (from generalist to specialist).
Personal and professional developments support this. According to
Henri Fayol specialization promotes efficiency of the workforce and
increases productivity. In addition, the specialization of the
workforce increases their accuracy and speed.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

2. Authority and Responsibility - In order to get things done in an
organization, management has the authority to give orders to the
employees. Of course with this authority comes responsibility.
According to Henri Fayol, the accompanying power or authority gives
the management the right to give orders to the subordinates. The
responsibility can be traced back from performance and it is
therefore necessary to make agreements about this. In other words,
authority and responsibility go together and they are two sides of the
same coin.

Authority Responsibility
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

3. Discipline
This third principle is about obedience, proper conduct in relation to others,
respect of authority, etc. It is often a part of the core values of a
mission and vision in the form of good conduct and respectful
interactions. This management principle is essential and is seen as the
oil to make the engine of an organization run smoothly.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

4. Unity of Command
The management principle ‘Unity of command’ means that an individual
employee should receive orders from one manager and that the
employee is answerable to that manager.
If tasks and related responsibilities are given to the employee by more
than one manager, this may lead to confusion which may lead to
possible conflicts for employees. By using this principle, the
responsibility for mistakes can be established more easily.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

5. Unity of Direction
This management principle is all about focus and unity. All employees
deliver the same activities that can be linked to the same objectives.
All activities must be carried out by one group that forms a team.
These activities must be described in a plan of action. The manager is
ultimately responsible for this plan and he monitors the progress of
the defined and planned activities. Focus areas are the efforts made by
the employees and coordination.
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Introduction to Management and Management Process

Unity of Command Vs. Unity of Direction

Points Unity of Command Unity of Direction
Unity of command refers to a Unity of direction is a
principle of management which management principle which
Meaning states that one incumbent implies that all the activities
should get orders from and with same objective must have
report to one boss. one head and one plan.
Purpose To prevent dual subordination. To prevent activities overlap.
Focuses on Single employee Entire organization
The principle leads to effective The principle results in
Outcome functioning of the coordination of work of various
subordinates. employees.
Represents relationship Represents relationship of
Relationship between superior and activities, as per organizational
subordinate. plans and goals.
It is needed to fix the
It is needed for sound
Need responsibility of each person in
organization of activities.
the organization.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

6. Subordination of Individual Interest
There are always all kinds of interests in an organization. In order to
have an organization function well, Henri Fayol indicated that
personal interests are subordinate to the interests of the
organization (ethics). The primary focus is on the organizational
objectives and not on those of the individual. This applies to all
levels of the entire organization, including the managers.
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14 Principles of Management by Henri Fayol

7. Remuneration
Motivation and productivity are close to one another as far as the
smooth running of an organization is concerned. This management
principle argues that the remuneration should be sufficient to keep
employees motivated and productive. There are two types of
remuneration namely non-monetary (a compliment, more
responsibilities, credits) and monetary (compensation, bonus or other
financial compensation). Ultimately, it is about rewarding the efforts
that have been made.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

8. Centralization and Decentralisation
Management and authority for decision-making process must be
properly balanced in an organization. This depends on the volume
and size of an organization including its hierarchy.
Centralization implies the concentration of decision making authority
at the top management (executive board). Sharing of authorities for
the decision-making process with lower levels (middle and lower
management), is referred to as decentralization by Henri Fayol. Henri
Fayol indicated that an organization should strive for a good balance
in this.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

9. Scalar Chain
Scalar Chain refers to the chain of superiors ranging
from top management to the lowest rank.
The principle suggests that there should be a clear line
of authority from top to bottom linking all managers
at all levels. It is considered a chain of command.
It involves a concept called a "gang plank" using which
a subordinate may contact a superior or his superior
in case of an emergency.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

10. Order
According to this principle, employees in an organization must have the
right resources at their disposal so that they can function properly in
an organization.
There should be place for everything and everything should be in
place. Right man at right place.
In addition to social order (responsibility of the managers) the work
environment must be safe, clean and tidy.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

11. Equity
It is a combination of justice and kindness. Equity in treatment and
behaviour is liked by everyone and it brings loyalty to the
organisation.
Its application requires good sense, experience and good nature.
Employees must be treated kindly, and justice must be enacted to ensure
a just workplace. Managers should be fair and impartial when dealing
with employees.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

12. Stability of Tenure of Personnel
This management principle represents deployment and managing of
personnel and this should be in balance with the service that is
provided from the organization. Management strives to minimize
employee turnover and to have the right staff in the right place.
Focus areas such as frequent change of position and sufficient
development must be managed well.
The period of service should not be too short and employees should not
be moved from positions frequently. An employee cannot render
useful service if he is removed before he becomes accustomed to the
work assigned to him.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

13. Initiative
Henri Fayol argued that with this management principle employees
should be allowed to express new ideas. This encourages interest
and involvement and creates added value for the company.
Employee initiatives are a source of strength for the organization
according to Henri Fayol. This encourages the employees to be
involved and interested.
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Introduction to Management and Management Process

14 Principles of Management by Henri Fayol

14. Esprit de Corps
The management principle ‘esprit de corps’ of management stands for
striving for the involvement and unity of the employees. Managers
are responsible for the development of morale in the workplace;
individually and in the area of communication. Team spirit helps
develop an atmosphere of mutual trust and understanding.
Esprit de corps contributes to the development of the culture and
creates an atmosphere of mutual trust and understanding.
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Introduction to Management and Management Process

Common criticisms
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Introduction to Management and Management Process

Common criticisms
1. Management is not always universal:
Fayol was criticized because he only had experience in a coal mine. Many
have said just because you can manage a coal mine does not
necessarily mean you can manage a hospital.

