Module 1

NATURE AND CONCEPT OF MANAGEMENT

LESSON 1: DEFINITION, CONCEPT AND CHARACTERISTICS OF MANAGEMENT

Learning Competency: The learner is able to understand the definition, concept and
characteristic S of management.

Definition of Management

Every human being has several needs and desires which can be satisfied only by
working & living together in organized groups & institutions. In this way the people satisfy
their economic & social needs. As a result there are several types of group’s e.g. Family,
school, government and business firm etc. Such groups achieve their goals by working in
controlled & coordinated manner.

Management involves coordinating and overseeing the most activities of others so

that their activities are completed effectively & efficiently. The 21st century economy has
become knowledge based and is performance driven. It is driven by innovations &
technology & organizations have to transform themselves to serve new customer
expectations.

The manager of today must integrate management skills with new approaches that
emphasize the human touch, enhance flexibility and involves employees. Management is
needed in all types of organization, at all levels of organization, in all organization work
areas throughout the world.

Management=Manage+men+t(tactfully)

Different authors have defined this management in different ways:

1. Functional Based Definitions:

“Management is what a manager does”. –– Louis Allen

“To manage is to for caste and plans, to organize, to command, to

coordinate and to control”. –– Henry Fayal

These two definitions reveal management as a process and management

is what a manager does.

2. Human Relation Based Definitions:

“Management is the art of directing and inspiring people”. –– J. D. Moony
and A. C. Railey

“Management is the art of getting things done through and with people
informally organized groups”. –– Harold Koontz

“Management consists of getting things done through others. Manager is

one who accomplishes the objectives by directing the efforts of others”. –– George
Terry

The above definitions reveal that a manager works with cooperation of

others and through formal organization structure.
 3. Productivity Based Definitions:
“Management is the art of knowing what you want to do and to do it in the
best and cheapest way”. –– F. W. Taylor

“Management may be defined as the art of securing maximum prosperity

with a minimum of effort so as to secure maximum prosperity and happiness for
both employer and employee and give the public the best possible service”. ––
John. F. Mee

Thus, the above definitions reveal that management as an art of increasing

productivity in an organization.

4. Leadership and Decision Based Definitions:

“Management means decision-making”. –– Rose More

“Management is the art and science of decision making and leadership”. –

– Donald J. Clough

Thus, the above definitions consider the management as an art of making

qualitative decisions and leading a people effectively in the formally organized
organizations.

5. Integration Concept Based Definitions:

“Management is the force that integrates man and physical plant into an
effective operating unit”. –– Keith and Gubellini

The above definition views the management as the co ordinations of human

and material resources.

Definitions of management provided by different management experts are also

presented as follows:

1. According to E.F.L. Breech – “Management may be defined as a social process

entailing responsibility for the effective or efficient planning and regulation of the
operations of an enterprise,” such responsibility involving (a) the installation and
maintenance of proper procedures to ensure adherence to plans, and (b)
guidance, integration and supervision of the personnel comprising the enterprise
and carrying out its operation.”

The definition of Brech recognizes management as a general term for the total
process of executive control in industry and commerce. Brech also points out the
role of management as a social process essentially involving management of
people and not merely the management of material resources.

2. P. Drucker in his book – “The Practice of Management” has defined “Management

is a multi-purpose organ that manages a business, manages a manager and
manages workers and work”.

Drucker stresses three jobs of management – (i) Managing a business; (ii)

Managing a manager; and (iii) Managing workers and work. Even if one is omitted,
we would not have management anymore and we also would not have a business
enterprise or an industrial society.

As per the opinion of Sri P. Drucker it requires the manager to balance and
harmonize three major functions of the business enterprise. Hence, a manager is
a dynamic and life-giving element in every business. Without efficient management

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 we cannot secure best allocation and utilization of human, material and financial
resources.

3. According to Koontz and O’Donnell – “Management has been defined as the

creation and maintenance of internal environment in an enterprise where
individuals working together in groups, can perform efficiency towards the
attainment of group goals”.

According to the definition managing is an art of creating favorable

performance environment, enabling the group to attain stated objectives and
management is the body of organized knowledge, i.e., Science which underlines
the Art. The definition clearly indicates that effective management is always
contingency or situational management.

Creation of favorable managerial environment for joint efforts of people

working in an organization in order to accomplish planned objectives, demands
intelligent application of management knowledge to numerous and varied practical
problems. So that we can have the best result under the given situation or realities.

4. “Management man be defined as the art of applying the economic principles that
underline the control of men and materials in the enterprise under consideration”.
– Kimball and Kimball

5. “Management in the force that integrates men and physical plant into an effective
operating unit”. – Keith and Gubelline

6. “The term management in commonly used to cover the formation of policy, its
execution, the designing of the organisation and its employment.” – Oliver Sheldon

7. As Appley L. in his book has said—”Management is the attainment of pre-

established goals by the direction of human performance along pre-established
lines. It is the management of people and not the direction of things.”

According to Appley L. management is essentially personnel management.

We do not build automobiles, airplanes, refrigerators, radios etc. we build men and
women and these human resources build products. Human resources are our
greatest assets. They have unlimited potential. Hence, it is but natural that
management must give special attention to the development of human resources.

8. Quoting from American Management Association – “Management is guiding

human and physical resources into dynamic organization units which attain their
objectives to the satisfaction of those served and with a high degree of morale and
sense of attainment on the part of those rendering service”.

9. Further, taking from the book “Principles of Industrial Organization” written by

Kimball and Kimball we may conclude that – “Management embraces all duties
and functions that pertain to the initiation of the enterprise, its financing the
establishment of all major policies, the provision of all necessary equipment, the
outlining of the general form of organization under which the enterprise is to
operate, and the selection of the principal officers. The principal official primarily
responsible to the controlling board is commonly referred to as General Manager.”

10. But it is Henri Fayol, the father of modern management thought, who gives a vivid
and functional description of management. Management according to him is “to
forecast and plan, to organize, to command, to co-ordinate and to control.” It
attempts to describe management in terms of what a manager does and not what
management is.

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Top 7 Definitions of Management

1. “Management is a social process entailing responsibility for the effective and

economic planning and regulation of the operations of an enterprise, in fulfillment
of a given purpose or task, such responsibility involving:

a. Judgement and decision in determining plans and in using data to control

performance, and progress against plans.

b. The guidance, integration, motivation and supervisions of the personnel

composing the enterprise, and carrying out its operations.”

