Introduction to Management

2.  Management thought refers to the theories
that guide management of people in the
organisations
 Initially, these theories developed out of
practical experience of managers in the
industrial enterprises. Later on, they
borrowed ideas from other fields of study like
science, anthropology, sociology etc.

3.  Pre-scientific theories
 Classical theories
a. Taylor’s scientific management theory
b. Fayol’s administrative theory
c. Weber’s bureaucracy theory
 Behavioral theories
a. Human relations theory
b. Behavioral science theory
 Modern management theories
a. Quantitative theory
b. Systems theory
c. Contingency theory
d. Operational theory

4.  Important contributions are made by
- Charles Babbage
- James Montgomery
- Robert Owen
- Andrew Ure
- Charles Dupin
- Henry Robinson Towne
- James Watt and Mathew Robinson Boulton Watt
- Captain Henry Metcafe
These theories solved specific organizational
problems but these are not universally accepted
theories that can be applied to all organisations

5.  They represent early works on management
and focus on increasing industrial output by
providing financial incentives to employees.
The classical approach was developed
through three main streams:
1. Scientific management,
2. Administrative theory and
3. Bureaucracy

6. “SCIENTIFIC
MANAGEMENT” means
knowing exactly what we
want men to do and seeing
that they do it in the best
and the cheapest way.

7. F.W.Taylor (1856-1915), “Father Of Scientific Management”
defined the principles of scientific management.

8.  Taylor developed his theory on the basis of
his work experience in three companies:
Midvale Steel works, Simond Rolling mills and
Bethlehem Steel company. He is regarded as
Father of Scientific Management.
 He focused on finding the best way to do
the job by eliminating wastage of men and
material. He developed time and motion
studies to find optimum time and nature of
operations for successful completion of tasks.
 He also introduced differential wage rate
system to pay more to productive workers.

9.  Rule of thumb should be replaced with
science.
 There should be harmony, not discord in
group actions.
 Cooperation, not individualism.
 Maximum output, not restricted output.
 Development of workers to their fullest
capacity.

10. 1. Development of true science for
each element of work:
 Requires scientific study and
analysis of each element of the job.
 Through scientific management the
best way of doing the work can be
developed.
 Decisions should be made on the
basis of facts rather than opinions
and beliefs.

11. Workers should be selected and trained
in accordance with the requirements of
the job, to be entrusted to them.
Physical, mental and other requirements
should be specified for each job.
Systematic training and development
programmes should be designed to
improve their skill and efficiency.

12. Interest of employer and employees should be fully
harmonized.
Close cooperation ensures the work is in accordance
with the scientific principle.
4. Equal division of work and responsibility
 Management should decide the methods of work,
working conditions, time for completion of work etc.

13. Management is responsible for the supervision of the
work whereas workers should be concerned with the
execution of the plan.
5. Maximum prosperity for both employer and employees:
 Aim of management should be to secure maximum
prosperity for each employee along with the employer.
 More output, more profits and more salaries for the
employees.

14. 6. Mental revolution:
 It means a complete change in the
outlook of both management and
workers with their mutual relations
and in relation to their work.

15.  Time study
 Motion study
 Scientific task planning
 Standardization and simplification
 Differential piece rate system
 Functional foremanship

16.  Better management through scientific methods
 Discovered true capacity of workers
 Scientific selection of workers
 Mental revolution on the part of employers and
employees.
In addition to Taylor, several other persons like
Henry L Gantt, Harington Emerson, Frank Gilbreth
and Lillian Gilbreth also supported and
contributed in scientific management movement.

17.  Unrealistic assumptions
 Mechanistic approach
 Exploitation of labour
 Impracticable
 Narrow view
 No man is entirely an “economic man” and has other
needs that dictates and motivates his behavior
namely security, social or egoistic need.
 Taylor’s time and motion study is not accepted as
completely scientific. Since there is no such thing as
one best way of doing things because no two
individuals can be expected to work in the same
rhythm with the same attention and learning speed

18.  Separation of planning and doing resulted
in reduced need for skill and monotony of
work along with increased overhead cost
sand confusion as a result of taking orders
from 7-8 bosses.
 Advances in methods and better tools and
machines eliminated some workers, who
found it difficult to get other jobs. This
caused resentment among them.