2. His writing is lessons learned in his career:

Everything that Fayol wrote about was something from his career as the
managing director of a mining company. The criticism is that his
background was not all that diverse.
 Unit 2
Introduction to Management and Management Process

Common criticisms
3. Taylor’s argument:
Taylor thought that specialization was the best form of management.
He thought that each worker did eight different things and that for
each thing there should be a supervisor. Fayol thought that each
person should only have one supervisor. Further, Fayol liked having
teams do work together and making their own decisions rather than
having a specialist do every little thing.

4. Modern Criticism:
Fayol refused to purchase stocks in his own company because he felt it
compromised his position as the firm’s managing director. Today,
managers are expected to have their pay tied to stock because it is
seen as their job to increase shareholder wealth. Fayol, also, wanted to
board of director’s and share holders to have limited power because
he felt they were incompetent. This is criticized by those today who
demand shareholder rights be increased. .
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Introduction to Management and Management Process

Common criticisms
5. Too formal:
Fayol's theory is said to be very formal.

6. Pro-management Bias:
Administrative theory does not pay adequate attention to workers.
Workers are treated as biological machines or inert instruments in the
work process.
 Unit 2
Introduction to Management and Management Process

Contribution of F. W. Taylor
Scientific Management
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Introduction to Management and Management Process

F. W. Taylor : Biography
 Born on March 20, 1856 on Germantown, Philadelphia, Pennsylvania

 Taylor studied for two years in France and Germany and travelled
Europe for 18 months

 In 1872, he entered Phillips Exeter Academy in Exeter, New

Hampshire, with the plan of eventually going to Harvard and
becoming a lawyer like his father

 In 1874, Taylor passed the Harvard entrance examinations with

honors.

 However, due allegedly to rapidly deteriorating eyesight, Taylor

chose quite.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Biography
 Instead of attending Harvard University, Taylor became an
apprentice patternmaker and machinist, gaining shop-floor
experience at Enterprise Hydraulic Works in Philadelphia

 He left his apprenticeship for six months and represented a group of

New England machine-tool manufacturers at Philadelphia's
centennial exposition.

 Taylor finished his four-year apprenticeship and in 1878 became a

machine-shop labourer at Midvale Steel Works.

 At Midvale, he was quickly promoted to time clerk, journeyman

machinist, gang boss over the lathe hands, machine shop foreman,
research director, and finally chief engineer of the works
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 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Observation at Midvale Steel Works

 Early on at Midvale, working as a labourer and machinist, Taylor
recognized that workmen were not working their machines, or
themselves, nearly as hard as they could.
 They were bringing there own tools, planning themselves and
working according to their plan and taking rest whenever needed.
 Employees were paid equal irrespective of amount of work done
 Taylor observed the phenomenon of workers’ purposely operating
well below their capacity. This is Soldiering
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Introduction to Management and Management Process

F. W. Taylor : Observation at Midvale Steel Works

He stated causes of soldiering:
1. Universal belief among workers that if they became more productive,
only few of them would be needed : jobs will be eliminated.
2. Non-incentive wage systems encourage low productivity.
3. Workers waste much of their efforts by relying on rule-of-thumb
methods rather than an optimal work method.
– Rule-of-thumb: It is a guideline that provides simplified advice regarding
a particular subject. It is a general principle that gives practical
instructions for accomplishing or approaching a certain task. Typically,
rules of thumb develop as a result of practice and experience rather than
from scientific research or theory
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Observation at Midvale Steel Works

 When he became a foreman he expected more output from the
workmen.
 In order to determine how much work should properly be expected,
he began to study and analyze the productivity of both the men and
the machines.
 His focus on the human component of production Taylor labelled
Scientific Management
 Taylor became a student of Stevens Institute of Technology, studying
via correspondence and obtaining a degree in mechanical engineering
in 1883.
 Unit 2
Introduction to Management and Management Process
F. W. Taylor : Further Journey
 From 1890 until 1893 Taylor worked as a general manager and a
consulting engineer to management for the Manufacturing Investment
Company of Philadelphia.
 In 1893, Taylor opened an independent consulting practice in
Philadelphia.
 His first paper, A Piece Rate System, was presented to the American
Society of Mechanical Engineers (ASME) in June 1895.
 In 1898 he joined Bethlehem Steel to solve an expensive machine-shop
capacity problem.
 Taylor was forced to leave Bethlehem Steel in 1901 after discord with
other managers.
 In 1911, Taylor introduced his The Principles of Scientific Management
paper to the ASME and summed up his efficiency techniques in his book
The Principles of Scientific Management which, in 2001, Fellows of the
Academy of Management voted the most influential management book
of the twentieth century
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Introduction to Management and Management Process

F. W. Taylor : Further Journey

 On October 19, 1906, Taylor was awarded an honorary degree of
Doctor of Science by the University of Pennsylvania.

