M&E - CS - Part a- Module 1

8/2/2019 M&E - CS - Part a- Module 1

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Management & Entrepreneurship VI Sem CS

Shiva Kumar, MIT Page - 1

MANAGEMENTUNIT 1

Management: Introduction Meaning Nature & Characteristics of Management,

scope and functional areas of Management Management as a Science, Art or

Profession, Management & Administration Roles of Management, Levels of

Management, Development of Management Thought Early ManagementApproaches Modern Management Approaches.

INTRODUCTION:

Some companies like Reliance Industries, Procter & Gamble, Hindustan, ITC,

Dr. Reddys Labs, HDFC Bank, Tata Iron and Steel Company (TISCO) Limited etc are

most successful and on the other side some companies like Kolleru Paper Mills Ltd.,

Agrifural Chemicals Ltd., Binny Mills and Panyam Cements belong to the

unsuccessful category.

Similarly, we find some outperforming companies like Infosys Technologies

and Wipro. While other companies like Hindustan Machine Tools (HMT) Ltd., andHindustan Cables Limited are low on the performance graph. Some companies like

Tata, the Birla Group expand and diversify their activities, whereas the activities of

other companies shrink day by day, subsequently recording low performance.

Companies of the same industry are being affected by the same

environmental factors. Some companies attract a number of customers while some

other companies repel them. Employees prefer to be identified with some top

companies.

Why do companies perform differently when they operate under the same

environmental conditions, serve the same customer, use the same raw material and

technology and employ the people with similar skills? The answer for this question

invariably is management practice. Thus Management makes remarkabledifference between the companies regarding their performance in terms of

productivity, products, sales, profitability, service to the customer, employee welfare

etc. 4Ms (Money, Men, Material & Machines) join together to form an organization,

most important 5th M is Management. It is a creative process which integrates and

utilizes various available resources effectively and efficiently to accomplish the goals

of an organization. Hence Management plays a vital role in deciding the destiny of

business as well as non business organizations.

MEANING:

Managing is one of the most important activities of human life. To

accomplish aims that could not be achieved individually, people started forminggroups. Managing has become essential to ensure the coordination of individual

efforts. Management applies to all kinds of organizations and to managers at all

organizational levels. Principles of management are now used not only for managing

business but in all walks of life viz. government, military, social and educational

institutions. Essentially, management is same process in all forms of organization.

But it may vary widely in its complexity with size and level of organization.

Management is the life giving element of any organization.


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DEFINITIONS:

According to Mary Parker Follett defines the term management as the art of

getting things done through others.

Henry Fayol defines Management is conduct of affairs of business, moving

towards its objective through a continuous process of improvement and

optimization of resources.

Ivancerich, Donnelly and Gibson, defines the term management as the process

undertaken by one or more persons to coordinate the activities of other persons to

achieve results not attainable by any one person acting alone.

Harold Koontz and Heinz & Weihrich, Management is the process of designing

and maintaining an environment in which individuals, working together in

groups, efficiently accomplish selected aims. This definition ignores the external

environment through which most of the stakeholders interact with the company.

John A. Pearce & Richard B. Robinson includes all kinds of resources in their

definition on management. According to them, Management is the process of

optimizing human, material and financial contributions for the achievement of

organizational goals.

Now, we shall define the term management as designing, providing and

maintaining a conducive internal environment in tune with the opportunities and

challenges of the external environment through planning, organizing, directing and

controlling all resources and operations in order to achieve effective organizational

strategies efficiently.The analysis of the above definitions provides the following aspects of

management:

The purpose of management is to formulate effective (right) organizational

strategies and to achieve them efficiently (productively) based on the

missions, objectives and goals.

Management deals with both internal and external environment.

Management is concerned with all kinds of resources viz., human, financial,

material, machines, technology and technical know-how.

Managers should possess varied skills in order to play a variety of roles. It

applies to managers at all levels in an organization.

Management is applicable to all kinds of organization i.e. both profit andnon-profit oriented organizations.

Management needs to be a profession to achieve goals continuously with an

incremental efficiency.

PURPOSE OF MANAGEMENT: To Achieve MOST

Managers basically formulate Mission, Objectives, Strategies and Tactics

(MOST). Management is essential to achieve the MOST. The organizational mission

is the basic reason for existence. Mission provides a statement of what the company


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stands for, i.e. its purpose for existence. For example, the mission statement of a

commercial bank is: Committed to excellence in performance through customer

satisfaction.

Managers formulate objectives based on this mission. Objectives are the

ends towards which the activity is aimed. This goal is precise and is expressed in

clear and specific terms. For example, the objective of a company is to earn profits

whereas the goal is to earn certain percentage of profit on capital employed.

Management formulates strategies in order to achieve the goals. Strategy is a

unified, comprehensive and integrated plan that relates the strategic advantages of

the firm with the opportunities of the environment. For example, entering the car

financing business in order to enhance the sales is a strategy to achieve the goal of

earning profit on capital employed.

Tactics is an action programme through which strategies are executed. Thus

the purpose of management is to achieve the companys mission, objectives &

strategies.

Management Deals with Internal & External Environment

Management while formulating strategies, studies and analyses both internal

and external environment.

Internal environment consist of organizational structure, finances,

marketing, production and human resources.

External environment consist of STEPIN viz., Social & Cultural, Technical,

Economic, Political, International & Natural (See Fig.1.1)

Management & Environment (Fig 1.1)

Management is concerned with all kinds of resources.Managers manage & utilise allkinds of resources like financial resources, human resources, materials resources etc.,

in the process of achieving their strategies & goals.

HumanResources

Management of Business/ Non Business

organization

Customers / Clients

Machines&

MaterialsResources

FinancialResources

Internal

Environment

External

Environment

Economic

Social

Political

Technical


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NATURE & CHARACTERISTICS OF MANAGEMENT:

As seen above, the production process involves land, labour, capital,

organization and entrepreneurship. So long as these factors remain separated, there

is no possibility for production. Production is the result of their combined efforts.

Thus success of production depends on their effective combination and cooperation.

In todays complex business organization, it has become a difficult and challenging

task to strike an effective balance of harmony of various factors of production. This

calls for a special skill, knowledge and characteristics to seek their fullest cooperation

to achieve the objectives set by an enterprise. Such skills and knowledge is the

management.

Based on vast experience it has been found that the analysis of management

is facilitated by a useful and clear organization of knowledge.

The following are some of the important characteristics of management.

1. It should be stable.

2. It should be applicable to all kinds of organizations.

3. It is transparent.

4. Its approaches are to be clear and goal oriented.

5. It should be simple yet effective.

6. It should be responsive to many external elements like economic,

technological, social, political and ethical factors that affect the areas of

operation.

