OCBS UNIT 1(2).pptx

ORGANISATIONAL
CONCEPTS &
BEHAVIOUR STUDIES
MBA- 1ST

Management & Organization
Managers- An individual who achieves goals through
other people.
Organization-A consciously coordinated social, unit
composed of two or more people that functions on
a relatively continuous basis to achieve a common
goal or set of goals

MANAGEMENT: DEFINITION
“Management is a process and the art of getting things done through
people using available resources with the aim of achieving goals
effectively and efficiently.”
Management is a multipurpose organ that manages a business and
manages managers and manages workers and work.” – Peter Drucker
Management is the art of knowing what you want to do and then
seeing that they do it in the best and the cheapest manner.” – F.W.
Taylor

IMPORTANCE OF
MANAGEMENT
Critical element in economic growth of
country (4M, resources never reach to
production).
Essential in all organized efforts, be it
business activity or any other activity
(universally accepted practice)
Management is the dynamic , life-giving
element in every organization (arbitrates
disputes & provides leadership, competitive
edge, central core)

Planning Function: (organizational goals, strategy
formulation, Comprehensive plan to integrate &
coordinate, Decision making)
Planning
Organizing:( organizational structure , identifying &
grouping work, defining & delegating authorities
,responsibilities)
Organizing
Staffing::-( Manpower Planning, Recruitment, Selection &
Placement, Training & Development., Performance
Appraisal. Promotions & Transfer)
Staffing

 Directing Or Leading function: (Direction &
coordination, resolving conflicts
- Three sub functions : communication, leadership
and motivation
 Controlling;( Comparing, monitoring & Potential
correcting)

Levels of
Management:
The term Levels of Management refers to the line of division that
exists between various managerial positions in an organization.
Level1. Administrative, Managerial, or Top Level of Management
-It is the ultimate source of power and authority
-consists of an organization’s board of directors and the chief
executive or managing director
Level2. Executive or Middle Level of Management
-The branch and departmental managers are major actors
-These people are directly accountable to top management for the
functioning of their respective departments
Level3 .Supervisory, Operative, or Lower Level of Management
-consists of supervisors, foremen, section officers, superintendents

Managerial
skills
Robert Katz identifies three types of skills that are essential for a
successful management process:
Technical skills (knowledge and ability to use different techniques
-important for first-level managers.
e.g.The ability to market and maintain data, The ability to work with
media, such as to edit or create content, Programming skills
Conceptual skills (knowledge or ability of a manager for more
abstract thinking)
-Conceptual skills are vital for top managers, less critical for mid-
level managers and not required for first-level managers.
- easily see the whole through analysis and diagnosis of different
states
-e.g.Contingency approach, critical thinking, Cognitive skills,
Decision making)

 Human or interpersonal managerial skills
Ability to understand, communicate,
motivate.(Body language, empathy,
mindset, eye contact, networking,
people connect)

Managerial
Roles
 Interpersonal roles: The interpersonal
roles are ones that involve people
(subordinates and persons outside the
organization) and other duties that are
ceremonial and symbolic in nature.
 Informational roles:A manager has to
maintain a network of relationships
outside the organisation. Managers have
to collect, disseminate and transmit
information.
 Decisional Roles: managerial roles where
managers are responsible for making
calculated and timely decisions for the
company's welfare.

Interpersonal Roles
1.FIGURE HEAD The manager will perform some duties that are casual and informal ones.
E.g. receiving and greeting visitors, visiting dignitaries, attending to social functions of an
employee, entertaining customers by offering parties and lunches, etc
2.LEADER As a leader, managers motivate, direct and encourages his subordinates. He also
reconciles the needs with the goals of the organizations.
E.g. Encouraging your team, Giving feedback, Defining a team member’s responsibilities
3.The liaison role The manager works as a liaison officer between top management and
subordinate staff. He also develops contacts with outside people and collects information for the
wellbeing of the organization
E.g. Meeting with a supplier, Working with a recruitment specialist,

