management priniciples

8/14/2019 Management priniciples

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UNIT 1

Managing &Managers


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WHAT IS MANAGEMENT?

FREDERICK W TAYLOR

The art of knowing what you want to

do and seeing that it is done in the best and

cheapest way.

STANLEY VANCE Simply the process of decision making

and control over the action of human beings

for the expressed purpose of attaining pre-


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DEFINITIONS

Management is the process of designing and maintaining

an environment in which individuals, working together

in groups, efficiently accomplish selected aims

Management is the art of getting things done through and

with the people in formally organized groups Herald

Koontz

Management is a process of planning, organizing,

actuating and accomplish the objectives by the use of

people and resources George R. Terry

Management is concerned with resources, tasks and goals. It is

the process of planning, organizing, directing and controlling

to accomplish organizational objectives through the


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Management as a UnifyingForce

M a n ag em e n t M a te ria lsM o n e y

M a ch in e

ryM ethod

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a nP o w e r

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ryM ethod

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Organizations possess human as well as non-human resources

that are put to use in the service of specific goals.

Management is needed whenever people work together in an

organization.

The aim of managers is to create surplus.

As managers, people carry out the managerial

functions of planning, organizing, staffing, leading

and controlling.

Management thus,

Applies to any kind of organizations.

Is a continuous process.

Applies to managers at all organizational levels.

Is concerned with productivity., which implies


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Management Process

MENMATERIALSMACHINERYMONEY

GOODSSERVICESPROFIT RODUCTIVITY USTOMER SATISFACTION5

1 2 3 4NPUTS OUTPUTS


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FUNCTIONS OFMANAGEMENT

LUTHER GULICK 7 FUNCTIONS - POSDCORB

1) P LANNING2) O RGANISING3) S TAFFING4) D IRECTING

C ORDINATING O

R EPORTING B UDGETING5) C ONTROLLING


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PLANNING Determining in advance what should be done.

Determination of what is to be done, how, where it is to be and

who is to be done, finally how the results are to be evaluated.

It is done for every department, division or sub-unit of the

organization.

It is a function to be performed by managers are all levels

Top

Middle

Supervisory

Plans may be

Long term cover a period more than 5 to 10 years

made by top management

Short term shorter period for a day or for a

week made by middle and first line managers.


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ORGANISING

Providing a business with everything useful for its

functioning : the 4 Ms(Man, Machine, Money &

Methods)

Refers to the structure which results from

identifying and grouping work, defining and

delegating responsibility and authority and

establishing relationships - Allen


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STAFFING

Important function of building humanresources

The Manager attempts to find the

right person for each job Involves

Recruiting

Selection

Training

Includes a suitable system ofcompensation


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DIRECTING

T h is fu n ctio n ca n b e ca lle d b yLe a d in gM o tiva tin gA ctu a tin g

T h e m a n a g e r ex p la in s to h is p e o p le w h a t th e yh a ve to d o a n d h e lp s th e m d o it to th e b e st o f

.th e ir a b ility -In v o lv e s th re e su b fu n ctio n s C o m m u n ica tio n

Le a d e rsh ip

control .C o m m u n ica tio n p a ssin g o f in fo rm a tio n Le a d e rsh ip g u id in g a n d in flu e n cin g th e w o rk to

th e su b o rd in a te s M o tiv a tio n a ro u sin g d e sire in th e m in d s o f th e

e m p lo y e e s to g iv e th e ir b e st to th e e n te rp rise , ,Fin a n cia l in ce n tive s b o n u s

, .,in cre a se in sa la ry e tc - N on fin a n cia l ro m otio n ob


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CONTROLLING Ensuring that everything occurs in conformity

with the plans set, the instructions given and

the principles established.

Involves five functions

Setting up of standards

Measuring the actual performance

Comparing with the standards

Finding out deviations, if any

Making corrective actions.

In absence of control, the set objectives could not

be achieved


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LEVELS OFMANAGEMENT

First line Managers Foremen

White collar Supervisors

Middle Level Managers

Sales Managers Plant Managers

Personnel Managers

Other Departmental Heads

Top Management Board of Chairman The Company Presidents

The Executive Vice-Presidents

The other men who coordinate all the specialties andmake policies for the company as a whole.


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MANAGERIALSKILLS

A skill is the ability of transformingknowledge in action

It can be developed through:-

a) practice b) experience andc) back ground

The managerial skills are

Conceptual skillsTechnical skills

Human Relations skill


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Conceptual SkillsThe ability to take a broad and foresighted view

of the organization and its future To conceptualize the environment, the

organization and his job so that he can set

appropriate goals for his organization, for

himself and for his team Important when the manager moves up to a

higher position of responsibility.

