UNIT-1

INTRODUCTION

Follett defined management as "the art of getting things done through people."

According to Henri Fayol, "To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."

According to Harold Koontz, "Management is the art of getting things done through and with people in formally organised groups."

Features of Management

1. Continuous and never ending process: Management is a Process. It includes four main functions, viz., Planning, Organising, Directing and Controlling. The manager has to Plan and Organise all the activities. He had to give proper Directions to his subordinates. He also has to Control all the activities. The manager has to perform these functions continuously. Therefore, management is a continuous and never ending process.

2. Getting things done through people: The managers do not do the work themselves. They get the work done through the workers. The workers should not be treated like slaves. They should not be tricked, threatened or forced to do the work. A favourable work environment should be created and maintained.

3. Result oriented science and art: Management is result oriented because it gives a lot of importance to "Results". Examples of Results like, increase in market share, increase in profits, etc. Management always wants to get the best results at all times.

4. Multidisciplinary in nature: Management has to get the work done through people. It has to manage people. This is a very difficult job because different people have different emotions, feelings, aspirations, etc. Similarly, the same person may have different emotions at different times. So, management is a very complex job. Therefore, management uses knowledge from many different subjects such as Economics, Information Technology, Psychology, Sociology, etc. Therefore, it is multidisciplinary in nature.

5. A group and not an individual activity: Management is not an individual activity. It is a group activity. It uses group (employees) efforts to achieve group (owners) objectives. It tries to satisfy the needs and wants of a group (consumers). Nowadays, importance is given to the team (group) and not to individuals.

6. Follows established principles or rules: Management follows established principles, such as division of work, discipline, unity of command, etc. These principles help to prevent and solve the problems in the organisation.

7. Aided but not replaced by computers: Now-a-days, all managers use computers. Computers help the managers to take accurate decisions. However, computers can only help management. Computers cannot replace management. This is because management takes the final responsibility. Thus Management is aided (helped) but not replaced by computers.

8. Situational in nature: Management makes plans, policies and decisions according to the situation. It changes its style according to the situation. It uses different plans, policies, decisions and styles for different situations.

The manager first studies the full present situation. Then he draws conclusions about the situation. Then he makes plans, decisions, etc., which are best for the present situation. This is called Situational Management.

9. Need not be an ownership: In small organisations, management and ownership are one and the same. However, in large organisations, management is separate from ownership. The managers are highly qualified professionals who are hired from outside. The owners are the shareholders of the company.

10. Both an art and science: Management is result-oriented. Therefore, it is an Art. Management conducts continuous research. Thus, it is also a Science.

11. Management is all pervasive: Management is necessary for running a business. It is also essential for running business, educational, charitable and religious institutions. Management is a must for all activities, and therefore, it is all pervasive.

12. Management is intangible: Management is intangible, i.e. it cannot be seen and touched, but it can be felt and realised by its results. The success or failure of management can be judged only by its results. If there is good discipline, good productivity, good profits, etc., then the management is successful and vice-versa.

13. Uses a professional approach in work: Managers use a professional approach for getting the work done from their subordinates. They delegate (i.e. give) authority to their subordinates. They ask their subordinates to give suggestions for improving their work. They also encourage subordinates to take the initiative. Initiative means to do the right thing at the right time without being guided or helped by the superior.

14. Dynamic in nature: Management is dynamic in nature. That is, management is creative and innovative. An organisation will survive and succeed only if it is dynamic. It must continuously bring in new and creative ideas, new products, new product features, new ads, new marketing techniques, etc.

IMPORTANCE OF MANAGEMENT:

1. Encourages Initiative: Management encourages initiative. Initiative means to do the right thing at the right time without being told or influenced by the superior. The employees should be encouraged to make their own plans and also to implement these plans. Initiative gives satisfaction to employees and success to organisation.

2. Encourages Innovation: Management also encourages innovation in the organisation. Innovation brings new ideas, new technology, new methods, new products, new services, etc. This makes the organisation more competitive and efficient.

