fundamental of management

1. INSTITUTE OF FINANCE MANAGEMENT
• COURSE: BF AND ACC
• MODULE: FUNDAMENTALS OF MANAGEMENT
• CODE: BFT 06210
• LECTURER: DR. MSACKY RICHARD (PhD-PSPA)
• CONTACTS: EMAIL= rimsaki@yahoo.com
• Mobile: 0717447258

2. TOPIC ONE: CONCEPT OF MANAGEMENT IN AN ORGANIZATION
Sub-topics need to be covered:
Introduction to management
Features/characteristics of management
Functions of Management
Origins of management
Management levels
Management roles and responsibilities to the stakeholders
Major theories and principles of management

3. INTRODUCTION TO MANAGEMENT
 Management is a set of functions directed at the efficient and effective utilization of
resources in the pursuit of organizational goals. By efficient, we mean using resources
wisely and in a cost-effective way. By effective, we mean making the right decisions and
successfully implementing them. In general, successful organizations are both efficient
and effective.
 The process of using various resources (inputs) to produce some results (outputs) is
known as management, and the degree of success varies according to the efficiency with
which the resources are managed.
 Thus, management refers to the process of using men, money, machines, material and
processes through proper direction, coordination and integration of several activities so as
to produce desired results and attain predetermined goals. In other words, management
consists of a series of activities classified into various functions like planning, organising,
staffing, directing and controlling.

4. PRINCIPLES OF MANAGEMENT-
IMPORTANCE
 (1) Providing Managers With Useful Insights Into Reality
 The application of principles of management helps the managers to take right
decisions at the right time.
 (2) Optimum Utilisation of Resources & Effective Administration
 Resources are always scarce and limited.
 (3) Scientific Decisions
 Application of principles of management makes the manager more realistic,
thoughtful, justifiable and free from personal bias.

5.  (4) Meeting Changing Business Environment
 Although the principles are in the nature of general guidelines, they are
modified and help managers to meet the changing requirements of the
environment.
 5) Fulfilling Social Responsibility
 Principles of management not only help in achieving the goals of the
organisation effectively and efficiently, but they also guide the managers to
fulfil their commitment towards its employees and society.

6.  (6) Management Training, Education and Research
 Proper understanding of principles is the base of training, research and
development in the field of management.
 Management is taught on the basis of these principles, which help the
management institutes prepare future managers.
 These Principles help managers to take decisions and actions in the right
manner.
 Application of these principles by the managers brings innovation in the field
of management.

7. CHARACTERISTICS OF MANAGEMENT
 1. Management is goal directed: Every organisation is created to achieve certain goals. For
example, for a business firm it may be to make maximum profit and/or to provide quality
products and services.
 Management of an organisation is always aimed at achievement of the organisational goals.
Success of management is determined by the extent to which these goals are achieved.
 2. Management is intangible: Management is not a place like a graphic showing Board
meeting or a graphic showing a school Principal at her office desk which can be seen. It is an
unseen force and you can feel its presence in the form of rules, regulation, output, work
climate, etc.
 3. Management is transformation process: Management is a transformation process
consisting of planning, organizing, staffing, directing and controlling

8.  4.. Management is universal:
 It means that management is required for every type of organisation. It may be a business
organisation or social or political. It may be a small firm or a large one. Management is
required by a school or a college or university or a hospital or a big firm like Reliance
Industries Limited or a small variety store in your locality.
 Thus, it is a universal phenomenon and is common and essential element in all organisations.
 5. System of authority: System of authority means a hierarchy of command and
control. Managers at different levels possess varying degrees of authority.
 6. Co – Ordination: Various human beings organized in formal groups are
endeavoring to achieve the common organizational objectives, so various
departments in the organization must work in harmony with one another.

9.  7. Management is Dynamic: The ever changing social environment directly and indirectly effect
the group activity thus changing environments provide a challenge to management. Efficient
management can not remain static it must adopt it self to changing conditions.
 8. Management is decision making: The managers are decision makers the marketing managers
decides about how to market, when to market, where to market how to collect funds for
organization.
 9. Management is a profession: Management is not only a science but also an art. Art means
managers has to handle the person and things tactfully. Science means achieving objectives through
procedures
 10. Management is a continuous process: Management is an ongoing process. It continues as long
as the organisation exists. No activity can take place without management. To perform all activities
like production, sale, storage, operation etc. management is required. So, as long as these
activities continue the process of management also continues to operate

10.  11. Management is multi-disciplinary: Management of an organisation requires wide knowledge
about various disciplines as it covers handling of man, machine, material and looking after
production, distribution, accounting and many other functions.
 Thus, we find the principles and techniques of management are mostly drawn from almost all fields
of study like – Engineering, Economics, Sociology, Psychology, Anthropology, Mathematics, Statistics
 12. Management is a social process: The most important aspect of management is handling people
organised in work groups. This involves developing and motivating people at work and taking care
of their satisfaction as social beings.
 All managerial actions are primarily concerned with relations between people and so it is treated
as a social process.
 13. Management is situational: The success of management depends on, and varies from, situation
to situation. There is no best way of managing. The techniques and principles of management are
relative, and do not hold good for all situations to come.

11. IMPORTANCE OF MANAGEMENT
 Effective utilization of resources: Management tries to make effective
utilization of various resources. The resources are scarce in nature and to
meet the demand of the society, their contribution should be maximum for
the general interests of the society.
 Development of resources: Management develops various resources. This is
true with human as well as non-human factors. Most of the researches for
resource development are carried on in an organization way and management
is involved in those activities.

12.  To incorporate innovations: Today changes are occurring at a very fast rate
in both technology and social process and structure these changes need to be
incorporated to keep the organizations alive and efficient. Therefore, require
efficient management so that organizations work in the most efficient way.
 Integrating various interest groups: In the organized efforts, there are
various interest groups and they put pressure over other groups for maximum
share in the combined output. For example, in the case of business
organization, there are various pressure groups such as shareholders,
employees, government etc. These interest groups have pressure on an
organization.
 Stability in the society: Management provides stability in the society by
changing and modifying the resources in accordance with the changing
environment of the society. In the modern age, more emphasis is on new
inventions for the betterment of human beings

13. LEVELS OF MANAGEMENT
 Levels of management refer to the hierarchical structure that exists
within an organization.
 There are certain levels of management with varying degree of authority
and responsibilities.
 Some managers decide about the objectives of the business as a whole;
some managers perform functions to achieve these objectives in different
departments, like production, sales, etc, and some of the managers are
concerned with the supervision of day-to-day activities of workers.
 Managers performing different types of duties may, thus, be divided into
the following categories:

14. Top-Level Management (Strategic
Management):
• This level comprises the highest-ranking executives in the organization, such as
CEOs, presidents, and board of directors.
• Responsibilities include setting the overall direction and goals of the organization,
making strategic decisions, and establishing policies and procedures.
• Top-level managers focus on long-term planning, organizational growth, and
ensuring the organization's success and sustainability.
• They are primarily concerned with external factors that impact the organization, such
as market trends, competition, and regulatory changes.

15. Functions of Top Management
 a) Setting basic goals and objectives
 b) Expanding or contracting activities
 c) Establishing policies
 d) Monitoring performance
 e) Designing/Redesigning organization system
 f) Shouldering financial responsibilities etc

16. Middle-Level Management (Tactical Management):
• Middle-level managers occupy positions such as department heads, division
managers, and regional managers.
• Their role involves implementing the strategies and policies set by top
management, translating them into specific objectives and action plans for their
respective departments or units.
• Middle managers serve as a bridge between top management and frontline
employees, providing direction, guidance, and support to ensure that organizational
goals are met.
• They are responsible for coordinating activities within their departments, allocating
resources, resolving conflicts, and monitoring performance.
• Middle managers are often involved in short to medium-term planning and decision-
making, focusing on operational efficiency and effectiveness.

17. 3. Front-Line Management (Operational Management):
• Front-line managers, also known as first-line supervisors or team leaders, are
directly responsible for overseeing the day-to-day operations of a specific
workgroup, team, or department.
• They supervise and coordinate the activities of frontline employees, ensuring that
tasks are completed on time, quality standards are met, and resources are utilized
efficiently.
• Front-line managers play a crucial role in employee development, providing
training, feedback, and support to enhance performance and productivity.
• They are responsible for implementing operational plans, enforcing company
policies and procedures, and addressing any issues or concerns that arise during
the course of work.
• Front-line managers are typically more hands-on and involved in the details of daily
operations, focusing on immediate challenges and tasks.

18. NATURE OF MANAGEMENT
 The nature of management can be better appreciated by looking at it;
 as a process
 as a discipline
 as a group of individuals
 as a profession, and
 as a science as well as an art.

19. a. Management as a Process: Management consists of a series of inter-related activities
of planning, organising and controlling.
 All activities are undertaken in a proper sequence with a systematic approach so as to
ensure that all actions are directed towards achievement of common goals.
 Thus, it is regarded as a process of organising and employing resources to accomplish
the predetermined objectives.

20. b. Management as a Discipline:
 Management is a systematised body of knowledge that has
developed, grown and evolved over the years through practice and
research.
 The knowledge so cumulated is disseminated to successive
generations of managers and used by them in performing their jobs.
 Thus, it has become a separate field of study with its own principles
and practices and thus, evolved as an independent discipline with its
own techniques and approaches.