 Taylor eventually became a professor at the Tuck School of Business

at Dartmouth College.

 In early spring of 1915 Taylor caught pneumonia and died, one day
after his fifty-ninth birthday, on March 21, 1915.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Contribution : Scientific Management

The term scientific management is a combination of Two words
Scientific and Management.

The term ‘Scientific’ means Systematic, Analytical and objective

approach whereas ‘Management’ is the art of getting the work done
through others.

Definition
Scientific Management is an art of knowing what to do, when to do and
see that it is done in the best and cheapest way.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Contribution : Scientific Management

Taylor Observed in Bethlehem Steel company

1. Underpaid

2. Unused Potential

3. High Waste
 Unit 2
Introduction to Management and Management Process
F. W. Taylor : Experiment at Bethlehem Steel company
Moving pig iron
(crude iron that comes in pieces called "pigs" weighing about 92 pounds)

 The task to move pig iron from one place to another.

 Taylor studied the men as they did this.
 At the time, good workers were able to move about 12.5 tons per day.
 Based on some elementary bio-mechanical analysis of energy
expenditure and efficiency, Taylor calculated that a man in good
condition should be able to move 47.5 tons a day.
 observed a gang for 3-4 days
 Selected the best four.
 Finally selected Schmidt
 Unit 2
Introduction to Management and Management Process
F. W. Taylor : Experiment at Bethlehem Steel company
Moving pig iron
(crude iron that comes in pieces called "pigs" weighing about 92 pounds)

 Salary was increased from $1.15 per day to $1.85 per day.
 Schmidt had to load 47.5 tons per day and management would
provide a man to instruct him in attaining this goal.
 A man from management accompanied him. Instructed him,
cooperated him, as well as took care of Schmidt strength
 Unit 2
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F. W. Taylor : Contribution : Scientific Management

RESULT
 Schmidt loaded 47.5 tons per day.
 Increment of more than 200%.
 Schmidt got higher salary.
 Maximum benefit to both employer and employee.

PROVES
 High Profit to both employee and employer.
 Increase in standard of living for employee.
 Better working condition.
 Satisfaction to both employee and employer.
 Unit 2
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F. W. Taylor : Scientific Management : Principles

Based on this experiment Taylor gave Four Principles of

Scientific management

1. Replacing the rule of thumb by Scientific

methods.

2. Selecting, training, teaching and develop the

workman.

3. Division of work and responsibility.

4. Cooperation between Management and workers.

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Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

The principles of scientific management only bring out the basic
philosophy behind the theory.
The question which now arises is how to implement these principles
practically. Taylor has devised the following techniques for actually
implementing the principles of scientific management.

1. Functional Foremanship
2. Standardisation of Work
3. Simplification
4. Scientific Study of Work
5. Differential Wage System/Differential Piece Rate
6. Mental Revolution
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

1. Functional Foremanship
Is totally based on the principle of specialisation and makes full
utilisation of the expertise of various experts.
Taylor suggested the division of the work of factory manager into two
sub departments:

(i) Planning Department

(ii)Production Department
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

1. Functional Foremanship : Planning Department

(a) Route Clerk:
This clerk ensures the sequence of completing a particular work, meaning thereby
the stages it shall have to pass before being finalised. He also decides the job to
be done for the day and where it is to be done.
(b) Instruction Card Clerk:
This clerk prepares the instruction cards for the workers and hands them over to
the gang boss. These cards contain information about the nature of the work,
procedure of doing it, material to be used and the details about machinery.
(c) Time and Cost Clerk:
This clerk decides as to when a particular work is to be started and finished,
meaning thereby as to what time the whole work will take place. It is also
decided at the same time at what cost the product will be produced.
(d) Discipline Officer:
The discipline officer ensures that every work is being performed in a disciplined
manner.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

1. Functional Foremanship : Production Department

a) Gang Boss:
The workers are divided into various groups from the point of view of control. A group
leader is selected who is known as the gang boss. He is expected to ensure that
both the workers and the machines are fit enough for production and that the
material required for their use has been made available to them.
(b) Speed Boss:
The main function of the speed boss is to ensure that all the workers are performing
their job at the required or expected speed. If it is not so, the speed boss tries to find
out the cause of slow speed and hence a solution for it.
(c) Repair Boss:
The main function of the repair boss is to keep the machines and tools in working
condition.
(d) Inspector:
He inspects the things produced and compares their quality with the standard
prescribed for them and tries to find out the difference. In case of unfavourable
result he initiates corrective action.
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F. W. Taylor : Scientific Management : Techniques

2. Standardisation of Work
Standardisation means setting standards for different factors, after due
deliberation.
For example, the amount of work to be done by a worker in a day may
be standardised. In other words, the worker is expected to do the
standard amount of work every day.

