Unit-1

Few definitions of Management.

A 'Management Is a distinct process consisting of planning, organising, actuating and
controlling; utilising in each both science and art, and followed in order to accomplish pre-
determined objectives."
George R Terry (1877 - 1955)

"Management is the art of getting things done through others and with formally organised groups."
Harold Koontz (1909-1984)

Peter Ferdinand Drucker

(November 19, 1909 – November 11, 2005)
"Management may be defined as the process by means of which the purpose and objectives of a
particular human group are determined, clarified and effectuated"
Management is a multipurpose organ that manage a business and manages Managers and manages
Workers and work.

"Management is the art of knowing what you want to do and then seeing that they do it in the best and
the cheapest may."
Frederick Winslow Taylor (March 20, 1856 – March 21, 1915)

What is management?
Management is the process of planning and organising the resources and
activities of a business to achieve specific goals in the most effective and
efficient manner possible
Functions of Management
Management is defined as the procedure of organising, directing, planning and controlling the
efforts of organisational members and of managing organisational sources to accomplish
particular goals.

 Planning is the purpose of ascertaining in advance what is supposed to be done and who has
to do it. This signifies establishing goals in advance and promoting a way of delivering them
effectively and efficiently. In an establishment, the aim is the obtainment and sale of
conventional Indian handloom and workmanship articles. They trade furnishings,
readymades, household items and fabrics made out of classical Indian textiles.
 Organising is the administrative operation of specifying grouping tasks, duties, authorising
power and designating resources needed to carry out a particular system. Once a definite
plan has been set for the completion of an organisational intent, the organising party
reviews the actions and resources expected to execute the program. It ascertains what
actions and resources are needed. It determines who will do a distinct job, where and when
it will be done.
 Staffing is obtaining the best resources for the right job. A significant perspective of
management is to make certain that the appropriate people with the apt skills are
obtainable in the proper places and times to achieve the goals of the company. This is also
called the human resource operations and it includes activities such as selection, placement,
recruitment and coaching of employees.

 Directing involves directing, leading and encouraging the employees to complete the tasks
allocated to them. This entails building an environment that inspires employees to do their
best. Motivation and leadership are 2 chief elements of direction. Directing also includes
communicating efficiently as well as managing employees at the workplace. Motivating
workers means simply building an atmosphere that urges them to want to work. Leadership
is inspiring others to do what the manager wants them to do.
 Controlling is the management operation of controlling organisational achievement towards
the accomplishment of organisational intentions. The job of controlling comprises
ascertaining criteria of performance, computing the current performance, comparing this
with organised rules and taking remedial action where any divergence is observed. Here
management should ascertain what activities and outputs are important to progress, how
and where they can be regulated and who should have the power to take remedial
response.
Principles of Management
Henry Fayol, also known as the ‘father of modern management theory’ gave a new perception of the
concept of management. He introduced a general theory that can be applied to all levels of management
and every department. The Fayol theory is practised by the managers to organize and regulate the internal
activities of an organization. He concentrated on accomplishing managerial efficiency.
The fourteen principles of management created by Henri Fayol are explained below.
1. Division of Work-
Henri believed that segregating work in the workforce amongst the worker will enhance the quality of the
product. Similarly, he also concluded that the division of work improves the productivity, efficiency,
accuracy and speed of the workers. This principle is appropriate for both the managerial as well as a
technical work level.
2. Authority and Responsibility-
These are the two key aspects of management. Authority facilitates the management to work efficiently,
and responsibility makes them responsible for the work done under their guidance or leadership.
3. Discipline-
Without discipline, nothing can be accomplished. It is the core value for any project or any management.
Good performance and sensible interrelation make the management job easy and comprehensive.
Employees good behaviour also helps them smoothly build and progress in their professional careers.
4. Unity of Command-
This means an employee should have only one boss and follow his command. If an employee has to follow
more than one boss, there begins a conflict of interest and can create confusion.
5. Unity of Direction-
Whoever is engaged in the same activity should have a unified goal. This means all the person working in
a company should have one goal and motive which will make the work easier and achieve the set goal
easily.