3. Facilitates growth and expansion: Management makes optimum utilisation of available resources. It reduces wastage and increase efficiency. It encourages team work and motivates employees. It also reduces absenteeism and labour turnover. All this results in growth, expansion and diversification of the organisation.

4. Improves life of workers: Management shares some of its profits with the workers. It provides the workers with good working environment and conditions. It also gives the workers many financial and non-financial incentives. All this improves the quality of life of the workers.5. Improves corporate image: If the management is good, then the organisation will produce good quality goods and services. This will improve the goodwill and corporate image of the organisation. A good corporate image brings many added benefits to the organisation.

6. Motivates employees: Management motivates employees by providing financial and non-financial incentives. These incentives increase the willingness and efficiency of the employees. This results in boosting productivity and profitability of the organisation. 7. Optimum use of resources: Management brings together the available resources. It makes optimum (best) use of these resources. This brings best results to the organisation.

8. Reduces wastage: Management reduces the wastage of human, material and financial resources. Wastage is reduced by proper production planning and control. If wastage is reduced then productivity will increase.

9. Increases efficiency: Efficiency is the relationship between returns and cost. Management uses many techniques to increase returns and to reduce costs. Higher efficiency brings many benefits to the organisation. 10. Improves relations: Management improves relations between individuals, groups, departments and between levels of management. Better relations lead to better team work. Better team work brings success to the organisation.

11. Reduces absenteeism and labour turnover: Absenteeism means the employee is absent without permission. Labour Turnover means the employee leaves the organisation. Labour absenteeism and turnover increases the cost and causes many problems in the smooth functioning of the organisation. Management uses different techniques to reduce absenteeism and labour turnover in the organisation.

12. Encourages Team Work: Management encourages employees to work as a team. It develops a team spirit in the organisation. This unity brings success to the organisation.

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.

LEVELS OF MANAGEMENT:

Meaning of Levels of Management

Many managers work in an organisation. However, these managers do not work at the same level. They work and operate at different positions. Hierarchy of these managerial positions is called Levels of Management.

Three Levels of Management

Generally, there are Three Levels of Management, viz.,

1. Administrative or Top Level of Management.2. Executive or Middle Level of Management.3. Supervisory or Lower Level of Management.

At each level, individual manager has to carry out different roles and functions.

Diagram of Levels of Management

Top Level of Management

The Top Level Management consists of the Board of Directors (BOD) and the Chief Executive Officer (CEO). The Chief Executive Officer is also called General Manager (GM) or Managing Director (MD) or President. The Board of Directors are the representatives of the Shareholders, i.e. they are selected by the Shareholders of the company. Similarly, the Chief Executive Officer is selected by the Board of Directors of an organisation.

The main role of the top level management is summarized as follows :-

1. The top level management determines the objectives, policies and plans of the organisation.

2. They mobilises (assemble and bring together) available resources.3. The top level management does mostly the work of thinking, planning and deciding.

Therefore, they are also called as the Administrators and the Brain of the organisation.4. They spend more time in planning and organising.5. They prepare long-term plans of the organisation which are generally made for 5 to 20

years.6. The top level management has maximum authority and responsibility. They are the

top or final authority in the organisation. They are directly responsible to the Shareholders, Government and the General Public. The success or failure of the organisation largely depends on their efficiency and decision making.

7. They require more conceptual skills and less technical Skills.

Middle Level of Management

The Middle Level Management consists of the Departmental Heads (HOD), Branch Managers, and the Junior Executives. The Departmental heads are Finance Managers, Purchase Managers, etc. The Branch Managers are the head of a branch or local unit. The Junior Executives are Assistant Finance Managers, Assistant Purchase Managers, etc. The Middle level Management is selected by the Top Level Management.

The middle level management emphasize more on following tasks :-

1. Middle level management gives recommendations (advice) to the top level management.

2. It executes (implements) the policies and plans which are made by the top level management.

3. It co-ordinate the activities of all the departments.4. They also have to communicate with the top level Management and the lower level

management.5. They spend more time in co-ordinating and communicating.6. They prepare short-term plans of their departments which are generally made for 1 to

5 years.7. The middle Level Management has limited authority and responsibility. They are

intermediary between top and lower management. They are directly responsible to the chief executive officer and board of directors.

