Module 1

Management Foundations

Dr. Mini Agrawal

Amity Business School
Amity University Madhya Pradesh
Module I:

• Introduction Definition of management,

• Role of managers,
• Functions of Management,
• Levels of Management,
• Evolution and Foundations of Management
Theories –
– Classical and Neo - Classical Theories,
– Systems Approach to organization,
– Modern Organization Theory.
 Introduction of Management

Concept of Management
The term management is used in three alternative ways:
1) Management as a Discipline- Field of study having well
defined concepts and principles

2) Management as a Group of People- Includes all those

personnel who perform managerial functions in
organization.

3) Management as a Process- Systematic method of

handling activities
 Definition – Management:

• “Management is the process of designing and maintaining an

environment in which individuals working together in
groups, efficiently accomplish selected item”

• “Management is the process of getting things done, through &

with people in organization”

'' Management is the art and science of preparing, organizing

and directing human efforts to control the forces and utilize
the material of nature for the benefit of men''.
American Society of Mechanical Engineers
 Management

Management is the art of getting things done effectively and

efficiently through people using organizational resources in a
dynamic environment.

The planning, organizing, leading, and controlling of human

and other resources to achieve organizational goals
effectively and efficiently

Mary Parker Follet- the act of getting things done through

people.

Frederick Taylor defines Management as the art of knowing

what you want to do in the best and cheapest way.
 Management
• Management is the attainment of organizational goals in an
effective and efficient manner through planning, organizing,
staffing, directing and controlling organizational resources.
• Organizational resources include men(human beings), money,
machines and materials.
Resources include:
➢ Human resources e.g. employees Planning

➢ Financial resources e.g. bank

loan or investment from
Managem
shareholders Controlling
ent Organising

➢ Physical resources e.g.

machinery, inventory
➢ Information resources e.g. Leading

knowledge
 Why study management?

The more efficient and effective use of scarce resources that

organizations make of those resources, the greater the relative
well-being and prosperity of people in that society

1. Helps people deal with their bosses and coworkers

2. Opens a path to a well-paying job and a satisfying career

Management ensures that these resources are combined into a total
system to accomplish an objective. It is a process of deciding:

• How many people are to be economically employed,

• What kinds of people to assign to what jobs,

• How much money to spend on specific problems,

• What kinds of activities to perform first and what to perform last,

• How much time should be spent on one activity, and

• Who are the customers and whether they are satisfied with its
products and services.
• Management
– The process of getting things done, effectively and
efficiently, through and with other people

– Efficiency - doing the thing correctly; refers to the

relationship between inputs and outputs; seeks to
minimize resource costs
– Effectiveness - Means doing the right things; goal
attainment
Efficiency and Effectiveness
 Activity

• What comes in your mind when you think about management

and managers? Please express in the form of picture or
diagram. You have five minutes.
 Characteristics/ Nature

• Management is a distinct process.

• Management is an organized activity
• Management aims at the accomplishment of
predetermined objectives.
• Management is both a science and an art.
• Management is a group activity
• Management principles are universal in nature
• Management integrates human and other resources.
According to George R. Terry, "Management is a distinct process consisting of planning,
organizing, actuating, and controlling, performed to determine and accomplish stated
objectives by the use of human beings and other resources".
 Objectives Of Management

In brief the objectives of management are as follows:

1. Higher Efficiency
Management seeks to obtain maximum output with minimum
resources and efforts.
2. Satisfaction of Customers
Management attempts to produce products required by the customers.
3. Adequate Return on Capital
Management must achieve a reasonable rate of return for the owners
of the business.
4. Satisfied Workforce
Management attempts to build a team of good workers who are happy
and satisfied with the organization.
5. Better Working Conditions
Management seeks to achieve a system to ensure fair wages for the
work, security of employment and better working conditions for
the work force.
6. Relations with Suppliers
Management seeks to achieve good relations with the suppliers of
raw materials and capital so as to continue in production.
7. Contribution to Nationals Goals
The management must contribute to the national goals. It should
use the judicious use of scarce resources of the country.
 Managerial Roles by Mintzberg

These roles, as described by Henry Mintzberg, highlight the diverse

and dynamic nature of a manager’s job1. Managers must balance
these roles to effectively lead their teams and contribute to the
organization’s success.
Managerial Roles by Mintzberg
 Interpersonal Role

These roles involve interactions with employees and other

stakeholders:
• Figurehead: Representing the organization in official and
symbolic activities.
• Leader: Motivating and managing employees, providing
direction and support.
• Liaison: Networking and coordinating with internal and
external contacts.
 Informational Role

These roles focus on processing and sharing

information:
Monitor: Gathering and analyzing information from the
environment.
Disseminator: Sharing important information with team
members.
Spokesperson: Communicating on behalf of the
organization to external parties.
 Decisional Role

These roles involve making decisions and solving problems:

• Entrepreneur: Initiating and managing change and
innovation.
• Disturbance Handler: Addressing conflicts and crises.
• Resource Allocator: Distributing resources efficiently to
achieve organizational goals.
• Negotiator: Engaging in negotiations with stakeholders to
reach agreements.
What Make Managers Successful?

