Management :-

Management is very important for any organization without proper management you cannot achieve
the required objectives. It is an important force which coordinate the individual efforts. Any how, it is
a controlling force in case of business, country or even for a family. It can be defined in the following
words :

Definition of Management :- "Management is a process of coordinating the resources to meet the

objectives."

Business Management :- "Business activity which directs and controls the organization and
operations of a business enterprise is called Business Management ."

Manager :- "The person who controls the over all activities of the business, a firm or a department is
known as manager."

Important Functions of Management

1. Planning :-
It is the basic function of the manager. There are various decisions which the management has to
make the business. For example which business should be started? what should be produced?
where should be produced? where should be sold? how resources should be granted? how
resources should be allocated?

Determination of objectives and selections of policies to achieve these objectives involves in

planning. Without planning, the management can not achieve its objectives. So it is the most
important function of management.

2. Organization :-
It is the second important function after planning. Organization is a mean by which a manager co-
ordinates the other factors of production. He combines the Land, Labour, Capital and other sources
to produce the goods or services. Without effective organization a manager can not achieve his
targets.

3. Staffing Up :-
To select a right man for right job is very important factor for the success. A manager has to select
the efficient and healthy workers on proper places in the organization. It is a team work. If every
member of the team is playing at his proper position then it can achieve its goal. So staffing involves
filling the posts and assigning the jobs to the people according to their skill and ability in the
organization to achieve the goals.

4. Leading :-
Effective managers needs to be effective leader. So leading is the main quality of the manager. A
manager must influence and guide his employees to do the jobs according the demand of the
organization. So leading is a process of guidance. This guidance can be provided by the manager
through actual demonstration about the specific task or by his attitude.
5. Motivation :-
There is a need of motivation to achieve certain objectives of the organization. It is a process of
providing the reasons for the workers to work in the best interest of the organization. For this
purpose incentives are given to the people to motivate them for hard work.

6. Controlling :-
It is a process which measures the performance of organization against the targets determined in the
plans. So controlled activities relate to the measurement of achievements. If the result is not up to
standard then measures are adopted to correct the situation. Plans guide the managers in the use of
resources to achieve specific goals. Controlling helps to achieve the objectives of plan.

Importance of Management:

1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It
directs group efforts towards achievement of pre-determined goals. By defining objective of
organization clearly there would be no wastage of time, money and effort. Management
converts disorganized resources of men, machines, money etc. into useful enterprise. These
resources are coordinated, directed and controlled in such a manner that enterprise work
towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge, and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no under employment of any
resources.
3. Reduces Costs - It gets maximum results through minimum input by proper planning and by
using minimum input & getting maximum output. Management uses physical, human and
financial resources in such a manner which results in best combination. This helps in cost
reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfillment of this, it establishes effective
authority & responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates. Management fills up various
positions with right persons, having right skills, training and qualification. All jobs should be
cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing environment. It
keeps in touch with the changing environment. With the change is external environment, the
initial co-ordination of organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for growth and survival of
organization.
6. Essentials for Prosperity of Society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management makes a
 difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income in hands.
Organization comes with new products and researches beneficial for society.

Interpersonal Roles

1. The Figurehead: performs ceremonial duties. Examples: greeting visiting dignitaries,

attending an employee’s wedding, taking an important customer to lunch.

2. The Leader: responsibility for the work of subordinates, motivating and encouraging
employees, exercising their formal authority.

3. The Liaison: making contacts outside the vertical chain of command including peers in other
companies or departments, and government and trade organization representatives.

Informational Roles
4. The Monitor: scans the environment for new information to collect.

5. The Disseminator: Passing on privileged information directly to subordinates.

6. The Spokesperson: Sharing information with people outside their organization. Examples: a
speech to a lobby or suggesting product modifications to suppliers.

Decisional Roles
7. The Entrepreneur: Seeks to improve the unit by initiating projects.

8. The Disturbance Handler: Responds involuntarily to pressures too severe to be

ignored. Examples: a looming strike, a major customer gone bankrupt, or a supplier reneging on a
contract.