Technical SkillsPersons knowledge and proficiency in any typeof process of technique

Seems to be important at lower levels of

management


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Human relations skill

The ability to interact effectively

with people at all levels

recognize the feelings and

sentiments of others

to judge the possible

reactions and outcomes of

various course of action

to examine his own concepts

and values which may

enable him to develop more

useful attitudes about


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Conceptuaskillsuman

elationsskillsechnicalskills

opManagement

upervisoryLevel

iddleManagement

-kill mix at differentanagement levels


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MANAGEMENT &ADMINISTRATION

Administration:- The overall determination ofpolicies, the setting of major objectives and thelaying out of broad programmes Haimann

Function:- A type of work activity than can be

identified and distinguished from other work

Three different criticisms

Administration is broader thanManagement

Management is broader thanAdministration

Administration and Management areidentical


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Administration is broader thanManagement

Administration determines the specific goals and lays

down the broad areas to achieve these goals

It is a policy making function

According to American School of thought - Administration Top Level activity

Management Lower Level activity

Some writers strong with this criticism: -

a) Ordway Tead b) Oliver Sheldon

c) William Spriegel

d) William Schulze


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Management is broader thanAdministration

Management is rule - making and rule - enforcing body

Administration is a part of management and it is just animplementing agency.

According to English School of thought Management wider concept

Administration handles the current

problem that may arise in carrying out

the policies laid by management.

Some writers strong with this criticism: - a) E.F.L Brech

b) Henry Fayol

c) Kimball and Kimball


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Administration & Management areIdentical

Some writers strong with this criticism:

a)William Newmanb)Herold Koontz

c)Dalton E. McFarland

d)Earnest Dale Peter Drucker:-

The use of these words in different fields makes adifference.

Government Administration Emphasis is not on economic consequences of

decisions. Ex. Military organizationPrivate - Management

Emphasis is on economic consequences on everydecision and action put on


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Administration

Management

opManagementiddle

ManagementowerManagement

DMINISTRATION AND MANAGEMENT


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DISTINCTION BETWEENADMINISTRATION AND MANAGEMENT

Point of Distinction Administration Management

Nature Thinking Function Doing Function

Scope Determines Broadobjectives and

policies

Implements andachieves

Level Top level Middle and Lower LevelSkills Conceptual and

HumanTechnical and Human

Represents Owners investcapital and receive

profits

Managers paidindividuals

Usage GovernmentOrganizations

Business Enterprises


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MANAGEMENT A SCIENCE OR ANART?

Science:-

An organized or systemized body of knowledge pertaining to a

specific field of enquiry

a) Systemized body of knowledge number of principles

to apply and can be used to solve problems

b) Management is a social science it deals with human

behavior. It can be called a soft science

c) Management is an inexact science does not offer

absolute principles. It can offer only guidelines to solve problems

d) Manager Vs. Scientist Scientist can wait till all the

information are collected but Manager cannot wait and he has to take

decisions for present and future based on

inadequate information.

e) Scientific Management Sophisticated Managerial


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Art:- It is the application of knowledge and personal skills to

achieve results

a)Use of Knowledge use of management theory inmanagerial functions

b)Creative art creative in combining human and non-human resources in an effective manner to achieve results

c)Personalized every manager has his own way of

managing things and people

d)Constant Practice Learning from mistakes as artistic

skills can be developed through training, so as managerial

skills


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MANAGEMENT IS SCIENCE ASWELL AS ART

A successful manager requires both the knowledgeof management principles and the skills of how

the knowledge could be utilized

Management uses both scientific knowledge and art

in managing the organization

A balance between the two is needed for an

effective management.


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COMPARISON BETWEEN SCIENCEAND ART AS USED IN

MANAGEMENT

SCIENCE ART

Advances by knowledge Advances by practice

Proves Feels

Predicts Guesses

Defines Describes

Measures Opines

Impresses Expresses


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MANAGEMENT AS APROFESSION

Well defined body of knowledge

Formal education and training

Representative body

Code of conduct

Service motto


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SCOPE OF MANAGEMENT

Management as an economicresource

Management is required to convert the

disorganized resources of 5 Ms into a

productive, useful, on-going concern -

Newman

Management as a system ofauthority Rule-making and rule-enforcing body

Bound by a relationship i.e., superior and

subordinate


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Management as a classor elite

Management is a distinct class in society

having its own value system

The term Management refers to the group of

individuals occupying managerial positions

Al the managers from the chief executive to

the first line supervisors are collectively

addressed as Management, which refers

to the group

CHARACTERISTICS OF


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CHARACTERISTICS OFMANAGEMENT