(i) Standardised Material

(ii)Standardised Machines and Tools
(iii)Standardised Methods
(iv)Standardised Working Conditions
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F. W. Taylor : Scientific Management : Techniques

3. Simplification
Simplification means putting an end to the unnecessary types, qualities,
sizes/weights, etc.
For example, it is all right for a shoe manufacturing company to
manufacture shoes of 0, 1, 2, 3, 4, 5, sizes but if it starts manufacturing
shoes of 0, 0.5, 1, 1.25, 1.5, 1.75, 2, 2.25, 2.5, 2.75, 3, it will be simply
wrong.
There is no justification in the difference of such sizes.
1. Different types of machines
2. More stock
3. Increased labour costs
Therefore, it is advisable to manufacture shoes only of the proper sizes.
In other words, simplification of the product is the answer.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

4. Scientific Study of Work

It means to conduct the deep analysis of all the activities being
performed in the organisation with the aim of producing maximum
possible quality output at minimum costs. Taylor has conducted the
following studies:
(i) Method Study,
(ii) Motion Study,
(iii)Time Study,
(iv)Fatigue Study.

https://en.wikipedia.org/wiki/Time_and_motion_study
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

4. Scientific Study of Work

(i) Method Study:

It refers to identify the most suitable way to do a particular activity. To
conduct this study, process chart and operation research techniques
are used. The main objective of this study is to minimise the cost of
production and maximise the quality and level of consumer
satisfaction.

(ii) Motion Study:

It refers to conduct the study of motions being performed by workers
and machines while doing the job. The movie camera is used to
conduct this study. The main objective of this study is to eliminate the
unnecessary motions.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

4. Scientific Study of Work

(iii) Time Study:
It refers to determine the standard time required to complete a particular activity.
The standard time is determined on the basis of average time taken by the
several experiences of the same work.

(iv) Fatigue Study:

It refers to determine the duration and frequency of rest intervals to complete a
particular job. The rest refreshes the workers. They work again with their full
capacity.
The main objective of this study is to maintain the efficiency level of workers.
There may be so many causes of fatigue, such as long working hours, poor
working conditions, unsuitable work, unhappy relations with the boss, etc.
 Unit 2
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F. W. Taylor : Scientific Management : Techniques

5. Differential Wage System/Differential Piece Rate

According to this system, wages are paid on the basis of work done and
not on the basis of time spent in doing the work.

In this system two different wage rates are used: one is the high wage
rate and the other is the low wage rate.

Those workers who are able to produce the standard number of units
within a fixed duration are paid as per the high wage rate, and those
workers who are not able to produce the standard number of units
within the same time are paid as per the lower wage rate.
 Unit 2
Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Techniques

6. Mental Revolution
Mental revolution calls for a change in the mindset of both employers
and workers.

As per Taylor, a revolution in mindset of both the employers and the

workers is required because it will promote feeling of cooperation,
and will be beneficial to both the parties.

.
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Introduction to Management and Management Process

F. W. Taylor : Scientific Management : Critics

1. Managers frequently implemented only the increased output side of

Taylor’s plan.
– Workers did not share in the increased output.

2. Specialized jobs became very boring, dull.

– Workers ended up distrusting the Scientific Management method.

3. Workers could purposely “under-perform.”

– Management responded with increased use of machines and
conveyors belts.
 Unit 2
Introduction to Management and Management Process

George Elton Mayo : Hawthorne studies

(26 December 1880 – 7 September 1949)
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Biography
 George Elton Mayo born on 26 December 1880 in Adelaide.

 Bachelor of Arts Degree at the University of Adelaide.

 Master of Arts Degree from the University of Queensland

 As a psychologist Mayo often helped soldiers returning from World

War I recover from the stresses of war and with a Brisbane physician,
pioneered the psychoanalytic treatment of shell-shock and conducted
psycho-pathological tests

 He was a lecturer in psychology and mental philosophy at the UQ

between 1911 and 1922

 In 1926 he was appointed to the Harvard Business School (HBS) as a

professor of industrial research
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies
Fritz J. Roethlisberger, and William J. Dickson, head of the Department of
Employee Relations at Western Electric, conducted the practical
research, with Mayo at Hawthorne plant.

Mayo's team carried out a number of "experiments" to look at ways of

improving productivity.

The research involved manipulating length of rest and lunch periods and
piecework payment plans.

Mayo concluded that productivity partly depended on the informal social

patterns of interaction in the work group.
 Unit 2
Introduction to Management and Management Process

Airplane View of Hawthorne Works.

 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

1. Illumination experiments -1924-27
– Experiments to determine the effects of changes in illumination
(Light) on productivity
2. Relay assembly test room experiments -1927-28
– Experiments to determine the effects of changes in hours and other
working conditions on productivity
3. Mass interviewing programme - 1928-30
– Conducting plant-wide interviews to determine worker attitudes
and sentiments
4. Bank wiring observation room experiments - 1931-32
– Determination and analysis of social organisation at work
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies
1. Illumination Experiments

Experimental Group : on whom test is conducted

Control Group : Normal (No Test)
Experiment : Change in Intensity of light (low to High)
Experimental Group Control Group
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

1. Illumination experiments -1924-27

• Result :
– worker productivity and satisfaction was Higher at all light levels
– Worker productivity was decreased with the light levels reached moonlight
intensity.