21. c. Management as a Group:
 Management normally refers to a group of managers working in an
organisation. It includes the top executive as well as the first line supervisors.
 These managers perform their functions jointly as a group. The success of
business does not depend on the efficiency of one, but of all manages taken
together.
 Managers work as a team so that objectives of the business are fully achieved.
However, in every organisation there are certain levels of management with
varying degree of the nature of authority and responsibilities. You will learn
about these later in this lesson.

22. d. Management as a Science as well as an Art:
 Management is regarded as a science as well as an art. Science refers
to a systematic body of knowledge with reference to understanding of
some phenomenon or subject or object of study.
 It establishes a cause and effect relationship between variables.
 It is based on systematic explanation, experimental analysis, critical
evaluation and logical consistency. In science we learn the ‘why’ of a
phenomenon.
 For example, two molecules/atoms of hydrogen and one
molecule/atom of oxygen makes water (H2O).

23. FEATURES OF MGT AS SCIENCE
1. Principles and Theories: Management science is grounded in established principles, theories, and models that have been developed
through empirical research and observation. These principles provide a foundation for understanding organizational behavior, decision-
making, and performance.
2. Data and Analysis: Scientific management relies on data collection, analysis, and experimentation to inform decision-making and
problem-solving. Managers use quantitative and qualitative methods to gather information, identify patterns, and make informed
decisions about resource allocation, process improvement, and strategy development.
3. Predictability and Control: Management science seeks to understand and predict organizational outcomes by identifying causal
relationships between variables. Through systematic analysis and modeling, managers can anticipate the impact of decisions and
interventions on performance metrics such as productivity, profitability, and customer satisfaction.
4. Continuous Improvement: A fundamental principle of management science is the pursuit of continuous improvement. By applying
scientific methods to analyze processes, identify inefficiencies, and implement evidence-based solutions, organizations can optimize
performance and adapt to changing market conditions.
5. Standardization and Replication: Management science emphasizes the importance of standardizing processes and procedures to
achieve consistency and reliability in organizational operations. By documenting best practices and replicating successful strategies,
managers can enhance efficiency and effectiveness across the organization.
6. Experimentation and Innovation: Scientific management encourages experimentation and innovation to drive organizational progress.
Managers use controlled experiments, pilot programs, and A/B testing to evaluate new ideas, technologies, and practices before
implementing them on a broader scale.
7. Interdisciplinary Approach: Management science draws on insights from various disciplines, including economics, psychology,
sociology, and engineering, to understand the complexities of organizational behavior and decision-making. By integrating knowledge
from multiple fields, managers can develop holistic solutions to complex problems.
8. Evidence-Based Decision Making: In management science, decisions are based on empirical evidence and logical reasoning rather
than intuition or personal judgment alone. By analyzing data and evaluating the potential outcomes of different courses of action,
managers can make more informed and effective decisions.

24. FEATURES OF MGT AS ART
1. Creativity and Innovation: Like an artist, a manager often needs to think creatively to solve problems, make
decisions, and develop new strategies. Just as an artist combines different elements to create something new, a
manager integrates resources, ideas, and perspectives to achieve organizational goals.
2. Subjectivity and Interpretation: Management involves subjective judgment and interpretation of complex situations.
Similar to how an artist interprets the world through their art, a manager interprets data, trends, and feedback to guide
their decisions and actions.
3. Flexibility and Adaptability: Successful management requires flexibility and adaptability to changing circumstances
and environments. Like an artist who adapts their technique or style to suit different projects or audiences, a manager
must adjust their approach based on the unique challenges and opportunities faced by their organization.
4. Expression and Communication: Effective management often involves conveying vision, values, and goals to others
within the organization. Similar to how an artist communicates emotions or ideas through their art, a manager
communicates expectations, feedback, and direction to employees and stakeholders.
5. Skill Development and Mastery: Management, like art, requires continuous learning, skill development, and mastery.
Just as an artist refines their craft through practice and experience, a manager hones their leadership, decision-making,
and interpersonal skills over time.
6. Emotional Intelligence and Empathy: A successful manager must understand and navigate the emotions and
motivations of others. Similar to how an artist taps into emotions to evoke a response from their audience, a manager
uses emotional intelligence and empathy to build relationships, inspire trust, and motivate their team.
7. Uniqueness and Personal Style: Each manager brings their unique personality, experiences, and style to their role,
similar to how artists express their individuality through their work. While there are principles and techniques of
management, the application of these principles can vary greatly depending on the manager's personal style and
approach.

25. e. Management as Profession: To be precise, any occupation that satisfies the following requirements is called a profession.
i). It must be an organised and systematised body of knowledge. Take for example professions
like engineering or chartered accountancy. These require a specialised knowledge.
ii). There is always a formal method of acquisition of such knowledge. In other words,
individuals, to pursue a specific profession, must acquire the specialised knowledge through
some formal institutions. For example, you need to get a degree in law or engineering to pursue
the profession of a lawyer or engineer.
iii). There exists an association to devise certain code of conduct for the professionals. This code
of conduct lays down norms to be observed by the professionals while doing their job. Violation
of the prescribed code can lead to derecognising the professional to practise.
iv). A profession is no doubt an occupation to earn one’s livelihood but the financial reward is
not the main measure of their success. The professional use their specialised knowledge to serve
the long-run interests of the society and are also conscious of their social responsibility.

26. ORIGINS OF MANAGEMENT
The development of management thought can be traced from the ancient world until the 19th
century’s Industrial Revolution.
Individual assignment:
With examples the origins of management thought to-date
Group Assignment:
Drawing examples from relevant sources show how management is arts and science.

27. TOPIC TWO
Describe the main functions of management in organization

28. FUNCTIONS OF MANAGEMENT
Gulick and Urwiik have classified management functions into seven. They coined
the word ‘PODSCORB’ to describe the functions of management.
a). Planning
 Planning is deciding in advance what is to be done, when it is to be done, and how
it is to be done. It is basically concerned with the selection of goals to be achieved
and determining the effective course of action from among the various
alternatives.
 This involves forecasting, establishing targets, developing the policies and
programming and scheduling the action, procedure, etc.,
 Thus, planning requires decisions to be made on what should be done, how it
should be done, who will do it, where it will be done, and why it is to be done.
 The essential part of planning consists of setting goals and programmes of
activities.

29. b). Organising
 After the plans have been drawn, management has to organise the activities, and
physical resources of the firm to carry out the selected programmes successfully.
 It also involves determining the authority and responsibility relationships among
functions, departments and personnel at various levels to ensure smooth and
effective function together in accomplishing the objective.
 Thus, the organising function of management is primarily concerned with identifying
the tasks involved and grouping them into units and departments, and defining the
duties and responsibilities of people in different positions within each department for
well coordinated and cooperative effort in the organisation.

30. c). Staffing
 Staffing is concerned with employing people for the various activities
to be performed.
 The objective of staffing is to ensure that suitable people have been
appointed for different positions.
 It includes the functions of recruitment, training and development,
placement and remuneration, and performance appraisal of the
employees.

31. d). Directing
 The directing function of management includes guiding the subordinates, supervising their
performance, communicating effectively and motivating them.
 A manager should be a good leader.
 He should be able to command and issue instruction without arousing any resentment
among the subordinates.
 He should keep a watch on the performance of his subordinates and help them out whenever
they come across any difficulty.
 The communication system, i.e., exchange of information should take place regularly for
building common understanding and clarity.
 The managers should also understand the needs of subordinates and inspire them to do
their best and encourage initiative and creativity.

32. e). Controlling
 This function of management consists of the steps taken to ensure that the
performance of work is in accordance with the plans.
 It is the process of comparing the plans with the results.
 It involves establishing performance standards and measuring the actual
performance with the standards set.
 If differences are noticed,corrective steps are taken which may include revision of
standards, regulate operations, remove deficiencies and improve performance.

33. f). Co-ordinating
 Management has to ensure that all the activities contribute to the achievement of
the objectives of the business as a whole.
 This requires integration of activities and synchronisation of efforts. The heads of
different departments should not treat each other as competitors but should work
as organs of one body.
 As the proper functioning of every organ of a human body is important for a
healthy body, the work of every department is important for the organisation as a
whole.
 Managers should, therefore, see that everybody in the organisation understands
its objectives and works in cooperation with others to achieve these objectives.
This function of management is called co-ordination.
 It consists of harmonising group effort so as to achieve common objectives.

34. • F). Reporting: is the collection of data that informs managers
on how to efficiently run their department.
• A successful business implements managerial reports not
only to track a department's key performance indicators
(KPIs) but also to help guide its managers toward making
accurate, data-driven decisions
• G). Budgeting: budgets can serve as a tool to forecast
profitability, allocate resources or communicate specialized
knowledge about one part of an organization to other parts.
• Q. Explain the managerial functions

35. THEORIES OF MGT IN WORK
ORGANIZATION
 A theory is a principle that is formed to explain things, phenomena, or a
group of facts already validated by data.
 A theory is believed to be a speculative idea that tells how things should be
done. It is also referred to as a set of organized and accepted beliefs that can
act as a guiding force for analysis
 Management theories are a collection of ideas that recommend general rules
for how to manage an organization or business.
 Management theories address how supervisors implement strategies to
accomplish organizational goals and how they motivate employees to perform
at their highest ability.