7. It should have well defined goals, & effective means to accomplish the goals.

8. It should have good planning, organizing, staffing, directing and controlling

functions.

9. It should provide conducive atmosphere of work.

SCOPE OF MANAGEMENT:

The scope of management is very wide. Basically, it refers to three distinctideas. According to Herbison and Myers, management may be understood as

(a) An Economic Resources

(b) A System of Authority

(c) A Class or Elite

Management as An Economic Resources:

Management is one of the factor of production along with land, labour and

capital. In modern organizations, the effective use of the five Ms of Management

(Money, Materials, Manpower, Machinery and Methods or ways of doing things)

depends to a great extent on the quality of management. In other words, how

effectively and economically the five Ms are combined together to produce desiredresults.

Management as a System of Authority:

According to Herbison and Myers, management is the rule-making and rule-

enforcing body. It is bounded together by a web of relationships between superiors

and subordinates, that is, people are bound by authority relationships. Managers

working at top levels enjoy more authority than people working at lower levels. Top

management determines objectives and provides direction to enterprise activities.


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Middle management (departmental heads like work manager, finance manager,

personnel manager etc.) interprets and explains the policies framed by the top

management. The give orders, instructions and decisions downward and carry the

problems and suggestions upward. Lower management is concerned with routine,

day-to-day matters.

Management as A Class or Elite:

Sociologists view management as a distinct class in society having its own

value system. The managerial class has become very important in modern

organizations owing to its contribution to business success. As a separate group, the

term management refers to the group of individuals occupying managerial positions.

All the managers form the chief executive to the first line supervisors are collectively

addressed as Management, which refers to the group.

The management is a must for every organization. The existence of

management ensures proper functioning and running of an enterprise. Management

plans the activities, coordinates and utilizes the available resources effectively is

given by the management. The resources of production are converted into

production or services. The scope of management is not limited only to business

organization, but it is extended to business establishments, hospitals, educational

institutions, government officers, service organizations, security organization,

financial organizations, stores management etc. The nature of functions of

management may differ from one type of organization to another, but all these form

the essence of management.

The management is not limited to only industries, but its scope can be

extended to the following important areas of life.

Developing management

Distribution management

Financial management

Marketing management

Personnel management

Production management

Office management

Transport management

Purchase management

Sales management

Supply chain management

Business management (like Hospital management, Hotel management,

Educational institute management, Stores management etc.)

Management can be applied in any area of business and life. Its scope startsfrom self management to home management and to the management of big office,

industry, organization of a government etc.

FUNCTIONS OF MANAGEMENT:

As indicated earlier, management is the process of planning, organizing, staffing,

directing and controlling the efforts of organization members in utilizing all

resources to achieve organizational goals, objectives and mission. Management is a

process as it operates the activities systematically. The Management Process (Fig. 1.2)


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Management Process (Fig. 1.2)

Functions of management include planning, organising, staffing, directing and

controlling.

Planning:

Planning consists of the activities involved in choosing courses of action to

achieve organizational objective. It is deciding in advance what to do, when to do,

how to do and who will do it, it order to achieve these objectives.

Both long-term and short term plans are necessary to achieve goals. It is

necessary for the management to choose certain assumptions or premises with

regard to external factors that serve as a background for the planning function. Some

companies have adopted the practice of contingency planning in view of growing

difficulty of predicting future environmental conditions. Planning is a part of the

activities of all managers.

Organising:

Organising involves the grouping of jobs into a frame work for

coordination and direction. Formal organizations may be portrayed by use of an

organisation chart. Careful structuring of an organization is beneficial in terms of

clarifying lines of command and eliminating gaps and overlaps.

Once job content is determined, jobs and activities must be grouped to devise

an overall structure. Decisions affecting organizational structure involve values and

goals for both enterprises and individuals.

Organizations are structured based on product, function, geography,

customer and project. The matrix structure has evolved as a result of complex

PLANNINGCompany mission is the basis forplanning. Planning is deciding inadvance what should be done.

Managers think logically to achievegoals.

ORGANISINGOrganising is the process of linking& arranging activities in asequence. It includes allocating

work, authority & resources.

STAFFINGStaffing is acquiring, developing, utilizing &compensating human resources necessarilyto achieve organizational goals. Humanresources help the process of convertinginputs into output & achieving customersatisfaction.

DIRECTINGDirecting involves leading,

influencing & motivating the peopleto perform organizational tasks & toconvert input into output. It includes

Motivation

Leadership

Communication

CONTROLLINGControlling is to make sure that theorganization is moving towards itsmission and objectives.


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environments, markets and technology. It combines both functions and projects.

Organizational culture reflects not only social values and expectations, but also the

unique set of values, beliefs and behaviours that characterize each organisations.

Staffing:

Staffing is planning, organizing, directing and controlling of procurement,

development, compensation, integration and maintenance of people for the purpose

of contributing to individual, organizational and social goals. Thus, building an

effective organizational team requires planning and control of human resources.

This process requires the performance of the functions like job analysis,

human resources planning, recruitment, selection, induction, placement, training,

executive development, wage and salary administration, leadership, teamwork,

motivation, grievance procedure, disciplinary procedure etc.

Once the employee is employed, his development needs are identified

through performance appraisal. Once these needs are identified, the employee will

be trained / developed with the application of on-the-job and off-the-job methods.

Staffing function is also known as human resource management.

Directing (Leading):

The next logical function after completing planning, organizing and staffing

is the execution of plan. The important function of management at any level is

directing the people by motivating, commanding, leading and activating them. The

willing and effective cooperation of employees for the attainment of organizational

goals is possible through direction.

Tapping the maximum potentialities of the people is possible through

motivation and command. Thus, direction is an important managerial function in

securing employees contribution. Coordination deals with the task of blending

efforts in order to ensure successful attainment of organizational objectives.

Controlling:

After planning, organizing, staffing and directing the various activities, the

performance is to be verified in order to know whether the activities are performed

in conformity with the plans and objectives or not. Controlling also involves

checking, verifying and comparing of actual performance with the plans,

identification of deviations, if any and correcting of identified deviations. Thus

actions and operations are adjusted to predetermined plans and standards through

control.

The purpose of control is to ensure the effective operation of an organization

by focusing on all resources human, material, finance and machines. Financialcontrol is attained through a number of means viz. financial statements interpreted

through ratio analysis and budgets.

MANAGERIAL SKILLS:

According to Robert L. Katz, there are three types of managerial skills viz.

technical skills, human skills and conceptual skills. Fig 1.3 presents the managerial

skills.


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Managerial Skills at Different Levels (Fig 1.3)

Top Level Managers(More Conceptual Skills)

Middle Level Managers(More Human Skills)

Lower Level Managers(More Technical Skills)

Conceptual Skills:

Conceptual skills include the ability to draw the total, integrated,

comprehensive and the macro view of the company, situations and the ability to

develop solutions for the probable problems and challenges. Top level managersshould possess more conceptual skills compared to those of lower level managers.