• Conclusions:
– Light intensity has no conclusive effect on output
– Productivity has a psychological component
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28
 The next experiments beginning in 1927 focused on the relay assembly
department, where the electromagnetic switches that made telephone
connections possible were produced
 The manufacture of relays required the repetitive assembly of pins,
springs, insulators, coils, and screws.
 Western Electric produced over 7 million relays annually.
 As the speed of individual workers determined overall production
levels, the effects of factors like rest periods and work hours in this
department were of particular interest to the company.
 Relay assembly test room experiments were designed to determine the
effect of changes in various job conditions on group productivity.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28

Two Women Workers were selected

as Experimental group
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28

They were asked to choose other 5 women co-workers

 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28
1. For this purpose, the researchers set up a relay assembly test room.
2. The incentive system was changed so that each girl’s extra pay was
based on the other five rather than the output of larger group, say 100
workers or so. The productivity increased as compared to before
3. Two five- minute rests one in the morning session and other in
evening session were introduced which were increased to ten minutes.
The productivity increased.
4. The rest period was reduced to five minutes but frequency was
increased. The productivity decreased slightly and the girls
complained that frequent rest intervals affected the rhythm of the
work.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28
5. The number of rest was reduced to two of ten minutes of each, but in
the morning, coffee or soup was served along with the sandwich and
in the evening, snack was provided. The productivity increased.
6. Changes in working hours and workday were introduced, such as
cutting an hour off the end of the day and eliminating Saturday work.
The girls were allowed to leave at 4.30 p.m. instead of usual 5.00 p.m.
and later at 4.00 p.m. productivity increased.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28

• Result :
– Absenteeism decreased,
– Morale increased,
– Less supervision was required.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28
 As each change was introduced, absenteeism decreased, morale
increased, and less supervision was required.
 It was assumed that these positive factors were there because of the
various factors being adjusted and making them more positive.
 At this time, the researchers decided to revert back to original position,
that is, no rest and other benefits.
 Surprisingly, productivity increased further instead of
going down.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

2. Relay assembly test room experiments -1927-28
• Result :
– This development caused a considerable amount of redirection in thinking
and the result implied that productivity increased not because of positive
changes in physical factors but because of the change in girls’ attitudes
towards work and their work group.

– They developed a feeling of stability and a sense of belongings. Since there

was more freedom of work, they developed a sense of responsibility and
self-discipline.
– The relationship between supervisor and workers became close and
friendly.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

3. Mass Interviewing Programme - 1928 - 1930

 During the course of experiments, about 20,000 interviews were
conducted between 1928 and 1930 to determine employees’ attitudes
towards company, supervision, insurance plans, promotion and
wages.
 Initially, these interviews were conducted by means of direct
questioning such as “do you like your supervisor?” or “is he in your
opinion fair or does he have favorites?” etc. which could not get to the
root of the problem.
 The method was changed to non- directive interviewing where
interviewer was asked to listen to instead of talking, arguing or
advising.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

3. Mass Interviewing Programme - 1928 - 1930

 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

3. Mass Interviewing Programme - 1928 - 1930
 Results
1. Merely giving an opportunity to talk and express grievances would
increase the morale.
2. Complaints were symptoms of deep-rooted disturbances.
3. Workers are governed by experience obtained from both inside and
outside the company.
4. The worker was satisfied/dissatisfied depending upon how he
regarded his social status in the company.
5. Social groups created big impact on work.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

4. Bank Wiring Observation Room Experiment - (1931-32)
 These experiments were conducted to find out the impact of small
groups on the individuals.
 In this experiment, a group of 14 male workers were formed into a small
work group.
― 9 Wiremen
― 3 Solder men
― 2 Inspector
 The men were engaged in the
assembly of terminal banks for the
use in telephone exchanges.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

4. Bank Wiring Observation Room Experiment - (1931-32)
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

4. Bank Wiring Observation Room Experiment - (1931-32)
 The work involved attaching wire with switches for certain equipment
used in telephone exchanges.

 Hourly wage for each worker was fixed on the basis of average output
of each worker.

 Bonus was also payable on the basis of group effort.

 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

4. Bank Wiring Observation Room Experiment - (1931-32)
Expectation
It was expected that highly efficient workers would bring pressure on
less efficient workers to increase output and take advantage of group
incentive plan.
Result
The strategy did not work and workers established their own standard
of output and this was enforced vigorously by various methods of social
pressure.
The workers cited various reasons for this behaviour viz. fear of
unemployment, fear of increase in output, desire to protect slow workers
etc.
 Unit 2
Introduction to Management and Management Process
George Elton Mayo : Contribution : Hawthorne studies

Phases of Hawthorne experiments

4. Bank Wiring Observation Room Experiment - (1931-32)
Findings
This experiments clearly showed that a man at work is motivated by
more than the satisfaction of economic needs.

Management should recognise that people are essentially social beings

and not merely economic beings.

