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Perspective of ManagementPerspective of Management

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Management TheoriesManagement Theories

PrePre--Scientific Management theoriesScientific Management theories

Classical TheoryClassical Theory Behavioural TheoryBehavioural Theory

Modern Management TheoryModern Management Theory

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PrePre--Scientific TheoryScientific Theory

Monumental Examples of management can beMonumental Examples of management can betraced in history.traced in history.

Egyptian, Chinese, Greek, roman civilisationEgyptian, Chinese, Greek, roman civilisationrepresent significant management practices.represent significant management practices. No significant information about the way theseNo significant information about the way these

civilisations were managed.civilisations were managed. In 1494 the technique of double entry bookIn 1494 the technique of double entry book--

keeping was introduced.keeping was introduced. In 1800s the management theories developedIn 1800s the management theories developed

as systematic field of knowledge.as systematic field of knowledge.

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Classical TheoryClassical Theory

Oldest theory of management. Also, called asOldest theory of management. Also, called astraditional theory of management.traditional theory of management.

Classical view point is a perspective onClassical view point is a perspective onmanagement that finds ways to managemanagement that finds ways to managebusiness organisations effectivelybusiness organisations effectively

With increase in size and complexity ofWith increase in size and complexity oforganisations the need for systematic approachorganisations the need for systematic approachto management became inevitable.to management became inevitable.

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Features of Classic theoryFeatures of Classic theory

It includes some of the early works on management which providesIt includes some of the early works on management which providesfoundation to the modern management theory.foundation to the modern management theory.

It attempts to find ways and mean sto increase output of eachIt attempts to find ways and mean sto increase output of eachworker.worker.

Employees economic needs are satisfies through financialEmployees economic needs are satisfies through financialincentives.incentives.

It stresses on formal structure of jobs and work schedules to satisfyIt stresses on formal structure of jobs and work schedules to satisfyindividual and organisational needs.individual and organisational needs.

It views organisations as closed systems which do not interact withIt views organisations as closed systems which do not interact withthe external environment.the external environment.

It develops a set of management principles which are universallyIt develops a set of management principles which are universallyapplicable to all organisations : business and nonapplicable to all organisations : business and non--business.business.

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Behavioural TheoryBehavioural Theory

It is focussed on human relations and attributedIt is focussed on human relations and attributedorganisations success to 1) Organisational goals, and 2.)organisations success to 1) Organisational goals, and 2.)personal needs of human beings.personal needs of human beings.

In behavioural theory, the focus shifted from workplaceIn behavioural theory, the focus shifted from workplaceconditions to human side of the organisation.conditions to human side of the organisation.

Production oriented approach was substituted by peopleProduction oriented approach was substituted by people--oriented approach.oriented approach.

It emphasis on various factors that affect humanIt emphasis on various factors that affect human

behaviour in organisations.behaviour in organisations. It is not always practical to deal with human behaviourIt is not always practical to deal with human behaviour

the way theory suggests because of complex nature ofthe way theory suggests because of complex nature ofhuman beings.human beings.

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Modern Management TheoryModern Management Theory

Management is responsive toManagement is responsive toenvironmental changes.environmental changes.

Business organisation are dynamicBusiness organisation are dynamicinstitutions composed of subinstitutions composed of sub--division.division.

Business firms have multiple objectives.Business firms have multiple objectives.

Management is future oriented (UsingManagement is future oriented (Usingscientific techniques).scientific techniques).

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Contemporary issues inContemporary issues in

managementmanagement Managers of today strive for betterManagers of today strive for better

understanding of the management theory tounderstanding of the management theory to

improve organisational effectiveness andimprove organisational effectiveness andcompete with firms in national and internationalcompete with firms in national and internationalmarkets.markets.

It can be studied under 2 heads:It can be studied under 2 heads:

1.) Contemporary management theory1.) Contemporary management theory

2.) Contemporary management challenges.2.) Contemporary management challenges.

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Contemporary management theoryContemporary management theory

2 theories which have attracted the attention of managers are:2 theories which have attracted the attention of managers are: A) Theory Z It aims at to establish a common set of businessA) Theory Z It aims at to establish a common set of business

practices which will improve the effectiveness of business firms. Itpractices which will improve the effectiveness of business firms. Itcombines the features of American style of Management withcombines the features of American style of Management withJapenese style of management.Japenese style of management.

B) Excellence movement suggests a set of principles which will leadB) Excellence movement suggests a set of principles which will leadto excellent performance. These features are:to excellent performance. These features are:

Getting things done on time.Getting things done on time. Staying close to customerStaying close to customer Maximising productivity through peopleMaximising productivity through people Doing what the company knows best.Doing what the company knows best. Maintaining simple, lean organisational structure.Maintaining simple, lean organisational structure.

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Contemporary managementContemporary management

challengeschallengesChallenges faced by managers today are:Challenges faced by managers today are:

a)a) GlobalisationGlobalisation

b)b) Quality and productivityQuality and productivityc)c) OwnershipOwnership

d)d) EnvironmentEnvironment

e)e) Strategy formulationStrategy formulation

f)f) Ethics and social responsibilityEthics and social responsibility

g)g) Workforce diversityWorkforce diversity

h)h) ChangeChange

i)i) Information technologyInformation technology

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Challenges for InternationalChallenges for International

ManagementManagement Economic Environment: Consumers are free to buy what they wantEconomic Environment: Consumers are free to buy what they want

and producers are free to produce what they want. Naturaland producers are free to produce what they want. Naturalresources (oil, iron coal etc) in a country also attracts foreignresources (oil, iron coal etc) in a country also attracts foreignenterprises that need these resources to manufacture goods forenterprises that need these resources to manufacture goods for

domestic and international markets. Infrastructural facilities likedomestic and international markets. Infrastructural facilities likeroads, schools, hospitals etc affect economic development of aroads, schools, hospitals etc affect economic development of acountry. An economically developed country attracts and supportcountry. An economically developed country attracts and supportforeign enterprises.foreign enterprises.

Political and legal environment: Policies doesnt change frequently inPolitical and legal environment: Policies doesnt change frequently ina developed economy and thus are better for organisation wherea developed economy and thus are better for organisation whereincentives (reduced rate of interest on loans, tax subsidies etc.) areincentives (reduced rate of interest on loans, tax subsidies etc.) areoffered to attract foreign business.offered to attract foreign business.

Cultural environment: The value systems, social and ethical beliefs,Cultural environment: The value systems, social and ethical beliefs,understanding and interpretation of symbols and languages ofunderstanding and interpretation of symbols and languages ofpeople different cultures have direct impact on business practices.people different cultures have direct impact on business practices.

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Management Challenges in theManagement Challenges in the

International/Global economyInternational/Global economy PlanningPlanning

OrganisingOrganising

StaffingStaffing

DirectingDirecting

ControllingControlling