20.  Administrative management theory attempts
to find a rational way to design an
organization as a whole. The theory generally
calls for a formalized administrative structure,
a clear division of labor, and delegation of
power and authority to administrators relevant
to their areas of responsibilities.
 Contributors:
1. Henry Fayol
2. James D. Mooney
3. Luther H Gulick

21.  There is a clear line of authority from the top
management down to the lowest employee.
 The authority and responsibility of each
employee is clearly communicated and in
writing.
 Each individual should perform one function
only.
 The span of control of manager never
exceeds six.
 Authority is delegated but not responsibility.

22.  Fayol focused on managing the organisation as a
whole rather than lower levels of organisation
only
 His theory revolves around
-Activities of a business: Technical, commercial,
financial, security, accounting and managerial
-Functions of a manager : Planning / organizing /
commanding /coordinating/ controlling.
- Abilities of managers: Physical, Mental, Moral,
General education, special knowledge and
Experience
- Principles of management

23.  Division of work
 Authority and responsibility
 Unity of command
 Unity of direction
 Discipline
 Subordination of individual interest to general interest
 Remuneration
 Centralization
 Scaler chain
 Order
 Equity
 Stability of tenure of personnel
 Initiative
 Espirit-de-corps

24.  His principles are widely accepted in business
and non-business world.
 He pioneered in highlighting the principles of
management

25.  Too formal
 Vague
 Inconsistency
 Pro-management bias
 Historical value

26.  It leads to the formation of small work groups with
norms and goals often at odds with those of
management where the individual does not care to
know how his job fits into the entire picture.
 It results in the dissatisfaction of the workers
because it does not provide them the opportunity
to use all their abilities.
 It results in an increase in the overhead cost
because more the specialization develops at one
level, the greater becomes the need for
coordination at very high level.

27.  For many of Fayol’s principles one can find an
equally plausible and acceptable contradictory
principle and there is nothing in Fayol’s writings to
indicate which is the proper one to apply.
 A business organization is not merely a techno
economic system but is also a social system. Hence
it is as important for it to provide social
satisfaction to the workers as to produce goods.
 There is no correlation between improved working
conditions and high production.
 The informal group and not the individual is the
dominant unit of analysis in organizations.

28.  A worker’s production norm is set and enforced by
his group and not by the time and month in study
done by any industrial engineer. Those who deviate
from the group norm are penalized by their co
workers.
 A worker does not work for money only. Non
financial rewards (such as the affection and respect
of his co-workers) also significantly affect his
behavior and largely limit the effect of economic
incentive plan.
 Employee-centered democratic and participative
style of supervisory leadership is more effective than
task centered leadership.

30.  Max Weber(1864-1920), a German
sociologist introduced the rational-legal
authority system/model to manage the
business organizations. His model is
characterized by
- Division of work
- Rules and regulations
- Hierarchy of authority
- Technical competence
- Record keeping
- Impersonal relations

31.  Advantages of specialization
 Rationality leads to efficiency
 Leads to optimum utilization of resources
 Depersonalization leads to equal treatment of all the workers
 Facilitates growth of large scale organizations
Limitations
 Ignores the sentiments of human beings
 Hampers human creativity and innovativeness
 Ignores the role of informal organizations
 Strict rules make the organizations procedure- oriented rather
than goal- oriented
 Written rules and regulations deny the benefits of open
communication
 Views organizations as closed systems with little or no interaction
with the environment.

32. • There is insistence on following standard rules
1.
• There is systematic division of work
2.
• Principle of hierarchy is followed
3.
• There is necessary for the individual to have
knowledge of and training in the application of rules
4.
• Administrative acts, decisions and rules are recorded
in writing
5.
• There is rational personnel administration
6.
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33.  Bureaucracy can be viewed as the logical
extension of management when it becomes
impossible for one person to fulfill all
management functions. The concept has enabled
most modern large scale organizations which
require functionally specialized staff to train and
control the people with heterogeneous
backgrounds and to delegate specific
responsibilities and functions to them
 Bureaucracy has come under a lot of criticism.
Important dysfunctional consequences of
bureaucracy are as follows:
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34. • Over conformity to rules
1.
• Buck passing
2.
• Categorization of queries
3.
• Displacement of goals
4.
• No real right to appeal
5.
• Neglect of informal groups
6.
• Rigid structure
7.
• Inability to satisfy the needs of mature
individuals
8.
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35. Basis of comparison Taylor Fayol
Aim To increase production at
the shop level
To increase overall
production of the
organization
Focus On improving workers’
output through work
simplification and
standardization
On improving overall
administration through
general principles
Management View From bottom to top From top to bottom
Results Scientific observation and
measurement
Universal truths
developed from personal
experiences
Personality Scientist Practitioner
Major contribution Science of industrial
management
A systematic theory of
management
Perspective Narrow Wider
Aspects studied Micro aspect- Macro aspect-

