BB 0031 Management Development

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    BLOCK INTRODUCTION

    Efficient management of human resources and physical resources is very

    important for the accomplishment of objectives of any organisation. Todaysmanagers are required to use professional skills for greater effectiveness. These

    skills can be acquired by studying the management science and practising the

    principles of management. This book is an attempt to provide an effective aid to

    the development of an undertaking of the basic concepts that relate to the

    practice of management in all kinds of organised endeavour.

    This book contains nine units. The first two units discuss the nature and the

    history of management thought. The last seven units deal with the functions of

    management viz., Planning, Decision-making, Organising, Staffing, Selection,

    Direction, Co-ordination and Control.

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    Brig. (Dr.) R. S. Grewal VSM (Retd.)Pro Vice ChancellorSikkim Manipal University of Health, Medical & Technological Sciences

    Advisory Board

    1. Dr. Janardan Jha2. Dr. N. Chandrasekar3. Prof. S. R. Bhillar4. Prof. B. S. Sharma5. Sri Pramod Khera6. Major Sushil Goel7. H. N. Udupa, Associate Professor

    Content Preparation Team

    Content Writing/Compilation

    Mr. Umesh MaiyaAssistant ProfessorSikkim Manipal UniversityManipal

    Content and Language Editing

    Dr. Janardan JhaSenior Vice PresidentManipal Universal Learning Pvt. Ltd.Manipal 576 104

    Mr. H. Nagaraja UdupaCo-ordinator

    Sikkim Manipal UniversityManipal

    Edition: June 2003

    Reprinted for Spring 2008

    This book is a distance education module comprising of written and collated learningmaterial for our students.

    All rights reserved. No part of this work may be reproduced in any form by any meanswithout permission in writing from Sikkim Manipal University of Health, Medical andTechnological Sciences, Gangtok, Sikkim.

    Printed and Published on behalf of Sikkim Manipal University of Health, Medical andTechnological Sciences, Gangtok, Sikkim by Mr. Rajkumar Mascreen, GM, ManipalUniversal Learning Pvt. Ltd., Manipal 576 104. Printed at Manipal Press Limited,Manipal.

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    BB 0031

    Management Development

    Contents

    Unit 1

    Management 1

    Unit 2

    Evolution of Management 17

    Unit 3

    Planning 48

    Unit 4

    Decision Making 64

    Unit 5

    Organising 73

    Unit 6

    Staffing 100

    Unit 7

    Selection 110

    Unit 8

    Direction and Co-ordination 118

    Unit 9

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    Management Unit 1

    Management Development Page No. 1

    Unit 1 Management

    Structure

    1.1 Introduction

    1.2 Meaning

    1.3 Definitions of Management

    1.4 Features of Management

    1.5 Levels of Management

    1.6 Management as a Profession

    1.7 Management as Science

    1.8 Management as an Art

    1.9 Managerial roles

    1.10 Exercise

    1.1 Introduction

    A Business is comprised of 7 elements popularly known as 7 Ms. They are Men,

    Materials, Money, Machines, Methods, Market and Management. Among these

    elements Management is the most important because all other elements are

    determined and controlled by it.

    1.2 Meaning

    Management is the activity for getting things done by others. For this it is

    necessary to guide, direct, co-ordinate and to control human efforts towards the

    fulfillment of certain common goals. Management represents that skill which

    directs, regulates and integrates human efforts in the discharge of all operations

    required for an enterprise. Management is like a pipeline, the inputs are fed at

    one end and they are processed through management functions like planning,

    organising, directing, controlling and ultimately we get the end result or output in

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    the form of goods and services, profit, productivity; satisfaction etc. This can be

    seen in the following chart:

    Management Profits

    Men Goods &

    Input Materials Management Services Output

    Money Productivity

    Machines Satisfaction

    Methods

    Market

    1.3 Defin itions of Management

    1) F. W. Taylor Management is an art of knowing exactly what you want men

    to do and than seeing that it is done in the best and cheapest way.

    Managers according to Taylor should secure the maximum from men;

    materials, machines and money. He stressed on knowing the job and doing

    it in the best way. He has not given much importance to men because of

    which he was criticised by many.

    2) Henry Fayol To manage is to forecast and to plan, to organise, to

    command, to co-ordination and to control.

    This definition has mentioned the functions of management for achieving

    desired results. According to Fayol, Management is the process of

    planning, organising , commanding, co-ordinating and controlling.

    3) Ralph C. Davis Management is the function of executive leadership.

    4) Donald J. Clough Management is the art and science of decision making

    and leadership.

    Both these definitions speaks on managers responsibility of taking

    decisions and directing the activity of others.

    Planning Organising

    DirectingCo-ordinating

    Control-ling

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    5) Lawrence W. Apley Management is the development of people and not

    direction of things.

    This definition says that people give their best when they are developed

    rather than when they are ordered to do this or that.

    The above definitions may reflect different approaches but do not run

    counter to each other. No single definition can give the exact and complete

    meaning of management.

    Management today is facing many challenges and its job has become more

    complex due to pressures from internal as well as external environment.

    The demands of the employees, share holders, customers and the

    Government put pressures on management. In such a situation

    management becomes a function of four Ps. They are Productivity, People,

    Profit and Public Responsibility.

    1.4 Features of Management

    The analysis of the above definitions brings out the following features of

    management.

    1) Management is a Process: It is the process of planning, organising,

    directing, co-ordinating and controlling. These functions should be

    performed continuously and simultaneously. The manager acts by assuming

    authority, expecting responsibility, delegating authority and establishing

    accountability for actions of individuals within the organisation. He brings

    together men, materials, machines and money and makes the best use of

    these resources for the benefit of the entire organisation.

    2) It is a Social Process: Managers job is to get things done by others.

    People cannot be ignored in an organisation because they have been

    described as the means to achieve the ends of the organisation. Thus

    management is a social process.

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    3) Management involves Team Efforts: Management utilises team efforts to

    achieve the goals of the organisation. The manager alone cannot fulfill the

    objectives of the organisation. He needs the help of his employees.

    4) It aims at Achieving Pre-determined Objectives: All organisations are

    groups of individuals formed for achieving common objectives. Once the

    organisation comes into existence it is for the realisation of some definite

    objectives which may be expressed or implied. The objectives are

    determined by administration.

    5) It is a Distinct Activity:A good manager does not believe in doing work for

    himself but in getting things done by others. Thus management is a distinct

    type of work.

    6) Management is a Multi-disciplinary Subject: The discipline of

    Management depends upon many other subjects like Sociology,

    Psychology, Economics, Mathematics, Statistics etc.

    7) Co-ordination is the essence of Management: Co-ordination is an

    important function of management. A successful manager has to co-

    ordinate individual and departmental activities in such a way so as to

    achieve common objectives.

    8) Management is a system of authority: Management is a rule making and

    rule enforcing body. As superior subordinate relationship is existing in an

    enterprise management becomes a system of authority.

    9) Management is required at all levels: The manager is to perform the

    same functions at all levels of the organisation. Whether it is top level,

    middle level or lower level the functions performed are the same. In all the

    situations getting things done by other calls for decision making. Of course

    managers at the top level make more important decisions than the

    managers at other levels.

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    10) Management is essentially a human activ ity: An individual makes use of

    the technique developed by Management to achieve certain objectives such

    as best use of time, energy, money and other resources but ultimately the

    analysis of the situation is to be done by the manager.

    11) Management is a Profession: Management is backed by a systematic

    body of knowledge. A number of principles have been developed which

    needs proper training and education. Thus management to some extent is

    being developed as a profession.

    12) Management is an art as well as Science: Management is an art because

    desired results can be secured by the application of skills.