• Hard work
• Smart work
• Patience
• Out of box thinking
• Reading and acquiring knowledge
• Ethical consciousness
• Collaborative relationship
• Persistence
Activity –Assignment Question 1
Is The Manager’s Job Universal?
– Is managing in a commercial enterprise different
than managing in a non-commercial organization?

– Does the size of an organization affect how

managers function in the organization?

– Is management the same in all economic, cultural,

social and political systems?
 Management Elements

1. Management is Universal
The principles and techniques of management have universal application.
They can be applied to all types of organizations business, social,
educational and religious.
2. Management is Social Process
Management is basically a social activity because management is mainly
related with the human activities of an enterprise.
3. Management is Goal-Oriented
The purpose of management is to achieve certain goals. The main objective
of management is to maximize efficiency and economy of human efforts.
4. Management is Activity-Based
Management refers to a distinct class of activities which could be learnt and
put into practice.
5. Management is Integrative Process
The essence of management is integration of human and other resources in
a manner that it leads to effective performance.
6. Management is a Group Activity
It is concerned with group efforts because it creates effective cooperation
among persons working together in a group.
7. Management is Intangible
The management is not a tangible activity of business enterprise. It is the
direction and control of the business activity which can be feeled but can
not be seen or touched.
8. Management is Dynamic
Management involves creating an internal environment or conditions,
whereby people are able to perform their tasks efficiently. Management
is a continuously growing process.
9. Management is a Multi-Disciplinary Subject
Management contains principles drawn from many social sciences like
sociology, economics etc.
10. Management Accomplishes Results Through Others
The essence of management is integration of human and other resources in
such a way that it leads to effective performance.
11. Management is Both a Science and an Art
The management, as a science provides general principles, which can guide
the managers in their professional activities. The management, as an
art, provides the best possible solutions of the problems and the best
possible exploitation of available resources.
 Orientations for defining
Management Process

1) Production or Efficiency-oriented Definitions

• Taylor, “Management is the art of knowing what you want
to do and then seeing that it is done in the best and cheapest
way”.
• John Mee, “Management is the art of securing maximum
results with minimum efforts so as to secure maximum
prosperity and happiness for both employer and employee
and give the public with best possible services”.
Both these definitions emphasize on relationship between
efforts and results & the objectives of management but
do not specify how these objectives can be achieved.
 Orientations for defining
Management Process:
2) Decision-oriented Definition
Stanley Vance, “Management is simply the process of decision-
making and control over the action of human beings for the
expressed purpose of attaining the determined goals”.

This definition indicates that the basic activity of a manager is

to make decision and enforces these decisions. However, this
does not provide the processes in which context decision
making is applied.
 Orientations for defining
Management Process:

3) People-oriented Definitions

• Lawrence Appley, “Management is the accomplishment of

result through the efforts of other people”.
• Koontz: “Management is the art of getting things done
through and with people in formally organized groups”.
These definition explain the nature of management through
these do not specify the functions or activities involved in the
process of getting things done by or with the cooperation of
other people”.
 Orientations for defining
Management Process:
• 4) Function-oriented Definition

Henry Fayol, “To manage is to forecast and to plan, to

organize, to coordinate and to control”.
This definition is more relevant for understanding the exact
nature and scope of management.
From this point of view, management can be defined as
follows-
“Management is the process involving planning,
organizing, staffing, directing and controlling human
efforts to achieve stated objectives in an organization”.
Think and Answer

1. Summarize the essential roles performed by managers.

2. Discuss whether the manager’s job is generic.
3. Describe the four general skills necessary for becoming a successful manager.
4. Describe the value of studying management.
5. Identify the relevance of popular humanities and social science courses to management practices.
6. Describe how the need to increase organizational efficiency and effectiveness has guided the
evolution of management theory
7. Explain the principle of job specialization and division of labor, and tell why the study of person-
task relationships is central to the pursuit of increased efficiency
8. Identify the principles of administration and organization that underlie effective organizations
9. Trace the change in theories about how managers should behave to motivate and control
employees
10. Explain the contributions of management science to the efficient use of organizational resources
11. Explain why the study of the external environment and its impact on an organization has become a
central issue in management thought
 Levels of Management

• Management levels signify the hierarchy of management in

any organization.
• The number of levels will depend upon the size of
business, number of workers & effective span of control.
• The Hierarchy of management positions from top to
bottom is called Levels of Management.
• The level of manager in the hierarchy determines the
amount of authority & status enjoyed by him.
• The supervisory level of managers has less authority than
middle level managers who have in turn less authority than
the top managers.
30
 Organizational Levels/
Order of Management/ Classifications of
Management
 Top Management

• Top Management consists of board of Directors,

chairman, and chief executive officer.
• It performs higher level management functions &
takes the policy decisions.
• This coordinates the affairs of the business & reviews
the performance of the middle & lower levels of the
management.
• It is responsible for overall management and
performs all such functions which are necessary.

