Notes Unit-I

PRINCIPLES OF MANAGEMENT – UNIT 1 - NOTES
MANAGEMENT MEANING & DEFINITION
Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because it is the
management which helps and directs the various efforts towards a definite purpose. According to
Harold Koontz, “Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which people can perform
and individuals and can co-operate towards attainment of group goals”. According to F.W.
Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the
best and cheapest way”.
Management is a purposive activity. It is something that directs group efforts towards the
attainment of certain pre - determined goals. It is the process of working with and through others
to effectively achieve the goals of the organization, by efficiently using limited resources in the
changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one
enterprise it may be launching of new products by conducting market surveys and for other it
may be profit maximization by minimizing cost.
Management involves creating an internal environment: - It is the management which puts into
use the various factors of production. Therefore, it is the responsibility of management to create
such conditions which are conducive to maximum efforts so that people are able to perform their
task efficiently and effectively. It includes ensuring availability of raw materials, determination
of wages and salaries, formulation of rules & regulations etc.
Therefore, we can say that good management includes both being effective and efficient. Being
effective means doing the appropriate task i.e, fitting the square pegs in square holes and round
pegs in round holes.Being efficient means doing the task correctly, at least possible cost with
minimum wastage of resources.
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NATURE OF MANAGEMENT
Management is an activity concerned with guiding human and physical resources such that
organizational goals can be achieved. Nature of management can be highlighted as: -
1. Management is Goal-Oriented: The success of any management activity is assessed by

its achievement of the predetermined goals or objective. Management is a purposeful
activity. It is a tool which helps use of human & physical resources to fulfill the pre-
determined goals. For example, the goal of an enterprise is maximum consumer
satisfaction by producing quality goods and at reasonable prices. This can be achieved by
employing efficient persons and making better use of scarce resources.
2. Management integrates Human, Physical and Financial Resources: In an
organization, human beings work with non-human resources like machines. Materials,
financial assets, buildings etc. Management integrates human efforts to those resources. It
brings harmony among the human, physical and financial resources.
3. Management is Continuous: Management is an ongoing process. It involves continuous
handling of problems and issues. It is concerned with identifying the problem and taking
appropriate steps to solve it. E.g. the target of a company is maximum production. For
achieving this target various policies have to be framed but this is not the end. Marketing
and Advertising is also to be done. For this policies have to be again framed. Hence this
is an ongoing process.
4. Management is all Pervasive: Management is required in all types of organizations
whether it is political, social, cultural or business because it helps and directs various
efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges,
hospitals, business firms all require management. When ever more than one person is
engaged in working for a common goal, management is necessary. Whether it is a small
business firm which may be engaged in trading or a large firm like Tata Iron & Steel,
management is required everywhere irrespective of size or type of activity.
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5. Management is a Group Activity: Management is very much less concerned with

individual’s efforts. It is more concerned with groups. It involves the use of group effort
to achieve predetermined goal of management of ABC & Co. is good refers to a group of
persons managing the enterprise.
OBJECTIVES OF MANAGEMENT
The main objectives of management are:
1. Getting Maximum Results with Minimum Efforts - The main objective of

management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2. Increasing the Efficiency of factors of Production - Through proper utilization of
various factors of production, their efficiency can be increased to a great extent which
can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn
leads to saving of time, effort and money which is essential for the growth & prosperity
of the enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures smooth and
coordinated functioning of the enterprise. This in turn helps in providing maximum
benefits to the employee in the shape of good working condition, suitable wage system,
incentive plans on the one hand and higher profits to the employer on the other hand.
4. Human betterment & Social Justice - Management serves as a tool for the upliftment
as well as betterment of the society. Through increased productivity & employment,
management ensures better standards of living for the society. It provides justice through
its uniform policies.
IMPORTANCE OF MANAGEMENT ( SIGNIFICANCE)
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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.
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.
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.
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.
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.
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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.
MANAGEMENT AS A SCIENCE
Science is a systematic body of knowledge pertaining to a specific field of study that contains
general facts which explains a phenomenon. It establishes cause and effect relationship between
two or more variables and underlines the principles governing their relationship. These principles
are developed through scientific method of observation and verification through testing.
Science is characterized by following main features:
1. Universally acceptance principles - Scientific principles represents basic truth about a

particular field of enquiry. These principles may be applied in all situations, at all time &
at all places. E.g. - law of gravitation which can be applied in all countries irrespective of
the time.
Management also contains some fundamental principles which can be applied universally
like the Principle of Unity of Command i.e. one man, one boss. This principle is
applicable to all type of organization - business or non business.
2. Experimentation & Observation - Scientific principles are derived through scientific

investigation & researching i.e. they are based on logic. E.g. the principle that earth goes
round the sun has been scientifically proved.
Management principles are also based on scientific enquiry & observation and not only
on the opinion of Henry Fayol. They have been developed through experiments &
practical experiences of large no. of managers. E.g. it is observed that fair remuneration
to personal helps in creating a satisfied work force.
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3. Cause & Effect Relationship - Principles of science lay down cause and effect
relationship between various variables. E.g. when metals are heated, they are expanded.
The cause is heating & result is expansion.
The same is true for management, therefore it also establishes cause and effect
relationship. E.g. lack of parity (balance) between authority & responsibility will lead to
ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained
easily i.e. in effectiveness. Similarly if workers are given bonuses, fair wages they will
work hard but when not treated in fair and just manner, reduces productivity of
organization.
4. Test of Validity & Predictability - Validity of scientific principles can be tested at any
time or any number of times i.e. they stand the test of time. Each time these tests will
give same result. Moreover future events can be predicted with reasonable accuracy by
using scientific principles. E.g. H2& O2 will always give H2O.
Principles of management can also be tested for validity. E.g. principle of unity of
command can be tested by comparing two persons - one having single boss and one
having 2 bosses. The performance of 1st person will be better than 2nd.
It cannot be denied that management has a systematic body of knowledge but it is not as exact as
that of other physical sciences like biology, physics, and chemistry etc. The main reason for the
inexactness of science of management is that it deals with human beings and it is very difficult to
predict their behavior accurately. Since it is a social process, therefore it falls in the area of social
sciences. It is a flexible science & that is why its theories and principles may produce different
results at different times and therefore it is a behavior science. Ernest Dale has called it as a Soft
Science.
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MANAGEMENT AS AN ART
Art implies application of knowledge & skill to trying about desired results. An art may be
defined as personalized application of general theoretical principles for achieving best possible
results. Art has the following characters -
1. Practical Knowledge: Every art requires practical knowledge therefore learning of

theory is not sufficient. It is very important to know practical application of theoretical
principles. E.g. to become a good painter, the person may not only be knowing different
colour and brushes but different designs, dimensions, situations etc to use them
appropriately. A manager can never be successful just by obtaining degree or diploma in
management; he must have also know how to apply various principles in real situations
by functioning in capacity of manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each one has
his own style and approach towards his job. That is why the level of success and quality
of performance differs from one person to another. E.g. there are several qualified
painters but M.F. Hussain is recognized for his style. Similarly management as an art is
also personalized. Every manager has his own way of managing things based on his
knowledge, experience and personality, that is why some managers are known as good
managers (like Aditya Birla, Rahul Bajaj) whereas others as bad.
3. Creativity: Every artist has an element of creativity in line. That is why he aims at
producing something that has never existed before which requires combination of
intelligence & imagination. Management is also creative in nature like any other art. It
combines human and non-human resources in useful way so as to achieve desired results.
It tries to produce sweet music by combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist becomes more
and more proficient through constant practice. Similarly managers learn through an art of
trial and error initially but application of management principles over the years makes
them perfect in the job of managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the
same manner, management is also directed towards accomplishment of pre-determined
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goals. Managers use various resources like men, money, material, machinery & methods
to promote growth of an organization.
Thus, we can say that management is an art therefore it requires application of certain principles
rather it is an art of highest order because it deals with moulding the attitude and behavior of
people at work towards desired goals.
MANAGEMENT AS BOTH SCIENCE AND ART
Management is both an art and a science. The above mentioned points clearly reveals that
management combines features of both science as well as art. It is considered as a science
because it has an organized body of knowledge which contains certain universal truth. It is called
an art because managing requires certain skills which are personal possessions of managers.
Science provides the knowledge & art deals with the application of knowledge and skills.
A manager to be successful in his profession must acquire the knowledge of science & the art of
applying it. Therefore management is a judicious blend of science as well as an art because it
proves the principles and the way these principles are applied is a matter of art. Science teaches
to ’know’ and art teaches to ’do’. E.g. a person cannot become a good singer unless he has
knowledge about various ragas & he also applies his personal skill in the art of singing. Same
way it is not sufficient for manager to first know the principles but he must also apply them in
solving various managerial problems that is why, science and art are not mutually exclusive but
they are complementary to each other (like tea and biscuit, bread and butter etc.).
The old saying that “Manager are Born” has been rejected in favor of “Managers are Made”. It
has been aptly remarked that management is the oldest of art and youngest of science. To
conclude, we can say that science is the root and art is the fruit.
Management as a Profession
A profession may be defined as an occupation that requires specialized knowledge and intensive
academic preparations to which entry is regulated by a representative body.
The essential requirements of a profession are as follows:
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1)Specialized Knowledge – A profession must have a systematic body of knowledge that can be
used for development of professionals. Every professional must make deliberate efforts to
acquire expertise in the principles and techniques. Similarly a manager must have devotion and
involvement to acquire expertise in the science of management.
2) Formal Education & Training – There are no. of institutes and universities to impart
education & training for a profession. No one can practice a profession without going through a
prescribed course. Many institutes of management have been set up for imparting education and
training. For example, a CA cannot audit the A/C’s unless he has acquired a degree or diploma
for the same but no minimum qualifications and a course of study has been prescribed for
managers by law. For example, MBA may be preferred but not necessary.
3) Social Obligations/ Responsibility – Profession is a source of livelihood but professionals

are primarily motivated by the desire to serve the society. Their actions are influenced by social
norms and values. Similarly a manager is responsible not only to its owners but also to the
society and therefore he is expected to provide quality goods at reasonable prices to the society.
4) Code of Conduct – Members of a profession have to abide by a code of conduct which

contains certain rules and regulations, norms of honesty, integrity and special ethics. A code of
conduct is enforced by a representative association to ensure self discipline among its members.
Any member violating the code of conduct can be punished and his membership can be
withdrawn. The AIMA has prescribed a code of conduct for managers but it has no right to take
legal action against any manager who violates it.
5)Representative or Professional Association – For the regulation of profession, existence of a

