PRINCIPLES OF MANAGEMENT

Management is defined as the process of getting activities completed efficiently with and through other
people. Management is the coordination and administration of tasks to achieve a goal. Such
administration activities include setting the organization's strategy and coordinating the efforts of staff
to accomplish these objectives through the application of available resources

1. purpose– every organization has to have one, even though they can be very different.
The purpose is typically expressed in terms of goals
2. people– every organization is composed of people.
3. structure– consists of rules and regulations that define and limit behavior of members of an
organization

LEVELS OF MANAGEMENT
Top Level Management:
Top level management consists of Chairman, Board of Directors, Managing Director, General
Manager, President, Vice President, Chief Executive Officer (C.E.O.), Chief Financial Officer (C.F.O.)
and Chief Operating Officer etc. It includes group of crucial persons essential for leading and directing
the efforts of other people. The managers working at this level have maximum authority.

2. Middle Level Management:

This level of management consists of departmental heads such as purchase department head, sales
department head, finance manager, marketing manager, executive officer, plant superintendent, etc.
People of this group are responsible for executing the plans and policies made by top level.

3. Supervisory Level/Operational Level:

This level consists of supervisors, superintendent, foreman, sub-department executives; clerk, etc.
Managers of this group actually carry on the work or perform the activities according to the plans of top
and middle level management.

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MANAGERIAL SKILLS

Managerial skills are the knowledge and ability of the individuals in a managerial position to
fulfill some specific managerial activities or tasks. This knowledge and ability can be learned and
practiced. However, they also can be acquired through practical implementation of required activities
and tasks. Therefore, each skill can be developed through learning and practical experience of the
individuals.

According to Robert L. Katz every manager need the following management skills. 3

1) Technical skills
Technical skill is the ability to perform a specialized task involving a particular method or process.
The tasks can be in the areas of engineering, business, computer, etc.

2) Conceptual and decision skills

Conceptual and decision skills are about a manager's ability,
 To recognize complex and dynamic issues;
 To examine the numerous and conflicting factors that influence these issues and problems;
 To resolve the problems for the benefit of the organization and its members.
You would use these conceptual and decision skills when you consider,
 The overall objectives and strategy of the organization;
 The interactions among different parts of the organization;
 The role of the business in its external environment.

3) Human relation Skills: Understanding about human skills for managers to extract work from
employees. The most significant role for managers is to effectively manage people in organization and
to give best output.
Human relations skills are also called Interpersonal skills. It is a capability to work with individuals.
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It assists the managers to comprehend, converse and work with others. It also helps the managers to
lead, encourage and develop team strength.
Human relations skills are necessary by all managers at all levels of management. All managers have to
work together.
These skills will allow managers to become leaders, to inspire employees to do best and complete task
successfully.
Some of human relation skills include Sensitivity to others, treating people fairly, Listening intently,
Communicating warmth, Establishing rapport, Understanding human behaviour, Empathy, Tactfulness,
Cooperative team member, Avoiding stereotyping people, Feeling comfortable with different kinds of
people, Fun person to work with, Treating others as equals, Dealing effectively with conflict, Helping
clarify misunderstandings, Creating an environment of social interaction.

Apart from Prof. Robert Katz's three managerial skills, a manager also needs (requires) following
additional managerial skills.

4) Communication Skills: Communication is an important process, which involves organising,

selecting and transmitting symbols in correct way to ensure that listener perceives and recreates in his
own mind the intended meaning of the communicator. Communication involves the initiation of
meaning in the listener, the transmission of information and thousands of probable stimuli.
Communication skills are congruently necessary at all levels of management. Managers must have
capability to communicate the plans and policies to the workforce. Correspondingly, they must listen
and solve the problems of the workers. They must promote a free-flow of communication in the
organisation.

5) Time-Management Skills
Managers face multiple demands on their time, and their days are usually filled with interruptions.
Ironically, some technologies that were supposed to save time, such as voicemail and e-mail, have
actually increased workloads. Unless you develop certain time-management skills, you risk reaching
the end of the day feeling that you’ve worked a lot but accomplished little. What can managers do to
ease the burden? Here are a few common-sense suggestions:

1) Prioritize tasks, focusing on the most important things first.