8. Require more managerial and technical skills and less conceptual skills.

Lower Level of Management

The lower level management consists of the Foremen and the Supervisors. They are selected by the middle level management. It is also called Operative / Supervisory level or First Line of Management.

The lower level management performs following activities :-

1. Lower level management directs the workers / employees.2. They develop morale in the workers.3. It maintains a link between workers and the middle level management.4. The lower level management informs the workers about the decisions which are taken

by the management. They also inform the management about the performance, difficulties, feelings, demands, etc., of the workers.

5. They spend more time in directing and controlling.6. The lower level managers make daily, weekly and monthly plans.7. They have limited authority but important responsibility of getting the work done

from the workers. They regularly report and are directly responsible to the middle level management.

8. Along with the experience and basic management skills, they also require more technical and communication skills.

Managerial Skills

Management is a challenging job. It requires certain skills to accomplish such a challenge. Thus, essential skills which every manager needs for doing a better management are called as Managerial Skills.

According to Professor Daniel Katz, there are three managerial skills, viz.,

1. Conceptual Skills,2. Human Relations Skills, and3. Technical Skills.

According to Prof. Daniel Katz, all managers require above three managerial skills. However, the degree (amount) of these skills required varies (changes) from levels of management and from an organisation to organisation.

The above picture or diagram shows the managerial skills which are required by managers working at different levels of management. The top-level managers require more conceptual skills and less technical skills. The lower-level managers require more technical skills and fewer conceptual skills. Human relations skills are required equally by all three levels of management.

1. Conceptual Skills

Conceptual skill is the ability to visualise (see) the organisation as a whole. It includes Analytical, Creative and Initiative skills. It helps the manager to identify the causes of the problems and not the symptoms. It helps him to solve the problems for the benefit of the entire organisation. It helps the manager to fix goals for the whole organisation and to plan for every situation. According to Prof. Daniel Katz, conceptual skills are mostly required by the top-level management because they spend more time in planning, organising and problem solving.

2. Human Relations Skills

Human relations skills are also called Interpersonal skills. It is an ability to work with people. It helps the managers to understand, communicate and work with others. It also helps the managers to lead, motivate and develop team spirit. Human relations skills are required by all managers at all levels of management. This is so, since all managers have to interact and work with people.

3. Technical Skills

A technical skill is the ability to perform the given job. Technical skills help the managers to use different machines and tools. It also helps them to use various procedures and techniques.

The low-level managers require more technical skills. This is because they are incharge of the actual operations.

Apart from Prof. Daniel Katz's three managerial skills, a manager also needs (requires) following additional managerial skills.

4. Communication Skills

Communication skills are required equally at all three levels of management. A manager must be able to communicate the plans and policies to the workers. Similarly, he must listen and solve the problems of the workers. He must encourage a free-flow of communication in the organisation.

5. Administrative Skills

Administrative skills are required at the top-level management. The top-level managers should know how to make plans and policies. They should also know how to get the work done. They should be able to co-ordinate different activities of the organisation. They should also be able to control the full organisation.

6. Leadership Skills

Leadership skill is the ability to influence human behaviour. A manager requires leadership skills to motivate the workers. These skills help the Manager to get the work done through the workers.

7. Problem Solving Skills

Problem solving skills are also called as Design skills. A manager should know how to identify a problem. He should also possess an ability to find a best solution for solving any specific problem. This requires intelligence, experience and up-to-date knowledge of the latest developments.

8. Decision Making Skills

Decision-making skills are required at all levels of management. However, it is required more at the top-level of management. A manager must be able to take quick and correct decisions. He must also be able to implement his decision wisely. The success or failure of a manager depends upon the correctness of his decisions

FUNCTIONS OF MANAGEMENT:

1. Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:

Identification of activities. Classification of grouping of activities. Assignment of duties.

Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships.

3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).

Recruitment, Selection & Placement. Training & Development . Remuneration . Performance Appraisal . Promotions & Transfer.