Management is

INTANGIBLE

GOAL-ORIENTED

UNIVERSAL

SOCIAL PROCESS

GROUP ACTIVITY

SYSTEM OF AUTHORITY

ACTIVITY

DYNAMIC

SCIENCE AS WELL AS AN ART

MULTIDISCIPLINARY


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IMPORTANCE OFMANAGEMENT

Optimum use of resources

Effective leadership and motivation

Establishes sound industrial relations

Achievement of goals

vo u on o anagemen


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vo u on o anagemenDEVELOPMENT OF MANAGEMENT

THOUGHTq The period between 1700 1850, the period of Industrial

Revolution which brought out the advent of factory system.q Highlighted the importance of direction as a managerial

function.

q Several economists in their writings explained the concepts and

functions of management.

q Adam Smith Division of Labor

q Turgot The Importance of Direction and Control

q Say Importance of Planning

q Management emerged as different field of study only during the

19th century with the introduction of stock exchanges.

q The different form of enterprise separated business

organizations from their ownership.


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It gave rise to different problems of labor inefficiency andIt gave rise to different problems of labor inefficiency and

inadequate system of wage payment.inadequate system of wage payment.

To give solutions to the above problem, Management started To give solutions to the above problem, Management started

emerging as a new field.emerging as a new field.

During the last 100 years, Management is more scientific withDuring the last 100 years, Management is more scientific with

certain standardised principles and practices. We study thecertain standardised principles and practices. We study the

evolution thought in three periods.evolution thought in three periods. Early Classical approachesEarly Classical approaches scientific scientific

management, administrative management,management, administrative management,

bureaucracy.bureaucracy.

Neo-Classical approachesNeo-Classical approaches human relation human relation

movement and behavioural approach.movement and behavioural approach.

Modern approachesModern approaches quantitative approach, quantitative approach,

systems approach and contingency approachsystems approach and contingency approach

EARLY CLASSICAL


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EARLY CLASSICALAPPROACHES

Frederick Winslow Taylor is considered to be the

Father of Scientific Management

Through his experiments with companies :

Midvale Steel Company, Simonds Rolling

Machine and Bethlehem Steel he made several

important contributions to Scientific

Management

Taylors work The Principles of Scientific

Management was published in 1911 which is

a famous work done by him.

He invented high-speed steel cutting tools and

CONTRIBUTIONS OF TAYLORCONTRIBUTIONS OF TAYLOR


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CONTRIBUTIONS OF TAYLORCONTRIBUTIONS OF TAYLOR TIME AND MOTION STUDY:-

The practical application of this approach was to break each

job down into its smallest and simplest component parts

or motions

Each single motion in effect became a separate specialized

job to be allocated to a separate worker

Each motion of a job was to be timed with the help of a stop

watch and shorter and fewer motions were to be

developed

Workers were selected and trained to perform such jobs inthe most efficient way possible, eliminating all wasted

motions or unnecessary physical motion

Thus, the best way of doing job was found

It replaced the old rule of thumb knowledge of the workman


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DIFFERENTIAL PAYMENT:-

New payment plan called differential piece work was

introduced

Incentives were linked with production

A worker was entitled to receive a low piece rate if he

produced the standard number of pieces

A worker received high piece rate if he produced more than

the standard

Taylor thought high piece rate would motivate the workers

to produce more to increase the production

SCIENTIFIC RECRUITMENT AND TRAINING:-

Scientific selection and development of employee was

emphasized

The management should develop and train every worker to

bring out his best

To enable the worker to do higher, more interesting and


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DRASTIC REORGANISATION OF SUPERVISION:-

Two new concepts were developed by Taylor

(i) Separation of planning and doing

(ii) Functional Foremanship

The worker should not plan any work

It was the duty of the foreman who has to plan for thework

There should be many foreman as there are specialfunctions involved in doing a job

Each foreman of different functions should give ordersto the worker on his specialty

INTIMATE FRIENDLY COOPERATION BETWEEN

THE MANAGEMENT AND WORKERS :-

Management and labour had a common interest in increasing

productivity There should be a complete revolution on the part of

management and labour was required

By working together profits could be increased, so thatmanagement and labour could no longer compete eachother


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CONTRIBUTIONS BY HENRY GANTTCONTRIBUTIONS BY HENRY GANTT

Using of correct methods and skills in performing a task wasimportant than knowing the skills and methods

The importance of human element in productivity , thus heneeded motivation

He introduced two main features in Taylors incentivescheme

Every worker who completed his assigned work 50

% bonus Foreman was also entitled to receive a bonus for

every worker who have completed the assignedtask + extra bonus if every one completed

Ratings of workers publicly: Every workers progress is recorded on individual bar

charts Black completed the standard

Red deviations in standard i.e. fell below thestandard

A charting system for production control

Each mans daily performance compared withstandard of performance

CONTRIBUTIONS BY FRANK AND LILLIAN


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CONTRIBUTIONS BY FRANK AND LILLIANGILBERTH

Frank and Lillian Gilbreth made their contributionas husband and wife

They made their contribution in Motion andFatigue studies to eliminate wasteful hand-and-body motions.