2) Set aside a certain time each day to return phone calls and answer e-mail.
3) Delegate routine tasks.
4) Don’t procrastinate.
5) Insist that meetings start and end on time, and stick to an agenda.
6) Eliminate unnecessary paperwork.

6) Decision-Making Skills
Every manager is expected to make decisions, whether alone or as part of a team. Drawing on your
decision-making skills is often a process in which you must define a problem, analyze possible
solutions, and select the best outcome.

7) Administrative Skills: Senior level executives must possess administrative skills. The top-level
managers should recognize how to make plans and policies. They should also know how to complete

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work with in timeframe. They should be able to organize different activities of the organisation. They
should also be able to control the all organisational functions.

8) Leadership Skills: Leadership skill is the capability to influence human behaviour. A manager must
develop leadership skills to stimulate the workers. These skills assist the Manager to guide workers and
encourage them to do work in timely manner. Leadership is the ability to empower others to create
new management or human systems to efficiently accomplish change through organizational goals and
decision making.

9) Problem Solving Skills: Problem solving skills are also known as Design skills. A manager must be
proficient to identify a problem. He should also acquire an ability to explore the best solution for
solving any particular problem. This requires intelligence, experience and up-to-date knowledge of the
advanced technological developments. Six steps make up the problem solving process: Defining,
Identifying, Understanding, Generating Solutions, Analysing, and Choosing

Competencies of successful managers

1. Proficient communication skills: Managers who are skillful communicators listen with full
attention to employees concerns, adapt their communication based on each employee’s personality
style, and manage conflict in a way that all parties experience a satisfactory outcome.

2. Understand multigenerational workforce trends: Effective managers understand the needs of the
different generations and adapt accordingly.

3. Provide high-impact performance feedback: To help employees to develop to their full potential,
effective managers know how to provide frequent positive and constructive feedback in a way that
motivates both under-performing and high-performing employees.

4. Focus on employees’ career development needs: A key reason high-performing employees stay at
their jobs is because they have the opportunity to learn and grow. Effective managers develop career
development plans with their employees and follow up to ensure the plans are implemented.

5. Maximize your leadership strengths: A strengths-based management style ensures that managers
are aware of their own strengths and interact with employees and the leadership team in a way that
capitalizes on their own strengths. Effective managers are also aware of their employees’ strengths and
consciously create development opportunities that maximize employees’ strengths.

6. Advocate organizational changes necessary for developing and keeping top talent:
Organizations often need to make adaptations in their structure and policies in order to develop and
keep a high-achieving workforce. Effective managers are skilled at helping senior management
understand the need to make changes that satisfy employee needs and create a thriving organization.

Ways to Improve Your Management Skills

1. Define your vision and broadcast it. In order to engage your team to deliver the best to their
abilities, you need to have a clear vision of your company’s reason to be.

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2. Get personal to get engagement. When you find out what your team wants, you can transmit to
them the possibilities that will trigger their engagement to your vision.

3. Recognize the power of influence through personal branding. Personal branding is the image or
impression in the mind of others about you, your team, or your company. Good personal branding gives
you the power of influence. Eg set a clear company dress code to ensure consistency across the team.

4. Maintain great communication. Communicate well and often. Use verbal communication to
engage your team. Use written communication to reinforce your vision, your goals, and their
possibilities.

5. Understand the power of gratitude. People often underestimate the power of gratitude. Saying,
“Thank you” or “Well done,” to an employee who successfully completed a task is a powerful
motivator—even better than money. Publicly acknowledging the contributions of your employees is
even better.

6. Make work more fun. When you enjoy working for the company and/or the people you work with,
you are most likely to stay. However, it’s important to find the right balance so employees can stay
engaged with your vision. If your team enjoy themselves, and what they do, they will be more
motivated to move mountains with you.

7. Handle toxic employees. Schedule one-on-one meetings to identify the source of their discontent.
This will allow you to find out if the source of their behavior is personal or professional.

8. Admit your mistakes. It can make you a better manager. A true leader always has humility. It brings
you closer to the people. By earning the respect of your team, you build your strength and their loyalty
to you.

9. Learn how to manage former co-workers. Arrange a group meeting and one-to-one meetings to
start reshaping your relationship. Discuss how your role and responsibilities have changed and how it
will benefit them, too.