6. Subordination of Individual Interest-

This indicates a company should work unitedly towards the interest of a company rather than personal
interest. Be subordinate to the purposes of an organization. This refers to the whole chain of command in a
company.
7. Remuneration-
This plays an important role in motivating the workers of a company. Remuneration can be monetary or
non-monetary. However, it should be according to an individual’s efforts they have made.
8. Centralization-
In any company, the management or any authority responsible for the decision-making process should be
neutral. However, this depends on the size of an organization. Henri Fayol stressed on the point that there
should be a balance between the hierarchy and division of power.
9. Scalar Chain-
Fayol on this principle highlights that the hierarchy steps should be from the top to the lowest. This is
necessary so that every employee knows their immediate senior also they should be able to contact any, if
needed.
10. Order-
A company should maintain a well-defined work order to have a favourable work culture. The positive
atmosphere in the workplace will boost more positive productivity.
11. Equity-
All employees should be treated equally and respectfully. It’s the responsibility of a manager that no
employees face discrimination.
12. Stability-
An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job
security to their employees.
13. Initiative-
The management should support and encourage the employees to take initiatives in an organization. It will
help them to increase their interest and make then worth.
14. Esprit de Corps-
It is the responsibility of the management to motivate their employees and be supportive of each other
regularly. Developing trust and mutual understanding will lead to a positive outcome and work
environment.
This 14 principles of management are used to manage an organization and are beneficial for prediction,
planning, decision-making, organization and process management, control and coordination.

Evolution of Management Thoughts (Managerial Function)

Management is studied in business academics since earlier times and it is considered as an
integral part to understand business operations. People have been changing and
redesigning organizations for centuries. Though the 20th century is noticeable in history as
an 'Era of scientific management', still it does not indicate that management tactics were
not used in yester years. Many studies indicated that Management theory evolved with
"scientific" and "bureaucratic" management that used measurement, procedures and
routines as the basis for operations. Firms developed hierarchies to apply standardized rules
to the place of work and penalized labour for violating rules. With the "human relations"
movement, companies emphasized individual workers. Modern management theories,
including system theory, contingency theory and chaos theory, focus on the whole
organization, with employees as a key part of the system.

The evaluation of management can be categorized in to different parts:

 Pre-Scientific Management Era (before 1880),

 Classical management Era (1880-1930),

 Neo-classical Management Era (1930-1950),

 Modern Management era (1950-on word).

Classical Management includes Scientific Management School, Administration Management

School, and Bureaucracy Management. Neo- classical Management includes Human relation
school and Behavioural Management School. Modern Management includes Social system
school, Decision theory school, Quantitative Management School, System Management
School, and Contingency Management School.

Classical Approach:

The Classical Approach is one of the oldest approaches in management and is also known by various
names, i.e., Empirical, Functional and Management Process Approach.
The classical theory represents the traditional thoughts about organisations. It is based on the
prototype industrial and military organisation. The theory concentrates on organisation structure
and their management.
The classical writers include Taylor, Fayol, Weber, Gullick, Urwick, Mooney and Reiley and others.
They placed emphasis on work planning, the technical requirements, principles of management,
formal structure, and the assumption of rational and logical behaviour.
This theory incorporates three view points:
(i) Taylor’s view point,
(ii) Fayol’s Administrative theory,
(iii) Weber’s Bureaucracy.