32
 Top Management Functions

• Top Management lays down policies & objectives of the

enterprise.
• Taking decisions for the accomplishment of the goals of
the enterprise.
• Coordination of the various departments & divisions.
• Laying down guidelines for the departmental & divisional
heads.
• Making appointments to middle level positions in the
company organization, such as divisional manager,
Departmental Heads, etc.
• Reviewing the work of executives at different levels.
33
 Middle Management

• Middle management stands between Top Management &

lower level management.
• It consists of Heads of various departments.
• The job of middle level manager is to organize their
departments to implement the Top Management’s
policies.
• They issue the instructions to the lower level
management.
• They serve as the channel of communication between the
Top Management & lower management.

34
Middle Management Functions

• Planning for the execution of policies & programmes of

Top Management.
• Analyzing the achievements of lower levels in the light of
various plans and programmes.
• Discussing the solutions of current problems &
proceedings further with their results.
• Appraising the performance of subunits.
• Guidance & motivation of supervisory personnel.
• Achieving coordination between different sections or
units.

35
 Specific Skills for Managers

• Behaviors related to a manager’s effectiveness:

– Controlling the organization’s environment and its
resources.
– Organizing and coordinating.
– Handling information.
– Providing for growth and development.
– Motivating employees and handling conflicts.
– Strategic problem solving.
 Management Charter Initiative
Competencies for Middle Managers

1. Initiate and implement change 6. Develop teams, individuals, and

and improvement in services, self to enhance performance
products, and systems
7. Plan, allocate, and evaluate work
2. Monitor maintain, and improve carried out by teams, individuals
service and product delivery and self
3. Monitor and control the use of 8. Create, maintain, and enhance
resources effective working relationships
4. Secure effective resource 9. Seek, evaluate, and organize
allocation for activities and information for action
projects
10. Exchange information to solve
5. Recruit and select personnel problems and make decisions
 Lower Management

• It consists of foreman, supervisors office superintendents,

etc. Who are engaged in the directions of the directions of
operative employees?
• First line supervisors serve as an important link between
the management & the workers.
• They implement the top management policies & provide
feedback to the higher levels of management.
• The lower level managers plan the day to day activities &
assign tasks to their subordinates, guide them & take
corrective steps whenever necessary.

38
Lower Management Functions

• To supervise & guide the operative workforce.

• To plan & organize the activities of the group.
• To arrange for necessary materials, machine, tools, etc for
workers & to provide them the necessary working
environment.
• To provide training & solve problems of the workers.
• To communicate workers problems to the higher level
management.

39
Robert Katz Managerial Skills
 Technical Skills

A persons’ knowledge and ability to make effective use

of any process or technique constitutes his technical
skills.

Technical skills- These skills are required by the

employee who are in middle level Management.
leaders

For eg: Engineer, accountant, data entry operator,

lawyer, doctor etc.
 Human Skills

An individuals’ ability to cooperate with other members of

the organization and work effectively in teams.

Human Relations Skills-These skills are required by the

employee in the supervisory level.

For eg: Interpersonal relationships, solving people’s problem

and acceptance of other employees.
TeacherMaleG
 Conceptual Skills

Ability of an individual to analyze complex situations and to

rationally process and interpret available information.

Conceptual Skills-These skills are required by the employee

who are in top level management.

For eg: Idea generation and analytical process of

information. Leadership%2520Pyramid
 General Skills for Managers

• Conceptual skills
– A manager’s mental ability to coordinate all of the
organization’s interests and activities
• Interpersonal skills
– A manager’s ability to work with, understand, mentor,
and motivate others, both individually and in groups
• Technical skills
– A manager’s ability to use the tools, procedures, and
techniques of a specialized field
• Political skills
– A manager’s ability to build a power base and establish
the right connections
 Sum up- Levels of Management

Classification of Levels of Management

1) Top Management
TOP MANAGERS- set organizational goals, strategies to implement them and make
decisions
- Individuals who are responsible for making decisions about the direction of the
organization and establishing policies that affect all organizational members

2) Middle Management
MIDDLE MANAGERS- heads of various departments and organize human and other
resources to achieve organizational goals
- Individuals at levels of management between the first-line manager and top management

3) Lower & Supervisory Management

FIRST-LINE MANAGERS- often called supervisors stand at the base of the managerial
hierarchy
- Supervisors responsible for directing the day-to-day activities of operative
employees

45
Distribution of Time per Activity by
Organizational Level
 Activity

• Managers at all levels in all organizations perform

each of the four essential managerial tasks of
planning, organizing, leading, and controlling.

