UNIVERSITY OF GONDAR

INSTITUTE OF TECHNOLOGY
DEPARTMENT OF INDUSTRIAL ENGINEERING
INTRODUCTION TO INDUSTRIAL MANAGEMENT

Assignment-1

Name Birtukan Ezezew

Id No 03151/11
Section 2

Submitted to: Mr. Mequanent E.

Submission Date: 01-11-2014EC

1) Discuss about the major application area of industrial management? And
differentiate this profession from other management profession?
Applications of industrial management are as follows:
Initially the scope and application of industrial management was restricted to manufacturing
industry. Later on it spread to non-manufacturing activities such as construction and
transportation, farm and air-line operations and maintenance, public utilities govt. and military
operations.
 In an industry besides the production, other departments utilizing industrial management
concepts are marketing, finance, purchasing, industrial relations etc…
Major applications of industrial management:
1. Pre-production planning
1.1. plant location
1.2. plant lay out
1.3. capacity planning
1.4. Selection of machinery and equipment
1.5. Machinery handling
2. Pre-production planning and control:
2.1. Planning
2.2. Routing
2.3. Scheduling
2.4. Dispatching
2.5. controlling
3. Total quality management
 Total quality management refers to maintaining the quality of the goods
produced , by setting up a standard and checking up the produced parts as well as
goods on a regular interval and if found deviation from the standard than sending
it back for maintenance so as to ensure quality, quantity and functionality.
4. To improve the processes and services in: Finance, marketing, human resource.
4.1. Finance
4.2. Marketing
4.3. Human resource(HR)
Design and plant layouts
 Industrial management helps in designing the plant of the industry. Location of
plant, machines and raw materials etc. are managed by IM so as to ensure the
efficiency production in minimum possible time and maximum possible output.
Management of material handling system
 Management of material handling system means: management of handling
methods of materials. Industrial management helps by providing the method of
scientific management to handle materials and the methods used for handling
 materials is also studied thoroughly and if needed any change is then made timely.
Elimination of old and traditional methods and introduction of new methods.
Labor management
 Labor management is done by many methods, such as selecting efficient labor.
Selection and training from time to time, skill development elimination of old
methods and introduction of new and efficient method.
2) Discuss and differentiate the following management theories with clear example:
quantitative theory; scientific management, classical administrative and
bureaucratic organization theory; contingency and system theory.
Problem solving process in the quantitative theory is depicted below:

Branches of quantitative management:

The branches of quantitative management are:
(a) Management science,
(b) Operations management, and
(c) Management information systems.
(a) Management science:
“Management science is an approach that aims at increasing decision effectiveness through the
use of sophisticated mathematical models and statistical methods.”
According to r.m. hogget’s’, “the quantitative school, which is also called management science
school, consists of those theorists who see management as a body of quantitative tools and
methodologies designed to aid today’s manager in making the complex decisions related to
operations and productions.”
Management science also known as operations research uses mathematical models such as linear
programming, pert, cpm, games theory, probability, sampling theory, capital budgeting, financial
structure theories and symbols to solve organizational problems.
Whenever management has a problem, it calls a team of experts from relevant disciplines which
analyses business problems and frames a mathematical model by collecting the relevant data
(like cost of machine, cost of raw material, selling price of the product etc.) And tries to
maximize the output and minimize the cost, computers have simplified application of these
models to deal with various problem-solving situations.
By changing values of variables in the model, different equations can be solved through
computers and the or team can find the effect of each change on the dependent variable to arrive
at the optimum and rational solution to managerial problems.
Management science and operations research are often considered indistinguishable. “while
operations research tends to focus on formulation and manipulation of mathematical models for
common operational processes, management science tends to focus on the use of models in the
practice of management.”
(b) Operations management
“Operations management is the function, or field of expertise, that is primarily responsible for
managing the production and delivery of an organization’s products and services.” In operations
management, people use quantitative techniques of forecasting, inventory analysis, statistical
quality control methods, networking models etc. In areas such as inventory management,
production planning, designing the production process, purchasing raw materials, storing and
selling the final products and similar areas in manufacturing units.
(c) Management information system (mis):
“mis is the field of management that focuses on designing and implementing computer-based
information systems for use by management.” Large amount of information is quickly processed
(conversion of raw data into useful information) to make useful business decisions.
Assumptions of quantitative theory:
1. Organizations are decision-making units which make efficient decisions through mathematical
models.
2. Business problems can be solved through joint efforts of a team that consists of experts from
the fields of mathematics, statistics, accountancy, engineering etc.
3. Business problems can be expressed in mathematical models where relevant factors can be
quantified in numerical terms. Management is seen as mathematical process expressed in terms
of mathematical symbols and relationships.
Evaluation of quantitative management:
The quantitative theory (or management science theory) considers solving complex business
problems in financial management, inventory valuation, inventory control, production
scheduling, human resource planning and other areas where quantifiable data can be obtained.
Some of the positive attributes of this theory are:
1. It establishes relationships amongst quantifiable variables of decision-making situations and
facilitates disciplined thinking.
2. Mathematical models help to derive precise and accurate results by analyzing complex
statistical data.
3. This approach is useful in areas of planning and control where data is available in quantitative
terms. Decisions are based on data and logic rather than intuition and judgment.
4. Computers have facilitated analysis of almost every variable that affects the workplace that
might otherwise have been overlooked. Statistical packages are available which facilitate
analysis of qualitative data also (dummy variables are used to analyses the non-quantifiable
data).
Limitations of quantitative management:
Despite its widespread use in the business world, its application is restricted in certain areas. All
managerial problems cannot be solved by mathematical models.
This theory, therefore, suffers from the following limitations:
1. Its application is restricted in areas that deal with human behavior. Human behavior cannot be
predicted through mathematical equations. Use of behavioral techniques is more appropriate in
such situations.
2. Amongst different functions of management, its use is limited in organizing, staffing and
directing. It applies more in planning and control functions.
3. Even where this theory is applicable, it does not eliminate risk but only attempts to reduce it.
In fact, in many situations mathematical models may just be used as models for analyzing the
results rather than used as the basis for making decisions.
4. This approach assumes that all the variables affecting the problem can be quantified in
numerical a term which is not always true.
5. In some cases, managers are constrained by time, cost and technological considerations in
collecting data relevant for decision-making. Decisions in such cases are based on availability of
limited information. Such decisions are not optimum decisions but only ‘satisfying decisions’.
Though this theory has restricted use in certain areas, it is of immense use in areas where data
can be obtained in quantitative terms.
Examples of quantitative management theory
For example, the manager might establish that, historically, stocks with low price-to-earnings
ratios and high growth rates of earnings over two years outperformed the market for the next
year. This historical observation of performance is called “back testing” of a model.
Examples of scientific management theory
Giant companies such as amazon, mcdonalds, and fedex use a new version of scientific
management theory. These companies found a way to maximize employee performance by
systemizing workplace tools and procedures. Managers can dismiss workers and hire a new
person, and the productivity will be unaffected.
Examples of classical management theory
Famous fictional examples of classical management styles
 Miranda priestly, editor in chief runway magazine – autocratic.
 Professor Dolores umbridge, Hogwarts high inquisitor – bureaucratic.
 John hammond, ceo jurassic park – laissez-faire.
 Simba, leader of the pride – democratic.
Examples of bureaucratic management theory
An army division is broken down into brigades. The brigades are broken down further into
battalions. Battalions are divided into companies, and companies are broken down into platoons.
Platoons may have squads that consist of individual soldiers.
Examples of contingency management theory
If the leader rates the person they would least like to work with favorably, they are considered a
relationship-oriented leader. Their strengths would include managing conflict well and
developing strong workplace relationships.
Examples of system management theory
The systems approach implies that decisions and actions in one organizational area will affect
other areas. For example, if the purchasing department does not acquire the right quantity and
quality of inputs, the production department won’t be able to do its
SCIENTIFIC MANAGEMENT THEORY
The Scientific management theory/approach is one of the most important theories of traditional
public administration formulated by Frederick Winslow Taylor who was an engineer by
profession and always viewed each and every thing and its aspects scientifically and since he
was into the production field, he was to be concerned with increasing efficiency of workers to
increase production within the least possible time with the least possible resources. Thus, ruling
out wastage to the maximum and increase profits to the hilt. Taylor is regarded as the father of
the scientific management approach. The Scientific management approach in its literal sense
means a scientific way of managing an organization. His theory helped pave the way for many
modern management approaches and techniques, some opposed him whereas some supported
him but there is no denying that his theory was the one that started their very existence. He was
employed at a time when the Industrial revolution was at its peak and matured (the 19th century)
and industries were trying to find a solution to the complex problems of organizations due to the
same profits.
The basic principles (rules) of Taylor's scientific management were:
1) Standardization of work methods: A scientific method for each job/task of a worker via
scientific observation and analysis of a particular job to find out the one best way to do that task
that would lead to reduced work for the worker as he could do more with limited number of
movements. Use of bench marked and standardized tools and equipment’s and methods would
improve quality control and inspections thus reducing cost of production and increasing
efficiency. Taylor emphasized on the ' right man for the right job' by proper selection and
training and ensuring fair wages and reasonable prices for standardized goods to consumers.
2) Equal division of work and responsibility between management and workers: At that time
workers had all the load of work and they were left to fend for themselves to complete the work.
Thus Taylor advocated that the management had to seriously undertake functions for which it
was best suited to i.e. planning, organizing, controlling and determining methods of work instead
of leaving all this to the mostly uneducated worker who knew nothing of this and was only
concerned with doing his job through the skills he had. This principle according to Taylor would
help create a mutual understanding and dependence between the latter and the former in the long
run that would eliminate all unnecessary conflict and mistrust that existed between the two at
that time. He believed that this mutual harmony instead of discord is the just and rightful
characteristic of scientific management.
3) Scientific selection of workers and their progressive development : He advocated
through this principle the need for the management to study the nature and character of each
job/work and then scientifically choose the right worker for the same who possess the necessary
skills for the same. It is also the duty of the management to study the limitations and possibilities
of workers for their development as Taylor believed that every worker had a definite potential
for development. He advocated for a systematic and thorough training of workers for the job
after being selected. It is also important that the worker accepts the new methods, tools and
conditions in their own interest and does it sincerely.
4) Mutual collaboration of workers and management: According to this principle there should be
active cooperation and cordial relations between management and workers instead of discord and
distrust in order to increase the production and efficiency of the company/organization. A
healthy environment needs to be created. A formally prescribed scientific method of production
in organizations will lead to a lot of conflicts that occur due to lack of clear communication and
confusion from top to bottom between the latter and former disappearing. Apart from these four
basic principles Taylor also expressed concern about the following in the process of scientific
management:
a) Mental Revolution: He advocated a change in the attitudes of workers and management
towards each other and their responsibilities. Managers should stop worrying about accumulating
the most and instead focus on generating the most that will lead to more funds for them. The
workers should stop worrying about increasing wages without putting in extra effort and instead
increase their responsibility and efficiency and increase production that will definitely lead to
rise in their salaries sooner or later.
b) Division of work: Planning function to be taken over by management who were appointed
for the same as they have been trained and skilled for the same and workers to concentrate on
completing their functional task as per the rules and guidelines and methods planned by the
former. Thus, each doing the job for which they have been appointed and are best skilled for.
c) Selection and training of workers: Taylor advocated the selection and training of
workers for best performance of the work in an organization. Right person for the right job. This
is the duty of the management to choose a candidate for a particular job on the basis of his
nature, character and capacities and also provide for formal training and clear instructions to
them to perform prescribed motions with the standardized tools and materials.
d) Work study and work measurement: Work should be studied systematically and
scientifically and various laws and rules are to be applied to everyday work to find the one best
way to do that job. Taylor studied each and every movement of the worker with a stop watch and
removed all the unnecessary movements and found out the minimum time required for each job.
This not only helped reduce time but also slow movement and fatigue of workers thus increasing
efficiency and production leading to great profits for the organization.
e) Work as an individual activity: Taylor never advocated group work/activity. He asserted
that people were only motivated by personal ambition and tends to lose his
individuality/individual drive in a group setting. He stated that workers should have no verbal
interaction as it leads to undue personal pressures.
f) Development of management thinking: He viewed scientific management as a medium
to develop management as a science. It means that specific laws and rules could be derived for
management studies and practices and those laws relate specifically to wage rates and way of
doing work to increase the rate of production. Taylor advocated the use of standardized tools and
equipment as well as methods.
g) Standardization of tools: Taylor himself developed and invented many standardized tools
to increase production and efficiency and those after a successful stint became the benchmark to
be used for those particular jobs. One of his most famous studies involved shovels. He noticed
that workers used the same shovel for all materials. He determined that the most effective load
was 21½ lb, and found or designed shovels that for each material would scoop up that amount.
Taylor was able to convince workers who used shovels and whose compensation was tied to how
much they produced to adopt his advice about the optimum way to shovel by breaking the
movements down into their component elements and recommending better ways to perform
these movements. This led to huge increase in efficiency and production.
h) Task prescription: It means that a worker should get a clear prescription and description of
what task is to be done by them in clear language and instructions that is understandable by
him/her by the management through proper planning.
i) Trade unions: Taylor was against trade unions or group activity as mentioned earlier as he
believed that it was unnecessary since the goal of the workers and management was the same. As
scientific management would make everything crystal clear for everybody in the organization
ridding it of any conflict and with fair wages there is no need for trade unions.
j) Incentive scheme: Taylor suggested a piece work rate incentive for workers. That means if
a worker achieves a greater output than the target assigned to him he/she would then receive a
bonus payment for each piece extra. And the bonus should be generous and consistent to
encourage the workers to produce more.
Classical administrative theory
The Classical Theory of Organization is also called Administrative Theory. It came to be
developed in the early part of the 20th century. Henry Fayol, a French manager and industrialist
put forward the basic premises of the organization theory in his book “General and Industrial
Management” (1916). It was followed by the publication of another important work “Onward
Industry” written by James Mooney and Alan Ruby and published in 1918. Still, later in 1937,
Papers on the Science of Administration, an edited work, was bought into print by Luther Gulick.
All these works and several others played a big role in the development of the science of
administration in the first half of the 20th century.
The general issues of Administrative Organization were first of all subjected to systematic
theorizing by Henry Fayol. Later on, these theories were developed by Gulick and Urwick, and
they formulated a set of universally recognized principles of organization. These formulations
are collectively called the Classical Theory of Organization or simply the Administrative Theory.
The Classical Theory of Organization is also called Administrative Theory. It came to be
developed in the early part of the 20th century. Henry Fayol, a French manager and industrialist
put forward the basic premises of the organization theory in his book “General and Industrial
Management” (1916). It was followed by the publication of another important work “Onward
Industry” written by James Mooney and Alan Ruby and published in 1918. Still, later in 1937,
Papers on the Science of Administration, an edited work, was bought into print by Luther Gulick.
All these works and several others played a big role in the development of the science of
administration in the first half of the 20th century.
The general issues of Administrative Organization were first of all subjected to systematic
theorizing by Henry Fayol. Later on, these theories were developed by Gulick and Urwick, and
they formulated a set of universally recognized principles of organization. These formulations
are collectively called the Classical Theory of Organization or simply the Administrative Theory.
It is called “classical” because it has been one of the earliest formulations based on a systematic
analysis of an organization. It accepted the view that organization was the primary unit of
analysis and design. The classical theories believed that a science of administration can be
developed on the basis of several fundamental principles of organization as well as on the basis
of the experience of administrations. The classical theorists played their part in getting accepted
that administration which was being regarded as only art could be developed also as a science. In
fact, such a transformation had a beginning under the influence of the ideas of Fayol, Gulick and
Urwick.
However, classical theorists prefer to give more importance to the structure of the organization
than to the role of the people in the organization. They always concentrate upon the study of
organization in terms of its hierarchical structures and their functions. Urwick in his book
“Elements of Administration” defined an organization as “determining what activities are
necessary to any purpose and arranging them in groups which may be assigned to individuals”.
He conceptualized an organization in terms of designing the administrative structure.
The Classical Administrative Theory is closely related to the Bureaucratic Theory of
Organization. Both these theories are largely deductive and take a normative view of an
organization. Both advocate formal organizations, both emphasize order, objectivity, rationality,
certainly, hierarchy and professionalism.
According to Fayol, “Administration is a process that must be carried out at all levels of an
organization and the main elements of administration are planning, organizing, commanding,
coordination and controlling”. Gulick tried to improve this view of Fayol by advocating his
POSDCORB view of administration. Each letter of this term was taken to mean a definite thing.
P- Planning- Working out the things that need to be done and the methods for doing them in
such a way as can accomplish the purpose set for the enterprise.
O- Organization- Establishment of the formal structure of authority through which, work
sub-divisions are arranged, defined and co-ordinated for the defined objectives.
S- Staffing- The whole personnel function of bringing in and training the staff and maintaining
favourable conditions of work.
D- Directive- Continuous task of making decisions and embodying them in specific and
general orders, and instructions, and serving as the leader of the enterprise.
CO- Co-ordinating- The all-important duty of inter-relating the various parts of the work
and making them get on in a coordinated way.
R- Reporting- Keeping the executive informed of what is going on, which include keeping
him and his subordinates and himself informed through records, research and inspection.
B- Budgeting- All that goes with budgeting in the form of fiscal planning, accounting and
financial control.
The Classical Theory of Administration revolves around such a view of the nature and scope of
administrative organization.
MAIN PRINCIPLES OF THE CLASSICAL THEORY:
Urwick identified eight principles of classical or administrative theory. These are-
(1) The Principle of Objective- that all organisations should be an expression of a purpose.
(2) The Principle of Correspondence- that authority and responsibility must be co-equal.
(3) The Principle of Responsibility- that the responsibility of higher authorities for the work of
subordinates is absolute.
(4) The Scalar Principle- that a pyramidical type of work structure is built up in every
organization.
(5) The Principle of Span of Control- that each administrative officer is to exercise control over
a defined number of subordinates.
(6) The Principle of Specialization-limiting one’s work to a single function.
(7) The Principle of Coordination- inter-relating of various parts of the organization.
(8) The Principle of Definition- clear prescription of every day.
Luther Gulick also lists the following as the Principles of Organization-
(1) Division of work or Specialization.
(2) Basis of Department Organization.
(3) Coordination through hierarchy.
(4) Deliberate Coordination.
(5) Coordination through Committees.
(6) Decentralization.
(7) Unity of Command.
(8) Staff and Line.
(9) Delegation.
(10) Span of Control.
Bureaucratic organization theory
Bureaucracies are all around us. This form of organization, which is comprised of non-elected
officials who implement rules, is not only common in the public sector but in the business world
as well. Examples of bureaucracies in the public sector include the Social Security
Administration, Environmental Protection Agency and public universities. Among the oldest
bureaucratic structures in the country is the United States military.
In the private sector, most large business firms have a bureaucratic organization. Examples
of private sector firms with a bureaucratic structure include IBM, GM and the Union Pacific
Railroad. Knowing how bureaucratic management works can lead to a better understanding of
how government agencies and large business firms operate; it can assist you in interacting with
complex organizations, whether it be seeking social security benefits or working for a large
corporation.