All these writers concentrated on structure and that why their approach sometimes characterized as
‘structural framework of organisation.’ F.W. Taylor insisted on application of scientific methods to
the problems of management. Henry Fayol suggested fourteen principles of management and their
universal application.
Max Weber introduced rationality in organisation. It is characterized by division of labour,
specialization, structure, personnel competency, etc.
Classical approach is based on three main points i.e.,
i. Scientific management,
ii. Administrative and
iii. Bureaucratic theory.
i. Scientific Management Theory:
Frederick Winslow Taylor is acknowledged as the “father of scientific management”. Probably no
other person has had a greater impact on the early development of management.
His experience as an apprentice, a common labour, a foreman, mechanic and then the chief Engineer
gave opportunity to know first-hand problems and attitudes of workers and to see the great
possibilities for improving the quality of management. Other contributors like Frank and Lilian
Gilbreth, Henry Gantt Emerson also suggested the effective use of human beings in industrial
organisation.
They studied the use of human beings as adjuncts to machines in performance of routine
tasks. It was only Taylor who gave concrete shape to the theory of scientific management.
He started his career as a labour in Midvale steel company in 1874 after discontinuing his study.
After that he was promoted as a mechanic, and then he was appointed as the chief Engineer of the
company within six years. After obtaining the graduation in physics and mathematics and later on
Master of Engineering, he was employed by the Bethlehem steel company to increase output; which
had been a serious problem.He invented high speed steel cutting tools and spent most of his life as a
consulting Engineer. However, his major concern was to increase efficiency in production, not only
to lower costs but also to make possible increased pay for workers through their higher productivity.
Scientific management employs scientific methods to the problems of management. He defined
scientific management as the art of “Knowing exactly what you want men to do and then seeing that
how they do it in the best and the cheapest way.” He advocated scientific task setting based on time
and motion study, standardization of materials, tools and working conditions, scientific selection and
training of workers and so on.
But he was confined to management at the top level. Most of his experiments were carried out in
Midvale steel company and Bethlehem steel company. The process of initiation of experiment
carried on Midvale steel company was based on ‘time and motion study’, and further at Bethlehem
also.
However, he conducted experiments mainly on three functions to find out the best way of
working:
(a) The pig iron handling,
(b) The shoveling experiments, and
(c) The metal cutting experiments.
He explained the basic philosophy of management in the following terms:
(a) Replacing rule of thumb methods with science,
(b) Scientific selection and training of workers,
(c) Co-operation of labour and management to accomplish work,
(d) Working for maximum output, rather than restricted output, and
(e) A more equal division of responsibility between managers and workers.
Taylor adopted ‘differential piece rate plan’ to motivate the workers for higher efficiency. According
to this plan, high wages in the form of incentive was provided to those workers who perform more
than standard work.
Mental Revolution:
Scientific management involves a complete mental revolution on the part of the working men
engaged in any particular establishment or industry, a complete mental change on the part of these
men as to their duties towards their work, towards their fellowmen, and towards their employers.