4. Directing

It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:

Supervision Motivation Leadership Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.

5. Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:

a. Establishment of standard performance. b. Measurement of actual performance. c. Comparison of actual performance with the standards and finding out

deviation if any. d. Corrective action.

The Roles:Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management: Inside our Strange World of Organizations," in 1990.

The ten roles are:

1. Figurehead.2. Leader.3. Liaison.4. Monitor.5. Disseminator.6. Spokesperson.7. Entrepreneur.8. Disturbance Handler.9. Resource Allocator.10. Negotiator.

The 10 roles are then divided up into three categories, as follows:

Category RoleInterpersonal Figurehead

LeaderLiaison

Informational MonitorDisseminatorSpokesperson

Decisional Entrepreneur

Disturbance HandlerResource AllocatorNegotiator

 

Interpersonal Category

The roles in this category involve providing information and ideas.

1. Figurehead – As a manager, you have social, ceremonial and legal responsibilities. You're expected to be a source of inspiration. People look up to you as a person with authority, and as a figurehead.

2. Leader – This is where you provide leadership for your team, your department or perhaps your entire organization; and it's where you manage the performance and responsibilities of everyone in the group.

3. Liaison – Managers must communicate with internal and external contacts. You need to be able to network effectively on behalf of your organization.

Informational Category

The roles in this category involve processing information.

4. Monitor – In this role, you regularly seek out information related to your organization and industry, looking for relevant changes in the environment. You also monitor your team, in terms of both their productivity, and their well-being.

5. Disseminator – This is where you communicate potentially useful information to your colleagues and your team.

6. Spokesperson – Managers represent and speak for their organization. In this role you're responsible for transmitting information about your organization and its goals to the people outside it.

Decisional Category

The roles in this category involve using information.

7. Entrepreneur – As a manager, you create and control change within the organization. This means solving problems, generating new ideas, and implementing them.

8. Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the manager who must take charge. You also need to help mediate disputes within it.

9. Resource Allocator – You'll also need to determine where organizational resources are best applied. This involves allocating funding, as well as assigning staff and other organizational resources.

10. Negotiator – You may be needed to take part in, and direct, important negotiations within your team, department, or organization.

Difference between Administration /Management There are many factors according to which administration can be distinguished from management. These are as follows:

Nature of work Administration: It is concerned about the determination of objectives and major policies of an organization.

Management: It puts into action the policies and plans laid down by the administration.

Type of function Administration: It is a determinative function.

Management: It is an executive function.

Scope Administration: It takes major decisions of an enterprise as a whole.

Management: It takes decisions within the framework set by the administration.

Level of authority Administration: It is a top-level activity.

Management: It is a middle level activity.

Nature of status Administration: It consists of owners who invest capital in and receive profits from an enterprise.

Management: It is a group of managerial personnel who use their specialized knowledge to fulfil the objectives of an enterprise.

Nature of usage Administration: It is popular with government, military, educational, and religious organizations.

Management: It is used in business enterprises.

Decision making

Administration: Its decisions are influenced by public opinion, government policies, social, and religious factors.

Management: Its decisions are influenced by the values, opinions, and beliefs of the managers.

Main functions Administration: Planning and organizing functions are involved in it.

Management: Motivating and controlling functions are involved in it.

Abilities Administration: It needs administrative rather than technical abilities.

Management: It requires technical activities

Management handles the employers.

Administration handles the business aspects such as finance.

Management as Science:

1.      Management is a systematic body of knowledge consists of principles, generalizations, approaches and concepts to be applied in practical situation. The manager can mange the situation or organization in a systematic and scientific manner only if he posses the adequate knowledge of management and its principles.

2.       The principles generalization and concepts of management have been developed and formulated on the basis of observation research and analysis and experimentation, as is the case with the principles of other sciences.

3.      Like other sciences management principles are also based on relationship of cause and effect. Example if workers are paid more, they will produce more.

4.       Management knowledge and its principles are codified and a systematized and can be transferred from one manager to another and can be taught.

5.      Management principles are universally applicable to all types of organizations they are generalized in nature. Forming general guidelines for managers to practice.