Human Skills:

Human skills include the ability to work with people tactfully, interpersonal,

proficiency, ability to build, maintain and work in teams and create an open

environment. Managers at all levels should possess these skills.

Technical Skills:

Technical skills are the proficiency in working with machines, tools and

techniques in human resource management, financial management, marketing

management and production management, managers at all levels should possesstechnical skills. Those at the lower level should possess more technical skills whereas

managers at the top level possess less technical skills compared to those at middle

and lower levels.

MANAGEMENT as a Science or Art ?

What is a Science ?

Science is a body of knowledge developed systematically, based on

observations, measurement, experimentation and drawing inferences based on

data. The knowledge can be verified through cause-effect relationship. The

knowledge provides principles, theory and laws.

Management satisfies the characteristics of science like:

Body of knowledge is developed systematically. Management knowledge is

developed through a number of systems like input-output system,

organizational system, functional system etc.

Management knowledge is developed through observations, measurement

and experimentation.

Inferences are drawn based on data analysis.

ConceptualSkills

HumanSkills

TechnicalSk

ills


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Management is a developing science. However management cannot be equated with

exact sciences like physics and chemistry. Most of the managerial activities like

decision-making, planning, organizing and directing cannot be an exact science.

What is an Art ?

Art is understanding how a particular activity can be done. Art can be acquired by

conscious effort and practice. Management is getting things done by and through

other people. They have to continuously analyse the environment and formulate the

plans and strategies. They have to modify the strategies based on environmental

changes. The principles of management and theories of management cannot be

implemented as learnt, in the real world. They are to be applied after making

necessary modifications based on the real life situations.

Thus, management is both a science and an art as it acquired the

characteristics of both.

Is Management a Profession ?

Any occupation to be called a profession should satisfy the following:

a) Body of knowledge: Management knowledge is developed systematically &

scientifically based on research studies, experiments, experiences and

observations. Further, management literature is continuously developed by

researchers and practitioners.

b) Development & updating the knowledge: Management knowledge has been

developing continuously. Managers should update their knowledge by learning

and acquiring the latest developments through training, executive development

and formal study.

c) Professional Journals: There should be professional journals to publish the

findings of research studies. There are a number of professional journals all over

the world to publish the findings of research studies and latest developments inmanagement: Harvard Business Review, Vikalpa, Decision, Indian Management

& Indian Journal of Industrial Relations.

d) Professional Associations: There should be professional associations in order to

monitor and enable professional development. Further, they implement the code

of conduct. Management professional associations in India include: All India

Management Association (AIMA), National Institute of Personal Management,

Institute of Chartered Accountants of India etc.

e) Code of Conduct: The professionals should behave ethically while discharging

their duties. AIMA, National Institute of Personnel Management, Institute of

Chartered Accountants of India and other Professional organisations formulate

the code of conduct.f) Specialised Educational Qualifications: There should be specialized educational

qualifications for employment for professional jobs. Specialized educational

institutions are established to impart specialized education. Indian Institutes of

Management and Departments of Management in the Universities are

established to provide specialized management education leading to Post-

graduate Diploma in Management (PGDM) and Master of Business Management

(MBA) degree.


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Management satisfies all the characteristics of a profession. Therefore management is

a profession like medicine and law.

Management & Administration

Different writers and management thinkers view management and

administration differently

There is no unanimity among the writes regarding these two concepts.

According to one section of writers, administration involves policy making,

formulation of vision, mission, objectives and strategies. As such, administration is

the function of the top level management. Further, administration decides the

organizational structure and prepares the organizational plans.

Management involves executing the plans and strategies and carrying out

various activities determined by the administration. It directs and controls the

subordinates. Thus management is the function of lower level people in the

company.

The second view has been advocated by E.F.L. Brech According to EFL Brech

management is a comprehensive and integrated term. Management includes

planning, organizing, directing and controlling. According to him, management can

be classified into two categories viz. administrative management and operative

management.

Administrative Management: It represents the top level management pertaining

thinking and planning functions. Administrative management performs the

functions of formulation of vision, mission and strategies. It includes board of

directors, managing director, general managers and chief managers.

Operative Management: It represents the lower level management covering

execution and implementation functions. It performs the functions of execution,

directing and controlling which involves the contribution of middle level managersand lower level managers.

The third view has been coined by Perter F. Drucker.According to him the

term administration is applicable to non-profit organizations like government

organizations, service-oriented hospitals and educational institutions, military,

churches, temples etc. The main activity of administration is planning, organizing,

directing, controlling and rendering services. Thus, governance of non-profit

organizations is called administration. Governance of business organizations is

referred to as management. Thus, management is concerned with business

organizations and profit-oriented organizations. It is measured by the efficiency in

profit-making and administration is measured by efficiency in rendering services.

ROLES OF MANAGEMENT:

Managers in any organization play variety of roles responding to a particular

situation. They perform different roles as shown in the figure. As can be seen

from the figure, formal authority gives rise to three inter-personal roles and three

informational roles. The two sets of roles enable the manager to play the four

decisional roles.


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Roles of a Manager or Managerial Roles (Fig. 1.4)

INTERPERSONAL ROLES:

The important interpersonal roles of managers are:

a)

Figurehead Role: Managers perform the duties of a ceremonial nature as head ofthe organization, a strategic business unit or department. Duties of interpersonal

roles include routine, involving little serious communication and less important

decisions. However, they are important for the smooth functioning of an

organization or department.

b) Leader Role: The manager, in charge of the organization / department

coordinates the work of others and leads his subordinates. Formal authority

provides greater potential power to exercise and get the things done.

c) Liaison Role: As the leader of the organization or unit, the manager has to

perform the functions of motivation, communication, encouraging team spirit

and the like. Further, he has to coordinate the activities of all his subordinates,

which involves the activity of liaison.

INFORMATIONAL ROLES:

Manager emerges as the nerve centre of his organization / department in

view of his interpersonal links with his subordinates, peers, superiors and outsiders.

Therefore, the manager has to play the informational role effectively to let the

information flow continuously from one corner of the organization to other corner.

The information roles of a manager include:

FORMAL AUTHORITY&

STATUS

INTERPERSONAL ROLES

Figurehead

Leader

Liaison

INFORMATIONAL ROLES

Monitor

Disseminator

Spokesman

DECISIONAL ROLES

Entrepreneur

Disturbance Handler

Resource Allocator

Negotiator


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a) Monitors Role: As a result of the network of contacts, the manager gets the

information by scanning his environment, subordinates, peers and superiors.