It involves equally complete mental change on the part of those on the managements’ front — the
foreman, the superiors, the superintendent, the owners, the Board of Directors — a complete
mental revolution on their part as to their duties towards their fellow workers in management.
Taylor advocated that without complete mental change on both the sides, scientific management
does not exist. The basic theme behind scientific management is to change the mental attitude of
the workers and the management towards each other.
He advocated that:
(i) There is a change in the mental attitude of the workers, and
(ii) There is also a positive mental change in the attitude of management.
He called the positive change in the attitude of workers and management as a revolution in
management.
He called it ‘Mental Revolution’ which has three implications:
(i) Effort to increase in production,
(ii) Creation of mutual trust and confidence, and
(iii) Developing scientific attitude towards problems.
He suggested management to find out the best methods of doing various jobs and introduced
standardized materials, tools and equipment to reduced wastages. Management must create
congenial environment for optimum efficiency. Congenial environment should be created through
the cooperation of workers and management; and it is only the congenial atmosphere that brings
out the maximum productivity.
Principles of Scientific Management:
To put the philosophy of scientific management into practice, Taylor and his associates suggested
the following techniques:
(1) Scientific Task Planning – Scientific planning suggests series of separate operations and function
which are already determined by the management. How the task is performed? What way? Who
performs it? What’s the procedure of performing the task? It provides the answers to these
questions.
(2) Functional Foremanship – Taylor evolved functional foremanship to supervise and giving various
directions. In this system, eight persons direct the activities of workers, out of them four persons are
related with planning functions and the remaining four are concerned with operating level-
Functional foremanship involves the duties of – (i) Route clerk, (ii) Instruction and clerk, (iii) Time and
cost clerk, (iv) disciplinarian, (v) Speed boss, (vi) Inspector, (vii) Maintenance foreman, and (viii) Gang
boss.
(3) Job Analysis – Work management has been suggested by Taylor. There is one best way of doing a
job which requires least movements, consequently less time and cost.
He advocated the analysis of work job with reference to:
(a) Time Study – Every work/job requires standard time to carry out under specific conditions. Time
study involves the determination of time a movement has to complete.
(b) Motion Study – Motion study involves the study of movement of both the workers and machines
so as to identify wasteful movements and performing only necessary movements.
(c) Fatigue Study – The fatigue study shows the time and frequency of rest. On the basis of this,
management should provide appropriate rest at appropriate intervals to increase the efficiency of
workers.
(4) Differential Piece Rate System – He advocated that there is direct link between, remuneration
and productivity for motivating employees. Taylor applied differential piece-rate system which is of
highly motivating technique.
Different piece rate system adopted on workers:
(a) Low rate for those who fail to achieve the standard output; and
(b) Higher rate for those achieving or exceeding the standard output.
The rate should be based on individual performance and on the position which he occupies. He
stressed for scientific determination of remuneration for workers.
(5) Standardization – Standardization helps to simplify work, to ensure uniformity of operations and
to facilitate companions of efficiency. Standards are laid down regarding work, materials, tools and
techniques, time, working conditions, etc. These things should be fixed in advance on the basis of
observations.
(6) Scientific Selection and Training – Workers should be selected on scientific basis, and on the basis
of their education, experience, aptitude, strengths, etc. Each element of selection should be
considered properly. A worker should be selected according to the requirement of work. Training
should be provided to workers to make them work efficiently.
(7) Co-Operation between Management and Workers – Scientific management succeeds through the
cooperation between management and workers. There should be a mental change to cooperate
with each other and to find out the way out of problem through scientific methods. Scientific
management depends upon the cooperation of these two. Taylor termed this cooperation as a
Mental Revolution.
Critical Evaluation of Scientific Management:
Scientific Management is more concerned about the activities at operation level in the organization,
rather than total functions. Similarly, they emphasized physiological variables affecting human
behaviour at work-place, both in terms at work efficiency and methods of motivation.
As such, the scientific management is more relevant to mechanization and automation-technical
aspect of efficiency. Even the mental change of both management and workers could be sought to
achieve maximum production.
So, scientific management has been criticized broadly on the following fronts:
(1) Scientific management is a mechanic aspect as it ignores the human element in the organization.
Workers are treated as mere extensions of machines devoid of any feeling and emotion. Taylor and
his associates treated workers as factors of production, as there is no value of their social and
psychological needs.
(2) Scientific management focused mainly on efficiency at the operation/shop level, as a
consequence organisation or industry has the importance on the areas of operational level. In this
sense, it also denotes as a field of industrial engineering.
(3) Scientific management emphasized that planning function should be separated from actual
performance and should be given to specialists. This is impracticable. Planning cannot be fully
separated from doing, because you are doing on planned basis; and if there is any change takes
place, you also try to absorb these changes in work. Planning and doing are two sides of the same
job.
(4) Scientific management advocated functional foremanship to bring specialization in the
organisation. But this is not applicable in practice as the worker cannot carry out instructions from
eight foremen. This violates the principles of unity of command.
(5) The approach of scientific management is criticized that it advocates close supervision and
control as to get maximum contribution. But this practice has limited use and only applicable in a
limited way at shop floor.
(6) This approach also advocates that standards are laid down regarding everything in the
organisation. However, standardization helps to simplify work, but to some extent. It is not confident
that the standardization of every task/activity brings out uniformity in operations and helps to
increase productivity.
(7) Workers are forced to do the standard work, and they are motivated to pay more if they achieve