2. “Management may be defined as the art of securing maximum results with a

minimum of effort, so as to secure maximum prosperity and happiness for both the
employer and the employee and give the public the best possible service”. —John
F. Mee

3. “Management is the process by which managers create, direct, maintain and

operate purposive organizations through systematic, coordinated, co-operative
human effort.” —Dalton E. McFarland

4. “Management is guiding human and physical resources into dynamic

organizational units which attain their objectives to the satisfaction of those served
and with a high degree of morale and sense of attainment on the part of those
rendering service. —American Management Association

5. “Management is the art of getting things done through the people in formally
organized groups.”—Harold, Koontz and O’Donnell

6. “Management is the function of executive leadership. It is the work of planning

organizing and controlling the activities of the organization in the accomplishment
of its objectives.”—R. C. Davis

7. “To manage is to forecast and to plan, to organize, to command, to co-ordinate

and to control.” —Henry Fayol

Concept of Management

The term management has been interpreted in several ways:

1. Management as an Activity – Management is an activity just like playing,

studying, teaching etc. It is an art of getting things done through efforts of other
people. The management activities consist of
 Interpersonal activities
 Divisional Activities
 Informative Activities

2. Management as a process – Management is considered as process as it

comprises of series of interrelated functions which lead to achievement of
organization goals. Management as a process has following implications.
 Social Process
 Integrated Process
 Continuous Process
 Interactive Process

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 The elements of Management Process are Planning, Organizing,
Staffing, Directing and Controlling.

3. Management as an academic discipline – Management has emerged as a

specialized branch of knowledge. It comprises principles & practices for effective
management of organization. There are many management institutes imparting
education in various fields of management.

4. Management as a group – The term management is frequently used to devote

a group of managerial personnel. All the managers i.e. Chief executive,
departmental heads, supervisors are collectively called Management. So,
management is concerned with all those who manage the affairs of an
organization.

Characteristics of Management

1. Universal: All the organizations, whether it is profit-making or not, they require

management, for managing their activities. Hence it is universal in nature.

2. Goal-Oriented: Every organization is set up with a predetermined objective and

management helps in reaching those goals timely, and smoothly.

3. Continuous Process: It is an ongoing process which tends to persist as long

as the organization exists. It is required in every sphere of the organization
whether it is production, human resource, finance or marketing.

4. Multi-dimensional: Management is not confined to the administration of people

only, but it also manages work, processes and operations, which makes it a
multi-disciplinary activity.

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 5. Group activity: An organization consists of various members who have different
needs, expectations and beliefs. Every person joins the organization with a
different motive, but after becoming a part of the organization they work for
achieving the same goal. It requires supervision, teamwork and coordination,
and in this way, management comes into the picture.

6. Dynamic function: An organization exists in a business environment that has

various factors like social, political, legal, technological and economic. A slight
change in any of these factors will affect the organization’s growth and
performance. So, to overcome these changes management formulates
strategies and implements them.

7. Intangible force: Management can neither be seen nor touched but one can
feel its existence, in the way the organization functions.

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LESSON 2: EVOLUTION OF MANAGEMENT THEORIES

Learning Competency: The learner is able to understand and explain the different
management theories.

Introduction

The evolution of management thought is a process that started in the early days
of man. It began since the period man saw the need to live in groups. Mighty men were
able to organize the masses, share them into various groups. The sharing was done
accord to the masses’ strength, mental capacities, and intelligence.

The point is that management has been practiced in one way or the other since
civilization began. If you want a good example where advance management principles
where applied, consider the organization of the olden days Roman Catholic Church,
military forces as well as ancient Greece. These are all excellent examples. But the
industrial revolution brought drastic change. And suddenly, the need to develop a more
holistic and formal management theory became a necessity.

The evolution of management theories can be categorized into different parts:

 Pre-Scientific Management Era (before 1880)

 Classical management Era (1880-1930)
 Neo-classical Management Era (1930-1950)
 Modern Management era (1950-present)

Pre-Scientific Management Era

The period of 1700 to 1800 emphasizes the industrial revolution and the factory
system highlights the industrial revolution and the importance of direction as a managerial
purpose. Thus, the development of management theory can be recognized as the way
people have struggled with relationships at particular times in olden periods. Many
economic theorists during this period described the notion of management.
Adam Smith and James Watt have been recognized as two theorists who
launched the world toward industrialization. Adam Smith brought about the revolution in
financial thought and James Watt's steam engine provided cheaper power that
revolutionized English commerce and industry. Both provided the base for modern
concepts of business management theory and practice. Adam Smith explicated the
concept of division of labor and Jacques Turgot described the importance of direction and
control. Smith stated that market and competition should be the controllers of economic
activity and that tax policies were destructive. The specialization of labor was the basis of
Smith's market system. According to Smith, division of labor provided managers with the
maximum opportunity for improved output.

In the period of 1771–1858, Robert Owens studied for concern for the workers. He
was repulsed by the working conditions and poor treatment of the workers in the factories
across Scotland. Owen became a reformer. He reduced the use of child labor and used
ethical influence rather than physical punishment in his factories. He reproached his
fellow factory owners for treating their equipment better than they treated their workers.

In quantitative approach of early management thought, Charles Babbage (1792–

1871) is recognized as the supporter of operations research and management science.
Babbage's scientific innovations are mechanical calculator, a versatile computer, and a
punch-card machine. His projects never became a commercial reality. However, Babbage
is considered the creator of the concepts behind the present day computer. The most
popular book of Babbage, On the Economy of Machinery and Manufacturers, described

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the tools and machinery used in English factories. It discussed the economic principles
of manufacturing, and analyzed the operations and the skills used and suggested
improved practices. Babbage considered in the benefits of division of labor and was a
supporter of profit sharing. He developed a method of observing manufacturing that is the
same approach utilized today by operations analysts and consultants analyzing
manufacturing operations. Other theorists who contributed in quantitative approach of
early management thought were Robert Owen, Andrew Ure and Charles Dupin, Henry
Robinson Towne.

The Classical Approach

The classical approach is the earliest thought of management .The classical

approach was associated with the ways to manage work and organizations more
efficiently. The classical approach are categorized into three groups namely, scientific
management, administrative management, and bureaucratic management.