Managers mostly collect information in verbal form often as gossip, hearsay

(word of mouth), speculation and through grapevine channels.

b) Disseminators Role: The manager disseminates the information which he

collects from different sources and through various means. He passes some of the

privileged information directly to his subordinates, who otherwise have no

access to it. The manger plays an important role in disseminating the information

to his subordinates, when they dont have contact with one another.

c) Spokesmans Role: Some insiders and / or outsiders control the unit /

department or the organization. The manager has to keep them informed about

the developments in his unit. He has to keep his superior informed of every

development in his unit, who in turn inform the insiders and outsiders. Directors

and shareholders must be informed about financial performance. Customers

must be informed about the new product developments, quality maintenance,

government officials about implementation of law etc.

DECISIONAL ROLES:

Information is an important and basic input to decision-making. The

managers play a crucial role in decision making system of the unit. Only the manager

can commit the department to new courses of action and he has full and current

information to initiate and implement the decisions that determine the departments

or organizational strategy. The decisional roles of the manager are;

a) Entrepreneur Role: As an entrepreneur, the manager is a creator and innovator.

He seeks to improve his department, adapt to the changing environmental

factors. The manager appreciates new ideas and initiates new developmental

projects.

b)

Disturbance Handler Role: Entrepreneurial role describes the manager as thevoluntary initiator of change; the disturbance handler role presents the manager

as the involuntarily responding to pressures. Pressures of the situation are severe

and highly demand the attention of the manager and as such the manager cannot

ignore the situation. For example: workers strike, declining sales, bankruptcy of

a major customer etc.

c) Resource Allocator: The Managers of the organization are responsible for

allocating human, physical and monetary resources required by the various

departments. Deciding where the organization will expand its efforts and what

resources will be expanded etc.

d) Negotiators Role: Managers spend considerable time in the task of negotiations.

He negotiates with the subordinates for improved commitment and loyalty, withthe peers for cooperation, coordination and integration, with workers and their

unions regarding conditions of employment, commitment, productivity and with

the government about providing facilities for business expansion etc. These

negotiations are an integral part of the managers job for only he has authority to

commit organizational resources and is the nerve centre of information.

Though the different roles of the manager are discussed separately for convenience,

the manager has to perform these roles simultaneously by integrating one with the


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other. Thus, the major role of the manager is integrating all the roles while playing

the managerial role or performing his tasks. As a strategist, the manager has to

integrate all the roles in decision making and performing his tasks.

LEVELS OF MANAGEMENT or

DIFFERENT LEVELS OF MANAGEMENT:

Management includes all the managers of a company. Management is

classified as managers at different levels viz. top level managers, middle level

managers and lower level managers.

Different Management Levels (Fig. 1.5)

Managing Director / President

Top LevelManagers

General Manager /Vice - President

General Manager /Vice - President

Middle LevelManagers

ManagerProduction

ManagerFinance

ManagerHuman

Resource

ManagerMarketing

ManagerResearch &

Development

Lower LevelManagers

ManagerMaterials

ManagerScheduling

ManagerQualityControl

ManagerAssembly

Top Level Managers:Top level managers are the senior level executives of the company including

the Managing Directors or President, Vice Presidents, General Managers, Chief

Managers of the company, etc. Top level management particularly the Managing

Director of President of the company is responsible for the overall management and

performance of the company.

Top level management formulates objectives, polices and corporate level

strategies of the company. Top level managers lead and motivate the middle level

managers. They coordinate the activities of middle level managers.

Middle Level Managers:

Middle level managers are responsible for coordination of the activities ofvarious departments. Middle level managers include managers of various

departments like Production department, Marketing department, Finance

department, Human Resource Department and Research & Development

department. These managers are responsible for the success or failure of their

departments.


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Middle level managers formulate the objectives, goals and strategies of their

departments based on those of the organization. In addition, middle level managers

lead, motivate and coordinate the activities of the lower-level managers.

Lower Level Managers:

Lower level managers are responsible for the work of the operating staff

working with them. Lower level managers are also called First-Line or First-Level or

Junior Managers. They direct, lead, motivate and coordinate the activities of the

operating employees. These managers mostly supervise the operating employees

while they perform their work. As such, the lower level managers are also called

Supervisors.

FUNCTIONAL AREAS OF MANAGEMENT:

Managers are classified based on the functional areas of management. The

functional areas of management include: production, marketing, human resource,

finance, research & development. The functional managers include: production

manager, marketing manager, finance manager, human resource manager and

manager-research and development. Functional managers mostly perform the

activities of their respective functional area. As such, they fail to see the total

company.

General Managers view the total company in an integrated and

comprehensive approach. They also see the total of the sub-units and subsidiary

companies besides integrating and coordinating the activities of the production

department, marketing department, finance department and human resources

department, General Managers formulate strategies at the corporate and the business

unit level.

DEVELOPMENT OF MANAGEMENT THOUGHT:The principles of management have their impact on the practice of

management. The nature of management principles include: universal applicability,

dynamism, relative but not absolute limits due to human behavior and the like. A

number of practitioners, thinkers and academicians of management have contributed

to the formation and development of management principles, thought and

approaches.

Management has emerged as a powerful and innovative force on which

todays society depends for material support from an unrecognized situation in the

past one or two centuries. 17th and 19th centuries had seen Industrial Revolution.

Lots of inventions and new technologies had emerged. The importance of

management was focused. Adam Smiths Division of labour concept was evolved.Importance of planning was identified. But management as a separate field of study

had emerged only during early 20th century when new industrial era began. Business

organisations had a state shift from ownership towards to joint stock companies. As

an answer to the problem like inefficient systems, inefficiency of labour and

discrepancy in wage payment, management has been recognized as a separate and

important field of study. Subsequently, management has evolved as a scientific

discipline of study and practice.


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The study of theories is more important as they guide management decisions;

they shape our organization, make us aware of the business environment and are a

source of new ideas.

The evolution of management can be divided into two parts Early

Management Approach and Modern management approach.

(A)EARLY MANAGEMENT APPROACHES:

History of the management is as old as a man. Evidence of well organized

principle of management can be seen in ancient Greece and India. Those Kings used

the concepts of management like planning, organizing, leading and controlling the

various activities.

The process of early management approaches are

Psychological Development

Scientific Management Theory Classical Theories

Administrative Management

Human Relations Approach Neo-Classical Theory or Approach

Psychological Development (Before 17th Century):

In olden days when there was no experience and knowledge of business, they

had to depend upon their inborn abilities. This gave rise to management that was

totally based on psychological process. As a result, people were having universal

belief that managers are born and cannot be made such as artists, directors, poets,

kings etc.

Scientific Management Theory (18th 19th Century):

The forerunners of Scientific Management theory are Robert Owen, Charles

Babbage and F.W. Taylor.