6.      Science has employed mathematics in their quest and knowledge. Management also uses some statistical and mathematical techniques and methods for decision-making and better result. Example; operational research.

7.      Law of science have universal application example; formula for water or law of gravity is applicable everywhere same in the case with management. Management process has universal applicability. Example: high motivation leads to high efficiency in employees.

Management as Art:

In science we learn why? And Art gives the answer of How?

Art is concern with the understanding of how particular work can be accomplished.

The knowledge of management like other art has practical application. It applied to specific situation for better results. The application of management knowledge is personalized. The manager gains experience with continuous management knowledge to practical situation. They develop mores skills and abilities for translating management knowledge in to practice.

 Application of management knowledge call for innovativeness and creativity mgr. goes on discovering new ideas, relationship and more efficient ways of doing things.

Theoretical knowledge of management may not be adequate or relevant for solving the problem. In such situation, the manager has to rely more on his past experiences.

MANAGEMENT AS A PROFESSION:

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 - 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 Association - For the regulation of profession, existance of a representative body is a must. For example, an institute of Charted 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.

Basis Taylor Fayol

Human aspect Taylor disregards human elements and there is more stress on improving men, materials and methods

Fayol pays due regards on human element. E.g. Principle of initiative, Espirit De’ Corps and Equity recognizes a need for human relations

Status Father of scientific management

Father of management principles

Efficiency & administration

Stressed on efficiency Stressed on general administration

Approach It has micro-approach because it is restricted to factory only

It has macro-approach and discuses general principles of management which are applicable in every field of management.

Scope of principles

These principles are restricted to production activities

These are applicable in all kinds of organization regarding their management affairs

Achievement Scientific management Administrative management

SYSTEMS APPROACH:

Concepts of Systems Approach To Management

A systems approach has the following key concepts :-

1. Open or Closed Systems : Systems may be either open or closed. An open system is one, which depends on the outside environment for survival. A closed system does not interact with the environment.

2. Sub-system : The full system is made up of many parts. Each part is called a sub-systems. A system may be a sub-system of a larger system. For e.g. A department is a sub-system of a plant. A plant is a sub-system of a company.

3. Synergy : Synergy means that the whole is greater than the sum of its parts. In an organisation, when different departments co-operate and interact, they become more productive. This is called synergy.

4. Defined boundaries : Each system has a boundary that separates it from its environment. In case of a closed system, the system boundary is rigid. However, in an open system, the boundary is flexible. A business organisation, has boundaries with many external systems like creditors, suppliers, customers, government agencies, etc. The system is inside the boundary, the environment is outside the boundary.

5. Feedback mechanism : A system can adjust itself to the changing environment through the feedback mechanism. Feedback helps the system to find out and correct its mistakes.

6. Multidisciplinary : Management system uses information from many fields such as psychology, sociology, ecology, economics, mathematics, statistics, operations research, systems analysis, etc. Therefore, it is multidisciplinary.

7. Consideration of whole system : No part of the system can be fully studied and understood without understanding all its parts. So instead of dealing separately with different parts of one organisation, the manager must study the organisation as a whole. For example, in order to understand the working of the finance or production or marketing departments, he

must understand the company as a whole. It is because the activity of any one part of the company affects the activity of every other part.

8. Input output system : A business organisation is an input-output system. Inputs consist of human, physical and financial resources obtained from the environment. These resources are converted into outputs of products and services.

Contributions of Systems Approach To Management

1. Under systems approach, managers have a good view of the organisation.2. It gives importance to interdependence of the different parts of an organisation and its

environment.3. It foretastes consequences and plans actions.4. Systems thinking warns managers against adopting piecemeal approach to the problem-

solving.

Quantitative Approach

Developed in the military during world war II. Later many organizations adapted this model into their management approaches.