36. Benefits of management theories
 There are several reasons why leaders should study and apply management
theories, including:
 1. Increased productivity: Using these theories, leaders learn how to make
the most of their team members, improving performances and increasing
productivity.
 2. Simplified decision-making: Management theories give leaders strategies
that speed up the decision-making process, helping those leaders be more
effective in their roles.

37.  3. Increased collaboration: Leaders learn how to encourage team member
participation and increase collaboration in the workplace.
 4. Increased objectivity: Management theories encourage leaders to make
scientifically proven changes rather than relying on their judgment.

38. MAJOR THEORIES OF MANAGEMENT
Management theories have become integral to modern business practices. There are three major classifications for
management theories, these are:
1. Classical Management Theory
2. Behavioral Management Theory and
3. Modern Management Theory.
These classifications represents a different era in the evolution for management theories. Each of these classifications
further contain multiple sub-theories.
Classical Management Theory centers around execution and maximizing production.
Behavioral Management Theory focuses increasingly on human elements and viewing the workplace as a social
environment.
Modern Management Theory builds on the previous two theories, while incorporating modern scientific methods
and systems thinking.

39. 1. Classical Management Theory
1. Classical Management Theory
 Classical Management Theory is the oldest management theory.
 Classical Management Theory focuses on operations and the creation of
standards to increase production output.
 In Classical Management Theory, compensation is considered the primary
motivation for employees.
 The proponents of classical management theory include prominent figures
such as Frederick Winslow Taylor, Henri Fayol, and Max Weber.

40. Frederick Winslow Taylor:
 Fredrick Taylor often referred to as the "father of scientific management,"
Taylor is renowned for his work in the early 20th century.
 He advocated for the application of scientific methods to improve
productivity and efficiency in industrial settings. T
 aylor's principles focused on time and motion studies, standardization of work
processes, and the division of labor to optimize worker performance.

41. Henri Fayol:
 Fayol was a French mining engineer and management theorist who
developed the principles of administrative management.
 He outlined five functions of management—planning, organizing,
commanding, coordinating, and controlling—and fourteen principles of
management, including division of work, unity of command, and
scalar chain.
 Fayol's theories emphasized the importance of hierarchical structures
and clear lines of authority within organizations.

42. Max Weber:
 Weber, a German sociologist, is best known for his contributions to
the development of bureaucratic management theory.
 He introduced the concept of bureaucracy as an ideal organizational
structure characterized by a formal hierarchy, division of labor,
written rules and procedures, impersonal relationships, and merit-
based selection and promotion.
 Weber's ideas laid the foundation for understanding the
rationalization of authority and administrative processes in large
organizations.

43.  A manager practicing Classical Management Theory would be focused on improving
output and rewarding high-performing employees through wages or bonuses.
 There are three primary theories that comprise the Classical Management Theory:
a). Scientific management
b). Administrative management
c). Bureuacratic management theory

44. a) Scientific Management Theory
Scientific Management Theory is a very early management theory focused on minimizing waste and reducing
production times. It was developed by Frederick Taylor, who attempted using a scientific approach for improving
operations. Taylor’s theory emphasizes incentivizing employee performance and reducing “hit and trial” practices.
 Scientific management, also often known as Taylorism, is a management theory first advocated by
Federick W. Taylor.
 It uses scientific methods to analyze the most efficient production process in order to increase
productivity.
 Taylor’s scientific management theory argued it was the job of workplace managers to develop the
proper production system for achieving economic efficiency.

45. 4 Principles of Scientific Management
 1. Select methods based on science, not “rule of thumb.” Rather than
allowing each individual worker the freedom to use their own “rule of thumb”
method to complete a task, you should instead use the scientific method to
determine the “one best way” to do the job.
 2. Assign workers jobs based on their aptitudes. Instead of randomly
assigning workers to any open job, assess which ones are most capable of
each specific job and train them to work at peak efficiency.
 3. Monitor worker performance. Assess your workers’ efficiency and provide
additional instruction when necessary to guarantee they are working
productively.
 4. Properly divide the workload between managers and workers. Managers
should plan and train, while workers should implement what they’ve been
trained to do

46. LIMITATIONS OF SCIENTIF MANAGEMENT
 Overemphasis on Efficiency: Scientific management focuses heavily on increasing efficiency and
productivity through time and motion studies, standardization of tasks, and specialization of labor.
However, this narrow focus on efficiency may overlook other important aspects of organizational performance,
such as employee morale, creativity, and job satisfaction.
 Mechanistic View of Workers: Scientific management views workers as replaceable parts in a machine,
emphasizing their physical abilities rather than their potential for creativity, problem-solving, and
innovation.
This mechanistic view can lead to employee dissatisfaction, disengagement, and resistance to change,
ultimately undermining organizational effectiveness.

47.  Resistance from Workers: The implementation of scientific management often faces resistance from workers
who perceive it as a threat to their autonomy, dignity, and job security.
Taylor's system of "task management" and strict supervision can lead to feelings of alienation and disempowerment
among workers, resulting in lower morale and increased turnover.
 Limited Applicability: Scientific management may be more suitable for repetitive, routine tasks in
manufacturing and assembly line environments.
However, its principles may not be as effective in knowledge-based industries or dynamic, uncertain environments
where flexibility, creativity, and adaptability are valued.
 Neglect of Human Factors: Scientific management overlooks the importance of human factors such as
motivation, communication, and social dynamics in influencing worker behavior and organizational
performance.
Ignoring these factors can lead to a lack of employee engagement, teamwork, and organizational commitment.

48. b) Administrative Management Theory
Administrative Management Theory was developed by Henri Fayol, who is considered to be a founder of management
theory.
This theory considers all of the many activities that a business must conduct. Management is considered a primary
business activity and this theory provides detailed guidelines for managers.
 He believed that leaders had six main functions, to forecast, plan, coordinate, command and control,
and he developed principles that outlined how leaders should organize and interact with their teams
 He suggested that the principles should not be rigid but that it should be left up to the manager to
determine how they use them to manage efficiently and effectively
 He provides 14 principles of mgt
 These principles of management serve as a guideline for decision-making and management actions.
 They are drawn up by means of observations and analyses of events that managers encounter in
practice.

49.  1. Division of Work
 Henri believed that segregating work in the workforce amongst the worker will
enhance the quality of the product.
 Similarly, he also concluded that the division of work improves the productivity,
efficiency, accuracy and speed of the workers.
 This principle is appropriate for both the managerial as well as a technical work
level.
 2. Authority and Responsibility
 In order to get things done in an organization, management has the authority to
give orders to the employees. Of course with this authority comes responsibility.
 According to Henri Fayol, the accompanying power or authority gives the
management the right to give orders to the subordinates.

50.  3. Discipline-
 Without discipline, nothing can be accomplished. It is the core value for any project or any
management.
 Good performance and sensible interrelation make the management job easy and
comprehensive.
 Employees good behaviour also helps them smoothly build and progress in their professional
careers.
 4. Unity of Command-
 This means an employee should have only one boss and follow his command.
 If an employee has to follow more than one boss, there begins a conflict of interest and can
create confusion.

51.  5. Unity of Direction-
 Whoever is engaged in the same activity should have a unified goal. This
means all the person working in a company should have one goal and motive
which will make the work easier and achieve the set goal easily.
 6. Subordination of Individual Interest-
 This indicates a company should work unitedly towards the interest of a
company rather than personal interest. Be subordinate to the purposes of an
organization. This refers to the whole chain of command in a company

52.  7. Remuneration-
 This plays an important role in motivating the workers of a company. Remuneration can be
monetary or non-monetary. However, it should be according to an individual’s efforts they have
made.
 8. Centralization of authority
 Management and authority for decision-making process must be properly balanced in an
organization. This depends on the volume and size of an organization including its hierarchy.
 Centralization implies the concentration of decision making authority at the top management
(executive board).
 Sharing of authorities for the decision-making process with lower levels (middle and lower
management), is referred to as decentralization by Henri Fayol. Henri Fayol indicated that an
organization should strive for a good balance in this.

53.  9. Scalar Chain
 Hierarchy presents itself in any given organization. This varies from senior
management (executive board) to the lowest levels in the organization. Henri
Fayol ’s “hierarchy” management principle states that there should be a clear
line in the area of authority (from top to bottom and all managers at all
levels).
 This can be seen as a type of management structure. Each employee can
contact a manager or a superior in an emergency situation without
challenging the hierarchy. Especially, when it concerns reports about
calamities to the immediate managers/superiors.

54.  10. Order-
 A company should maintain a well-defined work order to have a favourable
work culture. The positive atmosphere in the workplace will boost more
positive productivity.
 11. Equity-
 All employees should be treated equally and respectfully. It’s the
responsibility of a manager that no employees face discrimination.
 12. Stability-
 An employee delivers the best if they feel secure in their job. It is the duty of
the management to offer job security to their employees.