ROBERT OWEN

Robert Owen, who was the manager of different cotton textile mills between

1800 and 1828, was the first person to pay attention to labour welfare. He suggested

a change in the attitude of industrialists towards workers. He worked upto his

maximum possible extent for the best of working conditions of workers and thereby

tried to win over their confidence. He stated that men should not be treated as

secondary & inferior to machines.

CHARLES BABBAGE

Among some scientists who thought of making improvements in the

management by observing the scientific techniques after Robert Owen was CharlesBabbage from 1928-1839.

Charles Babbage, a leading British mathematician at Cambridge University.

He studied the working conditions of factories in England and France and observed

that most of the factory class used to work on the basis of estimates and imagination.

They were tradition oriented rather than scientific-minded. Two pioneering works of

Babbage are The Differential Engine and On the Economy of Machinery and

Manufacturers. He stated that the methods of science and mathematics could be

applied to the solution of the factorys problems.


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Contribution of Babbage

Babbage stressed that good machines and efficient workers do not inevitably

ensure success in business. Good management that directs and controls machines

& workers is the most crucial element in successful business.

He advocated, like Adam Smith, the principle of division of labour. He also

suggested the use of time study techniques.

Babbage conceived an analytical machine as far back as 1833 which was a

forerunner of todays digital computer. So he was a visionary much ahead of

time.

He considered all aspects of contemporary management thinking mutuality of

interest between employees and employer, production control, incentive pay,

quality control, wage and salary administration, profit sharing, operations

research, preventive maintenance and research and development.

It is rightly stated He wrote a premiere of management before the world is able to

read it and he invented the computer before its time.

Mc Farland indicates: To Babbage goes the credit for advocating in relation

to industrial problems in fundamental thinking which preceded the formulation of

science of management. Hence the background for the formulation of the science of

management was provided initially by Charles Babbage.

FREDERICK WINSLOW TAYLOR (F.W. Taylor)

F.W. Taylor, known popularly as the father of scientific management and a

classicist in management theory, was the first person who insisted on the

introduction of scientific methods in management. He made for the first time a

systematic study of management and evolved an orderly set of principles to replace

the trial and error methods then in vogue.

Taylor made a humble beginning by joining as an apprentice in a small

machine-making shop in Philadelphia in the 1870s. Later he became a machinist in1878 at the Midvale Steel Works in Philadelphia (USA). Afterwards he rose to the

position of a machinist foreman.

He observed that workers were not enthusiastic and were doing as little as

possible, just adequate to maintain their job. Instead of becoming angry at the

outlook of workers, Taylor sympathized with them.

He wrote when a naturally energetic man works for a few days besides a

lazy one, the logic of the situation is unanswerable: why should I work hard when

that lazy fellow gets the same pay that I do and does only half as much work?

Taylor formed opinions on the basis of his observations. There was an

uncompromising nature on his part and he never tried to satisfy his opponents. He

was a man of firm convictions. After leaving the Midvale Factory, he joinedBethleham Steel Company; wherein he introduced scientific management. But there

was strong opposition from all the managers because of his uncompromising nature

and this led to the termination of his services abruptly. After leaving Bethleham in

1901, he wrote his pioneering work Shop Management. Besides this, he wrote

several other books and among them the pioneering work was Principles and

Methods of Scientific Management (1911).


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PRINCIPLES OF SCIENTIFIC MANAGEMENT:

The contributions of scientific management evolve into principles. These

principles are called principles of scientific management. They include:

1) Time & Motion Study:

Workers were performing their work haphazardly before the era of scientific

management. Taylor observed that a number of movements of the workers at the

work place were unnecessary and consequently they were taking more time to do the

job than necessary.

Hence, he proposed time and motion study. This study involves the

following aspects:

Observing the various motions (movements) of the worker at the work place.

Identifying the necessary & unnecessary movements in carrying out the work.

Elimination of unnecessary movements.

Observing the time required for each of the necessary movements with the help

of a stop watch.

Developing shorter and fewer motions.

Standardizing the motions and time.

Thus, this study developed the best way of doing the job, replacing the old rules of

thumb knowledge of the workers.

2) Science, But not Rule of the Thumb:

Scientific Management (SM) suggests doing the work systematically,

determining the work clearly and sequentially, and standardization of motions and

time for each motion and allotment of fair work to each worker. Thus, SM eliminated

the rule of the thumb at the workplace.

3) Differential Payment:

Taylor suggested differential piece rate system. He fixed the standard level of

production. Those employees who produce less than the standard production

received low piece rate and employees produced above the standard productionreceived higher piece rate. Differential piece rates are introduced in order to motivate

the employees to produce more than the standard level and enhance productivity.

4) Group Harmony:

Taylor emphasized upon group harmony which can be achieved through

satisfying the needs of the group members, eliminating the dissatisfaction and

frustration of group members, maintaining the sound interpersonal relations among

the group members and involving them in various group activities.

5) Cooperation Between Workers & Management:

Taylor advocated sound employee-employer relations which should result in

co-operation between workers and the management. Sound employee-employer

relations can be achieved in the following ways: Management should understand the workers needs & take steps to satisfy them.

Workers should understand the organisational requirements like increasing

productivity, sales, profitability etc. and maximizing their contribution.

6) Methods Study:

Taylor believed that a methodological and systematic movement of materials

ensures fast movement of materials in the factory, avoidance of unnecessary

transportation of material from one stage to another stage of production, reduction of


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distance from one machine to another machine, reduction of the transportation time

etc.

7) Scientific Selection and Training:

Taylor suggested the scientific selection of employees based on job analysis

and using various selection tests. He also suggested providing training and

development facilities to all the employees based on training needs. This process

helps the organization to exploit the employers potentialities and facilities for

organisational success.

8) Standardisation:

Taylor advocated the importance of standardization tools, instruments,

working hours, working conditions, quality of work, cost of production etc.

9) Separation of Planning from Execution:

Taylor advocated separation of the planning function from the execution

function. i.e. supervisors perform planning function whereas workers perform

execution functions.

Thus scientific management was confined to management at the shop level,

he indicated the possibility and significance of the scientific analysis of the various

aspects of management.

Criticisms of Taylors Contributions:

It is based on the following grounds:

The consideration of the word Scientific before Management was criticised

since what actually is meant by scientific management is nothing but an

approach to management.

His principles were mostly confined to production management. He ignored

other functional areas of management like finance, marketing, personnel and

accounting. His functional foremanship violates the principle of unity of command.

Trade unionists criticized Taylors principles as the means to exploit workers due

to the reason that wages of the workers were not increased in direct proportion to

the increase in productivity.

Despite the criticism leveled against Taylors SM, the techniques advocated

by him were further refined by his followers like Henry L. Gantt, Frank B. Lillian and

M. Gilbreth.

HENRY L. GANTT

Henry L. Gantt (1861-1919) had worked on several projects jointly with F.W.