representative body is a must. For example, an Institute of Chartered Accountants of India
establishes and administers standards of competence for the auditors but the AIMA however
does not have any statuary powers to regulate the activities of managers.
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6). Professional Fee – The managers who act as consultants charge professional fee for the
services provided to their clients as in case of doctors. However, vast majority of managers are
salaried people as they are engaged as full time employees in various organizations.
Management can be considered a profession because of the following reasons:
1. The field of management is supported by a well-defined body of knowledge that can be

taught and learnt.
2. Management of modern organisations requires competent application of management
principles, techniques and skills. Thus, there is a need of formal education and training in
management and for this purpose many institutes of management have come up in India
and abroad which offer courses like MBA,PGDBM to create competent managers.
3. Certain associations of managers have been formed in different countries of the world .
These associations have prescribed standards of education and training for their members.
4. Several association of managers (AIMA) have prescribed code of ethics, with provisions
for monitoring individual compliance with the code and a system of sanctions for
enforcing it .
5. Managers are aware of their social responsibilities towards various groups of the society
like customers, labour, government, etc. They are guided by service motive.
Management can’t be fully regarded as a profession because it does not fulfill all the
requirements of a profession.
1. Entry to management profession is not restricted. There is no prescribed standard
qualifications and training programme to become a manager
2. Management does not have an all India representative association to prescribe
professional standards and enforce them.
3. There is no ethical code of conduct for the managers as is the case with doctors and CAs.
Thus, professionalization of management is not complete yet. However, it is moving in

that direction.
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Levels of Management
The term ‘level of management’ refers to a line of demarcation between various

managerial positions in an organization. The number of level of management increases when the
size of the business and workforce increases. There is a limit to the number of subordinates a
person can supervise. Levels of management are increased so as to achieve effective supervision.
The number of level of management cannot be increased to an unlimited extent because it
may create problems. It may complicate the communication process and make co-ordination and
control difficult. Therefore, it is desirable to restrict the number of levels of management.
According to Urwick, “in determining the number of levels which are necessary, prime regard
should be given to the span of control and not vice-versa. Forcing managers to exceed their
feasible span of control merely in order to reduce the number of levels will increase
administrative and social distance”.
In most of the big organizations there are generally four levels of management namely
Top management
Upper middle management / Intermediate management
Middle management
Lower level or first line management
Top level management

Top level management of a company consists of the board of directors and the chief executive or
the managing director. It is the ultimate source of authority and it establishes goals and policies
for the enterprise. It devotes more time on the planning and coordinating function. It can issue
orders and instructions and lay down guidelines which must be followed.
The responsibilities of the chief executive position include interpreting of organizational policies
and communicating goals of the organization. The chief executive thinks and takes decision for
the long run welfare of enterprise. He puts into effects the policy decision taken by the board and
maintains effective coordination in the organization.
The functions performed by the top management are stated below:-
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Top management lays down the objectives of the enterprise.

It prepares strategic plans and policies for the enterprise.
It issues necessary instructions for the preparations of departmental budgets, schedules,
procedures etc.
It appoints the executives of different departments.
It controls the activities of all departments with the help of reports, memoranda etc.
It builds and maintains relations with the outside public.
It coordinates the activities of different departments.
Upper middle or intermediate management

Upper middle management consists of heads of various divisions. Production director, finance
director & marketing director comprise the intermediate or upper middle management. The
heads of functional division are in constant touch with the top management.
The perform following functions:-
Upper middle management lays down plans and policies for the middle management.
The put the top management plans into practice.
They coordinate the functioning of their divisions.
They appraise and control the functioning of their divisions.
They appraise and control the functioning of middle management.
They give directions and guidance to the lower levels.
They prepare reports about the progress of their divisions for use by the top management.
Middle level management

Middle level management generally consists of head of functioning departments. They are
responsible to the top management for the efficient functioning of their departments. They
devote more time to the organization and direction functions of management. The middle level
of managers includes branch managers, superintendents and head of various sections.
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Mary C Niles. In her book “MIDDLE MANGEMENT”, has laid down the seven functions of
middle management, which are as follows:-
To run the details of the organization, leaving the top managers as free as possible of their
responsibilities.
To cooperate in making a smoothly functioning organization.
To understand the interlocking of departments in major policies.
To achieve the coordination between the different parts of the organization.
To build up a contented and efficient staff where reward is given according to capacity and merit
and not according to chance or length of service.
To develop leaders for the future by training and experience.
To built a team spirit where all are working to provide a product or service wanted by the
society.
Supervisory or lower level management

Supervisory management refers to those executives whose work is to oversee and direct
operative employees. This level includes supervisors, foremen, finance and accounts officers,
sales officer etc. The essential features of this level is that managers at this level are in direct
contact with the operative employees.
Managers at the lowest level are also known as first line supervisors. They represent a link b/w
the management and the workers.
The important functions of a supervisors or lower level executive are listed below:-
To plan and organize the activities of the group.
To arrange for necessary materials, machines, tools etc for workers and to provide them the
necessary working environment.
To provide training to the workers.
To solve problems of workers.
To supervise and guide the subordinates.
To communicate worker’s problems to the higher level management.
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Intensity of management functions at different levels

From the above discussion, it can be concluded that all managers top, middle and first line
perform the same managerial functions. The main difference between their jobs in terms of
management functions is emphasis.
The top management spends more time on planning and organizing than does the middle and
first line management. The middle management spends more time on directing and controlling
than the top management. The first line managers devote less time on planning and organizing
and more time on directing and controlling. Thus the time and effort spent on different functions
will depend on the level on which the manager in functioning in managerial hierarchy.
Functions of Management
Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements and activities. These activities
are different from operative functions like marketing, finance, purchase etc. Rather these
activities are common to each and every manger irrespective of his level or status.
Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating and
controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to
command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P
stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R
for reporting & B for Budgeting. But the most widely accepted are functions of management
given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and
Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.
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1.
The functions of management are as follows:
PLANNING
Planning is the most basic or primary function of management. Planning is a mental process
requiring the use of intellectual faculties, foresight and sound judgement. It is the determination
of a course of action to achieve the desired result.
Planning involves deciding in advance what to do, when to do it, where to do it, how to do it,
who is to do it and how the results are to be evaluated.
Thus, planning is the systematic thinking about the ways and means for the accomplishment of
pre-determined objectives.
Planning is looking ahead and preparing for the future. Planning bridges the gap between where
we are and where we want to go. It is a must to ensure effective utilization of human and non-
human resources to achieve the desired goals. It has to be done at all levels of management- top,
middle and supervisory
The process of planning consists of:
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1. Determination of objectives.
2. Forecasting and choice of a course of action.
3. Formulation of policies, programmes, budgets, schedules etc. to achieve the objectives.
4. Laying down of procedures and standards of performance.
ORGANIZING
Once plans are formulated, the next step is that of organizing. Organizing is the process of
establishing harmonious authority- responsibility relationships among the members of enterprise.
It is the function of creating a structure of duties and responsibilities. It is the managerial activity
by which management brings together the manpower and material resources for the achievement
of pre-determined objectives.
The process of organizing consists of:
1. Determining and defining the activities required for the achievement of planned goals
2. Grouping the activities so as to create well defined jobs.
3. Assigning the duties and activities to specific positions and people.
4. Defining and fixing responsibility for performance.
5. Delegating authorities to these people and positions.
6. Establishing horizontal and vertical authority- responsibility relationships through out the
organization.
STAFFING
Staffing is the process of filling all positions in the organization with adequate and qualified
personnel. According to Koontz o’ Donnell, The managerial function of staffing involves
manning the organizational structure through proper and effective selection, appraisal and
development of personnel.
Staffing comprises the following sub functions:

1. Manpower planning involving determination of the number and the kinds of personnel
required.
2. Recruitment for attracting suitable personnel to seek jobs in the enterprise.
3. Selection of the most suitable persons for the jobs under consideration.
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4. Placement & orientation of employees.

5. Transfer,Promotion of the employees.
6. Training & development of employees.
DIRECTING
Directing is the managerial function of guiding, supervising, motivating and leading people
towards the attainment of planned targets of performance. In the process of directing these
subordinates, a manager takes active steps to ensure that the employees accomplish their tasks
according to the established plans.
Directing embraces following activities:
1. Issuing orders and instructions i.e. leadership
2. Supervising people at work for certain objectives i.e. Motivation.
3. Establishing understanding with employees i.e. communication.
4. Influencing the behavior of employees i.e. supervision
CONTROLLING
Controlling is the process of ensuring that the organization moving in the desired direction and
that progress is made towards the achievement of goals.
The process of controlling involves:
1. Establishing standards for measuring work performance.
2. Measurement of actual performance and comparing it with the standards.
3. Finding variances between the two and the reasons there of.
4. Taking remedial action to ensure attainment of objectives.
All these five steps of management are strongly required for accomplishment of organizational
goals. For e.g. in an organization, Planning, Organizing and Controlling are done at higher level
of management in order to determine the objectives, assigning duties and responsibilities,
establishing standards for measuring work performance in an organization. Similarly at middle
level Directing and Staffing for lower level is done in order to accomplish goals like manning the
organization structure and activities such as leadership, motivation, communication and
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supervision. All these activities/ steps make the process of management which accomplish the
goals such as productivity, growth, goodwill etc. of an organization
Roles of Manager
Discuss Henry Mintzberg’s classification of basic role performed by manager in modern

organization.
The job of a modern manager is very complex and multi-dimensional. Therefore, a manager has
to play several roles to perform his job effectively and efficiently.
Mintzberg has identified ten roles of a manager which are grouped into three categories. There is
some arbitrariness in this classification but it is a useful framework for analyzing and
understanding the managerial job. These jobs are inseparable and should, therefore, be viewed as
an integrated whole. For example, status as manifested in the interpersonal roles, brings
information to the manager and it is this information that enables him to perform the decision-
making role effectively.
Ten Managerial Work Roles
INTERPERSONAL ROLES
1. Figurehead- In this role a manager performs symbolic duties required by the status of his
office. Making speeches, bestowing honours, welcoming official visitors, distributing gifts to
retiring employees are of such ceremonial and social duties.
2. Leader-This role defines the manager’s relationship with his own subordinates. The manager
sets an example, legitimizes the power of subordinates and brings their needs in accord with
those of his organization.
3. Liaison-It describes a manager’s relationships with the outsiders. A manager maintains
mutually beneficial relation with other organization, government, industry groups, etc.
INFORMATIONAL ROLES
4. Monitor-It implies seeking and receiving information about his organization and external
events. An example is picking up a rumour about his organization.
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5. Disseminator-It involves transmitting information and judgments to the member of the

organization. The information relates to internal operations and the external environment. A
manager calling a staff meeting after a business trip is an example of such a role.
6. Spokesman- In this role, a manager speaks for his organization. He lobbies and defends his
enterprise. A manager addressing the trade union is an example.
DECISIONAL ROLES
7. Entrepreneur-It involves initiating change or acting as a change agent. For example, a
manager decides to launch a feasibility study for setting up a new plant.
8. Disturbance handler-This refers to taking charge when a organization face a problem or
crisis, e.g., a strike, feud between subordinates, loss of an important customer. A manager
handles conflicts, complaints and competitive actions.
9. Resource allocator- In this role a manager approves budgets and schedules, sets priorities and
distributes resources.
10. Negotiator-As a negotiator, a manager bargains with suppliers, dealers, trade union, agents,
etc.
Managerial Skills
Job of a manager has become very challenging. Several skills are, therefore required in order to
be a successful manager. The skills of an effective manager may be classified into the categories
as given below:
TECHNICAL SKILLS
It refers to the ability and knowledge in using the equipments, techniques and procedures
involves in performing specific tasks. These skills require specialize knowledge and proficiency
in the mechanics of a particular job. Ability in programming and operating computer is, for
instance, a technical skill. There are two things a manager should understand about technical
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skills. In the first place, he must know which skill should be employed in his particular enterprise
and be familiar enough with their potentiality to ask discerning questions of his technical
advisers. Secondly, a manager must understand both the role of each skill employed and the
inter-relation between the skills.
HUMAN SKILLS / BEHAVIROL / INTER PERSONAL SKILLS