Informational roles
 4. Monitor
 As a manager, you need the monitor the work of your team. You also need
to monitor what’s going on elsewhere in your organization. You must
identify which information is important and which is not. This information
doesn’t just have to be factual; you can also monitor gossip and
speculation.
 E.g. A conversation with a member of your network, Online research.,
Reading reports
 5.Disseminator
 You act as a disseminator whenever you communicate information, in
either written or verbal format
 E.g.You share your annual plan with your team, You inform your team of
how you will restructure it to implement your organization’s new strategy

 6.Spokesperson
 You act as a spokesperson whenever you
share information outside of your team.
Again, this can be either written or
verbal communication.
 E.g. You give a media interview, You
share your organization’s plans with a
supplier, You speak at a conference.

DECISONAL ROLES
7.The entrepreneurial role As an entrepreneur manager continuously
looks for new ideas and tries to improve the organization by going
along with changing work environment
E.g. identify an opportunity to improve a process, You identify an
opportunity to cut costs, You solve a long-running problem
8.The disturbance handler role Here is works like a problem solver, he
finds solutions to various un-anticipated problems both within and
outside the organization.
e.g. You mediate a disagreement between two team members, You
quickly help your team switch to remote working during a pandemic

9.The resource allocator role The manager divides the
work, provides required resources and facilitates to carry
out the allocated work and delegates required authority
amongst the subordinates.
 e.g. You decide to allocate 70% of your budget to
short-term projects and 30% to longer-term projects,
You manage a startup and decide to commit 90% of
your team to research and development (R&D) and
just 10% to operations.
10.The negotiator role He negotiates with the
employees and tries to resolve any internal problems
and employee grievances.
 E.g. negotiate the salary of a newly hired team
member, negotiate a contract with a supplier.

Evolution of
management
thoughts
 Management is as old as
civilization
 Management has evolved
over the year.

PRE SCIENTIFIC MANAGEMENT ERA
CONTRIBUTORS-
 Adam Smith talks about division of labor in his book Wealth of Nations
written in the year 1776.
 In the year 1832 Charles Babbage emphasized on Scientific method of
managing an enterprise.

CLASSICAL
MANAGEMENT ERA
(1880s-1920s)
It signifies beginning of systematic study of organizations and management
practices.
Main streams of management thinking under CME are:
1. Scientific Management 2. Administrative Management 3. Bureaucratic
Management
SCIENTIFIC MANAGEMENT
Given by F.W Taylor in the year (1856-1950)
He introduced a scientific approach to productivity, which meant that an
increase in efficiency can lead to higher productivity and profits.
Taylor's research focused on repetitive, routine tasks - rather than complex or
problem-solving activities. Each task was carefully specified and measured

 Contributions of scientific management:
 1. Time and Motion Study : analysis of the time spent in
through the different motions of a job or series of jobs. Taylor
suggested that production efficiency in a shop or factory could
be greatly enhanced by close observation of individual workers
and elimination of waste time and motion in their operation.
 2.Differential Payments: Differential piece work system i.e.
linked incentives with production
3.Drastic reorganization of Supervision: Two new concepts (i)
Separation of planning and doing (ii) functional foremanship
4.Scientific recruitment and training: selection and training to
ensure continuous increase in work quality as compared to past.
5. Intimate friendly cooperation between the management
and workers.

LIMITATIONS OF SCIETNTIFIC MANAGEMENT
 Many critics argue that the Scientific Management Theory is too controlling and
dehumanizing. It assumes that humans are machines who need to be controlled and
directed.
 One of the most critical aspects of the Scientific Management Theory is
standardization. Standardization can lead to a loss of creativity and innovation and
cause a decrease in quality
 Taylorism has also been accused of creating a culture of fear among workers. Workers
feared losing their jobs if they failed to meet targets.
 Time & motion study is not entirely scientific two seprate individuals take different
time to perform same task in different manner.
 Separation of planning and doing and greater specialization creates monotony of
work.