55.  13. Initiative
 Henri Fayol argued that with this management principle employees should be
allowed to express new ideas. This encourages interest and involvement and
creates added value for the company.
 Employee initiatives are a source of strength for the organization according
to Henri Fayol. This encourages the employees to be involved and interested.
 14. Esprit de Corps-
 This refers to the belief that there must be a unified team contribution and
that cooperation is always greater than the aggregate of individual
performances..

56. LIMITATIONS OF THE THEORY
 Bureaucratic Rigidity: One major limitation of administrative management theory is its tendency
to promote bureaucratic rigidity within organizations.
Fayol's principles emphasize hierarchical structures, clear lines of authority, and standardized
procedures, which can lead to inflexibility and resistance to change.
In dynamic and rapidly changing environments, bureaucratic structures may hinder innovation,
adaptability, and responsiveness to market shifts.
 Overemphasis on Formality: Administrative management theory places a strong emphasis on
formal rules, regulations, and procedures to govern organizational activities.
While this ensures consistency and uniformity in operations, it may also stifle creativity, autonomy,
and initiative among employees.
Overreliance on formal authority and centralized decision-making can discourage employee
empowerment and hinder collaboration and innovation.

57.  Limited Focus on Human Relations: Fayol's principles primarily focus on the structural and administrative
aspects of management, neglecting the importance of human relations and employee motivation.
The theory does not adequately address the psychological needs, social dynamics, and interpersonal
relationships within organizations. As a result, it may fail to fully engage and inspire employees, leading to
reduced morale, job satisfaction, and productivity.
 Applicability to Modern Organizations: While administrative management theory was influential during
Fayol's time in the early 20th century, its applicability to modern organizations may be limited.
Contemporary organizations operate in increasingly complex and dynamic environments, characterized by rapid
technological advancements, globalization, and changing workforce demographics. Administrative management
principles may struggle to accommodate the diverse needs and challenges faced by modern organizations.
 Cultural Variations: Administrative management theory was developed within a Western cultural context and
may not fully align with the values, norms, and practices of organizations in different cultural settings.
The applicability of Fayol's principles may vary across cultures, requiring adaptation and customization to suit
the unique cultural contexts of different organizations.

58. c) Bureaucracy Theory
Bureaucracy Theory promotes reason to guide management decisions, rather than charisma
or nepotism. Developed by sociologist Max Weber, this theory emphasizes formal authority
systems. Unity and the authority of organizational hierarchies are central to Bureaucracy
Theory.

59. 6 characteristics of bureaucracies identified
by Weber
 1. Task specialization (division of labor). Weber felt that task specialization
promotes the timely completion of work at the highest level of skill.
 Tasks, therefore, in Weber’s ideal organization are divided into categories
based on team members’ competencies and areas of expertise.
 Employees and departments have clearly defined roles and expectations in
which they are responsible solely for the labor they do best.
 This is designed to maximize efficiency for the organization. Overstepping
one’s responsibilities, such as presenting new ideas outside of your
department’s scope, is generally frowned upon.

60.  2. Hierarchical management structure. Weber advocated that management
should be organized into layers, with each layer being responsible for its
team’s performance.
 Weber believed that each layer of management should provide supervision to
the layers below them while being subject to the control of those above
them.
 Thus, individuals at the top of the management hierarchy have the most
authority, while those at the bottom have the least power.
 This hierarchical structure clearly delineates lines of communication,
delegation and the division of responsibilities.

61.  3. Formal selection rules. In the ideal organization, Weber believed that
employees should be chosen based on their technical skills and competencies,
which are acquired through education, experience or training – no other
factors should be considered.
 And since workers are paid for their services, and services are divided by job
position, an employee’s salary is entirely dependent on their position.
 Contract terms are also entirely determined by the organization’s rules and
regulations, and employees have no ownership interest in a company.

62.  4. Efficient and uniform requirements. Employees, argued Weber, should
always know exactly what is expected of them.
 In the ideal organization, the rules are clearly defined and strictly enforced.
 This promotes uniformity within the organization and keeps the company
running as smoothly and efficiently as possible.
 If new rules and requirements need to be introduced, higher-level
management or directors are responsible for implementing and enforcing
them.

63.  5. Impersonal environment. Under Weber’s theory, relationships between
employees are to be only professional only.
 The impersonal environment characterized by bureaucracies is designed to
promote decision-making that is based solely on facts and rational thinking.
 It prevents favoritism or nepotism as well as involvement from outsiders or
political influence, anything that could interfere with the mission of the
organization.
 6. Achievement-based advancement. Weber felt that promotions within an
organization should be based solely on achievement, experience and
technical qualifications. Personal favors, relationships or personality traits
should not factor into personnel decisions.

64. LIMITATIONS
 Bureaucratic Red Tape: One major limitation of bureaucratic management theory is its tendency
to create excessive red tape and bureaucracy within organizations.
Weber's principles emphasize strict adherence to rules, procedures, and formalized structures, which
can lead to bureaucratic inefficiencies, delays in decision-making, and a lack of flexibility.
Overly bureaucratic organizations may struggle to respond quickly to changes in the external
environment or to innovate in response to new challenges.
 Rigidity and Resistance to Change: Bureaucratic structures tend to be hierarchical and
centralized, with clear lines of authority and rigid job roles.
While this ensures stability and consistency, it can also hinder adaptability and innovation.
Bureaucratic organizations may resist change due to entrenched power dynamics, resistance from
middle managers, and a culture of risk aversion.
This rigidity can prevent organizations from seizing new opportunities or addressing emerging threats
effectively.

65.  Impersonal and Alienating Work Environment: Bureaucratic management theory emphasizes
formalized rules and procedures over interpersonal relationships and individual needs.
This can create an impersonal and alienating work environment, where employees feel like cogs in a
machine rather than valued members of the organization. The emphasis on hierarchy and authority may
lead to a lack of empowerment, autonomy, and job satisfaction among employees, resulting in
decreased morale and productivity.
 Inefficiencies and Duplication of Effort: Bureaucratic structures often involve multiple layers of
hierarchy, with decisions passing through numerous levels of approval.
This can result in inefficiencies, delays, and duplication of effort, as decisions may be bogged down in
bureaucratic processes or require sign-off from multiple stakeholders. Additionally, bureaucratic
organizations may suffer from siloed departments and a lack of communication and coordination
between different parts of the organization, further exacerbating inefficiencies.
 Resistance to Innovation and Creativity: Bureaucratic management theory tends to prioritize
stability and order over innovation and creativity.
The emphasis on adherence to rules and procedures may discourage risk-taking and experimentation,
stifling creativity and inhibiting organizational learning. Bureaucratic organizations may struggle to
adapt to changing market conditions or embrace new technologies due to a fear of failure or a
reluctance to deviate from established norms.

66. 2. Behavioral Management Theory
Increasingly complex industries and organizations gave rise to more human interests in the workplace.
Management theories began to include more people-oriented methods. Human behavior and satisfying the
interpersonal needs of employees became more central to management. A manager practicing Behavioral
Management Theory might motivate teamwork through fostering a collaborative atmosphere.
There are two major theories that make up Behavioral Management Theory:
Human Relations Theory
Behavioral Science Theory

67. a) Human Relations Theory
Human Relations Theory considers the organization as a social entity. This theory recognizes that money alone is not enough
to satisfy employees. Morale is considered to be integral to employee performance. The major weakness of this theory is that it
makes several assumptions about behaviour.
 George Elton Mayo (1880-1949), born in Adelaide, Australia, is best known for his contributions to the Human
Relations Movement during his time as a Professor of Industrial Relations at Harvard Business School.
 Elton Mayo is widely regarded as the “father of the human relations movement,” as well as the “father of
HR”.
 Mayo was involved in several scientific studies of organizational psychology in the early twentieth century,
including the Philadelphia Spinning Mill Studies and the Hawthorne Experiments, which were influential in
the development of corporate culture in the US.

68.  Elton Mayo's management theory promotes the hypothesis that workers are
motivated by social and relational forces more than financial or
environmental conditions.
It holds that managers can increase productivity by treating employees as
unique individuals rather than interchangeable cogs in a machine.

69. CONTRIBUTORS
 In addition to Elton Mayo, several other contributors have played significant roles in the development of Human
Relations Management Theory:
 Mary Parker Follett: Follett was an early pioneer in the field of organizational behavior and management theory.
She emphasized the importance of integrating individual and group dynamics within organizations and
advocated for principles such as employee empowerment, conflict resolution through collaboration, and the
recognition of workers as valuable contributors to organizational success.
 Kurt Lewin: Lewin was a psychologist whose work contributed significantly to understanding group dynamics and
organizational behavior.
He introduced concepts such as "force field analysis" and the "unfreezing-change-refreezing" model, which
became fundamental to change management theories. Lewin's research laid the foundation for understanding the
social aspects of organizations and their impact on individual behavior.
 Douglas McGregor: McGregor's work on Theory X and Theory Y, introduced in his book "The Human Side of
Enterprise" (1960), had a profound impact on management thinking.
Theory X represents a traditional view of management where employees are seen as inherently lazy and requiring
strict supervision,
While Theory Y suggests that employees are self-motivated, responsible, and capable of self-direction. McGregor
advocated for participative management styles based on Theory Y assumptions.