Human skills refer to the ability to work effectively with other people both as individuals and as
member of a group. These are required to win co-operation of other to build effective work
teams. Such skills require a sense of feeling for other and capacity to look at things from other’s
point of view. Human skills are reflected in the way a manager perceives his supervisor,
subordinates and peers. An awareness of the importance of human skill should be part of a
manager’s orientation and such skill should be developed throughout the career. While technical
skills involve mastery of ‘things’, human skill are concerned with understanding of ‘people’.
CONCEPTUAL SKILLS
It comprises the ability to see the whole organization and the inter-relationship between its parts.
These skills refer to the ability to visualize the entire picture or to consider a situation in its
totality. Such skills help the manager to conceptualize the environment to analyze the forces
working in the situation and to take a broad and farsighted view of the organization. These, also
include the competence to understand a problem in all its aspects and to use original thinking is
solving the problem. Such competence is necessary for rational decision making.Thus, technical
skills deal with jobs, human skills with person and conceptual skills with ideas.
DECISION MAKING SKILLS / ANALYTICAL / DIAGNOSTIC SKILLS
Managers particularly at the upper level must also have decision making skills. These refer to
abilities to break down a complex problem or situation into its components , to clinically
examine its dimensions , to proceed in a logical & step by step manner. Analytical skills are
needed for problem solving and decision making, for managing complexity, for evaluating
performance and for arriving at judgements. These involve competency to solve organizational
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problems in the light of prevailing external environment in the organization are also called
DIAGNOSTIC SKILLS or ANALYTICAL SKILLS.
Diagnostic skills include ability to determine by analysis and examination, the natural and
circumstances of a particular situation.
ADMINISTRATIVE SKILLS
These involve abilities to act in a pragmatic manner, to get things done by implementing plans,
to mobilise& organize resources, to harmonise& coordinate diverse activities & to regulate
performance in an orderly manner.
CO-ORDINATION
“Co-ordination is the essence of management”. Explain the above statement and state the
principles of effective co-ordination?
CO-ORDINATION:-
Coordination is the management of interdependence in work situations. It is the Orderly
Synchronization or fitting together of the independent efforts of individuals in order to attain a
common goal. For example in the hospital, the activities of doctors, nurses, ward attendants, and
lab technicians must be properly synchronized if the patient is to receive god care. Similarly, in
the modern enterprise, which consist of a number of Departments, Such as productions,
purchase, safe, finance, personal, etc. there is need for all of them to properly time their
interdependent activities and to efficiently reunite the sub divided work.
Features Of Coordination
1. It is an essential managerial activity. It is needed at all levels of management.

2. It involves an orderly arrangement of group efforts.
3. It is a continuous process carried on by the managers.
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4. Its purpose is to secure unity of action towards common objectives.
Significance of Coordination
The basic role of a manager in an enterprise is like that of an orchestra conductor who directs the
activities of the orchestra party in such a way that it produces harmony in music. As a
coordinator, the manager performs the function of securing and maintaining unified action
throughout the organization to achieve the desired objectives.
Coordination will lead to the following advantages:

1. Better results
2. Economy and Efficiency
3. Better Utilisation of Human Resources
4. Meeting Environment Challenges
5. High Morale
CO-ORDINATION – THE ESSENCE OF MANAGEMENT:-

Several authors regard coordination as one of the functions of management. In reality, co-
ordinations is the very essence of management because the basic objective of management is to
integrate and harmonies human efforts. It is the epitome of the management process as
managerial functions are instruments to secure co-ordinations. The job of a manager can very
well be compared with that of an orchestra conductor who integrates the efforts of various
instrumentalists to product rhythm. He interprets the composer’s score so that every
instrumentalist may adjust his voice and pitch to the score. Similarly, a manager blends the
efforts of his subordinates to achieve unified actions.
Co-ordinations permeate the entire process of management running like a silken thread
through its elements. Every function of management is an exercise in co-ordinations.
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Coordination marks planning more effective, organization more well-knitted, Staffing more
realistic, directing more efficient and control more regulative.
This point may further be elaborated as follows:-

1. Planning is an exercise in co-ordination to the extent that it lays down the common
objectives of the organization. The various components of planning such as policies,
strategies. Procedures, schedules and programmes serve as means of integrating the
activities of different group and departments.
2. A sound organization student defines the interrelationship between different positions and
work units. It involves grouping of activities into homogenous departments. Authority
relationship and roles will not be clear without the integration of diverse activities.
3. The Staffing function of management seeks to put right person on different jobs. The
various function of staffing, e.g. manpower planning, recruitment, selection, training,
appraisal, etc, are performed to match job requirements and employee skills. This helps in
achieving coordination in assigning task to various individuals.
4. Under the directing function a manager attempts to influence the behaviour of individuals.
So as the secure goal-directed efforts. It is a conscious attempt to relate & integrate the
human side of the enterprise with the economic and technical aspects of the enterprise.
So, that both organizational & individual goals are accomplished.
5. Controlling Contributes to the co-ordination by making performance conforms to plans.

Standards, measurement of performance & corrective action all converge to ensure co-
ordination.
Thus, co-ordinations is achieved through the management process. No functions of management

can be performed efficiently unless it contributes to wards co-ordinations. In the words of
Koontz and O’ Donnell. “the Central task of the manger is to reconcile the differences in
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approach, efforts or interests and to harmonies the individuals goals & action, so that they will
bring group objectives” . So, the above figure shows the essential nature of the Co-ordinations.
PRINCIPLES OF EFFECTIVE CO-ORDINATION:- (TECHNIQUES)
Effective Co-ordination attack, problems as they arise, excellent co-ordination anticipates them
& prevents their occurrence. The following are some of the important principles of effective co-
ordination.
1. Direct Contact:
Mary parker Follett states that co-ordinations can be more easily achieved by direct
personal contact among the responsible people concerned. By direct personal contact, ideas,
ideals, goals, view can be discussed & misunderstanding, if any, can be classified much more
efficiently than by any other method.
2. Early Start:
Co-ordinations can be achieved more readily in the early stages of planning & policy
making. For example, while preparing the plan it self, there should be mutual consolations. By
this, the task of adjustment & integration in the process of implementation of the plan becomes
easier.
3. Continuity:
Co ordination is the continuous process & it must go on all the time, starting from the
stage of planning. Since co-ordination is the basis of the organization structure, it will have to be
continued so long as the enterprise functions.
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4. Dynamism:
Co-ordination should be continually modified in the light of changes in the internal &
external environment. In other words, co-ordination should not be rigid.
5. Clear cut Objective:

Clear cut objectives are essential for securing effective co-ordination in an enterprise. The
department manager should be told of the objectives of the enterprise & be prevailed upon to
word for the common goal of the enterprise. A Clear cut objective & its effective teaching to the
departmental heads is bound to produce uniformity of actions.
6. Clear Definition of Authority & Responsibility:

Another factor which facilitates co-ordination is the clear cut definition of authority &
responsibility for each individual & department. The clear cut authority not only reduces conflict
among the different offices but also helps in making them carry out their job with unity of
purpose further; a clear cut authority helps the manger in holding sub ordinates responsible for
violating the limits.
7. Effective Communication:
Effective communication is one of the pre requisites for proper co-ordination. Through
continuous interchange of information, individual & departmental differences can be solved &
policy changes, adjustment of programmes, programmes for the future, etc. can be discussed by
effective communication, actions or operations which are contrary to the objectives of the
enterprise can be avoided & efforts of the entire staff can be harmoniously directed towards the
realization of the stated objectives of the enterprises.
8. Precise and Comprehensive Programmes and Policies

Laying down well-defined programmes and policies is another measure for achieving
effective coordination. This brings uniformity of action because everybody understands the
programmes and policies in the same sense.
9. Cooperation
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Coordination must be accompanied by cooperation. The individuals in the organization

must be willing to help each other voluntarily. Cooperation can be brought about by keeping
harmonious relations among the people in the organization by encouraging informal contacts to
supplement formal communication and using committees for exchange of ideas and views at the
top level.
10.Effective Leadership and Supervision

Management can achieve better coordination through effective leadership and
supervision.. Effective leadership ensures coordination both at the planning and the
implementing stage. Effective supervision is necessary to guide the activities of individuals in
the proper direction.
Difference b/w Coordination & Cooperation
Co-ordination is an orderly arrangement of efforts to provide unity of action in the fulfillment of

common objective whereas co-operation denotes collective efforts of persons working in an
enterprise voluntarily for the achievement of a particular purpose. It is the willingness of
individuals to help each other.
Co-ordination is an effort to integrate effectively energies of different groups whereas co-

operation is sort to achieve general objectives of business.
Though these two are synonymous but they are different as below:
Coordination is a conscious and rational process of pulling together the different parts of an
organization and unifying them into a team to achieve predetermined goals in an effective
manner. Coordination consist of three major elements namely, balancing, timing and
integrating .
Cooperation .
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Cooperation can be brought about by keeping harmonious relations among the people in the
organization by encouraging informal contacts to supplement formal communication and using
committees for exchange of ideas and views at the top level.
Differences between Co-ordination and Co-operation
Basis Co-ordination Co-operation
Meaning It is an orderly arrangement of group It means mutual help willingly.