• Assume yourself as manager of an company as

perform these tasks.
FUNCTIONS/ PROCESS OF MANAGEMENT
 Classification Of Management
Functions

Managerial functions
a) Planning

• MANAGEMENT FUNCTIONS/ b) Organizing

Management Process a) Staffing

b) Directing
c) controlling
 Management functions (or) Process of
Management:

There are five types of functions in management. They are,

• Planning- Defines the goal & establishing strategy such as Forecasting,
decision making, strategy, formulation policy-Making, programming,
scheduling, budgeting problem solving, innovation
• Organizing- includes determining what task has to be done, who is to do
them such as Functionalisation, divisionalisation, departments,
Decentralisation, activity, analysis, task, span of management, task allocation
• Staffing- Includes recruitment of people and training them towards the
project such as Manpower planning, Recruitment, selection, training,
placement, compensation, promotion, appraisal.
• Directing (Leading) -Includes the motivating the employees and directing
the activities such as Supervision, motivation, communication, leadership
• Controlling- It is the process of monitoring the performance such as
Fixation of standards, recording, measurement, reporting, corrective action.
 Planning
• Planning is deciding in advance what is to be done in the future
• Planning is deciding in advance what to do, how to do it, when to do it and
who is to do it. Planning bridges the gap from where we are to where we want
to go. It makes it possible for things to occur which would not otherwise
happen”

• Planning is the most fundamental function of management. Planning involves

determination of objectives of the business, formulation of programmes and
courses of action for their attainment, development of schedules and timing of
action and assignment of responsibilities for their implementation.
– Its elements are:-
1. What will be done
2. What resources will be required
3. How it will be done
4. Who will do it
5. When it will be done
 Steps in planning

• Collecting information about past

• Defining objectives
• Developing planning premises
• Discovering alternative courses of action.
• Evaluating alternatives.
• Choosing the best alternative
• Defining subsidiary plans
• Periodic revision and review of plans.
 Limitations of planning

• Lack of accurate information

• Time consuming
• Expensive
• Rigidity due to strict compliance with plans
• Unwillingness to people change
• External limitations (political)
 Organizing
• Organizing is the distribution of work in group-wise or section- wise for
effective performance. Once the managers have established objectives and
developed plans to achieve them, they must design and develop a human
organization that will be able to carry out those plans successfully.
Organizing involves dividing work into convenient tasks or duties, grouping
of such duties in the form of positions, grouping of various positions into
departments and sections, assigning duties to individual positions and
delegating authority to each position so that the work is carried out as
planned.

• According to Koonz O’Donnel, “Organization consists of conscious

coordination of people towards a desired goal”. One has to note that
different objectives require different kinds of organization to achieve them.
For example, an organization for scientific research will have to be very
different from one manufacturing automobiles.
 Steps in Organizing

• Identifying the activities required for achieving

objectives.
• Classifying these activities in to convenient groups
• Assigning the group of activities to appropriate
persons.
• Delegating authority and fixing responsibilities.
• Coordinating Authority Responsibility relationship
throughout the enterprise.
 Staffing

• It is concerned with the Human resources of the

enterprise.

• It is concerned with acquiring, developing, utilising and

maintaining human resources.

• It is a process of matching jobs with individuals to ensure

right man for the right job.

• Selecting and training individuals for specific job

functions, and charging them with the associated
responsibilities.
 Staffing
• Staffing involves managing various positions of the organizational
structure.

• It involves selecting and placing the right person at the right position.
• Staffing includes identifying the gap between manpower required and
available, identifying the sources from where people will be selected,
• Staffing involves the determination of manpower requirements of the
enterprise and providing it with adequate competent people at all levels. The
staffing function performs the following sub functions:

(1)Manpower planning.
(2)Recruitment
(3)Selection of the best qualified from those who seeks job,
(4)Training and Development.
(5) Performance appraisal and compensation.
 Significance of Staffing functions

• Increasing size of organization: Advancement in science and

technology has given rise to large scale companies employing
thousands of employees. The performance of the company
depends on the quality and character of the people. This has
increased the importance of staffing.
• Advancement of technology: In order to make use of latest
technology, the appointment of right type of persons is necessary.
• Long-range needs of manpower: In some industries, labour
turn-over is high. The management is required to determine the
manpower requirement well in advance. Management has also to
develop the existing personal for future promotion. The role of
staffing has also increased because of shortage of good
managerial talents.
 Steps in staffing

• Manpower planning

• Recruitment, selection, placement

• Training and development

• Appraisal, promotion and transfer

• Employee remuneration
 Features of staffing

• It is a function of management

• It is an integral part of the process of management.

• It is concerned with the human resources

• It is a pervasive function

• Aims at optimum utilisation of human resources.

 Directing
• It is concerned with the execution of plans through organized action.
It is also known as commanding or actuating
• Directing consists of the process and techniques utilized in issuing
instructions and making certain that operations carried on of
originally planned.
• The functions of direction involve two major activities:
(1) Giving orders to employees
(2) Leading and motivating them

• The following principles of directing may be useful to a manager.

(1)Harmony of objectives:
(2)Unity of direction or command:
(3)Direct supervision:
(4)Effective communication:
(5)Follow through:
 What is Controlling..??