1. Scientific Management: Scientific management which is also referred to

Taylorism or the Taylor system is a theory of management that evaluates and
synthesizes workflows, with the aim of improving labor productivity. In other words,
conventional rules of thumb are substituted by accurate procedures developed
after careful study of an individual at work. Universal approaches of Scientific
management are developed for Efficiency of workers, Standardization of job
roles/activities and Discipline - the role of managers and the business hierarchy.
The scientific management theory had an enormous impact on the business
industry at the beginning of the 20th century. Many big and victorious
organizations, such as McDonalds hamburger chain or call centers, utilized a
modern version of scientific management. Among famous theorist, Taylor's
contribution in the area of scientific management is invaluable.

The components of scientific management are determination of the task,

planning, proper selection and training of workers improvement in methods,
modification of organization and mental revolution such as 'job specialization'. As
a result, it became more concerned with physical things than towards the people
even though increased the output. Scientific Management focuses on worker and
machine relationships. Organizational productivity can be increased by enhancing
the competence of production processes. The competence viewpoint is concerned
with creating job that economizes on time, human energy, and other productive
resources. Jobs are planned so that each worker has a specified, well controlled
task that can be performed as instructed. Principle of scientific management are
replacement of old rule of thumb method, scientific selecting and training, labor
management co-operation, maximizes output, equal division of responsibility.

There are four scientific management systems such as:

 Develop a science for each element of the job to replace old rule of thumb
method;
 Scientifically select employees and then train them to do the job as
described in step;
 Supervise employees to make sure they follow the prescribed method for
performing their job;
 Continue to plan the work but use worker to actually get the work done.

Taylor's Scientific Management: Academic records indicated that F.W.

Taylor and his colleagues developed the first systematic study in management. He
initiated an innovative movement in 1910 which is identified as scientific
management. Frederick Taylor is known as the father of Scientific

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 Management and he published Principals of Scientific Management in which he
proposed work methods designed to boost worker productivity.

Taylor asserted that to succeed in these principles, it is necessary to

transform completely the part of management and labor. His philosophy was based
on some basic principles.

 The first principle is separation of planning and doing. In the pre-Taylor era,
an employee himself used to choose or plan how he had to do his work and
what machines and equipment would be necessary to perform the work. But
Taylor divided the two functions of planning and doing, he stressed that
planning should be delegated to specialists.
 Second principle of Taylor's management approach is functional
foremanship. Taylor launched functional foremanship for administration and
direction. Under eight-boss-scheme of functional foremanship, four persons
like route clerk, instruction card clerk, time and cost clerk and disciplinarian
are associated with planning function, and the remaining four speed boss,
inspector, maintenance foreman, and gang boss are concerned with
operating function.
 Third principle is elements of scientific management. The main constituents
of scientific management are work study involving work important and work
measurement using method and time study, standardization of tools and
equipment for workmen and improving working conditions, scientific
Selection, placement and training of workers by a centralized personal
department.
 Fourth principle is bilateral mental revolution. Scientific management
involves a complete mental change of employees towards their work,
toward their fellow-men and toward their employers. Mental revolution is
also necessary on the part of management's side, the foreman, the
superintendent, the owners and board of directions.
 Fifth principle is financial incentives. In order to encourage workers to give
better performance, Taylor introduced differential piece-rate system.
According to Taylor, the wage should be based on individual performance
and on the position which a worker occupies.
 Economy is other principle of management devised by Taylor. According to
him, maximum output is achieved through division of labor and
specialization. Scientific Management concentrates on technical aspects as
well as on profit and economy. For this purpose, techniques of cost
estimates and control should be adopted. Taylor concluded that science,
not rule of thumb, Harmony, not discord, Cooperation and not individualism,
Maximum output, in place of restricted output.

2. Administrative Management: Administrative Management emphasizes the

manager and the functions of management. The main objective of Administrative
management is to describe the management process and philosophy of
management. In contradiction of scientific management, which deals mainly with
jobs and work at individual level of scrutiny, administrative management gives a
more universal theory of management.

Henry Fayol's Administrative Management (1841–1925): Henri fayol is

known as the father of modern Management. He was popular industrialist and
victorious manager. Fayol considered that good management practice falls into
certain patterns that can be recognized and analysed. From this basic perspective,
he devised a blueprint for a consistent policy of managers one that retains much
of its force to this day. Fayol provided a broad analytical framework of the process
of management. He used the word Administration for Management.

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 Fayol categorized activities of business enterprise into six groups such as
Technical, Financial, Accounting, Security, and Administrative or
Managerial. He stressed constantly that these managerial functions are the same
at every level of an organization and is common to all firms. He wrote General and
Industrial Management. His five function of managers were plan, organize,
command, co-ordinate, and control. Principal of administrative management:
[Link] of labor, [Link] & responsibility, [Link], [Link] of command,
[Link] of direction, [Link] of individual interests to general interest,
[Link] of personnel, [Link], [Link] chain, [Link],
[Link], [Link] of tenure, [Link] and14 .Esprit de corps (union of
strength). These 14 principles of management serve as general guidelines to the
management process and management practice. His principles of management
are described below.

1. Division of work: This is the principle of specialization which is detailed by

economists as an important to efficiency in the utilization of labor. Fayol
goes beyond shop labor to apply the principle to all kinds of work,
managerial as well as technical.

2. Authority and responsibility: In this principle, Fayol discovers authority

and responsibility to be linked with the letter, the consequence of the former
and arising from the latter.

3. Discipline: This discipline denotes "respect for agreements which are

directed at achieving obedience, application, energy and the outward marks
of respect". Fayol declares that discipline requires good superiors at all
levels, clear and fair agreement, and judicious application of penalties.

4. Unity of command: This is the principle that an employee should receive

orders from one superior only.

5. Unity of direction: Fayol asserted that unity of direction is the principle that
each group of activities having the same objective must have one head and
one plan. As distinguished from the principle of unity of command, Fayol
observes unity of direction as related to the functioning of personnel.

6. Subordination of individual interest to general interest: In any group the

interest of the group should supersede that of the individual. When these
are found to differ, it is the function of management to reconcile them.

7. Remuneration of personnel: Fayol recognizes that salary and methods of

payment should be fair and give the utmost satisfaction to worker and boss.