efforts in pursuit of common goals.
Scope It is broader than co-operation which It is termed as a part of co-ordination.

includes as well because it
harmonizes the group efforts.
Process The function of co-ordination is The functions of co-operation are

performed by top management. prepared by persons at any level.
Requirements Co-ordination is required by Co-operation is emotional in nature
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employees and departments at work because it depends on the willingness of

irrespective of their work. people working together.
Relationship It establishes formal and informal It establishes informal relationship.

relationships.
Freedom It is planned and entrusted by the It depends upon the sweet will of the
central authority & it is essential. individuals and therefore it is not
necessary.
Support It seeks wholehearted support from Co-operation without co-ordination is

various people working at various fruitless & therefore it may lead to
levels. unbalanced developments.
Therefore, existence of co-operation may prove to be effective condition or requisite for co-
ordination. But it does not mean that co-ordination originates automatically from the voluntary
efforts of the group of members. It has to be achieved through conscious & deliberate efforts of
managers, therefore to conclude we can say that co-operation without co-ordination has no fruit
and co-ordination without co-operation has no root.
MANAGEMENT Vs ADMI ISTRATION
According to Theo Haimann, “Administration means overall determination of policies, setting of

major objectives, the identification of general purposes and laying down of broad programmes and
projects”. It refers to the activities of higher level. It lays down basic principles of the enterprise.
According to Newman, “Administration means guidance, leadership & control of the efforts of the
groups towards some common goals”.
Whereas, management involves conceiving, initiating and bringing together the various elements;
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coordinating, actuating, integrating the diverse organizational components while sustaining the
viability of the organization towards some pre-determined goals. In other words, it is an art of
getting things done through & with the people in formally organized groups.
The difference between Management and Administration can be summarized under 2 categories:
-
1. Functions
2. Usage / Applicability
On the Basis of Functions: -
Basis Management Administration
Meaning Management is an art of getting things done It is concerned with formulation of

through others by directing their efforts broad objectives, plans & policies.
towards achievement of pre-determined goals.
Nature Management is an executing function. Administration is a decision-

making function.
Process Management decides who should as it & how Administration decides what is to
should he dot it. be done & when it is to be done.
Function Management is a doing function because Administration is a thinking

managers get work done under their function because plans & policies
supervision. are determined under it.
Skills Technical and Human skills Conceptual and Human skills
Level Middle & lower level function Top level function
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On the Basis of Usage: -
Basis Management Administration
Applicability It is applicable to business concerns It is applicable to non-business concerns

i.e. profit-making organization. i.e. clubs, schools, hospitals etc.
Influence The management decisions are The administration is influenced by

influenced by the values, opinions, public opinion, govt. policies, religious
beliefs & decisions of the managers. organizations, customs etc.
Status Management constitutes the Administration represents owners of the

employees of the organization who enterprise who earn return on their
are paid remuneration (in the form of capital invested & profits in the form of
salaries & wages). dividend.
Practically, there is no difference between management & administration. Every manager is

concerned with both - administrative management function and operative management function
as shown in the figure. However, the managers who are higher up in the hierarchy denote more
time on administrative function & the lower level denote more time on directing and controlling
worker’s performance i.e. management.
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The Figure above clearly shows the degree of administration and management performed by the
different levels of management
DEVELPOMENT OF MANAGEMENT THOUGHT
1. Classical Approach / Functional Approach / Empirical Approach / Management Process

Approach
2. Neo – classical Approach
3. System Approach
4. Contingency Approach
CLASSICAL APPROACH
The salient features of are as follows:-
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1. Management is viewed as a systematic network (process) of interrelated functions. The

nature and content of these functions, the mechanics by which each function is performed
and the inter relationship between these functions is the core of the classical approach.
2. On the basis of experiences of, practicing managers, principles are developed. These
principles are used as guidelines for the practicing executive and basis of management
training.
3. Functions, principles and skills of management are considered universal. They can be
applied in different situations.
4. Formal education and training is emphasized for developing managerial skills in would-
be Managers. Case study method is often used for this purpose.
5. Emphasis is placed on economic efficiency and the formal organization structure.
6. People are motivated by economic gains. Therefore, organization control economic

incentives.
Advantages / Uses of Classical Approach :
The classical approach offers a convenient framework for the education and training of
managers.
1. The observation method of case study is helpful in drawing common principles out of
past experience with some relevance for future application.
2. It focuses attention on what managers actually do.
3. It highlights the universal nature of management.
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4. It provides a scientific basis for management practice. It also provides a starting point for
researchers to verify the validity and to improve the applicability of management
knowledge. It provides a foundation on which the science of management can be built.
The classical approach, suffers from several shortcomings. Classical approach is criticised
because of the following reasons:-
1. Classical approach offers a mechanistic framework that undermines role of human factor.
2. The environmental dynamics and their effect on management have been discounted.
3. There is a positive danger in relying too much on past experiences because a principle or
technique found effective in the past may not fit a situation of future.
4. The totality of real situation can seldom be incorporated in a case study.
5. The classical approach is based on over simplified assumptions. Its principles are
ambiguous and contradictory.
Classical Approach is based on 3 PILLARS:

 BUREAUCRACY
 SCIENTIFIC MANAGEMENT
 ADMINISTRATIVE THEORY
BUREAUCRATIC APPROACH
Max Weber a German Social scientist also known as father of bureaucracy approach of
management 1910 ,made a study of different types of business organization.
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Features :
1. Division of work: There is a high degree of specialization or division of labour in a
bureaucratic organization. Tasks are divided into very specialized jobs and each member
performs his specialized function in a predictable manner.
2. Rules and regulations: Detailed and rigorous rules and regulations are laid down to
specify and govern the work behavior, rights and duties of job holders to ensure
consistency and predictability in work performance.
3. Hierarchy of authority: Each level controls the level below and is controlled by the
level above. A formal hierarchy is the basis of central planning and centralized decision
making. Each superior exercises supervision and control on his subordinates with
provision for appeal to higher authorities in the prescribed manner.
4. Technical competence: Selection and promotion of job holders are based on their
technical competence. Qualifications are prescribed for each job/ position.
5. Record – keeping: Every decision and action is recorded in a wide array of written
documents and preserved in its original as well as draft form.
6. Impersonal relations: The idea is to treat all employees equally and customers equally,
and not be influenced by individual differences. There is a rational personal
administration .people are selected on their prudential and merits are paid according to
their position in the organization.
Advantages of Bureaucratic approach:

1. Specialisation
2. Structure
3. Rationality
4. Predictability
5. Democracy
Limitations of Bureaucratic approach
1) Rigidity: Rules and regulations in bureaucracy are often rigid and inflexible . These
encourage status quo and breed resistance to change. Rigid compliance with rules and
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regulations discourage initiative and creativity. It may also provide the cover to avoid
responsibility for failures
2) Goal displacement: Rules framed to achieve organizational objectives at each level

become an end in themselves . When individuals holding office at lower level peruse
personal objectives or objectives of sub-units, the overall objectives of the organization
may be neglected . Once the objectives get so displaced, managers and other members of
the organization find it very difficult to achieve the goals of the organization.
3) Impersonality: A bureaucratic organization stresses mechanical way of doing things .

Organizational rules and regulations are given priority over individual’s needs and
emotions. The office a person holds is more important than the person himself .
Contractual obligations are given primacy over human relations.
4) Compartmentalization of objectives : Jobs are divided into watertight categories which

restricts people from performing tasks that they are capable of performing. It also
encourages preservation of jobs even when they become redundant. The sequential flow
of work may contain an element of idle time at every level.
5) Paperwork: Bureaucracy involves excessive paper work as every decision must be put in
writing. All documents have to be maintained in their draft and orginal forms. This leads
to great wastage of time , stationery and space .
6) Empire Building: People in a bureaucracy tend to use their positions and resources to
perpetuate self- interests or the interests of their sub-units . Every superior tries to
increase the number of his subordinates as if this number is considered a symbol of
power and prestige. It is hard to destroy bureaucracy even if it has outlived its utility.
7) Red Tape: Bureaucratic procedures involve inordinate delays and frustration in the
performance of tasks. The procedures are nevertheless valued , perpetuated and
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multiplied for their own sake as also to pass the buck.
ADMINISTRATIVE THEORY BY HENRY FAYOL
A principle refers to a fundamental truth. It establishes cause and effect relationship between two
or more variables under given situation. They serve as a guide to thought & actions. Therefore,
management principles are the statements of fundamental truth based on logic which provides
guidelines for managerial decision making and actions. These principles are derived: -
a. On the basis of observation and analysis i.e. practical experience of managers.

b. By conducting experimental studies.
There are 14 Principles of Management described by Henri Fayol.
1. Division of Labor
a. Henry Fayol has stressed on the specialization of jobs.
b. He recommended that work of all kinds must be divided & subdivided and
allotted to various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility
a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have
concerned authority.
d. Authority refers to the right of superiors to get exactness from their sub-ordinates
whereas responsibility means obligation for the performance of the job assigned.
e. There should be a balance between the two i.e. they must go hand in hand.
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f. Authority without responsibility leads to irresponsible behavior whereas

responsibility without authority makes the person ineffective.
3. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one boss
at a time.
b. In other words, a sub-ordinate should not receive instructions from more than one
person because -
- It undermines authority
- Weakens discipline
- Divides loyalty
- Creates confusion
- Delays and chaos
- Escaping responsibilities
- Duplication of work
- Overlapping of efforts
c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely

essential.
d. Unity of command provides the enterprise a disciplined, stable & orderly
existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan for
a group of activities having similar objectives.
b. Related activities should be grouped together. There should be one plan of action
for them and they should be under the charge of a particular manager.
c. According to this principle, efforts of all the members of the organization should
be directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. In fact, unity of command is not possible without unity of direction.
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Basis Unity of command Unity of direction
Meaning It implies that a sub-ordinate should It means one head, one plan for a
receive orders & instructions from only group of activities having similar
one boss. objectives.
Nature It is related to the functioning of It is related to the functioning of

personnel’s. departments, or organization as a
whole.
Necessity It is necessary for fixing responsibility of It is necessary for sound organization.

each subordinates.
Advantage It avoids conflicts, confusion & chaos. It avoids duplication of efforts and
wastage of resources.
Result It leads to better superior sub-ordinate It leads to smooth running of the

relationship. enterprise.
Therefore it is obvious that they are different from each other but they are dependent on each
other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically
comes from the unity of direction.
5. Equity
a. Equity means combination of fairness, kindness & justice.
b. The employees should be treated with kindness & equity if devotion is expected
of them.
c. It implies that managers should be fair and impartial while dealing with the
subordinates.
d. They should give similar treatment to people of similar position.
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e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
f. Equity is essential to create and maintain cordial relations between the managers
and sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, “at times force and harshness might become necessary
for the sake of equity”.
6. Order
a. This principle is concerned with proper & systematic arrangement of things and
people.
b. Arrangement of things is called material order and placement of people is called
social order.
c. Material order- There should be safe, appropriate and specific place for every
article and every place to be effectively used for specific activity and commodity.
d. Social order- Selection and appointment of most suitable person on the suitable
job. There should be a specific place for every one and everyone should have a
specific place so that they can easily be contacted whenever need arises.
7. Discipline
a. According to Fayol, “Discipline means sincerity, obedience, respect of authority
& observance of rules and regulations of the enterprise”.
b. This principle applies that subordinate should respect their superiors and obey
their order.
c. It is an important requisite for smooth running of the enterprise.
d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if -
- There are good superiors at all levels.

- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.
8. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
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b. It means eagerness to initiate actions without being asked to do so.

c. Fayol advised that management should provide opportunity to its employees to
suggest ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and
energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be
fair, reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the
employees.
c. Wages should be determined on the basis of cost of living, work assigned,
financial position of the business, wage rate prevailing etc.
d. Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education,
medical & residential facilities to workers.
10. Stability of Tenure
a. Fayol emphasized that employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be fixed.
b. Therefore employees should be appointed after keeping in view principles of
recruitment & selection but once they are appointed their services should be
served.
c. According to Fayol. “Time is required for an employee to get used to a new work
& succeed to doing it well but if he is removed before that he will not be able to
render worthwhile services”.
d. As a result, the time, effort and money spent on training the worker will go waste.
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e. Stability of job creates team spirit and a sense of belongingness among workers
which ultimately increase the quality as well as quantity of work.
11. Scalar Chain
a. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate
authority to the lowest”.
b. Every orders, instructions, messages, requests, explanation etc. has to pass
through Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this
short cut is known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to
facilitate quick & easy communication as explained below:
In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the
help of E and F to G which will take quite some time and by that time, it may not
be worth therefore a gang plank has been developed between the two.
e. Gang Plank clarifies that management principles are not rigid rather they are
very flexible. They can be moulded and modified as per the requirements of
situations
12. Sub-Ordination of Individual Interest to General Interest
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a. An organization is much bigger than the individual it constitutes therefore interest

of the undertaking should prevail in all circumstances.
b. As far as possible, reconciliation should be achieved between individual and
group interests.
c. But in case of conflict, individual must sacrifice for bigger interests.
d. In order to achieve this attitude, it is essential that -
- Employees should be honest & sincere.

- Proper & regular supervision of work.
- Reconciliation of mutual differences and clashes by mutual agreement.
For example, for change of location of plant, for change of profit sharing
ratio, etc.
13. Espirit De’ Corps (can be achieved through unity of command)

a. It refers to team spirit i.e. harmony in the work groups and mutual understanding
among the members.
b. Spirit De’ Corps inspires workers to work harder.
c. Fayol cautioned the managers against dividing the employees into competing
groups because it might damage the moral of the workers and interest of the
undertaking in the long run.
d. To inculcate Espirit De’ Corps following steps should be undertaken -
 There should be proper co-ordination of work at all levels
 Subordinates should be encouraged to develop informal relations among
themselves.
 Efforts should be made to create enthusiasm and keenness among
subordinates so that they can work to the maximum ability.
 Efficient employees should be rewarded and those who are not up to the
mark should be given a chance to improve their performance.
 Subordinates should be made conscious of that whatever they are doing is
of great importance to the business & society.
e. He also cautioned against the more use of Britain communication to the
subordinates i.e. face to face communication should be developed. The managers
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should infuse team spirit & belongingness. There should be no place for
misunderstanding. People then enjoy working in the organization & offer their
best towards the organization.
14. Centralization & De-Centralization
a. Centralization means concentration of authority at the top level. In other words,
centralization is a situation in which top management retains most of the decision
making authority.
b. Decentralization means disposal of decision making authority to all the levels of
the organization. In other words, sharing authority downwards is decentralization.
c. According to Fayol, “Degree of centralization or decentralization depends on no.
of factors like size of business, experience of superiors, dependability & ability of
subordinates etc.
d. Anything which increases the role of subordinate is decentralization & anything
which decreases it is centralization.
e. Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.
SCIENTIFIC MANAGEMENT by Taylor
Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of
Scientific Management’ started his career as an operator and rose to the position of chief
engineer. He conducted various experiments during this process which forms the basis of
scientific management. It implies application of scientific principles for studying & identifying
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management problems.
According to Taylor, “Scientific Management is an art of knowing exactly what you want your
men to do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is
analysed scientifically it will be possible to find one best way to do it.
Hence scientific management is a thoughtful, organized, dual approach towards the job of
management against hit or miss or Rule of Thumb.
According to Drucker, “The cost of scientific management is the organized study of work, the
analysis of work into simplest element & systematic management of worker’s performance of
each element”.
1. Development of Science for each part of men’s job (replacement of rule of thumb)
a. This principle suggests that work assigned to any employee should be observed,
analyzed with respect to each and every element and part and time involved in it.
b. This means replacement of odd rule of thumb by the use of method of enquiry,
investigation, data collection, analysis and framing of rules.
c. Under scientific management, decisions are made on the basis of facts and by the
application of scientific decisions.
2. Scientific Selection, Training & Development of Workers
a. There should be scientifically designed procedure for the selection of workers.
b. Physical, mental & other requirement should be specified for each and every job.
c. Workers should be selected & trained to make them fit for the job.
d. The management has to provide opportunities for development of workers having
better capabilities.
e. According to Taylor efforts should be made to develop each employee to his
greatest level and efficiency & prosperity.
3. Co-operation between Management & workers or Harmony not discord
a. Taylor believed in co-operation and not individualism.
b. It is only through co-operation that the goals of the enterprise can be achieved
efficiently.
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c. There should be no conflict between managers & workers.

d. Taylor believed that interest of employer & employees should be fully
harmonized so as to secure mutually understanding relations between them.
4. Division of Responsibility
a. This principle determines the concrete nature of roles to be played by different
level of managers & workers.
b. The management should assume the responsibility of planning the work whereas
workers should be concerned with execution of task.
c. Thus planning is to be separated from execution.
5. Mental Revolution
a. The workers and managers should have a complete change of outlook towards
their mutual relation and work effort.
b. It requires that management should create suitable working condition and solve
all problems scientifically.
c. Similarly workers should attend their jobs with utmost attention, devotion and
carefulness. They should not waste the resources of enterprise.
d. Handsome remuneration should be provided to workers to boost up their moral.
e. It will create a sense of belongingness among worker.
f. They will be disciplined, loyal and sincere in fulfilling the task assigned to them.
g. There will be more production and economical growth at a faster rate.
6. Maximum Prosperity for Employer & Employees
a. The aim of scientific management is to see maximum prosperity for employer and
employees.
b. It is important only when there is opportunity for each worker to attain his highest
efficiency.
c. Maximum output & optimum utilization of resources will bring higher profits for
the employer & better wages for the workers.
d. There should be maximum output in place of restricted output.
e. Both managers & workers should be paid handsomely.
TECHNIQUES OF SCIENTIFIC MANAGEMENT
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1. Time Study
a. It is a technique which enables the manager to ascertain standard time taken for
performing a specified job.
b. Every job or every part of it is studied in detail.
c. This technique is based on the study of an average worker having reasonable skill
and ability.
d. Average worker is selected and assigned the job and then with the help of a stop
watch, time is ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determined through
observations, experiment and analysis by keeping in view an average worker.
Standard Time × Working Hours = Fair Day’s Work
2. Motion Study
a. In this study, movement of body and limbs required to perform a job are closely
observed.
b. In other words, it refers to the study of movement of an operator on machine
involved in a particular task.
c. The purpose of motion study is to eliminate useless motions and determine the bet
way of doing the job.
d. By undertaking motion study an attempt is made to know whether some elements
of a job can be eliminated combined or their sequence can be changed to achieve
necessary rhythm.
e. Motion study increases the efficiency and productivity of workers by cutting
down all wasteful motions.
3. Functional Foremanship
a. Taylor advocated functional foremanship for achieving ultimate specification.
b. This technique was developed to improve the quality of work as single supervisor
may not be an expert in all the aspects of the work.
c. Therefore workers are to be supervised by specialist foreman.
d. The scheme of functional foremanship is an extension of principle pf
specialization at the supervisory level.
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e. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at

implementation level.
f. The names & function of these specialist foremen are: -
 Instruction card clerk concerned with tagging down of instructions
according to which workers are required to perform their job
 Time & cost clerk is concerned with setting a time table for doing a job &
specifying the material and labor cost involved in it.
 Route clerk determines the route through which raw materials has to be
passed.
 Shop Disciplinarians are concerned with making rules and regulations to
ensure discipline in the organization.
 Gang boss makes the arrangement of workers, machines, tools, workers
etc.
 Speed boss concerned with maintaining the speed and to remove delays in
the production process.
 Repair boss concerned with maintenance of machine, tools and
equipments.
 Inspector is concerned with maintaining the quality of product.
4. Standardization
a. It implies the physical attitude of products should be such that it meets the
requirements & needs of customers.
b. Taylor advocated that tools &equipments as well as working conditions should be
standardized to achieve standard output from workers.
c. Standardization is a means of achieving economics of production.
d. It seems to ensure -
 The line of product is restricted to predetermined type, form, design, size,
weight, quality. Etc
 There is manufacture of identical parts and components.
 Quality & standards have been maintained.
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 Standard of performance are established for workers at all levels.

5. Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker.
b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no. of pieces are
paid wages at lower rate than prevailing rate i.e. worker is penalized for his
inefficiency.
d. This system is a source of incentive to workers who improving their efficiency in
order to get more wages.
e. It also encourages inefficient workers to improve their performance and achieve
their standards.
f. It leads to mass production which minimizes cost and maximizes profits.
6. Other Techniques
a. Various other techniques have been developed to create ordeal relationship
between management and workers and also to create better understanding on part
of works.
b. Those includes use of instruction cards, strict rules & regulations, graphs, slides,
charts etc, so as to increase efficiency of workers.
CRITICISM OF SCIENTIFIC MANAGEMENT
Although it is accepted that the scientific management enables the management to put resources
to its best possible use and manner, yet it has not been spared of severe criticism.
Workers Viewpoint
1. Unemployment - Workers feel that management reduces employment opportunities from

them through replacement of men by machines and by increasing human productivity less
workers are needed to do work leading to chucking out from their jobs.
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2. Exploitation - Workers feel they are exploited as they are not given due share in
increasing profits which is due to their increased productivity. Wages do not rise in
proportion as rise in production. Wage payment creates uncertainty & insecurity (beyond
a standard output, there is no increase in wage rate).
3. Monotony - Due to excessive specialization the workers are not able to take initiative on
their own. Their status is reduced to being mere cogs in wheel. Jobs become dull.
Workers loose interest in jobs and derive little pleasure from work.
4. Weakening of Trade Union - To everything is fixed & predetermined by management.
So it leaves no room for trade unions to bargain as everything is standardized, standard
output, standard working conditions, standard time etc. This further weakens trade
unions, creates a rift between efficient & in efficient workers according to their wages.
5. Over speeding - the scientific management lays standard output, time so they have to
rush up and finish the work in time. These have adverse effect on health of workers. The
workers speed up to that standard output, so scientific management drives the workers to
rush towards output and finish work in standard time.
Employer’s Viewpoint
1. Expensive - Scientific management is a costly system and a huge investment is required

in establishment of planning dept., standardization, work study, training of workers. It
may be beyond reach of small firms. Heavy food investment leads to increase in
overhead costs.
2. Time Consuming - Scientific management requires mental revision and complete
reorganizing of organization. A lot of time is required for work, study, standardization &
specialization. During this overhauling of organization, the work suffers.
3. Deterioration of Quality
STUDY OF TAYLOR & FAYOL
Both the persons have contributed to development of science of management. The contribution
of these two pioneers in the field of science of management has been reviewed as “The work of
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Taylor &Fayol was, of course, especially complementary. They both realized that problem of
personnel & its management at all levels is the key to individual success. Both applied scientific
method to this problem that Taylor worked primarily from operative level, from bottom to
upward, while Fayol concentrated on managing director and work downwards, was merely a
reflection of their very different careers”. They both differ from each other in following aspects:
-
1. Taylor looked at management from supervisory viewpoint & tried to improve efficiency
at operating level. He moved upwards while formulating theory. On the other hand, Fayol
analyzed management from level of top management downward. Thus, Fayol could
afford a broader vision than Taylor.
2. Taylor called his philosophy “Scientific Management” while Fayol described his
approach as “A general theory of administration”.
3. Main aim of Taylor - to improve labor productivity & to eliminate all type of waste
through standardization of work & tools. Fayol attempted to develop a universal theory of
management and stressed upon need for teaching the theory of management.
4. Taylor focused his attention on fact by management and his principles are applicable on
shop floor. But Fayol concentrated on function of managers and on general principles of
management wheel could be equally applied in all.
Similarity - Both emphasized mutual co-operation between employment and employees.
Spheres of Human Activity
Fayol’s theory is more widely applicable than that of Taylor, although Taylor’s philosophy has
undergone a big change Under influence of modern development, but Fayol’s principles of
management have stood the test of time and are still being accepted as the core of management
theory.
Psychologists View Point
According to Psychologists, Taylor's study had following drawbacks: -
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1. Ignores human factors - Considers them as machines. Ignores human requirements, want
and aspirations.
2. Separation of Planning and Doing.
3. Dissatisfaction - Comparing performance with others.
4. No best way - Scientific management does not give one best way for solving problems.
Basis Taylor Fayol
Human aspect Taylor disregards human Fayol pays due regards on human
elements and there is more element. E.g. Principle of initiative,
stress on improving men, Espirit De’ Corps and Equity recognizes
materials and methods a need for human relations
Status Father of scientific Father of management principles

management
Efficiency & Stressed on efficiency Stressed on general administration

administration
Approach It has micro-approach because It has macro-approach and discuses

it is restricted to factory only general principles of management which
are applicable in every field of
management.
Scope of These principles are restricted These are applicable in all kinds of
principles to production activities organization regarding their management
affairs
Achievement Scientific management Administrative management
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NEO- CLASSICAL APPROACH
The classical theory concentrated on formal organization and ignored the human factor, the neo
classical or human relation approach was proposed as a reaction to classical approach. Neo-
classical theory may emphasis on the fact that organization is a social system and human factor is
most important in it. Elton Mayo is considered as the father of neo – classical approach.
Neo – classical approach may be analyzed in three parts, namely,
 Hawthrone Experiments
 Human Relations Movement
 Behavioural Approach
HAWTHORNE EXPERIMENTS
George Elton Mayo (1880-1949) is considered the father of neo-classical approach. He

was the leader of the team which conducted the famous Hawthorne Experiments. These
experiments were conducted during 1924-32 at a plant of the Western Electric company. The
plant was located at Hawthorne near Chicago in USA. A brief description of these experiments
is given below :
Illumination Experiment The object of this experiment was to assess the effect of illumination
on employee output. Two groups were selected from among the employees. One group was
placed in the room where lighting remained constant. The other group was placed in another
room where lighting varied periodically. Surprisingly, the output of both the groups increased
steadily. It was concluded that lighting was a minor factor and there were other more important
factors influencing the output. At this state, Mayo and his team was invited to conduct further
studies.
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Relay assembly Test Room Studies These studies were conducted in three different groups.
The test group consisted of six female workers. Frequent changes were made in working
conditions such as shorter working hours, rest periods, hot lunch, friendly and informal
supervisors, free interaction among members of the group, etc. Productivity of the group
increased even when the improvements in working conditions were withdrawn. It was
concluded that socio-psychological factors, e.g., special attention, recognition, sense of group
pride and belonging exercise a greater influence on productivity than working conditions.
Mass Interview Programme A large number of workers were interviewed to judge their
attitudes and opinions on the factors influencing productivity. It was found that the opportunity
to talk freely about things that are important to workers has a positive effect on their morale and
productivity.
Bank Wiring Observation Room Study In this experiment, a group of fourteen workers was
put under close observation. The pay of every member was made dependent on the performance
of the group as a whole. It was found that the group had its own norms of performance and
various forms of social pressure were exercised to enforce these norms. As a result output could
not increase despite group incentive scheme.
The main conclusions of Hawthorne Experiments are as follows:
A work group is not merely a techno-economic unit. It is also a social system with a culture of
its own.
Workers are not merely rational economic beings motivated simply by money. They are also
socio-psychological beings and respond to the total work situation.
Social and psychological factors exercise a greater influence on employee behaviour and
performance than physical conditions of work.
Workers act or react not as individuals but as members of a group. The informal groups have
their own norms and beliefs. These groups and their leader exercise an overriding influence on
the attitudes, behavior and performance of individual employees.
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Workers respond to the total work situation. Their behavior and performance are conditioned by
factors inside and outside the work place.
Complaints and criticism by employees are manifestations or symptoms of deeper
dissatisfaction.
Evaluation
Hawthorne Experiments proved a landmark in the evolution of management thought.

They made a significant contribution towards humanizing organization and management. These
experiments directed attention towards social and psychological needs, informal groups,
motivation, morale communication, leadership, etc. Several new sub-disciplines like industrial
psychology, individual sociology, social psychology and group dynamics emerged.
Hawthorne Experiments have been criticized on the following grounds:
Pro-management bias. In Hawthorne studies, the ends of the company were assumed to
be correct. Mayo has in fact been criticized for implying that management is always
logical whereas workers are largely driven by emotions.
Clinical Bias. The research methods used in Hawthorne Studies overstressed empirical
observations. Mayo’s work has been described as “radical empiricism”.
Wider Social Context Overlooked. Mayo omitted detailed study both of the wider social
context and its relation to work behavior, and the total work situation by ignoring the
total social situation within an organization. Mayo reduced the value of his work.
Discounted Theory. Hawthorne studies over-emphasized the importance of observation
and collection of facts and thus gravely underestimated the importance of theory as a
framework and guidance for social research.
Unscientific. Even the scientific character of Hawthorne studies has been challenged.
There was no systematic basis in the choice of work, worker and the environment. The
investigations were not carried out in a scientific manner. The effects, therefore, could
not be scientifically related to the causes.
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Doubtful Validity. The reactions of small groups of American women can hardly be
taken as sufficiently representative to provide a valid solution in different countries. The
conclusions cannot be generalized.
True but Irrelevant. The conclusions of Hawthrone Experiments are true but are
irrelevant. Some industrialists argue that the main object of a business is to make profits
rather than to keep workers happy.
Too Obvious. Social psychologists argue that the finding of Hawthorne studies are not
new but were all known long ago. Mayo does not deserve the credit for discovering the
importance of groups in social life.
Do not go far enough. Sociologists complain that Mayo investigated the factory to the
almost complete exclusion of social background.
No Mention of Trade Unions. In more than twenty thousand interviews upon which so
much of the findings were based there was an articulation on unions among the workers.
Mayo is also criticized for ignoring other relevant factors such as changes in the class and
occupational structure of America.
Despite this criticism. Hawthorne studies are regarded as “a milestone and a turning
point” in the history of man at work and in the development of management thought. These
studies challenged some of the basic postulates of the classical approach and focused attention on
the human factor in industry. The revealed the inadequacy of studying the workers in isolation
and of focusing on the physical aspects of industry. The studies indicated that an improved
understanding of the human factor in organization was necessary for achieving major gains in
productivity.
HUMAN RELATIONS MOVEMENT
Hawthorne Experiments laid the foundations for human relations movement in

management. Subsequent research contributed several concepts and techniques of human
relations. Human relations school is a socio psychological approach to management. It suggests
that a business enterprise is a social system in which group norms exercise significant influence
on the behavior and performance of individuals. Workers cannot be motivated by economic
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rewards alone. They required social satisfaction at workplace. Therefore, managers should create
such a climate in the organization that worker can feel happy. Employee counseling,
participative decision-making, cordial supervision, job enrichment and other techniques have
been suggested for keeping workers happy and satisfied. According to Keith Davis, human
relations is an area of management practice which is concerned with the integration of people
into a work situation in a way that motivates them to work together productively, cooperatively
and with satisfaction and achieve organizational goals.
The human relations school is based on the following ideas :
The Individual. According to the human relations school, each person is unique. He bring
certain attitudes, beliefs, values, skills, etc. to the job situation. Therefore, an individual is
motivated by not only economic factors but by several social and psychological factors.
The work Group. Work is a social experience and most workers find satisfaction in social or
informal groups. The norms of such groups determine to a great extent the attitudes and
performance of workers. Therefore, managers should maintain good inter-personal and inter-
group relations to maximize productivity.
The leader. As the leader of a work group, a supervisor/manager should provide a pleasant
work climate wherein employees are allowed to have a say in the decision making process. He
can gain respect and obedience by adjusting to various personalities and situations.
The work Environment. A positive work environment enables employees to satisfy their needs
as well as to achieve organizational goals. Positive work environment consists of clearly defined
goals, performance linked rewards, feed-back on performance, participative decision making,
interesting and growth oriented work, open communications, etc.
Comparison Between Human Relations and Scientific Management
HUMAN RELATIONS SCIENTIFIC MANAGEMENT