The word control suggests the operations of checking, testing,

regulation, verification, or adjustment. As a management
function, control is the process of taking the
necessary preventive or corrective actions to ensure that
organization’s mission and objectives are accomplished as
effectively and efficiently as possible.
 Controlling

• “Control is checking current performance against predetermined standards

contained in the plans, with the view to ensuring adequate progress and
satisfactory performance”.
• “Controlling is determining what is being accomplished, that is, evaluating the
performance and if necessary applying corrective measures so that the performance
takes place according to plans”.

(1) Physical standards such as units of production per hour.

(2) Cost standards, such as direct and indirect cost per unit.
(3) Revenue standards such as sales per customer.
(4) Capital standards such as rate of return of capital invested.
(5) Intangible standards such as competency of managers and employees.

STEPS IN A CONTROL PROCESS

• 1. Establishment of standards
• 2. Measuring and comparing actual performance with standards:
• 3. Taking corrective action:
 Controlling Concepts

• Feed Forward Control-Control that attempts to identify

and prevent deviations before they occur is called feed
forward control, sometimes called preliminary or
preventive control.
• Concurrent Control-Control that monitors ongoing
employee activities during their progress, to ensure they
are consistent with quality standards, is called concurrent
control.
• Feedback Control-In this case, the control takes place
after the action. Sometimes called post-action or output
control
 Steps in the Control Process

• Establish Standards of Performance

• Measure Actual Performance

• Compare Performance to Standards:

• Take Corrective Action

 Principles of Effective Control

• Effective controls are timely.

• Control standards should encourage compliance.
• Setting effective standards is important
• Use management by exception.
• Employees should get fast feedback on performance.
• Do not over rely on control reports.
• Fit the amount of control to the task.
 Features of planning

• Planning seeks to achieve certain objectives.

• Planning is oriented towards the future.
• Planning is a mental exercise
• Planning involves choices from alternatives
• Planning is the basics for all other functions.
• It is a continuous function
• Planning is directed towards efficiency.
How we overcome the limitations?

• Top management support

• Better forecasting
• Developing clear-cut objectives
• Participation of employees in planning
• Sound communication
• Overcoming resistance to change
• Well balanced plans.
 Importance of Organising

• Sound organization facilitate growth and diversification

• Optimum use of human resources by matching work with
talent
• Maintain good harmonious structure in the office
• Group activity for better Teams

Dimensions/Forms of Organization Structure.

• Line Organization structures
• Line & Staff Organization structures
• Functional Organization structure
 Importance of staffing

• It helps in discovering and obtaining competent employees

for various jobs.
• It improve the quantity and quality of output by putting
right man for right job.
• It improves job satisfaction of employees
• It reduces cost of personnel by avoiding wastage of human
resource.
• It facilitates the growth and diversification.
 The Evolution of
Management Theory

2-71
 ❖ EVOLUTION OF MANAGEMENT

• PRE-SCIENTIFIC MANAGEMENT ERA:

S. No.
1. Robert Owen (1771- 1858) He advocated that workers should be treated as human beings, he has taken
efforts to improve working conditions in the factory reduce working hours,
increase minimum wages, provide meals to employees, allocate education
provision , housing and other labor welfare facilities. His main contribution
is that the effective and good personnel management was essential part of
manager’s job since it pays dividends to the employer.

2. Charles Babbage (1792-1872) He was a professor of math’s of Cambridge university from 1828to 1839. He
has suggested aspects like division of labor, work measurement, profit
sharing and engineering to improve the efficiency of management.

3. Charles Dupin (1784-1873) He has emphasized systematic education in management. He was French
engineer and formally tried to structure the subject matter of management.
These early contributors focused attention on managerial problems. They
have not presented any unified theory of management. Systematic and
scientific study of management started after 1880. Due to the creation of
joint stock corporate organizational set up.
➢ Classical Theories
❖ Taylor’s Scientific Management theory
❖ Fayol’s Administrative theory
❖ Weber’s bureaucracy theory
➢ Behavioural theories
❖ Human Relations theory
❖ Behavioural Science theory
➢ Modern Management theories
❖ Quantitative theory
❖ Systems theory
❖ Contingency theory
 ❖ THEORIES OF MANAGEMENT

❑Classical Theories
 ❖ CLASSICAL THEORIES

• Classical approach is the oldest formal school of thought

which began around 1850 and continued into the 1920s. Its
mainly concerned with the increasing the efficiency of
workers and organizations based on management practices,
which were an outcome of careful observation.
• Classical approach mainly looks for the universal principles
of operation in the striving for economic efficiency.
• Classical approach includes scientific, Administrative &
bureaucratic management.
 TAYLOR’S SCIENTIFIC MANAGEMENT
THEORY F.W. Taylor

• He is known as the father of scientific management.