9. The Resource Allocator: Decides who gets what.

10. The Negotiator: Committing organizational resources in “real-time” with the broad information
available from their informational roles.
Evolution of Management Thoughts (Managerial Function)
Management is studied in business academics since earlier times and it is considered as an integral part to
understand business operations. People have been changing and redesigning organizations for centuries. Though
the 20th century is noticeable in history as an 'Era of scientific management', still it does not indicate that management
tactics were not used in yester years. Many studies indicated that Management theory evolved with "scientific" and
"bureaucratic" management that used measurement, procedures and routines as the basis for operations. Firms
developed hierarchies to apply standardized rules to the place of work and penalized labour for violating rules. With
the "human relations" movement, companies emphasized individual workers. Modern management theories,
including system theory, contingency theory and chaos theory, focus on the whole organization, with employees as
a key part of the system.

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The evaluation of management can be categorized in to different parts:

o Pre-Scientific Management Era (before 1880),

o Classical management Era (1880-1930),
o Neo-classical Management Era (1930-1950),
o Modern Management era (1950-on word).

Classical Management includes Scientific Management School, Administration Management School, and
Bureaucracy Management. Neo- classical Management includes Human relation school and Behavioural
Management School. Modern Management includes Social system school, Decision theory school, Quantitative
Management School, System Management School, and Contingency Management School.
evaluation of management

Early Management Thought

The period of 1700 to 1800 emphasizes the industrial revolution and the factory system highlights the industrial
revolution and the importance of direction as a managerial purpose. Thus, the development of management theory
can be recognized as the way people have struggled with relationships at particular times in olden periods. Many
economic theorists during this period described the notion of management. Adam Smith and James Watt have been
recognized as two theorists who launched the world toward industrialization. Adam Smith brought about the
revolution in financial thought and James Watt's steam engine provided cheaper power that revolutionized English
commerce and industry. Both provided the base for modern concepts of business management theory and practice.
Adam Smith explicated the concept of division of labour and Jacques Turgot described the importance of direction
and control. Smith stated that market and competition should be the controllers of economic activity and that tax
policies were destructive. The specialization of labour was the basis of Smith's market system. According to Smith,
division of labour provided managers with the maximum opportunity for improved output. In the period of 1771–1858,
Robert Owens studied for concern for the workers. He was repulsed by the working conditions and poor treatment
of the workers in the factories across Scotland. Owen became a reformer. He reduced the use of child labour and
used ethical influence rather than physical punishment in his factories. He reproached his fellow factory owners for
treating their equipment better than they treated their workers.

In quantitative approach of early management thought, Charles Babbage (1792–1871) is recognized as the supporter
of operations research and management science. Babbage's scientific innovations are mechanical calculator, a
versatile computer, and a punch-card machine. His projects never became a commercial reality. However, Babbage
is considered the creator of the concepts behind the present day computer. The most popular book of Babbage, On
the Economy of Machinery and Manufacturers, described the tools and machinery used in English factories. It
discussed the economic principles of manufacturing, and analysed the operations and the skills used and suggested
improved practices. Babbage considered in the benefits of division of labour and was a supporter of profit sharing.
He developed a method of observing manufacturing that is the same approach utilized today by operations analysts
and consultants analysing manufacturing operations. Other theorists who contributed in quantitative approach of
early management thought were Robert Owen, Andrew Ure and Charles Dupin, Henry Robinson Towne.

Another theorist Baptiste, explained the significance of planning. But management is appeared as a different
discipline in the second half of 19th century with the beginning of Joint Stock Company. This type of enterprises
separated management of business from their ownership and gave emphasis to labour incompetence and improper
systems of wage payments. To resolve such problem, people began to identify management as a separate field of
study. During 20th century, Management has become more scientific discipline with standard principles and
practices.

The Classical Approach

The classical approach is the earliest thought of management .The classical approach was associated with the ways
to manage work and organizations more efficiently. The classical approach are categorized into three groups namely,
scientific management, administrative management, and bureaucratic management.