    Management is also a science because it has a body of organised

    knowledge relating to planning, organising, directing, and controlling. With

    the help of this management can take sure decisions and avoid chance

    decisions.

    1.5 Levels of Management

    In any company of any size it is humanly impossible for one individual to do

    justice to the multifarious activities and complex demand of both management

    and the people in and outside the business. Therefore authority has to be

    delegated and responsibility diversified as management believes in getting work

    done by others. This builds up the superior subordinate relationship and the

    managerial hierarchy.

    Knootz O Donell have classified management into two level i.e. (1) Top level

    (2) Supervisory level.

    Some have divided management into 5 levels namely

    (1) Top level

    (2) Upper middle level(3) Middle level

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    (4) Lower level and

    (5) Operating level or frontline.

    However generally speaking management has 3 levels i.e.

    (1) Top Level: Which determines the objectives and policies.

    (2) Middle Level: Concerned with implementation of the policies.

    (3) Lower Level:Actively assisting in the achievement of the goal.

    The number of levels of management is not rigid. It can be increased but not to

    an unlimited extent because creation of each level complicates the problem of

    co-ordination, communication, control and adds to the cost of management.

    However the span of control should not be widened to restrict the number of

    managerial levels. The following diagram shows various levels of management.

    Manager

    (Personnel Dept.)

    Board of Director

    Managing Director

    General Manager

    Manager

    (Production Dept.)

    Manager

    (Marketing Dept.)

    Assistant Manager

    Heads of variousSection

    Supervisors

    Workers

    Assistant Manager Assistant Manager

    Superintendent ofProduction

    Foremen

    Workers

    Branch Manager

    Sales Officers

    Workers

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    Top Level Management

    It is the head of the organisation. It consist of Board of Directors, Chief

    executives, Managing Directors and the General Managers. They are the

    ultimate source of authority. They set the goals, establish the policies, see that

    the policies are put into effect and analyse the results. It performs all the

    management functions but spend more time on planning and organising than

    other two levels.

    The policies and objectives of the company are framed and setup by the board of

    directors. But the directors are not the people who will implement their own

    policies. Therefore this task is entrusted to the managing director or general

    manager who is the chief executive. The chief executive issues necessary ordersand instructions to the subordinate and from time to time he will see that the

    directors policies are properly implemented so as to achieve companys

    objectives. He is directly accountable to the Board of directors. He has to answer

    them about the results of the company and present proper books of accounts

    when needed. Thus he is the liaison officer between the director and the rest of

    the company.

    Functions: Main functions of top level Management are:

    1) Determine Objectives: They decide both the general objectives and specific

    objectives of the company.

    2) Frame the Policies: They have to develop the policies and plans to carry out

    the objectives. They have to achieve the objectives also.

    3) Setting up Organisational Structure: They also determine the structure of

    the organisation for the execution of plans.

    4) Assemble the Resources: They bring together men, materials, machines

    and money.

    5) Control the Operation: Control are administered by top level managementin the form of budgets, statistical quality control and accounting devices.

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    Middle Level Management: This level is concerned with the task of

    implementing the policies and plans prepared by the top level management.

    They act with and under top management for achievement of objectives. It

    includes heads of various departments and other executive officers attached to

    different departments. They take instructions from Top Management and direct

    and guide the supervisors under their charge. They receive pressures from three

    sides i.e. from top management in the form of orders, from below who press for

    correct decision and from his colleagues in other departments which are

    interrelated to some extent. They are concerned with the results of their

    department for performing their task. They should have human relation skill.

    Functions: Mary C. Niles in her book Middle Level Management, has laid down

    the following functions.

    1) To run the details of the organisation leaving the top executives as free as

    possible.

    2) To Co-operate in building a smoothly functioning organisation.

    3) To understand the interdependence of departments.

    4) To achieve the Co-ordination between different parts of organisation to build

    up a continued and efficient staff.

    5) To develop leaders for the future.

    6) To build team spirit where all are working to provide a product or service

    wanted by the society.

    Lower Level Management: They are a link between the management and

    workers. They implement the policies of top management communicated to them

    by middle level management. Their main work is to get the actual work done.

    They deal with people of the company and internal working arrangement. They

    provide a final and finishing touch to the policies and plans of the top

    management. They are more concerned with direction and control functions of

    management. So they should possess more of technical skill than other levels.

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    Functions:

    1) To issue orders and instructions to the workers and supervise and control.

    2) To plan the activities of the section.

    3) To arrange for the necessary equipments, materials, tools etc.

    4) To provide on-the-job training.

    5) To look after the proper maintenance of tools and machinery.

    6) To solve the problem of workers.

    7) To communicate the problem of workers.

    8) To maintain discipline and right approach for work.

    9) To act as liaison officer between management and workers.

    10) To build team spirit.

    11) To maintain good human relation.

    The following diagram shows the functions to be performed and skills needed by

    different levels of management.

    Conclusion:

    Top Level

    Middle Level

    Lower Level

    Planning

    Organising

    Directing

    Controlling

    Top Level

    Middle Level

    Lower Level

    Conceptual

    Skills

    TechnicalSkills

    HumanRelations

    Skills

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    Managers of all levels perform the same management functions i.e. planning,

    organising, directing and controlling. But the difference lies in the emphasis. Top

    management spents more time in planning and organising, the middle

    management and the lower management in directing and controlling the workers.

    1.6 Management as a Profession

    It is very difficult to answer the question Is Management a Profession ?

    because there is no universally accepted definition of the term profession and

    the roles of the managers are extremely diverse.

    A profession is much more than a career which denotes merely the way of

    making a livelihood. It is also different from trade which represents a mercantile

    employment for profit. It is also distinct from occupation which is merely

    engaging ones time. The term profession is an activity which involves earning of

    a distinct intellectual quality. It can be defined as an occupation for which

    specialised skills and training are required and the use of these skills is not

    meant for self satisfaction, but are used for the larger interest of the society and

    the success of these skills is measured not in terms of money alone.

    Andrews has laid down five criteria for judging whether a field of activity is a

    profession. They are:

    1) Knowledge: Existence of an organised and systematic knowledge.

    2) Competent Application: Skilled and judicious utilisation of knowledge which

    are acquired by training and experience.

    3) Social Responsibility: Primarily motivated by the desire to serve others and

    the community rather than monetary reward.

    4) Self Control: Existence of an association with professionalization as its goal

    which formulates ethical codes for guidance of conduct.

    5) Community Section: A condition of high community respect based upon

    societys recognition of the first four criteria.

    Whether Management satisfies these tests

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    1) Knowledge: Management no doubt do have rapid expanding body of

    knowledge underlying the management field. Starting from Henry Fayols

    General and Industrial Management, many management books and

    journals have been brought to light.2) Competent Application: Management Curriculum in universities and

    management development programmes in commerce and industry have

    gained popularity, many institutes of management have come into being in

    India and elsewhere which offer courses for specialisation in various fields of

    management. Several management consultancy service firms have also

    come into existence which offer advice to business concerns on management

    problems.

    3) Social Responsibility: Modern managers recognise their social

    responsibilities. We see such statements by business leaders in newspapers

    almost everyday.

    4) Self Control: There is no universally accepted standards for evaluating

    managerial teams. There is no central agency to establish and enforce a

    code of conduct for the business managers. Therefore management does not

    fulfill the self-control criteria of a profession.

    5) Community Sanction: Managerial personnel enjoy high status in the

    society. There is a direct relationship between the position of an individual in

    the organisational structure and his status in the society. Thus community

    approves management as a profession.