The Gilbreths also experimented with the design

and use of the proper tools and equipment foroptimizing work performance.

The Gilbreths were among the first to use motionpicture films to study hand-and-body motions.

The Gilbreths also devised a classification schemeto label 17 basic hand motions, which theycalled Therbligs.

According to them, the Motion and Fatigue

studies raised the workers morale

1. CONTRIBUTIONS OF SCIENTIFIC


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1. CONTRIBUTIONS OF SCIENTIFICMANAGEMENT IN SHORT

The four objectives of management under scientific management

were as follows:-

a) The development of a science for each element of a mans work toreplace the old rule-of thumb methods

b) The scientific selection, training and development of workers

instead of allowing them to choose their own tasks and train

themselves as best they couldc) The development of a spirit of hearty cooperation between workers

and management to ensure that work would be carried out in

accordance with scientifically devised procedures.

d) The division of work between workers and the management inalmost equal shares, each group taking over the work for which

it is best fitted instead of the former condition in which

responsibility largely rested with the workers. Self-evident in

this philosophy are organizations arranged in a hierarchy ,s stems of abstract rules and im ersonal relationshi s between


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LIMITATIONSLIMITATIONS Economic incentives are not the strong

motivators for increased production.Taylor believed it so, which is provedwrong. No man is an economic man

Time and motion study could not be called a

one best way Separation of planning and doing tended to

reduce the need for skill and producegreater monotony of work

Taking orders from 7 or 8 bosses resulted inconfusion

Advances in methods and tools andmachines eliminated some workers, who

found it difficult.

2 ADMINISTRATIVE


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2. ADMINISTRATIVEMANAGMENT

q Henry Fayol is considered the ather of AdministrativeManagement ( - )1841 1925 broad administrative principles

applicable to general and higher managerial levels

qBasically a French mining engineer turned to a leading

industrialist and successful manager

q Till his monograph General and Industry Administration which

, ,he wrote in 1916 was translated to English in 1929 very littlewas known about him

q He provided broad analytical framework on the process of

administration

q He divided the activities of a business enterprise into six: , , , ,groups technical commercial financial accounting security and

administrative or managerial

qHe has presented 4 Principles of Management to guide themanagement process and practices

FAYOLS 14 PRINCIPLES OFFAYOLS 14 PRINCIPLES OF


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FAYOLS 14 PRINCIPLES OFFAYOLS 14 PRINCIPLES OFMANAGEMENTMANAGEMENT

1. Division of work

2. Authority and Responsibility

3. Discipline

4. Unity of Command

5. Unity of Direction

6. Subordination of Individual Interest to General Interest

7. Remuneration8. Centralization

9. Scalar Chain

10.Order

11.Equity

12.Stability of Tenure of Personnel

13.Initiative

14.Esprit de Corps

CONTRIBUTIONS OF ADMINISTRATIVE


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CONTRIBUTIONS OF ADMINISTRATIVEMANAGEMENT

Taylor and Fayol, both concentrated on increasingproduction; Taylor worked from the bottom whereas Fayolworked from upside to down

Fayols principles met with wide spread acceptance

In US, two General Motor Executives James D Mooney andAlan C Reiley, wrote a book, Onward Industry in 1931and revised as Principles of Organisation

Colonel L Urwick, a distinguished executive and amanagement consultant in UK wrote a book, TheElements of Administration, where they tried tocomprehend the concepts and principles of Taylor, Fayol,Mooney and Reiley. It made an explosion in number ofprinciples of management. His important concepts are

There should be clear line of authority The authority and responsibility should be clearly

communicated

Each worker should be given single operation or work only

The span of control of a manager should not exceed six

Authority can be delegated


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A new school of thought Management Process School cameinto existence with inspirations from Fayol

Harold Koontz and Cyril ODonnell, the champions of theschool believed management is a dynamic process ofperforming the functions of management (PODSCORB)

They believed these functions and principles on which theyare based have universal or general acceptability

Managers or the Managing Directors perform sameplanning and control functions and only the degree ofcomplexity differs

Management functions are applicable not only to businessorganisations but also to all organisations where groupeffort is employed

Management theory is not culture - bound but it istransferable to any environment

This approach is known as Universalist approach

LIMITATIONS OF ADMINISTRATIVELIMITATIONS OF ADMINISTRATIVE


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LIMITATIONS OF ADMINISTRATIVELIMITATIONS OF ADMINISTRATIVEMANAGEMENTMANAGEMENT

Fayols principles of specialization produced dysfunctional

consequencesa)Formation of small work groups with norms andgoals which does not suit with those of themanagement

b)Dissatisfaction among workers

c)Increase in overhead cost Fayolsprinciples are both plausible and contradictory.