70.  Abraham Maslow: Maslow's hierarchy of needs theory, proposed in his paper "A Theory of Human Motivation"
(1943), remains influential in understanding human behavior in organizational contexts. Maslow's theory
suggests that individuals have a hierarchy of needs ranging from basic physiological needs to higher-level
needs such as self-actualization.
Human relations management theory often incorporates Maslow's ideas to understand employee motivation and
satisfaction.
 Frederick Herzberg: Herzberg's two-factor theory, also known as the motivation-hygiene theory, proposed
that there are factors that lead to job satisfaction (motivators) and factors that lead to dissatisfaction
(hygiene factors) in the workplace.
His research emphasized the importance of intrinsic motivators such as achievement and recognition for
employee satisfaction, which has had a significant impact on

71.  Chris Argyris: Argyris's work focused on organizational learning, individual behavior, and organizational
structure.
He introduced concepts such as "double-loop learning" and "organizational defensive routines," which highlight
how organizations can inhibit learning and change through defensive behaviors. Argyris's ideas have influenced
the development of organizational development and learning theories within human relations management.

72. . The assumptions of the Theory include:
1. Focus on Human Behavior: Behavioral Science Theory assumes that understanding human behavior is
crucial for effective management. It recognizes that individuals have diverse needs, motivations, attitudes, and
perceptions that influence their behavior in organizations.
2. Individual Differences: The theory acknowledges that individuals differ in terms of personality traits, abilities,
values, and experiences. These individual differences can impact how people respond to organizational
policies, leadership styles, and work environments.

73. 3. Social and Environmental Influences: Behavioral Science Theory recognizes the influence of social and
environmental factors on individual behavior. It emphasizes the importance of interpersonal relationships,
group dynamics, organizational culture, and the broader social context in shaping behavior within
organizations.
4. Motivation and Satisfaction: The theory posits that people are motivated by a variety of factors, including
intrinsic needs, social relationships, and job satisfaction. It highlights the importance of understanding and
addressing employees' motivational needs to enhance performance and job satisfaction.
5. Psychological Processes: Behavioral Science Theory considers various psychological processes, such
as perception, cognition, learning, and decision-making, in understanding and predicting human behavior in
organizations. It recognizes that individuals may interpret and respond to situations differently based on their
psychological processes.
6. Change and Adaptation: The theory acknowledges that organizations and individuals are dynamic and
subject to change. It emphasizes the importance of organizational change management, leadership
development, and continuous learning to facilitate adaptation and growth in response to internal and external
challenges.

74. PRINCIPLES
 1. Treat employees well as individuals
 Mayo is rightly called the father of human relations movement. His ideas were a
milestone and a turning point in human relations approach of the management. He
recognised the importance of human beings in management. The social and
psychological needs of human beings cannot be ignored, if management wants to
enhance productivity.
 2. Promote positive group values and relationships
 Mayo was of the view that informal relationships in the organisation are more
effective than formal relationships. People form informal groups to give a bent to
their feelings and seek guidance for action from such groups.
 In Mayo’s words, “An organisation is a social system, a system of cliques,
grapevines, informal status systems, rituals and a minute of logical, non-logical
and illogical behaviour.”

75.  Social Man:
 Mayo developed a concept of ‘social man’. He said that man is basically
motivated by social needs and obtains his sense of identity through
relationships with others.
 He is more responsive to the social forces of the informal group rather than
managerial incentives and controls. He also related productivity to a social
phenomenon.

76.  Non-Economic Awards:
 The earlier assumption was that workers will work more if they are offered
more monetary incentives. Taylor was the main proponent of this approach.
Elton Mayo said that the techniques of economic incentives were not only
inadequate but also unrealistic.
 He was able to show that humane and respectful treatment, sense of
participation and belonging, recognition, morale, human pride and social
interaction are sometimes more important than pure monetary rewards.

77. LIMITATIONS OF HUMAN RELATIONS MGT
While Human Relations Management Theory has provided valuable insights into understanding the social and
psychological dynamics of organizations, it also has several limitations:
 Individual Differences: Human Relations Management Theory tends to overlook individual differences among
employees.
While it emphasizes the importance of social factors and group dynamics, it may not sufficiently account for the
diversity of personalities, values, and motivations that individuals bring to the workplace.
 Limited Scope: Human Relations Management Theory primarily focuses on interpersonal relationships and
group dynamics within organizations.
However, it may neglect broader environmental and contextual factors that influence organizational behavior,
such as market dynamics, technological advancements, and regulatory changes.
 Limited Empirical Support: Some aspects of Human Relations Management Theory lack robust empirical
evidence to support their claims. While there are notable studies like the Hawthorne experiments that
provided foundational insights, more research is needed to validate the theory's propositions comprehensively.

78.  Overemphasis on Informal Relationships: While recognizing the significance of informal interactions and
social networks in the workplace, Human Relations Management Theory may sometimes downplay the
importance of formal structures, processes, and hierarchies within organizations.
This can lead to a lack of attention to issues related to authority, power dynamics, and organizational culture.
 Ignores Economic Realities: Critics argue that Human Relations Management Theory can be idealistic and
overlook the economic imperatives that organizations face.
While emphasizing employee satisfaction and well-being, it may neglect the need for organizations to remain
competitive, efficient, and financially viable in a complex business environment.
 Lack of Integration with Other Theoretical Perspectives: Human Relations Management Theory often
operates in isolation from other management theories, such as classical management theories or contingency
theories.
This lack of integration can limit its applicability in addressing multifaceted organizational challenges that
require a holistic approach.
 Resistance to Change: Human Relations Management Theory may encounter resistance from traditionalists or
those accustomed to more hierarchical and autocratic management styles. Implementing human relations
principles in organizations may require significant cultural and structural changes, which can be met with
resistance from entrenched power structures

79. 3. Modern Management Theory
Modern organizations must navigate constant change and exponential complexities. Technology is an element that can change
and upend businesses very rapidly. Modern Management Theory seeks to incorporate these elements with human and traditional
theories. A manager practicing Modern Management Theory might use statistics to measure performance and encourage cross-
functional cooperation.
Three major modern theories comprise Modern Management Theory:

80. Quantitative Management Theory
 Quantitative Management Theory, also known as Operations Research or Management Science, is a branch of
management that applies mathematical and statistical methods to solve complex organizational problems and
optimize decision-making processes.
Here are some key aspects and characteristics of Quantitative Management Theory:
 Mathematical Modeling: Quantitative management relies heavily on mathematical modeling techniques to
represent real-world organizational systems and processes. These models can take various forms, such as linear
programming, queuing theory, simulation, optimization, and decision analysis.
 Data Analysis: It emphasizes the collection, analysis, and interpretation of data to derive actionable insights
for decision-making. This involves employing statistical methods, data mining, and analytics to identify
patterns, trends, and relationships within organizational data.
 Optimization: Quantitative management aims to optimize organizational processes, resources, and outcomes.
Optimization techniques are used to find the best possible solutions to complex problems, considering
constraints, objectives, and trade-offs.

81.  Decision Support Systems (DSS): Quantitative management often involves the development and
implementation of decision support systems, which are computer-based tools that aid managers in making
better decisions. These systems integrate data, models, and analytical techniques to assist with strategic,
tactical, and operational decision-making.
 Interdisciplinary Approach: It draws upon principles and techniques from various disciplines, including
mathematics, statistics, computer science, economics, engineering, and operations research. This
interdisciplinary approach enables a holistic understanding of organizational problems and facilitates the
development of innovative solutions.
 Problem-solving Orientation: Quantitative management is inherently problem-solving oriented. It seeks to
address a wide range of organizational challenges, such as resource allocation, production scheduling,
inventory management, supply chain optimization, project management, and risk analysis.

82.  Applicability across Industries: Quantitative management techniques have broad applicability across
different industries and sectors, including manufacturing, logistics, finance, healthcare, telecommunications,
transportation, and service industries.
Organizations of all sizes, from small businesses to multinational corporations, can benefit from the application
of quantitative management principles.
 Continuous Improvement: It promotes a culture of continuous improvement and evidence-based decision-
making within organizations.
By leveraging quantitative tools and techniques, managers can identify inefficiencies, streamline processes, and
enhance performance over time.

83. LIMITATIONS OF MANAGEMENT
 While Quantitative Management Theory offers powerful tools and techniques for decision-making and
problem-solving, it also has several limitations:
 Assumptions and Simplifications: Quantitative models often rely on simplifying assumptions to make complex
problems tractable. These assumptions may not fully capture the intricacies of real-world situations, leading
to potential inaccuracies and limitations in model predictions and recommendations.
 Data Requirements: Effective application of quantitative techniques requires access to accurate and relevant
data. However, obtaining high-quality data can be challenging, particularly in environments with limited data
availability, data reliability issues, or data that is difficult to quantify.
 Complexity: Some quantitative models can be highly complex, requiring specialized knowledge and skills to
develop, implement, and interpret. This complexity may pose challenges for managers who lack the
necessary expertise or resources to utilize these techniques effectively.
 Over-reliance on Numbers: Quantitative Management Theory may encourage an over-reliance on numerical
data and metrics at the expense of qualitative insights and contextual understanding. This narrow focus on
quantifiable factors may overlook important non-quantifiable aspects of organizational problems, such as
human behavior, culture, and politics.