    Thus we can conclude management to be a profession as it satisfies most of the

    standards. But in the true sense of professionalisation, management is still far

    from complete as it does not have a code of conduct which puts self control on

    the managers. This is considerably narrowed which clearly indicates that

    management is moving towards professionalisation. This can be substantiated

    with the help of the following points:

    i) Substantial body of accumulated knowledge: Gradually management

    has developed a specialized body of theory and philosophy which is fast

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    growing and it has become the best passport to enter the world of

    employment.

    ii) Compulsory Acquisition of Management Knowledge: It is becoming very

    essential to acquire management knowledge if one has to become asuccessful manager because of the advanced technology and complexities

    of business.

    iii) Management Tools: Continuous research has helped in the development

    of management tools whose application is becoming a must for the success

    or growth of an enterprise. These branches of management Profession

    have enhanced the practical utility of management.

    iv) A Distinct discip line: Today management has become a distinct

    discipline. Schools & institutes are offering masters degree in management,

    conducting seminars, symposiums, specialized courses, training

    programmes etc. in various areas of management. This is making

    management more specialized.

    v) Use of specialized experts & professionals: The place of Sons of father

    are being replaced by highly qualified, trained & experienced persons to

    manage the business.

    vi) Change in Outlook and Code of Conduct: Today the concept of seller

    beware has taken the place of Buyer Beware. Pressure of consumerism,

    trade unionism, public opinion & legislation are inducing the management to

    evolve a code of conduct. There are several codes of conduct for different

    types of managers by their respective organisation in different parts of the

    world.

    Eg: Code of conduct of British Institute of Management

    vii) Honesty & personal integrity: These two are fundamental for gaining

    universal acceptance for the practice of profession. Gentlemanly behaviour

    in terms of respecting the views of others & other profession is of core

    importance in management because of the fact that a large no. of specialists

    from different profession are employed in the business today.

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    3) It should establish cause and effect relationship.

    4) Its principles should be verifiable.

    5) It should have universal application.

    6) It should ensure predictable results.

    Whether Management Satisfies these Features

    1) Systematised Body of Knowledge: Management has a systematized body

    of knowledge pertaining to its field. Its principles have been evolved on the

    basis of observation not necessarily through the use of scientific methods.

    2) Scientific Enquiry: The researchers in management use scientific

    techniques to collect and analyse data about human behaviour.

    3) Cause and effect relationship: Several principles have been developed

    which also establishes cause and effect relationships.

    4) Verifiability of the Principles: The principles of management have also

    been verified by many researchers.

    5) Universal Application: More or less these principles have universal

    application in different types of organisations.

    6) Predictable results: Management theories and principles may not produce

    the exact results as in case of pure science. It shows different results in

    different situation because it deals with the people and their behaviour which

    cannot be accurately predicted. Moreover it is not possible to conduct

    experiments in a controlled environment as in case of other pure sciences.

    This puts the limitation on Management as a science.

    Conclusion: Management satisfies almost all the features of a science except

    ensuring predictable results. Therefore management cannot be considered as an

    exact or pure science. It is an Inexact Science or Soft Science. It is classified

    as one of the social sciences.

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    1.8 Management as an Art

    Management is also an art. Art is bringing about desired results through the

    application of skills. Every manager has to apply certain knowledge and skills

    while dealing with people and resources to achieve desired results. In factmanagement is one of the most creative art. As an art, management calls for

    enormous ability, intuition and judgement for a manager for functioning.

    From the above discussions we can say that management is both a science and

    an art. So the manager should possess not only the specialised knowledge of

    management but also the skill to put his knowledge into practice.

    1.9 Managerial roles

    A manager is concerned with planning, organising, directing and controllingfunctions of the organisation. But actually every manager takes on a much wider

    range of roles to move the organisation towards its stated objectives. In a broad

    sense, a role consists of the behaviour patterns expected of an individual with in

    an organisation.

    Henry Mintzburg made an extensive survey and found out that all the managers

    play a series of interpersonal, informational and decision making roles. They are:

    A) Interpersonal Roles: These roles help managers to keep their organisation

    running smoothly.1) Figurehead: In this role, every manager has to perform same duties such

    as greeting the dignatories, taking the visitors to lunch, attending

    subordinates wedding etc. Managers are symbols and personify the

    organisation and its members.

    2) Leader: As a leader, every manager must motivate and encourage his

    employees.

    3) Liaison: Like politicians, managers must learn to work with everyone

    inside and outside the organisation who help in the achievement of

    organisational goals.

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    Evolution of Management Unit 2

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    Unit 2 Evolution of Management

    Structure

    2.1 Introduction

    2.2 Evolution of Management

    2.2.1 Management in Antiquity

    2.2.2 Pre-Scientific Management

    2.2.3 Scientific Management

    2.2.4 Functional Management

    2.2.5 Human Relations School of Management

    2.2.6 Behavioural School of Management

    2.2.7 Quantitative approach to Management

    2.2.8 Systems approach to Management

    2.2.9 Contingency approach to Management

    2.2.10 Management thought today

    2.3 Exercise

    2.1 Introduction

    The existence of Management can be seen with dawn of civilization. It took its

    birth when man started living in groups, but it took the form of leadership,

    co-ordinating the efforts of the members of the family. Evidence of the use of the

    well recognised principles of Management was found in the organisation of public

    life in ancient Greece, the Organisation of Roman Catholic Church and Military

    Organisation. However theory of Management could not be developed due to the

    following reasons:

    1) Indifferent approach of sociologist, economist, political thinkers towards

    commerce, trade and industry.

    2) Treatment of Management as an art and not a Science.

    3) Concept that managers are born and not made.

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    With the growth of socio-economic, political and scientific institution,

    Management started developing. This shows that Management was evolutionary.

    2.2 Evolution of Management

    The evolution of Management can be divided into different stages:

    Management in Antiquity.

    Pre-Scientific Management

    Scientific Management

    Functional Management

    Human Relations approach to Management.

    Behavioural science approach to Management.

    Quantitative approach to Management.

    Systems approach to Management.

    Contingency approach to Management.

    2.2.1 Management in Antiquity: Management which first began in the family

    organisation expanded to the tribe and finally to the political units as found in

    Babylonian Civilization. The concept of managerial responsibility was clearly

    evidence in the code of Hamurabi. The Egyptians skill in planning and organising

    the construction of public edifices can be seen in their buildings and pyramids.

    The Chinese philosophers were the first to recognise the need for systematic

    selection of employees. Kautilyas Arthasastra speaks on duties of king and his

    ministers and Management of trade and commerce.

    But however, Management was strictly on a trial and error basis with little or no

    theory and visually no exchange of ideas and practices. Principles were not

    united in the stream of Management thought.

    2.2.2 Pre-Scienti fic Management: Following closely the vast physical changes

    in the world economy, changes in the concepts and conduct of Management took

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    place. Certain pioneers challenged the traditional character of Management by

    introducing new idea and approach. Some of the contributors are

    a) Prof. Charles Babbage (1729 1871): He was a mathematics professor at

    Cambridge University. He visited many factories in England and France and

    found that factories were fully run by traditional methods. Manufacturers were

    wholly unscientific and made little use of science or mathematics. They relied

    on opinion and guess work instead of investigation and accurate knowledge.

    Contributions: He advocated the use of science and mathematics in factory

    operations. He invented calculating machine called the differential engine. He

    published a book in 1832 entitled On the economy of machinery and

    manufacturers. In his book he emphasises on the following points:

    1) Use of accurate data obtained by rigid investigation.

    2) Desirability of finding out the number of times each operation is repeated

    each hour.

    3) Dividing of work into mental and physical task.

    4) Determining the precise cost of performing every process.