There is nothing in his writings to indicate which is toapply

The principles are based on few case studies only and not

empirically proved These principles are stated as unconditional principles but

what needed is conditional principles

Result in the formation of mechanistic organizationstructures which are insensitive to employees social and

psychological needs These rinci les are based on the assum tion that

3 BUREAUCRACY


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3. BUREAUCRACY Max Weber is known as the Father of Bureaucracy

A German Sociologist, he made study on different types of

business and Government Organizations

He found three basic types of administration

Leader oriented no delegation of management

functions Tradition oriented managerial positions are

handed over from tradition to tradition

Bureaucratic management responsibility is based

on the persons demonstrated ability to hold the

position

He considered bureaucracy was the ideal type of

administration


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FEATURES OF BUREAUCRACY

1.There is no instance on following Standard

Rules

2.There is a Systematic Division of Work

3.Principle of Hierarchy is Followed4.It is necessary for the Individual to have

Knowledge of and Training in the

Application of Rules

5.Administrative Acts, Decisions and Rules are

recorded in writing

LIMITATIONS


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LIMITATIONS Over conformity to rules

Buck-passing Categorization of Queries

Displacement of Goals

No real right of appeal

Neglect of informal groups Rigid structure

Inability to satisfy the needs of mature individuals


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NEO CLASSICAL APPROACHES

These approaches are called neo-classicalapproaches as they tried to refine the classicalapproaches

Neo classical approaches could be classified into

A)Human Relations Movement

B)Behavioural Approach

1. HUMAN RELATIONS


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1. HUMAN RELATIONSMOVEMENT

Managers found that Taylors and Fayols principles ofmanagement were not helpful in achieving complete

production efficiency and work place harmony

They faced difficulties because of the rational behavior ofemployees

To help the managers to deal effectively with the peopleside of the organization, the human relations movement

was begun

The real impression came from Hawthorne Experimentsby Prof. Elton Mayo and his colleagues in WesternElectric Companys plant in Cicero, Illinois from 1927 to1932

The plant employed 29,000 workers to manufacturetelephone parts and equipment

The study can be described in four parts:1) Illumination Experiments

2) Relay Assembly Test Room

3) Interviewing Programme4) Bank Wiring Test Room

1 ILLUMINATION


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1. ILLUMINATIONEXPERIMENT

First phase of the study to test the correlation between

illumination and productivity

Experiments were done on a group of workers and the

productivity is measured at various illumination levels

The results were erratic and the researchers changed theirmethodology

There were two groups of workers in different buildings:

control groups - who work under constant level of

illumination

test groups - worked under changing levels of illumination

The post-test productivity of the two group then compared and

found out that illumination and productivity were very

mar inall related

2. RELAY ASSEMBLY TEST


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2. RELAY ASSEMBLY TESTROOM

The object of the study was broadened to know not only theillumination and productivity but also such other factorslike the length of the working day, rest pauses, theirfrequency and duration and other physical conditions

A group of six women workers were selected, told about theexperiment and asked to work in an informal atmospherewith a supervisor-researcher in a separate room

Several variation were made in the working conditions tofind out the combinations which were ideal forproduction

Surprisingly, the production increased at all levels andstabilised at high level

Researchers then found the following factorsFeeling of importance among the girls to participate

in the research

High cohesion among the workers of the group

Warm informality, tension-free interpersonal andsocial relations and relative freedom from strict

3. INTERVIEWING


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3. INTERVIEWINGPROGRAMME

The knowledge about the informal groups in the second phase

made the researchers to design the third phase to know the

basic factors for the human behaviour at work

20,000 employees were interviewed with direct questions relating

to type of supervision, working conditions, living conditions and

so on where the employees reluctant to answer

The technique was changed to a non-directive type where the

employees were asked to speak about the most interesting part

of their working environment

It revealed that the workers social relations inside theorganisation had an unmistakable influence on their attitudes

and behaviour

The study revealed the pervasive nature of the informal groups

which had their own culture and production norms which their

4. BANK WIRING


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4. BANK WIRINGOBSERVATION ROOM

This phase involved the observation of 14 men making terminalbanks of telephone wiring assemblies to find out the effect ofinformal group behaviour with formal economic incentives onproductivity