Max Weber
One of the most important thinkers in modern organizational theory, Max Weber (1864-1920),
is the 'father of the bureaucratic management theory.' Weber was a German sociologist and
political economist that viewed bureaucracy in a positive light, believing it to be more rational
and efficient than its historical predecessors.
Bureaucratic Management Theory
Weber's theory of bureaucratic management also has two essential elements. First, it entails
structuring an organization into a hierarchy. Secondly, the organization and its members are
governed by clearly defined rational-legal decision-making rules. Each element helps an
organization to achieve its goals.
An organizational hierarchy is the arrangement of the organization by level of authority in
reference to the levels above and below it. For example, a vice-president of marketing is below
the company's president, at the same level as the company's vice president of sales, and above
the supervisor of the company's social media department. Each level answers to the level above
it, with the ultimate leader of the organization at the top.
The easiest way to understand the term rational-legal decision-making rules is to think of it as
a set of explicit and objective policies and procedures that governs how an organization
functions. Examples of rational-legal decision-making rules include human resources rules and
policies or the regulations governing who is entitled to unemployment insurance.
Contingency theory
To ensure that companies run smoothly, leaders have turned to the study of organizational behavior to
help improve their employees' work environment. Organizational behavior studies analyze the conduct of
employees within the workplace to better predict and manage their level of motivation. However, there
are various situational factors that must be taken into account when using organizational behavior data.
The contingency theory, also known as the situational approach to management theory, states that
situational factors can affect the relationships between dependent and independent variables in the work
environment, which in turn will affect employee behavior, motivation, and effectiveness. Success in
analyzing organizational data and improving employee motivation is contingent, or dependent, on the
unique contingency variables of the particular organization. The contingency theory recognizes that an
individualized approach is necessary to successfully use organizational behavior data to benefit
employees and create a productive work environment.
Contributors to Contingency Theory
Several people contributed to the formation of the contingency theory, each conducting their own studies
that helped shape the theory as a whole. Some of the main contributors include:
Burns and Stalker: identified two types of organizational structures (organic and mechanistic) and two
environmental categories (stable and dynamic)
John Woodward: analyzed different types of technology and how they can influence an organization
Lorsch and Lawrence: proposed that organizations function in either simple or complex environments and
that more complex environments adopt higher degrees of differentiation and integration
Fred Fiedler: proposed that matching a leader's style to situations that give the leader control and
influence leads to effective leadership and improvement in the work environment
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Contingency Variables
Within the contingency theory, there are two contingency variables that affect an organizational structure:
dependent and independent. In an organization, changes to dependent variables are the result of
independent variables. In other words, independent variables are the cause of the change in the dependent
variable.
Dependent Variable
Dependent variables in an organization are the effects, sometimes negative, that a work environment has
on its employees. Some examples of organizational dependent variables include turnover, absenteeism,
and productivity.
Independent Variable
Independent variables in an organization are the circumstances of the work environment that can
create change in employee behavior, causing the dependent variables to shift. Examples of
organizational independent variables are motivation and leadership.
System theory
The Systems Approach to management theory, commonly viewed as the foundation of
organizational development, views the organization as an open system made up of interrelated
and inter-dependent parts that interact as sub-systems.
Thus the organization comprises a unified singular system made up of these subsystems. For
example, a firm is a system that may be composed of sub-systems such as production, marketing,
finance, accounting and so on. As such, the various sub-systems should be studied in their inter-
relationships rather, than in isolation from each other.
The system as a whole is affected by internal elements (aspects of the sub-units) and external
elements. It is responsive to forces from the external environment.
The system is considered open, as organizations receive varied forms of inputs from other
systems. For example, a company receives supplies, information, raw materials, etc. These inputs
are converted to outputs that affect other systems.
Generally, the systems approach assesses the overall effectiveness of the system rather than the
effectiveness of the sub-systems. This allows for the application of system concepts, across
organizational levels in the organization - rather than only focusing upon the objectives and
performances of different departments (subsystems).
Organizational success depends upon interaction and interdependence between the subsystems,
synergy between the sub-systems, and interaction between internal components (closed system)
and external components (internal system).
Advantages and Disadvantages of a Systems Approach
 The advantages of the systems approach include:
 It assists in studying the functions of complex organizations
 It is probabilistic rather than deterministic.
 It has been utilized as the base for the new kinds of organizations like project
management organization.
 It is possible to bring out the inter-relations in various functions like planning,
organizing, directing and controlling.
Negative attributes of the systems approach include:
 This approach is somewhat abstract and vague.
 It can be difficult to apply to large and complex organizations.
 It does not provide any tool and technique for managers.
 It is not a prescriptive management theory, as it does not specify tools and techniques for
practicing managers
 It does not address power and social inequalities and their causes.
 It does not specify the nature of interactions and interdependencies.
Who are the Primary Contributors to Systems Theory?
Chester Bernard introduced the concept of Cooperative Systems in his book, Functions of an
Executive (1938).
Economist, Herbert Simon, introduced in his book, Administrative Behavior (1947), the concept
of systems process in decision-making within organizations. Notably, he introduced concepts of
bounded rationality and satisfying.
Biologist, Ludwig von Bertalanffy, introduced principles of General Systems theory in 1950.
Other contributors include: Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn,
W. Buckley and J.D. Thompson.
3) Briefly distinguish the difference between traditional and modern management
theory.
“Traditional” refers to those societies or elements of societies that are small-scale, are derived
from indigenous and often ancient cultural practices.
“Modern” refers to those practices that relate to the industrial mode of production or the
development of large-scale often colonial societies.
These co-exist in the world today.
It is stupid to divide things up into dichotomies or dualities, but it is sometimes useful as a
heuristic device.
Even though there is no such thing as a completely traditional or completely modern society at
the present time, the collision between the two forms of organization has great significance for
everyone alive today.
The principle of social analysis.
Even the idea of separating society or daily life into ‘components’ (economy, religion, political
organization, social relations, etc.) does not make sense in the traditional worldview, in which
they are all inter-penetrated, a Gestalt.
The domination of Western ways and thought of all others, by military and economic force, may
be a historical fact, but is not necessarily a permanent state of affairs.
Subsistence and economy.
Traditional: Production for use or subsistence.
 Simple division of labor (age, sex); cooperation.
 Units of production family, clan, village, age-set (organic social units).Units of
distribution and consumption socially-based (family, etc.).
 Consumption to satisfy basic needs or ritual.
Modern: Production for profit, growth.
 Complex division of labor (specialization, differentiation).
 Individualized, mechanized; units hard to identify (not social).Units of dist. are
individual, mechanical, commercial, corporate.
 Consumption needs and competitive (over-) consumerism.

