Nature of Management Process
Management process can be treated as dynamic in which events and interrelationships
must be seen as dynamic, flexible and continuous, and must be considered as a whole.
Thus, management as a process involves a number of activities and assumes that the
totality of what managers do can be divided into a set of interrelated activities.
What is a Manager?
Someone whose primary responsibility is to carry out the management process.
Someone who plans and makes decisions, organizes, leads, and controls
human, financial, physical,
and information resources.
Kinds of Managers by Level and Area
Kinds of Managers by Level
The relatively small group of executives who manage the organization’s overall goals,
strategy, and operating policies.
Largest group of managers in organizations
Implement top management’s policies and plans.
Supervise and coordinate lower-level managers’ activities.
Managers who supervise and coordinate the activities of operating employees.
Kinds of Managers by Area
Work in areas related to getting consumers and clients to buy the organization’s
products or services.
Deal primarily with an organization’s financial resources.
Concerned with creating and managing the systems that create organization’s products
Kinds of Managers by Area (cont’d)
Human Resource Managers
Involved in human resource processes
Planning, recruiting and selection, training and development, designing compensation
and benefit systems, formulating performance appraisal systems.
Serve as generalists in functional areas and are not associated with any particular
Other Kinds of Managers
Assigned as specialists in positions directly related to the needs of the organization.
Management in Organizations
The Management Process
Skills and the Manager
Fundamental Management Skills
Skills necessary to accomplish or understand the specific kind of work being done in an
The ability to communicate with, understand, and motivate both individuals and groups.
The manager’s ability to think in the abstract.
The manager’s ability to visualize the most appropriate response to a situation.
Fundamental Management Skills (cont’d)
The manager’s abilities both to convey ideas and information effectively to others and
to receive ideas and information effectively from others.
The manager’s ability to recognize and define problems and opportunities correctly and
then to select an appropriate course of action to solve the problems and capitalize on
The manager’s ability to prioritize work, to work efficiently, and to delegate
Management: Science or Art?
The Science of Management
Assumes that problems can be approached using rational, logical, objective, and
Requires technical, diagnostic, and decision-making skills and techniques to solve
The Art of Management
Decisions are made and problems solved using a blend of intuition, experience, instinct,
and personal insights.
Requires conceptual, communication, interpersonal, and time-management skills to
accomplish the tasks associated with managerial activities.
Sources of Management Skills
Evolution of Management Thought
Scientific Management: 1900-1930
Administrative Management: 1916-1940
Human Relations Approach: 1930-1950
Social Systems Approach : 1940-1950
Decision Theory Approach: 1945-1965
Management Science Approach: 1950-1960
Human Behavior Approach: 1950-1970
Systems Approach: 1960’s
Contingency Approach: 1970’s
Scientific Management-Frederick Taylor
Features of Scientific Management:
Separation of Planning and Doing
Scientific Selection and Training of workers
Administrative Management-Henri Fayol
1.Division of work-- Dividing the work into small convenient components and giving
each component to one employee. It encourages employees for continuous improvement
in skills and the development of improvements in methods.
2. Authority and Responsibility-- The right to give orders and the power to exact
obedience with responsibility.
3. Discipline-- Self imposed and command discipline. No bending of rules.
4. Unity of command-- Each employee has one and only one boss.
5. Unity of direction-- A single mind generates a single plan and all play their part in
6. Subordination of individual interests-- When at work, only work things should be
pursued or thought about. There should be constant vigilance and supervision.
7. Remuneration-- Employees receive fair payment for services, not what the company
can get away with.
Administrative Management-Henri Fayol
8. Centralization-- Consolidation of management functions. Decisions are made from
9. Scalar chain (line of authority)-- Formal chain of command running from top to
bottom of the organization, like military
10. Order-- All materials and personnel have a prescribed place, and they must remain
11. Equity-- Equality of treatment . Justice and kindness.
12. Personnel tenure-- Limited turnover of personnel. Lifetime employment for good
13. Initiative-- Thinking out a plan and do what it takes to make it happen.
14. Esprit de corps– Union is strength. Harmony, cohesion among personnel. Manager
should encourage espirit de corps among workers.
Features of Bureaucracy:
Administrative Class- Bureaucratic organizations generally have administrative class
responsible for maintaining coordinative activities of the members.
Hierarchy-There are hierarchy of positions in the organization.
Division of Work- Work of the organization is divided on the basis of specialization to
take the advantages of division of labour.
Official Rules- Administrative process is continuous and governed by official rules.
Impersonal Relationships- Decisions are governed by rational factors rather than
personal involvement, emotions and sentiments.