The group had its own production norms for its members whichwas very low when comparing with the management norms,

defeating the incentive scheme This artificial restriction saved the employees from a cut in

price rates and protected the weaker employees

Workers foolishness means who produced more thanthe group norms isolated from the group harassed or

punished by the group called rate busters Chisellers too slow workers Squealers- who complained about their co-workers to the

supervisors

The members of the informal group gave rankings about eachother, which helped to find out the internal social structure of

FINDINGS OF HAWTHRONE


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FINDINGS OF HAWTHRONEEXPERIMENT

Produced an impact on human relationsmovement

The important role played by the

informal group in an organisation wasidentified

Research scholars began to concentrate

on the human behaviour ofmanagement and principle

When people work together peopleshould understand people to

accomplish the goals of the

CONTRIBUTIONS OF HUMAN RELATIONS


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MOVEMENTBusiness organisation is an social system not merely a

techno-economic system

No correlation between high working conditions and

productivity

The production norms were set by the group not as

time and motion study. The employees who deviate

from the norms were penalised

The workers main motto is not only money but also

the non-financial rewards which affect largely their

behaviour and limit the effect of economic incentive

plan

Task-centered leader ship is not effective

LIMITATIONS


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LIMITATIONS Human relations writers saw only the human variable as critical

and ignored other variables

It is possible to find out a solution which satisfies everybody so

that the organisation is turned out to be a big happy family is

not correct

Over emphasizing on symbolic rewards and underplaying the

role of material rewards

The informal groups are shown as the major source of

satisfaction for industrial workers

The approach is production-oriented and not employee-

oriented

The process of decision making is very leisure which will not

help in emergency

People want to become managers only for the desire of power

but this approach makes an unrealistic demand on the

2 BEHAVIOURAL APPROACH


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2. BEHAVIOURAL APPROACH More mature version of the human relations approach to management

Behavioural scientists

Douglas McGregor

Abraham Maslow

Kurt Lewin

Chester Barnard

Mary Parker Follett

George Homans

Rensis Likert

Argyris

Warren Bennis

These scientists were trained in various social sciences suchpsychology, sociology and anthropology

Thus they were known as behavioral scientists rather than membersof human relations school

Their contributions have helped enormously to understand theorganizational behavior

CONTRIBUTIONS OF BEHAVIOURAL


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CONTRIBUTIONS OF BEHAVIOURALAPPROACH

The traditional concepts like hierarchical authority, unity of

command, line and staff relationships and narrow span of

control are criticized by the behavioral scientists

They concluded that managers are always dominating so

that subordinates are passive and dependent on them

Behaviorists prefer an organization which is more flexible

and the jobs should be built around the capabilities and

aptitudes of average employees

It recognizes the practical and situational constraints on

human rationality for making optimal decisions

They give importance to participate and group decision

making as it is not feasible to make individuals to solve

the problems themselves

They underlined the desirability of humanizing the


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They underlined the desirability of humanizing the

administration of the control process and encouraging

the process of self-direction and control instead of

imposed control

they considered organization as groups of individuals with

certain goals

They made extensive studies on leadership. For them, the

democratic-participative leader style is desirable than

the autocratic and task-oriented style

In real, human motivation is complex, i.e., no two people

are exactly alike, so the manager has tailor his attempts

to influence them based on the individual needs

They recognized the conflict is inevitable and sometimes

LIMITATIONS TO BEHAVIOURAL


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LIMITATIONS TO BEHAVIOURALAPPROACH

Self actualization view no two employees are

equal and every one will have different desireand needs

There is no compatibility between individual andorganizational goals, in reality, individuals

desire to be autonomous This approach discounted the non-human aspects

of an organisation such as task, technology andmanufacturing

Like other approaches, it also tried to find out thebest way of managing. It assumed humanizingthe organisation is the best way of managing

As human behavior is so complex, the behavioralscientists offer differ in their recommendations

for a particular problem

MODERN APPROACHES


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During World War II, mathematicians, physicists, and other scientists

joined together to solve military problems.

The quantitative school of management is a result of the research

conducted during World War II.

The quantitative approach to management involves the use of

quantitative techniques, such as statistics, information models, and

computer simulations, to improve decision making.

People used the techniques or problem solving to the industry after

the end of the war

A mixed team of specialists were called to analyse the problem wherethey construct a mathematical model to simulate the problem

The model shows all the relevant factors which are interrelated with

the problem

By changing the values of the variables and analysing the different

. QUANTITATIVE TECHNIQUES

FEATURES OF QUANTITATIVE


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QAPPROACH

The focus of the quantitative approach is decision making.