8. Centralization: Fayol principle of centralization refers to the extent to which

authority is concentrated or dispersed in an enterprise. Individual
circumstances will determine the degree of centralization that will give the
best overall yield.

9. Scalar chair: Fayol believe of the scalar chair as a line of authority, a 'Chain
of Superiors" from the highest to the lowest ranks and held that, while it is
an error of subordinate to depart 'needlessly' from lines of authority, the
chain should be short-circuited when scrupulous following of it would be
detrimental.

10. Order: Breaking this principle into 'Material order' and 'Social Order', Fayol
thinks of it as the simple edge of "a place for everything (everyone), and

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 everything (everyone) in its (his) place". This is basically a principle of
organization in the arrangement of things and persons.

11. Equity: Fayol perceives this principle as one of eliciting loyalty and devotion
from personnel by a combination of kindliness and justice in managers
dealing with subordinates.

12. Stability of tenure of personnel: Finding that such instability is both the
cause and effect of bad management, Fayol indicated the dangers and
costs of unnecessary turnover.

13. Initiative: Initiative is envisaged as the thinking out and execution of a plan.
Since it is one of the "Keenest satisfactions for an intelligent man to
experience", Fayol exhorts managers to "Sacrifice Personal Vanity" in order
to permit subordinates to exercise it.

14. Esprit de corps: This is the principle that 'union is strength' an extension
of the principle of unity of command. Fayol here emphasizes the need for
teamwork and the importance of communication in obtaining it.

3. Bureaucratic Management: Bureaucratic management denotes to the perfect

type of organization. Principal of Bureaucracy include clearly defined and
specialized functions, use of legal authority, hierarchical form, written rules and
procedures, technically trained bureaucrats, appointment to positions based on
technical expertise, promotions based on competence and clearly defined career
paths.

The German sociologist, Max Weber recognized as father of modern

Sociology who appraised bureaucracy as the most logical and structure for big
organization. With his observation in business world, Weber summarized that
earlier business firms were unproductively managed, with decisions based on
personal relationships and faithfulness. He proposed that a form of organization,
called a bureaucracy, characterized by division of labor, hierarchy, formalized
rules, impersonality, and the selection and promotion of employees based on
ability, would lead to more well-organized management. Weber also argued that
authoritative position of managers in an organization should be based not on
tradition or personality but on the position held by managers in the organizational
hierarchy.

Max Weber (1864-1920) devised a theory of bureaucratic management

that emphasized the need for a firmly defined hierarchy governed by clearly
defined regulations and lines of authority. He considered the perfect organization
to be a bureaucracy whose activities and objectives were reasonably thought out
and whose divisions of labor were clearly defined. Weber also believed that
technical capability should be emphasized and that performance evaluations
should be made completely on the basis of merit. Presently, it is considered that
bureaucracies are huge, impersonal organizations that put impersonal
competence ahead of human needs. Like the scientific management theorists,
Weber sought to advance the performance of socially important organizations by
making their operations predictable and productive. Although we now value
innovation and flexibility as much as efficiency and predictability, Weber's model
of bureaucratic management evidently advanced the development of vast
corporations such as Ford. Bureaucracy was a particular pattern of relationships
for which Weber saw great promise. Although bureaucracy has been successful
for many companies, in the competitive global market of the 1990s organizations
such as General Electric and Xerox have adopted bureaucracy, throwing away the

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 organization chart and replacing it with ever-changing constellations of teams,
projects, and alliances with the goal of unleashing employee creativeness.

Chester I. Barnard: Chester Barnard (1886-1961) also devised

components to classical theory such as Follett that would be further developed in
later schools. Barnard, who became president of New Jersey Bell in 1927, used
his work experience and his wide reading in sociology and philosophy to devise
theories about organizations. Barnard stated that people join in formal
organizations to accomplish such goals that cannot be fulfilled by working alone.
But as they follow the organization's goals, they must also gratify their individual
needs. Barnard came to conclusion that an enterprise can operate efficiently and
survive only when the organization's goals are kept in balance with the aims and
needs of the individuals working for it. Barnard denotes a principle by which people
can work in stable and mutually constructive relationships over time. Barnard
believed that individual and organizations purposes must be in balance if
managers understood an employee's zone of indifference that is, what the
employee would do without questioning the manager's authority. Apparently, the
more activities that fell within an employee's zone of indifference the smoother and
more cooperative an organization would be. Barnard also believed that managers
had a duty to inspire a sense of moral purpose in their employees. To do this, they
would have to learn to think beyond their narrow self-interest and make an ethical
promise to society. Although Barnard emphasized the work of administrative
managers, he also focused substantial attention on the role of the individual
employee as the basic strategic factor in organization.

Modern Management Approaches

1. Behavioral Approach: Numerous theorists developed the behavioral approach of

management thought as they observed weaknesses in the assumptions of the
classical approach. The classical approach emphasized efficiency, process, and
principles. Some management scholars considered that this thought ignored
important aspects of organizational life, particularly as it related to human behavior.
Therefore the behavioral approach concentrated on the understanding of the
factors that affect human behavior at work. This is an improved and more matured
description of human relations approach. The various theorists who have great
contribution in developing principles of management in this are Douglas Mc
Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert.

Behavioral Scientists hold the classical approach as highly mechanistic,

which finds to degrade the human spirit. They choose more flexible organization
structures and jobs built around the capabilities and talent of average employees.
The behavioral approach has based the numerous principles.

 Decision-making is done in a sub-optimal manner, because of practical and

situational constraints on human rationality of decision-making. The
behaviorists attach great weight age on participative and group decision-
making.
 Behavioral Scientists promote self-direction and control instead of imposed
control.
 Behavioral Scientists believe the organization as a group of individuals with
certain goals.
 Behavioral scientists perceive that the democratic-participative styles of
leadership are enviable, the autocratic, task oriented styles may also be
appropriate in certain situation.

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  Behavioral scientists propose that different people react differently to the
same situation. No two people are exactly similar and manager should tailor
his attempts to influence his people according to their needs.
 Behavioral scientists identify that organizational variance and change are
predictable.