I. Scientific Management: Scientific management which is also referred to Taylorism or the Taylor system is a
theory of management that evaluates and synthesizes workflows, with the aim of improving labour productivity. In
other words, conventional rules of thumb are substituted by accurate procedures developed after careful study of an
individual at work. Universal approaches of Scientific management are developed for Efficiency of workers,
Standardization of job roles/activities and Discipline - the role of managers and the business hierarchy. The scientific
management theory had an enormous impact on the business industry at the beginning of the 20th century. Many
big and victorious organizations, such as McDonalds hamburger chain or call centres, utilised a modern version of
scientific management. Among famous theorist, Taylor's contribution in the area of scientific management is
invaluable. The components of scientific management are determination of the task, planning, proper selection and
training of workers improvement in methods, modification of organization and mental revolution such as 'job
specialization'. As a result, it became more concerned with physical things than towards the people even though
increased the output. Scientific Management focuses on worker and machine relationships. Organizational
productivity can be increased by enhancing the competence of production processes. The competence viewpoint is
concerned with creating job that economizes on time, human energy, and other productive resources. Jobs are
planned so that each worker has a specified, well controlled task that can be performed as instructed. Principle of
scientific management are replacement of old rule of thumb method, scientific selecting and training, labour
management co-operation, maximizes output, equal division of responsibility. There are four scientific management
systems such as develop a science for each element of the job to replace old rule of thumb method, Scientifically
select employees and then train them to do the job as described in step, supervise employees to make sure they
follow the prescribed method for performing their job and continue to plan the work but use worker to actually get the
work done.

Taylor's Scientific Management: Academic records indicated that F.W. Taylor and his colleagues developed the
first systematic study in management. He initiated an innovative movement in 1910 which is identified as scientific
management. Frederick Taylor is known as the father of Scientific Management and he published Principals of
Scientific Management in which he proposed work methods designed to boost worker productivity. Taylor asserted
that to succeed in these principles, it is necessary to transform completely the part of management and labour. His
philosophy was based on some basic principles. The first principle is separation of planning and doing. In the pre-
Taylor era, an employee himself used to choose or plan how he had to do his work and what machines and equipment
would be necessary to perform the work. But Taylor divided the two functions of planning and doing, he stressed that
planning should be delegated to specialists. Second principle of Taylor's management approach is functional
foremanship. Taylor launched functional foremanship for administration and direction. Under eight-boss-scheme of
functional foremanship, four persons like route clerk, instruction card clerk, time and cost clerk and disciplinarian are
associated with planning function, and the remaining four speed boss, inspector, maintenance foreman, and gang
boss are concerned with operating function. Third principle is elements of scientific management. The main
constituents of scientific management are work study involving work important and work measurement using method
and time study, standardization of tools and equipment for workmen and improving working conditions, scientific
Selection, placement and training of workers by a centralized personal department. Fourth principle is bilateral mental
revolution. Scientific management involves a complete mental change of employees towards their work, toward their
fellow-men and toward their employers. Mental revolution is also necessary on the part of management's side, the
foreman, the superintendent, the owners and board of directions. Fifth principle is financial incentives. In order to
encourage workers to give better performance, Taylor introduced differential piece-rate system. According to Taylor,
the wage should be based on individual performance and on the position which a worker occupies. Economy is other
principle of management devised by Taylor. According to him, maximum output is achieved through division of labour
and specialization. Scientific Management concentrates on technical aspects as well as on profit and economy. For
this purpose, techniques of cost estimates and control should be adopted. Taylor concluded that science, not rule of
thumb, Harmony, not discord, Cooperation and not individualism, Maximum output, in place of restricted output.

(ii) Administrative Management: Administrative Management emphasizes the manager and the functions of
management. The main objective of Administrative management is to describe the management process and
philosophy of management. In contradiction of scientific management, which deals mainly with jobs and work at
individual level of scrutiny, administrative management gives a more universal theory of management.