Material culture.
Traditional: Accumulation for redistribution, exchange for prestige, alliance.
 Collective ownership.
 No distinct economic sphere; inter-penetrated with kinship, age, ritual.
 No work for pay; no formal contract; no “labor” or “shadow”.
 Few possessions; similar standard of living.
Modern: Resources not always used for social ends (self). Cult of wealth.
 Private ownership.
 Distinct economic sphere, with distinct domains.
 Pay for goods and services; contract-based; shadow work.
 Many possessions; inequitable distribution of resources and wealth.
Cultural ecology.
Traditional: Subsistence strategy related to ecology, population size and structure, settlement
pattern.
 Sacred land and commons.
 Use value of environment.
 Transport by human or animal energy.
 Individuals have variety of skills; make tools and control them.
Modern: Techno-economic system unrelated to environmental, social and cultural factors.
 Restricted access (private), but few sacred places or commons.
 Resource exploitation, domination of nature.
 Machine transportation; chemical energy.
 Expertise replaces skill and general knowledge.
 Chemical, mechanical energy intensive; muscular is leisure.
 Urbanized Rural supports growth.
Lifestyle.
Traditional: More leisure, more time; time means lived life.
 Spiritual focus.
 Mythological basis for taboos and rules. Informal social control.
 People entertain themselves. Conversation is an art.
Modern: Less leisure, no time; time is independent of life; time is money.
 Secular or religious.
 Legalistic or doctrinal. Formal social control.
 People are entertained by specialists. Consumption replaces conversation.
 Less leisure, no time; time is independent of life; time is money.
 Secular or religious.
 Legalistic or doctrinal. Formal social control.
 People are entertained by specialists. Consumption replaces conversation.
4) Discuss the difference between behavioral and modern management theory?
Then, compare and contrast these theories i.e. classical, behavioral and modern
management theory?
Traditional Organization Management
The structure of traditional organization like the military system, which is hierarchical, organized
and discipled. The power flows vertically and upward, the employees are departmentalized and
follow a chain of command. Each department has its own rules and regulations, the superior of
the department who is responsible to report to the managers. Every employee strictly follows the
business strategies, has own job description and accountability to the superior, therefore
traditional organization structure is likely fixed and rigid in general.
For the traditional management model, it could be the advantage that structure of the
organization is simple to design and operation, it is easy for the employees understand their
authority and responsibility. Moreover, due to the chain of command from top level to
subordinate level, the employees have fixed responsibility who are responsible to their direct
superior, it could reduce the probability of conflict and maintain discipline in a line organization.
However, due to the hierarchy management model was developed in industrial age, the system of
decision makers, executives, managers and employees worked well when the companies
operated in relative isolation from the rest of world and manufactured physical products. By
contrast, today increasing number companies become globalized, they not only produce physical
products but also sell ideas, which would encounter disadvantages when using traditional
management model.
Because the traditional organization has many layers of management, all the people need time to
weigh up and coordinate the issues, it would be taken long time to make decision, therefore
many managers may feel their opinions is being ignored. Moreover, in terms of interpersonal
communication, the message easily get distortion when directives move through a traditional
hierarchy organization. Because each supervisor or manger may interpret the words in different
way, until the message reach employees, it may be different from the original intention.
Furthermore, in terms of manager competence, in traditional management model, the authority is
assigned to the position rather than the individual, which require constant check the effectiveness
of individuals in various positions to see if they have actual ability to fulfill the job. In addition,
the traditional management likely pay more attention to company’s goals and objectives,
emphasis increasing sales or profits to please the shareholders, which may lead the company
neglect social responsibility and business sustainable development.
Modern Organization Management
In order to suit for rapid innovation and growing technology industry, the modern organization
management more focus on networking and collaborating, emphasized on dynamic nature of
communication and importance of integration of individual and organizational interests, which largely
depends on soft skill development such as consensus building, tacit knowledge, experience, learning,
intuition, self-confidence, flexibility, prioritization of problems, working under pressure and ambiguity
tolerance.
Comparing Traditional and Modern Management models
The main difference between traditional organization and modern organization in several aspects.
Stability: Traditional organizations usually are stable in business activities and progress, while modern
organizations are more dynamic with multiple business strategy, which need multiple process to deal with
constant changes.
Flexibility: In traditional organization, its structure is usually fixed, the strategy is planned, and the
management is inflexible. While the modern organization, they need always improve the workflow,
update its competitive edges, and the employees are required to promote the skills and knowledge to
connect with the market and changings.
Teamwork: The flow of traditional business is ‘tall hierarchy’, which focus on individual
responsibility and obey to his superior, while modern one is ‘flat hierarchy’, which more focus on
teamwork and cooperation, its collaborative working mode would more conducive to brainstorming and
help the companies improve work efficiency and make marketing strategy.
Stimulate morale: Modern organization management enable employees give more freedom and
flexibility to fulfill their works, which are beneficial to mobilize enthusiasm of the staffs.
Management policy: In traditional business, the management policies are conservative, which
usually follow traditional rules and regulation, make static workflow model to maintain business strategy
and employee management system. While modern management model would do modification such as
rescheduling, flexible entity management, dynamic business strategy.
Classical management theory
Classical management theory is the oldest management theory. First coined in the industrial age,
this theory seeks to create standards to increase production output. It considers compensation to
be the major motivation of employees. Thus, a leader that implements this strategy will reward
high-performing team members with incentives, such as wages and bonuses, as a means to boost
output.
There are three primary theories that comprise the classical management theory:
Scientific management theory
In the early 1900s, Frederick Taylor performed controlled experiments to measure his workers'
productivity. He found that a scientific approach was the most accurate predictor of efficiency in
the workplace. His research formed the basis of the scientific management theory. It put great
emphasis on the following three principles:
 Standardization
 Specialization
 Supervision
Managers who use this theory seek to improve productivity by assigning tasks based on ability
and providing adequate training to streamline the work process.
Administrative management theory
The administrative management theory uses a top-down management approach. It highlights that
leaders in the workplace have six major responsibilities. They include:
Organization: Managers need to set goals and objectives for team members to follow.
Command: They need to effectively communicate expectations to their team.
Control: Leaders should supervise workers to ensure they remain on target.
Coordinate: They need to distribute financial and labor resources so that individuals can meet
their objectives.
Plan: Leaders should work on the larger picture. They need to create a detailed plan that uses the
resources available to them strategically.
Forecast: Managers should have good foresight to identify potential problems and assign
achievable deadlines.
Bureaucracy theory
The bureaucracy theory emphasizes structuring a business in a hierarchy with clearly defined
roles and responsibilities. According to the theory, organization’s that operate efficiently,
implement the following aspects:

Hierarchal chain of command

 Clear division of labor
 Consistent rules and regulations
 Hiring and promotion based on qualifications and performance
Behavioral management theories
After the industrial revolution, management theories moved from an output-centric approach to a
more people-oriented strategy. It gave rise to behavioral management theories that were
concerned with addressing the interpersonal needs of professionals. Leaders shifted their focus
from external to internal rewards, such as promoting a collaborative atmosphere or encouraging
employees to take on projects that fit their personal development goals.
Here are three types of behavioral management theories:
Human relations theory
The human relations theory was developed to improve the productivity of dissatisfied
employees. Psychologist Elton Mayo tried a variety of techniques to test how the environment
contributed to job satisfaction, such as lighting, temperature and break time. He discovered that
all three variables had a significant impact on the mood and outlook of employees. However, the
factor that made the most difference to worker satisfaction was the attention researchers gave to
workers.
The human relations theory suggests that no matter the working conditions, professionals are
more likely to feel satisfied and perform better if their supervisors value their effort. It states that
people respond more to social factors, such as personal attention or being part of a group, than
environmental factors, such as compensation.
Behavioral science theory
The behavioral science theory focuses on the psychological and sociological processes that
influence employee performance. It explains how three concepts interact in a socially charged
work environment:
Information processing describes how people process stimuli in their environment.
Relationships in behavioral science are composed of interactions, communication networks and
associations between co-workers.
Organizational development is an ongoing, systematic process of implementing effective
organizational change.
The behavioral science theory believes that every team member has an important role in an
organization’s culture. If a manager understands how a professional views the world and how
they prefer to interact with others, they can then successfully motivate them to contribute to
organizational development.
Theory X and Y
Theory X and Y outline two distinct styles of management. Each style is determined by a leader's
perceptions and a follower's motivations.
Theory X takes the stance that professionals are not invested in their work. Supervisors who
adhere to theory X are usually authoritarian and tend to micromanage their team members. It
shows their lack of trust in their co-workers, explaining how toxic culture takes hold in
workplaces.
Theory Y assumes professionals are self-motivated. Managers with this approach believe their
team members are responsible and can contribute to the decision-making process. This style of
management encourages innovation and creativity.
Modern management theories
Modern management theories aim to combine traditional and human management theories so
that they are relevant in the workplace today. It uses mathematical techniques to analyze the
relationship between managers and employees. The theory recognizes that employees don't work
for money alone; instead, they work for happiness and a desire to grow.
Organizations are constantly encountering change and need to find novel ways to deal with
volatility. Technology is both the cause and solution to this dilemma. Here are three types of
modern management theories that balance both scientific and social variables in the workplace:
5)write the difference between theory-x, theory-y and theory-z management
approach and a real examples for each theory with related to any manufacturing
industry?
Theory X
According to McGregor, Theory X management assumes the following:
o Work is inherently distasteful to most people, and they will attempt to avoid work
whenever possible.
o Most people are not ambitious, have little desire for responsibility, and prefer to be
directed.
o Most people have little aptitude for creativity in solving organizational problems.
o Motivation occurs only at the physiological and security levels of Maslow's hierarchy of
needs.
o Most people are self-centered. As a result, they must be closely controlled and often
coerced to achieve organizational objectives.
o Most people resist change.
o Most people are gullible and unintelligent.