MANAGEMENT ENVIRONMENT
Business establishes, grows or operates and dies in environment. It exchanges resources in
environment. It collects inputs i.e. Man money, materials, machines etc. And provides output i.e. Goods
and services in the environment. Environment means surrounding. Business environment defines as a
force that affects on organizational performance. It includes internal an eternal factors. It provides
opportunities and threats.

1. Internal environment It is defined as all the forces or conditions that are available within an
environment that affects on organization and business. It is also known as controllable factors because
business can control them. It includes

a). Employees Business hires employees. It is the major internal factor. It works inside the business. It
can be controlled by the business. Employees differ in skill, knowledge, morality, and attitude and so
on. When managers and employees have difference in goals and beliefs then conflict may arise. The

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task of management is to divide the work and assign the work to the suitable employee and handle the
conflict.

b). Shareholders:. Shareholders have the right of ownership, power of management and voting right.
The actual management of organization is carried out by elected representative of shareholders. Boards
of directors have the responsibility of overseeing the management of organization. It plays the major
role in formation of objectives, policies, strategies of the organization as well as their implementation.

c). Organization structure: It is located inside the organization. The arrangement of various facilities,
pattern of relationships among the various department, responsibility, authority and communication is
the organization structure. It also included specialization and span of control.

d). Organization culture: The sets of values that help the members to understand what organization
stand for how it does work, what it considers, cultural values of business forces of business and so on.
It helps in direction of activities.

2. External environment (PEST) All the forces and condition that cannot be controlled by the
business is called external environment. It is also known as uncontrollable factors because business
can’t control them. It is located outside the business. It affects on organizational performance.

a). Economic environment. It indicates the condition of economy in which business organization
operates. It has continuous and great impact on business. It includes national income, production,
inflation, savings, investment, price, government activities. Business person must have constant watch
on this factor.

b). Political or legal environment It is defined as rules and regulations determined by the government.
Business must fulfill demand of government. There should be non violation of rules and regulation of
government. Business should avoid unfair trade and should provide essential information to the
government.

c). Social environment. Business must have good environment where a business can be established
neatly. Business also helps in employment opportunities generation. There should be socio-cultural
understanding and application of anti pollution measures.

d). Technological environment: It defines about the methods available for converting resources into
product or services. It transforms inputs into output. Input means material, capital, man, machine. It
affects on business. It helps to change the level of job, skill, and product and so on. There can be
innovation, development of scientific techniques which encouraged mass production and distribution.

MANAGEMENT AS A SCIENCE
Management as a discipline fulfills the above because:
i) It has emerged as a systematic body of knowledge with its own principles.
ii) The application of these principles helps any practicing manager to achieve the desired goals.
iii) Management is dynamic because it has borrowed heavily from other disciplines to help solve
management problems, disciplines e.g. Psychology, Sociology, Philosophy, Religion, Economics.

Management cannot be viewed as an exact science but rather inexact science because of the
following:

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i) By definition, management involves getting things done through other people who are unique in
respect of aspirations, attitudes, perceptions e.t.c. Their differences are so obvious that standard results
may not be achieved in otherwise similar environment.

ii)The behavior of human beings cannot be predicted accurately and therefore standards and ready
made solutions cannot be prescribed.

iii) Management is concerned with the future which is complex and unpredictable so that if there are
changes in the environment, the management plans will be affected.

iv) Management plans are prone to change due to the changes in the external environment e.g.
Technological changes, economic and socio-cultural changes.

Management as an art
i) The word Art refers to the know how or ways of doing to accomplish the desired results.
ii) The focus is on the skill with which the activities are performed.

iii) The constant practice of the theoretical concept (knowledge base) contributes to the formation and
sharpening of skills.

iv) Management as an art stresses the need for practice where in management graduate from the
best institute may not be very effective and therefore requires creativity and practice

APPROACHES TO MANAGEMENT
1) Classical approach (managing work and organization)
It was the first attempt to study modern management when managers were seeking answers to the basic
and practical questions e.g. How to increase efficiency and productivity. Their concern was not about
workers, but work in terms of tools and equipment. The second concern was about the organization
which was to provide the necessary guidelines including procedures, policies, plans, methods e.t.c

2) Behavioral approach (managing people)

It was developed because the classical approach could not achieve the total efficiency and work place
harmony.
The behavioral approach uses the concept of psychology, sociology, philosophy, religion, economics
e.t.c, to help managers understand the human behavior at work place.
The emphasis in this approach is on the interrelationship workers, work and the organization.
For work place harmony to be realized, the following was recommended:-
(a). Motivation – The workers performance will increase if they are motivated and managers should
give it a lot of concern.
(b). Communication – The organization should have open channels of communication for free flow of
information vertically and horizontally.
(c). Formation of groups – Workers should be allowed to form and join social groups to advance their
interest. The managers should not condemn them but reach out to the perceived leaders of such groups
for help.