84.  Risk of Misinterpretation: Misinterpretation or misapplication of quantitative models can lead to flawed
decision-making and unintended consequences. Managers may misinterpret model outputs, overlook important
assumptions, or fail to consider the limitations of the models, resulting in suboptimal outcomes or even
organizational failures.
 Resistance to Change: Implementing quantitative management approaches within organizations may
encounter resistance from employees who are skeptical of the validity or relevance of quantitative techniques
to their work. Overcoming resistance and fostering buy-in for quantitative approaches may require significant
organizational change management efforts.
 Ethical Considerations: Quantitative models may raise ethical concerns related to privacy, fairness, and
transparency, particularly when they are used to make decisions that impact individuals or groups. Biases in
data, algorithmic decision-making, and unintended consequences of model predictions can have ethical
implications that need to be carefully considered.
 Costs and Resource Requirements: Developing and implementing quantitative models can be resource-
intensive, requiring investments in technology, expertise, and data infrastructure. Small or resource-
constrained organizations may face challenges in adopting quantitative management approaches due to cost
constraints.

85. SYSTEM THEORY
 It is an interdisciplinary approach that views organizations as complex systems composed of interconnected
and interdependent components.
This theory emphasizes understanding organizations as holistic entities and focuses on how different parts of the
organization interact with each other and with their external environment. Here are some key aspects and
characteristics of System Management Theory:
 Holistic Perspective: System Management Theory adopts a holistic perspective, considering the organization
as a whole rather than focusing solely on individual components or functions. It recognizes that organizations
are complex systems with emergent properties that cannot be fully understood by examining their individual
parts in isolation.
 Interconnectedness: This theory highlights the interconnectedness and interdependence of various
components within the organization. It emphasizes how changes in one part of the organization can have
ripple effects on other parts and on the organization as a whole.
 Boundary Spanning: System Management Theory recognizes that organizations are open systems that interact
with their external environment. It emphasizes the importance of boundary spanning activities, such as
information exchange, collaboration, and adaptation, to effectively respond to external influences and
changes.

86.  Feedback Loops: Feedback mechanisms play a crucial role in System Management Theory. Feedback loops
enable organizations to monitor their performance, detect deviations from desired outcomes, and make
necessary adjustments to achieve their goals. Positive feedback reinforces existing behaviors, while negative
feedback helps correct deviations and maintain stability.
 Emergence: System Management Theory acknowledges that organizations exhibit emergent properties that
arise from the interactions of their components. These emergent properties may not be predictable based
solely on the characteristics of individual components but instead result from the dynamic interactions and
relationships within the system.
 Complexity and Uncertainty: Organizations operating in complex and uncertain environments can benefit
from the insights provided by System Management Theory. This theory helps managers understand and
navigate the complexity and uncertainty inherent in organizational contexts by focusing on system dynamics,
resilience, and adaptability.
 Systems Thinking: Systems thinking is a fundamental aspect of System Management Theory. It encourages
managers to adopt a systemic perspective and consider the interconnectedness of different elements within
the organization. Systems thinking helps managers identify leverage points for intervention and develop more
effective strategies for organizational improvement.

87.  Application across Disciplines: System Management Theory is not limited to
management but is applicable across various disciplines, including
engineering, biology, ecology, sociology, and psychology.
Its principles can be used to analyze and improve the functioning of diverse
systems, ranging from biological ecosystems to social organizations.

88. Limitations of system mgt theory
 Complexity: System management theory often deals with complex systems, which can be challenging to
understand, model, and manage effectively. The interconnectedness of various components within a system
can lead to unpredictability and emergent behaviors, making it difficult to devise comprehensive
management strategies.
 Boundary Definition: Defining the boundaries of a system accurately can be subjective and may vary
depending on the perspective of different stakeholders. This ambiguity in boundary definition can lead to
misinterpretation and ineffective management approaches.
 Non-linearity: Many systems exhibit non-linear behaviors, where small changes in input can lead to
disproportionately large outputs or even unexpected outcomes. Predicting and managing such non-linear
behaviors can be challenging, as traditional linear models may not adequately capture the dynamics of the
system.
 Uncertainty and Dynamic Nature: Systems are often subject to environmental changes, technological
advancements, and other external factors that can introduce uncertainty and dynamism. Managing systems in
such environments requires flexibility and adaptability, which may not always be achievable using
conventional management approaches.

89.  Limited Predictability: Despite advances in modeling techniques, the behavior of complex systems can still
be inherently unpredictable, especially in highly dynamic and uncertain environments. This limited
predictability can hinder the effectiveness of management strategies, as decision-makers may struggle to
anticipate and mitigate potential risks and disruptions.
 Implementation Challenges: Implementing system management principles in real-world contexts can be
challenging due to organizational inertia, resistance to change, and resource constraints. Additionally,
coordinating efforts across multiple stakeholders with diverse interests and objectives can further
complicate the implementation process.
 Ethical Considerations: System management decisions can have far-reaching ethical implications, particularly
concerning issues such as equity, justice, and sustainability. Balancing competing interests and values while
managing complex systems requires careful consideration of ethical principles, which may not always be
adequately addressed within traditional management frameworks.
 Lack of Universal Framework: While system management theory provides a conceptual framework for
understanding and managing complex systems, it may not offer a one-size-fits-all solution applicable to all
contexts. Different systems may require tailored approaches based on their unique characteristics, making it
challenging to develop a universal framework for system management.

90. Contigency management theory
 Contingency management theory is a psychological framework that emphasizes the role of environmental
consequences in shaping behavior. It suggests that behavior is a function of its consequences, meaning that
behaviors are more likely to occur if they are followed by positive reinforcement or if they lead to the avoidance of
negative outcomes.
 This theory was initially developed by B.F. Skinner, a prominent psychologist, and it forms the basis of operant
conditioning, a type of learning in which behaviors are strengthened or weakened by the consequences that follow
them. According to contingency management theory, behavior is controlled by its consequences, and individuals
learn through reinforcement and punishment.
 Contingency management has been widely applied in various settings, including education, parenting,
organizational management, and clinical psychology. In clinical psychology, contingency management techniques
are often used in behavior modification programs to help individuals change problematic behaviors, such as
substance abuse or unhealthy eating habits. These techniques involve systematically reinforcing desired behaviors
and withholding reinforcement for undesired behaviors.

91. Key concepts of cocepts of contigency
 Reinforcement: Behavior is strengthened or weakened based on its consequences. Positive
reinforcement involves presenting a desirable stimulus after a behavior, increasing the
likelihood of that behavior in the future. Negative reinforcement involves removing an
aversive stimulus after a behavior, also increasing the likelihood of that behavior.
 Punishment: Punishment involves presenting an aversive stimulus or removing a desirable
stimulus following a behavior, which decreases the likelihood of that behavior occurring
again.
 Schedules of Reinforcement: Different patterns or schedules of reinforcement (e.g.,
continuous reinforcement, intermittent reinforcement) can have varying effects on behavior.
For example, intermittent reinforcement schedules can lead to more persistent behavior
compared to continuous reinforcement.
 Discriminative Stimuli: These are cues or signals in the environment that indicate when a
particular behavior will be reinforced or punished.
 Extinction: When reinforcement for a behavior is discontinued, the behavior tends to
decrease in frequency.

92. LIMITATIONS OF CONTIGENCY MGT THEORY
 Complexity: Contingency management theory suggests that there is no one-size-fits-all approach to
management and that practices should be tailored to specific situations.
However, identifying the relevant contingencies and determining the best course of action can be complex and
challenging, especially in dynamic and uncertain environments.
 Resource Intensive: Implementing contingency management practices often requires significant resources,
including time, expertise, and financial investment.
Small organizations or those with limited resources may find it difficult to implement these practices effectively.
 Difficulty in Predicting Contingencies: It can be challenging to accurately predict all the contingencies that
may influence organizational outcomes.
Factors such as changes in the external environment, unexpected events, and human behavior can make it
difficult to anticipate and plan for all possible contingencies.
 Subjectivity: Identifying and interpreting contingencies often involves subjective judgments and
interpretations.
Different managers may perceive and interpret contingencies differently, leading to inconsistency and potential
conflicts in decision-making.

93.  Overemphasis on Rationality: Contingency management theory tends to emphasize rational decision-making
based on objective analysis of contingencies.
However, in practice, decision-making is often influenced by emotions, biases, and political factors, which may not
always align with rational analysis.
 Limited Predictive Power: While contingency management theory provides a framework for understanding how
different factors influence organizational outcomes, it may have limited predictive power in complex and
dynamic environments where multiple contingencies interact in unpredictable ways.
 Resistance to Change: Implementing contingency management practices may require organizational changes
and may face resistance from employees who are accustomed to existing practices or who perceive the changes
as threatening their interests or status within the organization.
 Ethical Considerations: Some contingency management practices, such as differential reinforcement or
punishment, may raise ethical concerns, particularly if they involve manipulating or controlling employee
behavior in ways that are perceived as unfair or coercive.