ADMINISTRATIVE MANAGEMENT
 The term “administrative management” refers to the act of
running and maintaining a business or organization.
 Main Contributors- Henri Fayol( father of scientific management.
 Focus: Organization rather than individual.
 Henry Fayol, also known as the ‘father of modern management
theory’ gave a new perception of the concept of management. He
introduced a general theory that can be applied to all levels of
management and every department. The Fayol theory is practised
by the managers to organize and regulate the internal activities of
an organization. He concentrated on accomplishing managerial
efficiency.

Major findings of this study-
1. Classification of business activities-
Technical, Commercial, Financial, Security,
Accounting and Managerial activities.
2. Basic functions of manager a/q to
- Planning, organizing, Commanding,
Coordinating and Controlling.

Principles of Fayol's
Administrative
theory
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-
 These are the two key aspects of management. Authority
facilitates the management to work efficiently, and
responsibility makes them responsible for the work done
under their guidance or leadership.
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.
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.

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-
 In any company, the management or any authority responsible for the decision-making
process should be neutral. However, this depends on the size of an organization. Henri
Fayol stressed on the point that there should be a balance between the hierarchy and
division of power.
9. Scalar Chain-
 Fayol on this principle highlights that the hierarchy steps should be from the top to the
lowest. This is necessary so that every employee knows their immediate senior also they
should be able to contact any, if needed.

10. Order-
 A company should maintain a well-defined work order to have
a favorable 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.

13. Initiative-
 The management should support and encourage the
employees to take initiatives in an organization. It will
will help them to increase their interest and make
then worth.
14. Esprit de Corps-
 It is the responsibility of the management to
motivate their employees and be supportive of each
other regularly. Developing trust and mutual
understanding will lead to a positive outcome and
work environment.
 This 14 principles of management are used to
manage an organization and are beneficial for
prediction, planning, decision-making, organization
and process management, control and coordination.

Henry Fayol F.W. Taylor
Definition
Henry Fayol, father of modern management
contributed fourteen management principles,
accomplishing managerial efficiency.
F.W. Taylor, father of scientific management
contributed four management principles, for
enhancing overall productivity.
Concentrated
Top-level management Low-level management
Approach
Top management based on top downward approach.
Supervisory viewpoint and bottom upward
approach
Focus
Focused on delivering managerial efficiency. Increasing productivity of labour
Theory-based on
Personal experience Observation and experimen

Bureaucratic Management
 Max Weber, a German scientist, defines bureaucracy as a highly
structured, formalized, and also an impersonal organization.
 He also instituted the belief that an organization must have a defined
hierarchical structure and clear rules, regulations, and lines of authority
which govern it.
 It is an ideal model for management and its administration to bring an
organisation’s power structure into focus

 Definition
 “Bureaucracy is an organisational structure that is characterised by
many rules, standardised processes, procedures and requirements,
number of desks, meticulous division of labour and responsibility, clear
hierarchies and professional, almost impersonal interactions between
employees”.

Max Weber’s
six
characteristics
of the
bureaucratic
theory
 1. Task specialisation
 Every employee is responsible for what he does best
and knows exactly what is expected of him .By dividing
work on the basis of specialization, the organization
directly benefits. Each department has specific powers.
 As a result, there is a delineation of tasks and managers
can approach their employees more easily when they
do not stick to their tasks. Every employee knows
exactly what is expected of him and what his powers
are within the organization.
 Every employee has a specific place within the
organization and is expected to solely focus on his area
of expertise. Going beyond your responsibilities and
taking on tasks of colleagues is not permitted within a
bureaucracy.