36. •It is a swing in the opposite direction and is as much incomplete as
the scientific management and administrative management
approaches. Taylor and Fayol ignored the human variables , the
human relations writers critically ignored other variables.
1.
•The implicit belief of this approach that an organization can be
turned into one big happy family where it is always possible to find
a solution which satisfies everybody is not correct.
2.
•It overemphasizes the importance of symbolic rewards and
underplays the role of material rewards hence they generally fail to
achieve their objective of higher production.
3.
•This approach provides an unrealistic picture about informal
groups by describing them as a major source of satisfaction for
industrial workers. They only make the worker’s day pleasant and
not his task which continues to be repetitive, monotonous and
uncreative.
4.
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37. •This approach is in fact production oriented and not employee
oriented as it claims to be. Many of its techniques trick workers
into a false sense of happiness but there is no improvement in their
well being.
1.
•The leisurely process of decision making of this approach cannot
work during an emergency. When decisions are to be made quickly,
when secrecy is important, work is reduced to a routine or when
subordinates do not particularly care to be consulted, this
approach may not work.
2.
•This approach makes an unrealistic demand on the superior. It
wants him to give up his desire for power when it is one of the
main reasons people become managers.
3.
•This approach is based upon on a wrong assumption that satisfied
workers are more productive workers and attempts to increase
output by improving working conditions and the human relations
skills of a manger generally do not result in the dramatic changes
4.
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38.  These theories focus on organisational goals
along with satisfaction of human needs.
 Shift in focus from workplace conditions to
human side of the organisation
 People- oriented approach substituted the
production- oriented approach
 Two important theories:
- Human relations theory
- Behavioural science theory

39.  Elton Mayo, the father of Human relation
approach focuses on increasing
organizational productivity by increasing the
morale of workers
 Results were obtained through experiments:
- Test room studies
(a) Illumination experiment
(b) Relay assembly room experiment
- Interviewing studies
- Observation studies

40.  Informal groups are important complements
to formal groups
 Social groups are more important than
financial incentives to motivate the workers
 Worker is a social man rather than rational
man motivated by financial incentives
 Work is considered as a group activity and
not as operations performed by individuals.
 Social and psychological factors influence
employee behaviour and productivity more
than physical work conditions

41.  Focus on organizational efficiency through satisfaction of
social and psychological needs of the workers
 Participative management is better than authoritarian
management.
 Design of the theory: social needs are secondary to
physiological needs
 Analysis of the theory: group dynamics may not be as
important as emphasized upon.
 Interpretation of the theory: cordial relations are over
emphasized . Conflict of opinion also generates new ideas
 Human relations philosophy: informal relations are as
important as formal motivation, communication and
leadership styles

42.  It applies scientific vision to human relations
theory
 Concepts from Psychology, Sociology and
Anthropology are applied to study human
behaviour
 Psychology – Study of individual behaviour
 Sociology – Study of human behaviour in groups
 Anthropology - Study of human behaviour as
individuals and members of groups
 Concepts from various disciplines are tested
before applying them in business organisations.

43.  Several sociologists and psychologists like
Abraham Maslow, Federick Herzberg, MC Gregor,
Douglas, Rensis Likert, Kurt Lewin, Keith davis,
Charles Angris,George Homans and others have
made significant contribution to the
development of this approach.
 This approach is an extension and improvement
of human relations movement. As this approach
suggested that individuals differ in their
attitudes, perceptions, their needs and goals also
differ from organisation’s needs and goals. So
the need is to achieve fusion between
organisation’s goals and human needs.

44. Human relations Behavioural Approach
1. Focus on individual behaviour and
needs.
Focus on groups and group behaviour
2. Emphasizes on interpersonal
relationships.
Emphasizes on group relationships.
3. Views worker as ‘social man’ Views worker as ‘self actualising man’
4. Always views group conflict as a
negative force.
Views group conflict as a source of
new ideas and innovations.
5. Views organisation as a social
system
Views organisation as a socio-technical
system
6.Emphasis on motivation, morale, and
job satisfaction
6.Emphasis on group dynamics and
informal organisation structure
6. Narrow scope as based on
Hawthrone experiment
Wide scope as based on Human
relations movement.