Managerial choices in any situation depend on criteria such as

costs, revenues, return on investment, impact on other areas

etc.,

It facilitates disciplined thinking, while defining management

problems and establishing relationships among variables

It aims at precision and perfection by expressing in quantitative

terms

Widely used in planning and control activities where problems

can be identified and expressed in quantitative terms

Heavy emphasis is put on computers and their processing

capabilities. Final solutions to problems are reduced to

mathematical formulae. These are subjected to further


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LIMITATIONS

Still uncommon in some areas like staffing, organising

and leading where problems are more human

oriented than technical in nature

There is no importance on human relationships and

individual needs and aspirations

Though the inputs for decision making are not readily

available, the manager cannot postpone the

decisions

Decision quality depends on the quality of data

If the data is not adequate and an updated one, it

does not serve the purpose

BRANCHES OF


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BRANCHES OFQUANTITATIVE APPROACH MANAGEMENT SCIENCE:-

Aims at increasing decision effectiveness through the use of

advanced mathematical models and statistical methods

The computers are used more as it focuses on technical rather

than human behaviour problems

OPERATIONS MANAGEMENT:-

It includes fields such as inventory management, production

management, planning, design and location, work scheduling

and quality assurance all functions responsible for managing

the production and delivery of an organisations products and

services

MANAGEMENT INFORMATION SYSTEMS:-

Focuses on computer based information systems for use by

management where the raw data is converted into

meaningful information for decision making at various levels

2 SYSTEMS APPROACH


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2. SYSTEMS APPROACH It attempts to view the organization as a single unified,

purposeful entity As the classical approach emphasized task and

structure, the behavioral approach emphasized

people and the quantitative approach emphasized

mathematical decision making, the systems

approach tries to get ideas by looking the organisation

as a whole and as a part of the larger, external

environment The systems approach provides the manager an

integrated approach to management problems

Chester Bernard, George Homans, Philip Selznick and

Herbert Simon are the important advocates of

SYSTEMS TERMS


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SYSTEMS - TERMS System:-

Inter-related parts or components

Sub-system

The parts which make up the wholesystem

Synergy The output of the system which is

always more than the combinedoutput of it parts

Open and Closed System

A system which is interacting with itsenvironment Open system

A system which is not interacting Closed System


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System Boundary:-

Which separates the system from itsenvironment

Flow:-

Receiving inputs from the environment

-----> processing the inputs into output----> outputs may be goods or servicesreturned to the environment

Feedback:-

Central to system control

Holism:-

No part of the system could be accuratelyanalysed and understood apart from thewhole system. Each part bears theinterdependence to every other part. Thisconcept is called Gestalt in psychology.

William Foote White with his 3 subordinatesapplied this concept in a study of 12

ORGANISATION AS AN OPEN


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SYSTEM

, , ,M en M aterials M on ey Tech n olog y ,A ctiv itie s O p e ra tio n s , /Goals Sales Profits

ENVIRONMENT

ENVIRONMENT

N V I R O N M E N T

N V I R O N M E N T

INPUTS PROCESSES OUTPUTS

TARGETS


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ransformation of Energy( )hroughput

, , ( )ation Energy Materials Import , ,utput of Products Ideas Servi

rganisation as a Open System

N V I R O N M E N T

CONTRIBUTIONS OF SYSTEMS


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CONTRIBUTIONS OF SYSTEMSAPPROACH

A problem is studied both at the level of the sub-

system and the total system

To apply this approach the executives of the

organisation should be generalists i.e., they

should have enough knowledge in other fields in

addition with their functional skills

They can easily maintain a trade-off between the

needs of the various parts of the enterprise and

goals of the firm as a whole

LIMITATIONS


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LIMITATIONS

The conceptual framework of understanding organist

ions provided by the systems approach is vague or

too abstract

It is not identifying the situational differences and

factors

The oneness in any organisation, in reality is not a

easy one, either it is difficult or is it impossible

Provides more specificity in terms of variables and if-

then relationships in a situational context

Attempts to integrate various school of thought thus

3. CONTINGENCY OR SITUATIONALAPPROACH


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APPROACH This approach is in a view point that the various schools

of management could not be applied generally or

universally under all conditions There is no one best way as situations and conditions

differ. The same results may not be obtained

It suggests that the manager should find out whichtechnique will best suit to the contingency situation to

attain the firms goals

The manager have to select a situational sensitivity andpractical selectivity

The contingency theorists are

Selznik Burns and Stalker

Woodward

Lawrence and Lorsch

James Thompson

Contingency approach views are applicable


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Contingency approach views are applicable

in

Designing organizational structure Deciding the degree of decentralization

Planning of information system

Resolving conflicts and managing change Employee development and training

programmes and

Other relevant areas of organisation

ENVIRONMENT AN


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INTRODUCTION Environment is anything which surrounds a system thus businessenvironment is anything which surrounds the business organisation

The strategies, decisions, processes and performances are affected by the

environment

Two types of environment

Micro Environment:-

Different types of stakeholders - customers, employees,suppliers, board of directors and creditors.