94. REVIEW QUESTIONS
 What are the key principles of Scientific Management proposed by Frederick
Taylor, and how did it revolutionize the way organizations approached work
efficiency?
 Discuss the main components of Henri Fayol's Administrative Management Theory
and explain how they contribute to organizational effectiveness.
 Compare and contrast the classical management theories of Frederick Taylor and
Max Weber, highlighting their respective approaches to organizational structure
and employee motivation.
 Describe the Hawthorne Studies and their significance in shaping management
thought. How did these studies contribute to our understanding of employee
behavior and motivation?
 Explain McGregor's Theory X and Theory Y. How do these theories differ in their
assumptions about employee behavior and management practices?

95.  Discuss Abraham Maslow's Hierarchy of Needs theory and its implications for
employee motivation and management practices.
 What are the key principles of Douglas McGregor's Theory Z? How does Theory Z
differ from other management theories, and what are its implications for
organizational culture and structure?
 Explain the key concepts of Systems Theory in management. How does Systems
Theory help managers understand and manage organizations as complex,
interconnected systems?
 Describe the main principles of Contingency Theory in management. How does
Contingency Theory suggest that management practices should be tailored to fit
specific situations and contexts?
 Discuss the core ideas of Peter Drucker's Management by Objectives (MBO)
approach. How does MBO facilitate goal-setting, performance measurement, and
employee motivation in organizations?

96. MODULE NAME: FUNDAMENTALS OF MANAGEMENT
MODULE CODE: BFT 06210
TOPIC THREE: MANAGERIAL SKILLS
Sub-topics need to be covered:
Introduction to management skills
Importance of managerial skills in an organization
Relationship between managerial skills and management levels.
Supervise a small group of employees

97. INTRODUCTION TO MANAGEMENT SKILLS
 Definition of Management skills:
Management skills can be defined as certain attributes or abilities that an executive should possess in
order to fulfil specific tasks in an organization.
They include the capacity to perform executive duties in
an Organization while avoiding crisis situations and promptly solving problems when they occur.
 OR Management skills are abilities and traits needed to perform certain duties, usually as it pertains to
overseeing a team, such as solving problems, communicating well, and motivating employees.
 Such skills can be learned, through practical experience, or in courses and then honed on the job.
 Management skills can be developed through learning and practical experience as a manager.
 The skills help the manager to relate with their fellow co-workers and know how to deal well with their
subordinates, which allows for the easy flow of activities in the organization.

98. Mgt skills
 Management skills encompass a broad range of abilities and competencies that
enable individuals to effectively lead, organize, plan, and control resources within
an organization to achieve its goals. These skills can be categorized into several key
areas:
 Leadership Skills: Effective managers must possess strong leadership skills to
inspire and motivate their teams, provide direction, and cultivate a positive work
environment.
Leadership skills include communication, decision-making, delegation, conflict
resolution, and the ability to coach and develop employees.
 Communication Skills: Clear and effective communication is essential for
successful management. Managers need to convey information clearly, listen
actively, provide feedback, and communicate expectations to their teams.
Strong communication skills also facilitate collaboration, problem-solving, and
relationship-building within the organization.

99.  Time Management Skills: Managers often juggle multiple tasks and responsibilities simultaneously.
Effective time management skills enable managers to prioritize tasks, allocate resources
efficiently, meet deadlines, and maximize productivity.
 Strategic Planning Skills: Managers must be able to think strategically and develop long-term
plans to achieve organizational objectives.
This involves setting goals, identifying opportunities and threats in the external environment,
analyzing strengths and weaknesses within the organization, and formulating strategies to capitalize
on opportunities and overcome challenges.
 Decision-Making Skills: Managers are constantly faced with making decisions that impact the
organization.
Strong decision-making skills involve gathering relevant information, analyzing data, considering
alternatives, evaluating risks, and making informed choices that align with organizational goals and
values.
 Problem-Solving Skills: Effective managers are adept at identifying and solving problems that
arise within the organization.
This involves diagnosing issues, generating creative solutions, implementing action plans, and
evaluating outcomes to address challenges and improve processes.

100.  Team Building and Collaboration Skills: Managers need to build cohesive teams and foster collaboration
among team members to achieve common goals. This involves creating a supportive and inclusive work
environment, promoting teamwork, resolving conflicts, and leveraging the strengths of individual team
members.
 Adaptability and Flexibility: In today's dynamic business environment, managers must be adaptable and
flexible in responding to change.
This includes being open to new ideas, embracing innovation, and adjusting strategies and plans as needed to
stay competitive and meet evolving market demands.
 Emotional Intelligence: Effective managers possess high emotional intelligence, which enables them to
understand and manage their own emotions as well as those of others.
This includes empathy, self-awareness, self-regulation, and the ability to build strong relationships and navigate
interpersonal dynamics effectively.
 Ethical and Integrity: Managers must demonstrate integrity and ethical behavior in their decision-making
and interactions with others.
Upholding ethical standards fosters trust, credibility, and respect within the organization and ensures that
actions align with the organization's values and principles.

101. IMPORTANCE OF MANAGEMENT SKILLS IN ORGANIZATION
 Achieving Organizational Goals: Effective management skills help align individual and team efforts
with the organization's strategic objectives. Managers with strong leadership, strategic planning, and
decision-making skills can set clear goals, develop action plans, and mobilize resources to achieve
desired outcomes.
 Optimizing Resource Allocation: Management skills enable organizations to allocate resources
efficiently and effectively. Managers with strong time management, budgeting, and resource allocation
skills can optimize the use of financial, human, and material resources to maximize productivity and
minimize waste.
 Driving Innovation and Adaptation: Management skills play a crucial role in driving innovation and
fostering adaptability within organizations. Managers who possess creativity, critical thinking, and
problem-solving skills can identify opportunities for innovation, encourage experimentation, and adapt
strategies and processes to changing market conditions and technological advancements.
 Creating a Positive Work Environment: Strong management skills contribute to creating a positive
work environment characterized by trust, collaboration, and employee engagement. Managers with
excellent communication, conflict resolution, and team-building skills can foster strong relationships,
promote open communication, and support the well-being and professional development of employees.

102.  Enhancing Organizational Performance: Effective management skills are directly
linked to improved organizational performance and competitiveness.
Managers who excel in strategic planning, performance management, and continuous
improvement can drive operational excellence, increase productivity, and achieve
sustainable growth and profitability for the organization.
 Managing Change and Uncertainty: In today's dynamic business environment,
organizations face constant change and uncertainty.
Management skills are essential for navigating these challenges effectively. Managers
who are adaptable, resilient, and skilled in change management can lead teams
through transitions, overcome obstacles, and seize opportunities for innovation and
growth.

103.  Mitigating Risks and Challenges: Management skills help organizations identify, assess, and mitigate
risks and challenges that may impact their operations.
Managers with strong risk management, problem-solving, and crisis management skills can anticipate
potential threats, develop contingency plans, and respond effectively to unexpected events to safeguard
the organization's reputation and continuity.
 Promoting Organizational Culture and Values: Management skills influence organizational culture and
values by setting the tone for behavior and decision-making within the organization.
Managers who demonstrate integrity, ethical leadership, and a commitment to diversity and inclusion can
foster a culture of trust, accountability, and respect that aligns with the organization's values and enhances
its reputation.

104. RELATIONSHIP BETWEEN MANAGERIAL SKILLS AND MANAGEMENT LEVELS
 DETERMINANTS OF RELATIOSNHIP
 The relationship between managerial skills and management levels is influenced by several factors, including:
 Scope of Responsibility: The level of management determines the scope of responsibility and the breadth of
skills required. Top-level managers typically have broader responsibilities that require strategic thinking,
long-term planning, and high-level decision-making skills.
Middle-level managers focus on coordinating and implementing strategies within their departments or units,
requiring skills in coordination, communication, and team leadership. Front-line managers are responsible for
overseeing day-to-day operations and supervising employees, necessitating skills in operational planning,
problem-solving, and team management.
 Organizational Structure: The organizational structure, including its size, complexity, and hierarchy,
influences the relationship between managerial skills and management levels.
In a flat organization with fewer management layers, managers at all levels may need to possess a wider range
of skills to fulfill their roles effectively. In contrast, in a hierarchical organization with multiple management
levels, there may be more specialization of skills at each level.

105.  Industry and Sector: The industry and sector in which an organization operates can impact the
required managerial skills at different management levels.
For example, in highly regulated industries such as healthcare or finance, managers may need specialized
knowledge and skills related to compliance, risk management, and regulatory affairs.
In dynamic and innovative industries such as technology or startups, managers may need strong
entrepreneurial skills, adaptability, and a willingness to take risks.

106.  Organizational Culture and Values: Organizational culture and values shape the
expectations and behaviors of managers at different levels.
A culture that values collaboration, innovation, and employee empowerment may
require managers at all levels to possess strong interpersonal skills, emotional
intelligence, and a focus on employee development.
In contrast, a culture that prioritizes hierarchy, control, and adherence to
procedures may place greater emphasis on technical expertise, adherence to
policies, and hierarchical communication.
 External Environment: The external environment, including market conditions,
competition, technological advancements, and regulatory changes, can influence
the skills required at different management levels.
Managers need to adapt their skills and strategies in response to external factors
such as changes in consumer preferences, shifts in industry trends, or disruptions in
the competitive landscape.