45.  These theories are responsive to environment changes
 They view organisations as dynamic open systems
having multiple objectives
 Management is multi-disciplinary and draws
knowledge from various fields to solve complex
business problems
 They forecast environment changes through scientific
techniques and discount them to the present business
situations
 These theories include:
- Quantitative theory
- Systems theory
- Contingency theory

46.  Also referred to as Management science approach
 It gained momentum during the second world war, where
interdisciplinary group of scientists who were engaged for this
purpose known as operation research (OR) teams worked at
analyzing operations and carrying out applied scientific research
and this technique was later used in solving problems in the
industry.
 Today OR works by calling in a mixed team of specialists from
relevant disciplines who analyze the problem and propose a
course of action to the management.
 The team constructs a mathematical model to simulate the
problem and the model shows in symbolic terms all the relevant
factors that bear on the problem and how they are interrelated.
 Each variables (like increasing the cost of raw materials) and
analyzing the different equations of the model, the team
determines the effect of each change and variables and presents
the management with a rational base for making a decision.
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47.  The focus is on decision making through quantitative tools
and techniques for making objectively rational decisions.
 This objective rationality implies an ability and willingness
to follow a reasoned, unemotional, orderly and scientific
approach in relating means with ends and in visualizing
the totality of the decision environment .
 The keynote of this approach is precision and perfection
which is achieved by expressing relationships and facts n
quantitative terms and facilitates disciplined thinking while
defining management problems and establishing
relationships among the variables involved.
 This approach has been widely used in planning and
control activities where problems can be precisely
identified and defined in quantitative terms. But its use is
still uncommon in such areas as organizing, staffing and
leading the organization where the problems are more
human than technical in nature.
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48.  It uses the services of quantitative specialists to
apply inter-disciplinary techniques to solve
business problems
 It includes:
- Management science: it uses mathematical
models like PERT, CPM, Simulation etc. to solve
business problems.
- Operations management: It applies quantitative
techniques of inventory management, statistical
quality control etc. to manage the production and
delivery of goods and services

49. -Management information system: It uses
computer based information to make
business decisions

50.  It uses quantifiable data to frame mathematical
models and handles complex decision- making
problems
 It uses comprehensive information through
computers which could not otherwise have been
available
Limitations
- It cannot be applied to study human behaviour
as it cannot be predicted through mathematical
equations
- The models may be used more for analysing the
results than used for making decisions

51. - All the variables affecting the business
decisions cannot be quantified in numeric
terms
- It may land up making satisfying decisions
rather than optimum decisions because of
constraints of time and cost to collect the
relevant data.

52.  As per this approach organisation is viewed from
a systems point of view.
 The main elements of systems approach are as
follows:
 Organisation as a purposeful system consisting
of several interconnected and interdependent
parts.
 The parts or components of a system are called
sub-systems.
 The position and function of each subsystem can
be analyzed and understood only in relation to
the other sub-systems and to the organisation as
a whole.
 Synergy effect.
 Every system has a boundary that separates it
from its environment.
 Systems are of two types: open and closed.

53.  Feedback is useful in evaluating and
improving the functioning of the system.

54.  The basic theme of contingency approach is
that organisations have to deal with different
situations in different ways.
 There is no single best way of managing
applicable to all situations. In order to be
effective, the internal functioning of the
organisation must be consistent with the needs
and demands of the external environment.
 In other words internal organisation should
have the capacity to face any type of external
situation with confidence.

55.  Management is entirely situational. The
management has to use the
measures/techniques as per the situation
from time to time.
 Management should match its approach as
per the requirements of the situation. The
policies and practices used should be suitable
to environmental changes.
 The success of management depends on its
ability to cope up with its environment.

56.  Contingency approach is pragmatic and open
minded.
 Theory relieves managers from dogmas and
set principles.
 The contingency approach has a wide-
ranging applicability and practical utility in,
organisation and management.
 The contingency approach focuses attention
on situational factors that affect the
management strategy.

57.  It is argued that the contingency approach
lacks a theoretical base.
 Under contingency approach, a manager is
supposed to think through all possible
alternatives as he has no dried principles to
act upon. This brings the need of more
qualities and skills on the part of managers.