Approach of Mary parker follett: Mary Parker Follett (1868-1933)

developed classic structure of the classical school. However, she initiated many
new elements particularly in the area of human relations and organizational
structure. In this, she introduced trends that would be further developed by the
talented behavioural and management science schools. Follett was persuaded
that no one could become a whole person except as a member of a group. Human
beings grew through their relationships with others in organizations. In fact, she
explained management as "the art of getting things done through people." She
took for granted Taylor's statement that labour and management shared a
common purpose as members of the same organization, but she considered that
the artificial difference between managers and subordinates is vague in this natural
partnership. She believed in the power of the group, where individuals could
combine their diverse talents into something bigger. Moreover, Follett's "holistic"
model of control took into account not just individuals and groups, but the effects
of such environmental factors as politics, economics, and biology. Follett's model
was significant precursor of the idea that management meant more than just what
was happening inside a particular organization.

Maslow's theory of self-actualization: His theory is recognized as

Hierarchy of Needs. It is illustrated in a pyramid and elucidates the different levels
and importance of human's psychological and physical needs. It can be used in
business by managers to better understand employee motivation. The general
needs in Maslow's hierarchy include physiological needs (food and clothing),
safety needs (job security), social needs (friendship), self-esteem, and self-
fulfilment or actualisation. Maslow's Hierarchy of Needs relates to organizational
theory and behaviour because it explores a worker's motivation. Some people are
prepared to work just for money, because of friends, or the fact that they are
respected by others and recognized for their good work. The final level of
psychological development that can be achieved when all basic and mental needs
are fulfilled and the "actualization" of the full personal potential takes place. In the
organizational situation, if an employee's lower need on the hierarchy is not met,
then the higher ones are ignored. For example, if employees are worried that they
will be fired, and have no job security, they will be concerned about friendship and
respect.

Douglas McGregor theory of management suggested that there is need

to motivate employees through authoritative direction and employee self-control
and he introduced the concept of Theory X and Y. Theory X is a management
theory focused more on classical management theory and assumes that workforce
need a high amount of supervision because they are inherently lazy. It
presupposes that managers need to motivate through coercion and punishment.
Theory Y is a management theory that assumes employees are determined, self-
motivated, exercise self-control, and generally enjoy mental and physical work
duties. Theory Y is in line with behavioural management theories. Theory X and
Theory Y relates to Maslow's hierarchy of needs in how human behaviour and
motivation is the main priority in the workplace in order to maximize output. Theory
X: The theory that employees are inherently lazy and irresponsible and will tend to
avoid works unless closely supervised and given incentives, contrasted with
Theory Y. Theory Y: The theory that employees are capable of being ambitious
and self-motivated under suitable conditions, contrasted with Theory X.

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 An influential theorist in behavior approach of management thought was
Likert. His principles based on four System such as supportive relationships between
organizational members, multiple overlapping structures, with groups consisting of
superiors and their subordinates, group problem solving by consensus within groups and
overlapping memberships between groups by members who serve as linking pins.

2. Human Relations Approach: The human rationalists which is also denotes to

neo-classicists, focused as human aspect of business. These theorists emphasize
that organization is a social system and the human factor is the most vital element
within it.

There are numerous basic principles of the human relations approach that
are mentioned below:

 Decentralization: The concept of hierarchy employed by classical

management theorists is replaced with the idea that individual workers and
functional areas (i.e., departments) should be given greater autonomy and
decision-making power. This needs greater emphasis on lateral
communication so that coordination of efforts and resources can occur. This
communication occurs via informal communication channels rather than the
formal, hierarchical ones.

 Participatory Decision-Making: Decision-making is participatory in the

sense that those making decisions on a day-to-day basis include line
workers not normally considered to be "management." The greater
sovereignty afforded individual employees and the subsequent reduction in
"height" and increase in span of control of the organizational structure
requires that they have the knowledge and ability to make their own
decisions and the communication skill to coordinate their efforts with others
without a nearby supervisor.

 Concern for Developing Self-Motivated Employees: The importance on

a system of decentralized and autonomous decision-making by members
of the organization necessitates that those members be extremely "self-
motivated". Goal of managers in such an organization is to design and
implement organizational structures that reward such self-motivation and
autonomy. Another is to negotiate working relationships with subordinates
that foster effective communication in both directions.

Therefore, the human relations approach implies modifications in the

structure of the organization itself, in the nature of work, and in the association
between manager and assistant. Each of these changes depends upon
assumptions about the individual, the organization, and communication, just like
any other theory of organizations. Elton Mayo and others conducted experiments
that was known as Hawthorne experiments and explored informal groupings,
informal relationships, patterns of communication, and patterns of internal
leadership. Elton Mayo is usually popular as father of Human Relations School.
The human relationists, advocates the several factors after conducting Hawthorne
experiments which are mentioned below.

Social system: The organization in general is a social system consists of

numerous interacting parts. The social system established individual roles and
establishes norms that may differ from those of formal organization.
Social environment: The social climate of the job affects the workers and
is also affected.

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 Informal organization: The informal organization does also exist within the
frame work of formal organization and it affects and is affected by the formal
organization.

Group dynamics: At the place of work, the workers often do not act or react
as individuals but as members of group. The group plays an important role in
determining the attitudes and performance of individual workers.

Informal leader: There is an appearance of informal leadership as against

formal leadership and the informal leader sets and enforces group norms.

Non-economic reward: Money is an encouraging element but not the only

motivator of human behaviour. Man is diversely motivated and socio psychological
factors act as important motivators.

3. Behavioral Science: Behavioral science and the study of organizational behavior

emanated during 1950s and1960s. The behavioral science approach was a natural
development of the human relations movement. It concentrated on applying
conceptual and analytical tools to the problem of understanding and foresees
behavior in the place of work. The behavioral science approach has contributed to
the study of management through its elements of personality, attitudes, values,
motivation, group behavior, leadership, communication, and conflict, among other
issues.

4. Contingency Approach: This approach of management thought focuses on

management principles and concepts that have no general and universal
application under all conditions. Joan Woodward in the 1950s has contributed to
develop this approach in management.

Contingency school states that management is situational and the study of

management recognize the important variables in the situation. It distinguishes that
all the subsystem of the environment are interconnected and interrelated. By
studying their interrelationship, the management can find resolution to specific
situation. Theorists stated that there is not effective way of doing things under all
business conditions. Methods and techniques which are extremely effective in one
situation may not give the same results in another situation. This approach
proposes that the role of managers is to recognize best technique in particular
situation to accomplish business goals. Managers have to develop situational
understanding and practical selectivity.