• He started his career as apprentice (machinist) in a small machine shop

in USA in 1875 and by his handwork he could go up to chief engineer in
the organization. Acc to him management “the art of knowing exactly
what you want your meant to do and seeing that they do it in the
best and the cheapest way”
TAYLOR’S SCIENTIFIC
MANAGEMENT
THEORY F.W. Taylor
TAYLOR’S SCIENTIFIC
MANAGEMENT
THEORY F.W. Taylor
 ❖ ELEMENTS AND TOOLS OF SCIENTIFIC
MANAGEMENT
➢ Separation of planning & doing: Taylor emphasized the
separation of planning aspect from actual doing of the work.
In other words, planning should be left to the supervisor and
the worker should concentrate only operational work.

➢ Functional foremanship: Taylor introduced the concept of

functional foremanship based on specialization of functions. In
this system, eight persons are involved to direct the activities of
workers. Out of these four persons are concerned with planning
viz., route clerk, instruction card clerk, time and cost clerk and
disciplinarian. The remaining four persons are concerned with
doing aspect of the job, viz., speed boss, inspector, gang boss
and maintenance foreman. It is against to the principle of unity
of command.
Factory Manager
 Planning In charge

• Instruction card clerk: he will prepare the necessary

instructions pertaining to the work and accordingly the
workers will perform their duties.

• Route clerk: his job is to determine the sequence of

operations to be performed in any work.

• Time and Cost Clerk: he will frame the timetable for doing
the various jobs. He will also keep the necessary cost records.

• Disciplinarian: to coordinate the work of all the seven

persons mentioned above.
Production In charge

• Gang Boss: his duty is to keep all the materials and tools ready
so that the workers can start their work without any delay.
• Repair Boss: he will keep all the tools and machines in the
factory in perfect condition
• Inspector: his duty is to ensure that the work is done in
accordance with standard laid down by the planning department.
• Speed boss: he will ensure that each job is done well in time
➢ Job Analysis: It is useful to find out the one best way of doing the
things. The best way of doing a job is one which requires the least
movements, consequently less time and cost. The best way of doing the
thing can be determined by taking up time –motion - fatigue studies.
▪ Time study involves the determination of time a movement takes to
complete.
▪ Motion study involves the study of movements in parts which are involved
in doing a job and thereby eliminating the wasteful movements.
▪ Fatigue study shows the amount and frequency of rest required in
completing the work. Thus, job analysis identifies the fair amount of a
day’s work requiring certain movements and rest periods to complete it.
➢ Standardization: As far as possible, standardization should be maintained in
respect of instruments and tools, period of work, amount of work, working
conditions, cost of production etc.,. These things should be fixed in advance on the
basis of job analysis and various elements of costs that in performing a work.

➢ Scientific Selection and Training of Workers: A worker should be given work

for which he is physically and technically most suitable like, education, work
experience, aptitude, physical strength etc.
➢ Financial Incentives: Financial incentives can motivate workers to put in their
maximum efforts. If provisions exist to earn higher wages by putting in extra
effort, workers will be motivated to earn more.
➢ Economy: The economy and profit can be achieved by making the resources
more productive as well as by eliminateting the wastages.
➢ Mental Revolution: Scientific management depends on the mutual co-
operation between management and workers. For this co-operation, there should
be mental change in both parties from conflict to co-operation.
 ❖ PRINCIPLES OF SCIENTIFIC MANAGEMENT

➢ Replacing rule of thumb with Science: scientific management requires scientific study and analysis
of each element of a job in order to replace the old rule of thumb method. Decisions should be made on
the basis of facts rather than opinions and beliefs. Ex. a school admission.

➢ Harmony in group action: Scientific management enables efficient workers to earn more as payment
is linked to output. As the management is also benefited as a result of increased output, there exists
harmonies relationship between the workers and the management.

➢ Cooperation Management can expect higher profits only if the workers work with maximum
efficiency than the management comes forward recognizes their efficiency and reward them.

➢ Maximum Output More output enables the workers to earn more remuneration this both the
management and the workers are interested in maximizing protection under scientific management.

➢ Development of workers The workers should be selected and trained in accordance with the
requirements of the jobs. Placement of workers will be done based on their capacities. Training enables
the workers to perform their duties with maximum efficiency.
 Administrative
Management Theory
• Administrative Management
– The study of how to create
an organizational structure
that leads to high
efficiency and
effectiveness.

2-87
 ❖HENRY FAYOL (1841-1925) GENERAL

PRINCIPLES OF MANAGEMENT

• Henry Fayol, the French industrialist, his 14 principles derive from the
circumstance that Fayol’s felt that management was not well defined. In his
striving to change this circumstance he suggested “some generalized teaching
of management” to be a main part of every curriculum at places of higher
education and even beginning in “primary schools”.

• Fayol’s dedication to this idea is demonstrated by the fact that after retirement
he went on to not just write books about management ideas, but more
importantly, he found the Centre for Administrative Studies (CAS) in 1917 in
Paris. The CAS mainly functioned as a centre of discussion between
professionals from a large variety of professions, in order to further the
knowledge and understanding of management principles.