3) Managerial roles approach

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In his research, Mintzberg said that what managers do can best be described by looking at the roles they
play at work. The term management role refers to specific categories of managerial behavior. He
identified 10 identified roles of a manager played in an organization which falls into 3 basic categories:
Interpersonal roles, Informational roles, Decisional roles.
A) Interpersonal Roles These roles relate to the manager’s behavior that focuses on interpersonal
contact Interpersonal roles are roles that involve people (subordinates and persons outside the
organization) and other duties that are ceremonial and symbolic.

1. Figurehead
The figurehead performs symbolic legal or social duties. All social, inspiration, legal and ceremonial
obligations. In this light, the manager is seen as a symbol of status and authority.

2. Leader
The Leader builds relationships with employees and communicates with, motivates, and coaches them.
Duties are at the heart of the manager-subordinate relationship and include structuring and motivating
subordinates, overseeing their progress, promoting and encouraging their development, and balancing
effectiveness.

3. Liaison
The liaison maintains a network of contacts outside the work unit to obtain information. Describes the
information and communication obligations of a manager. One must network and engage in
information exchange to gain access to knowledge bases.

B) Informational Roles
Informational roles involve receiving, collecting, and disseminating information.

4. Monitor
The monitor seeks internal and external information about issues that can affect the organization.
Duties include assessing internal operations, a department’s success and the problems and opportunities
which may arise. All the information gained in this capacity must be stored and maintained

5. Disseminator
The disseminator transmits information internally that is obtained from either internal or external
sources. Highlights factual or value-based external views into the organization and to subordinates.
This requires both filtering and delegation skills.

6. Spokesperson
The spokesperson transmits information about the organization to outsiders. Serves in a PR capacity by
informing and lobbying others to keep key stakeholders updated about the operations of the
organization.

D) Decisional Roles

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Decisional roles revolved around making choices. Managers’ interpersonal role leads to decisional
roles. Information and resources that are collected and gathered by the interpersonal make a manager
able to play the decisional roles or responsibilities that he is obligated to.

7. Entrepreneur
The entrepreneur acts as an initiator, designer, and encourage change and innovation. Roles encourage
managers to create improvement projects and work to delegate, empower and supervise teams in the
development process.

8. Disturbance handler
The disturbance handler takes corrective action when the organization faces important, unexpected
difficulties. A generalist role that takes charge when an organization is unexpectedly upset or
transformed and requires calming and support.

9. Resource allocator
The resource allocator distributes resources of all types, including time, funding, equipment, and
human resources. Describes the responsibility of allocating and overseeing financial, material and
personnel resources.

10. Negotiator
The negotiator represents the organization in major negotiations affecting the manager’s areas of
responsibility is a specific task which is integral for the spokesman, figurehead, and resource allocator
roles.
THEORIES OF MANAGEMENT
Our study of the theory of management will focus on the three well established schools of management
theory.
1) The Classical School
2) The Behavioural School
3) The modern theories

A) Classical Management Theories

It is the oldest theory of management and is, therefore, called the traditional theory of management. The
classical viewpoint finds ways to manage business organisations effectively. It includes management
theories that provide foundation to the study of management. It is the first step towards the study of
management as a distinct field of study.

Features:
1. It includes some of the early works on management which provide foundation to the modern
management theory.
2. It attempts to find methods that increase output of workers.
3. Employees have strong economic needs which can be satisfied through financial incentives.

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4. It stresses on formal structure of jobs and work schedules to satisfy individual and organisational
needs.
5. It views organisations as closed systems which do not interact with the external environment.
6. It develops a set of ‘management principles’ which universally apply to all organisations : business
and non-business.

