What is Management ?

• Management is the coordination and administration of tasks to

achieve a goal. Such administration activities include setting
the organization’s strategy and coordinating the efforts of staff
to accomplish these objectives through the application of
available resources.
• Management can also refer to the seniority structure of staff
members within an organization.
• Management includes the activities of setting the strategy of
an organization and coordinating the efforts of
its employees (or of volunteers) to accomplish
its objectives through the application of available resources,
such as financial, natural, technological, and human resources.
 Evolution of
Management Thought
• The evolution of management thought
may be divided into three stages:
• 1. The Classical Theory of Management
• 2. The Neo-Classical Theory of Management
• 3. The Modern Theory of Management
 1. The Classical Theory of Management
Classical approach is oldest formal school
of thought which began around 1900 and
continued into the 1920. It was at this time
that persons like Robert Owen, Charles
Babbage, Henry Robinson Towne, James
Watt Jr., Mathew Boulton, Max Webber,
F.W. Taylor and Henry Fayol etc. expressed
their ideas on the ways and means of
making management practices effective and
efficient.
This approach is also known as traditional approach or
empirical approach.
It was developed through three streams such as –
(1) Scientific Management developed by F.W. Taylor, Harrington Emerson,
Henry Gantt etc.

(2) Administrative Theory developed by Henry Fayol, Lyndall, Urwick etc.

(3) Bureaucracy developed by Max Webber.

The main features of this classical
approach are:
1. Management is a systematic network (process) of
interrelated functions.
2. Formal education and training is emphasized for
developing management skills.
3. People are motivated by economic gains.
4. Stress was given to the formal organization
structure.
5. Many principles have been developed for the
practicing executive.
6. Functions, principles and skills of management
are considered universal.
Overview of classical approach- Taylor, Fayol

Scientific management by Taylor :

Scientific management implies the art of knowing
exactly what is to be done and how it is to be done .
The major emphasis is on increasing the production
through the use of intensive technology, and the human
beings are just considered as adjuncts to machines in
the performance of routine tasks.
Under this approach, scientific techniques are applied
in the recruitment, selection and training of workers
and are also used in tackling various industrial
problems.
Taylor saw productivity as the answer to both higher
wages and higher profits.
•Science, Not Rule of Thumb
•Harmony, Not Discord
•Cooperation, Not Individualism
•Mental Revolution
•Individual growth to achieve
maximum efficiency and profitability
• Taylor (1856-1915) based his theory of
scientific management on three assumptions.

• The organizational functioning can be

improved with the application of scientific
methods.

A good worker is one who does not initiate

action, but accepts the orders of the
management .

• Every worker is an economic man that is he

is motivated by monetary factors.
Henri Fayol –
The administrative theory is given by Henri Fayol, who
believed that more emphasis should be laid on how the
management of the organization is structured and how
well the individuals therein are organized to accomplish
the tasks given to them .

The administrative theory focuses on improving the

efficiency of management first so that the processes can
be standardized and then moves to the operational level
where the individual workers are made to learn the
changes and implement those in their routine jobs
Administrative Management This theory focuses
on principles that could be used by managers to
coordinate the internal activities of
organizations. 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.
 Contributions
1.Division of Industrial Activities
Technical, Commercial, Financial,
Accounting, Managerial, Security.
2.Qualities of an effective Manager
Physical, Mental, Moral, Education,
Technical, Experience.
3.Functions of Management Planning,
Organizing , Commanding, CO-
ordinating, Controlling.
4.Principles of Management 14 Principles.
1.Division of Work • The work should be divided among the individuals
on the basis of their specializations, so as to ensure their full focus on the
effective completion of the task assigned to them.

2.Authority and Responsibility • The authority and responsibility are

related to each other. Authority means the right to give orders while the
responsibility means being accountable. • Thus, to whomsoever the
authority is given to exact obedience must be held accountable for
anything that goes wrong.

3.Discipline • The individuals working in the organization must be well-

disciplined. The discipline refers to the obedience, behavior, respect
shown by the employees towards others.

4.Unity of Command: • an individual in the organization must receive

orders from only one supervisor. • In case an individual has the reporting
relationship with more than one supervisor then there may be more
conflicts with respect to whose instructions to be followed.
5. Unity of Direction • Unity of direction means, all the individual or
groups performing different kinds of a task must be directed towards
the common objective of the organization.

6. Subordination of Individual to General Interest: • According to this

principle, the individual and organizational interest must coincide to get
the task accomplished. The individual must not place his personal
interest over the common interest, in case there a conflict.

7.Remuneration of Personnel: • The payment methods should be fair

enough such that both the employees and the employers are satisfied.