    5) Paying of bonus to the workers in proportion to efficiency.

    b) Robert Owen: He started a factory for the manufacture of textile machinery

    and in 1800 he become the managing director. He carried out experiments inthe group of textile mills he managed during the period. He is well-known as

    the promoter of co-operative and trade union movement in England. He was

    the first industrialist who was interested in his workers welfare on the job.

    Throughout his life he worked for building up a spirit of co-operation between

    the workers and Management. He is also called as the father of Personal

    Management.

    Contribution: He firmly believed that the workers performance was influenced

    by the total environment of working conditions and just treatment. Therefore he

    emphasizes the practice of:

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    i) Shorter working hours

    ii) Housing facilities

    iii) Training of worker and hygiene

    iv) Education to their children.

    He took active part in its introduction at the British factory in 1819. He preached

    personal Management as an essential part of every managers job.

    c) James Watt Jr. and Mathew Robinson: They were the sons of the inventor

    of steam engine. They became the owners of an engineering factory where

    they used their principles.

    Contributions: They emphasized on

    i) Market research and forecasting.

    ii) Planned machine layout to facilitate better flow of work.

    iii) Production Planning.

    iv) Standardisation of components and parts.

    v) Accurate Statistical Records.

    vi) Maintenance of advance control techniques.

    vii) Provision of welfare with sickness and old age benefit scheme administered

    by an elected committee of employees.

    viii) Scheme for developing executives.

    2.2.3 Scienti fic Management: Introduction of mass production, large scale

    industry and use of expensive machinery resulted in difficulties of maintaining the

    harmonious relationship between the employer and the employees. This

    projected the importance of utilizing adequate methods and principles of solving

    problems of Management. Traditional methods were challenged. The post

    Management experience was scientifically systematized. Among the individuals

    who made their contributions on a large scale F. W. Taylor was the foremost.

    F. W. Taylor: (1856 1915) Fedrick Winslow Taylor well known as the father of

    scientific management made a greater impact on the development of

    management. He started his career as an apprentice mechanist in cramp

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    distribution of surplus they must try to increase productivity. The principles of

    scientific Management can be put as follows:

    1) Separation of Planning and doing: In the Pre-Taylor period a worker would

    decide how he had to do the work and what machines and equipment would

    be required to perform the work. But Taylor seperated the two functions of

    planning and doing and emphasized that planning should be entrusted to

    specialists. The planning department will plan the days work. When a

    labourer comes to factory he gets clear instructions about what exactly he

    has to do. Therefore he can concentrate on the actual performance of work

    and thereby increase the productivity.

    2) Functional Foremanship: Taylor introduced the system of functional

    foremanship where every worker receives order from eight foremen. Among

    these eight foremen, four are in the planning department and four are in the

    working department. The foremen found in the planning section are

    i) Route Clerk: He determines the path of movement for materials in

    various process of manufacture.

    ii) Instruction Card Clerk: He gives instructions to the workers. He

    prepares instruction cards to inform workers regarding special tools to be

    used, speed and feed of machines etc.

    iii) Time and Cost Clerk: He collects and supplies all the required

    information for recording the time taken for doing the work and thus the

    work of calculating standard time and cost.

    iv) Disciplinarian: He frames the rules and regulations to be followed by the

    workers.

    The four members found in the workshop are:

    i) Gang boss: He does all the necessary preliminary preparation of the

    work. He gives demonstration on the method of doing the work.

    ii) Speed boss: He sees that the workers are using proper tools and

    speed as instructed.

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    iii) Repair boss: He looks after the maintenance of tools, equipments and

    machines. If necessary he gets the repair work done well in advance.

    iv) Inspector: He inspects and reports to the higher authorities on the

    performance of the workers and the quality of product.

    3) Job Analysis: Job analysis is concerned with determining a method of work

    which takes least time, least cost and least movements. It is the process of

    determining standard task for every worker through careful investigation.

    Management will have to conduct time study, motion study and fatigue study

    to decide about the best method of doing the job.

    i) Time Study: It involves finding out the standard time for performing

    operations.

    ii) Motion Study: It refers to the study of the movement of the workers while

    performing the job. This helps in eliminating all unnecessary movement

    and finding the best way of doing the job.

    iii) Fatigue Study: It is the study about the tiredness of workers which

    decreases their efficiency. It helps in finding out at what intervals rest

    have to be provided so that the efficiency of the employees can be

    increased.

    4) Standardisation of Tools and Equipments: Taylor emphasized on use of

    standardised machines, standard raw-materials, good working conditions and

    standard methods for handling machines and materials. It helps in

    maintaining quality and uniformity.

    5) Mental Revolution: Taylor emphasizes on harmony and co-operation rather

    than individualism and conflict. There should be intimate and friendly relation

    between Management and workers. This is possible only by bylateral mental

    revolution. A complete mental revolution on the part of the employers as to

    their duties towards their fellow workers, towards their workman and their

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    problems. Without this mental revolution scientific Management does not

    exist.

    6) Financial Incentives: Taylor used financial motivators to make people work

    in the organisation. He devised an incentive payment system called

    Differential Piece-Rate System under which workers wage was calculated

    based on his performance and on the position he occupied. The rate should

    be fixed on accurate knowledge and not on estimates.

    7) Scientific Selection and Training of Employees: He emphasized on

    increased productivity which needs right man in the right job. Therefore

    workers must be selected on scientific basis. Qualification, experience,

    aptitude, physical strength etc. must be considered while selecting the

    workers. After the selection they must be trained properly to take up the

    allotted task. This helps the worker to take up the responsibility for which he

    is best suited.

    8) Economy: Taylor emphasized on profit and economy along with scientific

    methods and approaches. Necessary measures must be taken to reduce the

    wastages. Therefore, Taylor suggested an efficient system of cost accounting

    to estimate and control costs on various items of expenses connected with

    manufacturing operations.

    9) Mechanism of Management: Taylor gave the mechanism of Management

    by listing some of the mechanisms:

    1) Time Study

    2) Functional Foremanship

    3) Standardisation of tools and implements

    4) Desirability of the planning group

    5) Instruction cards for the workmen

    6) Differential piece rate

    7) Routing system

    8) Modern cost system etc.

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    Taylor tried to point out the following three points in his shop management. They

    are

    a) The objective of good cost. Management was to pay high wages and have

    low unit production cost.

    b) To achieve this objective Management had to apply scientific methods of

    research and experiments to its overall problem in order to formulate

    principles and standard process which would allow for control of the

    manufacturing operations.

    c) An Environment of close and friendly co-operation should be cultivated

    between Management and workers.

    Criticisms

    Though scientific Management was considered unique and gained popularity, it

    was not free from limitations.

    1) Use of the Word Scientific: People objected the use of word Scientific

    before Management. Mr. Brech remarks, In an era that has not seen only the

    best of science, it was perhaps an unfortunate choice.

    2) Concentration only on production: The principles of scientific Management

    were confined to production management which is not the whole and soul of

    any organisation. There are other equally important areas such as financial

    management, sales management which are entirely ignored by him.

    3) Impersonal and Utilitarian: Taylor was criticised to be excessively utilitarian

    and impersonal as he gave very little attention towards human element in

    production.

    4) Employing first class men: Taylor emphasized a higher productivity and

    high production by employing specialists and first class men that made

    people to criticise taylor as expecting each worker to be a superman whichis not possible.

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    5) No direct relationship between wages and increase in productivity:

    There were complaints from the labourers that their wages were not

    increased in direct proportion to productivity increases which resulted from

    improved methods and procedures.

    6) Industrial Autocracy: Taylors scientific Management led the organisation

    towards industrial autocracy as all planning was done by management and

    employees were merely asked to follow their instruction. Therefore trade

    unions discarded scientific Management and regarded them as the means to

    exploit labourers.