As a social being, they are members of a group and the management
should try to understand group attitudes and group psychology.
 Unit 2
Introduction to Management and Management Process
Outcome of Hawthorne studies

1. Organisation in a Social Unit

2. Group Influence and behaviour develops psychological bond

3. Motivation beyond monetary benefits

4. Supervision style worker’s attitude to work and his productivity.

5. Working Conditions impacts on Productivity

6. Employee Morale effects on Productivity

7. Communication increases output

8. Balanced Approach to the whole situation can show better results.

 Unit 2
Introduction to Management and Management Process
Chester Barnard : Biography
 Chester Irving Barnard
(November 7, 1886 – June 7, 1961) was an
American business executive, public
administrator, and the author of pioneering work
in management theory and organizational studies.

 His landmark 1938 book, The Functions of the Executive, sets out a
theory of organization and of the functions of executives in
organizations.

 In his youth, Barnard worked on a farm, then studied economics at

Harvard University.

 Barnard joined the American Telephone and Telegraph Company

(now AT&T) in 1909.
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Biography

 In 1927, he became president of the New Jersey Bell Telephone

Company.

 He was elected a Fellow of the American Academy of Arts and

Sciences in 1939.

 He was president of the United Service Organizations (USO) 1942-45.

 He served as president of the Rockefeller Foundation, 1948–52,

 Chairman of the National Science Foundation, 1952-54

 His important writings include: The Functions of Executive (1938).

Organisation and Management (1948).
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Contribution

 Barnard viewed organizations as systems of cooperation of human

activity, and noted that they are typically short-lived.

 According to Barnard, organizations are not long-lived because they do

not meet the two criteria necessary for survival: effectiveness and
efficiency.

 Effectiveness, is defined as being able to accomplish stated goals.

 organizational efficiency is defined as efficiency of an organization as

the degree to which that organization is able to satisfy the motives of
the individuals. If an organization satisfies the motives of its members
while attaining its explicit goals, cooperation among its members will
last.
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories

1. Theory of Formal Organisation

2. Organisational Equilibrium

3. Acceptance Theory of Authority

4. Functions of the Executive

5. Informal Organisation
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories
1. Theory of Formal Organisation
 Barnard gave a theory of formal organisation.

 He defined it as “a system of consciously co-ordinated activities of

forces of two or more persons.”

 According to him, organisation consisted of human beings whose

activities were co-ordinated and therefore becomes a system

 According to Barnard initial existence of organisation depends upon

three elements :
1. The willingness of persons to contribute efforts to the co-operative system
2. There should be an objective of co-operation and
3. Proper communication system is necessary.
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories
2. Organisational Equilibrium
 Barnard suggested an equilibrium model to describe the balance
achieved between the contributions of the members of an organisation
and return contribution made by the organisation to the fulfilment of
private goals of the members.

 The persons working in the organisation have two roles—a personal

role and an organisational role.

 There should be a balance between what employees get out of the

organisation (money, status, recognition, etc.) and what they contribute
in form of time, knowledge, discomfort, production, etc.
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories
3. Acceptance Theory of Authority
 Barnard did not agree with the classical concept of authority where it
comes from top to bottom.

 He said that authority comes from bottom. In his opinion authority is

confirmed only when it is accepted by a person to whom it has been
addressed.

 Disobedience of such a communication is a denial of authority.

 According, to Barnard the decision as to whether an order has authority

or not lies with the person to whom it is addressed, and does not reside
in persons of authority or those who issue these orders.

 Thus in Barnard’s view, if a subordinate does not accept his manager’s

authority, it does not exist.
 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories
3. Acceptance Theory of Authority
A person will accept authority under following conditions’:

1.He can and does understand the communication;

2.At the time of his decision he believes that it is not inconsistent with the
purpose of the organisation.

3.At the time of his decision, he believes it to be compatible with his

personal interest as a whole; and

4.He is able (mentally and physically) to comply with it.

 Unit 2
Introduction to Management and Management Process
Chester Barnard : Theories
4. Functions of the Executive
Barnard postulated three types of functions for the executives in formal
organisational set up. These functions are:

1.Maintaining proper communication in the organisation

2.Obtaining essential services from individuals for achieving

organisational goals

3.Formulating purposes and objectives at all levels.

 Unit 2
Introduction to Management and Management Process

Peter Drucker
Father of Modern Management

“Management is doing things right; Leadership is

doing the right things."

- Peter Drucker
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Biography
 November 19, 1909 – November 11, 2005

 Drucker was born in Vienna, Austria, in a small village named

Kaasgraben

 He was a writer, consultant, economist and widely considered to be the

father of “Modern Management”.

 He wrote about 39 books and countless popular articles which explored

how humans are organized across all sectors of society-in business,
government and non profit world.

 Drucker found few opportunities for employment in post-World War I

Vienna, so he moved to Hamburg, Germany, first working as an
apprentice at an established cotton trading company, then as a
journalist, writing for Der Österreichische Volkswirt (The Austrian
Economist).
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Biography
 Drucker then travelled to Frankfurt where he worked as a financial
writer. In 1931, he earned his doctorate in public law and international
relations from the University of Frankfurt.

 In 1933, Drucker left Germany for England. In London, he worked for

an insurance company, then as the chief economist at a private bank.