Three main theories that developed in the classical school of thought are:
a. Taylor’s Scientific Management Theory,
b. Fayol’s Administrative Management Theory
c. Weber’s Bureaucracy Theory.

a) Scientific theory of management

It was founded by Fredrick Taylor and it puts emphasis on scientific thinking where managers MUST
give justification for decision making. During the beginning of the 20th century, skilled labour was
scarce in the United States. This affected industrial productivity. Efficiency of workers had to be
increased and, thus, management thinkers worked on how to increase labour efficiency to increase
productivity. They thought of deleting or combining the operations of work.
.
Objectives of the Theory
i) To use a lot of skills and knowledge in the production process.
ii) To revolutionize the whole process of production and marketing by having professionals in charge.
iii) To standardize the plans, tools, materials and working conditions in order to increase production.
iv) To reduce the possibility of slackness in production as a result of accidents.
v) To help the workers through proper guidance.
vi) To increase the level of wages, profits and customer service to the highest levels.

Principles of the Theory

(i). The principles of task idea
It states that favorable conditions at work will make the workers to perform miracles and increase
productivity.
(ii). The principle of standardization
According to this principle, the work activities and method of production should be uniform to avoid
biasness so as to achieve the quality product/service.
(iii). The principle of selection and training
It states that proper policies and guidelines be formulated to ensure that only qualified personnel are
employed and those without the skills be trained.
(iv). The principle of division of work
It states that division of work should be undertaken because it leads to specialization which further
leads to increased production.
(v). The principle of proper use of plant
It states that the organization's resources both human as well as physical should be put to proper use.
The managers should minimize their misuse.
(vi). The principle of planning

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- It states that planning should be the first function for any manager because it helps to achieve the
organizational goals with ease and without conflicts.
(vii). The principle of healthy working environment.
It states that the work environment should be worker friendly so as to achieve quality output.
(viii) The principle of incentives
It states that the organization should their employees reasonable salaries.

Advantages of the theory

(i). Uniformity It gave birth to standardization of tools, working methods e.t.c which led to uniformity.
(ii). Incentives Because of incentives, the workers performance increased greatly.
(iii). Wastage It reduced the level of wastage in production process through scientific selection and
training.
(iv). It puts emphasis on better utilization of available organization's resources.
(v). The system provides for the satisfaction of the needs of the customers by providing
high quality product/services at lower prices.
(vi). It puts emphasis on good harmonious relationships between workers and management.
(vii). It puts emphasis on proper selection, training and promotion of employees.
(viii). It has led to specialization which in turn led to increased productivity and job satisfaction.

Disadvantages of the theory

1. It puts a lot of emphasis on employee incentives but less on compensation in an event of an accident.
2. It has overlooked the human desire for job satisfaction.
3. It assumes the social needs of workers such as forming and joining a trade union, welfare society
e.t.c
4. The techniques of scientific management dehumanize the workers by making them to work like
mindless machines.
5. It rules out any bargaining about wages by emphasizing on the manager setting salaries and wages.
6. It gives too much power to managers which cause conflict and resistance.

b) Administrative Management Theory

Administrative Management Theory is another well known Classical Management Theory which was
developed by Henry Fayol in 1916. It is also called Fayol Administrative Theory. Fayol was a senior
manager. He developed this theory on his personal experience. This theory is about business
management as well as general management. Its main focus is management. He introduced six
functions and fourteen principles of management in his theory. Primary six functions of management
are as under:
Functions of Management
a) Forecasting
b) Planning
c) Organizing
d) Commanding
e) Coordinating
f) Monitoring

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Fayol’s fourteen principles of management
1. Division of labor :The most people specialize the more efficiency they can perform their work. This
principle is epitomized by the modern assembly line.

2. Authority: Managers must give orders so that they can get things done while this format give them a
right to command managers willl not always compel obedience unless they have Personal authority
(such as relevant )expert as well

3. Discipline members in an organization : need to respect the rules and agreement that govern the
organization .
– To fayol ,discipline leadership at all levels of the organization fair agreements and judiciously
enforced penalties for infractions.

4. Unity of commands – Each employee must receive instruction from one person,fayol believe that if
employee reported.
– More than one manager conflict in instruction and confusion in of authority would result.