    7) Difficult to Practice: It was also argued that work analysis, time, motion and

    fatigue studies, standardisation of pay-rates etc. cannot be scientifically

    measured. Controls pertaining to materials, machines and processes may be

    understandable in theory but in practice it is difficult to execute them.

    8) No One best way: Taylor emphasises on finding out one best way of doing

    the activity. But in reality it cannot be done because individual skills and

    capacities influence the decision of the best method. What may be the best

    method for an individual or a factory need not be the best method for another

    individual or factory.

    9) Concept of functional foremanship: Taylor advocated the concept of

    functional foremanship to bring about specialization in the organisation. But

    this is not feasible in practice as it violates the principle of unity of command

    and increases the problem of confusion, conflict and co-ordination.

    Henry Lawrence Gantt: He was a mechanical engineer who worked with Taylor

    at the Midwale steel company. Later he went on his own as a consulting

    industrial manager.

    Gantt began to reconsider Taylors Differential piece rate system which had

    too little motivational impact on workers. It was an incentive plan where by the

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    worker was paid on the basis of his daily output. So Gantt developed his Task

    and Bonus System.

    According to this system the workers were divided into three class

    i) Normal Worker: Who performs the days work in the given time. He would

    get 50% bonus in addition to daily wages.

    ii) Inefficient Worker: Who is not able to complete the given task in the given

    time. He gets only wages.

    iii) Efficient Workers: Who completes the task in lesser time. He would get

    extra bonus in addition to his daily wages and 50% bonus.

    If a worker gets any bonus the supervisor who controls him also gets bonus. His

    attention was to motivate the supervisors to train their workers for higher

    performance. He has appealed for maintaining good relationship between the

    employer and the employees. One notable feature of Gantt is that he has

    distinguished men and machines. Gantt chart is today regarded as a potential

    tool for production control in the hands of the manager. Gantt is more credited in

    Management as he paid necessary attention to the human element in

    productivity.

    2.2.4 Administrative Management, Process Management or Functional

    ManagementAdministrative management is an important phase in the evolution or

    development of management thought. Henry Fayol is regarded as the Father of

    Admin is trative Management or the Father of Princip les of Management.

    Henry Fayol was born in 1841 at Constantinople in France. He graduated as a

    mining engineer in 1860. In the same year, he joined a French coal mining

    company as an engineer. After a couple of years, he was promoted as the

    manager of the collieries and continued as such for 22 years. In 1888, when the

    company was almost bankrupt due to heavy losses, he was appointed as its

    managing director. He served as a managing director for 30 years and retired in

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    1918 after expanding the company into a large coal-steel combine with a strong

    financial position and a record of profits and dividends over a long period. After

    retiring from his executive position in 1918, he devoted himself to popularising his

    theory of management.

    According to Fayol, all the activities of industrial undertakings could be divided

    into six groups, viz.,

    a) Technical activities (i.e., those connected with production or manufacture).

    b) Commercial activities (i.e., those relating to buying, selling and exchange).

    c) Financial activities (i.e., those concerned with securing of capital and its use).

    d) Security activities (i.e., those connected with protection of property and

    persons).

    e) Accounting activities (i.e., those connected with stocktaking, preparation of

    financial statements like profit and loss account and balance sheet, cost

    accounting, statistics, etc.).

    f) Administrative or managerial activities (i.e., those connected with planning,

    organising, commanding, co-ordinating and controlling).

    He believed that for the successful running of any industrial or business

    undertaking, all these functions or activities must be performed. If any one

    function or activity was neglected, the enterprise would fail.

    As the first five function and activities were already well known, Fayol devoted his

    attention to managerial functions or activities. He was the first man to spell out

    the managerial functions or activities. He sub-divided the managerial functions or

    activities into five groups. They are:

    a) Forecasting and Planning: This activity means foreseeing or examining the

    future and preparing the plan of action (i.e., determining the result envisaged,

    the line of action to be followed, the stages to be gone through and the

    methods to be used) accordingly.

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    3. Discipline: This is the respect for agreements which are directed at

    achieving obedience, application, energy and outward marks of respect. It

    requires good superiors at all levels, clear and fair agreements and judicious

    application of penalties.

    4. Unity of Command: This principle means that an employee should receive

    orders from one superior only.

    5. Unity of Direction: This principle implies that each group of activities having

    the common objective must have one head and one plan.

    6. Subordination of Individual Interest to Group Interest: This principle

    emphasises the necessity for protecting group or common interest as

    against individual interest. This will facilitate unity and avoid clashes among

    different workers.

    7. Remuneration of Personnel: This principle means that the method of

    employee remuneration should be just and fair and should afford the

    maximum satisfaction to both employees and employer.

    8. Centralisation: This principle implies that the degree of concentration of

    authority should vary according to the needs of the individual situation.

    9. Scalar Chain: This is the line of authority or chain of superiors running from

    the highest rank to the lowest rank. The line of authority should be followedordinarily or normally. However, when the strict following of the line of

    authority becomes detrimental, the chain can be short-circuited.

    10. Order: This is the principle of organisation in the arrangement of things and

    persons. According to this principle, there must be a place for everything

    (and everyone), must be in its (and his) place.

    11. Equity: This principle implies that the managers of an undertaking should

    enlist the loyalty and devotion from the employees by showing kindliness

    and justice in dealing with them (i.e., subordinates).

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    12. Stability of Tenure of Personnel: This principle implies that every

    employee must be assured of security of service. When an employee is

    assured of security of service, he will take keen interest in giving the best

    performance. So, unnecessary labour turnover (i.e., termination of

    labourers) should be avoided.

    13. Initiative: This principle implies that the mangers of an undertaking should

    permit their subordinates to take some initiative in thinking out and executing

    plans. This will give them (i.e., the subordinates) much satisfaction.

    14. Espirit de corps: This principle means union is strength. So, there must

    be team-work and proper communication among the members of the team.

    Again, Fayol spelt out the qualities of successful managers. He held that

    managerial ability can be acquired in schools and colleges and later in the

    workshop in the same way as the technical ability. The qualities of a successful

    manager emphasised by Fayol are the following:

    a) Physical (i.e., health, vigour, etc.).

    b) Mental (i.e., ability to understand and learn, judgement, mental vigour and

    adaptability).

    c) Moral (i.e., energy, firmness, willingness to accept responsibility with

    initiative, loyalty, tact and dignity).

    d) General education (i.e., general acquaintance with matters not belonging

    exclusively to the function performed).

    e) Special knowledge (i.e., knowledge peculiar to the function).

    f) Experience (i.e., knowledge arising from the work proper).

    Contributions of Administrative Management:

    Fayols administrative management received widespread acceptance from

    writers on management and managers of business undertakings. For instance,

    administrative management was accepted by two executives of the GeneralMotors of the U.S.A., viz., James D. Mooney and Allan C. Railey. Administrative

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    management was also recognised by writers on management like Harold Koontz

    and Cyril ODonnel.

    Administrative management has made some significant contributions to the

    development of management thought. The important contributions of

    administrative management are:

    a) Administrative management has provided theoretical basis to the practice of

    management. That is, it points out that it is possible to learn and impart

    education and training in the art and science of management.

    b) It is easy for a manager to understand and practise management through

    administrative management. Under this approach (i.e., administrative

    management), when confronted with a problem, a manager has only to

    diagnose whether the problem concerns planning, organising, directing, co-

    ordination or controlling aspect of management function. Once this is done he

    can confidently proceed to solve the problem by using his knowledge and

    practical skill.

    c) Administrative management has pointed out that management is universal

    irrespective of the types of organisation. So, the functions of management are

    common and the principles of management are of universal application.

    d) Administrative management integrates the knowledge of various disciplinesfor better management.

    e) Administrative management provides flexibility in the sense that, under this

    approach, there is room for innovation research and development.

    f) Administrative management is an aid to professionalisation of management.