Henry Fayol's Administrative Management (1841–1925): Henri fayol is known as the father of modern
Management. He was popular industrialist and victorious manager. Fayol considered that good management
practice falls into certain patterns that can be recognized and analysed. From this basic perspective, he devised a
blueprint for a consistent policy of managers one that retains much of its force to this day. Fayol provided a broad
analytical framework of the process of management. He used the word Administration for Management. Foyal
categorized activities of business enterprise into six groups such as Technical, Financial, Accounting, Security, and
Administrative or Managerial. He stressed constantly that these managerial functions are the same at every level of
an organization and is common to all firms. He wrote General and Industrial Management. His five function of
managers were plan, organize, command, co-ordinate, and control. Principal of administrative management:
1.Division of labour, 2.Authority & responsibility, 3.Discipline, 4.Unity of command, 5.Unity of direction,
6.Subordination of individual interests to general interest, 7.Remuneration of personnel, 8.Centralization, 9.Scalar
chain, 10.Order, 11.Equity, 12.Stability of tenure, 13.Initiative and14 .Esprit de corps (union of strength). These 14
principles of management serve as general guidelines to the management process and management practice. His
principles of management are described below.

1. Division of work: This is the principle of specialization which is detailed by economists as an important to
efficiency in the utilization of labour. Fayol goes beyond shop labour to apply the principle to all kinds of
work, managerial as well as technical.
2. Authority and responsibility: In this principle, Fayol discovers authority and responsibility to be linked with
the letter, the consequence of the former and arising from the latter.
3. Discipline: This discipline denotes "respect for agreements which are directed at achieving obedience,
application, energy and the outward marks of respect". Fayol declares that discipline requires good
superiors at all levels, clear and fair agreement, and judicious application of penalties.
 4. Unity of command: This is the principle that an employee should receive orders from one superior only.
5. Unity of direction: Fayol asserted that unity of direction is the principle that each group of activities having
the same objective must have one head and one plan. As distinguished from the principle of unity of
command, Fayol observes unity of direction as related to the functioning of personnel.
6. Subordination of individual interest to general interest: In any group the interest of the group should
supersede that of the individual. When these are found to differ, it is the function of management to
reconcile them.
7. Remuneration of personnel: Fayol recognizes that salary and methods of payment should be fair and give
the utmost satisfaction to worker and boss.
8. Centralization: Fayol principle of centralization refers to the extent to which authority is concentrated or
dispersed in an enterprise. Individual circumstances will determine the degree of centralization that will give
the best overall yield.
9. Scalar chair: Fayol believe of the scalar chair as a line of authority, a 'Chain of Superiors" from the highest
to the lowest ranks and held that, while it is an error of subordinate to depart 'needlessly' from lines of
authority, the chain should be short-circuited when scrupulous following of it would be detrimental.
10. Order: Breaking this principle into 'Material order' and 'Social Order', Fayol thinks of it as the simple edge of
"a place for everything (everyone), and everything (everyone) in its (his) place". This is basically a principle
of organization in the arrangement of things and persons.
11. Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from personnel by a
combination of kindliness and justice in managers dealing with subordinates.
12. Stability of tenure of personnel: Finding that such instability is both the cause and effect of bad
management, Fayol indicated the dangers and costs of unnecessary turnover.
13. Initiative: Initiative is envisaged as the thinking out and execution of a plan. Since it is one of the "Keenest
satisfactions for an intelligent man to experience", Fayol exhorts managers to "Sacrifice Personal Vanity" in
order to permit subordinates to exercise it.
14. Esprit de corps: This is the principle that 'union is strength' an extension of the principle of unity of
command. Fayol here emphasizes the need for teamwork and the importance of communication in
obtaining it.

(iii) Bureaucratic Management:.

Bureaucratic management denotes to the perfect type of organization. Principal of Bureaucracy include clearly
defined and specialized functions, use of legal authority, hierarchical form, written rules and procedures, technically
trained bureaucrats, appointment to positions based on technical expertise, promotions based on competence and
clearly defined career paths. The German sociologist, Max Weber recognized as father of modern Sociology who
appraised bureaucracy as the most logical and structure for big organization. With his observation in business world,
Weber summarized that earlier business firms were unproductively managed, with decisions based on personal
relationships and faithfulness. He proposed that a form of organization, called a bureaucracy, characterized by
division of labour, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based
on ability, would lead to more well-organized management. Weber also argued that authoritative position of managers
in an organization should be based not on tradition or personality but on the position held by managers in the
organizational hierarchy.