8. Centralization • Fayol defines centralization as the means of reducing

the importance of subordinate’s role in the organization, and the extent
to which the authority is centralized or decentralized depends on the
organization type in which the manager is working.
9. Scalar Chain • This means there should be a proper hierarchy in
the organization that facilitates the proper flow of authority and
communication. • It suggests that each individual must know from
whom he shall get instructions and to whom he is accountable to. •
Also, the communication either going up or down must pass through
each level of authority.

10. Order • This principle is related to the systematic arrangement of

things and people in the organization. • This means every material
should be in its place, and there should be a place for every material.
• Likewise, in the case of people, a right man should be in the right
job.

11.Equity • All the employees in the organization must be treated

equally with respect to the justice and kindliness.
12. Stability of Tenure: • The employees
should be retained in the organization, as new
appointments may incur huge selection and
training cost.

13. Initiative • The manager must motivate his

subordinates to think and take actions to
execute the plan. They must be encouraged to
take initiatives as this increases the zeal and
energy among the individuals.

14. Esprit de Corps • This means “unity is

strength”. Thus, every individual must work
together to gain synergy and establish cordial
relations with each other.
 Bureaucratic Management-
Maxx Weber believed that bureaucracy was the most
efficient way to set up and manage an organization, and
absolutely necessary for larger companies to achieve
maximum productivity with many employees and tasks.
Overall, Weber's ideal bureaucracy favors efficiency,
uniformity and a clear distribution of power. He argued that
bureaucracy constitutes the most efficient and rational way
in which human activity can be organized and that
systematic processes and organized hierarchies are
necessary to maintain order, to maximize efficiency, and to
eliminate favoritism.
Major characteristics of Weber’s Ideal
Bureaucracy –

• Work specialization & division of labour

• Abstract rules & regulations
• Impersonality of managers
• Hierarchy of organization structure.
 2. The Neo-Classical Theory of Management:

• This period of evolution of management

thought is an improvement of the classical
theory. In other words, it modified and
improved upon the classical theory. For
instance, Classical theory focused more on the
area of job content, including the management
of physical resources, while the neo-classical
theory gave more profound emphasis on
employee relationships in the work
environment.
• This theory deals with the human
factor. Elton Mayo and Mary Parker
Follett are the main contributors of
human relations approach. This
approach also causes ‘Behavioural
Science Management’ which is a
further refinement of human relations
approach and improving the classical
theory.
Elements of Neoclassical Hawthorne
theory - Experiment
Human
Relations
Behavioural
Contribution of Neo-Classical Theory-
Neoclassical theory has made significant contribution to an understanding of human
behavior at work and in organization. It has generated awareness of the
overwhelming role of human factor in industry. This approach has given new ideas
and techniques for better understanding of human behavior. The basic features of
neoclassical approach are:
(i) The business organisation is a social system. (ii) Human factor is the most
important element in the social system. (iii) It revealed the importance of social and
psychological factors in determining worker productivity and satisfaction.
Contribution of Elton Mayo to the Development of Management Thought Elton Mayo
(1880-1949) is recommended as the Father of Human Relations School.

He introduced human relations approach to management thought. His contribution

to the development of management thought is unique and is also treated as human
relations approach to management. It was Mayo who led the team for conducting the
study at Western Electric's Hawthorne Plant (1927-1932) to evaluate the attributes
and psychological reactions of workers in on-the-job situations. His associates
included John Dewery, Kurt Lewin and others.
Mayo’s studies at the Western Electricity Company,
Chicago is popularly known as Hawthorne Studies. It was
a research programme of National Research Council of
the National Academy of Science at the Hawthorne Plant
of Western Electricity Company. In the early 20th
century, it was realized that – There was a clear-cut cause
and effect relationship between the physical work,
environment, the well-being and productivity of the
worker. Also, there was relationship between production
and given condition of ventilation, temperature, lighting
and other physical working conditions and wage
incentives.
CONCLUSIONS FROM HAWTHORNE STUDIES BRIEFLY

1. The social and psychological factors at the

workplace, not the physical conditions of the
workplace determine the employees’ morale and
output. 2. The organization is a social system. 3. Non-
economic rewards and sanctions significantly affect
the workers’ behaviour, morale and output. 4.
Workers are not inert or isolated, unrelated individual;
they are social animals. 5. Division of labour strictly on
specialization is not necessarily the most efficient
approach. 6. The workers have a tendency to form
small groups (informal organizations). The production
norms and behavioural patterns are set by such
groups.
 3. The Modern Theory of
Management:
Under modern management thought, streams of thinking
have been noticed since 1960.
Modern management theory emphasizes the use of
systematic mathematical techniques to analyze and
understand the inter-relationship of management and
workers in all aspects. This present management
thinking wishes equal emphasis on man and machine.
The Modern Theory is the integration of valuable
concepts of the classical models with the social and
behavioral sciences.
• Modern management theory highlights the
complexity of the organization as well as
individuals and the diversity of their needs,
motives, aspirations and potentials. As a
result, one time status or universal
management principles are impracticable.