Contingency visions are applicable in developing organizational structure,

in deciding degree of decentralization, in motivation and leadership approach, in
establishing communication and control systems, in managing conflicts and in
employee development and training. The contingency approach is associated with
applying management principles and processes as dictated by the sole
characteristics of each situation. It depends on various situational factors, such as
the external environment, technology, organizational characteristics,
characteristics of the manager, and characteristics of the subordinates.
Contingency theorists often implicitly or explicitly disapprove the classical
approach as it focuses on the universality of management principles.

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The Quantitative Approach of Management Thought

The quantitative approach aimed at enhancing the process of decision making

through the use of quantitative techniques. It is evolved from the principles of scientific
management.

1. Management Science (Operations Research): Management science which is

also known as operations research utilized mathematical and statistical
approaches to resolve management issues. It was developed during World War II
as strategists attempted to apply scientific knowledge and methods to the intricate
troubles of war. Industry started to apply management science after the war. The
introduction of the computer technology made many management science tools
and concepts more practical for industry.

2. Production and Operations Management: This approach emphasizes the

operation and control of the production process that changes resources into
manufactures goods and services. This approach is emerged from scientific
management but became a specific area of management study after World War II.
It uses many of the devices of management science. Operations management
underlines productivity and quality of both manufacturing and service
organizations. W. Edwards Deming exercised a great influence in developing
contemporary ideas to improve productivity and quality. Major areas of study within
operations management include capacity planning, facilities location, facilities
layout, materials requirement planning, scheduling, purchasing and inventory
control, quality control, computer integrated manufacturing, just-in-time inventory
systems, and flexible manufacturing systems.

Systems Approach of Management Thought

The systems approach deals with the thoroughly understanding the organization
as an open system that converts inputs into outputs. The systems approach has great
impact on management thought in the 1960s. During this period, thinking about managing
practices allowed managers to relate different specialties and parts of the company to
one another, as well as to external environmental factors. The system approach focuses
on the organization as a whole, its communication with the environment, and its need to
achieve equilibrium.

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Summary on the Evolution of Management Theories

To summarize, there are important theories of Management and each theory has
distinct role to knowledge of what managers do. Management is an interdisciplinary and
global field that has been developed in parts over the years.

Numerous approaches to management theory developed that include the

universal process approach, the operational approach, the behavioral approach, the
systems approach, the contingency approach and others. F W Taylor, Adam Smith, Henry
Fayol, Elton Mayo and others have contributed to the development of Management
concept.

The classical management approach had three major categories that include
scientific management, administrative theory and bureaucratic management.

Scientific management highlighted the scientific study of work methods to improve

worker efficiency. Bureaucratic management dealt with the characteristics of an perfect
organization which operates on a rational basis.

Administrative theory explored principles that could be used by managers to

synchronise the internal activities of organizations.

The behavioral approach emerged mainly as an outcome of the Hawthorne

studies. Mary Parker Follet, Elton Mayo and his associates, Abraham Maslow, Douglas
McGregor and Chris Argyris were main players of this school.

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LESSON 3: IMPORTANCE, FUNCTIONS AND LEVELS OF MANAGEMENT

Learning Competency: The learner is able to comprehend the importance, functions

and levels of management.

Importance of Management

The efficient management of human and material resources is essential for

achievement of objectives of any organization. The success of any business lies in the
quality of management. The significance of management will be clearer through the
following points:

1. Determination of objectives – Management helps in determining the objective of

the organization. No organization can succeed in its operations unless its
objectives are identified and well defined. These objectives have to be
communicated to all the people working in the organization.

2. Achievement of the objectives – Management plays a vital role in

accomplishment of organizational objectives and goals. The coordination and
integration of material & human resources helps in achieving the pre-determined
goals effectively and efficiently.

3. Efficient use of resources – An efficient management can lead a business

towards growth and prosperity. Management reduces wastage of human, material
and financial resources through proper planning and control.

4. Encourages innovation – Management encourage innovation in the

organization. Innovation brings new ideas, new methods, and new products and
makes the organization more competitive.

5. Personal objectives – Personal objectives are concerned with satisfaction of

financial and social needs of the employees. Through motivation and direction
management helps the individuals to achieve their personal goals while working
towards organizational objectives.

6. Economic development – Management helps in development of the society by

producing good quality products, creating employment opportunities and adopting
new technology.

7. Creates dynamic organization – Management helps the employees to overcome

their resistance to change and adopt as per changing situation to ensure its
survival and growth

Functions of Management

According to functions approach managers perform certain activities to effectively

and efficiently coordinate the work of others. They are classified as:

1. Planning: It is the first and foremost

function of management, i.e. to
decide beforehand what is to be done
in future. It involves defining jobs,
establishing strategies for achieving
those goals and developing plans to
integrate and coordinate activities.

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 2. Organizing: Once the plans are
formulated, the next step is to
organize the activities and resources,
as in identifying the tasks, classifying
them, assigning duties to
subordinates and allocating the
resources.

3. Staffing: It involves hiring personnel

for carrying out various activities of
the organization. It is to ensure that
the right person is appointed to the
right job.

4. Directing: It is the task of the

manager to guide, supervise, lead
and motivate the subordinates, to
ensure that they work in the right
direction, so far as the objectives of
the organization are concerned.

5. Controlling: The controlling function

of management involves a number of
steps to be taken to make sure that
the performance of the employees is
as per the plans. It involves
establishing performance standards
and comparing them with the actual
performance. In case of any
variations, necessary steps are to be
taken for its correction.

Coordination is an important
feature of management which means
the integration of the activities,
processes and operations of the
organization and synchronization of
efforts, to ensure that every element
of the organization contributes to its
success.

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Levels of Management

In any organization all those who are responsible for the work of others are known
as managers. Though their primary task remains the same – getting the things done by
others. Wide variance exist with regard to authority and responsibility of managers. These
differences are largely due to the differences in the levels of management. We normally
visualize a company’s management as a pyramid.

1. Top level Management: Top management constitute the highest level in the
management hierarchy. This level consists of small group of executives who are
the senior most in the organization. Top management has the maximum source of
authority and it establishes goals and policies for the enterprise.