1. No universal principles 1. Principles for universal application
2. Focus on people 2. Focus on machines
3. No one best way 3. One best way of doing things
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4. Group dynamics, motivation, job 4. Time and motion studies, functional

satisfaction foremanship and wage incentives
5. Application of knowledge derived 5. Application of knowledge of

from behavioural sciences physical sciences
6. Improvements in inter personal 6. Improvement in productivity and

relations efficiency
7. Man is a social animal 7.Man is an economic animal
Contributions of human relations school

i. Human relations school has a normal justification. Employees are human being and they
are entitled to be treated with respect and dignity.
ii. Human relations approach helps to satisfy the social and psychological needs of
employees. Such satisfaction is likely to improve productivity and reduce stress Sound
human relations can result in the optimum utilisation of recourses.
iii. Human relations school highlights the people side of organised. It therefore, avoids the
imbalance caused by over emphasis on technical and administrative aspects under
scientific management and administrative theory.
iv. A true concern for workers (those vital machines would yield rich dividends).
v. Human relations school focuses attention on inter personal relations and dynamics of
work groups.
vi. It revolutionised management training by stressing people management skills and
managerial styles.
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The human relations movement quickly attracted wide attention in both academic and industrial
circles. Many firms significantly changed their approach to management. They started employee
welfare programmes to put greater attention on the human factor.
Human relations approach, has, however, been criticised on the follow points:
Unscientific- critics have questioned the scientific validity of the human relations approach.
Hawthorne experiments on which the approach is based stamps from a clinical bias as they
discounted theory. A group of American workers is representative of the total work force.
Experimental groups cannot be equated the work groups
Anti-individualistic – human realties approach advocates a highly indulgent approach towards
people which amounts to their manipulation. It replaces the control of the boss by the control of
the group forces the individual to scarify his personal values to group norms.
Short-sighted- human relation approach is based on over liberal assume assumptions about
people. It soft paddles the requirements of organisations and management and neglects the real
issue of the work situation. Interpersonal relations are considered as an end in itself and very
little attempt is made to really understand human behaviour at work. Human relations approaches
stress the social and physiological aspects at the cost of technical and economic aspects of work.
Over concern with happiness- the assumption is that happy workers productive workers. But
research has revealed no direct co-relation between moral and productivity. Human relations
approach suggests that group decision making is superior to individual decision but this may not
necessarily be true in all cases.
Negative view of conflict- human religionists believed that conflict is ways bad and must be
avoided. They failed to recognised conflict as the creative force.
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BEHAVIOURAL APPROACH
Human relations movement focused on interpersonal relations and overlook the wider subject of
organisationalbehaviour. Organisationalbehaviour involves the study of attitudes, behaviour and
performance of individual and groups organised setting. Behaviour approach includes the issue
of organisationbehaviour. It is also known as human resource approach because is tresses
development of human beings for the benefits of both the individual and the organisation.
Behavioural approach is multi- dimensional and inter – disciplinary in nature. Under it the
knowledge drawn from behavioural sciences, e.g. Psychology, sociology, anthropology, and etc.
is applied to understand, explain and predict human behaviour. Therefore this approach is also
known as behavioural science approach and other has made significant contribution s to the
devolvement of this approach.
The main propositions of behavioural science approach are as follows:
i. An organisation is a sociotechnical system.
ii. Differ in terms therefore they react differently to the same situation.
iii. People needs and goals differ from the organisation’s need and goal. Management should
achieve fusion on between organisatiaon goals and human needs.
iv. A wide range of factors influence relations among people (inter personal relations).
v. People’s behaviour as individual may be different form their behaviour members of a
group.
vi. Persons working together in an organisation form their own informal groups. Such
groups have their own norms, culture and communication systems.
vii. Informal groups exercise a significant influence on the attitudes, behaviour performance
of employees
Thus, behaviour approach is an extension and improvement of human relations movement. It
is made significant contribution towards the development of management thought.
Comparison between human relations and behaviour approach
HUMAN RELATIONS BEHAVIORAL APPROACH

1. Focus on individual, his needs and 1. Focus in groups and group behavior
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behavior
2. Highlights interpersonal relationships 2. Highlights group relationship
3. Based on Hawthorne experiments - 3. Based on human relations movement

narrow scope –wide scope
4. Emphasis on motivation, morale and 4. Emphasis on group dynamics,

job satisfaction informal organisation and motivation
through job enrichment
5. Conflict in organisation is always 5. Conflict is not only inevitable but

destructive and can and should may even be beneficial, cannot
always be minimised always be resolved
6. Modest concerns limited to 6. Broadcasts And multiple concepts

improving working conditions, such as impact of technology on jobs,
interpersonal relations, supervisory job redesign, group dynamics,
styles, communication systems for motivation, leadership, organisation
increasing job satisfaction and morale change and development
7. Pioneered by Elton Mayo and his 7. Pioneered by McGregor, Likert,

associates Keith Davis and others.
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QUANTITATIVE APPROACH
Also known as management science approach, mathematical approach. Decision theory

approach, operations research approach, etc, this approach gained momentum during and
after World War 2. During the war inter disciplinary groups of scientist called operations
research (OR) groups, were engaged undertake applied scientific research into strategic and
tactical military operations. These groups were expected to develop optimal decisions about
deployment military resources. Mathematical model building was sought to be applied to
final optimal solutions to military and logical problems.
The main postulates of the quantitative approach are as follows:
i. Management is a series of decision making. The job of a manger is secure the best
solution out of a series of inter related variables
ii. These variables can be presented in the form of mathematical model
iii. If the model is properly formulated and the equations are correctly solved one can
secure the best solution to the model
iv. Organisations exist of three achievement of specific and measurable economic goals
v. In order to achieve these goals, optimal decisions must be made through scientific
formal reasoning backed by quantification
vi. Decision making models should be evaluated in the light of set criteria like cost
reduction, return on investment, meeting time schedule
vii. The quality of management is judged by the quality of decisions made diverse
situations
Uses
i. the great importance of the study of diverse decisions situations and the means of
perfectly them
ii. it stresses the replacement of intuition and hunch by factual data and logical analysis
in the decision making process
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iii. in the way precision and perfection can be achievement improvement the quality of
managerial decisions
iv. Disciplined thinking is encouraged has led to electronic data processing, management
information systems, network analysis, linear programming and other techniques.
v. These have facilitated planning and decision ,making
Limitations
i. Management has no other functions except decision making
ii. Underrates the supreme importance of the human elements in management
iii. The mechanistic approach of this theory is devoid of reality
iv. This approach is based unrealistic assumptions
v. It suffers from the practical difficulty , if the model fails to present the real situations,
the result is likely to be erroneous and misleading
Comparison between scientific management and quantitative approach
Scientific management Quantitative approach
i. Use of scientific methods in i. Applications of operations

managing research in solving managerial
problems
ii. Focuses on improving efficiency ii. Focus on finding right answer to

of workers and machines by managerial problems
finding one best way of doing
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things
iii. Time and motion studies are its iii. Mathematical and statistical
main techniques techniques
iv. Stresses experiments and research iv. Stresses econometric models for
for improving efficiency decisions
v. F.W Taylor and his associates v. W.C Churchman and his

provide its conceptual base associates provides its conceptual
base
vi. Analysis of operating problems at vi. Management problems at all

the shop floor level levels of organisation
vii. A peaceful and fragment view of vii. Multi-disciplinary orientation and

organisations closed system integrated approach open system
perspective view of complex organisations
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SYSTEM APPROACH
Since 1950 researchers began to look at organizations from a systems viewpoint. In 1951
Weiner’s pioneering work on cybernetics developed concepts of control by information
feedback. He described an adaptive system as mainly dependent upon measurement and
correction through feedback. Later other management philosophers evolved the general system
theory (GST).This theory consists of general principles for understanding the physical,
mechanical, biological and social entities and the relationship among them.
The main elements of system approach are as follows:
1) An organization is a unified and purposeful system consisting of several interconnected,

interacting and interdependent parts.
2) The parts or components of a system are called sub- systems. Each system influences the
other sub-systems and the system as a whole. Different systems are tied together into an
organic whole through goals, authority flows, resource flows and information flows.
3) The position and function of each sub-system can be analyzed and understood only in
relation to the other sub-systems and to the organization as a whole. Similarly, the
organization as a system can be analyzed and understood only reference to its sub-
systems.
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4) Each sub-system derives its strength by its association and interaction with the other sub-
systems. As a result the collective contribution of the organization is greater than the
aggregate of individual contributions of its sub-systems. This is known as synergy.
5) Every system has a boundary that separates it from its environment. This boundary
determines which parts are internal to the organization and which are external. For
instance, employees are within the boundary whereas creditors and customers are
external to a business firm.
6) Systems are of two types. An open system continually interacts with environment (the
forces lying outside it) whereas a closed system is contained and isolated from the
environment.
7) A business enterprise is an open and dynamic system. It draws input (raw materials,
machinery, labor, finance, information, etc.) from its environment. It converts these input
into outputs (products and services, etc.) from its environment. It converts these inputs
into outputs (product and services) with the help of conversion process. The conversion
and transformation process consists of production and marketing activities and it is also
called throughput. It supplies them to the environment.
ENVIRONMENT
INPUTS
TRANSFORMATION
OUTPUTS PROCESS
FEEDBACK
AN OPEN SYSTEM VIEW OF ORGANISATION
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8) The reaction or response of the environment to the outputs is known as feedback.