Taylor. He had modified Taylors incentive system when he worked independently.He abandoned the differential rate system as having too little motivational impact,

introduced 50% bonus to those workers who could complete a days work. He also

introduced bonus to the superiors for each worker who could complete a days work

and additional bonus, if all the workers reached it, with a view to enable the

supervisors to train their workers to do a better job. Gnatt also built upon Owens

idea of rating an employees work publicly.


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GILBRETHS

Frank B. Gilreth (1868-1924) & Lillian M. Gilbreth (1878-1972) made their

contributions to the scientific management movement as a husband and wife team.

Although both of them collaborated on fatigue and motion studies, Lillian also

focused on ways of promoting the individual workers welfare. According to her, the

ultimate aim of scientific management was to help workers reach their full potential

as human beings. According to them, a worker would do his/her present job, prepare

for the next highest job and train his/her successor, all at the same time. Thus every

worker would always be a doer, a learner and a teacher.

ADMINISTRATIVE MANAGEMENT:

Henry Fayol was a major contributor to administrative management

approach.

HENRY FAYOL

H.F. started his career as a mining engineer in 1860 in a colliery company in

Fracne. In 1866, he was appointed as the manager of the Collieries and remained in

this position for 22 years. In 1888, when the companys financial position was critical,

he was appointed as the General Manager. He held this position with his expertise

for 30 years and retired in 1918, at a time when the company had become one of the

biggest coal companies in France. His observations on the principles of general

management first appeared in 1916 in French under the title Administration

Industriella et Generale, and this was translated in into English in 1949 under the title

General and Industrial Administration.

This book contains two parts: the first part is concerned with the theory of

administration and the second part with the discussion on training for

administration.

Fayol felt that the activities of business could be divided into six groups; (a)Technical; (b) Commercial; (c) Financial; (d) Security; (e) Accounting and (f)

Managerial.

Fayol felt that the first five were well known and as a result, devoted most of

his books to an analysis of the sixth. He classified the managerial group into six

sub-groups viz., forecasting, planning, organizing, co-ordinating, commanding

and controlling. He stated the qualities required by managers to be physical,

mental, moral, educational and technical. As a matter of fact, he emphasized that as

one goes higher up in the levels of management, the administrative knowledge and

skills become relatively more and more important, and technical knowledge and skill

less important.

Henry Fayols Principles of Management:

Fayol listed out fourteen principles of management. They are:

1) DIVISION OF LABOUR: The more people specialize, the more efficiently they

can perform their work. This principle is symbolised by the modern assembly

line.

2) AUTHORITY: Managers must give orders so that they can get things done.

While their formal authority gives them the right to command, managers will not


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always compel obedience unless they have personal authority (such as relevant

expertise) as well.

3) DISCIPINE: Members in an organisation need to respect the rules and

agreements that govern the organization. To Fayol, discipline results from good

leadership at all levels of the organization, fair agreements (such as provision for

rewarding superior performance) & judiciously enforced penalties for infractions.

4) UNITY OF COMMAND: Each employee must receive instructions from only

one person. Fayol believed that when an employee reported to more than one

manger, conflicts in instructions & confusion of authority would ultimately

result.

5) UNITY OF DIRECTION: Those operations within the organisation that have the

same objective should be directed by only one manager using one plan. For

example, the personnel department (HR dept.) in a company should not have

two directors, each with a different hiring policy.

6) SUBORDINATION OF INDIVIDUAL INTEREST TO THE COMMON GOAL:

In any undertaking, the interest of employees should not take superiority over

the interests of the organization as a whole.

7) REMUNERATION: Compensation for work done should be fair to both

employees and employers.

8) CENTRALISATION: Decreasing the role of subordinates in decision making is

centralization, increasing their role is decentralization. Fayol believed that

managers should retain final responsibility, but should at the same time give

their subordinates enough authority to do their jobs properly. The problem is to

find the proper degree of centralisation in each case.

9) SCALAR CHAIN: The graded chain of authority from top to bottom through

which all communications flow is termed as scalar chain. However, if

following the chain creates communication delays, cross-communication

(Gangplank Principle) can be permitted, if agreed to by all parties and superiorsare kept informed.

10)ORDER: Materials and people should be in the right place at the right time.

People in particular, should be in the jobs or positions in which they are most

suited.

11)EQUITY: Managers should be both friendly and fair to their subordinates.

12)STABILITY OF STAFF: A high employee turnover rate undermines the efficient

functioning of an organisation.

13)INITIATIVE: Subordinates should be given the freedom to conceive and carry

out their plans, even though some mistakes may result.

14)ESPRIT DE CORPS (Team Work): This principle states Union is Strength.

Promoting team spirit will give the organisation a sense of unity. To Fayol, evensmall factors could help to develop the spirit. He suggested, for Example, the use

of verbal communication instead of formal, written communication whenever

possible.

It may be stated that F.W. Taylor and Henry Fayol together gave an almost

complete theory of management. Taylor studied with utmost care the lowest level of

industrial hierarchy whereas Fayol, on the other hand, worked from the top of the

industrial hierarchy downward.


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The universality of the principles of management could be understood

throughout the treatise of Fayol. He should be regarded as the father of modern

management theory since he was first to emphasise that better management is not

merely a question of improving the output of labour, but of planning of the

subordinate units of an organization.

Criticism of Fayols Principles:

The contributions of H.F. were criticised as hereunder.

The principles of unity of command and unity of direction are unnecessary in

modern private organisations. Most of the private organisations after the

announcement of liberalisations, privatisation and globalisation are dynamic in

order to meet the customers needs before the customers identify or realise them.

The dynamic organisations are team-based, loosely structured, flat organizations

and they change their structures based on strategy (structure follows the strategy

principle) etc. Orders and commands flow through different directions in teams

and loosely structured organisations. Similarly, direction also flows through

various directions in modern organisations. Thus, these two principles are not

applicable in modern organisations.

The principal of scalar chain is also not applicable in modern organisations as the

information requests for carrying out the work flow in different lines.

Many modern organisations implemented Business Process Reengineering

(BPRE) and Enterprise Resources Planning (ERP). These two techniques are

based on team work and need the employees with multiple skill sets as the team

members are required to carry out multiple activities. As such, the principles of

division of labour and specialization are not applicable to those organizations

which implemented BPRE and ERP.

Fayols principles indicate that organizations are a closed system. But most of the

organizations today are open systems. As such, Fayols principles are notapplicable to the organisations based on open systems.

Fayols principles like unity of command, unity of direction, division of labour,

specialisation and span of management are applicable to tall and mechanistic

organisations. Mechanistic organizations are insensitive to employees social &

psychological needs. Further, they do not use the employees skills and

potentialities to the maximum extent.