Essentially, Theory X assumes that the primary source of employee motivation is monetary, with
security as a strong second. Under Theory X, one can take a hard or soft approach to getting
results.
The hard approach to motivation relies on coercion, implicit threats, micromanagement, and tight
controls— essentially an environment of command and control. The soft approach, however, is
to be permissive and seek harmony in the hopes that, in return, employees will cooperate when
asked. However, neither of these extremes is optimal. The hard approach results in hostility,
purposely low output, and extreme union demands. The soft approach results in a growing desire
for greater reward in exchange for diminished work output.
It might seem that the optimal approach to human resource management would lie somewhere
between these extremes. However, McGregor asserts that neither approach is appropriate, since
the basic assumptions of Theory X are incorrect.
Example about theory X
Managers in high-pressure, high-output organisations will tend towards Theory X in order to
achieve company goals as efficiently as possible. For example, a manager – let's call them 'X' –
needs to reach a certain level of output for their department per month. Anything above this base
level output will gain X a bonus.
Theory Y
The higher-level needs of esteem and self-actualization are ongoing needs that, for most people,
are never completely satisfied. As such, it is these higher-level needs through which employees
can best be motivated.
In strong contrast to Theory X, Theory Y management makes the following assumptions:
Work can be as natural as play if the conditions are favorable.
People will be self-directed and creative to meet their work and organizational objectives if they
are committed to them.
People will be committed to their quality and productivity objectives if rewards are in place that
address higher needs such as self-fulfillment.
The capacity for creativity spreads throughout organizations.
Most people can handle responsibility because creativity and ingenuity are common in the
population.
Under these conditions, people will seek responsibility.
Under these assumptions, there is an opportunity to align personal goals with organizational
goals by using the employee's own need for fulfillment as the motivator. McGregor stressed that
Theory Y management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by
Theory Y and may initially need tighter controls that can be relaxed as the employee develops.
If Theory Y holds true, an organization can apply the following principles of scientific
management to improve employee motivation:
Decentralization and delegation: If firms decentralize control and reduce the number of levels of
management, managers will have more subordinates and consequently need to delegate some
responsibility and decision making to them.
Job enlargement: Broadening the scope of an employee's job adds variety and opportunities to
satisfy ego needs.
Participative management: Consulting employees in the decision-making process taps their
creative capacity and provides them with some control over their work environment.
Performance appraisals: Having the employee set objectives and participate in the process of
self-evaluation increases engagement and dedication.
Example about theory Y
Just like Theory X, Theory Y has good and bad points – for example, some employees will be
motivated by the freedom, but others might take advantage of Y's trust and not contribute to the
project equally. Example: Kalani is a nursery manager in a childminding
Theory Z
Theory Z stresses the need to help workers become generalists, rather than specialists. It views
job rotations and continual training as a means of increasing employees' knowledge of the
company and its processes while building a variety of skills and abilities. Since workers are
given much more time to receive training, rotate through jobs, and master the intricacies of the
company's operations, promotions tend to be slower. The rationale for the drawn-out time frame
is that it helps develop a more dedicated, loyal, and permanent workforce, which benefits the
company; the employees, meanwhile, have the opportunity to fully develop their careers at one
company. When employees rise to a higher level of management, it is expected that they will use
Theory Z to "bring up," train, and develop other employees in a similar fashion.
Theory Z also makes assumptions about company culture. If a company wants to realize the
benefits described above, it need to have the following:
 A strong company philosophy and culture: The company philosophy and culture need to
be understood and embodied by all employees, and employees need to believe in the
work they're doing.
 Long-term staff development and employment: The organization and management team
need to have measures and programs in place to develop employees. Employment is
usually long-term, and promotion is steady and measured. This leads to loyalty from team
members.
 Consensus in decisions: Employees are encouraged and expected to take part in
organizational decisions.
 Generalist employees: Because employees have a greater responsibility in making
decisions and understand all aspects of the organization, they ought to be generalists.
However, employees are still expected to have specialized career responsibilities.
Examples about theory Z
 Longer-term secure employment.
 Co-operative relationships between employers and employees.
 Consensual management and decision making.
 Measured evaluation and promotion procedures.
 Adequate training and job rotation.
 Personal responsibility within a group setting.
 Respect for family life, culture and traditions.
6) Summarize the management function with 4-5 pages?
Functions of Management
  Management in some form or another is an integral part of living and is essential
wherever human efforts are to be undertaken to achieve desired objectives. The basic
ingredients of management are always at play, whether we manage our lives or business.
 “Management is a set of principles relating to the functions of planning, organizing,
directing, and controlling, and the applications of these principles in harnessing physical,
financial, human, and informational resources efficiently and effectively to achieve
organizational goals”.
 Functions of management help you stay informed about what you need to do and how so
that you can guide your staff accordingly. Management experts like Fayol and Gulick
explain the functions of management to equip yourself with the right skills to become an
accomplished manager.
 Let’s say that you’re in the planning stage of your managerial process. This means that
you’ll first assess your goals, define your purpose and visualize what needs to be done.
This requires the ability to interpret historical data, evaluate current trends and develop
strategies for the future. Each function is successful if you can reach your destination
without problems like surpassing your budget or missing deadlines.