• A brief description of Fayol’s fourteen principles of management which he

described in his book ‘General and Industrial Management’ is given below:
 ❖HENRY FAYOL (1841-1925) GENERAL

PRINCIPLES OF MANAGEMENT

• 1. Division of work: The total work to be done is divided into small parts, each entrusted to a

particular individual. As each individual performs only a particular activity, he becomes specialist in

due course.

• 2. Authority and Responsibility: Authority is the official right of the manager. It comes to him by

virtue of his official position. Responsibility is the duty on the part of a subordinate to account for the

work done by him.

• 3. Discipline: Fayol says that employees must follow the discipline by being obedient, by applying

themselves fully in the task undertaken by being energetic and leader must be efficient to enforce

discipline.

• 4. Unity of Command: An employee should receive orders from one superior only and is

accountable to him alone. If there are two superiors for an employee, he will not know whom he

should report to and whose orders he should carry out first.

• 5. Unity of direction: Each group of activities having the same objective should
have one head and one plan, the efforts of all the members of departments must
be directed towards the attainment of that departmental target.
• 6. Subordination of Individual interest to common interest: The interest of
the individual is should be based on common interest. This should be maintained
by constant supervision and fair agreement.
• 7. Remuneration of Personnel: Remuneration payable to the employees should
be fair and should give maximum satisfaction to both the employees and the
employers. It should be based on cost of living, financial position of the
company etc.
• 8. Centralization: The authority at a particular place is centralization and
dispersal of authority in different places of the organization is known as
decentralization. It is based on the size of the organization.
• 9. Scalar chain: it is chain of superiors ranging
from the highest to the lowest level in the
organization. Every communication should follow
the prescribed line of authority.
Gang Plank : Gang Plank refers to an
arrangement in which two managers working at the
same level can communicate with each other
directly for quick communication.
E.g. If D wants to communicate anything to G, it
will be route through DCBAEFG. In such an
arrangement there is scope for delay. So, to avoid
delay D and G may establish direct contact with
each other after obtaining permission from their
respective superior namely C & F.
• 10. Order: two types to order, material order and social order. Material order means everything in its
place, in order to avoid loss of material. Social order means the selection of the right man for the right job.

• 11. Equity: it ensures fairness, kindness and justice in the treatment of employees by their managers. The
managers shall be impartial in their dealings with their subordinates.

• 12. Stability of Tenure of Personnel: it means that an employee shall not be shifted unnecessarily from
one job to another. An employee should be given enough opportunity to learn every aspect of his work
only then he will become an expert in his time of work.

• 13. Initiative: according to him the freedom to think and act is what initiative is. An employee who has
the freedom to think and act in an organization will show greater interest in his work and this will lead to
a higher level of job satisfaction.

• 14. Espirit De Corps: Union is strength, team spirit and co-operation among the members of an
organization are essential for its success.
 Weber’s Bureaucracy
Theory

Max Weber(1864-1920), a German sociologist introduced the

rational-legal authority system to manage the business
organizations.

• Developed the principles of bureaucracy as a formal system of

organization and administration designed to ensure efficiency
and effectiveness.

2-93
Weber’s Principles of
Bureaucracy

His model is characterized

by
➢ Division of work
➢ Rules and regulations
➢ Hierarchy of authority
➢ Technical competence
➢ Record keeping
➢ Impersonal relations

2-94
 Weber’s Principles of Bureaucracy
1) A manager’s formal authority derives from the position he
holds in the organization.
2) People should occupy positions because of their performance,
not because of their social standing or personal contacts.
3) The extent of each position’s formal authority and task
responsibilities and it’s relationship to other positions should
be clearly specified.
4) Authority can be exercised effectively when positions are
arranged hierarchically, so employees know whom to report
to and who reports to them.

2-95
Weber’s Principles of Bureaucracy
5) Managers must create
a well-defined system
of rules, standard
operating procedures,
and norms so they
can effectively
control behavior .

2-96
 Rules, SOPs and Norms
• Rules – formal written instructions that specify actions
to be taken under different circumstances to achieve
specific goals
• Standard Operating Procedures (SOPs) – specific sets
of written instructions about how to perform a certain
aspect of a task
• Norms – unwritten, informal codes of conduct that
prescribe how people should act in particular
situations

2-97
 ❖BEHAVIOURAL THEORY

These theories focus on organizational goals along with

satisfaction of human needs. Shift in focus from workplace
conditions to human side of the organization People- oriented
approach substituted the production-oriented approach.

Two important theories:

• Human relations theory

• Behavioral science theory

HUMAN RELATIONS THEORY
ELTON MAYO: HAWTHRONE EXPERIMENTS

Studies of how characteristics of the work setting affected worker

fatigue and performance at the Hawthorne Works of the
Western Electric Company from 1924-1932.
– Worker productivity was measured at various levels of light
illumination.
– Researchers found that regardless of whether the light
levels were raised or lowered, worker productivity
increased.