MAX WEBER

Max Weber (1864-1920) felt the need for controlled regulations particularly in

large organizations where thousands of people are employed and developed a

theory of bureaucratic management, which emphasizes on a strictly definedhierarchy governed by clearly defined regulations and lines of authority. For Weber,

the ideal organization was a bureaucracy. Today, we view bureaucracies as vast,

impersonal organizations that put impersonal efficiency ahead of human needs. But

Weber sought to improve the performance of socially significant organizations by

making their operations productive.


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HUMAN RELATIONS APPROACH / NEO-CLASSICAL APPROACH:

Mary Parker and Chester I Barnard developed the theories on the basic

framework of classical schools, but they introduced many new elements in the area

of human relations and organizational structure.

MARY PARKER FOLLETT

M.P.F. (1868-1933) was convinced that labour and management shared a

common purpose as members of the same organization. But she believed that the

distinction between superiors (Order gives) and subordinates (order takers) hindered

natural partnership. She developed a behavioural model of organizational control. In

her model, control was sponsored by and oriented towards the group. Self control

was exercised by both individuals and groups, with the result being shared control

or power.

CHESTER I BARNARD

According to Barnard (1886-1961), people work together to achieve

organizational goals as individually they are not able to accomplish and at the same

time they must also satisfy their individual goals. The central thesis of Barnard is that

an organization should balance its goals with the needs and aims of employees for its

efficient functioning and survival. He also stressed the use of informal groups

effectively, even when they work at cross purposes to achieve management

objectives, some time, in order to ensure organizational survival. He believed that

executives had a duty to install a sense of moral purpose in their employees. He also

stressed considerable attention on the role of individual worker as as the basic

strategic factor in an organization.

ELTON MAYO

The human element was recognized even in the Scientific ManagementSchool. The human relations approach is the outcome of reactions of classical

theorists like Mary Parker & Chester I Barnard.

Elton Mayo and his associates pointed out that the techniques of scientific

management are not adequate and they do not contribute to individual and

organizational goals.

The essence of human relations approach is that workers should be treated as

human beings but not as mere factors of production. Workers needs, feelings,

attitudes, values and desires are extremely important. The theme of human relations

approach is that

(a) Organisational situation should be viewed in social terms as well as in

economic and technical terms and(b) The social process of group behavior can be understood in terms of the

clinical method analogous to the doctors diagnosis of the human organism.

HAWTHORNE EXPERIMENTS

An intensive and systematic analysis of human factors was made in the form

of Hawthorne Experiments. Elton Mayo is generally recognized as the father of

Human Relations Approach although a number of professors of the Harvard

Business Schools and managers of Hawthorne Plant of Western Electric Company,


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USA where the experiments were conducted between 1924 and 1933 had been

associated with him. The series of experiments conducted may be classified as:

1) Phase 1 Illumination Experiments

2) Phase 2 Relay Assembly Test Group

3) Phase 3 Interviewing Programme

4) Phase 4 The Bank Wiring Observation Room Experiment (1931-32)

Phase 1 Illumination Experiments

This experiment was conducted to know the impact of illumination on

productivity. The experiment involved the prolonged observation of two groups of

employees making telephone relays. The intensity of light under which one group

worked (test group) systematically varied while the light was held constant for the

second group (control group). The productivity of the test group and control group

increased. The researchers conclude that some other variables were contaminating

the effects of the lights changes.

Phase 2 Relay Assembly Test Group

A small group of workers was placed in a separate room and a number of

variables were altered like wages were increased, rest periods of varying lengths

were introduced, the workday and work week were shortened. The supervisors, who

acted as observers, also allowed the groups to choose their own rest periods and

members of their own groups and to involve in decision making regarding suggested

changes. Performance tended to increase over the period but it also increased and

decreased erratically.

Phase 3 Interviewing Programme

Mayo initiated a three year long interviewing programme in 1828, covering

more than 21,000 employees to find out the causes for increased productivity. Theemphasis of this phase was on human relations rather than on working conditions.

This programme initially proved to be useless as employees often gave stereotyped

responses. This led the interviewers towards asking indirect questions. Then the

employees began to air their feelings freely. The point demonstrated by this

interviewing programme is central to the human relations approach. And for the first

time, the importance of the informal work group is recognized. Then, the bank

wiring room experiment was set up in order to find out how informal work groups

operate.

Phase 4 The Bank Wiring Observation Room Experiment (1931-32)

In this experiment, 14 male workers were formed into a work group andintensively observed for seven months in the bank wiring room, engaged in the

assembly of terminal banks for the use in telephone exchanges. The employees were

paid individual wages and a bonus based on group effort. It was expected that

highly efficient worker would bring pressure on others for increased output and high

bonus. However, the expected results did not come out and indeed the group

developed specific mechanisms to protect themselves based on certain sentiments:

The rate buster sentiment : dont turn out too much work.

The chiseler sentiment : dont turn out too little work.


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The squealer sentiment : dont tell superiors anything that would

harm an associate

The officious sentiment : dont act too officious in performing

duties, conform rather to work group norms.

Work group norms, beliefs, sentiments had a greater impact in influencing

individual behavior than did the monetary incentives offered by the management.

Thus, the Hawthorne Experiments indicated that employees were not only economic

beings but social and psychological beings as well.

The researchers concluded that employees would work better had they

believed that the management was concerned about their welfare and supervisors

paid special attention to them. This phenomenon (subsequently labeled the

Hawthorne effect), has remained quite controversial to this day.

The concept social man, according to Mayo, motivated by social needs,

wanting rewarding, on-the-job relationships and responding more to work-group

pressures than to management control-was necessary to complement the old concept

of rational man motivated by personal economic needs.

Contributions of the Human Relations Approach:

There is a departure from the scientific management approach regarding the

influence of engineering factors for increase in productivity. Mayo had rediscovered

Robert Owens century-old dictum that a true concern for workers, those vital

machines, paid dividends.

This approach suggested that the democratic style of supervision yields more

benefits than task-centered leadership by informal organization than by formal

organization.

In addition, the researchers recognized the significance of a managers style and

thereby stressed on management training.

More attention was paid on teaching management skills rather than technicalskills to people.

Finally their work led to a new interest in group dynamics, group process and

group reward rather than individual worker.

Another contribution of human relations approach was that business

organisation is more than the logical arrangement of work functions and social

factors should also be considered in designing an organization structure. This

school is characterized by a genuine interest in organic (humanistic) structure

rather than mechanistic structure.

Workers output is determined by the group norms but not by the time study and

motion study.

Workers are motivated not only by the money but also by non-financial rewards.