 He then had a distinguished career as a teacher, first as a professor of

politics and philosophy at Bennington College from 1942 to 1949, then
twenty-two years at New York University as a Professor of
Management from 1950 to 1976.

 Drucker went to California in 1971, where he developed one of the

country's first executive MBA programs for working professionals at
Claremont Graduate University
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Biography
 Claremont Graduate University's management school was named the
Peter F. Drucker Graduate School of Management in his honor in 1987

 He established the Drucker Archives at Claremont Graduate

University in 1999; the Archives became the Drucker Institute in 2006.

 Drucker taught his last class in 2002 at age 92.

 Drucker died November 11, 2005 in Claremont, California of natural

causes at 95.
https://www.drucker.institute/
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Books
 1939: The End of Economic Man
 1946: Concept of Corporation
 1950: The New Society
 1954: The Practice of Management
 1990:Managing the Nonprofit Organization
 1992: Managing for the Future
 1993: The Ecological Vision
 1995: Managing in a Time of Great Change
 1997: Drucker on Asia: A Dialogue b/w Peter Drucker & I Nakauchi
 1998: Peter Drucker on the Profession of Management
 1999: Management Challenges for 21st Century
 1999: Managing Oneself
 2001: The Essential Drucker
 2002: Managing in the Next Society
 2002: A Functioning Society
 2004: The Daily Drucker
 2008 (posthumous): The Five Most
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution

1. Decentralization
2. Knowledge work
3. Nature of Management
4. Management by objectives
5. Management Functions
6. Organisation Structure
7. Organisation Changes
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 Drucker was focused on
1. Decentralization decentralizing management in
2. Knowledge work the workplace. Also called as
Federalism
3. Nature of Management
 He wanted all employees to feel
4. Management by objectives valued and empowered, like
5. Management Functions their work and voice mattered.

6. Organisation Structure  He believed in assigning tasks

that inspire workers, and
7. Organisation Changes bringing supervisors and their
subordinates together to achieve
common, company goals.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 Knowledge workers are those
1. Decentralization whose jobs require handling or
2. Knowledge work using information, such as
engineers or analysts.
3. Nature of Management
 Drucker placed high value on
4. Management by objectives workers who solved problems
5. Management Functions and thought creatively.

6. Organisation Structure  He wanted to cultivate a culture

of employees who could provide
7. Organisation Changes insight and ideas.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 According to Drucker the basic
1. Decentralization objective of management is to lead
towards innovation.
2. Knowledge work
3. Nature of Management  He advocates that management is
creative and innovative in nature
4. Management by objectives rather than bureaucratic.

5. Management Functions  He has also emphasized that

managers should not only have
6. Organisation Structure skills and techniques but should
have right perspective putting the
7. Organisation Changes things into practice.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 (MBO) Management By
1. Decentralization Objectives is regarded as one of
2. Knowledge work the most important contributions
of Drucker to the discipline of
3. Nature of Management management.

4. Management by objectives  He introduced this concept in

5. Management Functions 1954. It is regarded to be his
remarkable contribution to the
6. Organisation Structure management thought.

7. Organisation Changes
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
Introduction
 Drucker conceptualized "Management by Objectives" (MBO), a process
that encourages employees of all levels to work together.

 Each worker has an equal say, sharing their own insight and opinions to
reach common ground. From there, teams establish shared goals and
delegate tasks according to skillsets and interests.

 He mentioned that a manager's primary task is to manage for results by

translating corporate objectives into departmental, group and
individual measures of performance.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
Definitions
“Management By Objectives (MBO) can be defined as a process whereby
the employees and the superiors come together to identify common
goals, the employees set their goals to be achieved, the standards to be
taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed”.

Management by Objectives (MBO) is a process of agreeing upon

objectives within an organization so that management and employees
agree to the objectives and understand what they are in the organization

The principle behind Management by Objectives (MBO) is to make sure

that everybody within the organization has a clear understanding of the
aims, or objectives, of that organization, as well as awareness of their
own roles and responsibilities in achieving those aims.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
 Job-Related Objectives: In MBO, employees are briefed out on the common
organizational goals along with their individual goals and expectations of the
organization.
 Growth Objectives: Here, the emphasis is on the long-term organizational goals
and the expected growth in future. Also, individual growth is linked to
organization growth.
 Tasks and Projects: This is the part where the roles, responsibilities, duties and
projects to be handled by each individual are chalked out.
 Targets: The vision of the organization, in the long run, is clarified, and the
individuals are directed to aim at these set objectives.
 Values: Another crucial element of MBO is the organizational values,
perception, beliefs and business ethics.
 Behavioural Parameters: The management also defines the individual’s code of
conduct, attitude and response to a particular situation.
 Performance Appraisal: MBO also includes the evaluation of individual
performance concerning the efforts and contribution made by each employee for
the growth of the organization.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)

1. Defining Organizational Goals: The initial step is to establish the short-

term and long-term organizational goals and objectives which evolves
from the mission and vision of the company.

2. Determining Employees’ or Subordinates’ Objectives: The next step is

to define the individual goals and objectives by taking opinion from the
employees on their ability of goal accomplishment and targets which
they will set for themselves.