Max Weber (1864-1920) devised a theory of bureaucratic management that emphasized the need for a firmly defined
hierarchy governed by clearly defined regulations and lines of authority. He considered the perfect organization to
be a bureaucracy whose activities and objectives were reasonably thought out and whose divisions of labour were
clearly defined. Weber also believed that technical capability should be emphasized and that performance
evaluations should be made completely on the basis of merit. Presently, it is considered that bureaucracies are huge,
impersonal organizations that put impersonal competence ahead of human needs. Like the scientific management
theorists, Weber sought to advance the performance of socially important organizations by making their operations
predictable and productive. Although we now value innovation and flexibility as much as efficiency and predictability,
Weber's model of bureaucratic management evidently advanced the development of vast corporations such as Ford.
Bureaucracy was a particular pattern of relationships for which Weber saw great promise. Although bureaucracy has
been successful for many companies, in the competitive global market of the 1990s organizations such as General
Electric and Xerox have adopted bureaucracy, throwing away the organization chart and replacing it with ever-
changing constellations of teams, projects, and alliances with the goal of unleashing employee creativeness.

Chester I. Barnard: Chester Barnard (1886-1961) also devised components to classical theory such as Follett that
would be further developed in later schools. Barnard, who became president of New Jersey Bell in 1927, used his
work experience and his wide reading in sociology and philosophy to devise theories about organizations. Barnard
stated that people join in formal organizations to accomplish such goals that cannot be fulfilled by working alone. But
as they follow the organization's goals, they must also gratify their individual needs. Barnard came to conclusion that
an enterprise can operate efficiently and survive only when the organization's goals are kept in balance with the aims
and needs of the individuals working for it. Barnard denotes a principle by which people can work in stable and
mutually constructive relationships over time. Barnard believed that individual and organizations purposes must be
in balance if managers understood an employee's zone of indifference that is, what the employee would do without
questioning the manager's authority. Apparently, the more activities that fell within an employee's zone of indifference
the smoother and more cooperative an organization would be. Barnard also believed that managers had a duty to
inspire a sense of moral purpose in their employees. To do this, they would have to learn to think beyond their narrow
self-interest and make an ethical promise to society. Although Barnard emphasized the work of administrative
managers, he also focused substantial attention on the role of the individual employee as the basic strategic factor
in organization.

Modern Management Approaches

Behavioural Approach: Numerous theorists developed the behavioural approach of management thought as they
observed weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency,
process, and principles. Some management scholars considered that this thought ignored important aspects of
organizational life, particularly as it related to human behaviour. Therefore the behavioural approach concentrated
on the understanding of the factors that affect human behaviour at work. This is an improved and more matured
description of human relations approach. The various theorists who have great contribution in developing principles
of management in this are Douglas Mc Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert.
Behavioural Scientists hold the classical approach as highly mechanistic, which finds to degrade the human spirit.
They choose more flexible organization structures and jobs built around the capabilities and talent of average
employees. The behavioural approach has based the numerous principles.

1. Decision-making is done in a sub-optimal manner, because of practical and situational constraints on

human rationality of decision-making. The behaviourists attach great weight age on participative and group
decision-making.
2. Behavioural Scientists promote self-direction and control instead of imposed control.
3. Behavioural Scientists believe the organization as a group of individuals with certain goals.
 4. Behavioural scientists perceive that the democratic-participative styles of leadership are enviable, the
autocratic, task oriented styles may also be appropriate in certain situation.
5. Behavioural scientists propose that different people react differently to the same situation. No two people
are exactly similar and manager should tailor his attempts to influence his people according to their needs.
6. Behavioural scientists identify that organizational variance and change are predictable.