Management is essential for an organized life and necessary to run all types of organizations.
Managing life means getting things done to achieve life’s objectives and managing an
organization means getting things done with and through other people to achieve its objectives.
There are basically five primary functions of management. These are:
1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling
The controlling function comprises coordination, reporting, and budgeting, and hence the
controlling function can be broken into these three separate functions. Based upon these seven
functions, Luther Gulick coined the word POSDCORB, which generally represents the initials of
these seven functions i.e. P stands for Planning, O for Organizing, S for Staffing, D for
Directing, Co for Co-ordination, R for reporting & B for Budgeting.
But, Planning, Organizing, Staffing, Directing, and Controlling are widely recognized functions
of management.
Five Functions of Management
1. Planning
Planning is future-oriented and determines an organization’s direction. It is a rational and
systematic way of making decisions today that will affect the future of the company. It is a kind
of organized foresight as well as corrective hindsight. It involves predicting of the future as well
as attempting to control the events. It involves the ability to foresee the effects of current actions
in the long run in the future.
Peter Drucker has defined planning as follows:
“Planning is the continuous process of making present entrepreneurial decisions systematically
and with best possible knowledge of their futurity, organizing systematically the efforts needed
to carry out these decisions and measuring the results of these decisions against the expectations
through organized and systematic feedback”.
An effective planning program incorporates the effect of both external as well as internal factors.
The external factors are shortages of resources; both capital and material, general economic trend
as far as interest rates and inflation are concerned, dynamic technological advancements,
increased governmental regulation regarding community interests, unstable international political
environments, etc.
The internal factors that affect planning are limited growth opportunities due to saturation
requiring diversification, changing patterns of the workforce, more complex organizational
structures, decentralization, etc
2. Organizing
Organizing requires a formal structure of authority and the direction and flow of such authority
through which work subdivisions are defined, arranged and coordinated so that each part
Relates to the other part in a united and coherent manner so as to attain the prescribed objectives.
According to Henry Fayol, “To organize a business is to provide it with everything useful or its
functioning i.e. raw material, tools, capital and personnel’s”.
Thus the function of organizing involves the determination of activities that need to be done in
order to reach the company goals, assigning these activities to the proper personnel, and
delegating the necessary authority to carry out these activities in a coordinated and cohesive
manner.
It follows, therefore, that the function of organizing is concerned with:
1. Identifying the tasks that must be performed and grouping them whenever necessary
2. Assigning these tasks to the personnel while defining their authority and responsibility.
3. Delegating this authority to these employees
4. Establishing a relationship between authority and responsibility
5. Coordinating these activities
3. Staffing
Staffing is the function of hiring and retaining a suitable work-force for the enterprise both at
managerial as well as non-managerial levels. It involves the process of recruiting, training,
developing, compensating and evaluating employees and maintaining this workforce with proper
incentives and motivations. Since the human element is the most vital factor in the process of
management, it is important to recruit the right personnel.
According to Kootz & O’Donnell, “Managerial function of staffing involves manning the
organization structure through the proper and effective selection, appraisal & development of
personnel to fill the roles designed in the structure”.
This function is even more critically important since people differ in their intelligence,
knowledge, skills, experience, physical condition, age and attitudes, and this complicates the
function. Hence, management must understand, in addition to the technical and operational
competence, the sociological and psychological structure of the workforce.
4. Directing
The directing function is concerned with leadership, communication, motivation, and supervision
so that the employees perform their activities in the most efficient manner possible, in order to
achieve the desired goals.
The leadership element involves issuing of instructions and guiding the subordinates about
procedures and methods.
The communication must be open both ways so that the information can be passed on to the
subordinates and the feedback received from them.
Motivation is very important since highly motivated people show excellent performance with
less direction from superiors.
Supervising subordinates would lead to continuous progress reports as well as assure the
superiors that the directions are being properly carried out.
5. Controlling
The function of control consists of those activities that are undertaken to ensure that the events
do not deviate from the pre-arranged plans. The activities consist of establishing standards for
work performance, measuring performance and comparing it to these set standards and taking
corrective actions as and when needed, to correct any deviations.
According to Koontz & O’Donnell, “Controlling is the measurement & correction of
performance activities of subordinates in order to make sure that the enterprise objectives and
plans desired to obtain them as being accomplished”.
The controlling function involves:
a. Establishment of standard performance.
b. Measurement of actual performance.
c. Measuring actual performance with the pre-determined standard and finding out the
deviations.
d. Taking corrective action.
All these five functions of management are closely interrelated. However, these functions are
highly indistinguishable and virtually unrecognizable on the job. It is necessary, though, to put
each function separately into focus and deal with it.
7) List and discuss the general principle of management?
14 Principles of Management: this article explains the administrative theory and management
theory of the 14 Principles of Management by Henri Fayol in a practical way. After reading you
will understand the basics of this powerful management tool.
The 14 principles of Management of Henri Fayol are:
1) Division of Work
2) Authority and Responsibility
3) Discipline
4) Unity of Command
5) Unity of Direction
6) Subordination of Individual Interest
7) Remuneration
8) The Degree of Centralization
9) Scalar Chain
10) Order
11) Equity
12) Stability of Tenure of Personnel
13) Initiative
14) Esprit de Corps
1. Division of Work
In practice, employees are specialized in different areas and they have different skills. Different
levels of expertise can be distinguished within the knowledge areas (from generalist to
specialist).
Personal and professional developments support this. According to Henri Fayol specialization
promotes efficiency of the workforce and increases productivity. In addition, the specialization
of the workforce increases their accuracy and speed. This management principle of the 14
principles of management is applicable to both technical and managerial activities.
2. Authority and Responsibility
In order to get things done in an organization, management has the authority to give orders to the
employees. Of course with this authority comes responsibility. According to Henri Fayol, the
accompanying power or authority gives the management the right to give orders to the
subordinates.
The responsibility can be traced back from performance and it is therefore necessary to make
agreements about this. In other words, authority and responsibility go together and they are two
sides of the same coin.
3. Discipline
This third principle of the 14 principles of management is about obedience. It is often a part of
the core values of a mission statement and vision in the form of good conduct and respectful
interactions. This management principle is essential and is seen as the oil to make the engine of
an organization run smoothly.
4. Unity of Command
The management principle ‘Unity of command’ means that an individual employee should
receive orders from one manager and that the employee is answerable to that manager.
If tasks and related responsibilities are given to the employee by more than one manager, this
may lead to confusion which may lead to possible conflicts for employees. By using this
principle, the responsibility for mistakes can be established more easily.
5. Unity of Direction
This management principle of the 14 principles of management is all about focus and unity. All
employees deliver the same activities that can be linked to the same objectives. All activities
must be carried out by one group that forms a team. These activities must be described in a plan
of action.
The manager is ultimately responsible for this plan and he monitors the progress of the defined
and planned activities. Focus areas are the efforts made by the employees and coordination.
6. Subordination of Individual Interest
There are always all kinds of interests in an organization. In order to have an organization
function well, Henri Fayol indicated that personal interests are subordinate to the interests of the
organization (ethics).
The primary focus is on the organizational objectives and not on those of the individual. This
applies to all levels of the entire organization, including the managers.
7. Remuneration
Motivation and productivity are close to one another as far as the smooth running of an
organization is concerned. This management principle of the 14 principles of management
argues that the remuneration should be sufficient to keep employees motivated and productive.
There are two types of remuneration namely non-monetary (a compliment, more responsibilities,
credits) and monetary (compensation, bonus or other financial compensation). Ultimately, it is
about rewarding the efforts that have been made.
8. The Degree of Centralization
Management and authority for decision-making process must be properly balanced in an
organization. This depends on the volume and size of an organization including its hierarchy.
Centralization implies the concentration of decision making authority at the top management
(executive board). Sharing of authorities for the decision-making process with lower levels
(middle and lower management), is referred to as decentralization by Henri Fayol. Henri Fayol
indicated that an organization should strive for a good balance in this.
9. Scalar Chain
Hierarchy presents itself in any given organization. This varies from senior management
(executive board) to the lowest levels in the organization. Henri Fayol ’s “hierarchy”
management principle states that there should be a clear line in the area of authority (from top to
bottom and all managers at all levels).
This can be seen as a type of management structure. Each employee can contact a manager or a
superior in an emergency situation without challenging the hierarchy. Especially, when it
concerns reports about calamities to the immediate managers/superiors.
10. Order
According to this principle of the 14 principles of management, employees in an organization
must have the right resources at their disposal so that they can function properly in an
organization. In addition to social order (responsibility of the managers) the work environment
must be safe, clean and tidy.
11. Equity
The management principle of equity often occurs in the core values of an organization.
According to Henri Fayol, employees must be treated kindly and equally.
Employees must be in the right place in the organization to do things right. Managers should
supervise and monitor this process and they should treat employees fairly and impartially.
12. Stability of Tenure of Personnel
This management principle of the 14 principles of management represents deployment and
managing of personnel and this should be in balance with the service that is provided from the
organization.
Management strives to minimize employee turnover and to have the right staff in the right place.
Focus areas such as frequent change of position and sufficient development must be managed
well.
13. Initiative
Henri Fayol argued that with this management principle employees should be allowed to express
new ideas. This encourages interest and involvement and creates added value for the company.
Employee initiatives are a source of strength for the organization according to Henri Fayol. This
encourages the employees to be involved and interested.
14. Esprit de Corps
The management principle ‘esprit de corps’ of the 14 principles of management stands for
striving for the involvement and unity of the employees. Managers are responsible for the
development of morale in the workplace; individually and in the area of communication.
Esprit de corps contributes to the development of the culture and creates an atmosphere of
mutual trust and understanding.
8) List and explain each types of depart-mentation in management? And give a
brief example?
Types of Depart -mentation
There are several bases of Depart- mentation. The more commonly used bases are— function,
product, territory, process, customer, time etc.
These are explained below:
(A) Depart- mentation by Functions
The enterprise may be divided into departments on the basis of functions like production,
purchasing, sales, financing, personnel etc. This is the most popular

basis of depart- mentation. If necessary, a major function may be divided into sub-functions. For
example, the activities in the production department may be classified into quality control,
processing of materials, and repairs and maintenance.
Advantages
The advantages of functional depart -mentation includes the following:
· It is the most logical and natural form of depart -mentation.
·It ensures the performance of all activities necessary for achieving the organizational objectives.
· It provides occupational specialization which makes optimum utilization of manpower.
· It facilitates delegation of authority.
Disadvantages:
There are some problems associated with functional depart- mentation. These are mentioned
below:
·There may be conflicts between departments.
·The scope for management development is limited. Functional managers do not get training for
top management positions. The responsibility for results cannot be fixed on any one functional
head.
EXAMPLE
In functional departmentalization, an organization is organized into departments based upon the
respective functions each performs for the organization. For example, a manufacturing company
may create a production department, sales and marketing department, an accounting department,
and a human resources department.
·There is too much emphasis on specialization.
(B) Depart- mentation by Products
In product depart-mentation, every major product is organized as a separate department. Each
department looks after the production, sales and financing of one product. Product depart-
mentation is useful when the expansion, diversification, manufacturing and marketing
characteristics of each product are primarily significant.
It is generally used when the production line is complex and diverse requiring specialized
knowledge and huge capital is required for plant, equipment and other facilities such as in
automobile and electronic industries.