5. Unity of direction: Those operation with in the same organization that have the same objective
should be directed by only one manager using one plan.
– For example the personnel department in the company should not have a wo directors each with a
different hiring policy.
6. Subordinate of individual interest to common good: In any undertaking the interest of employees
should not take the precedence over the interest of organization as a whole

7. Remuneration: Compensation of work done should be common to both employees and employers.
Management Science I Prof Institute of Technology Madras
8. Centralization: Decreasing the role of subordinates in decision making is centralization, increasing
their role is decentralization.
– Fayol believed that the managers should retain the final responsibility.
– But should at the same time give their subordinate enough authority to do the jobs properly.
– The problem is finding the proper degree of centralization in each case.

9. The hierarchy The line of authority in an organization should represent in the neat box and the line
of chart runs in order of rank from top management and lowest levels of enterprise.

10. Order: Materials and the order should be in the right place at the right time.
People – In particular should be in job or position they are most suited to.

11. Equity: Managers should be fair and friendly to their subordinate.

Management Science I Prof. M. of Technology Madras
12. Stability of staff: A high employee turnover rate undermines the efficient functioning of an
organization.

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13. Initiative:Subordinate should be given the freedom to conceive and carry out their plans even
though some mistake may result.

14. Esprit de corps:– Promoting team spirit will give the organization a sense of unity.
– To fayol even the small factor help to develop the spirit.
– He suggested for example the use of verbal communication instead of formal, written communication
whenever possible.

Taylor’s and Fayol’s theories are similar to each other with respect to the following:
1. Both the theories represent pioneering work in the study of management. They are the foundation to
the study of management.
2. Both Taylor and Fayol found ways to increase the output.
3. They emphasise on financial needs which can be satisfied through financial incentives.
4. They focus on formal jobs and work schedules to satisfy individual and organisational needs.
5. They view organisations as independent units with little or no interaction with the external
environment.
6. They develop a set of management principles important for industrial progress.
7. Both the theories are developed on practical experience in their respective companies.
8. Both emphasise that managerial qualities can be acquired. Therefore, organisations should attempt to
develop these qualities.

Points of differences:
While Taylor focused on efficiency of operating workers, Fayol aimed at improving efficiency of the
organisation as a whole. Fayol’s theory, therefore, has wider applicability.

The theories differ from each other on the following grounds:

1. Taylor is known as the father of scientific management while Fayol is known as the father of modern
management. He introduced the Administrative Management Theory.

2. Taylor emphasised on increasing productivity at the workers’ level while Fayol emphasised on
managing the organisation as a whole.

3. Fayol’s principles of functional management focus on the entire enterprise while Taylor’s principles
of scientific management focus on a segment of the enterprise — operating level.

4. Taylor emphasised on organisational productivity through increase in worker’s efficiency while

Fayol emphasised on overall administration of the organisation.

c) Bureaucratic Theory of Management

This theory was given by German Sociologist Max Weber so this theory is also called Weber’s Theory
of Bureaucracy. He formulates this theory in 1947 and named his work as Theory of Social and
Economic Organization. Main focus of his theory is organizational structure. He focused on dividing
organization into hierarchies and establishing strong lines of authority and control. He suggests that
organization should develop comprehensive and detailed standard operating procedures to perform
preplanned tasks.

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Principles of Bureaucratic Management Theory
1. Written Rules
According to this theory, there should be well standardized rules and regulations in organization. These
rules should well defined and in written foam.

2. System of Task Relationship

In organization, there should be established system to achieve the task and there should be relationship
between system and task of the organization

3. Specialized Training
Worker should be trained according to their assigned tasks. There should be different training for
different system of organization. Managers’ need managerial training as per their duties and workers
need work training of their job .

4. Hierarchy of Authority Like other Classical Theories, this theory also believes on the hierarchy of
authority from top level management to bottom level management. Authority should be assigned to
managers as per their positions in the firm in management pyramid. Traditional Authority, Charismatic
Authority and rational Authority are three type of Legitimate Authority. Rational Authority is major
focus of interest in this theory

5. Clear Identified Duties

There should be clear identified duties of every worker. Every worker must know what he/she has to do
whom he/she has to report.

6. Paper Work
Webber believes that everything in the organization should be written down. In this way, every system
in the organization will run systematically.

7. Fair Evaluation and Reward

There should be well established system of evaluation in the organization so that reward may be given
to the workers according to their commitment and competency .

8. Maintenance of Ideal Bureaucracy

Ideal bureaucracy should be generated in organization. Ideal bureaucracy can be generated through
proper training and reward system .