2-99
HUMAN RELATIONS THEORY
ELTON MAYO: HAWTHRONE EXPERIMENTS

• The Hawthorne experiments were conducted in four stages. These are given below:

• Illumination Experiments: the main objective of the illumination experiments was to

study the effect of the quality of lighting in the workroom on the efficiency of the
workers. For this purpose, the workers were divided into two groups. One group of
workers was made to work in a room where lighting remained constant. The other group
was made to work in a room where lighting was varied. The experiments revealed the
production increased in both the rooms and therefore the quality of lighting had no
impact on the efficiency level of the workers.

• Relay Assembly Test room experiments – these experiments were conducted in an

assembly department where telephone relay units were assembled. The object of the
experiments was to ascertain the relationship between working conditions and
productivity.
• Interview program: a massive interview programmed was conducted covering more than
ten thousand workers to find out their views on their jobs, working conditions ,
supervision etc. the interview programmed revealed that the morale of the workers
improved as they had the satisfaction that their views were heard. The complaints of the
workers were not objective statements of facts. They were reflections of a worker’s
personal feelings and sentiments

• Bank wiring Group observations- the main aim of the study here is to find
out the influence of the group on a worker to restrict his output in spite of the
existence of incentives for higher output. The working conditions were not
altered for the sake of the investigation.
The Hawthorne Studies
Human Relations Implications
– Hawthorne effect — workers’ attitudes toward
their managers affect the level of workers’
performance

2-102
 The Hawthorne Studies
• Human relations movement – advocates
that supervisors be behaviorally trained to
manage subordinates in ways that elicit their
cooperation and increase their productivity

2-103
 The Hawthorne Studies
Implications
• Behavior of managers and workers in the work setting
is as important in explaining the level of performance
as the technical aspects of the task

• Demonstrated the importance of understanding how

the feelings, thoughts, and behavior of work-group
members and managers affect performance

2-104
 ❖ Findings of Hawthorne Experiments:
1. A social factors such as recognition, sense of belongings etc, influence production
more than physical factors.
2. Monetary incentives do not induce a worker, working in a group to increase
output. He cares more for the friendship and respect of his co-workers.
3. Workers do not react as individuals but as members of a group. No workers want
to incur the ill will or displeasure of his co – workers.
4. An individual in a group is an accepted as its leader by the other members. Such
an informal leader is able to guide and influence the co-workers.
5. What encourages worker more is the feeling that his views and suggestions are
heard by the management.
Behavioral Management
Theory
Behavioral Management
– The study of how managers should personally
behave to motivate employees and encourage
them to perform at high levels and be
committed to the achievement of organizational
goals.

2-106
Behavioral Management
Mary Parker Follett
– Concerned that Taylor ignored the human
side of the organization
• Suggested workers help in analyzing
their jobs
• If workers have relevant knowledge of
the task, then they should control the
task

2-107
 BEHAVIOURAL SCIENCE THEORY

It applies scientific vision to human relations theory.

Concepts from Psychology, Sociology and Anthropology
are applied to study human behavior.

• Psychology – Study of individual behavior

• Sociology – Study of human behavior in groups

•Anthropology - Study of human behavior as individuals

and members of groups .
 MODERN MANAGEMENT THEORY

These theories are responsive to environment changes. They view organizations

as dynamic open systems having multiple objectives. Management is multi-
disciplinary and draws knowledge from various fields to solve complex business
problems. They forecast environment changes through scientific techniques and
discount them to the present business situations. These theories include:

Quantitative theory: It uses the services of quantitative specialists to apply

interdisciplinary techniques to solve business problems. It includes:-

Management science: it uses mathematical models like PERT, CPM, Simulation

etc. to solve business problems.

Operations management: It applies quantitative techniques of inventory

management, statistical quality control etc. to manage the production and
delivery of goods and services. It uses quantifiable data to frame mathematical
models and handles complex decision- making problems.
– Total Quality Management (TQM) —focuses
on analyzing input, conversion, and output
activities to increase product quality.

– Management Information Systems (MIS) —

provides information vital for effective
decision making.

2-110
❑ Systems theory
• As per this approach organization is viewed from a systems point of
view.
• The main elements of systems approach are as follows:
Organization as a purposeful system consisting of several interconnected
and interdependent parts.
The parts or components of a system are called sub- systems.
The position and function of each subsystem can be analyzed and
understood only in relation to the other sub-systems and to the organization
as a whole
Synergy effect.
Every system has a boundary that separates it from its environment.
Contingency theory
• The view that the management technique that best
contributes to the attainment of organizational goals
might vary in different types of situation or
circumstances. It is also called as situational approach.
• “There is no one best way to organize”
• The idea that the organizational structures and control
systems manager choose depend on—are contingent
on—characteristics of the external environment in
which the organization operates.
 Required References
• Essential of Management, Koontz O' Donnell
• Management, Stoner, Freemand & Gilbert
• Principles & practice of Mgmt., L.M. Prasad
• Management Today, Burton & Thakur
• Principles & Practices of Mgmt., C.B. Gupta
Thank You