Advantages:
Product depart- mentation provides several advantages which may be stated as follows:
1. Product depart -mentation focuses individual attention to each product line which facilitates
the expansion and diversification of the products.
2. It ensures full use of specialized production facilities. Personal skill and specialized
knowledge of the production managers can be fully utilized.
3. The production managers can be held accountable for the profitability of each product. Each
product division is semi-autonomous and contains different functions. So, product depart-
mentation provides an excellent training facility for the top managers.
Disadvantages
Product depart mentation presents some problems as follows:
1. It creates the problem of effective control over the product divisions by the top managers.
2. Each production manager asserts his autonomy disregarding the interests of the organization.
3. The advantages of centralization of certain activities like financing, and accounting are not
available
EXAMPLES
LA Gear is an example of company that uses product departmentalization. Its structure is based
on its varied product lines which include women's footwear etc. Customer departmentalization -
Grouping activities on the basis of common customers or types of customers.
(C) Depart mentation by Territory
Territorial or geographical depart mentation is specially useful to large -scale enterprises whose
activities are widely dispersed. Banks, insurance companies, transport companies, distribution
agencies etc, are some examples of such enterprises, where all the activities of a given area of
operations are grouped into zones, branches, divisions etc.

Advantages
Territorial depart mentation offers certain facilities in operation. These are pointed out below:
· Every regional manager can specialize himself in the peculiar problems of his region.
· It facilitates the expansion of business to various regions.
· It helps in achieving the benefits of local operations. The local managers are more familiar with
the local customs, preferences, styles, fashion, etc. The enterprise can gain intimate knowledge
of the conditions in the local markets.
Disadvantages
Territorial depart mentation have the following problems:
· There is the problem of communication.
· It requires more managers with general managerial abilities. Such managers may not be always
available.
· There may be conflict between the regional managers.
· Co-ordination and control of different branches from the head office become less effective.
EXAMPLE
Departmentalization by territory method of departmentalization is appropriate for those
organizations that involve in business activities in different geographical locations, like the
insurance company, bank, transport company, chain store, or a product that is distributed
throughout the nation.
(D) Depart mentation by Customers
In such method of depart mentation, the activities are grouped according to the type of
customers. For example, a large cloth store may be divided into wholesale, retail, and export
divisions. This type of depart mentation is useful for the enterprises which sell a product or
service to a number of clearly defined customer groups. For instance, a large readymade garment
store may have a separate department each for men, women, and children. A bank may have
separate loan departments for large-scale and small- scale businessmen.

Advantages
The important advantages of customer depart mentation are the following:
· Special attention can be given to the particular tastes and preferences of each type of customer.
· Different types of customers can be satisfied, easily through specialized staff. Customers’
satisfaction enhances the goodwill and sale of the enterprise.
Disadvantages:
This method of depart mentation may have certain disadvantages, especially when it is followed
very rigidly. These are as follows:
· Co-ordination between sales and other functions becomes difficult because this method can be
followed only in marketing division.
· There may be under-utilization of facilities and manpower in some departments, particularly
during the period of low demand.
EXAMPLE
For example, full-time and part-time students of graduate and post-graduate business programs
in colleges and universities generally are different in personal needs and demographic profile.
Usually, full-time students attend classes in day shifts and part-time students attend classes in
evening or night shifts.

(E) Depart mentation by Process or Equipment

In such type or depart mentation the activities are grouped on the basis of production processes
involved or equipment used. This is generally used in manufacturing and distribution enterprises
and at lower levels of organisation. For instance, a textile mill may be organised into ginning,
spinning, weaving, dyeing and finishing departments. Similarly, a printing press may have
composing, proof reading, printing and binding departments. Such depart mentation may also be
employed in engineering and oil industries.

Advantages:
The basic object of such depart mentation is to achieve efficiency and economy of operations.
The processes are set in such a way that a series of operations is feasible making operations
economic. Efficiency can be achieved if departments are created for each process as each one has
its peculiarities.
It provides the advantages of specialization required at each level of the total processes. The
maintenance of plant can be done in better way and manpower can be utilized effectively.

Disadvantages
In such depart mentation; there may be difficulty in coordinating the different process-
departments, because the work of each process depends fully on the prece ding process. So, there
are chances of conflicts among the managers looking after the different processes. It cannot be
used where manufacturing activity does not involve distinct processes.
EXAMPLE
Process departmentalization allows homogenous activities to be categorize in which each process
requires different skills. For Example: When we go to hospital for surgery, first we go to
reception for admitting process, then undergo a procedure in surgery, receive operative care, and
then get discharge.
(F) Depart mentation by Time and Numbers
Under this method of depart mentation the activities are grouped on the basis of the time of their
performance. For instance, a factory operating 24 hours may have three departments for three
shifts—one for the morning, the second for the day, and the third for the night.
In the case of depart mentation by numbers, the activities are grouped on the basis of their
performance by a certain number of persons. For instance, in the army, the soldiers are grouped
into squads, companies, battalions, regiments and brigades on the basis of the number
prescribed for each unit.
Such type of depart mentation is useful where the work is repetitive, manpower is an important
factor, group efforts are more significant than individual efforts, and group performance can be
measured. It is used at the lowest level of organisation.
Examples of depart-mentation
In functional departmentalization, an organization is organized into departments based upon the
respective functions each performs for the organization. For example, a manufacturing company
may create a production department, sales and marketing department, an accounting department,
and a human resources department.
EXAMPLES
Depart mentation by Time: This method is one of the oldest forms of depart mentation and is
used at the lower levels of management. It involves the grouping of activities on the basis of the
time of their performance.
9) What is leader ship style? List and discuss briefly each type of leadership
styles?
Leadership styles refer to the behavioral approach employed by leaders to influence, motivate,
and direct their followers. A leadership style determines how leaders implement plans and
strategies to accomplish given objectives while accounting for stakeholder expectations and the
wellbeing and soundness of their team.
Leadership styles have been studied in various fora to establish the appropriate or most effective
leadership style that motivates and influences others to accomplish set goals. The major tenet of
effective leadership style is the degree to which it builds follower trust.
Types of leadership style:
1. Transactional Leadership
Transactional leadership is a term used to classify a group of leadership theories that inquire the
interactions between leaders and followers. This style of leadership starts with the premise that
team members agree to obey their leader totally when they take a job on. The “transaction” is
usually that the organization pays the team members, in return for their effort and compliance.
As such, the leader has the right to “punish” team members if their work doesn’t meet the pre-
determined standard. Team members can do little to improve their job satisfaction under
transactional leadership. The leader could give team members some control of their
income/reward by using incentives that encourage even higher standards or greater productivity.
2. Autocratic Leadership
Under the autocratic leadership styles, all decision-making powers are centralized in the leader as
shown such leaders are dictators. Autocratic leadership is an extreme form of transactional
leadership, where a leader exerts high levels of power over his or her employees or team
members. People within the team are given few opportunities for making suggestions, even if
these would be in the team’s or organization’s interest.
3. Transformational Leadership
responsibility amongst their teams. While their enthusiasm is often infectious, they can need to be
supported by “detail people Transformational leadership is a leadership style that is defined as
leadership that creates valuable and positive change in the followers. A transformational leader
focuses on “transforming” others to help each other, to look out for each other, to be encouraging
and harmonious, and to look out for the organization as a whole. In this leadership, the leader
enhances the motivation, morale and performance of his follower group. A person with this
leadership style is a true leader who inspires his or her team with a shared vision of the future.
Transformational leaders are highly visible, and spend a lot of time communicating. They don’t
necessarily lead from the front, as they tend to delegate”.
4. Servant Leadership
This term, coined by Robert Greenleaf in the 1970s, describes a leader who is often not formally
recognized as such. When someone, at any level within an organization, leads simply by virtue
of meeting the needs of his or her team, he or she is described as a “servant leader”. Servant
Leadership’s focus was on the leader as a servant, with his or her key role being in developing,
enabling and supporting team members, helping them fully develop their potential and deliver
their best. In many ways, servant leadership is a form of democratic leadership, as the whole
team tends to be involved in decision-making.
5. Charismatic Leadership
The Charismatic Leader and the Transformational Leader can have many similarities, in that the
Transformational Leader may well be charismatic. Their main difference is in their basic focus.
Whereas the Transformational Leader has a basic focus of transforming the organization and,
quite possibly, their followers, the Charismatic Leader may not want to change anything. A
charismatic leadership style can appear similar to a transformational leadership style, in that the
leader injects huge doses of enthusiasm into his or her team, and is very energetic in driving
others forward.
6. Democratic Leadership or Participative Leadership
Although a democratic leader will make the final decision, he or she invites other members of
the team to contribute to the decision-making process. This not only increases job satisfaction by
involving employees or team members in what’s going on, but it also helps to develop people’s
skills. Employees and team members feel in control of their own destiny, and so are motivated to
work hard by more than just a financial reward. Democratic leadership can produce high quantity
work for long periods of time. Many employees like the trust they receive and respond with
cooperation, team spirit, and high morale.
7. Laissez-Faire Leadership
The laissez-faire leadership style is also known as the “hands-off ¨ style. It is one in which the
manager provides little or no direction and gives employees as much freedom as possible. All
authority or power is given to the employees and they must determine goals, make decisions, and
resolve problems on their own.
8. Bureaucratic Leadership
This is style of leadership that emphasizes procedures and historical methods regardless of their
usefulness in changing environments. Bureaucratic leaders attempt to solve problems by adding
layers of control, and their power comes from controlling the flow of information. Bureaucratic
leaders work “by the book”, ensuring that their staff follow procedures exactly. This is a very
appropriate style for work involving serious safety risks such as working with machinery, with
toxic substances, at heights or where large sums of money are involved such as cash-handling.
10) One of the fundamental skills of managers is communication. So discuss
briefly with example about it: concepts, importance, process and classification?
(By using a statement, chart and diagram etc.)