Approach of Mary parker follett: Mary Parker Follett (1868-1933) developed classic structure of the classical
school. However, she initiated many new elements particularly in the area of human relations and organizational
structure. In this, she introduced trends that would be further developed by the talented behavioural and management
science schools. Follett was persuaded that no one could become a whole person except as a member of a group.
Human beings grew through their relationships with others in organizations. In fact, she explained management as
"the art of getting things done through people." She took for granted Taylor's statement that labour and management
shared a common purpose as members of the same organization, but she considered that the artificial difference
between managers and subordinates is vague in this natural partnership. She believed in the power of the group,
where individuals could combine their diverse talents into something bigger. Moreover, Follett's "holistic" model of
control took into account not just individuals and groups, but the effects of such environmental factors as politics,
economics, and biology. Follett's model was significant precursor of the idea that management meant more than just
what was happening inside a particular organization.

Maslow's theory of self-actualisation: His theory is recognized as Hierarchy of Needs. It is illustrated in a pyramid
and elucidates the different levels and importance of human's psychological and physical needs. It can be used in
business by managers to better understand employee motivation. The general needs in Maslow's hierarchy include
physiological needs (food and clothing), safety needs (job security), social needs (friendship), self-esteem, and self-
fulfilment or actualisation. Maslow's Hierarchy of Needs relates to organizational theory and behaviour because it
explores a worker's motivation. Some people are prepared to work just for money, because of friends, or the fact that
they are respected by others and recognized for their good work. The final level of psychological development that
can be achieved when all basic and mental needs are fulfilled and the "actualization" of the full personal potential
takes place. In the organizational situation, if an employee's lower need on the hierarchy is not met, then the higher
ones are ignored. For example, if employees are worried that they will be fired, and have no job security, they will be
concerned about friendship and respect.

Douglas McGregor theory of management suggested that there is need to motivate employees through authoritative
direction and employee self-control and he introduced the concept of Theory X and Y. Theory X is a management
theory focused more on classical management theory and assumes that workforce need a high amount of supervision
because they are inherently lazy. It presupposes that managers need to motivate through coercion and punishment.
Theory Y is a management theory that assumes employees are determined, self-motivated, exercise self-control,
and generally enjoy mental and physical work duties. Theory Y is in line with behavioural management theories.
Theory X and Theory Y relates to Maslow's hierarchy of needs in how human behaviour and motivation is the main
priority in the workplace in order to maximize output. Theory X: The theory that employees are inherently lazy and
irresponsible and will tend to avoid works unless closely supervised and given incentives, contrasted with Theory Y.
Theory Y: The theory that employees are capable of being ambitious and self-motivated under suitable conditions,
contrasted with Theory X.

An influential theorist in behaviour approach of management thought was Likert. His principles based on four System
such as supportive relationships between organizational members, multiple overlapping structures, with groups
consisting of superiors and their subordinates, group problem solving by consensus within groups and overlapping
memberships between groups by members who serve as linking pins.

Human Relations Approach: The human rationalists which is also denotes to neo-classicists, focused as human
aspect of business. These theorists emphasize that organization is a social system and the human factor is the most
vital element within it.

There are numerous basic principles of the human relations approach that are mentioned below:

1. Decentralization: The concept of hierarchy employed by classical management theorists is replaced with
the idea that individual workers and functional areas (i.e., departments) should be given greater autonomy
and decision-making power. This needs greater emphasis on lateral communication so that coordination of
efforts and resources can occur. This communication occurs via informal communication channels rather
than the formal, hierarchical ones.
2. Participatory Decision-Making: Decision-making is participatory in the sense that those making decisions
on a day-to-day basis include line workers not normally considered to be "management." The greater
sovereignty afforded individual employees and the subsequent reduction in "height" and increase in span of
control of the organizational structure requires that they have the knowledge and ability to make their own
decisions and the communication skill to coordinate their efforts with others without a nearby supervisor.
3. Concern for Developing Self-Motivated Employees: The importance on a system of decentralized and
autonomous decision-making by members of the organization necessitates that those members be
extremely "self-motivated". Goal of managers in such an organization is to design and implement
organizational structures that reward such self-motivation and autonomy. Another is to negotiate working
relationships with subordinates that foster effective communication in both directions.