107.  Leadership Style: The leadership style of senior management influences the skills required at lower
management levels.
For example, a transformational leadership style that emphasizes vision, empowerment, and innovation
may foster a culture of creativity and initiative throughout the organization, requiring managers at all
levels to possess strong leadership and motivational skills.
 Training and Development Programs: The availability of training and development programs within an
organization can impact the relationship between managerial skills and management levels.
Organizations that invest in leadership development, mentorship, and skill-building initiatives can help
managers at all levels acquire the necessary competencies to succeed in their roles and advance their
careers.

108.  The relationship between managerial skills and management levels is dynamic and
varies depending on the level of management within an organization. Generally,
different management levels require different sets of skills, although there is
some overlap. Here's how managerial skills relate to different management levels:
 Top-Level Management (Strategic Management):
 Strategic Thinking and Planning: Top-level managers, such as CEOs and senior executives,
need strong strategic thinking skills to set the overall direction and long-term goals of
the organization.
 Decision-Making: They must make high-level decisions that have a significant impact on
the organization's future, requiring strong decision-making and problem-solving skills.
 Leadership: Effective top-level managers must possess strong leadership skills to inspire
and motivate employees, foster innovation, and drive organizational change.

109.  Middle-Level Management (Tactical Management):
 Coordination and Integration: Middle-level managers, such as department heads
and regional managers, need skills in coordinating and integrating the activities of
different departments or units to achieve organizational objectives.
 Communication: They must effectively communicate strategic goals and directives
from top management to lower-level employees and provide feedback and updates
to higher management.
 Conflict Resolution: Middle managers often deal with conflicts and disagreements
between departments or teams, requiring strong conflict resolution and
negotiation skills.

110.  Front-Line Management (Operational Management):
 Operational Planning and Execution: Front-line managers, such as supervisors and
team leaders, focus on day-to-day operations and must possess skills in operational
planning and execution to ensure tasks are completed efficiently and effectively.
 Team Leadership: They are responsible for leading and supervising teams, requiring
skills in team building, motivation, and performance management.
 Problem-Solving: Front-line managers frequently encounter operational challenges
and must be able to quickly identify and solve problems to keep operations running
smoothly.
Q. Explain the mgt skills required for each level

111. MANAGING A SMALL GROUP OF EMPLOYEES
 A small group of employee can be:
i). A team
ii). A department/section
iii)

112. Rationale/importance
 Enhanced Collaboration and Communication: Small groups foster close-knit relationships
among employees, which can facilitate effective collaboration and communication. Team
members are more likely to know each other well, understand each other's strengths and
weaknesses, and communicate openly and freely.
 Increased Innovation and Creativity: Small groups often encourage innovation and creativity
by providing a supportive environment for brainstorming, idea generation, and
experimentation. Employees feel more comfortable expressing their ideas and exploring new
approaches in a smaller, less intimidating setting.
 Efficient Decision-Making: Small groups can make decisions more quickly and efficiently
compared to larger groups or bureaucratic structures. With fewer stakeholders involved,
decision-making processes are streamlined, and there is less likelihood of delays or
bureaucratic red tape.
 Flexibility and Adaptability: Small groups are often more agile and adaptable to change than
larger organizational structures. They can respond more quickly to shifting market
conditions, emerging opportunities, or unexpected challenges, allowing the organization to
stay competitive and responsive to customer needs.

113.  Empowerment and Ownership: In small groups, employees often have more
autonomy and ownership over their work, leading to higher levels of motivation,
engagement, and job satisfaction. They feel a greater sense of responsibility for
the group's success and are more likely to take initiative and contribute their best
efforts.
 Specialization and Expertise: Small groups can bring together individuals with
specialized skills, knowledge, and expertise to tackle specific tasks or projects.
This allows the organization to leverage the diverse talents of its employees and
achieve high-quality outcomes in areas where specialized expertise is required.
 Improved Problem-Solving: Small groups are well-suited for problem-solving and
decision-making tasks, as they provide a forum for discussing issues, analyzing
alternatives, and reaching consensus. Employees can draw on their collective
expertise and perspectives to identify creative solutions to complex problems.

114.  Stronger Relationships and Trust: Working in a small group fosters strong
relationships, trust, and camaraderie among team members. Employees feel
supported, valued, and respected by their colleagues, which contributes to a
positive work environment and a sense of belonging within the organization.
 High Performance and Productivity: Small groups that are well-led,
motivated, and empowered can achieve high levels of performance and
productivity. They are focused, goal-oriented, and committed to achieving
results, leading to increased efficiency and effectiveness in their work.
 Employee Development and Growth: Small groups provide opportunities for
employee development and growth through learning, mentorship, and
collaboration. Employees can learn from each other, share knowledge and
best practices, and develop new skills that enhance their professional
capabilities and career prospects.

115. Factors for creating a group/team
 Purpose and Objectives: Clearly define the purpose and objectives of the group. Determine
what specific tasks, projects, or goals the group will be responsible for and how its work
aligns with the organization's overall mission and strategic objectives.
 Composition and Diversity: Consider the composition of the group, including the skills,
expertise, and backgrounds of its members. Aim for diversity in terms of knowledge,
experience, perspectives, and demographics to promote creativity, innovation, and problem-
solving.
 Size of the Group: Determine the optimal size of the group based on the nature of the tasks
or projects it will be working on, as well as considerations such as communication
effectiveness and workload distribution. A smaller group may facilitate collaboration and
decision-making, while a larger group may offer a broader range of perspectives.
 Roles and Responsibilities: Clearly define the roles and responsibilities of each group
member. Ensure that everyone understands their specific duties, tasks, and areas of
accountability within the group. Clarify reporting relationships and lines of authority.

116.  Leadership and Facilitation: Identify a leader or facilitator for the group who will
provide direction, guidance, and support. The leader should be someone with
strong leadership skills, communication abilities, and the ability to foster
teamwork and collaboration.
 Communication and Collaboration: Establish effective communication channels
and mechanisms for the group to share information, exchange ideas, and
collaborate on tasks and projects. Encourage open communication, active
listening, and constructive feedback among group members.
 Resources and Support: Provide the necessary resources, tools, and support for
the group to perform its tasks effectively. This may include access to technology,
training programs, budget allocations, and administrative assistance.
 Decision-Making Processes: Determine the decision-making processes and
procedures that the group will follow. Clarify how decisions will be made, who has
the authority to make decisions, and how consensus will be reached on important
issues.

117.  Timeline and Milestones: Establish a timeline and set milestones for the group's
work to ensure progress and accountability. Break down larger tasks or projects
into smaller, manageable steps with clear deadlines and deliverables.
 Performance Measurement and Evaluation: Develop criteria and metrics for
evaluating the group's performance and effectiveness. Regularly assess progress
towards goals, identify areas for improvement, and recognize achievements and
successes.
 Flexibility and Adaptability: Remain flexible and adaptable in response to
changing circumstances, priorities, and challenges. Encourage creativity,
innovation, and a willingness to experiment and learn from both successes and
failures.
 Culture and Values: Foster a positive group culture based on trust, respect,
collaboration, and a shared commitment to the organization's values and
principles. Promote a sense of belonging and ownership among group members.

118. Steps for supervising a small group
 Supervising a small group of employees effectively involves several key steps and considerations.
Here's a structured approach:
 Establish Clear Expectations:
 Clearly communicate the goals, objectives, and expectations for the team. Ensure that each team member
understands their role and responsibilities within the group.
 Set performance standards and metrics to measure progress and success. Provide regular feedback to
employees on their performance and areas for improvement.
 Provide Support and Resources:
 Ensure that employees have the necessary resources, tools, and training to perform their jobs effectively.
Address any obstacles or challenges that may hinder their performance.
 Offer guidance, mentorship, and support to help employees develop their skills and overcome obstacles.
Encourage open communication and collaboration within the team.
 Delegate Tasks Appropriately:
 Delegate tasks and responsibilities based on employees' skills, strengths, and interests. Empower team
members to take ownership of their work and make decisions autonomously when appropriate.
 Monitor progress on delegated tasks and provide guidance or assistance as needed. Avoid micromanaging, but
stay accessible and available to answer questions or provide clarification.

119.  Promote Collaboration and Teamwork:
 Foster a positive and inclusive team environment where all members feel valued, respected, and supported.
Encourage open communication, idea sharing, and collaboration among team members.
 Facilitate team meetings, brainstorming sessions, or team-building activities to strengthen relationships and
promote teamwork. Recognize and celebrate individual and team achievements.
 Manage Conflicts and Issues:
 Address conflicts or issues within the team promptly and constructively. Encourage open dialogue and seek to
understand different perspectives.
 Mediate conflicts impartially and help find mutually acceptable solutions. Coach team members on effective
communication and conflict resolution techniques.
 Monitor Performance and Provide Feedback:
 Regularly monitor team performance against established goals and objectives. Provide constructive feedback to
employees on their performance, highlighting areas of strength and areas for improvement.
 Conduct performance reviews or check-ins on a regular basis to assess progress, discuss goals, and identify
development opportunities. Recognize and reward outstanding performance.