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.
Why are communication skills for managers important?
Communication skills for managers are important because these abilities make the smooth
exchange of information possible. To handle a team competently, exchanging information is
essential. This is why communication, which is the process of doing so, is one of the most
important job duties of a manager. For example, to manage a team successfully, a manager must
inform their team of objectives, assign workers tasks to achieve these targets, track task progress,
identify issues in performance and logistics, make any necessary changes to support the activities
of workers, and keep everyone motivated and engaged.
To competently perform these duties, which are included in the job demands of a majority of
managers, communication skills are essential. By boosting these abilities, a manager or an
aspiring manager can gain several benefits:
 Achieving productivity improvements. Companies are always looking for ways to
accelerate their productivity. Engaged employees have been found to fuel
increases in productivity. In an organization, a superior’s inability to exchange
information competently is likely to reduce the motivation of workers and make
them less committed to their occupation.
  Improving the company culture. An organization’s culture is comprised of the
behaviors of its people, which should reflect the company’s values. Consequently,
company culture plays a key role in the experience of workers, influencing their
happiness, satisfaction, motivation, and engagement.
There are many interdependent abilities that comprise communication skills, which are a type of
interpersonal skills. Every professional in a managerial position should possess the following
communication-based skill set:
 Empathy: Empathizing with each recipient of your communication, which involves trying to
assess what you’re saying from their perspective, helps you to spot instances of
unprofessionalism, miscommunication, or obtuseness in information exchanges and correct them.
 Active listening: This skill involves the ability to listen to what another person says, understand
it, and communicate your interest in it. An active listener tends to have more productive
conversations than others because they better engage the people with whom they communicate.
 Discipline: Discipline is a key communication skill because it enables you to express yourself
well without getting distracted by unimportant things.
 Accuracy: In communication, being accurate is important because it builds understanding and
trust in your audience.
 Nonverbal communication: Nonverbal communication, which involves the information you
convey with your posture, facial expressions, and other types of body language, should support
your verbal and written ideas instead of opposing them.
 Verbal communication: This skill, which relates to exchanging information verbally, is used by
managers frequently during both informal and formal communications.
 Written communication: With the increasing contribution of remote workers and the use of new
technologies, managers are using more written communication, which can include emails, texts,
The Basic Communication Model or chats.

Encoding and Decoding

11) The staffing process have been represents by the following eight activities or
steps. So discuss each steps in detail? These are :human resource planning;
recruitment; selection; orientation and induction; training and development;
performance appraisal; transfer (promotion, lateral transfer) and separation.
Step # 1. Manpower Planning:
Manpower planning is the “process of determining human resource needs relative to an
organization’s strategic plan and devising steps necessary to meet those needs.” It plans the
organizational requirement of manpower.
It involves “comparing the organization’s forecasted personnel needs with the number and the
skills of its present and anticipated labor supply.” It forecasts the requirement of manpower at
various posts so that right persons with right skills can be appointed and placed at the right jobs.
Steps in Manpower Planning:
Manpower planning involves the following steps:
1. Ascertain the requirement of manpower:
The demand for manpower is the first step in manpower planning.
The demand can be known by:
(a) Determining the factors that affect the demand for manpower, and
(b) Using forecasting techniques to predict the demand.
(a) Factors affecting the demand for manpower:
The major factors that affect demand for manpower are:
(i) Environment:
The environmental changes like Government policies or customer preferences may require
change in the nature of goods and services of the firms and, therefore, change in the manpower
requirement to produce new or altered goods/services.
(ii) Organizational requirements:
Changes in plans and policies of the organization may result in change in the manpower
requirement.
(iii) Changes in the internal labor force:
When the existing labor resigns or retires or remains absent from duty, managers have to assess
the need for manpower to fill the vacant posts.
(b) Forecasting techniques to predict the demand:
Human resource forecasting means predicting the demand for manpower. It assesses the need for
manpower in future so that organization can effectively accomplish its goals. The future sales,
expansion of the product line or deletion of any product from the product line, changes in
consumer preferences or technology, labor turnover rate are some of the factors that affect
making forecasts about the manpower requirement.
Some of the techniques for forecasting the manpower requirement are as follows:
(a) Judgmental forecasting:
The forecasts are made by managers on the basis of their experience and judgment.
(b) Quantitative forecasting:
Mathematical models through computers are used for forecasting the requirement of manpower.
(c) Qualitative forecasting:
The need for manpower depends upon the changes that will take place in future technology or
other environmental factors.
2. Ascertain the present position:
After the manpower requirement is ascertained, the next step is to find out the number of people
presently employed with the firm. Managers conduct human resource audit to assess their current
work force. A human resource audit ranks individuals in each department according to their
competence so that top managers are aware of the skilled workers present in the organization.
It is an audit of the skills and competence of the existing employees. It enables managers to
know the extent to which manpower requirement can be filled through internal sources of labor
supply.
Supplying manpower from internal sources can take three forms:
(a ) Employees skills inventory:
(b) Replacement chart:
When managerial position is created at the retirement of existing manager, the replacement chart
helps to find manager to fill the vacant post. Replacement chart is a “partial organization chart
showing the major managerial positions in an organization, current incumbents, potential
replacements for each position, and the age of each person on the chart.”
(c) Succession plans:
These plans develop future middle and top-level managers by identifying people who can
succeed their superiors. All such individuals are trained so that organization has a reservoir of
skilled manpower who can be promoted as managers to senior posts.
3. Identification of manpower gap:
Manpower gap is the difference between the people required and those available at a point of
time. After forecasting the quantity and quality of people required and comparing it with those
available in the organization, two outcomes can be possible;
(1) Surplus manpower, or
(2) Shortage of manpower.
Surplus manpower:
It arises when number of people required is less than the number available. Plans are made to
deal with surplus manpower through voluntary retirement scheme (VRS), downsizing, less
working hours etc.
Shortage of manpower:
If difference between the manpower requirement and present manpower is positive, i.e., number
of people required is more than the number of people available, managers follow the recruitment,
selection and development procedure to appoint and place people required at the jobs.
4. Development of Personnel:
After selection, managers train the manpower according to job requirement and place them on
the jobs where their potential can be fully exploited. Development provides job satisfaction to
employees and aims to integrate individual goals with organizational goals.
Step # 2. Recruitment:
After determining the need for manpower, if the present manpower is unable to fill this
requirement, managers hire people from outside. Applications are invited for the required posts.
The process of inviting applications is known as recruitment.
Step # 3. Selection:
After receiving job applications, the next step is to select the person most appropriate for the job.
Selection means appointment of a person at the particular post. “It is the process of filling the
organizational position.”
Step # 4. Induction and Orientation:
After accepting the job offer, it is important that individual’s expectations from the organization
and organization’s expectations from the individual match each other. On joining, employees
want to know their superiors, co-workers, organization structure, basis of depart mentation,
framework of authority-responsibility structure etc. Induction and orientation programmers
enable trainees know about the organization. They introduce the trainees to the organization and
help them carry out their work effectively. Step # 5. Training and Development:
The employees may not be able to fully satisfy the job requirements. Their performance may be
short of planned performance. Training increases the skills and competence of employees to
improve their performance.
Job related skills (to improve current and potential performance) can be increased in two ways:
(i) Training and
(ii) Development
Training increases employees’ job-related skills and performance on the current job.
Development improves their performance on future jobs. It develops their ability to assume jobs
of higher skill, competence and responsibility.
Step # 6. Performance Appraisal:
It measures actual performance with standard performance. Performance appraisal means
appraising the performance of employees on a continuous or intermittent basis and providing
them the feedback. It ranks employees in the order of merit and finds candidates suitable for
promotion to higher positions.
Step # 7. Transfers:
After employees are ranked according to performance, they are transferred to higher, lower or
different positions at the same level.
Transfers can take the following forms:
1. Promotions:
Employees whose performance is good are promoted to higher positions.
2. Demotions:
Employees whose performance is poor and below standards are denoted to lower positions. This
practice is generally not followed as it negatively affects morale and motivation to work.
3. Transfer at the same level:
When employees do not perform well at their jobs, they are transferred to other departments
where job activities are more suitable to their skills and interest.
Step # 8. Separations:
When employees are not able to cope with the environment in the organization and training
programs remain ineffective to improve their skills, it is in the interest of the organization and
the individuals that employees separate themselves from this enterprise and join another
organization where their job potential can be better exploited