Therefore, the human relations approach implies modifications in the structure of the organization itself, in the nature 4.
of work, and in the association between manager and assistant. Each of these changes depends upon assumptions
about the individual, the organization, and communication, just like any other theory of organizations. Elton Mayo
and others conducted experiments that was known as Hawthorne experiments and explored informal groupings,
informal relationships, patterns of communication, and patterns of internal leadership. Elton Mayo is usually popular
as father of Human Relations School. The human relationists, advocates the several factors after conducting
Hawthorne experiments which are mentioned below.

1. Social system: The organization in general is a social system consists of numerous interacting parts. The
social system established individual roles and establishes norms that may differ from those of formal
organization.
2. Social environment: The social climate of the job affects the workers and is also affected.
3. Informal organization: The informal organization does also exist within the frame work of formal
organization and it affects and is affected by the formal organization.
4. Group dynamics: At the place of work, the workers often do not act or react as individuals but as members
of group. The group plays an important role in determining the attitudes and performance of individual
workers.
5. Informal leader: There is an appearance of informal leadership as against formal leadership and the
informal leader sets and enforces group norms.
 6. Non-economic reward: Money is an encouraging element but not the only motivator of human behaviour.
Man is diversely motivated and socio psychological factors act as important motivators.

Behavioural Science: Behavioural science and the study of organizational behaviour emanated during 1950s
and1960s. The behavioural science approach was a natural development of the human relations movement. It
concentrated on applying conceptual and analytical tools to the problem of understanding and foresees behaviour in
the place of work. The behavioural science approach has contributed to the study of management through its
elements of personality, attitudes, values, motivation, group behaviour, leadership, communication, and conflict,
among other issues.

Contingency Approach: This approach of management thought focuses on management principles and concepts
that have no general and universal application under all conditions. Joan Woodward in the 1950s has contributed to
develop this approach in management. Contingency school states that management is situational and the study of
management recognize the important variables in the situation. It distinguishes that all the subsystem of the
environment are interconnected and interrelated. By studying their interrelationship, the management can find
resolution to specific situation. Theorists stated that there is not effective way of doing things under all business
conditions. Methods and techniques which are extremely effective in one situation may not give the same results in
another situation. This approach proposes that the role of managers is to recognize best technique in particular
situation to accomplish business goals. Managers have to develop situational understanding and practical selectivity.
Contingency visions are applicable in developing organizational structure, in deciding degree of decentralization, in
motivation and leadership approach, in establishing communication and control systems, in managing conflicts and
in employee development and training. The contingency approach is associated with applying management
principles and processes as dictated by the sole characteristics of each situation. It depends on various situational
factors, such as the external environment, technology, organizational characteristics, characteristics of the manager,
and characteristics of the subordinates. Contingency theorists often implicitly or explicitly disapprove the classical
approach as it focuses on the universality of management principles.

The Quantitative Approach Of Management Thought

The quantitative approach aimed at enhancing the process of decision making through the use of quantitative
techniques. It is evolved from the principles of scientific management.

1. Management Science (Operations Research): Management science which is also known as operations
research utilized mathematical and statistical approaches to resolve management issues. It was developed
during World War II as strategists attempted to apply scientific knowledge and methods to the intricate
troubles of war. Industry started to apply management science after the war. The introduction of the
computer technology made many management science tools and concepts more practical for industry
2. Production and Operations Management: This approach emphasizes the operation and control of the
production process that changes resources into manufactures goods and services. This approach is
emerged from scientific management but became a specific area of management study after World War II.
It uses many of the devices of management science. Operations management underlines productivity and
quality of both manufacturing and service organizations. W. Edwards Deming exercised a great influence in
developing contemporary ideas to improve productivity and quality. Major areas of study within operations
management include capacity planning, facilities location, facilities layout, materials requirement planning,
scheduling, purchasing and inventory control, quality control, computer integrated manufacturing, just-in-
time inventory systems, and flexible manufacturing systems.
Systems Approach Of Management Thought
The systems approach deals with the thoroughly understanding the organization as an open system that converts
inputs into outputs. The systems approach has great impact on management thought in the 1960s. During this period,
thinking about managing practices allowed managers to relate different specialties and parts of the company to one
another, as well as to external environmental factors. The system approach focuses on the organization as a whole,
its communication with the environment, and its need to achieve equilibrium.