    Criticisms of Administrative Management:

    It is true that administrative management has made certain contributions to the

    development of management thought. But it is not free from limitations or

    criticisms. The main criticisms against administrative management are:

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    a) The principles of management proposed by administrative management are

    just based on observation (i.e., a few case studies), and are not tested

    empirically (i.e., not based on research).

    b) The so called universal principles of management proposed by administrative

    management do not always stand the test of empirical scrutiny.

    c) Organisations function under dynamic (i.e., changing) conditions. As such,

    profounding of universal principles of management may not always be a

    fruitful exercise.

    d) Administrative management suffers from excessive categorisation and

    impersonality.

    e) Some of the principles profounded by administrative management, say, the

    principle of unity of comand and the principle of specialisation or division of

    labour cannot be followed simultaneously.

    f) The principles of specialisatiion, chain of command, unity of direction and

    span of control profounded by the administrative management result in the

    formation of mechanistic organisation structures which are insensitive to

    employees social and psychological needs.

    g) The principles of management profounded by administrative management

    are based on the assumptions that organisations are closed systems. But thisis not true. Organisations are open systems. So, the rigid structures which the

    principles (profounded by administrative management) tend to create do not

    work well under unstable conditions.

    2.2.5 Human Relations School of Management

    Taylor was successful in harnessing the economic needs of the workers by

    devising wage incentive scheme but he failed to realise that workers had certain

    Psychological needs also. Many authorities like Elton Mayo and others

    conducted some experiments in the field of industrial psychology. As a result a

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    trend began which can be phrased as Being nice to people or The human

    relations movement.

    Human relations put all stress on interpersonal relations and the informal groups.

    Its starting point was in individual psychology rather than in the analysis of

    worker and the work. This school has done an unique job in recognising the

    importance of human element in all organisations. It freed Management from

    domination of wrong ideas, but it did not succeed in substituting new concepts.

    Elton Mayo: He is generally recognised as the father of Human Relations

    School. He along with his associates conducted a series of study at western

    electrics Hawthorne plant. His experiments are popularly known as Hawthorne

    Experiments. The conclusions arrived at from these experiments were

    i) The amount of work to be done by an individual is not determined by his

    physical capacity but by the social norms.

    ii) Non-economic rewards and reactions play a significant role in influencing

    the behaviour of the workers.

    iii) Generally workers do not act or react as individuals but as members of the

    group.

    iv) Informal leaders play an important part in setting and enforcing the group

    norms.

    He proved that increase in productivity is not caused by any single factor like

    changing rest pauses or working hours but a combination of these and several

    other factors such as less restrictive methods of supervision, giving autonomy to

    workers, allowing the formation of small cohesive groups of workers, creating

    conditions which encourage and support the growth of these groups and the

    Co-operation between workers and Management. As a result it has been

    recognised that workers performance is related to physiological, sociological and

    psychological factors.

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    Thus human relations school discarded the engineering approach to the problem

    of work and productivity and proved that informal work groups and the

    opportunity to be heard and participate in decision making have an important

    impact on the productivity of the workers.

    Many Parker Follet: Her Management views were a bi-product of her

    psychological and Sociological background. She tried to interpret classical

    management principles in terms of human factors.

    She attempted to solve the most basic problem of any organisation i.e. the

    problem of motivation. Therefore she tried to establish a Management philosophy

    based on the ground that any productive society must be founded upon the

    recognition of motivating desires of the individual and the group.

    The next basic problem identified by Follet was the problem of Co-ordinating the

    group efforts to achieve the pre-determined objectives. She was of the opinion

    that authority as an act of subordination was offensive to mans emotions and

    therefore could not serve as a good foundation for co-operative organisation. She

    laid down following principles to achieve effective co-ordination:

    1) Co-ordination in the early stages of planning and policy making.

    2) Co-ordination by direct contact of responsible persons.

    3) Co-ordination as being reciprocal relating to all factors in the situation.4) Co-ordination as a continuing process.

    Being a management philosopher, she maintained that for a particular situation,

    leadership will go to the man having vast knowledge and who can understand the

    situation and organise the essential elements for effective results. She coined the

    new principle The group concept and said that it would become the basis for

    the future industrial system.

    Conclusion: Both the human relation theorists discarded mechanistic approachwhich neglected human psychology and welfare. They emphasized that higher

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    productivity can be better achieved when workers are treated as human beings.

    Thus human element and its relationships in the organisation is essential for the

    success of the organisation.

    2.2.6 Behavioural School of Management

    Human relations school of management had a bad name by the middle of 1940s

    because Hawthrone experiments created a misunderstanding of what

    constitutes good human relations. Due to this and increasing knowledge about

    how the individual acts and reacts in the business environment, human relations

    movements gave the way to behavioral science approach to management.

    Abraham Mallows Need Hierarchy Theory : He was a famous social scientist

    and a psychologists. According to him man is a wanting animal. He has variety of

    needs from most basic necessities to the highest needs of self actualisation. If

    the basic needs are satisfied he seeks to satisfy his next higher level needs. The

    unsatisfied needs influence the human behavior. Manager must identify the

    unsatisfied needs of peoples and must try to satisfy them. According to Maslow

    people are motivated to meet the needs which can be arranged in an order from

    the lowest to the highest. Maslows hierarchy of needs can be shown as below:

    1) Physiological needs such as food, clothing shelter etc.

    2) Safety needs such as economic security, jobs security, provision for old age

    etc.

    (5)

    (4)

    (3)

    (2)

    (1)

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    3) Social needs such as love & affection, companionship, belongingness,

    acceptance etc.

    4) Esteem needs such as self respect, status, prestige, recognition, reputation,

    achievement etc.

    5) Self-actualisation needs such as self fulfillment, new responsibility,

    advancement, participation in Management, realisation of mans full potential.

    1) Physiological Needs: For a man whose basic physiological needs are

    not satisfied, other higher needs of love, status & self fulfillment generally

    become less significant. Physiological needs are satisfied through

    monitary benefits.

    2) Safety Needs:After satisfying physiological needs man tries to satisfy his

    safety needs. At this stage they act as prime motivators.

    3) Social Needs: Man is a social animal. He needs to be loved & accepted

    by others. When physiological and safety needs are fairly satisfied social

    needs become powerful motivators.

    4) Esteem needs or Status Needs: The desire for status & prestige is an

    important aspect of the need for esteem. It is concerned with awareness

    of self importance & recognition from others. Satisfaction of self esteem

    needs result in feelings of self-confidence, prestige & being worthy in the

    organisation. Unsatisfied esteem needs may result in feelings of inferiority

    weaknesses & helplessness.

    5) Self-actualisation Needs: The highest level need according to maslow is

    the self actualisation needs. When all other needs are adequately

    satisfied employees will be motivated by the self-actualisation needs. Man

    Tries to realise his own potential abilities & leads to maximise his

    potential. Self-actualisation need is a growth need. It includes getting

    higher responsibility. This need can be satisfied by providing challenging

    job, promotion to managerial positions, delegation of authority etc.

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    Maslows need hierarchy Theory has practical use to the managers while

    dealing with the subordinates Management must note that the satisfied need

    ceases to be the motivator of human behavior. Man will think of second need

    only when the first need is satisfied. The needs at a given level need not be

    fully satisfied before proceeding to the next higher need. The fact is that most

    people are partially satisfied & partially unsatisfied.