Advantages of bureaucracy
1. It eases the top management's effort in controlling their organization.
2. It leads to consistency of employees’ behavior which may lead to quality.
3. It eliminates the conflicting job duties because activities and responsibilities are well defined.
4. There is maximum utilization of resources, both physical as well as human.
5. The worker becomes a specialist through the principle of division of labor.
6. It helps to ease the goal attainment.

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Disadvantages of bureaucracy
1. It makes managers dictators because they have too much power.
2. There is too much paper work and therefore wastage of resources.
3. Employees end up thinking less and work like robots.
4. It may lead to high resistance to change because workers are not involved in
decision making.
5. It does not give room to participating managers.
6. The overall goal attainment is hampered due to many rules to be observed.

B). Behavioural Theory:

When principles of classical theory were put to practice, the responses at the work place were not very
positive. When researchers tried to analyse human behaviour at work, they found that classical theorists
viewed people as means of production and suggested ways to increase production. But unfortunately,
managers could not achieve the targets of production as people at the work place did not always behave
rationally. The focus was on mechanical side of the organisation and human side of the organisation
was totally ignored.

In behavioural theory, the focus shifted from workplace conditions to human side of the organisation.
The focus changed from job to workers who performed those jobs. ‘Production-oriented’ approach was
substituted by ‘people-oriented’ approach. Behavioural theory is a “perspective on management that
emphasises the importance of attempting to understand the various factors that affect human behaviour
in organisations.”

It recognises that employees’ behaviour is not affected by job conditions alone. Internal reactions to the
job situation also affect their behaviour.

Two main theories which promote this idea are:

a. Human Relations Theory
b. Behavioural Science Theory

a. Human Relations Theory:

The human relations theory was established by Elton Mayo, an Australian psychologist. He conducted
a series of experiments at the Hawthorne plants in the 1920s (now aptly named the Hawthorne
Experiment or the Hawthorne Studies). At the time, the prevailing management approach was
something called Taylorism, where workers were viewed as machines. However, following a series of
experiments on the employees of the Hawthorne plants, Mayo had different ideas.

He altered different elements of the work environment, like the level of lighting. But, what he found
surprised him.

The gist of his theory is that social factors—think things like job satisfaction, a sense of belonging, and
inclusion in decision-making—had a huge impact on people’s productivity and work performance.
Those were the real motivators for workers, and not the environmental factors (like lighting) he had set
out to study.

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He concluded that workers weren’t machines, but individuals who had unique preferences. Thus,
the human relations theory was born. Humans are complex, and their work behaviors are influenced
by a variety of factors

Evaluation:
1. The human relations theory focused on promoting organisational efficiency through satisfaction of
social and psychological needs of workers more than other needs.

2. Workers are part of the group where informal rather than formal communication and leadership are
more effective.

3. Managers get better results by changing their management style; participative approach is better than
authoritarian approach; managerial skills are more important than technical skills.

4. Financial incentives are not always as rewarding as non-financial incentives in affecting the human
behaviour.

b) Behavioural Science Theory:

Human relations theory lacked scientific vision to the study of human behaviour. This was considered
in the behavioural science theory. Elton Mayo and other researchers applied scientific methods to study
human behaviour at their work place.

While human relations theorists take simple view of human behaviour (they focus on interpersonal
relations), behavioural theorists take complex view of the work situation (they focus on the
performance of individuals and groups). The approach focuses not on individual behaviour (human
relations approach) but on group behaviour and relationship amongst different groups affected by
varied social and cultural beliefs.

They adopt concepts from various disciplines and test them in business organisations and laboratories
before they are accepted as management theories. Behavioural science theorists take wider view of
organisational behaviour. They apply the concepts of social sciences or behavioural science
(Psychology, Sociology and Anthropology) to understand the behaviour of human beings.

Features:
1. It emphasises on participative and group decision-making rather than individual decision-making.

2. It emphasises on self-direction and self-control rather than control by managers.

3. It suggests positive measures to improve the performance of sub-standard workers rather than taking
negative actions against them.

4. It considers organisation as a group of individuals and identifies the reasons why individuals join
groups and factors that influence the group behaviour. Informal groups and group norms are considered
important.

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5. Behaviour of people is different as members of group than as individuals.