Feedback is useful in evaluating and improving the functioning of the system. Therefore,
feedback is the key to system control. As an open system, organization has to adapt its
structure and processes to the environmental changes which affect its internal
functioning. In other words, an organization has to be in a steady state and in a state of
dynamic equilibrium in relation to the external environment. A steady state means
internal equilibrium and stability. Example: when an organization’s functioning is
temporarily disturbed (say, due to power shortage) it may strive to maintain balance and
regain its original position. However, if the shortage becomes a regular phenomenon, it
may have to modify its production schedule or install a power plant or adopt any other
adaptive response. It has to move from its original place to new place of equilibrium, i.e.,
dynamic equilibrium. Thus, organizations use maintenance (for steady state) and adaptive
(for dynamic equilibrium) mechanisms in order to ensure their survival and growth.
9) Some system tends to disintegrate to dissipate their energy and to become inactive. This
tendency is known as entropy. On the other hand, other systems have the tendency
(called negative entropy) towards order, activity, and perpetuation. These are able to
generate the required energy and surplus to sustain themselves.
10) Organizations operate on the principle of equi-finality, which means that they have
several alternative ways of doing the same thing or achieving the same goal. Different
initial conditions and paths are permissible to reach single final state . Similarly, a given
initial condition or state may be adopted to reach different initial states.
Evaluation:
1) System approach provides a refreshingly new thinking on organizations and their
management.
2) It calls attention to the dynamic and interrelated nature of business organization.
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3)It provides a strong conceptual framework for a meaningful analysis and understanding of
organization and their management.
4) System approach highlights inter-dependence between different elements of an organization

as well as between an organization and its environment.
5) It exhorts managers to avoid analyzing problems in isolation and to develop integrated and
wholistic approach. They should analyze and understand every problem in relation with other
problem.
6) Systems approach provides clues to the complex behavior of people in an organization. It has
become an integral part of management thought and practice.
The system approach is often criticized as being too abstract and vague. It cannot directly and
easily be applied to practical problems. It does not offer scientific tools and techniques for
practicing executive. Moreover, this approach does not recognize difference in systems. It fails to
specify the nature of action and inter-dependencies particularly between an organization and its
external environment. It fails to offer a unified body of knowledge.
CONTINGENCY APPROACH
The contingency approach is a relatively new approach to organization management. It is related

to the systems approach. The belief that organizations are open systems widened the perspective
further leading to the development of the contingency approach. It is also known as the
situational approach. It is developed by managers, consultants and researchers who tried to apply
the concepts of earlier approaches to real life situations. They found that the concepts and
techniques highly effective in one situation failed to work in other situations. The basic theme of
the contingency approach is that there is no single way of managing applicable in all situations.
The best solution is the one that is responsive to the peculiarities of the given situation.
Significant differences exist between one situation and others. Therefore, management should
deal with different situations in different ways. In other words, the effectiveness of any technique
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is contingent on the given situation. The conditions and complexities of the situation determine
which approach is applicable and effective. The approach or technique should be chosen keeping
in view the peculiarities of each situation. There should be a match or ‘fit’ between the
situational variables and management variables. It is the responsibility of management to analyze
the contingencies or conditions peculiar to each situation and then choose the right approach to
deal with it.
Contingency approach rejects universality of management concept. But it is much
more than common sense. It requires the ability to analyze and diagnose a managerial situation
correctly.it also requires knowledge and understanding of different principles, techniques and
styles of management. Use of contingency approach is not possible without the ability to match
management knowledge and skills to the demands of the given situation.
The main features of contingency approach are as follows:
1. Management is entirely situational. The application and effectiveness any technique is
contingent on the situation. In other words, the conditions and complexities of the
situation determine which measure or technique is applicable and effective.
2. Management should, therefore, match or ‘fit’ its approach to the requirements of the
particular situation.to be effective management policies and practices must respond to
environmental changes. The organization structure, the leadership style, the control
system all should be designed to fit the particular situation.
3. Since management’s success depends on its ability to cope with its environment, it should
sharpen its diagnostic skills so as to anticipate and comprehend the environmental
changes.
4. Managers should understand that there is no one best way to manage. They must not
consider management principles and techniques universal.
Example: there are several forms of organizing work. The functional structure is the most
common. But in a dynamic environment, matrix structure may be more appropriate because
of the need of the sharing authority and power. The choice of the form of organization should
made according to the requirement of the enterprise. Similarly, several incentives-monetary
and non-monetary are available for motivating employees. The choice of motivational
technique should be based on the needs and expectations of the people to be motivated. To
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take another example, an effective leader should change his/her style to match the given
situation. Thus, the contingency approach has applicability and usefulness for all the
functions of management. Contingency approach may be viewed as ‘if’ and ‘then’ approach.
If represents environmental or situational variables which are interdependent. Then
represents management variables (concepts, principles and techniques) which are dependent
on the environment.
In order to operationalize the contingency approach, managers have to take sequential steps.
1) Analyze and understand the situation.
2) Study and examine the validity of various concepts, principles and techniques to the
situation.
3) Make the right choice by matching the technique to the situation
4) Implement the choice.
Critical Evaluation
Contingency approach provides a clear view of the realities of the managerial job. The classical
approach suggests pre-conceived principles and techniques as having universal validity ignoring
the situational differences. The contingency approach avoids this organic stand and suggests
specific solutions. It is free from value judgements and exhorts managerial choices to be made in
the light of environmental factors. To this extent, the approach is open minded and pragmatic.
Contingency approach has commonsense value and wide ranging practical utility. It widens the
horizons of managers from the concepts, principles and techniques of management theory. It
promotes analytical, critical and multi-dimensional thinking with the help of which managers can
innovate new and better approaches and widen their choice.
The contingency approach does not suggest that the findings of earlier approaches are useless.
Rather it attempts to integrate them and make them contingent upon the demands of the situation.
It recognizes that managerial functions and principles are useful but should be used with
discretion and care to suit the specific situation. It accepts that organizations and the environment
are too dynamic to be effectively managed in the same manner. Managers should change their
approach and style to match the changes in the environment. This approach is more eclectic than
the other approaches.
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CRITICISM
Critics argue that it adds confusion to the practice of management by stressing that “it all
depends on the situation”. The manager is swamped with so many ideas which are humanly
impossible to comprehend. He has no tested and proven prescription to depend upon.
Critics also point out that without a theoretical foundation; it is almost impossible to research, to
gain valuable information, or develop a knowledge base.
Some critics argue that it does not incorporate all aspects of the systems theory. The approach is
very complex and suffers from paucity of literature. It suggests the reactive strategy for coping
with the environmental changes. A proactive approach would be more effective for managers. It
is also said that there is nothing new in contingency theory because even classical theorists like
Fayol cautioned managers to use principles in the light of changing conditions.
COMPARISION BETWEEN CONTINGENCY APPROACH AND SYSTEM
APPROACH
SYSTEMS APPROACH CONTINGENCY APPROACH
An organization is a goal oriented, organic type Organizations and their environment are
system consisting of interdependent and complex. The applicability and effectiveness of
interacting sub-system. any principle or technique is dependent on the
nature and behavior of each special situation.
A way of thinking about organizations at an A down-to-earth, pragmatic and action focused
abstract, philosophical level. Provides a global approach. Provides operational tools and
theoretical model for understanding techniques for analyzing and solving problems.
organizations
Treats all organizations alike irrespective of Treats each organization and each situation as
their size, culture and dynamic. a unique entity of its own.
Input-output process open system, system No specific concepts. Suggests a comparative
boundary, synergy, homeostasis, dynamic analysis of organizations to establish patterns
equilibrium, entropy and equi-finality are its of similarities and differences. Fit between
main concepts. approach and situation.
Recognize merely the interactions and Attempts to identify the nature of interactions
interdependencies among systems and sub- and interdependencies and their impact on
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systems. organizational approaches and managerial

styles.
Appears to be neutral and non-committal on Rejects the universality of principles no one
the universality of classical principles. best way of managing.
Suggests deterministic solutions of problems. Suggests probable and flexible approach to
problems.
Main focus on the internal environment Main focus on the external environment.
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PRINCIPLES OF MANAGEMENT – UNIT 1 - NOTES

MANAGEMENT MEANING & DEFINITION

1. Management is Goal-Oriented: The success of any management activity is assessed by

5. Management is a Group Activity: Management is very much less concerned with

The main objectives of management are:

1. Getting Maximum Results with Minimum Efforts - The main objective of

IMPORTANCE OF MANAGEMENT ( SIGNIFICANCE)

Essentials for Prosperity of Society - Efficient management leads to better economical

Science is characterized by following main features:

1. Universally acceptance principles - Scientific principles represents basic truth about a

2. Experimentation & Observation - Scientific principles are derived through scientific

1. Practical Knowledge: Every art requires practical knowledge therefore learning of

MANAGEMENT AS BOTH SCIENCE AND ART

3) Social Obligations/ Responsibility – Profession is a source of livelihood but professionals

4) Code of Conduct – Members of a profession have to abide by a code of conduct which

5)Representative or Professional Association – For the regulation of profession, existence of a

Management can be considered a profession because of the following reasons:

1. The field of management is supported by a well-defined body of knowledge that can be

Thus, professionalization of management is not complete yet. However, it is moving in

The term ‘level of management’ refers to a line of demarcation between various

Top level management

Top management lays down the objectives of the enterprise.

Upper middle or intermediate management

Middle level management

Supervisory or lower level management

Intensity of management functions at different levels

The functions of management are as follows:

The process of planning consists of:

Staffing comprises the following sub functions:

4. Placement & orientation of employees.

Discuss Henry Mintzberg’s classification of basic role performed by manager in modern

5. Disseminator-It involves transmitting information and judgments to the member of the

HUMAN SKILLS / BEHAVIROL / INTER PERSONAL SKILLS

DECISION MAKING SKILLS / ANALYTICAL / DIAGNOSTIC SKILLS

1. It is an essential managerial activity. It is needed at all levels of management.

4. Its purpose is to secure unity of action towards common objectives.

Coordination will lead to the following advantages:

CO-ORDINATION – THE ESSENCE OF MANAGEMENT:-

This point may further be elaborated as follows:-

5. Controlling Contributes to the co-ordination by making performance conforms to plans.

Thus, co-ordinations is achieved through the management process. No functions of management

PRINCIPLES OF EFFECTIVE CO-ORDINATION:- (TECHNIQUES)

5. Clear cut Objective:

6. Clear Definition of Authority & Responsibility:

8. Precise and Comprehensive Programmes and Policies

Coordination must be accompanied by cooperation. The individuals in the organization

10.Effective Leadership and Supervision

Difference b/w Coordination & Cooperation

Co-ordination is an orderly arrangement of efforts to provide unity of action in the fulfillment of

Co-ordination is an effort to integrate effectively energies of different groups whereas co-

Differences between Co-ordination and Co-operation

Basis Co-ordination Co-operation

Meaning It is an orderly arrangement of group It means mutual help willingly.

Scope It is broader than co-operation which It is termed as a part of co-ordination.

Process The function of co-ordination is The functions of co-operation are

Requirements Co-ordination is required by Co-operation is emotional in nature

employees and departments at work because it depends on the willingness of

Relationship It establishes formal and informal It establishes informal relationship.

Support It seeks wholehearted support from Co-operation without co-ordination is

MANAGEMENT Vs ADMI ISTRATION