    Criticisms: The following criticisms are put forward against Maslows Theory:

    1) It is based on assumptions: The hierarchy of needs suggested by Maslow

    is based on assumptions. It cannot be generalised. Different people have

    different order of needs. For eg.: For a politician self actualisation need may

    become a prime motivating factor before lower level needs are satisfied some

    people do not care for job security but for social needs.

    2) It is non-testable: It is very difficult to interpret its concepts because human

    need are interdependent & overlapping.

    3) It does not differentiate individuals: Needs may differ between the

    individuals in the same position for eg.: Esteem need may be a dominant

    motive for an individual but for another individual in the same position social

    need may be a strong motive.

    Inspite of the above limitations, Maslows need hierarchy theory is still a relevant

    theory for understanding the behaviour of subordinates. It provides a common

    sense approach to the managers.

    Herzbergs Two Factor Theory: This theory was prepared by Fedrick

    Herzberg after conducting a number of interviews with two hundred engineers

    and accountants of different companys in Pittsburgh in U.S.A. He asked about

    their experiences and feelings. Study revealed that employees felt good about

    their jobs when there was job enrichment, recognition of achievement,

    challenging work, opportunity for personal growth and advancement. These

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    factors motivate the employees for higher performance. Therefore these are

    called motivators or satisfiers.

    It was found that bad feelings about the job were due to company policies

    working conditions, inter-personal relations, salary, status, job-security and

    quality of supervision. The presence of these factors in a work situation at a

    satisfactory level does not motivate employees but prevents job-dissatisfaction.

    These contribute for maintaining reasonable level of satisfaction in employees.

    Therefore these factor are called hygiene factors or dis-satisfiers or maintenance

    factors. The absence of hygiene factors in a work situation may cause

    dis-satisfaction among the employees about their jobs.

    He concluded that job satisfaction and dis-satisfaction comes from two factors

    i.e. motivational factors what he called as a satisfiers and hygiene factors what

    he called as dis-satisfiers. Therefore this theory was called as two factor theory.

    The following table explains Herzbergs Motivation and hygiene factors:

    Hygiene Factors Motivation Factors

    Company policy and administration,

    quality of supervision, relationship

    with supervisors, salary, work

    condition, personal life, relations withsubordinates, job security, status.

    Achievement, recognition for good

    work, added responsibilities, oppor-

    tunity for advancement, opportunity

    for personal growth, challenging work.

    It is desirable to have motivational factor in the organisation to satisfy the

    employees for higher performance. But motivating factors may not satisfy the

    employees unless maintenance or hygiene factors are present in the work place

    at a reasonable and satisfactory level. He concluded that the key to motivation

    lies in designing challenging and rewarding jobs and providing opportunity for

    achievement and recognition. Thus Management should attempt to make jobs

    more satisfying.

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    Theory X and Theory Y: This theory was developed by Prof. Mc Gregor. He

    developed these theories based on the assumptions made by the managers

    about human behaviour and human nature in the organisation. He identified two

    different sets of assumption that managers have about their subordinates. The

    first set of assumption is contained in theory X and the second set of

    assumption is contained in theory Y.

    Theory X: This is the traditional theory on Human behaviour. In this theory he

    has made the following assumptions about human behaviour:

    i) All though job is a necessity, people have an inherent dislike to work. They

    try to avoid it whenever possible.

    ii) Most people are lazy and unambiguous. They avoid responsibility and prefer

    to be directed by others.

    iii) Man by nature resist changes.

    iv) People are self centered and indifferent to organisational goals.

    v) People lack creativity.

    vi) People are not very bright.

    vii) Since people do not like work they must be motivated by force, money or

    praise.

    Theory X suggests that a manager must force employees and must threaten

    with punishment or must pay high salary and benefits as motivational techniques

    to direct the employees for higher performance. Thus theory X is negative,

    traditional and uses autocratic style of leadership.

    Theory Y: It is based on positive assumptions about human nature. The

    important assumptions are

    i) The average human being does not dislike work. People get a great deal of

    satisfaction from work in a good working environment.

    ii) Man has desire to achieve.

    iii) People work hard towards objectives to which they are committed.

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    iv) Man does not inherently resist organisational changes.

    v) People take additional responsibilities and apply imagination and creativity

    to organisational problems.

    vi) External control and the threat of punishment are not the only means of

    directing the efforts of people to accomplish the task.

    vii) It is the responsibility of the Management to provide opportunity to the

    people, recognise and develop their abilities. Management must create

    opportunities, remove obstacles, encourage growth and provide guidance to

    the employees.

    Theory Y is positive, participatory and democratic. It is a new approach to

    management which emphasizes on co-operation between management and

    workers. It helps the organisation to reduce conflicts and misunderstandings. It

    emphasizes management by objectives, supportive management,

    decentralization and job enrichment as motivation techniques. It can be used in

    an organisation where self motivated, self controlled, matured and responsible

    people work. In the present industrial environment theory Y is more appropriate

    than theory X.

    Theory Z: This theory emphasizes that employees are motivated to achieve

    organisational goals under two conditions. Each individual must know clearly the

    organisational goals and their efforts must be directed to achieve these goals.

    Each individual should be confident that realisation of organisational goals also

    satisfy his needs heavily. His needs are not threatened and frustrated by the

    members of the organisation.

    Four postulates are to be considered by the management in order to maintain

    and motivate the employees.

    i) Permanent Bondage of Worker wi th the Organisation: There should be

    permanent bond between organisation and workers. For this purpose

    measures like life time employment to the people, highly conducive work

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    environment, challenging job, workers participation in Management etc.

    must be taken up by the Management.

    ii) Participative decision making: Management must encourage workers

    participation in decision making process.

    iii) Co-ordination and Co-operation: Management has to secure

    co-ordination among the members of the organisation. It enables to achieve

    employee commitment to work and promotes a feeling of unity in the

    organisation.

    iv) Informal Organisational Structure: Theory Z suggested an informal

    organisation without a definite structure, chart and divisions. Individuals

    must work together by sharing of information, resources and plans without

    formal reporting relationships.

    Comparison between Human Relations Approach and Behavioural

    Sciences Approach

    Human Relat ions Approach Behavioural Science Approach

    1. Human relations approach laid

    emphasis on the individual, his

    needs and behaviouf.

    2. If focussed on inter-personal

    relationships.

    3. It was based on the Hawthorne

    Experiments and so it scope is

    limited.

    4. It laid emphasis on motivation,

    job satisfaction and morale.

    1. Behavioural science approach

    stressed upon groups and group

    behaviour.

    2. It focussed on group relationships.

    3. It refined the Human Relations

    approach and has a wide scope It is

    a much more systematic study of

    human behaviour in organisations.

    4. The behaviourists studied group

    dynamics, informal organisation and

    motivation.

    2.2.7 Quantitative Approach to Management:

    This approach is also called Mathematical, Operations Research or

    Management Science approach. The basic feature of the quantitative

    management thought is the use of mixed teams of scientists from several

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    disciplines. This school uses scientific tools for providing a quantitative base for

    managerial decisions. The techniques commonly used for managerial decision-

    making include Linear Programming, Critical Path Metho (CPM), Programme

    Evaluation Review Technique (PERT), Games Theory, Queuing Theory and

    Break-Even Analysis.