System approach

To summarize, there are important theories of Management and each theory has distinct role to knowledge of what
managers do. Management is an interdisciplinary and global field that has been developed in parts over the years.
Numerous approaches to management theory developed that include the universal process approach, the
operational approach, the behavioural approach, the systems approach, the contingency approach and others. F W
Taylor, Adam Smith, Henry Fayol, Elton Mayo and others have contributed to the development of Management
concept. The classical management approach had three major categories that include scientific management,
administrative theory and bureaucratic management. Scientific management highlighted the scientific study of work
methods to improve worker efficiency. Bureaucratic management dealt with the characteristics of an perfect
organization which operates on a rational basis. Administrative theory explored principles that could be used by
managers to synchronise the internal activities of organizations. The behavioral approach emerged mainly as an
outcome of the Hawthorne studies. Mary Parker Follet, Elton Mayo and his associates, Abraham Maslow, Douglas
McGregor and Chris Argyris were main players of this school.

TOTAL QUALITY MANAGEMENT.

Total quality management (TQM) is a philosophy or approach to management that focuses on
managing the entire organization to deliver quality goods and services to customers. This approach
to management was implemented in Japan after World War II and was a major factor in their
economic renaissance. TQM has at least four major elements. Employee involvement is essential in
preventing quality problems before they occur. A customer focus means that the organization must
attempt to determine customer needs and wants and deliver products and services that address
them.
Benchmarking means that the organization is always seeking out other organizations that perform a
function or process more effectively and using them as a standard, or benchmark, to judge their own
performance. The organization will also attempt to adapt or improve the processes used by other
companies. Finally, a philosophy of continuous improvement means that the organization is
committed to incremental changes and improvements over time in all areas of the organization. TQM
has been implemented by many companies worldwide and appears to have fostered performance
improvements in many organizations. Perhaps the best-known proponent of this school of
management was W. Edwards Deming.

LEARNING ORGANIZATION.
The contemporary organization faces unprecedented environmental and technological change.
Thus, one of the biggest challenges for organizations is to continuously change in a way that meets
the demands of this turbulent competitive environment. The learning organization can be defined as
one in which all employees are involved in identifying and solving problems, which allows the
organization to continually increase its ability to grow, learn, and achieve its purpose. The organizing
principle of the learning organization is not efficiency, but problem solving. Three key aspects of the
learning organization are a team-based structure, empowered employees, and open information.
Peter Senge is one of the best-known experts on learning organizations.
Simple Interest
Simple interest is directly proportional to time and the total interest is payable at the end of the specified period usually one
year. For example Rs. 2000 is borrowed for 2 years at 9% interest rate, the interest earned will be

Rs. (2000 x 0.09 x 2) = Rs. 360. The interest I is found by the formula

I=pxnxi

Where I = Simple interest amount

P = Principal amount

i = Rate of interest

n = No. of years in the period

If one wishes to know the entire amount, S, due (principal + interest).

S = P + I = P (1 + ni)

Interest computed in this way is known as simple interest and the factor (1 + n - i) is called the interest factor.

Ordinary Simple Interest

Usually the unit of time for the interest period is taken as one year and the resulting interest rate is the rate per year. W hen
it is required to compute the interest due for a fraction of one year, it is often the practice to consider 360 days in a year.
Thus, 50 days are equal to 5036050360 of one year. Interest calculated on this basis is called "Ordinary simple interest".

Exact Simple Interest

If the interest is calculated on the basis of 365 days a year, the result is called "Exact simple interest".

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other
words,interest on interest. It is the result of reinvestinginterest, rather than paying it out, so that interest in
the next period is then earned on the principal sum plus previously accumulated interest.

The formula for calculating compound interest is:

Compound Interest = Total amount of Principal and Interest in future (or Future Value) less Principal amount
at present (or Present Value)

= [P (1 + i)n] – P

= P [(1 + i)n – 1]

(Where P = Principal, i = nominal annual interest rate in percentage terms, and n = number of compounding
periods.)