Top Management consist of:

 CEO (Chief Executive Officer)
 COO (Chief Operating Officer)
 BOD (Board of Directors)
 CFO (Chief Finance Officer)
 Chairman
 President
 Vice President
 M.D. (Managing Director)

Functions of Top Management

 To lay down the objectives of the enterprise.
 To prepare strategic plans & policies for the enterprise.
 To assign jobs to different individuals working at middle level.
 To arrange all the finance required to carry on day to day activities.
 Top level management is responsible for the survival & growth of the
organization.
 It makes liaison with the outside world like government, suppliers, media,
public etc.
 It reviews the performance and controls the activities of all departments.

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 2. Middle level Management: Middle level constitutes the execution level of the
organization i.e. the departmental heads. They are responsible to the top
management for the efficient function of their department & for executing the plans
& policies made by top level.

Middle level consists of heads of the various departments such as:

 Purchase Manager
 Finance Manager
 Human Resource
 Executive Officer
 Plant Superintendent

Functions of Middle Level Management

 They act as a linking pin between the top & lower level management.
 They organize all the resources & activities of their department.
 They execute & implement the plans of the organization in accordance with
the policies of the top management.
 They select, appoint & train employees of their department.
 They evaluate the performance of their subordinates & prepare
performance appraisal reports.
 They offer various incentives to employees so that they perform to best of
their ability & ensure higher productivity.

3. Lower Level management: Lower Level Management can also be termed as

Supervisory Management/Operational Management/First-time Management.

It refers to the lowest level in the hierarchy of the organization. It is directly

concerned with the control over the performance of the operative employees. They
devote more time on the supervision of workers. Their authority & responsibility is
limited.

It consist of:
 Foreman
 Supervisors
 Sub-department Executives
 Clerks

Functions of Lower Level Management

 To represent the problems or grievances of workers before the middle
level management.
 To plan and organize the activities of their unit.
 To provide training to workers.
 To maintain good working conditions and developing healthy relations
between superior and subordinate.
 To communicate with workers, listen to their suggestions and motivate
them to take initiative.
 To maintain discipline among the work force.
 To maintain standard of quality, ensure steady flow of output & minimize
wastage.

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LESSON 4: FUNCTIONS, ROLES AND SKILLS OF A MANAGER

Learning Competency: The learner is able to explain the functions, roles and skills of a
manager

Functions of a Manager

The ten (10) important functions of a manager are as follows:

1. Manager as a Planner: The “very important function of a manager is of – (i) Planning,

(ii) Organizing, (iii) Staffing, (iv) Directing, and (v) Controlling. He is concerned with –
(a) ideas; (b) things; and (c) people. He must maintain a network of outside contacts
in order to assess the external environment of competition, social changes or changes
in governmental rules and regulations.

This can be achieved by attending meetings, professional conferences, and

through correspondence, mails etc.

2. Manager Must have an Idea of Creativity and Innovation: Creativity refers to

generation of new ideas and innovation refers to transforming ideas into viable realities
and utilities. He must adopt creative process for integrating the use of resources to
accomplish certain goals. In this process ideas, things and people are of vital inputs
which are to be transformed into output consistent with the goals.

3. A Manager Must be Imaginative to Plan Ahead and to Create New Ideas: He must
have knowledge of management of things (non-human resources) which deal with the
design of production system and acquisition, allocation and conversion of physical
resources to achieve certain goals.

4. Manager Must have Capability of the Management of People: Management of

people is concerned with the procurement, development, maintenance and integration
of manpower working in the organizational. Every manager has to direct his sub-
ordinates to put the organizational plans into practice.

5. His Function is to Set Objectives and to Adopt Corrective Measures: The

important function of a manager is to manage the personnel to get the best possible
results. The manager in the present age has to deal efficiently with the people who
are to contribute for the achievement of organizational goals.

6. Manager Must Take Necessary Measures to Train the Workers: Working under
him – It is the duty of every manager to educate, train and develop people below him
so that they may use potentialities and abilities to perform the work allotted to them.

7. Manager Must Make Arrangement for Incentives to his Workers: Managers

should help his workers in satisfying the needs and aspirations through incentives and
other things.

8. Proper Environment be Created for Workers: Manager must provide proper

environment for getting best contribution from the people working under him.

9. Discipline among People and Worker is Essential: He must create a climate which
brings in and maintains satisfaction and discipline among the people. Thus, his job is
very much complex. It requires some qualities of head and heart and cannot be
performed by everybody.

10. Manager’s Function as Leader Should be Present: Since a manager is responsible

for the activities of his sub-ordinates he must motivate them to perform better. He must
be an exemplary leader so that his sub-ordinates follow his directions and guidelines
with respect and dedication.

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Roles of a Manager

Every manager plays many roles. According to Henry Mintzberg, a manager’s work
role has three phases:

1. Interpersonal Roles: The need for an interpersonal arises because of the

constant interaction that a manager has to do with his superiors, peers,
subordinates and the outside parties.

The three main interpersonal roles are as follows:

a. Manager as the Figure Head: The manager occupies an official position,

whereby he performs the duties of signing certain documents, making
speech, receiving official visitors and other duties of legal and social nature.

b. Manager as the Leader: The manager lays down the goals for his
followers, co-ordinates the individual goals with the organizational goals,
motivates his followers to fulfil those goals and also motivates them to work
with enthusiasm and zeal. The manager looks after the interests of his
subordinates and tries to solve their problem.

c. Manager as the Liaison: The manager has to play the role of the liaison
by dealing with people other than subordinates or superiors (such as peers
within the organization and suppliers or clients outside of it).

2. Informational Roles: Mintzberg suggests that receiving and communicating

information are the most important aspects of a manager’s job.

a. Manager as Monitor: A manager has to monitor all the activities of the

organization and in case of any problem, solve it according to the situation.

b. Manager as Disseminator: In this role, a manager has to receive and

transmit informa-tion so that he can develop a thorough understanding of
his organization.

c. Manager as Spokesperson: The managers act as a link between their

superiors and subordinate as also between the external and the internal
organizational environment. The instructions issued by superiors are
passed on to their subordinates.