the standard. So in the name of increasing efficiency, workers are forced to speed up their functions,
i.e., exploitation. And this also is not a type of motivation. They perform the least standard, they
have degraded and vice-versa. They force the workers to work hard, and this is clearly exploitation.
Finally, Taylor made a long-lasting contribution in management. Taylor was the first pioneer in
introducing scientific management reasoning to the discipline of management. Many of the
contributions provide the basis of modern management.
Really, scientific management provides a basic input to enliven the theories and approaches which
give reasoning to management. Simply, Taylor laid the foundation of modern management as a
science.
ii. Administrative Management Approach:
It was Henry Fayol who, for the first time, studied the functions and principles of management in a
systematic manner. The notable contributions have also been made by Oliver Sheldon, Haldane,
Luther Gullick, Mooney and Reiley, Urwick and many others. These defined management in terms of
certain functions and then laid down fourteen principles of management which are universally
applicable.
Henry Fayol was a French mining engineer turned chief administrator in a large French mining and
metallurgical company. In 1916, he published his famous book in French language Administration
Industrialle at Generale. It is in four parts of which the first part deals with classification of business
activities
Second part contain basic functions of management performed by manager; third part consists of
fourteen principles of general managements and fourth part deals with managerial qualities and
skills. Henry Fayol was the first person who emphasized managerial organisation and process. Fayol
tried to develop a complete theory of management. He discussed the principles of management and
recommended teaching in management.
Organizational Activities:
Henri Fayol found that industrial activities could be divided into six groups, or classified all
operations into six ways:
(i) Technical (Production),
(ii) Commercial (Buying, Selling and Exchanging),
(iii) Financial (Search and Optimum use of capital).
(iv) Security (Protection),
(v) Accounting (Balance sheet, Costing, Records), and
(vi) Managerial – (a) Planning; (b) Organising; (c) Commanding; (d) Coordinating; (e) Controlling.
He points out that these activities exist in every organisation. He pointed out that first five activities
are well known to a manager and the last managerial activity must have been approached by
managers at every stage. Fayol concentrated on, the analysis of managerial activities.
Fayol has divided his approach of studying management into three parts:
(i) Managerial qualities and training,
(ii) Principles of management; and
(iii) Elements of management.
Managerial Qualities and Training:
Henry Fayol identified the various qualities for a manager.
According to him these qualities are:
(i) Physical – Health, vigour and address.
(ii) Mental – Ability to understand and learn, judgement, mental vigour, and adaptability.
(iii) Moral – Energy, fitness, initiative, loyalty, tact and dignity.
(iv) Educational – Acquaintance with matters related to general functioning.
(v) Technical – Acquaintance with functions being performed.
(vi) Experience – Arising from work.
Principles of Management:
Fayol listed fourteen principles based on his experience. However, the list is not exhaustive. They are
summarized in the perspective. He noted that these principles are flexible and not absolute, and
must be usable regardless of changing and special conditions.
(Given in the notes already)
Elements of Management:
Fayol regarded the elements of management as its functions — planning, organising, commanding,
coordinating and controlling.
Fayol perceived that management should be viewed as a process consisting of five elements:
(i) Planning;
(ii) Organising;
(iii) Commanding;
(iv) Coordinating;
(v) Controlling.
He observes that planning is the most important function and a failure to plan properly leads to
inefficiency in the organization. Creation of organizational structure and commanding is necessary to
execute the plan.
Coordination integrates the activities, controlling asks whether everything is proceeding according to
plan. Fayol had emphasized that these principle is applicable everywhere. Since all the organisations
require managing, it follows that formulation of a theory of management is necessary for effective
teaching of the subject.
iii. Bureaucratic Approach of Organisation:
The next important form of classical approach is bureaucratic approach of organization. This
contribution has been given by a German sociologist Max Weber. This particular form of
organisation is well known in government and military organizations. Every type of organization
possesses some features of bureaucracy in some form; that is ranging between, ‘Line organizations’
to ‘free form organisation’.
It aims at high degree of precision, efficiency, objectivity and rationality in the organization to make
it more efficient. Weber’s theory recognizes rational-legal authority as the most important in the
organisation. However, Weber’s contention that there are three types of legitimate authority in the
organization – (i) Rational legal authority; (ii) Traditional authority; (iii) Charismatic authority.
Weber’s contention is based on the display of rational legal authority.
The model of bureaucracy suggested by Weber is based on the following features:
(i) Division of Work – It implies to divide and assign activities to various employees on the basis of
their abilities, skills and aptitudes to get the benefit of specialization. Work should be divided and
assigned to each employees in the organization to achieve high degree of precision,
(ii) Hierarchy of Authority – The bureaucratic structure is hierarchical in nature. All employees in
bureaucratic organization are attached to hierarchy of authority which is rational and legal in nature.
(iii) Rigidity in Rules and Regulations – Management standardizes operations and decisions.
Management prescribes procedure and set rules and regulations in bureaucratic organization to
regulate and control working behaviour of employees. They must be in compliance with procedures
and framework of rules.
(iv) Impersonality – The decisions are entirely governed by rules and regulations and are totally
impersonal. The employees have very formal and functional relationship among them. They have the
official relationship.
(v) Technical Competence – Human resources in the organisation are employed or selected on the
basis of technical competence, that is, what they know about the job. It is on the basis of job
requirements; they are selected and placed in the organisation.
Weber’s ideal bureaucracy has been designed to bring rationality and predictability of behaviour in
the organisation. It reduces subjectivity, because people have impersonal and formal relationship
and they have to comply with rules and regulations. Hierarchy of authority also helps to maintain
discipline. Division of labour leads to specialization and rationality brings effectiveness in decision
making.