Human Relations: Definition

Human relation pertains to motivating people in organisations in order to develop

teamwork which effectively fulfills their needs and leads to achieving organizational

goals. Thus human relations:

Strive to create a positive & conducive work environment, focuses on people.

Has the ultimate goal of increase in productivity and


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Seeks to build human cooperation towards achievement of organizational

goals.

Criticisms of the Human Relations Approach:

1. Scientific validity: Although the Hawthorne Experiments profoundly influences

the managers in managing their employees, the studies had many weaknesses of

design, analysis and interpretation. Whether Mayo and his colleagues

conclusions are consistent with their data is still subject of lively debate and

considerable confusion. These studies had a clinical bias as they discounted

theory and stressed on radical empiricism. Most of the conclusions are not

supported by adequate scientific evidence.

2. Shortsighted: The following points confirm the shortsightedness of this

approach; (a) it lacks adequate focus on the work; (b) human relation tend to

neglect economic dimensions of work satisfaction and (c) human relations

research is concerned with only operative employees but not managerial and

supervisory personnel.

3. Overcome with happiness: The Hawthorne studies suggested that happy

employees would be productive employees. But studies have failed to establish a

positive correlationship between happiness and productivity.

4. The Mystery surrounding group decision-making: Research evidence on the

superiority of group decision-making to individual decision-making is

conflicting and inconclusive. The entire thinking of group decision-making is

mystical.

5. Conflict: The human religionists failed to recognise positive aspects of conflict

like creative force in society. They believed that conflict is always bad and should

be minimized.

6. Anti-Individualist: The human relations movement is anti-individualist. The

concept of individualism and individual behavior which is predominant inorganizational settings is overridden by the concept of group decision-making

and group behavior. Human relations approach failed to describe completely

individuals in the work place.

7. Total Work Environment is not considered: Work environment comprises of

organizational structure, its culture and climate, labour-management relations,

socials environment etc. But the human relations approach considered only social

environment as the total work environment.

MODERN MANAGEMENT APPROACH:

Systems Approach to Management:

A system is a set of interrelated but separate parts working towards acommon purpose. The arrangement of elements must be orderly and there must be

proper communication facilitating interaction between the elements and finally this

interaction should lead to achieve a common goal.

Thus, system approach to management views the organization as a unified,

purposeful system composed of interrelated parts. Hence, managers have to deal

with the organization as a whole rather than dealing separately with various

segments of an organization. This approach also gives the managers to see the

organization as a whole and as a part of the larger external environment. Systems


26/27



theory reveals to us that the activity of any segment of an organization, affects in

different degree, the activity of every other segment.

Systems-oriented managers would make decision only they have identified

impact of these decisions on all other departments and the entire organization. The

essence of the systems approach is that each manager cannot function in isolation

and within his organizational boundary of authority and responsibility of the

traditional organizational chart. They must intertwine their departments and

employees and also with other organisations.

Key Concepts of Systems Approach:

1) Subsystem: Subsystems are those parts which make up the whole system.

Each system in turn may be a subsystem of a still large system. Thus, a

department is a subsystem of a factory, which is a subsystem of a firm, which

is a subsystem of a national economy, which is a subsystem of the world

economic system.

2) Synergy: Synergy is the situation in which the whole is greater than the sum

of its parts. In organizational terms, synergy means that departments that

interact co-operatively are more productive than they would be, if they

operated in isolations.

3) Open system: It is a system that interacts with its environment. All

organizations interact with their environment, but the extent to which they do

so varies.

4) Closed System: It is a system that does not interact with its environment.

5) System Boundary: It is the boundary that separates each system from tis

environment. It is rigid in a closed system while flexible in an open system.

6) Flows: A system has flows of information, materials and energy. These enter

the system from the environment as inputs (like raw materials), undergo

transformation process within the system (like production process) and existin the system as outputs (like products / services).

7) Feedback: It is the part of system control in which the results of actions are

returned to the individual, allowing work procedures to be analyzed and

corrected.

Systems approach helps the dynamic and interrelated nature of organization to plan

for actions and anticipate consequences and mutual effects. It helps the general

managers to maintain balance among various subsystems and the organization. Thus

a major contribution of the systems approach results from its strong emphasis on the

interrelatedness or mutuality of various subsystems of the organization. Treatment

of the organization as an open system is another contribution of systems approach.

Behavioural Approach or Behavioural Science Approach:

The behavioural approach developed as a natural evolution from the

Hawthorne Experiments. The Hawthorne researchers (Elton Mayo and his Harvard

Colleagues) stressed the importance of emotional elements such as feelings and

sentiments to explain human behavior and performance in organizations.

The behavioural approach applies the knowledge of the behavioural sciences

Psychology, Sociology and Anthropology to managing people. We have seen that

the human relationsists believed that people are social beings who are motivated by


27/27


social interactions and that their job performance will increase when the job gives

them opportunities to socialize.

This approach emphasis scientific research (into various disciplines such as

psychology, sociology, anthropology, economics) as the basis for developing theories

about human behavior in organizations that can be used to develop practical

guidelines for mangers. Maslows, Mc Gregor, Rensis Likert the behavioural scientists

have suggested their own theories. For Example Maslows theory says that human

beings needs will be followed in this order - Physiological Needs, Safety Needs,

Social Needs, Self Esteem or Ego Needs , Actualisation Needs or Self fulfilment

Needs

Quantitative Approach:

Quantitative approach is also known as Management Science Approach

which was developed during Second World War to find solutions to some complex

new problems in warfare. As a result the quantitative approach called Operations

Research (OR) was developed by a team of interdisciplinary member. The

quantitative viewpoint focuses on the use of mathematics, statistics, and information

aids to support managerial decision-making and organizational effectiveness. It has

been evolved into three main branches over the year Management Science,

Operations Management and Management Information System.

Quantitative deals with formulating a mathematical model to simulate a

given problem that includes the feasibilities, constraints, costs of events etc. enabling

the management to take up a logical decision.

Operations Research techniques are widely used in project planning and

control where better benefits have been obtained with its use.

Contingency Approach:

This approach is also called Situational Approach. This approach wasdeveloped by managers, consultants and researchers who tried to apply the concepts

of the major schools to real life situations. They sought to know the causes for the

success of methods in one situation and failure in another situation. Advocates of

this approach answered that results differ because situations differ, as such as

technique that works effectively in one situation will not necessarily work in all

cases. Hence managers have to identify the technique which will best contribute to

the attainment of the managements goal in a particular situation, under particular

circumstances and at a particular time. Classical theorists suggest work implication

for increase in productivity where behavioural scientists suggest job enhancement.

But the manager under contingency approach should find out which method will

work better in that particular situation. This approach builds upon systemsapproach. The composition of a particular situation or system will help to know the

technique best suited to that particular situation or system.

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M&E - CS - Part a- Module 1

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