Three streams of modern management theories are –

Quantitative Approach

System Approach

Contingency Approach.
 Modern Management
System Approach

• By a systems approach to management is meant the study of

a firm in its totality so that the men and material resources
of the firm can be organized to realize the firm's overall
objectives as efficiently as possible.
 Contingency Approach
• The contingency approach to management, also known as
the situational approach, holds that there is no single,
textbook rule for the best way to manage an organization. In
each company's case, the “best” approach will be contingent
upon the company's internal and external needs.
The term “Levels of Management” refers to a line of
demarcation between various managerial positions in
an organization. The number of levels in management
increases when the size of the business and work force
increases and vice versa.
The level of management determines a chain of
command, the amount of authority & status enjoyed
by any managerial position.
The levels of management can be classified in three
broad categories:
Top level/Administrative level
Middle level/Executory
Low level/Supervisory/Operative/First-line managers
Managers at all these levels perform different
functions.
1. Top Level Management
The senior most executives of the organization are found at
the top level of management.
The managers at the top level of management of an
organization are responsible for its survival and welfare. These
managers perform stressful and complex work that demands
long hours and commitment towards the company.

Functions of the Top Level Management

i) Determination of the objectives for the organization

ii) Framing of plans and policies
iii) Coordination and control of the performance
iv)Analysis of the business environment
v) Setting up an organizational framework
Middle Level Management
The next level of management is the Middle Level, which
serves as a link between the Top Level Management and
the Lower Level Management. The middle level
management is superior to the lower or operational level
management and subordinate to the top level
management. The middle level of an organization’s
management consists of different functional department
heads, such as Departmental Managers including
Production, Purchase, Finance, Personnel, Marketing
Managers, and other executive officers for different
departments such as plant superintendent, etc. The
employees or members of the middle level management
are responsible to the top level management for their
performance.
Functions of the Middle Level
Management-

i) Interpretation of the policies framed by

the Top Level Management
ii) Selection of suitable operative and
supervisory personnel
iii)Assigning of duties and responsibilities
to the Lower Level Management
iv)Motivating employees to get desired
objectives
v) Cooperating with the entire organization
3. Lower Level Management
The last level of management is the lower level
management and is also known as the Supervisory
or Operational Level Management. The managers
at the lower level of management play a crucial
role in the proper management of an organization,
as they directly interact with the actual work force
and interpret the instructions of the middle level
managers to them. The responsibility and
authority of the lower level managers depend
upon the plans and policies formed by the top
level management.
Functions of the Lower Level
Management

i) Issuing of orders and instructions

ii)Preparation of plan for activities
iii)Assigning and assisting in work
iv)Representing workers’ grievances
v)Ensuring a safe and proper work
environment
vi) Encourage initiative of employees
Responsibility of a Manager
 Managers have many responsibilities, including:

Hiring and staffing: Finding the best talent and training new
employees

Developing employees: Coaching and developing existing employees,

and dealing with performance problems

Performance management: Conducting performance evaluations,

monitoring performance, and taking action to improve results

Planning and goal-setting: Translating corporate goals into individual

goals, and planning for the future

Budgeting: Monitoring and controlling expenses and budgets, and

developing budgets for specific areas
Delegation: Skillfully delegating tasks and
responsibilities to teams.

Conflict resolution: Resolving conflicts in the

workplace, and mediating internal and external
conflicts.

Teamwork: Building trust among colleagues and

representing the team's interests.

Motivation: Inspiring the team to achieve goals

and create a positive work environment
• It is an obligation of management towards the society and
other concerned with the activities of organization.

• It is now recognized that beside taking care of the financial

interest of the business, managers must take into account the
interest of various other groups.
 Responsibility towards..
• Owners / Stakeholders
• Employees
• Consumers
• Governments
• Community and Society
Social responsibility is having a sense of duty to
society and everything that is a part of it. In other
words, “social responsibility” means managers are
accountable to society at large, not just their
shareholders.

social responsibility usually comes from the top,

with the highest-level managers encouraging their
subordinates to act with social responsibility. This
is usually done through the company’s mission
and vision statements, implementations of
internal controls, and specific goals laid out in the
business plan.