6. While working together, people form informal groups which have their own norms. Group norms
have powerful influence over organisational efficiency.

7. It introduces the concept of ‘complex man’ over ‘social man’ with varied needs. According to
behavioural scientists, human behaviour is need-based and, therefore, people react differently to
different situations.

8. It appreciates conflict in the organisation. Conflict of opinion is considered desirable for human
development. The sociological approach to behavioural science theory recognises interaction amongst
people of social groups, their cultural relations and coordinates organisational activities with social and
cultural values of members of groups. It accepts that informal organisation co-exists with formal
organisation (characterised by formal leadership and well-defined authority- responsibility
relationships).

C) Modern Management Theory:

a)Management by objectives (MBO)
It is also known as management by results
- This is a modern method of setting organizational goals which subordinates work as a team in a
collaborative manner in setting the organizational goals.

MBO is based on two assumptions

i). Goals should start at the top then flow downwards to the rest of the organization.
ii).Through the process of collaboration, subordinates would become more accommodated and more
committed in achieving organizational goals without any resistance.

How MBO works

1. Top management scans through the environment and comes up with the overall goals and objectives.
2. The top management also identifies the organizational resources.
3. The overall goals and objectives are well communicated to all employees through their supervisors.
4. The subordinates each meets with their supervisors to discuss the superior goals as given and come
up with the critic and how the subordinates will assist in achieving the goals.
5. The subordinates are asked to set their individual goals in relation to the general objectives and
available resources.
6. Subordinates are then provided with resources and given time to pursue their goals at their own pace.
7. Each time the superior holds periodical meetings with the subordinates to evaluate the degree of goal
attainment.
8. At the end of the preferred period of time, the management and the subordinates meet to assess the
extent of goal attainment.
9. Those subordinates who have attained / achieved their goals are rewarded and asked to set other
goals. Those who have failed to attain their goals are given remedial action and then told to go back
again.

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Advantages of MBO
1. It leads to high motivation.
2. It leads to high performance and efficiency.
3. It is a basis of training.
4. It reduces high staff turnover.
5. It reduces conflicts and resistance that is related to change.
6. It acts as a basis for improving communication.
7. It saves to p management for self evaluation of both the management and subordinates.

Disadvantages of MBO
1. It is time consuming.
2. It is costly in terms of paper work.
3. It may lead to conflicts and resistance by the lazy workers.
4. Individual goals are very difficult to set.
5. It tends to overemphasize the short term goals at the expense of the long termones.
6. It leads to a lot of rigidity and avoidance of divergent thinking or creativity.
7. Environmental changes and conditions may weaken MBO e.g. changes in technology.
8. It may make the top managers and the management in general to be lazy.

b)The contingency approach

The contingency approach sometimes called (situation approach) was developed by the managers,
consultants and researchers who tried to apply the concepts of the major schools to the real life.
When methods highly effective in one situation failed to work in other situation they sought an
explanation. Why for example did an organization development work brilliantly in one situation and
fail miserably in another. Advocates of the contingency approach had a logical answer to such question.
Result differ because situation differs- a technique that work in one case will not work in other.

According to the contingency technique the managers job is to find which technique will in a particular
situation, under particular circumstances and at a particular time.
Best contributes to attainments of management goals, where workers need to encourage increasing
productivity.

c) System approach System means a complex whole, a set of connected parts or an organised body of
things. It is a set of parts or things which perform common functions. Rather than analysing parts of the
organisation independently, systems theory views the organisation as a whole which operates in the
larger external environment.
It assumes that each part bears relationship with every other part of the organisation and, therefore,
manager should view the organisation as a whole consisting of several inter-related parts.
a. The system approach to management views the organizations as a unified, purposeful system
composed of integral parts.
b.This approach gives managers a way of looking at the organization as a hole and as a part of the
larger external environment.

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c. Systems theory tells us that the activity of any segment of an organization affects, in varying degree
the activity of every other segment.
d.Production managers in a manufacturing plant,for example ,prefer long uninterrupted production runs
of standardized products in order to maintain maximum efficiency and low costs.
e. Marketing managers on the other hand who want to offer customers quick delivery of a wide range of
products would like a flexible manufacturing schedule that can fill special order on short notice.
f. Systems oriented production managers make scheduling decisions only after they have identified the
impact of these decisions on other department and on the entire organization.

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