There are basically three Quantitative Management approaches:

1. Management Science Approach2. Operations Management3. Management Information Systems

Management Science Approach

Also called Operations Research. George B. Dantzig is the father of Operations Research. Involves the use of mathematical models and statistical methods in decision making

process. The assumption is that Management can be expressed in terms of mathematical symbols,

relationships and measurement data. Widely used in the following areas

o Capital Budgeting and Cash Flow Managemento Production Schedulingo Development of Product Strategieso Planning for Human Resource Development programso Maintenance of Optimal Inventory Levelso Aircraft Scheduling

Mathematical toolso Waiting line theory or Queueing theoryo Linear Programming

o Program Evaluation Review Techniqueo Critical Path Methodo Decision Theoryo Simulation Theoryo Probability Theoryo Samplingo Time Series Analysis

Criticized for the overemphasis on Mathematical tools.

Operations Management

Applied form of Management Science Effective Production Processes and Timely Delivery of products/services. Concerned with

o Inventory Managemento Work Schedulingo Production Planningo Facilities Location and Designo Quality Assurance

Toolso Forecastingo Inventory Analysiso Materials Requirement Planning Systemso Networking Modelso Statistical Quality Control Methodso Project Planning and Control Techniques

Management Information Systems

Computer based information systems Converts raw data into useful information Charles Babbage is the pioneer in MIS

Behavioural Science Approach:

The behavioural science approach is also called "Human Resource Approach". It gave importance to attitudes, behaviour and performance of individuals and groups in the organisations.

Behavioural scientists brought two new aspects to the study of management.

1. They gave a more complex view of human beings and their needs and motives. For e.g. Abraham Maslow, gave importance to Self-actualization need of human beings.

2. They used scientific methods to study the group behaviour in organisations.

Assumptions of Behavioural Science Approach

Basic assumptions and propositions of Behavioural Science Approach are :-

1. Organisations are socio-technical systems. The management must integrate both the systems.

2. Work and interpersonal behaviour of people in the organisation is influenced by many factors.

3. Employees are motivated not only by physiological needs but also by social and psychological needs.

4. Different people have different perceptions, attitudes, needs and values. These differences must be found out and recognised by management.

5. In an organisation conflicts are unavoidable.6. Personal goals and Organisational goals must be joined together.

Contributions of Behavioural Scientists

Abraham Maslow, James March and Herbert Simon, Douglas McGregor, Victor Vroom, Fredrick Herzberg, Chestar Barnard, etc., made important contributions to the behavioural science approach.

The main contributions made by above Behavioural Scientists are :-

1. Abraham Maslow's Hierarchy of Needs Theory : Human beings have many needs. Some are lower-level needs like physiological needs, safety and security needs, and social needs, These needs must be satisfied first. The higher level needs are ego needs, and self-actualisation needs. These needs are satisfied after satisfying lower-level needs.

2. James March and Herbert Simon : There are many types of communication in an organisation. This is essential for the performance of the organisation.

3. Douglas McGregor's Theory X and Y : Different managers have different assumptions about people. This depends on the situation. Managers may have negative assumptions about people. That is, human beings hate to work and therefore, they must be forced, controlled, directed, and threatened with punishment to make them work. (Theory X). Managers may have positive assumptions about people, i.e. people love to work, and that people have self-control and self-direction. (Theory Y).

4. Victor Vroom's Expectancy Theory of Motivation : People will be motivated to reach a goal, if they believe (i) in the worth of the goal, and (ii) in the steps taken to reach that goal.

5. Fredrick Herzberg's Two Factor Theory : There are many factors that influence behaviour and work of people in an organisation. One group of factors is called "hygiene factors". They are salary, working conditions. Supervision, etc. If these factors exist in the organisation then there will be no dissatisfaction. However, these factors will not motivate the workers. The second group of factors is called "motivators". They are recognition, achievement, challenging work, etc. These factors bring satisfaction and motivation.

6. Chester Barnard : The managers must maintain a system of co-operation in the organisation.

Fayol’s Administrative Theory:

Fayol's 14 Principles of Management1. Division of Work – When employees are specialized, output can increase because

they become increasingly skilled and efficient.2. Authority – Managers must have the authority to give orders, but they must also keep

in mind that with authority comes responsibility.3. Discipline – Discipline must be upheld in organizations, but methods for doing so can

vary.4. Unity of Command – Employees should have only one direct supervisor.5. Unity of Direction – Teams with the same objective should be working under the

direction of one manager, using one plan. This will ensure that action is properly coordinated.

6. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.

7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.

8. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.

9. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.

10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.

11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.

12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.

13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans.

14. Esprit de Corps – Organizations should strive to promote team spirit and unity.

Fayol's Six Functions of ManagementFayol's six primary functions of management, which go hand in hand with the Principles, are as follows:

1. Forecasting.2. Planning.3. Organizing.4. Commanding.5. Coordinating.6. Controlling.

Principles of Human Relations Approach

The basic principles of human relations approach are :-

1. Human beings are not interested only in financial gains. They also need recognition and appreciation.

2. Workers are human beings. So they must be treated like human beings and not like machines. Managers should try to understand the feelings and emotions of the workers.

3. An organisation works not only through formal relations, but also through informal relations. Therefore, managers should encourage informal relations in the organisation along with formal relations.

4. Workers need a high degree of job security and job satisfaction. Therefore, management should give job security and job satisfaction to the workers.

5. Workers want good communication from the managers. Therefore, managers should communicate effectively without feelings of ego and superiority complex.

6. In any organisation, members do not like conflicts and misunderstandings. Therefore, managers should try to stop conflicts and misunderstandings among the members of the organisation.

7. Workers want freedom. They do not want strict supervision. Therefore, managers should avoid strict supervision and control over the workers.

8. Employees would like to participate in decision making, especially, in those matters affecting their interests. Therefore, management must encourage workers' participation in management. This will increase productivity and job satisfaction.

Weber’s Bureaucracy Theory:

According to Max Weber, there are three types of power in an organisation :-

1. Traditional Power,2. Charismatic Power, and3. Bureaucratic Power Or Legal Power.

Features of Bureaucratic Organisation

The characteristics or features of Bureaucratic Organisation are as follows :-

1. There is a high degree of Division of Labour and Specialisation.2. There is a well defined Hierarchy of Authority.3. It follows the principle of Rationality, Objectively and Consistency.4. There are Formal and Impersonal relations among the member of the organisation.5. Interpersonal relations are based on positions and not on personalities.

6. There are well defined Rules and Regulations. There rules cover all the duties and rights of the employees. These rules must be strictly followed.

7. There are well defined Methods for all types of work.8. Selection and Promotion is based on Technical qualifications.9. Only Bureaucratic or legal power is given importance.

Criticism of Bureaucratic Organisation

Bureaucratic organisation is a very rigid type of organisation. It does not give importance to human relations. It is suitable for government organisations. It is also suitable for organisations where change is very slow. It is appropriate for static organisations.

Bureaucratic organisation is criticised because of the following reasons :-

1. Too much emphasis on rules and regulations. The rules and regulations are rigid and inflexible.

2. No importance is given to informal groups. Nowadays, informal groups play an important role in all business organisations.

3. Bureaucracy involves a lot of paper work. This results in lot of wastage of time, effort and money. There will be unnecessary delay in decision-making due to formalities and rules.

4. Bureaucratic model may be suitable for government organisations. But it is not suitable for business organisations because business organisations believe in quick decision making and flexibility in procedures.

Weber noted six major principles.

1. A formal hierarchical structure

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.

2. Management by rules

Controlling by rules allows decisions made at high levels to be executed consistently by all lower levels.

3. Organization by functional specialty

Work is to be done by specialists, and people are organized into units based on the type of work they do or skills they have.

4. An "up-focused" or "in-focused" mission

If the mission is described as "up-focused," then the organization's purpose is to serve the stockholders, the board, or whatever agency empowered it. If the mission is to serve the organization itself, and those within it, e.g., to produce high profits, to gain market share, or to produce a cash stream, then the mission is described as "in-focused."

5. Purposely impersonal

The idea is to treat all employees equally and customers equally, and not be influenced by individual differences.

6. Employment based on technical qualifications

(There may also be protection from arbitrary dismissal.)

The bureaucratic form, according to Parkinson, has another attribute.