Any changes in this environment will directly affect

Is also called internal environment

Macro Environment:-

Beyond the control of the business (STEP) - Social,

Technological, Economical and Political.

Any changes will indirectly affect

Is also called external Environment

FEATURES OFO


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ENVIRONMENT COMPLEX

Environment comprises of different event, factors,

conditions and influences arising from various sourceswhich interact with each other constantly and producenew set of influences

It cannot be predictable what kind of forces influence anenvironment

DYNAMIC

Environment is constantly changing

There may be too many changes with in a short span oftime which might be shocks and surprises to theorganisation

Some times the organizations are forced to comply with

the changes in the environment CHALLENGING

The factors of macro environment have an impact onorganizations (Political, Legal, Economic, Technologicaland Social systems)

These forces are so dynamic and their constant change

results with lot of opportunities, threats and constraints

ENVIRONMENTAL


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ANALYSIS Every organisation must strike a balance between

environment, values and resources in order to survive ina high competitive environment

Environmental analysis is the process of monitoring an

organizational environment to identify both present and

future threats and opportunities that may influence the

firms ability to reach its goals

Features : -

Holistic Exercise broad view of the environment

Exploratory process tries to explore the unknown

future choices, seeking clarification of the

assumptions about future, etc

Continuous activity it is a continuous process of

COMPONENTS OF EXTERNAL


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COMPONENTS OF EXTERNALENVIRONMENT

Economic how the economy affects a business in terms of taxation,

government spending, general demand, interest rates, exchange

rates and other economic factors.

Social how consumers, households and communities behave and

their beliefs. For instance, changes in attitude towards health, or a

greater number of pensioners in a population. Political how changes in government policy might affect the business

e.g. a decision to subsidize building new houses in an area could be

good for a local brick works.

Legal the way in which legislation in society affects the business. E.g.

changes in employment laws on working hours. .

Technological how the rapid pace of change in production processes

and product innovation affect a business.

Ethical what is regarded as morally right or wrong for a business to

do. For instance should it trade with countries which have a poor

ECONOMICO


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ENVIRONMENT Economic environment refers to all forces which have an

economic impact on business

Economic factors throw light on the nature and direction of the

economy in which a firm operates

The various economic factors are : -

National Income

Savings

Investment

Prices, wages, Productivity

Capital Market

Policy Initiatives

International Transactions

Sectoral Growth

SOCIO-CULTURAL


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ENVIRONMENT Refers to the influence exercised by certain factors which are

beyond the companys gate

The social factors that affect a firm include the values,attitudes, beliefs, opinions and life-styles of persons in thefirms external environment

Social factors change continually

The various factors are : -

Demographic factors

Cultural factors

Religious, Ethical and moral factors

POLITICAL AND LEGALENVIRONMENT


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ENVIRONMENT Political environment refers to

the political factors which influence the managers

formulation and implementation of strategic

direction.

Legal Environment refers to

the environment influence exerted by the three

political institutions, viz., legislature, executive and

the judiciary in shaping, directing, developing and

controlling business activities

TECHNOLOGICALENVIRONMENT


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ENVIRONMENT It exercises considerable influence on business

Technological factors represent majo

opportunities and threats that must be taken

into account while formulating strategies

Technological advancements can create

competitive advantage

NATURAL ENVIRONMENT


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NATURAL ENVIRONMENT

It comprises of ecological, geographical and

topographical factors

Because of the environmental activities and the

knowledge of different type of pollutions that affect

the earth, most of the companies come out with

Eco-friendly products

Modified processes

Redesigned production equipment

Recycled by-products

INTERNATIONAL OR GLOBALENVIRONMENT


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ENVIRONMENT International factors influence the companies by new global

competitors Fluctuations of the rupee against foreign currencies

International factors assume greater importance when

domestic companies directly depend imports or exports on

certain countries

Advances in transportation and communication technology has

made the world as a global village and no part of it is cut off

from the rest

ETHICAL ENVIRONMENT


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ETHICAL ENVIRONMENT Application of moral principles to business problems is known

as business ethics Unethical behaviors:-

a)Providing false information

b)Blocking the stock

c) Padding expenses account

d)Exposure of trade secrets to competitors companies

e)Usage of companys property for the personal use

f) Cheating customers, overselling, unfair credit policies

g)Unfair wages and providing the employees with bad

working conditions, etc.,

management priniciples

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