 2. Hierarchical layers of authority
 Managers are organised into hierarchical layers, where
each layer of management is responsible for its staff and
overall performance. In bureaucratic organizational
structures, there are many hierarchical positions. This is
essentially the trademark and foundation of a bureaucracy.
 This hierarchy reflects lines of bureaucratic communication
and the degree of delegation and clearly lays out how
powers and responsibilities are divided.
 3. Formal selection
 All employees are selected on the basis of technical skills
and competences, which have been acquired through
training, education and experience.
 One of the basic principles is that employees are paid for
their services and that level of their salary is dependent on
their position. Their contract terms are determined by
organisational rules and requirements.

 4. Rules and requirements
 Formal rules and requirements are required to ensure uniformity, so that employees know exactly what is
expected of them. In this sense, the rules and requirements can be considered predictable.
 All administrative processes are defined in the official rules. By enforcing strict rules, the organisation can
more easily achieve uniformity and all employee efforts can be better coordinated. The rules and
requirements are more or less stable and always formalised in so-called official reports.
 Should new rules and requirements be introduced, then senior management or directors are responsible
for this.
 5. Impersonal
 Regulations and clear requirements create distant and impersonal relationships between employees, with
the additional advantage of preventing nepotism or involvement from outsiders or politics. These
impersonal relationship are a prominent feature of bureaucracies.
 Interpersonal relationships are solely characterised by a system of public law and rules and requirements.
Official views are free from any personal involvement, emotions and feelings. Decisions are solely made on
the basis of rational factors, rather than personal factors.

 6. Career orientation
 Employees of a bureaucratic organization are selected on the basis of their
expertise. This helps in the deployment of the right people in the right
positions and thereby optimally utilising human capital.
 In a bureaucracy, it is possible to build a career on the basis of experience
and expertise.
 As a result, it offers lifetime employment. The right division of labour
within a bureaucratic organization also allows employees to specialise
themselves further, so that they may become experts in their own field and
significantly improve their performance.

Neo classical era (concept)
 The neoclassical theory was an attempt at incorporating the behavioral
sciences into management .
 The premise of this inclusion was based on the idea that the role of
management is to use employees to get things done in organizations.
 Rather than focus on production, structures, or technology, the
neoclassical theory was concerned with the employee.
 Neoclassical theorists concentrated on answering questions related to
the best way to motivate, structure, and support employees within the
organization.
 Theory posits that an organization is the combination of both the
formal and informal forms of organization, which is ignored by the
classical organizational theory.
 The informal structure of the organization formed due to the social
interactions between the workers affects and gets affected by the
formal structure of the organization. Usually, the conflicts between the
organizational and individual interest exist, thus the need to integrate
these arises.

 The neoclassical theory encompasses approaches and theories that
focus on the human side of an organization. There are two main
sources of neoclassical theory: the human relations movement and the
behavioral movement.
 Human relation theory & Behavioral Movement( Elton Mayo)
 At the core of human relations theory have following basic
propositions:
 A focus on people, rather than upon machines or economics
 The organizational environment is not an organized social context
 Human relations are important in motivating people
 Motivation depends upon teamwork, requiring co-ordination and
cooperation of individuals involved.
 Human relations within teams must fulfill both individual and
organizational objectives simultaneously
 The study of human behaviour is of great significance in management. Since
an individual is a product of social system, his behaviour is not determined
by organizational forces alone, but many forces like perception, attitudes,
habits, arid socio-cultural environment also shape his behaviour.

Modern management
approach
 Modern management theory emphasizes the use of
systematic mathematical techniques to analyze and
understand the inter-relationship of management
and workers in all aspects.
 A manager using the Modern Management Theory
will use statistics to measure employee
performance and productivity and also try to
understand what makes their employees satisfied at
their jobs.
 Three streams of modern management theories are
- Quantitative Approach, System Approach, and
Contingency Approach

 Quantitative Approach
 This is a simple number-based theory that relies on calculating
the risks, benefits, and drawbacks of any action before it is
taken. This approach applies statistics, computer simulations,
information models, and other quantitative techniques to the
management of a company.
 Systems Approach
 This approach states that all parts of a company, from the CEO
to the entry-level employee, must work in harmony for the
company to survive. Companies using this theory think that
departments and employees must work as a collective group
and not an isolated unit.
 Contingency Approach holds that every situation requires a
different leadership style, and therefore no one theory can work
for an entire office.