3. Decisional Roles
There are four decisional roles that a manager has to perform:

a. Managers as Entrepreneurs: The managers keep thinking of new ideas

for the develop-ment of the organization. They try to implement these ideas
within the given framework of resources. He, being an entrepreneur is
always ready to take risk for further development of the business.

b. Managers as Disturbance Handlers: The managers try to solve the

unexpected distur-bances arising in and outside the organization by
reviewing the situation and making proper strategies to solve them.

c. Managers as Resource Allocators: The managers allocate the monetary

and non-monetary resources to various departmental activities carried on
by the organization, in the order of their priority so that the organizational
goals can be achieved with utmost efficiency.

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 d. Manager as Negotiator: He performs the negotiator’s role in which he
deals with those situations where he has to enter into negotiations on behalf
of the organization i.e. he works as a mediator between the organization
and the employees.

Skills of a Manager

Good management skills are vital for any organization to succeed and achieve its
goals and objectives. A manager who fosters good management skills is able to propel
the company’s mission and vision or business goals forward with fewer hurdles and
objections from internal and external sources.

According to American social and organizational psychologist Robert Katz, the

three basic types of management skills include:

1. Technical Skills. Technical skills involve skills that give the managers the ability
and the knowledge to use a variety of techniques to achieve their objectives. These
skills not only involve operating machines and software, production tools, and
pieces of equipment but also the skills needed to boost sales, design different
types of products and services, and market the services and the products.

2. Conceptual Skills. These involve the skills managers present in terms of the
knowledge and ability for abstract thinking and formulating ideas. The manager is
able to see an entire concept, analyze and diagnose a problem, and find creative
solutions. This helps the manager to effectively predict hurdles their department or
the business as a whole may face.

3. Human or Interpersonal Skills. The human or the interpersonal skills are the
skills that present the managers’ ability to interact, work or relate effectively with
people. These skills enable the managers to make use of human potential in the
company and motivate the employees for better results.

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 There is a wide range of skills that management should possess to run an
organization effectively and efficiently. The following are six essential management
skills that any manager ought to possess for them to perform their duties:

1. Planning. Planning is a vital aspect within an organization. It refers to one’s ability

to organize activities in line with set guidelines while still remaining within the limits
of the available resources such as time, money, and labor. It is also the process of
formulating a set of actions or one or more strategies to pursue and achieve certain
goals or objectives with the available resources.

The planning process includes identifying and setting achievable goals,

developing necessary strategies, and outlining the tasks and schedules on how to
achieve the set goals. Without a good plan, little can be achieved.

2. Communication. Possessing great communication skills is crucial for a manager.

It can determine how well information is shared throughout a team, ensuring that
the group acts as a unified workforce. How well a manager communicates with the
rest of his/her team also determines how well outlined procedures can be followed,
how well the tasks and activities can be completed, and thus, how successful an
organization will be.

Communication involves the flow of information within the organization,

whether formal or informal, verbal or written, vertical or horizontal, and it facilitates
smooth functioning of the organization. Clearly established communication
channels in an organization allow the manager to collaborate with the team,
prevent conflicts, and resolve issues as they arise. A manager with good
communication skills can relate well with the employees and thus, be able to
achieve the company’s set goals and objectives easily.

3. Decision-making. Another vital management skill is decision-making. Managers

make numerous decisions, whether knowingly or not, and making decisions is a
key component in a manager’s success. Making proper and right decisions results
in the success of the organization, while poor or bad decisions may lead to failure
or poor performance.

For the organization to run effectively and smoothly, clear and right
decisions should be made. A manager must be accountable for every decision that
they make and also be willing to take responsibility for the results of their decisions.
A good manager needs to possess great decision-making skills, as it often dictates
his/her success in achieving organizational objectives.

4. Delegation. Delegation is another key management skill. Delegation is the act of

passing on work-related tasks and/or authorities to other employees or
subordinates. It involves the process of allowing your tasks or those of your
employees to be reassigned or reallocated to other employees depending on
current workloads. A manager with good delegation skills is able to effectively and
efficiently reassign tasks and give authority to the right employees. When
delegation is carried out effectively, it helps facilitate efficient task completion.

Delegation helps the manager to avoid wastage of time, optimizes

productivity, and ensures responsibility and accountability on the part of
employees. Every manager must have good delegation abilities to achieve optimal
results and accomplish the required productivity results.

5. Problem-solving. Problem-solving is another essential skill. A good manager

must have the ability to tackle and solve the frequent problems that can arise in a
typical workday. Problem-solving in management involves identifying a certain

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 problem or situation and then finding the best way to handle the problem and get
the best solution. It is the ability to sort things out even when the prevailing
conditions are not right. When it is clear that a manager has great problem-solving
skills, it differentiates him/her from the rest of the team and gives subordinates
confidence in his/her managerial skills.

6. Motivating. The ability to motivate is another important skill in an organization.

Motivation helps bring forth a desired behavior or response from the employees or
certain stakeholders. There are numerous motivation tactics that managers can
use, and choosing the right ones can depend on characteristics such as company
and team culture, team personalities, and more. There are two primary types of
motivation that a manager can use. These are intrinsic and extrinsic motivation.

Management skills are a collection of abilities that include things such as business
planning, decision-making, problem-solving, communication, delegation, and time
management. While different roles and organizations require the use of various skill sets,
management skills help a professional stand out and excel no matter what their level. In
top management, these skills are essential to run an organization well and achieve
desired business objectives.

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 REFERENCES

Accel Team (2004), ‘Historical Perspective – Growth of Scientific Management’.

Chung, Ronald K, (2008) ‘Evolution of Philosophical Thoughts in Management’. Class

notes distributed in Hong Kong.

Definition of Management. Retrieved from

[Link]

Definitions of Management. Retrieved from

[Link]
management/definitions-of-management/19418

Evolution of Management Thoughts. Retrieved from

[Link]
[Link]

Functions and Roles of a Manager. Retrieved from

[Link]
business-management/functions-of-a-manager/18424

Management Skills. Retrieved from

[Link]
skills/

The Evolution of Management Thought and the Evolution of Management Theories.

Retrieved from [Link]
[Link]#:~:text=The%20evolution%20of%20management%20thoug
ht%20is%20a%20process%20that%20started,%2C%20mental%20capacities%2
C%20and%20intelligence.

Wendell L. French (2007) ‘Human Resource Management 6th Edition’. Houghton Mifflin.

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