    The quantitative approach uses mathematical formulae for finding solutions to

    the problems that were previously unsolved. The abiding belief of the quantitative

    approach is that if management is a logical process, it may be expressed in

    terms of mathematical symbols and relationships. The basic approach is the

    construction of a quantitative model because it is through this device that the

    problem is expressed in its basic relationships and in terms of selected

    objectives. The construction of the model expresses the effectiveness of the

    system under study as a function of a set of variables at least one of which is

    subject on control. The general form of operations research model is E = f(x1, y1),

    where E represents the effectiveness of the system (profit, cost and the like),

    x1 the variables of the system which are subjected to control and y1 those which

    are not subject to control.

    Comparison between Scientific Management and

    Quantitative Approach

    Sc ient if ic Management Approach Quanti tat ive Approach1. It advocates use of scientific methods

    in managing.

    2. It focussed on improving efficiency of

    workers and machines by finding one

    best way of doing things.

    3. The main techniques of scientific

    management are time and motion

    studies.

    4. It lays stress on experiment and

    research for improving efficiency.

    5. The conceptual base of scientific

    management was provided by F. W.Taylor and his associates.

    1. It advocates use of mathematical and

    statistical techniques for solving

    management problems.

    2. It focussed on finding right answers to

    managerial problems.

    3. The main technique of quantitative

    approach is operations research.

    4. It lays stress on developing

    econometric models for taking

    managerial decisions.

    5. Quantitative approach waspopularised by W.C. Churchman and

    his associates.

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    2.2.8 Systems Approach to Management:

    In the 1960s, a new approach to management appeared which attempted to unify

    the earlier schools of thought. This approach is commonly referred to as

    Systems Approach. Basically, it took up where the functional process

    management school let off to try to unify management theory, A system view

    point may provide the impetus to unify management theory. By definition, it could

    treat the various approaches, such as the process, quantitative and behavioural

    ones, as sub-systems in an overall theory of management. Thus, the systems

    appraoch may succeed where the process approach has failed to lead

    management out of the theory jungle.

    The systems approach has taken up where the process approach has let off in

    attempting to unify management theory. Whereas the quantitative and

    behavioural approaches went off on opposite paths from the process appraoch,

    the systems approach has attempted to draw them back together to form an

    overall theory of management. Today, it is undoubtedly the most widely accepted

    theoretical base for modern management.

    The systems approach is based on the generalisation that an organisation is a

    system and its components are inter-related and inter-dependent. A system is

    composed of related and dependent elements which, when in interaction, form a

    unitary whole. It is simply assemblage or combination of things or parts, forming

    a complex whole. Its important feature is that it is composed of a hierarchy of

    sub-systems. The world as a whole can be considered to be a system in which

    various national economies are sub-systems. In turn, each national economy is

    composed of its various industries, each industry is composed of firms, and of

    course, a firm can be considered a system composed of sub-systems such as

    production, marketing, finance, accounting and so on. Thus, each system may

    comprise several sub-systems and, in turn, each sub-system may be further

    composed of sub-systems. The system may be closed or open.

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    The contingency theory stresses that there is no one best style of leadership

    which will suit every situation. The effectiveness of a particular leadership style

    will vary from situation to situation. For instance, participative leadership may be

    more effective in an organisation employing professional personnel in a high

    technology operation in an atmosphere of non-materialistic orientation and free

    expression. On the other hand, authoritarian leadership would be more effective

    in an organisation which employs unskilled personnel on routine tasks in social

    values oriented towards materialism and obedience to authority.

    Evaluation of Contingency Approach: Contingency approach guides the

    managers to be adaptive to environment variables while choosing their styles

    and techniques. It discounts preconceived notions and liberates the managers

    from dogmas. The management principles and techniques should be tailored to

    meet the particular situation. Readymade solutions for all the situations are not

    available. Contingency approach tells the managers to be pragmatic and open-

    minded.

    Contingency approach is an improvement over the systems approach. It not only

    examines the relationships between sub-systems of the organisation, but also

    the relationship between the organisation and its environment.

    Comparison of Systems Approach and Contingency Approach

    Systems Approach Contingency Approach

    1. It lays emphasis on the interdependen-

    cies and interactions among systems

    and sub-systems.2. It treats all organisations alike. Size of

    the organisation, and its socio-cultural

    setting are not considered.

    3. It studies organisation at the philoso-

    phical level.

    4. It does not comment on the validity of

    the classical principles of management.

    5. It simply lays down that the

    organisation interacts with the

    environment.

    1. It identifies the nature of interdependen-

    cies and the impact of environment on

    organisational design and managerialstyle.

    2. Each organisation is to be studies as a

    unique entity.

    3. It follows an action-oriented approach

    and so is pragmatic. It is based on

    empirical studies.

    4. It rejects the blind application of the

    classical principles of management.

    5. The impact of environment on the

    organisation structure and managerial

    style is the major concern ofcontingency approach.

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    2.2.10 Management Thought Today:

    Management thought today is the outcome of the contributions of a large number

    of management thinkers who have advocated different approaches to

    management. The various approaches to management have contributed to the

    development of modern management on scientific lines. Today, management is

    highly developed.

    Management thought today has universal application. Management has an

    important place not only in business undertakings but also in non-business

    undertakings.

    Further, today, management is highly professionalised. Again, in management

    thought today, there is greater emphasis on democratic management or

    participative management. Above all, management has become highly inter-

    dependent and inter-disciplinary today.

    2.3 Exercise

    1. Explain the F. W. Taylors Scientific Management.

    2. Explain briefly the functional management.

    3. Explain the Need Hierarchy Theory.

    4. Explain the Herzbergs two factory theory.

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    Unit 3 Planning

    Structure

    3.1 Introduction3.2 Definition and Nature of Planning

    3.3 Characteristic features of Planning

    3.4 Importance of Planning

    3.5 Types of Plans

    3.6 Steps in Planning

    3.7 Advantages of Planning

    3.8 Limitations of Planning

    3.9 Management By Objectives

    3.10 Steps involved in M.B.O.

    3.11 Advantages of M.B.O.

    3.12 Forecasting

    3.13 Importance of Forecasting in Planning

    3.14 Techniques of Forecasting

    3.15 Exercise

    Learning Objectives

    After studying this unit, you will be able to:

    Explain the features of Planning.

    Explain the types of Plans.

    Explain the significance of M.B.O.

    Explain the importance of forecasting and techniques of forecasting.

    3.1 Introduction

    Planning is a primary function of management. It refers to the determination of a

    course of action to achieve a desired result. Planning concentrates 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. Planning function of

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    management precedes all other managerial functions. Without setting goals to be

    reached and line of actions to be followed, there is nothing to organise, to direct

    or to control. Planning actually is the foundation of management. The vital

    supporting column upon planning, organising, activating and controlling and allthese combine together to make up the bridge of process of management.

    Planning governs the survival, progress and prosperity of any organisation in a

    competitive and everchanging environment. It is really a continuous process to

    keep the organisation as a going concern and other functions are also performed

    simultaneously.

    3.2 Definit ion and Nature of Planning

    Koontz and ODonnell defined planning as an intellectual process, the conscious

    determination of courses of action, the basing on decisions on purpose, acts and

    considered estimates.

    In the words of G. E. Milward, Management is the process and the agency

    through which the execution of policy is planned and supervised.

    On the basis of the above definitions, the nature of planning can be enumerated.

    1) Planning is very closely associated with the goals or objectives of the

    organisation. The goals may be expressed or implied. However, well-defined

    goals lead to efficiency in planning.

    2) Planning is mainly concerned with looking ahead of the future. Forecasting

    provides the necessary raw material for correct planning.

    3) Planning involves in the selection of the best alternative.

    4) Planning is required at all levels of management. However, its scope and

    importance increase at successively higher levels.

    5) Planning is an inter-dependent process. It coordinates the activities of various

    departments, sections and sub-sections.

    6) Planning is flexible as it is based on future conditions which too are dynamic.