Planning
Planning is the fundamental
management function, which
involves deciding
beforehand, what is to be
done, when is it to be done,
how it is to be done and who
is going to do it.
It is an intellectual process
which lays down
an organization's
objectives and develops
various courses of action,
which the organization can
achieve those objectives.

Characteristics of
Planning
 Futuristic
 Prime activity
 Pervasive
 Coordination
 Considers limiting resources.
 flexibility

SIGNIFICANCE OF PLANNING
PLANNING PROVIDES
DIRECTION
PLANNING REDUCES
RISK OF
PLANNING REDUCES
OVERLAPPING AND
WASTEFUL ACTIVITY
PLANNING PROMOTES
INNOVATIVE IDEAS
PLANNING FACILITATES
DECISION
PLANNING
A STANDARD FOR
CONTROLLING
FOCUSES ATTENTION
OBJECTIVES OF THAT
COMPANY

1.Aware of business opportunities: It is
necessary to analyse the internal and external
environment to know the trends in near future.
Business activities are influenced by Government
regulations, technological changes, availability of
raw material, labour etc.
The business men have to look for opportunities
by observing the business environment.
2. Setting Objectives: plans are prepared with a
view to achieve certain goals. so establishing the
objectives is an important step in planning.
The overall objective of the enterprise must be
stated along with the specific objectives of
individual department and divisions in the
organisation.
The objectives must be stated in measurable
terms i.e., Percentage, Production, Sales,
number of units etc.

3. Considering planning premises:
• Planning premises are the anticipated
environment in which plans are
expected to operate.
 As planning is for future, certain
assumption about the future is
uncertain.
 It is necessary to make assumption
about the factors influencing internal
environment and external environment.
 The factors which affect the plan must
be identified and evaluated.

 4. Identifying the alternative course of action:
For doing a work there are always certain alternatives.
The planners should study the entire alternative, considering
the strong and weak points of them and finally identify the
most promising one to reach the goal.

5. Evaluating alternative course of action: once
the alternative course of action are identified, the
next step is to evaluate the same. Evaluation
means studying the merits and demerits of each
alternative. Each alternative should be closely
studied to determine its suitability.
6. Choosing the best alternatives: once the
alternative courses of action have been evaluated
the next step is to select the best. The alternative
selected should help the organisation in making an
optimum use of available resources and help to
attain the objective set in the most effective
manner.

7. Formulation of supporting plans: The main
plan should be supported by number of
supporting plans to attain the goal. Ex: Once the
production plan is ready the supportive plans
such as purchase of raw materials, tools,
equipments, engaging workers etc, have to be
formulated. Without supportive plans it is not
possible to carry out the main plan.
8. Implementation of plans: Implementation of
plan means putting the plans into action so as to
achieve the business objectives. After
implementation of plans, it is necessary to ensure
that the activities of the enterprises proceed in
the right direction.

Types of plannig
 -Operational Planning
 Answering the question of “How things need to happen? What are the
guidelines to accomplish the set mission?” describes an operational plan.
This plan simply means the daily activities which are focused in achieving the
goal. Operational Plans are generally the single used plans or the on going
plan.
 They can also be planned for one-time events or for a specific need. These
plans include specific rules and regulations and procedures to stand by it.
They provide an adequate guideline for the step to step processing of the
work.
 -Strategic Planning
 The reason for planning is chalked out in the strategic plan. Strategic plans
are generally long-term thinking processes executed by the top-level
managers. It is a big picture to cast a vision and requires mission
processing.
 It requires a high-level analysis of the entire business. Being the foundational
basis of the organization, strategic planning dictates long term goals which
normally tenures for two to ten years span