3. Constant Monitoring Employee Progress and Performance: The

managers need to continuously monitor the performance of each
employee to identify any loopholes or hurdles in business operations.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)

4. Performance Evaluation: After monitoring the work, the managers

need to evaluate and review the performance of every individual to spot
any scope for improvement.

5. Providing Feedback: With the help of above evaluation, the managers

now need to give valuable feedback to every individual to motivate
them and at the same time making them aware of their weaknesses and
potential for improvement.

6. Performance Appraisal: The last step is reviewing the performance of

the employees regularly to bring in efficiency in their work stream.
As these goals are usually set for short-term, the process can be repeated
again and again.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Management by Objective (MBO)
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
There are three basic functions of
1. Decentralization a manager which he must perform
2. Knowledge work to enable the institution to make its
contribution for:
3. Nature of Management
1.The specific purpose and
4. Management by objectives mission of the institution whether
5. Management Functions business, hospital or university;

6. Organisation Structure 2.Making work productive and

the worker achieving
7. Organisation Changes
3.Managing social impacts and
social responsibilities.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 Drucker was focused on
1. Decentralization decentralizing management in
2. Knowledge work the workplace.

3. Nature of Management  He wanted all employees to feel

valued and empowered, like
4. Management by objectives their work and voice mattered.
5. Management Functions 
 He believed in assigning tasks
6. Organisation Structure that inspire workers, and
bringing supervisors and their
7. Organisation Changes subordinates together to achieve
common, company goals.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 Drucker was against the
1. Decentralization bureaucratic structure because of
its too many dysfunctional effects.
2. Knowledge work
 Therefore, it should be replaced.
3. Nature of Management  He has emphasised three basic
characteristics of an effective
4. Management by objectives organisation structure.

5. Management Functions 1. Enterprise should be organised for

performance
6. Organisation Structure
2. Should contain the least possible
7. Organisation Changes number of managerial levels
3. It must make possible the training
and testing of tomorrow’s top
managers—responsibility to a
manager while still he is young.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 He has identified three basic
1. Decentralization aspects in organising
2. Knowledge work 1. Activity analysis,
2. Decision analysis,
3. Nature of Management 3. Relation analysis.
4. Management by objectives
5. Management Functions
6. Organisation Structure
7. Organisation Changes
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 An activity analysis shows what
1. Decentralization work has to be performed, what
kind of work should be put together,
2. Knowledge work and what emphasis is to be given to
each activity in the organisation
3. Nature of Management structure.
 Decision analysis takes into account
4. Management by objectives the four aspects of a decision: the
degree of futurity In the decision,
5. Management Functions the impact of decision over other
functions, number of qualitative
6. Organisation Structure factors that enter into it, and
whether the decision is periodically
7. Organisation Changes recurrent or rare.
 Relation analysis helps in defining
the structure and also to give
guidance in manning the structure.
 Unit 2
Introduction to Management and Management Process
Peter Drucker: Contribution
 Drucker has visualised rapid
1. Decentralization changes in the society because of
2. Knowledge work rapid technological
development.
3. Nature of Management
 Though he is not resistant to
4. Management by objectives change, he feels concerned for
5. Management Functions the rapid changes and their
impact on human life.
6. Organisation Structure
 Normally, some changes can be
7. Organisation Changes absorbed by the organisation but
not the rapid changes.
 Unit 2
Introduction to Management and Management Process

Management as Art, Science &

Profession ?
 Unit 2
Introduction to Management and Management Process
Management as Art, Science & Profession ?
Introduction
 The meaning of management has been different for different people.

 Some consider it as a SCIENCE because of its proven and experimented

principles,

 For some it is an ART because of the practice it requires in

accomplishing it.

 Some consider it to be just a PROFESSION and a source of income.

 Well, in reality, Management is a combination of this Trivia.

Management is an ART, a Science and a PROFESSION, too.
 Unit 2
Introduction to Management and Management Process
Management as a Science
 Science is a systematic body of knowledge pertaining to a specific field of
study that contains general facts which explains a phenomenon.

 It establishes cause and effect relationship between two or more variables

and underlines the principles governing their relationship.

Characteristics of Management as Science

 It cannot be denied that management has a systematic body of

knowledge but it is not as exact as that of other physical sciences like
biology, physics, and chemistry etc.

 The main reason for the in exactness of science of management is that it

deals with human beings and it is very difficult to predict their
behaviour accurately
 Unit 2
Introduction to Management and Management Process
Management as an Art
 Management is an art of getting things done through and with the people
in formally organized groups. - Harold Koontz
 Art implies application of knowledge & skill to trying about desired
results.
 An art may be defined as personalized application of general theoretical
principles for achieving best possible results.

Characteristics of Management as Art

 The old saying that ―Manager are Born has been rejected in favour of
Managers are Made.
 It has been aptly remarked that management is the oldest of art and
youngest of science. To conclude, we can say that science is the root and
art is the fruit.
 Unit 2
Introduction to Management and Management Process
Management as a Profession
 Management has been regarded as a profession by many.

 Today we can see many signs that management is working towards

increased professionalism.

Characteristics of Management as Profession

Thank you