Official Records- Organization is characterized by maintenance of proper official
Human Relations Approach- George Elton Mayo
The study continued for an extended period of time and had gone through various phases,
which is briefly described here. Hawthorne Experiments- General Electric Company,
• Phase I: Illumination Experiments
• Phase II: Relay Assembly Test Room
• Phase III: Interviewing Program
• Phase IV: Bank Wiring Test Room
Phase-I: Illumination Experiments
Phase-I: Illumination Experiments
In order to test the traditional belief that better illumination will lead to higher level of
productivity, two groups of employees were selected. In one, the control group, the
illumination remained unchanged throughout the experiment while in the other the
illumination was increased. As had been expected, the productivity went up in the
latter or what was known as the experimental group. But what baffled the
experimenters was the fact that the output of the control group also went up. As the
lighting in the formal group was not altered, the result was naturally puzzling and
difficult to explain. The investigators then started to reduce the illumination for the
test group. But in this case as well the output shoot up again. Thus the researchers had
to conclude that illumination affected production only marginally and there must be
some factor which produced this result.
Phase-II: Relay Assembly Test Room
In this phase, apart from illumination, possible effects of other factors such as length
of the working day, rest pauses and their duration and frequency and other physical
conditions were probed. The researcher who was continuously present with the group
to observe the functioning of the group acted as their friend and guide. Surprisingly,
here also the researchers found that the production of the group had no relation with
the working conditions. The outcome of the group went increasing at an all-time high
even when all the improvements in the working conditions were withdrawn. Nobody
in the group could suggest why this was so. Researchers then attributed this
phenomenon to the following:
• Feeling of perceived importance among the group members as they were
chosen to participate in the experiment.
• Good relationship among the group
• High group cohesion.
Phase III: Interviewing Program
From the Relay Assembly Test Room, the researchers for the first time became aware
about the existence of informal groups and the importance of social context of the
organizational life. To probe deeper into this area in order to identify the factors
responsible for human behavior, they interviewed more than 20,000 employees. The
direct questioning was later replaced by non-directive type of interviewing. The study
revealed that the workers’ social relationship inside the organizations has a significant
influence on their attitude and behavior. It was also found that merely giving a person an
opportunity to talk and air his grievances has a beneficial effect on his morale.
Phase IV: Bank Wiring Test Room
It had been discovered that social groups in an organization have considerable
influence on the functioning of the individual members. Observers noted that in
certain departments, output had been restricted by the workers in complete disregard
to the financial incentives offered by the organization. Mayo decided to investigate
one such department which was known as the bank wiring room where there were
fourteen men working on an assembly line.
It was found that the group evolved its own production norms which were definitely
much lower than that set by the authority. This was done deliberately by the group to
protect the slow workers and because of the apprehension that if the pace of
production were increased, a sizeable number of the workforce would eventually be
redundant. The group norm was so strictly adhered to by most of the group members
that nobody dared to violate it for the fear of being ostracized by the group. An
individual who had emerged as the informal leader controlled the group
Thus the Hawthorne study pointed out the following:
The business organization is essentially a socio-technical entity where the process of
social interactions among its members is also extremely important.
There is not necessarily a direct correspondence between working conditions and high
Economic motives are not the only motive for an employee. One’s social needs can
also significantly affect their behavior. Employee-centered leaders always tend to be
more effective than the task-oriented leaders.
The informal groups and not the individuals are the units of analysis in a group.
Social Systems Approach- Chester Barnard
According to this Approach:
Concept of organization- Organizations exists when, persons are able to communicate
,they are willing to contribute and they attempt to accomplish a common purpose.
Formal and Informal Organizations
Elements of Organization-specialization, incentives, power and logical decision making.
Authority- Authority acceptance-understand the communication, not inconsistent with
the organizational purpose, not incompatible with personal goal, mental and physical
Functions of the Executive- Maintenance of org. communication, securing of essential
services for achieving organizational purpose, the formulation and definition of
Executive Effectiveness- Leadership
Organizational Equilibrium- Matching of individual efforts and organizational efforts to
Decision Theory Approach- Simon
Concept of organization- To analyze an organization we should find out where and by
whom decisions are made.
Decision making- Intelligent activity, phase of inventing developing and analyzing
possible courses of action.
Bounded Rationality- Managers are satisfied with good enough decisions.
Administrative Man- Simplifies things, takes decisions by simple rules likes tricks of
trade or habit etc.
Organization Communication- More importance to informal communication.
Peter Drucker- Contemporary Approach
Nature of Management- Lead towards innovation.
Management Functions- Three basic functions of a manager are to make its
contributions for- specific purpose and mission of the institution, making work
productive and the worker achieving, managing social impacts and social responsibilities.
Organization Structure- organized , least no. of managerial levels, catch them young.
Federalism- Centralized control in decentralized structure.
Management by Objectives (MBO)-concept introduced in 1954.
Organizational Changes- Dynamic organizations for accepting the changes in the