.
Tactical Planning
 Tactical Plan is the backbone of Strategic Plan. Generally speaking, they are
focused, specific and short-term plans. They are the plans that initiate the actual
work.
 Tactical plans form the outline of a strategic plan that eventually structures the
organizational plan. Often the tenure of this plan is quite short and mostly lasts
to one year.
 The strategic plans that get chunked into actionable plans are called Tactical
Planning.
Contingency Planning
 Contingencies might occur in business. To tackle the contingencies, the
contingency planning is drafted. Thye are also named as ‘Special Planning’ by
the business experts. In a situation of change, contingency planning proves to
be helpful.
 Though managers acknowledge the changes before-hand yet contingency plans
help to tackle the unseen changes. With the complicated business world, the
contingency plan becomes more of a use.

Decision Making
 Decision making is the judgment of the process by which
one can choose between a number of alternative courses
of action for the purpose of achieving goals.
 A decision may also be conceived as a conclusion that a
manager has reached so as to know what he should do
later on. It calls for both judgmental and imagination
activity to select one from many alternatives, so decision
making is an intellectual activity.

Types of Decision Making:
1.Programmed And Non-Programmed Decisions:
Programmed decisions are routine and repetitive in nature. These decisions deal
with common and frequently occurring problems in an organization such as buying
behaviour of consumers, sanctioning of different types of leave to employees,
purchasing decisions, salary increment, etc
Non-programmed decisions are not routine or common in nature. These are
related to exceptional situations in which guidelines or routine management is not
set.
e.g. problems arising from a decline in market share, increasing competition in the
business environment. The majority of the decisions taken by managers do fall in
this non programmed category.

Type of decision making Traditional Technique Modern Technique
1. Programmed:
Routine, repetitive decisions, an
organization develops a specific
specific process for handling
them.
(i) Based on habit
(ii) critical routine standard
operating procedure.
(iii) organization structure.
(i) Operation research,
mathematical analysis, models,
computer simulation.
(ii) Data processing.
2. Non-programmed:
Non-routine, one-shot, ill-
structured, novel policy
decisions handled by the
general problem-solving
process.
(i) Judgment, intuition, and
creativity.
(ii) Rule of thumb.
(iii) selection and training of
executives.
(i) Training human decision-
makers.

2. Strategic Decisions
 Strategic decisions :The main idea is to achieve better working conditions, better equipment, and
efficient use of existing equipment, etc. These all fall under this category. Usually, strategic decisions
are taken by top-level management.
 Related to the policy of the organization, are taken by high levels of management, it involves a
large expenditure of fund. A slight mistake in decision making is injurious to the enterprise.
 E.g. capital expenditure decision, decision-related to pricing, etc

3. Organizational and Personal Decisions:
 If the decision is taken collectively keeping in mind the organizational goal, it is known as
the organization goal, and if the manager takes any decision in the personal capacity
(affecting his/her life). It is known as personal decisions. These decisions may sometimes
affect the functioning of the organization as well.
5. Individual and Group Decisions:
 When the decision is taken by an individual, it is categorized as an individual decision.
Usually, routine decisions are taken by individuals within the policy framework of the
organization.
 Group decisions are taken by a group of individuals in the form of a standing committee.
Generally, important types of decisions in management are shifted to this committee. The
The main aim of a group decision is to involve the maximum number of individuals in the
process of decision making.

6. Tactical and Operational Decisions:
 Decisions that are pertaining to various policy matters in the organization are known as policy
decisions. These are taken by to;l management and do have a long-term impact on the
organization. For example, decisions regarding the location of the plant or volume of production.
These are tactical decisions
 Operational decisions are all day-to-day decisions that need to be taken for the proper
functioning and operation of the organization. These can be taken by middle or lower-level
managers. For example, the Calculation of bonuses given to each individual is an operational
decision and is performed by middle or lower-level managers.
 These were the types of managerial decisions that are performed by top, middle and lower-level
management in the organization to get things done in alignment and to achieve the
organizational goal effectively and efficiently.

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